Law on NatRes (50-72 1
On 1 February 1991 MARC REALTY filed a Petition for
LEE CHUY REALTY CORPORATION, petitioner, vs.
HON. COURT OF APPEALS AND MARC REALTY AND
DEVELOPMENT CORPORATION, respondents; G.R.
No. 104114 December 4, 1995
Is a judicial action to redeem coupled with consignation of
the price within the redemption period equivalent to a
formal offer to redeem under Art. 1623 in relation to Art.
1620 of the Civil Code? Corollarily, is a formal offer to
redeem accompanied with tender of payment a condition
precedent to the filing of an action for the valid exercise of
the right of legal redemption? Plainly stated, is the filing of
the action with consignation equivalent to a formal offer to
redeem?
A valuable piece of land in Malhacan, Meycauayan,
Bulacan, with an area of 24,576 square meters and
covered by OCT No. 0-5290 is disputed by petitioner Lee
Chuy Realty Corporation (LEE CHUY REALTY) and
private respondent Marc Realty and Development
Corporation (MARC REALTY). Originally the property was
co-owned by Ruben Jacinto to the extent of one-sixth and
Dominador, Arsenio, Liwayway, all surnamed Bascara,
and Ernesto Jacinto who collectively owned the remaining
five-sixths.
On 4 February 1981 Ruben Jacinto sold his one-sixth pro-
indiviso share to LEE CHUY REALTY. The sale was
registered on 30 April 1981. On 5 May 1989 the Bascaras
and Ernesto Jacinto also sold their share to MARC
REALTY. The sale was registered on 16 October 1989.
LEE CHUY REALTY claims that it was never informed of
the existence of the sale between MARC REALTY on one
hand and the Bascaras and Jacinto on the other, and that
on the contrary it was only upon inquiry from the Register
of Deeds of Bulacan that the sale was brought to its
attention. MARC REALTY contends otherwise. It insists
that LEE CHUY REALTY was verbally notified of the sale
and was in fact given a copy of the deed of sale.
On 13 November 1989 LEE CHUY REALTY filed a
complaint for legal redemption against MARC REALTY 1
and consigned in court a manager's check for 614,400. In
its Amended Answer with Counterclaim with Motion to
Dismiss, MARC REALTY insisted that the complaint be
dismissed for failure to state a cause of action there being
no allegation of prior valid tender of payment nor a prior
valid notice of consignation.
On 26 December 1990 the trial court 2 ruled in favor of
LEE CHUY REALTY holding that there was a prior valid
tender of payment and consignation. It further decreed that
"(n)either a separate offer to redeem nor a formal notice of
consignation are (sic) necessary for the reason that the
filing of the action itself, within the period of redemption, is
equivalent to a formal offer to redeem." 3
Certiorari, Prohibition with Temporary Restraining Order
and/or Writ of Preliminary Injunction with this Court. The
petition however was referred to the Court of Appeals
pursuant to Sec. 9, B.P. Blg. 129.
On 22 November 1991 the Court of Appeals rendered a
decision reversing that of the lower court and ruling that "a
prior tender or offer of redemption is a prerequisite or
precondition to the filing of an action for legal redemption."
It further ruled that "there must be tender of the
redemption price within the required period . . . because
the policy of the law is not to leave the purchaser's title in
uncertainty beyond the established 30-day period." LEE
CHUY REALTY filed a motion for reconsideration but it
was denied hence the present petition.
MARC REALTY contends that prior tender of payment is a
condition precedent to the filing of an action in court in
order to validly exercise the right of legal redemption. LEE
CHUY REALTY however argues that the filing of the
action itself is equivalent to a formal offer to redeem, which
is a condition precedent to the valid exercise of the right of
legal redemption.
We sustain LEE CHUY REALTY. Arts. 1620 and 1623 of
the Civil Code on legal redemption provide:
Art. 1620. A co-owner of a thing may exercise the
right of redemption in case the shares of all the other co-
owners or of any of them are sold to a third person. If the
price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
xxx xxx xxx
Art. 1623. The right of legal pre-emption or
redemption shall not be exercised except within thirty days
from the notice in writing by the prospective vendor, or by
the vendor, as the case may be. The deed of sale shall not
be recorded in the Registry of Property unless
accompanied by an affidavit of the vendor that he has
given written notice thereof to all possible redemptioners.
MARC REALTY would apply the ruling in Cabrera v.
Villanueva 4 and De la Merced v. De Guzman 5 where an
offer to redeem was required for the exercise of the right of
redemption. On the other hand, LEE CHUY REALTY
anchors its claim on Tioseco v. Court of Appeals, 6
Tolentino v. Court of Appeals, 7 and Belisario v.
Intermediate Appellate Court. 8 Specifically, in Cabrera v.
Villanueva 9 we held that for the legal and effective
exercise of the right of legal redemption one must make
the offer within the period set in Art. 1623. In other words,
if no claim or offer is made within thirty (30) days from
written notice, no action may be allowed to enforce the
right of redemption. But in Tolentino v. Court of Appeals,
10 Tioseco v. Court of Appeals 11 and Belisario v.
Intermediate Appellate Court 12 we adopted the view that

a formal offer to redeem, accompanied by a bona fide
tender of the redemption price, is not essential where the
right to redeem is exercised through a judicial action within
the redemption period and simultaneously depositing the
redemption price. The formal offer to redeem
accompanied by a bona fide tender of the redemption
price prescribed by law is only essential to preserve the
right of redemption for future enforcement even beyond
the period of redemption. The filing of the action itself
within the period of redemption is equivalent to a formal
offer to redeem.
A judicious scrutiny of the cases herein cited impugns the
impression of MARC REALTY that they enunciate
conflicting doctrines. On the contrary, we view them as
complementing one another. The Court of Appeals
erroneously concluded that a prior tender or offer of
redemption is a prerequisite or precondition to the filing of
the action for legal redemption, notwithstanding prevailing
jurisprudence holding that to avail of the right of
redemption what is essential is to make an offer to redeem
within the prescribed period. There is actually no
prescribed form for an offer to redeem to be properly
effected. Hence, it can either be through a formal tender
with consignation, or by filing a complaint in court coupled
with consignation of the redemption price within the
prescribed period. What is condition precedent to a valid
exercise of the right of legal redemption is either the formal
tender with consignation or the filing of a complaint in
court. What is paramount is the availment of the fixed and
definite period within which to exercise the right of legal
redemption. 13
In Hulganza v. Court of Appeals 14 the Court, citing
previous decisions, declared that the formal offer to
redeem, accompanied by a bona fide tender of the
redemption price, within the prescribed period is only
essential to preserve the right of redemption for future
enforcement beyond such period of redemption and within
the period prescribed for the action by the statute of
limitations. Where, as in the instant case, the right to
redeem is exercised through judicial action within the
reglementary period the formal offer to redeem,
accompanied by a bona fide tender of the redemption
price, while proper, may be unessential. The filing of the
action itself is equivalent to a formal offer to redeem.
In sum, the formal offer to redeem is not a distinct step or
condition sine qua non to the filing of the action in Court
for the valid exercise of the right of legal redemption. What
constitutes a condition precedent is either a formal offer to
redeem or the filing of an action in court together with the
consignation of the redemption price within the
reglementary period.
The doctrine in Tolentino, Tioseco and Belisario cases
was jettisoned by the Court of Appeals on the ground that
they do not involve legal redemption by a co-owner but by
a mortgagor. It concluded that the application of the rules
Law on NatRes (50-72 2
on legal redemption by a co-owner differs from the legal
redemption by a mortgagor. But the law does not
distinguish; neither should we. For sure, the principle in
the aforecited cases is applicable regardless of whether
the redemptioner is a co-owner or a mortgagor. Public
policy favors redemption regardless of whether the
redemptioner is a co-owner or mortgagor, although
perhaps with unequal force and effect since each is given
a fixed but different period. A co-owner desirous of
exercising his right of legal redemption is given a period of
thirty (30) days from notice of the sale within which to avail
of the right to redeem. 15 Under the free patent or
homestead provisions of the Public Land Act a period of
five (5) years from the date of conveyance is provided, 16
the five-year period to be reckoned from the date of the
sale and not from the date of registration in the office of
the Register of Deeds. 17 The redemption of extrajudicially
foreclosed properties, on the other hand, is exercisable
within one (1) year from the date of the auction sale as
provided for in Act No. 3135. 18
WHEREFORE, the petition for certiorari is GRANTED. The
decision of respondent Court of Appeals in CA-G.R. SP
No. 24220 dated 22 November 1991 is REVERSED and
SET ASIDE. The decision of the Regional Trial Court of
Malolos, Bulacan, Br. 7, in Civil Case No. 661-M-89 dated
26 December 1990 holding that the filing of the action for
legal redemption coupled with the consignation of the
redemption price is equivalent to a formal offer to redeem
as a condition precedent to the valid exercise of the right
of legal redemption, is REINSTATED.
Let the records of this case be REMANDED to the court of
origin for further proceedings in the light of this
pronouncement.SO ORDERED.
ONG CHING PO, YU SIOK LIAN DAVID ONG and
JIMMY ONG, petitioners, vs. COURT OF APPEALS
and SOLEDAD PARIAN, respondents.; G.R. Nos.
113472-73; December 20, 1994
This is a petition for review on certiorari under Rule 45 of
the Revised Rules of Court of the Decision of the Court of
Appeals dated July 15, 1993, which dismissed the petition
for certiorari in CA-G.R. CV Nos. 28391-92.
I
On July 23, 1947, Ong Joi Jong sold a parcel of land
located at Fundidor Street, San Nicolas to private
respondent Soledad Parian, the wife of Ong Yee. The
latter, the brother of petitioner Ong Ching Po, died in
January 1983; while petitioner Ong Ching Po died in
October 1986. The said sale was evidenced by a notarized
Deed of Sale written in English. Subsequently, the
document was registered with the Register of Deeds of
Manila, which issued Transfer Certificate of Title No. 9260
dated September 2, 1947 in the name of private
respondent.

According to private respondent, she entrusted the
administration of the lot and building to petitioner Ong
Ching Po when she and her husband settled in Iloilo.
When her husband died, she demanded that the lot be
vacated because she was going to sell it. Unfortunately,
petitioners refused to vacate the said premises.
On March 19, 1984, private respondent filed a case for
unlawful detainer against petitioner Ong Ching Po before
the Metropolitan Trial Court of Manila, Branch 26. The
inferior court dismissed her case. The dismissal was
affirmed by the Regional Trial Court, Branch 10, Manila.
The decision of the Regional Trial Court was, in turn,
affirmed by the Court of Appeals, which dismissed the
petition. The decision of the Court of Appeals became final
and executory.
Petitioners, on the other hand, claimed that on July 23,
1946, petitioner Ong Ching Po bought the said parcel of
land from Ong Joi Jong. The sale was evidenced by a
photo copy of a Deed of Sale written in Chinese with the
letter head "Sincere Trading Co." (Exh. "B"). An English
translation of said document (Exh. "C") read as follows:
Deed of Sale
I, Ong Joi Jong, a party to this Deed of Sale hereby sell in
absolutely (sic) manner a lot located on No. 4 Fundidor
Street, San Nicolas an (sic) area consisting 213 square
meters including a one-story house erected thereon unto
Mr. Ong Ching Po for the sum of P6,000.00 the receipt of
which is hereby acknowledged by me and consequently I
have executed and signed the government registered title
(sic) the said lot inclusive of the house erected thereon,
now belong (sic) to Mr. Ong Ching Po unequivocally. And
the purpose of this document is to precisely serve as proof
of the sale.
Addendum: I have acceded to the request of Mr. Ong
Ching Po into signing another document in favor of
Soledad Parian (She is the Filipino wife of Ong Yee,
brother of Ong Ching Po) for the purpose of facilitating the
issuance of the new title by the City Register of Deeds and
for the reason that he is not yet a Filipino. I certify to the
truthfulness of this fact.
Lot Seller: Ong Joi Jong
(Exhibits for the plaintiff, p. 4)
On December 6, 1983, petitioner Ong Ching Po executed
a Deed of Absolute Sale conveying to his children,
petitioners Jimmy and David Ong, the same property sold
by Ong Joi Jong to private respondent in 1947. On
December 12 1985, petitioners Ong Ching Po, Jimmy Ong
and David Ong filed an action for reconveyance and
damages against private respondent in the Regional Trial
Law on NatRes (50-72 3
Court, Branch 53, Manila, docketed as Case No. 85-
33962.
On July 26, 1986, private respondent filed an action for
quieting of title against petitioners Ong Ching Po and his
wife, petitioner Yu Siok Lian, in the Regional Trial Court,
Branch 58, Manila, docketed as Civil Case No.
86-36818. Upon her motion, the case was consolidated
with Civil Case No.
85-33962. On May 30 1990, the trial court rendered a
decision in favor of private respondent. On appeal by
petitioners to the Court of Appeals, the said court affirmed
the decision of the Regional Trial Court.
Hence, this petition.
II
According to petitioners, the Court of Appeals erred:
(1) When it gave full faith and credit to the Deed of
Sale (Exh. "A") in favor of private respondent, instead of
the Deed of Sale (Exh. "B" and its translation, Exh. "C") in
favor of petitioner Ong Ching Po.
(2) When it concluded that the acts of petitioners
were not acts of ownership; and
(3) When it ruled that no express nor implied trust
existed between petitioners and private respondent (Rollo,
pp. 17-18).
As stated by petitioners themselves, what is in dispute ". . .
is not so much as to which between Exhibit "A" and
"Exhibit "B" is more weighty, but whether this document is
what it purports to be (i.e., a deed of conveyance in favor
of Soledad Parian [private respondent] or it was only
resorted to or executed as a subterfuge because the real
buyer (Ong Ching Po) was an alien and it was agreed
upon between Ong Ching Po and his brother (Ong Yee,
Soledad Parian's husband) that the land be registered in
the name of Soledad Parian in order to avoid legal
complications and to facilitate registration and transfer and
that the said title would be transferred by Soledad to Ong
Ching Po or his successors-in-interest and that she would
be holding the title in trust for him" (Rollo, pp. 19-20).
We cannot go along with the claim that petitioner Ong
Ching Po merely used private respondent as a dummy to
have the title over the parcel of land registered in her
name because being an alien he was disqualified to own
real property in the Philippines. To sustain such an
outrageous contention would be giving a high premium to
a violation of our nationalization laws.
Assuming that Exhibit "B" is in existence and that it was
duly executed, still petitioners cannot claim ownership of
the disputed lot by virtue thereof.

Section 5, Article XIII of the 1935 Constitution provides, as
follows:
Save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the
Philippines.
Section 14, Article XIV of the 1973 Constitution provides,
as follows:
Save in cases of hereditary succession, no private land
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands in the public domain.
Section 7, Article XII of the 1987 Constitution provides:
Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands in the public domain.
The capacity to acquire private land is made dependent
upon the capacity to acquire or hold lands of the public
domain. Private land may be transferred or conveyed only
to individuals or entities "qualified to acquire lands of the
public domain" (II Bernas, The Constitution of the
Philippines 439-440 [1988 ed.]).
The 1935 Constitution reserved the right to participate in
the "disposition, exploitation, development and utilization"
of all "lands of the public domain and other natural
resources of the Philippines" for Filipino citizens or
corporations at least sixty percent of the capital of which
was owned by Filipinos. Aliens, whether individuals or
corporations, have been disqualified from acquiring public
lands; hence, they have also been disqualified from
acquiring private lands.
Petitioner Ong Ching Po was a Chinese citizen; therefore,
he was disqualified from acquiring and owning real
property. Assuming that the genuineness and due
execution of Exhibit "B" has been established, the same is
null and void, it being contrary to law.
On the other end of the legal spectrum, the deed of sale
executed by Ong Joi Jong in favor of private respondent
(Exh. "A") is a notarized document.
To remove the mantle of validity bestowed by law on said
document, petitioners claim that private respondent
admitted that she did not pay anything as consideration for
the purported sale in her favor. In the same breath,
petitioners said that private respondent implied in her
deposition that it was her husband who paid for the
property. It appears, therefore, that the sale was financed
out of conjugal funds and that it was her husband who
Law on NatRes (50-72 4
handled the transaction for the purchase of the property.
Such transaction is a common practice in Filipino-family
affairs.
It is not correct to say that private respondent never took
possession of the property. Under the law, possession is
transferred to the vendee by virtue of the notarized deed of
conveyance. Under Article 1498 of the Civil Code of the
Philippines, "when the sale is made through a public
instrument, the execution thereof shall be equivalent to the
delivery of the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred." If
what petitioners meant was that private respondent never
lived in the building constructed on said land, it was
because her family had settled in Iloilo.
There is no document showing the establishment of an
express trust by petitioner Ong Ching Po as trustor and
private respondent as trustee. Not even Exhibit "B" can be
considered as such a document because private
respondent, the registered owner of the property subject of
said "deed of sale," was not a party thereto. The oral
testimony to prove the existence of the express trust will
not suffice. Under Article 1443 of the Civil Code of the
Philippines, "No express trust concerning an immovable or
any interest therein may be proved by parole evidence."
Undaunted, petitioners argue that if they cannot prove an
express trust in writing, they can prove an implied trust
orally. While an implied trust may be proved orally (Civil
Code of the Philippines, Art. 1457), the evidence must be
trustworthy and received by the courts with extreme
caution, because such kind of evidence may be easily
fabricated (Salao v. Salao, 70 SCRA 65 [1976]). It cannot
be made to rest on vague and uncertain evidence or on
loose, equivocal or indefinite declarations (Cf. De Leon v.
Molo-Peckson, et al., 116 Phil. 1267 [1962]). Petitioners
do not claim that Ong Yee was not in a financial position to
acquire the land and to introduce the improvements
thereon. On the other hand, Yu Siok Lian, the wife of
petitioner Ong Ching Po, admitted in her testimony in court
that Ong Yee was a stockholder of Lam Sing Corporation
and was engaged in business.
The Court of Appeals did not give any credence to Exhibit
"B" and its translation, Exhibit "C", because these
documents had not been properly authenticated.
Under Section 4, Rule 130 of the Revised Rules of Court:
Secondary Evidence when Original is lost or destroyed.
When the original writing has been lost or destroyed, or
cannot be produced in court, upon proof of its execution
and lost or destruction, or unavailability, its contents may
be proved by a copy, or by a recital of its contents in some
authentic document, or by the recollection of the
witnesses.

Secondary evidence is admissible when the original
documents were actually lost or destroyed. But prior to the
introduction of such secondary evidence, the proponent
must establish the former existence of the document. The
correct order of proof is as follows: existence; execution;
loss; contents. This order may be changed if necessary in
the discretion of the court (De Vera v. Aguilar, 218 SCRA
602 [1993]).
Petitioners failed to adduce evidence as to the
genuineness and due execution of the deed of sale,
Exhibit "B".
The due execution of the document may be established by
the person or persons who executed it; by the person
before whom its execution was acknowledged; or by any
person who was present and saw it executed or who after
its execution, saw it and recognized the signatures; or by a
person to whom the parties to the instrument had
previously confessed the execution thereof (De Vera v.
Aguilar, supra).
Petitioner Yu Siok Lian testified that she was present when
said document was executed, but the trial court rejected
her claim and held:
If it is true that she was present, why did she not sign said
document, even merely as a witness? Her oral testimony
is easy to concoct or fabricate. Furthermore, she was
married only on September 6, 1946 to the plaintiff, Ong
Ching Po, in Baguio City where she apparently resided, or
after the deed of sale was executed. The Court does not
believe that she was present during the execution and
signing of the deed of sale involved therein,
notwithstanding her pretensions to the contrary (Decision
p. 6, Records p. 414).
As to the contention of petitioners that all the tax receipts,
tax declaration, rental receipts, deed of sale (Exh. "B") and
transfer certificate of title were in their possession, private
respondent explained that she and her husband entrusted
said lot and building to petitioners when they moved to
Iloilo.
As observed by the Court of Appeals:
We find, however, that these acts, even if true, are not
necessarily reflective of dominion, as even a mere
administrator or manager may lawfully perform them
pursuant to his appointment or employment (Rollo,
p. 10).
It is markworthy that all the tax receipts were in the name
of private respondent and her husband. The rental receipts
were also in the name of her husband.
WHEREFORE, the petition is DISMISSED.SO ORDERED.
Law on NatRes (50-72 5
ALFRED FRITZ FRENZEL, petitioner, vs. EDERLINA P.
CATITO, respondent.; G.R. No. 143958; July 11, 2003
Before us is a petition for review of the Decision1 of the
Court of Appeals in CA-G.R. CV No. 53485 which affirmed
the Decision2 of the Regional Trial Court of Davao City,
Branch 14, in Civil Case No. 17,817 dismissing the
petitioner's complaint, and the resolution of the Court of
Appeals denying his motion for reconsideration of the said
decision.
The Antecedents
As gleaned from the evidence of the petitioner, the case at
bar stemmed from the following factual backdrop:
Petitioner Alfred Fritz Frenzel is an Australian citizen of
German descent. He is an electrical engineer by
profession, but worked as a pilot with the New Guinea
Airlines. He arrived in the Philippines in 1974, started
engaging in business in the country two years thereafter,
and married Teresita Santos, a Filipino citizen. In 1981,
Alfred and Teresita separated from bed and board without
obtaining a divorce.
Sometime in February 1983, Alfred arrived in Sydney,
Australia for a vacation. He went to King's Cross, a night
spot in Sydney, for a massage where he met Ederlina
Catito, a Filipina and a native of Bajada, Davao City.
Unknown to Alfred, she resided for a time in Germany and
was married to Klaus Muller, a German national. She left
Germany and tried her luck in Sydney, Australia, where
she found employment as a masseuse in the King's Cross
nightclub. She was fluent in German, and Alfred enjoyed
talking with her. The two saw each other again; this time
Ederlina ended up staying in Alfred's hotel for three days.
Alfred gave Ederlina sums of money for her services.4
Alfred was so enamored with Ederlina that he persuaded
her to stop working at King's Cross, return to the
Philippines, and engage in a wholesome business of her
own. He also proposed that they meet in Manila, to which
she assented. Alfred gave her money for her plane fare to
the Philippines. Within two weeks of Ederlina's arrival in
Manila, Alfred joined her. Alfred reiterated his proposal for
Ederlina to stay in the Philippines and engage in business,
even offering to finance her business venture. Ederlina
was delighted at the idea and proposed to put up a beauty
parlor. Alfred happily agreed.
Alfred told Ederlina that he was married but that he was
eager to divorce his wife in Australia. Alfred proposed
marriage to Ederlina, but she replied that they should wait
a little bit longer.
Ederlina found a building at No. 444 M.H. del Pilar corner
Arquiza Street, Ermita, Manila, owned by one Atty. Jose
Hidalgo who offered to convey his rights over the property
for P18,000.00. Alfred and Ederlina accepted the offer.

Ederlina put up a beauty parlor on the property under the
business name Edorial Beauty Salon, and had it registered
with the Department of Trade and Industry under her
name. Alfred paid Atty. Hidalgo P20,000.00 for his right
over the property and gave P300,000.00 to Ederlina for
the purchase of equipment and furniture for the parlor. As
Ederlina was going to Germany, she executed a special
power of attorney on December 13, 19835 appointing her
brother, Aser Catito, as her attorney-in-fact in managing
the beauty parlor business. She stated in the said deed
that she was married to Klaus Muller. Alfred went back to
Papua New Guinea to resume his work as a pilot.
When Alfred returned to the Philippines, he visited
Ederlina in her Manila residence and found it unsuitable
for her. He decided to purchase a house and lot owned by
Victoria Binuya Steckel in San Francisco del Monte,
Quezon City, covered by Transfer Certificate of Title No.
218429 for US$20,000.00. Since Alfred knew that as an
alien he was disqualified from owning lands in the
Philippines, he agreed that only Ederlina's name would
appear in the deed of sale as the buyer of the property, as
well as in the title covering the same. After all, he was
planning to marry Ederlina and he believed that after their
marriage, the two of them would jointly own the property.
On January 23, 1984, a Contract to Sell was entered into
between Victoria Binuya Steckel as the vendor and
Ederlina as the sole vendee. Alfred signed therein as a
witness.6 Victoria received from Alfred, for and in behalf of
Ederlina, the amount of US$10,000.00 as partial payment,
for which Victoria issued a receipt.7 When Victoria
executed the deed of absolute sale over the property on
March 6, 1984,8 she received from Alfred, for and in
behalf of Ederlina, the amount of US$10,000.00 as final
and full payment. Victoria likewise issued a receipt for the
said amount.9 After Victoria had vacated the property,
Ederlina moved into her new house. When she left for
Germany to visit Klaus, she had her father Narciso Catito
and her two sisters occupy the property.
Alfred decided to stay in the Philippines for good and live
with Ederlina. He returned to Australia and sold his fiber
glass pleasure boat to John Reid for $7,500.00 on May 4,
1984.10 He also sold his television and video business in
Papua New Guinea for K135,000.00 to Tekeraoi Pty.
Ltd.11 He had his personal properties shipped to the
Philippines and stored at No. 14 Fernandez Street, San
Francisco del Monte, Quezon City. The proceeds of the
sale were deposited in Alfred's account with the Hong
Kong Shanghai Banking Corporation (HSBC), Kowloon
Branch under Bank Account No. 018-2-807016.12 When
Alfred was in Papua New Guinea selling his other
properties, the bank sent telegraphic letters updating him
of his account.13 Several checks were credited to his
HSBC bank account from Papua New Guinea Banking
Corporation, Westpac Bank of Australia and New Zealand
Banking Group Limited and Westpac Bank-PNG-Limited.
Alfred also had a peso savings account with HSBC,
Manila, under Savings Account No. 01-725-183-01.14
Law on NatRes (50-72 6
Once, when Alfred and Ederlina were in Hong Kong, they
opened another account with HSBC, Kowloon, this time in
the name of Ederlina, under Savings Account No. 018-0-
807950.15 Alfred transferred his deposits in Savings
Account No. 018-2-807016 with the said bank to this new
account. Ederlina also opened a savings account with the
Bank of America Kowloon Main Office under Account No.
30069016.16
On July 28, 1984, while Alfred was in Papua New Guinea,
he received a Letter dated December 7, 1983 from Klaus
Muller who was then residing in Berlin, Germany. Klaus
informed Alfred that he and Ederlina had been married on
October 16, 1978 and had a blissful married life until Alfred
intruded therein. Klaus stated that he knew of Alfred and
Ederlina's amorous relationship, and discovered the same
sometime in November 1983 when he arrived in Manila.
He also begged Alfred to leave Ederlina alone and to
return her to him, saying that Alfred could not possibly
build his future on his (Klaus') misfortune.17
Alfred had occasion to talk to Sally MacCarron, a close
friend of Ederlina. He inquired if there was any truth to
Klaus' statements and Sally confirmed that Klaus was
married to Ederlina. When Alfred confronted Ederlina, she
admitted that she and Klaus were, indeed, married. But
she assured Alfred that she would divorce Klaus. Alfred
was appeased. He agreed to continue the amorous
relationship and wait for the outcome of Ederlina's petition
for divorce. After all, he intended to marry her. He retained
the services of Rechtsanwaltin Banzhaf with offices in
Berlin, as her counsel who informed her of the progress of
the proceedings.18 Alfred paid for the services of the
lawyer.
In the meantime, Alfred decided to purchase another
house and lot, owned by Rodolfo Morelos covered by TCT
No. 92456 located in Pea Street, Bajada, Davao City.19
Alfred again agreed to have the deed of sale made out in
the name of Ederlina. On September 7, 1984, Rodolfo
Morelos executed a deed of absolute sale over the said
property in favor of Ederlina as the sole vendee for the
amount of P80,000.00.20 Alfred paid US$12,500.00 for
the property.
Alfred purchased another parcel of land from one Atty.
Mardoecheo Camporedondo, located in Moncado, Babak,
Davao, covered by TCT No. 35251. Alfred once more
agreed for the name of Ederlina to appear as the sole
vendee in the deed of sale. On December 31, 1984, Atty.
Camporedondo executed a deed of sale over the property
for P65,000.00 in favor of Ederlina as the sole vendee.21
Alfred, through Ederlina, paid the lot at the cost of
P33,682.00 and US$7,000.00, respectively, for which the
vendor signed receipts.22 On August 14, 1985, TCT No.
47246 was issued to Ederlina as the sole owner of the
said property.23

Meanwhile, Ederlina deposited on December 27, 1985, the
total amount of US$250,000 with the HSBC Kowloon
under Joint Deposit Account No. 018-462341-145.24
The couple decided to put up a beach resort on a four-
hectare land in Camudmud, Babak, Davao, owned by
spouses Enrique and Rosela Serrano. Alfred purchased
the property from the spouses for P90,000.00, and the
latter issued a receipt therefor.25 A draftsman
commissioned by the couple submitted a sketch of the
beach resort.26 Beach houses were forthwith constructed
on a portion of the property and were eventually rented out
by Ederlina's father, Narciso Catito. The rentals were
collected by Narciso, while Ederlina kept the proceeds of
the sale of copra from the coconut trees in the property. By
this time, Alfred had already spent P200,000.00 for the
purchase, construction and upkeep of the property.
Ederlina often wrote letters to her family informing them of
her life with Alfred. In a Letter dated January 21, 1985, she
wrote about how Alfred had financed the purchases of
some real properties, the establishment of her beauty
parlor business, and her petition to divorce Klaus.27
Because Ederlina was preoccupied with her business in
Manila, she executed on July 8, 1985, two special powers
of attorney28 appointing Alfred as attorney-in-fact to
receive in her behalf the title and the deed of sale over the
property sold by the spouses Enrique Serrano.
In the meantime, Ederlina's petition for divorce was denied
because Klaus opposed the same. A second petition filed
by her met the same fate. Klaus wanted half of all the
properties owned by Ederlina in the Philippines before he
would agree to a divorce. Worse, Klaus threatened to file a
bigamy case against Ederlina.29
Alfred proposed the creation of a partnership to Ederlina,
or as an alternative, the establishment of a corporation,
with Ederlina owning 30% of the equity thereof. She
initially agreed to put up a corporation and contacted Atty.
Armando Dominguez to prepare the necessary
documents. Ederlina changed her mind at the last minute
when she was advised to insist on claiming ownership
over the properties acquired by them during their
coverture.
Alfred and Ederlina's relationship started deteriorating.
Ederlina had not been able to secure a divorce from Klaus.
The latter could charge her for bigamy and could even
involve Alfred, who himself was still married. To avoid
complications, Alfred decided to live separately from
Ederlina and cut off all contacts with her. In one of her
letters to Alfred, Ederlina complained that he had ruined
her life. She admitted that the money used for the
purchase of the properties in Davao were his. She offered
to convey the properties deeded to her by Atty.
Mardoecheo Camporedondo and Rodolfo Morelos, asking
Alfred to prepare her affidavit for the said purpose and
Law on NatRes (50-72 7
send it to her for her signature.30 The last straw for Alfred
came on September 2, 1985, when someone smashed the
front and rear windshields of Alfred's car and damaged the
windows. Alfred thereafter executed an affidavit-complaint
charging Ederlina and Sally MacCarron with malicious
mischief.31
On October 15, 1985, Alfred wrote to Ederlina's father,
complaining that Ederlina had taken all his life savings and
because of this, he was virtually penniless. He further
accused the Catito family of acquiring for themselves the
properties he had purchased with his own money. He
demanded the return of all the amounts that Ederlina and
her family had "stolen" and turn over all the properties
acquired by him and Ederlina during their coverture.32
Shortly thereafter, Alfred filed a Complaint33 dated
October 28, 1985, against Ederlina, with the Regional Trial
Court of Quezon City, for recovery of real and personal
properties located in Quezon City and Manila. In his
complaint, Alfred alleged, inter alia, that Ederlina, without
his knowledge and consent, managed to transfer funds
from their joint account in HSBC Hong Kong, to her own
account with the same bank. Using the said funds,
Ederlina was able to purchase the properties subject of the
complaints. He also alleged that the beauty parlor in
Ermita was established with his own funds, and that the
Quezon City property was likewise acquired by him with
his personal funds.34
Ederlina failed to file her answer and was declared in
default. Alfred adduced his evidence ex parte.
In the meantime, on November 7, 1985, Alfred also filed a
complaint35 against Ederlina with the Regional Trial Court,
Davao City, for specific performance, declaration of
ownership of real and personal properties, sum of money,
and damages. He alleged, inter alia, in his complaint:
4. That during the period of their common-law
relationship, plaintiff solely through his own efforts and
resources acquired in the Philippines real and personal
properties valued more or less at P724,000.00; The
defendant's common-law wife or live-in partner did not
contribute anything financially to the acquisition of the said
real and personal properties. These properties are as
follows:
I. Real Properties
a. TCT No. T-92456 located at Bajada, Davao City,
consisting of 286 square meters, (with residential house)
registered in the name of the original title owner Rodolfo
M. Morelos but already fully paid by plaintiff. Valued at
P342,000.00;
b. TCT No. T-47246 (with residential house) located
at Babak, Samal, Davao, consisting of 600 square meters,
registered in the name of Ederlina Catito, with the Register

of Deeds of Tagum, Davao del Norte valued at
P144,000.00;
c. A parcel of agricultural land located at
Camudmud, Babak, Samal, Davao del Norte, consisting of
4.2936 hectares purchased from Enrique Serrano and
Rosela B. Serrano. Already paid in full by plaintiff. Valued
at P228,608.32;
II. Personal Properties:
a. Furniture valued at P10,000.00.
...
5. That defendant made no contribution at all to the
acquisition, of the above-mentioned properties as all the
monies (sic) used in acquiring said properties belonged
solely to plaintiff;36
Alfred prayed that after hearing, judgment be rendered in
his favor:
WHEREFORE, in view of the foregoing premises, it is
respectfully prayed that judgment be rendered in favor of
plaintiff and against defendant:
a) Ordering the defendant to execute the
corresponding deeds of transfer and/or conveyances in
favor of plaintiff over those real and personal properties
enumerated in Paragraph 4 of this complaint;
b) Ordering the defendant to deliver to the plaintiff
all the above real and personal properties or their money
value, which are in defendant's name and custody
because these were acquired solely with plaintiffs money
and resources during the duration of the common-law
relationship between plaintiff and defendant, the
description of which are as follows:
(1) TCT No. T-92456 (with residential house) located
at Bajada, Davao City, consisting of 286 square meters,
registered in the name of the original title owner Rodolfo
Morelos but already fully paid by plaintiff. Valued at
P342,000.00;
(2) TCT No. T-47246 (with residential house) located
at Babak, Samal, Davao, consisting of 600 square meters,
registered in the name of Ederlina Catito, with the Register
of Deeds of Tagum, Davao del Norte, valued at
P144,000.00;
(3) A parcel of agricultural land located at
Camudmud, Babak, Samal, Davao del Norte, consisting of
4.2936 hectares purchased from Enrique Serrano and
Rosela B. Serrano. Already fully paid by plaintiff. Valued at
P228,608.32;
Law on NatRes (50-72 8
c) Declaring the plaintiff to be the sole and absolute
owner of the above-mentioned real and personal
properties;
d) Awarding moral damages to plaintiff in an amount
deemed reasonable by the trial court;
e) To reimburse plaintiff the sum of P12,000.00 as
attorney's fees for having compelled the plaintiff to litigate;
f) To reimburse plaintiff the sum of P5,000.00
incurred as litigation expenses also for having compelled
the plaintiff to litigate; and
g) To pay the costs of this suit;
Plaintiff prays other reliefs just and equitable in the
premises.37
In her answer, Ederlina denied all the material allegations
in the complaint, insisting that she acquired the said
properties with her personal funds, and as such, Alfred
had no right to the same. She alleged that the deeds of
sale, the receipts, and certificates of titles of the subject
properties were all made out in her name.38 By way of
special and affirmative defense, she alleged that Alfred
had no cause of action against her. She interposed
counterclaims against the petitioner.39
In the meantime, the petitioner filed a Complaint dated
August 25, 1987, against the HSBC in the Regional Trial
Court of Davao City40 for recovery of bank deposits and
damages.41 He prayed that after due proceedings,
judgment be rendered in his favor, thus:
WHEREFORE, plaintiff respectfully prays that the
Honorable Court adjudge defendant bank, upon hearing
the evidence that the parties might present, to pay plaintiff:
1. ONE HUNDRED TWENTY SIX THOUSAND
TWO HUNDRED AND THIRTY U.S. DOLLARS AND
NINETY EIGHT CENTS (US$126,230.98) plus legal
interests, either of Hong Kong or of the Philippines, from
20 December 1984 up to the date of execution or
satisfaction of judgment, as actual damages or in
restoration of plaintiffs lost dollar savings;
2. The same amount in (1) above as moral
damages;
3. Attorney's fees in the amount equivalent to
TWENTY FIVE PER CENT (25%) of (1) and (2) above;
4. Litigation expenses in the amount equivalent to
TEN PER CENT (10%) of the amount in (1) above; and
5. For such other reliefs as are just and equitable
under the circumstances.42
 Law on NatRes (50-72 9

On April 28, 1986, the RTC of Quezon City rendered its

decision in Civil Case No. Q-46350, in favor of Alfred, the To return to the plaintiff, (1) Hi-Fi Stereo equipment left at
decretal portion of which reads as follows: 444 Arquiza Street, Ermita, Manila, as well as the Fronte
Suzuki car.
WHEREFORE, premises considered, judgment is hereby
rendered ordering the defendant to perform the following: (4) To account for the monies (sic) deposited with
the joint account of the plaintiff and defendant (Account
(1) To execute a document waiving her claim to the No. 018-0-807950); and to restore to the plaintiff all the
house and lot in No. 14 Fernandez St., San Francisco Del monies (sic) spent by the defendant without proper
Monte, Quezon City in favor of plaintiff or to return to the authority;
plaintiff the acquisition cost of the same in the amount of
$20,000.00, or to sell the said property and turn over the (5) To pay the amount of P5,000.00 by way of
proceeds thereof to the plaintiff; attorney's fees, and the costs of suit.

(2) To deliver to the plaintiff the rights of ownership SO ORDERED.43

and management of the beauty parlor located at 444
Arquiza St., Ermita, Manila, including the equipment and
fixtures therein;
(3) To account for the earnings of rental of the house
and lot in No. 14 Fernandez St., San Francisco Del Monte,
Quezon City, as well as the earnings in the beauty parlor
at 444 Arquiza St., Ermita, Manila and turn over one-half
of the net earnings of both properties to the plaintiff;
However, after due proceedings in the RTC of Davao City,
in Civil Case No. 17,817, the trial court rendered judgment
on September 28, 1995 in favor of Ederlina, the dispositive
portion of which reads:
WHEREFORE, the Court cannot give due course to the
complaint and hereby orders its dismissal. The
counterclaims of the defendant are likewise dismissed.

(4) To surrender or return to the plaintiff the personal SO ORDERED.44

properties of the latter left in the house at San Francisco
Del Monte, to wit: The trial court ruled that based on documentary evidence,
the purchaser of the three parcels of land subject of the
"(1) Mamya automatic camera complaint was Ederlina. The court further stated that even
if Alfred was the buyer of the properties; he had no cause
(1) 12 inch "Sonny" T.V. set, colored with remote of action against Ederlina for the recovery of the same
control. because as an alien, he was disqualified from acquiring
and owning lands in the Philippines. The sale of the three
(1) Micro oven parcels of land to the petitioner was null and void ab initio.
Applying the pari delicto doctrine, the petitioner was
(1) Electric fan (tall, adjustable stand) precluded from recovering the properties from the
respondent.
(1) Office safe with (2) drawers and safe
Alfred appealed the decision to the Court of Appeals45 in
(1) Electric Washing Machine which the petitioner posited the view that although he
prayed in his complaint in the court a quo that he be
(1) Office desk and chair declared the owner of the three parcels of land, he had no
intention of owning the same permanently. His principal
(1) Double bed suits intention therein was to be declared the transient owner for
the purpose of selling the properties at public auction,
(1) Mirror/dresser ultimately enabling him to recover the money he had spent
for the purchase thereof.
(1) Heavy duty voice/working mechanic
On March 8, 2000, the CA rendered a decision affirming in
(1) "Sony" Beta-Movie camera toto the decision of the RTC. The appellate court ruled that
the petitioner knowingly violated the Constitution; hence,
(1) Suitcase with personal belongings was barred from recovering the money used in the
purchase of the three parcels of land. It held that to allow
(1) Cardboard box with belongings the petitioner to recover the money used for the purchase
of the properties would embolden aliens to violate the
(1) Guitar Amplifier Constitution, and defeat, rather than enhance, the public
policy.46
(1) Hanger with men's suit (white)."

Hence, the petition at bar.
The petitioner assails the decision of the court contending
that:
THE HONORABLE COURT OF APPEALS ERRED IN
APPLYING THE RULE OF IN PARI DELICTO IN THE
INSTANT CASE BECAUSE BY THE FACTS AS
NARRATED IN THE DECISION IT IS APPARENT THAT
THE PARTIES ARE NOT EQUALLY GUILTY BUT
RATHER IT WAS THE RESPONDENT WHO EMPLOYED
FRAUD AS WHEN SHE DID NOT INFORM PETITIONER
THAT SHE WAS ALREADY MARRIED TO ANOTHER
GERMAN NATIONAL AND WITHOUT SUCH
FRAUDULENT DESIGN PETITIONER COULD NOT
HAVE PARTED WITH HIS MONEY FOR THE
PURCHASE OF THE PROPERTIES.
and
THE HONORABLE COURT OF APPEALS ERRED IN
NOT HOLDING THAT THE INTENTION OF THE
PETITIONER IS NOT TO OWN REAL PROPERTIES IN
THE PHILIPPINES BUT TO SELL THEM AT PUBLIC
AUCTION TO BE ABLE TO RECOVER HIS MONEY
USED IN PURCHASING THEM.48
Since the assignment of errors are intertwined with each
other, the Court shall resolve the same simultaneously.
The petitioner contends that he purchased the three
parcels of land subject of his complaint because of his
desire to marry the respondent, and not to violate the
Philippine Constitution. He was, however, deceived by the
respondent when the latter failed to disclose her previous
marriage to Klaus Muller. It cannot, thus, be said that he
and the respondent are "equally guilty;" as such, the pari
delicto doctrine is not applicable to him. He acted in good
faith, on the advice of the respondent's uncle, Atty.
Mardoecheo Camporedondo. There is no evidence on
record that he was aware of the constitutional prohibition
against aliens acquiring real property in the Philippines
when he purchased the real properties subject of his
complaint with his own funds. The transactions were not
illegal per se but merely prohibited, and under Article 1416
of the New Civil Code, he is entitled to recover the money
used for the purchase of the properties. At any rate, the
petitioner avers, he filed his complaint in the court a quo
merely for the purpose of having him declared as the
owner of the properties, to enable him to sell the same at
public auction. Applying by analogy Republic Act No.
13349 as amended by Rep. Act No. 4381 and Rep. Act
No. 4882, the proceeds of the sale would be remitted to
him, by way of refund for the money he used to purchase
the said properties. To bar the petitioner from recovering
the subject properties, or at the very least, the money used
for the purchase thereof, is to allow the respondent to
enrich herself at the expense of the petitioner in violation
of Article 22 of the New Civil Code.
Law on NatRes (50-72 10
The petition is bereft of merit.
Section 14, Article XIV of the 1973 Constitution provides,
as follows:
Save in cases of hereditary succession, no private land
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands in the public domain.50
Lands of the public domain, which include private lands,
may be transferred or conveyed only to individuals or
entities qualified to acquire or hold private lands or lands
of the public domain. Aliens, whether individuals or
corporations, have been disqualified from acquiring lands
of the public domain. Hence, they have also been
disqualified from acquiring private lands.51
Even if, as claimed by the petitioner, the sales in question
were entered into by him as the real vendee, the said
transactions are in violation of the Constitution; hence, are
null and void ab initio.52 A contract that violates the
Constitution and the law, is null and void and vests no
rights and creates no obligations. It produces no legal
effect at all.53 The petitioner, being a party to an illegal
contract, cannot come into a court of law and ask to have
his illegal objective carried out. One who loses his money
or property by knowingly engaging in a contract or
transaction which involves his own moral turpitude may
not maintain an action for his losses. To him who moves in
deliberation and premeditation, the law is unyielding.54
The law will not aid either party to an illegal contract or
agreement; it leaves the parties where it finds them.55
Under Article 1412 of the New Civil Code, the petitioner
cannot have the subject properties deeded to him or allow
him to recover the money he had spent for the purchase
thereof.56 Equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public
policy, cannot be done directly.57 Where the wrong of one
party equals that of the other, the defendant is in the
stronger position . . . it signifies that in such a situation,
neither a court of equity nor a court of law will administer a
remedy.58 The rule is expressed. in the maxims: EX
DOLO ORITUR ACTIO and IN PARI DELICTO POTIOR
EST CONDITIO DEFENDENTIS.59
The petitioner cannot feign ignorance of the constitutional
proscription, nor claim that he acted in good faith, let alone
assert that he is less guilty than the respondent. The
petitioner is charged with knowledge of the constitutional
prohibition.60 As can be gleaned from the decision of the
trial court, the petitioner was fully aware that he was
disqualified from acquiring and owning lands under
Philippine law even before he purchased the properties in
question; and, to skirt the constitutional prohibition, the
petitioner had the deed of sale placed under the
respondent's name as the sole vendee thereof:
 Law on NatRes (50-72 11

Such being the case, the plaintiff is subject to the It is evident that the plaintiff was fully aware that as a non-
constitutional restrictions governing the acquisition of real citizen of the Philippines, he was disqualified from validly
properties in the Philippines by aliens. purchasing any land within the country.61

From the plaintiff's complaint before the Regional Trial
Court, National Capital Judicial Region, Branch 84,
Quezon City in Civil Case No. Q-46350 he alleged:
x x x "That on account that foreigners are not allowed by
the Philippine laws to acquire real properties in their name
as in the case of my vendor Miss Victoria Vinuya (sic)
although married to a foreigner, we agreed and I
consented in having the title to subject property placed in
defendant's name alone although I paid for the whole price
out of my own exclusive funds." (paragraph IV, Exhibit
"W.")
and his testimony before this Court which is hereby
quoted:
ATTY. ABARQUEZ:
Q. In whose name the said house and lot placed, by
the way, where is his house and lot located?
The petitioner's claim that he acquired the subject
properties because of his desire to marry the respondent,
believing that both of them would thereafter jointly own the
said properties, is belied by his own evidence. It is merely
an afterthought to salvage a lost cause. The petitioner
admitted on cross-examination that he was all along
legally married to Teresita Santos Frenzel, while he was
having an amorous relationship with the respondent:
ATTY. YAP:
Q When you were asked to identify yourself on direct
examination you claimed before this Honorable Court that
your status is that of being married, do you confirm that?
A Yes, sir.
Q To whom are you married?
A To a Filipina, since 1976.

A. In 14 Fernandez St., San Francisco, del Monte, Q Would you tell us who is that particular person you
Manila. are married since 1976?

Q. In whose name was the house placed? A Teresita Santos Frenzel.

A. Ederlina Catito because I was informed being not Q Where is she now?
a Filipino, I cannot own the property. (tsn, p. 11, August
27, 1986). A In Australia.

xxx xxx xxx Q Is this not the person of Teresita Frenzel who
became an Australian citizen?
COURT:
A I am not sure, since 1981 we were separated.
Q. So you understand that you are a foreigner that
you cannot buy land in the Philippines? Q You were only separated, in fact, but not legally
separated?
A. That is correct but as she would eventually be my
wife that would be owned by us later on. (tsn, p. 5, A Thru my counsel in Australia I filed a separation
September 3, 1986) case.

xxx xxx xxx Q As of the present you are not legally divorce[d]?

Q. What happened after that? A I am still legally married.62

A. She said you foreigner you are using Filipinos to The respondent was herself married to Klaus Muller, a
buy property. German citizen. Thus, the petitioner and the respondent
could not lawfully join in wedlock. The evidence on record
Q. And what did you answer? shows that the petitioner in fact knew of the respondent's
marriage to another man, but nonetheless purchased the
A: I said thank you very much for the property I subject properties under the name of the respondent and
bought because I gave you a lot of money (tsn., p. 14, paid the purchase prices therefor. Even if it is assumed
ibid). gratia arguendi that the respondent and the petitioner were
capacitated to marry, the petitioner is still disqualified to
own the properties in tandem with the respondent.63

The petitioner cannot find solace in Article 1416 of the
New Civil Code which reads:
Art. 1416. When the agreement is not illegal per se
but is merely prohibited, and the prohibition by the law is
designed for the protection of the plaintiff, he may, if public
policy is thereby enhanced, recover what he has paid or
delivered.64
The provision applies only to those contracts which are
merely prohibited, in order to benefit private interests. It
does not apply to contracts void ab initio. The sales of
three parcels of land in favor of the petitioner who is a
foreigner is illegal per se. The transactions are void ab
initio because they were entered into in violation of the
Constitution. Thus, to allow the petitioner to recover the
properties or the money used in the purchase of the
parcels of land would be subversive of public policy.
Neither may the petitioner find solace in Rep. Act No. 133,
as amended by Rep. Act No. 4882, which reads:
SEC. 1. Any provision of law to the contrary
notwithstanding, private real property may be mortgaged
in favor of any individual, corporation, or association, but
the mortgagee or his successor-in-interest, if disqualified
to acquire or hold lands of the public domain in the
Philippines, shall not take possession of the mortgaged
property during the existence of the mortgage and shall
not take possession of mortgaged property except after
default and for the sole purpose of foreclosure,
receivership, enforcement or other proceedings and in no
case for a period of more than five years from actual
possession and shall not bid or take part in any sale of
such real property in case of foreclosure: Provided, That
said mortgagee or successor-in-interest may take
possession of said property after default in accordance
with the prescribed judicial procedures for foreclosure and
receivership and in no case exceeding five years from
actual possession.65
From the evidence on record, the three parcels of land
subject of the complaint were not mortgaged to the
petitioner by the owners thereof but were sold to the
respondent as the vendee, albeit with the use of the
petitioner's personal funds.
Futile, too, is petitioner's reliance on Article 22 of the New
Civil Code which reads:
Art. 22. Every person who through an act of performance
by another, or any other means, acquires or comes into
possession of something at the expense of the latter
without just or legal ground, shall return the same to
him.66
The provision is expressed in the maxim: "MEMO CUM
ALTERIUS DETER DETREMENTO PROTEST" (No
Law on NatRes (50-72 12
person should unjustly enrich himself at the expense of
another). An action for recovery of what has been paid
without just cause has been designated as an accion in
rem verso.67 This provision does not apply if, as in this
case, the action is proscribed by the Constitution or by the
application of the pari delicto doctrine. 68 It may be unfair
and unjust to bar the petitioner from filing an accion in rem
verso over the subject properties, or from recovering the
money he paid for the said properties, but, as Lord
Mansfield stated in the early case of Holman vs.
Johnson:69 "The objection that a contract is immoral or
illegal as between the plaintiff and the defendant, sounds
at all times very ill in the mouth of the defendant. It is not
for his sake, however, that the objection is ever allowed;
but it is founded in general principles of policy, which the
defendant has the advantage of, contrary to the real
justice, as between him and the plaintiff."
IN LIGHT OF ALL THE FOREGOING, the petition is
DISMISSED. The decision of the Court of Appeals is
AFFIRMED in toto. Costs against the petitioner. SO
ORDERED.
IN RE: PETITION FOR SEPARATION OF PROPERTY
ELENA BUENAVENTURA MULLER, Petitioner, vs.
HELMUT MULLER, Respondent; G.R. No. 149615
August 29, 2006
This petition for review on certiorari 1 assails the February
26, 2001 Decision 2 of the Court of Appeals in CA-G.R.
CV No. 59321 affirming with modification the August 12,
1996 Decision 3 of the Regional Trial Court of Quezon
City, Branch 86 in Civil Case No. Q-94-21862, which
terminated the regime of absolute community of property
between petitioner and respondent, as well as the
Resolution 4 dated August 13, 2001 denying the motion
for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent
Helmut Muller were married in Hamburg, Germany on
September 22, 1989. The couple resided in Germany at a
house owned by respondents parents but decided to
move and reside permanently in the Philippines in 1992.
By this time, respondent had inherited the house in
Germany from his parents which he sold and used the
proceeds for the purchase of a parcel of land in Antipolo,
Rizal at the cost of P528,000.00 and the construction of a
house amounting to P2,300,000.00. The Antipolo property
was registered in the name of petitioner under Transfer
Certificate of Title No. 219438 5 of the Register of Deeds
of Marikina, Metro Manila.
Due to incompatibilities and respondents alleged
womanizing, drinking, and maltreatment, the spouses
eventually separated. On September 26, 1994, respondent
filed a petition 6 for separation of properties before the
Regional Trial Court of Quezon City.

On August 12, 1996, the trial court rendered a decision
which terminated the regime of absolute community of
property between the petitioner and respondent. It also
decreed the separation of properties between them and
ordered the equal partition of personal properties located
within the country, excluding those acquired by gratuitous
title during the marriage. With regard to the Antipolo
property, the court held that it was acquired using
paraphernal funds of the respondent. However, it ruled
that respondent cannot recover his funds because the
property was purchased in violation of Section 7, Article
XII of the Constitution. Thus
However, pursuant to Article 92 of the Family Code,
properties acquired by gratuitous title by either spouse
during the marriage shall be excluded from the community
property. The real property, therefore, inherited by
petitioner in Germany is excluded from the absolute
community of property of the herein spouses. Necessarily,
the proceeds of the sale of said real property as well as
the personal properties purchased thereby, belong
exclusively to the petitioner. However, the part of that
inheritance used by the petitioner for acquiring the house
and lot in this country cannot be recovered by the
petitioner, its acquisition being a violation of Section 7,
Article XII of the Constitution which provides that "save in
cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations
or associations qualified to acquire or hold lands of the
public domain." The law will leave the parties in the
situation where they are in without prejudice to a voluntary
partition by the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of
Title No. 219438 of the Registry of Deeds of Marikina,
Metro Manila, situated in Antipolo, Rizal and the
improvements thereon, the Court shall not make any
pronouncement on constitutional grounds. 7
Respondent appealed to the Court of Appeals which
rendered the assailed decision modifying the trial courts
Decision. It held that respondent merely prayed for
reimbursement for the purchase of the Antipolo property,
and not acquisition or transfer of ownership to him. It also
considered petitioners ownership over the property in trust
for the respondent. As regards the house, the Court of
Appeals ruled that there is nothing in the Constitution
which prohibits respondent from acquiring the same. The
dispositive portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of
the lower court dated August 12, 1996 is hereby
MODIFIED. Respondent Elena Buenaventura Muller is
hereby ordered to REIMBURSE the petitioner the amount
of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house
situated in Atnipolo, Rizal, deducting therefrom the amount
Law on NatRes (50-72 13
respondent spent for the preservation, maintenance and
development of the aforesaid real property including the
depreciation cost of the house or in the alternative to SELL
the house and lot in the event respondent does not have
the means to reimburse the petitioner out of her own
money and from the proceeds thereof, reimburse the
petitioner of the cost of the land and the house deducting
the expenses for its maintenance and preservation spent
by the respondent. Should there be profit, the same shall
be divided in proportion to the equity each has over the
property. The case is REMANDED to the lower court for
reception of evidence as to the amount claimed by the
respondents for the preservation and maintenance of the
property.
SO ORDERED. 8
Hence, the instant petition for review raising the following
issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT THE RESPONDENT
HEREIN IS ENTITLED TO REIMBURSEMENT OF THE
AMOUNT USED TO PURCHASE THE LAND AS WELL
AS THE COSTS FOR THE CONSTRUCTION OF THE
HOUSE, FOR IN SO RULING, IT INDIRECTLY
ALLOWED AN ACT DONE WHICH OTHERWISE COULD
NOT BE DIRECTLY x x x DONE, WITHOUT DOING
VIOLENCE TO THE CONSTITUTIONAL PROSCRIPTION
THAT AN ALIEN IS PROHIBITED FROM ACQUIRING
OWNERSHIP OF REAL PROPERTIES LOCATED IN THE
PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN
SUSTAINING RESPONDENTS CAUSE OF ACTION
WHICH IS ACTUALLY A DESPERATE ATTEMPT TO
OBTAIN OWNERSHIP OVER THE LOT IN QUESTION,
CLOTHED UNDER THE GUISE OF CLAIMING
REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is
disqualified to own private lands in the Philippines; that
respondent was aware of the constitutional prohibition but
circumvented the same; and that respondents purpose for
filing an action for separation of property is to obtain
exclusive possession, control and disposition of the
Antipolo property.
Respondent claims that he is not praying for transfer of
ownership of the Antipolo property but merely
reimbursement; that the funds paid by him for the said
property were in consideration of his marriage to
petitioner; that the funds were given to petitioner in trust;
and that equity demands that respondent should be
reimbursed of his personal funds.

The issue for resolution is whether respondent is entitled
to reimbursement of the funds used for the acquisition of
the Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Aliens, whether individuals or corporations, are disqualified
from acquiring lands of the public domain. Hence, they are
also disqualified from acquiring private lands. 9 The
primary purpose of the constitutional provision is the
conservation of the national patrimony. In the case of
Krivenko v. Register of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural
resources, with the exception of public agricultural land,
shall not be alienated," and with respect to public
agricultural lands, their alienation is limited to Filipino
citizens. But this constitutional purpose conserving
agricultural resources in the hands of Filipino citizens may
easily be defeated by the Filipino citizens themselves who
may alienate their agricultural lands in favor of aliens. It is
partly to prevent this result that section 5 is included in
Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private
agricultural land will be transferred or assigned except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the
Philippines."
This constitutional provision closes the only remaining
avenue through which agricultural resources may leak into
aliens hands. It would certainly be futile to prohibit the
alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming
private agricultural lands in the hands of Filipino citizens. x
xx
xxxx
If the term "private agricultural lands" is to be construed as
not including residential lots or lands not strictly
agricultural, the result would be that "aliens may freely
acquire and possess not only residential lots and houses
for themselves but entire subdivisions, and whole towns
and cities," and that "they may validly buy and hold in their
names lands of any area for building homes, factories,
industrial plants, fisheries, hatcheries, schools, health and
vacation resorts, markets, golf courses, playgrounds,
airfields, and a host of other uses and purposes that are
not, in appellants words, strictly agricultural." (Solicitor
Law on NatRes (50-72 14
Generals Brief, p. 6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question.
Respondent was aware of the constitutional prohibition
and expressly admitted his knowledge thereof to this
Court. 11 He declared that he had the Antipolo property
titled in the name of petitioner because of the said
prohibition. 12 His attempt at subsequently asserting or
claiming a right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied trust
was created and resulted by operation of law in view of
petitioners marriage to respondent. Save for the exception
provided in cases of hereditary succession, respondents
disqualification from owning lands in the Philippines is
absolute. Not even an ownership in trust is allowed.
Besides, where the purchase is made in violation of an
existing statute and in evasion of its express provision, no
trust can result in favor of the party who is guilty of the
fraud. 13 To hold otherwise would allow circumvention of
the constitutional prohibition.
Invoking the principle that a court is not only a court of law
but also a court of equity, is likewise misplaced. It has
been held that equity as a rule will follow the law and will
not permit that to be done indirectly which, because of
public policy, cannot be done directly. 14 He who seeks
equity must do equity, and he who comes into equity must
come with clean hands. The latter is a frequently stated
maxim which is also expressed in the principle that he who
has done inequity shall not have equity. It signifies that a
litigant may be denied relief by a court of equity on the
ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy
in issue. 15
Thus, in the instant case, respondent cannot seek
reimbursement on the ground of equity where it is clear
that he willingly and knowingly bought the property despite
the constitutional prohibition.
Further, the distinction made between transfer of
ownership as opposed to recovery of funds is a futile
exercise on respondents part. To allow reimbursement
would in effect permit respondent to enjoy the fruits of a
property which he is not allowed to own. Thus, it is
likewise proscribed by law. As expressly held in
Cheesman v. Intermediate Appellate Court: 16
Finally, the fundamental law prohibits the sale to aliens of
residential land. Section 14, Article XIV of the 1973
Constitution ordains that, "Save in cases of hereditary
succession, no private land shall be transferred or
conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public
domain." Petitioner Thomas Cheesman was, of course,
charged with knowledge of this prohibition. Thus,
assuming that it was his intention that the lot in question
be purchased by him and his wife, he acquired no right

whatever over the property by virtue of that purchase; and
in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the
Constitution; the sale as to him was null and void. In any
event, he had and has no capacity or personality to
question the subsequent sale of the same property by his
wife on the theory that in so doing he is merely exercising
the prerogative of a husband in respect of conjugal
property. To sustain such a theory would permit indirect
controversion of the constitutional prohibition. If the
property were to be declared conjugal, this would accord
to the alien husband a not insubstantial interest and right
over land, as he would then have a decisive vote as to its
transfer or disposition. This is a right that the Constitution
does not permit him to have.
As already observed, the finding that his wife had used her
own money to purchase the property cannot, and will not,
at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had
used conjugal funds to make the acquisition, the
considerations just set out to militate, on high
constitutional grounds, against his recovering and holding
the property so acquired, or any part thereof. And whether
in such an event, he may recover from his wife any share
of the money used for the purchase or charge her with
unauthorized disposition or expenditure of conjugal funds
is not now inquired into; that would be, in the premises, a
purely academic exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition
is GRANTED. The Decision dated February 26, 2001 of
the Court of Appeals in CA-G.R. CV No. 59321 ordering
petitioner Elena Buenaventura Muller to reimburse
respondent Helmut Muller the amount of P528,000 for the
acquisition of the land and the amount of P2,300,000 for
the construction of the house in Antipolo City, and the
Resolution dated August 13, 2001 denying reconsideration
thereof, are REVERSED and SET ASIDE. The August 12,
1996 Decision of the Regional Trial Court of Quezon City,
Branch 86 in Civil Case No. Q-94-21862 terminating the
regime of absolute community between the petitioner and
respondent, decreeing a separation of property between
them and ordering the partition of the personal properties
located in the Philippines equally, is REINSTATED. SO
ORDERED.
ELIZABETH LEE and PACITA YU LEE, HON. JUDGE
JOSE D. ALOVERA,* Presiding Judge, Regional Trial
Court, Branch 17, Roxas City, THE REGISTER OF
DEEDS OF ROXAS CITY, petitioners, vs. REPUBLIC
OF THE PHILIPPINES, represented by THE DIRECTOR
OF LANDS AND THE ADMINISTRATOR, LAND
REGISTRATION AUTHORITY and THE HON. COURT
OF APPEALS,* respondents.; G.R. No. 128195
October 3, 2001
The case under consideration is a petition for review on
certiorari of the decision1 of the court of appeals nullifying
that of the Regional Trial Court, Roxas City, in
Law on NatRes (50-72 15
Reconstitution case No. R-1928,2 pertaining to lot 398,
Capiz Cadastre, covered by Original Certificate of Title No.
3389.
Sometime in March 1936, Carmen, Francisco, Jr., Ramon,
Lourdes, Mercedes, Concepcion, Mariano, Jose, Loreto,
Manuel, Rizal, and Jimmy, alll surnamed Dinglasan sold to
Lee Liong, A Chinese citizen, a parcel of land with an
approximate area of 1,631 square meters, designed as lot
398 and covered by Original Certificate of Title No. 3389,
situated at the corner of Roxas Avenue and Pavia Street,
Roxas City.3
However, in 1948, the former owners filed with the Court
of First Instance, Capiz an action against the heirs of Lee
Liong for annulment of sale and recovery of land.4 The
plaintiffs assailed the validity of the sale because of the
constitutional prohibition against aliens acquiring
ownership of private agriculture land, including residential,
commercial or industrial land. Rebuffed in the trial court
and the Court of Appeals, plaintiffs appealed to the
Supreme Court. On June 27, 1956, the Supreme Court
ruled thus:
"granting the sale to be null and void and can not give title
to the vendee, it does not necessarily follow therefrom that
title remained in the vendor, who had also violated the
constitutional prohibition, or that he (vendor) has the right
to recover the title of which he has divested himself by his
in ignoring the prohibition. In such contingency another
principle of law sets in to bar the equally guilty vendor from
recovering the title which he had voluntarily conveyed for a
consideration, that of pari delicto."5
On July 1, 1968, the same former owners Rafael A.
Dinglasan, together with Francisco, Carmen, Ramon,
Lourdes, Mercedes, Concepcion, Mariano, Jose, Loreto,
Rizal, Jimmy, and Jesse Dinglasan filed with the Court of
First Instance, Capiz an action for recovery of the same
parcel of land.6 Citing the case of the Philippines Banking
Corporation v. Lui She,7 they submitted that the sale to
Lee Liong was null and void for being violative of the
Constitution. On September 23, 1968, the heirs of Lee
Liong filed with the trial court a motion to dismiss the case
on the ground of res judicata.8 On October 10, 1968, and
November 9, 1968, the trial court denied the motion.9 The
heirs of Lee Liong elevated the case to the Supreme Court
by petition for certiorari. On April 22, 1977, the Supreme
Court annulled the orders of the trial court and directed it
to dismiss the case, holding that the suit was barred by res
judicata.10
On September 7, 1993, Elizabeth Manuel-Lee and Pacita
Yu Lee filed with the regional Trial Court, Roxas City a
petition for reconstitution of title of Lot No. 398 of the Capiz
Cadastre, formerly covered by Original Certificate of title
No. 3389 of the register of Deeds of Roxas City.11
Petitioners alleged that they were the windows of the
deceased Lee Bing Hoo and Lee Bun Ting , who were the

heirs of Lee Liong, The owner of the lot. Lee Liong died
intestate in February 1944. On June 30, 1947, Lee Liong's
widow, Ang Chia, and his two sons, Lee Bun Ting and Lee
Bing Ho, executed an extra judicial settlement of the state
of Lee Liong, adjudicating to themselves the subject parcel
of land.12 Petitioner Elizabeth Lee acquired her share in
lot No. 398 through an extra-judicial settlement and
donation executed in her favor by her deceased husband
Lee Bong Hoo. Petitioner Pacita Yu Lee acquired her
share in the same lot by succession from her deceased
husband Lee Bun Ting, as evidenced by a deed of extra-
judicial settlement.13
Previously, on December 9, 1948, the Register of Deeds,
Capiz Salvador Villaluz, issued a certification that a
transfer certificate of title over the property was issued in
the name of Lee Liong.14 However, the records of the
Register of Deeds, Roxas City were burned during the
war. Thus, as heretofore stated, on September 7, 1968,
petitioners filed a petition for reconstitution of title.
On June 10, 1994, the Regional Trial Court, Roxas City,
Branch 17, ordered the reconstitution of the lost or
destroyed certificate of title in the name of Lee Liong on
the basis of an approved plan and technical description.15
The dispositive portion of the trial Court's decision reads
thus:
"WHEREFORE, in reiteration the Register of Deeds for the
City of Roxas is ordered to reconstitute the lost or
destroyed certificate of title in the name Lee Liong,
deceased, of Roxas City, with all the conditions stated in
paragraph 2 of this decision. This decision shall become
final after the lapse of thirty (30) days from receipt by the
Register of Deeds and by the Commissioner of LRA of a
notice of such judgement without any appeal having been
filed by any of such officials.
"SO ORDERED.
"Given at Roxas City, Philippines,
"June 10, 1994.
"JOSE O. ALOVERA
"Judge"16
On August 18, 1994, the Clerk of Court, Regional Trial
Court, Roxas City, Branch 17 issued an Entry of
Judgement.17
On January 25, 1995, the Solicitor General filed with the
Court of Appeals a petition for annulment of judgement in
Reconstitution Case No. 1928, alleging that the Regional
Trial Court, Roxas City had no jurisdiction over the
case.18 The Solicitor General contended that the
petitioners were not the proper parties in the reconstitution
of title, since their predecessor-in-interest Lee Liong did
not acquire title to the lot because he was a Chinese
Law on NatRes (50-72 16
citizen and was constitutionally not qualified to own the
subject land.
On April 30, 1996, the Court of Appeals promulgated its
decision declaring the judgement of reconstitution void.19
On May 24, 1996, Elizabeth Manuel-Lee and Pacita Yu
Lee filed with the Court of Appeals a motion for
reconsideration of the decision. 20 On February 18,
19976, the Court of appeals denied the motion.21
Hence this petition.22
Petitioners submitted that the Solicitor General was
estopped from seeking annulment of the judgement of
reconstitution after failing to object during the
reconstitution proceedings before the trial court, despite
due notice. Petitioners alleged that the Solicitor General
merely acted on the request of private and politically
powerful individuals who wished to capitalize on the prime
location of the subject land.
Petitioners emphasized that the ownership of the land had
been settled in two previous cases of the Supreme Court,
where the Court ruled in favor of their predecessor-in-
interest, Lee Liong. Petitioners also pointed out that they
acquired ownership of the land through actual possession
of the lot and their consistent payment of taxes over the
land for more than sixty years.
On the other hand, the Solicitor General submitted that the
decision in the reconstitution case was void; otherwise, it
would amount to circumventing the constitutional
proscription against aliens acquiring ownership of private
or public agricultural lands.
We grant the petition.
The reconstitution of a certificate of title denotes
restoration in the original form and condition of a lost or
destroyed instrument attesting the title of a person to a
piece of land23. The purpose of the reconstruction of title
is to have, after observing the procedures prescribed by
law, the title reproduced in exactly the same way it has
been when the loss or destruction occurred.24
In this case, petitioners sought a reconstitution of title in
the name of Lee Liong, alleging that the transfer of
certificate of title issued to him was lost or destroyed
during World War II. All the documents recorded and
issued by the Register of Deed, Capiz, which include the
transfer certificate of title issued in the name of Lee Liong,
were all destroyed during the war. The fact that the original
of the transfer certificate of title was not in the files of the
Office of the Register of Deeds did not imply that a transfer
certificate of title had not been issued.25 In the trial court
proceeding, petitioners presented evidence proving the
sale of the land from the Dinglasans to Lee Liong and the
latter's subsequent possessions of the of the property in

the concept of owner. Thus, the trial court after examining
all the evidence before it, ordered the reconstruction of title
in the name of Lee Liong.
However, there is a question as to whether Lee Liong as
the qualification to own land in the Philippines.
The sale of the land in question was consummated
sometime in March 1936, during the effectivity of the 1935
Constitution. Under the 1935 Constitution,26 aliens could
not acquire private agricultural lands, save in cases of
hereditary succession.27 Thus, Lee Liong, a chinese
citizen, was disqualified to acquire the land in question.28
The fact that the Court did not annul the sale of the land to
an alien did not validate the transaction, for it was still
contrary to the constitutional proscription against aliens
acquiring lands of the public or private domain. However,
the proper party to assail the illegality of the transaction
was not the parties to the transaction.29 "In sales of real
estate to aliens incapable of holding title thereto by virtue
of the provisions of the Constitution both the vendor and
the vendee are deemed to have committed the
constitutional violation and being thus in pari delicto the
courts will not afford protection to either party."30 The
proper party to assail the sale is the Solicitor General. This
was what was done in this case when the Solicitor General
initiated an action for annulment of judgment of
reconstitution of title. While it took the Republic more than
sixty years to assert itself, it is not barred from initiating
such action. Prescription never against the State.31
Although ownership of the land cannot revert to the
original sellers, because of the doctrine of pari delicto, the
Solicitor General may initiate an action for reversion or
escheat of the land to the State, subject to other defenses,
as hereafter set forth.32
In this case, subsequent circumstances militate against
escheat proceedings because the land is now in the hands
of Filipinos. The original vendee, Lee Liong, has since died
and the land has been inherited by his heirs and
subsequently their heirs, petitioners herein. Petitioners are
Filipino citizens, a fact the Solicitor General does not
dispute.
The constitutional proscription on alien ownership of lands
of the public or private domain was intended to protect
lands from falling in the hands of non-Filipinos. In this
case, however, there would be no more public policy
violated since the land is in the hands of Filipinos qualified
to acquire and own such land. "If land is invalidly
transferred to an alien who subsequently becomes a
citizen or transfers it to a citizen, the flaw in the original
transaction is considered cured and the title of the
transferee is rendered valid.33 Thus, the subsequent
transfer of the property to qualified Filipinos may no longer
be impugned on the basis of the invalidity of the initial
Law on NatRes (50-72 17
transfer.34 The objective of the constitutional provision to
keep our lands in Filipino hands has been achieved.
Incidentally, it must be mentioned that reconstitution of the
original certificate of title must be based on an owner's
duplicate, secondary evidence thereof, or other valid
sources of the title be reconstituted.35 In this case,
reconstitution was based on the plan and technical
description approved by the Land Registration Authority.36
This renders the order of reconstitution void for lack of
factual support.37 A judgment with absolute nothing to
support it is void.38
As earlier mentioned, a reconstitution of the title is the
reissuance of a new certificate of title lost or destroyed in
its original form and condition.39 It does not pass upon the
ownership of the land covered by the lost or destroyed
title.40 Any change in the ownership of the property must
be the subject of a separate suit.41 Thus, although
petitioners are in possession of the land, a separate
proceedings is necessary to thresh out the issue of
ownership of the land.
WHEREFORE, the Court REVERSES and SETS ASIDE
the decision of the Court of Appeals in CA-G. R. SP No.
36274. In lieu thereof, the Court sets aside the order of
reconstitution of title in Reconstitution Case No. R-1928,
Regional Trial Court, Roxas City, and dismisses the
petition, without prejudice. No Cost. SO ORDERED.
TESTATE ESTATE OF JOSE EUGENIO RAMIREZ,
MARIA LUISA PALACIOS, Administratrix, petitioner-
appellee, vs. MARCELLE D. VDA. DE RAMIREZ, ET
AL., oppositors, JORGE and ROBERTO RAMIREZ,
legatees, oppositors- appellants.; G.R. No. L-27952;
February 15, 1982
The main issue in this appeal is the manner of partitioning
the testate estate of Jose Eugenio Ramirez among the
principal beneficiaries, namely: his widow Marcelle
Demoron de Ramirez; his two grandnephews Roberto and
Jorge Ramirez; and his companion Wanda de Wrobleski.
The task is not trouble-free because the widow Marcelle is
a French who lives in Paris, while the companion Wanda
is an Austrian who lives in Spain. Moreover, the testator
provided for substitutions.
Jose Eugenio Ramirez, a Filipino national, died in Spain
on December 11, 1964, with only his widow as compulsory
heir. His will was admitted to probate by the Court of First
Instance of Manila, Branch X, on July 27, 1965. Maria
Luisa Palacios was appointed administratrix of the estate.
In due time she submitted an inventory of the estate.
On June 23, 1966, the administratrix submitted a project of
partition as follows: the property of the deceased is to be
divided into two parts. One part shall go to the widow 'en
pleno dominio" in satisfaction of her legitime; the other part
or "free portion" shall go to Jorge and Roberto Ramirez

"en nuda propriedad." Furthermore, one third (1/3) of the
free portion is charged with the widow's usufruct and the
remaining two-thirds (2/3) with a usufruct in favor of
Wanda.
Jorge and Roberto opposed the project of partition on the
grounds: (a) that the provisions for vulgar substitution in
favor of Wanda de Wrobleski with respect to the widow's
usufruct and in favor of Juan Pablo Jankowski and Horacio
V. Ramirez, with respect to Wanda's usufruct are invalid
because the first heirs Marcelle and Wanda) survived the
testator; (b) that the provisions for fideicommissary
substitutions are also invalid because the first heirs are not
related to the second heirs or substitutes within the first
degree, as provided in Article 863 of the Civil Code; (c)
that the grant of a usufruct over real property in the
Philippines in favor of Wanda Wrobleski, who is an alien,
violates Section 5, Article III of the Philippine Constitution;
and that (d) the proposed partition of the testator's interest
in the Santa Cruz (Escolta) Building between the widow
Marcelle and the appellants, violates the testator's express
win to give this property to them Nonetheless, the lower
court approved the project of partition in its order dated
May 3, 1967. It is this order which Jorge and Roberto have
appealed to this Court.
1. The widow's legitime.
The appellant's do not question the legality of giving
Marcelle one-half of the estate in full ownership. They
admit that the testator's dispositions impaired his widow's
legitime. Indeed, under Art. 900 of the Civil Code "If the
only survivor is the widow or widower, she or he shall be
entitled to one-half of the hereditary estate." And since
Marcelle alone survived the deceased, she is entitled to
one-half of his estate over which he could impose no
burden, encumbrance, condition or substitution of any kind
whatsoever. (Art. 904, par. 2, Civil Code.)
It is the one-third usufruct over the free portion which the
appellants question and justifiably so. It appears that the
court a quo approved the usufruct in favor of Marcelle
because the testament provides for a usufruct in her favor
of one-third of the estate. The court a quo erred for
Marcelle who is entitled to one-half of the estate "en pleno
dominio" as her legitime and which is more than what she
is given under the will is not entitled to have any additional
share in the estate. To give Marcelle more than her
legitime will run counter to the testator's intention for as
stated above his dispositions even impaired her legitime
and tended to favor Wanda.
2. The substitutions.
It may be useful to recall that "Substitution is the appoint-
judgment of another heir so that he may enter into the
inheritance in default of the heir originally instituted." (Art.
857, Civil Code. And that there are several kinds of
substitutions, namely: simple or common, brief or
Law on NatRes (50-72 18
compendious, reciprocal, and fideicommissary (Art. 858,
Civil Code.) According to Tolentino, "Although the Code
enumerates four classes, there are really only two
principal classes of substitutions: the simple and the
fideicommissary. The others are merely variations of these
two." (111 Civil Code, p. 185 [1973].)
The simple or vulgar is that provided in Art. 859 of the Civil
Code which reads:
ART. 859. The testator may designate one or more
persons to substitute the heir or heirs instituted in case
such heir or heirs should die before him, or should not
wish, or should be incapacitated to accept the inheritance.
A simple substitution, without a statement of the cases to
which it refers, shall comprise the three mentioned in the
preceding paragraph, unless the testator has otherwise
provided.
The fideicommissary substitution is described in the Civil
Code as follows:
ART. 863. A fideicommissary substitution by virtue of
which the fiduciary or first heir instituted is entrusted with
the obligation to preserve and to transmit to a second heir
the whole or part of inheritance, shall be valid and shall
take effect, provided such substitution does not go beyond
one degree from the heir originally instituted, and provided
further that the fiduciary or first heir and the second heir
are living at time of the death of the testator.
It will be noted that the testator provided for a vulgar
substitution in respect of the legacies of Roberto and
Jorge Ramirez, the appellants, thus: con sustitucion vulgar
a favor de sus respectivos descendientes, y, en su
defecto, con substitution vulgar reciprocal entre ambos.
The appellants do not question the legality of the
substitution so provided. The appellants question the
sustitucion vulgar y fideicomisaria a favor de Da. Wanda
de Wrobleski" in connection with the one-third usufruct
over the estate given to the widow Marcelle However, this
question has become moot because as We have ruled
above, the widow is not entitled to any usufruct.
The appellants also question the sustitucion vulgar y
fideicomisaria in connection with Wanda's usufruct over
two thirds of the estate in favor of Juan Pablo Jankowski
and Horace v. Ramirez.
They allege that the substitution in its vulgar aspect as
void because Wanda survived the testator or stated
differently because she did not predecease the testator.
But dying before the testator is not the only case for vulgar
substitution for it also includes refusal or incapacity to
accept the inheritance as provided in Art. 859 of the Civil
Code, supra. Hence, the vulgar substitution is valid.

As regards the substitution in its fideicommissary aspect,
the appellants are correct in their claim that it is void for
the following reasons:
(a) The substitutes (Juan Pablo Jankowski and
Horace V. Ramirez) are not related to Wanda, the heir
originally instituted. Art. 863 of the Civil Code validates a
fideicommissary substitution "provided such substitution
does not go beyond one degree from the heir originally
instituted."
What is meant by "one degree" from the first heir is
explained by Tolentino as follows:
Scaevola Maura, and Traviesas construe "degree" as
designation, substitution, or transmission. The Supreme
Court of Spain has decidedly adopted this construction.
From this point of view, there can be only one tranmission
or substitution, and the substitute need not be related to
the first heir. Manresa, Morell and Sanchez Roman,
however, construe the word "degree" as generation, and
the present Code has obviously followed this
interpretation. by providing that the substitution shall not
go beyond one degree "from the heir originally instituted."
The Code thus clearly indicates that the second heir must
be related to and be one generation from the first heir.
From this, it follows that the fideicommissary can only be
either a child or a parent of the first heir. These are the
only relatives who are one generation or degree from the
fiduciary (Op. cit., pp. 193-194.)
(b) There is no absolute duty imposed on Wanda to
transmit the usufruct to the substitutes as required by Arts.
865 and 867 of the Civil Code. In fact, the appellee admits
"that the testator contradicts the establishment of a
fideicommissary substitution when he permits the
properties subject of the usufruct to be sold upon mutual
agreement of the usufructuaries and the naked owners."
(Brief, p. 26.)
3. The usufruct of Wanda.
The appellants claim that the usufruct over real properties
of the estate in favor of Wanda is void because it violates
the constitutional prohibition against the acquisition of
lands by aliens.
The 1935 Constitution which is controlling provides as
follows:
SEC. 5. Save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the
Philippines. (Art. XIII.)
The court a quo upheld the validity of the usufruct given to
Wanda on the ground that the Constitution covers not only
succession by operation of law but also testamentary
Law on NatRes (50-72 19
succession. We are of the opinion that the Constitutional
provision which enables aliens to acquire private lands
does not extend to testamentary succession for otherwise
the prohibition will be for naught and meaningless. Any
alien would be able to circumvent the prohibition by paying
money to a Philippine landowner in exchange for a devise
of a piece of land.
This opinion notwithstanding, We uphold the usufruct in
favor of Wanda because a usufruct, albeit a real right,
does not vest title to the land in the usufructuary and it is
the vesting of title to land in favor of aliens which is
proscribed by the Constitution.
IN VIEW OF THE FOREGOING, the estate of Jose
Eugenio Ramirez is hereby ordered distributed as follows:
One-half (1/2) thereof to his widow as her legitime;
One-half (1/2) thereof which is the free portion to Roberto
and Jorge Ramirez in naked ownership and the usufruct to
Wanda de Wrobleski with a simple substitution in favor of
Juan Pablo Jankowski and Horace V. Ramirez.
The distribution herein ordered supersedes that of the
court a quo. No special pronouncement as to costs. SO
ORDERED.
REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE
COURT OF APPEALS AND SPOUSES MARIO B.
LAPIA AND FLOR DE VEGA, respondents.; G.R. No.
108998 August 24, 1994
Can a foreign national apply for registration of title over a
parcel of land which he acquired by purchase while still a
citizen of the Philippines, from a vendor who has complied
with the requirements for registration under the Public
Land Act (CA 141)?
The Republic would have us rule on the negative and asks
this Court to nullify the decision of the appellate court
which affirmed the judgment of the court a quo in granting
the application of respondent spouses for registration over
the lots in question.
On June 17, 1978, respondent spouses bought Lots 347
and 348, Cad. s38-D, as their residence with a total area
of 91.77 sq. m. situated in San Pablo City, from one
Cristeta Dazo Belen (Rollo, p. 41). At the time of the
purchase, respondent spouses where then natural-born
Filipino citizens.
On February 5, 1987, the spouses filed an application for
registration of title of the two (2) parcels of land before the
Regional Trial Court of San Pablo City, Branch XXXI. This
time, however, they were no longer Filipino citizens and
have opted to embrace Canadian citizenship through
naturalization.

An opposition was filed by the Republic and after the
parties have presented their respective evidence, the court
a quo rendered a decision confirming private respondents'
title to the lots in question, the dispositive portion of which
reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby
approves the said application and confirms the title and
possession of herein applicants over Lots 347 and 348,
Ap-04-003755 in the names of spouses Mario B. Lapia
and Flor de Vega, all of legal age, Filipino citizens by birth
but now Canadian citizens by naturalization and residing
at 14 A. Mabini Street, San Pablo City and/or 201-1170-
124 Street, Edmonton, Alberta T5M-OK9, Canada.
Once this Decision becomes final, let the corresponding
decree of registration be issued. In the certificate of title to
be issued, there shall be annotated an easement of .265
meters road right-of-way.
SO ORDERED. (Rollo, p. 25)
On appeal, respondent court affirmed the decision of the
trial court based on the following ratiocination:
In the present case, it is undisputed that both applicants
were still Filipino citizens when they bought the land in
controversy from its former owner. For this reason, the
prohibition against the acquisition of private lands by
aliens could not apply. In justice and equity, they are the
rightful owners of the subject realty considering also that
they had paid for it quite a large sum of money. Their
purpose in initiating the instant action is merely to confirm
their title over the land, for, as has been passed upon, they
had been the owners of the same since 1978. It ought to
be pointed out that registration is not a mode of acquiring
ownership. The Torrens System was not established as a
means for the acquisition of title to private land. It is
intended merely to confirm and register the title which one
may already have (Municipality of Victorias vs. Court of
Appeals, G.R. No. L-31189, March 31, 1987). With
particular reference to the main issue at bar, the High
Court has ruled that title and ownership over lands within
the meaning and for the purposes of the constitutional
prohibition dates back to the time of their purchase, not
later. The fact that the applicants-appellees are not Filipino
citizens now cannot be taken against them for they were
not disqualified from acquiring the land in question
(Bollozos vs. Yu Tieng Su, G.R. No. L-29442, November
11, 1987). (Rollo, pp. 27-28)
Expectedly, respondent court's disposition did not merit
petitioner's approval, hence this present recourse, which
was belatedly filed.
Ordinarily, this petition would have been denied outright
for having been filed out of time had it not been for the
constitutional issue presented therein.
Law on NatRes (50-72 20
At the outset, petitioner submits that private respondents
have not acquired proprietary rights over the subject
properties before they acquired Canadian citizenship
through naturalization to justify the registration thereof in
their favor. It maintains that even privately owned
unregistered lands are presumed to be public lands under
the principle that lands of whatever classification belong to
the State under the Regalian doctrine. Thus, before the
issuance of the certificate of title, the occupant is not in the
jurisdical sense the true owner of the land since it still
pertains to the State. Petitioner further argued that it is
only when the court adjudicates the land to the applicant
for confirmation of title would the land become privately
owned land, for in the same proceeding, the court may
declare it public land, depending on the evidence.
As found by the trial court:
The evidence thus presented established that applicants,
by themselves and their predecessors-in-interest, had
been in open, public, peaceful, continuous, exclusive and
notorious possession and occupation of the two adjacent
parcels of land applied for registration of title under a
bona-fide claim of ownership long before June 12, 1945.
Such being the case, it is conclusively presumed that all
the conditions essential to the confirmation of their title
over the two adjacent parcels of land are sought to be
registered have been complied with thereby entitling them
to the issuance of the corresponding certificate of title
pursuant to the provisions of Presidential Decree No.
1529, otherwise known as the Property Registration
Decree. (Rollo, p. 26)
Respondent court echoed the court a quo's observation,
thus:
The land sought to be registered has been declared to be
within the alienable and disposable zone established by
the Bureau of Forest Development (Exhibit "P"). The
investigation conducted by the Bureau of Lands, Natural
Resources District (IV-2) reveals that the disputed realty
had been occupied by the applicants "whose house of
strong materials stands thereon"; that it had been declared
for taxation purposes in the name of applicants-spouses
since 1979; that they acquired the same by means of a
public instrument entitled "Kasulatan ng Bilihang Tuluyan"
duly executed by the vendor, Cristeta Dazo Belen, on
June 17, 1978 (Exhibits "I" and "J"); and that applicants
and their predecessors in interest had been in possession
of the land for more than 30 years prior to the filing of the
application for registration. But what is of great
significance in the instant case is the circumstance that at
the time the applicants purchased the subject lot in 1978,
both of them were Filipino citizens such that when they
filed their application for registration in 1987, ownership
over the land in dispute had already passed to them.
(Rollo, p., 27)

The Republic disagrees with the appellate court's concept
of possession and argues:
17. The Court of Appeals found that the land was
declared for taxation purposes in the name of respondent
spouses only since 1979. However, tax declarations or
reality tax payments of property are not conclusive
evidence of ownership. (citing cases)
18. Then again, the appellate court found that
"applicants (respondents) and their predecessors-in-
interest had been in possession of the land for more than
30 years prior to the filing of the application for
registration." This is not, however, the same as saying that
respondents have been in possession "since June 12,
1945." (PD No. 1073, amending Sec. 48 [b], CA NO. 141;
sec. also Sec. 14, PD No. 1529). So there is a void in
respondents' possession. They fall short of the required
possession since June 12, 1945 or prior thereto. And,
even if they needed only to prove thirty (30) years
possession prior to the filing of their application (on
February 5, 1987), they would still be short of the required
possession if the starting point is 1979 when, according to
the Court of Appeals, the land was declared for taxation
purposes in their name. (Rollo, pp. 14-15)
The argument is myopic, to say the least. Following the
logic of petitioner, any transferee is thus foreclosed to
apply for registration of title over a parcel of land
notwithstanding the fact that the transferor, or his
predecessor-in-interest has been in open, notorious and
exclusive possession thereof for thirty (30) years or more.
This is not, however, what the law provides.
As petitioner itself argues, Section 48 of the Public Land
Act (CA 141) reads:
Sec. 48. The following-described citizens of the
Philippines, occupying lands of the public domain or
claiming interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First
Instance (now Regional Trial Court) of the province where
the land is located for confirmation of their claims and the
issuance of a certificate of title therefor under the Land
Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of
agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for
confirmation of title except when prevented by wars or
force majeure. These shall be conclusively presumed to
have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of
Law on NatRes (50-72 21
title under the provisions of this chapter. (Emphasis
supplied)
As amended by PD 1073:
Sec. 4. The provisions of Section 48(b) and
Section 48(c), Chapter VIII, of the Public Land Act are
hereby amended in the sense that these provisions shall
apply only to alienable and disposable lands of the public
domain which have been in open, continuous, exclusive
and notorious possession and occupation by the applicant
himself or thru his predecessor-in-interest, under a bona
fide claim of acquisition or ownership, since June 12,
1945.
It must be noted that with respect to possession and
occupation of the alienable and disposable lands of the
public domain, the law employs the terms "by themselves",
"the applicant himself or through his predecessor-in-
interest". Thus, it matters not whether the
vendee/applicant has been in possession of the subject
property for only a day so long as the period and/or legal
requirements for confirmation of title has been complied
with by his predecessor-in-interest, the said period is
tacked to his possession. In the case at bar, respondents'
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession of the disputed land
not only since June 12, 1945, but even as early as 1937.
Petitioner does not deny this except that respondent
spouses, in its perception, were in possession of the land
sought to be registered only in 1978 and therefore short of
the required length of time. As aforesaid, the disputed
parcels of land were acquired by private respondents
through their predecessors-in-interest, who, in turn, have
been in open and continued possession thereof since
1937. Private respondents stepped into the shoes of their
predecessors-in-interest and by virtue thereof, acquired all
the legal rights necessary to confirm what could otherwise
be deemed as an imperfect title.
At this juncture, petitioner's reliance in Republic v.
Villanueva (114 SCRA 875 [1982]) deserves scant
consideration. There, it was held that before the issuance
of the certificate of title, the occupant is not in the juridical
sense the true owner of the land since it still pertains to the
State.
Suffice it to state that the ruling in Republic v. Villanueva
(supra), has already been abandoned in the 1986 case of
Director of Lands v. Intermediate Appellate Court (146
SCRA 509; and reiterated in Director of Lands v. Iglesia ni
Cristo, 200 SCRA 606 [1991]) where the Court, through
then Associate Justice, now Chief Justice Narvasa,
declared that:
(The weight of authority is) that open, exclusive and
undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby
the land, upon completion of the requisite period ipso jure

and without the need of judicial or other sanction, ceases
to be public land and becomes private property. . . .
Herico in particular, appears to be squarely affirmative:
. . . Secondly, under the provisions of Republic Act
No. 1942, which the respondent Court held to be
inapplicable to the petitioner's case, with the latter's
proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest,
title over the land has vested on petitioner so as to
segregate the land from the mass of public land.
Thereafter, it is no longer disposable under the Public
Land Act as by free patent . . .
xxx xxx xxx
As interpreted in several cases, when the conditions as
specified in the foregoing provision are complied with, the
possessor is deemed to have acquired, by operation of
law, a right to a grant, a government grant, without the
necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain and beyond
the authority of the Director of Lands to dispose of. The
application for confirmation is mere formality, the lack of
which does not affect the legal sufficiency of the title as
would be evidenced by the patent and the Torrens title to
be issued upon the strength of said patent.
Nothing can more clearly demonstrate the logical
inevitability of considering possession of public land which
is of the character and duration prescribed by the statute
as the equivalent of an express grant from the State than
the dictum of the statute itself (Section 48 [b]) that the
possessor(s) ". . . shall be conclusively presumed to have
performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title ..." No
proof being admissible to overcome a conclusive
presumption, confirmation proceedings would, in truth be
little more than a formality, at the most limited to
ascertaining whether the possession claims is of the
required character and length of time; and registration
thereunder would not confer title, but simply recognize a
title already vested. The proceedings would not originally
convert the land from public to private land, but only
confirm such a conversion already affected by operation of
law from the moment the required period of possession
became complete. As was so well put in Cario, ". .
.(There are indications that registration was expected from
all, but none sufficient to show that, for want of it,
ownership actually gained would be lost. The effect of the
proof, wherever made, was not to confer title, but simply to
establish it, as already conferred by the decree, if not by
earlier law. (Emphasis supplied)
Subsequent cases have hewed to the above
pronouncement such that open, continuous and exclusive
possession for at least 30 years of alienable public land
ipso jure converts the same to private property (Director of
Law on NatRes (50-72 22
Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183
SCRA 602 [1990]). This means that occupation and
cultivation for more than 30 years by an applicant and his
predecessors-in-interest, vest title on such applicant so as
to segregate the land from the mass of public and
(National Power Corporation v. CA, 218 SCRA 41 [1993]).
The Public Land Act requires that the applicant must prove
that (a) the land is alienable public land and (b) his
possession, in the concept above stated, must be either
since time immemorial or for the period prescribed in the
Public Land Act (Director of Lands v. Buyco, 216 SCRA 78
[1992]). When the conditions set by law are complied with,
the possessor of the land, by operation of law, acquires a
right to a grant, a government grant, without the necessity
of a certificate of title being issued (National Power
Corporation v. CA, supra). As such, the land ceases to be
a part of the public domain and goes beyond the authority
of the Director of Lands to dispose of.
In other words, the Torrens system was not established as
a means for the acquisition of title to private land
(Municipality of Victorias v. CA, 149 SCRA 32 [1987]). It
merely confirms, but does not confer ownership. As could
be gleaned from the evidence adduced, private
respondents were able to establish the nature of
possession of their predecessors-in-interest. Evidence
was offered to prove that their predecessors-in-interest
had paid taxes on the subject land and introduced
improvements thereon (Exhibits "F" to "F9"). A certified
true copy of the affidavit executed by Cristeta Dazo and
her sister Simplicia was also formally offered to prove that
the subject parcels of land were inherited by vendor
Cristeta Dazo from her father Pedro Dazo with the
conformity of her only sister Simplicia (Exhibit "G").
Likewise, a report from the Bureau of Lands was
presented in evidence together with a letter from the
Bureau of Forest Development, to prove that the
questioned lots were part of the alienable and disposable
zone of the government and that no forestry interest was
affected (CA GR No. 28953, Records, p. 33).
In the main, petitioner seeks to defeat respondents'
application for registration of title on the ground of foreign
nationality. Accordingly, the ruling in Director of Lands v.
Buyco (supra) supports petitioner's thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign
nationals but were natural-born Filipino citizens at the time
of their supposed acquisition of the property. But this is
where the similarity ends. The applicants in Buyco sought
to register a large tract of land under the provisions of the
Land Registration Act, and in the alternative, under the
provisions of the Public Land Act. The land registration
court decided in favor of the applicants and was affirmed
by the appellate court on appeal. The Director of Lands
brought the matter before us on review and we reversed.

This Court, speaking through Justice Davide, Jr., stated:
As could be gleaned from the evidence adduced, the
private respondents do not rely on fee simple ownership
based on a Spanish grant or possessory information title
under Section 19 of the Land Registration Act; the private
respondents did not present any proof that they or their
predecessors-in-interest derived title from an old Spanish
grant such as (a) the "titulo real" or royal grant (b) the
"concession especial" or especial grant; (c) the
"composicion con el estado" title or adjustment title; (d) the
"titulo de compra" or title by purchase; and (e) the
"informacion posesoria" or possessory information title,
which could become a "titulo gratuito" or a gratuitous title
(Director of Forestry v. Muoz, 23 SCRA 1183 [1968]).
The primary basis of their claim is possession, by
themselves and their predecessors-in-interest, since time
immemorial.
If indeed private respondents and their predecessors have
been in possession since time immemorial, the rulings of
both courts could be upheld for, as this Court stated in Oh
Cho v. Director of Lands (75 Phil. 890 [1946]):
. . . All lands that were not acquired from the Government,
either by purchase or by grant, belong to the public
domain. An exception to the rule would be any land that
should have been in the possession of an occupant and of
his predecessors in interest since time immemorial, for
such possession would justify the presumption that the
land had never been part of the public domain or that if
had been a private property even before the Spanish
conquest (Cario v. Insular Government, 41 Phil 935
[1909]; 212 U.S. 449; 53 Law. Ed., 594) The applicant
does not come under the exception, for the earliest
possession of the lot by his first predecessor in interest
began in 1880.
. . . alienable public land held by a possessor, personally
or through his predecessors-in-interest, openly,
continuously and exclusively for the prescribed statutory
period (30 years under the Public Land Act, as amended)
is converted to private property by the mere lapse or
completion of said period, ipso jure. (Director of Lands v.
Intermediate Appellate Court, supra)
It is obvious from the foregoing rule that the applicant must
prove that (a) the land is alienable public land and (b) his
possession, in the concept above stated, must be either
since time immemorial, as ruled in both Cario and Susi,
or for the period prescribed in the Public Land Act. As to
the latter, this Court, in Gutierrez Hermanos v. Court of
Appeals (178 SCRA 37 [1989]), adopted the rule
enunciated by the Court of Appeals, per then Associate
Justice Hugo R. Gutierrez, Jr., . . ., that an applicant for
registration under Section 48 of the Public Land Act must
secure a certification from the Government that the lands
which he claims to have possessed as owner for more
Law on NatRes (50-72 23
than thirty (30) years are alienable and disposable. It is the
burden of the applicant to prove its positive averments.
In the instant case, private respondents offered no
evidence at all to prove that the property subject of the
application is an alienable and disposable land. On the
contrary, the entire property . . . was pasture land (and
therefore inalienable under the then 1973 Constitution).
. . . (P)rivate respondents' evidence miserably failed to
establish their imperfect title to the property in question.
Their allegation of possession since time immemorial, . . .,
is patently baseless. . . . When referring to possession,
specifically "immemorial possession," it means possession
of which no man living has seen the beginning, and the
existence of which he has learned from his elders (Susi v.
Razon, supra). Such possession was never present in the
case of private respondents. . . .
. . ., there does not even exist a reasonable basis for the
finding that the private respondents and their
predecessors-in-interest possessed the land for more than
eighty (80) years, . . .
xxx xxx xxx
To this Court's mind, private respondents failed to prove
that (their predecessor-in-interest) had possessed the
property allegedly covered by Tax Declaration No. 15853
and made the subject of both his last will and testament
and the project of partition of his estate among his heirs
in such manner as to remove the same from the public
domain under the Cario and Susi doctrines. Thus, (when
the predecessor-in-interest) died on 31 May 1937, he
transmitted no right whatsoever, with respect to the said
property, to his heirs. This being the case, his possession
cannot be tacked to that of the private respondents for the
latter's benefit pursuant to Section 48(b) of the Public Land
Act, the alternative ground relied upon in their application .
..
xxx xxx xxx
Considering that the private respondents became
American citizens before such filing, it goes without saying
that they had acquired no vested right, consisting of an
imperfect title, over the property before they lost their
Philippine citizenship. (Emphasis supplied)
Clearly, the application in Buyco were denied registration
of title not merely because they were American citizens at
the time of their application therefor. Respondents therein
failed to prove possession of their predecessor-in-interest
since time immemorial or possession in such a manner
that the property has been segregated from public domain;
such that at the time of their application, as American
citizens, they have acquired no vested rights over the
parcel of land.

In the case at bar, private respondents were undoubtedly
natural-born Filipino citizens at the time of the acquisition
of the properties and by virtue thereof, acquired vested
rights thereon, tacking in the process, the possession in
the concept of owner and the prescribed period of time
held by their predecessors-in-interest under the Public
Land Act. In addition, private respondents have
constructed a house of strong materials on the contested
property, now occupied by respondent Lapias mother.
But what should not be missed in the disposition of this
case is the fact that the Constitution itself allows private
respondents to register the contested parcels of land in
their favor. Sections 7 and 8 of Article XII of the
Constitution contain the following pertinent provisions, to
wit:
Sec. 7. Save in cases of hereditary succession, no
private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of
this Article, a natural-born citizen of the Philippines who
has lost his Philippine citizenship may be a transferee of
private lands, subject to limitations provided by law.
(Emphasis supplied)
Section 8, Article XII of the 1987 Constitution above
quoted is similar to Section 15, Article XIV of the then
1973 Constitution which reads:
Sec. 15. Notwithstanding the provisions of
Section 14 of this Article, a natural-born citizen of the
Philippines who has lost his citizenship may be a
transferee of private land, for use by him as his residence,
as the Batasang Pambansa may provide.
Pursuant thereto, Batas Pambansa Blg. 185 was passed
into law, the relevant provision of which provides:
Sec. 2. Any natural-born citizen of the
Philippines who has lost his Philippine citizenship and who
has the legal capacity to enter into a contract under
Philippine laws may be a transferee of a private land up to
a maximum area of one thousand square meters, in the
case of urban land, or one hectare in the case of rural
land, to be used by him as his residence. In the case of
married couples, one of them may avail of the privilege
herein granted; Provided, That if both shall avail of the
same, the total area acquired shall not exceed the
maximum herein fixed.
In case the transferee already owns urban or rural lands
for residential purposes, he shall still be entitled to be a
transferee of an additional urban or rural lands for
residential purposes which, when added to those already
owned by him, shall not exceed the maximum areas
herein authorized.
Law on NatRes (50-72 24
From the adoption of the 1987 Constitution up to the
present, no other law has been passed by the legislature
on the same subject. Thus, what governs the disposition of
private lands in favor of a natural-born Filipino citizen who
has lost his Philippine citizenship remains to be BP 185.
Even if private respondents were already Canadian
citizens at the time they applied for registration of the
properties in question, said properties as discussed above
were already private lands; consequently, there could be
no legal impediment for the registration thereof by
respondents in view of what the Constitution ordains. The
parcels of land sought to be registered no longer form part
of the public domain. They are already private in character
since private respondents' predecessors-in-interest have
been in open, continuous and exclusive possession and
occupation thereof under claim of ownership prior to June
12, 1945 or since 1937. The law provides that a natural-
born citizen of the Philippines who has lost his Philippine
citizenship may be a transferee of a private land up to a
maximum area of 1,000 sq.m., if urban, or one (1) hectare
in case of rural land, to be used by him as his residence
(BP 185).
It is undisputed that private respondents, as vendees of a
private land, were natural-born citizens of the Philippines.
For the purpose of transfer and/or acquisition of a parcel of
residential land, it is not significant whether private
respondents are no longer Filipino citizens at the time they
purchased or registered the parcels of land in question.
What is important is that private respondents were
formerly natural-born citizens of the Philippines, and as
transferees of a private land, they could apply for
registration in accordance with the mandate of Section 8,
Article XII of the Constitution. Considering that private
respondents were able to prove the requisite period and
character of possession of their predecessors-in-interest
over the subject lots, their application for registration of
title must perforce be approved.
The dissenting opinion, however, states that the
requirements in BP 185, must also be complied with by
private respondents. Specifically, it refers to Section 6,
which provides:
Sec. 6. In addition to the requirements provided
for in other laws for the registration of titles to lands, no
private land shall be transferred under this Act, unless the
transferee shall submit to the register of deeds of the
province or city where the property is located a sworn
statement showing the date and place of his birth; the
names and addresses of his parents, of his spouse and
children, if any; the area, the location and the mode of
acquisition of his landholdings in the Philippines, if any; his
intention to reside permanently in the Philippines; the date
he lost his Philippine citizenship and the country of which
he is presently a citizen; and such other information as
may be required under Section 8 of this Act.

The Court is of the view that the requirements in Sec. 6 of
BP 185 do not apply in the instant case since said
requirements are primarily directed to the register of deeds
before whom compliance therewith is to be submitted.
Nowhere in the provision is it stated, much less implied,
that the requirements must likewise be submitted before
the land registration court prior to the approval of an
application for registration of title. An application for
registration of title before a land registration court should
not be confused with the issuance of a certificate of title by
the register of deeds. It is only when the judgment of the
land registration court approving the application for
registration has become final that a decree of registration
is issued. And that is the time when the requirements of
Sec. 6, BP 185, before the register of deeds should be
complied with by the applicants. This decree of registration
is the one that is submitted to the office of the register of
deeds for issuance of the certificate of title in favor of the
applicant. Prior to the issuance of the decree of
registration, the register of deeds has no participation in
the approval of the application for registration of title as the
decree of registration is yet to be issued.
WHEREFORE, the petition is DISMISSED and the
decision appealed from is hereby AFFIRMED. SO
ORDERED.
REPUBLIC OF THE PHILIPPINES, Represented by the
DIRECTOR OF LANDS, petitioner, vs. HON. PEDRO
SAMSON ANIMAS, in his capacity as Judge of CFI
South Cotabato, Branch I, General Santos City,
ISAGANI DU TIMBOL and the REGISTER OF DEEDS
OF GENERAL SANTOS CITY, respondent.; G.R. No. L-
37682 March 29, 1974
Petition to review the order of the Court of First Instance of
South Cotabato, Branch I, General Santos City, dated
June 22, 1973, dismissing the complaint in its Civil Case
No. 1253, entitled "Republic of the Philippines, Plaintiff, vs.
Isagani Du Timbol and the Register of Deeds of General
Santos City, Defendants", instituted by the plaintiff to
declare null and void Free Patent No. V-466102 and
Original Certificate of Title (O.C.T.) No. P-2508 based
thereon issued in the name of defendant Isagani Du
Timbol; to order the aforesaid defendant to surrender the
owner's duplicate of O.C.T. No. P-2508 and the defendant
Register of Deeds to cancel the same; to decree the
reversion of the land in question to the mass of public
domain, and granting such further relief as may be just
and equitable in the premises.
The land covered by the free patent and title in question
was originally applied for by Precila Soria, who on
February 23, 1966, transferred her rights to the land and
its improvements to defendant Isagani Du Timbol who filed
his application therefor on February 3, 1969, as a
transferee from Precila Soria.
Law on NatRes (50-72 25
On December 12, 1969, free Patent No. V-466102 was
issued by the President of the Philippines for the land in
question, and on July 20, 1970, after transmittal of the
patent to the Register of Deeds of General Santos City,
Original Certificate of Title (O.C.T.) No. P-2508 was issued
in the name of defendant Isagani Du Timbol.
On August 5, 1971, the Republic of the Philippines, at the
instance of the Bureau of Forestry, filed a complaint in the
Court of First Instance of Cotabato, Branch I, General
Santos City (Civil Case No. 1253), to declare free patent
No. V-466102 and Original Certificate of Title No. P-2508
in the name of defendant Isagani Du Timbol null and void
ab initio and to order the reversion of the land in question
to the mass of public domain. The action is based on the
ground that the land covered thereby is a forest or timber
land which is not disposable under the Public Land Act;
that in a reclassification of the public lands in the vicinity
where the land in question is situated made by the Bureau
of Forestry on March 7, 1958, the said land was plotted on
Bureau of Forestry map L.C. 700 to be inside the area
which was reverted to the category of public forest,
whereas the application for free patent by Isagani Du
Timbol was filed on June 3, 1969, or more than eleven
years thereafter; that the said patent and title were
obtained fraudulently as private respondent Isagani Du
Timbol never occupied and cultivated the land applied for.
Invoking the case of Ramirez vs. Court of Appeals (G.R.
No. L-28591, 30 SCRA 207-301), holding that a certificate
of title fraudulently secured is not null and void ab initio,
unless the fraud consisted in misrepresenting that the land
covered by the application is part of the public domain
when it is not, the respondent court dismissed the
complaint on the ground that Certificate of Title based on
the patent had became indefeasible in view of the lapse of
the one-year period prescribed under Section 38 of the
Land Registration Act for review of a decree of title on the
ground of fraud. From this order of June 22, 1973,
dismissing the complaint, plaintiff Republic of the
Philippines has appealed to this Court for review.
After careful deliberation, this Court grants the petition on
the ground that the area covered by the patent and title is
not disposable public land, it being a part of the forest
zone and, hence the patent and title thereto are null and
void.
The defense of indefeasibility of a certificate of title issued
pursuant to a free patent does not lie against the state in
an action for reversion of the land covered thereby when
such land is a part of a public forest or of a forest
reservation. As a general rule, timber or forest lands are
not alienable or disposable under either the Constitution of
1935 or the Constitution of 1973. Although the Director of
Lands has jurisdiction over public lands classified as
agricultural under the constitution, or alienable or
disposable under the Public Land Act, and is charged with

the administration of all laws relative thereto, mineral and
timber lands are beyond his jurisdiction. It is the Bureau of
Forestry that has jurisdiction and authority over the
demarcation, protection, management, reproduction,
occupancy and use of all public forests and forest
reservations and over the granting of licenses for the
taking of products therefrom, including stone and earth
(Section 1816 of the Revised Administrative Code). That
the area in question is a forest or timber land is clearly
established by the certification made by the Bureau of
Forest Development that it is within the portion of the area
which was reverted to the category of forest land,
approved by the President on March 7, 1958. When the
defendant Isagani Du Timbol filed his application for free
patent over the land in question on June 3, 1969, the area
in question was not a disposable or alienable public land
but a public forest. Titles issued to private parties by the
Bureau of Lands when the land covered thereby is not
disposable public land but forest land are void ab initio. In
Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, 6
SCRA p. 508, 512, this Court said:
And if it be true that the Bureau of Lands had no
jurisdiction to issue a patent because the land involved
was still inalienable forest land when granted, then it may
be plausibly contended that the patent title would be ab
initio void, subject to attack at any time by any party
adversely affected. (Gatchalian vs. Pavilen, et al., L-
17619, Oct. 31, 1962, supra, citing Civil Code Arts. 1409
and 1421; Vao vs. Insular Gov't., 41 Phil. 161; Aderable
vs. Director of Forestry, L-13663, March 25, 1960).
A patent is void at law if the officer who issued the patent
had no authority to do so (Knight vs. Land Ass., 142 U.S.
161, 12 Sup. Ct., 258, 35L ED. 974; emphasis supplied). If
a person obtains a title under the Public Land Act which
includes, by mistake or oversight, lands which cannot be
registered under the Torrens System, or when the Director
of Lands did not have jurisdiction over the same because it
is a public forest, the grantee does not, by virtue of said
certificate of title alone, become the owner of the land
illegally included. (See Ledesma vs. Municipality of Iloilo,
49 Phil. 769)
The case of Ramirez vs. Court of Appeals, G. R. No. L-
28591, Oct. 31, 1969, 30 SCRA 297, relied upon by
respondent Court in dismissing this case, is not controlling.
In that case no forest land was involved but agricultural
public land which was first covered by a patent issued to
one party and later registered under the Torrens System
by the other party. The litigation was between private
parties where the party who registered it under Act No.
496 sought the nullity of the title of the patentee under the
Public Land Act. In the case at bar the party seeking the
nullity of the title and reversion of the land is the state itself
which is specifically authorized under Section 101 of the
Public Land Act to initiate such proceedings as an attribute
of sovereignty, a remedy not available to a private
individual.
Law on NatRes (50-72 26
The complaint alleges in its paragraph 8 that applicant
Isagani Du Timbol was never in possession of the property
prior to his filing the application, contrary to the provisions
of law that the applicant must have been in possession or
cultivation thereof for at least 30 years; that the applicant,
after diligent search by the Acting Chief of the Survey-
Party, Francisco R. Alcones, in South Cotabato, could not
be contacted because he is a resident of Davao City; that
there are no existing signs of improvements found in the
area in question as it is not under cultivation but covered
with grasses, bushes and small trees; that it is being used
as ranch for grazing cows by the heirs of Hermogenes
Chilsot; that no monuments were placed on the area
surveyed which goes to show that there was no actual
survey thereof; that the property in question is inside the
ranch of the heirs of Hermogenes Chilsot under Pasture
Lease Agreement No. 1244 and, therefore, inside the
forest zone; and that said ranch has a fence around it to
show that other persons could not enter and cultivate the
same, and that the signature of then Acting District Land
Officer Elias de Castro of South Cotabato has been forged
to facilitate the issuance of patent in favor of Isagani Du
Timbol.
The above alleged circumstances are indicative of fraud in
the filing of the application and obtaining title to the land,
and if proven would override respondent Judge's order
dismissing the case without hearing. The
misrepresentations of the applicant that he had been
occupying and cultivating the land and residing thereon
are sufficient grounds to nullify the grant of the patent and
title under Section 91 of the Public Land Law which
provides as follows:
That statements made in the application shall be
considered as essential conditions or parts of any
concession, title or permit issued on the basis of such
application, and any false statement thereon or omission
of facts, changing, or modifying the consideration of the
facts set forth in such statement, and any subsequent
modification, alteration, or change of the material facts set
forth in the application shall ipso facto produce the
cancellation of the concession, title or permit granted. ...
A certificate of title that is void may be ordered cancelled.
A title will be considered void if it is procured through
fraud, as when a person applies for registration of the land
under his name although the property belongs to another.
In the case of disposable public lands, failure on the part
of the grantee to comply with the conditions imposed by
law is a ground for holding such title void (Director of
Lands vs. Court of Appeals, et al., G.R. No. L-17696, May
19, 1966, 17 SCRA, 71, 79-80; emphasis supplied). The
lapse of the one year period within which a decree of title
may be reopened for fraud would not prevent the
cancellation thereof, for to hold that a title may become
indefeasible by registration, even if such title had been
secured through fraud or in violation of the law, would be

the height of absurdity. Registration should not be a shield
of fraud in securing title. (J. M. Tuason & Co., Inc. vs.
Macalindog, L-15398, December 29, 1962, 6 SCRA 938,
page 38).
Considering that it is the state is seeking the cancellation
of the title of respondent Isagani Du Timbol, said title has
not become indefeasible for prescription cannot be
invoked against the state. A title founded on fraud may be
cancelled, notwithstanding the lapse of one year from the
issuance thereof, through a petition filed in court by the
Solicitor General, (Sumail vs. Court of First Instance of
Cotabato, 51 O.G. p. 2414 Phil. L-8278. 96 Phil. 946:
Eugenio, et al., vs. Perdido, et al., G. R. No. L-7083, May
19, 1955; De los Santos vs. Roman Catholic Church of
Midsayap G.R. No. L-6088, Feb. 24, 1954, 94 Phil. 405).
Public land fraudulently included in patents or certificates
of title may be recovered or reverted to the state in
accordance with Section 101 of the Public Land Act
(Director of Lands vs. Jugado et al., G.R. No. L-14707,
May 23, 1961). Prescription does not lie against the state
in such cases for the Statute of Limitations does not run
against the state (Article 1108, paragraph 4 of the New
Civil Code). The right of reversion or reconveyance to the
state is not barred prescription (Republic of the Philippines
vs. Ramona Ruiz, et al., G.R. No. L-23712, April 29, 1968,
23 SCRA 348. People vs. Ramos, G.R. No. L-15484, Jan.
31, 1963, 47 SCRA 12; Government of the Philippines vs.
Monte de Piedad 35 Phil. 728; 751-753).
Even granting that the title of private respondent Isagani
Du Timbol can no longer be reopened under the Land
Registration Act, the land covered thereby may be
reconveyed to the state in an action for reconveyance
under Section 101 of Commonwealth Act 141 (Public Land
Act), for the remedy of reconveyance is adequately
covered by the prayer of the complaint for the grant of
such other relief as may be just and equitable in the
premises.
FOR ALL THE FOREGOING, the order of the respondent
court, dated June 22, 1973, dismissing the complaint, and
that of September 29, 1973, denying the motion for its
reconsideration, both issued in Civil Case No. 1253 of the
respondent court, are hereby annulled and set aside. The
respondent court shall proceed to hear said Civil Case and
render judgment thereon accordingly.
REPUBLIC OF THE PHILIPPINES, represented by the
DIRECTOR OF LANDS, petitioner, vs. HONORABLE
MARIANO M. UMALI, in his capacity as Presiding
Judge, Regional Trial Court, Fourth Judicial Region,
Branch 23, Trece Martires City, REMEDIOS MICLAT,
JUAN C. PULIDO, ROSALINA NAVAL, and the
REGISTER OF DEEDS OF CAVITE, respondents; G.R.
No. 80687 April 10, 1989
The petitioner seeks reversion of a parcel of land on the
ground that the original sale thereof from the government
Law on NatRes (50-72 27
was tainted with fraud because based on a forgery and
therefore void ab initio. The present holders of the property
claiming to be innocent purchasers for value and not privy
to the alleged forgery, contend that the action cannot lie
against them.
The land in question is situated in Tanza, Cavite, and
consists of 78,865 square meters. 1 It was originally
purchased on installment from the government on July 1,
1910 by Florentina Bobadilla, who allegedly transferred
her rights thereto in favor of Martina, Tomasa, Gregorio
and Julio, all surnamed Cenizal, in 1922. 2 Tomasa and
Julio assigned their shares to Martina, Maria and Gregorio.
3 In 1971 these three assignees purportedly signed a joint
affidavit which was filed with the Bureau of Lands to
support their claim that they were entitled to the issuance
of a certificate of title over the said land on which they said
they had already made full payment. 4 On the basis of this
affidavit, the Secretary of Agriculture and Natural
Resources executed Deed No. V-10910 (Sale Certificate
No. 1280) on September 10, 1971, in favor of the said
affiants. 5 Subsequently, on October 13, 1971, TCT No.
55044 (replacing Bobadilla's OCT No. 180) was issued by
the register of deeds of Cavite in favor of Maria Cenizal,
Gregorio Cenizal, and (in lieu of Martina Cenizal) Rosalina
Naval, Luz Naval, and Enrique Naval. 6
When the complaint for reversion was filed on October 10,
1985, the registered owners of the land, following several
transfers, were Remedios Miclat under TCT No. 80392,
Juan C. Pulido under TCT No. 80393, and Rosalina, Luz
and Enrique Naval under TCT No. 80394. 7 They were
named as defendants and asked to return the property to
the State on the aforestated grounds of forgery and fraud.
The plaintiff claimed that Gregorio Cenizal having died on
February 25, 1943, and Maria Cenizal on January 8, 1959,
they could not have signed the joint affidavit dated August
9, 1971, on which Deed No. V-10910 (Sale Certificate No.
1280) was based. 8
In their answer, Pulido and the Navals denied any
participation in the joint affidavit and said they had all
acquired the property in good faith and for value. By way
of affirmative defenses, they invoked estoppel, laches,
prescription and res judicata. 9 For her part, Miclat moved
to dismiss the complaint, contending that the government
had no cause of action against her because there was no
allegation that she had violated the plaintiff's right, that the
government was not the real party-in-interest because the
subject land was already covered by the Torrens system,
and that in any event the action was barred by prescription
or laches. 10
The respondent court, in its order dated October 2, 1987,
granted the motion. 11 The petitioner, contesting this
order, now insists that it has a valid cause of action and
that it is not barred by either prescription or res judicata.

The Court will observe at the outset that the joint affidavit
is indeed a forgery. Apart from the fact that two of the
supposed affiants were already dead at the time they were
supposed to have signed the sworn statement, even the
most cursory examination of the document will show that
the three signatures affixed thereto were written by one
and the same hand. 12 There is no doubt about it. It is
indeed difficult to understand how such an obvious forgery
could have deceived the people in the Bureau of Lands
who processed the papers of this case and made possible
the fraudulent transfer of the land.
But given such deception, would the sale itself be
considered null and void from the start, as the petitioner
insists, so as to make all titles derived therefrom also
ineffectual ab initio?
We agree with the contention that there is no allegation in
the complaint 13 filed by the petitioner that any one of the
defendants was privy to the forged joint affidavit or that
they had acquired the subject land in bad faith. Their
status as innocent transferees for value was never
questioned in that pleading. Not having been disproved,
that status now accords to them the protection of the
Torrens System and renders the titles obtained by them
thereunder indefeasible and conclusive. The rule will not
change despite the flaw in TCT No. 55044.
Section 39 of the Land Registration Act clearly provided:
Sec. 39. Every person receiving a certificate of title in
pursuance of a decree of registration, and every
subsequent purchaser of registered land who takes a
certificate of title for value in good faith shall hold the same
free of all encumbrance except those noted on said
certificate.
The rulings on this provision are indeed as numerous as
they are consistent:
Thus, under Section 44 of P.D. 1529 (then Sec. 39 of the
Land Reg. Act), every registered owner receiving a
certificate of title in pursuance of a decree of registration,
and every subsequent purchaser of registered land taking
a certificate of title for value and in good faith, shall hold
the same free from all encumbrances except those noted
on the certificate and any of the encumbrances which may
be subsisting, and enumerated in the law. Under said
provision, claims and liens of whatever character, except
those mentioned by law as existing against the land prior
to the issuance of certificate of title, are cut off by such
certificate if not noted thereon, and the certificate so
issued binds the whole world, including the government.
14
xxx xxx xxx
A holder in bad faith is not entitled to the protection of Sec.
39 of the Land Registration Act. 15
Law on NatRes (50-72 28
xxx xxx xxx
The real purpose of the Torrens System of land
registration is to quiet title to land; to put a stop forever to
any question of the legality of the title, except claims which
were noted at the time of registration in the certificate, or
which may arise subsequent thereto. That being the
purpose of the law, it would seem that once the title was
registered, the owner might rest secure, without the
necessity of waiting in the portals of the court, or sitting in
the "mirador de su casa," to avoid the possibility of losing
his land. 16
The decision in Piero v. Director of Lands 17 is not
applicable to the present proceeding because the lands
involved in that case had not yet passed to the hands of
an innocent purchaser for value. They were still held by
the Pineros. The action for reversion was filed by the
government against them as the original transferees of the
properties in question. They were the direct grantees of
the free patents issued by the government pursuant to
which the corresponding certificates of title were issued
under the Torrens system. The fraud alleged by the
government as a ground for the reversion sought was
imputable directly to the Pineros, who could not plead the
status of innocent purchasers for value.
The difference between them and the private respondents
is that the latter acquired the land in question not by direct
grant but in fact after several transfers following the
original sale thereof to Bobadilla in 1910. The presumption
is that they are innocent transferees for value in the
absence of evidence to the contrary. The petitioner
contends that it was Pedro Miclat who caused the
falsification of the joint affidavit, but that is a bare and
hardly persuasive allegation, and indeed, even if true,
would still not prove any collusion between him and the
private respondents. The mere fact that Remedios Miclat
was the daughter and heiress of Miclat, without more,
would not necessarily visit upon her the alleged sins of her
father.
The Solicitor General also argues that Remedios is an
extension of the juridical personality of her father and so
cannot claim to be an innocent purchaser for value
because she is charged with knowledge of her father's
deceit. Such conclusion has no basis in fact or law.
Moreover, there is evidence that Remedios did not merely
inherit the land but actually purchased it for valuable
consideration and without knowledge of its original defect.
The agreement to subdivide, 18 which she presented to
show that she had acquired the land for valuable
confederation, is more acceptable than the conjectures of
the petitioner. It is also consonant with the presumption of
good faith.
The land being now registered under the Torrens system
in the names of the private respondents, the government

has no more control or jurisdiction over it. It is no longer
part of the public domain or, as the Solicitor General
contends as if it made any difference of the Friar
Lands. The subject property ceased to be public land
when OCT No. 180 was issued to Florentina Bobadilla in
1910 or at the latest from the date it was sold to the
Cenizals in 1971 upon full payment of the purchase price.
As private registered land, it is governed by the provisions
of the Land Registration Act, now denominated the
Property Registration Decree, which applies even to the
government.
The pertinent provision of the Land Registration Act was
Section 122, which read as follows:
Sec. 122. Whenever public lands in the Philippine Islands
belonging to the Government of the United States or to the
Government of the Philippine Islands are alienated,
granted, or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under
the operation of this Act and shall become registered
lands. 19
This should be related to Section 12 of the Friar Lands
Act, providing thus:
Sec. 12. . . . upon the payment of the final installment
together with all accrued interest, the Government will
convey to such settler and occupant the said land so held
by him by proper instrument of conveyance, which shall be
issued and become effective in the manner provided in
section one hundred and twenty-two (Sec. 122) of the
Land Registration Act.
The petitioner claims that it is not barred by the statute of
limitations because the original transfer of the land was
null and void ab initio and did not give rise to any legal
right. The land therefore continued to be part of the public
domain and the action for this reversion could be filed at
any time. The answer to that is the statement made by the
Court in Heirs of Tanak Pangawaran Patiwayan v.
Martinez 20 that "even if respondent Tagwalan eventually
is proven to have procured the patent and the original
certificate of title by means of fraud, the land would not
revert back to the State," precisely because it has become
private land. Moreover, the petitioner errs in arguing that
the original transfer was null and void ab initio, for the fact
is that it is not so. It was only voidable. The land remained
private as long as the title thereto had not been voided, but
it is too late to do that now. As the Court has held in
Ramirez vs. Court of Appeals. 21
A certificate of title fraudulently secured is not null and void
ab initio, unless the fraud consisted in misrepresenting that
the land is part of the public domain, although it is not. In
such case the nullity arises, not from the fraud or deceit,
but from the fact that the land is not under the jurisdiction
of the Bureau of Lands. Inasmuch as the land involved in
the present case does not belong to such category, OCT
Law on NatRes (50-72 29
No. 282-A would be merely voidable or reviewable (Vda.
de Cuaycong vs. Vda. de Sengbengco, 110 Phil. 113): (1)
upon proof of actual fraud; (2) although valid and effective,
until annulled or reviewed in a direct proceeding therefor
(Legarda vs. Saleeby, 31 Phil. 590), not collaterally
(Sorongon vs. Makalintal, 80 Phil. 259, 262; Director of
Lands vs. Gan Tan, 89 Phil. 184; Henderson vs. Garrido,
90 Phil. 624,630; Samonte vs. Sambilon, 107 Phil.
198,200); (3) within the statutory period therefor (Sec. 38,
Act 496; Velasco vs. Gochuico 33 Phil. 363; Delos Reyes
vs. Paterno, 34 Phil. 420; Snyder vs. Provincial Fiscal, 42
Phil. 761, 764; Reyes vs. Borbon, 50 Phil. 791; Clemente
vs. Lukban, 53 Phil. 931; Sugayan vs. Solis, 56 Phil. 276,
279; Heirs of Lichauco vs. Director of Lands, 70 Phil. 69);
(4) after which, the title would be conclusive against the
whole world, including the Government (Legarda vs.
Saleeby, 31 Phil. 590, 596; Central Capiz vs. Ramirez, 40
Phil. 883; J. M. Tuason vs. Santiago, 99 Phil. 615).
And as we declared in Municipality of Hagonoy vs.
Secretary of Agriculture and Natural Resources: 22
. . . Once a patent is registered and the corresponding
certificate of title is issued, the land ceases to be part of
public domain and becomes private property over which
the director of Lands has neither control nor jurisdiction. A
public land patent, when registered in the corresponding
Register of Deeds, is a veritable Torrens Title, and
becomes as indefeasible as Torrens Title upon the
expiration of one (1) year from the date of issuance
thereof. Said title is, like one issued pursuant to a judicial
decree, subject to review within one (1) year from the date
of the issuance of the patent. Beyond said period, the
action for the annulment of the certificate of title issued
upon the land grant can no longer be entertained.
(Emphasis supplied).
It is worth observing here that in two earlier cases, the
private respondents were challenged by the heirs of
Matilde Cenizal Arguson but both were dismissed and the
titles of the registered owners were confirmed by the trial
court. 23 This decision was later sustained by this Court.
24 While this is not to say that the present petition is
barred by res judicata, as the government was not a party
in these cases, it does suggest that the issue it wants to
rake up now has long been settled. It should not be the
subject of further judicial inquiry, especially at this late
hour. Litigation must stop at some point instead of
dragging on interminably.
The Torrens system was adopted in this country because
it was believed to be the most effective measure to
guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established
and recognized. If a person purchases a piece of land on
the assurance that the seller's title thereto is valid, he
should not run the risk of being told later that his
acquisition was ineffectual after all. This would not only be
unfair to him. What is worse is that if this were permitted,

public confidence in the system would be eroded and land
transactions would have to be attended by complicated
and not necessarily conclusive investigations and proof of
ownership. The further consequence would be that land
conflicts could be even more numerous and complex than
they are now and possibly also more abrasive if not even
violent. The government, recognizing the worthy purposes
of the Torrens system, should be the first to accept the
validity of titles issued thereunder once the conditions laid
down by the law are satisfied. As in this case.
We find that the private respondents are transferees in
good faith and for value of the subject property and that
the original acquisition thereof, although fraudulent, did not
affect their own titles. These are valid against the whole
world, including the government.
ACCORDINGLY, the petition is DENIED, without any
pronouncement as to costs. It is so ordered.
ANTONIO PIERO, JR., EMMA BERNAD (assisted by
her husband Norberto Bernad) and FORTUNATO
PIERO, petitioners-appellees, vs. THE DIRECTOR
OF LANDS, SEGUNDO M. REYES, in his capacity as
the Provincial Land Officer of Zamboanga del Norte,
MARIANO D. PALERMO, in his capacity as Deputy
Public Lands Inspector, NICANOR ALASAAS,
EUSEBIO CAMANSI and TOMAS SUMALPONG,
respondents. THE DIRECTOR OF LANDS, SEGUNDO
M. REYES, in his capacity as the Provincial Land
Officer of Zamboanga del Norte and MARIANO D.
PALERMO, in his capacity as Deputy Public Lands
Inspector, respondents-appellants.
Appeal by the Solicitor General from the decision of the
Court of First Instance of Zamboanga del Norte in its Civil
Case No. 1128, granting the writ of prohibition prayed for
by appellees against the appellant Director of Lands, the
Provincial Land Officer of the same province and other
subordinate officials who, by order of said director, had
initiated an investigation of alleged fraud claimed to have
led to the issuance of the Free Patents and corresponding
Certificates of Title to the said appellees.
This appeal was certified to Us by the Court of Appeals on
February 20, 1973, the decision of the trial court being
based exclusively on a stipulation of facts as follows:
1. That Antonio Piero, Jr., and Emma Piero Bernad are
residents of Dipolog, Zamboanga del Norte; while
Fortunate Piero is presently a resident of Negros
Oriental;
2. That the identities of Lots Nos. 5790, 5792 and 2532, all
of Pls- 100, situated at Napuyan, Dapitan, Zamboanga del
Norte, are submitted (sic); .
3. That Lot No. 5790, Pls - 100 is covered by Free Patent
No. V-63411 issued January 30, 1957 in favor of Antonio
Piero, Jr., and Lot No. 5792 Pls - 100 is covered by Free
Law on NatRes (50-72 30
Patent No. V-63420 issued on January 30, 1957 in favor of
Emma Piero Bernad, and that Lot 2532 is applied for by
Fortunato Piero under Homestead Application No. V-
66441 approved as of January 2, 1953, but up to the
present no Patent has as yet been issued; .
4. That Lot 2532 was formerly part of PSU - 111118, a
private survey executed by Surveyor Calixto Sudiacal in
1939 for Fortunato Piero and that by subsequent survey
executed by the ECA, Psu-111118 was subdivided into
smaller lots, one of which is now Lot 2532; .
5. That pursuant to Free Patent No. V-63411, Original
Certificate of Title No. D-5349 was issued by the Register
of Deeds of Zamboanga del Norte in favor of Antonio
Piero, Jr., on October 17, 1957; .
6. That pursuant to Free Patent No. V-63420, Original
Certificate of Title No. P-5312 was issued by Register of
Deeds of Zamboanga del Norte, in favor of Emma Piero
on October 17, 1957; .
7. That on August 8, 1958, the Director of Lands issued an
order directing the investigation of the protest of Eusebio
Camansi, against the patented application of Antonio
Piero Jr., a copy of said order being found on page 14 of
the expediente; and that on March 24, 1959 the Director of
Lands thru the Chief Legal Division directed the Provincial
Land Officer at Dipolog, to investigate the protest of
Nicanor Alasaas against the patented application of Emma
Piero Bernad, a copy of said order is also being on page
15 of the expediente;
8. That as regards Lot 5790 Pls - 100 the protest of
Eusebio Camansi has been given due course against the
claim of Antonio Piero Jr., which protest has been
investigated and terminated, Antonio Piero Jr., being
represented by his counsel Atty. Jesus Sarmiento;
9. That Nicanor Alasaas filed his protest dated February
27, 1958 and subscribed on March 11, 1958, before
Notary Public, G.R. Dalmacio, Jr., a copy is hereto
attached as Exhibit A; and that the protest of Nicanor
Alasaas has been investigated by Atty. Mariano D.
Palermo, investigator of the Bureau of Lands, Dipolog,
Zamboanga del Norte on August 30, 1959;
10. That with respect to Lot 5792 the same has already
been investigated and regarding Lot 5790 the investigation
has already been terminated but no decision has as yet
been issued;
11. That with respect to the claim of Tomas
Sumalpong against the application of Fortunato Piero an
investigation was conducted on August 21, 1959 but
neither Fortunato Piero nor counsel appeared; that when
the said case was rescheduled for October 30, 1959, Atty.
Jaime T. Hamoy counsel for Fortunato Piero filed a
motion for postponement on the ground that said counsel

had a Criminal Case to attend to in the Justice of the
Peace Court of Manukan, Zamboanga del Norte, after
which the hearing was rescheduled for December 28,
1959; that in said hearing counsel for Fortunato Piero for
the first time attacked the authority of the investigation on
the alleged ground that under the Revised Administrative
Code only the Director of Lands and Chief of Section of
said Office can order investigation of land conflicts; that up
to the present no resolution of that issue has as yet been
made; and that no written motion bearing on the same
ground interposed before the investigator was ever raised
before the Director of Lands;
12. That pursuant to a letter of Atty. Candido Pa.
Sumalpong as counsel for Tomas Sumalpong under date
of July 28, 1959, protesting against the above-mentioned
homestead application of Fortunato Piero which letter
was addressed to the Director of Lands thru the Provincial
Land Officer at Dipolog, Zamboanga del Norte, the said
Provincial Land Officer in the first indorsement dated July
22, 1959 addressed to Deputy Public Lands Inspector,
Mariano D. Palermo, directed the investigation of the case
until the said case is terminated for disposition under the
provision of Land Administrative Order No. 13-3 that the
said first indorsement was the sole authority for the
investigation of the claim of said Tomas Sumalpong
against the homestead application of Fortunato Piero that
as above stated the investigation of the claim of Tomas
Sumalpong was not terminated because counsel for
Fortunato Piero attacked the authority for the said
investigation;
13. That in connection with the separate petition of the
respondents, Nicanor Alasaas, Eusebio Camansi and
Tomas Sumalpong against the application of the
petitioners the same respondents were required by the
Chief of the Legal Division of the Bureau of Lands in a
letter dated September 4, 1959 to file a sworn protest and
pay the protest fee within a period of thirty days from the
receipt of the said letter, otherwise the respondents claim
will be dismissed and disregarded without further notice;
that a copy of said letter is hereto attached as an integral
part of this stipulation of facts as Exhibit "B"; that there is
no showing that respondents complied with the said letter
nor is there any showing that the claim of the respondents
are already dismissed (that is as of this date); that on
December 18, 1959 the petitioners, thru counsel, filed a
motion to dismiss the alleged protest but up to the present
no resolution on has ever been made; that as shown by
this letter of September 4, 1959 which was addressed to
Antonio Mabulay, Annex "B" respondents Tomas
Sumalpong, Nicanor Alasaas and Eusebio Camansi were
not given copy of this letter, and that the motion of counsel
for the "Dismiss the Protest" (sic) does not show that
respondents Tomas Sumalpong, Eusebio Camansi and
Nicanor Alasaas were ever furnished a copy of said
motion;
Law on NatRes (50-72 31
14. That the Director of Lands was actually served with
summons on January 20, 1960 as shown by the return of
the City Sheriff of Manila, which return appears on page
25 of the record of this case;
15. That for all matters not covered by this stipulation of
facts parties agree to ask for a date for the reception of
evidence.
We hold the appeal to be meritorious. In the light of the
facts disclosed in the foregoing stipulation, We reiterate
Cebedo vs. Director of Lands, G.R. No. L-12777, May 22,
1961, 2 SCRA 25, wherein We held that it is not only the
right but the duty of the Director of Lands to conduct the
investigation of any alleged fraud in securing a free patent
and the corresponding title to a public land and to file the
corresponding court action for the reversion of the same to
the State, if the facts disclosed in the course of such
investigation should so warrant. Consequently, prohibition
cannot be issued to enjoin such an investigation despite
the existence of a Torrens title.
Indeed, it is to be clarified that Section 91 of the Public
Land Act leaves no other alternative to the Director of
Lands. The provision reads thus:
SEC. 91. The statements made in the application shall be
considered as essential conditions and parts of any
concession, title, or permit issued on the basis of such
application, and any false statement therein or omission of
facts altering, changing, or modifying the consideration of
the facts set forth in such statements, and any subsequent
modification, alteration, or change of the material facts set
forth in the application shall ipso facto produce the
cancellation of the concession, title, or permit granted. It
shall be the duty of the Director of Lands, from time to time
and whenever he may deem it advisable, to make the
necessary investigations for the purpose of ascertaining
whether the material facts set out in the application are
true, or whether they continue to exist and are maintained
and preserved in good faith, and for the purpose of such
investigation, the Director of Lands is hereby empowered
to issue subpoenas and subpoenas duces tecum and, if
necessary, to obtain compulsory process from the courts.
In every investigation made in accordance with this
section, the existence of bad faith, fraud, concealment, or
fraudulent and illegal modification of essential facts shall
be presumed if the grantee or possessor of the land shall
refuse or fail to obey a subpoenas or subpoenas duces
tecum lawfully issued by the Director of Lands or his
authorized delegates or agents, or shall refuse or fail to
give direct and specific answers to pertinent questions,
and on the basis of such presumption, an order of
cancellation may issue without further proceedings.
Underlying this section and providing its justification is the
Regalian doctrine embodied in Section 1 of Article XIII of
the Constitution of 1935, in force during the material dates
of the events herein involved, declaring that "all

agricultural, timber, and mineral lands of the public domain
. . and other natural resources of the Philippines belong to
the State...." And under Krivenko vs. Register of Deeds, 79
Phil. 461, "the scope of this constitutional provision,
according to its heading and its language, embraces all
lands of any kind of the public domain, its purpose being to
establish a permanent and fundamental policy for the
conservation and utilization of all natural resources of the
Nation." Accordingly, the right to acquire disposable lands
from the State through any of the means provided for in
the Public Land Act, Commonwealth Act 141, must
necessarily be subject to the reservation expressly made
in above quoted Section 91 to the effect that "the
statements made in the application shall be considered as
essential conditions and parts of any ... title ... issued on
the basis of such application" and that "any false
statement therein or omission of facts altering, changing or
modifying the consideration of the facts set forth in such
statements, and any subsequent modification, alteration or
change of the material facts set forth in the application
shall ipso facto 1 produce the cancellation of the
concession, title or permit granted."
It is true that under Section 122 of the Land Registration
Act, a Torrens title issued on the basis of a free patent or a
homestead patent is as indefeasible as one judicially
secured. And in repeated previous decisions of this Court
that indefeasibility has been emphasized by Our holding
that not even the Government can file an action for
annulment, but at the same time, it has been made clear
that an action for reversion may be instituted by the
Solicitor General, in the name of the Republic of the
Philippines. 2 It is to the public interest that one who
succeeds in fraudulently acquiring title to a public land
should not be allowed to benefit therefrom, and the State
should, therefore, have an ever existing authority, thru its
duly authorized officers, to inquire into the circumstances
surrounding the issuance of any such title, to the end that
the Republic, thru the Solicitor General or any other officer
who may be authorized by law, may file the corresponding
action for the reversion of the land involved to the public
domain, subject thereafter to disposal to other qualified
persons in accordance with law. In other words, the
indefeasibility of a title over land previously public is not a
bar to an investigation by the Director of Lands as to how
such title has been acquired, if the purpose of such
investigation is to determine whether or not fraud had
been committed in securing such title in order that the
appropriate action for reversion may be filed by the
Government.
Nothing said above, however, should be understood as
holding that the Court has found that the titles of appellees
have been in fact fraudulently secured. That matter may
be resolved only after the Director of Lands shall have
finished his investigation.
Law on NatRes (50-72 32
IN VIEW OF THE FOREGOING, the decision of the trial
court is reversed and the writ of prohibition sought by
appellees is denied. Costs against appellees.
HEIRS OF AMBROCIO KIONISALA, namely, ANA,
ISABEL, GRACE, JOVEN and CARMELO, all surnamed
KIONISALA, petitioners, vs. HEIRS OF HONORIO
DACUT, namely: VISAMINDA D. OREVILLO, VIOLETA
DACUT, JOSEPHINE DACUT and ELIZABETH DACUT,
respondents; G.R. No. 147379; February 27, 2002
ONCE MORE we are faced with the erroneous application
of what are perceived to be elementary rules of pleading.
The misapprehension of the basic concepts underlying
these rules can be befuddling, but what is worse, the lost
man-hours spent in untangling the ensuing allegations of
pleading errors causing unnecessary delay in the
adjudication of cases. Instead of immediately resolving the
original dispute and adjudicating the merits of conflicting
claims, which in the instant petition involves the ownership
of two (2) parcels of land with the sizable area of 187,718
square meters, the judicial process is unfortunately wasted
in the maze of unfounded claims of deficiencies in the
parties pleadings.
On 19 December 1995 private respondents filed a
complaint for declaration of nullity of titles, reconveyance
and damages against petitioners, docketed as Civil Case
No. 95-312 Of the Regional Trial Court of Manolo Fortich,
Bukidnon. This complaint involved two (2) parcels of land
known as Lot No. 1017 and Lot No. 1015 with areas of
117,744 square meters and 69,974 square meters
respectively, located in Pongol, Libona, Bukidnon. On 7
September 1990 Lot No. 1017 was granted a free patent
to petitioners Heirs of Ambrocio Kionisala under Free
Patent No. 603393, and on 13 November 1991 Lot 1015
was bestowed upon Isabel Kionisala, one of the impleaded
heirs of Ambrocio Kionisala under Free Patent No.
101311-91-904. Thereafter, on 19 November 1990 Lot
1017 was registered under the Torrens system and was
issued Original Certificate of Title No. P-19819 in
petitioners name, while on 5 December 1991 Lot No.
1015 was registered in the name of Isabel Kionisala under
Original Certificate of Title No. P-20229.
In support of their causes of action for declaration of nullity
of titles and reconveyance, private respondents claimed
absolute ownership of Lot 1015 and 1017 even prior to the
issuance of the corresponding free patents and certificates
of title. They further alleged in their complaint -
x x x x 2. That plaintiffs are absolute and exclusive owners
and in actual possession and cultivation of two parcels of
agricultural lands herein particularly described as follows
[technical description of Lot 1015 and Lot 1017] x x x x 3.
That plaintiffs became absolute and exclusive owners of
the abovesaid parcels of land by virtue of inheritance from
their late father, Honorio Dacut, who in turn acquired the
same from a certain Blasito Yacapin and from then on was
in possession thereof exclusively, adversely and in the

concept of owner for more than thirty (30) years. In fact
Honorio Dacut has had this parcels of land rented by the
Philippine Packing Corporation for more than twenty years
(20) up to the present time; 4. That recently, plaintiff
discovered that defendants, without the knowledge and
consent of the former, fraudulently applied for patent the
said parcels of land and as a result thereof certificates of
titles had been issued to them as evidenced by certificate
of title No. P-19819 in the name of the Hrs. of Ambrocio
Kionisala and No. P-20229 in the name of Isabel
Kionisala, xerox copies of the titles hereto attached and
marked as annexes "A" and "B" and made part hereof; 5.
That the patents issued to defendants are null and void,
the same having been issued fraudulently, defendants not
having been and/or in actual possession of the litigated
properties and the statement they may have made in their
application are false and without basis in fact, and, the
Department of Environment and Natural Resources not
having any jurisdiction on the properties the same not
being anymore public but already private property; 6. That
in the remote possibility that said certificates of title cannot
be declared as null and void, plaintiffs, being the absolute
and exclusive owners of the parcels of land titled by the
defendants, are entitled to reconveyance x x x x
WHEREFORE, premises considered, it is respectfully
prayed of the Honorable Court that judgment issue: 1.
declaring certificates of title No. P-19819 and P-20229,
null and void, and in the event that this remedy is not
possible, ordering defendants to reconvey to plaintiffs the
land subject matter of this litigation x x x x
The complaint was accompanied by a verification and
certificate of non-forum shopping which affirmed under
oath thus -
I, VISAMINDA DACUT OREVILLO, after being duly sworn,
states: That I am one of the plaintiffs in the above-entitled
case; that we have caused the preparation and filing of the
same and that all allegations contained therein are true
and correct to the best of my own knowledge; That we
have not filed any case in any court or bodies affecting the
same subject matter.
On 7 February 1996 petitioners filed their answer to the
complaint and asserted the following affirmative defenses -
8. That the complaint states no cause of action; 9. That the
cause of action, if any, is barred by statute of limitations,
prescription of action or by equitable principle of laches;
10. That x x x it is only the Director of Lands (now DENR)
through the Office of the Solicitor General that has the
authority to file annulment of Free Patent or Homestead
Patent issued by the Director of Lands or DENR; That the
complaint is not supported by certification of non-forum
shopping as required by Administrative Circular No. 04-94
of the Supreme Court x x x x
Petitioners set for hearing their affirmative defenses. After
the hearing, or on 3 December 1996 the trial court
Law on NatRes (50-72 33
dismissed the complaint on the ground that the cause of
action of private respondents was truly for reversion so
that only the Director of Lands could have filed the
complaint, and that the certificate of non-forum shopping
accompanying the complaint did not comply with the
standard form for such undertaking.1 On 23 December
1996 private respondents moved for reconsideration of the
order of dismissal but on 3 June 1997 the motion was
denied by the trial court.
On 7 June 1997 private respondents appealed the order of
dismissal to the Court of Appeals. On 15 February 2000
the appellate court promulgated its assailed Decision
reversing the order of dismissal.2 The Court of Appeals
ruled that while the allegations in the complaint were
insufficient for purposes of an ordinary civil action for
declaration of nullity of a certificate of title since the actual
date when private respondents became owners of Lots
1015 and 1017 prior to the issuance of the corresponding
free patents and certificates of title was not specifically
indicated in the complaint, nonetheless the allegations
therein were comprehensive enough to constitute a cause
of action for reconveyance.3 The appellate court
concluded: "On this score, it was reversible error for the
lower court to have dismissed the complaint x x x because
in an action for reconveyance, what is sought is the
transfer of the property which has been wrongfully or
erroneously registered in another persons name, to its
rightful and legal owner or to one with a better right x x x."4
The appellate court likewise found substantial compliance
in the certificate of non-forum shopping5 by citing Cabardo
v. Court of Appeals6 and Kavinta v. Court of Appeals.7
On 7 March 2000 petitioners moved for reconsideration of
the CA Decision. On 22 January 2001 the appellate court
denied the motion for lack of merit, hence this petition for
review.
At the core of the instant petition is the issue of sufficiency
of the complaint filed by private respondents. Verily, does
the complaint allege an action for reversion which private
respondents would have no right to file or institute? Or
does the complaint state a cause of action for declaration
of nullity of the free patents and certificates of title for Lot
1015 and Lot 1017, or alternatively a cause of action for
reconveyance of these two lots? Has the cause of action,
if any, prescribed? And does the certificate of non-forum
shopping substantially comply with the standard
requirement?
First. The test of the sufficiency of the facts to constitute a
cause of action is whether admitting the facts alleged the
court could render a valid judgment upon the same in
accordance with the prayer of the complaint.8 In
answering this query, only the facts asserted in the
complaint must be taken into account without modification
although with reasonable inferences therefrom.9
Applying the test to the case at bar, we rule that the
complaint does not allege an action for reversion which

private respondents would obviously have no right to
initiate, but that it sufficiently states either a cause of
action for declaration of nullity of free patents and
certificates of title over Lot 1015 and Lot 1017 or
alternatively a cause of action for reconveyance of these
two pieces of realty, wherein in either case private
respondents are the real parties in interest.
An ordinary civil action for declaration of nullity of free
patents and certificates of title is not the same as an action
for reversion.10 The difference between them lies in the
allegations as to the character of ownership of the realty
whose title is sought to be nullified. In an action for
reversion, the pertinent allegations in the complaint would
admit State ownership of the disputed land. Hence in
Gabila v. Barriga111 where the plaintiff in his complaint
admits that he has no right to demand the cancellation or
amendment of the defendants title because even if the
title were canceled or amended the ownership of the land
embraced therein or of the portion affected by the
amendment would revert to the public domain, we ruled
that the action was for reversion and that the only person
or entity entitled to relief would be the Director of Lands.
On the other hand, a cause of action for declaration of
nullity of free patent and certificate of title would require
allegations of the plaintiffs ownership of the contested lot
prior to the issuance of such free patent and certificate of
title as well as the defendants fraud or mistake; as the
case may be, in successfully obtaining these documents of
title over the parcel of land claimed by plaintiff. In such a
case, the nullity arises strictly not from the fraud or deceit
but from the fact that the land is beyond the jurisdiction of
the Bureau of Lands to bestow and whatever patent or
certificate of title obtained therefor is consequently void ab
initio.12 The real party in interest is not the State but the
plaintiff who alleges a pre-existing right of ownership over
the parcel of land in question even before the grant of title
to the defendant. In Heirs of Marciano Nagano v. Court of
Appeals13 we ruled -
x x x x from the allegations in the complaint x x x private
respondents claim ownership of the 2,250 square meter
portion for having possessed it in the concept of an owner,
openly, peacefully, publicly, continuously and adversely
since 1920. This claim is an assertion that the lot is private
land x x x x Consequently, merely on the basis of the
allegations in the complaint, the lot in question is
apparently beyond the jurisdiction of the Director of the
Bureau of Lands and could not be the subject of a Free
Patent. Hence, the dismissal of private respondents
complaint was premature and trial on the merits should
have been conducted to thresh out evidentiary matters. It
would have been entirely different if the action were clearly
for reversion, in which case, it would have to be instituted
by the Solicitor General pursuant to Section 101 of C.A.
No. 141 x x x x
Law on NatRes (50-72 34
It is obvious that private respondents allege in their
complaint all the facts necessary to seek the nullification of
the free patents as well as the certificates of title covering
Lot 1015 and Lot 1017. Clearly, they are the real parties in
interest in light of their allegations that they have always
been the owners and possessors of the two (2) parcels of
land even prior to the issuance of the documents of title in
petitioners favor, hence the latter could only have
committed fraud in securing them -
x x x x That plaintiffs are absolute and exclusive owners
and in actual possession and cultivation of two parcels of
agricultural lands herein particularly described as follows
[technical description of Lot 1017 and Lot 1015] x x x x 3.
That plaintiffs became absolute and exclusive owners of
the abovesaid parcels of land by virtue of inheritance from
their late father, Honorio Dacut, who in turn acquired the
same from a certain Blasito Yacapin and from then on was
in possession thereof exclusively, adversely and in the
concept of owner for more than thirty (30) years x x x x 4.
That recently, plaintiff discovered that defendants, without
the knowledge and consent of the former, fraudulently
applied for patent the said parcels of land and as a result
thereof certificates of titles had been issued to them as
evidenced by certificate of title No. P-19819 in the name of
the Hrs. of Ambrocio Kionisala, and No. P-20229 in the
name of Isabel Kionisala x x x x 5. That the patents issued
to defendants are null and void, the same having been
issued fraudulently, defendants not having been and/or in
actual possession of the litigated properties and the
statement they may have made in their application are
false and without basis in fact, and, the Department of
Environment and Natural Resources not having any
jurisdiction on the properties the same not being anymore
public but already private property x x x x
It is not essential for private respondents to specifically
state in the complaint the actual date when they became
owners and possessors of Lot 1015 and Lot 1017. The
allegations to the effect that they were so preceding the
issuance of the free patents and the certificates of title,
i.e., "the Department of Environment and Natural
Resources not having any jurisdiction on the properties the
same not being anymore public but already private
property," are unquestionably adequate as a matter of
pleading to oust the State of jurisdiction to grant the lots in
question to petitioners. If at all, the oversight in not alleging
the actual date when private respondents ownership
thereof accrued reflects a mere deficiency in details which
does not amount to a failure to state a cause of action.
The remedy for such deficiency would not be a motion to
dismiss but a motion for bill of particulars so as to enable
the filing of appropriate responsive pleadings.14
With respect to the purported cause of action for
reconveyance, it is settled that in this kind of action the
free patent and the certificate of title are respected as
incontrovertible.15 What is sought instead is the transfer of
the property, in this case the title thereof, which has been

wrongfully or erroneously registered in the defendants
name.16 All that must be alleged in the complaint are two
(2) facts which admitting them to be true would entitle the
plaintiff to recover title to the disputed land, namely, (1)
that the plaintiff was the owner of the land and, (2) that the
defendant had illegally dispossessed him of the same.17
We rule that private respondents have sufficiently pleaded
(in addition to the cause of action for declaration of free
patents and certificates of title) an action for
reconveyance, more specifically, one which is based on
implied trust. An implied trust arises where the defendant
(or in this case petitioners) allegedly acquires the disputed
property through mistake or fraud so that he (or they)
would be bound to hold and reconvey the property for the
benefit of the person who is truly entitled to it.18 In the
complaint, private respondents clearly assert that they
have long been the absolute and exclusive owners and in
actual possession and cultivation of Lot 1015 and Lot 1017
and that they were fraudulently deprived of ownership
thereof when petitioners obtained free patents and
certificates of title in their names. These allegations
certainly measure up to the requisite statement of facts to
constitute an action for reconveyance.
Petitioners would nonetheless insist that private
respondents should have also alleged, in addition to
"possession in the concept of owner, openly, peacefully,
publicly, continuously and adversely for thirty (30) years at
the least," the statement that Lot 1015 and Lot 1017 have
not passed to an innocent purchaser for value. Petitioners
also proffer the trifling argument that (apparently in order
to render sufficient for pleading purposes the allegations of
ownership) private respondents should have attached to
their complaint the documents which would prove the
sources of their title to the disputed parcels of land.
It is easy to see why the allegations demanded by
petitioners are unnecessary, even improper, in a
complaint. Whether petitioners are innocent purchasers for
value of the contested lots is a matter of defense that
private respondents need not anticipate in their complaint;
indubitably it lies upon petitioners discretion to allege this
fact in their answer perhaps to bar recovery of the two
pieces of realty.19 Moreover, private respondents do not
have to asseverate in the complaint the documents
proving their alleged sources of title. These matters are
evidentiary details which undoubtedly find no place in a
complaint. Being matters of evidence proving the ultimate
fact of ownership averred by private respondents, the
disclosure of such evidence must await either the
proceedings for discovery or pre-trial or even the trial
proper. It should also be stressed that in pleading the
ownership of a parcel of land in an action for recovery of
ownership/possession thereof, all that plaintiff is required
to state in the complaint are -
x x x a disseisin and its continuance by the defendant x x x
x Plaintiff was not required and did not allege the source
Law on NatRes (50-72 35
and kind of title under which it claimed, and under the
complaint, it was at liberty to introduce proof of any legal
title which it possessed. Conversely, the defendants were
at liberty to introduce all legally admissible evidence
tending to show that title was not in the plaintiff. Hence,
they had the right to show that the legal title was in
themselves. For, if legal title to the property were shown to
be in the defendants, the evidence of the plaintiff that title
belonged to it would certainly be met x x x x It must be
furthermore remembered that x x x plaintiff is allowed to
make up his complaint in an action to recover possession
of land without disclosing the title which he intends to rely
upon.
Second. We rule that neither the action for declaration of
nullity of free patents and certificates of title of Lot 1015
and Lot 1017 nor the action for reconveyance based on an
implied trust of the same lots has prescribed. We have
ruled that "a free patent issued over private land is null and
void, and produces no legal effects whatsoever. Quos
nullum est, nullum producit effectum."21 Moreover, private
respondents claim of open, public, peaceful, continuous
and adverse possession of the two (2) parcels of land and
its illegal inclusion in the free patents of petitioners and in
their original certificates of title, also amounts to an action
for quieting of title which is imprescriptible.22
The action for reconveyance based on implied trust, on the
other hand, prescribes only after ten (10) years from 1990
and 1991 when the free patents and the certificates of title
over Lot 1017 and Lot 1015, respectively, were registered.
Obviously the action had not prescribed when private
respondents filed their complaint against petitioners on 19
December 1995. At any rate, the action for reconveyance
in the case at bar is also significantly deemed to be an
action to quiet title for purposes of determining the
prescriptive period on account of private respondents
allegations of actual possession of the disputed lots.23 In
such a case, the cause of action is truly imprescriptible.24
Third. We agree with the Court of Appeals that private
respondents did not altogether dispense with the
certificate of non-forum shopping. What is involved here is
a certification several sentences short of the standard form
as it only states: "That we have not filed any case in any
court or bodies affecting the same subject matter." While
this manner of formulating the certification is indeed
deplorable, its presence in the complaint nonetheless
shows the intention of private respondents to comply with
the standard form. Verily, we can only presume innocent
reasons - as there is no reason for pursuing a contrary
belief - for the omissions of the other standard statements
therein. In Cabardo v. Court of Appeals25 where the
certificate of non-forum shopping was found deficient in
details we ruled -
x x x petitioners failure to state in the certificate of non-
forum shopping that he undertakes to inform the Court of
any petition which might be filed, as required under

Revised Circular No. 28-91, may be overlooked since it
does not appear that any petition related to this case has
ever been filed in any other court. On the other hand, to
dismiss the petition on this ground would be to uphold
technicality over substantial justice.
For the same reason that no case related to the complaint
filed by private respondents has been filed by them in any
other court, we rule pro hac vice that the contested
certificate of non-forum shopping is substantial compliance
with the rules. Indeed to hold otherwise would only further
delay the disposition of the original dispute between
petitioners and private respondents concerning the
ownership of Lot 1015 and Lot 1017. We note that their
conflicting claims could have been resolved by now if not
for the erroneous application of the elementary rules of
pleading which resulted in the premature dismissal of the
complaint filed by private respondents.1wphi1 This Court
need not repeat the fastidious and unfounded adherence
to technicality which already stalled for an unfortunate
seven (7) years more or less the proceedings in the trial
court.
In sum, the grounds relied upon in petitioners desire to
dismiss the complaint of private respondents in Civil Case
No. 95-312 cannot be impressed with merit. By this
decision, however, we are not foreclosing the presentation
of evidence during trial on the merits that Lot 1015 and Lot
1017 are not private property and that private respondents
are not truly the owners thereof. This and other issues on
the merits must follow where the preponderant evidence
lies.
WHEREFORE, the instant Petition for Review is DENIED
for lack of merit. The Decision of the Court of Appeals
dated 15 February 2000 reversing the Order dismissing
the Complaint in Civil Case No. 95-312 entitled Heirs of
Honorio Dacut, namely, Visaminda Orevillo, Violeta Dacut,
Josephine Dacut and Elizabeth Dacut v. Heirs of Ambrocio
Kionisala, namely, Ana, Isabel, Grace, Ophelia, Joven and
Camilo, all surnamed Kionisala, and Isabel Kionisala is
AFFIRMED with the understanding that private
respondents Heirs of Honorio Dacut as plaintiffs therein
may proceed on the basis of their causes of action of
declaration of nullity of free patents and certificates of titles
and/or reconveyance based on an implied trust, with claim
for damages. The proceedings in the trial court shall
commence forthwith within thirty (30) days from notice of
the finality of this Decision without unnecessary delay. SO
ORDERED.
NEMENCIO C. EVANGELISTA, PASCUAL G. QUINTO,
LUIS B. BUENA, EUSEBIA V. TABLADA, CANUTO G.
TISBE, DAVID R. CARULLO, SOFONIAS E.
COLEGADO, FELIX B. BUENA, TORIBIO C.
EVANGELISTA, LEBRADA A. NICOLAS, ALECIA J.
RAMOS, MILA G. DE LOS REYES, SALVADOR I. DE LA
TORRE, MOISES CRUZ, RUFINO INFANTE, ALICIA
ASTROLOGO, TRINIDAD LUMIQUED, LUZMINIDA
QUINIQUINI, & TEODORA C. TEMERAS, Petitioners,
Law on NatRes (50-72 36
vs. CARMELINO M. SANTIAGO, Respondents; G.R.
No. 157447. April 29, 2005
In this Petition for Review under Rule 45 of the Rules of
Court, petitioners pray for the reversal of the Decision of
the Court of Appeals in CA-G.R. CV No. 64957,1 affirming
the Order of the Regional Trial Court (RTC) of San Mateo,
Rizal, Branch 77, in Civil Case No. 1220,2 dismissing
petitioners Complaint for declaration of nullity of Original
Certificate of Title (OCT) No. 670 and all other titles
emanating therefrom.
In their Complaint, petitioners alleged that they occupied
and possessed parcels of land, located in Sitio
Panayawan, Barangay San Rafael, Montalban (now
Rodriquez), Province of Rizal (Subject Property), by virtue
of several Deeds of Assignment, dated 15 April 1994 and
02 June 1994, executed by a certain Ismael Favila y
Rodriguez.3
According to the Deeds of Assignment, the Subject
Property was part of a vast tract of land called "Hacienda
Quibiga," which extended to Paraaque, Las Pias,
Muntinlupa, Cavite, Batangas, Pasay, Taguig, Makati,
Pasig, Mandaluyong, Quezon City, Caloocan, Bulacan,
and Rizal; awarded to Don Hermogenes Rodriguez by the
Queen of Spain and evidenced by a Spanish title. Ismael
Favila claimed to be one of the heirs and successors-in-
interest of Don Hermogenes Rodriguez. Acting as
Attorney-in-Fact pursuant to a Special Power of Attorney
executed by his "mga kapatid" on 25 February 1965,
Ismael Favila signed the aforementioned Deeds of
Assignment, assigning portions of the Subject Property to
the petitioners, each portion measuring around 500 to
1,000 square meters, in exchange for the labor and work
done on the Subject Property by the petitioners and their
predecessors.4
Petitioners came by information that respondent was
planning to evict them from the Subject Property. Two of
the petitioners had actually received notices to vacate.
Their investigations revealed that the Subject Property
was included in Transfer Certificates of Titles (TCTs) No.
53028, No. 281660, No. N-39258 and No. 205270, all
originating from OCT No. 670, and now in the name of
respondent.5
OCT No. 670 was issued in the name of respondents
mother, Isabel Manahan y Francisco, and three other
individuals, pursuant to Decree No. 10248, dated 13
February 1913, in Case No. 8502 of the Court of Land
Registration of the Philippine Islands. The whole property
covered by OCT No. 670 was subsequently adjudicated in
favor of Isabel Manahan Santiago (formerly Isabel
Manahan y Francisco). Consequently, OCT No. 670 was
cancelled and TCT No. T-53028 was issued exclusively in
the name of Isabel Manahan Santiago. On 28 December
1968, Isabel Manahan Santiago executed a Deed of
Donation transferring the property to her son, respondent

herein, who subsequently secured TCTs No. 281660, No.
N-39258 and No. 205270 in his own name.6
Petitioners filed with the trial court, on 29 April 1996, an
action for declaration of nullity of respondents certificates
of title on the basis that OCT No. 670 was fake and
spurious. Among the defects of OCT No. 670 pointed out
by petitioners were that: (1) OCT No. 670 was not signed
by a duly authorized officer; (2) Material data therein were
merely handwritten and in different penmanships; (3) OCT
No. 670 was not printed on the Official Form used in 1913,
the year it was issued; (4) It failed to indicate the Survey
Plan which was the basis of the Technical Description of
the property covered by the title; (5) Decree No. 10248
referred to in OCT No. 670 was issued only on 11 April
1913, while OCT No. 670 was issued earlier, on 13
February 1913; and (6) Decree No. 10248 was issued
over a property other than the one described in OCT No.
670, although also located in the Province of Rizal.
Respondent filed his Answer with Prayer for Preliminary
Hearing on the Affirmative Defenses on 03 July 1996.
According to respondent, "[t]he allegations in the
Complaint would readily and patently show that the same
are flimsy, fabricated, malicious, without basis in law and
in fact"
As an affirmative defense, respondent claimed that the
petitioners had no legal capacity to file the Complaint, and
thus, the Complaint stated no cause of action. Since OCT
No. 670 was genuine and authentic on its face, then OCT
No. 670 and all of respondents land titles derived
therefrom, are incontrovertible, indefeasible and
conclusive against the petitioners and the whole world.9
Citing the consolidated cases of Director of Forestry, et al.
v. Hon. Emmanuel M. Muoz, et al. and Pinagcamaligan
Indo-Agro Development Corporation v. Hon. Macario
Peralta, Jr., et al.,10 respondent argued that the Spanish
title, on which petitioners based their claim, was neither
indefeasible nor imprescriptible. Moreover, Presidential
Decree (P.D.) No. 892, which took effect on 16 February
1976, required all holders of Spanish titles or grants to
apply for registration of their lands under Republic Act No.
496, otherwise known as the Land Registration Act,11
within six months from effectivity of the decree. After the
given period, Spanish titles could no longer be used as
evidence of land ownership in any registration proceedings
under the Torrens System. 12
Respondent also raised the affirmative defense of
prescription. He pointed out that any action against his
certificates of title already prescribed, especially with
regard to OCT No. 670, which was issued in 1913 or more
than 83 years prior to the filing of the Complaint by the
petitioners. At the very least, respondent contended, "it
must be presumed that the questioned land titles were
issued by the public officials concerned in the performance
Law on NatRes (50-72 37
of their regular duties and functions pursuant to the
law."13
Even assuming arguendo that the petitioners entered and
occupied the Subject Property, they did so as mere
intruders, squatters and illegal occupants, bereft of any
right or interest, since the Subject Property was already
covered by Torrens certificates of title in the name of
respondent and his predecessors-in-interest.14
Lastly, respondent denied knowing the petitioners, much
less, threatening to evict them. In fact, petitioners were not
included as defendants in Civil Case No. 783 entitled,
"Carmelino M. Santiago v. Remigio San Pascual, et al.,"
which respondent instituted before the same trial court
against squatters occupying the Subject Property. In its
decision, dated 01 July 1992, the trial court held that "there
is no doubt that the plaintiff (respondent herein) is the
owner of the land involved in this case on which the
defendants have built their houses and shanties"
Although the decision in Civil Case No. 783 was appealed
to the Court of Appeals, it had become final and executory
for failure of the defendants-appellants therein to file their
appellants brief.15
In the instant case, the trial court held a preliminary
hearing on the affirmative defenses as prayed for by the
respondent. During said hearing, petitioners presented
their lone witness, Engineer Placido Naval, a supposed
expert on land registration laws. In response to questions
from Honorable Judge Francisco C. Rodriguez of the trial
court, Engineer Naval answered that a parcel of land titled
illegally would revert to the State if the Torrens title was
cancelled, and that it was the State, through the Office of
the Solicitor General, that should file for the annulment or
cancellation of the title. Respondent, on the other hand,
did not present any evidence but relied on all the
pleadings and documents he had so far submitted to the
trial court.16
After the preliminary hearing, the trial court issued the
questioned Order, dated 05 February 1999, dismissing
petitioners Complaint. Pertinent portions of the Order of
the trial court read:
After considering the testimonial and documentary
evidence presented, this Court is inclined not to grant
plaintiffs (sic) prayer. Finding credence and giving weight
to plaintiffs (sic) lone but "expert witness", it is crystal clear
that, to quote:
1. "a parcel of land titled illegally will revert to the State
2. it is the State who must file the corresponding case of
annulment of title through the Office of the Solicitor
General, and
3. a land illegally titled in the name of private individual,
the State through the Office of the Solicitor General should

file the corresponding case for cancellation of title." (TSN
August 26, 1997).
The above quoted testimony is straight from horse (sic)
mouth so to speak as this was the testimony of the
plaintiffs (sic) expert witness. And judging from the said
testimony alone aforecited, plaintiffs (sic) cause [of action]
is bound to fail. "Plaintiffs (sic) own testimony" wrote "finis"
to their case. From the record, this case was initiated and
filed by private individuals, Nemencio Evangelista, et. al.,
contradicting their witness (sic) testimony. To reiterate, this
Court finds credence to the testimony of the plaintiffs (sic)
witness, i.e., is (sic) the State through the Office of the
Solicitor General who must initiate and file a case of this
nature when title to a land is being claimed to be obtained
through fraud and allegedly spurious.
The opinion of this Court anent the testimony of the
witness is not without basis. Explicit is the pronouncement
of the Supreme Court in the recent case of Heirs of
Marciano Nagano v. Court of Appeals, to wit:
An action for reversion has to be instituted by the Solicitor
General pursuant to Section 101, Commonwealth Act No.
141. (282 SCRA 43).
As to the documentary evidence, having gone through with
the "Deed of Assignment/s" purportedly executed by and
between a certain Ismael Favila y Rodriguez and the
plaintiffs, which is the principal if not the only basis of
plaintiffs claim ownership and possession of the subject
parcel of land, the same does not hold water in a manner
of speaking, for being self-serving. "Assignor Ismael Favila
y Rodriguez" claimed in said Deed that he is the Attorney-
in-Fact by virtue of an alleged Special Power of Attorney
executed in his favor by his "mga kapatid" on February 23,
1965, but said Special Power of Attorney was not
presented before this Court, thus there arises a doubt as
to its existence and execution not to mention doubt on the
existence of his "mga kapatid" who as alleged executed
said Special Power Attorney (sic) in his favor.
Even if this Court granting arguendo would admit the
authenticity of said "Deeds of Assignment/s", that will not
alter the outcome of the pending incident/s before this
Court. Why? Because the said "Deed of Assignment/s"
which were based on Spanish title have lost their
evidentiary value pursuant to the Presidential Decree No.
892 i.e. "DISCONTINUANCE OF THE SPANISH
MORTGAGE SYSTEM OF REGISTRATION AND OF THE
USE OF SPANISH TITLES AS EVIDENCE IN LAND
REGISTRATION PROCEEDINGS."
being done sans ample evidence except bare allegations
There is no need to elaborate on the above-cited
provisions of PD 892 as they are self-explanatory. Suffice
it to say that there is no showing, that plaintiffs complied
with the said law i.e. to "apply for registration of their lands
Law on NatRes (50-72 38
under Act No. 496, otherwise known as the Land
Registration Act, within six (6) months from the effectivity
of this decree (February 16, 1976). Thereafter, Spanish
titles cannot be used as evidence of land ownership in any
registration proceedings under the Torrens System."
This being the case and likewise being clear that plaintiffs
were not the lawful owners of the land subject of this case,
for they did not comply with PD 892, the said plaintiffs do
not have the legal standing to bring before this Court the
instant complaint
Moreover, the principal issue in this case is for the
declaration of nullity of defendants title, which has nothing
to do with plaintiffs (sic) claim of ownership and
possession even if we set aside, albeit momentarily, the
truth that plaintiffs (sic) claim were based on barred
Spanish Title/s, and thus plaintiffs were never the owners
of the parcel of land subject of this case.
Further, defendants (sic) title especially so with the mother
title OCT 670 was entered and issued in 1913 or more
than Eighty Three (83) years ago, the same not having
been questioned by any party. Only now that it is being
questioned, but sad to say, plaintiffs who are on the
offensive and relying on their lone expert witness, instead
of bolstering their case, unwittingly sealed their fate 17
After the trial court denied petitioners Motion for
Reconsideration in its Order, dated 20 July 1999,18
petitioners appealed both Orders of the trial court to the
Court of Appeals.
The Court of Appeals, in its Decision, dated 29 July
2002,19 affirmed the Order of the trial court, dated 05
February 1999, dismissing petitioners Complaint. The
Court of Appeals denied petitioners Motion for
Reconsideration in its Resolution, dated 14 February
2003.20
Thus, petitioners filed this Petition for Review 21 under
Rule 45 of the Rules of Court, raising the following issues
and praying for the reversal of the aforementioned
Decision of the Court of Appeals affirming the Order of
dismissal of the trial court:
I. Whether the lower courts dismissal of the petitioners
complaint should be proscribed by the rules of evidence it
being based inter alia on Engr. Navals testimony, which
was indisputably not based on facts but conclusion of law.
II. Whether the lower courts dismissal of petitioners
complaint should be proscribed by the rules of evidence it
of respondent.
III. Whether the provision of P.D. 892, i.e., Spanish titles
cannot be used as evidence of land ownership in any

registration proceedings under the Torrens system, holds
of an exception.
IV. Whether an action for quieting of title, specifically
where petitioners are in possession of subject land, can be
subject of prescription.
In his Comment,22 the respondent, for the most part,
reiterated the findings of the trial court and the Court of
Appeals.
The Court believes that the trial court rightfully dismissed
petitioners Complaint, but for reasons different from those
relied upon by the trial court and the Court of Appeals.
According to the respondent, petitioners had no legal
capacity to file the Complaint, and thus, the Complaint filed
before the trial court stated no cause of action.
Before anything else, it should be clarified that "the plaintiff
has no legal capacity to sue"23 and "the pleading
asserting the claim states no cause of action"24 are two
different grounds for a motion to dismiss or are two
different affirmative defenses. Failure to distinguish
between "the lack of legal capacity to sue" from "the lack
of personality to sue" is a fairly common mistake. The
difference between the two is explained by this Court in
Columbia Pictures, Inc. v. Court of Appeals:25
Among the grounds for a motion to dismiss under the
Rules of Court are lack of legal capacity to sue and that
the complaint states no cause of action. Lack of legal
capacity to sue means that the plaintiff is not in the
exercise of his civil rights, or does not have the necessary
qualification to appear in the case, or does not have the
character or representation he claims. On the other hand,
a case is dismissible for lack of personality to sue upon
proof that the plaintiff is not the real party-in-interest,
hence grounded on failure to state a cause of action. The
term "lack of capacity to sue" should not be confused with
the term "lack of personality to sue." While the former
refers to a plaintiffs general disability to sue, such as on
account of minority, insanity, incompetence, lack of
juridical personality or any other general disqualifications
of a party, the latter refers to the fact that the plaintiff is not
the real party- in-interest. Correspondingly, the first can be
a ground for a motion to dismiss based on the ground of
lack of legal capacity to sue; whereas the second can be
used as a ground for a motion to dismiss based on the fact
that the complaint, on the face thereof, evidently states no
cause of action.
In the present case, this Court may assume that the
respondent is raising the affirmative defense that the
Complaint filed by the petitioners before the trial court
stated no cause of action because the petitioners lacked
the personality to sue, not being the real party-in-interest.
It is the respondents contention that only the State can file
an action for annulment of his certificates of title, since
Law on NatRes (50-72 39
such an action will result in the reversion of the ownership
of the Subject Property to the State.
The affirmative defense that the Complaint stated no
cause of action, similar to a motion to dismiss based on
the same ground, requires a hypothetical admission of the
facts alleged in the Complaint. In the case of Garcon v.
Redemptorist Fathers,26 this Court laid down the rules as
far as this ground for dismissal of an action or affirmative
defense is concerned:
It is already well-settled by now that, in a motion to dismiss
a complaint based on lack of cause of action, the question
submitted to the court for determination is the sufficiency
of the allegations of fact made in the complaint to
constitute a cause of action, and not on whether these
allegations of fact are true, for said motion must
hypothetically admit the truth of the facts alleged in the
complaint; that the test of the sufficiency of the facts
alleged in the complaint is whether or not, admitting the
facts alleged, the court could render a valid judgment upon
the same in accordance with the prayer of said complaint.
Stated otherwise, the insufficiency of the cause of action
must appear in the face of the complaint in order to sustain
a dismissal on this ground, for in the determination of
whether or not a complaint states a cause of action, only
the facts alleged therein and no other matter may be
considered, and the court may not inquire into the truth of
the allegations, and find them to be false before a hearing
is had on the merits of the case; and it is improper to inject
in the allegations of the complaint facts not alleged or
proved, and use these as basis for said motion.
In resolving whether or not the Complaint in the present
case stated a cause of action, the trial court should have
limited itself to examining the sufficiency of the allegations
in the Complaint. It was proscribed from inquiring into the
truth of the allegations in the Complaint or the authenticity
of any of the documents referred or attached to the
Complaint, since these are deemed hypothetically
admitted by the respondent. The trial court evidently erred
in making findings as to the authenticity of the Deeds of
Assignment executed by Ismael Favila in favor of
petitioners on 15 April 1994 and 02 June 1994; and
questioning the existence and execution of the Special
Power of Attorney in favor of said Ismael Favila by his
siblings on 25 February 1965. These matters may only be
resolved after a proper trial on the merits.
Petitioners alleged in their Complaint, and respondent
hypothetically admitted that: (1) Petitioners predecessors-
in-interest, in the concept of owners, had been in actual,
physical, open, continuous and adverse possession of the
Subject Property against the whole world since time
immemorial; (2) The Subject Property was part of the vast
tract of land called "Hacienda Quibiga" awarded to Don
Hermogenes Rodriguez by the Queen of Spain by virtue of
a Spanish title; (3) Ismael Favila, an heir and successor-in-
interest of Don Hermogenes Rodriguez, acting as

Attorney-in-Fact pursuant to a Special Power of Attorney
executed by his "mga kapatid" on 25 February 1965,
executed Deeds of Assignment covering the Subject
Property in favor of petitioners; (4) Petitioners still
occupied and possessed the Subject Property, on which
their houses were erected, when they discovered that the
Subject Property was already covered by Torrens
certificates of title in the name of respondent; and (5) That
petitioners filed the Complaint to prevent their eviction by
the respondent. To determine whether these allegations
are sufficient to constitute a cause of action, it is important
for this Court to establish first the nature of petitioners
action.
Indeed, petitioners Complaint filed before the trial court
was captioned as an action for declaration of nullity of
respondents certificates of title. However, the caption of
the pleading should not be the governing factor, but rather
the allegations therein should determine the nature of the
action, because even without the prayer for a specific
remedy, the courts may nevertheless grant the proper
relief as may be warranted by the facts alleged in the
Complaint and the evidence introduced.27
The trial court believed that petitioners action was
ultimately one for reversion of the Subject Property to the
public domain. Based on the testimony of Engineer Naval
and the case of Nagao v. Court of Appeals,28 it declared
that the State, represented by the Office of the Solicitor
General, is the party-in-interest in an action for
cancellation of a certificate of title illegally issued in the
name of a private individual, because the eventual effect
of such cancellation is the reversion of the property to the
State.
The Court disagrees in this pronouncement of the trial
court, and calls for a far closer review of its decision in
Nagao v. Court of Appeals,29 wherein the Court held that
It is then clear from the allegations in the complaint that
private respondents claim ownership of the 2,250 square
meter portion for having possessed it in the concept of an
owner, openly, peacefully, publicly, continuously and
adversely since 1920. This claim is an assertion that the
lot is private land, or that even assuming it was part of the
public domain, private respondents had already acquired
imperfect title thereto under Section 48(b) of C.A. No. 141,
otherwise known as the Public Land Act, as amended by
R.A. No. 1942
Under Section 48, a subject lot is, for all legal intents and
purposes, segregated from the public domain, because
the beneficiary is "conclusively presumed to have
performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title under the
provisions of this chapter."
Law on NatRes (50-72 40
Consequently, merely on the basis of the allegations in the
complaint, the lot in question is apparently beyond the
jurisdiction of the Director of the Bureau of Lands and
could not be the subject of a Free Patent. Hence,
dismissal of private respondents complaint was premature
and trial on the merits should have been conducted to
thresh out evidentiary matters.
It would have been entirely different if the action were
clearly for reversion, in which case, it would have to be
instituted by the Solicitor General pursuant to Section 101
of C.A. No. 141, which provides:
Sec. 101. All actions for the reversion to the Government
of lands of the public domain or improvements thereon
shall be instituted by the Solicitor General or the officer
acting in his stead, in the proper courts, in the name of the
[Republic] of the Philippines.
In the more recent case of Heirs of Ambrocio Kionisala v.
Heirs of Honorio Dacut,30 the difference between an
action for declaration of nullity of land titles from an action
for reversion was more thoroughly discussed as follows:
An ordinary civil action for declaration of nullity of free
patents and certificates of title is not the same as an action
for reversion. The difference between them lies in the
allegations as to the character of ownership of the realty
whose title is sought to be nullified. In an action for
reversion, the pertinent allegations in the complaint would
admit State ownership of the disputed land. Hence, in
Gabila vs. Barriga [41 SCRA 131], where the plaintiff in his
complaint admits that he has no right to demand the
cancellation or amendment of the defendants title
because even if the title were canceled or amended the
ownership of the land embraced therein or of the portion
affected by the amendment would revert to the public
domain, we ruled that the action was for reversion and that
the only person or entity entitled to relief would be the
Director of Lands.
On the other hand, a cause of action for declaration of
nullity of free patent and certificate of title would require
allegations of the plaintiffs ownership of the contested lot
prior to the issuance of such free patent and certificate of
title as well as the defendants fraud or mistake, as the
case may be, in successfully obtaining these documents of
title over the parcel of land claimed by plaintiff. In such a
case, the nullity arises strictly not from the fraud or deceit
but from the fact that the land is beyond the jurisdiction of
the Bureau of Lands to bestow and whatever patent or
certificate of title obtained therefore is consequently void
ab initio. The real party-in-interest is not the State but the
plaintiff who alleges a pre-existing right of ownership over
the parcel of land in question even before the grant of title
to the defendant
In their Complaint, petitioners never alleged that the
Subject Property was part of the public domain. On the

contrary, petitioners asserted title over the Subject
Property by virtue of their actual, physical, open,
continuous and adverse possession thereof, in the
concept of owners, by themselves and through their
predecessors-in-interest, since time immemorial. The
Deeds of Assignment executed in their favor and attached
to their Complaint referred to a Spanish title granted by the
Queen of Spain to their predecessor-in-interest, Don
Hermogenes Rodriguez. Clearly, petitioners are asserting
private title over the Subject Property, and consequently,
their action could not be one for reversion.
In their instant Petition, petitioners further averred that
rather than an action for nullity of respondents certificates
of title, theirs was more appropriately an action to remove
a cloud on or to quiet their title over the Subject Property.
Article 476 of the Civil Code, on removal of a cloud on or
quieting of title, provides that:
Art. 476. Whenever there is a cloud on title to real property
or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact
invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from
being cast upon title to real property or any interest
therein.
Respondents certificates of title over the Subject Property
appeared valid or effective; but according to the
petitioners, they were fake, spurious and/or fraudulent,
and a cloud on their title to the same property that needed
to be removed. A cloud on title has been defined as
follows:
Cloud on Title. A cloud on title is an outstanding
instrument, record, claim, encumbrance or proceeding
which is actually invalid or inoperative, but which may
nevertheless impair or affect injuriously the title to
property. The matter complained of must have a prima
facie appearance of validity or legal efficacy. The cloud on
title is a semblance of title which appears in some legal
form but which is in fact unfounded. The invalidity or
inoperativeness of the instrument is not apparent on the
face of such instrument, and it has to be proved by
extrinsic evidence31
Even as this Court agrees with the petitioners that their
action was one for removal of a cloud on or quieting of
title, it does arrive at the same conclusion as the trial court
and the Court of Appeals that petitioners had no
personality to file the said action, not being the parties-in-
interest, and their Complaint should be dismissed for not
stating a cause of action.
Law on NatRes (50-72 41
According to Article 477 of the Civil Code, the plaintiff, in
an action to remove a cloud on or to quiet title, must have
legal or equitable title to, or interest in, the real property
which is the subject matter of the action.32 Petitioners
failed to establish in their Complaint that they had any
legal or equitable title to, or legitimate interest in, the
Subject Property so as to justify their right to file an action
to remove a cloud on or to quiet title.
Title to real property refers to that upon which ownership is
based. It is the evidence of the right of the owner or the
extent of his interest, by which means he can maintain
control and, as a rule, assert right to exclusive possession
and enjoyment of the property.33
In their Complaint, petitioners claimed title to the Subject
Property by virtue of their actual and continuous
possession of the same since time immemorial, by
themselves and through their predecessors-in-interest.
Yet, the Deeds of Assignment executed by Ismael Favila
in their favor, attached to and an integral part of their
Complaint, revealed that petitioners predecessors-in-
interest based their right to the Subject Property on the
Spanish title awarded to Don Hermogenes Rodriguez.
There existed a contradiction when petitioners based their
claim of title to the Subject Property on their possession
thereof since time immemorial, and at the same time, on
the Spanish title granted to Don Hermogenes Rodriguez.
Possession since time immemorial carried the
presumption that the land had never been part of the
public domain or that it had been private property even
before the Spanish conquest.34 If the Subject Property
was already private property before the Spanish conquest,
then it would have been beyond the power of the Queen of
Spain to award or grant to anyone.
The title to and possession of the Subject Property by
petitioners predecessors-in-interest could be traced only
as far back as the Spanish title of Don Hermogenes
Rodriguez. Petitioners, having acquired portions of the
Subject Property by assignment, could acquire no better
title to the said portions than their predecessors-in-interest,
and hence, their title can only be based on the same
Spanish title.
Respondent maintained that P.D. No. 892 prevents
petitioners from invoking the Spanish title as basis of their
ownership of the Subject Property. P.D. No. 892
strengthens the Torrens system by discontinuing the
system of registration under the Spanish Mortgage Law,
and by categorically declaring all lands recorded under the
latter system, not yet covered by Torrens title,
unregistered lands. It further provides that within six
months from its effectivity, all holders of Spanish titles or
grants should apply for registration of their land under
what is now P.D. No. 1529, otherwise known as the Land
Registration Decree. Thereafter, Spanish titles can no
longer be used as evidence of land ownership in any

registration proceedings under the Torrens system. 35
Indubitably, P.D. No. 892 divests the Spanish titles of any
legal force and effect in establishing ownership over real
property.
P.D. No. 892 became effective on 16 February 1976. The
successors of Don Hermogenes Rodriguez had only until
14 August 1976 to apply for a Torrens title in their name
covering the Subject Property. In the absence of an
allegation in petitioners Complaint that petitioners
predecessors-in-interest complied with P.D. No. 892, then
it could be assumed that they failed to do so. Since they
failed to comply with P.D. No. 892, then the successors of
Don Hermogenes Rodriguez were already enjoined from
presenting the Spanish title as proof of their ownership of
the Subject Property in registration proceedings.
Registration proceedings under the Torrens system do not
create or vest title, but only confirm and record title already
created and vested.36 By virtue of P.D. No. 892, the
courts, in registration proceedings under the Torrens
system, are precluded from accepting, confirming and
recording a Spanish title. Reason therefore dictates that
courts, likewise, are prevented from accepting and
indirectly confirming such Spanish title in some other form
of action brought before them (i.e., removal of cloud on or
quieting of title), only short of ordering its recording or
registration. To rule otherwise would open the doors to the
circumvention of P.D. No. 892, and give rise to the
existence of land titles, recognized and affirmed by the
courts, but would never be recorded under the Torrens
system of registration. This would definitely undermine the
Torrens system and cause confusion and instability in
property ownership that P.D. No. 892 intended to
eliminate.
Petitioners argued that the Spanish title may still be
presented as proof of ownership on the basis of the
exception provided in the fourth whereas clause of P.D.
No. 892, which reads:
WHEREAS, Spanish titles to lands which have not yet
been brought under the operation of the Torrens system,
being subject to prescription, are now ineffective to prove
ownership unless accompanied by proof of actual
possession; . . .
Since Petitioners alleged that they were in actual
possession of the Subject Property, then they could still
present the Spanish title as evidence of their ownership of
the Subject Property. 37
This Court cannot sustain petitioners argument. Actual
proof of possession only becomes necessary because, as
the same whereas clause points out, Spanish titles are
subject to prescription. A holder of a Spanish title may still
lose his ownership of the real property to the occupant
who actually possesses the same for the required
prescriptive period.38 Because of this inherent weakness
Law on NatRes (50-72 42
of a Spanish title, the applicant for registration of his
Spanish title under the Torrens system must also submit
proof that he is in actual possession of the real property,
so as to discount the possibility that someone else has
acquired a better title to the same property by virtue of
prescription.
Moreover, legislative intent must be ascertained from a
consideration of the statute as a whole, and not just a
particular provision alone. A word or phrase taken in the
abstract may easily convey a meaning quite different from
the one actually intended and evident when the word or
phrase is considered with those with which it is associated.
An apparently general provision may have a limited
application if read together with other provisions of the
statute.39
The fourth whereas clause of P.D. No. 892 should be
interpreted and harmonized with the other provisions of
the whole statute.40 Note that the tenor of the whole
presidential decree is to discontinue the use of Spanish
titles and to strip them of any probative value as evidence
of ownership. It had clearly set a deadline for the filing of
applications for registration of all Spanish titles under the
Torrens system (i.e., six months from its effectivity or on
14 August 1976), after which, the Spanish titles may no
longer be presented to prove ownership.
All holders of Spanish titles should have filed applications
for registration of their title on or before 14 August 1976. In
a land registration proceeding, the applicant should
present to the court his Spanish title plus proof of actual
possession of the real property. However, if such land
registration proceeding was filed and initiated after 14
August 1976, the applicant could no longer present his
Spanish title to the court to evidence his ownership of the
real property, regardless of whether the real property was
in his actual possession.
Therefore, the fact that petitioners were in actual
possession of the Subject Property when they filed the
Complaint with the trial court on 29 April 1996 does not
exclude them from the application of P.D. No. 892, and
their Spanish title remain inadmissible as evidence of their
ownership of the Subject Property, whether in a land
registration proceeding or in an action to remove a cloud
on or to quiet title.
The preceding discussion does not bar holders of Spanish
titles from claiming ownership of the real property on some
other basis, such as those provided in either the Land
Registration Decree41 or the Public Land Act.42
Petitioners though failed to allege any other basis for their
titles in their Complaint aside from possession of the
Subject Property from time immemorial, which this Court
has already controverted; and the Spanish title, which is
already ineffective to prove ownership over the Subject
Property.

Therefore, without legal or equitable title to the Subject
Property, the petitioners lacked the personality to file an
action for removal of a cloud on, or quieting of, title and
their Complaint was properly dismissed for failing to state
a cause of action. In view of the dismissal of the case on
this ground, it is already unnecessary for this Court to
address the issue of prescription of the action.
Wherefore, this Court DENIES the instant petition and
AFFIRMS the Decision of the Court of Appeals, dated 29
July 2002, and the Order of the Regional Trial Court of
San Mateo, Rizal, Branch 77, dated 05 February 1999,
dismissing petitioners Complaint for failure to state a
cause of action. SO ORDERED.
TOMAS ROCO, ET AL., plaintiffs-appellants, vs. JUAN
GIMEDA, defendant-appellee; G.R. No. L-11651
December 27, 1958
Appeal from a judgment of the Court of First Instance of
Cebu, Hon. Jose S. Rodriguez, presiding, dismissing the
complaint upon petition of defendants, on the ground that
it fails to state a cause of action.
The complaint makes the following allegations: that before
August 22, 1918, Espiridiona Caramihan, owned and
possessed two parcels of land known as lots Nos. 2741
and 3082 of the Barili Cadastral Survey No. 219, covered
by tax declarations Nos. 01865 and 01854; that upon the
death of said Espiridiona Caramihan on August 22, 1918,
said lands were partitioned equally among her children,
who similarly possessed and cultivated their respective
shares and paid the taxes thereon; that in the years 1925
to 1927, through ignorance and inadvertence of the heirs,
the said lots were declared public land in a cadastral
proceeding; that Espiridiona occupied said lands openly,
adversely, continuously and publicly, planting coconut and
fruit trees and building her dwelling house thereon, and
that said improvements and house are still on said lots;
that the present plaintiffs acquired their rights to the lots by
purchase from the heirs of the original owner Espiridiona
Caramihan; that on or about December 7, 1940, Juan
Gimeda, defendant, filed an application for a free patent to
said lands, surreptitiously and fraudulently, without
knowledge of the owners and possessors, and on
December 7, 1940, the Director of Lands issued an order
and in accordance therewith, on September 17, 1951, the
Bureau of Lands issued patent No. 51552 in the name of
defendant Juan Gimeda; that the plaintiffs and their
original predecessor-in-interest have always been in the
actual, physical, continuous and uninterrupted possession
of the said parcels of land and defendant Juan Gimeda
applied for and obtained his patent thereto without notice
to them and without their knowledge, and secured the
approval of his patent by fraudulent statements, alleging
that he was the only heir of Espiridiona Caramihan and the
only occupant of the land; and that by such false and
fraudulent statements the Bureau of Lands approved his
application and ordered the issuance of his patent.
Law on NatRes (50-72 43
The defendant filed an answer to the complaint, then
amended the said answer and alleges that he is the
youngest among the children of Espiridiona Caramihan;
denies the allegations made in the complaint as to the
acquisition by false and fraudulent means of the said
lands; alleges that the complaint states no cause of action.
He presents a counterclaim for P5,000 and P10,000 as
moral and exemplary damages, respectively, and P500 as
attorney's fees. Plaintiffs deny this counterclaim.
Later on defendant presented a motion to dismiss, alleging
that the complaint alleges no cause of action, arguing that
as the title in his favor was issued on October 17, 1951
and action was filed on July 15, 1954, the action was filed
more than two years after the issuance of the patent,
beyond the one-year period provided by law. The
authorities cited for this defense are the case of Director of
Lands vs. Gutierrez David, 50 Phil., 797; Villarosa vs.
Sarmiento, 46 Phil., 814; Cabanos vs. Register of Deeds,
40 Phil., 620; Sumcad vs. Judge of the Court of First
Instance, et al., 96 Phil., 946; 51 Off. Gaz., [5] 2413.
It is to be noted that the petition does not seek for a
reconsideration of the granting of the patent or of the
decree issued in the registration proceeding. The purpose
is not to annul the title but to have it conveyed to plaintiffs.
Fraudulent statements were made in the application for
the patent and no notice thereof was given to plaintiffs, nor
knowledge of the petition known to the actual possessors
and occupant the property. The action is one based on
fraud and under the law, it can be instituted within four
years from the discovery of the fraud. (Art. 1146, Civil
Code, as based on Section 3, paragraph 43 of Act No.
190.) It is to be noted that as the patent here has already
been issued, the land has the character of registered
property in accordance with the provisions of Section 122
of Act No. 496, as amended by Act No. 2332, and the
remedy of the party who has been injured by the
fraudulent registration is an action for reconveyance.
(Director of Lands vs. Registered of Deeds, 92 Phil., 826;
49 Off. Gaz. [3] 935; Section 55 of Act No. 496.)
The order of dismissal appealed from is, therefore,
reversed and the case is returned to the court a quo for
further proceedings in accordance with law.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY
THE REGIONAL EXECUTIVE DIRECTOR,
DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR) - REGION IV, MANILA,
Petitioner, v. AMOR HACHERO AND THE REGISTER
OF DEEDS OF PALAWAN, Respondents.; G.R. No.
200973, May 30, 2016
Subject of this petition for review on certiorari is the July 4,
2011 Decision1 of the Court of Appeals (CA), in CA-G.R.
CV No. 87267 and its March 6, 2012 Resolution,2
affirming the March 29, 2006 Decision3 of the Regional
Trial Court, Branch 48, Puerto Princesa, Palawan (RTC),
which denied the Petition for Cancellation of Free Patent,

Original Certificate of Title and Reversion filed by the
Republic of the Philippines (Republic).
The Antecedents
Sometime in 1996, Amor Hachero (Hachero) filed his Free
Patent Application No. 045307-969 covering Lot No. 1514,
CAD-1150-D (subject land) before the Community
Environment and Natural Resources Office (CENRO) of
Palawan. The subject land, with an area of 3.1308
hectares or 31,308 square meters (subject land), is
located in Sagrada, Busuanga, Palawan.4
The said application for free patent was later approved by
the Provincial Environment and Natural Resources Officer
(PENRO) of Palawan based on the following findings:
1) That Hachero was a natural-born Filipino citizen of the
Philippines and, therefore, qualified to acquire public land
through free patent;
2) That the land applied for had been classified as
alienable and disposable and, therefore, subject to
disposition under the Public Land Law;
3) That an investigation conducted by the Land
Investigator/Inspector/Deputy Public Land Inspector Sim
A. Luto, found that the subject land had been occupied
and cultivated by Hachero himself and/or through his
predecessor- in-interest since June 12, 1945 or prior
thereto;
4) That the notice for the acquisition of the land by
Hachero was published in accordance with law and that no
other person provided a better right to the land applied for;
5) That there was no adverse claim involving the land still
pending determination before the CENRO; and
6) That the claim of Hachero was complete and there was
no record in the CENRO of any obstacle to the issuance of
the patent.5ChanRoblesVirtualawlibrary
On October 15, 1998, Free Patent No. 045307-98-9384
was issued to Hachero and the subject land was
registered under Original Certificate of Title (OCT) No. E-
18011 on May 7, 1999.
After an inspection and verification were conducted by the
CENRO in 2000, it was discovered that the subject land,
covered by OCT No. E-18011, was still classified as
timberland and so not susceptible of private ownership
under the Free Patent provision of the Public Land Act.6
Consequently, on November 26, 2002, the Republic,
represented by the Regional Executive Director,
Department of Environment and Natural Resources
(DENR)-Region IV, Manila, filed the Complaint for the
Cancellation of Free Patent No. 045307-98-9384 and OCT
No. E-18011 and for Reversion, which was docketed as
Civil Case No. 3726.
Law on NatRes (50-72 44
Despite personal receipt of the summons and the
complaint, however, Hachero did not file any responsive
pleading within the period required by law. Upon the
Republic's motion, the RTC declared Hachero in default.
Thereafter, the Republic was allowed to present its
evidence ex-parte.7
The Republic presented its lone witness, Diosdado
Ocampo, former CENRO officer of Palawan, and formally
offered the following documents as its exhibits: a)
Application for Free Patent of Amor Hachero; b) Orders of
Approval of the Application and Issuance of Free Patent;
c) Free Patent No. 045307-98-9384; d) OCT No. E-18011
issued in the name of Amor Hachero; e) Inspection
Report, dated July 24, 2000; and f) Verification, dated July
17, 2000, both issued by one Sim Luto.8
The Ruling of the RTC
On March 29, 2006, the RTC rendered its decision in favor
of Hachero. The dispositive portion of the RTC decision
reads:
WHEREFORE, premises considered, the Court hereby
resolves to deny the instant action for cancellation of Free
Patent and Original Certificate of Title and Reversion for
lack of merit. No pronouncement as to costs.
IT IS SO ORDERED.
The RTC explained that the free patent and title had
already been issued after Hachero was found to have
complied with all the requirements; that it was the Republic
itself thru the DENR-CENRO, Coron, which brought the
subject land under the operation of the Torrens System;
that it could not understand the complete turnabout made
by the same office and its officials who certified before that
the subject land was alienable and disposable and who
approved Hachero's application; that the Republic failed to
show the document which stated that the subject land was
still timberland as indicated under Project No. 2A L.C. Map
No. 839, released on December 9, 1929, despite the fact
that said document was already available at the CENRO
office at the time of the application for free patent; that the
lands adjacent to the subject land were already alienable
and disposable; that the free patent and the title itself were
public documents entitled to the presumption of regularity;
and that the verification and inspection report of one Sim
Luto together with the other CENRO officials presented by
the Republic were insufficient to defeat Hachero's patent
and title.10
The Ruling of the CA
On July 4, 2011, the CA affirmed the RTC decision, stating
that the verification presented by the Republic could not be
given probative value because L.C. Map No. 839, dated
December 9, 1929, which served as basis for the
verification, was not presented before the RTC. According

to the CA, the Inspection Report, standing alone, was not
sufficient to overcome the burden imposed upon the
Republic and could not serve as basis of the reversion of
the subject land. The CA doubted the subsequent findings
of the land investigator that the subject land was still
timberland because he was the same land investigator
who previously evaluated the subject land and certified
that it was alienable and disposable.11
Not in conformity, the Republic filed the subject petition
anchored on the following
GROUNDS
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN AFFIRMING THE DISMISSAL OF
PETITIONER'S ACTION FOR CANCELLATION OF FREE
PATENT NO. 045307-98-9384 AND ORIGINAL
CERTIFICATE OF TITLE (OCT) NO. E-18011 AND
REVERSION, CONSIDERING THAT:
I mistake or error. He asserts that the main document a vital
THE DISCHARGE OF THE OFFICIAL FUNCTIONS BY
THE INVESTIGATING PERSONNEL OF THE DENR IN
THIS CASE HAS THE PRESUMPTION OF
REGULARITY, WHICH PRIVATE RESPONDENT FAILED
TO REBUT.
II
THE PREVIOUS FACTUAL MIS APPRECIATION
COMMITTED BY THE DENR EMPLOYEES CANNOT
AND SHOULD NOT BIND THE GOVERNMENT,
ESPECIALLY WHEN, AS IN THIS CASE, THE MISTAKE
OR ERROR REFERS TO IMMUTABLE MATTERS SUCH
AS ALIENABILITY OF A PORTION OF PUBLIC
DOMAIN.12
In advocacy of its cause, the Republic basically argues
that per its investigation and verification conducted in July
2000, the free patent issued to Hachero was defective and
erroneous considering that the land it covered fell within
the timberland zone. It contends that the said factual
findings carry great weight and should be accorded
respect by the courts due to the special knowledge and
expertise of DENR personnel over matters within their
jurisdiction. Considering that the DENR personnel acted in
the discharge of their official functions, the Republic
asserted that they have in their favor the presumption of
regularity in the performance of their official duties.
Moreover, Hachero failed to rebut the DENR's
investigation report and, for said reason, the presumption
in favor of the investigating personnel and their report has
become conclusive.
The Republic further contends that the title issued to
Hachero, which had been issued based on an erroneous
DENR finding that the land was alienable, can still be
overturned by a later report stating otherwise. Thus, the
Law on NatRes (50-72 45
Inspection Report,13 dated July 24, 2000, and Verification
Report,14 dated July 17, 2000, superseded the previous
finding that the subject land was alienable and disposable.
The Republic avers that the State is not estopped by the
mistakes of its officers and employees and that the
previous factual misappreciation committed by DENR
employees cannot bind the government.15
Hachero's counter-position
Hachero counters that the petition should be dismissed on
the ground that it has raised substantially factual matters.
He points out that the findings of fact of the RTC and the
CA are final and conclusive and cannot be reviewed on
appeal if there is no showing of grave abuse of discretion.
He calls the attention of the Court to the fact that the
officials, who previously certified to the alienability and
disposability of the subject land but made a complete turn
around by declaring otherwise, could not have made a
piece of data denominated as Cadastral Map No. 839,
which became the basis for the
reinspection/reinvestigation and verification by CENRO,
Coron, was released on December 9, 1929 and admittedly
already in their records when the application was
approved for titling, and yet was not presented in court as
evidence. Finally, Hachero stresses that the government
cannot be allowed to deal dishonorably or capriciously with
its citizens and that titleholders may not be made to bear
the unfavorable effect of the mistake or negligence of the
State's agents, in the absence of his complicity in a fraud
or manifest damage to third persons.16
The Court's Ruling
The Court finds merit in the petition.
General Rule and Exceptions when
factual findings of the trial court
are affirmed by the CA
It is generally settled in jurisprudence that the findings of
fact of the trial court specially when affirmed by the CA are
final, binding and conclusive and may not be re-examined
by this Court. There are, however, several exceptions to
this rule, to wit:
1] When the findings are grounded entirely on speculation,
surmises or conjectures;
2] When the inference made is manifestly mistaken,
absurd or impossible;
3] When there is grave abuse of discretion;
4] When the judgment is based on misapprehension of
facts;
5] When the findings of facts are conflicting;
6] When in making its findings, the CA went beyond the
issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee;

7] When the findings of the CA are contrary to that of the
trial court;
8] When the findings are conclusions without citation of
specific evidence on which they are based;
9] When the facts set forth in the petition as well as in the
main and reply briefs are not disputed;
10] When the findings of fact are premised on the
supposed absence of evidence and contradicted by the
evidence on record; and
11] When the CA manifestly overlooked certain relevant
facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.17
After combing through the records, the Court is of the
considered view that there is a need to review the findings
of the courts below due to the presence of some of the
enumerated exceptions mentioned above, which are 1)
when the judgment is based on misapprehension of facts;
and 2) when the findings of fact are contradicted by the
evidence on record.
The Republic showed clear and
convincing proof that the subject
land was inalienable and
non-disposable
Records reveal that on October 15, 1998, upon the
approval of Hachero's application by CENRO of Palawan,
Free Patent No. 045307-98-9384 was issued and, on May
7, 1999, the property was subsequently registered under
OCT No. E-18011.
Thereafter, in an effort to find out fake or illegal titles, the
DENR created a task force to investigate and evaluate all
issued patents and titles. An investigation conducted by a
representative of the Regional Executive Director of the
Regional Office No. IV revealed that the subject land
covered by OCT No. E-18011 was still timberland and,
therefore, could not be segregated from the public domain
as timberlands were classified as inalienable and non-
disposable public lands.
Accordingly, both Sim Luto, Land Management Officer III,
and Diosdado L. Ocampo, Community Environment and
Natural Resources Officer, prepared and signed the
Inspection Report, dated July 24, 2000, and Verification,
dated July 17, 2000, attesting to the fact the subject land
fell within the timberland zone under Project No. 2A, L.C.
Map No. 839, released on December 9, 1929. For said
reason, both recommended the cancellation of OCT No.
E-18011.
Aside from the Inspection Report and the Verification, the
Republic also adduced maps18 prepared by the National
Mapping and Resource Information Authority (NAMRIA),
which showed that the subject land was located within the
periphery of the land area classified as unclassified public
forest and beyond the alienable and disposable area. In
other words, as the maps clearly reveal, every inch of the
Law on NatRes (50-72 46
subject land is inside the unclassified public forest area.
Evidently, these maps presented by the Republic, together
with the Inspection Report and the Verification, all clearly
demonstrate that the subject land is not yet subject to
disposition.
Presumption of regularity in the
performance of official duties
applies favorably to Republic
The Court would have wanted to study Hachero's position
on the matter, but he did not file an answer or responsive
pleading to the complaint filed by the Republic before the
RTC. It appears from the records, however, that he was
duly served with the summons together with a copy of the
complaint. He, apparently, opted to ignore it, in effect,
waived his right to rebut the allegations thereof at the first
opportunity.
There being a controversion, the presumption of regularity
in the performance of official duties applies favorably to
the Republic. This means that the DENR's inspection
report and the verification stating that the subject land is
still inalienable has become conclusive. The doctrine in
Bustillo vs. People,19
xxx In sum, the petitioners have in their favor the
presumption of regularity in the performance of official
duties which the records failed to rebut. The presumption
of regularity of official acts may be rebutted by affirmative
evidence of irregularity or failure to perform a duty. The
presumption, however, prevails until it is overcome by no
less than clear and convincing evidence to the contrary.
Thus, unless the presumption is rebutted, it becomes
conclusive. Every reasonable intendment will be made in
support of the presumption and in case of doubt as to an
officer's act being lawful or unlawful, construction should
be in favor of its lawfulness.
[Emphasis Supplied]
and in Farolan v. Solmac Marketing Corp.,20
In the same vein, the presumption, disputable though it
may be, that an official duty has been regularly performed
applies in favor of the petitioners. Omnia praesumuntur rite
et solemniter esse acta. (All things are presumed to be
correctly and solemnly done.) It was private respondent's
burden to overcome this juris tantum presumption. We are
not persuaded that it has been able to do so.
are both instructive.
Cancellation of title and reversion proper
where there exists a mistake or oversight in
granting free patent over inalienable land
The courts below ruled that the Inspection Report and the
Verification had no probative value because the land

classification map (L.C. Map No. 839) on which they were
based was not presented in the trial court. Likewise, the
courts below considered the subsequent findings of the
land investigator - that the land still belonged to the public
domain - as doubtful because the officials who previously
evaluated and verified that the subject land was alienable
were the same officials who now investigated and verified
the same and found it inalienable.
The Court holds otherwise.
Reversion is an action where the ultimate relief sought is
to revert the land back to the government under the
Regalian doctrine. Considering that the land subject of the
action originated from a grant by the government, its
cancellation therefore is a matter between the grantor and
the grantee.21 In Republic v. Guerrero,22 the Court gave
a more general statement that "this remedy of reversion
can only be availed of in cases of fraudulent or unlawful
inclusion of the land in patents or certificates of title."23
Nonetheless, the Court recognized in Republic v.
Mangotara,24 that there were instances when it granted
reversion for reasons other than fraud:
xxx. In Estate of the Late Jesus S. Yujuico v. Republic
(Yujuico case), reversion was defined as an action which
seeks to restore public land fraudulently awarded and
disposed of to private individuals or corporations to the
mass of public domain. It bears to point out, though, that
the Court also allowed the resort by the Government to
actions for reversion to cancel titles that were void for
reasons other than fraud, i.e., violation by the grantee of a
patent of the conditions imposed by law; and lack of
jurisdiction of the Director of Lands to grant a patent
covering inalienable forest land or portion of a river, even
when such grant was made through mere
oversight.25cralawred
[Emphasis Supplied]
In the case at bench, although the Republic's action for
cancellation of patent and title and for reversion was not
based on fraud or misrepresentation on the part of
Hachero, his title could still be cancelled and the subject
land reverted back to the State because the grant was
made through mistake or oversight. This could probably be
the reason why, shortly after one (1) year from the
issuance of OCT No. E-18011 to Hachero, the DENR
personnel conducted another investigation and verification
on the subject land. It would appear that they suspected
that a mistake was made in their issuance of the patent as
the subject land had not been reclassified or released as
alienable or disposable land. It remained plotted within the
timberland classification zone. This time, they supported
their findings with maps prepared by the NAMRIA. The
Republic also followed the proper legal procedure for
cancellation of patent and title and for reversion. They filed
a complaint in court and notified Hachero through
summons. They gave Hachero an opportunity to be heard
Law on NatRes (50-72 47
in court. For unknown reasons, however, he disregarded
the summons, allowed himself to be declared in default,
and forfeited his right to adduce evidence in his defense.
Prescription and estoppel cannot lie against the State
Contrary to the observation of the courts below, there is
nothing incomprehensible or puzzling or suspicious about
the complete turnaround made by the DENR after its re-
investigation. The Court has carefully reviewed the records
and found nothing anomalous.
At any rate, it is a time-honored principle that the statute of
limitations or the lapse of time does not run against the
State. Jurisprudence also recognizes the State's immunity
from estoppel as a result of the mistakes or errors of its
officials and agents. These well-established principles
apply in the case at bench. The Court in Republic v. Roxas
elucidated:
It is true that once a homestead patent granted in
accordance with the Public Land Act is registered pursuant
to Act 496, otherwise known as The Land Registration Act,
or Presidential Decree No. 1529, otherwise known as The
Property Registration Decree, the certificate of title issued
by virtue of said patent has the force and effect of a
Torrens title issued under said registration laws. We
expounded in Ybafiez v. Intermediate Appellate Court that:
The certificate of title serves as evidence of an
indefeasible title to the property in favor of the person
whose name appears therein. After the expiration of the
one (1) year period from the issuance of the decree of
registration upon which it is based, it becomes
incontrovertible. The settled rule is that a decree of
registration and the certificate of title issued pursuant
thereto may be attacked on the ground of actual fraud
within one (1) year from the date of its entry and such an
attack must be direct and not by a collateral proceeding.
The validity of the certificate of title in this regard can be
threshed out only in an action expressly filed for the
purpose.
It must be emphasized that a certificate of title issued
under an administrative proceeding pursuant to a
homestead patent, as in the instant case, is as
indefeasible as a certificate of title issued under a judicial
registration proceeding, provided the land covered by said
certificate is a disposable public land within the
contemplation of the Public Land Law.
There is no specific provision in the Public Land Law (C.A.
No. 141, as amended) or the Land Registration Act (Act
496), now P.D. 1529, fixing the one (1) year period within
which the public land patent is open to review on the
ground of actual fraud as in Section 38 of the Land
Registration Act, now Section 32 of P.D. 1529, and
clothing a public land patent certificate of title with
indefensibility. Nevertheless, the pertinent

pronouncements in the aforecited cases clearly reveal that
Section 38 of the Land Registration Act, now Section 32 of
P.D. 1529 was applied by implication by this Court to the
patent issued by the Director of Lands duly approved by
the Secretary of Natural Resources, under the signature of
the President of the Philippines in accordance with law.
The date of issuance of the patent, therefore, corresponds
to the date of the issuance of the decree in ordinary
registration cases because the decree finally awards the
land applied for registration to the party entitled to it, and
the patent issued by the Director of Lands equally and
finally grants, awards, and conveys the land applied for to
the applicant. This, to our mind, is in consonance with the
intent and spirit of the homestead laws, i.e., conservation
of a family home, and to encourage the settlement,
residence and cultivation and improvement of the lands of
the public domain. If the title to the land grant in favor of
the homesteader would be subjected to inquiry, contest
and decision after it has been given by the Government
thru the process of proceedings in accordance with the
Public Land Law, there would arise uncertainty, confusion
and suspicion on the government's system of distributing
public agricultural lands pursuant to the "Land for the
Landless" policy of the State. (Emphases ours, citations
omitted.)
Yet, we emphasize that our statement in the aforequoted
case that a certificate of title issued pursuant to a
homestead patent becomes indefeasible after one year, is
subject to the proviso that "the land covered by said
certificate is a disposable public land within the
contemplation of the Public Land Law." As we have ruled
herein, the subject property is part of the Matchwood
Forest Reserve and is inalienable and not subject to
disposition. Being contrary to the Public Land Law,
Homestead Patent No. 111598 and OCT No. P-5885
issued in respondent Roxas's name are void; and the right
of petitioner Republic to seek cancellation of such void
patent/title and reversion of the subject property to the
State is imprescriptible.
We have addressed the same questions on indefensibility
of title and prescription in Mangotara, thus:
It is evident from the foregoing jurisprudence that despite
the lapse of one year from the entry of a decree of
registration/certificate of title, the State, through the
Solicitor General, may still institute an action for reversion
when said decree/certificate was acquired by fraud or
misrepresentation. Indefeasibility of a title does not attach
to titles secured by fraud and misrepresentation. Well-
settled is the doctrine that the registration of a patent
under the Torrens system does not by itself vest title; it
merely confirms the registrant's already existing one.
Verily, registration under the Torrens system is not a mode
of acquiring ownership.
But then again, the Court had several times in the past
recognized the right of the State to avail itself of the
Law on NatRes (50-72 48
remedy of reversion in other instances when the title to the
land is void for reasons other than having been secured by
fraud or misrepresentation. One such case is Spouses
Morandarte v. Court of Appeals, where the Bureau of
Lands (BOL), by mistake and oversight, granted a patent
to the spouses Morandarte which included a portion of the
Miputak River. The Republic instituted an action for
reversion 10 years after the issuance of an OCT in the
name of the spouses Morandarte. The Court ruled:
Be that as it may, the mistake or error of the officials or
agents of the BOL in this regard cannot be invoked against
the government with regard to property of the public
domain. It has been said that the State cannot be
estopped by the omission, mistake or error of its officials
or agents.
It is well-recognized that if a person obtains a title under
the Public Land Act which includes, by oversight, lands
which cannot be registered under the Torrens system, or
when the Director of Lands did not have jurisdiction over
the same because it is a public domain, the grantee does
not, by virtue of the said certificate of title alone, become
the owner of the land or property illegally included.
Otherwise stated, property of the public domain is
incapable of registration and its inclusion in a title nullifies
that title.
Another example is the case of Republic of the Phils, v.
CFI ofLanao del Norte, Br. IV, in which the homestead
patent issued by the State became null and void because
of the grantee's violation of the conditions for the grant.
The Court ordered the reversion even though the land
subject of the patent was already covered by an OCT and
the Republic availed itself of the said remedy more than 11
years after the cause of action accrued, because:
There is merit in this appeal considering that the statute of
limitation does not lie against the State. Civil Case No.
1382 of the lower court for reversion is a suit brought by
the petitioner Republic of the Philippines as a sovereign
state and, by the express provision of Section 118 of
Commonwealth Act No. 141, any transfer or alienation of a
homestead grant within five (5) years from the issuance of
the patent is null and void and constitute a cause for
reversion of the homestead to the State. In Republic vs.
Ruiz, 23 SCRA 348, We held that "the Court below
committed no error in ordering the reversion to plaintiff of
the land grant involved herein, notwithstanding the fact
that the original certificate of title based on the patent had
been cancelled and another certificate issued in the
names of the grantee heirs. Thus, where a grantee is
found not entitled to hold and possess in fee simple the
land, by reason of his having violated Section 118 of the
Public Land Law, the Court may properly order its
reconveyance to the grantor, although the property has
already been brought under the operation of the Torrens
System. And, this right of the government to bring an
appropriate action for reconveyance is not barred by the

lapse of time: the Statute of Limitations does not run
against the State." (Italics supplied). The above ruling was
reiterated in Republic vs. Mina, 114 SCRA 945.
If the Republic is able to establish after trial and hearing of
Civil Case No. 6686 that the decrees and OCTs in Dona
Demetria's name are void for some reason, then the trial
court can still order the reversion of the parcels of land
covered by the same because indefeasibility cannot attach
to a void decree or certificate of title, xxx (Citations
omitted.)
Neither can respondent Roxas successfully invoke the
doctrine of estoppel against petitioner Republic. While it is
true that respondent Roxas was granted Homestead
Patent No. 111598 and OCT No. P-5885 only after
undergoing appropriate administrative proceedings, the
Government is not now estopped from questioning the
validity of said homestead patent and certificate of title. It
is, after all, hornbook law that the principle of estoppel
does not operate against the Government for the act of its
agents. And while there may be circumstances when
equitable estoppel was applied against public authorities,
i.e., when the Government did not undertake any act to
contest the title for an unreasonable length of time and the
lot was already alienated to innocent buyers for value,
such are not present in this case. More importantly, we
cannot use the equitable principle of estoppel to defeat the
law. Under the Public Land Act and Presidential
Proclamation No. 678 dated February 5, 1941, the subject
property is part of the Matchwood Forest Reserve which is
inalienable and not subject to disposition.26
[Emphases Supplied; citations omitted]
WHEREFORE, the petition is GRANTED. The July 4,
2011 Decision of the Court of Appeals in CA-G.R. CV No.
87267 and its March 6, 2012 Resolution are REVERSED
and SET ASIDE. Free Patent No. 045307-98-9384 and
OCT No. E-18011 in the name of Amor Hachero are
hereby declared NULL and VOID and CANCELLED.
The subject land is ordered reverted to the public domain
as part of the inalienable timberland. SO ORDERED.
REPUBLIC V ESPINOSA- PDF
FELIPE YSMAEL, JR. & CO., INC., petitioner, vs. THE
DEPUTY EXECUTIVE SECRETARY, THE SECRETARY
OF ENVIRONMENT AND NATURAL RESOURCES, THE
DIRECTOR OF THE BUREAU OF FOREST
DEVELOPMENT and TWIN PEAKS DEVELOPMENT
AND REALTY CORPORATION, respondents.; G.R. No.
79538 October 18, 1990
Soon after the change of government in February 1986,
petitioner sent a letter dated March 17, 1986 to the Office
of the President, and another letter dated April 2, 1986 to
Minister Ernesto Maceda of the Ministry of Natural
Resources [MNR], seeking: (1) the reinstatement of its
Law on NatRes (50-72 49
timber license agreement which was cancelled in August
1983 during the Marcos administration; (2) the revocation
of TLA No. 356 which was issued to Twin Peaks
Development and Realty Corporation without public
bidding and in violation of forestry laws, rules and
regulations; and, (3) the issuance of an order allowing
petitioner to take possession of all logs found in the
concession area [Annexes "6" and "7" of the Petition;
Rollo, pp. 54-63].
Petitioner made the following allegations:
(a) That on October 12, 1965, it entered into a timber
license agreement designated as TLA No. 87 with the
Department of Agriculture and Natural Resources,
represented by then Secretary Jose Feliciano, wherein it
was issued an exclusive license to cut, collect and remove
timber except prohibited species within a specified portion
of public forest land with an area of 54,920 hectares
located in the municipality of Maddela, province of Nueva
Vizcaya * from October 12, 1965 until June 30, 1990;
(b) That on August 18, 1983, the Director of the
Bureau of Forest Development [hereinafter referred to as
"Bureau"], Director Edmundo Cortes, issued a
memorandum order stopping all logging operations in
Nueva Vizcaya and Quirino provinces, and cancelling the
logging concession of petitioner and nine other forest
concessionaires, pursuant to presidential instructions and
a memorandum order of the Minister of Natural Resources
Teodoro Pena [Annex "5" of the Petition; Rollo, p. 49];
(c) that on August 25, 1983, petitioner received a
telegram from the Bureau, the contents of which were as
follows:
PURSUANT TO THE INSTRUCTIONS OF THE
PRESIDENT YOU ARE REQUESTED TO STOP ALL
LOGGING OPERATIONS TO CONSERVE REMAINING
FORESTS PLEASE CONDUCT THE ORDERLY PULL-
OUT OF LOGGING MACHINERIES AND EQUIPMENT
AND COORDINATE WITH THE RESPECTIVE DISTRICT
FORESTERS FOR THE INVENTORY OF LOGS CUT
PRIOR TO THIS ORDER THE SUBMISSION OF A
COMPLIANCE REPORT WITHIN THIRTY DAYS SHALL
BE APPRECIATED [Annex "4" of the Petition; Rollo, p.
48];
(d) That after the cancellation of its timber license
agreement, it immediately sent a letter addressed to then
President Ferdinand Marcos which sought reconsideration
of the Bureau's directive, citing in support thereof its
contributions to alleging that it was not given the forest
conservation and opportunity to be heard prior to the
cancellation of its logging 531, but no operations (Annex
"6" of the Petition; Rollo, pp. 50 favorable action was taken
on this letter;

(e) That barely one year thereafter, approximately
one-half or 26,000 hectares of the area formerly covered
by TLA No. 87 was re-awarded to Twin Peaks
Development and Reality Corporation under TLA No. 356
which was set to expire on July 31, 2009, while the other
half was allowed to be logged by Filipinas Loggers, Inc.
without the benefit of a formal award or license; and,
(f) That the latter entities were controlled or owned
by relatives or cronies of deposed President Ferdinand
Marcos. Acting on petitioner's letter, the MNR through then
Minister Ernesto Maceda issued an order dated July 22,
1986 denying petitioner's request. The Ministry ruled that a
timber license was not a contract within the due process
clause of the Constitution, but only a privilege which could
be withdrawn whenever public interest or welfare so
demands, and that petitioner was not discriminated
against in view of the fact that it was among ten
concessionaires whose licenses were revoked in 1983.
Moreover, emphasis was made of the total ban of logging
operations in the provinces of Nueva Ecija, Nueva
Vizcaya, Quirino and Ifugao imposed on April 2, 1986,
thus:
xxx xxx xxx
It should be recalled that [petitioner's] earlier request for
reinstatement has been denied in view of the total ban of
all logging operations in the provinces of Nueva Ecija,
Nueva Vizcaya, Quirino and Ifugao which was imposed for
reasons of conservation and national security.
The Ministry imposed the ban because it realizes the great
responsibility it bear [sic] in respect to forest t considers
itself the trustee thereof. This being the case, it has to
ensure the availability of forest resources not only for the
present, but also for the future generations of Filipinos.
On the other hand, the activities of the insurgents in these
parts of the country are well documented. Their financial
demands on logging concessionaires are well known. The
government, therefore, is well within its right to deprive its
enemy of sources of funds in order to preserve itself, its
established institutions and the liberty and democratic way
of life of its people.
xxx xxx xxx
[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.]
Petitioner moved for reconsideration of the aforestated
order reiterating, among others. its request that TLA No.
356 issued to private respondent be declared null and
void. The MNR however denied this motion in an order
dated September 15, 1986. stating in part:
xxx xxx xxx
Law on NatRes (50-72 50
Regarding [petitioner's] request that the award of a 26,000
hectare portion of TLA No. 87 to Twin Peaks Realty
Development Corporation under TLA No. 356 be declared
null and void, suffice it to say that the Ministry is now in the
process of reviewing all contracts, permits or other form of
privileges for the exploration, development, exploitation, or
utilization of natural resources entered into, granted,
issued or acquired before the issuance of Proclamation
No. 3, otherwise known as the Freedom Constitution for
the purpose of amending, modifying or revoking them
when the national interest so requires.
xxx xxx xxx
The Ministry, through the Bureau of Forest Development,
has jurisdiction and authority over all forest lands. On the
basis of this authority, the Ministry issued the order
banning all logging operations/activities in Quirino
province, among others, where movant's former
concession area is located. Therefore, the issuance of an
order disallowing any person or entity from removing cut or
uncut logs from the portion of TLA No. 87, now under TLA
No. 356, would constitute an unnecessary or superfluous
act on the part of the Ministry.
xxx xxx xxx
[Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.]
On November 26, 1986, petitioner's supplemental motion
for reconsideration was likewise denied. Meanwhile, per
MNR Administrative Order No. 54, series of 1986, issued
on November 26, 1986, the logging ban in the province of
Quirino was lifted.
Petitioner subsequently appealed from the orders of the
MNR to the Office of the President. In a resolution dated
July 6, 1987, the Office of the President, acting through
then Deputy Executive Secretary Catalino Macaraig,
denied petitioner's appeal for lack of merit. The Office of
the President ruled that the appeal of petitioner was
prematurely filed, the matter not having been terminated in
the MNR. Petitioner's motion for reconsideration was
denied on August 14, 1987.
Hence, petitioner filed directly with this Court a petition for
certiorari, with prayer for the issuance of a restraining
order or writ of preliminary injunction, on August 27, 1987.
On October 13, 1987, it filed a supplement to its petition
for certiorari. Thereafter, public and private respondents
submitted their respective comments, and petitioner filed
its consolidated reply thereto. In a resolution dated May
22, 1989, the Court resolved to give due course to the
petition.
After a careful study of the circumstances in the case at
bar, the Court finds several factors which militate against
the issuance of a writ of certiorari in favor of petitioner.

1. Firstly, the refusal of public respondents herein to
reverse final and executory administrative orders does not
constitute grave abuse of discretion amounting to lack or
excess of jurisdiction.
It is an established doctrine in this jurisdiction that the
decisions and orders of administrative agencies have upon
their finality, the force and binding effect of a final
judgment within the purview of the doctrine of res judicata.
These decisions and orders are as conclusive upon the
rights of the affected parties as though the same had been
rendered by a court of general jurisdiction. The rule of res
judicata thus forbids the reopening of a matter once
determined by competent authority acting within their
exclusive jurisdiction [See Brillantes v. Castro, 99 Phil. 497
(1956); Ipekdjian Merchandising Co., Inc. v. Court of Tax
Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA
72; San Luis v. Court of Appeals, G.R. No. 80160, June
26, 1989].
In the case at bar, petitioner's letters to the Office of the
President and the MNR [now the Department of
Environment and Natural Resources (DENR) dated March
17, 1986 and April 2, 1986, respectively, sought the
reconsideration of a memorandum order issued by the
Bureau of Forest Development which cancelled its timber
license agreement in 1983, as well as the revocation of
TLA No. 356 subsequently issued by the Bureau to private
respondents in 1984.
But as gleaned from the record, petitioner did not avail of
its remedies under the law, i.e. Section 8 of Pres. Dec. No.
705 as amended, for attacking the validity of these
administrative actions until after 1986. By the time
petitioner sent its letter dated April 2, 1986 to the newly
appointed Minister of the MNR requesting reconsideration
of the above Bureau actions, these were already settled
matters as far as petitioner was concerned [See Rueda v.
Court of Agrarian Relations, 106 Phil. 300 (1959); Danan
v. Aspillera G.R. No. L-17305, November 28, 1962, 6
SCRA 609; Ocampo v. Arboleda G.R. No. L-48190,
August 31, 1987, 153 SCRA 374].
No particular significance can be attached to petitioner's
letter dated September 19, 1983 which petitioner claimed
to have sent to then President Marcos [Annex "6" of
Petition, Rollo, pp. 50-53], seeking the reconsideration of
the 1983 order issued by Director Cortes of the Bureau. It
must be pointed out that the averments in this letter are
entirely different from the charges of fraud against officials
under the previous regime made by petitioner in its letters
to public respondents herein. In the letter to then President
Marcos, petitioner simply contested its inclusion in the list
of concessionaires, whose licenses were cancelled, by
defending its record of selective logging and reforestation
practices in the subject concession area. Yet, no other
administrative steps appear to have been taken by
petitioner until 1986, despite the fact that the alleged
fraudulent scheme became apparent in 1984 as evidenced
Law on NatRes (50-72 51
by the awarding of the subject timber concession area to
other entities in that year.
2. Moreover, petitioner is precluded from availing of
the benefits of a writ of certiorari in the present case
because he failed to file his petition within a reasonable
period.
The principal issue ostensibly presented for resolution in
the instant petition is whether or not public respondents
herein acted with grave abuse of discretion amounting to
lack or excess of jurisdiction in refusing to overturn
administrative orders issued by their predecessors in the
past regime. Yet, what the petition ultimately seeks is the
nullification of the Bureau orders cancelling TLA No. 87
and granting TLA No. 356 to private respondent, which
were issued way back in 1983 and 1984, respectively.
Once again, the fact that petitioner failed to seasonably
take judicial recourse to have the earlier administrative
actions reviewed by the courts through a petition for
certiorari is prejudicial to its cause. For although no
specific time frame is fixed for the institution of a special
civil action for certiorari under Rule 65 of the Revised
Rules of Court, the same must nevertheless be done
within a "reasonable time". The yardstick to measure the
timeliness of a petition for certiorari is the "reasonableness
of the length of time that had expired from the commission
of the acts complained of up to the institution of the
proceeding to annul the same" [Toledo v. Pardo, G.R. No.
56761, November 19, 1982, 118 SCRA 566, 571]. And
failure to file the petition for certiorari within a reasonable
period of time renders the petitioner susceptible to the
adverse legal consequences of laches [Municipality of
Carcar v. Court of First Instance of Cebu, G.R. No. L-
31628, December 27, 1982, 119 SCRA 392).
Laches is defined as the failure or neglect for an
unreasonable and unexplained length of time to do that
which by exercising due diligence, could or should have
been done earlier, or to assert a right within a reasonable
time, warranting a presumption that the party entitled
thereto has either abandoned it or declined to assert it
[Tijam v. Sibonghanoy, G.R. No. L-21450, April 15, 1968,
23 SCRA 29; Seno v. Mangubat, G.R. No. L-44339,
December 2, 1987, 156 SCRA 113]. The rule is that
unreasonable delay on the part of a plaintiff in seeking to
enforce an alleged right may, depending upon the
circumstances, be destructive of the right itself. Verily, the
laws aid those who are vigilant, not those who sleep upon
their rights (Vigilantibus et non dormientibus jura
subveniunt) [See Buenaventura v. David, 37 Phil. 435
(1918)].
In the case at bar, petitioner waited for at least three years
before it finally filed a petition for certiorari with the Court
attacking the validity of the assailed Bureau actions in
1983 and 1984. Considering that petitioner, throughout the
period of its inaction, was not deprived of the opportunity

to seek relief from the courts which were normally
operating at the time, its delay constitutes unreasonable
and inexcusable neglect, tantamount to laches.
Accordingly, the writ of certiorari requiring the reversal of
these orders will not lie.
3. Finally, there is a more significant factor which
bars the issuance of a writ of certiorari in favor of petitioner
and against public respondents herein. It is precisely this
for which prevents the Court from departing from the
general application of the rules enunciated above.
A cursory reading of the assailed orders issued by public
respondent Minister Maceda of the MNR which were ed by
the Office of the President, will disclose public policy
consideration which effectively forestall judicial
interference in the case at bar,
Public respondents herein, upon whose shoulders rests
the task of implementing the policy to develop and
conserve the country's natural resources, have indicated
an ongoing department evaluation of all timber license
agreements entered into, and permits or licenses issued,
under the previous dispensation. In fact, both the
executive and legislative departments of the incumbent
administration are presently taking stock of its
environmental policies with regard to the utilization of
timber lands and developing an agenda for future
programs for their conservation and rehabilitation.
The ongoing administrative reassessment is apparently in
response to the renewed and growing global concern over
the despoliation of forest lands and the utter disregard of
their crucial role in sustaining a balanced ecological
system. The legitimacy of such concern can hardly be
disputed, most especially in this country. The Court takes
judicial notice of the profligate waste of the country's forest
resources which has not only resulted in the irreversible
loss of flora and fauna peculiar to the region, but has
produced even more disastrous and lasting economic and
social effects. The delicate balance of nature having been
upset, a vicious cycle of floods and droughts has been
triggered and the supply of food and energy resources
required by the people seriously depleted.
While there is a desire to harness natural resources to
amass profit and to meet the country's immediate financial
requirements, the more essential need to ensure future
generations of Filipinos of their survival in a viable
environment demands effective and circumspect action
from the government to check further denudation of
whatever remains of the forest lands. Nothing less is
expected of the government, in view of the clear
constitutional command to maintain a balanced and
healthful ecology. Section 16 of Article II of the 1987
Constitution provides:
Law on NatRes (50-72 52
SEC. 16. The State shall protect and promote the right of
the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.
Thus, while the administration grapples with the complex
and multifarious problems caused by unbridled exploitation
of these resources, the judiciary will stand clear. A long
line of cases establish the basic rule that the courts will not
interfere in matters which are addressed to the sound
discretion of government agencies entrusted with the
regulation of activities coming under the special technical
knowledge and training of such agencies [See Espinosa v.
Makalintal, 79 Phil. 134 (1947); Coloso v. Board of
Accountancy, 92 Phil. 938 (1953); Pajo v. Ago, 108 Phil.
905 (1960); Suarez v. Reyes, G.R. No. L-19828, February
28, 1963, 7 SCRA 461; Ganitano v. Secretary of
Agriculture and Natural Resources, G. R. No. L-21167,
March 31, 1966, 16 SCRA 543; Villegas v. Auditor
General, G.R. No. L-21352, November 29, 1966, 18 SCRA
877; Manuel v. Villena, G.R. No. L-28218, February 27,
1971, 37 SCRA 745; Lacuesta v. Herrera, G.R. No. L-
33646, January 28, 1975, 62 SCRA 115; Lianga Bay
Logging Co., Inc. v. Enage, G.R. No. L-30637, July 16,
1987, 152 SCRA 80]. More so where, as in the present
case, the interests of a private logging company are pitted
against that of the public at large on the pressing public
policy issue of forest conservation. For this Court
recognizes the wide latitude of discretion possessed by
the government in determining the appropriate actions to
be taken to preserve and manage natural resources, and
the proper parties who should enjoy the privilege of
utilizing these resources [Director of Forestry v. Munoz,
G.R. No. L-24796, June 28, 1968, 23 SCRA 1183; Lim, Sr.
v. The Secretary of Agriculture and Natural Resources,
G.R. No. L-26990, August 31, 1970, 34 SCRA 751].
Timber licenses, permits and license agreements are the
principal instruments by which the State regulates the
utilization and disposition of forest resources to the end
that public welfare is promoted. And it can hardly be
gainsaid that they merely evidence a privilege granted by
the State to qualified entities, and do not vest in the latter a
permanent or irrevocable right to the particular concession
area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief
Executive when national interests so require. Thus, they
are not deemed contracts within the purview of the due
process of law clause [See Sections 3 (ee) and 20 of Pres.
Decree No. 705, as amended. Also, Tan v. Director of
Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA
302].
In fine, the legal precepts highlighted in the foregoing
discussion more than suffice to justify the Court's refusal to
interfere in the DENR evaluation of timber licenses and
permits issued under the previous regime, or to pre-empt
the adoption of appropriate corrective measures by the
department.

Nevertheless, the Court cannot help but express its
concern regarding alleged irregularities in the issuance of
timber license agreements to a number of logging
concessionaires.
The grant of licenses or permits to exploit the country's
timber resources, if done in contravention of the procedure
outlined in the law, or as a result of fraud and undue
influence exerted on department officials, is indicative of
an arbitrary and whimsical exercise of the State's power to
regulate the use and exploitation of forest resources. The
alleged practice of bestowing "special favors" to preferred
individuals, regardless of merit, would be an abuse of this
power. And this Court will not be a party to a flagrant
mockery of the avowed public policy of conservation
enshrined in the 1987 Constitution. Therefore, should the
appropriate case be brought showing a clear grave abuse
of discretion on the part of officials in the DENR and
related bureaus with respect to the implementation of this
public policy, the Court win not hesitate to step in and
wield its authority, when invoked, in the exercise of judicial
powers under the Constitution [Section 1, Article VIII].
However, petitioner having failed to make out a case
showing grave abuse of discretion on the part of public
respondents herein, the Court finds no basis to issue a writ
of certiorari and to grant any of the affirmative reliefs
sought. WHEREFORE, the present petition is
DISMISSED. SO ORDERED.
JUAN ANTONIO, ANNA ROSARIO and JOSE
ALFONSO, all surnamed OPOSA, minors, and
represented by their parents ANTONIO and RIZALINA
OPOSA, ROBERTA NICOLE SADIUA, minor,
represented by her parents CALVIN and ROBERTA
SADIUA, CARLO, AMANDA SALUD and PATRISHA, all
surnamed FLORES, minors and represented by their
parents ENRICO and NIDA FLORES, GIANINA DITA R.
FORTUN, minor, represented by her parents SIGRID
and DOLORES FORTUN, GEORGE II and MA.
CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA
MISA, BENJAMIN ALAN V. PESIGAN, minor,
represented by his parents ANTONIO and ALICE
PESIGAN, JOVIE MARIE ALFARO, minor, represented
by her parents JOSE and MARIA VIOLETA ALFARO,
MARIA CONCEPCION T. CASTRO, minor, represented
by her parents FREDENIL and JANE CASTRO,
JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA
DESAMPRADO, CARLO JOAQUIN T. NARVASA,
minor, represented by his parents GREGORIO II and
CRISTINE CHARITY NARVASA, MA. MARGARITA,
JESUS IGNACIO, MA. ANGELA and MARIE
GABRIELLE, all surnamed SAENZ, minors,
represented by their parents ROBERTO and AURORA
SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA
MARTHE and DAVID IAN, all surnamed KING, minors,
represented by their parents MARIO and HAYDEE
Law on NatRes (50-72 53
KING, DAVID, FRANCISCO and THERESE VICTORIA,
all surnamed ENDRIGA, minors, represented by their
parents BALTAZAR and TERESITA ENDRIGA, JOSE
MA. and REGINA MA., all surnamed ABAYA, minors,
represented by their parents ANTONIO and MARICA
ABAYA, MARILIN, MARIO, JR. and MARIETTE, all
surnamed CARDAMA, minors, represented by their
parents MARIO and LINA CARDAMA, CLARISSA, ANN
MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA,
minors and represented by their parents RICARDO
and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN
JOHN and ISAIAH JAMES, all surnamed QUIPIT,
minors, represented by their parents JOSE MAX and
VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA,
DANIEL and FRANCISCO, all surnamed BIBAL,
minors, represented by their parents FRANCISCO, JR.
and MILAGROS BIBAL, and THE PHILIPPINE
ECOLOGICAL NETWORK, INC., petitioners, vs. THE
HONORABLE FULGENCIO S. FACTORAN, JR., in his
capacity as the Secretary of the Department of
Environment and Natural Resources, and THE
HONORABLE ERIBERTO U. ROSARIO, Presiding
Judge of the RTC, Makati, Branch 66, respondents.;
G.R. No. 101083 July 30, 1993
In a broader sense, this petition bears upon the right of
Filipinos to a balanced and healthful ecology which the
petitioners dramatically associate with the twin concepts of
"inter-generational responsibility" and "inter-generational
justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the
misappropriation or impairment" of Philippine rainforests
and "arrest the unabated hemorrhage of the country's vital
life support systems and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77
which was filed before Branch 66 (Makati, Metro Manila) of
the Regional Trial Court (RTC), National Capital Judicial
Region. The principal plaintiffs therein, now the principal
petitioners, are all minors duly represented and joined by
their respective parents. Impleaded as an additional
plaintiff is the Philippine Ecological Network, Inc. (PENI), a
domestic, non-stock and non-profit corporation organized
for the purpose of, inter alia, engaging in concerted action
geared for the protection of our environment and natural
resources. The original defendant was the Honorable
Fulgencio S. Factoran, Jr., then Secretary of the
Department of Environment and Natural Resources
(DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was
subsequently ordered upon proper motion by the
petitioners. 1 The complaint 2 was instituted as a
taxpayers' class suit 3 and alleges that the plaintiffs "are
all citizens of the Republic of the Philippines, taxpayers,
and entitled to the full benefit, use and enjoyment of the
natural resource treasure that is the country's virgin
tropical forests." The same was filed for themselves and
others who are equally concerned about the preservation
of said resource but are "so numerous that it is

impracticable to bring them all before the Court." The
minors further asseverate that they "represent their
generation as well as generations yet unborn." 4
Consequently, it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and
other persons acting in his behalf to
(1) Cancel all existing timber license agreements in
the country;
(2) Cease and desist from receiving, accepting,
processing, renewing or approving new timber license
agreements.
and granting the plaintiffs ". . . such other reliefs just and
equitable under the premises." 5
The complaint starts off with the general averments that
the Philippine archipelago of 7,100 islands has a land area
of thirty million (30,000,000) hectares and is endowed with
rich, lush and verdant rainforests in which varied, rare and
unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool
which is irreplaceable; they are also the habitat of
indigenous Philippine cultures which have existed,
endured and flourished since time immemorial; scientific
evidence reveals that in order to maintain a balanced and
healthful ecology, the country's land area should be
utilized on the basis of a ratio of fifty-four per cent (54%)
for forest cover and forty-six per cent (46%) for
agricultural, residential, industrial, commercial and other
uses; the distortion and disturbance of this balance as a
consequence of deforestation have resulted in a host of
environmental tragedies, such as (a) water shortages
resulting from drying up of the water table, otherwise
known as the "aquifer," as well as of rivers, brooks and
streams, (b) salinization of the water table as a result of
the intrusion therein of salt water, incontrovertible
examples of which may be found in the island of Cebu and
the Municipality of Bacoor, Cavite, (c) massive erosion and
the consequential loss of soil fertility and agricultural
productivity, with the volume of soil eroded estimated at
one billion (1,000,000,000) cubic meters per annum
approximately the size of the entire island of Catanduanes,
(d) the endangering and extinction of the country's unique,
rare and varied flora and fauna, (e) the disturbance and
dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the
siltation of rivers and seabeds and consequential
destruction of corals and other aquatic life leading to a
critical reduction in marine resource productivity, (g)
recurrent spells of drought as is presently experienced by
the entire country, (h) increasing velocity of typhoon winds
which result from the absence of windbreakers, (i) the
floodings of lowlands and agricultural plains arising from
the absence of the absorbent mechanism of forests, (j) the
siltation and shortening of the lifespan of multi-billion peso
dams constructed and operated for the purpose of
Law on NatRes (50-72 54
supplying water for domestic uses, irrigation and the
generation of electric power, and (k) the reduction of the
earth's capacity to process carbon dioxide gases which
has led to perplexing and catastrophic climatic changes
such as the phenomenon of global warming, otherwise
known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental
consequences of continued and deforestation are so
capable of unquestionable demonstration that the same
may be submitted as a matter of judicial notice. This
notwithstanding, they expressed their intention to present
expert witnesses as well as documentary, photographic
and film evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing
allegations.
8. Twenty-five (25) years ago, the Philippines had
some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there
remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land
area.
10. More recent surveys reveal that a mere 850,000
hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and
uneconomical secondary growth forests.
11. Public records reveal that the defendant's,
predecessors have granted timber license agreements
('TLA's') to various corporations to cut the aggregate area
of 3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas
covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about
200,000 hectares per annum or 25 hectares per hour
nighttime, Saturdays, Sundays and holidays included
the Philippines will be bereft of forest resources after the
end of this ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences,
serious injury and irreparable damage of this continued
trend of deforestation to the plaintiff minor's generation
and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental
damages enumerated in paragraph 6 hereof are already
being felt, experienced and suffered by the generation of
plaintiff adults.

14. The continued allowance by defendant of TLA
holders to cut and deforest the remaining forest stands will
work great damage and irreparable injury to plaintiffs
especially plaintiff minors and their successors who
may never see, use, benefit from and enjoy this rare and
unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or
impairment of the natural resource property he holds in
trust for the benefit of plaintiff minors and succeeding
generations.
15. Plaintiffs have a clear and constitutional right to a
balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens
patriae.
16. Plaintiff have exhausted all administrative
remedies with the defendant's office. On March 2, 1990,
plaintiffs served upon defendant a final demand to cancel
all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is
hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel
the existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to
cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a
country that is desertified (sic), bare, barren and devoid of
the wonderful flora, fauna and indigenous cultures which
the Philippines had been abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned
TLA's is manifestly contrary to the public policy enunciated
in the Philippine Environmental Policy which, in pertinent
part, states that it is the policy of the State
(a) to create, develop, maintain and improve
conditions under which man and nature can thrive in
productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos
and;
(c) to ensure the attainment of an environmental
quality that is conductive to a life of dignity and well-being.
(P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to
cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to
Law on NatRes (50-72 55
a. effect "a more equitable distribution of
opportunities, income and wealth" and "make full and
efficient use of natural resources (sic)." (Section 1, Article
XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2,
ibid);
c. "conserve and promote the nation's cultural
heritage and resources (sic)" (Section 14, Article XIV, id.);
d. "protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm
and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest
law of humankind the natural law and violative of
plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate
remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life support
systems and continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary
Factoran, Jr., filed a Motion to Dismiss the complaint
based on two (2) grounds, namely: (1) the plaintiffs have
no cause of action against him and (2) the issue raised by
the plaintiffs is a political question which properly pertains
to the legislative or executive branches of Government. In
their 12 July 1990 Opposition to the Motion, the petitioners
maintain that (1) the complaint shows a clear and
unmistakable cause of action, (2) the motion is dilatory
and (3) the action presents a justiciable question as it
involves the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order
granting the aforementioned motion to dismiss. 7 In the
said order, not only was the defendant's claim that the
complaint states no cause of action against him and that it
raises a political question sustained, the respondent
Judge further ruled that the granting of the relief prayed for
would result in the impairment of contracts which is
prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for
certiorari under Rule 65 of the Revised Rules of Court and
ask this Court to rescind and set aside the dismissal order
on the ground that the respondent Judge gravely abused
his discretion in dismissing the action. Again, the parents
of the plaintiffs-minors not only represent their children, but
have also joined the latter in this case. 8
On 14 May 1992, We resolved to give due course to the
petition and required the parties to submit their respective
Memoranda after the Office of the Solicitor General (OSG)
filed a Comment in behalf of the respondents and the
petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and
unmistakably states a cause of action as it contains
sufficient allegations concerning their right to a sound
environment based on Articles 19, 20 and 21 of the Civil
Code (Human Relations), Section 4 of Executive Order
(E.O.) No. 192 creating the DENR, Section 3 of
Presidential Decree (P.D.) No. 1151 (Philippine
Environmental Policy), Section 16, Article II of the 1987
Constitution recognizing the right of the people to a
balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of
man's inalienable right to self-preservation and self-
perpetuation embodied in natural law. Petitioners likewise
rely on the respondent's correlative obligation per Section
4 of E.O. No. 192, to safeguard the people's right to a
healthful environment.
It is further claimed that the issue of the respondent
Secretary's alleged grave abuse of discretion in granting
Timber License Agreements (TLAs) to cover more areas
for logging than what is available involves a judicial
question.
Anent the invocation by the respondent Judge of the
Constitution's non-impairment clause, petitioners maintain
that the same does not apply in this case because TLAs
are not contracts. They likewise submit that even if TLAs
may be considered protected by the said clause, it is well
settled that they may still be revoked by the State when
the public interest so requires.
On the other hand, the respondents aver that the
petitioners failed to allege in their complaint a specific legal
right violated by the respondent Secretary for which any
relief is provided by law. They see nothing in the complaint
but vague and nebulous allegations concerning an
"environmental right" which supposedly entitles the
petitioners to the "protection by the state in its capacity as
parens patriae." Such allegations, according to them, do
not reveal a valid cause of action. They then reiterate the
theory that the question of whether logging should be
permitted in the country is a political question which should
be properly addressed to the executive or legislative
branches of Government. They therefore assert that the
petitioners' resources is not to file an action to court, but to
lobby before Congress for the passage of a bill that would
ban logging totally.
As to the matter of the cancellation of the TLAs,
respondents submit that the same cannot be done by the
State without due process of law. Once issued, a TLA
remains effective for a certain period of time usually for
twenty-five (25) years. During its effectivity, the same can
neither be revised nor cancelled unless the holder has
been found, after due notice and hearing, to have violated
the terms of the agreement or other forestry laws and
regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing
would be violative of the requirements of due process.
Law on NatRes (50-72 56
Before going any further, We must first focus on some
procedural matters. Petitioners instituted Civil Case No.
90-777 as a class suit. The original defendant and the
present respondents did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is
indeed a class suit. The subject matter of the complaint is
of common and general interest not just to several, but to
all citizens of the Philippines. Consequently, since the
parties are so numerous, it, becomes impracticable, if not
totally impossible, to bring all of them before the court. We
likewise declare that the plaintiffs therein are numerous
and representative enough to ensure the full protection of
all concerned interests. Hence, all the requisites for the
filing of a valid class suit under Section 12, Rule 3 of the
Revised Rules of Court are present both in the said civil
case and in the instant petition, the latter being but an
incident to the former.
This case, however, has a special and novel element.
Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find no
difficulty in ruling that they can, for themselves, for others
of their generation and for the succeeding generations, file
a class suit. Their personality to sue in behalf of the
succeeding generations can only be based on the concept
of intergenerational responsibility insofar as the right to a
balanced and healthful ecology is concerned. Such a right,
as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the
created world in its entirety. 9 Such rhythm and harmony
indispensably include, inter alia, the judicious disposition,
utilization, management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries, wildlife,
off-shore areas and other natural resources to the end that
their exploration, development and utilization be equitably
accessible to the present as well as future generations. 10
Needless to say, every generation has a responsibility to
the next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little
differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the
performance of their obligation to ensure the protection of
that right for the generations to come.
The locus standi of the petitioners having thus been
addressed, We shall now proceed to the merits of the
petition.
After a careful perusal of the complaint in question and a
meticulous consideration and evaluation of the issues
raised and arguments adduced by the parties, We do not
hesitate to find for the petitioners and rule against the
respondent Judge's challenged order for having been
issued with grave abuse of discretion amounting to lack of
jurisdiction. The pertinent portions of the said order reads
as follows:
xxx xxx xxx

After a careful and circumspect evaluation of the
Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but
the noblest of all intentions, it (sic) fell short of alleging,
with sufficient definiteness, a specific legal right they are
seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2,
RRC). Furthermore, the Court notes that the Complaint is
replete with vague assumptions and vague conclusions
based on unverified data. In fine, plaintiffs fail to state a
cause of action in its Complaint against the herein
defendant.
Furthermore, the Court firmly believes that the matter
before it, being impressed with political color and involving
a matter of public policy, may not be taken cognizance of
by this Court without doing violence to the sacred principle
of "Separation of Powers" of the three (3) co-equal
branches of the Government.
The Court is likewise of the impression that it cannot, no
matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist
from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 11
We do not agree with the trial court's conclusions that the
plaintiffs failed to allege with sufficient definiteness a
specific legal right involved or a specific legal wrong
committed, and that the complaint is replete with vague
assumptions and conclusions based on unverified data. A
reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal
right the right to a balanced and healthful ecology
which, for the first time in our nation's constitutional
history, is solemnly incorporated in the fundamental law.
Section 16, Article II of the 1987 Constitution explicitly
provides:
Sec. 16. The State shall protect and advance the right of
the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.
This right unites with the right to health which is provided
for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to
health of the people and instill health consciousness
among them.
While the right to a balanced and healthful ecology is to be
found under the Declaration of Principles and State
Policies and not under the Bill of Rights, it does not follow
that it is less important than any of the civil and political
Law on NatRes (50-72 57
rights enumerated in the latter. Such a right belongs to a
different category of rights altogether for it concerns
nothing less than self-preservation and self-perpetuation
aptly and fittingly stressed by the petitioners the
advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these
basic rights need not even be written in the Constitution for
they are assumed to exist from the inception of
humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear
of its framers that unless the rights to a balanced and
healthful ecology and to health are mandated as state
policies by the Constitution itself, thereby highlighting their
continuing importance and imposing upon the state a
solemn obligation to preserve the first and protect and
advance the second, the day would not be too far when all
else would be lost not only for the present generation, but
also for those to come generations which stand to
inherit nothing but parched earth incapable of sustaining
life.
The right to a balanced and healthful ecology carries with
it the correlative duty to refrain from impairing the
environment. During the debates on this right in one of the
plenary sessions of the 1986 Constitutional Commission,
the following exchange transpired between Commissioner
Wilfrido Villacorta and Commissioner Adolfo Azcuna who
sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions
against all forms of pollution air, water and noise
pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic)
environment necessarily carries with it the correlative duty
of not impairing the same and, therefore, sanctions may
be provided for impairment of environmental balance. 12
The said right implies, among many other things, the
judicious management and conservation of the country's
forests.
Without such forests, the ecological or environmental
balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and
healthful ecology and the right to health, as well as the
other related provisions of the Constitution concerning the
conservation, development and utilization of the country's
natural resources, 13 then President Corazon C. Aquino
promulgated on 10 June 1987 E.O. No. 192, 14 Section 4
of which expressly mandates that the Department of
Environment and Natural Resources "shall be the primary
government agency responsible for the conservation,
management, development and proper use of the

country's environment and natural resources, specifically
forest and grazing lands, mineral, resources, including
those in reservation and watershed areas, and lands of the
public domain, as well as the licensing and regulation of all
natural resources as may be provided for by law in order
to ensure equitable sharing of the benefits derived
therefrom for the welfare of the present and future
generations of Filipinos." Section 3 thereof makes the
following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the
policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of
the country's forest, mineral, land, off-shore areas and
other natural resources, including the protection and
enhancement of the quality of the environment, and
equitable access of the different segments of the
population to the development and the use of the country's
natural resources, not only for the present generation but
for future generations as well. It is also the policy of the
state to recognize and apply a true value system including
social and environmental cost implications relative to their
utilization, development and conservation of our natural
resources.
This policy declaration is substantially re-stated it Title XIV,
Book IV of the Administrative Code of 1987, 15 specifically
in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. (1) The State shall
ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious
disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural
resources, consistent with the necessity of maintaining a
sound ecological balance and protecting and enhancing
the quality of the environment and the objective of making
the exploration, development and utilization of such
natural resources equitably accessible to the different
segments of the present as well as future generations.
(2) The State shall likewise recognize and apply a
true value system that takes into account social and
environmental cost implications relative to the utilization,
development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining
a sound ecological balance and protecting and enhancing
the quality of the environment." Section 2 of the same
Title, on the other hand, specifically speaks of the
mandate of the DENR; however, it makes particular
reference to the fact of the agency's being subject to law
and higher authority. Said section provides:
Sec. 2. Mandate. (1) The Department of Environment
and Natural Resources shall be primarily responsible for
the implementation of the foregoing policy.
Law on NatRes (50-72 58
(2) It shall, subject to law and higher authority, be in
charge of carrying out the State's constitutional mandate
to control and supervise the exploration, development,
utilization, and conservation of the country's natural
resources.
Both E.O. NO. 192 and the Administrative Code of 1987
have set the objectives which will serve as the bases for
policy formulation, and have defined the powers and
functions of the DENR.
It may, however, be recalled that even before the
ratification of the 1987 Constitution, specific statutes
already paid special attention to the "environmental right"
of the present and future generations. On 6 June 1977,
P.D. No. 1151 (Philippine Environmental Policy) and P.D.
No. 1152 (Philippine Environment Code) were issued. The
former "declared a continuing policy of the State (a) to
create, develop, maintain and improve conditions under
which man and nature can thrive in productive and
enjoyable harmony with each other, (b) to fulfill the social,
economic and other requirements of present and future
generations of Filipinos, and (c) to insure the attainment of
an environmental quality that is conducive to a life of
dignity and well-being." 16 As its goal, it speaks of the
"responsibilities of each generation as trustee and
guardian of the environment for succeeding generations."
17 The latter statute, on the other hand, gave flesh to the
said policy.
Thus, the right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as clear
as the DENR's duty under its mandate and by virtue of
its powers and functions under E.O. No. 192 and the
Administrative Code of 1987 to protect and advance the
said right.
A denial or violation of that right by the other who has the
corelative duty or obligation to respect or protect the same
gives rise to a cause of action. Petitioners maintain that
the granting of the TLAs, which they claim was done with
grave abuse of discretion, violated their right to a balanced
and healthful ecology; hence, the full protection thereof
requires that no further TLAs should be renewed or
granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal
right or rights of the other; and its essential elements are
legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in
violation of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss
based on the ground that the complaint fails to state a
cause of action, 19 the question submitted to the court for
resolution involves the sufficiency of the facts alleged in
the complaint itself. No other matter should be considered;

furthermore, the truth of falsity of the said allegations is
beside the point for the truth thereof is deemed
hypothetically admitted. The only issue to be resolved in
such a case is: admitting such alleged facts to be true,
may the court render a valid judgment in accordance with
the prayer in the complaint? 20 In Militante vs. Edrosolano,
21 this Court laid down the rule that the judiciary should
"exercise the utmost care and circumspection in passing
upon a motion to dismiss on the ground of the absence
thereof [cause of action] lest, by its failure to manifest a
correct appreciation of the facts alleged and deemed
hypothetically admitted, what the law grants or recognizes
is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We
find the statements under the introductory affirmative
allegations, as well as the specific averments under the
sub-heading CAUSE OF ACTION, to be adequate enough
to show, prima facie, the claimed violation of their rights.
On the basis thereof, they may thus be granted, wholly or
partly, the reliefs prayed for. It bears stressing, however,
that insofar as the cancellation of the TLAs is concerned,
there is the need to implead, as party defendants, the
grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said
to raise a political question. Policy formulation or
determination by the executive or legislative branches of
Government is not squarely put in issue. What is
principally involved is the enforcement of a right vis-a-vis
policies already formulated and expressed in legislation. It
must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable
obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative
actions from judicial inquiry or review. The second
paragraph of section 1, Article VIII of the Constitution
states that:
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.
Commenting on this provision in his book, Philippine
Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:
The first part of the authority represents the traditional
concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to
enable the courts of justice to review what was before
forbidden territory, to wit, the discretion of the political
departments of the government.
Law on NatRes (50-72 59
As worded, the new provision vests in the judiciary, and
particularly the Supreme Court, the power to rule upon
even the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or
excess of jurisdiction because tainted with grave abuse of
discretion. The catch, of course, is the meaning of "grave
abuse of discretion," which is a very elastic phrase that
can expand or contract according to the disposition of the
judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking
for this Court, noted:
In the case now before us, the jurisdictional objection
becomes even less tenable and decisive. The reason is
that, even if we were to assume that the issue presented
before us was political in nature, we would still not be
precluded from revolving it under the expanded jurisdiction
conferred upon us that now covers, in proper cases, even
the political question. Article VII, Section 1, of the
Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the
complaint is the non-impairment of contracts clause found
in the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no
matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist
from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 24
We are not persuaded at all; on the contrary, We are
amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent
Secretary did not, for obvious reasons, even invoke in his
motion to dismiss the non-impairment clause. If he had
done so, he would have acted with utmost infidelity to the
Government by providing undue and unwarranted benefits
and advantages to the timber license holders because he
would have forever bound the Government to strictly
respect the said licenses according to their terms and
conditions regardless of changes in policy and the
demands of public interest and welfare. He was aware that
as correctly pointed out by the petitioners, into every
timber license must be read Section 20 of the Forestry
Reform Code (P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires,
the President may amend, modify, replace or rescind any
contract, concession, permit, licenses or any other form of
privilege granted herein . . .
Needless to say, all licenses may thus be revoked or
rescinded by executive action. It is not a contract, property
or a property right protested by the due process clause of

the Constitution. In Tan vs. Director of Forestry, 25 this
Court held:
. . . A timber license is an instrument by which the State
regulates the utilization and disposition of forest resources
to the end that public welfare is promoted. A timber license
is not a contract within the purview of the due process
clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public
welfare as in this case.
A license is merely a permit or privilege to do what
otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal, granting
it and the person to whom it is granted; neither is it
property or a property right, nor does it create a vested
right; nor is it taxation (37 C.J. 168). Thus, this Court held
that the granting of license does not create irrevocable
rights, neither is it property or property rights (People vs.
Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. &
Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are
the principal instruments by which the State regulates the
utilization and disposition of forest resources to the end
that public welfare is promoted. And it can hardly be
gainsaid that they merely evidence a privilege granted by
the State to qualified entities, and do not vest in the latter a
permanent or irrevocable right to the particular concession
area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief
Executive when national interests so require. Thus, they
are not deemed contracts within the purview of the due
process of law clause [See Sections 3(ee) and 20 of Pres.
Decree No. 705, as amended. Also, Tan v. Director of
Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA
302].
Since timber licenses are not contracts, the non-
impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall
be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that the
same are contracts, the instant case does not involve a
law or even an executive issuance declaring the
cancellation or modification of existing timber licenses.
Hence, the non-impairment clause cannot as yet be
invoked. Nevertheless, granting further that a law has
actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a
violation of the non-impairment clause. This is because by
its very nature and purpose, such as law could have only
been passed in the exercise of the police power of the
Law on NatRes (50-72 60
state for the purpose of advancing the right of the people
to a balanced and healthful ecology, promoting their health
and enhancing the general welfare. In Abe vs. Foster
Wheeler Corp. 28 this Court stated:
The freedom of contract, under our system of government,
is not meant to be absolute. The same is understood to be
subject to reasonable legislative regulation aimed at the
promotion of public health, moral, safety and welfare. In
other words, the constitutional guaranty of non-impairment
of obligations of contract is limited by the exercise of the
police power of the State, in the interest of public health,
safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs.
New York, 29 quoted in Philippine American Life
Insurance Co. vs. Auditor General, 30 to wit:
Under our form of government the use of property and the
making of contracts are normally matters of private and
not of public concern. The general rule is that both shall be
free of governmental interference. But neither property
rights nor contract rights are absolute; for government
cannot exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of
contract to work them harm. Equally fundamental with the
private right is that of the public to regulate it in the
common interest.
In short, the non-impairment clause must yield to the
police power of the state. 31
Finally, it is difficult to imagine, as the trial court did, how
the non-impairment clause could apply with respect to the
prayer to enjoin the respondent Secretary from receiving,
accepting, processing, renewing or approving new timber
licenses for, save in cases of renewal, no contract would
have as of yet existed in the other instances. Moreover,
with respect to renewal, the holder is not entitled to it as a
matter of right.
WHEREFORE, being impressed with merit, the instant
Petition is hereby GRANTED, and the challenged Order of
respondent Judge of 18 July 1991 dismissing Civil Case
No. 90-777 is hereby set aside. The petitioners may
therefore amend their complaint to implead as defendants
the holders or grantees of the questioned timber license
agreements. No pronouncement as to costs. SO
ORDERED.
MUSTANG LUMBER, INC., petitioner, vs. HON. COURT
OF APPEALS, HON. FULGENCIO S. FACTORAN, JR.,
Secretary, Department of Environment and Natural
Resources (DENR), and ATTY. VINCENT A. ROBLES,
Chief, Special Actions and Investigation Division,
DENR, respondents.; [G.R. No. 104988. June 18, 1996]
The first and third cases, G.R. No. 104988 and G.R. No.
123784, were originally assigned to the Second and Third
Divisions of the Court, respectively. They were

subsequently consolidated with the second, a case of the
Court en banc.
Petitioner, a domestic corporation with principal office at
Nos. 1350-1352 Juan Luna Street, Tondo, Manila, and
with a lumberyard at Fortune Street, Fortune Village,
Paseo de Blas, Valenzuela, Metro Manila, was duly
registered as a lumber dealer with the Bureau of Forest
Development (BFD) under Certificate of Registration No.
NRD-4-092590-0469. Its permit as such was to expire on
25 September 1990.
Respondent Secretary Fulgencio S. Factoran, Jr., and
respondent Atty. Vincent A. Robles were, during all the
time material to these cases, the Secretary of the
Department of Environment and Natural Resources
(DENR) and the Chief of the Special Actions and
Investigation Division (SAID) of the DENR, respectively.
The material operative facts are as follows:
On 1 April 1990, acting on an information that a huge
stockpile of narra flitches, shorts, and slabs were seen
inside the lumberyard of the petitioner in Valenzuela,
Metro Manila, the SAID organized a team of foresters and
policemen and sent it to conduct surveillance at the said
lumberyard. In the course thereof, the team members saw
coming out from the lumberyard the petitioner's truck, with
Plate No. CCK-322, loaded with lauan and almaciga
lumber of assorted sizes and dimensions. Since the driver
could not produce the required invoices and transport
documents, the team seized the truck together with its
cargo and impounded them at the DENR compound at
Visayas Avenue, Quezon City.[1] The team was not able
to gain entry into the premises because of the refusal of
the owner.[2]
On 3 April 1990, the team was able to secure a search
warrant from Executive Judge Adriano R. Osorio of the
Regional Trial Court (RTC) of Valenzuela, Metro Manila.
By virtue thereof, the team seized on that date from the
petitioners lumberyard four truckloads of narra shorts,
trimmings, and slabs; a negligible number of narra lumber;
and approximately 200,000 board feet of lumber and
shorts of various species including almaciga and supa.[3]
On 4 April 1990, the team returned to the premises of the
petitioner 's lumberyard in Valenzuela and placed under
administrative seizure the remaining stockpile of almaciga,
supa, and lauan lumber with a total volume of 311,000
board feet because the petitioner failed to produce upon
demand the corresponding certificate of lumber origin,
auxiliary invoices, tally sheets, and delivery receipts from
the source of the invoices covering the lumber to prove the
legitimacy of their source and origin.[4]
Parenthetically, it may be stated that under an
administrative seizure the owner retains the physical
possession of the seized articles. Only an inventory of the
Law on NatRes (50-72 61
articles is taken and signed by the owner or his
representative. The owner is prohibited from disposing
them until further orders.[5]
On 10 April 1990, counsel for the petitioner sent a letter to
Robles requesting an extension of fifteen days from 14
April 1990 to produce the required documents covering the
seized articles because some of them, particularly the
certificate of lumber origin, were allegedly in the Province
of Quirino. Robles denied the motion on the ground that
the documents being required from the petitioner must
accompany the lumber or forest products placed under
seizure.[6]
On 11 April 1990, Robles submitted his memorandum-
report recommending to Secretary Factoran the following:
1. Suspension and subsequent cancellation of the lumber
Dealer's Permit of Mustang Lumber, Inc. for operating an
unregistered lumberyard and resaw mill and possession of
Almaciga Lumber (a banned specie) without the required
documents;
2. Confiscation of the lumber seized at the Mustang
Lumberyard including the truck with Plate No. CCK-322
and the lumber loaded herein [sic] now at the DENR
compound in the event its owner fails to submit documents
showing legitimacy of the source of said lumber within ten
days from date of seizure;
3. Filing of criminal charges against Mr. Ri Chuy Po, owner
of Mustang Lumber Inc. and Mr. Ruiz, or if the
circumstances warrant for illegal possession of narra and
almaciga lumber and shorts if and when recommendation
no. 2 pushes through;
4. Confiscation of Trucks with Plate No. CCS-639 and
CDV-458 as well as the lumber loaded therein for
transport lumber using recycled documents.[7]
On 23 April 1990, Secretary Factoran issued an order
suspending immediately the petitioner's lumber-dealer's
permit No. NRD-4-092590-0469 and directing the
petitioner to explain in writing within fifteen days why its
lumber-dealer's permit should not be cancelled.
On the same date, counsel for the petitioner sent another
letter to Robles informing the latter that the petitioner had
already secured the required documents and was ready to
submit them. None, however, was submitted.[8]
On 3 May 1990, Secretary Factoran issued another order
wherein, after reciting the events which took place on 1
April and 3 April 1990, he ordered CONFISCATED in favor
of the government to be disposed of in accordance with
law the approximately 311,000 board feet of lauan, supa,
and almaciga lumber, shorts, and sticks found inside the
petitioner's lumberyard.[9]

On 11 July 1990, the petitioner filed with the RTC of
Manila a petition for certiorari and prohibition with a prayer
for a restraining order or preliminary injunction against
Secretary Fulgencio S. Factoran, Jr., and Atty. Vincent A.
Robles. The case (hereinafter, the FIRST CIVIL CASE)
was docketed as Civil Case No. 90-53648 and assigned to
Branch 35 o the said court. The petitioner questioned
therein (a) the seizure on 1 April 1990, without any search
and seizure order issued by a judge, of its truck with Plate
No. CCK-322 and its cargo of assorted lumber consisting
of apitong, tanguile, and lauan of different sizes and
dimensions with a total value of P38,000.00; and (b) the
orders of Secretary Factoran of 23 April 1990 for lack of
prior notice and hearing and of 3 May 1990 for violation of
Section 2, Article III of the Constitution.
On 17 September 1990, in response to reports that
violations of P.D. No. 705 (The Revised Forestry Code of
the Philippines), as amended, were committed and acting
upon instruction of Robles and under Special Order No.
897, series of 1990, a team of DENR agents went to the
business premises of the petitioner located at No. 1352
Juan Luna Street, Tondo, Manila. The team caught the
petitioner operating as a lumber dealer although its
lumber-dealer's permit had already been suspended on 23
April 1990. Since the gate of the petitioner's lumberyard
was open, the team went inside and saw an owner-type
jeep with a trailer loaded with lumber. Upon investigation,
the team was informed that the lumber loaded on the
trailer was to be delivered to the petitioner's customer. It
also came upon the sales invoice covering the transaction.
The members of the team then introduced themselves to
the caretaker, one Ms. Chua, who turned out to be the wife
of the petitioner's president and general manager, Mr. Ri
Chuy Po, who was then out of town. The team's
photographer was able to take photographs of the
stockpiles of lumber including newly cut ones, fresh dust
around sawing or cutting machineries and equipment, and
the transport vehicles loaded with lumber. The team
thereupon effected a constructive seizure of approximately
20,000 board feet of lauan lumber in assorted sizes
stockpiled in the premises by issuing a receipt therefor.[10]
As a consequence of this 17 September 1990 incident, the
petitioner filed with the RTC of Manila a petition for
certiorari and prohibition. The case (hereinafter, the
SECOND CIVIL CASE) was docketed as Civil Case No.
90-54610 and assigned to Branch 24 of the said court.
In the meantime, Robles filed with the Department of
Justice (DOJ) a complaint against the petitioner's
president and general manager, Ri Chuy Po, for violation
of Section 68 of P.D. No. 705, as amended by E.O. No.
277. After appropriate preliminary investigation, the
investigating prosecutor, Claro Arellano, handed down a
resolution[11] whose dispositive portion reads:
WHEREFORE, premises considered, it is hereby
recommended that an information be filed against
Law on NatRes (50-72 62
respondent Ri Chuy Po for illegal possession of
approximately 200,000 bd. ft. of lumber consisting of
almaciga and supa and for illegal shipment of almaciga
and lauan in violation of Sec. 68 of PD 705 as amended by
E.O. 277, series of 1987.
It is further recommended that the 30,000 bd. ft. of narra
shorts, trimmings and slabs covered by legal documents
be released to the rightful owner, Malupa.[12]
This resolution was approved by Undersecretary of Justice
Silvestre H. Bello, III, who served as Chairman of the Task
Force on Illegal Logging.[13]
On the basis of that resolution, an information was filed on
5 June 1991 by the DOJ with Branch 172 of the RTC of
Valenzuela, charging Ri Chuy Po with the violation of
Section 68 of P.D. No. 705, as amended, which was
docketed as Criminal Case No. 324-V-91 (hereinafter, the
CRIMINAL CASE). The accusatory portion of the
information reads as follows:
That on or about the 3rd day of April 1990, or prior to or
subsequent thereto, within the premises and vicinity of
Mustang Lumber, Inc. in Fortune Village, Valenzuela,
Metro Manila, and within the jurisdiction of this Honorable
Court, the above-named accused, did then and there
wilfully, feloniously and unlawfully, have in his possession
truckloads of almaciga and lauan and approximately
200,000 bd. ft. of lumber and shorts of various species
including almaciga and supa, without the legal documents
as required under existing forest laws and regulations.[14]
On 7 June 1991, Branch 35 of the RTC of Manila rendered
its decision[15] in the FIRST CIVIL CASE, the dispositive
portion of which reads:
WHEREFORE, judgment in this case is rendered as
follows:
1. The Order of Respondent Secretary of the DENR, the
Honorable Fulgencio S. Factoran, Jr., dated 3 May 1990
ordering the confiscation in favor of the Government the
approximately 311,000 board feet of lauan, supa, and
almaciga lumber, shorts and sticks, found inside and
seized from the lumberyard of the petitioner at Fortune
Drive, Fortune Village, Paseo de Blas, Valenzuela, Metro
Manila, on April 4, 1990 (Exhibit 10), is hereby set aside
and vacated, and instead the respondents are required to
report and bring to the Hon. Adriano Osorio, Executive
Judge, Regional Trial Court, NCJR, Valenzuela, Metro
Manila, the said 311,000 board feet of Lauan, supa and
almaciga Lumber, shorts and sticks, to be dealt with as
directed by law;
2. The respondents are required to initiate and prosecute
the appropriate action before the proper court regarding
the lauan and almaciga lumber of assorted sizes and

dimensions loaded in petitioner's truck bearing Plate No.
CCK-322 which were seized on April 1, 1990;
3. The Writ of Preliminary Injunction issued by the Court
on August 2, 1990 shall be rendered functus oficio upon
compliance by the respondents with paragraphs 1 and 2 of
this judgment;
4. Action on the prayer of the petitioner that the lauan,
supa and almaciga lumber, shorts and sticks mentioned
above in paragraphs 1 and 2 of this judgment be returned
to said petitioner, is withheld in this case until after the
proper court has taken cognizance and determined how
those lumber, shorts and sticks should be disposed of; and
5. The petitioner is ordered to pay the costs.
SO ORDERED.
In resolving the said case, the trial court held that the
warrantless search and seizure on 1 April 1990 of the
petitioner's truck, which was moving out from the
petitioner's lumberyard in Valenzuela, Metro Manila,
loaded with large volumes of lumber without covering
document showing the legitimacy of its source or origin did
not offend the constitutional mandate that search and
seizure must be supported by a valid warrant. The
situation fell under one of the settled and accepted
exceptions where warrantless search and seizure is
justified, viz., a search of a moving vehicle.[16] As to the
seizure of a large volume of almaciga, supa, and lauan
lumber and shorts effected on 4 April 1990, the trial court
ruled that the said seizure was a continuation of that made
the previous day and was still pursuant to or by virtue of
the search warrant issued by Executive Judge Osorio
whose validity the petitioner did not even question.[17]
And, although the search warrant did not specifically
mention almaciga, supa, and lauan lumber and shorts,
their seizure was valid because it is settled that the
executing officer is not required to ignore contrabands
observed during the conduct of the search.[18]
The trial court, however, set aside Secretary Factoran's
order of 3 May 1990 ordering the confiscation of the
seized articles in favor of the Government for the reason
that since the articles were seized pursuant to the search
warrant issued by Executive Judge Osorio they should
have been returned to him in compliance with the directive
in the warrant.
As to the propriety of the 23 April 1990 order of Secretary
Factoran, the trial court ruled that the same had been
rendered moot and academic by the expiration of the
petitioner's lumber-dealer's permit on 25 September 1990,
a fact the petitioner admitted in its memorandum.
The petitioner forthwith appealed from the decision in the
FIRST CIVIL CASE to the Court of Appeals, which
docketed the appeal as CA-G.R. SP No. 25510.
Law on NatRes (50-72 63
On 7 July 1991, accused Ri Chuy Po filed in the
CRIMINAL CASE a Motion to Quash and/or to Suspend
Proceedings based on the following grounds: (a) the
information does not charge an offense, for possession of
lumber, as opposed to timber, is not penalized in Section
68 of P.D. No. 705, as amended, and even granting
arguendo that lumber falls within the purview of the said
section, the same may not be used in evidence against
him for they were taken by virtue of an illegal seizure; and
(b) Civil Case No. 90-53648 of Branch 35 of the RTC of
Manila, the FIRST CIVIL CASE, then pending before the
Court of Appeals, which involves the legality of the
seizure, raises a prejudicial question.[19]
The prosecution opposed the motion alleging that lumber
is included in Section 68 of P.D. No. 705, as amended,
and possession thereof without the required legal
documents is penalized therein. It referred to Section 3.2
of DENR Administrative Order No. 19, series of 1989, for
the definitions of timber and lumber, and then argued that
exclusion of lumber from Section 68 would defeat the very
purpose of the law, i.e., to minimize, if not halt, illegal
logging that has resulted in the rapid denudation of our
forest resources.[20]
In her order of 16 August 1991 in the CRIMINAL
CASE,[21] respondent Judge Teresita Dizon-Capulong
granted the motion to quash and dismissed the case on
the ground that "possession of lumber without the legal
documents required by forest laws and regulations is not a
crime."[22]
Its motion for reconsideration having been denied in the
order of 18 October 1991,[23] the People filed a petition
for certiorari with this Court in G.R. No. 106424, wherein it
contends that the respondent Judge acted with grave
abuse of discretion in granting the motion to quash and in
dismissing the case.
On 29 November 1991, the Court of Appeals rendered a
decision[24] in CA-G.R. SP No. 25510 dismissing for lack
of merit the petitioner's appeal from the decision in the
FIRST CIVIL CASE and affirming the trial court's rulings
on the issues raised. As to the claim that the truck was not
carrying contraband articles since there is no law
punishing the possession of lumber, and that lumber is not
timber whose possession without the required legal
documents is unlawful under P.D. No. 705, as amended,
the Court of Appeals held:
This undue emphasis on lumber or the commercial nature
of the forest product involved has always been foisted by
those who claim to be engaged in the legitimate business
of lumber dealership. But what is important to consider is
that when appellant was required to present the valid
documents showing its acquisition and lawful possession
of the lumber in question, it failed to present any despite
the period of extension granted to it.[25]

The petitioner's motion to reconsider the said decision was
denied by the Court of Appeals in its resolution of 3 March
1992.[26] Hence, the petitioner came to this Court by way
of a petition for review on certiorari in G.R. No. 104988,
which was filed on 2 May 1992.[27]
On 24 September 1992, Branch 24 of the RTC of Manila
handed down a decision in the SECOND CIVIL CASE
dismissing the petition for certiorari and prohibition
because (a) the petitioner did not exhaust administrative
remedies; (b) when the seizure was made on 17
September 1990 the petitioner could not lawfully sell
lumber, as its license was still under suspension; (c) the
seizure was valid under Section 68-A of P.D. No. 705, as
amended; and (d) the seizure was justified as a
warrantless search and seizure under Section 80 of P.D.
No. 705, as amended.
The petitioner appealed from the decision to the Court of
Appeals, which docketed the appeal as CA-G.R. SP No.
33778.
In its decision[28] of 31 July 1995, the Court of Appeals
dismissed the petitioner's appeal in CA-G.R. SP No.
33778 for lack of merit and sustained the grounds relied
upon by the trial court in dismissing the SECOND CIVIL
CASE. Relying on the definition of "lumber" by Webster,
viz., "timber or logs, especially after being prepared for the
market," and by the Random House Dictionary of the
English Language, viz., "wood, esp. when suitable or
adapted for various building purposes," the respondent
Court held that since wood is included in the definition of
forest product in Section 3(q) of P.D. No. 705, as
amended, lumber is necessarily included in Section 68
under the term forest product.
The Court of Appeals further emphasized that a forest
officer or employee can seize the forest product involved
in a violation of Section 68 of P.D. No. 705 pursuant to
Section 80 thereof, as amended by P.D. No. 1775, which
provides in part as follows:
SEC. 80. Arrest, Institution of Criminal Actions. A forest
officer or employee of the Bureau or any personnel of the
Philippine Constabulary/Integrated National Police shall
arrest even without warrant any person who has
committed or is committing in his presence any of the
offenses defined in this chapter. He shall also seize and
confiscate, in favor of the Government, the tools and
equipment used in committing the offense, or the forest
products cut, gathered or taken by the offender in the
process of committing the offense.
Among the offenses punished in the chapter referred to in
said Section 80 are the cutting, gathering, collection, or
removal of timber or other forest products or possession of
timber or other forest products without the required legal
documents.
Law on NatRes (50-72 64
Its motion to reconsider the decision having been denied
by the Court of Appeals in the resolution of 6 February
1996, the petitioner filed with this Court on 27 February
1996 a petition for review on certiorari in G.R. No. 123784.
We shall now resolve these three cases starting with G.R.
106424 with which the other two were consolidated.
G.R. No. 106424
The petitioner had moved to quash the information in
Criminal Case No. 324-V-91 on the ground that it does not
charge an offense. Respondent Judge Dizon-Capulong
granted the motion reasoning that the subject matter of the
information in the CRIMINAL CASE is LUMBER, which is
neither "timber" nor "other forest product" under Section
68 of P.D. No. 705, as amended, and hence, possession
thereof without the required legal documents is not
prohibited and penalized under the said section.
Under paragraph (a), Section 3, Rule 117 of the Rules of
Court, an information may be quashed on the ground that
the facts alleged therein do not constitute an offense. It
has been said that "the test for the correctness of this
ground is the sufficiency of the averments in the
information, that is, whether the facts alleged, if
hypothetically admitted, constitute the elements of the
offense,[29] and matters aliunde will not be considered."
Anent the sufficiency of the information, Section 6, Rule
110 of the Rules of Court requires, inter alia, that the
information state the acts or omissions complained of as
constituting the offense.
Respondent Ri Chuy Po is charged with the violation of
Section 68 of P.D. No. 705, as amended by E.O. No. 277,
which provides:
SEC. 68. Cutting, Gathering and/or collecting Timber, or
Other Forest Products Without License. Any person who
shall cut, gather, collect, remove timber or other forest
products from any forest land, or timber from alienable or
disposable public land, or from private land, without any
authority, or possess timber or other forest products
without the legal documents as required under existing
forest laws and regulations, shall be punished with the
penalties imposed under Articles 309 and 310 of the
Revised Penal Code: Provided, That in the case of
partnerships, associations, or corporations, the officers
who ordered the cutting, gathering, collection or
possession shall be liable, and if such officers are aliens,
they shall, in addition to the penalty, be deported without
further proceedings on the part of the Commission on
Immigration and Deportation.
The Court shall further order the confiscation in favor of
the government of the timber or any forest products cut,
gathered, collected, removed, or possessed, as well as the

machinery, equipment, implements and tools illegally used
in the area where the timber or forest products are found.
Punished then in this section are (1) the cutting, gathering,
collection, or removal of timber or other forest products
from the places therein mentioned without any authority;
and (b) possession of timber or other forest products
without the legal documents as required under existing
forest laws and regulations.
Indeed, the word lumber does not appear in Section 68.
But conceding ex gratia that this omission amounts to an
exclusion of lumber from the section's coverage, do the
facts averred in the information in the CRIMINAL CASE
validly charge a violation of the said section?
A cursory reading of the information readily leads us to an
infallible conclusion that lumber is not solely its subject
matter. It is evident therefrom that what are alleged to be
in the possession of the private respondent, without the
required legal documents, are truckloads of
(1) almaciga and lauan; and
(2) approximately 200,000 bd. ft. of lumber and shorts of
various species including almaciga and supa.
The almaciga and lauan specifically mentioned in no. (1)
are not described as lumber. They cannot refer to the
lumber in no. (2) because they are separated by the words
approximately 200,000 bd. ft. with the conjunction and,
and not with the preposition of. They must then be raw
forest products or, more specifically, timbers under Section
3(q) of P.D. No. 705, as amended, which reads:
SEC. 3. Definitions.
xxx xxx xxx
(q) Forest product means timber, pulpwood, firewood,
bark, tree top, resin, gum, wood, oil, honey, beeswax,
nipa, rattan, or other forest growth such as grass, shrub,
and flowering plant, the associated water, fish, game,
scenic, historical, recreational and geological resources in
forest lands.
It follows then that lumber is only one of the items covered
by the information. The public and the private respondents
obviously miscomprehended the averments in the
information. Accordingly, even if lumber is not included in
Section 68, the other items therein as noted above fall
within the ambit of the said section, and as to them, the
information validly charges an offense.
Our respected brother, Mr. Justice Jose C. Vitug, suggests
in his dissenting opinion that this Court go beyond the four
corners of the information for enlightenment as to whether
the information exclusively refers to lumber. With the aid of
the pleadings and the annexes thereto, he arrives at the
Law on NatRes (50-72 65
conclusion that only lumber has been envisioned in the
indictment.
The majority is unable to subscribe to his view. First, his
proposition violates the rule that only the facts alleged in
the information vis-a-vis the law violated must be
considered in determining whether an information charges
an offense.
Second, the pleadings and annexes he resorted to are
insufficient to justify his conclusion. On the contrary, the
Joint Affidavit of Melencio Jalova, Jr., and Araman
Belleng, which is one of the annexes he referred to,[30]
cannot lead one to infer that what the team seized was all
lumber. Paragraph 8 thereof expressly states:
8. That when inside the compound, the team found
approximately four (4) truckloads of narra shorts,
trimmings and slabs and a negligible amount of narra
lumber, and approximately 200,000 bd. ft. of lumber and
shorts of various species including almaciga and supa
which are classified as prohibited wood species. (Italics
supplied)
In the same vein, the dispositive portion of the
resolution[31] of the investigating prosecutor, which served
as the basis for the filing of the information, does not limit
itself to lumber; thus:
WHEREFORE, premises considered, it is hereby
recommended that an information be filed against
respondent Ri Chuy Po for illegal possession of 200,000
bd. ft. of lumber consisting of almaciga and supa and for
illegal shipment of almaciga and lauan in violation of Sec.
63 of PD 705 as amended by E.O. 277, series of 1987.
(Italics supplied)
The foregoing disquisitions should not, in any manner, be
construed as an affirmance of the respondent Judge's
conclusion that lumber is excluded from the coverage of
Section 68 of P.D. No. 705, as amended, and thus
possession thereof without the required legal documents is
not a crime. On the contrary, this Court rules that such
possession is penalized in the said section because
lumber is included in the term timber.
The Revised Forestry Code contains no definition of either
timber or lumber. While the former is included in forest
products as defined in paragraph (q) of Section 3, the
latter is found in paragraph (aa) of the same section in the
definition of Processing plant; which reads:
(aa) Processing plant is any mechanical set-up, machine
or combination of machine used for the processing of logs
and other forest raw materials into lumber, veneer,
plywood, wallboard, block-board, paper board, pulp, paper
or other finished wood products.

This simply means that lumber is a processed log or
processed forest raw material. Clearly, the Code uses the
term lumber in its ordinary or common usage. In the 1993
copyright edition of Webster's Third New International
Dictionary, lumber is defined, inter alia, as timber or logs
after being prepared for the market.[32] Simply put, lumber
is a processed log or timber.
It is settled that in the absence of legislative intent to the
contrary, words and phrases used in a statute should be
given their plain, ordinary, and common usage
meaning.[33] And insofar as possession of timber without
the required legal documents is concerned, Section 68 of
P.D. No. 705, as amended, makes no distinction between
raw or processed timber. Neither should we. Ubi lex non
distanguit nec nos distinguere debemus.
Indisputably, respondent Judge Teresita Dizon-Capulong
of Branch 172 of the RTC of Valenzuela, Metro Manila,
committed grave abuse of discretion in granting the motion
to quash the information in the CRIMINAL CASE and in
dismissing the said case.
G.R. No. 104988
We find this petition to be without merit. The petitioner has
miserably failed to show that the Court of Appeals
committed any reversible error in its assailed decision of
29 November 1991.
It was duly established that on 1 April 1990, the
petitioner's truck with Plate No. CCK-322 was coming out
from the petitioner's lumberyard loaded with lauan and
almaciga lumber of different sizes and dimensions which
were not accompanied with the required invoices and
transport documents. The seizure of such truck and its
cargo was a valid exercise of the power vested upon a
forest officer or employee by Section 80 of P.D. No. 705,
as amended by P.D. No. 1775. Then, too, as correctly held
by the trial court and the Court of Appeals in the FIRST
CIVIL CASE, the search was conducted on a moving
vehicle. Such a search could be lawfully conducted without
a search warrant.
Search of a moving vehicle is one of the five doctrinally
accepted exceptions to the constitutional mandate[34] that
no search or seizure shall be made except by virtue of a
warrant issued by a judge after personally determining the
existence of probable cause. The other exceptions are (1)
search as an incident to a lawful arrest, (2) seizure of
evidence in plain view, (3) customs searches, and (4)
consented warrantless search.[35]
We also affirm the rulings of both the trial court and the
Court of Appeals that the search on 4 April 1990 was a
continuation of the search on 3 April 1990 done under and
by virtue of the search warrant issued on 3 April 1990 by
Executive Judge Osorio. Under Section 9, Rule 126 of the
Rules of Court, a search warrant has a lifetime of ten days.
Law on NatRes (50-72 66
Hence, it could be served at any time within the said
period, and if its object or purpose cannot be
accomplished in one day, the same may be continued the
following day or days until completed. Thus, when the
search under a warrant on one day was interrupted, it may
be continued under the same warrant the following day,
provided it is still within the ten-day period.[36]
As to the final plea of the petitioner that the search was
illegal because possession of lumber without the required
legal documents is not illegal under Section 68 of P.D. No.
705, as amended, since lumber is neither specified therein
nor included in the term forest product, the same hardly
merits further discussion in view of our ruling in G.R. No.
106424.
G.R. No. 123784
The allegations and arguments set forth in the petition in
this case palpably fail to show prima facie that a reversible
error has been committed by the Court of Appeals in its
challenged decision of 31 July 1995 and resolution of 6
February 1996 in CA-G.R. SP No. 33778. We must,
forthwith, deny it for utter want of merit. There is no need
to require the respondents to comment on the petition.
The Court of Appeals correctly dismissed the petitioner's
appeal from the judgment of the trial court in the SECOND
CIVIL CASE. The petitioner never disputed the fact that its
lumber-dealer's license or permit had been suspended by
Secretary Factoran on 23 April 1990. The suspension was
never lifted, and since the license had only a lifetime of up
to 25 September 1990, the petitioner has absolutely no
right to possess, sell, or otherwise dispose of lumber.
Accordingly, Secretary Factoran or his authorized
representative had the authority to seize the lumber
pursuant to Section 68-A of P.D. No. 705, as amended,
which provides as follows:
Section 68-A. Administrative Authority of the Department
Head or his Duly Authorized Representative to Order
Confiscation. In all cases of violations of this Code or other
forest laws, rules and regulations, the Department Head or
his duly authorized representative may order the
confiscation of any forest products illegally cut, gathered,
removed, or possessed or abandoned. . . .
The petitioner's insistence that possession or sale of
lumber is not penalized must also fail in view of our
disquisition and ruling on the same issue in G.R. No.
106424. Besides, the issue is totally irrelevant in the
SECOND CIVIL CASE which involves administrative
seizure as a consequence of the violation of the
suspension of the petitioner's license as lumber dealer.
All told then, G.R. No. 104988 and G.R. No. 123784 are
nothing more than rituals to cover up blatant violations of
the Revised Forestry Code of the Philippines (P.D. No.
705), as amended. They are presumably trifling attempts

to block the serious efforts of the DENR to enforce the
decree, efforts which deserve the commendation of the
public in light of the urgent need to take firm and decisive
action against despoilers of our forests whose continuous
destruction only ensures to the generations to come, if not
the present, an inheritance of parched earth incapable of
sustaining life. The Government must not tire in its
vigilance to protect the environment by prosecuting without
fear or favor any person who dares to violate our laws for
the utilization and protection of our forests.
WHEREFORE, judgment is hereby rendered
1. (a) GRANTING the petition in G.R. No. 106424; (b)
SETTING ASIDE and ANNULLING, for having been
rendered with grave abuse of discretion, the challenged
orders of 16 August 1991 and 18 October 1991 of
respondent Judge Teresita Dizon-Capulong, Branch 172,
Regional Trial Court of Valenzuela, Metro Manila, in
Criminal Case No. 324-V-91, entitled People of the
Philippines vs. Ri Chuy Po; (c) REINSTATING the
information in the said criminal case; and (d) DIRECTING
the respondent Judge on her successor to hear and
decide the case with purposeful dispatch; and
2. DENYING the petitions in G.R. No. 104988 and in G. R.
No. 123784 for utter failure of the petitioner to show that
the respondent Court of Appeals committed any reversible
error in the challenged decisions of 29 November 1991 in
CA-G.R. SP No. 25510 in the FIRST CIVIL CASE and of
31 July 1995 in CA-G.R. SP No. 33778 in the SECOND
CIVIL CASE.
Costs against the petitioner in each of these three cases.
SO ORDERED.
LEONARDO A. PAAT, in his capacity as Officer-in-
Charge (OIC), Regional Executive Director (RED),
Region 2 and JOVITO LAYUGAN, JR., in his capacity
as Community Environment and Natural Resources
Officer (CENRO), both of the Department of
Environment and Natural Resources (DENR),
petitioners, vs. COURT OF APPEALS, HON. RICARDO
A. BACULI in his capacity as Presiding Judge of
Branch 2, Regional Trial Court at Tuguegarao,
Cagayan, and SPOUSES BIENVENIDO and VICTORIA
DE GUZMAN, respondents.; [G.R. No. 111107. January
10, 1997]
Without violating the principle of exhaustion of
administrative remedies, may an action for replevin
prosper to recover a movable property which is the subject
matter of an administrative forfeiture proceeding in the
Department of Environment and Natural Resources
pursuant to Section 68-A of P. D. 705, as amended,
entitled The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives
empowered to confiscate and forfeit conveyances used in
Law on NatRes (50-72 67
transporting illegal forest products in favor of the
government?
These are two fundamental questions presented before us
for our resolution.
The controversy on hand had its incipiency on May 19,
1989 when the truck of private respondent Victoria de
Guzman while on its way to Bulacan from San Jose,
Baggao, Cagayan, was seized by the Department of
Environment and Natural Resources (DENR, for brevity)
personnel in Aritao, Nueva Vizcaya because the driver
could not produce the required documents for the forest
products found concealed in the truck. Petitioner Jovito
Layugan, the Community Environment and Natural
Resources Officer (CENRO) in Aritao, Cagayan, issued on
May 23, 1989 an order of confiscation of the truck and
gave the owner thereof fifteen (15) days within which to
submit an explanation why the truck should not be
forfeited. Private respondents, however, failed to submit
the required explanation. On June 22, 1989,[1] Regional
Executive Director Rogelio Baggayan of DENR sustained
petitioner Layugans action of confiscation and ordered the
forfeiture of the truck invoking Section 68-A of Presidential
Decree No. 705 as amended by Executive Order No. 277.
Private respondents filed a letter of reconsideration dated
June 28, 1989 of the June 22, 1989 order of Executive
Director Baggayan, which was, however, denied in a
subsequent order of July 12, 1989.[2] Subsequently, the
case was brought by the petitioners to the Secretary of
DENR pursuant to private respondents statement in their
letter dated June 28, 1989 that in case their letter for
reconsideration would be denied then this letter should be
considered as an appeal to the Secretary.[3] Pending
resolution however of the appeal, a suit for replevin,
docketed as Civil Case 4031, was filed by the private
respondents against petitioner Layugan and Executive
Director Baggayan[4] with the Regional Trial Court, Branch
2 of Cagayan,[5] which issued a writ ordering the return of
the truck to private respondents.[6] Petitioner Layugan and
Executive Director Baggayan filed a motion to dismiss with
the trial court contending, inter alia, that private
respondents had no cause of action for their failure to
exhaust administrative remedies. The trial court denied the
motion to dismiss in an order dated December 28, 1989.[7]
Their motion for reconsideration having been likewise
denied, a petition for certiorari was filed by the petitioners
with the respondent Court of Appeals which sustained the
trial courts order ruling that the question involved is purely
a legal question.[8] Hence, this present petition,[9] with
prayer for temporary restraining order and/or preliminary
injunction, seeking to reverse the decision of the
respondent Court of Appeals was filed by the petitioners
on September 9, 1993. By virtue of the Resolution dated
September 27, 1993,[10] the prayer for the issuance of
temporary restraining order of petitioners was granted by
this Court.

Invoking the doctrine of exhaustion of administrative
remedies, petitioners aver that the trial court could not
legally entertain the suit for replevin because the truck was
under administrative seizure proceedings pursuant to
Section 68-A of P.D. 705, as amended by E.O. 277.
Private respondents, on the other hand, would seek to
avoid the operation of this principle asserting that the
instant case falls within the exception of the doctrine upon
the justification that (1) due process was violated because
they were not given the chance to be heard, and (2) the
seizure and forfeiture was unlawful on the grounds: (a)
that the Secretary of DENR and his representatives have
no authority to confiscate and forfeit conveyances utilized
in transporting illegal forest products, and (b) that the truck
as admitted by petitioners was not used in the commission
of the crime.
Upon a thorough and delicate scrutiny of the records and
relevant jurisprudence on the matter, we are of the opinion
that the plea of petitioners for reversal is in order.
This Court in a long line of cases has consistently held that
before a party is allowed to seek the intervention of the
court, it is a pre-condition that he should have availed of all
the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery
can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that
comes within his jurisdiction then such remedy should be
exhausted first before courts judicial power can be sought.
The premature invocation of courts intervention is fatal to
ones cause of action.[11] Accordingly, absent any finding
of waiver or estoppel the case is susceptible of dismissal
for lack of cause of action.[12] This doctrine of exhaustion
of administrative remedies was not without its practical
and legal reasons, for one thing, availment of
administrative remedy entails lesser expenses and
provides for a speedier disposition of controversies. It is no
less true to state that the courts of justice for reasons of
comity and convenience will shy away from a dispute until
the system of administrative redress has been completed
and complied with so as to give the administrative agency
concerned every opportunity to correct its error and to
dispose of the case. However, we are not amiss to
reiterate that the principle of exhaustion of administrative
remedies as tested by a battery of cases is not an ironclad
rule. This doctrine is a relative one and its flexibility is
called upon by the peculiarity and uniqueness of the
factual and circumstantial settings of a case. Hence, it is
disregarded (1) when there is a violation of due
process,[13] (2) when the issue involved is purely a legal
question,[14] (3) when the administrative action is patently
illegal amounting to lack or excess of jurisdiction,[15] (4)
when there is estoppel on the part of the administrative
agency concerned,[16] (5) when there is irreparable
injury,[17] (6) when the respondent is a department
secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter,[18]
(7) when to require exhaustion of administrative remedies
Law on NatRes (50-72 68
would be unreasonable,[19] (8) when it would amount to a
nullification of a claim,[20] (9) when the subject matter is a
private land in land case proceedings,[21] (10) when the
rule does not provide a plain, speedy and adequate
remedy, and (11) when there are circumstances indicating
the urgency of judicial intervention.[22]
In the case at bar, there is no question that the
controversy was pending before the Secretary of DENR
when it was forwarded to him following the denial by the
petitioners of the motion for reconsideration of private
respondents through the order of July 12, 1989. In their
letter of reconsideration dated June 28, 1989,[23] private
respondents clearly recognize the presence of an
administrative forum to which they seek to avail, as they
did avail, in the resolution of their case. The letter, reads,
thus:
xxx
If this motion for reconsideration does not merit your
favorable action, then this letter should be considered as
an appeal to the Secretary.[24]
It was easy to perceive then that the private respondents
looked up to the Secretary for the review and disposition of
their case. By appealing to him, they acknowledged the
existence of an adequate and plain remedy still available
and open to them in the ordinary course of the law. Thus,
they cannot now, without violating the principle of
exhaustion of administrative remedies, seek courts
intervention by filing an action for replevin for the grant of
their relief during the pendency of an administrative
proceedings.
Moreover, it is important to point out that the enforcement
of forestry laws, rules and regulations and the protection,
development and management of forest lands fall within
the primary and special responsibilities of the Department
of Environment and Natural Resources. By the very nature
of its function, the DENR should be given a free hand
unperturbed by judicial intrusion to determine a
controversy which is well within its jurisdiction. The
assumption by the trial court, therefore, of the replevin suit
filed by private respondents constitutes an unjustified
encroachment into the domain of the administrative
agencys prerogative. The doctrine of primary jurisdiction
does not warrant a court to arrogate unto itself the
authority to resolve a controversy the jurisdiction over
which is initially lodged with an administrative body of
special competence.[25] In Felipe Ismael, Jr. and Co. vs.
Deputy Executive Secretary,[26] which was reiterated in
the recent case of Concerned Officials of MWSS vs.
Vasquez,[27] this Court held:
Thus, while the administration grapples with the complex
and multifarious problems caused by unbriddled
exploitation of these resources, the judiciary will stand
clear. A long line of cases establish the basic rule that the

courts will not interfere in matters which are addressed to
the sound discretion of government agencies entrusted
with the regulation of activities coming under the special
technical knowledge and training of such agencies.
To sustain the claim of private respondents would in effect
bring the instant controversy beyond the pale of the
principle of exhaustion of administrative remedies and fall
within the ambit of excepted cases heretofore stated.
However, considering the circumstances prevailing in this
case, we can not but rule out these assertions of private
respondents to be without merit. First, they argued that
there was violation of due process because they did not
receive the May 23, 1989 order of confiscation of petitioner
Layugan. This contention has no leg to stand on. Due
process does not necessarily mean or require a hearing,
but simply an opportunity or right to be heard.[28] One
may be heard , not solely by verbal presentation but also,
and perhaps many times more creditably and practicable
than oral argument, through pleadings.[29] In
administrative proceedings moreover, technical rules of
procedure and evidence are not strictly applied;
administrative process cannot be fully equated with due
process in its strict judicial sense.[30] Indeed, deprivation
of due process cannot be successfully invoked where a
party was given the chance to be heard on his motion for
reconsideration,[31] as in the instant case, when private
respondents were undisputedly given the opportunity to
present their side when they filed a letter of
reconsideration dated June 28, 1989 which was, however,
denied in an order of July 12, 1989 of Executive Director
Baggayan. In Navarro III vs. Damasco,[32] we ruled that :
The essence of due process is simply an opportunity to be
heard, or as applied to administrative proceedings, an
opportunity to explain ones side or an opportunity to seek
a reconsideration of the action or ruling complained of. A
formal or trial type hearing is not at all times and in all
instances essential. The requirements are satisfied when
the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand. What is
frowned upon is the absolute lack of notice or hearing.
Second, private respondents imputed the patent illegality
of seizure and forfeiture of the truck because the
administrative officers of the DENR allegedly have no
power to perform these acts under the law. They insisted
that only the court is authorized to confiscate and forfeit
conveyances used in transporting illegal forest products as
can be gleaned from the second paragraph of Section 68
of P.D. 705, as amended by E.O. 277. The pertinent
provision reads as follows:
SECTION 68. xxx
xxx
The court shall further order the confiscation in favor of the
government of the timber or any forest products cut,
Law on NatRes (50-72 69
gathered, collected, removed, or possessed, as well as the
machinery, equipments, implements and tools illegaly [sic]
used in the area where the timber or forest products are
found. (Underline ours)
A reading, however, of the law persuades us not to go
along with private respondents thinking not only because
the aforequoted provision apparently does not mention nor
include conveyances that can be the subject of
confiscation by the courts, but to a large extent, due to the
fact that private respondents interpretation of the subject
provision unduly restricts the clear intention of the law and
inevitably reduces the other provision of Section 68-A ,
which is quoted herein below:
SECTION 68-A. Administrative Authority of the
Department or His Duly Authorized Representative To
Order Confiscation. In all cases of violation of this Code or
other forest laws, rules and regulations, the Department
Head or his duly authorized representative, may order the
confiscation of any forest products illegally cut, gathered,
removed, or possessed or abandoned, and all
conveyances used either by land, water or air in the
commission of the offense and to dispose of the same in
accordance with pertinent laws, regulations and policies
on the matter. (Underline ours)
It is, thus, clear from the foregoing provision that the
Secretary and his duly authorized representatives are
given the authority to confiscate and forfeit any
conveyances utilized in violating the Code or other forest
laws, rules and regulations. The phrase to dispose of the
same is broad enough to cover the act of forfeiting
conveyances in favor of the government. The only
limitation is that it should be made in accordance with
pertinent laws, regulations or policies on the matter. In the
construction of statutes, it must be read in such a way as
to give effect to the purpose projected in the statute.[33]
Statutes should be construed in the light of the object to be
achieved and the evil or mischief to be suppressed, and
they should be given such construction as will advance the
object, suppress the mischief, and secure the benefits
intended.[34] In this wise, the observation of the Solicitor
General is significant, thus:
But precisely because of the need to make forestry laws
more responsive to present situations and realities and in
view of the urgency to conserve the remaining resources
of the country, that the government opted to add Section
68-A. This amendatory provision is an administrative
remedy totally separate and distinct from criminal
proceedings. More than anything else, it is intended to
supplant the inadequacies that characterize enforcement
of forestry laws through criminal actions. The preamble of
EO 277-the law that added Section 68-A to PD 705-is
most revealing:

WHEREAS, there is an urgency to conserve the remaining
forest resources of the country for the benefit and welfare
of the present and future generations of Filipinos;
WHEREAS, our forest resources may be effectively
conserved and protected through the vigilant enforcement
and implementation of our forestry laws, rules and
regulations;
WHEREAS, the implementation of our forestry laws
suffers from technical difficulties, due to certain
inadequacies in the penal provisions of the Revised
Forestry Code of the Philippines; and
WHEREAS, to overcome this difficulties, there is a need to
penalize certain acts more responsive to present situations
and realities;
It is interesting to note that Section 68-A is a new provision
authorizing the DENR to confiscate, not only conveyances,
but forest products as well. On the other hand,
confiscation of forest products by the court in a criminal
action has long been provided for in Section 68. If as
private respondents insist, the power on confiscation
cannot be exercised except only through the court under
Section 68, then Section 68-A would have no purpose at
all. Simply put, Section 68-A would not have provided any
solution to the problem perceived in EO 277, supra.[35]
Private respondents, likewise, contend that the seizure
was illegal because the petitioners themselves admitted in
the Order dated July 12, 1989 of Executive Director
Baggayan that the truck of private respondents was not
used in the commission of the crime. This order, a copy of
which was given to and received by the counsel of private
respondents, reads in part , viz. :
xxx while it is true that the truck of your client was not used
by her in the commission of the crime, we uphold your
claim that the truck owner is not liable for the crime and in
no case could a criminal case be filed against her as
provided under Article 309 and 310 of the Revised Penal
Code. xxx[36]
We observed that private respondents misread the content
of the aforestated order and obviously misinterpreted the
intention of petitioners. What is contemplated by the
petitioners when they stated that the truck "was not used
in the commission of the crime" is that it was not used in
the commission of the crime of theft, hence, in no case
can a criminal action be filed against the owner thereof for
violation of Article 309 and 310 of the Revised Penal
Code. Petitioners did not eliminate the possibility that the
truck was being used in the commission of another crime,
that is, the breach of Section 68 of P.D.705 as amended
by E.O. 277. In the same order of July 12, 1989,
petitioners pointed out:
Law on NatRes (50-72 70
xxx However, under Section 68 of P.D.705 as amended
and further amended by Executive Order No.277
specifically provides for the confiscation of the conveyance
used in the transport of forest products not covered by the
required legal documents. She may not have been
involved in the cutting and gathering of the product in
question but the fact that she accepted the goods for a fee
or fare the same is therefor liable. xxx[37]
Private respondents, however, contended that there is no
crime defined and punishable under Section 68 other than
qualified theft, so that, when petitioners admitted in the
July 12, 1989 order that private respondents could not be
charged for theft as provided for under Articles 309 and
310 of the Revised Penal Code, then necessarily private
respondents could not have committed an act constituting
a crime under Section 68. We disagree. For clarity, the
provision of Section 68 of P.D. 705 before its amendment
by E.O. 277 and the provision of Section 1 of E.O. No.277
amending the aforementioned Section 68 are reproduced
herein, thus:
SECTION 68. Cutting, gathering and/or collecting timber
or other products without license. - Any person who shall
cut , gather , collect , or remove timber or other forest
products from any forest land, or timber from alienable and
disposable public lands, or from private lands, without any
authority under a license agreement, lease, license or
permit, shall be guilty of qualified theft as defined and
punished under Articles 309 and 310 of the Revised Penal
Code xxx. (Underscoring ours; Section 68, P.D.705 before
its amendment by E.O.277 )
SECTION 1. Section 68 of Presidential Decree No.705, as
amended, is hereby amended to read as follows:
Section 68. Cutting, gathering and/or collecting timber or
other forest products without license. -Any person who
shall cut, gather, collect, remove timber or other forest
products from any forest land, or timber from alienable or
disposable public land, or from private land, without any
authority, or possess timber or other forest products
without the legal documents as required under existing
forest laws and regulations, shall be punished with the
penalties imposed under Articles 309 and 310 of the
Revised Penal Code xxx." (Underscoring ours; Section 1,
E.O No. 277 amending Section 68, P.D. 705 as amended)
With the introduction of Executive Order No. 277
amending Section 68 of P.D. 705, the act of cutting,
gathering, collecting, removing, or possessing forest
products without authority constitutes a distinct offense
independent now from the crime of theft under Articles 309
and 310 of the Revised Penal Code, but the penalty to be
imposed is that provided for under Article 309 and 310 of
the Revised Penal Code. This is clear from the language
of Executive Order No. 277 when it eliminated the phrase
shall be guilty of qualified theft as defined and punished
under Articles 309 and 310 of the Revised Penal Code

and inserted the words shall be punished with the
penalties imposed under Article 309 and 310 of the
Revised Penal Code . When the statute is clear and
explicit, there is hardly room for any extended court
ratiocination or rationalization of the law.[38]
From the foregoing disquisition, it is clear that a suit for
replevin can not be sustained against the petitioners for
the subject truck taken and retained by them for
administrative forfeiture proceedings in pursuant to
Section 68-A of the P. D. 705, as amended. Dismissal of
the replevin suit for lack of cause of action in view of the
private respondents failure to exhaust administrative
remedies should have been the proper course of action by
the lower court instead of assuming jurisdiction over the
case and consequently issuing the writ ordering the return
of the truck. Exhaustion of the remedies in the
administrative forum, being a condition precedent prior to
ones recourse to the courts and more importantly, being
an element of private respondents right of action, is too
significant to be waylaid by the lower court.
It is worth stressing at this point, that a suit for replevin is
founded solely on the claim that the defendant wrongfully
withholds the property sought to be recovered. It lies to
recover possession of personal chattels that are unlawfully
detained.[39] To detain is defined as to mean to hold or
keep in custody,[40] and it has been held that there is
tortuous taking whenever there is an unlawful meddling
with the property, or an exercise or claim of dominion over
it, without any pretense of authority or right; this, without
manual seizing of the property is sufficient.[41] Under the
Rules of Court, it is indispensable in replevin proceedings,
that the plaintiff must show by his own affidavit that he is
entitled to the possession of property, that the property is
wrongfully detained by the defendant, alleging the cause
of detention, that the same has not been taken for tax
assessment, or seized under execution, or attachment, or
if so seized, that it is exempt from such seizure, and the
actual value of the property.[42] Private respondents
miserably failed to convince this Court that a wrongful
detention of the subject truck obtains in the instant case. It
should be noted that the truck was seized by the
petitioners because it was transporting forest products with
out the required permit of the DENR in manifest
contravention of Section 68 of P.D. 705 as amended by
E.O 277. Section 68-A of P.D. 705, as amended,
unquestionably warrants the confiscation as well as the
disposition by the Secretary of DENR or his duly
authorized representatives of the conveyances used in
violating the provision of forestry laws. Evidently, the
continued possession or detention of the truck by the
petitioners for administrative forfeiture proceeding is
legally permissible, hence , no wrongful detention exists in
the case at bar.
Moreover, the suit for replevin is never intended as a
procedural tool to question the orders of confiscation and
forfeiture issued by the DENR in pursuance to the
Law on NatRes (50-72 71
authority given under P.D.705, as amended. Section 8 of
the said law is explicit that actions taken by the Director of
the Bureau of Forest Development concerning the
enforcement of the provisions of the said law are subject
to review by the Secretary of DENR and that courts may
not review the decisions of the Secretary except through a
special civil action for certiorari or prohibition. It reads :
SECTION 8 . REVIEW - All actions and decisions of the
Director are subject to review, motu propio or upon appeal
of any person aggrieved thereby, by the Department Head
whose decision shall be final and executory after the lapse
of thirty (30) days from the receipt of the aggrieved party of
said decision, unless appealed to the President in
accordance with Executive Order No. 19, Series of 1966.
The Decision of the Department Head may not be
reviewed by the courts except through a special civil action
for certiorari or prohibition.
WHEREFORE, the Petition is GRANTED; the Decision of
the respondent Court of Appeals dated October 16, 1991
and its Resolution dated July 14, 1992 are hereby SET
ASIDE AND REVERSED; the Restraining Order
promulgated on September 27, 1993 is hereby made
permanent; and the Secretary of DENR is directed to
resolve the controversy with utmost dispatch. SO
ORDERED.
MA. MIMIE CRESCENCIO, Petitioner, vs. PEOPLE OF
THE PHILIPPINES, Respondent.; G.R. No. 205015
November 19, 2014
This case stemmed from Ma. Mimie Crescencio's
(petitioner) conviction for violation of Section 681 of
Presidential Decree (P.D.) No. 705,2 otherwise known as
the Revised Forestry Code of the Philippines (Forestry
Code), as amended by Executive Order (E.O.) No. 277,3
rendered by the Regional Trial Court (RTC) ofTalibon,
Bohol, Branch 52, in Criminal Case No. 96-27, on August
12, 2008.4 The Court of Appeals (CA), in CA-G.R. CR No.
01162, dismissed the appeal in its Resolution5 dated April
15, 2011 for failure to serve a copy of the Appellants Brief
to the Office of the Solicitor General (OSG). The CA, in its
Resolution6 dated November 19, 2012, also denied the
petitioners motion for reconsideration of the said
resolution.
The Facts
Acting on an information that there was a stockpile of
lumber or forest products in the vicinity of the house of the
petitioner, Eufemio Abaniel (Abaniel), the Chief of the
ForestProtection Unit of Department of Environment and
Natural Resources (DENR) - Community Environment and
Natural Resources Office, Talibon, Bohol, together with
Forest Rangers Urcino Butal (Butal), Alfredo Bastasa and
Celso Ramos (Ramos) went to the petitioners house at
Balico, Talibon, Bohol on March 15, 1994 at 3:00 p.m.
Upon arriving thereat, they saw forest products lying under
the house of the petitioner and at the shoreline about two
meters away from the petitioners house. As the DENR

personnel tried to investigate from the neighborhood as to
who was the owner of the lumber, the petitioner admitted
its ownership. Thereafter, the DENR personnel entered
the premises of the petitioners house without a search
warrant.7
Upon inspection, 24 pieces of magsihagonlumber, which is
equivalent to 452 board feet, were discovered. When the
DENR personnel asked for documents to support the
petitioners claim of ownership, the latter showed to them
Official Receipt No. 35053 issued by Pengavitor
Enterprises where she allegedly bought the said lumber.
However, when the DENR personnel scaled the lumber,
they found out that the dimensions and the species of the
lumber did not tally with the items mentioned in the receipt.
The said receipt showed that the petitioner bought 10
pieces of red lawaan lumber with sizes 2x6x18 and 5
pieces with sizes 2x8x16 on March 13, 1994. On the other
hand, the lumber in the petitioners house, on March 15,
1994, was 24 pieces of magsihagonlumber of three
different sizes, to wit: 20 pieces 2x6x18; 3 pieces 2x8x18;
and 1 piece 2x10x12.8
Since the petitioner could not present any other receipt,
Abaniel ordered the confiscation of the lumber, asked for
police assistance, and told the petitioner that they were
going to transport the confiscated lumber to the DENR
office for safekeeping. Seizure Receipt No. 004157 and a
Statement Showing the Number/Pieces and Volume of
Lumber Being Confiscated,9 which showed the value of
the lumber to be 9,040.00, were issued to the petitioner.
Forest Rangers Butal and Ramos corroborated Abaniels
testimony.10
SPO1 Desiderio Garcia testified that upon the request of
Abaniel for police assistance, he and PO3 Antonio
Crescencio went to the house of the petitioner where they
saw some lumberwhich was later loaded on a cargo truck.
Thereafter, they escorted the transport of the lumber to the
DENR office in San Roque, Talibon, Bohol.11
On the other hand, the lone witness of the defense, Lolita
Crescencio, admitted that the seized lumber were owned
by the petitioner but claimed that the latter bought it from
Pengavitor Enterprises of Trinidad, Bohol and from Java
Marketing in Ubay, Bohol.12 However, the defense had
only the Official Receipt No. 35053 issued by Pengavitor
Enterprises which, however, did not tally with the forest
products confiscated.
On May 17, 1994, the petitioner was charged by the
Provincial Prosecutor of Tagbilaran City, Bohol, with
violation of Section 68 of P.D. No. 705, as amended by
E.O. No. 277. The Information13 alleged:
That on or about the 15th day of March, 1994, in the
municipality of Talibon, Bohol, Philippines, and within the
jurisdiction of this Honorable Court, the above-named
accused with intent to possess and to gain for her own
Law on NatRes (50-72 72
benefit, without any legal document as required under
existing jurisprudence, laws and regulations, and without
any lawful authority under existing rules and regulation of
DENR Forest Management Sector, willfully, unlawfully and
illegally possess and have under her custody and control
forest products consisting of twenty-four (24) pieces of
magsihagon lumber with a volume of 452 board feet and a
total value of Nine Thousand Forty (P9,040.00) Pesos,
Philippine Currency; to the damage and prejudice of the
Republic of the Philippines.14
During the arraignment on July 15,1997, the petitioner
pleaded not guilty to the offense charged.Thereafter, trial
ensued.15
On August 12, 2008, the RTC rendered judgment16
convicting the petitioner of the offense charged and
sentenced her to imprisonment of six (6) years and one (1)
day of prision mayoras minimum to eleven (11) years and
six (6) months and twenty-one (21) days of prision
mayoras maximum. The RTC also ordered the
confiscation of the seized lumber owned by the
petitioner.17
As expected, the petitioner appealed the decision to the
CA. However, in its Resolution18 dated April 15, 2011, the
CA dismissed the appeal outright because the petitioner
failed to furnish the OSG a copy of the Appellants Brief in
violation of the Rules of Court. The petitioner moved for
reconsideration but it was denied by the CA,in its
Resolution19 dated November 19, 2012. Hence, this
petition for review on certiorari.
The Issue
The core issue to be resolved is whether or not the CAs
dismissal of the appeal due to the petitioners failureto
serve a copy of the Appellants Brief to the OSG is proper,
in view of the attendant factual circumstances and in the
interest of substantial justice.
Ruling of the Court
In this case, the petitioner asks for a relaxation of the rigid
rules of technical procedure and submits that the CA erred
in dismissing her appeal purely on the basis of mere
technicalities.
Confronted with issues of this nature, this Court is mindful
of the policy of affording litigants the amplest opportunity
for the determination of their cases on the merits and of
dispensing with technicalities whenever compelling
reasons so warrant or when the purpose of justice requires
it.20
The Court has constantly pronouncedthat "[t]he rules of
procedure ought not to be applied in a very rigid,technical
sense, for they have been adopted to help secure not
override substantial justice. For this reason, courts must
proceed with caution so asnot to deprive a party of
statutory appeal; rather, they must ensure thatall litigants

are granted the amplest opportunity for the proper and just
ventilation of their causes, free from the constraint of
technicalities."21
It is clear that without at all touching on the substantive
aspects of the petitioners cause, the appellate court opted
not to decide the case on the merits. The subject of the
appeal was the decision of the RTC convicting the
petitioner of violation of the Forestry Code and sentencing
her to suffer an imprisonment of no less than six (6) years
to eleven (11) years.
In this case, there is nothing in the record that shows any
deliberate intent on the part of the petitioner to subvert and
delay the final disposition of the case. In fact, when the
petitioner learned that her appeal was dismissed by the
CA for failure to serve a copy of her Appellants Brief to the
OSG, she immediately confronted her previous counsel
who denied having filed such brief. Asthe petitioner was
very much worried of being incarcerated, she asked her
previous counsel to withdraw from the case. Thus, the
petitioner submits that the outright denial of her appeal is
due to the incompetence and ignorance of her former
counsel who even lied about the fact thathe has indeed
filed an Appellants Brief.
As a general rule, the inadvertence of counsel cannot be
considered as an adequate excuse as to call for the
appellate courts indulgence except: (a) where the reckless
or gross negligence of counsel deprives the client of due
process of law; (b) when application of the rule will result
in outright deprivation of the clients liberty or property; or
(c) where the interests of justice so require.22
Here, the petitioner submits that the inadvertence of her
counsel to serve a copy of the Appellants Brief tothe OSG
is a persuasive reason or a compelling justification to
forego the Rules of Procedure as the wanton recklessness
or gross negligence of her counsel has deprived her of
due process of law which will result in the outright
deprivation of her liberty.
In this regard, the Court agrees that the CA should have
taken a liberal view of the rules and ruled on the meritsof
the appeal, especially when what is involved is no less
than the petitioners liberty.
Nonetheless, even if the Court brushes aside the
technicality issue, it will still find that the prosecution was
able to prove beyond reasonable doubt the petitioners
culpability.
In attempting to escape liability, the petitioner contends
that: (a) she had the supporting documents to show that
she bought the questioned lumber from legitimate sources;
and (b) the warrantless search and seizure conducted by
the DENR personnel was illegal and, thus, the items
seized should not have been admitted in evidence against
her.
Law on NatRes (50-72 73
The Constitution recognizes the right of the people to be
secured in their persons, houses, papers, and effects
against unreasonable searches and seizures.23
Nonetheless, the constitutional prohibition against
warrantless searches and seizures admits of
certainexceptions, one of which is seizure of evidence in
plain view.1wphi1 Under the plain view doctrine, objects
falling in the "plain view" of an officer, who has a right to
be in the position to have that view, are subject to seizure
and may be presented as evidence.24
There is no question that the DENR personnel were not
armed with a search warrant when they went to the house
of the petitioner. When the DENR personnel arrived at the
petitioners house, the lumbers were lying under the
latters house and at the shoreline about two meters away
from the house of the petitioner. It isclear, therefore, that
the said lumber is plainly exposed to sight. Hence, the
seizure of the lumber outside the petitioners house falls
within the purview of the plain view doctrine.
Besides, the DENR personnel had the authority to arrest
the petitioner, even without a warrant. Section 8025 of the
Forestry Code authorizes the forestry officer or employee
of the DENR or any personnel of the Philippine National
Police to arrest, even without a warrant, any person who
has committed or is committing in his presence any of the
offenses defined by the Forestry Code and to seize and
confiscate the tools and equipment used in committing the
offense orthe forest products gathered or taken by the
offender. Clearly, in the course ofsuch lawful intrusion, the
DENR personnel had inadvertently come across the
lumber which evidently incriminated the petitioner.
The fact of possession by the petitioner of the 24 pieces of
magsihagonlumber, as well as her subsequent failure to
produce the legal documents as required under existing
forest laws and regulations constitute criminal liability for
violation of the Forestry Code. Under Section 68 of the
Forestry Code, there are two distinctand separate offenses
punished, namely: (1) cutting, gathering, collecting and
removing timber or other forest products from any forest
land, or timber from alienable or disposable public land, or
from private land withoutany authority; and (2) possession
of timber or other forest products without the legal
documents required under existing forest laws and
regulations.26
In the second offense, it is immaterial whether the cutting,
gathering, collecting and removal of the forest products
are legal or not. Mere possession of forest products
withoutthe proper documents consummates the crime.
Whether or not the lumber comes from a legal source is
immaterial because the Forestry Code is a special law
which considers mere possession of timber or other forest
products without the proper documentation as malum
prohibitum.27

In the present case, the magsihagonlumber were
admittedly owned by the petitioner but unfortunately no
permit evidencing authority to possess said lumber was
duly presented. Thus, the Information correctly charged
the petitioner with the second offense which is
consummated by the mere possession of forest products
without the proper documents. The prosecution adduced
several documents to prove that the lumber was
confiscated from the petitioner, namely: a Statement
Showing the Number/Pieces and Volume of Lumber Being
Confiscated on March 15, 1994, seizure receipt, a
photograph of the house of the petitioner, and a
photograph of the confiscated lumber. Moreso, the direct
and affirmative testimony of the DENR personnel as state
witnesses on the circumstances surrounding the
apprehension well establishes the petitioners liability.
As to the imposable penalty on the petitioner, the RTC
imposed an indeterminate sentence of six (6) years and
one (1) day of prision mayoras minimum to eleven (11)
years, six (6) months and twenty-one (21) days of prision
mayoras maximum.
The Court does not agree. This Court notes that the
estimated value of the confiscated pieces of lumber, as
appearing in the Statement Showing the Number/Pieces
and Volume of Lumber Being Confiscated is P9,040.00
which is alleged in the Information. However, except for
the testimonies of Abaniel and Butal that this amount is the
estimate based on prevailing local price as stated in the
apprehension receipt they issued, the prosecution did not
present any proof as tothe value of the lumber.
Clearly, this evidence does not suffice. The Court had
ruled that in order to prove the amount of the property
taken for fixing the penalty imposable against the accused
under Article 309 of the Revised Penal Code (RPC), the
prosecution must present more than a is the utilization of inalienable lands of public domain
mereuncorroborated "estimate" of such fact. In the
absence of independent and reliable corroboration of such
estimate, courts may either apply the minimum penalty
under Article 309 or fix the value of the property taken
based on the attendant circumstances of the case.28
Hence, the lower court erred in finding that the value of the
confiscated lumber is P9,040.00 for no evidence of such
value was established during the trial.
Accordingly, the Court imposes on the petitioner the
minimum penalty under Article 309(6)29 of the RPC,
whichis arresto mayorin its minimum and medium periods.
However, considering that violation of Section 68 of the
Forestry Code is punished as Qualified Theft under Article
31030 in relation to Article 309 of the RPC, the statutory
penalty shall be increased by two degrees, that is, to
prision correccionalin its medium and maximum periods or
within the range ofthree (3) years, six (6) months and
twenty-one (21) days to four (4) years, nine (9) months
and ten (10) days, considering that there are no attending
Law on NatRes (50-72 74
mitigating or aggravating circumstance in the commission
of the offense.
In accordance with current jurisprudence31 and taking into
account the Indeterminate Sentence Law, the Court finds it
proper to impose on the petitioner, in view of the
circumstances obtaining here, the penalty of frmr (4)
months and one (1) day of arresto mayor, as minimum, to
three (3) years, six (6) months and twenty-one (21) days of
prision correccional, as maximum. WHEREFORE, the
Decision on August 12, 2008 of the Regional Trial Court of
Talibon, Bohol, Branch 52, in Criminal Case No. 96-27, is
AFFIRMED with the MODIFICATION that petitioner Ma.
Mimie Crescencio is sentenced to suffer the indeterminate
penalty of four ( 4) months and one (1) day of arresto
mayor, as minimum, to three (3) years, six (6) months and
twenty-one (21) days of prision correccional, as maximum.
SO ORDERED.
MINERS ASSOCIATION OF THE PHILIPPINES, INC.,
petitioner, vs. HON. FULGENCIO S. FACTORAN, JR.,
Secretary of Environment and Natural Resources, and
JOEL D. MUYCO, Director of Mines and Geosciences
Bureau, respondents.; G.R. No. 98332 January 16,
1995
The instant petition seeks a ruling from this Court on the
validity of two Administrative Orders issued by the
Secretary of the Department of Environment and Natural
Resources to carry out the provisions of certain Executive
Orders promulgated by the President in the lawful exercise
of legislative powers.
Herein controversy was precipitated by the change
introduced by Article XII, Section 2 of the 1987
Constitution on the system of exploration, development
and utilization of the country's natural resources. No longer
through "license, concession or lease" under the 1935 and
1973 Constitutions 1 allowed under the 1987 Constitution.
The adoption of the concept of jura regalia 2 that all
natural resources are owned by the State embodied in the
1935, 1973 and 1987 Constitutions, as well as the
recognition of the importance of the country's natural
resources, not only for national economic development,
but also for its security and national
defense, 3 ushered in the adoption of the constitutional
policy of "full control and supervision by the State" in the
exploration, development and utilization of the country's
natural resources. The options open to the State are
through direct undertaking or by entering into co-
production, joint venture; or production-sharing
agreements, or by entering into agreement with foreign-
owned corporations for large-scale exploration,
development and utilization.
Article XII, Section 2 of the 1987 Constitution provides:

Sec. 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The
State may directly undertake such activities, or it may
enter into co-production, joint venture, or product-sharing
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
xxx xxx xxx
The President may enter into agreements with foreign-
owned corporations involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements,
the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution. (Emphasis supplied)
Pursuant to the mandate of the above-quoted provision,
legislative acts 4 were successively issued by the
President in the exercise of her legislative
power. 5
To implement said legislative acts, the Secretary of the
Department of Environment and Natural Resources
(DENR) in turn promulgated Administrative Order Nos. 57
and 82, the validity and constitutionality of which are being
challenged in this petition.
On July 10, 1987, President Corazon C. Aquino, in the
exercise of her then legislative powers under Article II,
Section 1 of the Provisional Constitution and Article XIII,
Section 6 of the 1987 Constitution, promulgated Executive
Order No. 211 prescribing the interim procedures in the
processing and approval of applications for the
exploration, development and utilization of minerals
pursuant to the 1987 Constitution in order to ensure the
continuity of mining operations and activities and to hasten
the development of mineral resources. The pertinent
provisions read as follows:
Law on NatRes (50-72 75
Sec. 1. Existing mining permits, licenses, leases and
other mining grants issued by the Department of
Environment and Natural Resources and Bureau of Mines
and Geo-Sciences, including existing operating
agreements and mining service contracts, shall continue
and remain in full force and effect, subject to the same
terms and conditions as originally granted and/or
approved.
Sec. 2. Applications for the exploration, development and
utilization of mineral resources, including renewal
applications for approval of operating agreements and
mining service contracts, shall be accepted and processed
and may be approved; concomitantly thereto, declarations
of locations and all other kinds of mining applications shall
be accepted and registered by the Bureau of Mines and
Geo-Sciences.
Sec. 3. The processing, evaluation and approval of all
mining applications, declarations of locations, operating
agreements and service contracts as provided for in
Section 2 above, shall be governed by Presidential Decree
No. 463, as amended, other existing mining laws and their
implementing rules and regulations: Provided, however,
that the privileges granted, as well as the terms and
conditions thereof shall be subject to any and all
modifications or alterations which Congress may adopt
pursuant to Section 2, Article XII of the 1987 Constitution.
On July 25, 1987, President Aquino likewise promulgated
Executive Order No. 279 authorizing the DENR Secretary
to negotiate and conclude joint venture, co-production, or
production-sharing agreements for the exploration,
development and utilization of mineral resources, and
prescribing the guidelines for such agreements and those
agreements involving technical or financial assistance by
foreign-owned corporations for large-scale exploration,
development, and utilization of minerals. The pertinent
provisions relevant to this petition are as follows:
Sec. 1. The Secretary of the Department of Environment
and Natural Resources (hereinafter referred to as "the
Secretary") is hereby authorized to negotiate and enter
into, for and in behalf of the Government, joint venture, co-
production, or production-sharing agreements for the
exploration, development, and utilization of mineral
resources with any Filipino citizens, or corporation or
association at least sixty percent (60%) of whose capital is
owned by Filipino citizens. Such joint venture, co-
production, or production-sharing agreements may be for
a period not exceeding twenty-five years, renewable for
not more than twenty-five years, and shall include the
minimum terms and conditions prescribed in Section 2
hereof. In the execution of a joint venture, co-production or
production agreements, the contracting parties, including
the Government, may consolidate two or more contiguous
or geologically related mining claims or leases and
consider them as one contract area for purposes of

determining the subject of the joint venture, co-production,
or production-sharing agreement.
xxx xxx xxx
Sec. 6. The Secretary shall promulgate such
supplementary rules and regulations as may be necessary
to effectively implement the provisions of this Executive
Order.
Sec. 7. All provisions of Presidential Decree No. 463, as
amended, other existing mining laws, and their
implementing rules and regulations, or parts thereof, which
are not inconsistent with the provisions of this Executive
Order, shall continue in force and effect.
Pursuant to Section 6 of Executive Order No. 279, the
DENR Secretary issued on June 23, 1989 DENR
Administrative Order No. 57, series of 1989, captioned
"Guidelines of Mineral Production Sharing Agreement
under Executive Order No. 279." 6 Under the transitory
provision of said DENR Administrative Order No. 57,
embodied in its Article 9, all existing mining leases or
agreements which were granted after the effectivity of the
1987 Constitution pursuant to Executive Order No. 211,
except small scale mining leases and those pertaining to
sand and gravel and quarry resources covering an area of
twenty (20) hectares or less, shall be converted into
production-sharing agreements within one (1) year from
the effectivity of these guidelines.
On November 20, 1980, the Secretary of the DENR
Administrative Order No. 82, series of 1990, laying down
the "Procedural Guidelines on the Award of Mineral
Production Sharing Agreement (MPSA) through
Negotiation." 7
Section 3 of the aforementioned DENR Administrative
Order No. 82 enumerates the persons or entities required
to submit Letter of Intent (LOIs) and Mineral Production
Sharing Agreement (MPSAs) within two (2) years from the
effectivity of DENR Administrative Order No. 57 or until
July 17, 1991. Failure to do so within the prescribed period
shall cause the abandonment of mining, quarry and sand
and gravel claims. Section 3 of DENR Administrative
Order No. 82 provides:
Sec. 3. Submission of Letter of Intent (LOIs) and
MPSAs). The following shall submit their LOIs and MPSAs
within two (2) years from the effectivity of DENR A.O. 57
or until July 17, 1991.
i. Declaration of Location (DOL) holders, mining
lease applicants, exploration permitees, quarry applicants
and other mining applicants whose mining/quarry
applications have not been perfected prior to the effectivity
of DENR Administrative Order No. 57.
Law on NatRes (50-72 76
ii. All holders of DOL acquired after the effectivity of
DENR A.O. No. 57.
iii. Holders of mining leases or similar agreements
which were granted after (the) effectivity of 1987
Constitution.
Failure to submit letters of intent and MPSA
applications/proposals within the prescribed period shall
cause the abandonment of mining, quarry and sand and
gravel claims.
The issuance and the impeding implementation by the
DENR of Administrative Order Nos. 57 and 82 after their
respective effectivity dates compelled the Miners
Association of the Philippines, Inc. 8 to file the instant
petition assailing their validity and constitutionality before
this Court.
In this petition for certiorari, petitioner Miners Association
of the Philippines, Inc. mainly contends that respondent
Secretary of DENR issued both Administrative Order Nos.
57 and 82 in excess of his rule-making power under
Section 6 of Executive Order No. 279. On the assumption
that the questioned administrative orders do not conform
with Executive Order Nos. 211 and 279, petitioner
contends that both orders violate the
non-impairment of contract provision under Article III,
Section 10 of the 1987 Constitution on the ground that
Administrative Order No. 57 unduly pre-terminates existing
mining agreements and automatically converts them into
production-sharing agreements within one (1) year from its
effectivity date. On the other hand, Administrative Order
No. 82 declares that failure to submit Letters of Intent and
Mineral Production-Sharing Agreements within two (2)
years from the date of effectivity of said guideline or on
July 17, 1991 shall cause the abandonment of their
mining, quarry and sand gravel permits.
On July 2, 1991, the Court, acting on petitioner's urgent
ex-parte petition for issuance of a restraining
order/preliminary injunction, issued a Temporary
Restraining Order, upon posting of a P500,000.00 bond,
enjoining the enforcement and implementation of DENR
Administrative Order Nos. 57 and 82, as amended, Series
of 1989 and 1990, respectively. 9
On November 13, 1991, Continental Marble Corporation,
10 thru its President, Felipe A. David, sought to intervene
11 in this case alleging that because of the temporary
order issued by the Court , the DENR, Regional Office No.
3 in San Fernando, Pampanga refused to renew its Mines
Temporary Permit after it expired on July 31, 1991.
Claiming that its rights and interests are prejudicially
affected by the implementation of DENR Administrative
Order Nos. 57 and 82, it joined petitioner herein in seeking
to annul Administrative Order Nos. 57 and 82 and prayed
that the DENR, Regional Office No. 3 be ordered to issue

a Mines Temporary Permit in its favor to enable it to
operate during the pendency of the suit.
Public respondents were acquired to comment on the
Continental Marble Corporation's petition for intervention in
the resolution of November 28, 1991. 12
Now to the main petition. If its argued that Administrative
Order Nos. 57 and 82 have the effect of repealing or
abrogating existing mining laws 13 which are not
inconsistent with the provisions of Executive Order No.
279. Invoking Section 7 of said Executive Order No. 279,
14 petitioner maintains that respondent DENR Secretary
cannot provide guidelines such as Administrative Order
Nos. 57 and 82 which are inconsistent with the provisions
of Executive Order No. 279 because both Executive Order
Nos. 211 and 279 merely reiterated the acceptance and
registration of declarations of location and all other kinds
of mining applications by the Bureau of Mines and Geo-
Sciences under the provisions of Presidential Decree No.
463, as amended, until Congress opts to modify or alter
the same.
In other words, petitioner would have us rule that DENR
Administrative Order Nos. 57 and 82 issued by the DENR
Secretary in the exercise of his rule-making power are
tainted with invalidity inasmuch as both contravene or
subvert the provisions of Executive Order Nos. 211 and
279 or embrace matters not covered, nor intended to be
covered, by the aforesaid laws.
We disagree.
We reiterate the principle that the power of administrative
officials to promulgate rules and regulations in the
implementation of a statute is necessarily limited only to
carrying into effect what is provided in the legislative
enactment. The principle was enunciated as early as 1908
in the case of United States v. Barrias. 15 The scope of
the exercise of such rule-making power was clearly
expressed in the case of United States v. Tupasi Molina,
16 decided in 1914, thus: "Of course, the regulations
adopted under legislative authority by a particular
department must be in harmony with the provisions of the
law, and for the sole purpose of carrying into effect its
general provisions. By such regulations, of course, the law
itself can not be extended. So long, however, as the
regulations relate solely to carrying into effect its general
provisions. By such regulations, of course, the law itself
can not be extended. So long, however, as the regulations
relate solely to carrying into effect the provision of the law,
they are valid."
Recently, the case of People v. Maceren 17 gave a brief
delienation of the scope of said power of administrative
officials:
Administrative regulations adopted under legislative
authority by a particular department must be in harmony
Law on NatRes (50-72 77
with the provisions of the law, and should be for the sole
purpose of carrying into effect its general provision. By
such regulations, of course, the law itself cannot be
extended (U.S. v. Tupasi Molina, supra). An administrative
agency cannot amend an act of Congress (Santos vs.
Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the
Board of Administrators, L-25619, June 30, 1970, 33
SCRA 585; Manuel vs. General Auditing Office, L-28952,
December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-
21906, August 29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for
regulating the mode or proceeding to carry into effect the
law as it has been enacted. The power cannot be
extended to amending or expanding the statutory
requirements or to embrace matters not covered by the
statute. Rules that subvert the statute cannot be
sanctioned (University of Santo Tomas v. Board of Tax
Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to
invalid regulations, see Collector of Internal Revenue v.
Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78 Phil. 655,
676; Del Mar v. Phil. Veterans Administration, L-27299,
June 27, 1973, 51 SCRA 340, 349).
xxx xxx xxx
. . . The rule or regulation should be within the scope of the
statutory authority granted by the legislature to the
administrative agency (Davis, Administrative Law, p. 194,
197, cited in Victorias Milling Co., Inc. v. Social Security
Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic prevails
because said rule or regulations cannot go beyond the
terms and provisions of the basic law (People v. Lim, 108
Phil. 1091).
Considering that administrative rules draw life from the
statute which they seek to implement, it is obvious that the
spring cannot rise higher than its source. We now examine
petitioner's argument that DENR Administrative Order
Nos. 57 and 82 contravene Executive Order Nos. 211 and
279 as both operate to repeal or abrogate Presidential
Decree No. 463, as amended, and other mining laws
allegedly acknowledged as the principal law under
Executive Order Nos. 211 and 279.
Petitioner's insistence on the application of Presidential
Decree No. 463, as amended, as the governing law on the
acceptance and approval of declarations of location and all
other kinds of applications for the exploration,
development, and utilization of mineral resources pursuant
to Executive Order No. 211, is erroneous. Presidential
Decree No. 463, as amended, pertains to the old system
of exploration, development and utilization of natural
resources through "license, concession or lease" which,
however, has been disallowed by Article XII, Section 2 of
the 1987 Constitution. By virtue of the said constitutional

mandate and its implementing law, Executive Order No.
279 which superseded Executive Order No. 211, the
provisions dealing on "license, concession or lease" of
mineral resources under Presidential Decree No. 463, as
amended, and other existing mining laws are deemed
repealed and, therefore, ceased to operate as the
governing law. In other words, in all other areas of
administration and management of mineral lands, the
provisions of Presidential Decree No. 463, as amended,
and other existing mining laws, still govern. Section 7 of
Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as
amended, other existing mining laws, and their
implementing rules and regulations, or parts thereof, which
are not inconsistent with the provisions of this Executive
Order, shall continue in force and effect.
Specifically, the provisions of Presidential Decree No. 463,
as amended, on lease of mining claims under Chapter VIII,
quarry permits on privately-owned lands of quarry license
on public lands under Chapter XIII and other related
provisions on lease, license and permits are not only
inconsistent with the raison d'etre for which Executive
Order No. 279 was passed, but contravene the express
mandate of Article XII, Section 2 of the 1987 Constitution.
It force and effectivity is thus foreclosed.
Upon the effectivity of the 1987 Constitution on February
2, 1987, 18 the State assumed a more dynamic role in the
exploration, development and utilization of the natural
resources of the country. Article XII, Section 2 of the said
Charter explicitly ordains that the exploration, development
and utilization of natural resources shall be under the full
control and supervision of the State. Consonant therewith,
the exploration, development and utilization of natural
resources may be undertaken by means of direct act of
the State, or it may opt to enter into co-production, joint
venture, or production-sharing agreements, or it may enter
into agreements with foreign-owned corporations involving
either technical or financial assistance for large-scale
exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general
terms and conditions provided by law, based on real
contributions to the economic growth and general welfare
of the country.
Given these considerations, there is no clear showing that
respondent DENR Secretary has transcended the bounds
demarcated by Executive Order No. 279 for the exercise
of his rule-making power tantamount to a grave abuse of
discretion. Section 6 of Executive Order No. 279
specifically authorizes said official to promulgate such
supplementary rules and regulations as may be necessary
to effectively implement the provisions thereof. Moreover,
the subject sought to be governed and regulated by the
questioned orders is germane to the objects and purposes
of Executive Order No. 279 specifically issued to carry out
Law on NatRes (50-72 78
the mandate of Article XII, Section 2 of the 1987
Constitution.
Petitioner likewise maintains that Administrative Order No.
57, in relation to Administrative Order No. 82, impairs
vested rights as to violate the non-impairment of contract
doctrine guaranteed under Article III, Section 10 of the
1987 Constitution because Article 9 of Administrative
Order No. 57 unduly pre-terminates and automatically
converts mining leases and other mining agreements into
production-sharing agreements within one (1) year from
effectivity of said guideline, while Section 3 of
Administrative Order No. 82, declares that failure to submit
Letters of Intent (LOIs) and MPSAs within two (2) years
from the effectivity of Administrative Order No. 57 or until
July 17, 1991 shall cause the abandonment of mining,
quarry, and sand gravel permits.
In Support of the above contention, it is argued by
petitioner that Executive Order No. 279 does not
contemplate automatic conversion of mining lease
agreements into mining production-sharing agreement as
provided under Article 9, Administrative Order No. 57
and/or the consequent abandonment of mining claims for
failure to submit LOIs and MPSAs under Section 3,
Administrative Order No. 82 because Section 1 of said
Executive Order No. 279 empowers the DENR Secretary
to negotiate and enter into voluntary agreements which
must set forth the minimum terms and conditions provided
under Section 2 thereof. Moreover, petitioner contends
that the power to regulate and enter into mining
agreements does not include the power to preterminate
existing mining lease agreements.
To begin with, we dispel the impression created by
petitioner's argument that the questioned administrative
orders unduly preterminate existing mining leases in
general. A distinction which spells a real difference must
be drawn. Article XII, Section 2 of the 1987 Constitution
does not apply retroactively to "license, concession or
lease" granted by the government under the 1973
Constitution or before the effectivity of the 1987
Constitution on February 2, 1987. The intent to apply
prospectively said constitutional provision was stressed
during the deliberations in the Constitutional Commission,
19 thus:
MR. DAVIDE: Under the proposal, I notice that except for
the [inalienable] lands of the public domain, all other
natural resources cannot be alienated and in respect to
[alienable] lands of the public domain, private corporations
with the required ownership by Filipino citizens can only
lease the same. Necessarily, insofar as other natural
resources are concerned, it would only be the State which
can exploit, develop, explore and utilize the same.
However, the State may enter into a joint venture, co-
production or production-sharing. Is that not correct?
MR. VILLEGAS: Yes.

MR. DAVIDE: Consequently, henceforth upon, the
approval of this Constitution, no timber or forest
concession, permits or authorization can be exclusively
granted to any citizen of the Philippines nor to any
corporation qualified to acquire lands of the public
domain?
MR. VILLEGAS: Would Commissioner Monsod like to
comment on that? I think his answer is "yes."
MR. DAVIDE: So, what will happen now license or
concessions earlier granted by the Philippine government
to private corporations or to Filipino citizens? Would they
be deemed repealed?
MR. VILLEGAS: This is not applied retroactively. They will
be respected.
MR. DAVIDE: In effect, they will be deemed repealed?
MR. VILLEGAS: No. (Emphasis supplied)
During the transition period or after the effectivity of the
1987 Constitution on February 2, 1987 until the first
Congress under said Constitution was convened on July
27, 1987, two (2) successive laws, Executive Order Nos.
211 and 279, were promulgated to govern the processing
and approval of applications for the exploration,
development and utilization of minerals. To carry out the
purposes of said laws, the questioned Administrative
Order Nos. 57 and 82, now being assailed, were issued by
the DENR Secretary.
Article 9 of Administrative Order No. 57 provides:
ARTICLE 9
TRANSITORY PROVISION
9.1. All existing mining leases or agreements which
were granted after the effectivity of the 1987 Constitution
pursuant to Executive Order No. 211, except small scale
mining leases and those pertaining to sand and gravel and
quarry resources covering an area of twenty (20) hectares
or less shall be subject to these guidelines. All such leases
or agreements shall be converted into production sharing
agreement within one (1) year from the effectivity of these
guidelines. However, any minimum firm which has
established mining rights under Presidential Decree 463 or
other laws may avail of the provisions of EO 279 by
following the procedures set down in this document.
It is clear from the aforestated provision that Administrative
Order No. 57 applies only to all existing mining leases or
agreements which were granted after the effectivity of the
1987 Constitution pursuant to Executive Order No. 211. It
bears mention that under the text of Executive Order No.
211, there is a reservation clause which provides that the
Law on NatRes (50-72 79
privileges as well as the terms and conditions of all
existing mining leases or agreements granted after the
effectivity of the 1987 Constitution pursuant to Executive
Order No. 211, shall be subject to any and all
modifications or alterations which Congress may adopt
pursuant to Article XII, Section 2 of the 1987 Constitution.
Hence, the strictures of the
non-impairment of contract clause under Article III, Section
10 of the 1987 Constitution 20 do not apply to the
aforesaid leases or agreements granted after the
effectivity of the 1987 Constitution, pursuant to Executive
Order No. 211. They can be amended, modified or altered
by a statute passed by Congress to achieve the purposes
of Article XII, Section 2 of the 1987 Constitution.
Clearly, Executive Order No. 279 issued on July 25, 1987
by President Corazon C. Aquino in the exercise of her
legislative power has the force and effect of a statute or
law passed by Congress. As such, it validly modified or
altered the privileges granted, as well as the terms and
conditions of mining leases and agreements under
Executive Order No. 211 after the effectivity of the 1987
Constitution by authorizing the DENR Secretary to
negotiate and conclude joint venture, co-production, or
production-sharing agreements for the exploration,
development and utilization of mineral resources and
prescribing the guidelines for such agreements and those
agreements involving technical or financial assistance by
foreign-owned corporations for large-scale exploration,
development, and utilization of minerals.
Well -settled is the rule, however, that regardless of the
reservation clause, mining leases or agreements granted
by the State, such as those granted pursuant to Executive
Order No. 211 referred to this petition, are subject to
alterations through a reasonable exercise of the police
power of the State. In the 1950 case of Ongsiako v.
Gamboa, 21 where the constitutionality of Republic Act
No. 34 changing the 50-50 sharecropping system in
existing agricultural tenancy contracts to 55-45 in favor of
tenants was challenged, the Court, upholding the
constitutionality of the law, emphasized the superiority of
the police power of the State over the sanctity of this
contract:
The prohibition contained in constitutional provisions
against: impairing the obligation of contracts is not an
absolute one and it is not to be read with literal exactness
like a mathematical formula. Such provisions are restricted
to contracts which respect property, or some object or
value, and confer rights which may be asserted in a court
of justice, and have no application to statute relating to
public subjects within the domain of the general legislative
powers of the State, and involving the public rights and
public welfare of the entire community affected by it. They
do not prevent a proper exercise by the State of its police
powers. By enacting regulations reasonably necessary to
secure the health, safety, morals, comfort, or general
welfare of the community, even the contracts may thereby

be affected; for such matter can not be placed by contract
beyond the power of the State shall regulates and control
them. 22
In Ramas v. CAR and Ramos 23 where the
constitutionality of Section 14 of Republic Act No. 1199
authorizing the tenants to charge from share to leasehold
tenancy was challenged on the ground that it impairs the
obligation of contracts, the Court ruled that obligations of
contracts must yield to a proper exercise of the police
power when such power is exercised to preserve the
security of the State and the means adopted are
reasonably adapted to the accomplishment of that end and
are, therefore, not arbitrary or oppressive.
The economic policy on the exploration, development and
utilization of the country's natural resources under Article
XII, Section 2 of the 1987 Constitution could not be any
clearer. As enunciated in Article XII, Section 1 of the 1987
Constitution, the exploration, development and utilization
of natural resources under the new system mandated in
Section 2, is geared towards a more equitable distribution
of opportunities, income, and wealth; a sustained increase
in the amount of goods and services produced by the
nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all,
especially the underprivileged.
The exploration, development and utilization of the
country's natural resources are matters vital to the public
interest and the general welfare of the people. The
recognition of the importance of the country's natural
resources was expressed as early as the 1984
Constitutional Convention. In connection therewith, the
1986 U.P. Constitution Project observed: "The 1984
Constitutional Convention recognized the importance of
our natural resources not only for its security and national
defense. Our natural resources which constitute the
exclusive heritage of the Filipino nation, should be
preserved for those under the sovereign authority of that
nation and for their prosperity. This will ensure the
country's survival as a viable and sovereign republic."
Accordingly, the State, in the exercise of its police power
in this regard, may not be precluded by the constitutional
restriction on non-impairment of contract from altering,
modifying and amending the mining leases or agreements
granted under Presidential Decree No. 463, as amended,
pursuant to Executive Order No. 211. Police Power, being
co-extensive with the necessities of the case and the
demands of public interest; extends to all the vital public
needs. The passage of Executive Order No. 279 which
superseded Executive Order No. 211 provided legal basis
for the DENR Secretary to carry into effect the mandate of
Article XII, Section 2 of the 1987 Constitution.
Nowhere in Administrative Order No. 57 is there any
provision which would lead us to conclude that the
questioned order authorizes the automatic conversion of
Law on NatRes (50-72 80
mining leases and agreements granted after the effectivity
of the 1987 Constitution, pursuant to Executive Order No.
211, to production-sharing agreements. The provision in
Article 9 of Administrative Order No. 57 that "all such
leases or agreements shall be converted into production
sharing agreements within one (1) year from the effectivity
of these guidelines" could not possibility contemplate a
unilateral declaration on the part of the Government that
all existing mining leases and agreements are
automatically converted into
production-sharing agreements. On the contrary, the use
of the term "production-sharing agreement" if they are so
minded. Negotiation negates compulsion or automatic
conversion as suggested by petitioner in the instant
petition. A mineral production-sharing agreement (MPSA)
requires a meeting of the minds of the parties after
negotiations arrived at in good faith and in accordance
with the procedure laid down in the subsequent
Administrative Order No. 82.
We, therefore, rule that the questioned administrative
orders are reasonably directed to the accomplishment of
the purposes of the law under which they were issued and
were intended to secure the paramount interest of the
public, their economic growth and welfare. The validity and
constitutionality of Administrative Order Nos. 57 and 82
must be sustained, and their force and effect upheld.
We now, proceed to the petition-in-intervention. Under
Section 2, Rule 12 of the Revised Rules of Court, an
intervention in a case is proper when the intervenor has a
"legal interest in the matter in litigation, or in the success of
either of the parties, or an interest against both, or when
he is so situated as to be adversely affected by a
distribution or other disposition of property in the custody
of the court or of an officer thereof. "Continental Marble
Corporation has not sufficiently shown that it falls under
any of the categories mentioned above. The refusal of the
DENR, Regional Office No. 3, San Fernando, Pampanga
to renew its Mines Temporary Permit does not justify such
an intervention by Continental Marble Corporation for the
purpose of obtaining a directive from this Court for the
issuance of said permit. Whether or not Continental
Marble matter best addressed to the appropriate
government body but certainly, not through this Court.
Intervention is hereby DENIED.
WHEREFORE, the petition is DISMISSED for lack of
merit. The Temporary Restraining Order issued on July 2,
1991 is hereby LIFTED. SO ORDERED.
LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC.,
Represented by its Chairman FLONG MIGUEL M.
LUMAYONG; WIGBERTO E. TAADA; PONCIANO
BENNAGEN; JAIME TADEO; RENATO R.
CONSTANTINO JR.; FLONG AGUSTIN M. DABIE;
ROBERTO P. AMLOY; RAQIM L. DABIE; SIMEON H.
DOLOJO; IMELDA M. GANDON; LENY B. GUSANAN;
MARCELO L. GUSANAN; QUINTOL A. LABUAYAN;
LOMINGGES D. LAWAY; BENITA P. TACUAYAN;

Minors JOLY L. BUGOY, Represented by His Father
UNDERO D. BUGOY and ROGER M. DADING;
Represented by His Father ANTONIO L. DADING;
ROMY M. LAGARO, Represented by His Father
TOTING A. LAGARO; MIKENY JONG B. LUMAYONG,
Represented by His Father MIGUEL M. LUMAYONG;
RENE T. MIGUEL, Represented by His Mother EDITHA
T. MIGUEL; ALDEMAR L. SAL, Represented by His
Father DANNY M. SAL; DAISY RECARSE, Represented
by Her Mother LYDIA S. SANTOS; EDWARD M. EMUY;
ALAN P. MAMPARAIR; MARIO L. MANGCAL; ALDEN
S. TUSAN; AMPARO S. YAP; VIRGILIO CULAR;
MARVIC M.V.F. LEONEN; JULIA REGINA CULAR,
GIAN CARLO CULAR, VIRGILIO CULAR JR.,
Represented by Their Father VIRGILIO CULAR; PAUL
ANTONIO P. VILLAMOR, Represented by His Parents
JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR;
ANA GININA R. TALJA, Represented by Her Father
MARIO JOSE B. TALJA; SHARMAINE R. CUNANAN,
Represented by Her Father ALFREDO M. CUNANAN;
ANTONIO JOSE A. VITUG III, Represented by His
Mother ANNALIZA A. VITUG, LEAN D. NARVADEZ,
Represented by His Father MANUEL E. NARVADEZ
JR.; ROSERIO MARALAG LINGATING, Represented by
Her Father RIO OLIMPIO A. LINGATING; MARIO JOSE
B. TALJA; DAVID E. DE VERA; MARIA MILAGROS L.
SAN JOSE; Sr. SUSAN O. BOLANIO, OND; LOLITA G.
DEMONTEVERDE; BENJIE L. NEQUINTO;[1] ROSE
LILIA S. ROMANO; ROBERTO S. VERZOLA;
EDUARDO AURELIO C. REYES; LEAN LOUEL A.
PERIA, Represented by His Father ELPIDIO V.
PERIA;[2] GREEN FORUM PHILIPPINES; GREEN
FORUM WESTERN VISAYAS (GF-WV);
ENVIRONMENTAL LEGAL ASSISTANCE CENTER
(ELAC); KAISAHAN TUNGO SA KAUNLARAN NG
KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN);[3] PARTNERSHIP FOR AGRARIAN
REFORM and RURAL DEVELOPMENT SERVICES, INC.
(PARRDS); PHILIPPINE PARTNERSHIP FOR THE
DEVELOPMENT OF HUMAN RESOURCES IN THE
RURAL AREAS, INC. (PHILDHRRA); WOMENS LEGAL
BUREAU (WLB); CENTER FOR ALTERNATIVE
DEVELOPMENT INITIATIVES, INC. (CADI); UPLAND
DEVELOPMENT INSTITUTE (UDI); KINAIYAHAN
FOUNDATION, INC.; SENTRO NG ALTERNATIBONG
LINGAP PANLIGAL (SALIGAN); and LEGAL RIGHTS
AND NATURAL RESOURCES CENTER, INC. (LRC),
petitioners, vs. VICTOR O. RAMOS, Secretary,
Department of Environment and Natural Resources
(DENR); HORACIO RAMOS, Director, Mines and
Geosciences Bureau (MGB-DENR); RUBEN TORRES,
Executive Secretary; and WMC (PHILIPPINES), INC.,[4]
respondents.; [G.R. No. 127882. December 1, 2004]
The present petition for mandamus and prohibition assails
the constitutionality of Republic Act No. 7942,5 otherwise
known as the PHILIPPINE MINING ACT OF 1995, along
with the Implementing Rules and Regulations issued
pursuant thereto, Department of Environment and Natural
Law on NatRes (50-72 81
Resources (DENR) Administrative Order 96-40, and of the
Financial and Technical Assistance Agreement (FTAA)
entered into on March 30, 1995 by the Republic of the
Philippines and WMC (Philippines), Inc. (WMCP), a
corporation organized under Philippine laws.
On July 25, 1987, then President Corazon C. Aquino
issued Executive Order (E.O.) No. 2796 authorizing the
DENR Secretary to accept, consider and evaluate
proposals from foreign-owned corporations or foreign
investors for contracts or agreements involving either
technical or financial assistance for large-scale
exploration, development, and utilization of minerals,
which, upon appropriate recommendation of the Secretary,
the President may execute with the foreign proponent. In
entering into such proposals, the President shall consider
the real contributions to the economic growth and general
welfare of the country that will be realized, as well as the
development and use of local scientific and technical
resources that will be promoted by the proposed contract
or agreement. Until Congress shall determine otherwise,
large-scale mining, for purpose of this Section, shall mean
those proposals for contracts or agreements for mineral
resources exploration, development, and utilization
involving a committed capital investment in a single mining
unit project of at least Fifty Million Dollars in United States
Currency (US $50,000,000.00).7
On March 3, 1995, then President Fidel V. Ramos
approved R.A. No. 7942 to "govern the exploration,
development, utilization and processing of all mineral
resources."8 R.A. No. 7942 defines the modes of mineral
agreements for mining operations,9 outlines the procedure
for their filing and approval,10 assignment/transfer11 and
withdrawal,12 and fixes their terms.13 Similar provisions
govern financial or technical assistance agreements.14
The law prescribes the qualifications of contractors15 and
grants them certain rights, including timber,16 water17 and
easement18 rights, and the right to possess explosives.19
Surface owners, occupants, or concessionaires are
forbidden from preventing holders of mining rights from
entering private lands and concession areas.20 A
procedure for the settlement of conflicts is likewise
provided for.21
The Act restricts the conditions for exploration,22 quarry23
and other24 permits. It regulates the transport, sale and
processing of minerals,25 and promotes the development
of mining communities, science and mining technology,26
and safety and environmental protection.27
The government's share in the agreements is spelled out
and allocated,28 taxes and fees are imposed,29 incentives
granted.30 Aside from penalizing certain acts,31 the law
likewise specifies grounds for the cancellation, revocation
and termination of agreements and permits.32

On April 9, 1995, 30 days following its publication on
March 10, 1995 in Malaya and Manila Times, two
newspapers of general circulation, R.A. No. 7942 took
effect.33 Shortly before the effectivity of R.A. No. 7942,
however, or on March 30, 1995, the President entered into
an FTAA with WMCP covering 99,387 hectares of land in
South Cotabato, Sultan Kudarat, Davao del Sur and North
Cotabato.34
On August 15, 1995, then DENR Secretary Victor O.
Ramos issued DENR Administrative Order (DAO) No. 95-
23, s. 1995, otherwise known as the Implementing Rules
and Regulations of R.A. No. 7942. This was later repealed
by DAO No. 96-40, s. 1996 which was adopted on
December 20, 1996.
On January 10, 1997, counsels for petitioners sent a letter
to the DENR Secretary demanding that the DENR stop the
implementation of R.A. No. 7942 and DAO No. 96-40,35
giving the DENR fifteen days from receipt36 to act
thereon. The DENR, however, has yet to respond or act
on petitioners' letter.37
Petitioners thus filed the present petition for prohibition
and mandamus, with a prayer for a temporary restraining
order. They allege that at the time of the filing of the
petition, 100 FTAA applications had already been filed,
covering an area of 8.4 million hectares,38 64 of which
applications are by fully foreign-owned corporations
covering a total of 5.8 million hectares, and at least one by
a fully foreign-owned mining company over offshore
areas.39
Petitioners claim that the DENR Secretary acted without or
in excess of jurisdiction:
I They pray that the Court issue an order:
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it allows fully foreign
owned corporations to explore, develop, utilize and exploit
mineral resources in a manner contrary to Section 2,
paragraph 4, Article XII of the Constitution;
II
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it allows the taking of
private property without the determination of public use
and for just compensation;
III
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it violates Sec. 1, Art. III
of the Constitution;
Law on NatRes (50-72 82
IV
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it allows enjoyment by
foreign citizens as well as fully foreign owned corporations
of the nation's marine wealth contrary to Section 2,
paragraph 2 of Article XII of the Constitution;
V
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it allows priority to
foreign and fully foreign owned corporations in the
exploration, development and utilization of mineral
resources contrary to Article XII of the Constitution;
VI
x x x in signing and promulgating DENR Administrative
Order No. 96-40 implementing Republic Act No. 7942, the
latter being unconstitutional in that it allows the inequitable
sharing of wealth contrary to Sections [sic] 1, paragraph 1,
and Section 2, paragraph 4[,] [Article XII] of the
Constitution;
VII
x x x in recommending approval of and implementing the
Financial and Technical Assistance Agreement between
the President of the Republic of the Philippines and
Western Mining Corporation Philippines Inc. because the
same is illegal and unconstitutional.40
(a) Permanently enjoining respondents from acting on any
application for Financial or Technical Assistance
Agreements;
(b) Declaring the Philippine Mining Act of 1995 or Republic
Act No. 7942 as unconstitutional and null and void;
(c) Declaring the Implementing Rules and Regulations of
the Philippine Mining Act contained in DENR
Administrative Order No. 96-40 and all other similar
administrative issuances as unconstitutional and null and
void; and
(d) Cancelling the Financial and Technical Assistance
Agreement issued to Western Mining Philippines, Inc. as
unconstitutional, illegal and null and void.41
Impleaded as public respondents are Ruben Torres, the
then Executive Secretary, Victor O. Ramos, the then
DENR Secretary, and Horacio Ramos, Director of the
Mines and Geosciences Bureau of the DENR. Also

impleaded is private respondent WMCP, which entered
into the assailed FTAA with the Philippine Government.
WMCP is owned by WMC Resources International Pty.,
Ltd. (WMC), "a wholly owned subsidiary of Western Mining
Corporation Holdings Limited, a publicly listed major
Australian mining and exploration company."42 By
WMCP's information, "it is a 100% owned subsidiary of
WMC LIMITED."43
Respondents, aside from meeting petitioners' contentions,
argue that the requisites for judicial inquiry have not been
met and that the petition does not comply with the criteria
for prohibition and mandamus. Additionally, respondent
WMCP argues that there has been a violation of the rule
on hierarchy of courts.
After petitioners filed their reply, this Court granted due
course to the petition. The parties have since filed their
respective memoranda.
WMCP subsequently filed a Manifestation dated
September 25, 2002 alleging that on January 23, 2001,
WMC sold all its shares in WMCP to Sagittarius Mines,
Inc. (Sagittarius), a corporation organized under Philippine
laws.44 WMCP was subsequently renamed "Tampakan
Mineral Resources Corporation."45 WMCP claims that at
least 60% of the equity of Sagittarius is owned by Filipinos
and/or Filipino-owned corporations while about 40% is
owned by Indophil Resources NL, an Australian
company.46 It further claims that by such sale and transfer
of shares, "WMCP has ceased to be connected in any way
with WMC."47
By virtue of such sale and transfer, the DENR Secretary,
by Order of December 18, 2001,48 approved the transfer
and registration of the subject FTAA from WMCP to
Sagittarius. Said Order, however, was appealed by
Lepanto Consolidated Mining Co. (Lepanto) to the Office
of the President which upheld it by Decision of July 23,
2002.49 Its motion for reconsideration having been denied
by the Office of the President by Resolution of November
12, 2002,50 Lepanto filed a petition for review51 before
the Court of Appeals. Incidentally, two other petitions for
review related to the approval of the transfer and
registration of the FTAA to Sagittarius were recently
resolved by this Court.52
It bears stressing that this case has not been rendered
moot either by the transfer and registration of the FTAA to
a Filipino-owned corporation or by the non-issuance of a
temporary restraining order or a preliminary injunction to
stay the above-said July 23, 2002 decision of the Office of
the President.53 The validity of the transfer remains in
dispute and awaits final judicial determination. This
assumes, of course, that such transfer cures the FTAA's
alleged unconstitutionality, on which question judgment is
reserved.
Law on NatRes (50-72 83
WMCP also points out that the original claimowners of the
major mineralized areas included in the WMCP FTAA,
namely, Sagittarius, Tampakan Mining Corporation, and
Southcot Mining Corporation, are all Filipino-owned
corporations,54 each of which was a holder of an
approved Mineral Production Sharing Agreement awarded
in 1994, albeit their respective mineral claims were
subsumed in the WMCP FTAA;55 and that these three
companies are the same companies that consolidated
their interests in Sagittarius to whom WMC sold its 100%
equity in WMCP.56 WMCP concludes that in the event
that the FTAA is invalidated, the MPSAs of the three
corporations would be revived and the mineral claims
would revert to their original claimants.57
These circumstances, while informative, are hardly
significant in the resolution of this case, it involving the
validity of the FTAA, not the possible consequences of its
invalidation.
Of the above-enumerated seven grounds cited by
petitioners, as will be shown later, only the first and the
last need be delved into; in the latter, the discussion shall
dwell only insofar as it questions the effectivity of E. O. No.
279 by virtue of which order the questioned FTAA was
forged.
I
Before going into the substantive issues, the procedural
questions posed by respondents shall first be tackled.
REQUISITES FOR JUDICIAL REVIEW
When an issue of constitutionality is raised, this Court can
exercise its power of judicial review only if the following
requisites are present:
(1) The existence of an actual and appropriate case;
(2) A personal and substantial interest of the party raising
the constitutional question;
(3) The exercise of judicial review is pleaded at the earliest
opportunity; and
(4) The constitutional question is the lis mota of the case.
58
Respondents claim that the first three requisites are not
present.
Section 1, Article VIII of the Constitution states that
"(j)udicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable." The power of
judicial review, therefore, is limited to the determination of
actual cases and controversies.59

An actual case or controversy means an existing case or
controversy that is appropriate or ripe for determination,
not conjectural or anticipatory,60 lest the decision of the
court would amount to an advisory opinion.61 The power
does not extend to hypothetical questions62 since any
attempt at abstraction could only lead to dialectics and
barren legal questions and to sterile conclusions unrelated
to actualities.63
"Legal standing" or locus standi has been defined as a
personal and substantial interest in the case such that the
party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged,64
alleging more than a generalized grievance.65 The gist of
the question of standing is whether a party alleges "such
personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for
illumination of difficult constitutional questions."66 Unless
a person is injuriously affected in any of his constitutional
rights by the operation of statute or ordinance, he has no
standing.67
Petitioners traverse a wide range of sectors. Among them
are La Bugal B'laan Tribal Association, Inc., a farmers and
indigenous people's cooperative organized under
Philippine laws representing a community actually affected
by the mining activities of WMCP, members of said
cooperative,68 as well as other residents of areas also
affected by the mining activities of WMCP.69 These
petitioners have standing to raise the constitutionality of
the questioned FTAA as they allege a personal and
substantial injury. They claim that they would suffer
"irremediable displacement"70 as a result of the
implementation of the FTAA allowing WMCP to conduct
mining activities in their area of residence. They thus meet
the appropriate case requirement as they assert an
interest adverse to that of respondents who, on the other
hand, insist on the FTAA's validity.
In view of the alleged impending injury, petitioners also
have standing to assail the validity of E.O. No. 279, by
authority of which the FTAA was executed.
Public respondents maintain that petitioners, being
strangers to the FTAA, cannot sue either or both
contracting parties to annul it.71 In other words, they
contend that petitioners are not real parties in interest in
an action for the annulment of contract.
Public respondents' contention fails. The present action is
not merely one for annulment of contract but for prohibition
and mandamus. Petitioners allege that public respondents
acted without or in excess of jurisdiction in implementing
the FTAA, which they submit is unconstitutional. As the
case involves constitutional questions, this Court is not
concerned with whether petitioners are real parties in
interest, but with whether they have legal standing. As
held in Kilosbayan v. Morato:72
Law on NatRes (50-72 84
x x x. "It is important to note . . . that standing because of
its constitutional and public policy underpinnings, is very
different from questions relating to whether a particular
plaintiff is the real party in interest or has capacity to sue.
Although all three requirements are directed towards
ensuring that only certain parties can maintain an action,
standing restrictions require a partial consideration of the
merits, as well as broader policy concerns relating to the
proper role of the judiciary in certain areas.["]
(FRIEDENTHAL, KANE AND MILLER, CIVIL
PROCEDURE 328 [1985])
Standing is a special concern in constitutional law because
in some cases suits are brought not by parties who have
been personally injured by the operation of a law or by
official action taken, but by concerned citizens, taxpayers
or voters who actually sue in the public interest. Hence,
the question in standing is whether such parties have
"alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional
questions." (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633
[1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No.
7942 and DAO No. 96-40 likewise fulfills the requisites of
justiciability. Although these laws were not in force when
the subject FTAA was entered into, the question as to their
validity is ripe for adjudication.
The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial
&Technical Assistance Agreement contractors resulting
from repeal or amendment of any existing law or
regulation or from the enactment of a law, regulation or
administrative order shall be considered a part of this
Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40
contain provisions that are more favorable to WMCP,
hence, these laws, to the extent that they are favorable to
WMCP, govern the FTAA.
In addition, R.A. No. 7942 explicitly makes certain
provisions apply to pre-existing agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying
Rights. x x x That the provisions of Chapter XIV on
government share in mineral production-sharing
agreement and of Chapter XVI on incentives of this Act
shall immediately govern and apply to a mining lessee or
contractor unless the mining lessee or contractor indicates

his intention to the secretary, in writing, not to avail of said
provisions x x x Provided, finally, That such leases,
production-sharing agreements, financial or technical
assistance agreements shall comply with the applicable
provisions of this Act and its implementing rules and
regulations.
As there is no suggestion that WMCP has indicated its
intention not to avail of the provisions of Chapter XVI of
R.A. No. 7942, it can safely be presumed that they apply
to the WMCP FTAA.
Misconstruing the application of the third requisite for
judicial review that the exercise of the review is pleaded
at the earliest opportunity WMCP points out that the
petition was filed only almost two years after the execution
of the FTAA, hence, not raised at the earliest opportunity.
The third requisite should not be taken to mean that the
question of constitutionality must be raised immediately
after the execution of the state action complained of. That
the question of constitutionality has not been raised before
is not a valid reason for refusing to allow it to be raised
later.73 A contrary rule would mean that a law, otherwise
unconstitutional, would lapse into constitutionality by the
mere failure of the proper party to promptly file a case to
challenge the same.
PROPRIETY OF PROHIBITION AND MANDAMUS
Before the effectivity in July 1997 of the Revised Rules of
Civil Procedure, Section 2 of Rule 65 read:
SEC. 2. Petition for prohibition. When the proceedings of
any tribunal, corporation, board, or person, whether
exercising functions judicial or ministerial, are without or in
excess of its or his jurisdiction, or with grave abuse of
discretion, and there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition
in the proper court alleging the facts with certainty and
praying that judgment be rendered commanding the
defendant to desist from further proceeding in the action or
matter specified therein.
Prohibition is a preventive remedy.74 It seeks a judgment
ordering the defendant to desist from continuing with the
commission of an act perceived to be illegal.75
The petition for prohibition at bar is thus an appropriate
remedy. While the execution of the contract itself may be
fait accompli, its implementation is not. Public
respondents, in behalf of the Government, have
obligations to fulfill under said contract. Petitioners seek to
prevent them from fulfilling such obligations on the theory
that the contract is unconstitutional and, therefore, void.
Law on NatRes (50-72 85
The propriety of a petition for prohibition being upheld,
discussion of the propriety of the mandamus aspect of the
petition is rendered unnecessary.
HIERARCHY OF COURTS
The contention that the filing of this petition violated the
rule on hierarchy of courts does not likewise lie. The rule
has been explained thus:
Between two courts of concurrent original jurisdiction, it is
the lower court that should initially pass upon the issues of
a case. That way, as a particular case goes through the
hierarchy of courts, it is shorn of all but the important legal
issues or those of first impression, which are the proper
subject of attention of the appellate court. This is a
procedural rule borne of experience and adopted to
improve the administration of justice.
This Court has consistently enjoined litigants to respect
the hierarchy of courts. Although this Court has concurrent
jurisdiction with the Regional Trial Courts and the Court of
Appeals to issue writs of certiorari, prohibition, mandamus,
quo warranto, habeas corpus and injunction, such
concurrence does not give a party unrestricted freedom of
choice of court forum. The resort to this Court's primary
jurisdiction to issue said writs shall be allowed only where
the redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances
justify such invocation. We held in People v. Cuaresma
that:
A becoming regard for judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary
writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter,
with the Court of Appeals. A direct invocation of the
Supreme Court's original jurisdiction to issue these writs
should be allowed only where there are special and
important reasons therefor, clearly and specifically set out
in the petition. This is established policy. It is a policy
necessary to prevent inordinate demands upon the Court's
time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent
further over-crowding of the Court's docket x x x.76
[Emphasis supplied.]
The repercussions of the issues in this case on the
Philippine mining industry, if not the national economy, as
well as the novelty thereof, constitute exceptional and
compelling circumstances to justify resort to this Court in
the first instance.
In all events, this Court has the discretion to take
cognizance of a suit which does not satisfy the
requirements of an actual case or legal standing when
paramount public interest is involved.77 When the issues
raised are of paramount importance to the public, this
Court may brush aside technicalities of procedure.78

II
Petitioners contend that E.O. No. 279 did not take effect
because its supposed date of effectivity came after
President Aquino had already lost her legislative powers
under the Provisional Constitution.
And they likewise claim that the WMC FTAA, which was
entered into pursuant to E.O. No. 279, violates Section 2,
Article XII of the Constitution because, among other
reasons:
(1) It allows foreign-owned companies to extend more than
mere financial or technical assistance to the State in the
exploitation, development, and utilization of minerals,
petroleum, and other mineral oils, and even permits
foreign owned companies to "operate and manage mining
activities."
(2) It allows foreign-owned companies to extend both
technical and financial assistance, instead of "either
technical or financial assistance."
To appreciate the import of these issues, a visit to the
history of the pertinent constitutional provision, the
concepts contained therein, and the laws enacted
pursuant thereto, is in order.
Section 2, Article XII reads in full:
Sec. 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The
State may directly undertake such activities or it may enter
into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence
Law on NatRes (50-72 86
fishermen and fish-workers in rivers, lakes, bays, and
lagoons.
The President may enter into agreements with foreign-
owned corporations involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements,
the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution.
THE SPANISH REGIME AND THE REGALIAN
DOCTRINE
The first sentence of Section 2 embodies the Regalian
doctrine or jura regalia. Introduced by Spain into these
Islands, this feudal concept is based on the State's power
of dominium, which is the capacity of the State to own or
acquire property.79
In its broad sense, the term "jura regalia" refers to royal
rights, or those rights which the King has by virtue of his
prerogatives. In Spanish law, it refers to a right which the
sovereign has over anything in which a subject has a right
of property or propriedad. These were rights enjoyed
during feudal times by the king as the sovereign.
The theory of the feudal system was that title to all lands
was originally held by the King, and while the use of lands
was granted out to others who were permitted to hold
them under certain conditions, the King theoretically
retained the title. By fiction of law, the King was regarded
as the original proprietor of all lands, and the true and only
source of title, and from him all lands were held. The
theory of jura regalia was therefore nothing more than a
natural fruit of conquest.80
The Philippines having passed to Spain by virtue of
discovery and conquest,81 earlier Spanish decrees
declared that "all lands were held from the Crown."82
The Regalian doctrine extends not only to land but also to
"all natural wealth that may be found in the bowels of the
earth."83 Spain, in particular, recognized the unique value
of natural resources, viewing them, especially minerals, as
an abundant source of revenue to finance its wars against
other nations.84 Mining laws during the Spanish regime
reflected this perspective.85
THE AMERICAN OCCUPATION AND THE
CONCESSION REGIME

By the Treaty of Paris of December 10, 1898, Spain ceded
"the archipelago known as the Philippine Islands" to the
United States. The Philippines was hence governed by
means of organic acts that were in the nature of charters
serving as a Constitution of the occupied territory from
1900 to 1935.86 Among the principal organic acts of the
Philippines was the Act of Congress of July 1, 1902, more
commonly known as the Philippine Bill of 1902, through
which the United States Congress assumed the
administration of the Philippine Islands.87 Section 20 of
said Bill reserved the disposition of mineral lands of the
public domain from sale. Section 21 thereof allowed the
free and open exploration, occupation and purchase of
mineral deposits not only to citizens of the Philippine
Islands but to those of the United States as well:
Sec. 21. That all valuable mineral deposits in public lands
in the Philippine Islands, both surveyed and unsurveyed,
are hereby declared to be free and open to exploration,
occupation and purchase, and the land in which they are
found, to occupation and purchase, by citizens of the
United States or of said Islands: Provided, That when on
any lands in said Islands entered and occupied as
agricultural lands under the provisions of this Act, but not
patented, mineral deposits have been found, the working
of such mineral deposits is forbidden until the person,
association, or corporation who or which has entered and
is occupying such lands shall have paid to the
Government of said Islands such additional sum or sums
as will make the total amount paid for the mineral claim or
claims in which said deposits are located equal to the
amount charged by the Government for the same as
mineral claims.
Unlike Spain, the United States considered natural
resources as a source of wealth for its nationals and saw
fit to allow both Filipino and American citizens to explore
and exploit minerals in public lands, and to grant patents
to private mineral lands.88 A person who acquired
ownership over a parcel of private mineral land pursuant to
the laws then prevailing could exclude other persons, even
the State, from exploiting minerals within his property.89
Thus, earlier jurisprudence90 held that:
A valid and subsisting location of mineral land, made and
kept up in accordance with the provisions of the statutes of
the United States, has the effect of a grant by the United
States of the present and exclusive possession of the
lands located, and this exclusive right of possession and
enjoyment continues during the entire life of the location. x
x x.
x x x.
The discovery of minerals in the ground by one who has a
valid mineral location perfects his claim and his location
not only against third persons, but also against the
Government. x x x. [Italics in the original.]
Law on NatRes (50-72 87
The Regalian doctrine and the American system,
therefore, differ in one essential respect. Under the
Regalian theory, mineral rights are not included in a grant
of land by the state; under the American doctrine, mineral
rights are included in a grant of land by the government.91
Section 21 also made possible the concession (frequently
styled "permit", license" or "lease")92 system.93 This was
the traditional regime imposed by the colonial
administrators for the exploitation of natural resources in
the extractive sector (petroleum, hard minerals, timber,
etc.).94
Under the concession system, the concessionaire makes
a direct equity investment for the purpose of exploiting a
particular natural resource within a given area.95 Thus,
the concession amounts to complete control by the
concessionaire over the country's natural resource, for it is
given exclusive and plenary rights to exploit a particular
resource at the point of extraction.96 In consideration for
the right to exploit a natural resource, the concessionaire
either pays rent or royalty, which is a fixed percentage of
the gross proceeds.97
Later statutory enactments by the legislative bodies set up
in the Philippines adopted the contractual framework of the
concession.98 For instance, Act No. 2932,99 approved on
August 31, 1920, which provided for the exploration,
location, and lease of lands containing petroleum and
other mineral oils and gas in the Philippines, and Act No.
2719,100 approved on May 14, 1917, which provided for
the leasing and development of coal lands in the
Philippines, both utilized the concession system.101
THE 1935 CONSTITUTION AND THE
NATIONALIZATION OF NATURAL RESOURCES
By the Act of United States Congress of March 24, 1934,
popularly known as the Tydings-McDuffie Law, the People
of the Philippine Islands were authorized to adopt a
constitution.102 On July 30, 1934, the Constitutional
Convention met for the purpose of drafting a constitution,
and the Constitution subsequently drafted was approved
by the Convention on February 8, 1935.103 The
Constitution was submitted to the President of the United
States on March 18, 1935.104 On March 23, 1935, the
President of the United States certified that the
Constitution conformed substantially with the provisions of
the Act of Congress approved on March 24, 1934.105 On
May 14, 1935, the Constitution was ratified by the Filipino
people.106
The 1935 Constitution adopted the Regalian doctrine,
declaring all natural resources of the Philippines, including
mineral lands and minerals, to be property belonging to
the State.107 As adopted in a republican system, the
medieval concept of jura regalia is stripped of royal
overtones and ownership of the land is vested in the
State.108

Section 1, Article XIII, on Conservation and Utilization of
Natural Resources, of the 1935 Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of
the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, and other
natural resources of the Philippines belong to the State,
and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines, or
to corporations or associations at least sixty per centum of
the capital of which is owned by such citizens, subject to
any existing right, grant, lease, or concession at the time
of the inauguration of the Government established under
this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation,
development, or utilization of any of the natural resources
shall be granted for a period exceeding twenty-five years,
except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of
water power, in which cases beneficial use may be the
measure and the limit of the grant.
The nationalization and conservation of the natural
resources of the country was one of the fixed and
dominating objectives of the 1935 Constitutional
Convention.109 One delegate relates:
There was an overwhelming sentiment in the Convention
in favor of the principle of state ownership of natural
resources and the adoption of the Regalian doctrine. State
ownership of natural resources was seen as a necessary
starting point to secure recognition of the state's power to
control their disposition, exploitation, development, or
utilization. The delegates of the Constitutional Convention
very well knew that the concept of State ownership of land
and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued
and applied by the Americans. To remove all doubts, the
Convention approved the provision in the Constitution
affirming the Regalian doctrine.
The adoption of the principle of state ownership of the
natural resources and of the Regalian doctrine was
considered to be a necessary starting point for the plan of
nationalizing and conserving the natural resources of the
country. For with the establishment of the principle of state
ownership of the natural resources, it would not be hard to
secure the recognition of the power of the State to control
their disposition, exploitation, development or
utilization.110
The nationalization of the natural resources was intended
(1) to insure their conservation for Filipino posterity; (2) to
serve as an instrument of national defense, helping
prevent the extension to the country of foreign control
through peaceful economic penetration; and (3) to avoid
making the Philippines a source of international conflicts
Law on NatRes (50-72 88
with the consequent danger to its internal security and
independence.111
The same Section 1, Article XIII also adopted the
concession system, expressly permitting the State to grant
licenses, concessions, or leases for the exploitation,
development, or utilization of any of the natural resources.
Grants, however, were limited to Filipinos or entities at
least 60% of the capital of which is owned by
Filipinos.lawph!l.ne+
The swell of nationalism that suffused the 1935
Constitution was radically diluted when on November
1946, the Parity Amendment, which came in the form of an
"Ordinance Appended to the Constitution," was ratified in a
plebiscite.112 The Amendment extended, from July 4,
1946 to July 3, 1974, the right to utilize and exploit our
natural resources to citizens of the United States and
business enterprises owned or controlled, directly or
indirectly, by citizens of the United States:113
Notwithstanding the provision of section one, Article
Thirteen, and section eight, Article Fourteen, of the
foregoing Constitution, during the effectivity of the
Executive Agreement entered into by the President of the
Philippines with the President of the United States on the
fourth of July, nineteen hundred and forty-six, pursuant to
the provisions of Commonwealth Act Numbered Seven
hundred and thirty-three, but in no case to extend beyond
the third of July, nineteen hundred and seventy-four, the
disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public
domain, waters, minerals, coals, petroleum, and other
mineral oils, all forces and sources of potential energy,
and other natural resources of the Philippines, and the
operation of public utilities, shall, if open to any person, be
open to citizens of the United States and to all forms of
business enterprise owned or controlled, directly or
indirectly, by citizens of the United States in the same
manner as to, and under the same conditions imposed
upon, citizens of the Philippines or corporations or
associations owned or controlled by citizens of the
Philippines.
The Parity Amendment was subsequently modified by the
1954 Revised Trade Agreement, also known as the
Laurel-Langley Agreement, embodied in Republic Act No.
1355.114
THE PETROLEUM ACT OF 1949 AND THE
CONCESSION SYSTEM
In the meantime, Republic Act No. 387,115 also known as
the Petroleum Act of 1949, was approved on June 18,
1949.
The Petroleum Act of 1949 employed the concession
system for the exploitation of the nation's petroleum
resources. Among the kinds of concessions it sanctioned

were exploration and exploitation concessions, which
respectively granted to the concessionaire the exclusive
right to explore for116 or develop117 petroleum within
specified areas.
Concessions may be granted only to duly qualified
persons118 who have sufficient finances, organization,
resources, technical competence, and skills necessary to
conduct the operations to be undertaken.119
Nevertheless, the Government reserved the right to
undertake such work itself.120 This proceeded from the
theory that all natural deposits or occurrences of
petroleum or natural gas in public and/or private lands in
the Philippines belong to the State.121 Exploration and
exploitation concessions did not confer upon the
concessionaire ownership over the petroleum lands and
petroleum deposits.122 However, they did grant
concessionaires the right to explore, develop, exploit, and
utilize them for the period and under the conditions
determined by the law.123
Concessions were granted at the complete risk of the
concessionaire; the Government did not guarantee the
existence of petroleum or undertake, in any case, title
warranty.124
Concessionaires were required to submit information as
maybe required by the Secretary of Agriculture and
Natural Resources, including reports of geological and
geophysical examinations, as well as production
reports.125 Exploration126 and exploitation127
concessionaires were also required to submit work
programs.lavvphi1.net
Exploitation concessionaires, in particular, were obliged to
pay an annual exploitation tax,128 the object of which is to
induce the concessionaire to actually produce petroleum,
and not simply to sit on the concession without developing
or exploiting it.129 These concessionaires were also
bound to pay the Government royalty, which was not less
than 12% of the petroleum produced and saved, less
that consumed in the operations of the concessionaire.130
Under Article 66, R.A. No. 387, the exploitation tax may be
credited against the royalties so that if the concessionaire
shall be actually producing enough oil, it would not actually
be paying the exploitation tax.131
Failure to pay the annual exploitation tax for two
consecutive years,132 or the royalty due to the
Government within one year from the date it becomes
due,133 constituted grounds for the cancellation of the
concession. In case of delay in the payment of the taxes or
royalty imposed by the law or by the concession, a
surcharge of 1% per month is exacted until the same are
paid.134
As a rule, title rights to all equipment and structures that
the concessionaire placed on the land belong to the
Law on NatRes (50-72 89
exploration or exploitation concessionaire.135 Upon
termination of such concession, the concessionaire had a
right to remove the same.136
The Secretary of Agriculture and Natural Resources was
tasked with carrying out the provisions of the law, through
the Director of Mines, who acted under the Secretary's
immediate supervision and control.137 The Act granted
the Secretary the authority to inspect any operation of the
concessionaire and to examine all the books and accounts
pertaining to operations or conditions related to payment
of taxes and royalties.138
The same law authorized the Secretary to create an
Administration Unit and a Technical Board.139 The
Administration Unit was charged, inter alia, with the
enforcement of the provisions of the law.140 The
Technical Board had, among other functions, the duty to
check on the performance of concessionaires and to
determine whether the obligations imposed by the Act and
its implementing regulations were being complied with.141
Victorio Mario A. Dimagiba, Chief Legal Officer of the
Bureau of Energy Development, analyzed the benefits and
drawbacks of the concession system insofar as it applied
to the petroleum industry:
Advantages of Concession. Whether it emphasizes
income tax or royalty, the most positive aspect of the
concession system is that the State's financial involvement
is virtually risk free and administration is simple and
comparatively low in cost. Furthermore, if there is a
competitive allocation of the resource leading to
substantial bonuses and/or greater royalty coupled with a
relatively high level of taxation, revenue accruing to the
State under the concession system may compare
favorably with other financial arrangements.
Disadvantages of Concession. There are, however, major
negative aspects to this system. Because the
Government's role in the traditional concession is passive,
it is at a distinct disadvantage in managing and developing
policy for the nation's petroleum resource. This is true for
several reasons. First, even though most concession
agreements contain covenants requiring diligence in
operations and production, this establishes only an indirect
and passive control of the host country in resource
development. Second, and more importantly, the fact that
the host country does not directly participate in resource
management decisions inhibits its ability to train and
employ its nationals in petroleum development. This factor
could delay or prevent the country from effectively
engaging in the development of its resources. Lastly, a
direct role in management is usually necessary in order to
obtain a knowledge of the international petroleum industry
which is important to an appreciation of the host country's
resources in relation to those of other countries.142
Other liabilities of the system have also been noted:

x x x there are functional implications which give the
concessionaire great economic power arising from its
exclusive equity holding. This includes, first, appropriation
of the returns of the undertaking, subject to a modest
royalty; second, exclusive management of the project;
third, control of production of the natural resource, such as
volume of production, expansion, research and
development; and fourth, exclusive responsibility for
downstream operations, like processing, marketing, and
distribution. In short, even if nominally, the state is the
sovereign and owner of the natural resource being
exploited, it has been shorn of all elements of control over
such natural resource because of the exclusive nature of
the contractual regime of the concession. The concession
system, investing as it does ownership of natural
resources, constitutes a consistent inconsistency with the
principle embodied in our Constitution that natural
resources belong to the state and shall not be alienated,
not to mention the fact that the concession was the
bedrock of the colonial system in the exploitation of natural
resources.143
Eventually, the concession system failed for reasons
explained by Dimagiba:
Notwithstanding the good intentions of the Petroleum Act
of 1949, the concession system could not have properly
spurred sustained oil exploration activities in the country,
since it assumed that such a capital-intensive, high risk
venture could be successfully undertaken by a single
individual or a small company. In effect, concessionaires'
funds were easily exhausted. Moreover, since the
concession system practically closed its doors to
interested foreign investors, local capital was stretched to
the limits. The old system also failed to consider the highly
sophisticated technology and expertise required, which
would be available only to multinational companies.144
A shift to a new regime for the development of natural
resources thus seemed imminent.
PRESIDENTIAL DECREE NO. 87, THE 1973
CONSTITUTION AND THE SERVICE CONTRACT
SYSTEM
The promulgation on December 31, 1972 of Presidential
Decree No. 87,145 otherwise known as The Oil
Exploration and Development Act of 1972 signaled such a
transformation. P.D. No. 87 permitted the government to
explore for and produce indigenous petroleum through
"service contracts."146
"Service contracts" is a term that assumes varying
meanings to different people, and it has carried many
names in different countries, like "work contracts" in
Indonesia, "concession agreements" in Africa, "production-
sharing agreements" in the Middle East, and "participation
agreements" in Latin America.147 A functional definition of
Law on NatRes (50-72 90
"service contracts" in the Philippines is provided as
follows:
A service contract is a contractual arrangement for
engaging in the exploitation and development of
petroleum, mineral, energy, land and other natural
resources by which a government or its agency, or a
private person granted a right or privilege by the
government authorizes the other party (service contractor)
to engage or participate in the exercise of such right or the
enjoyment of the privilege, in that the latter provides
financial or technical resources, undertakes the
exploitation or production of a given resource, or directly
manages the productive enterprise, operations of the
exploration and exploitation of the resources or the
disposition of marketing or resources.148
In a service contract under P.D. No. 87, service and
technology are furnished by the service contractor for
which it shall be entitled to the stipulated service fee.149
The contractor must be technically competent and
financially capable to undertake the operations required in
the contract.150
Financing is supposed to be provided by the Government
to which all petroleum produced belongs.151 In case the
Government is unable to finance petroleum exploration
operations, the contractor may furnish services,
technology and financing, and the proceeds of sale of the
petroleum produced under the contract shall be the source
of funds for payment of the service fee and the operating
expenses due the contractor.152 The contractor shall
undertake, manage and execute petroleum operations,
subject to the government overseeing the management of
the operations.153 The contractor provides all necessary
services and technology and the requisite financing,
performs the exploration work obligations, and assumes all
exploration risks such that if no petroleum is produced, it
will not be entitled to reimbursement.154 Once petroleum
in commercial quantity is discovered, the contractor shall
operate the field on behalf of the government.155
P.D. No. 87 prescribed minimum terms and conditions for
every service contract.156 It also granted the contractor
certain privileges, including exemption from taxes and
payment of tariff duties,157 and permitted the repatriation
of capital and retention of profits abroad.158
Ostensibly, the service contract system had certain
advantages over the concession regime.159 It has been
opined, though, that, in the Philippines, our concept of a
service contract, at least in the petroleum industry, was
basically a concession regime with a production-sharing
element.160
On January 17, 1973, then President Ferdinand E. Marcos
proclaimed the ratification of a new Constitution.161 Article
XIV on the National Economy and Patrimony contained
provisions similar to the 1935 Constitution with regard to

Filipino participation in the nation's natural resources.
Section 8, Article XIV thereof provides:
Sec. 8. All lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of
potential energy, fisheries, wildlife, and other natural
resources of the Philippines belong to the State. With the
exception of agricultural, industrial or commercial,
residential and resettlement lands of the public domain,
natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development,
exploitation, or utilization of any of the natural resources
shall be granted for a period exceeding twenty-five years,
renewable for not more than twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power,
in which cases beneficial use may be the measure and the
limit of the grant.
While Section 9 of the same Article maintained the
Filipino-only policy in the enjoyment of natural resources, it
also allowed Filipinos, upon authority of the Batasang
Pambansa, to enter into service contracts with any person
or entity for the exploration or utilization of natural
resources.
Sec. 9. The disposition, exploration, development,
exploitation, or utilization of any of the natural resources of
the Philippines shall be limited to citizens, or to
corporations or associations at least sixty per centum of
which is owned by such citizens. The Batasang
Pambansa, in the national interest, may allow such
citizens, corporations or associations to enter into service
contracts for financial, technical, management, or other
forms of assistance with any person or entity for the
exploration, or utilization of any of the natural resources.
Existing valid and binding service contracts for financial,
technical, management, or other forms of assistance are
hereby recognized as such. [Emphasis supplied.]
The concept of service contracts, according to one
delegate, was borrowed from the methods followed by
India, Pakistan and especially Indonesia in the exploration
of petroleum and mineral oils.162 The provision allowing
such contracts, according to another, was intended to
"enhance the proper development of our natural resources
since Filipino citizens lack the needed capital and
technical know-how which are essential in the proper
exploration, development and exploitation of the natural
resources of the country."163
The original idea was to authorize the government, not
private entities, to enter into service contracts with foreign
entities.164 As finally approved, however, a citizen or
private entity could be allowed by the National Assembly
to enter into such service contract.165 The prior approval
of the National Assembly was deemed sufficient to protect
the national interest.166 Notably, none of the laws
allowing service contracts were passed by the Batasang
Law on NatRes (50-72 91
Pambansa. Indeed, all of them were enacted by
presidential decree.
On March 13, 1973, shortly after the ratification of the new
Constitution, the President promulgated Presidential
Decree No. 151.167 The law allowed Filipino citizens or
entities which have acquired lands of the public domain or
which own, hold or control such lands to enter into service
contracts for financial, technical, management or other
forms of assistance with any foreign persons or entity for
the exploration, development, exploitation or utilization of
said lands.168
Presidential Decree No. 463,169 also known as The
Mineral Resources Development Decree of 1974, was
enacted on May 17, 1974. Section 44 of the decree, as
amended, provided that a lessee of a mining claim may
enter into a service contract with a qualified domestic or
foreign contractor for the exploration, development and
exploitation of his claims and the processing and
marketing of the product thereof.
Presidential Decree No. 704170 (The Fisheries Decree of
1975), approved on May 16, 1975, allowed Filipinos
engaged in commercial fishing to enter into contracts for
financial, technical or other forms of assistance with any
foreign person, corporation or entity for the production,
storage, marketing and processing of fish and
fishery/aquatic products.171
Presidential Decree No. 705172 (The Revised Forestry
Code of the Philippines), approved on May 19, 1975,
allowed "forest products licensees, lessees, or permitees
to enter into service contracts for financial, technical,
management, or other forms of assistance . . . with any
foreign person or entity for the exploration, development,
exploitation or utilization of the forest resources."173
Yet another law allowing service contracts, this time for
geothermal resources, was Presidential Decree No.
1442,174 which was signed into law on June 11, 1978.
Section 1 thereof authorized the Government to enter into
service contracts for the exploration, exploitation and
development of geothermal resources with a foreign
contractor who must be technically and financially capable
of undertaking the operations required in the service
contract.
Thus, virtually the entire range of the country's natural
resources from petroleum and minerals to geothermal
energy, from public lands and forest resources to fishery
products was well covered by apparent legal authority to
engage in the direct participation or involvement of foreign
persons or corporations (otherwise disqualified) in the
exploration and utilization of natural resources through
service contracts.175
THE 1987 CONSTITUTION AND TECHNICAL OR
FINANCIAL ASSISTANCE AGREEMENTS

After the February 1986 Edsa Revolution, Corazon C.
Aquino took the reins of power under a revolutionary
government. On March 25, 1986, President Aquino issued
Proclamation No. 3,176 promulgating the Provisional
Constitution, more popularly referred to as the Freedom
Constitution. By authority of the same Proclamation, the
President created a Constitutional Commission
(CONCOM) to draft a new constitution, which took effect
on the date of its ratification on February 2, 1987.177
The 1987 Constitution retained the Regalian doctrine. The
first sentence of Section 2, Article XII states: "All lands of
the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State."
Like the 1935 and 1973 Constitutions before it, the 1987
Constitution, in the second sentence of the same
provision, prohibits the alienation of natural resources,
except agricultural lands.
The third sentence of the same paragraph is new: "The
exploration, development and utilization of natural
resources shall be under the full control and supervision of
the State." The constitutional policy of the State's "full
control and supervision" over natural resources proceeds
from the concept of jura regalia, as well as the recognition
of the importance of the country's natural resources, not
only for national economic development, but also for its
security and national defense.178 Under this provision, the
State assumes "a more dynamic role" in the exploration,
development and utilization of natural resources.179
Conspicuously absent in Section 2 is the provision in the
1935 and 1973 Constitutions authorizing the State to grant
licenses, concessions, or leases for the exploration,
exploitation, development, or utilization of natural
resources. By such omission, the utilization of inalienable
lands of public domain through "license, concession or
lease" is no longer allowed under the 1987
Constitution.180
Having omitted the provision on the concession system,
Section 2 proceeded to introduce "unfamiliar
language":181
The State may directly undertake such activities or it may
enter into co-production, joint venture, or production-
sharing agreements with Filipino citizens, or corporations
or associations at least sixty per centum of whose capital
is owned by such citizens.
Consonant with the State's "full supervision and control"
over natural resources, Section 2 offers the State two
"options."182 One, the State may directly undertake these
activities itself; or two, it may enter into co-production, joint
venture, or production-sharing agreements with Filipino
Law on NatRes (50-72 92
citizens, or entities at least 60% of whose capital is owned
by such citizens.
A third option is found in the third paragraph of the same
section:
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence
fishermen and fish-workers in rivers, lakes, bays, and
lagoons.
While the second and third options are limited only to
Filipino citizens or, in the case of the former, to
corporations or associations at least 60% of the capital of
which is owned by Filipinos, a fourth allows the
participation of foreign-owned corporations. The fourth and
fifth paragraphs of Section 2 provide:
The President may enter into agreements with foreign-
owned corporations involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements,
the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution.
Although Section 2 sanctions the participation of foreign-
owned corporations in the exploration, development, and
utilization of natural resources, it imposes certain
limitations or conditions to agreements with such
corporations.
First, the parties to FTAAs. Only the President, in behalf of
the State, may enter into these agreements, and only with
corporations. By contrast, under the 1973 Constitution, a
Filipino citizen, corporation or association may enter into a
service contract with a "foreign person or entity."
Second, the size of the activities: only large-scale
exploration, development, and utilization is allowed. The
term "large-scale usually refers to very capital-intensive
activities."183
Third, the natural resources subject of the activities is
restricted to minerals, petroleum and other mineral oils,
the intent being to limit service contracts to those areas
where Filipino capital may not be sufficient.184
Fourth, consistency with the provisions of statute. The
agreements must be in accordance with the terms and
conditions provided by law.

Fifth, Section 2 prescribes certain standards for entering
into such agreements. The agreements must be based on
real contributions to economic growth and general welfare
of the country.
Sixth, the agreements must contain rudimentary
stipulations for the promotion of the development and use
of local scientific and technical resources.
Seventh, the notification requirement. The President shall
notify Congress of every financial or technical assistance
agreement entered into within thirty days from its
execution.
Finally, the scope of the agreements. While the 1973
Constitution referred to "service contracts for financial,
technical, management, or other forms of assistance" the
1987 Constitution provides for "agreements. . . involving
either financial or technical assistance." It bears noting that
the phrases "service contracts" and "management or other
forms of assistance" in the earlier constitution have been
omitted.
By virtue of her legislative powers under the Provisional
Constitution,185 President Aquino, on July 10, 1987,
signed into law E.O. No. 211 prescribing the interim
procedures in the processing and approval of applications
for the exploration, development and utilization of
minerals. The omission in the 1987 Constitution of the
term "service contracts" notwithstanding, the said E.O. still
referred to them in Section 2 thereof:
Sec. 2. Applications for the exploration, development and
utilization of mineral resources, including renewal
applications and applications for approval of operating
agreements and mining service contracts, shall be
accepted and processed and may be approved x x x.
[Emphasis supplied.]
The same law provided in its Section 3 that the
"processing, evaluation and approval of all mining
applications . . . operating agreements and service
contracts . . . shall be governed by Presidential Decree
No. 463, as amended, other existing mining laws, and their
implementing rules and regulations. . . ."
As earlier stated, on the 25th also of July 1987, the
President issued E.O. No. 279 by authority of which the
subject WMCP FTAA was executed on March 30, 1995.
On March 3, 1995, President Ramos signed into law R.A.
No. 7942. Section 15 thereof declares that the Act "shall
govern the exploration, development, utilization, and
processing of all mineral resources." Such declaration
notwithstanding, R.A. No. 7942 does not actually cover all
the modes through which the State may undertake the
exploration, development, and utilization of natural
resources.
Law on NatRes (50-72 93
The State, being the owner of the natural resources, is
accorded the primary power and responsibility in the
exploration, development and utilization thereof. As such,
it may undertake these activities through four modes:
The State may directly undertake such activities.
(2) The State may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or
qualified corporations.
(3) Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens.
(4) For the large-scale exploration, development and
utilization of minerals, petroleum and other mineral oils,
the President may enter into agreements with foreign-
owned corporations involving technical or financial
assistance.186
Except to charge the Mines and Geosciences Bureau of
the DENR with performing researches and surveys,187
and a passing mention of government-owned or controlled
corporations,188 R.A. No. 7942 does not specify how the
State should go about the first mode. The third mode, on
the other hand, is governed by Republic Act No. 7076189
(the People's Small-Scale Mining Act of 1991) and other
pertinent laws.190 R.A. No. 7942 primarily concerns itself
with the second and fourth modes.
Mineral production sharing, co-production and joint
venture agreements are collectively classified by R.A. No.
7942 as "mineral agreements."191 The Government
participates the least in a mineral production sharing
agreement (MPSA). In an MPSA, the Government grants
the contractor192 the exclusive right to conduct mining
operations within a contract area193 and shares in the
gross output.194 The MPSA contractor provides the
financing, technology, management and personnel
necessary for the agreement's implementation.195 The
total government share in an MPSA is the excise tax on
mineral products under Republic Act No. 7729,196
amending Section 151(a) of the National Internal Revenue
Code, as amended.197
In a co-production agreement (CA),198 the Government
provides inputs to the mining operations other than the
mineral resource,199 while in a joint venture agreement
(JVA), where the Government enjoys the greatest
participation, the Government and the JVA contractor
organize a company with both parties having equity
shares.200 Aside from earnings in equity, the Government
in a JVA is also entitled to a share in the gross output.201
The Government may enter into a CA202 or JVA203 with
one or more contractors. The Government's share in a CA
or JVA is set out in Section 81 of the law:
The share of the Government in co-production and joint
venture agreements shall be negotiated by the

Government and the contractor taking into consideration
the: (a) capital investment of the project, (b) the risks
involved, (c) contribution of the project to the economy,
and (d) other factors that will provide for a fair and
equitable sharing between the Government and the
contractor. The Government shall also be entitled to
compensations for its other contributions which shall be
agreed upon by the parties, and shall consist, among other
things, the contractor's income tax, excise tax, special
allowance, withholding tax due from the contractor's
foreign stockholders arising from dividend or interest
payments to the said foreign stockholders, in case of a
foreign national and all such other taxes, duties and fees
as provided for under existing laws.
All mineral agreements grant the respective contractors
the exclusive right to conduct mining operations and to
extract all mineral resources found in the contract
area.204 A "qualified person" may enter into any of the
mineral agreements with the Government.205 A "qualified
person" is
any citizen of the Philippines with capacity to contract, or a
corporation, partnership, association, or cooperative
organized or authorized for the purpose of engaging in
mining, with technical and financial capability to undertake
mineral resources development and duly registered in
accordance with law at least sixty per centum (60%) of the
capital of which is owned by citizens of the Philippines x x
x.206
The fourth mode involves "financial or technical assistance
agreements." An FTAA is defined as "a contract involving
financial or technical assistance for large-scale
exploration, development, and utilization of natural
resources."207 Any qualified person with technical and
financial capability to undertake large-scale exploration,
development, and utilization of natural resources in the
Philippines may enter into such agreement directly with
the Government through the DENR.208 For the purpose of
granting an FTAA, a legally organized foreign-owned
corporation (any corporation, partnership, association, or
cooperative duly registered in accordance with law in
which less than 50% of the capital is owned by Filipino
citizens)209 is deemed a "qualified person."210
Other than the difference in contractors' qualifications, the
principal distinction between mineral agreements and
FTAAs is the maximum contract area to which a qualified
person may hold or be granted.211 "Large-scale" under
R.A. No. 7942 is determined by the size of the contract
area, as opposed to the amount invested (US
$50,000,000.00), which was the standard under E.O. 279.
Like a CA or a JVA, an FTAA is subject to negotiation.212
The Government's contributions, in the form of taxes, in an
FTAA is identical to its contributions in the two mineral
agreements, save that in an FTAA:
Law on NatRes (50-72 94
The collection of Government share in financial or
technical assistance agreement shall commence after the
financial or technical assistance agreement contractor has
fully recovered its pre-operating expenses, exploration,
and development expenditures, inclusive.213
III
Having examined the history of the constitutional provision
and statutes enacted pursuant thereto, a consideration of
the substantive issues presented by the petition is now in
order.
THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279
Petitioners argue that E.O. No. 279, the law in force when
the WMC FTAA was executed, did not come into effect.
E.O. No. 279 was signed into law by then President
Aquino on July 25, 1987, two days before the opening of
Congress on July 27, 1987.214 Section 8 of the E.O.
states that the same "shall take effect immediately." This
provision, according to petitioners, runs counter to Section
1 of E.O. No. 200,215 which provides:
SECTION 1. Laws shall take effect after fifteen days
following the completion of their publication either in the
Official Gazette or in a newspaper of general circulation in
the Philippines, unless it is otherwise provided.216
[Emphasis supplied.]
On that premise, petitioners contend that E.O. No. 279
could have only taken effect fifteen days after its
publication at which time Congress had already convened
and the President's power to legislate had ceased.
Respondents, on the other hand, counter that the validity
of E.O. No. 279 was settled in Miners Association of the
Philippines v. Factoran, supra. This is of course incorrect
for the issue in Miners Association was not the validity of
E.O. No. 279 but that of DAO Nos. 57 and 82 which were
issued pursuant thereto.
Nevertheless, petitioners' contentions have no merit.
It bears noting that there is nothing in E.O. No. 200 that
prevents a law from taking effect on a date other than
even before the 15-day period after its publication.
Where a law provides for its own date of effectivity, such
date prevails over that prescribed by E.O. No. 200.
Indeed, this is the very essence of the phrase "unless it is
otherwise provided" in Section 1 thereof. Section 1, E.O.
No. 200, therefore, applies only when a statute does not
provide for its own date of effectivity.
What is mandatory under E.O. No. 200, and what due
process requires, as this Court held in Taada v.
Tuvera,217 is the publication of the law for without such
notice and publication, there would be no basis for the

application of the maxim "ignorantia legis n[eminem]
excusat." It would be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a
constructive one.
While the effectivity clause of E.O. No. 279 does not
require its publication, it is not a ground for its invalidation
since the Constitution, being "the fundamental, paramount
and supreme law of the nation," is deemed written in the
law.218 Hence, the due process clause,219 which, so
Taada held, mandates the publication of statutes, is read
into Section 8 of E.O. No. 279. Additionally, Section 1 of
E.O. No. 200 which provides for publication "either in the
Official Gazette or in a newspaper of general circulation in
the Philippines," finds suppletory application. It is
significant to note that E.O. No. 279 was actually
published in the Official Gazette220 on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section
1 of E.O. No. 200, and Taada v. Tuvera, this Court holds
that E.O. No. 279 became effective immediately upon its
publication in the Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the
first Congress is irrelevant. At the time President Aquino
issued E.O. No. 279 on July 25, 1987, she was still validly
exercising legislative powers under the Provisional
Constitution.221 Article XVIII (Transitory Provisions) of the
1987 Constitution explicitly states:
Sec. 6. The incumbent President shall continue to exercise
legislative powers until the first Congress is convened.
The convening of the first Congress merely precluded the
exercise of legislative powers by President Aquino; it did
not prevent the effectivity of laws she had previously
enacted.
There can be no question, therefore, that E.O. No. 279 is
an effective, and a validly enacted, statute.
THE CONSTITUTIONALITY OF THE WMCP FTAA
Petitioners submit that, in accordance with the text of
Section 2, Article XII of the Constitution, FTAAs should be
limited to "technical or financial assistance" only. They
observe, however, that, contrary to the language of the
Constitution, the WMCP FTAA allows WMCP, a fully
foreign-owned mining corporation, to extend more than
mere financial or technical assistance to the State, for it
permits WMCP to manage and operate every aspect of
the mining activity. 222
Petitioners' submission is well-taken. It is a cardinal rule in
the interpretation of constitutions that the instrument must
be so construed as to give effect to the intention of the
people who adopted it.223 This intention is to be sought in
the constitution itself, and the apparent meaning of the
Law on NatRes (50-72 95
words is to be taken as expressing it, except in cases
where that assumption would lead to absurdity, ambiguity,
or contradiction.224 What the Constitution says according
to the text of the provision, therefore, compels acceptance
and negates the power of the courts to alter it, based on
the postulate that the framers and the people mean what
they say.225 Accordingly, following the literal text of the
Constitution, assistance accorded by foreign-owned
corporations in the large-scale exploration, development,
and utilization of petroleum, minerals and mineral oils
should be limited to "technical" or "financial" assistance
only.
WMCP nevertheless submits that the word "technical" in
the fourth paragraph of Section 2 of E.O. No. 279
encompasses a "broad number of possible services,"
perhaps, "scientific and/or technological in basis."226 It
thus posits that it may also well include "the area of
management or operations . . . so long as such assistance
requires specialized knowledge or skills, and are related to
the exploration, development and utilization of mineral
resources."227
This Court is not persuaded. As priorly pointed out, the
phrase "management or other forms of assistance" in the
1973 Constitution was deleted in the 1987 Constitution,
which allows only "technical or financial assistance."
Casus omisus pro omisso habendus est. A person, object
or thing omitted from an enumeration must be held to have
been omitted intentionally.228 As will be shown later, the
management or operation of mining activities by foreign
contractors, which is the primary feature of service
contracts, was precisely the evil that the drafters of the
1987 Constitution sought to eradicate.
Respondents insist that "agreements involving technical or
financial assistance" is just another term for service
contracts. They contend that the proceedings of the
CONCOM indicate "that although the terminology 'service
contract' was avoided [by the Constitution], the concept it
represented was not." They add that "[t]he concept is
embodied in the phrase 'agreements involving financial or
technical assistance.'"229 And point out how members of
the CONCOM referred to these agreements as "service
contracts." For instance:
SR. TAN. Am I correct in thinking that the only difference
between these future service contracts and the past
service contracts under Mr. Marcos is the general law to
be enacted by the legislature and the notification of
Congress by the President? That is the only difference, is
it not?
MR. VILLEGAS. That is right.
SR. TAN. So those are the safeguards[?]
MR. VILLEGAS. Yes. There was no law at all governing
service contracts before.

SR. TAN. Thank you, Madam President.230 [Emphasis
supplied.]
WMCP also cites the following statements of
Commissioners Gascon, Garcia, Nolledo and Tadeo who
alluded to service contracts as they explained their
respective votes in the approval of the draft Article:
MR. GASCON. Mr. Presiding Officer, I vote no primarily
because of two reasons: One, the provision on service
contracts. I felt that if we would constitutionalize any
provision on service contracts, this should always be with
the concurrence of Congress and not guided only by a
general law to be promulgated by Congress. x x x.231
[Emphasis supplied.]
x x x.
MR. GARCIA. Thank you.
I vote no. x x x.
Service contracts are given constitutional legitimization in
Section 3, even when they have been proven to be
inimical to the interests of the nation, providing as they do
the legal loophole for the exploitation of our natural
resources for the benefit of foreign interests. They
constitute a serious negation of Filipino control on the use
and disposition of the nation's natural resources,
especially with regard to those which are
nonrenewable.232 [Emphasis supplied.]
xxx
MR. NOLLEDO. While there are objectionable provisions
in the Article on National Economy and Patrimony, going
over said provisions meticulously, setting aside prejudice
and personalities will reveal that the article contains a
balanced set of provisions. I hope the forthcoming
Congress will implement such provisions taking into
account that Filipinos should have real control over our
economy and patrimony, and if foreign equity is permitted,
the same must be subordinated to the imperative
demands of the national interest.
x x x.
It is also my understanding that service contracts involving
foreign corporations or entities are resorted to only when
no Filipino enterprise or Filipino-controlled enterprise could
possibly undertake the exploration or exploitation of our
natural resources and that compensation under such
contracts cannot and should not equal what should pertain
to ownership of capital. In other words, the service
contract should not be an instrument to circumvent the
basic provision, that the exploration and exploitation of
natural resources should be truly for the benefit of
Filipinos.
Law on NatRes (50-72 96
Thank you, and I vote yes.233 [Emphasis supplied.]
x x x.
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.
Matapos suriin ang kalagayan ng Pilipinas, ang saligang
suliranin, pangunahin ang salitang "imperyalismo." Ang
ibig sabihin nito ay ang sistema ng lipunang pinaghaharian
ng iilang monopolyong kapitalista at ang salitang
"imperyalismo" ay buhay na buhay sa National Economy
and Patrimony na nating ginawa. Sa pamamagitan ng
salitang "based on," naroroon na ang free trade sapagkat
tayo ay mananatiling tagapagluwas ng hilaw na sangkap
at tagaangkat ng yaring produkto. Pangalawa, naroroon
pa rin ang parity rights, ang service contract, ang 60-40
equity sa natural resources. Habang naghihirap ang
sambayanang Pilipino, ginagalugad naman ng mga
dayuhan ang ating likas na yaman. Kailan man ang Article
on National Economy and Patrimony ay hindi nagpaalis sa
pagkaalipin ng ating ekonomiya sa kamay ng mga
dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa
lamang: ang pagpapatupad ng tunay na reporma sa lupa
at ang national industrialization. Ito ang tinatawag naming
pagsikat ng araw sa Silangan. Ngunit ang mga landlords
and big businessmen at ang mga komprador ay nagsasabi
na ang free trade na ito, ang kahulugan para sa amin, ay
ipinipilit sa ating sambayanan na ang araw ay sisikat sa
Kanluran. Kailan man hindi puwedeng sumikat ang araw
sa Kanluran. I vote no.234 [Emphasis supplied.]
This Court is likewise not persuaded.
As earlier noted, the phrase "service contracts" has been
deleted in the 1987 Constitution's Article on National
Economy and Patrimony. If the CONCOM intended to
retain the concept of service contracts under the 1973
Constitution, it could have simply adopted the old
terminology ("service contracts") instead of employing new
and unfamiliar terms ("agreements . . . involving either
technical or financial assistance"). Such a difference
between the language of a provision in a revised
constitution and that of a similar provision in the preceding
constitution is viewed as indicative of a difference in
purpose.235 If, as respondents suggest, the concept of
"technical or financial assistance" agreements is identical
to that of "service contracts," the CONCOM would not
have bothered to fit the same dog with a new collar. To
uphold respondents' theory would reduce the first to a
mere euphemism for the second and render the change in
phraseology meaningless.
An examination of the reason behind the change confirms
that technical or financial assistance agreements are not
synonymous to service contracts.
[T]he Court in construing a Constitution should bear in
mind the object sought to be accomplished by its adoption,

and the evils, if any, sought to be prevented or remedied.
A doubtful provision will be examined in light of the history
of the times, and the condition and circumstances under
which the Constitution was framed. The object is to
ascertain the reason which induced the framers of the
Constitution to enact the particular provision and the
purpose sought to be accomplished thereby, in order to
construe the whole as to make the words consonant to
that reason and calculated to effect that purpose.236
As the following question of Commissioner Quesada and
Commissioner Villegas' answer shows the drafters
intended to do away with service contracts which were
used to circumvent the capitalization (60%-40%)
requirement:
MS. QUESADA. The 1973 Constitution used the words
"service contracts." In this particular Section 3, is there a
safeguard against the possible control of foreign interests
if the Filipinos go into coproduction with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase
"service contracts" was our first attempt to avoid some of
the abuses in the past regime in the use of service
contracts to go around the 60-40 arrangement. The
safeguard that has been introduced and this, of course
can be refined is found in Section 3, lines 25 to 30,
where Congress will have to concur with the President on
any agreement entered into between a foreign-owned
corporation and the government involving technical or
financial assistance for large-scale exploration,
development and utilization of natural resources.237
[Emphasis supplied.]
In a subsequent discussion, Commissioner Villegas
allayed the fears of Commissioner Quesada regarding the
participation of foreign interests in Philippine natural
resources, which was supposed to be restricted to
Filipinos.
MS. QUESADA. Another point of clarification is the phrase
"and utilization of natural resources shall be under the full
control and supervision of the State." In the 1973
Constitution, this was limited to citizens of the Philippines;
but it was removed and substituted by "shall be under the
full control and supervision of the State." Was the concept
changed so that these particular resources would be
limited to citizens of the Philippines? Or would these
resources only be under the full control and supervision of
the State; meaning, noncitizens would have access to
these natural resources? Is that the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the
Commissioner reads the next sentence, it states:
Such activities may be directly undertaken by the State, or
it may enter into co-production, joint venture, production-
sharing agreements with Filipino citizens.
Law on NatRes (50-72 97
So we are still limiting it only to Filipino citizens.
x x x.
MS. QUESADA. Going back to Section 3, the section
suggests that:
The exploration, development, and utilization of natural
resources may be directly undertaken by the State, or it
may enter into co-production, joint venture or production-
sharing agreement with . . . corporations or associations at
least sixty per cent of whose voting stock or controlling
interest is owned by such citizens.
Lines 25 to 30, on the other hand, suggest that in the
large-scale exploration, development and utilization of
natural resources, the President with the concurrence of
Congress may enter into agreements with foreign-owned
corporations even for technical or financial assistance.
I wonder if this part of Section 3 contradicts the second
part. I am raising this point for fear that foreign investors
will use their enormous capital resources to facilitate the
actual exploitation or exploration, development and
effective disposition of our natural resources to the
detriment of Filipino investors. I am not saying that we
should not consider borrowing money from foreign
sources. What I refer to is that foreign interest should be
allowed to participate only to the extent that they lend us
money and give us technical assistance with the
appropriate government permit. In this way, we can insure
the enjoyment of our natural resources by our own people.
MR. VILLEGAS. Actually, the second provision about the
President does not permit foreign investors to participate.
It is only technical or financial assistance they do not
own anything but on conditions that have to be
determined by law with the concurrence of Congress. So,
it is very restrictive.
If the Commissioner will remember, this removes the
possibility for service contracts which we said yesterday
were avenues used in the previous regime to go around
the 60-40 requirement.238 [Emphasis supplied.]
The present Chief Justice, then a member of the
CONCOM, also referred to this limitation in scope in
proposing an amendment to the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?
MR. MAAMBONG. Subject to the three-minute rule,
Madam President.
MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the
Preamble we clearly stated that the Filipino people are
sovereign and that one of the objectives for the creation or

establishment of a government is to conserve and develop
the national patrimony. The implication is that the national
patrimony or our natural resources are exclusively
reserved for the Filipino people. No alien must be allowed
to enjoy, exploit and develop our natural resources. As a
matter of fact, that principle proceeds from the fact that our
natural resources are gifts from God to the Filipino people
and it would be a breach of that special blessing from God
if we will allow aliens to exploit our natural resources.
I voted in favor of the Jamir proposal because it is not
really exploitation that we granted to the alien corporations
but only for them to render financial or technical
assistance. It is not for them to enjoy our natural
resources. Madam President, our natural resources are
depleting; our population is increasing by leaps and
bounds. Fifty years from now, if we will allow these aliens
to exploit our natural resources, there will be no more
natural resources for the next generations of Filipinos. It
may last long if we will begin now. Since 1935 the aliens
have been allowed to enjoy to a certain extent the
exploitation of our natural resources, and we became
victims of foreign dominance and control. The aliens are
interested in coming to the Philippines because they would
like to enjoy the bounty of nature exclusively intended for
Filipinos by God.
And so I appeal to all, for the sake of the future
generations, that if we have to pray in the Preamble "to
preserve and develop the national patrimony for the
sovereign Filipino people and for the generations to
come," we must at this time decide once and for all that
our natural resources must be reserved only to Filipino
citizens.
Thank you.239 [Emphasis supplied.]
The opinion of another member of the CONCOM is
persuasive240 and leaves no doubt as to the intention of
the framers to eliminate service contracts altogether. He
writes:
Paragraph 4 of Section 2 specifies large-scale, capital-
intensive, highly technological undertakings for which the
President may enter into contracts with foreign-owned
corporations, and enunciates strict conditions that should
govern such contracts. x x x.
This provision balances the need for foreign capital and
technology with the need to maintain the national
sovereignty. It recognizes the fact that as long as Filipinos
can formulate their own terms in their own territory, there
is no danger of relinquishing sovereignty to foreign
interests.
Are service contracts allowed under the new Constitution?
No. Under the new Constitution, foreign investors (fully
alien-owned) can NOT participate in Filipino enterprises
except to provide: (1) Technical Assistance for highly
Law on NatRes (50-72 98
technical enterprises; and (2) Financial Assistance for
large-scale enterprises.
The intent of this provision, as well as other provisions on
foreign investments, is to prevent the practice (prevalent in
the Marcos government) of skirting the 60/40 equation
using the cover of service contracts.241 [Emphasis
supplied.]
Furthermore, it appears that Proposed Resolution No.
496,242 which was the draft Article on National Economy
and Patrimony, adopted the concept of "agreements . . .
involving either technical or financial assistance" contained
in the "Draft of the 1986 U.P. Law Constitution Project"
(U.P. Law draft) which was taken into consideration during
the deliberation of the CONCOM.243 The former, as well
as Article XII, as adopted, employed the same
terminology, as the comparative table below shows:
DRAFT OF THE UP LAW CONSTITUTION PROJECT
PROPOSED RESOLUTION NO. 496 OF THE
CONSTITUTIONAL COMMISSION ARTICLE XII OF THE
1987 CONSTITUTION
Sec. 1. All lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of
potential energy, fisheries, flora and fauna and other
natural resources of the Philippines are owned by the
State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development and utilization of natural resources shall be
under the full control and supervision of the State. Such
activities may be directly undertaken by the state, or it may
enter into co-production, joint venture, production sharing
agreements with Filipino citizens or corporations or
associations sixty per cent of whose voting stock or
controlling interest is owned by such citizens for a period
of not more than twenty-five years, renewable for not more
than twenty-five years and under such terms and
conditions as may be provided by law. In case as to water
rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The National Assembly may by law allow small scale
utilization of natural resources by Filipino citizens.
The National Assembly, may, by two-thirds vote of all its
members by special law provide the terms and conditions
under which a foreign-owned corporation may enter into
agreements with the government involving either technical
or financial assistance for large-scale exploration,
development, or utilization of natural resources. [Emphasis
supplied.]
Sec. 3. All lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of
potential energy, fisheries, forests, flora and fauna, and
other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resources

shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full
control and supervision of the State. Such activities may
be directly undertaken by the State, or it may enter into co-
production, joint venture, production-sharing agreements
with Filipino citizens or corporations or associations at
least sixty per cent of whose voting stock or controlling
interest is owned by such citizens. Such agreements shall
be for a period of twenty-five years, renewable for not
more than twenty-five years, and under such term and
conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries or industrial
uses other than the development for water power,
beneficial use may be the measure and limit of the grant.
The Congress may by law allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming in rivers, lakes, bays, and
lagoons.
The President with the concurrence of Congress, by
special law, shall provide the terms and conditions under
which a foreign-owned corporation may enter into
agreements with the government involving either technical
or financial assistance for large-scale exploration,
development, and utilization of natural resources.
[Emphasis supplied.]
Sec. 2. All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The
State may directly undertake such activities or it may enter
into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law. In case of water
rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence
fishermen and fish-workers in rivers, lakes, bays, and
lagoons.
Law on NatRes (50-72 99
The President may enter into agreements with foreign-
owned corporations involving either technical or financial
assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements,
the State shall promote the development and use of local
scientific and technical resources. [Emphasis supplied.]
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution.
The insights of the proponents of the U.P. Law draft are,
therefore, instructive in interpreting the phrase "technical
or financial assistance."
In his position paper entitled Service Contracts: Old Wine
in New Bottles?, Professor Pacifico A. Agabin, who was a
member of the working group that prepared the U.P. Law
draft, criticized service contracts for they "lodge exclusive
management and control of the enterprise to the service
contractor, which is reminiscent of the old concession
regime. Thus, notwithstanding the provision of the
Constitution that natural resources belong to the State,
and that these shall not be alienated, the service contract
system renders nugatory the constitutional provisions
cited."244 He elaborates:
Looking at the Philippine model, we can discern the
following vestiges of the concession regime, thus:
1. Bidding of a selected area, or leasing the choice of the
area to the interested party and then negotiating the terms
and conditions of the contract; (Sec. 5, P.D. 87)
2. Management of the enterprise vested on the contractor,
including operation of the field if petroleum is discovered;
(Sec. 8, P.D. 87)
3. Control of production and other matters such as
expansion and development; (Sec. 8)
4. Responsibility for downstream operations marketing,
distribution, and processing may be with the contractor
(Sec. 8);
5. Ownership of equipment, machinery, fixed assets, and
other properties remain with contractor (Sec. 12, P.D. 87);
6. Repatriation of capital and retention of profits abroad
guaranteed to the contractor (Sec. 13, P.D. 87); and
7. While title to the petroleum discovered may nominally
be in the name of the government, the contractor has
almost unfettered control over its disposition and sale, and
even the domestic requirements of the country is relegated
to a pro rata basis (Sec. 8).

In short, our version of the service contract is just a rehash
of the old concession regime x x x. Some people have
pulled an old rabbit out of a magician's hat, and foisted it
upon us as a new and different animal.
The service contract as we know it here is antithetical to
the principle of sovereignty over our natural resources
restated in the same article of the [1973] Constitution
containing the provision for service contracts. If the service
contractor happens to be a foreign corporation, the
contract would also run counter to the constitutional
provision on nationalization or Filipinization, of the
exploitation of our natural resources.245 [Emphasis
supplied. Underscoring in the original.]
Professor Merlin M. Magallona, also a member of the
working group, was harsher in his reproach of the system:
x x x the nationalistic phraseology of the 1935
[Constitution] was retained by the [1973] Charter, but the
essence of nationalism was reduced to hollow rhetoric.
The 1973 Charter still provided that the exploitation or
development of the country's natural resources be limited
to Filipino citizens or corporations owned or controlled by
them. However, the martial-law Constitution allowed them,
once these resources are in their name, to enter into
service contracts with foreign investors for financial,
technical, management, or other forms of assistance.
Since foreign investors have the capital resources, the
actual exploitation and development, as well as the
effective disposition, of the country's natural resources,
would be under their direction, and control, relegating the
Filipino investors to the role of second-rate partners in joint
ventures.
Through the instrumentality of the service contract, the
1973 Constitution had legitimized at the highest level of
state policy that which was prohibited under the 1973
Constitution, namely: the exploitation of the country's
natural resources by foreign nationals. The drastic impact
of [this] constitutional change becomes more pronounced
when it is considered that the active party to any service
contract may be a corporation wholly owned by foreign
interests. In such a case, the citizenship requirement is
completely set aside, permitting foreign corporations to
obtain actual possession, control, and [enjoyment] of the
country's natural resources.246 [Emphasis supplied.]
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to
expunge it from the Constitution and reaffirm ownership
over our natural resources. That is the only way we can
exercise effective control over our natural resources.
This should not mean complete isolation of the country's
natural resources from foreign investment. Other contract
forms which are less derogatory to our sovereignty and
Law on NatRes (50-72 100
control over natural resources like technical assistance
agreements, financial assistance [agreements], co-
production agreements, joint ventures, production-sharing
could still be utilized and adopted without violating
constitutional provisions. In other words, we can adopt
contract forms which recognize and assert our sovereignty
and ownership over natural resources, and where the
foreign entity is just a pure contractor instead of the
beneficial owner of our economic resources.247
[Emphasis supplied.]
Still another member of the working group, Professor
Eduardo Labitag, proposed that:
2. Service contracts as practiced under the 1973
Constitution should be discouraged, instead the
government may be allowed, subject to authorization by
special law passed by an extraordinary majority to enter
into either technical or financial assistance. This is justified
by the fact that as presently worded in the 1973
Constitution, a service contract gives full control over the
contract area to the service contractor, for him to work,
manage and dispose of the proceeds or production. It was
a subterfuge to get around the nationality requirement of
the constitution.248 [Emphasis supplied.]
In the annotations on the proposed Article on National
Economy and Patrimony, the U.P. Law draft summarized
the rationale therefor, thus:
5. The last paragraph is a modification of the service
contract provision found in Section 9, Article XIV of the
1973 Constitution as amended. This 1973 provision
shattered the framework of nationalism in our fundamental
law (see Magallona, "Nationalism and its Subversion in the
Constitution"). Through the service contract, the 1973
Constitution had legitimized that which was prohibited
under the 1935 constitutionthe exploitation of the
country's natural resources by foreign nationals. Through
the service contract, acts prohibited by the Anti-Dummy
Law were recognized as legitimate arrangements. Service
contracts lodge exclusive management and control of the
enterprise to the service contractor, not unlike the old
concession regime where the concessionaire had
complete control over the country's natural resources,
having been given exclusive and plenary rights to exploit a
particular resource and, in effect, having been assured of
ownership of that resource at the point of extraction (see
Agabin, "Service Contracts: Old Wine in New Bottles").
Service contracts, hence, are antithetical to the principle of
sovereignty over our natural resources, as well as the
constitutional provision on nationalization or Filipinization
of the exploitation of our natural resources.
Under the proposed provision, only technical assistance or
financial assistance agreements may be entered into, and
only for large-scale activities. These are contract forms
which recognize and assert our sovereignty and ownership
over natural resources since the foreign entity is just a

pure contractor and not a beneficial owner of our
economic resources. The proposal recognizes the need
for capital and technology to develop our natural resources
without sacrificing our sovereignty and control over such
resources by the safeguard of a special law which requires
two-thirds vote of all the members of the Legislature. This
will ensure that such agreements will be debated upon
exhaustively and thoroughly in the National Assembly to
avert prejudice to the nation.249 [Emphasis supplied.]
The U.P. Law draft proponents viewed service contracts
under the 1973 Constitution as grants of beneficial
ownership of the country's natural resources to foreign
owned corporations. While, in theory, the State owns
these natural resources and Filipino citizens, their
beneficiaries service contracts actually vested foreigners
with the right to dispose, explore for, develop, exploit, and
utilize the same. Foreigners, not Filipinos, became the
beneficiaries of Philippine natural resources. This
arrangement is clearly incompatible with the constitutional
ideal of nationalization of natural resources, with the
Regalian doctrine, and on a broader perspective, with
Philippine sovereignty.
The proponents nevertheless acknowledged the need for
capital and technical know-how in the large-scale
exploitation, development and utilization of natural
resources the second paragraph of the proposed draft
itself being an admission of such scarcity. Hence, they
recommended a compromise to reconcile the nationalistic
provisions dating back to the 1935 Constitution, which
reserved all natural resources exclusively to Filipinos, and
the more liberal 1973 Constitution, which allowed
foreigners to participate in these resources through service
contracts. Such a compromise called for the adoption of a
new system in the exploration, development, and
utilization of natural resources in the form of technical
agreements or financial agreements which, necessarily,
are distinct concepts from service contracts.
The replacement of "service contracts" with
"agreements involving either technical or financial
assistance," as well as the deletion of the phrase
"management or other forms of assistance," assumes
greater significance when note is taken that the U.P. Law
draft proposed other equally crucial changes that were
obviously heeded by the CONCOM. These include the
abrogation of the concession system and the adoption of
new "options" for the State in the exploration,
development, and utilization of natural resources. The
proponents deemed these changes to be more consistent
with the State's ownership of, and its "full control and
supervision" (a phrase also employed by the framers)
over, such resources. The Project explained:
3. In line with the State ownership of natural resources, the
State should take a more active role in the exploration,
development, and utilization of natural resources, than the
present practice of granting licenses, concessions, or
Law on NatRes (50-72 101
leases hence the provision that said activities shall be
under the full control and supervision of the State. There
are three major schemes by which the State could
undertake these activities: first, directly by itself; second,
by virtue of co-production, joint venture, production sharing
agreements with Filipino citizens or corporations or
associations sixty per cent (60%) of the voting stock or
controlling interests of which are owned by such citizens;
or third, with a foreign-owned corporation, in cases of
large-scale exploration, development, or utilization of
natural resources through agreements involving either
technical or financial assistance only. x x x.
At present, under the licensing concession or lease
schemes, the government benefits from such benefits only
through fees, charges, ad valorem taxes and income taxes
of the exploiters of our natural resources. Such benefits
are very minimal compared with the enormous profits
reaped by theses licensees, grantees, concessionaires.
Moreover, some of them disregard the conservation of
natural resources and do not protect the environment from
degradation. The proposed role of the State will enable it
to a greater share in the profits it can also actively
husband its natural resources and engage in
developmental programs that will be beneficial to them.
4. Aside from the three major schemes for the exploration,
development, and utilization of our natural resources, the
State may, by law, allow Filipino citizens to explore,
develop, utilize natural resources in small-scale. This is in
recognition of the plight of marginal fishermen, forest
dwellers, gold panners, and others similarly situated who
exploit our natural resources for their daily sustenance and
survival.250
Professor Agabin, in particular, after taking pains to
illustrate the similarities between the two systems,
concluded that the service contract regime was but a
"rehash" of the concession system. "Old wine in new
bottles," as he put it. The rejection of the service contract
regime, therefore, is in consonance with the abolition of
the concession system.
In light of the deliberations of the CONCOM, the text of the
Constitution, and the adoption of other proposed changes,
there is no doubt that the framers considered and shared
the intent of the U.P. Law proponents in employing the
phrase "agreements . . . involving either technical or
financial assistance."
While certain commissioners may have mentioned the
term "service contracts" during the CONCOM
deliberations, they may not have been necessarily
referring to the concept of service contracts under the
1973 Constitution. As noted earlier, "service contracts" is a
term that assumes different meanings to different
people.251 The commissioners may have been using the
term loosely, and not in its technical and legal sense, to
refer, in general, to agreements concerning natural
resources entered into by the Government with foreign

corporations. These loose statements do not necessarily
translate to the adoption of the 1973 Constitution provision
allowing service contracts.
It is true that, as shown in the earlier quoted portions of the
proceedings in CONCOM, in response to Sr. Tan's
question, Commissioner Villegas commented that, other
than congressional notification, the only difference
between "future" and "past" "service contracts" is the
requirement of a general law as there were no laws
previously authorizing the same.252 However, such
remark is far outweighed by his more categorical
statement in his exchange with Commissioner Quesada
that the draft article "does not permit foreign investors to
participate" in the nation's natural resources which was
exactly what service contracts did except to provide
"technical or financial assistance."253
In the case of the other commissioners, Commissioner
Nolledo himself clarified in his work that the present
charter prohibits service contracts.254 Commissioner
Gascon was not totally averse to foreign participation, but
favored stricter restrictions in the form of majority
congressional concurrence.255 On the other hand,
Commissioners Garcia and Tadeo may have veered to the
extreme side of the spectrum and their objections may be
interpreted as votes against any foreign participation in our
natural resources whatsoever.
WMCP cites Opinion No. 75, s. 1987,256 and Opinion No.
175, s. 1990257 of the Secretary of Justice, expressing
the view that a financial or technical assistance agreement
"is no different in concept" from the service contract
allowed under the 1973 Constitution. This Court is not,
however, bound by this interpretation. When an
administrative or executive agency renders an opinion or
issues a statement of policy, it merely interprets a pre-
existing law; and the administrative interpretation of the
law is at best advisory, for it is the courts that finally
determine what the law means.258
In any case, the constitutional provision allowing the
President to enter into FTAAs with foreign-owned
corporations is an exception to the rule that participation in
the nation's natural resources is reserved exclusively to
Filipinos. Accordingly, such provision must be construed
strictly against their enjoyment by non-Filipinos. As
Commissioner Villegas emphasized, the provision is "very
restrictive."259 Commissioner Nolledo also remarked that
"entering into service contracts is an exception to the rule
on protection of natural resources for the interest of the
nation and, therefore, being an exception, it should be
subject, whenever possible, to stringent rules."260 Indeed,
exceptions should be strictly but reasonably construed;
they extend only so far as their language fairly warrants
and all doubts should be resolved in favor of the general
provision rather than the exception.261
Law on NatRes (50-72 102
With the foregoing discussion in mind, this Court finds that
R.A. No. 7942 is invalid insofar as said Act authorizes
service contracts. Although the statute employs the phrase
"financial and technical agreements" in accordance with
the 1987 Constitution, it actually treats these agreements
as service contracts that grant beneficial ownership to
foreign contractors contrary to the fundamental law.
Section 33, which is found under Chapter VI (Financial or
Technical Assistance Agreement) of R.A. No. 7942 states:
SEC. 33. Eligibility.Any qualified person with technical
and financial capability to undertake large-scale
exploration, development, and utilization of mineral
resources in the Philippines may enter into a financial or
technical assistance agreement directly with the
Government through the Department. [Emphasis
supplied.]
"Exploration," as defined by R.A. No. 7942,
means the searching or prospecting for mineral resources
by geological, geochemical or geophysical surveys,
remote sensing, test pitting, trending, drilling, shaft sinking,
tunneling or any other means for the purpose of
determining the existence, extent, quantity and quality
thereof and the feasibility of mining them for profit.262
A legally organized foreign-owned corporation may be
granted an exploration permit,263 which vests it with the
right to conduct exploration for all minerals in specified
areas,264 i.e., to enter, occupy and explore the same.265
Eventually, the foreign-owned corporation, as such
permittee, may apply for a financial and technical
assistance agreement.266
"Development" is the work undertaken to explore and
prepare an ore body or a mineral deposit for mining,
including the construction of necessary infrastructure and
related facilities.267
"Utilization" "means the extraction or disposition of
minerals."268 A stipulation that the proponent shall
dispose of the minerals and byproducts produced at the
highest price and more advantageous terms and
conditions as provided for under the implementing rules
and regulations is required to be incorporated in every
FTAA.269
A foreign-owned/-controlled corporation may likewise be
granted a mineral processing permit.270 "Mineral
processing" is the milling, beneficiation or upgrading of
ores or minerals and rocks or by similar means to convert
the same into marketable products.271
An FTAA contractor makes a warranty that the mining
operations shall be conducted in accordance with the
provisions of R.A. No. 7942 and its implementing rules272
and for work programs and minimum expenditures and

commitments.273 And it obliges itself to furnish the
Government records of geologic, accounting, and other
relevant data for its mining operation.274
"Mining operation," as the law defines it, means mining
activities involving exploration, feasibility, development,
utilization, and processing.275
The underlying assumption in all these provisions is that
the foreign contractor manages the mineral resources, just
like the foreign contractor in a service contract.
Furthermore, Chapter XII of the Act grants foreign
contractors in FTAAs the same auxiliary mining rights that
it grants contractors in mineral agreements (MPSA, CA
and JV).276 Parenthetically, Sections 72 to 75 use the
term "contractor," without distinguishing between FTAA
and mineral agreement contractors. And so does "holders
of mining rights" in Section 76. A foreign contractor may
even convert its FTAA into a mineral agreement if the
economic viability of the contract area is found to be
inadequate to justify large-scale mining operations,277
provided that it reduces its equity in the corporation,
partnership, association or cooperative to forty percent
(40%).278
Finally, under the Act, an FTAA contractor warrants that it
"has or has access to all the financing, managerial, and
technical expertise. . . ."279 This suggests that an FTAA
contractor is bound to provide some management
assistance a form of assistance that has been eliminated
and, therefore, proscribed by the present Charter.
By allowing foreign contractors to manage or operate all
the aspects of the mining operation, the above-cited
provisions of R.A. No. 7942 have in effect conveyed
beneficial ownership over the nation's mineral resources to
these contractors, leaving the State with nothing but bare
title thereto.
Moreover, the same provisions, whether by design or
inadvertence, permit a circumvention of the constitutionally
ordained 60%-40% capitalization requirement for
corporations or associations engaged in the exploitation,
development and utilization of Philippine natural
resources.
In sum, the Court finds the following provisions of R.A. No.
7942 to be violative of Section 2, Article XII of the
Constitution:
(1) The proviso in Section 3 (aq), which defines "qualified
person," to wit:
Provided, That a legally organized foreign-owned
corporation shall be deemed a qualified person for
purposes of granting an exploration permit, financial or
technical assistance agreement or mineral processing
permit.
Law on NatRes (50-72 103
(2) Section 23,280 which specifies the rights and
obligations of an exploration permittee, insofar as said
section applies to a financial or technical assistance
agreement,
(3) Section 33, which prescribes the eligibility of a
contractor in a financial or technical assistance agreement;
(4) Section 35,281 which enumerates the terms and
conditions for every financial or technical assistance
agreement;
(5) Section 39,282 which allows the contractor in a
financial and technical assistance agreement to convert
the same into a mineral production-sharing agreement;
(6) Section 56,283 which authorizes the issuance of a
mineral processing permit to a contractor in a financial and
technical assistance agreement;
The following provisions of the same Act are likewise void
as they are dependent on the foregoing provisions and
cannot stand on their own:
(1) Section 3 (g),284 which defines the term "contractor,"
insofar as it applies to a financial or technical assistance
agreement.
Section 34,285 which prescribes the maximum contract
area in a financial or technical assistance agreements;
Section 36,286 which allows negotiations for financial or
technical assistance agreements;
Section 37,287 which prescribes the procedure for filing
and evaluation of financial or technical assistance
agreement proposals;
Section 38,288 which limits the term of financial or
technical assistance agreements;
Section 40,289 which allows the assignment or transfer of
financial or technical assistance agreements;
Section 41,290 which allows the withdrawal of the
contractor in an FTAA;
The second and third paragraphs of Section 81,291 which
provide for the Government's share in a financial and
technical assistance agreement; and
Section 90,292 which provides for incentives to
contractors in FTAAs insofar as it applies to said
contractors;
When the parts of the statute are so mutually dependent
and connected as conditions, considerations,
inducements, or compensations for each other, as to

warrant a belief that the legislature intended them as a
whole, and that if all could not be carried into effect, the
legislature would not pass the residue independently, then,
if some parts are unconstitutional, all the provisions which
are thus dependent, conditional, or connected, must fall
with them.293
There can be little doubt that the WMCP FTAA itself is a
service contract.
Section 1.3 of the WMCP FTAA grants WMCP "the
exclusive right to explore, exploit, utilise[,] process and
dispose of all Minerals products and by-products thereof
that may be produced from the Contract Area."294 The
FTAA also imbues WMCP with the following rights:
(b) to extract and carry away any Mineral samples from
the Contract area for the purpose of conducting tests and
studies in respect thereof;
(c) to determine the mining and treatment processes to be
utilised during the Development/Operating Period and the
project facilities to be constructed during the Development
and Construction Period;
(d) have the right of possession of the Contract Area, with
full right of ingress and egress and the right to occupy the
same, subject to the provisions of Presidential Decree No.
512 (if applicable) and not be prevented from entry into
private ands by surface owners and/or occupants thereof
when prospecting, exploring and exploiting for minerals
therein;
xxx
(f) to construct roadways, mining, drainage, power
generation and transmission facilities and all other types of
works on the Contract Area;
(g) to erect, install or place any type of improvements,
supplies, machinery and other equipment relating to the
Mining Operations and to use, sell or otherwise dispose of,
modify, remove or diminish any and all parts thereof;
(h) enjoy, subject to pertinent laws, rules and regulations
and the rights of third Parties, easement rights and the use
of timber, sand, clay, stone, water and other natural
resources in the Contract Area without cost for the
purposes of the Mining Operations;
xxx
(i) have the right to mortgage, charge or encumber all or
part of its interest and obligations under this Agreement,
the plant, equipment and infrastructure and the Minerals
produced from the Mining Operations;
x x x. 295
Law on NatRes (50-72 104
All materials, equipment, plant and other installations
erected or placed on the Contract Area remain the
property of WMCP, which has the right to deal with and
remove such items within twelve months from the
termination of the FTAA.296
Pursuant to Section 1.2 of the FTAA, WMCP shall provide
"[all] financing, technology, management and personnel
necessary for the Mining Operations." The mining
company binds itself to "perform all Mining Operations . . .
providing all necessary services, technology and financing
in connection therewith,"297 and to "furnish all materials,
labour, equipment and other installations that may be
required for carrying on all Mining Operations."298>
WMCP may make expansions, improvements and
replacements of the mining facilities and may add such
new facilities as it considers necessary for the mining
operations.299
These contractual stipulations, taken together, grant
WMCP beneficial ownership over natural resources that
properly belong to the State and are intended for the
benefit of its citizens. These stipulations are abhorrent to
the 1987 Constitution. They are precisely the vices that the
fundamental law seeks to avoid, the evils that it aims to
suppress. Consequently, the contract from which they
spring must be struck down.
In arguing against the annulment of the FTAA, WMCP
invokes the Agreement on the Promotion and Protection of
Investments between the Philippine and Australian
Governments, which was signed in Manila on January 25,
1995 and which entered into force on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to
investments whenever made and thus the fact that
[WMCP's] FTAA was entered into prior to the entry into
force of the treaty does not preclude the Philippine
Government from protecting [WMCP's] investment in [that]
FTAA. Likewise, Article 3 (1) of the treaty provides that
"Each Party shall encourage and promote investments in
its area by investors of the other Party and shall [admit]
such investments in accordance with its Constitution,
Laws, regulations and investment policies" and in Article 3
(2), it states that "Each Party shall ensure that investments
are accorded fair and equitable treatment." The latter
stipulation indicates that it was intended to impose an
obligation upon a Party to afford fair and equitable
treatment to the investments of the other Party and that a
failure to provide such treatment by or under the laws of
the Party may constitute a breach of the treaty. Simply
stated, the Philippines could not, under said treaty, rely
upon the inadequacies of its own laws to deprive an
Australian investor (like [WMCP]) of fair and equitable
treatment by invalidating [WMCP's] FTAA without likewise
nullifying the service contracts entered into before the
enactment of RA 7942 such as those mentioned in PD 87
or EO 279.

This becomes more significant in the light of the fact that
[WMCP's] FTAA was executed not by a mere Filipino
citizen, but by the Philippine Government itself, through its
President no less, which, in entering into said treaty is
assumed to be aware of the existing Philippine laws on
service contracts over the exploration, development and
utilization of natural resources. The execution of the FTAA
by the Philippine Government assures the Australian
Government that the FTAA is in accordance with existing
Philippine laws.300 [Emphasis and italics by private
respondents.]
The invalidation of the subject FTAA, it is argued, would
constitute a breach of said treaty which, in turn, would
amount to a violation of Section 3, Article II of the
Constitution adopting the generally accepted principles of
international law as part of the law of the land. One of
these generally accepted principles is pacta sunt
servanda, which requires the performance in good faith of
treaty obligations.
Even assuming arguendo that WMCP is correct in its
interpretation of the treaty and its assertion that "the
Philippines could not . . . deprive an Australian investor
(like [WMCP]) of fair and equitable treatment by
invalidating [WMCP's] FTAA without likewise nullifying the
service contracts entered into before the enactment of RA
7942 . . .," the annulment of the FTAA would not constitute
a breach of the treaty invoked. For this decision herein
invalidating the subject FTAA forms part of the legal
system of the Philippines.301 The equal protection
clause302 guarantees that such decision shall apply to all
contracts belonging to the same class, hence, upholding
rather than violating, the "fair and equitable treatment"
stipulation in said treaty.
One other matter requires clarification. Petitioners contend
that, consistent with the provisions of Section 2, Article XII
of the Constitution, the President may enter into
agreements involving "either technical or financial
assistance" only. The agreement in question, however, is
a technical and financial assistance agreement.
Petitioners' contention does not lie. To adhere to the literal
language of the Constitution would lead to absurd
consequences.303 As WMCP correctly put it:
x x x such a theory of petitioners would compel the
government (through the President) to enter into contract
with two (2) foreign-owned corporations, one for financial
assistance agreement and with the other, for technical
assistance over one and the same mining area or land; or
to execute two (2) contracts with only one foreign-owned
corporation which has the capability to provide both
financial and technical assistance, one for financial
assistance and another for technical assistance, over the
same mining area. Such an absurd result is definitely not
sanctioned under the canons of constitutional
construction.304 [Underscoring in the original.]
Law on NatRes (50-72 105
Surely, the framers of the 1987 Charter did not
contemplate such an absurd result from their use of
"either/or." A constitution is not to be interpreted as
demanding the impossible or the impracticable; and
unreasonable or absurd consequences, if possible, should
be avoided.305 Courts are not to give words a meaning
that would lead to absurd or unreasonable consequences
and a literal interpretation is to be rejected if it would be
unjust or lead to absurd results.306 That is a strong
argument against its adoption.307 Accordingly, petitioners'
interpretation must be rejected.
The foregoing discussion has rendered unnecessary the
resolution of the other issues raised by the petition.
WHEREFORE, the petition is GRANTED. The Court
hereby declares unconstitutional and void:
(1) The following provisions of Republic Act No. 7942:
(a) The proviso in Section 3 (aq),
(b) Section 23,
(c) Section 33 to 41,
(d) Section 56,
(e) The second and third paragraphs of Section 81, and
(f) Section 90.
(2) All provisions of Department of Environment and
Natural Resources Administrative Order 96-40, s. 1996
which are not in conformity with this Decision, and
(3) The Financial and Technical Assistance Agreement
between the Government of the Republic of the
Philippines and WMC Philippines, Inc. SO ORDERED.
JOHN ERIC LONEY, STEVEN PAUL REID and PEDRO
B. HERNANDEZ, Petitioners, vs. PEOPLE OF THE
PHILIPPINES, Respondent.; G.R. No. 152644
February 10, 2006
The Case
This is a petition for review1 of the Decision2 dated 5
November 2001 and the Resolution dated 14 March 2002
of the Court of Appeals. The 5 November 2001 Decision
affirmed the ruling of the Regional Trial Court, Boac,
Marinduque, Branch 94, in a suit to quash Informations
filed against petitioners John Eric Loney, Steven Paul
Reid, and Pedro B. Hernandez ("petitioners"). The 14
March 2002 Resolution denied petitioners motion for
reconsideration.
The Facts

Petitioners John Eric Loney, Steven Paul Reid, and Pedro
B. Hernandez are the President and Chief Executive
Officer, Senior Manager, and Resident Manager for Mining
Operations, respectively, of Marcopper Mining Corporation
("Marcopper"), a corporation engaged in mining in the
province of Marinduque.
Marcopper had been storing tailings3 from its operations in
a pit in Mt. Tapian, Marinduque. At the base of the pit ran
a drainage tunnel leading to the Boac and Makalupnit
rivers. It appears that Marcopper had placed a concrete
plug at the tunnels end. On 24 March 1994, tailings
gushed out of or near the tunnels end. In a few days, the
Mt. Tapian pit had discharged millions of tons of tailings
into the Boac and Makalupnit rivers.
In August 1996, the Department of Justice separately
charged petitioners in the Municipal Trial Court of Boac,
Marinduque ("MTC") with violation of Article 91(B),4 sub-
paragraphs 5 and 6 of Presidential Decree No. 1067 or the
Water Code of the Philippines ("PD 1067"),5 Section 86 of
Presidential Decree No. 984 or the National Pollution
Control Decree of 1976 ("PD 984"),7 Section 1088 of
Republic Act No. 7942 or the Philippine Mining Act of 1995
("RA 7942"),9 and Article 36510 of the Revised Penal
Code ("RPC") for Reckless Imprudence Resulting in
Damage to Property.11
Petitioners moved to quash the Informations on the
following grounds: (1) the Informations were "duplicitous"
as the Department of Justice charged more than one
offense for a single act; (2) petitioners John Eric Loney
and Steven Paul Reid were not yet officers of Marcopper
when the incident subject of the Informations took place;
and (3) the Informations contain allegations which
constitute legal excuse or justification.
The Ruling of the MTC
In its Joint Order of 16 January 1997 ("Joint Order"), the
MTC12 initially deferred ruling on petitioners motion for
lack of "indubitable ground for the quashing of the
[I]nformations x x x." The MTC scheduled petitioners
arraignment in February 1997. However, on petitioners
motion, the MTC issued a Consolidated Order on 28 April
1997 ("Consolidated Order"), granting partial
reconsideration to its Joint Order and quashing the
Informations for violation of PD 1067 and PD 984. The
MTC maintained the Informations for violation of RA 7942
and Article 365 of the RPC. The MTC held:
[T]he 12 Informations have common allegations of
pollutants pointing to "mine tailings" which were
precipitately discharged into the Makulapnit and Boac
Rivers due to breach caused on the Tapian
drainage/tunnel due to negligence or failure to institute
adequate measures to prevent pollution and siltation of the
Makulapnit and Boac River systems, the very term and
condition required to be undertaken under the
Law on NatRes (50-72 106
Environmental Compliance Certificate issued on April 1,
1990.
The allegations in the informations point to same set [sic]
of evidence required to prove the single fact of pollution
constituting violation of the Water Code and the Pollution
Law which are the same set of evidence necessary to
prove the same single fact of pollution, in proving the
elements constituting violation of the conditions of ECC,
issued pursuant to the Philippine Mining Act. In both
instances, the terms and conditions of the Environmental
Compliance Certificate were allegedly violated. In other
words, the same set of evidence is required in proving
violations of the three (3) special laws.
After carefully analyzing and weighing the contending
arguments of the parties and after taking into
consideration the applicable laws and jurisprudence, the
Court is convinced that as far as the three (3) aforesaid
laws are concerned, only the Information for [v]iolation of
Philippine Mining Act should be maintained. In other
words, the Informations for [v]iolation of Anti-Pollution Law
(PD 984) and the Water Code (PD 1067) should be
dismissed/quashed because the elements constituting the
aforesaid violations are absorbed by the same elements
which constitute violation of the Philippine Mining Act (RA
7942).
Therefore, x x x Criminal Case[] Nos. 96-44, 96-45 and 96-
46 for [v]iolation of the Water Code; and Criminal Case[]
Nos. 96-47, 96-48 and 96-49 for [v]iolation of the Anti-
Pollution Law x x x are hereby DISMISSED or QUASHED
and Criminal Case[] Nos. 96-50, 96-51 and 96-52 for
[v]iolation of the Philippine Mining Act are hereby retained
to be tried on the merits.
The Information for [v]iolation of Article 365 of the Revised
Penal Code should also be maintained and heard in a full
blown trial because the common accusation therein is
reckless imprudence resulting to [sic] damage to property.
It is the damage to property which the law punishes not
the negligent act of polluting the water system. The
prosecution for the [v]iolation of Philippine Mining Act is
not a bar to the prosecution for reckless imprudence
resulting to [sic] damage to property.13
The MTC re-scheduled petitioners arraignment on the
remaining charges on 28 and 29 May 1997. In the hearing
of 28 May 1997, petitioners manifested that they were
willing to be arraigned on the charge for violation of Article
365 of the RPC but not on the charge for violation of RA
7942 as they intended to appeal the Consolidated Order in
so far as it maintained the Informations for that offense.
After making of record petitioners manifestation, the MTC
proceeded with the arraignment and ordered the entry of
"not guilty" pleas on the charges for violation of RA 7942
and Article 365 of the RPC.

Petitioners subsequently filed a petition for certiorari with
the Regional Trial Court, Boac, Marinduque, assailing that
portion of the Consolidated Order maintaining the
Informations for violation of RA 7942. Petitioners petition
was raffled to Branch 94. For its part, public respondent
filed an ordinary appeal with the same court assailing that
portion of the Consolidated Order quashing the
Informations for violation of PD 1067 and PD 984. Public
respondents appeal was raffled to Branch 38. On public
respondents motion, Branch 38 ordered public
respondents appeal consolidated with petitioners petition
in Branch 94.
The Ruling of Branch 94
In its Resolution14 of 20 March 1998, Branch 94 granted
public respondents appeal but denied petitioners petition.
Branch 94 set aside the Consolidated Order in so far as it
quashed the Informations for violation of PD 1067 and PD
984 and ordered those charges reinstated. Branch 94
affirmed the Consolidated Order in all other respects.
Branch 94 held:
After a careful perusal of the laws concerned, this court is
of the opinion that there can be no absorption by one
offense of the three other offenses, as [the] acts penalized
by these laws are separate and distinct from each other.
The elements of proving each violation are not the same
with each other. Concededly, the single act of dumping
mine tailings which resulted in the pollution of the
Makulapnit and Boac rivers was the basis for the
information[s] filed against the accused each charging a
distinct offense. But it is also a well-established rule in this
jurisdiction that
"A single act may offend against two or more entirely
distinct and unrelated provisions of law, and if one
provision requires proof of an additional fact or element
which the other does not, an acquittal or conviction or a
dismissal of the information under one does not bar
prosecution under the other. x x x."
xxxx
[T]he different laws involve cannot absorb one another as
the elements of each crime are different from one another.
Each of these laws require [sic] proof of an additional fact
or element which the other does not although they
stemmed from a single act.15
Petitioners filed a petition for certiorari with the Court of
Appeals alleging that Branch 94 acted with grave abuse of
discretion because (1) the Informations for violation of PD
1067, PD 984, RA 7942 and the Article 365 of the RPC
"proceed from and are based on a single act or incident of
polluting the Boac and Makalupnit rivers thru dumping of
mine tailings" and (2) the duplicitous nature of the
Informations contravenes the ruling in People v. Relova.16
Petitioners further contended that since the acts
Law on NatRes (50-72 107
complained of in the charges for violation of PD 1067, PD
984, and RA 7942 are "the very same acts complained of"
in the charge for violation of Article 365 of the RPC, the
latter absorbs the former. Hence, petitioners should only
be prosecuted for violation of Article 365 of the RPC.17
The Ruling of the Court of Appeals
In its Decision of 5 November 2001, the Court of Appeals
affirmed Branch 94s ruling. The appellate court held:
The records of the case disclose that petitioners filed a
motion to quash the aforementioned Informations for being
duplicitous in nature. Section 3 of Rule 117 of the Revised
Rules of Court specifically provides the grounds upon
which an information may be quashed. x x x
xxxx
[D]uplicity of Informations is not among those included in x
x x [Section 3, Rule 117].
xxxx
We now go to petitioners claim that the resolution of the
public respondent contravened the doctrine laid down in
People vs. Relova for being violative of their right against
multiple prosecutions.
In the said case, the Supreme Court found the Peoples
argument with respect to the variances in the mens rea of
the two offenses being charged to be correct. The Court,
however, decided the case in the context of the second
sentence of Article IV (22) of the 1973 Constitution (now
under Section 21 of Article III of the 1987 Constitution),
rather than the first sentence of the same section. x x x
xxxx
[T]he doctrine laid down in the Relova case does not
squarely apply to the case at Bench since the Informations
filed against the petitioners are for violation of four
separate and distinct laws which are national in character.
xxxx
This Court firmly agrees in the public respondents
understanding that the laws by which the petitioners have
been [charged] could not possibly absorb one another as
the elements of each crime are different. Each of these
laws require [sic] proof of an additional fact or element
which the other does not, although they stemmed from a
single act. x x x
xxxx
[T]his Court finds that there is not even the slightest indicia
of evidence that would give rise to any suspicion that
public respondent acted with grave abuse of discretion

amounting to excess or lack of jurisdiction in reversing the
Municipal Trial Courts quashal of the Informations against
the petitioners for violation of P.D. 1067 and P.D. 984.
This Court equally finds no error in the trial courts denial
of the petitioners motion to quash R.A. 7942 and Article
365 of the Revised Penal Code.18
Petitioners sought reconsideration but the Court of
Appeals denied their motion in its Resolution of 14 March
2002.
Petitioners raise the following alleged errors of the Court of
Appeals:
I. THE COURT OF APPEALS COMMITTED A
R[E]VERSIBLE ERROR IN MAINTAINING THE
CHARGES FOR VIOLATION OF THE PHILIPPINE
MINING ACT (R.A. 7942) AND REINSTATING THE
CHARGES FOR VIOLATION OF THE WATER CODE
(P.D. 1067) AND POLLUTION CONTROL LAW (P.D.
984), CONSIDERING THAT:
A. THE INFORMATIONS FOR VIOLATION OF THE
WATER CODE (P.D. 1067), THE POLLUTION CONTROL
LAW (P.D. 984), THE PHILIPPINE MINING ACT (R.A.
7942) AND ARTICLE 365 OF THE REVISED PENAL
CODE PROCEED FROM AND ARE BASED ON A
SINGLE ACT OR INCIDENT OF POLLUTING THE BOAC
AND MAKULAPNIT RIVERS THRU DUMPING OF MINE
TAILINGS.
B. THE PROSECUTION OF PETITIONERS FOR
DUPLICITOUS AND MULTIPLE CHARGES
CONTRAVENES THE DOCTRINE LAID DOWN IN
PEOPLE VS. RELOVA, 148 SCRA 292 [1986 THAT "AN
ACCUSED SHOULD NOT BE HARASSED BY MULTIPLE
PROSECUTIONS FOR OFFENSES WHICH THOUGH
DIFFERENT FROM ONE ANOTHER ARE
NONETHELESS EACH CONSTITUTED BY A COMMON
SET OR OVERLAPPING SETS OF TECHNICAL
ELEMENTS."
II. THE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR IN RULING THAT THE ELEMENT
OF LACK OF NECESSARY OR ADEQUATE
PRECAUTION, NEGLIGENCE, RECKLESSNESS AND
IMPRUDENCE UNDER ARTICLE 356 [sic] OF THE
REVISED PENAL CODE DOES NOT FALL WITHIN THE
AMBIT OF ANY OF THE ELEMENTS OF THE
PERTINENT PROVISIONS OF THE WATER CODE,
POLLUTION CONTROL LAW AND PHILIPPINE MINING
ACT CHARGED AGAINST PETITIONERS[.]19
The Issues
The petition raises these issues:
(1) Whether all the charges filed against petitioners except
one should be quashed for duplicity of charges and only
Law on NatRes (50-72 108
the charge for Reckless Imprudence Resulting in Damage
to Property should stand; and
(2) Whether Branch 94s ruling, as affirmed by the Court of
Appeals, contravenes People v. Relova.
The Ruling of the Court
The petition has no merit.
No Duplicity of Charges in the Present Case
Duplicity of charges simply means a single complaint or
information charges more than one offense, as Section 13
of Rule 11020 of the 1985 Rules of Criminal Procedure
clearly states:
Duplicity of offense. A complaint or information must
charge but one offense, except only in those cases in
which existing laws prescribe a single punishment for
various offenses.
In short, there is duplicity (or multiplicity) of charges when
a single Information charges more than one offense.21
Under Section 3(e), Rule 11722 of the 1985 Rules of
Criminal Procedure, duplicity of offenses in a single
information is a ground to quash the Information. The
Rules prohibit the filing of such Information to avoid
confusing the accused in preparing his defense.23 Here,
however, the prosecution charged each petitioner with four
offenses, with each Information charging only one offense.
Thus, petitioners erroneously invoke duplicity of charges
as a ground to quash the Informations. On this score
alone, the petition deserves outright denial.
The Filing of Several Charges is Proper
Petitioners contend that they should be charged with one
offense only Reckless Imprudence Resulting in
Damage to Property because (1) all the charges filed
against them "proceed from and are based on a single act
or incident of polluting the Boac and Makalupnit rivers thru
dumping of mine tailings" and (2) the charge for violation
of Article 365 of the RPC "absorbs" the other charges
since the element of "lack of necessary or adequate
protection, negligence, recklessness and imprudence" is
common among them.
The contention has no merit.
As early as the start of the last century, this Court had
ruled that a single act or incident might offend against two
or more entirely distinct and unrelated provisions of law
thus justifying the prosecution of the accused for more
than one offense.24 The only limit to this rule is the
Constitutional prohibition that no person shall be twice put
in jeopardy of punishment for "the same offense."25 In

People v. Doriquez,26 we held that two (or more) offenses
arising from the same act are not "the same"
x x x if one provision [of law] requires proof of an additional
fact or element which the other does not, x x x. Phrased
elsewise, where two different laws (or articles of the same
code) define two crimes, prior jeopardy as to one of them
is no obstacle to a prosecution of the other, although both
offenses arise from the same facts, if each crime involves
some important act which is not an essential element of
the other.27 (Emphasis supplied)
Here, double jeopardy is not at issue because not all of its
elements are present.28 However, for the limited purpose
of controverting petitioners claim that they should be
charged with one offense only, we quote with approval
Branch 94s comparative analysis of PD 1067, PD 984, RA
7942, and Article 365 of the RPC showing that in each of
these laws on which petitioners were charged, there is one
essential element not required of the others, thus:
In P.D. 1067 (Philippines Water Code), the additional
element to be established is the dumping of mine tailings
into the Makulapnit River and the entire Boac River
System without prior permit from the authorities
concerned. The gravamen of the offense here is the
absence of the proper permit to dump said mine tailings.
This element is not indispensable in the prosecution for
violation of PD 984 (Anti-Pollution Law), [RA] 7942
(Philippine Mining Act) and Art. 365 of the Revised Penal
Code. One can be validly prosecuted for violating the
Water Code even in the absence of actual pollution, or
even [if] it has complied with the terms of its Environmental
Compliance Certificate, or further, even [if] it did take the
necessary precautions to prevent damage to property.
In P.D. 984 (Anti-Pollution Law), the additional fact that
must be proved is the existence of actual pollution. The
gravamen is the pollution itself. In the absence of any
pollution, the accused must be exonerated under this law
although there was unauthorized dumping of mine tailings
or lack of precaution on its part to prevent damage to
property.
In R.A. 7942 (Philippine Mining Act), the additional fact
that must be established is the willful violation and gross
neglect on the part of the accused to abide by the terms
and conditions of the Environmental Compliance
Certificate, particularly that the Marcopper should ensure
the containment of run-off and silt materials from reaching
the Mogpog and Boac Rivers. If there was no violation or
neglect, and that the accused satisfactorily proved [sic]
that Marcopper had done everything to ensure
containment of the run-off and silt materials, they will not
be liable. It does not follow, however, that they cannot be
prosecuted under the Water Code, Anti-Pollution Law and
the Revised Penal Code because violation of the
Environmental Compliance Certificate is not an essential
element of these laws.
Law on NatRes (50-72 109
On the other hand, the additional element that must be
established in Art. 365 of the Revised Penal Code is the
lack of necessary or adequate precaution, negligence,
recklessness and imprudence on the part of the accused
to prevent damage to property. This element is not
required under the previous laws. Unquestionably, it is
different from dumping of mine tailings without permit, or
causing pollution to the Boac river system, much more
from violation or neglect to abide by the terms of the
Environmental Compliance Certificate. Moreover, the
offenses punished by special law are mal[a] prohibita in
contrast with those punished by the Revised Penal Code
which are mala in se.29
Consequently, the filing of the multiple charges against
petitioners, although based on the same incident, is
consistent with settled doctrine.
On petitioners claim that the charge for violation of Article
365 of the RPC "absorbs" the charges for violation of PD
1067, PD 984, and RA 7942, suffice it to say that a mala in
se felony (such as Reckless Imprudence Resulting in
Damage to Property) cannot absorb mala prohibita crimes
(such as those violating PD 1067, PD 984, and RA 7942).
What makes the former a felony is criminal intent (dolo) or
negligence (culpa); what makes the latter crimes are the
special laws enacting them.
People v. Relova not in Point
Petitioners reiterate their contention in the Court of
Appeals that their prosecution contravenes this Courts
ruling in People v. Relova. In particular, petitioners cite the
Courts statement in Relova that the law seeks to prevent
harassment of the accused by "multiple prosecutions for
offenses which though different from one another are
nonetheless each constituted by a common set or
overlapping sets of technical elements."
This contention is also without merit.1avvphil.net
The issue in Relova is whether the act of the Batangas
Acting City Fiscal in charging one Manuel Opulencia
("Opulencia") with theft of electric power under the RPC,
after the latter had been acquitted of violating a City
Ordinance penalizing the unauthorized installation of
electrical wiring, violated Opulencias right against double
jeopardy. We held that it did, not because the offenses
punished by those two laws were the same but because
the act giving rise to the charges was punished by an
ordinance and a national statute, thus falling within the
proscription against multiple prosecutions for the same act
under the second sentence in Section 22, Article IV of the
1973 Constitution, now Section 21, Article III of the 1987
Constitution. We held:
The petitioner concludes that:
 Law on NatRes (50-72 110

"The unauthorized installation punished by the ordinance

[of Batangas City] is not the same as theft of electricity
[under the Revised Penal Code]; that the second offense
is not an attempt to commit the first or a frustration thereof
and that the second offense is not necessarily included in
the offense charged in the first information."

The above argument[ ] made by the petitioner [is] of

course correct. This is clear both from the express terms
of the constitutional provision involved which reads as
follows:

"No person shall be twice put in jeopardy of punishment

for the same offense. If an act is punished by a law and an
ordinance, conviction or acquittal under either shall
constitute a bar to another prosecution for the same act." x
xx

and from our case law on this point. The basic difficulty
with the petitioners position is that it must be examined,
not under the terms of the first sentence of Article IV (22)
of the 1973 Constitution, but rather under the second
sentence of the same section. The first sentence of Article
IV (22) sets forth the general rule: the constitutional
protection against double jeopardy is not available where
the second prosecution is for an offense that is different
from the offense charged in the first or prior prosecution,
although both the first and second offenses may be based
upon the same act or set of acts. The second sentence of
Article IV (22) embodies an exception to the general
proposition: the constitutional protection, against double
jeopardy is available although the prior offense charged
under an ordinance be different from the offense charged
subsequently under a national statute such as the Revised
Penal Code, provided that both offenses spring from the
same act or set of acts. x x x30 (Italicization in the original;
boldfacing supplied)

Thus, Relova is no authority for petitioners claim against

multiple prosecutions based on a single act not only
because the question of double jeopardy is not at issue
here, but also because, as the Court of Appeals held,
petitioners are being prosecuted for an act or incident
punished by four national statutes and not by an ordinance
and a national statute. In short, petitioners, if ever, fall
under the first sentence of Section 21, Article III which
prohibits multiple prosecution for the same offense, and
not, as in Relova, for offenses arising from the same
incident.

WHEREFORE, we DENY the petition. We AFFIRM the

Decision dated 5 November 2001 and the Resolution
dated 14 March 2002 of the Court of Appeals. SO
ORDERED.