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NATURAL RESOURCES 2015

CLASSIFICATIONS OF LANDS OF THE PUBLIC DOMAIN


Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-46729 November 19, 1982
LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE ABAQUETA, BERNARDINO ADORMEO, VIDAL
ALBANO, FELICIANO ARIAS, ANTONIO BALDOS, MAXIMO BALDOS, ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA, SR.,
HERACLEO CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA VDA. DE DIANNA, DEMOCRITO DEVERO, ALFREDO
DIVINAGRACIA, ESTEBAN DIVINAGRACIA, LEODEGARDIO DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS
EMPERADO, PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS GARLET, TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA
NAQUILA, TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY, SR., DIEGO ONGRIA, ERNESTO PANARES, VICENTE PATULOT, IGNACIA RIBAO,
JUANO RICO, JESUS ROSALITA, ARMANDO TANTE and ANSELMO VALMORES, petitioners,
vs.
JUDGE VICENTE N. CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF OF DAVAO, and BINAN DEVELOPMENT CO.,
INC., respondents. MINISTER OF NATURAL RESOURCES and DIRECTOR OF LANDS, intervenors.
AQUINO, J.:
This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a private corporation from purchasing
public lands) to a 1953 sales award made by the Bureau of Lands, for which a sales patent and Torrens title were issued in 1975, and to the
1964 decision of the trial court, ejecting some of the petitioners from the land purchased, which decision was affirmed in 1975 by the Court
of Appeals. That legal question arises under the following facts:
On January 21, 1953, the Director of Lands, after a bidding, awarded to Bian Development Co., Inc. on the basis of its 1951 Sales
Application No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan, Guianga (Baguio District), Davao City with an area of about two
hundred fifty hectares. Some occupants of the lot protested against the sale. The Director of Lands in his decision of August 30, 1957
dismissed the protests and ordered the occupants to vacate the lot and remove their improvements. No appeal was made from that
decision.
The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are now petitioners herein) entered the
land only after it was awarded to the corporation and, therefore, they could not be regarded as bona fide occupants thereof. The Director
characterized them as squatters. He found that some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay vs. CA). He issued a
writ of execution but the protestants defied the writ and refused to vacate the land (p. 28, Rollo of L-43505, Okay vs. CA). **
Because the alleged occupants refused to vacate the land, the corporation filed against them on February 27, 1961 in the Court of First
Instance of Davao, Civil Case No. 3711, an ejectment suit (accion publiciana). The forty defendants were Identified as follows:
1. Vicente Abaqueta 21. Eniego Garlic
2. Candido Abella 22. Nicolas Garlic
3. Julio Ayog 23. Rufo Garlic
4. Arcadio Ayong 24. Alfonso Ibales
5. Generoso Bangonan 25. Julian Locacia
6. Lomayong Cabao 26. Filomeno Labantaban
7. Jose Catibring 27. Arcadio Lumantas
8. Teodolfo Chua 28. Santos Militante
9. Guillermo Dagoy 29. Toribio Naquila

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10. Anastacia Vda. de Didal 30. Elpidio Okay
11. Alfredo Divinagracia 31. Guillermo Omac
12. Silverio Divinagracia 32. Emilio Padayday
13. Galina Edsa 33. Marcosa Vda. de Rejoy
14. Jesus Emperado 34. Lorenzo Rutsa
15. Porfirio Enoc 35. Ramon Samsa
16. Benito Ente 36. Rebecca Samsa
17. German Flores 37. Alfeao Sante
18. Ciriaco Fuentes 38. Meliton Sante
19. Pulong Gabao 39. Amil Sidaani
20. Constancio Garlic 40. Cosme Villegas
That ejectment suit delayed the issuance of the patent. The trial court found that the protests of twenty of the abovenamed defendants
were among those that were dismissed by the Director of Lands in his 1957 decision already mentioned.
On July 18, 1961 the purchase price of ten thousand pesos was fully paid by Binan Development Co., Inc. On November 10, 1961, an official
of the Bureau of Lands submitted a final investigation report wherein it was stated that the corporation had complied with the cultivation
and other requirements under the Public Land Law and had paid the purchase price of the land (p. 248, Rollo).
It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was issued to the corporation for that lot with
a reduced area of 175.3 hectares. The patent was registered. Original Certificate of Title No. P-5176 was issued to the patentee.
The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural Resources, recommending approval of the sales
patent, pointed out that the purchaser corporation had complied with the said requirements long before the effectivity of the Constitution,
that the land in question was free from claims and conflicts and that the issuance of the patent was in conformity with the guidelines
prescribed in Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad Santos and was an exception to the prohibition in section
11, Article XIV of the Constitution (p. 258, Rollo).
Secretary of Natural Resources Jose J. Leido, Jr., in approving the patent on August 14, 1975, noted that the applicant had acquired a nested
right to its issuance (p. 259, Rollo).
Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of forty), namely, Julio Ayog, Guillermo
Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose Emperado, Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante,
Meliton Sante, Ramon Samsa, Rebecca Samsa, Arcadio Sarumines and Felix Tahantahan, testified that they entered the disputed land long
before 1951 and that they planted it to coconuts, coffee, jackfruit and other fruit trees. (p. 28, Record on Appeal).
The trial court did not give credence to their testimonies. It believed the report of an official of the Bureau of Lands that in 1953 the land
was free from private claims and conflicts and it gave much weight to the decision of the Director of Lands dismissing the protests of the
defendants against the sales award (p. 30, Record on Appeal).
Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that the plantings on the land could not be
more than ten years old, meaning that they were not existing in 1953 when the sales award was made. Hence, the trial court ordered the
defendants to vacate the land and to restore the possession thereof to tile company. The Court of Appeals affirmed that judgment on
December 5, 1975 in its decision in Binan Development Co., Inc. vs, Sante, CA-G.R. No. 37142- R. The review of the decision was denied by
this Court on May 17, 1976 in Elpidio Okay vs. Court of Appeals, L-43505.

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After the record was remanded to the trial court, the corporation filed a motion for execution. The defendants, some of whom are now
petitioners herein, opposed the motion. They contended that the adoption of the Constitution, which took effect on January 17, 1973, was
a supervening fact which rendered it legally impossible to execute the lower court's judgment. They invoked the constitutional prohibition,
already mentioned, that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed
one thousand hectares in area."
The lower court suspended action on the motion for execution because of the manifestation of the defendants that they would file a
petition for prohibition in this Court. On August 24, 1977, the instant prohibition action was filed. Some of the petitioners were not
defendants in the ejectment case.
We hold that the said constitutional prohibition has no retroactive application to the sales application of Bian Development Co., Inc.
because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect.
That vested right has to be respected. lt could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution
allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioners'
prohibition action is barred by the doctrine of vested rights in constitutional law.
"A right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest" (16
C.J.S. 1173). It is "the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by the
existing law" (12 C.J. 955, Note 46, No. 6) or "some right or interest in property which has become fixed and established and is no longer
open to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of present fixed interest, which in right reason and
natural justice should be protected against arbitrary State action, or an innately just and imperative right which an enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines,
Inc. vs. Rosenthal, 192 Atl. 2nd 587).
Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the Constitution took effect, had fully complied
with all his obligations under the Public Land Act in order to entitle him to a sales patent, there would seem to be no legal or equitable
justification for refusing to issue or release the sales patent (p. 254, Rollo).
In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or cultivation requirements and has
fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land and to him the area limitation
in the new Constitution would not apply.
In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was completed after January 17, 1973, the applicant was, nevertheless, entitled to
a sales patent (p. 256, Rollo).
Such a contemporaneous construction of the constitutional prohibition by a high executive official carries great weight and should be
accorded much respect. It is a correct interpretation of section 11 of Article XIV.
In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land
in question had become fixed and established and was no longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from
the public domain. The corporation's right to obtain a patent for that land is protected by law. It cannot be deprived of that right without
due process (Director of Lands vs. CA, 123 Phil. 919).
As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot entertain petitioners' contention that many
of them by themselves and through their predecessors-in-interest have possessed portions of land even before the war. They should have
filed homestead or free patent applications.

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Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an obstacle to the implementation of
the trial court's 1964 final and executory judgment ejecting the petitioners. On that issue, we have no choice but to sustain its
enforceability.
Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law grinds the faces of the poor, the
administrative authorities should find ways and means of accommodating some of the petitioners if they are landless and are really tillers
of the soil who in the words of President Magsaysay deserve a little more food in their stomachs, a little more shelter over their heads and
a little more clothing on their backs. The State should endeavor to help the poor who find it difficult to make both ends meet and who
suffer privations in the universal struggle for existence.
A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The common man should be assisted in
possessing and cultivating a piece of land for his sustenance, to give him social security and to enable him to achieve a dignified existence
and become an independent, self-reliant and responsible citizen in our democratic society.
To guarantee him that right is to discourage him from becoming a subversive or from rebelling against a social order where, as the architect
of the French Revolution observed, the rich are choking with the superfluities of life but the famished multitude lack the barest necessities.
Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably
diffuse land ownership or to encourage "owner-cultivatorship and the economic family- size farm" and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had owned social unrest.
Petitioners' counsel claims that Bian Development Co., Inc. seeks to execute the judgment in Civil Case No. 3711, the ejectment suit from
which this prohibition case arose, against some of the petitioners who were not defendants in that suit (p. 126, Rollo).
Those petitioners are not successors-in-interest of the defendants in the ejectment suit. Nor do they derive their right of possession from
the said defendants. Those petitioners occupy portions of the disputed land distinct and separate from the portions occupied by the said
defendants.
We hold that judgment cannot be enforced against the said petitioners who were not defendants in that litigation or who were not
summoned and heard in that case. Generally, "it is an axiom of the law that no man shall be affected by proceedings to which he is a
stranger" (Ed. A. Keller & Co. vs Ellerman & Bucknall Steamship Co., 38 Phil. 514, 520).
To enforce the judgment against those who were not parties to the case and who occupy portions of the disputed land distinct and
separate from the portions occupied by the defendants in the ejectment suit, would be violative of due process of law, the law which,
according to Daniel Webster in his argument in the Dartmouth College case, is the law of the land, a law which hears before it condemns,
which proceeds upon inquiry and renders judgment only after trial. "The meaning is, that every citizen shall hold his life, liberty, property,
and immunities, under the protection of the general rules which govern society." (Cited in Lopez vs. Director of Lands, 47 Phil. 23, 32. See
Gatchalian vs. Arlegui, L-35615 and Tang Tee vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234 and Berses vs. Villanueva, 25 Phil. 473.)
Contempt incident.-During the pendency of this case, or at about four o'clock in the morning of December 12, 1978, Ciriaco Tebayan,
Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of the Crown Fruits and Cannery Corporation, plowed or bulldozed with
their tractors a portion of the disputed land which was occupied by Melquiades Emberador, one of the petitioners herein. The disputed
land was leased by Bian Development Co., Inc. to the canning corporation.
The four tractor drivers destroyed the improvements thereon worth about five thousand pesos consisting of coffee, coconut and banana
plants. Emberador was in the hospital at the time the alleged destruction of the improvements occurred. However, it should be noted that
Emberador was not expressly named as a defendant in the ejectment suit. Apparently, he is not included in the trial court's decision
although he was joined as a co-petitioner in this prohibition case.
The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto Garcia, the manager of Bian
Development Co., Inc., be declared in contempt of court for having disregarded the restraining order issued by this Court on August 29,
1977, enjoining specifically Judge Vicente N. Cusi and the provincial sheriff from enforcing the decision in the ejectment suit, Civil Case No.
3711 (pp. 46-47, 138- 141, Rollo).
Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge Antonio M. Martinez of the Court of First
Instance of Davao. Judge Martinez found that the plowing was made at the instance of Garcia who told the barrio captain, petitioner
Lausan Ayog, a Bagobo, that he (Garcia) could not wait anymore for the termination of this case.

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The record shows that on April 30, 1979 or four months after the said incident, Emberador, in consideration of P3,500, as the value of the
improvements on his land, executed a quitclaim in favor of the Crown Fruits and Cannery Corporation (Exh. 1, 2 and 3).
We hold that no contempt was committed. The temporary restraining order was not directed to Bian Development Co., Inc. its officers,
agents or privies. Emberador was not named specifically in the trial court's judgment as one of the occupants to be ejected.
For the redress of whatever wrong or delict was committed against Emberador by reason of the destruction of his improvements, his
remedy is not in a contempt proceeding but in some appropriate civil and criminal actions against the destroyer of the improvements.
In resume, we find that there is no merit in the instant prohibition action. The constitutional prohibition relied upon by the petitioners as a
ground to stop the execution of the judgment in the ejectment suit has no retroactive application to that case and does not divest the trial
court of jurisdiction to enforce that judgment.
WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said judgment cannot be enforced against those
petitioners herein who were not defendants in the ejectment case, Civil Case No. 3711, and over whom the lower court did not acquire
jurisdiction. The contempt proceeding is also dismissed. No costs.
SO ORDERED.
Concepcion, Jr., Guerrero, Abad Santos, Relova and Gutierrez, Jr., JJ., concur.
Escolin, J., took no part.

Separate Opinions

VASQUEZ, J., concurring:


I concur with the very ably written main opinion. However, I wish to erase any possible erroneous impression that may be derived from the
dispositive portion insofar as it declares that the judgment in the ejectment cage may not be enforced against the petitioners who were not
defendants in Civil Case No. 3711 and over whom the lower court did not acquire jurisdiction.
The judgment in any case is binding and enforceable not only against the parties thereto but also against "their successors in interest by
title subsequent to the commencement of the action" (Sec. 49[b], Rule 39, Rules of Court). We have previously held that the judgment in an
ejectment case may be enforced not only against the defendants therein but also against the members of their family, their relatives or
privies who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A further clarification of the
dispositive portion is apparently needed to exclude from the effect of the judgment in the ejectment case only the petitioners who do not
derive their right of possession from any of the defendants in the ejectment suit.
Fernando, C.J., Teehankee, Melencio-Herrera, Plana, Makasiar and De Castro, JJ., concurs.
Separate Opinions
VASQUEZ, J., concurring:
I concur with the very ably written main opinion. However, I wish to erase any possible erroneous impression that may be derived from the
dispositive portion insofar as it declares that the judgment in the ejectment cage may not be enforced against the petitioners who were not
defendants in Civil Case No. 3711 and over whom the lower court did not acquire jurisdiction.
The judgment in any case is binding and enforceable not only against the parties thereto but also against "their successors in interest by
title subsequent to the commencement of the action" (Sec. 49[b], Rule 39, Rules of Court). We have previously held that the judgment in an
ejectment case may be enforced not only against the defendants therein but also against the members of their family, their relatives or
privies who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A further clarification of the

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dispositive portion is apparently needed to exclude from the effect of the judgment in the ejectment case only the petitioners who do not
derive their right of possession from any of the defendants in the ejectment suit.
Fernando, C.J., Teehankee, Melencio-Herrera, Plana, Makasiar and De Castro, JJ., concurs.
Footnotes
* According to respondent corporation, some of the adverse claimants or protestants were not landless farmers but were well-educated
persons belonging to the middle class. Thus, Elpidio Okay was an elementary school principal. Vicente Rehoy was a landowner and barrio
captain. Patricio de Leon was a cashier and later assistant branch manager of the Philippine National Baank. Ernesto Paares was a high
school teacher and later a college professor. Francisco Mateo was a former college dean (p. 105, Rollo).
According to the 44 petitioners, they are tillers of the soil (p. 126, Rollo).

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-55289 June 29, 1982
REPUBLIC OF THE PHILIPPINES, represented by the Director of Lands, petitioner-appellant,
vs.
JUDGE CANDIDO P. VILLANUEVA, of the Court of First Instance of Bulacan, Malolos Branch VII, and IGLESIA NI CRISTO, as a corporation sole,
represented by ERAO G. MANALO, as Executive Minister, respondents-appellees.

AQUINO, J.:
Like L-49623, Manila Electric Company vs. Judge Castro-Bartolome, this case involves the prohibition in section 11, Article XIV of the
Constitution that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed one
thousand hectares in area".
Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with an area of 313 square meters and an assessed value of P1,350 were
acquired by the Iglesia Ni Cristo on January 9, 1953 from Andres Perez in exchange for a lot with an area of 247 square meters owned by
the said church (Exh. D).
The said lots were already possessed by Perez in 1933. They are not included in any military reservation. They are inside an area which was
certified as alienable or disposable by the Bureau of Forestry in 1927. The lots are planted to santol and mango trees and banana plants. A
chapel exists on the said land. The land had been declared for realty tax purposes. Realty taxes had been paid therefor (Exh. N).
On September 13, 1977, the Iglesia Ni Cristo, a corporation sole, duly existing under Philippine laws, filed with the Court of First Instance of
Bulacan an application for the registration of the two lots. It alleged that it and its predecessors-in-interest had possessed the land for more
than thirty years. It invoked section 48(b) of the Public Land Law, which provides:
Chapter VIII.Judicial confirmation of imperfect or incomplete titles.
xxx xxx xxx
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 therefore, under the Land Register Act, to wit:
xxx xxx xxx

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(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter." (As amended by Republic Act No. 1942, approved on June 22, 1957.)
The Republic of the Philippines, through the Direct/r of Lands, opposed the application on the grounds that applicant, as a private
corporation, is disqualified to hold alienable lands of the public domain, that the land applied for is public land not susceptible of private
appropriation and that the applicant and its predecessors-in-interest have not been in the open, continuous, exclusive and notorious
possession of the land since June 12, 1945.
After hearing, the trial court ordered the registration of the two lots, as described in Plan Ap-04-001344 (Exh. E), in the name of the Iglesia
Ni Cristo, a corporation sole, represented by Executive Minister Erao G. Manalo, with office at the corner of Central and Don Mariano
Marcos Avenues, Quezon City, From that decision, the Republic of the Philippines appealed to this Court under Republic Act No. 5440. The
appeal should be sustained.
As correctly contended by the Solicitor General, the Iglesia Ni Cristo, as a corporation sole or a juridical person, is disqualified to acquire or
hold alienable lands of the public domain, like the two lots in question, because of the constitutional prohibition already mentioned and
because the said church is not entitled to avail itself of the benefits of section 48(b) which applies only to Filipino citizens or natural
persons. A corporation sole (an "unhappy freak of English law") has no nationality (Roman Catholic Apostolic Adm. of Davao, Inc. vs. Land
Registration Commission, 102 Phil. 596. See Register of Deeds vs. Ung Siu Si Temple, 97 Phil. 58 and sec. 49 of the Public Land Law).
The contention in the comments of the Iglesia Ni Cristo (its lawyer did not file any brief) that the two lots are private lands, following the
rule laid down in Susi vs. Razon and Director of Lands, 48 Phil. 424, is not correct. What was considered private land in the Susi case was a
parcel of land possessed by a Filipino citizen since time immemorial, as in Cario vs. Insular Government, 212 U.S. 449, 53 L. ed. 594, 41
Phil. 935 and 7 Phil. 132. The lots sought to be registered in this case do not fall within that category. They are still public lands. A land
registration proceeding under section 48(b) "presupposes that the land is public" (Mindanao vs. Director of Lands, L-19535, July 10, 1967,
20 SCRA 641, 644).
As held in Oh Cho vs. Director of Lands, 75 Phil. 890, "all lands that were not acquired from the Government, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his
predecessors-in-interest since time immemorial, for such possession would justify the presumption that the land had never been part of
the public domain or that it had been a private property even before the Spanish conquest. "
In Uy Un vs. Perez, 71 Phil. 508, it was noted that the right of an occupant of public agricultural land to obtain a confirmation of his title
under section 48(b) of the Public Land Law is a "derecho dominical incoativo"and that before the issuance of the certificate of title the
occupant is not in the juridical sense the true owner of the land since it still pertains to the State.
The lower court's judgment is reversed and set aside. The application for registration of the Iglesia Ni Cristo is dismissed with costs against
said applicant.
SO ORDERED.
Barredo, Makasiar, Guerrero, Melencio-Herrera, Escolin, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Concepcion, Jr., J., is on leave.
Plana, J., took no part.

Separate Opinions

ABAD SANTOS, J., concurring:

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In the result for the same reasons I have already given in Manila Electric Co. vs. Judge Floreliana Castro-Bartolome, G.R. No. L-49623.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of Herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public land laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of this
stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure known as
judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the land may be
granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The Director of Lands
has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of disposition of public land,
referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in which case, as in the
issuance of homestead and sales patents, the land involved in undoubtedly public land. The possessor of a piece of public land would have
the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is that in the latter case, the
area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the area subject to judicial
confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish laws and decrees, which
certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of incomplete and
imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect that such land has
ceased to be public land. What these statements, however, really mean is that the land referred to no longer forms part of the mass of
public domain still disposable by the Director of Lands, under the authority granted him by the public land statutes. It, however, would not
follow that the land covered by Section 48 of the Public Land Act has itself become private land. The fact that its disposition is provided for
in the aforecited Act which deals with "public land" gives rise to the very strong implication, if not a positive conclusion, that the land
referred to is still public land. Only when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or an Idle
exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which provides
that "save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain. " As previously stated, by express provision of the Constitution, no
corporation or association may hold alienable lands of the public domain, except by lease, not to exceed 1,000 hectares in area. 4 Hence,
even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia
which admittedly are "corporations or association" within the meaning of the aforecited provision of the New Constitution. This
observation should end all arguments on the issue of whether the land in question is public or private land. Although it may further be
observed that supposing a corporation has been in possession of a piece of public land from the very beginning, may it apply for judicial
confirmation of the land in question to acquire title to it as owner after possessing the land for the requisite length of time? The answer is
believed obvious-it may not. If its possession is not from the beginning but has commenced only upon the transfer to it by the prior
possessor, may the corporation apply? The answer is just as obvious with more reason, it may not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I as impelled to write it only because in the dissenting opinion of Justice Teehankee,
the case of Herico vs. Dar (supra) which is my ponencia was cited in support of his position. This separate opinion then is more to show and
explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have said in his separate opinion,
which I believe, does not strengthen Justice Teehankee's position a bit.
FERNANDO, C.J., dissenting:
It is with regret that unlike in the case of Meralco v. Judge Castro-Bartolome, 1 where I had a brief concurrence and dissent, I am
constrained to dissent in the ably-written opinion of Justice Aquino. I join him in according the utmost respect and deference to this
provision in the Constitution: "No private corporation or association may hold alienable lands of the public domain except by lease not to

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exceed one thousand hectares in area; ... ." 2 If the matter before us be viewed solely from the standpoint of respondent appellee Iglesia ni
Cristo being a corporation sole, then I would have no hesitancy in sustaining the conclusion that if the land be considered public, its
registration would have to be denied. For me, that is not the decisive consideration. It is my view that the Bill of Rights provision on
religious freedom which bans the enactment of any law prohibiting its free exercise, the "enjoyment of religious profession and worship,
without discrimination or preference, [being] forever ... allowed." 3 This is not the first time the Court has occasion to recognize the high
estate that freedom of religion occupies in our hierarchy of values. Even as against the fundamental objectives, constitutionally enshrined,
of social justice and protection to labor, the claim of such free exercise and enjoyment was recognized in the leading case of Victoriano v.
Elizalde Rope Workers' Union. 4 Here the Iglesia ni Cristo, as a corporation sole, seeks the registration. The area involved in the two parcels
of land in question is 313 square meters. As admitted in the opinion of the Court, a chapel is therein located. It is that basic consideration
that leads me to conclude that the balancing process, which finds application in constitutional law adjudication, equally requires that when
two provisions in the Constitution may be relevant to a certain factual situation calls for the affirmance of the decision of respondent Judge
allowing the registration. 5 There is for me another obstacle to a partial concurrence. The right of the Roman Catholic Apostolic
Administrator of Davao to register land purchased from a Filipino citizen was recognized in The Roman Catholic Apostolic Administrator of
Davao v. Land Registration. 6As I view it, therefore, the decision of respondent Judge is equally entitled to affirmance on equal protection
grounds. 7 Hence this brief dissent.
TEEHANKEE, C.J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and respondent
Iglesia ni Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold and own private
lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished from strictly agricultural land,
acquired by them by purchase or exchange from private persons publicly recognized as the private owners (who have been in the open,
continuous, exclusive and notorious possession and occupation of the lands under a bona fide claim of ownership for at least thirty [30]
years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case of Cario and the 1925 case of Susi
down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the open, exclusive
and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under amendatory Rep. Act
No. 1942 approved on June 22, 1957), the law itself mandates 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" and" by legal fiction [the land] has already ceased
to be of the public domain and has become private property." Accordingly, the prohibition of the 1973 Constitution and of the Public Land
Act against private corporations holding lands of the public domain has no applicability in the present cases. What Meralco and Iglesia have
acquired from their predecessors-in-interest had already ceased to be of the public domain and had become private property at the time of
the sale to them and therefore their applications for confirmation of title by virtue of their predecessors-in-interest' vested right and title
may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (2) small lots with a total area of 165 square meters
located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World War II which broke
out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva Inocencio who
constructed a house thereon. But because the Meralco had installed the "anchor guy" of its steel posts on the land, the Piguing spouses
sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since 1945 and realty taxes were
regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is likewise established that it is not
included in any military reservation and that since 1927 it had been certified as part of the alienable or disposable portion of the public
domain.
The Land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol, Plaridel,
Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the Iglesia on January 9,
1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The land was already possessed by
Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area which was certified since 1927 as part of
the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on the said land. It had been duly declared for realty
tax purposes in the name of the Iglesia and realty taxes were regularly paid thereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both the
provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not qualified to apply
for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the case for
decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the application for

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registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant [Iglesia] and its
predecessors-in-interest have been in open, continuous, public and adverse possession of the land ... under a bona fide claim of ownership
for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the registration applied for under the Public
Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the prevailing
principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1 and reaffirmed in a long line of cases down to the 1980
case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public domain upon
completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the applicants'
predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription under the
provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new judgment entered
granting Meralco's application, while the judgment in the Iglesia case should stand affirmed. The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No. 1942,
approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public domain but
whose titles have not been perfected or completed may apply to the corresponding court of first instance for confirmation of their claims
and the issuance of the certificate of title therefor under the Land Registration Act in cases where they "by themselves or through their
predecessors-in-interest have been in the 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." 3 In such cases, is the land ipso jure or by operation of law converted into private land upon completion of the 30th year of
continuous and unchallenged occupation of the land such that thereafter as such private land, it may be duly transferred to and owned by
private corporations or does such land, as held by respondent judge in the Meralco case, remain part of the public domain and does not
become private land until after actual judicial confirmation proceedings and the formal court order for the issuance of the certificate of
title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is established
doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for the period provided
in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private individual personally and
through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of the public domain and becomes
private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45 (b) of the old
Public Land Act No. 2874, amending Act No. 926; whereas at present as provided for in the corresponding section 48, par. (b) of the later
and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June 22, 1957, in force since
1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately preceding the filing of the
application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted in the main opinion of Mr. Justice
Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No. 2874 which corresponds to what is now
section 48(b). It was held that the long possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the
conclusive presumption that the occupant had complied with all the conditions essential to a Government grant and was thus entitled to a
certificate of title." 4 The text of the corresponding section 48(b), as amended by Rep. Act 1942 referred to is reproduced verbatim in Mr.
Justice Aquino's opinion 5 and quotes the reduced statutory period of open and unchallenged possession of "at least thirty years
immediately preceding the filing of the application. ")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by operation of
law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the public domain and had
become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed sale by the Director of Lands
of the same land to another person was void and of no effect and Susi as the rightful possessor could recover the land as his private
property from the supposed vendee who did not acquire any right thereto since it had ceased to be land of the public domain. The Court
thus specifically held therein, as applied to the specific facts of the case, that:
... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of the public domain, openly, continuously,
exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act.
So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law not only a right to a
grant, but a grant of the Government, for it is not necessary that certificate of title should be issued in order that said grant may be

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sanctioned by the courts, an application therefor is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction,
Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become
private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in
question to Angela Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sale thus made
was void and of no effect, and Angela Razon did not thereby acquire any right. 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and
publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried
over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not only a right
to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant may be
sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as
Section 50, Commonwealth Act No. 141)," and "(C)onsidering that this case was dismissed by the trial court merely on a motion to dismiss
on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the theory that a
decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree, which theory
does not apply here because the property involved is allegedly private in nature and has ceased to be part of the public domain, we are of
the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."
In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac us. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendi thus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot maintain an action to
recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, by operation of law, private property, there is
lacking only the judicial sanction of his title Valentin Susi has the right to bring an action to recover the possession thereof and hold it.
In Miguel us. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary condition for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 " the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared null and void, and has become absolute and indefeasible. ... Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act No.
1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: ... As interpreted in
several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government grant without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for now in
section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and becomes private property
upon as showing of open and unchallenged possession under bona fide claim of ownership by the applicants' predecessors-in-interest for
the statutory period of thirty years immediately preceding the filing of the application and "it is not necessary that a certificate of title
should be issued in order that said grant may be sanctioned by the court" which right is expressly backed up by the conclusive presumption
or presumption juris et de jure of the statute that the possessor has "performed all the conditions essential to a Government grant," the
applicant Meralco cannot be said to be barred as a corporation from filing the application for registration of the private property duly
acquired by it.

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4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established facts that the Meralco's
predecessors-in- interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos having
possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses who built a
house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13, 1976, 12 Meralco's
predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the property, as well as
acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property. The very definition of
prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By prescription one acquires
ownership and other real rights through lapse of time in the manner and under the conditions laid down by law." The law does I not
provide that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this same effect is the
ruling in Cario vs. Insular Government, 13 wherein the U.S. Supreme Court speaking through Justice Holmes held that:

It is true that the language of articles 4 and 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words 'may prove' (acrediten), as well, or better,
in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that registration
was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by virtue of
certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land became private property upon completion of the 30th year of continuous, exclusive, and unchallenged possession
of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the Meralco, there is no
justification for denying the Meralco's application for registration of its duly acquired title to the land. Meralco's predecessors-in-interest
had acquired ownership of the land by acquisitive prescription as provided by the Public Land Act and by the Civil Code. The land became
private property and Meralco duly acquired it by right of purchase. To deny Meralco's application to register the property because it is not a
natural person is unjustified because neither the new constitutional ban under the 1973 Constitution against private corporations owning
lands of the public domain or the Public Land Act's limitation on the right of application for confirmation of imperfect title to lands of the
public domain can be invoked any longer as the land had long ceased to be public land but had become private property. Meralco's
application in effect seeks confirmation of the acquisition of ownership of the land which had become private property of its predecessorsin-interest, the Piguing spouses who thru their open and unchallenged possession of the land for over thirty years acquired title thereto by
acquisitive prescription and by conclusive presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title
being transferred to the Meralco by right of purchase and traditio for it is not claimed that there is any legal prohibition against the
Piguing spouses transferring the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco,
even before the formal issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners
and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao 14 )
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for
confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning hereof, the
Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent judge held in effect

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that the property had ceased to be land of the public domain and had become private property, the title to which could be duly issued in
the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish electrical
service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to minister to the
religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution against corporations
"holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area" (which is beamed against the
undue control and exploitation of our public lands and natural resources by corporations, Filipino and foreign-controlled) be deemed
violated or disregarded by the granting of the applications at bar. The two corporations in truth and in fact do not hold the small parcels of
land at bar for their own use or benefit but for the sole use and benefit of the public.
9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) well-established
doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susi down to the 1980 case of Herico (supra, at pages 5 to 11) and
support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the Meralco, the said land is still
public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section
48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement in Herico (reiterating the well-established and prevailing
doctrine which this Court has not overturned, as it cannot overturn the mandate of the statute that the unchallenged possessor for at least
30 years is "conclusively presumed to have performed all the conditions essential to a government grant") wherein Mr. Justice De Castro
categorically reiterated for the Court that "As interpreted in several cases .....the possessor is deemed to have acquired, by operation of
law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore, ceases to be of
the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the
lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon
the strength of said patent. "
It only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous statement
that "the discussion of the question of whether the land involved is still public or already private land, is however, entirely pointless or an
Idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which
provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the domain'" (at page 2) that "hence, even if the land involved in the present case is
considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia which admittedly are 'corporations' or
associations within the meaning of the aforecited provision of the New Constitution. The observation should end all arguments on the issue
of whether the land in question is public or private land" (idem) might mislead one to the wrong conclusion that corporations with 60%
Filipino ownership may not own private lands when the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself as
well as the counterpart provisions of the 1935 Constitution have always expressly permitted Filipino-owned corporations to own private
lands, and the only change effected in the 1973 Constitution is section 11 which now prohibits even such Filipino corporations to own or
hold lands of the public domain except by lease not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment granting
Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.

Separate Opinions
ABAD SANTOS, J., concurring:
In the result for the same reasons I have already given in Manila Electric Co. vs. Judge Floreliana Castro-Bartolome, G.R. No. L-49623.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of Herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public land laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution

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against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of this
stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure known as
judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the land may be
granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The Director of Lands
has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of disposition of public land,
referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in which case, as in the
issuance of homestead and sales patents, the land involved in undoubtedly public land. The possessor of a piece of public land would have
the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is that in the latter case, the
area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the area subject to judicial
confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish laws and decrees, which
certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of incomplete and
imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect that such land has
ceased to be public land. What these statements, however, really mean is that the land referred to no longer forms part of the mass of
public domain still disposable by the Director of Lands, under the authority granted him by the public land statutes. It, however, would not
follow that the land covered by Section 48 of the Public Land Act has itself become private land. The fact that its disposition is provided for
in the aforecited Act which deals with "public land" gives rise to the very strong implication, if not a positive conclusion, that the land
referred to is still public land. Only when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or an Idle
exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which provides
that "save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain. " As previously stated, by express provision of the Constitution, no
corporation or association may hold alienable lands of the public domain, except by lease, not to exceed 1,000 hectares in area. 4 Hence,
even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia
which admittedly are "corporations or association" within the meaning of the aforecited provision of the New Constitution. This
observation should end all arguments on the issue of whether the land in question is public or private land. Although it may further be
observed that supposing a corporation has been in possession of a piece of public land from the very beginning, may it apply for judicial
confirmation of the land in question to acquire title to it as owner after possessing the land for the requisite length of time? The answer is
believed obvious-it may not. If its possession is not from the beginning but has commenced only upon the transfer to it by the prior
possessor, may the corporation apply? The answer is just as obvious with more reason, it may not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I was impelled to write it only because in the dissenting opinion of Justice
Teehankee, the case of Herico vs. Dar (supra) which is my ponencia was cited in support of his position. This separate opinion then is more
to show and explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have said in his
separate opinion, which I believe, does not strengthen Justice Teehankee's position a bit.
FERNANDO, C.J., dissenting:
It is with regret that unlike in the case of Meralco v. Judge Castro-Bartolome, 1 where I had a brief concurrence and dissent, I am
constrained to dissent in the ably-written opinion of Justice Aquino. I join him in according the utmost respect and deference to this
provision in the Constitution: "No private corporation or association may hold alienable lands of the public domain except by lease not to
exceed one thousand hectares in area; ... ." 2 If the matter before us be viewed solely from the standpoint of respondent appellee Iglesia ni
Cristo being a corporation sole, then I would have no hesitancy in sustaining the conclusion that if the land be considered public, its
registration would have to be denied. For me, that is not the decisive consideration. It is my view that the Bill of Rights provision on
religious freedom which bans the enactment of any law prohibiting its free exercise, the "enjoyment of religious profession and worship,
without discrimination or preference, [being] forever ... allowed." 3 This is not the first time the Court has occasion to recognize the high
estate that freedom of religion occupies in our hierarchy of values. Even as against the fundamental objectives, constitutionally enshrined,
of social justice and protection to labor, the claim of such free exercise and enjoyment was recognized in the leading case of Victoriano v.
Elizalde Rope Workers' Union. 4 Here the Iglesia ni Cristo, as a corporation sole, seeks the registration. The area involved in the two parcels
of land in question is 313 square meters. As admitted in the opinion of the Court, a chapel is therein located. It is that basic consideration
that leads me to conclude that the balancing process, which finds application in constitutional law adjudication, equally requires that when

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two provisions in the Constitution may be relevant to a certain factual situation calls for the affirmance of the decision of respondent Judge
allowing the registration. 5 There is for me another obstacle to a partial concurrence. The right of the Roman Catholic Apostolic
Administrator of Davao to register land purchased from a Filipino citizen was recognized in The Roman Catholic Apostolic Administrator of
Davao v. Land Registration. 6As I view it, therefore, the decision of respondent Judge is equally entitled to affirmance on equal protection
grounds. 7 Hence this brief dissent.
TEEHANKEE, C.J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and respondent
Iglesia ni Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold and own private
lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished from strictly agricultural land,
acquired by them by purchase or exchange from private persons publicly recognized as the private owners (who have been in the open,
continuous, exclusive and notorious possession and occupation of the lands under a bona fide claim of ownership for at least thirty [30]
years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case of Cario and the 1925 case of Susi
down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the open, exclusive
and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under amendatory Rep. Act
No. 1942 approved on June 22, 1957), the law itself mandates 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" and" by legal fiction [the land] has already ceased
to be of the public domain and has become private property." Accordingly, the prohibition of the 1973 Constitution and of the Public Land
Act against private corporations holding lands of the public domain has no applicability in the present cases. What Meralco and Iglesia have
acquired from their predecessors-in-interest had already ceased to be of the public domain and had become private property at the time of
the sale to them and therefore their applications for confirmation of title by virtue of their predecessors-in-interest' vested right and title
may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (2) small lots with a total area of 165 square meters
located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World War II which broke
out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva Inocencio who
constructed a house thereon. But because the Meralco had installed the "anchor guy" of its steel posts on the land, the Piguing spouses
sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since 1945 and realty taxes were
regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is likewise established that it is not
included in any military reservation and that since 1927 it had been certified as part of the alienable or disposable portion of the public
domain.
The Land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol, Plaridel,
Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the Iglesia on January 9,
1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The land was already possessed by
Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area which was certified since 1927 as part of
the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on the said land. It had been duly declared for realty
tax purposes in the name of the Iglesia and realty taxes were regularly paid thereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both the
provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not qualified to apply
for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the case for
decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the application for
registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant [Iglesia] and its
predecessors-in-interest have been in open, continuous, public and adverse possession of the land ... under a bona fide claim of ownership
for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the registration applied for under the Public
Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the prevailing
principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1 and reaffirmed in a long line of cases down to the 1980
case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public domain upon
completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the applicants'
predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription under the

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provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new judgment entered
granting Meralco's application, while the judgment in the Iglesia case should stand affirmed. The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No. 1942,
approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public domain but
whose titles have not been perfected or completed may apply to the corresponding court of first instance for confirmation of their claims
and the issuance of the certificate of title therefor under the Land Registration Act in cases where they "by themselves or through their
predecessors-in-interest have been in the 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." 3 In such cases, is the land ipso jure or by operation of law converted into private land upon completion of the 30th year of
continuous and unchallenged occupation of the land such that thereafter as such private land, it may be duly transferred to and owned by
private corporations or does such land, as held by respondent judge in the Meralco case, remain part of the public domain and does not
become private land until after actual judicial confirmation proceedings and the formal court order for the issuance of the certificate of
title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is established
doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for the period provided
in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private individual personally and
through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of the public domain and becomes
private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45 (b) of the old
Public Land Act No. 2874, amending Act No. 926; whereas at present as provided for in the corresponding section 48, par. (b) of the later
and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June 22, 1957, in force since
1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately preceding the filing of the
application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted in the main opinion of Mr. Justice
Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No. 2874 which corresponds to what is now
section 48(b). It was held that the long possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the
conclusive presumption that the occupant had complied with all the conditions essential to a Government grant and was thus entitled to a
certificate of title." 4 The text of the corresponding section 48(b), as amended by Rep. Act 1942 referred to is reproduced verbatim in Mr.
Justice Aquino's opinion 5 and quotes the reduced statutory period of open and unchallenged possession of "at least thirty years
immediately preceding the filing of the application. ")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by operation of
law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the public domain and had
become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed sale by the Director of Lands
of the same land to another person was void and of no effect and Susi as the rightful possessor could recover the land as his private
property from the supposed vendee who did not acquire any right thereto since it had ceased to be land of the public domain. The Court
thus specifically held therein, as applied to the specific facts of the case, that:
... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of the public domain, openly, continuously,
exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act.
So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law not only a right to a
grant, but a grant of the Government, for it is not necessary that certificate of title should be issued in order that said grant may be
sanctioned by the courts, an application therefor is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction,
Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become
private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in
question to Angela Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sale thus made
was void and of no effect, and Angela Razon did not thereby acquire any right. 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and

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publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried
over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not only a right
to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant may be
sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as
Section 50, Commonwealth Act No. 141)," and "(C)onsidering that this case was dismissed by the trial court merely on a motion to dismiss
on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the theory that a
decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree, which theory
does not apply here because the property involved is allegedly private in nature and has ceased to be part of the public domain, we are of
the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."
In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac us. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendi thus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot maintain an action to
recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, by operation of law, private property, there is
lacking only the judicial sanction of his title Valentin Susi has the right to bring an action to recover the possession thereof and hold it.
In Miguel us. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary condition for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 " the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared null and void, and has become absolute and indefeasible. ... Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act No.
1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: ... As interpreted in
several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government grant without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for now in
section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and becomes private property
upon as showing of open and unchallenged possession under bona fide claim of ownership by the applicants' predecessors-in-interest for
the statutory period of thirty years immediately preceding the filing of the application and "it is not necessary that a certificate of title
should be issued in order that said grant may be sanctioned by the court" which right is expressly backed up by the conclusive presumption
or presumption juris et de jure of the statute that the possessor has "performed all the conditions essential to a Government grant," the
applicant Meralco cannot be said to be barred as a corporation from filing the application for registration of the private property duly
acquired by it.
4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established facts that the Meralco's
predecessors-in- interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos having
possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses who built a
house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13, 1976, 12 Meralco's
predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the property, as well as
acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property. The very definition of
prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By prescription one acquires
ownership and other real rights through lapse of time in the manner and under the conditions laid down by law." The law does I not
provide that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this same effect is the
ruling in Cario vs. Insular Government, 13 wherein the U.S. Supreme Court speaking through Justice Holmes held that:

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It is true that the language of articles 4 and 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words 'may prove' (acrediten), as well, or better,
in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that registration
was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by virtue of
certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land became private property upon completion of the 30th year of continuous, exclusive, and unchallenged possession
of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the Meralco, there is no
justification for denying the Meralco's application for registration of its duly acquired title to the land. Meralco's predecessors-in-interest
had acquired ownership of the land by acquisitive prescription as provided by the Public Land Act and by the Civil Code. The land became
private property and Meralco duly acquired it by right of purchase. To deny Meralco's application to register the property because it is not a
natural person is unjustified because neither the new constitutional ban under the 1973 Constitution against private corporations owning
lands of the public domain or the Public Land Act's limitation on the right of application for confirmation of imperfect title to lands of the
public domain can be invoked any longer as the land had long ceased to be public land but had become private property. Meralco's
application in effect seeks confirmation of the acquisition of ownership of the land which had become private property of its predecessorsin-interest, the Piguing spouses who thru their open and unchallenged possession of the land for over thirty years acquired title thereto by
acquisitive prescription and by conclusive presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title
being transferred to the Meralco by right of purchase and traditio for it is not claimed that there is any legal prohibition against the
Piguing spouses transferring the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco,
even before the formal issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners
and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao 14 )
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for
confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning hereof, the
Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent judge held in effect
that the property had ceased to be land of the public domain and had become private property, the title to which could be duly issued in
the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish electrical
service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to minister to the
religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution against corporations
"holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area" (which is beamed against the
undue control and exploitation of our public lands and natural resources by corporations, Filipino and foreign-controlled) be deemed
violated or disregarded by the granting of the applications at bar. The two corporations in truth and in fact do not hold the small parcels of
land at bar for their own use or benefit but for the sole use and benefit of the public.

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9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) well-established
doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susi down to the 1980 case of Herico (supra, at pages 5 to 11) and
support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the Meralco, the said land is still
public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section
48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement in Herico (reiterating the well-established and prevailing
doctrine which this Court has not overturned, as it cannot overturn the mandate of the statute that the unchallenged possessor for at least
30 years is "conclusively presumed to have performed all the conditions essential to a government grant") wherein Mr. Justice De Castro
categorically reiterated for the Court that "As interpreted in several cases .....the possessor is deemed to have acquired, by operation of
law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore, ceases to be of
the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the
lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon
the strength of said patent. "
It only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous statement
that "the discussion of the question of whether the land involved is still public or already private land, is however, entirely pointless or an
Idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which
provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the domain'" (at page 2) that "hence, even if the land involved in the present case is
considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia which admittedly are 'corporations' or
associations within the meaning of the aforecited provision of the New Constitution. The observation should end all arguments on the issue
of whether the land in question is public or private land" (idem) might mislead one to the wrong conclusion that corporations with 60%
Filipino ownership may not own private lands when the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself as
well as the counterpart provisions of the 1935 Constitution have always expressly permitted Filipino-owned corporations to own private
lands, and the only change effected in the 1973 Constitution is section 11 which now prohibits even such Filipino corporations to own or
hold lands of the public domain except by lease not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment granting
Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC

G.R. No. L-49623 June 29, 1982


MANILA ELECTRIC COMPANY, petitioner-appellant,
vs.
JUDGE FLORENLIANA CASTRO-BARTOLOME of the Court of First Instance of Rizal, Makati Branch XV, and REPUBLIC OF THE PHILIPPINES,
respondent-appellees.

AQUINO, J.:p
This case involves the prohibition in section 11, Article XIV of the Constitution that "no private coporation or associaiton may hold alienable
lands of the public domain except by lease not to exceed on ethousand hectares in area". * That prohibition is not found in the 1935
Constitution.
The Manila Electric Company, a domestic corporation organized under Philippine laws, more than sixty percent of whose capital stock is
owned by Filipino citizens, in its application filed on December 1, 1976 in the Makati branch of the Court of First Instance of Rizal, prayed
for the confirmation of its title to two lots with a total area of one hundred sixty-five square meters, located at Tanay, Rizal with an
assessed value of P3,270 (LRC Case No. N-9485, LRC No. N-50801).

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The Republic of the Philippines opposed theh application on the grounds that the applicant, as a private corporation,is disqualified to hold
alienable public lands and that the applicant and its prredecessors-in-interest have not been in the open, continuous, exclusive and
notorious possession and occupation of the land for at least thirty years immediately preceding the filing of the application (pp. 65-66,
Rollo).
After the trial had commenced, the Province of rizal and the Municipality of Tanay filed a joint opposition to the application on the ground
that one of the lots, Lot No. 1165 of the Tanay cadastre, would be needed for the widening and improvement of Jose Abad Santos and
E.Quirino Streetsin the town of Tanay.
The land was possessed by Olimpia ramos before the Pacific war which broke out in 1941. On July 3, 1947, Ramos sold the land to the
spouses Rafael Piguing and MInerva Inocencio (Exh. K). The Piguing sapouses constructed a house therereon. Because the Meralco had
installed the "anchor guy" of its steel post on the land, the Piguing spouses sold the lot to the Meralco on August 13, 1976.
The said land was included in the1968 cadastral survey made in Tanacy by the Bureau of Lands, Plan AP-04-000902 (Exh. F and H) and was
divided into two lots, Lots Nos. 1164 and 1165, so as to segregate Lot No. 1165 which would be used to widen the two street serving as the
land's eastern and southern boundaries.
The land was declared for realty tax purposes since 1945 and taxes had been paid thereon up to 1977. It is residential in character as
distinguished from a strictly agricultural land. It is not included in any military reservation. Since 1927, it has formed part of the alienable
portion of the public domain.
After trial, the lowre court rendered a decision dismissing the application because in its opinion the Meralco is not qualified to apply for the
registration of the said land since under section 48(b) of the Public Land Law only Filipino citizens or natural persons can apply for judicial
confirmationof their imperfect titles to public land. The Meralco is a juridical person. The trial court assumed that the land which it seeks to
register is public land.
From that decision, the Meralco appealed to this Court under Republic Act No. 5440.
In contends that the said land, after having been possessed in the concept of owner by Olimpia Ramos and the Piguing spouses for more
than thirty years, had become private land in the hands of the latter, and, therefore, the constitutional prohibition, banning a private
corporation from acquiring alienable public land, is not applicable to the said land.
The Meralco further contends that it has invoke section 48(b) of the Public Land Law, not for itself, but for the Piguing spouses who, as
Filipino citizens, could secure a judicial confirmation of their imperfect title to the land.
In reply to these contentions, the Solicitor General counters that the said land is not private land because the Meralco and its predecessorsin-interest have no composition title from the Spanish government nor possessory information title or any other means for the acquisition
of public lands such as grants or patents (Republic vs. Court of Appeals and De Jesus, L-40912, September 30, 1976, 73 SCRA 146, 157;
Director of Lands vs. Reyes, L-27594, November 28, 1975, and Alinsunurin vs. Director of Lands, L-28144, November 28, 1975; 68 SCRA 177;
195; Lee Hong Hok vs. David, L-30389, December 27, 1972, 48 SCRA 372, 378-9; Director of Lands vs. Court of Appeals and Raymundo, L29575, April 30, 1971, 38 SCRA 634, 639; Padilla vs. Reyes and Director of Lands, 60 Phil. 967, 969; Heirs of Datu Pendatun vs. Director of
Lands, 59 Phil. 600, 603).
The Public Land Law provides:
CHAPTER VIII. Judicial confirmation of imperfect or incomplete titles.
xxx xxx xxx
SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the
land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition 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

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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. (As amended by Republic Act No. 1942, approved on June 22, 1957.)
xxx xxx xxx
SEC. 49. No person claiming title to lands of the public domain not in possession of the qualifications specified in the last preceding section
may apply for the benefits of this chapter.
We hold that, as between the State and the Meralco, the said land is still public land. It would cease to be public land only upon the
issuance of the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still public land and the Meralco, as a
juridical person, is disqualified to apply for its registration under section 48(b), Meralco's application cannot be given due course or has to
be dismissed.
This conclusion is supported by the rule announced in Oh Cho vs. Director of Lands, 75 Phil. 890, 892, which rule is a compendious or
quintessential precis of a pervasive principle of public land law and land registration law, that "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be any land that should have
been in the possession of an occupant and of his predecessors-in-interest since time immemorial, for such possession would justify the
presumption that the land had never been part of the public domain or that it had been a private property even before the Spanish
conquest." (Cario vs. Insular Government, 212 U. S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132).
The Meralco relies on the ruling in Susi vs. Razon and Director of Lands, 48 Phil. 424, that "an open, continuous, adverse and public
possession of a land of the public domain from time immemorial by a private individual personally and through his predecessors confers an
effective title on said possessor, whereby the land ceases to be public" and becomes private property.
That ruling is based on the Cario case which is about the possession of land by an Igorot and his ancestors since time immemorial or even
before the Spanish conquest. The land involved in the Susi case was possessed before 1880 or since a period of time "beyond the reach of
memory". That is not the situation in this case. The Meralco does not pretend that the Piguing spouses and their predecessor had been in
possession of the land since time immemorial.
In the Susi case, this Court applied section 45(b) of Act No. 2874 which corresponds to what is now section 48(b). It was held that the long
possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the conclusive presumption that the occupant
had complied with all the conditions essential to a Government grant and was thus entitled to a certificate of title.
On the other hand, in Uy Un vs. Perez, 71 Phil. 508, 510-11, it was held that while occupants of public land, who have applied for the
confirmation of their title, "teian asimismo a su favor la presuncion juris et de jure de que habian cumplido con todas las condiciones
necesarias para la concesion del titulo; pero hasta que el titulo se expida no tenian el concepto juridico de ser los verdaderos dueos del
terreno in este dejo de pertenecer a los terrenos publico del Estado susceptibles de enajenacion."
That means that until the certificate of title is issued, a pice of land, over which an imperfect title is sought to be confirmed, remains public
land. For that reason in the Uy Un case, it was held that if that land was attached by a judgment creditor of the applicant, while his
application for confirmation of his imperfect title was pending in the Bureau of Lands, the levy and execution sald of the land were void.
For that same reason, lands over which an imperfect title is sought to be confirmed are governed by the Public Land Law. Such lands would
not be covered by the Public Land Law if they were already private lands. The occupants' right to the said lands is characterized in the Uy
Un case, not as ownership in fee simple, but as derecho dominical incoativo.
The Meralco in its concluding argument contends that if the Piguing spouses could ask for the confirmation of their imperfect title to the
said lands, then why should the Meralco, as their transferee, be denied the same right to register the said land in its name, there being no
legal prohibition for the Piguing spouses from selling the land to the Meralco? This Court is disposing of that same contention in the Oh Cho
case said:
The benefits provided in the Public Land Act (meaning the confirmation of an imperfect title under section 48[b]) for applicant's immediate
predecessors-in-interest are or constitute a grant or concession by the State; and before they could acquire any right under such benefits,
the applicant's immediate predecessors-in-interest should comply with the condition precedent for the grant of such benefits.
The condition precedent is to apply for the registration of the land of which they had been in possession at least since July 26, 1894. This
the applicant's immediate predecessors-in-interest (meaning the Piguing spouses in the instant case) failed to do.

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They did not have any vested right in the lot amounting to title which was transmissible to the applicant. The only right, if it may thus be
called, is their possession of the lot which, tacked to that of their predecessors-in-interest, may be availed of by a qualified person to apply
for its registration but not by a person as the applicant who is disqualified. (75 Phil. 890, 893.)
Finally, it may be observed that the constitutional prohibition makes no distinction between (on one hand) alienable agricultural public
lands as to which no occupant has an imperfect title and (on the other hand) alienable lands of the public domain as to which an occupant
has an imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make any distinction or qualification. The prohibition applies to alienable
public lands as to which a Torrens title may be secured under section 48(b). The proceeding under section 48(b) "presupposes that the land
is public" (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).
The lower court;s judgment dismissing Meralco's application is affirmed. Costs against the petitioner-appellant.
SO ORDERED.
Barredo, Makasiar, Guerrero, Melencio-Herrera, Plana, Escolin, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Concepcion, Jr., J., is on leave.

Separate Opinions

ABAD SANTOS, J.: concurring:


I concur in the result. I am of the opinion that the lots which are sought to be registered have ceased to be lands of the public domain at
the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive prescription by the
predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain is inapplicable. However, the petitioner is relying on Sec. 48 of the
Public Land Act for the confirmation of its title and Mr. Justice Aquino is correct in holding that said provision cannot be availed by juridical
entities.
FERNANDO, C.J., concurring and dissenting:
I concur in the ruling of the Court that Meralco "as a juridical person" is disqualified to apply for its registration under Section 48(b).. 1 I
dissent insofar as the opinion of the Court would characterize such jurisdictional defect, under the particular circumstances of this case, as
an insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed
by us in Francisco v. City of Davao, 2 where the legal question raised, instead of being deferred and possibly taken up in another case, was
resolved. By legal fiction 3 and in the exercise of our equitable jurisdiction, I feel that the realistic solutionwould be to decide the matter as
if the application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such disability.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public lands laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares." 2

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I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of this
stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure known as
judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the land may be
granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The Director of Lands
has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of disposition of public land,
referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in which case, as in the
issuance of homestead and sales patents, the land involved is undoubtedly public land. The possessor of a piece of public land would have
the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is that in the latter case, the
area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the area subject to judicial
confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish laws and decrees, which
certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of incomplete and
imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect that such land has
ceased to be a public land. What these statements, however, really mean is that the land referred to no longer forms part of the mass of
public domain still disposable by the Director of Lands, under the authority granted him by the public land statutes. It, however, would not
follow that the land covered by Section 48 of the Public Land Act has itself become private land. The fact that its disposition is provided for
in the aforecited Act which deals with "public land" gives rise to the very strong implication, if not a positive conclusion, that the land
referred to is still public land. Only when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or an idle
exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which provides
that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain." As previously stated, by express provisions of the Constitution, no
corporation or association may hold alienable lands of the public domain except by lease, not to exceed, 1,000 hectares in area. 4 Hence,
even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia
which admittedly are "corporations or association" within the meaning of the aforecited provision of the New Constitution. This
observation should end all arguments on the issue of whether the land in question is public or private land. Although it may further be
observed that supposing a corporation has been in possession of a piece of public land from the very beginning, may it apply for judicial
confirmation of the land in question to acquire title to its owner after possessing the land for the requisite length of time? The answer is
believed obvious it may not. If its possession is not from the beginning but has commenced only upon the transfer to it by the prior
possessor, may the corporation apply? The answer is just as obvious with more reason, it may not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I was impelled to write it only because in the dissenting opinion of Justice
Teehankee, the case of Herico vs. Dar (supra) which is my ponencia was cited in support of his position. This separate opinion then is more
to show and explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have said in this
separate opinion, which I believe, does not strengthen Justice Teehankee's position a bit.
TEEHANKEE, J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and respondent
Iglesia in Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold and own private
lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished from strictly agricultural land,
acquired by them by purchase or exchange from private persons publicly recognized as the private owners (who have been in the open,
continuous, exclusive and notorious possession and occupation of the lands under a bona fide claim of ownership for at least thirty [30]
years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case of Cario and the 1925 case of Susi
down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the open, exclusive
and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under amendatory Rep. Act
No. 1942 approved on June 22, 1957), the law itself mandates 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" and "by legal fiction [the land] has already ceased
to be of the public domain and has become private property." Accordingly, the prohibition of the 1973 Constitution and of the Public Land
Act against private corporation holding lands of the public domain has no applicability in the present cases. What Meralco and Iglesia have
acquired from their predecessors-in-interest had already ceased to be of the public domain and had become private property at the time of

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the sale to them and therefore their applicatins for confirmation of title by virtue of their predecessors-in-interest' vested right and title
may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (1) small lots with a total area of 165 square meters
located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World Warr II which broke
out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva Inocencio who
constructed a house thereon. But because the Meralco had instealled the "anchor guy" of its stell posts on the land, the Piguing spouses
sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since 1945 and realty taxes were
regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is likewise established that it is not
included in any military reservation and that since 1927 it had been certified as part of the alienable or disposable portion of the public
domain.
The land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol, Plaridel,
Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the Iglesia on January 9,
1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The land was already possessed by
Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area which was certified since 1927 as part of
the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on the said land. It had been duly declared for realty
tax purposes in the name of the Iglesia and realty taxes were regularly paid thereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both the
provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not qualified to apply
for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the case for
decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the application for
registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant ]Iglesia] and its
predecessors-in-interest have been in open, continuous, public and adverse possession of the land . . . under a bona fide claim of ownership
for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the registration applied for under the Public
Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the prevailing
principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1 and reaffirmed in a long line of cases down to the 1980
case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public domain upon
completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the applicants'
predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription under the
provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new judgment entered
granting Meralco's application, while the judgment in the Iglesia case should stand affirmed.
The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No. 1942,
approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public domain but
whose titles have not been perfected or completed may apply to the corresponding court of first instance for confirmation of their claims
and the issuance of the certificate of title therefor under the Land Registration Act in cases where they "by themselves or through their
predecessors-in-interest have been in the 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." 3 In such cases, is the land ipso jure or by operation of law converted into private land upon completion of the 30th year of
continuous and unchallenged occupation of the land such that thereafter as such private land, it may be duly transferred to and owned by
private corporations or does such land, as held by respondent judge in the Meralco case, remain part of the public domain and does not
become private land until after actual judicial confirmation proceedings and the formal court order for the issuance of the certificate of
title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is established
doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for the period provided
in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private individual personally and

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through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of the public domain and becomes
private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45(b) of the old
Public Land Act No. 2874, amending Act No. 926; whereas at present, as provided for in the corresponding section 48, par.(b) of the later
and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June 22, 1957, in force since
1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately preceding the filing of the
application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted in the main opinion of Mr. Justice
Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No. 2874 which corresponds to what is now
section 48(b). It was held that the long possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the
conclusive presumption that the occupant had complied with all the conditions essential to a Government grant and was thus entitled to a
certificate of title." 4 The text of the corresponding section 48(b), as amended by Rep. Act 1942 referred to is reproduced verbatim in Mr.
Justice Aquino's opinion 5 and quotes the reduced statutory period of open and unchallenged possession of "at least thirty years
immediately preceding the filing of the application.")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by operation of
law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the public domain and had
become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed sale by the Director of Lands
of the same land to another person was void and of no effect and Susi as the rightful possessor could recover the land as his private
property from the supposed vendee who did not acquire any right thereto since it had ceased to be land of the public domain. The Court
thus specifically held therein, as applied to the specific facts of the case, that:
. . . In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with for he has been in actual and
physical possession, personally and through his predecessors, of an agricultural land of the public domain, openly continuously, exclusively
and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So that when
Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law, not only a right to a grant, but a
grant of the Government, for it is not necessary that certificate of title should be issued in order that said grant may be sanctioned by the
courts, an application therefor is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal function, Valentin Susi had
acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at
least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in question to Angela
Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sake thus made was void and of no
effect, and Angela Razon did not thereby acquire any right." 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and
publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried
over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not only a right
to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant may be
sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as
Section 50, Commonwealth Act No. 141)." and "(C)onsidering that this case was dismissed by the trial court merely on a motion to dismiss
on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the theory that a
decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree, which theory
does not apply here because the property involved is allegedly private in natural and has ceased to be part of the public domain, we are of
the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."
In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac vs. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendi thus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot maintain an action to
recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, operation of law, private property, there is lacking
only the judicial sanction of his title, Valentin Susi has the right to bring an action to recover the possession thereof and hold it.

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In Miguel vs. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary conditions for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared and void, and has become absolute and indefeasible. . . . Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act No.
1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: . . . As interpreted in
several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for now in
section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and becomes private property
upon a showing of open and unchallenged possession under bona fide claim of ownership by the applicants' predecessors-in-interest for
the statutory period of thirty years immediately preceding the filing of the application and "it is not necessary that a certificate of title
should be issued in order that said grant may be sanctioned by the court" which right is expressly backed up by the conclusive presumption
or presumption juris et de jure of the statute that the possessor has "performed all the conditions essential to a Government grant," the
applicant Meralco cannot be said to be barred as a corporation from filing the application for registration of the private property duly
acquired by it.
4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established facts that the Meralco's
predecessors-in-interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos having
possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses who built a
house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13, 1976, 12 Meralco's
predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the property, as well as
acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property. The very definition of
prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By prescription one acquires
ownership and other real rights through lapse of time in the manner and under the conditions laid down by law." The law does not provide
that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this same effect is the ruling in
Cario vs. Insular Government 13, wherein the U.S. Supreme Court speaking through Justice Holmes held that
It is true that the language of Articles 4 and 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words "may prove" (acrediten), as well, or
better, in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that
registration was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of
the proof, whenever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by virtue of
certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land because private property upon completion of the 30th year of continuous, exclusive, and unchallenged possession
of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the Meralco, there is no
justification for denying the Meralco's application for registration of its duly acquired title to the land. Meralco's predecessors-in-interest
had acquired ownership of the land by acquisitive prescription as provided by the Public Land Act and by the Civil Code. The land became
private property and Meralco duly acquired it by right of purchase. To deny Meralco's application to register the property because it is not a
natural person is unjustified because neither the new constitutional ban under the 1973 Constitution against private corporations owning
lands of the public domain or the Public Land Act's limitation on the right of application for confirmation of imperfect title to lands of the
public domain can be invoked any longer as the land had long ceased to be public land but had become private property. Meralco's

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application in effect seeks confirmation of the acquisition of ownership of the land which had become private property of its predecessorsin-interest, the Piguing spouses who thru their open and unchallenged possession of the land for over thirty years acquired title thereto by
acquisitive prescription and by conclusive presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title
being transferred to the Meralco by right of purchase and traditio for it is not claimed that there is any legal prohibition against the
Piguing spouses transferring the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco,
even before the formal issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners
and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals as the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao 14)
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the application for
confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning hereof, the
Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent judge held in effect
that the property had ceased to be land of the public domain and had become private property, the title to which could be duly issued in
the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish electrical
service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to minister to the
religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution against corporations
"holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area" (which is beamed against the
undue control and exploitation of our public lands and natural resources by corporations, Filipino and foreign-controlled) be deemed
violated or disregarded by the granting of the applications at bar. The two corporations in truth and in fact do not hold the small parcels of
land at bar for their own use or benefit but for the sole use and benefit of the public.
9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) well-established
doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susi down to the 1980 case of Herico (supra, at pages 5 to 11) and
support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the Meralco, the said land is still
public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section
48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement in Herico (reiterating the well-established and prevailing
doctrine which this Court has not overturned, as it cannot overturn the mandate of the statute that the unchallenged possessor for at least
30 years is "conclusively presumed to have performed all the conditions essential to a government grant") wherein Mr. Justice De Castro
categorically reiterated for the Court that "As interpretated in several cases . . . the possessor is deemed to have acquired, by operation of
law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The and, therefore, ceases to be of
the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the
lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon
the strength of said patent."
In only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous statement
that "the discussion of the question of whether the land involved is still public or already private land, is, however, entirely pointless or an
idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which
provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain'" (at page 2) that "hence, even if the land involved in the present
case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia which admittedly are 'corporations or
associations' within the meaning of the aforecited provisions of the New Constitution. This observation should end all arguments of the
issue of whether the land in question is public or private land" (idem) might mislead one to the wrong conclusion that corporations with

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60% Filipino ownership may not own private lands when the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself
as well as the counterpart provisions of the 1935 Constitution have always expressly permitted Filipino-owned corporations to own private
lands, and the only change effected in the 1973 Constitution is section 11 which now prohibits even such Filipino corporations to own or
hold lands of the public domain except by lease not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment granting
Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.

Separate Opinions
ABAD SANTOS, J.: concurring:
I concur in the result. I am of the opinion that the lots which are sought to be registered have ceased to be lands of the public domain at
the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive prescription by the
predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain is inapplicable. However, the petitioner is relying on Sec. 48 of the
Public Land Act for the confirmation of its title and Mr. Justice Aquino is correct in holding that said provision cannot be availed by juridical
entities.
FERNANDO, C.J., concurring and dissenting:
I concur in the ruling of the Court that Meralco "as a juridical person" is disqualified to apply for its registration under Section 48(b).. 1 I
dissent insofar as the opinion of the Court would characterize such jurisdictional defect, under the particular circumstances of this case, as
an insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed
by us in Francisco v. City of Davao, 2 where the legal question raised, instead of being deferred and possibly taken up in another case, was
resolved. By legal fiction 3 and in the exercise of our equitable jurisdiction, I feel that the realistic solutionwould be to decide the matter as
if the application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such disability.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public lands laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of this
stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure known as
judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the land may be
granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The Director of Lands
has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of disposition of public land,
referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in which case, as in the
issuance of homestead and sales patents, the land involved is undoubtedly public land. The possessor of a piece of public land would have
the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is that in the latter case, the
area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the area subject to judicial
confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish laws and decrees, which
certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of incomplete and
imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect that such land has
ceased to be a public land. What these statements, however, really mean is that the land referred to no longer forms part of the mass of
public domain still disposable by the Director of Lands, under the authority granted him by the public land statutes. It, however, would not

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follow that the land covered by Section 48 of the Public Land Act has itself become private land. The fact that its disposition is provided for
in the aforecited Act which deals with "public land" gives rise to the very strong implication, if not a positive conclusion, that the land
referred to is still public land. Only when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or an idle
exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which provides
that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain." As previously stated, by express provisions of the Constitution, no
corporation or association may hold alienable lands of the public domain except by lease, not to exceed, 1,000 hectares in area. 4 Hence,
even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia
which admittedly are "corporations or association" within the meaning of the aforecited provision of the New Constitution. This
observation should end all arguments on the issue of whether the land in question is public or private land. Although it may further be
observed that supposing a corporation has been in possession of a piece of public land from the very beginning, may it apply for judicial
confirmation of the land in question to acquire title to its owner after possessing the land for the requisite length of time? The answer is
believed obvious it may not. If its possession is not from the beginning but has commenced only upon the transfer to it by the prior
possessor, may the corporation apply? The answer is just as obvious with more reason, it may not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I was impelled to write it only because in the dissenting opinion of Justice
Teehankee, the case of Herico vs. Dar (supra) which is my ponencia was cited in support of his position. This separate opinion then is more
to show and explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have said in this
separate opinion, which I believe, does not strengthen Justice Teehankee's position a bit.
TEEHANKEE, J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and respondent
Iglesia in Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold and own private
lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished from strictly agricultural land,
acquired by them by purchase or exchange from private persons publicly recognized as the private owners (who have been in the open,
continuous, exclusive and notorious possession and occupation of the lands under a bona fide claim of ownership for at least thirty [30]
years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case of Cario and the 1925 case of Susi
down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the open, exclusive
and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under amendatory Rep. Act
No. 1942 approved on June 22, 1957), the law itself mandates 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" and "by legal fiction [the land] has already ceased
to be of the public domain and has become private property." Accordingly, the prohibition of the 1973 Constitution and of the Public Land
Act against private corporation holding lands of the public domain has no applicability in the present cases. What Meralco and Iglesia have
acquired from their predecessors-in-interest had already ceased to be of the public domain and had become private property at the time of
the sale to them and therefore their applicatins for confirmation of title by virtue of their predecessors-in-interest' vested right and title
may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (1) small lots with a total area of 165 square meters
located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World Warr II which broke
out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva Inocencio who
constructed a house thereon. But because the Meralco had instealled the "anchor guy" of its stell posts on the land, the Piguing spouses
sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since 1945 and realty taxes were
regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is likewise established that it is not
included in any military reservation and that since 1927 it had been certified as part of the alienable or disposable portion of the public
domain.
The land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol, Plaridel,
Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the Iglesia on January 9,
1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The land was already possessed by
Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area which was certified since 1927 as part of

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the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on the said land. It had been duly declared for realty
tax purposes in the name of the Iglesia and realty taxes were regularly paid thereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both the
provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not qualified to apply
for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the case for
decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the application for
registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant ]Iglesia] and its
predecessors-in-interest have been in open, continuous, public and adverse possession of the land . . . under a bona fide claim of ownership
for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the registration applied for under the Public
Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the prevailing
principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1 and reaffirmed in a long line of cases down to the 1980
case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public domain upon
completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the applicants'
predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription under the
provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new judgment entered
granting Meralco's application, while the judgment in the Iglesia case should stand affirmed.
The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No. 1942,
approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public domain but
whose titles have not been perfected or completed may apply to the corresponding court of first instance for confirmation of their claims
and the issuance of the certificate of title therefor under the Land Registration Act in cases where they "by themselves or through their
predecessors-in-interest have been in the 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." 3 In such cases, is the land ipso jure or by operation of law converted into private land upon completion of the 30th year of
continuous and unchallenged occupation of the land such that thereafter as such private land, it may be duly transferred to and owned by
private corporations or does such land, as held by respondent judge in the Meralco case, remain part of the public domain and does not
become private land until after actual judicial confirmation proceedings and the formal court order for the issuance of the certificate of
title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is established
doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for the period provided
in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private individual personally and
through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of the public domain and becomes
private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45(b) of the old
Public Land Act No. 2874, amending Act No. 926; whereas at present, as provided for in the corresponding section 48, par.(b) of the later
and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June 22, 1957, in force since
1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately preceding the filing of the
application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted in the main opinion of Mr. Justice
Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No. 2874 which corresponds to what is now
section 48(b). It was held that the long possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the
conclusive presumption that the occupant had complied with all the conditions essential to a Government grant and was thus entitled to a
certificate of title." 4 The text of the corresponding section 48(b), as amended by Rep. Act 1942 referred to is reproduced verbatim in Mr.
Justice Aquino's opinion 5 and quotes the reduced statutory period of open and unchallenged possession of "at least thirty years
immediately preceding the filing of the application.")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by operation of
law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the public domain and had

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become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed sale by the Director of Lands
of the same land to another person was void and of no effect and Susi as the rightful possessor could recover the land as his private
property from the supposed vendee who did not acquire any right thereto since it had ceased to be land of the public domain. The Court
thus specifically held therein, as applied to the specific facts of the case, that:
. . . In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with for he has been in actual and
physical possession, personally and through his predecessors, of an agricultural land of the public domain, openly continuously, exclusively
and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So that when
Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law, not only a right to a grant, but a
grant of the Government, for it is not necessary that certificate of title should be issued in order that said grant may be sanctioned by the
courts, an application therefor is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal function, Valentin Susi had
acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at
least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in question to Angela
Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sake thus made was void and of no
effect, and Angela Razon did not thereby acquire any right." 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and
publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried
over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not only a right
to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant may be
sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as
Section 50, Commonwealth Act No. 141)." and "(C)onsidering that this case was dismissed by the trial court merely on a motion to dismiss
on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the theory that a
decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree, which theory
does not apply here because the property involved is allegedly private in natural and has ceased to be part of the public domain, we are of
the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."
In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac vs. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendi thus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot maintain an action to
recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, operation of law, private property, there is lacking
only the judicial sanction of his title, Valentin Susi has the right to bring an action to recover the possession thereof and hold it.
In Miguel vs. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary conditions for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared and void, and has become absolute and indefeasible. . . . Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act No.
1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: . . . As interpreted in
several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a

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mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for now in
section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and becomes private property
upon a showing of open and unchallenged possession under bona fide claim of ownership by the applicants' predecessors-in-interest for
the statutory period of thirty years immediately preceding the filing of the application and "it is not necessary that a certificate of title
should be issued in order that said grant may be sanctioned by the court" which right is expressly backed up by the conclusive presumption
or presumption juris et de jure of the statute that the possessor has "performed all the conditions essential to a Government grant," the
applicant Meralco cannot be said to be barred as a corporation from filing the application for registration of the private property duly
acquired by it.
4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established facts that the Meralco's
predecessors-in-interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos having
possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses who built a
house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13, 1976, 12 Meralco's
predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the property, as well as
acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property. The very definition of
prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By prescription one acquires
ownership and other real rights through lapse of time in the manner and under the conditions laid down by law." The law does not provide
that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this same effect is the ruling in
Cario vs. Insular Government 13, wherein the U.S. Supreme Court speaking through Justice Holmes held that
It is true that the language of Articles 4 and 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words "may prove" (acrediten), as well, or
better, in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that
registration was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of
the proof, whenever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by virtue of
certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land because private property upon completion of the 30th year of continuous, exclusive, and unchallenged possession
of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the Meralco, there is no
justification for denying the Meralco's application for registration of its duly acquired title to the land. Meralco's predecessors-in-interest
had acquired ownership of the land by acquisitive prescription as provided by the Public Land Act and by the Civil Code. The land became
private property and Meralco duly acquired it by right of purchase. To deny Meralco's application to register the property because it is not a
natural person is unjustified because neither the new constitutional ban under the 1973 Constitution against private corporations owning
lands of the public domain or the Public Land Act's limitation on the right of application for confirmation of imperfect title to lands of the
public domain can be invoked any longer as the land had long ceased to be public land but had become private property. Meralco's
application in effect seeks confirmation of the acquisition of ownership of the land which had become private property of its predecessorsin-interest, the Piguing spouses who thru their open and unchallenged possession of the land for over thirty years acquired title thereto by
acquisitive prescription and by conclusive presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title
being transferred to the Meralco by right of purchase and traditio for it is not claimed that there is any legal prohibition against the
Piguing spouses transferring the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco,
even before the formal issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners
and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals as the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao 14)

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The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the application for
confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning hereof, the
Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent judge held in effect
that the property had ceased to be land of the public domain and had become private property, the title to which could be duly issued in
the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish electrical
service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to minister to the
religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution against corporations
"holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area" (which is beamed against the
undue control and exploitation of our public lands and natural resources by corporations, Filipino and foreign-controlled) be deemed
violated or disregarded by the granting of the applications at bar. The two corporations in truth and in fact do not hold the small parcels of
land at bar for their own use or benefit but for the sole use and benefit of the public.
9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) well-established
doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susi down to the 1980 case of Herico (supra, at pages 5 to 11) and
support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the Meralco, the said land is still
public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section
48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement in Herico (reiterating the well-established and prevailing
doctrine which this Court has not overturned, as it cannot overturn the mandate of the statute that the unchallenged possessor for at least
30 years is "conclusively presumed to have performed all the conditions essential to a government grant") wherein Mr. Justice De Castro
categorically reiterated for the Court that "As interpretated in several cases . . . the possessor is deemed to have acquired, by operation of
law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The and, therefore, ceases to be of
the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the
lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon
the strength of said patent."
In only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous statement
that "the discussion of the question of whether the land involved is still public or already private land, is, however, entirely pointless or an
idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight of, which
provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain'" (at page 2) that "hence, even if the land involved in the present
case is considered private land, the cited section prohibits its acquisition by the Meralco or Iglesia which admittedly are 'corporations or
associations' within the meaning of the aforecited provisions of the New Constitution. This observation should end all arguments of the
issue of whether the land in question is public or private land" (idem) might mislead one to the wrong conclusion that corporations with
60% Filipino ownership may not own private lands when the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself
as well as the counterpart provisions of the 1935 Constitution have always expressly permitted Filipino-owned corporations to own private
lands, and the only change effected in the 1973 Constitution is section 11 which now prohibits even such Filipino corporations to own or
hold lands of the public domain except by lease not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment granting
Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 73002 December 29, 1986

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THE DIRECTOR OF LANDS, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC., ETC., respondents.
D. Nacion Law Office for private respondent.

NARVASA, J.:
The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate Appellate Court affirming a decision of the
Court of First Instance of Isabela, which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring
481, 390 square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat tribe.
The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act No. 141 (The Public Land Act). as
amended: and the appealed judgment sums up the findings of the trial court in said proceedings in this wise:
1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a corporation duly organized in accordance with the laws of
the Republic of the Philippines and registered with the Securities and Exchange Commission on December 23, 1959;
2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can acquire real properties pursuant to the provisions of the
Articles of Incorporation particularly on the provision of its secondary purposes (paragraph (9), Exhibit 'M-l');
3. That the land subject of the Land Registration proceeding was ancestrally acquired by Acme Plywood & Veneer Co., Inc., on October 29,
1962, from Mariano Infiel and Acer Infiel, both members of the Dumagat tribe and as such are cultural minorities;
4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale took place on October 29, 1962;
5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood & Veneer Co., Inc., dates back before the
Philippines was discovered by Magellan as the ancestors of the Infiels have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer Infiel;
6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous, adverse and public from 1962 to the present and
tacking the possession of the Infiels who were granted from whom the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial.
7. That the land sought to be registered is a private land pursuant to the provisions of Republic Act No. 3872 granting absolute ownership to
members of the non-Christian Tribes on land occupied by them or their ancestral lands, whether with the alienable or disposable public
land or within the public domain;
8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five Million (P45,000,000.00) Pesos worth of
improvements, said improvements were seen by the Court during its ocular investigation of the land sought to be registered on September
18, 1982;
9. That the ownership and possession of the land sought to be registered by the applicant was duly recognized by the government when
the Municipal Officials of Maconacon, Isabela, have negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc.,
and this negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer Co., Inc., had donated a part of the land
bought by the Company from the Infiels for the townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was
accepted by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their special session on November 22, 1979.
The Director of Lands takes no issue with any of these findings except as to the applicability of the 1935 Constitution to the matter at hand.
Concerning this, he asserts that, the registration proceedings have been commenced only on July 17, 1981, or long after the 1973
Constitution had gone into effect, the latter is the correctly applicable law; and since section 11 of its Article XIV prohibits private
corporations or associations from holding alienable lands of the public domain, except by lease not to exceed 1,000 hectares (a prohibition
not found in the 1935 Constitution which was in force in 1962 when Acme purchased the lands in question from the Infiels), it was
reversible error to decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No. 141, as amended,
reads:

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SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the
land is located for confirmation of their claims, and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) Members of the National Cultural minorities who by themselves or through their predecessors-in-interest have been in open.
continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights granted in subsection (b) hereof.
The Petition for Review does not dispute-indeed, in view of the quoted findings of the trial court which were cited and affirmed by the
Intermediate Appellate Court, it can no longer controvert before this Court-the fact that Mariano and Acer Infiel, from whom Acme
purchased the lands in question on October 29, 1962, are members of the national cultural minorities who had, by themselves and through
their progenitors, possessed and occupied those lands since time immemorial, or for more than the required 30-year period and were, by
reason thereof, entitled to exercise the right granted in Section 48 of the Public Land Act to have their title judicially confirmed. Nor is there
any pretension that Acme, as the successor-in-interest of the Infiels, is disqualified to acquire and register ownership of said lands under
any provisions of the 1973 Constitution other than Section 11 of its Article XIV already referred to.
Given the foregoing, the question before this Court is whether or not the title that the Infiels had transferred to Acme in 1962 could be
confirmed in favor of the latter in proceedings instituted by it in 1981 when the 1973 Constitution was already in effect, having in mind the
prohibition therein against private corporations holding lands of the public domain except in lease not exceeding 1,000 hectares.
The question turns upon a determination of the character of the lands at the time of institution of the registration proceedings in 1981. If
they were then still part of the public domain, it must be answered in the negative. If, on the other hand, they were then already private
lands, the constitutional prohibition against their acquisition by private corporations or associations obviously does not apply.
In this regard, attention has been invited to Manila Electric Company vs. Castro-Bartolome, et al, 1 where a similar set of facts prevailed. In
that case, Manila Electric Company, a domestic corporation more than 60% of the capital stock of which is Filipino-owned, had purchased in
1947 two lots in Tanay, Rizal from the Piguing spouses. The lots had been possessed by the vendors and, before them, by their predecessorin-interest, Olimpia Ramos, since prior to the outbreak of the Pacific War in 1941. On December 1, 1976, Meralco applied to the Court of
First Instance of Rizal, Makati Branch, for confirmation of title to said lots. The court, assuming that the lots were public land, dismissed the
application on the ground that Meralco, a juridical person, was not qualified to apply for registration under Section 48(b) of the Public Land
Act which allows only Filipino citizens or natural persons to apply for judicial confirmation of imperfect titles to public land. Meralco
appealed, and a majority of this Court upheld the dismissal. It was held that:
..., the said land is still public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen
claiming it under section 48(b). Because it is still public land and the Meralco, as a juridical person, is disqualified to apply for its registration
under section 48(b), Meralco's application cannot be given due course or has to be dismissed.
Finally, it may be observed that the constitutional prohibition makes no distinction between (on the one hand) alienable agricultural public
lands as to which no occupant has an imperfect title and (on the other hand) alienable lands of the public domain as to which an occupant
has on imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make any distinction or qualification. The prohibition applies to alienable
public lands as to which a Torrens title may be secured under section 48(b). The proceeding under section 48(b) 'presupposes that the land
is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).
The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning with Carino in 1909 2 thru Susi in 1925 3 down to
Herico in 1980, 4 which developed, affirmed and reaffirmed the doctrine that open, exclusive and undisputed possession of alienable public
land for the period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite period ipso jure and

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without the need of judicial or other sanction, ceases to be public land and becomes private property. That said dissent expressed what is
the better and, indeed, the correct, view-becomes evident from a consideration of some of the principal rulings cited therein,
The main theme was given birth, so to speak, in Carino involving the Decree/Regulations of June 25, 1880 for adjustment of royal lands
wrongfully occupied by private individuals in the Philippine Islands. It was ruled that:
It is true that the language of articles 4 and 5 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words 'may prove' (acrediten) as well or better,
in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that registration
was expected from all but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law. ...
That ruling assumed a more doctrinal character because expressed in more categorical language, in Susi:
.... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of the public domain openly, continuously,
exclusively and publicly since July 26, 1984, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act.
So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law not only a right to a
grant, but a grant of the Government, for it is not necessary that a certificate of title should be issued in order that said grant may be
sanctioned by the courts, an application therefore is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction,
Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become
private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in
question of Angela Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sale thus made
was void and of no effect, and Angela Razon did not thereby acquire any right. 6
Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs.
Cabanatuan, 9 Miguel vs. Court of Appeals 10 and Herico vs. Dar, supra, by invoking and affirming the Susi doctrine have firmly rooted it in
jurisprudence.
Herico, in particular, appears to be squarely affirmative: 11
.... Secondly, under the provisions of Republic Act No. 1942, which the respondent Court held to be inapplicable to the petitioner's case,
with the latter's proven occupation and cultivation for more than 30 years since 1914, by himself and by his predecessors-in-interest, title
over the land has vested on petitioner so as to segregate the land from the mass of public land. Thereafter, it is no longer disposable under
the Public Land Act as by free patent. ....
xxx xxx xxx
As interpreted in several cases, when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to
have acquired, by operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The
land, therefore, ceases to be of the public domain and beyond the authority of the Director of Lands to dispose of. The application for
confirmation is mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and
the Torrens title to be issued upon the strength of said patent. 12
Nothing can more clearly demonstrate the logical inevitability of considering possession of public land which is of the character and
duration prescribed by statute as the equivalent of an express grant from the State than the dictum of the statute itself 13 that the
possessor(s) "... shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title .... " No proof being admissible to overcome a conclusive presumption, confirmation proceedings would, in truth be
little more than a formality, at the most limited to ascertaining whether the possession claimed is of the required character and length of
time; and registration thereunder would not confer title, but simply recognize a title already vested. The proceedings would not originally
convert the land from public to private land, but only confirm such a conversion already affected by operation of law from the moment the
required period of possession became complete. As was so well put in Carino, "... (T)here are indications that registration was expected
from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof, wherever made,
was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law."

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If it is accepted-as it must be-that the land was already private land to which the Infiels had a legally sufficient and transferable title on
October 29, 1962 when Acme acquired it from said owners, it must also be conceded that Acme had a perfect right to make such
acquisition, there being nothing in the 1935 Constitution then in force (or, for that matter, in the 1973 Constitution which came into effect
later) prohibiting corporations from acquiring and owning private lands.
Even on the proposition that the land remained technically "public" land, despite immemorial possession of the Infiels and their ancestors,
until title in their favor was actually confirmed in appropriate proceedings under the Public Land Act, there can be no serious question of
Acmes right to acquire the land at the time it did, there also being nothing in the 1935 Constitution that might be construed to prohibit
corporations from purchasing or acquiring interests in public land to which the vendor had already acquired that type of so-called
"incomplete" or "imperfect" title. The only limitation then extant was that corporations could not acquire, hold or lease public agricultural
lands in excess of 1,024 hectares. The purely accidental circumstance that confirmation proceedings were brought under the aegis of the
1973 Constitution which forbids corporations from owning lands of the public domain cannot defeat a right already vested before that law
came into effect, or invalidate transactions then perfectly valid and proper. This Court has already held, in analogous circumstances, that
the Constitution cannot impair vested rights.
We hold that the said constitutional prohibition 14 has no retroactive application to the sales application of Binan Development Co., Inc.
because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution
allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner'
prohibition action is barred by the doctrine of vested rights in constitutional law.
xxx xxx xxx
The due process clause prohibits the annihilation of vested rights. 'A state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power'(16 C.J.S. 1177-78).
xxx xxx xxx
In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land
in question had become fixed and established and was no longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from
the public domain. The corporation's right to obtain a patent for the land is protected by law. It cannot be deprived of that right without
due process (Director of Lands vs. CA, 123 Phil. 919).<re||an1w> 15
The fact, therefore, that the confirmation proceedings were instituted by Acme in its own name must be regarded as simply another
accidental circumstance, productive of a defect hardly more than procedural and in nowise affecting the substance and merits of the right
of ownership sought to be confirmed in said proceedings, there being no doubt of Acme's entitlement to the land. As it is unquestionable
that in the light of the undisputed facts, the Infiels, under either the 1935 or the 1973 Constitution, could have had title in themselves
confirmed and registered, only a rigid subservience to the letter of the law would deny the same benefit to their lawful successor-ininterest by valid conveyance which violates no constitutional mandate.
The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling in Meralco must be reconsidered and no longer
deemed to be binding precedent. The correct rule, as enunciated in the line of cases already referred to, is that alienable public land held
by a possessor, personally or through his predecessors-in-interest, openly, continuously and exclusively for the prescribed statutory period
(30 years under The Public Land Act, as amended) is converted to private property by the mere lapse or completion of said period, ipso
jure. Following that rule and on the basis of the undisputed facts, the land subject of this appeal was already private property at the time it
was acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there being at the time no prohibition against said
corporation's holding or owning private land. The objection that, as a juridical person, Acme is not qualified to apply for judicial
confirmation of title under section 48(b) of the Public Land Act is technical, rather than substantial and, again, finds its answer in the dissent
in Meralco:
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error not having filed the application for registration in the name of the Piguing spouses
as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco

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and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and
vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao)
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for
confirmation of title to the private lands so acquired and sold or exchanged.
There is also nothing to prevent Acme from reconveying the lands to the Infiels and the latter from themselves applying for confirmation of
title and, after issuance of the certificate/s of title in their names, deeding the lands back to Acme. But this would be merely indulging in
empty charades, whereas the same result is more efficaciously and speedily obtained, with no prejudice to anyone, by a liberal application
of the rule on amendment to conform to the evidence suggested in the dissent in Meralco.
While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a real sense, it breaks no precedent, but only
reaffirms and re-established, as it were, doctrines the soundness of which has passed the test of searching examination and inquiry in many
past cases. Indeed, it is worth noting that the majority opinion, as well as the concurring opinions of Chief Justice Fernando and Justice
Abad Santos, in Meralco rested chiefly on the proposition that the petitioner therein, a juridical person, was disqualified from applying for
confirmation of an imperfect title to public land under Section 48(b) of the Public Land Act. Reference to the 1973 Constitution and its
Article XIV, Section 11, was only tangential limited to a brief paragraph in the main opinion, and may, in that context, be considered as
essentially obiter. Meralco, in short, decided no constitutional question.
WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate Appellate Court, the same is hereby affirmed,
without costs in this instance.
SO ORDERED.
Feria, Yap, Fernan, Alampay, Cruz, Paras and Feliciano, JJ., concur.

Separate Opinions
GUTIERREZ, JR., J., concurring:
I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:


I am honored by my brethren's judgment at bar that my dissenting opinion in the June, 1982 Meralco and Iglesia ni Cristo cases, 1 which is
herein upheld, "expressed what is the better. . . . and indeed the correct view." My dissent was anchored on the landmark 1909 case of
Carino 2 through the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is established
doctrine....... that an open, continuous, adverse and public possession of a land of the public domain for the period provided in the Public
Land Act provision in force at the time (from July 26, 1894 in Susi under the old law [this period was reduced to 'at least thirty years
immediately preceding the filing of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to
the period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors confers an effective title on said
possessor, whereby the land ceases to be land of the public domain and becomes private property." I hereby reproduce the same by
reference for brevity's sake. But since we are reverting to the old above-cited established doctrine and precedents and discarding the
Meralco and Iglesia ni Cristo cases which departed therefrom in the recent past, I feel constrained to write this concurrence in amplification
of my views and ratio decidendi.

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Under the express text and mandate of the cited Act, such possessors "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. "
The Court thus held in Susi that under the presumption juris et de jure established in the Act, the rightful possessor of the public land for
the statutory period "already acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not
necessary that certificate of title should be issued an order that said grant may be sanctioned by the courts, an application therefore is
sufficient . . . . If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the
public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands [and
beyond his authority to sell to any other person]. " 6
The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the U.S. Supreme Court in the 1909 case of
Carino (the Igorot chief who would have been deprived of ancestral family lands by the dismissal of his application for registration) which
reversed the dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view that under the decree and
regulations of June 25, 1880, "The words 'may prove' (acrediten), as well, or better, in view of the other provisions, might be taken to mean
when called upon to do so in any litigation. There are indications that registration was expected from all, but none sufficient to show that,
for want of it, ownership actually gained would be lost. The effect of the proof, whenever made, was not to confer title, but simply to
establish it, as already conferred by the decree, if not by earlier law."
The Court's decision at bar now expressly overturns the Meralco and related cases subsequent thereto which failed to adhere to the
aforecited established doctrine dating back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco decision was
promulgated). We reaffirm the established doctrine that such acquisitive prescription of alienable public lands takes place ipso jure or by
operation of law without the necessity of a prior issuance of a certificate of title. The land ipso jure ceases to be of the public domain and
becomes private property, which may be lawfully sold to and acquired by qualified corporations such as respondent corporation. (As
stressed in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the
title.")
Such ipso jure conversion into private property of public lands publicly held under a bona fide claim of acquisition or ownership is the public
policy of the Act and is so expressly stated therein. By virtue of such conversion into private property, qualified corporations may lawfully
acquire them and there is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or acquiring title
to lands of the public domain, as claimed in the dissenting opinion, for the simple reason that no public lands are involved.
It should be noted that respondent corporation purchased the land from the Infiels on October 16, 1962 under the aegis of the 1935
Constitution which contained no prohibition against corporations holding public lands (except a limit of 1,024 hectares) unlike the later
1973 Constitution which imposed an absolute prohibition. Even on the erroneous assumption that the land remained public land despite
the Infiels' open possession thereof as owners from time immemorial, respondent corporation's lawful purchase from them of the land in
1962 and P 45million investments redounding presumably to the welfare and progress of the community, particularly the municipality of
Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which could not be impaired by the
prohibition adopted eleven years later. But as sufficiently stressed, the land of the Infiels had been ipso jure converted into private land and
they had a legally sufficient and transferable title conferred by the conclusive presumption of the Public Land Act (which needed only to be
established in confirmation of title proceedings for formalization and issuance of the certificate of title) which they lawfully and validly
transferred to respondent corporation.
In fact, the many amendments to the Act extending the period for the filing of such applications for judicial confirmation of imperfect and
incomplete titles to alienable and disposable public lands expressly reiterate that it has always been the "policy of the State to hasten the
settlement, adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands publicly and notoriously
occupied and cultivated under bona fide claim of acquisition or ownership have ipso jure been converted into private property and grant
the possessors the opportunity to establish and record such fact. Thus, the deadline for the filing of such application which would have
originally expired first on December 31, 1938 was successively extended to December 31, 1941, then extended to December 31, 1957, then
to December 31, 1968, further extended to December 31, 1976 and lastly extended to December 31, 1987. 7
The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in effect a technicality of procedure and
not of substance. My submittal in Meralco, mutatis mutandis, is properly applicable: "The ends of justice would best be served, therefore,
by considering the applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the original persons
who as natural persons are duly qualified to apply for formal confirmation of the title that they had acquired by conclusive presumption
and mandate of the Public Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly
qualified to hold and own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or
exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise dissented along the same line from the majority ruling therein and
held: "I dissent insofar as the opinion of the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical

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person rather than the natural persons-transferors, under the particular circumstances of this case, as an insurmountable obstacle to the
relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao,
where the legal question raised, instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the
exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the application under Section 48(b)
were filed by the Piguing spouses, who I assume suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while
concurring in the procedural result, likewise, in effect dissented from the therein majority ruling on the question of substance, and stated
his opinion that "the lots which are sought to be registered have ceased to be lands of the public domain at the time they were acquired by
the petitioner corporation. They are already private lands because of acquisitive prescription by the predecessors of the petitioner and all
that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private corporation or association may hold
alienable lands of the public domain is inapplicable. " 10
To my mind, the reason why the Act limits the filing of such applications to natural citizens who may prove their undisputed and open
possession of public lands for the required statutory thirty-year period, tacking on their predecessors'-in-interest possession is that only
natural persons, to the exclusion of juridical persons such as corporations, can actually, physically and in reality possess public lands for the
required statutory 30-year period. That juridical persons or corporations cannot do so is obvious. But when the natural persons have
fulfilled the required statutory period of possession, the Act confers on them a legally sufficient and transferable title. It is preferable to
follow the letter of the law that they file the applications for confirmation of their title, although they have lawfully transferred their title to
the land. But such procedural failure cannot and should not defeat the substance of the law, as stressed in the above-cited opinions, that
the lands are already private lands because of acquisitive prescription by the corporation's predecessors and the realistic solution would be
to consider the application for confirmation as filed by the natural persons-transferors, and in accordance with the evidence, confirm their
title to the private lands so converted by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes
the validity of the transfer and sale of the private land to the corporation. It should not be necessary to go in a round-about way and have
the corporation reassign its rights to the private land to natural persons-(as I understand), was done after the decision in the Meralco and
Iglesia ni Cristo cases) just for the purpose of complying on paper with the technicality of having natural persons file the application for
confirmation of title to the private land.

MELENCIO-HERRERA, J., dissenting:


Section 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:
(a) ...
(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed are the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) ...
Article XIV, Section 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 ....
It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation from directly applying to the Courts for
the issuance of Original Certificates of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799;
Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br.
1). It is my opinion that the literalism should be adhered to in this case.
The reasoning of the majority can be restated in simple terms as follows:

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(a) The INFIELS can successfully file an application for a certificate of title over the land involved in the case.
(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.
(c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the Courts for the Certificate of Title, thus
avoiding the circuituous "literal" requirement that the INFIELS should first apply to the courts for the titles, and afterwards transfer the title
to ACME.
The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric Company vs. Castro-Bartolome (114 SCRA
799, 823 [1982]).
To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors,
still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco
and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and
vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor.
It should not be necessary to go through all the rituals at the great cost of refiling of all such applications in their names and adding to the
overcrowded court dockets when the Court can after all these years dispose of it here and now." (Paragraphing supplied)
The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural persons) can apply for certificates of
title under Section 48(b) of the Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which prohibits corporations
from acquiring title to lands of the public domain. That interpretation or construction adopted by the majority cannot be justified. "A
construction adopted should not be such as to nullify, destroy or defeat the intention of the legislature" (New York State Dept. of Social
Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd.,
p. 351).
It has also been said that:
In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective law, and the
legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a general principle that the courts
should, if reasonably possible to do so interpret the statute, or the provision being construed, so as to give it efficient operation and effect
as a whole. An interpretation should, if possible, be avoided, under which the statute or provision being construed is defeated, or as
otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or
nugatory. If a statute is fairly susceptible of two constructions, one of which will give effect to the act, while the other will defeat it, the
former construction is preferred. One part of a statute may not be construed so as to render another part nugatory or of no effect.
Moreover, notwithstanding the general rule against the enlargement of extension of a statute by construction, the meaning of a statute
may be extended beyond the precise words used in the law, and words or phrases may be altered or supplied, where this is necessary to
prevent a law from becoming a nullity. Wherever the provision of a statute is general everything which is necessary to make such provision
effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)
The statutory provision and the constitutional prohibition express a public policy. The proper course for the Court to take is to promote in
the fullest manner the policy thus laid down and to avoid a construction which would alter or defeat that policy.
In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114 SCRA 799 [1982] and related cases.

Separate Opinions
GUTIERREZ, JR., J., concurring:

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I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:


I am honored by my brethren's judgment at bar that my dissenting opinion in the June, 1982 Meralco and Iglesia ni Cristo cases, 1 which is
herein upheld, "expressed what is the better. . . . and indeed the correct view." My dissent was anchored on the landmark 1909 case of
Carino 2 through the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is established
doctrine....... that an open, continuous, adverse and public possession of a land of the public domain for the period provided in the Public
Land Act provision in force at the time (from July 26, 1894 in Susi under the old law [this period was reduced to 'at least thirty years
immediately preceding the filing of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to
the period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors confers an effective title on said
possessor, whereby the land ceases to be land of the public domain and becomes private property." I hereby reproduce the same by
reference for brevity's sake. But since we are reverting to the old above-cited established doctrine and precedents and discarding the
Meralco and Iglesia ni Cristo cases which departed therefrom in the recent past, I feel constrained to write this concurrence in amplification
of my views and ratio decidendi.
Under the express text and mandate of the cited Act, such possessors "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. "
The Court thus held in Susi that under the presumption juris et de jure established in the Act, the rightful possessor of the public land for
the statutory period "already acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not
necessary that certificate of title should be issued an order that said grant may be sanctioned by the courts, an application therefore is
sufficient . . . . If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the
public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands [and
beyond his authority to sell to any other person]. " 6
The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the U.S. Supreme Court in the 1909 case of
Carino (the Igorot chief who would have been deprived of ancestral family lands by the dismissal of his application for registration) which
reversed the dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view that under the decree and
regulations of June 25, 1880, "The words 'may prove' (acrediten), as well, or better, in view of the other provisions, might be taken to mean
when called upon to do so in any litigation. There are indications that registration was expected from all, but none sufficient to show that,
for want of it, ownership actually gained would be lost. The effect of the proof, whenever made, was not to confer title, but simply to
establish it, as already conferred by the decree, if not by earlier law."
The Court's decision at bar now expressly overturns the Meralco and related cases subsequent thereto which failed to adhere to the
aforecited established doctrine dating back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco decision was
promulgated).<re||an1w> We reaffirm the established doctrine that such acquisitive prescription of alienable public lands takes place
ipso jure or by operation of law without the necessity of a prior issuance of a certificate of title. The land ipso jure ceases to be of the public
domain and becomes private property, which may be lawfully sold to and acquired by qualified corporations such as respondent
corporation. (As stressed in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect the legal
sufficiency of the title.")
Such ipso jure conversion into private property of public lands publicly held under a bona fide claim of acquisition or ownership is the public
policy of the Act and is so expressly stated therein. By virtue of such conversion into private property, qualified corporations may lawfully
acquire them and there is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or acquiring title
to lands of the public domain, as claimed in the dissenting opinion, for the simple reason that no public lands are involved.
It should be noted that respondent corporation purchased the land from the Infiels on October 16, 1962 under the aegis of the 1935
Constitution which contained no prohibition against corporations holding public lands (except a limit of 1,024 hectares) unlike the later
1973 Constitution which imposed an absolute prohibition. Even on the erroneous assumption that the land remained public land despite
the Infiels' open possession thereof as owners from time immemorial, respondent corporation's lawful purchase from them of the land in
1962 and P 45million investments redounding presumably to the welfare and progress of the community, particularly the municipality of
Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which could not be impaired by the
prohibition adopted eleven years later. But as sufficiently stressed, the land of the Infiels had been ipso jure converted into private land and
they had a legally sufficient and transferable title conferred by the conclusive presumption of the Public Land Act (which needed only to be

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established in confirmation of title proceedings for formalization and issuance of the certificate of title) which they lawfully and validly
transferred to respondent corporation.
In fact, the many amendments to the Act extending the period for the filing of such applications for judicial confirmation of imperfect and
incomplete titles to alienable and disposable public lands expressly reiterate that it has always been the "policy of the State to hasten the
settlement, adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands publicly and notoriously
occupied and cultivated under bona fide claim of acquisition or ownership have ipso jure been converted into private property and grant
the possessors the opportunity to establish and record such fact. Thus, the deadline for the filing of such application which would have
originally expired first on December 31, 1938 was successively extended to December 31, 1941, then extended to December 31, 1957, then
to December 31, 1968, further extended to December 31, 1976 and lastly extended to December 31, 1987. 7
The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in effect a technicality of procedure and
not of substance. My submittal in Meralco, mutatis mutandis, is properly applicable: "The ends of justice would best be served, therefore,
by considering the applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the original persons
who as natural persons are duly qualified to apply for formal confirmation of the title that they had acquired by conclusive presumption
and mandate of the Public Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly
qualified to hold and own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or
exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise dissented along the same line from the majority ruling therein and
held: "I dissent insofar as the opinion of the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical
person rather than the natural persons-transferors, under the particular circumstances of this case, as an insurmountable obstacle to the
relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao,
where the legal question raised, instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the
exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the application under Section 48(b)
were filed by the Piguing spouses, who I assume suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while
concurring in the procedural result, likewise, in effect dissented from the therein majority ruling on the question of substance, and stated
his opinion that "the lots which are sought to be registered have ceased to be lands of the public domain at the time they were acquired by
the petitioner corporation. They are already private lands because of acquisitive prescription by the predecessors of the petitioner and all
that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private corporation or association may hold
alienable lands of the public domain is inapplicable. " 10
To my mind, the reason why the Act limits the filing of such applications to natural citizens who may prove their undisputed and open
possession of public lands for the required statutory thirty-year period, tacking on their predecessors'-in-interest possession is that only
natural persons, to the exclusion of juridical persons such as corporations, can actually, physically and in reality possess public lands for the
required statutory 30-year period. That juridical persons or corporations cannot do so is obvious. But when the natural persons have
fulfilled the required statutory period of possession, the Act confers on them a legally sufficient and transferable title. It is preferable to
follow the letter of the law that they file the applications for confirmation of their title, although they have lawfully transferred their title to
the land. But such procedural failure cannot and should not defeat the substance of the law, as stressed in the above-cited opinions, that
the lands are already private lands because of acquisitive prescription by the corporation's predecessors and the realistic solution would be
to consider the application for confirmation as filed by the natural persons-transferors, and in accordance with the evidence, confirm their
title to the private lands so converted by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes
the validity of the transfer and sale of the private land to the corporation. It should not be necessary to go in a round-about way and have
the corporation reassign its rights to the private land to natural persons-(as I understand), was done after the decision in the Meralco and
Iglesia ni Cristo cases) just for the purpose of complying on paper with the technicality of having natural persons file the application for
confirmation of title to the private land.

MELENCIO-HERRERA, J., dissenting:


Section 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:
(a) ...

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(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed are the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) ...
Article XIV, Section 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 ....
It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation from directly applying to the Courts for
the issuance of Original Certificates of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799;
Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br.
1). It is my opinion that the literalism should be adhered to in this case.
The reasoning of the majority can be restated in simple terms as follows:
(a) The INFIELS can successfully file an application for a certificate of title over the land involved in the case.
(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.
(c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the Courts for the Certificate of Title, thus
avoiding the circuituous "literal" requirement that the INFIELS should first apply to the courts for the titles, and afterwards transfer the title
to ACME.
The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric Company vs. Castro-Bartolome (114 SCRA
799, 823 [1982]).
To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors,
still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco
and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and
vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor.
It should not be necessary to go through all the rituals at the great cost of refiling of all such applications in their names and adding to the
overcrowded court dockets when the Court can after all these years dispose of it here and now." (Emphasis supplied)
The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural persons) can apply for certificates of
title under Section 48(b) of the Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which prohibits corporations
from acquiring title to lands of the public domain. That interpretation or construction adopted by the majority cannot be justified. "A
construction adopted should not be such as to nullify, destroy or defeat the intention of the legislature" (New York State Dept. of Social
Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd.,
p. 351).
It has also been said that:
In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective law, and the
legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a general principle that the courts
should, if reasonably possible to do so interpret the statute, or the provision being construed, so as to give it efficient operation and effect
as a whole. An interpretation should, if possible, be avoided, under which the statute or provision being construed is defeated, or as

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otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or
nugatory. If a statute is fairly susceptible of two constructions, one of which will give effect to the act, while the other will defeat it, the
former construction is preferred. One part of a statute may not be construed so as to render another part nugatory or of no effect.
Moreover, notwithstanding the general rule against the enlargement of extension of a statute by construction, the meaning of a statute
may be extended beyond the precise words used in the law, and words or phrases may be altered or supplied, where this is necessary to
prevent a law from becoming a nullity. Wherever the provision of a statute is general everything which is necessary to make such provision
effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)
The statutory provision and the constitutional prohibition express a public policy. The proper course for the Court to take is to promote in
the fullest manner the policy thus laid down and to avoid a construction which would alter or defeat that policy.
In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114 SCRA 799 [1982] and related cases.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-44237 February 28, 1989
VICTORIA ONG DE OCSIO, petitioner,
vs.
COURT OF APPEALS and the RELIGIOUS OF THE VIRGIN MARY, represented by M.O. Leoncia Pacquing, R.V.M., respondents.
Elpedio N. Cabasan for petitioner.
Padilla Law Office for private respondent.

NARVASA, J.:
From the adverse judgment of the Court of Appeals, 1 affirming in toto that of the Trial Court, 2 the petitioner has come to this Court on an
appeal by certiorari to plead for reversal of (1) the factual determination that she had sold the lot in controversy to private respondent, and
(2) the legal conclusion that neither the 1973 nor the 1987 Constitution disqualifies the corporation known as the Religious of the Virgin
Mary, from acquiring the land in question and registering it in its name. In light of the time-honored rule that findings of fact of the Court of
Appeals are generally final, and the doctrine lately laid down by this Court on the precise legal issue now raised by petitioner, her appeal
must fail.
The controversy at bar arose in connection with cadastral proceedings initiated by the Director of Lands, in behalf of the Republic, for the
settlement and adjudication of title to a large tract of land measuring 261.5791 hectares, divided into 1,419 lots, situated in the City of
Iligan. 3
Victoria Ong de Ocsio (herein petitioner) seasonably presented an answer to the petition. She alleged that she was the owner, by purchase,
of two (2) parcels of land with specific boundaries comprehended in the cadastral proceeding: Lot No. 1272, measuring 256 square meters,
and Lot 1273 a road lot, measuring 21 square meters; and that as owner, she had been in possession of both lots for fifteen (15) years, and
her predecessors-in-interest, for sixty (60) years. 4 Title to the same parcels of land was however claimed by the Religious of the Virgin
Mary. 5 In its answer, it averred that it had bought the lots from Victoria Ong de Ocsio and had been in possession as owner thereof for
over four years, and its possession and that of its predecessors was immemorial.
Evidence was received on these conflicting assertions after which the Cadastral Court rendered judgment, declaring that the evidence
satisfactorily established that Victoria Ong de Ocsio had in truth sold Lot No. 1272 to the Religious of the Virgin Mary in virtue of a deed of
sale dated April 12, 1956 (Exhibit 1), and Lot No. 1273 was a road right of way granted to the City of Iligan. The judgment contained the
following dispositive portion, viz: 6

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WHEREFORE, the court renders judgment adjudicating Cadastral Lot 1272, Iligan Cadastre, to the Religious of the Virgin Mary, a duly
registered domestic religious corporation, the members of which are all Filipino citizens, with main office in the City of Manila, but the
building existing thereon is hereby declared to be the property of claimant Victoria Ong de Ocsio who is hereby ordered to remove Said
building out of the premises within 90 days from date hereof. The claim of Victoria Ong de Ocsio with respect to said cadastral lot is dismiss.
No pronouncement is made as to costs.
Let the corresponding decree issue 30 days after this decision shall have become final.
As aforestated, the Court of Appeals affirmed the cadastral court's decision in toto. So, too, will this Court.
Both the cadastral Court and the Court of Appeals came to the conclusion, after analysing and weighing the testimonial and documentary
evidence adduced by the parties, that Virginia Ong de Ocsio's version of the facts was not true-that it was another property, not Lot No.
1272, that she had conveyed to the religious corporation but that it was indeed Lot No. 1272 that was subject of the sale and had indeed
been transferred to the latter. Now, findings of fact of this sort, contained in a decision of the Court of Appeals are by long and uniformly
observed rule conclusive on the parties and on the Supreme Court, as well; 7 subject only to a few specified exceptions, 8 none of which
obtains here, said findings may not be reviewed on appeal.
As regards the issue of law raised by her, petitioner fares no better. Citing Manila Electric Co. v. Castro-Bartolome, 114 SCRA 799 (1982) and
Republic v. Villanueva, 114 SCRA 875 (1982), in relation to Section 11, Article XIV of the 1973 Constitution, she asserts that as the private
respondent is a religious corporation, it is disqualified to obtain judicial confirmation of an imperfect title under Section 48(b) of the Public
Land Act which grants that right only to natural persons. The cited rulings no longer control. Current doctrine, first announced by the Court
en banc in Director of Lands v. I.A.C. 146 SCRA 509 (1986), is that open, continuous and exclusive possession of alienable public land for at
least thirty (30) years in accordance with the Public Land Act ipso jure converts the land to private property, and a juridical person who
thereafter acquires the same may have title thereto confirmed in its name. Virtually the same state of facts obtained in said case that now
obtain here. A private corporation had purchased the land originally of the public domain from parties who had, by themselves and through
their predecessors-in-interest, possessed and occupied it since time immemorial. It had thereafter instituted proceedings for confirmation
of title under Section 48(b) of the Public Land Act. In upholding its right to do so, the court held that the fact that the proceedings had been
instituted by said purchaser in its own name and not in the name of the transferors was "xx simply xx (an) accidental circumstance,
productive of a defect hardly more than procedural and in nowise affecting the substance and merits of the right of ownership sought to be
confirmed." The ruling was reaffirmed in two later cases, Director of Lands v. Manila Electric Co., 153 SCRA 686 (September 11, 1987), and
Republic v. C.A., 156 SCRA 344 (October 30, 1987) where the same question of law was raised. In the latter it was expressly held that the
prohibitions in the 1973 and 1987 Constitutions against acquisition or registration of lands by or in behalf of private corporations do not
apply to public lands already converted to private ownership by natural persons under the provisions of the Public Land Act. In the present
case, Virginia Ong de Ocsio and her predecessors-in-interest having possessed Lot No. 1272 for the period and under the conditions
prescribed by law for acquisition of ownership of disposable public land prior to the sale of the property to the Religious of the Virgin Mary,
confirmation of title thereto in the latter's name is, under the precedents referred to, entirely in order.
WHEREFORE, the judgment of the Court of Appeals subject of the petition for review on certiorari is AFFIRMED in toto. Costs against the
petitioner.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 129682

March 21, 2002

NESTOR PAGKATIPUNAN and ROSALINA MAAGAS-PAGKATIPUNAN, petitioners,


vs.
THE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.
YNARES-SANTIAGO, J.:

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This is a petition for review of the decision1 of the Court of Appeals nullifying the decision of the Court of First Instance of Gumaca,
Quezon2 which confirmed petitioners title over the lots subject of the instant petition. Petitioners further seek to annul and set aside the
resolutions3 of the Court of Appeals denying their urgent motion to recall the judgment entered4 in the land registration case.
The antecedent facts are as follows:
Sometime in November 1960, petitioners predecessors-in-interest, spouses Getulio Pagkatipunan and Lucrecia Esquires, filed with the
Court of First Instance of Gumaca, Quezon an application for judicial confirmation and registration of their title to Lots 1 and 2 of Plan Psu174406 and Lots 1 and 2 of Plan Psu-112066, all located in San Narciso, Quezon.5
On May 4, 1961, the Court of First Instance entered an order of default against the whole world, except spouses Felicisimo Almace and
Teodulo Medenilla who were given ten (10) days to file their written opposition as regards Lot No. 2 of Plan Psu-174406. Upon motion of
petitioners predecessors, Lot No. 2 of Plan Psu-174406 was removed from the coverage of the application. The remaining parcel of land
covered by Lot No. 1 has an area of 3,804.261 square meters.
On June 15, 1967, the Court of First Instance promulgated a decision confirming petitioners title to the property. On October 23, 1967, OCT
No. O-12665 was issued in the name of petitioners.1wphi1.nt
Almost eighteen (18) years later, or on September 12, 1985, the Republic of the Philippines filed with the Intermediate Appellate Court an
action to declare the proceedings in LRC Case No. 91-G, LRC Record No. N-19930 before the Court of First Instance of Gumaca, Quezon null
and void, and to cancel Original Certificate of Title No. 0-12665 and titles derived therefrom as null and void, to direct the register of deeds
to annul said certificates of title, and to confirm the subject land as part of the public domain.6
The Republic claimed that at the time of filing of the land registration case and of rendition of the decision on June 15, 1967, the subject
land was classified as timberland under LC Project No. 15-B of San Narciso, Quezon, as shown in BF Map No. LC-1180; hence inalienable and
not subject to registration. Moreover, petitioners title thereto can not be confirmed for lack of showing of possession and occupation of
the land in the manner and for the length of time required by Section 48(b), Commonwealth Act No. 141, as amended. Neither did
petitioners have any fee simple title which may be registered under Act No. 496, as amended. Consequently, the Court of First Instance did
not acquire jurisdiction over the res and any proceedings had therein were null and void.7
On the other hand, petitioners raised the special defenses of indefeasibility of title and res judicata. They argued that due to the lapse of a
considerable length of time, the judgment of the Court of First Instance of Quezon in the land registration case has become final and
conclusive against the Republic. Moreover, the action for reversion of the land to the public domain is barred by prior judgment.8
In a decision promulgated on June 27, 1986, the Intermediate Appellate Court held that the land in question was forestral land; hence not
registrable. There was no evidence on record to show that the land was actually and officially delimited and classified as alienable or
disposable land of the public domain. Therefore, the Court of First Instance did not acquire jurisdiction to take cognizance of the application
for registration and to decide the same. Consequently, the action to declare null and void the June 15, 1967 decision for lack of jurisdiction
did not prescribe. The dispositive portion of the appellate courts decision reads:
WHEREFORE, judgment is rendered in favor of petitioner and against respondents, and as prayed for:
(a) The Decision dated June 15, 1967 in LRC Case No. 91-G, LRC Record No. N-19930 is hereby declared null and void, and accordingly set
aside;
(b) Original Certificate of Title No. O-12665, and Transfer Certificates of Title Nos. T-84439, T-93857 and T-117618 deriving therefrom, as
well as any other derivative titles, are declared null and void;
(c) The respondent Register of Deeds for Quezon Province is ordered to cancel said titles; and
(d) The parcels of land covered thereby are ordered reverted to the State.
Without pronouncement as to costs."9
On July 16, 1986, petitioners moved for the reconsideration of the afore-cited decision10 reiterating that the land in question was
agricultural because it was possessed and cultivated as such long before its classification as timberland by the Bureau of Forestry in 1955.
Petitioners and their predecessors-in-interest have been in open, continuous, exclusive, notorious possession and occupation of said land
for agricultural and cattle raising purposes as far back as the Spanish regime. Following the doctrine in Oracoy v. Director of Lands,11

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private interest had intervened and petitioners acquired vested rights which can no longer be impaired by the subsequent classification of
the land as timberland by the Director of Forestry.
On August 20, 1986, the appellate court denied the motion for reconsideration for lack of merit.12 On December 12, 1986, the decision of
June 27, 1986 attained finality and judgment was entered in the book of entries of judgments.13
On April 2, 1987, petitioners filed an urgent motion to set aside entry of judgment on the ground that Atty. Cirilo E. Doronila, petitioners
counsel of record, was not furnished a copy of the resolution denying the motion for reconsideration.14 In the absence of such notice, the
decision of the appellate court did not become final and executory.
On October 22, 1987, the Court of Appeals set aside and lifted the entry of judgment in CA-G. R. SP No. 07115 and directed the clerk of
court to furnish petitioners counsel a copy of the August 20, 1986 resolution.15
For petitioners inaction despite service of the August 20, 1986 resolution, the June 27, 1986 decision became final and executory. On
March 2, 1988, entry of judgment was again made in the land registration case.
On September 4, 1995, Atty. Doronila withdrew his appearance as counsel for petitioners.16
On April 1, 1996, petitioners, through their new counsel, Atty. George I. Howard, filed with the Court of Appeals an urgent motion to recall
the entry of judgment,17 which was denied by the appellate court on December 16, 1996.18
The motion for reconsideration was likewise denied on the ground that it raised arguments already discussed and resolved in the urgent
motion to recall entry of judgment.19
Hence, the instant petition for review.20
Petitioners claim that their title to the land became incontrovertible and indefeasible one (1) year after issuance of the decree of
registration. Hence, the Republics cause of action was barred by prescription and res judicata, proceedings having been initiated only after
about 18 years from the time the decree of registration was made. Contrary to the appellate courts findings, the land is agricultural and
the inclusion and classification thereof by the Bureau of Forestry in 1955 as timberland can not impair the vested rights acquired by
petitioners predecessors-in-interest who have been in open, continuous, adverse and public possession of the land in question since time
immemorial and for more than thirty (30) years prior to the filing of the application for registration in 1960. Hence, the Court of Appeals
committed grave error when it denied their motion to set aside entry of judgment in the land registration case.
The petition lacks merit.
Unless public land is shown to have been reclassified or alienated to a private person by the State, it remains part of the inalienable public
domain. Occupation thereof in the concept of owner, no matter how long, cannot ripen into ownership and be registered as a title.21
Evidence extant on record showed that at the time of filing of the application for land registration and issuance of the certificate of title
over the disputed land in the name of petitioners, the same was timberland and formed part of the public domain, as per certification
issued by the Bureau of Forest Development on April 1, 1985, thus:
TO WHOM IT MAY CONCERN:
This is to certify that the tract of land situated in Vigo Cantidang, San Narciso, Quezon, containing an area of 3,804.261 square meters as
described in Transfer Certificate of Title No. T-117618 x x x registered in the name of Spouses Nestor E. Pagkatipunan and Rosalina Magas
is verified to be within the Timberland Block -B, Project No. 15-B of San Narciso, Quezon, certified and declared as such on August 25, 1955
per BFD Map LC-1880. The land is, therefore, within the administrative jurisdiction and control of the Bureau of Forest Development, and
not subject to disposition under the Public Land Law.
[Sgd.]ARMANDO CRUZ
Supervising Cartographer22
This fact was even admitted by petitioners during the proceedings before the court a quo on March 10, 1986, when they confirmed that the
land has been classified as forming part of forest land, albeit only on August 25, 1955.23 Since no imperfect title can be confirmed over
lands not yet classified as disposable or alienable, the title issued to herein petitioners is considered void ab initio.24

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Under the Regalian doctrine, all lands of the public domain belong to the State, and the State is the source of any asserted right to
ownership in land and charged with the conservation of such patrimony. This same doctrine also states that all lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State.25 To overcome such presumption, incontrovertible
evidence must be shown by the applicant that the land subject of the application is alienable or disposable.26
In the case at bar, there was no evidence showing that the land has been reclassified as disposable or alienable. Before any land may be
declassified from the forest group and converted into alienable or disposable land for agricultural or other purposes, there must be a
positive act from the government. Even rules on the confirmation of imperfect titles do not apply unless and until the land classified as
forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public
domain.27 Declassification of forest land is an express and positive act of Government.28 It cannot be presumed. Neither should it be
ignored nor deemed waived.29 It calls for proof.30
The court a quo found registrable title in favor of petitioners based on the Republics failure to show that the land is more valuable as forest
land than for agricultural purposes, a finding which is based on a wrong concept of what is forest land.
There is a big difference between "forest" as defined in the dictionary and "forest or timber land" as a classification of land of the public
domain in the Constitution. One is descriptive of what appears on the land while the other is a legal status, a classification for legal
purposes. The "forest land" started out as a "forest" or vast tracts of wooded land with dense growths of trees and underbrush. However,
the cutting down of trees and the disappearance of virgin forest do not automatically convert the land of the public domain from forest or
timber land to alienable agricultural land.31
The classification of forest land, or any land for that matter, is descriptive of its legal nature or status, and does not have to be descriptive
of what the land actually looks like.32 A person cannot enter into forest land and by the simple act of cultivating a portion of that land, earn
credits towards an eventual confirmation of imperfect title. The Government must first declare the forest land to be alienable and
disposable agricultural land before the year of entry, cultivation, and exclusive and adverse possession can be counted for purposes of an
imperfect title.33
As ruled in the case of Heirs of Jose Amunategui v. Director of Forestry:34
A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have
stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin
cultivators or other farmers. "Forest lands" do not have to be on mountains or in out of the way places. Swampy areas covered by
mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The classification is
descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land
classified as "forest" is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the
public domain, the rules on confirmation of imperfect title do not apply.
Moreover, the original text of Section 48 (b), Chapter VIII of the Public Land Act, which took effect on December 1, 1936, expressly provided
that only agricultural land of the public domain are subject to acquisitive prescription, to wit:
Section 48. x x x
(a) x x x
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, except as against the
Government, since July twenty-six, eighteen hundred and ninety-four, except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this Chapter. (Emphasis supplied)
Thus, it is clear that the applicant must prove not only his open, continuous, exclusive and notorious possession and occupation of the land
either since time immemorial or for the period prescribed therein, but most importantly, he must prove that the land is alienable public
land.35 In the case at bar, petitioners failed to do so.
Petitioners contention that the Republic is now barred from questioning the validity of the certificate of title issued to them considering
that it took the government almost eighteen (18) years to assail the same is erroneous. It is a basic precept that prescription does not run
against the State.36 The lengthy occupation of the disputed land by petitioners cannot be counted in their favor, as it remained part of the
patrimonial property of the State, which property, as stated earlier, is inalienable and indisposable.37

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In light of the foregoing, the Court of Appeals did not err when it set aside the June 15, 1967 decision of the court a quo and ordered that
the subject lot be reverted back to the public domain. Since the land in question is unregistrable, the land registration court did not acquire
jurisdiction over the same. Any proceedings had or judgment rendered therein is void and is not entitled to the respect accorded to a valid
judgment.
Consequently, the Court of Appeals rightfully denied petitioners motion to set aside the judgment rendered on December 12, 1986, in the
land registration case.1wphi1.nt
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated June 27, 1986 in AC-G.R. SP No. 07115, is hereby
AFFIRMED in toto.
Without pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., and Kapunan, J., concur.
Puno, J., on official leave.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 127296 January 22, 1998


EDUBIGIS GORDULA, CELSO V. FERNANDEZ, JR., CELSO A. FERNANDEZ, NORA ELLEN ESTRELLADO, DEVELOPMENT BANK OF THE
PHILIPPINES, J.F. FESTEJO AND CO., INC. AND REGISTER OF DEEDS OF LAGUNA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES (represented by the National Power Corporation), respondents.

PUNO, J.:
Before us is a petition to affirm the Decision of the Regional Trial Court, Branch 27, Sta. Cruz, Laguna, which was reversed by the
respondent Court of Appeals in its Decision 1 dated June 20, 1996 in C.A.-G.R. CV No. 45466. Petitioners' Motion for Reconsideration was
denied by respondent court on November 15, 1996. 2
The facts show that on June 26, 1969, former President Ferdinand E. Marcos issued Proclamation No. 573 3 withdrawing from sale and
settlement and setting aside as permanent forest reserves, subject to private rights, certain parcels of the public domain denominated as
follows:
Parcel No. 1. Magat River Forest Reserve
Parcel No. 2 Chico River Forest Reserve
Parcel No. 3 Abulug River Forest Reserve
Parcel No. 4 Penaranda River Forest Reserve
Parcel No. 5 Angat River-Bustos Dam Forest Reserve
Parcel No. 6 Ambayawan River Forest Reserve

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Parcel No. 7 Umiray River Forest Reserve
Parcel No. 8 Kaliwa River Forest Reserve
Parcel No. 9 Caliraya-Lumot River Forest Reserve
Parcel No. 10 Barit River-Lake Buhi Forest Reserve
Parcel No. 11 Jalaur River Forest Reserve
They were primarily for use as watershed area. Their development was to be undertaken by the Bureau of Forestry, with the cooperation
of, among other government agencies, the National Power Corporation (Napocor).
Located in Talaongan, Cavinti, Laguna with an area of Twenty Nine Thousand Seven Hundred Seven (29,707) square meters, and bearing
the following boundaries:
North National Power Corporation
South Road and Baldomero Halili
West National Power Corporation
East National Power Corporation
the parcel of land subject of the case at bar is, by petitioners' explicit admission, 4 within Parcel No. 9, the Caliraya-Lumot River Forest
Reserve.
More than three years after the land was segregated as part of the Caliraya-Lumot River Forest Reserve, or on January 9, 1973, petitioner
Edubigis Gordula, a native of Cavinti, Laguna, filed with the Bureau of Lands, an Application 5 for a Free Patent over the land. Manuel
Fernandez and several others also filed free patent applications covering other parcels of land in the area.
On February 5, 1973, petitioner Gordula declared the land for taxation purposes in his name as shown in Tax Declaration No. 0429.
The Regional Director of the Bureau of Lands referred the free patent applications of petitioner Gordula, Fernandez, and several others to
Mr. Ravanal Ravanzo, then the General Manager of the Napocor. Mr. Ravanzo responded through the following letter:
October 24, 1973
The Director
Regional Lands Office No. IV
757 Gen. Solano St.
San Miguel, Manila
Sir:
This refers to the Free Patent Application[s] of Manuel Fernandez, et al., of Barrio Talaongan, Cavinti, Laguna, which were referred to this
Office for clearance it having been found that they are within the Caliraya-Lumot Watershed Reservation under Proclamation No. 573 dated
June 26, 1969.
Investigation conducted by this Office reveals that applicants have sufficient ground to establish "priority rights" over the areas claimed and
that agricultural improvements introduced thereon are not detrimental to the watershed.
In view thereof, this Office interpose[s] no objection to the application by the applicants contained in your letter dated October 2, 1973.

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Very truly yours,
(Sgd.) R.R. RAVANZO
General Manager
On December 10, 1973, petitioner Gordula had the land surveyed; Survey Plan No. F(IV-5) 949-D under his name was approved by the
Regional Director of the Bureau of Lands. Thereafter, Mr. Amundo Munda, a Land Inspector of the Bureau of Lands, conducted the requisite
investigations.
On January 17, 1974, petitioner Gordula's Application for Free Patent was approved. Free Patent No. 693 was issued in his name.
On January 30, 1974, the Register of Deeds of Laguna issued, on the basis of Free Patent No. 693, Original Certificate of Title No. P-1405 in
the name of petitioner Gordula.
He declared the land anew for taxation purposes under Tax Declaration No. 6498. He paid its real estate taxes from 1975 to 1979.
In the meantime, respondent Republic, through the Napocor, contracted the Certeza Surveying Company to survey the area constituting
the Caliraya-Lumot River Forest Reserve. The survey plans were approved by the Regional Director of the Bureau of Lands on October 27,
1975.
The said survey plans, as well as the Cadastral Map of Talaongan and the Geological Plan of the Caliraya-Lumot River Forest Reserve, show
that petitioner Gordula's land is located in the saddle area of the watershed recreation for the hydro-electric reservoir.
On January 22, 1979, petitioner Gordula sold the land to petitioner Celso V. Fernandez, Jr. for six thousand pesos (P6,000.00). The Register
of Deeds of Laguna cancelled Original Certificate of Title No. P-1405 and issued, in lieu thereof, Transfer Certificate of Title No. T-85445 in
the name of petitioner Fernandez, Jr. The latter declared the land for taxation purposes in his name.
On March 12, 1979, Fernandez, Jr. executed a Deed of Absolute Sale over the land in favor of petitioner Celso A. Fernandez for six thousand
five hundred pesos (P6,500.00). Transfer Certificate of Title No. T-85445 was cancelled and Transfer Certificate of Title No. 85594 was
issued on March 21, 1979 in the name of petitioner Fernandez.
As approved by the Bureau of Lands in Psd-Plan 04-014230, petitioner Fernandez subdivided the land into nine (9) lots. On August 16, 1985,
the Register of Deeds of Laguna issued Transfer Certificates of Title Nos. 102492 to 102500 in his name covering the nine (9) subdivision
lots.
On August 29, 1985, he sold the lots to petitioner Nora Ellen Estrellado for twenty one thousand pesos (P21,000.00). Transfer Certificates of
Title Nos. 102492 to 102500 were cancelled, and in lieu thereof, Transfer Certificates of Title Nos. T-103404 to T-103412 were issued to
petitioner Estrellado.
On October 17, 1986, petitioner Estrellado mortgaged to petitioner Development Bank of the Philippines (DBP) four 6 (4) of the (9) lots.
Another lot, covered by Transfer Certificate of Title No. 103408, was sold to petitioner J.F. Festejo Company, Inc. to whom was issued, in
lieu of the former, Transfer Certificate of Title No. 106495.
On July 16, 1987, former President Corazon Aquino issued Executive Order (E.O.) No. 224 7 vesting in the Napocor "complete jurisdiction,
control and regulation" over the "Caliraya-Lumot Watershed Reservation as covered by Proclamation No. 573".
On July 26, 1987, Mr. Antonio Aquino, Jr., the Civil Security Officer of the Cavinti reservoir complex, sent a Memorandum to the President
of the Napocor informing him of the fences and roads being constructed in the saddle area, more particularly, in the lots sold by petitioner
Fernandez to petitioner Estrellado.
On July 28, 1987, Mr. A. Coronado, the Manager of the Cavinti reservoir complex, asked petitioner Fernandez to remove all the
improvements made in the Estrellado lots. In reply, petitioner Fernandez claimed that the roads being constructed would not adversely
affect the reservoir area in case of heavy floods because the Estrellado lots were elevated at a height of around fifty (50) feet.
In view of petitioner Fernandez's, refusal, the Napocor assigned two (2) security guards over the lot. The guards ordered the construction
workers to leave their posts and barred their return without permission from the Napocor.

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On October 18, 1987, petitioner Fernandez, as attorney-in-fact and counsel of petitioner Estrellado, wrote to the President of the Napocor
threatening to file a multi-million damage suit if the guards were not removed within fifteen (15) days.
On November 18, 1987, respondent Republic, through the Napocor, filed against petitioners a Complaint for Annulment of Free Patent and
Cancellation of Titles and Reversion with Writ of Preliminary Injunction in the RTC of Sta. Cruz, Laguna. 8 On January 29, 1988, the trial
court issued a writ of preliminary injunction upon a bond of one hundred thousand pesos (P100,000.00).
On December 28, 1993, the trial court rendered judgment in favor of petitioners. The dispositive portion of its decision states:
WHEREFORE, judgment is hereby rendered in favor of the defendants and against plaintiff:
(1) Dismissing plaintiff's complaint and dissolving the writ of preliminary injunction issued in this case;
(2) Ordering National Power Corporation to pay defendant Celso A. Fernandez P300,000.00 as actual damages and P30,000.00 as attorney's
fees; and
With costs against the plaintiff.
SO ORDERED. 9
Respondent Republic, through the Napocor, elevated the case to the respondent Court of Appeals.
On June 20, 1996, the respondent Court of Appeals ruled against petitioners. It held, inter alia, viz:
The kernel and primal issue to be resolved by the Court is whether or not Free Patent No. IV-5 (693) and Original Certificate of Title No. P1405 and all derivative titles thereafter issued to the Appellees . . . are null and void. The Appellant avers that the parcel of land covered by
the aforesaid Free Patent issued to Gordula is a portion of the vast track of land reserved by former President Marcos as permanent forest
under Proclamation No. 573 dated June 26, 196[9] . . . and hence, non-disposable and inalienable, pursuant to Section 88 in relation to
Section 83 of Commonwealth Act [No.] 141, as amended. In contrast the Court a quo dismissed Appellant's complaint, in the light of the
exclusionary clause in Proclamation No. 573 . . . that the setting up of the permanent forest reserves over the Caliraya-Lumot Watershed
area was "subject to private rights" if there be any and the letter-clearance of the then General Manager of [Napocor] . . . dated October
24, 1973, interposing no objection to the Application for a free patent of Manuel Fernandez, et al.
xxx xxx xxx
We are convinced, beyond cavil, that the parcel of land subject of the Free Patent issued to Gordula on January 17, 1974 and covered by
Original Certificate of Title No. P-1405 issued on January 30, 1974 . . . as the two (2) parcels of land purportedly purchased by the [Republic]
from Perez and Glorioso in 1941, were public disposable and alienable lands before the issuance, by the former President, of Proclamation
No. 573, on June 26, 196[9] . . . The property was, however, later reserved, under Proclamation No. 573, as a permanent forest, on June 26,
196[9]. Since then, the property became non-disposable and inalienable public land. . . .
xxx xxx xxx
At the time Gordula filed his application for a Free Patent, on January 9, 1973, the parcel of land . . . was already reserved as a permanent
forest under Proclamation No. 573. Since the property was already a forest reservation as of June 26, 196[9], the same could no longer be
disposed of or alienated in favor of private individuals . . . .
xxx xxx xxx
We do not agree with Appellees' and the Court a quo's pose that Gordula's property was exempt from the application of Proclamation No.
573 because, by express provision thereof, the reservation was "subject to private rights, if there be any" . . . .
Appellees failed to adduce proof that, as of June 26, 196[9], Gordula had acquired ownership or title to the aforesaid property either by
deed or by any other mode of acquisition from the State by operation of law for that matter such as for instance, alienable public land held
by a possessor personally, or through his predecessors-in-interest, openly, continuously and exclusively for the prescribed period of thirty
(30) years, is converted into private property by mere lapse of period ipso jure . . . . In the present recourse, Gordula, as of 196[9], had been
in possession of the property for only [twenty-five (25) years] years since 1944 when he commenced, as can be gleaned from his application

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. . . for a free patent, possession of the property. The period of Gordula's occupancy after 196[9] should not be tacked to the period from
1944 because by then the
property was not susceptible of occupancy, disposition, conveyance or alienation. . . .
xxx xxx xxx
The Appellees cannot find refuge in the letter of the then General Manager of [Napocor], Ravanal Ravanzo, on October 24, 1973 . . . .
In the first place, Ravanzo made no explicit and unequivocal statement, in said letter, that Gordula had priority rights to the property. What
he merely declared was that "applicants have sufficient ground to establish priority rights over the areas claimed . . ." . Even if it may be
conceded, for the nonce, that indeed, Ravanzo declared that Gordula had priority rights over the property claimed by him, such declaration
is irrefragably erroneous. Munda and the Director of Lands erred in recommending the approval of Gordula's application in the same
manner that the then Secretary of Agriculture and Natural Resources erred in issuing the patent to Gordula. But then, well-settled is the
doctrine, enunciated by the Supreme Court, in a catena of cases, that the State cannot be bound and estopped by the errors or mistakes of
its agents or officials . . . .
The General Manager of the Appellant is not vested with authority to allow the occupancy or acquisition, by private individuals, of such
properties, whether still needed by the Appellant or not, reserved by the President of the Philippines for permanent forests. Only the
President or [the] Congress, by statutory fiat, can revert the property to the disposable or alienable portion of the public domain.
Anent Appellees' plea that they are buyers of the property in good faith, they must harken to the Decision of the Supreme Court in Republic
of the Philippines vs. Court of Appeals, et al., 148 SCRA 480 that:
. . . even assuming that the transferees are innocent purchasers for value, their titles to said lands derived from the titles of private
respondents which were not validly issued as they cover lands still a part of the public domain, may be cancelled. . . .
We do not agree with Appellees' claim that Appellant's suit was barred by prescription and by the purported indefeasibility of their title.
Prescription, basically, does not run against the State. The right of the State for the reversion of unlawfully acquired property is not barred
by prescription nor by the perceived indefeasibility of Appellees' title for that matter. . . . 10
Thus states the dispositive portion of the decision of respondent appellate court:
IN THE LIGHT OF ALL THE FOREGOING, the assailed Decision is hereby REVERSED and SET ASIDE. Another Decision is hereby rendered as
follows:
1. Free Patent No. IV-5-693 and Original Certificate of Title No. P1405 issued under the name of Edubigis Gordula and all derivative titles
issued to the Appellees are hereby declared null and void;
2. The parcel of land covered by said titles is hereby declared reverted to the Government under the jurisdiction, control and supervision of
the [Napocor] under Executive Order No. 224 of former President Corazon C. Aquino;
3. The Appellees and all those acting for and in their behalf are hereby prohibited from intruding into and disturbing the Appellant of its
possession and dominion of the subject property; [and]
4. Appellees' counterclaims are DISMISSED. No pronouncement as to costs.
SO ORDERED. 11
Hence, this petition anchored on the following grounds:
FIRST
RESPONDENT COURT OF APPEALS ERRED TANTAMOUNT TO LACK OF JURISDICTION WHEN IT CONCLUDED THAT THE SUBJECT LAND IS
WITHIN THE LANDS BOUGHT BY THE NPC EITHER FROM GERONIMO PEREZ ON MARCH 10, 1941 AND/OR FROM CELERINO GLORIOSO ON
SEPTEMBER 26, 1941;
SECOND

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ON [sic] THE LAST PARAGRAPH OF PAGE 19 UP TO PAGE 23, LAST PAGE OF THE DECISION, THE RESPONDENT COURT WENT BEYOND THE
ISSUES OF THE CASE WHICH RESULTED [IN THE] REVERSAL OF THE DECISION OF THE LOWER COURT . . . ;
THIRD
THE FACTUAL FINDINGS AND CONCLUSION OF THE TRIAL COURT ARE IN CONFLICT WITH THE FINDINGS OF THE RESPONDENT COURT
CONCERNING THE ISSUE OF WHETHER OR NOT PETITIONER EDUBIGIS GORDULA HAD ACQUIRED "PRIVATE RIGHTS" ON THE SUBJECT LAND,
WHICH IS AN EXCEPTION UNDER PROCLAMATION NO. 573. HENCE, THIS CASE IS A QUESTION OF FACTS AND OF LAW . . . ;
FOURTH
THERE IS NO QUESTION THAT THE SUBJECT LAND IS WITHIN THE AREA OF PROCLAMATION NO. 573. HOWEVER THE RESPONDENT [COURT]
GRAVELY ERRED TANTAMOUNT TO LACK OF JURISDICTION WHEN IT WENT TO THE EXTENT OF DISCUSSING ON [sic] THE CIRCUMSTANCES
AND INVESTIGATION RELATIVE TO THE ISSUANCE OF THE TITLE TO PETITIONER EDUBIGIS GORDULA AND AFTERWARD DECLARED THAT
GORDULA WHO HAS A TITLE ON THE SUBJECT LAND HAS NOT ACQUIRED "PRIVATE RIGHTS" ON THE LAND DESPITE OF [sic] THE FACT THAT
SAID RESPONDENT COURT IS ALREADY PRECLUDED FROM DISCUSSING THE FACTS RELATIVE ON [sic] THE ISSUANCE OF THE TITLE BY
AUTHORITY OF THE PRESIDENT OF THE PHILIPPINES, MORE SO ITS FINDINGS AND CONCLUSION IS [sic] AGAINST THE LAW, JUSTICE AND
EQUITY. THIS IS AGAINST THE RULING IN ESPINOSA VS. MAKALINTAL, 79 PHIL. 134 and ORTUA VS. SINGSON ENCARNACION, 5[9] PHIL. 440;
and
FIFTH
THE RESPONDENT COURT GRAVELY ERRED IN CONCLUDING THAT THEN GENERAL MANAGER RAVANZO OF NPC AND UNDERSECRETARY OF
AGRICULTURE BY AUTHORITY OF THE PRESIDENT OF THE PHILIPPINES ERRED IN ISSUING THE PATENT TO PETITIONER GORDULA. THIS IS
AGAINST THE RULING IN ESPINOSA VS. MAKALINTAL, 79 PHIL. 134 and ORTUA VS. SINGSON ENCARNACION, 5[9] PHIL. 440. 12
We affirm the Court of Appeals.
We start with the proposition that the sovereign people, represented by their lawfully constituted government, have untrammeled
dominion over the forests on their native soil. Forest lands, being the self-replenishing, versatile and all-important natural resource that
they are, need to be reserved and saved to promote the people's welfare. By their very nature 13 or by executive or statutory fiat, they are
outside the commerce of man, unsusceptible of private appropriation in any form, 14 and inconvertible into any character less than of
inalienable public domain, regardless of their actual state, for as long as the reservation subsists and is not revoked by a subsequent valid
declassification. 15
Once again, we reiterate the rule enunciated by this Court in Director of Forestry vs. Munoz and consistently adhered to in a long line of
cases the more recent of which is Republic vs. Court Appeals, that forest lands or forest reserves are incapable of private appropriation, and
possession thereof, however long, cannot convert them into private properties. This ruling is premised on the Regalian doctrine enshrined
not only in the 1935 and 1973 Constitution but also in the 1987 Constitution. 16
Petitioners do not contest the nature of the land in the case at bar. It is admitted that it lies in the heart of the Caliraya-Lumot River Forest
Reserve, which Proclamation No. 573 classified as inalienable and indisposable. Its control was vested in the NAPOCOR under E.O. No. 224.
Petitioners, however, contend that Proclamation No. 573 itself recognizes private rights of landowners prior to the reservation. They claim
to have established their private rights to the subject land.
We do not agree. No public land can be acquired by private persons without any grant, express or implied from the government; it is
indispensable that there be a showing of the title from the state. 17 The facts show that petitioner Gordula, did not acquire title to the
subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than
three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest
Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good.
Nonetheless, petitioners insist that the term, "private rights", in Proclamation No. 573, should not be interpreted as requiring a title. They
opine that it suffices if the claimant "had occupied and cultivated the property for so may number of years, declared the land for taxation
purposes, [paid] the corresponding real estate taxes [which are] accepted by the government, and [his] occupancy and possession [is]
continuos, open and unmolested and recognized by the government". 18 Prescinding from this premise, petitioners urge that the 25-year
possession by petitioner Gordula from 1944 to 1969, albeit five (5) years short of the 30-year possession required under Commonwealth

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Act (C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula the "private rights" recognized and respected in Proclamation
No. 573.
The case law does not support this submission. In Director of Lands v. Reyes, 19 we held that a settler claiming the protection of "private
rights" to exclude his land from a military or forest reservation must show ". . . by clear and convincing evidence that the property in
question was acquired by [any] . . . means for the acquisition of public lands".
In fine, one claiming "private rights" must prove that he has complied with C. A. No. 141, as amended, otherwise known as the Public Land
Act, which prescribes the substantive as well as the procedural requirements for acquisition of public lands. This law requires at least thirty
(30) years of open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona
fide claim of acquisition, immediately preceding the filing of the application for free patent. The rationale for the 30-year period lies in the
presumption that the land applied for pertains to the State, and that the occupants and/or possessors claim an interest therein only by
virtue of their imperfect title or continuous, open and notorious possession. 20
Indeed, the possession of public agricultural land, however long the period may have extended, never confers title thereto upon the
possessor. 21 The reason, to reiterate our ruling, is because the statute of limitations with regard to public agricultural land does not
operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required
number of years to constitute a grant from the State. 22
In the case at bar, petitioners have failed to comply with the mandatory 30-year period of possession. Their 25-year possession of the land
prior to its reservation as part of the Caliraya-Lumot River Forest Reserve cannot be considered compliance with C.A. No. 141, as amended.
The Court has no authority to lower this requirement for it cannot amend the law.
Next, petitioners contend that their "private rights" have been recognized by the government itself. They point to (1) the letter dated
October 24, 1973 of then NAPOCOR General Manager, Ravanal Ravanzo, (2) the action of the Bureau of Lands which after investigation,
declared him qualified to acquire the land; and (3) the Free Patent issued on January 17, 1974 by the Undersecretary of Agriculture and
Natural Resources, by authority of the President of the Philippines. Petitioners urge that the findings and conclusions of the
aforementioned government agencies and/or officers are conclusive and binding upon the courts, as held in the cases of Ortua v. Singson
Encarnacion 23 and Espinosa v. Makalintal. 24
The submissions are unconvincing.
In the first place, there is nothing in Espinosa v. Makalintal that is relevant to petitioners' claims. On the other hand, our ruling in Ortua v.
Singson Encarnacion that "a decision rendered by the Director of Lands and approved by the Secretary of Agriculture and Commerce, upon
a question of fact is conclusive and not subject to be reviewed by the courts," 25 was made subject to the categorical caveat "in the
absence of a showing that such decision was rendered in consequence of fraud, imposition, or mistake". 26
Undoubtedly, then General Manager Ravanzo erred in holding that petitioner Gordula "ha[d] sufficient ground to establish 'priority rights'
over the areas claimed". This error mothered the subsequent error of the Bureau of Lands which culminated in the erroneous grant of a
free patent on January 17, 1974. The perpetration of these errors does not have the effect of converting a forest reserve into public
alienable land. It is well-settled that forest land is incapable of registration, and its inclusion in a title nullifies that title. 27 To be sure, the
defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the state in an action for reversion of
the land covered thereby when such land is a part of a public forest or of a forest reservation, the patent covering forest land being void ab
initio. 28 Nor can the mistake or error of its officials or agents in this regard be invoked against the government. 29 Finally, the conversion
of a forest reserve into public alienable land, requires no less than a categorical act of declassification by the President, upon the
recommendation of the proper department head who has the authority to classify the lands of the public domain into alienable or
disposable, timber and mineral lands. 30 There is none such in this case.
IN VIEW WHEREOF, the petition is HEREBY DENIED. No costs.
SO ORDERED.
Regalado, Mendoza and Martinez, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

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FIRST DIVISION
G.R. No. 137887

February 28, 2000

REPUBLIC OF THE PHILIPPINES, petitioner,


vs.
DAMIAN ERMITAO DE GUZMAN, DEOGRACIAS ERMITAO DE GUZMAN, ZENAIDA ERMITAO DE GUZMAN, ALICIA ERMITAO DE
GUZMAN, SALVADOR ERMITAO DE GUZMAN, DOMINGA ERMITAO, NATIVIDAD ENCARNACION, MELBA E. TORRES, FLORA MANALO,
SOCORRO DELA ROSA, JOSE ERMITAO, ESMERANDO ERMITAO, TRICOM DEVELOPMENT CORPORATION and FILOMENO ERMITAO,
respondents.
YNARES-SANTIAGO, J.:
Before us is a Petition for Review on Certiorari of a decision of the Court of Appeals 1 affirming the judgment of the Regional Trial Court of
Tagaytay, Branch 18, in LRC Cases No. TG-362 and TG-396.2
The facts are simple:
Conflicting applications for confirmation of imperfect title were filed by Norma Almanzor and private respondent Salvador De Guzman over
parcels of land located in Silang, Cavite. After trial on the merits, the lower court rendered judgment in favor of private respondent De
Guzman, to wit
WHEREFORE, judgment is hereby rendered by this Court as follows:
(1) In LRC Case No. TG-362, this Court hereby denies the application for registration of the parcels of land mentioned therein by applicant
Norma R. Almanzor for lack of factual and legal bases;
(2) In LRC Case No. 396, this Court hereby approves the petition for registration and thus places under the operation of Act 141, Act 946
and/or P.D. 1529, otherwise known as the Property Registration Law, the land described in Plan Psu-67537-Amd-2 and containing an area
of 308,638 square meters, as supported by its technical descriptions now forming parts of the records of these cases, in addition to other
proofs adduced in the names of petitioners Damian Ermitao De Guzman, Deogracias Ermitao De Guzman, Zenaida Ermitao De Guzman,
Alicia Ermitao De Guzman and Salvador De Guzman, all married, of legal age and with residence and postal addresses at Magallanes
Street, Carmona, Cavite, subject to the claims of oppositors Dominga Ermitao, Natividad Encarnacion, Melba E. Torres, Flora Manalo,
Socorro de la Rosa, Jose Ermitao and Esmeranso Ermitao under an instrument entitled "Waiver of Rights with Conformity" the terms and
conditions of which are hereby ordered by this Court to be annotated at the back of the certificates of title to be issued to the petitioners
pursuant to the judgment of this Court.
SO ORDERED.3
As earlier mentioned, on appeal to the Court of Appeals, said judgment was affirmed and the petition for registration of private
respondents over the subject parcels of land was approved.
Hence, the instant Petition, anchored upon the following assignments of error
I
THE TRIAL COURT ERRED IN NOT FINDING THAT THE DE GUZMANS HAVE NOT SUBMITTED PROOF OF THEIR FEE SIMPLE TITLE OR
POSSESSION IN THE MANNER AND FOR THE LENGTH OF TIME REQUIRED BY LAW TO JUSTIFY CONFIRMATION OF AN IMPERFECT TITLE.
II
THE TRIAL COURT ERRED IN NOT DECLARING THAT THE DE GUZMANS HAVE NOT OVERTHROWN THE PRESUMPTION THAT THE LANDS ARE
PORTIONS OF THE PUBLIC DOMAIN BELONGING TO THE REPUBLIC OF THE PHILIPPINES.4
We find merit in the instant Petition.

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It is not disputed that the subject parcels of land were released as agricultural land only in 19655 while the petition for confirmation of
imperfect title was filed by private respondents only in 1991.6 Thus the period of occupancy of the subject parcels of land from 1965 until
the time the application was filed in 1991 was only twenty six (26) years, four (4) years short of the required thirty (30) year period
possession requirement under Sec. 14, P.D. 29 and R.A. No. 6940.
In finding that private respondents' possession of the subject property complied with law, the Court of Appeals reasoned out that
(W)hile it is true that the land became alienable and disposable only in December, 1965, however, records indicate that as early as 1928,
Pedro Ermitao, appellees' predecessor-in-interest, was already in possession of the property, cultivating it and planting various crops
thereon. It follows that appellees' possession as of the time of the filing of the petition in 1991 when tacked to Pedro Ermitao's possession
is 63 years or more than the required 30 years period of possession. The land, which is agricultural, has been converted to private
property.7
We disagree.
The Court of Appeals' consideration of the period of possession prior to the time the subject land was released as agricultural is in direct
contravention of the pronouncement in Almeda vs. Court of Appeals,8 to wit
The Court of Appeals correctly ruled that the private respondents had not qualified for a grant under Section 48(b) of the Public Land Act
because their possession of the land while it was still inalienable forest land, or before it was declared alienable and disposable land of the
public domain on January 13, 1968, could not ripen into private ownership, and should be excluded from the computation of the 30-year
open and continuous possession in concept of owner required under Section 48(b) of Com. Act 141. It accords with our ruling in Director of
Lands vs. Court of Appeals, Ibarra Bishar, et al., 178 SCRA 708, that:
Unless and until the land classified as forest is released in an official proclamation to that effect so that it may form part of the disposable
lands of the public domain, the rules on confirmation of imperfect title do not apply (Amunategui vs. Director of Forestry, 126 SCRA 69;
Director of Lands vs. Court of Appeals, 129 SCRA 689; Director of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs. Court of Appeals,
148 SCRA 480; Vallarta vs. Intermediate Appellate Court, 151 SCRA 679).
Thus possession of forest lands, however long, cannot ripen into private ownership (Vamo vs. Government, 41 Phil. 161 [1920]; Adorable
vs. Director of Forestry, 17 Phil. 410 [1960]). A parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond
the power and jurisdiction of the cadastral court to register under the Torrens System (Republic vs. Court of Appeals, 89 SCRA 648; Republic
vs. Vera, 120 SCRA 210 [1983]; Director of Lands vs. Court of Appeals, 129 SCRA 689 [1984]). (emphasis ours)
So, too, is the Court of Appeals' reliance on the case of Director of Land Management vs. Court of Appeals9 misplaced. There, while the
period of possession of the applicant's predecessor-in-interest was tacked to his own possession to comply with the required thirty year
period possession requirement, the land involved therein was not forest land but alienable public land. On the other hand, in the case
before us, the property subject of private respondents' application was only declared alienable in 1965. Prior to such date, the same was
forest land incapable of private appropriation. It was not registrable and possession thereof, no matter how lengthy, could not convert it
into private property, (unless) and until such lands were reclassified and considered disposable and alienable. 10
In summary, therefore, prior to its declaration as alienable land in 1965, any occupation or possession thereon cannot be considered in the
counting of the thirty year possession requirement. This is in accord with the ruling in Almeda vs. Court of Appeals, (supra), and because
the rules on the confirmation of imperfect titles do not apply unless and until the land classified as forest land is released in an official
proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain. 11
While we acknowledge the Court of Appeals' finding that private respondents and their predecessors-in-interest have been in possession of
the subject land for sixty three (63) years at the time of the application of their petition, our hands are tied by the applicable laws and
jurisprudence in giving practical relief to them. The fact remains that from the time the subject land was declared alienable until the time of
their application, private respondents' occupation thereof was only twenty six (26) years. We cannot consider their thirty seven (37) years
of possession prior to the release of the land as alienable because absent the fact of declassification prior to the possession and cultivation
in good faith by petitioner, the property occupied by him remained classified as forest or timberland, which he could not have acquired by
prescription. Further, jurisprudence is replete with cases which reiterate that forest lands or forest reserves are not capable of private
appropriation and possession thereof, however long, cannot convert them into private property. Possession of the land by private
respondents, whether spanning decades or centuries, could never ripen into ownership. This Court is constrained to abide by the latin
maxim "(d)ura lex, sed lex". 12

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WHEREFORE, the instant Petition is GRANTED and the February 26, 1998 decision of the Court of Appeals in CA-G.R. CV No. 48785 as well
as that of the Regional Trial Court of Cavite, Branch 38, in LRC Case No. TG-396 are both REVERSED. Judgment is rendered dismissing LRC
Case No. 396 for failure of the applicants therein to comply with the thirty year occupancy and possessory requirements of law for
confirmation of imperfect title. No pronouncement as to costs.1wphi1.nt
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 95608 January 21, 1997


SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and CARMEN PALOMO VDA. DE BUENAVENTURA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THE REPUBLIC OF THE PHILIPPINES, FAUSTINO J. PERFECTO, RAFFY SANTILLAN, BOY ARIADO,
LORENZO BROCALES, SALVADOR DOE, and other DOES, respondents.

ROMERO, J.:
The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form part of the "Tiwi Hot Spring National Park."
The facts of the case are as follows.
On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes issued Executive Order No. 40 which reserved
for provincial park purposes some 440,530 square meters of land situated in Barrio Naga, Municipality of Tiwi, Province of Albay pursuant
to the provisions of Act 648 of the Philippine Commission. 1
Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of America, ordered the registration of 15
parcels of land covered by Executive Order No. 40 in the name of Diego Palomo on December 9, 1916; 2 December 28, 3 and January 17,
1917. 4 Diego Palomo donated these parcels of land consisting of 74,872 square meters which were allegedly covered by Original
Certificates of Title Nos. 513, 169, 176 and 173 5 to his heirs, herein petitioners, Ignacio and Carmen Palomo two months before his death
in April 1937. 6
Claiming that the aforesaid original certificates of title were lost during the Japanese occupation, Ignacio Palomo filed a petition for
reconstitution with the Court of First Instance of Albay on May 30, 1950. 7 The Register of Deeds of Albay issued Transfer Certificates of
Title Nos. 3911, 3912, 3913 and 3914 sometime in October 1953. 8
On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area embraced by Executive Order No. 40 into the
"Tiwi Hot Spring National Park," under the control, management, protection and administration of the defunct Commission of Parks and
Wildlife, now a division of the Bureau of Forest Development. The area was never released as alienable and disposable portion of the public
domain and, therefore, is neither susceptible to disposition under the provisions of the Public Land Law (CA 141) nor registrable under the
Land Registration Act (Act No. 496).
The Palomos, however, continued in possession of the property, paid real estate taxes thereon 9 and introduced improvements by planting
rice, bananas, pandan and coconuts. On April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad
Pascual mortgaged the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the
Philippine Islands.
In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual filed Civil Case No. T-143 before
the then Court of First Instance of Albay for Injunction with damages against private respondents Faustino J. Perfecto, Raffy Santillan, Boy
Ariado, Lorenzo Brocales, Salvador Doe and other Does who are all employees of the Bureau of Forest Development who entered the land

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covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally leveling no less than 4 groves worth not less than
P2,000.00.
On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and cancellation of Certificates of Title
involving the 15 parcels of land registered in the name of the petitioners and subject of Civil Case T-143. Impleaded with the petitioners as
defendants were the Bank of the Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.
The case against the Bank of Philippine Islands was dismissed because the loan of P200,000 with the Bank was already paid and the
mortgage in its favor cancelled.
A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties and on July 31, 1986, the trial court rendered the
following decision:
WHEREFORE, premises considered, judgment is hereby rendered:
IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs, dismissing the complaint for injunction and damages, as it is
hereby DISMISSED.
Costs against the plaintiffs.
In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:
(1) Declaring null and void and no force and effect the Order dated September 14, 1953, as well as the Original Certificate of Titles Nos. 153,
10 169, 173 and 176 and Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the Register of Deeds of Albay and all
transactions based on said titles.
(2) Forfeiting in favor of the plaintiff Government any and all improvements on the lands in question that are found therein and introduced
by the defendants;
(3) Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7 8, 9,10, 11 and 12, Plan II-9299 and Lots 1, 21, 11 3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring
National Park;
(4) and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged Original Certificates of Titles Nos. 513, 169, 173 and
176, Transfer Certificates of Title Nos. T-3911, T-3912, T-3913 and T-3914.
Costs against the defendants.
So Ordered. 12
The court a quo in ruling for the Republic found no sufficient proof that the Palomos have established property rights over the parcels of
land in question before the Treaty of Paris which ended the Spanish-American War at the end of the century. The court further stated that
assuming that the decrees of the Court of First Instance of Albay were really issued, the Palomos obtained no right at all over the properties
because these were issued only when Executive Order No. 40 was already in force. At this point, we take note that although the Geodetic
Engineer of the Bureau of Lands appointed as one of the Commissioners in the relocation survey of the properties stated in his reamended
report that of the 3,384 square meters covered by Lot 2, Plan II-9205, only 1,976 square meters fall within the reservation area, 13 the RTC
ordered TCT 3913 covering the entire Lot 21 (sic) Plan II-9205 cancelled.
The petitioners appealed to the Court of Appeals which affirmed in toto the findings of the lower Court; hence this petition raising the
following issues:
1. The respondent Court of Appeals committed grave abuse of discretion in affirming in toto the decision of the lower court.
2. The declaration of nullity of the original certificates of title and subsequent transfer certificates of titles of the petitioners over the
properties in question is contrary to law and jurisprudence on the matter.
3. The forfeiture of all improvements introduced by the petitioners in the premises in favor of the government is against our existing law
and jurisprudence.

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The issues raised essentially boil down to whether or not the alleged original certificate of titles issued pursuant to the order of the Court of
First Instance in 1916-1917 and the subsequent TCTs issued in 1953 pursuant to the petition for reconstitution are valid.
Petitioners contend that the Treaty of Paris which ended the Spanish-American War at the end of the 19th century recognized the property
rights of Spanish and Filipino citizens and the American government had no inherent power to confiscate properties of private citizens and
declare them part of any kind of government reservation. They allege that their predecessors in interest have been in open, adverse and
continuous possession of the subject lands for 20-50 years prior to their registration in 1916-1917. Hence, the reservation of the lands for
provincial purposes in 1913 by then Governor-general Forbes was tantamount to deprivation of private property without due process of
law.
In support of their claim, the petitioners presented copies of a number of decisions of the Court of First Instance of Albay, 15th Judicial
District of the United States of America which state that the predecessors in interest of the petitioners' father Diego Palomo, were in
continuous, open and adverse possession of the lands from 20 to 50 years at the time of their registration in 1916.
We are not convinced.
The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the Treaty of Paris in April 11, 1899, our
lands, whether agricultural, mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. Hence, private
ownership of land could only be acquired through royal concessions which were documented in various forms, such as (1) Titulo Real or
Royal Grant," (2) Concesion Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion Posesoria or Possessory
Information title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889.
Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old Spanish grant. Petitioners
placed much reliance upon the declarations in Expediente No. 5, G.L.R.O. Record Decision No. 9820, dated January 17, 1917; Expediente
No. 6, G.L.R.O. Record No. 9821, dated December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916;
Expediente No. 8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10, G.L.R.O. Record No. 9868, dated December
9, 1916 of the Court of First Instance of Albay, 15th Judicial District of the United States of America presided by Judge Isidro Paredes that
their predecessors in interest were in open, adverse and continuous possession of the subject lands for 20-50 years. 14 The aforesaid
"decisions" of the Court of First Instance, however, were not signed by the judge but were merely certified copies of notification to Diego
Palomo bearing the signature of the clerk of court.
Moreover, despite claims by the petitioners that their predecessors in interest were in open, adverse and continuous possession of the
lands for 20 to 50 years prior to their registration in 1916-1917, the lands were surveyed only in December 1913, the very same year they
were acquired by Diego Palomo. Curiously , in February 1913 or 10 months before the lands were surveyed for Diego Palomo, the
government had already surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners' predecessors in
interest were indeed in possession of the lands for a number of years prior to their registration in 1916-1917, they would have undoubtedly
known about the inclusion of these properties in the reservation in 1913. It certainly is a trifle late at this point to argue that the
government had no right to include these properties in the reservation when the question should have been raised 83 years ago.
As regards the petitioners' contention that inasmuch as they obtained the titles without government opposition, the government is now
estopped from questioning the validity of the certificates of title which were granted. As correctly pointed out by the respondent Court of
Appeals, the principle of estoppel, does not operate against the Government for the act of its agents. 15
Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of appropriation. The adverse
possession which may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of the public
domain.
There is no question that the lands in the case at bar were not alienable lands of the public domain. As testified by the District Forester,
records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject to private
alienation prior to 1913 up to the present. 16 Moreover, as part of the reservation for provincial park purposes, they form part of the forest
zone.
It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registrable and
possession thereof, no matter how lengthy, cannot convert it into private property, 17 unless such lands are reclassified and considered
disposable and alienable.
Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land inasmuch as the weight of authority is
that tax declarations are not conclusive proof of ownership in land registration cases. 18

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Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of improvements introduced on the subject
lands. It bears emphasis that Executive Order No. 40 was already in force at the time the lands in question were surveyed for Diego Palomo.
Petitioners also apparently knew that the subject lands were covered under the reservation when they filed a petition for reconstitution of
the lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of
the Land Registration Office Enrique Altavas in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the Bureau of Lands
dated September 11, 1948 19 contains the following note, "in conflict with provincial reservation." 20 In any case, petitioners are presumed
to know the law and the failure of the government to oppose the registration of the lands in question is no justification for the petitioners
to plead good faith in introducing improvements on the lots.
Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the reservation, TCT 3913 should be annulled
only with respect to the aforesaid area. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-143, 21 were within
the perimeter of the national park, 22 no pronouncement as to damages is in order.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that TCT 3913 be annulled with respect to the
1,976 square meter area falling within the reservation zone.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 130906 February 11, 1999
REPUBLIC OF THE PHILIPPINES represented by the DIRECTOR, LANDS MANAGEMENT BUREAU, petitioner,
vs.
FELIX S. IMPERIAL JR., FELIZA S. IMPERIAL, ELIAS S. IMPERIAL, MIRIAM S. IMPERIAL, LOLITA ALCAZAR, SALVADOR ALCAZAR, EANCRA
CORPORATION, and the REGISTER OF DEEDS of LEGASPI CITY, respondents.

DAVIDE, JR., C.J.:


In this petition for review on certiorari, petitioner seeks to reverse and set aside the (1) Resolution 1 of 30 July 1997 of the Court Appeals in
CA-G.R. CV No. 53972 granting petitioner until 11 August 1997 within which to file its appellant's brief, and the (2) Resolution 2 of 29
September 1997 dismissing petitioner's appeal. The appeal was taken from the Order 3 of Branch I,. Regional Trial Court of Legaspi City in
Civil Case No. 9176, which petitioner instituted to cancel the title to some lots issued to private respondents for the reversion thereof to
the mass of the public domain.
The facts of the case, as found by the trial court, are as follows:
On September 12, 1917, the late Elias Imperial was issued Original. Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of the
then Court of First Instance of Albay, covering a parcel of land identified as Lot No. 1113 of the Cadastral Survey of Legazpi, G.L. Cad. Rec.
No. 88, containing an area of fifty eight thousand and twenty six square meters (58,026), more or less, situated in Legazpi City.
Original Certificate of Title No. 408 (500) was subdivided and further subdivided resulting in the issuance of several titles, which are now
the subject of this case, in the name of the following defendants:
TCT NO. LOT NO. AREA(sq. m.) REGISTERED OWNER
1. 978 1113-M-3 5,853 Ellias S. Imperial
2. 31054 1113-M-4-A 1,200 Felix S. Imperial

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3. 213055 1113-M-4-B 4,653 Felix S. Imperial
4. 35508 1113-M-2-A 1,355 EANCRA CORPORATION
5. 35509 1113-M-2-B 4,518 Feliza S. Imperial
6. 35213 1113-M-1-A 1,500 Lolita Alcazar and
Salvador Alcazar
7. 35214 1113-M-1-B 4,353 Merriam S. Imperial
The plaintiff seeks to judicially declare the transfer certificate of titles described in the preceding paragraphs null and void; to order the said
defendants to surrender the owner's duplicate of their aforesaid titles to the Register of Deeds of Legazpi City and directing [sic] the latter
to cancel them as well as the originals thereof and to declare the reversion of the lots covered by the aforesaid titles to the mass of the
public domain.
In support of its stand, the plaintiff contends among others that on letter request addressed to the Honorable Solicitor General dated
March 20, 1994, residents of Purok No. 1 and Bgy. 24, Legazpi City, represented by Antonio F. Aguilar, requested that Original Certificate of
Title No. 408 (500) in the name of Elias Imperial be canceled and the land covered thereby reverted back to the State on the ground that
the land subject thereof is a foreshore land. Subsequent investigation conducted by the Department of Environment and Natural Resources
(DENR), Region V, Legazpi City, upon the request of the Office of the Solicitor General (OSG) disclosed that OCT No. 408 (500), from whence
the transfer certificate of titles of the defendants were derived is null and void, and was, thus, acquired to the prejudice of the State,
considering that:
a. the parcel of land covered by OCT No. 408 (500) has the features of a foreshore land;
b. natural ground plants such as mangroves and nipas thrive on certain portions of the land in question;
c. some portions of the same land are permanently submerged in seawater even at low tide;
d. some portions of the same land are not anymore inundated by seawater due to the considerable amount of improvements built thereon
and the placing of boulders and other land-filling materials by the actual residents therein.
The plaintiff alleged that consequently on the basis of said findings, the Director, Lands Management Bureau recommended to the Director,
Lands Services, DENR, the cancellation of OCT No. 406 [sic] (500) as well as its derivative titles through appropriate proceedings.
The plaintiff contended that since the land in question is a foreshore land, the same cannot be registered under the Land Registration Act
(Act No. 496, now P.D. No. 1529) in the name of private persons since it is non-alienable and belongs to the public domain, administered
and managed by the State for .the benefit of the general public.
The plaintiff further contended that under Public Land Act No. 141, as amended, such land shall be disposed of to private parties by lease
only and not otherwise as soon as the President upon recommendation of the Secretary of Agriculture and Natural Resources, now DENR,
shall declare that the same are not necessary for public services and are open to disposition.
Within the time for pleading, defendants EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed their answer with cross-claim, while
the rest of the defendants, namely, Felix S. Imperial Jr., Feliza S. Imperial, Elias S. Imperial and Miriam S. Imperial filed a motion to dismiss.
The aforesaid motion to dismiss was anchored on the following grounds: (a) the lands covered by the defendants' transfer certificate of
titles which were derived from OCT No. 408 (500) was already the subject of the cadastral proceedings in 1917 and which has been
implemented by the issuance of OCT No. 408 (500) under the Torrens system.
The adjudication by the cadastral court is binding against the whole world including the plaintiff since cadastral proceedings are in rem and
the government itself through the Director of Lands instituted the proceedings and is a direct and active participant. OCT No. 408 (500)
issued under the Torrens system has long become incontrovertible after the lapse of one year from the entry of decree of registration; (b)
OCT No. 408 (500) was judicially reconstituted in 1953 in accordance with Republic Act [No.] 26 in the then Court of First Instance of Albay,
by Jose R. Imperial Samson in Court Case No. RT-305, entitled. The Director of Lands vs. Jose R. Imperial Samson. The proceedings in the
judicial reconstitution in said case No. RT-305 is one in rem and has long become final and gave rise to res judicata and therefore can no

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longer legally be assailed; (c) the findings of the Director of Lands dated February 22, 1983 [sic] from which no appeal was taken in said
administrative investigation that Lot No. 1113, Cad. 27 and a portion of it covered by Lot No. 1113-M-5 in the name of Jose Baritua cannot
be considered as part of the shore or foreshore of Albay Gulf. This finding of the Director of Lands has become final and thus constitute res
judicata, and finally moving defendants contended that several interrelated cases have been decided related to OCT No. 408 (500),
specifically Civil Cases Nos. 6556, 6885, 6999 and 7104, all of the Regional Trial Court, Legazpi City which have been brought by several
squatters [sic] family against Jose Baritua attacking the latter's title over Lot No. 1113-M-5 which was derived from OCT No. 408 (500)
which cases were all decided in favor of Jose Baritua, hence, the decisions rendered therein have become final and executory and
constitute res judicata.
The plaintiff through the Office of the Solicitor General filed an objection to the motion to dismiss based on the following grounds: (1) the
purported decision issued by the Court of First Instance of Albay in G.R. Cad. Rec. No. 88 supposedly resulting in the issuance of OCT No.
408 (500) pursuant to Decree No. 55173 does not constitute res judicata to the present case; (2) the incontestable and indisputable
character of a Torrens certificate of title does not apply when the land thus covered, like foreshore land, is not capable of registration; (3) a
certificate of title judicially reconstituted from a void certificate of title is, likewise, void; (4) administrative investigation conducted by the
Director of Lands is not a bar to the filing of reversion suits; and (5) the filing of the motion to dismiss carries with it the admission of the
truth of all material facts of the complaint 4
After hearing the motion to dismiss, or on 9 August 1996, the trial court dismissed the complaint on the ground that the judgment
rendered by the cadastral court in G.R. Cad. Rec. No. 88 and our resolution in the petition to quiet title, G.R. No. 85770, both decreed that
the parcel of land covered by OCT No. 408 (500) was not foreshore. The 1917 cadastral proceeding was binding upon the government,
which had initiated the same and had been an active and direct participant thereon. Likewise, the 1982 petition to cancel OCT No. 408
(500) filed by the claimants of Lot No. 1113, Cad-47, and resolved by the Director of Lands in his 22 February 1984 letter 5 to the effect that
"Original Certificate of Title No. 408 (500) 2113 in the name of Elias Imperial and its derivative title[s] were legally issued" was res juridicata
to the instant case. Petitioner's contention that the judicially reconstituted certificate of title was void since the land covered by OCT No.
408 (500) was foreshore land was a mere assumption contrary to existing physical facts. The court further considered as forum shopping
petitioner's attempt to seek a favorable opinion after it was declared in related cases questioning the title of a certain Jose Baritua, which
was also derived from OCT NO. 408(500), that the land in question was foreshore.
On 28 October 1996, petitioner filed a notice of appeal.
On 18 April 1997, the Court of Appeals required petitioner to file its appellant's brief within forty-five (45) days from receipt of the notice.
Petitioner received said notice ten (10) days later, or on 28 April 1997.
Due to the alleged heavy workload of the solicitor assigned to the case, petitioner moved for an extension of thirty (30) days from 12 June
1997, or until 12 July 1997, within which to file the appellant's brief. The Court of Appeals granted petitioner's motion for extension in a
resolution dated 26 June 1997.
On the same ground of continuing heavy pressure of work, petitioner filed, on 12 July 1997, its second motion for extension of thirty (30)
days or 11 August 1997 within which to file the appellant's brief.
On 11 August 1997, petitioner asked for a third extension of thirty (30) days, or until 10 September 1997, within which to file appellant's
brief citing the same ground of heavy pressure of work.
Meanwhile, on 30 July 1997, the Court of Appeals issued a resolution, the full text of which reads:
The Office of the Solicitor General is GRANTED a LAST EXTENSION of thirty (30) days from July 12, 1997, or until August 11, 1997, within
which to file the oppositor-appellant's brief. Failure to file said brief within the said period will mean dismissal of the appeal. 6
On 12 August 1997, petitioner received a copy of the aforesaid resolution.
On 26 August 1997, petitioner moved to reconsider the 30 July 1997 resolution and, despite the appellate court's warning, reiterated its
third motion for extension of another thirty (30) days to file the appellant's brief.
On 10 September 1997, petitioner filed a manifestation and motion requesting another extension of five (5) days, or until 15 September
1997, within which to file appellant's brief, reasoning that the brief, although finalized, was yet to be signed by the Solicitor General.
On 15 September 1997, petitioner filed the required appellant's brief.

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On 29 September 1997, the Court Of Appeals denied petitioner's motion for reconsideration for lack of merit and sustained its Resolution
of 30 July 1997 dismissing the case for failure to file the appellant's brief within the extended period.
Hence, petitioner filed this petition assailing the dismissal of its appeal on purely technical grounds. It alleges that it "has raised meritorious
grounds in support of its appeal which, if not allowed to be laid down before the proper Court, will result to the prejudice of, and
irreparable injury to, public interest, as the Government would lose opportunity to recover what it believes to be non-registrable lands of
the public domain." Minor lapses in adherence to procedural rules should be condoned in order not to frustrate the ends of justice. Thus,
petitioner begs indulgence, enumerating the cases that had occupied its time and attention which prevented the filing of the required brief
within the extended periods granted by the Courts of Appeals.
Petitioner maintains that our resolution of 8 May 1989 in G.R. No. 85770 entitled "Spouses Espiritu v. Baritua" does not constitute res
judicata to the instant case because there is no identity of parties, causes of action, and subject matter between the two cases. The
Supreme Court case was instituted by Spouses Jose and Maura Espiritu and others against Jose Baritua, while the instant case was filed by
no less than the Republic of the Philippines against herein respondents. The former arose from a proceeding to quiet title, while the latter is
an action for reversion.
Anent the "unappealed letter-decision" of the Director of Lands, petitioner contends that the same was "reversible mistake" which did not
bar the filing of a reversion suit, as the government is never estopped by the mistakes of its officials or agents.
Petitioner also argues that the 1953 reconstitution case only involved the restoration of the title which case only involved supposed to have
been lost or destroyed. The issue as to the nature of the land covered by OCT No. 408 (500) was never delved into by the court. Petitioner
insists that the parcels of land in question are foreshore lands, and hence, inalienable and incapable of registration. Consequently, the
certificates of title covering said land are void ab initio.
As regards the trial court's finding of forum shopping, petitioner asserts that the same is without basis. It is the first time that petitioner
instituted an action against herein respondents concerning the lands in. question.
On the other hand, respondents maintain that the dismissal of the appeal for failure to file brief on time was not an abuse of discretion on
the part of the Court of Appeals. Petitioner failed to present special circumstances or good reasons to justify its motions for extension.
Moreover, that the parcels of land involved the 1917 cadastral and 1953 reconstitution proceedings. This finding attained finality through
our resolution in the (G.R. No. 85770), and was further affirmed through the administrative investigation conducted by the Director of
Lands. Thus, the instant case is now barred by res judicata.
We have long observed that the Office of the Solicitor General (OSG) regularly presents motions for extension of time to file pleadings,
taking for granted the court's leniency in granting the same. Instead of contributing to the swift administration of justice as an
instrumentality of the State, the OSG contributes to needless delays in litigation. Despite the numerous cases that need the OSG's time and
attention, equal importance should be allotted to each and every case. Deadlines must be respected and court warnings not taken lightly.
However, after a thorough reexamination of this case, we are of the view that the challenged resolutions should be reconsidered.
The rules of court governing practice and procedure were formulated in order to promote just, speedy, and inexpensive disposition of
every action or proceeding without sacrificing substantial justice and equity considerations. 7
The filing of appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an appeal may be dismissed by the Court of
Appeals on its own motion or on that of the appellee upon failure of the appellant to serve and file the required number of copies of the
brief within the time provided, 8
If the appeal brief cannot be filed on time, extension of time may be allowed provided (1) there is good and sufficient cause, and (2) the
motion for extension is filed before the expiration of the time sought to be extended. 9 The court's liberality on extensions
notwithstanding, lawyers should never presume that their motions for extension would be granted as a matter of course or for the length
of time sought; their concession lies in the sound discretion of the Court exercised in accordance with the attendant circumstances. 10
What constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. The court has the power
to relax or suspend the rules except a case from their operation when compelling reasons so warrant or when the purpose of justice
requires it. 11 Among the reasons which the court allowed in suspending application of the rules on filing an appeal brief were the
following: (1) the cause for the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the
rules; 12 (2) there was no objection from the State, 13 and the brief was filed within the period requested; (3) no material injury was
suffered by the appellee by reason of the delay in filing the brief; 14 (4) the fake lawyer failed to file the brief; 15 (5) appellant was

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represented by counsel de oficio; 16 (6) petitioner's original counsel died; 17 and (7) the preparation of the consolidated brief involved a
comparative study of many exhibits. 18
At the core of the controversy is whether the parcels of land in question are foreshore lands. Foreshore land is a part of the alienable land
of the public domain and may be disposed of only by lease and not otherwise. It was defined as "that part (of the land) which is between
high and low water and left dry by the flux and reflux of the tides." 19 It is also known as "a strip of land that lies between the high and low
water marks and, is alternatively wet and dry according to the flow of the tide." 20
The classification of public lands is a function of the executive branch of government, specifically the director of lands (now the director of
the Lands Management Bureau). The decision of the director of lands when approved by the Secretary of the Department of Environment
and Natural Resources
(DENR) 21 as to questions of fact is conclusive upon the court. The principle behind this ruling is that the subject has been exhaustively
weighed and discussed and must therefore be given credit. This doctrine finds no application, however, when the decision of the director of
lands is revoked by, or in conflict with that of, the DENR Secretary. 22
There is allegedly a conflict between the findings of the Director of Lands and the DENR, Region V, in the present case. Respondents
contend that the Director of Lands found Jose Baritua's land covered by TCT No.18655, which stemmed from OCT 408(500), to be
"definitely outside of the foreshore area." 23 Petitioner, on the other hand, claims that subsequent investigation of the DENR, Region V,
Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence the titles were derived "has the features of a foreshore
land." 24 The contradictory views of the Director of Lands and the DENR, Region V, Legazpi City, on the true nature of the land, which
contradiction was neither discussed nor resolved by the RTC, cannot be the premise of any conclusive classification of the land involved.
The need, therefore, to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands
constitutes good and sufficient cause for relaxing procedural rules and granting the third and fourth motions for extension to file
appellant's brief. Petitioner's appeal presents an exceptional circumstance impressed with public interest and must then be given due
course.
WHEREFORE, the instant petition is hereby GRANTED; the Resolutions of 30 July 1997 and 29 September 1997 of the Court of Appeals are
SET ASIDE; petitioner's appeal is reinstated; and the instant case is REMANDED to the Court of Appeals for further proceedings.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 133250

November 11, 2003

FRANCISCO I. CHAVEZ, petitioner,


vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.
RESOLUTION
CARPIO, J.:
This Court is asked to legitimize a government contract that conveyed to a private entity 157.84 hectares of reclaimed public lands along
Roxas Boulevard in Metro Manila at the negotiated price of P1,200 per square meter. However, published reports place the market price
of land near that area at that time at a high of P90,000 per square meter.1 The difference in price is a staggering P140.16 billion, equivalent
to the budget of the entire Judiciary for seventeen years and more than three times the Marcos Swiss deposits that this Court forfeited in
favor of the government.

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Many worry to death that the private investors will lose their investments, at most not more than one-half billion pesos in legitimate
expenses,2 if this Court voids the contract. No one seems to worry about the more than tens of billion pesos that the hapless Filipino people
will lose if the contract is allowed to stand. There are those who question these figures, but the questions arise only because the private
entity somehow managed to inveigle the government to sell the reclaimed lands without public bidding in patent violation of the
Government Auditing Code.
Fortunately for the Filipino people, two Senate Committees, the Senate Blue Ribbon Committee and the Committee on Accountability of
Public Officers, conducted extensive public hearings to determine the actual market value of the public lands sold to the private entity. The
Senate Committees established the clear, indisputable and unalterable fact that the sale of the public lands is grossly and
unconscionably undervalued based on official documents submitted by the proper government agencies during the Senate investigation.
We quote the joint report of these two Senate Committees, Senate Committee Report No. 560, as approved by the Senate in plenary
session on 27 September 1997:3
The Consideration for the Property
PEA, under the JVA, obligated itself to convey title and possession over the Property, consisting of approximately One Million Five
Hundred Seventy Eight Thousand Four Hundred Forty One (1,578,441) Square Meters for a total consideration of One Billion Eight
Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two Hundred (P1,894,129,200.00) Pesos, or a price of One
Thousand Two Hundred (P1,200.00) Pesos per square meter.
According to the zonal valuation of the Bureau of Internal Revenue, the value of the Property is Seven Thousand Eight Hundred
Pesos (P7,800.00) per square meter. The Municipal Assessor of Paraaque, Metro Manila, where the Property is located, pegs
the market value of the Property at Six Thousand Pesos (P6,000.00) per square meter. Based on these alone, the price at which
PEA agreed to convey the property is a pittance. And PEA cannot claim ignorance of these valuations, at least not those of the
Municipal Assessors office, since it has been trying to convince the Office of the Municipal Assessor of Paraaque to reduce the
valuation of various reclaimed properties thereat in order for PEA to save on accrued real property taxes.
PEAs justification for the purchase price are various appraisal reports, particularly the following:
(1) An appraisal by Vic T. Salinas Realty and Consultancy Services concluding that the Property is worth P500.00 per
square meter for the smallest island and P750.00 per square meter for the two other islands, or a total of P1,170,000.00
as of 22 February 1995;
(2) An appraisal by Valencia Appraisal Corporation concluding that the Property is worth P850 per square meter for
Island I, P800 per square meter for Island II and P600 per square meter for the smallest island, or a total of
P1,289,732,000, also as of 22 February 1995; and
(3) An Appraisal by Asian Appraisal Company, Inc. (AACI), stating that the Property is worth approximately P1,000 per
square meter for Island I, P950 per square meter for Island II and P600 per square meter for Island III, or a total of
P1,518,805,000 as of 27 February 1995.
The credibility of the foregoing appraisals, however, are [sic] greatly impaired by a subsequent appraisal report of AACI stating
that the property is worth P4,500.00 per square meter as of 26 March 1996. Such discrepancies in the appraised value as
appearing in two different reports by the same appraisal company submitted within a span of one year render all such appraisal
reports unworthy of even the slightest consideration. Furthermore, the appraisal report submitted by the Commission on Audit
estimates the value of the Property to be approximately P33,673,000,000.00, or P21,333.07 per square meter.
There were also other offers made for the property from other parties which indicate that the Property has been undervalued by
PEA. For instance, on 06 March 1995, Mr. Young D. See, President of Saeil Heavy Industries Co., Ltd., (South Korea), offered to buy
the property at P1,400.00 and expressed its willingness to issue a stand-by letter of credit worth $10 million. PEA did not consider
this offer and instead finalized the JVA with AMARI. Other offers were made on various dates by Aspac Management and
Development Group Inc. (for P1,600 per square meter), Universal Dragon Corporation (for P1,600 per square meter), Cleene Far
East Manila Incorporated and Hyosan Prime Construction Co. Ltd. which had prepared an Irrevocable Clean Letter of Credit for
P100,000,000.

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In addition, AMARI agreed to pay huge commissions and bonuses to various persons, amounting to P1,596,863,050.00
(P1,754,707,150.00 if the bonus is included), as will be discussed fully below, which indicate that AMARI itself believed the market
value to be much higher than the agreed purchase price. If such commissions are added to the purchase price, AMARIs
acquisition cost for the Property will add-up to P3,490,992,250.00 (excluding the bonus). If AMARI was willing to pay such amount
for the Property, why was PEA willing to sell for only P1,894,129,200.00, making the Government stand to lose approximately
P1,596,863,050.00?
x

Even if we simply assume that the market value of the Property is half of the market value fixed by the Municipal Assessors Office
of Paraaque for lands along Roxas Boulevard, or P3,000.00 per square meter, the Government now stands to lose approximately
P2,841,193,800.00. But an even better assumption would be that the value of the Property is P4,500.00 per square meter, as per
the AACI appraisal report dated 26 March 1996, since this is the valuation used to justify the issuance of P4 billion worth of shares
of stock of Centennial City Inc. (CCI) in exchange for 4,800,000 AMARI shares with a total par value of only P480,000,000.00. With
such valuation, the Governments loss will amount to P5,208,855,300.00.
Clearly, the purchase price agreed to by PEA is way below the actual value of the Property, thereby subjecting the Government
to grave injury and enabling AMARI to enjoy tremendous benefit and advantage. (Emphasis supplied)
The Senate Committee Report No. 560 attached the following official documents from the Bureau of Internal Revenue, the Municipal
Assessor of Paraaque, Metro Manila, and the Commission on Audit:
1. Annex "M," Certified True Copy of BIR Zonal Valuations as certified by Antonio F. Montemayor, Revenue District Officer. This
official document fixed the market value of the 157.84 hectares at P7,800 per square meter.
2. Annex "N," Certification of Soledad S. Medina-Cue, Municipal Assessor, Paraaque, dated 10 December 1996. This official
document fixed the market value at P6,000 per square meter.
3. Exhibit "1-Engr. Santiago," the Appraisal Report of the Commission on Audit. This official document fixed the market value at
P21,333.07 per square meter.
Whether based on the official appraisal of the BIR, the Municipal Assessor or the Commission on Audit, the P1,200 per square meter
purchase price, or a total of P1.894 billion for the 157.84 hectares of government lands, is grossly and unconscionably undervalued. The
authoritative appraisal, of course, is that of the Commission on Audit which valued the 157.84 hectares at P21,333.07 per square meter or a
total of P33.673 billion. Thus, based on the official appraisal of the Commission on Audit, the independent constitutional body that
safeguards government assets, the actual loss to the Filipino people is a shocking P31.779 billion.
This gargantuan monetary anomaly, aptly earning the epithet "Grandmother of All Scams," 4 is not the major defect of this government
contract. The major flaw is not even the P1.754 billion in commissions the Senate Committees discovered the private entity paid to various
persons to secure the contract,5 described in Senate Report No. 560 as follows:
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in behalf of AMARI, on
the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun Siong (a.k.a. Frank
Chua), on the other, sets forth various payments AMARI paid or agreed to pay the aforesaid stockholders by way of fees for
"professional efforts and services in successfully negotiating and securing for AMARI the Joint Venture Agreement", as follows:
Form of Payment

Paid/Payable On

Amount

Managers Checks

28 April 1995

P 400,000,000.00

Managers Checks

Upon signing of letter

262,500,000.00

10 Post Dated Checks (PDCs)

60 days from date of letter

127,000,000.00

24 PDCs

31 Aug. 95 to 31 Jan. 98

150,000,000.00

48 PDCs

Monthly, over a 12-month pd.


from date of letter

357,363,050.00

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Cash bonus

When sale of land begins

not exceeding
157,844,100.00

Developed land from Project

Upon completion of each phase

Costing
300,000,000.00

TOTAL

P1,754,707,150.00
==============

Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was approved by the AMARI
Board.6 (Emphasis supplied)
The private entity that purchased the reclaimed lands for P1.894 billion expressly admitted before the Senate Committees that it spent
P1.754 billion in commissions to pay various individuals for "professional efforts and services in successfully negotiating and securing" the
contract. By any legal or moral yardstick, the P1.754 billion in commissions obviously constitutes bribe money. Nonetheless, there are
those who insist that the billions in investments of the private entity deserve protection by this Court. Should this Court establish a new
doctrine by elevating grease money to the status of legitimate investments deserving of protection by the law? Should this Court reward
the patently illegal and grossly unethical business practice of the private entity in securing the contract? Should we allow those with hands
dripping with dirty money equitable relief from this Court?
Despite these revolting anomalies unearthed by the Senate Committees, the fatal flaw of this contract is that it glaringly violates provisions
of the Constitution expressly prohibiting the alienation of lands of the public domain.
Thus, we now come to the resolution of the second Motions for Reconsideration 7 filed by public respondent Public Estates Authority
("PEA") and private respondent Amari Coastal Bay Development Corporation ("Amari"). As correctly pointed out by petitioner Francisco I.
Chavez in his Consolidated Comment,8 the second Motions for Reconsideration raise no new issues.
However, the Supplement to "Separate Opinion, Concurring and Dissenting" of Justice Josue N. Bellosillo brings to the Courts attention the
Resolutions of this Court on 3 February 1965 and 24 June 1966 in L- 21870 entitled "Manuel O. Ponce, et al. v. Hon. Amador Gomez, et al."
and No. L-22669 entitled "Manuel O. Ponce, et al. v. The City of Cebu, et al." ("Ponce Cases"). In effect, the Supplement to the Dissenting
Opinion claims that these two Resolutions serve as authority that a single private corporation like Amari may acquire hundreds of
hectares of submerged lands, as well as reclaimed submerged lands, within Manila Bay under the Amended Joint Venture Agreement
("Amended JVA").
We find the cited Ponce Cases inapplicable to the instant case.
First, as Justice Bellosillo himself states in his supplement to his dissent, the Ponce Cases admit that "submerged lands still belong to the
National Government."9 The correct formulation, however, is that submerged lands are owned by the State and are inalienable. Section 2,
Article XII of the 1987 Constitution provides:
All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x. (Emphasis supplied)
Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources. Submerged lands are
property of public dominion, absolutely inalienable and outside the commerce of man.10 This is also true with respect to foreshore lands.
Any sale of submerged or foreshore lands is void being contrary to the Constitution. 11
This is why the Cebu City ordinance merely granted Essel, Inc. an "irrevocable option" to purchase the foreshore lands after the reclamation
and did not actually sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the Ponce Cases the option to purchase referred to
reclaimed lands, and not to foreshore lands which are inalienable. Reclaimed lands are no longer foreshore or submerged lands, and thus
may qualify as alienable agricultural lands of the public domain provided the requirements of public land laws are met.
In the instant case, the bulk of the lands subject of the Amended JVA are still submerged lands even to this very day, and therefore
inalienable and outside the commerce of man. Of the 750 hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area
are still submerged, permanently under the waters of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the submerged

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lands even before their actual reclamation, although the documentation of the deed of transfer and issuance of the certificates of title
would be made only after actual reclamation.
The Amended JVA states that the PEA "hereby contributes to the Joint Venture its rights and privileges to perform Rawland Reclamation
and Horizontal Development as well as own the Reclamation Area."12 The Amended JVA further states that "the sharing of the Joint
Venture Proceeds shall be based on the ratio of thirty percent (30%) for PEA and seventy percent (70%) for AMARI." 13 The Amended JVA
also provides that the PEA "hereby designates AMARI to perform PEAs rights and privileges to reclaim, own and develop the Reclamation
Area."14 In short, under the Amended JVA the PEA contributed its rights, privileges and ownership over the Reclamation Area to the Joint
Venture which is 70% owned by Amari. Moreover, the PEA delegated to Amari the right and privilege to reclaim the submerged lands.
The Amended JVA mandates that the PEA had "the duty to execute without delay the necessary deed of transfer or conveyance of the title
pertaining to AMARIs Land share based on the Land Allocation Plan."15 The Amended JVA also provides that "PEA, when requested in
writing by AMARI, shall then cause the issuance and delivery of the proper certificates of title covering AMARIs Land Share in the name of
AMARI, x x x."16
In the Ponce Cases, the City of Cebu retained ownership of the reclaimed foreshore lands and Essel, Inc. only had an "irrevocable option" to
purchase portions of the foreshore lands once actually reclaimed. In sharp contrast, in the instant case ownership of the reclamation area,
including the submerged lands, was immediately transferred to the joint venture. Amari immediately acquired the absolute right to own
70% percent of the reclamation area, with the deeds of transfer to be documented and the certificates of title to be issued upon actual
reclamation. Amaris right to own the submerged lands is immediately effective upon the approval of the Amended JVA and not merely an
option to be exercised in the future if and when the reclamation is actually realized. The submerged lands, being inalienable and outside
the commerce of man, could not be the subject of the commercial transactions specified in the Amended JVA.
Second, in the Ponce Cases the Cebu City ordinance granted Essel, Inc. an "irrevocable option" to purchase from Cebu City not more than
70% of the reclaimed lands. The ownership of the reclaimed lands remained with Cebu City until Essel, Inc. exercised its option to purchase.
With the subsequent enactment of the Government Auditing Code (Presidential Decree No. 1445) on 11 June 1978, any sale of government
land must be made only through public bidding. Thus, such an "irrevocable option" to purchase government land would now be void being
contrary to the requirement of public bidding expressly required in Section 7917 of PD No. 1445. This requirement of public bidding is
reiterated in Section 37918 of the 1991 Local Government Code.19 Obviously, the ingenious reclamation scheme adopted in the Cebu City
ordinance can no longer be followed in view of the requirement of public bidding in the sale of government lands. In the instant case, the
Amended JVA is a negotiated contract which clearly contravenes Section 79 of PD No. 1445.
Third, Republic Act No. 1899 authorized municipalities and chartered cities to reclaim foreshore lands. The two Resolutions in the Ponce
Cases upheld the Cebu City ordinance only with respect to foreshore areas, and nullified the same with respect to submerged areas. Thus,
the 27 June 1965 Resolution made the injunction of the trial court against the City of Cebu "permanent insofar x x x as the area outside or
beyond the foreshore land proper is concerned."
As we held in the 1998 case of Republic Real Estate Corporation v. Court of Appeals,20 citing the Ponce Cases, RA No. 1899 applies only to
foreshore lands, not to submerged lands. In his concurring opinion in Republic Real Estate Corporation, Justice Reynato S. Puno stated that
under Commonwealth Act No. 141, "foreshore and lands under water were not to be alienated and sold to private parties," and that such
lands "remained property of the State." Justice Puno emphasized that "Commonwealth Act No. 141 has remained in effect at present." The
instant case involves principally submerged lands within Manila Bay. On this score, the Ponce Cases, which were decided based on RA No.
1899, are not applicable to the instant case.
Fourth, the Ponce Cases involve the authority of the City of Cebu to reclaim foreshore areas pursuant to a general law, RA No. 1899. The
City of Cebu is a public corporation and is qualified, under the 1935, 1973, and 1987 Constitutions, to hold alienable or even inalienable
lands of the public domain. There is no dispute that a public corporation is not covered by the constitutional ban on acquisition of alienable
public lands. Both the 9 July 2002 Decision and the 6 May 2003 Resolution of this Court in the instant case expressly recognize this.
Cebu City is an end user government agency, just like the Bases Conversion and Development Authority or the Department of Foreign
Affairs.21 Thus, Congress may by law transfer public lands to the City of Cebu to be used for municipal purposes, which may be public or
patrimonial. Lands thus acquired by the City of Cebu for a public purpose may not be sold to private parties. However, lands so acquired by
the City of Cebu for a patrimonial purpose may be sold to private parties, including private corporations.
However, in the instant case the PEA is not an end user agency with respect to the reclaimed lands under the Amended JVA. As we
explained in the 6 May 2003 Resolution:

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PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of the
Department of Environment and Natural Resources ("DENR" for brevity) as the government agency charged with leasing or selling
all reclaimed lands of the public domain. In the hands of PEA, which took over the leasing and selling functions of DENR,
reclaimed foreshore (or submerged lands) lands are public lands in the same manner that these same lands would have been
public lands in the hands of DENR. (Emphasis supplied)
Our 9 July 2002 Decision explained the rationale for treating the PEA in the same manner as the DENR with respect to reclaimed foreshore
or submerged lands in this wise:
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation
of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply
turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still
to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional
ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of
the public domain among Filipinos, now numbering over 80 million strong. (Emphasis supplied)
Finally, the Ponce Cases were decided under the 1935 Constitution which allowed private corporations to acquire alienable lands of the
public domain. However, the 1973 Constitution prohibited private corporations from acquiring alienable lands of the public domain, and
the 1987 Constitution reiterated this prohibition. Obviously, the Ponce Cases cannot serve as authority for a private corporation to acquire
alienable public lands, much less submerged lands, since under the present Constitution a private corporation like Amari is barred from
acquiring alienable lands of the public domain.
Clearly, the facts in the Ponce Cases are different from the facts in the instant case. Moreover, the governing constitutional and statutory
provisions have changed since the Ponce Cases were disposed of in 1965 and 1966 through minute Resolutions of a divided (6 to 5) Court.
This Resolution does not prejudice any innocent third party purchaser of the reclaimed lands covered by the Amended JVA. Neither the PEA
nor Amari has sold any portion of the reclaimed lands to third parties. Title to the reclaimed lands remains with the PEA. As we stated in
our 9 July 2002 Decision:
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly government owned
corporation performing public as well as proprietary functions. No patent or certificate of title has been issued to any private
party. No one is asking the Director of Lands to cancel PEAs patent or certificates of title. In fact, the thrust of the instant petition
is that PEAs certificates of title should remain with PEA, and the land covered by these certificates, being alienable lands of the
public domain, should not be sold to a private corporation.
As we held in our 9 July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution." In our 6
May 2003 Resolution, we DENIED with FINALITY respondents Motions for Reconsideration. Litigations must end some time. It is now time
to write finis to this "Grandmother of All Scams."
WHEREFORE, the second Motions for Reconsideration filed by Public Estates Authority and Amari Coastal Bay Development Corporation
are DENIED for being prohibited pleadings. In any event, these Motions for Reconsideration have no merit. No further pleadings shall be
allowed from any of the parties.
SO ORDERED.
Davide, Jr., C.J., Panganiban, Austria-Martinez, Carpio-Morales, and Callejo, Sr., JJ., concur.
Bellosillo, J., voted to grant reconsideration, pls. see dissenting opinion.
Puno, J., maintains previous qualified opinion.
Vitug, J., pls. see separate(concurring) opinion.
Quisumbing, J., voted to allow reconsideration, see separate opinion.
Ynares-Santiago, Sandoval-Gutierrez, and Corona, JJ., maintains their dissent.
Azcuna, J., no part.
Tinga, J., see dissenting opinion.

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Footnotes
1

See "The Grandmother of All Scams" by Sheila S. Coronel and Ellen Tordesillas, 18-20 March 1998, Philippine Center for
Investigative Journalism. This report won the 1st Prize in the 1998 JVO Investigative Journalism Awards.
2

6 May 2003 Resolution, p. 13.

PEAs Memorandum dated 4 August 1999 quoted extensively, in its Statement of Facts and the Case, the Statement of Facts in
Senate Committee Report No. 560 dated 16 September 1997. Moreover, the existence of this report is a matter of judicial notice
pursuant to Section 1, Rule 129 of the Rules of Court which provides, "A court shall take judicial notice, without the introduction
of evidence, of x x x the official acts of the legislature."
4

9 July 2002 Decision, p. 4.

Senate Committee Report No. 560, p. 48.

A more detailed discussion on this matter in Senate Report No. 560 reads as follows:
The Commissions
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in behalf of
AMARI, on the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun
Siong (a.k.a. Frank Chua), on the other, sets forth various payments AMARI paid or agreed to pay the aforesaid
stockholders by way of fees for "professional efforts and services in successfully negotiating and securing for AMARI the
Joint Venture Agreement", as follows:
Form of Payment

Paid/Payable On

Amount

Managers Checks

28 April 1995

P 400,000,000.00

Managers Checks

Upon signing of letter

262,500,000.00

10 Post Dated Checks (PDCs)

60 days from date of letter

127,000,000.00

24 PDCs

31 Aug. 95 to 31 Jan. 98

150,000,000.00

48 PDCs

Monthly, over a 12-month pd.


from date of letter

357,363,050.00

Cash bonus

When sale of land begins

not exceeding
157,844,100.00

Developed land from Project

Upon completion of each

Costing

Phase

300,000,000.00

TOTAL

P1,754,707,150.00
==============

Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was approved by the
AMARI Board.
On the first payment of P400 million, records show that P300 million was paid in managers checks of Citibank-Makati,
while the balance of P100 million was deposited to the account of the two Chinese in a Hongkong bank. On the basis of a
Memorandum Order dated April 28, 1995 issued by Messrs. Karnasuta and Emmanuel Sy, and upon the instruction of
Messrs. Chin San Cordova and Chua Hun Siong, 31 managers checks in the total amount of P300 million were issued by
Citibank-Makati in favor of a Mr. George Trivio, a Dominican Republic national, broken down as follows:
1) Twenty-nine (29) managers checks at P10 million each;

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2) One (1) managers check at P7 million; and,
One (1) managers check at P3 million.
All these checks were indorsed by Mr. Trivio. Mr. Sy could not satisfactorily answer why Mr. Trivio was made payee of
the Managers Checks when he had nothing to do with the transactions. Neither could he provide information regarding
the said Mr. Trivio.
Mr. Emmanuel Sy admitted signing several blank checks as special request from Messrs. Co and Chua and issuing said
checks as follows:
1) Ten (10) Managers checks dated 60 days from the June 9 letter amounting to P127 million;
2) Twenty-four (24) blank checks amounting to P150 million dated from 31 August 1995 up to 31 January 1998;
and,
3) Forty (40) blank checks amounting to P357 million.
In this regard, the pertinent portion of the 9 June 1995 letter-agreement provides as follows:
"3. Upon signing of this letter-agreement AMARI shall (a) pay to you (in cash in the form of Bank Managers
Checks) the sum of Two Hundred Sixty Two Million Five Hundred Thousand Pesos (Pesos 262,500,000) and (b)
pay and deliver to you the following checks:
"3.1 Ten (10) checks dated sixty (60) days from date of this letter agreement in the total amount of
One Hundred Twenty Seven Million Pesos (Pesos 127,000,000);
"3.2 Twenty-Four (24) checks in the total amount of One Hundred Fifty Million Pesos (Pesos
150,000,000) as follows:
DUE DATE OF CHECK

AMOUNT

August 31, 1995

P 6,250,000

March 31, 1996

6,250,000

April 30, 1996

6,250,000

May 31, 1996

6,250,000

June 30, 1996

6,250,000

July 31, 1996

6,250,000

August 31, 1996

6,250,000

September 30, 1996

6,250,000

October 31, 1996

6,250,000

November 30, 1996

6,250,000

December 31, 1996

6,250,000

January 31, 1997

6,250,000

February 28, 1997

6,250,000

March 31,1997

6,250,000

April 30, 1997

6,250,000

May 31, 1997

6,250,000

June 30, 1997

6,250,000

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July 31, 1997

6,250,000

August 31, 1997

6,250,000

September 30, 1997

6,250,000

October 31, 1997

6,250,000

November 30, 1997

6,250,000

December 31, 1997

6,250,000

January 31, 1998

6,250,000

Total

P150,000,000
==========

"3.3 Forty Eight (48) checks in the total amount of Three Hundred Fifty Seven Million Three Hundred
Sixty Three Thousand Fifty Pesos (Pesos 357,363,050) payable over a period of twelve (12) months as
follows:
"Each monthly payment to consist of Four (4) checks, three (3) checks of which shall each bear the
amount of P7,250,000 and one (1) check of which shall bear the amount of P8,000,000 for a total
monthly amount of P29,750,000. These monthly payment of four (4) checks each shall be dated the
last date of the thirteen, fourteen, fifteen, sixteen, seventeen, eighteen, nineteen, twenty, twentyone, twenty-two, twenty-three, and twenty-four months from the date of this letter agreement. The
last issued check hereunder shall bear the sum of P8,363,050."
The Provisional Receipt shows that Mr. Chin San Cordova and Mr. Chua Hun Siong received the amount of
P896,863,050.00 as of 09 June 1995. Based on the submitted photocopies of the returned checks issued by AMARI vis-avis item 3(b) of the quoted Letter-Agreement, the following persons were made payees: Emmanuel Sy, Manuel Sy, Sy Pio
Lato, International Merchandising and Development Corporation, Golden Star Industrial Corporation, Chin San Cordova,
EY, and Wee Te Lato. Other payments were made payable to Cash (bearer instruments). Each person was thus named
payee to the following amounts:
1. Emmanuel Sy:
Citibank Check No. 000019 dated 10/31/96

P 6,250,000

2. Manuel Sy:
Citibank Check No. 000007 dated 8/8/95

12,700,000

3. Sy Pio Lato:
Citibank Check No. 000008 dated 8/8/95

12,700,000

000009 dated 8/8/95

12,700,000

000010 dated 8/8/95

12,700,000

4. International Merchandising and Development Corporation:


Citibank Check No. 000013 dated 4/30/96

6,250,000

000014 dated 5/31/96

6,250,000

000015 dated 6/30/96

6,250,000

000016 dated 7/31/96

6,250,000

000045 dated 9/30/96

7,250,000

5. Golden Star Industrial Corporation:


Citibank Check No. 000018 dated 9/30/96

6,250,000

6. Chin San Cordova:


Citibank Check No. 000041 dated 8/31/96

7,250,000

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000043 dated 9/30/96

7,250,000

7. EY:
Citibank Check No. 000047 dated 10/31/96

7,250,000

000049 dated 10/31/96

7,250,000

8. Wee Te Lato:
Citibank Check No. 000048 dated 10/31/96

7,250,000

9. Bearer Instruments: CASH:


Citibank Check No. 000001 dated 8/8/95

12,700,000

000002 dated 8/8/95

12,700,000

000003 dated 8/8/95

12,700,000

000004 dated 8/8/95

12,700,000

000005 dated 8/8/95

12,700,000

000006 dated 8/8/95

12,700,000

000012 dated 3/31/96

6,250,000

000017 dated 8/31/96

6,250,000

000039 dated 8/31/96

7,250,000

000040 dated 8/31/96

7,250,000

000042 dated 8/31/95

8,000,000

000044 dated 9/30/96

7,250,000

000046 dated 9/30/96

7,250,000

000050 dated 10/31/96

8,000,000

10. Payees Name Not Legible:


Citibank Check No. 000011 dated 8/31/96

6,250,000

On the other hand, Ms. Aurora Montano, a cousin of Mr. Justiniano Montano IV, was asked by a Mr. Ben Cuevo if she
knew anybody from PEA, and she answered: "Yes, I know Mr. Justiniano Montano IV." For this answer, and for
introducing the AMARI representative to Mr. Montano, she received P10 million in cash and P20 million in postdated
managers checks in the office of Mr. Benito Co and in the presence of, aside from Mr. Benito Co, Mr. Ben Cuevo and Mr.
Frank Chua. Ms. Montano, however, insisted that she actually received only P10 million.
Ms. Montano furthermore admitted that, through Mr. Ben Cuevo, she met Messrs. Chin San Cordova and Chua Hun
Siong in 1994 for this transaction.
In Executive Session, Mr. Ben Cuevo admitted to having encashed two checks at Pilipinas Bank, worth P12.5 million.
According to him, the two checks form part of the P150 million worth of post-dated checks (PDCs), with a face value of
P6.25 million per check, described in the Letter-Agreement. Of this P150 million, Mr. Cuevo actually received five (5)
PDCs worth P31 million, but he was only able to encash 2 checks at P12.5 million.
Still in Executive Session, Mr. Ben Cuevo also admitted receiving a check worth P6.25 million payable to his company,
International Merchandising and Development Corporation. This was deposited in his Current Account No. 604010562-A,
and the amount was transferred by credit memo to Mr. Montano IVs account at Pilipinas Bank.
Mr. Montano IV admitted that he has an account with Pilipinas Bank, but invoked his constitutional right against selfincrimination when asked if he received the amount of P6.25 million transferred to his account. The Pilipinas Bank Credit
Advice dated May 6, 1996, marked as Exhibit 1-Montano IV, indicating the transfer of the amount of P6.25 million was
presented by Senator Drilon. Once or twice, a certain Ms. Polly Tragico accompanied Mr. Montano IV to withdraw funds
from Pilipinas Bank-Pavilion.

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7

Both filed on 26 May 2003. On 6 June 2003 Amari filed a Supplement to its second Motion for Reconsideration.

Filed on 19 August 2003.

Decision dated 17 January 1964 of Judge Amador E. Gomez. Also quoted in Justice Josue N. Bellosillos Supplement to Separate
Opinion, Concurring and Dissenting.
10

Sections 2 and 3, Article XII of the 1987 Constitution.

11

Article 112 , Civil Code of the Philippines.

12

Section 3.2 (a), Amended JVA.

13

Section 3.3 (a), Amended JVA.

14

Section 2.2, Amended JVA.

15

Section 5.2 (c), Amended JVA.

16

Ibid.

17

SECTION 79. Destruction or sale of unserviceable property. When government property has become unserviceable for any
cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the
agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsalable, it
may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the
supervision of the proper committee on awards or similar body in the presence of the auditor concerned or other duly authorized
representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive
days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the
public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.
18

SECTION 379. Property Disposal. When property of any local government unit has become unserviceable for any cause or is
no longer needed, it shall upon application of the officer accountable therefor, be inspected and appraised by the provincial, city
or municipal auditor, as the case may be, or his duly authorized representative or that of the Commission on Audit and, if found
valueless or unusable, shall be destroyed in the presence of the inspecting officer.
If found valuable, the same shall be sold at public auction to the highest bidder under the supervision of the committee on awards
and in the presence of the provincial, city or municipal auditor or his duly authorized representative. Notice of the public auction
shall be posted in at least three (3) publicly accessible and conspicuous places, and if the acquisition cost exceeds One hundred
thousand pesos (P100,000.00) in the case of provinces and cities, and Fifty thousand pesos (P50,000.00) in the case of
municipalities, notice of auction shall be published at least two (2) times within a reasonable period in a newspaper of general
circulation in the locality.
19

Under Section 380 of the 1991 Local Government Code, local governments can sell real property through negotiated sale only
with the approval of the Commission on Audit. Under paragraph 2 (a) of COA Circular No. 89-296, on "Sale Thru Negotiation," a
negotiated sale may be resorted to only if "[T]here was a failure of public auction." The Commission on Audit enforces the express
requirement in Section 79 of the Government Auditing Code that a negotiated sale is possible only after there is a failure of public
auction.
20

359 Phil. 530 (1998).

21

Laurel v. Garcia, G.R. No. 92013, 25 July 1990, 187 SCRA 797.

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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 133250

July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,


vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order. The petition
seeks to compel the Public Estates Authority ("PEA" for brevity) to disclose all facts on PEA's then on-going renegotiations with Amari
Coastal Bay and Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA
from signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract with the Construction and
Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The
contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works
in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked PEA "to
reclaim land, including foreshore and submerged areas," and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."1
On the same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in the foreshore and
offshore of the Manila Bay"2 under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract with CDCP, so that "[A]ll future
works in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated
December 29, 1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as may be agreed upon by the parties, to be
paid according to progress of works on a unit price/lump sum basis for items of work to be agreed upon, subject to price escalation,
retention and other terms and conditions provided for in Presidential Decree No. 1594. All the financing required for such works shall be
provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of PEA, all of the rights, title, interest
and participation of CDCP in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet
been sold, transferred or otherwise disposed of by CDCP as of said date, which areas consist of approximately Ninety-Nine Thousand Four
Hundred Seventy Three (99,473) square meters in the Financial Center Area covered by land pledge No. 5 and approximately Three Million
Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying elevations above
Mean Low Water Level located outside the Financial Center Area and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and transferring to PEA "the parcels of land
so reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register of Deeds of the
Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three reclaimed
islands known as the "Freedom Islands" located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom
Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square meters
or 157.841 hectares.

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On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private corporation, to develop the
Freedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to
complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into
the JVA through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed
the JVA.5 On June 8, 1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate and denounced the JVA as the
"grandmother of all scams." As a result, the Senate Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16, 1997.7 Among the conclusions of their report are: (1) the
reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the government has not classified as
alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of title covering the Freedom Islands are thus void, and
(3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365 creating a Legal Task Force to
conduct a study on the legality of the JVA in view of Senate Committee Report No. 560. The members of the Legal Task Force were the
Secretary of Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal Task Force upheld the
legality of the JVA, contrary to the conclusions reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-going renegotiations between PEA and
AMARI under an order issued by then President Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman
Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of a Temporary
Restraining Order and Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition "for
unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before the proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant Petition for Mandamus with Prayer for
the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. Petitioner contends the government stands to lose
billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the terms of any
renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on the right of the people to
information on matters of public concern. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section
3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private corporations. Finally, petitioner
asserts that he seeks to enjoin the loss of billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and June 25, 1998, respectively.
Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEAAMARI contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral argument. Petitioner filed a
Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to file their respective
memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for brevity). On May 28, 1999, the
Office of the President under the administration of then President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on "constitutional and statutory grounds
the renegotiated contract be declared null and void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;

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IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A
FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS
GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and academic because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a new agreement." The petition
also prays that the Court enjoin PEA from "privately entering into, perfecting and/or executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21, 1999 a copy of the signed
Amended JVA containing the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a
public disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot because PEA
and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the President has approved the Amended
JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and approval of the
Amended JVA before the Court could act on the issue. Presidential approval does not resolve the constitutional issue or remove it from the
ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to moot the petition and
divest the Court of its jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the
Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the meantime PEA and AMARI have signed
one in violation of the Constitution. Petitioner's principal basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII
of the Constitution, which prohibits the government from alienating lands of the public domain to private corporations. If the Amended JVA
indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if already implemented, to annul the effects of
such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and ownership to 367.5 hectares of
reclaimed lands and submerged areas of Manila Bay to a single private corporation. It now becomes more compelling for the Court to
resolve the issue to insure the government itself does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from rendering a decision if there is a grave
violation of the Constitution. In the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent the
transfer of title and ownership of alienable lands of the public domain in the name of AMARI. Even in cases where supervening events had
made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to
guide the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3, Article XII of the 1987
Constitution, or its counterpart provision in the 1973 Constitution,18 covered agricultural lands sold to private corporations which acquired
the lands from private parties. The transferors of the private corporations claimed or could claim the right to judicial confirmation of their
imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant case, AMARI seeks to acquire from PEA,
a public corporation, reclaimed lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084 (charter of PEA)
and Title III of CA No. 141. Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase. Neither
AMARI nor PEA can claim judicial confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or still to
be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and notorious occupation of agricultural lands of
the public domain for at least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial confirmation
of imperfect title expired on December 31, 1987.20

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Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the possible transfer at any time by
PEA to AMARI of title and ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the
latter's seventy percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended JVA even allows AMARI to
mortgage at any time the entire reclaimed area to raise financing for the reclamation project.21
Second issue: whether the petition merits dismissal for failing to observe the principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The principle of hierarchy of courts
applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot entertain cases involving factual issues.
The instant case, however, raises constitutional issues of transcendental importance to the public.22 The Court can resolve this case
without determining any factual issue related to the case. Also, the instant case is a petition for mandamus which falls under the original
jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first asking PEA the
needed information. PEA claims petitioner's direct resort to the Court violates the principle of exhaustion of administrative remedies. It also
violates the rule that mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition for mandamus even if the petitioners
there did not initially demand from the Office of the President the publication of the presidential decrees. PEA points out that in Taada,
the Executive Department had an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act No.
63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in Taada to make an initial demand from the
Office of the President. In the instant case, PEA claims it has no affirmative statutory duty to disclose publicly information about its
renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of administrative remedies to the instant
case in view of the failure of petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under Section 79 of the Government
Auditing Code,26 the disposition of government lands to private parties requires public bidding. PEA was under a positive legal duty to
disclose to the public the terms and conditions for the sale of its lands. The law obligated PEA to make this public disclosure even without
demand from petitioner or from anyone. PEA failed to make this public disclosure because the original JVA, like the Amended JVA, was the
result of a negotiated contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the public
disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies does not apply when the
issue involved is a purely legal or constitutional question.27 The principal issue in the instant case is the capacity of AMARI to acquire lands
held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domain to private corporations. We rule that
the principle of exhaustion of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to information without a
showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that petitioner has not
shown that he will suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus, there is no actual
controversy requiring the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to comply with its constitutional duties.
There are two constitutional issues involved here. First is the right of citizens to information on matters of public concern. Second is the
application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly information on the sale of government lands worth billions of
pesos, information which the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent PEA from
alienating hundreds of hectares of alienable lands of the public domain in violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,28 the Court upheld the right of a
citizen to bring a taxpayer's suit on matters of transcendental importance to the public, thus -

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"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is an issue of 'transcendental importance to
the public.' He asserts that ordinary taxpayers have a right to initiate and prosecute actions questioning the validity of acts or orders of
government agencies or instrumentalities, if the issues raised are of 'paramount public interest,' and if they 'immediately affect the social,
economic and moral well being of the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the proceeding involves the assertion of a
public right, such as in this case. He invokes several decisions of this Court which have set aside the procedural matter of locus standi, when
the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the object of mandamus is to obtain the
enforcement of a public duty, the people are regarded as the real parties in interest; and because it is sufficient that petitioner is a citizen
and as such is interested in the execution of the laws, he need not show that he has any legal or special interest in the result of the action.
In the aforesaid case, the petitioners sought to enforce their right to be informed on matters of public concern, a right then recognized in
Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to be valid and enforceable must be published
in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court declared that the right
they sought to be enforced 'is a public right recognized by no less than the fundamental law of the land.'
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a mandamus proceeding involves the assertion of
a public right, the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general 'public' which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been involved under the questioned contract for
the development, management and operation of the Manila International Container Terminal, 'public interest [was] definitely involved
considering the important role [of the subject contract] . . . in the economic development of the country and the magnitude of the financial
consideration involved.' We concluded that, as a consequence, the disclosure provision in the Constitution would constitute sufficient
authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and access to official records, documents and papers
a right guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal standing, i.e. (1) the enforcement of a
public right (2) espoused by a Filipino citizen, we rule that the petition at bar should be allowed."
We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional rights - to information and to the
equitable diffusion of natural resources - matters of transcendental public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official information on on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of public concern in this manner:
"Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to
documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as may be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest reinforces the people's right to information on matters of
public concern. This State policy is expressed in Section 28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its
transactions involving public interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well
as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are essential to the
exercise of freedom of expression. If the government does not disclose its official acts, transactions and decisions to citizens, whatever
citizens say, even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are also essential to
hold public officials "at all times x x x accountable to the people,"29 for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can participate in public discussions leading to the formulation

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of government policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of any
democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30
"An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and
the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may
perceive and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and
thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is limited to "definite propositions of
the government." PEA maintains the right does not include access to "intra-agency or inter-agency recommendations or communications
during the stage when common assertions are still in the process of being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transaction. To support
its contention, AMARI cites the following discussion in the 1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts, agreements, or treaties or whatever, does the
Gentleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover both steps leading to a contract and already a
consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring government officials to reveal
their deliberations at the pre-decisional stage will degrade the quality of decision-making in government agencies. Government officials will
hesitate to express their real sentiments during deliberations if there is immediate public dissemination of their discussions, putting them
under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose publicly, and information the
constitutional right to information requires PEA to release to the public. Before the consummation of the contract, PEA must, on its own
and without demand from anyone, disclose to the public matters relating to the disposition of its property. These include the size, location,
technical description and nature of the property being disposed of, the terms and conditions of the disposition, the parties qualified to bid,
the minimum price and similar information. PEA must prepare all these data and disclose them to the public at the start of the disposition
process, long before the consummation of the contract, because the Government Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken by the bidding or review committee is not
immediately accessible under the right to information. While the evaluation or review is still on-going, there are no "official acts,
transactions, or decisions" on the bids or proposals. However, once the committee makes its official recommendation, there arises a
"definite proposition" on the part of the government. From this moment, the public's right to information attaches, and any citizen can
access all the non-proprietary information leading to such definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG and its officers, as well as other
government representatives, to disclose sufficient public information on any proposed settlement they have decided to take up with the
ostensible owners and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of the government, not
necessarily to intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the
process of being formulated or are in the "exploratory" stage. There is need, of course, to observe the same restrictions on disclosure of
information in general, as discussed earlier such as on matters involving national security, diplomatic or foreign relations, intelligence and
other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood that the right to information
"contemplates inclusion of negotiations leading to the consummation of the transaction." Certainly, a consummated contract is not a

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requirement for the exercise of the right to information. Otherwise, the people can never exercise the right if no contract is consummated,
and if one is consummated, it may be too late for the public to expose its defects.1wphi1.nt
Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageous to the
government or even illegal, becomes a fait accompli. This negates the State policy of full transparency on matters of public concern, a
situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citizenry from participating in
the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an
emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full disclosure of all its transactions involving public
interest."
The right covers three categories of information which are "matters of public concern," namely: (1) official records; (2) documents and
papers pertaining to official acts, transactions and decisions; and (3) government research data used in formulating policies. The first
category refers to any document that is part of the public records in the custody of government agencies or officials. The second category
refers to documents and papers recording, evidencing, establishing, confirming, supporting, justifying or explaining official acts,
transactions or decisions of government agencies or officials. The third category refers to research data, whether raw, collated or
processed, owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations, legal and expert
opinions, minutes of meetings, terms of reference and other documents attached to such reports or minutes, all relating to the JVA.
However, the right to information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of
the JVA.34 The right only affords access to records, documents and papers, which means the opportunity to inspect and copy them. One
who exercises the right must copy the records, documents and papers at his expense. The exercise of the right is also subject to reasonable
regulations to protect the integrity of the public records and to minimize disruption to government operations, like rules specifying when
and how to conduct the inspection and copying.35
The right to information, however, does not extend to matters recognized as privileged information under the separation of powers.36 The
right does not also apply to information on military and diplomatic secrets, information affecting national security, and information on
investigations of crimes by law enforcement agencies before the prosecution of the accused, which courts have long recognized as
confidential.37 The right may also be subject to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation of powers. The
information does not cover Presidential conversations, correspondences, or discussions during closed-door Cabinet meetings which, like
internal deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house of Congress,38 are recognized
as confidential. This kind of information cannot be pried open by a co-equal branch of government. A frank exchange of exploratory ideas
and assessments, free from the glare of publicity and pressure by interested parties, is essential to protect the independence of decisionmaking of those tasked to exercise Presidential, Legislative and Judicial power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on on-going negotiations before a final
contract. The information, however, must constitute definite propositions by the government and should not cover recognized exceptions
like privileged information, military and diplomatic secrets and similar matters affecting national security and public order.40 Congress has
also prescribed other limitations on the right to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be reclaimed, violate the
Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns
all lands and waters of the public domain. Upon the Spanish conquest of the Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler and representative of the people, acquired
and owned all lands and territories in the Philippines except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in lieu of the King, as the owner of
all lands and waters of the public domain. The Regalian doctrine is the foundation of the time-honored principle of land ownership that "all
lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain."43 Article 339 of the Civil
Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands

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The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands in the
Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874,
the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. On
November 7, 1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land Act, which authorized the
lease, but not the sale, of reclaimed lands of the government to corporations and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime zone of the Spanish territory
belonged to the public domain for public use.44 The Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5,
which provided as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons,
with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the
grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation, provided the
government issued the necessary permit and did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores,
roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of general public use, is employed in some public service, or in the
development of the national wealth, such as walls, fortresses, and other works for the defense of the territory, and mines, until granted to
private individuals."
Property devoted to public use referred to property open for use by the public. In contrast, property devoted to public service referred to
property used for some specific public service and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but also to property not so used but employed to develop
the national wealth. This class of property constituted property of public dominion although employed for some economic or commercial
activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territory, shall become a part of the
private property of the State."
This provision, however, was not self-executing. The legislature, or the executive department pursuant to law, must declare the property no
longer needed for public use or territorial defense before the government could lease or alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and foreshore lands. The salient
provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the Government
without prejudice to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta Extension.

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Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the Government by dredging or
filling or otherwise to be divided into lots or blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
plans of such surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such parts of the lands so made or
reclaimed as are not needed for public purposes will be leased for commercial and business purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to such regulations and safeguards
as the Governor-General may by executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The Act also vested in the
government control and disposition of foreshore lands. Private parties could lease lands reclaimed by the government only if these lands
were no longer needed for public purpose. Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act No. 1654
made government reclaimed lands sui generis in that unlike other public lands which the government could sell to private parties, these
reclaimed lands were available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit private parties from
reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by private parties with government
permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 The salient provisions of Act No. 2874, on
reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time
classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition
or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified as suitable for residential
purposes or for commercial, industrial, or other productive purposes other than agricultural purposes, and shall be open to disposition or
concession, shall be disposed of under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.

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x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private parties by lease only and not
otherwise, as soon as the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall declare
that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x x alienable or disposable"47
lands. Section 7 of the Act empowered the Governor-General to "declare what lands are open to disposition or concession." Section 8 of
the Act limited alienable or disposable lands only to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as government reclaimed, foreshore and
marshy lands, as well as other lands. All these lands, however, must be suitable for residential, commercial, industrial or other productive
non-agricultural purposes. These provisions vested upon the Governor-General the power to classify inalienable lands of the public domain
into disposable lands of the public domain. These provisions also empowered the Governor-General to classify further such disposable
lands of the public domain into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-agricultural
lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as government reclaimed,
foreshore and marshy lands "shall be disposed of to private parties by lease only and not otherwise." The Governor-General, before
allowing the lease of these lands to private parties, must formally declare that the lands were "not necessary for the public service." Act No.
2874 reiterated the State policy to lease and not to sell government reclaimed, foreshore and marshy lands of the public domain, a policy
first enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands for non-agricultural purposes
retain their inherent potential as areas for public service. This is the reason the government prohibited the sale, and only allowed the lease,
of these lands to private parties. The State always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into other non-agricultural lands
under Section 56 (d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposes the government could sell to
private parties. Thus, under Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to private
parties, unless the legislature passed a law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of Waters of 1866.
Lands reclaimed from the sea by private parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935 Constitution, in adopting the
Regalian doctrine, declared in Section 1, Article XIII, that
"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy and other natural resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least sixty per centum of the
capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and limit of the
grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only natural resources
the State could alienate. Thus, foreshore lands, considered part of the State's natural resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands only after these lands
were reclaimed and classified as alienable agricultural lands of the public domain. Government reclaimed and marshy lands of the public
domain, being neither timber nor mineral lands, fell under the classification of public agricultural lands.50 However, government reclaimed

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and marshy lands, although subject to classification as disposable public agricultural lands, could only be leased and not sold to private
parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public domain was only a
statutory prohibition and the legislature could therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and
corporations from acquiring government reclaimed and marshy lands of the public domain that were classified as agricultural lands under
existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:
"Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in excess of one thousand and twenty
four hectares, nor may any individual acquire such lands by purchase in excess of one hundred and forty hectares, or by lease in excess of
one thousand and twenty-four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for sale to private
parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature continued the long established State
policy of retaining for the government title and ownership of government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land Act, which compiled
the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this day the existing general law governing the
classification and disposition of lands of the public domain other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or disposable"52 lands of the public
domain, which prior to such classification are inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the
President to "declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the government can declare
open for disposition or concession only lands that are "officially delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from time to time classify the lands
of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another,53 for the purpose of their administration and
disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable public lands, the President, upon recommendation
by the Secretary of Agriculture and Commerce, shall from time to time declare what lands are open to disposition or concession under this
Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and, when
practicable, surveyed, and which have not been reserved for public or quasi-public uses, nor appropriated by the Government, nor in any
manner become private property, nor those on which a private right authorized and recognized by this Act or any other valid law may be
claimed, or which, having been reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of the public domain, the President must first officially classify these lands
as alienable or disposable, and then declare them open to disposition or concession. There must be no law reserving these lands for public
or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended to be used for residential
purposes or for commercial, industrial, or other productive purposes other than agricultural, and is open to disposition or concession, shall
be disposed of under the provisions of this chapter and not otherwise.

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Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation, or association
authorized to purchase or lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private parties by lease only and not
otherwise, as soon as the President, upon recommendation by the Secretary of Agriculture, shall declare that the same are not necessary
for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease
under the provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale of
government reclaimed, foreshore and marshy disposable lands of the public domain. All these lands are intended for residential,
commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties. The
government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural purposes
not classified as government reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands, however, became
inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential, commercial, industrial or
other productive purposes other than agricultural "shall be disposed of under the provisions of this chapter and not otherwise." Under
Section 10 of CA No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No. 141,54 unless a subsequent law amended or
repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,55 Justice Reynato S. Puno
summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed by the government by dredging, filling, or
other means. Act 1654 mandated that the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore
and lands reclaimed by the government were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that
the land reclaimed was not necessary for the public service. This requisite must have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not to be alienated and sold to private parties. The disposition of the reclaimed land
was only by lease. The land remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at present."
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of the public
domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The prohibition on the sale of
foreshore lands, however, became a constitutional edict under the 1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and classified as agricultural lands of the public domain, in which case they
would fall under the classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain continued to be
only leased and not sold to private parties.56 These lands remained sui generis, as the only alienable or disposable lands of the public
domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties government reclaimed and marshy disposable lands of
the public domain is for the legislature to pass a law authorizing such sale. CA No. 141 does not authorize the President to reclassify

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government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the
only alienable or disposable lands for non-agricultural purposes that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section 59 that the government
previously transferred to government units or entities could be sold to private parties. Section 60 of CA No. 141 declares that
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants, donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted, donated,
or transferred to a province, municipality or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise
disposed of in a manner affecting its title, except when authorized by Congress: x x x." (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from the maximum
area of public lands that could be acquired from the State. These government units and entities should not just turn around and sell these
lands to private parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes
to government units and entities could be used to circumvent constitutional limitations on ownership of alienable or disposable lands of
the public domain. In the same manner, such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of
government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a
lien on these lands.57
In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63 and 67 require a public
bidding. Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director of Lands shall ask the
Secretary of Agriculture and Commerce (now the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural
public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable lands of the public
domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of Waters of 1866. Private parties
could still reclaim portions of the sea with government permission. However, the reclaimed land could become private land only if classified
as alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935 Constitution prohibited the alienation of
all natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of 1889. Articles 420
and 422 of the Civil Code of 1950 state that
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the
national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial
property of the State."

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Again, the government must formally declare that the property of public dominion is no longer needed for public use or public service,
before the same could be classified as patrimonial property of the State.59 In the case of government reclaimed and marshy lands of the
public domain, the declaration of their being disposable, as well as the manner of their disposition, is governed by the applicable provisions
of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State which, without
being for public use, are intended for public service or the "development of the national wealth." Thus, government reclaimed and marshy
lands of the State, even if not employed for public use or public service, if developed to enhance the national wealth, are classified as
property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine. Section 8, Article XIV of the 1973
Constitution stated that
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries,
wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial,
residential, and resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease for
the exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five
years, renewable for not more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses
other than the development of water power, in which cases, beneficial use may be the measure and the limit of the grant." (Emphasis
supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural, industrial or commercial,
residential, and resettlement lands of the public domain." In contrast, the 1935 Constitution barred the alienation of all natural resources
except "public agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution encompassed industrial,
commercial, residential and resettlement lands of the public domain.60 If the land of public domain were neither timber nor mineral land,
it would fall under the classification of agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore, prohibited
the alienation of all natural resources except agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were citizens of the Philippines.
Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable lands of the public domain
unlike in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared that
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development requirements of the natural resources,
shall determine by law the size of land of the public domain which may be developed, held or acquired by, or leased to, any qualified
individual, corporation, or association, and the conditions therefor. No private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excess of five
hundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or association may
hold by lease, concession, license or permit, timber or forest lands and other timber or forest resources in excess of one hundred thousand
hectares. However, such area may be increased by the Batasang Pambansa upon recommendation of the National Economic and
Development Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only through lease. Only individuals
could now acquire alienable lands of the public domain, and private corporations became absolutely barred from acquiring any kind of
alienable land of the public domain. The constitutional ban extended to all kinds of alienable lands of the public domain, while the statutory
ban under CA No. 141 applied only to government reclaimed, foreshore and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a wholly government owned and
controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to acquire reclaimed land;

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(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and
other forms of real property, owned, managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the efficient, economical and beneficial utilization of the
above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for which it is created, have the following
powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and objectives herein
specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas are those covered and
uncovered by the ebb and flow of the tide.61 Submerged areas are those permanently under water regardless of the ebb and flow of the
tide.62 Foreshore and submerged areas indisputably belong to the public domain63 and are inalienable unless reclaimed, classified as
alienable lands open to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply to PEA since it
was then, and until today, a fully owned government corporation. The constitutional ban applied then, as it still applies now, only to
"private corporations and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain" even "in excess of the
area permitted to private corporations by statute." Thus, PEA can hold title to private lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be legislative authority
empowering PEA to sell these lands. This legislative authority is necessary in view of Section 60 of CA No.141, which states
"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or branch or subdivision of the Government shall
not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public
domain. Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to
the constitutional ban on private corporations from acquiring alienable lands of the public domain. Hence, such legislative authority could
only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987 Constitution declares
that all natural resources are "owned by the State," and except for alienable agricultural lands of the public domain, natural resources
cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands
of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain

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except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one
thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve
hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the
conditions therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable
land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the
public domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of
reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the public domain is
not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners probed the rationale behind this
ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:
`No private corporation or association may hold alienable lands of the public domain except by lease, not to exceed one thousand hectares
in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973 Constitution. In effect, it prohibits
private corporations from acquiring alienable public lands. But it has not been very clear in jurisprudence what the reason for this is. In
some of the cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large landholdings. Is that the intent of
this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo was not allowed to acquire a
mere 313-square meter land where a chapel stood because the Supreme Court said it would be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably
diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size of alienable lands
of the public domain that corporations could acquire. The Constitution could have followed the limitations on individuals, who could
acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12 hectares
under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would be more
effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon the death of the owner,
his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing break-up
of farmlands into smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area
of alienable lands of the public domain. Without the constitutional ban, individuals who already acquired the maximum area of alienable
lands of the public domain could easily set up corporations to acquire more alienable public lands. An individual could own as many
corporations as his means would allow him. An individual could even hide his ownership of a corporation by putting his nominees as
stockholders of the corporation. The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.

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The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienable land of the
public domain to a qualified individual. This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable public
lands are gradually decreasing in the face of an ever-growing population. The most effective way to insure faithful adherence to this
constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila,
with a combined titled area of 1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize the configuration of the reclaimed
area."65
PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further reclamation of about 250 hectares x x
x," plus an option "granted to AMARI to subsequently reclaim another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-hectare reclamation project have
been reclaimed, and the rest of the 592.15 hectares are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the
Freedom Islands. AMARI will also complete, at its own expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the
reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70
percent and 30 percent, respectively, the total net usable area which is defined in the Amended JVA as the total reclaimed area less 30
percent earmarked for common areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the name of
AMARI. Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or conveyance of the title pertaining to AMARI's
Land share based on the Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the
proper certificates of title covering AMARI's Land Share in the name of AMARI, x x x; provided, that if more than seventy percent (70%) of
the titled area at any given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to
AMARI, until such time when a corresponding proportionate area of additional land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of reclaimed land which will be titled in its
name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's statutory authority, rights and
privileges to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland Reclamation and Horizontal Development as well
as own the Reclamation Area, thereby granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its supplemental agreement dated August
9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA 367.5 hectares of reclaimed
foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which state that:

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"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold
such alienable lands of the public domain except by lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable lands of the public
domain. In its Memorandum,67 PEA admits that
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its Report and Recommendation
to then President Fidel V. Ramos, "[R]eclaimed lands are classified as alienable and disposable lands of the public domain."69 The Legal
Task Force concluded that
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership and disposition over reclaimed
lands have been transferred to PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified person without
violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land, except by lease (Sec. 3, Art. XVII,70 1987
Constitution), does not apply to reclaimed lands whose ownership has passed on to PEA by statutory grant."
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the "lands of the public
domain, waters x x x and other natural resources" and consequently "owned by the State." As such, foreshore and submerged areas "shall
not be alienated," unless they are classified as "agricultural lands" of the public domain. The mere reclamation of these areas by PEA does
not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.
Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasipublic use.71
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or concession which have been officially
delimited and classified."72 The President has the authority to classify inalienable lands of the public domain into alienable or disposable
lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department attempted to sell the
Roppongi property in Tokyo, Japan, which was acquired by the Philippine Government for use as the Chancery of the Philippine Embassy.
Although the Chancery had transferred to another location thirteen years earlier, the Court still ruled that, under Article 42274 of the Civil
Code, a property of public dominion retains such character until formally declared otherwise. The Court ruled that
"The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v.
Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain, not available for private appropriation or ownership
'until there is a formal declaration on the part of the government to withdraw it from being such' (Ignacio v. Director of Lands, 108 Phil. 335
[1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands reclaimed by PEA from the foreshore or
submerged areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA

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for the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of the
Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the
issuance of certificates of title corresponding to land patents. To this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom Islands, is equivalent to an official
proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's
issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom
Islands are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom Islands although subsequently
there were partial erosions on some areas. The government had also completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the
public domain into "agricultural, forest or timber, mineral lands, and national parks." Being neither timber, mineral, nor national park lands,
the reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that the State may alienate to qualified private parties.
All other natural resources, such as the seas or bays, are "waters x x x owned by the State" forming part of the public domain, and are
inalienable pursuant to Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the islands under a contract
dated November 20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues
that "if the ownership of reclaimed lands may be given to the party constructing the works, then it cannot be said that reclaimed lands are
lands of the public domain which the State may not alienate."75 Article 5 of the Spanish Law of Waters reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons,
with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the
grant of authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with "proper permission" from the
State. Private parties could own the reclaimed land only if not "otherwise provided by the terms of the grant of authority." This clearly
meant that no one could reclaim from the sea without permission from the State because the sea is property of public dominion. It also
meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land, like the sea from which it
emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like the sea it replaced.76 Article 5 of the Spanish Law of
Waters of 1866 adopted the time-honored principle of land ownership that "all lands that were not acquired from the government, either
by purchase or by grant, belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before the government can
alienate them. These lands must not be reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP and the
government was executed after the effectivity of the 1973 Constitution which barred private corporations from acquiring any kind of
alienable land of the public domain. This contract could not have converted the Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of areas under water and revested
solely in the National Government the power to reclaim lands. Section 1 of PD No. 3-A declared that
"The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be
limited to the National Government or any person authorized by it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could now be undertaken
only by the National Government or by a person contracted by the National Government. Private parties may reclaim from the sea only
under a contract with the National Government, and no longer by grant or permission as provided in Section 5 of the Spanish Law of
Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's implementing arm to undertake "all
reclamation projects of the government," which "shall be undertaken by the PEA or through a proper contract executed by it with any
person or entity." Under such contract, a private party receives compensation for reclamation services rendered to PEA. Payment to the

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contractor may be in cash, or in kind consisting of portions of the reclaimed land, subject to the constitutional ban on private corporations
from acquiring alienable lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed land is first
classified as alienable or disposable land open to disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged and forming part
of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public
domain open to disposition. These submerged areas are not covered by any patent or certificate of title. There can be no dispute that these
submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man. Until
reclaimed from the sea, these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part of the public
domain and consequently inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural resources that the State may alienate. Once reclaimed and
transformed into public agricultural lands, the government may then officially classify these lands as alienable or disposable lands open to
disposition. Thereafter, the government may declare these lands no longer needed for public service. Only then can these reclaimed lands
be considered alienable or disposable lands of the public domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable lands open to disposition is necessary
because PEA is tasked under its charter to undertake public services that require the use of lands of the public domain. Under Section 5 of
PD No. 1084, the functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of land transportation, x
x x; [T]o construct, maintain and operate such systems of sanitary sewers as may be necessary; [T]o construct, maintain and operate such
storm drains as may be necessary." PEA is empowered to issue "rules and regulations as may be necessary for the proper use by private
parties of any or all of the highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their
use." Thus, part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for integrating, directing, and
coordinating all reclamation projects for and on behalf of the National Government." The same section also states that "[A]ll reclamation
projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA became the
primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their maximum utilization in promoting public
welfare and interests."79 Since large portions of these reclaimed lands would obviously be needed for public service, there must be a
formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service.1wphi1.nt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned by the PEA," could not automatically
operate to classify inalienable lands into alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore and
submerged lands of the public domain would automatically become alienable once reclaimed by PEA, whether or not classified as alienable
or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the Department of Environment and
Natural Resources ("DENR" for brevity) the following powers and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources and, in the process of
exercising such control, impose appropriate taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions, lease agreements and such other
privileges concerning the development, exploration and utilization of the country's marine, freshwater, and brackish water and over all
aquatic resources of the country and shall continue to oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes which are in furtherance of the
conservation of natural resources and supportive of the national interest;

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(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency
responsible for classification, sub-classification, surveying and titling of lands in consultation with appropriate agencies."80 (Emphasis
supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision and control over alienable and
disposable public lands." DENR also exercises "exclusive jurisdiction on the management and disposition of all lands of the public domain."
Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means
that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether reclaimed
lands of PEA should be classified as alienable under Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands
should be so classified, it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable
lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent
No. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the power to
undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR is also empowered to
classify lands of the public domain into alienable or disposable lands subject to the approval of the President. On the other hand, PEA is
tasked to develop, sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands alienable or
disposable lands of the public domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands
of the public domain to PEA does not make the lands alienable or disposable lands of the public domain, much less patrimonial lands of
PEA.
Absent two official acts a classification that these lands are alienable or disposable and open to disposition and a declaration that these
lands are not needed for public service, lands reclaimed by PEA remain inalienable lands of the public domain. Only such an official
classification and formal declaration can convert reclaimed lands into alienable or disposable lands of the public domain, open to
disposition under the Constitution, Title I and Title III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the reclaimed lands shall be disposed of in
accordance with CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch
or subdivision of the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which states that
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real property belonging to the Government. The Court declared that "It is not for the President to convey real property of the government on his or her own sole will. Any such conveyance must be authorized
and approved by a law enacted by the Congress. It requires executive and legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its reclaimed lands. PD No. 1085,
issued on February 4, 1977, provides that
"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for the reclamation and construction of the
Manila-Cavite Coastal Road Project between the Republic of the Philippines and the Construction and Development Corporation of the
Philippines dated November 20, 1973 and/or any other contract or reclamation covering the same area is hereby transferred, conveyed
and assigned to the ownership and administration of the Public Estates Authority established pursuant to PD No. 1084; Provided, however,
That the rights and interests of the Construction and Development Corporation of the Philippines pursuant to the aforesaid contract shall
be recognized and respected.

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Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the Republic of the Philippines (Department
of Public Highways) arising from, or incident to, the aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue in favor of the Republic of the Philippines
the corresponding shares of stock in said entity with an issued value of said shares of stock (which) shall be deemed fully paid and nonassessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority shall execute such contracts or agreements,
including appropriate agreements with the Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the Public Estates Authority without prejudice
to the subsequent transfer to the contractor or his assignees of such portion or portions of the land reclaimed or to be reclaimed as
provided for in the above-mentioned contract. On the basis of such patents, the Land Registration Commission shall issue the
corresponding certificate of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that "Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be responsible for its administration, development,
utilization or disposition in accordance with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive
from the sale, lease or use of reclaimed lands shall be used in accordance with the provisions of Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085 merely transferred
"ownership and administration" of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall
belong to or be owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in accordance with the
provisions of Presidential Decree No. 1084," the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all
kinds of lands x x x owned, managed, controlled and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public domain. PEA may sell to private parties its
patrimonial properties in accordance with the PEA charter free from constitutional limitations. The constitutional ban on private
corporations from acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with the legislative authority, there is no
longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals. PEA, however, cannot sell any
of its alienable or disposable lands of the public domain to private corporations since Section 3, Article XII of the 1987 Constitution
expressly prohibits such sales. The legislative authority benefits only individuals. Private corporations remain barred from acquiring any
kind of alienable land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the "contractor or his assignees"
(Emphasis supplied) would not apply to private corporations but only to individuals because of the constitutional ban. Otherwise, the
provisions of PD No. 1085 would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and further declared no longer
needed for public service, PEA would have to conduct a public bidding in selling or leasing these lands. PEA must observe the provisions of
Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a public auction.88 Special
Patent No. 3517 expressly states that the patent is issued by authority of the Constitution and PD No. 1084, "supplemented by
Commonwealth Act No. 141, as amended." This is an acknowledgment that the provisions of CA No. 141 apply to the disposition of
reclaimed alienable lands of the public domain unless otherwise provided by law. Executive Order No. 654,89 which authorizes PEA "to
determine the kind and manner of payment for the transfer" of its assets and properties, does not exempt PEA from the requirement of
public auction. EO No. 654 merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the government is required to sell
valuable government property through public bidding. Section 79 of PD No. 1445 mandates that

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"Section 79. When government property has become unserviceable for any cause, or is no longer needed, it shall, upon application of the
officer accountable therefor, be inspected by the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable, it may be sold at public
auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor
concerned or other authorized representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or where the value of the property does not warrant the expense of
publication, by notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event
that the public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission."
It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on Audit must approve the selling
price.90 The Commission on Audit implements Section 79 of the Government Auditing Code through Circular No. 89-29691 dated January
27, 1989. This circular emphasizes that government assets must be disposed of only through public auction, and a negotiated sale can be
resorted to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and submerged alienable lands of the
public domain. Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a condition that the winning bidder
should reclaim another 250 hectares of submerged areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the
additional reclaimed areas in favor of the winning bidder.92 No one, however, submitted a bid. On December 23, 1994, the Government
Corporate Counsel advised PEA it could sell the Freedom Islands through negotiation, without need of another public bidding, because of
the failure of the public bidding on December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional 250 hectares still to be reclaimed,
it also granted an option to AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area
to 750 hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares,95 is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the failure of public bidding happened on December
10, 1991, more than three years before the signing of the original JVA on April 25, 1995. The economic situation in the country had greatly
improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: "Private corporations or associations
may not hold such alienable lands of the public domain except by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by
PEA and AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957
states
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any infrastructure projects undertaken
through the build-operate-and-transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x
x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to,
the grant of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to the ownership of the
land: x x x." (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT project, cannot acquire reclaimed alienable
lands of the public domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local governments in land reclamation projects
to pay the contractor or developer in kind consisting of a percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a portion or percentage of
the reclaimed land or the industrial estate constructed."

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Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law, the constitutional
restrictions on land ownership automatically apply even though not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a corporate entity, can only be paid with
leaseholds on portions of the reclaimed land. If the contractor or developer is an individual, portions of the reclaimed land, not exceeding
12 hectares96 of non-agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing such
conveyance. This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with Section
3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public respondent PEA transformed such lands of
the public domain to private lands." This theory is echoed by AMARI which maintains that the "issuance of the special patent leading to the
eventual issuance of title takes the subject land away from the land of public domain and converts the property into patrimonial or private
property." In short, PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the corresponding certificates of titles,
the 157.84 hectares comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA and AMARI cite the
following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held
"Once the patent was granted and the corresponding certificate of title was issued, the land ceased to be part of the public domain and
became private property over which the Director of Lands has neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared "After the registration and issuance of the certificate and duplicate certificate of title based on a public land patent, the land covered
thereby automatically comes under the operation of Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio
Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled "While the Director of Lands has the power to review homestead patents, he may do so only so long as the land remains part of the public
domain and continues to be under his exclusive control; but once the patent is registered and a certificate of title is issued, the land ceases
to be part of the public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court held
"When the lots in dispute were certified as disposable on May 19, 1971, and free patents were issued covering the same in favor of the
private respondents, the said lots ceased to be part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same."
5.Republic v. Court of Appeals,101 where the Court stated
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land grant to the Mindanao Medical Center,
Bureau of Medical Services, Department of Health, of the whole lot, validly sufficient for initial registration under the Land Registration Act.
Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of
the Act, which governs the registration of grants or patents involving public lands, provides that 'Whenever public lands in the Philippine
Islands belonging to the Government of the United States or to the Government of the Philippines are alienated, granted or conveyed to
persons or to public or private corporations, the same shall be brought forthwith under the operation of this Act (Land Registration Act, Act
496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles issued to private parties.
These four cases uniformly hold that the Director of Lands has no jurisdiction over private lands or that upon issuance of the certificate of
title the land automatically comes under the Torrens System. The fifth case cited involves the registration under the Torrens System of a
12.8-hectare public land granted by the National Government to Mindanao Medical Center, a government unit under the Department of
Health. The National Government transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other facilities
of Mindanao Medical Center, which performed a public service. The Court affirmed the registration of the 12.8-hectare public land in the
name of Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is an example of a public land being registered under
Act No. 496 without the land losing its character as a property of public dominion.

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In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly government owned corporation
performing public as well as proprietary functions. No patent or certificate of title has been issued to any private party. No one is asking the
Director of Lands to cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's certificates of title
should remain with PEA, and the land covered by these certificates, being alienable lands of the public domain, should not be sold to a
private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public ownership of the land. Registration is
not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant had prior to the registration.102 The
registration of lands of the public domain under the Torrens system, by itself, cannot convert public lands into private lands.103
Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land of the public domain
automatically becomes private land cannot apply to government units and entities like PEA. The transfer of the Freedom Islands to PEA was
made subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in conformity with the provisions of Presidential
Decree No. 1084, supplemented by Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the Public
Estates Authority the aforesaid tracts of land containing a total area of one million nine hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters; the technical description of which are hereto attached and made an integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084. Section 60 of CA No. 141 prohibits,
"except when authorized by Congress," the sale of alienable lands of the public domain that are transferred to government units or entities.
Section 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the registered land even if not
annotated on the certificate of title.104 Alienable lands of the public domain held by government entities under Section 60 of CA No. 141
remain public lands because they cannot be alienated or encumbered unless Congress passes a law authorizing their disposition. Congress,
however, cannot authorize the sale to private corporations of reclaimed alienable lands of the public domain because of the constitutional
ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not automatically convert alienable
lands of the public domain into private or patrimonial lands. The alienable lands of the public domain must be transferred to qualified
private parties, or to government entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands.
Otherwise, the constitutional ban will become illusory if Congress can declare lands of the public domain as private or patrimonial lands in
the hands of a government agency tasked to dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim foreshore and submerged areas of
the public domain. Thus, EO No. 525 declares that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to be undertaken in various parts of the country
which need to be evaluated for consistency with national programs;
Whereas, there is a need to give further institutional support to the Government's declared policy to provide for a coordinated, economical
and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the National Government or any person
authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government which shall ensure a coordinated and integrated
approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government corporation to undertake reclamation of lands
and ensure their maximum utilization in promoting public welfare and interests; and

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Whereas, Presidential Decree No. 1416 provides the President with continuing authority to reorganize the national government including
the transfer, abolition, or merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and
pursuant to Presidential Decree No. 1416, do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and coordinating all reclamation
projects for and on behalf of the National Government. All reclamation projects shall be approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that,
reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the
PEA upon approval of the President.
x x x ."
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took
the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not
dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands
become private lands. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the
public domain, these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as "any and all kinds of lands." PEA can
hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands of the public domain like the Freedom
Islands are transferred to PEA and issued land patents or certificates of title in PEA's name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as
PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to
a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the
1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now
numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x x x any and all
kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds of hectares of alienable lands of the
public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations amassing huge
landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent. This will
completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.105 The 1973 Constitution prohibited private corporations from acquiring any kind of
public land, and the 1987 Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529, automatically become private lands
is contrary to existing laws. Several laws authorize lands of the public domain to be registered under the Torrens System or Act No. 496,
now PD No. 1529, without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively,
provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the Philippine Islands are alienated,
granted, or conveyed to persons or the public or private corporations, the same shall be brought forthwith under the operation of this Act
and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated, granted or conveyed to any person, the
same shall be brought forthwith under the operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529 includes conveyances of public lands to
public corporations.

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Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or branch or subdivision of the
Government," as provided in Section 60 of CA No. 141, may be registered under the Torrens System pursuant to Section 103 of PD No.
1529. Such registration, however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be alienated,
encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress." This provision refers to
government reclaimed, foreshore and marshy lands of the public domain that have been titled but still cannot be alienated or encumbered
unless expressly authorized by Congress. The need for legislative authority prevents the registered land of the public domain from
becoming private land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered under the Torrens System.
Section 48, Chapter 12, Book I of the Code states
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the name of any political subdivision or of any corporate agency
or instrumentality, by the executive head of the agency or instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf may be titled in the name of a government
corporation regulating port operations in the country. Private property purchased by the National Government for expansion of an airport
may also be titled in the name of the government agency tasked to administer the airport. Private property donated to a municipality for
use as a town plaza or public school site may likewise be titled in the name of the municipality.106 All these properties become properties
of the public domain, and if already registered under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or
provision in any existing law for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of the public
domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is expropriated or taken by eminent domain,
the National Government, province, city or municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely by an adequate description, the particular
property or interest expropriated, the number of the certificate of title, and the nature of the public use. A memorandum of the right or
interest taken shall be made on each certificate of title by the Register of Deeds, and where the fee simple is taken, a new certificate shall
be issued in favor of the National Government, province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or issuance of a new certificate of title shall be for the
account of the authority taking the land or interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial lands. Lands of the public
domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be reclaimed from
submerged areas of Manila Bay. In the words of AMARI, the Amended JVA "is not a sale but a joint venture with a stipulation for
reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its
1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended JVA requires
PEA to "cause the issuance and delivery of the certificates of title conveying AMARI's Land Share in the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private corporations "shall not hold such
alienable lands of the public domain except by lease." The transfer of title and ownership to AMARI clearly means that AMARI will "hold"
the reclaimed lands other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a transaction
considered a sale or alienation under CA No. 141,108 the Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of the public domain and are
inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable, unless
converted pursuant to law into alienable or disposable lands of the public domain. Historically, lands reclaimed by the government are sui

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generis, not available for sale to private parties unlike other alienable public lands. Reclaimed lands retain their inherent potential as areas
for public use or public service. Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be distributed
equitably among our ever-growing population. To insure such equitable distribution, the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of the public domain. Those who attempt to dispose of inalienable natural resources
of the State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to private corporations, do so at their
own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are
alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as
alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such
classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of
the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of
submerged areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares110 of the Freedom Islands, such
transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still submerged areas of Manila Bay, such
transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other
than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such
reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which
prohibits private corporations from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409112 of the Civil Code,
contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from
the beginning." The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and
void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA is grossly disadvantageous to the
government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue. Besides, the Court is not a trier of
facts, and this last issue involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation are PERMANENTLY
ENJOINED from implementing the Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, AustriaMartinez, and Corona, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 133250

May 6, 2003

FRANCISCO I. CHAVEZ, petitioner,


vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.

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RESOLUTION
CARPIO, J.:
For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent Amari Coastal Bay
Development Corporation ("Amari" for brevity) on September 13, 2002; (2) Motion to Set Case for Hearing on Oral Argument filed by Amari
on August 20, 2002; (3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July 26, 2002 and
August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by respondent Public
Estates Authority ("PEA" for brevity) on July 26, 2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or
Clarification filed by the Office of the Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his
Consolidated Opposition to the main and supplemental motions for reconsideration.
To recall, the Courts decision of July 9, 2002 ("Decision" for brevity) on the instant case states in its summary:
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are
alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as
alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such
classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of
the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of
submerged areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such
transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such
transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other
than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such
reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which
prohibits private corporations from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of the Civil Code,
contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from
the beginning." The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and
void ab initio.
Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before his appointment
to the Court, wrote in his Manila Times column of July 1, 1997, "I have always maintained that the law requires the public bidding of
reclamation projects." Justice Carpio, then a private law practitioner, also stated in the same column, "The Amari-PEA reclamation contract
is legally flawed because it was not bid out by the PEA." Amari claims that because of these statements Justice Carpio should inhibit himself
"on the grounds of bias and prejudgment" and that the instant case should be "re-deliberated" after being assigned to a new ponente.
The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came after Justice Carpio had already
rendered his opinion on the merits of the case. The rule is that a motion to inhibit must be denied if filed after a member of the Court had
already given an opinion on the merits of the case,1 the rationale being that "a litigant cannot be permitted to speculate upon the action of
the Court xxx (only to) raise an objection of this sort after a decision has been rendered." Second, as can be readily gleaned from the
summary of the Decision quoted above, the absence of public bidding is not one of the ratio decidendi of the Decision which is anchored on
violation of specific provisions of the Constitution. The absence of public bidding was not raised as an issue by the parties. The absence of
public bidding was mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance
of public officials. At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence of public

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bidding in the disposition of the Freedom Islands rendered the Amended JVA null and void.2 Third, judges and justices are not disqualified
from participating in a case just because they have written legal articles on the law involved in the case. As stated by the Court in Republic
v. Cocofed,3 The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in the same manner that
jurists will not be disqualified just because they may have given their opinions as textbook writers on the question involved in a case.
Besides, the subject and title of the column in question was "The CCP reclamation project" and the column referred to the Amari-PEA
contract only in passing in one sentence.
Amaris motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed exhaustively the
issues involved in the case.
The motions for reconsideration reiterate mainly the arguments already discussed in the Decision. We shall consider in this Resolution only
the new arguments raised by respondents.
In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively, not retroactively
to cover the Amended JVA. Amari argues that the existence of a statute or executive order prior to its being adjudged void is an operative
fact to which legal consequences are attached, citing De Agbayani v. PNB,4 thus:
x x x. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force
and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience
and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to
reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a
declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had
transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, - with respect to
particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a
resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. x x x.
xxx
x x x That before the decision they were not constitutionally infirm was admitted expressly. There is all the more reason then to yield assent
to the now prevailing principle that the existence of a statute or executive order prior to its being adjudged void is an operative fact to
which legal consequences are attached.
Amari now claims that "assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order Nos. 525 and 654 are
inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these decrees and executive orders should only be
applied prospectively from the finality of the Decision."
Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs vested rights. Amari maintains that the
new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old doctrine in good faith, citing Spouses
Benzonan v. Court of Appeals,5 thus:
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited
above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code
"judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while
our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no
retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks
forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that
have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

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The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in
People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.
There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application of doctrine to
temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the present petitions, however, we find
no such equitable considerations. Not only did the private respondent apply for free agricultural land when he did not need it and he had
no intentions of applying it to the noble purposes behind the law, he would now repurchase for only P327,995.00, the property purchased
by the petitioners in good faith for P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land must be
worth more than that amount now.
The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in
1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to respondent Pe
expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of
petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of the
Belisario ruling.
Amaris reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the prevailing law or doctrine at the time
of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the public domain, and the Decision
annulled the law or reversed this doctrine. Obviously, this is not the case here.
Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain. But since the effectivity of
the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of the public domain. The 1987
Constitution continued this constitutional prohibition. The prevailing law before, during and after the signing of the Amended JVA is that
private corporations cannot hold, except by lease, alienable lands of the public domain. The Decision has not annulled or in any way
changed the law on this matter. The Decision, whether made retroactive or not, does not change the law since the Decision merely
reiterates the law that prevailed since the effectivity of the 1973 Constitution. Thus, De Agbayani, which refers to a law that is invalidated
by a decision of the Court, has no application to the instant case.
Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent decision which
adopts a new doctrine. In the instant case, there is no previous doctrine that is overruled by the Decision. Since the case of Manila Electric
Company v. Judge Castro-Bartolome,6 decided on June 29, 1982, the Court has applied consistently the constitutional provision that private
corporations cannot hold, except by lease, alienable lands of the public domain. The Court reiterated this in numerous cases, and the only
dispute in the application of this constitutional provision is whether the land in question had already become private property before the
effectivity of the 1973 Constitution.7 If the land was already private land before the 1973 Constitution because the corporation had
possessed it openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation
could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973 Constitution,
then the corporation could never hold, except by lease, such public land. Indisputably, the Decision does not overrule any previous doctrine
of the Court.
The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease,
alienable lands of the public domain. This is one of the two main reasons why the Decision annulled the Amended JVA. The other main
reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and beyond the commerce of man, a doctrine that has
remained immutable since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does not overrule, any existing
judicial doctrine.
Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law or doctrine. Since
the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always been part of the public domain. And
since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973 Constitution, statutory law never allowed foreshore
lands reclaimed by the government to be sold to private corporations. The 1973 and 1987 Constitution enshrined and expanded the ban to
include any alienable land of the public domain.
There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the sale or transfer of
the land may no longer be invalidated because of "weighty considerations of equity and social justice."8 The invalidation of the sale or
transfer may also be superfluous if the purpose of the statutory or constitutional ban has been achieved. But none of these cases apply to
Amari.

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Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of
the first transfer is corrected by the subsequent sale to a citizen.9 Similarly, where the alien who buys the land subsequently acquires
Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos has been
achieved.10 In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred
to a qualified party, or the buyer himself becomes a qualified party. In the instant case, however, Amari has not transferred the Freedom
Islands, or any portion of it, to any qualified party. In fact, Amari admits that title to the Freedom Islands still remains with PEA.11
The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned under the principle of res judicata,
provided the requisites for res judicata are present.12 Under this principle, the courts and the parties are bound by a prior final decision,
otherwise there will be no end to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals,13 "once a judgement has become
final and executory, it can no longer be disturbed no matter how erroneous it may be." In the instant case, there is no prior final decision
adjudicating the Freedom Islands to Amari.
There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because
even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning
precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate Committees14 had
already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a well-publicized investigation
into PEAs sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the
Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.
Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom Islands. Amari states that it has paid
PEA only P300,000,000.0015 out of the P1,894,129,200.00 total reimbursement cost agreed upon in the Amended JVA. Moreover, Amari
does not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or to have
started to construct any permanent infrastructure on the Freedom Islands. In short, Amari does not claim to have introduced any physical
improvement or development on the reclamation project that is the subject of the Amended JVA. And yet Amari claims that it had already
spent a "whopping P9,876,108,638.00" as its total development cost as of June 30, 2002.16 Amari does not explain how it spent the rest of
the P9,876,108,638.00 total project cost after paying PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent purchaser in
good faith and for value.
In its Supplement to Motion for Reconsideration, PEA claims that it is "similarly situated" as the Bases Conversion Development Authority
(BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other military reservations. PEAs
comparison is incorrect. The Decision states as follows:
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took
the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not
dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands
become private lands. In the hands of the government agency tasked and authorized to dispose of alienable or disposable lands of the
public domain, these lands are still public, not private lands.
PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of Department of
Environment and Natural Resources ("DENR" for brevity) as the government agency charged with leasing or selling all reclaimed lands of
the public domain. In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore lands are public
lands in the same manner that these same lands would have been public lands in the hands of DENR. BCDA is an entirely different
government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations
as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDAs mandate is
specific and limited in area, while PEAs mandate is general and national. BCDA holds government lands that have been granted to end-user
government entities the military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public
lands, not as an end-user entity, but as the government agency "primarily responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government."
In Laurel v. Garcia,17 cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign Affairs, when no
longer needed for public use, may be declared patrimonial property for sale to private parties provided there is a law authorizing such act.
Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be
withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is
a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as
patrimonial property for sale to private parties.

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Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private
corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property18 which even
private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or
municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once
converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens
or qualified private corporations.
We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to reclaimed
foreshore lands, thus:
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as
PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to
a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the
1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now
numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x x x any and all
kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds, if not thousands, of hectares of
alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations
amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent.
This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private
corporations to acquire not more than 1,024 hectares of public lands. The 1973 Constitution prohibited private corporations from acquiring
any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition.
Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is "enormous" and "it would
be difficult for PEA to accomplish such project without the participation of private corporations."19 The Decision does not bar private
corporations from participating in reclamation projects and being paid for their services in reclaiming lands. What the Decision prohibits,
following the explicit constitutional mandate, is for private corporations to acquire reclaimed lands of the public domain. There is no
prohibition on the directors, officers and stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction
reclaimed alienable lands of the public domain. They can acquire not more than 12 hectares per individual, and the land thus acquired
becomes private land.
Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a quantum meruit
basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of nullity.
WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY. The Motion to
Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise DENIED.
SO ORDERED.
Davide, Jr., C.J., Vitug, Panganiban, Quisumbing, Austria- Martinez, Carpio-Morales, and Callejo, Sr., JJ., concur.
Bellosillo, J., please see separate opinion, concurring and dissenting.
Puno, J., please see separate opinion.
Ynares-Santiago, and Sandoval-Gutierrez, JJ., please see dissenting opinion.
Corona, J., I dissent.
Azcuna, J., I take no part.

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