51

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 91889 August 27, 1993

MANUEL R. DULAY ENTERPRISES, INC., VIRGILIO E. DULAY AND NEPOMUCENO
REDOVAN, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, EDGARDO D. PABALAN, MANUEL A. TORRES,
JR., MARIA THERESA V. VELOSO AND CASTRENSE C. VELOSO, respondents.
Virgilio E. Dulay for petitioners.
Torres, Tobias, Azura & Jocson for private respondents.

NOCON, J.:
This is a petition for review on certiorari to annul and set aside the decision 1 of the Court of
Appeals affirming the decision 2 of the Regional Trial Court of Pasay, Branch 114 Civil Cases
Nos. 8198-P, and 2880-P, the dispositive portion of which reads, as follows:
Wherefore, in view of all the foregoing considerations, in this Court hereby
renders judgment, as follows:
In Civil Case No. 2880-P, the petition filed by Manuel R. Dulay Enterprises,
Inc. and Virgilio E. Dulay for annulment or declaration of nullity of the
decision of the Metropolitan Trial Court, Branch 46, Pasay City, in its Civil
Case No. 38-81 entitled "Edgardo D. Pabalan, et al., vs. Spouses Florentino
Manalastas, et al.," is dismissed for lack of merits;
In Civil Case No. 8278-P, the complaint filed by Manuel R. Dulay
Enterprises, Inc. for cancellation of title of Manuel A. Torres, Jr. (TCT No.
24799 of the Register of Deeds of Pasay City) and reconveyance, is
dismissed for lack or merit, and,
In Civil Case No. 8198-P, defendants Manuel R. Dulay Enterprises, Inc. and
Virgilio E. Dulay are ordered to surrender and deliver possession of the
parcel of land, together with all the improvements thereon, described in
Transfer Certificate of Title No. 24799 of the Register of Deeds of Pasay
City, in favor of therein plaintiffs Manuel A. Torres, Jr. as owner and Edgardo
D. Pabalan as real estate administrator of said Manuel A. Torres, Jr.; to
account for and return to said plaintiffs the rentals from dwelling unit No. 8-A

of the apartment building (Dulay Apartment) from June 1980 up to the

present, to indemnify plaintiffs, jointly and severally, expenses of litigation in
the amount of P4,000.00 and attorney's fees in the sum of P6,000.00, for all
the three (3) cases. Co-defendant Nepomuceno Redovan is ordered to pay
the current and subsequent rentals on the premises leased by him to
plaintiffs.
The counterclaim of defendants Virgilio E. Dulay and Manuel R. Dulay
Enterprises, Inc. and N. Redovan, dismissed for lack of merit. With costs
against the three (3) aforenamed defendants. 3
The facts as found by the trial court are as follows:
Petitioner Manuel R. Dulay Enterprises, Inc, a domestic corporation with the following as
members of its Board of Directors: Manuel R. Dulay with 19,960 shares and designated as
president, treasurer and general manager, Atty. Virgilio E. Dulay with 10 shares and designated
as vice-president; Linda E. Dulay with 10 shares; Celia Dulay-Mendoza with 10 shares; and Atty.
Plaridel C. Jose with 10 shares and designated as secretary, owned a property covered by TCT
No. 17880 4 and known as Dulay Apartment consisting of sixteen (16) apartment units on a six
hundred eighty-nine (689) square meters lot, more or less, located at Seventh Street (now
Buendia Extension) and F.B. Harrison Street, Pasay City.
Petitioner corporation through its president, Manuel Dulay, obtained various loans for the
construction of its hotel project, Dulay Continental Hotel (now Frederick Hotel). It even had to
borrow money from petitioner Virgilio Dulay to be able to continue the hotel project. As a result of
said loan, petitioner Virgilio Dulay occupied one of the unit apartments of the subject property
since property since 1973 while at the same time managing the Dulay Apartment at his
shareholdings in the corporation was subsequently increased by his father. 5
On December 23, 1976, Manuel Dulay by virtue of Board Resolution
No 18 6 of petitioner corporation sold the subject property to private respondents spouses Maria
Theresa and Castrense Veloso in the amount of P300,000.00 as evidenced by the Deed of
Absolute Sale. 7 Thereafter, TCT No. 17880 was cancelled and TCT No. 23225 was issued to
private respondent Maria Theresa Veloso. 8 Subsequently, Manuel Dulay and private
respondents spouses Veloso executed a Memorandum to the Deed of Absolute Sale of
December 23, 1976 9 dated December 9, 1977 giving Manuel Dulay within (2) years or until
December 9, 1979 to repurchase the subject property for P200,000.00 which was, however, not
annotated either in TCT No. 17880 or TCT No. 23225.
On December 24, 1976, private respondent Maria Veloso, without the knowledge of Manuel
Dulay, mortgaged the subject property to private respondent Manuel A. Torres for a loan of
P250,000.00 which was duly annotated as Entry No. 68139 in TCT No. 23225. 10
Upon the failure of private respondent Maria Veloso to pay private respondent Torres, the
subject property was sold on April 5, 1978 to private respondent Torres as the highest bidder in
an extrajudicial foreclosure sale as evidenced by the Certificate of Sheriff's Sale 11 issued on
April 20, 1978.
On July 20, 1978, private respondent Maria Veloso executed a Deed of Absolute Assignment of
the Right to Redeem 12 in favor of Manuel Dulay assigning her right to repurchase the subject
property from private respondent Torres as a result of the extra sale held on April 25, 1978.

52

As neither private respondent Maria Veloso nor her assignee Manuel Dulay was able to redeem
the subject property within the one year statutory period for redemption, private respondent
Torres filed an Affidavit of Consolidation of Ownership 13 with the Registry of Deeds of Pasay City
and TCT No. 24799 14 was subsequently issued to private respondent Manuel Torres on April 23,
1979.
On October 1, 1979, private respondent Torres filed a petition for the issuance of a writ of
possession against private respondents spouses Veloso and Manuel Dulay in LRC Case No.
1742-P. However, when petitioner Virgilio Dulay was never authorized by the petitioner
corporation to sell or mortgage the subject property, the trial court ordered private respondent
Torres to implead petitioner corporation as an indispensable party but the latter moved for the
dismissal of his petition which was granted in an Order dated April 8, 1980.
On June 20, 1980, private respondent Torres and Edgardo Pabalan, real estate administrator of
Torres, filed an action against petitioner corporation, Virgilio Dulay and Nepomuceno Redovan, a
tenant of Dulay Apartment Unit No. 8-A for the recovery of possession, sum of money and
damages with preliminary injunction in Civil Case, No. 8198-P with the then Court of First
Instance of Rizal.
On July 21, 1980, petitioner corporation filed an action against private respondents spouses
Veloso and Torres for the cancellation of the Certificate of Sheriff's Sale and TCT No. 24799 in
Civil Case No. 8278-P with the then Court of First Instance of Rizal.
On January 29, 1981, private respondents Pabalan and Torres filed an action against spouses
Florentino and Elvira Manalastas, a tenant of Dulay Apartment Unit No. 7-B, with petitioner
corporation as intervenor for ejectment in Civil Case No. 38-81 with the Metropolitan Trial Court
of Pasay City which rendered a decision on April 25, 1985, dispositive portion of which reads, as
follows:
Wherefore, judgment is hereby rendered in favor of the plaintiff (herein
private respondents) and against the defendants:
1. Ordering the defendants and all persons claiming possession under them
to vacate the premises.
2. Ordering the defendants to pay the rents in the sum of P500.000 a month
from May, 1979 until they shall have vacated the premises with interest at
the legal rate;
3. Ordering the defendants to pay attorney's fees in the sum of P2,000.00
and P1,000.00 as other expenses of litigation and for them to pay the costs
of the suit. 15
Thereafter or on May 17, 1985, petitioner corporation and Virgilio Dulay filed an action against
the presiding judge of the Metropolitan Trial Court of Pasay City, private respondents Pabalan
and Torres for the annulment of said decision with the Regional Trial Court of Pasay in Civil
Case No. 2880-P.
Thereafter, the three (3) cases were jointly tried and the trial court rendered a decision in favor of
private respondents.

Not satisfied with said decision, petitioners appealed to the Court of Appeals which rendered a
decision on October 23, 1989, the dispositive portion of which reads, as follows:
PREMISES CONSIDERED, the decision being appealed should be as it is
hereby AFFIRMED in full.16
On November 8, 1989, petitioners filed a Motion for Reconsideration which was denied on
January 26, 1990.
Hence, this petition.
During the pendency of this petition, private respondent Torres died on April 3, 1991 as shown in
his death certificate 17 and named Torres-Pabalan Realty & Development Corporation as his heir
in his holographic will 18 dated October 31, 1986.
Petitioners contend that the respondent court had acted with grave abuse of discretion when it
applied the doctrine of piercing the veil of corporate entity in the instant case considering that the
sale of the subject property between private respondents spouses Veloso and Manuel Dulay has
no binding effect on petitioner corporation as Board Resolution No. 18 which authorized the sale
of the subject property was resolved without the approval of all the members of the board of
directors and said Board Resolution was prepared by a person not designated by the
corporation to be its secretary.
We do not agree.
Section 101 of the Corporation Code of the Philippines provides:
Sec. 101. When board meeting is unnecessary or improperly held. Unless
the by-laws provide otherwise, any action by the directors of a close
corporation without a meeting shall nevertheless be deemed valid if:
1. Before or after such action is taken, written consent thereto is signed by
all the directors, or
2. All the stockholders have actual or implied knowledge of the action and
make no prompt objection thereto in writing; or
3. The directors are accustomed to take informal action with the express or
implied acquiese of all the stockholders, or
4. All the directors have express or implied knowledge of the action in
question and none of them makes prompt objection thereto in writing.
If a directors' meeting is held without call or notice, an action taken therein
within the corporate powers is deemed ratified by a director who failed to
attend, unless he promptly files his written objection with the secretary of the
corporation after having knowledge thereof.

53

In the instant case, petitioner corporation is classified as a close corporation and consequently a
board resolution authorizing the sale or mortgage of the subject property is not necessary to
bind the corporation for the action of its president. At any rate, corporate action taken at a board
meeting without proper call or notice in a close corporation is deemed ratified by the absent
director unless the latter promptly files his written objection with the secretary of the corporation
after having knowledge of the meeting which, in his case, petitioner Virgilio Dulay failed to do.
It is relevant to note that although a corporation is an entity which has a personality distinct and
separate from its individual stockholders or members, 19 the veil of corporate fiction may be
pierced when it is used to defeat public convenience justify wrong, protect fraud or defend
crime. 20 The privilege of being treated as an entity distinct and separate from its stockholder or
members is therefore confined to its legitimate uses and is subject to certain limitations to
prevent the commission of fraud or other illegal or unfair act. When the corporation is used
merely as an alter ego or business conduit of a person, the law will regard the corporation as the
act of that person. 21 The Supreme Court had repeatedly disregarded the separate personality of
the corporation where the corporate entity was used to annul a valid contract executed by one of
its members.
Petitioners' claim that the sale of the subject property by its president, Manuel Dulay, to private
respondents spouses Veloso is null and void as the alleged Board Resolution No. 18 was
passed without the knowledge and consent of the other members of the board of directors
cannot be sustained. As correctly pointed out by the respondent Court of Appeals:
Appellant Virgilio E. Dulay's protestations of complete innocence to the
effect that he never participated nor was even aware of any meeting or
resolution authorizing the mortgage or sale of the subject premises (see par.
8, affidavit of Virgilio E. Dulay, dated May 31, 1984, p. 14, Exh. "21") is
difficult to believe. On the contrary, he is very much privy to the transactions
involved. To begin with, he is a incorporator and one of the board of
directors designated at the time of the organization of Manuel R. Dulay
Enterprise, Inc. In ordinary parlance, the said entity is loosely referred to as
a "family corporation". The nomenclature, if imprecise, however, fairly
reflects the cohesiveness of a group and the parochial instincts of the
individual members of such an aggrupation of which Manuel R. Dulay
Enterprises, Inc. is typical: four-fifths of its incorporators being close
relatives namely, three (3) children and their father whose name identifies
their corporation (Articles of Incorporation of Manuel R. Dulay Enterprises,
Inc. Exh. "31-A"). 22
Besides, the fact that petitioner Virgilio Dulay on June 24, 1975 executed an affidavit 23 that he
was a signatory witness to the execution of the post-dated Deed of Absolute Sale of the subject
property in favor of private respondent Torres indicates that he was aware of the transaction
executed between his father and private respondents and had, therefore, adequate knowledge
about the sale of the subject property to private respondents.
Consequently, petitioner corporation is liable for the act of Manuel Dulay and the sale of the
subject property to private respondents by Manuel Dulay is valid and binding. As stated by the
trial court:
. . . the sale between Manuel R. Dulay Enterprises, Inc. and the spouses
Maria Theresa V. Veloso and Castrense C. Veloso, was a corporate act of
the former and not a personal transaction of Manuel R. Dulay. This is so
because Manuel R. Dulay was not only president and treasurer but also the

general manager of the corporation. The corporation was a closed family

corporation and the only non-relative in the board of directors was Atty.
Plaridel C. Jose who appeared on paper as the secretary. There is no
denying the fact, however, that Maria Socorro R. Dulay at times acted as
secretary. . . ., the Court can not lose sight of the fact that the Manuel R.
Dulay Enterprises, Inc. is a closed family corporation where the
incorporators and directors belong to one single family. It cannot be
concealed that Manuel R. Dulay as president, treasurer and general
manager almost had absolute control over the business and affairs of the
corporation. 24
Moreover, the appellate courts will not disturb the findings of the trial judge unless he has plainly
overlooked certain facts of substance and value that, if considered, might affect the result of the
case, 25 which is not present in the instant case.
Petitioners' contention that private respondent Torres never acquired ownership over the subject
property since the latter was never in actual possession of the subject property nor was the
property ever delivered to him is also without merit.
Paragraph 1, Article 1498 of the New Civil Code provides:
When the sale is made through a public instrument, the execution thereof
shall be equivalent to the delivery of the thing which is the object of the
contract, if from the deed the contrary do not appear or cannot clearly be
inferred.
Under the aforementioned article, the mere execution of the deed of sale in a public document is
equivalent to the delivery of the property. Likewise, this Court had held that:
It is settled that the buyer in a foreclosure sale becomes the absolute owner
of the property purchased if it is not redeemed during the period of one year
after the registration of the sale. As such, he is entitled to the possession of
the said property and can demand it at any time following the consolidation
of ownership in his name and the issuance to him of a new transfer
certificate of title. The buyer can in fact demand possession of the land even
during the redemption period except that he has to post a bond in
accordance with Section 7 of Act No. 3133 as amended. No such bond is
required after the redemption period if the property is not redeemed.
Possession of the land then becomes an absolute right of the purchaser as
confirmed owner. 26
Therefore, prior physical delivery or possession is not legally required since the execution of the
Deed of Sale in deemed equivalent to delivery.
Finally, we hold that the respondent appellate court did not err in denying petitioner's motion for
reconsideration despite the fact that private respondents failed to submit their comment to said
motion as required by the respondent appellate court from resolving petitioners' motion for
reconsideration without the comment of the private respondent which was required merely to aid
the court in the disposition of the motion. The courts are as much interested as the parties in the
early disposition of cases before them. To require otherwise would unnecessarily clog the courts'
dockets.

54

WHEREFORE, the petition is DENIED and the decision appealed from is hereby AFFIRMED.

the control of the Pope and his representatives in these Islands. May God guard you many
years.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.
Lagonoy, November 14, 1902.
(Signed) VICENTE RAMIREZ.chanroblesvirtualawlibrary chanrobles virtual law library

EN BANC
G.R. No. L-2832

RT. REV. VICAR OF THIS DISTRICT.

November 24, 1906

REV. JORGE BARLIN, in his capacity as apostolic administrator of this vacant bishopric
and legal representative of the general interests of the Roman Catholic Apostolic Church
in the diocese of Nueva Caceres,Plaintiff-Appellee, vs. P. VICENTE RAMIREZ, ex-rector of
the Roman Catholic Apostolic Parochial Church of Lagonoy, AND THE MUNICIPALITY OF
LAGONOY,Defendants-Appellants.
Manly & Gallup for appellants.
Leoncio Imperial and Chicote, Miranda & Sierra for appellee.
WILLARD, J.:
There had been priests of the Roman Catholic Church in the pueblo of Lagonoy, in the Province
of Ambos Camarines, since 1839. On the 13th of January, 1869, the church and convent were
burned. They were rebuilt between 1870 and 1873. There was evidence that this was done by
the order of the provincial governor. The labor necessary for this reconstruction was performed
by the people of the pueblo the direction of the cabeza de barangay. Under the law then in force,
each man in the pueblo was required to work for the government, without compensation, for
forty days every year. The time spent in the reconstruction of these buildings was counted as a
part of the forty days. The material necessary was brought and paid for in part by the parish
priest from the funds of the church and in part was donated by certain individuals of the pueblo.
After the completion of the church it was always administered, until November 14, 1902, by a
priest of a Roman Catholic Communion and all the people of the pueblo professed that faith and
belonged to that church.chanroblesvirtualawlibrary chanrobles virtual law library
The defendant, Ramirez, having been appointed by the plaintiff parish priest, took possession of
the church on the 5th of July, 1901. he administered it as such under the orders of his superiors
until the 14th day of November, 1902. His successor having been then appointed, the latter
made a demand on this defendant for the delivery to him of the church, convent, and cemetery,
and the sacred ornaments, books, jewels, money, and other property of the church. The
defendant, by a written document of that date, refused to make such delivery. That document is
as follows:
At 7 o'clock last night I received through Father Agripino Pisino your respected order of the 12th
instant, wherein I am advised of the appointment of Father Pisino as acting parish priest of this
town, and directed to turn over to him this parish and to report to you at the vicarage. In reply
thereto, I have the honor to inform you that the town of Lagonoy, in conjunction with the parish
priest thereof, has seen fit to sever connection with the Pope at Rome and his representatives in
these Islands, and join the Filipino Church, the head of which is at Manila. This resolution of the
people was reduced to writing and triplicate copies made, of which I beg to inclose a copy
herewith.chanroblesvirtualawlibrary chanrobles virtual law library
For this reason I regret to inform you that I am unable to obey your said order by delivering to
Father Agripino Pisino the parish property of Lagonoy which, as I understand, is now outside of

The document, a copy of which is referred to in this letter, is as follows:

LAGONOY, November, 9, 1902. chanrobles virtual law library
The municipality of this town and some of its most prominent citizens having learned through the
papers from the capital of these Islands of the constitution of the Filipino National Church,
separate from the control of the Pope at Rome by reason of the fact that the latter has refused to
either recognize or grant the rights to the Filipino clergy which have many times been urged, and
it appearing to us that the reasons advanced why such offices should be given to the Filipino
clergy are evidently well-founded, we have deemed it advisable to consult with the parish priest
of this town as to whether it would be advantageous to join the said Filipino Church and to
separate from the control of the Pope as long as he continues to ignore the rights of the said
Filipino clergy, under the conditions that there will be no change in the articles of faith, and that
the sacraments and other dogmas will be recognized and particularly that of the immaculate
conception of the mother of our Lord. But the moment the Pope at Rome recognizes and grants
the rights heretofore denied to the Filipino clergy we will return to his control. In view of this, and
subject to this condition, the reverend parish priest, together with the people of the town,
unanimously join in declaring that from this date they separate themselves from the obedience
and control of the Pope and join the Filipino National Church. This assembly and the reverend
parish priest have accordingly adopted this resolution written in triplicate, and resolved to send a
copy thereof to the civil government of this province for its information, and do sign the same
below. Vicente Ramirez, Francisco Israel, Ambrosio Bocon, Florentino Relloso, Macario P.
Ledesma, Cecilio Obias, Balbino Imperial, Juan Preseada, Fernando Deudor, Mauricio Torres,
Adriano Sabater.
At the meeting at which the resolution spoken of in this document was adopted, there were
present about 100 persons of the pueblo. There is testimony in the case that the population of
the pueblo was at that time 9,000 and that all but 20 of the inhabitants were satisfied with the
action there taken. Although it is of no importance in the case, we are inclined to think that the
testimony to this effect merely means that about 100 of the principal men of the town were in
favor of the resolution and about 20 of such principal men were opposed to it. After the 14th of
November, the defendant, Ramirez, continued in the possession of the church and other
property and administered the same under the directions of his superior, theObispo Maximo of
the Independent Filipino Church. The rites and ceremonies and the manner of worship were the
same after the 14th day of November as they were before, but the relations between the Roman
Catholic Church and the defendant had been entirely
severed.chanroblesvirtualawlibrary chanrobles virtual law library
In January, 1904, the plaintiff brought this action against the defendant, Ramirez, alleging in his
amended complaint that the Roman Catholic Church was the owner of the church building, the
convent, cemetery, the books, money, and other property belonging thereto, and asking that it be
restored to the possession thereof and that the defendant render an account of the property
which he had received and which was retained by him, and for other
relief.chanroblesvirtualawlibrary chanrobles virtual law library

55

The answer of the defendant, Ramirez, in addition to a general denial of the allegation of the
complaint, admitted that he was in the possession and administration of the property described
therein with the authority of the municipality of Lagonoy and of the inhabitants of the same, who
were the lawful owners of the said property. After this answer had been presented, and on the
1st day of November, 1904, the municipality of Lagonoy filed a petition asking that it be allowed
to intervene in the case and join with the defendant, Ramirez, as a defendant therein. This
petition been granted, the municipality of the 1st day of December filed an answer in which it
alleged that the defendant, Ramirez, was in possession of the property described in the
complaint under the authority and with the consent of the municipality of Lagonoy and that such
municipality was the owner thereof.chanroblesvirtualawlibrary chanrobles virtual law library
Plaintiff answered this complaint, or answer in intervention, and the case was tried and final
judgment in entered therein in favor of the plaintiff and against the defendants. The defendants
then brought the case here by a bill of exceptions.chanroblesvirtualawlibrary chanrobles virtual
law library
That the person in the actual possession of the church and other property described in the
complaint is the defendant, Ramirez, is plainly established by the evidence. It does not appear
that the municipality, as a corporate body, ever took any action in reference to this matter until
they presented their petition for intervention in this case. In fact, the witnesses for the defense,
when they speak of the ownership of the buildings, say that they are owned by the people of the
pueblo, and one witness, the president, said that the municipality as a corporation had nothing
whatever to do with the matter. That the resolution adopted on the 14th of November, and which
has been quoted above, was not the action of the municipality, as such, is apparent from an
inspection thereof.chanroblesvirtualawlibrary chanrobles virtual law library
The witnesses for the defenses speak of a delivery of the church by the people of the pueblo to
the defendant, Ramirez, but there is no evidence in the case of any such delivery. Their
testimony in regard to the delivery always refers to the action taken on the 14th of November, a
record of which appears that in the document above quoted. It is apparent that the action taken
consisted simply in separating themselves from the Roman Catholic Church, and nothing is said
therein in reference to the material property then in possession of the defendant,
Ramirez.chanroblesvirtualawlibrary chanrobles virtual law library
There are several grounds upon which this judgment must be
affirmed.chanroblesvirtualawlibrary chanrobles virtual law library
(1) As to the defendant, Ramirez, it appears that he took possession of the property as the
servant or agent of the plaintiff. The only right which he had to the possession at the time he
took it, was the right which was given to him by the plaintiff, and he took possession under the
agreement to return that possession whenever it should be demanded of him. Under such
circumstances he will not be allowed, when the return of such possession is demanded by him
the plaintiff, to say that the plaintiff is not the owner of the property and is not entitled to have it
delivered back to him. The principle of law that a tenant can not deny his landlord's title, which is
found in section 333, paragraph 2, of the Code of Civil Procedure, and also in the Spanish law,
is applicable to a case of this kind. An answer of the defendant, Ramirez, in which he alleged
that he himself was the owner of the property at the time he received it from the plaintiff, or in
which he alleged that the pueblo was the owner of the property at that time, would constitute no
defense. There is no claim made by him that since the delivery of the possession of the property
to him by the plaintiff he has acquired the title thereto by other means, nor does he is own behalf
make any claim whatever either to the property or to the possession
thereof.chanroblesvirtualawlibrary chanrobles virtual law library

(2) The municipality of Lagonoy, in its answer, claims as such, to be the owner of the property.
As we have said before, the evidence shows that it never was in the physical possession of the
property. But waiving this point and assuming that the possession of Ramirez, which he alleges
in his answer is the possession of the municipality, gives the municipality the rights of a
possessor, the question still arises, Who has the better right to the present possession of the
property? The plaintiff, in 1902, had been in the lawful possession thereof for more than thirty
years and during all that time its possession had never been questioned or disturbed. That
possession has been taken away from it and it has the right now to recover the possession from
the persons who have so deprived it of such possession, unless the latter can show that they
have a better right thereto. This was the preposition which was discussed and settled in the case
of Bishop of Cebu vs. Mangaron, 1 No. 1748, decided June 1, 1906. That decision holds that as
against one who has been in possession for the length of the plaintiff has been in possession,
and who had been deprived of his possession, and who can not produce any written evidence of
title, the mere fact that the defendant is in possession does not entitle the defendant to retain
that possession. In order that he may continue in possession, he must show a better right
thereto.chanroblesvirtualawlibrary chanrobles virtual law library
The evidence in this case does not show that the municipality has, as such, any right of
whatever in the property in question. It has produced no evidence of ownership. Its claim of
ownership is rested in its brief in this court upon the following propositions: That the property in
question belonged prior to the treaty of Paris to the Spanish Government; that by the treaty of
Paris the ownership thereof passed to the Government of the United States; that by section 12
of the act of Congress of July 1, 1902, such property was transferred to the Government of the
Philippine Islands, and that by the circular of that Government, dated November 11, 1902, the
ownership and the right to the possession of this property passed to the municipality of Lagonoy.
If, for the purposes of the argument, we should admit that the other propositions are true, there
is no evidence whatever to support the last proposition, namely that the Government of the
Philippine Islands has transferred the ownership of this church to the municipality of Lagonoy.
We have found no circular of the date above referred to. The one of February 10, 1903, which is
probably the one intended, contains nothing that indicates any such transfer. As to the
municipality of Lagonoy, therefore, it is very clear that it has neither title, ownership, nor right of
possession.chanroblesvirtualawlibrary chanrobles virtual law library
(3) We have said that it would have no such title or ownership ever admitting that the Spanish
Government was the owner of the property and it has passed by the treaty of Paris to the
American Government. But this assumption is not true. As a matter of law, the Spanish
Government at the time the treaty of peace was signed, was not the owner of this property, nor
of any other property like it, situated in the Philippine
Islands.chanroblesvirtualawlibrary chanrobles virtual law library
It does not admit of doubt that from the earliest times the parish churches in the Philippine
Islands were built by the Spanish Government. Law 2, title 2, book 1, of the Compilation of the
Laws of the Indies is, in part, as follows:
Having erected all the churches, cathedrals, and parish houses of the Spaniards and natives of
our Indian possessions from their discovery at the cost and expense of our royal treasury, and
applied for their service and maintenance the part of the tithes belonging to us by apostolic
concession according to the division we have made.
Law 3 of the same title to the construction of parochial churches such as the one in question.
That law is as follows:

56

The parish churches which was erected in Spanish towns shall be of durable and decent
construction. Their costs shall be divided and paid in three parts: One by our royal treasury,
another by the residents and Indianencomenderos of the place where such churches are
constructed, and the other part by the Indians who abide there; and if within the limits of a city,
village, or place there should be any Indians incorporated to our royal crown, we command that
for our part there be contributed the same amount as the residents and encomenderos,
respectively, contribute; and the residents who have no Indians shall also contribute for this
purpose in accordance with their stations and wealth, and that which is so given shall be
deducted from the share of the Indians should pay.
Law 11 of the same title is as follows:
We command that the part of the tithes which belongs to the fund for the erection of churches
shall be given to their superintendents to be expended for those things necessary for these
churches with the advice of the prelates and officials, and by their warrants, and not otherwise.
And we request and charge the archbishops and bishops not to interfere in the collection and
disbursement thereof, but to guard these structures.
Law 4, title 3, book 6, is as follows:
In all settlements, even though the Indians are few, there shall be erected a church where mass
can be decently held, and it shall have a donor with a key, notwithstanding the fact that it be the
subject to or separate from a parish.
Not only were all the parish churches in the Philippines erected by the King and under his
direction, but it was made unlawful to erect a church without the license of the King. This
provision is contained in Law 2, title 6, book 1, which is as follows:
Whereas it is our intention to erect, institute, found, and maintain all cathedrals, parish churches,
monasteries, votive hospitals, churches, and religious and pious establishments where they are
necessary for the teaching, propagation, and preaching of the doctrine of our sacred Roman
Catholic faith, and to aid to this effect with out royal treasury whenever possible, and to receive
information of such places where they should be founded and are necessary, and the
ecclesiastical patronage of all our Indies belonging to us: chanrobles virtual law library
We command that there shall not be erected, instituted, founded, or maintained any cathedral,
parish church, monastery, hospital, or votive churches, or other pious or religious establishment
without our express permission as is provided in Law 1, title 2, and Law 1, title 3, of this book,
notwithstanding any permission heretofore given by our viceroy or other ministers, which in this
respect we revoke and make null, void, and of no effect.
By agreement at an early date between the Pope and the Crown of Spain, all tithes in the Indies
were given by the former to the latter and the disposition made the King of the fund thus created
is indicated by Law 1, title 16, book 1, which is as follows:
Whereas the ecclesiastical tithes from the Indies belong to us by the apostolic concessions of
the supreme pontiffs, we command the officials of our royal treasury of those provinces to collect
and cause to be collected all tithes due and to become due from the crops and flocks of the
residents in the manner in which it has been the custom to pay the same, and from these tithes
the churches shall be provided with competent persons of good character to serve them and
with all ornaments and things which may be necessary for divine worship, to the end that these

churches may be well served and equipped, and we shall be informed of God, our Lord; this
order shall be observed where the contrary has not already been directed by us in connection
with the erection of churches.
That the condition of things existing by virtue of the Laws of the Indies was continued to the
present time is indicated by the royal order of the 31st of January, 1856, and by the royal order
of the 13th of August, 1876, both relating to the construction and repair of churches, there being
authority for saying that the latter order was in force in the
Philippines.chanroblesvirtualawlibrary chanrobles virtual law library
This church, and other churches similarly situated in the Philippines, having been erected by the
Spanish Government, and under its direction, the next question to be considered is, To whom
did these churches belong? chanrobles virtual law library
Title 28 of the third partida is devoted to the ownership of things and, after discussing what can
be called public property and what can be called private property, speaks, in Law 12, of those
things which are sacred, religious, or holy. That law is as follows:
Law XII. - HOW SACRED OR RELIGIOUS THINGS CAN NOT BE OWNED BY ANY
PERSON.chanroblesvirtualawlibrary chanrobles virtual law library
No sacred, religious, or holy thing, devoted to the service of God, can be the subject of
ownership by any man, nor can it be considered as included in his property holdings. Although
the priests may have such things in their possession, yet they are not the owners thereof. They,
hold them thus as guardians or servants, or because they have the care of the same and serve
God in or without them. Hence they were allowed to take from the revenues of the church and
lands what was reasonably necessary for their support; the balance, belonging to God, was to
be devoted to pious purposes, such as the feeding and clothing of the poor, the support of
orphans, the marrying of poor virgins to prevent their becoming evil women because of their
poverty, and for the redemption of captives and the repairing of the churches, and the buying of
chalices, clothing, books, and others things which they might be in need of, and other similar
charitable purposes.
And then taking up for consideration the first of the classes in to which this law has divided these
things, it defines in Law 13, title 28, third partida, consecrated things. That law is as follows:
Sacred things, we say, are those which are consecrated by the bishops, such as churches, the
altars therein, crosses, chalices, censers, vestments, books, and all other things which are in
tended for the service of the church, and the title to these things can not be alienated except in
certain specific cases as we have already shown in the first partidaof this book by the laws
dealing with this subject. We say further that even where a consecrated church is razed, the
ground upon which it formerly stood shall always be consecrated ground. But if any consecrated
church should fall into the hands of the enemies of our faith it shall there and then cease to be
sacred as long as the enemy has it under control, although once recovered by the Christians, it
will again become sacred, reverting to its condition before the enemy seized it and shall have all
the right and privileges formerly belonging to it.
That the principles of the partida in reference to churches still exist is indicated by Sanchez
Roman, whose work on the Civil Law contains the following statement:

57

First Group. Spiritual and corporeal or ecclesiastical. A.Spiritual. - From early times distinction
has been made by authors and by law between things governed by divine law, called divine, and
those governed by human law, called human, and although the former can not be the subject of
civil juridical relations, their nature and species should be ascertained either to identify them and
exclude them from such relations or because they furnish a complete explanation of the
foregoing tabulated statement, or finally because the laws of the partida deal with them.
Divine things are those which are either directly or indirectly established by God for his service
and sanctification of men and which are governed by divine or canonical laws. This makes it
necessary to divide them into spiritual things, which are those which have a direct influence on
the religious redemption of man such as the sacrament, prayers, fasts, indulgences, etc., and
corporeal or ecclesiastical, which are those means more or less direct for the proper religious
salvation of man.
7. First Group. Divine things. B. Corporeal or ecclesiastical things (sacred, religious, holy, and
temporal belonging to the church). - Corporeal or ecclesiastical things are so
divided.chanroblesvirtualawlibrary chanrobles virtual law library
( a) Sacred things are those devoted to God, religion, and worship in general, such as temples,
altars, ornaments, etc. These things can not be alienated except for some pious purpose and in
such cases as are provided for in the laws, according to which their control pertains to the
ecclesiastical authorities, and in so far as their use is concerned, to the believers and the clergy.
(2 Derecho Civil Espaol, Sanchez Roman, p. 480; 8 Manresa, Commentaries on the Spanish
Civil Code, p. 636; 3 Alcubilla, Diccionario de la Administracion Espaola, p. 486.)
The partidas defined minutely what things belonged to the public in general and what belonged
to private persons. In the first group churches are not named. The present Civil Code declares in
article 338 that property is of public or private ownership. Article 339, which defines public
property, is as follows:
Property of public ownership is - chanrobles virtual law library
1. That destined to the public use, such as roads, canals, rivers, torrents, ports, and bridges
constructed by the State, and banks, shores, roadsteads, and that of similar
character.chanroblesvirtualawlibrary chanrobles virtual law library
2. That belonging exclusively to the state without being for public use and which is destined to
some public service, or to the development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and mines, until their concession has been granted.
The code also defines the property of provinces and of pueblos, and in defining what property is
of public use, article 344 declares as follows:
Property for public use in provinces and in towns comprises the provincial and town roads, the
squares, streets, fountains, and public waters, the promenades, and public works of general
service supported by the said towns or provinces.chanroblesvirtualawlibrary chanrobles virtual
law library
All other property possessed by either is patrimonial, and shall be governed by the provisions of
this code, unless otherwise prescribe in special laws.

It will be noticed that in either one of these articles is any mention made of churches. When the
Civil Code undertook to define those things in a pueblo which were for the common use of the
inhabitants of the pueblo, or which belonged to the State, while it mentioned a great many other
things, it did not mention churches.chanroblesvirtualawlibrary chanrobles virtual law library
It has been said that article 25 of the Regulations for the Execution of the Mortgage Law
indicates that churches belong to the State and are public property. That article is as follows:
There shall be excepted from the record required by article 2 of the law: chanrobles virtual law
library
First. Property which belongs exclusively to the eminent domain of the State, and which is for
the use of all, such as the shores of the sea, islands, rivers and their borders, wagon roads, and
the roads of all kinds, with the exception of railroads; streets, parks, public promenades, and
commons of towns, provided they are not lands of common profit to the inhabitants; walls of
cities and parks, ports, and roadsteads, and any other analogous property during the time they
are in common and general use, always reserving the servitudes established by law on the
shores of the sea and borders of navigable rivers.chanroblesvirtualawlibrary chanrobles virtual
law library
Second. Public temples dedicated to the Catholic faith.
A reading of this article shows that far from proving that churches belong to the State and to the
eminent domain thereof, it proves the contrary, for, if they had belonged to the State, they would
have been included in the first paragraph instead of being placed in a paragraph by
themselves.chanroblesvirtualawlibrary chanrobles virtual law library
The truth is that, from the earliest times down to the cession of the Philippines to the United
States, churches and other consecrated objects were considered outside of the commerce of
man. They were not public property, nor could they be subjects of private property in the sense
that any private person could the owner thereof. They constituted a kind of property distinctive
characteristic of which was that it was devoted to the worship of
God.chanroblesvirtualawlibrary chanrobles virtual law library
But, being material things was necessary that some one should have the care and custody of
them and the administration thereof, and the question occurs, To whom, under the Spanish law,
was intrusted that possession and administration? For the purposes of the Spanish law there
was only one religion. That was the religion professed by the Roman Catholic Church. It was for
the purposes of that religion and for the observance of its rites that this church and all other
churches in the Philippines were erected. The possession of the churches, their care and
custody, and the maintenance of religious worship therein were necessarily, therefore, intrusted
to that body. It was, by virtue of the laws of Spain, the only body which could under any
circumstances have possession of, or any control over, any church dedicated to the worship of
God. By virtue of those laws this possession and right of control were necessarily exclusive. It is
not necessary or important to give any name to this right of possession and control exercised by
the Roman Catholic Church in the church buildings of the Philippines prior to 1898. It is not
necessary to show that the church as a juridical person was the owner of the buildings. It is
sufficient to say that this right to the exclusive possession and control of the same, for the
purposes of its creation, existed.chanroblesvirtualawlibrary chanrobles virtual law library

58

The right of patronage, existing in the King of Spain with reference to the churches in the
Philippines, did not give him any right to interfere with the material possession of these
buildings.chanroblesvirtualawlibrary chanrobles virtual law library
Title 6 of book 1 of the Compilation of the laws of the Indies treatsDel Patronazgo Real de las
Indias. There is nothing in any one of the fifty-one laws which compose this title which in any
way indicates that the King of Spain was the owner of the churches in the Indies because he
had constructed them. These laws relate to the right of presentation to ecclesiastical charges
and offices. For example, Law 49 of the title commences as follows:
Because the patronage and right of presentation of all archbishops, bishops, dignitaries,
prevents, curates, and doctrines and all other beneficiaries and ecclesiastical offices whatsoever
belong to us, no other person can obtain or possess the same without our presentation as
provided in Law 1 and other laws of this title.
Title 15 of the first partida treats of the right of patronage vesting in private persons, but there is
nothing in any one of its fifteen laws which in any way indicates that the private patron is the
owner of the church.chanroblesvirtualawlibrary chanrobles virtual law library
When it is said that this church never belonged to the Crown of Spain, it is not intended to say
that the Government and had no power over it. It may be that by virtue of that power of eminent
domain which is necessarily resides in every government, it might have appropriated this church
and other churches, and private property of individuals. But nothing of this kind was ever
attempted in the Philippines.chanroblesvirtualawlibrary chanrobles virtual law library
It, therefore, follows that in 1898, and prior to the treaty of Paris, the Roman Catholic Church
had by law the exclusive right to the possession of this church and it had the legal right to
administer the same for the purposes for which the building was consecrated. It was then in the
full and peaceful possession of the church with the rights aforesaid. That these rights were fully
protected by the treaty of Paris is very clear. That treaty, in article 8, provides, among other
things, as follows:
And it is hereby declared that the relinquishment or cession, as the case may be, to which the
preceding paragraph refers, can not in any respect impair the property or rights which by law
belong to the peaceful possession of property of all kinds, or provinces, municipalities, public or
private establishments, ecclesiastical or civic bodies, or any other associations having legal
capacity to acquire and possess property in the aforesaid territories renounced or ceded, or of
private individuals, or whatsoever nationality such individuals may be.
It is not necessary, however, to invoke the provisions of that treaty. Neither the Government of
the United States, nor the Government of these Islands, has ever attempted in any way to
interfere with the rights which the Roman Catholic Church had in this building when Spanish
sovereignty ceased in the Philippines. Any interference that has resulted has been caused by
private individuals, acting without any authority from the
Government.chanroblesvirtualawlibrary chanrobles virtual law library
No point is made in the brief of the appellant that any distinction should be made between the
church and the convent. The convent undoubtedly was annexed to the church and, as to it, the
provisions of Law 19, title 2, book 1, of the Compilation of the Laws of the Indies would apply.
That law is as follows:

We command that the Indians of each town or barrio shall construct such houses as may be
deemed sufficient in which the priests of such towns or barrios may live comfortably adjoining
the parish church of the place where that may be built for the benefit of the priests in charge of
such churches and engaged in the education and conversion of their Indian parishioners, and
they shall not be alienated or devoted to any other purpose.
The evidence in this case makes no showing in regard to the cemetery. It is always mentioned in
connection with the church and convent and no point is made by the possession of the church
and convent, he is not also entitled to recover possession of the cemetery. So, without
discussing the question as to whether the rules applicable to churches are all respects
applicable to cemeteries, we hold for the purpose of this case that the plaintiff has the same right
to the cemetery that he has to the church.chanroblesvirtualawlibrary chanrobles virtual law
library
(4) It is suggested by the appellant that the Roman Catholic Church has no legal personality in
the Philippine Islands. This suggestion, made with reference to an institution which antedates by
almost a thousand years any other personality in Europe, and which existed "when Grecian
eloquence still flourished in Antioch, and when idols were still worshiped in the temple of
Mecca," does not require serious consideration. In the preamble to the budget relating to
ecclesiastical obligations, presented by Montero Rios to the Cortes on the 1st of October 1871,
speaking of the Roman Catholic Church, he says:
Persecuted as an unlawful association since the early days of its existence up to the time of
Galieno, who was the first of the Roman emperors to admit it among the juridicial entities
protected by the laws of the Empire, it existed until then by the mercy and will of the faithful and
depended for such existence upon pious gifts and offerings. Since the latter half of the third
century, and more particularly since the year 313, when Constantine, by the edict of Milan,
inaugurated an era of protection for the church, the latter gradually entered upon the exercise of
such rights as were required for the acquisition, preservation, and transmission of property the
same as any other juridical entity under the laws of the Empire. (3 Dictionary of Spanish
Administration, Alcubilla, p. 211. See also the royal order of the 4th of December, 1890, 3
Alcubilla, 189.)
The judgment of the court below is affirmed, with the costs of this instance against the appellant.
After the expiration of twenty days from the date hereof let judgment be entered in accordance
herewith, and ten days thereafter the record be remanded to the court below for execution. So
ordered.chanroblesvirtualawlibrary chanrobles virtual law library
SECOND DIVISION
IGLESIA EVANGELICA METODISTA G.R. No. 184088
EN LAS ISLAS FILIPINAS (IEMELIF)
(Corporation Sole), INC., REV. NESTOR
PINEDA, REV. ROBERTO BACANI,
BENJAMIN BORLONGAN, JR.,
DANILO SAUR, RICHARD PONTI,
ALFREDO MATABANG and all the
other members of the IEMELIF
TONDO CONGREGATION of the
IEMELIF CORPORATION SOLE,
Petitioners,
Present:

59

- versus -

CARPIO, J., Chairperson,

NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

BISHOP NATHANAEL LAZARO,

REVERENDS HONORIO RIVERA,
DANIEL MADUCDOC, FERDINAND
MERCADO, ARCADIO CABILDO,
DOMINGO GONZALES, ARTURO
LAPUZ, ADORABLE MANGALINDAN,
DANIEL VICTORIA and DAKILA
CRUZ, and LAY LEADER LINGKOD
MADUCDOC and CESAR DOMINGO,
acting individually and as members of
the Supreme Consistory of Elders
and those claiming under the
Promulgated:
Corporation Aggregate,
Respondents.
July 6, 2010
x --------------------------------------------------------------------------------------- x

60

DECISION
ABAD, J.:

IEMELIFs organizational structure from a corporation sole to a corporation aggregate. On May

7, 1973 the Securities and Exchange Commission (SEC) approved the vote. For some reasons,
however, the corporate papers of the IEMELIF remained unaltered as a corporation sole.

The present dispute resolves the issue of whether or not a corporation may change its
character as a corporation sole into a corporation aggregate by mere amendment of its articles
Only in 2001, about 28 years later, did the issue reemerge. In answer to a query from
of incorporation without first going through the process of dissolution.
the IEMELIF, the SEC replied on April 3, 2001 that, although the SEC Commissioner did not in
1948 object to the conversion of the IEMELIF into a corporation aggregate, that conversion was
The Facts and the Case
not properly carried out and documented. The SEC said that the IEMELIF needed to amend its
articles of incorporation for that purpose.[1]
In 1909, Bishop Nicolas Zamora established the petitioner Iglesia Evangelica
Metodista En Las Islas Filipinas, Inc. (IEMELIF) as a corporation sole with Bishop Zamora acting
Acting on this advice, the Consistory resolved to convert the IEMELIF to a corporation
as its General Superintendent. Thirty-nine years later in 1948, the IEMELIF enacted and
aggregate. Respondent Bishop Nathanael Lazaro, its General Superintendent, instructed all
registered a by-laws that established a Supreme Consistory of Elders (the Consistory), made up
their

congregations

to

take

up

the

matter

with

their

respective

members

for

of church ministers, who were to serve for four years. The by-laws empowered the Consistory
resolution. Subsequently, the general membership approved the conversion, prompting the
to elect a General Superintendent, a General Secretary, a General Evangelist, and a Treasurer
IEMELIF to file amended articles of incorporation with the SEC. Bishop Lazaro filed an affidavitGeneral who would manage the affairs of the organization. For all intents and purposes, the
certification in support of the conversion.[2]
Consistory served as the IEMELIFs board of directors.

Petitioners Reverend Nestor Pineda, et al., which belonged to a faction that did not
Apparently, although the IEMELIF remained a corporation sole on paper (with all
support the conversion, filed a civil case for Enforcement of Property Rights of Corporation
corporate powers theoretically lodged in the hands of one member, the General
Sole, Declaration of Nullity of Amended Articles of Incorporation from Corporation Sole to
Superintendent), it had always acted like a corporation aggregate. The Consistory exercised
Corporation Aggregate with Application for Preliminary Injunction and/or Temporary Restraining
IEMELIFs decision-making powers without ever being challenged. Subsequently, during its
Order in IEMELIFs name against respondent members of its Consistory before the Regional
1973 General Conference, the general membership voted to put things right by changing
Trial Court (RTC) of Manila.[3] Petitioners claim that a complete shift from IEMELIFs status as a

61

corporation sole to a corporation aggregate required, not just an amendment of the IEMELIFs

The only issue presented in this case is whether or not the CA erred in affirming the

articles of incorporation, but a complete dissolution of the existing corporation sole followed by a

RTC ruling that a corporation sole may be converted into a corporation aggregate by mere

re-incorporation.

amendment of its articles of incorporation.

Unimpressed, the RTC dismissed the action in its October 19, 2005 decision. [4] It held
that, while the Corporation Code on Religious Corporations (Chapter II, Title XIII) has no
provision governing the amendment of the articles of incorporation of a corporation sole, its

The Courts Ruling

Section 109 provides that religious corporations shall be governed additionally by the provisions
on non-stock corporations insofar as they may be applicable. The RTC thus held that Section

Petitioners Pineda, et al. insist that, since the Corporation Code does not have any

16 of the Code[5] that governed amendments of the articles of incorporation of non-stock

provision that allows a corporation sole to convert into a corporation aggregate by mere

corporations applied to corporations sole as well. What IEMELIF needed to authorize the

amendment of its articles of incorporation, the conversion can take place only by first dissolving

amendment was merely the vote or written assent of at least two-thirds of the IEMELIF

IEMELIF, the corporation sole, and afterwards by creating a new corporation in its place.

membership.
Religious corporations are governed by Sections 109 through 116 of the Corporation
Petitioners Pineda, et al. appealed the RTC decision to the Court of Appeals (CA).

Code. In a 2009 case involving IEMELIF, the Court distinguished a corporation sole from a

On October 31, 2007 the CA rendered a decision,[7] affirming that of the RTC. Petitioners

corporation aggregate.[9] Citing Section 110 of the Corporation Code, the Court said that a

moved for reconsideration, but the CA denied it by its resolution of August 1, 2008, [8] hence, the

corporation sole is one formed by the chief archbishop, bishop, priest, minister, rabbi or other

present petition for review before this Court.

presiding elder of a religious denomination, sect, or church, for the purpose of administering or

[6]

managing, as trustee, the affairs, properties and temporalities of such religious denomination,
The Issue Presented

sect or church. A corporation aggregate formed for the same purpose, on the other
hand, consists of two or more persons.

62

True, the Corporation Code provides no specific mechanism for amending the articles

increase in the number of its corporate membership does not change the complexion of its

of incorporation of a corporation sole. But, as the RTC correctly held, Section 109 of the

corporate responsibility to third parties. The one member, with the concurrence of two-thirds of

Corporation Code allows the application to religious corporations of the general provisions

the membership of the organization for whom he acts as trustee, can self-will the

governing non-stock corporations.

amendment. He can, with membership concurrence, increase the technical number of the
members of the corporation from sole or one to the greater number authorized by its amended

For non-stock corporations, the power to amend its articles of incorporation lies in its

articles.

members. The code requires two-thirds of their votes for the approval of such an
amendment. So how will this requirement apply to a corporation sole that has technically but

Here, the evidence shows that the IEMELIFs General Superintendent, respondent

one member (the head of the religious organization) who holds in his hands its broad corporate

Bishop Lazaro, who embodied the corporation sole, had obtained, not only the approval of the

powers over the properties, rights, and interests of his religious organization?

Consistory that drew up corporate policies, but also that of the required two-thirds vote of its
membership.

Although a non-stock corporation has a personality that is distinct from those of its
members who established it, its articles of incorporation cannot be amended solely through the

The amendment of the articles of incorporation, as correctly put by the CA, requires

action of its board of trustees. The amendment needs the concurrence of at least two-thirds of

merely that a) the amendment is not contrary to any provision or requirement under the

its membership. If such approval mechanism is made to operate in a corporation sole, its one

Corporation Code, and that b) it is for a legitimate purpose. Section 17 of the Corporation

member in whom all the powers of the corporation technically belongs, needs to get the

Code[10] provides that amendment shall be disapproved if, among others, the prescribed form of

concurrence of two-thirds of its membership. The one member, here the General

the articles of incorporation or amendment to it is not observed, or if the purpose or purposes of

Superintendent, is but a trustee, according to Section 110 of the Corporation Code, of its

the corporation are patently unconstitutional, illegal, immoral, or contrary to government rules

membership.

and regulations, or if the required percentage of ownership is not complied with. These
impediments do not appear in the case of IEMELIF.

There is no point to dissolving the corporation sole of one member to enable the
corporation aggregate to emerge from it. Whether it is a non-stock corporation or a corporation

Besides, as the CA noted, the IEMELIF worked out the amendment of its articles of

sole, the corporate being remains distinct from its members, whatever be their number. The

incorporation upon the initiative and advice of the SEC. The latters interpretation and

63

application of the Corporation Code is entitled to respect and recognition, barring any
divergence from applicable laws. Considering its experience and specialized capabilities in the

On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao,
executed a deed of sale of a parcel of land located in the same city covered by Transfer
Certificate No. 2263, in favor of the Roman Catholic Apostolic Administrator of Davao Inc., s
corporation sole organized and existing in accordance with Philippine Laws, with Msgr. Clovis
Thibault, a Canadian citizen, as actual incumbent. When the deed of sale was presented to
Register of Deeds of Davao for registration, the latter.

area of corporation law, the SECs prior action on the IEMELIF issue should be accorded great
having in mind a previous resolution of the Fourth Branch of the Court of First
Instance of Manila wherein the Carmelite Nuns of Davao were made to prepare an
affidavit to the effect that 60 per cent of the members of their corporation were Filipino
citizens when they sought to register in favor of their congregation of deed of donation
of a parcel of land

weight.

WHEREFORE, the Court DENIES the petition and AFFIRMS the October 31, 2007

required said corporation sole to submit a similar affidavit declaring that 60 per cent of the
members thereof were Filipino citizens.

decision and August 1, 2008 resolution of the Court of Appeals in CA-G.R. SP 92640.
The vendee in the letter dated June 28, 1954, expressed willingness to submit an affidavit, both
not in the same tenor as that made the Progress of the Carmelite Nuns because the two cases
were not similar, for whereas the congregation of the Carmelite Nuns had five incorporators, the
corporation sole has only one; that according to their articles of incorporation, the organization of
the Carmelite Nuns became the owner of properties donated to it, whereas the case at bar, the
totality of the Catholic population of Davao would become the owner of the property bought to be
registered.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-8451

December 20, 1957

THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO, INC., petitioner,

vs.
THE LAND REGISTRATION COMMISSION and THE REGISTER OF DEEDS OF DAVAO
CITY, respondents.
Teodoro Padilla, for petitioner.
Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and
Troadio T. Quianzon, Jr., for respondents.

FELIX, J.:
This is a petition for mandamus filed by the Roman Catholic Apostolic Administrator of Davao
seeking the reversal of a resolution by the Land Registration Commissioner in L.R.C. Consulta
No. 14. The facts of the case are as follows:

As the Register of Deeds entertained some doubts as to the registerability if the document, the
matter was referred to the Land Registration Commissioner en consulta for resolution in
accordance with section 4 of Republic Act No. 1151. Proper hearing on the matter was
conducted by the Commissioner and after the petitioner corporation had filed its memorandum,
a resolution was rendered on September 21, 1954, holding that in view of the provisions of
Section 1 and 5 of Article XIII of the Philippine Constitution, the vendee was not qualified to
acquire private lands in the Philippines in the absence of proof that at least 60 per centum of the
capital, property, or assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was
actually owned or controlled by Filipino citizens, there being no question that the present
incumbent of the corporation sole was a Canadian citizen. It was also the opinion of the Land
Registration Commissioner that section 159 of the corporation Law relied upon by the vendee
was rendered operative by the aforementioned provisions of the Constitution with respect to real
estate, unless the precise condition set therein that at least 60 per cent of its capital is owned
by Filipino citizens be present, and, therefore, ordered the Registered Deeds of Davao to
deny registration of the deed of sale in the absence of proof of compliance with such condition.
After the motion to reconsider said resolution was denied, an action for mandamus was
instituted with this Court by said corporation sole, alleging that under the Corporation Law as
well as the settled jurisprudence on the matter, the deed of sale executed by Mateo L. Rodis in
favor of petitioner is actually a deed of sale in favor of the Catholic Church which is qualified to
acquire private agricultural lands for the establishment and maintenance of places of worship,
and prayed that judgment be rendered reserving and setting aside the resolution of the Land
Registration Commissioner in question. In its resolution of November 15, 1954, this Court gave
due course to this petition providing that the procedure prescribed for appeals from the Public
Service Commission of the Securities and Exchange Commissions (Rule 43), be followed.
Section 5 of Article XIII of the Philippine Constitution reads as follows:

64

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.
Section 1 of the same Article also provides the following:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, 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 cititzens 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 CONSTITUTION. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no license, concession, or
leases for the exploitation, development, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for another 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 other than the development and limit of the grant.
In virtue of the foregoing mandates of the Constitution, who are considered "qualified" to acquire
and hold agricultural lands in the Philippines? What is the effect of these constitutional
prohibition of the right of a religious corporation recognized by our Corporation Law and
registered as a corporation sole, to possess, acquire and register real estates in its name when
the Head, Manager, Administrator or actual incumbent is an alien?
Petitioner consistently maintained that a corporation sole, irrespective of the citizenship of its
incumbent, is not prohibited or disqualified to acquire and hold real properties. The Corporation
Law and the Canon Law are explicit in their provisions that a corporation sole or "ordinary" is not
the owner of the of the properties that he may acquire but merely the administrator thereof. The
Canon Law also specified that church temporalities are owned by the Catholic Church as a
"moral person" or by the diocess as minor "moral persons" with the ordinary or bishop as
administrator.
And elaborating on the composition of the Catholic Church in the Philippines, petitioner
explained that as a religious society or organization, it is made up of 2 elements or divisions
the clergy or religious members and the faithful or lay members. The 1948 figures of the Bureau
of Census showed that there were 277,551 Catholics in Davao and aliens residing therein
numbered 3,465. Ever granting that all these foreigners are Catholics, petitioner contends that
Filipino citizens form more than 80 per cent of the entire Catholics population of that area. As to
its clergy and religious composition, counsel for petitioner presented the Catholic Directory of the
Philippines for 1954 (Annex A) which revealed that as of that year, Filipino clergy and women
novices comprise already 60.5 per cent of the group. It was, therefore, allowed that the
constitutional requirement was fully met and satisfied.
Respondents, on the other hand, averred that although it might be true that petitioner is not the
owner of the land purchased, yet he has control over the same, with full power to administer,
take possession of, alienate, transfer, encumber, sell or dispose of any or all lands and their
improvements registered in the name of the corporation sole and can collect, receive, demand
or sue for all money or values of any kind that may be kind that may become due or owing to
said corporation, and vested with authority to enter into agreements with any persons, concerns
or entities in connection with said real properties, or in other words, actually exercising all rights
of ownership over the properties. It was their stand that the theory that properties registered in
the name of the corporation sole are held in true for the benefit of the Catholic population of a

place, as of Davao in the case at bar should be sustained because a conglomeration of persons
cannot just be pointed out as the cestui que trust or recipient of the benefits from the property
allegedly administered in their behalf. Neither can it be said that the mass of people referred to
as such beneficiary exercise ant right of ownership over the same. This set-up, respondents
argued, falls short of a trust. The respondents instead tried to prove that in reality, the beneficiary
of ecclesiastical properties are not members or faithful of the church but someone else, by
quoting a portion a portion of the ought of fidelity subscribed by a bishop upon his elevation to
the episcopacy wherein he promises to render to the Pontificial Father or his successors an
account of his pastoral office and of all things appertaining to the state of this church.
Respondents likewise advanced the opinion that in construing the constitutional provision calling
for 60 per cent of Filipino citizenship, the criterion of the properties or assets thereof.
In solving the problem thus submitted to our consideration, We can say the following: A
corporation sole is a special form of corporation usually associated with the clergy. Conceived
and introduced into the common law by sheer necessity, this legal creation which was referred to
as "that unhappy freak of English law" was designed to facilitate the exercise of the functions of
ownership carried on by the clerics for and on behalf of the church which was regarded as the
property owner (See I Couvier's Law Dictionary, p. 682-683).
A corporation sole consists of one person only, and his successors (who will always be one at a
time), in some particular station, who are incorporated by law in order to give them some legal
capacities and advantages, particularly that of perpetuity, which in their natural persons they
could not have had. In this sense, the king is a sole corporation; so is a bishop, or dens, distinct
from their several chapters (Reid vs. Barry, 93 Fla. 849, 112 So. 846).
The provisions of our Corporation law on religious corporations are illuminating and sustain the
stand of petitioner. Section 154 thereof provides:
SEC. 154. For the administration of the temporalities of any religious denomination,
society or church and the management of the estates and the properties thereof, it
shall be lawful for the bishop, chief priest, or presiding either of any such religious
denomination, society or church to become a corporation sole, unless inconsistent wit
the rules, regulations or discipline of his religious denomination, society or church or
forbidden by competent authority thereof.
See also the pertinent provisions of the succeeding sections of the same Corporation Law
copied hereunder:
SEC. 155. In order to become a corporation sole the bishop, chief priest, or presiding
elder of any religious denomination, society or church must file with the Securities and
Exchange Commissioner articles of incorporation setting forth the following facts:
xxx xxx xxx.
(3) That as such bishop, chief priest, or presiding elder he is charged with the
administration of the temporalities and the management of the estates and properties
of his religious denomination, society, or church within its territorial jurisdiction,
describing it;
xxx xxx xxx.

65

(As amended by Commonwealth Act No. 287).

SEC. 157. From and after the filing with the Securities and Exchange Commissioner of
the said articles of incorporation, which verified by affidavit or affirmation as aforesaid
and accompanied by the copy of the commission, certificate of election, or letters of
appointment of the bishop, chief priest, or presiding elder, duly certified as prescribed
in the section immediately preceding such the bishop, chief priest, or presiding elder,
as the case may be, shall become a corporation sole and all temporalities, estates,
and properties the religious denomination, society, or church therefore administered or
managed by him as such bishop, chief priest, or presiding elder, shall be held in trust
by him as a corporation sole, for the use, purpose, behalf, and sole benefit of his
religious denomination, society, or church, including hospitals, schools, colleges,
orphan, asylums, parsonages, and cemeteries thereof. For the filing of such articles of
incorporation, the Securities and Exchange Commissioner shall collect twenty-five
pesos. (As amended by Commonwealth Act. No. 287); and.
SEC. 163. The right to administer all temporalities and all property held or owned by a
religious order or society, or by the diocese, synod, or district organization of any
religious denomination or church shall, on its incorporation, pass to the corporation
and shall be held in trust for the use, purpose behalf, and benefit of the religious
society, or order so incorporated or of the church of which the diocese, or district
organization is an organized and constituent part.
The Cannon Law contains similar provisions regarding the duties of the corporation sole or
ordinary as administrator of the church properties, as follows:
Al Ordinario local pertenence vigilar diligentemente sobre la administracion de todos
los bienes eclesiasticos que se hallan en su territorio y no estuvieren sustraidos de su
jurisdiccion, salvs las prescriciones legitimas que le concedan mas aamplios
derechos.
Teniendo en cuenta los derechos y las legitimas costumbres y circunstancias,
procuraran los Ordinarios regular todo lo concerniente a la administracion de los
bienes eclesciasticos, dando las oportunas instucciones particularles dentro del narco
del derecho comun. (Title XXVIII, Codigo de Derecho Canonico, Lib. III, Canon
1519).1
That leaves no room for doubt that the bishops or archbishops, as the case may be, as
corporation's sole are merely administrators of the church properties that come to their
possession, in which they hold in trust for the church. It can also be said that while it is true that
church properties could be administered by a natural persons, problems regarding succession to
said properties can not be avoided to rise upon his death. Through this legal fiction, however,
church properties acquired by the incumbent of a corporation sole pass, by operation of law,
upon his death not his personal heirs but to his successor in office. It could be seen, therefore,
that a corporation sole is created not only to administer the temporalities of the church or
religious society where he belongs but also to hold and transmit the same to his successor in
said office. If the ownership or title to the properties do not pass to the administrators, who are
the owners of church properties?.
Bouscaren and Elis, S.J., authorities on cannon law, on their treatise comment:

In matters regarding property belonging to the Universal Church and to the Apostolic
See, the Supreme Pontiff exercises his office of supreme administrator through the
Roman Curia; in matters regarding other church property, through the administrators
of the individual moral persons in the Church according to that norms, laid down in the
Code of Cannon Law. This does not mean, however, that the Roman Pontiff is the
owner of all the church property; but merely that he is the supreme
guardian (Bouscaren and Ellis, Cannon Law, A Text and Commentary, p. 764).
and this Court, citing Campes y Pulido, Legislacion y Jurisprudencia Canonica, ruled in the case
of Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil. 881, that:
The second question to be decided is in whom the ownership of the properties
constituting the endowment of the ecclesiastical or collative chaplaincies is vested.
Canonists entertain different opinions as to the persons in whom the ownership of the
ecclesiastical properties is vested, with respect to which we shall, for our purpose,
confine ourselves to stating with Donoso that, while many doctors cited by Fagnano
believe that it resides in the Roman Pontiff as Head of the Universal Church, it is more
probable that ownership, strictly speaking, does not reside in the latter, and,
consequently, ecclesiastical properties are owned by the churches, institutions and
canonically established private corporations to which said properties have been
donated.
Considering that nowhere can We find any provision conferring ownership of church properties
on the Pope although he appears to be the supreme administrator or guardian of his flock, nor
on the corporation sole or heads of dioceses as they are admittedly mere administrators of said
properties, ownership of these temporalities logically fall and develop upon the church, diocese
or congregation acquiring the same. Although this question of ownership of ecclesiastical
properties has off and on been mentioned in several decisions of the Court yet in no instance
was the subject of citizenship of this religious society been passed upon.
We are not unaware of the opinion expressed by the late Justice Perfecto in his dissent in the
case of Agustines vs. Court of First Instance of Bulacan, 80 Phil. 565, to the effect that "the
Roman Catholic Archbishop of Manila is only a branch of a universal church by the Pope, with
permanent residence in Rome, Italy". There is no question that the Roman Catholic Church
existing in the Philippines is a tributary and part of the international religious organization, for the
word "Roman" clearly expresses its unity with and recognizes the authority of the Pope in Rome.
However, lest We become hasty in drawing conclusions, We have to analyze and take note of
the nature of the government established in the Vatican City, of which it was said:
GOVERNMENT. In the Roman Catholic Church supreme authority and jurisdiction
over clergy and laity alike as held by the pope who (since the Middle Ages) is elected
by the cardinals assembled in conclave, and holds office until his death or legitimate
abdication. . . While the pope is obviously independent of the laws made, and the
officials appointed, by himself or his predecessors, he usually exercises his
administrative authority according to the code of canon law and through the
congregations, tribunals and offices of the Curia Romana. In their respective territories
(called generally dioceses) and over their respective subjects, the patriarchs,
metropolitans or archbishops and bishops exercise a jurisdiction which is called
ordinary (as attached by law to an office given to a person. . . (Collier's Encyclopedia,
Vol. 17, p. 93).

66

While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is
the supreme head; that in the religious matters, in the exercise of their belief, the Catholic
congregation of the faithful throughout the world seeks the guidance and direction of their
Spiritual Father in the Vatican, yet it cannot be said that there is a merger of personalities
resultant therein. Neither can it be said that the political and civil rights of the faithful, inherent or
acquired under the laws of their country, are affected by that relationship with the Pope. The fact
that the Roman Catholic Church in almost every country springs from that society that saw its
beginning in Europe and the fact that the clergy of this faith derive their authorities and receive
orders from the Holy See do not give or bestow the citizenship of the Pope upon these
branches. Citizenship is a political right which cannot be acquired by a sort of "radiation". We
have to realize that although there is a fraternity among all the catholic countries and the
dioceses therein all over the globe, the universality that the word "catholic" implies, merely
characterize their faith, a uniformity in the practice and the interpretation of their dogma and in
the exercise of their belief, but certainly they are separate and independent from one another in
jurisdiction, governed by different laws under which they are incorporated, and entirely
independent on the others in the management and ownership of their temporalities. To allow
theory that the Roman Catholic Churches all over the world follow the citizenship of their
Supreme Head, the Pontifical Father, would lead to the absurdity of finding the citizens of a
country who embrace the Catholic faith and become members of that religious society, likewise
citizens of the Vatican or of Italy. And this is more so if We consider that the Pope himself may
be an Italian or national of any other country of the world. The same thing be said with regard to
the nationality or citizenship of the corporation sole created under the laws of the Philippines,
which is not altered by the change of citizenship of the incumbent bishops or head of said
corporation sole.
We must therefore, declare that although a branch of the Universal Roman Catholic Apostolic
Church, every Roman Catholic Church in different countries, if it exercises its mission and is
lawfully incorporated in accordance with the laws of the country where it is located, is considered
an entity or person with all the rights and privileges granted to such artificial being under the
laws of that country, separate and distinct from the personality of the Roman Pontiff or the Holy
See, without prejudice to its religious relations with the latter which are governed by the Canon
Law or their rules and regulations.
We certainly are conscious of the fact that whatever conclusion We may draw on this matter will
have a far reaching influence, nor can We overlook the pages of history that arouse indignation
and criticisms against church landholdings. This nurtured feeling that snowbailed into a strong
nationalistic sentiment manifested itself when the provisions on natural to be embodied in the
Philippine Constitution were framed, but all that has been said on this regard referred more
particularly to landholdings of religious corporations known as "Friar Estates" which have already
bee acquired by our government, and not to properties held by corporations sole which, We
repeat, are properties held in trust for the benefit of the faithful residing within its territorial
jurisdiction. Though that same feeling probably precipitated and influenced to a large extent the
doctrine laid down in the celebrated Krivenco decision, We have to take this matter in the light of
legal provisions and jurisprudence actually obtaining, irrespective of sentiments.
The question now left for our determination is whether the Universal Roman Catholic Apostolic
Church in the Philippines, or better still, the corporation sole named the Roman Catholic
Apostolic Administrator of Davao, Inc., is qualified to acquire private agricultural lands in the
Philippines pursuant to the provisions of Article XIII of the Constitution.
We see from sections 1 and 5 of said Article quoted before, that only persons or corporations
qualified to acquire hold lands of the public domain in the Philippines may acquire or be
assigned and hold private agricultural lands. Consequently, the decisive factor in the present

controversy hinges on the proposition or whether or not the petitioner in this case can acquire
agricultural lands of the public domain.
From the data secured from the Securities and Exchange Commission, We find that the Roman
Catholic Bishop of Zamboanga was incorporated (as a corporation sole) in September, 1912,
principally to administer its temporalities and manage its properties. Probably due to the ravages
of the last war, its articles of incorporation were reconstructed in the Securities and Exchange
Commission on April 8, 1948. At first, this corporation sole administered all the temporalities of
the church existing or located in the island of Mindanao. Later on, however, new dioceses were
formed and new corporations sole were created to correspond with the territorial jurisdiction of
the new dioceses, one of them being petitioner herein, the Roman Catholic Apostolic
Administrator of Davao, Inc., which was registered with the Securities and Exchange
Commission on September 12, 1950, and succeeded in the administrative for all the
"temporalities" of the Roman Catholic Church existing in Davao.
According to our Corporation Law, Public Act No. 1549, approved April 1, 1906, a corporation
sole.
is organized and composed of a single individual, the head of any religious society or
church, for the ADMINISTRATION of the temporalities of such society or church. By
"temporalities" is meant estate and properties not used exclusively for religious
worship. The successor in office of such religious head or chief priest incorporated as
a corporation sole shall become the corporation sole on ascension to office, and shall
be permitted to transact business as such on filing with the Securities and Exchange
Commission a copy of his commission, certificate of election or letter of appointment
duly certified by any notary public or clerk of court of record (Guevara's The Philippine
Corporation Law, p. 223).
The Corporation Law also contains the following provisions:
SECTION 159. Any corporation sole may purchase and hold real estate and personal;
property for its church, charitable, benevolent, or educational purposes, and may
receive bequests or gifts of such purposes. Such corporation may mortgage or sell
real property held by it upon obtaining an order for that purpose from the Court of First
Instance of the province in which the property is situated; but before making the order
proof must be made to the satisfaction of the Court that notice of the application for
leave to mortgage or sell has been given by publication or otherwise in such manner
and for such time as said Court or the Judge thereof may have directed, and that it is
to the interest of the corporation that leave to mortgage or sell must be made by
petition, duly verified by the bishop, chief priest, or presiding elder acting as
corporation sole, and may be opposed by any member of the religious denomination,
society or church represented by the corporation sole: Provided, however, That in
cases where the rules, regulations, and discipline of the religious denomination,
society or church concerned represented by such corporation sole regulate the
methods of acquiring, holding, selling and mortgaging real estate and personal
property, such rules, regulations, and discipline shall control and the intervention of the
Courts shall not be necessary.
It can, therefore, be noticed that the power of a corporation sole to purchase real property, like
the power exercised in the case at bar, it is not restricted although the power to sell or
mortgage sometimes is, depending upon the rules, regulations, and discipline of the church
concerned represented by said corporation sole. If corporations sole can purchase and sell real
estate for its church, charitable, benevolent, or educational purposes, can they register said real

67

properties? As provided by law, lands held in trust for specific purposes me be subject of
registration (section 69, Act 496), and the capacity of a corporation sole, like petitioner herein, to
register lands belonging to it is acknowledged, and title thereto may be issued in its name
(Bishop of Nueva Segovia vs. Insular Government, 26 Phil. 300-1913). Indeed it is absurd that
while the corporations sole that might be in need of acquiring lands for the erection of temples
where the faithful can pray, or schools and cemeteries which they are expressly authorized by
law to acquire in connection with the propagation of the Roman Catholic Apostolic faith or in
furtherance of their freedom of religion they could not register said properties in their name. As
professor Javier J. Nepomuceno very well says "Man in his search for the immortal and
imponderable, has, even before the dawn of recorded history, erected temples to the Unknown
God, and there is no doubt that he will continue to do so for all time to come, as long as he
continues 'imploring the aid of Divine Providence'" (Nepomuceno's Corporation Sole, VI Ateneo
Law Journal, No. 1, p. 41, September, 1956). Under the circumstances of this case, We might
safely state that even before the establishment of the Philippine Commonwealth and of the
Republic of the Philippines every corporation sole then organized and registered had by express
provision of law the necessary power and qualification to purchase in its name private lands
located in the territory in which it exercised its functions or ministry and for which it was created,
independently of the nationality of its incumbent unique and single member and head, the
bishop of the dioceses. It can be also maintained without fear of being gainsaid that the Roman
Catholic Apostolic Church in the Philippines has no nationality and that the framers of the
Constitution, as will be hereunder explained, did not have in mind the religious corporations sole
when they provided that 60 per centum of the capital thereof be owned by Filipino citizens.
There could be no controversy as to the fact that a duly registered corporation sole is an artificial
being having the right of succession and the power, attributes, and properties expressly
authorized by law or incident to its existence (section 1, Corporation Law). In outlining the
general powers of a corporation. Public Act. No. 1459 provides among others:
SEC. 13. Every corporation has the power:
(5) To purchase, hold, convey, sell, lease, lot, mortgage, encumber, and otherwise
deal with such real and personal property as the purpose for which the corporation
was formed may permit, and the transaction of the lawful business of the corporation
may reasonably and necessarily require, unless otherwise prescribed in this Act: . . .
In implementation of the same and specially made applicable to a form of corporation
recognized by the same law, Section 159 aforequoted expressly allowed the corporation sole to
purchase and hold real as well as personal properties necessary for the promotion of the objects
for which said corporation sole is created. Respondent Land Registration Commissioner,
however, maintained that since the Philippine Constitution is a later enactment than public Act
No. 1459, the provisions of Section 159 in amplification of Section 13 thereof, as regard real
properties, should be considered repealed by the former.
There is a reason to believe that when the specific provision of the Constitution invoked by
respondent Commissioner was under consideration, the framers of the same did not have in
mind or overlooked this particular form of corporation. It is undeniable that the naturalization and
conservation of our national resources was one of the dominating objectives of the Convention
and in drafting the present Article XII of the Constitution, the delegates were goaded by the
desire (1) to insure their conservation for Filipino posterity; (2) to serve as an instrument of
national defense, helping prevent the extension into the country of foreign control through
peaceful economic penetration; and (3) to prevent making the Philippines a source of
international conflicts with the consequent danger to its internal security and independence (See
The Framing of the Philippine Constitution by Professor Jose M. Aruego, a Delegate to the

Constitutional Convention, Vol. II. P. 592-604). In the same book Delegate Aruego, explaining
the reason behind the first consideration, wrote:
At the time of the framing of Philippine Constitution, Filipino capital had been to be
rather shy. Filipinos hesitated s a general rule to invest a considerable sum of their
capital for the development, exploitation and utilization of the natural resources of the
country. They had not as yet been so used to corporate as the peoples of the west.
This general apathy, the delegates knew, would mean the retardation of the
development of the natural resources, unless foreign capital would be encouraged to
come and help in that development. They knew that the naturalization of the natural
resources would certainly not encourage theINVESTMENT OF FOREIGN CAPITAL
into them. But there was a general feeling in the Convention that it was better to have
such a development retarded or even postpone together until such time when the
Filipinos would be ready and willing to undertake it rather than permit the natural
resources to be placed under the ownership or control of foreigners in order that they
might be immediately be developed, with the Filipinos of the future serving not as
owners but utmost as tenants or workers under foreign masters. By all means, the
delegates believed, the natural resources should be conserved for Filipino posterity.
It could be distilled from the foregoing that the farmers of the Constitution intended said
provisions as barrier for foreigners or corporations financed by such foreigners to acquire,
exploit and develop our natural resources, saving these undeveloped wealth for our people to
clear and enrich when they are already prepared and capable of doing so. But that is not the
case of corporations sole in the Philippines, for, We repeat, they are mere administrators of the
"temporalities" or properties titled in their name and for the benefit of the members of their
respective religion composed of an overwhelming majority of Filipinos. No mention nor allusion
whatsoever is made in the Constitution as to the prohibition against or the liability of the Roman
Catholic Church in the Philippines to acquire and hold agricultural lands. Although there were
some discussions on landholdings, they were mostly confined in the inclusion of the provision
allowing the Government to break big landed estates to put an end to absentee landlordism.
But let us suppose, for the sake of argument, that the above referred to inhibitory clause of
Section 1 of Article XIII of the constitution does have bearing on the petitioner's case; even so
the clause requiring that at least 60 per centum of the capital of the corporation be owned by
Filipinos is subordinated to the petitioner's aforesaid right already existing at the time of the
inauguration of the Commonwealth and the Republic of the Philippines. In the language of Mr.
Justice Jose P. Laurel (a delegate to the Constitutional Convention), in his concurring opinion of
the case of Gold Creek mining Corporation, petitioner vs. Eulogio Rodriguez, Secretary of
Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, respondent,
66 Phil. 259:
The saving clause in the section involved of the Constitution was originally embodied
in the report submitted by the Committee on Naturalization and Preservation of Land
and Other Natural Resources to the Constitutional Convention on September 17,
1954. It was later inserted in the first draft of the Constitution as section 13 of Article
XIII thereof, and finally incorporated as we find it now. Slight have been the changes
undergone by the proviso from the time when it comes out of the committee until it
was finally adopted. When first submitted and as inserted to the first draft of the
Constitution it reads: 'subject to any right, grant, lease, or concession existing in
respect thereto on the date of the adoption of the Constitution'. As finally adopted, the
proviso reads: 'subject to any existing right, grant, lease, or concession at the time of
the inauguration of the Government established under this Constitution'. This
recognition is not mere graciousness but springs form the just character of the
government established. The framers of the Constitution were not obscured by the

68

rhetoric of democracy or swayed to hostility by an intense spirit of nationalism. They

well knew that conservation of our natural resources did not mean destruction or
annihilation of acquired property rights. Withal, they erected a government neither
episodic nor stationary but well-nigh conservative in the protection of property rights.
This notwithstanding nationalistic and socialistic traits discoverable upon even a
sudden dip into a variety of the provisions embodied in the instrument.
The writer of this decision wishes to state at this juncture that during the deliberation of this case
he submitted to the consideration of the Court the question that may be termed the "vested right
saving clause" contained in Section 1, Article XII of the Constitution, but some of the members of
this Court either did not agree with the theory of the writer, or were not ready to take a definite
stand on the particular point I am now to discuss deferring our ruling on such debatable question
for a better occasion, inasmuch as the determination thereof is not absolutely necessary for the
solution of the problem involved in this case. In his desire to face the issues squarely, the writer
will endeavor, at least as a disgression, to explain and develop his theory, not as a lucubration of
the Court, but of his own, for he deems it better and convenient to go over the cycle of reasons
that are linked to one another and that step by step lead Us to conclude as We do in the
dispositive part of this decision.
It will be noticed that Section 1 of Article XIII of the Constitution provides, among other things,
that "all agricultural lands of the public domain and their disposition shall be limited to citizens of
the Philippines or to corporations at least 60 per centum of the capital of which is owned by such
citizens, SUBJECT TO ANY EXISTING RIGHT AT THE TIME OF THE INAUGURATION OF THE
GOVERNMENT ESTABLISHED UNDER THIS CONSTITUTION."
As recounted by Mr. Justice Laurel in the aforementioned case of Gold Creek Mining
Corporation vs. Rodriguez et al., 66 Phil. 259, "this recognition (in the clause already quoted), is
not mere graciousness but springs from the just character of the government established. The
farmers of the Constitution were not obscured by the rhetoric of democracy or swayed to
hostility by an intense spirit of nationalism. They well knew that conservation of our natural
resources did not mean destruction or annihilation of ACQUIRED PROPERTY RIGHTS".
But respondents' counsel may argue that the preexisting right of acquisition of public or private
lands by a corporation which does not fulfill this 60 per cent requisite, refers to purchases of the
Constitution and not to later transactions. This argument would imply that even assuming that
petitioner had at the time of the enactment of the Constitution the right to purchase real property
or right could not be exercised after the effectivity of our Constitution, because said power or
right of corporations sole, like the herein petitioner, conferred in virtue of the aforequoted
provisions of the Corporation Law, could no longer be exercised in view of the requisite therein
prescribed that at least 60 per centum of the capital of the corporation had to be Filipino. It has
been shown before that: (1) the corporation sole, unlike the ordinary corporations which are
formed by no less than 5 incorporators, is composed of only one persons, usually the head or
bishop of the diocese, a unit which is not subject to expansion for the purpose of determining
any percentage whatsoever; (2) the corporation sole is only the administrator and not the owner
of the temporalities located in the territory comprised by said corporation sole; (3) such
temporalities are administered for and on behalf of the faithful residing in the diocese or territory
of the corporation sole; and (4) the latter, as such, has no nationality and the citizenship of the
incumbent Ordinary has nothing to do with the operation, management or administration of the
corporation sole, nor effects the citizenship of the faithful connected with their respective
dioceses or corporation sole.
In view of these peculiarities of the corporation sole, it would seem obvious that when the
specific provision of the Constitution invoked by respondent Commissioner (section 1, Art. XIII),

was under consideration, the framers of the same did not have in mind or overlooked this
particular form of corporation. If this were so, as the facts and circumstances already indicated
tend to prove it to be so, then the inescapable conclusion would be that this requirement of at
least 60 per cent of Filipino capital was never intended to apply to corporations sole, and the
existence or not a vested right becomes unquestionably immaterial.
But let us assumed that the questioned proviso is material. yet We might say that a reading of
said Section 1 will show that it does not refer to any actual acquisition of land up to the right,
qualification or power to acquire and hold private real property. The population of the Philippines,
Catholic to a high percentage, is ever increasing. In the practice of religion of their faithful the
corporation sole may be in need of more temples where to pray, more schools where the
children of the congregation could be taught in the principles of their religion, more hospitals
where their sick could be treated, more hallow or consecrated grounds or cemeteries where
Catholics could be buried, many more than those actually existing at the time of the enactment
of our Constitution. This being the case, could it be logically maintained that because the
corporation sole which, by express provision of law, has the power to hold and acquire real
estate and personal property of its churches, charitable benevolent, or educational purposes
(section 159, Corporation Law) it has to stop its growth and restrain its necessities just because
the corporation sole is a non-stock corporation composed of only one person who in his unity
does not admit of any percentage, especially when that person is not the owner but merely an
administrator of the temporalities of the corporation sole? The writer leaves the answer to
whoever may read and consider this portion of the decision.
Anyway, as stated before, this question is not a decisive factor in disposing the case, for even if
We were to disregard such saving clause of the Constitution, which reads: subject to any
existing right, grant, etc., at the same time of the inauguration of the Government established
under this Constitution, yet We would have, under the evidence on record, sufficient grounds to
uphold petitioner's contention on this matter.
In this case of the Register of Deeds of Rizal vs. Ung Sui Si Temple, 2 G.R. No. L-6776,
promulgated May 21, 1955, wherein this question was considered from a different angle, this
Court through Mr. Justice J.B.L. Reyes, said:
The fact that the appellant religious organization has no capital stock does not suffice
to escape the Constitutional inhibition, since it is admitted that its members are of
foreign nationality. The purpose of the sixty per centum requirement is obviously to
ensure that corporation or associations allowed to acquire agricultural land or to
exploit natural resources shall be controlled by Filipinos; and the spirit of the
Constitution demands that in the absence of capital stock, the controlling membership
should be composed of Filipino citizens.
In that case respondent-appellant Ung Siu Si Temple was not a corporation sole but a
corporation aggregate, i.e., an unregistered organization operating through 3 trustees, all of
Chinese nationality, and that is why this Court laid down the doctrine just quoted. With regard to
petitioner, which likewise is a non-stock corporation, the case is different, because it is a
registered corporation sole, evidently of no nationality and registered mainly to administer the
temporalities and manage the properties belonging to the faithful of said church residing in
Davao. But even if we were to go over the record to inquire into the composing membership to
determine whether the citizenship requirement is satisfied or not, we would find undeniable proof
that the members of the Roman Catholic Apostolic faith within the territory of Davao are
predominantly Filipino citizens. As indicated before, petitioner has presented evidence to
establish that the clergy and lay members of this religion fully covers the percentage of Filipino

69

citizens required by the Constitution. These facts are not controverted by respondents and our
conclusion in this point is sensibly obvious.

purposes, was, in the opinion of the legislators, considered sufficient and adequate protection
against the revitalization of religious landholdings.

Dissenting OpinionDiscussed. After having developed our theory in the case and arrived at
the findings and conclusions already expressed in this decision. We now deem it proper to
analyze and delve into the basic foundation on which the dissenting opinion stands up. Being
aware of the transcendental and far-reaching effects that Our ruling on the matter might have,
this case was thoroughly considered from all points of view, the Court sparing no effort to solve
the delicate problems involved herein.

Finally, and as previously stated, We have reason to believe that when the Delegates to the
Constitutional Convention drafted and approved Article XIII of the Constitution they do not have
in mind the corporation sole. We come to this finding because the Constitutional Assembly,
composed as it was by a great number of eminent lawyers and jurists, was like any other
legislative body empowered to enact either the Constitution of the country or any public statute,
presumed to know the conditions existing as to particular subject matter when it enacted a
statute (Board of Commerce of Orange Country vs. Bain, 92 S.E. 176; N. C. 377).

At the deliberations had to attain this end, two ways were open to a prompt dispatch of the case:
(1) the reversal of the doctrine We laid down in the celebrated Krivenko case by excluding urban
lots and properties from the group of the term "private agricultural lands" use in this section 5,
Article XIII of the Constitution; and (2) by driving Our reasons to a point that might indirectly
cause the appointment of Filipino bishops or Ordinary to head the corporations sole created to
administer the temporalities of the Roman Catholic Church in the Philippines. With regard to the
first way, a great majority of the members of this Court were not yet prepared nor agreeable to
follow that course, for reasons that are obvious. As to the second way, it seems to be misleading
because the nationality of the head of a diocese constituted as a corporation sole has no
material bearing on the functions of the latter, which are limited to the administration of the
temporalities of the Roman Catholic Apostolic Church in the Philippines.
Upon going over the grounds on which the dissenting opinion is based, it may be noticed that its
author lingered on the outskirts of the issues, thus throwing the main points in controversy out of
focus. Of course We fully agree, as stated by Professor Aruego, that the framers of our
Constitution had at heart to insure the conservation of the natural resources of Our motherland
of Filipino posterity; to serve them as an instrument of national defense, helping prevent the
extension into the country of foreign control through peaceful economic penetration; and to
prevent making the Philippines a source of international conflicts with the consequent danger to
its internal security and independence. But all these precautions adopted by the Delegates to
Our Constitutional Assembly could have not been intended for or directed against cases like the
one at bar. The emphasis and wonderings on the statement that once the capacity of a
corporation sole to acquire private agricultural lands is admitted there will be no limit to the areas
that it may hold and that this will pave the way for the "revival or revitalization of religious
landholdings that proved so troublesome in our past", cannot even furnish the "penumbra" of a
threat to the future of the Filipino people. In the first place, the right of Filipino citizens, including
those of foreign extraction, and Philippine corporations, to acquire private lands is not subject to
any restriction or limit as to quantity or area, and We certainly do not see any wrong in that. The
right of Filipino citizens and corporations to acquire public agricultural lands is already limited by
law. In the second place, corporations sole cannot be considered as aliens because they have
no nationality at all. Corporations sole are, under the law, mere administrators of the
temporalities of the Roman Catholic Church in the Philippines. In the third place, every
corporation, be it aggregate or sole, is only entitled to purchase, convey, sell, lease, let,
mortgage, encumber and otherwise deal with real properties when it is pursuant to or in
consonance with the purposes for which the corporation was formed, and when the transactions
of the lawful business of the corporation reasonably and necessarily require such dealing
section 13-(5) of the Corporation Law, Public Act No. 1459 and considering these provisions
in conjunction with Section 159 of the same law which provides that a corporation sole may only
"purchase and hold real estate and personal properties for its church, charitable, benevolent or
educational purposes", the above mentioned fear of revitalization of religious landholdings in the
Philippines is absolutely dispelled. The fact that the law thus expressly authorizes the
corporations sole to receive bequests or gifts of real properties (which were the main source that
the friars had to acquire their big haciendas during the Spanish regime), is a clear indication that
the requisite that bequests or gifts of real estate be for charitable, benevolent, or educational

Immemorial customs are presumed to have been always in the mind of the Legislature
in enacting legislation. (In re Kruger's Estate, 121 A. 109; 277 P. 326).
The Legislative is presumed to have a knowledge of the state of the law on the
subjects upon which it legislates. (Clover Valley Land and Stock Co. vs. Lamb et al.,
187, p. 723,726.)
The Court in construing a statute, will assume that the legislature acted with full
knowledge of the prior legislation on the subject and its construction by the courts.
(Johns vs. Town of Sheridan, 89 N. E. 899, 44 Ind. App. 620.).
The Legislature is presumed to have been familiar with the subject with which it was
dealing . . . . (Landers vs. Commonwealth, 101 S. E. 778, 781.).
The Legislature is presumed to know principles of statutory construction. (People vs.
Lowell, 230 N. W. 202, 250 Mich. 349, followed in P. vs. Woodworth, 230 N.W. 211,
250 Mich. 436.).
It is not to be presumed that a provision was inserted in a constitution or statute
without reason, or that a result was intended inconsistent with the judgment of men of
common sense guided by reason" (Mitchell vs. Lawden, 123 N.E. 566, 288 Ill. 326.)
See City of Decatur vs. German, 142 N. E. 252, 310 Ill. 591, and may other authorities
that can be cited in support hereof.
Consequently, the Constitutional Assembly must have known:
1. That a corporation sole is organized by and composed of a single individual, the
head of any religious society or church operating within the zone, area or jurisdiction
covered by said corporation sole (Article 155, Public Act No. 1459);
2. That a corporation sole is a non-stock corporation;
3. That the Ordinary ( the corporation sole proper) does not own the temporalities
which he merely administers;
4. That under the law the nationality of said Ordinary or of any administrator has
absolutely no bearing on the nationality of the person desiring to acquire real property
in the Philippines by purchase or other lawful means other than by hereditary

70

succession, who according to the Constitution must be a Filipino (sections 1 and 5,

Article XIII).
5. That section 159 of the Corporation Law expressly authorized the corporation
sole to purchase and holdreal estate for its church, charitable, benevolent or
educational purposes, and to receive bequests or giftsfor such purposes;
6. That in approving our Magna Carta the Delegates to the Constitutional Convention,
almost all of whom were Roman Catholics, could not have intended to curtail the
propagation of the Roman Catholic faith or the expansion of the activities of their
church, knowing pretty well that with the growth of our population more places of
worship, more schools where our youth could be taught and trained; more hallow
grounds where to bury our dead would be needed in the course of time.
Long before the enactment of our Constitution the law authorized the corporations sole even to
receive bequests or gifts of real estates and this Court could not, without any clear and specific
provision of the Constitution, declare that any real property donated, let as say this year, could
no longer be registered in the name of the corporation sole to which it was conveyed. That would
be an absurdity that should not receive our sanction on the pretext that corporations sole which
have no nationality and are non-stock corporations composed of only one person in the capacity
of administrator, have to establish first that at least sixty per centum of their capital belong to
Filipino citizens. The new Civil Code even provides:
ART. 10. In case of doubt in the interpretation or application of laws, it is presumed
that the lawmaking body intended right and justice to prevail.
Moreover, under the laws of the Philippines, the administrator of the properties of a Filipino can
acquire, in the name of the latter, private lands without any limitation whatsoever, and that is so
because the properties thus acquired are not for and would not belong to the administrator but to
the Filipino whom he represents. But the dissenting Justice inquires: If the Ordinary is only the
administrator, for whom does he administer? And who can alter or overrule his acts? We will
forthwith proceed to answer these questions. The corporations sole by reason of their peculiar
constitution and form of operation have no designed owner of its temporalities, although by the
terms of the law it can be safely implied that the Ordinary holds them in trust for the benefit of
the Roman Catholic faithful to their respective locality or diocese. Borrowing the very words of
the law, We may say that the temporalities of every corporation sole are held in trust for the use,
purpose, behalf and benefit of the religious society, or order so incorporated or of the church to
which the diocese, synod, or district organization is an organized and constituent part (section
163 of the Corporation Law).
In connection with the powers of the Ordinary over the temporalities of the corporation sole, let
us see now what is the meaning and scope of the word "control". According to the MerriamWebster's New International Dictionary, 2nd ed., p. 580, on of the acceptations of the word
"control" is:
4. To exercise restraining or directing influence over; to dominate; regulate; hence, to
hold from action; to curb; subject; also, Obs. to overpower.
SYN: restrain, rule, govern, guide, direct; check, subdue.

It is true that under section 159 of the Corporation Law, the intervention of the courts is not
necessary, tomortgage or sell real property held by the corporation sole where the rules,
regulations and discipline of the religious denomination, society or church concerned presented
by such corporation sole regulates the methods of acquiring, holding, selling and mortgaging
real estate, and that the Roman Catholic faithful residing in the jurisdiction of the corporation
sole has no say either in the manner of acquiring or of selling real property. It may be also
admitted that the faithful of the diocese cannot govern or overrule the acts of the Ordinary, but all
this does not mean that the latter can administer the temporalities of the corporation sole without
check or restraint. We must not forget that when a corporation sole is incorporated under
Philippine laws, the head and only member thereof subjects himself to the jurisdiction of the
Philippine courts of justice and these tribunals can thus entertain grievances arising out of or
with respect to the temporalities of the church which came into the possession of the corporation
sole as administrator. It may be alleged that the courts cannot intervene as to the matters of
doctrine or teachings of the Roman Catholic Church. That is correct, but the courts may step in,
at the instance of the faithful for whom the temporalities are being held in trust, to check undue
exercise by the corporation sole of its power as administrator to insure that they are used for the
purpose or purposes for which the corporation sole was created.
American authorities have these to say:
It has been held that the courts have jurisdiction over an action brought by persons
claiming to be members of a church, who allege a wrongful and fraudulent diversion of
the church property to uses foreign to the purposes of the church, since no
ecclesiastical question is involved and equity will protect from wrongful diversion of
the property (Hendryx vs. Peoples United Church, 42 Wash. 336, 4 L.R.A. n.s.
1154).
The courts of the State have no general jurisdiction and control over the officers of
such corporations in respect to the performance of their official duties; but as in
respect to the property which they hold for the corporation, they stand in position of
TRUSTEES and the courts may exercise the same supervision as in other cases of
trust (Ramsey vs. Hicks, 174 Ind. 428, 91 N.E. 344, 92 N.E. 164, 30 L.R.A. n.s.
665; Hendryx vs. Peoples United Church, supra.).
Courts of the state do not interfere with the administration of church rules or discipline
unless civil rights become involved and which must be protected (Morris St., Baptist
Church vs. Dart, 67 S.C. 338, 45 S.E. 753, and others). (All cited in Vol. II, Cooley's
Constitutional Limitations, p. 960-964.).
If the Constitutional Assembly was aware of all the facts above enumerated and of the
provisions of law relative to existing conditions as to management and operation of corporations
sole in the Philippines, and if, on the other hand, almost all of the Delegates thereto embraced
the Roman Catholic faith, can it be imagined even for an instant that when Article XIII of the
Constitution was approved the framers thereof intended to prevent or curtail from then on the
acquisition sole, either by purchase or donation, of real properties that they might need for the
propagation of the faith and for there religious and Christian activities such as the moral
education of the youth, the care, attention and treatment of the sick and the burial of the dead of
the Roman Catholic faithful residing in the jurisdiction of the respective corporations sole? The
mere indulgence in said thought would impress upon Us a feeling of apprehension and
absurdity. And that is precisely the leit motiv that permeates the whole fabric of the dissenting
opinion.

71

It seems from the foregoing that the main problem We are confronted with in this appeal, hinges
around the necessity of a proper and adequate interpretation of sections 1 and 5 of Article XIII of
the Constitution. Let Us then be guided by the principles of statutory construction laid down by
the authorities on the matter:
The most important single factor in determining the intention of the people from whom
the constitution emanated is the language in which it is expressed. The words
employed are to be taken in their natural sense, except that legal or technical terms
are to be given their technical meaning. The imperfections of language as a vehicle for
conveying meanings result in ambiguities that must be resolved by result to
extraneous aids for discovering the intent of the framers. Among the more important of
these are a consideration of the history of the times when the provision was adopted
and of the purposes aimed at in its adoption. The debates of constitutional convention,
contemporaneous construction, and practical construction by the legislative and
executive departments, especially if long continued, may be resorted to resolve, but
not to create, ambiguities. . . . Consideration of the consequences flowing from
alternative constructions of doubtful provisions constitutes an important interpretative
device. . . . The purposes of many of the broadly phrased constitutional limitations
were the promotion of policies that do not lend themselves to definite and specific
formulation. The courts have had to define those policies and have often drawn on
natural law and natural rights theories in doing so. The interpretation of constitutions
tends to respond to changing conceptions of political and social values. The extent to
which these extraneous aids affect the judicial construction of constitutions cannot be
formulated in precise rules, but their influence cannot be ignored in describing the
essentials of the process (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-19).
There are times that when even the literal expression of legislation may be
inconsistent with the general objectives of policy behind it, and on the basis of equity
or spirit of the statute the courts rationalize a restricted meaning of the latter. A
restricted interpretation is usually applied where the effect of literal interpretation will
make for injustice and absurdity or, in the words of one court, the language must be so
unreasonable 'as to shock general common sense'. (Vol. 3, Sutherland on Statutory
Construction, 3rd ed., 150.).
A constitution is not intended to be a limitation on the development of a country nor an
obstruction to its progress and foreign relations (Moscow Fire Ins. Co. of Moscow,
Russia vs. Bank of New York and Trust Co., 294 N. Y. S.648; 56 N.E. 2d. 745, 293
N.Y. 749).
Although the meaning or principles of a constitution remain fixed and unchanged from
the time of its adoption, a constitution must be construed as if intended to stand for a
great length of time, and it is progressive and not static. Accordingly, it should not
receive too narrow or literal an interpretation but rather the meaning given it should be
applied in such manner as to meet new or changed conditions as they arise (U.S. vs.
Lassic, 313 U.S. 299, 85 L. Ed., 1368).
Effect should be given to the purpose indicated by a fair interpretation of the language
used and that construction which effectuates, rather than that which destroys a plain
intent or purpose of a constitutional provision, is not only favored but will be adopted
(State ex rel. Randolph Country vs. Walden, 206 S.W. 2d 979).
It is quite generally held that in arriving at the intent and purpose the construction
should be broad or liberal or equitable, as the better method of ascertaining that

intent, rather than technical (Great Southern Life Ins. Co. vs. City of Austin, 243 S.W.
778).
All these authorities uphold our conviction that the framers of the Constitution had not in mind
the corporations sole, nor intended to apply them the provisions of section 1 and 5 of said Article
XIII when they passed and approved the same. And if it were so as We think it is, herein
petitioner, the Roman Catholic Apostolic Administrator of Davao, Inc., could not be deprived of
the right to acquire by purchase or donation real properties for charitable, benevolent and
educational purposes, nor of the right to register the same in its name with the Register of
Deeds of Davao, an indispensable requisite prescribed by the Land Registration Act for lands
covered by the Torrens system.
We leave as the last theme for discussion the much debated question above referred to as "the
vested right saving clause" contained in section 1, Article XIII of the Constitution. The dissenting
Justice hurls upon the personal opinion expressed on the matter by the writer of the decision the
most pointed darts of his severe criticism. We think, however, that this strong dissent should
have been spared, because as clearly indicated before, some members of this Court either did
not agree with the theory of the writer or were not ready to take a definite stand on that particular
point, so that there being no majority opinion thereon there was no need of any dissension
therefrom. But as the criticism has been made the writer deems it necessary to say a few words
of explanation.
The writer fully agrees with the dissenting Justice that ordinarily "a capacity to acquire
(property) in futuro, is not in itself a vested or existing property right that the Constitution protects
from impairment. For a property right to be vested (or acquired) there must be a transition from
the potential or contingent to the actual, and the proprietary interest must have attached to a
thing; it must have become 'fixed and established'" (Balboa vs. Farrales, 51 Phil. 498). But the
case at bar has to be considered as an exception to the rule because among the rights granted
by section 159 of the Corporation Law was the right to receive bequests or gifts of real
properties for charitable, benevolent and educational purposes. And this right to receive such
bequests or gifts (which implies donations in futuro), is not a mere potentiality that could be
impaired without any specific provision in the Constitution to that effect, especially when the
impairment would disturbingly affect the propagation of the religious faith of the immense
majority of the Filipino people and the curtailment of the activities of their Church. That is why
the writer gave us a basis of his contention what Professor Aruego said in his book "The
Framing of the Philippine Constitution" and the enlightening opinion of Mr. Justice Jose P.
Laurel, another Delegate to the Constitutional Convention, in his concurring opinion in the case
of Goldcreek Mining Co. vs. Eulogio Rodriguez et al., 66 Phil. 259. Anyway the majority of the
Court did not deem necessary to pass upon said "vested right saving clause" for the final
determination of this case.
JUDGMENT
Wherefore, the resolution of the respondent Land Registration Commission of September 21,
1954, holding that in view of the provisions of sections 1 and 5 of Article XIII of the Philippine
Constitution the vendee (petitioner) is not qualified to acquire lands in the Philippines in the
absence of proof that at least 60 per centum of the capital, properties or assets of the Roman
Catholic Apostolic Administrator of Davao, Inc. is actually owned or controlled by Filipino
citizens, and denying the registration of the deed of sale in the absence of proof of compliance
with such requisite, is hereby reversed. Consequently, the respondent Register of Deeds of the
City of Davao is ordered to register the deed of sale executed by Mateo L. Rodis in favor of the
Roman Catholic Apostolic Administrator of Davao, Inc., which is the subject of the present
litigation. No pronouncement is made as to costs. It is so ordered.

72

THIRD DIVISION

[G.R. No. 102858. July 28, 1997]

THE DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS and TEODORO

ABISTADO, substituted by MARGARITA, MARISSA, MARIBEL, ARNOLD and
MARY ANN, all surnamed ABISTADO, respondents.
DECISION
PANGANIBAN, J.:
Is newspaper publication of the notice of initial hearing in an original land registration case
mandatory or directory?

On December 8, 1986, Private Respondent Teodoro Abistado filed a petition for original
registration of his title over 648 square meters of land under Presidential Decree (PD) No. 1529.
[5]
The application was docketed as Land Registration Case (LRC) No. 86 and assigned to
Branch 44 of the Regional Trial Court of Mamburao, Occidental Mindoro. [6] However, during the
pendency of his petition, applicant died. Hence, his heirs -- Margarita, Marissa, Maribel, Arnold
and Mary Ann, all surnamed Abistado -- represented by their aunt Josefa Abistado, who was
appointed their guardian ad litem, were substituted as applicants.
The land registration court in its decision dated June 13, 1989 dismissed the petition for
want of jurisdiction. However, it found that the applicants through their predecessors-in-interest
had been in open, continuous, exclusive and peaceful possession of the subject land since
1938.
In dismissing the petition, the trial court reasoned:[7]
"x x x. However, the Court noted that applicants failed to comply with the provisions of Section
23 (1) of PD 1529, requiring the Applicants to publish the notice of Initial Hearing (Exh. `E') in a
newspaper of general circulation in the Philippines. Exhibit `E' was only published in the Official
Gazette (Exhibits `F' and `G'). Consequently, the Court is of the well considered view that it has
not legally acquired jurisdiction over the instant application for want of compliance with the
mandatory provision requiring publication of the notice of initial hearing in a newspaper of
general circulation."

Statement of the Case

The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982, which in its
pertinent portion provides:[8]

The Court of Appeals ruled that it was merely procedural and that the failure to cause such
publication did not deprive the trial court of its authority to grant the application. But the Solicitor
General disagreed and thus filed this petition to set aside the Decision [1] promulgated on July 3,
1991 and the subsequent Resolution[2] promulgated on November 19, 1991 by Respondent
Court of Appeals[3] in CA-G.R. CV No. 23719. The dispositive portion of the challenged Decision
reads:[4]

It bears emphasis that the publication requirement under Section 23 [of PD 1529] has a two-fold
purpose; the first, which is mentioned in the provision of the aforequoted provision refers to
publication in the Official Gazette, and is jurisdictional; while the second, which is mentioned in
the opening clause of the same paragraph, refers to publication not only in the Official Gazette
but also in a newspaper of general circulation, and is procedural. Neither one nor the other is
dispensable. As to the first, publication in the Official Gazette is indispensably necessary
because without it, the court would be powerless to assume jurisdiction over a particular land
registration case. As to the second, publication of the notice of initial hearing also in a
newspaper of general circulation is indispensably necessary as a requirement of procedural due
process; otherwise, any decision that the court may promulgate in the case would be legally
infirm.

"WHEREFORE, premises considered, the judgment of dismissal appealed from is hereby set
aside, and a new one entered confirming the registration and title of applicant, Teodoro Abistado,
Filipino, a resident of Barangay 7, Poblacion Mamburao, Occidental Mindoro, now deceased
and substituted by Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado,
represented by their aunt, Miss Josefa Abistado, Filipinos, residents of Poblacion Mamburao,
Occidental Mindoro, to the parcel of land covered under MSI (IV-A-8) 315-D located in Poblacion
Mamburao, Occidental Mindoro.
The oppositions filed by the Republic of the Philippines and private oppositor are hereby
dismissed for want of evidence.
Upon the finality of this decision and payment of the corresponding taxes due on this land, let an
order for the issuance of a decree be issued."

Unsatisfied, private respondents appealed to Respondent Court of Appeals which, as

earlier explained, set aside the decision of the trial court and ordered the registration of the title
in the name of Teodoro Abistado.
The subsequent motion for reconsideration was denied in the challenged CA Resolution
dated November 19, 1991.
The Director of Lands represented by the Solicitor General thus elevated this recourse to
us. This Court notes that the petitioners counsel anchored his petition on Rule 65. This is an
error. His remedy should be based on Rule 45 because he is appealing a final disposition of the
Court of Appeals. Hence, we shall treat his petition as one for review under Rule 45, and not for
certiorari under Rule 65.[9]

The Facts
The Issue

73

Petitioner alleges that Respondent Court of Appeals committed grave abuse of

discretion[10] in holding

The public shall be given notice of initial hearing of the application for land registration by means
of (1) publication; (2) mailing; and (3) posting.

x x x that publication of the petition for registration of title in LRC Case No. 86 need not be
published in a newspaper of general circulation, and in not dismissing LRC Case No. 86 for want
of such publication.

1.

Petitioner points out that under Section 23 of PD 1529, the notice of initial hearing shall be
published both in the Official Gazette and in a newspaper of general circulation. According to
petitioner, publication in the Official Gazette is necessary to confer jurisdiction upon the trial
court, and xxx in xxx a newspaper of general circulation to comply with the notice requirement of
due process.[11]
Private respondents, on the other hand, contend that failure to comply with the
requirement of publication in a newspaper of general circulation is a mere procedural
defect. They add that publication in the Official Gazette is sufficient to confer jurisdiction.[12]
In reversing the decision of the trial court, Respondent Court of Appeals ruled: [13]
x x x although the requirement of publication in the Official Gazette and in a newspaper of
general circulation is couched in mandatory terms, it cannot be gainsaid that the law also
mandates with equal force that publication in the Official Gazette shall be sufficient to confer
jurisdiction upon the court.
Further, Respondent Court found that the oppositors were afforded the opportunity to
explain matters fully and present their side. Thus, it justified its disposition in this wise:[14]
x x x We do not see how the lack of compliance with the required procedure prejudiced them in
any way. Moreover, the other requirements of: publication in the Official Gazette, personal
notice by mailing, and posting at the site and other conspicuous places, were complied with and
these are sufficient to notify any party who is minded to make any objection of the application for
registration.

The Courts Ruling

We find for petitioner.

Newspaper Publication Mandatory

The pertinent part of Section 23 of Presidential Decree No. 1529 requiring publication of
the notice of initial hearing reads as follows:
Sec. 23. Notice of initial hearing, publication, etc. -- The court shall, within five days from
filing of the application, issue an order setting the date and hour of the initial hearing which shall
not be earlier than forty-five days nor later than ninety days from the date of the order.

By publication. --

Upon receipt of the order of the court setting the time for initial hearing, the Commissioner of
Land Registration shall cause a notice of initial hearing to be published once in the Official
Gazette and once in a newspaper of general circulation in the Philippines: Provided, however,
that the publication in the Official Gazette shall be sufficient to confer jurisdiction upon the
court. Said notice shall be addressed to all persons appearing to have an interest in the land
involved including the adjoining owners so far as known, and `to all whom it may concern.' Said
notice shall also require all persons concerned to appear in court at a certain date and time to
show cause why the prayer of said application shall not be granted.
xxx

xxx

xxx

Admittedly, the above provision provides in clear and categorical terms that publication in
the Official Gazette suffices to confer jurisdiction upon the land registration court. However, the
question boils down to whether, absent any publication in a newspaper of general circulation, the
land registration court can validly confirm and register the title of private respondents.
We answer this query in the negative. This answer is impelled by the demands of
statutory construction and the due process rationale behind the publication requirement.
The law used the term shall in prescribing the work to be done by the Commissioner of
Land Registration upon the latters receipt of the court order setting the time for initial
hearing. The said word denotes an imperative and thus indicates the mandatory character of a
statute.[15] While concededly such literal mandate is not an absolute rule in statutory construction,
as its import ultimately depends upon its context in the entire provision, we hold that in the
present case the term must be understood in its normal mandatory meaning. In Republic vs.
Marasigan,[16] the Court through Mr. Justice Hilario G. Davide, Jr. held that Section 23 of PD
1529 requires notice of the initial hearing by means of (1) publication, (2) mailing and (3)
posting, all of which must be complied with. If the intention of the law were otherwise, said
section would not have stressed in detail the requirements of mailing of notices to all persons
named in the petition who, per Section 15 of the Decree, include owners of adjoining properties,
and occupants of the land. Indeed, if mailing of notices is essential, then by parity of reasoning,
publication in a newspaper of general circulation is likewise imperative since the law included
such requirement in its detailed provision.
It should be noted further that land registration is a proceeding in rem.[17] Being in rem,
such proceeding requires constructive seizure of the land as against all persons, including the
state, who have rights to or interests in the property. An in rem proceeding is validated
essentially through publication. This being so, the process must strictly be complied
with. Otherwise, persons who may be interested or whose rights may be adversely affected
would be barred from contesting an application which they had no knowledge of. As has been
ruled, a party as an owner seeking the inscription of realty in the land registration court must
prove by satisfactory and conclusive evidence not only his ownership thereof but the identity of
the same, for he is in the same situation as one who institutes an action for recovery of realty.
[18]
He must prove his title against the whole world. This task, which rests upon the applicant,
can best be achieved when all persons concerned -- nay, the whole world -- who have rights to
or interests in the subject property are notified and effectively invited to come to court and show
cause why the application should not be granted. The elementary norms of due process require
that before the claimed property is taken from concerned parties and registered in the name of
the applicant, said parties must be given notice and opportunity to oppose.

74

It may be asked why publication in a newspaper of general circulation should be deemed

mandatory when the law already requires notice by publication in the Official Gazette as well as
by mailing and posting, all of which have already been complied with in the case at hand. The
reason is due process and the reality that the Official Gazette is not as widely read and
circulated as newspapers and is oftentimes delayed in its circulation, such that the notices
published therein may not reach the interested parties on time, if at all. Additionally, such parties
may not be owners of neighboring properties, and may in fact not own any other real estate. In
sum, the all-encompassing in rem nature of land registration cases, the consequences of default
orders issued against the whole world and the objective of disseminating the notice in as wide a
manner as possible demand a mandatory construction of the requirements for publication,
mailing and posting.
Admittedly, there was failure to comply with the explicit publication requirement of the
law. Private respondents did not proffer any excuse; even if they had, it would not have
mattered because the statute itself allows no excuses. Ineludibly, this Court has no authority to
dispense with such mandatory requirement. The law is unambiguous and its rationale
clear. Time and again, this Court has declared that where the law speaks in clear and
categorical language, there is no room for interpretation, vacillation or equivocation; there is
room only for application.[19] There is no alternative. Thus, the application for land registration
filed by private respondents must be dismissed without prejudice to reapplication in the future,
after all the legal requisites shall have been duly complied with.
WHEREFORE, the petition is GRANTED and the assailed Decision and Resolution
are REVERSED and SET ASIDE. The application of private respondent for land registration
is DISMISSED without prejudice. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 75042 November 29, 1988
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, ROMAN CATHOLIC BISHOP OF LUCENA,
represented by Msgr. Jose T. Sanchez, and REGIONAL TRIAL COURT, BRANCH LIII,
LUCENA CITY, respondents.
The Solicitor General for petitioner.
Gilbert D. Camaligan for private respondent.

BIDIN, J.:
This is an appeal from the 1) decision * of the FIRST CIVIL CASES DIVISION of the then
Intermediate Appellate Court dated May 13, 1986, in AC G.R. No. 01410 entitled the ROMAN

CATHOLIC BISHOP OF Lucena, represented by Msgr. Jose T. Sanchez, applicant-appellee vs.

Republic of the Philippines, et al., Oppositors-appellants, affirming the decision ** of the then
Court of FIRST INSTANCE of Quezon, 9th Judicial District, Branch 1, dated November 4, 1980
in Land Registration Case No. N-1106 entitled the ROMAN CATHOLIC BISHOP of Lucena,
represented by Msgr. Jose T. Sanchez, applicant vs. the Director of Lands and the Director,
Bureau of Forest Development, oppositors, ordering the registration of title to the parcel of land
designated, as lots 1, 2 and 3 of plan PSD-65686 and its technical descriptions, and the parcel
of land described in plan PSU-112592 and its technical description, together with whatever
improvements existing thereon, in the name of the ROMAN CATHOLIC BISHOP of Lucena and
2) its resolution Dated June 19,1986, denying appellant's "Motion for Reconsideration for lack of
merit."
The factual background of the case as found by the Intermediate Appellate Court are as follows:
On February 2, 1979, the ROMAN CATHOLIC BISHOP of Lucena,
represented by Msgr. Jose T. Sanchez, filed an application for confirmation
of title to four (4) parcels of land. Three of said parcels, denominated as
Lots 1, 2 and 3, respectively, of plan PSU-65686 are situated in Barrio
Masin, Municipality of Candelaria, Quezon Province. The fourth parcels
under plan PSU-112592 is located in Barrio Bucal (Taguan), same
municipality and province. As basis for the application, the applicant claimed
title to the various properties through either purchase or donation dating as
far back as 1928.
The legal requirements of publication and posting were duly complied with,
as was the service of copies of notice of initial hearing on the proper
government officials.
In behalf of the Director of Lands and the Director of the Bureau of Forest
Development, the Solicitor General filed an Opposition on April 20, 1979,
alleging therein among others, that the applicant did not have an imperfect
title or title in fee simple to the parcel of land being applied for.
At the initial hearing held on November 13, 1979, only the Provincial Fiscal
in representation of the Solicitor General appeared to interpose personal
objection to the application. Hence, an Order of General Default against the
whole world was issued by the Court a quo except for the Director of Lands
and the Director of the Bureau of Forest Development.
The preliminaries dispensed with, the applicant then introduced its proofs in
support of the petition, summed up by the lower court as follows:
With respect to Lots 1, 2, and 3, plan PSU-65686.
Lots 1, 2 and 3 of plan PSU-65686 respectively
containing an area of 18,977, 6,910 and 16,221 square
meters, are adjoining lots & are situated in the Barrio of
Masin, Municipality of Candelaria, Province of Quezon
(formerly Tayabas) (Exhibits F, F-1, F-2 and F-3). Said
lots were surveyed for the Roman Catholic Church on
November 3, 1928 (Exhibit P-5) and the survey plan
approved on October 20, 1929 (Exhibit F-6).

75

Lot 1 was acquired by the Roman Catholic Church thru

Rev. Father Raymundo Esquenet by purchase from the
spouses Atanacio Yranso and Maria Coronado on
October 20, 1928 (Exhibits G, G-1), portion of Lot 2
also by purchase thru Rev. Father Raymundo Esquenet
from the spouses Benito Maramot and Venancia
Descaller on May 22, 1969 (Exhibits M, N-1), while the
remaining portion of Lot 2 and Lot 3 were already
owned and possessed by the Roman Catholic Church
even prior to the survey of the said three lots in 1928.
Records of burial of the Roman Catholic Church of
Candelaria, Quezon showed that even as early as
November 1918, Lot 3 has already been utilized by the
Roman Catholic Church as its cemetery in Candelaria,
Quezon (Exhibit N, N-1 to N-5).<re||an1w>
These three lots presently constituted the Roman
Catholic Church cemetery in Candelaria, Quezon.
Lots 1, 2 and 3 are declared for taxation purposes in
the name of the Roman Catholic Church under Tax
Declaration Nos. 22-19-02-079, 22-19-02-077 and 2219-02-082 as 'cemetery site' (Exhibit S, V and T).

Evaluating the applicant's submitted proofs, the court a quo concluded, on

the basis of acquisitive prescription at the very least, that the former had
adequately shown title to the parcels of land being claimed.
Since the acquisition of these four (4) lots by the
applicant, it has been in continuous possession and
enjoyment thereof, and such possession, together with
its predecessors-in interest, covering a period of more
than 52 years (at least from the date of the survey in
1928) with respect to lots 1 and 2, about 62 years with
respect to lot 3, all of plan PSU- 65686; and more than
39 years with respect to the fourth parcel described in
plan PSU-112592 (at least from the date of the survey
in 1940) have been open, public, continuous, peaceful,
adverse against the whole world, and in the concept of
owner.
Accordingly, the court ordered the registration of the four parcels together
with the improvements thereon "in the name of the ROMAN CATHOLIC
BISHOP OF LUCENA, INC., a religious corporation sole duly registered and
existing under the laws of the Republic of the Philippines."
Against this decision, the Solicitor General filed a Motion for reconsideration
on the following grounds:

With respect to the parcel of land described in plan

PSU-112592:

1. Article XIV, Section 11 of the New Constitution(1973) disqualifies a private

corporation from acquiring alienable lands for the public domain.

This parcel of land situated in the barrio of Bucal

(Taguan), Municipality of Candelaria, Province of
Quezon (formerly Tayabas) and more particularly
described in plan PSU-1 12592 and its technical
description with an area of 3,221 square meters (Exhibit
1) was formerly owned and possessed by the spouses
Paulo G. Macasaet, and Gabriela V. de Macasaet. Said
spouses, on February 26, 1941, donated this lot to the
Roman Catholic Church represented by Reverend
Father Raymundo Esquenet (Exhibit J, J-1 to J-4). It
was surveyed for the Roman Catholic Church on Aug.
16, 1940 as church site and the corresponding survey
plan approved on Jan. 15, 1941 (Exhibits I-1, I-2, 1-3).

2. In the case at bar the application was filed after the effectivity on the New
Constitution on January 17, 1973.

Previously erected on this Lot was an old chapel which

was demolished and new chapel now stands in its
place on the same site.
For his part, the Fiscal in a Manifestation dated July 22, 1980, said 'the
State will not adduce evidence in support of its opposition and will submit
the instant case for decision.'

which was denied by the lower court for lack of merit.

Still insisting of the alleged unconstitutionality of the registration (a point
which, incidentally, the appellant never raised in the lower court prior to its
Motion for Reconsideration), the Republic elevated this appeal. (Rollo, pp.
25-28)
On May 13, 1986, the first Civil Cases Division of the Intermediate Appellate Court rendered its
Decision the dispositive part of which reads:
WHEREFORE, finding the judgment a quo to be supported by law and the
evidence on record, the same is hereby AFFIRMED. No pronouncement as
to costs.
SO ORDERED. (Rollo p. 30)
A reconsideration of the aforequoted Decision was sought by Appellant Republic of the
Philippines, but for lack of merit, its motion for reconsideration was denied on June 19, 1986, by

76

Resolution of the First Civil Case Division, Intermediate Appellate Court which resolution reads
in full:

(a) ...
(b) Those who by themselves or through their
predecessor-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of
agricultural lands of the public domain under a bona
fide claim of acquisition of ownership for at least thirty
years immediately preceding the filing of the application
for confirmation of title except when prevented by war
or force majeure. These shall be conclusively presumed
to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate
of title under the provisions of this chapter.

Considering appellant Republic of the Philippines "Motion for

reconsideration" filed on June 4, 1986; the Court RESOLVED to DENY the
Motion for Reconsideration for lack of merit, grounds raised therein having
all been considered in the decision. (Rollo, p. 31)
Hence, this petition.
The following are the assigned errors raised by the petitioner in its petition:
1. The decision and the resolution in question are contrary to law and
decisions of this honorable Court in Meralco vs. Castro-Bartolome and
Republic, 114 SCRA 799 (prom. June 29,1982); Republic vs. Judge
Villanueva and Iglesia ni Cristo, 114 SCRA 875, June 29, 1982); and
Republic vs. Judge Gonong and Iglesia ni Cristo, 118 SCRA 729-733
(November 25,1982); Director of Lands vs. Hermanos y Hermanas, Inc. 141
SCRA 21-25 (Jan. 7,1986).
2. The lands applied for registration were the subject of a previous
registration case where a decree of registration was already issued.
3. Respondent corporation failed to establish the indentity of the lands
applied for. (Rollo, pp. 14-15)
The issue raised in this case involves the question of whether the Roman Catholic Bishop of
Lucena, as a corporation sole is qualified to apply for confirmation of its title to the four (4)
parcels of land subject of this case.
Corollary thereto is the question of whether or not a corporation sole should be treated as an
ordinary private corporation, for purpose of the application of Art. XIV, Sec. 11 of the 1973
Constitution.
Article XIV, Sec. 11 of the 1973 Constitution, in part provides:
Sec. 11. .... No private corporation or association may hold alienable lands
of the public domain except by lease not to exceed one thousand hectares
in area; nor may any citizen hold such lands by lease in excess of five
hundred hectares....
Sec. 48 of the Public Land Act, in part, provides:
Sec. 48. The following described citizens of the Philippines occupying lands
of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply
to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a Certificate of title therefor,
under the Land Registration Act, to wit:

(c) ...
In its Motion for Reconsideration, petitioner contends that the Roman Catholic Bishop of Lucena
(private respondent herein) which is admittedly a corporation sole is disqualified to own and
register its title over the parcels of land involved herein. (Rollo, p. 41)
In its petition it likewise argued that being a juridical entity, private respondent cannot avail of the
benefits of Sec. 48(b) of the public land law which applies to FILIPINO citizens or NATURAL
persons. On the other hand, private respondent in its MEMORANDUM espoused the contrary
view.
There is no merit in this petition.
The parties herein do not dispute that since the acquisition of the four (4) lots by the applicant, it
has been in continuous possession and enjoyment thereof, and such possession, together with
its predecessors-in-interest, covering a period of more than 52 years (at least from the date of
survey in 1928) with respect to lots 1 and 2, about 62 years with respect to lot 3, all of plan PSU65686; and more than 39 years with respect to the fourth parcel described in plan PSU-11 2592
(at least from the date of the survey in 1940) have been open, public, continuous, peaceful,
adverse against the whole world, and in the concept of owner.
Being disputed before this Court is the matter of the applicability of Art. XIV Sec. 11 of the 1973
Constitution to the case at bar.
Petitioner argues that considering such constitutional prohibition, private respondent is
disqualified to own and register its title to the lots in question. Further, it argues that since the
application for registration was filed only on February 2, 1979, long after the 1973 Constitution
took effect on January 17, 1973, the application for registration and confirmation of title is
ineffectual because at the time it was filed, private corporation had been declared ineligible to
acquire alienable lands of the public domain pursuant to Art. XIV, Sec. 11 of the said constitution.
(Rollo, p. 41)
The questioned posed before this Court has been settled in the case of DIRECTOR OF LANDS
vs. Intermediate Appellate Court (146 SCRA 509 [1986]) which reversed the ruling first
enunciated in the 1982 case of Manila Electric Co. vs. CASTRO BARTOLOME, (114 SCRA 789
[1982]) imposing the constitutional ban on public land acquisition by private corporations which
ruling was declared emphatically as res judicata on January 7, 1986 inDirector of Lands vs.

77

Hermanos y Hermanas de Sta. Cruz de Mayo, Inc., (141 SCRA 21 [1986]).<re||an1w> In

said case, (Director of Lands v. IAC, supra), this Court stated that a determination of the
character of the lands at the time of institution of the registration proceedings must be made. If
they were then still part of the public domain, it must be answered in the negative.

unhappy freak of English Law" was designed to facilitate the exercise of the
functions of ownership carried on by the clerics for and on behalf of the
church which was regarded as the property owner (See 1 Bouvier's Law
Dictionary, p. 682-683).

If, on the other hand, they were already private lands, the constitutional prohibition against their
acquisition by private corporation or association obviously does not apply. In affirming the
Decision of the Intermediate Appellate Court in said case, this Court adopted the vigorous
dissent of the then Justice, later Chief Justice Claudio Teehankee, tracing the line of cases
beginning with CARINO, 1 in 1909, thru SUSI, 2 in 1925, down to HERICO, 3 in 1980, which
developed, affirmed and reaffirmed the doctrine that open, exclusive and undisputed possession
of alienable public land for the period prescribed by law creates the legal fiction whereby the
land, upon completion of the requisite periodipso jure and without the need of judicial or other
sanction, ceases to be public land and becomes' private property. (DIRECTOR OF LANDS vs.
IAC, supra, p. 518).

A corporation sole consists of one person only, and his successors (who will
always be one at a time), in some particular station, who are incorporated
by law in order to give them some legal capacities and advantages,
particulary that of perpetuity, which in their natural persons they could not
have had. In this sense, the King is a sole corporation; so is a bishop, or
deans distinct from their several chapters (Reid vs. Barry, 93 fla. 849, 112
So. 846).
Pertinent to this case is the provision of Sec. 113 Batas Pambansa Blg. 68 which reads as
follows:

Nothing can more clearly demonstrate the logical inevitability of considering possession of public
land which is of the character and duration prescribed by statute as the equivalent of an express
grant from the state than the dictim of the statute itself; 4 that the possessor "... 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 admissable to overcome a conclusive
presumption, confirmation proceedings would, in truth be little more than a formality, at the most
limited to ascertaining whether the possession claimed is of the required character and length of
time, and registration thereunder would not confer title, but simply recognize a title already
vested. The proceedings would not ORIGINALLY convert the land from public to private land,
but only confirm such a conversion already effected by operation of law from the moment the
required period of possession became complete. As was so well put in Carino, "... 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.
(DIRECTOR OF LANDS vs. IAC, supra, p. 520).
The open, continuous and exclusive possession of the four lots by private respondent can
clearly be gleaned from the following facts on record: Lot 1 and portion of Lot 2 was acquired by
purchase in 1928 and 1929, respectively. The remaining portion of lots 2 and 3 was already
owned and possessed by private respondent even prior to the survey of said lots in 1928. In
fact, records of burial of the Roman Catholic Church of Candelaria, Quezon showed that as
early as 1919, Lot 3 has already been utilized by the Roman Catholic Church as its cemetery.
That at present, said three lots are utilized as the Roman Catholic Church of Candelaria,
Quezon. That said lots are declared for taxation purposes in the name of the Roman Catholic
Church. The fourth parcel of land was acquired by donation in 1941 and same lot is utilized as
church site.
It must be emphasized that the Court is not here saying that a corporation sole should be treated
like an ordinary private corporation.
In Roman Catholic Apostolic Administration of Davao, Inc. vs. Land Registration Commission, et
al. (L-8451, December 20,1957,102 Phil. 596). We articulated:
In solving the problem thus submitted to our consideration, We can say the
following: A corporation sole is a special form of corporation usually
associated with the clergy. Conceived and introduced into the common law
by sheer necessity, this legal creation which was referred to as "that

Sec. 113. Acquisition and alienation of property. Any corporation sole

may purchase and hold real estate and personal property for its church,
charitable, benevolent or educational purposes, and may receive bequests
or gifts for such purposes. Such corporation may mortgage or sell real
property held by it upon obtaining an order for that purpose from the Court
of First Instance of the province where the property is situated; but before
the order is issued, proof must be made to the satisfaction of the Court that
notice of the application for leave to mortgage or sell has been given by
publication or otherwise in such manner and for such time as said court may
have directed, and that it is to the interest of the corporation that leave to
mortgage or sell should be granted. The application for leave to mortgage or
sell must be made by petition, duly verified by the chief archbishop, bishop,
priest, minister, rabbi or presiding elder acting as corporation sole, and may
be opposed by any member of the religious denomination, sect or church
represented by the corporation sole: Provided, That in cases where the
rules, regulations and discipline of the religious denomination, sect or
church religious society or order concerned represented by such corporation
sole regulate the method of acquiring, holding, selling and mortgaging real
estate and personal property, such rules, regulations and discipline shall
control and the intervention of the courts shall not be necessary.
There is no doubt that a corporation sole by the nature of its Incorporation is vested with the
right to purchase and hold real estate and personal property. It need not therefore be treated as
an ordinary private corporation because whether or not it be so treated as such, the
Constitutional provision involved will, nevertheless, be not applicable.
In the light of the facts obtaining in this case and the ruling of this Court in Director of Lands vs.
IAC, (supra, 513), the lands subject of this petition were already private property at the time the
application for confirmation of title was filed in 1979. There is therefore no cogent reason to
disturb the findings of the appellate court.
WHEREFORE, the petition is dismissed for lack of merit and the appealed decision and
Resolution of the Intermediate Appellate Court is hereby AFFIRMED.
SO ORDERED.

78