Isagani Cruz and Europa v.

Secretary of Environment and Natural Resources, et al

November 10, 2010

FACTS: Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and
taxpayers, assailing the constitutionality of certain provisions of RA 8371, otherwise known as the Indigenous Peoples
Rights Act of 1997 (IPRA) and its Implementing Rules and Regulations. The Solicitor General is of the view that the IPRA
is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays
that the petition be granted in part. The Commission on Human Rights asserts that IPRA is an expression of the principle
of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a
serious disadvantage like indigenous people. It prays that the petition be dismissed.

HELD: After due deliberation, 7 voted to dismiss the petition, while 7 other members of the Court voted to grant the
petition. As the votes were equally divided and the necessary majority was not obtained, the case was redeliberated
upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the
Rules of Civil Procedure, the petition is DISMISSED.

LEE HONG KOK vs DAVID

G.R. No. L-30389, Dec. 27, 1972
Distinction between IMPERIUM and DOMINIUM
Only the government can question a void certificate of title issued pursuant to a government grant.

FACTS:
This is regarding a piece of land which Aniano David acquired lawful title thereto, pursuant to his miscellaneous sales
application. After approval of his application, the Director of Lands issued an order of award and issuance of sales
patent, covering said lot by virtue of which the Undersecretary of Agriculture and Natural Resources issued a
Miscellaneous Sales Patent. The Register of Deeds then issued an original certificate of title to David.

During all this time, Lee Hong Kok did not oppose nor file any adverse claim.

ISSUE:
Whether or not Lee Hong Kok may question the government grant

HELD:
Only the Government, represented by the Director of Lands or the Secretary of Agriculture and Natural Resources, can
bring an action to cancel a void certificate of title issued pursuant to a void patent. This was not done by said officers but
by private parties like the plaintiffs, who cannot claim that the patent and title issued for the land involved are void since
they are not the registered owners thereof nor had they been declared as owners in the cadastral proceedings after
claiming it as their private property.

The fact that the grant was made by the government is undisputed. Whether the grant was in conformity with the law or
not is a question which the government may raise, but until it is raised by the government and set aside, the defendant
cannot question it. The legality of the grant is a question between the grantee and the government.

IMPERIUM vs. DOMINIUM:

The government authority possessed by the State which is appropriately embraced int eh concept of sovereignty comes
under the heading of imperium; its capacity to own or acquire property under dominium. The use of this term is
appropriate with reference to lands held by the State in its proprietary character. In such capacity, it may provide for the
exploitation and use of lands and other natural resources, including their disposition, except as limited by the
Constitution.
La Bugal-B'Laan Tribal Assn vs Ramos Case Digest
G.R. No 127882

Facts :
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.

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." R.A. No. 7942 defines the modes of mineral agreements for mining
operations, outlines the procedure for their filing and approval, assignment/transfer and withdrawal, and fixes their
terms. Similar provisions govern financial or technical assistance agreements.

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. 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.

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, giving the DENR fifteen days from receipt to act thereon. The
DENR, however, has yet to respond or act on petitioners' letter.

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction.

They pray that the Court issue an order:

(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.

Issue :
Whether or not Republic Act No. 7942 is unconstitutional.

Ruling :
The Court finds the following provisions of R.A. No. 7942 to be violative of Section 2, Article XII of the Constitution and
hereby declares unconstitutional and void:

(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.

(2) Section 23, 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, which enumerates the terms and conditions for every financial or technical assistance agreement;

(5) Section 39, which allows the contractor in a financial and technical assistance agreement to convert the same into a
mineral production-sharing agreement;

(6) Section 56, 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), which defines the term "contractor," insofar as it applies to a financial or technical assistance
agreement.

Section 34, which prescribes the maximum contract area in a financial or technical assistance agreements;

Section 36, which allows negotiations for financial or technical assistance agreements;

Section 37, which prescribes the procedure for filing and evaluation of financial or technical assistance agreement
proposals;

Section 38, which limits the term of financial or technical assistance agreements;

Section 40, which allows the assignment or transfer of financial or technical assistance agreements;

Section 41, which allows the withdrawal of the contractor in an FTAA;

The second and third paragraphs of Section 81, which provide for the Government's share in a financial and technical
assistance agreement; and

Section 90, 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.

WHEREFORE, the petition is GRANTED.

JG Summit Holdings Inc. vs. Court of Appeals

[GR 124293, 20 November 2000]

Facts: On 27 January 1977, the National Investment and Development Corporation (NIDC), a government corporation,
entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. of Kobe, Japan (Kawasaki) for the
construction, operation, and management of the Subic National Shipyard, Inc. (SNS), which subsequently became the
Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a
shareholding proportion of 60% - 40%, respectively. One of the provisions of the JVA accorded the parties the right of
first refusal should either party sell, assign or transfer its interest in the joint venture. On 25 November 1986, NIDC
transferred all its rights, title and interest in PHILSECO to the Philippine National Bank (PNB).

More than two months later or on 3 February 1987, by virtue of Administrative Order 14, PNB's interest in PHILSECO
was transferred to the National Government. Meanwhile, on 8 December 1986, President Corazon C. Aquino issued
Proclamation 50 establishing the Committee on Privatization (COP) and the Asset Privatization Trust (APT) to take title to
and possession of, conserve, manage and dispose of non-performing assets of the National Government. On 27 February
1987, a trust agreement was entered into between the National Government and the APT by virtue of which the latter
was named the trustee of the National Government's share in PHILSECO. In 1989, as a result of a quasi-reorganization of
PHILSECO to settle its huge obligations to PNB, the National Government's shareholdings in PHILSECO increased to
97.41% thereby reducing Kawasaki's shareholdings to 2.59%. Exercising their discretion, the COP and the APT deemed it
in the best interest of the national economy and the government to privatize PHILSECO by selling 87.67% of its total
outstanding capital stock to private entities.

After a series of negotiations between the APT and Kasawaki, they agreed that the latter's right of first refusal under the
JVA be "exchanged" for the right to top by 5% the highest bid for said shares. They further agreed that Kawasaki would
be entitled to name a company in which it was a stockholder, which could exercise the right to top. On 7 September
1990, Kawasaki informed APT that Philyards Holdings, Inc. (PHI) would exercise its right to top by 5%. At the pre-bidding
conference held on 28 September 1993, interested bidders were given copies of the JVA between NIDC and Kawasaki,
and of the Asset Specific Bidding Rules (ASBR) drafted for the 87.67% equity (sic) in PHILSECO of the National
Government. The provisions of the ASBR were explained to the interested bidders who were notified that bidding would
be held on 2 December 1993. At the public bidding on said date, the consortium composed of JG Summit Holdings, Inc.
(JGSMI), Sembawang Shipyard Ltd. of Singapore (Sembawang), and Jurong Shipyard Limited of Malaysia (Jurong), was
declared the highest bidder at P2.03 billion. The following day, the COP approved the sale of 87.67% National
Government shares of stock in PHILSECO to said consortium. It notified JGSMI of said approval "subject to the right of
Kawasaki Heavy Industries, Inc./Philyards Holdings, Inc. to top JGSMI's bid by 5% as specified in the bidding rules."

On 29 December 1993, JGSMI informed the APT that it was protesting the offer of PHI to top its bid on the grounds that:
(a) the Kawasaki/PHI consortium composed of Kawasaki, Philyards, Mitsui, Keppel, SM Group, ICTSI and Insular Life
violated the ASBR because the last four (4) companies were the losing bidders (for P1.528 billion) thereby circumventing
the law and prejudicing the weak winning bidder; (b) only Kawasaki could exercise the right to top; (c) giving the same
option to top to PHI constituted unwarranted benefit to a third party; (d) no right of first refusal can be exercised in a
public bidding or auction sale, and (e) the JG Summit Consortium was not estopped from questioning the proceedings.
On 2 February 1994, JGSMI was notified that PHI had fully paid the balance of the purchase price of the subject bidding.
On 7 February 1994, the APT notified JGSMI that PHI had exercised its option to top the highest bid and that the COP
had approved the same on 6 January 1994. On 24 February 1994, the APT and PHI executed a Stock Purchase
Agreement. Consequently, JGSMI filed with the Supreme Court a petition for mandamus under GR 114057. On 11 May
1994, said petition was referred to the Court of Appeals. On 18 July 1995, the Court of Appeals "denied" for lack of merit
the petition for mandamus. JGSMI filed a motion for the reconsideration of said Decision which was denied on 15 March
1996. JGSMI filed the petition for review on certiorari.

Issue: Whether PHILSECO, as a shipyard, is a public utility and, hence, could be operated only by a corporation at least
60% of whose capital is owned by Filipino citizens, in accordance with Article XII, Section 10 of the Constitution.

Held: A shipyard such as PHILSECO being a public utility as provided by law, Section 11 of the Article XII of the
Constitution applies. The provision states that "No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall
such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall
any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or
repeal by the Congress when the common good so requires. The State shall encourage equity participation in public
utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise
shall be limited to their proportionate share in its capital, and all the executive and managing officers of such
corporation or association shall be citizens of the Philippines." The progenitor of this constitutional provision, Article XIV,
Section 5 of the 1973 Constitution, required the same proportion of 60% - 40% capitalization. The JVA between NIDC
and Kawasaki entered into on 27 January 1977 manifests the intention of the parties to abide by the constitutional
mandate on capitalization of public utilities. The joint venture created between NIDC and Kawasaki falls within the
purview of an "association" pursuant to Section 5 of Article XIV of the 1973 Constitution and Section 11 of Article XII of
the 1987 Constitution. Consequently, a joint venture that would engage in the business of operating a public utility, such
as a shipyard, must observe the proportion of 60%-40% Filipino-foreign capitalization. Further, paragraph 1.4 of the JVA
accorded the parties the right of first refusal "under the same terms." This phrase implies that when either party
exercises the right of first refusal under paragraph 1.4, they can only do so to the extent allowed them by paragraphs 1.2
and 1.3 of the JVA or under the proportion of 60%-40% of the shares of stock. Thus, should the NIDC opt to sell its shares
of stock to a third party, Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock
would not exceed 40% of the entire shares of stock of SNS or PHILSECO. The NIDC, on the other hand, may purchase
even beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned corporation,
there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits
only foreign capitalization. Kawasaki was bound by its contractual obligation under the JVA that limits its right of first
refusal to 40% of the total capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization
of the joint venture on account of both constitutional and contractual proscriptions. From the facts on record, it appears
that at the outset, the APT and Kawasaki respected the 60%-40% capitalization proportion in PHILSECO. However, APT
subsequently encouraged Kawasaki to participate in the public bidding of the National Government's shareholdings of
87.67% of the total PHILSECO shares, definitely over and above the 40% limit of its shareholdings. In so doing, the APT
went beyond the ambit of its authority.

Republic v. De Guzman (Art. XII Sec. 2)

Facts: Public Building was held, and the Board of Liquidators

awarded Lot 5249 ts-217, a 450 square meter land situated in
Dadiangas, General Santos City to Eusebio Diones. Eusebio Diono
transferred his rights over the lot to Enrique de Guzman for 700
pesos. Board of Liquidators cancelled the award given to Eusebio
Diones.

From the time he purchased the lot, de Guzman did not occupy
it. Lucena Ong Ante, another claimant of the lot authorized Carmen Ty
to occupy land. Ong Ante also paid for real state taxes from 1963-
1980.

De Guzman filed with the Board of Liquidators Miscellaneous

Sales Application. The Director of Lands ordered the award and
issuance of patent to de Guzman. Department of Agriculture and
Natural Resources approved it and the Register of Deeds issued OCT
No. P29712 in the name of de Guzman.

De Guzman sold the lot to his married daughter and her

husband (Carolina de Guzman and Rio Rivera) who later mortgaged it to
Hoechst Phils. Inc. The spouses failed to settle their obligation and
Hoechst Philippines, Inc. foreclosed mortgage and acquired the lot.
Certificate of sale was issued but the real estate mortgage and
certificate of sale were not registered with the Register of Deeds.
TCT remained in Name of Spouses Rivera.

Republic of the Philippines filed with CFI, Gen. Santos City

a re-amended complaint for reversion of Lot 5249 Ts-217 and
cancellation of titles against de Guzman, Rivera Spouses, City
Registrar of Deeds and Hoechst Philippines, Inc. and contended that:
- De Guzman obtained OCT through fraudulent means
- The lot was awarded to Eusebio Diones, hence, Diono had no
right to execute deed of transfer.
- De Guzman was neither in actual possession of land nor made
improvements thereto which were the requirements for application for
miscellaneous sales patent. Therefore OCT P-29712 issued to de Guzman
was null and void.
- TCT in the name of spouses Rivera were null and void for they
were not innocent purchases for value
- The lot must be reverted back to mass of public domain

Trial court ruled in favor of the Republic of the Philippines. CA

reversed the decision and ruled that when de Guzman obtained OCT, the
land ceased to be part of public domain and was converted to private
registered land, hence, Dir. of Land had neither control nor
jurisdiction over it and the Title becomes indefeasible after
expiration of 1 year from issuance.

ISSUES: W/N
1. Dir. of Lands loses authority over land the moment OCT was
issued.
2. De Guzman validly obtained sales patent and OCT.
3. Validity of patent and OCT can still be assailed after lapse
of 1 year from issuance.
4. Spouses Rivera are innocent purchase for value.

HELD:
1. No. Authority of Dir. Of Land to investigate conflicts over
public lands is derived from Sec. 91 of Public Lands Act. It is his
right and duty to conduct investigations of alleged fraud in securing
patents and corresponding titles. While title issued on the basis of
a plant is indefeasible, such is not a bar to an investigation by the
Dir. of Lands as to how such title has been acquired, if the purpose
of investigation is to determine whether or not fraud had been
committed in securing the title, in order that appropriate action for
reverses may be filed by the government

2. No. De Guzman misrepresented facts in his application for

sales patent. He was not in possession of the property.

3. Yes. State can assail a patent fraudulently issued by the

Dir. Of Lands. " Where public land is acquired by an applicant
through fraud and misinterpretation, the State may institute
reversion proceedings even after lapse of 1 year. The indefeasibility
of a title does not attach to titles secured by fraud and
misinterpretation.

4. No. Spouses Rivera are related by consequently and affinity

to de Guzman. They had notice that de Guzman was not in possession of
the land.

Petition granted and decision of CA reversed. Miscellaneous Sales

Patent No. 814 and OCT in the name of de Guzman, and the TCT's
issued
are null and void. Ordered reversion to the mass of public domain of
Lot 5249.
Sunbeam Convenience Food Inc. vs CA and Republic of Phils.
G.R. No. 50464, Jan. 29, 1990

FACTS:
Sunbeam Convenience Foods, Inc. is the recipient of a Sales Patent issued by the Bureau of Lands over two parcels of
land in Bataan. An OCT was thereby issued. The Solicitor-General filed an action for reversion on the ground that the lots
were forest lands and therefore inalienable.

CA ruled, upholding the Solicitor-General's contention.

ISSUE:
Whether or not land is alienable

HELD:
The SC affirmed.
Our adherence to the Regalian Doctrine subjects all agricultural, timber, and mineral lands to the dominion of the State.
Thus, before any land may be declassified from the forest group and converted into alienable or disposable land for
agricultural purposes, there must be a positive act from the Government. Even rules on the confirmation of imperfect
titles do not apply unless and until the land classified as forest land is released in an official proclamation to that effect
so that it may form part of the disposable agricultural lands of the public domain.

The mere fact that a title was issued by the Director of Lands does not confer any validity on such title if the property
covered by the title or patent is part of the public forest.

Chavez vs Public Estates Authority and AMARI Corporation

On February 27, 2012

FACTS: The Public Estates Authority is the central implementing agency tasked to undertake reclamation projects
nationwide. It took over the leasing and selling functions of the DENR insofar as reclaimed or about to be reclaimed
foreshore lands are concerned.

PEA sought the transfer to AMARI, a private corporation, of the ownership of 77.34 hectares of the Freedom Islands.
PEA also sought to have 290.156 hectares of submerged areas of Manila Bay to AMARI.

ISSUE: Whether or not the transfer is valid.

HELD: No. To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will
sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of
the public domain.

The Supreme Court affirmed that the 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered
by certificates of title in the name of PEA, are alienable lands of the public domain. The 592.15 hectares of submerged
areas of Manila Bay remain inalienable natural resources of the public domain. Since the Amended JVA seeks to transfer
to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being
contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of
alienable land of the public domain. Furthermore, since the Amended JVA also seeks to transfer to AMARI ownership of
290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII
of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public
domain.