NATURAL RESOURCES

G.R No. 187167

August 16, 2011

PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP. RISA

HONTIVEROS, PROF. HARRY C. ROQUE, JR., AND UNIVERSITY OF
THE PHILIPPINES COLLEGE OF LAW STUDENTS, ALITHEA BARBARA
ACAS, VOLTAIRE ALFERES, CZARINA MAY ALTEZ, FRANCIS ALVIN
ASILO, SHERYL BALOT, RUBY AMOR BARRACA, JOSE JAVIER
BAUTISTA, ROMINA BERNARDO, VALERIE PAGASA BUENAVENTURA,
EDAN MARRI CAETE, VANN ALLEN DELA CRUZ, RENE DELORINO,
PAULYN MAY DUMAN, SHARON ESCOTO, RODRIGO FAJARDO III,
GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA GREPO,
ANNA MARIE CECILIA GO, IRISH KAY KALAW, MARY ANN JOY LEE,
MARIA LUISA MANALAYSAY, MIGUEL RAFAEL MUSNGI, MICHAEL
OCAMPO, JAKLYN HANNA PINEDA, WILLIAM RAGAMAT, MARICAR
RAMOS, ENRIK FORT REVILLAS, JAMES MARK TERRY RIDON,
JOHANN FRANTZ RIVERA IV, CHRISTIAN RIVERO, DIANNE MARIE
ROA, NICHOLAS SANTIZO, MELISSA CHRISTINA SANTOS, CRISTINE
MAE TABING, VANESSA ANNE TORNO, MARIA ESTER VANGUARDIA,
and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, HON. ALBERTO ROMULO, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS, HON.
ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY OF THE
DEPARTMENT OF BUDGET AND MANAGEMENT, HON. DIONY
VENTURA, IN HIS CAPACITY AS ADMINISTRATOR OF THE NATIONAL
MAPPING & RESOURCE INFORMATION AUTHORITY, and HON.
HILARIO DAVIDE, JR., IN HIS CAPACITY AS REPRESENTATIVE OF THE
PERMANENT MISSION OF THE REPUBLIC OF THE PHILIPPINES TO
THE UNITED NATIONS, Respondents.
DECISION
CARPIO, J.:
The Case
This original action for the writs of certiorari and prohibition assails the
constitutionality of Republic Act No. 95221 (RA 9522) adjusting the
countrys archipelagic baselines and classifying the baseline regime of
nearby territories.
The Antecedents

In 1961, Congress passed Republic Act No. 3046 (RA 3046)2 demarcating
the maritime baselines of the Philippines as an archipelagic State.3 This
law followed the framing of the Convention on the Territorial Sea and the
Contiguous Zone in 1958 (UNCLOS I),4 codifying, among others, the
sovereign right of States parties over their "territorial sea," the breadth of
which, however, was left undetermined. Attempts to fill this void during the
second round of negotiations in Geneva in 1960 (UNCLOS II) proved futile.
Thus, domestically, RA 3046 remained unchanged for nearly five decades,
save for legislation passed in 1968 (Republic Act No. 5446 [RA 5446])
correcting typographical errors and reserving the drawing of baselines
around Sabah in North Borneo.
In March 2009, Congress amended RA 3046 by enacting RA 9522, the
statute now under scrutiny. The change was prompted by the need to
make RA 3046 compliant with the terms of the United Nations Convention
on the Law of the Sea (UNCLOS III),5 which the Philippines ratified on 27
February 1984.6 Among others, UNCLOS III prescribes the water-land ratio,
length, and contour of baselines of archipelagic States like the Philippines7
and sets the deadline for the filing of application for the extended
continental shelf.8 Complying with these requirements, RA 9522 shortened
one baseline, optimized the location of some basepoints around the
Philippine archipelago and classified adjacent territories, namely, the
Kalayaan Island Group (KIG) and the Scarborough Shoal, as "regimes of
islands" whose islands generate their own applicable maritime zones.
Petitioners, professors of law, law students and a legislator, in their
respective capacities as "citizens, taxpayers or x x x legislators,"9 as the
case may be, assail the constitutionality of RA 9522 on two principal
grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and
logically, the reach of the Philippine states sovereign power, in violation of
Article 1 of the 1987 Constitution,10 embodying the terms of the Treaty of
Paris11 and ancillary treaties,12 and (2) RA 9522 opens the countrys
waters landward of the baselines to maritime passage by all vessels and
aircrafts, undermining Philippine sovereignty and national security,
contravening the countrys nuclear-free policy, and damaging marine
resources, in violation of relevant constitutional provisions.13
In addition, petitioners contend that RA 9522s treatment of the KIG as
"regime of islands" not only results in the loss of a large maritime area but
also prejudices the livelihood of subsistence fishermen.14 To buttress their
argument of territorial diminution, petitioners facially attack RA 9522 for
what it excluded and included its failure to reference either the Treaty of
Paris or Sabah and its use of UNCLOS IIIs framework of regime of islands to
determine the maritime zones of the KIG and the Scarborough Shoal.
Commenting on the petition, respondent officials raised threshold issues
questioning (1) the petitions compliance with the case or controversy
requirement for judicial review grounded on petitioners alleged lack of

locus standi and (2) the propriety of the writs of certiorari and prohibition
to assail the constitutionality of RA 9522. On the merits, respondents
defended RA 9522 as the countrys compliance with the terms of UNCLOS
III, preserving Philippine territory over the KIG or Scarborough Shoal.
Respondents add that RA 9522 does not undermine the countrys security,
environment and economic interests or relinquish the Philippines claim
over Sabah.

the peculiar nature of RA 9522, it is understandably difficult to find other

litigants possessing "a more direct and specific interest" to bring the suit,
thus satisfying one of the requirements for granting citizenship standing.17

Respondents also question the normative force, under international law, of

petitioners assertion that what Spain ceded to the United States under the
Treaty of Paris were the islands and all the waters found within the
boundaries of the rectangular area drawn under the Treaty of Paris.

In praying for the dismissal of the petition on preliminary grounds,

respondents seek a strict observance of the offices of the writs of certiorari
and prohibition, noting that the writs cannot issue absent any showing of
grave abuse of discretion in the exercise of judicial, quasi-judicial or
ministerial powers on the part of respondents and resulting prejudice on
the part of petitioners.18

We left unacted petitioners prayer for an injunctive writ.

The Issues
The petition raises the following issues:
1. Preliminarily
1. Whether petitioners possess locus standi to bring this
suit; and
2. Whether the writs of certiorari and prohibition are the
proper remedies to assail the constitutionality of RA 9522.
2. On the merits, whether RA 9522 is unconstitutional.
The Ruling of the Court
On the threshold issues, we hold that (1) petitioners possess locus standi
to bring this suit as citizens and (2) the writs of certiorari and prohibition
are proper remedies to test the constitutionality of RA 9522. On the merits,
we find no basis to declare RA 9522 unconstitutional.
On the Threshold Issues
Petitioners Possess Locus
Standi as Citizens
Petitioners themselves undermine their assertion of locus standi as
legislators and taxpayers because the petition alleges neither infringement
of legislative prerogative15 nor misuse of public funds,16 occasioned by
the passage and implementation of RA 9522. Nonetheless, we recognize
petitioners locus standi as citizens with constitutionally sufficient interest
in the resolution of the merits of the case which undoubtedly raises issues
of national significance necessitating urgent resolution. Indeed, owing to

The Writs of Certiorari and Prohibition

Are Proper Remedies to Test
the Constitutionality of Statutes

Respondents submission holds true in ordinary civil proceedings. When

this Court exercises its constitutional power of judicial review, however, we
have, by tradition, viewed the writs of certiorari and prohibition as proper
remedial vehicles to test the constitutionality of statutes,19 and indeed, of
acts of other branches of government.20 Issues of constitutional import are
sometimes crafted out of statutes which, while having no bearing on the
personal interests of the petitioners, carry such relevance in the life of this
nation that the Court inevitably finds itself constrained to take cognizance
of the case and pass upon the issues raised, non-compliance with the letter
of procedural rules notwithstanding. The statute sought to be reviewed
here is one such law.
RA 9522 is Not Unconstitutional
RA 9522 is a Statutory Tool
to Demarcate the Countrys
Maritime Zones and Continental
Shelf Under UNCLOS III, not to
Delineate Philippine Territory
Petitioners submit that RA 9522 "dismembers a large portion of the
national territory"21 because it discards the pre-UNCLOS III demarcation of
Philippine territory under the Treaty of Paris and related treaties,
successively encoded in the definition of national territory under the 1935,
1973 and 1987 Constitutions. Petitioners theorize that this constitutional
definition trumps any treaty or statutory provision denying the Philippines
sovereign control over waters, beyond the territorial sea recognized at the
time of the Treaty of Paris, that Spain supposedly ceded to the United
States. Petitioners argue that from the Treaty of Paris technical
description, Philippine sovereignty over territorial waters extends hundreds
of nautical miles around the Philippine archipelago, embracing the
rectangular area delineated in the Treaty of Paris.22
Petitioners theory fails to persuade us.

UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a
multilateral treaty regulating, among others, sea-use rights over maritime
zones (i.e., the territorial waters [12 nautical miles from the baselines],
contiguous zone [24 nautical miles from the baselines], exclusive economic
zone [200 nautical miles from the baselines]), and continental shelves that
UNCLOS III delimits.23 UNCLOS III was the culmination of decades-long
negotiations among United Nations members to codify norms regulating
the conduct of States in the worlds oceans and submarine areas,
recognizing coastal and archipelagic States graduated authority over a
limited span of waters and submarine lands along their coasts.
On the other hand, baselines laws such as RA 9522 are enacted by
UNCLOS III States parties to mark-out specific basepoints along their coasts
from which baselines are drawn, either straight or contoured, to serve as
geographic starting points to measure the breadth of the maritime zones
and continental shelf. Article 48 of UNCLOS III on archipelagic States like
ours could not be any clearer:

executing multilateral treaties on the regulations of sea-use rights or

enacting statutes to comply with the treatys terms to delimit maritime
zones and continental shelves. Territorial claims to land features are
outside UNCLOS III, and are instead governed by the rules on general
international law.26
RA 9522s Use of the Framework
of Regime of Islands to Determine the
Maritime Zones of the KIG and the
Scarborough Shoal, not Inconsistent
with the Philippines Claim of Sovereignty
Over these Areas

Article 48. Measurement of the breadth of the territorial sea, the

contiguous zone, the exclusive economic zone and the continental shelf.
The breadth of the territorial sea, the contiguous zone, the exclusive
economic zone and the continental shelf shall be measured from
archipelagic baselines drawn in accordance with article 47. (Emphasis
supplied)

Petitioners next submit that RA 9522s use of UNCLOS IIIs regime of

islands framework to draw the baselines, and to measure the breadth of
the applicable maritime zones of the KIG, "weakens our territorial claim"
over that area.27 Petitioners add that the KIGs (and Scarborough Shoals)
exclusion from the Philippine archipelagic baselines results in the loss of
"about 15,000 square nautical miles of territorial waters," prejudicing the
livelihood of subsistence fishermen.28 A comparison of the configuration of
the baselines drawn under RA 3046 and RA 9522 and the extent of
maritime space encompassed by each law, coupled with a reading of the
text of RA 9522 and its congressional deliberations, vis--vis the
Philippines obligations under UNCLOS III, belie this view.1avvphi1

Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III
States parties to delimit with precision the extent of their maritime zones
and continental shelves. In turn, this gives notice to the rest of the
international community of the scope of the maritime space and submarine
areas within which States parties exercise treaty-based rights, namely, the
exercise of sovereignty over territorial waters (Article 2), the jurisdiction to
enforce customs, fiscal, immigration, and sanitation laws in the contiguous
zone (Article 33), and the right to exploit the living and non-living
resources in the exclusive economic zone (Article 56) and continental shelf
(Article 77).

The configuration of the baselines drawn under RA 3046 and RA 9522

shows that RA 9522 merely followed the basepoints mapped by RA 3046,
save for at least nine basepoints that RA 9522 skipped to optimize the
location of basepoints and adjust the length of one baseline (and thus
comply with UNCLOS IIIs limitation on the maximum length of baselines).
Under RA 3046, as under RA 9522, the KIG and the Scarborough Shoal lie
outside of the baselines drawn around the Philippine archipelago. This
undeniable cartographic fact takes the wind out of petitioners argument
branding RA 9522 as a statutory renunciation of the Philippines claim over
the KIG, assuming that baselines are relevant for this purpose.

Even under petitioners theory that the Philippine territory embraces the
islands and all the waters within the rectangular area delimited in the
Treaty of Paris, the baselines of the Philippines would still have to be drawn
in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn
from the boundaries or other portions of the rectangular area delineated in
the Treaty of Paris, but from the "outermost islands and drying reefs of the
archipelago."24

Petitioners assertion of loss of "about 15,000 square nautical miles of

territorial waters" under RA 9522 is similarly unfounded both in fact and
law. On the contrary, RA 9522, by optimizing the location of basepoints,
increased the Philippines total maritime space (covering its internal
waters, territorial sea and exclusive economic zone) by 145,216 square
nautical miles, as shown in the table below:29

UNCLOS III and its ancillary baselines laws play no role in the acquisition,
enlargement or, as petitioners claim, diminution of territory. Under
traditional international law typology, States acquire (or conversely, lose)
territory through occupation, accretion, cession and prescription,25 not by

Extent of maritime
area using RA 3046,
as amended, taking
into account the

Extent of maritime
area using RA 9522,
taking into account
UNCLOS III (in square

Treaty of Paris
delimitation (in
square nautical
miles)

nautical miles)

Internal or
archipelagic
waters

166,858

171,435

Territorial Sea

274,136

32,106

Exclusive
Economic Zone
TOTAL

382,669
440,994

586,210

Thus, as the map below shows, the reach of the exclusive economic zone
drawn under RA 9522 even extends way beyond the waters covered by the
rectangular demarcation under the Treaty of Paris. Of course, where there
are overlapping exclusive economic zones of opposite or adjacent States,
there will have to be a delineation of maritime boundaries in accordance
with UNCLOS III.30

Further, petitioners argument that the KIG now lies outside Philippine
territory because the baselines that RA 9522 draws do not enclose the KIG
is negated by RA 9522 itself. Section 2 of the law commits to text the
Philippines continued claim of sovereignty and jurisdiction over the KIG
and the Scarborough Shoal:
SEC. 2. The baselines in the following areas over which the Philippines
likewise exercises sovereignty and jurisdiction shall be determined
as "Regime of Islands" under the Republic of the Philippines consistent with
Article 121 of the United Nations Convention on the Law of the Sea
(UNCLOS):
a) The Kalayaan Island Group as constituted under Presidential
Decree No. 1596 and

b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis

supplied)
Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as
part of the Philippine archipelago, adverse legal effects would have
ensued. The Philippines would have committed a breach of two provisions
of UNCLOS III. First, Article 47 (3) of UNCLOS III requires that "[t]he drawing
of such baselines shall not depart to any appreciable extent from the
general configuration of the archipelago." Second, Article 47 (2) of UNCLOS
III requires that "the length of the baselines shall not exceed 100 nautical
miles," save for three per cent (3%) of the total number of baselines which
can reach up to 125 nautical miles.31
Although the Philippines has consistently claimed sovereignty over the
KIG32 and the Scarborough Shoal for several decades, these outlying areas
are located at an appreciable distance from the nearest shoreline of the
Philippine archipelago,33 such that any straight baseline loped around
them from the nearest basepoint will inevitably "depart to an appreciable
extent from the general configuration of the archipelago."
The principal sponsor of RA 9522 in the Senate, Senator Miriam DefensorSantiago, took pains to emphasize the foregoing during the Senate
deliberations:
What we call the Kalayaan Island Group or what the rest of the world call[]
the Spratlys and the Scarborough Shoal are outside our archipelagic
baseline because if we put them inside our baselines we might be accused
of violating the provision of international law which states: "The drawing of
such baseline shall not depart to any appreciable extent from the general
configuration of the archipelago." So sa loob ng ating baseline, dapat
magkalapit ang mga islands. Dahil malayo ang Scarborough Shoal, hindi
natin masasabing malapit sila sa atin although we are still allowed by
international law to claim them as our own.
This is called contested islands outside our configuration. We see that our
archipelago is defined by the orange line which [we] call[] archipelagic
baseline. Ngayon, tingnan ninyo ang maliit na circle doon sa itaas, that is
Scarborough Shoal, itong malaking circle sa ibaba, that is Kalayaan Group
or the Spratlys. Malayo na sila sa ating archipelago kaya kung ilihis pa
natin ang dating archipelagic baselines para lamang masama itong
dalawang circles, hindi na sila magkalapit at baka hindi na tatanggapin ng
United Nations because of the rule that it should follow the natural
configuration of the archipelago.34 (Emphasis supplied)
Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS
IIIs limits.1avvphi1 The need to shorten this baseline, and in addition, to
optimize the location of basepoints using current maps, became imperative
as discussed by respondents:

[T]he amendment of the baselines law was necessary to enable the

Philippines to draw the outer limits of its maritime zones including the
extended continental shelf in the manner provided by Article 47 of
[UNCLOS III]. As defined by R.A. 3046, as amended by R.A. 5446, the
baselines suffer from some technical deficiencies, to wit:
1. The length of the baseline across Moro Gulf (from Middle of 3
Rock Awash to Tongquil Point) is 140.06 nautical miles x x x. This
exceeds the maximum length allowed under Article 47(2) of the
[UNCLOS III], which states that "The length of such baselines shall
not exceed 100 nautical miles, except that up to 3 per cent of the
total number of baselines enclosing any archipelago may exceed
that length, up to a maximum length of 125 nautical miles."
2. The selection of basepoints is not optimal. At least 9 basepoints
can be skipped or deleted from the baselines system. This will
enclose an additional 2,195 nautical miles of water.
3. Finally, the basepoints were drawn from maps existing in 1968,
and not established by geodetic survey methods. Accordingly,
some of the points, particularly along the west coasts of Luzon
down to Palawan were later found to be located either inland or on
water, not on low-water line and drying reefs as prescribed by
Article 47.35
Hence, far from surrendering the Philippines claim over the KIG and the
Scarborough Shoal, Congress decision to classify the KIG and the
Scarborough Shoal as "Regime[s] of Islands under the Republic of the
Philippines consistent with Article 121"36 of UNCLOS III manifests the
Philippine States responsible observance of its pacta sunt servanda
obligation under UNCLOS III. Under Article 121 of UNCLOS III, any "naturally
formed area of land, surrounded by water, which is above water at high
tide," such as portions of the KIG, qualifies under the category of "regime
of islands," whose islands generate their own applicable maritime zones.37
Statutory Claim Over Sabah under
RA 5446 Retained
Petitioners argument for the invalidity of RA 9522 for its failure to
textualize the Philippines claim over Sabah in North Borneo is also
untenable. Section 2 of RA 5446, which RA 9522 did not repeal, keeps open
the door for drawing the baselines of Sabah:
Section 2. The definition of the baselines of the territorial sea of the
Philippine Archipelago as provided in this Act is without prejudice to the
delineation of the baselines of the territorial sea around the
territory of Sabah, situated in North Borneo, over which the
Republic of the Philippines has acquired dominion and
sovereignty. (Emphasis supplied)

UNCLOS III and RA 9522 not

Incompatible with the Constitutions
Delineation of Internal Waters
As their final argument against the validity of RA 9522, petitioners contend
that the law unconstitutionally "converts" internal waters into archipelagic
waters, hence subjecting these waters to the right of innocent and sea
lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine
internal waters to nuclear and maritime pollution hazards, in violation of
the Constitution.38
Whether referred to as Philippine "internal waters" under Article I of the
Constitution39 or as "archipelagic waters" under UNCLOS III (Article 49 [1]),
the Philippines exercises sovereignty over the body of water lying landward
of the baselines, including the air space over it and the submarine areas
underneath. UNCLOS III affirms this:
Article 49. Legal status of archipelagic waters, of the air space over
archipelagic waters and of their bed and subsoil.
1. The sovereignty of an archipelagic State extends to the
waters enclosed by the archipelagic baselines drawn in
accordance with article 47, described as archipelagic waters,
regardless of their depth or distance from the coast.
2. This sovereignty extends to the air space over the
archipelagic waters, as well as to their bed and subsoil, and
the resources contained therein.
xxxx
4. The regime of archipelagic sea lanes passage established in this
Part shall not in other respects affect the status of the
archipelagic waters, including the sea lanes, or the exercise
by the archipelagic State of its sovereignty over such
waters and their air space, bed and subsoil, and the
resources contained therein. (Emphasis supplied)
The fact of sovereignty, however, does not preclude the operation of
municipal and international law norms subjecting the territorial sea or
archipelagic waters to necessary, if not marginal, burdens in the interest of
maintaining unimpeded, expeditious international navigation, consistent
with the international law principle of freedom of navigation. Thus,
domestically, the political branches of the Philippine government, in the
competent discharge of their constitutional powers, may pass legislation
designating routes within the archipelagic waters to regulate innocent and

sea lanes passage.40 Indeed, bills drawing nautical highways for sea lanes
passage are now pending in Congress.41
In the absence of municipal legislation, international law norms, now
codified in UNCLOS III, operate to grant innocent passage rights over the
territorial sea or archipelagic waters, subject to the treatys limitations and
conditions for their exercise.42 Significantly, the right of innocent passage
is a customary international law,43 thus automatically incorporated in the
corpus of Philippine law.44 No modern State can validly invoke its
sovereignty to absolutely forbid innocent passage that is exercised in
accordance with customary international law without risking retaliatory
measures from the international community.
The fact that for archipelagic States, their archipelagic waters are subject
to both the right of innocent passage and sea lanes passage45 does not
place them in lesser footing vis--vis continental coastal States which are
subject, in their territorial sea, to the right of innocent passage and the
right of transit passage through international straits. The imposition of
these passage rights through archipelagic waters under UNCLOS III was a
concession by archipelagic States, in exchange for their right to claim all
the waters landward of their baselines, regardless of their depth or
distance from the coast, as archipelagic waters subject to their territorial
sovereignty. More importantly, the recognition of archipelagic States
archipelago and the waters enclosed by their baselines as one cohesive
entity prevents the treatment of their islands as separate islands under
UNCLOS III.46 Separate islands generate their own maritime zones, placing
the waters between islands separated by more than 24 nautical miles
beyond the States territorial sovereignty, subjecting these waters to the
rights of other States under UNCLOS III.47
Petitioners invocation of non-executory constitutional provisions in Article
II (Declaration of Principles and State Policies)48 must also fail. Our present
state of jurisprudence considers the provisions in Article II as mere
legislative guides, which, absent enabling legislation, "do not embody
judicially enforceable constitutional rights x x x."49 Article II provisions
serve as guides in formulating and interpreting implementing legislation,
as well as in interpreting executory provisions of the Constitution. Although
Oposa v. Factoran50 treated the right to a healthful and balanced ecology
under Section 16 of Article II as an exception, the present petition lacks
factual basis to substantiate the claimed constitutional violation. The other
provisions petitioners cite, relating to the protection of marine wealth
(Article XII, Section 2, paragraph 251 ) and subsistence fishermen (Article
XIII, Section 752 ), are not violated by RA 9522.
In fact, the demarcation of the baselines enables the Philippines to delimit
its exclusive economic zone, reserving solely to the Philippines the
exploitation of all living and non-living resources within such zone. Such a
maritime delineation binds the international community since the
delineation is in strict observance of UNCLOS III. If the maritime delineation

is contrary to UNCLOS III, the international community will of course reject

it and will refuse to be bound by it.
UNCLOS III favors States with a long coastline like the Philippines. UNCLOS
III creates a sui generis maritime space the exclusive economic zone in
waters previously part of the high seas. UNCLOS III grants new rights to
coastal States to exclusively exploit the resources found within this zone
up to 200 nautical miles.53 UNCLOS III, however, preserves the traditional
freedom of navigation of other States that attached to this zone beyond
the territorial sea before UNCLOS III.
RA 9522 and the Philippines Maritime Zones
Petitioners hold the view that, based on the permissive text of UNCLOS III,
Congress was not bound to pass RA 9522.54 We have looked at the
relevant provision of UNCLOS III55 and we find petitioners reading
plausible. Nevertheless, the prerogative of choosing this option belongs to
Congress, not to this Court. Moreover, the luxury of choosing this option
comes at a very steep price. Absent an UNCLOS III compliant baselines law,
an archipelagic State like the Philippines will find itself devoid of
internationally acceptable baselines from where the breadth of its maritime
zones and continental shelf is measured. This is recipe for a two-fronted
disaster: first, it sends an open invitation to the seafaring powers to freely
enter and exploit the resources in the waters and submarine areas around
our archipelago; and second, it weakens the countrys case in any
international dispute over Philippine maritime space. These are
consequences Congress wisely avoided.
The enactment of UNCLOS III compliant baselines law for the Philippine
archipelago and adjacent areas, as embodied in RA 9522, allows an
internationally-recognized delimitation of the breadth of the Philippines
maritime zones and continental shelf. RA 9522 is therefore a most vital
step on the part of the Philippines in safeguarding its maritime zones,
consistent with the Constitution and our national interest.
WHEREFORE, we DISMISS the petition.
SO ORDERED.

G.R. No. 158290

October 23, 2006

HILARION M. HENARES, JR., VICTOR C. AGUSTIN, ALFREDO L.

HENARES, DANIEL L. HENARES, ENRIQUE BELO HENARES, and
CRISTINA BELO HENARES, petitioners,

vs.
LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD
and DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS,
respondents.

RESOLUTION

QUISUMBING, J.:
Petitioners challenge this Court to issue a writ of mandamus commanding
respondents Land Transportation Franchising and Regulatory Board (LTFRB)
and the Department of Transportation and Communications (DOTC) to
require public utility vehicles (PUVs) to use compressed natural gas (CNG)
as alternative fuel.
Citing statistics from the Metro Manila Transportation and Traffic Situation
Study of 1996,1 the Environmental Management Bureau (EMB) of the
National Capital Region,2 a study of the Asian Development Bank,3 the
Manila Observatory4 and the Department of Environment and Natural
Resources5 (DENR) on the high growth and low turnover in vehicle
ownership in the Philippines, including diesel-powered vehicles, two-stroke
engine powered motorcycles and their concomitant emission of air
pollutants, petitioners attempt to present a compelling case for judicial
action against the bane of air pollution and related environmental hazards.
Petitioners allege that the particulate matters (PM) complex mixtures of
dust, dirt, smoke, and liquid droplets, varying in sizes and compositions
emitted into the air from various engine combustions have caused
detrimental effects on health, productivity, infrastructure and the overall
quality of life. Petitioners particularly cite the effects of certain fuel
emissions from engine combustion when these react to other pollutants.
For instance, petitioners aver, with hydrocarbons, oxide of nitrogen (NOx)
creates smog; with sulfur dioxide, it creates acid rain; and with ammonia,
moisture and other compounds, it reacts to form nitric acid and harmful
nitrates. Fuel emissions also cause retardation and leaf bleaching in plants.
According to petitioner, another emission, carbon monoxide (CO), when not
completely burned but emitted into the atmosphere and then inhaled can
disrupt the necessary oxygen in blood. With prolonged exposure, CO
affects the nervous system and can be lethal to people with weak hearts.6
Petitioners add that although much of the new power generated in the
country will use natural gas while a number of oil and coal-fired fuel
stations are being phased-out, still with the projected doubling of power
generation over the next 10 years, and with the continuing high demand

for motor vehicles, the energy and transport sectors are likely to remain
the major sources of harmful emissions. Petitioners refer us to the study of
the Philippine Environment Monitor 20027, stating that in four of the
country's major cities, Metro Manila, Davao, Cebu and Baguio, the
exposure to PM10, a finer PM which can penetrate deep into the lungs
causing serious health problems, is estimated at over US$430 million.8 The
study also reports that the emissions of PMs have caused the following:
Over 2,000 people die prematurely. This loss is valued at about
US$140 million.
Over 9,000 people suffer from chronic bronchitis, which is valued
at about US$120 million.
Nearly 51 million cases of respiratory symptom days in Metro
Manila (averaging twice a year in Davao and Cebu, and five to six
times in Metro Manila and Baguio), costs about US$170 million.
This is a 70 percent increase, over a decade, when compared with
the findings of a similar study done in 1992 for Metro Manila, which
reported 33 million cases.9
Petitioners likewise cite the University of the Philippines' studies in 1990-91
and 1994 showing that vehicular emissions in Metro Manila have resulted
to the prevalence of chronic obstructive pulmonary diseases (COPD); that
pulmonary tuberculosis is highest among jeepney drivers; and there is a
4.8 to 27.5 percent prevalence of respiratory symptoms among school
children and 15.8 to 40.6 percent among child vendors. The studies also
revealed that the children in Metro Manila showed more compromised
pulmonary function than their rural counterparts. Petitioners infer that
these are mostly due to the emissions of PUVs.
To counter the aforementioned detrimental effects of emissions from PUVs,
petitioners propose the use of CNG. According to petitioners, CNG is a
natural gas comprised mostly of methane which although containing small
amounts of propane and butane,10 is colorless and odorless and
considered the cleanest fossil fuel because it produces much less
pollutants than coal and petroleum; produces up to 90 percent less CO
compared to gasoline and diesel fuel; reduces NOx emissions by 50
percent and cuts hydrocarbon emissions by half; emits 60 percent less
PMs; and releases virtually no sulfur dioxide. Although, according to
petitioners, the only drawback of CNG is that it produces more methane,
one of the gases blamed for global warming.11
Asserting their right to clean air, petitioners contend that the bases for
their petition for a writ of mandamus to order the LTFRB to require PUVs to
use CNG as an alternative fuel, lie in Section 16,12 Article II of the 1987
Constitution, our ruling in Oposa v. Factoran, Jr.,13 and Section 414 of
Republic Act No. 8749 otherwise known as the "Philippine Clean Air Act of
1999."

Meantime, following a subsequent motion, the Court granted petitioners'

motion to implead the Department of Transportation and Communications
(DOTC) as additional respondent.
In his Comment for respondents LTFRB and DOTC, the Solicitor General,
cites Section 3, Rule 65 of the Revised Rules of Court and explains that the
writ of mandamus is not the correct remedy since the writ may be issued
only to command a tribunal, corporation, board or person to do an act that
is required to be done, when he or it unlawfully neglects the performance
of an act which the law specifically enjoins as a duty resulting from an
office, trust or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, there being
no other plain, speedy and adequate remedy in the ordinary course of
law.15 Further citing existing jurisprudence, the Solicitor General explains
that in contrast to a discretionary act, a ministerial act, which a mandamus
is, is one in which an officer or tribunal performs in a given state of facts, in
a prescribed manner, in obedience to a mandate of legal authority, without
regard to or the exercise of his own judgment upon the propriety or
impropriety of an act done.
The Solicitor General also notes that nothing in Rep. Act No. 8749 that
petitioners invoke, prohibits the use of gasoline and diesel by owners of
motor vehicles. Sadly too, according to the Solicitor General, Rep. Act No.
8749 does not even mention the existence of CNG as alternative fuel and
avers that unless this law is amended to provide CNG as alternative fuel for
PUVs, the respondents cannot propose that PUVs use CNG as alternative
fuel.
The Solicitor General also adds that it is the DENR that is tasked to
implement Rep. Act No. 8749 and not the LTFRB nor the DOTC. Moreover,
he says, it is the Department of Energy (DOE), under Section 2616 of Rep.
Act No. 8749, that is required to set the specifications for all types of fuel
and fuel-related products to improve fuel compositions for improved
efficiency and reduced emissions. He adds that under Section 2117 of the
cited Republic Act, the DOTC is limited to implementing the emission
standards for motor vehicles, and the herein respondents cannot alter,
change or modify the emission standards. The Solicitor General opines that
the Court should declare the instant petition for mandamus without merit.
Petitioners, in their Reply, insist that the respondents possess the
administrative and regulatory powers to implement measures in
accordance with the policies and principles mandated by Rep. Act No.
8749, specifically Section 218 and Section 21.19 Petitioners state that
under these laws and with all the available information provided by the
DOE on the benefits of CNG, respondents cannot ignore the existence of
CNG, and their failure to recognize CNG and compel its use by PUVs as
alternative fuel while air pollution brought about by the emissions of
gasoline and diesel endanger the environment and the people, is
tantamount to neglect in the performance of a duty which the law enjoins.

Lastly, petitioners aver that other than the writ applied for, they have no
other plain, speedy and adequate remedy in the ordinary course of law.
Petitioners insist that the writ in fact should be issued pursuant to the very
same Section 3, Rule 65 of the Revised Rules of Court that the Solicitor
General invokes.

the emission standards set forth in Rep. Act No. 8749 and the said law only
goes as far as setting the maximum limit for the emission of vehicles, but it
does not recognize CNG as alternative engine fuel. The Solicitor General
avers that the petition should be addressed to Congress for it to come up
with a policy that would compel the use of CNG as alternative fuel.

In their Memorandum, petitioners phrase the issues before us as follows:

Patently, this Court is being asked to resolve issues that are not only
procedural. Petitioners challenge this Court to decide if what petitioners
propose could be done through a less circuitous, speedy and unchartered
course in an issue that Chief Justice Hilario G. Davide, Jr. in his ponencia in
the Oposa case,24 describes as "inter-generational responsibility" and
"inter-generational justice."

I. WHETHER OR NOT THE PETITIONERS HAVE THE PERSONALITY TO

BRING THE PRESENT ACTION
II. WHETHER OR NOT THE PRESENT ACTION IS SUPPORTED BY LAW
III. WHETHER OR NOT THE RESPONDENT IS THE AGENCY
RESPONSIBLE TO IMPLEMENT THE SUGGESTED ALTERNATIVE OF
REQUIRING PUBLIC UTILITY VEHICLES TO USE COMPRESSED
NATURAL GAS (CNG)
IV. WHETHER OR NOT THE RESPONDENT CAN BE COMPELLED TO
REQUIRE PUBLIC UTILITY VEHICLES TO USE COMPRESSED NATURAL
GAS THROUGH A WRIT OF MANDAMUS20
Briefly put, the issues are two-fold. First, Do petitioners have legal
personality to bring this petition before us? Second, Should mandamus
issue against respondents to compel PUVs to use CNG as alternative fuel?
According to petitioners, Section 16,21 Article II of the 1987 Constitution is
the policy statement that bestows on the people the right to breathe clean
air in a healthy environment. This policy is enunciated in Oposa.22 The
implementation of this policy is articulated in Rep. Act No. 8749. These,
according to petitioners, are the bases for their standing to file the instant
petition. They aver that when there is an omission by the government to
safeguard a right, in this case their right to clean air, then, the citizens can
resort to and exhaust all remedies to challenge this omission by the
government. This, they say, is embodied in Section 423 of Rep. Act No.
8749.
Petitioners insist that since it is the LTFRB and the DOTC that are the
government agencies clothed with power to regulate and control motor
vehicles, particularly PUVs, and with the same agencies' awareness and
knowledge that the PUVs emit dangerous levels of air pollutants, then, the
responsibility to see that these are curbed falls under respondents'
functions and a writ of mandamus should issue against them.

Now, as to petitioners' standing. There is no dispute that petitioners have

standing to bring their case before this Court. Even respondents do not
question their standing. This petition focuses on one fundamental legal
right of petitioners, their right to clean air. Moreover, as held previously, a
party's standing before this Court is a procedural technicality which may, in
the exercise of the Court's discretion, be set aside in view of the
importance of the issue raised. We brush aside this issue of technicality
under the principle of the transcendental importance to the public,
especially so if these cases demand that they be settled promptly.
Undeniably, the right to clean air not only is an issue of paramount
importance to petitioners for it concerns the air they breathe, but it is also
impressed with public interest. The consequences of the counterproductive and retrogressive effects of a neglected environment due to
emissions of motor vehicles immeasurably affect the well-being of
petitioners. On these considerations, the legal standing of the petitioners
deserves recognition.
Our next concern is whether the writ of mandamus is the proper remedy,
and if the writ could issue against respondents.
Under Section 3, Rule 65 of the Rules of Court, mandamus lies under any of
the following cases: (1) against any tribunal which unlawfully neglects the
performance of an act which the law specifically enjoins as a duty; (2) in
case any corporation, board or person unlawfully neglects the performance
of an act which the law enjoins as a duty resulting from an office, trust, or
station; and (3) in case any tribunal, corporation, board or person
unlawfully excludes another from the use and enjoyment of a right or office
to which such other is legally entitled; and there is no other plain, speedy,
and adequate remedy in the ordinary course of law.
In University of San Agustin, Inc. v. Court of Appeals,25 we said,

The Solicitor General, for his part, reiterates his position that the
respondent government agencies, the DOTC and the LTFRB, are not in a
position to compel the PUVs to use CNG as alternative fuel. The Solicitor
General explains that the function of the DOTC is limited to implementing

It is settled that mandamus is employed to compel the

performance, when refused, of a ministerial duty, this
being its main objective. It does not lie to require anyone

to fulfill contractual obligations or to compel a course of

conduct, nor to control or review the exercise of discretion.
On the part of the petitioner, it is essential to the issuance
of a writ of mandamus that he should have a clear legal
right to the thing demanded and it must be the imperative
duty of the respondent to perform the act required. It never
issues in doubtful cases. While it may not be necessary
that the duty be absolutely expressed, it must however, be
clear. The writ will not issue to compel an official to do
anything which is not his duty to do or which is his duty not
to do, or give to the applicant anything to which he is not
entitled by law. The writ neither confers powers nor
imposes duties. It is simply a command to exercise a power
already possessed and to perform a duty already imposed.
(Emphasis supplied.)
In this petition the legal right which is sought to be recognized and
enforced hinges on a constitutional and a statutory policy already
articulated in operational terms, e.g. in Rep. Act No. 8749, the Philippine
Clean Air Act of 1999. Paragraph (a), Section 21 of the Act specifically
provides that when PUVs are concerned, the responsibility of implementing
the policy falls on respondent DOTC. It provides as follows:
SEC 21. Pollution from Motor Vehicles. - a) The DOTC shall
implement the emission standards for motor vehicles set pursuant
to and as provided in this Act. To further improve the emission
standards, the Department [DENR] shall review, revise and publish
the standards every two (2) years, or as the need arises. It shall
consider the maximum limits for all major pollutants to ensure
substantial improvement in air quality for the health, safety and
welfare of the general public.
Paragraph (b) states:
b) The Department [DENR] in collaboration with the DOTC, DTI and
LGUs, shall develop an action plan for the control and
management of air pollution from motor vehicles consistent
with the Integrated Air Quality Framework . . . . (Emphasis
supplied.)
There is no dispute that under the Clean Air Act it is the DENR that is
tasked to set the emission standards for fuel use and the task of
developing an action plan. As far as motor vehicles are concerned, it
devolves upon the DOTC and the line agency whose mandate is to oversee
that motor vehicles prepare an action plan and implement the emission
standards for motor vehicles, namely the LTFRB.
In Oposa26 we said, the right to a balanced and healthful ecology carries
with it the correlative duty to refrain from impairing the environment. We

also said, it is clearly the duty of the responsible government agencies to

advance the said right.
Petitioners invoke the provisions of the Constitution and the Clean Air Act
in their prayer for issuance of a writ of mandamus commanding the
respondents to require PUVs to use CNG as an alternative fuel. Although
both are general mandates that do not specifically enjoin the use of any
kind of fuel, particularly the use of CNG, there is an executive order
implementing a program on the use of CNG by public vehicles. Executive
Order No. 290, entitled Implementing the Natural Gas Vehicle Program for
Public Transport (NGVPPT), took effect on February 24, 2004. The program
recognized, among others, natural gas as a clean burning alternative fuel
for vehicle which has the potential to produce substantially lower
pollutants; and the Malampaya Gas-to-Power Project as representing the
beginning of the natural gas industry of the Philippines. Paragraph 1.2,
Section 1 of E.O. No. 290 cites as one of its objectives, the use of CNG as a
clean alternative fuel for transport. Furthermore, one of the components of
the program is the development of CNG refueling stations and all related
facilities in strategic locations in the country to serve the needs of CNGpowered PUVs. Section 3 of E.O. No. 290, consistent with E.O. No. 66,
series of 2002, designated the DOE as the lead agency (a) in developing
the natural gas industry of the country with the DENR, through the EMB
and (b) in formulating emission standards for CNG. Most significantly, par.
4.5, Section 4 tasks the DOTC, working with the DOE, to develop an
implementation plan for "a gradual shift to CNG fuel utilization in PUVs and
promote NGVs [natural gas vehicles] in Metro Manila and Luzon through
the issuance of directives/orders providing preferential franchises in
present day major routes and exclusive franchises to NGVs in newly
opened routes" A thorough reading of the executive order assures us that
implementation for a cleaner environment is being addressed. To a certain
extent, the instant petition had been mooted by the issuance of E.O. No.
290.
Regrettably, however, the plain, speedy and adequate remedy herein
sought by petitioners, i.e., a writ of mandamus commanding the
respondents to require PUVs to use CNG, is unavailing. Mandamus is
available only to compel the doing of an act specifically enjoined by law as
a duty. Here, there is no law that mandates the respondents LTFRB and the
DOTC to order owners of motor vehicles to use CNG. At most the LTFRB has
been tasked by E.O. No. 290 in par. 4.5 (ii), Section 4 "to grant preferential
and exclusive Certificates of Public Convenience (CPC) or franchises to
operators of NGVs based on the results of the DOTC surveys."
Further, mandamus will not generally lie from one branch of government to
a coordinate branch, for the obvious reason that neither is inferior to the
other.27 The need for future changes in both legislation and its
implementation cannot be preempted by orders from this Court, especially
when what is prayed for is procedurally infirm. Besides, comity with and
courtesy to a coequal branch dictate that we give sufficient time and

leeway for the coequal branches to address by themselves the

environmental problems raised in this petition.
In the same manner that we have associated the fundamental right to a
balanced and healthful ecology with the twin concepts of "intergenerational responsibility" and "inter-generational justice" in Oposa,28
where we upheld the right of future Filipinos to prevent the destruction of
the rainforests, so do we recognize, in this petition, the right of petitioners
and the future generation to clean air. In Oposa we said that if the right to
a balanced and healthful ecology is now explicitly found in the Constitution
even if the right is "assumed to exist from the inception of humankind, it
is because of the well-founded fear of its framers [of the Constitution] that
unless the rights to a balanced and healthful ecology and to health are
mandated as state policies by the Constitution itself, thereby highlighting
their continuing importance and imposing upon the state a solemn
obligation to preserve the first and protect and advance the second, the
day would not be too far when all else would be lost not only for the
present generation, but also for those to come. . ."29
It is the firm belief of this Court that in this case, it is timely to reaffirm the
premium we have placed on the protection of the environment in the
landmark case of Oposa. Yet, as serious as the statistics are on air
pollution, with the present fuels deemed toxic as they are to the
environment, as fatal as these pollutants are to the health of the citizens,
and urgently requiring resort to drastic measures to reduce air pollutants
emitted by motor vehicles, we must admit in particular that petitioners are
unable to pinpoint the law that imposes an indubitable legal duty on
respondents that will justify a grant of the writ of mandamus compelling
the use of CNG for public utility vehicles. It appears to us that more
properly, the legislature should provide first the specific statutory remedy
to the complex environmental problems bared by herein petitioners before
any judicial recourse by mandamus is taken.
WHEREFORE, the petition for the issuance of a writ of mandamus is
DISMISSED for lack of merit.
SO ORDERED.

minor, represented by her parents SIGRID and DOLORES FORTUN,

GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA MISA, BENJAMIN
ALAN V. PESIGAN, minor, represented by his parents ANTONIO and
ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her
parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T.
CASTRO, minor, represented by her parents FREDENIL and JANE
CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA
DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented by
his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA.
MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE,
all surnamed SAENZ, minors, represented by their parents
ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY,
GOLDA MARTHE and DAVID IAN, all surnamed KING, minors,
represented by their parents MARIO and HAYDEE KING, DAVID,
FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA,
minors, represented by their parents BALTAZAR and TERESITA
ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors,
represented by their parents ANTONIO and MARICA ABAYA,
MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA,
minors, represented by their parents MARIO and LINA CARDAMA,
CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed
OPOSA, minors and represented by their parents RICARDO and
MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH
JAMES, all surnamed QUIPIT, minors, represented by their parents
JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA,
DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented
by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE
PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as
the Secretary of the Department of Environment and Natural
Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding
Judge of the RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.

G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed
OPOSA, minors, and represented by their parents ANTONIO and
RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by
her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD
and PATRISHA, all surnamed FLORES, minors and represented by
their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN,

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a
balanced and healthful ecology which the petitioners dramatically

associate with the twin concepts of "inter-generational responsibility" and

"inter-generational justice." Specifically, it touches on the issue of whether
the said petitioners have a cause of action to "prevent the
misappropriation or impairment" of Philippine rainforests and "arrest the
unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed
before Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC),
National Capital Judicial Region. The principal plaintiffs therein, now the
principal petitioners, are all minors duly represented and joined by their
respective parents. Impleaded as an additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit
corporation organized for the purpose of, inter alia, engaging in concerted
action geared for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S. Factoran, Jr., then
Secretary of the Department of Environment and Natural Resources
(DENR). His substitution in this petition by the new Secretary, the
Honorable Angel C. Alcala, was subsequently ordered upon proper motion
by the petitioners. 1 The complaint 2 was instituted as a taxpayers' class
suit 3 and alleges that the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit, use and enjoyment
of the natural resource treasure that is the country's virgin tropical forests."
The same was filed for themselves and others who are equally concerned
about the preservation of said resource but are "so numerous that it is
impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet
unborn." 4 Consequently, it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and
other persons acting in his behalf to
(1) Cancel all existing timber license agreements in the
country;
(2) Cease and desist from receiving, accepting, processing,
renewing or approving new timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under
the premises." 5
The complaint starts off with the general averments that the Philippine
archipelago of 7,100 islands has a land area of thirty million (30,000,000)
hectares and is endowed with rich, lush and verdant rainforests in which
varied, rare and unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool which is

irreplaceable; they are also the habitat of indigenous Philippine cultures

which have existed, endured and flourished since time immemorial;
scientific evidence reveals that in order to maintain a balanced and
healthful ecology, the country's land area should be utilized on the basis of
a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent
(46%) for agricultural, residential, industrial, commercial and other uses;
the distortion and disturbance of this balance as a consequence of
deforestation have resulted in a host of environmental tragedies, such as
(a) water shortages resulting from drying up of the water table, otherwise
known as the "aquifer," as well as of rivers, brooks and streams, (b)
salinization of the water table as a result of the intrusion therein of salt
water, incontrovertible examples of which may be found in the island of
Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the
consequential loss of soil fertility and agricultural productivity, with the
volume of soil eroded estimated at one billion (1,000,000,000) cubic
meters per annum approximately the size of the entire island of
Catanduanes, (d) the endangering and extinction of the country's unique,
rare and varied flora and fauna, (e) the disturbance and dislocation of
cultural communities, including the disappearance of the Filipino's
indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a
critical reduction in marine resource productivity, (g) recurrent spells of
drought as is presently experienced by the entire country, (h) increasing
velocity of typhoon winds which result from the absence of windbreakers,
(i) the floodings of lowlands and agricultural plains arising from the
absence of the absorbent mechanism of forests, (j) the siltation and
shortening of the lifespan of multi-billion peso dams constructed and
operated for the purpose of supplying water for domestic uses, irrigation
and the generation of electric power, and (k) the reduction of the earth's
capacity to process carbon dioxide gases which has led to perplexing and
catastrophic climatic changes such as the phenomenon of global warming,
otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of
continued and deforestation are so capable of unquestionable
demonstration that the same may be submitted as a matter of judicial
notice. This notwithstanding, they expressed their intention to present
expert witnesses as well as documentary, photographic and film evidence
in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some

sixteen (16) million hectares of rainforests constituting
roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there
remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land
area.
10. More recent surveys reveal that a mere 850,000
hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and
uneconomical secondary growth forests.
11. Public records reveal that the defendant's,
predecessors have granted timber license agreements
('TLA's') to various corporations to cut the aggregate area
of 3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas
covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000
hectares per annum or 25 hectares per hour nighttime,
Saturdays, Sundays and holidays included the
Philippines will be bereft of forest resources after the end of
this ensuing decade, if not earlier.

This act of defendant constitutes a misappropriation and/or

impairment of the natural resource property he holds in
trust for the benefit of plaintiff minors and succeeding
generations.
15. Plaintiffs have a clear and constitutional right to a
balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens
patriae.
16. Plaintiff have exhausted all administrative remedies
with the defendant's office. On March 2, 1990, plaintiffs
served upon defendant a final demand to cancel all logging
permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto
attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the
existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to
cancel the TLA's is an act violative of the rights of plaintiffs,
especially plaintiff minors who may be left with a country
that is desertified (sic), bare, barren and devoid of the
wonderful flora, fauna and indigenous cultures which the
Philippines had been abundantly blessed with.

13. The adverse effects, disastrous consequences, serious

injury and irreparable damage of this continued trend of
deforestation to the plaintiff minor's generation and to
generations yet unborn are evident and incontrovertible.
As a matter of fact, the environmental damages
enumerated in paragraph 6 hereof are already being felt,
experienced and suffered by the generation of plaintiff
adults.

19. Defendant's refusal to cancel the aforementioned TLA's

is manifestly contrary to the public policy enunciated in the
Philippine Environmental Policy which, in pertinent part,
states that it is the policy of the State

14. The continued allowance by defendant of TLA holders

to cut and deforest the remaining forest stands will work
great damage and irreparable injury to plaintiffs
especially plaintiff minors and their successors who may
never see, use, benefit from and enjoy this rare and unique
natural resource treasure.

(b) to fulfill the social, economic and other requirements of

present and future generations of Filipinos and;

(a) to create, develop, maintain and improve conditions

under which man and nature can thrive in productive and
enjoyable harmony with each other;

(c) to ensure the attainment of an environmental quality

that is conductive to a life of dignity and well-being. (P.D.
1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel

the aforementioned TLA's is contradictory to the
Constitutional policy of the State to
a. effect "a more equitable distribution of opportunities,
income and wealth" and "make full and efficient use of
natural resources (sic)." (Section 1, Article XII of the
Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and
resources (sic)" (Section 14, Article XIV, id.);
d. "protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm
and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of
humankind the natural law and violative of plaintiffs'
right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy
in law other than the instant action to arrest the unabated
hemorrhage of the country's vital life support systems and
continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a
Motion to Dismiss the complaint based on two (2) grounds, namely: (1) the
plaintiffs have no cause of action against him and (2) the issue raised by
the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990
Opposition to the Motion, the petitioners maintain that (1) the complaint
shows a clear and unmistakable cause of action, (2) the motion is dilatory
and (3) the action presents a justiciable question as it involves the
defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the
aforementioned motion to dismiss. 7 In the said order, not only was the
defendant's claim that the complaint states no cause of action against
him and that it raises a political question sustained, the respondent
Judge further ruled that the granting of the relief prayed for would result in
the impairment of contracts which is prohibited by the fundamental law of
the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule
65 of the Revised Rules of Court and ask this Court to rescind and set aside
the dismissal order on the ground that the respondent Judge gravely
abused his discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have also joined the
latter in this case. 8
On 14 May 1992, We resolved to give due course to the petition and
required the parties to submit their respective Memoranda after the Office
of the Solicitor General (OSG) filed a Comment in behalf of the respondents
and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a
cause of action as it contains sufficient allegations concerning their right to
a sound environment based on Articles 19, 20 and 21 of the Civil Code
(Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the
DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine
Environmental Policy), Section 16, Article II of the 1987 Constitution
recognizing the right of the people to a balanced and healthful ecology, the
concept of generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation embodied in
natural law. Petitioners likewise rely on the respondent's correlative
obligation per Section 4 of E.O. No. 192, to safeguard the people's right to
a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged
grave abuse of discretion in granting Timber License Agreements (TLAs) to
cover more areas for logging than what is available involves a judicial
question.
Anent the invocation by the respondent Judge of the Constitution's nonimpairment clause, petitioners maintain that the same does not apply in
this case because TLAs are not contracts. They likewise submit that even if
TLAs may be considered protected by the said clause, it is well settled that
they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to
allege in their complaint a specific legal right violated by the respondent
Secretary for which any relief is provided by law. They see nothing in the
complaint but vague and nebulous allegations concerning an
"environmental right" which supposedly entitles the petitioners to the
"protection by the state in its capacity as parens patriae." Such allegations,
according to them, do not reveal a valid cause of action. They then
reiterate the theory that the question of whether logging should be
permitted in the country is a political question which should be properly
addressed to the executive or legislative branches of Government. They

therefore assert that the petitioners' resources is not to file an action to

court, but to lobby before Congress for the passage of a bill that would ban
logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that
the same cannot be done by the State without due process of law. Once
issued, a TLA remains effective for a certain period of time usually for
twenty-five (25) years. During its effectivity, the same can neither be
revised nor cancelled unless the holder has been found, after due notice
and hearing, to have violated the terms of the agreement or other forestry
laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative
of the requirements of due process.
Before going any further, We must first focus on some procedural matters.
Petitioners instituted Civil Case No. 90-777 as a class suit. The original
defendant and the present respondents did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is indeed a class suit.
The subject matter of the complaint is of common and general interest not
just to several, but to all citizens of the Philippines. Consequently, since the
parties are so numerous, it, becomes impracticable, if not totally
impossible, to bring all of them before the court. We likewise declare that
the plaintiffs therein are numerous and representative enough to ensure
the full protection of all concerned interests. Hence, all the requisites for
the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules
of Court are present both in the said civil case and in the instant petition,
the latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors
assert that they represent their generation as well as generations yet
unborn. We find no difficulty in ruling that they can, for themselves, for
others of their generation and for the succeeding generations, file a class
suit. Their personality to sue in behalf of the succeeding generations can
only be based on the concept of intergenerational responsibility insofar as
the right to a balanced and healthful ecology is concerned. Such a right, as
hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its
entirety. 9 Such rhythm and harmony indispensably include, inter alia, the
judicious disposition, utilization, management, renewal and conservation of
the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that their exploration,
development and utilization be equitably accessible to the present as well
as future generations. 10 Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little differently, the
minors' assertion of their right to a sound environment constitutes, at the

same time, the performance of their obligation to ensure the protection of

that right for the generations to come.
The locus standi of the petitioners having thus been addressed, We shall
now proceed to the merits of the petition.
After a careful perusal of the complaint in question and a meticulous
consideration and evaluation of the issues raised and arguments adduced
by the parties, We do not hesitate to find for the petitioners and rule
against the respondent Judge's challenged order for having been issued
with grave abuse of discretion amounting to lack of jurisdiction. The
pertinent portions of the said order reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the
Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but
the noblest of all intentions, it (sic) fell short of alleging,
with sufficient definiteness, a specific legal right they are
seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2,
RRC). Furthermore, the Court notes that the Complaint is
replete with vague assumptions and vague conclusions
based on unverified data. In fine, plaintiffs fail to state a
cause of action in its Complaint against the herein
defendant.
Furthermore, the Court firmly believes that the matter
before it, being impressed with political color and involving
a matter of public policy, may not be taken cognizance of
by this Court without doing violence to the sacred principle
of "Separation of Powers" of the three (3) co-equal
branches of the Government.
The Court is likewise of the impression that it cannot, no
matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 11
We do not agree with the trial court's conclusions that the plaintiffs failed
to allege with sufficient definiteness a specific legal right involved or a

specific legal wrong committed, and that the complaint is replete with
vague assumptions and conclusions based on unverified data. A reading of
the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right the right
to a balanced and healthful ecology which, for the first time in our nation's
constitutional history, is solemnly incorporated in the fundamental law.
Section 16, Article II of the 1987 Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right of
the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.
This right unites with the right to health which is provided
for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to
health of the people and instill health consciousness
among them.
While the right to a balanced and healthful ecology is to be found under
the Declaration of Principles and State Policies and not under the Bill of
Rights, it does not follow that it is less important than any of the civil and
political rights enumerated in the latter. Such a right belongs to a different
category of rights altogether for it concerns nothing less than selfpreservation and self-perpetuation aptly and fittingly stressed by the
petitioners the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need
not even be written in the Constitution for they are assumed to exist from
the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers
that unless the rights to a balanced and healthful ecology and to health are
mandated as state policies by the Constitution itself, thereby highlighting
their continuing importance and imposing upon the state a solemn
obligation to preserve the first and protect and advance the second, the
day would not be too far when all else would be lost not only for the
present generation, but also for those to come generations which stand
to inherit nothing but parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative
duty to refrain from impairing the environment. During the debates on this
right in one of the plenary sessions of the 1986 Constitutional Commission,
the following exchange transpired between Commissioner Wilfrido
Villacorta and Commissioner Adolfo Azcuna who sponsored the section in
question:

MR. VILLACORTA:
Does this section mandate the State to
provide sanctions against all forms of
pollution air, water and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to
healthful (sic) environment necessarily
carries with it the correlative duty of not
impairing the same and, therefore,
sanctions may be provided for impairment
of environmental balance. 12
The said right implies, among many other things, the judicious
management and conservation of the country's forests.
Without such forests, the ecological or environmental balance
would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology
and the right to health, as well as the other related provisions of the
Constitution concerning the conservation, development and utilization of
the country's natural resources, 13 then President Corazon C. Aquino
promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which
expressly mandates that the Department of Environment and Natural
Resources "shall be the primary government agency responsible for the
conservation, management, development and proper use of the country's
environment and natural resources, specifically forest and grazing lands,
mineral, resources, including those in reservation and watershed areas,
and lands of the public domain, as well as the licensing and regulation of
all natural resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the welfare of the
present and future generations of Filipinos." Section 3 thereof makes the
following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the
policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of
the country's forest, mineral, land, off-shore areas and
other natural resources, including the protection and
enhancement of the quality of the environment, and
equitable access of the different segments of the
population to the development and the use of the country's
natural resources, not only for the present generation but

for future generations as well. It is also the policy of the

state to recognize and apply a true value system including
social and environmental cost implications relative to their
utilization, development and conservation of our natural
resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the
Administrative Code of 1987, 15 specifically in Section 1 thereof which
reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure,
for the benefit of the Filipino people, the full exploration
and development as well as the judicious disposition,
utilization, management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries, wildlife,
off-shore areas and other natural resources, consistent with
the necessity of maintaining a sound ecological balance
and protecting and enhancing the quality of the
environment and the objective of making the exploration,
development and utilization of such natural resources
equitably accessible to the different segments of the
present as well as future generations.
(2) The State shall likewise recognize and apply a true
value system that takes into account social and
environmental cost implications relative to the utilization,
development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining a sound
ecological balance and protecting and enhancing the quality of the
environment." Section 2 of the same Title, on the other hand, specifically
speaks of the mandate of the DENR; however, it makes particular reference
to the fact of the agency's being subject to law and higher authority. Said
section provides:
Sec. 2. Mandate. (1) The Department of Environment
and Natural Resources shall be primarily responsible for
the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in
charge of carrying out the State's constitutional mandate
to control and supervise the exploration, development,
utilization, and conservation of the country's natural
resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the
objectives which will serve as the bases for policy formulation, and have
defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987
Constitution, specific statutes already paid special attention to the
"environmental right" of the present and future generations. On 6 June
1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a
continuing policy of the State (a) to create, develop, maintain and improve
conditions under which man and nature can thrive in productive and
enjoyable harmony with each other, (b) to fulfill the social, economic and
other requirements of present and future generations of Filipinos, and (c) to
insure the attainment of an environmental quality that is conducive to a
life of dignity and well-being." 16 As its goal, it speaks of the
"responsibilities of each generation as trustee and guardian of the
environment for succeeding generations." 17 The latter statute, on the
other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a
balanced and healthful ecology is as clear as the DENR's duty under its
mandate and by virtue of its powers and functions under E.O. No. 192 and
the Administrative Code of 1987 to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty
or obligation to respect or protect the same gives rise to a cause of action.
Petitioners maintain that the granting of the TLAs, which they claim was
done with grave abuse of discretion, violated their right to a balanced and
healthful ecology; hence, the full protection thereof requires that no further
TLAs should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal
right or rights of the other; and its essential elements are
legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in
violation of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss based on the
ground that the complaint fails to state a cause of action, 19 the question
submitted to the court for resolution involves the sufficiency of the facts
alleged in the complaint itself. No other matter should be considered;
furthermore, the truth of falsity of the said allegations is beside the point
for the truth thereof is deemed hypothetically admitted. The only issue to
be resolved in such a case is: admitting such alleged facts to be true, may

the court render a valid judgment in accordance with the prayer in the
complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule
that the judiciary should "exercise the utmost care and circumspection in
passing upon a motion to dismiss on the ground of the absence thereof
[cause of action] lest, by its failure to manifest a correct appreciation of the
facts alleged and deemed hypothetically admitted, what the law grants or
recognizes is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the
statements under the introductory affirmative allegations, as well as the
specific averments under the sub-heading CAUSE OF ACTION, to be
adequate enough to show, prima facie, the claimed violation of their rights.
On the basis thereof, they may thus be granted, wholly or partly, the reliefs
prayed for. It bears stressing, however, that insofar as the cancellation of
the TLAs is concerned, there is the need to implead, as party defendants,
the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political
question. Policy formulation or determination by the executive or
legislative branches of Government is not squarely put in issue. What is
principally involved is the enforcement of a right vis-a-vis policies already
formulated and expressed in legislation. It must, nonetheless, be
emphasized that the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from
judicial inquiry or review. The second paragraph of section 1, Article VIII of
the Constitution states that:
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.
Commenting on this provision in his book, Philippine Political Law, 22 Mr.
Justice Isagani A. Cruz, a distinguished member of this Court, says:
The first part of the authority represents the traditional
concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to
enable the courts of justice to review what was before
forbidden territory, to wit, the discretion of the political
departments of the government.

As worded, the new provision vests in the judiciary, and

particularly the Supreme Court, the power to rule upon
even the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or
excess of jurisdiction because tainted with grave abuse of
discretion. The catch, of course, is the meaning of "grave
abuse of discretion," which is a very elastic phrase that can
expand or contract according to the disposition of the
judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court,
noted:
In the case now before us, the jurisdictional objection
becomes even less tenable and decisive. The reason is
that, even if we were to assume that the issue presented
before us was political in nature, we would still not be
precluded from revolving it under the expanded jurisdiction
conferred upon us that now covers, in proper cases, even
the political question. Article VII, Section 1, of the
Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the
non-impairment of contracts clause found in the Constitution. The court a
quo declared that:
The Court is likewise of the impression that it cannot, no
matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 24
We are not persuaded at all; on the contrary, We are amazed, if not
shocked, by such a sweeping pronouncement. In the first place, the
respondent Secretary did not, for obvious reasons, even invoke in his
motion to dismiss the non-impairment clause. If he had done so, he would
have acted with utmost infidelity to the Government by providing undue
and unwarranted benefits and advantages to the timber license holders
because he would have forever bound the Government to strictly respect
the said licenses according to their terms and conditions regardless of
changes in policy and the demands of public interest and welfare. He was
aware that as correctly pointed out by the petitioners, into every timber

license must be read Section 20 of the Forestry Reform Code (P.D. No. 705)
which provides:
. . . Provided, That when the national interest so requires,
the President may amend, modify, replace or rescind any
contract, concession, permit, licenses or any other form of
privilege granted herein . . .
Needless to say, all licenses may thus be revoked or rescinded by
executive action. It is not a contract, property or a property right
protested by the due process clause of the Constitution. In Tan vs.
Director of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the State
regulates the utilization and disposition of forest resources
to the end that public welfare is promoted. A timber license
is not a contract within the purview of the due process
clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public
welfare as in this case.
A license is merely a permit or privilege to do what
otherwise would be unlawful, and is not a contract between
the authority, federal, state, or municipal, granting it and
the person to whom it is granted; neither is it property or a
property right, nor does it create a vested right; nor is it
taxation (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights,
neither is it property or property rights (People vs. Ong Tin,
54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs.
Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are
the principal instruments by which the State regulates the
utilization and disposition of forest resources to the end
that public welfare is promoted. And it can hardly be
gainsaid that they merely evidence a privilege granted by
the State to qualified entities, and do not vest in the latter
a permanent or irrevocable right to the particular
concession area and the forest products therein. They may
be validly amended, modified, replaced or rescinded by the
Chief Executive when national interests so require. Thus,
they are not deemed contracts within the purview of the
due process of law clause [See Sections 3(ee) and 20 of

Pres. Decree No. 705, as amended. Also, Tan v. Director of

Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA
302].
Since timber licenses are not contracts, the non-impairment clause, which
reads:
Sec. 10. No law impairing, the obligation of contracts shall
be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that the same are
contracts, the instant case does not involve a law or even an executive
issuance declaring the cancellation or modification of existing timber
licenses. Hence, the non-impairment clause cannot as yet be invoked.
Nevertheless, granting further that a law has actually been passed
mandating cancellations or modifications, the same cannot still be
stigmatized as a violation of the non-impairment clause. This is because by
its very nature and purpose, such as law could have only been passed in
the exercise of the police power of the state for the purpose of advancing
the right of the people to a balanced and healthful ecology, promoting their
health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government,
is not meant to be absolute. The same is understood to be
subject to reasonable legislative regulation aimed at the
promotion of public health, moral, safety and welfare. In
other words, the constitutional guaranty of non-impairment
of obligations of contract is limited by the exercise of the
police power of the State, in the interest of public health,
safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29
quoted in Philippine American Life Insurance Co. vs. Auditor General, 30 to
wit:
Under our form of government the use of property and the
making of contracts are normally matters of private and
not of public concern. The general rule is that both shall be
free of governmental interference. But neither property
rights nor contract rights are absolute; for government
cannot exist if the citizen may at will use his property to
the detriment of his fellows, or exercise his freedom of
contract to work them harm. Equally fundamental with the

private right is that of the public to regulate it in the

common interest.
In short, the non-impairment clause must yield to the police power of the
state. 31
Finally, it is difficult to imagine, as the trial court did, how the nonimpairment clause could apply with respect to the prayer to enjoin the
respondent Secretary from receiving, accepting, processing, renewing or
approving new timber licenses for, save in cases of renewal, no contract
would have as of yet existed in the other instances. Moreover, with respect
to renewal, the holder is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby
GRANTED, and the challenged Order of respondent Judge of 18 July 1991
dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may
therefore amend their complaint to implead as defendants the holders or
grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 79538 October 18, 1990

FELIPE YSMAEL, JR. & CO., INC., petitioner,
vs.
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF
ENVIRONMENT AND NATURAL RESOURCES, THE DIRECTOR OF THE
BUREAU OF FOREST DEVELOPMENT and TWIN PEAKS
DEVELOPMENT AND REALTY CORPORATION, respondents.
Taada, Vivo & Tan for petitioner.
Antonio E. Escober and Jurado Law Office for respondent Twin Peaks
Development Corporation.

COURTS, J.:
Soon after the change of government in February 1986, petitioner sent a
letter dated March 17, 1986 to the Office of the President, and another

letter dated April 2, 1986 to Minister Ernesto Maceda of the Ministry of

Natural Resources [MNR], seeking: (1) the reinstatement of its timber
license agreement which was cancelled in August 1983 during the Marcos
administration; (2) the revocation of TLA No. 356 which was issued to Twin
Peaks Development and Realty Corporation without public bidding and in
violation of forestry laws, rules and regulations; and, (3) the issuance of an
order allowing petitioner to take possession of all logs found in the
concession area [Annexes "6" and "7" of the Petition; Rollo, pp. 54-63].
Petitioner made the following allegations:
(a) That on October 12, 1965, it entered into a timber license agreement
designated as TLA No. 87 with the Department of Agriculture and Natural
Resources, represented by then Secretary Jose Feliciano, wherein it was
issued an exclusive license to cut, collect and remove timber except
prohibited species within a specified portion of public forest land with an
area of 54,920 hectares located in the municipality of Maddela, province of
Nueva Vizcaya * from October 12, 1965 until June 30, 1990;
(b) That on August 18, 1983, the Director of the Bureau of Forest
Development [hereinafter referred to as "Bureau"], Director Edmundo
Cortes, issued a memorandum order stopping all logging operations in
Nueva Vizcaya and Quirino provinces, and cancelling the logging
concession of petitioner and nine other forest concessionaires, pursuant to
presidential instructions and a memorandum order of the Minister of
Natural Resources Teodoro Pena [Annex "5" of the Petition; Rollo, p. 49];
(c) that on August 25, 1983, petitioner received a telegram from the
Bureau, the contents of which were as follows:
PURSUANT TO THE INSTRUCTIONS OF THE PRESIDENT YOU
ARE REQUESTED TO STOP ALL LOGGING OPERATIONS TO
CONSERVE REMAINING FORESTS PLEASE CONDUCT THE
ORDERLY PULL-OUT OF LOGGING MACHINERIES AND
EQUIPMENT AND COORDINATE WITH THE RESPECTIVE
DISTRICT FORESTERS FOR THE INVENTORY OF LOGS CUT
PRIOR TO THIS ORDER THE SUBMISSION OF A COMPLIANCE
REPORT WITHIN THIRTY DAYS SHALL BE APPRECIATED
[Annex "4" of the Petition; Rollo, p. 48];
(d) That after the cancellation of its timber license agreement, it
immediately sent a letter addressed to then President Ferdinand Marcos
which sought reconsideration of the Bureau's directive, citing in support
thereof its contributions to alleging that it was not given the forest
conservation and opportunity to be heard prior to the cancellation of its

logging 531, but no operations (Annex "6" of the Petition; Rollo, pp. 50
favorable action was taken on this letter;
(e) That barely one year thereafter, approximately one-half or 26,000
hectares of the area formerly covered by TLA No. 87 was re-awarded to
Twin Peaks Development and Reality Corporation under TLA No. 356 which
was set to expire on July 31, 2009, while the other half was allowed to be
logged by Filipinas Loggers, Inc. without the benefit of a formal award or
license; and,
(f) That the latter entities were controlled or owned by relatives or cronies
of deposed President Ferdinand Marcos. Acting on petitioner's letter, the
MNR through then Minister Ernesto Maceda issued an order dated July 22,
1986 denying petitioner's request. The Ministry ruled that a timber license
was not a contract within the due process clause of the Constitution, but
only a privilege which could be withdrawn whenever public interest or
welfare so demands, and that petitioner was not discriminated against in
view of the fact that it was among ten concessionaires whose licenses were
revoked in 1983. Moreover, emphasis was made of the total ban of logging
operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and
Ifugao imposed on April 2, 1986, thus:
xxx xxx xxx
It should be recalled that [petitioner's] earlier request for
reinstatement has been denied in view of the total ban of
all logging operations in the provinces of Nueva Ecija,
Nueva Vizcaya, Quirino and Ifugao which was imposed for
reasons of conservation and national security.
The Ministry imposed the ban because it realizes the great
responsibility it bear [sic] in respect to forest t considers
itself the trustee thereof. This being the case, it has to
ensure the availability of forest resources not only for the
present, but also for the future generations of Filipinos.
On the other hand, the activities of the insurgents in these
parts of the country are well documented. Their financial
demands on logging concessionaires are well known. The
government, therefore, is well within its right to deprive its
enemy of sources of funds in order to preserve itself, its
established institutions and the liberty and democratic way
of life of its people.
xxx xxx xxx

[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.]

Petitioner moved for reconsideration of the aforestated order reiterating,
among others. its request that TLA No. 356 issued to private respondent be
declared null and void. The MNR however denied this motion in an order
dated September 15, 1986. stating in part:
xxx xxx xxx
Regarding [petitioner's] request that the award of a 26,000
hectare portion of TLA No. 87 to Twin Peaks Realty
Development Corporation under TLA No. 356 be declared
null and void, suffice it to say that the Ministry is now in
the process of reviewing all contracts, permits or other
form of privileges for the exploration, development,
exploitation, or utilization of natural resources entered into,
granted, issued or acquired before the issuance of
Proclamation No. 3, otherwise known as the Freedom
Constitution for the purpose of amending, modifying or
revoking them when the national interest so requires.
xxx xxx xxx
The Ministry, through the Bureau of Forest Development,
has jurisdiction and authority over all forest lands. On the
basis of this authority, the Ministry issued the order
banning all logging operations/activities in Quirino
province, among others, where movant's former
concession area is located. Therefore, the issuance of an
order disallowing any person or entity from removing cut or
uncut logs from the portion of TLA No. 87, now under TLA
No. 356, would constitute an unnecessary or superfluous
act on the part of the Ministry.
xxx xxx xxx
[Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.]
On November 26, 1986, petitioner's supplemental motion for
reconsideration was likewise denied. Meanwhile, per MNR Administrative
Order No. 54, series of 1986, issued on November 26, 1986, the logging
ban in the province of Quirino was lifted.
Petitioner subsequently appealed from the orders of the MNR to the Office
of the President. In a resolution dated July 6, 1987, the Office of the

President, acting through then Deputy Executive Secretary Catalino

Macaraig, denied petitioner's appeal for lack of merit. The Office of the
President ruled that the appeal of petitioner was prematurely filed, the
matter not having been terminated in the MNR. Petitioner's motion for
reconsideration was denied on August 14, 1987.

appointed Minister of the MNR requesting reconsideration of the above

Bureau actions, these were already settled matters as far as petitioner was
concerned [See Rueda v. Court of Agrarian Relations, 106 Phil. 300 (1959);
Danan v. Aspillera G.R. No. L-17305, November 28, 1962, 6 SCRA 609;
Ocampo v. Arboleda G.R. No. L-48190, August 31, 1987, 153 SCRA 374].

Hence, petitioner filed directly with this Court a petition for certiorari, with
prayer for the issuance of a restraining order or writ of preliminary
injunction, on August 27, 1987. On October 13, 1987, it filed a supplement
to its petition for certiorari. Thereafter, public and private respondents
submitted their respective comments, and petitioner filed its consolidated
reply thereto. In a resolution dated May 22, 1989, the Court resolved to
give due course to the petition.

No particular significance can be attached to petitioner's letter dated

September 19, 1983 which petitioner claimed to have sent to then
President Marcos [Annex "6" of Petition, Rollo, pp. 50-53], seeking the
reconsideration of the 1983 order issued by Director Cortes of the Bureau.
It must be pointed out that the averments in this letter are entirely
different from the charges of fraud against officials under the previous
regime made by petitioner in its letters to public respondents herein. In the
letter to then President Marcos, petitioner simply contested its inclusion in
the list of concessionaires, whose licenses were cancelled, by defending its
record of selective logging and reforestation practices in the subject
concession area. Yet, no other administrative steps appear to have been
taken by petitioner until 1986, despite the fact that the alleged fraudulent
scheme became apparent in 1984 as evidenced by the awarding of the
subject timber concession area to other entities in that year.

After a careful study of the circumstances in the case at bar, the Court
finds several factors which militate against the issuance of a writ of
certiorari in favor of petitioner.
1. Firstly, the refusal of public respondents herein to reverse final and
executory administrative orders does not constitute grave abuse of
discretion amounting to lack or excess of jurisdiction.
It is an established doctrine in this jurisdiction that the decisions and
orders of administrative agencies have upon their finality, the force and
binding effect of a final judgment within the purview of the doctrine of res
judicata. These decisions and orders are as conclusive upon the rights of
the affected parties as though the same had been rendered by a court of
general jurisdiction. The rule of res judicata thus forbids the reopening of a
matter once determined by competent authority acting within their
exclusive jurisdiction [See Brillantes v. Castro, 99 Phil. 497 (1956);
Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430,
September 30, 1963, 9 SCRA 72; San Luis v. Court of Appeals, G.R. No.
80160, June 26, 1989].
In the case at bar, petitioner's letters to the Office of the President and the
MNR [now the Department of Environment and Natural Resources (DENR)
dated March 17, 1986 and April 2, 1986, respectively, sought the
reconsideration of a memorandum order issued by the Bureau of Forest
Development which cancelled its timber license agreement in 1983, as well
as the revocation of TLA No. 356 subsequently issued by the Bureau to
private respondents in 1984.
But as gleaned from the record, petitioner did not avail of its remedies
under the law, i.e. Section 8 of Pres. Dec. No. 705 as amended, for
attacking the validity of these administrative actions until after 1986. By
the time petitioner sent its letter dated April 2, 1986 to the newly

2. Moreover, petitioner is precluded from availing of the benefits of a writ

of certiorari in the present case because he failed to file his petition within
a reasonable period.
The principal issue ostensibly presented for resolution in the instant
petition is whether or not public respondents herein acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in refusing to
overturn administrative orders issued by their predecessors in the past
regime. Yet, what the petition ultimately seeks is the nullification of the
Bureau orders cancelling TLA No. 87 and granting TLA No. 356 to private
respondent, which were issued way back in 1983 and 1984, respectively.
Once again, the fact that petitioner failed to seasonably take judicial
recourse to have the earlier administrative actions reviewed by the courts
through a petition for certiorari is prejudicial to its cause. For although no
specific time frame is fixed for the institution of a special civil action for
certiorari under Rule 65 of the Revised Rules of Court, the same must
nevertheless be done within a "reasonable time". The yardstick to measure
the timeliness of a petition for certiorari is the "reasonableness of the
length of time that had expired from the commission of the acts
complained of up to the institution of the proceeding to annul the same"
[Toledo v. Pardo, G.R. No. 56761, November 19, 1982, 118 SCRA 566, 571].
And failure to file the petition for certiorari within a reasonable period of
time renders the petitioner susceptible to the adverse legal consequences

of laches [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No.

L-31628, December 27, 1982, 119 SCRA 392).
Laches is defined as the failure or neglect for an unreasonable and
unexplained length of time to do that which by exercising due diligence,
could or should have been done earlier, or to assert a right within a
reasonable time, warranting a presumption that the party entitled thereto
has either abandoned it or declined to assert it [Tijam v. Sibonghanoy, G.R.
No. L-21450, April 15, 1968, 23 SCRA 29; Seno v. Mangubat, G.R. No. L44339, December 2, 1987, 156 SCRA 113]. The rule is that unreasonable
delay on the part of a plaintiff in seeking to enforce an alleged right may,
depending upon the circumstances, be destructive of the right itself. Verily,
the laws aid those who are vigilant, not those who sleep upon their rights
(Vigilantibus et non dormientibus jura subveniunt) [See Buenaventura v.
David, 37 Phil. 435 (1918)].
In the case at bar, petitioner waited for at least three years before it finally
filed a petition for certiorari with the Court attacking the validity of the
assailed Bureau actions in 1983 and 1984. Considering that petitioner,
throughout the period of its inaction, was not deprived of the opportunity
to seek relief from the courts which were normally operating at the time,
its delay constitutes unreasonable and inexcusable neglect, tantamount to
laches. Accordingly, the writ of certiorari requiring the reversal of these
orders will not lie.
3. Finally, there is a more significant factor which bars the issuance of a
writ of certiorari in favor of petitioner and against public respondents
herein. It is precisely this for which prevents the Court from departing from
the general application of the rules enunciated above.
A cursory reading of the assailed orders issued by public respondent
Minister Maceda of the MNR which were ed by the Office of the President,
will disclose public policy consideration which effectively forestall judicial
interference in the case at bar,
Public respondents herein, upon whose shoulders rests the task of
implementing the policy to develop and conserve the country's natural
resources, have indicated an ongoing department evaluation of all timber
license agreements entered into, and permits or licenses issued, under the
previous dispensation. In fact, both the executive and legislative
departments of the incumbent administration are presently taking stock of
its environmental policies with regard to the utilization of timber lands and
developing an agenda for future programs for their conservation and
rehabilitation.

The ongoing administrative reassessment is apparently in response to the

renewed and growing global concern over the despoliation of forest lands
and the utter disregard of their crucial role in sustaining a balanced
ecological system. The legitimacy of such concern can hardly be disputed,
most especially in this country. The Court takes judicial notice of the
profligate waste of the country's forest resources which has not only
resulted in the irreversible loss of flora and fauna peculiar to the region,
but has produced even more disastrous and lasting economic and social
effects. The delicate balance of nature having been upset, a vicious cycle
of floods and droughts has been triggered and the supply of food and
energy resources required by the people seriously depleted.
While there is a desire to harness natural resources to amass profit and to
meet the country's immediate financial requirements, the more essential
need to ensure future generations of Filipinos of their survival in a viable
environment demands effective and circumspect action from the
government to check further denudation of whatever remains of the forest
lands. Nothing less is expected of the government, in view of the clear
constitutional command to maintain a balanced and healthful ecology.
Section 16 of Article II of the 1987 Constitution provides:
SEC. 16. The State shall protect and promote the right of
the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.
Thus, while the administration grapples with the complex and multifarious
problems caused by unbridled exploitation of these resources, the judiciary
will stand clear. A long line of cases establish the basic rule that the courts
will not interfere in matters which are addressed to the sound discretion of
government agencies entrusted with the regulation of activities coming
under the special technical knowledge and training of such agencies [See
Espinosa v. Makalintal, 79 Phil. 134 (1947); Coloso v. Board of Accountancy,
92 Phil. 938 (1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R.
No. L-19828, February 28, 1963, 7 SCRA 461; Ganitano v. Secretary of
Agriculture and Natural Resources, G. R. No. L-21167, March 31, 1966, 16
SCRA 543; Villegas v. Auditor General, G.R. No. L-21352, November 29,
1966, 18 SCRA 877; Manuel v. Villena, G.R. No. L-28218, February 27,
1971, 37 SCRA 745; Lacuesta v. Herrera, G.R. No. L-33646, January 28,
1975, 62 SCRA 115; Lianga Bay Logging Co., Inc. v. Enage, G.R. No. L30637, July 16, 1987, 152 SCRA 80]. More so where, as in the present case,
the interests of a private logging company are pitted against that of the
public at large on the pressing public policy issue of forest conservation.
For this Court recognizes the wide latitude of discretion possessed by the
government in determining the appropriate actions to be taken to preserve
and manage natural resources, and the proper parties who should enjoy
the privilege of utilizing these resources [Director of Forestry v. Munoz, G.R.
No. L-24796, June 28, 1968, 23 SCRA 1183; Lim, Sr. v. The Secretary of

Agriculture and Natural Resources, G.R. No. L-26990, August 31, 1970, 34
SCRA 751]. Timber licenses, permits and license agreements are the
principal instruments by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted.
And it can hardly be gainsaid that they merely evidence a privilege granted
by the State to qualified entities, and do not vest in the latter a permanent
or irrevocable right to the particular concession area and the forest
products therein. They may be validly amended, modified, replaced or
rescinded by the Chief Executive when national interests so require. Thus,
they are not deemed contracts within the purview of the due process of
law clause [See Sections 3 (ee) and 20 of Pres. Decree No. 705, as
amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27,
1983, 125 SCRA 302].
In fine, the legal precepts highlighted in the foregoing discussion more
than suffice to justify the Court's refusal to interfere in the DENR evaluation
of timber licenses and permits issued under the previous regime, or to preempt the adoption of appropriate corrective measures by the department.
Nevertheless, the Court cannot help but express its concern regarding
alleged irregularities in the issuance of timber license agreements to a
number of logging concessionaires.
The grant of licenses or permits to exploit the country's timber resources, if
done in contravention of the procedure outlined in the law, or as a result of
fraud and undue influence exerted on department officials, is indicative of
an arbitrary and whimsical exercise of the State's power to regulate the
use and exploitation of forest resources. The alleged practice of bestowing
"special favors" to preferred individuals, regardless of merit, would be an
abuse of this power. And this Court will not be a party to a flagrant
mockery of the avowed public policy of conservation enshrined in the 1987
Constitution. Therefore, should the appropriate case be brought showing a
clear grave abuse of discretion on the part of officials in the DENR and
related bureaus with respect to the implementation of this public policy,
the Court win not hesitate to step in and wield its authority, when invoked,
in the exercise of judicial powers under the Constitution [Section 1, Article
VIII].
However, petitioner having failed to make out a case showing grave abuse
of discretion on the part of public respondents herein, the Court finds no
basis to issue a writ of certiorari and to grant any of the affirmative reliefs
sought.
WHEREFORE, the present petition is DISMISSED.
SO ORDERED

G.R. No. 2869

March 25, 1907

MATEO CARIO, petitioner-appellant,

vs.
THE INSULAR GOVERNMENT, respondent-appellee.
Coudert Brothers for appellant.
Office of the Solicitor-General Araneta for appellee.
ARELLANO, C.J.:
Mateo Cario, the appellant herein, on the 23d of February, 1904, filed his
petition in the Court of Land Registration praying that there be granted to
him title to a parcel of land consisting of 40 hectares, 1 are, and 13
centares, and situated in the town of Baguio, Province of Benguet, together
with a house erected thereon and constructed of wood and roofed with
rimo, and bounded as follows: On the north, in lines running 1,048 metes
and 20 decimeters with the lands of Sepa Cario, H. Phelps Whitmarsh,
and Calsi; on the east, in lines running 991 meters and 50 decimeters with
the land of Kuidno, Esteban Gonzales, and of the Civil Government; on the
south, in lines of 115 meters and 60 decimeters, with the lands of Talaca;
and on the west, in lines running 982 meters and 20 decimeters, with the
lands of Sisco Cario and Mayengmeng.
By order of the court the hearing of this petition, No. 561, and that of
Antonio Rebollo and Vicente Valpiedad filed under No. 834, were heard
together for the reason that the latter petition claimed a small portion of
land included in the parcel set out in the former petition.
The Insular Government opposed the granting of these petitions, alleging
that the whole parcel of land is public property of the Government and that
the same was never acquired in any manner or through any title of
egresion from the State.
After trial, and the hearing of documentary and oral proof, the court of
Land Registration rendered its judgment in these terms:
Therefore the court finds that Cario and his predecessors have not
possessed exclusively and adversely any part of the said property
prior to the date on which Cario constructed the house now there
that is to say, for the years 1897 and 1898, and Cario held
possession for some years afterwards of but a part of the property
to which he claims title. Both petitions are dismissed and the
property in question is adjudged to be public land. (Bill of
exceptions, p. 15.)

The conclusions arrived at the set forth in definite terms in the decision of
the court below are the following:
From the testimony given by Cario as well as from that of several
of the witnesses for the Government it is deduced, that in or about
the year 1884 Cario erected and utilized as a domicile a house on
the property situated to the north of that property now in question,
property which, according to the plan attached to expediente No.
561, appears to be property belonging to Donaldson Sim; that
during the year 1893 Cario sold said house to one Cristobal
Ramos, who in turn sold the same to Donaldson Sim, moving to
and living on the adjoining property, which appears on the plan
aforesaid to be the property of H. Phelps Whitmarsh, a place where
the father and the grandfather of his wife, that is to say, Ortega
and Minse, had lived . . ..
In or about the years 1898 Cario abandoned the property of
Whitmarsh and located on the property described in the plan
attached to expediente No. 561, having constructed a house
thereon in which he now lives, and which house is situated in the
center of the property, as is indicated on the plan; and since which
time he has undoubtedly occupied some portion of the property
now claimed by him. (Bill of exceptions, pp. 11 and 12.)
1. Therefore it is evident that this court can not decree the registration of
all of the superficial extension of the land described in the petition and as
appears on the plan filed herein, such extension containing 40 hectares, 1
are, and 13 centares, inasmuch as the documentary evidence
accompanying the petition is conclusive proof against the petitioners; this
documentary proof consists of a possessory information under date of
March 7, 1901, and registered on the 11th day of the same month and
year; and, according to such possessory information, the land therein
described contains an extension of only 28 hectares limited by "the
country road to the barrio of Pias," a road appearing on the plan now
presented and cutting the land, as might be said, in half, or running
through its center from north to south, a considerable extension of land
remaining on the other side of the said road, the west side, and which
could not have been included in the possessory information mentioned.
2. As has been shown during the trial of this case, this land, of which
mention is made in said possessory information, and upon which is
situated the house now actually occupied by the petitioner, all of which is
set forth as argument as to the possession in the judgment, is "used for
pasture and sowing," and belongs to the class called public lands.

3. Under the express provisions of law, a parcel of land, being of common

origin, presumptively belonged to the State during its sovereignty, and, in
order to perfect the legitimate acquisition of such land by private persons,
it was necessary that the possession of the same pass from the State. And
there is no evidence or proof of title of egresion of this land from the
domain of the Spanish Government, nor is there any possessory
information equivalent to title by composicion or under agreement. 4, The
possessory information filed herein is not the title to property authorized in
substitution for that of adjustment by the royal decree of February 13,
1894, this being the last law or legal disposition of the former sovereignty
applicable to the present subject-matter of common lands: First, for the
reason that the land referred to herein is not covered nor does it come
within any one of the three conditions required by article 19 of the said
royal decree, to wit, that the land has been in an uninterrupted state of
cultivation during a period of six years last past; or that the same has been
possessed without interruption during a period of twelve years and has
been in a state of cultivation up to the date of the information and during
the three years immediately preceding such information; or that such land
had been possessed openly without interruption during a period of thirty or
more years, notwithstanding the land had not been cultivated; nor is it
necessary to refer to the testimony given by the two witnesses to the
possessory information for the following reason: Second, because the
possessory information authorized by said royal decree or last legal
disposition of the Spanish Government, as title or for the purpose of
acquiring actual proprietary right, equivalent to that of adjustment with the
Spanish Government and required and necessary at all times until the
publication of said royal decree was limited in time to one year, in
accordance with article 21, which is as follows: " A period of one year, not
to be extended, is allowed to verify the possessory informations which are
referred to in articles 19 and 20. After the expiration of this period of the
right of the cultivators and persons in possession to obtain gratuitous title
thereto lapses and the land together with full possession reverts to the
state, or, as the case may be, to the community, and the said possessors
and cultivators or their assigns would simply have rights under universal or
general title of average in the event that the land is sold within a period of
five years immediately following the cancellation. The possessors not
included under this chapter can only acquire by time the ownership and
title to unappropriated or royal lands in accordance with common law."
5. In accordance with the preceding provisions, the right that remained to
Cario, if it be certain that he was the true possessor of the land in
question, was the right of average in case the Government or State could
have sold the same within the period of five years immediately following
for example, if the denouncement of purchase had been carried out by
Felipe Zafra or any other person, as appears from the record of the trial of
the case. Aside from this right, in such event, his possession as attested in
the possessory information herein could not, in accordance with common

law, go to show any right of ownership until after the expiration of twenty
years from the expiration of twenty years from the verification and registry
of the same in conformity with the provisions of article 393 of the Mortgage
Law and other conditions prescribe by this law.
6. The right of possession in accordance with common law that is to say,
civil law remains at all times subordinate to the Spanish administrative
law, inasmuch as it could only be of force when pertaining to royal
transferable or alienable lands, which condition and the determination
thereof is reversed to the government, which classified and designated the
royal alienable lands for the purpose of distinguishing them from those
lands strictly public, and from forestry lands which could at no time pass to
private ownership nor be acquired through time even after the said royal
decree of February 13, 1894.
7. The advent of the new sovereignty necessarily brought a new method of
dealing with lands and particularly as to the classification and manner of
transfer and acquisition of royal or common lands then appropriated, which
were thenceforth merely called public lands, the alienation of which was
reserved to the Government, in accordance with section 12 and 13 of the
act of Congress of July 1, 1902,1 and in conformity with other laws enacted
under this act of Congress by the Philippine Commission prescribing rules
for the execution thereof, one of which is Act No. 648,2 herein mentioned
by the petitioner, in connection with Act No. 627,3 which appears to be the
law upon which the petition herein is founded.
8. Section 6 of Act No. 627 admits prescription, in accordance with the
provisions contained in Act No. 190, as a basis for obtaining the right of
ownership. "The petitioners claims title under the period of prescription of
ten years established by that act, as well as by reason of his occupancy
and use thereof from time immemorial." (Allegation 1.) But said act admits
such prescription for the purpose of obtaining title and ownership to lands
"not exceeding more that sixteen hectares in extent." (Sec. 6 of said act.)
The land claimed by Cario is 40 hectares in extent, if we take into
consideration his petition, or an extension of 28 hectares, according to the
possessory information, the only thing that can be considered. Therefore, it
follows that the judgment denying the petition herein and now appealed
from was strictly in accordance with the law invoked herein.
9. And of the 28 hectares of land as set out in the possessory information,
one part of same, according to the testimony of Cario, belongs to Vicente
Valpiedad, the extent of which is not determined. From all of which it
follows that the precise extent has not been determined in the trial of this
case on which judgment might be based in the event that the judgment
and title be declared in favor of the petitioner, Mateo Cario. And we
should not lose sight of the fact that, considering the intention of Congress

in granting ownership and title to 16 hectares, that Mateo Cario and his
children have already exceeded such amount in various acquirements of
lands, all of which is shown in different cases decided by the said Court of
Land Registration, donations or gifts of land that could only have been
made efficacious as to the conveyance thereof with the assistance of these
new laws.
By reason of the findings set forth it is clearly seen that the court below did
not err:
1. In finding that Mateo Cario and those from whom he claims his
right had not possessed and claimed as owners the lands in
question since time immemorial;
2. In finding that the land in question did not belong to the
petitioner, but that, on the contrary, it was the property of the
Government. (Allegation 21.)
Wherefore, the judgment appealed from is affirmed with the costs of this
instance against the appellant. After the expiration of twenty days from the
notification of this decision let judgment be entered in accordance
herewith, and ten days thereafter let the case be remanded to the court
from whence it came for proper action. So ordered.
G.R. No. 135385

December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES,
SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and
COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS
PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI
ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO WANDAG, EVELYN
DUNUAN, YAOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN,
MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAMCONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW
TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD,
DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D.
SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG
MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA
SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA
HELINITA T. PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU
MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES D. AMOS,
GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA

GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE

CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR
S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO
ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY
ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO
VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B.
GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR
DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO
ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE
SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN,
PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS
S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON,
VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID,
MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO,
MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P.
SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA,
NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA,
RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M.
GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M.
MALUDAO, MINORS MARICEL MALID, represented by her father
CORNELIO MALID, MARCELINO M. LADRA, represented by her
father MONICO D. LADRA, JENNYLYN MALID, represented by her
father TONY MALID, ARIEL M. EVANGELISTA, represented by her
mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO,
OND, PULA BATO B'LAAN TRIBAL FARMER'S ASSOCIATION, INTERPEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS,
intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR
THE CONSERVATION OF NATURAL RESOURCES, INC., intervenor.
RESOLUTION

constitutionality of the IPRA and pray that the petition be dismissed for lack
of merit.
On October 19, 1998, respondents Secretary of the Department of
Environment and Natural Resources (DENR) and Secretary of the
Department of Budget and Management (DBM) filed through the Solicitor
General a consolidated Comment. The Solicitor General is of the view that
the IPRA is partly unconstitutional on the ground that it grants ownership
over natural resources to indigenous peoples and prays that the petition be
granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan
Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen, a member
of the 1986 Constitutional Commission, and the leaders and members of
112 groups of indigenous peoples (Flavier, et. al), filed their Motion for
Leave to Intervene. They join the NCIP in defending the constitutionality of
IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed
a Motion to Intervene and/or to Appear as Amicus Curiae. The CHR asserts
that IPRA is an expression of the principle of parens patriae and that the
State has the responsibility to protect and guarantee the rights of those
who are at a serious disadvantage like indigenous peoples. For this reason
it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous
People and the Haribon Foundation for the Conservation of Natural
Resources, Inc. (Haribon, et al.), filed a motion to Intervene with attached
Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that
IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.

PER CURIAM:

The motions for intervention of the aforesaid groups and organizations

were granted.

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition
and mandamus as citizens and taxpayers, assailing the constitutionality of
certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known
as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing
Rules and Regulations (Implementing Rules).

Oral arguments were heard on April 13, 1999. Thereafter, the parties and
intervenors filed their respective memoranda in which they reiterate the
arguments adduced in their earlier pleadings and during the hearing.

In its resolution of September 29, 1998, the Court required respondents to

comment.1 In compliance, respondents Chairperson and Commissioners of
the National Commission on Indigenous Peoples (NCIP), the government
agency created under the IPRA to implement its provisions, filed on
October 13, 1998 their Comment to the Petition, in which they defend the

Petitioners assail the constitutionality of the following provisions of the

IPRA and its Implementing Rules on the ground that they amount to an
unlawful deprivation of the States ownership over lands of the public
domain as well as minerals and other natural resources therein, in violation
of the regalian doctrine embodied in Section 2, Article XII of the
Constitution:

"(1) Section 3(a) which defines the extent and coverage of ancestral
domains, and Section 3(b) which, in turn, defines ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral
domains including inalienable public lands, bodies of water, mineral and
other resources found within ancestral domains are private but community
property of the indigenous peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the
composition of ancestral domains and ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the
indigenous peoples over the ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the
indigenous peoples over the ancestral lands;
"(6) Section 57 which provides for priority rights of the indigenous peoples
in the harvesting, extraction, development or exploration of minerals and
other natural resources within the areas claimed to be their ancestral
domains, and the right to enter into agreements with nonindigenous
peoples for the development and utilization of natural resources therein for
a period not exceeding 25 years, renewable for not more than 25 years;
and
"(7) Section 58 which gives the indigenous peoples the responsibility to
maintain, develop, protect and conserve the ancestral domains and
portions thereof which are found to be necessary for critical watersheds,
mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover
or reforestation."2
Petitioners also content that, by providing for an all-encompassing
definition of "ancestral domains" and "ancestral lands" which might even
include private lands found within said areas, Sections 3(a) and 3(b) violate
the rights of private landowners.3
In addition, petitioners question the provisions of the IPRA defining the
powers and jurisdiction of the NCIP and making customary law applicable
to the settlement of disputes involving ancestral domains and ancestral
lands on the ground that these provisions violate the due process clause of
the Constitution.4
These provisions are:

"(1) sections 51 to 53 and 59 which detail the process of

delineation and recognition of ancestral domains and which vest on
the NCIP the sole authority to delineate ancestral domains and
ancestral lands;
"(2) Section 52[i] which provides that upon certification by the
NCIP that a particular area is an ancestral domain and upon
notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local
Governments, Secretary of Justice and Commissioner of the
National Development Corporation, the jurisdiction of said officials
over said area terminates;
"(3) Section 63 which provides the customary law, traditions and
practices of indigenous peoples shall be applied first with respect
to property rights, claims of ownership, hereditary succession and
settlement of land disputes, and that any doubt or ambiguity in the
interpretation thereof shall be resolved in favor of the indigenous
peoples;
"(4) Section 65 which states that customary laws and practices
shall be used to resolve disputes involving indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all
claims and disputes involving rights of the indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the
NCIP Administrative Order No. 1, series of 1998, which provides that "the
administrative relationship of the NCIP to the Office of the President is
characterized as a lateral but autonomous relationship for purposes of
policy and program coordination." They contend that said Rule infringes
upon the Presidents power of control over executive departments under
Section 17, Article VII of the Constitution.6
Petitioners pray for the following:
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63,
65 and 66 and other related provisions of R.A. 8371 are
unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the Chairperson
and Commissioners of the NCIP to cease and desist from
implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;

"(3) The issuance of a writ of prohibition directing the Secretary of

the Department of Environment and Natural Resources to cease
and desist from implementing Department of Environment and
Natural Resources Circular No. 2, series of 1998;

redeliberation, the voting remained the same. Accordingly, pursuant to

Rule 56, Section 7 of the Rules of Civil Procedure, the petition is
DISMISSED. SO ORDERED.
G.R. No. 183591

"(4) The issuance of a writ of prohibition directing the Secretary of

Budget and Management to cease and desist from disbursing
public funds for the implementation of the assailed provisions of
R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the
Secretary of Environment and Natural Resources to comply with his
duty of carrying out the States constitutional mandate to control
and supervise the exploration, development, utilization and
conservation of Philippine natural resources."7
After due deliberation on the petition, the members of the Court voted as
follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion,
which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago
join, sustaining the validity of the challenged provisions of R.A. 8371.
Justice Puno also filed a separate opinion sustaining all challenged
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP
Administrative Order No. 1, series of 1998, the Rules and Regulations
Implementing the IPRA, and Section 57 of the IPRA which he contends
should be interpreted as dealing with the large-scale exploitation of natural
resources and should be read in conjunction with Section 2, Article XII of
the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss
the petition solely on the ground that it does not raise a justiciable
controversy and petitioners do not have standing to question the
constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice
Panganiban filed a separate opinion expressing the view that Sections 3 (a)
(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are
unconstitutional. He reserves judgment on the constitutionality of Sections
58, 59, 65, and 66 of the law, which he believes must await the filing of
specific cases by those whose rights may have been violated by the IPRA.
Justice Vitug also filed a separate opinion expressing the view that Sections
3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo,
Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of
Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was
not obtained, the case was redeliberated upon. However, after

October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by

GOVERNOR JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL
PIOL, for and in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC.
RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY
CANDELARIA, MARK RYAN SULLIVAN and/or GEN. HERMOGENES
ESPERON, JR., the latter in his capacity as the present and dulyappointed Presidential Adviser on the Peace Process (OPAPP) or
the so-called Office of the Presidential Adviser on the Peace
Process, respondents.
x--------------------------------------------x
G.R. No. 183752

October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON.

CELSO L. LOBREGAT, City Mayor of Zamboanga, and in his personal
capacity as resident of the City of Zamboanga, Rep. MA. ISABELLE
G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District
2, City of Zamboanga, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL (GRP), as represented by RODOLFO C.
GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN
SULLIVAN and HERMOGENES ESPERON, in his capacity as the
Presidential Adviser on Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183893

October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE

LLUCH CRUZ, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC.
RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY

CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES

ESPERON, JR., in his capacity as the present and duly appointed
Presidential Adviser on the Peace Process; and/or SEC. EDUARDO
ERMITA, in his capacity as Executive Secretary. respondents.

FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-inintervention.

x--------------------------------------------x

SEN. MANUEL A. ROXAS, petitioners-in-intervention.

G.R. No. 183951

x--------------------------------------------x

October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as

represented by HON. ROLANDO E. YEBES, in his capacity as
Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as
Vice-Governor and Presiding Officer of the Sangguniang
Panlalawigan, HON. CECILIA JALOSJOS CARREON, Congresswoman,
1st Congressional District, HON. CESAR G. JALOSJOS, Congressman,
3rd Congressional District, and Members of the Sangguniang
Panlalawigan of the Province of Zamboanga del Norte, namely,
HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO R. CABIGON,
JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M. ZAMORAS,
HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON.
NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON.
ANGELICA J. CARREON and HON. LUZVIMINDA E. TORRINO,
petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C.
GARCIA and HON. HERMOGENES ESPERON, in his capacity as the
Presidential Adviser of Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183962

October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L.

PIMENTEL III, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL, represented by its Chairman RODOLFO C.
GARCIA, and the MORO ISLAMIC LIBERATION FRONT PEACE
NEGOTIATING PANEL, represented by its Chairman MOHAGHER
IQBAL, respondents.
x--------------------------------------------x

x--------------------------------------------x

MUNICIPALITY OF LINAMON duly represented by its Municipal

Mayor NOEL N. DEANO, petitioners-in-intervention,
x--------------------------------------------x
THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR
CHERRYLYN P. SANTOS-AKBAR, petitioners-in-intervention.
x--------------------------------------------x
THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T.
MANGUDADATU, in his capacity as Provincial Governor and a
resident of the Province of Sultan Kudarat, petitioner-in-intervention.
x-------------------------------------------x
RUY ELIAS LOPEZ, for and in his own behalf and on behalf of
Indigenous Peoples in Mindanao Not Belonging to the MILF,
petitioner-in-intervention.
x--------------------------------------------x
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO
C. ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of
Palawan, petitioners-in-intervention.
x--------------------------------------------x
MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention.
x--------------------------------------------x
MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF),
respondent-in-intervention.

x--------------------------------------------x
MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT
(MMMPD), respondent-in-intervention.
x--------------------------------------------x
DECISION
CARPIO MORALES, J.:
Subject of these consolidated cases is the extent of the powers of the
President in pursuing the peace process. While the facts surrounding this
controversy center on the armed conflict in Mindanao between the
government and the Moro Islamic Liberation Front (MILF), the legal issue
involved has a bearing on all areas in the country where there has been a
long-standing armed conflict. Yet again, the Court is tasked to perform a
delicate balancing act. It must uncompromisingly delineate the bounds
within which the President may lawfully exercise her discretion, but it must
do so in strict adherence to the Constitution, lest its ruling unduly restricts
the freedom of action vested by that same Constitution in the Chief
Executive precisely to enable her to pursue the peace process effectively.
I. FACTUAL ANTECEDENTS OF THE PETITIONS
On August 5, 2008, the Government of the Republic of the Philippines
(GRP) and the MILF, through the Chairpersons of their respective peace
negotiating panels, were scheduled to sign a Memorandum of Agreement
on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.
The MILF is a rebel group which was established in March 1984 when,
under the leadership of the late Salamat Hashim, it splintered from the
Moro National Liberation Front (MNLF) then headed by Nur Misuari, on the
ground, among others, of what Salamat perceived to be the manipulation
of the MNLF away from an Islamic basis towards Marxist-Maoist
orientations.1
The signing of the MOA-AD between the GRP and the MILF was not to
materialize, however, for upon motion of petitioners, specifically those who
filed their cases before the scheduled signing of the MOA-AD, this Court
issued a Temporary Restraining Order enjoining the GRP from signing the
same.

The MOA-AD was preceded by a long process of negotiation and the

concluding of several prior agreements between the two parties beginning
in 1996, when the GRP-MILF peace negotiations began. On July 18, 1997,
the GRP and MILF Peace Panels signed the Agreement on General
Cessation of Hostilities. The following year, they signed the General
Framework of Agreement of Intent on August 27, 1998.
The Solicitor General, who represents respondents, summarizes the MOAAD by stating that the same contained, among others, the commitment of
the parties to pursue peace negotiations, protect and respect human
rights, negotiate with sincerity in the resolution and pacific settlement of
the conflict, and refrain from the use of threat or force to attain undue
advantage while the peace negotiations on the substantive agenda are ongoing.2
Early on, however, it was evident that there was not going to be any
smooth sailing in the GRP-MILF peace process. Towards the end of 1999 up
to early 2000, the MILF attacked a number of municipalities in Central
Mindanao and, in March 2000, it took control of the town hall of
Kauswagan, Lanao del Norte.3 In response, then President Joseph Estrada
declared and carried out an "all-out-war" against the MILF.
When President Gloria Macapagal-Arroyo assumed office, the military
offensive against the MILF was suspended and the government sought a
resumption of the peace talks. The MILF, according to a leading MILF
member, initially responded with deep reservation, but when President
Arroyo asked the Government of Malaysia through Prime Minister Mahathir
Mohammad to help convince the MILF to return to the negotiating table,
the MILF convened its Central Committee to seriously discuss the matter
and, eventually, decided to meet with the GRP.4
The parties met in Kuala Lumpur on March 24, 2001, with the talks being
facilitated by the Malaysian government, the parties signing on the same
date the Agreement on the General Framework for the Resumption of
Peace Talks Between the GRP and the MILF. The MILF thereafter suspended
all its military actions.5
Formal peace talks between the parties were held in Tripoli, Libya from
June 20-22, 2001, the outcome of which was the GRP-MILF Tripoli
Agreement on Peace (Tripoli Agreement 2001) containing the basic
principles and agenda on the following aspects of the negotiation:
Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect.
With regard to the Ancestral Domain Aspect, the parties in Tripoli
Agreement 2001 simply agreed "that the same be discussed further by the
Parties in their next meeting."

A second round of peace talks was held in Cyberjaya, Malaysia on August

5-7, 2001 which ended with the signing of the Implementing Guidelines on
the Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire
status between the parties. This was followed by the Implementing
Guidelines on the Humanitarian Rehabilitation and Development Aspects of
the Tripoli Agreement 2001, which was signed on May 7, 2002 at Putrajaya,
Malaysia. Nonetheless, there were many incidence of violence between
government forces and the MILF from 2002 to 2003.

from the Bangsamoro Homeland and/or Bangsamoro Juridical Entity and, in

the alternative, that the MOA-AD be declared null and void.

Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13,
2003 and he was replaced by Al Haj Murad, who was then the chief peace
negotiator of the MILF. Murad's position as chief peace negotiator was
taken over by Mohagher Iqbal.6

Meanwhile, the City of Iligan16 filed a petition for Injunction and/or

Declaratory Relief, docketed as G.R. No. 183893, praying that
respondents be enjoined from signing the MOA-AD or, if the same had
already been signed, from implementing the same, and that the MOA-AD
be declared unconstitutional. Petitioners herein additionally implead
Executive Secretary Eduardo Ermita as respondent.

In 2005, several exploratory talks were held between the parties in Kuala
Lumpur, eventually leading to the crafting of the draft MOA-AD in its final
form, which, as mentioned, was set to be signed last August 5, 2008.
II. STATEMENT OF THE PROCEEDINGS
Before the Court is what is perhaps the most contentious "consensus" ever
embodied in an instrument - the MOA-AD which is assailed principally by
the present petitions bearing docket numbers 183591, 183752, 183893,
183951 and 183962.
Commonly impleaded as respondents are the GRP Peace Panel on
Ancestral Domain7 and the Presidential Adviser on the Peace Process
(PAPP) Hermogenes Esperon, Jr.
On July 23, 2008, the Province of North Cotabato 8 and Vice-Governor
Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for
Mandamus and Prohibition with Prayer for the Issuance of Writ of
Preliminary Injunction and Temporary Restraining Order.9 Invoking the right
to information on matters of public concern, petitioners seek to compel
respondents to disclose and furnish them the complete and official copies
of the MOA-AD including its attachments, and to prohibit the slated signing
of the MOA-AD, pending the disclosure of the contents of the MOA-AD and
the holding of a public consultation thereon. Supplementarily, petitioners
pray that the MOA-AD be declared unconstitutional.10
This initial petition was followed by another one, docketed as G.R. No.
183752, also for Mandamus and Prohibition11 filed by the City of
Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep.
Erico Basilio Fabian who likewise pray for similar injunctive reliefs.
Petitioners herein moreover pray that the City of Zamboanga be excluded

By Resolution of August 4, 2008, the Court issued a Temporary Restraining

Order commanding and directing public respondents and their agents to
cease and desist from formally signing the MOA-AD.13 The Court also
required the Solicitor General to submit to the Court and petitioners the
official copy of the final draft of the MOA-AD,14 to which she complied.15

The Province of Zamboanga del Norte,17 Governor Rolando Yebes, ViceGovernor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos,
and the members18 of the Sangguniang Panlalawigan of Zamboanga del
Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and
Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the
MOA-AD be declared null and void and without operative effect, and that
respondents be enjoined from executing the MOA-AD.
On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel
III filed a petition for Prohibition,20 docketed as G.R. No. 183962, praying
for a judgment prohibiting and permanently enjoining respondents from
formally signing and executing the MOA-AD and or any other agreement
derived therefrom or similar thereto, and nullifying the MOA-AD for being
unconstitutional and illegal. Petitioners herein additionally implead as
respondent the MILF Peace Negotiating Panel represented by its Chairman
Mohagher Iqbal.
Various parties moved to intervene and were granted leave of court to file
their petitions-/comments-in-intervention. Petitioners-in-Intervention
include Senator Manuel A. Roxas, former Senate President Franklin Drilon
and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn SantosAkbar, the Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the
Municipality of Linamon in Lanao del Norte,23 Ruy Elias Lopez of Davao City
and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao
and businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo
Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of
Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and
the Muslim Multi-Sectoral Movement for Peace and Development (MMMPD)
filed their respective Comments-in-Intervention.

By subsequent Resolutions, the Court ordered the consolidation of the

petitions. Respondents filed Comments on the petitions, while some of
petitioners submitted their respective Replies.

a) to create and recognize the Bangsamoro Juridical Entity

(BJE) as a separate state, or a juridical, territorial or
political subdivision not recognized by law;

Respondents, by Manifestation and Motion of August 19, 2008, stated that

the Executive Department shall thoroughly review the MOA-AD and pursue
further negotiations to address the issues hurled against it, and thus
moved to dismiss the cases. In the succeeding exchange of pleadings,
respondents' motion was met with vigorous opposition from petitioners.

b) to revise or amend the Constitution and existing laws to

conform to the MOA;

The cases were heard on oral argument on August 15, 22 and 29, 2008
that tackled the following principal issues:
1. Whether the petitions have become moot and academic
(i) insofar as the mandamus aspect is concerned, in view of
the disclosure of official copies of the final draft of the
Memorandum of Agreement (MOA); and
(ii) insofar as the prohibition aspect involving the Local
Government Units is concerned, if it is considered that
consultation has become fait accompli with the finalization
of the draft;
2. Whether the constitutionality and the legality of the MOA is ripe
for adjudication;

c) to concede to or recognize the claim of the Moro Islamic

Liberation Front for ancestral domain in violation of
Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS
ACT OF 1997), particularly Section 3(g) & Chapter VII
(DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
If in the affirmative, whether the Executive Branch has the
authority to so bind the Government of the Republic of the
Philippines;
6. Whether the inclusion/exclusion of the Province of North
Cotabato, Cities of Zamboanga, Iligan and Isabela, and the
Municipality of Linamon, Lanao del Norte in/from the areas covered
by the projected Bangsamoro Homeland is a justiciable question;
and
7. Whether desistance from signing the MOA derogates any prior
valid commitments of the Government of the Republic of the
Philippines.24

3. Whether respondent Government of the Republic of the

Philippines Peace Panel committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it negotiated and
initiated the MOA vis--vis ISSUES Nos. 4 and 5;

The Court, thereafter, ordered the parties to submit their respective

Memoranda. Most of the parties submitted their memoranda on time.

4. Whether there is a violation of the people's right to information

on matters of public concern (1987 Constitution, Article III, Sec. 7)
under a state policy of full disclosure of all its transactions
involving public interest (1987 Constitution, Article II, Sec. 28)
including public consultation under Republic Act No. 7160 (LOCAL
GOVERNMENT CODE OF 1991)[;]

As a necessary backdrop to the consideration of the objections raised in

the subject five petitions and six petitions-in-intervention against the MOAAD, as well as the two comments-in-intervention in favor of the MOA-AD,
the Court takes an overview of the MOA.

If it is in the affirmative, whether prohibition under Rule 65 of the

1997 Rules of Civil Procedure is an appropriate remedy;

Under the heading "Terms of Reference" (TOR), the MOA-AD includes not
only four earlier agreements between the GRP and MILF, but also two
agreements between the GRP and the MNLF: the 1976 Tripoli Agreement,
and the Final Peace Agreement on the Implementation of the 1976 Tripoli
Agreement, signed on September 2, 1996 during the administration of
President Fidel Ramos.

5. Whether by signing the MOA, the Government of the Republic of

the Philippines would be BINDING itself

III. OVERVIEW OF THE MOA-AD

The MOA-AD identifies the Parties to it as the GRP and the MILF.

The MOA-AD also identifies as TOR two local statutes - the organic act for
the Autonomous Region in Muslim Mindanao (ARMM)25 and the Indigenous
Peoples Rights Act (IPRA),26 and several international law instruments - the
ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in
Independent Countries in relation to the UN Declaration on the Rights of
the Indigenous Peoples, and the UN Charter, among others.

The main body of the MOA-AD is divided into four strands, namely,
Concepts and Principles, Territory, Resources, and Governance.
A. CONCEPTS AND PRINCIPLES

The MOA-AD includes as a final TOR the generic category of "compact

rights entrenchment emanating from the regime of dar-ul-mua'hada (or
territory under compact) and dar-ul-sulh (or territory under peace
agreement) that partakes the nature of a treaty device."

This strand begins with the statement that it is "the birthright of all Moros
and all Indigenous peoples of Mindanao to identify themselves and be
accepted as Bangsamoros.'" It defines "Bangsamoro people" as the
natives or original inhabitants of Mindanao and its adjacent islands
including Palawan and the Sulu archipelago at the time of conquest or
colonization, and their descendants whether mixed or of full blood,
including their spouses.30

During the height of the Muslim Empire, early Muslim jurists tended to see
the world through a simple dichotomy: there was the dar-ul-Islam (the
Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to
those lands where Islamic laws held sway, while the second denoted those
lands where Muslims were persecuted or where Muslim laws were outlawed
or ineffective.27 This way of viewing the world, however, became more
complex through the centuries as the Islamic world became part of the
international community of nations.

Thus, the concept of "Bangsamoro," as defined in this strand of the MOAAD, includes not only "Moros" as traditionally understood even by
Muslims,31 but all indigenous peoples of Mindanao and its adjacent islands.
The MOA-AD adds that the freedom of choice of indigenous peoples shall
be respected. What this freedom of choice consists in has not been
specifically defined.

As Muslim States entered into treaties with their neighbors, even with
distant States and inter-governmental organizations, the classical division
of the world into dar-ul-Islam and dar-ul-harb eventually lost its meaning.
New terms were drawn up to describe novel ways of perceiving non-Muslim
territories. For instance, areas like dar-ul-mua'hada (land of compact) and
dar-ul-sulh (land of treaty) referred to countries which, though under a
secular regime, maintained peaceful and cooperative relations with Muslim
States, having been bound to each other by treaty or agreement. Dar-ulaman (land of order), on the other hand, referred to countries which,
though not bound by treaty with Muslim States, maintained freedom of
religion for Muslims.28

The MOA-AD proceeds to refer to the "Bangsamoro homeland," the

ownership of which is vested exclusively in the Bangsamoro people by
virtue of their prior rights of occupation.32 Both parties to the MOA-AD
acknowledge that ancestral domain does not form part of the public
domain.33
The Bangsamoro people are acknowledged as having the right to selfgovernance, which right is said to be rooted on ancestral territoriality
exercised originally under the suzerain authority of their sultanates and the
Pat a Pangampong ku Ranaw. The sultanates were described as states or
"karajaan/kadatuan" resembling a body politic endowed with all the
elements of a nation-state in the modern sense.34

It thus appears that the "compact rights entrenchment" emanating from

the regime of dar-ul-mua'hada and dar-ul-sulh simply refers to all other
agreements between the MILF and the Philippine government - the
Philippines being the land of compact and peace agreement - that partake
of the nature of a treaty device, "treaty" being broadly defined as "any
solemn agreement in writing that sets out understandings, obligations, and
benefits for both parties which provides for a framework that elaborates
the principles declared in the [MOA-AD]."29

The MOA-AD thus grounds the right to self-governance of the Bangsamoro

people on the past suzerain authority of the sultanates. As gathered, the
territory defined as the Bangsamoro homeland was ruled by several
sultanates and, specifically in the case of the Maranao, by the Pat a
Pangampong ku Ranaw, a confederation of independent principalities
(pangampong) each ruled by datus and sultans, none of whom was
supreme over the others.35

The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED
AS FOLLOWS," and starts with its main body.

The MOA-AD goes on to describe the Bangsamoro people as "the First

Nation' with defined territory and with a system of government having
entered into treaties of amity and commerce with foreign nations."

The term "First Nation" is of Canadian origin referring to the indigenous

peoples of that territory, particularly those known as Indians. In Canada,
each of these indigenous peoples is equally entitled to be called "First
Nation," hence, all of them are usually described collectively by the plural
"First Nations."36 To that extent, the MOA-AD, by identifying the
Bangsamoro people as "the First Nation" - suggesting its exclusive
entitlement to that designation - departs from the Canadian usage of the
term.
The MOA-AD then mentions for the first time the "Bangsamoro Juridical
Entity" (BJE) to which it grants the authority and jurisdiction over the
Ancestral Domain and Ancestral Lands of the Bangsamoro.37
B. TERRITORY
The territory of the Bangsamoro homeland is described as the land mass
as well as the maritime, terrestrial, fluvial and alluvial domains, including
the aerial domain and the atmospheric space above it, embracing the
Mindanao-Sulu-Palawan geographic region.38
More specifically, the core of the BJE is defined as the present geographic
area of the ARMM - thus constituting the following areas: Lanao del Sur,
Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this
core also includes certain municipalities of Lanao del Norte that voted for
inclusion in the ARMM in the 2001 plebiscite.39
Outside of this core, the BJE is to cover other provinces, cities,
municipalities and barangays, which are grouped into two categories,
Category A and Category B. Each of these areas is to be subjected to a
plebiscite to be held on different dates, years apart from each other. Thus,
Category A areas are to be subjected to a plebiscite not later than twelve
(12) months following the signing of the MOA-AD.40 Category B areas, also
called "Special Intervention Areas," on the other hand, are to be subjected
to a plebiscite twenty-five (25) years from the signing of a separate
agreement - the Comprehensive Compact.41
The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over
all natural resources within its "internal waters," defined as extending
fifteen (15) kilometers from the coastline of the BJE area; 42 that the BJE
shall also have "territorial waters," which shall stretch beyond the BJE
internal waters up to the baselines of the Republic of the Philippines (RP)
south east and south west of mainland Mindanao; and that within these
territorial waters, the BJE and the "Central Government" (used
interchangeably with RP) shall exercise joint jurisdiction, authority and
management over all natural resources.43 Notably, the jurisdiction over the
internal waters is not similarly described as "joint."

The MOA-AD further provides for the sharing of minerals on the territorial
waters between the Central Government and the BJE, in favor of the latter,
through production sharing and economic cooperation agreement. 44 The
activities which the Parties are allowed to conduct on the territorial waters
are enumerated, among which are the exploration and utilization of natural
resources, regulation of shipping and fishing activities, and the
enforcement of police and safety measures.45 There is no similar provision
on the sharing of minerals and allowed activities with respect to the
internal waters of the BJE.
C. RESOURCES
The MOA-AD states that the BJE is free to enter into any economic
cooperation and trade relations with foreign countries and shall have the
option to establish trade missions in those countries. Such relationships
and understandings, however, are not to include aggression against the
GRP. The BJE may also enter into environmental cooperation agreements. 46
The external defense of the BJE is to remain the duty and obligation of the
Central Government. The Central Government is also bound to "take
necessary steps to ensure the BJE's participation in international meetings
and events" like those of the ASEAN and the specialized agencies of the
UN. The BJE is to be entitled to participate in Philippine official missions
and delegations for the negotiation of border agreements or protocols for
environmental protection and equitable sharing of incomes and revenues
involving the bodies of water adjacent to or between the islands forming
part of the ancestral domain.47
With regard to the right of exploring for, producing, and obtaining all
potential sources of energy, petroleum, fossil fuel, mineral oil and natural
gas, the jurisdiction and control thereon is to be vested in the BJE "as the
party having control within its territorial jurisdiction." This right carries the
proviso that, "in times of national emergency, when public interest so
requires," the Central Government may, for a fixed period and under
reasonable terms as may be agreed upon by both Parties, assume or direct
the operation of such resources.48
The sharing between the Central Government and the BJE of total
production pertaining to natural resources is to be 75:25 in favor of the
BJE.49
The MOA-AD provides that legitimate grievances of the Bangsamoro people
arising from any unjust dispossession of their territorial and proprietary
rights, customary land tenures, or their marginalization shall be
acknowledged. Whenever restoration is no longer possible, reparation is to
be in such form as mutually determined by the Parties. 50

The BJE may modify or cancel the forest concessions, timber licenses,
contracts or agreements, mining concessions, Mineral Production and
Sharing Agreements (MPSA), Industrial Forest Management Agreements
(IFMA), and other land tenure instruments granted by the Philippine
Government, including those issued by the present ARMM.51
D. GOVERNANCE
The MOA-AD binds the Parties to invite a multinational third-party to
observe and monitor the implementation of the Comprehensive
Compact. This compact is to embody the "details for the effective
enforcement" and "the mechanisms and modalities for the actual
implementation" of the MOA-AD. The MOA-AD explicitly provides that the
participation of the third party shall not in any way affect the status of the
relationship between the Central Government and the BJE.52
The "associative" relationship
between the Central Government
and the BJE

states that it is "WITNESSED BY" Datuk Othman Bin Abd Razak, Special
Adviser to the Prime Minister of Malaysia, "ENDORSED BY" Ambassador
Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC)
Secretary General and Special Envoy for Peace Process in Southern
Philippines, and SIGNED "IN THE PRESENCE OF" Dr. Albert G. Romulo,
Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim,
Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign
the Agreement last August 5, 2008.
Annexed to the MOA-AD are two documents containing the respective lists
cum maps of the provinces, municipalities, and barangays under
Categories A and B earlier mentioned in the discussion on the strand on
TERRITORY.
IV. PROCEDURAL ISSUES
A. RIPENESS

The MOA-AD describes the relationship of the Central Government and the
BJE as "associative," characterized by shared authority and responsibility.
And it states that the structure of governance is to be based on executive,
legislative, judicial, and administrative institutions with defined powers and
functions in the Comprehensive Compact.

The power of judicial review is limited to actual cases or controversies. 54

Courts decline to issue advisory opinions or to resolve hypothetical or
feigned problems, or mere academic questions.55 The limitation of the
power of judicial review to actual cases and controversies defines the role
assigned to the judiciary in a tripartite allocation of power, to assure that
the courts will not intrude into areas committed to the other branches of
government.56

The MOA-AD provides that its provisions requiring "amendments to the

existing legal framework" shall take effect upon signing of the
Comprehensive Compact and upon effecting the aforesaid amendments,
with due regard to the non-derogation of prior agreements and within
the stipulated timeframe to be contained in the Comprehensive Compact.
As will be discussed later, much of the present controversy hangs
on the legality of this provision.

An actual case or controversy involves a conflict of legal rights, an

assertion of opposite legal claims, susceptible of judicial resolution as
distinguished from a hypothetical or abstract difference or dispute. There
must be a contrariety of legal rights that can be interpreted and enforced
on the basis of existing law and jurisprudence. 57 The Court can decide the
constitutionality of an act or treaty only when a proper case between
opposing parties is submitted for judicial determination. 58

The BJE is granted the power to build, develop and maintain its own
institutions inclusive of civil service, electoral, financial and banking,
education, legislation, legal, economic, police and internal security force,
judicial system and correctional institutions, the details of which shall be
discussed in the negotiation of the comprehensive compact.

Related to the requirement of an actual case or controversy is the

requirement of ripeness. A question is ripe for adjudication when the act
being challenged has had a direct adverse effect on the individual
challenging it.59 For a case to be considered ripe for adjudication, it is a
prerequisite that something had then been accomplished or performed by
either branch before a court may come into the picture,60 and the
petitioner must allege the existence of an immediate or threatened injury
to itself as a result of the challenged action.61 He must show that he has
sustained or is immediately in danger of sustaining some direct injury as a
result of the act complained of.62

As stated early on, the MOA-AD was set to be signed on August 5, 2008 by
Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the Peace Negotiating
Panels of the GRP and the MILF, respectively. Notably, the penultimate
paragraph of the MOA-AD identifies the signatories as "the representatives
of the Parties," meaning the GRP and MILF themselves, and not merely of
the negotiating panels.53 In addition, the signature page of the MOA-AD

The Solicitor General argues that there is no justiciable controversy that is

ripe for judicial review in the present petitions, reasoning that

xxxx
GOVERNANCE

The unsigned MOA-AD is simply a list of consensus points subject

to further negotiations and legislative enactments as well as
constitutional processes aimed at attaining a final peaceful
agreement. Simply put, the MOA-AD remains to be a proposal that
does not automatically create legally demandable rights and
obligations until the list of operative acts required have been duly
complied with. x x x
xxxx
In the cases at bar, it is respectfully submitted that this Honorable
Court has no authority to pass upon issues based on hypothetical
or feigned constitutional problems or interests with no concrete
bases. Considering the preliminary character of the MOA-AD, there
are no concrete acts that could possibly violate petitioners' and
intervenors' rights since the acts complained of are mere
contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if
at all, is merely imaginary and illusory apart from being unfounded
and based on mere conjectures. (Underscoring supplied)
The Solicitor General cites63 the following provisions of the MOA-AD:

xxxx
7. The Parties agree that mechanisms and modalities for the actual
implementation of this MOA-AD shall be spelt out in the
Comprehensive Compact to mutually take such steps to enable it
to occur effectively.
Any provisions of the MOA-AD requiring amendments to the
existing legal framework shall come into force upon the signing of
a Comprehensive Compact and upon effecting the necessary
changes to the legal framework with due regard to non-derogation
of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact.64 (Underscoring
supplied)
The Solicitor General's arguments fail to persuade.
Concrete acts under the MOA-AD are not necessary to render the present
controversy ripe. In Pimentel, Jr. v. Aguirre,65 this Court held:

xxxx

x x x [B]y the mere enactment of the questioned law or the

approval of the challenged action, the dispute is said to have
ripened into a judicial controversy even without any other overt
act. Indeed, even a singular violation of the Constitution and/or the
law is enough to awaken judicial duty.

2. Toward this end, the Parties enter into the following stipulations:

xxxx

xxxx

By the same token, when an act of the President, who in our

constitutional scheme is a coequal of Congress, is seriously alleged
to have infringed the Constitution and the laws x x x settling the
dispute becomes the duty and the responsibility of the courts. 66

TERRITORY

d. Without derogating from the requirements of prior agreements,

the Government stipulates to conduct and deliver, using all
possible legal measures, within twelve (12) months following the
signing of the MOA-AD, a plebiscite covering the areas as
enumerated in the list and depicted in the map as Category A
attached herein (the "Annex"). The Annex constitutes an integral
part of this framework agreement. Toward this end, the Parties
shall endeavor to complete the negotiations and resolve all
outstanding issues on the Comprehensive Compact within fifteen
(15) months from the signing of the MOA-AD.

In Santa Fe Independent School District v. Doe,67 the United States

Supreme Court held that the challenge to the constitutionality of the
school's policy allowing student-led prayers and speeches before games
was ripe for adjudication, even if no public prayer had yet been led under
the policy, because the policy was being challenged as unconstitutional on
its face.68

That the law or act in question is not yet effective does not negate
ripeness. For example, in New York v. United States,69 decided in 1992, the
United States Supreme Court held that the action by the State of New York
challenging the provisions of the Low-Level Radioactive Waste Policy Act
was ripe for adjudication even if the questioned provision was not to take
effect until January 1, 1996, because the parties agreed that New York had
to take immediate action to avoid the provision's consequences. 70

facie case for Certiorari, Prohibition, and Mandamus, and an actual case or
controversy ripe for adjudication exists. When an act of a branch of
government is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of
the judiciary to settle the dispute.77

The present petitions pray for Certiorari,71 Prohibition, and Mandamus.

Certiorari and Prohibition are remedies granted by law when any tribunal,
board or officer has acted, in the case of certiorari, or is proceeding, in the
case of prohibition, without or in excess of its jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction. 72 Mandamus
is a remedy granted by law when any tribunal, corporation, board, officer
or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use or enjoyment of a right or office
to which such other is entitled.73 Certiorari, Mandamus and Prohibition are
appropriate remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials. 74

For a party to have locus standi, one must allege "such a personal stake in
the outcome of the controversy as to assure that concrete adverseness
which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult constitutional questions." 78

The authority of the GRP Negotiating Panel is defined by Executive Order

No. 3 (E.O. No. 3), issued on February 28, 2001. 75 The said executive order
requires that "[t]he government's policy framework for peace, including the
systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order." 76
The present petitions allege that respondents GRP Panel and PAPP Esperon
drafted the terms of the MOA-AD without consulting the local government
units or communities affected, nor informing them of the proceedings. As
will be discussed in greater detail later, such omission, by itself, constitutes
a departure by respondents from their mandate under E.O. No. 3.
Furthermore, the petitions allege that the provisions of the MOA-AD violate
the Constitution. The MOA-AD provides that "any provisions of the MOA-AD
requiring amendments to the existing legal framework shall come into
force upon the signing of a Comprehensive Compact and upon effecting
the necessary changes to the legal framework," implying an amendment of
the Constitution to accommodate the MOA-AD. This stipulation, in effect,
guaranteed to the MILF the amendment of the Constitution. Such act
constitutes another violation of its authority. Again, these points will be
discussed in more detail later.
As the petitions allege acts or omissions on the part of respondent that
exceed their authority, by violating their duties under E.O. No. 3 and the
provisions of the Constitution and statutes, the petitions make a prima

B. LOCUS STANDI

Because constitutional cases are often public actions in which the relief
sought is likely to affect other persons, a preliminary question frequently
arises as to this interest in the constitutional question raised. 79
When suing as a citizen, the person complaining must allege that he has
been or is about to be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens or penalties
by reason of the statute or act complained of.80 When the issue concerns a
public right, it is sufficient that the petitioner is a citizen and has an
interest in the execution of the laws.81
For a taxpayer, one is allowed to sue where there is an assertion that
public funds are illegally disbursed or deflected to an illegal purpose, or
that there is a wastage of public funds through the enforcement of an
invalid or unconstitutional law.82 The Court retains discretion whether or not
to allow a taxpayer's suit.83
In the case of a legislator or member of Congress, an act of the Executive
that injures the institution of Congress causes a derivative but nonetheless
substantial injury that can be questioned by legislators. A member of the
House of Representatives has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his
office.84
An organization may be granted standing to assert the rights of its
members,85 but the mere invocation by the Integrated Bar of the
Philippines or any member of the legal profession of the duty to preserve
the rule of law does not suffice to clothe it with standing. 86
As regards a local government unit (LGU), it can seek relief in order to
protect or vindicate an interest of its own, and of the other LGUs. 87

Intervenors, meanwhile, may be given legal standing upon showing of facts

that satisfy the requirements of the law authorizing intervention, 88 such as
a legal interest in the matter in litigation, or in the success of either of the
parties.
In any case, the Court has discretion to relax the procedural technicality on
locus standi, given the liberal attitude it has exercised, highlighted in the
case of David v. Macapagal-Arroyo,89 where technicalities of procedure
were brushed aside, the constitutional issues raised being of paramount
public interest or of transcendental importance deserving the attention of
the Court in view of their seriousness, novelty and weight as precedents. 90
The Court's forbearing stance on locus standi on issues involving
constitutional issues has for its purpose the protection of fundamental
rights.
In not a few cases, the Court, in keeping with its duty under the
Constitution to determine whether the other branches of government have
kept themselves within the limits of the Constitution and the laws and have
not abused the discretion given them, has brushed aside technical rules of
procedure.91
In the petitions at bar, petitioners Province of North Cotabato (G.R. No.
183591) Province of Zamboanga del Norte (G.R. No. 183951), City of
Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and
petitioners-in-intervention Province of Sultan Kudarat, City of Isabela
and Municipality of Linamon have locus standi in view of the direct and
substantial injury that they, as LGUs, would suffer as their territories,
whether in whole or in part, are to be included in the intended domain of
the BJE. These petitioners allege that they did not vote for their inclusion in
the ARMM which would be expanded to form the BJE territory. Petitioners'
legal standing is thus beyond doubt.
In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and
Aquilino Pimentel III would have no standing as citizens and taxpayers
for their failure to specify that they would be denied some right or privilege
or there would be wastage of public funds. The fact that they are a former
Senator, an incumbent mayor of Makati City, and a resident of Cagayan de
Oro, respectively, is of no consequence. Considering their invocation of the
transcendental importance of the issues at hand, however, the Court
grants them standing.
Intervenors Franklin Drilon and Adel Tamano, in alleging their standing
as taxpayers, assert that government funds would be expended for the
conduct of an illegal and unconstitutional plebiscite to delineate the BJE
territory. On that score alone, they can be given legal standing. Their
allegation that the issues involved in these petitions are of "undeniable

transcendental importance" clothes them with added basis for their

personality to intervene in these petitions.
With regard to Senator Manuel Roxas, his standing is premised on his
being a member of the Senate and a citizen to enforce compliance by
respondents of the public's constitutional right to be informed of the MOAAD, as well as on a genuine legal interest in the matter in litigation, or in
the success or failure of either of the parties. He thus possesses the
requisite standing as an intervenor.
With respect to Intervenors Ruy Elias Lopez, as a former congressman of
the 3rd district of Davao City, a taxpayer and a member of the Bagobo
tribe; Carlo B. Gomez, et al., as members of the IBP Palawan chapter,
citizens and taxpayers; Marino Ridao, as taxpayer, resident and member
of the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as
taxpayer, they failed to allege any proper legal interest in the present
petitions. Just the same, the Court exercises its discretion to relax the
procedural technicality on locus standi given the paramount public interest
in the issues at hand.
Intervening respondents Muslim Multi-Sectoral Movement for Peace
and Development, an advocacy group for justice and the attainment of
peace and prosperity in Muslim Mindanao; and Muslim Legal Assistance
Foundation Inc., a non-government organization of Muslim lawyers,
allege that they stand to be benefited or prejudiced, as the case may be, in
the resolution of the petitions concerning the MOA-AD, and prays for the
denial of the petitions on the grounds therein stated. Such legal interest
suffices to clothe them with standing.
B. MOOTNESS
Respondents insist that the present petitions have been rendered moot
with the satisfaction of all the reliefs prayed for by petitioners and the
subsequent pronouncement of the Executive Secretary that "[n]o matter
what the Supreme Court ultimately decides[,] the government will not sign
the MOA."92
In lending credence to this policy decision, the Solicitor General points out
that the President had already disbanded the GRP Peace Panel. 93
In David v. Macapagal-Arroyo,94 this Court held that the "moot and
academic" principle not being a magical formula that automatically
dissuades courts in resolving a case, it will decide cases, otherwise moot
and academic, if it finds that (a) there is a grave violation of the
Constitution;95 (b) the situation is of exceptional character and paramount
public interest is involved;96 (c) the constitutional issue raised requires

formulation of controlling principles to guide the bench, the bar, and the
public;97 and (d) the case is capable of repetition yet evading review. 98
Another exclusionary circumstance that may be considered is where there
is a voluntary cessation of the activity complained of by the defendant or
doer. Thus, once a suit is filed and the doer voluntarily ceases the
challenged conduct, it does not automatically deprive the tribunal of power
to hear and determine the case and does not render the case moot
especially when the plaintiff seeks damages or prays for injunctive relief
against the possible recurrence of the violation.99
The present petitions fall squarely into these exceptions to thus thrust
them into the domain of judicial review. The grounds cited above in David
are just as applicable in the present cases as they were, not only in David,
but also in Province of Batangas v. Romulo100 and Manalo v. Calderon101
where the Court similarly decided them on the merits, supervening events
that would ordinarily have rendered the same moot notwithstanding.
Petitions not mooted
Contrary then to the asseverations of respondents, the non-signing of the
MOA-AD and the eventual dissolution of the GRP Peace Panel did not moot
the present petitions. It bears emphasis that the signing of the MOA-AD did
not push through due to the Court's issuance of a Temporary Restraining
Order.
Contrary too to respondents' position, the MOA-AD cannot be considered a
mere "list of consensus points," especially given its nomenclature, the
need to have it signed or initialed by all the parties concerned on
August 5, 2008, and the far-reaching Constitutional implications of
these "consensus points," foremost of which is the creation of the BJE.
In fact, as what will, in the main, be discussed, there is a commitment
on the part of respondents to amend and effect necessary changes
to the existing legal framework for certain provisions of the MOAAD to take effect. Consequently, the present petitions are not confined to
the terms and provisions of the MOA-AD, but to other on-going and
future negotiations and agreements necessary for its realization. The
petitions have not, therefore, been rendered moot and academic simply by
the public disclosure of the MOA-AD,102 the manifestation that it will not be
signed as well as the disbanding of the GRP Panel not withstanding.
Petitions are imbued with paramount public interest

There is no gainsaying that the petitions are imbued with paramount public
interest, involving a significant part of the country's territory and the wideranging political modifications of affected LGUs. The assertion that the
MOA-AD is subject to further legal enactments including possible
Constitutional amendments more than ever provides impetus for
the Court to formulate controlling principles to guide the bench,
the bar, the public and, in this case, the government and its
negotiating entity.
Respondents cite Suplico v. NEDA, et al.103 where the Court did not
"pontificat[e] on issues which no longer legitimately constitute an actual
case or controversy [as this] will do more harm than good to the nation as
a whole."
The present petitions must be differentiated from Suplico. Primarily, in
Suplico, what was assailed and eventually cancelled was a stand-alone
government procurement contract for a national broadband network
involving a one-time contractual relation between two parties-the
government and a private foreign corporation. As the issues therein
involved specific government procurement policies and standard principles
on contracts, the majority opinion in Suplico found nothing exceptional
therein, the factual circumstances being peculiar only to the transactions
and parties involved in the controversy.
The MOA-AD is part of a series of agreements
In the present controversy, the MOA-AD is a significant part of a series
of agreements necessary to carry out the Tripoli Agreement 2001. The
MOA-AD which dwells on the Ancestral Domain Aspect of said Tripoli
Agreement is the third such component to be undertaken following the
implementation of the Security Aspect in August 2001 and the
Humanitarian, Rehabilitation and Development Aspect in May 2002.
Accordingly, even if the Executive Secretary, in his Memorandum of August
28, 2008 to the Solicitor General, has stated that "no matter what the
Supreme Court ultimately decides[,] the government will not sign the
MOA[-AD]," mootness will not set in in light of the terms of the Tripoli
Agreement 2001.
Need to formulate principles-guidelines
Surely, the present MOA-AD can be renegotiated or another one will be
drawn up to carry out the Ancestral Domain Aspect of the Tripoli
Agreement 2001, in another or in any form, which could contain similar
or significantly drastic provisions. While the Court notes the word of the
Executive Secretary that the government "is committed to securing an

agreement that is both constitutional and equitable because that is the

only way that long-lasting peace can be assured," it is minded to render a
decision on the merits in the present petitions to formulate controlling
principles to guide the bench, the bar, the public and, most
especially, the government in negotiating with the MILF regarding
Ancestral Domain.
Respondents invite the Court's attention to the separate opinion of then
Chief Justice Artemio Panganiban in Sanlakas v. Reyes104 in which he stated
that the doctrine of "capable of repetition yet evading review" can override
mootness, "provided the party raising it in a proper case has been and/or
continue to be prejudiced or damaged as a direct result of their issuance."
They contend that the Court must have jurisdiction over the subject matter
for the doctrine to be invoked.
The present petitions all contain prayers for Prohibition over which this
Court exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v.
GRP) is a petition for Injunction and Declaratory Relief, the Court will treat
it as one for Prohibition as it has far reaching implications and raises
questions that need to be resolved.105 At all events, the Court has
jurisdiction over most if not the rest of the petitions.
Indeed, the present petitions afford a proper venue for the Court to again
apply the doctrine immediately referred to as what it had done in a number
of landmark cases.106 There is a reasonable expectation that petitioners,
particularly the Provinces of North Cotabato, Zamboanga del Norte and
Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the
Municipality of Linamon, will again be subjected to the same problem in
the future as respondents' actions are capable of repetition, in another or
any form.
It is with respect to the prayers for Mandamus that the petitions have
become moot, respondents having, by Compliance of August 7, 2008,
provided this Court and petitioners with official copies of the final draft of
the MOA-AD and its annexes. Too, intervenors have been furnished, or have
procured for themselves, copies of the MOA-AD.
V. SUBSTANTIVE ISSUES
As culled from the Petitions and Petitions-in-Intervention, there are
basically two SUBSTANTIVE issues to be resolved, one relating to the
manner in which the MOA-AD was negotiated and finalized, the other
relating to its provisions, viz:

1. Did respondents violate constitutional and statutory provisions on public

consultation and the right to information when they negotiated and later
initialed the MOA-AD?
2. Do the contents of the MOA-AD violate the Constitution and the laws?
ON THE FIRST SUBSTANTIVE ISSUE
Petitioners invoke their constitutional right to information on matters
of public concern, as provided in Section 7, Article III on the Bill of Rights:
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.107
As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the
statutory right to examine and inspect public records, a right which was
eventually accorded constitutional status.
The right of access to public documents, as enshrined in both the 1973
Constitution and the 1987 Constitution, has been recognized as a selfexecutory constitutional right.109
In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that
access to public records is predicated on the right of the people to acquire
information on matters of public concern since, undoubtedly, in a
democracy, the pubic has a legitimate interest in matters of social and
political significance.
x x x The incorporation of this right in the Constitution is a recognition of
the fundamental role of free exchange of information in a democracy.
There can be no realistic perception by the public of the nation's problems,
nor a meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the
members of society to cope with the exigencies of the times. As has been
aptly observed: "Maintaining the flow of such information depends on
protection for both its acquisition and its dissemination since, if either
process is interrupted, the flow inevitably ceases." x x x 111
In the same way that free discussion enables members of society to cope
with the exigencies of their time, access to information of general interest
aids the people in democratic decision-making by giving them a better

perspective of the vital issues confronting the nation112 so that they may
be able to criticize and participate in the affairs of the government in a
responsible, reasonable and effective manner. It is by ensuring an
unfettered and uninhibited exchange of ideas among a well-informed
public that a government remains responsive to the changes desired by
the people.113
The MOA-AD is a matter of public concern
That the subject of the information sought in the present cases is a matter
of public concern114 faces no serious challenge. In fact, respondents admit
that the MOA-AD is indeed of public concern.115 In previous cases, the Court
found that the regularity of real estate transactions entered in the Register
of Deeds,116 the need for adequate notice to the public of the various
laws,117 the civil service eligibility of a public employee, 118 the proper
management of GSIS funds allegedly used to grant loans to public
officials,119 the recovery of the Marcoses' alleged ill-gotten wealth, 120 and
the identity of party-list nominees,121 among others, are matters of public
concern. Undoubtedly, the MOA-AD subject of the present cases is of
public concern, involving as it does the sovereignty and territorial
integrity of the State, which directly affects the lives of the public at
large.
Matters of public concern covered by the right to information include steps
and negotiations leading to the consummation of the contract. In not
distinguishing as to the executory nature or commercial character of
agreements, the Court has categorically ruled:
x x x [T]he right to information "contemplates inclusion of
negotiations leading to the consummation of the
transaction." Certainly, a consummated contract is not a
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.
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 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."122 (Emphasis and italics

in the original)
Intended as a "splendid symmetry"123 to the right to information under the
Bill of Rights is the policy of public disclosure under Section 28, Article II of
the Constitution reading:
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.124
The policy of full public disclosure enunciated in above-quoted Section 28
complements the right of access to information on matters of public
concern found in the Bill of Rights. The right to information guarantees the
right of the people to demand information, while Section 28 recognizes the
duty of officialdom to give information even if nobody demands.125
The policy of public disclosure establishes a concrete ethical principle for
the conduct of public affairs in a genuinely open democracy, with the
people's right to know as the centerpiece. It is a mandate of the State to
be accountable by following such policy.126 These provisions are vital to the
exercise of the freedom of expression and essential to hold public officials
at all times accountable to the people. 127
Whether Section 28 is self-executory, the records of the deliberations of
the Constitutional Commission so disclose:
MR. SUAREZ. And since this is not self-executory, this policy will not
be enunciated or will not be in force and effect until after Congress
shall have provided it.
MR. OPLE. I expect it to influence the climate of public ethics
immediately but, of course, the implementing law will have to be
enacted by Congress, Mr. Presiding Officer. 128
The following discourse, after Commissioner Hilario Davide, Jr., sought
clarification on the issue, is enlightening.
MR. DAVIDE. I would like to get some clarifications on this. Mr.
Presiding Officer, did I get the Gentleman correctly as having said
that this is not a self-executing provision? It would require a
legislation by Congress to implement?
MR. OPLE. Yes. Originally, it was going to be self-executing, but I
accepted an amendment from Commissioner Regalado, so that the

safeguards on national interest are modified by the clause "as may

be provided by law"
MR. DAVIDE. But as worded, does it not mean that this will
immediately take effect and Congress may provide for
reasonable safeguards on the sole ground national interest?
MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier
that it should immediately influence the climate of the
conduct of public affairs but, of course, Congress here may no
longer pass a law revoking it, or if this is approved, revoking this
principle, which is inconsistent with this policy. 129 (Emphasis
supplied)
Indubitably, the effectivity of the policy of public disclosure need
not await the passing of a statute. As Congress cannot revoke this
principle, it is merely directed to provide for "reasonable safeguards." The
complete and effective exercise of the right to information necessitates
that its complementary provision on public disclosure derive the same selfexecutory nature. Since both provisions go hand-in-hand, it is absurd to say
that the broader130 right to information on matters of public concern is
already enforceable while the correlative duty of the State to disclose its
transactions involving public interest is not enforceable until there is an
enabling law. Respondents cannot thus point to the absence of an
implementing legislation as an excuse in not effecting such policy.
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.131 Envisioned to be corollary to the
twin rights to information and disclosure is the design for feedback
mechanisms.
MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the
people be able to participate? Will the government provide
feedback mechanisms so that the people can participate
and can react where the existing media facilities are not
able to provide full feedback mechanisms to the
government? I suppose this will be part of the government
implementing operational mechanisms.
MR. OPLE. Yes. I think through their elected representatives and
that is how these courses take place. There is a message and a
feedback, both ways.

xxxx
MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last
sentence?
I think when we talk about the feedback network, we are
not talking about public officials but also network of private
business o[r] community-based organizations that will be
reacting. As a matter of fact, we will put more credence or
credibility on the private network of volunteers and voluntary
community-based organizations. So I do not think we are afraid
that there will be another OMA in the making.132 (Emphasis
supplied)
The imperative of a public consultation, as a species of the right to
information, is evident in the "marching orders" to respondents. The
mechanics for the duty to disclose information and to conduct public
consultation regarding the peace agenda and process is manifestly
provided by E.O. No. 3.133 The preambulatory clause of E.O. No. 3 declares
that there is a need to further enhance the contribution of civil society to
the comprehensive peace process by institutionalizing the people's
participation.
One of the three underlying principles of the comprehensive peace process
is that it "should be community-based, reflecting the sentiments, values
and principles important to all Filipinos" and "shall be defined not by the
government alone, nor by the different contending groups only, but by all
Filipinos as one community."134 Included as a component of the
comprehensive peace process is consensus-building and empowerment for
peace, which includes "continuing consultations on both national and local
levels to build consensus for a peace agenda and process, and the
mobilization and facilitation of people's participation in the peace
process."135
Clearly, E.O. No. 3 contemplates not just the conduct of a
plebiscite to effectuate "continuing" consultations, contrary to
respondents' position that plebiscite is "more than sufficient
consultation."136
Further, E.O. No. 3 enumerates the functions and responsibilities of the
PAPP, one of which is to "[c]onduct regular dialogues with the National
Peace Forum (NPF) and other peace partners to seek relevant information,
comments, recommendations as well as to render appropriate and timely
reports on the progress of the comprehensive peace process." 137 E.O. No. 3
mandates the establishment of the NPF to be "the principal forum for the
PAPP to consult with and seek advi[c]e from the peace advocates, peace

partners and concerned sectors of society on both national and local levels,
on the implementation of the comprehensive peace process, as well as for
government[-]civil society dialogue and consensus-building on peace
agenda and initiatives."138
In fine, E.O. No. 3 establishes petitioners' right to be consulted on
the peace agenda, as a corollary to the constitutional right to
information and disclosure.
PAPP Esperon committed grave abuse of discretion
The PAPP committed grave abuse of discretion when he failed to
carry out the pertinent consultation. The furtive process by which the MOAAD was designed and crafted runs contrary to and in excess of the
legal authority, and amounts to a whimsical, capricious, oppressive,
arbitrary and despotic exercise thereof.
The Court may not, of course, require the PAPP to conduct the consultation
in a particular way or manner. It may, however, require him to comply with
the law and discharge the functions within the authority granted by the
President.139
Petitioners are not claiming a seat at the negotiating table, contrary to
respondents' retort in justifying the denial of petitioners' right to be
consulted. Respondents' stance manifests the manner by which they treat
the salient provisions of E.O. No. 3 on people's participation. Such
disregard of the express mandate of the President is not much different
from superficial conduct toward token provisos that border on classic lip
service.140 It illustrates a gross evasion of positive duty and a virtual refusal
to perform the duty enjoined.
As for respondents' invocation of the doctrine of executive privilege, it is
not tenable under the premises. The argument defies sound reason when
contrasted with E.O. No. 3's explicit provisions on continuing consultation
and dialogue on both national and local levels. The executive order even
recognizes the exercise of the public's right even before the GRP
makes its official recommendations or before the government proffers its
definite propositions.141 It bear emphasis that E.O. No. 3 seeks to elicit
relevant advice, information, comments and recommendations from the
people through dialogue.
AT ALL EVENTS, respondents effectively waived the defense of executive
privilege in view of their unqualified disclosure of the official copies of the
final draft of the MOA-AD. By unconditionally complying with the Court's
August 4, 2008 Resolution, without a prayer for the document's disclosure

in camera, or without a manifestation that it was complying therewith ex

abundante ad cautelam.
Petitioners' assertion that the Local Government Code (LGC) of 1991
declares it a State policy to "require all national agencies and offices to
conduct periodic consultations with appropriate local government units,
non-governmental and people's organizations, and other concerned sectors
of the community before any project or program is implemented in their
respective jurisdictions"142 is well-taken. The LGC chapter on
intergovernmental relations puts flesh into this avowed policy:
Prior Consultations Required. - No project or program shall be
implemented by government authorities unless the consultations
mentioned in Sections 2 (c) and 26 hereof are complied with, and
prior approval of the sanggunian concerned is obtained: Provided,
That occupants in areas where such projects are to be
implemented shall not be evicted unless appropriate relocation
sites have been provided, in accordance with the provisions of the
Constitution.143 (Italics and underscoring supplied)
In Lina, Jr. v. Hon. Pao,144 the Court held that the above-stated policy and
above-quoted provision of the LGU apply only to national programs or
projects which are to be implemented in a particular local community.
Among the programs and projects covered are those that are critical to the
environment and human ecology including those that may call for the
eviction of a particular group of people residing in the locality where these
will be implemented.145 The MOA-AD is one peculiar program that
unequivocally and unilaterally vests ownership of a vast territory
to the Bangsamoro people,146 which could pervasively and
drastically result to the diaspora or displacement of a great
number of inhabitants from their total environment.
With respect to the indigenous cultural communities/indigenous peoples
(ICCs/IPs), whose interests are represented herein by petitioner Lopez and
are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA,
the right to participate fully at all levels of decision-making in matters
which may affect their rights, lives and destinies. 147 The MOA-AD, an
instrument recognizing ancestral domain, failed to justify its noncompliance with the clear-cut mechanisms ordained in said Act, 148 which
entails, among other things, the observance of the free and prior informed
consent of the ICCs/IPs.
Notably, the IPRA does not grant the Executive Department or any
government agency the power to delineate and recognize an ancestral
domain claim by mere agreement or compromise. The recognition of the
ancestral domain is the raison d'etre of the MOA-AD, without which all

other stipulations or "consensus points" necessarily must fail. In

proceeding to make a sweeping declaration on ancestral domain, without
complying with the IPRA, which is cited as one of the TOR of the MOA-AD,
respondents clearly transcended the boundaries of their authority.
As it seems, even the heart of the MOA-AD is still subject to necessary
changes to the legal framework. While paragraph 7 on Governance
suspends the effectivity of all provisions requiring changes to the legal
framework, such clause is itself invalid, as will be discussed in the following
section.
Indeed, ours is an open society, with all the acts of the government subject
to public scrutiny and available always to public cognizance. This has to be
so if the country is to remain democratic, with sovereignty residing in the
people and all government authority emanating from them.149
ON THE SECOND SUBSTANTIVE ISSUE
With regard to the provisions of the MOA-AD, there can be no question that
they cannot all be accommodated under the present Constitution and laws.
Respondents have admitted as much in the oral arguments before this
Court, and the MOA-AD itself recognizes the need to amend the existing
legal framework to render effective at least some of its provisions.
Respondents, nonetheless, counter that the MOA-AD is free of any legal
infirmity because any provisions therein which are inconsistent with the
present legal framework will not be effective until the necessary changes
to that framework are made. The validity of this argument will be
considered later. For now, the Court shall pass upon how
The MOA-AD is inconsistent with the Constitution and laws as
presently worded.
In general, the objections against the MOA-AD center on the extent of the
powers conceded therein to the BJE. Petitioners assert that the powers
granted to the BJE exceed those granted to any local government under
present laws, and even go beyond those of the present ARMM. Before
assessing some of the specific powers that would have been vested in the
BJE, however, it would be useful to turn first to a general idea that serves
as a unifying link to the different provisions of the MOA-AD, namely, the
international law concept of association. Significantly, the MOA-AD
explicitly alludes to this concept, indicating that the Parties actually framed
its provisions with it in mind.
Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on
RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last mentioned
provision, however, that the MOA-AD most clearly uses it to describe the
envisioned relationship between the BJE and the Central Government.

4. The relationship between the Central Government and

the Bangsamoro juridical entity shall be associative
characterized by shared authority and responsibility with a
structure of governance based on executive, legislative, judicial
and administrative institutions with defined powers and functions
in the comprehensive compact. A period of transition shall be
established in a comprehensive peace compact specifying the
relationship between the Central Government and the BJE.
(Emphasis and underscoring supplied)
The nature of the "associative" relationship may have been intended to
be defined more precisely in the still to be forged Comprehensive Compact.
Nonetheless, given that there is a concept of "association" in international
law, and the MOA-AD - by its inclusion of international law instruments in
its TOR- placed itself in an international legal context, that concept of
association may be brought to bear in understanding the use of the term
"associative" in the MOA-AD.
Keitner and Reisman state that
[a]n association is formed when two states of unequal power
voluntarily establish durable links. In the basic model, one state,
the associate, delegates certain responsibilities to the
other, the principal, while maintaining its international
status as a state. Free associations represent a middle
ground between integration and independence. x x x150
(Emphasis and underscoring supplied)
For purposes of illustration, the Republic of the Marshall Islands and the
Federated States of Micronesia (FSM), formerly part of the U.S.administered Trust Territory of the Pacific Islands,151 are associated states
of the U.S. pursuant to a Compact of Free Association. The currency in
these countries is the U.S. dollar, indicating their very close ties with the
U.S., yet they issue their own travel documents, which is a mark of their
statehood. Their international legal status as states was confirmed by the
UN Security Council and by their admission to UN membership.
According to their compacts of free association, the Marshall Islands and
the FSM generally have the capacity to conduct foreign affairs in their own
name and right, such capacity extending to matters such as the law of the
sea, marine resources, trade, banking, postal, civil aviation, and cultural
relations. The U.S. government, when conducting its foreign affairs, is
obligated to consult with the governments of the Marshall Islands or the
FSM on matters which it (U.S. government) regards as relating to or
affecting either government.

In the event of attacks or threats against the Marshall Islands or the FSM,
the U.S. government has the authority and obligation to defend them as if
they were part of U.S. territory. The U.S. government, moreover, has the
option of establishing and using military areas and facilities within these
associated states and has the right to bar the military personnel of any
third country from having access to these territories for military purposes.
It bears noting that in U.S. constitutional and international practice, free
association is understood as an international association between
sovereigns. The Compact of Free Association is a treaty which is
subordinate to the associated nation's national constitution, and each
party may terminate the association consistent with the right of
independence. It has been said that, with the admission of the U.S.associated states to the UN in 1990, the UN recognized that the American
model of free association is actually based on an underlying status of
independence.152
In international practice, the "associated state" arrangement has usually
been used as a transitional device of former colonies on their way to full
independence. Examples of states that have passed through the status of
associated states as a transitional phase are Antigua, St. Kitts-NevisAnguilla, Dominica, St. Lucia, St. Vincent and Grenada. All have since
become independent states.153
Back to the MOA-AD, it contains many provisions which are consistent with
the international legal concept of association, specifically the following: the
BJE's capacity to enter into economic and trade relations with foreign
countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN
agencies, and the continuing responsibility of the Central Government over
external defense. Moreover, the BJE's right to participate in Philippine
official missions bearing on negotiation of border agreements,
environmental protection, and sharing of revenues pertaining to the bodies
of water adjacent to or between the islands forming part of the ancestral
domain, resembles the right of the governments of FSM and the Marshall
Islands to be consulted by the U.S. government on any foreign affairs
matter affecting them.
These provisions of the MOA indicate, among other things, that the Parties
aimed to vest in the BJE the status of an associated state or, at
any rate, a status closely approximating it.
The concept of association is not recognized under the present
Constitution

No province, city, or municipality, not even the ARMM, is recognized under

our laws as having an "associative" relationship with the national
government. Indeed, the concept implies powers that go beyond anything
ever granted by the Constitution to any local or regional government. It
also implies the recognition of the associated entity as a state. The
Constitution, however, does not contemplate any state in this jurisdiction
other than the Philippine State, much less does it provide for a transitory
status that aims to prepare any part of Philippine territory for
independence.
Even the mere concept animating many of the MOA-AD's provisions,
therefore, already requires for its validity the amendment of constitutional
provisions, specifically the following provisions of Article X:
SECTION 1. The territorial and political subdivisions of the Republic
of the Philippines are the provinces, cities, municipalities, and
barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter provided.
SECTION 15. There shall be created autonomous regions in Muslim
Mindanao and in the Cordilleras consisting of provinces, cities,
municipalities, and geographical areas sharing common and
distinctive historical and cultural heritage, economic and social
structures, and other relevant characteristics within the
framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic
of the Philippines.
The BJE is a far more powerful
entity than the autonomous region
recognized in the Constitution
It is not merely an expanded version of the ARMM, the status of its
relationship with the national government being fundamentally different
from that of the ARMM. Indeed, BJE is a state in all but name as it
meets the criteria of a state laid down in the Montevideo
Convention,154 namely, a permanent population, a defined territory, a
government, and a capacity to enter into relations with other states.
Even assuming arguendo that the MOA-AD would not necessarily sever any
portion of Philippine territory, the spirit animating it - which has
betrayed itself by its use of the concept of association - runs counter to
the national sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship between the
national government and the BJE being itself contrary to the

present Constitution, it is not surprising that many of the specific

provisions of the MOA-AD on the formation and powers of the BJE
are in conflict with the Constitution and the laws.

(6) Economic, social, and tourism development;

Article X, Section 18 of the Constitution provides that "[t]he creation of the

autonomous region shall be effective when approved by a majority of the
votes cast by the constituent units in a plebiscite called for the purpose,
provided that only provinces, cities, and geographic areas voting
favorably in such plebiscite shall be included in the autonomous
region." (Emphasis supplied)

(8) Preservation and development of the cultural heritage; and

As reflected above, the BJE is more of a state than an autonomous region.

But even assuming that it is covered by the term "autonomous region" in
the constitutional provision just quoted, the MOA-AD would still be in
conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and
2(e), the present geographic area of the ARMM and, in addition, the
municipalities of Lanao del Norte which voted for inclusion in the ARMM
during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and
Tangkal - are automatically part of the BJE without need of another
plebiscite, in contrast to the areas under Categories A and B mentioned
earlier in the overview. That the present components of the ARMM and the
above-mentioned municipalities voted for inclusion therein in 2001,
however, does not render another plebiscite unnecessary under the
Constitution, precisely because what these areas voted for then was their
inclusion in the ARMM, not the BJE.
The MOA-AD, moreover, would not
comply with Article X, Section 20 of
the Constitution
since that provision defines the powers of autonomous regions as follows:
SECTION 20. Within its territorial jurisdiction and subject to the
provisions of this Constitution and national laws, the organic act of
autonomous regions shall provide for legislative powers over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;

(7) Educational policies;

(9) Such other matters as may be authorized by law for the

promotion of the general welfare of the people of the region.
(Underscoring supplied)
Again on the premise that the BJE may be regarded as an autonomous
region, the MOA-AD would require an amendment that would expand the
above-quoted provision. The mere passage of new legislation pursuant to
sub-paragraph No. 9 of said constitutional provision would not suffice,
since any new law that might vest in the BJE the powers found in the MOAAD must, itself, comply with other provisions of the Constitution. It would
not do, for instance, to merely pass legislation vesting the BJE with treatymaking power in order to accommodate paragraph 4 of the strand on
RESOURCES which states: "The BJE is free to enter into any economic
cooperation and trade relations with foreign countries: provided, however,
that such relationships and understandings do not include aggression
against the Government of the Republic of the Philippines x x x." Under our
constitutional system, it is only the President who has that power. Pimentel
v. Executive Secretary155 instructs:
In our system of government, the President, being the head of
state, is regarded as the sole organ and authority in external
relations and is the country's sole representative with
foreign nations. As the chief architect of foreign policy, the
President acts as the country's mouthpiece with respect to
international affairs. Hence, the President is vested with the
authority to deal with foreign states and governments, extend or
withhold recognition, maintain diplomatic relations, enter into
treaties, and otherwise transact the business of foreign
relations. In the realm of treaty-making, the President has
the sole authority to negotiate with other states. (Emphasis
and underscoring supplied)
Article II, Section 22 of the Constitution must also be amended if
the scheme envisioned in the MOA-AD is to be effected. That
constitutional provision states: "The State recognizes and promotes the
rights of indigenous cultural communities within the framework of national
unity and development." (Underscoring supplied) An associative
arrangement does not uphold national unity. While there may be a
semblance of unity because of the associative ties between the BJE and
the national government, the act of placing a portion of Philippine territory

in a status which, in international practice, has generally been a

preparation for independence, is certainly not conducive to national unity.
Besides being irreconcilable with the Constitution, the MOA-AD is also
inconsistent with prevailing statutory law, among which are R.A.
No. 9054156 or the Organic Act of the ARMM, and the IPRA.157
Article X, Section 3 of the Organic Act of the ARMM is a bar to the
adoption of the definition of "Bangsamoro people" used in the MOAAD. Paragraph 1 on Concepts and Principles states:
1. It is the birthright of all Moros and all Indigenous peoples of
Mindanao to identify themselves and be accepted as
"Bangsamoros". The Bangsamoro people refers to those who are
natives or original inhabitants of Mindanao and its adjacent
islands including Palawan and the Sulu archipelago at the time of
conquest or colonization of its descendants whether mixed or of
full blood. Spouses and their descendants are classified as
Bangsamoro. The freedom of choice of the Indigenous people shall
be respected. (Emphasis and underscoring supplied)
This use of the term Bangsamoro sharply contrasts with that found in the
Article X, Section 3 of the Organic Act, which, rather than lumping together
the identities of the Bangsamoro and other indigenous peoples living in
Mindanao, clearly distinguishes between Bangsamoro people and
Tribal peoples, as follows:
"As used in this Organic Act, the phrase "indigenous cultural
community" refers to Filipino citizens residing in the
autonomous region who are:
(a) Tribal peoples. These are citizens whose social, cultural and
economic conditions distinguish them from other sectors of the
national community; and
(b) Bangsa Moro people. These are citizens who are believers
in Islam and who have retained some or all of their own
social, economic, cultural, and political institutions."
Respecting the IPRA, it lays down the prevailing procedure for the
delineation and recognition of ancestral domains. The MOA-AD's manner of
delineating the ancestral domain of the Bangsamoro people is a clear
departure from that procedure. By paragraph 1 of Territory, the Parties
simply agree that, subject to the delimitations in the agreed Schedules,
"[t]he Bangsamoro homeland and historic territory refer to the land mass

as well as the maritime, terrestrial, fluvial and alluvial domains, and the
aerial domain, the atmospheric space above it, embracing the MindanaoSulu-Palawan geographic region."
Chapter VIII of the IPRA, on the other hand, lays down a detailed
procedure, as illustrated in the following provisions thereof:
SECTION 52. Delineation Process. - The identification and
delineation of ancestral domains shall be done in accordance with
the following procedures:
xxxx
b) Petition for Delineation. - The process of delineating a specific
perimeter may be initiated by the NCIP with the consent of the
ICC/IP concerned, or through a Petition for Delineation filed with
the NCIP, by a majority of the members of the ICCs/IPs;
c) Delineation Proper. - The official delineation of ancestral domain
boundaries including census of all community members therein,
shall be immediately undertaken by the Ancestral Domains Office
upon filing of the application by the ICCs/IPs concerned.
Delineation will be done in coordination with the community
concerned and shall at all times include genuine involvement and
participation by the members of the communities concerned;
d) Proof Required. - Proof of Ancestral Domain Claims shall include
the testimony of elders or community under oath, and other
documents directly or indirectly attesting to the possession or
occupation of the area since time immemorial by such ICCs/IPs in
the concept of owners which shall be any one (1) of the following
authentic documents:
1) Written accounts of the ICCs/IPs customs and traditions;
2) Written accounts of the ICCs/IPs political structure and
institution;
3) Pictures showing long term occupation such as those of
old improvements, burial grounds, sacred places and old
villages;
4) Historical accounts, including pacts and agreements
concerning boundaries entered into by the ICCs/IPs
concerned with other ICCs/IPs;

5) Survey plans and sketch maps;

6) Anthropological data;
7) Genealogical surveys;
8) Pictures and descriptive histories of traditional
communal forests and hunting grounds;
9) Pictures and descriptive histories of traditional
landmarks such as mountains, rivers, creeks, ridges, hills,
terraces and the like; and
10) Write-ups of names and places derived from the native
dialect of the community.
e) Preparation of Maps. - On the basis of such investigation and the
findings of fact based thereon, the Ancestral Domains Office of the
NCIP shall prepare a perimeter map, complete with technical
descriptions, and a description of the natural features and
landmarks embraced therein;
f) Report of Investigation and Other Documents. - A complete copy
of the preliminary census and a report of investigation, shall be
prepared by the Ancestral Domains Office of the NCIP;
g) Notice and Publication. - A copy of each document, including a
translation in the native language of the ICCs/IPs concerned shall
be posted in a prominent place therein for at least fifteen (15)
days. A copy of the document shall also be posted at the local,
provincial and regional offices of the NCIP, and shall be published
in a newspaper of general circulation once a week for two (2)
consecutive weeks to allow other claimants to file opposition
thereto within fifteen (15) days from date of such publication:
Provided, That in areas where no such newspaper exists,
broadcasting in a radio station will be a valid substitute: Provided,
further, That mere posting shall be deemed sufficient if both
newspaper and radio station are not available;
h) Endorsement to NCIP. - Within fifteen (15) days from publication,
and of the inspection process, the Ancestral Domains Office shall
prepare a report to the NCIP endorsing a favorable action upon a
claim that is deemed to have sufficient proof. However, if the proof
is deemed insufficient, the Ancestral Domains Office shall require
the submission of additional evidence: Provided, That the Ancestral

Domains Office shall reject any claim that is deemed patently false
or fraudulent after inspection and verification: Provided, further,
That in case of rejection, the Ancestral Domains Office shall give
the applicant due notice, copy furnished all concerned, containing
the grounds for denial. The denial shall be appealable to the NCIP:
Provided, furthermore, That in cases where there are conflicting
claims among ICCs/IPs on the boundaries of ancestral domain
claims, the Ancestral Domains Office shall cause the contending
parties to meet and assist them in coming up with a preliminary
resolution of the conflict, without prejudice to its full adjudication
according to the section below.
xxxx
To remove all doubts about the irreconcilability of the MOA-AD with the
present legal system, a discussion of not only the Constitution and
domestic statutes, but also of international law is in order, for
Article II, Section 2 of the Constitution states that the Philippines
"adopts the generally accepted principles of international law as
part of the law of the land."
Applying this provision of the Constitution, the Court, in Mejoff v. Director
of Prisons,158 held that the Universal Declaration of Human Rights is part of
the law of the land on account of which it ordered the release on bail of a
detained alien of Russian descent whose deportation order had not been
executed even after two years. Similarly, the Court in Agustin v. Edu159
applied the aforesaid constitutional provision to the 1968 Vienna
Convention on Road Signs and Signals.
International law has long recognized the right to self-determination of
"peoples," understood not merely as the entire population of a State but
also a portion thereof. In considering the question of whether the people of
Quebec had a right to unilaterally secede from Canada, the Canadian
Supreme Court in REFERENCE RE SECESSION OF QUEBEC 160 had occasion
to acknowledge that "the right of a people to self-determination is now so
widely recognized in international conventions that the principle has
acquired a status beyond convention' and is considered a general principle
of international law."
Among the conventions referred to are the International Covenant on Civil
and Political Rights161 and the International Covenant on Economic, Social
and Cultural Rights162 which state, in Article 1 of both covenants, that all
peoples, by virtue of the right of self-determination, "freely determine their
political status and freely pursue their economic, social, and cultural
development."

The people's right to self-determination should not, however, be

understood as extending to a unilateral right of secession. A distinction
should be made between the right of internal and external selfdetermination. REFERENCE RE SECESSION OF QUEBEC is again instructive:
"(ii) Scope of the Right to Self-determination
126. The recognized sources of international law establish that the
right to self-determination of a people is normally fulfilled
through internal self-determination - a people's pursuit of
its political, economic, social and cultural development
within the framework of an existing state. A right to
external self-determination (which in this case potentially
takes the form of the assertion of a right to unilateral
secession) arises in only the most extreme of cases and,
even then, under carefully defined circumstances. x x x
External self-determination can be defined as in the
following statement from the Declaration on Friendly
Relations, supra, as
The establishment of a sovereign and independent State,
the free association or integration with an independent
State or the emergence into any other political status
freely determined by a people constitute modes of
implementing the right of self-determination by that people.
(Emphasis added)
127. The international law principle of self-determination
has evolved within a framework of respect for the
territorial integrity of existing states. The various
international documents that support the existence of a people's
right to self-determination also contain parallel statements
supportive of the conclusion that the exercise of such a right must
be sufficiently limited to prevent threats to an existing state's
territorial integrity or the stability of relations between sovereign
states.
x x x x (Emphasis, italics and underscoring supplied)
The Canadian Court went on to discuss the exceptional cases in which the
right to external self-determination can arise, namely, where a people is
under colonial rule, is subject to foreign domination or exploitation outside
a colonial context, and - less definitely but asserted by a number of
commentators - is blocked from the meaningful exercise of its right to
internal self-determination. The Court ultimately held that the population of

Quebec had no right to secession, as the same is not under colonial rule or
foreign domination, nor is it being deprived of the freedom to make
political choices and pursue economic, social and cultural development,
citing that Quebec is equitably represented in legislative, executive and
judicial institutions within Canada, even occupying prominent positions
therein.
The exceptional nature of the right of secession is further exemplified in
the REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE
LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION. 163 There, Sweden
presented to the Council of the League of Nations the question of whether
the inhabitants of the Aaland Islands should be authorized to determine by
plebiscite if the archipelago should remain under Finnish sovereignty or be
incorporated in the kingdom of Sweden. The Council, before resolving the
question, appointed an International Committee composed of three jurists
to submit an opinion on the preliminary issue of whether the dispute
should, based on international law, be entirely left to the domestic
jurisdiction of Finland. The Committee stated the rule as follows:
x x x [I]n the absence of express provisions in international
treaties, the right of disposing of national territory is
essentially an attribute of the sovereignty of every State.
Positive International Law does not recognize the right of
national groups, as such, to separate themselves from the
State of which they form part by the simple expression of a
wish, any more than it recognizes the right of other States to claim
such a separation. Generally speaking, the grant or refusal of
the right to a portion of its population of determining its
own political fate by plebiscite or by some other method,
is, exclusively, an attribute of the sovereignty of every
State which is definitively constituted. A dispute between two
States concerning such a question, under normal conditions
therefore, bears upon a question which International Law leaves
entirely to the domestic jurisdiction of one of the States concerned.
Any other solution would amount to an infringement of sovereign
rights of a State and would involve the risk of creating difficulties
and a lack of stability which would not only be contrary to the very
idea embodied in term "State," but would also endanger the
interests of the international community. If this right is not
possessed by a large or small section of a nation, neither can it be
held by the State to which the national group wishes to be
attached, nor by any other State. (Emphasis and underscoring
supplied)
The Committee held that the dispute concerning the Aaland Islands did not
refer to a question which is left by international law to the domestic
jurisdiction of Finland, thereby applying the exception rather than the rule

elucidated above. Its ground for departing from the general rule, however,
was a very narrow one, namely, the Aaland Islands agitation originated at
a time when Finland was undergoing drastic political transformation. The
internal situation of Finland was, according to the Committee, so abnormal
that, for a considerable time, the conditions required for the formation of a
sovereign State did not exist. In the midst of revolution, anarchy, and civil
war, the legitimacy of the Finnish national government was disputed by a
large section of the people, and it had, in fact, been chased from the
capital and forcibly prevented from carrying out its duties. The armed
camps and the police were divided into two opposing forces. In light of
these circumstances, Finland was not, during the relevant time period, a
"definitively constituted" sovereign state. The Committee, therefore, found
that Finland did not possess the right to withhold from a portion of its
population the option to separate itself - a right which sovereign nations
generally have with respect to their own populations.
Turning now to the more specific category of indigenous peoples, this term
has been used, in scholarship as well as international, regional, and state
practices, to refer to groups with distinct cultures, histories, and
connections to land (spiritual and otherwise) that have been forcibly
incorporated into a larger governing society. These groups are regarded as
"indigenous" since they are the living descendants of pre-invasion
inhabitants of lands now dominated by others. Otherwise stated,
indigenous peoples, nations, or communities are culturally distinctive
groups that find themselves engulfed by settler societies born of the forces
of empire and conquest.164 Examples of groups who have been regarded as
indigenous peoples are the Maori of New Zealand and the aboriginal
peoples of Canada.
As with the broader category of "peoples," indigenous peoples situated
within states do not have a general right to independence or secession
from those states under international law,165 but they do have rights
amounting to what was discussed above as the right to internal selfdetermination.
In a historic development last September 13, 2007, the UN General
Assembly adopted the United Nations Declaration on the Rights of
Indigenous Peoples (UN DRIP) through General Assembly Resolution
61/295. The vote was 143 to 4, the Philippines being included among
those in favor, and the four voting against being Australia, Canada, New
Zealand, and the U.S. The Declaration clearly recognized the right of
indigenous peoples to self-determination, encompassing the right
to autonomy or self-government, to wit:
Article 3

Indigenous peoples have the right to self-determination. By

virtue of that right they freely determine their political status and
freely pursue their economic, social and cultural development.
Article 4
Indigenous peoples, in exercising their right to self-determination,
have the right to autonomy or self-government in matters
relating to their internal and local affairs, as well as ways and
means for financing their autonomous functions.
Article 5
Indigenous peoples have the right to maintain and strengthen their
distinct political, legal, economic, social and cultural institutions,
while retaining their right to participate fully, if they so choose, in
the political, economic, social and cultural life of the State.
Self-government, as used in international legal discourse pertaining to
indigenous peoples, has been understood as equivalent to "internal selfdetermination."166 The extent of self-determination provided for in the UN
DRIP is more particularly defined in its subsequent articles, some of which
are quoted hereunder:
Article 8
1. Indigenous peoples and individuals have the right not to be
subjected to forced assimilation or destruction of their culture.
2. States shall provide effective mechanisms for prevention
of, and redress for:
(a) Any action which has the aim or effect of depriving them
of their integrity as distinct peoples, or of their cultural
values or ethnic identities;
(b) Any action which has the aim or effect of dispossessing
them of their lands, territories or resources;
(c) Any form of forced population transfer which has the
aim or effect of violating or undermining any of their rights;
(d) Any form of forced assimilation or integration;

(e) Any form of propaganda designed to promote or incite

racial or ethnic discrimination directed against them.
Article 21
1. Indigenous peoples have the right, without discrimination, to the
improvement of their economic and social conditions, including,
inter alia, in the areas of education, employment, vocational
training and retraining, housing, sanitation, health and social
security.
2. States shall take effective measures and, where appropriate,
special measures to ensure continuing improvement of their
economic and social conditions. Particular attention shall be paid to
the rights and special needs of indigenous elders, women, youth,
children and persons with disabilities.
Article 26
1. Indigenous peoples have the right to the lands,
territories and resources which they have traditionally
owned, occupied or otherwise used or acquired.
2. Indigenous peoples have the right to own, use, develop and
control the lands, territories and resources that they possess by
reason of traditional ownership or other traditional occupation or
use, as well as those which they have otherwise acquired.
3. States shall give legal recognition and protection to these lands,
territories and resources. Such recognition shall be conducted with
due respect to the customs, traditions and land tenure systems of
the indigenous peoples concerned.
Article 30
1. Military activities shall not take place in the lands or territories of
indigenous peoples, unless justified by a relevant public interest or
otherwise freely agreed with or requested by the indigenous
peoples concerned.
2. States shall undertake effective consultations with the
indigenous peoples concerned, through appropriate procedures
and in particular through their representative institutions, prior to
using their lands or territories for military activities.

Article 32
1. Indigenous peoples have the right to determine and develop
priorities and strategies for the development or use of their lands
or territories and other resources.
2. States shall consult and cooperate in good faith with the
indigenous peoples concerned through their own representative
institutions in order to obtain their free and informed consent prior
to the approval of any project affecting their lands or territories
and other resources, particularly in connection with the
development, utilization or exploitation of mineral, water or other
resources.
3. States shall provide effective mechanisms for just and fair
redress for any such activities, and appropriate measures shall be
taken to mitigate adverse environmental, economic, social, cultural
or spiritual impact.
Article 37
1. Indigenous peoples have the right to the recognition,
observance and enforcement of treaties, agreements and other
constructive arrangements concluded with States or their
successors and to have States honour and respect such treaties,
agreements and other constructive arrangements.
2. Nothing in this Declaration may be interpreted as diminishing or
eliminating the rights of indigenous peoples contained in treaties,
agreements and other constructive arrangements.
Article 38
States in consultation and cooperation with indigenous peoples,
shall take the appropriate measures, including legislative
measures, to achieve the ends of this Declaration.
Assuming that the UN DRIP, like the Universal Declaration on Human
Rights, must now be regarded as embodying customary international law a question which the Court need not definitively resolve here - the
obligations enumerated therein do not strictly require the Republic to grant
the Bangsamoro people, through the instrumentality of the BJE, the
particular rights and powers provided for in the MOA-AD. Even the more
specific provisions of the UN DRIP are general in scope, allowing for
flexibility in its application by the different States.

There is, for instance, no requirement in the UN DRIP that States now
guarantee indigenous peoples their own police and internal security force.
Indeed, Article 8 presupposes that it is the State which will provide
protection for indigenous peoples against acts like the forced dispossession
of their lands - a function that is normally performed by police officers. If
the protection of a right so essential to indigenous people's identity is
acknowledged to be the responsibility of the State, then surely the
protection of rights less significant to them as such peoples would also be
the duty of States. Nor is there in the UN DRIP an acknowledgement of the
right of indigenous peoples to the aerial domain and atmospheric space.
What it upholds, in Article 26 thereof, is the right of indigenous peoples to
the lands, territories and resources which they have traditionally owned,
occupied or otherwise used or acquired.
Moreover, the UN DRIP, while upholding the right of indigenous peoples to
autonomy, does not obligate States to grant indigenous peoples the nearindependent status of an associated state. All the rights recognized in that
document are qualified in Article 46 as follows:
1. Nothing in this Declaration may be interpreted as implying
for any State, people, group or person any right to engage in any
activity or to perform any act contrary to the Charter of the United
Nations or construed as authorizing or encouraging any
action which would dismember or impair, totally or in part,
the territorial integrity or political unity of sovereign and
independent States.
Even if the UN DRIP were considered as part of the law of the land
pursuant to Article II, Section 2 of the Constitution, it would not suffice to
uphold the validity of the MOA-AD so as to render its compliance with other
laws unnecessary.
It is, therefore, clear that the MOA-AD contains numerous
provisions that cannot be reconciled with the Constitution and the
laws as presently worded. Respondents proffer, however, that the
signing of the MOA-AD alone would not have entailed any violation of law
or grave abuse of discretion on their part, precisely because it stipulates
that the provisions thereof inconsistent with the laws shall not take effect
until these laws are amended. They cite paragraph 7 of the MOA-AD strand
on GOVERNANCE quoted earlier, but which is reproduced below for
convenience:
7. The Parties agree that the mechanisms and modalities for the
actual implementation of this MOA-AD shall be spelt out in the
Comprehensive Compact to mutually take such steps to enable it
to occur effectively.

Any provisions of the MOA-AD requiring amendments to the

existing legal framework shall come into force upon signing of a
Comprehensive Compact and upon effecting the necessary
changes to the legal framework with due regard to non derogation
of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact.
Indeed, the foregoing stipulation keeps many controversial provisions of
the MOA-AD from coming into force until the necessary changes to the
legal framework are effected. While the word "Constitution" is not
mentioned in the provision now under consideration or anywhere
else in the MOA-AD, the term "legal framework" is certainly broad
enough to include the Constitution.
Notwithstanding the suspensive clause, however, respondents, by their
mere act of incorporating in the MOA-AD the provisions thereof regarding
the associative relationship between the BJE and the Central Government,
have already violated the Memorandum of Instructions From The President
dated March 1, 2001, which states that the "negotiations shall be
conducted in accordance with x x x the principles of the sovereignty and
territorial integrity of the Republic of the Philippines." (Emphasis
supplied) Establishing an associative relationship between the BJE and the
Central Government is, for the reasons already discussed, a preparation for
independence, or worse, an implicit acknowledgment of an independent
status already prevailing.
Even apart from the above-mentioned Memorandum, however, the MOAAD is defective because the suspensive clause is invalid, as discussed
below.
The authority of the GRP Peace Negotiating Panel to negotiate with the
MILF is founded on E.O. No. 3, Section 5(c), which states that there shall be
established Government Peace Negotiating Panels for negotiations with
different rebel groups to be "appointed by the President as her official
emissaries to conduct negotiations, dialogues, and face-to-face discussions
with rebel groups." These negotiating panels are to report to the President,
through the PAPP on the conduct and progress of the negotiations.
It bears noting that the GRP Peace Panel, in exploring lasting solutions to
the Moro Problem through its negotiations with the MILF, was not restricted
by E.O. No. 3 only to those options available under the laws as they
presently stand. One of the components of a comprehensive peace
process, which E.O. No. 3 collectively refers to as the "Paths to Peace," is
the pursuit of social, economic, and political reforms which may require
new legislation or even constitutional amendments. Sec. 4(a) of E.O. No. 3,
which reiterates Section 3(a), of E.O. No. 125,167 states:

SECTION 4. The Six Paths to Peace. - The components of the

comprehensive peace process comprise the processes known as
the "Paths to Peace". These component processes are interrelated
and not mutually exclusive, and must therefore be pursued
simultaneously in a coordinated and integrated fashion. They shall
include, but may not be limited to, the following:
a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This
component involves the vigorous implementation of various
policies, reforms, programs and projects aimed at
addressing the root causes of internal armed conflicts and
social unrest. This may require administrative action, new
legislation or even constitutional amendments.
x x x x (Emphasis supplied)
The MOA-AD, therefore, may reasonably be perceived as an attempt of
respondents to address, pursuant to this provision of E.O. No. 3, the root
causes of the armed conflict in Mindanao. The E.O. authorized them to
"think outside the box," so to speak. Hence, they negotiated and were set
on signing the MOA-AD that included various social, economic, and political
reforms which cannot, however, all be accommodated within the present
legal framework, and which thus would require new legislation and
constitutional amendments.

upheld the President's power to forbid the return of her exiled

predecessor. The rationale for the majority's ruling rested on the
President's
. . . unstated residual powers which are implied from
the grant of executive power and which are
necessary for her to comply with her duties under
the Constitution. The powers of the President are
not limited to what are expressly enumerated in the
article on the Executive Department and in
scattered provisions of the Constitution. This is so,
notwithstanding the avowed intent of the members of the
Constitutional Commission of 1986 to limit the powers of
the President as a reaction to the abuses under the regime
of Mr. Marcos, for the result was a limitation of specific
powers of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the
general grant of executive power.
Thus, the President's authority to declare a state of
rebellion springs in the main from her powers as chief
executive and, at the same time, draws strength from her
Commander-in-Chief powers. x x x (Emphasis and underscoring
supplied)

The inquiry on the legality of the "suspensive clause," however, cannot

stop here, because it must be asked whether the President herself
may exercise the power delegated to the GRP Peace Panel under
E.O. No. 3, Sec. 4(a).

Similarly, the President's power to conduct peace negotiations is implicitly

included in her powers as Chief Executive and Commander-in-Chief. As
Chief Executive, the President has the general responsibility to promote
public peace, and as Commander-in-Chief, she has the more specific duty
to prevent and suppress rebellion and lawless violence. 169

The President cannot delegate a power that she herself does not possess.
May the President, in the course of peace negotiations, agree to pursue
reforms that would require new legislation and constitutional amendments,
or should the reforms be restricted only to those solutions which the
present laws allow? The answer to this question requires a discussion of
the extent of the President's power to conduct peace negotiations.

As the experience of nations which have similarly gone through internal

armed conflict will show, however, peace is rarely attained by simply
pursuing a military solution. Oftentimes, changes as far-reaching as a
fundamental reconfiguration of the nation's constitutional structure is
required. The observations of Dr. Kirsti Samuels are enlightening, to wit:

That the authority of the President to conduct peace negotiations with

rebel groups is not explicitly mentioned in the Constitution does not mean
that she has no such authority. In Sanlakas v. Executive Secretary,168 in
issue was the authority of the President to declare a state of rebellion - an
authority which is not expressly provided for in the Constitution. The Court
held thus:
"In her ponencia in Marcos v. Manglapus, Justice Cortes put her
thesis into jurisprudence. There, the Court, by a slim 8-7 margin,

x x x [T]he fact remains that a successful political and governance

transition must form the core of any post-conflict peace-building
mission. As we have observed in Liberia and Haiti over the last ten
years, conflict cessation without modification of the political
environment, even where state-building is undertaken through
technical electoral assistance and institution- or capacity-building,
is unlikely to succeed. On average, more than 50 percent of states
emerging from conflict return to conflict. Moreover, a substantial

proportion of transitions have resulted in weak or limited

democracies.
The design of a constitution and its constitution-making process
can play an important role in the political and governance
transition. Constitution-making after conflict is an opportunity to
create a common vision of the future of a state and a road map on
how to get there. The constitution can be partly a peace
agreement and partly a framework setting up the rules by which
the new democracy will operate.170
In the same vein, Professor Christine Bell, in her article on the nature and
legal status of peace agreements, observed that the typical way that
peace agreements establish or confirm mechanisms for demilitarization
and demobilization is by linking them to new constitutional structures
addressing governance, elections, and legal and human rights
institutions.171
In the Philippine experience, the link between peace agreements and
constitution-making has been recognized by no less than the framers of
the Constitution. Behind the provisions of the Constitution on autonomous
regions172 is the framers' intention to implement a particular peace
agreement, namely, the Tripoli Agreement of 1976 between the GRP and
the MNLF, signed by then Undersecretary of National Defense Carmelo Z.
Barbero and then MNLF Chairman Nur Misuari.
MR. ROMULO. There are other speakers; so, although I have some
more questions, I will reserve my right to ask them if they are not
covered by the other speakers. I have only two questions.
I heard one of the Commissioners say that local autonomy
already exists in the Muslim region; it is working very well; it
has, in fact, diminished a great deal of the problems. So, my
question is: since that already exists, why do we have to go
into something new?
MR. OPLE. May I answer that on behalf of Chairman Nolledo.
Commissioner Yusup Abubakar is right that certain definite steps
have been taken to implement the provisions of the Tripoli
Agreement with respect to an autonomous region in
Mindanao. This is a good first step, but there is no question
that this is merely a partial response to the Tripoli
Agreement itself and to the fuller standard of regional
autonomy contemplated in that agreement, and now by
state policy.173(Emphasis supplied)

The constitutional provisions on autonomy and the statutes enacted

pursuant to them have, to the credit of their drafters, been partly
successful. Nonetheless, the Filipino people are still faced with the reality
of an on-going conflict between the Government and the MILF. If the
President is to be expected to find means for bringing this conflict to an
end and to achieve lasting peace in Mindanao, then she must be given the
leeway to explore, in the course of peace negotiations, solutions that may
require changes to the Constitution for their implementation. Being
uniquely vested with the power to conduct peace negotiations with rebel
groups, the President is in a singular position to know the precise nature of
their grievances which, if resolved, may bring an end to hostilities.
The President may not, of course, unilaterally implement the solutions that
she considers viable, but she may not be prevented from submitting them
as recommendations to Congress, which could then, if it is minded, act
upon them pursuant to the legal procedures for constitutional amendment
and revision. In particular, Congress would have the option, pursuant to
Article XVII, Sections 1 and 3 of the Constitution, to propose the
recommended amendments or revision to the people, call a constitutional
convention, or submit to the electorate the question of calling such a
convention.
While the President does not possess constituent powers - as those powers
may be exercised only by Congress, a Constitutional Convention, or the
people through initiative and referendum - she may submit proposals for
constitutional change to Congress in a manner that does not involve the
arrogation of constituent powers.
In Sanidad v. COMELEC,174 in issue was the legality of then President
Marcos' act of directly submitting proposals for constitutional amendments
to a referendum, bypassing the interim National Assembly which was the
body vested by the 1973 Constitution with the power to propose such
amendments. President Marcos, it will be recalled, never convened the
interim National Assembly. The majority upheld the President's act, holding
that "the urges of absolute necessity" compelled the President as the
agent of the people to act as he did, there being no interim National
Assembly to propose constitutional amendments. Against this ruling,
Justices Teehankee and Muoz Palma vigorously dissented. The Court's
concern at present, however, is not with regard to the point on which it was
then divided in that controversial case, but on that which was not disputed
by either side.
Justice Teehankee's dissent,175 in particular, bears noting. While he
disagreed that the President may directly submit proposed constitutional
amendments to a referendum, implicit in his opinion is a recognition that
he would have upheld the President's action along with the majority had

the President convened the interim National Assembly and coursed his
proposals through it. Thus Justice Teehankee opined:
"Since the Constitution provides for the organization of the
essential departments of government, defines and delimits the
powers of each and prescribes the manner of the exercise of such
powers, and the constituent power has not been granted to but has
been withheld from the President or Prime Minister, it follows that
the President's questioned decrees proposing and submitting
constitutional amendments directly to the people (without the
intervention of the interim National Assembly in whom the
power is expressly vested) are devoid of constitutional and
legal basis."176 (Emphasis supplied)
From the foregoing discussion, the principle may be inferred that the
President - in the course of conducting peace negotiations - may validly
consider implementing even those policies that require changes to the
Constitution, but she may not unilaterally implement them without the
intervention of Congress, or act in any way as if the assent of that
body were assumed as a certainty.

It will be observed that the President has authority, as stated in her oath of
office,178 only to preserve and defend the Constitution. Such presidential
power does not, however, extend to allowing her to change the
Constitution, but simply to recommend proposed amendments or revision.
As long as she limits herself to recommending these changes and submits
to the proper procedure for constitutional amendments and revision, her
mere recommendation need not be construed as an unconstitutional act.
The foregoing discussion focused on the President's authority to propose
constitutional amendments, since her authority to propose new
legislation is not in controversy. It has been an accepted practice for
Presidents in this jurisdiction to propose new legislation. One of the more
prominent instances the practice is usually done is in the yearly State of
the Nation Address of the President to Congress. Moreover, the annual
general appropriations bill has always been based on the budget prepared
by the President, which - for all intents and purposes - is a proposal for new
legislation coming from the President. 179
The "suspensive clause" in the MOA-AD viewed in light of the
above-discussed standards

Since, under the present Constitution, the people also have the power to
directly propose amendments through initiative and referendum, the
President may also submit her recommendations to the people, not as a
formal proposal to be voted on in a plebiscite similar to what President
Marcos did in Sanidad, but for their independent consideration of whether
these recommendations merit being formally proposed through initiative.

Given the limited nature of the President's authority to propose

constitutional amendments, she cannot guarantee to any third party that
the required amendments will eventually be put in place, nor even be
submitted to a plebiscite. The most she could do is submit these proposals
as recommendations either to Congress or the people, in whom constituent
powers are vested.

These recommendations, however, may amount to nothing more than the

President's suggestions to the people, for any further involvement in the
process of initiative by the Chief Executive may vitiate its character as a
genuine "people's initiative." The only initiative recognized by the
Constitution is that which truly proceeds from the people. As the Court
stated in Lambino v. COMELEC:177

Paragraph 7 on Governance of the MOA-AD states, however, that all

provisions thereof which cannot be reconciled with the present Constitution
and laws "shall come into force upon signing of a Comprehensive Compact
and upon effecting the necessary changes to the legal framework." This
stipulation does not bear the marks of a suspensive condition - defined in
civil law as a future and uncertain event - but of a term. It is not a question
of whether the necessary changes to the legal framework will be effected,
but when. That there is no uncertainty being contemplated is plain from
what follows, for the paragraph goes on to state that the contemplated
changes shall be "with due regard to non derogation of prior agreements
and within the stipulated timeframe to be contained in the Comprehensive
Compact."

"The Lambino Group claims that their initiative is the people's

voice.' However, the Lambino Group unabashedly states in ULAP
Resolution No. 2006-02, in the verification of their petition with the
COMELEC, that ULAP maintains its unqualified support to the
agenda of Her Excellency President Gloria Macapagal-Arroyo for
constitutional reforms.' The Lambino Group thus admits that their
people's' initiative is an unqualified support to the agenda' of
the incumbent President to change the Constitution. This forewarns
the Court to be wary of incantations of people's voice' or
sovereign will' in the present initiative."

Pursuant to this stipulation, therefore, it is mandatory for the GRP to

effect the changes to the legal framework contemplated in the MOA-AD which changes would include constitutional amendments, as discussed
earlier. It bears noting that,

By the time these changes are put in place, the MOA-AD itself
would be counted among the "prior agreements" from which there
could be no derogation.
What remains for discussion in the Comprehensive Compact would merely
be the implementing details for these "consensus points" and, notably, the
deadline for effecting the contemplated changes to the legal framework.
Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with
the limits of the President's authority to propose constitutional
amendments, it being a virtual guarantee that the Constitution and the
laws of the Republic of the Philippines will certainly be adjusted to conform
to all the "consensus points" found in the MOA-AD. Hence, it must be
struck down as unconstitutional.
A comparison between the "suspensive clause" of the MOA-AD with a
similar provision appearing in the 1996 final peace agreement between the
MNLF and the GRP is most instructive.
As a backdrop, the parties to the 1996 Agreement stipulated that it would
be implemented in two phases. Phase I covered a three-year transitional
period involving the putting up of new administrative structures through
Executive Order, such as the Special Zone of Peace and Development
(SZOPAD) and the Southern Philippines Council for Peace and Development
(SPCPD), while Phase II covered the establishment of the new regional
autonomous government through amendment or repeal of R.A. No. 6734,
which was then the Organic Act of the ARMM.
The stipulations on Phase II consisted of specific agreements on the
structure of the expanded autonomous region envisioned by the parties. To
that extent, they are similar to the provisions of the MOA-AD. There is,
however, a crucial difference between the two agreements. While the MOAAD virtually guarantees that the "necessary changes to the legal
framework" will be put in place, the GRP-MNLF final peace agreement
states thus: "Accordingly, these provisions [on Phase II] shall be
recommended by the GRP to Congress for incorporation in the
amendatory or repealing law."
Concerns have been raised that the MOA-AD would have given rise to a
binding international law obligation on the part of the Philippines to change
its Constitution in conformity thereto, on the ground that it may be
considered either as a binding agreement under international law, or a
unilateral declaration of the Philippine government to the international
community that it would grant to the Bangsamoro people all the
concessions therein stated. Neither ground finds sufficient support in
international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have

included foreign dignitaries as signatories. In addition, representatives of
other nations were invited to witness its signing in Kuala Lumpur. These
circumstances readily lead one to surmise that the MOA-AD would have
had the status of a binding international agreement had it been signed. An
examination of the prevailing principles in international law, however,
leads to the contrary conclusion.
The Decision on Challenge to Jurisdiction: Lom Accord Amnesty 180 (the
Lom Accord case) of the Special Court of Sierra Leone is enlightening. The
Lom Accord was a peace agreement signed on July 7, 1999 between the
Government of Sierra Leone and the Revolutionary United Front (RUF), a
rebel group with which the Sierra Leone Government had been in armed
conflict for around eight years at the time of signing. There were noncontracting signatories to the agreement, among which were the
Government of the Togolese Republic, the Economic Community of West
African States, and the UN.
On January 16, 2002, after a successful negotiation between the UN
Secretary-General and the Sierra Leone Government, another agreement
was entered into by the UN and that Government whereby the Special
Court of Sierra Leone was established. The sole purpose of the Special
Court, an international court, was to try persons who bore the greatest
responsibility for serious violations of international humanitarian law and
Sierra Leonean law committed in the territory of Sierra Leone since
November 30, 1996.
Among the stipulations of the Lom Accord was a provision for the full
pardon of the members of the RUF with respect to anything done by them
in pursuit of their objectives as members of that organization since the
conflict began.
In the Lom Accord case, the Defence argued that the Accord created an
internationally binding obligation not to prosecute the beneficiaries of
the amnesty provided therein, citing, among other things, the participation
of foreign dignitaries and international organizations in the finalization of
that agreement. The Special Court, however, rejected this argument, ruling
that the Lome Accord is not a treaty and that it can only create binding
obligations and rights between the parties in municipal law, not in
international law. Hence, the Special Court held, it is ineffective in
depriving an international court like it of jurisdiction.
"37. In regard to the nature of a negotiated settlement of an
internal armed conflict it is easy to assume and to argue with
some degree of plausibility, as Defence counsel for the
defendants seem to have done, that the mere fact that in

addition to the parties to the conflict, the document

formalizing the settlement is signed by foreign heads of
state or their representatives and representatives of
international organizations, means the agreement of the
parties is internationalized so as to create obligations in
international law.
xxxx
40. Almost every conflict resolution will involve the parties to the
conflict and the mediator or facilitator of the settlement, or persons
or bodies under whose auspices the settlement took place but who
are not at all parties to the conflict, are not contracting parties and
who do not claim any obligation from the contracting parties or
incur any obligation from the settlement.
41. In this case, the parties to the conflict are the lawful
authority of the State and the RUF which has no status of
statehood and is to all intents and purposes a faction
within the state. The non-contracting signatories of the
Lom Agreement were moral guarantors of the principle
that, in the terms of Article XXXIV of the Agreement, "this
peace agreement is implemented with integrity and in good
faith by both parties". The moral guarantors assumed no
legal obligation. It is recalled that the UN by its representative
appended, presumably for avoidance of doubt, an understanding of
the extent of the agreement to be implemented as not including
certain international crimes.
42. An international agreement in the nature of a treaty must
create rights and obligations regulated by international law so that
a breach of its terms will be a breach determined under
international law which will also provide principle means of
enforcement. The Lom Agreement created neither rights
nor obligations capable of being regulated by international
law. An agreement such as the Lom Agreement which
brings to an end an internal armed conflict no doubt
creates a factual situation of restoration of peace that the
international community acting through the Security
Council may take note of. That, however, will not convert it
to an international agreement which creates an obligation
enforceable in international, as distinguished from
municipal, law. A breach of the terms of such a peace agreement
resulting in resumption of internal armed conflict or creating a
threat to peace in the determination of the Security Council may
indicate a reversal of the factual situation of peace to be visited

with possible legal consequences arising from the new situation of

conflict created. Such consequences such as action by the Security
Council pursuant to Chapter VII arise from the situation and not
from the agreement, nor from the obligation imposed by it. Such
action cannot be regarded as a remedy for the breach. A peace
agreement which settles an internal armed conflict cannot
be ascribed the same status as one which settles an
international armed conflict which, essentially, must be
between two or more warring States. The Lom Agreement
cannot be characterised as an international instrument. x x
x" (Emphasis, italics and underscoring supplied)
Similarly, that the MOA-AD would have been signed by representatives of
States and international organizations not parties to the Agreement would
not have sufficed to vest in it a binding character under international law.
In another vein, concern has been raised that the MOA-AD would amount
to a unilateral declaration of the Philippine State, binding under
international law, that it would comply with all the stipulations stated
therein, with the result that it would have to amend its Constitution
accordingly regardless of the true will of the people. Cited as authority for
this view is Australia v. France,181 also known as the Nuclear Tests Case,
decided by the International Court of Justice (ICJ).
In the Nuclear Tests Case, Australia challenged before the ICJ the legality of
France's nuclear tests in the South Pacific. France refused to appear in the
case, but public statements from its President, and similar statements from
other French officials including its Minister of Defence, that its 1974 series
of atmospheric tests would be its last, persuaded the ICJ to dismiss the
case.182 Those statements, the ICJ held, amounted to a legal undertaking
addressed to the international community, which required no acceptance
from other States for it to become effective.
Essential to the ICJ ruling is its finding that the French government
intended to be bound to the international community in issuing its public
statements, viz:
43. It is well recognized that declarations made by way of
unilateral acts, concerning legal or factual situations, may have the
effect of creating legal obligations. Declarations of this kind may
be, and often are, very specific. When it is the intention of the
State making the declaration that it should become bound
according to its terms, that intention confers on the
declaration the character of a legal undertaking, the State
being thenceforth legally required to follow a course of
conduct consistent with the declaration. An undertaking of

this kind, if given publicly, and with an intent to be bound, even

though not made within the context of international negotiations, is
binding. In these circumstances, nothing in the nature of a quid pro
quo nor any subsequent acceptance of the declaration, nor even
any reply or reaction from other States, is required for the
declaration to take effect, since such a requirement would be
inconsistent with the strictly unilateral nature of the juridical act by
which the pronouncement by the State was made.
44. Of course, not all unilateral acts imply obligation; but a
State may choose to take up a certain position in relation
to a particular matter with the intention of being bound-the
intention is to be ascertained by interpretation of the act.
When States make statements by which their freedom of action is
to be limited, a restrictive interpretation is called for.
xxxx
51. In announcing that the 1974 series of atmospheric tests
would be the last, the French Government conveyed to the
world at large, including the Applicant, its intention
effectively to terminate these tests. It was bound to
assume that other States might take note of these
statements and rely on their being effective. The validity of
these statements and their legal consequences must be
considered within the general framework of the security of
international intercourse, and the confidence and trust which
are so essential in the relations among States. It is from the
actual substance of these statements, and from the
circumstances attending their making, that the legal
implications of the unilateral act must be deduced. The
objects of these statements are clear and they were
addressed to the international community as a whole, and
the Court holds that they constitute an undertaking
possessing legal effect. The Court considers *270 that the
President of the Republic, in deciding upon the effective cessation
of atmospheric tests, gave an undertaking to the international
community to which his words were addressed. x x x (Emphasis
and underscoring supplied)
As gathered from the above-quoted ruling of the ICJ, public statements of a
state representative may be construed as a unilateral declaration only
when the following conditions are present: the statements were clearly
addressed to the international community, the state intended to be bound
to that community by its statements, and that not to give legal effect to
those statements would be detrimental to the security of international

intercourse. Plainly, unilateral declarations arise only in peculiar

circumstances.
The limited applicability of the Nuclear Tests Case ruling was recognized in
a later case decided by the ICJ entitled Burkina Faso v. Mali,183 also known
as the Case Concerning the Frontier Dispute. The public declaration subject
of that case was a statement made by the President of Mali, in an interview
by a foreign press agency, that Mali would abide by the decision to be
issued by a commission of the Organization of African Unity on a frontier
dispute then pending between Mali and Burkina Faso.
Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's
President was not a unilateral act with legal implications. It clarified that its
ruling in the Nuclear Tests case rested on the peculiar circumstances
surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral
act, account must be taken of all the factual circumstances in
which the act occurred. For example, in the Nuclear Tests cases,
the Court took the view that since the applicant States
were not the only ones concerned at the possible
continuance of atmospheric testing by the French
Government, that Government's unilateral declarations had
conveyed to the world at large, including the Applicant, its
intention effectively to terminate these tests (I.C.J. Reports
1974, p. 269, para. 51; p. 474, para. 53). In the particular
circumstances of those cases, the French Government
could not express an intention to be bound otherwise than
by unilateral declarations. It is difficult to see how it could
have accepted the terms of a negotiated solution with each
of the applicants without thereby jeopardizing its
contention that its conduct was lawful. The circumstances
of the present case are radically different. Here, there was
nothing to hinder the Parties from manifesting an intention
to accept the binding character of the conclusions of the
Organization of African Unity Mediation Commission by the
normal method: a formal agreement on the basis of
reciprocity. Since no agreement of this kind was concluded
between the Parties, the Chamber finds that there are no grounds
to interpret the declaration made by Mali's head of State on 11
April 1975 as a unilateral act with legal implications in regard to
the present case. (Emphasis and underscoring supplied)
Assessing the MOA-AD in light of the above criteria, it would not have
amounted to a unilateral declaration on the part of the Philippine State to
the international community. The Philippine panel did not draft the same

with the clear intention of being bound thereby to the international

community as a whole or to any State, but only to the MILF. While there
were States and international organizations involved, one way or another,
in the negotiation and projected signing of the MOA-AD, they participated
merely as witnesses or, in the case of Malaysia, as facilitator. As held in the
Lom Accord case, the mere fact that in addition to the parties to the
conflict, the peace settlement is signed by representatives of states and
international organizations does not mean that the agreement is
internationalized so as to create obligations in international law.
Since the commitments in the MOA-AD were not addressed to States, not
to give legal effect to such commitments would not be detrimental to the
security of international intercourse - to the trust and confidence essential
in the relations among States.
In one important respect, the circumstances surrounding the MOA-AD are
closer to that of Burkina Faso wherein, as already discussed, the Mali
President's statement was not held to be a binding unilateral declaration
by the ICJ. As in that case, there was also nothing to hinder the Philippine
panel, had it really been its intention to be bound to other States, to
manifest that intention by formal agreement. Here, that formal agreement
would have come about by the inclusion in the MOA-AD of a clear
commitment to be legally bound to the international community, not just
the MILF, and by an equally clear indication that the signatures of the
participating states-representatives would constitute an acceptance of that
commitment. Entering into such a formal agreement would not have
resulted in a loss of face for the Philippine government before the
international community, which was one of the difficulties that prevented
the French Government from entering into a formal agreement with other
countries. That the Philippine panel did not enter into such a formal
agreement suggests that it had no intention to be bound to the
international community. On that ground, the MOA-AD may not be
considered a unilateral declaration under international law.
The MOA-AD not being a document that can bind the Philippines under
international law notwithstanding, respondents' almost consummated act
of guaranteeing amendments to the legal framework is, by itself,
sufficient to constitute grave abuse of discretion. The grave abuse
lies not in the fact that they considered, as a solution to the Moro Problem,
the creation of a state within a state, but in their brazen willingness to
guarantee that Congress and the sovereign Filipino people would
give their imprimatur to their solution. Upholding such an act would
amount to authorizing a usurpation of the constituent powers vested only
in Congress, a Constitutional Convention, or the people themselves
through the process of initiative, for the only way that the Executive can
ensure the outcome of the amendment process is through an undue
influence or interference with that process.

The sovereign people may, if it so desired, go to the extent of giving up a

portion of its own territory to the Moros for the sake of peace, for it can
change the Constitution in any it wants, so long as the change is not
inconsistent with what, in international law, is known as Jus Cogens.184
Respondents, however, may not preempt it in that decision.
SUMMARY
The petitions are ripe for adjudication. The failure of respondents to consult
the local government units or communities affected constitutes a
departure by respondents from their mandate under E.O. No. 3. Moreover,
respondents exceeded their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of the Constitution
by any branch of government is a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public
interest or of transcendental importance, the Court grants the petitioners,
petitioners-in-intervention and intervening respondents the requisite locus
standi in keeping with the liberal stance adopted in David v. MacapagalArroyo.
Contrary to the assertion of respondents that the non-signing of the MOAAD and the eventual dissolution of the GRP Peace Panel mooted the
present petitions, the Court finds that the present petitions provide an
exception to the "moot and academic" principle in view of (a) the grave
violation of the Constitution involved; (b) the exceptional character of the
situation and paramount public interest; (c) the need to formulate
controlling principles to guide the bench, the bar, and the public; and (d)
the fact that the case is capable of repetition yet evading review.
The MOA-AD is a significant part of a series of agreements necessary to
carry out the GRP-MILF Tripoli Agreement on Peace signed by the
government and the MILF back in June 2001. Hence, the present MOA-AD
can be renegotiated or another one drawn up that could contain similar or
significantly dissimilar provisions compared to the original.
The Court, however, finds that the prayers for mandamus have been
rendered moot in view of the respondents' action in providing the Court
and the petitioners with the official copy of the final draft of the MOA-AD
and its annexes.
The people's right to information on matters of public concern under Sec.
7, Article III of the Constitution is in splendid symmetry with the state
policy of full public disclosure of all its transactions involving public interest
under Sec. 28, Article II of the Constitution. The right to information
guarantees the right of the people to demand information, while Section 28

recognizes the duty of officialdom to give information even if nobody

demands. The complete and effective exercise of the right to information
necessitates that its complementary provision on public disclosure derive
the same self-executory nature, subject only to reasonable safeguards or
limitations as may be provided by law.
The contents of the MOA-AD is a matter of paramount public concern
involving public interest in the highest order. In declaring that the right to
information contemplates steps and negotiations leading to the
consummation of the contract, jurisprudence finds no distinction as to the
executory nature or commercial character of the agreement.
An essential element of these twin freedoms is to keep a continuing
dialogue or process of communication between the government and the
people. Corollary to these twin rights is the design for feedback
mechanisms. The right to public consultation was envisioned to be a
species of these public rights.
At least three pertinent laws animate these constitutional imperatives and
justify the exercise of the people's right to be consulted on relevant
matters relating to the peace agenda.
One, E.O. No. 3 itself is replete with mechanics for continuing consultations
on both national and local levels and for a principal forum for consensusbuilding. In fact, it is the duty of the Presidential Adviser on the Peace
Process to conduct regular dialogues to seek relevant information,
comments, advice, and recommendations from peace partners and
concerned sectors of society.
Two, Republic Act No. 7160 or the Local Government Code of 1991 requires
all national offices to conduct consultations before any project or program
critical to the environment and human ecology including those that may
call for the eviction of a particular group of people residing in such locality,
is implemented therein. The MOA-AD is one peculiar program that
unequivocally and unilaterally vests ownership of a vast territory to the
Bangsamoro people, which could pervasively and drastically result to the
diaspora or displacement of a great number of inhabitants from their total
environment.
Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997
provides for clear-cut procedure for the recognition and delineation of
ancestral domain, which entails, among other things, the observance of
the free and prior informed consent of the Indigenous Cultural
Communities/Indigenous Peoples. Notably, the statute does not grant the
Executive Department or any government agency the power to delineate

and recognize an ancestral domain claim by mere agreement or

compromise.
The invocation of the doctrine of executive privilege as a defense to the
general right to information or the specific right to consultation is
untenable. The various explicit legal provisions fly in the face of executive
secrecy. In any event, respondents effectively waived such defense after it
unconditionally disclosed the official copies of the final draft of the MOAAD, for judicial compliance and public scrutiny.
In sum, the Presidential Adviser on the Peace Process committed grave
abuse of discretion when he failed to carry out the pertinent consultation
process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic
Act No. 8371. The furtive process by which the MOA-AD was designed and
crafted runs contrary to and in excess of the legal authority, and amounts
to a whimsical, capricious, oppressive, arbitrary and despotic exercise
thereof. It illustrates a gross evasion of positive duty and a virtual refusal to
perform the duty enjoined.
The MOA-AD cannot be reconciled with the present Constitution and laws.
Not only its specific provisions but the very concept underlying them,
namely, the associative relationship envisioned between the GRP and the
BJE, are unconstitutional, for the concept presupposes that the
associated entity is a state and implies that the same is on its way to
independence.
While there is a clause in the MOA-AD stating that the provisions thereof
inconsistent with the present legal framework will not be effective until
that framework is amended, the same does not cure its defect. The
inclusion of provisions in the MOA-AD establishing an associative
relationship between the BJE and the Central Government is, itself, a
violation of the Memorandum of Instructions From The President dated
March 1, 2001, addressed to the government peace panel. Moreover, as
the clause is worded, it virtually guarantees that the necessary
amendments to the Constitution and the laws will eventually be put in
place. Neither the GRP Peace Panel nor the President herself is authorized
to make such a guarantee. Upholding such an act would amount to
authorizing a usurpation of the constituent powers vested only in
Congress, a Constitutional Convention, or the people themselves through
the process of initiative, for the only way that the Executive can ensure the
outcome of the amendment process is through an undue influence or
interference with that process.
While the MOA-AD would not amount to an international agreement or
unilateral declaration binding on the Philippines under international law,

respondents' act of guaranteeing amendments is, by itself, already a

constitutional violation that renders the MOA-AD fatally defective.
WHEREFORE, respondents' motion to dismiss is DENIED. The main and
intervening petitions are GIVEN DUE COURSE and hereby GRANTED.

In this original petition for mandamus,1 petitioners Social Justice Society

(SJS), Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon seek to
compel respondent Hon. Jose L. Atienza, Jr., mayor of the City of Manila, to
enforce Ordinance No. 8027.
The antecedents are as follows.

The Memorandum of Agreement on the Ancestral Domain Aspect of the

GRP-MILF Tripoli Agreement on Peace of 2001 is declared contrary to law
and the Constitution.
SO ORDERED.

On November 20, 2001, the Sangguniang Panlungsod of Manila enacted

Ordinance No. 8027.2 Respondent mayor approved the ordinance on
November 28, 2001.3 It became effective on December 28, 2001, after its
publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated
to local government units, a principle described as the power inherent in a
government to enact laws, within constitutional limits, to promote the
order, safety, health, morals and general welfare of the society.5 This is
evident from Sections 1 and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and
ensuring health, public safety, and general welfare of the residents of
Pandacan and Sta. Ana as well as its adjoining areas, the land use of
[those] portions of land bounded by the Pasig River in the north, PNR
Railroad Track in the east, Beata St. in the south, Palumpong St. in the
southwest, and Estero de Pancacan in the west[,] PNR Railroad in the
northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the
southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta.
Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F.
Manalo Street, are hereby reclassified from Industrial II to Commercial I.
xxx xxx xxx

G.R. No. 156052

March 7, 2007

SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO,

and BONIFACIO S. TUMBOKON, Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of
Manila, Respondent.
DECISION
CORONA, J.:

SEC. 3. Owners or operators of industries and other businesses, the

operation of which are no longer permitted under Section 1 hereof, are
hereby given a period of six (6) months from the date of effectivity of this
Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial
to commercial and directed the owners and operators of businesses
disallowed under Section 1 to cease and desist from operating their
businesses within six months from the date of effectivity of the ordinance.
Among the businesses situated in the area are the so-called "Pandacan
Terminals" of the oil companies Caltex (Philippines), Inc., Petron
Corporation and Pilipinas Shell Petroleum Corporation.

However, on June 26, 2002, the City of Manila and the Department of
Energy (DOE) entered into a memorandum of understanding (MOU)6 with
the oil companies in which they agreed that "the scaling down of the
Pandacan Terminals [was] the most viable and practicable option." Under
the MOU, the oil companies agreed to perform the following:
Section 1. - Consistent with the objectives stated above, the OIL
COMPANIES shall, upon signing of this MOU, undertake a program to scale
down the Pandacan Terminals which shall include, among others, the
immediate removal/decommissioning process of TWENTY EIGHT (28) tanks
starting with the LPG spheres and the commencing of works for the
creation of safety buffer and green zones surrounding the Pandacan
Terminals. xxx
Section 2. Consistent with the scale-down program mentioned above,
the OIL COMPANIES shall establish joint operations and management,
including the operation of common, integrated and/or shared facilities,
consistent with international and domestic technical, safety, environmental
and economic considerations and standards. Consequently, the joint
operations of the OIL COMPANIES in the Pandacan Terminals shall be
limited to the common and integrated areas/facilities. A separate
agreement covering the commercial and operational terms and conditions
of the joint operations, shall be entered into by the OIL COMPANIES.
Section 3. - The development and maintenance of the safety and green
buffer zones mentioned therein, which shall be taken from the properties of
the OIL COMPANIES and not from the surrounding communities, shall be
the sole responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the
following:
Section 1. - The City Mayor shall endorse to the City Council this MOU for
its appropriate action with the view of implementing the spirit and intent
thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit
and intent of this MOU, enable the OIL COMPANIES to continuously operate
in compliance with legal requirements, within the limited area resulting
from the joint operations and the scale down program.
Section 3. - The DOE and the City Mayor shall monitor the OIL
COMPANIES compliance with the provisions of this MOU.

Section 4. - The CITY OF MANILA and the national government shall

protect the safety buffer and green zones and shall exert all efforts at
preventing future occupation or encroachment into these areas by illegal
settlers and other unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the
same resolution, the Sanggunian declared that the MOU was effective only
for a period of six months starting July 25, 2002.8 Thereafter, on January
30, 2003, the Sanggunian adopted Resolution No. 139 extending the
validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor
Atienza to issue special business permits to the oil companies. Resolution
No. 13, s. 2003 also called for a reassessment of the ordinance.10
Meanwhile, petitioners filed this original action for mandamus on
December 4, 2002 praying that Mayor Atienza be compelled to enforce
Ordinance No. 8027 and order the immediate removal of the terminals of
the oil companies.11
The issues raised by petitioners are as follows:
1. whether respondent has the mandatory legal duty to enforce
Ordinance No. 8027 and order the removal of the Pandacan
Terminals, and
2. whether the June 26, 2002 MOU and the resolutions ratifying it
can amend or repeal Ordinance No. 8027.12
Petitioners contend that respondent has the mandatory legal duty, under
Section 455 (b) (2) of the Local Government Code (RA 7160),13 to enforce
Ordinance No. 8027 and order the removal of the Pandacan Terminals of
the oil companies. Instead, he has allowed them to stay.
Respondents defense is that Ordinance No. 8027 has been superseded by
the MOU and the resolutions.14 However, he also confusingly argues that
the ordinance and MOU are not inconsistent with each other and that the
latter has not amended the former. He insists that the ordinance remains
valid and in full force and effect and that the MOU did not in any way
prevent him from enforcing and implementing it. He maintains that the
MOU should be considered as a mere guideline for its full
implementation.15
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus
may be filed when any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically
enjoins as a duty resulting from an office, trust or station. Mandamus is an

extraordinary writ that is employed to compel the performance, when

refused, of a ministerial duty that is already imposed on the respondent
and there is no other plain, speedy and adequate remedy in the ordinary
course of law. The petitioner should have a well-defined, clear and certain
legal right to the performance of the act and it must be the clear and
imperative duty of respondent to do the act required to be done.17

The question now is whether the MOU entered into by respondent with the
oil companies and the subsequent resolutions passed by the Sanggunian
have made the respondents duty to enforce Ordinance No. 8027 doubtful,
unclear or uncertain. This is also connected to the second issue raised by
petitioners, that is, whether the MOU and Resolution Nos. 97, s. 2002 and
13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027.

Mandamus will not issue to enforce a right, or to compel compliance with a

duty, which is questionable or over which a substantial doubt exists. The
principal function of the writ of mandamus is to command and to expedite,
not to inquire and to adjudicate; thus, it is neither the office nor the aim of
the writ to secure a legal right but to implement that which is already
established. Unless the right to the relief sought is unclouded, mandamus
will not issue.18

We need not resolve this issue. Assuming that the terms of the MOU were
inconsistent with Ordinance No. 8027, the resolutions which ratified it and
made it binding on the City of Manila expressly gave it full force and effect
only until April 30, 2003. Thus, at present, there is nothing that legally
hinders respondent from enforcing Ordinance No. 8027.24

To support the assertion that petitioners have a clear legal right to the
enforcement of the ordinance, petitioner SJS states that it is a political
party registered with the Commission on Elections and has its offices in
Manila. It claims to have many members who are residents of Manila. The
other petitioners, Cabigao and Tumbokon, are allegedly residents of Manila.
We need not belabor this point. We have ruled in previous cases that when
a mandamus proceeding concerns a public right and its object is to compel
a public duty, the people who are interested in the execution of the laws
are regarded as the real parties in interest and they need not show any
specific interest.19 Besides, as residents of Manila, petitioners have a
direct interest in the enforcement of the citys ordinances. Respondent
never questioned the right of petitioners to institute this proceeding.

Ordinance No. 8027 was enacted right after the Philippines, along with the
rest of the world, witnessed the horror of the September 11, 2001 attack
on the Twin Towers of the World Trade Center in New York City. The
objective of the ordinance is to protect the residents of Manila from the
catastrophic devastation that will surely occur in case of a terrorist
attack25 on the Pandacan Terminals. No reason exists why such a
protective measure should be delayed.
WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L.
Atienza, Jr., as mayor of the City of Manila, is directed to immediately
enforce Ordinance No. 8027.
SO ORDERED.

On the other hand, the Local Government Code imposes upon respondent
the duty, as city mayor, to "enforce all laws and ordinances relative to the
governance of the city.">20 One of these is Ordinance No. 8027. As the
chief executive of the city, he has the duty to enforce Ordinance No. 8027
as long as it has not been repealed by the Sanggunian or annulled by the
courts.21 He has no other choice. It is his ministerial duty to do so. In
Dimaporo v. Mitra, Jr.,22 we stated the reason for this:
These officers cannot refuse to perform their duty on the ground of an
alleged invalidity of the statute imposing the duty. The reason for this is
obvious. It might seriously hinder the transaction of public business if these
officers were to be permitted in all cases to question the constitutionality
of statutes and ordinances imposing duties upon them and which have not
judicially been declared unconstitutional. Officers of the government from
the highest to the lowest are creatures of the law and are bound to obey
it.23

PROPERTY
G.R. No. 114299 September 24, 1999
TRADERS
ROYAL
BANK, petitioner,
vs.
HON. COURT OF APPEALS, PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA,
LINDA JOY, all surnamed CAPAY and RAMON A. GONZALES, respondents.
G.R. No. 118862 September 24, 1999

PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed CAPAY,
and
RAMON
A.
GONZALES, petitioners,
vs.
SPS. HONORATO D. SANTOS and MARIA CRISTINA S. SANTOS, SPS. CECILIO L. PE and
JOSEFINA L. PE, FLORA LARON WESCOMBE, SPS. TELESFORO P. ALFELOR II and LIZA
R. ALFELOR, SPS. DEAN RODERICK FERNANDO and LAARNI MAGDAMO FERNANDO,
REMEDIOS OCA, DEVELOPMENT BANK OF THE PHILIPPINES and TRADERS ROYAL
BANK, respondents.

KAPUNAN, J.:
The present controversy has its roots in a mortgage executed by the spouses Maximo and
Patria Capay in favor of Traders Royal Bank (TRB) pursuant to a loan extended by the latter to
the former. The mortgage covered several properties, including a parcel of land, the subject of
the
present
dispute. 1 The loan became due on January 8, 1964 and the same having remained unpaid, TRB
instituted extra-judicial foreclosure proceedings upon the mortgaged property.
To prevent the property's sale by public auction, the Capays, on September 22, 1966, filed a
petition for prohibition with preliminary injunction (Civil Case No. Q-10453) before the Court of
First Instance (CFI) of Rizal, alleging that the mortgage was void since they did not receive the
proceeds of the loan. The trial court initially granted the Capays' prayer for preliminary injunction.
On March 17, 1967, the Capays caused to be filed in the Register of Deeds of Baguio City a
notice of lis pendens over the disputed property. Said notice was entered in the Day Book, as
well as in the Capays' certificate of title.
Subsequently, the injunction issued by the trial court was lifted thus allowing the foreclosure sale
to proceed. Foreclosure proceedings were initiated and on October 17, 1968, the property was
sold to TRB which was the highest bidder at the auction sale. A sheriff certificate of sale was
issued in its name on the same day. On February 25, 1970, the property was consolidated in the
name of TRB, the sole bidder in the sale. TCT No. T-6595 in the name of the Capay spouses
was then cancelled and a new one, TCT No. T-16272, 2 was entered in the bank's name. The
notice of lis pendens, however, was not carried over in the certificate of title issued in the name
TRB.
Thereafter, the Capays filed with the CFI a supplemental complaint praying for the recovery of
the property with damages and attorney's fees. Trial in Civil Case No. Q-10453 proceeded and,
on October 3, 1977, the CFI rendered its decision declaring the mortgage void for want of
consideration. The CFI ordered, among other things, the cancellation of TCT No. T-16272 in the
name of TRB and the issuance of new certificates of title in the name of the Capay spouses.
TRB appealed to the Court of Appeals. While the case was pending in the Court of Appeals,
TRB on March 17, 1982 sold the land to Emelita Santiago in whose name a new certificate of
title, TCT No. 33774, 3 was issued, also, without any notice of lis pendens annotated thereon.
Santiago in turn divided the land into six (6) lots and sold these to Marcial Alcantara, Armando
Cruz and Artemio Sanchez, who became co-owners thereof. 4 Alcantara and his co-owners
developed the property and thereafter sold the six (6) lots to seperate buyers who issued
seperate titles, again, bearing no notice of lis pendens. 5
On July 30, 1982, the Court of Appeals rendered its decision modifying the decision of the trial
court as to the award of damages but affirming the same in all other respects.
For having been filed out of time and for lack of merit, the petition for certiorari filed by TRB
before this Court 6 was denied in a Resolution dated September 12, 1983. TRB's motion for
reconsideration was similarly denied in a Resolution dated October 12, 1983. The Court's
September 12, 1983 Resolution having become final and executory on November 9, 1983, the

trial court issued a writ of execution directing the Register of Deeds of Baguio City to cancel TCT
No. 16272 in the name of TRB, and to issue a new one in the name of the Capay spouses.
Said writ, however, could not be implemented because of the successive subsequent transfers
of the subdivided property to buyers who obtained separate titles thereto. Thus, a complaint for
recovery of possession ownership dated 8 June 1985 was filed before the Quezon City Regional
Trial Court against TRB and the subsequent transferees of the property, the respondents in G.R.
No. 118862 (hereinafter, "the non-bank respondents"). Plaintiffs in said case were Patria Capay,
her children by Maximo 7 who succeeded him upon his death on August 25, 1976, and Ramon
Gonzales, counsel of the spouses in Civil Case No. Q-10453 who become co-owner of the
property to the extent of 35% thereof as his attorney's fees (collectively, "the Capays"). On
March 27, 1991, the trial court rendered its decision, the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the defendants and
ordering the Register of Deeds for Baguio to cancel TCT No. T-36177, Books 198, Page 177 in
the names of defendants Spouses Honorato D. Santos and Maria Cristina Santos; to cancel
TCT No. 36707, Book 201, Page 107 in the names of defendant Spouses Cecilio Pe and
Josefina L. Pe; to cancel TCT No. T-36051, Book 198, Page 51 in the name of Flora Laron
Wescombe, married to Kevin Lind Wescombe (now deceased); to cancel TCT No. 36147, Book
198, page 147 in the names of Spouses Telesforo P. Alfelor II and Liza R. Alfelor; to cancel TCT
No. T-36730, Book 201, Page 130 in the names of Spouses Dean Roderick Fernando and
Laarni Magdamo Fernando; to cancel TCT No. 37437, Book 205, Page 37 in the name of
Remedios Oca, and issue new ones free from all liens and encumbrances, together with all the
improvements therein in the names of plaintiffs sharing pro indiviso as follows: 35% to Ramon A.
Gonzales, married to Lilia Y. Gonzales, of legal age, with postal address at 23 Sunrise Hill, New
Manila, Quezon City 37.92% to Patria B. Capay, of legal age, widow, Filipino; 5.41% each to
Ruby Ann Capay, of legal age, Filipino married to Pokka Vainio, Finnish citizen; Chona Margarita
Capay, of legal age, Filipino, married to Waldo Flores; Rosario Capay of legal age, Filipino,
married to Jose Cuaycong, Jr.; Cynthia Capay, of legal age, Filipino, married to Raul Flores;
Linda Joy Capay, of legal age, Filipino, married to Pedro Duran, all with postal address at 37
Sampaguita St., Capitolville Subd., Bacolod City, ordering said defendants to vacate the
premises in question and restoring plaintiffs thereto and for defendant Traders Royal Bank to
pay each of the plaintiffs moral damages in the amount of P100,000.00, P40,000.00 in
exemplary damages and P40,000.00 as attorney's fees, all with legal interest from the filing of
the complaint, with costs against defendants.
SO ORDERED. 8
TRB and the non-bank respondents appealed to the Court of Appeals. In a Decision
promulgated on February 24, 1994 in CA-G.R. CV No. 33920, the appellate court affirmed the
decision of the trial court in toto. 9 It ruled that the non-bank respondents cannot be considered
as purchasers for value and in good faith, having purchased the property subsequent to the
action in Civil Case No. Q-10453 and that while the notice of lis pendens was not carried over to
TRB's certificate of title, as well as to the subsequent transferees' titles, it was entered in the Day
Book which is sufficient to constitute registration and notice to all persons of such adverse claim,
citing the cases of Villasor vs. Camon,10 Levin vs. Bass 11 and Director of Lands vs. Reyes. 12
As regard TRB, the Court of Appeals said that the bank was in bad faith when it sold the
property knowing that it was under the litigation and without informing the buyer of that fact.
On April 26, 1994, TRB filed with this Court a petition for review to set aside the CA decision,
docketed herein as G.R. No. 114299, invoking the following grounds:
I.
THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
SERIOUS ERROR OF LAW IN PROMULGATING THE DISPUTED DECISION AND THEREBY
DECIDED A QUESTION OF SUBSTANCE WHOLLY CONTRARY TO SETTLED

JURISPRUDENCE AND TOTALLY NOT IN ACCORD WITH APPLICABLE DECISION OF THIS

HONORABLE SUPREME COURT.

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING

THAT PETITIONERS ARE GUILTY OF LACHES.

II.

THE RESPONDENT HONORABLE COURT OF APPEALS HAS COMMITTED SO GRAVE AND

SERIOUS ERRORS OF LAW IN SANCTIONING A DEPARTURE FROM THE USUAL AND
ACCEPTED COURSE OF JUDICIAL PROCEEDING AS TO CALL FOR THE EXERCISE OF
THE POWER OF BY THIS HONORABLE SUPREME COURT.

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING

THAT THERE IS NO DISTINCTION IN THE REGISTRATION OF VOLUNTARY
INSTRUMENTS VIS-A-VIS INVOLUNTARY INSTRUMENTS.

a) The public respondent has plainly and manifestly acted whimsically, arbitrarily, capriciously,
with grave abuse of discretion, in excess of jurisdiction tantamount to lack of jurisdiction.
xxx xxx xxx
b) The public respondent erred in not finding that it was not the fault of petitioner when the notice
of lis pendens was not carried over to its new title.
xxx xxx xxx
c) The public respondent erred in not finding that PD No. 1271 had legally caused the
invalidation of the Capay's property and the subsequent validation of TRB's title over the same
property was effective even as against the Capays. 13
Meanwhile, the non-bank respondents moved for a reconsideration of the Court of Appeals'
decision. Convinced of the movants' arguments, the Court of Appeals in a Resolution
promulgated on August 10, 1994 granted the motion for reconsideration and dismissed the
complaint as against them. The dispositive portion of the resolution states:
ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the motion for
reconsideration, the same is hereby GRANTED. Consequently, the decision of this Court,
promulgated on February 24, 1994, is hereby RECONSIDERED. The complaint filed against
defendants-appellants with the court a quo is hereby ordered DISMISSED, and the certificate of
titles originally issued to them in their individual names are hereby ordered restored and duly
respected. We make no pronouncement as to costs.
SO ORDERED. 14
The Capays thus filed with this Court a petition for review, docketed as G.R. No. 118862 to set
aside the resolution of the Court of Appeals raising the following errors:
I
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING
THAT TUAZON VS. REYES, 48 PHIL. 814 AND RIVERA VS. MORAN, 48 PHIL. 836 ARE NOT
APPLICABLE HEREOF, WHILE PINO VS. COURT OF APPEALS, 198 SCRA 436, IS
APPLICABLE.
II
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING
THAT ATUN VS. MUNOZ, 97 PHIL. 762 AND LAROZA VS. GUIA, 134 SCRA 34, ARE NOT
APPLICABLE.
III
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING
THAT LEVIN VS. BASS, 91 PHIL. 419 VILLASOR VS. CAMON, 89 PHIL. 404 AND DIRECTOR
OF LANDS VS. REYES, 68 SCRA 73, ARE NOT APPLICABLE HEREOF.
IV

VI
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING
THAT RESPONDENTS WHO ARE LAWYERS, RESPONSIBLE CITIZENS AND WELLRESPECTED RESIDENTS IN THE COMMUNITY, ARE EXEMPTED FROM THE EFFECTS OF
THE CONSTRUCTIVE NOTICE ARISING FROM REGISTRATION.
VII
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF WITH REGARDS TO
TRADERS ROYAL BANK, AFTER THE LATTER HAS PERFECTED ITS APPEAL TO THE
SUPREME COURT.
VIII
THE COURT OF APPEALS PALPABLY ERRED IN NOT RULING ON THE COUNTERASSIGNMENT OF ERROR THAT:
B) THE LOWER COURT ERRED IN NOT HOLDING THAT DEFENDANTS ARE BOUND BY
THE DECISION IN CIVIL CASE NO. Q-10453.
Subsequently, G.R. No. 118862 was consolidated with G.R No. 114299, pursuant to this Court's
Resolution dated July 3, 1996. 15
The consolidated cases primarily involve two issues: (1) who, as between the Capays and the
non-bank respondents, has a better right to the disputed property, and (2) whether or not TRB is
liable to the Capays for damages.
On the first issue, we rule for the non-bank respondents.
I
First, when TRB purchased the property at the foreclosure sale, the notice of lis pendens that
the Capays caused to be annotated on their certificate of title was not carried to the new one
issued to TRB. Neither did the certificate of title of Emelita Santiago, who purchased the property
from TRB, contain any such notice. When Santiago caused the property to be divided, six (6)
new certificates of title were issued, none of which contained any notice of lis pendens. Santiago
then sold the lots to Marcial Alcantara and his co-owners who next sold each of these to the
non-bank respondents. The non-bank respondents, therefore, could not have been aware that
the property in question was the subject of litigation when they acquired their respective portions
of said property. There was nothing in the certificates of title or respective predecessors-ininterest that could have aroused their suspicion. The non-bank respondents had a right to rely
on what appeared on the face of the title of their respective predecessors-in-interest, and were
not bound to go beyond the same. To hold otherwise would defeat one of the principal objects of
the Torrens system of land registration, that is, to facilitate transactions involving lands.
The main purpose of the Torrens system is to avoid possible conflicts of title to real estate and to
facilitate transactions relative thereto by giving the public the right to rely upon the face of a
Torrens certificate of title and to dispense with the need of inquiring further, except when the
party concerned has actual knowledge of facts and circumstances that should impel a
reasonably cautious man to make such further inquiry. Where innocent third persons, relying on

the correctness of the certificate of title thus issued, acquire rights over the property, the court
cannot disregard such rights and order the total cancellation of the certificate. The effect of such
an outright cancellation would be to impair public confidence in the certificate of title, for
everyone dealing with property registered under the Torrens system would have to inquire in
every instance as to whether the title has been regularly or irregularly issued by the court. Every
person dealing with registered land may safely rely on the correctness of the certificate of title
issued therefor and the law will in no way oblige him to go beyond the certificate to determine
the condition of the property.
The Torrens system was adopted in this country because it was believed to be the most effective
measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim
of ownership is established and recognized. If a person purchases a piece of land on the
assurance that the seller's title thereto is valid, he should not run the risk of being told later that
his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is
that if this were permitted, public confidence in the system would be eroded and land
transactions would have to be attended by complicated and not necessarily conclusive
investigations and proof of ownership. The further consequence would be that land conflicts
could be even more numerous and complex than they are now and possibly also more abrasive,
if not even violent. The Government, recognizing the worthy purposes of the Torrens system,
should be the first to accept the validity of titles issued thereunder once the conditions laid down
by the law are satisfied. 16
Second, the foregoing rule notwithstanding, the non-bank respondents nevertheless physically
inspected the properties and inquired from the register of Deeds to ascertain the absence of any
defect in the title of the property they were purchasing an exercise of diligence above that
required by law.

A We did because at the time we went there, Mr. Alcantara was there supervising the workers.
Q And who?
A Amado Cruz sir.
Q After you saw this property, what else did you do?
A My first concern then was am I buying a property with a clean title.
Q In regards to this concern of yours, did you find an answer to this concern of yours?
A At first; I asked Mr. Alcantara and I was answered by him.
Q What was his answer?
A That it was a property with a clean title, that he has shown me the mother title and it is a clean
title.
Q Aside from being informed that it is a property with a clean title, did you do anything to answer
your question?
A Yes, sit.
Q What did you do?
A Well, the first step I did was to go to the Land Registration Office.

Thus, respondent Aida Fernando Meeks, who bought Lot 5 for her son Dean, testified:

Q Are you referring to the City Hall of Baguio?

Q How did you come to live in Baguio City, particulary in Kim. 2.5 San Luis, Baguio City?

A Yes, the City Hall of Baguio.

A In one of my visits to my sister who has been residing here for twelve (12) years now, I got
interested in buying a property here.

Q And what did you do in the Registry of Deeds?

Q How did you come to know of this property at Asin Road where you now reside?
A My sister, Ruth Ann Valdez, sir.
Q When this particular property was bought by you, when was that?
A I do not remember the exact date, but it was in 1984, sir.
Q At the time when you went to see the place where you now reside, how did it look?

A We looked for the title, the original title, sir.

Q When you say we, who was your companion?
A Mr. Alcantara and my present husband, sir.
Q The three (3) of you?
A Yes, sir.
Q What title did you see there?

A This particular property that I bought was then a small one (1) room structure, it is a two (2)storey one (1) bedroom structure.

A We saw the title that was made up in favor of Amado Cruz, sir.

Q What kind of structure with regards to material?

Q And what was the result of your looking up for this title in the name of Amado Cruz?

A It is a semi-concrete structure, sir.

A We had to be reassured that it was a genuine one, so we asked Atty. Diomampo who heads
the office. We showed him a copy of that title and we were also reassured by him that anything
that was signed by him was as good as it is.

Q And aside from this two (2)-storey one (1)-room structure, how did the surrounding area look
like at the time you visited?
A There were stone walls from the road and there were stone walls in front of the property and
beside the property.
Q At the time you went to see the property with your agent, rather your sister Ruth Ann Valdez
did you come to know the owner?

Q Did this Atty. Diomampo reassure you that the title was good?
A He did.
Q After your conversation with the Register of Deeds, what did you do?
A The second step we did was to confer with our lawyer, a friend from RCBC Binondo, Manila
this is Atty. Nelson Waje.

Q What is your purpose in going to this lawyer?

A We wanted an assurance that we were getting a valid title just in case we think of buying the
property.

season and it was muddy, we fell on our way going to the property and walked to have an ocular
inspection and physical check on the area, sir.
xxx xxx xxx

Q What was the result of your conference with this lawyer?

Q What was the improvement, if any, that was in that parcel which you are going to purchase?

A He was absolutely certain that was a valid title.

A During that time, the riprap of the property is already there, the one-half of the riprap sir.

Q Mrs. Meeks, after looking at the place, going to the Register of Deeds, looking at the title and
seeing your lawyer friend, what decision did you finally make regarding the property?

Q Do you know who was making this improvement at the time that you went there?
A I would understand that it was Marcial Alcantara, sir.

A We wanted more reassurances, so we proceeded to Banaue, as advised by that same lawyer,

there is another office of the Bureau of Lands. I cannot recall the office but it has something to
do with registration of the old.

Q After you saw the place riprap and you were in the course of deciding to purchase this
property, what else did you do?

Q What is your purpose in going to this Office in Banaue?

A First, I have to consider that the property is clean.

A I wanted more reassuances that I was getting a valid title.

Q How did you go about determining whether the title of the property is clean?

Q What was the result of your visit to the Banaue Office?

A Considering that Marcial Alcantara is a real estate broker, I went to his office and checked the
documents he has regarding the property.

A We found the title of this property and there was reassurance that it was a clean title and we
saw the mother title under the Hilario family.

Q And what was the result of your checking as to whether the title of the property is clean?

Q Mrs. Meeks, when you say Banaue, what particular place is this Banaue?

A He showed me the copy of the title and it was clean, sir.

A It is in Banaue Street in Quezon City, sir.

Q Aside from going to Mr. Alcantara to check up the title of the property, what else did you do?

Q And when you saw the title to this property and the mother title, what was the result of your
investigation, the investigation that you made?

A Well, the next thing is I requested his wife to accompany me to the Bureau of Lands or rather
the Registry of Deeds, sir.

A We were reassured that we were purchasing a valid title, we had a genuine title.

Q What registry of Deeds are you referring to?

Q When you were able to determine that you had a valid, authentic or genuine title, what did you
do?

A The Registry of Deeds of Baguio City, sir.

A That is when I finally thought of purchasing the property. 17

Telesforo Alfelor II, the purchaser of Lot 4, narrated going through a similar routine:
Q How did you come to know of this place as Asin Road where you are presently residing?

Q And were you able to see the Register of Deeds regarding what you would like to know?
A Yes, and we were given a certification regarding this particular area that it was clean, sir.
Q What Certification are you referring to?
A It is a Certification duly signed by the employee of the Registry of Deeds Adelina Tabangin, sir.

A It was actually through Mrs. Flory Recto who is presently the Branch Manager of CocoBank.
She informed my wife that there is a property for sale at Asin Road, and she was the one who
introduced to us Mr. Alcantara, sir.

Q Do you have a copy of that Certification?

Q When you were informed by Mrs. Recto and when you met with Mr. Alcantara, did you see the
property that was being offered for sale?

The testimonies of Honorato Santos 19 and Josefina Pe 20 were to the same effect.

A Yes, sir.

The non-bank respondent predecessor-in-interest, Marcial Alcantara, was less thorough:

Q When did you specifically see the property, if you can recall?

Q And will you give a brief description of what you do?

A I would say it is around the third quarter of 1983, sir.

A I normally acquire land, quite big tract of land and subdivide it into smaller lots and sold it to
some interested parties.

Q When you went to see the place, could you please describe what you saw at that time?
A When we went there the area is still being developed by Mr. Alcantara. As a matter of fact the
road leading to the property is still not passable considering that during that time it was rainy

A Yes, I have, sir. 18

Q Specifically, Mr. Alcantara will you please inform the Court in what place in Baguio have you
acquired and subdivided and sold lots?
A Dominican Hill, Leonila Hill, Cristal Cave and Asin Road, sir.

Q You mentioned Asin Road, what particular place in Asin Road are you referring?

Q What is your purpose in investigating it with the Register of Deeds?

A That property I bought from Emelita Santiago, sir.

A To see if the paper in clean and there are no encumbrances, sir.

Q When you say you bought it from Emelita Santiago, how did you come to know that Emelita
Santiago is disposing of the property?

Q To whom did you talk?

A Because of the father, he is the one who offered me the property, sir, Armando Gabriel.

A To Atty. Ernesto Diomampo, sir.

Q Is he also a resident of Baguio?

Q And when you went to the Registry of Deeds to investigate and check, did you have occasion
to talk with Atty. Diomampo?

A He is from Buyagan, La Trinidad sir,

A Yes, sir.

Q How did you come to know of this Armando Gabriel wanting to sell a property in Asin?

Q And what was the result of your talk with Atty. Diomampo?

A He approached me in the house, sir. He has acquired a title from the Traders Royal Bank.

A The papers are clean except to the annotation at the back with the road right of way, sir.

Q Can you inform the Honorable Court when you had this conversation with Armando Gabriel on
the sale of the property at Asin Road?

Q After making this investigation with the Register of Deeds and talking with Atty. Diomampo,
what else transpired?

A Later part of March, 1983, sir.

A We bought the property, sir.

Q Now, when this Armando Gabriel informed you that he wants his property to be sold, what did
you do?

Q After purchasing the property from Emelita Santiago, could you please tell the Honorable
Court what you did with that deed of sale?

A I went to the place with the agent, sir.

A We registered it with the Register of Deeds for the Certificate of Title because at that time
when we bought the property, Emelita Santiago had it subdivided into six (6) lots, sir.

Q When you say you went to the place with the agent, what place?
A Kilometer 2, Asin Road sir.

Q Is it our understanding that prior to your purchase the property was subdivided into six (6)
parcels?

Q And when you went there to see the place, did you actually go there to see the place?

A Yes, sir.

A By walking, I parked my car a kilometer away, sir.

Q Could you please inform the Honorable Court if you have any buyers in the subdivision of this
property prior to your purchase?

Q Is it my understanding that when you went to see the property there were no roads?
A None, sir.
xxx xxx xxx
Q Mr. Alcantara, when you went to see this place at Asin Road last week of March, 1983, will
you please briefly describe how this place looked like at that time?
A The place was mountainous, grassy, there were cogon trees, some of the roads were eroding
already, so we cannot possibly enter the property, sir.
Q At the time you entered the place, was there any visible sign of claim by anyone?
A None, sir.
Q In terms of fence in the area?
A There is no such, sir.
xxx xxx xxx
Q Aside from looking or going to the property, what else did you do to this property prior to your
purchase?
A I investigated it with the Register of Deeds, sir.

A Yes, I have.
Q This subdivision of this property, to what office was it brought for action?
A Bureau of Lands, San Fernando, La Union, sir.
Q Now, Mr. Alcantara, at the time that you had this property subdivided by the owner, could you
please inform the Court if there was any claim by any other party opposing the subdivision or
claiming the property?
A None, sir.
Q When the Deed of Sale was executed and you said that you presented it to the Register of
Deeds and after the subdivision already, what action did the Register of Deeds have regarding
the matter?
A They approved it and registered it already in six (6) titles, sir.
Q In whose names?
A One (1) title under my name, Amado Cruz and Dr. Sanchez, sir.
Q Initially, Mr. Alcantara, you said that you are the sole purchaser of this entire area of One
Thousand Five Hundred Ninety One (1,591) Square Meters. Now, you are informing this

Honorable Court that one Amado Cruz and one Dr. Sanchez were also issued two (2) titles.
Could you explain how these titles came into their possession?
A Actually, two (2) are our co-owners, sir.
Q So, is it our understanding that the Deed of Sale from Emelita Santiago is in favor of these two
(2) Atty. Cruz and Dr. Sanchez?
A Yes, sir. 21
Third, between two innocent persons, the one who made it possible for the wrong to be done
should be the one to bear the resulting loss. 22 The Capays filed the notice of lis pendens way
back on March 17, 1967 but the same was not TRB's title. The Capays and their counsel Atty.
Ramon A. Gonzales knew in 1968 of the extra-judicial foreclosure sale of the property to TRB
and the consolidation of title in the bank's name following the lapse of the one-year period of
redemption. But in the next fifteen (15) years or so, they did not bother to find out the status of
their title or whether the liens noted on the original certificate of title were still existing
considering that the property had already been foreclosed. In the meantime, the subject property
had undergone a series of transfers to buyers in good and for value. It was not until after the
land was subdivided and developed with the buyers building their houses on the other lots when
the Capays suddenly appeared and questioned the occupants' titles. At the very least, the
Capays are guilty of laches. Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due diligence could
nor should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting presumption that the party entitled to it either has abandoned it or
declined to assert it. 23
Verily, the principle on prescription of actions is designed to cover situations such as the case at
bar, where there have been a series of transfers to innocent purchasers for value. To set aside
these transactions only to accommodate a party who has slept on his rights is anathema to good
order.
Independently of the principle of prescription of actions working against petitioners, the doctrine
of laches may further be counted against them, which latter tenet finds application even to
imprescriptible
actions. . . . 24
In De La Calzada-Cierras vs. Court of Appeals, 25 we held:
While it is true that under the law it is the act of registration of the deed of conveyance that
serves as the operative act to convey the land registered under the Torrens System (Davao
Grains, Inc. vs. Intermediate Appellate Court, 171 SCRA 612), the petitioners cannot invoke said
dictum because their action to recover Lot 4362 is barred by the equitable doctrine of laches.
The act of registering the conveyance to Rosendo was constructive notice to the whole world of
the fact of such conveyance (Heirs of Maria Marasigan vs. Intermediate Appellate Court, 152
SCRA 253).
But the petitioners' complaint to recover the title and possession of Lot 4362 was filed only on
July 21, 1981, twelve (12) years after the registration of the sale to Rosendo. The petitioners
failed and neglected for an unreasonably long time to assert their right, if any, to the property in
Rosendo's possession.
Being guilty of laches, the Capays cannot invoke the ruling in Villasor vs. Camon Levin
Bass and Director of Lands vs. Reyes 26 to the effect that entry of the notice of lis pendens in the
day book (primary entry book) is sufficient to constitute registration and such entry is notice to all
persons of such adverse claim. Certainly, it is most iniquitous for the Capays who, after sleeping
on their rights for fifteen years to assert ownership over the property that has undergone several
transfers made in good faith and for value and already subdivided into several lots with
improvements introduced thereon by their owners.

In the same vein, the cases cited by the Capays in their first two (2) assignment of errors, do not
help them any, as the transferees in said cases were not innocent purchasers for value and in
good
faith.
In Tuazon
vs.
Reyes
and
Siochi, 27 where the land involved therein was sold by Petronilo David to Vicente Tuazon, it was
with a deed containing the recital that the land was in dispute between the vendor and Roberto
Siochi. Tuazon, who was merely subrogated to the rights of the vendor was aware of the dispute
and, furthermore, David did not warrant the title to the same. In Rivera vs. Moran, 28 Rivera
acquired interest in the land before the final decree was entered in the cadastral proceedings.
Rivera, the transferee, was aware of the pending litigation and, consequently, could not have
been considered a purchaser in good faith. Similarly, in Atun, et al. vs. Nuez, et
al. 29 and Laroza vs. Guia, 30the buyers of the property at the time of their acquisition knew of the
existence of the notice of lis pendens. In contrast to the cited cases, the non-bank respondents
in the case at bar acquired their respective portions of the land with clean title from their
predecessors-in-interest.
II
We come now to TRB's liability towards the Capays.
The Bank unconvincingly tries to wash its hands off the present controversy, and attempts to
shift the blame on the Capays, thus:
xxx xxx xxx
23. The petitioner Bank, during all the time that it was holding the title for over fourteen (14)
years that there was no legal impediment for it to sell said property, Central Bank regulations
require that real properties of banks should not he held for more than five (5) years:
24. The fault of the Register of Deeds in not carrying over the Notice of Lis Pendens to the new
title of the petitioner Bank should not be absorbed by the latter considering that in all good faith,
it was not aware of the existence of said annotation during all the time that said title was in its
possession for almost fourteen (14) years before the property was sold to Emelita G.
Santiago. . . . 31
TRB concludes that "(t)he inaction and negligence of private respondents allowing ownership to
pass for almost 15 years constitute prescription of action and/or laches." 32
Sec. 25 of the General Banking Act, 33 provides that no bank "shall hold the possession of any
real estate under mortgage or trust, deed, or the title and possession of any real estate
purchased to secure any debt due to it, for a longer period than five years." TRB, however,
admits hoding on to the foreclosed property for twelve (12) years after consolidating title in its
name. The bank is, therefore, estopped from involving banking laws and regulations to justify its
belated disposition of the property. It cannot be allowed to hide behind the law which it itself
violated.
TRB cannot feign ignorance of the existence of the lis pendens because when the property was
foreclosed by it, the notice of lis pendens was annotated on the title. But when TCT No. T-6595
in the name of the Capay spouses was cancelled after the foreclosure, TCT No. T-16272 which
was issued in place thereof in the name of TRB did not carry over the notice of lis pendens.
We do not find the Capays guilty of "inaction and negligence" as against TRB. It may be recalled
that upon the commencement of foreclosure proceedings by TRB, the Capays filed an action for
prohibition on September 22, 1966 against the TRB before the CFI to stop the foreclosure sale.
Failing in that attempt, the Capays filed a supplemental complaint for the recovery of the
property. The case reached this Court. Prescription or laches could not have worked against the
Capays because they had persistently pursued their suit against TRB to recover their property.
On the other hand, it is difficult to believe TRB's assertion that after holding on to the property for
more than ten (10) years, it suddenly realized that it was acting in violation of the General Bank
Act. What is apparent is that TRB took advantage of the absence of the notice of lis pendens at

the back of their certificate of title and sold the property to an unwary purchaser. This
notwithstanding the adverse decision of the trial court and the pendency of its appeal. TRB,
whose timing indeed smacks of bad faith, thus transferred caused the property without the lis
pendens annotated on its title to put it beyond the Capays' reach. Clearly, the bank acted in a
manner contrary to morals, good customs and public policy and should be held liable for
damages. 34

Issues having been joined, the parties later entered into a stipulation of facts before the trial
court, reading in full as follows:

Considering however, that the mortgage in favor of TRB had been declared null and void for
want of consideration and, consequently, the foreclosure proceedings did not have a valid effect,
the Capays would ordinarily be entitled to the recovery of their property. Nevertheless, this
remedy is not now available to the Capays inasmuch as title to said property has passed into the
hands of third parties who acquired the same in good faith and for value. Such being the case,
TRB is duty bound to pay the Capays the fair market value of the property at the time it was sold
to Emelita Santiago, the transferee of TRB.

2. That plaintiffs Fortunato Bollozos and Andrea Bollozos are the only surviving children of the
late Paulino Bollozos while the rest of the above-named plaintiffs are the grandchildren of said
Paulino Bollozos,

WHEREFORE, the Decision of the Court of Appeals dated Frebruary 24, 1994 in CA-G.R. CV
No. 33920, as modified by its Resolution dated August 10, 1994 is hereby AFFIRMED. In
addition, Traders Royal Bank is ordered to pay the Capays the fair market value of the property
at the time it was sold to Emelita Santiago.
This Decision is without prejudice to whatever criminal, civil or administrative action against the
Register of Deeds and or his assistants that may be taken by the party or parties prejudiced by
the failure of the former to carry over the notice of lis pendens to the certificate of title in the
name of TRB.
SO ORDERED.

G.R. No. L-29442 November 11, 1987

FORTUNATO BOLLOZOS, ANDREA BOLLOZOS VDA. DE RAPANOT PABLO B. CALAM,
EPIFANIA B. BEVERA, SERGIO B. CALAM, GUALBERTO B. CALAM, IGNACIO B. CALAM,
JOSE
B.
CALAM,
JR.
and
CAROLINA
B.
CALAM, plaintiffs-appellees,
vs.
YU TIENG SU, alias SISO YU, defendant-appellant.

CRUZ, J.:
The original protagonists in this controversy have long since passed away into "the tongueless
silence of the dreamless dust" and are now but mute witnesses to this litigation. We can now go
only by the musty records that will take us back to more than half a century ago, before the
period of the Commonwealth.
This case was formally commenced on January 20, 1968, with the filing of a complaint for the
recovery of a 1.2 hectare parcel of land and accounting for its use from defendant Yu, the herein
appellant. The plaintiffs claimed that the said land had been delivered to him only for
administration so he could apply the produce thereof to the indebtedness of Paulino Bollozos,
their predecessor-in-interest. It was alleged that Yu had refused to return the land despite
demand and to make the required accounting although the debt had long been paid. 1
In his answer, the defendant averred that he had acquired ownership of the land in question by
virtue of two documents executed in his favor by Paulino Bollozos, to wit, a deed of sale with
right of repurchase dated September 1, 1934, and a deed of absolute sale dated September 21,
1936. He therefore had no obligation to return it. Additionally, Yu claimed that the suit was barred
by prescription, the complaint having been filed only after all of 26 years. 2

1. That both parties hereby agree on the Identity of the parcel of land in litigation as described in
paragraph II of the amended complaint, which parcel of land is covered by OCT No. 5033 in the
name of Paulino Bollozos;

3. That sometime on September 1, 1934, the late Paulino Bollozos executed a document entitled
"Escritura de Compra y Venta Con Pacto de Retro," the original of which is hereto attached as
Annex A to form part hereof and another document was executed by the late Paulino Bollozos
entitled "A Definite and Absolute Purchase and Sale" dated September 21, 1936, the original
copy of which is hereto attached to form an integral part of this complete stipulation of facts
4. That the parties agree to submit the entitled case for decision on the basis of the following
issue or issues:
(a) Whether a valid conveyance of ownership was made of the parcel of land in litigation on
September 1, 1934 as appearing in Annex A, entitled "Escritura de Compra y Venta Con Pacto
de Retro," or on September 21, 1936 as appearing in Annex B, entitled "A Definite and Absolute
Purchase and Sale" of the parcel of land in litigation, and for the Honorable Court to determine
the legality or nullity of the above-mentioned documents. 3
On the basis of this agreement and of the memoranda filed subsequently by the parties, the
lower court, * without receiving further evidence, rendered judgment in favor of the plaintiffs. 4 It
held, first, that the deed of sale with pacto de retro executed on September 1, 1934, was in
reality an equitable mortgage and did not transfer ownership of the land to the defendant; and
second, that the subsequent sale executed in 1936 was null and void ab initio because by that
time the transfer of agricultural lands to aliens was already prohibited by the Commonwealth
Constitution, which became effective on November 15, 1935. Yu was a Chinese national.
The above rulings are the subject of this appeal, ** which we find meritorious. We shall reverse.
It is important to note at the outset that there is nothing in the record to show that the disputed
property had merely been entrusted to Yu for administration in connection with Paulino Bollozos'
indebtedness to him, as claimed by the plaintiff. Neither is there any evidence of such
indebtedness. This allegation, which was the very basis of the complaint, was not among those
admitted in the stipulation of facts and indeed had been categorically denied in the answer. It
thus remained a bare averment without any actual or presumptive support.
It should also be noted that, by contrast, the defendant, to substantiate his answer, produced the
two above-cited documents Annexes "A" and "B", which clearly indicate the intention of the
parties regarding the ownership and disposition of the land in question. These documents are
the best and, as it happens, the only evidence adduced of such intention.
Annex "A" reads as follows:
ESCRITURA
CON PACTO DE RETRO

DE

COMPRA

VENTA

Nosotros, PAULINO BOLLOZOS, de 71 aos de edad y FAUSTINA LILOC, de 58 aos de edad,

marido y mujer respectivamente, filipinos y vecinos y residentes del barrio de Bonbon, Municipio
de Catarman Provincia de Misamis Oriental, Islas Filipinas, por la presente hacemos constar
que consideracion a la suma de SEISCIENTOS TREINTA Y SEIS PESOS (P636.00) en moneda
filipina que nos ha pagado y hemos recibido a nuestra entera satisfaccion del SR. YU TIENG
SU, de 34 aos de edad, chino, casado de la SRA SIA PUTE, de 29 aos de edad, china y
residente de este Municipio de Catarman Provincia de Misamis Oriental, Islas Filipinas,

VENDEMOS, CEDEMOS ENTREGAMOS y TRASPASAMOS al referido SR. YU TIENG SU sus

herederos y causahabientes una parcela de terreno con todas sus mejoras existentes situada
en el distrito de Quilambon, barrio de Bonbon, Municipio de Catarman Provincia de Misamis
Oriental, Islas Filipinas bajo el numero del Lote Cadastral de este Municipio Catarman Misamis
Oriental, Caso No. 9m y cuya descripcion tecnica es como sigue:
(Technical Description)
Hacemos constar tambien que queda pacto y convenido con el referrido SR. YU TIENG SU, que
si nosotros devolvieramos o mandamos devolver dentro del termino de SIETE (7) ANOS
contados desde esta fecha la suma de SEISCIENTOS TREINTA Y SEIS PESOS (P636.00) en
moneda filipina, y le abonaremos ademas los gastos que ocasione el presente contrato, nos
otorgaran el comprador o sus representantes escritura de retroventa pero si transcurre dicho
plazo sin haberse utilizado el derecho de redencion, adquirira la presente el character de
absolutamente consumada, y entretanto solo podra el comprador disponer la finca con las
limitaciones prescritas en la Ley Hipotecaria
En testimiento de rado lo cual firmamos la presente en este Municipio de Catarman Provincia de
Misamis Oriental hoy 1, o-de Septiembre, 1934, A.D.
(Sgd.) PAULINO BOLLOZOS Y
(Sgd.) FAUSTINA LILOC,
Firmadas en presencia de
(Sgd.) JOSE LIM PATUNGAN y
(Sgd.) EUFROSINO LIMBACO
The second instrument, Annex "B", declared the following:
DEFINITE AND ABSOLUTE PURCHASE AND SALE
That I, PAULINO BOLLOZOS, 72 years of age, Filipino married to Faustina Liloc, 60 years of
age, and resident of the barrio of Bonbon, Municipality of Catarman, Province of Oriental
Misamis, P.I. do hereby declare and say:
1st. That I am the lawful owner of one parcel of land together with all existing improvements
thereon, located in the sitio of Kilambon, barrio of Bonbon, Municipality of Catarman, Province of
Oriental Misamis, P.I., particularly described as follows:
(Technical Description)
2nd. That the said parcel of land together with all existing improvements thereon is registered in
my name in the Office of the Register of Deeds of the Province of Oriental Misamis, as
evidenced by the ORIGINAL CERTIFICATE OF TITLE number FIVE THOUSAND THIRTY
THREE (5033).
3rd. That the said parcel of land, together with all existing improvements thereon was sold by me
to Mr. YU TIENG SU, married to Sia Pute on September 1, 1934 for the sum of SIX HUNDRED
THIRTY SIX (P636.00) under the instrument of purchase with right or repurchase (Compra venta
con pacto de retro) and said document is ratified before Notary Public Mr. Eufrosino Limbaco, of
Mambajao, Misamis Oriental, on the 1st day of September 1934, Not. Reg. No. 149-Page No.
97-Book No. 8-Series of 1934.
4th. That by these presents I do hereby declare and say that I will forever renounce and
repudiate my rights and privileges to repurchase the said parcel of land together with all its
existing improvements thereon and for and in consideration of an additional sum TWO
HUNDRED NINETY-FIVE PESOS (P295.00), Philippine Currency to me in hand paid and the

receipt whereof is hereby acknowledged by Mr. YU TIENG SU, 36 years of age, Chinese,
married to Sia Pute, 31 years of age, Chinese and resident of this Municipality of Catarman
Misamis Oriental, P.I., by these presents I do hereby sell, transfer and forever convey a deliver
unto said Mr. YU TIENG SU, his heirs, executors, administrators and assigns that parcel of land
together with all its existing improvements thereon, particularly described above (Lot No. 473).
Original Certificate of Title number Five Thousand Thirty-three.
5th. Lastly, I do hereby declare and say that I will forever warrant and defend unto said Mr. YU
TIENG SU, his heirs, executors, administrator and assigns all lawful claims of all persons
whomsoever of his right of ownership of the said parcel of land together with its existing
improvements thereon described above.
IN WITNESSETH WHEREOF, I have hereunto signed my name in this Municipality of Catarman
Province of Misamis Oriental, P. I., on this 21 st day of September 1936.
(Sgd.) PAULINO BOLLOZOS
Signed in the presence of:
(Sgd.) JOSE LIM PATUNGAN and
(Sgd.) JOSE L. RIVERA
It is clear from the first document that Paulino Bollozos actually sold the land in question to Yu
for the sum of P636.00, subject only to the former's right to repurchase it within a period of
seven years. There is nothing in this instrument suggesting a different arrangement such as that
alleged by the plaintiffs-appellees in their complaint, nor have they submitted any evidence in
proof of such arrangement.
The intention clearly embodied in Annex "A" was affirmed in the second transaction between the
same parties as reduced to writing in Annex "B", denominated as "A" Definite and Absolute
Purchase and Sale." Concluded two years later, it specifically referred to the first sale made in
1934 by virtue of which, as Paulino Bollozos declared, the land in question and its improvements
were "sold by me to Mr. Yu Tieng Su" for the agreed consideration of P636.00. He further stated
in Annex "B" that "by these presents I do hereby declare and say that I will forever renounce and
repudiate my right and privilege to repurchase" the said property as reserved by him in the first
instrument. For such renunciation, Bollozos acknowledged receipt of an additional sum of
P295.00, thus increasing the total purchase price of the land to P931.00.
The Court holds that the first transaction was a valid sale with right of repurchase and effectively
transferred ownership of the land in dispute to the defendant-appellant. All the elements of a
valid contract were present, and in any case the plaintiffs-appellees themselves have stipulated
on its authenticity. As it was concluded in 1934, the prohibition against the acquisition of
agricultural lands by aliens was not yet applicable, having become effective only from November
15, 1935, under the Commonwealth Constitution. Moreover, the title acquired by Yu was
recognized in the said Constitution as a vested right that could no longer be disturbed under the
new provisions of that charter reserving ownership of such lands to Filipino citizens. 5
The plaintiffs-appellees err in suggesting that the first transaction, being conditional, did not
effectively transfer the ownership of the land to the vendee. It did, certainly, subject only to the
right of the vendor to redeem it within the period specified. As we said in an earlier case:
In the deed of pacto de retro sale executed by Ignacio Reyes in favor of Lim Kiam on May 30,
1932, covering Lot 9203, the period of repurchase was not fixed. The Court of Appeals correctly
held that in accordance with Article 1508 of the old Civil Code the right could be exercised within
four years from the date of execution of the conveyance - in this case up to May 30, 1936. The
fact, however, that on this date the Constitution was already in force did not affect the right
acquired by Lim Kiam. We have held in a number of cases decided under the provisions of the
old Civil Code that the nature of a sale with the right of repurchase is such that the ownership
over the thing sold is transferred to the vendee upon execution of the contract, subject only to

the resolutory condition that the vendor exercise his right, of repurchase within the period agreed
upon. Manalansan v. Manalang, L-13646, July 26, 1960; Almiranez v. Devera,
L-19496 February 27, 1965; Rosario v. Rosario, L-13018, December 29, 1960. 6
A sale with pacto de retro transfers the legal title to the vendee and this, in the absence of an
agreement to the contrary, carries with it the right of possession. In the case of Santos v. heirs of
Crisostomo and Tiongson (41 Phil. 342), this court, in discussing the nature of sale with pacto de
retro said: ... It is our opinion, however, that the insertion of a stipulation for repurchase by the
vendor in a contract of sale does not necessarily create any right inconsistent with the right of
ownership in the purchaser. Such a stipulation is in the nature of an option, and the possible
exercise of it rests upon contingency. ... 7
To be sure, Paulino Bollozos could have repurchased the property within seven years pursuant
to the first contract. However, he did not choose to do so and in fact "renounced and repudiated"
this right two years later in the second contract. It is noted that this contract also purported to
convey the same property to Yu but this was merely an affirmation or reiteration of the parties'
intention in the first transaction. It was not really necessary to repeat the sale because the first
contract had already been perfected and consummated. Indeed, the sale could not have been
made for the first time then for it would have been illegal under the provisions of the new
Constitution that had come into force in 1935. Actually, the real purpose of the second contract
was to manifest Paulino Bollozo's waiver of his right to repurchase, for which he received the
additional sum of P295.00.
The plaintiffs-appellees make much of the admitted fact that the disputed property is still in the
name of Paulino Bollozos as so too are the tax declarations. This circumstance, it is argued,
proves that ownership of the land was retained by Bollozos and later transferred to his heirs,
besides being an indication as well that the first contract was really only an equitable mortgage
and not a deed of sale. The contention is that as long as the land had not yet been registered in
the name of the defendant-appellant, title hereto remained with Bollozos.
This is not correct. The first deed of sale took effect on September 1, 1934, and legally
transferred ownership of the land subject thereof from the vendor to Yu on the said date. Failure
to register the sale did not vitiate it or render it unenforceable. As we have held in several cases,
an unrecorded deed of sale is binding between the parties and their privies because actual
notice is equivalent to registration. The real purpose of registration being to give notice to third
persons, deed of sale that has not been registered does not lose its efficacy insofar as the
parties thereto and their heirs are concerned. 8
It is settled that registration is not a mode of acquiring ownership. Thus:
Registration does not confer ownership. It is not a mode of acquiring dominion, but only a means
of confirming the fact of its existence with notice to the world at large. 9
And with particular reference to problems such as the one at bar, we have ruled that:
Title and ownership over lands within the meaning and for the purposes of the constitutional
prohibition, dates back to the time of their purchase, not later. Any other ruling would be illegal
and unjust, and would operate to dispossess alien owners who had acquired their lands in good
faith before the prohibition was established, but either failed wholly to register them or registered
them only after the Constitution was adopted. 10
As for the finding of the trial court that the deed of sale with the right of repurchase was an
equitable mortgage, we hold it has no basis in fact and law. All that is invoked in its support is
that the land continued to be registered, and all the tax declarations thereon were made, in the
name of Paulino Bollozos. That may well be, but that circumstance would not change the nature
of the contract concluded in 1934. At best, it may demonstrate neglect on the part of the vendee,
who had a right to transfer the registration in his name, but that would not signify that Paulino
Bollozos retained or recovered ownership of the land he had already sold.

The defendant-appellant cites Article 1602 of the Civil Code and argues that none of the
indications mentioned therein of an equitable mortgage are present in this case. While we are
inclined to agree, it should be noted that the said article is not applicable because it was not
embodied in the old Civil Code which was in force in 1934. This is an innvocation in the present
Code. In any event, it is worth stressing that one of the indicia mentioned in the said article is
that the vendor not remains in possession of the property in question, which is riot the situation
here. The complaint, in fact, asks for recovery of possession of the land from defendant Yu.
In sum, we hold that the trial court erred in disregarding the sale with right of repurchase
concluded on September 1, 1934, and in considering it an equitable mortgage. The second
contract executed on September 21, 1936, could not have validly conveyed the land in question
to defendant Yu, who was an alien, as this was already prohibited by the Commonwealth
Constitution. Nevertheless, it was effective in affirming the earlier contract of September 1, 1934,
and, more importantly, in making it absolute with the renunciation by the vendor of his right to
repurchase the property. Accordingly, Yu should be recognized as the lawful owner of the land in
dispute, acquired by him by virtue of a legitimate contract of sale with pacto de retro which
became absolute when the vendor waived his right of repurchase.
The fact that the defendant in this case was an alien cannot be taken against him for he was not
disqualified from acquiring the land in question when the sale was concluded in 1934. It should
not deter us from ruling in his favor now.
This Court dispenses equal justice to the citizen and the alien and judges them on the merits of
their cause and not the color of their skin. Having admitted him into our territory, the State is
committed to the recognition of all the rights of the stranger in our midst save only where they
unduly clash with the higher interests of our own nation. There is no such collision here. On the
contrary, we see here an opportunity to prove, as we do now, that respect for the foreign guest is
ingrained in the law of the land and in the nature of our people.
WHEREFORE, the appealed decision is REVERSED. The complaint and the counterclaim in
Civil Case No. 66-C are DISMISSED, with costs against the plaintiffs-appellees. It is so ordered.
G.R. No. 130174

July 14, 2000

REPUBLIC
OF
THE
PHILIPPINES, petitioner,
vs.
COURT OF APPEALS AND TABANGAO REALTY, INC., represented by Rodolfo
Perez, respondents.
DECISION
PARDO, J.:
The case is an appeal 1 via certiorari from a decision of the Court of Appeals 2 affirming that of the
Regional Trial Court, Branch 07, Batangas City decreeing the registration under the Property
Registration Decree, P. D. No. 1529, of three (3) parcels of land situated in Tabangao, Batangas
City in favor of respondent corporation.3
The facts, as found by the Court of Appeals, are as follows:
"On January 8, 1991, Tabangao Realty, Inc. filed an application for Original Registration of Title
over three parcels of land, more particularly described as follows:
"Lot 9895 Plan Ap-4A-001136, containing an area of 4,596 square meters, situated in the
Barrio of Tabangao, City of Batangas;
"Lot 10155 Plan Ap-4A-001221, containing an area of 4, 031 square meters, situated in the
Barrio of Libjo, City of Batangas;

"Lot 10171 Plan Ap-4A-001157, containing an area of 8,224 square meters, situated in the
Barrio of Tabangao, City of Batangas.
"Applicant Tabangao Realty, Inc. alleged in its application that it acquired the above-mentioned
lots by purchase from its previous owners as evidenced by the corresponding Deeds of Sale;
that it is the owner of all adjoining lots; that it had been in actual possession of the lots since the
time it acquired the same from the previous owners up to the present; and that its possession
and occupation as owners including that of its predecessor-in-interest has been open, peaceful,
continuous, adverse to the whole world and in the concept of an owner.
"The applicant further alleged that the plant of the Liquefied Petroleum Gas (LPG) Company is
partly erected on the subject lots which improvements are owned by it (applicant). It also claims
that the subject lots are not subject of any lien or encumbrance; that no adverse interests exist
with respect to the subject lots; and that there are no military or forest reservation or any
pending litigation affecting said subject lots.
"Should the property registration decree invoked not be allowed, the applicant in the alternative
applied for the benefits under CA No. 141 as amended and thus alleged that together with its
predecessors-in-interest it had been in open, continuous, public, peaceful and adverse
possession of the subject lots for more than 30 years. It also declared that the lots are not
tenanted nor subject of an agricultural leasehold relationship.
"Applicant Tabangao Realty, Inc. attached to its application its Articles of Incorporation, the
tracing cloth plan of the lots, blue print copies of said plan, technical descriptions of the lots,
Deeds of Sale, Assessment Certificate, Tax Declarations for the three lots and Tax Clearances.
"On August 12, 1991, the application was ordered archived by the Regional Trial Court for the
applicants failure to comply with the requirements called for in the Report dated February 22,
1994 by the Office of the Land Registration Authority. On June 2, 1994, the applicant filed a
motion to revive the application and to set the case for initial hearing. The motion was granted by
the Regional Trial Court on June 7, 1994 and initial hearing was set on September 1994.
"At the hearing, only the Assistant City Prosecutor appeared to oppose the application on behalf
of the Republic of the Philippines. Counsel for the applicant thereupon presented all the
necessary evidence to satisfy the jurisdictional requirements. Thereafter, upon motion of the
application, the Regional Trial Court issued an order of special default against the whole world
with the exception of the government. The court also issued an order designating and
authorizing Mr. Rodolfo G. Serrano, Legal Researcher of Regional Trial Court, Branch 7, to
receive evidence.
"At the reception of evidence, the applicant presented Romeo Geron, the Consultant and Project
Controller of applicant Tabangao Realty, Inc. Geron testified that he is a resident of Tabangao
and was a member of the Task Force responsible for negotiating with the numerous landowners
and the subsequent acquisition by sale of the properties of Tabangao Realty, Inc. in Tabangao
and Libjo, Batangas. He testified that the applicant-corporation was duly organized and
registered with the Securities and Exchange Commission and is authorized to acquire land by
purchase and develop, subdivide, sell, mortgage, exchange, lease and hold for investment or
otherwise, real estate of all kinds.
"He also testified that Lot 9895 was acquired by the applicant-corporation on March 31, 1980 by
virtue of a Deed of Absolute Sale executed in its favor by the previous owners; the spouses
Santiago and Cristina Dimaano (Exh. "L"); that Lot 10155 was acquired by applicant-corporation
by virtue of a Deed of Sale executed on April 25, 1980 in its favor by the former owner Mr.
Perpetuo Almario married to Felisa Magpantay who owned the lot since 1945 (Exh. "L-1"); and
that Lot 10171 was purchased by applicant-corporation on March 31, 1980 from Anita Clear de
Jesus who had been the owner of said lot since 1945 (Exh. "L-2").
"The witness presented the tax declarations for the three parcels of land and tax receipts
showing full payment of all taxes due. (Exh. "P, P-1, P-2" and "Q") He testified that there is no

pending litigation involving the subject properties or any adverse claims filed against the
applicants; that they are free from any liens or encumbrances; that there are no tenants or
agricultural leasehold contracts involving the subject properties; and that there are no mineral
deposits in said lots.
"Geron also testified that the properties are presently under Lease Contract with Shell Gas
Philippines for 25 years from 1981 up to 2006 as evidenced by a Lease Contract executed on
May 18, 1991 (Exh. "M").
"The applicants also presented Crecencio Marasigan. He is an employee at the Office of the
Register of Deeds of Batangas since June 1971. He testified that he has been a resident of
Barangay Malitan, Batangas City even before 1937 up to the present and that he knew the
applicant Tabangao Realty, Inc. and the areas surrounding the lots subject of the application. He
mentioned that he was the Chairman of the Task Force that was responsible for the negotiations
that were done with the previous owners of the subject lots, and was therefore personally aware
of the specific dealing regarding the lots subject of the application. He said that he knew the
previous owners since he started residing in Batangas; and that their possessions had been
open, public, peaceful, continuous, adverse and in the concept of owners.
"Marasigan corroborated the testimony of Romeo Geron with regard to the ownership,
possession and the status of the lots subject of the application.
"In opposition, the City Prosecutor of Batangas offered the testimonies of Rodolfo Fernandez of
the Bureau of Lands and Loida Maglinao of the Bureau of Forest Development.
"Rodolfo Fernandez testified that the three parcels of land subject of the application are not
covered by any kind of public land application or patent; that they are not within the reservation
area nor within the forest zone; that they are not reserved for any government purposes; and
that the entire areas are within the Alienable and Disposable Zone as Classified under Project
No. 13, Map No. 718 and certified on March 26, 1928. Fernandez presented the Investigation
Report made by the Bureau of Lands dated April 24, 1991 (Exh. "1" to "1-b").
"Loida Maglinao testified that the subject properties are within the alienable and disposable area
of the public domain and no forestry interest is adversely interposed by the Bureau of Forest
Development.
"On the basis of all the evidence presented, the Regional Trial Court rendered a decision on
March 31, 1995 granting the application for registration. It held:
"From the credible testimony and documentary evidence adduced establishing applicantcorporation that the latter and its predecessors-in-interest have been in open, public,
continuous, peaceful, uninterrupted and adverse possessions of the parcels of land applied for
up to the present, for the requisite period of time, under bona fide claim of ownership, and
considering, that no evidence has been presented by the government in support of its
Opposition, and even presented the favorable testimonies of Mr. Rodolfo Fernandez, of the
Bureau of Lands and Miss Loida Y. Maglinao, of the Bureau of Forest Development, both
CENRO, Batangas City Branch, Batangas City, supported by their respective official Reports,
the Court is convinced that the applicant-corporation Tabangao Realty Incorporated had
sufficiently established its rights to the grant of title over the three (3) parcels of land subject of
this case."
In due time, petitioner appealed the decision of the trial court to the Court of Appeals.4
On July 30, 1997, the Court of Appeals promulgated its decision affirming the appealed
decision.5
Hence, this appeal.6
The issue raised is whether respondent Tabangao Realty, Inc. has registerable title over three
(3) parcels of land situated in Tabangao, Batangas City applied for.

The Court of Appeals ruled that the applicant Tabangao Realty, Inc. is entitled to registration of
title over the three (3) parcels of land applied for. The ruling is erroneous.
An applicant seeking to establish ownership over land must conclusively show that he is the
owner thereof in fee simple,7 for the standing presumption is that all lands belong to the public
domain of the State, unless acquired from the Government either by purchase or by grant,
except lands possessed by an occupant and his predecessors 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 private property even before the Spanish conquest. 8
The land in question is admittedly public. The applicant has no title at all.1wphi1 Its claim of
acquisition of ownership is solely based on possession. In fact, the parcels of land applied for
were declared public land by decision of the Cadastral Court. 9 Such being the case, the
application for voluntary registration under P. D. No. 1529 10 is barred by the prior judgment of the
Cadastral Court. The land having been subjected to compulsory registration under the Cadastral
Act and declared public land can no longer be the subject of registration by voluntary application
under Presidential Decree No. 1529. The second application is barred by res-judicata.11 As
previously held, "[W]here the applicant possesses no title or ownership over the parcel of land,
he cannot acquire one under the Torrens System of registration."12
Nonetheless, applicant anchors its application for registration of title on the provisions of P. D.
No. 1529 or in the alternative Com. Act No. 141, Section 48 (b), as amended by Rep. Act No.
1942, which allows "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" to apply for judicial confirmation and
registration of title.13
However, the evidence is inconclusive that applicant and its predecessors in interest had been in
open, continuous, exclusive and notorious possession of the land in question, en concepto de
dueo, or a bona fideclaim of acquisition of ownership for at least thirty (30) years immediately
preceding the filing of the application,14or since June 12, 1945,15 or earlier,16 or since time
immemorial.17
Analyzing the evidence submitted, we note that the applicant failed to prove the fact of
possession by itself and its predecessors in interest for at least thirty (30) years before the filing
of the application.
Witness Romeo Geron, a consultant of applicant Tabangao Realty, Inc. testified that in the year
1945, he knew that the land designated as Lot 9895, with an area of 4,596 square meters was
owned by Santiago Dimaano, who sold the lot to applicant corporation on March 31, 1980 and
that the parcel of land designated as Lot 10155 with an area of 4,031 square meters was owned
by Perpetuo Almario way back in 1945, and that he possessed the lot up to the time he sold the
same to applicant corporation on April 25, 1980 because he was in charge of negotiation with
the numerous landowners for acquisition of their property by Tabangao Realty, Inc. 18 However, in
1945, witness Geron was only seven (7) years old, and obviously could not competently testify
on the ownership and possession of the subject land.
Applicant failed to prove specific acts showing the nature of its possession and that of its
predecessors in interest.19 "The applicant must present specific acts of ownership to substantiate
the claim and cannot just offer general statements which are mere conclusions of law than
factual evidence of possession."20 "Actual possession of land consists in the manifestation of
acts of dominion over it of such a nature as a party would naturally exercise over his own
property."21
The bare assertion of witnesses that the applicant of land had been in the open, adverse and
continuous possession of the property for over thirty (30) years is hardly "the well-nigh
incontrovertible" evidence required in cases of this nature. 22 In other words, facts constituting
possession must be duly established by competent evidence.

Consequently, the lower court gravely erred in granting the application.

WHEREFORE, the Court REVERSES the decision of the Court of Appeals, DENIES the
application for registration of title filed by applicant Tabangao Realty, Inc. and declares the
subject parcels of land to be public land belonging to the public domain.
No costs. SO ORDERED.
FIRST DIVISION

G.R. No. 100995 September 14, 1994

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS and DELFINA S. DOLOR, respondents.
The Solicitor General for petitioner.
Leopoldo C. Nagera, Jr. for private respondent.

BELLOSILLO, J.:
On 10 August 1988, private respondent Delfina S. Dolor filed an application before the Regional
Trial Court of Daet, Camarines Norte, for the confirmation and registration of her title to a 908square meter residential lot located at the interior of Dencio Cabanela Street, Poblacion, Daet,
Camarines Norte, described on Plan Ccn-05-000025 and covered by Tax Declaration
No. 005-0823.
On 25 November 1988, when the case was called for initial hearing, the Fiscal entered his
appearance on behalf of petitioner Republic of the Philippines. Respondent Delfina S. Dolor
moved that an order of general default be issued against the whole world except petitioner which
had filed an opposition. On the same date, the trial court issued an order, stating:
When this case was called for initial hearing today, only the Fiscal in behalf
of the Republic of the Philippines interposed an opposition to the
application.
Applicant, thru counsel, prayed for the issuance of an order of general
default against the whole world with the exception of the Republic of the
Philippines represented by the Fiscal.
It appearing from the record that the jurisdictional requirements have been
complied with and there being no private oppositor to the application, the
reception of evidence is hereby delegated to the Branch Clerk of Court who
is required to render a report within twenty (20) days from the date of

hearing which is hereby set on Dec. 20, 1988 at 9:00 o'clock in the
morning. 1
At the hearing on 20 December 1988, respondent Dolor's counsel marked as Exhibits "A" to "D,"
respectively, the Notice of Initial Hearing, the Certificate of Publication of the Notice of Initial
Hearing in the Official Gazette, the Affidavit of Publication of the Editor of the "Weekly Informer,"
and the Certification or Return of Posting by the Deputy Sheriff.
Satisfied that respondent Dolor had a registerable title over subject property the trial court in its
decision of 17 August 1989 confirmed her title thereto and ordered its registration as her
exclusive property. 2
Petitioner assailed the trial court's decision before the Court of Appeals on a purely jurisdictional
ground. Petitioner argued that it was incumbent upon respondent Dolor to show proof that on or
before the date of initial hearing on 25 November 1988, there had been compliance with the
requirements specified by Sec. 23 of P.D. 1529, otherwise known as The Property Registration
Decree, to wit:
Sec. 23. Notice of initial hearing, publication, etc. The court shall, within
five days from filing of the application, issue an order setting the date and
hour of the initial hearing which shall not be earlier than forty-five days nor
later than ninety days from the date of the order.
The public shall be given notice of the initial hearing of the application for
land registration by means of (1) publication; (2) mailing; and (3) posting.
1. By publication. Upon receipt of the order of the
court setting the time for initial hearing, the
Commissioner of Land Registration shall cause a
notice of initial hearing to be published once in the
Official Gazette and once in a newspaper of general
circulation in the Philippines; Provided, however, that
the publication in the Official Gazette shall be sufficient
to confer jurisdiction upon the court. Said notice shall
be addressed to all persons appearing to have an
interest in the land involved including the adjoining
owners so far as known, and "to all whom it may
concern." Said notice shall also require all persons
concerned to appear in court at a certain date and time
to show cause why the prayer of said application shall
not be granted . . . .
The records show that while the trial court stated that the jurisdictional requirements
were complied with on 25 November 1988, they were yet to be presented on 20
December 1988 before its Branch Clerk, the designated Commissioner.
In its decision dated 16 July 1991, the appellate court affirmed the decision of the trial court. 3 It
found petitioner's submission not only too formalistic but also contrary to the facts and the law
and in derogation of substantial justice, rationalizing thus

We find that the requirements of Sec. 23 of Presidential Decree

No. 1529 have been complied with in the instant case. The record shows
that the Notice of Initial Hearing set on November 25, 1988, issued by the
Administrator, National Land Titles and Deeds Registration Administration
(Exh. "A") had been published in the September 10, 1988 issue of the
"Weekly Informer" (Exh. "C") and in Volume 84, No. 42 of the Official
Gazette issue of October 17, 1988 (Exh. "B"), and posted in the prescribed
conspicuous places in the subject parcel of land the municipal building of
Daet, Camarines Norte by the Sheriff (Exh. "D"). The documents attesting to
the compliance with Sec. 23 of PD 1529 were attached to the record even
before the date of the initial hearing of the instant Land Registration Case
No. N-678 . . . .
The appellant claims that while the presiding judge of the trial court stated
that "the jurisdictional requirements have been complied with" on November
25, 1988, the jurisdictional requirements have yet to be presented on
December 20, 1988 before the Branch Clerk of Court, the designated
Commissioner. Hence, appellant argues, the Order of November 25, 1988
had no basis in fact and in law; there was no notice to interested persons
adjoining owners, and the whole world; and jurisdiction to hear and decide
the case has not yet been conferred with the court on November 25, 1988.
We cannot agree. The jurisdiction is not conferred by the marking of the
relevant documents as exhibits, but by the fact that all the requirements of
Sec. 23, PD 1529 had been complied with as shown by those documents
proving compliance therewith, identified later as Exhibits "A" to "D," which
were all attached to the records of the case even before November 25,
1988. The trial court is not precluded from taking cognizance of its own
record. Although in actual practice, it is incumbent upon the applicant's
counsel to mark those documents as exhibits at the initial hearing to prove
the jurisdictional facts, the omission of such markings by applicant's counsel
who might have been as yet unfamiliar with such practice would not deprive
the trial court of its jurisdiction to hear and proceed with the trial of the case,
for the simple reason that the jurisdictional requirements have been
complied with as shown by the documents that were already attached to the
record of the case and of which the trial court can take judicial notice. The
failure of the Fiscal as well as the Presiding Judge to have called the
attention of the counsel for the applicant to proceed with the marking of the
documents to prove the jurisdictional facts would not have deprived the trial
court of its jurisdiction to hear and decide the case. Neither would the
marking of those documents later after the initial hearing deprive the trial
court of its jurisdiction. 4
In this petition, while petitioner concedes that the jurisdiction to take cognizance of the case is
not conferred by the marking of the relevant documents as exhibits but, rather, by the fact that all
the jurisdictional requirements of law had been carried out, yet, it takes exception to the factual
finding that there was compliance with the jurisdictional requirements. As borne out by the
records, at the scheduled date of initial hearing on 25 November 1988 and even during the
actual hearing on 20 December 1988, the publication requirement in the Official Gazette was yet
to be complied with. Although the Notice of Initial Hearing was included for publication in the 17
October 1988 issue of the Official Gazette, specifically Vol. 84, No. 42, thereof, the same was
however released for publication only on 31 January 1989, as shown by the Certification of
Publication issued by the Director of the National Printing Office. 5 In other words, the actual

publication of the notice came out sixty-seven (67) days after the scheduled initial hearing and/or
forty-two (42) days after private respondent had rested her case. Petitioner concludes that the
late publication did not vest jurisdiction in the trial court.
In petitioner's brief filed before respondent Court of Appeals, we note that the issue of late
publication of the Notice of Initial Hearing in the Official Gazette was raised squarely. But for no
apparent reason, the issue was ignored in the questioned decision. Indeed, respondent court
could have easily resolved the issue in favor of petitioner supported as it was not only by
competent evidence but also by ample jurisprudence.
The primary legal principle against which the legality of all the proceedings conducted by the trial
court should be tested is jurisdiction. In order to ascertain whether a court has jurisdiction, the
provision of the law in point should be inquired into. 6 Section 23 of P.D. 1529 explicitly provides
that before the court can act on the application for land registration, the public shall be given
notice of the initial hearing thereof by means of publication, mailing, and posting. InDirector of
Lands v. Court of Appeals, 7 citing Caltex v. CIR, 8, this Court ruled that in all cases where the
authority of the courts to proceed
is conferred by a statute and when the manner of obtaining jurisdiction is mandatory it must be
strictly complied with, or the proceedings will be utterly void. So that where there is a defect of
publication of petition, such defect deprives the court of jurisdiction. 9 And when the court lacks
jurisdiction to take cognizance of a case, the same lacks authority over the whole case and all its
aspects. 10

initial hearing. While there is no dispute that the notice was included in Vol. 84, No. 42, 17
October 1988 issue of the Official Gazette, this particular issue was released for publication only
on 31 January 1989 when the initial hearing was already a fait accompli. The point of reference
in establishing lack of jurisdiction of the trial court was 31 January 1989 because it was only on
that date when the notice was made known to the people in general. 14 Verily, the late publication
of the notice defeated the purpose for its existence thereby reducing it to a mere pro
forma notice.
By reason of the defective notice of initial hearing, all the proceedings conducted by the trial
court which culminated in its decision granting the prayer of respondent Dolor are declared
VOID and it was error for respondent Court of Appeals to have sustained the same.
WHEREFORE, the petition is GRANTED. The questioned decision of respondent Court of
Appeals which affirmed the decision of the Regional Trial Court of Daet, Camarines Norte, is
VACATED and SET ASIDE, and the application of private respondent for the confirmation and
registration of her title over the property described therein is DENIED.
SO ORDERED.
Davide, Jr., Quiason and Kapunan, JJ., concur.
Cruz, J., is on leave.

In Register of Deeds of Malabon v. RTC, Malabon, 11 an issue similar to the one presented in the
present petition was posed, that is, whether the actual publication of the notice of the petition in
the Official Gazette forty-seven (47) days afterthe hearing, instead of at least thirty (30) days
prior to the date of hearing, 12 was sufficient to vest jurisdiction in the court to hear and determine
the petition. We answered in the negative since the purpose of the publication of the notice of
the petition for reconstitution in the Official Gazette is to apprise the whole world that such a
petition has been filed and that whoever is minded to oppose it for good cause may do so within
thirty (30) days before the date set by the court for hearing the petition. It is the publication of
such notice that brings in the whole world as a party in the case.
Regarding applications for land registration, the purpose of publication of the notice of initial
hearing is the same: to require all persons concerned who may have any rights or interests in
the property applied for to appear in court at a certain date and time to show cause why the
application should not be granted. In particular, the notice in this case commanded all persons
concerned:
. . . to appear before this Court at its session to be held at Branch XXXVIII,
Municipality of Daet, Province of Camarines Norte, Philippines, on the 25th
day of November, 1988, at 8:30 o'clock in the forenoon, then and there to
present such claims as you may have to said land or any portion thereof,
and to submit evidence in support of such claims, and unless you appear at
said Court at the time and place aforesaid, your default will be recorded and
the title to the land will be adjudicated and determined in accordance with
law and the evidence before the Court, and thereafter you will forever be
barred from contesting said application (or petition) or any decree entered
thereon 13 (Emphasis supplied).
Section 23 of P.D. 1529 does not provide a period within which the notice should be published in
the Official Gazette but for reasons already obvious, the publication should precede the date of

[G.R. No. 132963. September 10, 1998]

REPUBLIC OF THE PHILIPPINES, (represented by Opol National Secondary Technical
School), petitioner, vs. NICANOR DOLDOL, respondent.
DECISION
ROMERO, J.:
Before us is a petition for review of the decision of the Court of Appeals dated October 27, 1997,
reversing the decision of the Regional Trial Court and dismissing herein petitioners complaint, as
well as its resolution of March 5, 1998, denying petitioners motion for reconsideration.
The facts are as follows:
Sometime in 1959, respondent Nicanor Doldol occupied a portion of land in Barrio Pontacan,
Municipality of Opol, Misamis Oriental. On October 23, 1963, he filed an application for saltwork
purposes for the said area with the Bureau of Forest Development. The Director of Forestry,
however, rejected the same on April 1, 1968. Meanwhile, the Provincial Board of Misamis
Oriental passed a resolution in 1965 reserving Lot 4932, Cad-237, Opol Cadastre as a school
site. This reserved lot unfortunately included the area occupied by Doldol.
In accordance with said resolution, the Opol High School transferred to the site in
1970. Seventeen years later, on November 2, 1987, then President Corazon Aquino issued
Proclamation No. 180 reserving the area, including the portion in dispute, for the Opol High
School, now renamed the Opol National Secondary Technical School (hereafter Opol National
School). Needing the area occupied by Doldol for its intended projects, the school made several
demands for him to vacate said portion, but he refused to move.

In view of Doldols refusal to vacate, Opol National School filed in 1991 a complaint for accion
possessoria with the Regional Trial Court of Cagayan de Oro. The trial court ruled in the schools
favor and ordered Doldol to vacate the land. On appeal, the Court of Appeals reversed the
decision of the court a quo, ruling that Doldol was entitled to the portion he occupied, he having
possessed the same for thirty-two years, from 1959 up to the time of the filing of the complaint in
1991.
Opol National Schools motion for reconsideration of said decision having been denied by the
Court of Appeals in its resolution of March 5, 1998, Opol National School elevated its case to
this Court, claiming that the Court of Appeals erred on a question of law when it held, contrary to
the evidence on record, that respondent had been in open, continuous, notorious and exclusive
possession of the land in dispute for thirty-two years.
The petition is meritorious.
In ruling in Doldols favor, the Court of Appeals grounded its decision on Section 48 of
Commonwealth Act No. 141 (otherwise known as the Public Land Act). Said provision, as
amended by Republic Act No. 1942, provides as follows:
Section 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming interest therein, but whose titles have not been perfected or completed, may
apply to the Court of First Instance (now Regional Trial Court) of the province where the land is
located for confirmation of their claims and the issuance of a certification of title therefor under
the Land Registration Act, to wit:
xxxxxxxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership for at least thirty years
immediately preceding the filing of the application for confirmation of title, except when
prevented by wars or force majeure. Those 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.(Italics ours)
In accordance with the above provision, the appellate court averred that a citizen of the
Philippines may acquire alienable land of the public domain if he has possessed the same for
thirty years. Finding Doldol to have occupied the disputed lot for thirty-two years, it ruled that the
former had acquired ownership of the same, thereby negating Opol National S chools claim over
the questioned area.
To further bolster its argument, the appellate court cited Republic vs. CA[1] where this Court, citing Director of
Lands vs. Iglesia ni Cristo, 200 SCRA 606 (1991) declared that:
The weight of authority is that open, exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes
private property.
xxxxxxxxx
with the latters 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.
xxxxxxxxx
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.
The appellate court has resolved the question as to who between the parties had a better right to possess the
lot through the erroneous application of an outdated version of Section 48 of the Public Land Act. Likewise,
Solicitor Renan E. Ramos of the Office of the Solicitor General erred in assuming that the thirty-year proviso in
the aforementioned section was still good law. The original Section 48(b) of C.A. No. 141 provided for
possession and occupation of lands of the public domain since July 26, 1894. This was superseded by R.A.
No. 1942,[2] which provided for a simple thirty year prescriptive period of occupation by an applicant for judicial
confirmation of imperfect title. The same, however, has already been amended by Presidential Decree No.
1073, approved on January 25, 1977. As amended, Section 48(b) now reads:
(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, since June 12, 1945, or earlier, immediately preceding the filing of the
application for confirmation of title, except when prevented by wars orforce majeure. Those 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. (Italics ours)
Thus, in the aforecited Republic vs. CA case, we stated that the Public Land Act requires that the applicant
must prove (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious
possession and occupation of the same must either be since time immemorial or for the period prescribed in
the Public Land Act. When the conditions set by law are complied with, the possessor of the land, by operation
of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being
issued.
The evidence presented shows that the land in dispute is alienable and disposable, in accordance with the
District Foresters Certification dated September 20, 1978, that the subject area is within Project 8, an alienable
and disposable tract of public land, as appearing in Bureau of Forest Land Classification Map No. 585. Doldol,
thus, meets the first requirement.
The parties, however, stipulated during the pre-trial hearing that Doldol had been occupying the portion
reserved for the school site only since 1959. The law, as presently phrased, requires that possession of lands
of the public domain must be from June 12, 1945 or earlier, for the same to be acquired through judicial
confirmation of imperfect title.
Consequently, Doldol could not have acquired an imperfect title to the disputed lot since his occupation of the
same started only in 1959, much later than June 12, 1945. Not having complied with the conditions set by law,
Doldol cannot be said to have acquired a right to the land in question as to segregate the same from the public
domain. Doldol cannot, therefore, assert a right superior to the school, given that then President Corazon
Aquino had reserved the lot for Opol National School. As correctly pointed out by the Solicitor General:
(T)he privilege of occupying public lands with a view of preemption confers no contractual or vested right in the
lands occupied and the authority of the President to withdraw such lands for sale or acquisition by the public,
or to reserve them for public use, prior to the divesting by the government of title thereof stands, even though
this may defeat the imperfect right of a settler. Lands covered by reservation are not subject to entry, and no
lawful settlement on them can be acquired. [3]
In sum, Opol National School has the better right of possession over the land in dispute.
WHEREFORE, premises considered, the decision of the Court of Appeals dated October 27, 1997, and
Resolution dated March 27, 1998, are hereby ANNULLED and SET ASIDE and the Decision of the Regional
Trial Court dated August 25, 1992, is hereby REINSTATED.
SO ORDERED.

G.R. No. L-69002 June 30, 1988

REPUBLIC
OF
THE
PHILIPPINES, petitioner,
vs.
AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA
CASTILLO, CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L.
CASTILLO, HIPOLITA DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO
HERRERA, JOSE L. CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO,
REGISTER OF DEEDS OF BATANGAS and THE INTERMEDIATE APPELLATE
COURT,respondents.
Castro, Nardo, Quintanilla, Gonzales & Macatangay Law Office for respondents.

PARAS, J.:
This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate
Appellate Court *reversing the February 6, 1976 Decision of the then Court of First Instance of
Batangas, Branch VI, in Civil Case No. 2044.
The antecedental facts of this case, as found by the then Intermediate Appellate Court, are as
follows:
Sometime in 1951, the late Modesto Castillo applied for the registration of two parcels of land,
Lots 1 and 2, located in Banadero, Tanauan, Batangas, described in Plan Psu-119166, with a
total area of 39,755 square meters. In a decision dated August 31, 1951, the said Modesto
Castillo, married to Amanda Lat, was declared the true and absolute owner of the land with the
improvements thereon, for which Original Certificate of Title No. 0-665 was, issued to him by the
Register of Deeds at Batangas, Batangas, on February 7, 1952. By virtue of an instrument dated
March 18, 1960, the said Lots 1 and 2 covered by Original Certificate of Title No. 0-665, together
with Lot No. 12374 covered by Transfer Certificate of Title No. 3254-A and Lot No. 12377
covered by Transfer Certificate of Title No. 3251-A, were consolidated and sub-divided into Lots
1 to 9 under Pcs-1046. After the death of Modesto Castillo, or on August 31, 1960, Amanda Lat
Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage in favor of
Florencio L. Castillo, et al., as a result of which Original Certificate of Title No. D-665 was
cancelled, and in lieu thereof, new transfer cerfificates of title were issued to Florencio Castillo,
et al., to wit: Transfer Certificate of Title No. 21703 (Lot 4) (and) Transfer Certificate of Title No.
21704 to Florencio Castillo (Lot 5); Transfer Certificate of Title No. T-21708 to Carlos L. Castillo
(Lot 7); Transfer Certificate of Title No. T-21712 to Mariano L. Castillo (Lot 6); Transfer Certificate
of Title No. T-21713 to Jose L. Castillo (Lot 9); Transfer Certificate of Title No. T-21718 to Aida C.
Herrera (Lot 2); and Transfer Certificate of Title No. T-21727 to Teresita L. Castillo (Lot 8).
The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment
of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as
heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots 1
and 2, Psu-119166) to the State. It was alleged that said lands had always formed part of the
Taal Lake, washed and inundated by the waters thereof, and being of public ownership, it could
not be the subject of registration as private property. Appellants herein, defendants below,
alleged in their answer that the Government's action was already barred by the decision of the
registration court; that the action has prescribed; and that the government was estopped from
questioning the ownership and possession of appellants.

Certificates of Title issued over the property in the names of the defendants. Lots Nos. 1 and 2
of Plan Psu-19166 are hereby declared public lands belonging to the state. Without
pronouncement as to costs.
The Court of Appeals, on appeal, in a Decision promulgated on April 26,1984, reversed and set
aside the appealed decision, and dismissed the complaint (Record, pp. 31-41). Herein petitioner
filed a Motion for Reconsideration (Record, pp. 42-51), but the same was denied in a Resolution
promulgated on October 12,1984 (Record, p. 52). Hence, the instant petition.
The sole issue raised in this case is whether or not the decision of the Land Registration Court
involving shore lands constitutes res adjudicata.
There is no question that one of the requisites of res judicata is that the court rendering the final
judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24 [1986];
that shores are properties of the public domain intended for public use (Article 420, Civil Code)
and, therefore, not registrable. Thus, it has long been settled that portions of the foreshore or of
the territorial waters and beaches cannot be registered. Their inclusion in a certificate of title
does not convert the same into properties of private ownership or confer title upon the registrant
(Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et al. v. Bayona, et al.,
98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).
But an important bone of contention is the nature of the lands involved in this case.
Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake,
washed and inundated by the waters thereof. Consequently, the same were not subject to
registration, being outside the commerce of men; and that since the lots in litigation are of public
domain (Art. 502), par. 4 Civil Code) the registration court (of 1951) did not have jurisdiction to
adjudicate said lands as private property, hence, res judicata does not apply. (Rollo, pp. 37-38).
The Government presented both oral and documentary evidence.
As summarized by the Intermediate Appelate Court (now Court of Appeals), the testimonies of
the witnesses for the petitioner are as follows:
1. Rosendo Arcenas, a Geodetic Engineer connected with the Bureau of Lands since 1961,
testified to the effect that Lots 1 and 2, Psu-119166, which are the lots in question, adjoin the
cadastral survey of Tanauan, Batangas (Cad. 168); that the original boundary of the original
cadastral survey was foreshore land as indicated on the plan; that the cadastral survey of
Tanauan was executed sometime in 1923; that the first survey executed of the land after 1923
was the one executed in 1948 under Plan Psu-119166 that in the relocation survey of the
disputed lots in 1962 under SWO-40601, said lots were annotated on the plan as claimed by the
Republic of the Philippines in the same manner that it was so annotated in Plan Psu-119166;
thus showing that the Government was the only claimant of the land during the survey in 1948;
that during the relocation survey made in 1962, old points cannot be Identified or located
because they were under water by about forty centimeters; that during the ocular inspection of
the premises on November 23, 1970, he found that 2 monuments of the lots in question were
washed out by the waters of the Baloyboy Creek; that he also found duck pens along the lots in
question; that there are houses in the premises as well as some camotes and bananas; and that
he found also some shells ('suso') along the banks of the Taal lake (Tsn, Nov. 16, 1970, pp. 1321; Feb. 16, 1971, pp. 4-36).

After trial, the then Court of First Instance of Batangas, Branch VI, presided over by Honorable
Benjamin Relova, in a Decision dated February 6, 1976 (Record on Appeal, pp. 62-69), ruled in
favor of herein petitioner Republic of the Philippines. The decretal portion of the said decision,
reads:

2. Braulio Almendral testified to the effect that he is a resident of Tanauan, Batangas, near the
Taal lake; that like himself there are other occupants of the land among whom are Atanacio
Tironas, Gavino Mendoza, Juliano Tirones, Agapito Llarena, etc.; that it was they who filled up
the area to make it habitable; that they filled up the area with shells and sand; that their
occupation is duck raising; and that the Castillos never stayed in or occupied the premises (Tsn,
Nov. 16, 1970, pp. 32-50).

WHEREFORE, the Register of Deeds of Batangas is hereby ordered to cancel Original

Certificate of Title No. 0-665 in the name of Modesto Castillo and the subsequent Transfer of

3. Arsenio Ibay, a Geodetic Engineer connected with the Bureau of Lands since 1968, also
testified to the effect that in accordance with the cadastral plan of Tanauan, the only private

claim of Sixto Castillo referred to Lots 1006 to 1008; that the Castillos never asserted any private
claim to the lots in question during the cadastral survey;' that in the preparation of plan Psu119166, Lots 12374 and 12377 were made as reference to conform to previously approved
plans; that lot 12374 is a portion of cadastral lot 10107, SWO-86738 while Lot 22377 is a portion
of Lot 10108 of the same plan (Tsn, Nov. 25, 1970, pp. 115-137).
4. Jose Isidro, a Land Investigator of the Bureau of Lands, testified to the effect that pursuant to
the order of the Director of Lands, he, together with Engineer Rufino Santiago and the barrio
captain of Tanauan, Batangas, conducted an investigation of the land in question; that he
submitted a report of investigation, dated October 19, 1970 (Exh. H-1); that portions of the lot in
question were covered by public land applications filed by the occupants thereof; that Engineer
Santiago also submitted a report (Exh. H-8); that he had notified Dr. Mariano Castillo before
conducting the investigation (Tsn, Nov. 25,1970, pp. 137-162).
5. Rufino Santiago, another Geodetic Engineer connected with the Bureau of Lands, testified to
the effect that on October 19,1970, he submitted a report of investigation regarding the land in
question; that he noted on the plan Exhibit H-9 the areas on which the houses of Severo
Alcantara and others were built; that he found that the land was planted to coconuts which are
about 15 years old; that the land is likewise improved with rice paddies; that the occupants
thereof are duck raisers; that the area had been elevated because of the waste matters and
duck feeds that have accumulated on the ground through the years (Tsn, Nov. 26,1970, pp. 163196).
6. Pablo Tapia, Barrio Captain of Tanauan, Batangas, since 1957, testified to the effect that the
actual occupants of Lots I and 2 are Atanacio Tirones,tc.; that during the war the water line
reached up to a point marked Exhibit A-9 and at present the water has receded to a point up to
Exhibit A-12; that the reasons why the waters of Taal lake have receded to the present level is
because of the fillings made by the people living in Lots 1 and 2; that there are several duck
pens all over the place; that the composition of the soil is a mixture of mud and duck feeds; that
improvements consist of bananas, bamboos and palay; that the shoreline is not even in shape
because of the Baloyboy Creek; that the people in the area never came to know about the
registration case in which the lots in question were registered; that the people living in the area,
even without any government aid, helped one another in the construction of irrigated rice
paddies; that he helped them file their public land applications for the portions occupied by them;
that the Castillos have never been in possession of the premises; that the people depend upon
duck raising as their means of their livelihood; that Lots 1 and 2 were yet inexistent during the
Japanese occupation; and that the people started improving the area only during liberation and
began to build their houses thereon. (Tsn, Nov. 26,1970, pp. 197-234).
Among the exhibits formally offered by the Government are: the Original Plan of Tanauan,
Batangas, particularly the Banader Estate, the Original Plan of PSU-119166, Relocation
Verification Survey Plan, maps, and reports of Geodetic Engineers, all showing the original
shoreline of the disputed areas and the fact that the properties in question were under water at
the time and are still under water especially during the rainy season (Hearing, March 17,1971,
TSN, pp. 46-47).

1. Silvano Reano, testified to the effect that he was the overseer of the property of the late
Modesto Castillo located at Banadero,Tanauan, Batangas since 1944 to 1965; that he also
knows Lots 1 and 2, the parcels of land in question, since he was managing said property; that
the occupants of said Lots 1 and 2 were engaged in duck raising; that those occupants were
paying the Castillos certain amount of money because their animals used to get inside the lots in
question; that he was present during the survey of the land in 1948; and that aside from the duck
pens which are built in the premises, the land is planted to rice (Tsn, April 14, 1971, pp. 62-88).
2. Dr. Mariano Castillo, testified to the effect that the late Modesto Castillo was a government
official who held high positions in the Government; and that upon his death the land was
subdivided among his legal heirs. (Appellee's Brief, pp. 4-9).
As above-stated, the trial court decided the case in favor of the government but the decision was
reversed on appeal by the Court of Appeals.
A careful study of the merits of their varied contentions readily shows that the evidence for the
government has far outweighed the evidence for the private respondents. Otherwise stated, it
has been satisfactorily established as found by the trial court, that the properties in question
were the shorelands of Taal Lake during the cadastral survey of 1923.
Explaining the first survey of 1923, which showed that Lots 1 and 2 are parts of the Taal Lake,
Engineer Rosendo Arcenas testified as follows:
ATTY. AGCAOILI:
Q Now, you mentioned Engineer that a subject matter of that plan which appears to be Lots 1
and 2 are adjoining cadastral lots of the Tanauan Cadastre, now, will you please state to the
Court what is the basis of that statement of yours?
A The basis of that statement is the plan itself, because there is here an annotation that the
boundary on the northeastern side is Tanauan Cadastre 168 which indicates that the boundary
of the original cadastral survey of Tanauan Cadastre way back in the year 1923 adjoins a
foreshore land which is also indicated in this plan as foreshore lands of Taal lake, sir.
xxx xxx xxx
Q Now, on this plan Exhibit "A-2", there are two lots indicated namely, Lots 12374 and 12377,
what do these lots represent?
A This is the cadastral lot executed in favor of a certain Modesto Castillo that corresponds to
Lots 12374 and another Lot 12377, sir.
Q At the time this survey plan Psu-119166 and marked as Exhibit "A-2" was executed in 1948,
were these lots 1 and 2 already in existence as part of the cadastral survey?
A No, sir, because there is already a foreshore boundary.

On the other hand, private respondents maintain that Lots 1 and 2 have always been in the
possession of the Castillo family for more than 76 years and that their possession was public,
peaceful, continuous, and adverse against the whole world and that said lots were not titled
during the cadastral survey of Tanauan, because they were still under water as a result of the
eruption of Taal Volcano on May 5, 1911 and that the inundation of the land in question by the
waters of Taal Lake was merely accidental and does not affect private respondents' ownership
and possession thereof pursuant to Article 778 of the Law of Waters. They finally insisted that
this issue of facts had been squarely raised at the hearing of the land registration case and,
therefore, res judicata(Record on Appeal, pp. 63-64). They submitted oral and documentary
evidence in support of their claim.

Q Do I understand from you Mr. Witness at the time of the survey of this land these two lots form
part of this portion?

Also summarized by respondent Appellate Court, the testimonies of the witnesses of private
respondents are as follows:

That as per original plan Psu-119166, it appears that Lot 1 and Lot 2, Psu-119166 surveyed and
approved in the name of Modesto Castillo is a portion of Taal Lake and as such it appears to be

A Yes, sir.
Q When again was the cadastral survey of Tanauan, Batangas, executed if you know?
A In the year 1923, sir. (Hearing of Nov. 16, 1970, TSN pp. 15-17).
Such fact was further verified in the Verification-Relocation Survey of 1948 by Engineer Arcenas
who conducted said survey himself and reported the following:

under water during the survey of cadastral Lot No. 12374 and Lot No. 12377, which was
surveyed and approved in the name of Modesto Castillo under Cad. 168. To support this theory
is the annotation appearing and printed along lines 2-3-4-5 of Lot 1, Psu-119166 and along lines
4-5-6 of Lot 2, Psu-119166 which notations clearly indicates that such boundary of property was
a former shorelines of Taal Lake, in other words, it was the extent of cultivation being the
shorelines and the rest of the area going to the southwestern direction are already covered by
water level.
Another theory to bolster and support this Idea is the actual location now in the verificationrelocation survey of a known geographic point were Barrio Boundary Monument (BBM N. 22) is
under water level quite for sometimes as evidence by earthworks (collection of mud) that
amount over its surface by eighty (80) centimeters below the ground, see notation appearing on
verification-relocation plan previously submitted. (Re-Verification-Relocation Survey Exhibits, pp.
64-65).
Said surveys were further confirmed by the testimonies of witnesses to the effect that from 1950
to 1969, during rainy season, the water of Taal lake even went beyond the questioned lots; and
that the water, which was about one (1) foot, stayed up to more or less two (2) to three (3)
months (Testimonies of Braulio Almendral and Anastacio Tirones both residents of Banadero,
Tanauan, Batangas (Hearing of Nov. 16, 1970, TSN, pp. 41-42 and Hearing of Nov. 23, 1970,
TSN, pp. 93, 98-99, respectively). In the Relocation Survey of 1962, there were no definite
boundary or area of Lots 1 and 2 because a certain point is existing which was under water by
40 centimeters (Testimony of Engineer Arcena, Hearing of Nov. 16,1970, TSN, p. 20).
Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated
from foreshore land or that part of the land adjacent to the sea which is alternately covered and
left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition, 1954,
p. 67).
Such distinction draws importance from the fact that accretions on the bank of a lake, like
Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v.
Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public
domain, and is not available for private ownership until formally declared by the government to
be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
But said distinction will not help private respondents because there is no accretion shown to
exist in the case at bar. On the contrary, it was established that the occupants of the lots who
were engaged in duck raising filled up the area with shells and sand to make it habitable.
The defense of long possession is likewise not available in this case because, as already ruled
by this Court, mere possession of land does not by itself automatically divest the land of its
public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).
PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate Court
is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then Court of
First Instance of Batangas is hereby AFFIRMED and REINSTATED.
SO ORDERED.

G.R. No. 97493 February 8, 1993

PATRICIO
B.
MANALASTAS
and
BELEN
MANALASTAS, petitioners,
vs.
HON. COURT OF APPEALS, APOLONIA DELA CRUZ and THE HEIRS OF MOISES
CAO, respondents.
Santiago P. Armamento III for petitioners.

Public Attorney's Office for respondents.

NOCON, J.:
The case at bar involves the question of which prevails: is it the disposition of public agricultural
land by a deed of sale over the same or its disposition by free patent? The answer, of course, is
obvious. But first the facts of the case have to be tackled as there is where the seeming
confusion lies.
As the petitioners dispute the findings of facts by both the respondent Court of Appeals and the
trial court, the respective statements of fact by the litigants will have to be considered for a
proper disposition of the case at bar.
According to petitioners:
By virtue of a Deed of Absolute Sale dated December 30, 1949 (Exhibit "A"), Patricio Manalastas
and Belen Manalastas obtained from spouses Albino Magat and Benigna Sangalang a parcel of
land situated in Vizal, San Pablo, Candaba, Pampanga, which contained an area of sixty four
thousand and sixty (64,060) square meters (tsn, Nov. 15, 1985, pp. 7, 10-12). Due to the
construction of road and irrigation canal, the land was separated or divided into Lots Nos. 747,
3801, 3802 and 4160, Pls-476 of the Candaba Public Land Subdivision (Exhibit "E" and Exhibit
"B", tsn, id., pp. 29-30). Pursuant to a survey of land conducted on March 7, 1956, the Bureau of
Lands approved on October, 9, 1972 Exhibit "E", or the survey plan of Lot Nos. 747, 3801 and
3802, as well as Exhibit "B", the survey plan of Lot No. 4160, both in the name of Patricio
Manalastas. Lot No. 4160 with an area of two thousand two hundred and two (2,202) square
meters (Exhibit "B") adjoined Lot No. 745 belonging to Moises Cao (tsn, id., pp. 10, 14-15). A
fence made of concrete hollow blocks was constructed by Moises Cao to separate Lot No. 745
from Lot 4160 (tsn, id., p. 16). On March 2, 1951, Patricio and Belen Manalastas declared the
property subject of Exhibit "A" for taxation purposes with the Office of the Provincial Assessor of
Pampanga under Tax Declaration No. 4723 (Exhibit "C"), and have since paid the taxes thereon
(tsn, id., pp. 17-18).
Specifically, Lot No. 4160 was used for both residential and agricultural purposes. The
residential portion is occupied by four householders, namely, spouses Daniel Manalastas and
Apolonia Caasa, Alfonso and Belen Buco, Aquilino and Marieta Buco, and lastly, Maxima
Caasa. They have been staying in Lot No. 4160 since the purchase of the land by Patricio and
Belen Manalastas, to whom they each pay a yearly rent of one (1) cavan of palay (tsn, id., pp.
18-20; Oct. 5, 1985, p. 5) Witnesses Aquilino Buco and Maximo Manalastas, both admitted that
the lot (Exhibit "B") situated in Vizal, San Pablo, Candaba, Pampanga on which their houses
stand is owned by Patricio Manalastas, to whom they pay a yearly rent of one cavan of palay
(tsn, Jan. 15, 1986, pp. 9-13). On the other hand, the agricultural portion is cultivated by one
Felicisimo Balmeo, tenant of Patricio and Belen Manalastas (tsn, Nov. 15, 1985, pp. 20-21).
Witness Balmeo testified that Patricio and Belen Manalastas gave him the authority to cultivate
the land, which he started in 1950 continuously up to the present and which portion of land he
identified as Exhibit "B-1" (tsn, Jan. 15, 1986, pp. 5-6). From the time that Patricio and Belen
Manalastas acquired Lot No. 4160, neither Moises Cao nor any of his heirs have occupied any
portion thereof, whether actual or constructive (tsn, Nov. 15, 1985, pp. 22-23).
Sometime in February 1985, Patricio Manalastas was informed by his tenant, Felicisimo Balmeo
that while he was cutting bamboo on a portion of Lot No. 4160, he was stopped by the Caos
(referring to the heirs of Moises Cao who died in 1982) who claimed that the property belong to
them (tsn, id., p. 23). Patricio Manalastas went to the proper government offices to verify the
basis of this claim. He discovered that when Moises Cao was still alive, he filed an application
for free patent title with the Bureau of Lands, of which he (Manalastas) did not receive any notice
(tsn, id., pp. 22-24). Patricio Manalastas was able to secure a certified true copy of the duplicate
original of the said application of Moises Cao dated June 9, 1958, which showed that the
application for free patent referred only to Lot No. 745, Pls-476 of Candaba, Pampanga,

described therein as containing an area of only one thousand fifty (1,050) square meters
(Exhibits
"D"
and
"D-l") (tsn, id., p. 25). On the basis of a free patent title obtained on Lot No. 745, Pls-476, the
Register of Deeds for the Province of Pampanga issued Original Certificate of Title No. 948 in
favor of Moises Cao on November 17, 1972, which showed however that Lot No. 745, Pls-476
now contains an area of three thousand one hundred and fourteen (3,114) square meters
(Exhibit "I"). Comparing Moises Cao's application for free patent with the certificate of title
subsequently issued to him (Moises Cao), Patricio Manalastas found that said title to the land
embraced and covered the whole of Lot No. 4160 belonging to him (tsn, id., p. 31). Thereafter,
Patricio Manalastas went to the farm and talked to the wife and children of the late Moises Cao
and told them about the mistake in the title of Moises because it encroached on his Lot No.
4160. He offered to settle the matter anicably with them in order to avoid litigation, but they told
him that they could no longer return his lot to him as it was already titled in the name of Moises
Cao (tsn, id., p. 32). 1
Moreover, according to private respondents:
1. The land in dispute (Lot 4160, AS-1547 having an area of 2,202 square meters) was a part of
the Candaba Public Land Subdivision located in Visal, San Pablo, Candaba, Pampanga and
thus, a public land. It is an agricultural public land and was originally designated as portion of Lot
745, PLS-476 which has a total area of 3,114 square meters. (Annex "1", Comment).
2. In 1930, the parents of Moises Cao were actually possessing and cultivating the said public
land. Moises Cao and family, subsequently, occupied the same in the concept of an owner and
in an open, public and adverse manner.
3. Moises Cao, on November 13, 1956 caused the survey of the said public land (Lot 745, PLS476) in his (Cao's) name.
4. Moises Cao, on June 9, 1958 applied for a free patent over said public land.
5. On October 2, 1972, Lot 745, PLS-476 was subdivided by the Bureau of Lands into two (2)
lots one of which is Lot 4160-AS-1547 which had an area of 2,202 square meters and the other
one, is Lot 245 with an area of 912 square meters.
6. The then Secretary of Agriculture and Natural Resources Arturo R. Tanco, Jr. thru the Bureau
of Lands as authorized by the President of the Philippines approved said application for free
patent of Moises Cao not only over the 912 square meters lot but on the original Lot 745, PLS476 which was said to contain an area of 3,114 square meters. Moises Cao, therefore, obtained
a free patent title on the said public land. (Annex "2", Comment) Original Certificate of Title
(OCT) No. 948 of the Office of the Register of Deeds of Pampanga, consequently, was issued in
Moises Cao's name. (Annex "3", Comment) Moises Cao, thus, become the lawful owner and
possessor of Lot 745, PLS-476 which includes Lot 4160, AS-1547 being caimed by the
petitioners.
7. Moises Cao, in 1982, died and was survived by his wife Apolonia de la Cruz and their
children. Private respondents Apolonia de la Cruz Vda. de Cao and children, consequently,
inherited the said property. 2
As a result of this controversy over Lot 4160, petitioners instituted an action for reconveyance
against private respondents which the trial court dismissed for lack of merit, reasoning out as
follows:
The present action was filed only on April 17, 1985, Original Certificate of Title No. 948 issued by
virtue of a free patent application, as already stated, on November 17, 1972. For an action for
reconveyance of land to prosper in this case, there must be evidence to show that the fraudulent
statements were made in the application for free patent, and moreover, the action must be
instituted four years from the discovery of such fraudulent statements. No evidence was
presented by the plaintiffs to show such fraudulent statements were made in the application to

warrant reconveyance. More than four years had already elapsed whenthis action was filed.
Prescription of action therefrom lies.
An action for reconveyance of land, for which a patent had been issued to the defendant by
reason of fraudulent statements, is one based on fraud, and must be instituted within four years
from the discovery of the fraudulent statements made in the application. (Rosario v. Auditor
General, L-11817, April 30, 1958; Jean v. Agregado, L-7921, Sept. 28, 1955).
Another thing that militates against the plaintiffs.
A holder of a land acquired under free patent is more favorably situated than that of an owner of
registered property. (Cabacug vs. Lao, L-27036, 36 SCRA 91).
The plaintiffs have no title for the portion sought to be reconveyed. They anchor their cause of
action merely on the deed of sale and the survey plan.
Mere claim cannot defeat a registered title. It is obvious that a mere claim cannot defeat a
registered title. Furthermore, the "claim" is only noted on the survey plan, and such notation
cannot prevail over the actual decree of registration as reproduced in the certificate. All claims of
third persons to the property must be asserted in the registration proceedings. If any claim to a
portion thereof is upheld, that portion is segregated from the property applied for, and is not
included in the decree of registration and certificate of title subsequently issued to the applicant.
If it is included, the claim is deemed adversely resolved with finality, subject only to a petition for
review of the decree within one year from its issuance on the ground of fraud, under Section 38
of
the Land Registration Act. (Fernandez vs. Aborantigue, 36 SCRA 476). 3 (Emphasis in the
original).
The respondent court found petitioners' appeal to be devoid of merit. 4 Their motion for
reconsideration, likewise, met the same fate, with the respondent Court ruling as follows:
In the present case, the title sought to be annulled, Original Certificate of Title No. 948, was
issued by the Register of Deeds of Pampanga on September 17, 1972. Appellants, however,
filed their action for reconveyance only on April 16, 1985, clearly beyond the ten (10) year
prescriptive period. 5
Petitioners now plead their case before Us complaining that the respondent Court of Appeals
erred in:
1. . . . IGNORING VITAL FACTS AND CIRCUMSTANCES WHICH SHOW THAT PRIVATE
RESPONDENTS AND THEIR PREDECESSOR-IN-INTEREST, MOISES CAO, HAVE NEVER
BEEN IN POSSESSION OF LOT 4160 AND THAT THE INCLUSION OF SAID LOT IN THE
CERTIFICATE OF TITLE ISSUED TO MOISES CAO WAS DUE TO FRAUD OR MISTAKE.
2. . . . DISREGARDING THE SETTLED JURISPRUDENCE THAT AN ACTION TO QUIET TITLE
TO PROPERTY IN ONE'S POSSESSION IS IMPRESCRIPTIBLE.
3. . . . HOLDING THAT THE CARAGAY-LAYNO DOCTRINE HAS BEEN ABANDONED. 6
From the narration of facts by petitioners essentially, what petitioners did was to:
1. buy a parcel of land from the Magat spouses on December 30, 1949;
2. have the land surveyed due to the construction of a road and irrigation canal;
3. declare the property for taxation purposes and pay the taxes;
4. put a tenant in the agricultural area; and
5. build four (4) houses for himself and relatives.

What private respondents did, essentially, was to:

1. cause the survey of the land in Moises Cao's name; and
2. apply for a free patent over the said land.
Since what is at stake here was public agricultural land, the procedure to obtain such land must
be followed. Said procedure is spelled out in Section 11, CA 141, as amended, which reads
asfollows:
Sec. 11. Public lands suitable for agricultural purposes can be disposed of only as follows, and
not otherwise:
1. For homestead settlement.
2. By sale.
3. By lease.

TAMAYO, THE COMMISIONER OF THE LAND REGISTRATION COMMISSION and the

REGISTER OF DEEDS OF NUEVA ECIJA, respondents.
G.R. No. L-28144 November 28, 1975
ALIPIO ALINSUNURIN, now substituted by PARAAQUE INVESTMENT and
DEVELOPMENT
CORPORATION, applicant-appellee,
vs.
THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY and the ARMED FORCES OF
THE PHILIPPINES,oppositors-appellants.
Acting Solicitor General Hugo E. Gutierrez, Jr. and Assistant Solicitor General Reynato S. Puno
for The Director of Lands, etc.
Jaime B. Lumasag Jr. and Jose J. Roy and Associates Law Office for Roman C. Tamayo.
Nemesio P. Diaz and Celso B. Fernandez, Jr. for Alipio Alinsunurin, etc.

4. By confirmation of imperfect or incomplete titles:

a) By judicial legislation.
b) By administrative legislation (free patent).
Obviously, petitioners did not follow the procedure mandated by law. Even if petitioners could
trace their deed of sale back to Adam and Eve, fill in every square inch of the land with
agricultural tenants, have residential houses built every few meters here and there, pay the
realty taxes religiously every year and have an approved Bureau of Lands Survey yearly, they
will NOT become the owners of said parcel of land IF THEY WILL NOT follow the procedures
above indicated.
Since private respondents' father, the deceased Moises Cao did follow the procedure outlined in
the law, Moises Cao became the owner of the disputed parcel of land, as in fact, he was
awarded title to all 3,134 square meters of it by no less than the then Secretary of Agriculture
and Natural Resources, Arturo R. Tanco, Jr. 7
There was no fraud on the part of the late Moises Cao in obtaining title to the land in dispute. On
the other hand, there was lack of proper legal advice on the part of petitioners. They probably
thought they knew what to do in this particular situation without consulting a lawyer. For
example, petitioners could have tacked on to their length of possession of the Magat spouses
and any predecessors-in-interest and then apply for judicial confirmation of their imperfect
title. 8 Sad to say, they did not.
The respondent court and the trial court, therefore, did not ignore those alleged vital facts and
circumstances upon which petitioners stake their claim.
There is no need, therefore, to discuss the other assigned errors.
WHEREFORE, the petition is hereby DENIED for lack of merit. The respondent court's
resolution is hereby AFFIRMED in toto.
SO ORDERED.
G.R. No. L-27594 November 28, 1975
THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY, and the ARMED FORCES OF
THE
PHILIPPINES, petitioners,
vs.
HON. SALVADOR C. REYES, as Judge of the Court of First Instance of Nueva Ecija,
Branch III, PARAAQUE INVESTMENT and DEVELOPMENT CORPORATION, ROMAN C.

ANTONIO, J.:
These cases are interrelated, and so are decided jointly.
In his application originally filed on February 24, 1964 with the Court of First Instance of Nueva
Ecija, the applicant Alipio Alinsunurin, claiming ownership in fee simple by inheritance from the
late Maria Padilla, sought the registration of title under Act 496, as amended, of a vast tract of
land, containing an area of 16,800 hectares, more or less, situated at the municipality of Laur,
province of Nueva Ecija, admittedly inside the boundary of the military reservation of Fort
Magsaysay. 1
On May 5, 1966, the Director of Lands, Director of Forestry, and the Armed Forces of the
Philippines opposed the application, claiming that the applicant was without sufficient title and
was not in open, exclusive, continuous and notorious possession and occupation of the land in
question for at least thirty (30) years immediately preceding the filing of the application; that
approximately 13,957 hectares of said land consist of the military reservation of Fort Magsaysay
established under Proclamation No. 237, dated December 10, 1955 of the President. 2
On May 10, 1966, the applicant Alipio Alinsunurin filed a motion for substitution of parties,
requesting that the Paraaque Investment and Development Corporation be considered as the
applicant in his place, it having acquired all his rights, interests, ownership and dominion over
the property subject matter of the application. 3 The motion was granted by the lower court in its
order dated June 10, 1966. 4
It is beyond dispute that the land subject of the application is included within the area reserved
for military purposes under Proclamation No. 237, dated December 19, 1955, of the President.
The land is largely uncultivated, mountainous and thickly forested with a heavy growth of timber
of commercial quantities. 5 Except for a small area cultivated for vegetation by homesteaders
issued patents by the Director of Lands, there were no occupants on the land. 6
It is claimed by the applicant that Melecio Padilla acquired the land by virtue of a possessory
information title issued during the Spanish regime on March 5, 1895, and upon his death in
1900, he transmitted the ownership and possession thereof to his daughter and sole heir, Maria
Padilla. The latter in turn continued to cultivate the land thru tenants and utilized portions for
pasture, until her death sometime in 1944.
On November 19, 1966, the lower court rendered decision holding that the parcel of land applied
for, described in the technical description Plan II-6752, is adjudicated to and ordered to be
registered in favor of (a) Paraaque Investment and Development Corporation, a Philippine
corporation wholly owned by Filipino citizens, with address at Manila, Philippines, two-thirds

(2/3) portion, subject to the rights of Ariosto Santos per Joint Manifestation of Alipio Alinsunurin
and Encarnacion Caballero-Alinsunurin, Ariosto Santos and Paraaque Investment and
Development Corporation dated July 19, 1966 and marked as Exhibit "AA-4 " 7 and (b) Roman
C. Tamayo, Filipino citizen, married, resident of Cullit, Lallo, Cagayan, one-third (1/3) portion of
the said property.

are hereby restrained from accepting for registration documents referring to the subject land until
petitioners shall have filed a notice of lis pendens as to the title certificates of Roman Tamayo
and Paraaque Investment and Development Corporation, under Sec. 24, Rule 14, Rules of
Court, subject of the above-mentioned Land Registration Case No. N-675, LRC Rec. No. N25545.

On December 12, 1966, the oppositors Director of Lands, Director of Forestry and the Armed
Forces of the Philippines filed a Notice of Appeal from the said decision to the Supreme
Court, 8 copy of which notice was furnished counsel for the applicant Paraaque Investment and
Development Corporation; however, no copy was furnished to counsel for Roman C. Tamayo, to
whom one-third (1/3) portion of the land was adjudicated.

Accordingly, petitioners-appellants caused the entry of a notice of lis pendens to be duly

inscribed in the primary entry book of the Registry of Deeds of Nueva Ecija and annotated in the
memorandum of encumbrances in Original Certificate of Title No. 0-3151.

On January 18, 1967, within the extended period granted by the court, the oppositors-appellants
filed the corresponding Record on Appeal, copy of which was duly served upon appellees
Paraaque Investment and Development Corporation and Roman C. Tamayo.
By an order dated March 8, 1967, the lower court required the Provincial Fiscal to file an
Amended Record on Appeal, so as to include therein certain orders and pleadings, within ten
(10) days from receipt of the order. 9
On March 16, 1967, the Amended Record on Appeal was duly filed and copies served upon the
appellees.
Pending the approval of the Record on Appeal, the applicant Paraaque Investment and
Development Corporation filed a motion for the issuance of a decree of registration pending
appeal. Likewise, Roman C. Tamayo, thru counsel, filed a motion for the issuance of a decree of
registration. Both motions were opposed by the Government.
On March 11, 1967, the lower court, ruling that its decision of November 19, 1966 had become
final as to the share of Roman C. Tamayo, directed the issuance of a decree of registration of
the entire land, one-third (1/3)pro-indiviso in favor of Roman C. Tamayo, and two-thirds (2/3) pro
indiviso in favor of Paraaque Investment and Development Corporation, subject to the final
outcome of the appeal.
On March 14, 1967, the Commissioner of Land Registration forthwith issued Decree No. 113485
pursuant to the said order, and, on March 15, 1967, the Register of Deeds issued Original
Certificate of Title No. 0-3151 of the Register of Deeds of the Province of Nueva Ecija.
On April 12, 1967, the lower court approved the Amended Record on Appeal which, together
with the evidence and transcripts, was forwarded to this Court in due course of appeal.
As the lower court denied reconsideration of the order directing the issuance of a decree of
registration, on May 29, 1967, the Director of Lands, Director of Forestry and the Armed Forces
of the Philippines instituted before this Court a special civil action for certiorari and mandamus
with preliminary injunction (L-27594), seeking to nullify the order dated March 11, 1967, the
decree of registration issued pursuant thereto (Decree No. 113485 dated March 14, 1967) and
Original Certificate of Title No. 0-3151 of the Register of Deeds for the province of Nueva Ecija,
and to command the respondent court to certify the entire proceedings and to allow appeal to
the Supreme Court from its decision in toto in LRC Case No. N-675, LRC Rec. No. N-25545.
On June 5, 1967, We issued a writ of preliminary injunction as follows:
NOW, THEREFORE, until further orders from this Court, You (respondent Judge) are hereby
restrained from issuing a writ of possession in Land Registration Case No. N-675, LRC Rec. No.
25545 of the Court of First Instance of Nueva Ecija, entitled "Paraaque Investment and
Development Corporation versus Director of Lands, et al."; You (respondent Paraaque
Investment and Development Corporation and Roman C. Tamayo), your agents or
representatives are hereby restrained from taking possession and/or excercising acts of
ownership, occupancy or possession over the property in question subject matter of Land
Registration Case No. N-675, LRC Rec. No. N-25545; and You (respondent Register of Deeds)

In due time, the respondents filed their answers to the petition for certiorari. The parties having
filed their respective memoranda, the case is deemed submitted for decision.
At
the
(L-27594).

outset,

We

shall

resolve

the

petition

for certiorari and mandamus

I
Under the circumstances of this case, the failure of the appellants to serve a copy of their Notice
of Appeal to the counsel for adjudicatee Roman C. Tamayo is not fatal to the appeal because,
admittedly, he was served with a copy of the original, as well as the Amended Record on Appeal
in both of which the Notice of Appeal is embodied. 10 Hence, such failure cannot impair the right
of appeal. 11
What is more, the appeal taken by the Government was from the entire decision, which is not
severable. Thus, the appeal affects the whole decision. 12
In any event, We rule that execution pending appeal is not applicable in a land registration
proceeding. It is fraught with dangerous consequences. Innocent purchasers may be misled into
purchasing real properties upon reliance on a judgment which may be reversed on appeal.
A Torrens title issued on the basis of a judgment that is not final is a nullity, as it is violative of the
explicit provisions of the Land Registration Act which requires that a decree shall be issued only
after the decision adjudicating the title becomes final and executory, and it is on the basis of said
decree that the Register of Deeds concerned issues the corresponding certificate of title.
Consequently, the lower court acted without jurisdiction or exceeded its jurisdiction in ordering
the issuance of a decree of registration despite the appeal timely taken from the entire
decision a quo.
II
In the instant case, as a precaution, oppositors-appellants caused notice of lis pendens to be
duly inscribed in Original Certificate of Title No. 0-3151 of the Register of Deeds of Nueva Ecija,
thereby keeping the whole land subject matter of the appeal within the power of the court until
the litigation is terminated. 13
Such entry of notice of lis pendens cannot be cancelled until the final termination of the litigation.
The notice of lis pendens must be carried over in all titles subsequently issued, which will yield
to the ultimate result of the appeal.14
During the pendency of the appeal, it appears that Honofre A. Andrada, et al., filed with the
Court of First Instance of Nueva Ecija (Branch I, not the land registration court), a complaint
against the appellee Paraaque Investment and Development Corporation, Rodolfo A. Cenidoza
and Roman C. Tamayo, for reconveyance of a portion of the land in question (Civil Case No.
4696). The trial court assumed jurisdiction over the case despite the pendency of the appeal
involving the same land, and decided the case in favor of plaintiffs. In violation of Our injunction
adverted to above, Paraaque Investment and Development Corporation executed a subdivision
plan of the original single parcel of land subject of the land registration proceedings covered by
Original
Certificate
of
Title
No.

0-3151, and deeded over six (6) lots of the subdivision plan to plaintiffs Honofre A. Andrada and
Nemesio P. Diaz. By an order dated September 23, 1968, entered in Civil Case No. 4696, the
Register of Deeds of Nueva Ecija was directed to cancel Original Certificate of title No. 0-3151
and to issue new titles to the above-named transferees "free from all liens and encumbrances."
Immediately, transfer certificates of title were issued to them and other transferees in which the
Register of Deeds of Nueva Ecija did not carry over the notice of lis pendens originally inscribed
in Original Certificate of Title No. 0-3151. Subsequently, other transactions were entered into
involving portions of the land reconveyed in Civil Case No. 4696, including a transfer of about
4,000 hectares to the Land Bank of the Philippines in consideration of P8,940,000.00.

p. 3, Exhibits of Applicant) was submitted by the said applicant, but it lacks the approval of the
Director of Lands.

We find the order to cancel Original Certificate of Title No. 03151 and to issue subsequent titles
free from all liens and encumbrances to be void ab initio.

It is also asserted that a blue print copy of the plan (Exhibit "D", p. 5, Exhibits of Applicant) was
superimposed in the military plan of the reservation under Proclamation No. 237, which military
plan was presented in evidence by the oppositors-appellants (Exhibit "6"), and it was agreed by
the parties that the plan, Exhibit "D", superimposed in the plan of the area covered by the
proclamation, is the plan of the land applied for (p. 15, Brief for Applicant-Appellee).

Civil Case No. 4696 is an action in personam to which the appellants are not parties; its object
was to decree reconveyance to plaintiffs of a portion of the area adjudicated to the Paraaque
Investment and Development Corporation and Roman C. Tamayo in Land Registration Case No.
N-675, LRC Rec. No. N-25545, which is subject to the outcome of the appeal. Such action is
barred by the pendency of the appeal. In that case, the court is without jurisdiction to order the
Register of Deeds to cancel Original Certificate of title No. 0-3151 and to issue titles to
transferees "free from all liens and encumbrances ." 15 Nor can such order be construed to
authorize the Register of Deeds to cancel the notice of lis pendens, which was not entered by
virtue of the reconveyance case. Thus, the Register of Deeds was duty bound to carry over the
said notice of lis pendens on all titles subsequently issued. But, in plain violation of lis
pendens in said titles; such act constitutes misfeasance in the performance of his duties for
which he may be held civilly and even criminally liable for any prejudice caused to innocent third
parties, but cannot affect the petitioners-appellants who are protected by Our writ of injunction
and the notice of lis pendens inscribed in the original title. It must be remembered that Our
injunction restrained the Register of Deeds "from accepting for registration documents referring
to the subject land until the petitioners shall have filed a notice of lis pendens as to the title
certificates of Roman C. Tamayo and Paraaque Investment and Development Corporation
under section 24, Rule 14, Rules of Court, subject of the above-mentioned Land Registration
Case No. N-675, LRC Rec. No. 25545." Its plain meaning is to enjoin registration of documents
and transactions unless the notice of lis pendens is annotated and so subject the same to the
outcome of the litigation. In such case, subsequent transferees cannot be considered innocent
purchasers for value.
On the other hand, the lower court's order dated September 23, 1968, in Civil Case No. 4696,
cannot overrule an injunction of this Court (in L-27594). As a result, We consider the notice of lis
pendens entered in virtue of this litigation to remain in full force and effect, and affects all
subsequent transferees of the title of the land subject of this appeal.
At any rate, it is well-settled that entry of the notice of lis pendens in the day book (primary entry
book) is sufficient to constitute registration and such entry is notice to all persons of such
adverse claim. 16
III
We now consider the appeal on the merits.
1. To begin with, the original tracing cloth plan of the land applied for, which must be approved
by the Director of Lands, was not submitted in evidence. The submission of such plan is a
statutory requirement of mandatory character. 17 Unless a plan and its technical description are
duly approved by the Director of Lands, the same are not of much value. 18
It is true that blueprints of two survey plans were presented before the trial court (both marked
Exhibit "D"). The first blueprint copy of a plan of land as surveyed for Maria Padilla (Exhibit "D",
p. 4, Exhibits of Applicant), was not formally offered in evidence. The second plan of the land, as
surveyed for Paraaque Investment and Development Corporation (also marked as Exhibit "D",

Of course, the applicant attempts to justify the non-submission of the original tracing cloth plan
by claiming that the same must be with the Land Registration Commission which checked or
verified the survey plan and the technical descriptions thereof. It is not the function of the LRC to
check the original survey plan as it has no authority to approve original survey plans. If, for any
reason, the original tracing cloth plan was forwarded there, the applicant may easily retrieve the
same therefrom and submit the same in evidence. This was not done.

Obviously, the superimposition of the copy of the survey plan of land as surveyed for applicant in
the military map of the area under Proclamation No. 237 was for the sole purpose of showing
that the land applied for is situated within the area covered by the military reservation of Fort
Magsaysay appropriately indicated in the perimeter map of said reservation (Exhibit "6"). But the
applicant is not relieved from the original tracing cloth plan approved by the Director of Lands as
required by law. One of the distinguishing marks of the Torrens System is the absolute certainty
of the identity of a registered land. Consequently the primary purpose of the aforesaid
requirement is to fix the exact or definite identity of the land as shown in the plan and technical
descriptions. Hence, the applicant is not relieved of his duty of submitting the original tracing
cloth of the survey plan of the land duly approved by the Director of Lands.
It will be noticed that the plan (Exhibit "D", p. 5, Exhibits of Applicant) does not bear the approval
of any officer authorized by law.
In similar manner, the surveyor's certificate, also required in original land registration
proceedings, was not offered in evidence.
2. We next consider the question of whether the applicant has a registerable title to the land
applied for.
The applicant relies on a purported titulo de informacion posesoria issued in the name of
Melecio Padilla (Exhibit "T" pp. 64-68, Exhibits of Applicant). However, neither the original of the
said titulo de informacion posesoria, nor a duly authenticated copy thereof, was submitted in
evidence, and there are serious flaws on the faces of the alleged copies of the document, as in
the circumstances surrounding their execution. Thus, the two (2) purported photostat copies of
the said informacion posesoria title materially differ on the date when said informacion
posesoria was issued. One copy showed that the said document was issued on March 5, 1895
(Exhibit "T") while the other indicated that it was issued twelve (12) years earlier, or on March 5,
1883 (Exhibit "2").
Moreover, according to the official records of the Register of Deeds of Nueva Ecija, on the basis
of the "List of Possessory Information Titles (Spanish Titles) of Nueva Ecija", the corresponding
supporting documents of which are kept in the vault of said office, the name of Melecio Padilla
does not appear among those listed as holders ofinformacion posesoria titles as of the year
1898 covering lands situated in Santor (now Laur) Nueva Ecija. According to said document, the
name Melecio Padilla appears only in the list of holders of possessory information titles over
lands situated in Pearanda, Nueva Ecija, but of a substantially smaller acreage. 19 Thus, the
seven (7) parcels recorded in the name of Melecio Padilla covered only a total area of 49
hectares, 18 acres and 325 centares. 20 In addition, the list of property owners in Santor (now
Laur), Nueva Ecija existing in the Division of Archives does not include the name of Melecio
Padilla. 21 It is true that an alleged copy of an informacion posesoria in the name of Melecio
Padilla, was recorded in the office of the Register of Deeds on November 10, 1942 by one
Rodolfo Baltazar, Register of Deeds (Exhibit "H"), but the Register of Deeds of Nueva Ecija

could not certify to its veracity, as the supposed document does not exist in their
records. 22 There is another factor which weighs heavily against the claim of the applicant. The
alleged informacion posesoria covers an area of "seis mil quiiones, poco mas e menos" or an
equivalent of 16,800 hectares. Under the Royal Decrees in force at the time of the supposed
acquisition, no one could acquire public land in excess of 1,000 hectares. Thus, the Royal
Decrees of November 25, 1880 and October 26, 1881, prohibited any grant of public land in
excess of one thousand (1,000) hectares. 23
Besides, the document described in Exhibit "H" is not the titulo de informacion posesoria,
because it was merely a certification of possession of Melecio Padilla over the property, and was
issued
without
prejudice
to
a
third
party
or
parties
having
a
better
right. 24 Thus, it states: "En su virtud habiendo examinado el Registro nuevamente formado por
la perdida o destruccion del mismo y no hallando en ningun asiento contrario a lo relacionado
reinscribe la posesion de la finca de este numero a favor de Don Melecio Padilla sin perjuicio de
tercero que puede tener mejor derecho a la propiedad." Under Spanish law, in order that
an informacion posesoria may be considered as title of ownership, it must be proven that the
holder thereof has complied with the provisions of Article 393 of the Spanish Mortgage Law.
It cannot be claimed that the registration of possession has been legally converted into a
registration of ownership because Melecio Padilla had not complied with the requirements of
Article 393 of the Spanish Mortgage Law, to wit: "that the applicant has been in open possession
of the land; that an application to this effect be filed after the expiration of 20 years from the date
of such registration; that such conversion be announced by means of a proclamation in a proper
official bulletin; that the Court order the conversion of the registration of possession into a record
of ownership; and that the Registrar make the proper record thereof in the Registry." 25 Evidently,
Melecio Padilla, having died on February 9, 1900, barely five (5) years after the inscription of the
informacion posesoria, could not have converted the same into a record of ownership twenty
(20) years after such inscription, pursuant to Article 393 of the Spanish Mortgage Law.
One year after the promulgation of the Maura Law, or on April 17, 1895, the right to perfect
possessory information title under the law expired. After that date, full property right of the land
reverted to the government and the right of the cultivator and possessor to obtain gratuitous title
was extinguished. 26
Before the military reservation was established, the evidence is inconclusive as to possession,
for it is shown by the evidence that the land involved is largely mountainous and forested. As a
matter of fact, at the time of the hearing, it was conceded that approximately 13,957 hectares of
said land consist of public forest. During the lifetime of Melecio Padilla, only a small portion
thereof was cleared and cultivated under the "kaingin" system, while some portions were used
as grazing land. After his death, his daughter, Maria Padilla, caused the planting of vegetables
and had about forty (40) tenants for the purpose. 27 During the Japanese occupation, Maria
Padilla died. Alipio Alinsunurin and Encarnacion Caballero took possession of the land
approximately in 1950, but they had to abandon the place due to the unsettled peace and order
conditions in the area. In 1955, entry by them was prevented by the Army.
It seems obvious, on the basis of the facts in the record, that neither applicant Paraaque
Investment and Development Corporation nor Alipio Alinsunurin nor the latter's predecessors-ininterest have been "in open, continuous, exclusive, and notorious possession and occupation" of
the property in question, "under a bona fideclaim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title." 28
A mere casual cultivation of portions of the land by the claimant, and the raising thereon of
cattle, do not constitute possession under claim of ownership. In that sense, possession is not
exclusive and notorious so as to give rise to a presumptive grant from the State. 29 While grazing
livestock over land is of course to be considered with other acts of dominion to show
possession, the mere occupancy of land by grazing livestock upon it, without substantial
inclosures or other permanent improvements, is not sufficient to support a claim of title thru
acquisitive prescription. 30 The possession of public land, however long the period may have
extended, never confers title thereto upon the possessor because the statute of limitations with

regard to public 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. 31
Apart from the aforesaid inconclusive evidence of possession to support the applicant's claim of
title, it does not appear that the said property has ever been declared for taxation purposes by
either applicant or applicant's predecessors-in-interest. Thus, the only tax declarations submitted
were those of Mamerto Garcia and Honofre Andrada, et al. (Exhibit "G", Tax Declaration No.
5576, covering an area of 7,340 hectares) and Mamerto Garcia, et al. (Exhibit "H-1", Tax
Declaration No. 5577, over an area of 9,547 hectares) but both were filed only in 1958. The
latter declaration contains an annotation that the property described therein is an unidentified
property, as the declarant failed to identify the same, and it "was only through his insistence" that
it was assessed. Neither applicant Paraaque Investment and Development Corporation nor its
predecessor, Alipio Alinsunurin had submitted any tax declaration supporting its/his claim over
the property. It is true that tax receipts and declarations of ownership for taxation purposes are
not incontrovertible evidence of ownership, but they constitute at least proof that the holder had
a claim of title over the property.
It is obvious that the applicant has failed to submit convincing proof of actual, peaceful and
adverse possession in the concept of owner of the entire area in question during the period
required by law. This is especially true in view of the basic presumption that lands of whatever
classification belong to the State and evidence of a land grant must be "well-nigh
incontrovertible." 32
Even more important, Section 48[b] of CA No. 141, as amended, applies exclusively to public
agricultural land. Forest lands or areas covered with forest are excluded. 33 It is well-settled that
forest land is incapable of registration; and its inclusion in a title, whether such title be one
issued during the Spanish sovereignty or under the present Torrens system of registration,
nullifies the title. 34
Finally, the applicant urges that Proclamation No. 237 recognizes the existence of private
property within the military reservation. It is true that the proclamation states that the same is
subject "to private rights, if any there be", but applicant must prove its private rights over the
property, which said party failed to do. 35 For it is well-settled that, unless the applicant has
shown by clear and convincing evidence that the property in question was ever acquired by the
applicant or his ancestors either by composition title from the Spanish Government or by
possessory information title, or any other means for the acquisition of public lands, the property
must be held to be part of the public domain. 36
WHEREFORE, decision in the above case is hereby rendered:
(1) in G. R. No. L-27594, the petition for certiorari is granted; the order dated March 11, 1967 in
LRC Case No. N-675, LRC Rec. No. N-25545, the decree of registration issued pursuant thereto
(Decree No. 113485 dated March 14, 1967), and Original Certificate of Title No. 0-3151 of the
Registry of Deeds of Nueva Ecija are all declared void; the Registry of Deeds of Nueva Ecija is
ordered to recall and cancel all transfer certificates of title, including owners' duplicates and
mortgagees' copies, if any, arising out of Original Certificate of Title No. 0-3151; the preliminary
injunction issued on June 5, 1967 and the temporary restraining order issued on June 1, 1973
are made final and permanent, with costs against respondents (except respondent Judge); and
(2) in G. R. No. L-28144, the appealed decision is hereby reversed and set aside, and judgment
is rendered dismissing the application for registration. Costs against appellee.
G.R. No. 124292 December 10, 1996
GREGORIO C. JAVELOSA, petitioner,
vs.
COURT OF APPEALS, SPOUSES CORAZON J. DE LEON & MELVIN DE LEON, SPOUSES

KRISTINE SOLINAP & ALFONSO SOLINAP, MARLINA J. BALLEZA, MYRNA J.

SERVANDO, respondents.

PUNO, J.:p
The subject land, with an area of 2,061 square meters, situated in Jaro, Iloilo City, was originally
owned by petitioner Gregorio Javelosa. Sometime in the 70's, petitioner mortgaged said land to
Jesus Jalbuena to secure several loans. Petitioner failed to pay his loans and Jalbuena, as
mortgagee, foreclosed on the land and purchased it as highest bidder at the foreclosure sale.
During the one-year period of redemption, petitioner-mortgagor filed an action against the
mortgagee at the Regional Trial Court (RTC) of Iloilo City to annul the mortgage contracts and
public auction sale (Civil Case No. 16460). 1 He claimed that the mortgage contracts were illegal
and the conduct of the foreclosure sale was irregular.
While the case was pending, the period of redemption prescribed. Consequently, the mortgagee
consolidated title over the land, caused the cancellation of the mortgagor's title and the issuance
of a new title in his name. Thereafter, petitioner obtained an Order 2 from the RTC in Civil Case
No. 16460 restraining the mortgagee from further effecting the foreclosure sale of the property.
In the early part of December 1986, the mortgagee divided the subject land among his married
daughters (private respondents herein). On December 27, 1986, the mortgagee died. He was
substituted by his heirs, private respondents, in the pending RTC case for annulment of
mortgage and foreclosure sale. On January 19, 1987, title to the subject was issued in the
names of private respondents.
In the meantime, the RTC case for annulment of mortgage and foreclosure sale continued to
drag on. On June 1, 1993, private respondents, as registered owners, sent a letter to petitionermortgagor demanding that the vacate the subject premises within ten (10) days from receipt
thereof. Despite receipt of the demand letter on June 4, 1993, petitioner-mortgagor refused to
vacate said lot. Thus, on August 6, 1993, private respondents filed a complaint for illegal
detainer before the Municipal Trial Court (MTC) in Cities, Iloilo City, and sought to eject petitioner
from the premises.
Petitioner, in his Answer, 3 asserted his ownership over the disputed land. He claimed that he
had a TCT in his name but that the mortgagee (father and predecessor-in-interest of private
respondents), in bad faith, was able to cause his title to be cancelled and a new title issued in
his name despite the pendency of the RTC case questioning the award of the subject land to the
mortgagee in the foreclosure proceedings. Thus, petitioner denied he was illegally occupying the
land. He claimed that he was legally entitled to the continued possession thereof by virtue of
pending legal incidents in his RTC case for annulment of mortgage and foreclosure sale, from
which transactions the mortgagee (predecessor-in-interest of private respondents) derived his
title.
The MTC decided the unlawful detainer case in favor of private respondents and ordered
petitioner to vacate the premises and pay reasonable rental. The MTC held that the pendency of
the case for annulment of mortgage in the RTC would not abate the proceedings in the unlawful
detainer case filed before it for the issues in these cases are distinct from each other. 4
Petitioner elevated the case to the RTC. He alleged that the ejectment case was improperly filed
with the MTC for private respondents (plaintiffs therein) should have prayed instead for the
issuance of a writ of possession with the RTC where the case for annulment of mortgage and
foreclosure sale was pending.
Without ruling on the propriety of the filing of the ejectment case before the MTC, the RTC
reversed the MTC decision on a different ground. It held that the complaint was filed out of time
for under Section 1, Rule 70 of the Rules of Court, an unlawful detainer case must be filed within
one year from the time title was issued in private respondents' name, i.e., from January 19,

1987, and not from the last demand to vacate made by private respondents (plaintiffs therein).
Thus, the ejectment case initiated on August 6, 1993 was filed beyond the one-year prescriptive
period. The RTC dismissed the ejectment case. 5
In their appeal to the Court of Appeals, private respondents alleged that the RTC erred in holding
that the complaint for unlawful detainer was filed out of time. The Court of Appeals reversed the
RTC decision and reinstated the decision of the MTC. It held that the complaint for unlawful
detainer was filed on time for the prescriptive period should be counted not from the issuance of
title in the name of plaintiffs (private respondents herein), but from the date of the last demand to
vacate made against the defendant. Moreover, the fact that private respondents were never in
prior physical possession of the subject land is of no moment for prior physical possession is
necessary only in forcible entry cases. The Court of Appeals thus ordered the petitioner
(defendant in the ejectment case) to vacate the premises and pay reasonable rentals. 6
Hence, this petition for review on certiorari.
In this Court, petitioner does not raise the issue regarding the timeliness of the filing of the
ejectment case against him. For the first time, he puts in the issue the nature of the suit filed
against him. He contends that the complaint filed before the MTC is not an unlawful detainer suit
but one for accion publiciana cognizable by the RTC. Petitioner argues that the reading of the
complaint reveals there was no allegation as to how entry on the land was made by petitionermortgagor or when the latter unlawfully took possession of said land. Citing the case ofSarona
v. Villegas, 7 petitioner contends that the omission of these jurisdictional facts stripped the MTC
of jurisdiction over the case.
The petition is devoid of merit.
It is settled that jurisdiction of courts over the subject matter of the litigation is determined by the
allegations in the complaint. It is equally settled that an error in jurisdiction can be raised at any
time and even for the first time on appeal. 8
The issue of jurisdiction in the case at bar depends on the nature of the case filed by private
respondents in the MTC. If it is an unlawful detainer case, the action was properly filed with the
MTC. However, if the suit is one foraccion publiciana, jurisdiction is with the RTC and the
complaint should be dismissed. To resolve the issue, we should examine the specific allegations
made by private respondents in their complaint. The complaint for unlawful detainer 9 contained
the following material allegations, viz:
xxx xxx xxx
2. Plaintiffs (private respondents) are the registered owners of a parcel of land . . . covered by
Transfer
Certificate
of
Title
No.
T-74417 . . .;
3. Defendant (petitioner-mortgagor) has been illegally occupying the above described property
without the consent of the herein plaintiffs, thus unlawfully withholding possession of the same
from them who are the owners and the ones entitled to the physical possession thereof;
4. On June 1, 1993, plaintiffs . . . sent a letter dated May 26, 1993 to the defendant demanding
that he vacate the premises within ten days from receipt of the said letter . . .;
xxx xxx xxx
6. The said letter was received by the defendant on June 4, 1993 . . .;
xxx xxx xxx
8. Having received the demand to vacate the property in question, defendant is now unlawfully
withholding possession of the . . . property from the plaintiffs who are entitled to the physical
possession thereof;

9. As a consequence of the refusal of the defendant to vacate the premises . . . the plaintiffs
were constrained to file this action for illegal detainer against him in order to take away the
physical possession thereof from them and to place them in de facto possession of the said
property;

registered owners. An action for unlawful detainer may be filed when possession by a landlord,
vendor, vendee or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of their right to hold possession, by virtue
of a contract, express or implied. 13

xxx xxx xxx

Under the Rules, if the mortgaged property is not redeemed within one year from the foreclosure
sale, the purchaser at public auction is entitled to possession of the property. 14 To obtain
possession, the vendee or purchaser may either ask for a writ of possession or bring an
appropriate independent action, such as a suit for ejectment, which private respondents did. The
RTC case assailing the public auction sale of the property and seeking annulment of mortgages
did not preclude the filing of an ejectment case against petitioner. 15 We have consistently ruled
that the pendency of an action for annulment of sale and reconveyance (which necessarily
involves the issue of ownership) may not be successfully pleaded in abatement of an action for
ejectment, the issue in the latter being merely physical possession. 16 To be sure, private
respondents' most effective remedy was to file a separate action for unlawful detainer against
petitioner. 17 They cannot ask for a writ of possession from the RTC where the case for
annulment of mortgage and foreclosure sale is pending because after the mortgagee was able
to consolidate his title on the land and a new title issued in his name, petitioner was able to
obtain an Order 18 from the RTC directing the mortgagee, (predecessor-in-interest of private
respondents) to desist from further enforcing the foreclosure proceedings.

Clearly, private respondents (as plaintiffs therein) alleged in their complaint that they are the
registered owners of the subject land and therefore, entitled to possession thereof; that
petitioners were illegally occupying the premises without their consent and thus unlawfully
withholding possession from them; and, despite receipt of their demand to vacate the premises,
petitioner refused to leave the property. On the face of the complaint, it also appears that private
respondents were seeking to recover merely the physical possession or possession de factoof
the subject land. Private respondents did not allege the incidents respecting the mortgage of the
land and the pending RTC case questioning the mortgage contract as the issue involved therein
is ownership which has no place in an ejectment case. In fine, the allagations in the complaint
make out a case for unlawful detainer. We have ruled in a long line of cases 10 that "in an action
for unlawful detainer, a simple allegation that defendant is unlawfully withholding possession
from plaintiff is . . . sufficient for the words "unlawfully withholding" imply possession on the part
of defendant, which was legal in the beginning, having no other source than a contract, express
or implied, possession which has later expired as a right and is being withheld by defendant."
Thus, in the case at bar, private respondents' allegation in their complaint that petitioner was
unlawfully withholding possession of the land from them is sufficient to make out a case for
unlawful detainer.
In Co Tiamco v. Diaz, 11 the Court emphasized that "the principle underlying the brevity and
simplicity of pleadings in forcible entry and unlawful detainer cases rests upon considerations of
public policy. Ejectment cases are summary in nature for they involve perturbation of social order
which must be restored as promptly as possible and, accordingly, technicalities or details of
procedure should be carefully avoided."
The ruling in the Sarona case 12 cited by petitioner i.e., that a complaint for unlawful detainer
should alleged when and how entry on the land was made by the defendant, finds no application
to the case at bar. In Sarona, the main issue was the timeliness of the filing of the complaint
before the MTC. In forcible entry cases, the prescriptive period is counted from the date of
defendant's actual entry on the land; in unlawful detainer, from the date of the last demand to
vacate. Hence, to determine whether the case was filed on time, there was a necessity to
ascertain whether the complaint was one for forcible entry or for unlawful detainer. In light of
these consideration, the Court ruled that since the main distinction between the two actions is
when and how defendant entered the land, the determinative facts should be alleged in the
complaint. Thus, in Sarona, the jurisdiction of the MTC over the complaint was never issue for
whether the complaint was one for forcible entry or unlawful detainer, the MTC had jurisdiction
over it. The case at bar is different for at issue is the jurisdiction of the MTC over the unlawful
detainer case for petitioner (defendant therein) asserts that the case is one for accion
publicianacognizable by the RTC.
Petitioner likewise insists that he is entitled to the physical possession of the property since he
has been in actual, continuous possession thereof as owner-mortgagor. He contends that
private respondents have never been in actual physical possession of the land since they have
not prayed for the issuance of a writ of possession with the RTC where the case assailing the
sale of the land was pending and where the parties' adverse claims of ownership are being
litigated.
We find petitioner's contentions untenable.
Again, it is settled that prior physical possession is indispensable only in actions for forcible entry
but not in unlawful detainer. Since we have ruled that the MTC case filed against petitioner is
one for unlawful detainer, petitioner's prior possession of the land is of no moment. Private
respondents are entitled to its passession from the time title was issued in their favor as

The case of Joven v. Court of Appeals 19 cited by petitioner is not on all fours with the case at
bar. In Joven, DBP as mortgagee was not able to consolidate its title over the foreclosed land
nor cause the cancellation of title in the mortgagor's name. Although the title was still in the
name of the mortgagor, DBP sold the land to private respondents and the latter, without first
securing a court order, took the law into their own hands and entered said land. Hence, it was
the mortgagor who filed and successfully maintained an action for forcible entry against private
respondents, the transferees of the mortgagee.
The factual mould of the case at bar is different. The mortgagee (predecessor-in-interest of
private respondents) was able to consolidate his ownership over the foreclosed land, cause the
cancellation of title in the name of petitioner-mortgagor and the issuance of a new title in his own
name. It was this title that he passed on to his daughters, private respondents herein. As
aforestated, a restraining order was issued by the RTC where the case for annulment of
foreclosure sale is pending after the mortgagee had consolidated his ownership over the land,
hence, private respondents were left with no choice but to file a separate and independent
action for unlawful detainer to recover physical possession of the property. Unlike in the Joven
case, private respondents did not take the law into their own hands and entered the property
without the benefit of a court order. They sought the aid of the court precisely to settle the issue
of physical possession or possession de facto of the land when they filed the ejectment case
with the MTC.
We find that private respondents have adequately proved that they are entitled to possess the
subject land as the registered owners thereof. The age-old rule is that the person who has a
torrens title over a land is entitled to possession thereof. 20 Except for the bare claim that the title
of private respondents was obtained in bad faith, petitioner has pointed to no right to justify his
continued possession of the subject property.
Be that as it may, we reiterate the rule that the award of possession de facto over the subject
land to private respondents would not constitute res judicata as to the issue of ownership
thereof, which issue is still being litigated before the RTC of Iloilo City where the case for
annulment of mortgages and foreclosure proceeding is pending.
IN VIEW WHEREOF, the petitioner is DENIED. The Decision of the Court of Appeals, dated
January 17, 1996, is AFFIRMED in toto. No costs.
SO ORDERED.
G.R. No. L-16995

October 28, 1968

JULIO
vs.
JAIME L. LOOT, ET AL., oppositors-appellants.

LUCERO, movant-appellee,

Ramon Gonzales for movant-appellee.

Jaime L. Loot for and in his own behalf as oppositor-appellant.
FERNANDO, J.:
The order of the Court of First Instance of Iloilo, the former Judge Wenceslao L. Fernan
presiding, dated September 21, 1959, now on appeal before this Court, speaks to this effect:
"Regarding the writ of possession, once the final decree has been issued the issuance of a writ
of possession is only a matter of course if nothing in the past has been issued in favor of the
registered owner. There is no period of prescription as to the issuance of a writ of possession,
and inasmuch as the final decree has already been entered, it follows that a writ of possession
should be issued in favor of the registered owner."1
Accordingly, it granted a writ of possession in favor of movant, now appellee, Julio Lucero. There
was an opposition on the part of oppositors, all surnamed Loot, now appellants. The lower court
failed to see merit in the opposition interposed. It explained why: "The opposition interposed by
the oppositors to the effect that there are defects in the reconstitution of the records and that the
motion is not under oath is trivial in its nature and consequently untenable." 2 Accordingly, the writ
of possession, as prayed for, was issued.
There was an urgent motion to quash the writ of possession filed by the oppositors on
September 25, 1959,3followed by a motion for reconsideration on October 10, 1959,4 which was
denied in an order of October 23, 1959. 5 As set forth in such order of denial: "After weighing the
arguments adduced by the movant represented by Atty. Gonzales and the oppositor represented
by Atty. Loot, this Court adheres to the previous ruling that inasmuch as no writ of possession
has been issued in this case, it is the ministerial duty of this Court to issue one in compliance of
the provisions of Act 496 as amended." There was a second motion for reconsideration filed by
oppositors on November 3, 1959,6 which was denied in an order of December 10, 1959.7 Not
satisfied, there was still another motion for reconsideration of the above order filed by oppositors
on December 28, 1959,8 which similarly met the same fate, an order of denial being issued on
February 20, 1960.9 The appeal was taken direct to us.
The sore issue, therefore, is whether on the above facts, the order granting the writ of
possession was in accordance with law. The answer must be in the affirmative. This appeal
cannot prosper.
No other view would be compatible with the pertinent provision of the Land Registration Act, 10 as
uniformly interpreted by this Court. As was noted in the order of September 21, 1959, there was
a final decree in a land registration case which arose from a decision promulgated in 1938, the
final decree being issued on October 29, 1941. It was not incorrect for the lower court to state,
therefore, that "the issuance of a writ of possession is only a matter of course if nothing in the
past has been issued in favor of the registered owner." 11 It is equally true, as likewise mentioned
therein, that there is "no period of prescription as to the issuance of a writ of
possession, ..."12In Pasay Estate Co. v. Del Rosario,13 it has been made clear that the purpose of
the statutory provision empowering the then Court of Land Registration, now the ordinary courts
of first instance, to enforce its orders, judgments or decrees in the same way that the judiciary
does is so that the winning party could be placed in possession of the property covered by such
decree. Thereby, there would be an avoidance of the inconvenience and the further delay to
which a successful litigant would be subjected if he were compelled "to commence other actions
in other courts for the purpose of securing the fruits of his victory."
There was a restatement of the above principle in Demorar v. Ibaez,14 the closest in period of
time to the challenged order of the lower court. Thus: "We have heretofore held that a writ of
possession may be issued not only against the person who has been defeated in a registration

case but also against anyone adversely occupying the land or any portion thereof during the
land registration proceedings ... The issuance of the decree of registration is part of the
registration proceedings. In fact, it is supposed to end the said proceedings. Consequently, any
person unlawfully and adversely occupying said lot at any time up to the issuance of the final
decree, may be subject to judicial ejectment by means of a writ of possession and it is the duty
of the registration court to issue said writ when asked for by the successful claimant." As a
matter of fact, in a 1948 decision,15 it was held by us that "the fact that the petitioners have
instituted, more than one year after the decree of registration had been issued, an ordinary
action with the Court of First Instance attacking the validity of the decree on the ground of fraud,
is not a bar to the issuance of the writ of possession applied for by the registered owners."
A few months after the issuance of such a challenged order of September 21, 1959, Marcelo v.
Mencias was decided,16 where this Court went so far as to hold that "if the writ of possession
issued in a land registration proceeding implies the delivery of possession of the land to the
successful litigant therein, ... a writ of demolition must, likewise, issue, especially considering
that the latter writ is but a complement of the former which, without said writ of demolition, would
be ineffective."
It is clear, therefore, to repeat, that on the facts as found, the validity of the challenged order
cannot be impugned. It is equally clear that this being a direct appeal to us, no questions of fact
may be raised. As was held recently in Perez v. Araneta:17 "Nothing is better settled than that
where the correctness of the findings of fact of the lower court are assailed, the Court of Appeals
is the proper forum. If resort be had directly to us, then appellant must be deemed to have
waived the opportunity otherwise his to inquire into such findings and to limit himself to disputing
the correctness of the law applied."
The problem thus confronting oppositors-appellants in bringing the matter direct to us was to
show that the above two-page order on the meager but sufficient facts as found, was vitiated by
error or errors in law. It was far from easy, therefore, considering as above shown that on the
authority of applicable decisions, the lower court was left with no choice but to issue the writ of
possession sought.
Resolute and undaunted, oppositors did their best to accomplish a task formidable in its
complexity. It seemed they overdid it. They assigned twenty-one errors a great many of them
factual, and, therefore, not for us to consider, and the remaining, except the last, far from
decisive in view of the rather settled state of the law concerning the issuance of a writ of
possession. Nor did the twenty-first error assigned suffice to call for a reversal, as will be more
fully explained. That is why, as earlier stated, the appeal was doomed to futility.
It would not be amiss, though, to discuss even briefly one of them, the fourteenth. Invoking three
of our previous decisions,18 they would impugn the issuance of the writ of possession on the
ground that they were not oppositors and defeated parties in the land registration proceeding.
They would ignore the fact, however, that in the above decisions relied upon, the basis for the
impropriety of issuing a writ of possession was that the parties adversely affected entered the
property in question after the issuance of the decree. There is nothing in the challenged order
that such is the case here. Thus, they would raise a factual issue a matter not properly
cognizable by us.
A reminder may not be out of place. The apparent ease with which oppositors-appellants could
conjure up so many alleged errors, while it may be a tribute to their ingenuity in making a twopage order yield so many instances of the rankest violation of legal precepts, hardly contributes
to the persuasiveness of their brief. As a matter of fact, the suspicion could be legitimately
entertained that in thus attempting to paint the highly unrealistic picture of a terse and brief order
being so sadly riddled with errors, oppositors- appellants were trying in vain to bolster what
inherently was a weak case.
That is all that needs be said about this appeal except for the disposition of the twenty-first error
assigned, referring to the existence of a pending case between the parties for
reconveyance.19 There was no denial in the brief for movant-appellee that such a case was then

pending at the time the respective briefs were filed. What is decided here cannot affect whatever
final decision might possibly have been rendered by this time in the aforesaid reconveyance
action. Nonetheless, the mere fact that such suit was then pending did not oust the lower court
of its jurisdiction to issue the writ of possession. As stated by our present Chief Justice in Agreda
v. Rodriguez:20 "Besides, it is clear that respondent Judge had jurisdiction to pass upon the
motion of Santiago Agreda for the issuance of a writ of possession. Whether or not the motion
should have been denied, in view of institution of said Civil Case No. 6267, is a matter that does
not affect said jurisdiction."
WHEREFORE, the order of September 21, 1959, granting the writ of possession in favor of
movant-appellee, and the orders of October 23, 1959, December 10, 1959 and February 20,
1960, denying the reconsideration thereof, are affirmed. With costs against oppositorsappellants.

G.R. No. L-28790

April 29, 1968

ANTONIO H. NOBLEJAS, as Commissioner of Land Registration, petitioner,

vs.
CLAUDIO TEEHANKEE, as Secretary of Justice, and RAFAEL M. SALAS, as Executive
Secretary,respondents.
Leandro
Sevilla,
Ramon
C.
Aquino
and
Lino
Claudio Teehankee for and in his own behalf as respondent.

M.

Patajo

for

petitioner.

REYES, J.B.L., Actg. C.J.:

Petition for a writ of prohibition with preliminary injunction to restrain the Secretary of Justice
from investigating the official actuations of the Commissioner of Land Registration, and to
declare inoperative his suspension by the Executive Secretary pending investigation.
The facts are not in dispute. Petitioner Antonio H. Noblejas is the duly appointed, confirmed and
qualified Commissioner of Land Registration, a position created by Republic Act No. 1151. By
the terms of section 2 of said Act, the said Commissioner is declared "entitled to the same
compensation, emoluments and privileges as those of a Judge of the Court of First Instance."
The appropriation laws (Rep. Acts 4642, 4856 and 5170) in the item setting forth the salary of
said officer, use the following expression:
1. One Land Registration Commissioner with the rank and privileges of district judge
P19,000.00.
On March 7, 1968, respondent Secretary of Justice coursed to the petitioner a letter requiring
him to explain in writing not later than March 9, 1968 why no disciplinary action should be taken
against petitioner for "approving or recommending approval of subdivision, consolidation and
consolidated-subdivision plans covering areas greatly in excess of the areas covered by the
original titles." Noblejas answered and apprised the Secretary of Justice that, as he enjoyed the
rank, privileges, emoluments and compensation of a Judge of the Court of First Instance, he
could only be suspended and investigated in the same manner as a Judge of the Courts of First
Instance, and, therefore, the papers relative to his case should be submitted to the Supreme
Court, for action thereon conformably to section 67 of the Judiciary Act (R. A. No. 296) and
Revised Rule 140 of the Rules of Court.
On March 17, 1968, petitioner Noblejas received a communication signed by the Executive
Secretary, "by authority of the President", whereby, based on "finding that a prima facie case
exists against you for gross negligence and conduct prejudicial to the public interest", petitioner
was "hereby suspended, upon receipt hereof, pending investigation of the above charges."
On March 18, 1968, petitioner applied to this Court, reiterating the contentions advanced in his
letter to the Secretary of Justice, claiming lack of jurisdiction and abuse of discretion, and

praying for restraining writs. In their answer respondents admit the facts but denied that
petitioner, as Land Registration Commissioner, exercises judicial functions, or that the petitioner
may be considered a Judge of First Instance within the purview of the Judiciary Act and Revised
Rules of Court 140; that the function of investigating charges against public officers is
administrative or executive in nature; that the Legislature may not charge the judiciary with nonjudicial functions or duties except when reasonably incidental to the fulfillment of judicial duties,
as it would be in violation of the principle of the separation of powers.
Thus, the stark issue before this Court is whether the Commissioner of Land Registration may
only be investigated by the Supreme Court, in view of the conferment upon him by the Statutes
heretofore mentioned (Rep. Act 1151 and Appropriation Laws) of the rank and privileges of a
Judge of the Court of First Instance.
First to militate against petitioner's stand is the fact that section 67 of the Judiciary Act providing
for investigation, suspension or removal of Judges, specifically recites that "No District
Judge shall be separated or removed from office by the President of the Philippines unless
sufficient cause shall exist in the judgment of the Supreme Court . . ." and it is nowhere claimed,
much less shown, that the Commissioner of Land Registration is a District Judge, or in fact a
member of the Judiciary at all.
In the second place, petitioner's theory that the grant of "privileges of a Judge of First Instance"
includes by implication the right to be investigated only by the Supreme Court and to be
suspended or removed upon its recommendation, would necessarily result in the same right
being possessed by a variety of executive officials upon whom the Legislature had
indiscriminately conferred the same privileges. These favoured officers include (a) the Judicial
Superintendent of the Department of Justice (Judiciary Act, sec. 42); (b) the Assistant Solicitors
General, seven in number (Rep. Act No. 4360); (c) the City Fiscal of Quezon City (R.A. No.
4495); (d) the City Fiscal of Manila (R. A. No. 4631) and (e) the Securities and Exchange
Commissioner (R. A. No. 5050, s. 2). To adopt petitioner's theory, therefore, would mean placing
upon the Supreme Court the duty of investigating and disciplining all these officials, whose
functions are plainly executive, and the consequent curtailment by mere implication from the
Legislative grant, of the President's power to discipline and remove administrative officials who
are presidential appointees, and which the Constitution expressly placed under the President's
supervision and control (Constitution, Art. VII, sec. 10[i]).
Incidentally, petitioner's stand would also lead to the conclusion that the Solicitor General,
another appointee of the President, could not be removed by the latter, since the Appropriation
Acts confer upon the Solicitor General the rank and privileges of a Justice of the Court of
Appeals, and these Justices are only removable by the Legislature, through the process of
impeachment (Judiciary Act, sec. 24, par. 2).
In our opinion, such unusual corollaries could not have been intended by the Legislature when it
granted these executive officials the rank and privileges of Judges of First Instance. This
conclusion gains strength when account is taken of the fact that in the case of the Judges of the
Court of Agrarian Relations and those of the Court of Tax Appeals, the organic statutes of said
bodies (Republic Act 1267, as amended by Act 1409; Rep. Act No. 1125) expressly provide that
they are to be removed from office for the same causes and in the same mannerprovided by law
for Judges of First Instance", or "members of the judiciary of appellate rank". The same is true of
Judges of the Court of Agrarian Relations (Comm. Act No. 103) and of the Commissioner of
Public Service (Public Service Act, Sec. 3). It is thereby shown that where the legislative design
is to make the suspension or removal procedure prescribed for Judges of First Instance
applicable to other officers, provision to that effect is made in plain and unequivocal language.
But the more fundamental objection to the stand of petitioner Noblejas is that, if the Legislature
had really intended to include in the general grant of "privileges" or "rank and privileges of
Judges of the Court of First Instance" the right to be investigated by the Supreme Court, and to
be suspended or removed only upon recommendation of that Court, then such grant of
privileges would be unconstitutional, since it would violate the fundamental doctrine of
separation of powers, by charging this court with the administrative function of supervisory

control over executive officials, and simultaneously reducing pro tanto the control of the Chief
Executive over such officials.
Justice Cardozo ruled in In re Richardson et al., Connolly vs. Scudder (247 N. Y. 401, 160 N. E.
655), saying:
There is no inherent power in the Executive or Legislature to charge the judiciary with
administrative functions except when reasonably incidental to the fulfillment of judicial duties.
The United States Supreme Court said in Federal Radio Commission vs. General Electric Co., et
al., 281 U.S. 469, 74 Law. Ed., 972,
But this court cannot be invested with jurisdiction of that character, whether for purposes of
review or otherwise. It was brought into being by the judiciary article of the Constitution, is
invested with judicial power only and can have no jurisdiction other than of cases and
controversies falling within the classes enumerated in that article. It cannot give decisions which
are merely advisory; nor can it exercise or participate in the exercise of functions which are
essentially legislative or administrative. Keller v. Potomac Electric Power Co., supra (261 U.S.
444, 67 L. ed. 736, 43 Sup. Ct. Rep. 445) and cases cited; Postum Cereal Co. vs. California Fig
Nut Co. supra (272 U.S. 700, 701, 71 L. ed. 481, 47 Sup. Ct. Rep. 284); Liberty Warehouse Co.
v. Grannis, 273 U.S. 70, 74, 71 L. ed. 541, 544, 47 Sup. Ct. Rep. 282; Willing v. Chicago
Auditorium Asso. 277 U.S. 274, 289, 72 L. ed. 880, 884, 48 Sup. Ct. Rep. 507; Ex parte Bakelite
Corp. 279 U.S. 438, 449, 73 L. ed. 789, 793, 49 Sup. Ct. Rep. 411. (Federal Radio Commission
v. General Electric Company, 281 U.S. 469, 74 L. ed. 972.) (Emphasis supplied.)

But even granting that the resolution of consultas by the Register of Deeds should constitute a
judicial (or more properly quasi judicial) function, analysis of the powers and duties of the Land
Registration Commissioner under Republic Act No. 1151, sections 3 and 4, will show that the
resolution of consultas are but a minimal portion of his administrative or executive functions and
merely incidental to the latter.
Conformably to the well-known principle of statutory construction that statutes should be given,
whenever possible, a meaning that will not bring them in conflict with the Constitution, 2 We are
constrained to rule that the grant by Republic Act 1151 to the Commissioner of Land Registration
of the "same privileges as those of a Judge of the Court of First Instance" did not include, and
was not intended to include, the right to demand investigation by the Supreme Court, and to be
suspended or removed only upon that Court's recommendation; for otherwise, the said grant of
privileges would be violative of the Constitution and be null and void. Consequently, the
investigation and suspension of the aforenamed Commissioner pursuant to sections 32 and 34
of the Civil Service Law (R. A. 2260) are neither abuses of discretion nor acts in excess of
jurisdiction.
WHEREFORE, the writs of prohibition and injunction applied for are denied, and the petition is
ordered dismissed. No costs.

G.R. No. L-30173 September 30, 1971

In this spirit, it has been held that the Supreme Court of the Philippines and its members should
not and cannotbe required to exercise any power or to perform any trust or to assume any duty
not pertaining to or connected with the administration of judicial functions; and a law requiring
the Supreme Court to arbitrate disputes between public utilities was pronounced void in Manila
Electric Co. vs. Pasay Transportation Co. (57 Phil. 600).1wph1.t

GAVINO
A.
TUMALAD
and
GENEROSA
R.
TUMALAD, plaintiffs-appellees,
vs.
ALBERTA VICENCIO and EMILIANO SIMEON, defendants-appellants.

Petitioner Noblejas seeks to differentiate his case from that of other executive officials by
claiming that under Section 4 of Republic Act No. 1151, he is endowed with judicial functions.
The section invoked runs as follows:

Jose Q. Calingo for defendants-appellants.

Sec. 4. Reference of doubtful matters to Commissioner of Land Registration. When the

Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be
made in pursuance of any deed, mortgage, or other instrument presented to him for registration,
or where any party in interest does not agree with the Register of Deeds with reference to any
such matter, the question shall be submitted to the Commissioner of Land Registration either
upon the certification of the Register of Deeds, stating the question upon which he is in doubt, or
upon the suggestion in writing by the party in interest; and thereupon the Commissioner, after
consideration of the matter shown by the records certified to him, and in case of registered
lands, after notice to the parties and hearing, shall enter an order prescribing the step to be
taken or memorandum to be made. His decision in such cases shall be conclusive and binding
upon all Registers of Deeds: Provided, further, That, when a party in interest disagrees with the
ruling or resolution of the Commissioner and the issue involves a question of law, said decision
may be appealed to the Supreme Court within thirty days from and after receipt of the notice
thereof.
Serious doubt may well be entertained as to whether the resolution of a consulta by a Register
of Deeds is a judicial function, as contrasted with administrative process. It will be noted that by
specific provision of the section, the decision of the Land Registration Commissioner "shall be
conclusive and binding upon all Registers of Deeds" alone, and not upon other parties. This
limitation1 in effect identifies the resolutions of the Land Registration Commissioner with those of
any other bureau director, whose resolutions or orders bind his subordinates alone. That the
Commissioner's resolutions are appealable does not prove that they are not administrative; any
bureau director's ruling is likewise appealable to the corresponding department head.

Castillo & Suck for plaintiffs-appellees.

REYES, J.B.L., J.:

Case certified to this Court by the Court of Appeals (CA-G.R. No. 27824-R) for the reason that
only questions of law are involved.
This case was originally commenced by defendants-appellants in the municipal court of Manila
in Civil Case No. 43073, for ejectment. Having lost therein, defendants-appellants appealed to
the court a quo (Civil Case No. 30993) which also rendered a decision against them, the
dispositive portion of which follows:
WHEREFORE, the court hereby renders judgment in favor of the plaintiffs and against the
defendants, ordering the latter to pay jointly and severally the former a monthly rent of P200.00
on the house, subject-matter of this action, from March 27, 1956, to January 14, 1967, with
interest at the legal rate from April 18, 1956, the filing of the complaint, until fully paid, plus
attorney's fees in the sum of P300.00 and to pay the costs.
It appears on the records that on 1 September 1955 defendants-appellants executed a chattel
mortgage in favor of plaintiffs-appellees over their house of strong materials located at No. 550
Int. 3, Quezon Boulevard, Quiapo, Manila, over Lot Nos. 6-B and 7-B, Block No. 2554, which
were being rented from Madrigal & Company, Inc. The mortgage was registered in the Registry
of Deeds of Manila on 2 September 1955. The herein mortgage was executed to guarantee a
loan of P4,800.00 received from plaintiffs-appellees, payable within one year at 12% per annum.
The mode of payment was P150.00 monthly, starting September, 1955, up to July 1956, and the
lump sum of P3,150 was payable on or before August, 1956. It was also agreed that default in

the payment of any of the amortizations, would cause the remaining unpaid balance to
becomeimmediately due and Payable and
the Chattel Mortgage will be enforceable in accordance with the provisions of Special Act No.
3135, and for this purpose, the Sheriff of the City of Manila or any of his deputies is hereby
empowered and authorized to sell all the Mortgagor's property after the necessary publication in
order to settle the financial debts of P4,800.00, plus 12% yearly interest, and attorney's fees... 2
When defendants-appellants defaulted in paying, the mortgage was extrajudicially foreclosed,
and on 27 March 1956, the house was sold at public auction pursuant to the said contract. As
highest bidder, plaintiffs-appellees were issued the corresponding certificate of sale. 3 Thereafter,
on 18 April 1956, plaintiffs-appellant commenced Civil Case No. 43073 in the municipal court of
Manila, praying, among other things, that the house be vacated and its possession surrendered
to them, and for defendants-appellants to pay rent of P200.00 monthly from 27 March 1956 up
to the time the possession is surrendered. 4 On 21 September 1956, the municipal court
rendered its decision
... ordering the defendants to vacate the premises described in the complaint; ordering further to
pay monthly the amount of P200.00 from March 27, 1956, until such (time that) the premises is
(sic) completely vacated; plus attorney's fees of P100.00 and the costs of the suit. 5
Defendants-appellants, in their answers in both the municipal court and court a quo impugned
the legality of the chattel mortgage, claiming that they are still the owners of the house; but they
waived the right to introduce evidence, oral or documentary. Instead, they relied on their
memoranda in support of their motion to dismiss, predicated mainly on the grounds that: (a) the
municipal court did not have jurisdiction to try and decide the case because (1) the issue
involved, is ownership, and (2) there was no allegation of prior possession; and (b) failure to
prove prior demand pursuant to Section 2, Rule 72, of the Rules of Court. 6
During the pendency of the appeal to the Court of First Instance, defendants-appellants failed to
deposit the rent for November, 1956 within the first 10 days of December, 1956 as ordered in the
decision of the municipal court. As a result, the court granted plaintiffs-appellees' motion for
execution, and it was actually issued on 24 January 1957. However, the judgment regarding the
surrender of possession to plaintiffs-appellees could not be executed because the subject house
had been already demolished on 14 January 1957 pursuant to the order of the court in a
separate civil case (No. 25816) for ejectment against the present defendants for non-payment of
rentals on the land on which the house was constructed.

(a) Defendants-appellants mortgagors question the jurisdiction of the municipal court from which
the case originated, and consequently, the appellate jurisdiction of the Court of First Instance a
quo, on the theory that the chattel mortgage is void ab initio; whence it would follow that the
extrajudicial foreclosure, and necessarily the consequent auction sale, are also void. Thus, the
ownership of the house still remained with defendants-appellants who are entitled to possession
and not plaintiffs-appellees. Therefore, it is argued by defendants-appellants, the issue of
ownership will have to be adjudicated first in order to determine possession. lt is contended
further that ownership being in issue, it is the Court of First Instance which has jurisdiction and
not the municipal court.
Defendants-appellants predicate their theory of nullity of the chattel mortgage on two grounds,
which are: (a) that, their signatures on the chattel mortgage were obtained through fraud, deceit,
or trickery; and (b) that the subject matter of the mortgage is a house of strong materials, and,
being an immovable, it can only be the subject of a real estate mortgage and not a chattel
mortgage.
On the charge of fraud, deceit or trickery, the Court of First Instance found defendantsappellants' contentions as not supported by evidence and accordingly dismissed the
charge, 8 confirming the earlier finding of the municipal court that "the defense of ownership as
well as the allegations of fraud and deceit ... are mere allegations." 9
It has been held in Supia and Batiaco vs. Quintero and Ayala 10 that "the answer is a mere
statement of the facts which the party filing it expects to prove, but it is not evidence; 11 and
further, that when the question to be determined is one of title, the Court is given the authority to
proceed with the hearing of the cause until this fact is clearly established. In the case of Sy vs.
Dalman, 12 wherein the defendant was also a successful bidder in an auction sale, it was likewise
held by this Court that in detainer cases the aim of ownership "is a matter of defense and raises
an issue of fact which should be determined from the evidence at the trial." What determines
jurisdiction are the allegations or averments in the complaint and the relief asked for. 13
Moreover, even granting that the charge is true, fraud or deceit does not render a contract
void ab initio, and can only be a ground for rendering the contract voidable or annullable
pursuant to Article 1390 of the New Civil Code, by a proper action in court. 14 There is nothing on
record to show that the mortgage has been annulled. Neither is it disclosed that steps were
taken to nullify the same. Hence, defendants-appellants' claim of ownership on the basis of a
voidable contract which has not been voided fails.

The motion of plaintiffs for dismissal of the appeal, execution of the supersedeas bond and
withdrawal of deposited rentals was denied for the reason that the liability therefor was
disclaimed and was still being litigated, and under Section 8, Rule 72, rentals deposited had to
be held until final disposition of the appeal. 7

It is claimed in the alternative by defendants-appellants that even if there was no fraud, deceit or
trickery, the chattel mortgage was still null and void ab initio because only personal properties
can be subject of a chattel mortgage. The rule about the status of buildings as immovable
property is stated in Lopez vs. Orosa, Jr. and Plaza Theatre Inc., 15 cited in Associated
Insurance Surety Co., Inc. vs. Iya, et al. 16 to the effect that

On 7 October 1957, the appellate court of First Instance rendered its decision, the dispositive
portion of which is quoted earlier. The said decision was appealed by defendants to the Court of
Appeals which, in turn, certified the appeal to this Court. Plaintiffs-appellees failed to file a brief
and this appeal was submitted for decision without it.

... it is obvious that the inclusion of the building, separate and distinct from the land, in the
enumeration of what may constitute real properties (art. 415, New Civil Code) could only mean
one thing that a building is by itself an immovable property irrespective of whether or not said
structure and the land on which it is adhered to belong to the same owner.

Defendants-appellants submitted numerous assignments of error which can be condensed into

two questions, namely: .

Certain deviations, however, have been allowed for various reasons. In the case of Manarang
and Manarang vs. Ofilada, 17 this Court stated that "it is undeniable that the parties to a contract
may by agreement treat as personal property that which by nature would be real property",
citing Standard Oil Company of New York vs. Jaramillo. 18 In the latter case, the mortgagor
conveyed and transferred to the mortgagee by way of mortgage "the following
described personal property."19 The "personal property" consisted of leasehold rights and a
building. Again, in the case of Luna vs. Encarnacion, 20 the subject of the contract designated as
Chattel Mortgage was a house of mixed materials, and this Court hold therein that it was a valid
Chattel mortgage because it was so expressly designated and specifically that the property
given as security "is a house of mixed materials, which by its very nature is considered personal
property." In the later case of Navarro vs. Pineda, 21 this Court stated that

(a) Whether the municipal court from which the case originated had jurisdiction to adjudicate the
same;
(b) Whether the defendants are, under the law, legally bound to pay rentals to the plaintiffs
during the period of one (1) year provided by law for the redemption of the extrajudicially
foreclosed house.
We will consider these questions seriatim.

The view that parties to a deed of chattel mortgage may agree to consider a house as personal
property for the purposes of said contract, "is good only insofar as the contracting parties are
concerned. It is based, partly, upon the principle of estoppel" (Evangelista vs. Alto Surety, No. L11139, 23 April 1958). In a case, a mortgaged house built on a rented land was held to be a
personal property, not only because the deed of mortgage considered it as such, but also
because it did not form part of the land (Evangelists vs. Abad, [CA]; 36 O.G. 2913), for it is now
settled that an object placed on land by one who had only a temporary right to the same, such
as the lessee or usufructuary, does not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co., Inc. vs. Castillo, et al., 61 Phil. 709). Hence,
if a house belonging to a person stands on a rented land belonging to another person, it may be
mortgaged as a personal property as so stipulated in the document of mortgage. (Evangelista
vs. Abad, Supra.) It should be noted, however that the principle is predicated on statements by
the owner declaring his house to be a chattel, a conduct that may conceivably estop him from
subsequently claiming otherwise. (Ladera vs. C.N. Hodges, [CA] 48 O.G. 5374): 22
In the contract now before Us, the house on rented land is not only expressly designated as
Chattel Mortgage; it specifically provides that "the mortgagor ... voluntarily CEDES, SELLS and
TRANSFERS by way of Chattel Mortgage 23 the property together with its leasehold rights over
the lot on which it is constructed and participation ..." 24Although there is no specific statement
referring to the subject house as personal property, yet by ceding, selling or transferring a
property by way of chattel mortgage defendants-appellants could only have meant to convey the
house as chattel, or at least, intended to treat the same as such, so that they should not now be
allowed to make an inconsistent stand by claiming otherwise. Moreover, the subject house stood
on a rented lot to which defendats-appellants merely had a temporary right as lessee, and
although this can not in itself alone determine the status of the property, it does so when
combined with other factors to sustain the interpretation that the parties, particularly the
mortgagors, intended to treat the house as personalty. Finally unlike in the Iya cases, Lopez vs.
Orosa, Jr. and Plaza Theatre, Inc. 25 and Leung Yee vs. F. L. Strong Machinery and
Williamson, 26 wherein third persons assailed the validity of the chattel mortgage, 27 it is the
defendants-appellants themselves, as debtors-mortgagors, who are attacking the validity of the
chattel mortgage in this case. The doctrine of estoppel therefore applies to the herein
defendants-appellants, having treated the subject house as personalty.
(b) Turning to the question of possession and rentals of the premises in question. The Court of
First Instance noted in its decision that nearly a year after the foreclosure sale the mortgaged
house had been demolished on 14 and 15 January 1957 by virtue of a decision obtained by the
lessor of the land on which the house stood. For this reason, the said court limited itself to
sentencing the erstwhile mortgagors to pay plaintiffs a monthly rent of P200.00 from 27 March
1956 (when the chattel mortgage was foreclosed and the house sold) until 14 January 1957
(when it was torn down by the Sheriff), plus P300.00 attorney's fees.
Appellants mortgagors question this award, claiming that they were entitled to remain in
possession without any obligation to pay rent during the one year redemption period after the
foreclosure sale, i.e., until 27 March 1957. On this issue, We must rule for the appellants.
Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No.
1508. 28 Section 14 of this Act allows the mortgagee to have the property mortgaged sold at
public auction through a public officer in almost the same manner as that allowed by Act No.
3135, as amended by Act No. 4118, provided that the requirements of the law relative to notice
and registration are complied with. 29 In the instant case, the parties specifically stipulated that
"the chattel mortgage will be enforceable in accordance with the provisions of Special Act No.
3135 ... ." 30 (Emphasis supplied).
Section 6 of the Act referred to 31 provides that the debtor-mortgagor (defendants-appellants
herein) may, at any time within one year from and after the date of the auction sale, redeem the
property sold at the extra judicial foreclosure sale. Section 7 of the same Act 32 allows the
purchaser of the property to obtain from the court the possession during the period of
redemption: but the same provision expressly requires the filing of a petition with the proper
Court of First Instance and the furnishing of a bond. It is only upon filing of the proper motion

and the approval of the corresponding bond that the order for a writ of possession issues as a
matter of course. No discretion is left to the court. 33 In the absence of such a compliance, as in
the instant case, the purchaser can not claim possession during the period of redemption as a
matter of right. In such a case, the governing provision is Section 34, Rule 39, of the Revised
Rules of Court 34 which also applies to properties purchased in extrajudicial foreclosure
proceedings. 35 Construing the said section, this Court stated in the aforestated case of Reyes
vs. Hamada.
In other words, before the expiration of the 1-year period within which the judgment-debtor or
mortgagor may redeem the property, the purchaser thereof is not entitled, as a matter of right, to
possession of the same. Thus, while it is true that the Rules of Court allow the purchaser to
receive the rentals if the purchased property is occupied by tenants, he is, nevertheless,
accountable to the judgment-debtor or mortgagor as the case may be, for the amount so
received and the same will be duly credited against the redemption price when the said debtor
or mortgagor effects the redemption.Differently stated, the rentals receivable from tenants,
although they may be collected by the purchaser during the redemption period, do not belong to
the latter but still pertain to the debtor of mortgagor. The rationale for the Rule, it seems, is to
secure for the benefit of the debtor or mortgagor, the payment of the redemption amount and the
consequent return to him of his properties sold at public auction. (Emphasis supplied)
The Hamada case reiterates the previous ruling in Chan vs. Espe. 36
Since the defendants-appellants were occupying the house at the time of the auction sale, they
are entitled to remain in possession during the period of redemption or within one year from and
after 27 March 1956, the date of the auction sale, and to collect the rents or profits during the
said period.
It will be noted further that in the case at bar the period of redemption had not yet expired when
action was instituted in the court of origin, and that plaintiffs-appellees did not choose to take
possession under Section 7, Act No. 3135, as amended, which is the law selected by the parties
to govern the extrajudicial foreclosure of the chattel mortgage. Neither was there an allegation to
that effect. Since plaintiffs-appellees' right to possess was not yet born at the filing of the
complaint, there could be no violation or breach thereof. Wherefore, the original complaint stated
no cause of action and was prematurely filed. For this reason, the same should be ordered
dismissed, even if there was no assignment of error to that effect. The Supreme Court is clothed
with ample authority to review palpable errors not assigned as such if it finds that their
consideration is necessary in arriving at a just decision of the cases. 37
It follows that the court below erred in requiring the mortgagors to pay rents for the year
following the foreclosure sale, as well as attorney's fees.
FOR THE FOREGOING REASONS, the decision appealed from is reversed and another one
entered, dismissing the complaint. With costs against plaintiffs-appellees.

[G.R. No. 135385. December 6, 2000]

ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT
AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and
CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS
PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES,
BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN,
TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU

SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA

SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T.
PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY,
VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL
S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE
CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY,
CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO
CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO
C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B.
GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O.
SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN,
PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY,
LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG,
MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO,
JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING,
SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA,
NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T.
BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI,
MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by
her father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO
D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR.,
SUSAN BOLANIO, OND, PULA BATO BLAAN TRIBAL FARMERS ASSOCIATION, INTERPEOPLES EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.

FOR

THE

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to
Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of
the principle of parens patriae and that the State has the responsibility to protect and guarantee
the rights of those who are at a serious disadvantage like indigenous peoples. For this reason it
prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the
Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a
motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP and
Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings
and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the States
ownership over lands of the public domain as well as minerals and other natural resources
therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:
(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;
(2) Section 5, in relation to section 3(a), which provides that ancestral domains including
inalienable public lands, bodies of water, mineral and other resources found within ancestral
domains are private but community property of the indigenous peoples;
(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral
domains and ancestral lands;

RESOLUTION

(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral domains;

PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No.
8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and
its Implementing Rules and Regulations (Implementing Rules).
[1]

In its resolution of September 29, 1998, the Court required respondents to comment. In
compliance, respondents Chairperson and Commissioners of the National Commission on
Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its
provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the
constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and Natural
Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
through the Solicitor General a consolidated Comment. The Solicitor General is of the view that
the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources
to indigenous peoples and prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the
authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission,
and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their
Motion for Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and
praying for the dismissal of the petition.

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;
(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous
peoples for the development and utilization of natural resources therein for a period not
exceeding 25 years, renewable for not more than 25 years; and
(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop,
protect and conserve the ancestral domains and portions thereof which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas,
forest cover or reforestation.[2]
Petitioners also content that, by providing for an all-encompassing definition of ancestral
domains and ancestral lands which might even include private lands found within said areas,
Sections 3(a) and 3(b) violate the rights of private landowners.[3]
In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of
the NCIP and making customary law applicable to the settlement of disputes involving ancestral
domains and ancestral lands on the ground that these provisions violate the due process clause
of the Constitution.[4]
These provisions are:

(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral
domains and which vest on the NCIP the sole authority to delineate ancestral domains and
ancestral lands;
(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an
ancestral domain and upon notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of
Justice and Commissioner of the National Development Corporation, the jurisdiction of said
officials over said area terminates;
(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples
shall be applied first with respect to property rights, claims of ownership, hereditary succession
and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof
shall be resolved in favor of the indigenous peoples;
(4) Section 65 which states that customary laws and practices shall be used to resolve disputes
involving indigenous peoples; and
(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving
rights of the indigenous peoples.[5]
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative
Order No. 1, series of 1998, which provides that the administrative relationship of the NCIP to
the Office of the President is characterized as a lateral but autonomous relationship for purposes
of policy and program coordination. They contend that said Rule infringes upon the Presidents
power of control over executive departments under Section 17, Article VII of the Constitution. [6]
Petitioners pray for the following:
(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related
provisions of R.A. 8371 are unconstitutional and invalid;
(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the
NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;
(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department of
Environment and Natural Resources Circular No. 2, series of 1998;
(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to
cease and desist from disbursing public funds for the implementation of the assailed provisions
of R.A. 8371; and
(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural
Resources to comply with his duty of carrying out the States constitutional mandate to control
and supervise the exploration, development, utilization and conservation of Philippine natural
resources.[7]
After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged
provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative
Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57
of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation
of natural resources and should be read in conjunction with Section 2, Article XII of the 1987
Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the

ground that it does not raise a justiciable controversy and petitioners do not have standing to
question the constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related
provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of
Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases
by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate
opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are
unconstitutional.Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the
separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case
was redeliberated upon. However, after redeliberation, the voting remained the
same.Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is
DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices Puno,
Vitug, Kapunan, Mendoza, and Panganiban.
SO ORDERED.
G.R. No. L-43938 April 15, 1988
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,
vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET
CONSOLIDATED,
INC., petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO,
all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG
WEDGE
MINING
COMPANY, petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO,
all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA
ROSA, respondents.

CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of
the earth even if the land where the discovery is made be private. 1 In the cases at bar, which
have been consolidated because they pose a common issue, this doctrine was not correctly
applied.
These cases arose from the application for registration of a parcel of land filed on February 11,
1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria,
Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into
9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose
de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in
1964. 2

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big
Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the
Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3
In support of the application, both Balbalio and Alberto testified that they had acquired the
subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father
shortly after the Liberation. She testified she was born in the land, which was possessed by her
parents under claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother,
Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest
to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She
was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier possession
of the land by Alberto's father. 5 Balbalio presented her tax declaration in 1956 and the realty tax
receipts from that year to 1964, 6 Alberto his tax declaration in 1961 and the realty tax receipts
from that year to 1964. 7
Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it
on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in
September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet
had been in actual, continuous and exclusive possession of the land in concept of owner, as
evidenced by its construction of adits, its affidavits of annual assessment, its geological
mappings, geological samplings and trench side cuts, and its payment of taxes on the land. 8
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma
and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and
recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were
purchased from these locators on November 2, 1931, by Atok, which has since then been in
open, continuous and exclusive possession of the said lots as evidenced by its annual
assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes
thereon. 9
The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill
of 1902 which provided that:
SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and
unsurveyed are hereby declared to be free and open to exploration, occupation and purchase
and the land in which they are found to occupation and purchase by the citizens of the United
States, or of said islands.

There is no question that the 9 lots applied for are within the June Bug mineral claims of
Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of
plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining
locator. He filed his declaration of the location of the June Bug mineral and the same was
recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha
subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had
made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It
had submitted the required affidavit of annual assessment. After World War II, Benguet
introduced improvements on mineral claim June Bug, and also conducted geological mappings,
geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for
taxation and had religiously paid the taxes.
The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and
which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the
Emma and Fredia mineral claims of Atok Big Wedge Mining Company.
The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having
been perfected prior to the approval of the Constitution of the Philippines of 1935, they were
removed from the public domain and had become private properties of Benguet and Atok.
It is not disputed that the location of the mining claim under consideration was perfected prior to
November 15, 1935, when the Government of the Commonwealth was inaugurated; and
according to the laws existing at that time, as construed and applied by this court in McDaniel v.
Apacible and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the area from
the public domain. Said the court in that case: The moment the locator discovered a valuable
mineral deposit on the lands located, and perfected his location in accordance with law, the
power of the United States Government to deprive him of the exclusive right to the possession
and enjoyment of the located claim was gone, the lands had become mineral lands and they
were exempted from lands that could be granted to any other person. The reservations of public
lands cannot be made so as to include prior mineral perfected locations; and, of course, if a valid
mining location is made upon public lands afterwards included in a reservation, such inclusion or
reservation does not affect the validity of the former location. By such location and perfection,
the land located is segregated from the public domain even as against the Government. (Union
Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).

The trial court * denied the application, holding that the applicants had failed to prove their claim
of possession and ownership of the land sought to be registered. 11 The applicants appealed to
the respondent court, * which reversed the trial court and recognized the claims of the applicant,
but subject to the rights of Benguet and Atok respecting their mining claims. 12 In other words,
the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the
same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.

"The legal effect of a valid location of a mining claim is not only to segregate the area from the
public domain, but to grant to the locator the beneficial ownership of the claim and the right to a
patent therefor upon compliance with the terms and conditions prescribed by law. Where there is
a valid location of a mining claim, the area becomes segregated from the public domain and the
property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650;
655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the effect of a
grant by the United States of the right of present and exclusive possession, with the right to the
exclusive enjoyment of all the surface ground as well as of all the minerals within the lines of the
claim, except as limited by the extralateral right of adjoining locators; and this is the locator's
right before as well as after the issuance of the patent. While a lode locator acquires a vested
property right by virtue of his location made in compliance with the mining laws, the fee remains
in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon.
Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the
Bureau of Mines, 66 Phil. 259, 265-266)

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership.
The Republic has filed its own petition for review and reiterates its argument that neither the
private respondents nor the two mining companies have any valid claim to the land because it is
not alienable and registerable.

It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold
Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to
secure a patent as long as he complies with the provisions of the mining laws; his possessory
right, for all practical purposes of ownership, is as good as though secured by patent.

It is true that the subject property was considered forest land and included in the Central
Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok
at that time. The Court of Appeals correctly declared that:

We agree likewise with the oppositors that having complied with all the requirements of the
mining laws, the claims were removed from the public domain, and not even the government of
the Philippines can take away this right from them. The reason is obvious. Having become the

The Bureau of Forestry Development also interposed its objection, arguing that the land sought
to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No.
217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation
under the Constitutions of 1935 and 1973. 10

private properties of the oppositors, they cannot be deprived thereof without due process of
law. 13
Such rights were not affected either by the stricture in the Commonwealth Constitution against
the alienation of all lands of the public domain except those agricultural in nature for this was
made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided
that:
SEC. 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
Philipppines 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 60% 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 lands, 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 25 years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water power,
in which case beneficial use may be the measure and the limit of the grant.
Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:
Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all
locations of mining claim made prior to February 8, 1935 within lands set apart as forest reserve
under Sec. 1826 of the Revised Administrative Code which would be valid and subsisting
location except to the existence of said reserve are hereby declared to be valid and subsisting
locations as of the date of their respective locations.
The perfection of the mining claim converted the property to mineral land and under the laws
then in force removed it from the public domain. 14 By such act, the locators acquired exclusive
rights over the land, against even the government, without need of any further act such as the
purchase of the land or the obtention of a patent over it. 15 As the land had become the private
property of the locators, they had the right to transfer the same, as they did, to Benguet and
Atok.
It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private
respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas
is not available in the case at bar, for two reasons.
First, the trial court found that the evidence of open, continuous, adverse and exclusive
possession submitted by the applicants was insufficient to support their claim of ownership. They
themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on
the earlier alleged possession of their predecessors-in-interest. 16 The trial judge, who had the
opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and
test their credibility was not convinced. We defer to his judgment in the absence of a showing
that it was reached with grave abuse of discretion or without sufficient basis. 17
Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really
been in possession of the subject property, their possession was not in the concept of owner of
the mining claim but of the property asagricultural land, which it was not. The property was
mineral land, and they were claiming it as agricultural land. They were not disputing the lights of
the mining locators nor were they seeking to oust them as such and to replace them in the
mining of the land. In fact, Balbalio testified that she was aware of the diggings being undertaken
"down below" 18 but she did not mind, much less protest, the same although she claimed to be
the owner of the said land.
The Court of Appeals justified this by saying there is "no conflict of interest" between the owners
of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a

well-known principle that the owner of piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable height. 19 Under the
aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface,
subject to separate claims of title. This is also difficult to understand, especially in its practical
application.
Under the theory of the respondent court, the surface owner will be planting on the land while
the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he
may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the
crops above. How deep can the farmer, and how high can the miner, go without encroaching on
each other's rights? Where is the dividing line between the surface and the sub-surface rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the land must be either
completely mineral or completely agricultural. In the instant case, as already observed, the land
which was originally classified as forest land ceased to be so and became mineral and
completely mineral once the mining claims were perfected. 20 As long as mining operations
were being undertaken thereon, or underneath, it did not cease to be so and become
agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by
those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act No. 137, providing as
follows:
Sec. 3. All mineral lands of the public domain and minerals 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 60% 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 government established under the Constitution.
SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial,
residential, or for any purpose other than mining does not include the ownership of, nor the right
to extract or utilize, the minerals which may be found on or under the surface.
SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all
areas for which public agricultural land patents are granted are excluded and excepted from all
such patents.
SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all
areas for which Torrens titles are granted are excluded and excepted from all such titles.
This is an application of the Regalian doctrine which, as its name implies, is intended for the
benefit of the State, not of private persons. The rule simply reserves to the State all minerals that
may be found in public and even private land devoted to "agricultural, industrial, commercial,
residential or (for) any purpose other than mining." Thus, if a person is the owner of agricultural
land in which minerals are discovered, his ownership of such land does not give him the right to
extract or utilize the said minerals without the permission of the State to which such minerals
belong.
The flaw in the reasoning of the respondent court is in supposing that the rights over the land
could be used for both mining and non-mining purposes simultaneously. The correct
interpretation is that once minerals are discovered in the land, whatever the use to which it is
being devoted at the time, such use may be discontinued by the State to enable it to extract the
minerals therein in the exercise of its sovereign prerogative. The land is thus converted to
mineral land and may not be used by any private party, including the registered owner thereof,
for any other purpose that will impede the mining operations to be undertaken therein, For the
loss sustained by such owner, he is of course entitled to just compensation under the Mining
Laws or in appropriate expropriation proceedings. 21

Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue
of their respective mining claims which they validly acquired before the Constitution of 1935
prohibited the alienation of all lands of the public domain except agricultural lands, subject to
vested rights existing at the time of its adoption. The land was not and could not have been
transferred to the private respondents by virtue of acquisitive prescription, nor could its use be
shared simultaneously by them and the mining companies for agricultural and mineral purposes.
WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that
of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to
costs.
SO ORDERED.

and not within any forest zone or public domain; and that tacking her predecessors-in-interests
possession to hers, applicant appears to be in continuous and public possession thereof for
more than thirty (30) years.[4]
The dispositive portion of the decision reads:
WHEREFORE, this Court hereby approves this application for registration and thus places under
the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration
Law, the land described in Plan Ap-04-007770 and containing an area of nine thousand three
hundred forty-nine (9,349) square meters as supported by its technical description now forming
part of the record of this case, in addition to other proofs adduced in the name of ALEXANDRA
A. LAO, of legal age, married to NELSON O. LAO, Filipino citizen, with residence at 1648 Yakal
Street, Sta. Cruz, Manila.

[G.R. No. 150413. July 1, 2003]

Once this Decision becomes final and executory, the corresponding decree of registration shall
forthwith issue.

REPUBLIC OF THE PHILIPPINES, petitioner, vs. ALEXANDRA LAO, respondent.

SO ORDERED.[5]

DECISION

Petitioner Republic of the Philippines, represented by the Office of the Solicitor General,
appealed to the Court of Appeals which was docketed as CA-G.R. CV No. 56230. On October
15, 2001, the appellate court affirmed the judgment of the trial court. [6] Hence, this petition for
review raising the following errors:

YNARES-SANTIAGO, J.:
This petition for review assails the decision[1] of the Court of Appeals in CA-G.R. CV No. 56230,
which affirmed the judgment [2] of the Regional Trial Court of Tagaytay City, Branch 18, in Land
Registration Case No. TG-719.
On September 4, 1995, respondent Alexandra Lao filed with the Regional Trial Court of Tagaytay
City, Branch 18, an application for the registration of title over a parcel of land designated as Lot
No. 3951, Cad. 452-D, Silang Cadastre, Plan Ap-04-007770, consisting of nine thousand three
hundred forty nine (9,349) square meters under Presidential Decree No. 1529, otherwise known
as the Property Registration Decree. Respondent alleged that she acquired the land by
purchase from the siblings Raymundo Noguera and Ma. Victoria A. Valenzuela, who inherited it
from Generosa Medina. The latter, in turn, inherited the land from her father, Jose Medina, who
acquired the same from Edilberto Perido by transfer.
In the alternative, respondent prayed that the land be awarded to her under the provisions of
Commonwealth Act No. 141, as amended, also known as the Public Land Act, based on her and
her predecessors open, public, actual, continuous, exclusive, notorious and adverse possession
and occupancy under bona fide claim of ownership for more than thirty (30) years.
At the hearing in the lower court, respondent presented the following witnesses: Candido
Amoroso, who testified on the ownership of the land by Edilberto Perido in 1932; Vicente
Laudato, who testified on respondents purchase of the property from Raymundo and Ma.
Victoria; and Fina Victoria So-Liwanag, who assisted respondent in her application for
registration.Respondent likewise presented in evidence the Deed of Absolute Sale [3] dated April
19, 1994 executed by Raymundo and Victoria in her favor, the survey plan and technical
description of the property, and the tax declarations in the name of respondent as well as her
predecessors-in-interest.
On June 28, 1996, the trial court made the following findings, to wit:
x x x the applicant acquired the subject parcel of land by purchase from Raymundo Noguera and
Ma. Victoria A. Valenzuela in 1994, and that applicant and her predecessors-in-interest have
been in continuous, uninterrupted, open, public, adverse and in the concept of an owner
possession of the subject parcel of land for more than thirty (30) years now; and that the same
parcel was declared for taxation purposes; that the realty taxes due thereon have been duly
paid; that the land involved in this case is not covered by any land patent. Likewise, this Court
could well-discern from the survey plan covering the same property, as well as technical
description and other documents presented, that the land sought to be registered is agricultural

THERE IS NO SUFFICIENT EVIDENCE TO WARRANT THE ORIGINAL REGISTRATION OF

TITLE OF SUBJECT PROPERTY IN THE NAME OF RESPONDENT.[7]
A. RESPONDENT FAILED TO COMPLY WITH THE LEGALLY REQUIRED PERIOD AND ACTS
OF POSSESSION.[8]
B. THE TAX DECLARATIONS PRESENTED BY RESPONDENT DO NOT CORROBORATE
HER CLAIM OF THE LEGALLY REQUIRED PERIOD OF POSSESSION.[9]
C. RESPONDENT FAILED TO PRESENT A CERTIFICATION FROM THE APPROPRIATE
GOVERNMENT AGENCY THAT THE LAND SUBJECT OF HER APPLICATION FOR
REGISTRATION IS ALIENABLE AND DISPOSABLE LAND OF THE PUBLIC DOMAIN. [10]
In sum, the issues presented before us are (a) whether or not respondent was able to prove, by
the quantum of evidence mandated by law, that she met the required period of open, exclusive,
continuous and notorious possession, in the concept of an owner, of the subject parcel of land;
and (b) whether or not respondent was able to show that the land subject of her application was
disposable and alienable land of the public domain.
Section 14 (1) of Presidential Decree No. 1529 states:
Who may apply. The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:
(1) Those who by themselves or through their predecessor-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable
lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.
On the other hand, Section 48 (b) of Commonwealth Act No. 141, as amended by Section 4 of
Presidential Decree No. 1073, provides:
The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable
lands of the public domain which have been in open, continuous, exclusive and notorious

possession and occupation by the applicant himself or thru his predecessor-in-interest, under a
bona fide claim of acquisition of ownership, since June 12, 1945.

respondent can not tack her possession with those of Generosa Medina and her predecessorsin-interest.

Thus, before one can register his title over a parcel of land, the applicant must show that (a) he,
by himself or through his predecessors-in-interest, has been in open, continuous, exclusive and
notorious possession and occupation of the subject land under a bona fide claim of ownership
since June 12, 1945 or earlier; and (b) the land subject of the application is alienable and
disposable land of the public domain.

There is merit in the petition.

Respondent submits that Section 48 (b) of CA 141 was amended by Republic Act No. 6940,
which reduced the required period of possession to thirty years immediately prior to the filing of
the application. Said law became effective on April 15, 1990. However, petitioner maintains that
the required period of possession remained the same. RA 6940 explicitly states that its
provisions amended sections 44, 45 and 47 of CA 141. Nothing in RA 6940 amends Section 48
(b). In other words, the requisites for judicial confirmation of imperfect or incomplete title set forth
therein remains the same, namely, (1) possession of the subject land from June 12, 1945, and
(2) the classification of the land as alienable and disposable land of the public domain. In Public
Estates Authority v. Court of Appeals,[11] we held that:
Under the public land act, judicial confirmation of imperfect title required possession en
concepto de dueo since time immemorial, or since July 26, 1894. Under C.A. No. 141, this
requirement was retained. However, on June 22, 1957, Republic Act No. 1942 was enacted
amending C.A. No. 141. This later enactment required adverse possession for a period of only
thirty (30) years. On January 25, 1977, the President enacted P.D. No. 1073, further amending
C.A. No. 141, extending the period for filing applications for judicial confirmation of imperfect or
incomplete titles to December 31, 1987. Under this decree, the provisions of Section 48 (b) and
Section 48 (c), Chapter VIII, of the Public Land Act are hereby amended in the sense that these
provisions shall apply only to alienable and disposable land of the public domain which have
been in open, continuous, exclusive and notorious possession and occupation by the applicant
himself or thru his predecessors-in-interest under a bona fide claim of acquisition of
ownership, since June 12, 1945.
The aforequoted ruling was reiterated in Republic v. Court of Appeals,[12] thus:
This Court has held in Republic vs. Doldol [295 SCRA 359, (1998)] that, originally, Section 48(b)
of C.A. No. 141 provided for possession and occupation of lands of the public domain since July
26, 1894. This was superseded by R.A. No. 1942 which provided for a simple thirty-year
prescriptive period of occupation by an applicant for judicial confirmation of imperfect title. The
same, however, has already been amended by Presidential Decree No. 1073, approved on
January 25, 1977. As amended Section 48 (b) now reads:
(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, since June 12, 1945, or
earlier, immediately preceding the filing of the application for confirmation of title, except when
prevented by wars or force majeure.Those 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.
Petitioner argues that respondent failed to prove by incontrovertible evidence that she had been
in open, continuous, exclusive and notorious possession and occupation of the subject land, in
the concept of an owner, since June 12, 1945 or earlier. According to petitioner, respondents
witnesses did not state the exact period when respondents predecessors-in-interest started
occupying the subject land. They only made sweeping statements to the effect that respondent
had been in possession of the property for more than thirty years. Hence, it can not be
conclusively determined whether respondent and her predecessors-in-interest have truly been in
possession of the property since June 12, 1945 or earlier. Furthermore, respondent failed to
show how the property was transferred from Generosa Medina to Raymundo Noguera and Ma.
Victoria A. Valenzuela. No extrajudicial settlement of property was established.Consequently,

Candido Amoroso, respondents first witness, testified that he first knew of the property in 1932
and that it was owned by a certain Edilberto Perido. However, no evidence was presented to
support his claim. Respondent submitted the tax declarations in the name of her predecessorsin-interest, including that of Edilberto. However, the earliest of these documents pertained to the
year 1948 only, three years short of the required period. Respondents other witness, Vicente
Laudato, claimed that he had known about the property since he was ten years old, which was
in 1945, and that Edilberto Perido owned the property. On cross-examination, however, he
testified that he based his information on Edilbertos ownership of the land on the fact that the
latter used to greet him and his family whenever he passed by their house. Vicente later on
admitted that he did not know with certainty whether Edilberto was indeed the owner and
possessor of the property.[13]
Finally, respondent failed to present the extrajudicial settlement or other document evidencing
the transfer of the land from Generosa Medina to Raymundo Noguera and Ma. Victoria A.
Valenzuela. She likewise did not show the relationship between these parties. She only
presented the deed of sale between her and the latter, where it was stated that Raymundo and
Ma. Victoria inherited the property from Generosa. Hence, respondent can not tack her
possession with those of Generosa and her predecessors-in-interest. At most, respondents
possession can only be reckoned from the time that Raymundo and Ma. Victoria claimed
possession of the property.
Respondent having thus failed to show by incontrovertible evidence that her possession of the
land commenced on June 12, 1945 or earlier, she failed to meet the first requisite under the
pertinent provisions of PD 1529 and CA 141.
Petitioner further submits that respondent failed to show that the land subject of her application
is classified as alienable and disposable land of the public domain. Under the Regalian doctrine
which is embodied in our Constitution,[14] all lands of the public domain belong to the State,
which is the source of any asserted right to ownership of land. [15] All lands not appearing to be
clearly within private ownership are presumed to belong to the State.[16] 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.[17] To overcome this presumption, incontrovertible evidence must
be established that the land subject of the application is alienable or disposable.[18]
In De Ocampo v. Arlos,[19] it was held that:
x x x a title may be judicially confirmed under Section 48 of the Public Land Act only if it pertains
to alienable lands of the public domain. Unless such assets are reclassified and considered
disposable and alienable, occupation thereof in the concept of owner, no matter how long,
cannot ripen into ownership and be registered as a title. Verily, Presidential Decree No. 1073
clarified Section 48 (b) of the Public Land Act by specifically declaring that the latter applied only
to alienable and disposable lands of the public domain.
In the case at bar, no certification from the appropriate government agency or official
proclamation reclassifying the land as alienable and disposable was presented by
respondent.Respondent merely submitted the survey map and technical descriptions of the land,
which contained no information regarding the classification of the property. These documents
are not sufficient to overcome the presumption that the land sought to be registered forms part of
the public domain.
Respondent argues that she was not required to present any certification stating that the land is
open for disposition because no opposition to her application was ever made by the appropriate
government agencies. She claims that in the absence of any proof to the contrary, lands of the
public domain are agricultural in nature and thus susceptible to private ownership.

As an applicant for registration of a parcel of land, respondent had the initial obligation to show
that the property involved is agricultural. Being the interested party, it was incumbent upon her to
prove that the land being registered is indeed alienable or disposable. She cannot rely on the
mere presumption that it was agricultural and, therefore, alienable part of the public domain.
[20]
Thus, in Director of Lands v. Funtilar,[21] we held:
It was rather sweeping for the appellate court to rule that after an applicant files his application
for registration, the burden shifts totally to the government to prove that the land forms part of
the unclassified forest zone. The ruling in Heirs of Amunategui v. Director of Forestry (126 SCRA
69) governs applications for confirmation of imperfect title. The applicant shoulders the burden of
overcoming the presumption that the land sought to be registered forms part of the public
domain.
Moreover, the absence of opposition from the government agencies is of no moment because
the State cannot be estopped by the omission, mistake or error of its officials or agents. [22]
It bears stressing at this point that declassification of forest land and its conversion into alienable
or disposable land for agricultural or other purposes requires an express and positive act from
the government.[23] It cannot be presumed; but must be established by convincing proof.[24]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 56230 is REVERSED and SET ASIDE. The application for original
registration of title over Lot No. 3951, Cad. 452-D, Silang Cadastre, Plan Ap-04-007770, which
was docketed as Land Registration Case No. TG-719 before the Regional Trial Court of
Tagaytay City, Branch 18, is DENIED.
SO ORDERED.

G.R. No. 81163 September 26, 1988

EDUARDO
S.
BARANDA
and
ALFONSO
HITALIA, petitioners,
vs.
HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO,
HONORABLE COURT OF APPEALS, and ATTY. HECTOR P. TEODOSIO, respondents.
Eduardo S. Baranda for petitioners.
Rico & Associates for private respondents.

GUTIERREZ, JR., J.:

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private
respondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case
is the same a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta.
Barbara, Iloilo covered by Original Certificate of Title No. 6406.
The present petition arose from the same facts and events which triggered the filing of the
earlier petitions. These facts and events are cited in our resolution dated December 29, 1983 in
G.R. No. 64432, as follows:
. . . This case has its origins in a petition for reconstitution of title filed with the Court of First
Instance of Iloilo involving a parcel of land known as Lot No. 4517 of the Sta. Barbara Cadastre
covered by Original Certificate of Title No. 6406 in the name of Romana Hitalia. Eventually,
Original Certificate of Title No. 6406 was cancelled and Transfer Certificate of Title No. 106098
was issued in the names of Alfonso Hitalia and Eduardo S. Baranda The Court issued a writ of
possession which Gregorio Perez, Maria P. Gotera and Susana Silao refused to honor on the

ground that they also have TCT No. 25772 over the same Lot No. 4517. The Court, after
considering the private respondents' opposition and finding TCT No. 25772 fraudulently
acquired, ordered that the writ of possession be carried out. A motion for reconsideration having
been denied, a writ of demolition was issued on March 29, 1982. Perez and Gotera filed a
petition for certiorari and prohibition with the Court of Appeals. On August 6, 1982, the Court of
Appeals denied the petition. Perez and Gotera filed the petition for review on certiorari
denominated as G.R. No. 62042 before the Supreme Court. As earlier stated the petition was
denied in a resolution dated January 7,1983. The motion for reconsideration was denied in
another resolution dated March 25, 1983, which also stated that the denial is final. This decision
in G.R. No. 62042, in accordance with the entry of judgment, became final on March 25, 1983.
The petitioners in the instant case G.R. No. 64432--contend that the writs of possession and
demolition issued in the respondent court should now be implemented; that Civil Case No.
00827 before the Intermediate Appellate Court was filed only to delay the implementation of the
writ; that counsel for the respondent should be held in contempt of court for engaging in a
concerted but futile effort to delay the execution of the writs of possession and demolition and
that petitioners are entitled to damages because of prejudice caused by the filing of this petition
before the Intermediate Appellate Court. On September 26, 1983, this Court issued a Temporary
Restraining Order ' to maintain the status quo, both in the Intermediate Appellate Court and in
the Regional Trial Court of Iloilo. Considering that (l)there is merit in the instant petition for
indeed the issues discussed in G.R. No. 64432 as raised in Civil Case No. 00827 before the
respondent court have already been passed upon in G.R. No. 62042; and (2) the Temporary
Restraining Order issued by the Intermediate Appellate Court was only intended not to render
the petition moot and academic pending the Court's consideration of the issues, the Court
RESOLVED to DIRECT the respondent Intermediate Appellate Court not to take cognizance of
issues already resolved by this Court and accordingly DISMISS the petition in Civil Case No.
00827. Immediate implementation of the writs of possession and demolition is likewise ordered.
(pp. 107-108, Rollo G.R. No. 64432)
On May 9, 1984, the Court issued a resolution denying with finality a motion for reconsideration
of the December 29, 1983 resolution in G.R. No. 64432. On this same date, another resolution
was issued, this time in G.R. No. 62042, referring to the Regional Trial Court of Iloilo the exparte motion of the private respondents (Baranda and Hitalia) for execution of the judgment in
the resolutions dated January 7, 1983 and March 9, 1983. In the meantime, the then
Intermediate Appellate Court issued a resolution dated February 10, 1984, dismissing Civil Case
No. 00827 which covered the same subject matter as the Resolutions above cited pursuant to
our Resolution dated December 29, 1983. The resolution dated December 29, 1983 in G.R. No.
64432 became final on May 20, 1984.
Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23 presided by Judge
Tito G. Gustilo issued the following order:
Submitted are the following motions filed by movants Eduardo S. Baranda and Alfonso Hitalia
through counsel dated August 28, 1984:
(a) Reiterating Motion for Execution of Judgment of Resolutions dated January 7, 1983 and
March 9, 1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No. 62042;
(b) Motion for Execution of Judgment of Resolution dated December 29, 1983 Promulgated by
Honorable Supreme Court (First Division) in G.R. No. 64432;
(c) The Duties of the Register of Deeds are purely ministerial under Act 496, therefore she must
register all orders, judgment, resolutions of this Court and that of Honorable Supreme Court.
Finding the said motions meritorious and there being no opposition thereto, the same is hereby
GRANTED.
WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared null and void and
Transfer Certificate of Title No. T-106098 is hereby declared valid and subsisting title concerning
the ownership of Eduardo S. Baranda and Alfonso Hitalia, all of Sta. Barbara Cadastre.

The Acting Register of Deeds of Iloilo is further ordered to register the Subdivision Agreement of
Eduardo S. Baranda and Alfonso Hitalia as prayed for." (p. 466, Rollo--G.R. No. 64432)
The above order was set aside on October 8, 1984 upon a motion for reconsideration and
manifestation filed by the Acting Registrar of Deeds of Iloilo, Atty. Helen P. Sornito, on the ground
that there was a pending case before this Court, an Action for Mandamus, Prohibition, Injunction
under G.R. No. 67661 filed by Atty. Eduardo Baranda, against the former which remained
unresolved.
In view of this development, the petitioners filed in G.R. No. 62042 and G.R. No. 64432 ex-parte
motions for issuance of an order directing the Regional Trial Court and Acting Register of Deeds
to execute and implement the judgments of this Court. They prayed that an order be issued:
1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon. Judge Tito G. Gustilo
and the acting Register of Deeds Helen P. Sornito to register the Order dated September 5,
1984 of the lower court;
2. To cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to issue new
certificates of title to each of Eduardo S. Baranda and Alfonso Hitalia;
Plus other relief and remedies equitable under the premises. (p. 473, 64432 Rollo)
Acting on these motions, we issued on September 17,1986 a Resolution in G.R. No. 62042 and
G.R. No. 64432 granting the motions as prayed for. Acting on another motion of the same nature
filed by the petitioners, we issued another Resolution dated October 8, 1986 referring the same
to the Court Administrator for implementation by the judge below.

WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer Certificate of Title
No. T-25772 to this Court within ten (10) days from the date of this order, after which period,
Transfer Certificate of Title No. T-25772 is hereby declared annulled and the Register of Deeds
of Iloilo is ordered to issue a new Certificate of Title in lieu thereof in the name of petitioners Atty.
Eduardo S. Baranda and Alfonso Hitalia, which certificate shall contain a memorandum of the
annulment of the outstanding duplicate. (pp. 286-287, Rollo 64432)
On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez, private respondent
in G.R. No. 64432 and petitioner in G.R. No. 62042, filed a motion for explanation in relation to
the resolution dated September 17, 1986 and manifestation asking for clarification on the
following points:
a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-25772, should the
same be referred to the Court of Appeals (as mentioned in the Resolution of November 27,
1985) or is it already deemed granted by implication (by virtue of the Resolution dated
September 17, 1986)?
b. Does the Resolution dated September 17, 1986 include not only the implementation of the
writ of possession but also the cancellation of TCT T-25772 and the subdivision of Lot 4517? (p.
536, Rollo 4432)
Acting on this motion and the other motions filed by the parties, we issued a resolution dated
May 25, 1987 noting all these motions and stating therein:
xxx xxx xxx

ORDER

Since entry of judgment in G.R. No. 62042 was made on January 7, 1983 and in G.R. No. 64432
on May 30, 1984, and all that remains is the implementation of our resolutions, this COURT
RESOLVED to refer the matters concerning the execution of the decisions to the Regional Trial
Court of Iloilo City for appropriate action and to apply disciplinary sanctions upon whoever
attempts to trifle with the implementation of the resolutions of this Court. No further motions in
these cases will be entertained by this Court. (p. 615, Rollo-64432)

This is an Ex-parte Motion and Manifestation submitted by the movants through counsel on
October 20, 1986; the Manifestation of Atty. Helen Sornito, Register of Deeds of the City of Iloilo,
and formerly acting register of deeds for the Province of Iloilo dated October 23, 1986 and the
Manifestation of Atty. Avito S. Saclauso, Acting Register of Deeds, Province of Iloilo dated
November 5, 1986.

In the meantime, in compliance with the Regional Trial Court's orders dated November 6, 1986
and January 6, 1987, Acting Register of Deeds AvitoSaclauso annotated the order declaring
Transfer Certificate of Title No. T-25772 as null and void, cancelled the same and issued new
certificates of titles numbers T-111560, T-111561 and T-111562 in the name of petitioners
Eduardo S. Baranda and Alfonso Hitalia in lieu of Transfer Certificate of TItle No. T-106098.

Considering that the motion of movants Atty. Eduardo S. Baranda and Alfonso Hitalia dated
August 12, 1986 seeking the full implementation of the writ of possession was granted by the
Honorable Supreme Court, Second Division per its Resolution dated September 17,1986, the
present motion is hereby GRANTED.

However, a notice of lis pendens "on account of or by reason of a separate case (Civil Case No.
15871) still pending in the Court of Appeals" was carried out and annotated in the new
certificates of titles issued to the petitioners. This was upheld by the trial court after setting aside
its earlier order dated February 12, 1987 ordering the cancellation of lis pendens.

WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby ordered to register the
Order of this Court dated September 5, 1984 as prayed for.

This prompted the petitioners to file another motion in G.R, No. 62042 and G.R. No. 64432 to
order the trial court to reinstate its order dated February 12, 1987 directing the Acting Register of
Deeds to cancel the notice of lis pendens in the new certificates of titles.

In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch 23 presided by
Judge Tito G. Gustilo issued two (2) orders dated November 6,1986 and January 6,1987
respectively, to wit:

xxx xxx xxx

ORDER

In a resolution dated August 17, 1987, we resolved to refer the said motion to the Regional Trial
Court of Iloilo City, Branch 23 for appropriate action.

This is a Manifestation and Urgent Petition for the Surrender of Transfer Certificate of Title No. T25772 submitted by the petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia on December 2,
1986, in compliance with the order of this Court dated November 25, 1 986, a Motion for
Extension of Time to File Opposition filed by Maria Provido Gotera through counsel on
December 4, 1986 which was granted by the Court pursuant to its order dated December 15,
1986. Considering that no Opposition was filed within the thirty (30) days period granted by the
Court finding the petition tenable, the same is hereby GRANTED.

Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo, Branch 23 denied the
petitioners' motion to reinstate the February 12, 1987 order in another order dated September
17, 1987, the petitioners filed this petition for certiorari, prohibition and mandamus with
preliminary injunction to compel the respondent judge to reinstate his order dated February l2,
1987 directing the Acting Register of Deeds to cancel the notice of lis pendens annotated in the
new certificates of titles issued in the name of the petitioners.
The records show that after the Acting Register of Deeds annotated a notice of is pendens on
the new certificates of titles issued in the name of the petitioners, the petitioners filed in the

reconstitution case an urgent ex-parte motion to immediately cancel notice of lis pendens
annotated thereon.
In his order dated February 12, 1987, respondent Judge Gustilo granted the motion and directed
the Acting Register of Deeds of Iloilo to cancel the lis pendens found on Transfer Certificate of
Title Nos. T-106098; T-111560; T-111561 and T-111562.
Respondent Acting Register of Deeds Avito Saclauso filed a motion for reconsideration of the
February 12, 1987 order stating therein:
That the undersigned hereby asks for a reconsideration of the said order based on the second
paragraph of Section 77 of P.D. 1529, to wit:

This petition is impressed with merit.

Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although Calixta Provido,
Ricardo Provido, Maxima Provido and Perfecta Provido, the plaintiffs in Civil Case No. 15871
were not impleaded as parties, it is very clear in the petition that Maria Provido was acting on
behalf of the Providos who allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre
as shown by Transfer Certificate of Title No. T-25772 issued in her name and the names of the
plaintiffs in Civil Case No. 15871, among others. (Annex "E" G.R. No. 62042, p. 51, Rollo) In
fact, one of the issues raised by petitioners Maria Provido Gotera and Gregoria Perez in G.R.
No. 62042 was as follows:
xxx xxx xxx

"At any time after final judgment in favor of the defendant or other disposition of the action such
as to terminate finally all rights of the plaintiff in and to the land and/or buildings involved, in any
case in which a memorandum or notice of Lis Pendens has been registered as provided in the
preceding section, the notice of Lis Pendens shall be deemed cancelled upon the registration of
a certificate of the clerk of court in which the action or proceeding was pending stating the
manner of disposal thereof."

2. Whether or not, in the same reconstitution proceedings, respondent Judge Midpantao L. Adil
had the authority to declare as null and void the transfer certificate of title in the name of
petitioner Maria Provido Gotera and her other co-owners. (p. 3, Rollo; Emphasis supplied)

That the lis pendens under Entry No. 427183 was annotated on T-106098, T-111560, T-111561
and T-111562 by virtue of a case docketed as Civil Case No. 15871, now pending with the
Intermediate Court of Appeals, entitled, "Calixta Provido, Ricardo Provido, Sr., Maria Provido
and Perfecto Provido, Plaintiffs, versus Eduardo Baranda and Alfonso Hitalia, Respondents."

G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo in the reconstitution
proceedings declaring TCT No. 25772 in the name of Providos over Lot No. 4517, Sta. Barbara
Cadastre null and void for being fraudulently obtained and declaring TCT No. 106098 over the
same parcel Lot No. 4517, Sta. Barbara Cadastre in the name of petitioners Eduardo Baranda
and Alfonso Hitalia valid and subsisting.

That under the above-quoted provisions of P.D. 152, the cancellation of subject Notice of Lis
Pendens can only be made or deemed cancelled upon the registration of the certificate of the
Clerk of Court in which the action or proceeding was pending, stating the manner of disposal
thereof.
Considering that Civil Case No. 1587, upon which the Notice of Lis Pendens was based is still
pending with the Intermediate Court of Appeals, only the Intermediate Court of Appeals and not
this Honorable Court in a mere cadastral proceedings can order the cancellation of the Notice of
Lis Pendens. (pp. 68-69, Rollo)
Adopting these arguments and on the ground that some if not all of the plaintiffs in Civil Case
No. 15871 were not privies to the case affected by the Supreme Court resolutions, respondent
Judge Tito Gustilo set aside his February 12, 1987 order and granted the Acting Register of
Deeds' motion for reconsideration.
The issue hinges on whether or not the pendency of the appeal in Civil Case No. 15871 with the
Court of Appeals prevents the court from cancelling the notice of lis pendens in the certificates of
titles of the petitioners which were earlier declared valid and subsisting by this Court in G.R. No.
62042 and G.R. No. 64432. A corollary issue is on the nature of the duty of a Register of Deeds
to annotate or annul a notice of lis pendens in a torrens certificate of title.
Civil Case No. 15871 was a complaint to seek recovery of Lot No. 4517 of Sta. Barbara
Cadastre Iloilo, (the same subject matter of G.R. No 62042 and G.R. No. 64432) from petitioners
Baranda and Hitalia filed by Calixta Provido, Ricardo Provido, Maxima Provido and Perfecta
Provido before the Regional Trial Court of Iloilo, Branch 23. At the instance of Atty. Hector P.
Teodosio, the Provides' counsel, a notice of is pendens was annotated on petitioners' Certificate
of Title No. T-106098 covering Lot No. 4517, Sta. Barbara Cadastre.
Acting on a motion to dismiss filed by the petitioners, the court issued an order dated October
24, 1984 dismissing Civil Case No. 15871.
The order was then appealed to the Court of Appeals. This appeal is the reason why respondent
Judge Gustilo recalled the February 12, 1987 order directing the Acting Register of Deeds to
cancel the notice of lis pendens annotated on the certificates of titles of the petitioners.

It thus appears that the plaintiffs in Civil Case No. 15871 were privies to G.R. No. 62042 contrary
to the trial court's findings that they were not.

The decision in G.R. No. 62042 became final and executory on March 25,1983 long before Civil
Case No. 15871 was filed.
Under these circumstances, it is crystal clear that the Providos, private respondents herein, in
filing Civil Case No. 15871 were trying to delay the full implementation of the final decisions in
G.R. No. 62042 as well as G.R. No. 64432 wherein this Court ordered immediate
implementation of the writs of possession and demolition in the reconstitution proceedings
involving Lot No. 4517, Sta. Barbara Cadastre.
The purpose of a notice of lis pendens is defined in the following manner:
Lis pendens has been conceived to protect the real rights of the party causing the registration
thereof With the lis pendens duly recorded, he could rest secure that he would not lose the
property or any part of it. For, notice of lis pendens serves as a warning to a prospective
purchaser or incumbrancer that the particular property is in litigation; and that he should keep his
hands off the same, unless of course he intends to gamble on the results of the litigation.
(Section 24, Rule 14, RuIes of Court; Jamora v. Duran, et al., 69 Phil. 3, 11; I Martin, Rules of
Court, p. 415, footnote 3, citing cases.) (Natanov. Esteban, 18 SCRA 481, 485-486)
The private respondents are not entitled to this protection. The facts obtaining in this case
necessitate the application of the rule enunciated in the cases of Victoriano v. Rovila (55 Phil.
1000), Municipal Council of Paranaque v. Court of First Instance of Rizal (70 Phil., 363) and
Sarmiento v. Ortiz (10 SCRA 158), to the effect that:
We have once held that while ordinarily a notice of pendency which has been filed in a proper
case, cannot be cancelled while the action is pending and undetermined, the proper court has
the discretionary power to cancel it under peculiar circumstances, as for instance, where the
evidence so far presented by the plaintiff does not bear out the main allegations of his complaint,
and where the continuances of the trial, for which the plaintiff is responsible, are unnecessarily
delaying the determination of the case to the prejudice of the defendant. (Victoriano v.
Rovira, supra; The Municipal Council of Paranaque v. Court of First Instance of Rizal, supra)

The facts of this case in relation to the earlier cases brought all the way to the Supreme Court
illustrate how the private respondents tried to block but unsuccessfuly the already final decisions
in G.R. No. 62042 and G.R. No. 64432.
Parenthetically, respondent Judge Tito Gustilo abused his discretion in sustaining the
respondent Acting Register of Deeds' stand that, the notice of lis pendens in the certificates of
titles of the petitioners over Lot No. 4571, Barbara Cadastre cannot be cancelled on the ground
of pendency of Civil Case No. 15871 with the Court of Appeals. In upholding the position of the
Acting Register of Deeds based on Section 77 of Presidential Decree No. 1529, he conveniently
forgot the first paragraph thereof which provides:
Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be cancelled
upon Order of the Court after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the rights of the party who caused it to be
registered. It may also be cancelled by the Register of Deeds upon verified petition of the party
who caused the registration thereof.
This Court cannot understand how respondent Judge Gustilo could have been misled by the
respondent Acting Register of Deeds on this matter when in fact he was the same Judge who
issued the order dismissing Civil Case No. 15871 prompting the private respondents to appeal
said order dated October 10, 1984 to the Court of Appeals. The records of the main case are still
with the court below but based on the order, it can be safely assumed that the various pleadings
filed by the parties subsequent to the motion to dismiss filed by the petitioners (the defendants
therein) touched on the issue of the validity of TCT No. 25772 in the name of the Providos over
Lot Number 4571, Sta. Barbara Cadastre in the light of the final decisions in G.R. No. 62042 and
G.R. No. 64432.
The next question to be determined is on the nature of the duty of the Register of Deeds to
annotate and/or cancel the notice of lis pendens in a torrens certificate of title.
Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of
Deeds to immediately register an instrument presented for registration dealing with real or
personal property which complies with all the requisites for registration. ... . If the instrument is
not registrable, he shall forthwith deny registration thereof and inform the presentor of such
denial in writing, stating the ground or reasons therefore, and advising him of his right to appeal
by consulta in accordance with Section 117 of this Decree."
Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper step
to be taken or memoranda to be made in pursuance of any deed, mortgage or other instrument
presented to him for registration or where any party in interest does not agree with the action
taken by the Register of Deeds with reference to any such instrument, the question shall be
submitted to the Commission of Land Registration by the Register of Deeds, or by the party in
interest thru the Register of Deeds. ... ."
The elementary rule in statutory construction is that when the words and phrases of the statute
are clear and unequivocal, their meaning must be determined from the language employed and
the statute must be taken to mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA
231; Insular Bank of Asia and America Employees' Union [IBAAEU] v. Inciong, 132 SCRA 663)
The statute concerning the function of the Register of Deeds to register instruments in a torrens
certificate of title is clear and leaves no room for construction. According to Webster's Third
International Dictionary of the English Language the word shall means "ought to, must,
...obligation used to express a command or exhortation, used in laws, regulations or directives to
express what is mandatory." Hence, the function of a Register of Deeds with reference to the
registration of deeds encumbrances, instruments and the like is ministerial in nature. The
respondent Acting Register of Deeds did not have any legal standing to file a motion for
reconsideration of the respondent Judge's Order directing him to cancel the notice of lis
pendens annotated in the certificates of titles of the petitioners over the subject parcel of land. In
case of doubt as to the proper step to be taken in pursuance of any deed ... or other
instrumentpresented to him, he should have asked the opinion of the Commissioner of Land

Registration now, the Administrator of the National Land Title and Deeds Registration
Administration in accordance with Section 117 of Presidential Decree No. 1529.
In the ultimate analysis, however, the responsibility for the delays in the full implementation of
this Court's already final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the
cancellation of the notice of lis pendens annotated in the certificates of titles of the petitioners
over Lot No. 4517 of the Sta. Barbara Cadastre falls on the respondent Judge. He should never
have allowed himself to become part of dilatory tactics, giving as excuse the wrong impression
that Civil Case No. 15871 filed by the private respondents involves another set of parties
claiming Lot No. 4517 under their own Torrens Certificate of Title.
WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order of the Regional
Trial Court of Iloilo, Branch 23 is REINSTATED. All subsequent orders issued by the trial court
which annulled the February 12, 1987 order are SET ASIDE. Costs against the private
respondents.
SO ORDERED.

21) RICARDO CHENG, petitioner, vs. RAMON B. GENATO and ERNESTO R. DA

JOSE & SOCORRO B. DA JOSE, respondents.
DECISION
MARTINEZ, J.:

On September 6, 1989, respondent Genato entered into an agreement with

respondent-spouses Ernesto R. Da Jose and Socorro B. Da Jose (Da Jose spouses)
over the above-mentioned two parcels of land. The agreement culminated in the
execution of a contract to sell for which the purchase price was P80.00 per square
meter. The contract was in a public instrument and was duly annotated at the back of
the two certificates of title on the same day. Clauses 1 and 3 thereof provide:

This petition for review on certiorari seeks to annul and set aside the Decision of the
Court of Appeals (CA)[1] dated July 7, 1997 in CA-G.R. No. CV No. 44706 entitled
Ricardo Cheng, plaintiff-appellee vs. Ramon B. Genato, defendant-appellant, Ernesto
R. Da Jose & Socorro B. Da Jose, Intervenors-Appellants which reversed the ruling of
the Regional Trial Court, Branch 96 of Quezon City dated January 18, 1994. The
dispositive portion of the CA Decision reads:

'1. That the purchase price shall be EIGHTY (P80.00) PESOS, Philippine Currency
per square meter, of which the amount of FIFTY THOUSAND (P50,000.00) Pesos
shall be paid by the VENDEE to the VENDOR as partial down payment at the time of
execution of this Contract to Sell.

WHEREFORE, based on the foregoing, appealed decision is hereby REVERSED and

SET ASIDE and judgment is rendered ordering;

'3. That the VENDEE, thirty (30) DAYS after the execution of this contract, and only
after having satisfactorily verified and confirmed the truth and authenticity of
documents, and that no restrictions, limitations, and developments imposed on and/or
affecting the property subject of this contract shall be detrimental to his interest, the
VENDEE shall pay to the VENDOR, NINE HUNDRED FIFTY THOUSAND
(P950,000.00) PESOS, Philippine Currency, representing the full payment of the
agreed Down Payment, after which complete possession of the property shall be
given to the VENDEE to enable him to prepare the premises and any development
therein.[5]

1. The dismissal of the complaint;

2. The cancellation of the annotations of the defendant-appellants Affidavit to Annul
Contract to Sell and plaintiff-appellees Notice of Adverse Claim in the subject TCTs,
namely, TCT No. T-76.196 (M) and TCT No. T-76.197 (M);
3. Payment by the intervenors-appellants of the remaining balance of the purchase
price pursuant to their agreement with the defendant-appellant to suspend
encashment of the three post-dated checks issued since 1989.
4. Ordering the execution by the defendant-appellant Genato of the Deed of Absolute
Sale over the subject two lots covered by TCT No. T-76.196 (M) and TCT No. T76.197 (M) in favor of intervenors-appellants Spouses Da Jose;
5. The return by defendant-appellant Genato of P50,000.00 paid to him by the
plaintiff-appellee Cheng, and
6. Payment by plaintiff-appellee Cheng of moral damages to herein intervenorsappellants Da Jose of P100,000.00, exemplary damages of P50,000.00, attorneys
fees of P50,000.00, and costs of suit; and to defendant-appellant, of P100,000.00 in
exemplary damages, P50,000.00 in attorneys fees. The amounts payable to the
defendant-appellant may be compensated by plaintiff-appellee with the amount
ordered under the immediately foregoing paragraph which defendant-appellant has to
pay the plaintiff-appellee.
SO ORDERED.[2]

xxx xxx xxx

On October 4, 1989, the Da Jose spouses, not having finished verifying the titles
mentioned in clause 3 as aforequoted, asked for and was granted by respondent
Genato an extension of another 30 days or until November 5, 1989. However,
according to Genato, the extension was granted on condition that a new set of
documents is made seven (7) days from October 4, 1989.[6] This was denied by the
Da Jose spouses.
Pending the effectivity of the aforesaid extension period, and without due notice to the
Da Jose spouses, Genato executed an Affidavit to Annul the Contract to Sell,[7] on
October 13, 1989. Moreover, no annotation of the said affidavit at the back of his titles
was made right away. The affidavit contained, inter alia, the following paragraphs;
xxx xxx xxx
That it was agreed between the parties that the agreed downpayment of P950,000.00
shall be paid thirty (30) days after the execution of the Contract, that is on or before
October 6, 1989;
The supposed VENDEES failed to pay the said full downpayment even up to this
writing, a breach of contract.

The antecedents of the case are as follows:

Respondent Ramon B. Genato(Genato) is the owner of two parcels of land located at
Paradise Farms, San Jose Del Monte, Bulacan covered by TCT No. T-76.196 (M)[3]
and TCT No. T-76.197 (M)[4] with an aggregate area of 35,821 square meters, more
or less.

That this affidavit is being executed to Annul the aforesaid Contract to Sell for the
vendee having committed a breach of contract for not having complied with the
obligation as provided in the Contract to Sell;[8]
On October 24, 1989, herein petitioner Ricardo Cheng (Cheng) went to Genatos
residence and expressed interest in buying the subject properties. On that occasion,
Genato showed to Ricardo Cheng copies of his transfer certificates of title and the

annotations at the back thereof of his contract to sell with the Da Jose spouses.
Genato also showed him the aforementioned Affidavit to Annul the Contract to Sell
which has not been annotated at the back of the titles.
Despite these, Cheng went ahead and issued a check for P50,000.00 upon the
assurance by Genato that the previous contract with the Da Jose spouses will be
annulled for which Genato issued a handwritten receipt (Exh. D), written in this wise.
10/24/89
Received from Ricardo Cheng
the Sum of Fifty Thousand Only (P50,000 -)
as partial for T-76196 (M)
T-76197 (M) area 35,821 Sq.m.
Paradise Farm, Gaya-Gaya, San Jose Del Monte
P70/m2 Bulacan
Plus C.G.T. etc
(SGD) Ramon B. Genato
Check # 470393
10/24/89[9]
On October 25, 1989, Genato deposited Chengs check. On the same day, Cheng
called up Genato reminding him to register the affidavit to annul the contract to sell.
[10]
The following day, or on October 26, 1989, acting on Chengs request, Genato caused
the registration of the Affidavit to Annul the Contract to Sell in the Registry of Deeds,
Meycauayan, Bulacan as primary entry No. 262702.[11]
While the Da Jose spouses were at the Office of the Registry of Deeds of
Meycauaya, Bulacan on October 27, 1989, they met Genato by coincidence. It was
only then that the Da Jose spouses discovered about the affidavit to annul their
contract. The latter were shocked at the disclosure and protested against the
rescission of their contract. After being reminded that he (Genato) had given them (Da
Jose spouses) an additional 30-day period to finish their verification of his titles, that
the period was still in effect, and that they were willing and able to pay the balance of
the agreed down payment, later on in the day, Genato decided to continue the
Contract he had with them. The agreement to continue with their contract was
formalized in a conforme letter dated October 27, 1989.
Thereafter, Ramon Genato advised Ricardo Cheng of his decision to continue his
contract with the Da Jose spouses and the return of Chengs P50,000.00 check.
Consequently, on October 30, 1989, Chengs lawyer sent a letter[12] to Genato
demanding compliance with their agreement to sell the property to him stating that the
contract to sell between him and Genato was already perfected and threatening legal
action.
On November 2, 1989, Genato sent a letter[13] to Cheng (Exh. 6) enclosing a BPI
Cashiers Check for P50,000.00 and expressed regret for his inability to consummate
his transaction with him. After having received the letter of Genato on November 4,
1989, Cheng, however, returned the said check to the former via RCPI telegram[14]

dated November 6, 1989, reiterating that our contract to sell your property had
already been perfected.
Meanwhile, also on November 2, 1989, Cheng executed an affidavit of adverse
claim[15] and had it annotated on the subject TCTs.
On the same day, consistent with the decision of Genato and the Da Jose spouses to
continue with their Contract to Sell of September 6, 1989, the Da Jose spouses paid
Genato the complete down payment of P950,000.00 and delivered to him three (3)
postdated checks (all dated May 6, 1990, the stipulated due date) in the total amount
of P1,865,680.00 to cover full payment of the balance of the agreed purchase price.
However, due to the filing of the pendency of this case, the three (3) postdated
checks have not been encashed.
On December 8, 1989, Cheng instituted a complaint[16] for specific performance to
compel Genato to execute a deed of sale to him of the subject properties plus
damages and prayer for preliminary attachment. In his complaint, Cheng averred that
the P50,000.00 check he gave was a partial payment to the total agreed purchase
price of the subject properties and considered as an earnest money for which Genato
acceded. Thus, their contract was already perfected.
In Answer[17] thereto, Genato alleged that the agreement was only a simple receipt
of an option-bid deposit, and never stated that it was a partial payment, nor is it an
earnest money and that it was subject to the condition that the prior contract with the
Da Jose spouses be first cancelled.
The Da Jose spouses, in their Answer in Intervention,[18] asserted that they have a
superior right to the property as first buyers. They alleged that the unilateral
cancellation of the Contract to Sell was without effect and void. They also cited
Chengs bad faith as a buyer being duly informed by Genato of the existing annotated
Contract to Sell on the titles.
After trial on the merits, the lower court ruled that the receipt issued by Genato to
Cheng unerringly meant a sale and not just a priority or an option to buy. It cannot be
true that the transaction was subjected to some condition or reservation, like the
priority in favor of the Da Jose spouses as first buyer because, if it were otherwise,
the receipt would have provided such material condition or reservation, especially as
it was Genato himself who had made the receipt in his own hand. It also opined that
there was a valid rescission of the Contract to Sell by virtue of the Affidavit to Annul
the Contract to Sell. Time was of the essence in the execution of the agreement
between Genato and Cheng, under this circumstance demand, extrajudicial or
judicial, is not necessary. It falls under the exception to the rule provided in Article
1169[19] of the Civil Code. The right of Genato to unilaterally rescind the contract is
said to be under Article 1191[20] of the Civil Code. Additionally, after reference was
made to the substance of the agreement between Genato and the Da Jose spouses,
the lower court also concluded that Cheng should be preferred over the intervenorsDa Jose spouses in the purchase of the subject properties. Thus, on January 18,
1994 the trial court rendered its decision the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered:

1. Declaring the contract to sell dated September 6, 1989 executed between

defendant Ramon Genato, as vendor, and intervenors Spouses Ernesto and Socorro
Da Jose, as vendees, resolved and rescinded in accordance with Art. 1191, Civil
Code, by virtue of defendants affidavit to annul contract to sell dated October 13,
1989 and as the consequence of intervenors failure to execute within seven (7) days
from October 4, 1989 another contract to sell pursuant to their mutual agreement with
the defendant;
2. Ordering defendant to return to the intervenors the sum of P1,000,000.00, plus
interest at the legal rate from November 2, 1989 until full payment;
3. Directing defendant to return to the intervenors the three (3) postdated checks
immediately upon finality of this judgment;
4. Commanding defendant to execute with and in favor of the plaintiff Ricardo Cheng,
as vendee, a deed of conveyance and sale of the real properties described and
covered in Transfer Certificates of Title No. T-76-196 (M) and T-76.197 (M) of the
Registry of Deeds of Bulacan, Meycauyan Branch, at the rate of P70.00/sqaure
meter, less the amount of P50,000.00 already paid to defendant, which is considered
as part of the purchase price, with the plaintiff being liable for payment of the capital
gains taxes and other expenses of the transfer pursuant to the agreement to sell
dated October 24, 1989; and
5. Ordering defendant to pay the plaintiff and the intervenors as follows:
a/ P50,000.00, as nominal damages, to plaintiff;
b/ P50,000.00, as nominal damages, to intervenors;
c/ P20,000.00, as and for attorneys fees, to plaintiff;
d/ P20,000.00, as and for attorneys fees, to intervenors; and
e/ Cost of the suit.
xxx xxx xxx
Not satisfied with the aforesaid decision, herein respondents Ramon Genato and Da
Jose spouses appealed to the court a quo which reversed such judgment and ruled
that the prior contract to sell in favor of the Da Jose spouses was not validly
rescinded, that the subsequent contract to sell between Genato and Cheng,
embodied in the handwritten receipt, was without force and effect due to the failure to
rescind the prior contract; and that Cheng should pay damages to the respondents
herein being found to be in bad faith.
Hence this petition.[21]
This petition for review, assails the Court of Appeals Decision on the following
grounds: (1) that the Da Jose spouses Contract to Sell has been validly rescinded or
resolved; (2) that Ricardo Chengs own contract with Genato was not just a contract to
sell but one of conditional contract of sale which gave him better rights, thus

precluding the application of the rule on double sales under Article 1544, Civil Code;
and (3) that, in any case, it was error to hold him liable for damages.
The petition must be denied for failure to show that the Court of Appeals committed a
reversible error which would warrant a contrary ruling.
No reversible error can be ascribed to the ruling of the Court of Appeals that there
was no valid and effective rescission of resolution of the Da Jose spouses Contract to
Sell, contrary to petitioners contentions and the trial courts erroneous ruling.
In a Contract to Sell, the payment of the purchase price is a positive suspensive
condition, the failure of which is not a breach, casual or serious, but a situation that
prevents the obligation of the vendor to convey title from acquiring an obligatory force.
[22] It is one where the happening of the event gives rise to an obligation. Thus, for its
non-fulfillment there will be no contract to speak of, the obligor having failed to
perform the suspensive condition which enforces a juridical relation. In fact with this
circumstance, there can be no rescission of an obligation that is still non-existent, the
suspensive condition not having occurred as yet.[23] Emphasis should be made that
the breach contemplated in Article 1191 of the New Civil Code is the obligors failure to
comply with an obligation already extant, not a failure of a condition to render binding
that obligation.[24]
Obviously, the foregoing jurisprudence cannot be made to apply to the situation in the
instant case because no default can be ascribed to the Da Jose spouses since the
30-day extension period has not yet expired. The Da Jose spouses contention that no
further condition was agreed when they were granted the 30-days extension period
from October 7, 1989 in connection with clause 3 of their contract to sell dated
September 6, 1989 should be upheld for the following reason, to wit; firstly, If this
were not true, Genato could not have been persuaded to continue his contract with
them and later on agree to accept the full settlement of the purchase price knowing
fully well that he himself imposed such sine qua non condition in order for the
extension to be valid; secondly, Genato could have immediately annotated his
affidavit to annul the contract to sell on his title when it was executed on October 13,
1989 and not only on October 26, 1989 after Cheng reminded him of the annotation;
thirdly, Genato could have sent at least a notice of such fact, there being no
stipulation authorizing him for automatic rescission, so as to finally clear the
encumbrance of his titles and make it available to other would be buyers. It likewise
settles the holding of the trial court that Genato needed money urgently.
Even assuming in gratia argumenti that the Da Jose spouses defaulted, as claimed
by Genato, in their Contract to Sell, the execution by Genato of the affidavit to annul
the contract is not even called for. For with or without the aforesaid affidavit their nonpayment to complete the full downpayment of the purchase price ipso facto avoids
their contract to sell, it being subjected to a suspensive condition. When a contract is
subject to a suspensive condition, its birth or effectivity can take place only if and
when the event which constitutes the condition happens or is fulfilled.[25] If the
suspensive condition does not take place, the parties would stand as if the conditional
obligation had never existed.[26]
Nevertheless, this being so Genato is not relieved from the giving of a notice, verbal
or written, to the Da Jose spouses for decision to rescind their contract. In many
cases,[27] even though we upheld the validity of a stipulation in a contract to sell

authorizing automatic rescission for a violation of its terms and conditions, at least a
written notice must be sent to the defaulter informing him of the same. The act of a
party in treating a contract as cancelled should be made known to the other.[28] For
such act is always provisional. It is always subject to scrutiny and review by the courts
in case the alleged defaulter brings the matter to the proper courts. In University of
the Philippines vs. De Los Angeles,[29] this Court stressed and we quote:
In other words, the party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it proceeds at its
own risk. For it is only the final judgment of the corresponding court that will
conclusively and finally settle whether the action taken was or was not correct in law.
But the law definitely does not require that the contracting party who believes itself
injured must first file suit and wait for a judgment before taking extajudicial steps to
protect its interest. Otherwise, the party injured by the others breach will have to
passively sit and watch its damages accumulate during the pendency of the suit until
the final judgment of rescission is rendered when the law itself requires that he should
exercise due diligence to minimize its own damages (Civil Code, Article 2203).
This rule validates, both in equity and justice, contracts such as the one at bat, in
order to avoid and prevent the defaulting party from assuming the offer as still in
effect due to the obligees tolerance for such non-fulfillment. Resultantly, litigations of
this sort shall be prevented and the relations among would-be parties may be
preserved. Thus, Ricardo Chengs contention that the Contract to Sell between
Genato and the Da Jose spouses was rescinded or resolved due to Genatos
unilateral rescission finds no support in this case.
Anent the issue on the nature of the agreement between Cheng and Genato, the
records of this case are replete with admissions[30] that Cheng believed it to be one
of a Contract to Sell and not one of Conditionl Contract of Sale which he, in a
transparent turn-around, now pleads in this Petition. This ambivalent stance of Cheng
is even noted by the appellate court, thus:
At the outset, this Court notes that plaintiff-appellee was inconsistent in characterizing
the contract he allegedly entered into. In his complaint,[31] Cheng alleged that the
P50,000.00 down payment was earnest money. And next, his testimony[32] was
offered to prove that the transaction between him and Genato on October 24, 1989
was actually a perfected contract to sell.[33]
Settled is the rule that an issue which was not raised during the trial in the court below
cannot be raised for the first time on appeal.[34] Issues of fact and arguments not
adequately brought to the attention of the trial court need not be and ordinarily will not
be considered by a reviewing court as they cannot be raised for the first time on
appeal.[35] In fact, both courts below correctly held that the receipt which was the
result of their agreement, is a contract to sell. This was, in fact Chengs contention in
his pleadings before said courts. This patent twist only operates against Chengs
posture which is indicative of the weakness of his claim.
But even if we are to assume that the receipt, Exh. D, is to be treated as a conditional
contract of sale, it did not acquire any obligatory force since it was subject to
suspensive condition that the earlier contract to sell between Genato and the Da Jose
spouses should first be cancelled or rescinded a condition never met, as Genato, to
his credit, upon realizing his error, redeemed himself by respecting and maintaining

his earlier contract with the Da Jose spouses. In fact a careful reading of the receipt,
Exh. D, alone would not even show that a conditional contract of sale has been
entered by Genato and Cheng. When the requisites of a valid contract of sale are
lacking in said receipt, therefore the sale is neither valid or enforceable.[36]
To support his now new theory that the transaction was a conditional contract of sale,
petitioner invokes the case of Coronel vs. Court of Appeals[37] as the law that should
govern their Petition. We do not agree. Apparently, the factual milieu in Coronel is not
on all fours with those in the case at bar.
In Coronel, this Court found that the petitioners therein clearly intended to transfer title
to the buyer which petitioner themselves admitted in their pleading. The agreement of
the parties therein was definitively outline in the Receipt of Down Payment both as to
property, the purchase price, the delivery of the seller of the property and the manner
of the transfer of title subject to the specific condition that upon the transfer in their
names of the subject property the Coronels will execute the deed of absolute sale.
Whereas, in the instant case, even by a careful perusal of the receipt, Exh. D, alone
such kind of circumstances cannot be ascertained without however resorting to the
exceptions of the Rule on Parol Evidence.
To our mind, the trial court and the appellate court correctly held that the agreement
between Genato and Cheng is a contract to sell, which was, in fact, petitioner
connection in his pleadings before the said courts. Consequently, both to mind, which
read:
Article 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it
who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good
faith was first in possession; and in the absence thereof, to the person who presents
the oldest title, provided there is good faith
However, a meticulous reading of the aforequoted provision shows that said law is not
apropos to the instant case. This provision connotes that the following circumstances
must concur:
(a) The two (or more) sales transactions in the issue must pertain to exactly the same
subject matter, and must be valid sales transactions.
(b) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each represent conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each have bought from the very same seller.
These situations obviously are lacking in a contract to sell for neither a transfer of
ownership nor a sales transaction has been consummated. The contract to be binding

upon the obligee or the vendor depends upon the fulfillment or non-fulfillment of an
event.
Notwithstanding this contrary finding with the appellate court, we are of the view that
the governing principle of Article 1544, Civil Code, should apply in this situation.
Jurisprudence[38] teaches us that the governing principle is PRIMUS TEMPORE,
PORTIOR JURE (first in time, stronger in right). For not only was the contract
between herein respondents first in time; it was also registered long before petitioners
intrusion as a second buyer. This principle only applies when the special rules
provided in the aforcited article of Civil Code do not apply or fit the specific
circumstances mandated under said law or by jurisprudence interpreting the article.
The rule exacted by Article 1544 of the Civil Code for the second buyer to be able to
displace the first buyer are:
(1) that the second buyer must show that he acted in good faith (i.e. in ignorance of
the first sale and of the first buyers rights) from the time of acquisition until title is
transferred to him by registration or failing registration, by delivery of possession;[39]
(2) the second buyer must show continuing good faith and innocence or lack of
knowledge of the first sale until his contract ripens into full ownership through prior
registration as provided by law.[40]
Thus, in the case at bar, the knowledge gained by the Da Jose spouses, as first
buyers, of the new agreement between Cheng and Genato will not defeat their rights
as first buyers except where Cheng, as second buyer, registers or annotates his
transaction or agreement on the title of the subject properties in good faith ahead of
the Da Jose spouses. Moreover, although the Da Jose spouses, as first buyers, knew
of the second transaction it will not bar them from availing of their rights granted by
law, among them, to register first their agreement as against the second buyer.
In contrast, knowledge gained by Cheng of the first transaction between the Da Jose
spouses and Genato defeats his rights even if he is first to register the second
transaction, since such knowledge taints his prior registration with bad faith.
Registration, as defined by Soler and Castillo, means any entry made in the books of
the registry, including both registration in its ordinary and strict sense and
cancellation, annotation, and even marginal notes.[41] In its strict acceptation, it is the
entry made in the registry which records solemnly and permanently the right of
ownership and other real rights.[42] We have ruled[43] before that when a Deed of
Sale is inscribed in the registry of property on the original document itself, what was
done with respect to said entries or annotations and marginal notes amounted to a
registration of the sale. In this light, we see no reason why we should not give priority
in right the annotation made by the Da Jose spouses with respect to their Contract to
Sell dated September 6, 1989.
Moreover, registration alone in such cases without good faith is not sufficient. Good
faith must concur with registration for such prior right to be enforceable. In the instant
case, the annotation made by the Da Jose spouses on the titles of Genato of their
Contract to Sell more than satisfies this requirement. Whereas in the case of Genatos
agreement with Cheng such is unavailing. For even before the receipt, Exh. D, was
issued to Cheng information of such pre-existing agreement has been brought to his
knowledge which did not deter him from pursuing his agreement with Genato. We
give credence to the factual finding of the appellate court that Cheng himself admitted
that it was he who sought Genato in order to inquire about the property and offered to
buy the same.[44] And since Cheng was fully aware, or could have been if he had
chosen to inquire, of the rights of the Da Jose spouses under the Contract to Sell duly
annotated on the transfer certificates of titles of Genato, it now becomes unnecessary

to further elaborate in detail the fact that he is indeed in bad faith in entering into such
agreement. As we have held in Leung Yee vs. F.L. Strong Machinery Co.:[45]
One who purchases real estate with knowledge of a defect x x x of title in his vendor
cannot claim that he has acquired title thereto in good faith as against x x x x an
interest therein; and the same rule must be applied to one who has knowledge of
facts which should have put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his vendor. A purchaser
cannot close his eyes to facts which should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that there was no defect in
the title of the vendor. His mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in his vendors title,
will not make him an innocent purchaser for value, if it afterwards develops that the
title was in fact defective, and it appears that he had such notice of the defect as
would have led to its discovery had he acted with that measure of precaution which
may reasonably be required of a prudent man in a like situation. Good faith, or lack of
it, is in its last analysis a question of intention; but in ascertaining the intention by
which one is actuated on a given occasion, we are necessarily controlled by the
evidence as to the conduct and outward acts by which alone the inward motive may,
with safety, be determined. So it is that the honesty of intention, the honest lawful
intent, which constitutes good faith implies a freedom from knowledge and
circumstances which ought to put a person on inquiry, and so it is that proof of such
knowledge overcomes the presumption of good faith in which the courts always
indulge in the absence of the proof to the contrary. Good faith, or the want of it, is not
a visible, tangible fact that can be seen or touched, but rather a state or condition of
mind which can only be judge of by actual or fancied tokens or signs. (Wilder vs.
Gilman, 55 Vt. 504, 505; Cf. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet,
Cypress Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co. vs.
Bromely, 119 Mich., 8, 10, 17.) Emphasis ours
Damages were awarded by the appellate court on the basis of its finding that
petitioner was in bad faith when he filed the suit for specific performance knowing fully
well that his agreement with Genato did not push through.[46] Such bad faith, coupled
with his wrongful interference with the contractual relations between Genato and the
Da Jose spouses, which culminated in his filing of the present suit and thereby
creating what the counsel for the respondents describes as a prolonged and
economically unhealthy gridlock[47] on both the land itself and the respondents rights
provides ample basis for the damages awarded. Based on these overwhelming
evidence of bad faith on the part of herein petitioner Ricardo Cheng, we find that the
award of damages made by the appellate court is in order.
WHEREFORE, premises considered, the instant petition for review is DENIED and
the assailed decision is hereby AFFIRMED EN TOTO.
22) G.R. No. L-20075

November 27, 1968

DANAO COAL MINING SYNDICATE,

UNIVERSITY, petitioner-appellee,
vs.
CENON LAURENTE, oppositor-appellant.
Deen Law Offices for petitioner-appellee.
Ramon Duterte for oppositor-appellant.

LTD.,

applicant,

SOUTHWESTERN

REYES, J.B.L., J.:

Forwarded to us for review by the Court of Appeals1 is this appeal from two orders
issued by the Court of First Instance of Cebu in the latter's capacity as land
registration court.2 The first was a grant to a buyer's ex parte petition praying, inter
alia, for cancellation of annotation of incumbrances on the transfer certificate of title
covering a parcel of land it purchased from the heirs of registered owner. The second
was a denial of a motion for reconsideration of the first order which was filed by a
third person whose interest, purportedly, might have been prejudiced by the
cancellation.
The transfer certificate of title (TCT No. 7567) in question covered a parcel of land
situated in Camansi, Danao, Cebu. The same was issued in 1928 by the Register of
Deeds of Cebu in favor of H. M. H. Nemazee, the proprietor of the original applicant,
Danao Coal Mining Syndicate, Ltd. On the face thereof were annotated the following
incumbrances:
(a) the condition that the applicant shall be required to produce from the mining
claims referred to a minimum amount of coal equal to an average daily production of
two hundred tons of twenty hundred and forty English pounds for every day exclusive
of Sundays and holidays, and in the event of the failure of the said Coal Mining
Syndicate to produce such amount of coal, to pay to the Government of the Philippine
Islands a royalty at the rate of twenty centavos per ton upon each and every ton of
the deficiency between the amount actually produced, and the minimum amount
herein specified, (b) the use and occupancy of the surface of the said parcel of land in
favor of Filomeno del Mar, as administrator of Roque del Mar, deceased; Lazaro
Osmea, as administrator of Tomas Osmea, deceased; H. B. Walker, as
administrator of Candelario Cuizon, deceased; Juan Medio, Eleno Hungug, Bernardo
Cal, Faustino Batucan, Perfecto Lavador, Agustin Tito and Salvador Gonzalez in
accordance with the agreement dated at Cebu, November 22, 1913.
In a quitclaim deed, dated 14 January 1960, the heirs of Nemazee transferred and
quitclaimed in favor of Southwestern University their rights, title, interest and
participation in, including their mining and leasehold rights over, said land.

favor "the use of occupancy of the surface of the ... land" covered by said TCT No.
7567 was reserved. Laurente thus argued that the cancellation of the annotation of
the incumbrance in favor of Filomeno del Mar and others should not have been
ordered without giving notice, at least through publication, to the parties who, like him,
being a successor-in-interest of said Filomeno del Mar, might thereby be adversely
affected. Laurente's alleged interest was, however, never registered.
The motion for reconsideration was denied, as previously intimated. Reasoned the
lower court:
The Court is in accord with his contention (that if there should be notice, it should be
limited to the parties annotated in the certificate of title itself, and should not be
extended to subsequent parties who, even granting that they acquired the interests of
these persons annotated in the certificate of title, failed to have their rights
accordingly annotated in said certificate of title) of petitioner Southwestern University,
and maintains that inasmuch as the law specifically provides notice to parties in
interest, such notice if any, should be limited to the parties listed or annotated on the
certificate of title. Hence, if such parties are already dead, as had been alleged and
substantiated by petitioner Southwestern University, then notice to said parties would
be superfluous or notice would not be necessary. The Court acting within its limited
jurisdiction as a Court of Land Registration, can only act on what appears on the face
of the certificate of title, and cannot go beyond what appears therein as movant
Cenon Laurente would now want this Court to believe. Notice by Publication is not
necessary in connection with the this petition which has been duly filed in accordance
with Section 112 of Act 496.
Granting that the use and occupancy which was annotated in the certificate of title is
a real right which could be transferred or disposed of by the person named in the
certificate of title to a third person (in this case Cenon Laurente), the latter should
have taken the precaution of having his right annotated on said (certificate of title).
His failure to do so is therefore fatal, in the sense that this Court cannot consider him
as a party in interest who is entitled to notice before the petition for cancellation of
incumbrance could be acted upon ...5
We find no error in the order appealed from.

Subsequently, Southwestern University petitioned the lower court to order (1) the
cancellation of the aforequoted annotation of incumbrances on the ground that the
condition and agreement constituting the same were cancelled and rendered
inoperative by the outbreak of World War II as well as by the death of all the listed
beneficiaries thereof; (2) the registration of the quitclaim deed; and (3) the
cancellation of TCT No. 7567 itself, and issuance of a new certificate of title in its
name. The petition was immediately granted,3 with the lower court dispensing with
the usual notice to interested parties. A new certificate of title (TCT No. RT-2164) was
thereafter issued in favor of Southwestern University.
On 12 September 1960, one Cenon Laurente moved the lower court to reconsider its
order of cancellation, specifically of the second portion of the annotation of
incumbrances in question. He alleged that Southwestern University had filed an
ejectment suit4 before another branch of the same court against him and several
other occupants of the land covered by TCT No. 7567, over which land, he claimed,
he might possibly have an interest as a purchaser of a certain parcel of land situated
also in Camansi, Danao, Cebu, from Filomeno del Mar, one of the persons in whose

Cancellation of registered interests that have terminated and ceased may be ordered
by the land registration court under, and in conformity with, section 112 of Act No.
496, otherwise known as the Land Registration Act. The new owner, Southwestern
University, of the land herein involved took the right step by petitioning the court under
said section to have the registered interests the deceased persons' rights of use
and occupancy of the surface of said land ordered cancelled on the ground that
the same had terminated and ceased. Notice was no longer necessary for the court to
acquire jurisdiction over the petition insofar as the second portion of the annotation of
incumbrances was concerned. With the death of all the registered adverse claimants
thereof, there were no more parties in interest to be notified.
Appelant Laurente was not and can not now be considered a party in interest entitled
to notice. He was, as he is now, a stranger representing no adverse claim as to
render the petition for cancellation controversial and, thereby, divest the lower court of
its jurisdiction. For Laurente's claim avers that the cancellation of the right of the
persons recorded as entitled to use and occupancy of the surface of the land could

affect him adversely because the interest acquired by him from Filomeno del Mar
"might be included in that which is referred to in the aforementioned annotation."
(Record on Appeal, page 43) This is too vague and unsubstantial to give him standing
to claim right to notice or to contest the order of cancellation. Before a claimant can
be considered as possessing a genuine adverse interest that would deprive the
Registration Court of jurisdiction to proceed under section 112 of Act 496 in the
absence of notice to him, there must be a showing of the prima facie truth and validity
of such adverse interest. Laurente has failed to make such a showing. His motion
merely speaks of a possibility of being prejudiced. He has not produced and deed of
conveyance from Filomeno del Mar, or secondary evidence thereof. A mere verbal
agreement will not do here; there must be a public instrument in order to affect a
stranger (such as the holder of the certificate of title or his successors in interest). For
Article 1280, No. 1, of the Civil Code of 1889 (in force in 1920 when Laurente claims
to have acquired title) prescribes:

23) G.R. No. L-79787

June 29, 1989

APOLONIO EGAO AND BEATRIZ EGAO, petitioners,

vs.
THE HONORABLE COURT OF APPEALS (NINTH DIVISION), SEVERO DIGNOS
AND SEVERO BONTILAO, respondents.
Eliud J. Pailagao for petitioners.
Guerrero A. Adaza for private respondents.

The following must be reduced to writing in a public instrument:

1. Acts or contracts whose object is the creation, transmission, modification or
extinction of rights which affect immovable property. (Emphasis supplied)
And to affect registered land, such as is covered by the Certificates of Title of
appellee Southwestern University and its predecessor in interest (TCT No. 7567 and
RT-2164), the public document above referred to must be recorded and annotated in
the certificate, as pointed out in the appealed order; and admittedly, there is no record
of any deed in favor of Laurente. It is elementary that, under the Torrens system,
registration is the operative act that binds the parties thereto, without affecting the
rights of strangers to such contract (Act 496, section 51) unless they have actual
knowledge thereof,6 which is not alleged here.
What is worse is that Laurente allowed more than 20 years to elapse without
asserting the alleged conveyance in his favor, when a period of 10 years sufficed
under Act 190 (then in force) to bar any claim to or over real property. Nor has
Laurente adequately explained such laches on his part..
He avers that he could not cause the recording of the conveyance in his favor
because the registered owner resided in Hongkong. This is no excuse, for the
claimant could have asked the proper court to have the owner summoned by
publication. Laurente also pleads that the records of the Cebu Register of Deeds
were destroyed in the last war. But the war only broke out in 1941, and the enemy
occupied Cebu in 1942, while Laurente's vendor, Filomeno delo Mar, ceased to be
administrator of the Estate of Roque del Mar as far back as 1920, when the
proceedings were closed (Record on Appeal, page 61). Thus, Laurente
unaccountably permitted 21 years to elapse without attempting to record or enforce
the alleged conveyance in his favor.
All the foregoing circumstances cast a dense pall of doubt over the genuineness and
validity of Laurente's adverse claim, and fully justify its rejection by the lower court.
WHEREFORE, the orders appealed from are sustained and affirmed. Costs against
appellant Cenon Laurente in all instances.

PADILLA, J.:
This is a land dispute which culminated in the filing by private respondents Severo
Dignos and Severo Bontilao of a verified complaint for Quieting of Title and/or
Recovery of Possession and Ownership before the RTC of Manolo Fortich, Bukidnon,
* against petitioners Apolonio and Beatriz Egao.
Private respondents' complaint alleged that they are the legitimate owners and
possessors of two (2) parcels of land situated at Lonocan, Manolo Fortich, Bukidnon,
per deed of absolute sale dated 21 December 1979 which, among others, recited
thus:
WHEREAS, the abovementioned Parcels of land Lot No. 662 is covered by Original
Certificate of Title No. P-3559 Free Patent No. 298112 registered in the name of
APOLONIO EGAO married to Beatriz Menosa and Lot No. 661 is covered by Original
Certificate of Title No. P-3558 Free Patent No. 303249 registered in the name of
RAULITA CONEJOS married to Pedro Conejos, all transcribed in the Registration
Book in the Register of Deeds for the Province of Bukidnon;
WHEREAS, Lot No. 662 has been transferred in ownership from BEATRIZ MENOSA
EGAO, married to Apolonio Egao in favor of ROBERTO N. MARFORI per Deed of
Absolute Sale executed before Tommy C. Pacana, Notary Public of Cagayan de Oro
City entered in his Notarial Registry under Doc. No. 75; Page No. 15; Book V Series
of 1965; and Lot No. 661 likewise has been transferred in ownership from RAULITA
R. CONEJOS in favor of ROBERTO N. MARFORI per Deed of Absolute Sale
executed before Tommy C. Pacana, Notary Public of Cagayan de Oro City, dated
June 3, 1965, entered in his Notarial Registry under Doc. No. 20; Page 4; Book V;
Series of 1965.
WHEREAS, the VENDEES herein is [sic] aware of the fact that the Certificate of Title
over the abovementioned parcels of land have not yet been transferred in favor of
ROBERTO N. MARFORI except for the tax declarations but that the VENDOR herein
is in actual, physical, continuous, uninterrupted, and adverse possession of the above
described parcels of land free from all liens and encumbrances whatsoever; 1

Allegedly, upon purchase of Lot No. 662 from Roberto Marfori, improvements were
introduced and taxes paid by private respondents. Sometime in June 1983, herein
petitioners allegedly occupied illegally portions of the land. 2
Petitioners' answer to the complaint asserted that Apolonio Egao is the registered
owner of the parcel of land known as Lot No. 662, Pls 854 with an area of 3,451 sq.
meters evidenced by OCT No. P-3559 issued by the Register of Deeds of Bukidnon
pursuant to Free Patent No. 298112 dated 12 August 1965; that he (Apolonio Egao)
and his family have been in actual, physical, adverse, open and continuous
possession thereof even before the issuance to him of the free patent; that the land
has never been sold by reason of the prohibition against alienation under
Commonwealth Act No. 141 (Public Land Law); and that the instant case was the
fourth in a series filed against the Egaos and is part of respondents' scheme to grab
said parcel of land from the petitioners.

WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one is
rendered:
1.
Declaring the plaintiffs as the absolute owners of the land known as Lot No.
662, Pls-854 of the Land Registry of Bukidnon;
2.
Ordering the Register of Deeds of Bukidnon to effect the cancellation of
Original Certificate of Title No. P-3559 in the name of Apolonio Egao and in lieu
thereof, another one be issued in the names of plaintiffs, after payment of the proper
fees;
3.
Ordering the defendants to surrender peaceful possession of the land to
plaintiffs and to desist from further disturbing the possession over the land of plaintiffs;
4.

Judge Felicidario M. Batoy ruled in favor of the Egaos, herein petitioners (defendants
in the court a quo), ordering respondent Severo Bontilao (plaintiff in the court a quo)
to immediately deliver to the Egaos the owner's duplicate copy of Original Certificate
of Title No. P-3559. Said trial judge held:
In the instant case, granting arguendo, that defendants executed the 2 documents in
favor of Marfori (Exhs. A & B) after the filing of the application for free patent but
before the issuance of the latter, without the approval of the Director of Lands, upon
issuance of Free Patent No. 29811 2 on August 12, 1965, the said deeds of sale
(Exhs. A & B) were ipso facto cancelled or superseded by said free patent. Moreover,
it appears from the evidence that defendants never vacated or abandoned their
possession of Lot No. 662 as they have continuously lived on said lot since 1950, a
fact admitted by the plaintiffs themselves. And as long as Original Certificate of Title
No. P-3559 remains in the name of defendant Apolonio Egao, married to Beatriz
Menoza Egao, this is the ultimate and best evidence of title granted by the
government which must be honored and respected by the courts. In a nutshell, the
plaintiffs miserably failed to present or show any title to Lot No. 662, PLS-854 which
should be quieted or freed from any cloud of doubt as prayed for in their complaint
and they further failed to show that they are entitled to the ownership and possession
to Lot No. 662, PLS-854. 3

Ordering the defendants to pay the costs.

SO ORDERED. 5
Petitioners turn to this Court for relief, assailing the appellate court for allegedly
committing grave abuse of discretion amounting to lack of jurisdiction in holding that:
a.

Petitioners sold Lot 662 to Roberto Marfori;

b.
It was only in 1983 when Petitioners wrested possession over the land from
private respondents;
c.

Petitioners never denied the sales made in favor of Marfori, in their answer;

d.

Private Respondents are "innocent purchasers for value. 6

and/or for allegedly deciding questions of substance not in accordance with law
and/or applicable decisions of this Court.

Private respondents went to the Court of Appeals in CA-G.R. No. 09539. Setting
aside the RTC decision, the appellate court ** held, in part, thus-

Without giving due course to the petition, the Court required respondents to comment.
7 After comment, the Court resolved to require petitioners to file a reply, which they
did. Respondents filed a rejoinder. Considering the allegations, issues and arguments
adduced, the Court resolved to give due course to the petition. Upon submission by
the parties of their respective memorandum, the petition was submitted for decision. 8

That the land is titled in the name of defendant Apolonio Egao is not in question. The
main point in issue is whether defendants could validly sell the land to Marfori who in
turn transferred ownership thereof to the plaintiff. 4

Validity of the Deeds of Sale executed between Marfori (as purchaser) and the
petitioners (as sellers) is the main issue to be resolved, in determining respondents'
right over the disputed land, the respondents being the transferees of Marfori.

Marfori and Egao were both held by the Court of Appeals in pari delicto for violating
the five (5) year restriction under Sec. 118, Commonwealth Act No. 141 as amended
by Act No. 496 against encumbrance or alienation of lands acquired under a free
patent or homestead; hence, they cannot, according to the appellate court, seek
affirmative relief, but respondents on the other hand were declared innocent
purchasers for value who obtained the owner's duplicate copy of the OCT (still in the
name of the Egaos) from Marfori who transferred to them (respondents) physical
possession of the property. Finally, the Court of Appeals held:

It is undisputed that Free Patent No. 298112 was issued to petitioner Apolonio Egao
over Lot No. 662 on 12 August, 1965. Sec. 118 of Commonwealth Act No. 141, as
amended, prohibits the alienation or encumbrance, within a period of five (5) years
from the date of issuance of the patent, of lands acquired under free patent or
homestead. Assuming, arguendo, the authenticity of the Deeds of Sale executed by
the Egaos in favor of Marfori over portions of Lot No. 662 (the land in question), dated
7 May 1964, 14 January and 6 October 1965, it clearly appears that all deeds were

executed within the prohibited period of five (5) years. As correctly found by the
appellate courtSection 124 of the Public Land Act provided [sic] that any acquisition, conveyance,
abenation, transfer or other contract made or executed inviolation of any of the
provisions of Sections 118,121,120,122 and 123 of this Act shall be unlawful, null and
void from its execution and shall produce the effect of annulling and cancelling the
grant, title, patent or permit originally issued, recognized or confirmed, actually or
prescriptively, and cause the reversion of the property and its improvements to the
state. 9
Petitioners deny the authenticity and due execution of the notarized deeds of sale in
favor of Marfori, asserting continued ownership over the land by virtue of a Torrens
Certificate of Title issued in their name. While the Court is not satisfied with
respondents' explanation of their failure to present the notaries public (who were
residents of a neighboring province) to affirm their participation in the preparation of
the Deeds, the Court also finds as insufficient the mere denials by petitioners as to
due execution and authenticity of said Deeds of Sale. A notarial document is evidence
of the facts in clear unequivocal mariner therein expressed. It has in its favor the
presumption of regularity To contradict all these there must be evidence that is clear,
convincing and more than merely preponderant. 10 The question of authenticity being
one of fact, the Court will not disturb the conclusions of the Court of Appeals on the
matter.
Original Certificate of Title No. P-3559 over the land in dispute was issued on 1 March
1966, a few months after the execution by the Egaos of the last Deed of Sale in favor
of Marfori. 11 The OCT is registered in the name of the Egaos, herein petitioners.
A Torrens title, once registered, cannot be defeated, even by adverse open and
notorious possession. A registered title under the Torrens system cannot be defeated
by prescription. The title, once registered, is notice to the world. All persons must take
notice. No one can plead ignorance of the registration. 12
Contrary to the appellate court's conclusion, respondents are not innocent purchasers
for value. 13 An "innocent purchaser for value" is deemed, under the Torrens system,
to include an innocent lessee, mortgagee or other encumbrancer for value. 14 Where
a purchaser neglects to make the necessary inquiries and closes his eyes to facts
which should put a reasonable man on his guard as to the possibility of the existence
of a defect in his vendor's title, and relying on the belief that there was no defect in
the title of the vendor, purchases the property without making any further
investigation, he cannot claim that he is a purchaser in good faith for value.
Furthermore, a private individual may not bring an action for reversion or any action
which would have the effect of cancelling a free patent and the corresponding
certificate of title issued on the basis thereof, with the result that the land covered
thereby will again form part of the public domain, as only the Solicitor General or the
officer acting in his stead may do so. 16
The rule of pari delicto non oritur actio (where two persons are equally at fault neither
party may be entitled to relief under the law), admits of exceptions and does not apply
to an inexistent contract, such as, a sale void ab initio under the Public Land Act,
when its enforcement or application runs counter to the public policy of preserving the
grantee's right to the land under the homestead law. 17
Sec. 51, par. 2 of the Property Registration Decree (PD 1529), formerly Sec. 50 of the
Land Registration Act (Act No. 496) expressly provides that the registration of the
Deed is the operative act that binds or affects the land insofar as third persons are
concerned. The law requires a higher degree of prudence from one who buys from a

person who is not the registered owner, when the land object of the transaction is
registered land. While one who buys from the registered owner need not look behind
the certificate of title, one who buys from another who is not the registered owner is
expected to examine not only the certificate of title but all factual circumstances
necessary for him to determine if there are any flaws in the title of the transferor, or in
his capacity to transfer the land. Failing to exercise caution of any kind whatsoever is
tantamount to bad faith. 18
Deeds of sale of patented lands, perfected within the prohibited five (5) year period
are null and void (Sec. 124, Public Land Act). No title passed from the Egaos to
Marfori which could be validly transferred to herein respondents Bontilao and Dignos.
Nemo dat quod non habet (nobody can dispose of that which does not belong to him).
19
While the government has not taken steps to assert its title, by reversion, to a
homestead sold in violation of the Public Land Act, the vendor or his heirs is better
entitled to the possession of the said, the vendee being in no better situation than any
intruder. 20
Accordingly, respondents who are not innocent purchasers for value have no standing
to question petitioners' right to the land and to file an action for quieting of title.
WHEREFORE, the appealed decision of the Court of Appeals in CA G.R. CV No.
09539 is REVERSED and SET ASIDE. Meanwhile, petitioners as registered owners
are entitled to remain in physical possession of the disputed property. Respondents
are ordered to deliver the owner's duplicate copy of the OCT (No. P-3559) to
petitioners, without prejudice to an action for reversion of the land, which may be
instituted by the Solicitor General for the State.
24) G.R. Nos. L-48971 & 49011
January 22, 1980
PACIFICO GARCIA, petitioner-appellant,
vs.
BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO D.
BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON
VICENCIO, respondents-appellees;
PHILIPPINE NATIONAL BANK, petitioner-appellant,
vs.
COURT OF APPEALS (Third Division), CAROLINA LAPUZ- GOZON, assisted by her
husband BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO
D. BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON
VICENCIO, respondents-appellees.
Agapito Mendoza & Antonio G. Ibarra for appellant Pacifico Garcia
Laurel Law Office and Flores Ocampo, Dizon & Domingo for private appellees.

AQUINO, J.:
This case is about the issuance of two or more transfer certificates of title to different
persons for the same lots, or subdivisions thereof, due to the fact that the original title

was allegedly not cancelled when the first transfer certificates of title were issued to
replace the original title. The factual background is as follows:
1.
On August 9, 1918, a deed of sale for two parcels of land, E and G (with a
total area of more than seven hectares) of the Hacienda Maysilo, located in Malabon,
Rizal and covered by Original Certificate of Title No. 983, was executed in favor of
Ismael Lapus a bona fide occupant thereof. The deed was executed pursuant to an
order of the Court of First Instance of Rizal in Civil Case No. 391, Negao vs. Vidal, a
partition proceeding involving the said hacienda (See Bustamante vs. Tuason, 47
Phil. 433, 434).
2.
The deed of sale was presented for registration at two-twenty five in the
afternoon of January 15, 1920 and was recorded as Primary Entry No. 7710. That
deed of sale itself contains the following entries showing that it was annotated on the
back of OCT NO. 983:
Presentado en este Registro a las 2:25 de la tarde del dia de hoy segun el Asiento
No. 7710 de tomo 10 del Libro Diario, Pasig, Rizal, Enero 15, 1920.
Register of Deeds (Exh. B-12)
Inscrito el documento que precede al dorso del certificado de Titulo Original No. 983
del Tomo A-9, de inscritor en las paginas 113 y 114 ambos del libro T-25 de registro
como certificados de titulo Nos. 4910 y 4911, archivado en el legajo T-#4910. Pasig,
Rizal, Enero 15, 1920.:
Register of Deeds (Exh. B-1).
However, it seemed that, contrary to the foregoing entry and the official routine or
standard operating procedure, the deed of sale was not annotated on OCT No. 983
and that, consequently, that title was apparently not cancelled. Why that annotation
did not appear in OCT No. 983 and why there was no notation of the cancellation of
that title, as it appeared in 1962, is a mystifying circumstance in this case.
3.
As a result of the registration of that deed of sale, Transfer Certificate of 'Title
No. 4910 was issued to Lapus for the two parcels of land, E and G, and I Transfer
Certificate of Title No. 4911 was issued for the remaining five lots covered by OCT
No. 983 (which embrace an area of more than two hundred fifty-eight hectares
registered in the names of more than twenty-six-co-owners). TCT Nos. 4910 and
4911 contain the following entries: "Transfer from No. 983. Originally registered on the
29th day of January, in the year 1917 in Book No. A-9, page 215, of the said Province
of Rizal, pursuant to a decree entered in Case No. 3850."
4.
Lapus on different occasions mortgaged the two parcels of land to secure
his obligations to the Philippine National Bank, the Government and the Philippine
Trust Company. He died in 1951. The two parcels of land were inherited by his
daughter, Carolina Lapuz-Gozon. She became the registered owner of the two lots.
She subdivided them into fifty-five lots. She sold some of the subdivision lots to her
co-respondents-appellees herein. Lapus and his successors-in-interest have been in
possession of the two parcels even before 1910 or for more than seventy years.

5.
Meanwhile, in 1962, certain. alleged heirs (collectively known as the
Riveras) of the late Maria de la Concepcion Vidal filed a motion in Land Registration
Cases Nos. 4429 and 4496 of the Court of First Instance of Rizal, alleging that they
were deprived of their participation in the Hacienda Maysilo covered by OCT No. 983
and for other titles and that, since only OCT No. 983 was supposedly unencumbered,
all the land covered by that title should be adjudicated to them. The court granted the
motion. It should be stressed that OCT No. 983 appears to have remained
uncancelled notwithstanding the sale to Lapus of two parcels covered by it and the
fact that it had been replaced by TCT Nos. 4910 and 4911.
6.
On June 7, 1963, OCT No. 983 was definitely cancelled and in lieu thereof
Transfer Certificate of Title No. 112236 was issued to the Riveras. Later, Lots 5 and 7
of the said title (corresponding to parcels E and G which were sold to Ismael Lapus in
1918 as stated earlier) were assigned by Bartolome Rivera to Sergio Cruz and
Pacifico Garcia and TCT Nos. 112743 and 112742 were issued to Cruz and Garcia,
respectively. Thus, two sets of transfer certificates of title for Lots E and G or 5 and 7,
originally covered by OCT No. 983, were issued, one to the heir of Ismael Lapus and
another set to the successors-in-interest of the Riveras.
7.
On October 22, 1964, Garcia subdivided Lot 7 (G) into Lots A and B. Garcia
retained Lot A and obtained TCT No. 134958 for it. He assigned Lot B to Antonio
Muoz on November 5, 1964. As a consequence of the assignment, TCT No. 112742
was cancelled and TCT No. 134957 was issued to Muoz. In 1965, he mortgaged Lot
B to the Associated Banking Corporation to secure a loan of P200,000.
8.
On the other hand, on July 17, 1964 Cruz sold to Santiago Go Lot 5 (E)
covered by TCT No. 112743. TCT No. 131329 was issued to Go on August 25,1964.
On December 23, 1964, Go mortgaged Lot 6 to the Philippine National Bank (PNB) to
secure a loan of P50,000 which was later increased to P60,000.
9.
Muoz and Go did not pay their mortgage debts. The two banks foreclosed
the mortgages. The PNB bought the mortgaged lot at the auction sale held on May 4.
1967. The sheriff issued to it a certificate of sale dated May 19, 1967 but at that time
there was already a notice of lis pendens annotated on the title of the mortgaged lot.
TCT Nos. 212163 and 236881 for the mortgaged lots were issued to the Associated
Banking Corporation and the Philippine National Bank, respectively.
10.
The Riveras and their successors-in-interest have never set foot on the
disputed lots.
11.
Mrs. Gozon later learned that the Riveras and their successors-in-interest
had acquired the land (more than two hundred fifty-eight hectares) covered by OCT
No. 983. Her lawyer and a surveyor informed her that parcels E and G, which she
inherited from her father, were identical to Lots 5 and 7 which were conveyed to Cruz
and Garcia. She registered adverse claims on the titles covering Lots 5 and 7. On
December 27, 1965 she and the persons to whom she had transferred portions of
parcels E and G filed with the Court of First Instance of Rizal at Caloocan City against
the Riveras, Cruz, Muoz, Garcia, Associated Banking Corporation, PNB and others
an action to quiet title and for damages.

12.
A notice of lis pendens was annotated on January 25, 1966 on the titles of
Garcia, Muoz and Go. The notice of lis pendens was annotated on the title of the
PNB when the sale in its favor was registered on December 13, 1969.
13.
The trial court in its decision of July 30, 1975 declared valid TCT Nos.
141802 to 141855 and 143512 issued to Mrs. Gozon and her co-plaintiffs. It voided
TCT No. 112235 issued to the Riveras and all titles and transactions emanating
therefrom insofar as those titles covered the lots embraced in plaintiffs' titles. The
Riveras were ordered to pay the plaintiffs twenty thousand pesos as attorney's fees.
14.
The trial court also ordered Muoz to pay the Associated Banking
Corporation, in the event that the bank would be evicted from the lot covered by TCT
No. 212153, two hundred sixty-five thousand seventy-two pesos and fifteen centavos
with twelve percent interest per annum from the date of the eviction plus ten thousand
pesos as attorney's fees.
15. Santiago Go was ordered to pay the PNB, should it be evicted from the lot
covered by TCT No. 236881, the sum of sixty thousand pesos plus nine percent
interest per annum from the date of the eviction and six thousand pesos as attorney's
fees.
16.
That judgment of the trial court was affirmed by the Court of Appeals in its
decision of May 25, 1978. Garcia and the PNB appealed from that decision. The
Associated Banking Corporation, now the Associated Citizens Bank, tried to appeal
but it was not able to file its petition for review (L-49010).
Garcia contends that the Court of Appeals erred in not holding that his title is valid
and that the titles of Ismael Lapus and his successors-in-interest lost their right to the
disputed lots due to their negligence or inaction.
The issue is whether the 1920 title issued to Lapus and the titles derived therefrom
should prevail over the 1963 title issued to the Riveras and the subsequent titles
derived from it. Should Lapus' title prevail even if it was not annotated by the register
of deeds on the anterior or parent title which was not cancelled before 1963? It was
that noncancellation which led to the issuance of the duplicative title to the Riveras
and eventually to the execution of the controversial mortgages and foreclosure sales
to the two banks.
We hold that the two appeals have no merit. The title of Lapus and the titles derived
therefrom should be given effect. The title of the Riveras and the titles springing from
it are void.
There can be no doubt that Lapus was an innocent purchaser for value. He validly
transmitted to his successors-in-interest his indefeasible title or ownership over the
disputed lots or parcels of land. That title could not be nullified or defeated by the
issuance forty-three Years later to other persons of another title over the same lots
due to the failure of the register of deeds to cancel the title preceding the title issued
to Lapuz. This must be so considering that Lapus and his interest remained in
possession of the disputed successors in lots and the rival claimants never
possessed the same.

"The general rule is that in the case of two certificates of title, purporting to include the
same land, the earlier in date prevail, whether the land comprised in the latter
certificate be wholly, or only in part, comprised in the earlier certificate" (Hogg,
Australian Torrens System 823, citing cases and cited in Legarda and Prieto vs.
Saleeby, 31 Phil. 590, 595).
"Where two certificates (of title) purport to include the same land, the earlier in date
prevails. ... In successive registrations, where more than once certificate is issued in
respect of a party estate or interest in land, the Person claiming under the prior
certificate is entitled to the estate or interest; and that person is deemed to hold under
the prior certificate who is the holder of, or whose claim is derived directly or indirectly
from the person who was the holder of the earliest certificate issued in respect thereof
" (Niblack, Analysis of the Torrens System page 237, cited in Legarda and Prieto vs.
Saleeby, supra, pages 595-6).
And the rule that in case of double registration the owner of the earlier certificate is
the owner of the land applies to the successive vendees of the owners of such
certificates. "The vendee of the earlier certificate would be the owner as against the
vendee of the owner of the later certificate" (Legarda and Prieto vs. Saleeby, supra,
pages 597-9).
It is settled that is this jurisdiction the maxim prior est in tempore, potior est in jure (he
who is first in time is preferred in right) is followed in land registration matters (La
Urbana vs. Bernardo, 62 Phil. 790, 806).
Appellant Garcia invokes the ruling that the mere entry of a document in the day or
entry book without noting it on the certificate of title is not a sufficient registration
(Bass vs. De la Rama, 73 Phil. 682, 685).
That ruling was superseded by the holding in the later six cases of Levin vs. Bass, 91
Phil. 420, where a distinction was made between voluntary and involuntary
registration, such as the registration of an attachment, levy upon execution, notice of
his pendens, and the like. In cases of involuntary registration, an entry thereof in the
day book is a sufficient notice to all persons even if the owner's duplicate certificate of
title is not presented to the register of deeds.
On the other hand, according to the said cases of Levin vs. Bass, in case of voluntary
registration of documents an innocent purchaser for value of registered land becomes
the registered owner, and, in contemplation of law the holder of a certificate of title,
the moment he presents and files a duly notarized and valid deed of sale and the
same is entered in the day book and at the same time he surrenders or presents the
owner's duplicate certificate of title covering the land sold and pays the registration
fees, because what remains to be done lies not within his power to perform. The
register of deeds is duty bound to perform it. (See Potenciano vs. Dineros, 97 Phil.
196.)
The instant case is not Identical to the Bass cases. Here the deed of sale in favor of
Lapus, which was judicially authorized, was entered in the entry book and a new title
was issued to him. As already stated, and this point should be underscored, the deed
of sale in favor of Lapus contains the notation that it was annotated on the back of
OCT No. 983 (presumably, the original and owner's duplicate thereof).

But why in 1962 it appeared that no such annotation was found on the back of OCT
No. 983, contrary to what was stated in the 1918 deed of sale, is a mystery that the
trill court and the plaintiffs failed to unravel during the trial. Moreover, the title issued
to Lapus contains the usual notation that it was a transfer from a previous title which
in this case was OCT No. 983.

two Torrens titles were issued for the same land, recommended the cancellation of
the later title issued to the Gaffud spouses. As the PNB refused to cancel the
mortgaged executed by Gatioan, in spite of the fact that she had made full payment of
the mortgage debt, she filed against the Gaffud spouses and the PNB an action to
quiet title.

It should be further observed that the deed of sale in favor of Lapus and the titles
issued to him and his successors interest together with his mortgage in 1929 of the
disputed lots to the PNB itself, are all a matter of public record in the registry of
deeds.

It was held that Gatioan's title should prevail over that of the Gaffud spouses and that
the mortgage executed by them in favor of the PNB was void. The Gaffud spouse
were ordered to pay damages to Gatioan.

As stressed in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 600, "the record is notice
to all the world. All persons are charged with the knowledge of what it contains. All
persons dealing with the land so recorded, or any portion of it, must be charged with
notice of whatever it contains. The purchaser is charged with notice of every fact
shown by the record and is presumed to know every fact which the record discloses.
"When a conveyance has been properly recorded, such record is constructive notice
of its contents and all interests, legal and equitable, included therein." "Under the rule
of notice, it is presumed that the purchaser has examined every instrument of record
affecting the title. Such presumption is irrefutable. He is charged with notice of every
fact shown by the record and is presumed to know every fact which an examination of
the record would have disclosed" (Legarda and Prieto vs. Saleeby, supra, page 600).
As Justice Johnson says, "this presumption cannot be overcome by proof of
innocence or good faith. Otherwise, the very purpose and object of the law requiring a
record would be destroyed. Such presumption cannot be defeated by proof of want of
knowledge of what the record contains any more than one may be permitted to show
that he was ignorant of the provisions of the law. The rule that all persons must take
notice of the facts which the public record contains is a rule of law. The rule must be
absolute. Any variation would lead to endless confusion and useless litigation"
(Legarda and Prieto vs. Saleeby, supra, pp. 600-601).
As to the PNB's claim that it was a mortgagee and purchaser in good faith and for
value, the Appellate Court held that the bank should have made an on-the-spot
investigation of the lot mortgaged by Go to ascertain whether he was in possession of
it or it was claimed by other persons. Its failure to do so precludes the bank from
being considered as a mortgagee in good faith and for value (Gatioan vs. Gaffud, L21953, March 28, 1969, 27 SCRA 706).
On the other hand, the trial court held that the PNB was not a buyer in good faith
when it bought Go's lot at the auction sale because there was already a notice of his
pendens annotated on his title.
In the Gatioan case, it appears that in 1935 Rufina Permison secured a Torrens title
for a parcel of land on the basis of a free patent. The land was sold to Encarnacion
Gatioan and Transfer Certificate of Title No. T-1212 was issued to her. She
mortgaged the land three times to the PNB
In 1956, the spouses Sixto Gaffud and Villamora Logan were able to secure a Torrens
title for the same lot also on the basis of a free patent. They mortgaged the land also
to the PNB. The Secretary of Agriculture and Natural Resources, on discovering that

Since the applicable rule in the instant case is that the earlier certificate of title should
be recognized as superior and controlling there is no justification for relying on the
doctrine laid down by Justice Holmes in Eliason vs. Wilborn 281 U.S. 457, that "as
between two innocent persons, one of whom must suffer the consequence of a
breach of trust, the one who made it possible by his act of confidence must bear the
loss."
There was no breach of trust in this case. What is note. worthy in this case is that
after it was recited in the registered deed of sale that sale was annotated at the back
of the title covering the lots sold, it turned out that the title did not contain such an
annotation and that the title was not cancelled. For that anomaly, the purchaser,
Ismael Lapus, the how" of the earlier title, was not culpable or blameworthy.
WHEREFORE, the judgment of the Court of Appeals, affirming the decision of the trial
court, should stand. Costs against the appellants.

in the notarized deed of sale that Patricia Pampo, the mother of the accused,
participated in the sale of a parcel of land by falsifying Pampo's signature, and the
second in Criminal Case No. V-1164, for allegedly making an untruthful statement of
fact in the deed of sale, more specifically, by stating that accused was single.
25) G.R. Nos. 74226-27 July 27, 1989
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
MIZPAH R. REYES, respondent.
The crime of falsification of a public document carries with it an imposable penalty of
prision correccional in its medium and maximum periods and a fine of not more than
P5,000.00 [Art. 172, Revised Penal Code (RPC)]. Being punishable by a correctional
penalty, this crime prescribes in ten (10) years [Art. 90, par. 3 (RPC)]. The ten (10)
year prescriptive period commences to run "from the day on which the crime is
discovered by the offended party, the authorities, or their agents . . ." [Art. 91, (RCP)].
In the instant case, the public document allegedly falsified was a notarized deed of
sale registered on May 26, 1961 with the Register of Deeds in the name of the
accused, private respondent herein, Mizpah R. Reyes. The two informations for
falsification of a public document subject matter of the controversy were, however,
filed only on October 18, 1984. The complainants claim that they discovered the
falsified notarized deed of sale in June 1983. The Court is tasked with determining
whether the crime has prescribed which hinges on whether or not its discovery may
be deemed to have taken place from the time the document was registered with the
Register of Deeds, consistent with the rule on constructive notice.
The antecedent facts are as follows:
The spouses Julio Rizare and Patricia Pampo owned a parcel of land located in Lipa
City registered in their names under TCT No. T-7471. Both are now deceased, the
husband having died on September 6, 1970 and his wife on August 7, 1977. They
were survived by the following children: the accused Mizpah R. Reyes and the
complainants Cristina R. Masikat, Julieta R. Vergara and Aurora Rizare Vda. de
Ebueza.
In June 1983, the complainants allegedly discovered from the records of the Register
of Deeds of Lipa City that the abovementioned property had already been transferred
in the name of Mizpah Reyes, single, of legal age, Filipino and resident of the City of
Lipa, Philippines" under TCT No. T-9885. They further allegedly discovered that the
conveyance was effected through a notarized deed of sale executed and signed on
May 19, 1961 by their parents Julio Rizare and Patricia Pampo. The deed of sale was
registered with the Register of Deeds of Lipa City on May 26, 1961. Upon
examination of the document, they found that the signature of their parents were
allegedly falsified and that accused also made an untruthful statement that she was
single although she was married to one Benjamin Reyes on May 2, 1950. The
document was referred by the complainants to the National Bureau of Investigation
(N.B.I.) for examination of the signatures of their parents and a report was returned
with the finding that the signature of Julio Rizare was genuine but that of Patricia
Pampo was forged. Upon complaint by the sisters of the accused and after
conducting an investigation, the fiscal filed with the Regional Trial Court of Batangas,
Branch XIII, Lipa City on October 18, 1984 two (2) informations both for falsification of
public document, the first in Criminal Case No. V-1163, for allegedly making it appear

Before arraignment, accused filed a motion to quash both informations on grounds

that: (1) "The criminal action or liability has been extinguished by prescription of the
crime in the light of Cabral v. Puno, 70 SCRA 606;" and (2) "The trial court had no
jurisdiction over the offense charged and the person of accused because of noncompliance with the pre-conciliation requirement of P.D. No. 1508." [Rollo, p. 33].
The trial court granted the motion and quashed the informations in the two (2) cases
stating that:
xxx
...The title, once registered, is a notice to the world. All Persons must take notice. No
one can plead ignorance of registration.
The essence, therefore, of registration is to serve notice to the whole world of the
legal status and the dealing therewith.
If registration is a notice to the whole world, then registration is in itself a notice and
therefore, the prescriptive period of registered document must start to run from the
date the same was annotated in the Register of Deeds.
In these two cases in question, prescriptive period of ten (10) years should have
started from May 26, 1960 (sic).
Considering the lapse of more than twenty (20) years before the two informations
were filed, the crimes for which the accused, Mizpah Reyes, are charged have
already prescribed.
WHEREFORE, and as prayed for, Criminal Cases Nos. V-1163 and V-1164 are
quashed. [Rollo, pp. 33-34].
From the trial court's order quashing the two (2) informations, the People, petitioner
herein, filed an appeal with the Court of Appeals (then designated as the Intermediate
Appellate Court). In a decision ** promulgated on April 3, 1986, the Court of Appeals
affirmed the trial court's order. The Court of Appeals rejected the theory of petitioner
that the prescriptive period should commence on June 1983, when the complainants
actually discovered the fraudulent deed of sale. The appellate court sustained the trial
court's ruling that the prescriptive period started on May 26, 1961, when the deed of
sale was registered with the Register of Deeds of Lipa City. Hence, this petition for
review on certiorari of the decision of the Court of Appeals, filed by the People,
through the Solicitor-General.
Among the authorities relied upon by the Court of Appeals in dismissing petitioner's
appeal is the case of Cabral v. Puno, G.R. No. L-41692, April 30, 1976, 70 SCRA 606,
where the Supreme Court made a statement to the effect that in the crime of
falsification of a public document, the prescriptive period commences from the time
the offended party had constructive notice of the alleged forgery after the document

was registered with the Register of Deeds. However, petitioner contends that this
particular statement is not doctrine but merely an obiter dictum.
The Cabral case stemmed from the filing on September 24, 1974 of an information
accusing Eugenio Cabral of the crime of falsification of public document for allegedly
falsifying on August 14, 1948 the signature of the complainant Silvino San Andres in a
deed of sale of a parcel of land. Before arraignment, petitioner moved to quash the
information on the ground of prescription of the crime, as the notarized deed of sale
was registered with the Register of Deeds on August 26, 1948. After hearing the
motion, the judge issued a resolution granting the motion to quash and dismissing the
information on the ground of prescription. Private prosecutor filed a motion for the
reconsideration of the resolution. Acting on said motion, the trial court ordered the
fiscal to make known his position. The fiscal filed a comment stating that the crime
has not prescribed as the complainant San Diego claimed that he only discovered the
crime in October 1970. Thereafter, the trial court set aside its resolution granting the
accused's motion to quash and reinstated the information. The accused brought the
case to the Supreme Court questioning the trial court's authority to set aside its
resolution granting his motion to quash. The Supreme Court ruled in favor of the
accused by holding that the aforementioned resolution has already become final and
executory for failure of the fiscal to file a motion for reconsideration within the
reglementary period. The motion for reconsideration filed by the private prosecutor
was disregarded because of the latter's lack of legal standing. Another reason given
by the Court for its decision is the following:
. . .The Rules of Court is explicit that an order sustaining a motion to quash based on
prescription is a bar to another prosecution for the same offense [Secs. 2(f) and 8,
Rule 117, Revised Rules of Court]. Article 89 of the Revised Penal Code also
provides that "prescription of the crime is one of the grounds for "total extinction of
criminal liability." Petitioner was charged with the crime of falsification under Article
172, sub-paragraphs (1) and (2) of the Revised Penal Code, which carries an
imposable penalty of prision correccional in its medium and maximum periods and a
fine of not more than P5,000.00. This crime prescribes in ten (10) years [Article 90,
Revised Penal Code]. Here, San Diego had actual if not constructive notice of the
alleged forgery after the document was registered in the Register of Deeds on August
26, 1948.

Pursuant to this rule, it has been held that a purchaser of registered land is presumed
to be charged with notice of every fact shown by the record. The Court, in explaining
the nature of the rule on constructive notice and the presumption arising therefrom
stated in Gatioan v. Gaffud, G.R. No. L-21953, March 28 1969, 27 SCRA 706, 712713, that:
xxx
When a conveyance has been properly recorded such record is constructive notice of
its contents and all interests, legal and equitable, included therein ...
Under the rule of notice, it is presumed that the purchaser has examined every
instrument of record affecting the title. Such presumption is irrebutable. He is charged
with notice of every fact shown by the record and is presumed to know every fact
which an examination of the record would have disclosed. This presumption cannot
be overcome by proof of innocence or good faith. Otherwise the very purpose and
object of the law requiring a record would be destroyed. Such presumption cannot be
defeated by proof of want of knowledge of what the record contains any more than
one may be permitted to show that he was ignorant of the provisions of the law. The
rule that all persons must take notice of the facts which the public record contains is a
rule of law. The rule must be absolute. Any variation would lead to endless confusion
and useless litigation.
xxx

xxx

It has also been ruled that when an extrajudicial partition of the property of the
deceased was executed by some of his heirs, the registration of the instrument of
partition with the Register of Deeds is constructive notice that said heirs have
repudiated the fiduciary relationship between them and the other heirs vis-a-vis the
property in question. The heirs who were not included in the deed of partition are
deemed to have notice of its existence from the time it was registered with the
Register of Deeds [De la Cerna v. De la Cerna, G.R. No. L-28838, August 31, 1976,
72 SCRA 514]. Likewise, the rule on constructive notice has been applied in the
interpretation of a provision in the Civil Code on the prescription of actions for
annulment of contracts which is parallel to Art. 91 of the Revised Penal Code. The
Civil Code provision states:

[Cabral v. Puno, supra at p. 609].

Art. 391. The action for annulment shall be brought within four years.

Although the prescription of the crime was not squarely in issue in Cabral, it is
apparent that the statement of the Court on prescription and constructive notice was
not totally irrelevant to the disposition of the case. Moreover, it is not without any legal
basis.

This period shall begin:

The rule is well-established that registration in a public registry is a notice to the

whole world. The record is constructive notice of its contents as well as all interests,
legal and equitable, included therein. All persons are charged with knowledge of what
it contains [Legarda and Prieto v. Saleeby, 31 Phil. 590 (1915); Garcia v. Court of
Appeals, G.R. Nos. L-48971 and 49011, January 22, 1980, 95 SCRA 380; Hongkong
and Shanghai Banking Corporation v. Pauli, et al., G.R. No. L-38303, May 30,
1988,161 SCRA 634; See also Sec. 52, Pres. Decree No. 1529 (1978)].

xxx
In case of mistake or fraud, from the time of the discovery of the same [Emphasis
supplied].
In Armentia v. Patriarca, G.R. No. L-18210, December 29, 1966,18 SCRA 1253,
where a notarial document recorded with the Registry of Deeds was sought to be
annulled, the Court, interpreting the phrase "from the time of the discovery" found in
the aforequoted provision of the Civil Code, ruled that "in legal contemplation,
discovery must be reckoned to have taken place from the time the document was

registered in the Register of Deeds, for the familiar rule is that registration is a notice
to the whole world . . ." [See also Avecilla v. Yatco, 103 Phil. 666 (1958); Gerona v. De
Guzman, G.R. No. L-19060, May 29, 1964, 11 SCRA 153; Carantes v. Court of
Appeals, G.R. No. L-33360, April 25, 1977, 76 SCRA 514; Cultura v. Tupacar, G.R.
No. L-48430, December 3, 1985,140 SCRA 311; Cimafranco v. IAC, G.R. No. L68687, January 31, 1987, 147 SCRA 611; Hongkong and Shanghai Banking
Corporation v. Pauli, et al., supra.] However, petitioner contends that Art. 91 of the
Revised Penal Code which states that "the period of prescription shall commence to
run from the day the crime is discovered by the offended party,the authorities, or their
agents. . cannot be construed in the same manner because the rule on constructive
notice is limited in application to land registration cases. It is argued that haste should
be avoided in applying civil law presumptions to criminal suits.
Although caution should be observed in applying the rules of construction in civil
cases in the interpretation of criminal statutes, the Court will not hesitate to do so if
the factual and legal circumstances so warrant. Hence, in Mercado v. Santos, 66 Phil.
215 (1938), the Court applied the presumption arising from the allowance of a will to
bar a criminal action. In theft particular case, the petitioner filed a petition for the
probate of the will of his deceased wife. The will was duly probated. Sixteen (16)
months thereafter, a criminal complaint was filed against petitioner for falsification or
forgery of the will. Petitioner filed a motion to dismiss the case claiming that the order
probating the will is conclusive as to its authenticity and due execution. The motion
having been denied, the petitioner filed a petition for certiorari with the Court of
Appeals (CA) which ruled that "the judgment admitting the will to probate is binding
upon the whole world as to the due execution and genuineness of the will insofar as
civil rights and liabilities are concerned, but not for the purpose of punishment of a
crime." But the Supreme Court reversed the CA decision by ruling that, in accordance
with See. 625 of the then Code of Civil Procedure which provides that "the allowance
by the court of a will of real and personal estate shall be conclusive as to its due
execution," *** a criminal action will not lie in this jurisdiction against the forger of a
will which had been duly admitted to probate by a court of competent jurisdiction.
It is, however, insisted in this case that the rule on constructive notice applies only in
civil cases. It is argued that the law on prescription of crimes is founded on a principle
different from that of the law on prescription in civil actions. The difference, it is
claimed, precludes the application of the rule on constructive notice in criminal
actions.
The statute of limitations of civil actions was explained in Penales v. Intermediate
Appellate Court, G.R. No. 73611, October 27, 1986, 115 SCRA 223, 228 in the
following manner:
Prescription is rightly regarded as a statute of repose whose object is to suppress
fraudulent and stale claims from springing up at great distances of time and surprising
the parties or their representatives when the facts have become obscure from the
lapse of time or death or removal of witnesses . . .
On the other hand, the Court in People v. Moran, 44 Phil. 389, 405-406 (1923),
discussed the nature of the statute of limitations in criminal cases as follows:
xxx

. . . The statute is not a statute of process, to be scantily and grudgingly applied, but
an amnesty, declaring that after a certain time oblivion shall be cast over the offense;
that the offender shall be at liberty to return to his country; and resume his immunities
as a citizen; and that from henceforth he may cease to preserve the proofs of his
innocence, for the proofs of his guilt are blotted out. Hence it is that statutes of
limitation are to be liberally construed in favor of the defendant, not only because
such liberality of construction belongs to all acts of amnesty and grace, but because
the very existence of the statute is a recognition and notification by the legislature of
the fact that time, while it gradually wears out proofs of innocence, has assigned to it
fixed and positive periods in which it destroys proofs of guilt. Independently of these
views, it must be remembered that delay in instituting prosecutions is not only
productive of expense to the State, but of peril to public justice in the attenuation and
distortion, even by mere natural lapse of memory, of testimony. It is the policy of the
law that prosecutions should be prompt, and that statutes enforcing such promptitude
should be vigorously maintained. They are not merely acts of grace, but checks
imposed by the State upon itself, to exact vigilant activity from its subalterns, and to
secure for criminal trials the best evidence that can be obtained.
xxx
It is evident that there is merit in petitioner's claim that the law on prescription of civil
suits is founded on different policy considerations from that of the law on prescription
of criminal actions. However, the Court does not subscribe to the conclusion that the
presumptions and rules of interpretation used in the law on prescription of civil suits,
including the rule on constructive notice, can not be applied in criminal actions.
The considerations in providing for prescription of civil suits are based mainly on
practical and equitable grounds. The lapse of a considerably long period of time
obscures the surrounding circumstances of a particular claim or right and erodes the
integrity of whatever evidence may be presented in support of an action to enforce or
contest such claim or right. Moreover, where a particular right has accrued in favor of
a party, the enjoyment of such right cannot forever be left on a precarious balance,
always susceptible to possible challenge by an adverse party. After a certain period of
time fixed by law, the right enjoyed by a party must be accorded respect by prohibiting
adverse claims the factual basis of which can no longer be verified with certainty.
Hence, the law on prescription of civil suits is properly called a statute of repose.
The practical factor of securing for civil suits the best evidence that can be obtained is
also a major consideration in criminal trials. However, the law on prescription of
crimes rests on a more fundamental principle. Being more than a statute of repose, it
is an act of grace whereby the state, after the lapse of a certain period of time,
surrenders its sovereign power to prosecute the criminal act. While the law on
prescription of civil suits is interposed by the legislature as an impartial arbiter
between two contending parties, the law on prescription of crimes is an act of
amnesty and liberality on the part of the state in favor of the offender [People v.
Moran, supra, at p. 405]. Hence, in the interpretation of the law on prescription of
crimes, that which is most favorable to the accused is to be adopted [People v.
Moran, supra; People v. Parel, 44 Phil. 437 (1923); People v. Yu Hai, 99 Phil. 725
(1956)]. The application of the rule on constructive notice in the construction of Art. 91
of the Revised Penal Code would most certainly be favorable to the accused since
the prescriptive period of the crime shall have to be reckoned with earlier, i.e., from
the time the notarized deed of sale was recorded in the Registry of Deeds. In the

instant case, the notarized deed of sale was registered on May 26, 1961. The criminal
informations for falsification of a public document having been filed only on October
18, 1984, or more than ten (10) years from May 26, 1961, the crime for which the
accused was charged has prescribed. The Court of Appeals, therefore, committed no
reversible error in affirming the trial court's order quashing the two informations on the
ground of prescription.
WHEREFORE, in view of the foregoing, the petition is hereby DENIED and the
decision of the Court of Appeals is AFFIRMED.

CA-G.R. No. SP-04300, entitled "Rene Knecht vs. Hon. Pedro JL. Bautista, etc., et.
al.," and its resolution dated December 18, 1975, denying petitioner's motion for
reconsideration. Per Resolution dated May 4, 1976, however, We treated this case as
a special civil action (p. 217, Rollo).
The assailed decision set aside, "as having been issued in grave abuse of discretion,"
the Orders of the Court of First Instance (now Regional Trial Court) of Rizal, Branch
III, Pasay City, dated May 26, 1975 and May 27, 1976, which respectively denied
private respondent Knecht's "Urgent Motion for Intervention" and granted GSIS' "Exparte Motion for Issuance of Writ of Possession" in GLRO Record No. 317 and 1356,
or CFI Case No. 1104.
The antecedent facts in the instant case are as follows:
Mariano R. Dulay Enterprises (hereinafter referred to as Dulay) obtained on various
occassions, real estate loans from the Government Service Insurance System (GSIS
for short) all amounting to P9,535,000.00 (p. 3, Rollo). These loans were secured by
a real estate mortgage of a certain parcel of land (which included Hotel Frederick),
then covered by Transfer Certificate of Title No. 17638 of the Registry of Deeds of
Pasay City, under Act No. 3135, as amended by Act No. 4118.
As of September 10, 1974, DULAY had incurred arrearages in the payment of its
loans all amounting to P3,335,878.81. In view thereof, the GSIS instituted
extrajudicial foreclosure proceedings on the mortgaged property and on November 5,
1974, the said property was sold at public auction by the Sheriff of Pasay City to the
GSIS as the highest bidder for P13,426,382.00. A Certificate of Sale was
subsequently issued on November 22, 1974, and the same was duly registered on
December 13, 1974 (p. 4, Rollo).
On January 7, 1975, the GSIS filed with the Court of First Instance (now Regional
Trial Court) of Rizal, with station at Pasay City, an "Ex-Parte Petition for Issuance of a
Writ of Possession" in the original registration proceedings (therein docketed as
GLRO Record No. 317 and 1356, or CPI Case No. 1104), conformably with Section 4
of P.D. 385 (p. 355, Rollo).

26) G.R. No. L-42278 January 20, 1989

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,
vs.
HON. COURT OF APPEALS and RENE KNECHT, respondents.
Cesar R. Vidal for petitioner.

On January 16, 1975, private respondent Rene C. Knecht (Knecht for short), filed with
the aforesaid court, an "Urgent Motion for Intervention" claiming that DULAY had sold
the property to him on May 4, 1974 and assigned to him on November 5, 1974, the
right to redeem the same. The GSIS opposed the motion alleging that "intervention
will not lie when there is no pending litigation; when it impairs substantial rights of the
adverse party; when the intervenor is guilty of laches; and that the intervenor has no
legal interest in the property subject of a writ of possession" (p. 5, Rollo).

Norberto J. Quisumbing for private respondent.

MEDIALDEA, J.:
This is a petition for review on certiorari filed by the Government Service Insurance
System (GSIS) seeking the reversal of the decision of the respondent Court of
Appeals dated October 13, 1975, in the special civil action for certiorari docketed as

On May 26, 1975, the Court of First Instance of Rizal, with Judge Pedro JL. Bautista
presiding, denied Knecht's motion for intervention citing Section 7 of Act No. 3135
and Section 4 of PD No. 385, and, on May 27, 1975, directed the issuance of a writ of
possession in favor of the GSIS upon the latter's posting a bond in the amount of
P2,000,000.00 (p. 6, Rollo).
On June 11, 1975, Knecht filed a special civil action for certiorari with the Court of
Appeals wherein he assailed the said Orders of the Court of First Instance of Rizal as
having been issued in grave abuse of discretion amounting to lack of jurisdiction (p. 4,

Rollo). The Court of Appeals immediately, and without any prior hearing, issued a writ
of preliminary injunction, upon Knecht's filing of a bond in the sum of Pl,000.00,
enjoying the Court of First Instance of Rizal from issuing the writ of possession and
the Sheriff of Pasay City from executing the same, if already issued (p. 642, Rollo).
On October 13, 1975, respondent Court of Appeals rendered a decision (p. 78, Rollo)
(after GSIS had filed its Answer to the Petition but therefore the parties could file their
respective Memoranda) upholding Knecht's right to intervene in the proceedings for
the issuance of a writ of possession, as a successor-in-interest of the Dulays, and
standing "on better footing than a necessary or an indispensable party" (p. 89, Rollo).
Respondent Court of Appeals likewise set aside, "as having been issued in grave
abuse of discretion," the Orders of the CFI of Rizal, dated May 26, 1975 (denying the
motion for intervention) and May 27, 1975 (granting the writ of possession), and
making permanent the injunction it had earlier issued. The motion for reconsideration
filed by GSIS (p. 102, Rollo) was denied per Resolution dated December 18, 1975 (p.
108, Rollo).

1. Subject orders are predicated on Sec. 7 of Act 3135 and Sec. 4 of PD 385; hence
respondent Court of Appeals could not have possibly found the CFI of Rizal guilty of
capricious, arbitrary, whimsical or despotic exercise of judgment;
2.
Respondent Court of Appeals failed to support its conclusion of grave abuse
of discretion with a finding of capricious, arbitrary, whimsical, or despotic exercise of
judgment in issuing Orders;
3. The Extraordinary writ of certiorari is available only to correct or rectify jurisdictional
errors. It cannot be used where the error assigned is one of judgment, nothing more;
4. Other procedural infirmities suggest bias or prejudice against the lawful interest of
petitioner:
a.) the issuance of a preliminary injunction without prior hearing
b.) the bond of Pl,000.00 required of Knecht, as against the P2 M posted by GSIS

On January 7, 1976, the GSIS filed the present "Petition for Review on Certiorari"
praying for the reversal of respondent Court of Appeals' Decision.
Meantime, title to the subject property was consolidated in the name of the GSIS on
January 15, 1976. Transfer Certificate of Title No. 17638, in the name of Manuel R.
Dulay Enterprises, Inc. was cancelled and Transfer Certificate of Title No. 19836 of
the Register of Deeds of Pasay City was issued in the name of the GSIS.
On August 11, 1976, upon motion of GSIS, We issued a Writ of Preliminary
Mandatory and Prohibitory Injunction enjoining the Court of Appeals from enforcing its
final injunction issued against the GSIS, and directing Knecht: (1) to turn over to the
GSIS the possession of the subject property; (2) to submit an accounting of all
revenues derived from his hotel operations as of November 5, 1974; (3) to deposit
with this court all such revenues on hand as of turn-over of premises to GSIS.
Knecht moved to dissolve the preliminary injunction. In a Resolution dated August 18,
1976 (p. 399, Rollo), We upheld said preliminary injunction but suspended the portion
regarding deposit of revenues, and declared the case submitted for decision.
Knecht refused to comply with the preliminary injunction, prompting the GSIS to move
to declare him in contempt of court for which We issued a Show-Cause Order on
November 15, 1976 (p. 425, Rollo). On January 24, 1977, however, the day set for
the hearing of the contempt charge, the parties filed a Joint Manifestation and Motion
praying for the cancellation of the hearing in view of possible amicable settlement.
This Rollo was granted per Our Resolution dated January 28, 1977 (p. 517, Rollo).
However, the parties failed to reach an amicable settlement, prompting the GSIS to
move for immediate compliance (by Knecht) with the Resolution of August 11, 1976,
and upon his failure to do so, the immediate implementation of the Writ of Preliminary
Mandatory and Prohibitory Injunction issued by Us on August 11, 1976.
Petitioner GSIS seeks the reversal and setting aside of the decision of respondent
Court of Appeals, on the following grounds:

c.) promulgation of the decision prior to the expiration of the period granted by the
Court of Appeals for the parties to submit their respective memoranda (p. 693, Rollo).
On the other hand, respondent Knecht claims that:
1. as a purchaser of the mortgaged property, and subsequent assignee of the
redemption rights of mortgagor, (per Deed of Assignment), dated November 7, 1974,
he has pecuniary interest in the mortgaged property which would warrant his right to
intervene in the petition for issuance of the writ of possession.
2. the extrajudicial foreclosure is null and void.
The petition is impressed with merit.
Respondent Court of Appeals gravely erred in setting aside the Orders of the Court of
First Instance (now Regional Trial Court) of Rizal, dated May 26, 1975 and May 27,
1975, which respectively denied Knecht's "Urgent Motion for Intervention" and
granted GSIS' Ex-Parte Motion for Issuance of Writ of Possession.
The CFI orders denying the motion for intervention and granting the writ of
possession upon an ex-parte motion of petitioner GSIS were premised on Section 7
of Act No. 3135 and Sec. 4 of P.D. No. 385.
Section 7 provides as follows:
SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition
the Court of First Instance of the province or place where the property or any part
thereof is situated, to give him possession thereof during the redemption period,
furnishing bond in an amount equivalent to the use of the property for a period of
twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this Act.
Such petition shall be made under oath and filed in form of an ex parte motion in the
registration or cadastral proceedings if the property is registered, or in special
proceedings in the case of property registered under the Mortgage Law or under

section one hundred and ninety-four of the Administrative Code, or of any other real
property encumbered with a mortgage duly registered in the office of any register of
deeds in accordance with any existing law, and in each case the clerk of the court
shall, upon the filing of such petition, collect the fees specified in paragraph eleven of
section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as
amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall,
upon approval of the bond, order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who shall execute said order
immediately. (Emphasis ours)
It has been held:
Sections 7 and 8 of Act 3135, expressly authorize the purchaser at the public auction
in an extrajudicial foreclosure of mortgage to petition for a writ of possession during
the redemption period by filing an ex parte motion under oath for that purpose in the
corresponding registration or cadastral proceeding in the case of property with
Torrens title; and upon the filing of such motion and the approval of the corresponding
bond, the law, also in express terms, directs the court to issue the order for a writ of
possession. Under said sections, the order for a writ of possession issues as a matter
of course upon the filing of the proper motion and the approval of the corresponding
bond. The judge issuing the order following these express provisions of law cannot be
charged with having acted without jurisdiction or with grave abuse of discretion
(Emphasis ours) (Eugenio S. de Garcia vs. Hon. Ramon R. San Jose, et. al. (94 Phil
623)).
Likewise in the case of Marcelo Steel Corp. vs. Court of Appeals, G.R. Nos. L-34317
and L-34335, November 28, 1973, 54 SCRA 891), We stated that the issuance of the
writ is a legal mandate, and the judge may not be charged with grave abuse of
discretion, for complying with, and implementing said legal mandate:
Having merely followed an express provision of law, whose validity is not questioned,
the Judge cannot be charged with having acted without jurisdiction or with grave
abuse of discretion. The rule that the purchaser at a judicial public auction is not
entitled to possession during the period of redemption is not applicable to a sale
under Act No. 3135 where the granting of said possession is expressly authorized (p.
18, Rollo) (Emphasis supplied).

The right of the purchaser to be placed in the possession of the property is bolstered
by Section 8 of the aforecited Act which provides that if the judge finds the complaint
assailing the legality of the foreclosure sale justified, it shall not transfer the
possession of the property, even on appeal, but will only proceed against the bond
posted by the purchaser.
Based on the foregoing, the order for the issuance of the writ was clearly within the
power, competence and jurisdiction of the court a quo to issue.
As to the wisdom or soundness of the challenged order granting such writ of
possession, it is a matter of judgment in connection with which the remedy is ordinary
appeal. (Toribia Lamagan vs. Hon. Rafael de la Cruz and Cosme O. Follosco, G.R.
No. L-27950, July 29, 1971; 40 SCRA 101; Salvador E. Bimeda vs. Arcadio Perez
and Hon. Jose T. Surtida, 93 Phil. 636). There being no showing that the court a quo
acted whimsically or capriciously as to amount to excess or lack of jurisdiction in
issuing the questioned orders, but acted precisely in compliance with the mandatory
provisions of Sec. 7, Act 3135 and PD 385, the respondent Court of Appeals erred in
acting on the petition for certiorari, which is intended to correct defects of jurisdiction
solely and not to correct errors of procedure or matters in the court a quo's findings or
conclusions (Ilacad vs. Court of Appeals, 79 SCRA 301).
Is Knecht a proper intervenor?
In allowing Knecht to intervene in the proceedings for the issuance of the writ,
respondent Court of Appeals premised its ruling on his being the purchaser of the
mortgaged property, whose rights allegedly would be adversely affected by the
foreclosure (CA decision, p. 85, Rollo). This ruling, unfortunately, admits the validity of
the Deed of Sale with Assumption of Mortgage, executed between the Dulays and
Knecht as against petitioner GSIS. There is, however, no evidence that this sale was
registered. It is well-settled that in case of a piece of land titled under the Torrens
system, it is the act of registration that transfers the ownership of the land sold
(Agbulos vs. Alberto, G.R. No. L-17483, July 31, 1982, 115 Phil. 797; Sec. 50, Land
Registration Act, Act No. 496, now Sec. 51, Property Registration Decree, P.D. No.
1529). Moreover, this sale was made without the prior consent of GSIS, in violation of
condition No. 7 of the Mortgage Contract (p. 149, Rollo) Annex "A", Comment). Well
settled is the rule that the consent of the creditor is indispensable for a valid novation
consisting of a change of debtor (Garcia vs. Khu Yeh Chiong, 38 OG 926).

On the other hand, Sec. 4 of P.D. 385, issued on January 13, 1974 provides:
SECTION 4. As a result of foreclosure or any other legal proceedings wherein the
properties of the debtor which are foreclosed, attached, or levied upon in satisfaction
of a judgment are sold to a government financial institution, the said properties shall
be placed in the possession and control of the financial institution concerned, with the
assistance of the Armed Forces of the Philippines whenever necessary. The Petition
for Writ of Possession shall be acted upon by the court within fifteen (15) days from
the date of filing. (Emphasis ours)
In PNB vs. M. Adil, et al. (G.R. No. 52823, November 2,1982, 118 SCRA 110) We
stated that P.D. No. 385 makes it mandatory for the court to place a financial
institution in possession of the property:

In the absence of such registration and GSIS consent, Knecht was not validly
substituted as debtor (Mc Collough and Co., Inc. vs. Velasco, 46 Phil. 1), on the basis
of which he could assail and/or intervene in the proceedings for the issuance of the
writ of possession. The sale therefore did not in any manner bind GSIS which is
obliged to recognize only the Dulays as mortgagor. (Thus, the GSIS notice of
arrearages was directed solely to the Dulays. Neither is there any GSIS board
resolution officially recognizing Knecht as substitute debtor). To rule otherwise would
be to defeat the statutory remedy of foreclosure. A wily mortgagor could easily avoid
and/or delay the transfer of possession of the foreclosed property to the purchaser by
secretly conveying the same to third persons, who would then assert ownership
rights/pecuniary interests thereon to the prejudice of the legitimate purchaser.
Foregoing considered, Knecht therefore acquired no legal right over the mortgaged
property as against the GSIS, and consequently is not a proper intervenor.

Assuming the validity of the sale, then Knecht would hold the title and possess the
property as the Dulays' transferee, i.e., any right he has to the property cannot be
better than that of the transferor Dulays. Thus, in the instant case, considering that
the property has already been sold at public auction, pursuant to an extrajudicial
foreclosure, and the Dulays have not contested the validity either of the foreclosure
proceedings instituted against the mortgaged properties, or the ex parte motion for
the issuance of a writ of possession (p. 34, Rollo), the only right transferrable to
Knecht is the right to redeem the mortgaged properties within the period prescribed
by law. Knecht subscribed to this view, when he asserted a right to redeem the
foreclosed property, based on an alleged "deed of assignment of redemption rights,
dated November, 1974" (p. 134, Rollo). (See Alberto C. Roxas and Nenita de Guia vs.
Mariano Buan, et. al., G.R. No. 53798, November 8, 1988).
However, as there is likewise no evidence on record of the assignment, nor was it
duly annotated on TCT No. 17638, (covering the mortgaged property) Knecht is not
validly substituted as debtor, and the assignment is not effective against GSIS, which
is again obliged to recognize the redemption rights of the Dulays only:
There is no right conferred by law in favor of a buyer of mortgaged property to
redeem the same where the sale to such third party was not with the consent of the
mortgaged creditor' (R. Bonnevie vs. CA, G.R. No. L-4910, October 24, 1983, 125
SCRA 122, at p. 125).
Aside from the lack of legal interest, We also agree with petitioner that intervention is
not proper when there is no pending litigation.

alleged by him to be affected by such proceedings' (33 C.J., 477, cited in Eulalio
Garcia, et. al. vs. Sinforoso David, et. al., 67 Phil. 279, at p. 282).
Action, under Rule 2, Sec. 1, is defined as an ordinary suit in a court of justice, by
which one party prosecutes another for the enforcement or protection of a right, or the
prevention or redress of a wrong.
From the aforesaid definitions, it is clear that intervention contemplates a suit, and is
therefore exercisable during a trial and, as pointed out by petitioner is one which
envisions the introduction of evidence by the parties, leading to the rendition of the
decision in the case (p. 363, Rollo). Very clearly, this concept is not that contemplated
by Sec. 7 of Act No. 3135, whereby, under settled jurisprudence, the Judge has to
order the immediate issuance of a writ of possession 1) upon the filing of the proper
motion and 2) the approval of the corresponding bond. The rationale for the mandate
is to allow the purchaser to have possession of the foreclosed property without delay,
such possession being founded on his right of ownership. A trial which entails delay is
obviously out of the question.
Knecht's remedy, as correctly pointed out by petitioner GSIS, is a separate, distinct,
and independent suit, provided for in Section 8 of Act No. 3135:
And any question regarding the regularity and validity of the sale is left to be
determined in a subsequent proceeding as outlined in section 8. Such question is not
to be raised as a justification for opposing the issuance of the writ of possession,
since, under the Act, the proceeding for this is ex parte (De Gracia v. San Jose, et al.,
94 Phil. 623, p. 12, Rollo).

The proceedings in which respondent Knecht sought to intervene is an ex-parte

proceeding pursuant to Sec. 7 of Act No. 3135, and, as pointed out by petitioner, is a
"judicial proceeding brought for the benefit of one party only, and without notice to, or
consent by any person adversely interested (Stella vs. Mosele, 19 N.E., 2d. 433,435,
299 III. App. 53; Imbrought v. Parker, 83 N.E. 2d 42, 43, 336 III App. 124; City Nat.
Bank & Trust Co. v. Aavis Hotel Corporation, 280 III. App. 247), ... or a proceeding
wherein relief is granted without an opportunity for the person against whom the relief
is sought to be heard" (Restatement, Torts, S 674, p. 365, Rollo).

Respondent Court of Appeals also enjoined the Court a quo from implementing the
writ of possession issued on May 27, 1975, ultimately depriving petitioner GSIS of its
property rights for over a decade, and effectively barring its right to dispose of and/or
sell subject property in order to generate much needed funds.

On the other hand, Rule 12, Sec. 2 of the Revised Rules of Court on Intervention
provides:

SECTION 2. No restraining order, temporary or permanent injunction shall be issued

by the court against any government financial institution in any action taken by such
institution in compliance with the mandatory foreclosure provided in Section 1 hereof,
whether such restraining order, temporary or permanent injunction is sought by the
borrower(s) or any third party or parties, except after due hearing in which it is
established by the borrower and admitted by the government financial institution
concerned that twenty percent (20%) of the outstanding arrearages has been paid
after the filing of foreclosure proceedings.

SEC. 2. Intervention. - Any person may, before or during a trial be permitted by the
court, in its discretion, to intervene in an action, if he has legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or when
he is so situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof' (emphasis supplied).
Intervention is defined as "a proceeding in a suit or action by which a third person is
permitted by the court to make himself a party, either joining plaintiff in claiming what
is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff,
or demanding something adversely to both of them; the act or proceeding by which a
third person becomes a party in a suit pending between others; the admission, by
leave of court, of a person not an original party to pending legal proceedings, by
which such person becomes a party thereto for the protection of some right of interest

Section 2 of PD 385 makes it mandatory for the Court to place a government financial
institution in possession of the property. The injunction against the petitioner from
taking possession of the property rendered nugatory the provisions of the decree:

x.

(See T. Lamagan vs. Hon. R. de la Cruz and C. O. Follosco, supra; and S. E. Bimeda
vs. A. Perez and Hon. J. T. Surtida, supra) likewise specially noting the provisions of
the 13th Whereas Clause, which state:

WHEREAS, it has been shown by the experience of government financial institutions

that in instances where extrajudicial foreclosure on large loans is successfully
pursued, the assets, aside from land, that form part of the foreclosed collaterals,
including buildings, machinery, equipment, materials, furniture and fixtures, are
usually pilfered or lost rendering it necessary that the foreclosing government creditor
have a writ of possession issued in its favor without delay after the foreclosure
auction sale. (Emphasis ours)
As regards the validity of the foreclosure sale, this matter has been resolved in the
decision of the Court of Appeals in CA-G.R. No. Civil Case No. 08858, (promulgated
March 15, 1988) (P. 695, Rollo) which affirmed the decision of the lower court
dismissing the action for annulment of foreclosure, separately filed by Knecht:
There was no fraudulent inducement committed by the GSIS on the appellant and the
foreclosure sale was valid. Contrary to appellant's narrow view, Manuel Dulay himself,
in Annex Q of the basic complaint, requested for the deferment of the payment of the
principal and the interests of his loan and this alone is indicative that Dulay was then
in arrears. To demonstrate the infirmity of the sale with assumption of mortgage, it is
at once flagrant and obvious from the records that Rene Knecht and Dulay
Enterprises entered into the assumption of mortgage in derogation of the original
mortgage contract between GSIS and Dulay Enterprises to the effect that any
disposition, transfer or encumbrance of the properties must be made with the prior
written consent of the mortgagee (Annex F, Complaint, p. 116, Record). Now, had not
the appellant and conformity of the mortgagee GSIS, the course of events and
proceedings would have necessarily taken an entirely different path.
Foreclosure was clearly in order and the GSIS had a perfect right to protect its
investment it appearing that the first loan granted to the Dulay spouses was granted
in 1968 yet and the auction sale was conducted more than six (6) years thereafter, or
on November 5, 1974. The presumption of regularity of the foreclosure proceedings
and subsequent proceedings as well as the consolidation of ownership by the GSIS
over the property has not been overturned by appellant.
x x x (pp. 9-10).
ACCORDINGLY, the petition is hereby granted, and the assailed decision of the
respondent Court of Appeals, dated October 13, 1975, as well as its Resolution,
dated December 8, 1975 are hereby reversed and set aside.
Further, private respondent Rene Knecht is directed:
1.) to immediately turn over to the petitioner GSIS the possession of the property
covered by TCT No. 19836 (formerly TCT No. 17638). The Armed Forces of the
Philippines is hereby directed to place petitioner in possession and control of the
properties, without any further delay, pursuant to Sec. 4 of PD No. 385, 2.) to render
an accounting of all the revenues derived from the operations thereof, from November
5, 1974, the date when petitioner extrajudicial foreclosure sale and 3.) to deliver to
petitioner all revenues on hand as of turn-over of premises to GSIS.
This decision is immediately executory.
SO ORDERED.

27) ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT
OF APPEALS, DOMINGO A. PILARES, SHERIFF ROBERTO GARCIA OF QUEZON
CITY and REGISTER OF DEEDS OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
A word or group of words conveys intentions. When used truncatedly, its meaning
disappears and breeds conflict. Thus, it is written - By thy words shalt thou be
justified, and by thy words shalt thou be condemned. (Matthew, 12:37)
Construing the new words of a statute separately is the raison detre of this appeal.
Essentially, the case before us is for cancellation of the inscription of a Notice of Levy
on Execution from a certificate of Title covering a parcel of real property. The
inscription was caused to be made by the private respondent on Transfer Certificate
of Title No. N-79073 of the Register of Deeds of Marikina, issued in the name of the
spouses Ernesto B. Uychocde and Lucita Jarin, and was later carried over to and
annotated on Transfer Certificate of Title No. N-109417 of the same registry, issued in
the name of the spouses Alfredo Sajonas and Conchita R. Sajonas, who purchased
the parcel of land from the Uychocdes, and are now the petitioners in this case.
The facts are not disputed, and are hereby reproduced as follows:
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to
sell a parcel of residential land located in Antipolo, Rizal to the spouses Alfredo
Sajonas and Conchita R. Sajonas on installment basis as evidenced by a Contract to
Sell dated September 22, 1983. The property was registered in the names of the
Uychocde spouses under TCT No. N-79073 of the Register of Deeds of Marikina,
Rizal. On August 27, 1984, the Sajonas couple caused the annotation of an adverse
claim based on the said Contract to Sell on the title of the subject property, which was
inscribed as Entry No. 116017. Upon full payment of the purchase price, the
Uychocdes executed a Deed of Sale involving the property in question in favor of the
Sajonas couple on September 4, 1984. The deed of absolute sale was registered
almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No.
Q-28850 for collection of sum of money against Ernesto Uychocde. On June 25,
1980, a Compromise Agreement was entered into by the parties in the said case
under which Ernesto Uychocde acknowledged his monetary obligation to Domingo
Pilares amounting to P27,800 and agreed to pay the same in two years from June 25,
1980. When Uychocde failed to comply with his undertaking in the compromise
agreement, defendant-appellant Pilares moved for the issuance of a writ of execution
to enforce the decision based on the compromise agreement, which the court granted
in its order dated August 3, 1982. Accordingly, a writ of execution was issued on

August 12, 1982 by the CFI of Quezon City where the civil case was pending.
Pursuant to the order of execution dated August 3, 1982, a notice of levy on execution
was issued on February 12, 1985. On February 12, 1985, defendant sheriff Roberto
Garcia of Quezon City presented said notice of levy on execution before the Register
of Deeds of Marikina and the same was annotated at the back of TCT No. 79073 as
Entry No. 123283.
When the deed of absolute sale dated September 4 1984 was registered on August
28, 1985, TCT No. N-79073 was cancelled and in lieu thereof, TCT No. N-109417
was ssued in the name of the Sajonas couple. The notice of levy on execution
annotated by defendant sheriff was carried over to the new title. On October 21,
1985, the Sajonas couple filed a Third Party Claim with the sheriff of Quezon City,
hence the auction sale of the subject property did not push through as scheduled.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice
of levy on execution upon defendant-appellant Pilares, through a letter to their lawyer,
Atty. Melchor Flores. Despite said demand, defendant-appellant Pilares refused to
cause the cancellation of said annotation. In view thereof, plaintiffs-appellees filed this
complaint dated January 11, 1986 on February 5, 1986.[1]
The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch 71,
against Domingo Pilares, the judgment creditor of the Uychocdes. The relevant
portion of the complaint alleges:

Uychocde on August 27, 1984, the same ceases to have any legal force and effect
(30) days thereafter pursuant to Section 70 of P.D. 1529;
12. The Notice of Levy annotated at the back of TCT No. 79073 being effected
pursuant to the Writ of Execution dated August 31, 1982, duly issued by the CFI (now
RTC) of Quezon City proceeding from a decision rendered in Civil Case No. 28859 in
favor of herein defendant against Ernesto Uychocde, is undoubtedly proper and
appropriate because the property is registered in the name of the judgment debtor
and is not among those exempted from execution;
13. Assuming without admitting that the property subject matter of this case was in
fact sold by the registered owner in favor of the herein plaintiffs, the sale is the null
and void (sic) and without any legal force and effect because it was done in fraud of a
judgment creditor, the defendant Pilares.[5]
Pilares likewise sought moral and exemplary damages in a counterclaim against the
Sajonas spouses. The parties appeared at pre-trial proceedings on January 21, 1987,
[6] after which, trial on the merits ensued.
The trial court rendered its decision on February 15, 1989.[7] It found in favor of the
Sajonas couple, and ordered the cancellation of the Notice of Levy from Transfer
Certificate of Title No. N-109417.
The court a quo stated, thus:

7. That at the time the notice of levy was annotated by the defendant, the Uychocde
spouses, debtors of the defendant, have already transferred, conveyed and assigned
all their title, rights and interests to the plaintiffs and there was no more title, rights or
interests therein which the defendant could levy upon;
8. That the annotation of the levy on execution which was carried over to the title of
said plaintiffs is illegal and invalid and was made in utter bad faith, in view of the
existence of the Adverse Claim annotated by the plaintiffs on the corresponding title
of the Uychocde spouses;
9. That a demand was made by the plaintiffs upon the defendant Domingo A. Pilares,
to cause the cancellation of the said notice of levy but the latter, without justifiable
reason and with the sole purpose of harassing and embarrassing the plaintiffs ignored
and refused plaintiffs demand;
10. That in view of the neglect, failure and refusal of the defendant to cause the
cancellation of the notice of levy on execution, the plaintiffs were compelled to litigate
and engage the services of the undersigned counsel, to protect their rights and
interests, for which they agreed to pay attorneys fees in the amount of P10,000 and
appearance fees of P500 per day in court.[3]

After going over the evidence presented by the parties, the court finds that although
the title of the subject matter of the Notice of Levy on Execution was still in the name
of the Spouses Uychocde when the same was annotated on the said title, an earlier
Affidavit of Adverse Claim was annotated on the same title by the plaintiffs who earlier
bought said property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that
actual notice of an adverse claim is equivalent to registration and the subsequent
registration of the Notice of Levy could not have any legal effect in any respect on
account of prior inscription of the adverse claim annotated on the title of the
Uychocdes.
xxx xxx xxx

Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986, raising
special and affirmative defenses, the relevant portions of which are as follows:

On the issue of whether or not plaintiffs are buyers in good faith of the property of the
spouses Uychocde even notwithstanding the claim of the defendant that said sale
executed by the spouses was made in fraud of creditors, the Court finds that the
evidence in this instance is bare of any indication that said plaintiffs as purchasers
had notice beforehand of the claim of the defendant over said property or that the
same is involved in a litigation between said spouses and the defendant. Good faith is
the opposite of fraud and bad faith, and the existence of any bad faith must be
established by competent proof.[8] (Cai vs. Henson, 51 Phil 606)

10. Plaintiff has no cause of action against herein defendants;

xxx xxx xxx

11. Assuming, without however admitting that they filed an adverse claim against the
property covered by TCT No. 79073 registered under the name of spouses Ernesto

In view of the foregoing, the Court renders judgment in favor of the plaintiffs and
against the defendant Pilares, as follows:

1. Ordering the cancellation of the Notice of Levy on Execution annotated on Transfer

Certificate of Title No. N-109417.
2. Ordering said defendant to pay the amount of P5,000 as attorneys fees.
3. Dismissing the Counterclaim interposed by said defendant.
Said defendant is likewise ordered to pay the costs.
Dissatisfied, Pilares appealed to the Court of Appeals[9], assigning errors on the part
of the lower court. The appellate court reversed the lower courts decision, and upheld
the annotation of the levy on execution on the certificate of title, thus:
WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed
and set aside and this complaint is dismissed.
Costs against the plaintiffs-appellees."[10]
The Sajonas couple are now before us, on a Petition for Review on Certiorari[11],
praying inter alia to set aside the Court of Appeals decision, and to reinstate that of
the Regional Trial Court.
Private respondent filed his Comment[12] on March 5, 1992, after which, the parties
were ordered to file their respective Memoranda. Private respondent complied thereto
on April 27, 1994[13], while petitioners were able to submit their Memorandum on
September 29, 1992.[14]
Petitioner assigns the following as errors of the appellate court, to wit:
I
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY
PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS
ABSOLUTE INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION
IN ITS ENTIRETY AND TO RECONCILE THE APPARENT INCONSISTENCY
WITHIN THE PROVISION IN ORDER TO GIVE EFFECT TO IT AS A WHOLE.
II
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529
IN SUCH WISE ON THE GROUND THAT IT VIOLATES PETITIONERS
SUBSTANTIAL RIGHT TO DUE PROCESS.
Primarily, we are being asked to ascertain who among the parties in suit has a better
right over the property in question. The petitioners derive their claim from the right of
ownership arising from a perfected contract of absolute sale between them and the
registered owners of the property, such right being attested to by the notice of
adverse claim[15] annotated on TCT No. N-79073 as early as August 27, 1984.
Private respondent on the other hand, claims the right to levy on the property, and
have it sold on execution to satisfy his judgment credit, arising from Civil Case No. Q28850[16] against the Uychocdes, from whose title, petitioners derived their own.

Concededly, annotation of an adverse claim is a measure designed to protect the

interest of a person over a piece of real property where the registration of such
interest or right is not otherwise provided for by the Land Registration Act or Act 496
(now P.D. 1529 or the Property Registration Decree), and serves a warning to third
parties dealing with said property that someone is claiming an interest on the same or
a better right than that of the registered owner thereof. Such notice is registered by
filing a sworn statement with the Register of Deeds of the province where the property
is located, setting forth the basis of the claimed right together with other dates
pertinent thereto.[17]
The registration of an adverse claim is expressly recognized under Section 70 of P.D.
No. 1529.*
Noting the changes made in the terminology of the provisions of the law, private
respondent interpreted this to mean that a Notice of Adverse Claim remains effective
only for a period of 30 days from its annotation, and does not automatically lose its
force afterwards. Private respondent further maintains that the notice of adverse claim
was annotated on August 27, 1984, hence, it will be effective only up to September
26, 1984, after which it will no longer have any binding force and effect pursuant to
Section 70 of P.D. No. 1529. Thus, the sale in favor of the petitioners by the
Uychocdes was made in order to defraud their creditor (Pilares), as the same was
executed subsequent to their having defaulted in the payment of their obligation
based on a compromise agreement.[18]
The respondent appellate court upheld private respondents theory when it ruled:
The above stated conclusion of the lower court is based on the premise that the
adverse claim filed by plaintiffs-appellees is still effective despite the lapse of 30 days
from the date of registration. However, under the provisions of Section 70 of P.D.
1529, an adverse claim shall be effective only for a period of 30 days from the date of
its registration. The provision of this Decree is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision in Section 110 of the Land
Registration Act (Act 496) does not provide for a period of effectivity of the annotation
of an adverse claim. P.D. No. 1529, however, now specifically provides for only 30
days. If the intention of the law was for the adverse claim to remain effective until
cancelled by petition of the interested party, then the aforecited provision in P.D. No.
1529 stating the period of effectivity would not have been inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it was effective only until
September 26, 1984. Hence, when the defendant sheriff annotated the notice of levy
on execution on February 12, 1985, said adverse claim was already ineffective. It
cannot be said that actual or prior knowledge of the existence of the adverse claim on
the Uychocdes title is equivalent to registration inasmuch as the adverse claim was
already ineffective when the notice of levy on execution was annotated. Thus, the act
of defendant sheriff in annotating the notice of levy on execution was proper and
justified.

The appellate court relied on the rule of statutory construction that Section 70 is
specific and unambiguous and hence, needs no interpretation nor construction.[19]
Perforce, the appellate court stated, the provision was clear enough to warrant
immediate enforcement, and no interpretation was needed to give it force and effect.
A fortiori, an adverse claim shall be effective only for a period of thirty (30) days from
the date of its registration, after which it shall be without force and effect. Continuing,
the court further stated;
. . . clearly, the issue now has been reduced to one of preference- which should be
preferred between the notice of levy on execution and the deed of absolute sale. The
Deed of Absolute Sale was executed on September 4, 1984, but was registered only
on August 28, 1985, while the notice of levy on execution was annotated six (6)
months prior to the registration of the sale on February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a
sale is recorded later than an attachment, although the former is of an earlier date,
the sale must give way to the attachment on the ground that the act of registration is
the operative act to affect the land. A similar ruling was restated in Campillo vs. Court
of Appeals (129 SCRA 513).
xxx xxx xxx
The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise
known as the Property Registration Decree, which provides as follows:
Section 51. Conveyance and other dealings by the registered owner.- An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds, mortgages,
leases or other voluntary instruments as are sufficient in law. But no deed, mortgage,
lease or other voluntary instrument, except a will purporting to convey or affect
registered land shall take effect as a conveyance or bind the land, but shall operate
only as a contract between the parties and as evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land in so far
as third persons are concerned, and in all cases under the Decree, the registration
shall be made in the office of the Register of Deeds for the province or city where the
land lies. (Italics supplied by the lower court.)
Under the Torrens system, registration is the operative act which gives validity to the
transfer or creates a lien upon the land. A person dealing with registered land is not
required to go behind the register to determine the condition of the property. He is
only charged with notice of the burdens on the property which are noted on the face
of the register or certificate of title.[20]
Although we have relied on the foregoing rule, in many cases coming before us, the
same, however, does not fit in the case at bar. While it is the act of registration which
is the operative act which conveys or affects the land insofar as third persons are
concerned, it is likewise true, that the subsequent sale of property covered by a
Certificate of Title cannot prevail over an adverse claim, duly sworn to and annotated
on the certificate of title previous to the sale.[21] While it is true that under the
provisions of the Property Registration Decree, deeds of conveyance of property

registered under the system, or any interest therein only take effect as a conveyance
to bind the land upon its registration, and that a purchaser is not required to explore
further than what the Torrens title, upon its face, indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto, nonetheless,
this rule is not absolute. Thus, one who buys from the registered owner need not
have to look behind the certificate of title, he is, nevertheless, bound by the liens and
encumbrances annotated thereon. One who buys without checking the vendors title
takes all the risks and losses consequent to such failure.[22]
In PNB vs. Court of Appeals, we held that the subsequent sale of the property to the
De Castro spouses cannot prevail over the adverse claim of Perez, which was
inscribed on the banks certificate of title on October 6, 1958. That should have put
said spouses on notice, and they can claim no better legal right over and above that
of Perez. The TCT issued in the spouses names on July, 1959 also carried the said
annotation of adverse claim. Consequently, they are not entitled to any interest on the
price they paid for the property.[23]
Then again, in Gardner vs. Court of Appeals, we said that the statement of
respondent court in its resolution of reversal that until the validity of an adverse claim
is determined judicially, it cannot be considered a flaw in the vendors title contradicts
the very object of adverse claims. As stated earlier, the annotation of an adverse
claim is a measure designed to protect the interest of a person over a piece of real
property, and serves as a notice and warning to third parties dealing with said
property that someone is claiming an interest on the same or has a better right than
the registered owner thereof. A subsequent sale cannot prevail over the adverse
claim which was previously annotated in the certificate of title over the property.[24]
The question may be posed, was the adverse claim inscribed in the Transfer
Certificate of Title No. N-109417 still in force when private respondent caused the
notice of levy on execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed since it was annotated?
This is a decisive factor in the resolution of this instant case.
If the adverse claim was still in effect, then respondents are charged with knowledge
of pre-existing interest over the subject property, and thus, petitioners are entitled to
the cancellation of the notice of levy attached to the certificate of title.
For a definitive answer to this query, we refer to the law itself. Section 110 of Act 496
or the Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands adverse to the
registered owner, arising subsequent to the date of the original registration, may, if no
other provision is made in this Act for registering the same, make a statement in
writing setting forth fully his alleged right or interest, and how or under whom
acquired, and a reference to the volume and page of the certificate of title of the
registered owner, and a description of the land in which the right or interest is
claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and designate a place at which all notices may be served upon him. The
statement shall be entitled to registration as an adverse claim, and the court, upon a
petition of any party in interest, shall grant a speedy hearing upon the question of the

validity of such adverse claim and shall enter such decree therein as justice and
equity may require. If the claim is adjudged to be invalid, the registration shall be
cancelled. If in any case, the court after notice and hearing shall find that a claim thus
registered was frivolous or vexatious, it may tax the adverse claimant double or treble
the costs in its discretion.

treated separately, but should be read in relation to the sentence following, which
reads:

The validity of the above-mentioned rules on adverse claims has to be reexamined in

the light of the changes introduced by P.D. 1529, which provides:

If the rationale of the law was for the adverse claim to ipso facto lose force and effect
after the lapse of thirty days, then it would not have been necessary to include the
foregoing caveat to clarify and complete the rule. For then, no adverse claim need be
cancelled. If it has been automatically terminated by mere lapse of time, the law
would not have required the party in interest to do a useless act.

Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this decree for registering the same,
make a statement in writing setting forth fully his alleged right or interest, and how or
under whom acquired, a reference to the number of certificate of title of the registered
owner, the name of the registered owner, and a description of the land in which the
right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and a place at which all notices may be served upon him. This statement
shall be entitled to registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from the date of registration.
After the lapse of said period, the annotation of adverse claim may be cancelled upon
filing of a verified petition therefor by the party in interest: Provided, however, that
after cancellation, no second adverse claim based on the same ground shall be
registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the
Court of First Instance where the land is situated for the cancellation of the adverse
claim, and the court shall grant a speedy hearing upon the question of the validity of
such adverse claim, and shall render judgment as may be just and equitable. If the
adverse claim is adjudged to be invalid, the registration thereof shall be ordered
cancelled. If, in any case, the court, after notice and hearing shall find that the
adverse claim thus registered was frivolous, it may fine the claimant in an amount not
less than one thousand pesos, nor more than five thousand pesos, in its discretion.
Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing
with the Register of Deeds a sworn petition to that effect. (Italics ours)
In construing the law aforesaid, care should be taken that every part thereof be given
effect and a construction that could render a provision inoperative should be avoided,
and inconsistent provisions should be reconciled whenever possible as parts of a
harmonious whole.[25] For taken in solitude, a word or phrase might easily convey a
meaning quite different from the one actually intended and evident when a word or
phrase is considered with those with which it is associated.[26] In ascertaining the
period of effectivity of an inscription of adverse claim, we must read the law in its
entirety. Sentence three, paragraph two of Section 70 of P.D. 1529 provides:
The adverse claim shall be effective for a period of thirty days from the date of
registration.
At first blush, the provision in question would seem to restrict the effectivity of the
adverse claim to thirty days. But the above provision cannot and should not be

After the lapse of said period, the annotation of adverse claim may be cancelled upon
filing of a verified petition therefor by the party in interest.

A statutes clauses and phrases must not be taken separately, but in its relation to the
statutes totality. Each statute must, in fact, be construed as to harmonize it with the
pre-existing body of laws. Unless clearly repugnant, provisions of statutes must be
reconciled. The printed pages of the published Act, its history, origin, and its purposes
may be examined by the courts in their construction.[27] An eminent authority on the
subject matter states the rule candidly:
A statute is passed as a whole and not in parts or sections, and is animated by one
general purpose and intent. Consequently, each part or section should be construed
in connection with every other part or section so as to produce a harmonious whole. It
is not proper to confine its intention to the one section construed. It is always an
unsafe way of construing a statute or contract to divide it by a process of etymological
dissection, into separate words, and then apply to each, thus separated from the
context, some particular meaning to be attached to any word or phrase usually to be
ascertained from the context.[28]
Construing the provision as a whole would reconcile the apparent inconsistency
between the portions of the law such that the provision on cancellation of adverse
claim by verified petition would serve to qualify the provision on the effectivity period.
The law, taken together, simply means that the cancellation of the adverse claim is
still necessary to render it ineffective, otherwise, the inscription will remain annotated
and shall continue as a lien upon the property. For if the adverse claim has already
ceased to be effective upon the lapse of said period, its cancellation is no longer
necessary and the process of cancellation would be a useless ceremony.[29]
It should be noted that the law employs the phrase may be cancelled, which obviously
indicates, as inherent in its decision making power, that the court may or may not
order the cancellation of an adverse claim, notwithstanding such provision limiting the
effectivity of an adverse claim for thirty days from the date of registration. The court
cannot be bound by such period as it would be inconsistent with the very authority
vested in it. A fortiori, the limitation on the period of effectivity is immaterial in
determining the validity or invalidity of an adverse claim which is the principal issue to
be decided in the court hearing. It will therefore depend upon the evidence at a proper
hearing for the court to determine whether it will order the cancellation of the adverse
claim or not.[30]
To interpret the effectivity period of the adverse claim as absolute and without
qualification limited to thirty days defeats the very purpose for which the statute
provides for the remedy of an inscription of adverse claim, as the annotation of an
adverse claim is a measure designed to protect the interest of a person over a piece

of real property where the registration of such interest or right is not otherwise
provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves as a warning to third parties dealing with said
property that someone is claiming an interest or the same or a better right than the
registered owner thereof.[31]
The reason why the law provides for a hearing where the validity of the adverse claim
is to be threshed out is to afford the adverse claimant an opportunity to be heard,
providing a venue where the propriety of his claimed interest can be established or
revoked, all for the purpose of determining at last the existence of any encumbrance
on the title arising from such adverse claim. This is in line with the provision
immediately following:

plaintiffs and the Uychocdes thereby depriving the former of their vested right over the
property?
It is respectfully submitted that it did not.[33]
As to whether or not the petitioners are buyers in good faith of the subject property,
the same should be made to rest on the findings of the trial court. As pointedly
observed by the appellate court, there is no question that plaintiffs-appellees were not
aware of the pending case filed by Pilares against Uychocde at the time of the sale of
the property by the latter in their favor. This was clearly elicited from the testimony of
Conchita Sajonas, wife of plaintiff, during cross-examination on April 21, 1988.[34]
ATTY. REYES

Provided, however, that after cancellation, no second adverse claim shall be

registered by the same claimant.
Should the adverse claimant fail to sustain his interest in the property, the adverse
claimant will be precluded from registering a second adverse claim based on the
same ground.

Q - Madam Witness, when Engr. Uychocde and his wife offered to you and your
husband the property subject matter of this case, they showed you the owners
transfer certificate, is it not?
A - Yes, sir.

It was held that validity or efficaciousness of the claim may only be determined by the
Court upon petition by an interested party, in which event, the Court shall order the
immediate hearing thereof and make the proper adjudication as justice and equity
may warrant. And it is only when such claim is found unmeritorious that the
registration of the adverse claim may be cancelled, thereby protecting the interest of
the adverse claimant and giving notice and warning to third parties.[32]

Q - That was shown to you the very first time that this lot was offered to you for sale?

In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title
No. N-79073 was still in effect on February 12, 1985 when Quezon City Sheriff
Roberto Garcia annotated the notice of levy on execution thereto. Consequently, he is
charged with knowledge that the property sought to be levied upon on execution was
encumbered by an interest the same as or better than that of the registered owner
thereof. Such notice of levy cannot prevail over the existing adverse claim inscribed
on the certificate of title in favor of the petitioners. This can be deduced from the
pertinent provision of the Rules of Court, to wit:

A - No, we did not decide right after seeing the title. Of course, we visited...

Section 16. Effect of levy on execution as to third persons- The levy on execution
shall create a lien in favor of the judgment creditor over the right, title and interest of
the judgment debtor in such property at the time of the levy, subject to liens or
encumbrances then existing. (Italics supplied)
To hold otherwise would be to deprive petitioners of their property, who waited a long
time to complete payments on their property, convinced that their interest was amply
protected by the inscribed adverse claim.
As lucidly observed by the trial court in the challenged decision:
True, the foregoing section provides that an adverse claim shall be effective for a
period of thirty days from the date of registration. Does this mean however, that the
plaintiffs thereby lost their right over the property in question? Stated in another, did
the lapse of the thirty day period automatically nullify the contract to sell between the

A - Yes.
Q - After you were shown a copy of the title and after you were informed that they are
desirous in selling the same, did you and your husband decide to buy the same?

Q - No, you just answer my question. You did not immediately decide?
A - Yes.
Q - When did you finally decide to buy the same?
A - After seeing the site and after verifying from the Register of Deeds in Marikina that
it is free from encumbrances, that was the time we decided.
Q - How soon after you were offered this lot did you verify the exact location and the
genuineness of the title, as soon after this was offered to you?
A - I think its one week after they were offered.[35]
A purchaser in good faith and for value is one who buys property of another without
notice that some other person has a right to or interest in such property and pays a
full and fair price for the same, at the time of such purchase, or before he has notice
of the claims or interest of some other person in the property.[36] Good faith consists
in an honest intention to abstain from taking any unconscientious advantage of
another.[37] Thus, the claim of the private respondent that the sale executed by the
spouses was made in fraud of creditors has no basis in fact, there being no evidence
that the petitioners had any knowledge or notice of the debt of the Uychocdes in favor
of the private respondents, nor of any claim by the latter over the Uychocdes

properties or that the same was involved in any litigation between said spouses and
the private respondent. While it may be stated that good faith is presumed,
conversely, bad faith must be established by competent proof by the party alleging
the same. Sans such proof, the petitioners are deemed to be purchasers in good
faith, and their interest in the subject property must not be disturbed.
At any rate, the Land Registration Act (Property Registration Decree) guarantees to
every purchaser of registered land in good faith that they can take and hold the same
free from any and all prior claims, liens and encumbrances except those set forth on
the Certificate of Title and those expressly mentioned in the ACT as having been
preserved against it. Otherwise, the efficacy of the conclusiveness of the Certificate of
Title which the Torrens system seeks to insure would be futile and nugatory.[38]
ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated
October 17, 1991 is hereby REVERSED and SET ASIDE. The decision of the
Regional Trial Court dated February 15, 1989 finding for the cancellation of the notice
of levy on execution from Transfer Certificate of Title No. N-109417 is hereby
REINSTATED.
The inscription of the notice of levy on execution on TCT No. N-109417 is hereby
CANCELLED.
Costs against private respondent.
SO ORDERED.

latter two being minors are represented by guardian ad litem, ARTURO ALCURIZA,
plaintiffs-appellants,
vs.
JUAN S. SALAO, later substituted by PABLO P. SALAO, Administrator of the Intestate
of JUAN S. SALAO; now MERCEDES P. VDA. DE SALAO, ROBERTO P. SALAO,
MARIA SALAO VDA. DE SANTOS, LUCIANA P. SALAO, ISABEL SALAO DE
SANTOS, and PABLO P. SALAO, as successors-in-interest of the late JUAN S.
SALAO, together with PABLO P. SALAO, Administrator, defendants-appellants.
Eusebio V. Navarro for plaintiffs-appellants.
Nicolas Belmonte & Benjamin T. de Peralta for defendants-appellants.

AQUINO, J.:
This litigation regarding a forty-seven-hectare fishpond located at Sitio Calunuran,
Hermosa, Bataan involves the law of trusts and prescription. The facts are as follows:
The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon, Rizal
begot four children named Patricio, Alejandra, Juan (Banli) and Ambrosia. Manuel
Salao died in 1885. His eldest son, Patricio, died in 1886 survived by his only child.
Valentin Salao.
There is no documentary evidence as to what, properties formed part of Manuel
Salao's estate, if any. His widow died on May 28, 1914. After her death, her estate
was administered by her daughter Ambrosia.
It was partitioned extrajudicially in a deed dated December 29, 1918 but notarized on
May 22, 1919 (Exh. 21). The deed was signed by her four legal heirs, namely, her
three children, Alejandra, Juan and Ambrosia, and her grandson, Valentin Salao, in
representation of his deceased father, Patricio.
The lands left by Valentina Ignacio, all located at Barrio Dampalit were as follows:
Nature of Land
Area in
square meters
(1)
One-half interest in a fishpond which she had inherited from her parents,
Feliciano Ignacio and Damiana Mendoza, and the other half of which was owned by
her co-owner, Josefa Sta. Ana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,700

28) BENITA SALAO, assisted by her husband, GREGORIO MARCELO; ALMARIO

ALCURIZA, ARTURO ALCURIZA, OSCAR ALCURIZA and ANITA ALCURIZA, the

(2)

Fishpond inherited from her parents . . . . . . . . . . . . 7,418

(3)

Fishpond inherited from her parents . . . . . . . . . . . . . 6,989

(4)

Fishpond with a bodega for salt . . . . . . . . . . . . . . . . 50,469

(5) Fishpond with an area of one hectare, 12 ares and 5 centares purchased from
Bernabe and Honorata Ignacio by Valentina Ignacio on November 9, 1895 with a
bodega for salt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,205
(6)

Fishpond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

(7)
One-half interest in a fishpond with a total area of 10,424 square meters, the
other half was owned by A. Aguinaldo . . . . . . . . . . . . . . . . . . . . . . . 5,217
(8)

Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,454

(9)
Riceland purchased by Valentina Ignacio from Eduardo Salao on January
27, 1890 with a house and two camarins thereon . . . . . . . . . . . . . . . . . . 8,065
(10)
Riceland in the name of Ambrosia Salao, with an area of 11,678 square
meters, of which 2,173 square meters were sold to Justa Yongco . . . . . . . . . .9,505
TOTAL . . . . . . . . . . . . .. 179,022 square
meters
To each of the legal heirs of Valentina Ignacio was adjudicated a distributive share
valued at P8,135.25. In satisfaction of his distributive share, Valentin Salao (who was
then already forty-eight years old) was given the biggest fishpond with an area of
50,469 square meters, a smaller fishpond with an area of 6,989 square meters and
the riceland with a net area of 9,905 square meters. Those parcels of land had an
aggregate appraised value of P13,501 which exceeded Valentin's distributive share.
So in the deed of partition he was directed to pay to his co-heirs the sum of
P5,365.75. That arrangement, which was obviously intended to avoid the
fragmentation of the lands, was beneficial to Valentin.
In that deed of partition (Exh. 21) it was noted that "desde la muerte de Valentina
Ignacio y Mendoza, ha venido administrando sus bienes la referida Ambrosia Salao"
"cuya administracion lo ha sido a satisfaccion de todos los herederos y por
designacion los mismos". It was expressly stipulated that Ambrosia Salao was not
obligated to render any accounting of her administration "en consideracion al
resultado satisfactorio de sus gestiones, mejoradas los bienes y pagodas por ella las
contribusiones (pages 2 and 11, Exh. 21).
By virtue of the partition the heirs became "dueos absolutos de sus respectivas
propiedadas, y podran inmediatamente tomar posesion de sus bienes, en la forma
como se han distribuido y llevado a cabo las adjudicaciones" (page 20, Exh. 21).
The documentary evidence proves that in 1911 or prior to the death of Valentina
Ignacio her two children, Juan Y. Salao, Sr. and Ambrosia Salao, secured a Torrens
title, OCT No. 185 of the Registry of Deeds of Pampanga, in their names for a fortyseven-hectare fishpond located at Sitio Calunuran, Lubao, Pampanga (Exh. 14). It is
also known as Lot No. 540 of the Hermosa cadastre because that part of Lubao later
became a part of Bataan.
The Calunuran fishpond is the bone of contention in this case.

Plaintiffs' theory is that Juan Y. Salao, Sr. and his sister Ambrosia had engaged in the
fishpond business. Where they obtained the capital is not shown in any documentary
evidence. Plaintiffs' version is that Valentin Salao and Alejandra Salao were included
in that joint venture, that the funds used were the earnings of the properties
supposedly inherited from Manuel Salao, and that those earnings were used in the
acquisition of the Calunuran fishpond. There is no documentary evidence to support
that theory.
On the other hand, the defendants contend that the Calunuran fishpond consisted of
lands purchased by Juan Y. Salao, Sr. and Ambrosia Salao in 1905, 1906, 1907 and
1908 as, shown in their Exhibits 8, 9, 10 and 13. But this point is disputed by the
plaintiffs.
However, there can be no controversy as to the fact that after Juan Y. Salao, Sr. and
Ambrosia Salao secured a Torrens title for the Calunuran fishpond in 1911 they
exercised dominical rights over it to the exclusion of their nephew, Valentin Salao.
Thus, on December 1, 1911 Ambrosia Salao sold under pacto de retro for P800 the
Calunuran fishpond to Vicente Villongco. The period of redemption was one year. In
the deed of sale (Exh19) Ambrosia confirmed that she and her brother Juan were the
dueos proindivisos of the said pesqueria. On December 7, 1911 Villongco, the
vendee a retro, conveyed the same fishpond to Ambrosia by way of lease for an
anual canon of P128 (Exh. 19-a).
After the fishpond was redeemed from Villongco or on June 8, 1914 Ambrosia and
Juan sold it under pacto de retro to Eligio Naval for the sum of P3,360. The period of
redemption was also one year (Exh. 20). The fishpond was later redeemed and Naval
reconveyed it to the vendors a retro in a document dated October 5, 1916 (Exh. 20a).
The 1930 survey shown in the computation sheets of the Bureau of Lands reveals
that the Calunuran fishpond has an area of 479,205 square meters and that it was
claimed by Juan Salao and Ambrosia Salao, while the Pinanganacan fishpond
(subsequently acquired by Juan and Ambrosia) has an area of 975,952 square
meters (Exh. 22).
Likewise, there is no controversy as to the fact that on May 27, 1911 Ambrosia Salao
bought for four thousand pesos from the heirs of Engracio Santiago a parcel of
swampland planted to bacawan and nipa with an area of 96 hectares, 57 ares and 73
centares located at Sitio Lewa, Barrio Pinanganacan, Lubao, Pampanga (Exh. 17-d).
The record of Civil Case No. 136, General Land Registration Office Record No.
12144, Court of First Instance of Pampanga shows that Ambrosia Salao and Juan
Salao filed an application for the registration of that land in their names on January
15, 1916. They alleged in their petition that "han adquirido dicho terreno por partes
iguales y por la compra a los herederos del finado, Don Engracio Santiago" (Exh. 17a).
At the hearing on October 26, 1916 before Judge Percy M. Moir, Ambrosia testified
for the applicants. On that same day Judge Moir rendered a decision, stating, inter
alia, that the heirs of Engracio Santiago had sold the land to Ambrosia Salao and

Juan Salao. Judge Moir "ordena la adjudicacion y registro del terreno solicitado a
nombre de Juan Salao, mayor de edad y de estado casado y de su esposa Diega
Santiago y Ambrosia Salao, de estado soltera y mayor de edad, en participaciones
iguales" (Exh. 17-e).
On November 28, 1916 Judge Moir ordered the issuance of a decree for the said
land. The decree was issued on February 21, 1917. On March 12, 1917 Original
Certificate of Title No. 472 of the Registry of Deeds of Pampanga was issued in the
names of Juan Salao and Ambrosia Salao.
That Pinanganacan or Lewa fishpond later became Cadastral Lot No. 544 of the
Hermosa cadastre (Exh. 23). It adjoins the Calunuran fishpond (See sketch, Exh. 1).
Juan Y. Salao, Sr. died on November 3, 1931 at the age of eighty years (Exh. C). His
nephew, Valentin Salao, died on February 9, 1933 at the age of sixty years according
to the death certificate (Exh. A. However, if according to Exhibit 21, he was forty-eight
years old in 1918, he would be sixty-three years old in 1933).
The intestate estate of Valentin Salao was partitioned extrajudicially on December 28,
1934 between his two daughters, Benita Salao-Marcelo and Victorina Salao-Alcuriza
(Exh. 32). His estate consisted of the two fishponds which he had inherited in 1918
from his grandmother, Valentina Ignacio.
If it were true that he had a one-third interest in the Calunuran and Lewa fishponds
with a total area of 145 hectares registered in 1911 and 1917 in the names of his aunt
and uncle, Ambrosia Salao and Juan Y. Salao, Sr., respectively, it is strange that no
mention of such interest was made in the extrajudicial partition of his estate in 1934.
It is relevant to mention that on April 8, 1940 Ambrosia Salao donated to her
grandniece, plaintiff Benita Salao, three lots located at Barrio Dampalit with a total
area of 5,832 square meters (Exit. L). As donee Benita Salao signed the deed of
donation.
On that occasion she could have asked Ambrosia Salao to deliver to her and to the
children of her sister, Victorina, the Calunuran fishpond if it were true that it was held
in trust by Ambrosia as the share of Benita's father in the alleged joint venture.
But she did not make any such demand. It was only after Ambrosia Salao's death that
she thought of filing an action for the reconveyance of the Calunuran fishpond which
was allegedly held in trust and which had become the sole property of Juan Salao y
Santiago (Juani).
On September 30, 1944 or during the Japanese occupation and about a year before
Ambrosia Salao's death on September 14, 1945 due to senility (she was allegedly
eighty-five years old when she died), she donated her one-half proindiviso share in
the two fishponds in question to her nephew, Juan S. Salao, Jr. (Juani) At that time
she was living with Juani's family. He was already the owner of the the other half of
the said fishponds, having inherited it from his father, Juan Y. Salao, Sr. (Banli) The
deed of denotion included other pieces of real property owned by Ambrosia. She
reserved for herself the usufruct over the said properties during her lifetime (Exh. 2 or
M).

The said deed of donation was registered only on April 5, 1950 (page 39, Defendants'
Record on Appeal).
The lawyer of Benita Salao and the Children of Victorina Salao in a letter dated
January 26, 1951 informed Juan S. Salao, Jr. that his clients had a one-third share in
the two fishponds and that when Juani took possession thereof in 1945, he refused to
give Benita and Victorina's children their one-third share of the net fruits which
allegedly amounted to P200,000 (Exh. K).
Juan S. Salao, Jr. in his answer dated February 6, 1951 categorically stated that
Valentin Salao did not have any interest in the two fishponds and that the sole owners
thereof his father Banli and his aunt Ambrosia, as shown in the Torrens titles issued in
1911 and 1917, and that he Juani was the donee of Ambrosia's one-half share (Exh.
K-1).
Benita Salao and her nephews and niece filed their original complaint against Juan S.
Salao, Jr. on January 9, 1952 in the Court of First Instance of Bataan (Exh. 36). They
amended their complaint on January 28, 1955. They asked for the annulment of the
donation to Juan S. Salao, Jr. and for the reconveyance to them of the Calunuran
fishpond as Valentin Salao's supposed one-third share in the 145 hectares of
fishpond registered in the names of Juan Y. Salao, Sr. and Ambrosia Salao.
Juan S. Salao, Jr. in his answer pleaded as a defense the indefeasibility of the
Torrens title secured by his father and aunt. He also invoked the Statute of Frauds,
prescription and laches. As counter-claims, he asked for moral damages amounting
to P200,000, attorney's fees and litigation expenses of not less than P22,000 and
reimbursement of the premiums which he has been paying on his bond for the lifting
of the receivership Juan S. Salao, Jr. died in 1958 at the age of seventy-one. He was
substituted by his widow, Mercedes Pascual and his six children and by the
administrator of his estate.
In the intestate proceedings for the settlement of his estate the two fishponds in
question were adjudicated to his seven legal heirs in equal shares with the condition
that the properties would remain under administration during the pendency of this
case (page 181, Defendants' Record on Appeal).
After trial the trial court in its decision consisting of one hundred ten printed pages
dismissed the amended complaint and the counter-claim. In sixty-seven printed
pages it made a laborious recital of the testimonies of plaintiffs' fourteen witnesses,
Gregorio Marcelo, Norberto Crisostomo, Leonardo Mangali Fidel de la Cruz, Dionisio
Manalili, Ambrosio Manalili, Policarpio Sapno, Elias Manies Basilio Atienza, Benita
Salao, Emilio Cagui Damaso de la Pea, Arturo Alcuriza and Francisco Buensuceso,
and the testimonies of defendants' six witnesses, Marcos Galicia, Juan Galicia,
Tiburcio Lingad, Doctor Wenceslao Pascual, Ciriaco Ramirez and Pablo P. Salao.
(Plaintiffs presented Regino Nicodemus as a fifteenth witness, a rebuttal witness).
The trial court found that there was no community of property among Juan Y. Salao,
Sr., Ambrosia Salao and Valentin Salao when the Calunuran and Pinanganacan
(Lewa) lands were acquired; that a co-ownership over the real properties of Valentina
Ignacio existed among her heirr after her death in 1914; that the co-ownership was
administered by Ambrosia Salao and that it subsisted up to 1918 when her estate was
partitioned among her three children and her grandson, Valentin Salao.

The trial court surmised that the co-ownership which existed from 1914 to 1918
misled the plaintiffs and their witnesses and caused them to believe erroneously that
there was a co-ownership in 1905 or thereabouts. The trial court speculated that if
valentin had a hand in the conversion into fishponds of the Calunuran and Lewa
lands, he must have done so on a salary or profit- sharing basis. It conjectured that
Valentin's children and grandchildren were given by Ambrosia Salao a portion of the
earnings of the fishponds as a reward for his services or because of Ambrosia's
affection for her grandnieces.
The trial court rationalized that Valentin's omission during his lifetime to assail the
Torrens titles of Juan and Ambrosia signified that "he was not a co-owner" of the
fishponds. It did not give credence to the testimonies of plaintiffs' witnesses because
their memories could not be trusted and because no strong documentary evidence
supported the declarations. Moreover, the parties involved in the alleged trust were
already dead.
It also held that the donation was validly executed and that even if it were void Juan
S. Salao, Jr., the donee, would nevertheless be the sole legal heir of the donor,
Ambrosia Salao, and would inherit the properties donated to him.
Both parties appealed. The plaintiffs appealed because their action for reconveyance
was dismissed. The defendants appealed because their counterclaim for damages
was dismissed.
The appeals, which deal with factual and legal issues, were made to the Court of
Appeals. However, as the amounts involved exceed two hundred thousand pesos, the
Court of Appeals elevated the case to this Court in its resolution of Octoter 3, 1966
(CA-G.R. No. 30014-R).
Plaintiffs' appeal. An appellant's brief should contain "a subject index index of the
matter in the brief with a digest of the argument and page references" to the contents
of the brief (Sec. 16 [a], Rule 46, 1964 Rules of Court; Sec. 17, Rule 48, 1940 Rules
of Court).
The plaintiffs in their appellants' brief consisting of 302 pages did not comply with that
requirement. Their statements of the case and the facts do not contain "page
references to the record" as required in section 16[c] and [d] of Rule 46, formerly
section 17, Rule 48 of the 1940 Rules of Court.
Lawyers for appellants, when they prepare their briefs, would do well to read and reread section 16 of Rule 46. If they comply strictly with the formal requirements
prescribed in section 16, they might make a competent and luminous presentation of
their clients' case and lighten the burden of the Court.
What Justice Fisher said in 1918 is still true now: "The pressure of work upon this
Court is so great that we cannot, in justice to other litigants, undertake to make an
examination of the voluminous transcript of the testimony (1,553 pages in this case,
twenty-one witnesses having testified), unless the attorneys who desire us to make
such examination have themselves taken the trouble to read the record and brief it in
accordance with our rules" (Palara vs. Baguisi 38 Phil. 177, 181). As noted in an old
case, this Court decides hundreds of cases every year and in addition resolves in

minute orders an exceptionally considerable number of petitions, motions and

interlocutory matters (Alzua and Arnalot vs. Johnson, 21 Phil. 308, 395; See In re
Almacen, L-27654, February 18, 1970, 31 SCRA 562, 573).
Plaintiffs' first assignment of error raised a procedural issue. In paragraphs 1 to 14 of
their first cause of action they made certain averments to establish their theory that
Valentin Salao had a one-third interest in the two fishponds which were registrered in
the names of Juan Y. Salao, Sr. (Banli) and Ambrosia Salao.
Juan S. Salao, Jr. (Juani) in his answer "specifically" denied each and all the
allegations" in paragraphs I to 10 and 12 of the first cause of action with the
qualification that Original certificates of Title Nos. 185 and 472 were issued "more
than 37 years ago" in the names of Juan (Banli) and Ambrosia under the
circumstances set forth in Juan S. Salao, Jr.'s "positive defenses" and "not under the
circumstances stated in the in the amended complaint".
The plaintiffs contend that the answer of Juan S. Salao, Jr. was in effect tin admission
of the allegations in their first cause of action that there was a co-ownership among
Ambrosia, Juan, AIejandra and Valentin, all surnamed Salao, regarding the Dampalit
property as early as 1904 or 1905; that the common funds were invested the
acquisition of the two fishponds; that the 47-hectare Calunuran fishpond was verbally
adjudicated to Valentin Salao in the l919 partition and that there was a verbal
stipulation to to register "said lands in the name only of Juan Y. Salao".
That contention is unfounded. Under section 6, Rule 9 of the 1940 of Rules of Court
the answer should "contain either a specific dinial a statement of matters in
accordance of the cause or causes of action asserted in the complaint". Section 7 of
the same rule requires the defendant to "deal specificaly with each material allegation
of fact the truth of wihich he does not admit and, whenever practicable shall set forth
the substance of the matters which he will rely upon to support his denial". "Material
averments in the complaint, other than those as to the amount damage, shall be
deemed admitted when specifically denied" (Sec. 8). "The defendant may set forth set
forth by answer as many affirmative defenses as he may have. All grounds of
defenses as would raise issues of fact not arising upon the preceding pleading must
be specifically pleaded" (Sec. 9).
What defendant Juan S. Salao, Jr. did in his answer was to set forth in his "positive
defenses" the matters in avoidance of plaintiffs' first cause of action which which
supported his denials of paragraphs 4 to 10 and 12 of the first cause of action.
Obviously, he did so because he found it impracticable to state pierceneal his own
version as to the acquisition of the two fishponds or to make a tedious and repetitious
recital of the ultimate facts contradicting allegations of the first cause of action.
We hold that in doing so he substantially complied with Rule 9 of the 1940 Rules of
Court. It may be noted that under the present Rules of Court a "negative defense is
the specific denial of t the material fact or facts alleged in the complaint essential to
plaintiff's cause of causes of action". On the other hand, "an affirmative defense is an
allegation of new matter which, while admitting the material allegations of the
complaint, expressly or impliedly, would nevertheless prevent or bar recovery by the
plaintiff." Affirmative defenses include all matters set up "by of confession and
avoidance". (Sec. 5, Rule 6, Rules of Court).

The case of El Hogar Filipino vs. Santos Investments, 74 Phil. 79 and similar cases
are distinguishable from the instant case. In the El Hogar case the defendant filed a
laconic answer containing the statement that it denied "generally ans specifically each
and every allegation contained in each and every paragraph of the complaint". It did
not set forth in its answer any matters by way of confession and avoidance. It did not
interpose any matters by way of confession and avoidance. It did not interpose any
affirmative defenses.
Under those circumstances, it was held that defendant's specific denial was really a
general denial which was tantamount to an admission of the allegations of the
complaint and which justified judgment on the pleadings. That is not the situation in
this case.
The other nine assignments of error of the plaintiffs may be reduced to the decisive
issue of whether the Calunuran fishpond was held in trust for Valentin Salao by Juan
Y. Salao, Sr. and Ambrosia Salao. That issue is tied up with the question of whether
plaintiffs' action for reconveyance had already prescribed.
The plaintiffs contend that their action is "to enforce a trust which defendant" Juan S.
Salao, Jr. allegedly violated. The existence of a trust was not definitely alleged in
plaintiffs' complaint. They mentioned trust for the first time on page 2 of their
appelants' brief.
To determine if the plaintiffs have a cause of action for the enforcement of a trust, it is
necessary to maek some exegesis on the nature of trusts (fideicomosis). Trusts in
Anglo-American jurisprudence were derived from the fideicommissa of the Roman
law (Government of the Philippine Islands vs. Abadilla, 46 Phil. 642, 646).
"In its technical legal sense, a trust is defined as the right, enforceable solely in equity,
to the beneficial enjoyment of property, the legal title to which is vested in another, but
the word 'trust' is frequently employed to indicate duties, relations, and responsibilities
which are not strictly technical trusts" (89 C.J.S. 712).
A person who establishes a trust is called the trustor; one in whom confidence is
reposed as regards property for the benefit of another person is known as the trustee;
and the person for whose benefit the trust has been created is referred to as the
beneficiary" (Art. 1440, Civil Code). There is a fiduciary relation between the trustee
and the cestui que trust as regards certain property, real, personal, money or choses
in action (Pacheco vs. Arro, 85 Phil. 505).
"Trusts are either express or implied. Express trusts are created by the intention of
the trustor or of the parties. Implied trusts come into being by operation of law" (Art.
1441, Civil Code). "No express trusts concerning an immovable or any interest
therein may be proven by parol evidence. An implied trust may be proven by oral
evidence" (Ibid, Arts. 1443 and 1457).
"No particular words are required for the creation of an express trust, it being
sufficient that a trust is clearly intended" (Ibid, Art. 1444; Tuason de Perez vs. Caluag,
96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546).
"Express trusts are those which are created by the direct and positive acts of the
parties, by some writing or deed, or will, or by words either expressly or impliedly
evincing an intention to create a trust" (89 C.J.S. 72).

"Implied trusts are those which, without being expressed, are deducible from the
nature of the transaction as matters of intent, or which are superinduced on the
transaction by operation of law as matter of equity, independently of the particular
intention of the parties" (89 C.J.S. 724). They are ordinarily subdivided into resulting
and constructive trusts (89 C.J.S. 722).
"A resulting trust. is broadly defined as a trust which is raised or created by the act or
construction of law, but in its more restricted sense it is a trust raised by implication of
law and presumed to have been contemplated by the parties, the intention as to
which is to be found in the nature of their transaction, but not expressed in the deed
or instrument of conveyance (89 C.J.S. 725). Examples of resulting trusts are found in
articles 1448 to 1455 of the Civil Code. (See Padilla vs. Court of Appeals, L-31569,
September 28, 1973, 53 SCRA 168, 179; Martinez vs. Grao 42 Phil. 35).
On the other hand, a constructive trust is -a trust "raised by construction of law, or
arising by operation of law". In a more restricted sense and as contra-distinguished
from a resulting trust, a constructive trust is "a trust not created by any words, either
expressly or impliedly evincing a direct intension to create a trust, but by the
construction of equity in order to satisfy the demands of justice." It does not arise "by
agreement or intention, but by operation of law." (89 C.J.S. 726-727).
Thus, "if property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes" (Art. 1456, Civil Code).
Or "if a person obtains legal title to property by fraud or concealment, courts of equity
will impress upon the title a so-called constructive trust in favor of the defrauded
party". Such a constructive trust is not a trust in the technical sense. (Gayondato vs.
Treasurer of the P. I., 49 Phil. 244).
Not a scintilla of documentary evidence was presented by the plaintiffs to prove that
there was an express trust over the Calunuran fishpond in favor of Valentin Salao.
Purely parol evidence was offered by them to prove the alleged trust. Their claim that
in the oral partition in 1919 of the two fishponds the Calunuran fishpond was assigned
to Valentin Salao is legally untenable.
It is legally indefensible because the terms of article 1443 of the Civil Code (already in
force when the action herein was instituted) are peremptory and unmistakable: parol
evidence cannot be used to prove an express trust concerning realty.
Is plaintiffs' massive oral evidence sufficient to prove an implied trust, resulting or
constructive, regarding the two fishponds?
Plaintiffs' pleadings and evidence cannot be relied upon to prove an implied trust. The
trial court's firm conclusion that there was no community of property during the
lifetime of Valentina; Ignacio or before 1914 is substantiated by defendants'
documentary evidence. The existence of the alleged co-ownership over the lands
supposedly inherited from Manuel Salao in 1885 is the basis of plaintiffs' contention
that the Calunuran fishpond was held in trust for Valentin Salao.

But that co-ownership was not proven by any competent evidence. It is quite
improbable because the alleged estate of Manuel Salao was likewise not satisfactorily
proven. The plaintiffs alleged in their original complaint that there was a co-ownership
over two hectares of land left by Manuel Salao. In their amended complaint, they
alleged that the co-ownership was over seven hectares of fishponds located in Barrio
Dampalit, Malabon, Rizal. In their brief they alleged that the fishponds, ricelands and
saltbeds owned in common in Barrio Dampalit had an area of twenty-eight hectares,
of which sixteen hectares pertained to Valentina Ignacio and eleven hectares
represented Manuel Salao's estate.
They theorized that the eleven hectares "were, and necessarily, the nucleus, nay the
very root, of the property now in litigation (page 6, plaintiffs-appellants' brief). But the
eleven hectares were not proven by any trustworthy evidence. Benita Salao's
testimony that in 1918 or 1919 Juan, Ambrosia, Alejandra and Valentin partitioned
twenty-eight hectares of lands located in Barrio Dampalit is not credible. As noted by
the defendants, Manuel Salao was not even mentioned in plaintiffs' complaints.
The 1919 partition of Valentina Ignacio's estate covered about seventeen hectares of
fishponds and ricelands (Exh. 21). If at the time that partition was made there were
eleven hectares of land in Barrio Dampalit belonging to Manuel Salao, who died in
1885, those eleven hectares would have been partitioned in writing as in the case of
the seventeen hectares belonging to Valentina Ignacio's estate.
It is incredible that the forty-seven-hectare Calunuran fishpond would be adjudicated
to Valentin Salao mere by by word of mouth. Incredible because for the partition of
the seventeen hectares of land left by Valentina Ignacio an elaborate "Escritura de
Particion" consisting of twenty-two pages had to be executed by the four Salao heirs.
Surely, for the partition of one hundred forty-five hectares of fishponds among three of
the same Salao heirs an oral adjudication would not have sufficed.
The improbability of the alleged oral partition becomes more evident when it is borne
in mind that the two fishponds were registered land and "the act of registration" is "the
operative act" that conveys and affects the land (Sec. 50, Act No. 496). That means
that any transaction affecting the registered land should be evidenced by a
registerable deed. The fact that Valentin Salao and his successors-in-interest, the
plaintiffs, never bothered for a period of nearly forty years to procure any
documentary evidence to establish his supposed interest ox participation in the two
fishponds is very suggestive of the absence of such interest.
The matter may be viewed from another angle. As already stated, the deed of
partition for Valentina Ignacio's estate wag notarized in 1919 (Exh. 21). The plaintiffs
assert that the two fishponds were verbally partitioned also in 1919 and that the
Calunuran fishpond was assigned to Valentin Salao as his share.
Now in the partition of Valentina Ignacio's estate, Valentin was obligated to pay
P3,355.25 to Ambrosia Salao. If, according to the plaintiffs, Ambrosia administered
the two fishponds and was the custodian of its earnings, then it could have been
easily stipulated in the deed partitioning Valentina Ignacio's estate that the amount
due from Valentin would just be deducted by Ambrosia from his share of the earnings
of the two fishponds. There was no such stipulation. Not a shred of documentary
evidence shows Valentin's participation in the two fishponds.

The plaintiffs utterly failed to measure up to the yardstick that a trust must be proven
by clear, satisfactory and convincing evidence. It cannot rest on vague and uncertain
evidence or on loose, equivocal or indefinite declarations (De Leon vs. Molo-Peckson,
116 Phil. 1267, 1273).
Trust and trustee; establishment of trust by parol evidence; certainty of proof.
Where a trust is to be established by oral proof, the testimony supporting it must be
sufficiently strong to prove the right of the alleged beneficiary with as much certainty
as if a document proving the trust were shown. A trust cannot be established, contrary
to the recitals of a Torrens title, upon vague and inconclusive proof. (Syllabus, Suarez
vs. Tirambulo, 59 Phil. 303).
Trusts; evidence needed to establish trust on parol testimony. In order to establish
a trust in real property by parol evidence, the proof should be as fully convincing as if
the act giving rise to the trust obligation were proven by an authentic document. Such
a trust cannot be established upon testimony consisting in large part of insecure
surmises based on ancient hearsay. (Syllabus, Santa Juana vs. Del Rosario 50 Phil.
110).
The foregoing rulings are good under article 1457 of the Civil Code which, as already
noted, allows an implied trust to be proven by oral evidence. Trustworthy oral
evidence is required to prove an implied trust because, oral evidence can be easily
fabricated.
On the other hand, a Torrens title is generally a conclusive of the ownership of the
land referred to therein (Sec. 47, Act 496). A strong presumption exists. that Torrens
titles were regularly issued and that they are valid. In order to maintain an action for
reconveyance, proof as to the fiduciary relation of the parties must be clear and
convincing (Yumul vs. Rivera and Dizon, 64 Phil. 13, 17-18).
The real purpose of the Torrens system is, to quiet title to land. "Once a title is
registered, the owner may rest secure, without the necessity of waiting in the portals
of the court, or sitting in the mirador de su casa, to avoid the possibility of losing his
land" (Legarda and Prieto vs. Saleeby, 31 Phil. 590, 593).
There was no resulting trust in this case because there never was any intention on
the part of Juan Y. Salao, Sr., Ambrosia Salao and Valentin Salao to create any trust.
There was no constructive trust because the registration of the two fishponds in the
names of Juan and Ambrosia was not vitiated by fraud or mistake. This is not a case
where to satisfy the demands of justice it is necessary to consider the Calunuran
fishpond " being held in trust by the heirs of Juan Y. Salao, Sr. for the heirs of Valentin
Salao.
And even assuming that there was an implied trust, plaintiffs' action is clearly barred
by prescription or laches (Ramos vs. Ramos, L-19872, December 3, 1974, 61 SCRA
284; Quiniano vs. Court of Appeals, L-23024, May 31, 1971, 39 SCRA 221; Varsity
Hills, Inc. vs. Navarro, 9, February 29, 1972, 43 SCRA 503; Alzona vs. Capunitan and
Reyes, 114 Phil. 377).
Under Act No. 190, whose statute of limitation would apply if there were an implied
trust in this case, the longest period of extinctive prescription was only ten year (Sec.
40; Diaz vs. Gorricho and Aguado, 103 Phil. 261, 266).

The Calunuran fishpond was registered in 1911. The written extrajudicial demand for
its reconveyance was made by the plaintiffs in 1951. Their action was filed in 1952 or
after the lapse of more than forty years from the date of registration. The plaintiffs and
their predecessor-in-interest, Valentin Salao, slept on their rights if they had any rights
at all. Vigilanti prospiciunt jura or the law protects him who is watchful of his rights (92
C.J.S. 1011, citing Esguerra vs. Tecson, 21 Phil. 518, 521).
"Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in
the claim, since it is human nature for a person to assert his rights most strongly
when they are threatened or invaded". "Laches or unreasonable delay on the part of a
plaintiff in seeking to enforce a right is not only persuasive of a want of merit but may,
according to the circumstances, be destructive of the right itself." (Buenaventura vs.
David, 37 Phil. 435, 440-441).
Having reached the conclusion that the plaintiffs are not entitled to the reconveyance
of the Calunuran fishpond, it is no longer n to Pass upon the validity of the donation
made by Ambrosia Salao to Juan S. Salao, Jr. of her one-half share in the two
fishponds The plaintiffs have no right and personality to assil that donation.
Even if the donation were declared void, the plaintiffs would not have any
successional rights to Ambrosia's share. The sole legal heir of Ambrosia was her
nephew, Juan, Jr., her nearest relative within the third degree. Valentin Salao, if living
in 1945 when Ambrosia died, would have been also her legal heir, together with his
first cousin, Juan, Jr. (Juani). Benita Salao, the daughter of Valentin, could not
represent him in the succession to the estate of Ambrosia since in the collateral line,
representation takes place only in favor of the children of brothers or sisters whether
they be of the full or half blood is (Art 972, Civil Code). The nephew excludes a
grandniece like Benita Salao or great-gandnephews like the plaintiffs Alcuriza (Pavia
vs. Iturralde 5 Phil. 176).
The trial court did not err in dismissing plaintiffs' complaint.
Defendants' appeal. The defendants dispute the lower court's finding that the
plaintiffs filed their action in good faith. The defendants contend that they are entitled
to damages because the plaintiffs acted maliciously or in bad faith in suing them.
They ask for P25,000 attorneys fees and litigation expenses and, in addition, moral
damages.
We hold that defemdamts' appeal is not meritorious. The record shows that the
plaintiffs presented fifteen witnesses during the protracted trial of this case which
lasted from 1954 to 1959. They fought tenaciously. They obviously incurred
considerable expenses in prosecuting their case. Although their causes of action
turned out to be unfounded, yet the pertinacity and vigor with which they pressed their
claim indicate their sincerity and good faith.
There is the further consideration that the parties were descendants of common
ancestors, the spouses Manuel Salao and Valentina Ignacio, and that plaintiffs' action
was based on their honest supposition that the funds used in the acquisition of the
lands in litigation were earnings of the properties allegedly inherited from Manuel
Salao.

Considering those circumstances, it cannot be concluded with certitude that plaintiffs'

action was manifestly frivolous or was primarily intended to harass the defendants. An
award for damages to the defendants does not appear to be just and proper.
The worries and anxiety of a defendant in a litigation that was not maliciously
instituted are not the moral damages contemplated in the law (Solis & Yarisantos vs.
Salvador, L-17022, August 14, 1965, 14 SCRA 887; Ramos vs. Ramos, supra). The
instant case is not among the cases mentioned in articles 2219 and 2220 of the Civil
Code wherein moral damages may be recovered. Nor can it be regarded as
analogous to any of the cases mentioned in those articles.
The adverse result of an action does not per se make the act wrongful and subject
the actor to the payment of moral damages. The law could not have meant to impose
a penalty on the right to litigate; such right is so precious that moral damages may not
be charged on those who may exercise it erroneously. (Barreto vs. Arevalo, 99 Phil.
771. 779).
The defendants invoke article 2208 (4) (11) of the Civil Code which provides that
attorney's fees may be recovered "in case of a clearly unfounded civil action or
proceeding against the plaintiff" (defendant is a plaintiff in his counterclaim) or "in any
other case where the court deems it just and equitable" that attorney's fees should he
awarded.
But once it is conceded that the plaintiffs acted in good faith in filing their action there
would be no basis for adjudging them liable to the defendants for attorney's fees and
litigation expenses (See Rizal Surety & Insurance Co., Inc. vs. Court of Appeals, L23729, May 16, 1967, 20 SCRA 61).
It is not sound public policy to set a premium on the right to litigate. An adverse
decision does not ipso facto justify the award of attorney's fees to the winning party
(Herrera vs. Luy Kim Guan, 110 Phil. 1020, 1028; Heirs of Justiva vs. Gustilo, 61 O.
G. 6959).

29) TEODORO ALMIROL, petitioner-appellant,

vs.
THE REGISTER OF DEEDS OF AGUSAN, respondent-appellee.
Tranquilino O. Calo, Jr. for petitioner-appellant.
Office of the Solicitor General for respondent-appellee.
CASTRO, J.:
On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of
land situated in the municipality of Esperanza, province of Agusan, and covered by
original certificate of title P-1237 in the name of "Arcenio Abalo, married to Nicolasa
M. Abalo." Sometime in May, 1962 Almirol went to the office of the Register of Deeds
of Agusan in Butuan City to register the deed of sale and to secure in his name a
transfer certificate of title. Registration was refused by the Register of Deeds upon the
following grounds, inter alia, stated in his letter of May 21, 1962:
1. That Original Certificate of Title No. P-1237 is registered in the name of Arcenio
Abalo, married to Nicolasa M. Abalo, and by legal presumption, is considered
conjugal property;
2. That in the sale of a conjugal property acquired after the effectivity of the New Civil
Code it is necessary that both spouses sign the document; but
3. Since, as in this case, the wife has already died when the sale was made, the
surviving husband can not dispose of the whole property without violating the existing
law (LRC Consulta No. 46 dated June 10, 1958).
To effect the registration of the aforesaid deed of absolute Sale, it is necessary
that the property be first liquidated and transferred in the name of the surviving
spouse and the heirs of the deceased wife by means of extrajudicial settlement or
partition and that the consent of such other heir or heirs must be procured by means
of another document ratifying this sale executed by their father.
In view of such refusal, Almirol went to the Court of First Instance of Agusan on
a petition for mandamus (sp. civ. case 151), to compel the Register of Deeds to
register the deed of sale and to issue to him the corresponding transfer certificate of
title, and to recover P5,000 in moral damages and P1,000 attorney's fees and
expenses of litigation. It is Almirol's assertion that it is but a ministerial duty of the
respondent to perform the acts required of him, and that he (Almirol) has no other
plain, speedy and adequate remedy in the ordinary course of law.
In his answer with counterclaim for P10,000 damages, the respondent
reiterated the grounds stated in his letter of May 21, 1962, averred that the petitioner
has "other legal, plain, speedy and adequate remedy at law by appealing the decision
of the respondent to the Honorable Commissioner of Land Registration," and prayed
for dismissal of the petition.
In its resolution of October 16, 1963 the lower court, declaring that "mandamus
does not lie . . . because the adequate remedy is that provided by Section 4 of Rep.
Act 1151", dismissed the petition, with costs against the petitioner.

Hence the present appeal by Almirol.

The only question of law tendered for resolution is whether mandamus will lie to
compel the respondent to register the deed of sale in question.
Although the reasons relied upon by the respondent evince a sincere desire on
his part to maintain inviolate the law on succession and transmission of rights over
real properties, these do not constitute legal grounds for his refusal to register the
deed. Whether a document is valid or not, is not for the register of deeds to
determine; this function belongs properly to a court of competent jurisdiction.1
Whether the document is invalid, frivolous or intended to harass, is not the duty
of a Register of Deeds to decide, but a court of competent jurisdiction. (Gabriel vs.
Register of Deeds of Rizal, et al., L-17956, Sept. 30, 1953).
. . . the supposed invalidity of the contracts of lease is no valid objection to their
registration, because invalidity is no proof of their non-existence or a valid excuse for
denying their registration. The law on registration does not require that only valid
instruments shall be registered. How can parties affected thereby be supposed to
know their invalidity before they become aware, actually or constructively, of their
existence or of their provisions? If the purpose of registration is merely to give notice,
then questions regarding the effect or invalidity of instruments are expected to be
decided after, not before, registration. It must follow as a necessary consequence that
registration must first be allowed, and validity or effect litigated afterwards. (Gurbax
Singh Pablo & Co. vs. Reyes and Tantoco, 92 Phil. 182-183).
Indeed, a register of deeds is entirely precluded by section 4 of Republic Act
1151 from exercising his personal judgment and discretion when confronted with the
problem of whether to register a deed or instrument on the ground that it is invalid.
For under the said section, when he is in doubt as to the proper step to be taken with
respect to any deed or other instrument presented to him for registration, all that he is
supposed to do is to submit and certify the question to the Commissioner of Land
Registration who shall, after notice and hearing, enter an order prescribing the step to
be taken on the doubtful question. Section 4 of R.A. 1151 reads as follows
Reference of doubtful matters to Commissioner of Land Registration. When
the Register of Deeds is in doubt with regard to the proper step to be taken or
memorandum to be made in pursuance of any deed, mortgage, or other instrument
presented to him for registration, or where any party in interest does not agree with
the Register of Deeds with reference to any such matter, the question shall be
submitted to the Commissioner of Land Registration either upon the certification of
the Register of Deeds, stating the question upon which he is in doubt, or upon the
suggestion in writing by the party in interest; and thereupon the Commissioner, after
consideration of the matter shown by the records certified to him, and in case of
registered lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in such
cases shall be conclusive and binding upon all Registers of Deeds: Provided, further,
That when a party in interest disagrees with the ruling or resolution of the
Commissioner and the issue involves a question of law, said decision may be
appealed to the Supreme Court within thirty days from and after receipt of the notice
thereof.

The foregoing notwithstanding, the court a quo correctly dismissed the petition
for mandamus. Section 4 abovequoted provides that "where any party in interest
does not agree with the Register of Deeds . . . the question shall be submitted to the
Commissioner of Land Registration," who thereafter shall "enter an order prescribing
the step to be taken or memorandum to be made," which shall be "conclusive and
binding upon all Registers of Deeds." This administrative remedy must be resorted to
by the petitioner before he can have recourse to the courts.

damages sustained by the plaintiffs as above narrated. Both the trial court * ruled the
respondent court ** ruled in their favor, holding the Assurance Fund subsidiarily liable
for the sum of P138,264.00 with legal interest from the date of filing of the complaint,
in case the judgment could not be enforced against the other defendant who had
been defaulted and could not be located. 5 The petitioner, disclaiming liability, is now
before us and prays for relief against the decision of the respondent court which he
says is not in accord with law and jurisprudence.

ACCORDINGLY, the Resolution of the lower court of October 16, 1969, is

affirmed, at petitioner's cost.

The applicable law is Section 101 of Act No. 496 (before its revision by P.D. No. 1529)
providing as follows:

30) G.R. No. L-42805

August 31, 1987

THE TREASURER OF THE PHILIPPINES, petitioner,

vs.
THE COURT OF APPEALS and SPOUSES EDUARDO OCSON and NORA E.
OCSON respondents.
The petitioner asks us to reverse a decision of the respondent court affirming that of
the trial court holding the Assurance Fund subsidiarily liable for damages sustained
by the private respondents under the following established facts.
Sometime in 1965, a person Identifying himself as Lawaan Lopez offered to sell to the
private respondents a parcel of land located in Quezon City and consisting of 1,316.8
square meters, which he claimed as his property. His asking price was P85.00 per
square meter but after a month's haggling the parties agreed on the reduced price of
P76.00 per square meter. The sale was deferred, however, because the prospective
vendor said his certificate of title had been burned in his house in Divisoria, and he
would have to file a petition with the court of first instance of Quezon City for a
duplicate certificate of title. He did so and the petition was granted after hearing
without any opposition. Following the issuance of the new duplicate certificate of title,
the said person executed a deed of sale in favor of the private respondents, who paid
him the stipulated purchase price of P98,700.00 in full. The corresponding transfer
certificate of title was subsequently issued to them after cancellation of the duplicate
certificate in the name of Lawaan Lopez. 1
Trouble began two years later when another person, this time a woman, appeared
and, claiming to be the real Lawaan Lopez, filed a petition in the court of first instance
of Quezon City to declare as null and void the transfer of her land in favor of the
private respondents, on the ground that it had been made by an impostor. 2 After trial,
the questioned deed of sale was annulled, (together with the duplicate certificate of
title issued to the impostor and the transfer certificate of title in the name of the private
respondents) and the real owner's duplicate certificate of title was revalidated. 3
Neither the Solicitor General nor the private respondents appealed the decision, but
Lawaan Lopez did so, claiming that the defendants should have been required to pay
damages to her and the costs. The appeal was dismissed, with the finding by Justices
Jose Leuterio, Magno Gatmaitan and Luis B. Reyes of the Court of Appeals that there
was no collusion between the private respondents and the impostor. 4
Subsequently the private respondents filed a complaint against the impostor Lawaan
Lopez and the Treasurer of the Philippines as custodian of the Assurance Fund for

Sec. 101. Any person who without negligence on his part sustains loss or damage
through any omission, mistake or misfeasance of the clerk, or register of deeds, or of
any examiner of titles, or of any deputy or clerk or of the register of deeds in the
performance of their respective duties under the provisions of this Act, and any
person who is wrongfully deprived of any land or any interest therein, without
negligence on his part, through the bringing of the same under the provisions of this
Act or by the registration of any other person as owner of such land, or by any
mistake, omission, or misdescription in any certificate or owner's duplicate, or in any
entry or memorandum in the register or other official book, or by any cancellation and
who by the provisions of this Act is barred or in any way precluded from bringing an
action for the recovery of such land or interest therein, or claim upon the same, may
bring in any court or competent jurisdiction an action against the Treasurer of the
Philippine Archipelago for the recovery of damages to be paid out of the Assurance
Fund.
Commenting on this provision, Commissioner Antonio H. Noblejas, in his book on
Land Titles and Deed 6 notes that recovery from the Assurance Fund could be
demanded by:
1)

Any person who sustains loss or damage under the following conditions:

a)

that there was no negligence on his part; and

b)
that the loss or damage was sustained through any omission, mistake, or
misfeasance of the clerk of court, or the register of deeds, his deputy or clerk, in the
performance of their respective duties under the provisions of the land Registration
Act,' or
2)
Any person who has been deprived of any land or any interest therein under
the following conditions:
a)

that there was no negligence on his part;

b)
that he was deprived as a consequence of the bringing of his land or interest
therein under the provisions of the Property Registration Decree; or by the registration
by any other persons as owner of such land; or by mistake, omission or
misdescription in any certificate or owner's duplicate, or in any entry or memorandum
in the register or other official book, or by any cancellation; and
c)
that he is barred or in any way precluded from bringing an action for the
recovery of such land or interest therein, or claim upon the same.

A careful reading of the above provision will readily show that the private respondents
do not come under either of the two situations above mentioned.
The first situation is clearly inapplicable as we are not dealing here with any omission,
mistake or malfeasance of the clerk of court or of the register of deeds or his
personnel in the performance of their duties.
The second situation is also inapplicable. The strongest obstacle to recovery
thereunder is that the private respondents acquired no land or any interest therein as
a result of the invalid sale made to them by the spurious Lawaan Lopez.
The petition correctly points out that such sale conveyed no title or any interest at all
to them for the simple reason that the supposed vendor had no title or interest to
transfer. He was not the owner of the land. He had no right thereto he could convey.
Manifestly, the deception imposed upon them by the impostor deprived the private
respondents of the money they delivered to him as consideration for the sale. But
there is no question that the subsequent cancellation of the sale did not deprive them
of the land subject thereof, or of any interest wherein, for they never acquired
ownership over it in the first place.
The private respondents argue that from the time the new transfer certificate of title
was issued in their name on January 28, 1965, until it was cancelled on October 12,
1967, they were the true and exclusive owners of the disputed property. Hence, the
cancellation of their title on the latter date had the effect of depriving them of the said
land and so entitles them now to proceed against the Assurance Fund.
The flaw in this posture is that the real Lawaan Lopez had her own genuine certificate
of title all the time and it remained valid despite the issuance of the new certificate of
title in the name of the private respondents. That new certificate, as the trial court
correctly declared, was null and void ab initio, which means that it had no legal effect
whatsoever and at any time. The private respondents were not for a single moment
the owner of the property in question and so cannot claim to have been unlawfully
deprived thereof when their certificate of title was found and declared to be a total
nullity.
Additionally, the Court observes that the private respondents were not exactly diligent
in verifying the credentials of the impostor whom they had never met before he came
to them with his bogus offer. The fact alone that he claimed to have lost his duplicate
certificate of title in a fire, not to mention the amount of the consideration involved,
would have put them on their guard and warned them to make a more thorough
investigation of the seller's Identity. They did not. Oddly, they seemed to be satisfied
that he had an Ilongo accent to establish his claim to be the Visayan owner of the
property in question. They were apparently not concerned over the curious fact that
for his residence certificate B the supposed owner had paid only P1.00 although the
property he was selling was worth to him no less than P98,700.00. 7 Moreover,
whereas address in that certificate was Mandaluyong, Rizal, whereas the address
indicated in the records of the Register of Deeds of the owner of the land in question
was Fara-on Fabrics, Negros Occidental. 8
As for the proceedings for the issuance of a duplicate certificate of title, the private
respondents themselves state in their complaint that the evidence of the petitioner
therein was received by the clerk of court only, without any opposition, and his report
was thereafter accepted by the trial judge who thereupon granted the relief sought by
the impostor. 9 It is not likely, given the summary nature of these proceedings, that

the necessary care was taken by the court to establish the real identity of the person
who claimed to be the owner of the property in question.
While we may agree that there was no collusion between the parties respondents and
the vanished vendor, we are not prepared to rule under the circumstances of this
case that they are entitled to even claim the status of innocent purchasers of the land.
On the contrary, we find that for failure to exercise the necessary diligence in
ascertaining the credentials and bona fides of the false Lawaan Lopez, and as a
result of his deception, they never acquired any title to the said land or any interest
therein covered by Section 101 of Act No. 496.
As this Court held in La Urbana v. Bernardo 10 "it is a condition sine qua non that the
person who brings an action for damages against the Assurance Fund be the
registered owner and as the holders of transfer certificates of title, that they be
innocent purchasers in good faith and for value." Being neither the registered owners
nor innocent purchasers, the private respondents are not entitled to recover from the
Assurance Fund.
They are, of course, not entirely without recourse, for they may still proceed against
the impostor in a civil action for recovery and damages or prosecute him under the
Revised Penal Code, assuming he can be located and arrested. The problem is that
he has completely disappeared. That difficulty alone, however, should not make the
Assurance Fund liable to the private respondents for the serious wrong they have
sustained from the false Lawaan Lopez. The Government like all governments,
and for obvious reasons is not an insurer of the unwary citizen's property against
the chicanery of scoundrels.
WHEREFORE, the petition is GRANTED. The decision of the respondent court dated
January 26, 1976 is set aside, and Civil Case No. 12426 of the then Court of First
Instance of Rizal is dismissed. No costs.
31) MARIANO TORRES Y CHAVARRIA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, FRANCISCO E. FERNANDEZ and FE
FERNANDEZ, ROSARIO MOTA CUE, ERNESTO MEDINA CUE and the NATIONAL
TREASURER, as Custodian of the Assurance Fund, respondents.
This is a petition for review of the decision of the Court of Appeals in CA-G.R. No.
62248-R entitled "Mariano Torres Y Chavarria v. Francisco E. Fernandez, et al., etc.,"
which reversed the decision of the then Court of First Instance of Manila, Branch 7, by
holding that it is the respondent Rosario Mota who is legally entitled to the disputed
realties, being an innocent mortgagee and later the highest bidder when the
properties were supposedly foreclosed, and not the petitioner Mariano Torres, the
defrauded owner thereof; and of the resolution of that Court denying Torres' motion
for reconsideration.
The parcel of land located at the comer of Quezon Boulevard and Raon Street (now
Gonzalo Street), and the building erected thereon known as "M. Torres Building" is
owned by Mariano Torres, the herein petitioner, as evidenced by Transfer Certificate
of Title No. 53628-Manila issued in his name. As far as the records show, Torres was
and still is in possession of the realties, holding safely to his owner's duplicate
certificate of title, and, at least until 1971, paying the real estate taxes due thereon,
and collecting rentals from his tenants occupying the building.
Sometime in 1966, Francisco Fernandez, Torres' brother-in-law, filed a petition with
the Court of First Instance of Manila, docketed as LRC GLRO Cad. Rec. No. 133,
where he, misrepresenting to be the attorney-in-fact of Torres and falsely alleging that

the a duplicate copy of TCT No. 53628 was lost, succeeded in obtaining a court order
for the issuance of another copy of the certificate.
Once in possession thereof, Fernandez forged a simulated deed of sale of the realties
in his favor. Whereupon TCT No. 53628 in the name of Torres was canceled and TCT
No. 86018 was issued in Fernandez' name.
On various dates from December, 1966 to November, 1967 Fernandez mortgaged the
realties to Rosario Mota, wife of Ernesto Cue, and also to Angela Fermin, who later
assigned her credit to the spouses Cue. The mortgages were annotated at the back
of TCT No. 86018 and so was the deed of assignment.
Torres, who up to this time still had possession of his owner's duplicate certificate of
title and who was still collecting rentals from the occupants of the subject building,
upon Teaming of the fraud committed by Fernandez, caused, on March 18, 1968, the
annotation on the latter's TCT a notice of adverse claim.
On March 30, 1968, Torres filed Civil Case No. 72494 against Fernandez to annul
TCT No. 86018 as well as the proceedings in LRC GLRO Cad. Rec. No. 133. On April
2, 1968, a notice of lis pendens was annotated at the back of Fernandez' TCT.
In the meantime, Fernandez failed to pay his various loans which prompted the Cues
to institute an extrajudicial foreclosure of the mortgage.
On February 11, 1969, Fernandez filed Civil Case No. 75643 against the spouses
Cue for the annulment of the mortgage with preliminary injunction.
After the foreclosure was enjoined, the parties entered into an amicable settlement,
approved by the court whereby it was stipulated that Fernandez acknowledged and
promised to pay his debt to the Cues for Five Hundred Sixty-Two Thousand Nine
Hundred Fifty-Five and 28/100 (P562,955.28) Pesos on or before, March 30, 1970,
while the spouses bound themselves to execute and deliver, within ten (10) days from
receipt of the sum mentioned such documents as are necessary to release the
mortgages in favor of defendants on plaintiffs' property.
Before Fernandez could pay his obligation under the settlement agreement, a
decision was rendered in Civil Case No. 72494 where it was declared that the
proceedings held in LRC GLRO Cad. Rec, No. 133 was void and that TCT No. 86018,
issued in the name of Fernandez, is without force and effect as TCT No. 53628 in the
name of Torres is the true and legal evidence of ownership of the subject
immovables. Fernandez appealed from this decision to the Court of Appeals where it
was docketed as CA-G.R. No. 46386-R. The Court of Appeals, on April 20, 1979,
affirmed the decision of the trial court. There being nothing on the records that would
indicate that the judgment of the appellate court was elevated here, it would appear
that it had become final and executory.
But meanwhile, prior to the Court of Appeals' decision mentioned above, Fernandez
failed to comply with his obligation under the amicable settlement and whereupon the
Cues applied for and were granted a writ of execution. The subject realties were then
levied upon and sold at public auction where Rosario Mota was the highest bidder.

On August 31, 1971, the redemption period for the subject immovables having lapsed
without Fernandez nor Torres redeeming the properties, Rosario Mota was issued the
Sheriffs Deed of Sale. Thereafter, TCT No. 86018 was canceled and TCT No. 105953
was issued in her name.
On December 7, 1971 Mota, through her lawyer, notified the tenants occupying "M.
Torres Building" that she is the new owner thereof and henceforth, payment of their
rentals should be made to her.
On December 17, 1971 Torres filed a complaint, which later gave rise to this petition,
with the Court of First Instance of Manila, docketed as Civil Case No. 85753, against
Fernandez and his spouse and the Cues to restrain the latter from collecting rentals
and for the declaration as void TCT No. 105953. The Cues in turn filed a cross-claim
against Fernandez spouses and a third party complaint against the National
Treasurer as the custodian of the Assurance Fund.
During the proceeding, Mariano Torres, having died sometime in 1974, was
substituted by his widow. On June 3, 1977, the trial court rendered its decision
declaring TCT No. 105953 in the name of Rosario Mota nun and void as it upheld the
validity of TCT No. 53628 in the name of Torres as the true evidence of title to the
disputed realties, and at the same time dismissing the Cue's third party complaint and
cross claim.
The decision was reviewed by the respondent court at the instance of the Cues
which, as aforementioned, reversed the trial court in its decision dated July 30, 1982
and the Resolution of January 14, 1983. Hence, this petition.
There is nothing on the records which shows that Torres performed any act or
omission which could have jeopardized his peaceful dominion over his realties. The
decision under review, however, in considering Mota an innocent mortgagee
protected under Section 55 of the Land Registration Law, held that Torres was bound
by the mortgage. Inevitably, it pronounced that the foreclosure sale, where Mota was
the highest bidder, also bound Torres and concluded that the certificate of title issued
in the name of Mota prevails over that of Torres'. As correctly pointed out by Torres,
however, his properties were sold on execution, and not on foreclosure sale, and
hence, the purchaser thereof was bound by his notice of adverse claim and lis
pendens annotated at the back of Fernandez' TCT. Moreover, even if We grant Mota
the status of an innocent mortgagee, the doctrine relied upon by the appellate court
that a forged instrument may become the root of a valid title, cannot be applied where
the owner still holds a valid and existing certificate of title covering the same interest
in a realty. The doctrine would apply rather when, as in the cases for example of De la
Cruz v. Fable, 35 Phil. 144 [1916], Fule v. De Legare, No. L-17951, February 28,
1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April 10, 1989, the forger
thru insidious means obtains the owner's duplicate certificate of title, converts it in his
name, and subsequently sells or otherwise encumbers it to an innocent holder for
value, for in such a case the new certificate is binding upon the owner (Sec. 55, Act
496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and existing certificate of
title, his would be indefeasible as against the whole world, and not that of the
innocent holder's. "Prior tempore potior jure" as We have said in Register of Deeds v.
Philippine National Bank, No. L-17641, January 30, 1965, 13 SCRA 46 , citing Bank,
No. L Legarda v. Saleeby, 31 Phil. 590, Roman Catholic Bishop v. Philippine Railway,

49 Phil. 546, Reyes v. Borbon, 50 Phil. 791. in C.N. Hodges v. Dy Buncio & Co., Inc.,
No. L-16096, October 30, 1962, 6 SCRA 287, 292, We laid down the doctrine that:
The claim of indefeasibility of the petitioner's title under the Torrens land title system
would be correct if previous valid title to the same parcel of land did not exist. The
respondent had a valid title ... It never parted with it; it never handed or delivered to
anyone its owner's duplicate of the transfer certificate of title, it could not be charged
with negligence in the keeping of its duplicate certificate of title or with any act which
could have brought about the issuance of another certificate upon which a purchaser
in good faith and for value could rely. If the petitioner's contention as to indefeasibility
of his title should be upheld, then registered owners without the least fault on their
part could be divested of their title and deprived of their property. Such disastrous
results which would shake and destroy the stability of land titles had not been
foreseen by those who had endowed with indefeasibility land titles issued under the
Torrens system. Veronica Bareza perpetrated the fraud by making false
representations in her petition and the title issued to her being the product of fraud
could not vest in her valid and legal title to the parcel of land in litigation. As she had
no title to the parcel of land, in the same way that a thief does not own or have title to
the stolen goods, she could not transmit title which she did not have nor possess.
We have applied this doctrine in the case of the Register of Deeds v. P.N.B., supra,
where We noted that said ruling is "a mere affirmation of the recognized principle that
a certificate is not conclusive evidence of title if it is shown that the same land had
already been registered and an earlier certificate for the same land is in existence."
Again in the case of Baltazar v. Court of Appeals, G.R. No. 78728, December 8, 1988,
168 SCRA 354, We held that as between two persons both of whom are in good faith
and both innocent of any negligence, the law must protect and prefer the lawful holder
of registered title over the transfer of a vendor bereft of any transmissible rights.
In view of the foregoing, to hold, for the purpose of enforcing the mortgage, that Mota
was an innocent mortgagee would be futile because, as above shown, no certificate
of title covering the subject realties in derogation of Torres' certificate of title may
validly be issued.

by them to Fernandez. Its value lies principally in its income potential, in the form of
substantial monthly rentals. Certainly, the registered title does not yield any
information as to the amount of rentals due from the building, much less on who is
collecting them, or who is recognized by the tenants as their landlord. Any prospective
buyer or mortgagee of such a property, if prudent and in good faith, is normally
expected to inquire into all these and related facts and circumstances.
Besides, by the course of visible dimensions of the M. Torres Building, it should be
readily obvious to any one that the area of the two lots ... covered by TCT No. 86018
cannot accommodate the building, as in fact it also rests upon a lot covered by TCT
No. 56387, and partly upon a lot leased by (Torres) from the City of Manila. Had (the
Cues) known of this fact would they have accepted the mortgage alone over TCT No.
86018? The answer is obvious. And yet, to all indications, they never bothered to look
into this fact about the M. Torres Building.
xxx

xxx

xxx

Another thing that defendants Mota and Medina Cue must have investigated, as any
prudent buyer or mortgagee should before consummating any transaction on real
property, in the matter of payment of taxes on the property. After all, the big value of
the property in question necessarily means that even real estate taxes on it alone
would involve big amounts of money, and if there are tax arrearages, any buyer or
subsequent owner of the property wig have to come face to face with the tax hen
attaching to the property wherever its owner may be. ... (P. 257, Record on Appeal)
We likewise take note of the manifestation of the Office of the Solicitor General that
the Cues failed to contest the ruling of the trial court negating the liability of the
Assurance Fund. For these reasons, We hold that the Cues' remedy merely is to go
against Francisco Fernandez or rather his estate since record shows that he died
sometime in 1983.
ACCORDINGLY, the decision and resolution under review are REVERSED and the
decision of the then Court of First Instance, Branch 7, Manila in Civil Case No. 85753
is REINSTATED.

Then it becomes evident that the remaining possible remedies of the Cues are to go
against Fernandez or the Assurance Fund, as they in fact had done in the lower court
by filing a cross claim and third party complaint. The lower court dismissed the Cues'
cross-claim against Fernandez reasoning out that their remedy is to cause the final
judgment (compromise agreement) in Civil Case No. 75643 executed. This, of
course, is correct since the rights and obligations of both parties had been determined
in that case.
The trial court also dismissed the Cues' third party complaint against the Treasurer of
the Philippines as custodian of the Assurance Fund after finding them negligent in
protecting their interest. The trial court recognized the principle that a person dealing
with registered lands need not go beyond the certificate of title but nevertheless
pointed out that there are circumstances in this case which should have put the Cues
on guard and prompted them to investigate the property being mortgaged to them,
thus:
The property in question is a very valuable property, in fact accepted by defendants
Mota and Medina Cue as collateral for more than half a million pesos in loans granted

32) G.R. No. 51457

June 27, 1994

LUCIA EMBRADO and ORESTE TORREGIANI, petitioners,

vs.
COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS SALIMBAGAT, EDA
JIMENEZ and SANTIAGO JIMENEZ, respondents.
BELLOSILLO, J.:

Lot No. 564 is a 366-square meter lot situated in Dipolog City originally owned by
Juan, Pastor and Matias Carpitanos. On 2 July 1946, a Venta Definitiva, a notarized
document written entirely in Spanish, was executed by the Carpitanos whereby they
sold Lot No. 564 to "Srta. LUCIA C. EMBRADO . . . soltera, con residencia y direccion
postal Municipio de Dipolog, Provincia de Zamboanga." 2 The document provided
that even though the deed was prepared and signed on 2 July 1946, the effects of the
document would retroact to the 15th day of April 1941, the date the lot and its
improvements were actually sold to Lucia C. Embrado.

"H" as well as TCT No. 17103 null and void and of no force and effect; (b) ordered
defendants jointly and severally to pay plaintiffs the sum of P2,000.00 as actual
damages and P1,500.00 for attorneys fees; (c) ordered the Register of Deeds of
Dipolog City to cancel TCT No. 17103 in the name of Eda Jimenez and issue another
one in favor of plaintiff Lucia Embrado, married to Oreste Torregiani, and to cancel all
the annotations thereon emanating from the void transfers in favor of Marcos
Salimbagat and Pacifico Cimafranca; (d) ordered defendants Eda and Santiago
Jimenez to return to defendant Pacifico Cimafranca the sum of P30,000.00 paid by
him for the 301 square meters and the house in question, and to defendant Marcos
Salimbagat the P6,500.00 paid by him for the 65 square meters occupied by
Comendador Clinic with legal interest of six percent (6%) until fully paid; and, (e)
ordered defendant Cimafranca to pay plaintiffs all the rents he has been collecting
from the lessees of the first floor of the house with legal interest thereon from the time
he started collecting them until fully paid, with costs against defendants. 11

The sale was registered and Transfer Certificate of Title No. T-99 3 was issued on 13
February 1948 in the name of Lucia Embrado alone, who was by then already
married to petitioner Oreste Torregiani since 1943. However, by virtue of a court order
in Misc. Sp. Proc. No. 2330 of the then Court of First Instance of Zamboanga del
Norte, the word "single" appearing in TCT No. T-99 was canceled and replaced on 19
October 1970 by the phrase "married to Oreste Torregiani." The Torregianis then
made their conjugal abode on the lot and in 1958 constructed a
residential/commercial building thereon. 4

The foregoing judgment was reversed by the Court of Appeals which held that since
Lucia Embrado actually agreed with Juan, Pastor and Matias Carpitanos, the original
owners, to the purchase of Lot 564 on 15 April 1941 12 when she was not yet
married, then the lot was her paraphernal property since a sale is considered
perfected the moment the parties agree on the object and cause of the contract. In
addition, the respondent court declared Salimbagat and Cimafranca buyers in good
faith since the contrary was not proved. Consequently, the complaint in the trial court
was ordered dismissed by respondent Court of Appeals.

As appearing from a document entitled Absolute Deed of Sale dated 1 May 1971 5,
Lucia Embrado Torregiani sold Lot No. 564, described as her "own paraphernal
property," to her adopted daughter, herein private respondent Eda Jimenez, for the
sum of P1,000.00. Transfer Certificate of Title No. T-99 was canceled to give way to
TCT No. T-17103 6 in the name of Eda Jimenez, married to Santiago Jimenez.

Three (3) issues are herein involved: (a) whether Lot 564 was paraphernal property of
Lucia Embrado or conjugal with her husband Oreste Torregiani; (b) whether the sale
in favor of Eda Jimenez was valid; and, (c) whether vendees Marcos Salimbagat and
Pacifico Cimafranca were buyers in good faith so that the sale to them was valid,
hence, would bar reconveyance.

On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters of Lot 564 to
Marcos Salimbagat for P6,500.00, and on 1 August 1972, conveyed 301 square
meters of the same lot to Pacifico Cimafranca 8 for P30,000. Both sales were duly
annotated on TCT No. T-17103.

We sustain petitioners. While we agree with respondent court that Lot 564 was
originally the paraphernal property of Lucia, we cannot adopt its conclusion that
because Lucia and the original owners agreed in 1941 for its purchase and sale,
ownership was already acquired by Lucia at that moment. Under Art. 1496 of the Civil
Code, "ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in articles 1497 to 1501, or in any other
manner signifying an agreement that the possession is transferred from the vendor to
the vendee," and under Art. 1498, "(w)hen the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the thing which
is the object of the contract, if from the deed the contrary does not appear or cannot
clearly be inferred."

LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed this petition for review
on certiorari from the decision of respondent Court of Appeals 1 upholding the validity
of the Deed of Sale over Lot No. 564 executed by petitioner Lucia Embrado in favor of
private respondent Eda Jimenez.

On 25 September 1972, the Torregianis instituted in the Court of First Instance, now
Regional Trial Court, of Zamboanga del Norte an action for declaration of nullity of
contract, annulment of sales, reconveyance and damages 9 against the spouses
Santiago and Eda Jimenez, Marcos Salimbagat and Pacifico Cimafranca alleging that
the sale of Lot 564 by Lucia Embrado to Eda Jimenez was void not only for lack of
consideration but also because Oreste Torregiani did not consent to the sale, which
consent was necessary because Lot 564 was conjugal property. In addition, the
petitioners claim that Lucia was misled into signing the deed of sale marked as Exh.
"D" on the belief that Lot 564 was merely intended as security for a loan that the
Jimenez spouses were then negotiating with the First Insular Bank of Cebu. Since the
Jimenez spouses did not acquire valid title to the land, the subsequent sales in favor
of Salimbagat and Cimafranca were without legal effect.
The Torregianis were sustained by the CFI of Zamboanga del Norte 10 which held
that the sale of Lot 564 to Eda Jimenez and its subsequent transfers to Marcos
Salimbagat and Pacifico Cimafranca, who were declared buyers in bad faith, were
void and of no effect. More specifically, the judgment (a) declared Exhs. "D," "G" and

In the case at bar, the Venta Definitiva over Lot 564 in favor of Lucia Embrado was
executed by the Carpitanoses on 2 July 1946 when her marriage to petitioner Oreste
Torregiani was already subsisting. Although ownership was acquired during the
marriage and hence presumed conjugal, the presumption of conjugality 13 was
successfully overcome by the terms of the Venta Definitiva which contains a positive
assertion of exclusive ownership, which was duly supported by the testimony of
Matias Carpitanos, one of the original sellers of the lot. 14
However, a decisive fact appears which prevents us from ultimately affirming the
validity of her sale of Lot 564 to private respondent Eda Jimenez. The trial court found

as a fact the construction in 1958 of a residential/commercial building 15 on said lot a

part of which was leased to third persons and another part serving as the Torregianis
conjugal dwelling.
Although no evidence was presented on the source of funds used in the construction
to determine whether the same was conjugal or paraphernal, other than the testimony
of Torregiani, 16 petitioners nevertheless enjoy in their favor the presumption that the
funds used were conjugal. 17
The second paragraph of Art. 158 of the Civil Code provides that "[b]uildings
constructed, at the expense of the partnership, during the marriage on land belonging
to one of the spouses, also pertain to the partnership, but the value of the land shall
be reimbursed to the spouse who owns the same." Under this article, the land
becomes conjugal upon the construction of the building without awaiting
reimbursement before or at the liquidation of the partnership upon the concurrence of
two conditions, to wit: (a) the construction of the building at the expense of the
partnership; and, (b) the ownership of the land by one of the spouses. 18 The
conditions have been fully met in the case at bench. Thus, even if Lot 564 was
originally the paraphernal property of Lucia as evident from the "Venta Definitiva", the
same became conjugal upon the construction of the residential/commercial building in
1958.

title. Our land registration laws do not give the holder any better title than what he
actually has. 23 Being null and void, the sale to Eda Jimenez and the transfer of the
property she made to Salimbagat and Cimafranca produced no legal effects
whatsoever. Quod nullum est, nullum producit effectum. There being no valid title to
the land that Eda Jimenez acquired from Lucia, it follows that no title to the same land
could be conveyed by the former to Salimbagat and
Cimafranca. 24
It is worthy to note that Salimbagat and Cimafranca, as buyers of Eda Jimenez, have
not proved their status as purchasers in good faith and for value of the land which, in
the first place, Eda Jimenez had no right to sell. The burden of proving the status of a
purchaser in good faith and for value lies upon him who asserts that status. In
discharging the burden, it is not enough to invoke the ordinary presumption of good
faith, i.e., that everyone is presumed to act in good faith. The good faith that is here
essential is integral with the very status which must be proved. 25

Lucia claims that she was misled by her daughter and son-in-law into signing a deed
of absolute sale in their favor thinking that she would be helping them obtain a loan
from a bank if they could mortgage the property as security for their loan; that
although she signed the deed of sale, she did not consent to the sale nor did she
intend to convey or transfer her title to Eda Jimenez; and, that she never received the
alleged amount of P1,000.00 as consideration for the sale of the property.

We agree with the trial court when it found that Salimbagat and Cimafranca
purchased the disputed lot from Eda and Santiago Jimenez with knowledge of facts
and circumstances which should have put them upon such inquiry and investigation
as might be necessary to acquaint them with the defects in the title of their vendor. A
purchaser cannot close his eyes to facts which should put a reasonable man on his
guard and then claim that he acted in good faith under the belief that there was no
defect in the title of the vendor. His mere refusal to believe that such defect exists, or
his willful closing of his eyes to the possibility of the existence of a defect in the
vendors title will not make him an innocent purchaser for value if afterwards it
develops that the title is in fact defective, and it appears that he had such notice of the
defect as would have led to its discovery had he acted with the measure of precaution
which may reasonably be required of a prudent man in like situation. 26

While it is true that a notarized document is admissible in evidence without proof of its
due execution and is conclusive as to the truthfulness of its contents, this rule is not
absolute and may be rebutted by evidence to the contrary. 19 In this case, it was
clearly shown that Eda and Santiago Jimenez had no sufficient means of livelihood
and that they were totally dependent on their mother Lucia for the support of their
family. This fact strengthens the claim of Lucia that the price of the property was
fictitious and that Eda Jimenez could not have paid the price of the property as she
was financially incapable to do so. In fact, Eda Jimenez did not prove as to how she
obtained the money to pay for the property she supposedly bought from Lucia. When
the source of the purchase price is "intriguing" and is not convincingly shown to have
been given by the "buyer" to the "seller," the claim of the latter that she signed the
deed of sale without her consent may be upheld. 20

Cimafranca is a close relative of Santiago Jimenez and at the same time godfather to
one of his children. As such, there can be no doubt that Cimafranca was aware of the
personal circumstances and financial standing of the Jimenez spouses, including their
financial ability to acquire any property. It would be impossible for Cimafranca not to
know that Santiago Jimenez was only twenty-two years old, a working student
earning six pesos per day 27 with a wife and three children to support. 28 With these
facts, there is every reason for him to inquire further as to how Eda Jimenez came up
with the sum of P1,000.00 to buy the property. When there is a clear showing that
Eda Jimenez, being the transferee of a registered property, is not gainfully employed
or did not have an independent source of income or is financially incapable of paying
the price of the property she bought, this is sufficient to engender doubt as to whether
Eda validly bought the property from Lucia. 29

Even assuming in gratia argumenti that Lucia signed the document knowing that it
was a deed of sale of the property, the sale thereof by Lucia to Eda Jimenez without
her husbands conformity should be considered void ab initio being contrary to law. 21
Since "(t)he wife cannot bind the conjugal partnership without the husbands consent,
except in cases provided by law," 22 it follows that Lucia Embrado Torregiani could
not, by herself, validly dispose of Lot 564 without her husbands consent.
Consequently, Eda Jimenez likewise could not have acquired ownership over the
land. The issuance of a certificate of title in favor of Eda Jimenez did not vest upon
her ownership over the property. Neither did it validate the alleged purchase thereof
which is null and void. Registration does not vest title. It is merely evidence of such

On the part of Salimbagat, he has been a resident of Dipolog for about thirty (30)
years. He has a daughter renting a portion of the building with her husband for more
than a year prior to the sale by Eda Jimenez to Salimbagat on 6 March 1972. 30 This
means that the lease of the building by Salimbagats daughter already commenced
while Lucia Torregiani was still the registered owner and this was prior to the alleged
sale by Lucia Torregiani of the property to Eda Jimenez on 1 May 1971. There can be
no doubt that Salimbagats daughter was aware of the factual background of the
property and the personal circumstances of the owners thereof especially that they
are all occupying the same building. During the time that Salimbagat was already
interested in buying the property, it would have been usual and part of ordinary

human nature for him to inquire about the property from his daughter who was living
very near the supposed owners. Considering that the Torregiani and Jimenez families
are not total strangers to Salimbagat, it is safe to conclude that Salimbagat had some
knowledge of the financial status of the supposed vendors which should have put him
on guard before buying the property. Moreover, the records show that this would not
have escaped the notice of Salimbagat and Cimafranca that at the time of the sale to
them petitioners were in actual possession of the property with Salimbagats daughter
renting a portion thereof. For that matter, at the time of the sale to Salimbagat and
Cimafranca, petitioners had already been in continuous possession of the property for
fourteen (14) years, or since 1958. Santiago Jimenez admitted that after his marriage
he and his wife Eda lived and stayed with her parents, herein petitioners, and
dependent on them for support. 31
Before buying the property, Salimbagat and Cimafranca allegedly inquired from the
office of the Register of Deeds concerning the genuineness of the certificate of title of
Eda Jimenez, and from the Clerk of Court of the Court of First Instance of Dipolog
City as to whether the property was involved in any litigation. 32 However, they failed
to inquire from petitioners as to why they were the ones in actual possession of the
property.

33) DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellant,

vs.
LAZARO MANGAWANG, ET AL., defendants-appellees.
BAUTISTA ANGELO, J.:

The rule is settled that a buyer of real property which is in the possession of persons
other than the seller must be wary and should investigate the rights of those in
possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a
buyer in good faith. 33 When a man proposes to buy or deal with realty, his first duty
is to read the public manuscript, i.e., to look and see who is there upon it, and what
are his rights. A want of caution and diligence which an honest man of ordinary
prudence is accustomed to exercise in making purchases is, in contemplation of law,
a want of good faith. The buyer who has failed to know or discover that the land sold
to him is in the adverse possession of another, is a buyer in bad faith. 34
The fact that Lucia Embrado resides in the premises, coupled with the relatively
young age and meager financial standing of the Jimenez spouses, should have been
sufficient for Cimafranca to hesitate accepting Edas transfer certificate of title at its
face value. Cimafranca, after deliberately closing his eyes to such a vital information,
is now claiming good faith. For obvious reasons, we cannot accept his contention. We
thus declare him, together with Marcos Salimbagat, to be purchasers in bad faith
hence not entitled to protection under the Torrens system of registration.
Lot 564 is now registered in the name of Eda Jimenez "married to Santiago Jimenez"
under Transfer Certificate of Title No. T-17103 which was issued pursuant to the
"Absolute Deed of Sale" executed in her favor by petitioner Lucia Embrado. We have
already declared said deed of sale as null and void since its object, Lot 564, is
conjugal property which was sold by Lucia Embrado without her husbands
conformity. The present vendees, Marcos Salimbagat and Pacifico Cimafranca, who
bought the property from Eda Jimenez have failed to persuade us that they acquired
the property in good faith.
WHEREFORE, the decision of respondent Court of Appeals dated 26 April 1979 is
REVERSED and SET ASIDE and the Decision of the then Court of First Instance
(now Regional Trial Court) of Zamboanga del Norte dated 14 June 1976 is
REINSTATED and ADOPTED herein as the decision in this case.

This is an appeal from a decision of the Court Of First instance of Bataan declaring
the Mangawang brothers owners of Lot No. 1633 of the Balanga cadastre.
It appears that Gavino Amposta applied with the Director of Lands for the issuance of
a homestead patent over a parcel of land situated at Balanga, Bataan. Pending action
on his application, cadastral proceedings were instituted by the government in said
municipality wherein Amposta filed an answer praying for the adjudication of the same
land in his favor which was designated therein as Lot No. 1633. On March 8, 1920,
the cadastral court rendered decision awarding the land to Amposta. Since no advice
on this matter was given either to the Bureau of Lands or to the Governor General,
the latter, on November 2, 1920, issued in favor of Amposta Homestead Patent No.
2388 covering the same land, and on November 29, 1920, Original Certificate of Title
No. 100 was issued to him by the Governor-General.
On December 20, 1922, the cadastral court issued a decree of registration of the land
in favor of Amposta pursuant to the decision rendered in the cadastral case, and or,
July 5, 1924, Original Certificate of Title No. 2668 was issued to him covering the
same property.
On November 24, 1941, Amposta sold the land to Santos Camacho surrendering to
him Original Certificate of Title No. 100, and because of this transfer said title was
cancelled and transfer Certificate of Title No. 5506 was issued in the name of
Camacho. On November 18, 1946, Santos-Camacho sold the land to Bonifacio
Camacho as a result of which Transfer Certificate of Title No. 248 was issued to the
latter. On April 28, 1948, Bonifacio Camacho mortgaged the land to the Rehabilitation
Finance Corporation (now Development Bank of the Philippines), and having failed to
pay the loan as agreed upon the land was sold at public auction to said bank as the
highest bidder. The period of redemption having elapsed without Camacho being able
to redeem the property, a final deed of sale was executed in favor of the bank, and
Transfer Certificate of Title No. 6961 was issued in its name on June 29, 1957.

Meanwhile, or on June 11, 1947, Gavino Amposta again sold the same property to
Lazaro and Arsenio Mangawang for the sum of P2,000.00, the vendees executing a
mortgage on the land to secure the payment of the balance. On March 17, 1948, the
vendees paid the balance of the purchase price, and an absolute deed of sale was
executed in their favor. In connection with this transaction, Amposta surrendered to
the vendees the title that was issued to him in the cadastral case, which was later
substituted by Transfer Certificate of Title No. 1098 issued in the name of the
vendees.1wph1.t
As a consequence of their purchase of the land, the Mangawang brothers took
possession thereof, and upon learning of this transfer, the Development Bank of the
Philippines, which as already stated became the owner of the property, commenced
the present action against them in the Court of First Instance of Bataan to recover its
possession and damages. In this case, the parties submitted a stipulation of facts,
and on the strength thereof, the court a quo rendered decision awarding the land to
the Mangawang brothers. Seasonably, the bank appealed to this Court.
Appellees contend that their right over the property in litigation should be restored
because the certificate of title they are holding is derived from that issued pursuant to
a decision rendered by a cadastral court, while the title being held by appellant was
merely based on the title issued in an administrative proceeding, upon the theory that
a judicial title is deemed preferred to one issued administratively. They further
contend that since the decision which gave rise to their title was rendered on March 8,
1920, which became final thirty days thereafter, their right over the land must be
deemed vested on said date, whereas the title of appellant is merely a deprivation of
the one issued to Amposta on November 29, 1920, or seven months after the
decision rendered in the cadastral case.
There is no doubt that if the two original certificates of title were issued on different
occasions to two different persons the contention of appellees would be correct it
being in line with the several decisions rendered by this Court.1 But the case at bar is
different. Here two certificates of title were issued to Gavino Amposta over the same
parcel of land, one under the Homestead Law and another under the Cadastral Act.
Said titles were regularly issued and on their face both appear to be valid, and under
such predicament it behooves Amposta to choose which of them he would prefer, as
he could not validly make use of both of them. But this Amposta did not do. On the
contrary, he took advantage of the situation by selling the land to two different
persons surrendering to each purchaser the pertinent certificate of title. The question
then that arises is: Who of the two buyers should be considered as the rightful owner
of the land?
On this score, it is important to consider the facts that led to the sale of the land to the
parties herein. Note that Amposta first sold the land to Santos Camacho on
November 24, 1941, who registered it in his name on the same date. And seven
years thereafter, or on March 17, 1948, Amposta again sold the land to the
Mangawang brother, who also registered it in their name on the same date. Since
both purchasers apparently have acted in good faith, as there is nothing in the
evidence to show that they did otherwise, we cannot but conclude that the sale made
by Amposta to Santos Camacho is the valid one considering that when Amposta sold
the same land to the Mangawang brothers he had nothing more to sell even if the title
he surrendered to them is one issued covering the same property. In legal

contemplation, therefore, Amposta sold a property he no longer owned, and hence

the transaction is legally ineffective.
On the other hand, the case under consideration can also be viewed under a different
angle. It can also be treated as one of double sale, where a person sells the same
land to two different persons who are unaware of the flaw that lies in its title, and
where the law adjudicates the property to the purchaser who first registers the
transaction in his name in the registry of property.2 And applying this principle, we
cannot conclude that the title should likewise be adjudicated to appellant whose
predecessor-in-interest acquired and registered the property much ahead in point of
time than the appellees. Verily, the title acquired by the latter is invalid and ineffective,
contrary to the finding of the court a quo.
WHEREFORE, the decision appealed from is reversed. We hereby declare appellant
owner of Lot No. 1633 of the Balanga cadastre and uphold the validity of Transfer
Certificate of Title No. 6961 issued in its favor. Transfer Certificate of Title No. 1098
issued in the name of appellees is hereby ordered cancelled. No pronouncement as
to costs.

34) PILAR LAZARO VDA. DE JACINTO, ET AL., petitioners,

vs.
SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., respondents.
----------------------------G.R. No. L-17957

May 31, 1962

SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., petitioners,

vs.
PILAR LAZARO VDA. DE JACINTO, ET AL., respondents.
DIZON, J.:
The present action filed in the Court of First Instance of Bulacan by Pilar Lazaro Vda.
de Jacinto and her son, Melchor Jacinto, Jr., against Salud del Rosario Vda. de
Jacinto and her children, is for the reconveyance to them of a parcel of land located in
barrio Sto. Rosario, Paombong, Bulacan, with an area of 5.4574 hectares, covered
originally by OCT No. 12515 and at present by TCT No. 5380 issued by the Register
of Deeds of Bulacan in the name of the now deceased Pedro Jacinto.
Their complaint alleged, in substance that the land subject matter thereof was a
portion of a bigger parcel allotted to their predecessor-in-interest, Melchor Jacinto,
Sr., when the estate of the deceased spouses Andres Jacinto and Maria C. Santos
was partitioned, and that Melchor's surviving brother, Pedro, predecessor-in-interest

of the defendants, had succeeded in registering it in his name through fraud and with
breach of trust, to their prejudice.
The defendants denied the allegations of the complaint and further alleged that their
predecessor-in-interest had acquired ownership of the property in litigation by virtue
of the provisions of Act 496 and/or by prescription.
After due trial the action was dismissed. On appeal to the Court of Appeals, however,
the latter reversed the decision and rendered judgment as follows:
IN VIEW OF ALL THE FOREGOING, we find that the errors assigned are well taken.
The decision appealed from, not being in conformity with the evidence and the law on
the matter, should be, as it is hereby reversed and another entered declaring the
plaintiffs-appellants owners of the land described in their complaint and designated as
Lot No. 5, plan S.C. No. 11075 (under TCT No. 5830) of the Register of Deeds of
Bulacan, and ordering the defendants-appellees, upon finality of this decision, to
reconvey the same to said plaintiffs-appellants. We find that appellants' claim for
damages are abandoned by them in their appeal, and that appellees' counterclaim, is
unmeritorious. Costs is taxed against the defendant-appellees, proportionately.
From the above decision both parties appealed by certiorari. The appeal of Pilar
Lazaro and her son is now G.R. No. L-17955, and that Salud del Rosario and children
is G.R. No. L-17957.
There is no dispute and the Court of Appeals so found that the land in question
originally belonged to the now deceased spouses Andres Jacinto and Maria C.
Santos, both of whom died intestate survived by their children named Melchor, Sr.,
(husband of Pilar Lazaro and father of Melchor, Jr.,) and Pedro (husband of Salud del
Rosario and father of her co-parties). Melchor, Sr. also died intestate before the
estate of his parents could be partitioned. After the estate was partitioned (Exhibit A),
their surviving son, Pedro, besides receiving his share, continued administering the
property which corresponded to the heirs of his deceased brother. Among them was a
richland located in barrio Sto. Rosario, Paombong, with an area of 11 hectares, 34
ares and 3 centiares, Pedro Jacinto himself, according to Exhibit A, received as part
of his share a richland in the same barrio, but with an area of 3 hectares, 57 ares and
69 centiares only.
In the year 1926 Pedro Jacinto delivered to the widow of his deceased brother the
properties that corresponded to the latter. This delivery, according to the Court of
Appeals, was made only "in paper" because Pedro did not make an actual delivery of
the properties but limited himself to telling his sister-in-law that there were "kasamas"
working for her. One year thereafter, although the properties composing the estate of
his deceased parents had already been surveyed since June 10, 1913, as shown by
Exhibit B, Pedro caused them to be resurveyed, this resulting in the drawing of Exhibit
C. The practical result of the resurvey as found by the Court of Appeals was that
a portion of lot 2 described in Exhibit B, which was subsequently one of the properties
allotted to the heirs of Melchor, was segregated therefrom and was designated as lot
5 in Exh. C. After the resurvey, Pedro applied to register, and succeeded in having lot
5 and other properties registered in his name, for which reason OCT No. 12515 was
issued covering three lots numbered 2, 4 and 5. Lot 2 was subsequently sold, so the
original certificate of title was cancelled and TCT No. 583 was issued.1wph1.t

From all the evidence of record the Court of Appeals found that Pilar Lazaro and her
son "were always of the belief, until the latter part of 1953, that he (Pedro) delivered
to them all that which were rightfully theirs"; that they discovered the shortage only
when Pilar less than one year before the action was filed decided to sell the
parcel of more than 11 hectares that she was supposed to have received from her
brother-in-law; that it was only then that she realized for the first time that the parcel
delivered to her had only an area of 5.8829 hectares. The Court further found that the
land in question was not the same parcel allotted to Pedro Jacinto, and located in the
same barrio, which had an area of a little over three hectares only.
On the basis of the facts stated above which are now final and beyond review
the Court of Appeals made the following considerations:
It is not also controverted that upon a survey of the property (item No. 1 of Exhibit "A",
which should have an area of 11.3403 hectares), when appellant Pilar Lazaro Vda. de
Jacinto decided to sell four (4) hectares of the supposed 11.3403 hectares, there was
lacking 54,574 square meters therefrom which incidentally corresponded exactly to
Lot No. 5, item No. 2 of TCT No. 5830, in the name of Pedro Jacinto. Appellees claim,
however, that the supposed 11,3403 hectares appearing in Exhibit "A", could have
been short of 54,574 square meters and that the 3.5769 hectares appearing in the
receipt Exhibit "1", item No. 3 thereof, could have been really 5.5474 hectares, which
is not the lot in question. The striking coincidence in the area disputed and that
registered in the name of appellees' predecessor-in-interest, more than catches the
eye. Under the partition, the appellants were to receive as one of the properties,
11.3403 hectares of riceland. This being the case, there are no reasons discernible in
the records why, after an actual survey of the said property, 54,574 meters should be
lacking therefrom. It could not be said that the area was just a product of a
calculation. When Exhibit "A" was executed, the boundaries were plainly indicated
thereon. As a matter of fact, Exhibit "A" designated the number of hectares, ares and
centiares, which is indicative of the preciseness of the area to be delivered to the
respective heirs. The fact that the lacking measurement fits exactly with Lot No. 5 of
Pedro Jacinto under TCT No. 5830, warrants the conclusion that Pedro Jacinto to had
deprived the appellants herein of their just share. . . .
There are sufficient proofs to show that fraud was practiced by Pedro Jacinto against
the appellants herein. When Pedro supposedly delivered the property, he did it only in
paper, without bringing plaintiff Pilar Lazaro to the premises, although he told her that
there were "kasamas" working for her. On December 15, 1927, Pedro Jacinto caused
that the properties be resurveyed, which resulted in the drawing of Exhibit "C", which
in effect amended Exhibit "B". Part of Lot 2 was segregated and had been designed
as lot 5 in Exhibits "C". And this Lot 5 has an area exactly equal to the area which
was found lacking in the 11.3403 hectares belonging to the plaintiffs-appellants. (pp.
6-7 & 9, decision)
As a result of the foregoing, the Court of Appeals held that Pedro Jacinto must be
deemed to have registered the land in question as a trustee for and in behalf of the
widow and son of his deceased brother. The pertinent portion of its decision reads as
follows:
Implied Trusts have been said to be those which are raised by legal implication from
the facts and circumstances of the case, to effect the presumed intention of the
parties or to satisfy demands of justice or to protect against fraud (65 C.J. 222), or

those enforced by equity because morality, justice, conscience, and fair dealing
demand that the relation be established (supra). The new Civil Code provides that, "If
property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom
the property comes" (Art. 1456). That there was fraud on the part of Pedro Jacinto in
registering the property in his name to the prejudice of the appellants is revealed by
the records. It will be seen that on Exhibit "C", the amended survey of the properties
which Pedro Jacinto and Melchor Jacinto, Sr. inherited from their parents, changes
were made. This resurvey was done at the instance of Pedro Jacinto, in spite of the
fact that on June 10, 1913, the same, properties were already surveyed, divided and
delineated (Exhibit "B"). The boundaries of Lot 5 as appearing in Exhibit "G" (the
amended plan) are the same as those appearing in Exhibit "B" minus the designation
as Lot 5 and its segregation from the greater mass of Lot 2. In Exhibit "E" or "I", a
receipt of the properties inherited by Pedro Jacinto from his father Andres, no
property coincide in boundaries with the properties given to Pedro. Under the above
set of facts, it is quite evident that the property in question rightfully belonged to the
plaintiffs and that an implied trust was created between the plaintiffs and the
appellees' father Pedro Jacinto. (pp. 9-10, decision)
The heirs of Pedro Jacinto now contend that the Court of Appeals erred in applying to
this case the law of implied or constructive trusts, and, in holding that, under the facts
of the case, the right of the heirs of Melchor Jacinto to recover the property in
question is imprescriptible. We find these contentions to be without merit.
The following findings of fact made by the Court of Appeals cannot now be
questioned: (1) after the partition of the estate of the deceased spouses Andres
Jacinto and Maria C. Santos, Pedro Jacinto, their surviving son, continued
administering the properties allotted to the heirs of his deceased brother; (2) when he
delivered the share of the latter, he withheld delivery of the parcel of more than 11
hectares allotted, among others, to his aforesaid co-heirs; (3) one year thereafter he
caused the portion withheld from co-heirs to be registered in his name; (4) the widow
and son of his deceased brother did not know that the parcel of land delivered to
them by their co-heir was short of 5 hectares, 45 ares and 74 centiares, and said
parties "were always of the belief, until the latter part of 1953, that he (Pedro)
delivered to them all that which were rightfully theirs". In view of these facts, it would
be against reason and good conscience not to hold that Pedro Jacinto committed a
breach of trust which enabled him to secure registration of the land in question to the
prejudice of his co-heirs. Therefore, in an lotion like the present, he may be ordered to
make reconveyance of the property to the person rightfully entitled to it. In fact, it has
been held that even in the absence of fraud in obtaining registration, or even after the
lapse of one year after the issuance of a decree of registration, a co-owner of land
who applied for and secured its adjudication and registration in his name knowing that
it had not been allotted to him in the partition, may be compelled to convey the same
to whoever received it in the apportionment, so long as no innocent third party had
acquired rights therein, in the meantime, for a valuable consideration (Palet vs.
Tejedor, 55 Phil. 790-798). Indeed, any rule to the contrary would sanction one's
enrichment at the expense of another. Public policy demands that a person guilty of
fraud or, it least, of breach of trust, should not be allowed to use a Torrens title as a
shield against the consequences of his wrongdoing (Cabanos vs. Register of Deeds,
etc., 40 Phil. 620; Severino vs. Severino, 41 Phil. 343).

Lastly, the claim of the heirs of Pedro Jacinto that the latter had acquired ownership of
the property in litigation by prescription, is likewise untenable. As we have recently
held in Juan, et al. vs. Zuiga, G.R. No. L-17044, April 28, 1962, an action to enforce
a trust is imprescriptible. Consequently, a cohier who, through fraud, succeeds in
obtaining a certificate of title in his name to the prejudice of his co-heirs, is deemed to
hold the land in trust for the latter, and the action by them to recover the property
does not prescribe.
On the other hand, in their appeal Pilar Lazaro and her son contend that the Court of
Appeals erred in holding that they had abandoned their claim for damages. We also
find this to be without merit.
As stated heretofore, the Court of First Instance of Bulacan, after the trial, dismissed
this case and the plaintiffs (Pilar Lazaro Vda. de Jacinto and her son) appealed to the
Court of Appeals. In rendering judgment the latter court held that said appellants had
abandoned their claim for damages, presumably because of their failure to make in
their brief in assignment of error to the effect that the Court of First Instance had erred
in not awarding them damages. It is now their contention that having appealed from
the dismissal, they were no longer in duty bound to make a separate specific
assignment of error regarding the court's failure to award damages, because their
right to them was entirely dependent upon the favorable resolution of the assignment
of errors made in their brief assailing the dismissal. This argument loses force upon
consideration of the fact that their right to have the reconveyance was one thing, and
their right to damage, another. There could be reconveyance in their favor, without
this necessarily entitling them to damages, as for instance, if they produced no
evidence to prove them, or that produced does not sufficiently prove the claim. It
seems clear, therefore, that it was their duty as appellants to bring up before the
Court of Appeals, by specific assignment of error, this particular question.
WHEREFORE, the decision appealed from being in accordance with law, the same is
hereby affirmed, with costs.

35) FELIPE SEVILLE in his capacity as judicial administrator of the estate of

JOAQUIN ORTEGA and/or FELIPE SEVILLE, EMILIA ESTRADA, MARIA S.
TELLDER, MA. ISABEL SEVILLE, MA. TERESITA LICARDO, FRANCISCO
SEVILLE, RAMON O. SEVILLE, JOSE MARIE SEVILLE, GEMMA ALVAREZ-

ASAYAS, ANNABELLE ALVAREZ-GONZALES, SYLVIA ALVAREZ-LIOK, ADOLFO O.

ALVAREZ JR., DIANA ALVAREZ-DABON, MARIA SALVADOR O. POLANCOS and
JOAQUIN ORTEGA II as successors-in-interest of JOAQUIN ORTEGA and his
estate, petitioners, vs. NATIONAL DEVELOPMENT COMPANY, LEYTE SAB-A
BASIN DEVELOPMENT AUTHORITY, PHILIPPINE ASSOCIATED SMELTING AND
REFINING CORPORATION, LEPANTO CONSOLIDATED MINING CO., PHILIPPINE
PHOSPHATE FERTILIZER CORPORATION, CALIXTRA YAP and REGISTER OF
DEEDS OF LEYTE, respondents.
DECISION
PANGANIBAN, J.:
Unless a public land is shown to have been reclassified as alienable or actually
alienated by the State to a private person, that piece of land remains part of the public
domain. Hence, occupation thereof, however long, cannot ripen into ownership.
The Case
Before us is a Petition for Review on Certiorari assailing the November 29, 1996
Decision of the Court of Appeals[1] (CA), as well as the May 19, 1997 CA
Resolution[2] denying the Motion for Reconsideration. The dispositive part of the CA
Decision reads as follows:
WHEREFORE, the appealed decision is REVERSED and SET ASIDE. Another
judgment is hereby rendered dismissing the complaint. The counterclaims of
appellants are denied. Costs against plaintiffs-appellees.[3]
The Facts
The appellate court narrated the undisputed facts in this manner:
1. By virtue of Presidential Decree No. 625, Leyte Sab-A Basin Development
Authority (LSBDA) was created to integrate government and private sector efforts for
a planned development and balanced growth of the Sab-a Basin in the [P]rovince of
Leyte, empowered to acquire real property in the successful prosecution of its
business. Letter of Instruction No. 962 authorized LSBDA to acquire privately-owned
lands circumscribed in the Leyte Industrial Development Estate (LIDE) by way of
negotiated sales with the landowners.
2. On June 14, 1980, [Respondent] Calixtra Yap sold to LSBDA Lot No. 057 SWO 08000047 consisting of 464,920 square meters, located at Barangay Sto. Rosario,
Isabel, Leyte, covered under Tax Declarations Nos. 3181, 3579, 3425, 1292 and 4251
under the name of said vendor.
3. On June 1, 1982, appellant LSBDA filed a Miscellaneous Sales Application with the
Bureau of Lands covering said lot together with other lots acquired by LSBDA with an
aggregate area of 442, 7508 square meters.
4. After due notice and investigation conducted by the Bureau of Lands,
Miscellaneous Sales Patent No. 9353 was issued in the name of [Respondent]
LSBDA on the basis of which Original Certificate of Title No. P-28131 was transcribed
in the Registration Book for the [P]rovince of Leyte on August 12, 1983 in the name of
[Respondent] LSBDA. On December 14, 1989, LSBDA assigned all its rights over the

subject property to its [Co-respondent] National Development Company (NDC) as a

result of which a new Transfer Certificate of Title was issued on March 2, 1990 by the
Registry of Deeds for the province of Northern Leyte in the name of NDC. The subject
property was leased to [Respondents] Philippine Associated Smelting & Refining
Corporation (PASAR), Philippine Phosphate Fertilizer Corporation (PHILPHOS) and
Lepanto Consolidated Mining Co., Inc. (LEPANTO).
5. On November 29, 1988, the Estate of Joaquin Ortega represented by judicial
administrator Felipe Seville filed with the Regional Trial Court (Branch 12) of Ormoc
City, a complaint for recovery of real property, rentals and damages against the
above-named [respondents] which complaint was later on amended on May 11, 1990.
[Respondents] filed their respective Answers. After trial, the trial court rendered
judgment the dispositive portion of which reads as follows:
WHEREFORE, [a] decision is hereby rendered for [petitioners] and against
[respondents].
1. The Deed of Sale executed by Calixtra Yap on June 14, 1980 in favor of LSBDA,
(Exhibit PP and 25) conveying the subject property to said LSBDA is declared NULL
and VOID ab initio;
2. The intestate estate of JOAQUIN ORTEGA is declared the owner in fee simple of
the 735,333 square meters real property subject of the present action and defendant
NDC is ordered to segregate the same area from OCT P-28131 and CONVEY the
same to the Estate of Joaquin Ortega;
3. Upon the segregation of the 735,333 square meters from OCT No. P-28131 the
Register of Deeds of the Province of Leyte is ordered to issue a new title to the said
portion in the name of the Intestate Estate of Joaquin Ortega;
4. [Respondents] LSBDA, NDC, PASAR, are ordered to pay jointly and severally to
[petitioners] the sum of FOUR MILLION SEVEN HUNDRED EIGHTY FOUR
THOUSAND EIGHT HUNDRED FORTY SIX PESOS (P4,784,846.00) as rentals due
from 1979 to the present, plus accrued interest pursuant to par. 2 of the Lease
Contract between NDC and PASAR. (Exhibit 54)
5. [Respondents] LSBDA, NDC, and PHILPHOS are also ordered to pay jointly and
severally [petitioners] the sum of TWO MILLION EIGHTY SIX THOUSAND THREE
HUNDRED NINETY EIGHT PESOS AND SIXTY CENTAVOS (P2,086,398.60) as
accrued rentals of PHILPHOS from 1979 to present, plus the accrued interest for nonpayment pursuant to paragraph 2 of the same Lease Contract cited above;
6. [Respondents] are ordered to pay jointly and severally [petitioners] P200,000.00 as
indemnity for the value of the ancestral home;
7. [Respondents] are also ordered to pay jointly and severally [petitioners] the sum of
P250,000.00 as reimbursement for attorneys fees and the further sum of P50,000.00
as expenses for litigation;
8. Finally, [petitioners] and [respondents] are ordered to sit down together and discuss
the possibility of a compromise agreement on how the improvements introduced on
the landholding subject of the present suit should be disposed of and for the parties to

submit to this Court a joint manifestation relative thereto. In the absence of any such
compromise agreement, such improvements shall be disposed of pursuant to Article
449 of the New Civil Code.

acquisitive prescription, because they and their predecessors in interest had been in
possession of it for more than thirty years.[7] Although it was the subject of settlement
proceedings, petitioners further claim that Yap sold the same to LSBDA without the
permission of the trial court.

Costs against [respondents].

SO ORDERED.[4]
Ruling of the Court of Appeals
Citing the Regalian doctrine that lands not appearing to be privately owned are
presumed to be part of the public domain, the CA held that, first, there was no
competent evidence to prove that the property in question was private in character.
Second, possession thereof, no matter how long, would not ripen into ownership,
absent any showing that the land had been classified as alienable. Third, the property
had been untitled before the issuance of the Miscellaneous Sales Patent in favor of
the LSBDA. Fourth, petitioners were guilty of laches, because they had failed to apply
for the judicial confirmation of their title, if they had any. Fifth, there was no evidence
of bad faith on the part of LSBDA in dealing with Yap regarding the property.
Hence, this Petition.[5]
The Issues
In their Memorandum, petitioners submit the following issues for the consideration of
the Court:[6]
A. Whether or not the sale by Calixtra Yap of the Estate of the Late Joaquin Ortega in
favor of LSBDA was null and void.
B. Whether or not the issuance of a Miscellaneous Sales Patent and an Original
Certificate of Title in favor of LSBDA was valid.

Disputing these contentions, respondents and the appellate court maintain that
petitioners have not shown that the land had previously been classified as alienable
and disposable. Absent such classification, they argue that possession of it, no matter
how long, could not ripen into ownership.
We agree with respondents and the appellate court. First. There was no showing that
the land had been classified as alienable before the title was issued to LSBDA;
hence, petitioners could not have become owners thereof through acquisitive
prescription. Second, petitioners challenge to LSBDAs title cannot be granted,
because it is based on a wrong premise and amounts to a collateral attack, which is
not allowed by law.
Public Character of the Land
Under the Regalian doctrine, all the lands of the public domain belong to the State,
which is the source of any asserted right to ownership of land. All lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State.
[8] In Menguito v. Republic,[9] the court held that [u]nless 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. Indeed, occupation thereof in the concept of owner, no
matter how long, cannot ripen into ownership and be registered as a title. To
overcome such presumption, incontrovertible evidence must be shown by the
applicant. Absent such evidence, the land sought to be registered remains
inalienable.
A person in open, continuous, exclusive an notorious possession of a public land for
more than thirty years acquires an imperfect title thereto. That title may be the subject
of judicial confirmation, pursuant to Section 48 of the Public Land Act, which provides:

C. Whether or not petitioners are guilty of laches.

D. Whether or not petitioners are entitled to the remedy of reconveyance and the
damages awarded by the trial court.
In the main, the Court is called upon to determine the validity of LSBDAs title. In
resolving this issue, it will also ascertain whether, before the issuance of the title, the
land was private or public.
The Courts Ruling
The Petition has no merit.
Main Issue:
Validity of LSBDAs Title
Petitioners argue that LSBDAs title to 73 hectares of the 402-hectare Leyte Industrial
Development Estate was void, having allegedly been obtained from Calixtra Yap who
had no right to it. They maintain that they acquired title to the disputed property by

SECTION 48. The following described citizens of the Philippines, occupying lands of
public domain or claiming to own any such lands or an interest thereon, 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 Registration Act, to wit:
xxx xxx xxx
(b) those who by themselves or through their predecessor in-interest have been in
open, continuous, exclusive and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition 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. They shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall he entitled to a certificate of title under the provisions of this Chapter.

Under Section 4 of Presidential Decree (PD) No. 1073,[10] paragraph b of the

aforecited provision applies only to alienable and disposable lands of the public
domain. The provision reads:

Clearly, the burden of proof that the land has been classified as alienable is on the
claimant.[18] In the present case, petitioners failed to discharge this burden. Hence,
their possession of the disputed property, however long, cannot ripen into ownership.

SEC. 4. The provisions of Section 48 (b) and Section 48 (c), Chapter VIII, of the
Public Land Act, are hereby amended in the sense that these provisions shall apply
only to alienable and disposable lands of the public domain which have been in open,
continuous, exclusive and notorious possession and occupation by the applicant
himself or thru his predecessor-in-interest, under a bona fide claim of acquisition of
ownership, since June 12, 1945.

LSBDAs Title

It should be stressed that petitioners had no certificate of title over the disputed
property. Although they claim that their title was based on acquisitive prescription,
they fail to present incontrovertible proof that the land had previously been classified
as alienable. They simply brush aside the conclusion of the CA on this crucial point by
saying that it was without factual basis.[11] Instead, they maintain that the private
character of the land was evidenced by various tax declarations, Deeds of Sale, and
Decisions of the trial court and even the Supreme Court.[12]
Petitioners arguments are not convincing. Tax declarations are not conclusive proofs
of ownership, let alone of the private character of the land. At best, they are merely
indicia of a claim of ownership.[13] In Spouses Palomo v. CA,[14] the Court also
rejected tax declarations as proof of private ownership, absent any showing that the
forest land in question had been reclassified as alienable.
Moreover, the Deeds of Sale of portions of the disputed property, which Joaquin
Ortega and several vendors executed, do not prove that the land was private in
character. The question remains: What was the character of the land when Ortega
purchased it? Indeed, a vendee acquires only those rights belonging to the vendor.
But petitioners failed to show that, at the time, the vendors were already its owners, or
that the land was already classified as alienable.
Also misplaced is petitioners reliance on Ortega v. CA,[15] in which the Supreme
Court allegedly recognized the private character of the disputed property. In that case,
the sole issue was whether the respondent judge xxx acted in excess of jurisdiction
when he converted Civil Case No. 1184-O, an action for quieting of title, declaration of
nullity of sale, and annulment of tax declaration of a parcel of land, into an action for
the declaration of who is the legal wife, who are the legitimate children, if any, and
who are the compulsory heirs of the deceased Joaquin Ortega.[16] The Court did not
all make any ruling that the property had been classified as alienable.
In any event, Ortega arose from a suit for quieting of title, an action quasi in rem that
was binding only between the parties.[17] The present respondents as well as the
Bureau of Lands, which subsequently declared that the land was public, are not
bound by that ruling, because they were not impleaded therein.
While petitioners refer to the trial court proceedings supposedly recognizing the
private character of the disputed property, they make no claim that these cases
directly involve the classification of the land, or that the Bureau of Lands is a party
thereto.

Equally unmeritous is the argument of petitioners that the title of LSBDA is void. As
earlier stated, they claim that such title was derived from Calixtra Yap, who was
allegedly not the owner of the property. Petitioners assume that LSBDA, having
acquired the rights of Yap, resorted to a confirmation of her imperfect title under
Section 48 of the Public Land Act. This argument is devoid of factual or legal basis.
Petitioners fail to consider that the title of LSBDA was based, not on the conveyance
made by Yap, but on Miscellaneous Sales Patent No. 9353 issued by the director of
the Bureau of Lands. In fact, after LSBDA had filed an application for patent, the
Bureau of Lands conducted an investigation and found that the land was part of the
public domain. After compliance with the notice and publication requirements, LSBDA
acquired the property in a public auction conducted by the Bureau of Lands.[19]
Petitioners insist, however, that LSBDA was estopped from claiming that the land was
public, because the Deed of Sale executed by Yap in its favor stipulated that the seller
is the absolute owner in fee simple of the xxx described property.[20] It is scarcely
necessary to address this point. To begin with, the power to classify a land as
alienable belongs to the State, not to private entities. Hence, the pronouncements of
Yap or LSBDA cannot effect the reclassification of the property. Moreover, the
assailed misrepresentation was made by Yap as seller. Hence, objections thereto
should be raised not by petitioners but by LSBDA, the contracting party obviously
aggrieved.
In any case, the actions of LSBDA after Yaps conveyance demonstrated its position
that the disputed land was part of the public domain. That this was so can be inferred
from LSBDAs subsequent application for a Miscellaneous Sales Patent and, in a
public auction, its purchase of the property from the Bureau of Lands. Indeed, Yap
merely conveyed a claim, not a title which she did not have.
Collateral Attack
There is another reason for denying the present Petition. Petitioners insist that they
are not seeking the re-opening of a decree under the Torrens system. Supposedly,
they are only praying for the segregation of 735,333 square meters of land, or 73
hectares more or less from the OCT No. P-28131 issued to LSBDA.[21] This
disputation is mere quibbling over the words, plain and simple.
Semantics aside, petitioners are effectively seeking the modification of LSBDAs OCT,
which allegedly encompassed even a parcel of land allegedly belonging to them.
Hence, the present suit, purportedly filed for the recovery of real property and
damages, is tantamount to a collateral attack not sanctioned by law. Section 48 of PD
1529, the Property Registration Decree, expressly provides:
SEC. 48. Certificate not subject to collateral attack. -- A certificate of title shall not be
subject to collateral attack. It cannot be altered, modified, or cancelled except in a
direct proceeding in accordance with law.

It has been held that a certificate of title, once registered, should not thereafter be
impugned, altered, changed, modified, enlarged or diminished, except in a direct
proceeding permitted by law. Otherwise, the reliance on registered titles would be
lost.[22]
Moreover, the title became indefeasible and incontrovertible after the lapse of one
year from the time of its registration and issuance.[23] Section 32 of PD 1529
provides that [u]pon the expiration of said period of one year, the decree of
registration and the certificate of title shall become incontrovertible. Any person
aggrieved buy such decree of registration in any case may pursue his remedy by
action for damages against the applicant or other persons responsible for the fraud.
Although LSBDAs title was registered in 1983, petitioners filed the amended
Complaint only in 1990.
Reconveyance
Petitioners also claim that the disputed property should be reconveyed to them. This
cannot be allowed. Considering that the land was public before the Miscellaneous
Sales Patent was issued to LSBDA, petitioners have no standing to ask for the
reconveyance of the property to them. The proper remedy is an action for reversion,
which may be instituted only by the Office of the Solicitor General, pursuant to section
101 of the Public Land Act, which reads as follows:
SEC. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the [Republic] of the
Philippines.
Verily, the prayer for reconveyance and, for that matter, the entire case of petitioners
rest on the theory that they have acquired the property by acquisitive prescription;
and that Yap, without any right or authority, sold the same to LSBDA.
Conclusion
In the light of our earlier disquisition, the theory has no leg to stand on. Absent any
showing that the land has been classified as alienable, their possession thereof, no
matter how lengthy, cannot ripen into ownership. In other words, they have not
become owners of the disputed property. Moreover, LSBDAs title was derived from a
Miscellaneous Sales Patent, not from Yap. Finally, petitioners cannot, by a collateral
attack, challenge a certificate of title that has already become indefeasible and
incontrovertible.
If petitioners believe that they have been defrauded by Yap, they should seek
redress, not in these proceedings, but in a proper action in accordance with law.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.

36) THE DIRECTOR OF LANDS, plaintiff-appellee,

vs.
MARIA ABANILLA and THE REGISTER OF DEEDS OF ISABELA, defendants,
MARIA ABANILLA, defendant-appellant.
MAKASIAR, J.:
This is a direct appeal to the Supreme Court on a pure question of law from the
decision of the then Court of First Instance of Isabela, 1st Judicial District, Branch 1,
in Civil Case No. 1308, ordering the cancellation of Free Patent No. V2317 and
Original Certificate of title No. P-2723 issued in favor of defendant-appellant.
Plaintiff- appellee (Director of Lands) in his complaint alleged that defendantappellant (Maria Abanilla had, through fraudulent means, secured a free patent and
an original certificate of title over a public land known as Lot No.5798, Pls 62, situated
in Roxas, Isabela; that the said free patent and original certificate of title included
portions of land occupied by Esteban Esquivel and Wilson Nuesa; and that the
portion occupied by Wilson Nuesa was sold to him by Dominador Cullanan who also
bought the same from defendant-appellant Abanilla herself.
Defendant-appellant Abanilla in her answer alleged that her application for a free
patent over a parcel of public land, known as 14t No. 5798, Pls-62, and the sub t is of
the original certificate of title, were lawful since the occupancy of Esteban Esquivel of
the portion claimed by him of Lot No. 5798, Pls-62, was merely tolerated by her and
was never adverse, and Wilson Nuesa's occupancy never her right over the portion
he claims, because the sale made by her to Dominador Cullanan was void ab initio

The trial court entered a judgment, declaring Free Patent No. V-2317 and the
corresponding Original Certificate of Title No. P-2317 null and void, ordering the
Director of Lands to cancel said patent and issue another patent in favor of Maria A
excluding the respective portions of land by Esteban Esquivel and Wilson Nuesa and
ordering Maria Abanilla to surrender to the Register of Deeds of Isabela Original
Certificate of Title No. P-2723, who was thereby ordered to cancel the same (p. 16,
CFI rec.).
This being an appeal on question of law exclusively, We therefore consider as
conclusive the following findings of fact made by the trial court:
The evidence shows that on April 5, 1949, Maria Abanilla applied for Free Patent over
a public land known as Lot No. 5798, Pls-62, situated in Roxas, Isabela; That on
March 19,1952, Esteban Esquivel having discovered that the said Free Patent
Application included a portion of land occupied by him since before the early part of
1949, registered his opposition therein and asked the Bureau of Lands to investigate
the matter (Exh. 'G') that on May 12, 1962, Dominador Cullanan also registered his
opposition to the said Free Patent Application upon the ground that it included a
portion of the land sold to him by Maria Abanilla by virtue of a public document dated
April 20, 1950 (Exh. 'J') that on July 3, 1952, for and in consideration of the sum of
Pl,000.00, Dominador Cullanan sold the same portion of land to Wilson Nuesa by
virtue of a public instrument notarized before the Municipal Judge of Roxas (Exh. 'K')
that pursuant to the protest filed by Esteban Esquivel the Director of Lands, on March
29, 1952, ordered the investigation of said protest (Exh. 'E') that by reason of the
acquisition of the same land holding of Dominador Cullanan by Wilson Nuesa, the
latter intervened in the Administrative Investigation of the land conflict between
Esteban Esquivel and Maria Abanilla as claimant- intervenor (Exh. 'I') that while the
aforesaid administrative case was pending investigation by the Fact Finding
Commitee composed of representatives of the Bureau of Lands and the Land
Settlement and Development Corporation (LASEDECO) Maria Abanilla, on February
11, 1953, secured the issuance of Free Patent No. V-2317 in her name covering the
entire Lot No. 5798, Pls-62, with an area of 2.1664 hectares; that by virtue of the said
patent, Original Certificate of Title No. P-2723 was issued in her name by the Register
of Deeds of Isabela on June 16, 1953 (Exh. '1'); that on June 25, 1953, the Fact
Finding Committee heard the administrative case aforesaid and submitted its report
on July 31, 1953, sustaining the 'claim of preferential right' of Esteban Esquivel and
that of Claimant-Intervenor Wilson Nuesa and recommending the annulment of
Patent No. P-2317, as well as the Original Certificate of Title No. P-2723 in the name
of Maria Abanilla insofar as the portions claimed by them are concerned (Exh. '1');
that acting upon the said report the Director of Lands rendered a decision holding that
Maria Abanilla acted in bad faith and procured the issuance of the aforesaid patent
thru misrepresentation and directing that appropriate steps be taken to institute court
action for the Avoidance and cancellation of Patent No. V-2317 and the issuance of
another patent for the correct area adjudicated to her in the said decision, excluding
therefrom the portions claimed by Nuesa and Esquivel (Exh. 'N') that Maria Abanilla
filed a motion for reconsideration dated May 5, 1954 (Exh. 'O'); to set aside the
aforesaid decision, and on August 30, 1956, the motion for reconsideration was
denied by the Director of Lands (Exh. 'P') that upon the denial of her motion she filed
a second motion for reconsideration dated September 29, 1956 (Exh. 'Q') which was
similarly denied by the Director of Lands in his Order dated October 19, 1956 (Exh.
'R') that on November 19, 1956 she filed a notice of appeal against the decision of the
Director of Lands and asked that the same be reviewed and reversed by the

Secretary of Agriculture and Natural Resources (Exh. 'S') that on January 16, 1958,
the Secretary of Agriculture and Natural Resources affirmed the derision of the
Director of Lands appealed from and the appeal; and that on August 27,1958, the
Secretary denied the motion for reconsideration to set aside his co nfirmatory n (Exh.
'U').
That on November 5, 1956, Maria Abanilla filed an action with this Court against
Esteban Esquivel Wilson Nuesa and three other for the recovery of possession of the
portions of land involved in the administrative case between them in the land
department; that after due trial, the Court rendered a decision in favor of the
defendants Wilson Nuesa and Esteban Esquivel and against the plaintiff dismissing
the complaint, that Maria Abanilla brought the cam on appeal to the Court of Appeals
which affirmed in toto the appealed from, on June 14, 1960 (Exh. 'V'); that on August
11, 1959, the Director of Lands filed this present case to annul the patent and original
certificate of title issued to Maria Abanilla (pp. 13-14, CFI rec.).
The case is now before this Court on a pure question of law: Whether the patent and
original certificate of title issued by virtue of the said patent can still be cancelled
despite the of six (6) years and six (6) months from their is issuance.
Defendant appellant now claimed that the lower [1] in ordering the cancellation of
both Free Patent No. v-2317 and Original Certificate of Title No. P-2327 of the
Register of Deeds of Isabela, both in the name of Maria A - and 12] in not dismissing
the action considering that a period of six (6) years and six (6) months had already
elapsed from February 11, 1953 when the land patent was issued to August 11, 1959
when the present action was instituted in the trial court (pp. 48-49, rec.).
WE find that the trial court did not commit either of the assigned errors.
It should be noted that, pursuant to explicit and repeated averments in the complaint
defendant-appellant Maria Abanilla had acted in bad faith, with full knowledge of the
factual background of the case, particularly of the public, continuous and adverse
possession of Esteban Esquivel at the nine she applied for patent over the land in
question, and up to the time she secured the issuance of an original certificate of title
over the said land. The fact that Maria Abanilla acted fraudulently in securing patent
No. V-2317 and Original Certificate of Title No. P-2723 was clearly and definitely
established in the decision of the Director of Lands (Exh. 'N'), where it was held that
Maria Abanilla acted in bad faith and procured the issuance of the aforesaid patent
thru misrepresentation and directed that appropriate steps be taken to institute a court
action for the voidance and cancellation of Patent No. V-2317 and the issuance of
another patent for the correct area adjudicated to her in the said decision, excluding
therefrom the portions claimed by Nuesa and Esquivel. Appellant Maria Abanilla even
exhausted her administrative remedies by appealing to then Secretary of Agriculture
and Natural Resources (now Minister of Natural Resources) [Exh. 'S'] who affirmed
the decision of the Director of Lands [Exh. 'U']
This Court held in the case of Eusebio vs. Sociedad Agricola de Balarin (L-21519,
March 31, 1966, 16 SCRA 569) that the factual findings of the Director of Lands,
approved by the Secretary of Agriculture and Natural Resources, are conclusive in
the absence of proof of fraud, imposition, error or abuse of discretion.

This Court reiterated said principle in Ramirez vs. Court of Appeals (1,23591, Oct. 31,
1969, 30 SCRA 297).
In the previous case filed by Abanilla herself against the same c claimants Esquivel
and Nuesa, decided on June 14, 1960, the Court of Appeals, speaking thru then CA
Justice, later Associate Justice of the Supreme Court, Conrado V. Sanchez,
concurred in by then CA Justices Natividad and Angeles, both of whom were
promoted as Associate Justices of the Supreme Court, found:
... So that, as the case now stands, the dispute solely is between appellant Maria
Abanilla on the one hand, and appellees Esteban Esquivel and Wilson Nuesa, on the
other.

On November 5, 1956, appellant started the present suit.

It subsequently developed that on November 22, 1956, appellant perfected an appeal
from the decision of the Director of Lands aforesaid to the Secretary of Agriculture
and Natural Resources.
On January 16, 1958, the Secretary of Agriculture and Natural Resources affirmed in
toto the decision of the Director of Lands.
On August 27, 1958, the said Secretary denied appellant's motion to reconsider the
confirmatory decision.
We win take up the case piecemeal meal.

On April 5, 1949, appellant Maria Abanilla Med with the Bureau of lands an
application for free patent over Lot Nor 5798, Pls-62, aforesaid.
On March 19, 1952, appellee Esteban Esquivel registered his opposition to
appellant's application upon the ground that the same included a portion of landcircumscribed by the letters C, D, G and H of the sketch shown in Exhibit 5- which
pertained to appellee.
On May 12, 1952, Dominador C opposed appellant's application upon the averment
that the same also covered an area designated in the sketch set forth in Exhibit 5 by
the letters A, B, E and F-which was sold to him by the very same applicant Maria
Abanilla In view of the fact that Dominador Cullanan had since conveyed his holding
to appellee Wilson Nuesa, the latter intervened in the proceedings.
On February 11, 1953, while the protests heretofore mentioned were pending
investigation, Free Patent No. V-2317, covering the entire Lot No. 5798, Pls-62, with
an area of 2.1664 hectares, was issued in the name of appellant Maria Abanilla
On June 16, 1953, Original Certificate of Title No. P-2723 covering the same land was
issued by the Register of Deeds of Isabela to said Maria Abanilla
On June 25, 1953, the fact-finding committee of the Bureau of Lands and the Land
Settlement and Development Corporation -obviously unaware of the prior issuance of
a patent and title over the land-opened hearings on the protests of appellee Esquivel,
and Cullanan who was substituted by appellee Wilson Nuesa.
On March 20, 1954, decision was rendered by the Director of Lands holding that
applicant Maria Abanilla was guilty of bad faith and that she procured the free patent
over the land thru misrepresentation, and stating that steps would be taken to institute
the necessary court action for the cancellation of Patent No. V-2317 and the issuance
to Maria Abanilla of another patent for the correct area adjudged to her in said
decision, that is, excluding the portions claimed by Esquivel and Nuesa.
On August 30, 1956, the motion for reconsideration filed by appellant Maria Abanilla
was denied by the Director of Lands.
On October 19, 1956, appellant's second motion for reconsideration was similarly
denied.

Appellee Esteban Esquivel as aforesaid, claimed the portion inclosed by comers C,

D, G and H in the sketch appearing in Exhibit 5. The evidence shows that he first
entered that land in 1949 when the same was still covered with forest. He cleared and
levelled the same. Since then, his occupancy was open, continuous and without
molestation or interference from anyone, much less from appellant he introduced
improvements thereon, i.e., his house, an annex thereto for restaurant and store
purposes, a pumpwell, and a fence around the premises.
Appellant claims that this portion of the land, together with a house used as a shed for
drying leaf tobacco, was ceded by her in 1952 to Esquivel on a temporary basis as
the latter had no place to live in; that one time she sent her son to cut bamboos
behind that house but Esquivel objected and claimed that he owned the land and
forthwith told appellant's son to get out therefrom; and that she requested Esquivel to
pay P30.00 for the use of the lot, and P20.00 for the use and occupation of the house.
Apart from the fact that the foregoing version runs counter to the decision of the
Director of Lands which was confirmed by the Secretary of Agriculture and Natural
Resources, the improbability of the same is quite apparent. If appellant's claim were
true, it is strange that no attempt was ever made by her to promptly oust Esquivel
from tire land. Indeed, if at any nine appellant ever asserted that the portion occupied
by Esquivel was part of the land applied for by her that she made known this fact to
Esquivel, the latter, doubtless, would not have placed valuable improvements
thereon. That he did, is indicative of the fact that nobody ever challenged his
occupancy thereof.
On the defense of appellee Wilson Nuesa, we find that on April 20, 1950, in
consideration of P500.00, appellant Maria Abanilla executed in favor of Dominador
Cullanan a deed of sale covering the portion hereinbefore described. In that deed,
Exhibit 1, appellant warranted that she was the absolute owner of the portion sold, the
same being her share of the conjugal partnership with her late husband Donato Pilar.
She never mentioned in that document that said property was part of the public
domain which, on April 5, 1949, she previously applied for under a free patent. Of
course, in court she tried to avoid the effects of this writing. When confronted with her
thumbmark thereon, she stated in varying terms that she probably' executed that
document, or that 'I do not know whether that is my thumbmark,' or that 'I doubt if I
impressed my thumbmark.' The obvious weakness of this explanation prevents us
from accepting the same. Exhibit 1 is a notarial document. A rule so well settled as to
require citation of authorities is that which says that oral evidence to overcome a

notarial document must be clear, convincing and beyond a mere preponderance.

Here, appellant's evidence her sole testimony is notches below the legal yardstick.

solid foundation for the enjoyment of the fruits of fraud. Fraus et jus nunquam cohabitant.'

Alternatively, appellant states that the deed, Exhibit 1, is null and void because the
subject thereof is public land which is beyond the commerce of man. The sale was
executed before the order for the issuance of the patent in her favor. The same could,
therefore, be treated as a disposition of her rights as a free patent applicant which is
sanctioned by law. In pari materia: Gabon, et al. vs. Amboy, et al., CA-G.R. No.
20556-R, July 22,1959.

WHEREFORE, finding that the decision appealed from is in conformity with the facts
and the law, the same is hereby affirmed.

Appellee Wilson Nuesa acquired the rights of Dominador Cullanan to the portion sold
to the latter by appellant Under the deeds of sale, Exhibits 2 and 4. Neither '
Dominador, nor Wilson Nuesa was ever disturbed in their possession of said land.
It will be observed, however, that upon examination of the sketch in Exhibit 5, the land
acquired from appellant by and subsequently sold to Nuesa included the strip of land
in the actual possession of Esteban Esquivel As a result of the investigation of the
protests against appellant's application, Nuesa recognized the rights of Esquivel to
the portion occupied by him. So that no quarrel exists as between Esquivel on the
one hand, and Nuesa, on the other.
We do not believe that appellant has any lawful claim against appellee Wilson Nuesa.
The Portion of land here involved was sold by appellant herself as her own private
property. She cannot now turn back and say that said portion is public land. Here, the
matter is exclusively between her and Wilson Nuesa, her vendee's successor-in
interest. The government is not involved. As against appellee Wilson Nuesa,
therefore, appellant is in estoppel. Section 68(a), Rule 123, Rules of Court; Article
1431 and 1434, Civil Code; Llacer vs. Munoz de Bustillos, et al., 12 Phil. 328, 334.
Furthermore, assuming that the area sold by appellant to Cullanan was public land,
the free patent in favor of the former cannot be used as a weapon to oust appellee
Wilson Nuesa Cullanan's vendee from that land. In the same way, said free
patent did not give appellant protection against the adverse claim of Esquivel. She
knew or was charged with knowledge, of Esquivel's actual possession of the portion
claimed by him. And, the Patent in her favor is in fraud of the rights of both Nuesa and
Esquivel. Accordingly, she must respect the rights of the two to their respective
holdings.
It would not help appellant any to say that the Director of Lands was without
jurisdiction in sustaining the claims aforesaid. For, said adverse claims were filed long
before the patent was issued. As we have heretofore intimated, that patent literally
passed thru the backdoor.
The following from Acot, et al. vs. Kempis, et al., 55 Off. Gaz., No. 16, pp. 2907, 2912,
is illuminating.
We start with the premise that appellant acquired the patent and Torrens title through
fraud. Appellant clings to the legal fiction of indefeasibility of a Torrens title. But
piercing the shard of his paper title, we find that appellant has no equitable right to the
possession of the land covered thereby. He cannot use that title as a shield to
perpetuate fraud. Our reason is that no amount of legal technicality may serve as a

Said decision became final and executory on July 18, 1960.

Therefore, it is beyond question that fraud was committed by Maria Abanilla in
securing her patent and original certificate of title over a public land, known as Lot No.
5798, Pls-62, situated in Roxas, Isabela.
In this regard the controlling provisions of the Public Land Act (Com. Act No. 141, as
amended), reads:
Sec. 90. Every application filed under the provisions of this Act shall be made under
oath and shall set forth:
xxx

xxx

xxx

(g) Whether all or part of the land is occupied or cultivated improved and by giving his
post office address, and whether the land has been occupied or cultivated or
improved by the applicant or his ascendant, the date when the possession and
cultivation began, and a description of the improvements made, accompanying
satisfactory evidence of the relationship of the applicant with the ascendant, and of
the death of the latter and the descendants left by him, in case it is alleged that he
occupied and cultivated the first; or whether there are indications of its having been
occupied cultivated or improved entirely or partially, and if so, in what such indications
consist, whether he has made investigations as to when and by whom such
improvements were made, and if so, how such investigations were made and what
was the result thereof, or whether the land is not occupied, improved or cultivated
either entirely or partially, and there are no indications of it having ever been
occupied, improved, or cultivated, and in this case, what is the condition of the land
(Emphasis supplied).
Sec. 91. The statements made in the application shall be considered as essential
conditions and parts of any concession, title, or permit issued on the basis of such
application, and any false statement therein or omission of facts altering, changing, or
modifying, the consideration of the facts set forth in such statements, and any
subsequent modification, alteration, or change of the material facts set forth in the
application shall ipso facto produce the cancellation of the concession title or permit
granted ... (Emphasis supplied).
In the light of the above-quoted provisions, defendant-appellant Maria Abanilla cannot
use her title as a shield to perpetuate fraud. "No amount of legal technicality may
serve as a solid foundation for the enjoyment of the fruits of fraud. Fraus et jus
numquam co-habitant" (Acot et al. vs. Kempis, et al., supra).
Section 91 of the C.A. No. 141, as amended, expressly provides that any false
statement in the application, which is an essential condition of the patent or title,
"shall ipso facto produce the cancellation of the concession, title, or permit granted."

Defendant-appellant clings to the legal fiction of indefeasibility of a Torrens Title. She

claimed that the lower court erred in not dismissing the action considering that a
period of six years and six months had already elapsed when the present action was
instituted, in view of the line of decisions of this Court sustaining the indefeasibility of
a certificate of title issued in pursuance of a public land patent.
The doctrine in Heirs of Carle Sumail, and other cases cited by the appellant
regarding the indefeasibility of title issued pursuant to a free patent one year after its
issuance does not apply to a grant tainted with fraud and secured through
misrepresentation, such as the free patent invoked in this case, since said grant is
null and void and of no effect whatsoever. As We held in J.M. Tuason & Co., Inc. vs.
Macalindog (L-15398, Dec. 29, 1962, 6 SCRA 938):
We are in accord with appellant's contention that Act 496 is not intended to shield
fraud and that registration thereunder merely confirms titler but does not vest any,
when there is none, because registration under the Torrens System is not a mode of
acquiring ownership.
Furthermore, appellant Maria Abanilla cannot pretend that her title has become
indefeasible because no petition for review thereof was filed within one year from its
issuance, since proceedings for the review of her patent was actually pending before
and after the issuance of appellant's torrens title. According to the findings of fact of
the trial court, the patent of Maria Abanilla was under administrative investigation by
the office of the appellee Director of Lands at the time she obtained her torrens title
pursuant thereto (Exhs. G, H, and I), and that the decision of the appellee ordering
the cancellation of appellant's patent on the ground of fraud was rendered on March
20, 1954 (Exh. N), or less than a year from the issuance of her torrens title on June
16, 1953 (Exh. I). It was also less than a year from the issuance of said torrens title
that appellant, on May 5, 1954, filed a motion for the reconsideration of said decision
of the Director of Lands (Exh. O), which motion for reconsideration was denied on
August 30, 1956 (Exh. P), from which denial appellant Abanilla filed a second motion
for reconsideration (Exh. Q), and when said motion for reconsideration was likewise
denied (Exh. R), appellant Abanilla even appealed to the Secretary of Agriculture and
Natural Resources (Exh. S), who, however, affirmed the decision of the Director of
Lands ordering the cancellation of her patent.
In the previous action aforecited, between herein appellant Maria Abanilla and the
other parties claimants Esteban Esquivel, Magno Velayo, Sotero Nuesa, Wilson
Nuesa and Teofilo Nobleza of the same land in question wherein appellant Abanilla
sought to use her torrens title as basis to recover portions of said land from the
defendants (Maria Abanilla vs. Esteban Esquivel, et al., No. 22660-R, 57 O.G. No. 28,
pp. 5104-5108, June 14, 1960), the Court of Appeals, speaking through the
Honorable Conrado V. Sanchez, expressly found appellant's free patent to have been
obtained "in fraud of the rights" of the other private parties claimants thereto, so that
to hold that such patent, which "literally passed through the backdoor," cannot be
used "as a shield to perpetrate a fraud" (Exh. V, p. 39, Folder of Exhibits; p. 73, rec.).
In Republic vs. Animas (L-37682, March 29, 1974, 56 SCRA 499). petitioner Director
of Lands sought the review of the order of the Court of First Instance of South
Cotabato, dismissing the complaint instituted by the said Director of Lands, to declare
null and void a free patent and the original certificate of title based thereon, which was
fraudulently secured. WE hereby quote pertinent portions thereof:.

... The complaint alleges in its paragraph 8 that applicant Isagani Du Timbol was
never in possession of the property prior to his filing the application, contrary to the
provisions of law that the applicant must have been in possession or cultivation
thereof for at least 30 years; ...
The abovealleged circumstances are indicative of fraud in the filing of the application
and obtaining title to the land and if proven would override respondent Judge's order
dismissing the case without hearing. The misrepresentations of the applicant that he
had been occupying and cultivating the land and residing thereon are sufficient
grounds to nullify the grant of the patent and title under Section 91 of the Public Land
Law, ...
A certificate of title that is void may be ordered cancelled. A title will be considered
void if it is procured through fraud, as when a person applies for registration of the
land under his name although the property belongs to another. In the case of
disposable public lands, failure on the part of the grantee to comply with the
conditions imposed by law is a ground for holding such title void (Director of Lands vs.
Court of Appeals, et al. G. R. No. L-17696, May 19, 1966, 17 SCRA 71, 79-80;
emphasis supplied The lapse of the one year period within which a decree of title may
be reopened for fraud would not prevent the cancellation thereof for to hold that a title
may become indefeasible by registration even if such title had been secured through
fraud or in violation of the law, would be the height of absurdity Registration should
not be a shield of fraud in securing title (J.M. Tuason & Co., Inc. vs. Macalindog, L15398, December 29, 1962, 6 SCRA 938 page 38) [emphasis supplied].
This Court, in the same case, further held that prescription of action to review a title
after the lapse of one year from its issuance under Section 38 of Act 496, cannot be
invoked against the State, since under paragraph 4 of Article 1108 of the Civil Code,
prescription does not run against the State, and We quote:
Considering that it is the State that is seeking the cancellation of the title of
respondent Isagani Du Timbol said title has not become indefeasible for prescription
cannot be invoked against the State. A title founded on fraud may be cancelled,
notwithstanding the lapse of one year from the issuance thereof, through a petition
filed in court by the Solicitor General, ...
Even granting that the Director of Lands can no longer question the validity of a
torrens title after the lapse of one year from registration under Section 38 of Act 496,
still appellant Maria Abanilla is estopped from claiming that this action has already
prescribed. The established facts on the record of the administrative case in the
Lands Department involving the same subject matter in this case show that defendant
Maria Abanilla even before the grant of the subject patent in her favor had allowed
herself to submit to an administrative investigation of this case when she appeared on
one occasion in the course thereof and requested for the postponement of the same
on the ground that she desired to settle the case amicably. 'thereafter, she pursued
her alleged right to the patent by exhausting all her' administrative remedies in the
Lands Department. Appellant Maria A is now estopped from claiming that this action
had already prescribed for the simple reason that she can be considered an
instrumental party in the delay in the flung of the instant action (p. 26, rec.).
In Cebedo vs. Director of Lands (2 SCRA 25), this Honorable Court held that "it is not
only the right but the duty of the Director of Lands to conduct investigation to
determine whether steps should be taken in the proper court for the annulment of the
title or titles theretofore issued, and to file the corresponding court action for the
reversion of the properties to the State, if the facts disclosed in the course of the
investigation so warrant."

It was in pursuance of the above and similar rulings of this Court that the appellee
Director of Lands filed the present action for cancellation of Abanilla's patent and title
over the land in question.
WHEREFORE, FINDING THAT THE DECISION APPEALED FROM IS IN
CONFORMITY WITH THE FACTS AND THE LAW, THE SAME IS HEREBY
AFFIRMED. DOUBLE COSTS AGAINST DEFENDANT APPELLANT.
37) DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF
APPEALS and CARLOS CAJES, respondents.

It appears that private respondent had also applied for a loan from petitioner in 1978,
offering his 19.4 hectare property under Tax Declaration No. D-2247 as security for
the loan. As part of the processing of the application, a representative of petitioner,
Patton R. Olano, inspected the land and appraised its value.
Private respondents loan application was later approved by petitioner.[19] However
after releasing the amount of the loan to private respondent, petitioner found that the
land mortgaged by private respondent was included in the land covered by TCT No.
10101 in the name of the spouses Beduya. Petitioner, therefore, cancelled the loan
and demanded immediate payment of the amount.[20] Private respondent paid the
loan to petitioner for which the former was issued a Cancellation of Mortgage, dated
March 18, 1981, releasing the property in question from encumbrance.[21]

DECISION
MENDOZA, J.: Misact
This is a petition for certiorari seeking to reverse the decision[1] and resolution[2] of
the Court of Appeals dated August 30, 1996 and April 23, 1997, respectively,
declaring private respondent Carlos Cajes the owner of 19.4 hectares of land
embraced in TCT No. 10101 and ordering the segregation and reconveyance of said
portion to him.
The antecedent facts are as follows:
The land in dispute, consisting of 19.4 hectares located in San Miguel, Province of
Bohol, was originally owned by Ulpiano Mumar, whose ownership since 1917 was
evidenced by Tax Declaration No. 3840.[3] In 1950,[4] Mumar sold the land to private
respondent who was issued Tax Declaration No. R-1475 that same year.[5] The tax
declaration was later superseded by Tax Declaration Nos. R-799 issued in 1961[6]
and D-2247 issued in 1974.[7] Private respondent occupied and cultivated the said
land,[8] planting cassava and camote in certain portions of the land.[9]
In 1969, unknown to private respondent, Jose Alvarez succeeded in obtaining the
registration of a parcel of land with an area of 1,512,468.00 square meters,[10] in his
name for which he was issued OCT No. 546 on June 16, 1969.[11] The parcel of land
included the 19.4 hectares occupied by private respondent. Alvarez never occupied
nor introduced improvements on said land.[12]
In 1972, Alvarez sold the land to the spouses Gaudencio and Rosario Beduya to
whom TCT No. 10101 was issued.[13] That same year, the spouses Beduya obtained
a loan from petitioner Development Bank of the Philippines for P526,000.00 and, as
security, mortgaged the land covered by TCT No. 10101 to the bank.[14] In 1978, the
SAAD Investment Corp., and the SAAD Agro-Industries, Inc., represented by
Gaudencio Beduya, and the spouses Beduya personally executed another mortgage
over the land in favor of petitioner to secure a loan of P1,430,000.00.[15] Sdjad
The spouses Beduya later failed to pay their loans, as a result of which, the mortgage
on the property was foreclosed.[16] In the resulting foreclosure sale held on January
31, 1985, petitioner was the highest bidder.[17] As the spouses Beduya failed to
redeem the property, petitioner consolidated its ownership.[18]

Sometime in April of 1986, more than a year after the foreclosure sale, a re-appraisal
of the property covered by TCT No. 10101 was conducted by petitioners
representatives. It was then discovered that private respondent was occupying a
portion of said land. Private respondent was informed that petitioner had become the
owner of the land he was occupying, and he was asked to vacate the property. As
private respondent refused to do so,[22] petitioner filed a complaint for recovery of
possession with damages against him. The case was assigned to Branch 1 of the
Regional Trial Court, Tagbilaran City,[23] which after trial, rendered a decision, dated
August 22, 1989, declaring petitioner the lawful owner of the entire land covered by
TCT No. 10101 on the ground that the decree of registration was binding upon the
land.[24] The dispositive portion of the decision reads:
WHEREFORE, foregoing considered, the court renders judgment:
1.......Declaring plaintiff bank Development Bank of the Philippines the true and legal
owner of the land in question covered by TCT No. 10101 farm of Gaudencio Beduya;
2.......Dismissing defendants counterclaim; Sppedsc
3.......Ordering defendant to vacate from the land in question; the portion of which he
claims to belong to him for without basis in fact and law;
4.......Ordering defendant, his agents or any person representing him or those who
may claim substantial rights on the land to vacate therefrom, cease and desist from
disturbing, molesting and interfering plaintiffs possession of the land in question, and
from committing any such act as would tend to mitigate, deny or deprive plaintiff of its
ownership and possession over said land.
SO ORDERED.
On appeal, the Court of Appeals reversed and gave judgment for private respondent,
declaring him the owner of the 19.4 hectares of land erroneously included in TCT No.
10101. The dispositive portion of the appellate courts decision reads:
WHEREFORE, the appealed decision is hereby REVERSED AND SET ASIDE. A new
decision is hereby rendered:
1. Dismissing the complaint.

2. Declaring the disputed 19.4000 hectares of land embraced in TCT 10101 as

exclusively belonging to defendant-appellant, ordering its segregation from plaintiffappellees title and its reconveyance to appellant.
No pronouncement as to costs.
SO ORDERED.[25]
Petitioner moved for a reconsideration but its motion was denied in a resolution dated
April 23, 1997.[26] Hence this petition.
Petitioner contends that:
I.......THE DECISION OF THE RESPONDENT COURT IS NOT IN ACCORD WITH
THE APPLICABLE PROVISIONS OF LAW (Sections 38 and 46 of ACT 496) AND
THE APPLICABLE DECISIONS OF THE SUPREME COURT, PARTICULARLY IN
THE CASE OF BENIN VS. TUASON, 57 SCRA 531.
II.......THE RESPONDENT COURT OVERLOOKED THE ISSUES ABOUT THE DBP
BEING AN INNOCENT MORTGAGEE FOR VALUE OF THE LAND IN QUESTION
AND OF HAVING PURCHASED LATER THE SAME DURING A PUBLIC AUCTION
SALE. Calrsc
III.THE RESPONDENT COURTS RULING DECLARING DBP IN ESTOPPEL IS
ILLOGICAL.[27]
First. Petitioner invokes the ruling of this Court in Benin v. Tuason[28] in support of its
claim that its predecessor-in-interest, Jose Alvarez, became the owner of the land by
virtue of the decree of registration issued in his name. In Benin, three sets of plaintiffs
filed separate complaints against Mariano Severo Tuason and J.M. Tuason & Co.,
Inc., praying for the cancellation of OCT No. 735 covering two parcels of land called
the Sta. Mesa Estate, or Parcel 1, with an area of 8,798,617.00 square meters, and
the Diliman Estate, or Parcel 2, with an area of 15,961,246.00 square meters. They
asked that they be declared the owners and lawful possessors of said lands.
Benin is distinguished from this case. In the first place, Benin involved vast tracts of
lands which had already been subdivided and bought by innocent purchasers for
value and in good faith at the time the claimants obtained registration. Secondly,
when the claimants ancestors occupied the lands in question and declared them for
tax purposes in 1944, the lands were already covered by the tax declarations in the
name of J. M. Tuason & Co., Inc. In 1914, OCT No. 735 was issued in the name of
Tuason so that, from that time on, no possession could defeat the title of the
registered owners of the land. Thirdly, the validity of OCT No. 735 had already been
recognized by this Court in several cases[29] and, as a result thereof, the transfer
certificates of title acquired by the innocent purchasers for value were also declared
valid. It was held that neither could the claimants file an action to annul these titles for
not only had these actions prescribed, but the fact was that the claimants were also
barred from doing so by laches, having filed the complaint only in 1955, or 41 years
after the issuance of OCT No. 735 to J.M. Tuason & Co., Inc. Thus, it was not solely
the decree of registration which was considered in resolving the Benin case. What
was considered decisive was the valid title or right of ownership of J. M. Tuason &
Co., Inc. and that of the other innocent purchasers for value and in good faith

compared to the failure of the claimants to show their right to own or possess the
questioned properties. Sccalr
Petitioner maintains that the possession by private respondent and his predecessorin-interest of the 19.4 hectares of land for more than 30 years cannot overcome the
decree of registration issued in favor of its predecessor-in-interest Jose Alvarez.
Petitioner quotes the following statement in the Benin case:
It follows also that the allegation of prescriptive title in favor of plaintiffs does not
suffice to establish a cause of action. If such prescription was completed before the
registration of the land in favor of the Tuasons, the resulting prescriptive title was cut
off and extinguished by the decree of registration. If, on the contrary, the prescription
was either begun or completed after the decree of registration, it conferred no title
because, by express provision of law, prescription can not operate against the
registered owner (Act 496).[30]
Petitioner would thus insist that, by virtue of the decree of registration, Jose Alvarez
and those claiming title from him (i.e., the spouses Beduya) acquired ownership of the
19.4 hectares of land, despite the fact that they neither possessed nor occupied these
lands.
This view is mistaken. A consideration of the cases shows that a decree of
registration cut off or extinguished a right acquired by a person when such right refers
to a lien or encumbrance on the land not to the right of ownership thereof which was
not annotated on the certificate of title issued thereon. Thus, Act No. 496 provides:
Sec. 39. Every person receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land who takes a
certificate of title for value in good faith shall hold the same free of all encumbrances
except those noted on said certificate, and any of the following encumbrances which
may be subsisting, namely: Calrspped
First. Liens, claims, or rights arising or existing under the laws of Constitution of the
United States or of the Philippine Islands which the statutes of the Philippine Islands
cannot require to appear of record in the Registry.
Second. Taxes within two years after the same became due and payable.
Third. Any public highway, way, private way established by law, or any Government
irrigation canal or lateral thereof, where the certificate of title does not state that the
boundaries of such highway, way, or irrigation canal or lateral thereof, have been
determined.
But if there are easements or other rights appurtenant to a parcel of registered land
which for any reason have failed to be registered, such easements or rights shall
remain so appurtenant notwithstanding such failure, and shall be held to pass with the
land until cut off or extinguished by the registration of the servient estate, or in any
other manner.
Hence, in Cid v. Javier,[31] it was helds:

. . . Consequently, even conceding arguendo that such an easement has been

acquired, it had been cut off and extinguished by the registration of the servient estate
under the Torrens system without the easement being annotated on the
corresponding certificate of title, pursuant to Section 39 of the Land Registration Act.
This principle was reiterated in Purugganan v. Paredes[32] which also involved an
easement of light and view that was not annotated on the certificate of title of the
servient estate. Scedp
But to make this principle applicable to a situation wherein title acquired by a person
through acquisitive prescription would be considered cut off and extinguished by a
decree of registration would run counter to established jurisprudence before and after
the ruling in Benin. Indeed, registration has never been a mode of acquiring
ownership over immovable property. As early as 1911, in the case of City of Manila v.
Lack,[33] the Court already ruled on the purpose of registration of lands, viz.:
The Court of Land Registration was created for a single purpose. The Act is entitled
"An Act to provide for the adjudication and registration of titles to lands in the
Philippine Islands." The sole purpose of the Legislature in its creation was to bring the
land titles of the Philippine Islands under one comprehensive and harmonious
system, the cardinal features of which are indefeasibility of title and the intervention of
the State as a prerequisite to the creation and transfer of titles and interest, with the
resultant increase in the use of land as a business asset by reason of the greater
certainty and security of title. It does not create a title nor vest one. It simply confirms
a title already created and already vested, rendering it forever indefeasible. . .
Again, in the case of Angeles v. Samia[34] where land was erroneously registered in
favor of persons who neither possessed nor occupied the same, to the prejudice of
the actual occupant, the Court held:
. . . The purpose of the Land Registration Act, as this court has had occasion to so
state more than once, is not to create or vest title, but to confirm and register title
already created and already vested, and of course, said original certificate of title No.
8995 could not have vested in the defendant more title than what was rightfully due
her and her coowners. It appearing that said certificate granted her much more than
she expected, naturally to the prejudice of another, it is but just that the error, which
gave rise to said anomaly, be corrected (City of Manila vs. Lack, 19 Phil., 324). The
defendant and her coowners knew or, at least, came to know that it was through error
that the original certificate of title in question was issued by the court which heard
cadastral case No. 11 of Bacolor, not only in or prior to March, 1933, but from the time
said certificate was issued in their favor, that is, from December 15, 1921. This is
evidenced by the fact that, ever since, they remained passive without even attempting
to make the least showing of ownership over the land in question until after the lapse
of more than eleven years. The Land Registration Act as well as the Cadastral Act
protects only the holders of a title in good faith and does not permit its provisions to
be used as a shield for the commission of fraud, or that one should enrich himself at
the expense of another (Gustilo vs. Maravilla, 48 Phil., 442; Angelo vs. Director of
Lands, 49 Phil., 838). The above-stated Acts do not give anybody, who resorts to the
provisions thereof, a better title than he really and lawfully has. If he happened to
obtain it by mistake or to secure, to the prejudice of his neighbor, more land than he
really owns, with or without bad faith on his part, the certificate of title, which may
have been issued to him under the circumstances, may and should be cancelled or

corrected (Legarda and Prieto vs. Saleeby, 31 Phil., 590). This is permitted by section
112 of Act No. 496, which is applicable to the Cadastral Act because it is so provided
expressly by the provisions of section 11 of the latter Act. It cannot be otherwise
because, as stated in the case of Domingo vs. Santos, Ongsiako, Lim y Cia. (55 Phil.,
361), errors in the plans of lands sought to be registered in the registry and
reproduced in the certificate of title issued later, do not annul the decree of
registration on the ground that it is not the plan but the land itself which is registered
in the registry. In other words, if the plan of an applicant for registration or claimant in
a cadastral case alleges that the land referred to in said plan is 100 or 1,000
hectares, and the land which he really owns and desires to register in the registry is
only 80 ares, he cannot claim to be the owner of the existing difference if afterwards
he is issued a certificate of title granting him said area of 100 or 1,000 hectares.[35]
Edpsc
The principle laid down in this 1938 case remains the prevailing doctrine, its latest
application being in the case of Reyes v. Court of Appeals[36] wherein we ruled that
the fact that a party was able to secure a title in his favor did not operate to vest
ownership upon her of the property.
In the present case, private respondent has been in actual, open, peaceful and
continuous possession of the property since 1950. This fact was corroborated by the
testimony of Eleuterio Cambangay who personally knew that Ulpiano Mumar
transferred the land covered by Tax Declaration No. 3840[37] in favor of private
respondent in 1950.[38] Private respondents claim based on actual occupation of the
land is bolstered by Tax Declaration Nos. R-1475, R-799 and D-2247[39] which were
issued in his name in 1950, 1961 and 1974, respectively. Together with his actual
possession of the land, these tax declarations constitute strong evidence of
ownership of the land occupied by him. As we said in the case of Republic vs. Court
of Appeals:[40]
Although tax declarations or realty tax payments of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner for no one in his right mind would be paying taxes for a property
that is not in his actual or at least constructive possession. They constitute at least
proof that the holder has a claim of title over the property. The voluntary declaration of
a piece of property for taxation purposes manifests not only ones sincere and honest
desire to obtain title to the property and announces his adverse claim against the
State and all other interested parties, but also the intention to contribute needed
revenues to the Government. Such an act strengthens ones bona fide claim of
acquisition of ownership.
More importantly, it was established that private respondent, having been in
possession of the land since 1950, was the owner of the property when it was
registered by Jose Alvarez in 1969, his possession tacked to that of his predecessorin-interest, Ulpiano Mumar, which dates back to 1917.[41] Clearly, more than 30 years
had elapsed before a decree of registration was issued in favor of Jose Alvarez. This
uninterrupted adverse possession of the land for more than 30 years could only ripen
into ownership of the land through acquisitive prescription which is a mode of
acquiring ownership and other real rights over immovable property. Prescription
requires public, peaceful, uninterrupted and adverse possession of the property in the
concept of an owner for ten (10) years, in case the possession is in good faith and
with a just title. Such prescription is called ordinary prescription, as distinguished from

extraordinary prescription which requires possession for 30 years in case possession

is without just title or is not in good faith.[42] Edp

Having been the sole occupant of the land in question, private respondent may seek
reconveyance of his property despite the lapse of more than 10 years.

In contrast to private respondent, it has been shown that neither Jose Alvarez nor the
spouses Beduya were at any time in possession of the property in question. In fact,
despite knowledge by Gaudencio Beduya that private respondent occupied this 19.4
hectares included in the area covered by TCT No. 10101,[43] he never instituted any
action to eject or recover possession from the latter. Hence, it can be concluded that
neither Jose Alvarez nor the spouses Beduya ever exercised any right of ownership
over the land. The fact of registration in their favor never vested in them the
ownership of the land in dispute. "If a person obtains a title under the Torrens system,
which includes by mistake or oversight land which can no longer be registered under
the system, he does not, by virtue of the said certificate alone, become the owner of
the lands illegally included."[44]

Nor is there any obstacle to the determination of the validity of TCT No. 10101. It is
true that the indefeasibility of torrens titles cannot be collaterally attacked. In the
instant case, the original complaint is for recovery of possession filed by petitioner
against private respondent, not an original action filed by the latter to question the
validity of TCT No. 10101 on which petitioner bases its right. To rule on the issue of
validity in a case for recovery of possession is tantamount to a collateral attack.
However, it should not be overlooked that private respondent filed a counterclaim
against petitioner, claiming ownership over the land and seeking damages. Hence,
we could rule on the question of the validity of TCT No. 10101 for the counterclaim
can be considered a direct attack on the same. "A counterclaim is considered a
complaint, only this time, it is the original defendant who becomes the plaintiff. . . . It
stands on the same footing and is to be tested by the same rules as if it were an
independent action."[48] In an analogous case,[49] we ruled on the validity of a
certificate of title despite the fact that the original action instituted before the lower
court was a case for recovery of possession. The Court reasoned that since all the
facts of the case are before it, to direct the party to institute cancellation proceedings
would be needlessly circuitous and would unnecessarily delay the termination of the
controversy which has already dragged on for 20 years.

Considering the circumstances pertaining in this case, therefore, we hold that

ownership of the 19.4 hectares of land presently occupied by private respondent was
already vested in him and that its inclusion in OCT No. 546 and, subsequently, in TCT
No. 10101, was erroneous. Accordingly, the land in question must be reconveyed in
favor of private respondent, the true and actual owner thereof, reconveyance being
clearly the proper remedy in this case.
"The true owner may bring an action to have the ownership or title to the land
judicially settled and the Court in the exercise of its equity jurisdiction, without
ordering the cancellation of the Torrens title issued upon the patent, may direct the
defendants, the registered owner to reconvey the parcel of land to the plaintiff who
has been found to be the true owner thereof." (Vital vs. Amore, 90 Phil. 955) "The
reconveyance is just and proper in order to terminate the intolerable anomaly that the
patentees should have a torrens title for the land which they and their predecessors
never possessed which has been possessed by Novo in the concept of owner."
(Bustarga v. Novo, 129 SCRA 125)[45]
Second. Generally, an action for reconveyance based on an implied or constructive
trust, such as the instant case, prescribes in 10 years from the date of issuance of
decree of registration.[46] However, this rule does not apply when the plaintiff is in
actual possession of the land. Thus, it has been held: Misedp
. . . [A]n action for reconveyance of a parcel of land based on implied or constructive
trust prescribes in ten years, the point of reference being the date of registration of
the deed or the date of the issuance of the certificate of title over the property, but this
rule applies only when the plaintiff or the person enforcing the trust is not in
possession of the property, since if a person claiming to be the owner thereof is in
actual possession of the property, as the defendants are in the instant case, the right
to seek reconveyance, which in effect seeks to quiet title to the property, does not
prescribe. The reason for this is that one who is in actual possession of a piece of
land claiming to be the owner thereof may wait until his possession is disturbed or his
title is attacked before taking steps to vindicate his right, the reason for the rule being,
that his undisturbed possession gives him a continuing right to seek the aid of a court
of equity to ascertain and determine the nature of the adverse claim of a third party
and its effect on his own title, which right can be claimed only by one who is in
possession.[47]

Third. Petitioner nonetheless contends that an action for reconveyance does not lie
against it, because it is an innocent purchaser for value in the foreclosure sale held in
1985.
This contention has no merit. Sec. 38 of Act No. 496, the Land Registration Act,
provides: Misoedp
If the court after hearing finds that the applicant or adverse claimant has title as stated
in his application or adverse claim and proper for registration, a decree of
confirmation and registration shall be entered. Every decree of registration shall bind
the land, and quiet title thereto, subject only to the exceptions stated in the following
section. It shall be conclusive upon and against all persons, including the Insular
Government and all the branches thereof, whether mentioned by name in the
application, notice, or citation, or included in the general description "To all whom it
may concern." Such decree shall not be opened by reason of the absence, infancy, or
other disability of any person affected thereby, nor by any proceeding in any court for
reversing judgments or decrees; subject, however, to the right of any person deprived
of land or of any estate or interest therein by decree of registration obtained by fraud
to file in the competent Court of First Instance a petition for review within one year
after entry of the decree, provided no innocent purchaser for value has acquired an
interest. Upon the expiration of said term of one year, every decree or certificate of
title issued in accordance with this section shall be incontrovertible. If there is any
such purchaser, the decree of registration shall not be opened, but shall remain in full
force and effect forever, subject only to the right of appeal hereinbefore provided:
Provided, however, That no decree or certificate of title issued to persons not parties
to the appeal shall be cancelled or annulled. But any person aggrieved by such
decree in any case may pursue his remedy by action for damages against the
applicant or any other person for fraud in procuring the decree. Whenever the phrase
"innocent purchaser for value" or an equivalent phrase occurs in this Act, it shall be

deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.

(As amended by Sec. 3, Act 3621; and Sec. 1, Act No. 3630.) Edpmis
Succinctly put, 38 provides that a certificate of title is conclusive and binding upon the
whole world. Consequently, a buyer need not look behind the certificate of title in
order to determine who is the actual owner of the land. However, this is subject to the
right of a person deprived of land through fraud to bring an action for reconveyance,
provided that it does not prejudice the rights of an innocent purchaser for value and in
good faith. "It is a condition sine qua non for an action for reconveyance to prosper
that the property should not have passed to the hands of an innocent purchaser for
value."[50] The same rule applies to mortgagees, like petitioner. Thus, we held:
Where the certificate of title is in the name of the mortgagor when the land is
mortgaged, the innocent mortgagee for value has the right to rely on what appears on
the certificate of title. In the absence of anything to excite suspicion, said mortgagee
is under no obligation to look beyond the certificate and investigate the title of the
mortgagor appearing on the face of said certificate. Although Article 2085 of the Civil
Code provides that absolute ownership of the mortgaged property by the mortgagor is
essential, the subsequent declaration of a title as null and void is not a ground for
nullifying the mortgage right of a mortgagee in good faith.[51]
The evidence before us, however, indicates that petitioner is not a mortgagee in good
faith. To be sure, an innocent mortgagee is not expected to conduct an exhaustive
investigation on the history of the mortgagors title. Nonetheless, especially in the case
of a banking institution, a mortgagee must exercise due diligence before entering into
said contract. Judicial notice is taken of the standard practice for banks, before
approving a loan, to send representatives to the premises of the land offered as
collateral and to investigate who are the real owners thereof. Banks, their business
being impressed with public interest, are expected to exercise more care and
prudence than private individuals in their dealings, even those involving registered
lands.[52] Jjsc
In this case, petitioners representative, Patton R. Olano, admitted that he came to
know of the property for the first time in 1979 when he inspected it to determine
whether the portion occupied by private respondent and mortgaged by the latter to
petitioner was included in TCT No. 10101. This means that when the land was
mortgaged by the spouses Beduya in 1972, no investigation had been made by
petitioner. It is clear, therefore, that petitioner failed to exercise due care and diligence
in establishing the condition of the land as regards its actual owners and possessors
before it entered into the mortgage contract in 1972 with the Beduyas. Had it done so,
it would not have failed to discover that private respondent was occupying the
disputed portion of 19.4 hectares. For this reason, petitioner cannot be considered an
innocent purchaser for value when it bought the land covered by TCT No. 10101 in
1985 at the foreclosure sale.
Indeed, two circumstances negate petitioners claim that it was an innocent purchaser
for value when it bought the land in question, including the portion occupied by private
respondent: (1) petitioner was already informed by Gaudencio Beduya that private
respondent occupied a portion of the property covered by TCT No. 10101; and (2)
petitioners representative conducted an investigation of the property in 1979 to
ascertain whether the land mortgaged by private respondent was included in TCT No.
10101. In other words, petitioner was already aware that a person other than the

registered owner was in actual possession of the land when it bought the same at the
foreclosure sale. A person who deliberately ignores a significant fact which would
create suspicion in an otherwise reasonable man is not an innocent purchaser for
value. "It is a well-settled rule that a purchaser cannot close his eyes to facts which
should put a reasonable man upon his guard, and then claim that he acted in good
faith under the belief that there was no defect in the title of the vendor."[53]
Petitioner deliberately disregarded both the fact that private respondent already
occupied the property and that he was claiming ownership over the same. It cannot
feign ignorance of private respondents claim to the land since the latter mortgaged
the same land to petitioner as security for the loan he contracted in 1978 on the
strength of the tax declarations issued under his name. Instead of inquiring into
private respondents occupation over the land, petitioner simply proceeded with the
foreclosure sale, pretending that no doubts surround the ownership of the land
covered by TCT No. 10101. Considering these circumstances, petitioner cannot be
deemed an innocent mortgagee/purchaser for value. As we ruled: Scjj
"The failure of appellees to take the ordinary precautions which a prudent man would
have taken under the circumstances, specially in buying a piece of land in the actual,
visible and public possession of another person, other than the vendor, constitutes
gross negligence amounting to bad faith.
In this connection, it has been held that where, as in this case, the land sold is in the
possession of a person other than the vendor, the purchaser is required to go beyond
the certificates of title and ma[k]e inquiries concerning the rights of the actual
possessor. (Citations omitted.)
....
One who purchases real property which is in the actual possession of another should,
at least, make some inquiry concerning the right of those in possession. The actual
possession by other than the vendor should, at least put the purchaser upon inquiry.
He can scarcely, in the absence of such inquiry, be regarded as a bona fide purchaser
as against such possessors."[54]
Fourth. From the foregoing, we find that the resolution of the issue of estoppel will not
affect the outcome of this case. Petitioner claims that the fact that it approved a loan
in favor of private respondent and executed a mortgage contract covering the 19.4
hectares covered by tax declarations issued under private respondents name does
not mean that it is estopped from questioning the latters title. Petitioner accuses
private respondent of having made misrepresentations which led it to believe in his
valid title and ownership.
The claim has no basis. Private respondent made no misrepresentation with regard to
the land occupied by him as he is actually the real owner thereof. Moreover, when
private respondent entered into a mortgage contract with petitioner, his claim of
ownership was supported not only by the tax declarations but also by a certification of
the Clerk of Court of the Court of First Instance of Bohol that no civil, land registration
or cadastral case has been filed or instituted before the court affecting the validity of
Tax Declaration No. D-2247 covering the land located in Bugang, San Miguel, Bohol
and declared in the name of Carlos Cajes.[55] These documents were relied upon by
private respondent in support of his claim of ownership. We cannot consider the

submission of these documents as misrepresentations by private respondent as to

the actual ownership of the land. Rather, private respondent believed in good faith
and with good reason that he was the owner of the 19.4 hectares occupied by him.
As to the question of estoppel, we do not find petitioner to be estopped from
questioning private respondents title. "Estoppel in pais arises when one, by his acts,
representations or admission, or by his own silence when he ought to speak out,
intentionally or through culpable negligence, induces another to believe certain facts
to exist and such other rightfully relies and acts on such belief, so that he will be
prejudiced if the former is permitted to deny the existence of such facts."[56] In the
case at bar, upon learning that the land occupied by private respondent was also
covered by TCT No. 10101, petitioner immediately demanded full payment of the loan
and thereafter cancelled the mortgage contract, a fact that is admitted by private
respondent himself.[57] Indeed, nothing in record indicates that petitioner impliedly
acquiesced to the validity of private respondents title when it found out that the latter
was occupying a portion of the land covered by TCT No. 10101.
However, for reasons aforestated, we uphold private respondents ownership of 19.4
hectares occupied by him. As a necessary consequence thereof, such portion of land
included in TCT No. 10101 must be segregated and reconveyed in his favor.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED in toto.
38) same with no 17.

Agrarian cases

MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL.,

Respondents.
Maximo Calalang in his own behalf.
Solicitor General Ozaeta and Assistant Solicitor General
Amparo for respondents Williams, Fragante and Bayan
City Fiscal Mabanag for the other respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF
COMMONWEALTH ACT No. 648; DELEGATION OF LEGISLATIVE
POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND
SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS TO
PROMULGATE RULES AND REGULATIONS. The provisions of
section 1 of Commonwealth Act No. 648 do not confer legislative
power upon the Director of Public Works and the Secretary of Public
Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations
now complained of is not to determine what public policy demands
but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon,
and avoid obstructions on, roads and streets designated as national
roads by acts of the National Assembly or by executive orders of
the President of the Philippines" and to close them temporarily to
any or all classes of traffic "whenever the condition of the road or
the traffic thereon makes such action necessary or advisable in the
public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but
merely the ascertainment of the facts and circumstances upon
which the application of said law is to be predicated. To promulgate
rules and regulations on the use of national roads and to determine
when and how long a national road should be closed to traffic, in
view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an
administrative function which cannot be directly discharged by the
National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining
whether the proper occasion exists for executing the law. But it
cannot be said that the exercise of such discretion is the making of
the law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL

AUTHORITY. Commonwealth Act No. 548 was passed by the

National Assembly in the exercise of the paramount police power of
the state. Said Act, by virtue of which the rules and regulations
complained of were promulgated, aims to promote safe transit
upon and avoid obstructions on national roads, in the interest and
convenience of the public. In enacting said law, therefore, the
National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve
congestion of traffic, which is, to say the least, a menace to public
safety. Public welfare, then, lies at the bottom of the enactment of
said law, and the state in order to promote the general welfare may
interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of
restraints and burdens, in order to secure the general comfort,
health, and prosperity of the state (U.S. v. Gomer Jesus, 31 Phil.,
218). To this fundamental aim of our Government the rights of the
individual are subordinated. Liberty is a blessing without which life
is a misery, but liberty should not be made to prevail over authority
because then society will fall into anarchy. Neither should authority
be made to prevail over liberty because then the individual will fall
into slavery. The citizen should achieve the required balance of
liberty and authority in his mind through education and, personal
discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all.
The moment greater authority is conferred upon the government,
logically so much is withdrawn from the residuum of liberty which
resides in the people. The paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its
preservation.
3. ID.; ID.; SOCIAL JUSTICE. Social justice is "neither communism,
nor despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic forces by the
State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of
all the competent elements of society, through the maintenance of
a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption
of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on
the time-honored principle of salus populi est suprema lex. Social
justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly

extended to all groups as a combined force in our social and

economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and quiet of
all persons, and of bringing about "the greatest good to the
greatest number."
DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a
taxpayer of Manila, brought before this court this petition for a writ
of prohibition against the respondents, A. D. Williams, as Chairman
of the National Traffic Commission; Vicente Fragante, as Director of
Public Works; Sergio Bayan, as Acting Secretary of Public Works and
Communications; Eulogio Rodriguez, as Mayor of the City of Manila;
and Juan Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in
its resolution of July 17, 1940, resolved to recommend to the
Director of Public Works and to the Secretary of Public Works and
Communications that animal-drawn vehicles be prohibited from
passing along Rosario Street extending from Plaza Calderon de la
Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from
1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the
railroad crossing at Antipolo Street to Echague Street, from 7 a.m.
to 11 p.m., from a period of one year from the date of the opening
of the Colgante Bridge to traffic; that the Chairman of the National
Traffic Commission, on July 18, 1940 recommended to the Director
of Public Works the adoption of the measure proposed in the
resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of Public
Works, with the approval of the Secretary of Public Works and
Communications, to promulgate rules and regulations to regulate
and control the use of and traffic on national roads; that on August
2, 1940, the Director of Public Works, in his first indorsement to the
Secretary of Public Works and Communications, recommended to
the latter the approval of the recommendation made by the
Chairman of the National Traffic Commission as aforesaid, with the
modification that the closing of Rizal Avenue to traffic to animaldrawn vehicles be limited to the portion thereof extending from the
railroad crossing at Antipolo Street to Azcarraga Street; that on
August 10, 1940, the Secretary of Public Works and
Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the

latter that Rosario Street and Rizal Avenue be closed to traffic of

animal-drawn vehicles, between the points and during the hours as
above indicated, for a period of one year from the date of the
opening of the Colgante Bridge to traffic; that the Mayor of Manila
and the Acting Chief of Police of Manila have enforced and caused
to be enforced the rules and regulations thus adopted; that as a
consequence of such enforcement, all animal-drawn vehicles are
not allowed to pass and pick up passengers in the places abovementioned to the detriment not only of their owners but of the
riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548
by which the Director of Public Works, with the approval of the
Secretary of Public Works and Communications, is authorized to
promulgate rules and regulations for the regulation and control of
the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of
legislative power. This contention is untenable. As was observed by
this court in Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700),
"The rule has nowhere been better stated than in the early Ohio
case decided by Judge Ranney, and since followed in a multitude of
cases, namely: The true distinction therefore is between the
delegation of power to make the law, which necessarily involves a
discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in
pursuance of the law. The first cannot be done; to the latter no
valid objection can be made. (Cincinnati, W. & Z. R. Co. v.
Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by
Chief Justice Marshall in Wayman v. Southard (10 Wheat., 1) may be
committed by the Legislature to an executive department or
official. The Legislature may make decisions of executive
departments or subordinate officials thereof, to whom it has
committed the execution of certain acts, final on questions of fact.
(U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the
decisions is to give prominence to the necessity of the case."
virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:
"SECTION 1. To promote safe transit upon, and avoid obstructions
on, roads and streets designated as national roads by acts of the
National Assembly or by executive orders of the President of the
Philippines, the Director of Public Works, with the approval of the
Secretary of Public Works and Communications, shall promulgate
the necessary rules and regulations to regulate and control the use
of and traffic on such roads and streets. Such rules and regulations,

with the approval of the President, may contain provisions

controlling or regulating the construction of buildings or other
structures within a reasonable distance from along the national
roads. Such roads may be temporarily closed to any or all classes of
traffic by the Director of Public Works and his duly authorized
representatives whenever the condition of the road or the traffic
thereon makes such action necessary or advisable in the public
convenience and interest, or for a specified period, with the
approval of the Secretary of Public Works and
Communications."cralaw virtua1aw library
The above provisions of law do not confer legislative power upon
the Director of Public Works and the Secretary of Public Works and
Communications. The authority therein conferred upon them and
under which they promulgated the rules and regulations now
complained of is not to determine what public policy demands but
merely to carry out the legislative policy laid down by the National
Assembly in said Act, to wit, "to promote safe transit upon and
avoid obstructions on, roads and streets designated as national
roads by acts of the National Assembly or by executive orders of
the President of the Philippines" and to close them temporarily to
any or all classes of traffic "whenever the condition of the road or
the traffic makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore,
is not the determination of what the law shall be, but merely the
ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and
how long a national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the requirements of
public convenience and interest, is an administrative function which
cannot be directly discharged by the National Assembly. It must
depend on the discretion of some other government official to
whom is confided the duty of determining whether the proper
occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in
Lockes Appeal (72 Pa. 491): "To assert that a law is less than a law,
because it is made to depend on a future event or act, is to rob the
Legislature of the power to act wisely for the public welfare
whenever a law is passed relating to a state of affairs not yet
developed, or to things future and impossible to fully know." The
proper distinction the court said was this: "The Legislature cannot
delegate its power to make the law; but it can make a law to
delegate a power to determine some fact or state of things upon
which the law makes, or intends to make, its own action depend. To
deny this would be to stop the wheels of government. There are

many things upon which wise and useful legislation must depend
which cannot be known to the law-making power, and, must,
therefore, be a subject of inquiry and determination outside of the
halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed.
294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076
and 46077, promulgated June 12, 1939, and in Pangasinan
Transportation v. The Public Service Commission, G.R. No. 47065,
promulgated June 26, 1940, this Court had occasion to observe that
the principle of separation of powers has been made to adapt itself
to the complexities of modern governments, giving rise to the
adoption, within certain limits, of the principle of "subordinate
legislation," not only in the United States and England but in
practically all modern governments. Accordingly, with the growing
complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of
administering the laws, the rigidity of the theory of separation of
governmental powers has, to a large extent, been relaxed by
permitting the delegation of greater powers by the legislative and
vesting a larger amount of discretion in administrative and
executive officials, not only in the execution of the laws, but also in
the promulgation of certain rules and regulations calculated to
promote public interest.
The petitioner further contends that the rules and regulations
promulgated by the respondents pursuant to the provisions of
Commonwealth Act No. 548 constitute an unlawful interference
with legitimate business or trade and abridge the right to personal
liberty and freedom of locomotion. Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount
police power of the state.
Said Act, by virtue of which the rules and regulations complained of
were promulgated, aims to promote safe transit upon and avoid
obstructions on national roads, in the interest and convenience of
the public. In enacting said law, therefore, the National Assembly
was prompted by considerations of public convenience and welfare.
It was inspired by a desire to relieve congestion of traffic. which is,
to say the least, a menace to public safety. Public welfare, then, lies
at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty,
with property, and with business and occupations. Persons and
property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the
state (U.S. v. Gomez Jesus, 31 Phil., 218). To this fundamental aim

of our Government the rights of the individual are subordinated.

Liberty is a blessing without which life is a misery, but liberty
should not be made to prevail over authority because then society
will fall into anarchy. Neither should authority be made to prevail
over liberty because then the individual will fall into slavery. The
citizen should achieve the required balance of liberty and authority
in his mind through education and personal discipline, so that there
may be established the resultant equilibrium, which means peace
and order and happiness for all. The moment greater authority is
conferred upon the government, logically so much is withdrawn
from the residuum of liberty which resides in the people. The
paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preservation.
The scope of police power keeps expanding as civilization
advances. As was said in the case of Dobbins v. Los Angeles (195
U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police
power is a continuing one, and a business lawful today may in the
future, because of the changed situation, the growth of population
or other causes, become a menace to the public health and
welfare, and be required to yield to the public good." And in People
v. Pomar (46 Phil., 440), it was observed that "advancing civilization
is bringing within the police power of the state today things which
were not thought of as being within such power yesterday. The
development of civilization, the rapidly increasing population, the
growth of public opinion, with an increasing desire on the part of
the masses and of the government to look after and care for the
interests of the individuals of the state, have brought within the
police power many questions for regulation which formerly were
not so considered." virtua1aw library
The petitioner finally avers that the rules and regulations
complained of infringe upon the constitutional precept regarding
the promotion of social justice to insure the well-being and
economic security of all the people. The promotion of social justice,
however, is to be achieved not through a mistaken sympathy
towards any given group. Social justice is "neither communism, nor
despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic forces by the
State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of
all the competent elements of society, through the maintenance of
a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption

of measures legally justifiable, or extra-constitutionally, through the

exercise of powers underlying the existence of all governments on
the time-honored principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and quiet of
all persons, and of bringing about "the greatest good to the
greatest number." virtua1aw library
In view of the foregoing, the writ of prohibition prayed for is hereby
denied, with costs against the petitioner. So ordered.
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES,
INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A.
GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J.
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA,
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J.
PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA
A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS,
DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill
District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL
AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.

HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF

AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs.
SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA
and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform,
and LAND BANK OF THE PHILIPPINES, respondents.

CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and
challenged Hercules for his life on his way to Mycenae after
performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but
Antaeus rose even stronger to resume their struggle. This
happened several times to Hercules' increasing amazement.
Finally, as they continued grappling, it dawned on Hercules that
Antaeus was the son of Gaea and could never die as long as any
part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the
sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But
they also tell of the elemental forces of life and death, of men and
women who, like Antaeus need the sustaining strength of the
precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute
imbalance in the distribution of this precious resource among our
people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly

urgent demand of the dispossessed among us for a plot of earth as

their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the
policy of social justice to "insure the well-being and economic
security of all the people," 1 especially the less privileged. In 1973,
the new Constitution affirmed this goal adding specifically that "the
State shall regulate the acquisition, ownership, use, enjoyment and
disposition of private property and equitably diffuse property
ownership and profits." 2 Significantly, there was also the specific
injunction to "formulate and implement an agrarian reform program
aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing
these sentiments, it also adopted one whole and separate Article
XIII on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people.
These include a call in the following words for the adoption by the
State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an
agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in
the case of other farmworkers, to receive a just share
of the fruits thereof. To this end, the State shall
encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may
prescribe, taking into account ecological,
developmental, or equity considerations and subject
to the payment of just compensation. In determining
retention limits, the State shall respect the right of
small landowners. The State shall further provide
incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural
Land Reform Code, had already been enacted by the Congress of
the Philippines on August 8, 1963, in line with the above-stated
principles. This was substantially superseded almost a decade later
by P.D. No. 27, which was promulgated on October 21, 1972, along
with martial law, to provide for the compulsory acquisition of

private lands for distribution among tenant-farmers and to specify

maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed
even energized the thrust for agrarian reform. Thus, on July 17,
1987, President Corazon C. Aquino issued E.O. No. 228, declaring
full land ownership in favor of the beneficiaries of P.D. No. 27 and
providing for the valuation of still unvalued lands covered by the
decree as well as the manner of their payment. This was followed
on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229,
providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of
the Philippines took over legislative power from the President and
started its own deliberations, including extensive public hearings,
on the improvement of the interests of farmers. The result, after
almost a year of spirited debate, was the enactment of R.A. No.
6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988, which President Aquino signed on June 10, 1988. This law,
while considerably changing the earlier mentioned enactments,
nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they
involve common legal questions, including serious challenges to
the constitutionality of the several measures mentioned above.
They will be the subject of one common discussion and resolution,
The different antecedents of each case will require separate
treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27,
E.O. Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four
tenants and owned by petitioner Nicolas Manaay and his wife and a
5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of
these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and
229 on grounds inter alia of separation of powers, due process,
equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when
she promulgated E.O. No. 228. The said measure is invalid also for
violation of Article XIII, Section 4, of the Constitution, for failure to
provide for retention limits for small landowners. Moreover, it does
not conform to Article VI, Section 25(4) and the other requisites of a
valid appropriation.
In connection with the determination of just compensation, the
petitioners argue that the same may be made only by a court of
justice and not by the President of the Philippines. They invoke the
recent cases of EPZA v. Dulay 5 and Manotok v. National Food
Authority. 6 Moreover, the just compensation contemplated by the
Bill of Rights is payable in money or in cash and not in the form of
bonds or other things of value.
In considering the rentals as advance payment on the land, the
executive order also deprives the petitioners of their property rights
as protected by due process. The equal protection clause is also
violated because the order places the burden of solving the
agrarian problems on the owners only of agricultural lands. No
similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries
under P.D. No. 27 to be the owners of the lands occupied by them,
E.O. No. 228 ignored judicial prerogatives and so violated due
process. Worse, the measure would not solve the agrarian problem
because even the small farmers are deprived of their lands and the
retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has
already been upheld in the earlier cases of Chavez v. Zobel, 7
Gonzales v. Estrella, 8 and Association of Rice and Corn Producers
of the Philippines, Inc. v. The National Land Reform Council. 9 The
determination of just compensation by the executive authorities
conformably to the formula prescribed under the questioned order
is at best initial or preliminary only. It does not foreclose judicial
intervention whenever sought or warranted. At any rate, the

challenge to the order is premature because no valuation of their

property has as yet been made by the Department of Agrarian
Reform. The petitioners are also not proper parties because the
lands owned by them do not exceed the maximum retention limit
of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D.
No. 27 does not provide for retention limits on tenanted lands and
that in any event their petition is a class suit brought in behalf of
landowners with landholdings below 24 hectares. They maintain
that the determination of just compensation by the administrative
authorities is a final ascertainment. As for the cases invoked by the
public respondent, the constitutionality of P.D. No. 27 was merely
assumed in Chavez, while what was decided in Gonzales was the
validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended
that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21)
have been impliedly repealed by R.A. No. 6657. Nevertheless, this
statute should itself also be declared unconstitutional because it
suffers from substantially the same infirmities as the earlier
measures.
A petition for intervention was filed with leave of court on June 1,
1988 by Vicente Cruz, owner of a 1. 83- hectare land, who
complained that the DAR was insisting on the implementation of
P.D. No. 27 and E.O. No. 228 despite a compromise agreement he
had reached with his tenant on the payment of rentals. In a
subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the abovementioned enactments have been impliedly repealed by R.A. No.
6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the
Victorias Mill District, Victorias, Negros Occidental. Co-petitioner
Planters' Committee, Inc. is an organization composed of 1,400
planter-members. This petition seeks to prohibit the
implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a

Comprehensive Agrarian Reform Program as decreed by the
Constitution belongs to Congress and not the President. Although
they agree that the President could exercise legislative power until
the Congress was convened, she could do so only to enact
emergency measures during the transition period. At that, even
assuming that the interim legislative power of the President was
properly exercised, Proc. No. 131 and E.O. No. 229 would still have
to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which
provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be
known as the Agrarian Reform Fund, an initial amount of FIFTY
BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of
the Comprehensive Agrarian Reform Program from 1987 to 1992
which shall be sourced from the receipts of the sale of the assets of
the Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the Presidential Commission on Good Government
and such other sources as government may deem appropriate. The
amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized
in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at
this time.
Furthermore, they contend that taking must be simultaneous with
payment of just compensation as it is traditionally understood, i.e.,
with money and in full, but no such payment is contemplated in
Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof
provides that the Land Bank of the Philippines "shall compensate
the landowner in an amount to be established by the government,
which shall be based on the owner's declaration of current fair
market value as provided in Section 4 hereof, but subject to certain
controls to be defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully in money
but in any of several modes that may consist of part cash and part
bond, with interest, maturing periodically, or direct payment in cash

or bond as may be mutually agreed upon by the beneficiary and

the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two
measures, no effort was made to make a careful study of the sugar
planters' situation. There is no tenancy problem in the sugar areas
that can justify the application of the CARP to them. To the extent
that the sugar planters have been lumped in the same legislation
with other farmers, although they are a separate group with
problems exclusively their own, their right to equal protection has
been violated.
A motion for intervention was filed on August 27,1987 by the
National Federation of Sugarcane Planters (NASP) which claims a
membership of at least 20,000 individual sugar planters all over the
country. On September 10, 1987, another motion for intervention
was filed, this time by Manuel Barcelona, et al., representing
coconut and riceland owners. Both motions were granted by the
Court.
NASP alleges that President Aquino had no authority to fund the
Agrarian Reform Program and that, in any event, the appropriation
is invalid because of uncertainty in the amount appropriated.
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229
provide for an initial appropriation of fifty billion pesos and thus
specifies the minimum rather than the maximum authorized
amount. This is not allowed. Furthermore, the stated initial amount
has not been certified to by the National Treasurer as actually
available.

In his consolidated Comment, the Solicitor General first invokes the

presumption of constitutionality in favor of Proc. No. 131 and E.O.
No. 229. He also justifies the necessity for the expropriation as
explained in the "whereas" clauses of the Proclamation and submits
that, contrary to the petitioner's contention, a pilot project to
determine the feasibility of CARP and a general survey on the
people's opinion thereon are not indispensable prerequisites to its
promulgation.
On the alleged violation of the equal protection clause, the sugar
planters have failed to show that they belong to a different class
and should be differently treated. The Comment also suggests the
possibility of Congress first distributing public agricultural lands and
scheduling the expropriation of private agricultural lands later. From
this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional
prohibition is against the payment of public money without the
corresponding appropriation. There is no rule that only money
already in existence can be the subject of an appropriation law.
Finally, the earmarking of fifty billion pesos as Agrarian Reform
Fund, although denominated as an initial amount, is actually the
maximum sum appropriated. The word "initial" simply means that
additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a
petition on his own behalf, assailing the constitutionality of E.O. No.
229. In addition to the arguments already raised, Serrano contends
that the measure is unconstitutional because:

Two additional arguments are made by Barcelona, to wit, the failure

to establish by clear and convincing evidence the necessity for the
exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.

(1) Only public lands should be included in the CARP;

The petitioners also decry the penalty for non-registration of the

lands, which is the expropriation of the said land for an amount
equal to the government assessor's valuation of the land for tax
purposes. On the other hand, if the landowner declares his own
valuation he is unjustly required to immediately pay the
corresponding taxes on the land, in violation of the uniformity rule.

(3) The power of the President to legislate was

terminated on July 2, 1987; and

(2) E.O. No. 229 embraces more than one subject

which is not expressed in the title;

(4) The appropriation of a P50 billion special fund

from the National Treasury did not originate from the
House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of
Agrarian Reform, in violation of due process and the requirement
for just compensation, placed his landholding under the coverage
of Operation Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then refused
payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous
inclusion of his small landholding under Operation Land transfer
and asked for the recall and cancellation of the Certificates of Land
Transfer in the name of the private respondents. He claims that on
December 24, 1986, his petition was denied without hearing. On
February 17, 1987, he filed a motion for reconsideration, which had
not been acted upon when E.O. Nos. 228 and 229 were issued.
These orders rendered his motion moot and academic because
they directly effected the transfer of his land to the private
respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by
the President of the Philippines.
(2) The said executive orders are violative of the
constitutional provision that no private property shall
be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum
retention provided for under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229
shortly before Congress convened is anomalous and arbitrary,
besides violating the doctrine of separation of powers. The
legislative power granted to the President under the Transitory
Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his
property without due process of law and to the retention of his
small parcels of riceholding as guaranteed under Article XIII,

Section 4 of the Constitution. He likewise argues that, besides

denying him just compensation for his land, the provisions of E.O.
No. 228 declaring that:
Lease rentals paid to the landowner by the farmerbeneficiary after October 21, 1972 shall be
considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his
contention that the inclusion of even small landowners in the
program along with other landowners with lands consisting of
seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is
premature because the motion for reconsideration filed with the
Minister of Agrarian Reform is still unresolved. As for the validity of
the issuance of E.O. Nos. 228 and 229, he argues that they were
enacted pursuant to Section 6, Article XVIII of the Transitory
Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative
powers until the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No.
27 was promulgated on October 21. 1972, the tenant-farmer of
agricultural land was deemed the owner of the land he was tilling.
The leasehold rentals paid after that date should therefore be
considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that
the motion he filed was resolved on December 14, 1987. An appeal
to the Office of the President would be useless with the
promulgation of E.O. Nos. 228 and 229, which in effect sanctioned
the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by
P.D. No. 27 to owners of rice and corn lands not exceeding seven
hectares as long as they are cultivating or intend to cultivate the
same. Their respective lands do not exceed the statutory limit but
are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in

implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily
devoted to rice and corn shall be ejected or removed
from his farmholding until such time as the
respective rights of the tenant- farmers and the
landowner shall have been determined in accordance
with the rules and regulations implementing P.D. No.
27.
The petitioners claim they cannot eject their tenants and so are
unable to enjoy their right of retention because the Department of
Agrarian Reform has so far not issued the implementing rules
required under the above-quoted decree. They therefore ask the
Court for a writ of mandamus to compel the respondent to issue
the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has
been amended by LOI 474 removing any right of retention from
persons who own other agricultural lands of more than 7 hectares
in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate
income for their family. And even assuming that the petitioners do
not fall under its terms, the regulations implementing P.D. No. 27
have already been issued, to wit, the Memorandum dated July 10,
1975 (Interim Guidelines on Retention by Small Landowners, with
an accompanying Retention Guide Table), Memorandum Circular
No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No.
474), Memorandum Circular No. 18-81 dated December 29,1981
(Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention
by Small Landowners), and DAR Administrative Order No. 1, series
of 1985 (Providing for a Cut-off Date for Landowners to Apply for
Retention and/or to Protest the Coverage of their Landholdings
under Operation Land Transfer pursuant to P.D. No. 27). For failure
to file the corresponding applications for retention under these
measures, the petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have
prematurely initiated this case notwithstanding the pendency of
their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been

done, involves the exercise of discretion which cannot be controlled

through the writ of mandamus. This is especially true if this
function is entrusted, as in this case, to a separate department of
the government.
In their Reply, the petitioners insist that the above-cited measures
are not applicable to them because they do not own more than
seven hectares of agricultural land. Moreover, assuming arguendo
that the rules were intended to cover them also, the said measures
are nevertheless not in force because they have not been published
as required by law and the ruling of this Court in Tanada v. Tuvera.
10
As for LOI 474, the same is ineffective for the additional reason
that a mere letter of instruction could not have repealed the
presidential decree.
I
Although holding neither purse nor sword and so regarded as the
weakest of the three departments of the government, the judiciary
is nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the
fundamental law. This is the reason for what some quarters call the
doctrine of judicial supremacy. Even so, this power is not lightly
assumed or readily exercised. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of
their functions and of their respect for the other departments, in
striking down the acts of the legislative and the executive as
unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was
done or the law was enacted, earnest studies were made by
Congress or the President, or both, to insure that the Constitution
would not be breached.
In addition, the Constitution itself lays down stringent conditions for
a declaration of unconstitutionality, requiring therefor the
concurrence of a majority of the members of the Supreme Court
who took part in the deliberations and voted on the issue during
their session en banc. 11 And as established by judge made
doctrine, the Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial
inquiry into such a question are first satisfied. Thus, there must be
an actual case or controversy involving a conflict of legal rights

susceptible of judicial determination, the constitutional question

must have been opportunely raised by the proper party, and the
resolution of the question is unavoidably necessary to the decision
of the case itself. 12

departments, or of any public official, betray the people's will as

expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel,
that

With particular regard to the requirement of proper party as applied

in the cases before us, we hold that the same is satisfied by the
petitioners and intervenors because each of them has sustained or
is in danger of sustaining an immediate injury as a result of the acts
or measures complained of. 13 And even if, strictly speaking, they
are not covered by the definition, it is still within the wide discretion
of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious
constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and
taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were
invoking only an indirect and general interest shared in common
with the public. The Court dismissed the objection that they were
not proper parties and ruled that "the transcendental importance to
the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of
procedure." We have since then applied this exception in many
other cases. 15
The other above-mentioned requisites have also been met in the
present petitions.
In must be stressed that despite the inhibitions pressing upon the
Court when confronted with constitutional issues like the ones now
before it, it will not hesitate to declare a law or act invalid when it is
convinced that this must be done. In arriving at this conclusion, its
only criterion will be the Constitution as God and its conscience
give it the light to probe its meaning and discover its purpose.
Personal motives and political considerations are irrelevancies that
cannot influence its decision. Blandishment is as ineffectual as
intimidation.
For all the awesome power of the Congress and the Executive, the
Court will not hesitate to "make the hammer fall, and heavily," to
use Justice Laurel's pithy language, where the acts of these

... when the judiciary mediates to allocate

constitutional boundaries, it does not assert any
superiority over the other departments; it does not in
reality nullify or invalidate an act of the Legislature,
but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution
and to establish for the parties in an actual
controversy the rights which that instrument secures
and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy"
which properly is the power of judicial review under
the Constitution. 16
The cases before us categorically raise constitutional questions that
this Court must categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before
resolving the more serious challenges to the constitutionality of the
several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise
of his powers under martial law has already been sustained in
Gonzales v. Estrella and we find no reason to modify or reverse it
on that issue. As for the power of President Aquino to promulgate
Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized
under Section 6 of the Transitory Provisions of the 1987
Constitution, quoted above.
The said measures were issued by President Aquino before July 27,
1987, when the Congress of the Philippines was formally convened
and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No.
228 was issued on July 17, 1987, and the other measures, i.e., Proc.

No. 131 and E.O. No. 229, were both issued on July 22, 1987.
Neither is it correct to say that these measures ceased to be valid
when she lost her legislative power for, like any statute, they
continue to be in force unless modified or repealed by subsequent
law or declared invalid by the courts. A statute does not ipso facto
become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's
loss of legislative power did not have the effect of invalidating all
the measures enacted by her when and as long as she possessed
it.
Significantly, the Congress she is alleged to have undercut has not
rejected but in fact substantially affirmed the challenged measures
and has specifically provided that they shall be suppletory to R.A.
No. 6657 whenever not inconsistent with its provisions. 17 Indeed,
some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of
E.O. No. 229, have been incorporated by reference in the CARP Law.
18

That fund, as earlier noted, is itself being questioned on the ground

that it does not conform to the requirements of a valid
appropriation as specified in the Constitution. Clearly, however,
Proc. No. 131 is not an appropriation measure even if it does
provide for the creation of said fund, for that is not its principal
purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from
the treasury. 19 The creation of the fund is only incidental to the
main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked,
to wit, Section 24 and Section 25(4) of Article VI, are not applicable.
With particular reference to Section 24, this obviously could not
have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate
appropriation measures, had not yet been convened when the
proclamation was issued. The legislative power was then solely
vested in the President of the Philippines, who embodied, as it
were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O.
No. 229 should be invalidated because they do not provide for

retention limits as required by Article XIII, Section 4 of the

Constitution is no longer tenable. R.A. No. 6657 does provide for
such limits now in Section 6 of the law, which in fact is one of its
most controversial provisions. This section declares:
Retention Limits. Except as otherwise provided in
this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the
size of which shall vary according to factors
governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each
child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years
of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That
landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep
the area originally retained by them thereunder,
further, That original homestead grantees or direct
compulsory heirs who still own the original
homestead at the time of the approval of this Act
shall retain the same areas as long as they continue
to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional
requirement that a bill shall have only one subject, to be expressed
in its title, deserves only short attention. It is settled that the title of
the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each
other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every
presidential issuance, by whatever name it was called, had the
force and effect of law because it came from President Marcos.
Such are the ways of despots. Hence, it is futile to argue, as the
petitioners do in G.R. No. 79744, that LOI 474 could not have
repealed P.D. No. 27 because the former was only a letter of

instruction. The important thing is that it was issued by President

Marcos, whose word was law during that time.

the administrative authorities, resort to the courts may still be

permitted if the issue raised is a question of law. 23

But for all their peremptoriness, these issuances from the President
Marcos still had to comply with the requirement for publication as
this Court held in Tanada v. Tuvera. 21 Hence, unless published in
the Official Gazette in accordance with Article 2 of the Civil Code,
they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was
published, though, in the Official Gazette dated November
29,1976.)

III

Finally, there is the contention of the public respondent in G.R. No.

78742 that the writ of mandamus cannot issue to compel the
performance of a discretionary act, especially by a specific
department of the government. That is true as a general
proposition but is subject to one important qualification. Correctly
and categorically stated, the rule is that mandamus will lie to
compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus
can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official
and an unnecessary and unreasonable delay in the
exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel
action. If the duty is purely ministerial, the courts will
require specific action. If the duty is purely
discretionary, the courts by mandamus will require
action only. For example, if an inferior court, public
official, or board should, for an unreasonable length
of time, fail to decide a particular question to the
great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the
law clearly gave it jurisdiction mandamus will issue,
in the first case to require a decision, and in the
second to require that jurisdiction be taken of the
cause. 22
And while it is true that as a rule the writ will not be proper as long
as there is still a plain, speedy and adequate remedy available from

There are traditional distinctions between the police power and the
power of eminent domain that logically preclude the application of
both powers at the same time on the same subject. In the case of
City of Baguio v. NAWASA, 24 for example, where a law required the
transfer of all municipal waterworks systems to the NAWASA in
exchange for its assets of equivalent value, the Court held that the
power being exercised was eminent domain because the property
involved was wholesome and intended for a public use. Property
condemned under the police power is noxious or intended for a
noxious purpose, such as a building on the verge of collapse, which
should be demolished for the public safety, or obscene materials,
which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking
of property under the power of expropriation, which requires the
payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes
laid down the limits of the police power in a famous aphorism: "The
general rule at least is that while property may be regulated to a
certain extent, if regulation goes too far it will be recognized as a
taking." The regulation that went "too far" was a law prohibiting
mining which might cause the subsidence of structures for human
habitation constructed on the land surface. This was resisted by a
coal company which had earlier granted a deed to the land over its
mine but reserved all mining rights thereunder, with the grantee
assuming all risks and waiving any damage claim. The Court held
the law could not be sustained without compensating the grantor.
Justice Brandeis filed a lone dissent in which he argued that there
was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in
the exercise of the police power deprives the owner
of some right theretofore enjoyed, and is, in that
sense, an abridgment by the State of rights in
property without making compensation. But
restriction imposed to protect the public health,
safety or morals from dangers threatened is not a

taking. The restriction here in question is merely the

prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it.
The state merely prevents the owner from making a
use which interferes with paramount rights of the
public. Whenever the use prohibited ceases to be
noxious as it may because of further changes in
local or social conditions the restriction will have
to be removed and the owner will again be free to
enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a
mingling of the police power and the power of eminent domain,
with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve
a police purpose has long been accepted. 26 As for the power of
expropriation, Prof. John J. Costonis of the University of Illinois
College of Law (referring to the earlier case of Euclid v. Ambler
Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges
located the Police and eminent domain powers on
different planets. Generally speaking, they viewed
eminent domain as encompassing public acquisition
of private property for improvements that would be
available for public use," literally construed. To the
police power, on the other hand, they assigned the
less intrusive task of preventing harmful externalities
a point reflected in the Euclid opinion's reliance on an
analogy to nuisance law to bolster its support of
zoning. So long as suppression of a privately
authored harm bore a plausible relation to some
legitimate "public purpose," the pertinent measure
need have afforded no compensation whatever. With
the progressive growth of government's involvement
in land use, the distance between the two powers
has contracted considerably. Today government often
employs eminent domain interchangeably with or as
a useful complement to the police power-- a trend
expressly approved in the Supreme Court's 1954

decision in Berman v. Parker, which broadened the

reach of eminent domain's "public use" test to match
that of the police power's standard of "public
purpose." 27
The Berman case sustained a redevelopment project and the
improvement of blighted areas in the District of Columbia as a
proper exercise of the police power. On the role of eminent domain
in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide
that the Nation's Capital should be beautiful as well
as sanitary, there is nothing in the Fifth Amendment
that stands in the way.
Once the object is within the authority of Congress,
the right to realize it through the exercise of eminent
domain is clear.
For the power of eminent domain is merely the
means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a
6-3 vote in 1978, the U.S Supreme Court sustained the
respondent's Landmarks Preservation Law under which the owners
of the Grand Central Terminal had not been allowed to construct a
multi-story office building over the Terminal, which had been
designated a historic landmark. Preservation of the landmark was
held to be a valid objective of the police power. The problem,
however, was that the owners of the Terminal would be deprived of
the right to use the airspace above it although other landowners in
the area could do so over their respective properties. While
insisting that there was here no taking, the Court nonetheless
recognized certain compensatory rights accruing to Grand Central
Terminal which it said would "undoubtedly mitigate" the loss
caused by the regulation. This "fair compensation," as he called it,
was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark
status, Penn Central was authorized to transfer to neighboring
properties the authorized but unused rights accruing to the site
prior to the Terminal's designation as a landmark the rights

which would have been exhausted by the 59-story building that the
city refused to countenance atop the Terminal. Prevailing bulk
restrictions on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to
construct larger, hence more profitable buildings on the transferee
sites. 30

they too have not questioned the area of such limits. There is also
the complaint that they should not be made to share the burden of
agrarian reform, an objection also made by the sugar planters on
the ground that they belong to a particular class with particular
interests of their own. However, no evidence has been submitted to
the Court that the requisites of a valid classification have been
violated.

The cases before us present no knotty complication insofar as the

question of compensable taking is concerned. To the extent that
the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the
regulation of private property in accordance with the Constitution.
But where, to carry out such regulation, it becomes necessary to
deprive such owners of whatever lands they may own in excess of
the maximum area allowed, there is definitely a taking under the
power of eminent domain for which payment of just compensation
is imperative. The taking contemplated is not a mere limitation of
the use of the land. What is required is the surrender of the title to
and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This
is definitely an exercise not of the police power but of the power of
eminent domain.

Classification has been defined as the grouping of persons or things

similar to each other in certain particulars and different from each
other in these same particulars. 31 To be valid, it must conform to
the following requirements: (1) it must be based on substantial
distinctions; (2) it must be germane to the purposes of the law; (3)
it must not be limited to existing conditions only; and (4) it must
apply equally to all the members of the class. 32 The Court finds
that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.

Whether as an exercise of the police power or of the power of

eminent domain, the several measures before us are challenged as
violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the
ground that no retention limits are prescribed has already been
discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in
Congress, the retention limits finally agreed upon are, curiously
enough, not being questioned in these petitions. We therefore do
not discuss them here. The Court will come to the other claimed
violations of due process in connection with our examination of the
adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied
equal protection because of the absence of retention limits has also
become academic under Section 6 of R.A. No. 6657. Significantly,

Equal protection simply means that all persons or things similarly

situated must be treated alike both as to the rights conferred and
the liabilities imposed. 33 The petitioners have not shown that they
belong to a different class and entitled to a different treatment. The
argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land
reform must be rejected. There is a substantial distinction between
these two classes of owners that is clearly visible except to those
who will not see. There is no need to elaborate on this matter. In
any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to
the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be
sustained under the police power only if there is a concurrence of
the lawful subject and the lawful method. Put otherwise, the
interests of the public generally as distinguished from those of a
particular class require the interference of the State and, no less
important, the means employed are reasonably necessary for the
attainment of the purpose sought to be achieved and not unduly
oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we
may say that the first requirement has been satisfied. What

remains to be examined is the validity of the method employed to

achieve the constitutional goal.
One of the basic principles of the democratic system is that where
the rights of the individual are concerned, the end does not justify
the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with
the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral
conviction or the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a, person invoking a right
guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that
right.
That right covers the person's life, his liberty and his property
under Section 1 of Article III of the Constitution. With regard to his
property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken
for public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State
that enables it to forcibly acquire private lands
intended for public use upon payment of just
compensation to the owner. Obviously, there is no
need to expropriate where the owner is willing to sell
under terms also acceptable to the purchaser, in
which case an ordinary deed of sale may be agreed
upon by the parties. 35 It is only where the owner is
unwilling to sell, or cannot accept the price or other
conditions offered by the vendee, that the power of
eminent domain will come into play to assert the
paramount authority of the State over the interests
of the property owner. Private rights must then yield
to the irresistible demands of the public interest on
the time-honored justification, as in the case of the

police power, that the welfare of the people is the

supreme law.
But for all its primacy and urgency, the power of expropriation is by
no means absolute (as indeed no power is absolute). The limitation
is found in the constitutional injunction that "private property shall
not be taken for public use without just compensation" and in the
abundant jurisprudence that has evolved from the interpretation of
this principle. Basically, the requirements for a proper exercise of
the power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R.
No. 79310 that the State should first distribute public agricultural
lands in the pursuit of agrarian reform instead of immediately
disturbing property rights by forcibly acquiring private agricultural
lands. Parenthetically, it is not correct to say that only public
agricultural lands may be covered by the CARP as the Constitution
calls for "the just distribution of all agricultural lands." In any event,
the decision to redistribute private agricultural lands in the manner
prescribed by the CARP was made by the legislative and executive
departments in the exercise of their discretion. We are not justified
in reviewing that discretion in the absence of a clear showing that it
has been abused.
A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the
political question. As explained by Chief Justice Concepcion in the
case of Taada v. Cuenco: 36
The term "political question" connotes what it means
in ordinary parlance, namely, a question of policy. It
refers to "those questions which, under the
Constitution, are to be decided by the people in their
sovereign capacity; or in regard to which full
discretionary authority has been delegated to the
legislative or executive branch of the government." It
is concerned with issues dependent upon the
wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been
constricted with the enlargement of judicial power, which now
includes the authority of the courts "to determine whether or not

there has been a grave abuse of discretion amounting to lack or

excess of jurisdiction on the part of any branch or instrumentality of
the Government." 37 Even so, this should not be construed as a
license for us to reverse the other departments simply because
their views may not coincide with ours.
The legislature and the executive have been seen fit, in their
wisdom, to include in the CARP the redistribution of private
landholdings (even as the distribution of public agricultural lands is
first provided for, while also continuing apace under the Public Land
Act and other cognate laws). The Court sees no justification to
interpose its authority, which we may assert only if we believe that
the political decision is not unwise, but illegal. We do not find it to
be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of
March 3,1909 that the entire St. Mary's river between
the American bank and the international line, as well
as all of the upland north of the present ship canal,
throughout its entire length, was "necessary for the
purpose of navigation of said waters, and the waters
connected therewith," that determination is
conclusive in condemnation proceedings instituted
by the United States under that Act, and there is no
room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already
been settled for us by the Constitution itself No less than the 1987
Charter calls for agrarian reform, which is the reason why private
agricultural lands are to be taken from their owners, subject to the
prescribed maximum retention limits. The purposes specified in P.D.
No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of
the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all
agricultural lands to enable farmers who are landless to own
directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation,

needs a longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. 39 It has been
repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to
intensify the meaning of the word "compensation" to convey the
idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private
lands under the police power. We deal here with an actual taking of
private agricultural lands that has dispossessed the owners of their
property and deprived them of all its beneficial use and enjoyment,
to entitle them to the just compensation mandated by the
Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is
compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be
for more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be
devoted to public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public
use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites are
envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it
to make a deposit upon its taking possession of the condemned
property, as "the compensation is a public charge, the good faith of
the public is pledged for its payment, and all the resources of
taxation may be employed in raising the amount." 43 Nevertheless,
Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from
the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the

DAR shall take immediate possession of the land and

shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the
Republic of the Philippines. The DAR shall thereafter
proceed with the redistribution of the land to the
qualified beneficiaries.

determine the just compensation for the property,

following the applicable decrees, its task would be
relegated to simply stating the lower value of the
property as declared either by the owner or the
assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under
Rule 67 of the Rules of Court. Moreover, the need to
satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said
that a judicial proceeding was not had before the
actual taking. However, the strict application of the
decrees during the proceedings would be nothing
short of a mere formality or charade as the court has
only to choose between the valuation of the owner
and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot
exercise its discretion or independence in
determining what is just or fair. Even a grade school
pupil could substitute for the judge insofar as the
determination of constitutional just compensation is
concerned.

Objection is raised, however, to the manner of fixing the just

compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is
made to Section 16(d), which provides that in case of the rejection
or disregard by the owner of the offer of the government to buy his
land... the DAR shall conduct summary administrative
proceedings to determine the compensation for the
land by requiring the landowner, the LBP and other
interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days
from the receipt of the notice. After the expiration of
the above period, the matter is deemed submitted
for decision. The DAR shall decide the case within
thirty (30) days after it is submitted for decision.

xxx
In the present petition, we are once again confronted
with the same question of whether the courts under
P.D. No. 1533, which contains the same provision on
just compensation as its predecessor decrees, still
have the power and authority to determine just
compensation, independent of what is stated by the
decree and to this effect, to appoint commissioners
for such purpose.

To be sure, the determination of just compensation is a function

addressed to the courts of justice and may not be usurped by any
other branch or official of the government. EPZA v. Dulay 44
resolved a challenge to several decrees promulgated by President
Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by
the government or the sworn valuation thereof by the owner,
whichever was lower. In declaring these decrees unconstitutional,
the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

This time, we answer in the affirmative.

The method of ascertaining just compensation under
the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the
court technically would still have the power to

xxx
It is violative of due process to deny the owner the
opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to
the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to

absolutely prevail over the judgment of a court

promulgated only after expert commissioners have
actually viewed the property, after evidence and
arguments pro and con have been presented, and
after all factors and considerations essential to a fair
and just determination have been judiciously
evaluated.
A reading of the aforecited Section 16(d) will readily show that it
does not suffer from the arbitrariness that rendered the challenged
decrees constitutionally objectionable. Although the proceedings
are described as summary, the landowner and other interested
parties are nevertheless allowed an opportunity to submit evidence
on the real value of the property. But more importantly, the
determination of the just compensation by the DAR is not by any
means final and conclusive upon the landowner or any other
interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring
the matter to the court of proper jurisdiction for final
determination of just compensation.
The determination made by the DAR is only preliminary unless
accepted by all parties concerned. Otherwise, the courts of justice
will still have the right to review with finality the said determination
in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just
compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as
follows:
SEC. 18. Valuation and Mode of Compensation.
The LBP shall compensate the landowner in such
amount as may be agreed upon by the landowner
and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other
pertinent provisions hereof, or as may be finally
determined by the court, as the just compensation
for the land.

The compensation shall be paid in one of the

following modes, at the option of the landowner:
(1) Cash payment, under the following terms and
conditions:
(a) For lands above fifty
(50) hectares, insofar as
the excess hectarage is
concerned Twenty-five
percent (25%) cash, the
balance to be paid in
government financial
instruments negotiable
at any time.
(b) For lands above
twenty-four (24)
hectares and up to fifty
(50) hectares Thirty
percent (30%) cash, the
balance to be paid in
government financial
instruments negotiable
at any time.
(c) For lands twenty-four
(24) hectares and below
Thirty-five percent
(35%) cash, the balance
to be paid in
government financial
instruments negotiable
at any time.
(2) Shares of stock in government-owned or
controlled corporations, LBP preferred shares,
physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax
liability;

(4) LBP bonds, which shall have the following

features:
(a) Market interest rates
aligned with 91-day
treasury bill rates. Ten
percent (10%) of the
face value of the bonds
shall mature every year
from the date of
issuance until the tenth
(10th) year: Provided,
That should the
landowner choose to
forego the cash portion,
whether in full or in part,
he shall be paid
correspondingly in LBP
bonds;
(b) Transferability and
negotiability. Such LBP
bonds may be used by
the landowner, his
successors-in- interest or
his assigns, up to the
amount of their face
value, for any of the
following:

(i) Acquisition of land or

other real properties of
the government,
including assets under
the Asset Privatization
Program and other
assets foreclosed by
government financial
institutions in the same
province or region where
the lands for which the
bonds were paid are
situated;
(ii) Acquisition of shares
of stock of governmentowned or controlled
corporations or shares of
stock owned by the
government in private
corporations;
(iii) Substitution for
surety or bail bonds for
the provisional release
of accused persons, or
for performance bonds;
(iv) Security for loans
with any government
financial institution,
provided the proceeds of
the loans shall be
invested in an economic
enterprise, preferably in
a small and mediumscale industry, in the
same province or region
as the land for which the
bonds are paid;

(v) Payment for various

taxes and fees to
government: Provided,
That the use of these
bonds for these
purposes will be limited
to a certain percentage
of the outstanding
balance of the financial
instruments; Provided,
further, That the PARC
shall determine the
percentages mentioned
above;
(vi) Payment for tuition
fees of the immediate
family of the original
bondholder in
government universities,
colleges, trade schools,
and other institutions;
(vii) Payment for fees of
the immediate family of
the original bondholder
in government hospitals;
and
(viii) Such other uses as
the PARC may from time
to time allow.
The contention of the petitioners in G.R. No. 79777 is that the
above provision is unconstitutional insofar as it requires the owners
of the expropriated properties to accept just compensation therefor
in less than money, which is the only medium of payment allowed.
In support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that
the owner of the property expropriated is entitled to
a just compensation, which should be neither more

nor less, whenever it is possible to make the

assessment, than the money equivalent of said
property. Just compensation has always been
understood to be the just and complete equivalent of
the loss which the owner of the thing expropriated
has to suffer by reason of the expropriation . 45
(Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration,

46

this Court held:

It is well-settled that just compensation means the

equivalent for the value of the property at the time of
its taking. Anything beyond that is more, and
anything short of that is less, than just
compensation. It means a fair and full equivalent for
the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land
taken is the just compensation to which the owner of
condemned property is entitled, the market value
being that sum of money which a person desirous,
but not compelled to buy, and an owner, willing, but
not compelled to sell, would agree on as a price to be
given and received for such property. (Emphasis
supplied.)
In the United States, where much of our jurisprudence on the
subject has been derived, the weight of authority is also to the
effect that just compensation for property expropriated is payable
only in money and not otherwise. Thus
The medium of payment of compensation is ready
money or cash. The condemnor cannot compel the
owner to accept anything but money, nor can the
owner compel or require the condemnor to pay him
on any other basis than the value of the property in
money at the time and in the manner prescribed by
the Constitution and the statutes. When the power of
eminent domain is resorted to, there must be a
standard medium of payment, binding upon both
parties, and the law has fixed that standard as
money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot,

in the nature of things, be regarded as a reliable and
constant standard of compensation. 48
"Just compensation" for property taken by
condemnation means a fair equivalent in money,
which must be paid at least within a reasonable time
after the taking, and it is not within the power of the
Legislature to substitute for such payment future
obligations, bonds, or other valuable advantage. 49
(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium
for the payment of just compensation is money and no other. And
so, conformably, has just compensation been paid in the past solely
in that medium. However, we do not deal here with the traditional
excercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited
area is sought to be taken by the State from its owner for a specific
and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands
whenever found and of whatever kind as long as they are in excess
of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the
entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does
not cover only the whole territory of this country but goes beyond
in time to the foreseeable future, which it hopes to secure and edify
with the vision and the sacrifice of the present generation of
Filipinos. Generations yet to come are as involved in this program
as we are today, although hopefully only as beneficiaries of a richer
and more fulfilling life we will guarantee to them tomorrow through
our thoughtfulness today. And, finally, let it not be forgotten that it
is no less than the Constitution itself that has ordained this
revolution in the farms, calling for "a just distribution" among the
farmers of lands that have heretofore been the prison of their
dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost
will be tremendous. Considering the vast areas of land subject to
expropriation under the laws before us, we estimate that hundreds
of billions of pesos will be needed, far more indeed than the
amount of P50 billion initially appropriated, which is already
staggering as it is by our present standards. Such amount is in fact
not even fully available at this time.
We assume that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority
project of the government. It is a part of this assumption that when
they envisioned the expropriation that would be needed, they also
intended that the just compensation would have to be paid not in
the orthodox way but a less conventional if more practical method.
There can be no doubt that they were aware of the financial
limitations of the government and had no illusions that there would
be enough money to pay in cash and in full for the lands they
wanted to be distributed among the farmers. We may therefore
assume that their intention was to allow such manner of payment
as is now provided for by the CARP Law, particularly the payment of
the balance (if the owner cannot be paid fully with money), or
indeed of the entire amount of the just compensation, with other
things of value. We may also suppose that what they had in mind
was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new
Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional
Commission any categorical agreement among the members
regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform
program being contemplated. There was the suggestion to "fine
tune" the requirement to suit the demands of the project even as it
was also felt that they should "leave it to Congress" to determine
how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized
compensation" were also proposed. In the end, however, no special
definition of the just compensation for the lands to be expropriated
was reached by the Commission. 50

On the other hand, there is nothing in the records either that

militates against the assumptions we are making of the general
sentiments and intention of the members on the content and
manner of the payment to be made to the landowner in the light of
the magnitude of the expenditure and the limitations of the
expropriator.

already remarked, this cannot be avoided. Nevertheless, it is

devoutly hoped that these countrymen of ours, conscious as we
know they are of the need for their forebearance and even
sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. Otherwise, our pursuit of
this elusive goal will be like the quest for the Holy Grail.

With these assumptions, the Court hereby declares that the content
and manner of the just compensation provided for in the aforequoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all
this Court is not a cloistered institution removed from the realities
and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our
people to see the goal of agrarian reform achieved at last after the
frustrations and deprivations of our peasant masses during all
these disappointing decades. We are aware that invalidation of the
said section will result in the nullification of the entire program,
killing the farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless
countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.

The complaint against the effects of non-registration of the land

under E.O. No. 229 does not seem to be viable any more as it
appears that Section 4 of the said Order has been superseded by
Section 14 of the CARP Law. This repeats the requisites of
registration as embodied in the earlier measure but does not
provide, as the latter did, that in case of failure or refusal to register
the land, the valuation thereof shall be that given by the provincial
or city assessor for tax purposes. On the contrary, the CARP Law
says that the just compensation shall be ascertained on the basis of
the factors mentioned in its Section 17 and in the manner provided
for in Section 16.

Accepting the theory that payment of the just compensation is not

always required to be made fully in money, we find further that the
proportion of cash payment to the other things of value constituting
the total payment, as determined on the basis of the areas of the
lands expropriated, is not unduly oppressive upon the landowner. It
is noted that the smaller the land, the bigger the payment in
money, primarily because the small landowner will be needing it
more than the big landowners, who can afford a bigger balance in
bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the
payment are "negotiable at any time." The other modes, which are
likewise available to the landowner at his option, are also not
unreasonable because payment is made in shares of stock, LBP
bonds, other properties or assets, tax credits, and other things of
value equivalent to the amount of just compensation.

The recognized rule, indeed, is that title to the property

expropriated shall pass from the owner to the expropriator only
upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic
jurisdictions. Thus:

Admittedly, the compensation contemplated in the law will cause

the landowners, big and small, not a little inconvenience. As

The last major challenge to CARP is that the landowner is divested

of his property even before actual payment to him in full of just
compensation, in contravention of a well- accepted principle of
eminent domain.

Title to property which is the subject of condemnation proceedings

does not vest the condemnor until the judgment fixing just
compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain
Act, or the commissioner's report under the Local Improvement Act,
is filed. 51
... although the right to appropriate and use land taken for a canal
is complete at the time of entry, title to the property taken remains
in the owner until payment is actually made. 52 (Emphasis
supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several

cases holding that title to property does not pass to the condemnor
until just compensation had actually been made. In fact, the
decisions appear to be uniformly to this effect. As early as 1838, in
Rubottom v. McLure, 54 it was held that "actual payment to the
owner of the condemned property was a condition precedent to the
investment of the title to the property in the State" albeit "not to
the appropriation of it to public use." In Rexford v. Knight, 55 the
Court of Appeals of New York said that the construction upon the
statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon
and appropriate the land was complete prior to the payment.
Kennedy further said that "both on principle and authority the rule
is ... that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of
law for a public use, but that the title does not pass from the owner
without his consent, until just compensation has been made to
him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus
and Paredes, 56 that:
If the laws which we have exhibited or cited in the
preceding discussion are attentively examined it will
be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford
absolute reassurance that no piece of land can be
finally and irrevocably taken from an unwilling owner
until compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of
tenant-farmer as October 21, 1972 and declared that he shall "be
deemed the owner" of a portion of land consisting of a family-sized
farm except that "no title to the land owned by him was to be
actually issued to him unless and until he had become a fullfledged member of a duly recognized farmers' cooperative." It was
understood, however, that full payment of the just compensation
also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full

owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under
the said decree, after proof of full-fledged membership in the
farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in
its Section 2 that the "lease rentals paid to the landowner by the
farmer- beneficiary after October 21, 1972 (pending transfer of
ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession
and ownership of the land to the government on receipt by the
landowner of the corresponding payment or the deposit by the DAR
of the compensation in cash or LBP bonds with an accessible bank.
Until then, title also remains with the landowner. 57 No outright
change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due
process by arbitrarily transferring title before the land is fully paid
for must also be rejected.
It is worth stressing at this point that all rights acquired by the
tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228,
are retained by him even now under R.A. No. 6657. This should
counter-balance the express provision in Section 6 of the said law
that "the landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said
homestead."
In connection with these retained rights, it does not appear in G.R.
No. 78742 that the appeal filed by the petitioners with the Office of
the President has already been resolved. Although we have said
that the doctrine of exhaustion of administrative remedies need not
preclude immediate resort to judicial action, there are factual

issues that have yet to be examined on the administrative level,

especially the claim that the petitioners are not covered by LOI 474
because they do not own other agricultural lands than the subjects
of their petition.

more fulfilling future. Now at last can he banish from his small plot
of earth his insecurities and dark resentments and "rebuild in it the
music and the dream."
WHEREFORE, the Court holds as follows:

Obviously, the Court cannot resolve these issues. In any event,

assuming that the petitioners have not yet exercised their retention
rights, if any, under P.D. No. 27, the Court holds that they are
entitled to the new retention rights provided for by R.A. No. 6657,
which in fact are on the whole more liberal than those granted by
the decree.

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O.
Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein
petitions.

2. Title to all expropriated properties shall be

transferred to the State only upon full payment of
compensation to their respective owners.

The CARP Law and the other enactments also involved in these
cases have been the subject of bitter attack from those who point
to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than
perfect; indeed, they should be continuously re-examined and
rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere.
In the pursuit of agrarian reform, we do not tread on familiar
ground but grope on terrain fraught with pitfalls and expected
difficulties. This is inevitable. The CARP Law is not a tried and
tested project. On the contrary, to use Justice Holmes's words, "it is
an experiment, as all life is an experiment," and so we learn as we
venture forward, and, if necessary, by our own mistakes. We cannot
expect perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the farmer from
the iron shackles that have unconscionably, and for so long,
fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the
comprehensive agrarian reform program are removed, to clear the
way for the true freedom of the farmer. We may now glimpse the
day he will be released not only from want but also from the
exploitation and disdain of the past and from his own feelings of
inadequacy and helplessness. At last his servitude will be ended
forever. At last the farm on which he toils will be his farm. It will be
his portion of the Mother Earth that will give him not only the staff
of life but also the joy of living. And where once it bred for him only
deep despair, now can he see in it the fruition of his hopes for a

3. All rights previously acquired by the tenantfarmers under P.D. No. 27 are retained and
recognized.
4. Landowners who were unable to exercise their
rights of retention under P.D. No. 27 shall enjoy the
retention rights granted by R.A. No. 6657 under the
conditions therein prescribed.
5. Subject to the above-mentioned rulings all the
petitions are DISMISSED, without pronouncement as
to costs.
SO ORDERED.

G.R. No. 200454

October 22, 2014

HOLY TRINITY REALTY & DEVELOPMENT CORPORATION,

Petitioner,
vs.
VICTORIO DELA CRUZ, LORENZO MANALAYSAY, RICARDO
MARCELO, JR. and LEONCIO DE GUZMAN, Respondents.
DECISION

BERSAMIN, J.:

T-73012

Godofredo Alcoriza

300

Land on which no agricultural activity is being conducted is not

subject to the coverage of either Presidential Decree No. 27 or
Republic Act No. 6657 (Comprehensive Agrarian Reform Law).

T-73013

Lorenza Angeles

300

T-73014

Ramon Manalad

300

Toribio M. Hernandez

300

Emerciana Montealegre

300

Pedro Manalad

300

T-73015

Celerino Ramos

300

T-73016

Cecilia L. Martin

300

T-73017

Pablo dela Cruz

300

T-73018

Aurelio dela Cruz

300

T-73019

Julita Leoncio

300

The Case
The petitioner appeals the decision promulgated on July 27, 2011,1
whereby the Court of Appeals (CA) reversed the decision issued by
the Office of the President (OP) on March 1, 2010,2 and reinstated
the order of the OIC-Regional Director of the Department of
Agrarian Reform in Regional Office III rendered on August 18,
2006.3
Antecedents
Subject of the controversy is a parcel of land located in Brgy.
Dakila, Malolos, Bulacan (Dakila property) registered in the name of
Freddie Santiago under Transfer Certificate of Title (TCT) No. T103698 of the Registry of Deeds of Bulacan with an area of 212,500
square meters. The Dakila property used to be tenantedby Susana
Surio,Cipriano Surio, Alfonso Espiritu, Agustin Surio, Aurelio Surio,
Pacifico Eugenio, Godofredo Alcoriza, Lorenza Angeles, Ramon
Manalad, Toribio Hernandez, Emerciana Montealegre, Pedro
Manalad, Celerino Ramos and Cecilia L. Martin,4 but in August
1991, these tenants freely and voluntarily relinquished their
tenancy rights infavor of Santiago through their respective
sinumpaang pahayag5 in exchange for some financial assistance
and individual homelots titled and distributed in their names, as
follows:6
TCT No.

Name of Tenant/Successor

Area
(sq. m.)

T-73006

Susana Surio

186

T-73007

Cipriano Surio

150

T-73008

Alfonso Espiritu

300

T-73009

Agustin Surio

300

T-73010

Aurelio Surio

264

T-73011

Pacifico Eugenio

300

Anicia L. de Guzman
T-73020

Ramon Centeno

300

T-73021

Miguel Centeno

300

TOTAL

4,500

On September 17, 1992, the petitioner purchased the remaining

208,050 square meters of the Dakila property from Santiago,7 and
later caused the transfer of the title to its name as well as
subdivided the Dakila property into six lots,8 to wit:
TCT No.
Area
(sq. m.)
81618
50,000
81619
50,000
81620
50,000

81621

1. The Properties are untenanted;

54,810

2. That they are not fitted (sic) for agricultural use for lack of
sufficient irrigation;

73022
2,401
73023
839
TOTAL
208,050
The petitioner then developed the property by dumping filling
materials on the topsoil, and by erecting a perimeter fence and
steel gate. It established its field office on the property.9
On March 4, 1998, the Sanggunian Bayan ng Malolos passed
Municipal Resolution No. 16-98 reclassifying four of the six
subdivided lots belonging to the petitioner, to wit:
MUNICIPAL RESOLUTION NO. 16-98
A RESOLUTION RE-CLASSIFYING AS RESIDENTIAL LOTS THE FOUR
(4) PARCELS OF LAND SEPARATELY COVERED BY TCT NO. 81618,
TCT NO. 81619, TCT NO.81620 AND TCT NO. 81621 CONTAINING AN
AREAOF 50,000 SQ MTS,50,000 SQ. MTS, 50,000 SQ M (sic) AND
54,810 SQ M (sic) RESPECTIVELY ALL LOCATED AT DAKILA,
MALOLOS, BULACAN REGISTERED IN THE NAME OF THE HOLY
TRINITY REALTY AND DEVELOPMENT CORPORATION
WHEREAS, Ms. Jennifer M. Romero, Auditor Representative of Holy
Trinity Realty and Development Corporation in [her] letter to the
Sangguniang Bayan made a request for re-classification of four
parcel(s) of land registered in the name of Holy Trinity and
Development Corporation under TCT NO. 81618, TCT NO. 81619,
TCT NO. 81620 AND TCT NO. 81621 with an area of 50,000 sq. m.,
50,000 sq. m., 50,000 sq. m. AND 54,810 sq. m. respectively all
located at Dakila, Malolos, Bulacan.
WHEREAS, after an ocular inspection of the subject lots and
matured deliberation, the Sangguniang Bayan found merit in the
request for the following reasons, thus:

3. There are improvements already introduce[d] on the

property by its owner like construction of subdivision roads;
4. Lack of oppositor to the intend[ed] subdivision project on
the properties by its owner;
5. That they are more suitable for residential use
considering their location vi[s]--vi[s] with (sic) the
residential lots in the area.
NOW THEREFORE, on motion of Hon. Romeo L. Maclang as
seconded by all Sangguniang Bayan members present, RESOLVED,
as is hereby resolved to re-classify into residential properties four
(4) parcels of land separately covered by TCT NO. 81618, TCT NO.
81619, TCT NO. 81620 AND TCT NO. 81621 of the Registry of Deeds
of Bulacan, containing an area of 50,000 sq. m. respectively,
registered in ownership of Holy Trinity and Development
Corporation located and adjacent to one another in Barangay
Dakila of this Municipality pursuant to the power vested to this
Sangguniang [sic] by the Local Government Code of the Philippines.
RESOLVED further that the owner and/or developer of the said
property shall provide adequate [illegible] to protect the adjacent
lots and its owners from any inconvenience and prejudice caused
by the development of the above mentioned property.
APPROVED.10
Consequently, the Municipal Planning and Development Office
(MPDO) of Malolos, Bulacan issueda Certificate of Eligibility for
Conversion (Certificate of Zoning Conformance),11 as well as a
Preliminary Approval and Locational Clearance infavor of the
petitioner for its residential subdivision project on the Dakila
property.12
On August 23, 1999, the petitioner purchased from Santiago
another parcel of land with an area of 25,611 located in Barangay
Sumapang Matanda, Malolos, Bulacan (Sumapang Matanda

property) and covered by TCT No. T-103697 of the Registry of

Deeds of Bulacan.13
In April 2006, a certain Silvino Manalad and the alleged heirs of
Felix Surio wrote to the Provincial Agrarian Reform Officer (PARO) of
Bulacan to request an investigation of the sale of the Dakila
property.14 This was followed by the letter request of Sumapang
Matanda Barangay Agrarian Reform Council (BARC) Chairman
Numeriano L. Enriquez to place the Dakila property within the
coverage of Operation Land Transfer (OLT) pursuant to Presidential
Decree No. 27, which was docketed as A-0302-0608-06, A.R. Case
No. LSD-032406.15
Several days later, the DAR Provincial Office of Bulacan filed a
petition to annul the sale of the Dakilaproperty with the Provincial
Agrarian Reform Adjudicator (PARAD) of Bulacan, docketed as
DARAB Case No. R-03-02-287306.
Ruling of the DAR Regional Office
On August 18, 2006, the OIC-Regional Director in San Fernando,
Pampanga issued an order granting the letter request of BARC
Chairman Enriquez in A-0302-0608-06, A.R. Case No. LSD032406,16 viz:

27, Section 6 of Republic Act No. 665718 and DAR Administrative

Order No. 1, Series of 1989; and that the petitioner was disqualified
from acquiring land under Republic Act No. 6657 because it was a
corporation.19
Aggrieved, the petitioner assailed the order through its Motion to
Withdraw/Quash/Set Aside,20 citing lack of jurisdiction and denial
of due process. It argued that the letter request was in the nature
of a collateral attack on its title.
Pending resolution of the Motion to Withdraw/Quash/Set Aside, the
Register of Deeds issued emancipation patents (EPs) pursuant to
the order of the OIC-Regional Director. The petitioners titles were
canceled and EPs were issued to the respondents as follows:21
TCT No.

Emancipation
Patent No.

Beneficiary/ies

Area
(sqm)

T-2007-EP22

00783329

Victorio dela Cruz

50,000

T-2008-EP23

00783330

Lorenzo Manalaysay

50,000

T-2009-EP24

00783331

Ricardo Marcelo, Jr.

50,000

T-2010-EP25

00783332

Leoncio de Guzman

54,810

T-2011-EP26
00783334
Gonzalo Caspe
WHEREFORE, in the light of the foregoing premises and for the
00783333
reason indicated therein, this Office resolves to give due course to T-2012-EP27
this instant request. Accordingly, the MARO and PARO concerned
are hereby DIRECTED to place within the ambit of PD 27/RA 6657
Almost two months after the EPs were issued, the OIC-Regional
the following titles TCT Nos. T-81618, T-81619, T-81620, T-81621, TDirector denied the petitioners motion for reconsideration.28
81622 and T-73023, all situated at Sumapang Matanda, Malolos
City, Bulacan, registered in the name of Holy Trinity Realty and
Ruling of the DAR Secretary
Development Corporation for distribution to qualified farmer
beneficiary (sic).
The petitioner appealed to the DAR Secretary, submitting that: (1)
the letter request for coverage under Presidential Decree No. 27
Finally, the DAR reserves the right to cancel or withdraw this Order
and the subsequent filing of the petition for annulment of sale in
in case of misrepresentation of facts material to its issuance and for
the DARAB constituted forum shopping; and (2) the EPs were
violation of pertinent agrarian laws including applicable
prematurely issued.
implementing guidelines or rules and regulations.
SO ORDERED.17
The OIC-Regional Director opined that the sale of the Dakila
property was a prohibited transaction under Presidential Decree No.

On November 22, 2007, DAR Secretary Nasser C. Pangandaman

issued an order denying the appeal,29 and holding that forum
shopping was not committed because the causes of action in the
letter request and the action for cancellation of the deed of sale
before the DARAB were distinct and separate; that the EPs were

2,401
839

regularly issued; and that the resolution of the DARAB would not in
any manner affect the validity of the EPs.
Ruling on the petitioners motion for reconsideration, the DAR
Secretary said that the Dakila property was not exempt from the
coverage of Presidential Decree No. 27 and Republic Act No. 6657
because Municipal Resolution No. 16-98 did not change or reclassify
but merely re-zoned the Dakila property.30
Ruling of the Office of the President
On March 1, 2010, the Office ofthe President (OP) reversed the
ruling of DAR Secretary Pangandaman upon its finding that the
Dakila property had ceased to be suitable for agriculture, and had
been reclassified as residential land pursuant to Municipal
Resolution No. 16-98, thus:31
We find merit in the appeal.
Under Section 3 (c) of RA 6657, agricultural lands refer to lands
devoted to agriculture as conferred inthe said law and not classified
as industrial land. Agricultural lands are only those lands which are
arable or suitable lands that do not include commercial, industrial
and residential lands.
In this case, the subject land holdings are not agricultural lands but
rather residential lands. The lands are located in a residential area.
Likewise, there are agricultural activities within or near the area.
Even today, the areas in question continued (sic) to be developed
as a residential community, albeit at a snails pace. This can be
readily gleaned from the fact that both the City Assessor of Malolos
and the Provincial Assessor of Bulacan have considered these lands
as residential for taxation purposes.
Based on the foregoing, it is clear that appellants landholding
cannot in any language be considered as "agricultural lands."
These lots were intended for residential use. They ceased to be
agricultural lands upon approval of Municipal Resolution No. 16-98.
The authority of the municipality (now City) of Malolos to issue
zoning classification is an exercise of its police power, not the
power of eminent domain. Section 20, Chapter 2, Title I of RA 7160
specifically empowers municipal and/or city councils to adopt
zoning and subdivision ordinances or regulations within its
territorial jurisdiction. A zoning ordinance/resolution prescribes,

defines, and apportions a given political subdivision into specific

land uses as present and future projection of needs. The power of
the local government to convert or reclassify agricultural lands to
non-agricultural lands is not subject to the approval of the
Department of Agrarian Reform.
It bears stressing that in his Decision dated April 30, 2002, as
affirmed by the Department of Agrarian Reform Adjudication Board
(DARAB) in its Resolution dated March 17, 2006, Bulacan Provincial
Adjudicator Toribio Ilao, Jr., declared that the properties were not
tenanted and/or agricultural and that the alleged farmersoccupants are mere squatters thereto. These decision and
resolution were not appealed by the farmers-occupants and, as
such, it became final and executory. By declaring, in its assailed
Order of November 22, 2007, that the properties subject of the suit,
were agricultural lands, the DAR Secretary thereby reversed the
said DARAB rulings, issued more than a year before, and nullified
Resolution No. 16-98 of the Municipal Council of Malolos, approved
nine (9) years earlier, on March 4, 1998. Thus, the DAR Secretary
acted with grave abuse of discretion amounting to excess or lack of
jurisdiction.
IN VIEW OF THE FOREGOING, the appeal is hereby GRANTED.
Accordingly, the November 22, 2007 Order and February 22, 2008
Resolution of the Department of Agrarian Reform are hereby
REVERSED and SET ASIDE.
SO ORDERED.32
The respondents moved to reconsider, but the OP denied their
motion for reconsideration. Hence, they appealed to the CA by
petition for review.33
Ruling of the CA
In the now assailed decision promulgated on July 27, 2011,34 the
CA reversed and set aside the decision of the OP. It declared that
prior to the effectivity of Republic Act No. 6657 onJune 15, 1988
and even after the passage of Municipal Resolution No. 16-98 on
March 4, 1998, the Dakila property was an agricultural land; that
there was no valid reclassification because Section 20 of Republic
Act No. 7160 (The Local Government Code) and Memorandum
Circular No. 54 required an ordinance, not a resolution; and that
findings of the DAR on the Dakila property being an agricultural
land should be respected,35 subject to the clarification to the effect

that its determination was only limited to the issue of whether the
Dakila property was an agricultural land covered by Republic Act
No. 6657.
The petitioner sought reconsideration but its motion for that
purpose was denied.36

WHETHER OR NOT THE HONORABLE COURT OF APPEALS

ERRONEOUSLY APPLIED THE PROVISIONS OF RA 6657 IN RESOLVING
THE SUBJECT PETITION, EVEN THOUGH THE DAR PLACED THE
SUBJECT DAKILA PROPERTY UNDER THE COVERAGE OF
PRESIDENTIAL DECREE NO. 27
IV.

Hence, this appeal by petition for review on certiorari.

Issues
The petitioner presents the following issues for our consideration:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRONEOUSLY OMITTED TO RULE UPON, ALBEIT WITHOUT CITING
ANY VALID REASONS, THE VARIOUS INTERRELATED ISSUES
PROFFERED IN PETITIONERS COMMENT RELATIVE TO DARS
INCLUSION OF THE SUBJECT DAKILA PROPERTY UNDER THE
COVERAGE OF THE AGRARIAN REFORM LAW, TO WIT: A.)
RESPONDENT-GRANTEES OF EMANCIPATION PATENTS FROM DAR
ARE NOT LEGITIMATE TENANTS OF THE DAKILA PROPERTY; B.) THE
SALE AND TRANSFER OF TITLES IN THE NAME OF PETITIONER HAVE
NOT HERETOFORE BEEN NULLIFIED EITHER BY THE DARAB
CENTRAL OFFICE OR THE REGULAR COURTS; C.) THE BONAFIDE
TENANTS OF THE DAKILA PROPERTY HAVE VALIDLY SURRENDERED
THEIR TENANCY RIGHTS IN FAVOR OFPETITIONERS
PREDECESSORIN-INTEREST; D.) THE DAKILA PROPERTY WAS NO
LONGER TENANTED AND, FURTHER, WAS NO LONGER SUITABLE TO
AGRICULTURE, AT THE TIME OF ITS COVERAGE UNDER AGRARIAN
REFORM, ITS ACTUAL USE BEING ALREADY RESIDENTIAL
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS LIKEWISE
ERRED IN FAILING TO RULE ON THE ILLEGALITY OF THE MANNER BY
WHICH THE DAR CAUSED THE SUMMARY COVERAGE OF THE DAKILA
PROPERTY UNDER THE CARP, ITS EXTRA-JUDICIAL CANCELLATION
OF PETITIONERS TITLES WITHOUT DUE PROCESS OF LAW, AND ITS
PREMATURE ISSUANCE OF EMANCIPATION PATENTS IN FAVOR OF
RESPONDENTS
III

WHETHER OR NOT HEREIN RESPONDENTS PETITION FOR REVIEW A

QUO OUGHT TO HAVE BEEN DISMISSED OUTRIGHT BY THE
HONORABLE COURT OFAPPEALS FOR FAILURE TO COMPLY WITH
SECTION 4, RULE 7 OF THE 1997 REVISED RULES OF CIVIL
PROCEDURE.37
The petitioner argues that the CA ignored issues vital to the
complete determination of the parties respective rights over the
Dakila property.
Firstly, the CA should have ruled on the propriety of issuing the EPs.
In view of the pending petition beforethe DARAB, the DAR should
have withheld the issuance of the EPs. Even granting that a final
decision had already been rendered by the DARAB, the issuance of
the EPs remained
premature inasmuch as the DAR had not yet commenced any court
proceedings for the cancellation of the petitioners title.
Accordingly, the petitioners title remained indefeasible and could
not be disturbed by the collateral orders by the OIC-Regional
Director and the DAR Secretary.
Secondly, the petitioner was deprived of due process because the
requirements of notice and the conduct of a public hearing and a
field investigation were not strictly complied with by the DAR
pursuant to Republic Act No. 6657 and DAR Administrative Order
No. 12, Series of 1998. Thirdly, the CA erred in placing the Dakila
property under the coverage of Republic Act No. 6657 when the
order of the OIC-Regional Director applied the provisions of
Presidential Decree No. 27. The two laws should be differentiated
from each other; on one hand, Presidential Decree No. 27 required
the beneficiary to be a tenant-farmer of an agricultural land
devoted to rice or corn, while on the other Republic Act No. 6657
was relatively broader and covered all public and private
agricultural lands regardless of the tenurial arrangement and the
commodity produced. Lastly, the CA should have dismissed the
respondents petition for review due to its defective certification,

pointing to the verification having been executed by the

respondents despite the letter request having been signed by BARC
Chairman Enriquez; and assailing the verification for containing the
statement that the allegations therein were based on their
"knowledge and belief" instead of their "personal knowledge and
authentic records" as required by the Rules of Court.
The respondents countered that: (1) the CA correctly set aside the
issue of whether or not they were qualified beneficiaries, because
that was not the issue raised in the letter request; (2) the CA could
not have ruled on the validity of the sale of the Dakila property in
light of the pending action in the DARAB; (3) it was within the
jurisdiction of the DAR to determine whether or not the respondents
were qualified beneficiaries; (4) the waivers by the tenants were
illegal; and (5) the issuance of the EPs was a necessary
consequence of placing the Dakila property under the coverage of
Presidential Decree No. 27.
In view of the foregoing, the Court needs to consider and resolve
the following:
1. Did the CA gravely err in limiting its decision to the issue
of whether or not the Dakila property was subject to the
coverage of Republic Act No. 6657?
2. Was the Dakila property agricultural land within the
coverage of Republic Act No. 6657 or Presidential Decree
No. 27?
3. Was the issuance of the EPs pursuant to the August 16,
2006 order of the DAR Regional Office proper?
Ruling
We reverse the CA, and reinstate the decision of the OP.
I. Procedural Issue
We first resolve the issue of the supposedly defective verification.
The verification of a petition is intended to secure an assurance
that the allegations contained in the petition have been madein
good faith, are true and correct and not merely speculative.38 This
requirement affects the form of the pleading, and its non-

compliance will not render the pleading defective. It is a formal, not

a jurisdictional requisite.39 The courts may order the correction of
the pleading if the verification is lacking, and may even act on an
unverified pleading if doing sowill serve the ends of justice.40
Under the foregoing, the CA rightly allowed the petition for review
of the respondents despite the statement that the allegations
therein were based on their "knowledge and belief." We underscore
thatthe defect was even lifted upon the voluntary submission by
the respondents themselves of their corrected verification in order
to comply with the Rules of Court.
We cannot also subscribe to the argument that the respondents
were not appropriate parties to sign the verification. They were,
considering that when the DAR issued the EPs, they became the
real parties in interest in the proceedings, giving them the requisite
personality to sign the verification. Moreover, there is no question
that the party himself need not sign the verification, for it was
enough that the partys representative, lawyer, or any person who
personally knew the truth of the facts alleged in the pleadings
could sign the verification.41 In any event, the respondents, as the
identified beneficiaries, had legal standing and interest to intervene
to protect their rights or interests under Republic Act No. 6657. This
is clear from Section 19 of Republic Act No. 9700,42 which
amended Republic Act No. 6657 by adding Section 50-A, to wit:
Section 19. Section 50of Republic Act No. 6657, as amended, is
hereby further amended by adding Section 50-A to read as follows:
Section 50-A. Exclusive Jurisdiction on Agrarian Dispute. x x x
In cases where regular courtsor quasi-judicial bodies have
competent jurisdiction, agrarian reform beneficiaries or identified
beneficiaries and/or their associations shall have legal standing and
interest to intervene concerning their individual or collective rights
and/or interests under the CARP.
xxxx
II. Courts can pass upon matters related to the issues raised by the
parties

As a general rule, appellate courts are precluded from discussing

and delving into issues that are not raised by the parties. The
pertinent rule is Section 8, Rule 51 of the Rules of Court, to wit:

the failure to assign it as error (Ortigas, Jr. vs. Lufthansa

German Airlines, L-28773, June 30, 1975; Soco vs.
Militante,et al., G.R. No. 58961, June 28, 1983).

Section 8. Questions that may be decided. No error which does

not affect the jurisdiction over the subject matter or the validity of
the judgment appealed from or the proceedings therein will be
considered unless stated in the assignment of errors, or closely
related to or dependent on an assigned error and properly argued
in the brief, save as the court may pass upon plain errors and
clerical errors.

It may also be observed that under Sec. 8 of this Rule, the

appellate court is authorized to consider a plain error,
although it was not specifically assigned by the appellant
(Dilag vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it
would be sacrificing substance for technicalities.44
(Emphasis supplied)

In Philippine National Bank v. Rabat,43 the Court explained how this

rule operates, thus:
In his book, Mr. Justice Florenz D. Regalado commented on this
section, thus:
1. Sec. 8, which is an amendment of the former Sec. 7 of
this Rule, now includes some substantial changes in the
rules on assignment of errors. The basic procedural rule is
that only errors claimed and assigned by a party will be
considered by the court, except errors affecting its
jurisdiction over the subject matter. To this exception has
now been added errors affecting the validity ofthe judgment
appealed from or the proceedings therein.
Also, even if the error complained of by a party is not
expressly stated in his assignment of errors butthe same is
closely related to or dependent on an assigned error and
properly argued in his brief, such error may now be
considered by the court. These changes are of
jurisprudential origin.
2. The procedure in the Supreme Court being generally the
same as that in the Court of Appeals, unless otherwise
indicated (see Secs. 2 and 4, Rule 56), it has been held that
the latter is clothed with ample authority to review matters,
even if they are not assigned as errors on appeal, if it finds
that their consideration is necessary in arriving at a just
decision of the case. Also, an unassigned error closely
related to an error properly assigned (PCIB vs. CA, et al., L34931, Mar. 18, 1988), or upon which the determination of
the question raised by error properly assigned is dependent,
will be considered by the appellate court notwithstanding

Conformably with the foregoing, the CA is vested with sufficient

authority and discretion to review matters, not assigned as errors
on appeal, if it finds that consideration thereof isnecessary in
arriving at a complete and just resolution of the case or to serve
the interests of justice or to avoid dispensing piecemeal justice.45
In fact, the CA is possessed with inherent authority to review
unassigned errors that are closely related to an error properly
raised, or upon which the determination of the error properly
assigned is dependent, or where it finds that consideration thereof
is necessary in arriving at a just decision of the case.46
It cannot be gainsaid that the validity of the EPs was closely
intertwined with the issue of whether the Dakila property was
covered by the agrarian reform laws. When the CA declared that
the Dakila property came within the coverage of Republic Act No.
6657, the CA barely scraped the surface and left more questions
unresolved rather than writing finison the matter. To recall, this
case originated from the letter of BARC Chairman Enriquez
requesting that the Dakila property be placed under the OLT
pursuant to Presidential Decree No. 27. But, as the petitioner
correctly argues, the two laws, although similarly seeking to
alleviate the plight of landless farmers or farmworkers from the
bondage of tilling the soil, are distinct from each other. Republic Act
No. 6657 is broader in scope than Presidential Decree No. 27, for
the former applies to all agricultural lands in which agricultural
activities are conducted, while the latter requires that the covered
agricultural land betenanted and primarily devoted to rice or corn
cultivation.
In Sigre v. Court of Appeals,47 the Court also stated:
[T]he Court need not belabor the fact that R.A. 6657 or the CARP
Law operates distinctly from P.D. 27. R.A. 6657 covers all public and
private agricultural land including other lands of the public domain

suitable for agriculture as provided for in Proclamation No. 131 and

Executive Order No. 229; while, P.D. 27 covers rice and corn lands.
On this score, E.O. 229, which provides for the mechanism of the
Comprehensive Agrarian Reform Program, specifically states:
"(P)residential Decree No. 27, as amended, shall continue to
operate with respect to rice and corn lands, covered thereunder. x x
x" It cannot be gainsaid, therefore, that R.A. 6657 did notrepeal or
supersede, in any way, P.D. 27. And whatever provisions of P.D. 27
that are not inconsistent with R.A. 6657 shall be suppletory to the
latter, and all rights acquired by the tenant-farmer under P.D. 27
are retainedeven with the passage of R.A. 6657.48
In addition, the tenurial instruments issued to agrarian reform
beneficiaries differ under these laws. Ownership of the beneficiary
under Presidential Decree No. 27 is evidenced by an EP while a
certificate of land ownership award (CLOA) is issued under Republic
Act No. 6657. For this reason, the CA could not have simply set
aside the issue of whether the EPs issued to the respondents were
validly made by the DAR considering its declaration that the Dakila
property was subject to Republic Act No. 6657.
III. The Dakila property was not an agricultural land within the
coverage of R.A.No. 6657 or P.D. No. 27
The CA declared that the Dakila property as an agricultural land;
and that there was no valid reclassification under Municipal
Resolution No. 16-98 because the law required an ordinance, not a
resolution.
We agree in part with the CA.
Under Republic Act No. 7160, local government units, such as the
Municipality of Malolos, Bulacan, are vested with the power to
reclassify lands. However, Section 20, Chapter II, Title I of Republic
Act No. 7160 ordains:
Section 20. Reclassification of Lands. (a) A city or municipality
may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the
reclassification of agricultural lands and provide for the manner of
their utilization or disposition in the following cases: (1) when the
land ceases to be economically feasible and sound for agricultural
purposes as determined by the Department of Agriculture or(2)
where the land shall have substantially greater economic value for

residential, commercial, or industrial purposes, as determined by

the sanggunian concerned: x x x. (Emphasis supplied)
Clearly, an ordinance is required in order to reclassify agricultural
lands, and such may only be passed after the conduct of public
hearings.
The petitioner claims the reclassification on the basis of Municipal
Resolution No. 16-98. Given the foregoing clarifications, however,
the resolution was ineffectual for that purpose. A resolution was a
mere declaration of the sentiment or opinionof the lawmaking body
on a specific matter that was temporary in nature, and differed
from an ordinance in that the latter was a law by itself and
possessed a general and permanent character.49 We also note that
the petitioner did not show if the requisite public hearings were
conducted at all.In the absence of any valid and complete
reclassification,therefore, the Dakila property remained under the
category of an agricultural land.
Nonetheless, the Dakila property was not an agricultural land
subject to the coverage of Republic Act No. 6657 or Presidential
Decree No. 27.
Verily, the basic condition for land tobe placed under the coverage
of Republic Act No. 6657 is that it must either be primarily devoted
to or be suitable for agriculture.50 Perforce, land that is not
devoted to agricultural activity is outside the coverage of Republic
Act No. 6657.51 An agricultural land, according to Republic Act No.
6657, is one that is devoted to agricultural activity and not
classified as mineral, forest, residential, commercial or industrial
land.52 Agricultural activity includes the "cultivation of the soil,
planting of crops, growing of fruit trees, raising livestock, poultry or
fish, including the harvesting of such farm products; and other farm
activities and practices performed by a farmer in conjunction with
such farming operations doneby persons whether natural or
juridical."53
Consequently, before land may be placed under the coverage of
Republic Act No. 6657, two requisites must be met, namely: (1) that
the land must be devoted to agricultural activity; and (2) that the
land must not be classified as mineral, forest, residential,
commercial orindustrial land. Considering that the Dakila property
has not been classified as mineral, forest, residential, commercial
or industrial, the second requisite is satisfied. For the first requisite

tobe met, however, there must be a showing that agricultural

activity is undertaken on the property.

4. Lack of oppositor to the intend[ed] subdivision project on

the properties by its owner;

It is not difficult to see why Republic Act No. 6657 requires

agricultural activity in order to classify land as agricultural. The
spirit of agrarian reform laws is not to distribute lands per se, but to
enable the landless to own land for cultivation. Thisis why the basic
qualification laid down for the intended beneficiary is to show the
willingness, aptitude and ability to cultivate and make the land as
productive as possible.54 This requirement conforms with the
policy direction set in the 1987 Constitution to the effect that
agrarian reform laws shall be founded on the right of the landless
farmers and farmworkers to own, directly or collectively, the lands
they till.55 In Luz Farms v. Secretary of the Department of Agrarian
Reform,56 we even said that the framers of the Constitution limited
agricultural lands to the "arable and suitable agricultural lands."

5. That they are more suitable for residential use

considering their location viz-a-viz (sic) with (sic) the
residential lots in the area.58 (Emphasis supplied)

Here, no evidence was submitted to show that any agricultural

activity like cultivation of the land, planting of crops, growing of
fruit trees, raising of livestock, or poultry or fish, including the
harvesting of such farm products, and other farm activities and
practices were being performed on the Dakila property in order to
subject it to the coverage of Republic Act No. 6657. We take
particular note that the previous tenants had themselves declared
that they were voluntarily surrendering their tenancy rights
because the land was not conducive to farming by reason of its
elevation, among others.57 Also notable is the second Whereas
Clause of Municipal Resolution No. 16-98, which mentioned that the
Dakila property was not fit for agricultural use due to lack of
sufficient irrigation and that it was more suitable for residential use,
thus:
WHEREAS, after an ocular inspection of the subject lots and
matured deliberation, the Sangguniang Bayan found merit in the
request for the following reasons, thus:
1. The properties are untenanted;
2. That they are not fitted [sic] for agricultural use for lack of
sufficient irrigation;
3. There are improvements already introduce[d] on the
property by its owner like construction of subdivision roads;

The terse statement by the OIC-Regional Director that the Dakila

property would still be subject to Republic Act No. 6657 should
Presidential Decree No. 27 be inapplicable59 did not meet the
requirements under Republic Act No. 6657. Section 7 of Republic
Act No. 6657 identified rice and corn lands subject to Presidential
Decree No. 27 for priority distribution in the first phase and
implementation ofthe CARP. Insofar as the interplay of these two
laws was concerned, the Court has said that during the effectivity
of the Republic Act No. 6657and in the event of incomplete
acquisition under Presidential Decree No. 27, the former should
apply, with the provisions of the latter and Executive Order No.
22860 having only suppletory effect.61
Even if we supplemented the provisions of Presidential Decree No.
27, the outcome is still the same, because the Dakila property was
still not within the scope of the law. For land to be covered under
Presidential Decree No. 27, it must be devoted to rice or corn crops,
and there must be a system of share-crop or lease-tenancy
obtaining therein. If either requisite is absent, the land must be
excluded. Hence, exemption from coverage followed when the land
was not devoted to rice or corn even if it was tenanted; or the land
was untenanted even though it was devoted to rice or corn.62
Based on these conditions, the DAR Regional Office erred in
subjecting the Dakila property under the OLT.
The first requirement, that the land be devoted to rice or corn
cultivation, was not sufficiently established. In this regard, the OICRegional Director inaccurately based his holding on the report
submitted by the Legal Services Division that
[P]ortion of the property embraced under TCT No. 103697 with an
area of 2.5611 hectares more or less, was placed under PD [No.] 27
and subsequently an approved survey plan (Psd-03-020270) has
been prepared which was then the basis of the issuance of titles in
favor of Felix Surio and Silvino Manalad under EP Nos. 345262 and
342561. On the other hand, the land subject of this controversy
was, likewise, subdivided and now covered by an approved plan
ASP No. Psd-031410-066532.63

What can be gathered from the report of the Legal Services Division
was that the land owned by the petitioner and covered by
Presidential Decree No. 27 was the Sumapang Matanda property
under TCT No. 103697. As to the Dakila property, we can only infer
from the report that it was merely subdivided. The report did not
mention whatsoever the agricultural activities performed in the
Dakila property. Nor was there a finding that the Dakila property
was devoted to either rice or corn cultivation as to justify its
coverage under Presidential Decree No. 27. Such a finding was
necessary, for the Court has observed in Solmayor v. Arroyo:64
Although this Court will not disregard the evidence presented by
petitioners that the land is devotedto rice and corn crops in 1993,
when the ocular inspection by the DAR personnel was conducted, it
must be noted that around the time of the passage of Presidential
Decree No. 27 up to 1978, when the subject property was placed
under the coverage of Operation Land Transfer, the available
evidence issued and certified by the different government
agencies, closer in time to the mentioned time frame will show that
respondents property has, indeed, been classified as within the
residential and commercial zones of Davao City. It cannot escape
the notice of this Court that more than a decade before the
issuance of the said ocular investigation reportstating that the land
is devoted to agricultural production, government agencies
equipped with the technical expertise to determine the proper
classification of the subject land have already determined that the
land is part of the residential and commercial zones of Davao City
making it suitable for other urban use. Therefore, it is only
reasonable to conclude, based on the certification of various
executive agencies issued when this controversy arose, that at the
time of the passage of Presidential Decree No. 27, respondents
property was not agricultural.65
For land to come within the coverage of the OLT, indeed, there
must be a showing that it is devoted to the cultivation of rice or
corn, and there must be a system of share-crop or lease tenancy
obtaining on October 21, 1972, the time when Presidential Decree
No. 27 took effect.66 Unfortunately, no such evidence was
presented, nor was there any field investigation conducted to verify
whether or not the landholding was primarily devoted to the
cultivation of rice or corn. Accordingly, the Dakila property should
be excluded from the OLT.
The DAR Secretary affirmed the validity of the EPs in favor of the
respondents only "pursuant to the Order of the Regional

Director."67 We note, however, that the evidence to establish in the

proceedings below that they or their predecessors had been
tenants of the petitioners predecessorin-interest to make them the
rightful beneficiaries of the Dakila property was severely wanting.
For tenancy to exist, there must be proof that: (1) the parties are
the landholder and the tenant; (2) the subject is agricultural land;
(3) there is consent; (4) the purpose isagricultural production; (5)
there is consideration;68 and (6) there is a sharing of the harvests.
All these requisites are necessary to create a tenancy relationship,
and the absence of one or more of them will not make the alleged
tenant a de facto tenant.69 Unless a person has established his
status as a de juretenant, he is not entitled to security of tenure;
nor is he covered by the land reform program of the Government
under the existing tenancy laws.70 Here, the consent to establish a
tenant-landlord relationship was manifestly absent. In view of the
petitioners repeated denial of the tenancy, the respondents ought
then to establish the tenancy relationship, but did not do so.
Tenancy could not be presumed, but must be established by
evidence; its mere allegation is neither evidence nor equivalent to
proof of its existence.71
There was also no showing that the respondents were engaged in
any agricultural activities, or agreed with Santiago or the petitioner
on the sharing of harvests. The OIC-Regional Director obviously
disregarded the affidavit of Barangay Captain Felino M. Teodoro of
Dakila, Malolos, Bulacan stating that the respondents were never
the actual farmers on the Dakila property.72
IV. The petitioner was deprived of due process
The petitioner posits that it was denied due process by the failure
of the OIC-Regional Director to see to the compliance withthe
procedures outlined by Republic Act No. 6657 and Presidential
Decree No. 27. It claims that the OIC-Regional Director resorted to
"procedural shortcuts" and irregularities73 in issuing the EPs to the
respondents.
We agree with the petitioners position.
In Reyes v. Barrios,74 we identified the procedural requirements
that must be followed prior to the issuance of an EP, viz:
The Primer on Agrarian Reform enumerates the steps in
transferring the land to the tenant-tiller, thus:

a. First step: the identification of tenants, landowners, and

the land covered by OLT.
b. Second step: land survey and sketching of the actual
cultivation of the tenantto determine parcel size,
boundaries, and possible land use;

d. Certification by the President of the Samahang Nayon or

by the head of farmers' cooperative duly confirmed by the
municipal district officer (MDO) of the Ministry of Local
Government and Community Development (MLGCD) that
the applicant is a full-fledged member of a duly registered
farmers' cooperative or a certification to these effect;

c. Third step: the issuance of the Certificate of Land Transfer

(CLT). To ensure accuracy and safeguard against
falsification, these certificatesare processed at the National
Computer Center (NCC) at Camp Aguinaldo;

e. Copy of the technical (graphical) description of the land

parcel applied for prepared by the Bureau of Land Sketching
Team (BLST) and approved by the regional director of the
Bureau of Lands;

d. Fourth step: valuation of the land covered for

amortization computation;

f. Clearance from the MAR field team (MARFT) or the MAR

District Office (MARDO) legal officer or trial attorney; or in
their absence, a clearance by the MARFT leader to the effect
that the land parcel applied for is not subject of adverse
claim, duly confirmed by the legal officer or trial attorney of
the MAR Regional Office or, in their absence, by the regional
director;

e. Fifth step: amortization payments of tenant-tillers over

fifteen (15) year period; and
f. Sixth step: the issuance of the Emancipation Patent.
Thus, there are several steps to be undertaken before an
Emancipation Patent can be issued. x x x.
xxxx
Furthermore, there are several supporting documents which a
tenant-farmer must submit before he can receive the Emancipation
Patent, such as:
a. Application for issuance of Emancipation Patent;
b. Applicant's (owner's) copy of Certificate of Land Transfer.
c. Certification of the landowner and the Land Bank of the
Philippines that the applicant has tendered full payment of
the parcel of land as described in the application and as
actually tilled by him;

g. Xerox copy of Official Receipts or certification by the

municipal treasurer showing that the applicant has fully paid
or has effected up-to-date payment of the realty taxes due
on the land parcel applied for; and
h. Certification by the MARFT leader whether applicant has
acquired farm machineries from the MAR and/or from other
government agencies.
Majority of these supporting documents are lacking in this case.
Hence, it was improper for the DARAB to order the issuance of the
Emancipation Patent in favor of respondent without the required
supporting documents and without following the requisite
procedure before an Emancipation Patent may be validly issued.75
Furthermore, Section 16 of Republic Act No. 6657 outlines the
procedure in acquiring private lands subject to its coverage, viz:
Section 16. Procedure for Acquisition of Private Lands. - For
purposes of acquisition of private lands, the following procedures
shall be followed:
(a) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the

land to the owners thereof, by personal delivery orregistered

mail, and post the same in a conspicuous place in the
municipal building and barangay hall of the place where the
property is located. Said notice shall contain the offer of the
DAR to pay a corresponding value inaccordance with the
valuation set forth in Sections 17, 18 and other pertinent
provisions hereof.
(b) Within thirty (30) days from the date of receipt of written
notice by personal delivery or registered mail, the
landowners, his administrator or representative shall inform
the DAR of his acceptance or rejection of the former.
(c) If the landowner accepts the offer of the DAR, the Land
Bank of the Philippines shall pay the landowner the
purchase price of the land within thirty (30) days after he
executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other
muniments of title.
(d) In case of rejection or failure to reply, the DAR shall
conduct summary administrative proceedings to determine
the compensation for the land by requiring the landowner,
the LBP and other interested parties to submit evidence as
to the just compensation for the land, within fifteen (15)
days from the receipt of notice. After the expiration of the
above period, the matter is deemed submitted for decision.
The DAR shall decide the case within thirty (30) daysafter it
is submitted for decision.
(e) Upon receipt by the landowner of the corresponding
payment or in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of
the land tothe qualified beneficiaries.
(f) Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final
determination of just compensation.

Under Republic Act No. No. 6657 and DAR A.O. No. 12, Series of
1989, two notices should be sent to the landowner the first, the
notice of coverage; and the other, the notice of acquisition. The
Court cannot consider and declare the proceedings conducted by
the OIC-Regional Director as a substantial compliance with the
notice requirements. Compliance with such requirements, being
necessary to render the implementation of the CARP valid, was
mandatory. As the Court observed in Roxas & Co., Inc. v. Court of
Appeals:76
For a valid implementation of the CAR Program, two notices are
required: (1) the Notice of Coverage and letter of invitation to a
preliminary conference sent to the landowner, the representatives
of the BARC, LBP, farmer beneficiaries and other interested parties
pursuant to DAR A.O. No. 12, Series of 1989; and (2) the Notice of
Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and
the letter of invitation to the conference, and its actual conduct
cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of
the CARL is an exercise of the States police power and the power
of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police
power for the regulation of private property in accordance with the
Constitution. But where, to carry out such regulation, the owners
are deprived of lands they own in excess of the maximum area
allowed, there is also a taking under the power of eminent domain.
The taking contemplated is not a mere limitation of the use of the
land. What is required is the surrender of the title to and physical
possession of the said excess and all beneficial rights accruing to
the owner in favor of the farmer beneficiary. The Bill of Rights
provides that "[n]o person shall be deprived of life, libertyor
property without due process of law." The CARL was not intended to
take away property without due process of law. The exercise of the
power of eminent domain requires that due process be observed in
the taking of private property.
xxxx
Clearly then, the notice requirements under the CARL are not
confined to the Notice of Acquisition set forth in Section 16 of the
law. They also include the Notice of Coverage first laid down in DAR
A. O. No. 12, Series of 1989 and subsequently amended in DAR A.
O. No. 9, Series of 1990 and DAR A. O. No. 1, Series of 1993. This

Notice of Coverage does not merely notify the landowner that his
property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A.
O. No. 9, Series of 1990, that a public hearing shall be conducted
where he and representatives of the concerned sectors of society
may attend to discuss the results of the field investigation, the land
valuation and other pertinent matters. Under DAR A. O. No. 1,
Series of 1993, the Notice of Coverage also informs the landowner
that a field investigation of his landholding shall be conducted
where he and the other representatives may be present.77
(Emphasis supplied)
The procedures provided by Section 16 of Republic Act No. 6657
and its relevant DAR administrative issuances are to ensure the
compliance with the due process requirements of the law. The
result of their non-compliance is to deprive the landowner of its
constitutional right to due process.
The Court has carefully explained in Roxas & Co., Inc. v. Court of
Appeals that the taking under the CARL isan exercise of police
power as well as of eminent domain. The taking of the landholding
by the State effectively results in the surrender by the landowner of
its title and physical possession to the beneficiaries. Hence,
compensation should be given to the landowner prior to the taking.
This is the clear-cut directive of Section 16(e) of Republic Act No.
6657 which mandates the DAR to take immediate possession of the
land only after full payment and to thereafter request the Register
of Deeds to transfer title inthe name of the Republic of the
Philippines, and later on to the intended beneficiaries.
However, there was no evidence of payment prior to the
cancellation of the petitioners TCTs submitted here.1wphi1 The
requirement of prior payment was found in Republic Act No. 6657
and Presidential Decree No. 27, under which full payment by the
intended beneficiary was a condition prior to the award of an EP.
We haveexplicitly pronounced in Corua v. Cinamin78 that the
emancipation of tenants does not come free. The transfer of lands
under Presidential Decree No. 27 remained subject to the terms
and conditions provided in said law. In Paris v. Alfeche,79 we said:
x x x. Section 2 of PD 266 states:
"After the tenant-farmer shall have fully complied with the
requirements for a grant of title under Presidential Decree No. 27,
an Emancipation Patent and/or Grant shall be issued by the

Department of Agrarian Reform on the basis of a duly approved

survey plan."
On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:
"For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the value
of the land shall be equivalent to two and one-half (2 ) times the
average harvest of three normal crop years immediately preceding
the promulgation of this Decree;
"The total cost of the land, including interest at the rate of six (6)
per centum per annum, shall be paid by the tenant in fifteen (15)
years of fifteen (15) equal annual amortizations[.]"
Although, under the law, tenant farmers are already deemed
owners of the land they till, they are still required to pay the cost of
the land, including interest, within fifteen years before the title is
transferred to them.80 (Emphasis supplied)
The unquestioned non-compliance with the procedures set by
Republic Act No. 6657 and its relevant rules and regulations further
denied to the petitioner the exercise of its right of retention.81 In
doing so, the OICRegional Director disregarded this constitutionally
guaranteed right. We cannot understate the value of the right of
retention as the means to mitigate the effects of compulsory land
acquisition by balancing the rights of the landowner and the tenant
and by implementing the doctrine that social justice is not meant to
perpetrate an injustice against the landowner.82
We also consider the manner by which the Dakila property was
apportioned to the respondents highly suspect. It appears from the
face of the EPs that the individual lots were allocated based on how
the landholding was subdivided by the petitioner. Moreover, all the
respondents were awarded lots exceeding three hectares in
violation of Section 23 of Republic Act No. 6657, which provides
that "[n]o qualified beneficiary may own more than three (3)
hectares of agricultural land."
In fine, the order of the OIC-Regional Director was patently null and
void. The denial of due process to the petitioner sufficed to cast the
impress of nullity on the official act thereby taken. A decision
rendered without due process is void ah initio and may be attacked
directly or collaterally.83 All the resulting acts were also null and

void. Consequently, the EPs awarded to the respondents should be

nullified.
WHEREFORE, the Court GRANTS the petition for review on
certiorari; REVERSES and SETS ASIDE the decision promulgated on
July 27, 2011 by the Court of Appeals; REINSTATES the assailed
decision of the Office of the President issued on March 1, 2010;
DIRECTS the cancellaticm of Emancipation Patents No. 00783329,
No. 00783330, No. 0078331, No. 0078332, No. 0078333, and No.
0078334 issued to the respondents for being NULL and VOID; and
ORDERS the respondents to pay the costs of suit.
SO ORDERED.
G.R. No. 162070 October 19, 2005
DEPARTMENT OF AGRARIAN REFORM, represented by
SECRETARY JOSE MARI B. PONCE (OIC), Petitioner
vs.
DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T.
SUTTON, Respondents.
DECISION
PUNO, J.:
This is a petition for review filed by the Department of Agrarian
Reform (DAR) of the Decision and Resolution of the Court of
Appeals, dated September 19, 2003 and February 4, 2004,
respectively, which declared DAR Administrative Order (A.O.) No. 9,
series of 1993, null and void for being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by
respondents which has been devoted exclusively to cow and calf
breeding. On October 26, 1987, pursuant to the then existing
agrarian reform program of the government, respondents made a
voluntary offer to sell (VOS)1 their landholdings to petitioner DAR to
avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657,
also known as the Comprehensive Agrarian Reform Law (CARL) of
1988, took effect. It included in its coverage farms used for raising
livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz
Farms v. Secretary of DAR,2 this Court ruled that lands devoted
to livestock and poultry-raising are not included in the definition of
agricultural land. Hence, we declared as unconstitutional certain
provisions of the CARL insofar as they included livestock farms in
the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner
DAR a formal request to withdraw their VOS as their landholding
was devoted exclusively to cattle-raising and thus exempted from
the coverage of the CARL.3
On December 21, 1992, the Municipal Agrarian Reform Officer of
Aroroy, Masbate, inspected respondents land and found that it was
devoted solely to cattle-raising and breeding. He recommended to
the DAR Secretary that it be exempted from the coverage of the
CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the
withdrawal of their VOS and requested the return of the supporting
papers they submitted in connection therewith. 4 Petitioner ignored
their request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5
which provided that only portions of private agricultural lands used
for the raising of livestock, poultry and swine as of June 15, 1988
shall be excluded from the coverage of the CARL. In determining
the area of land to be excluded, the A.O. fixed the following
retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per
1 head of animal shall be retained by the landowner), and a ratio of
1.7815 hectares for livestock infrastructure for every 21 heads of
cattle shall likewise be excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and
advised him to consider as final and irrevocable the withdrawal of
their VOS as, under the Luz Farms doctrine, their entire
landholding is exempted from the CARL.6

On September 14, 1995, then DAR Secretary Ernesto D. Garilao

issued an Order7 partially granting the application of respondents
for exemption from the coverage of CARL. Applying the retention
limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209
hectares of respondents land for grazing purposes, and a
maximum of 102.5635 hectares for infrastructure. Petitioner
ordered the rest of respondents landholding to be segregated and
placed under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their
entire landholding should be exempted as it is devoted exclusively
to cattle-raising. Their motion was denied.8 They filed a notice of
appeal9 with the Office of the President assailing: (1) the
reasonableness and validity of DAR A.O. No. 9, s. 1993, which
provided for a ratio between land and livestock in determining the
land area qualified for exclusion from the CARL, and (2) the
constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz
Farms case which declared cattle-raising lands excluded from the
coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the
impugned Order of petitioner DAR.10 It ruled that DAR A.O. No. 9, s.
1993, does not run counter to the Luz Farms case as the A.O.
provided the guidelines to determine whether a certain parcel of
land is being used for cattle-raising. However, the issue on the
constitutionality of the assailed A.O. was left for the
determination of the courts as the sole arbiters of such
issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It
declared DAR A.O. No. 9, s. 1993, void for being contrary to the
intent of the 1987 Constitutional Commission to exclude livestock
farms from the land reform program of the government. The
dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No.
09, Series of 1993 is hereby DECLARED null and void. The assailed
order of the Office of the President dated 09 October 2001 in so far
as it affirmed the Department of Agrarian Reforms ruling that
petitioners landholding is covered by the agrarian reform program
of the government is REVERSED and SET ASIDE.

SO ORDERED.11
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR
A.O. No. 9, series of 1993, which prescribes a maximum retention
limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL,
petitioner submits that it issued DAR A.O. No. 9 to limit the area of
livestock farm that may be retained by a landowner pursuant to its
mandate to place all public and private agricultural lands under the
coverage of agrarian reform. Petitioner also contends that the A.O.
seeks to remedy reports that some unscrupulous landowners have
converted their agricultural farms to livestock farms in order to
evade their coverage in the agrarian reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in
nature, i.e., the power to make rules and regulations. They have
been granted by Congress with the authority to issue rules to
regulate the implementation of a law entrusted to them. Delegated
rule-making has become a practical necessity in modern
governance due to the increasing complexity and variety of public
functions. However, while administrative rules and regulations have
the force and effect of law, they are not immune from judicial
review.12 They may be properly challenged before the courts to
ensure that they do not violate the Constitution and no grave abuse
of administrative discretion is committed by the administrative
body concerned.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by
authority of a law and must not contravene the provisions of
the Constitution.13 The rule-making power of an administrative
agency may not be used to abridge the authority given to it by
Congress or by the Constitution. Nor can it be used to enlarge
the power of the administrative agency beyond the scope
intended. Constitutional and statutory provisions control
with respect to what rules and regulations may be

promulgated by administrative agencies and the scope of

their regulations.14
In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock
farms by including them in the coverage of agrarian reform and
prescribing a maximum retention limit for their ownership.
However, the deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia, all
lands exclusively devoted to livestock, swine and poultryraising. The Court clarified in the Luz Farms case that livestock,
swine and poultry-raising are industrial activities and do not fall
within the definition of "agriculture" or "agricultural activity." The
raising of livestock, swine and poultry is different from crop or tree
farming. It is an industrial, not an agricultural, activity. A great
portion of the investment in this enterprise is in the form of
industrial fixed assets, such as: animal housing structures and
facilities, drainage, waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, anti-pollution
equipment like bio-gas and digester plants augmented by lagoons
and concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.15
Clearly, petitioner DAR has no power to regulate livestock
farms which have been exempted by the Constitution from
the coverage of agrarian reform. It has exceeded its power in
issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR16 reiterated
our ruling in the Luz Farms case. In Natalia Realty, the Court
held that industrial, commercial and residential lands are not
covered by the CARL.17 We stressed anew that while Section 4 of
R.A. No. 6657 provides that the CARL shall cover all public
and private agricultural lands, the term "agricultural land"
does not include lands classified as mineral, forest,
residential, commercial or industrial. Thus, in Natalia Realty,
even portions of the Antipolo Hills Subdivision, which are arable
yet still undeveloped, could not be considered as agricultural
lands subject to agrarian reform as these lots were already
classified as residential lands.

A similar logical deduction should be followed in the case at bar.

Lands devoted to raising of livestock, poultry and swine have been
classified as industrial, not agricultural, lands and thus exempt from
agrarian reform. Petitioner DAR argues that, in issuing the
impugned A.O., it was seeking to address the reports it has
received that some unscrupulous landowners have been converting
their agricultural lands to livestock farms to avoid their coverage by
the agrarian reform. Again, we find neither merit nor logic in this
contention. The undesirable scenario which petitioner seeks
to prevent with the issuance of the A.O. clearly does not
apply in this case. Respondents family acquired their
landholdings as early as 1948. They have long been in the business
of breeding cattle in Masbate which is popularly known as the
cattle-breeding capital of the Philippines.18 Petitioner DAR does not
dispute this fact. Indeed, there is no evidence on record that
respondents have just recently engaged in or converted to the
business of breeding cattle after the enactment of the CARL that
may lead one to suspect that respondents intended to evade its
coverage. It must be stressed that what the CARL prohibits is the
conversion of agricultural lands for non-agricultural
purposes after the effectivity of the CARL. There has been no
change of business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the
reenactment of a statute by Congress without substantial change is
an implied legislative approval and adoption of the previous law. On
the other hand, by making a new law, Congress seeks to supersede
an earlier one.19 In the case at bar, after the passage of the 1988
CARL, Congress enacted R.A. No. 788120 which amended certain
provisions of the CARL. Specifically, the new law changed the
definition of the terms "agricultural activity" and
"commercial farming" by dropping from its coverage lands
that are devoted to commercial livestock, poultry and
swine-raising.21 With this significant modification, Congress
clearly sought to align the provisions of our agrarian laws
with the intent of the 1987 Constitutional Commission to
exclude livestock farms from the coverage of agrarian
reform.
In sum, it is doctrinal that rules of administrative bodies must be in
harmony with the provisions of the Constitution. They cannot
amend or extend the Constitution. To be valid, they must conform

to and be consistent with the Constitution. In case of conflict

between an administrative order and the provisions of the
Constitution, the latter prevails.22 The assailed A.O. of petitioner
DAR was properly stricken down as unconstitutional as it enlarges
the coverage of agrarian reform beyond the scope intended by the
1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed
Decision and Resolution of the Court of Appeals, dated September
19, 2003 and February 4, 2004, respectively, are AFFIRMED. No
pronouncement as to costs.

On June 10, 1988, a new agrarian reform law, Republic Act (R.A.)
No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law (CARL), took effect, which included the raising of livestock,
poultry, and swine in its coverage. However, on December 4, 1990,
this Court, sitting en banc, ruled in Luz Farms v. Secretary of the
Department of Agrarian Reform6 that agricultural lands devoted to
livestock, poultry, and/or swine raising are excluded from the
Comprehensive Agrarian Reform Program (CARP).

SO ORDEREd

G.R. No. 182332

Among its pertinent secondary purposes are: (1) to engage in the

raising of cattle, pigs, and other livestock; to acquire lands by
purchase or lease, which may be needed for this purpose; and to
sell and otherwise dispose of said cattle, pigs, and other livestock
and their produce when advisable and beneficial to the corporation;
(2) to breed, raise, and sell poultry; to purchase or acquire and sell,
or otherwise dispose of the supplies, stocks, equipment,
accessories, appurtenances, products, and by-products of said
business; and (3) to import cattle, pigs, and other livestock, and
animal food necessary for the raising of said cattle, pigs, and other
livestock as may be authorized by law.5

February 23, 2011

MILESTONE FARMS, INC., Petitioner,

vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule
45 of the Rules of Civil Procedure, seeking the reversal of the Court
of Appeals (CA) Amended Decision2 dated October 4, 2006 and its
Resolution3 dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with
the Securities and Exchange Commission on January 8, 1960.4

Thus, in May 1993, petitioner applied for the exemption/exclusion

of its 316.0422-hectare property, covered by Transfer Certificate of
Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310,
(T-332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109)
M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay,
Baras, Rizal, from the coverage of the CARL, pursuant to the
aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian
Reform (DAR) issued Administrative Order No. 9, Series of 1993
(DAR A.O. No. 9), setting forth rules and regulations to govern the
exclusion of agricultural lands used for livestock, poultry, and swine
raising from CARP coverage. Thus, on January 10, 1994, petitioner
re-documented its application pursuant to DAR A.O. No. 9. 7
Acting on the said application, the DARs Land Use Conversion and
Exemption Committee (LUCEC) of Region IV conducted an ocular
inspection on petitioners property and arrived at the following
findings:

[T]he actual land utilization for livestock, swine and poultry is

258.8422 hectares; the area which served as infrastructure is
42.0000 hectares; ten (10) hectares are planted to corn and the
remaining five (5) hectares are devoted to fish culture; that the
livestock population are 371 heads of cow, 20 heads of horses,
5,678 heads of swine and 788 heads of cocks; that the area being
applied for exclusion is far below the required or ideal area which is
563 hectares for the total livestock population; that the
approximate area not directly used for livestock purposes with an
area of 15 hectares, more or less, is likewise far below the
allowable 10% variance; and, though not directly used for livestock
purposes, the ten (10) hectares planted to sweet corn and the five
(5) hectares devoted to fishpond could be considered supportive to
livestock production.
The LUCEC, thus, recommended the exemption of petitioners
316.0422-hectare property from the coverage of CARP. Adopting
the LUCECs findings and recommendation, DAR Regional Director
Percival Dalugdug (Director Dalugdug) issued an Order dated June
27, 1994, exempting petitioners 316.0422-hectare property from
CARP.8
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc.
(Pinugay Farmers), represented by Timiano Balajadia, Sr.
(Balajadia), moved for the reconsideration of the said Order, but
the same was denied by Director Dalugdug in his Order dated
November 24, 1994.9 Subsequently, the Pinugay Farmers filed a
letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for
Forcible Entry against Balajadia and company before the Municipal
Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil
Case No. 781-T.10 The MCTC ruled in favor of petitioner, but the
decision was later reversed by the Regional Trial Court, Branch 80,
of Tanay, Rizal. Ultimately, the case reached the CA, which, in its
Decision11 dated October 8, 1999, reinstated the MCTCs ruling,
ordering Balajadia and all defendants therein to vacate portions of
the property covered by TCT Nos. M-6013, M-8796, and M-8791. In
its Resolution12 dated July 31, 2000, the CA held that the
defendants therein failed to timely file a motion for reconsideration,
given the fact that their counsel of record received its October 8,
1999 Decision; hence, the same became final and executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, 13
which was approved on February 20, 1995. Private agricultural
lands devoted to livestock, poultry, and swine raising were
excluded from the coverage of the CARL. On October 22, 1996, the
fact-finding team formed by the DAR Undersecretary for Field
Operations and Support Services conducted an actual headcount of
the livestock population on the property. The headcount showed
that there were 448 heads of cattle and more than 5,000 heads of
swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao
(Secretary Garilao) issued an Order exempting from CARP only
240.9776 hectares of the 316.0422 hectares previously exempted
by Director Dalugdug, and declaring 75.0646 hectares of the
property to be covered by CARP.14
Secretary Garilao opined that, for private agricultural lands to be
excluded from CARP, they must already be devoted to livestock,
poultry, and swine raising as of June 15, 1988, when the CARL took
effect. He found that the Certificates of Ownership of Large Cattle
submitted by petitioner showed that only 86 heads of cattle were
registered in the name of petitioners president, Misael Vera, Jr.,
prior to June 15, 1988; 133 were subsequently bought in 1990,
while 204 were registered from 1992 to 1995. Secretary Garilao
gave more weight to the certificates rather than to the headcount
because "the same explicitly provide for the number of cattle
owned by petitioner as of June 15, 1988."
Applying the animal-land ratio (1 hectare for grazing for every head
of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815
hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare
for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao
exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15
June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815
hectares for every 21 heads of cattle;

3. 8 hectares for the 8 horses;

4. 0.3809 square meters of infrastructure for the 8 horses;
[and]
5. 138.5967 hectares for the 5,678 heads of swine.15
Petitioner filed a Motion for Reconsideration,16 submitting therewith
copies of Certificates of Transfer of Large Cattle and additional
Certificates of Ownership of Large Cattle issued to petitioner prior
to June 15, 1988, as additional proof that it had met the required
animal-land ratio. Petitioner also submitted a copy of a
Disbursement Voucher dated December 17, 1986, showing the
purchase of 100 heads of cattle by the Bureau of Animal Industry
from petitioner, as further proof that it had been actively operating
a livestock farm even before June 15, 1988. However, in his Order
dated April 15, 1997, Secretary Garilao denied petitioners Motion
for Reconsideration.17
Aggrieved, petitioner filed its Memorandum on Appeal18 before the
Office of the President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision19 reinstating
Director Dalugdugs Order dated June 27, 1994 and declared the
entire 316.0422-hectare property exempt from the coverage of
CARP.
However, on separate motions for reconsideration of the aforesaid
decision filed by farmer-groups Samahang Anak-Pawis ng Lagundi
(SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal
Assistance of DAR, the OP issued a resolution20 dated September
16, 2002, setting aside its previous decision. The dispositive portion
of the OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions
for reconsideration is hereby SET ASIDE and a new one entered
REINSTATING the Order dated 21 January 1997 of then DAR
Secretary Ernesto D. Garilao, as reiterated in another Order of 15
April 1997, without prejudice to the outcome of the continuing
review and verification proceedings that DAR, thru the appropriate

Municipal Agrarian Reform Officer, may undertake pursuant to Rule

III (D) of DAR Administrative Order No. 09, series of 1993.
SO ORDERED.21
The OP held that, when it comes to proof of ownership, the
reference is the Certificate of Ownership of Large Cattle.
Certificates of cattle ownership, which are readily available being
issued by the appropriate government office ought to match the
number of heads of cattle counted as existing during the actual
headcount. The presence of large cattle on the land, without
sufficient proof of ownership thereof, only proves such presence.
Taking note of Secretary Garilaos observations, the OP also held
that, before an ocular investigation is conducted on the property,
the landowners are notified in advance; hence, mere reliance on
the physical headcount is dangerous because there is a possibility
that the landowners would increase the number of their cattle for
headcount purposes only. The OP observed that there was a big
variance between the actual headcount of 448 heads of cattle and
only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA.22
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary
evidence presented, the property subject of the application for
exclusion had more than satisfied the animal-land and
infrastructure-animal ratios under DAR A.O. No. 9. The CA also
found that petitioner applied for exclusion long before the
effectivity of DAR A.O. No. 9, thus, negating the claim that
petitioner merely converted the property for livestock, poultry, and
swine raising in order to exclude it from CARP coverage. Petitioner
was held to have actually engaged in the said business on the
property even before June 15, 1988. The CA disposed of the case in
this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed
Resolution of the Office of the President dated September 16, 2002
is hereby SET ASIDE, and its Decision dated February 4, 2000
declaring the entire 316.0422 hectares exempt from the coverage

of the Comprehensive Agrarian Reform Program is hereby

REINSTATED without prejudice to the outcome of the continuing
review and verification proceedings which the Department of
Agrarian Reform, through the proper Municipal Agrarian Reform
Officer, may undertake pursuant to Policy Statement (D) of DAR
Administrative Order No. 9, Series of 1993.
SO ORDERED.23
Meanwhile, six months earlier, or on November 4, 2004, without
the knowledge of the CA as the parties did not inform the
appellate court then DAR Secretary Rene C. Villa (Secretary Villa)
issued DAR Conversion Order No. CON-0410-001624 (Conversion
Order), granting petitioners application to convert portions of the
316.0422-hectare property from agricultural to residential and golf
courses use. The portions converted with a total area of 153.3049
hectares were covered by TCT Nos. M-15755 (T-332694), M-15751
(T-274129), and M-15750 (T-410434). With this Conversion Order,
the area of the property subject of the controversy was effectively
reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration
were filed by farmer-groups, namely: the farmers represented by
Miguel Espinas25 (Espinas group), the Pinugay Farmers,26 and the
SAPLAG.27 The farmer-groups all claimed that the CA should have
accorded respect to the factual findings of the OP. Moreover, the
farmer-groups unanimously intimated that petitioner already
converted and developed a portion of the property into a leisureresidential-commercial estate known as the Palo Alto Leisure and
Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration
on Newly Secured Evidence pursuant to DAR Administrative Order
No. 9, Series of 199328 (Supplement) dated June 15, 2005, the
Espinas group submitted the following as evidence:
1) Conversion Order29 dated November 4, 2004, issued by
Secretary Villa, converting portions of the property from
agricultural to residential and golf courses use, with a total
area of 153.3049 hectares; thus, the Espinas group prayed
that the remaining 162.7373 hectares (subject property) be
covered by the CARP;

2) Letter30 dated June 7, 2005 of both incoming Municipal

Agrarian Reform Officer (MARO) Bismark M. Elma (MARO
Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of
Baras, Rizal, addressed to Provincial Agrarian Reform Officer
(PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report),
informing the latter, among others, that Palo Alto was
already under development and the lots therein were being
offered for sale; that there were actual tillers on the subject
property; that there were agricultural improvements
thereon, including an irrigation system and road projects
funded by the Government; that there was no existing
livestock farm on the subject property; and that the same
was not in the possession and/or control of petitioner; and
3) Certification31 dated June 8, 2005, issued by both MARO
Elma and MARO Celi, manifesting that the subject property
was in the possession and cultivation of actual occupants
and tillers, and that, upon inspection, petitioner maintained
no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their
respective Manifestations.32 In its Manifestation dated November
29, 2005, the DAR confirmed that the subject property was no
longer devoted to cattle raising. Hence, in its Resolution33 dated
December 21, 2005, the CA directed petitioner to file its comment
on the Supplement and the aforementioned Manifestations.
Employing the services of a new counsel, petitioner filed a Motion
to Admit Rejoinder,34 and prayed that the MARO Report be
disregarded and expunged from the records for lack of factual and
legal basis.
With the CA now made aware of these developments, particularly
Secretary Villas Conversion Order of November 4, 2004, the
appellate court had to acknowledge that the property subject of the
controversy would now be limited to the remaining 162.7373
hectares. In the same token, the Espinas group prayed that this
remaining area be covered by the CARP.35
On October 4, 2006, the CA amended its earlier Decision. It held
that its April 29, 2005 Decision was theoretically not final because
DAR A.O. No. 9 required the MARO to make a continuing review and
verification of the subject property. While the CA was cognizant of

our ruling in Department of Agrarian Reform v. Sutton, 36 wherein we

declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift
the exemption of the subject property from the CARP, not on the
basis of DAR A.O. No. 9, but on the strength of evidence such as the
MARO Report and Certification, and the Katunayan37 issued by the
Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay,
Baras, Rizal, showing that the subject property was no longer
operated as a livestock farm. Moreover, the CA held that the lease
agreements,38 which petitioner submitted to prove that it was
compelled to lease a ranch as temporary shelter for its cattle, only
reinforced the DARs finding that there was indeed no existing
livestock farm on the subject property. While petitioner claimed that
it was merely forced to do so to prevent further slaughtering of its
cattle allegedly committed by the occupants, the CA found the
claim unsubstantiated. Furthermore, the CA opined that petitioner
should have asserted its rights when the irrigation and road
projects were introduced by the Government within its property.
Finally, the CA accorded the findings of MARO Elma and MARO Celi
the presumption of regularity in the performance of official
functions in the absence of evidence proving misconduct and/or
dishonesty when they inspected the subject property and rendered
their report. Thus, the CA disposed:

reinvestigation, designated personnel of the DAR Provincial and

Regional Offices (Investigating Team) conducted another ocular
inspection on the subject property on February 20, 2007. The
Investigating Team, in its Report42 dated February 21, 2007, found
that, per testimony of petitioners caretaker, Rogelio Ludivices
(Roger),43 petitioner has 43 heads of cattle taken care of by the
following individuals: i) Josefino Custodio (Josefino) 18 heads; ii)
Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that these
individuals pastured the herd of cattle outside the subject property,
while Roger took care of 8 heads of cattle inside the Palo Alto area;
that 21 heads of cattle owned by petitioner were seen in the area
adjacent to Palo Alto; that Josefino confirmed to the Investigating
Team that he takes care of 18 heads of cattle owned by petitioner;
that the said Investigating Team saw 9 heads of cattle in the Palo
Alto area, 2 of which bore "MFI" marks; and that the 9 heads of
cattle appear to have matched the Certificates of Ownership of
Large Cattle submitted by petitioner.

WHEREFORE, this Courts Decision dated April 29, 2005 is hereby

amended in that the exemption of the subject landholding from the
coverage of the Comprehensive Agrarian Reform Program is hereby
lifted, and the 162.7373 hectare-agricultural portion thereof is
hereby declared covered by the Comprehensive Agrarian Reform
Program.

On May 17, 2007, [petitioner] presented the Judicial Affidavits of its

witnesses, namely, [petitioners] counsel, [Atty. Que], and the
alleged caretaker of [petitioners] farm, [Roger], who were both
cross-examined by counsel for farmers-movants and SAPLAG.
[Petitioner] and SAPLAG then marked their documentary exhibits.

SO ORDERED.39
Unperturbed, petitioner filed a Motion for Reconsideration. 40 On
January 8, 2007, MARO Elma, in compliance with the Memorandum
of DAR Regional Director Dominador B. Andres, tendered another
Report41 reiterating that, upon inspection of the subject property,
together with petitioners counsel-turned witness, Atty. Grace Eloisa
J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and
several occupants thereof, he, among others, found no livestock
farm within the subject property. About 43 heads of cattle were
shown, but MARO Elma observed that the same were inside an area
adjacent to Palo Alto. Subsequently, upon Atty. Ques request for

Because of the contentious factual issues and the conflicting

averments of the parties, the CA set the case for hearing and
reception of evidence on April 24, 2007.44 Thereafter, as narrated
by the CA, the following events transpired:

On May 24, 2007, [petitioners] security guard and third witness,

Rodolfo G. Febrada, submitted his Judicial Affidavit and was crossexamined by counsel for fa[r]mers-movants and SAPLAG. Farmersmovants also marked their documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of
Evidence. Farmers-movants and SAPLAG filed their objections to
[petitioners] Formal Offer of Evidence. Later, [petitioner] and
farmers-movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the parties
offer of evidence and considered [petitioners] Motion for
Reconsideration submitted for resolution. 45

Finally, petitioners motion for reconsideration was denied by the

CA in its Resolution46 dated March 27, 2008. The CA discarded
petitioners reliance on Sutton. It ratiocinated that the MARO
Reports and the DARs Manifestation could not be disregarded
simply because DAR A.O. No. 9 was declared unconstitutional. The
Sutton ruling was premised on the fact that the Sutton property
continued to operate as a livestock farm. The CA also reasoned
that, in Sutton, this Court did not remove from the DAR the power
to implement the CARP, pursuant to the latters authority to
oversee the implementation of agrarian reform laws under Section
5047 of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle which
are being cared for and pastured by 4 individuals. To prove its
ownership of the said cattle, petitioner-appellant offered in
evidence 43 Certificates of Ownership of Large Cattle. Significantly,
however, the said Certificates were all dated and issued on
November 24, 2006, nearly 2 months after this Court rendered its
Amended Decision lifting the exemption of the 162-hectare portion
of the subject landholding. The acquisition of such cattle after the
lifting of the exemption clearly reveals that petitioner-appellant was
no longer operating a livestock farm, and suggests an effort to
create a semblance of livestock-raising for the purpose of its Motion
for Reconsideration.48
On petitioners assertion that between MARO Elmas Report dated
January 8, 2007 and the Investigating Teams Report, the latter
should be given credence, the CA held that there were no material
inconsistencies between the two reports because both showed that
the 43 heads of cattle were found outside the subject property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK
FARMING WITHIN THE MEANING OF LUZ FARMS AND
SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS
CONTINUING VERIFICATION AS TO USE, AND, ON THE BASIS
OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO

AGRICULTURAL CLASSIFICATION AND COMPULSORY

ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO
REVERTED TO AGRICULTURAL CLASSIFICATION, STILL THE
PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE
EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE
WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL
ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW
PROCESSES, AND NOT TO THE COURT OF APPEALS
EXERCISING APPELLATE JURISDICTION OVER ISSUES
COMPLETELY UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT HELD
THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED
FOR LIVESTOCK FARMING.49
Petitioner asseverates that lands devoted to livestock farming as of
June 15, 1988 are classified as industrial lands, hence, outside the
ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881
clearly excluded such lands on constitutional grounds; that
petitioners lands were actually devoted to livestock even before
the enactment of the CARL; that livestock farms are exempt from
the CARL, not by reason of any act of the DAR, but because of their
nature as industrial lands; that petitioners property was admittedly
devoted to livestock farming as of June 1988 and the only issue
before was whether or not petitioners pieces of evidence comply
with the ratios provided under DAR A.O. No. 9; and that DAR A.O.
No. 9 having been declared as unconstitutional, DAR had no more
legal basis to conduct a continuing review and verification
proceedings over livestock farms. Petitioner argues that, in cases
where reversion of properties to agricultural use is proper, only the
DAR has the exclusive original jurisdiction to hear and decide the
same; hence, the CA, in this case, committed serious errors when it
ordered the reversion of the property and when it considered
pieces of evidence not existing as of June 15, 1988, despite its lack
of jurisdiction; that the CA should have remanded the case to the

DAR due to conflicting factual claims; that the CA cannot ventilate

allegations of fact that were introduced for the first time on appeal
as a supplement to a motion for reconsideration of its first decision,
use the same to deviate from the issues pending review, and, on
the basis thereof, declare exempt lands reverted to agricultural use
and compulsorily covered by the CARP; that the "newly discovered
[pieces of] evidence" were not introduced in the proceedings before
the DAR, hence, it was erroneous for the CA to consider them; and
that piecemeal presentation of evidence is not in accord with
orderly justice. Finally, petitioner submits that, in any case, the CA
gravely erred and committed grave abuse of discretion when it held
that the subject property was no longer used for livestock farming
as shown by the Report of the Investigating Team. Petitioner relies
on the 1997 LUCEC and DAR findings that the subject property was
devoted to livestock farming, and on the 1999 CA Decision which
held that the occupants of the property were squatters, bereft of
any authority to stay and possess the property.50
On one hand, the farmer-groups, represented by the Espinas group,
contend that they have been planting rice and fruit-bearing trees
on the subject property, and helped the National Irrigation
Administration in setting up an irrigation system therein in 1997,
with a produce of 1,500 to 1,600 sacks of palay each year; that
petitioner came to court with unclean hands because, while it
sought the exemption and exclusion of the entire property,
unknown to the CA, petitioner surreptitiously filed for conversion of
the property now known as Palo Alto, which was actually granted
by the DAR Secretary; that petitioners bad faith is more apparent
since, despite the conversion of the 153.3049-hectare portion of
the property, it still seeks to exempt the entire property in this
case; and that the fact that petitioner applied for conversion is an
admission that indeed the property is agricultural. The farmergroups also contend that petitioners reliance on Luz Farms and
Sutton is unavailing because in these cases there was actually no
cessation of the business of raising cattle; that what is being
exempted is the activity of raising cattle and not the property itself;
that exemptions due to cattle raising are not permanent; that the
declaration of DAR A.O. No. 9 as unconstitutional does not at all
diminish the mandated duty of the DAR, as the lead agency of the
Government, to implement the CARL; that the DAR, vested with the
power to identify lands subject to CARP, logically also has the
power to identify lands which are excluded and/or exempted

therefrom; that to disregard DARs authority on the matter would

open the floodgates to abuse and fraud by unscrupulous
landowners; that the factual finding of the CA that the subject
property is no longer a livestock farm may not be disturbed on
appeal, as enunciated by this Court; that DAR conducted a review
and monitoring of the subject property by virtue of its powers under
the CARL; and that the CA has sufficient discretion to admit
evidence in order that it could arrive at a fair, just, and equitable
ruling in this case.51
On the other hand, respondent OP, through the Office of the
Solicitor General (OSG), claims that the CA correctly held that the
subject property is not exempt from the coverage of the CARP, as
substantial pieces of evidence show that the said property is not
exclusively devoted to livestock, swine, and/or poultry raising; that
the issues presented by petitioner are factual in nature and not
proper in this case; that under Rule 43 of the 1997 Rules of Civil
Procedure, questions of fact may be raised by the parties and
resolved by the CA; that due to the divergence in the factual
findings of the DAR and the OP, the CA was duty bound to review
and ascertain which of the said findings are duly supported by
substantial evidence; that the subject property was subject to
continuing review and verification proceedings due to the then
prevailing DAR A.O. No. 9; that there is no question that the power
to determine if a property is subject to CARP coverage lies with the
DAR Secretary; that pursuant to such power, the MARO rendered
the assailed reports and certification, and the DAR itself manifested
before the CA that the subject property is no longer devoted to
livestock farming; and that, while it is true that this Courts ruling in
Luz Farms declared that agricultural lands devoted to livestock,
poultry, and/or swine raising are excluded from the CARP, the said
ruling is not without any qualification. 52
In its Reply53 to the farmer-groups and to the OSGs comment,
petitioner counters that the farmer-groups have no legal basis to
their claims as they admitted that they entered the subject
property without the consent of petitioner; that the rice plots
actually found in the subject property, which were subsequently
taken over by squatters, were, in fact, planted by petitioner in
compliance with the directive of then President Ferdinand Marcos
for the employer to provide rice to its employees; that when a land
is declared exempt from the CARP on the ground that it is not

agricultural as of the time the CARL took effect, the use and
disposition of that land is entirely and forever beyond DARs
jurisdiction; and that, inasmuch as the subject property was not
agricultural from the very beginning, DAR has no power to regulate
the same. Petitioner also asserts that the CA cannot
uncharacteristically assume the role of trier of facts and resolve
factual questions not previously adjudicated by the lower tribunals;
that MARO Elma rendered the assailed MARO reports with bias
against petitioner, and the same were contradicted by the
Investigating Teams Report, which confirmed that the subject
property is still devoted to livestock farming; and that there has
been no change in petitioners business interest as an entity
engaged in livestock farming since its inception in 1960, though
there was admittedly a decline in the scale of its operations due to
the illegal acts of the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision
that continuing review and verification may be conducted by the
DAR pursuant to DAR A.O. No. 9, the latter was not yet declared
unconstitutional by this Court. The first CA Decision was
promulgated on April 29, 2005, while this Court struck down as
unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19,
2005. Likewise, let it be emphasized that the Espinas group filed
the Supplement and submitted the assailed MARO reports and
certification on June 15, 2005, which proved to be adverse to
petitioners case. Thus, it could not be said that the CA erred or
gravely abused its discretion in respecting the mandate of DAR A.O.
No. 9, which was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the
complaint nor raised during the trial cannot be raised for the first
time on appeal as it would be offensive to the basic rules of fair
play, justice, and due process,54 the same is not without
exception,55 such as this case. The CA, under Section 3,56 Rule 43 of
the Rules of Civil Procedure, can, in the interest of justice, entertain
and resolve factual issues. After all, technical and procedural rules
are intended to help secure, and not suppress, substantial justice. A
deviation from a rigid enforcement of the rules may thus be

allowed to attain the prime objective of dispensing justice, for

dispensation of justice is the core reason for the existence of
courts.57 Moreover, petitioner cannot validly claim that it was
deprived of due process because the CA afforded it all the
opportunity to be heard.58 The CA even directed petitioner to file its
comment on the Supplement, and to prove and establish its claim
that the subject property was excluded from the coverage of the
CARP. Petitioner actively participated in the proceedings before the
CA by submitting pleadings and pieces of documentary evidence,
such as the Investigating Teams Report and judicial affidavits. The
CA also went further by setting the case for hearing. In all these
proceedings, all the parties rights to due process were amply
protected and recognized.
With the procedural issue disposed of, we find that petitioners
arguments fail to persuade. Its invocation of Sutton is unavailing. In
Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock
farms by including them in the coverage of agrarian reform and
prescribing a maximum retention limit for their ownership.
However, the deliberations of the 1987 Constitutional Commission
show a clear intent to exclude, inter alia, all lands exclusively
devoted to livestock, swine and poultry-raising. The Court
clarified in the Luz Farms case that livestock, swine and poultryraising are industrial activities and do not fall within the definition
of "agriculture" or "agricultural activity." The raising of livestock,
swine and poultry is different from crop or tree farming. It is an
industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed
assets, such as: animal housing structures and facilities, drainage,
waterers and blowers, feedmill with grinders, mixers, conveyors,
exhausts and generators, extensive warehousing facilities for feeds
and other supplies, anti-pollution equipment like bio-gas and
digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses, sprayers, and other
technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms
which have been exempted by the Constitution from the coverage

of agrarian reform. It has exceeded its power in issuing the assailed

A.O.59
Indeed, as pointed out by the CA, the instant case does not rest on
facts parallel to those of Sutton because, in Sutton, the subject
property remained a livestock farm. We even highlighted therein
the fact that "there has been no change of business interest in the
case of respondents."60 Similarly, in Department of Agrarian Reform
v. Uy,61 we excluded a parcel of land from CARP coverage due to
the factual findings of the MARO, which were confirmed by the DAR,
that the property was entirely devoted to livestock farming.
However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z.
Arnaiz v. Office of the President; Department of Agrarian Reform;
Regional Director, DAR Region V, Legaspi City; Provincial Agrarian
Reform Officer, DAR Provincial Office, Masbate, Masbate; and
Municipal Agrarian Reform Officer, DAR Municipal Office, Masbate,
Masbate,62 we denied a similar petition for exemption and/or
exclusion, by according respect to the CAs factual findings and its
reliance on the findings of the DAR and the OP that
the subject parcels of land were not directly, actually, and
exclusively used for pasture.63
Petitioners admission that, since 2001, it leased another ranch for
its own livestock is fatal to its cause.64 While petitioner advances a
defense that it leased this ranch because the occupants of the
subject property harmed its cattle, like the CA, we find it surprising
that not even a single police and/or barangay report was filed by
petitioner to amplify its indignation over these alleged illegal acts.
Moreover, we accord respect to the CAs keen observation that the
assailed MARO reports and the Investigating Teams Report do not
actually contradict one another, finding that the 43 cows, while
owned by petitioner, were actually pastured outside the subject
property.
Finally, it is established that issues of Exclusion and/or Exemption
are characterized as Agrarian Law Implementation (ALI) cases
which are well within the DAR Secretarys competence and
jurisdiction.65 Section 3, Rule II of the 2003 Department of Agrarian
Reform Adjudication Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.

The Adjudicator or the Board shall have no jurisdiction over matters

involving the administrative implementation of RA No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law
(CARL) of 1988 and other agrarian laws as enunciated by pertinent
rules and administrative orders, which shall be under the exclusive
prerogative of and cognizable by the Office of the Secretary of the
DAR in accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used for
livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the
DAR Secretary of his legal mandate to exercise jurisdiction and
authority over all ALI cases. To succumb to petitioners contention
that "when a land is declared exempt from the CARP on the ground
that it is not agricultural as of the time the CARL took effect, the
use and disposition of that land is entirely and forever beyond
DARs jurisdiction" is dangerous, suggestive of self-regulation.
Precisely, it is the DAR Secretary who is vested with such
jurisdiction and authority to exempt and/or exclude a property from
CARP coverage based on the factual circumstances of each case
and in accordance with law and applicable jurisprudence. In
addition, albeit parenthetically, Secretary Villa had already granted
the conversion into residential and golf courses use of nearly onehalf of the entire area originally claimed as exempt from CARP
coverage because it was allegedly devoted to livestock
production.lawphil1
In sum, we find no reversible error in the assailed Amended
Decision and Resolution of the CA which would warrant the
modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals
Amended Decision dated October 4, 2006 and Resolution dated
March 27, 2008 are AFFIRMED. No costs.

G.R. No. 159089

May 3, 2006ISLANDERS CARPFARMERS BENEFICIARIES MULTI-PURPOSE COOPERATIVE,
INC., Petitioner,
vs.
LAPANDAY AGRICULTURAL AND DEVELOPMENT
CORPORATION, Respondent.
DECISION
PANGANIBAN, CJ:
The Department of Agrarian Reform Adjudication Board (DARAB)
has jurisdiction to determine and adjudicate all agrarian disputes
involving the implementation of the Comprehensive Agrarian
Reform Law (CARL). Included in the definition of agrarian disputes
are those arising from other tenurial arrangements beyond the
traditional landowner-tenant or lessor-lessee relationship.
Expressly, these arrangements are recognized by Republic Act
6657 as essential parts of agrarian reform. Thus, the DARAB has
jurisdiction over disputes arising from the instant Joint Production
Agreement entered into by the present parties.
The Case
1

Before us is a Petition for Review under Rule 45 of the Rules of

Court, seeking to reverse the June 30, 2003 Decision2 of the Court
of Appeals (CA) in CA-GR CV No. 65498. The assailed Decision
disposed as follows:
"WHEREFORE, premises considered, the appealed decision dated
October 18, 1999 dismissing the complaint filed by [petitioner]
issued by the Regional Trial Court of Tagum City, Branch 1, is
hereby AFFIRMED."3

"Almost three years after, on April 2, 1996, [petitioner],

represented by its alleged chairman, Manuel K. Asta, filed a
complaint [with the RTC] for Declaration of Nullity, Mandamus,
Damages, with prayer for Preliminary Injunction against
[respondent], the alleged x x x officers [of petitioner] who entered
into the agreement, and the Provincial Agrarian Reform Office of
Davao (hereinafter PARO), represented by Saturnino D. Sibbaluca.
[Petitioner] subsequently filed an amended complaint with leave of
court alleging that the persons, who executed the contract were
not authorized by it.
"[Respondent] then filed a Motion to Dismiss on April 18, 1996 x x
x, stating that the Department of Agrarian Reform Adjudication
Board (hereinafter DARAB) has primary, exclusive, and original
jurisdiction; that [petitioner] failed to comply with the compulsory
mediation and conciliation proceedings at the barangay level; and
for the unauthorized institution of the complaint in behalf of
[petitioner]. [Respondent] also averred that [petitioner] was
engaged in forum shopping because [it] also filed a petition before
the Department of Agrarian Reform praying for the disapproval of
the Joint Production Agreement. x x x PARO also filed a motion to
dismiss on May 16, 1996.
"On August 21, 1996, [respondent] then filed a case at the DARAB
for Breach of Contract, Specific Performance, Injunction with
Restraining Order, Damages and Attorneys Fees. On February 25,
1997, the DARAB decided the case in favor of [respondent]
declaring the Joint Production Agreement as valid and binding and
ordering [petitioner] to account for the proceeds of the produce and
to comply with the terms of the contract.
"The [RTC] then issued [its] decision on October 18, 1999.

The Facts

"[Petitioner], before [the CA], rais[ed] the following errors on

appeal:

The facts of the case are narrated by the CA in this wise:

"On March 8, 1993, a certain Ramon Cajegas entered into a Joint

Production Agreement for Islanders Carp-Farmer Beneficiaries MultiPurpose Cooperative, Inc. [petitioner] with Lapanday Agricultural
and Development Corporation [respondent].

THE [RTC] GRAVELY ERRED IN DISMISSING THE CASE AT BAR ON

THE GROUND OF LACK OF JURISDICTION.
II

THE [RTC] GRAVELY ERRED IN NOT DECLARING THE JOINT

PRODUCTION AGREEMENT AS NULL AND VOID AB INITIO"4

"Whether or not x x x the x x x Court of Appeals gravely

erred in holding that the Joint Production Agreement is a
leasehold contract and therefore valid.

Ruling of the Court of Appeals

"IV
Finding the relationship between the parties to be an agricultural
leasehold, the CA held that the issue fell squarely within the
jurisdiction of the DARAB. Hence, the appellate court ruled that the
RTC had correctly dismissed the Complaint filed by petitioner.

"Whether or not x x x the x x x Court of Appeals gravely

erred in interpreting and applying the prevailing doctrines
and jurisprudence delineating the jurisdiction between the
regular court and DARAB on the matter of agricultural land
and tenancy relationship."6

Moreover, being in the nature of an agricultural leasehold and not a

shared tenancy, the Joint Production Agreement entered into by the
parties was deemed valid by the CA. The agreement could not be
considered contrary to public policy, simply because one of the
parties was a corporation.

Simply put, the question to be resolved by the Court is this: which

of the various government agencies has jurisdiction over the
controversy?

Hence, this Petition.5

The Courts Ruling

Issues

The Petition has no merit.1avvphil.net

Petitioner raises the following issues for the Courts consideration:

Sole Issue:

"I

Jurisdiction

"Whether or not x x x the x x x Court of Appeals gravely

erred in affirming the dismissal of the case at bench by RTC
of Tagum City on the ground that it has no jurisdiction over
the subject matter and nature of the suit.

Section 50 of Republic Act 66577 and Section 17 of Executive Order

2298 vests in the Department of Agrarian Reform (DAR) the primary
and exclusive jurisdiction, both original and appellate, to determine
and adjudicate all matters involving the implementation of agrarian
reform.9 Through Executive Order 129-A,10 the President of the
Philippines created the DARAB and authorized it to assume the
powers and functions of the DAR pertaining to the adjudication of
agrarian reform cases.11

"II
"Whether or not x x x the x x x Court of Appeals gravely
erred in finding that the Joint Production Agreement is valid
instead of declaring it as null and void ab initio, its
provisions, terms and condition, cause and purposes being
violative of [t]he express mandatory provision of R.A. 6657.
"III

Moreover, Rule II of the Revised Rules of the DARAB provides as

follows:
"Section 1. Primary and Exclusive Original and Appellate
Jurisdiction. -- The Board shall have primary and exclusive
jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the
Comprehensive Agrarian Reform Program (CARP) under Republic

Act No. 6657, Executive Order Nos. 228 and 129-A, Republic Act No.
3844 as amended by Republic Act No. 6389, Presidential Decree
No. 27 and other agrarian laws and their implementing rules and
regulations. Specifically, such jurisdiction shall include but not be
limited to cases involving the following:
a) The rights and obligations of persons, whether natural or
juridical, engaged in the management, cultivation and use of all
agricultural lands covered by the CARP and other agrarian laws[.]" 12
The subject matter of the present controversy falls squarely within
the jurisdiction of the DARAB. In question are the rights and
obligations of two juridical persons engaged in the management,
cultivation and use of agricultural land acquired through the
Comprehensive Agrarian Reform Program (CARP) of the
government.
Petitioner contends that, there being no tenancy or leasehold
relationship between the parties, this case does not constitute an
agrarian dispute that falls within the DARABs jurisdiction. 13
We clarify. To prove tenancy or an agricultural leasehold agreement,
it is normally necessary to establish the following elements: 1) the
parties are the landowner and the tenant or agricultural lessee; 2)
the subject matter of the relationship is a piece of agricultural land;
3) there is consent between the parties to the relationship; 4) the
purpose of the relationship is to bring about agricultural production;
5) there is personal cultivation on the part of the tenant or
agricultural lessee; and 6) the harvest is shared between the
landowner and the tenant or agricultural lessee.14
In the present case, the fifth element of personal cultivation is
clearly absent. Petitioner is thus correct in claiming that the
relationship between the parties is not one of tenancy or
agricultural leasehold. Nevertheless, we believe that the present
controversy still falls within the sphere of agrarian disputes.
An agrarian dispute "refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or
otherwise -- over lands devoted to agriculture. Such disputes
include those concerning farm workers associations or
representations of persons in negotiating, fixing, maintaining,

changing or seeking to arrange terms or conditions of such tenurial

arrangements. Also included is any controversy relating to the
terms and conditions of transfer of ownership from landowners to
farm workers, tenants and other agrarian reform beneficiaries -whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and
lessee."15
It is clear that the above definition is broad enough to include
disputes arising from any tenurial arrangement beyond that in the
traditional landowner-tenant or lessor-lessee relationship.
Tenurial Arrangements Recognized by Law
The assailed Joint Production Agreement16 is a type of joint
economic enterprise. Joint economic enterprises are partnerships or
arrangements entered into by Comprehensive Agrarian Reform
Program (CARP) land beneficiaries and investors to implement
agribusiness enterprises in agrarian reform areas.17
Recognizing that agrarian reform extends beyond the mere
acquisition and redistribution of land, the law acknowledges other
modes of tenurial arrangements to effect the implementation of
CARP.18
In line with its power to issue rules and regulations to carry out the
objectives of Republic Act 6657,19 the DAR issued Administrative
Order No. 2, Series of 1999, which issued "Rules and Regulations
Governing Joint Economic Enterprises in Agrarian Reform Areas."
These rules and regulations were to provide CARP beneficiaries with
alternatives to sustain operations of distributed farms and to
increase their productivity.20
Section 10 of this administrative order states as follows:
"SEC. 10. Resolution of Disputes As a rule, voluntary methods,
such as mediation or conciliation and arbitration, shall be preferred
in resolving disputes involving joint economic enterprises. The
specific modes of resolving disputes shall be stipulated in the
contract, and should the parties fail to do so, the procedure herein
shall apply.

"The aggrieved party shall first request the other party to submit
the matter to mediation or conciliation by trained mediators or
conciliators from DAR, non-governmental organizations (NGOs), or
the private sector chosen by them.
xxxxxxxxx
"Should the dispute remain unresolved, it may be brought to either
of the following for resolution depending on the principal cause of
action:

Since the DARAB had already ruled in a separate case on the

validity of the Joint Venture Agreement,23 the proper remedy for
petitioner was to question the Boards judgment through a timely
appeal with the CA.24 Because of the manifest lack of jurisdiction on
the part of the RTC, we must defer any opinion on the other issues
raised by petitioner until an appropriate review of a similar case
reaches this Court.25
WHEREFORE, the Petition is DENIED.

(a) DAR Adjudication Board (DARAB) if it involves interpretation

and enforcement of an agribusiness agreement or an agrarian
dispute as defined in Sec. 3(d) of RA 6657[.]"
The present controversy involves the interpretation and
enforcement of the terms of the Joint Production Agreement. Thus,
the case clearly falls within the jurisdiction of the DARAB. This Court
in fact recognized the authority of the DAR and the DARAB when it
ruled thus:
"All controversies on the implementation of the Comprehensive
Agrarian Reform Program (CARP) fall under the jurisdiction of the
Department of Agrarian Reform (DAR), even though they raise
questions that are also legal or constitutional in nature. All doubts
should be resolved in favor of the DAR, since the law has granted it
special and original authority to hear and adjudicate agrarian
matters."21
Validity of the Joint Production Agreement
As already discussed above, jurisdiction over the present
controversy lies with the DARAB. As the RTC had correctly
dismissed the case on the ground of lack of jurisdiction, it was
superfluous for the trial court -- and the CA for that matter -- to
have ruled further on the issue of the validity of the agreement.
The doctrine of primary jurisdiction precludes the courts from
resolving a controversy over which jurisdiction has initially been
lodged with an administrative body of special competence.22

G.R. No. 180013

January 31, 2011

DEL MONTE PHILIPPINES INC. EMPLOYEES AGRARIAN

REFORM BENEFICIARIES COOPERATIVE (DEARBC), Petitioner,
vs.
JESUS SANGUNAY and SONNY LABUNOS, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari1 assailing the Resolutions2
of the Court of Appeals (CA) in CA-G.R. SP No. 01715, which
dismissed the petition filed by Del Monte Philippines Inc. Employees
Agrarian Reform Beneficiaries Cooperative (DEARBC), challenging
the May 12, 2006 Decision3 of the Central Office of the Department
of Agrarian Reform Adjudication Board (DARAB). For lack of
jurisdiction, the DARAB reversed and set aside the ruling of the
DARAB Regional Adjudicator (Adjudicator) who ordered the
respondents to peacefully vacate certain portions of the subject
landholding.4
The Court is now urged to rule on the issue of jurisdiction of regular
courts over petitions for recovery of possession vis--vis the
original, primary and exclusive jurisdiction of the Department of
Agrarian Reform (DAR) and the DARAB over agrarian disputes

and/or agrarian reform implementation as provided for under

Section 50 of Republic Act No. 6657 (R.A. 6657).
The Facts
The property subject of this case is a portion of an entire
landholding located in Sankanan, Manolo Fortich, Bukidnon, with an
area of 1,861,922 square meters, more or less, covered by Original
Certificate of Title No. AO-3 [Certificate of Land Ownership Award
(CLOA)].5 The said landholding was awarded to DEARBC, an
agrarian cooperative and beneficiary under the Comprehensive
Agrarian Reform Program (CARP). Subsequently, DEARBC leased a
substantial portion of the land to Del Monte Philippines, Inc. (DMPI)
under Section 8 of R.A. No. 6657 through a Growers Contract dated
February 21, 1989.
On July 7, 1998, DEARBC filed a complaint for Recovery of
Possession and Specific Performance with Damages6 with the
DARAB Region 10 Office against several respondents, among whom
were Jesus Sangunay (Sangunay) and Sonny Labunos (Labunos).
Essentially, DEARBC claimed that both Sangunay and Labunos
illegally entered portions of its property called "Field 34." Sangunay
utilized approximately one and a half (1 ) hectare portion 7 where
he planted corn, built a house and resided from 1986 to the
present. Labunos, on the other hand, tilled an area of
approximately eight (8) hectares where he planted fruit trees,
gmelina, mahogany and other crops as a source of his livelihood. 8
Both respondents refused to return the parcels of land
notwithstanding a demand to vacate them. This illegal occupation
resulted in the deprivation of the proper and reasonable use of the
land and damages.
On December 11, 1990, the Adjudicator ruled in favor of DEARBC
on the ground that the respondents failed to present proof of
ownership over the subject portions of the landholding. According
to the Adjudicator, their bare allegation of possession, even prior to
the award of the land to DEARBC, did not suffice as proof of
ownership. Thus:
In the series of hearing conducted by this Adjudicator and in the
position papers submitted by some of the defendants, none of

them was able to present proof, either documentary or otherwise,

that they owned the areas they respectively occupied and
cultivate[d], or that their occupation and cultivation was with the
consent and authority of the complainant.
X x x against all reasons, the fact remains that their occupation and
cultivation thereof, granting it is true, have not been validated by
the DAR and they were not among the identified FBs over the said
subject landholding.9
Aggrieved, respondents elevated the case to the DARAB Central
Office before which Sangunay filed his position paper. He claimed
that the subject property was located along the Maninit River and
was an accrual deposit. He inherited the land from his father in
1948 and had since been in open, public, adverse, peaceful, actual,
physical, and continuous possession thereof in the concept of an
owner. He cultivated and lived on the land with the knowledge of
DEARBC. Sangunay presented Tax Declaration No. 15-018 and Real
Property Historical Ownership issued by the Municipal Assessor of
Manolo Fortrich, showing that he had declared the property for
taxation purposes long before DEARBC acquired it. In sum,
Sangunay asserted that, as a qualified farmer-beneficiary, he was
entitled to security of tenure under the agrarian reform law and, at
any rate, he had already acquired the land by prescription.
For his part, Labunos reiterated the above arguments and added
that the subject portion of the landholding was previously owned by
one Genis Valdenueza who sold it to his father, Filoteo, as early as
1950. Like Sangunay, he asserted rights of retention and ownership
by prescription because he had been in open, public, adverse,
peaceful, actual, physical, and continuous possession of the
landholding in the concept of an owner.10
In its May 12, 2006 Decision,11 the DARAB dismissed the case for
lack of jurisdiction. It ruled that the issue of ownership of the
subject land classifies the controversy as a regular case falling
within the jurisdiction of regular courts and not as an agrarian
dispute.12 Thus:
X x x the plaintiff-appellees cause of action is for the recovery of
possession and specific performance with damages with respect to
the subject landholding. Such cause of action flows from the

plaintiff-appellees contention that it owns the subject landholding.

On the other hand, defendant-appellants refuted and assailed such
ownership as to their respective landholdings. Thus, the only
question in this case is who owns the said landholdings. Without
doubt, the said question classified the instant controversy to a
regular case. At this premise, We hold that the only issue to be
resolved by this Board is whether or not the instant case presents
an agrarian dispute and is therefore well within Our jurisdiction.
xxx
In the case at bar, petitioner-appellants wanted to recover x x the
subject landholding on the premise of ownership xxx. Defendantsappellants assail such allegations saying that the landholdings are
accrual deposits and maintaining their open, peaceful and adverse
possession over the same. Indubitably, there assertions and issues
classify the present controversy as a regular case. As such, clearly,
this Board has no jurisdiction to rule upon the instant case.
Obviously, the dispute between the parties does not relate to any
tenurial arrangement. Thus, this Board has no jurisdiction over the
same.
DEARBC challenged the DARAB Decision in the CA through a
petition for review filed under Rule 43 of the Rules of Civil
Procedure. In its Resolution dated June 27, 2007,13 the CA dismissed
the petition for procedural infirmities in its verification, certification
and attachments, viz:
1) The Verification and Certification is defective due to the
following reasons:
a) There is no assurance that the allegations in the
petition are based on personal knowledge and in
authentic records, in violation of Section 4 par. (2),
Rule 7 of the Revised Rules of Civil Procedure;
b) The Community Tax Certificate Nos. of the affiant
therein are not indicated;
c) The affiant is not authorized to sign the same for
and in behalf of the petitioner cooperative;

2) The attached copies of the Motion for Reconsideration

filed before the DARAB Quezon City and the Complaint filed
before the DAR, Region XD, and the Decision and Resolution
rendered therein are mere plain photocopies, in violation of
Sec. 6 par. (c), Rule 43, supra.
In a motion for reconsideration, DEARBC invoked substantial
compliance with the pertinent procedural rules, pointing to the
attached Secretarys Certificate as sufficient proof of authority
given to the President and Chairman of the Board, Dennis Hojas
(Hojas), to represent DEARBC. On August 24, 2007,14 the CA denied
the motion because DEARBC failed to attach a copy of the board
resolution showing Hojas authority to file the petition. This was a
fatal error that warranted dismissal of the petition, according to the
appellate court.
Hence, this petition for review.
With regard to the dismissal of the case by the CA on technical
grounds, the Court is of the view that it was correct. DEARBC
clearly failed to comply with the rules which mistake was a fatal
error warranting the dismissal of the petition for review. However, it
has been the constant ruling of this Court that every party-litigant
should be afforded the amplest opportunity for the proper and just
disposition of his cause, free from constraints of technicalities. 15
Rules of procedure are mere tools designed to expedite the
resolution of cases and other matters pending in court. A strict and
rigid application of the rules that would result in technicalities that
tend to frustrate rather than promote justice must be avoided.16
Thus, the Court opts to brush aside the procedural flaw and resolve
the core issue of jurisdiction as it has been discussed by the parties
anyway.
Position of the Parties
DEARBC claims that the action it filed for recovery of possession
falls within the jurisdiction of the DARAB because it partakes of
either a boundary dispute, a correction of a CLOA or an ouster of an
interloper or intruder found under Section 1 of Rule 11 of the 2003
DARAB Rules of Procedure17 and Administrative Order 03 Series of
2003.18 Under those rules, any conflict involving agricultural lands

and the rights of beneficiaries is within the jurisdiction of the

DARAB.
In his Comment,19 Labunos argues that only questions of law may
be resolved in appeals under Rule 45 and that it is the decision of
the CA which must be challenged and not the DARAB decision. On
the merits, he cites cases where this Court ruled that the
jurisdiction of the DARAB is limited only to agrarian disputes and
other matters relating to the implementation of the CARP. The
subject land has not been transferred, distributed and/or sold to
tenants, and it is obvious that the complaint is not for the
correction of a title but for the recovery of possession and specific
performance. Issues of possession may be dealt with by the DARAB
only when they relate to agrarian disputes. Otherwise, jurisdiction
lies with the regular courts.
Sangunay prays that he be declared as the owner of the land,
particularly his area in Field 34, based on the following grounds: 1]
that the tax receipts and Tax Declaration No. 15-018 were issued in
his name; 2] that R.A. No. 6657 provides that farmers already in
place and those not accommodated in the distribution of privatelyowned lands must be given preferential rights in the distribution of
lands from the public domain (to which the subject land as an
accretion belongs); and 3] that acquisitive prescription had set in
his favor.
The Courts Ruling
The Court finds no merit in the petition.
Where a question of jurisdiction between the DARAB and the
Regional Trial Court is at the core of a dispute, basic jurisprudential
tenets come into play. It is the rule that the jurisdiction of a
tribunal, including a quasi-judicial office or government agency,
over the nature and subject matter of a petition or complaint is
determined by the material allegations therein and the character of
the relief prayed for20 irrespective of whether the petitioner or
complainant is entitled to any or all such reliefs.21 In the same vein,
jurisdiction of the court over the subject matter of the action is not
affected by the pleas or the theories set up by the defendant in an
answer or a motion to dismiss. Otherwise, jurisdiction will become
dependent almost entirely upon the whims of the defendant.22

Under Section 50 of R.A. No. 665723 and as held in a string of cases,

"the DAR is vested with the primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have the exclusive
jurisdiction over all matters involving the implementation of the
agrarian reform program."24 The DARAB was created, thru
Executive Order No. 109-A, to assume the powers and functions
with respect to the adjudication of agrarian reform cases. Hence, all
matters involving the implementation of agrarian reform are within
the DARs primary, exclusive and original jurisdiction. At the first
instance, only the DARAB, as the DARs quasi-judicial body, can
determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the
implementation of the CARP.25 An agrarian dispute refers to any
controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship, or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or conditions of
such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and other terms and
conditions of transfer of ownership from landowner to farmworkers,
tenants, and other agrarian reform beneficiaries, whether the
disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.26
The following allegations were essentially contained in the
complaints filed separately against the respondents before the
DARAB with some variance in the amount of damages and fees
prayed for:
1. The complainant is an agrarian cooperative duly
registered and organized under the laws of the Republic of
the Philippines xxx.
2. Complainant is an awardee of Comprehensive Agrarian
Reform Program (CARP), situated at Limbona, Bukidnon
under Original Certificate of Title A-3 as evidenced by
Certificate of Land Ownership Award (CLOA) xxx.
xxxx

5. The defendant illegally entered and tilled the land owned

by the complainant, inside the portion of Field 34, with an
area of one and a half (1 ) hectares, more or less, located
at Sankanan, Manolo Fortrich, Bukidnon xxx.
xxxx
8. Demands were made by the complainant for the
defendant to vacate the premises but the latter adamantly
refused and did not vacate the area xxx.
9. The defendant has caused actual damages in the amount
of xxx in the form of back rentals and an estimated amount
of xxx brought about by the defendant for all his unlawful
acts towards the land and the owner of the land.
10. To recover the possession of the land and to protect and
vindicate its rights, the complainant was compelled to
engage the servces of a legal counsel x x x
PRAYER
WHEREFORE, premises considered, it is most respectfully prayed of
this Honorable Board, that a decision be rendered:
Ejecting the defendant from the subject landholding and/or
causing him to cede possession of the land to complainant.
[Emphasis ours]
xxxx
Verily, all that DEARBC prayed for was the ejectment of the
respondents from the respective portions of the subject lands they
allegedly entered and occupied illegally. DEARBC avers that, as the
owner of the subject landholding, it was in prior physical possession
of the property but was deprived of it by respondents intrusion.
Clearly, no "agrarian dispute" exists between the parties. The
absence of tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, cannot be overlooked. In this case, no
juridical tie of landownership and tenancy was alleged between

DEARBC and Sangunay or Labunos, which would so categorize the

controversy as an agrarian dispute. In fact, the respondents were
contending for the ownership of the same parcels of land.27
This set of facts clearly comprises an action for recovery of
possession. The claim of being farmer-beneficiaries with right of
retention will not divest the regular courts of jurisdiction, since the
pleas of the defendant in a case are immaterial.
The ruling in DAR v. Hon. Hakim S. Abdulwahid and Yupangco
Cotton Mills, Inc.28 is inapplicable to the present case. The
complaint in Abdulwahid "impugn(ed) the CARP coverage of the
landholding involved and its redistribution to farmer beneficiaries,
and (sought) to effect a reversion thereof to the original owner,
Yupangco" and essentially prayed for the annulment of the
coverage of the disputed property within the CARP. The dispute was
on the "terms and conditions of transfer of ownership from landlord
to agrarian reform beneficiaries over which DARAB has primary and
exclusive original jurisdiction, pursuant to Section 1(f), Rule II,
DARAB New Rules of Procedure."29
Although the complaint filed by DEARBC was similarly denominated
as one for recovery of possession, it utterly lacks allegations to
persuade the Court into ruling that the issue encompasses an
agrarian dispute.1wphi1
DEARBCs argument that this case partakes of either a boundary
dispute, correction of a CLOA, and ouster of an interloper or
intruder, as found under Section 1, Rule 11 of the 2003 DARAB
Rules of Procedure,30 is unavailing. Nowhere in the complaint was
the correction or cancellation of the CLOA prayed for, much less
mentioned. DEARBC merely asserted its sole ownership of the
awarded land and no boundary dispute was even hinted at.
WHEREFORE, the petition is DENIED.

G.R. No. 178266

July 21, 2008

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
SAMUEL and LORETA VANZUELA, Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule
45 of the Rules of Civil Procedure. The petitioner People of the
Philippines (petitioner) seeks the reversal of the Order2 dated May
18, 2007, issued by the Regional Trial Court (RTC), Branch 30 of
Surigao City, which dismissed for lack of jurisdiction over the
subject matter the criminal case for estafa filed by private
complainant Veneranda S. Paler (Veneranda) against respondents
Samuel Vanzuela (Samuel) and his wife, Loreta Vanzuela (Loreta)
(respondents). The case ostensibly involves an agrarian dispute,
hence, according to the RTC, within the exclusive original
jurisdiction of the Department of Agrarian Reform Adjudication
Board (DARAB).
The antecedents are as follows:
Veneranda is the wife of the late Dionisio Paler, Sr.3 who is the
registered owner of a parcel of irrigated riceland, containing an
area of more than four (4) hectares, situated in Barangay Mabini
(Roxas), Mainit, Surigao del Norte, and covered by Original
Certificate of Title (OCT) No. 5747.4 One (1) hectare of this riceland
(subject property) was cultivated by the respondents as agricultural
tenants for more than ten (10) years, with an agreed lease rental of
twelve and one half (12) cavans of palay, at 45 kilos per cavan,
per harvest. The respondents allegedly failed to pay the rentals
since 1997. Initially, Veneranda brought the matter before the
Department of Agrarian Reform (DAR) Office in Mainit, Surigao del
Norte, but no amicable settlement was reached by the parties.
Thus, Veneranda filed a criminal complaint for estafa against the
respondents.
Consequently, respondents were charged in an Information5 dated
February 28, 2002 which reads:

That in about and during the period from 1997 to 2001 in Brgy.
Roxas, Mainit, Surigao del Norte, Philippines and within the
jurisdiction of this Honorable Court, said spouses Samuel and
Loreta Vanzuela, conspiring, confederating and mutually helping
one another, having leased and occupied the farmland of
Veneranda S. Paler and other heirs of the late Dionesio Paler, Sr.,
and having harvested and accounted for a total of 400 sacks of
palay for the past 10 harvest seasons of which 25% thereof were
hold (sic) in trust by them or a total value of P80,000.00, did then
and there willfully, unlawfully and feloniously misappropriate,
misapply and convert said sum of P80,000.00 to their own use and
benefit to the damage and prejudice of said Veneranda Paler and
other heirs of the late Dionesio Paler, Sr. in the aforementioned sum
of P80,000.00.
Contrary to law.
Upon arraignment, respondents pleaded not guilty. During pre-trial,
the parties agreed that the respondents had been the agricultural
tenants of Veneranda for more than ten (10) years; and that the
palay was harvested twice a year on the subject property.
Thereafter, trial on the merits ensued. After the prosecution rested
its case, the respondents filed a Demurrer to Evidence, 6 praying
that the criminal case be dismissed for failure of the petitioner to
establish the culpability of the respondents beyond reasonable
doubt. Petitioner filed a Comment/Opposition7 arguing that the
respondents, as agricultural tenants, were required by law to hold
the lease rentals in trust for the landowner and thereafter turn over
the same to the latter.
In an Order8 dated May 18, 2007, the RTC dismissed the criminal
case ratiocinating, thus:
From the averments of the information, the admissions of the
parties and the evidence adduced by the prosecution, it is easily
discernable (sic) that the instant case pertains to the non-payment
of rentals by the accused to the private complainant, involving a
lease of an agricultural land by the former from the latter. This
being so, the controversy in the case at bench involves an agrarian
dispute which falls under the primary and exclusive original
jurisdiction of the Department of Agrarian Reform Adjudication

Board (DARAB), pursuant to Section 1, Rule II of the DARAB New

Rules of Procedure, x x x.
Citing our ruling in David v. Rivera9 and Philippine Veterans Bank v.
Court of Appeals,10 the RTC opined that it had no jurisdiction over
the subject matter of the case because the controversy had the
character of an "agrarian dispute." The trial court did not find it
necessary to rule on the respondents Demurrer to Evidence and, in
fact, no mention of it was made
in the assailed Order of May 18, 2007. Hence, this petition raising
the following issues:
1. WHETHER OR NOT THE HONORABLE REGIONAL TRIAL
COURT BRANCH 30, SURIGAO CITY HAS JURISDICTION OVER
THE CHARGE FOR ESTAFA EVEN IF IT INVOLVES
AGRICULTURAL TENANTS OF THE PRIVATE COMPLAINANT;
[AND]
2. WHETHER OR NOT THE SEEMING "EXEMPTION" FROM
CRIMINAL PROSECUTION OF AGRICULTURAL TENANTS FOR
ESTAFA WOULD CONTRAVENE THE PROVISIONS OF SECTION
1, ARTICLE III OF THE CONSTITUTION, SPECIFICALLY THE
"EQUAL PROTECTION CLAUSE."11
Petitioner, on one hand, contends that, under Section 57 of
Republic Act (RA) 6657, otherwise known as the "Comprehensive
Agrarian Reform Law" (CARL), Special Agrarian Courts (SACs) were
vested with limited criminal jurisdiction, i.e., with respect only to
the prosecution of all criminal offenses under the said Act; that the
only penal provision in RA 6657 is Section 73 thereof in relation to
Section 74, which does not cover estafa; that no agrarian reform
law confers criminal jurisdiction upon the DARAB, as only civil and
administrative aspects in the implementation of the agrarian
reform law have been vested in the DAR; that necessarily, a
criminal case for estafa instituted against an agricultural tenant is
within the jurisdiction and competence of regular courts of justice
as the same is provided for by law; that the cases relied upon by
the RTC do not find application in this case since the same were
concerned only with the civil and administrative aspects of agrarian
reform implementation; that there is no law which provides that
agricultural tenants cannot be prosecuted for estafa after they have

misappropriated the lease rentals due the landowners; and that to

insulate agricultural tenants from criminal prosecution for estafa
would, in effect, make them a class by themselves, which cannot
be validly done because there is no law allowing such classification.
Petitioner submits that there is no substantial distinction between
an agricultural tenant who incurs criminal liability for estafa for
misappropriating the lease rentals due his landowner, and a nonagricultural tenant who likewise incurs criminal liability for
misappropriation.12
Finally, petitioner posits that, at this point, it is premature to
discuss the merits of the case because the RTC has yet to receive in
full the evidence of both parties before it can render a decision on
the merits. Petitioner also claims that it is pointless to delve into
the merits of the case at this stage, since the sole basis of the
assailed RTC Order is simply lack of jurisdiction.13
Respondents, on the other hand, argue that share tenancy is now
automatically converted into leasehold tenancy wherein one of the
obligations of an agricultural tenant is merely to pay rentals, not to
deliver the landowner's share; thus, petitioner's allegation that
respondents misappropriated the landowner's share of the harvest
is not tenable because share tenancy has already been abolished
by law for being contrary to public policy. Accordingly, respondents
contend that the agricultural tenant's failure to pay his lease
rentals does not give rise to criminal liability for estafa.
Respondents stand by the ruling of the RTC that pursuant to Section
1, Rule II of the DARAB New Rules of Procedure, the DARAB has
jurisdiction over agrarian disputes; and that respondents did not
commit estafa for their alleged failure to pay their lease rentals.
Respondents submit that a simple case for ejectment and collection
of unpaid lease rentals, instead of a criminal case, should have
been filed with the DARAB. Respondents also submit that, assuming
arguendo that they failed to pay their lease rentals, they cannot be
held liable for Estafa, as defined under Article 315, paragraph 4,
No. 1(b) of the Revised Penal Code, because the liability of an
agricultural tenant is a mere monetary civil obligation; and that an
agricultural tenant who fails to pay the landowner becomes merely
a debtor, and, thus, cannot be held criminally liable for estafa. 14
Ostensibly, the main issue we must resolve is whether the RTC has
jurisdiction over the crime of estafa, because the assailed order is

premised on the RTCs lack of jurisdiction over the subject matter.

However, should our resolution be in the affirmative, the more
crucial issue is whether an agricultural tenant, who fails to pay the
rentals on the land tilled, can be successfully prosecuted for estafa.
For the guidance of the bench and bar, we find it appropriate to
reiterate the doctrines laid down by this Court relative to the
respective jurisdictions of the RTC and the DARAB.
The three important requisites in order that a court may acquire
criminal jurisdiction are (1) the court must have jurisdiction over
the subject matter; (2) the court must have jurisdiction over the
territory where the offense was committed; and (3) the court must
have jurisdiction over the person of the accused. 15
First. It is a well-entrenched doctrine that the jurisdiction of a
tribunal over the subject matter of an action is conferred by law. It
is determined by the material allegations of the complaint or
information and the law at the time the action was commenced.
Lack of jurisdiction of the
court over an action or the subject matter of an action, cannot be
cured by the silence, acquiescence, or even by express consent of
the parties. Thus, the jurisdiction of the court over the nature of the
action and the subject matter thereof cannot be made to depend
upon the defenses set up in the court or upon a motion to dismiss;
otherwise, the question of jurisdiction would depend almost entirely
on the defendant. Once jurisdiction is vested, the same is retained
up to the end of the litigation.16
In the instant case, the RTC has jurisdiction over the subject matter
because the law confers on it the power to hear and decide cases
involving estafa. In Arnado v. Buban,17 we held that:
Under Article 315 of the Revised Penal Code, "the penalty of prision
correccional in its maximum period to prision mayor in its minimum
period shall be imposed if the amount of the fraud is over
P12,000.00 but does not exceed P22,000.00; and if such amount
exceeds the latter sum, the penalty provided x x x shall be imposed
in its maximum period, adding one (1) year for its additional
P10,000.00 x x x." Prision mayor in its minimum period, ranges
from six (6) years and one (1) day to eight (8) years. Under the law,

the jurisdiction of municipal trial courts is confined to offenses

punishable by imprisonment not exceeding six (6) years,
irrespective of the amount of the fine.
Hence, jurisdiction over the criminal cases against the
[respondents] pertains to the regional trial court. x x x
The allegations in the Information are clear -- Criminal Case No.
6087 involves alleged misappropriation of the amount of
P80,000.00.
Second. The RTC also has jurisdiction over the offense charged
since the crime was committed within its territorial jurisdiction.
Third. The RTC likewise acquired jurisdiction over the persons of the
respondents because they voluntarily submitted to the RTC's
authority. Where the court has jurisdiction over the subject matter
and over the person of the accused, and the crime was committed
within its territorial jurisdiction, the court necessarily exercises
jurisdiction over all issues that the law requires the court to
resolve.181avvphi1
Thus, based on the law and material allegations of the information
filed, the RTC erroneously concluded that it lacks jurisdiction over
the subject matter on the premise that the case before it is purely
an agrarian dispute. The cases relied upon by the RTC, namely,
David v. Rivera19 and Philippine Veterans Bank v. Court of Appeals,20
are of different factual settings. They hinged on the subject matter
of Ejectment and Annulment of Certificate of Land Ownership
Awards (CLOAs), respectively. It is true that in Machete v. Court of
Appeals21 this Court held that RTCs have no jurisdiction over cases
for collection of back rentals filed against agricultural tenants by
their landowners. In that case, however, what the landowner filed
before the RTC was a collection suit against his alleged tenants.
These three cases show that trial courts were declared to have no
jurisdiction over civil cases which were initially filed with them but
were later on characterized as agrarian disputes and thus, within
DARAB's jurisdiction. No such declaration has been made by this
Court with respect to criminal cases.
Instead, we have Monsanto v. Zerna,22 where we upheld the RTCs
jurisdiction to try the private respondents, who claimed to be

tenants, for the crime of qualified theft. However, we stressed

therein that the trial court cannot adjudge civil matters that are
beyond its competence. Accordingly, the RTC had to confine itself
to the determination of whether private respondents were guilty of
the crime. Thus, while a court may have authority to pass upon the
criminal liability of the accused, it cannot make any civil awards
that relate to the agrarian relationship of the parties because this
matter is beyond its jurisdiction and, correlatively, within DARAB's
exclusive domain.

It shall not be bound by technical rules of procedure and evidence

but shall proceed to hear and decide all cases, disputes or
controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in
accordance with justice and equity and the merits of the case.
Toward this end, it shall adopt a uniform rule of procedure to
achieve a just, expeditious and inexpensive determination of every
action or proceeding before it.
xxx

In the instant case, the RTC failed to consider that what is lodged
before it is a criminal case for estafa involving an alleged
misappropriated amount of P80,000.00 -- a subject matter over
which the RTC clearly has jurisdiction. Notably, while the RTC has
criminal jurisdiction conferred on it by law, the DARAB, on the other
hand, has no authority to try criminal cases at all. In Bautista v.
Mag-isa Vda. de Villena,23 we outlined the jurisdiction of the DARAB,
to wit:
For agrarian reform cases, jurisdiction is vested in the Department
of Agrarian Reform (DAR); more specifically, in the Department of
Agrarian Reform Adjudication Board (DARAB).
Executive Order 229 vested the DAR with (1) quasi-judicial powers
to determine and adjudicate agrarian reform matters; and (2)
jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive original
jurisdiction of the Department of Agriculture and the Department of
Environment and Natural Resources. This law divested the regional
trial courts of their general jurisdiction to try agrarian reform
matters.
Under Republic Act 6657, the DAR retains jurisdiction over all
agrarian reform matters. The pertinent provision reads:
Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby
vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture and the Department of
Environment and Natural Resources.

xxx

xxx

Subsequently, in the process of reorganizing and strengthening the

DAR, Executive Order No. 129-A24 was issued; it created the DARAB
to assume the adjudicatory powers and functions of the DAR.
Pertinent provisions of Rule II of the DARAB 2003 Rules of Procedure
read:
SECTION 1. Primary and Exclusive Original Jurisdiction. The
Adjudicator shall have primary and exclusive original jurisdiction to
determine and adjudicate the following cases:
1.1. The rights and obligations of persons, whether natural or
juridical, engaged in the management, cultivation, and use of all
agricultural lands covered by Republic Act (RA) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), and
other related agrarian laws;
xxx

xxx

xxx

1.4. Those cases involving the ejectment and dispossession of

tenants and/or leaseholders;
xxx

xxx

xxx

Section 3(d) of RA 6657, or the CARL, defines an "agrarian dispute"

over which the DARAB has exclusive original jurisdiction as:
(d) . . . refer[ing] to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including disputes
concerning farmworkers associations or representation of persons
in negotiating, fixing, maintaining, changing or seeking to arrange

terms or conditions of such tenurial arrangements including any

controversy relating to compensation of lands acquired under this
Act and other terms and conditions of transfer of ownership from
landowners to farmworkers, tenants and other agrarian reform
beneficiaries, whether the disputants stand in the proximate
relation of farm operator and beneficiary, landowner and tenant, or
lessor and lessee.25 Clearly, the law and the DARAB Rules are
deafeningly silent on the conferment of any criminal jurisdiction in
favor of the DARAB. It is worth stressing that even the jurisdiction
over the prosecution of criminal offenses in violation of RA 6657 per
se is lodged with the SACs and not with the DARAB.26 While indeed,
the parties admit that there is an agricultural tenancy relationship
in this case, and that under the circumstances, Veneranda as
landowner could have simply filed a case before the DARAB for
collection of lease rentals and/or dispossession of respondents as
tenants due to their failure to pay said lease rentals, there is no law
which prohibits landowners from instituting a criminal case for
estafa, as defined and penalized under Article 315 of the Revised
Penal Code, against their tenants. Succinctly put, though the
matter before us apparently presents an agrarian dispute, the RTC
cannot shirk from its duty to adjudicate on the merits a criminal
case initially filed before it, based on the law and evidence
presented, in order to determine whether an accused is guilty
beyond reasonable doubt of the crime charged.
However, we must reiterate our ruling in Re: Conviction of Judge
Adoracion G. Angeles,27 that while we do not begrudge a party's
prerogative to initiate a case against those who, in his opinion, may
have wronged him, we now remind landowners that such
prerogative of instituting a criminal case against their tenants, on
matters related to an agrarian dispute, must be exercised with
prudence, when there are clearly lawful grounds, and only in the
pursuit of truth and justice.
Thus, even as we uphold the jurisdiction of the RTC over the subject
matter of the instant criminal case, we still deny the petition.
Herein respondents were charged with the crime of estafa as
defined under Article 315, paragraph 4, No. 1(b) of the Revised
Penal Code, which refers to fraud committed

By misappropriating or converting, to the prejudice of another,

money, goods, or any other personal property received by the
offender in trust or on commission, or for administration, or under
any other obligation involving the duty to make delivery of or to
return the same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such money,
goods, or other property.
We viewed the cases invoked by the petitioner, namely, People v.
Carulasdulasan and Becarel28 and Embuscado v. People29 where this
Court affirmed the conviction for estafa of the accused therein who
were also agricultural tenants. In People v. Carulasdulasan and
Becarel,30 this Court held that From the facts alleged, it is clear that the accused received from
the sale of the abaca harvested by them a sum of money which did
not all belong to them because one-half of it corresponds to the
landlord's share of the abaca under the tenancy agreement. This
half the accused were under obligation to deliver to the landlord.
They therefore held it in trust for him. But instead of turning it over
to him, they appropriated it to their own use and refused to give it
to him notwithstanding repeated demands. In other words, the
accused are charged with having committed fraud by
misappropriating or converting to the prejudice of another money
received by them in trust or under circumstances which made it
their duty to deliver it to its owner. Obviously, this is a form of fraud
specially covered by the penal provision above cited.1awphi1
In Embuscado v. People,31 the accused appealed to this Court his
conviction for the crime of theft by the Court of First Instance even
as the information charged him with Estafa and of which he was
convicted by the City Court. This Court ruled that the accused was
denied due process when the Court of First Instance convicted him
of a crime not charged in the information, and then reinstated with
modification the ruling of the City Court convicting him of estafa.
Unfortunately for the petitioner, these cited cases are inapplicable.
People v. Carulasdulasan and Becare32 involved a relationship of
agricultural share tenancy between the landowner and the
accused. In such relationship, it was incumbent upon the tenant to
hold in trust and, eventually, account for the share in the harvest
appertaining to the landowner, failing which the tenant could be

held liable for misappropriation. As correctly pointed out by the

respondents, share tenancy has been outlawed for being contrary
to public policy as early as 1963, with the passage of R.A. 3844. 33
What prevails today, under R.A. 6657, is agricultural leasehold
tenancy relationship, and all instances of share tenancy have been
automatically converted into leasehold tenancy. In such a
relationship, the tenants obligation is simply to pay rentals, not to
deliver the landowners share. Given this dispensation, the
petitioners allegation that the respondents misappropriated the
landowners share of the
harvest as contained in the information is untenable.
Accordingly, the respondents cannot be held liable under Article
315, paragraph 4, No. 1(b) of the Revised Penal Code.
It is also worth mentioning that in Embuscado v. People,34 this Court
merely dwelt on the issue of whether the accused charged with
estafa could be convicted of the crime of theft. Issues of tenancy
vis-a-vis issues of criminal liability of tenants were not addressed.
Thus, the dissenting opinion of then Justice Teodoro R. Padilla in the
said case is worth mentioning when he opined that:
It is also my opinion that the petitioner cannot be found guilty of
estafa because the mangoes allegedly misappropriated by him
were not given to him in trust or on commission, or for
administration, or under any obligation involving the duty to make
delivery of, or to return the same, as provided for in Art. 315, par. 4,
No. 1(b) of the Revised Penal Code. What was entrusted to him for
cultivation was a landholding planted with coconut and mango
trees and the mangoes, allegedly misappropriated by him, were the
fruits of the trees planted on the land. Consequently, the action, if
any, should have been for accounting and delivery of the landlord's
share in the mangoes sold by the petitioner.35

In fine, we hold that the trial court erred when it dismissed the
criminal case for lack of jurisdiction over the subject matter.
However, we find no necessity to remand the case to the trial court
for further proceedings, as it would only further delay the resolution
of this case. We have opted to rule on the merits of the parties
contentions, and hereby declare that respondents cannot be held
liable for estafa for their failure to pay the rental on the agricultural
land subject of the leasehold. WHEREFORE, the petition is DENIED.
No costs.SO ORDERED.

G.R. No. 142501

December 7, 2001

LEONARDA L. MONSANTO, petitioner,

vs.
JESUS AND TERESITA ZERNA AND COURT OF APPEALS,
respondents.
PANGANIBAN, J.:
The filing of a criminal action carries with it the civil liability arising
from the offense. However, the trial court cannot adjudge civil
matters that are beyond its competence and powers. Thus, while a
court may have authority to pass upon the criminal liability of the
accused, it cannot make any civil awards that relate to the agrarian
relationship of the parties because this matter is beyond its
jurisdiction.
Statement of the Case
Before us is a Petition for Review under Rule 45 of the Rules of
Court, assailing the January 12, 2000 Decision1 and the March 16,
2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV No.
55440. The decretal portion of the challenged Decision reads as
follows:
"IN VIEW OF ALL THE FOREGOING, for lack of jurisdiction,
the assailed order of September 4, 1996 is hereby
RECALLED, SET ASIDE and DECLARED NULL and VOID. The

parties, if they so desire, should refer their dispute before

the agrarian authorities. No pronouncement as to costs."4
The assailed Resolution denied petitioner's Motion for
Reconsideration.
The Facts
Spouses Jesus and Teresita Zerna (herein private respondents) were
charged with qualified theft in Criminal Case No. 5896, filed before
the Regional Trial Court (RTC) of Lanao del Norte, Branch 6. This
case was later re-raffled and transferred to Branch 4 of the same
judicial region. The Information against private respondents was
amended on June 8, 1995. It is reproduced hereunder:
"That on or about February 25, 1995, up to the following
month of March, 1995, in the City of Iligan, Philippines, and
within the jurisdiction of this Honorable Court, the said
accused, conspiring and confederating together and
mutually helping each other, being then the overseers of
some banana plants on the land owned by one Leonarda
Monsanto and principally devoted to coconut trees, and
having access to said land as such, with grave abuse of
confidence reposed [i]n them by the said owner, with intent
to gain, did then and there willfully, unlawfully and
feloniously take, steal, harvest and carry away coconuts
from the premises of the said plantation, which the said
accused then processed into copra with a total value of
P6,162.50, belonging to said Leonarda Monsanto, without
her consent and against her will, to the damage and
prejudice of said Leonarda Monsanto in the aforesaid sum of
P6,162.50, Philippine Currency."5
After trial on the merits, the RTC acquitted them of the charge on
July 24, 1996. It held as follows:
"x x x [T]he harvest in the land by the [accused] was done,
not for the purpose of stealing the coconuts or the copra,
but more to confirm their claim that they are tenants of the
land. In fact the lack of intent to gain is shown by the fact
that they immediately deposited the proceeds with the

barangay captain and did not even claim a share [in] the
proceeds of the copra.
xxx

xxx

xxx

"In view of the foregoing, the Court finds that the [accused]
are not tenants of the land and the cash deposit [from] the
proceeds of the copra with the barangay captain belongs to
the private complainant, Leonarda Monsanto. However,
considering the lack of intent of the [accused] to gain, no
criminal liability for theft has been committed by them."6
It then disposed of the case in the following manner:
"WHEREFORE, the criminal case for qualified theft against
the [accused] Jesus Zerna and Teresita Zerna is hereby
ordered dismissed and their bail bond cancelled. The
barangay captain of Buru-un, Iligan City is hereby ordered to
deliver the amount of P5,162.50, representing the proceeds
[from the] copra sold by the [accused] to the private
complainant, Leonarda Monsanto."7
The total proceeds of the copra sale alleged in the Information was
P6,262.50. However, the awarded amount was only P5,162.50
which was deposited by private respondents with the barangay
secretary of Buru-un8 on March 2, 1995, after deducting P340
(harvesting cost) and P760 (labor cost). Thus, petitioner filed a
timely Motion for Reconsideration praying that the remaining sum
of P1,100 be returned to her.9
In its September 4, 1996 Order, the trial court granted the Motion
and ordered private respondents to return the amount of P1,100.10
It ruled thus:
"In his motion for reconsideration, the private prosecutor
prays that with respect to the civil aspect of the case, the
accused be made to return the amount of P1,100.00 which
they appropriated for themselves from the gross proceeds of
the stolen property.
"Opposing the said motion, counsel for the accused avers
that the amount P1,100.00 was due to the accused as

compensation for their labor and equity demands that they

[be] entitled to it.
"The Court has already adjudged that the accused are not
guilty of theft and therefore, they cannot be considered to
have stolen the coconuts. But the motion has raised another
issue.

private respondents to pay petitioner the amount of P1,100.

Because the dispute involved an agricultural tenancy relationship,
the matter fell within the primary and exclusive original jurisdiction
of the Department of Agrarian Reform Adjudication Board (DARAB).
It added that inasmuch as the RTC had no jurisdiction to rule on the
civil aspect of the case ergo, it had no appellate authority over the
matter under a writ of error.

"Are the accused entitled to the amount of P1,100.00 as

compensation for labor in harvesting the coconuts and
processing these into copra?

The appellate court thus "recalled, set aside and declared null and
void" the September 6, 1996 RTC Order requiring the return of the
P1,100 to petitioner.

"The accused plead equity in their favor since [there]

appears to be no law applicable to the incident in question.
However, for equity to apply, good faith must exist.

Hence, this Petition.12

"From the findings of this Court, the harvesting of the

coconuts and processing of the same into copra were not
with the consent of the private complainant. In fact, if the
proper criminal charge were made, which could be unjust
vexation, the accused could have been convicted as their
acts certainly vexed the private complainant by their
harvesting the coconuts and selling the copra. Therefore,
without good faith, since the Court found that they did the
acts complained of in an attempt to confirm their tenancy
claim, equity was wanting.

In her Memorandum, petitioner raises the following issues for the

Court's consideration:

"The accused could not be entitled to compensation for their

labor done without the consent of the private complainant
since, obviously, there was no contract of labor between
them for the harvesting of the coconuts and processing of
these into copra.
"Even our laws on quasi-contracts do not allow
compensation [for] the accused.
"Without equity or any law in their favor, the accused are
therefore not entitled to compensation for their vexatious
acts."11
After a review of the records and the pleadings of the parties, the
CA, on appeal, ruled that the trial court had no jurisdiction to order

Issues

I
"Is the Regional Trial Court automatically divested of
jurisdiction over a criminal case where an agrarian issue is
argued as a defense, no matter how flimsy?
II
"Does the Court of Appeals have any competence to review
an RTC Decision which ha[s] become FINAL as not appealed
from, on the basis of a Notice of Appeal which was
SPECIFICALLY and simply directed against an adscititious
ORDER issued subsequent to that Decision?"13
This Court's Ruling
The Petition is devoid of merit.
First Issue:
DARAB Jurisdiction

Petitioner claims that the RTC was divested of its criminal

jurisdiction when the CA annulled and set aside the September 4,
1996 Order. We disagree.
A careful review of the CA Decision shows that it merely set aside
the September 4, 1996 RTC Order directing private respondents to
pay P1,100 to petitioner. It did not annul the July 24, 1996 RTC
Decision acquitting private respondents of qualified theft. Being an
acquittal, the judgment became "final immediately after
promulgation and cannot be recalled for correction or
amendment."14
The trial court considered the return of the P1,100 as part of the
civil aspect of the criminal case. As petitioner did not consent to
the harvesting of the coconuts and the processing of the same into
copra, then there was no basis to award the amount to private
respondents. In the words of the trial court, "[w]ithout equity or any
law in their favor, the accused are therefore not entitled to
compensation for their vexatious acts."15
But what is the RTC's basis for ordering the return of P1,100 after it
had already acquitted private respondents of qualified theft? Does
the amount constitute civil liability? Let us clarify. Civil liability is
the liability that may arise from (1) crime, (2) breach of contract or
(3) tortious act. The first is governed by the Revised Penal Code;
the second and the third, by the Civil Code.16
In the case at bar, there is no question that the RTC had criminal
jurisdiction to try private respondents for the crime of qualified
theft. In the normal course, it had authority to determine whether
they had committed the crime charged and to adjudge the
corresponding penalty and civil liability arising therefrom.
On September 4, 1996, the RTC issued an Order requiring private
respondents to return the P1,100 to petitioner on the ground that
petitioner had not consented to the harvesting of the coconuts or to
their conversion into copra. Such order appears inconsistent with
the trial court's finding that private respondents had not committed
the crime of qualified theft. In People v. Pantig,17 the Court held that
where there is no crime committed, there can be no civil liability
that can arise from the criminal action or as a consequence thereof,
as follows:

"Where the civil liability which is included in the criminal

action is that arising from and as [a] consequence of the
criminal act, and the defendant was acquitted in the
criminal case, no civil liability arising from the criminal
charge could be imposed upon him. The liability of the
defendant for the return of the amount so received by him
may not be enforced in the criminal case but in a civil action
for the recovery of the said amount."
The foregoing ruling has been modified by the current Rules. Thus,
paragraph 2 of Section 2, Rule 120 of the present Rules of Court
provides that "[i]n case the judgment is of acquittal, it shall state
whether the evidence of the prosecution absolutely failed to prove
the guilt of the accused or merely failed to prove his guilt beyond
reasonable doubt. In either case, the judgment shall determine if
the act or omission from which the civil liability might arise did not
exist."
In the present set of facts, however, the RTC did not have
jurisdiction to make a finding on the civil liability of the accused
who were acquitted.
Specifically, we believe that the resolution of the issue of who is
entitled to the P1,100 falls squarely within the jurisdiction of the
DARAB. EO 22918 vested the Department of Agrarian Reform (DAR)
with quasi-judicial powers to determine and adjudicate agrarian
reform matters, as well as to exercise exclusive original jurisdiction
over all matters involving the implementation of agrarian reform,
except those falling under the exclusive original jurisdiction of the
Department of Environment and Natural Resources (DENR) and the
Department of Agriculture (DA).
Section 13 of EO 129-A,19 on the other hand, created the
Department of Agrarian Reform Adjudication Board (DARAB), which
was specifically tasked with the power and the function to decide
agrarian reform cases. The DARAB, under Section 1, paragraph (a),
Rule II of the Revised Rules of Procedure, exercises primary
jurisdiction -- both original and appellate -- to determine and
adjudicate all agrarian disputes, cases, controversies, and matters
or incidents involving the implementation of agrarian laws and their
implementing rules and regulations. The provision reads as follows:

"SECTION 1. Primary, Original and Appellate Jurisdiction. The

Agrarian Reform Adjudication Board shall have primary
jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes, cases, controversies, and
matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic
Act No. 6657, Executive Order Nos. 229, 228 and 129-A,
Republic Act No 3844 as amended by Republic Act No. 6389,
Presidential Decree No. 27 and other agrarian laws and their
implementing rules and regulations. Specifically, such
jurisdiction shall extend over but not [be] limited to the
following:
'a) Cases involving the rights and obligations of
persons engaged in the cultivation and use of
agricultural land covered by the Comprehensive
Agrarian Reform Program (CARP) and other agrarian
laws.'"
An agrarian dispute refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or
otherwise -- over lands devoted to agriculture, including (1)
disputes concerning farm workers' associations; or (2)
representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial
arrangement.20
In Estates Development Corporation v. CA,21 the essential elements
of a tenancy relationship were listed in this wise:
"For DARAB to have jurisdiction over a case, there must
exist a tenancy relationship between the parties. In order for
a tenancy agreement to take hold over a dispute, it would
be essential to establish all its indispensable elements to
wit: 1) the parties are the landowner and the tenant or
agricultural lessee 2) subject matter of the relationship is an
agricultural land 3) there is consent between the parties to
the relationship 4) that the purpose of the relationship is to
bring about agricultural production 5) there is personal
cultivation on the part of the tenant or agricultural lessee
and 6) the harvest is shared between the landowner and the
tenant or agricultural lessee."

Petitioner claims that private respondents were not her tenants,

and that they raised the defense of tenancy in the criminal case
merely to escape prosecution for qualified theft. On the other hand,
private respondents assert that they were petitioner's tenants, as
shown by the evidence adduced by the parties before the RTC.
After a careful review of the records of this case, we hold that an
agrarian dispute existed between the parties. First, the subject of
the dispute between them was the taking of coconuts from the
property owned by petitioner. Second, private respondents were
the overseers of the property at the time of the taking of the
coconuts, as can be gleaned from the Kasabutan (or Agreement)
executed between them on November 25, 1991, which reads thus:
"I, MRS. LEONARDA L. MONSANTO, am the owner of that
land located at Tonggo, Mimbalot, Buru-un, Iligan City. This
JESUS [Z]ERNA, whose wife is TERESITA ZERNA, had
requested that he be allowed to oversee Mrs. Monsanto's
Banana plants under the agreement that he (Jesus Zerna)
would be paid for his labor for each banana plant cut in
Tonggo."
"When I (Jesus Zerna) no longer want to oversee or wish to
stop overseeing, Mrs. Leonarda Monsanto cannot force me
to continue in the same way that I cannot force Mrs.
Monsanto to hire me if my services are no longer needed." 22
Third, petitioner allowed private respondents to plant coconut,
coffee, jackfruit and cacao as shown by the said Agreement,
pertinent portions of which are reproduced hereunder:
"And if I (Jesus Zerna) can plant coconut trees [o]n that land,
I will be paid for them according to their ages. I (Jesus
Zerna) am also allowed to plant coffee, jackfruit and cacao,
under the same agreement."23
Finally, a tenurial arrangement exists among herein parties as
regards the harvesting of the agricultural products, as shown by the
several remittances made by private respondents to petitioner.
These are substantiated by receipts.24

A tenancy relationship may be established either verbally or in

writing, expressly or impliedly.25 In the present case, undisputed by
petitioner is the existence of the Kasabutan, which contradicts her
contention that private respondents were mere overseers. In any
event, their "being overseers does not foreclose their being also
tenants," as held in Rupa v. Court of Appeals.26 Evidently, the
resolution of the agrarian dispute between the parties is a matter
beyond the legal competence of regular courts.
To repeat, petitioner is claiming the questioned amount of P1,100
as the balance of the proceeds from the copra sale, which the RTC
awarded her. Private respondents contend that this P1,100 is their
compensation, pursuant to their tenurial arrangement with her.
Since this amount is inextricably intertwined with the resolution of
the agrarian dispute between them, we believe that the Court of
Appeals did not commit any reversible error in holding that it was
DARAB that had jurisdiction to pass upon this civil matter.
Second Issue:
Lack of Jurisdiction Not Waived
Petitioner argues that jurisdiction was not raised as an issue in the
appeal ergo, the CA should not have ruled on it.
We disagree. As a general rule, an appeal is limited to a review of
the specific legal issues raised in the petition by the parties.
However, even if not raised, an error in jurisdiction may be taken
up.27 Lack of jurisdiction over the subject matter may be raised at
any stage of the proceedings -- even on appeal.28 In Del Rosario v.
Mendoza,29 we have ruled as follows:
"Indeed there are exceptions to the aforecited rule that no
question may be raised for the first time on appeal. Though
not raised below, the issue of lack of jurisdiction over the
subject matter may be considered by the reviewing court, as
it may be raised at any stage."

The reason is that jurisdiction over a subject matter is conferred by

law, not by the courts or the parties themselves. "Where the court
itself clearly has no jurisdiction over the subject matter or the
nature of the action, the invocation of this defense may be done at
any time. It is neither for the courts nor the parties to violate or
disregard that rule, let alone to confer that jurisdiction, this matter
being legislative in character. x x x."30
In the present case, the RTC had jurisdiction to decide the criminal
case against private respondents; however, it acted beyond its
jurisdiction when it effectively ruled on the agricultural tenancy
relationship between the parties. Private respondents had raised
before it the issue of tenancy by way of defense, and apparently
interwoven with the agrarian dispute, were the acts complained of
by petitioner: the harvesting of the coconuts, their conversion into
copra and, later, the sale thereof. Thus, the RTC should have
confined itself to the determination of whether private respondents
were guilty of qualified theft, instead of automatically awarding the
proceeds of the copra sale to petitioner. Such matter, being an
offshoot of the agrarian dispute between the parties, is cognizable
exclusively by the DARAB.
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision and Resolution are AFFIRMED. Costs against petitioner.
SO ORDERED.