G.R. No.

130876 January 31, 2002

FRANCISCO M. ALONSO, substituted by his heirs, petitioners,

vs.
CEBU COUNTRY CLUB, INC., respondent.

PARDO, J.:

The Case

The case is an appeal via certiorari from a decision of the Court of Appeals1 affirming in toto that of the Regional Trial
Court, Branch 8, Cebu City,2 declaring that the title to the contested Lot No. 727, Banilad Friar Lands Estate, Cebu City,
was validly re-constituted in the name of the Cebu Country Club, Inc. and ordering petitioners to pay attorneys fees of
P400,000.00, and litigation expenses of P51,000.00, and costs.

In an appeal via certiorari, petitioners may raise only questions of law, which shall be distinctly set forth. 3 The jurisdiction
of the Supreme Court in cases brought before it from the Court of Appeals is limited to the review of errors of law and not
to analyze or weigh the evidence all over again, as its findings of facts are deemed final and conclusive. 4

In this appeal, petitioners raise five (5) issues, all of which involve questions of fact that have been resolved by the trial
court and the Court of Appeals in favor of the Cebu Country Club, Inc.

The Facts

The facts, as found by the Court of Appeals, are as follows:

(1) Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, a lawyer by profession, the
only son and sole heir of the late Tomas N. Alonso and Asuncion Medalle, who died on June 16, 1962 and August 18,
1963, respectively (Exhibits "P" and "P-1"). Cebu Country Club, Inc. is a non-stock, non-profit corporation duly organized
and existing under Philippine Laws the purpose of which is to cater to the recreation and leisure of its members.

(2) Sometime in 1992, petitioner discovered documents and records Friar Lands Sale Certificate Register/Installment
Record Certificate No. 734, Sales Certificate No. 734 and Assignment of Sales Certificate (Exhs. "A", "J" and "K")
showing that his father acquired Lot No. 727 of the Banilad Friar Lands Estate from the Government of the Philippine
Islands in or about the year 1911 in accordance with the Friar Lands Act (Act No. 1120). The documents show that one
Leoncio Alburo, the original vendee of Lot No. 727, assigned his sales certificate to petitioners father on December 18,
1911, who completed the required installment payments thereon under Act No. 1120 and was consequently issued Patent
No. 14353 on March 24, 1926. On March 27, 1926, the Director of Lands, acting for and in behalf of the government,
executed a final deed of sale in favor of petitioners father Tomas N. Alonso (Exh. "C"). It appears, however, that the deed
was not registered with the Register of Deeds because of lack of technical requirements, among them the approval of the
deed of sale by the Secretary of Agriculture and Natural Resources, as required by law.

(3) Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds of Cebu City
that title to Lot No. 727 of the Banilad Friar Lands Estate had been "administratively reconstituted from the owners
duplicate" on July 26, 1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351) in the name of United Service
Country Club, Inc., predecessor of Cebu Country Club, Inc. On March 8, 1960, upon order of the Court of First Instance,
the name of the registered owner in TCT No. RT-1310 (T-11531) was changed to Cebu Country Club, Inc. Moreover, the
TCT provides that the reconstituted title was a transfer from TCT No. 1021 (Exh. "D" and sub-markings).

(4) At present, TCT No. RT-1310 (T-11351) has been partially cancelled when Lot No. 727 was subdivided in accordance
with the Memorandum of Agreement entered into by Cebu Country Club, Inc. and Susana Ingles Marquiso and Simeon
Ingles, Jr. by virtue of the ruling of the Court of Appeals in the case of Heirs of Ramon Cabrera and Graciano Ingles v.
Cebu Country Club, Inc.5 and affirmed by the Supreme Court in G. R. No. 60392, per resolution dated August 29, 1983.
Lot 727-D-2 covered by TCT No. 94905 remains registered in the name of Cebu Country Club, Inc. (Exh. "D-2").

(5) In the firm belief that petitioners father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands Estate since
there are no records showing that he ever sold or conveyed the disputed property to anyone, on July 7, 1992, petitioner
made a formal demand upon Cebu Country Club, Inc. to restore to him the ownership and possession of said lot within
fifteen (15) days from receipt thereof. He indicated that his claim was analogous to that of the heirs of the late Ramon
Cabrera and Graciano Ingles which was upheld by the Court of Appeals (Exh. "H"). Cebu Country Club, Inc., however,
denied petitioners claim and refused to deliver possession to him.

(6) Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu City,6a
complaint for declaration of nullity and non existence of deed/title, cancellation of certificates of title and recovery of
property against defendant Cebu Country Club, Inc.7 He alleged that the Cebu Country Club, Inc. fraudulently and illegally
managed to secure in its name the administrative reconstitution of TCT No. RT-13 10 (T-11351) despite the absence of
any transaction of specific land dealing that would show how Lot No. 727 had come to pass to Cebu Country Club, Inc.;
that TCT No. 11351 which is the source title of TCT No. RT-1310 (T-11351) does not pertain to Lot No. 727; that the
reconstituted title which was issued on July 26, 1948, did not contain the technical description of the registered land which
was inserted only on March 8, 1960, twenty-eight (28) years after the issuance of TCT No. RT-1310 (T-11351), hence,
Cebu Country Club, Inc.s title is null and void. Petitioner thus prayed for the cancellation of TCT No. RT-1310 (T-11351)
and the issuance of another title in his name as the sole heir of Tomas Alonso, for Cebu Country Club, Inc. to deliver
possession of the property to petitioner, and render an accounting of the fruits and income of the land. Petitioner likewise
prayed for the sum of P100,000.00 by way of attorneys fees plus P500.00 per hearing as appearance fee, and
P10,000.00 as reasonable litigation expenses.

(7) On November 5, 1992, Cebu Country Club, Inc. filed with the trial court its answer with counterclaim. It alleged that
petitioner had no cause of action against Cebu Country Club, Inc. since the same had prescribed and was barred by
laches, Cebu Country Club, Inc. having been in possession of the land since 1935 until the present in the concept of an
owner, openly, publicly, peacefully, exclusively, adversely, continuously, paying regularly the real estate taxes thereon;
that Cebu Country Club, Inc. acquired the lot in good faith and for value; that it caused the administrative reconstitution of
Lot No. 727 in 1948 from the owners duplicate, the original of TCT No. 11351 having been lost or destroyed during the
war, pursuant to Republic Act No. 26, its implementing Circular, GLRO Circular No. 17 8 and Circular No. 6 of the General
Land Registration Office;9 that unlike Cebu Country Club, Inc., petitioners father never had any registered title under the
Land Registration Act No. 496 nor did he pay the necessary taxes on Lot No. 727 during his lifetime; that petitioners
father knew that the United Service Country Club, Inc., predecessor of Cebu Country Club, Inc. was occupying Lot No.
727 as owner; that petitioners father never reconstituted his alleged title to Lot No. 727 but did so over Lot No. 810 of the
Banilad Friar Lands Estate, a lot adjacent to the disputed property, in 1946; that petitioner himself lived in Cebu City, a few
kilometers away from the land in litigation; that petitioners father or petitioner himself, both of whom are lawyers and the
former a congressman as well, for more than sixty (60) years, never made any demand on Cebu Country Club, Inc. for the
recovery of the property knowing fully well that said land was owned and utilized by Cebu Country Club, Inc. as its main
golf course. By way of counterclaim, Cebu Country Club, Inc. prayed for the award of attorneys fees in the amount of
P900,000.00 and litigation expenses of P100,000.00, moral damages of P500,000.00 and exemplary damages of
P2,000,000.00.10

(8) In the course of the trial, Cebu Country Club, Inc. to disprove petitioners allegation that its title, TCT No. RT-1310 (T-
11351), was obtained illegally and fraudulently, submitted the deposition of an expert witness, Atty. Benjamin Bustos,
Chief of the Reconstitution Division, Land Registration Authority, Central Office, Metro Manila (Exh. "8"). He testified that
pursuant to GLRO Circular No. 17 dated February 19, 1947 and Circular No. 6 (RD-3) dated August 5, 1946 (Exhs "2"
and "3"), titles issued before the inauguration of the Republic of the Philippines were numbered consecutively, and titles
issued after the inauguration of the Republic were likewise numbered consecutively, starting with the number one (1).
Eventually, therefore, the title numbers issued before the inauguration would be duplicated by the title numbers issued
after the inauguration of the Republic.11

(9) On May 7, 1993, the trial court rendered a decision, the dispositive portion of which reads:

"THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the defendant and against the
plaintiff: declaring the contested property or Lot 727 as legally belonging to the defendant; directing the plaintiff to
pay attorney' fee of P400,000.00; and litigation expenses of P51,000.00; and finally, with costs against the
plaintiff.

"SO ORDERED.

"Cebu City, May 7, 1993.

"(s/t) BERNARDO LL. SALAS

"Judge"12
(10) In due time, both parties appealed to the Court of Appeals.13

After proceedings on appeal, on March 31, 1997, the Court of Appeals promulgated a decision, the dispositive portion of
which reads:

"WHEREFORE, IN VIEW OF THE FOREGOING, the appeals interposed by both parties are hereby DENIED,
and the lower courts Decision dated May 7, 1993 is AFFIRMED in toto. No pronouncement as to costs."

"SO ORDERED."14

On April 30, 1997, petitioner filed a motion for reconsideration; however, on October 2, 1997, the Court of Appeals denied
the motion.15

Hence, this appeal.16

On October 24, 2000, we required the Solicitor General to file comment on the issue of the validity of the re-constituted
title in dispute.17

On November 8, 2000, the Solicitor General submitted a comment stating that on the basis of information received from
the Land Registration Authority (LRA) and the Land Management Bureau (LMB), the Cebu Country Club, Inc. had been
occupying the disputed property even before the Second World War and developed it into a golf course and must have
acquired the property in a proper and valid manner.18 Nonetheless, the Solicitor General emphasized that the Cebu
Country Clubs certificate of title is a reconstituted title. A reconstituted title does not confirm or adjudicate ownership of
land covered by lost or destroyed title.19 And the Governments right to file reversion proceedings cannot be barred by
prescription that does not run against the State.20

The Issues

Petitioners raise the following issues:

1. Whether the Court of Appeals erred in affirming the validity of TCT No. RT-1310 (T-11351).

2. Whether the Court of Appeals erred in sustaining respondents claim of ownership over Lot No. 727;

3. Whether the Court of Appeals erred in holding that the present action is barred by prescription and/or by
laches;

4. Whether the Court of Appeals erred in not applying the doctrine of stare decisis;

5. Whether the Court of Appeals erred in sustaining the trial courts award for damages in the form of attorneys
fees and litigation expenses.21

We resolve the issues in seriatim.

First Issue: Validity of Cebu Country Club, Inc.s Title

The first issue is whether the Court of Appeals lawfully adjudged the validity of the administrative reconstitution of the title
of Cebu Country Club, Inc. over the OCT of the Government of the Philippine Islands and Sales Patent No. 14353 on Lot
No. 727 in the name of Tomas N. Alonso.

The issue is factual, which, as aforesaid, cannot be reviewed in this appeal. Nevertheless, petitioners assail the validity of
the administrative reconstitution of Cebu Country Club, Inc.s title No. RT-1310 (T-11351) on three (3) grounds:

1. Its source title bears the same number as another title which refers to another parcel of land;

2. There is no recorded transaction of the land from Tomas Alonso in favor of Cebu Country Club, Inc.; and

3. The technical description was not transcribed in the title within two (2) years from the date of its reconstitution.
None of the grounds has any basis or merit.

On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another land, we agree with
the Court of Appeals that there is nothing fraudulent with the fact that Cebu Country Club, Inc.s reconstituted title bears
the same number as the title of another parcel of land. This came about because under General Land Registration Office
(GLRO) Circular No. 17, dated February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3, dated August 5,
1946, which were in force at the time the title was reconstituted on July 26, 1948, the titles issued before the inauguration
of the Philippine Republic were numbered consecutively and the titles issued after the inauguration were numbered also
consecutively starting with No. 1, so that eventually, the titles issued before the inauguration were duplicated by titles
issued after the inauguration of the Philippine Republic. This was testified to by Atty. Benjamin Bustos, Chief of the
Reconstitution Division, Land Registration Authority, Central Office, Metro Manila, and by Atty. Dindo Nuez, Deputy
Register of Deeds of Cebu City, who declared that several titles in the record of the Register of Deeds which were
reconstituted after the inauguration of the Philippine Republic had the same numbers as the titles issued before the
Second World War, due to the operation of the circulars referred to.

Said the Court of Appeals:

"As a third argument, plaintiff avers that the lower court erred in declaring defendant as the owner of Lot 727
when it has a void title because it was fraudulently acquired. Specifically, plaintiff points out that on the face of
defendants administratively reconstituted title- TCT No. RT-1310 (T-11351), it would appear that its source title is
TCT No. 11351. Going over the said title further, it can be gleaned that the parent title of TCT No. 11351 is TCT
No. 1021. However, plaintiff claims that defendant failed to present said source titles. It appears likewise that the
Register of Deeds of Cebu City does not have a copy thereof.

"On the other hand, plaintiff presented TCT No. 11351 issued on June 18, 1954 in the name of Pacita Raffinan
covering Lot 925 of the Cadastral Survey of Cebu with an area of 310 square meters, more or less, (Exh. "L") and
TCT No. 1021 issued on July 12, 1947 in the name of Rosario Rubio covering Lot No. 51-D of the subdivision
plan being a portion of Lot No. 576 of the Banilad Friar lands Estate with an area of 230 sq. m., more or less (Exh.
"E"). In his motion for new trial, he likewise presented as one of his newly discovered evidence a copy of TCT No.
RT-1325 (T-1021) (Annex "B", Motion for New Trial, p. 60, Rollo) whose source title was presumably TCT No.
1021, which apparently is the parent title of defendants TCT. Said TCT No. RT-1325 (T-1021) was
administratively reconstituted on July 27, 1948 and covers Lot No. 1314 of the Cadastral Survey of Cebu with an
area of 110 sq. m., more or less, and registered in the name of Spouses Andres Borres and Emiliana Enriquez.
As stated in TCT No. RT-1325 (T-1021), its parent title, TCT No. 1021, was entered in the record book on May
17, 1939.

"Plaintiff concludes then that considering that TCT Nos. 11351 and 1021 as well as RT-1325 (T-1021), which
were purportedly the parent titles of TCT No. RT-1310 (T-11351), do not cover Lot. 727, defendants TCT was
void having been obtained from a spurious or non-existent source (Citing the case of Ramon Cabrera, et. al., vs.
Cebu Country Club, Inc. CA-G.R. No. 65559-R, Exh. "F").

"That there seems to be no record on file of the existence of either TCT No. 11351 or 1021 covering Lot 727 of
the Banilad Friar Lands Estate containing an area of 377,622 sq. m., does not invalidate defendants title. As
defendant counters, which was corroborated by Atty. Dindo Nuez, Deputy Register of Deeds for Cebu City,
copies of these titles were lost and could not be found despite diligent search thereof.

"Moreover, the absence of said titles and the existence of TCT Nos. 11351 and 1021, which do not cover Lot 727,
do not render TCT No. RT-1310 (T-11351) invalid in the light of Circular No. 6 Exh. "3") re: numbering of
certificates of title, entries in the day book and registration books, and GLRO Circular No. 17 (Exh. "2") the
rules and regulations governing the reconstitution of lost or destroyed certificates of title."22

Petitioners next argue that the reconstituted title of Cebu Country Club, Inc. had no lawful source to speak of; it was
reconstituted through extrinsic and intrinsic fraud in the absence of a deed of conveyance in its favor. In truth, however,
reconstitution was based on the owners duplicate of the title, hence, there was no need for the covering deed of sale or
other modes of conveyance. Cebu Country Club, Inc. was admittedly in possession of the land since long before the
Second World War, or since 1931. In fact, the original title (TCT No. 11351) was issued to the United Service Country
Club, Inc. on November 19, 1931 as a transfer from Transfer Certificate of Title No. 1021 (Exh. "D-6"). More importantly,
Cebu Country Club, Inc. paid the realty taxes on the land even before the war, and tax declarations covering the property
showed the number of the TCT of the land. Cebu Country Club, Inc. produced receipts showing real estate tax payments
since 1949 (Exhs. 27 to 100-B). On the other hand, petitioner failed to produce a single receipt of real estate tax payment
ever made by his father since the sales patent was issued to his father on March 24, 1926. Worse, admittedly petitioner
could not show any torrens title ever issued to Tomas N. Alonso, because, as said, the deed of sale executed on March
27, 1926 by the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources and could not
be registered. "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. The act of registration creates constructive notice to the whole
world of the fact of such conveyance."23 On this point, petitioner alleges that Cebu Country Club, Inc. obtained its title by
fraud in connivance with personnel of the Register of Deeds in 1941 or in 1948, when the title was administratively
reconstituted. Imputations of fraud must be proved by clear and convincing evidence. 24 Petitioner failed to adduce
evidence of fraud. In an action for re-conveyance based on fraud, he who charges fraud must prove such fraud in
obtaining a title. "In this jurisdiction, fraud is never presumed."25 The strongest suspicion cannot sway judgment or
overcome the presumption of regularity. "The sea of suspicion has no shore, and the court that embarks upon it is without
rudder or compass."26 Worse, the imputation of fraud was so tardily brought, some forty-four (44) years or sixty-one (61)
years after its supposed occurrence, that is, from the administrative reconstitution of title on July 26, 1948, or from the
issuance of the original title on November 19, 1931, that verification is rendered extremely difficult, if not impossible,
especially due to the supervening event of the second world war during which practically all public records were lost or
destroyed, or no longer available.

Petitioners next question the lack of technical description inscribed in the reconstituted title in Cebu Country Club, Inc.s
name. This is not a bar to reconstitution of the title nor will it affect the validity of the reconstituted title. A registered owner
is given two (2) years to file a plan of such land with the Chief of the General Land Registration Office. 27 The two-year
period is directory, not jurisdictional. In other words, the failure to submit the technical description within two (2) years
would not invalidate the title. At most, the failure to file such technical description within the two-year period would bar a
transfer of the title to a third party in a voluntary transaction.

Second Issue: Whether Francisco Alonso is owner of the land

The second issue is whether the Court of Appeals erred in ruling that the Cebu Country Club, Inc. is owner of Lot No. 727.

Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that petitioners could
claim was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The sales patent, however,
and even the corresponding deed of sale were not registered with the Register of Deeds and no title was ever issued in
the name of the latter. This is because there were basic requirements not complied with, the most important of which was
that the deed of sale executed by the Director of Lands was not approved by the Secretary of Agriculture and Natural
Resources. Hence, the deed of sale was void.28 "Approval by the Secretary of Agriculture and Commerce is indispensable
for the validity of the sale."29 Moreover, Cebu Country Club, Inc. was in possession of the land since 1931, and had been
paying the real estate taxes thereon based on tax declarations in its name with the title number indicated thereon. Tax
receipts and declarations of ownership for taxation purposes are strong evidence of ownership.30 This Court has ruled that
although tax declarations or realty tax payments 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 will be paying taxes for a property that is
not in his actual or constructive possession.31

Notwithstanding this fatal defect, the Court of Appeals ruled that "there was substantial compliance with the requirement
of Act No. 1120 to validly convey title to said lot to Tomas N. Alonso." 32

On this point, the Court of Appeals erred.

Under Act No. 1120, which governs the administration and disposition of friar lands, the purchase by an actual and bona
fide settler or occupant of any portion of friar land shall be "agreed upon between the purchaser and the Director of Lands,
subject to the approval of the Secretary of Agriculture and Natural Resources (mutatis mutandis)."33

In his Memorandum filed on May 25, 2001, the Solicitor General submitted to this Court certified copies of Sale Certificate
No. 734, in favor of Leoncio Alburo, and Assignment of Sale Certificate No. 734, in favor of Tomas N. Alonso.
Conspicuously, both instruments do not bear the signature of the Director of Lands and the Secretary of the Interior. They
also do not bear the approval of the Secretary of Agriculture and Natural Resources.

Only recently, in Jesus P. Liao v. Court of Appeals,34 the Court has ruled categorically that approval by the Secretary of
Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such approval
made the sale null and void ab-initio.35 Necessarily, there can be no valid titles issued on the basis of such sale or
assignment.36 Consequently, petitioner Franciscos father did not have any registerable title to the land in question. Having
none, he could not transmit anything to his sole heir, petitioner Francisco Alonso or the latters heirs.
In a vain attempt at showing that he had succeeded to the estate of his father, on May 4, 1991, petitioner Francisco
Alonso executed an affidavit adjudicating the entire estate to himself (Exh. "Q"), duly published in a newspaper of general
circulation in the province and city of Cebu (Exh. "Q-1"). Such affidavit of self-adjudication is inoperative, if not void, not
only because there was nothing to adjudicate, but equally important because petitioner Francisco did not show proof of
payment of the estate tax and submit a certificate of clearance from the Commissioner of Internal Revenue. 37 Obviously,
petitioner Francisco has not paid the estate taxes.

Consequently, we rule that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latters heirs are the lawful
owners of Lot No. 727 in dispute. Neither has the respondent Cebu Country Club, Inc. been able to establish a clear title
over the contested estate. The reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its
original form and condition. It does not determine or resolve the ownership of the land covered by the lost or destroyed
title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered
thereby.38

Third Issue: Action has prescribed or is barred by laches

The third issue is whether petitioners action for re-conveyance has prescribed or is barred by laches.

"An action based on implied or constructed trust prescribes in ten (10) years... from the time of its creation or upon the
alleged fraudulent registration of the property."39 Petitioner Franciscos action in the court below was basically one of re-
conveyance. It was filed on September 25, 1992, sixty-one (61) years after the title was issued on November 19, 1931,
and forty-four (44) years after its reconstitution on July 26, 1948. Thus, the failure of petitioner Francisco and his father to
assert ownership of the land for over sixty (60) years during which the Cebu Country Club, Inc. was in possession is
simply contrary to their claim of ownership.40 Petitioner Franciscos and his fathers "long inaction or passivity in asserting
their rights over disputed property will preclude them from recovering the same."41

Aside from the fact that, as herein-above stated, neither petitioner Francisco nor his father held a valid title over the land,
and that there was no showing that his father owned the land at the time of his demise so as to bequeath the same to
petitioner Francisco as his sole heir, by now, the rule is firmly settled that an action for re-conveyance based on fraud
must be filed within ten (10) years from discovery of the fraud which as to titled lands referred to the registration of the title
with the register of deeds.42 "An action for re-conveyance is a legal remedy granted to a landowner whose property has
been wrongfully or erroneously registered in anothers name, but then the action must be filed within ten years from the
issuance of the title since such issuance operates as a constructive notice." 43 In addition, the action is barred by laches
because of the long delay before the filing of the case.44

Fourth Issue: No stare decisis

The next issue is whether the Court of Appeals erred in not ruling that the decision in Ramon Cabrera-Graciano Ingles vs.
Cebu Country Club, Inc., CA-G. R. No. 65559-R, October 31, 1981, was binding on respondent Cebu Country Club, Inc.
as to the land in question.

Petitioners assert that as the Court of Appeals annulled Cebu Country Club, Inc.s title in the Cabrera-Ingles case, so too
must the title in this case be declared void. In the first place, there is no identity of parties; secondly, neither the titles to
nor the parcels of land involved are the same. Consequently, the doctrine of res-judicata does not apply.45 Momentarily
casting aside the doctrine of res-judicata, there is an important moiety in the Cabrera-Ingles case. There, the Director of
Lands, after the administrative reconstitution of the title, issued a directive to the Register of Deeds to register the lot in
question in favor of Graciano Ingles.46 This superseded the administrative reconstitution, rendering allegations of fraud
irrelevant. Here, the Director of Lands did not issue a directive to register the land in favor of Tomas N. Alonso. And
worse, the sales patent and corresponding deed of sale executed in 1926 are now stale. 47

Petitioners further contend that the Supreme Courts minute resolution refusing to review that decision is equivalent to a
judgment on the merits. The minute resolution may amount to a final action on the case but it is not a precedent. 48 It can
not bind non-parties to the action. To restate, the rule is that: (1) a judgment in rem is binding upon the whole world, such
as a judgment in a land registration case or probate of a will; (2) a judgment in personam is binding upon the parties and
their successors in interest but not upon strangers.49 A judgment directing a party to deliver possession of a property to
another is in personam; it is binding only against the parties and their successors in interest by title subsequent to the
commencement of the action.50 "Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in
personam, but being against the person in respect of the res, these proceedings are characterized as quasi in rem.
The judgment in such proceedings is conclusive only between the parties."51 In this case, the action below is basically
one for declaration of nullity of title and recovery of ownership of real property, or re-conveyance. "An action to recover a
parcel of land is a real action but it is an action in personam, for it binds a particular individual only although it concerns
the right to a tangible thing."52 "Any judgment therein is binding only upon the parties properly impleaded." 53

What is more, the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it
realized that the Court erred in the prior decisions. "After all, more important than anything else is that this Court should be
right."54

Fifth Issue: Award of attorneys fees

The final issue raised is whether or not the Court of Appeals erred in awarding in favor of the Cebu Country Club, Inc.
attorneys fees of P400,000.00 as damages and P51,000.00 as litigation expenses. 55

An award of attorneys fees and expenses of litigation is proper under the circumstances provided for in Article 2208 of the
Civil Code, one of which is when the court deems it just and equitable that attorneys fees and expenses of litigation
should be recovered56 and when the civil action or proceeding is clearly unfounded and where defendant acted in gross
and evident bad faith.57 "The award of attorneys fees as damages is the exception rather than the rule; it is not to be
given to the defendant every time the latter prevails. The right to litigate is so precious that a penalty should not be
charged on those who may exercise it erroneously, unless, of course such party acted in bad faith." 58 In this case,
however, we would rather not award attorneys fees and expenses of litigation in the absence of showing of gross and
evident bad faith in filing the action.59

The Judgment

WHEREFORE, we DENY the petition for review. However, we SET ASIDE the decision of the Court of Appeals60and that
of the Regional Trial Court, Cebu City, Branch 08.61

IN LIEU THEREOF, we DISMISS the complaint and counterclaim of the parties in Civil Case No. CEB 12926 of the trial
court. We declare that Lot No. 727 D-2 of the Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251,
232, and 253 legally belongs to the Government of the Philippines.

No costs.

SO ORDERED.
G.R. Nos. 162335 & 162605 December 12, 2005

SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK, FERNANDO M. MANOTOK, FAUSTO MANOTOK III, MA.
MAMERTA M. MANOTOK, PATRICIA L. TIONGSON, PACITA L. GO, ROBERTO LAPERAL III, MICHAEL MARSHALL
V. MANOTOK, MARY ANN MANOTOK, FELISA MYLENE V. MANOTOK, IGNACIO MANOTOK, JR., MILAGROS V.
MANOTOK, SEVERINO MANOTOK III, ROSA R. MANOTOK, MIGUEL A.B. SISON, GEORGE M. BOCANEGRA, MA.
CRISTINA E. SISON, PHILIPP L. MANOTOK, JOSE CLEMENTE L. MANOTOK, RAMON SEVERINO L. MANOTOK,
THELMA R. MANOTOK, JOSE MARIA MANOTOK, JESUS JUDE MANOTOK, JR. and MA. THERESA L. MANOTOK,
represented by their Attorney-in-fact, Rosa R. Manotok, Petitioners,
vs.
HEIRS OF HOMER L. BARQUE, represented by TERESITA BARQUE HERNANDEZ, Respondents.

DECISION

YNARES-SANTIAGO, J.:

These consolidated petitions for review assail, in G.R. No. 162335, the February 24, 2004 Amended Decision 1 of the Third
Division of the Court of Appeals in CA-G.R. SP No. 66642, ordering the Register of Deeds of Quezon City to cancel
petitioners TCT No. RT-22481 and directing the Land Registration Authority (LRA) to reconstitute respondents TCT No.
210177; and in G.R. No. 162605, the November 7, 2003 Amended Decision2 of the Special Division of Five of the Former
Second Division in CA-G.R. SP No. 66700 directing the Register of Deeds of Quezon City to cancel petitioners TCT No.
RT-22481, and the LRA to reconstitute respondents TCT No. T-210177 and the March 12, 2004 Resolution3 denying the
motion for reconsideration.

The facts as found by the Court of Appeals4 are as follows:

Petitioners, (respondents herein) as the surviving heirs of the late Homer Barque, filed a petition with the LRA for
administrative reconstitution of the original copy of TCT No. 210177 issued in the name of Homer L. Barque, which was
destroyed in the fire that gutted the Quezon City Hall, including the Office of the Register of Deeds of Quezon City,
sometime in 1988. In support of the petition, petitioners submitted the owners duplicate copy of TCT No. 210177, real
estate tax receipts, tax declarations and the Plan FLS 3168 D covering the property.

Upon being notified of the petition for administrative reconstitution, private respondents (petitioners herein) filed their
opposition thereto claiming that the lot covered by the title under reconstitution forms part of the land covered by their
reconstituted title TCT No. RT-22481, and alleging that TCT No. 210177 in the name of petitioners predecessors-in-
interest is spurious.

On June 30, 1997, Atty. Benjamin M. Bustos, as reconstituting officer, denied the reconstitution of TCT No. 2101775 on
grounds that:

1. Lots 823-A and 823-B, Fls-3168-D, containing areas of 171,473 Sq. Mtrs. and 171,472 Sq. Mtrs., respectively, covered
by TCT No. 210177, appear to duplicate Lot 823 Piedad Estate, containing an area of 342,945 Sq. Mtrs., covered by TCT
No. 372302 registered in the name of Severino M. Manotok, et. al., reconstituted under Adm. Reconstitution No. Q-213
dated February 01, 1991;

2. The submitted plan Fls-3168-D is a spurious document as categorically stated by Engr. Privadi J.G. Dalire, Chief,
Geodetic Surveys Division, Land Management Bureau, in his letter dated February 19, 1997. 6

Respondents motion for reconsideration was denied in an order7 dated February 10, 1998 hence they appealed to the
LRA.

The LRA ruled that the reconstituting officer should not have required the submission of documents other than the owners
duplicate certificate of title as bases in denying the petition and should have confined himself with the owners duplicate
certificate of title.8 The LRA further declared:

Based on the documents presented, petitioners have established by clear and convincing evidence that TCT NO. 210177
was, at the time of the destruction thereof, valid, genuine, authentic and effective. Petitioners duly presented the original
of the owners duplicate copy of TCT No. 210177 .... The logbook of the Register of Deeds of Quezon City lists TCT No.
210177 as among the titles lost .... The Register of Deeds of Quezon City himself acknowledged the existence and
authenticity of TCT No. 210177 when he issued a certification to the effect that TCT No. 210177 was one of the titles
destroyed and not salvaged from the fire that gutted the Quezon City Hall on 11 June 1988 ....

It is likewise noteworthy that the technical description and boundaries of the lot reflected in TCT No. 210177 absolutely
conform to the technical description and boundaries of Lot 823 Piedad Estate ... as indicated in the B. L. Form No. 28-37-
R dated 11-8-94 and B. L. Form No. 31-10 duly issued by the Bureau of Lands ....

It therefore becomes evident that the existence, validity, authenticity and effectivity of TCT No. 210177 was established
indubitably and irrefutably by the petitioners. Under such circumstances, the reconstitution thereof should be given due
course and the same is mandatory.9

It would be necessary to underscore that the certified copy of Plan FLS 3168 D was duly issued by the office of Engr.
Ernesto Erive, Chief, Surveys Division LMS-DENR-NCR whose office is the lawful repository of survey plans for lots
situated within the National Capital Region including the property in question. Said plan was duly signed by the custodian
thereof, Carmelito Soriano, Chief Technical Records and Statistics Section, DENR-NCR. Said plan is likewise duly
supported by Republic of the Philippines Official Receipt No. 2513818 Q dated 9-23-96 .... Engr. Erive in his letter dated
28 November 1996 addressed to Atty. Bustos confirmed that a microfilm copy of Plan FLS 3168D is on file in the
Technical Records and Statistics Section of his office. Engr. Dalire, in his letter dated 2 January 1997 addressed to Atty.
Bustos even confirmed the existence and authenticity of said plan.

The claim of Engr. Dalire in his letter dated 19 February 1997 that his office has no records or information about Plan FLS
3168-D is belied by the certified copy of the computer print-out duly issued by the Bureau of Lands indicating therein that
FLS 3168D is duly entered into the microfilm records of the Bureau of Lands and has been assigned Accession Number
410436 appearing on Page 79, Preliminary Report No. 1, List of Locator Cards and Box Number 0400 and said computer
print-out is duly supported by an Offical Receipt .

The said Plan FLS 3168D is indeed authentic and valid coming as it does from the legal repository and duly signed by the
custodian thereof. The documentary evidence presented is much too overwhelming to be simply brushed aside and be
defeated by the fabricated statements and concoctions made by Engr. Dalire in his 19 February 1997 letter. 10

Nevertheless, notwithstanding its conclusion that petitioners title was fraudulently reconstituted, the LRA noted that it is
only the Regional Trial Court (RTC) which can declare that the same was indeed fraudulently reconstituted. It thus opined
that respondents title may only be reconstituted after a judicial declaration that petitioners title was void and should
therefore be cancelled.11

The dispositive portion of the LRAs decision reads:

WHEREFORE, in view of the foregoing, it is hereby ordered that reconstitution of TCT No. 210177 in the name of Homer
L. Barque, Sr. shall be given due course after cancellation of TCT No. RT-22481 (372302) in the name of Manotoks upon
order of a court of competent jurisdiction.

SO ORDERED.12

Petitioners filed a motion for reconsideration which was opposed by respondents with a prayer that reconstitution be
ordered immediately.

On June 14, 2001, petitioners motion for reconsideration and respondents prayer for immediate reconstitution were
denied.13

From the foregoing, respondents filed a petition for review14 with the Court of Appeals docketed as CA-G.R. SP No. 66700
and praying that the LRA be directed to immediately reconstitute TCT No. 210177 without being subjected to the condition
that petitioners TCT No. RT-22481 [372302] should first be cancelled by a court of competent jurisdiction.15 Petitioners
likewise filed a petition for review with the Court of Appeals docketed as CA-G.R. SP No. 66642.
In CA-G.R. SP No. 66700, the Second Division of the Court of Appeals rendered a Decision16 on September 13, 2002, the
dispositive portion of which reads:

WHEREFORE, the foregoing premises considered the assailed Resolution of the LRA dated June 24, 1998 is AFFIRMED
in toto and the petition for review is ordered DISMISSED. No pronouncement as to costs.

SO ORDERED.17

Respondents moved for reconsideration.18 On November 7, 2003, the Special Division of Five of the Former Second
Division rendered an Amended Decision in CA-G.R. SP No. 66700, the dispositive portion of which reads:

WHEREFORE, our decision dated 13 September 2002 is hereby reconsidered. Accordingly, the Register of Deeds of
Quezon City is hereby directed to cancel TCT No. RT-22481 of private respondents and the LRA is hereby directed to
reconstitute forthwith petitioners valid, genuine and existing Certificate of Title No. T-210177.

No pronouncement as to costs.

SO ORDERED.19

Petitioners motion for reconsideration of the amended decision in CA-G.R. SP No. 66700 was denied,20 hence, this
petition docketed as G.R. No. 162605.

Meanwhile, in CA-G.R. SP No. 66642, the Third Division of the Court of Appeals rendered a Decision 21 on October 29,
2003, the dispositive portion of which reads:

WHEREFORE, the petition is hereby DENIED. The Resolution of the LRA dated 24 June 1998 is hereby AFFIRMED.

SO ORDERED.22

In so ruling, the Third Division of the Court of Appeals declared that the LRA correctly deferred in giving due course to the
petition for reconstitution since there is yet no final judgment upholding or annulling respondents title. 23

Respondents motion for reconsideration was granted by the Third Division of the Court of Appeals on February 24, 2004,
thus:

WHEREFORE, the Motion for Reconsideration is hereby GRANTED. The Decision of this Court dated 29 October 2003 is
RECONSIDERED and a new one is entered ordering the Register of Deeds of Quezon City to cancel petitioners TCT No.
RT-22481 and directing the LRA to reconstitute forthwith respondents TCT No. T-210177.

SO ORDERED.24

From the foregoing decisions of the Court of Appeals in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642, petitioners
filed separate petitions for review before this Court docketed as G.R. No. 162605 and G.R. No. 162335, respectively.

In G.R. No. 162605, petitioners argue that:

THE MAJORITY JUSTICES ACTED WITHOUT JURISDICTION IN ORDERING THE CANCELLATION OF

PETITIONERS EXISTING TITLE, CONSIDERING THAT:

a. THEY ORDERED THE CANCELLATION OF TITLE DESPITE THE FACT THAT THE SAME IS NOT PART OF THE
RELIEF SOUGHT IN A RECONSTITUTION PROCEEDINGS.

b. THEY ALLOWED A COLLATERAL ATTACK ON A TORRENS CERTIFICATE OF TITLE; and

c. THE COURT OF APPEALS, IN RESOLVING AN APPEAL OF THE DECISION OF THE LAND REGISTRATION
AUTHORITY, DOES NOT HAVE JURISDICTION TO ORDER THE CANCELLATION OF TITLE, SINCE ONLY A
PROPER REGIONAL TRIAL COURT CAN ORDER THE ANNULMENT/CANCELLATION OF A TORRENS TITLE. BY
ALLOWING A "SHORT CUT", THE MAJORITY JUSTICES DEPRIVED THE PETITIONERS OF THEIR PROPERTY AND
THEIR CONSTITUTIONALLY PROTECTED RIGHT TO DUE PROCESS OF LAW.

II

THE MAJORITY JUSTICES GRAVELY MISAPPLIED THE RULING OF THIS HONORABLE COURT IN ORTIGAS V.
VELASCO, CONSIDERING THAT:

a. IN THE ORTIGAS CASE, THERE WERE TWO TITLES EXISTING OVER THE SAME PARCEL OF LAND, AS A
RESULT OF THE RECONSTITUTED TITLE ISSUED IN THE NAME OF MOLINA. IN THE INSTANT CASE, ONLY
PETITIONERS HOLD TITLE TO THE PROPERTY IN QUESTION, AS RESPONDENTS ARE MERELY TRYING TO
HAVE TITLE RECONSTITUTED IN THEIR NAMES.

b. IN ORTIGAS, THERE WERE SEVERAL DECISIONS OF THE SUPREME COURT WHICH PREVIOUSLY RESOLVED
THE ISSUE OF OWNERSHIP OF ORTIGAS PROPERTY. HENCE, THERE WAS SUFFICIENT GROUND TO ANNUL
MOLINAS TITLE OUTRIGHT. IN THE INSTANT CASE, THERE ARE NO SUCH DECISIONS IN FAVOR OF
RESPONDENTS WHICH WOULD JUSTIFY THE CANCELLATION OF THE TITLE OF PETITIONERS WITHOUT ANY
HEARING.25

In G.R. No. 162335, petitioners raise the following issues:

I. THE HONORABLE COURT OF APPEALS (THIRD DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AND
GROSS IGNORANCE OF THE LAW IN ORDERING THE LAND REGISTRATION AUTHORITY TO CANCEL TCT NO.
RT-22481 OF PETITIONERS MANOTOK NOTWITHSTANDING THE FACT THAT SAID COURT WAS FULLY
COGNIZANT THAT IT HAS NO JURISDICTION TO EXERCISE SUCH AUTHORITY AND POWER AND THE LAND
REGISTRATION AUTHORITY IS EQUALLY DEVOID OF JURISDICTION ON THE MATTER BECAUSE UNDER THE
JUDICIARY REORGANIZATION ACT OF 1980 SPECIFICALLY SECTION 19 (2) THEREOF, ONLY THE REGIONAL
TRIAL COURTS HAVE EXCLUSIVE ORIGINAL JURISDICTION OVER CIVIL ACTIONS WHICH INVOLVES TITLE TO,
OR POSSESSION OF, REAL PROPERTY, OR ANY INTEREST THEREIN.

II. THE HONORABLE COURT OF APPEALS (THIRD DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AND
GROSS IGNORANCE OF THE LAW IN INVOKING EQUITABLE CONSIDERATION TO JUSTIFY ITS CHALLENGED
AMENDED DECISION DATED FEBRUARY 24, 2004 DIRECTING LRA TO CANCEL PETITIONERS MANOTOKS TITLE
NOTWITHSTANDING THE FACT, AS STATED, THE LAW EXPLICITLY VESTS EXCLUSIVE ORIGINAL JURISDICTION
TO THE REGIONAL TRIAL COURTS OVER CIVIL ACTIONS WHICH INVOLVES TITLE TO, OR POSSESSION OF,
REAL PROPERTY, OR ANY INTEREST THEREIN.

III. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR IN EXCESS OF JURISDICTION IN FAILING TO ORDER THE SETTING ASIDE OF THE CHALLENGED
RESOLUTION DATED JUNE 24, 1998 OF RESPONDENT LAND REGISTRATION AUTHORITY IN LRC ADMIN. CASE
NO. Q-547 [97] VIEWED FROM THE FACT THAT SAID RESOLUTION OF LRA IS PATENTLY AT WAR WITH LAW
AND CONTROLLING JURISPRUDENCE THAT PROHIBITS RECONSTITUTION OF TITLE BY THIRD PARTY
ALLEGED TO HAVE BEEN LOST OR DESTROYED IF ANOTHER VALID TITLE IS EXISTING COVERING THE LAND
SUBJECT THEREOF.

IV. THE LRA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION IN ORDERING THE RECONSTITUTION OF THE TITLE OF HOMER BARQUE, SR. SUBJECT ONLY
TO THE CONDITION THAT THE TITLE OF PETITIONERS MANOTOK SHOULD FIRST BE ORDERED CANCELLED
BY COURT OF COMPETENT JURISDICTION IN THE FACE OF THE GLARING FACTS THAT SAID TITLE IS HIGHLY
SUSPECT AND BEARS BADGES OF FABRICATION AND FALSIFICATION AND THEREFORE NO OTHER LOGICAL
AND CREDIBLE CONCLUSION CAN BE DRAWN EXCEPT THAT IT IS A FAKE AND SPURIOUS TITLE.

V. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OF IN EXCESS OF JURISDICTION IN ALLOWING RESPONDENTS MOTION FOR RECONSIDERATION WHICH WAS
CLEARLY FILED OUT OF TIME.26

On August 2, 2004, the petition in G.R. No. 162605 was consolidated with the petition in G.R. No. 162335. 27
In sum, petitioners contend that (a) the LRA has no authority to annul their title; (b) the reconstitution of respondents
Torrens title would be a collateral attack on petitioners existing title; (c) they were not given the opportunity to be heard,
specifically the chance to defend the validity of their Torrens title; (d) the Court of Appeals, in resolving the appeal from
the LRA, has no jurisdiction to order the cancellation of petitioners title; and (e) the ruling in Ortigas was misapplied.

The petitions must be denied.

The LRA properly ruled that the reconstituting officer should have confined himself to the owners duplicate certificate of
title prior to the reconstitution. Section 3 of Republic Act (RA) No. 2628 clearly provides:

Section 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be
available, in the following order:

(a) The owners duplicate of the certificate of title;

....

When respondents filed the petition for reconstitution, they submitted in support thereof the owners duplicate certificate of
title, real estate tax receipts and tax declaration. Plainly, the same should have more than sufficed as sources for the
reconstitution pursuant to Section 3 of RA No. 26 which explicitly mandates that the reconstitution shall be made following
the hierarchy of sources as enumerated by law. In addition, Section 12 of the same law requires that the petition shall
be accompanied with a plan and technical description of the property only if the source of the reconstitution is Section 3(f)
of RA No. 26. Thus:

Section 12. Provided, That in case the reconstitution is to be made exclusively from sources enumerated in section
2(f) or 3(f) of this Act, the petition shall further be accompanied with a plan and technical description of the property duly
approved by the Chief of the General Land Registration Office, or with a certified copy of the description taken from a prior
certificate of title covering the same property.29

Since respondents source of reconstitution is the owners duplicate certificate of title, there is no need for the
reconstituting officer to require the submission of the plan, much less deny the petition on the ground that the submitted
plan appears to be spurious. By enumerating the hierarchy of sources to be used for the reconstitution, it is the intent of
the law to give more weight and preference to the owners duplicate certificate of title over the other enumerated sources.

The factual finding of the LRA that respondents title is authentic, genuine, valid, and existing, while petitioners title is
sham and spurious, as affirmed by the two divisions of the Court of Appeals, is conclusive before this Court. It should
remain undisturbed since only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court.

Findings of fact of administrative bodies are accorded respect, even finality by this Court and, when affirmed by the Court
of Appeals, are no longer reviewable except only for very compelling reasons. Basic is the rule that factual findings of
agencies exercising quasi-judicial functions are accorded not only respect but even finality, aside from the
consideration that this Court is essentially not a trier of facts. 30

Such questions as whether certain items of evidence should be accorded probative value or weight, or rejected as feeble
or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a
proposition in issue, are without doubt questions of fact. Whether or not the body of proofs presented by a party, weighed
and analyzed in relation to contrary evidence submitted by adverse party, may be said to be strong, clear and convincing;
whether or not certain documents presented by one side should be accorded full faith and credit in the face of protests as
to their spurious character by the other side; whether or not inconsistencies in the body of proofs of a party are of such
gravity as to justify refusing to give said proofs weight all these are issues of fact. Questions like these are not
reviewable by this court which, as a rule, confines its review of cases decided by the Court of Appeals only to questions of
law raised in the petition and therein distinctly set forth.31 A petition for review should only cover questions of law.
Questions of fact are not reviewable.32

In Dolfo v. Register of Deeds for the Province of Cavite,33 this Court categorically declared:

Second. Both the trial court and the Court of Appeals made a factual finding that petitioners title to the land is of doubtful
authenticity.
Having jurisdiction only to resolve questions of law, this Court is bound by the factual findings of the trial court and the
Court of Appeals....

In view of the foregoing, it is no longer necessary to remand the case to the RTC for the determination of which title,
petitioners' or respondents', is valid or spurious. This has been ruled upon by the LRA and duly affirmed by the two
divisions of the Court of Appeals.

The LRA has the jurisdiction to act on petitions for administrative reconstitution. It has the authority to review, revise,
reverse, modify or affirm on appeal the decision of the reconstituting officer. The function is adjudicatory in nature it can
properly deliberate on the validity of the titles submitted for reconstitution. Logically, it can declare a title as sham or
spurious, or valid on its face. Otherwise, if it cannot make such declaration, then there would be no basis for its decision to
grant or deny the reconstitution. The findings of fact of the LRA, when supported by substantial evidence, as in this case,
shall be binding on the Court of Appeals.34

In the reconstitution proceedings, the LRA is bound to determine from the evidence submitted which between or among
the titles is genuine and existing to enable it to decide whether to deny or approve the petition. Without such authority, the
LRA would be a mere robotic agency clothed only with mechanical powers.

The Court of Appeals also properly exercised its appellate jurisdiction over the judgment of the LRA. Under Sections 1
and 3, Rule 43 of the Rules of Court, the appellate court has jurisdiction on appeals from judgments or final orders of the
LRA, whether the appeal involves questions of fact, of law, or mixed questions of fact and law.

Indeed, it would be needlessly circuitous to remand the case to the RTC to determine anew which of the two titles is sham
or spurious and thereafter appeal the trial courts ruling to the Court of Appeals. After all, the LRA and the two divisions of
the appellate court have already declared that petitioners title is forged. In Mendoza v. Court of Appeals,35 we ruled that:

Now, technically, the revocation and cancellation of the deed of sale and the title issued in virtue thereof in de los Santos
favor should be had in appropriate proceedings to be initiated at the instance of the Government. However, since all the
facts are now before this Court, and it is not within de los Santos power in any case to alter those facts at any
other proceeding, or the verdict made inevitable by said facts, for this Court to direct at this time that
cancellation proceedings be yet filed to nullify the sale to de los Santos and his title, would be needlessly
circuitous and would unnecessarily delay the termination of the controversy at bar, .... This Court will therefore
make the adjudication entailed by the facts here and now, without further proceedings, as it has done in other
cases in similar premises.

No useful purpose will be served if a case or the determination of an issue in a case is remanded to the trial court only to
have its decision raised again to the Court of Appeals and then to the Supreme Court. The remand of the case or of an
issue to the lower court for further reception of evidence is not necessary where the Court is in position to resolve the
dispute based on the records before it and particularly where the ends of justice would not be subserved by the remand
thereof.36

The Register of Deeds, the LRA and the Court of Appeals have jurisdiction to act on the petition for administrative
reconstitution. The doctrine laid down in Alabang Dev. Corp., et al. v. Hon. Valenzuela, etc., et al.37 does not apply in the
instant case. In Alabang, the Court stressed that:

[L]ands already covered by duly issued existing Torrens Titles cannot be the subject of petitions
for reconstitution of allegedly lost or destroyed titles filed by third parties without first securing by final judgment
the cancellation of such existing titles. The courts simply have no jurisdiction over petitions by such third
parties for reconstitution of allegedly lost or destroyed titles over lands that are already covered by duly issued subsisting
titles in the names of their duly registered owners. The very concept of stability and indefeasibility of titles covered under
the Torrens System of registration rules out as anathema the issuance of two certificates of title over the same land to two
different holders thereof. 38

The Alabang ruling was premised on the fact that the existing Torrens title was duly issued and that there is only one title
subsisting at the time the petition for reconstitution was filed. In the instant case, it cannot be said that petitioners title
was duly issued much less could it be presumed valid considering the findings of the LRA and the Court of Appeals that
the same is sham and spurious.

The Court of Appeals properly applied the doctrine laid down in Ortigas in refusing to remand the case to the trial court.
As expressly declared in Ortigas & Company Limited Partnership v. Velasco:39
Ordinarily, the relief indicated by the material facts would be the remand of the reconstitution case (LRC No. Q-5405) to
the Court of origin with instructions that Ortigas and the Solicitor Generals appeals from the judgment rendered therein,
which were wrongly disallowed, be given due course and the records forthwith transmitted to the appellate tribunal. This,
in fact, is a relief alternatively prayed for by petitioner Ortigas. Considering however the fatal infirmities afflicting Molinas
theory or cause of action, evident from the records before this Court, such a remand and subsequent appeal proceedings
would be pointless and unduly circuitous. Upon the facts, it is not possible for Molinas cause to prosper. To defer
adjudication thereon would be unwarranted and unjust.

The same rationale should apply in the instant case. As already discussed, the validity of respondents and petitioners
title have been squarely passed upon by the LRA and reviewed and affirmed by the Court of Appeals, which factual
findings are no longer reviewable by this Court.

A careful examination of the case of Spouses Cayetano, et al. v. CA, et al.,40 where this Court, as claimed by petitioners,
have affirmed their title over the disputed property, would reveal that the sole issue resolved therein is whether or not a
tenancy relationship exists between the parties.41 There was no adjudication on ownership. In fact, it cannot even be
discerned if the property subject of the Spouses Cayetano case refers to the property subject of the instant controversy.

There is no basis in the allegation that petitioners were deprived of "their property" without due process of law when the
Court of Appeals ordered the cancellation of their Torrens title, even without a direct proceeding in the RTC. As already
discussed, there is no need to remand the case to the RTC for a re-determination on the validity of the titles of
respondents and petitioners as the same has been squarely passed upon by the LRA and affirmed by the appellate court.
By opposing the petition for reconstitution and submitting their administratively reconstituted title, petitioners acquiesced to
the authority and jurisdiction of the reconstituting officer, the LRA and the Court of Appeals, and recognized their authority
to pass judgment on their title. All the evidence presented was duly considered by these tribunals. There is thus no basis
to petitioners claim that they were deprived of their right to be heard and present evidence, which is the essence of due
process.

As held in Yusingco v. Ong Hing Lian:42

Therefore, it appearing from the records that in the previous petition for reconstitution of certificates of title, the parties
acquiesced in submitting the issue of ownership for determination in the said petition, and they were given the full
opportunity to present their respective sides of the issues and evidence in support thereof, and that the evidence
presented was sufficient and adequate for rendering a proper decision upon the issue, the adjudication of the issue of
ownership was valid and binding.

The reconstitution would not constitute a collateral attack on petitioners title which was irregularly and illegally issued in
the first place.43 As pertinently held in Dolfo v. Register of Deeds for the Province of Cavite:44

The rule that a title issued under the Torrens System is presumed valid and, hence, is the best proof of ownership of a
piece of land does not apply where the certificate itself is faulty as to its purported origin.

In this case, petitioner anchors her arguments on the premise that her title to the subject property is indefeasible because
of the presumption that her certificate of title is authentic. However, this presumption is overcome by the evidence
presented, consisting of the LRA report that TCT No. T-320601 was issued without legal basis

Thus, petitioner cannot invoke the indefeasibility of her certificate of title. It bears emphasis that the Torrens system does
not create or vest title but only confirms and records one already existing and vested. Thus, while it may be true, as
petitioner argues, that a land registration court has no jurisdiction over parcels of land already covered by a certificate of
title, it is equally true that this rule applies only where there exists no serious controversy as to the authenticity of the
certificate.

Under similar circumstances, this Court has ruled that wrongly reconstituted certificates of title secured through fraud and
misrepresentation cannot be the source of legitimate rights and benefits. 45

WHEREFORE, the petitions are DENIED. In G.R. No. 162335, the February 24, 2004 Amended Decision of the Third
Division of the Court of Appeals in CA-G.R. SP No. 66642, ordering the Register of Deeds of Quezon City to cancel
petitioners TCT No. RT-22481 and directing the Land Registration Authority to reconstitute respondents TCT No.
210177; and in G.R. No. 162605, the November 7, 2003 Amended Decision of the Special Division of Five of the Former
Second Division in CA-G.R. SP No. 66700 directing the Register of Deeds of Quezon City to cancel petitioners TCT No.
RT-22481, and the Land Registration Authority to reconstitute respondents TCT No. T-210177 and the March 12, 2004
Resolution denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.

G.R. Nos. 162335 & 162605 December 18, 2008

SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK, FERNANDO M. MANOTOK III, MA.MAMERTA M. MANOTOK,
PATRICIA L. TIONGSON, PACITA L. GO, ROBERTO LAPERAL III, MICHAELMARSHALL V. MANOTOK, MARY ANN
MANOTOK, FELISA MYLENE V. MANOTOK, IGNACIO MANOTOK, JR., MILAGROS V. MANOTOK, SEVERINO
MANOTOK III, ROSA R. MANOTOK, MIGUEL A.B. SISON, GEORGE M. BOCANEGRA, CRISTINA E. SISON,
PHILIPP L. MANOTOK, JOSE CLEMENTE L. MANOTOK, RAMON SEVERINO L. MANOTOK, THELMA R.
MANOTOK, JOSE MARIA MANOTOK, JESUS JUDE MANOTOK, JR., and MA. THERESA L. MANOTOK,
represented by their Attorney-in-fact, Rosa R. Manotok, petitioners,
vs.
HEIRS OF HOMER L. BARQUE, Represented by TERESITA BARQUE HERNANDEZ, respondents.

RESOLUTION

TINGA, J.:

The perceived advantages of the Torrens system of registration of land titles have helped stabilize land ownership in the
Philippines. Its underlying principle is security with facility in dealing with land. 1 Its fundamental purpose is to quiet title to
land, to perpetually enjoin any question in the legality of the title, 2 hence, the titles issued under the system are
indefeasible. Yet the Torrens system is imperfect in that it remains susceptible to fraud, either in the original registration
proceedings or in subsequent transactions.3

These petitions feature apparently fraudulent practices relating to the attempts at registration of the subject property.
Necessarily, they call for the correct application of entrenched principles in land registration. At the same time, they afford
this Court the opportunity to again defend the Torrens system against unscrupulous elements who use its formalities to
actualize the theft of property, and to exert judicial might in ensuring that fraud does not prevail in the end.

These petitions were referred to the Court en banc by the Special First Division which had initially ruled on them, most
comprehensively in a Decision dated 12 December 2005.4 They were accepted by the Court en banc in a Resolution
dated 26 July 2006. Subsequently, the parties presented their various contentions before the Court in an oral argument
held on 24 July 2007, followed by the submission of their respective memoranda. While the cases were under
consideration of the Court en banc, the participation of the Office of the Solicitor General was required, 5 and a set of new
parties was allowed leave to intervene.6

The antecedent facts are stated in full in our 2005 Decision, but are summarized herein for convenience.

2 The LRA further found anomalies in the Manotoks title. It observed that:

Based on the documents presented, petitioners have established by clear and convincing evidence that TCT NO.
210177 was, at the time of the destruction thereof, valid, genuine, authentic and effective. Petitioners duly
presented the original of the owners duplicate copy of TCT No. 210177 .... The logbook of the Register of Deeds
of Quezon City lists TCT No. 210177 as among the titles lost .... The Register of Deeds of Quezon City himself
acknowledged the existence and authenticity of TCT No. 210177 when he issued a certification to the effect that
TCT No. 210177 was one of the titles destroyed and not salvaged from the fire that gutted the Quezon City Hall
on 11 June 1988 ....

It is likewise noteworthy that the technical description and boundaries of the lot reflected in TCT No. 210177
absolutely conform to the technical description and boundaries of Lot 823 Piedad Estate ... as indicated in the B.
L. Form No. 28-37-R dated 11-8-94 and B. L. Form No. 31-10 duly issued by the Bureau of Lands ....

It therefore becomes evident that the existence, validity, authenticity and effectivity of TCT No. 210177 was
established indubitably and irrefutably by the petitioners. Under such circumstances, the reconstitution thereof
should be given due course and the same is mandatory.
 It would be necessary to underscore that the certified copy of Plan FLS 3168 D was duly issued by the office of
Engr. Ernesto Erive, Chief, Surveys Division LMS-DENR-NCR whose office is the lawful repository of survey
plans for lots situated within the National Capital Region including the property in question. Said plan was duly
signed by the custodian thereof, Carmelito Soriano, Chief Technical Records and Statistics Section, DENR-NCR.
Said plan is likewise duly supported by Republic of the Philippines Official Receipt No. 2513818 Q dated 9-23-96
.... Engr. Erive in his letter dated 28 November 1996 addressed to Atty. Bustos confirmed that a microfilm copy
of Plan FLS 3168D is on file in the Technical Records and Statistics Section of his office. Engr. Dalire, in his letter
dated 2 January 1997 addressed to Atty. Bustos even confirmed the existence and authenticity of said plan.

The claim of Engr. Dalire in his letter dated 19 February 1997 that his office has no records or information about
Plan FLS 3168-D is belied by the certified copy of the computer print-out duly issued by the Bureau of Lands
indicating therein that FLS 3168D is duly entered into the microfilm records of the Bureau of Lands and has been
assigned Accession Number 410436 appearing on Page 79, Preliminary Report No. 1, List of Locator Cards and
Box Number 0400 and said computer print-out is duly supported by an Offical Receipt .

The said Plan FLS 3168D is indeed authentic and valid coming as it does from the legal repository and duly
signed by the custodian thereof. The documentary evidence presented is much too overwhelming to be simply
brushed aside and be defeated by the fabricated statements and concoctions made by Engr. Dalire in his 19
February 1997 letter.

Notwithstanding its conclusion that the Manotok title was fraudulently reconstituted, the LRA noted that only the Regional
Trial Court (RTC) could cancel the Manotok title as a Torrens title. It thus ruled,11 that:

WHEREFORE, in view of the foregoing, it is hereby ordered that reconstitution of TCT No. 210177 in the name of
Homer L. Barque, Sr. shall be given due course after cancellation of TCT No. RT-22481 (372302) in the name of
Manotoks upon order of a court of competent jurisdiction.

SO ORDERED.

The Manotoks filed a motion for reconsideration, which was opposed by the Barques with a prayer that the reconstitution
be ordered immediately. The LRA denied12 the Manotoks motion for reconsideration and the Barques prayer for
immediate reconstitution.

Both the Manotoks and the Barques appealed the LRA decision to the Court of Appeals (CA). The Barques petition for
review13 was docketed as CA-G.R. SP No. 66700, while the Manotoks petition for

review14 was docketed as CA-G.R. SP No. 66642. The Barques prayed that the LRA be directed to immediately
reconstitute the Barque title without being subjected to the condition that the Manotok title should first be cancelled by a
court of competent jurisdiction. On the other hand, the Manotoks argued in their own petition that the LRA erred in
imputing that the Manotok title was spurious and fake.

Meanwhile, in CA-G.R. SP No. 66700, Felicitas Manahan filed a motion for leave to intervene. 15 She sought the dismissal
of the cases in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642 and claimed ownership over the subject property.

On 13 September 2002, the Second Division of the Court of Appeals rendered a Decision 16 in CA-G.R. SP No. 66700,
denying the Barques petition and affirming the LRA Resolution. The Barques filed a motion for
reconsideration.17 Subsequently, the Special Division of Five of the Former Second Division rendered an Amended
Decision18 dated 7 November 2003 wherein it held that:

WHEREFORE, our decision dated 13 September 2002 is hereby reconsidered. Accordingly, the Register of
Deeds of Quezon City is hereby directed to cancel TCT No. RT-22481 of private respondents and the LRA is
hereby directed to reconstitute forthwith petitioners valid, genuine and existing Certificate of Title No. T-210177.19

The Manotoks filed a motion for the reconsideration of the amended decision in CA-G.R. SP No. 66700, but this was
denied.20
On the other hand, as to the Manotoks petition, CA-G.R. SP No. 66642, the Third Division of the Court of Appeals
rendered a Decision21 on 29 October 2003 which affirmed the resolution of the LRA.22 The appellate court held that the
LRA correctly deferred in giving due course to the Barques petition for reconstitution, since there was as yet no final
judgment upholding or annulling the Barque title. The Barques filed a motion for reconsideration of this ruling.23 As had
occurred with the Barques petition, the Third Division of the Court of Appeals granted the Barques motion for
reconsideration and on 24 February 2004, promulgated its Amended Decision24 wherein it held that:

WHEREFORE, the Motion for Reconsideration is hereby GRANTED. The Decision of this Court dated 29 October
2003 is RECONSIDERED and a new one is entered ordering the Register of Deeds of Quezon City to cancel
petitioners TCT No. RT-22481 and directing the LRA to reconstitute forthwith respondents TCT No. T-210177.

Aggrieved with the twin decisions of the Court of Appeals in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642, both
ordering the cancellation of the Manotok title, the Manotoks filed separate petitions for review before this Court docketed
as G.R. No. 162605 and G.R. No. 162335, respectively. On 2 August 2004, the Court ordered the consolidation of G.R.
No. 162605 with G.R. No. 162335.25

On 12 December 2005, the Courts First Division rendered its Decision26 affirming the two decisions of the Court of
Appeals.27 The Manotoks filed a motion for reconsideration, which the Courts First Division denied in a Resolution dated
19 April 2006.28 Thereafter, the Manotoks filed a Motion for Leave to File a Second Motion for Reconsideration, with their
Motion for Reconsideration attached. The Court denied the same in a Resolution dated 19 June 2006, and the Court
further ordered that entry of judgment be made.29 Thus on 2 May 2006, entry of judgment was made in the Book of Entries
of Judgment.30

The Barques filed multiple motions with the Courts First Division concerning the execution of the judgment, including a
Motion for Issuance of Writ of Possession or For Execution.31 In response, the Manotoks filed an Urgent Motion to Refer
Motion for Possession to the Supreme Court En Banc (with prayer to set motion for oral argument). In a Resolution dated
19 July 2006, the Special First Division referred these cases to the Court en banc, and on 26 July 2006, the Court en
banc promulgated a Resolution accepting the cases.32

On 7 September 2006, Felicitas Manahan and Rosendo Manahan filed a motion to intervene, to which was attached their
petition in intervention.33 Movants alleged that the property subject of the petition in G.R. No. 162335 and G.R. No.
162605 was owned by them. They claimed that their predecessor-in-interest, Vicente Manahan, was issued Sales
Certificate No. 511 which covered lot 823 of the Piedad Estate. Moreover, they attached to their petition the findings of the
National Bureau of Investigation (NBI) that the documents of the Manotoks were not as old as they were purported to
be.34 The Director of the Legal Division of the Land Management Bureau (LMB) recommended to the Director of the LMB
that:

steps be taken in the proper court for the cancellation of TCT No. RT-22481(372302) and all its derivative titles
so that the land covered may be reverted to the State.35

Ultimately, the Court found it necessary to involve the Office of the Solicitor General (OSG) in these cases, directing the
OSG to file its Comment. The OSG filed its Comment on 04 April 2007. Oral arguments were eventually held on 24 July
2007.

After the oral arguments, the Court required the parties, the intervenors, and the Solicitor General to submit their
respective memoranda.

As can be gleaned from the foregoing statement of facts, these petitions are attended by a few procedural unorthodoxies,
such as, for example, the Court en bancs move on the Special First Divisions referral for reevaluation of these petitions
when an entry of judgment had already been made in favor of the Barques. Yet the prevailing consensus within the
Court en banc was to proceed with the reevaluation of these cases on a pro hac vice basis. There are good reasons for
the Court to act in such rare manner in these cases. Most urgently, the Court had felt that the previous rulings by the First
Division and the Special First Division warranted either affirmation or modification by the Court acting en banc.

It is a constitutional principle that "no doctrine or principle of law laid down by the [C]ourt in a decision rendered en banc or
in division may be modified or reversed except by the court sitting en banc." It has been argued that the 2005 Decision of
the First Division is inconsistent with precedents of the Court, and leaving that decision alone without the imprimatur of the
Court en banc would lead to undue confusion within the bar and bench, with lawyers, academics and judges quibbling
over whether the earlier ruling of the Division constitutes the current standard with respect to administrative reconstitution
of titles. Our land registration system is too vital to be stymied by such esoteric wrangling, and the administrators and
courts which implement that system do not deserve needless hassle.

The Office of the Solicitor General correctly pointed out that this Court before had sanctioned the recall entries of
judgment.36 The power to suspend or even disregard rules of procedure can be so pervasive and compelling as to alter
even that which this Court itself has already declared to be final. 37 The militating concern for the Court en banc in
accepting these cases is not so much the particular fate of the parties, but the stability of the Torrens system of
registration by ensuring clarity of jurisprudence on the field.

It is beyond contention, even by the parties, that since the Court en banc resolved to accept these petitions in 2006, we
have effectively been reviewing the 12 December 2005 Decision of the Courts First Division, as well as the Resolutions
dated 19 April and 19 June 2006 of that same Division. This Resolution is the result of that review. As earlier stated, we
have opted to do so on a pro hac vice basis to lend much needed jurisprudential clarity as only the Court en banc can
constitutionally provide.

II

In the context of an administrative reconstitution proceeding before the LRA, the Barques have sought that the LRA
exercise the power to cancel the Manotok title and forthwith cause the reconstitution of their own title. The LRA refused to
do so, although it did rule that the Manotok title was spurious and thus subject to cancellation through the proper judicial
proceeding. Upon appellate review of that LRA decision, the Court of Appeals initially upheld the LRAs position, but
ultimately, upon motion for reconsideration, directed the cancellation of the Manotok title and the reconstitution of the
Barque title.

Our succeeding discussion centers on the ordered mechanism for the cancellation of Torrens titles in the Philippines.

To recall, both assailed Amended Decisions of the Court of Appeals notably directed the cancellation of the Manotok title
even as it mandated the reconstitution of the Barque title. The obvious question is whether the Court of Appeals was
empowered to direct the annulment of the Manotok title through the petitions raised before it by the Barques and the
Manotoks. It could not.

Section 48 of Presidential Decree No. 1529, also known as the Property Registration Decree, provides that "[a] certificate
of title shall not be subject to collateral attack [and] cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law."38 Clearly, the cancellation of the Manotok title cannot arise incidentally from the
administrative proceeding for reconstitution of the Barque title even if the evidence from that proceeding revealed the
Manotok title as fake. Nor could it have emerged incidentally in the appellate review of the LRAs administrative
proceeding.

There is no doubt that the Court of Appeals does not have original jurisdiction to annul Torrens titles or to otherwise
adjudicate questions over ownership of property. Its exclusive original jurisdiction is determined by law, particularly by
Batas Pambansa (B.P. 129). Section 9 of that law restricts the exclusive original jurisdiction of the Court of Appeals to
special civil actions and to actions for annulment of judgments of the regional trial court. 39Still, the Court of Appeals did
acquire jurisdiction over the Barques and the Manotoks petitions, albeit in the exercise of its exclusive appellate
jurisdiction40 over the ruling of the LRA, also pursuant to Section 9 of B.P. Blg. 129, as amended. Thus, for the appellate
court to be able to direct the cancellation of a Torrens title in the course of reviewing a decision of the LRA, the LRA itself
must have statutory authority to cancel a Torrens title in the first place.

Note that the Office of the Solicitor General, which acts as counsel for the government and its agencies including the LRA,
refutes the contention that the LRA has jurisdiction to cancel the Manotok title, much less jurisdiction to rule on the validity
of a certificate of title. It invokes the exclusive original jurisdiction of the RTC under Paragraph 2, Section 19 of B.P. Blg.
129, conferring jurisdiction on the RTC over "all civil actions which involve the title to or possession of real property, or any
interest therein x x x." That the RTC has "exclusive original jurisdiction" over actions seeking the cancellation of title to real
property is so cardinal in our remedial law that it is reflected in hundreds if not thousands of examples in jurisprudence.

Nonetheless, we may inquire whether, notwithstanding the statutory delineation of "exclusive original jurisdiction of the
RTC," there is statutory basis for the LRA to exercise jurisdiction over the cancellation of Torrens titles. If there is, we can
perhaps assess such law separately from B.P. Blg. 129.

Section 6 of P.D. No. 1529 enumerates the general functions of the Land Registration Commissioner, as follows:
 SEC. 6. General Functions

(1) The Commissioner of Land Registration shall have the following functions:

(a) Issue decrees of registration pursuant to final judgments of the courts in land registration proceedings
and cause the issuance by the Registers of Deeds of the corresponding certificates of title;

(b) Exercise supervision and control over all Registers of Deeds and other personnel of the Commission;

(c) Resolve cases elevated en consulta by, or on appeal from decision of, Registers of Deeds;

(d) Exercise executive supervision over all clerks of court and personnel of the Court of First Instance
throughout the Philippines with respect to the discharge of their duties and functions in relation to the
registration of lands;

(e) Implement all orders, decisions, and decrees promulgated relative to the registration of lands and
issue, subject to the approval of the Secretary of Justice, all needful rules and regulations therefor;

(f) Verify and approve subdivision, consolidation, and consolidation-subdivision survey plans of properties
titled under Act No. 496 except those covered by P.D. No. 957.

Nowhere in the aforecited provision is it stated that the LRA has the power to cancel titles. Indeed, the Barques are
unable to point to any basis in law that confirms the power of the LRA to effect such cancellation, even under Republic Act
(R.A.) No. 26 as amended by Rep. Act No. 6732, which authorizes the administrative reconstitution of titles in limited
cases. In fact, as we shall see shortly such laws take great care to ensure that a petition for administrative reconstitution
of title will not disturb existing Torrens titles.

It is thus clear that neither the Court of Appeals nor the LRA had jurisdiction to cancel the Manotok title. The next matter of
inquiry is whether the LRA had acted correctly in ordering, conditional as it may have been, the administrative
reconstitution of the Barque title.

Under Rep. Act No. 26 as amended by Rep. Act No. 6732, administrative reconstitution of titles is permitted where the
certificates of titles have been lost due to "flood, fire and other force majeure." The petitioner in such a case is required to
execute an affidavit, containing the following averments:

(1) That no deed or other instrument affecting the property had been presented for registration, or, if there be any,
the nature thereof, the date of its presentation, as well as the names of the parties, and whether the registration of
such deed or instrument is still pending accomplishment;

(2) That the owner's duplicate certificate or co-owner's duplicate is in due form without any apparent intentional
alterations or erasures;

(3) That the certificate of title is not the subject of litigation or investigation, administrative or judicial,
regarding its genuineness or due execution or issuance;

(4) That the certificate of title was in full force and effect at the time it was lost or destroyed;

(5) That the certificate of title is covered by a tax declaration regularly issued by the Assessor's Office; and

(6) That real estate taxes have been fully paid up to at least two (2) years prior to the filing of the petition for
reconstitution.41

Section 19 of Rep. Act No. 26, as amended by Rep. Act No. 6732, further provides:

Sec. 19. If the certificate of title considered lost or destroyed, and subsequently found or recovered, is not in the
name of the same person in whose favor the reconstituted certificate of title has been issued, the Register of
Deeds or the party concerned should bring the matter to the attention of the proper regional trial court, which,
after due notice and hearing, shall order the cancellation of the reconstituted certificate of title and render, with
 respect to the memoranda of new liens and encumbrances, if any, made in the reconstituted certificate of title,
after its reconstitution, such judgment as justice and equity may require: Provided, however, That if the
reconstituted certificate of title has been cancelled by virtue of any deed or instrument, whether voluntary or
involuntary, or by an order of the court, and a new certificate of title has been issued, the procedure prescribed
above, with respect to the memorandum of new liens and encumbrances made on the reconstituted certificate of
title, after its reconstitution, shall be followed with respect to the new certificate of title, and to such new liens and
encumbrances, if any, as may have been on the latter, after the issuance thereof. 42

Rep. Act No. 6732 itself also states:

Section 11. A reconstituted title obtained by means of fraud, deceit or other machination is void ab initio as
against the party obtaining the same and all persons having knowledge thereof.

Section 12. Any person who by means of fraud, deceit or other machination obtains or attempts to obtain a
reconstituted title shall be subject to criminal prosecution and, upon conviction, shall be liable for imprisonment for
a period of not less than two years but not exceeding five years or the payment of a fine of not less than Twenty
thousand pesos but not exceeding Two hundred thousand pesos or both at the discretion of the court.

Any public officer or employee who knowingly approves or assists in securing a decision allowing reconstitution in
favor of any person not entitled thereto shall be subject to criminal prosecution and, upon conviction, shall be
liable for imprisonment of not less than five years but not exceeding ten years or payment of a fine of not less
than Fifty thousand pesos but not exceeding One hundred thousand pesos or both at the discretion of the court
and perpetual disqualification from holding public office.43

These provisions indubitably establish that the administrative reconstitution of Torrens titles is intended for non-
controversial cases, or especially where the subject property is not covered by an existing title in favor of a person other
than the applicant. Such an implication is consonant with the rule that the reconstitution proceedings are not the venue for
confirmation or adjudication of title, but merely a means by which a previously adjudicated title whose original has been
lost or destroyed may be reissued to its owner.44

The Solicitor General pertinently cites the rule in Alabang Development Corporation v. Valenzuela,45 which we held that
"[t]he courts simply have no jurisdiction over petitions by such third parties for reconstitution of allegedly lost or destroyed
titles over lands that are already covered by duly issued subsisting titles in the names of their duly registered
owners."46 That such doctrine was established for cases of judicial reconstitution does not bar its application to cases of
administrative reconstitution. None of the provisions pertaining to administrative reconstitution in Rep. Act No. 26 or 6732
extraordinarily empowers the LRA to exercise jurisdiction over a petition for reconstitution, where the property is already
covered by a Torrens title. After all, the LRA in such case is powerless to void the previous title or to diminish its legal
effect. Even assuming that the previously issued title is obviously fraudulent or attended by flaws and as such cannot be
countenanced by the legal system, the corrective recourse lies with the courts, and not with the LRA.

If a petition for administrative reconstitution is filed with the LRA, and it appears from the official records that the subject
property is already covered by an existing Torrens title in the name of another person, there is nothing further the LRA can
do but to dismiss the petition. The dismissal of such petition is subject to judicial review, but the only relevant inquiry in
such appellate proceeding is on whether or not there is a previously existing title covering that property. Neither the LRA
nor the Court of Appeals at that point may inquire into the validity of the title or the competing claims over the property.
The only remedy is an action before the RTC for the cancellation of the existing title, whether by the competing claimant
or by the OSG on behalf of the Republic.

III

The 2005 Decision placed heavy reliance on Ortigas & Company Limited Partnership v. Velasco,47 where in the course of
reviewing an action for judicial reconstitution of title, the Court opted not to remand the reconstitution case filed by Molina
to the court of origin in order to permit the appeals of Ortigas and the Solicitor General, which had been improvidently
disallowed by the trial court. Instead, owing to the "fatal infirmities" of Molinas cause of action, the Court itself nullified the
reconstituted titles issued by the trial court. Ortigas had been cited by the Court of Appeals and also by the 2005 Decision,
in ruling on the Barques petition.

The unusual "shortcut" that occurred in Ortigas had become necessary because in that case the trial court had denied or
stricken out the notices of appeal respectively filed by Ortigas and the Solicitor General from the order for reconstitution of
Molinas titles. Had these notices of appeal been allowed, the Court of Appeals would have then reviewed the trial courts
decision on appeal, with the ultimately correct resolution which was the annulment of Molinas titles. Ortigas was forced to
institute a special civil action of certiorari and mandamus with this Court, praying for either of these alternative resultsthe
more prudent recourse of directing the trial court to act on the notices of appeal and to forward the case records to the
Court of Appeals, or the more immediate remedy of bypassing the appellate process and the Court itself by directly
annulling Molinas titles.

The Court of Appeals herein could not have equated its annulment of the Manotok title with that undertaken by the Court
in Ortigas since, unlike in Ortigas, the Court of Appeals was not endowed with the proper appellate jurisdiction to annul
the Manotok title. As earlier pointed out, since the LRA had no original jurisdiction to cancel the Manotok title, it follows
that the Court of Appeals had no jurisdictional competence to extend the same relief, even while reviewing the LRAs
ruling. Clearly, Ortigas cannot be applied as a binding precedent to these cases. The fundamental jurisdictional defects
that attended the actions of both Divisions of the Court of Appeals have effectively diminished Ortigas as a persuasive
authority.

IV

The 2005 Decision accepted the findings of the LRA and the Court of Appeals that the Manotok title was spurious and
accordingly sanctioned its cancellation, even though no direct attack on the title had been initiated before a trial court.
That the 2005 Decision erred in that regard is a necessary consequence following our earlier explanation of why the mere
existence of the Manotok title necessarily barred the LRA from inquiring into the validity of that title.

Moreover, it would have been pointless for the LRA or the Court of Appeals to have ruled definitively on the validity of the
Barques claim to title. After all, since neither the LRA nor the Court of Appeals could cause the cancellation of the
Manotok title, any declaration that the Barque claim was valid would be inutile and inoperable. Still, in order to effectively
review and reverse the assailed rulings, it would be best for this Court to test the premises under which the LRA and
the Court of Appeals had concluded that the Barques had a valid claim to title. The available record before the
Court is comprehensive enough to allow us to engage in that task.

The Barque title, or TCT No. 210177, under which the Barques assert title to Lot 823 of the Piedad Estate, states that it
was transferred from TCT No. 13900.48 The Barques assert that they bought the subject property from a certain Setosta.
Thus, it could be deduced that TCT No. 13900 should have been registered under the name of Setosta. However, it was
not. TCT No. 13900 was registered under the name of Manotok Realty, Inc. 49 This detracts from the Barques claim that
the Manotoks do not have title to the property, as in fact the Barque title was a transfer from a title registered under the
name of the Manotoks. The Barques have failed to explain the anomaly.

The Barques hinge their claim on a purported subdivision plan, FLS-3168-D, made in favor of Setosta. However, based
on the records, it appears that there is a conflict as to its actual existence in the files of the government. Revelatory is the
exchange of correspondence between the LMB and the LRA. The LMB did not have any copy of FLS-3168-D in the EDP
listing,50 nor did the LMB have a record of the plan.51 However, a microfilm copy of FLS-3168-D was on file in the
Technical Records and Statistical Section of the Department of Environment and Natural Resources Capital Region
(DENR-NCR).52 The copy with the Technical Records and Statistical Section, which bore the stamp of the LMB, was
denied by the LMB as having emanated from its office.53

Further, the letter dated 2 January 1997 from the LMB stated that the copy of FLS-3168-D as verified from its microfilm file
was the same as the copy sent by the Technical Records and Statistics Section of the National Capital Region Lands
Management Sector.54 The LMB, however, denied issuing such letter and stated that it was a forged document. 55 To
amplify the forged nature of the document, the LMB sent a detailed explanation to prove that it did not come from its
office.56 In a letter to the administrator of the LRA, the hearing officer concluded that "it is evident that there is an attempt
to mislead us into favorable action by submitting forged documents, hence it is recommended that this case [be] referred
to the PARAC for investigation and filing of charges against perpetrators as envisioned by this office under your
administration."57

There are significant differences between the technical description of Lot 823 of the Piedad Estate as stated in FLS-3168-
D, the subdivision plan relied on by the Barques, and the technical description provided by the DENR.58 The DENR-
confirmed technical description reads:

Bounded on the E., along line-2 by Payatas Estate; on the SE., by Tuazon Estate; along line 3-4 by Lot 824;
along line 4-5 by Lot 818; and on the N., along line 5-1 by Lot 822, all of Piedad Estate.59
However, if we examine the subdivision plan, there are critical changes with respect to the boundaries named therein. In
effect, the boundaries as described in the subdivision plan would read:

Bounded on the E., along line-2 by Diez Francisco; on the SE., by Diez Francisco; along line 3-4 by Lot 824;
along line 4-5 by Lot 826; and on the N., along line 5-1 by Lot 822, all of Piedad Estate."60

The Barques offered no credible explanation for the discrepancy between the subdivision plan it relies on and the DENR
record. They also do not contradict the finding of the National Archives that there is no copy in its files of the deed of sale
allegedly executed between Setosta and Barque.61

Lastly, in the 1st indorsement issued by the Land Projection Section of the LRA dated 23 August 2006, that Section stated
that upon examination it was found out that the land as described in the Barque title "when plotted thru its tie line falls
outside Quezon City." This is material, since Lot 823 of the Piedad Estate is within the boundaries of Quezon City. 62 A
similar finding was made by the Land Management Bureau (LMB). It attested that the line or directional azimuth of Lot No.
823 per the Barque title locates it at 5,889 meters away from point 1 of Lot No. 823 of the Piedad Estate. 63

These discrepancies highlight the error of the LRA and the Court of Appeals in acknowledging the right of the Barques to
seek reconstitution of their purported Barque title. Even assuming that the petition for reconstitution should not have been
dismissed due to the Manotok title, it is apparent that the Barques claim of ownership is exceedingly weak.

In the course of fully reevaluating these cases, the Court could not turn a blind eye on the evidence and points raised
against the Manotok title. The apparent flaws in the Manotoks claim are considerable and disturbing enough. The Court,
as the ultimate citadel of justice and legitimacy, is a guardian of the integrity of the land registration system of the
Philippines. We will be derelict in our duty if we remain silent on the apparent defects of the Manotok title, reflective as
they are of a scourge this Court is dedicated to eliminate.

Many of these flaws have especially emerged through the petition-for-intervention of Felicitas and Rosendo Manahan,
whom we have allowed to intervene in these cases. The Manahans had filed a petition with the OSG seeking that it initiate
cancellation/reversion proceedings against the Manotok title. That petition was referred by the OSG to the LMB of the
DENR, which duly investigated the claim of the Manahans. The Chief of the Legal Division of the LMB recommended that
the appropriate proceedings be taken in the proper court for the cancellation of the Manotok title, through a Memorandum
dated 17 April 2000.64

Around the same time, the LMB referred to the DENR Undersecretary for Legal Affairs Roseller S. dela Pea a query on
whether a deed of conveyance could be issued to Felicitas Manahan. The DENR Undersecretary, in answering that query
through a Memorandum dated 6 July 2000, pointed out that the titles of the Manotoks could not have been derived from
OCT No. 614, the mother title of Lot 823 of the Piedad Estate.65 The chain of transfers leading from OCT No. 614 to the
Manotok title was a TCT No. 22813, purportedly issued by the Office of the Register of Deeds for the Province of Rizal.
The copy of said TCT No. 22813 submitted to the Court is truncated in the upper half, to the point that it is not visually
discernible what year the same was issued. More crucially, a certification was issued by the Register of Deeds of Rizal
dated 7 January 2000 stating thus:

After a thorough verification from the files of this Office, it appears that the documents leading to the issuance of
TCT No. 22813, Blk. T-92 cannot be found from the files of this Office.66

These findings were twice verified with due diligence and reconfirmed by the DENR, according to Undersecretary Dela
Pea.67

The DENR also requested the assistance of the National Bureau of Investigation (NBI) in conducting the said
investigation. The NBI examined various sales certificates and assignment of sales certificates in the names of the
purported predecessors-in-interest of the Manotoks Regina Geronimo, Modesto Zacarias, and Felicisimo Villanueva
certificates that were all dated prior to 1930. In its Chemistry Report No. C-99-152 dated 10 June 1999, the Forensic
Chemistry Division of the NBI concluded that the said documents "could not be as old as it (sic) purports to be." 68

According to the Manahans, the LMB did eventually forward to the Office of the Register of Deeds of Quezon City a Deed
of Conveyance for registration and mandatory issuance of title to Felicitas Manahan as grantee, pursuant to Section 122
of the Land Registration Act. The registration of said Deed of Conveyance was referred to the Administrator of the Land
Registration Authority en consulta in 2001.
Also on record69 is an Investigation Report on Lot No. 823 of the Piedad Estate dated 5 July 1989, authored by Evelyn C.
dela Rosa, Land Investigator of the Community Environment and Natural Resources Office (CENRO), NCR-North Sector
and addressed to the CENRO Officer, North CENRO. It was narrated therein that Lot No. 823 had actually been in the
possession of a Valentin Manahan beginning in 1908. In 1939, Valentin Manahan applied for the purchase of the land,
and he was issued Sales Certificate No. 511. The Investigation Report stated:

Records show that the Sale Certificate No. 511 covering Lot 823, Piedad Estate, was issued to Valentin Manahan
as purchaser and transferred to Hilaria de Guzman Manahan as (Assignee) and sold to Felicitas Manahan by way
of Deed of Absolute Sale dated August 23, 1974. Based on my research at the Land Management Bureau (LMB),
Central Office, it appears that original claimant of lot 823 was Valentin Manahan. 70

All told, these apparent problems with the Manotoks claim dissuade us from being simply content in reflexively dismissing
the administrative petition for reconstitution filed by the Barques. Indeed, we have to take further action.

VI

The most formidable impediment to the Court reacting to the problems apparent in the Manotok title is the fact that we are
not engaged in the review of an original action for the cancellation of such title. If, as in Ortigas, the validity of the
questionable title were now properly at issue, the Court would without hesitancy rule on such question. Because it is not,
the matter of how next to proceed warrants more deliberation.

The conservative approach would be to still affirm the continuing validity of the Manotok title until the proper case for its
cancellation is filed with the regional trial court. Within that context, it would also be a plausible recourse for us is to direct
the Solicitor General to duly investigate the circumstances behind the transmission of Lot No. 823, formerly a Friar Land,
to private persons. Thereafter, the Solicitor General can file the appropriate proceedings for cancellation if warranted.
However, it is already apparent, following the evaluation of these cases, that there is evidenceunrefuted thus far
indicating that the Manotoks claim to title is just as flawed as that of the Barques.

Can the Court declare the Manotok title void? In the 2002 decision in Alonso v. Cebu Country Club,71 the subject property
therein had originally formed part of the Banilad Friar Lands. Cebu Country Club had undertaken the administrative
reconstitution of the title to the property, leading Alonso to file a complaint for nullification of such title in order to vindicate
his own claims to the property. Alonsos complaint was dismissed by the trial court and the Court of Appeals. While the
case was pending with this Court, the Solicitor General was required to comment on the validity of Cebu Country Clubs
administratively reconstituted title. Ultimately, the Court concluded that Cebu Country Club had not been able to establish
a clear title over the contested estate, and in the dispositive portion of its decision declared "that Lot No. 727 D-2 of the
Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251, 232, and 253 legally belongs to the
Government of the Philippines."

The following year, the Court, acting on the motions for reconsideration in Alonso,72 extensively discussed why it had
taken that extraordinary step even though the Republic of the Philippines, through the Solicitor General, had not
participated or intervened in that case before the lower courts.

It must be borne in mind that the disputed property is part of the "Friar Lands" over which the Government holds
title and are not public lands but private or patrimonial property of the Government and can be alienated only
upon proper compliance with the requirements of Act No. 1120 or the Friar Lands Act.

xxx

It was thus primordial for the respondent to prove its acquisition of its title by clear and convincing evidence in
view of the nature of the land. In fact, it is essential for both respondent and petitioners to establish that it had
become private property. Both parties failed to do so. As we have held earlier, petitioners have not succeeded to
prove their claim of ownership over the subject property.

xxx

Neither may the rewards of prescription be successfully invoked by respondent, as it is an iron-clad dictum that
prescription can never lie against the Government. Since respondent failed to present the paper trail of the
property's conversion to private property, the lengthy possession and occupation of the disputed land by
respondent cannot be counted in its favor, as the subject property being a friar land, remained part of the
patrimonial property of the Government. Possession of patrimonial property of the Government, whether spanning
 decades or centuries, can not ipso facto ripen into ownership. Moreover, the rule that statutes of limitation do not
run against the State, unless therein expressly provided, is founded on "the great principle of public policy,
applicable to all governments alike, which forbids that the public interests should be prejudiced by the negligence
of the officers or agents to whose care they are confided."

xxx

Finally, our declaration that Lot 727-D-2 of the Banilad Friar Lands Estate legally belongs to the Government does
not amount to reversion without due process of law insofar as both parties are concerned. The disputed property
is a Friar Land and both parties failed to show that it had ceased to belong to the patrimonial property of the State
or that it had become private property.73

The Alonso approach especially appeals to us because, as in this case, the subject property therein was a Friar Land
which under the Friar Lands Law (Act No. 1120) may be disposed of by the Government only under that law. Thus, there
is greater concern on the part of this Court to secure its proper transmission to private hands, if at all.

At the same time, the Court recognizes that there is not yet any sufficient evidence for us to warrant the annulment of the
Manotok title. All that the record indicates thus far is evidence not yet refuted by clear and convincing proof that the
Manotoks claim to title is flawed. To arrive at an ultimate determination, the formal reception of evidence is in order. This
Court is not a trier of fact or otherwise structurally capacitated to receive and evaluate evidence de novo. However, the
Court of Appeals is sufficiently able to undertake such function.

The remand of cases pending with this Court to the Court of Appeals for reception of further evidence is not a novel idea.
It has been undertaken before in Republic v. Court of Appeals74 and more recently in our 2007 Resolution in Manotok v.
Court of Appeals.75 Our following explanation in Manotok equally applies to this case:

Under Section 6 of Rule 46, which is applicable to original cases for certiorari, the Court may, whenever
necessary to resolve factual issues, delegate the reception of the evidence on such issues to any of its members
or to an appropriate court, agency or office. 80 The delegate need not be the body that rendered the assailed
decision.

The Court of Appeals generally has the authority to review findings of fact. Its conclusions as to findings of fact
are generally accorded great respect by this Court. It is a body that is fully capacitated and has a surfeit of
experience in appreciating factual matters, including documentary evidence.

In fact, the Court had actually resorted to referring a factual matter pending before it to the Court of Appeals.
In Republic v. Court of Appeals, this Court commissioned the former Thirteenth Division of the Court of Appeals to
hear and receive evidence on the controversy, more particularly to determine "the actual area reclaimed by the
Republic Real Estate Corporation, and the areas of the Cultural Center Complex which are 'open spaces' and/or
areas reserved for certain purposes,' determining in the process the validity of such postulates and the respective
measurements of the areas referred to." The Court of Appeals therein received the evidence of the parties and
rendered a "Commissioner's Report" shortly thereafter. Thus, resort to the Court of Appeals is not a deviant
procedure.

The provisions of Rule 32 should also be considered as governing the grant of authority to the Court of Appeals to
receive evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may, motu proprio,
direct a reference to a commissioner when a question of fact, other than upon the pleadings, arises upon motion
or otherwise, in any stage of a case, or for carrying a judgment or order into effect. The order of reference can be
limited exclusively to receive and report evidence only, and the commissioner may likewise rule upon the
admissibility of evidence. The commissioner is likewise mandated to submit a report in writing to the court upon
the matters submitted to him by the order of reference. In Republic, the commissioner's report formed the basis of
the final adjudication by the Court on the matter. The same result can obtain herein.76

The primary focus for the Court of Appeals, as an agent of this Court, in receiving and evaluating evidence should be
whether the Manotoks can trace their claim of title to a valid alienation by the Government of Lot No. 823 of the Piedad
Estate, which was a Friar Land. On that evidence, this Court may ultimately decide whether annulment of the Manotok
title is warranted, similar to the annulment of the Cebu Country Club title in Alonso. At the same time, the Court
recognizes that the respective claims to title by other parties such as the Barques and the Manahans, and the evidence
they may submit on their behalf, may have an impact on the correct determination of the status of the Manotok title. It
would thus be prudent, in assuring the accurate evaluation of the question, to allow said parties, along with the OSG, to
participate in the proceedings before the Court of Appeals. If the final evidence on record definitively reveals the proper
claimant to the subject property, the Court would take such fact into consideration as it adjudicates final relief.

For the purposes above-stated, the Court of Appeals is tasked to hear and receive evidence, conclude the proceedings
and submit to this Court a report on its findings and recommended conclusions within three (3) months from notice of this
Resolution.

To assist the Court of Appeals in its evaluation of the factual record, the Office of the Solicitor General is directed to
secure all the pertinent relevant records from the Land Management Bureau and the

Department of Environment and Natural Resources and submit the same to the Court of Appeals.

WHEREFORE, the Decision dated 12 June 2005, and the Resolutions dated 19 April and 19 June 2006 of the Courts
First Division are hereby SET ASIDE, and the Entry of Judgment recorded on 2 May 2006 is RECALLED. The Amended
Decision dated 24 February 2004 in CA-G.R. SP No. 66642, the Amended Decision dated 7 November 2003 and the
Resolution dated 12 March 2004 in CA-G.R. SP No. 66700, and the Resolutions of the Land Registration Authority dated
24 June 1998 and 14 June 1998 in Admin. Recons. No. Q-547-A[97] are all REVERSED and SET ASIDE.

The instant cases are hereby REMANDED to the Court of Appeals for further proceedings in accordance with this
Resolution. The Court of Appeals is directed to raffle these remanded cases immediately upon receipt of this Resolution.

This Resolution is immediately executory.

G.R. Nos. 162335 & 162605 August 24, 2010

SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK, FERNANDO M. MANOTOK III, MA. MAMERTA M.
MANOTOK, PATRICIA L. TIONGSON, PACITA L. GO, ROBERTO LAPERAL III, MICHAEL MARSHALL V.
MANOTOK, MARYANN MANOTOK, FELISA MYLENE V. MANOTOK, IGNACIO V. MANOTOK, JR., MILAGROS V.
MANOTOK, SEVERINO MANOTOK III, ROSA R. MANOTOK, MIGUEL A.B. SISON, GEORGE M. BOCANEGRA, MA.
CRISTINA E. SISON, PHILIPP L. MANOTOK, JOSE CLEMENTE L. MANOTOK, RAMON SEVERINO L. MANOTOK,
THELMA R. MANOTOK, JOSE MARIA MANOTOK, JESUS JUDE MANOTOK, JR. and MA. THERESA L. MANOTOK,
represented by their Attorney-in-fact, ROSA R. MANOTOK, Petitioners,
vs.
HEIRS OF HOMER L. BARQUE, represented by TERESITA BARQUE HERNANDEZ, Res align="justify"pondents.

DECISION

VILLARAMA, JR., J.:

In our Resolution1 promulgated on December 18, 2008, we set aside the Decision2 dated December 12, 2005 rendered by
the First Division; recalled the Entry of Judgment recorded on May 2, 2006; reversed and set aside the Amended
Decisions dated November 7, 2003 and March 12, 2004 in CA-G.R. SP Nos. 66700 and 66642, respectively; and
remanded to the Court of Appeals (CA) for further proceedings these cases which shall be raffled immediately.

The CA was specifically directed to receive evidence with primary focus on whether the Manotoks can trace their claim of
title to a valid alienation by the Government of Lot No. 823 of the Piedad Estate, which was a Friar Land. On that
evidence, this Court may ultimately decide whether annulment of the Manotok title is warranted, similar to the annulment
of the Cebu Country Club title in Alonso v. Cebu Country Club, Inc. 3 The Barques and Manahans were likewise allowed to
present evidence on their respective claims "which may have an impact on the correct determination of the status of the
Manotok title." On the other hand, the Office of the Solicitor General (OSG) was directed to secure all the relevant records
from the Land Management Bureau (LMB) and the Department of Environment and Natural Resources (DENR). If the
final evidence on record "definitively reveals the proper claimant to the subject property, the Court would take such fact
into consideration as it adjudicates final relief."4

After concluding the proceedings in which all the parties participated and presented testimonial and documentary
evidence, as well as memoranda setting forth their respective arguments, the CAs Special Former First Division rendered
a Commissioners Report5 consisting of 219 pages on April 12, 2010. Upon receipt of the sealed Report submitted to this
Court, the parties were no longer furnished copies thereof in order not to delay the promulgation of the Courts action and
the adjudication of these cases, and pursuant to our power under Section 6, Rule 135 of the Rules of Court to adopt any
suitable process or mode of proceeding which appears conformable to the spirit of the Rules "to carry into effect all
auxiliary processes and other means necessary to carry our jurisdiction into effect." 6

The evidence adduced by the parties before the CA, which are exhaustively discussed in the Commissioners Report,
including the judicial affidavits and testimonies presented during the hearings conducted by the CAs Special Former
Special Former First Division, are herein summarized. But first, a brief restatement of the antecedents set forth in our
Resolution.

Antecedents

Lot No. 823 is a part of the Piedad Estate, Quezon City, a Friar Land acquired by the Philippine Government from the
Philippine Sugar Estates Development Company, Ltd., La Sociedad Agricola de Ultramar, the British-Manila Estate
Company, Ltd., and the Recoleto Order of the Philippine Islands on December 23, 1903, as indicated in Act No.
1120 (Friar Lands Act) enacted on April 26, 1904. The Piedad Estate has been titled in the name of the Government
under Original Certificate of Title (OCT) No. 614 and was placed under the administration of the Director of Lands.7

Controversy arising from conflicting claims over Lot 823 began to surface after a fire gutted portions of the Quezon City
Hall on June 11, 1988 which destroyed records stored in the Office of the Register of Deeds of Quezon City. That fire has
attained notoriety due to the numerous certificates of title on file with that office, which were destroyed as a consequence.
The resulting effects of that blaze on specific property registration controversies have been dealt with by the Court in a
number of cases since then. The present petitions are perhaps the most heated, if not the most contentious of those
cases thus far.8

Sometime in 1990, a petition for administrative reconstitution9 of Transfer Certificate of Title (TCT) No. 372302 in the
name of the Manotoks covering Lot No. 823 with an area of 342,945 square meters was filed by the Manotoks with the
Land Registration Authority (LRA) which granted the same, resulting in the issuance of TCT No. RT-22481 (372302) in
1991. In 1996, eight (8) years after the fire which razed the Quezon City Hall building, the Barques filed a petition with the
LRA for administrative reconstitution of the original of TCT No. 210177 in the name of Homer Barque and covering Lot
823 of the Piedad Estate, Quezon City, alleged to be among those titles destroyed in the fire. In support of their petition,
the Barques submitted copies of the alleged owners duplicate of TCT No. 210177, real estate tax receipts, tax
declarations and a Plan Fls 3168-D covering the property.10

Learning of the Barques petition, the Manotoks filed their opposition thereto, alleging that TCT No. 210177 was spurious.
Although both titles of the Manotoks and the Barques refer to land belonging to Lot No. 823 of the Piedad Estate situated
in the then Municipality of Caloocan, Province of Rizal, TCT No. 210177 actually involves two (2) parcels with an
aggregate area of 342,945 square meters, while TCT No. RT-22481 (372302) pertains only to a single parcel of land, with
a similar area of 342,945 square meters.11

On June 30, 1997, Atty. Benjamin M. Bustos, the reconstituting officer, denied Barques petition declaring that Lot No. 823
is already registered in the name of the Manotoks and covered by TCT No. 372302 which was reconstituted under Adm.
Reconstitution No. Q-213 dated February 1, 1991, and that the submitted plan Fls 3168-D is a spurious document as
categorically declared by Engr. Privadi J.G. Dalire, Chief, Geodetic Surveys Division of the LMB. The Barques motion for
reconsideration having been denied, they appealed to the LRA. 12

The LRA reversed the ruling of Atty. Bustos and declared that the Manotok title was fraudulently reconstituted. It ordered
that reconstitution of TCT No. 210177 in the name of Homer L. Barque shall be given due course after cancellation of TCT
No. RT-22481 (372302) in the name of the Manotoks upon order of a competent court of jurisdiction. The LRA denied the
Manotoks motion for reconsideration and the Barques prayer for immediate reconstitution. Both the Manotoks and the
Barques appealed the LRA decision to the CA.13

In the petition for review filed by the Barques (CA-G.R. SP No. 66700), Felicitas Manahan filed a motion to intervene and
sought the dismissal of the cases in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642 as she claimed ownership of the
subject property.14

By Decision of September 13, 2002, the CAs Second Division denied the petition in CA-G.R. SP No. 66700 and affirmed
the LRA Resolution. Subsequently, in an Amended Decision15 dated November 7, 2003, the Special Division of Five of the
Former Second Division reconsidered its Decision dated September 13, 2002 and directed the Register of Deeds of
Quezon City to cancel TCT No. RT-22481 (372302) in the name of the Manotoks and to reconstitute the Barques "valid,
genuine and existing" TCT No. 210177. The Manotoks filed a motion for reconsideration but this was denied. 16
As to Manotoks petition (CA-G.R. SP No. 66642), the CAs Third Division rendered a Decision17 on October 29, 2003
which affirmed the resolution of the LRA. The Barques filed a motion for reconsideration. As what happened in CA-G.R.
SP No. 66700, the CAs Third Division granted the Barques motion for reconsideration and on February 24, 2004,
promulgated its Amended Decision wherein it reconsidered the decision dated October 29, 2003, and ordered the
Register of Deeds of Quezon City to cancel TCT No. RT-22481 (372302) in the name of the Manotoks and the LRA to
reconstitute the Barques TCT No. 210177.18

Aggrieved by the outcome of the two (2) cases in the CA, the Manotoks filed the present separate petitions (G.R. Nos.
162605 and 162335) which were ordered consolidated on August 2, 2004. On December 12, 2005, this Courts First
Division rendered its Decision affirming the two (2) decisions of the CA. The Manotoks filed a motion for reconsideration,
which the Courts First Division denied in a Resolution dated April 19, 2006. Thereafter, the Manotoks filed a Motion for
Leave to File a Second Motion for Reconsideration, with their Motion for Reconsideration attached. The Court denied the
same in a Resolution dated June 19, 2006 and eventually entry of judgment was made in the Book of Entries of Judgment
on May 2, 2006. In the meantime, the Barques filed multiple motions with the First Division for execution of the judgment,
while the Manotoks filed an Urgent Motion to Refer Motion for Possession to the Supreme Court En Banc (with prayer to
set motion for oral arguments). In a Resolution dated July 19, 2006, the Special First Division referred these cases to the
Court en banc, and on July 26, 2006, the Court en banc promulgated a Resolution accepting the cases. 19

On September 7, 2006, Felicitas Manahan and Rosendo Manahan filed a motion to intervene, to which was attached their
petition in intervention. They alleged that their predecessor-in-interest, Valentin Manahan, was issued Sale Certificate No.
511 covering Lot No. 823 of the Piedad Estate and attached to their petition the findings of the National Bureau of
Investigation (NBI) that the documents of the Manotoks were not as old as they were purported to be. Consequently, the
Director of the Legal Division of the LMB recommended to the Director of the LMB that "steps be taken in the proper court
for the cancellation of TCT No. RT-22481 (372302) and all its derivative titles so that the land covered may be reverted to
the State." In compliance with the directive of this Court, the OSG filed its Comment and oral arguments were held on July
24, 2007. Thereafter, the Court required the parties, the intervenors and the Solicitor General to submit their respective
memoranda.

As already mentioned, the December 12, 2005 Decision of the Courts First Division was set aside, entry of judgment
recalled and the CAs Amended Decisions in CA-G.R. SP Nos. 66642 and 66700 were reversed and set aside, pursuant
to our Resolution promulgated on December 18, 2008 wherein we ordered the remand of the cases to the CA for further
proceedings.

Evidence Submitted to the CA

A. OSG

Engr. Judith Poblete, Records Custodian of DENR-NCR, brought the original copy of the Lot Description of Lot No. 823 of
the Piedad Estate, a certified copy of which was marked as Exhibit 28-OSG [DENR]. She also identified Land Use Map
(1978), Exhibit 32-OSG [DENR], showing the location of Lot No. 823 of Piedad Estate at Matandang Balara, Quezon
City.20

Engr. Evelyn G. Celzo, Geodetic Engineer III of the Technical Services Section of DENR-NCR, identified her signature in
Technical Descriptions (Lot No. 823, Piedad Estate) marked as Exhibit 29-OSG [DENR],21 which is on file at the Technical
Services Section. She explained that there is no discrepancy because the lot description "64.45" appearing in Exhibit 28-
OSG should read "644.5" (as reflected in Exhibit 29-OSG [DENR]) and they used this computation as otherwise the
polygon will not close. Sketch/Special Plans (Exhibits 30 and 31-OSG [DENR]) were prepared for Felicitas Manahan after
she had purchased Lot No. 823 of Piedad Estate. As land investigator, she made a thorough research of the property and
she was able to see only the sale certificate of the Manahans (Exhibit 2-OSG [LMB]) but not those of the Manotoks and
the Barques. She admitted that she does not have the record of the field notes of the survey conducted in 1907. 22

Atty. Fe T. Tuanda, Officer-in-Charge (OIC) of the Records Management Division (RMD), LMB, testified that she was
designated OIC on January 13, 2009. She identified the following documents on file at their office, certified copies of
previously certified copies which were marked as OSG exhibits: (a) Survey Card for BL Survey No. Fls-3164 in the name
of Valentin Manahan (Exh. 1-OSG [LMB]); (b) Assignment of Sale Certificate No. 511 dated June 24, 1939 in the name of
Valentin Manahan, assignor, and Hilaria de Guzman, assignee (Exh. 2-OSG [LMB]); (c) Deed of Absolute Sale dated
August 23, 1974 executed by Hilaria de Guzman in favor of Felicitas Manahan covering Lot 823, Fls-3164, Piedad Estate
(Exh. 3-OSG [LMB]); (d) Technical Description of Lot No. 823, Piedad Estate dated May 27, 1983 (Exh. 4-OSG [LMB]);
(e) Investigation Report on Lot No. 823, Piedad Estate dated July 5, 1989 prepared by Evelyn C. dela Rosa, Land
Investigator, North CENRO (Exh. 5-OSG [LMB]); (f) Petition for cancellation/reversion of TCT No. RT-22481 (372302) in
the name of Severino Manotok, et al. dated November 25, 1998 filed by Felicitas Manahan before the OSG (Exh. 6-OSG
[LMB]); (g) Letter dated December 3, 1998 of Assistant Solicitor General Cecilio O. Estoesta referring the petition filed by
Felicitas Manahan to the LMB for investigation and/or appropriate action (Exh. 7-OSG [LMB]); (h) LMB Special Order No.
98-135 dated December 18, 1998 designating investigators for the petition filed by Felicitas Manahan (Exh. 8-OSG
[LMB]); (i) 1st Indorsement dated February 23, 1999 and 2nd Indorsement dated March 26, 1999 issued by DENR Lands
Sector Regional Technical Director Mamerto L. Infante forwarding documents pertaining to Lot No. 823, Fls-3164, Piedad
Estate, Quezon City to the Director of LMB (Exhs. 9 and 10-OSG [LMB]); (j) Chemistry Report No. C-99-152 dated June
10, 1999 issued by the NBI Forensic Chemistry Division (Exh. 11-OSG [LMB]); (k) Office Memorandum dated October
2000 from LMB Land Administration and Utilization Division Chief Arthus T. Tenazas forwarding records of Lot No. 823,
Piedad Estate to the LMB-RMD for numbering and notarization of the Deed of Conveyance (Exh. 12-OSG [LMB]); (l)
Memorandum dated April 17, 2000 issued by the Chief of the Legal Division of the LMB to the OIC- Director of the LMB
regarding the petition filed by Felicitas Manahan (Exh. 13-OSG [LMB]); (m) Memorandum dated July 6, 2000 issued by
the DENR Undersecretary for Legal Affairs to the Director of the LMB on the issue of whether a Deed of Conveyance may
be issued to Felicitas Manahan by virtue of Sale Certificate No. 511 covering Lot No. 823 of Piedad Estate (Exh. 14-OSG
[LMB]); (n) Order dated October 16, 2000 issued by the LMB transferring Sale Certificate No. 511 in the name of Valentin
Manahan and ordering the issuance of Deed of Conveyance in favor of Felicitas Manahan (Exh. 15-OSG [LMB]); (o) Deed
No. V-200022 dated October 30, 2000 issued by the LMB and signed by the OIC Director of Lands Management, in favor
of Felicitas Manahan covering Lot No. 823 of Piedad Estate (Exh. 16-OSG [LMB]); (p) Letter dated November 24, 2004
from LRA Deputy Administrator Ofelia E. Abueg-Sta. Maria addressed to then DENR Secretary Michael T. Defensor
referring to the latter Deed No. V-200022 for verification as to its authenticity (Exh. 17-OSG [LMB]); (q) Letter dated
January 3, 2005 of DENR Secretary Defensor addressed to LRA Deputy Administrator Abueg-Sta. Maria acknowledging
receipt of the latters letter dated November 24, 2004 (Exh. 18-OSG [LMB]); (r) Memorandum dated January 3, 2005 from
DENR Secretary Defensor to the Director of LMB requiring the latter to take immediate appropriate action on the letter
dated November 24, 2004 of LRA Deputy Administrator Abueg-Sta. Maria (Exh. 19-OSG [LMB]); (s) Office Memorandum
dated January 19, 2005 from LMB OIC Assistant Director Alberto R. Ricalde to the LMB-RMD referring to the latter the
Memorandum dated January 3, 2005 issued by DENR Secretary Defensor (Exh. 20-OSG [LMB]); (t) Memorandum dated
January 20, 2005 from LMB-RMD OIC Leonido V. Bordeos to LMB OIC Assistant Director Ricalde stating the results of
their records verification conducted pursuant to Office Memorandum dated January 19, 2005 (Exh. 21-OSG [LMB]); (u)
Letter dated January 21, 2005 from LMB Director Concordio D. Zuiga addressed to LRA Deputy Administrator Abueg-
Sta. Maria indicating the results of their records verification on Deed No. V-200022 (Exh. 22-OSG [LMB]); (v) Inventory of
Claims/Conflicts Cases involving the Piedad Estate (Exh. 23-OSG [LMB]); (w) Memorandum dated November 23, 2007
from LMB Land Administration and Utilization Division, Friar Lands Unit Chief Ariel F. Reyes to LMB Legal Division OIC
Manuel B. Tacorda providing a history of OCT No. 614, Piedad Estate, as well as its metes and bounds (Exh. 24-OSG
[LMB]); (x) Memorandum dated November 9, 2007 from DENR Undersecretary for Administration, Finance and Legal
Atty. Mary Ann Lucille L. Sering addressed to the Regional Executive Director and Regional Technical Director for Lands
of the DENR-NCR, the Director and Handling Officer of the LMB, the Executive Director of Land Administration and
Management Project, calling for a conference regarding the launching of a project called "Operation 614" (Exh. 25-OSG
[LMB]); (y) Memorandum dated November 26, 2007 from Legal Division OIC Tacorda to the LMB Director regarding the
conference for the launching of "Operation 614" (Exh. 26-OSG [LMB]); and (z) Memorandum dated November 28, 2007
from LMB OIC Director Gerino A. Tolentino, Jr. to the DENR Secretary regarding the launching of "Operation 614" (Exh.
27-OSG [LMB]).23

On cross-examination, Atty. Tuanda said that while all documents received by the RMD are stamped received, there were
no such stamp mark on Exhibits 1-OSG, 2-OSG, 3-OSG, 9-OSG, 10-OSG, 13-OSG, 14-OSG, 19-OSG and 25-OSG; Exh.
17-OSG had stamp received by the Office of the Assistant Director of LMB. When asked why the pagination in Exh. 13-
OSG is not consecutive, Atty. Tuanda said she was not the one (1) who placed the page numbers on the documents.24

Engr. Ludivina L. Aromin, Chief of the Technical Services Section, DENR-NCR, identified the Sketch/Special Plans
prepared for the Manahans for reference purposes (Exhs. 30 and 31-OSG [DENR]25), based on the technical description
of Lot No. 823 taken from results of the original survey conducted in 1907. These were signed by Engr. Ignacio R. Almira,
Jr., Chief of Surveys Division, and noted by Atty. Crisalde Barcelo, Regional Technical Director of DENR-NCR. She had
verified the metes and bounds of Lot No. 823, explaining that if the distance used between points 2 and 3 is "64.45", and
not "644.5", the area of Lot No. 823 would not be "342,945 square meters" and the Special Plans would not have been
approved by the LMB. She clarified that the sale certificate in the name of Valentin Manahan she was referring to is
actually the Assignment of Sale Certificate No. 511 (Exh. 2-OSG).26 ten.lihpwal

On November 17, 2009, the OSG submitted the following certified true copies of documents contained in Volume 2 of the
records pertaining to Lot No. 823, Piedad Estate, on file with the LMB: (a) Assignment of Sale Certificate No. 1054 dated
March 11, 1919 executed by Regina Geronima and Zacarias Modesto, assignors, and Felicisimo Villanueva as assignee
(Exh. 33-OSG [LMB]); (b) Assignment of Sale Certificate No. 1054 dated May 4, 1923 executed by M. Teodoro and
Severino Manotok as assignors, and Severino Manotok as assignee (Exh. 34-OSG [LMB]); (c) Assignment of Sale
Certificate No. 651 dated April 19, 1930 executed by Ambrosio Berones as assignor, and Andres C. Berones as assignee
(Exh. 35-OSG [LMB]); and (d) Sale Certificate No. 651 issued by the Government of the Philippine Islands in favor of
Ambrosio Berones (Exh. 36-OSG [LMB]).27

Recalled to the witness stand, Atty. Tuanda testified that the allegation of the Manotoks in their Tender of Excluded
Evidence With Proffer of Proof that she suppressed the release of LMB records to Luisa Padora is misleading, as she was
merely complying with DENR Administrative Order No. 97-24 dated July 30, 1997 on the release and disclosure of
information. As ordered by the court on July 28, 2009, she allowed the Manotoks to photocopy all the records pertaining to
Lot No. 823. She asserted that Volume 2 of the records of Lot No. 823 is not missing, as in fact she produced it in court.
Volume 2 contained the following documents: (a) Assignment of Sale Certificate No. 651 dated April 19, 1930 covering
Lot 823 of the Piedad Estate executed by Ambrosio Berones as assignor, in favor of Andres C. Berones as assignee; (b)
Assignment of Sale Certificate No. 1054 dated March 11, 1919 executed by Regina Geronimo and Zacarias Modesto; (c)
Assignment of Sale Certificate No. 1054 dated May 4, 1923 executed by Teodoro and Severino Manotok covering Lot No.
823; and the NBI Chemistry Report (Exh. 11-OSG [LMB]).28

On cross-examination, Atty. Tuanda said that she assumed office only on January 16, 2009. Volume 2 contains only four
(4) thin documents and she personally supervised its pagination; she cannot answer for the pagination of Volumes 1, 3
and 4. She cannot recall if there are other papers in the RMD involving Lot No. 823, there is no indication when the
documents in Volume 2 were received for filing but their index cards will show those dates. The documents in Volume 2
were borrowed by the NBI and were inadvertently inserted in Volume 1 when it was returned by the NBI. She cannot
remember if there was a Deed of Conveyance either in favor of the Manotoks or the Barques. They have in their records
not the Sale Certificate No. 511 dated June 24, 1939 but only the Assignment of Sale Certificate No. 511. 29

Nemesio Antaran, Assistant Chief of the RMD, and concurrently Chief of the General Public Land Records Section, LMB,
brought to the court original copy of Assignment of Sale Certificate No. 511 dated June 24, 1939 in the name of Valentin
Manahan, assignor, and Hilaria de Guzman, assignee (Exh. 2-OSG [LMB]).30 On cross-examination, he said that such
document was included in the Indorsement dated February 23, 1999 signed by Mamerto L. Infante, Regional Technical
Director, Lands Sector, DENR-NCR. He cannot ascertain when Exh. 2-OSG was filed or received by the DENR. He saw
in the record sale certificate in the name of the Manotoks but did not see sale Certificate No. V-321 and Deed of
Conveyance No. 4562 in the name of the Barques. Exhibits I to VI, X to XXII are faithful reproduction of the originals on
file with the RMD, but he is not sure whether their Exhibits VII, XXVI to XXXIV are on file with the RMD. 31 On re-direct
examination, he said that the Indorsement dated February 23, 1999 (Exh. 9-OSG [LMB]) was addressed to the Director,
LMB and not to the OSG. He further explained that the DENR-NCR has documents pertaining to Lot 823 of the Piedad
Estate because the application to purchase friar land begins with or emanates from the NCR office. After the requirements
are completed, these applications are forwarded to the Office of the Director, LMB for processing.32

The OSG formally offered Exhibits 1-OSG [LMB] to 27-OSG [LMB], and 28-OSG [DENR] to 32-OSG-DENR.

B. Manotoks

Jose Marie P. Bernabe, a geodetic engineer who had worked in both public and private sectors and was hired as
consultant in cases involving disputed lots, examined the survey plans and titles covering Lot No. 823 of the Piedad
Estate. Using coordinate geometry and/or computer aided design, he plotted the technical descriptions of Lot No. 823
based on the technical descriptions appearing in OCT No. 614, Manotoks TCT No. RT-22481 and Barques TCT No.
210177. He found that although both titles indicate that Lot No. 823 was originally registered under OCT No. 614, they
contain significantly different technical descriptions of the same property. The Manotoks title indicates an unsubdivided
Lot No. 823 with the following boundaries: on the East by Payatas Estate, on the Southeast by the Tuazon Estate, and on
the West by Lots 824-A, 818-A and 818-C. On the other hand, the Barques title describes Lot 823 as subdivided into Lots
823-A and 823-B bounded on the Northeast and Southeast by the property of Diez Francisco, on the Southwest by Lot
824, and on the Northwest by Lot 826. However, the southeast and northeast boundaries of Lot No. 823 as indicated in
the Barques title are not mentioned in OCT No. 614. Using Google Earth, Lot 826 is actually located far north of Lot 823
based on the Lot Description Sheet (Exh. 4333) certified correct and reconstructed on December 17, 1979 by the Director
of Lands. Lot 818 is the correct lot to the west of Lot 823 together with Lot 824, as shown in the various approved survey
plans in the area (such as Psd-16296, Psd-16489, Psd-6737, Psd-22842 and Psd-291211), but as shown in the Barques
title, Lots 824 and 826 are cited as adjacent lots to the west of Lot 823. He found some unusual irregularities in the
Barques Subdivision Plan Fls-3168-D dated June 21, 1940 (Exh. 4534), prepared for Emiliano Setosta. When he
compared Subdivision Plan Fls-3004-D dated February 16, 1941, the lot he surveyed covering Lot 290-B which is a
portion of Lot 290 of the Piedad Estate covered by TCT No. RT-120665, he noticed that Fls-3168-D dated June 21, 1940
is more than six (6) months ahead of the date of survey on February 16, 1941 for Fls-3004-D. It is highly irregular that a
survey executed at a later date would have a lower plan number since the plan numbers are issued consecutively by the
Bureau of Lands. He likewise found that the errors and discrepancies pertaining to Fls-3168-D show that the regular
procedures and requirements for preparing subdivision plans were not followed. 35

Engr. Bernabe pointed out that his examination of Survey Plan for Lot 824-A done in 1947 (Exh. 4636) showed that to the
east of Lot 824-A is undivided Lot 823 (Exh. 46-A37); the Survey Plan for Lot 822-A (Exh. 4738), which is located north of
Lot 823, prepared in 1991 and approved in 1992, shows that Lot 823 is an undivided piece of property (Exh. 47-A39); and
Survey Plan for Lot 818-A-New (Exh. 4840) shows Lots 818-New-A, 818-New-B and 818-C the western boundaries of Lot
823, which is consistent with the description in Manotoks title. Thus, based on the totality of the documents he examined,
Lot 823 of the Piedad Estate is an undivided piece of land with an area of 342,945 square meters, bounded on the East
by Payatas Estate, on the Southeast by the Tuazon Estate and on the West by Lots 824-A, 818-A and 818-C, consistent
with the technical descriptions appearing in the nine (9) certificates of title of the Manotoks. Based on his research, and as
shown in the Report signed by Engr. Privadi Dalire, Chief of Geodetic Surveys Division, LMB (Exh. 4941) and the latters
Affidavit dated November 18, 2006 (Exh. 5042), no record of Subdivision Plan Fls-3168-D exists in the LMB and LMS-
DENR-NCR, and the machine copy of Fls-3168-D purportedly issued by the LMS-DENR-NCR is spurious and did not
emanate from LMB.43

Luisa Padora, employed as legal assistant in the various corporations of the Manotoks whose responsibilities include
securing, preparing and safekeeping of all documents such as titles, conveyances, tax declarations, tax payment receipts,
etc. pertaining to the properties of the Manotoks, identified the documents marked as Exhibits 1 to 13, 26 to 27-
EEEEEEE.44

Milagros Manotok-Dormido declared that Lot 823 of the Piedad Estate where she also resides was acquired by their
grandfather Severino Manotok from the Government. They have since built several houses and structures on the property
where they live up to the present. The property was fenced with concrete walls to secure it from outsiders and bar the
entry of trespassers. As a result of the lengthy ownership of the Manotoks and their occupancy, Lot 823 became publicly
known and referred to as the Manotok Compound. Severino Manotok bought Lot 823 in the 1920s and "obtained a
transfer certificate of title under a direct transfer from the Government"; they have declared it for real property tax
purposes and religiously paid the taxes since 1933. Tracing the acquisition of ownership by the Manotoks of Lot 823, the
witness said she has in her possession copies of the following documents:

1. OCT No. 614 issued on March 12, 1912 in the name of "Gobierno de las Islas Filipinas" covering the Piedad
Estate, including Lot 823 (Exh. 9);

2. Sale Certificate No. 1054 dated March 10, 1919 issued by the Bureau of Lands to Regina Geronimo, Zacarias
Modesto and Felicisimo Villanueva covering Lot 823 (Exh. 10);

3. Assignment of Sale Certificate No. 1054 dated March 11, 1919 entered into between Regina Geronimo,
Zacarias Modesto and Felicisimo Villanueva as assignors, and Zacarias Modesto as assignee, covering Lot 823
(Exh. 11);

4. Assignment of Sale Certificate No. 1054 dated June 7, 1920 entered into between Zacarias Modesto as
assignor, and M. Teodoro and Severino Manotok as assignees, covering Lot 823 (Exh. 12);

5. Assignment of Sale Certificate No. 1054 dated May 4, 1923 entered into between M. Teodoro and Severino
Manotok as assignors, and Severino Manotok as assignee, covering Lot 823 (Exh. 13);

6. Relocation Plan No. FLR67-D for Lot 823 as surveyed for Severino Manotok on April 18, 1928 by Deputy
Public Land Surveyor A. Manahan and approved by the Bureau of Lands on August 27, 1928 (Exh. 20);

7. Description of Relocation Plan for Lot 823 prepared by Deputy Public Land Surveyor A. Manahan for Severino
Manotok with accompanying receipt (Exhs. 21 and 21-A);

8. TCT No. 22813 of the Registry of Deeds for the Province of Rizal indicating Lot 823, its area and boundaries,
the lower half of this document is torn (Exh. 8);

9. Deed of Donation dated August 23, 1946 executed by Severino Manotok in favor of his children (Purificacion,
Elisa, Rosa, Perpetua, Filomena, Severino, Jr., Jesus and Rahula Ignacio) and grandsons Severino III and
Fausto, Jr., covering Lot 823 (Exh. 7-A);
 10. Page of the Notarial Register of Notary Public Angel del Rosario for the year 1946 issued by the National
Archives reflecting the Deed of Donation executed by Severino Manotok (Exh. 7-B);

11. TCT No. 534 of the Registry of Deeds for the Province of Rizal issued on September 4, 1946 in the name of
the Manotok children and grandchildren (Exh. 7);

12. Deed of Assignment dated August 25, 1950 executed by the Manotok children and grandchildren in favor of
Manotok Realty, Inc. (Exh. 6-A);

13. TCT No. 13900 of the Registry of Deeds for Quezon City issued on August 31, 1950 in the name of Manotok
Realty, Inc. (Exh. 6);

14. Unilateral Deed of Conveyance dated January 31, 1974 executed by Manotok Realty, Inc. in favor of the
Manotok children and grandchildren, covering Lot 823 (Exh. 5-A);

15. TCT No. 198833 of the Registry of Deeds for Quezon City issued on May 27, 1974 in the name of the
Manotoks (Exh. 5);

16. Deeds of Absolute Sale separately executed on May 8, 1976 by Purificacion Laperal Rosa R. Manotok,
Perpetua M. Bocanegra, Severino Manotok, Jr. and Jesus R. Manotok (Exhs. 4-A to 4-E);

17. TCT No. 221559 of the Registry of Deeds for Quezon City issued on August 9, 1976 in the name of the
Manotoks (Exh. 4);

18. Deed of Sale executed by Perpetua M. Bocanegra in 1984 covering the remaining 1/2 of her 1/9 undivided
interest in Lot 823 in favor of her son George M. Bocanegra;

19. TCT No. 330376 issued in the name of the Manotok children and grandchildren in 1984 as a result of the
Deed of Sale executed by Perpetua M. Bocanegra, covering Lot 823;

20. Unilateral Deed of Absolute Sale dated December 22, 1986 executed by Ignacio R. Manotok covering his 1/9
undivided interest in Lot No. 823 in favor of his children Michael Marshall, Mary Ann, Felisa Mylene, Ignacio, Jr.
and Milagros (Exh. 3-A);

21. TCT No. 354241 issued in the name of the Manotok children and grandchildren as a result of the Unilateral
Deed of Absolute Sale dated December 22, 1986 executed by Ignacio R. Manotok, covering Lot No. 823;

22. Deed of Absolute Sale dated October 8, 1987 executed by Fausto Manotok covering his 1/18 undivided
interest in Lot No. 823 in favor of his children (Exh. 2-A);

23. TCT No. 372302 of the Registry of Deeds for Quezon City issued on October 17, 1987 in the name of the
Manotok children and grandchildren as a result of the October 8, 1987 Deed of Absolute Sale executed by Fausto
Manotok (Exh. 2);

24. TCT No. RT-22481 (372302) of the Registry of Deeds for Quezon City issued in the name of the Manotok
children and grandchildren in 1991 upon their application for reconstitution of TCT No. 372302 after the same was
destroyed by a fire that razed the Quezon City Registry of Deeds office on June 11, 1988 (Exh. 1).

Milagros Manotok-Dormido also identified those documentary exhibits attached to their pre-trial brief, several declarations
of Real Property covering Lot No. 823 (Exhs. 26 to 26-N), numerous Real Property Tax Bills and Real Property Tax
Receipts from 1933 to the present (Exhs. 27 to 27-EEEEEEE, 27-YYYYYY), photographs of the perimeter walls
surrounding Lot No. 823 (Exhs. 35-A to 35-UUU), photographs of the houses and structures built by the Manotoks on the
property over the years (Exhs. 35 to 35-YY), some letters from government offices recognizing their grandfather as the
owner of the property (Exhs. 15, 16, 17, 18 and 25), and Metro Manila Street Map (2003 ed.) identifying Lot No. 823 as
"Manotoc Compound" (Exh. 34). She had secured a copy of Deed of Conveyance No. 29204 dated December 7, 1932
(Exh. 51-A45) from the National Archives of the Philippines.46

On cross-examination, the witness declared that she is testifying in lieu of Rosa Manotok; her affidavit is the same as the
affidavit of Rosa Manotok, the daughter of Severino Manotok. She asserted that Severino Manotok acquired Lot No. 823
of the Piedad Estate by direct transfer from the Government. After the Bureau of Lands issued the Assignment of Sale
Certificate No. 1054 on June 7, 1920, her grandfather Severino Manotok fully paid the installments and was able to obtain
a title (TCT No. 22183) after a deed of conveyance was issued on December 7, 1932. Sale Certificate No. 1054 was not
annotated on OCT No. 614. Relocation Plan of Lot No. 823 (Exh. 21) indicated its location at Barrio Payong, Municipality
of Caloocan, Province of Rizal. The changes of location of the property in the tax declarations and tax receipts from Barrio
Payong, then to Barrio Culiat, and later to Barangay Matandang Balara was caused by the City Assessor (the Manotok
Compound and Barrio Culiat are two [2] distinct locations).47 As a layman, she considered as sales certificate the
Assignment of Sale Certificate No. 1054. They asked for a certified true copy of Deed of Conveyance No. 29204 from the
National Archives; she believes that it is an internal document of the Bureau of Lands. Despite a diligent search, they
were not able to secure a copy of Deed of Conveyance No. 29204 from the Bureau of Lands, LMB, LRA and the Registry
of Deeds offices of Quezon City, Caloocan and Rizal. When confronted with TCT No. 22813 supposedly dated August
1928 while the Deed of Conveyance was issued later in 1932, the witness said that the title must have been issued in
1933. The Manahans never demanded from the Manotoks nor sued the latter for the return of Lot 283, Piedad Estate
which they were also claiming.48

When asked who is the registered owner under TCT No. 22813, Milagros Manotok Dormido said she cannot answer it
because said document they recovered is truncated and cut under. But the Manotoks were the recognized owners under
TCT No. 22813 by the Provincial Assessor. As to the notation "cancelled by TCT No. 634" she said that she has not seen
that title; it could be a human error somewhere in that document. She also had no knowledge that TCT No. 634 covers a
lot in Cavite with an area of about 500 square meters registered in the name of Mamahay Development Corporation.49

Susana M. Cuilao, longtime employee of the Manotoks, testified that she assisted Elisa R. Manotok in filling the
application for reconstitution of TCT No. 372302 covering Lot No. 823 after it was destroyed in a fire which razed the
Quezon City Registry of Deeds on June 11, 1988. She identified the documents they submitted in their application. After
several follow-ups, in February 1991, Elisa R. Manotok received a copy of the Order dated February 1, 1991 (Exh. 36)
signed by the Reconstituting Officer Benjamin Bustos granting her application for reconstitution. In December 1993, she
received original duplicate copy of TCT No. RT-22481 (372302) from the Quezon City Registry of Deeds.50

One (1) of the rebuttal witnesses for the Manotoks, Luisa Padora, in her Judicial Affidavit dated December 9, 2009,
obtained from the National Archives certifications (signed by an archivist) stating that said office has no copy on its file of
the following: Sale Certificate No. 511 executed by Valentin Manahan in favor of Hilaria de Guzman (Exh. 2851); the Deed
of Absolute Sale between Hilaria de Guzman Manahan and Felicitas B. Manahan (Exh. 29 52) supposedly notarized by
Santiago R. Reyes on August 23, 1974 (Exh. 11953) as Doc. No. 1515, Page 98, Book No. VI, series of 1974 entered in
the notarial register is a Memorandum of Agreement, Promissory Note and Payment Receipt executed by Reynaldo
Cornejo on August 23, 1974; and the Deed of Absolute Sale between Emiliano Setosta and Homer K. Barque (Exh. 3054)
as certified true copies of pages 84 and 85 (Exhs. 120 and 12155) of the notarial register of Atty. Eliseo Razon shows that
neither Document Nos. 415 nor 416 was the supposed Deed of Sale dated September 24, 1975 between Emiliano
Setosta and Homer K. Barque but a Deed of Absolute Sale executed by Magdalena Reyes and a Special Power of
Attorney executed by Victorio Savellano, respectively.56

Luisa Padora further declared that sometime in 1999, she located two (2) old documents, among others, at the Manotoks
warehouse in the compound: a 1929 certified copy of Assignment of Sale Certificate No. 1054 dated May 4, 1923 (Exh.
13-A57) between M. Teodoro and Severino Manotok (assignors) and Severino Manotok (assignee) covering Lot No. 823,
which was certified by the Chief Clerk of the Bureau of Lands, and the original Official Receipt dated February 20, 1929
(Exh. 1458) issued by the Government of the Philippines Islands for the cost of the certified copy of the Assignment of Sale
Certificate No. 1054. With respect to the documents relating to Lot No. 823 which were in the LMB, Luisa Padora stated
that she brought the letter-request (Exh. 12259) dated July 9, 2009 requesting for copies of all LMB documents pertaining
to Lot No. 823. When she went to the Friar Lands Division of the LMB, and went through the folders marked Volumes I, III
and IV, she noticed that there was no Volume II, and that out of the 1000 pages of available records of Lot No. 823, only
416 pages were released to her upon orders from the OIC of the RMD, Atty. Tuanda. Atty. Tuanda released all the
withheld documents (only 416 pages out of 1000 pages of available records of Lot No. 823) only after she was ordered by
the Court to provide the Manotoks with copies of the documents. She noticed there was no Volume II. The LMB released
some of the requested documents after her first affidavit was submitted before the court on July 20, 2009. 60

As to the statement of Atty. Tuanda during the November 10, 2009 hearing that Volume II of the records of Lot No. 823
was not missing and is available, Luisa Padora stated that she received a letter-reply dated October 15, 2007 addressed
to the Manotoks (Exh. 11761) from Mr. Rainier D. Balbuena, OIC of the RMD, which states that out of all the records
pertaining to Lot 823, Piedad Estate, only Volumes I, III and IV were officially returned/received by the RMD on October 5,
2006 and that Volume II was not returned to the RMD. As additional proof, she presented LMB Office Memorandum (Exh.
11862) dated September 19, 2007 which contains a note at the bottom left hand corner which states "Volume II not yet
returned as of this writing (charged to Office of the Asst. Director and recd by Charie Sale on 12.21.00)."63
Dr. Mely F. Sorra, Document Examiner V and presently the Chief of Questioned Documents Division, Philippine National
Police (PNP), testified that the LMB submitted for examination on December 1, 2009 three (3) questioned documents: "Q-
1" - Assignment of Sale Certificate No. 1054 dated March 11, 1919 executed by Regina Geronimo, Modesto Zacarias and
Felicisimo Villanueva; "Q-2" - Assignment of Sale Certificate No. 1054 dated May 4, 1923; and "Q-3" Assignment of
Sale Certificate No. 511 dated June 24, 1939 (transmittal letter marked as Exh. 139 signed by Atty. Fe. T. Tuanda, OIC,
RMD). Her laboratory report (Exh. 13864) contains the findings of the microscopic, ultraviolet (UV) transmitted light and
physical examinations, and photographic procedure she performed on the questioned documents. She also went to the
National Archives for comparison of the appearance of documents dated 1919, 1923 and 1932 with "Q-1", "Q-2" and "Q-
3." She found the three (3) documents authentic being old and because of their discoloration and tattered condition, but
she admitted that she cannot tell the age of said documents, nor the age of the paper used. She merely determined the
age through the browning and discoloration, tears or tattered condition of the paper. In this case, she concluded that the
documents were old because they are attested/notarized and because of their physical appearance, such as the ink used
in the signatures was already fading and had evaporated/oxidized. Because of age, the ink of the signatures appearing on
the documents had evaporated and the color is brownish; the particular ink which evaporates refers to a fountain pen ink.
The entries that were in ballpoint pen ink were the written entries on the stamp pad bearing the words "Department of
Environment and Natural Resources, Land Management Bureau-RMD Manila." When the documents were subjected
under ultraviolet light examination, they gave a dull fluorescence reaction as opposed to a very bright fluorescence
reaction of a new coupon bond.65

On cross-examination, Dr. Sorra said that at the National Archives she saw the duplicates of the originals of documents
"Q-1" and "Q-2" and had examined and photographed them; they appeared newer than those copies submitted by the
LMB because of good storage. She did not examine contemporaneous documents in the records of the LMB because she
believes that the National Archives is the repository of all the documents in the Philippines and because the three (3)
questioned documents came from the LMB, and she presumed that the record-keeping facilities at the LMB are not as
good as that of the National Archives based on the difference in the appearance of the documents from these offices.
However, she was not able to see how the documents are being stored at the LMB as she was not able to visit said office.
Based on her findings, the questioned documents are old; she had seen documents dated 1919 and 1923 on file with the
National Archives. Documents "Q-1 and Q-2" were from 1919 based on their copies at the National Archives and her
examination thereof. She explained that her conclusion that the document is authentic does not mean that the signatures
are also authentic because she had no basis for comparison, and that she would not be able to determine the age of a
document when there was an artificial aging.66

Dr. Sorra admitted that she did not conduct a chemical examination of the questioned documents because the PNP Crime
Laboratory has no scientific equipment for chemical analysis, and that she did not refer the said documents to the
Chemistry Division of the PNP because the carbon dating equipment is with the Department of Science and Technology
(DOST); she also did not refer the documents to the DOST. She agreed that the best and more accurate way of
determining the age of a paper or a document is through carbon dating, and explained that through microscopic and
physical examination she will be able to tell whether the document is old but not its exact age. 67

In her Rebuttal Judicial Affidavit,68 Milagros Manotok-Dormido declared that the completion of Severino Manotoks
installment payments was evidenced by official receipts (Exhs. 112-11569) and acknowledged by the Deed of Conveyance
No. 29204 (Exh. 51-A) validly certified by the National Archives (Exhs. 84 and 85 70), which also certified page 97 of the
Notarial Register for the year 1932 that on December 20, 1932, Jose P. Dans appeared and acknowledged the due
execution of this Deed of Conveyance (Exh. 8371). Said Deed of Conveyance is genuine as shown by the certified copies
of Deeds of Conveyance issued on the same date and which contain deed numbers immediately preceding and
succeeding the Deed of Conveyance No. 29204 (Exhs. 86-9872). On January 29, 1946 (August 23, 194673), Severino
Manotok executed a Deed of Donation conveying Lot No. 823 covered by TCT No. 22813 to his children and
grandchildren. The Manotoks ownership of the property is further evidenced by tax declarations in the name of Severino
Manotok and later his children and grandchildren as co-owners (Exhs. 25 to 27-YYYYYY), tax payment receipts, building
permits secured by Elisa Manotok for the construction of buildings and structures on the land (Exhs. 64 to 78 74), and
succeeding transfer certificates of titles.75

With respect to the claim of the Barques, the witness presented the following documents: (a) Certification issued on
February 10, 2009 by the National Archives stating that it has no copy on file of the Deed of Absolute Sale allegedly
executed between Emiliano Setosta and Homer K. Barque ratified on September 24, 1975 before Notary Public Eliseo A.
Razon (Exh. 8076; (b) Property Identification issued by the Quezon City Assessors Office showing that Lot No. 823 of the
Piedad Estate remains unsubdivided (Exh. 7977; (c) Letter dated August 7, 2007 addressed to Engr. Privadi J.G. Dalire
(former Chief of Geodetic Surveys Division) from Chief of Geodetic Surveys Division, Engr. Bienvenido F. Cruz, attesting
that Fls-3168-D is not recorded in the Inventory Book of Fls Plans (Exh. 9978, also shown by a certified copy of page 351
of the Inventory Book of Plans (Exh. 8279 ; and (d) Letter dated August 6, 2009 from the Quezon City Assistant Assessor
confirming that Property Index No. 21-22020 which was submitted by the Barques marked as Exh. 35, does not pertain to
Lot 823 of the Piedad Estate but to a property located at Miller St. cor. Don Vicente St., Filinvest II Subdivision, Bagong
Silangan, Quezon City (Exh. 10080).81

As to the claim of Manahans, the witness submitted the following documents: (a) the same Letter from the Quezon City
Assistant Assessor, it was confirmed that Tax Declaration No. C-138-06951, submitted by the Manahans as Exh.1, does
not pertain to Lot No. 823 of the Piedad Estate but to a property located at Don Wilfredo St., Don Enrique Subdivision,
Barangay Holy Spirit, Quezon City (Exh. 10082; (b) Certifications from the National Archives that it has no copy on file of
Sale Certificate No. 511, Assignment of Sale Certificate No. 511 and Deed of Sale between Hilaria de Guzman-Manahan
and Felicitas Manahan (Exhs. 2883, 104 and 10584; (c) Certification dated October 14, 2009 issued by Jose M.B. Cabatu,
Chief, Reconstitution Division-LRA, stating that an administrative petition for reconstitution of the purported original of TCT
No. 250215 of the Registry of Deeds for Quezon City was filed by a certain Felicitas Manahan and transmitted to the LRA
on or about January 7, 1998 but the petition and other documents transmitted therewith could not be located, and that it
has no record of any order directing the reconstitution of said title (Exh. 106 85; (d) Certificates of Death issued by the
Parish of Our Lady of Mt. Carmel in Malolos City, Bulacan stating that Valentin Manahan died on September 21, 1931,
thus refuting the claim that Valentin Manahan caused the property survey of Lot No. 823, the preparation and approval of
survey plan Fls-3164 and executed the Assignment of Sale Certificate No. 511 in favor of Hilaria de Guzman on June 24,
1939 (Exhs. 102, 61, 6286; (e) Negative Certification of Death issued by the Office of the City Civil Registrar of Malolos
stating that the records of deaths during the period January 1931 to December 1931 were all destroyed by natural cause
and for that reason it cannot issue a true transcription from the Register of Deaths relative to Valentin Manahan who is
alleged to have died on September 21, 1931 in Malolos City (Exh. 103 87; (e) Documents obtained from the Parish of Our
Lady of Mt. Carmel, the Office of the Civil Registrar of Malolos City and the National Statistics Office (NSO), and also
Liber Defunctorum 5-Entry No. 10, showing that Rosendo Manahan died on July 30, 1963 at the age of 20, thus refuting
the claim of Rosendo Manahan that he is the son of Lucio Manahan and Hilaria de Guzman-Manahan (Exhs. 107, 108,
109 and 5788.89

Milagros Manotok-Dormido further declared that the building permits applied for by her aunt refer to the houses appearing
in the photographs attached to her Judicial Affidavit. Based on the index cards (Exhs. 64 to 69 90, the location of the
properties described therein is Capitol Golf Club, Capitol; at that time, the location of the property subject of the building
permits in Exhs. 67, 68 and 69 is Capitol Golf Club, Capitol. They did not apply to build residences inside a golf club and
there is no golf course inside the Manotok Compound.91 She went to Malolos about four (4) times to confirm the story of
the Manahans. At the Parish of Our Lady of Mt. Carmel, the custodian of the records, Teodora Dinio, referred her to a
man she knew as "Mang Atoy" who showed her the Book of Deads. She borrowed three (3) books and returned them
right away after xeroxing. She asked "Mang Atoy" where the Catholic cemetery is and he pointed to the back of the
church. There she saw (for a brief time) the tombstone of Lucio Manahan; she did not see that of Valentin Manahan.
When asked why she did not go to the LMB or other government office instead of the National Archives to secure a
certification in the records concerning Sale Certificate No. 511, the witness said it was because that was a notarized
document. The certifications she obtained were not signed by the Executive Director but only by an archivist who was
authorized to sign in behalf of Dr. Teresita Ignacio, Chief of the Archives Collection and Access Division. As to the lack of
signature of the Secretary of Agriculture and Natural Resources in the certified copy of Deed of Conveyance No. 29204
from the National Archives, she asserted that it is still a complete document being just a copy of the duplicate original,
which must have been signed by the Secretary of Agriculture and Natural Resources; she was sure of this, as in fact they
were issued TCT No. 22813 dated 1933 (not August 1928 as erroneously reflected in the title because the Deed of
Conveyance was issued in 1932 and her grandfather was notified by the Provincial Assessor of Rizal that he can start
paying his tax on August 9, 1933).92

The Manotoks also presented as witness Msgr. Angelito Santiago, Parish Priest of Our Lady of Mt. Carmel in Barasoain,
Malolos, Bulacan. Said witness testified that based on their record book, Hilaria de Guzman who was living in Bulihan was
the wife of Lucio Manahan who died on August 19, 1955, while in Book 7, Hilaria de Guzman who died on June 19, 1989
was living in San Gabriel and the husband was Jose Cruz; "Hilaria de Guzman" appearing in Book 7 is different from
Hilaria de Guzman found in Book 5. He further declared that the Certificate of Death of Valentin Manahan married to
Francisca Lucas (Exh. 6193 does not cover the death of Valentin Manahan married to Placida Figueroa. He could not
explain why Folio Nos. 145, 146, 148, 149 are intact while page or Folio 147 of Book 4 covering the record of deaths in
the month of February 1955 is missing.94

Other documentary evidence formally offered by the Manotoks are the following: (a) Exh. 7 95 - a photocopy of TCT No.
534 covering Lot No. 823, Piedad Estate in the name of the Manotok children, which is offered to prove that said title is a
transfer from TCT No. 22813 which was cancelled by TCT No. 534; (b) Exh. 19 96 - certified copy of a Certification dated
November 18, 1950 issued by Register of Deeds for Pasig Gregorio Velazquez that the original of TCT No. 534 issued in
the name of Purificacion Manotok, et al. was forwarded to the Register of Deeds for Quezon City; (c) Exh. 119 97 - certified
copy of page 98 of the Notarial Register of Atty. Santiago Reyes which shows that document no. 1515 is a Memorandum
of Agreement-Promissory Note & Payment Receipt executed by one (1) Mr. Cornejo on August 23, 1974, and not the
alleged Deed of Sale between Hilaria de Guzman and Felicitas Manahan; (d) Exh. 12098 - certified copy of page 84 of the
Notarial Register of Atty. Eliseo Razon for 1975 which shows that doc. no. 415 is not the supposed Deed of Sale dated
September 24, 1975 between Homer Barque and Emiliano Setosta, but a Deed of Absolute Sale executed by Magdalena
Reyes; (e) Exh. 12199 - certified copy of page 85 of the Notarial Register of Atty. Eliseo Razon for 1975 which shows that
doc. no. 416 is not the supposed Deed of Sale dated September 24, 1975 between Homer Barque and Emiliano Setosta,
but a Special Power of Attorney executed by Victorino Savellano.

As part of their rebuttal evidence, the Manotoks also formally offered the following: Exh. 142 - Certified copy issued by the
National Archives of Assignment of Sale Certificate No. 1054 dated March 11, 1919 between Zacarias Modesto, Regina
Geronimo and Felicisimo Villanueva (assignors) and Zacarias Modesto (assignee), covering Lot 823 of Piedad Estate 100;
Exh. 143 Certified copy issued by the National Archives of Assignment of Sale Certificate No. 1054 dated June 7, 1920
between Zacarias Modesto (assignor) and M. Teodoro and Severino Manotok (assignees) covering Lot 823 of Piedad
Estate101; and Exh. 144 - Certified copy issued by the National Archives of Assignment of Sale Certificate No. 1054 dated
May 4, 1923 between M. Teodoro and Severino Manotok (assignors) and Severino Manotok (assignee), covering Lot 823
of Piedad Estate.102

C. Barques

Teresita Barque-Hernandez identified and affirmed the contents of her Judicial Affidavit declaring that she caused the
filing of an application for administrative reconstitution of TCT No. 210177 before the LRA because the original copy
thereof was among those titles destroyed in a fire which struck the Quezon City Hall in 1988. As proof that her father
Homer Barque owned Lot No. 823 of the Piedad Estate, she presented copies of various Tax Declarations from 1986 up
to 1996 and Plan of Lots 823-A and 823-B, Fls-3168-D dated April 24, 1998. Her father acquired the property from
Emiliano P. Setosta pursuant to a Deed of Absolute Sale dated September 24, 1975 (Exh. 14103. Emiliano P. Setosta was
issued TCT No. 13900 but despite diligent efforts she could no longer locate it. She was able to obtain the following
documents from the LRA and Bureau of Lands: (a) Certified true copy of the approved Subdivision Plan of Lot 823 of the
Piedad Estate for Emiliano Setosta dated June 21, 1940, containing an area of 342,945 square meters (Exh. 3 104; (b)
Certified true copy of the File Copy from the Bureau of Lands of said Subdivision Plan now bearing the typewritten
notation "VALIDATION DENR A.O. No. 49 1991" (Exh. 4105; (c) Certification dated April 11, 1996 from the LRA issued by
Felino M. Cortez, Chief, Ordinary and Cadastral Decree Division stating that "as per Record Book of Decrees for Ordinary
Land Registration Cases, (OLD) CLR Record No. 5975, Rizal was issued Decree No. 6667 on March 8, 1912", which
appears in TCT No. 210177 in the name of Homer L. Barque, Sr. (Exh. 5106; (d) Certified true copy of the survey plan
(microfilm enlargement of Fls-3168-D with the signatures of Privadi J.G. Dalire and Carmelito Soriano, which she got from
the Bureau of Lands (Exh. 6107; (e) Certified photocopy of BL From 31-10 showing the technical descriptions of Lots 822,
823, 824 and 826 (Exh. 7108; and (f) BL Form No. 28-37-R dated 11-8-94 which shows the lot boundaries, also obtained
from the Bureau of Lands (Exh. 12109.110

On cross-examination, the witness said that she is engaged in selling subdivision lots and many attempted to sell Lot 823
but nobody buys it. Emiliano Setosta was introduced to her by her father in 1974 or 1975 when she was in her 30s. Her
father did not discuss with the family his transaction with Emiliano Setosta and she learned about it when her father was
sick and dying in 1989. When asked why it was only in 1989 that she discovered that her father purchased thirty four (34)
hectares of land from Emiliano Setosta, she answered it was wayback in 1985. Asked again as to when she learned for
the first time of the purchase of the subject lot by her father, she replied that it was sometime in 1989 after the fire which
gutted the Register of Deeds in 1988. In 1985, when her mother was sick of cervical cancer, her father borrowed money
from her Lola Felisa to purchase the subject lot. When asked about such money borrowed by her father in 1985, she said
that her father bought the property in 1975 and the money borrowed by her father was used for the hospitalization of her
mother. Her father left the title of the subject lot to her Lola Felisa before his death in 1991. After her fathers death, her
sister found a tax declaration covering Lot 823 which was burned by her sister along with other belongings of their father.
In filing a petition for administrative reconstitution, she applied for the issuance of a tax declaration; the tax declaration she
secured was "new" and the property "undeclared". When asked why, she said that the lawyer of her father who is 89
years old told them how to do it because "we do not have tax declaration". When asked again why the property is
"undeclared", she replied that the OIC of the Assessors Office in the person of Mr. Viloria told her that the tax declaration
of her father was lost because of "saksak-bunot". In the early part of 1999, a certain Atty. Quilala of the Register of Deeds
told her that another person filed a petition for reconstitution; he gave her copies of a tax declaration and title in the name
of Felicitas Manahan married to Rosendo Manahan.111

As for the title of the Manotoks, nobody told her about it when she was securing a new tax declaration. Before 1979, she
had visited the property which had no fence then. She was not actually interested, she just went there for a visit with her
friends to boast that her father bought something that is big. She only learned there was somebody occupying their land
after she had paid the taxes and submitted documents which were transmitted to the LRA; it was the reconstituting officer
who told her that the title has been reconstituted already. She had not seen before any structure inside the property. The
reconstituting officer made it hard for her to have administrative reconstitution of her title, verifying if she had an approved
plan. She admitted that as shown in the Deed of Conveyance No. 4562 dated May 4, 1937 (Exh. 1 112, the lot was paid in
Japanese war notes despite the fact that the war started only on December 8, 1941. She was not able to bring with her
the original copy of TCT No. 210177 because it was mortgaged on June 15, 2007 and the same is in the possession of
Cedric Lee (president of Isumo Corporation) from whom she received P10,000,000.00; Mr. Cedric Lee will buy the
property. Her sister was to be operated at that time and she was forced to borrow money. Mr. Lee wanted to be ahead of
Ayala, Megaworld, and others, in offering to buy the property. She admitted that they never tried to occupy Lot No. 823
after learning that her father owned it in 1985. They were then employed and had a bus line (Mariposa Express); her
father bought other properties but she was not privy to this. Exhibits 34, 35, 35-A and 35-B113pertaining to the claim of
Manahans were given to him not by Atty. Quilala but by Atty. Bragado. She never saw the title of Emiliano Setosta as her
father transferred immediately the title in his name (TCT No. 210177).114

As to the Sale Certificate and Deed of Conveyance in the name of Emiliano Setosta, she did not yet know its number or
date when she asked for a copy in the LMB (she went there accompanied by Castor Viernes), they just located it. After
two (2) days she returned and the person in-charge gave her a certified xerox copy of Deed of Conveyance No. 4562 and
Sale Certificate No. V-321 (Exh. 1), which documents were later authenticated by the LMB. The caption of this document
dated May 4, 1937 reads: "Republic of the Philippines, Department of Agriculture and Commerce, Office of the Secretary":
she agrees though that the Republic of the Philippines was not yet established at the time the document was executed. It
also mentioned the "Civil Code of the Philippines" and the purchase price being fully paid with Japanese war notes in July
1942. Together with Engr. Castor Viernes, she got a Certification dated June 8, 2009 from Mr. Ignacio R. Almira which
states that his office has available record of Deed of Conveyance No. 4562 (Exh. 1 115 and Sale Certificate No. V-321 (Exh.
2116. She also secured the Certification dated April 13, 2009 issued by Ignacio R. Almira, stating that "according to our
Registry Book upon verification that Lot No. 823, Piedad Estate under Sales Certificate No. 511 in favor of Valentin
Manahan as assignor and Hilaria de Guzman Manahan had no available record in this Office" (Exh. 30 117. She later
clarified that Ignacio R. Almira is not the custodian of the records of the LMB but Chief of the Regional Surveys Division
certifying documents with the DENR; neither is Ignacio R. Almira the custodian of the records of the DENR.118

Engr. Castor C. Viernes, a former employee of the Bureau of Lands (1961-1972), identified in court the following
documents he obtained through his research: (a) Certification dated June 19, 2007 issued by Rainier D. Balbuena, OIC,
RMD, LMB, Binondo, Manila stating that according to verification of their records, "EDPs Listing has available record with
Fls-3168-D, Lot 823, xerox copy of which is herewith attached, situated in Caloocan, Rizal (now Quezon City), in the
name of Survey Claimant Emiliano Setosta" (Exh. 10119; (b) Certification dated June 19, 2007 issued by LMB-RMD OIC
Rainier D. Balbuena stating that according to verification of their records, the office has no available record of F-30510
and F-87330, situated in Piedad Estate, Rizal, in the name of M. Teodoro as Assignor, and Severino Manotok as
Assignee, as per attached xerox copies of the Assignment of Sale Certificate No. 1054, according to the general index
card" (Exh. 24120; (c) Certification issued by Ernesto S. Erive, Chief, Surveys Division, DENR-NCR stating that "plan Flr-
67-D is not among those existing records on file in the Technical Records and Statistics Section of this Office. However,
further verification should be made from Land Management Bureau, Binondo, Manila" (Exh. 26121; (d) Letter dated
January 10, 2003 from Bienvenido F. Cruz, OIC, Geodetic Surveys Division, LMB, stating that Flr-67-D is not listed in the
EDP listing (Exh. 27122; (e) Plan of Lot 823, Piedad Estate prepared by Geodetic Engineer Teresita D. Sontillanosa on
April 23, 1998 (Exh. 28123; (f) TCT No. RT-22481 (372302) in the name of Severino Manotok IV, et al. indicating Payatas
Estate as a boundary in the survey made in 1912 when Payatas Estate did not exist until 1923 (Exh. 29124; (g) Certification
dated April 13, 2009 issued by Ignacio R. Almira, Chief, Regional Director Surveys Division, confirming the absence of
any record in the DENR of Sale Certificate No. 511 issued to Valentin Manahan (Exh. 30 125; (h) Certification dated August
27, 2002 issued by Bienvenido F. Cruz, OIC, Geodetic Surveys Division, LMB stating that Fls-3164 is not listed in the
EDP Listing (Exh. 31126; (i) Letter dated March 12, 2003 from Atty. Crizaldy M. Barcelo, Assistant Regional Executive
Director for Technical Services, DENR-NCR stating that their office has no record on file of Sale Certificate No. 511 in the
name of Valentin Manahan and Sale Certificate No. 1054 in the name of Modesto Zacarias, Regina Geronimo and
Felicisimo Villanueva, covering Lot 823, Piedad Estate, and advising Mr. Viernes to make a similar request with the LMB
which has jurisdiction over friar lands (Exh. 32127; (j) Copy of TCT No. 250215 in the name of Felicitas Manahan, married
to Rosendo Manahan issued on May 25, 1979 covering Lot 823, Piedad Estate with an area of 342,945 square meters
given to Felicitas Manahan by the Register of Deeds of Quezon City (Exh. 34 128; (k) Tax Declaration No. D-138-07070 in
the name of Felicitas Manahan indicating that Lot 823, Piedad Estate is situated at Old Balara, Holy Spirit/Capitol, Quezon
City for the year 1996, with tax receipt and certification (Exhs. 35, 35-A and 35-B129; (l) Letter dated February 21, 2003
from Emelyne Villanueva-Talabis, Special Assistant to the LMB Director informing Mr. Viernes that his letter requesting for
a certified copy of Sales Certificate Nos. 511 and 1054 was forwarded to the RMD on February 21, 2003 (Exh. 36130; and
(m) Letter dated February 27, 2003 from Leonardo V. Bordeos, OIC of LMB-RMD informing Mr. Viernes that the latters
request cannot be granted because "the said records are still not in the custody of this Division" and suggesting that a
similar request be made with the DENR-NCR (Exh. 37131.132
Engr. Viernes asserted that the subject property is not bounded by the Payatas Estate considering that when the Piedad
Estate was surveyed in 1907, the Payatas Estate was not yet existing because it was surveyed only in 1923. The
computation made by Engr. Barikwa (sic) and report made by Engr. Evelyn Celzo, and also the plotting of Marco Castro
seems to be erroneous. The other parties claimed that the property described in TCT No. 210177 (Barques title) is not
located in Quezon City allegedly because when plotted to its tie line it appears to be 5,637.50 meters away from Lot 823.
In the submitted title of the Barques, Lot 823-A of Fls-3168-D as described in the title is not readable; it seems to be 9,000
kilometers and not 4,000 kilometers. That is why when they plotted the tie line of Lot 823-A using the 9,786.6 meters from
monument 16, it falls away from the map of Quezon City, something like more than five (5) kilometers away from the
plotting using the tie line of the original Lot 823 of the Piedad Estate of 4,097.4 meters from monument 16. The witness
said he showed his computation to his officemate, Geodetic Engineer Teresita Sontillanosa who agreed with his
computation. He identified Comparative Report on TCT No. RT-22481 and TCT No. 210177 (Exh. 41), the Sketch Plans
for Lots 823-A and 823-B (Exhs. 39 and 41133.134

Engr. Viernes denied that he was employed by the Barques for a fee. It was Mr. Gregorio Que, a friend of Mrs.
Hernandez, the son of his client Mr. Domingo Que, who asked him to help verify the authenticity of the Barques title. He
obtained copies of TCT No. 250215 and tax declaration of the Manahans from Engr. Mariano Flotildes. As to the Barques
Exh. 1, he denied having a hand in securing said document but admitted he was with Teresita B. Hernandez when it was
handed to her. Mrs. Hernandez presented a document to Mrs. Teresita J. Reyes for authentication, but he did not see the
latter sign the certification because he was at the ground floor of the LMB talking to a friend; the document was already
signed when it was handed to Mrs. Hernandez. He also did not see Ignacio R. Almira sign the Certification dated June 8,
2009 (Exh. 2). When he was still in the Bureau of Lands from 1961 to 1972, he was holding the position of Computer II in-
charge of the verification of cadastral survey returns; he was not then involved in the actual survey of lots because he was
a Civil Engineer and not a Geodetic Engineer. He admitted that he was not able to conduct an actual survey of Lots 823-A
and 823-B of the Piedad Estate.135

The Barques presented as witnesses in rebuttal Engr. Castor Viernes, Teresita Barque-Hernandez, Dante M. Villoria and
Engr. Mariano Flotildes.

Engr. Viernes declared that Mrs. Hernandez had told him that it appeared during her cross-examination in court that the
alleged Deed of Conveyance No. 4562 is spurious. A copy of said deed of conveyance (Exh. 44) was given to him by the
LMB sometime in March 1997 which he in turn submitted to Mr. Que. Mr. Que had asked him to verify Lot 823 because
Mrs. Teresita Barque Hernandez wanted to borrow money from him on the title of said lot. When asked why he did not
include Deed of Conveyance No. 4562 among the fourteen (14) documents he found pertaining to the property of Homer
L. Barque, Sr. despite his earlier testimony that he got a copy thereof from the LMB on March 14, 1997, Engr. Viernes
explained that the Deed of Conveyance was not among those he would be testifying and was not mentioned in the
previous affidavit that he had signed. When asked why Deed of Conveyance No. 4562 marked as Exh. 1 is dated January
25, 1938 while the Deed of Conveyance No. 4562 marked as Exh. 44 is dated May 4, 1937, he answered that he does not
know; neither was he aware that the name and address mentioned in the two (2) documents are also different (in Exh. 44
it is Emiliano T. Setosta who was resident of 2800 Santolan St., Sampaloc, while in Exh. 1 it stated that Jose Setosta who
was named therein was a resident of Bustillos, Sampaloc. Mrs. Hernandez was claiming the lot which she said is located
in Culiat, but based on the maps it is situated in Matandang Balara. If the name of the place where the property is located
is incorrect, the technical description should be corrected to conform to the lots actual location. 136

Teresita Barque-Hernandez testified that she did some research on the alleged practice among employees of the Bureau
of Lands of issuing fake documents and was dismayed to discover that Atty. Fe T. Tuanda, a high-ranking official of the
LMB, was suspended from the practice of law, and her credibility is in question after having been charged with violation of
B.P. Blg. 22. She described the practice of "saksak-bunot" wherein documents are inserted in the records of the LMB, and
people submit documents from their own personal file after which they would ask for certification or a certified copy
thereof. She admitted that Exh. 1 which was presented by her lawyer was a falsified document, and that she was fooled
by somebody from the Bureau. However, she was sure of the authenticity of Exh. 44,137 as it came from Mr. Que. When
confronted with Exh. 44 which stated that the price of Lot 823 was P2,850.45 but only 50% thereof was paid allegedly by
Emiliano Setosta, she lamented that she was not yet born at the time of the transaction January 25, 1938 and did not
know what really happened. She denied asking for re-authentication after the conduct of her cross-examination which
tended to show that her Exh. 1 was a forgery and after Teresita Reyes testified that the latters signatures thereon were
forged. She affirmed that she went to Mr. Que in the early part of 1997 to borrow money in order to redeem the property
covered by TCT No. 210177, which was mortgaged by her father to the sister of her lola in 1985. She received a total of
P2,000,000.00 from Mr. Que; thereafter, she went to another lender, Mr. Jesus Lim, from whom she secured a loan of the
same amount. She paid the loan to Mr. Lim with the proceeds of yet another loan from Mr. Cedric Lee.138

Dante M. Villoria, retired City Assessor of Quezon City, declared in his Judicial Affidavit that Lot 823 is located in
Barangay Matandang Balara, which has existed as a separate barangay from Barangay Culiat even before they were
transferred from Caloocan City to Quezon City in 1939.139 He testified that it is the technical description of the property
that determines its identity, regardless of the name of its location. He was shown Tax Declaration No. 06895 in the name
of the Barques (Exh. 123140-Manotoks) which contains a memo on the lower left hand portion which reads "this property
appear[s] to duplicate the property of Manotok Realty, Inc., declared under [Tax Declaration Number] D-067-02136 with
area of 342,945 sq.m./P.I. No. 21-4202", and was asked if that meant that the tax declaration in the name of Manotok
Realty Inc. existed before the tax declaration in favor of the Barques. Upon the objection of his counsel, the witness
vacillated and said he is not certain as he has to see first the tax declaration of the Manotoks to determine which came
ahead. However, he affirmed that if such memo is written on a tax declaration, it means that the information stated in the
memo was already available on the date of the tax declaration. As to the statement on the reverse side of Exh. 124 141-
Manotoks on the portion indicating the tax declaration cancelled there is an entry "new" ("undeclared"), witness explained
that it means that there was no tax declaration for the same property in the name of the Barques prior to the said tax
declaration. He then clarified by saying that while there is an existing tax declaration, they still issued another tax
declaration because the documents presented as basis therefor were legal and binding. He admitted that their office will
issue several tax declarations covering the same property even with the knowledge that the tax declaration can be used
as evidence for ownership because the main concern is to collect more taxes. 142

Engr. Mariano Flotildes declared in his Judicial Affidavit that Rosendo Manahan engaged his services in 1998 and gave
him a relocation plan, photocopy of TCT No. 250215 in the name of Felicitas Manahan, field notes cover of the survey
returns, complete lot survey data, traverse computation and azimuth computation. After signing the relocation plan in
March 1998, Mr. Manahan submitted the Relocation Survey and the related documents to DENR-NCR, Surveys Division.
Thereafter, Relocation Survey Number Rel-00-000822 was issued in favor of Felicitas Manahan.143 He testified that he
was commissioned by Rosendo Manahan sometime in 1998 to conduct a relocation survey of a property owned by his
wife, Felicitas Manahan, covered by TCT No. 250215. His findings coincided with the technical description of said title,
duly certified by the Register of Deeds of Quezon City, which was shown to him together with the full print survey returns,
tax declaration, field notes cover (Exh. 45144, plot data computation, traverse computation (Exh. 47145 and azimuth
computation (Exh. 48146 and the plan itself. However, the relocation plan for the Manahans was not approved by the
Bureau of Lands. It was Rosendo Manahan who gave him a copy of TCT No. 250215 (Exh. 34), from which was derived
the information found in the plot data of Lot No. 823 (Exh. 46147; these were not based on documents from the Bureau of
Lands.148

Other documentary evidence formally offered by the Barques are the following: Exh. 8 "Certified copy of Logbook
Entries of Destroyed and Salvaged Documents" in the fire which razed the office of the Register of Deeds of Quezon City
on June 11, 1988;149 Exh. 9 "Certified Copy of the Bureau of Lands Computer Printout of the List of Locator Cards by
Box Number as of February 4, 1982" to prove that Fls-3168-D has been duly entered in the microfilm records of the
Bureau of Lands and assigned with Accession No. 410436 appearing on page 79, Preliminary Report No. 1, List of
Locator Cards by Box Number, as of February 4, 1984, copy of EDP Listing certified by Teresita J. Reyes, OIC, LMB-
RMD;150 Exh. 11 Certified Xerox Copy of the Tax Map of Quezon City dated April 21, 1998 issued by the Tax Mapping
Division, City Assessors Office, Quezon City to prove the veracity of the subdivision of Lot No. 823 Piedad Estate into
Lots No. 823-A and 823-B;151 Exh. 13 Certification dated 27 September 1996 issued by the Register of Deeds of
Quezon City attesting that "based on the List of Salvaged Titles prepared by the Land Registration Authority, TCT No.
210177 was not included as among those saved from the fire of June 11, 1988"; 152 Exh. 15 Acknowledgment Receipt
dated September 24, 1975 issued by Emiliano Setosta, confirming the payment given to him by Homer L. Barque, Sr. in
the amount of P350,000.00 for the purchase of Lots 823-A and 823-B, located in Matandang Balara, Quezon City;153 Exh.
16 Certification dated August 13, 1997 issued by the Regional Trial Court (RTC) of Manila stating that an instrument
entitled "Deed of Absolute Sale" between Emiliano P. Setosta (vendor) and Homer L. Barque, Sr. (vendee) was notarized
by Atty. Eliseo Razon on September 24, 1975 and entered in his Notarial Register, under Doc. 416, Page No. 85, Book
No. VIII, Series of 1975;154 Exh. 18 Certified True Copy of the Owners Duplicate Copy of TCT No. 210177 in the name
of Homer L. Barque, Sr.;155 Exhs. 19 to 19-H - Tax Declaration Nos. 06893 (1996) and 06892 (1987) in the name of
Homer L. Barque, Sr. m/to Matilde Reyes and Real Property Tax Bills/Receipts;156 Exh. 20 - Certification issued by Nestor
D. Karim, Kagawad/Official-On-Duty of Bgy. Culiat, Area XII, District II, Quezon City, attesting that there is no Payong
Street or place in the barangay;157 Exh. 21 - Letter dated April 14, 1998 from Dante M. Villoria, Assistant City Assessor of
Quezon City addressed to the Law Division, LRA affirming that "[a]s per our record, there is no Barrio Payong in Quezon
City";158 Exh. 22 - Certification dated August 10, 2007 issued by the City Assessor, Quezon City stating that "there is no
Barangay or Barrio Payong in Quezon City as per office record";159 Exhs. 23 to 23-L - Barangay Profile of Matandang
Balara, District III, Area 15 as of May 2000 (NSO) issued by the Office of the City Mayor, Quezon City, which shows that
Bgy. Matandang Balara was created on May 10, 1962 pursuant to Ordinance No. 5068 and describes the barangays
boundaries, and thus prove that TCT No. RT-22481 (372302) in the name of Severino Manotok IV, et al. and Sales
Certificate No. 511 in the name of Felicitas Manahan are fake and spurious; 160 Exh. 25 Certification dated July 19, 2007
issued by Rainier D. Balbuena, OIC of LMB-RMD stating that according to their records, there is no available record of a
Deed of Sale No. 1054 allegedly in the name of M. Teodoro and/or Severino Manotok covering the property situated in
Piedad Estate, Caloocan, Rizal;161 Exh. 32 - Letter dated March 12, 2003 from Atty. Crizaldy M. Barcelo, Assistant
Regional Executive Director for Technical Services, DENR-NCR stating that they have no record on file of Sale Certificate
No. 511 in the name of Valentin Manahan and Sale Certificate No. 1054 in the name of Modesto Zacarias, Regina
Geronimo and Felicisimo Villanueva covering Lot 823 of the Piedad Estate;162 Exh. 33 Copy of Sale
Certificate/Assignment of Sale Certificate No. 511 in the name of Valentin Manahan (assignor) and Hilaria de Guzman
(assignee), with same date as Sale Certificate No. 511 - June 24, 1939 showing the "Department of the Interior, Bureau of
Lands" when in fact the Department of the Interior was abolished pursuant to Act No. 2666 on November 18, 1916 and its
transfer and functions were transferred to the Department of Agriculture and Natural Resources (DANR), and in 1932
another reorganization act was passed providing, among others, for renaming of the DANR to Department of Agriculture
and Commerce (DAC);163 Exh. 33-A - Deed of Conveyance in the name of Felicitas Manahan, married to Rosendo
Manahan purportedly issued on December 3, 2000 by the Director of Lands, Office of the Secretary, DANR despite the
fact that said department was renamed Department of Environment and Natural Resources (DENR) pursuant to Executive
Order No. 192 issued on June 10, 1987;164 Exh. 37 Certified true copy of the Property Identification Map of Barangay
Matandang Balara issued by the City Assessor of Quezon City to prove that the records of the Bureau of Lands conform
to and confirm the metes and bounds contained in the full technical description of Lot 823, Piedad Estate embodied in
TCT No. 13900 in the name of Emiliano Setosta and TCT No. 210177 in the name of Homer L. Barque, Sr., and which
also shows Lots 823-A and 823-B subdivided lots;165 Exh. 38 - Certification dated May 12, 1998 issued by Ernesto S.
Erive, Chief, Surveys Division, DENR-NCR for the Regional Technical Director, with approval recommended by Veronica
S. Ardina Remolar, Chief, Technical Records and Statistics Section, stating that "plan Psu-32606, as surveyed for the
Payatas Estate IMP Co., situated in Montalban and San Mateo, Rizal, with an area of 36,512.952 sq.m. and originally
approved on Jan. 12, 1923 is among those existing reconstructed records on file in the Technical Records and Statistics
Section of this Office", to prove that the Payatas Estate could have been claimed by the Manotoks as a boundary of Lot
823, Piedad Estate since Payatas Estate was created only on June 12, 1923;166 Exh. 42 - Certification dated August 24,
2007 issued by Gregorio Faraon of the RTC of Manila stating that the document entitled "Deed of Absolute Sale"
executed between Emiliano P. Setosta (vendor) and Homer L. Barque, Sr. (vendee) exists in the notarial files and was
among the documents notarized, reported and submitted by Atty. Eliseo A. Razon, in his notarial book for the month of
September 1975, under Doc. No. 416, Page No. 85, Book No. VII, series of 1975; 167 Exh. 43 - Certification dated March
14, 1997 issued by Amando Bangayan stating that "the only available record on file in this Office is the Deed of
Conveyance/Sales Certificate issued to Emiliano Setosta covering Lot No. 823, Piedad Estate, Caloocan, Rizal" 168 with
attached copy of Deed of Conveyance No. 4562 dated January 25, 1938 (Exh. 44); Exh. 49 Certification dated
November 23, 2009 issued by Atty. Ma. Cristina B. Layusa, Deputy Clerk of Court & Bar Confidant, Supreme Court,
stating that "Atty. Fe T. Tuanda has been suspended from the practice of law as imposed in a Decision of the Court of
Appeals dated 17 October 1988 in CA-G.R. Cr # 05093;169 and Exh. 51 Certified Microfilm Copy of the Articles of
Incorporation of Manotok Realty, Inc. issued by the Securities and Exchange Commission (SEC) showing its date of
incorporation as of September 11, 1950, which was after the issuance of TCT No. 13900 in the name of said corporation
on August 31, 1950.170

Exhibits 1 (certified copy of Deed of Conveyance Record No. 4562 with Sale Certificate No. V-321 in the name of
Emiliano Setosta, and 2 (Certification dated June 8, 2009 issued by Ignacio R. Almira, Chief, Regional Surveys Division,
DENR), marked during the pre-trial were not formally offered by the Barques.

C. Manahans

Rosendo Manahan declared in his Judicial Affidavit that Lot 823 of the Piedad Estate belongs to his wife by virtue of Deed
of Conveyance No. V-2000-22 dated October 30, 2000 issued to her by the LMB. However, his wife has no certificate of
title because the LRA Administrator declared that her deed of conveyance is non-registrable at this time because there
are two (2) other claimants to the lot - Severino Manotok IV, et al. and the Heirs of Homer L. Barque, Sr. Thus, his wife
filed a petition for mandamus with the CA to compel the LRA to allow the registration of Deed of Conveyance No. V-2000-
22 and issuance of the corresponding title in the name of Felicitas Manahan. However, the CA denied the petition, and
they filed a petition for review with the Supreme Court where the case is still pending. He had assisted his wife in working
for the issuance of a certificate of title and did a lot of record searching. The Manotoks have no valid claim over Lot 823 as
their documents have been found to be spurious and not authentic by the NBI and LMB. As to the Barques who claimed
that their plan has accession number, the witness asserted that Accession No. 410436 is in the name of Nicolas Apo, et
al. as shown in Exh. XXXII.171Moreover, the technical description of the lot being claimed by the Barques when verified
and plotted by DENR-NCR, LRA and private surveyor Jose R. Baricua, is outside Quezon City and 5.8 kilometers away
from Lot 823 as shown in Exhs. XXVIII, XXIX, XXX and XXXI.172

Rosendo Manahan testified that the documents relied upon by the Manotoks were submitted for verification by the LMB to
the NBI and found to be fake and spurious. A very thorough search of documents covering Lot 823 by the LMB and DENR
yielded only documents in the name of the Manahans but no genuine document in the name of the Manotoks. The claim
of the Barques that they own Lot 823 is likewise false considering that the files of the LMB and DENR do not have Sale
Certificate No. V-321 and Deed of Conveyance No. 4562. The technical description of the lot claimed by the Barques,
when plotted by the private prosecutor Jose Baricua and the DENR-NCR as well as LRA, showed that it is outside
Quezon City and 5.8 kilometers away from Lot 823 of the Piedad Estate (Exhs. XXVIII, XXIX, XXX and XXXI 173. The Deed
of Conveyance No. 29204 of the Manotoks had no signature of the Secretary of Agriculture and Commerce, and he had
not seen any copy thereof in the records of the LMB.174

On cross-examination, Rosendo Manahan testified that his father Lucio Manahan and mother Hilaria de Guzman were
born in Malolos, Bulacan; he was also born and lived there almost his life. In 1945 or 1946 when he was about seven (7)
years old, his grandfather Valentin Manahan brought him to Lot 823. His grandfather died in 1948, his grandmother died
later at the age of 93. His wife Felicitas bought Lot 823 for P350,000.00 because his other siblings had no money to buy
the property. He met Evelyn Celzo when he accompanied his wife to the regional Office; they had no intervention in the
preparation of her report. He cannot recall if Evelyn Celzo asked his wife about Valentin Manahans application and
assignment of Lot 823, nor of the death of Lucio Manahan, Felicitas told Celzo that Hilaria de Guzman went to the
property but she was denied entry by heavily armed men. When he was about eight (8) years old, his father would take
him from Malolos to Quezon City to see Lot 823, and his parents took over Lot 823 when his grandparents Valentin
Manahan and Placida Figueroa after 1939 went back to Malolos, specifically Barrio Pulilan. 175

Rosendo Manahan asserted that Sale Certificate No. 511 (Exh. XXXVII 176 was issued as early as 1913; he had verified its
existence in the records of the LMB. However, he had sent letters - the last being in 1998 - asking for a certification, to no
avail; despite a thorough search for the document in the LMB and DENR, it could not be found. He did not think of
obtaining copy of the document from the National Archives because as far as his laymans understanding, the main
purpose of the National Archives is to keep and preserve documents of historical and cultural value. Sometime in 1974,
he obtained a xerox copy of Sale Certificate No. 511 from his mother in Malolos and furnished the LMB with a copy
thereof as reference. When he verified with the LMB in 1997, he actually saw an assignment of sale certificate, not the
sale certificate itself. He had knowledge of the tax declarations that his wife filed for Lot 823 in 1997. The tax declarations
submitted by the Barques caught them by surprise; these were not the same as those filed by his wife but he did not
bother about it as they were spurious. He and his wife secured tax declarations in 1997 upon the advice of people who
were helping them pursue their case with the LMB. His wife secured a special plan, not a relocation plan but he could not
recall who prepared it.177

On redirect examination, the witness declared that he is claiming Lot 823, Piedad Estate, as described in the technical
description, regardless of what the place it is located is called. Based on his study, Culiat was just a part of Matandang
Balara before it was split into several barangays. He denied having filed a reconstitution proceeding; it was the Manotoks
who filed for administrative reconstitution of their alleged title. When she read the report of Evelyn dela Rosa Celzo, he
noticed in the penultimate paragraph stating "Documentary evidence hereto attached: [1] Sale Certificate No. 511", and so
he tried to get a copy from the LMB but they could not show him any sale certificate, what they showed him was an
assignment of sale certificate. He also tried to ask a copy of Fls-3164 but they only showed him the index card. When he
learned about the 2nd Indorsement dated March 26 from Mamerto L. Infante, Regional Technical Director, Land Sector of
DENR-NCR (Exh. XIV178, stating that a photocopy of the sale certificate was transmitted to the LMB, he was able to get a
photocopy of Sale Certificate No. 511 and also Index card of Fls-3164. He discovered later that there was no more
original or certified copy of Sale Certificate No. 511 with the LMB. As to TCT No. 250215 in the name of Felicitas
Manahan, married to Rosendo Manahan, Tax Declaration of Real Property No. D-138-07070, and tax Bill Receipt No.
183999 which were secured by the Barques, the witness denied having anything to do with those documents. 179

Felicitas B. Manahan declared in her Judicial Affidavit that her grandfather-in-law Valentin Manahan occupied and
cultivated Lot 823, and had it surveyed on November 16, 1938. On December 13, 1939, survey plan Fls-3164 prepared in
his name was approved by the Director of Lands. Valentin Manahans application to purchase Lot 823 was approved and
after paying in full the purchase price of P2,140.00, he was issued Sale Certificate No. 511. Valentin Manahan assigned
his rights over Lot 823 to his daughter-in-law Hilaria de Guzman, wife of his son Lucio Manahan and mother of her
husband Rosendo Manahan (Exh. III180. With the aid of caretakers, Hilaria de Guzman and Lucio Manahan occupied Lot
823. However, in the middle of 1950s, a group of armed men ousted Hilaria de Guzmans caretaker on the lot. To protect
her rights, Hilaria de Guzman declared the property for taxation purposes under TD No. 17624 effective 1959 and TD No.
1751 effective 1965. On August 23, 1974, Hilaria de Guzman sold her rights to Lot 823 in her favor, under Deed of
Absolute Sale (Exh. X) believing that she could take effective measures in recovering the property. She then paid the real
property tax and after making follow-up with the LMB and Malacaang thru then First Lady Imelda Marcos and LRA, Deed
of Conveyance No. V-200022 was issued in her name by the LMB on October 30, 2000 (Exh. IV 181. Deed of Conveyance
No. V-200022 was forwarded to the Register of Deeds of Quezon City for registration and issuance of the corresponding
title (Exh. XX182, letter of the LMB Director to the Register of Deeds of Quezon City), but in a "Consulta," the LRA
Administrator declared that it is not registerable because of the existence of the titles of the Manotoks and the Barques.
Hence, she filed a petition for mandamus, docketed as CA-G.R. SP No. 99177, to compel the LRA to allow the
registration of Deed of Conveyance No. V-200022. However, the CA denied her petition, prompting her to file a petition for
review with the Supreme Court (G.R. No. 184748) where the case is pending for decision. The documents on which the
Manotoks base their claim is "false and untrue" because after conducting a "chemistry test" on those documents
submitted by the LMB, the NBI concluded that they were not old as they purport to be (Exh. XXV 183. The LMB, as
repository of all records of all friar lands, conducted a thorough search of its files for documents covering Lot 823, but it
found only documents issued to the Manahans and no genuine document covering Lot 823 in the name of Severino
Manotok or his alleged predecessors-in-interest. The DENR likewise conducted an investigation confirming the findings of
the LMB embodied in its report (Exh. XVI184 that the documents of the Manotoks were spurious. The lot being claimed by
the Barques, on the other hand, based on their technical description, as plotted by private surveyor Jose Baricua and the
DENR-NCR as well as LRA, is outside Quezon City and 5.8 kilometers away from Lot 823 of the Piedad Estate (Exhs.
XXVIII, XXIX, XXX and XXXI).185

Felicitas Manahan identified the following documents in court: (a) Letter dated July 10, 2009 of Teresita J. Reyes stating
that "Deed of Conveyance No. V-4562 was issued on June 28, 1955 in favor of PAULINO DIGALBAL covering a parcel of
land situated in Naic, Cavite identified as Lot No. 1540-N, Naic Friar Land Estate containing an area of 1.1396 hectares,
and that the same was transmitted to the Register of Deeds of Cavite on July 13, 1955" and that further verification
disclosed that "this Office has no record/copy of the alleged Deed of Conveyance No. 4562 (Sale Certificate No. V-321)
purportedly issued in the name of EMILIANO SETOSTA supposedly covering a parcel of land identified as Lot No. 823,
Piedad Friar Land Estate, situated in Quezon City" (Exh. XXXVIII186; (b) Letter dated August 27, 2009 of Atty. Fe T.
Tuanda, OIC Chief, LMB-RMD stating that "this Office has no record of the alleged Deed of Conveyance No. 29204
purportedly issued on December 7, 1932 supposedly covering a parcel of land situated in Caloocan, Rizal, now Quezon
City, identified as Lot No. 823, Piedad Friar Lands Estate (Exh. XXXIX 187; and (c) xerox copy of Sale Certificate No. 511
dated June 24, 1913 (Exh. XXXVII188 which was given to her by her mother-in-law when the latter signed the deed of sale.
The witness explained that they did not attach a copy of Sale Certificate No. 511 because the CA ordered that only
certified copies are to be attached to the pre-trial brief, and also said that she tried to secure a certified copy of Sale
Certificate No. 511 but the LMB and DENR could not give her the same.189

On cross-examination, Felicitas Manahan testified that her mother-in-law was living in Malolos, Bulacan but occupied Lot
823 in 1939 by hiring caretakers to till the land. After the assignment of Lot 823 from Valentin Manahan to Hilaria de
Guzman, her father-in-law Lucio Manahan frequently visited Lot 823 to oversee the caretakers. Since 1976, she and her
husband resided in Manila where they rented a house. In 1974, Hilaria de Guzman told her she wanted to sell Lot 823 and
after Hilaria had signed the deed of sale and was paid in cash P350,000.00, she obtained from Hilaria the sale certificate,
assignment of sale certificate and a sketch plan. However, when she visited the land in 1981, she was told by an elderly
man not to return and aspire to recover the land because it belonged to Imee Manotok. When she went there in 1979, the
property was not fenced and it seemed to her there were no occupants. She met Evelyn dela Rosa in March 1979 and
again in the year 2000 at the DENR. Evelyn dela Rosa asked questions about the property and her grandfatherin-law
Valentin Manahan. Despite having seen Lot 823 vacant in 1979, 1981 and in 1989, she and her husband continued to live
in Levytown. She had seen the original copy of Sale Certificate No. 511 mentioned in the 1st Indorsement dated February
23, 1999 of Mamerto L. Infante, Regional Technical Director of DENR-NCRs Lands Sector (Exh. XIII190. She gave the
owners duplicate copy of Sale Certificate No. 511 which she got from Hilaria to DENR-NCR Director Pelayo in March
1989 without asking for a receipt. Director Pelayo, however, lost it. The witness clarified that the original copy of Sale
Certificate No. 511 mentioned in Exh. XIII refers to the assignment of sale certificate. When Atty. Rogelio Mandar
accompanied her for a site inspection of Lot 823 in 1997 or 1998, she saw men with firearms. On that occasion, she
tagged along Policeman Fernandez from Paraaque as bodyguard because she knew of the presence of armed men in
the property. However, she did not report the matter to the Quezon City Police.191

Atty. Roseller S. de la Pea, former Undersecretary for Legal Affairs of DENR and now Dean of the College of Law of
Polytechnic University of the Philippines, declared in his Judicial Affidavit that in June 2000, he received a query from
LMB Director Ernesto D. Adobo, Jr. on whether a deed of conveyance for Lot 823 of the Piedad Estate may be issued to
Felicitas B. Manahan by virtue of Sale Certificate No. 511 issued to Valentin Manahan. In response to this query, he
issued a Memorandum dated July 6, 2000 (Exh. XVII192 recommending the issuance of a deed of conveyance to Felicitas
Manahan, as per verification with the LMB and the DENR-NCR, except for the subsisting records of Sale Certificate No.
511 in the name of Valentin Manahan, there is no record in said offices to show that the Manotoks filed an application for
the property; there was no such sale certificate issued in the name of the Manotoks. Sale Certificate No. V-321 and Deed
of Conveyance No. 4562 are also not found in the records of the LMB and DENR. He affirmed the comments and
recommendations contained in Exh. XVII. In accordance with his recommendation, the LMB issued to Felicitas B.
Manahan Deed of Conveyance No. V-200022 on October 30, 2000. The signing of deed of conveyance had been
delegated effective 1997 to the Director of the LMB by means of General Memorandum Order No. 1, Series of 1997
issued by the DENR Secretary. A bona fide settler can acquire a friar land only through conveyance by the LMB which is
the agency authorized under Act 1120 to administer and dispose friar lands. 193

Atty. Rogelio Mandar, Chief of the Claims and Conflicts Section, Legal Division, LMB, declared that he, together with Atty.
Manuel B. Tacorda, Assistant Chief, Legal Division of LMB, were authorized by the LMB Director under Special Order No.
98-135 dated December 18, 1998 to conduct an investigation regarding Lot 823 of the Piedad Estate. It appears that on
November 25, 1998, Felicitas Manahan filed a petition with the OSG for the cancellation/reversion proceedings against
TCT No. RT-22481 (372302) issued in the name of Severino Manotok IV, et al., which was referred by the OSG to the
LMB for investigation and/or appropriate action. Thus, they collated all the pertinent available records and referred these
to the NBI on April 21, 1999 for determination of the age of the documents; they also scheduled an ocular inspection of
the land on July 15, 1999 and set the petition for hearing on December 13, 1999. The documents sent to the NBI were the
following: (1) Sale Certificate No. 1054 in the name of Regina Geronimo, Modesto Zacarias and Felicisimo Villanueva
(Exh. 10-Manotoks); (2) Assignment of Sale Certificate No. 1054 dated March 11, 1919 (Exh. 11-Manotoks); (3)
Assignment of Sale Certificate No. 1054 dated June 7, 1920 (Exh. 12-Manotoks); (4) Assignment of Sale Certificate No.
1054 dated May 4, 1923 (Exh. 13-Manotoks); (5) Sale Certificate No. 651 in the name of Ambrosio Berones; (6)
Assignment of Sale Certificate No. 651 dated April 19, 1930 in favor of Andres Berones who is the alleged predecessor-
in-interest of Severino Manotok; and (7) Assignment of Sale Certificate No. 511 dated June 24, 1939 in the name of
Valentin Manahan, the predecessor-in-interest of Felicitas Manahan (Exh. III-Manahans). The NBI submitted its Chemistry
Report No. C-99-152 (Exh. XXV-Manahans) dated June 10, 1999 stating that the first six documents "could not be as old
as it [sic] purports to be", while the seventh document, the Assignment of Sale Certificate No. 511 dated June 24, 1939
showed "natural aging and discoloration of paper; it also exhibited a "water mark" which is distinct under transmitted light;
the adhesive tapes were attached along creases and tears, and the paper did not exhibit the characteristics which were
observed on the questioned documents.194

Atty. Mandar further declared that they were not able to conduct the ocular inspection of Lot 823 because armed men
prevented them. There was a hearing held wherein the Manahans and the Manotoks agreed to submit the case for
resolution on the basis of memoranda with supporting documents. Thus, a written report was submitted to the Legal
Division Chief Atty. Alberto R. Recalde which served as the basis of the latters Memorandum dated April 17, 2000 (Exh.
XVI195, who held that TCT No. RT-22481 (372302) has no legal and factual basis, and therefore void ab initio; that records
pertaining to Sale Certificate No. 511 in the name of Valentin Manahan Assignment of Sale Certificate No. 511 dated
June 24, 1939 had been authenticated by both the report of investigation of Land Investigator Evelyn dela Rosa and NBI
Chemistry Report No. C-99-152; and that Sale Certificate No. 651 in the name of Ambrosio Berones is unauthenticated.
Their recommendation that steps be taken in the proper court for the cancellation of the Manotoks title was approved by
the LMB Director and sent to the DENR. LMB OIC-Director Ernesto D. Adobo, Jr. then issued an Order dated October 16,
2000 (Exh. XVIII196which was forwarded to the Office of the Register of Deeds of Quezon City on December 13, 2000 for
registration and issuance of corresponding title.197

Evelyn G. Celzo, nee Evelyn C. dela Rosa, Land Investigator/Geodetic Engineer of DENR-NCR declared that she
conducted an investigation of Lot 823, Piedad Estate, pursuant to Travel Order dated May 15, 1989 issued by North
CENRO, Quezon City. She conducted an ocular inspection of the land and interviewed witnesses. She prepared a written
Investigation Report dated July 5, 1989 (Exh. XV198. She confirmed the truth of her findings contained in said report. She
made a very thorough search of the records of LMB Central Office but found no sale certificate covering Lot 823 other
than that issued to Valentin Manahan. Lot 823 is covered by Fls-3164 in the name of Valentin Manahan. She categorically
stated that there was no Sale Certificate No. 1054, Deed of Conveyance (Sale Certificate No. V-321) in the name of
Emiliano Setosta and Fls-3168-D in the name of Emiliano Setosta existing in the records of the LMB Central Office. 199

On cross-examination, Evelyn Celzo testified that she is not acquainted with Hilaria de Guzman but she knew her to be
one (1) of the heirs of Lot 823, a property she owned and given by Valentin Manahan. During her investigation, she met
and talked to Rosendo and Felicitas Manahan in her office. Mrs. Manahan did not supply all the information contained in
her report. The information that Lot 823 was an agricultural land when Valentin Manahan took possession thereof as a
farmer in 1908 came from the people she personally interviewed in the adjoining lots; she did not record the names of the
persons she interviewed. However, she had no more notes of the interview she conducted. She had not referred the
results of her interview nor the statements in her report to Felicitas. She admitted that she did not see the application for
the purchase of the land stated in her report nor the Sale Certificate issued to Valentin Manahan; she also could not recall
the name of the record officer whom she asked about the application of Valentin Manahan. After the assignment of the
sale certificate, Hilaria de Guzman and her husband Lucio Manahan were not able to enter Lot 823 because they were
prevented by some people. Neighbors told her that Hilaria only visited the land. There was an old man in his 60s, whose
name she cannot remember, told her that Lucio and Hilaria lived in Malolos, Bulacan. As to the requirements of an
investigation report, these are provided in the Surveying Manual. She maintained that if one (1) already has a sale
certificate given by the government, no other individual can claim that property. A report from the field to determine the
location of the land is required for the issuance of a deed of conveyance. As to Valentin Manahans survey plan, Fls-3164,
it was approved on December 13, 1939, after which he applied for the purchase of Lot 823. After paying the sum of
P2,140.00, Valentin Manahan was issued a sale certificate. She did not conduct another survey of Lot 823 because she is
an investigator. Lot 823 was not fenced in 1989; she in fact walked around the property consisting of about thirty four (34)
hectares. She cannot anymore remember the number of persons she had interviewed. She pointed out that the technical
description appearing in TCT No. 250215 dated May 25, 1979 (Exh. 34-Barques) in the name of Felicitas Manahan
married to Rosendo Manahan, is different from the technical description of Lot 823 appearing on Manahans Exhibit
VII200 (Technical Descriptions of Lot 823). In their conversation, Felicitas Manahan never told her that she had a transfer
certificate of title over Lot 823 as early as 1979.201

On redirect examination, Evelyn Celzo corrected a typographical error in the last paragraph of her report, in which the
word "no" should be inserted between the words "since" and "deed" to read: "In this regard, since no deed of conveyance
has been issued to the above applicant, it is hereby recommended that appropriate action be issued." She also identified
her signature and the signature of Engr. Ludivina Aromin appearing on the sketch plan (Exh. XL 202 showing that the land
claimed by the Barques is 5639.59 meters from the lot claimed by the Manahans based on the tie line; the tie line of Lot
823 of the Manahans is only 4,097.40, while the tie line of the Barques is 9,736.60.203

When confronted with the discrepancy in her computation based on the tie lines of Lot 823-A and Lot 823-B appearing on
the technical description on TCT No. 210177, Evelyn Celzo said that they have copies of titles in their office and she could
not make a decision whether it is the same title being shown to her by counsel (Atty. Carao, Jr.). Responding to
clarificatory questions from the court, Evelyn Celzo admitted that she was not able to obtain information as to whether
there are other claimants over Lot 823 aside from the Manahans and her investigation report was based on her ocular
inspection of Lot 823 and research at the LMB. From her research in the LMB, she was not able to obtain information on
whether or not there are other claimants of Lot 823 of the Piedad Estate.204

Teresita J. Reyes, who retired on July 14, 2009, was formerly OIC-Assistant Chief, RMD, LMB declared in her Judicial
Affidavit that Exh. 1 of the Barques is not in the records of the LMB and that no Deed of Conveyance No. V-4562 and Sale
Certificate No. V-321 issued to Emiliano Setosta mentioned in Exh. 1 is on file in the records of the LMB. These
documents were instead issued to Paulino Bagalbal covering a parcel of land with an area of 1.1396 hectares, identified
as Lot No. 1540-N of the Naic Friar Land Estate, located at Naic, Cavite, and forwarded to the Office of the Register of
Deeds of Naic, Cavite, for registration and issuance of title. Her signature on the document (Deed of Conveyance No.
4562 in the name of Emiliano Setosta covering Lot 823) is a forgery. She identified her signature on the letter dated July
10, 2009 (Exh. XXXVIII205 addressed to Felicitas Manahan and confirmed the truth of its contents. 206

On cross-examination, Teresita Reyes testified that a party requesting for a certified true copy of the records in the LMB
had to file a written request which will be forwarded to the unit concerned and then to the Division. With respect to the
records pertaining to friar lands, the sales registry books were decentralized to the regional offices of the bureau pursuant
to Executive Order No. 292 issued in 1987. She did not know for sure what records were decentralized because she was
assigned to the RMD only in 1997. She had been requested to authenticate or certify copies of records of Lot 823, Piedad
Estate. However, she categorically denied that the signatures appearing on the certifications/authentications of
documents presented by the Barques (Exhs. 9, 10 and 25207, were her signature. The signature appearing in her affidavit
is her genuine signature. The sales registry books in the regional office are copies of appropriate pages of the sales
registry books in the main RMD. It is a very big and heavy book and is turned over to the regional offices. The RMD-LMB
has an inventory of deeded books or lots subject of deeds of conveyance. As for sales registry book, they no longer have
it at the RMD. Sales registry books contain the names of the claimants, the respective lot numbers and area, but the sale
certificate itself would still be with the RMD in the file folders of particular lot number. Lot 823 of the Piedad Estate had
several folders in the RMD. They also have a logbook listing the lots. If there is already a deed of conveyance, the records
would be in a folder. These deeds of conveyance are not bound separately but are inside the folder of the particular lot
number.208

Atty. Romeo C. Dela Cruz, counsel for the Manahans, testified in court and identified the letter dated July 4, 2009 (Exh.
XXXV209 of Ignacio R. Almira Jr. addressed to him informing that the signatures appearing in Exh. 2 (Certification dated
June 8, 2009 attesting that Deed of Conveyance record No. 4562 and Sale Certificate No. V-321 covering Lot 823 in the
name of Emiliano Setosta has available record in this office) and Exh. 30 (Certification dated April 13, 2009 attesting that
Sale Certificate No. 511 in favor of Valentin Manahan (assignor) and Hilaria de Guzman (assignee) had no available
record in this office) of the Barques are not his signatures.210

Aida R. Viloria-Magsipoc, NBI Forensic Chemist III, testified that the documents examined were submitted to the Forensic
Chemistry Division from the LMB by Evelyn Celzo and the requesting party was Atty. Manuel Tacorda, Assistant Chief,
Legal Division, LMB. She explained her findings in Chemistry Report No. C-99-152 (Exh. XXV211on the following specimen
documents: (1) Sale Certificate No. 1054 in the name of Regina Geronimo, Modesto Zacarias and Felicisimo Villanueva
(Exh. XXV-A, front212 and Exh. XXV-B,213 back); (2) Assignment of Sale Certificate No. 1054 dated March 11, 1919 (Exh.
XXV-F,214 front and Exh. XXV-G,215 back); (3) Assignment of Sale Certificate No. 1054 dated June 7, 1920 (Exh. XXV-
J,216 front and Exh. XXV-K,217 back); (4) Assignment of Sale Certificate No. 1054 dated May 4, 1923 (Exh. XXV-N,218 front
and Exh. XXV-O,219 back); (5) Sale Certificate No. 651 in the name of Ambrosio Berones (Exh. XXV-R,220 front and Exh.
XXV-S,221 back); and (6) Assignment of Sale Certificate No. 651 dated April 19, 1930 (Exh. XXV-T,222 front and Exh. XXV-
U,223 back). The seventh document (Assignment of Sale Certificate No. 511 dated June 24, 1939) was used as the
standard (Exh. XXV-V,224 front and Exh. XXV-W,225 back).226
Explaining the word "examinations" in her report, the witness said that first, they did an ocular examination. Visualization
includes photography, viewing the documents under direct light, under UV light, under infrared (IR) light using the
stereoscope; and then chemical examinations to determine the kind of paper or reaction of the paper, and the reaction of
the ink strokes that are on the questioned documents. A stereoscope enables one (1) to view the whole sheet of paper by
just tilting the mouse (macro viewing), whereas for the microscope, you could view just a very small portion. After
examination over UV, IR and direct light examinations, chemical examination is done on a paper wherein punch holes are
taken from the pieces or sides of the document. Only these physical and chemical examinations were done on the
questioned documents.227

The following photographs taken of the questioned documents were also presented: Exh. XXV-C,228 the front close-up of
the tear on top of the page of Sale Certificate No. 1054; Exh. XXV-D,229 front close-up of uneven browning and
discoloration of paper (Sale Certificate No. 1054); Exh. XXV-E,230 front page browning and discoloration of tears and
creases along the edges of document (Sale Certificate No. 1054); Exh. XXV-F,231 front of the Assignment of Sale
Certificate No. 1054 dated March 11, 1919; Exh. XXV-G,232 back portion of Assignment of Sale Certificate dated March
11, 1919; Exh. XXV-H233, showing the staple wire marks that are clear and firm (Assignment of Sale Certificate No. 1054
dated March 11, 1919); Exh. XXV-I,234 showing the aniline (violet) stamp pad ink entries that are clear and distinct
(Assignment of Sale Certificate No. 1054 dated March 11, 1919); Exh. XXV-L,235 showing the aniline (violet) stamp pad ink
entries that are clear and distinct with handwritten entries and signatures in blue, blue-black, black ballpoint pen ink and
sign pen ink (Assignment of Sale Certificate No. 1054 dated June 7, 1920); Exh. XXV-M,236 showing the aniline (violet)
stamp pad ink entries that are clear and distinct with handwritten entries and signatures in black ballpoint pen ink, sign
pen ink (Assignment of Sale Certificate No. 1054 dated June 7, 1920); Exh. XXV-P,237 showing the adhesive tape used to
hold tears or cuts, uneven brown discoloration (Assignment of Sale Certificate No. 1054 dated May 4, 1923); Exh. XXV-
Q,238showing the sharply cut line along letter/s and a distinct scratch/tear along the loop of the signature (Assignment of
Sale Certificate No. 1054 dated May 4, 1923); Exh. XXV-X,239 showing close-up portions of Assignment of Sale Certificate
No. 511 dated June 24, 1939; Exh. XXV-Y,240 standard brown even discoloration of Assignment of Sale Certificate No.
511 dated June 24, 1939; Exh. XXV-Z,241 standard brown even discoloration of Assignment of Sale Certificate No. 511
dated June 24, 1939; Exh. XXV-AA,242 water mark on Assignment of Sale Certificate No. 511 dated June 24, 1939; and
Exh. XXV-BB,243 water mark on Assignment of Sale Certificate No. 511 dated June 24, 1939.

On the particular findings in her report,244 the witness testified that "printed entries on all the documents showed
similarities but differ in font size." The font size would indicate if there were insertions or corrections that have been made
on the typewritten entries on the document. Next, the typescript entries are clear/distinct/uniform especially on specimens
5 (Sale Certificate No. 651 dated January 8, 1913) and 6 (Assignment of Sale Certificate No. 651 dated April 19, 1930),
which indicates that both documents could have been done at the same time. Finding No. 3 states that "Folds on
specimens 1 to 4 are irregular and inconsistent while on specimen 5 and 6 folds across show whiteness in color indicating
that they are recent." The irregular folds on the first four (4) documents would indicate that these documents could not be
that old. Finding No. 5 states that "Adhesive tapes used to hold tear/s or cut/s are placed on areas even without apparent
tear but only a fold or a crease", from which it can be concluded that the tape was just placed over to show that the
document is old, even if it is not so. Finding No. 6 refers to "punch holes and staple wire marks are clean and firm which
could be attributed to its being recent," which are found in Exhs. XXV-C, XXV-H, XXV-U, XXV-T, XXV-S and XXV-R. If the
documents were bound by staple wires, they could have aged and there should already be iron residue that adhered to
the paper. On Finding No. 7, it states that "Aniline (violet) stamp pad ink entries are clear/distinct with handwritten entries
in Blue/ Blue-Black BALLPOINT PEN INK and SIGN PEN INK. Age of BALLPOINT PEN INK could not be determined."
The witness pointed out that ball point pen inks were commercially manufactured after World War II, around 1945. In
1919, 1920, 1923 and 1930, there were no ball point pens yet at the time. This fact indicates the documents could have
been executed after 1945. Finding No. 8 states that "The notarial dry seal of the notary public is clear and firm on
specimen 2, 5 and 6," which pertains to Assignment of Sale Certificate No. 1054 dated March 11, 1919, Sale Certificate
No. 651 in the name of Ambrosio Berones and Assignment of Sale Certificate No. 651. Under Finding No. 9, it was
observed that "[T]he browning and discoloration of the documents are uneven and whitening are very prominent even on
its sides/areas which are supposedly exposed during storage." This is notably shown on the close-up photo of Exh. XXV-
C wherein the edge, the uppermost edge of the document is very very white and clear, and even on the tear that was
allegedly torn because of age, it is even clearer than in the inner portion of the document. Uneven discoloration from the
edges to the center of the document would indicate that they are not as old as they purport to be; hence they are
spurious. Finding No. 10 refers to specimen 2 (Assignment of Sale Certificate No. 1054 dated March 11, 1919) and
specimen 3 (Assignment of Sale Certificate No. 1054 dated June 7, 1920) "A signature of an assignor/assignee on
specimen number 2 showed a sharply cut line along the letter/s and distinct scratch/tear appear along the loop of the
signature of one (1) witness on specimen 3 with an adhesive attached to make it firm." The witness noted there are cuts
along the line of the ink entries of the signature (Exhs. XXV-I, XXV-J), which are mechanical in nature; a sharp instrument
was used to cut a portion of the ink in the signature, to make an impression that the document has aged already. Finding
No. 11 states that "[I]nsect bites/tears are superficial in nature especially on specimen 5 (Sale Certificate No. 651 in the
name of Ambrosio Berones) and 6 (Assignment of Sale Certificate No. 651 dated April 19, 1930). The witness explained
that as paper ages, even in storages, its edges would have insects or mites, insect bites or cuts; in this case, those
appear to have been artificially placed on the edges. Finally, on Finding No. 12, it was noted that "[A]ttached/adhering torn
sheet/s at the center/topmost portion/back of specimen 2 and on the upper left hand corner of specimen 3 are lighter in
color than the document itself." Again, an indication that the documents are not as old as they purport to be and therefore
spurious.245

In contrast, the standard document (Assignment of Sale Certificate No. 511 dated June 24, 1939) was found to have
"showed natural aging and discoloration of paper"; it also exhibited a "water mark which is distinct under transmitted light";
"the adhesive tapes were attached along creases and tears"; and "the paper did not exhibit the characteristics which were
observed on the questioned documents." The witness thus concluded that Exh. XXV-V and XXV-W is authentic and as old
as the date indicated therein. The witness denied having been influenced by anybody in arriving at these findings. 246

On cross-examination, Ms. Viloria-Magsipoc admitted that while she had attended a training course for questioned
documents, she has not done any work under the Questioned Documents Division. This case was assigned to her by the
Chief of the Forensic Chemistry Division and it took her about thirty (30) working days to finish the work. Regarding
handwritten entries in ballpoint pen ink, she had read an article in the New Encyclopedia Britannica stating that ballpoint
pens came in the late 19th century, and that commercial models appeared in 1895. There is no known method in
chemistry to determine the age of ballpen writing. Paper chromatography and thin layer chromatography methods were
used only in determining whether the ink was ballpen ink, fountain pen, sign pen and other ink entries. The LMB chose
specimen No. 7 (Assignment of Sale Certificate No. 511 dated June 24, 1939) as the reference standard, while
specimens 1 to 6 are the questioned documents. She did a comparative analysis of papers and went to the National
Library to look at documents which are 5 to 10 years prior to a particular date and 5 to 10 years after said date. 247

The witness declared that when she went to the National Archives, she did not see a copy of the following documents:
Sale Certificate No. 1054; Assignment of Sale Certificate No. 1054 dated March 11, 1919; Assignment of Sale Certificate
No. 1054 dated June 7, 1920; Assignment of Sale Certificate No. 1054 dated May 4, 1923; Sale Certificate No. 651 in the
name of Ambrosio Berones; and Assignment of Sale Certificate No. 651 dated April 19, 1930. Chromatologic analysis was
used in this case to determine whether the entries in the questioned documents were written in ballpoint pen ink. She
opined that it was possible that tears and creases along the edges of the subject documents are mechanical in nature. As
to punch holes and staple wires, these are used to determine the characteristic of paper so that if the marks and holes are
clean and clear, they were made recently, regardless of whether the paper is old or new. The marks of staple wire or
puncher on a recent document are different from those on an old document. A recently stapled or punched paper has a
"very, very firm" impression while an old document would have some tear or a reaction of the mechanical impression, or
the hair fiber would be flaky already because of the brittleness of the paper. However, the preservation of paper may be
affected by storage conditions and a very old paper can be well-preserved, such that even if created in 1911, it could
survive without any insect bites. As to the quality of the impression made by dry seals, it depends on the quality of the
seals, the force exerted on the seal lever when the seal is being pressed on paper, and the quality of the paper itself. The
discoloration of documents is caused by the reaction of paper to air, as well as to dust and exposure to strong light. It is
possible that the torn portions of the document, which were lighter in color than the document itself, were separated or
folded in such a way that they were less exposed than the rest of the documents before they were re-attached. Specimen
No. 7 does not bear any stamp mark of the LMB-RMD.248

On redirect examination, Ms. Viloria-Magsipoc pointed out that ball point pens were commercially used in the Philippines
in 1953; sign pens came later in the early 60s. She had used paper and thin layer chromatography of the questioned
documents in determining the ink entries. Ink strokes are taken from the handwritten entries and they are spotted on a
chromatographic plate both in paper and thin layer of silica gel. It is allowed to be diluted to a solvent system and the
results would be a chromatogram that would indicate what dyes or what kind of ink is on the ink stroke that is being
analyzed. After the chemical examination, she found that the handwritten entries in the questioned documents were all in
ballpoint pen ink and sign pen ink. Ballpoint pens and sign pens were not yet commercially used at the time the
documents were supposedly executed. She affirmed the findings contained in her Chemistry Report No. C-99-152 (Exh.
XXV) and also her conclusion that the questioned documents were not as old as they purport to be. No water marks were
found on the documents presented by the Manotoks which she had examined.249

Responding to clarificatory questions from the court, the witness declared that water marks on documents would indicate
the possible manufacturing date of the paper. Water mark that is on the manufacturer of the paper is different from the
water mark being placed on those government paper for official use only. In determining the possible age of the paper,
she had used both physical and chemical examination. Because of their characteristics, she was able to conclude that the
questioned documents are of recent paper and they could not have possibly been executed on the dates indicated. As to
carbon dating, the witness declared that the NBI does not have carbon dating. Recent document means 10 years or less.
As to type of paper, she said that bond paper was used in the questioned documents; she does not know the exact date
when bond paper was introduced in the Philippines.250
As sur-rebuttal evidence, the Manahans presented the affidavit/deposition of Rosendo Manahan, Atty. Richie Q. Caranto,
Jacinto Ramos de Guzman and Felix S. Javier.

Rosendo Manahan in his Judicial Affidavit dated January 5, 2010, declared that the statement made by Milagros
Manotok-Dormido in her Rebuttal Judicial Affidavit that Valentin Manahan could not have caused the survey of Lot 823 in
1938 and executed the Deed of Assignment of Sale Certificate No. 511 in favor of Hilaria de Guzman on June 24, 1939
because Valentin Manahan died on September 21, 1931 is not correct. He asserted that Valentin Manahan died on
February 5, 1955 as shown by the Certification dated December 11, 2009 issued by the Office of the Civil Registrar of
Malolos City, Bulacan (Exh. XLIV251. On the certificates of death submitted by Milagros Manotok-Dormido, he explained
that the Valentin Manahan mentioned in those documents is not the same Valentin Manahan who was his grandfather,
but just a namesake. His grandfather Valentin Manahan was born on May 21, 1890 whose parents were Luis Manahan
and Rita Giron. These facts are shown by the certified Partida de Bautismo issued by Rev. Fr. Arsenio C. Reyes, Parish
Priest of the Barasoain Parish dated June 24, 1949 (Exh. XLV).252 Valentin Manahans residence at the time he died was
Bulihan, Malolos, Bulacan. He was married to Placida Figueroa as shown by the certified Partida de Bautismo of his son
Lucio Manahan issued on November 5, 1945 by the Parish Priest of the Iglesia Catolica Apostolica Romana in Barasoain,
Malolos, Bulacan (Exh. XLVI253. The Valentin Manahan subject of the Certificates of Death (Exhs. 61 and 102) was
married to Francisca Lucas and was residing at Guinhawa, Malolos, Bulacan at the time of his death as shown in
Manotoks Exhs. 61/102.254

Rosendo Manahan said that he tried to get a certificate of death from the Parish of Our Lady of Mt. Carmel but half-page
of pages 147 and 148, Book IV of their Liber Defunctorum in which the death of his grandfather is supposedly
entered/recorded, were torn off and missing after Milagros Manotok-Dormido borrowed it. This was the information
relayed to him by the custodian of the parish records, Felix Javier. Felix Javier told him he was surprised when Milagros,
who borrowed the book as she wanted to photocopy some pages thereof, returned it with the half of pages 147 and 148
already missing. The missing pages cover deaths during the period January 26 to February 16, 1955, as evident in the
remaining half-pages 147 and 148 (Exhs. XLVII, XLVII-A and XLVII-B255. He also went to the Roman Catholic Cemetery of
Malolos City to look at the tombstone (lapida) of his grandfather Valentin Manahan and see the date of his death inscribed
thereon. However, the tombstone was freshly vandalized; the date of his death and middle initial of his wife Placida
Figueroa Manahan were chiselled off, which he had photographed (Exhs. XLII and XLIII 256. It was Milagros Manotok-
Dormido and her brother who went to Felix Javier, the parish records custodian, and Emilio V. Pangindian, Jr. the
sepulturero of the Roman Catholic Cemetery of Malolos City and inquired about the tomb of the Manahan family. Emilio V.
Pangindian, Jr. executed an Affidavit (Exh. XLVIII257 in support of this fact. As to the certificate of death (Exhs. 108 and
109) showing that he died on July 30, 1963 at age 20, he declared that it was a mistake since it was his brother Clodualdo
de Guzman who died on July 30, 1963 at age 20 but his uncle, Jacinto de Guzman, erred in reporting the matter to the
Local Civil Registrar as shown by his Affidavit (Exh. XLIX258. To prove that he is still alive, he submitted copies of his
Philippine passport issued to him on December 12, 2006 (Exh. L259, US Visa issued to him on February 20, 2007 (Exh.
LI260, BIR Tax Identification Card (Exh. LII261, Drivers License issued by the Land Transportation Office to expire on March
1, 2011 (Exh. LIII262, and Firearm License Card issued on April 2, 2009 by the PNP Firearm Explosives Unit (Exh.
LIV263.264

Rosendo Manahan further declared that the claim of Milagros Manotok-Dormido that she was able to obtain a copy of
Sale Certificate No. 1054 from the LMB is contradicted by the testimonies of former DENR Undersecretary Roseller dela
Pea, Evelyn dela Rosa Celzo and Atty. Fe T. Tuanda. As to Deed of Conveyance No. 4562 (Exh. 44-Barques), it is a
spurious document like Deed of Conveyance No. 4562 marked as Exh. 1 in the Barques Pre-Trial Brief, for the simple
reason that the documents have the same number but different dates and varying details issued by the Bureau of Lands
for the same lot and in favor of the same party (Emiliano Setosta). Upon verification with LMB, said office replied to her
wife that they do not have Exh. 44 on their files and that Deed of Conveyance No. 4562 was issued to Paulino Bigalbal on
June 28, 1955 covering a 1.1396-hectare land identified as Lot No. 1540-N of the Naic Friar Land Estate (Exhs. LV and
LVI265. He denied having commissioned Engr. Mariano V. Flotildes (rebuttal witness of the Barques) to conduct a
relocation survey for him and his wife. Contrary to the assertions of Milagros Manotok-Dormido, his wife has not secured a
tax declaration and title over Lot 823 nor filed a petition for reconstitution of title. 266

Jacinto Ramos de Guzman identified Rosendo Manahan as his nephew during the taking of deposition and his Judicial
Affidavit dated December 14, 2009 wherein he declared that Hilaria de Guzman who is now deceased, is his sister and
the wife of Lucio Manahan who is also now deceased. His sister is not married to Jose Cruz. Rosendo Manahan who is
still alive is the son of his sister Hilaria de Guzman and Lucio Manahan. The children of his sister other than Maria are,
namely: Clodualdo, Flaviana and Leonarda (all deceased). Rosendo Manahan is married to Felicitas B. Manahan. He
explained the mistake in the Certificate of Death (Exh 56- Manotoks) saying he was dizzy for lack of sleep attending to the
wake of Clodualdo and he was confused about the names of his nephews that he committed an honest mistake in
reporting that Rosendo de Guzman died on July 30, 1963 instead of Clodualdo. 267 On cross-examination, he said that
Clodualdo had been ill for more or less one (1) year (tuberculosis) and he took care of him before his death. Clodualdo
was buried the following day after his death.268

Atty. Richie Q. Caranto, in his Judicial Affidavit declared that at about 2:15 in the afternoon of December 10, 2009, he
stepped out of the hearing room to call their office messenger. A few minutes later, Atty. Roberto San Juan, counsel of the
Manotoks, came out and the latter did not notice him because his view was blocked by the Court Security. He then
overheard Atty. San Juan who called a person whose name sounded like "Din." Atty. San Juan and the person he called
talked about documents; Atty. San Juan told "Din" that the findings should be that the writings in the documents were
written in fountain pen ink and not ballpoint pen ink. Atty. San Juan told "Din" not to make a categorical statement in the
report but just state therein that ballpoint pen was already existing for commercial use as early as 1895. When Atty. San
Juan saw him, he noticed that he toned down his voice and told "Din" to state his findings and recommendations in the
report. He was five (5) meters away from Atty. San Juan during the incident and thereafter, he went inside the hearing
room and relayed what he heard to Solicitor Omar Diaz who was sitting in the last row near the door. 269

Felix S. Javier, undersecretary of Parish of Our Lady of Mt. Carmel residing at Barasoain Church, Malolos, Bulacan,
identified Milagros Manotok-Dormido during the taking of the deposition. He also identified two (2) pictures shown to him
by Mr. Manahan taken of the tombstone that was vandalized (Exhs. XLII and XLIII). He admitted that he has no
knowledge as to whether it is the same Valentin who died in 1931; that is recorded in the books of the parish. 270

Other documents formally offered by the Manahans are the following: Exh. I Certified copy of the Petition dated
November 25, 1998 for the cancellation of Manotoks TCT No. RT-22481 (372302) filed by Felicitas B. Manahan with the
OSG;271 Exh. II Certified photocopy of the letter dated December 3, 1998 of Cecilio O. Estoesta, Assistant Solicitor
General, to the Director of LMB referring the petition filed by Felicitas Manahan for investigation, report and
recommendation;272 Exh. V - Letter dated January 21, 2005 of Concordia D. Zuiga, Director, LMB to LRA Deputy
Administrator Ofelia E. Abueg-Sta. Maria attesting to the authenticity of Deed of Conveyance No. V-200022 covering Lot
823 issued in favor of Felicitas Manahan on October 30, 2000, and further stating that "[t]he subject deed of conveyance
does not contain the signature of then DENR Secretary Antonio Cerilles, because during the incumbency of Director
Ernesto Adobo, Jr., the Director of Lands was the one (1) approving the issuance of deed of conveyance over friar lands
pursuant to General Memorandum Order No. 1, series of 1977"; 273 Exh. IX Certified photocopy of the original of Real
Property Tax Bill Receipt No. G-No. 712650 issued to Felicitas Manahan in 1989 by the Office of the Treasurer of Quezon
City for payment of property tax covering Lot 823 for the year 1990-1991;274 Exh. XII Certified photocopy of letter-reply
dated November 16, 1998 of Director Manuel D. Gerochi, LMB, to Felicitas Manahan stating that per verification of their
records, Lot 823 of Piedad Estate is not available in their file but which verification "must not be construed as a
confirmation that the said lot is still vacant or open for disposition/sale to any person as title thereto might have already
been obtained" and further advising that "a verification be made to the DENR-CENR Office and to the Register of Deeds
concerned to avoid any confusion as to the present status of the said lot"; 275 Exh. XIII Certified copy of 1st Indorsement
dated February 23, 1999 from Mamerto L. Infante, Regional Technical Director, Lands Sector, DENR-NCR forwarding to
the LMB Director "the only available records in our office of Lot 823, Fls-3164, Piedad Estate";276 Exh. XIV Certified
photocopy of the 2nd Indorsement dated March 26, 1999 from Mamerto L. Infante, Regional Technical Director, Lands
Sector, DENR-NCR to the Director of LMB transmitting additional documents in connection with the investigation by Engr.
Evelyn Celzo of Lot 823, Piedad Estate;277Exh. XX Certified photocopy of the letter dated December 13, 2000 of Ernesto
D. Adobo, Jr., OIC-Director, LMB to the Register of Deeds of Quezon City, forwarding Deed of Conveyance No. V-200022
in the name of Felicitas Manahan for registration and issuance of certificate of title to Felicitas Manahan covering Lot 823
of Piedad Estate;278 Exh. XXII Certified true copy of truncated TCT No. 22813 issued by the Register of Deeds, Province
of Rizal with notation "Cancelled See TCT No. 634";279 Exh. XXIII Certified true copy of TCT No. 634 dated September
17, 1946 which is offered to prove that TCT No. 634 is in the name of Enrique Miguel, married to Rosario Tech and covers
a land in Pasig with an area of 428 square meters280; Exh. XXIV - Original of Certification dated January 10, 2000 issued
by Atty. Roberto B. Salcedo, Deputy Register of Deeds of Rizal stating that "after a thorough verification from the files of
this office, it appears that the document/s leading to the issuance of TCT No. 22813, Book T-92 (Pre-War Title) can no
longer be found from the files of this office as of this date";281 Exh. XXX photocopy of 1st Indorsement dated August 23,
2006 of Marco A. Castro, Acting Chief, LRA Land Projection Section referring to the Chief, Legal Division, LRA, Deed of
Conveyance No. V-200022 of Felicitas Manahan and TCT No. 210177, and stating that the deed of conveyance is
covered by Consulta No. 2282, and that "when said Deed of Conveyance was plotted in our Municipal Index Map thru its
tie line, was found to be previously plotted under TCT No. 372302, while TCT No. 210177 when plotted thru its tie line
falls outside Quezon City";282 Exh. XXXII - photocopy of the Bureau of Lands transmittal of Survey Records
(decentralizing of records) showing that Accession No. 410436 which the Barques claimed as the accession number of
their Fls-3168-D is in the name of Nicolas Apo, et al.;283 Exh. XXXIII Original of the letter dated October 3, 2005 of
DENR-NCR OIC Regional Technical Director, Land Management Services informing that copy of approved Fls-3168-D is
not on file in the Technical Records Section, Land Management Services, DENR-NCR, and what is on file is only a
photocopy of Plan Fls-3168-D covering Lot 823 of the Piedad Estate which is not a duly certified one (1);284 Exh. XXXV
Letter dated July 4, 2009 of Ignacio R. Almira, Jr., Chief, Regional Surveys Division stating that the Certifications dated
June 8, 2009 and April 13, 2009 stating that DENR-NCR has available record of Deed of Conveyance Record No. 4562
and Sale Certificate No. V-321 and no available record of Sale Certificate No. 511 in the name of Valentin Manahan
(assignor) and Hilaria de Guzman (assignee) were not issued by the LMB and the signatures appearing thereon are not
the signatures of Ignacio R. Almira, Jr.;285 Exh. XXXVI Letter dated June 22, 2009 of Engr. Fernando R. Verbo, OIC-
Chief, Geodetic Survey Division, LMB, to Atty. Manuel Abrogar, stating that Fls-3168-D is not listed in the EDP
listing;286 and Exh. XXXVII - Photocopy of Sale Certificate No. 511 dated June 24, 1913 offered as secondary evidence to
prove that Valentin Manahan was issued Sale Certificate No. 511 covering Lot 823 of the Piedad Estate on June 24,
1913.287

CA Findings

Examining the entire evidence on record, the CA found that none of the parties were able to prove a valid alienation of Lot
823 of Piedad Estate from the government in accordance with the provisions of Act No. 1120 otherwise known as the
"Friar Lands Act". Notably lacking in the deed of conveyance of the Manotoks is the approval of the Secretary of
Agriculture and Commerce as required by Section 18 of the said law. Upon close scrutiny, the factual allegations and
voluminous documentary exhibits relating to the purchase of Lot 823 by the predecessors-in-interest of the claimants
revealed badges of fraud and irregularity.

Manotoks Claim

In our Resolution promulgated on December 18, 2008, the Court already made initial observations when we re-evaluated
the points raised against the Manotok title and found these to be serious enough, thus:

...The apparent flaws in the Manotoks claim are considerable and disturbing enough. The Court, as the ultimate citadel of
justice and legitimacy, is a guardian of the integrity of the land registration system of the Philippines. We will be derelict in
our duty if we remain silent on the apparent defects of the Manotok title, reflective as they are of a scourge this Court is
dedicated to eliminate.

Many of these flaws have especially emerged through the petition-for-intervention of Felicitas and Rosendo Manahan,
whom we have allowed to intervene in these cases. The Manahans had filed a petition with the OSG seeking that it initiate
cancellation/reversion proceedings against the Manotok title. That petition was referred by the OSG to the LMB of the
DENR, which duly investigated the claim of the Manahans. The Chief of the Legal Division of the LMB recommended that
the appropriate proceedings be taken in the proper court for the cancellation of the Manotok title, through a Memorandum
dated 17 April 2000.

Around the same time, the LMB referred to the DENR Undersecretary for Legal Affairs Roseller S. dela Pea a query on
whether a deed of conveyance could be issued to Felicitas Manahan. The DENR Undersecretary, in answering that query
through a Memorandum dated 6 July 2000, pointed out that the titles of the Manotoks could not have been derived from
OCT No. 614, the mother title of Lot 823 of the Piedad Estate. The chain of transfers leading from OCT No. 614 to the
Manotok title was a TCT No. 22813, purportedly issued by the Office of the Register of Deeds for the Province of Rizal.
The copy of said TCT No. 22813 submitted to the Court is truncated in the upper half, to the point that it is not visually
discernible what year the same was issued. More crucially, a certification was issued by the Register of Deeds of Rizal
dated 7 January 2000 stating thus:

"After a thorough verification from the files of this Office, it appears that the documents leading to the issuance of TCT No.
22813, Blk. T-92 cannot be found from the files of this Office."

These findings were twice verified with due diligence and reconfirmed by the DENR, according to Undersecretary Dela
Pea.

The DENR also requested the assistance of the National Bureau of Investigation (NBI) in conducting the said
investigation. The NBI examined various sales certificates and assignment of sales certificates in the names of the
purported predecessors-in-interest of the Manotoks Regina Geronimo, Modesto Zacarias, and Felicisimo Villanueva
certificates that were all dated prior to 1930. In its Chemistry Report No. C-99-152 dated 10 June 1999, the Forensic
Chemistry Division of the NBI concluded that the said documents "could not be as old as it (sic) purports to be."

xxxx

Also on record is an Investigation Report on Lot No. 823 of the Piedad Estate dated 5 July 1989, authored by Evelyn C.
dela Rosa, Land Investigator of the Community Environment and Natural Resources Office (CENRO), NCR-North Sector
and addressed to the CENRO Officer, North CENRO. It was narrated therein that Lot No. 823 had actually been in the
possession of a Valentin Manahan beginning in 1908. In 1939, Valentin Manahan applied for the purchase of the land,
and he was issued Sales Certificate No. 511. The Investigation Report stated:

"Records show that the Sale Certificate No. 511 covering Lot 823, Piedad Estate, was issued to Valentin Manahan as
purchaser and transferred to Hilaria de Guzman Manahan as (Assignee) and sold to Felicitas Manahan by way of Deed of
Absolute Sale dated August 23, 1974. Based on my research at the Land Management Bureau (LMB), Central Office, it
appears that original claimant of lot 823 was Valentin Manahan."

All told, these apparent problems with the Manotoks claim dissuade us from being simply content in reflexively dismissing
the administrative petition for reconstitution filed by the Barques. Indeed, we have to take further action.288

But since the Court recognized there was yet no sufficient evidence to warrant the annulment of the Manotok title, the
case had to be remanded to the CA for further reception of evidence for the Manotoks, as well as the Barques and
Manahans, to prove a valid acquisition from the Government of Lot No. 823.

Evaluating the documentary and testimonial evidence adduced by the Manotoks, the CA concluded that they still failed to
establish a valid claim over Lot 823. It cited the finding of the NBI Forensic Chemistry Division that the result of the
chemical analysis of the documents of Assignment of Sale Certificate No. 1054 dated March 11, 1919, June 7, 1920, May
4, 1923 and April 19, 1930 executed by the original claimants of Lot 823 in favor of Severino Manotok showed they were
not really as old as they purport to be considering that (1) the handwritten entries were found to be made in ballpoint pen
and sign pen inks, which were not yet commercially available in the Philippines until 1953 and 1965; and (2) the physical
signs in the paper itself such as the uneven discoloration, artificial tears on the edges to make the document appear much
older, and other tell-tale marks on the punch and staple wire holes. To contradict the findings of NBI Chemist Magsipoc,
the Manotoks presented Dr. Sorra of the PNP Crime Laboratory who testified that she examined the questioned
documents of the Manotoks and found them to be genuine and authentic. The CA, however, found Dr. Sorras opinion of
less probative value as it was based merely on the physical appearance of the questioned documents, and she did not
subject these to chemical analysis or other more reliable procedures.289

The most fatal defect stressed by the CA in its Commissioners Report is the lack of signature of the Chief of the Bureau
of Public Lands (now Director of Lands) on Sale Certificate No. 1054 and approval by the Secretary of Interior/Agriculture
and Commerce on the Manotoks Sale Certificate No. 1054 and Deed of Conveyance No. 29204, as required under Act
No. 1120. For being null and void ab initio, Sale Certificate No. 1054 cannot thus be the source of any legal right over Lot
823 and no valid transfer or assignment could have been made by the original claimants in favor of Severino Manotok.
The CA found that the Manotoks documentary evidence even showed a discrepancy since the Assignment of Sale
Certificate No. 1054 marked as Exhs. 11, 12 and 13 showed a signature at the dorsal portion above the printed words
"Director of Lands", but such signature is absent in the supposedly certified true copies obtained from the National
Archives (Supplemental offer of Rebuttal Evidence, Exhs. 142, 143 and 144). 290 As to Manotoks longtime possession
evidenced by tax declarations, tax receipts and buildings constructed on the land as early as 1933, the CA considered
these immaterial, the property being friar land which forms part of the States patrimonial property.

Barques Claim

With the admission made by Teresita Barque-Hernandez that their Exh. 1291 (certified true copy of Deed of Conveyance
Record No. 4562 with Sale Certificate No. V-321) is a fake and spurious document, no legal right was acquired over Lot
823 by their predecessor-in-interest Emiliano Setosta who allegedly sold the lot to her father, Homer L. Barque. The CA
noted that on its face, this document dated May 6, 1937 is spurious considering that while its heading indicated "Republic
of the Philippines Department of Agriculture and Commerce" and the consideration for the conveyance in Japanese war
notes, it is of judicial notice that the Republic of the Philippines was established only on July 4, 1946, and the identified
owner of Piedad Estate should be "Gobierno de las Islas Filipinas" as stated in OCT No. 614. Moreover, Teresita J.
Reyes, whose name appears in Exh. 1 as the officer who certified and verified the documents in the records of the LMB,
denied that the signature appearing above her printed name was her signature.292

The Barques themselves realized their mistake in presenting Exh.1 and so they submitted another document, a
photocopy of Deed of Conveyance No. 4562 dated January 25, 1938 (Exh. 44) with accompanying Certification dated 14
March 1997 (Exh. 43) of Amando V. Bangayan, Chief, LMB-RMD stating that the only available record on file with their
office is the said Deed of Conveyance No. 4562 issued to Emiliano Setosta covering Lot 823 of Piedad Estate, Caloocan,
Rizal.293 The CA, however, gave scant weight to the aforesaid documents, particularly as the Deed of Conveyance No.
4562 lacks the approval of the Secretary of Agriculture and Commerce, thus:
...The veracity of the certification is seriously contradicted by the reply letter of Atty. Fe Tuanda (Exhibit LVI, Manahans) to
the letter of Felicitas B. Manahan (Exhibit LV, Manahans). In her reply, Atty. Fe Tuanda, OIC, Records Management
Division, LMB categorically declared that "xxx please be informed that according to our verification, this Office has no
record/copy of the alleged Deed of Conveyance No. 4562 purportedly issued in the name of EMILIANO P. SETOSTA
supposedly covering a parcel of land identified as Lot No. 823, Piedad Estate, Quezon City." Atty. Fe Tuanda further
declared that "(F)urther verification of our records shows that the Deed of Conveyance No. V-4562 was issued on June
28, 1955 in favor of PAULINO BIGALBAL covering a parcel of land situated in Naic, Cavite identified as Lot No. 1540-N,
Naic Friar Land Estate containing an area of 1.1396 hectares, and the same was transmitted to the Register of Deeds of
Cavite on July 13, 1955." In his Judicial Affidavit dated July 17, 2009, former DENR Undersecretary Roseller de la Pea
declared that Deed of Conveyance Record No. 4562 and Sales Certificate No. V-321 are not in the records of the LMB
and DENR. Also, DENR-NCR Land Investigator Evelyn G. Celzo, declared in her Judicial Affidavit dated July 15, 2009,
that she made a thorough research in the files of the Central Office of the LMB but did not find Sales Certificate No. V-321
and a Deed of Conveyance in the name of Emiliano Setosta. With the foregoing evidence seriously controverting the
veracity of Exhibit 43, the BARQUES should have presented Amando Bangayan as a witness in Court to confirm the
veracity of her certification. The accuracy of the certification should be confirmed by Amando Bangayan on the witness
stand wherein the other parties would be given the opportunity to cross-examine him on the veracity of his certification.
Also, it must be pointed out that the attachment to Exhibit 43 marked and offered as Exhibit 44 is a mere photocopy of the
so-called "DEED No. 4562" which has no probative value. The Barques has not accounted for the original copy for them
to be allowed to present a photocopy as secondary evidence. Curiously, Exhibit 44 refers to a photocopy of "DEED NO.
4562" which also appeared as "Deed No. 4562" in the left upper portion of the spurious document pre-marked as Exhibit 1
for the Barques and offered as Exhibit XLI for the Manahans. At any rate, even if Exhibit 44 will be considered as a
secondary evidence, the same is null and void ab initio for the same lacks the approval of the Secretary of Agriculture and
Commerce as explicitly required by law.294 (Italics supplied.)

Aside from the absence of a valid deed of conveyance and/or sale certificate in the name of the Barques predecessor-in-
interest, Emiliano Setosta, the basis for the issuance of TCT No. 210177 in the name of Homer L. Barque is further put
seriously in doubt in view of the Barques failure to prove the existence of Subdivision Plan Fls-3168-D duly authenticated
by the Geodetic Surveys Division, LMB National Office. TCT No. 210177, purportedly a transfer from TCT No. 13900 295 --
which title until now the Barques said they could no longer find a copy despite diligent search -- is itself questionable,
considering that TCT No. 13900 was not issued in the name of Emiliano Setosta but Manotok Realty, Inc. 296 We recall that
the evidence of the Barques in support of their claim over Lot 823 was found by this Court to be "exceedingly weak", but
which nonetheless was erroneously accorded credence by the First Division in its December 12, 2005 Decision. We quote
from our Resolution dated December 18, 2008:

The Barque title, or TCT No. 210177, under which the Barques assert title to Lot 823 of the Piedad Estate, states that it
was transferred from TCT No. 13900. The Barques assert that they bought the subject property from a certain Setosta.
Thus, it could be deduced that TCT No. 13900 should have been registered under the name of Setosta. However, it was
not. TCT No. 13900 was registered under the name of Manotok Realty, Inc. This detracts from the Barques claim that the
Manotoks do not have title to the property, as in fact the Barque title was a transfer from a title registered under the name
of the Manotoks. The Barques have failed to explain the anomaly.

The Barques hinge their claim on a purported subdivision plan, FLS-3168-D, made in favor of Setosta. However, based
on the records, it appears that there is a conflict as to its actual existence in the files of the government. Revelatory is the
exchange of correspondence between the LMB and the LRA. The LMB did not have any copy of FLS-3168-D in the EDP
listing, nor did the LMB have a record of the plan. However, a microfilm copy of FLS-3168-D was on file in the Technical
Records and Statistical Section of the Department of Environment and Natural Resources National Capital Region
(DENR-NCR). The copy with the Technical Records and Statistical Section, which bore the stamp of the LMB, was denied
by the LMB as having emanated from its office.

Further, the letter dated 2 January 1997 from the LMB stated that the copy of FLS-3168-D as verified from its microfilm file
was the same as the copy sent by the Technical Records and Statistics Section of the National Capital Region Lands
Management Sector. The LMB, however, denied issuing such letter and stated that it was a forged document. To amplify
the forged nature of the document, the LMB sent a detailed explanation to prove that it did not come from its office. In a
letter to the administrator of the LRA, the hearing officer concluded that "it is evident that there is an attempt to mislead us
into favorable action by submitting forged documents, hence it is recommended that this case [be] referred to the PARAC
for investigation and filing of charges against perpetrators as envisioned by this office under your administration."

There are significant differences between the technical description of Lot 823 of the Piedad Estate as stated in FLS-3168-
D, the subdivision plan relied on by the Barques, and the technical description provided by the DENR.

xxxx
The Barques offered no credible explanation for the discrepancy... They also do not contradict the finding of the National
Archives that there is no copy in its files of the deed of sale allegedly executed between Setosta and Barque.

Lastly, in the 1st Indorsement issued by the Land Projection Section of the LRA dated 23 August 2006, that Section stated
that upon examination it was found out that the land as described in the Barque title "when plotted thru its tie line falls
outside Quezon City." This is material, since Lot 823 of the Piedad Estate is within the boundaries of Quezon City. A
similar finding was made by the Land Management Bureau (LMB). It attested that the line or directional azimuth of Lot No.
823 per the Barque title locates it at 5,889 meters away from point 1 of Lot No. 823 of the Piedad Estate.

These discrepancies highlight the error of the LRA and the Court of Appeals in acknowledging the right of the Barques to
seek reconstitution of their purported Barque title. Even assuming that the petition for reconstitution should not have been
dismissed due to the Manotok title, it is apparent that the Barques claim of ownership is exceedingly weak. 297

The Barques Exh. 6, Fls-3168-D dated June 21, 1940, contained a certification dated September 23, 1996 prepared by
Romy A. Felipe that it is allegedly "the Microfilm enlargement of Fls-3168-D" with the signatures of Privadi J.G. Dalire and
Carmelito Soriano.298 However, Engr. Dalire, who served as Chief of the Geodetic Surveys Division of the LMB, DENR
from 1988 to 1998, had earlier prepared a Report299 and also executed an Affidavit dated November 18, 2006300 setting
forth the exchange of correspondence with the LRA relative to Fls-3168-D, and attesting that after having scrutinized all
records while he was still Chief of the Geodetic Surveys Division, he found that no such Fls-3168-D exists. The pertinent
portions of Engr. Dalires affidavit stated:

xxxx

Sometime in October 1996, when I was still Chief of the Geodetic Surveys Division of the LMB, I received a letter
requesting a certified true copy of Subdivision Plan Fls-3168-D ("Fls-3168-D") in connection with the
examination/verification of a petition for administrative reconstitution of TCT No. 210177 allegedly registered in the name
of Homer L. Barque, Sr.

The letter came from Atty. Benjamin M. Bustos, who was then the Reconstituting Officer and Chief of the Reconstitution
Division of the Land Registration Authority ("LRA").

A copy of Atty. Bustoss October 29, 2006 letter is attached as Annex A.

2. In my reply, I informed Atty. Bustos that the LMB has no record of Fls-3168-D.

A copy of my November 7, 1996 reply-letter is attached as Annex B.

Atty. Bustos later wrote me again, seeking clarification as to why the Land Management Services, DENR-National Capital
Region ("LMS-DENR-NCR") apparently had a microfilm copy of Fls-3168-D while the LMB does not have a record of the
same.

Atty. Bustos letter (dated December 2, 1996) is attached as Annex C.

I then wrote the Regional Technical Director of the LMS-DENR-NCR , stating that the LMB had no record of Fls-3168-D
and requesting a copy of the alleged Fls-3168-D on file with the LMS-DENR-NCR for LMBs evaluation.

A copy of my letter (dated December 5, 1996) to the LMS-DENR-NCR is attached as Annex D.

3. LMS-DENR-NCR did not respond to my letter, Annex D, so I wrote them again on January 5, 1997 repeating my
request for a copy of their alleged Fls-3168-D.

A copy of the letter dated January 5, 1997 is attached as Annex E.

4. On January 31, 1997, I wrote the LRA Administrator stating that despite repeated requests, LMS-DENR-NCR had not
furnished the LMB a copy of Fls-3168-D which had been alleged to be in their files.

In the same letter, I advised the LRA Administrator that, based on the LMBs examination of the machine copy of Fls-
3168-D (which was attached to Atty. Bustos letter of December 2, 1996), "it is certain that the source of the copy [of Fls-
3168-D] is a spurious plan which may have been inserted in the file[s]." I also stated that "until this writing, NCR [referring
to LMS-DENR-NCR] has not sent to us the copy [of Fls-3168-D] for authentication as required by DENR Administrative
Order." I likewise confirmed that the copy of Fls-3168-D, which I received from Atty. Bustos, did not emanate from the
LMB for the following reasons:

"a. Our inventory of approved plans enrolled in our file, our Microfilm Computer list of plans available for decentralization
all show that we do not have this plan Fls-3168-D, logically we cannot issue any copy.

b. The copy of the plan Fls-3168-D shows visible signs that it is a spurious copy.

1) The certification (rubber stamp) serves a two piece stamp. The certification and the signing official are
separate. Ours is one-piece.

2) The alignment of: Lands, GEODETIC, this, Privadi, and Chief in the syndicates (sic) stamp differ from our
stamp. Chief, Geodetic Surveys Division is our stamp, their (sic) is Survey without the s plural.

3) We do not stamp the plan twice as the syndicate did on the copy.

4) The size of the lettering in the rubber stamp Not for Registration/Titling For Reference Only is smaller than our
stamp. It is also incomplete as an (sic) Stamp, in addition to the above is of ____________.

5) The copy bears forged initials of my section officer and myself. I sign completely certification.

6) The name of the claimant is very visible to have been tampered in the master copy.

7) Again, it is certified that this Bureau does not have copy of Fls-3168-D."

A copy of my letter dated January 31, 1997 is attached as Annex F.

5. On February 13, 1997, I received a letter from Atty. Bustos, requesting that I authenticate an enclosed letter dated
January 2, 1997, purporting to have been written by me to him.

The January 2, 1997 "letter" states that LMS-DENR-NCR has forwarded a copy of Fls-3168-D to the LMB and that this
copy is identical with that contained in the LMBs microfilm records.

Copies of Atty. Bustos letter dated January 28, 1997 and my alleged letter of January 2, 1997 are attached as Annexes G
and H, respectively.

I replied to Atty. Bustos, reiterating that Fls-3168-D does not exist in the files of LMB. I also stressed that the letter dated
January 2, 1997, which I allegedly wrote, is a forged document. I stated that LMS-DENR-NCR had not forwarded any
copy of Fls-3168-D to the LMB.

A copy of my letter (dated February 13, 1997) is attached as Annex I.

6. On February 19, 1997, I again wrote Atty. Bustos, reiterating that I did not prepare or issue the letter dated January 2,
1997. I also explained that the copy of Fls-3168-D, which was attached to Atty. Bustos December 2, 1996 letter, did not
emanate from the LMB for the following reasons:

"1) We have no copy of Fls-3168-D on file so how can we issue a copy of plan that is non-existing?

2) The copy of plan bears two Certifications at the top and at lower half. This is not our practice;

3) The rubber-stamp shows there are two pieces; one for the certification and another for the signing official. We
use one piece rubber stamp. The alignment of the letters/words of one rubber stamp is different from this marking
on this spurious plan;

4) The plan shows only initial. I sign in full copies of plans with the initials of my action officers and their codings
below my signature. These are not present in the spurious copy of plan;
 5) The letter size of the rubber stamp NOT FOR REGISTRATION/TITLING, FOR REFERENCE ONLY is smaller
than our rubber stamp;

6) The spurious copy of plan you furnished us does not carry our rubber stamp GOVERNMENT PROPERTY
NOT TO BE SOLD: FOR OFFICIAL USE ONLY OF ___________________ This is stamped on all microfilm
copies we issue because all microfilm copies are for official use only of our LMS. We have shown you our rubber
stamps to prove that the copy of Fls-3168-D in your possession is a spurious plan."

A copy of my February 19, 1997 letter to Atty. Bustos is attached as Annex J.

7. I hereby affirm under oath that I did not prepare, write, sign and/or send the January 2, 1997 letter to Atty.
Bustos. The signature appearing in that letter is not my signature. I also confirm that the LMB did not, and until
now does not, have any copy of Fls-3168-D, and that any representation purporting to produce a copy of it from
the LMB files is false.

8. The LMBs Geodetic Surveys Division is the depositary of vital records containing information on survey plans.
These records consist of, inter alia, (1) the Logbooks for Psu, Psd, Fls, and survey plans containing the survey
number, the location, the surveyor, the condition of all plans salvaged after World War II; (2) the Locator Card
prepared for each plan contained in the Logbooks (The Locator Card indicates the location of the land, the Survey
Number and the Accession Number. The Accession Number stamped on the Locator Card is also stamped on the
survey plan before microfilming so that authentic microfilm copies of plans should indicate an Accession Number);
(3) the Microfilms of microfilmed survey plans; and (4) the EDP Listing of plans which were salvaged, inventoried,
accession numbered and microfilmed (The EDP listing was made before the decentralization of the survey plans
to the various offices of the LMS. Hence, if a particular survey plan is not included in the EDP Listing, it simply
means that no such plan was decentralized/forwarded to the LMS.)

9. All these records, which I have thoroughly scrutinized while I was Chief of the Geodetic Surveys Division,
revealed that no such Fls-3168-D exists. The Logbook of Fls surveys, more specifically page 351 thereof
(attached as Annex K), shows that the portion for Fls-3168-D was left blank. This simply means no Fls-3168-D
was salvaged, inventoried and microfilmed by the LMB after World War II. Consequently, no such Fls-3168-D
could have been decentralized/forwarded by the LMB to LMS-DENR-NCR and therefore, it is impossible for LMS-
DENR-NCR to have a microfilmed copy thereof. Moreover, the deck of Locator Cards does not contain a Locator
Card pertaining to Fls-3168-D. Again, this shows that Fls-3168-D was not salvaged after World War II. It should
be emphasized that the Locator Card indicates the Accession Number for a particular survey plan so that without
the Locator Card, the roll of microfilm containing the survey plan cannot be located.

10. Previously, I prepared a report which discusses in greater detail why the LMB and the LMS-DENR-NCR did
not have, and until now could not have, any genuine microfilm copy or any other genuine copy of Fls-3168-D. A
copy of this report is attached as Annex L and forms an integral part of this affidavit. I hereby confirm the
truthfulness of the contents of the report.

x x x x301

As pointed out by Engr. Dalire, the forwarding of the copy of Fls-3168-D to their office for validation is mandatory under
DENR Administrative Order No. 49, series of 1991, and for the repeated failure of LMS-DENR-NCR to comply with the
request of Engr. Dalire to forward to the Geodetic Surveys Division their purported copy of Fls-3168-D, the inescapable
conclusion is that said plan is spurious and void.302

To cure this anomaly, the Barques presented before the CA another purported copy of Fls-3168-D containing an alleged
certification of more recent date (Exhs. 3 and 4303. But still, the CA found no probative value in their additional evidence,
further noting that the Barques, since their filing of a petition for administrative reconstitution on October 22, 1996, have
failed to submit an authenticated and validated copy of Fls-3168-D.

Also, in a desperate attempt to cure the absence of a certified true copy of Subdivision Plan Fls-3168-D validated by the
Chief of the Geodetic Surveys Division, the BARQUES offered as their Exhibits 3 and 4 an alleged copy of Subdivision
Plan Fls-3168-D covering Lot 823 of the Piedad Estate, allegedly surveyed on June 21, 1940 by Deputy Public Land
Surveyor Tomas Colmenar and approved on January 30, 1941 by the Director of Lands Jose P. Dans, purportedly
authenticated on June 8, 2009 by Ignacio G. Almira, Chief, Regional Surveys Division. A visual comparison of Exhibits 3
and 4 will readily show that both are reproduction of the same Subdivision Plan. Although, it appears to be an exact
reproduction of the same Subdivision Plan, nonetheless, it is perplexing to note the existence of different notations on the
same Subdivision Plan.

In Exhibit 4, below the stamp "FOR OFFICIAL USE", marked as Exhibit 4-A, is the date June 8, 2009 and the
"VALIDATION DENR A.O. NO. 49. 1991" and above the signature over the same "Ignacio G. Almira" is the notation which
reads:

"This print copy of FLS-3168-D is cross-checked with other records and the microfilm of the original and it is found the
same."

Exhibit "3", on the other hand, below the stamp "FOR OFFICIAL USE", marked as Exhibit "3-A" is the "CERTIFICATION"
which reads:

"This is to certify that this is a true and correct reproduction of plan Fls-3168-D(W P),

Claimant: Emiliano Setosta

Location: Caloocan City

Area/Nos.: 342945 sq.m.

Requested by: Castor Viernes

Address: 55 Quirino Hi Way Talipapa, Novaliches, Q. City

Purpose: Reference

Date issued: 10-13-98

O.R.# 6437394-A

(Sgd.)
Prepared by: Norma C. trs

(Sgd.)
MAMERTO L. INFANTE
OIC, Regional Technical Director"

Under it, marked as Exhibit 3-B. are the following notations, "AUTHENTICATE" June 8, 2009:

"Sir:

According to the verification of FLS-3168-D, situated in Caloocan City dated October 13, 1998. Has available record and
files, to National Capital Region. Signing (sic) of Engr. Mamerto L. Infante

(Sgd.)
IGNACIO G. ALMIRA
Chief, Regional Surveys Division"

The mere existence of different notations on the same Subdivision Plan creates serious doubt on the existence and
veracity of the said Subdivision Plan. On record, from the testimonies of Teresita Barque Hernandez and Engr. Castor
Viernes, no explanation was offered in their Judicial Affidavits and when they testified in Court on the above divergent
notations on the same Subdivision Plan. As such, without an acceptable explanation, the only logical conclusion is that
the different notations on the same Subdivision Plan was a result of tampering of documents. This is so because common
experience will tell us that if one and the same document is reproduced several times, even a million times, it would still
reflect or replicate the same notations. Certainly, the tampering of documents not only affect the probative value thereof,
but also subject the malefactor to criminal liability.
x x x x304

The CA observed that the Barques should have presented Mamerto L. Infante and Ignacio G. Almira to identify their
signatures on Exhs. 3 and 4. Such failure on their part to present said witnesses, according to the appellate court, could
be considered eloquent evidence of the absence of Fls-3168-D in the name of Emiliano Setosta duly approved by the
Director of Lands and authenticated by the Chief of the Geodetic Surveys Division of the LMB. Lastly, the CA cited the
following letter-reply dated 03 October 2005 of Samson G. De Leon, OIC Regional Technical Director, LMS-DENR-NCR
addressed to Felicitas B. Manahan (Exh. XXXIII), categorically denying that a copy of approved plan Fls-3168-D exists in
their files, thus:

This pertains to your letter dated 22 September 2005 requesting for a duly certified copy of the original approved plan Fls-
3168-D which, as per letter dated 08 August 2005 of the Regional Technical Director for Land Management Services,
Atty. Crizaldy M. Barcelo was verified to be on file in the Technical Records Section, Land Management Sector of the
DENR-National Capital Region.

In connection thereto, may we inform you that, contrary to the claim of Atty. Crizaldy M. Barcelo in his letter of 08 August
2005, copy of approved plan Fls-3168-D is not on-file in Technical Records Section, Land Management Services, DENR-
NCR. At present, what is on file is ONLY a PHOTOCOPY of Plan Fls-3168-D covering Lot 823, Piedad Estate which is not
a duly certified one.

In addition, Lot 823, Piedad Estate is covered by approved plans Sp-00-000360 and Sp-00-000779 are likewise on-file in
the Technical Records Section, Land Surveys Division, certified on 28 November 2000 by then Chief, Regional Surveys
Division and on 04 June 2005 by then Regional Technical Director for Lands Management Services, NCR, Atty. Crizaldy
M. Barcelo, respectively. Further, verification revealed that there is no record of receipt of the original copy of plan Fls-
3168-D. In view thereof, we regret to inform you that your request cannot be granted.

x x x x305(Emphasis supplied.)

The Barques claim being anchored on a spurious, fake and non-existent sale certificate or deed of conveyance, the CA
concluded that no valid transfer or assignment can be used by them as basis for the reconstitution of title over the subject
lot. And in the absence of a duly approved subdivision plan, the Barques title, TCT No. 210177, is also null and void.

Manahans Claim

From the existing records in the DENR and LMB, it appears that the original claimant/applicant over Lot 823 of Piedad
Estate was Valentin Manahan who supposedly had the lot surveyed on November 10, 1938, with the plan designated as
Fls-3164 approved by the Director of Lands on December 13, 1939, and Sale Certificate No. 511 in the name of Valentin
Manahan subsequently issued. However, the CA seriously doubted the existence of Sale Certificate No. 511, as well as
the veracity of their claim of actual possession before armed men allegedly barred their caretakers from the premises in
the 1950s, thus:

...There is no competent evidence showing that Felicitas Manahan and/or her predecessor-in-interest have ever been in
actual possession of the subject lot. The Investigation Report of Land Investigator Evelyn de la Rosa (Evelyn G. Celzo)
that Valentin Manahan, as a farmer, took possession of the subject lot in 1908 is not supported by credible evidence.
Evelyn de la Rosa conducted the ocular inspection only on May 15, 1989 and her Investigation Report dated July 5, 1989
(Exhibit XV, Manahan) did not mention nor identify the person who allegedly gave her the above information when she
conducted an ocular inspection of the subject lot. A closer examination of her Investigation Report narrating specific
events in 1948 like the lingering illness of Lucio Manahan who died in 1955 and the alleged reports of caretakers of
heavily armed men taking the subject lot by force are tell-tale evidence of a scripted report of Land Investigator Evelyn de
la Rosa. Indubitably, the Investigation Report is dovetailed to portray actual possession of the predecessor-in-interest of
Felicitas Manahan. It is no coincidence that the Investigation Report is practically a replica or summation of Felicitas
Manahans allegations embodied in her petition (Exhibit "1", Manahans, Rollo, pp. 991-995) for cancellation/reversion of
TCT No. RT-22481 in the name of Severino Manotok she filed before the OSG and forwarded to the LMB.

xxxx

...the claim of actual possession in 1908 up to about 1948 when allegedly armed men forcibly wrested possession from
the caretakers of Lucio Manahan is negated by the absence of tax declarations and receipts showing that the
MANAHANS who claimed to be owners of the subject lot declared the subject lot for taxation and paid the real property
tax during the said period. One who claim to be the owner of a parcel of land should declare it and pay the corresponding
real property tax. Possession of a tax declaration and payment of real property tax will certainly bolster the claim of
possession and ownership over a parcel of land. No evidence was even formally offered by the MANAHANS showing that
they declared the subject lot for taxation purposes in 1948. The only documentary evidence offered by the MANAHANS is
Real Property Tax Bill Receipt No. 712650 (Exhibit IX, Manahans) showing payment of real property tax only for the
taxable year 1990-1991 in the sum of P102,319.22. On the other hand, Severino Manotok declared the subject lot for
taxation, as shown in various tax declarations (Exhibits 26-A to 26-N, Manotoks), the earliest of which was dated July 28,
1933 per Tax Declaration No. 12265 (Exhibit 26, Manotoks) and paid the real property tax as evidenced by tax bill
receipts (Exhibits 27 to 27-KKKKKKK, Manotoks). Thirdly, the Court entertains serious doubt on the existence of "Sale
Certificate No. 511" allegedly issued to Valentin Manahan after paying the purchase price of P2,140.00 stated in the
Investigation Report of Evelyn de la Rosa. Although, Sale Certificate No. 511 was mentioned as one of the documents
attached to the Investigation Report, nonetheless, no certified copy of Sale Certificate No. 511 issued to Valentin
Manahan was presented and formally offered as evidence in Court. As a matter of fact, Sale Certificate No. 511 was not
among the documents secured from the LMB and DENR by the OSG and formally offered as evidence in Court. Also,
Rosendo Manahan declared in Court that he tried on several occasions, after reading the Investigation Report, to secure
a certified true copy of Sale Certificate No. 511, but despite a thorough search for the said document, no original or
certified true copy is on file in the records of the LMB and DENR (TSN, November 19, 2009, pp. 25-26). Sans a copy of
Sale Certificate No. 511 in the files of the LMB and DENR, it is quite perplexing to note where and how Hilaria de Guzman
secured a photocopy of Sale Certificate No. 511 dated June 24, 1913 (Exhibit XXXVII, Manahans). No explanation was
offered by Felicitas Manahan and Rosendo Manahan when they testified in Court. Therefore, We cannot accord probative
value on the said photocopy of Sale Certificate No. 511 dated June 24, 1913 as secondary evidence for the simple reason
that it is of questionable existence and of dubious origin.306(Italics supplied.)

The CA thus assailed the adoption by Attys. Rogelio Mandar and Manuel Tacorda of the unsubstantiated findings of
Evelyn dela Rosa regarding the claim of the Manahans in their Memorandum dated April 3, 2000 307 addressed to the
Chief of the Legal Division Alberto R. Recalde, who in turn adopted the same unsupported findings in his Memorandum
dated April 17, 2000308 addressed to the LMB OIC-Director. On the basis of Memorandum dated July 6, 2000309 issued by
then DENR Undersecretary Roseller de la Pea, who also relied on the Investigation Report of Evelyn dela Rosa, LMB
OIC-Director Ernesto Adobo, Jr. issued an Order dated October 16, 2000 310 for the issuance of Deed of Conveyance No.
V-200022 dated October 30, 2000 in favor of Felicitas Manahan.311

As to the Deed of Conveyance No. V-200022 dated October 30, 2000, the CA held that its validity cannot be sustained
considering that it lacked the approval of the Secretary of Agriculture and Natural Resources (now Secretary of
Environment and Natural Resources) and was signed only by LMB OIC-Director Ernesto Adobo, Jr. In any event,
according to the appellate court, Sale Certificate No. 511 in the name of Valentin Manahan would be considered stale at
the time of issuance of Deed of Conveyance No. V-200022 as more than eighty six (86) years had passed from the
execution of Assignment of Sale Certificate No. 511 dated June 24, 1939. Clearly, OIC-Director Ernesto Adobo, Jr.
committed grave abuse of discretion in issuing said deed of conveyance.

As to DENR Memorandum Order No. 16-05 issued by then Secretary Michael T. Defensor, the CA ruled that the
Manahans, just like the Manotoks, may not invoke it to cure the lack of approval by the Secretary of Agriculture and
Commerce in their respective sale certificate/deed of conveyance, the same being inconsistent with Act No. 1120.

The Courts Ruling

The core issue presented is whether the absence of approval of the Secretary of the Interior/Agriculture and Natural
Resources in Sale Certificate No. 1054 and Deed of Conveyance No. 29204 warrants the annulment of the Manotok title.

From the proceedings in the CA, it was established that while records of the DENR-LMB indicate the original
claimant/applicant of Lot 823 as a certain Valentin Manahan, only the Manotoks were able to produce a sale certificate in
the name of their predecessors-in-interest, certified by the LMB Records Management Division (Exh. 10). In addition, the
Manotoks submitted photocopies of original documents entitled Assignment of Sale Certificate dated March 11, 1919,
June 7, 1920 and May 4, 1923 (Exhs. 11, 12 and 13). On the other hand, only two (2) of these documents were submitted
by the OSG certified as available in the files of LMB: Assignment of Sale Certificate dated March 11, 1919 and May 4,
1923 (Exhs. 33 and 34-OSG-LMB).

Sale Certificate No. 1054 dated March 10, 1919 (Exh. 10) was not signed by the Director of Lands nor approved by the
Secretary of the Interior. Exhibits 33 and 34-OSG-LMB contained only the signature of the Director of Lands. The
Manotoks belatedly secured from the National Archives a certified copy of Deed of Conveyance No. 29204 dated
December 7, 1932 (Exh. 51-A) which likewise lacks the approval of the Secretary of Agriculture and Natural Resources as
it was signed only by the Director of Lands.
Section 18 of Act No. 1120 provides:

SECTION 18. No lease or sale made by Chief of the Bureau of Public Lands under the provisions of this Act shall be valid
until approved by the Secretary of the Interior. (Emphasis supplied.)

It is clear from the foregoing provision that the sale of friar lands shall be valid only if approved by the Secretary of the
Interior (later the Secretary of Agriculture and Commerce). In Solid State Multi-Products Corporation v. Court of
Appeals,312 this Court categorically declared that the approval by the Secretary of Agriculture and Commerce is
indispensable for the validity of the sale of friar lands. This was reiterated in Liao v. Court of Appeals, 313 where sales
certificates issued by the Director of Lands in 1913 were held to be void in the absence of approval by the Secretary of
Agriculture and Natural Resources.

In their Memorandum, the Manotoks pointed out that their photocopy of the original Deed of Conveyance No. 29204 (Exh.
51-A), sourced from the National Archives, shows on the second page a poorly imprinted typewritten name over the words
"Secretary of Agriculture and Natural Resources", which name is illegible, and above it an even more poorly imprinted
impression of what may be a stamp of the Secretarys approval. Considering that the particular copy of said deed of
conveyance on which the transfer certificate of title was issued by the Register of Deeds in the name of the buyer
Severino Manotok is required by law to be filed with and retained in the custody of the Register of Deeds in accordance
with Sec. 56 of Act No. 496 and Sec. 56 of P.D. No. 1529, the Manotoks contend that "we can assume that the Manotok
deed of conveyance was in fact approved by the Department Secretary because the register of deeds did issue TCT No.
22813 in the name of the buyer Severino Manotok." It is also argued that since the Bureau of Lands was required by law
to transmit the deed of conveyance directly to the Register of Deeds, said office is legally presumed to have observed the
laws requirements for issuing that deed. The presumption of regularity therefore stands as uncontradicted proof, in this
case, that "all...requirements for the issuance of" that deed of conveyance had been obeyed. In any event, the Manotoks
assert that even if we were to ignore the presumption of validity in the performance of official duty, Department
Memorandum Order No. 16-05 issued on October 27, 2005 by then DENR Secretary Michael T. Defensor, supplies the
omission of approval by the Secretary of Agriculture and Natural Resources in deeds of conveyances over friar lands.

These arguments fail.

Applying the rule laid down in Solid State Multi-Products Corporation v. Court of Appeals and Liao v. Court of Appeals, we
held in Alonso v. Cebu Country Club, Inc.,314 that the absence of approval by the Secretary of Agriculture and Commerce
in the sale certificate and assignment of sale certificate made the sale null and void ab initio. Necessarily, there can be no
valid titles issued on the basis of such sale or assignment. The Manotoks reliance on the presumption of regularity in
ten.lihpwal

the statutorily prescribed transmittal by the Bureau of Lands to the Register of Deeds of their deed of conveyance is
untenable. In our Resolution315 denying the motion for reconsideration filed by petitioners in Alonso v. Cebu Country Club,
Inc., we underscored the mandatory requirement in Section 18, as follows:

Section 18 of Act No. 1120 or the Friar Lands Act unequivocally provides: "No lease or sale made by the Chief of the
Bureau of Public Lands (now the Director of Lands) under the provisions of this Act shall be valid until approved by the
Secretary of the Interior (now, the Secretary of Natural Resources). Thus, petitioners claim of ownership must fail in the
absence of positive evidence showing the approval of the Secretary of Interior. Approval of the Secretary of the Interior
cannot simply be presumed or inferred from certain acts since the law is explicit in its mandate. This is the settled rule as
enunciated in Solid State Multi-Products Corporation vs. Court of Appeals and reiterated in Liao vs. Court of Appeals.
Petitioners have not offered any cogent reason that would justify a deviation from this rule.

x x x x316

DENR Memorandum Order No. 16,317 invoked by both the Manotoks and the Manahans, states:

WHEREAS, it appears that there are uncertainties in the title of the land disposed of by the Government under Act 1120
or the Friar Lands Act due to the lack of the signature of the Secretary on the Deeds of Conveyance;

WHEREAS, said Deeds of Conveyance were only issued by the then Bureau of Lands (now the Land Management
Bureau) after full payment had been made by the applicants thereon subject to the approval of the Secretary of the then
Department of Interior, then Department of Agriculture and Natural Resources, and presently the Department of
Environment and Natural Resources, in accordance with Act 1120;
WHEREAS, some of these Deeds of Conveyance on record in the field offices of the Department and the Land
Management Bureau do not bear the signature of the Secretary despite full payment by the friar land applicant as can be
gleaned in the Friar Lands Registry Book;

WHEREAS, it is only a ministerial duty on the part of the Secretary to sign the Deed of Conveyance once the applicant
had already made full payment on the purchase price of the land;

WHEREFORE, for and in consideration of the above premises, and in order to remove all clouds of doubt regarding the
validity of these instruments, it is hereby declared that all Deeds of Conveyance that do not bear the signature of the
Secretary are deemed signed or otherwise ratified by this Memorandum Order, provided, however, that full payment of the
purchase price of the land and compliance with all the other requirements for the issuance of the Deed of Conveyance
under Act 1120 have been accomplished by the applicant;

This Memorandum Order, however, does not modify, alter or otherwise affect any subsequent assignments, transfers
and/or transactions made by the applicant or his successors-in-interest or any rights arising therefrom after the issuance
of a Transfer Certificate of Title by the concerned Registry of Deeds.

The CA opined that the Manotoks cannot benefit from the above department issuance because it makes reference only to
those deeds of conveyance on file with the records of the DENR field offices. The Manotoks copy of the alleged Deed of
Conveyance No. 29204 issued in 1932, was sourced from the National Archives. Apparently, for the Manotoks,
Memorandum Order No. 16 provides the remedy for an inequitable situation where a deed of conveyance "unsigned" by
the Department Secretary could defeat their right to the subject lot after having fully paid for it. They point out that the Friar
Lands Act itself states that the Government ceases reservation of its title once the buyer had fully paid the price.

The first paragraph of Section 15 states:

SECTION 15. The Government hereby reserves the title to each and every parcel of land sold under the provisions of this
Act until the full payment of all installments or purchase money and interest by the purchaser has been made, and any
sale or encumbrance made by him shall be invalid as against the Government of the Philippine Islands and shall be in all
respects subordinate to its prior claim.

x x x x (Emphasis supplied.)

Indeed, in the early case of Director of Lands v. Rizal,318 this Court ruled that in the sale of friar lands under Act No. 1120,
"the purchaser, even before the payment of the full price and before the execution of the final deed of conveyance is
considered by the law as the actual owner of the lot purchased, under obligation to pay in full the purchase price, the role
or position of the Government being that of a mere lien holder or mortgagee." Subsequently, in Pugeda v. Trias, 319 we
declared that "the conveyance executed in favor of a buyer or purchaser, or the so-called certificate of sale, is a
conveyance of the ownership of the property, subject only to the resolutory condition that the sale may be cancelled if the
price agreed upon is not paid for in full.

In Dela Torre v. Court of Appeals,320 we held:

This is well-supported in jurisprudence, which has consistently held that under Act No. 1120, the equitable and beneficial
title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale is issued.
Furthermore, when the purchaser finally pays the final installment on the purchase price and is given a deed of
conveyance and a certificate of title, the title, at least in equity, retroacts to the time he first occupied the land, paid the first
installment and was issued the corresponding certificate of sale.

All told, notwithstanding the failure of the government to issue the proper instrument of conveyance in favor of Mamerto or
his heirs, the latter still acquired ownership over the subject land. 321 (Emphasis supplied.)

Clearly, it is the execution of the contract to sell and delivery of the certificate of sale that vests title and ownership to the
purchaser of friar land.322 Such certificate of sale must, of course, be signed by the Secretary of Agriculture and Natural
Resources, as evident from Sections 11, 12 and the second paragraph of Section 15, in relation to Section 18, of Act No.
1120:

SECTION 11. Should any person who is the actual and bona fide settler upon, and occupant of, any portion of said lands
at the time the same is conveyed to the Government of the Philippine Islands desire to purchase the land so occupied by
him, he shall be entitled to do so at the actual cost thereof to the Government, and shall be granted fifteen years from the
date of the purchase in which to pay for the same in equal annual installments, should he so desire paying interest at the
rate of four per centum per annum on all deferred payments.

The terms of purchase shall be agreed upon between the purchaser and the Director of Lands, subject to the approval
of the Secretary of Agriculture and Natural Resources.

SECTION 12. ...When the cost thereof shall have been thus ascertained, the Chief of the Bureau of Public Lands shall
give the said settler and occupant a certificate which shall set forth in detail that the Government has agreed to sell to
such settler and occupant the amount of land so held by him, at the price so fixed, payable as provided in this Act. . .and
that upon the payment of the final installment together with all accrued interest the Government will convey to such settler
and occupant the said land so held by him by proper instrument of conveyance, which shall be issued and become
effective in the manner provided in section one hundred and twenty-two of the Land Registration Act.

SECTION 15.

The right of possession and purchase acquired by certificates of sale signed under the provisions hereof by purchasers of
friar lands, pending final payment and the issuance of title, shall be considered as personal property for the purposes of
serving as security for mortgages, and shall be considered as such in judicial proceedings relative to such security.
(Emphasis supplied.)

In the light of the foregoing, we hold that the Manotoks could not have acquired ownership of the subject lot as they had
no valid certificate of sale issued to them by the Government in the first place. Sale Certificate No. 1054 dated March 10,
1919 (Exh. 10) purportedly on file with the DENR-LMB, conspicuously lacks the signature of the Director of Lands and the
Secretary of Agriculture and Natural Resources. In fact, Exh. 10 was not included among those official documents
submitted by the OSG to the CA. We underscore anew that friar lands can be alienated only upon proper compliance with
the requirements of Sections 11, 12 and 18 of Act No. 1120. It was thus primordial for the Manotoks to prove their
acquisition of its title by clear and convincing evidence.323 This they failed to do. Accordingly, this Court has no alternative
but to declare the Manotok title null and void ab initio, and Lot 823 of the Piedad Estate as still part of the Governments
patrimonial property, as recommended by the CA.

The decades-long occupation by the Manotoks of Lot 823, their payment of real property taxes and construction of
buildings, are of no moment. It must be noted that the Manotoks miserably failed to prove the existence of the title
allegedly issued in the name of Severino Mantotok after the latter had paid in full the purchase price. The Manotoks did
not offer any explanation as to why the only copy of TCT No. 22813 was torn in half and no record of documents leading
to its issuance can be found in the registry of deeds. As to the certification issued by the Register of Deeds of Caloocan, it
simply described the copy presented (Exh. 5-A) as "DILAPIDATED" without stating if the original copy of TCT No. 22813
actually existed in their records, nor any information on the year of issuance and name of registered owner. While TCT
No. 22813 was mentioned in certain documents such as the deed of donation executed in 1946 by Severino Manotok in
favor of his children and the first tax declaration (Exh. 26), these do not stand as secondary evidence of an alleged
transfer from OCT No. 614. This hiatus in the evidence of the Manotoks further cast doubts on the veracity of their claim.

As we stressed in Alonso:

Neither may the rewards of prescription be successfully invoked by respondent, as it is an iron-clad dictum that
prescription can never lie against the Government. Since respondent failed to present the paper trail of the propertys
conversion to private property, the lengthy possession and occupation of the disputed land by respondent cannot be
counted in its favor, as the subject property being a friar land, remained part of the patrimonial property of the
Government. Possession of patrimonial property of the Government, whether spanning decades or centuries, can not
1awphi1

ipso facto ripen into ownership. Moreover, the rule that statutes of limitation do not run against the State, unless therein
expressly provided, is founded on the "the great principle of public policy, applicable to all governments alike, which
forbids that the public interests should be prejudiced by the negligence of the officers or agents to whose care they are
confided."324 (Emphasis supplied.)

With respect to the claim of the Manahans, we concur with the finding of the CA that no copy of the alleged Sale
Certificate No. 511can be found in the records of either the DENR-NCR, LMB or National Archives. Although the OSG
submitted a certified copy of Assignment of Sale Certificate No. 511 allegedly executed by Valentin Manahan in favor of
Hilaria de Guzman, there is no competent evidence to show that the claimant Valentin Manahan or his successors-in-
interest actually occupied Lot 823, declared the land for tax purposes, or paid the taxes due thereon.
Even assuming arguendo the existence and validity of the alleged Sale Certificate No. 511 and Assignment of Sale
Certificate No. 511 presented by the Manahans, the CA correctly observed that the claim had become stale after the
lapse of eighty six (86) years from the date of its alleged issuance. As this Court held in Liao v. Court of Appeals, "the
certificates of sale x x x became stale after ten (10) years from its issuance" and hence "can not be the source documents
for issuance of title more than seventy (70) years later."325

Considering that none of the parties has established a valid acquisition under the provisions of Act No. 1120, as
amended, we therefore adopt the recommendation of the CA declaring the Manotok title as null and void ab initio, and Lot
823 of the Piedad Estate as still part of the patrimonial property of the Government.

WHEREFORE, the petitions filed by the Manotoks under Rule 45 of the 1997 Rules of Civil Procedure, as amended, as
well as the petition-in-intervention of the Manahans, are DENIED. The petition for reconstitution of title filed by the
Barques is likewise DENIED. TCT No. RT-22481 (372302) in the name of Severino Manotok IV, et al., TCT No. 210177 in
the name of Homer L. Barque and Deed of Conveyance No. V-200022 issued to Felicitas B. Manahan, are all hereby
declared NULL and VOID. The Register of Deeds of Caloocan City and/or Quezon City are hereby ordered to CANCEL
the said titles. The Court hereby DECLARES that Lot 823 of the Piedad Estate, Quezon City, legally belongs to the
NATIONAL GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, without prejudice to the institution of
REVERSION proceedings by the State through the Office of the Solicitor General.

With costs against the petitioners.

SO ORDERED.

G.R. Nos. 162335 & 162605 March 6, 2012

SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK, FERNANDO M. MANOTOK III, MA. MAMERTA M.
MANOTOK, PATRICIA L. TIONGSON, PACITA L. GO, ROBERTO LAPERAL III, MICHAEL MARSHALL V.
MANOTOK, MARYANN MANOTOK, FELISA MYLENE V. MANOTOK, IGNACIO V. MANOTOK, JR., MILAGROS V.
MANOTOK, SEVERINO MANOTOK III, ROSA R. MANOTOK, MIGUEL A.B. SISON, GEORGE M. BOCANEGRA, MA.
CRISTINA E. SISON, PHILIPP L. MANOTOK, JOSE CLEMENTE L. MANOTOK, RAMON SEVERINO L. MANOTOK,
THELMA R. MANOTOK, JOSE MARIA MANOTOK, JESUS JUDE MANOTOK, JR. and MA. THERESA L. MANOTOK,
represented by their Attorney- in-fact, Rosa R. Manotok, Petitioners,
vs.
HEIRS OF HOMER L. BARQUE, represented by TERESITA BARQUE HERNANDEZ, Respondents.

RESOLUTION

VILLARAMA, JR., J.:

At bar are the motions for reconsideration separately filed by the Manotoks, Barques and Manahans of our Decision
promulgated on August 24, 2010, the dispositive portion of which reads:

WHEREFORE, the petitions filed by the Manotoks under Rule 45 of the 1997 Rules of Civil Procedure, as amended, as
well as the petition-in-intervention of the Manahans, are DENIED. The petition for reconstitution of title filed by the
Barques is likewise DENIED. TCT No. RT-22481 (372302) in the name of Severino Manotok IV, et al., TCT No. 210177 in
the name of Homer L. Barque and Deed of Conveyance No. V-200022 issued to Felicitas B. Manahan, are all hereby
declared NULL and VOID. The Register of Deeds of Caloocan City and/or Quezon City are hereby ordered to CANCEL
the said titles. The Court hereby DECLARES that Lot 823 of the Piedad Estate, Quezon City legally belongs to the
NATIONAL GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, without prejudice to the institution of
REVERSION proceedings by the State through the Office of the Solicitor General.

With costs against the petitioners.

SO ORDERED.

The Manotoks raised the following grounds in their motion for reconsideration with motion for oral arguments:
1. It is unjust and oppressive to deprive the Manotoks of property they have long held and acquired from the
State, on consideration fully paid and received, and under registered title issued by the State itself, on nothing
more than the assumed failure of the States agents to inscribe a ministerial "approval" on the transaction deeds.

2. The annulment of Friar Land sales, simply because physical evidence of the Secretarys ministerial approval
can no longer be found, may void transactions involving thousands of hectares of land, and affect possibly
millions of people to whom the lands may have since been parceled out, sold and resold.

3. The Manotoks were given no due notice of the issue of reversion, which this case on appeal did not include,
and which was thrust upon the Manotoks only in the final resolution disposing of the appeal.

It would be error for the Honorable Court to let this matter go without a serious and full re-examination. This can
be accomplished, among others, by allowing this motion for reconsideration to be heard on oral argument, to try
to permit all pertinent considerations to be aired before the Court and taken into account.

4. These G.R. Nos. 162335 and 162605 were an appeal from administrative reconstitution proceedings before
LRA Reconstitution officer Benjamin Bustos. But the Resolution dated 18 December 2008 which finally reversed
the CAs rulings, affirmed the denial by Bustos of the application for administrative reconstitution of the Barques
purported transfer certificate of title, and terminated the appeal introduced a new "case" on the Manotok property.
It ordered evidence-taking at the CA, on which the Supreme Court proposed itself to decide, in the first instance,
an alleged ownership controversy over the Manotok property.

5. The Manotoks objected to the "remand" on jurisdictional and due process grounds. The original and exclusive
jurisdiction over the subject matter of the case is vested by law on the regional trial courts.

6. The Honorable Court erred in proceeding to judgment divesting the Manotoks of their title to Lot 823 of the
Piedad Estate, without a trial in the courts of original and exclusive jurisdiction, and in disregard of process which
the law accords to all owners-in-possession.

7. The Honorable Court erred in concluding that the Manotoks, despite being owners in possession under a
registered title, may be compelled to produce the deeds by which the Government had transferred the property to
them, and "failing" which can be divested of their ownership in favor of the Government, even if the latter has not
demanded a reversion or brought suit for that purpose.

8. The Honorable Court erred in imposing on the Manotoks, contrary to Art. 541 of the Civil Code, the obligation to
prove their ownership of the subject property, and in awarding their title to the Government who has not even
sued to contest that ownership.

9. The Honorable Court erred in finding that Sale Certificate No. 1054, which Severino Manotok acquired by
assignment in 1923, was not approved by the Director of Lands and the Secretary of Agriculture and Natural
Resources, and in finding that a Sale Certificate without the Secretarys approval is void.

10. The Honorable Court erred in concluding that the Manotoks had no valid Deed of Conveyance of Lot 823 from
the Government The original of Deed of Conveyance No. 29204 gave the register of deeds the authority to issue
the transfer certificate of title in the name of the buyer Severino Manotok, which is required by law to be filed with
and retained in the custody of the register of deeds.We presume that the copy thereof actually transmitted to and
received by the register of deeds did contain the Secretarys signature because he in fact issued the TCT. And we
rely on this presumption because the document itself can no longer be found.

11. Assuming arguendo that the original Deed of Conveyance No. 29204 the register of deeds received did not
bear the Department Secretarys signature, DENR Memorandum Order No. 16-05 dated October 27, 2005 cured
the defect. To deny the Manotoks the benefit of ratification under said MO, on the erroneous interpretation that it
covered only those found in the records of the "field offices" of the DENR and LMB, would be discriminatory. The
Department Secretarys (assumed) failure to affix his signature on the deed of conveyance could not defeat the
Manotoks right to the lot after they had fully paid for it.

Republic Act No. 9443 must be applied, mutatis mutandis, to the Manotoks and the Piedad Estate.
 12. The Honorable Court erred in denying their right to be informed of the CAs report and be heard thereon prior
to judgment, as basic requirements of due process.

The Barques anchor their motion for reconsideration on the following:

THE HONORABLE SUPREME COURT GRAVELY ERRED IN DENYING THE PETITION FOR
RECONSTITUTION FILED BY RESPONDENTS HEIRS OF BARQUE WITHOUT STATING THE GROUNDS
FOR SUCH DENIAL.

II

THE HONORABLE SUPREME COURT GRAVELY ERRED IN INSTANTLY DECLARING IN THE DISPOSITIVE
PORTION OF THE DECISION THAT ALONG WITH FELICITAS B. MANAHANS TITLE, RESPONDENTS HEIRS
OF BARQUES TITLE TCT NO. 210177 IS LIKEWISE NULL AND VOID, WITHOUT STATING A CLEAR AND
DEFINITE BASIS THEREFOR.

III

THE HONORABLE SUPREME COURT GRAVELY ERRED IN DECLARING TRANSFER CERTIFICATE OF

TITLE NO. 210177 IN THE NAME OF HOMER L. BARQUE NULL AND VOID.

IV

THE HONORABLE COURT OF APPEALS FACTUAL FINDINGS, ADOPTED BY THE HONORABLE SUPREME
COURT IN THE DECISION DATED 24 AUGUST 2010, ARE CONTRARY TO THE EVIDENCE PRESENTED.

THE HONORABLE SUPREME COURTS FINDINGS IN THE DECISION DATED 24 AUGUST 2010 ARE
CONTRARY TO LAW.

As to the Manahans, they seek a partial reconsideration and to allow further reception of evidence, stating the following
grounds:

I. As the original of Sale Certificate No. 511 could not be found in the files of the LMB or the DENR-NCR at the
time of the hearings before the Commissioners, the existence of the certificate was proven by secondary
evidence. The Commissioners erred in ignoring secondary evidence of the contents of Sale Certificate No. 511
because of mere doubt and suspicion as to its authenticity and in the absence of contradicting evidence.

II. The OSG which has been tasked by the Honorable Court to obtain documents from the LMB and DENR-NCR
relative to the conveyance of Lot 823, Piedad Estate, furnished intevenors with a certified true copy of Sale
Certificate No. 511 which it obtained from the DENR-NCR on September 11, 2010, together with the explanation
of DENR-NCR why the document is available only now. (Certified true copy of Sale Certificate No. 511 and Sworn
Explanation of Evelyn G. Celzo attached as Annexes "I" and "II".

III. When Valentin Manahan offered to purchase Lot 823, Piedad Estate, being the "actual settler and occupant"
who under the law enjoyed preference to buy the lot, his status as "actual settler and occupant" must have been
verified by the Bureau of Public Lands because the presumption is that official duty has been regularly performed.
The administrative determination of the status of Valentin Manahan as "actual settler and occupant" can not now
be reviewed after the lapse of about eight (8) decades when parties, witnesses, documents and other evidence
are hardly or no longer available.

IV. Abundant evidence was submitted by intervenors that they and their predecessors-in-interest occupied and
possessed Lot 823 up to 1948 when they were dispossessed by armed men. It was error for the Commissioners
to ignore the evidence of the intervenors, there being no contradicting proof.
 V. The Commissioners committed palpable error in not according evidentiary value to the Investigation Report of
Evelyn dela Rosa because it is allegedly "practically a replica or summation of Felicitas B. Manahans allegations
embodied in her petition." Examination of the dates of the documents will show that the Investigation Report
preceded the Petition. The Petition, therefore, is based on the Investigation Report, and not the other way around.

VI. The pronouncement of the Commissioners that Sale Certificate No. 511 is stale is incorrect. Intervenors made
continuing efforts to secure a deed of conveyance based on Sale Certificate No. 511. Defense of staleness or
laches belongs to the party against whom the claim is asserted; it is only that party who can raise it. It can also be
waived, as in this case when the LMB which had the sole authority under Act No. 1120 to convey friar lands,
issued to intervenor Felicitas B. Manahan Deed of Conveyance No. V-2000-22.

VII. The requirement of Act No. 1120 that a deed of conveyance of friar land must be signed by the Secretary of
Interior was dispensed with pursuant to law and Presidential issuances which have the force of law.

VIII. Deeds of conveyance lacking the signature of the Department Secretary were ratified by President Joseph
Estrada and DENR Secretary Michael T. Defensor.

The motions are bereft of merit.

Upon the theory that this Court had no power to cancel their certificate of title over Lot 823, Piedad Estate in the resolution
of the present controversy, the Manotoks contend that our Resolution of December 18, 2008 terminated the appeal from
the Land Registration Authority (LRA) administrative reconstitution proceedings by reversing the CAs rulings and
affirming the denial by LRA Reconstitution Officer Benjamin M. Bustos of the application for administrative reconstitution
of the Barques Transfer Certificate of Title (TCT) No. 210177. The appeal having been terminated, the Manotoks argued
that the remand to the CA for evidence-taking had introduced a new "case" in which this Court will decide, in the first
instance, an "alleged" ownership issue over the property. Such action is legally infirm since the law has vested exclusive
original jurisdiction over civil actions involving title to real property on the trial courts.

The argument is untenable.

In our December 18, 2008 Resolution, we set aside the December 12, 2005 Decision rendered by the First Division and
recalled the entry of judgment. We ruled that neither the CA nor the LRA had jurisdiction to cancel the Manotok title, a
relief sought by the Barques in the administrative reconstitution proceedings. The Court En Banc proceeded with the
reevaluation of the cases on a pro hac vice basis. During the oral arguments, there were controversial factual matters
which emerged as the parties fully ventilated their respective claims, in the course of which the Barques claim of
ownership was found to be exceedingly weak. Indeed, both the LRA and CA erred in ruling that the Barques had the right
to seek reconstitution of their purported title. Reevaluation of the evidence on record likewise indicated that the Manotoks
claim to title is just as flawed as that of the Barques. Following the approach in Alonso v. Cebu Country Club, Inc. 1 also
involving a Friar Land, Republic v. Court of Appeals2 and Manotok Realty Inc. v. CLT Realty Development
Corporation,3 the majority resolved to remand this case for reception of evidence on the parties competing claims of
ownership over Lot 823 of the Piedad Estate. Given the contentious factual issues, it was necessary for this Court to
resolve the same for the complete determination of the present controversy involving a huge tract of friar land. It was thus
not the first time the Court had actually resorted to referring a factual matter pending before it to the CA.

Maintaining their objection to the order for reception of evidence on remand, the Manotoks argue that as owners in
possession, they had no further duty to defend their title pursuant to Article 541 of the Civil Code which states that: "[a]
possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot
be obliged to show or prove it." But such presumption is prima facie, and therefore it prevails until the contrary is
proved.4In the light of serious flaws in the title of Severino Manotok which were brought to light during the reconstitution
proceedings, the Court deemed it proper to give all the parties full opportunity to adduce further evidence, and in
particular, for the Manotoks to prove their presumed just title over the property also claimed by the Barques and the
Manahans. As it turned out, none of the parties were able to establish by clear and convincing evidence a valid alienation
from the Government of the subject friar land. The declaration of ownership in favor of the Government was but the logical
consequence of such finding.

We have ruled that the existence of Sale Certificate No. 1054 in the records of the DENR-LMB was not duly established.
No officer of the DENR-NCR or LMB having official custody of sale certificates covering friar lands testified as to the
issuance and authenticity of Exh. 10 submitted by the Manotoks. And even assuming that Exh. 10 was actually sourced
from the DENR-LMB, there was no showing that it was duly issued by the Director of Lands and approved by the
Secretary of Agriculture and Natural Resources (DENR). On this point, the Manotoks hinted that the LMBs certifying the
document (Exh. 10) at the Manotoks request was a deliberate fraud in order to give them either a false document, the
usual unsigned copy of the signed original, or a fake copy.

The Manotoks further assert that this would imply that the LMB either did not produce the genuine article, or could not
produce it. This could only mean that the document which the NBI "found" to be fake or spurious, if this Court accepts that
finding, was "planted evidence"or evidence inserted in the LMB files to discredit the Manotok title. Nonetheless, the
Manotoks insist there were independent evidence which supposedly established the prior existence of Sale Certificate No.
1054. These documents are: (a) photocopy of Assignment of Sale Certificate No. 1054 dated 1929; (b) official receipt of
payment for said certified copy; (c) photocopies of the other assignment deeds dated 1923; (d) official receipts of
installment payments on Lot 823 issued to Severino Manotok; (e) file copies in the National Archives of the Deed of
Conveyance No. 29204; and (f) the notarial registers in which the said Deed of Conveyance, as well as the assignment
documents, were entered.

The contentions have no merit, and at best speculative. As this Court categorically ruled in Alonso v. Cebu Country Club,
Inc.,5 "approval by the Secretary of Agriculture and Commerce of the sale of friar lands is indispensable for its validity,
hence, the absence of such approval made the sale null and void ab initio." In that case, the majority declared that no
valid titles can be issued on the basis of the sale or assignment made in favor of petitioners father due to the absence of
signature of the Director of Lands and the Secretary of the Interior, and the approval of the Secretary of Natural
Resources in the Sale Certificate and Assignment of Sale Certificate. Applying the Alonso ruling to these cases, we thus
held that no legal right over the subject friar land can be recognized in favor of the Manotoks under the assignment
documents in the absence of the certificate of sale duly signed by the Director of Lands and approved by the Secretary of
Agriculture and Natural Resources.

That a valid certificate of sale was issued to Severino Manotoks assignors cannot simply be presumed from the execution
of assignment documents in his favor. Neither can it be deduced from the alleged issuance of the half-torn TCT No.
22813, itself a doubtful document as its authenticity was not established, much less the veracity of its recitals because the
name of the registered owner and date of issuance do not appear at all. The Manotoks until now has not offered any
explanation as to such condition of the alleged title of Severino Manotok; they assert that it is the Register of Deeds
himself "who should be in a position to explain that condition of the TCT in his custody." But then, no Register of Deeds
had testified and attested to the fact that the original of TCT No. 22813 was under his/her custody, nor that said certificate
of title in the name of Severino Manotok existed in the files of the Registry of Deeds of Caloocan or Quezon City. The
Manotoks consistently evaded having to explain the circumstances as to how and where TCT No. 22813 came about.
Instead, they urge this Court to validate their alleged title on the basis of the disputable presumption of regularity in the
performance of official duty. Such stance hardly satisfies the standard of clear and convincing evidence in these cases.
Even the existence of the official receipts showing payment of the price to the land by Severino Manotok does not prove
that the land was legally conveyed to him without any contract of sale having been executed by the government in his
favor. Neither did the alleged issuance of TCT No. 22183 in his favor vest ownership upon him over the land nor did it
validate the alleged purchase of Lot 283, which is null and void. The absence of the Secretarys approval in Certificate of
Sale No. 1054 made the supposed sale null and void ab initio.6

In the light of the foregoing, the claim of the Barques who, just like the Manahans, were unable to produce an authentic
and genuine sale certificate, must likewise fail. The Decision discussed extensively the findings of the CA that the
Barques documentary evidence were either spurious or irregularly procured, which even buttressed the earlier findings
mentioned in the December 18, 2008 Resolution. The CAs findings and recommendations with respect to the claims of all
parties, have been fully adopted by this Court, as evident in our disquisitions on the indispensable requirement of a validly
issued Certificate of Sale over Lot 823, Piedad Estate.

As to the motion of the Manahans to admit an alleged certified true copy of Sale Certificate No. 511 dated June 23, 1913
in the name of Valentin Manahan which, as alleged in the attached Sworn Explanation of Evelyn G. Celzo, the latter
hadinadvertently failed to attach to her Investigation Report forwarded to the CENRO, this Court cannot grant said motion.

This belatedly submitted copy of Sale Certificate No. 511 was not among those official documents which the Office of the
Solicitor General (OSG) offered as evidence, as in fact no copy thereof can be found in the records of either the DENR-
NCR or LMB. Moreover, the sudden emergence of this unauthenticated document is suspicious, considering that Celzo
who testified, as witness for both the OSG and the Manahans, categorically admitted that she never actually saw the
application to purchase and alleged Sale Certificate No. 511 of the Manahans. The relevant portions of the transcript of
stenographic notes of the cross- examination of said witness during the hearing before the CA are herein quoted:

ATTY. SAN JUAN:

How about this part concerning Valentin Manahan having applied for the purchase of the land? Did you get this from the
neighbors or from Felicitas Manahan?

xxxx

WITNESS:

No, sir. Only the Records Section, sir, that Valentin Manahan applied, sir.

ATTY. SAN JUAN:

You did not see Valentin Manahans application but only the Records Section saw it?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

Did they tell you that they saw the application?

WITNESS:

I did not go further, sir.

xxxx

ATTY. SAN JUAN:

And this report of yours says that Valentin Manahan was issued Sale Certificate No. 511 after completing the payment of
the price of P2,140?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

You also got this from the records of the LMB, is that correct?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

You actually saw the sale certificate that was issued to Valentin Manahan after he paid the price of P2,140?

WITNESS:

No, sir. I did not go further.

ATTY. SAN JUAN:

You did not see the sale certificate?

WITNESS:

Yes, Sir, but I asked only.

ATTY. SAN JUAN:

Who did you ask?

WITNESS:

The records officer, sir.

ATTY. SAN JUAN:

Whose name you can no longer recall, correct?

WITNESS:

I can no longer recall, sir.

ATTY. SAN JUAN:

And the information to you was the Sale Certificate No. 511 was issued after the price was fully paid?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

And it was only after he applied for the purchase of the lot sometime after the survey of 1939 that he was issued sale
certificate No. 511?

WITNESS:

I am not aware of the issuance of sale certificate. I am aware only of the deed of assignment, Sir.

x x x x7 (Emphasis supplied.)

In view of the above admission, Celzos explanation that the copy of Sale Certificate No. 511 signed by the Director of
Lands and Secretary of the Interior was originally attached to her Investigation Report, cannot be given credence. Even
her testimony regarding the conduct of her investigation of Lot 823, Piedad Estate and the Investigation Report she
submitted thereafter, failed to impress the CA on the validity of the Manahans claim. Indeed, records showed that Celzos
findings in her report were merely based on what Felicitas Manahan told her about the alleged occupation and possession
by Valentin Manahan of the subject land.

In their Offer of Additional Evidence, the Manahans submitted a photocopy of a letter dated December 21, 2010 allegedly
sent by Atty. Allan V. Barcena (OIC, Director) to their counsel, Atty. Romeo C. dela Cruz, which reads:

This has reference to your letter dated August 20, 2010 addressed to the Secretary of the Department of Environment and
Natural Resources (DENR) requesting that Deed of Conveyance No. V-200022 issued on October 30, 2000 over Lot 823
of the Piedad Estate in favor of Felicitas B. Manahan be ratified or confirmed for reasons stated therein. The Office of the
DENR Secretary in turn referred the letter to us for appropriate action.

Records of this Office on Lot 823 of the Piedad Estate, show that the Deed of Conveyance No. V-200022 covering said lot
in favor of Felicitas Manahan was issued by then Director of the Land Management Bureau (LMB), now Undersecretary
Ernesto D. Adobo, Jr., on October 30, 2000. The Deed was issued based on General Memorandum Order (GMO) No. 1
issued by then Secretary Jose J. Leido, Jr. of the Department of Natural Resources on January 17, 1977, which
authorized the Director of Lands, now Director of LMB, to approve contracts of sale and deeds of conveyance affecting
Friar Lands.

It is stressed that the confirmation of the Deed by this office is only as to the execution and issuance based on the
authority of LMB Director under GMO No. 1. This is without prejudice to the final decision of the Supreme Court as to its
validity in the case of "Severino Manotok IV, et al. versus Heirs of Homer L, Barque" (G.R. No. 162335 & 162605).

Please be guided accordingly.8 (Emphasis supplied.)

However, in the absence of a valid certificate of sale duly signed by the Secretary of Interior or Agriculture and Natural
Resources, such alleged confirmation of the execution and issuance by the DENR-LMB of Deed of Conveyance No V-
00022 in favor of Felicitas Manahan on October 30, 2000 is still insufficient to prove the Manahans claim over the subject
land.

In a Supplemental Manifestation dated November 18, 2010, the Manotoks submitted an affidavit supposedlyexecuted on
November 11, 2010 by former DENR Secretary Michael T. Defensor("Defensor Affidavit") clarifying that MO 16-05 applies
to all Deeds of Conveyance that do not bear the signature of the Secretary of Natural Resources, contrary to the CA and
this Courts statement that said issuance refers only to those deeds of conveyance on file with the records of the DENR
field offices.

By its express terms, however, MO 16-05 covered only deeds of conveyances and not unsigned certificates of sale. The
explanation of Secretary Defensor stated theavowed purpose behind the issuance, which is "to remove doubts or dispel
objections as to the validity of all Torrens transfer certificates of title issued over friar lands" thereby "ratifying the deeds of
conveyance to the friar land buyers who have fully paid the purchase price, and are otherwise not shown to have
committed any wrong or illegality in acquiring such lands."

The Manahans propounded the same theory that contracts of sale over friar lands without the approval of the Secretary of
Natural Resources may be subsequently ratified, but pointed out that unlike the Manotoks Deed of Conveyance No.
29204 (1932), their Deed of Conveyance No. V-2000-22 (2000) was issued and approved by the Director of Lands upon
prior authority granted by the Secretary.

In their Consolidated Memorandum dated December 19, 2010, the Manahans reiterated their earlier argument that the
LMB Director himself had the authority to approve contracts of sale and deeds of conveyance over friar lands on the basis
of General Memorandum Order No. 1 issued in 1977 by then Secretary of Natural Resources Jose J. Leido, Jr. delegating
such function to the Director of Lands. This delegated power can also be gleaned from Sec. 15, Chapter 1, Title XIV of the
Administrative Code of 1987 which provides that the Director of Lands shall "perform such other functions as may be
provided by law or assigned by the Secretary." Moreover, former President Corazon C. Aquino issued Executive Order
No. 131 dated January 20, 1987 reorganizing the LMB and providing that the LMB Director shall, among others, perform
other functions as may be assigned by the Minister of Natural Resources.

On the basis of Art. 13179 of the Civil Code, the Manahans contend that deeds of conveyance not bearing the signature of
the Secretary can also be ratified. Further, they cite Proclamation No. 172 issued by former President Joseph Ejercito
Estrada which declared that there should be no legal impediment for the LMB to issue such deeds of conveyance since
the applicants/purchasers have already paid the purchase price of the lot, and as sellers in good faith, it is the obligation
of the Government to deliver to said applicants/purchasers the friar lands sold free of any lien or encumbrance
whatsoever. Eventually, when MO 16-05 was issued by Secretary Defensor, all these deeds of conveyance lacking the
signature of the Secretary of Natural Resources are thus deemed signed or otherwise ratified. The CA accordingly erred
in holding that MO 16-05 cannot override Act No. 1120 which requires that a deed of conveyance must be signed by the
Secretary, considering that MO 16-05 is based on law and presidential issuances, particularly EO 131, which have the
force of law.

Meanwhile, in compliance with our directive, the Solicitor General filed his Comment on the Defensor Affidavit submitted
by the Manotoks. The Solicitor General contends that said document is hearsay evidence, hence inadmissible and without
probative value. He points out that former DENR Secretary Defensor was not presented as a witness during the hearings
at the CA, thus depriving the parties including the government of the right to cross-examine him regarding his allegations
therein. And even assuming arguendo that such affidavit is admissible as evidence, the Solicitor General is of the view
that the Manotoks, Barques and Manahans still cannot benefit from the remedial effect of MO 16-05 in view of the
decision rendered by this Court which ruled that none of the parties in this case has established a valid alienation from the
Government of Lot 823 of the Piedad Estate, and also because the curative effect of MO 16-05 is intended only for friar
land buyers whose deeds of conveyance lack the signature of the Secretary of the Interior or Agriculture and Natural
Resources, have fully paid the purchase price and are otherwise not shown to have committed any wrong or illegality in
acquiring the friar lands. He then emphasizes that this Court has ruled that it is not only the deed of conveyance which
must be signed by the Secretary but also the certificate of sale itself. Since none of the parties has shown a valid
disposition to any of them of Lot 823 of the Piedad Estate, this Court therefore correctly held that said friar land is still part
of the patrimonial property of the national government.

The Court is not persuaded by the "ratification theory" espoused by the Manotoks and Manahans.

The argument that the Director of Lands had delegated authority to approve contracts of sale and deeds of conveyances
over friar landsignores the consistent ruling of this Court in controversies involving friar lands. The aforementioned
presidential/executive issuances notwithstanding, this Court held in Solid State Multi-Products Corporation v. CA,10 Liao v.
Court of Appeals,11and Alonso v. Cebu Country Club12 that approval of the Secretary of Agriculture and Commerce (later
the Natural Resources) is indispensable to the validity of sale of friar land pursuant to Sec. 18 of Act No. 1120 and that the
procedure laid down by said law must be strictly complied with.

As to the applicability of Art. 1317 of the Civil Code, we maintain that contracts of sale lacking the approval of the
Secretary fall under the class of void and inexistent contracts enumerated in Art. 1409 13 which cannot be ratified. Section
18 of Act No. 1120 mandated the approval by the Secretary for a sale of friar land to be valid.

In his dissenting opinion, Justice Antonio T. Carpio disagreed with the majoritys interpretation of Section 18 of Act No.
1120, and proposed that based on Section 12 of the same Act, it is the Deed of Conveyance that must bear the signature
of the Secretary of Interior/Agriculture and Natural Resources "because it is only when the final installment is paid that the
Secretary can approve the sale, the purchase price having been fully paid." It was pointed out that the majority itself
expressly admit that "it is only a ministerial duty on the part of the Secretary to sign the Deed of Conveyance once the
applicant had made full payment on the purchase price of the land", citing jurisprudence to the effect that "notwithstanding
the failure of the government to issue the proper instrument of conveyance when the purchaser finally pays the final
installment of the purchase price, the purchase of the friar land still acquired ownership.

We are unable to agree with the view that it is only the Director of Lands who signs the Certificate of Sale.

The official document denominated as "Sale Certificate" clearly required both the signatures of the Director of Lands who
issued such sale certificate to an applicant settler/occupant and the Secretary of the Interior/Agriculture and Natural
Resources indicating his approval of the sale. These forms had been prepared and issued by the Chief of the Bureau of
Public Lands under the supervision of the Secretary of the Interior, consistent with Act No. 1120 "as may be necessary x x
x to carry into effect all the provisions [thereof] that are to be administered by or under [his] direction, and for the conduct
of all proceedings arising under such provisions."14

We reiterate that Section 18 of Act No. 1120, as amended, is plain and categorical in stating that:

SECTION 18. No lease or sale made by the Chief of the Bureau of Public Lands under the provisions of this Act shall be
valid until approved by the Secretary of the Interior.

Section 12 did not mention the requirement of signature or approval of the Secretary in the sale certificate and deed of
conveyance.

SECTION 12. It shall be the duty of the Chief of the Bureau of Public Lands by proper investigation to ascertain what is
the actual value of the parcel of land held by each settler and occupant, taking into consideration the location and quality
of each holding of land, and any other circumstances giving [it] value. The basis of valuation shall likewise be, so far as
practicable, such [as] the aggregate of the values of all the holdings included in each particular tract shall be equal to the
cost to the Government to the entire tract, including the cost of surveys, administration and interest upon the purchase
money to the time of sale. When the cost thereof shall have been thus ascertained, the Chief of the Bureau of Public
Lands shall give the said settler and occupant a certificate which shall set forth in detail that the Government has agreed
to sell to such settler and occupant the amount of land so held by him, at the price so fixed, payable as provided in this
Act at the office of the Chief of Bureau of Public Lands, in gold coin of the United States or its equivalent in Philippine
currency, and that upon the payment of the final installment together with [the] accrued interest the Government will
convey to such settler and occupant the said land so held by him by proper instrument of conveyance, which shall be
issued and become effective in the manner provided in section one hundred and twenty-two of the Land Registration Act.
The Chief of the Bureau of Public Lands shall, in each instance where a certificate is given to the settler and occupant of
any holding, take his formal receipt showing the delivery of such certificate, signed by said settler and occupant.
On the other hand, the first paragraph of Section 15 provides for the reservation of title in the Government only for the
purpose of ensuring payment of the purchase price, which means that the sale was subject only to the resolutory
condition of non-payment, while the second paragraph states that the purchaser thereby acquires "the right of possession
and purchase" by virtue of a certificate of sale "signed under the provisions [thereof]." The certificate of sale evidences the
meeting of the minds between the Government and the applicant regarding the price, the specific parcel of friar land, and
terms of payment. In Dela Torre v. Court of Appeals,15we explained that the non-payment of the full purchase price is the
only recognized resolutory condition in the case of sale of friar lands. We have also held that it is the execution of the
contract to sell and delivery of the certificate of sale that vests title and ownership to the purchaser of friar land. 16 Where
there is no certificate of sale issued, the purchaser does not acquire any right of possession and purchase, as implied
from Section 15. By the mandatory language of Section 18, the absence of approval of the Secretary of
Interior/Agriculture and Natural Resources in the lease or sale of friar land would invalidate the sale. These provisions
read together indicate that the approval of the Secretary is required in both the certificate of sale and deed of conveyance,
although the lack of signature of the Secretary in the latter may not defeat the rights of the applicant who had fully paid the
purchase price.

Justice Conchita Carpio Morales dissent asserted that case law does not categorically state that the required "approval"
must be in the form of a signature on the Certificate of Sale, and that there is no statutory basis for the requirement of the
Secretarys signature on the Certificate of Sale "apart from a strained deduction of Section 18."

As already stated, the official forms being used by the Government for this purpose clearly show that the Director of Lands
signs every certificate of sale issued covering a specific parcel of friar land in favor of the applicant/purchaser while the
Secretary of Interior/Natural Resources signs the document indicating that the sale was approved by him. To approve is to
be satisfied with; to confirm, ratify, sanction, or consent to some act or thing done by another; to sanction officially. 17 The
Secretary of Interior/Natural Resources signs and approves the Certificate of Sale to confirm and officially sanction the
conveyance of friar lands executed by the Chief of the Bureau of Public Lands (later Director of Lands). It is worth
mentioning thatSale Certificate No. 651 in the name of one Ambrosio Berones dated June 23, 1913, 18also covering Lot
823 of the Piedad Estate and forming part of the official documents on file with the DENR-LMB which was formally offered
by the OSG as part of the official records on file with the DENR and LMB pertaining to Lot 823, contains the signature of
both the Director of Lands and Secretary of the Interior. The Assignment of Sale Certificate No. 651 dated April 19, 1930
was also signed by the Director of Lands.19

Following the dissents interpretation that the Secretary is not required to sign the certificate of sale while his signature in
the Deed of Conveyance may also appear although merely a ministerial act, it would result in the absurd situation wherein
thecertificate of sale and deed of conveyance both lacked the signature and approval of the Secretary, and yet the
purchasers ownership is ratified, courtesy of DENR Memorandum Order (MO) No. 16-05. It is also not farfetched that
greater chaos will arise from conflicting claims over friar lands, which could not be definitively settled until the genuine and
official manifestation of the Secretarys approval of the sale is discerned from the records and documents presented. This
state of things is simply not envisioned under the orderly and proper distribution of friar lands to bona fide occupants and
settlers whom the Chief of the Bureau of Public Lands was tasked to identify. 20

The existence of a valid certificate of sale therefore must first be established with clear and convincing evidence before a
purchaser is deemed to have acquired ownership over a friar land notwithstanding the non-issuance by the Government,
for some reason or another, of a deed of conveyance after completing the installment payments. In the absence of such
certificate of sale duly signed by the Secretary, no right can be recognized in favor of the applicant. Neither would any
assignee or transferee acquire any right over the subject land.

In Alonso v. Cebu Country Club, Inc.,21 the Court categorically ruled that the absence of approval by the Secretary of
Agriculture and Commerce in the sale certificate and assignment of sale certificate made the sale null and void ab initio.
Necessarily, there can be no valid titles issued on the basis of such sale or assignment. 22

Justice Carpio, however, opined that the ruling in Alonso "was superseded with the issuance by then Department of
[Environment] and Natural Resources (DENR) Secretary Michael T. Defensor of DENR Memorandum Order No. 16-05." It
was argued that the majority had construed a "limited application" when it declared that the Manotoks could not benefit
from said memorandum order because the latter refers only to deeds of conveyance "on file with the records of the DENR
field offices".

We disagree with the view that Alonso is no longer applicable to this controversy after the issuance of DENR MO No. 16-
05 which supposedly cured the defect in the Manotoks title.
First, DENR MO No. 16-05 explicitly makes reference only to Deeds of Conveyances, not to Sale Certificates by which,
under the express language of Section 15, the purchaser of friar land acquires the right of possession and purchase
pending final payment and the issuance of title, such certificate being duly signed under the provisions of Act No. 1120.
Although the whereas clause of MO No. 16-05 correctly stated that it was only a ministerial duty on the part of the
Secretary to sign the Deed of Conveyance once the applicant had made full payment on the purchase price of the land, it
must be stressed that in those instances where the formality of the Secretarys approval and signature is dispensed with,
there was a valid certificate of sale issued to the purchaser or transferor. In this case, there is no indication in the records
that a certificate of sale was actually issued to the assignors of Severino Manotok, allegedly the original claimants of Lot
823, Piedad Estate.

Second, it is basic that an administrative issuance like DENR Memorandum Order No. 16-05 must conform to and not
contravene existing laws. In the interpretation and construction of the statutes entrusted to them for implementation,
administrative agencies may not make rules and regulations which are inconsistent with the statute it is administering, or
which are in derogation of, or defeat its purpose. In case of conflict between a statute and an administrative order, the
former must prevail.23 DENR Memorandum Order No. 16-05 cannot supersede or amend the clear mandate of Section
18, Act No. 1120 as to dispense with the requirement of approval by the Secretary of the Interior/Agriculture and Natural
Resources of every lease or sale of friar lands.

But what is worse, as the dissent suggests, is that MO 16-05 would apply even to those deeds of conveyances not found
in the records of DENR or its field offices, such as the Manotoks Deed of Conveyance No. 29204 sourced from the
National Archives. It would then cover cases of claimants who have not been issued any certificate of sale but were able
to produce a deed of conveyance in their names. The Bureau of Lands was originally charged with the administration of
all laws relative to friar lands, pursuant to Act No. 2657 and Act No. 2711. Under Executive Order No. 192,24 the functions
and powers previously held by the Bureau of Lands were absorbed by the Lands Management Bureau (LMB) of the
DENR, while those functions and powers not absorbed by the LMB were transferred to the regional field offices. 25 As
pointed out by the Solicitor General in the Memorandum submitted to the CA, since the LMB and DENR-NCR exercise
sole authority over friar lands, they are naturally the "sole repository of documents and records relative to Lot No. 823 of
the Piedad Estate."26

Third, the perceived disquieting effects on titles over friar lands long held by generations of landowners cannot be invoked
as justification for legitimizing any claim or acquisition of these lands obtained through fraud or without strict compliance
with the procedure laid down in Act No. 1120. This Court, in denying with finality the motion for reconsideration filed by
petitioner in Alonso v. Cebu Country Club, Inc.27 reiterated the settled rule that "[a]pproval by the Secretary of the Interior
cannot simply be presumed or inferred from certain acts since the law is explicit in its mandate."28 Petitioners failed to
discharge their burden of proving their acquisition of title by clear and convincing evidence, considering the nature of the
land involved.

As consistently held by this Court, friar lands can be alienated only upon proper compliance with the requirements of Act
No. 1120. The issuance of a valid certificate of sale is a condition sine qua non for acquisition of ownership under the Friar
Lands Act. Otherwise, DENR Memorandum Order No. 16-05 would serve as administrative imprimatur to holders of
deeds of conveyance whose acquisition may have been obtained through irregularity or fraud.

Contrary to the dissent of Justice Maria Lourdes P. A. Sereno that our decision has "created dangers for the system of
property rights in the Philippines", the Court simply adhered strictly to the letter and spirit of the Friar Lands Act and
jurisprudence interpreting its provisions. Such imagined scenario of instability and chaos in the established property
regime, suggesting several other owners of lands formerly comprising the Piedad Estate who are supposedly similarly
situated, remains in the realm of speculation. Apart from their bare allegations, petitioners (Manotoks) failed to
demonstrate how the awardees or present owners of around more than 2,000 hectares of land in the Piedad Estate can
be embroiled in legal disputes arising from unsigned certificates of sale.

On the other hand, this Court must take on the task of scrutinizing even certificates of title held for decades involving
lands of the public domain and those lands which form part of the Governments patrimonial property, whenever
necessary in the complete adjudication of the controversy before it or where apparent irregularities and anomalies are
shown by the evidence on record. There is nothing sacrosanct about the landholdings in the Piedad Estate as even prior
to the years when Lot 823 could have been possibly "sold" or disposed by the Bureau of Lands, there were already
reported anomalies in the distribution of friar lands in general.29

Significantly, subsequent to the promulgation of our decision in Alonso, Republic Act No. (RA) 9443 was passed by
Congress confirming and declaring, subject to certain exceptions, the validity of existing TCTs and reconstituted
certificates of title covering the Banilad Friar Lands Estate situated in Cebu. Alonso involved a friar land already titled but
without a sale certificate, and upon that ground we declared the registered owner as not having acquired ownership of the
land. RA 9443 validated the titles "notwithstanding the lack of signatures and/or approval of the then Secretary of Interior
(later Secretary of Agriculture and Natural Resources) and/or the then Chief of the Bureau of Public lands (later Director of
Public Lands) in the copies of the duly executed Sale Certificate and Assignments of Sale Certificates, as the case may
be, now on file with the Community Environment and Natural Resources Office (CENRO), Cebu City".

The enactment of RA 9443 signifies the legislatures recognition of the statutory basis of the Alonso ruling to the effect
that in the absence of signature and/or approval of the Secretary of Interior/Natural Resources in the Certificates of
Sale on file with the CENRO, the sale is not valid and the purchaser has not acquired ownership of the friar land. Indeed,
Congress found it imperative to pass a new law in order to exempt the already titled portions of the Banilad Friar Lands
Estate from the operation of Section 18. This runs counter to the dissents main thesis that a mere administrative issuance
(DENR MO No. 16-05) would be sufficient to cure the lack of signature and approval by the Secretary in Certificate of Sale
No. 1054 covering Lot 823 of the Piedad Estate.

In any event, the Manotoks now seek the application of RA 9443 to the Piedad Estate, arguing that for said law to be
constitutionally valid, its continued operation must be interpreted in a manner that does not collide with the equal
protection clause. Considering that the facts in Alonso from which RA 9443 sprung are similar to those in this case, it is
contended that there is no reason to exclude the Piedad Estate from the ambit of RA 9443.

Justice Carpios dissent concurs with this view, stating that to limit its application to the Banilad Friar Lands Estate will
result in class legislation. RA 9443 supposedly should be extended to lands similarly situated, citing the case of Central
Bank Employees Association, Inc. v. Bangko Sentral ng Pilipinas. 30

In the aforesaid case, the Court extended the benefits of subsequent laws exempting all rank-and-file employees of other
government financing institutions (GFIs) from the Salary Standardization Law (SSL) to the rank-and-file employees of the
BSP. We upheld the position of petitioner association that the continued operation of Section 15 (c), Article II of RA 7653
(the New Central Bank Act), which provides that the compensation and wage structure of employees whose position fall
under salary grade 19 and below shall be in accordance with the rates prescribed under RA 6758 (SSL), constitutes
"invidious discrimination on the 2,994 rank-and-file employees of the [BSP]". Thus, as regards the exemption from the
SSL, we declared that there were no characteristics peculiar only to the seven GFIs or their rank-and-file so as to justify
the exemption from the SSL which BSP rank-and-file employees were denied. The distinction made by the law is
superficial, arbitrary and not based on substantial distinctions that make real differences between BSP rank-and-file and
the seven other GFIs.31

We are of the opinion that the provisions of RA 9443 may not be applied to the present case as to cure the lack of
signature of the Director of Lands and approval by the Secretary of Agriculture and Natural Resources in Sale Certificate
No. 1054.

The Court has explained the nature of equal protection guarantee in this manner:

The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit legislation which is limited either in the object to
which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it
merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges
conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons within such class, and reasonable grounds exist for
making a distinction between those who fall within such class and those who do not.32 (Emphasis and underscoring
supplied.)

Section 1 of RA 9443 provides:

Section 1. All existing Transfer Certificates of Title and Reconstituted Certificates of Title duly issued by the Register of
Deeds of Cebu Province and/or Cebu City covering any portion of the Banilad Friar Lands Estate, notwithstanding the lack
of signatures and/or approval of the then Secretary of the Interior (later Secretary of Agriculture and Natural Resources)
and/or the then Chief of the Bureau of Public Lands (later Director of Public Lands) in the copies of the duly executed Sale
Certificates and Assignments of Sales Certificates, as the case may be, now on file with the Community Environment and
Natural Resources Office (CENRO), Cebu City, are hereby confirmed and declared as valid titles and the registered
owners recognized as absolute owners thereof.

This confirmation and declaration of validity shall in all respects be entitled to like effect and credit as a decree of
registration, binding the land and quieting the title thereto and shall be conclusive upon and against all persons, including
the national government and al1 branches thereof; except when, in a given case involving a certificate of title or
areconstituted certificate of title, there is clear evidence that such certificate of title or reconstituted certificate of title was
obtained through fraud, in which case the solicitor general or his duly designated representative shall institute the
necessary judicial proceeding to cancel the certificate of title or reconstituted certificate of title as the case may be,
obtained through such fraud.(Emphasis supplied.)

Without ruling on the issue of violation of equal protection guarantee if the curative effect of RA 9443 is not made
applicable to all titled lands of the Piedad Estate, it is clear that the Manotoks cannot invoke this law to "confirm" and
validate their alleged title over Lot 823. It must be stressed that the existence and due issuance of TCT No. 22813 in the
name of Severino Manotok was not established by the evidence on record. There is likewise no copy of a "duly executed
certificate of sale" "on file" with the DENR regional office. In the absence of an existing certificate of title in the name of the
predecessor-in-interest of the Manotoks and certificate of sale on file with the DENR/CENRO, there is nothing to confirm
and validate through the application of RA 9443.

Moreover, RA 9443 expressly excludes from its coverage those cases involving certificates of title which were shown to
have been fraudulently or irregularly issued. As the reconstitution and remand proceedings in these cases revealed, the
Manotoks title to the subject friar land, just like the Barques and Manahans, is seriously flawed. The Court cannot allow
them now to invoke the benefit of confirmation and validation of ownership of friar lands under duly executed documents,
which they never had in the first place. Strict application by the courts of the mandatory provisions of the Friar Lands
Act is justified by the laudable policy behind its enactment -- to ensure that the lands acquired by the government would
go to the actual occupants and settlers who were given preference in their distribution.33

The dissent reiterates that the existence of Sale Certificate No. 1054 was clearly and convincingly established by the
original of Assignment of Sale Certificate No. 1054 dated May 4, 1923 between M. Teodoro and Severino Manotok as
assignors and Severino Manotok as assignee (approved by the Director of Lands on June 23, 1923), which is on file with
the LMB, as well as the Deed of Conveyance No. 29204 secured from the National Archives which is the repository of
government and official documents, the original of Official Receipt No. 675257 dated 20 February 1920 for certified copy
of Assignment of Sale Certificate No. 1054 on Lot 823 and the original of the Provincial Assessors declaration of title in
Severino Manotoks name for tax purposes on August 9, 1933 assessing him beginning with the year 1933. The dissent
further listed some of those alleged sale certificates, assignment deeds and deeds of conveyance either signed by the
Director of Lands only or unsigned by both Director of Lands and Secretary of Interior/Natural Resources, gathered by the
Manotoks from the LMB. It was stressed that if MO 16-05 is not applied to these huge tracts of land within and outside
Metro Manila, "[H]undreds of thousands, if not millions, of landowners would surely be dispossessed of their lands in
these areas," "a blow to the integrity of our Torrens system and the stability of land titles in this country."

The Court has thoroughly examined the evidence on record and exhaustively discussed the merits of the Manotoks
ownership claim over Lot 823, in the light of established precedents interpreting the provisions of the Friar Lands Act. The
dissent even accused the majority of mistakenly denigrating the records of the National Archives which, under R.A. No.
9470 enacted on May 21, 2007, is mandated to store and preserve "any public archive transferred to the National
Archives" and tasked with issuing certified true copies or certifications on public archives and for extracts thereof.

The Friar Lands Act mandated a system of recording all sale contracts to be implemented by the Director of Lands, which
has come to be known as the Friar Lands Sales Registry.

SEC. 6. The title, deeds and instruments of conveyance pertaining to the lands in each province, when executed and
delivered by said grantors to the Government and placed in the keeping of the Chief of the Bureau of Public Lands, as
above provided, shall be by him transmitted to the register of deeds of each province in which any part of said lands lies,
for registration in accordance with law. But before transmitting the title, deeds, and instruments of conveyance in
this section mentioned to the register of deeds of each province for registration, the Chief of the Bureau of Public
Lands shall record all such deeds and instruments at length in one or more books to be provided by him for that
purpose and retained in the Bureau of Public Lands, when duly certified by him shall be received in all courts of the
Philippine Islands as sufficient evidence of the contents of the instrument so recorded whenever it is not practicable to
produce the originals in court. (Section 1, Act No. 1287).

It is thus the primary duty of the Chief of the Bureau of Public Lands to record all these deeds and instruments in sales
registry books which shall be retained in the Bureau of Public Lands. Unfortunately, the LMB failed to produce the sales
registry book in court, which could have clearly shown the names of claimants, the particular lots and areas applied for,
the sale certificates issued and other pertinent information on the sale of friar lands within the Piedad Estate. Witness
Teresita J. Reyes, a retired Assistant Chief of the Records Management Division (RMD), LMB who was presented by the
Manahans, testified that when the LMB was decentralized, the sales registry books pertaining to friar lands were
supposedly turned over to the regional offices. These consisted of copies of the appropriate pages of the sales registry
books in the LMB RMD main office which has an inventory of lots subject of deeds of conveyance and sales certificates.
However, Reyes said that the sales registry book itself is no longer with the RMD. On the other hand, the alleged affidavit
of Secretary Defensor dated November 11, 2010 states that MO 16-05 was intended to address situations when deeds of
conveyance lacked the signature of the Secretary of Agriculture and Commerce, or such deeds or records from which the
Secretarys signature or approval may be verified were lost or unavailable.

Whether the friar lands registry book is still available in the LMB or properly turned over to the regional offices remains
unclear. With the statutorily prescribed record-keeping of sales of friar lands apparently in disarray, it behooves on the
courts to be more judicious in settling conflicting claims over friar lands. Titles with serious flaws must still be carefully
scrutinized in each case. Thus, we find that the approach in Alonso remains as the more rational and prudent course than
the wholesale ratification introduced by MO 16-05. 1wphi1

The prospect of litigants losing friar lands they have possessed for years or decades had never deterred courts from
upholding the stringent requirements of the law for a valid acquisition of these lands. The courts duty is to apply the law.
Petitioners concern for other landowners which may be similarly affected by our ruling is, without doubt, a legitimate one.
The remedy though lies elsewhere -- in the legislature, as what R.A. 9443 sought to rectify.

WHEREFORE, the present motions for reconsideration are all hereby DENIED withFINALITY.The motions for oral
arguments and further reception of evidence are likewise DENIED.

Let entry of judgment be made in due course.

SO ORDERED.
G.R. No. 159941 August 17, 2011

HEIRS OF SPOUSES TEOFILO M. RETERTA and ELISA RETERTA, namely: EDUARDO M. RETERTA, CONSUELO
M. RETERTA, and AVELINA M. RETERTA, Petitioners,
vs.
SPOUSES LORENZO MORES and VIRGINIA LOPEZ, Respondents.

DECISION

BERSAMIN, J.:

The original and exclusive jurisdiction over a complaint for quieting of title and reconveyance involving friar land belongs
to either the Regional Trial Court (RTC) or the Municipal Trial Court (MTC). Hence, the dismissal of such a complaint on
the ground of lack of jurisdiction due to the land in litis being friar land under the exclusive jurisdiction of the Land
Management Bureau (LMB) amounts to manifest grave abuse of discretion that can be corrected through certiorari.

The petitioners, whose complaint for quieting of title and reconveyance the RTC had dismissed, had challenged the
dismissal by petition for certiorari, but the Court of Appeals (CA) dismissed their petition on the ground that certiorari was
not a substitute for an appeal, the proper recourse against the dismissal. They now appeal that ruling of the CA
promulgated on April 25, 2003.1

Antecedents

On May 2, 2000, the petitioners commenced an action for quieting of title and reconveyance in the RTC in Trece Martires
City (Civil Case No. TM-983),2 averring that they were the true and real owners of the parcel of land (the land) situated in
Trez Cruzes, Tanza, Cavite, containing an area of 47,708 square meters, having inherited the land from their father who
had died on July 11, 1983; that their late father had been the grantee of the land by virtue of his occupation and
cultivation; that their late father and his predecessors in interest had been in open, exclusive, notorious, and continuous
possession of the land for more than 30 years; that they had discovered in 1999 an affidavit dated March 1, 1966 that
their father had purportedly executed whereby he had waived his rights, interests, and participation in the land; that by
virtue of the affidavit, Sales Certificate No. V-769 had been issued in favor of respondent Lorenzo Mores by the then
Department of Agriculture and Natural Resources; and that Transfer Certificate of Title No. T-64071 had later issued to
the respondents.

On August 1, 2000, the respondents, as defendants, filed a motion to dismiss, insisting that the RTC had no jurisdiction to
take cognizance of Civil Case No. TM-983 due to the land being friar land, and that the petitioners had no legal
personality to commence Civil Case No. TM-983.

On October 29, 2001, the RTC granted the motion to dismiss, holding:3

Considering that plaintiffs in this case sought the review of the propriety of the grant of lot 2938 of the Sta. Cruz de
Malabon Friar Lands Estate by the Lands Management Bureau of the defendant Lorenzo Mores through the use of the
forged Affidavit and Sales Certificate No. V-769 which eventually led to the issuance of T.C.T. No. T-64071 to defendant
Lorenzo Mores and wife Virginia Mores, and considering further that the land subject of this case is a friar land and not
land of the public domain, consequently Act No. 1120 is the law prevailing on the matter which gives to the Director of
Lands the exclusive administration and disposition of Friar Lands. More so, the determination whether or not fraud had
been committed in the procurement of the sales certificate rests to the exclusive power of the Director of Lands. Hence
this Court is of the opinion that it has no jurisdiction over the nature of this action. On the second ground relied upon by
the defendants in their Motion To Dismiss, suffice it to state that the Court deemed not to discuss the same.

IN VIEW OF THE FOREGOING, let this instant case be dismissed as it is hereby dismissed.

SO ORDERED.

The petitioners then timely filed a motion for reconsideration, but the RTC denied their motion for reconsideration on
February 21, 2002.4

On May 15, 2002, therefore, the petitioners assailed the dismissal via petition for certiorari, but the CA dismissed the
petition on April 25, 2003, holding: 5

Thus, the basic requisite for the special civil action of certiorari to lie is that there is no appeal, nor any plain, speedy and
adequate remedy in the ordinary course of law.

In the case at bench, when the court rendered the assailed decision, the remedy of the petitioners was to have appealed
the same to this Court. But petitioners did not. Instead they filed the present special civil action for certiorari on May 15,
2002 after the decision of the court a quo has become final.

The Order dismissing the case was issued by the court a quo on 29 October 2001, which Order was received by the
petitioners on November 16, 2001. Petitioners filed a motion for reconsideration dated November 26, 2001 but the same
was denied by the court a quo on 21 February 2002. The Order denying the motion for reconsideration was received by
the petitioners on 20 March 2002.

Petitioners filed this petition for certiorari on May 15, 2002. Certiorari, however cannot be used as a substitute for the lost
remedy of appeal.

In Bernardo vs. Court of Appeals, 275 SCRA 423, the Supreme Court had the following to say:

"We have time and again reminded members of the bench and bar that a special civil action for certiorari under Rule 65
lies only when "there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law." Certiorari cannot
be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy, certiorari not being a
substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive."

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.

SO ORDERED.

On September 9, 2003, the CA denied the petitioners motion for reconsideration.6

Hence, this appeal.

Issues

The petitioners submit that:

I.

IT IS REVERSIBLE ERROR OF THE HONORABLE COURT OF APPEALS TO DISREGARD THE PROVISIONS OF

SECTION 1, RULE 41, SECOND PARAGRAPH, SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997 RULES OF
COURT;

II.

IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS TO APPLY THE RULING IN THE CASE OF
ROSETE vs. COURT OF APPEALS, 339 SCRA 193, 199, NOTWITHSTANDING THE FACT THAT THE 1997 RULES OF
CIVIL PROCEDURE ALREADY TOOK EFFECT ON JULY 1, 1997.
 III.

IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS IN NOT FINDING THAT THE TRIAL
JUDGE GRAVELY ABUSED ITS DISCRETION WHEN IT DISMISSED THE COMPLAINT RULING THAT IT HAS NO
JURISDICTION OVER THE NATURE OF THE ACTION, AND IN NOT FINDING THAT THE TRIAL JUDGE HAS
JURISDICTION OVER THE SAME.7

Briefly stated, the issue is whether or not the CA erred in dismissing the petition for certiorari.

Ruling

The appeal is meritorious.

1.

Propriety of certiorari as remedy

against dismissal of the action

The CA seems to be correct in dismissing the petition for certiorari, considering that the order granting the respondents
motion to dismiss was a final, as distinguished from an interlocutory, order against which the proper remedy was an
appeal in due course. Certiorari, as an extraordinary remedy, is not substitute for appeal due to its being availed of only
when there is no appeal, or plain, speedy and adequate remedy in the ordinary course of law. 8

Nonetheless, the petitioners posit that a special civil action for certiorari was their proper remedy to assail the order of
dismissal in light of certain rules of procedure, specifically pointing out that the second paragraph of Section 1 of Rule 37
of the Rules of Court ("An order denying a motion for new trial or reconsideration is not appealable, the remedy being an
appeal from the judgment or final order") prohibited an appeal of a denial of the motion for reconsideration, and that the
second paragraph of Section 1 of Rule 41 of the Rules of Court ( "No appeal may be taken from: xxx An order denying a
motion for new trial or reconsideration") expressly declared that an order denying a motion for reconsideration was not
appealable. They remind that the third paragraph of Section 1 of Rule 41 expressly provided that in the instances "where
the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule
65."

The petitioners position has no basis.

For one, the order that the petitioners really wanted to obtain relief from was the order granting the respondents motion to
dismiss, not the denial of the motion for reconsideration. The fact that the order granting the motion to dismiss was a final
order for thereby completely disposing of the case, leaving nothing more for the trial court to do in the action, truly called
for an appeal, instead of certiorari, as the correct remedy.

The fundamental distinction between a final judgment or order, on one hand, and an interlocutory order, on the other
hand, has been outlined in Investments, Inc. v. Court of Appeals, 9 viz:

The concept of final judgment, as distinguished from one which has become final (or executory as of right [final and
executory]), is definite and settled. A final judgment or order is one that finally disposes of a case, leaving nothing more
to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence
presented at the trial declares categorically what the rights and obligations of the parties are and which party is in the
right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once
rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the
litigants is concerned. Nothing more remains to be done by the Court except to await the parties next move (which among
others, may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of
course, to cause the execution of the judgment once it becomes final or, to use the established and more distinctive
term, final and executory.

xxx

Conversely, an order that does not finally dispose of the case, and does not end the Courts task of adjudicating the
parties contentions and determining their rights and liabilities as regards each other, but obviously indicates that other
things remain to be done by the Court, is interlocutory, e.g., an order denying a motion to dismiss under Rule 16 of the
Rules, or granting a motion for extension of time to file a pleading, or authorizing amendment thereof, or granting or
denying applications for postponement, or production or inspection of documents or things, etc. Unlike a final judgment
or order, which is appealable, as above pointed out, an interlocutory order may not be questioned on appeal except only
as part of an appeal that may eventually be taken from the final judgment rendered in the case.

Moreover, even Section 9 of Rule 37 of the Rules of Court, cited by the petitioners, indicates that the proper remedy
against the denial of the petitioners motion for reconsideration was an appeal from the final order dismissing the action
upon the respondents motion to dismiss. The said rule explicitly states thusly:

Section 9. Remedy against order denying a motion for new trial or reconsideration. An order denying a motion for new
trial or reconsideration is not appealable, the remedy being an appeal from the judgment or final order.

The restriction against an appeal of a denial of a motion for reconsideration independently of a judgment or final order is
logical and reasonable. A motion for reconsideration is not putting forward a new issue, or presenting new evidence, or
changing the theory of the case, but is only seeking a reconsideration of the judgment or final order based on the same
issues, contentions, and evidence either because: (a) the damages awarded are excessive; or (b) the evidence is
insufficient to justify the decision or final order; or (c) the decision or final order is contrary to law. 10 By denying a motion
for reconsideration, or by granting it only partially, therefore, a trial court finds no reason either to reverse or to modify its
judgment or final order, and leaves the judgment or final order to stand. The remedy from the denial is to assail the denial
in the course of an appeal of the judgment or final order itself.

The enumeration of the orders that were not appealable made in the 1997 version of Section 1, Rule 41 of the Rules of
Court the version in force at the time when the CA rendered its assailed decision on May 15, 2002 included an order
denying a motion for new trial or motion for reconsideration, to wit:

Section 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the
case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

(a) An order denying a motion for new trial or reconsideration;

(b) An order denying a petition for relief or any similar motion seeking relief from judgment;

(c) An interlocutory order;

(d) An order disallowing or dismissing an appeal;

(e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of
fraud, mistake or duress, or any other ground vitiating consent;

(f) An order of execution;

(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims,
cross-claims and third-party complaints, while the main case is pending, unless the court allows an appeal
therefrom; and

(h) An order dismissing an action without prejudice.

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate
special civil action under Rule 65. (n)

It is true that Administrative Matter No. 07-7-12-SC, effective December 27, 2007, has since amended Section 1, Rule 41,
supra, by deleting an order denying a motion for new trial or motion for reconsideration from the enumeration of non-
appealable orders, and that such a revision of a procedural rule may be retroactively applied. However, to reverse the CA
on that basis would not be right and proper, simply because the CA correctly applied the rule of procedure in force at the
time when it issued its assailed final order.
 2.

RTC or MTC has jurisdiction over the action

The settled rule precluding certiorari as a remedy against the final order when appeal is available notwithstanding, the
Court rules that the CA should have given due course to and granted the petition for certiorari for two exceptional reasons,
namely: (a) the broader interest of justice demanded that certiorari be given due course to avoid the undeserved grossly
unjust result that would befall the petitioners otherwise; and (b) the order of the RTC granting the motion to dismiss on
ground of lack of jurisdiction over the subject matter evidently constituted grave abuse of discretion amounting to excess
of jurisdiction.

On occasion, the Court has considered certiorari as the proper remedy despite the availability of appeal, or other remedy
in the ordinary course of law. In Francisco Motors Corporation v. Court of Appeals, 11 the Court has declared that the
requirement that there must be no appeal, or any plain speedy and adequate remedy in the ordinary course of law admits
of exceptions, such as: (a) when it is necessary to prevent irreparable damages and injury to a party; (b) where the trial
judge capriciously and whimsically exercised his judgment; (c) where there may be danger of a failure of justice; (d) where
an appeal would be slow, inadequate, and insufficient; (e) where the issue raised is one purely of law; (f) where public
interest is involved; and (g) in case of urgency.

Specifically, the Court has held that the availability of appeal as a remedy does not constitute sufficient ground to prevent
or preclude a party from making use of certiorari if appeal is not an adequate remedy, or an equally beneficial, or speedy
remedy. It is inadequacy, not the mere absence of all other legal remedies and the danger of failure of justice without the
writ, that must usually determine the propriety of certiorari.12 A remedy is plain, speedy and adequate if it will promptly
relieve the petitioner from the injurious effects of the judgment, order, or resolution of the lower court or agency.13 It is
understood, then, that a litigant need not mark time by resorting to the less speedy remedy of appeal in order to have an
order annulled and set aside for being patently void for failure of the trial court to comply with the Rules of Court. 14

Nor should the petitioner be denied the recourse despite certiorari not being available as a proper remedy against an
assailed order, because it is better on balance to look beyond procedural requirements and to overcome the ordinary
disinclination to exercise supervisory powers in order that a void order of a lower court may be controlled to make it
conformable to law and justice.15 Verily, the instances in which certiorari will issue cannot be defined, because to do so is
to destroy the comprehensiveness and usefulness of the extraordinary writ. The wide breadth and range of the discretion
of the court are such that authority is not wanting to show that certiorari is more discretionary than either prohibition or
mandamus, and that in the exercise of superintending control over inferior courts, a superior court is to be guided by all
the circumstances of each particular case "as the ends of justice may require." Thus, the writ will be granted whenever
necessary to prevent a substantial wrong or to do substantial justice. 16

The petitioners complaint self-styled as being for the "quieting of title and reconveyance, declaration of nullity of affidavit
& Sales Certificate, reconveyance and damages" would challenge the efficacy of the respondents certificate of title
under the theory that there had been no valid transfer or assignment from the petitioners predecessor in interest to the
respondents of the rights or interests in the land due to the affidavit assigning such rights and interests being a forgery
and procured by fraud.

The petitioners cause of action for reconveyance has support in jurisprudence bearing upon the manner by which to
establish a right in a piece of friar land. According to Arayata v. Joya,17 in order that a transfer of the rights of a holder of a
certificate of sale of friar lands may be legally effective, it is necessary that a formal certificate of transfer be drawn up and
submitted to the Chief of the Bureau of Public Lands for his approval and registration. The law authorizes no other way of
transferring the rights of a holder of a certificate of sale of friar lands. In other words, where a person considered as a
grantee of a piece of friar land transfers his rights thereon, such transfer must conform to certain requirements of the law.
Under Director of Lands v. Rizal,18 the purchaser in the sale of friar lands under Act No. 1120 is already treated by law as
the actual owner of the lot purchased even before the payment of the full payment price and before the execution of the
final deed of conveyance, subject to the obligation to pay in full the purchase price, the role or position of the Government
becoming that of a mere lien holder or mortgagee.19

Thus, pursuant to Section 16 of Act No. 1120,20 had grantee Teofilo Reterta perfected his title, the petitioners as his heirs
would have succeeded him and taken title from him upon his death. By law, therefore, should the execution of the deed in
favor of the respondents be held invalid, the interests of Teofilo Reterta should descend to the petitioners and the deed
should issue in their favor. Adding significance to the petitioners claim was their allegation in the complaint that they were
in possession of the land. Moreover, as alleged in the petitioners opposition to the motion to dismiss of the respondents,
Teofilo Reterta had partially paid the price of the land.21
Given the foregoing, the petitioners complaint made out a good case for reconveyance or reversion, and its allegations, if
duly established, might well warrant the reconveyance of the land from the respondents to the petitioners. It did not matter
that the respondents already held a certificate of title in their names. In essence, an action for reconveyance respects the
incontrovertibility of the decree of registration but seeks the transfer of the property to its rightful and legal owner on the
ground of its having been fraudulently or mistakenly registered in another persons name. There is no special ground for
an action for reconveyance, for it is enough that the aggrieved party asserts a legal claim in the property superior to the
claim of the registered owner, and that the property has not yet passed to the hands of an innocent purchaser for
value.22 On this score, it is also worthy to stress that the title of a piece of a friar land obtained by a grantee from the
Government without conforming with the requirements set by the law may be assailed and nullified.

Was the petitioners action for reconveyance within the jurisdiction of the regular court?

We answer the query in the affirmative.

The law governing jurisdiction is Section 19 (2) of Batas Pambansa Blg. 129, 23 as amended by Republic Act No.
7691,24 which provides:

Section 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive original jurisdiction: xxx

xxx

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed
value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where
such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands
or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts;

xxx

Conformably with the provision, because an action for reconveyance or to remove a cloud on ones title involves the title
to, or possession of, real property, or any interest therein, exclusive original jurisdiction over such action pertained to the
RTC, unless the assessed value of the property did not exceed P20,000.00 (in which instance the MTC having territorial
jurisdiction would have exclusive original jurisdiction). Determinative of which regular court had jurisdiction would be the
allegations of the complaint (on the assessed value of the property) and the principal relief thereby sought. 25

The respondents reliance on Section 12 and Section 18 of Act No. 1120 to sustain their position that the Bureau of Public
Lands (now LMB) instead had exclusive jurisdiction was without basis. The provisions read:

Section 12. xxx the Chief of the Bureau of Public Lands shall give the said settler and occupant a certificate which shall
set forth in detail that the Government has agreed to sell to such settler and occupant the amount of land so held by him,
at the price so fixed, payable as provided in this Act at the office of the Chief of Bureau of Public Lands xxx and that upon
the payment of the final installment together with all accrued interest the Government will convey to such settler and
occupant the said land so held by him by proper instrument of conveyance, which shall be issued and become effective in
the manner provided in section one hundred and twenty-two of the Land Registration Act xxx.

Section 18. No lease or sale made by Chief of the Bureau of Public Lands under the provisions of this Act shall be valid
until approved by the Secretary of the Interior.1awphi1

As the provisions indicate, the authority of LMB under Act No. 1120, being limited to the administration and disposition of
friar lands, did not include the petitioners action for reconveyance. LMB ceases to have jurisdiction once the friar land is
disposed of in favor of a private person and title duly issues in the latters name. By ignoring the petitioners showing of its
plain error in dismissing Civil Case No. TM-983, and by disregarding the allegations of the complaint, the RTC acted
whimsically and capriciously.

Given all the foregoing, the RTC committed grave abuse of discretion amounting to lack of jurisdiction. The term grave
abuse of discretion connotes whimsical and capricious exercise of judgment as is equivalent to excess, or lack of
jurisdiction.26 The abuse must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal
to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary
and despotic manner by reason of passion or hostility. 27
The dismissal of Civil Case No. TM-983, unless undone, would leave the petitioners bereft of any remedy to protect their
substantial rights or interests in the land. As such, they would suffer grave injustice and irreparable damage. In that
situation, the RTCs dismissal should be annulled through certiorari, for the task of the remedy was to do justice to the
unjustly aggrieved.28

WHEREFORE, the Court grants the petition for certiorari; sets aside the decision the Court of Appeals promulgated on
April 25, 2003; and directs Branch 23 of the Regional Trial Court in Trece Martires City to resume the proceedings in Civil
Case No. TM-983 with dispatch.

The respondents shall pay the costs of suit.

SO ORDERED.

G.R. No. 154080 January 22, 2008

NELSIE B. CAETE, RONA ANAS, MILAGROSA APUAN, ERLINDA AQUINO, GODOFREDO AQUINO, CORITA
BARREDO, TESSIE BARREDO, JESUS BATRINA, ALBERTO BUENAVENTURA, BONIFACIO BUENAVENTURA,
EUSEBIO CAPIRAL, MARIO CAPIRAL, LOLITA CAPIRAL, ELENA CAPIRAL, LETICIA CAPIRAL, RENATO
CAPIRAL, ELY CABANGON, ERWIN CATALUNA, JESSIE CONRADO, JOEL CONRADO, NARCISIO CONRADO,
RICARDO CALAMPIANO, ALUMNIO CORSANES, NILO COLATOY, MARJETO DAYAN, HENRY DIAZ, SALVACION
ESMANDE, REYNALDO FUENTEBELLA, GERRY GEQUILLANA, DELSIE GARCIA, NERISSA GONZALES,
VISITACION JUNSAY, ESTELA JOVEN, JOSE LANZUELA, MARLON MALANGAYON, RENATO MARCELO, ANITA
MARZONIA, MARCELINO MONTALBO, AMADO MULI, JR., LEONITA MULI, EDUARDO OLVIDO, ALMARIO PACON,
ASUNCION PACON, SALVACION PAGAYUNAN, ESTER PANTALEON, SHERLITA RABE, ANITA REYES,
MEDELYN RIOS, BERTITO RIVAS, ENGRACIA RIVERA, GERALYN RIVERA, ARMANDO RIVERA, MA. MERCY
SHERVA, ALEXANDER SANGALAN, ERNESTO SANTIAGO, JOY SANTIAGO, ELENA TALION, JOE RANDY
TRESVALLES, ELIAS VALENZUELA, GERRY VALENZUELA, LILIBETH VALENZUELA, JOSEPHINE VICTORINO,
JOJO VICTORINO, MAXIMINO VICTORINO, NOEL VICTORINO, REYNANTE VICTORINO, ROBERTO VICTORINO
and JOVITO VILLAREAL, represented by NELSIE B. CAETE, petitioners,
vs.
GENUINO ICE COMPANY, INC., respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari seeks to set aside the Decision1 of the Court of Appeals dated January 9, 2002 in CA-
G.R. SP No. 64337 entitled "Genuino Ice Company, Inc. vs. Hon. Victorino P. Evangelista, Nelsie B. Caete, et al.," and
its Resolution2 dated June 26, 2002, dismissing petitioners "Second Amended Complaint" in Civil Case No. Q-99-36483
filed in Branch 223 of the Regional Trial Court of Quezon City.

Records show that on January 11, 1999, petitioners filed a complaint for cancellation of title to property covered by
Transfer Certificate of Title (TCT) Nos. N-140441;3 14399;4 RT-94384 (292245);5 RT-94794 (292246);6 and
292247.7 Petitioners alleged that said titles are spurious, fictitious and were issued "under mysterious circumstances,"
considering that the holders thereof including their predecessors-in-interest were never in actual, adverse and physical
possession of the property, rendering them ineligible to acquire title to the said property under the Friar Lands
Act.8 Petitioners also sought to nullify Original Certificate of Title (OCT) No. 614 from which the foregoing titles sought to
be cancelled originated or were derived.

Respondent Genuino Ice Co., Inc. filed a motion to dismiss 9 on the ground that the complaint states no cause of action
because petitioners are not real parties-in-interest; that no relief may be granted as a matter of law; and that petitioners
failed to exhaust administrative remedies, but it was denied by the trial court. Respondent moved for reconsideration but
the same was denied.

On November 4, 1999, petitioners filed a "Second Amended Complaint"10 which sought to annul, in addition to the titles
already alleged in the original complaint, TCT Nos. 274095 and 274096;11 274097 and 274098;12 and 274099.13

The Second Amended the Complaint alleged the following causes of action, as well as the remedy sought to be obtained,
thus:
 4. That plaintiffs (petitioners) and their predecessors-in-interest are among those who have been in actual,
adverse, peaceful and continuous possession in concept of owners of unregistered parcels of land situated at
Sitio Mabilog, Barangay Culiat, Quezon City, Metro Manila, which parcels of land are more particularly described
as follows:

(1) "A parcel of unregistered land known as Lot 668, situated at Barangay Culiat, Quezon City x x x."

(2) "A parcel of unregistered land known as Lot 669, situated at Barangay Culiat, Quezon City x x x."

5. That the above-described real property is a portion of a friar land known as "Piedad Estate," which property is
intended for distribution among the bona fide occupants thereof pursuant to the Friar Lands Act.

6. That transfer certificates of title allegedly having originated or derived from Original Certificate of Title No. 614
were issued by the Register of Deeds of Quezon City, which transfer certificates of title are in truth and in fact
fictitious, spurious and null and void, for the following reasons: (a) that no record of any agency of the government
shows as to how and in what manner was OCT 614 issued; (b) that no record of any proceedings whatsoever,
whether judicial or administrative, can support defendants claim that the above-described property originated
from OCT 614; and (c) that the transfer certificates of title over the above-described property were issued under
mysterious circumstances for the above-named defendants and their so-called predecessors-in-interest never
had any actual, adverse, physical possession of the said property, thus, not allowed to acquire title over the
property in litigation pursuant to the Friar Lands Act.

7. That defendants are holders of transfer certificates of title of the above-described property, which transfer
certificates of title are null and void, for reasons specifically mentioned in Paragraph 6 hereof x x x;

8. That the acts in acquiring and keeping the said transfer certificates of title in violation of the Friar Lands Act and
other existing laws are prejudicial to plaintiffs rights over the above-described property.

9. That equity demands that defendants transfer certificates of title as specified in Paragraph 7 hereof be
declared fictitious, spurious and null and void ab initio.

PRAYER

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that judgment be
rendered in favor of plaintiffs and against defendants:

(1) Declaring as null and void ab initio OCT 614 and all transfer certificates of title derived therefrom;

(2) Declaring as null and void defendants transfer certificates of title over the property in litigation;

(3) Ordering defendant Register of Deeds of Quezon City to cancel defendants transfer certificates of title and all
transfer certificates of title derived therefrom;

(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the provisions of the
Friar Lands Act and other existing laws.14

Respondent moved to dismiss the Second Amended Complaint on the following grounds:

a) The complaint states no cause of action because: (1) on the allegations alone, plaintiffs (petitioners) are not
real parties in interest who may bring suit to cancel defendants (including respondent) titles; (2) based on the
allegations and prayer of the complaint, no relief, as a matter of law, may be granted;

b) Prescription has set in;

c) There are earlier similar complaints (Civil Case Nos. Q-95-22834 and Q-95-23111) filed by a different set of
plaintiffs against a different set of defendants but which involve the same subject matter, cause of action and
allegations of the plaintiffs, with respect to the cancellation of OCT 614 and succeeding titles derived from it. Said
 complaints have since been dismissed by Branch 93 of the Regional Trial Court of Quezon City, the dismissal of
which is the subject of a pending certiorari proceeding in the appellate court. 15

On January 3, 2001,16 the trial court denied respondents motion to dismiss the Second Amended Complaint. Its motion
for reconsideration was likewise denied hence respondent filed a petition for certiorari with the Court of Appeals.

The appellate court granted respondents petition for certiorari and dismissed petitioners Second Amended Complaint for
failure to state a cause of action. Hence, the instant petition raising the following issues:

A. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE COMPLAINT FILED BY THE
PETITIONERS WITH THE REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL CASE NO. Q-99-36483
DOES NOT STATE A VALID CAUSE OF ACTION;

B. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE PETITIONERS ARE NOT REAL
PARTIES IN INTEREST;

C. THAT THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF "EXHAUSTION OF

ADMINISTRATIVE REMEDIES"; and,

D. THAT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND DENIED
PETITIONERS RIGHT TO DUE PROCESS WHEN IT DISMISSED THEIR COMPLAINT.17

We deny the petition.

The subject lots are part of the Piedad Estate, Quezon City, a Friar Land acquired on December 23, 1903 by the
Philippine Government from the Philippine Sugar Estates Development Company, Ltd., La Sociedad Agricola de Ultramar,
the British-Manila Estate Company, Ltd., and the Recoleto Order of the Philippine Islands, as indicated in Public Act No.
1120 (Friar Lands Act) enacted on April 26, 1904.18

After the Piedad Estate was registered in OCT No. 614 in the name of the Philippine Government in 1910 under the
provisions of Act 496, the area was subdivided originally into 874 lots. As a result of subsequent surveys executed in the
course of disposition, the number of lots increased to 1,305. Disposition of these lots was made by the Bureau of Lands
thru sales, under the Friar Lands Act, as early as 1910 and records show that even before the Second World War, all lots
in the Piedad Estate have been disposed of.19 The Piedad Estate has long been segregated from the mass of the public
domain and has become private land duly registered under the Torrens system following the procedure for the
confirmation of private lands prescribed in Act 496. Thus the lands inside the Piedad Estate are no longer lands of the
public domain.20

One who acquires land under the Friar Lands Act, as well as his successors-in-interest, may not claim successional rights
to purchase by reason of occupation from time immemorial, as this contravenes the historical fact that friar lands were
bought by the Government of the Philippine Islands, pursuant to an Act of Congress of the United States, approved on
July 1, 1902, not from individual persons but from certain companies, a society and a religious order. Under the Friar
Lands Act, only "actual settlers and occupants at the time said lands are acquired by the Government" were given
preference to lease, purchase, or acquire their holdings, in disregard of the settlement and occupation of persons before
the government acquired the lands. 21

The basic rules of proper pleading and procedure require that every pleading shall contain in a methodical and logical
form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense,
as the case may be, omitting the statement of mere evidentiary facts.22 And in all averments of fraud or mistake, the
circumstances constituting fraud or mistake must be stated with particularity. 23

It is axiomatic that the averments of the complaint determine the nature of the action, and consequently, the
jurisdiction of the courts. This is because the complaint must contain a concise statement of the ultimate facts
constituting the plaintiff's cause of action and must specify the relief sought. No rule is better established than that
which requires the complaint to contain a statement of all the facts constituting the plaintiff's cause of action.
Additionally, Section 5, Rule 8 of the Rules of Court provides that in all averments of fraud or mistake, the
circumstances constituting fraud or mistake must be stated with particularity. In the case at bar, while there are
allegations of fraud in the above quoted complaints, the same are not particular enough to bring the controversy
within the SEC's jurisdiction. The said allegations are not statements of ultimate facts but are mere conclusions of
law.
 A pleading should state the ultimate facts essential to the rights of action or defense asserted, as distinguished
from mere conclusions of fact, or conclusions of law. General allegations that a contract is valid or legal, or is just,
fair and reasonable, are mere conclusions of law. Likewise, allegations that a contract is void, voidable, invalid,
illegal, ultra vires, or against public policy, without stating facts showing its invalidity, are mere conclusions of
law.24

"Ultimate facts" means the essential facts constituting the plaintiff's cause of action, or such facts as are so essential that
they cannot be stricken out without leaving the statement of the cause of action inadequate. 25"Cause of action" has been
defined as an act or omission of one party in violation of the legal right or rights of the other; 26 and its essential elements
are: 1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2) an obligation on
the part of the named defendant to respect or not to violate such right; and 3) an act or omission on the part of the named
defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which
the latter may maintain an action for recovery of damages. If these elements are not extant, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to state a cause of action.27 In the resolution of a motion to
dismiss based on failure to state a cause of action, only the facts alleged in the complaint as well as its annexes must be
considered.28 The test in such case is whether a court can render a valid judgment on the complaint based upon the facts
alleged and pursuant to the prayer therein.29

Corollarily, the question of whether or not a complaint states a cause of action against a defendant or the action is
premature is one of law. The trial court can consider all the pleadings filed, including annexes, motions and the evidence
on record. However in so doing, the trial court does not rule on the truth or falsity of such documents. It merely includes
such documents in the hypothetical admission. Any review of a finding of lack of cause of action based on these
documents would not involve a calibration of the probative value of such pieces of evidence but would only limit itself to
the inquiry of whether the law was properly applied given the facts and these supporting documents. Therefore, what
would inevitably arise from such a review are pure questions of law, and not questions of fact.

The trial court must likewise apply relevant statutes and jurisprudence in determining whether the allegations in a
complaint establish a cause of action. While it focuses on the complaint, a court clearly cannot disregard decisions
material to the proper appreciation of the questions before it. In resolving a motion to dismiss, every court must take
cognizance of decisions this Court has rendered because they are proper subjects of mandatory judicial notice. The said
decisions, more importantly, form part of the legal system, and failure of any court to apply them shall constitute an
abdication of its duty to resolve a dispute in accordance with law, and shall be a ground for administrative action against
an inferior court magistrate.30

Considering the foregoing, it is not difficult to see the need for particularity and incipient substantiation in the petitioners
Second Amended Complaint.

First, their initial claim that OCT 614 of which all the other subject titles are derivatives is null and void, has been
proven wrong. As has been held in Pinlac and other cases, OCT 614 did legally exist and was previously issued in the
name of the Philippine Government in 1910 under the provisions of Act 496.

Second, the Ad Hoc Committee of the then Ministry of Natural Resources, which was specifically tasked to investigate the
historical background of the Piedad Estate, found that as early as the period prior to the Second World War, all lots in the
Piedad Estate had already been disposed of.

Third, the Piedad Estate has been placed under the Torrens system of land registration, which means that all lots therein
are titled.

Fourth, as held in the Balicudiong case, one who acquires land under the Friar Lands Act, as well as his successors-in-
interest, may not claim successional rights to purchase by reason of occupation from time immemorial, which means that
petitioners claimed actual, adverse, peaceful and continuous possession of the subject property is really of no moment
unless it is shown that their predecessors-in-interest were actual settlers and occupants at the time said lands were
acquired by the Government, and whose rights were not disregarded even though they were in occupation of the same
before the government acquired the land; yet, no period of time in relation to adverse possession is alleged.

Petitioners Second Amended Complaint betrays no more than an incomplete narration of facts unsupported by
documentary or other exhibits; the allegations therein partake of conclusions of law unsupported by a particular averment
of circumstances that will show why or how such inferences or conclusions were arrived at. It is replete with sweeping
generalizations and inferences derived from facts that are not found therein. While there are allegations of fraud upon the
claim that the subject titles were fictitious, spurious and obtained under "mysterious circumstances," the same are not
specific to bring the controversy within the trial courts jurisdiction. There is no explanation or narration of facts as would
show why said titles are claimed to be fictitious or spurious, contrary to the requirement of the Rules that the
circumstances constituting fraud must be stated with particularity; otherwise, the allegation of fraud would simply be an
unfounded conclusion of law. In the absence of specific averments, the complaint is defective, for it presents no basis
upon which the court should act, or for the defendant to meet it with an intelligent answer.

As to the second issue raised, petitioners claim that they are bona fide occupants of the subject property within the
contemplation of the Friar Lands Act, having allegedly been in actual, adverse, peaceful and continuous possession of the
property, although it is not stated for how long and since when. In their second amended complaint, they seek judgment

(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the provisions of the
Friar Lands Act and other existing laws. (Emphasis supplied)

They do not pray to be declared owners of the subject property despite their alleged adverse possession but only to
be adjudged as the "bona fide occupants" thereof. In other words, petitioners concede the States ownership of the
property.

Being so, petitioners may not be considered the real parties in interest for the purpose of maintaining the suit for
cancellation of the subject titles. The Court of Appeals is correct in declaring that only the State, through the Solicitor
General, may institute such suit. Jurisprudence on the matter has been settled and the issue need not be belabored. Thus

The Court also holds that private respondents are not the proper parties to initiate the present suit. The complaint,
praying as it did for the cancellation of the transfer certificates of title of petitioners on the ground that they were
derived from a "spurious" OCT No. 4216, assailed in effect the validity of said title. While private respondents did
not pray for the reversion of the land to the government, we agree with the petitioners that the prayer in the
complaint will have the same result of reverting the land to the government under the Regalian doctrine. Gabila
vs. Barriga ruled that only the government is entitled to this relief. The Court in that case held:

"The present motion to dismiss is actually predicated on Section 1(g), Rule 16 of the Revised Rules of
Court, i.e., failure of the complaint to state a cause of action, for it alleges in paragraph 12 thereof that the
plaintiff admits that he has no right to demand the cancellation or amendment of the defendants title,
because, even if the said title were canceled or amended, the ownership of the land embraced therein, or
of the portion thereof affected by the amendment, would revert to the public domain. In his amended
complaint the plaintiff makes no pretense at all that any part of the land covered by the defendants title
was privately owned by him or by his predecessors-in-interest. Indeed, it is admitted therein that the said
land was at all times a part of the public domain until December 18, 1964, when the government issued a
title thereon in favor of defendant. Thus, if there is any person or entity to relief, it can only be the
government.

In the case at bar, the plaintiffs own averments negate the existence of such right, for it would appear therefrom
that whatever right might have been violated by the defendant belonged to the government, not to the plaintiff.
Plaintiff-appellant argues that although his complaint is captioned as one for cancellation of title, he has
nevertheless stated therein several causes of action based on his alleged rights of possession and ownership
over the improvements, on defendant-appellees alleged fraudulent acquisition of the land, and on the damages
allegedly incurred by him (plaintiff-appellant) in relation to the improvements. These matters are merely ancillary
to the central issue of whether or not defendant-appellees title should be canceled or amended, and they may not
be leaned upon in an effort to make out a cause of action in relation to the said focal issue. Indeed, the principal
relief prayed for in the amended complaint is the cancellation or amendment of defendant-appellees title."31

Under Rule 3, Section 2 of the Rules of Court, a real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit. "Interest" within the meaning of the rule means
material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question
involved, or a mere incidental interest. The interest of the party must also be personal and not one based on a desire to
vindicate the constitutional right of some third and unrelated party. Real interest, on the other hand, means a present
substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential
interest.32

If petitioners are to be believed, they would possess a mere inchoate interest in the properties covered by the subject
titles, a mere expectancy conditioned upon the fact that if the questioned titles are cancelled and the property is reverted
to the State, they would probably or possibly be given preferential treatment as qualified buyers or lessees of the property
under the Friar Lands Act. But this certainly is not the "interest" required by law that grants them license or the personality
to prosecute their case. Only to the State does the privilege belong.

On the issue of exhaustion of administrative remedies, suffice it to state that since petitioners do not possess the
necessary interest to prosecute the case for cancellation of title in the courts, neither do they have the right to pursue
administrative remedies outside thereof. They are not the owners; nor are they qualified applicants therefor. It has not
been shown by their complaint that they have previously taken steps to avail of the benefits under the Friar Lands Act,
since all they seek, should the questioned titles be nullified, is to be declared bona fide occupants of the property covered
by the questioned titles. Neither is there any indication that they possess the qualifications necessary to enable them to
avail of the preference granted under the Act.

Finally, there is no merit in petitioners contention that respondent belatedly filed the petition for certiorari with the Court of
Appeals, and that the appellate court gravely abused its discretion when it entertained and resolved the same.

The Order of the trial court dated January 3, 2001 denying respondents motion to dismiss the Second Amended
Complaint was received by the respondent on January 16, 2001. Respondent filed a motion for reconsideration on
January 18, 2001 which was denied on February 28, 2001. Respondent received the order denying its motion for
reconsideration on March 27, 2001. On the same day, it filed a Notice to File Petition for Certiorari. On April 2, 2001, the
petition for certiorari was filed with the Court of Appeals. Clearly, the same was timely filed hence, the appellate court
correctly entertained the same.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated January 9, 2002 in CA-G.R. SP No.
64337 dismissing petitioners "Second Amended Complaint" in Civil Case No. Q-99-36483 and the Resolution dated June
26, 2002 denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.
G.R. No. 100709 November 14, 1997

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,

vs.
COURT OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO QUILATAN AND THE
REGISTER OF DEEDS OF QUEZON PROVINCE, respondents.

PANGANIBAN, J.:

Will the lease and/or mortgage of a portion of a realty acquired through free patent constitute sufficient ground for the
nullification of such land grant? Should such property revert to the State once it is invaded by the sea and thus becomes
foreshore land?

The Case

Decision in CA-G.R. CV
These are the two questions raised in the petition before us assailing the Court of Appeals' 1

No. 02667 promulgated on June 13, 1991 which answered the said questions in the
negative. 2 Respondent Court's dismissed 3 petitioner's appeal and affirmed in toto the decision of the
Regional Trial Court 4 of Calauag, Quezon, dated December 28, 1983 in Civil Case No. C-608. In turn,
the Regional Trial Court's decision dismissed petitioner's complaint for cancellation of the Torrens
Certificate of Title of Respondent Morato and for reversion of the parcel of land subject thereof of the
public domain.

The Facts

5
The petition of the solicitor general, representing the Republic of the Philippines, recites the following facts:

Sometime in December, 1972, respondent Morato filed a Free Patent Application No. III-3-8186-B on a
parcel of land with an area of 1,265 square meters situated at Pinagtalleran, Calauag, Quezon. On
January 16, 1974, the patent was approved and the Register of Deeds of Quezon at Lucena City issued
on February 4, 1974 Original Certificate of Title No. P-17789. Both the free paten and the title specifically
mandate that the land shall not be alienated nor encumbered within five years from the date of the
issuance of the patent (Sections 118 and 124 of CA No. 141, as amended).

Subsequently, the District Land Officer in Lucena City, acting upon reports that respondent Morato had
encumbered the land in violation of the condition of the patent, conducted an investigation. Thereafter, it
was established that the subject land is a portion of the Calauag Bay, five (5) to six (6) feet deep under
water during high tide and two (2) feet deep at low tide, and not suitable to vegetation. Moreover, on
October 24, 1974, a portion of the land was mortgaged by respondent Morato to respondents Nenita Co
and Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits). The spouses Quilatan constructed a
house on the land. Another portion of the land was leased to Perfecto Advincula on February 2, 1976 at
P100.00 a month, where a warehouse was constructed.
 On November 5, 1978, petitioner filed an amended complaint against respondents Morato, spouses
Nenita Co and Antonio Quilatan, and the Register of Deeds of Quezon for the cancellation of title and
reversion of a parcel of land to the public domain, subject of a free patent in favor of respondent Morato,
on the grounds that the land is a foreshore land and was mortgaged and leased within the five-year
prohibitory period (p. 46, Records).

After trial, the lower court, on December 28, 1983, rendered a decision dismissing petitioner's complaint.
In finding for private respondents, the lower court ruled that there was no violation of the 5-year period
ban against alienating or encumbering the land, because the land was merely leased and not alienated. It
also found that the mortgage to Nenita Co and Antonio Quilatan covered only the improvement and not
the land itself.

On appeal, the Court of Appeals affirmed the decision of the trial court. Thereafter, the Republic of the Philippines filed the
present petition. 6

The Issues

7
Petitioner alleges that the following errors were committed by Respondent Court:

Respondent court erred in holding that the patent granted and certificate of title issued to Respondent
Morato cannot be cancelled and annulled since the certificate of title becomes indefeasible after one year
from the issuance of the title.

II

Respondent Court erred in holding that the questioned land is part of a disposable public land and not a
foreshore land.

The Court's Ruling

The petition is meritorious.

First Issue: Indefeasibility of a Free Patent Title

8
In resolving the first issue against petitioner, Respondent Court held:

. . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas, 168 SCRA 198. ". . . The rule is well-
settled that an original certificate of title issued on the strength of a homestead patent partakes of the
nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is really part
of the disposable land of the public domain, and becomes indefeasible and incontrovertible upon the
expiration of one year from the date of promulgation of the order of the Director of Lands for the issuance
of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v. Ramelo, 107 Phil. 498
(1960); Lopez v. Padilla, (G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead patent, one
registered under the Land Registration Act, becomes as indefeasible as a Torrens Title. (Pamintuan v.
San Agustin, 43 Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); Duran v. Oliva, 113 Phil.
144 (1961); Pajomayo v. Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676). (p. 203).

Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia ni Cristo v. Hon. Judge, CFI of Nueva
Ecija, Branch I, (123 SCRA 516 (1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 (1971) held
that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to
Section 122 of Act 496, the certificate of title issued in virtue of said patent has the force and effect of a
Torrens Title issued under the Land Registration Act.

Indefeasibility of the title, however, may not bar the State, thru the Solicitor General, from filing an action
for reversion, as ruled in Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas, (supra), as follows:
 But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas' title to the property having
become incontrovertible, such may no longer be collaterally attacked. If indeed there had been any fraud
or misrepresentation in obtaining the title, an action for reversion instituted by the Solicitor General would
be the proper remedy (Sec. 101, C.A. No. 141; Director of Lands v. Jugado, G.R. No. L-14702, May 21,
1961, 2 SCRA 32; Lopez v. Padilla, supra). (p. 204).

Petitioner contends that the grant of Free Patent (IV-3) 275 and the subsequent issuance of Original Certificate of Title
No. P-17789 to Respondent Josefina L. Morato were subject to the conditions provided for in Commonwealth Act (CA)
No. 141. It alleges that on October 24, 1974, or nine (9) months and eight (8) days after the grant of the patent,
mortgaged a portion of the land" to Respondent Nenita Co, who thereafter constructed a house thereon. Likewise, on
February 2, 1976 and "within the five-year prohibitory period," Respondent Morato "leased a portion of the land to
Perfecto Advincula at a monthly rent of P100.00 who, shortly thereafter, constructed a house of concrete materials on the
subject land." 9 Further, petitioner argues that the defense of indefeasibility of title is "inaccurate." The
original certificate of title issued to Respondent Morato "contains the seeds of its own cancellation":
such certificate specifically states on its face that "it is subject to the provisions of Sections 118, 119,
121, 122, 124 of CA No. 141, as amended." 10

Respondent Morato counters by stating that although a "portion of the land was previously leased," it resulted "from the
fact that Perfecto Advincula built a warehouse in the subject land without [her] prior consent." The mortgage executed
over the improvement "cannot be considered a violation of the said grant since it can never affect the ownership." 11 She
states further:

. . . . the appeal of the petitioner was dismissed not because of the principle of indefeasibility of title but
mainly due to failure of the latter to support and prove the alleged violations of respondent Morato. The
records of this case will readily show that although petitioner was able to establish that Morato committed
some acts during the prohibitory period of 5 years, a perusal thereof will also show that what petitioner
was able to prove never constituted a violation of the grant. 12

Respondent-Spouses Quilatan, on the other hand, state that the mortgage contract they entered into with Respondent
Morato "can never be considered as [an] 'alienation' inasmuch as the ownership over the property remains with the
owner." 13 Besides, it is the director of lands and not the Republic of the Philippines who is the real
party in interest in this case, contrary to the provision of the Public Land Act which states that actions
for reversion should be instituted by the solicitor general in the name of Republic of the Philippines. 14

We find for petitioner.

Quoted below are relevant sections of Commonwealth Act No. 141, otherwise known as the Public Land Act:

Sec. 118. Except in favor of the Government or any of its branches, units or institutions, or legally
constituted banking corporations, lands acquired under free patent or homestead provisions shall not be
subject to encumbrance or alienation from the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on
the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years
after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural
Resources, which approval shall not be denied except on constitutional and legal grounds. (As amended
by Com. Act No. 456, approved June 8, 1939.)

xxx xxx xxx

Sec. 121. Except with the consent of the grantee and the approval of the Secretary of Agriculture and
Natural Resources, and solely for educational, religious, or charitable purposes or for a right of way, no
corporation, association, or partnership may acquire or have any right, title, interest, or property right
whatsoever to any land granted under the free patent, homestead, or individual sale provisions of this Act
or to any permanent improvement on such land. (As amended by Com. Act No. 615, approved May 5,
1941)
 Sec. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent
improvement on such land, shall be encumbered, alienation or transferred, except to persons,
corporations, association, or partnerships who may acquire lands of the public domain under this Act or to
corporations organized in the Philippines authorized therefore by their charters.

Except in cases of hereditary successions, no land or any portion thereof originally acquired under the
free patent, homestead, or individual sale provisions of this Act, or any permanent improvement on such
land, shall be transferred or assigned to any individual, nor shall such land or any permanent
improvement thereon be leased to such individual, when the area of said land, added to that of this own,
shall exceed one hundred and forty-four hectares. Any transfer, assignment, or lease made in violation
hereto shall be null and void. (As amended by Com Act No. 615, Id.).

xxx xxx xxx

Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in
violation of any of the provisions of sections one hundred and eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this
Act shall be unlawful and 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
presumatively, and cause the reversion of the property and its improvements to the State. (Emphasis
supplied)

The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free patent or
homestead within five years from the grant of such patent. Furthermore, such encumbrance results in the cancellation of
the grant and the reversion of the land to the public domain. Encumbrance has been defined as "[a]nything that impairs
the use or transfer of property; anything which constitutes a burden on the title; a burden or charge upon property; a claim
or lien upon property." It may be a "legal claim on an estate for the discharge of which the estate is liable; and
embarrassment of the estate or property so that it cannot be disposed of without being subject to it; an estate, interest, or
right in lands, diminishing their value to the general owner; a liability resting upon an estate." 15 Do the contracts of
lease and mortgage executed within five (5) years from the issuance of the patent constitute an
"encumbrance" and violate the terms and conditions of such patent? Respondent Court answered in
the negative: 16

From the evidence adduced by both parties, it has been proved that the area of the portion of the land,
subject matter of the lease contract (Exh. "B") executed by and between Perfecto Advincula and Josefina
L. Morato is only 10 x 12 square meters, where the total area of the land granted to Morato is 1,265
square meters. It is clear from this that the portion of the land leased by Advincula does not significantly
affect Morato's ownership and possession. Above all, the circumstances under which the lease was
executed do not reflect a voluntary and blatant intent to violate the conditions provided for in the patent
issued in her favor. On the contrary, Morato was compelled to enter into that contract of lease
out of sympathy and the goodness of her heart to accommodate a fellow man. . . .

It is indisputable, however, that Respondent Morato cannot fully use or enjoy the land during the duration of the lease
contract. This restriction on the enjoyment of her property sufficiently meets the definition of an encumbrance under
Section 118 of the Public Land Act, because such contract "impairs the use of the property" by the grantee. In a contract
of lease which is consensual, bilateral, onerous and commutative, the owner temporarily grants the use of his or her
property to another who undertakes to pay rent therefor. 17 During the term of the lease, the grantee of the
patent cannot enjoy the beneficial use of the land leased. As already observed, the Public Land Act
does not permit a grantee of a free patent from encumbering any portion of such land. Such
encumbrance is a ground for the nullification of the award.

Morato's resort to equity, i.e. that the lease was executed allegedly out of the goodness of her heart without any intention
of violating the law, cannot help her. Equity, which has been aptly described as "justice outside legality," is applied only in
the absence of, and never against, statutory law or judicial rules of procedure. Positive rules prevail over all abstract
arguments based on equity contra legem. 18

Respondents failed to justify their position that the mortgage should not be considered an encumbrance. Indeed, we do
not find any support for such contention. The questioned mortgage falls squarely within the term "encumbrance"
 Verily, a mortgage constitutes a legal limitation on the
proscribed by Section 118 of the Public Land Act. 19
estate, and the foreclosure of such mortgage would necessarily result in the auction of the property. 20

Even if only part of the property has been sold or alienated within the prohibited period of five years from the issuance of
the patent, such alienation is a sufficient cause for the reversion of the whole estate to the State. As a condition for the
grant of a free patent to an applicant, the law requires that the land should not be encumbered, sold or alienated within
five years from the issuance of
the patent. The sale or the alienation of part of the homestead violates that condition. 21

The prohibition against the encumbrance lease and mortgage included of a homestead which, by analogy applies to
a free patent, is mandated by the rationale for the grant, viz.: 22

It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the
State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the
State prohibits the sale or incumbrance of the homestead (Section 116) within five years after the grant of
the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line
with the primordial purpose to favor the homesteader and his family the statute provides that such
alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader,
his widow or heirs within five years. This section 117 is undoubtedly a complement of section 116. It aims
to preserve and keep in the family of the homesteader that portion of public land which the State had
gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold,
that the right to repurchase exists not only when the original homesteader makes the conveyance, but
also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the
statute.

By express provision of Section 118 of Commonwealth Act 141 and in conformity with the policy of the law, any transfer or
alienation of a free patent or homestead within five years from the issuance of the patent is proscribed. Such transfer
nullifies said alienation and constitutes a cause for the reversion of the property to the State.

The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the approval of every
application. 23 Prior to the fulfillment of the requirements of law, Respondent Morato had only an
inchoate right to the property; such property remained part of the public domain and, therefore, not
susceptible to alienation or encumbrance. Conversely, when a "homesteader has complied with all
the terms and conditions which entitled him to a patent for [a] particular tract of public land, he
acquires a vested interest therein and has to be regarded an equitable owner thereof." 24However, for
Respondent Morato's title of ownership over the patented land to be perfected, she should have
complied with the requirements of the law, one of which was to keep the property for herself and her
family within the prescribed period of five (5) years. Prior to the fulfillment of all requirements of the
law, Respondent Morato's title over the property was incomplete. Accordingly, if the requirements are
not complied with, the State as the grantor could petition for the annulment of the patent and the
cancellation of the title.

Respondent Morato cannot use the doctrine of the indefeasibility of her Torrens title to bar the state from questioning its
transfer or encumbrance. The certificate of title issued to her clearly stipulated that its award was "subject to the
conditions provided for in Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA) No. 141." Because she
violated Section 118, the reversion of the property to the public domain necessarily follows, pursuant to Section 124.

Second Issue: Foreshore Land

Revert to the Public Domain

There is yet another reason for granting this petition.

Although Respondent Court found that the subject land was foreshore land, it nevertheless sustained the award thereof to
Respondent Morato: 25
 First of all, the issue here is whether the land in question, is really part of the foreshore lands. The
Supreme Court defines foreshore land in the case of Republic vs. Alagad, 169 SCRA 455, 464, as
follows:

Otherwise, where the rise in water level is due to, the "extraordinary" action of nature,
rainful, for instance, the portions inundated thereby are not considered part of the bed or
basin of the body of water in question. It cannot therefore be said to be foreshore land but
land outside of the public dominion, and land capable of registration as private property.

A foreshore land, on the other hand has been defined as follows:

. . . that part of (the land) which is between high

and low water and left dry by the flux and reflux of the tides . . . .
(Republic vs. C.A., Nos. L-43105, L-43190, August 31, 1984, 131 SCRA
532; Government vs. Colegio de San Jose, 53 Phil 423)

The strip of land that lies between the high and low water marks and that
is alternatively wet and dry according to the flow of the tide. (Rep. vs.
CA, supra, 539).

The factual findings of the lower court regarding the nature of the parcel of land in question reads:

Evidence disclose that the marginal area of the land radically changed sometime in 1937
up to 1955 due to a strong earthquake followed by frequent storms eventually eroding the
land. From 1955 to 1968, however, gradual reclamation was undertaken by the lumber
company owned by the Moratos. Having thus restored the land thru mostly human hands
employed by the lumber company, the area continued to be utilized by the owner of the
sawmill up to the time of his death in 1965. On or about March 17, 1973, there again was
a strong earthquake unfortunately causing destruction to hundreds of residential houses
fronting the Calauag Bay including the Santiago Building, a cinema house constructed of
concrete materials. The catastrophe totally caused the sinking of a concrete bridge at
Sumulong river also in the municipality of Calauag, Quezon.

On November 13, 1977 a typhoon code named "Unding" wrought havoc as it lashed the
main land of Calauag, Quezon causing again great erosion this time than that which the
area suffered in 1937. The Court noted with the significance of the newspaper clipping
entitled "Baryo ng Mangingisda Kinain ng Dagat" (Exh. "11").

xxx xxx xxx

Evidently this was the condition of the land when on or about December 5, 1972
defendant Josefina L. Morato filed with the Bureau of Lands her free patent application.
The defendant Josefina Morato having taken possession of the land after the demise of
Don Tomas Morato, she introduced improvement and continued developing the area,
planted it to coconut tree. Having applied for a free patent, defendant had the land area
surveyed and an approved plan (Exh. "9") based on the cadastral survey as early as
1927 (Exh. "10") was secured. The area was declared for taxation purposes in the name
of defendant Josefina Morato denominated as Tax Declaration No. 4115 (Exh. "8") and
the corresponding realty taxes religiously paid as shown by Exh. "8-A"). (pp. 12-14,
DECISION).

Being supported by substantial evidence and for failure of the appellant to show cause which would
warrant disturbance, the aforecited findings of the lower court, must be respected.

Petitioner correctly contends, however, that Private Respondent Morato cannot own foreshore land:

Through the encroachment or erosion by the ebb and flow of the tide, a portion of the subject land was
invaded by the waves and sea advances. During high tide, at least half of the land (632.5 square meters)
is 6 feet deep under water and three (3) feet deep during low tide. The Calauag Bay shore has extended
up to a portion of the questioned land.
 While at the time of the grant of free patent to respondent Morato, the land was not reached by the water,
however, due to gradual sinking of the land caused by natural calamities, the sea advances had
permanently invaded a portion of subject land. As disclosed at the trial, through the testimony of the
court-appointed commissioner, Engr. Abraham B. Pili, the land was under water during high tide in the
month of August 1978. The water margin covers half of the property, but during low tide, the water is
about a kilometer (TSN, July 19, 1979, p. 12). Also, in 1974, after the grant of the patent, the land was
covered with vegetation, but it disappeared in 1978 when the land was reached by the tides (Exh. "E-1",
"E-14"). In fact, in its decision dated December 28, 1983, the lower court observed that the erosion of the
land was caused by natural calamities that struck the place in 1977 (Cf. Decision, pp. 17-18). 26

Respondent-Spouses Quilatan argue, however, that it is "unfair and unjust if Josefina Morato will be deprived of the whole
property just because a portion thereof was immersed in water for reasons not her own doing." 27

As a general rule, findings of facts of the Court of Appeals are binding and conclusive upon this Court, unless such factual
findings are palpably unsupported by the evidence on record or unless the judgment itself is based on a misapprehension
of facts. 28 The application for a free patent was made in 1972. From the undisputed factual findings of
the Court of Appeals, however, the land has since become foreshore. Accordingly, it can no longer be
subject of a free patent under the Public Land Act. Government of the Philippine Islands
vs. Cabagis 29 explained the rationale for this proscription:

Article 339, subsection 1, of the Civil Code, reads:

Art. 339. Property of public ownership is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, riverbanks, shores, roadsteads, and that of a similar character.

xxx xxx xxx

Article 1, case 3, of the law of Waters of August 3, 1866, provides as follows:

Art. 1. The following are part of the national domain open to public use.

xxx xxx xxx

3. The Shores. By the shore is understood that space covered and uncovered by the movement of the
tide. Its interior or terrestrial limit is the line reached by the highest equinoctal tides. Where the tides are
not appreciable, the shore begins on the land side at the line reached by the sea during ordinary storms
or tempests.

In the case of Aragon vs. Insular Government (19 Phil. 223), with reference to article 339 of the Civil
Code just quoted, this Court said:

We should not be understood, by this decision, to hold that in a case of gradual encroachment or erosion
by the ebb and flow of the tide, private property may not become "property of public ownership." as
defined in article 339 of the code, where it appear that the owner has to all intents and purposes
abandoned it and permitted it to be totally destroyed, so as to become a part of the "playa" (shore of the
sea), "rada" (roadstead), or the like. . . .

In the Enciclopedia Juridica Espaola, volume XII, page 558, we read the following:

With relative frequency the opposite phenomenon occurs; that is, the sea advances and private
properties are permanently invaded by the waves, and in this case they become part of the shore or
breach. The then pass to the public domain, but the owner thus dispossessed does not retain any right to
the natural products resulting from their new nature; it is a de facto case of eminent domain, and not
subject to indemnity.

In comparison, Article 420 of the Civil Code provides:

 Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed
by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth.

When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore land and passed
to the realm of the public domain. In fact, the Court in Government vs. Cabangis 30 annulled the registration of land
subject of cadastral proceedings when the parcel subsequently became foreshore land. 31 In another
case, the Court voided the registration decree of a trial court and held that said court had no
jurisdiction to award foreshore land to any private person or entity. 32 The subject land in this case,
being foreshore land, should therefore be returned to the public domain.

WHEREFORE, the petition is GRANTED. This Court hereby REVERSES and SETS ASIDE the assailed Decision of
Respondent Court and ORDERS the CANCELLATION of Free Patent No. (IV-3) 275 issued to Respondent Morato and
the subsequent Original Certificate of Title No. P-17789. The subject land therefore REVERTS to the State. No costs.

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.

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:

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 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. 13-21; Feb. 16, 1971, pp. 4-36).

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).

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 Psu-119166, 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. 163-196).

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).

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.

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

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.

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?

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:

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 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 verification-relocation
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. 136438 November 11, 2004

TEOFILO C. VILLARICO, petitioner,

vs.
VIVENCIO SARMIENTO, SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH DEL MUNDO, ANDOKS LITSON
CORPORATION and MARITES CARINDERIA, respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals dated December 7, 1998 in CA-G.R.
CV No. 54883, affirming in toto the Decision2 of the Regional Trial Court (RTC) of Paraaque City, Branch 259, dated
November 14, 1996, in Civil Case No. 95-044.

The facts of this case, as gleaned from the findings of the Court of Appeals, are:

Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paraaque City, Metro Manila with an area of sixty-six
(66) square meters and covered by Transfer Certificate of Title (T.C.T.) No. 95453 issued by the Registry of Deeds, same
city.

Petitioners lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land belonging to the government. As
this highway was elevated by four (4) meters and therefore higher than the adjoining areas, the Department of Public
Works and Highways (DPWH) constructed stairways at several portions of this strip of public land to enable the people to
have access to the highway.

Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her husband Beth Del Mundo, respondents
herein, had a building constructed on a portion of said government land. In November that same year, a part thereof was
occupied by Andoks Litson Corporation and Marites Carinderia, also impleaded as respondents.

In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30 square meter portion of the same
area owned by the government. The property was registered in his name as T.C.T. No. 74430 in the Registry of Deeds of
Paraaque City.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a complaint for accion publiciana against respondents,
docketed as Civil Case No. 95-044. He alleged inter alia that respondents structures on the government land closed his
"right of way" to the Ninoy Aquino Avenue; and encroached on a portion of his lot covered by T.C.T. No. 74430.

Respondents, in their answer, specifically denied petitioners allegations, claiming that they have been issued licenses
and permits by Paraaque City to construct their buildings on the area; and that petitioner has no right over the subject
property as it belongs to the government.

After trial, the RTC rendered its Decision, the dispositive portion of which reads:

"WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring the defendants to have a better right of possession over the subject land except the portion
thereof covered by Transfer Certificate of Title No. 74430 of the Register of Deeds of Paraaque;

2. Ordering the defendants to vacate the portion of the subject premises described in Transfer Certificate
of Title No. 74430 and gives its possession to plaintiff; and

3. Dismissing the claim for damages of the plaintiff against the defendants, and likewise dismissing the
claim for attorneys fees of the latter against the former.

Without pronouncement as to costs.

SO ORDERED."3

The trial court found that petitioner has never been in possession of any portion of the public land in question. On the
contrary, the defendants are the ones who have been in actual possession of the area. According to the trial court,
petitioner was not deprived of his "right of way" as he could use the Kapitan Tinoy Street as passageway to the highway.

On appeal by petitioner, the Court of Appeals issued its Decision affirming the trial courts Decision in toto, thus:

"WHEREFORE, the judgment hereby appealed from is hereby AFFIRMED in toto, with costs against the plaintiff-
appellant.

SO ORDERED."4

In this petition, petitioner ascribes to the Court of Appeals the following assignments of error:

"I

THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS CONTAINED A CONCLUSION WITHOUT
CITATION OF SPECIFIC EVIDENCE ON WHICH THE SAME WAS BASED.

II

THE HON. COURT OF APPEALS ERRED IN CONSIDERING THAT THE ONLY ISSUE IN THIS CASE IS
WHETHER OR NOT THE PLAINTIFF-APPELLANT HAS ACQUIRED A RIGHT OF WAY OVER THE LAND OF
THE GOVERNMENT WHICH IS BETWEEN HIS PROPERTY AND THE NINOY AQUINO AVENUE.

III

THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT ACCION PUBLICIANA IS NOT THE
PROPER REMEDY IN THE CASE AT BAR.

IV

THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT THE EXISTENCE OF THE PLAINTIFF-
APPELLANTS RIGHT OF WAY DOES NOT CARRY POSSESSION OVER THE SAME.
 V

THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING THE ISSUE OF WHO HAS THE BETTER
RIGHT OF POSSESSION OVER THE SUBJECT LAND BETWEEN THE PLAINTIFF-APPELLANT AND THE
DEFENDANT-APPELLEES."5

In their comment, respondents maintain that the Court of Appeals did not err in ruling that petitioners action for accion
publiciana is not the proper remedy in asserting his "right of way" on a lot owned by the government.

Here, petitioner claims that respondents, by constructing their buildings on the lot in question, have deprived him of his
"right of way" and his right of possession over a considerable portion of the same lot, which portion is covered by his
T.C.T. No. 74430 he acquired by means of exchange of real property.

It is not disputed that the lot on which petitioners alleged "right of way" exists belongs to the state or property of public
dominion. Property of public dominion is defined by Article 420 of the Civil Code as follows:

"ART. 420. The following things are property of public dominion:

(1) Those intended for public use such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and other of similar character.

(2) Those which belong to the State, without being for public use, and are intended for some public service or for
the development of the national wealth."

Public use is "use that is not confined to privileged individuals, but is open to the indefinite public." 6 Records show that the
lot on which the stairways were built is for the use of the people as passageway to the highway. Consequently, it is a
property of public dominion.

Property of public dominion is outside the commerce of man and hence it: (1) cannot be alienated or leased or otherwise
be the subject matter of contracts; (2) cannot be acquired by prescription against the State; (3) is not subject to
attachment and execution; and (4) cannot be burdened by any voluntary easement. 7

Considering that the lot on which the stairways were constructed is a property of public dominion, it can not be burdened
by a voluntary easement of right of way in favor of herein petitioner. In fact, its use by the public is by mere tolerance of
the government through the DPWH. Petitioner cannot appropriate it for himself. Verily, he can not claim any right of
possession over it. This is clear from Article 530 of the Civil Code which provides:

"ART. 530. Only things and rights which are susceptible of being appropriated may be the object of possession."

Accordingly, both the trial court and the Court of Appeals erred in ruling that respondents have better right of possession
over the subject lot.

However, the trial court and the Court of Appeals found that defendants buildings were constructed on the portion of the
same lot now covered by T.C.T. No. 74430 in petitioners name. Being its owner, he is entitled to its possession.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated December 7, 1998 in CA-
G.R. CV No. 54883 is AFFIRMED with MODIFICATION in the sense that neither petitioner nor respondents have a right
of possession over the disputed lot where the stairways were built as it is a property of public dominion. Costs against
petitioner.

SO ORDERED.
G.R. No. 133250 July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,

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

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order.
The petition seeks to compel the Public Estates Authority ("PEA" for brevity) to disclose all facts on PEA's then on-going
renegotiations with Amari Coastal Bay and Development Corporation ("AMARI" for brevity) to reclaim portions of Manila
Bay. The petition further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract with the
Construction and Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain foreshore and
offshore areas of Manila Bay. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal
Road. CDCP obligated itself to carry out all the works in consideration of fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating PEA. PD No.
1084 tasked PEA "to reclaim land, including foreshore and submerged areas," and "to develop, improve, acquire, x x x
lease and sell any and all kinds of lands."1 On the same date, then President Marcos issued Presidential Decree No. 1085
transferring to PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay" 2 under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP).

On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract with CDCP,
so that "[A]ll future works in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and CDCP executed a
Memorandum of Agreement dated December 29, 1981, which stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as may be agreed
upon by the parties, to be paid according to progress of works on a unit price/lump sum basis for items of work to
be agreed upon, subject to price escalation, retention and other terms and conditions provided for in Presidential
Decree No. 1594. All the financing required for such works shall be provided by PEA.

xxx
 (iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of PEA, all
of the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in the
MCCRRP as of December 30, 1981 which have not yet been sold, transferred or otherwise disposed of by CDCP
as of said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three
(99,473) square meters in the Financial Center Area covered by land pledge No. 5 and approximately Three
Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed
areas at varying elevations above Mean Low Water Level located outside the Financial Center Area and the First
Neighborhood Unit."3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and transferring to
PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP)
containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters."
Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of Paraaque issued Transfer Certificates of
Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom
Islands" located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom Islands have a
total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square
meters or 157.841 hectares.

On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private corporation, to
develop the Freedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas
surrounding these islands to complete the configuration in the Master Development Plan of the Southern Reclamation
Project-MCCRRP. PEA and AMARI entered into the JVA through negotiation without public bidding. 4 On April 28, 1995,
the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the JVA. 6

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate and
denounced the JVA as the "grandmother of all scams." As a result, the Senate Committee on Government Corporations
and Public Enterprises, and the Committee on Accountability of Public Officers and Investigations, conducted a joint
investigation. The Senate Committees reported the results of their investigation in Senate Committee Report No. 560
dated September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the public domain which the government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the certificates of title covering the Freedom Islands are thus void, and (3)
the JVA itself is illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365 creating a Legal
Task Force to conduct a study on the legality of the JVA in view of Senate Committee Report No. 560. The members of
the Legal Task Force were the Secretary of Justice,8 the Chief Presidential Legal Counsel,9 and the Government
Corporate Counsel.10 The Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the
Senate Committees.11

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-going renegotiations
between PEA and AMARI under an order issued by then President Fidel V. Ramos. According to these reports, PEA
Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel
of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of a
Temporary Restraining Order and Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The
Court dismissed the petition "for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case
before the proper court."12

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant Petition for
Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. Petitioner
contends the government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner
prays that PEA publicly disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7,
Article III, of the 1987 Constitution on the right of the people to information on matters of public concern. Petitioner assails
the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of the 1987 Constitution
prohibiting the sale of alienable lands of the public domain to private corporations. Finally, petitioner asserts that he seeks
to enjoin the loss of billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and June 25,
1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit
the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order; and (c) to set the
case for hearing on oral argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which
the Court denied in a Resolution dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to file their
respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for brevity). On
May 28, 1999, the Office of the President under the administration of then President Joseph E. Estrada approved the
Amended JVA.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on "constitutional and
statutory grounds the renegotiated contract be declared null and void."14

The Issues

The issues raised by petitioner, PEA15 and AMARI16 are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC
BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE

REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION ON

ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER
TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE
AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT.

The Court's Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and academic because of subsequent
events.

The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a new agreement."
The petition also prays that the Court enjoin PEA from "privately entering into, perfecting and/or executing any new
agreement with AMARI."

PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21, 1999 a
copy of the signed Amended JVA containing the terms and conditions agreed upon in the renegotiations. Thus, PEA has
satisfied petitioner's prayer for a public disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin the signing
of the Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on March 30, 1999.
Moreover, the Office of the President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and
approval of the Amended JVA before the Court could act on the issue. Presidential approval does not resolve the
constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to
moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still to implement the Amended JVA. The
prayer to enjoin the signing of the Amended JVA on constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have signed one in violation of the Constitution. Petitioner's principal
basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the Amended JVA indeed violates the
Constitution, it is the duty of the Court to enjoin its implementation, and if already implemented, to annul the effects of
such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and ownership to 367.5
hectares of reclaimed lands and submerged areas of Manila Bay to a single private corporation. It now becomes
more compelling for the Court to resolve the issue to insure the government itself does not violate a provision of the
Constitution intended to safeguard the national patrimony. Supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if the
Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and ownership of alienable
lands of the public domain in the name of AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the
bench, bar, and the public.17

Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3, Article XII of
the 1987 Constitution, or its counterpart provision in the 1973 Constitution, 18 covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the private corporations claimed or could
claim the right to judicial confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141"
for brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged
areas for non-agricultural purposes by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141.
Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase. Neither AMARI
nor PEA can claim judicial confirmation of their titles because the lands covered by the Amended JVA are newly
reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and
notorious occupation of agricultural lands of the public domain for at least thirty years since June 12, 1945 or earlier.
Besides, the deadline for filing applications for judicial confirmation of imperfect title expired on December 31, 1987. 20

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the possible
transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed lands. Under the Amended JVA,
PEA is obligated to transfer to AMARI the latter's seventy percent proportionate share in the reclaimed areas as the
reclamation progresses. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed area to
raise financing for the reclamation project.21

Second issue: whether the petition merits dismissal for failing to observe the principle governing the hierarchy of
courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The principle of
hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot
entertain cases involving factual issues. The instant case, however, raises constitutional issues of transcendental
importance to the public.22 The Court can resolve this case without determining any factual issue related to the case. Also,
the instant case is a petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first
asking PEA the needed information. PEA claims petitioner's direct resort to the Court violates the principle of exhaustion
of administrative remedies. It also violates the rule that mandamus may issue only if there is no other plain, speedy and
adequate remedy in the ordinary course of law.

PEA distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition for mandamus even if
the petitioners there did not initially demand from the Office of the President the publication of the presidential decrees.
PEA points out that in Taada, the Executive Department had an affirmative statutory duty under Article 2 of the Civil
Code24 and Section 1 of Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need
for the petitioners in Taada to make an initial demand from the Office of the President. In the instant case, PEA claims it
has no affirmative statutory duty to disclose publicly information about its renegotiation of the JVA. Thus, PEA asserts that
the Court must apply the principle of exhaustion of administrative remedies to the instant case in view of the failure of
petitioner here to demand initially from PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under Section 79 of
the Government Auditing Code,26 the disposition of government lands to private parties requires public bidding. PEA was
under a positive legal duty to disclose to the public the terms and conditions for the sale of its lands. The law
obligated PEA to make this public disclosure even without demand from petitioner or from anyone. PEA failed to make
this public disclosure because the original JVA, like the Amended JVA, was the result of a negotiated contract, not of a
public bidding. Considering that PEA had an affirmative statutory duty to make the public disclosure, and was even in
breach of this legal duty, petitioner had the right to seek direct judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies does not
apply when the issue involved is a purely legal or constitutional question. 27 The principal issue in the instant case is the
capacity of AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the
public domain to private corporations. We rule that the principle of exhaustion of administrative remedies does not apply in
the instant case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to
information without a showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. PEA
also claims that petitioner has not shown that he will suffer any concrete injury because of the signing or implementation
of the Amended JVA. Thus, there is no actual controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to comply with its
constitutional duties. There are two constitutional issues involved here. First is the right of citizens to information on
matters of public concern. Second is the application of a constitutional provision intended to insure the equitable
distribution of alienable lands of the public domain among Filipino citizens. The thrust of the first issue is to compel PEA to
disclose publicly information on the sale of government lands worth billions of pesos, information which the Constitution
and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent PEA from alienating hundreds of
hectares of alienable lands of the public domain in violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.

Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,28 the Court upheld
the right of a citizen to bring a taxpayer's suit on matters of transcendental importance to the public, thus -

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is an issue of
'transcendental importance to the public.' He asserts that ordinary taxpayers have a right to initiate and prosecute
actions questioning the validity of acts or orders of government agencies or instrumentalities, if the issues raised
are of 'paramount public interest,' and if they 'immediately affect the social, economic and moral well being of the
people.'

Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the proceeding
involves the assertion of a public right, such as in this case. He invokes several decisions of this Court which have
set aside the procedural matter of locus standi, when the subject of the case involved public interest.

xxx

In Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the object of mandamus
is to obtain the enforcement of a public duty, the people are regarded as the real parties in interest; and because
it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws, he need not show
that he has any legal or special interest in the result of the action. In the aforesaid case, the petitioners sought to
enforce their right to be informed on matters of public concern, a right then recognized in Section 6, Article IV of
the 1973 Constitution, in connection with the rule that laws in order to be valid and enforceable must be published
in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court
 declared that the right they sought to be enforced 'is a public right recognized by no less than the fundamental law
of the land.'

Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a mandamus
proceeding involves the assertion of a public right, the requirement of personal interest is satisfied by the mere
fact that petitioner is a citizen and, therefore, part of the general 'public' which possesses the right.'

Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been involved under the
questioned contract for the development, management and operation of the Manila International Container
Terminal, 'public interest [was] definitely involved considering the important role [of the subject contract] . . . in the
economic development of the country and the magnitude of the financial consideration involved.' We concluded
that, as a consequence, the disclosure provision in the Constitution would constitute sufficient authority for
upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access to official records,
documents and papers a right guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino citizen. Because of the satisfaction of the two basic requisites laid down by
decisional law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2) espoused by a
Filipino citizen, we rule that the petition at bar should be allowed."

We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional rights - to
information and to the equitable diffusion of natural resources - matters of transcendental public importance, the petitioner
has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official information on on-going negotiations
before a final agreement.

Section 7, Article III of the Constitution explains the people's right to information on matters of public concern in this
manner:

"Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as
well as to government research data used as basis for policy development, shall be afforded the citizen, subject to
such limitations as may be provided by law." (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces the people's right to information
on matters of public concern. This State policy is expressed in Section 28, Article II of the Constitution, thus:

"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full
public disclosure of all its transactions involving public interest." (Emphasis supplied)

These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the
government, as well as provide the people sufficient information to exercise effectively other constitutional rights. These
twin provisions are essential to the exercise of freedom of expression. If the government does not disclose its official acts,
transactions and decisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative
and amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x accountable to
the people,"29 for unless citizens have the proper information, they cannot hold public officials accountable for anything.
Armed with the right information, citizens can participate in public discussions leading to the formulation of government
policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of
any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30

"An essential element of these freedoms is to keep open a continuing dialogue or process of communication
between the government and the people. It is in the interest of the State that the channels for free political
discussion be maintained to the end that the government may perceive and be responsive to the people's will.
Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate
its will intelligently. Only when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."

PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is limited to "definite
propositions of the government." PEA maintains the right does not include access to "intra-agency or inter-agency
recommendations or communications during the stage when common assertions are still in the process of being
formulated or are in the 'exploratory stage'."

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the
transaction. To support its contention, AMARI cites the following discussion in the 1986 Constitutional Commission:

"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts, agreements, or
treaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, or does
he refer to the contract itself?

Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover both steps leading
to a contract and already a consummated contract, Mr. Presiding Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

Mr. Suarez: Thank you."32 (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring government
officials to reveal their deliberations at the pre-decisional stage will degrade the quality of decision-making in government
agencies. Government officials will hesitate to express their real sentiments during deliberations if there is immediate
public dissemination of their discussions, putting them under all kinds of pressure before they decide.

We must first distinguish between information the law on public bidding requires PEA to disclose publicly, and information
the constitutional right to information requires PEA to release to the public. Before the consummation of the contract, PEA
must, on its own and without demand from anyone, disclose to the public matters relating to the disposition of its property.
These include the size, location, technical description and nature of the property being disposed of, the terms and
conditions of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must prepare all
these data and disclose them to the public at the start of the disposition process, long before the consummation of the
contract, because the Government Auditing Code requires public bidding. If PEA fails to make this disclosure, any
citizen can demand from PEA this information at any time during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken by the bidding or review
committee is not immediately accessible under the right to information. While the evaluation or review is still on-going,
there are no "official acts, transactions, or decisions" on the bids or proposals. However, once the committee makes
its official recommendation, there arises a "definite proposition" on the part of the government. From this moment, the
public's right to information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:

"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG and its
officers, as well as other government representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Such
information, though, must pertain to definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when common assertions are still in the
process of being formulated or are in the "exploratory" stage. There is need, of course, to observe the same
restrictions on disclosure of information in general, as discussed earlier such as on matters involving national
security, diplomatic or foreign relations, intelligence and other classified information." (Emphasis supplied)

Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood that the right to
information "contemplates inclusion of negotiations leading to the consummation of the transaction." Certainly, a
consummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never
exercise the right if no contract is consummated, and if one is consummated, it may be too late for the public to expose its
defects.1wphi1.nt

Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly
disadvantageous to the government or even illegal, becomes a fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of the Constitution could not have intended. Such
a requirement will prevent the citizenry from participating in the public discussion of any proposed contract, effectively
truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a
retreat by the State of its avowed "policy of full disclosure of all its transactions involving public interest."

The right covers three categories of information which are "matters of public concern," namely: (1) official records; (2)
documents and papers pertaining to official acts, transactions and decisions; and (3) government research data used in
formulating policies. The first category refers to any document that is part of the public records in the custody of
government agencies or officials. The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts, transactions or decisions of government agencies
or officials. The third category refers to research data, whether raw, collated or processed, owned by the government and
used in formulating government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations,
legal and expert opinions, minutes of meetings, terms of reference and other documents attached to such reports or
minutes, all relating to the JVA. However, the right to information does not compel PEA to prepare lists, abstracts,
summaries and the like relating to the renegotiation of the JVA.34 The right only affords access to records, documents and
papers, which means the opportunity to inspect and copy them. One who exercises the right must copy the records,
documents and papers at his expense. The exercise of the right is also subject to reasonable regulations to protect the
integrity of the public records and to minimize disruption to government operations, like rules specifying when and how to
conduct the inspection and copying.35

The right to information, however, does not extend to matters recognized as privileged information under the separation of
powers.36 The right does not also apply to information on military and diplomatic secrets, information affecting national
security, and information on investigations of crimes by law enforcement agencies before the prosecution of the accused,
which courts have long recognized as confidential.37 The right may also be subject to other limitations that Congress may
impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation of
powers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme Court and other collegiate courts, or executive
sessions of either house of Congress,38 are recognized as confidential. This kind of information cannot be pried open by a
co-equal branch of government. A frank exchange of exploratory ideas and assessments, free from the glare of publicity
and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to
exercise Presidential, Legislative and Judicial power.39This is not the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-going
negotiations before a final contract. The information, however, must constitute definite propositions by the government
and should not cover recognized exceptions like privileged information, military and diplomatic secrets and similar matters
affecting national security and public order.40 Congress has also prescribed other limitations on the right to information in
several legislations.41

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be
reclaimed, violate the Constitution.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds
that the State owns all lands and waters of the public domain. Upon the Spanish conquest of the Philippines, ownership of
all "lands, territories and possessions" in the Philippines passed to the Spanish Crown. 42The King, as the sovereign ruler
and representative of the people, acquired and owned all lands and territories in the Philippines except those he disposed
of by grant or sale to private individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in lieu of the King,
as the owner of all lands and waters of the public domain. The Regalian doctrine is the foundation of the time-honored
principle of land ownership that "all lands that were not acquired from the Government, either by purchase or by grant,
belong to the public domain."43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950,
incorporated the Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands
in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which provided for the lease, but
not the sale, of reclaimed lands of the government to corporations and individuals. Later, on November 29, 1919,
the Philippine Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the sale, of
reclaimed lands of the government to corporations and individuals. On November 7, 1936, the National Assembly
passed Commonwealth Act No. 141, also known as the Public Land Act, which authorized the lease, but not the sale,
of reclaimed lands of the government to corporations and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime zone of the
Spanish territory belonged to the public domain for public use.44 The Spanish Law of Waters of 1866 allowed the
reclamation of the sea under Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces,
pueblos or private persons, with proper permission, shall become the property of the party constructing such
works, unless otherwise provided by the terms of the grant of authority."

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation,
provided the government issued the necessary permit and did not reserve ownership of the reclaimed land to the State.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

"Art. 339. Property of public dominion is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State,
riverbanks, shores, roadsteads, and that of a similar character;

2. That belonging exclusively to the State which, without being of general public use, is employed in some public
service, or in the development of the national wealth, such as walls, fortresses, and other works for the defense of
the territory, and mines, until granted to private individuals."

Property devoted to public use referred to property open for use by the public. In contrast, property devoted to public
service referred to property used for some specific public service and open only to those authorized to use the property.

Property of public dominion referred not only to property devoted to public use, but also to property not so used but
employed to develop the national wealth. This class of property constituted property of public dominion although
employed for some economic or commercial activity to increase the national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private property, to
wit:

"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territory,
shall become a part of the private property of the State."

This provision, however, was not self-executing. The legislature, or the executive department pursuant to law, must
declare the property no longer needed for public use or territorial defense before the government could lease or alienate
the property to private parties.45

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and foreshore
lands. The salient provisions of this law were as follows:

"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all
Government or public lands made or reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.
 Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with the
Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such
parts of the lands so made or reclaimed as are not needed for public purposes will be leased for
commercial and business purposes, x x x.

xxx

(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to
such regulations and safeguards as the Governor-General may by executive order prescribe." (Emphasis
supplied)

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The Act
also vested in the government control and disposition of foreshore lands. Private parties could lease lands reclaimed by
the government only if these lands were no longer needed for public purpose. Act No. 1654 mandated public bidding in
the lease of government reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
public lands which the government could sell to private parties, these reclaimed lands were available only for lease to
private parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit
private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the
sea by private parties with government permission remained private lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46 The salient provisions of
Act No. 2874, on reclaimed lands, were as follows:

"Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural
Resources, shall from time to time classify the lands of the public domain into

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the
Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall
from time to time declare what lands are open to disposition or concession under this Act."

Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially
delimited or classified x x x.

xxx

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified
as suitable for residential purposes or for commercial, industrial, or other productive purposes other than
agricultural purposes, and shall be open to disposition or concession, shall be disposed of under the provisions
of this chapter, and not otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

 (b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or
rivers;

(d) Lands not included in any of the foregoing classes.

x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private
parties by lease only and not otherwise, as soon as the Governor-General, upon recommendation by the
Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the
public service and are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x x alienable or
disposable"47 lands. Section 7 of the Act empowered the Governor-General to "declare what lands are open to disposition
or concession." Section 8 of the Act limited alienable or disposable lands only to those lands which have been "officially
delimited and classified."

Section 56 of Act No. 2874 stated that lands "disposable under this title 48 shall be classified" as government reclaimed,
foreshore and marshy lands, as well as other lands. All these lands, however, must be suitable for residential,
commercial, industrial or other productive non-agricultural purposes. These provisions vested upon the Governor-
General the power to classify inalienable lands of the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further such disposable lands of the public domain into
government reclaimed, foreshore or marshy lands of the public domain, as well as other non-agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as government
reclaimed, foreshore and marshy lands "shall be disposed of to private parties by lease only and not
otherwise." The Governor-General, before allowing the lease of these lands to private parties, must formally declare that
the lands were "not necessary for the public service." Act No. 2874 reiterated the State policy to lease and not to sell
government reclaimed, foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No.
1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or disposable
lands of the public domain that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands for non-
agricultural purposes retain their inherent potential as areas for public service. This is the reason the government
prohibited the sale, and only allowed the lease, of these lands to private parties. The State always reserved these lands
for some future public service.

Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into other non-
agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only lands for non-agricultural
purposes the government could sell to private parties. Thus, under Act No. 2874, the government could not sell
government reclaimed, foreshore and marshy lands to private parties, unless the legislature passed a law allowing
their sale.49

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of
Waters of 1866. Lands reclaimed from the sea by private parties with government permission remained private lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935 Constitution, in
adopting the Regalian doctrine, declared in Section 1, Article XIII, that

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy and other natural resources of the Philippines belong to the State,
and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to
corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to
any existing right, grant, lease, or concession at the time of the inauguration of the Government established under
 this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, development, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of
water power, in which cases beneficial use may be the measure and limit of the grant." (Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only
natural resources the State could alienate. Thus, foreshore lands, considered part of the State's natural resources,
became inalienable by constitutional fiat, available only for lease for 25 years, renewable for another 25 years. The
government could alienate foreshore lands only after these lands were reclaimed and classified as alienable agricultural
lands of the public domain. Government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands, fell under the classification of public agricultural lands.50 However, government reclaimed and marshy
lands, although subject to classification as disposable public agricultural lands, could only be leased and not sold to
private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public
domain was only a statutory prohibition and the legislature could therefore remove such prohibition. The 1935 Constitution
did not prohibit individuals and corporations from acquiring government reclaimed and marshy lands of the public domain
that were classified as agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:

"Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in
excess of one thousand and twenty four hectares, nor may any individual acquire such lands by
purchase in excess of one hundred and forty hectares, or by lease in excess of one thousand and twenty-
four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association." (Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for sale
to private parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature continued
the long established State policy of retaining for the government title and ownership of government reclaimed and marshy
lands of the public domain.

Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land Act,
which compiled the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this day
the existing general law governing the classification and disposition of lands of the public domain other than timber and
mineral lands.51

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to such classification are inalienable and outside the commerce of
man. Section 7 of CA No. 141 authorizes the President to "declare what lands are open to disposition or concession."
Section 8 of CA No. 141 states that the government can declare open for disposition or concession only lands that are
"officially delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:

"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall
from time to time classify the lands of the public domain into

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands,

and may at any time and in like manner transfer such lands from one class to another, 53 for the purpose of their
administration and disposition.
 Sec. 7. For the purposes of the administration and disposition of alienable or disposable public lands, the
President, upon recommendation by the Secretary of Agriculture and Commerce, shall from time to time
declare what lands are open to disposition or concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially
delimited and classified and, when practicable, surveyed, and which have not been reserved for public or
quasi-public uses, nor appropriated by the Government, nor in any manner become private property, nor those
on which a private right authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. x x x."

Thus, before the government could alienate or dispose of lands of the public domain, the President must first officially
classify these lands as alienable or disposable, and then declare them open to disposition or concession. There must be
no law reserving these lands for public or quasi-public uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain, are as
follows:

"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended
to be used for residential purposes or for commercial, industrial, or other productive purposes other than
agricultural, and is open to disposition or concession, shall be disposed of under the provisions of this
chapter and not otherwise.

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or
rivers;

(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person,
corporation, or association authorized to purchase or lease public lands for agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private
parties by lease only and not otherwise, as soon as the President, upon recommendation by the Secretary of
Agriculture, shall declare that the same are not necessary for the public service and are open to disposition
under this chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting
the sale of government reclaimed, foreshore and marshy disposable lands of the public domain. All these lands are
intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the
lease of such lands to private parties. The government could sell to private parties only lands falling under Section 59 (d)
of CA No. 141, or those lands for non-agricultural purposes not classified as government reclaimed, foreshore and marshy
disposable lands of the public domain. Foreshore lands, however, became inalienable under the 1935 Constitution which
only allowed the lease of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential, commercial,
industrial or other productive purposes other than agricultural "shall be disposed of under the provisions of this
chapter and not otherwise." Under Section 10 of CA No. 141, the term "disposition" includes lease of the land. Any
disposition of government reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply
with Chapter IX, Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,55Justice
Reynato S. Puno summarized succinctly the law on this matter, as follows:
 "Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed by the
government by dredging, filling, or other means. Act 1654 mandated that the control and disposition of the
foreshore and lands under water remained in the national government. Said law allowed only the 'leasing' of
reclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by
the government were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and Natural Resources,
had first to determine that the land reclaimed was not necessary for the public service. This requisite must have
been met before the land could be disposed of. But even then, the foreshore and lands under water were not
to be alienated and sold to private parties. The disposition of the reclaimed land was only by lease. The
land remained property of the State." (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at present."

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of
the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect.
The prohibition on the sale of foreshore lands, however, became a constitutional edict under the 1935 Constitution.
Foreshore lands became inalienable as natural resources of the State, unless reclaimed by the government and classified
as agricultural lands of the public domain, in which case they would fall under the classification of government reclaimed
lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain
continued to be only leased and not sold to private parties.56 These lands remained sui generis, as the only alienable or
disposable lands of the public domain the government could not sell to private parties.

Since then and until now, the only way the government can sell to private parties government reclaimed and marshy
disposable lands of the public domain is for the legislature to pass a law authorizing such sale. CA No. 141 does not
authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under
Section 59 (d). Lands classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural
purposes that the government could sell to private parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section 59 that the
government previously transferred to government units or entities could be sold to private parties. Section 60 of CA No.
141 declares that

"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture
and Natural Resources, be reasonably necessary for the purposes for which such sale or lease is requested, and
shall not exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not apply to
grants, donations, or transfers made to a province, municipality or branch or subdivision of the Government for
the purposes deemed by said entities conducive to the public interest; but the land so granted, donated, or
transferred to a province, municipality or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by
Congress: x x x." (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of
Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from
the maximum area of public lands that could be acquired from the State. These government units and entities should not
just turn around and sell these lands to private parties in violation of constitutional or statutory limitations. Otherwise, the
transfer of lands for non-agricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same manner, such transfers could
also be used to evade the statutory prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of
the public domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands.57

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63 and
67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as follows:

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the
Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resources)
 for authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by
public advertisement in the same manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the highest
bidder. x x x." (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable lands of
the public domain.58

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of Waters of 1866.
Private parties could still reclaim portions of the sea with government permission. However, the reclaimed land could
become private land only if classified as alienable agricultural land of the public domain open to disposition under
CA No. 141. The 1935 Constitution prohibited the alienation of all natural resources except public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of
1889. Articles 420 and 422 of the Civil Code of 1950 state that

"Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for
the development of the national wealth.

x x x.

Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part
of the patrimonial property of the State."

Again, the government must formally declare that the property of public dominion is no longer needed for public use or
public service, before the same could be classified as patrimonial property of the State. 59 In the case of government
reclaimed and marshy lands of the public domain, the declaration of their being disposable, as well as the manner of their
disposition, is governed by the applicable provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State
which, without being for public use, are intended for public service or the "development of the national wealth." Thus,
government reclaimed and marshy lands of the State, even if not employed for public use or public service, if developed
to enhance the national wealth, are classified as property of public dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine. Section 8, Article
XIV of the 1973 Constitution stated that

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of
potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the
exception of agricultural, industrial or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration,
development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding
twenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water power, in which cases, beneficial use
may be the measure and the limit of the grant." (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural, industrial or
commercial, residential, and resettlement lands of the public domain." In contrast, the 1935 Constitution barred the
alienation of all natural resources except "public agricultural lands." However, the term "public agricultural lands" in the
1935 Constitution encompassed industrial, commercial, residential and resettlement lands of the public domain.60 If the
land of public domain were neither timber nor mineral land, it would fall under the classification of agricultural land of the
public domain. Both the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural resources
except agricultural lands of the public domain.

The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were citizens of the
Philippines. Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable
lands of the public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared that

"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development requirements
of the natural resources, shall determine by law the size of land of the public domain which may be developed,
held or acquired by, or leased to, any qualified individual, corporation, or association, and the conditions
therefor. No private corporation or association may hold alienable lands of the public domain except by
lease not to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excess of five
hundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four hectares. No private
corporation or association may hold by lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand hectares. However, such area may be increased by
the Batasang Pambansa upon recommendation of the National Economic and Development Authority."
(Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only through
lease. Only individuals could now acquire alienable lands of the public domain, and private corporations became
absolutely barred from acquiring any kind of alienable land of the public domain. The constitutional ban extended to
all kinds of alienable lands of the public domain, while the statutory ban under CA No. 141 applied only to government
reclaimed, foreshore and marshy alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a wholly
government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA with
the following purposes and powers:

"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to
acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of
lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the
government;

(c) To provide for, operate or administer such service as may be necessary for the efficient, economical and
beneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for which it is
created, have the following powers and functions:

(a)To prescribe its by-laws.

xxx

(i) To hold lands of the public domain in excess of the area permitted to private corporations by statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x
x.

xxx
 (o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes
and objectives herein specified." (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas are
those covered and uncovered by the ebb and flow of the tide.61 Submerged areas are those permanently under water
regardless of the ebb and flow of the tide.62 Foreshore and submerged areas indisputably belong to the public
domain63 and are inalienable unless reclaimed, classified as alienable lands open to disposition, and further declared no
longer needed for public service.

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply
to PEA since it was then, and until today, a fully owned government corporation. The constitutional ban applied then, as it
still applies now, only to "private corporations and associations." PD No. 1084 expressly empowers PEA "to hold lands
of the public domain" even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold
title to private lands, as well as title to lands of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be
legislative authority empowering PEA to sell these lands. This legislative authority is necessary in view of Section 60 of
CA No.141, which states

"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or branch or
subdivision of the Government shall not be alienated, encumbered or otherwise disposed of in a manner affecting
its title, except when authorized by Congress; x x x." (Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable
lands of the public domain. Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of
the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the
public domain. Hence, such legislative authority could only benefit private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987
Constitution declares that all natural resources are "owned by the State," and except for alienable agricultural lands of
the public domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by
the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be under the full control and supervision of the
State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national
parks. Agricultural lands of the public domain may be further classified by law according to the uses which they
may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain except by lease, for
a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to the requirements
of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be
acquired, developed, held, or leased and the conditions therefor." (Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring
any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private
corporations to hold alienable lands of the public domain only through lease. As in the 1935 and 1973 Constitutions, the
general law governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public
domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the
public domain is not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners
probed the rationale behind this ban, thus:

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:

`No private corporation or association may hold alienable lands of the public domain except by lease, not to
exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973
Constitution. In effect, it prohibits private corporations from acquiring alienable public lands. But it has not been
very clear in jurisprudence what the reason for this is. In some of the cases decided in 1982 and 1983, it was
indicated that the purpose of this is to prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo
was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said
it would be in violation of this." (Emphasis supplied)

In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private
corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-
size farm' and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private
persons had spawned social unrest."

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size of
alienable lands of the public domain that corporations could acquire. The Constitution could have followed the limitations
on individuals, who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973
Constitution, and not more than 12 hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would
be more effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon
the death of the owner, his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This
would prevent the continuing break-up of farmlands into smaller and smaller plots from one generation to the next.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than
the allowed area of alienable lands of the public domain. Without the constitutional ban, individuals who already acquired
the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable
public lands. An individual could own as many corporations as his means would allow him. An individual could even hide
his ownership of a corporation by putting his nominees as stockholders of the corporation. The corporation is a convenient
vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of
alienable land of the public domain to a qualified individual. This constitutional intent is safeguarded by the provision
prohibiting corporations from acquiring alienable lands of the public domain, since the vehicle to circumvent the
constitutional intent is removed. The available alienable public lands are gradually decreasing in the face of an ever-
growing population. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell
alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit arising from the
constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three properties, namely:

1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in Paranaque
and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square meters;"
 2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and

3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize the
configuration of the reclaimed area."65

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further reclamation of about
250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim another 350 hectares x x x." 66

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-hectare
reclamation project have been reclaimed, and the rest of the 592.15 hectares are still submerged areas forming
part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in partially
reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the reclamation of the Freedom Islands.
AMARI will further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed.
AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is
defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common areas. Title to AMARI's
share in the net usable area, totaling 367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the Amended
JVA provides that

"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or conveyance of the title
pertaining to AMARI's Land share based on the Land Allocation Plan. PEA, when requested in writing by
AMARI, shall then cause the issuance and delivery of the proper certificates of title covering AMARI's
Land Share in the name of AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at
any given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining
to AMARI, until such time when a corresponding proportionate area of additional land pertaining to PEA has been
titled." (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of reclaimed
land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's statutory
authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the Amended
JVA states that

"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland Reclamation and
Horizontal Development as well as own the Reclamation Area, thereby granting the Joint Venture the full and
exclusive right, authority and privilege to undertake the Project in accordance with the Master Development Plan."

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its supplemental
agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA 367.5
hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987
Constitution which state that:

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by
the State. With the exception of agricultural lands, all other natural resources shall not be alienated. x x x.

xxx

Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private corporations
or associations may not hold such alienable lands of the public domain except by lease, x x x."(Emphasis
supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable
lands of the public domain. In its Memorandum,67 PEA admits that

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and
disposable lands of the public domain:

'Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or other means;

x x x.'" (Emphasis supplied)

Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its Report and
Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands are classified as alienable and disposable
lands of the public domain."69 The Legal Task Force concluded that

"D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership and
disposition over reclaimed lands have been transferred to PEA, by virtue of which PEA, as owner, may validly
convey the same to any qualified person without violating the Constitution or any statute.

The constitutional provision prohibiting private corporations from holding public land, except by lease (Sec. 3, Art.
XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership has passed on to PEA by statutory
grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the
"lands of the public domain, waters x x x and other natural resources" and consequently "owned by the State." As such,
foreshore and submerged areas "shall not be alienated," unless they are classified as "agricultural lands" of the public
domain. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State
into alienable or disposable lands of the public domain. There must be a law or presidential proclamation officially
classifying these reclaimed lands as alienable or disposable and open to disposition or concession. Moreover, these
reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-
public use.71

Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or concession which have
been officially delimited and classified."72 The President has the authority to classify inalienable lands of the public
domain into alienable or disposable lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs.
Garcia,73 the Executive Department attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the
Philippine Government for use as the Chancery of the Philippine Embassy. Although the Chancery had transferred to
another location thirteen years earlier, the Court still ruled that, under Article 422 74of the Civil Code, a property of public
dominion retains such character until formally declared otherwise. The Court ruled that

"The fact that the Roppongi site has not been used for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn
from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be
part of the public domain, not available for private appropriation or ownership 'until there is a formal
declaration on the part of the government to withdraw it from being such' (Ignacio v. Director of Lands, 108
Phil. 335 [1960]." (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands reclaimed by PEA
from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino issued
Special Patent No. 3517 in the name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom Islands.
Subsequently, on April 9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and
7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom Islands, is
equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public
domain. PD No. 1085 and President Aquino's issuance of a land patent also constitute a declaration that the Freedom
Islands are no longer needed for public service. The Freedom Islands are thus alienable or disposable lands of the
public domain, open to disposition or concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom Islands
although subsequently there were partial erosions on some areas. The government had also completed the necessary
surveys on these islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the land mass. Section
3, Article XII of the 1987 Constitution classifies lands of the public domain into "agricultural, forest or timber, mineral lands,
and national parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall
under the classification of agricultural lands of the public domain. Under the 1987 Constitution, agricultural lands of the
public domain are the only natural resources that the State may alienate to qualified private parties. All other natural
resources, such as the seas or bays, are "waters x x x owned by the State" forming part of the public domain, and are
inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the
islands under a contract dated November 20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of
the Spanish Law of Waters of 1866, argues that "if the ownership of reclaimed lands may be given to the party
constructing the works, then it cannot be said that reclaimed lands are lands of the public domain which the State may not
alienate."75 Article 5 of the Spanish Law of Waters reads as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces,
pueblos or private persons, with proper permission, shall become the property of the party constructing such
works, unless otherwise provided by the terms of the grant of authority." (Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with "proper
permission" from the State. Private parties could own the reclaimed land only if not "otherwise provided by the terms of
the grant of authority." This clearly meant that no one could reclaim from the sea without permission from the State
because the sea is property of public dominion. It also meant that the State could grant or withhold ownership of the
reclaimed land because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a private
person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which
would remain property of public dominion like the sea it replaced. 76 Article 5 of the Spanish Law of Waters of 1866
adopted the time-honored principle of land ownership that "all lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain."77

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public
lands. In particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable
before the government can alienate them. These lands must not be reserved for public or quasi-public
purposes.78 Moreover, the contract between CDCP and the government was executed after the effectivity of the 1973
Constitution which barred private corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of areas under
water and revested solely in the National Government the power to reclaim lands. Section 1 of PD No. 3-A declared that

"The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether
foreshore or inland, shall be limited to the National Government or any person authorized by it under a
proper contract. (Emphasis supplied)

x x x."

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could
now be undertaken only by the National Government or by a person contracted by the National Government. Private
parties may reclaim from the sea only under a contract with the National Government, and no longer by grant or
permission as provided in Section 5 of the Spanish Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's implementing arm
to undertake "all reclamation projects of the government," which "shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity." Under such contract, a private party receives compensation for
reclamation services rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable lands of the public
domain. The reclaimed land can be used as payment in kind only if the reclaimed land is first classified as alienable or
disposable land open to disposition, and then declared no longer needed for public service.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged
and forming part of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as
alienable or disposable lands of the public domain open to disposition. These submerged areas are not covered by
any patent or certificate of title. There can be no dispute that these submerged areas form part of the public domain, and
in their present state are inalienable and outside the commerce of man. Until reclaimed from the sea, these
submerged areas are, under the Constitution, "waters x x x owned by the State," forming part of the public domain and
consequently inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural resources that the State may alienate. Once reclaimed
and transformed into public agricultural lands, the government may then officially classify these lands as alienable or
disposable lands open to disposition. Thereafter, the government may declare these lands no longer needed for public
service. Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within
the commerce of man.

The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable lands open to
disposition is necessary because PEA is tasked under its charter to undertake public services that require the use of lands
of the public domain. Under Section 5 of PD No. 1084, the functions of PEA include the following: "[T]o own or operate
railroads, tramways and other kinds of land transportation, x x x; [T]o construct, maintain and operate such systems of
sanitary sewers as may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary."
PEA is empowered to issue "rules and regulations as may be necessary for the proper use by private parties of any or all
of the highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their
use." Thus, part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public
use or service since many of the functions imposed on PEA by its charter constitute essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National Government." The same section also
states that "[A]ll reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be
undertaken by the PEA or through a proper contract executed by it with any person or entity; x x x." Thus, under EO No.
525, in relation to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the
government entity "to undertake the reclamation of lands and ensure their maximum utilization in promoting public
welfare and interests."79 Since large portions of these reclaimed lands would obviously be needed for public service,
there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still
needed for public service.1wphi1.nt

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned by the PEA," could not
automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. Otherwise,
reclaimed foreshore and submerged lands of the public domain would automatically become alienable once reclaimed by
PEA, whether or not classified as alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the Department of
Environment and Natural Resources ("DENR" for brevity) the following powers and functions:

"Sec. 4. Powers and Functions. The Department shall:

(1) x x x

xxx

(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral
resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals and
any such form of levy and collect such revenues for the exploration, development, utilization or gathering of such
resources;

xxx

(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions,
lease agreements and such other privileges concerning the development, exploration and utilization of
 the country's marine, freshwater, and brackish water and over all aquatic resources of the country and
shall continue to oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes which are in
furtherance of the conservation of natural resources and supportive of the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain
and serve as the sole agency responsible for classification, sub-classification, surveying and titling of lands in
consultation with appropriate agencies."80 (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision and control
over alienable and disposable public lands." DENR also exercises "exclusive jurisdiction on the management and
disposition of all lands of the public domain." Thus, DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides
whether reclaimed lands of PEA should be classified as alienable under Sections 6 81 and 782 of CA No. 141. Once DENR
decides that the reclaimed lands should be so classified, it then recommends to the President the issuance of a
proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. We note that
then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the
power to undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR
is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the
President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands
alienable or disposable lands of the public domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the
National Government of lands of the public domain to PEA does not make the lands alienable or disposable lands of the
public domain, much less patrimonial lands of PEA.

Absent two official acts a classification that these lands are alienable or disposable and open to disposition and a
declaration that these lands are not needed for public service, lands reclaimed by PEA remain inalienable lands of the
public domain. Only such an official classification and formal declaration can convert reclaimed lands into alienable or
disposable lands of the public domain, open to disposition under the Constitution, Title I and Title III 83of CA No. 141 and
other applicable laws.84

PEA's Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the reclaimed lands
shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits
that reclaimed lands transferred to a branch or subdivision of the government "shall not be alienated, encumbered, or
otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x."85 (Emphasis by PEA)

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which states that

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized
by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following:
x x x."

Thus, the Court concluded that a law is needed to convey any real property belonging to the Government. The Court
declared that -

"It is not for the President to convey real property of the government on his or her own sole will. Any such
conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and
legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its reclaimed
lands. PD No. 1085, issued on February 4, 1977, provides that

"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for the
reclamation and construction of the Manila-Cavite Coastal Road Project between the Republic of the Philippines
and the Construction and Development Corporation of the Philippines dated November 20, 1973 and/or any other
contract or reclamation covering the same area is hereby transferred, conveyed and assigned to the
ownership and administration of the Public Estates Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized and respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the Republic of
the Philippines (Department of Public Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue in favor of the
Republic of the Philippines the corresponding shares of stock in said entity with an issued value of said shares of
stock (which) shall be deemed fully paid and non-assessable.

The Secretary of Public Highways and the General Manager of the Public Estates Authority shall execute such
contracts or agreements, including appropriate agreements with the Construction and Development Corporation
of the Philippines, as may be necessary to implement the above.

Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the Public
Estates Authority without prejudice to the subsequent transfer to the contractor or his assignees of such
portion or portions of the land reclaimed or to be reclaimed as provided for in the above-mentioned
contract. On the basis of such patents, the Land Registration Commission shall issue the corresponding
certificate of title." (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be responsible for its
administration, development, utilization or disposition in accordance with the provisions of Presidential Decree No.
1084. Any and all income that the PEA may derive from the sale, lease or use of reclaimed lands shall be used in
accordance with the provisions of Presidential Decree No. 1084."

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085
merely transferred "ownership and administration" of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared
that lands reclaimed by PEA "shall belong to or be owned by PEA." EO No. 525 expressly states that PEA should dispose
of its reclaimed lands "in accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide, dispose, lease
and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the government."87 (Emphasis
supplied) There is, therefore, legislative authority granted to PEA to sell its lands, whether patrimonial or alienable
lands of the public domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from acquiring alienable lands of
the public domain does not apply to the sale of PEA's patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with the
legislative authority, there is no longer any statutory prohibition against such sales and the constitutional ban does not
apply to individuals. PEA, however, cannot sell any of its alienable or disposable lands of the public domain to private
corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The legislative authority
benefits only individuals. Private corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the "contractor or
his assignees" (Emphasis supplied) would not apply to private corporations but only to individuals because of the
constitutional ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and further
declared no longer needed for public service, PEA would have to conduct a public bidding in selling or leasing these
lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a
law exempting PEA from holding a public auction.88 Special Patent No. 3517 expressly states that the patent is issued by
authority of the Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended." This is an
acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of the public
domain unless otherwise provided by law. Executive Order No. 654,89 which authorizes PEA "to determine the kind and
manner of payment for the transfer" of its assets and properties, does not exempt PEA from the requirement of public
auction. EO No. 654 merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does
not authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the government is
required to sell valuable government property through public bidding. Section 79 of PD No. 1445 mandates that

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

It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on Audit must
approve the selling price.90 The Commission on Audit implements Section 79 of the Government Auditing Code through
Circular No. 89-29691 dated January 27, 1989. This circular emphasizes that government assets must be disposed of only
through public auction, and a negotiated sale can be resorted to only in case of "failure of public auction."

At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and submerged
alienable lands of the public domain. Private corporations are barred from bidding at the auction sale of any kind of
alienable land of the public domain.

PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a condition that
the winning bidder should reclaim another 250 hectares of submerged areas to regularize the shape of the Freedom
Islands, under a 60-40 sharing of the additional reclaimed areas in favor of the winning bidder. 92 No one, however,
submitted a bid. On December 23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom
Islands through negotiation, without need of another public bidding, because of the failure of the public bidding on
December 10, 1991.93

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional 250 hectares still
to be reclaimed, it also granted an option to AMARI to reclaim another 350 hectares. The original JVA, a negotiated
contract, enlarged the reclamation area to 750 hectares.94 The failure of public bidding on December 10, 1991, involving
only 407.84 hectares,95 is not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three years before the
signing of the original JVA on April 25, 1995. The economic situation in the country had greatly improved during the
intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: "Private corporations
or associations may not hold such alienable lands of the public domain except by lease, x x x." Even Republic Act No.
6957 ("BOT Law," for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed lands to private parties,
recognizes the constitutional ban. Section 6 of RA No. 6957 states

"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any infrastructure
projects undertaken through the build-operate-and-transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of
 the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the
reclaimed land, subject to the constitutional requirements with respect to the ownership of the land: x x x."
(Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a government BOT project, cannot acquire
reclaimed alienable lands of the public domain in view of the constitutional ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local governments in land
reclamation projects to pay the contractor or developer in kind consisting of a percentage of the reclaimed land, to wit:

"Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure Projects by
the Private Sector. x x x

xxx

In case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a
portion or percentage of the reclaimed land or the industrial estate constructed."

Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law, the
constitutional restrictions on land ownership automatically apply even though not expressly mentioned in the Local
Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a corporate entity, can
only be paid with leaseholds on portions of the reclaimed land. If the contractor or developer is an individual, portions of
the reclaimed land, not exceeding 12 hectares96 of non-agricultural lands, may be conveyed to him in ownership in view of
the legislative authority allowing such conveyance. This is the only way these provisions of the BOT Law and the Local
Government Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public respondent PEA
transformed such lands of the public domain to private lands." This theory is echoed by AMARI which maintains that the
"issuance of the special patent leading to the eventual issuance of title takes the subject land away from the land of public
domain and converts the property into patrimonial or private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising the
Freedom Islands have become private lands of PEA. In support of their theory, PEA and AMARI cite the following rulings
of the Court:

1. Sumail v. Judge of CFI of Cotabato,97 where the Court held

"Once the patent was granted and the corresponding certificate of title was issued, the land ceased to be part of
the public domain and became private property over which the Director of Lands has neither control nor
jurisdiction."

2. Lee Hong Hok v. David,98 where the Court declared -

"After the registration and issuance of the certificate and duplicate certificate of title based on a public land patent,
the land covered thereby automatically comes under the operation of Republic Act 496 subject to all the
safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled -

"While the Director of Lands has the power to review homestead patents, he may do so only so long as the land
remains part of the public domain and continues to be under his exclusive control; but once the patent is
registered and a certificate of title is issued, the land ceases to be part of the public domain and becomes private
property over which the Director of Lands has neither control nor jurisdiction."

4. Manalo v. Intermediate Appellate Court,100 where the Court held

 "When the lots in dispute were certified as disposable on May 19, 1971, and free patents were issued covering
the same in favor of the private respondents, the said lots ceased to be part of the public domain and, therefore,
the Director of Lands lost jurisdiction over the same."

5.Republic v. Court of Appeals,101 where the Court stated

"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land grant to the
Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the whole lot, validly sufficient
for initial registration under the Land Registration Act. Such land grant is constitutive of a 'fee simple' title or
absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of the Act, which governs the
registration of grants or patents involving public lands, provides that 'Whenever public lands in the Philippine
Islands belonging to the Government of the United States or to the Government of the Philippines are alienated,
granted or conveyed to persons or to public or private corporations, the same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act 496) and shall become registered lands.'"

The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles issued to
private parties. These four cases uniformly hold that the Director of Lands has no jurisdiction over private lands or that
upon issuance of the certificate of title the land automatically comes under the Torrens System. The fifth case cited
involves the registration under the Torrens System of a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The National Government transferred the
12.8-hectare public land to serve as the site for the hospital buildings and other facilities of Mindanao Medical Center,
which performed a public service. The Court affirmed the registration of the 12.8-hectare public land in the name of
Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is an example of a public land being
registered under Act No. 496 without the land losing its character as a property of public dominion.

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly government
owned corporation performing public as well as proprietary functions. No patent or certificate of title has been issued to
any private party. No one is asking the Director of Lands to cancel PEA's patent or certificates of title. In fact, the thrust of
the instant petition is that PEA's certificates of title should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public ownership of the
land. Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any
of the recognized modes of acquiring ownership. Registration does not give the registrant a better right than what the
registrant had prior to the registration.102 The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.103

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land of the public
domain automatically becomes private land cannot apply to government units and entities like PEA. The transfer of the
Freedom Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated in Special Patent No.
3517 issued by then President Aquino, to wit:

"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in conformity with the
provisions of Presidential Decree No. 1084, supplemented by Commonwealth Act No. 141, as amended, there
are hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of land containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof." (Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084. Section 60 of
CA No. 141 prohibits, "except when authorized by Congress," the sale of alienable lands of the public domain that are
transferred to government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a
"statutory lien affecting title" of the registered land even if not annotated on the certificate of title. 104 Alienable lands of the
public domain held by government entities under Section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their disposition. Congress, however, cannot
authorize the sale to private corporations of reclaimed alienable lands of the public domain because of the constitutional
ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not automatically
convert alienable lands of the public domain into private or patrimonial lands. The alienable lands of the public domain
must be transferred to qualified private parties, or to government entities not tasked to dispose of public lands, before
these lands can become private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress
can declare lands of the public domain as private or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire directly from government agencies limitless areas of
lands which, prior to such law, are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim foreshore and
submerged areas of the public domain. Thus, EO No. 525 declares that

"EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation Projects

Whereas, there are several reclamation projects which are ongoing or being proposed to be undertaken in various
parts of the country which need to be evaluated for consistency with national programs;

Whereas, there is a need to give further institutional support to the Government's declared policy to provide for a
coordinated, economical and efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the National
Government or any person authorized by it under proper contract;

Whereas, a central authority is needed to act on behalf of the National Government which shall ensure a
coordinated and integrated approach in the reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government corporation
to undertake reclamation of lands and ensure their maximum utilization in promoting public welfare and
interests; and

Whereas, Presidential Decree No. 1416 provides the President with continuing authority to reorganize the
national government including the transfer, abolition, or merger of functions and offices.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in
me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby order and direct the following:

Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and
coordinating all reclamation projects for and on behalf of the National Government. All reclamation projects
shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or
through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in consultation with the
PEA upon approval of the President.

x x x ."

As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed
lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the
public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR,
when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only
when qualified private parties acquire these lands will the lands become private lands. In the hands of the government
agency tasked and authorized to dispose of alienable of disposable lands of the public domain, these lands are
still public, not private lands.

Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as "any and all
kinds of lands." PEA can hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands
of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in
PEA's name does not automatically make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross
violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain.
PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of
hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This
scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to
diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million
strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x
x x any and all kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds of
hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands.
This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that
the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional
development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares
of public lands.105 The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the
1987 Constitution has unequivocally reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529, automatically
become private lands is contrary to existing laws. Several laws authorize lands of the public domain to be registered
under the Torrens System or Act No. 496, now PD No. 1529, without losing their character as public lands. Section 122 of
Act No. 496, and Section 103 of PD No. 1529, respectively, provide as follows:

Act No. 496

"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the Philippine
Islands are alienated, granted, or conveyed to persons or the public or private corporations, the same shall be
brought forthwith under the operation of this Act and shall become registered lands."

PD No. 1529

"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated, granted or
conveyed to any person, the same shall be brought forthwith under the operation of this Decree." (Emphasis
supplied)

Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529 includes
conveyances of public lands to public corporations.

Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or branch or subdivision
of the Government," as provided in Section 60 of CA No. 141, may be registered under the Torrens System pursuant to
Section 103 of PD No. 1529. Such registration, however, is expressly subject to the condition in Section 60 of CA No. 141
that the land "shall not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy lands of the public
domain that have been titled but still cannot be alienated or encumbered unless expressly authorized by Congress. The
need for legislative authority prevents the registered land of the public domain from becoming private land that can be
disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered under the
Torrens System. Section 48, Chapter 12, Book I of the Code states

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized
by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following:

(1) x x x

(2) For property belonging to the Republic of the Philippines, but titled in the name of any political
subdivision or of any corporate agency or instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public wharf may be titled in the name of
a government corporation regulating port operations in the country. Private property purchased by the National
Government for expansion of an airport may also be titled in the name of the government agency tasked to administer the
airport. Private property donated to a municipality for use as a town plaza or public school site may likewise be titled in the
name of the municipality.106 All these properties become properties of the public domain, and if already registered under
Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in any existing law for the de-
registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of
the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to issue in the name of the
National Government new certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states

"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is expropriated or
taken by eminent domain, the National Government, province, city or municipality, or any other agency or
instrumentality exercising such right shall file for registration in the proper Registry a certified copy of the
judgment which shall state definitely by an adequate description, the particular property or interest expropriated,
the number of the certificate of title, and the nature of the public use. A memorandum of the right or interest taken
shall be made on each certificate of title by the Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government, province, city, municipality, or any other
agency or instrumentality exercising such right for the land so taken. The legal expenses incident to the
memorandum of registration or issuance of a new certificate of title shall be for the account of the authority taking
the land or interest therein." (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial lands. Lands
of the public domain may also be registered pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be
reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA "is not a sale but a joint
venture with a stipulation for reimbursement of the original cost incurred by PEA for the earlier reclamation and
construction works performed by the CDCP under its 1973 contract with the Republic." Whether the Amended JVA is a
sale or a joint venture, the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
certificates of title conveying AMARI's Land Share in the name of AMARI."107

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private corporations
"shall not hold such alienable lands of the public domain except by lease." The transfer of title and ownership to AMARI
clearly means that AMARI will "hold" the reclaimed lands other than by lease. The transfer of title and ownership is a
"disposition" of the reclaimed lands, a transaction considered a sale or alienation under CA No. 141, 108 the Government
Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of the public
domain and are inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain
and are also inalienable, unless converted pursuant to law into alienable or disposable lands of the public domain.
Historically, lands reclaimed by the government are sui generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent potential as areas for public use or public service. Alienable
lands of the public domain, increasingly becoming scarce natural resources, are to be distributed equitably among our
ever-growing population. To insure such equitable distribution, the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of the public domain. Those who attempt to dispose of inalienable
natural resources of the State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in
the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations
but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to
Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public
domain until classified as alienable or disposable lands open to disposition and declared no longer needed for
public service. The government can make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only
natural resources the government can alienate. In their present state, the 592.15 hectares of submerged
areas are inalienable and outside the commerce of man.
 3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares 110 of
the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still submerged
areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution
which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or
disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed
alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 112 of
the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men,"
are "inexistent and void from the beginning." The Court must perform its duty to defend and uphold the Constitution, and
therefore declares the Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA is grossly
disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue. Besides, the
Court is not a trier of facts, and this last issue involves a determination of factual matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation
are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement which is hereby
declared NULL and VOID ab initio.

SO ORDERED.

G.R. No. 133250 May 6, 2003

FRANCISCO I. CHAVEZ, petitioner,

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

RESOLUTION

CARPIO, J.:

For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent
Amari Coastal Bay Development Corporation ("Amari" for brevity) on September 13, 2002; (2) Motion to Set Case for
Hearing on Oral Argument filed by Amari on August 20, 2002; (3) Motion for Reconsideration and Supplement to Motion
for Reconsideration filed by Amari on July 26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and
Supplement to Motion for Reconsideration filed by respondent Public Estates Authority ("PEA" for brevity) on July 26,
2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the Office of the
Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his Consolidated
Opposition to the main and supplemental motions for reconsideration.

To recall, the Courts decision of July 9, 2002 ("Decision" for brevity) on the instant case states in its summary:

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in
the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but
may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to
Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.
 2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public
domain until classified as alienable or disposable lands open to disposition and declared no longer needed for
public service. The government can make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only
natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas
are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the
Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which
prohibits private corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged
areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution
which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or
disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed
alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of
the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men,"
are "inexistent and void from the beginning." The Court must perform its duty to defend and uphold the Constitution, and
therefore declares the Amended JVA null and void ab initio.

Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before
his appointment to the Court, wrote in his Manila Times column of July 1, 1997, "I have always maintained that the law
requires the public bidding of reclamation projects." Justice Carpio, then a private law practitioner, also stated in the same
column, "The Amari-PEA reclamation contract is legally flawed because it was not bid out by the PEA." Amari claims that
because of these statements Justice Carpio should inhibit himself "on the grounds of bias and prejudgment" and that the
instant case should be "re-deliberated" after being assigned to a new ponente.

The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came after Justice Carpio
had already rendered his opinion on the merits of the case. The rule is that a motion to inhibit must be denied if filed after
a member of the Court had already given an opinion on the merits of the case, 1 the rationale being that "a litigant cannot
be permitted to speculate upon the action of the Court xxx (only to) raise an objection of this sort after a decision has been
rendered." Second, as can be readily gleaned from the summary of the Decision quoted above, the absence of public
bidding is not one of the ratio decidendi of the Decision which is anchored on violation of specific provisions of the
Constitution. The absence of public bidding was not raised as an issue by the parties. The absence of public bidding was
mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance of
public officials. At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence
of public bidding in the disposition of the Freedom Islands rendered the Amended JVA null and void. 2 Third, judges and
justices are not disqualified from participating in a case just because they have written legal articles on the law involved in
the case. As stated by the Court in Republic v. Cocofed,3 -

The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in
the same manner that jurists will not be disqualified just because they may have given their opinions as textbook
writers on the question involved in a case.

Besides, the subject and title of the column in question was "The CCP reclamation project" and the column referred to the
Amari-PEA contract only in passing in one sentence.

Amaris motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed
exhaustively the issues involved in the case.

The motions for reconsideration reiterate mainly the arguments already discussed in the Decision. We shall consider in
this Resolution only the new arguments raised by respondents.

In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively,
not retroactively to cover the Amended JVA. Amari argues that the existence of a statute or executive order prior to its
being adjudged void is an operative fact to which legal consequences are attached, citing De Agbayani v. PNB, 4 thus:
 x x x. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act
must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case,
declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have
changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has
been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is
now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is
merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say
on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can
exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a
determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be
ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, - with respect to particular relations, individual and
corporate, and particular conduct, private and official." This language has been quoted with approval in a
resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. x x x.

xxx

x x x That before the decision they were not constitutionally infirm was admitted expressly. There is all the more
reason then to yield assent to the now prevailing principle that the existence of a statute or executive order prior
to its being adjudged void is an operative fact to which legal consequences are attached.

Amari now claims that "assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order
Nos. 525 and 654 are inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these
decrees and executive orders should only be applied prospectively from the finality of the Decision."

Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs vested rights. Amari
maintains that the new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old
doctrine in good faith, citing Spouses Benzonan v. Court of Appeals, 5 thus:

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in
Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these
decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of
the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive
effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the
law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application
of a law usually divests rights that have already become vested or impairs the obligations of contract and hence,
is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus,
we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different
view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the
old doctrine and acted on the faith thereof.

There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application
of doctrine to temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the
present petitions, however, we find no such equitable considerations. Not only did the private respondent apply for free
agricultural land when he did not need it and he had no intentions of applying it to the noble purposes behind the law, he
would now repurchase for only P327,995.00, the property purchased by the petitioners in good faith for P1,650,000.00 in
1979 and which, because of improvements and the appreciating value of land must be worth more than that amount now.

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the
property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the
disputed lot given to respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be
revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested
as of that time and cannot be impaired by the retroactive application of the Belisario ruling.
Amaris reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the prevailing law or
doctrine at the time of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the
public domain, and the Decision annulled the law or reversed this doctrine. Obviously, this is not the case here.

Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain. But since
the effectivity of the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of
the public domain. The 1987 Constitution continued this constitutional prohibition. The prevailing law before, during and
after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the
public domain. The Decision has not annulled or in any way changed the law on this matter. The Decision, whether made
retroactive or not, does not change the law since the Decision merely reiterates the law that prevailed since the effectivity
of the 1973 Constitution. Thus, De Agbayani, which refers to a law that is invalidated by a decision of the Court, has no
application to the instant case.

Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent
decision which adopts a new doctrine. In the instant case, there is no previous doctrine that is overruled by the Decision.
Since the case of Manila Electric Company v. Judge Castro-Bartolome,6 decided on June 29, 1982, the Court has applied
consistently the constitutional provision that private corporations cannot hold, except by lease, alienable lands of the
public domain. The Court reiterated this in numerous cases, and the only dispute in the application of this constitutional
provision is whether the land in question had already become private property before the effectivity of the 1973
Constitution.7 If the land was already private land before the 1973 Constitution because the corporation had possessed it
openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation
could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the
1973 Constitution, then the corporation could never hold, except by lease, such public land. Indisputably, the Decision
does not overrule any previous doctrine of the Court.

The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold,
except by lease, alienable lands of the public domain. This is one of the two main reasons why the Decision annulled the
Amended JVA. The other main reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and
beyond the commerce of man, a doctrine that has remained immutable since the Spanish Law on Waters of 1886.
Clearly, the Decision merely reiterates, and does not overrule, any existing judicial doctrine.

Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law
or doctrine. Since the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always
been part of the public domain. And since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973
Constitution, statutory law never allowed foreshore lands reclaimed by the government to be sold to private corporations.
The 1973 and 1987 Constitution enshrined and expanded the ban to include any alienable land of the public domain.

There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the
sale or transfer of the land may no longer be invalidated because of "weighty considerations of equity and social
justice."8 The invalidation of the sale or transfer may also be superfluous if the purpose of the statutory or constitutional
ban has been achieved. But none of these cases apply to Amari.

Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a
Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a citizen. 9 Similarly, where the alien who
buys the land subsequently acquires Philippine citizenship, the sale is validated since the purpose of the constitutional
ban to limit land ownership to Filipinos has been achieved.10 In short, the law disregards the constitutional disqualification
of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a
qualified party. In the instant case, however, Amari has not transferred the Freedom Islands, or any portion of it, to any
qualified party. In fact, Amari admits that title to the Freedom Islands still remains with PEA.11

The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned under the principle of
res judicata, provided the requisites for res judicata are present. 12 Under this principle, the courts and the parties are
bound by a prior final decision, otherwise there will be no end to litigation. As the Court declared in Toledo-Banaga v.
Court of Appeals,13 "once a judgement has become final and executory, it can no longer be disturbed no matter how
erroneous it may be." In the instant case, there is no prior final decision adjudicating the Freedom Islands to Amari.

There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good
faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant
case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the
filing of this petition, two Senate Committees14 had already approved on September 16, 1997 Senate Committee Report
No. 560. This Report concluded, after a well-publicized investigation into PEAs sale of the Freedom Islands to Amari, that
the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and
assuming all the attendant risks, including the annulment of the Amended JVA.

Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom Islands. Amari
states that it has paid PEA only P300,000,000.0015 out of the P1,894,129,200.00 total reimbursement cost agreed upon in
the Amended JVA. Moreover, Amari does not claim to have even initiated the reclamation of the 592.15 hectares of
submerged areas covered in the Amended JVA, or to have started to construct any permanent infrastructure on the
Freedom Islands. In short, Amari does not claim to have introduced any physical improvement or development on the
reclamation project that is the subject of the Amended JVA. And yet Amari claims that it had already spent a
"whopping P9,876,108,638.00" as its total development cost as of June 30, 2002.16 Amari does not explain how it spent
the rest of the P9,876,108,638.00 total project cost after paying PEA P300,000,000.00. Certainly, Amari cannot claim to
be an innocent purchaser in good faith and for value.

In its Supplement to Motion for Reconsideration, PEA claims that it is "similarly situated" as the Bases Conversion
Development Authority (BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps
and other military reservations. PEAs comparison is incorrect. The Decision states as follows:

As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell
reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling
reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in
the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but
alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands
become private lands. In the hands of the government agency tasked and authorized to dispose of alienable or
disposable lands of the public domain, these lands are still public, not private lands.

PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the
place of Department of Environment and Natural Resources ("DENR" for brevity) as the government agency
charged with leasing or selling all reclaimed lands of the public domain. In the hands of PEA, which took over
the leasing and selling functions of DENR, reclaimed foreshore lands are public lands in the same
manner that these same lands would have been public lands in the hands of DENR. BCDA is an entirely
different government entity. BCDA is authorized by law to sell specific government lands that have long been
declared by presidential proclamations as military reservations for use by the different services of the armed
forces under the Department of National Defense. BCDAs mandate is specific and limited in area, while PEAs
mandate is general and national. BCDA holds government lands that have been granted to end-user government
entities the military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the
reclaimed public lands, not as an end-user entity, but as the government agency "primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government."

In Laurel v. Garcia,17 cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign
Affairs, when no longer needed for public use, may be declared patrimonial property for sale to private parties provided
there is a law authorizing such act. Well-settled is the doctrine that public land granted to an end-user government agency
for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property
to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no
longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private
parties.

Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or
qualified private corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are
patrimonial property18 which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of
the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become
patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land
may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private
corporations.

We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to
reclaimed foreshore lands, thus:

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction
a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the
 public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several
hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x
x x any and all kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds, if
not thousands, of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands
are private lands. This will result in corporations amassing huge landholdings never before seen in this country - creating
the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of
constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than
1,024 hectares of public lands. The 1973 Constitution prohibited private corporations from acquiring any kind of public
land, and the 1987 Constitution has unequivocally reiterated this prohibition.

Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is
"enormous" and "it would be difficult for PEA to accomplish such project without the participation of private
corporations."19 The Decision does not bar private corporations from participating in reclamation projects and being paid
for their services in reclaiming lands. What the Decision prohibits, following the explicit constitutional mandate, is for
private corporations to acquire reclaimed lands of the public domain. There is no prohibition on the directors, officers and
stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction reclaimed alienable lands
of the public domain. They can acquire not more than 12 hectares per individual, and the land thus acquired becomes
private land.

Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a
quantum meruit basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of
nullity.

WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY.
The Motion to Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise
DENIED.

SO ORDERED.

G.R. No. 133250 November 11, 2003

FRANCISCO I. CHAVEZ, petitioner,

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

RESOLUTION

CARPIO, J.:

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

Many worry to death that the private investors will lose their investments, at most not more than one-half billion pesos in
legitimate expenses,2 if this Court voids the contract. No one seems to worry about the more than tens of billion pesos that
the hapless Filipino people will lose if the contract is allowed to stand. There are those who question these figures, but the
questions arise only because the private entity somehow managed to inveigle the government to sell the reclaimed lands
without public bidding in patent violation of the Government Auditing Code.
Fortunately for the Filipino people, two Senate Committees, the Senate Blue Ribbon Committee and the Committee on
Accountability of Public Officers, conducted extensive public hearings to determine the actual market value of the public
lands sold to the private entity. The Senate Committees established the clear, indisputable and unalterable fact that
the sale of the public lands is grossly and unconscionably undervalued based on official documents submitted
by the proper government agencies during the Senate investigation. We quote the joint report of these two Senate
Committees, Senate Committee Report No. 560, as approved by the Senate in plenary session on 27 September
1997:3

The Consideration for the Property

PEA, under the JVA, obligated itself to convey title and possession over the Property, consisting of approximately
One Million Five Hundred Seventy Eight Thousand Four Hundred Forty One (1,578,441) Square Meters for a total
consideration of One Billion Eight Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two
Hundred (P1,894,129,200.00) Pesos, or a price of One Thousand Two Hundred (P1,200.00) Pesos per square
meter.

According to the zonal valuation of the Bureau of Internal Revenue, the value of the Property is Seven
Thousand Eight Hundred Pesos (P7,800.00) per square meter. The Municipal Assessor of Paraaque,
Metro Manila, where the Property is located, pegs the market value of the Property at Six Thousand Pesos
(P6,000.00) per square meter. Based on these alone, the price at which PEA agreed to convey the property is a
pittance. And PEA cannot claim ignorance of these valuations, at least not those of the Municipal Assessors
office, since it has been trying to convince the Office of the Municipal Assessor of Paraaque to reduce the
valuation of various reclaimed properties thereat in order for PEA to save on accrued real property taxes.

PEAs justification for the purchase price are various appraisal reports, particularly the following:

(1) An appraisal by Vic T. Salinas Realty and Consultancy Services concluding that the Property is worth
P500.00 per square meter for the smallest island and P750.00 per square meter for the two other islands,
or a total of P1,170,000.00 as of 22 February 1995;

(2) An appraisal by Valencia Appraisal Corporation concluding that the Property is worth P850 per square
meter for Island I, P800 per square meter for Island II and P600 per square meter for the smallest island,
or a total of P1,289,732,000, also as of 22 February 1995; and

(3) An Appraisal by Asian Appraisal Company, Inc. (AACI), stating that the Property is worth
approximately P1,000 per square meter for Island I, P950 per square meter for Island II and P600 per
square meter for Island III, or a total of P1,518,805,000 as of 27 February 1995.

The credibility of the foregoing appraisals, however, are [sic] greatly impaired by a subsequent appraisal report of
AACI stating that the property is worth P4,500.00 per square meter as of 26 March 1996. Such discrepancies in
the appraised value as appearing in two different reports by the same appraisal company submitted within a span
of one year render all such appraisal reports unworthy of even the slightest consideration. Furthermore, the
appraisal report submitted by the Commission on Audit estimates the value of the Property to be
approximately P33,673,000,000.00, or P21,333.07 per square meter.

There were also other offers made for the property from other parties which indicate that the Property has been
undervalued by PEA. For instance, on 06 March 1995, Mr. Young D. See, President of Saeil Heavy Industries
Co., Ltd., (South Korea), offered to buy the property at P1,400.00 and expressed its willingness to issue a stand-
by letter of credit worth $10 million. PEA did not consider this offer and instead finalized the JVA with AMARI.
Other offers were made on various dates by Aspac Management and Development Group Inc. (for P1,600 per
square meter), Universal Dragon Corporation (for P1,600 per square meter), Cleene Far East Manila Incorporated
and Hyosan Prime Construction Co. Ltd. which had prepared an Irrevocable Clean Letter of Credit for
P100,000,000.

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

x x x

Even if we simply assume that the market value of the Property is half of the market value fixed by the Municipal
Assessors Office of Paraaque for lands along Roxas Boulevard, or P3,000.00 per square meter, the
Government now stands to lose approximately P2,841,193,800.00. But an even better assumption would be that
the value of the Property is P4,500.00 per square meter, as per the AACI appraisal report dated 26 March 1996,
since this is the valuation used to justify the issuance of P4 billion worth of shares of stock of Centennial City Inc.
(CCI) in exchange for 4,800,000 AMARI shares with a total par value of only P480,000,000.00. With such
valuation, the Governments loss will amount to P5,208,855,300.00.

Clearly, the purchase price agreed to by PEA is way below the actual value of the Property, thereby
subjecting the Government to grave injury and enabling AMARI to enjoy tremendous benefit and
advantage. (Emphasis supplied)

The Senate Committee Report No. 560 attached the following official documents from the Bureau of Internal
Revenue, the Municipal Assessor of Paraaque, Metro Manila, and the Commission on Audit:

1. Annex "M," Certified True Copy of BIR Zonal Valuations as certified by Antonio F. Montemayor, Revenue
District Officer. This official document fixed the market value of the 157.84 hectares at P7,800 per square meter.

2. Annex "N," Certification of Soledad S. Medina-Cue, Municipal Assessor, Paraaque, dated 10 December
1996. This official document fixed the market value at P6,000 per square meter.

3. Exhibit "1-Engr. Santiago," the Appraisal Report of the Commission on Audit. This official document fixed
the market value at P21,333.07 per square meter.

Whether based on the official appraisal of the BIR, the Municipal Assessor or the Commission on Audit, the P1,200 per
square meter purchase price, or a total of P1.894 billion for the 157.84 hectares of government lands, is grossly and
unconscionably undervalued. The authoritative appraisal, of course, is that of the Commission on Audit which valued the
157.84 hectares at P21,333.07 per square meter or a total of P33.673 billion. Thus, based on the official appraisal of
the Commission on Audit, the independent constitutional body that safeguards government assets, the actual
loss to the Filipino people is a shocking P31.779 billion.

This gargantuan monetary anomaly, aptly earning the epithet "Grandmother of All Scams," 4 is not the major defect of this
government contract. The major flaw is not even the P1.754 billion in commissions the Senate Committees discovered
the private entity paid to various persons to secure the contract,5 described in Senate Report No. 560 as follows:

A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in
behalf of AMARI, on the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co)
and Mr. Chua Hun Siong (a.k.a. Frank Chua), on the other, sets forth various payments AMARI paid or agreed
to pay the aforesaid stockholders by way of fees for "professional efforts and services in successfully
negotiating and securing for AMARI the Joint Venture Agreement", as follows:

Form of Payment Paid/Payable On Amount

Managers Checks 28 April 1995 P 400,000,000.00
Managers Checks Upon signing of letter 262,500,000.00
10 Post Dated Checks (PDCs) 60 days from date of letter 127,000,000.00
24 PDCs 31 Aug. 95 to 31 Jan. 98 150,000,000.00
48 PDCs Monthly, over a 12-month 357,363,050.00
pd. from date of letter
Cash bonus When sale of land begins not exceeding
157,844,100.00
Developed land from Project Upon completion of each Costing
 phase
300,000,000.00
TOTAL P1,754,707,150.00
==============

Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was
approved by the AMARI Board.6 (Emphasis supplied)

The private entity that purchased the reclaimed lands for P1.894 billion expressly admitted before the Senate Committees
that it spent P1.754 billion in commissions to pay various individuals for "professional efforts and services in
successfully negotiating and securing" the contract. By any legal or moral yardstick, the P1.754 billion in
commissions obviously constitutes bribe money. Nonetheless, there are those who insist that the billions in
investments of the private entity deserve protection by this Court. Should this Court establish a new doctrine by elevating
grease money to the status of legitimate investments deserving of protection by the law? Should this Court reward the
patently illegal and grossly unethical business practice of the private entity in securing the contract? Should we allow
those with hands dripping with dirty money equitable relief from this Court?

Despite these revolting anomalies unearthed by the Senate Committees, the fatal flaw of this contract is that it glaringly
violates provisions of the Constitution expressly prohibiting the alienation of lands of the public domain.

Thus, we now come to the resolution of the second Motions for Reconsideration 7 filed by public respondent Public Estates
Authority ("PEA") and private respondent Amari Coastal Bay Development Corporation ("Amari"). As correctly pointed out
by petitioner Francisco I. Chavez in his Consolidated Comment, 8 the second Motions for Reconsideration raise no new
issues.

However, the Supplement to "Separate Opinion, Concurring and Dissenting" of Justice Josue N. Bellosillo brings to the
Courts attention the Resolutions of this Court on 3 February 1965 and 24 June 1966 in L- 21870 entitled "Manuel O.
Ponce, et al. v. Hon. Amador Gomez, et al." and No. L-22669 entitled "Manuel O. Ponce, et al. v. The City of Cebu, et al."
("Ponce Cases"). In effect, the Supplement to the Dissenting Opinion claims that these two Resolutions serve as
authority that a single private corporation like Amari may acquire hundreds of hectares of submerged lands, as
well as reclaimed submerged lands, within Manila Bay under the Amended Joint Venture Agreement ("Amended
JVA").

We find the cited Ponce Cases inapplicable to the instant case.

First, as Justice Bellosillo himself states in his supplement to his dissent, the Ponce Cases admit that "submerged lands
still belong to the National Government."9 The correct formulation, however, is that submerged lands are owned by
the State and are inalienable. Section 2, Article XII of the 1987 Constitution provides:

All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.
With the exception of agricultural lands, all other natural resources shall not be alienated. x x x. (Emphasis
supplied)

Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources.
Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. 10This is also
true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution.11

This is why the Cebu City ordinance merely granted Essel, Inc. an "irrevocable option" to purchase the foreshore
lands after the reclamation and did not actually sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the
Ponce Cases the option to purchase referred to reclaimed lands, and not to foreshore lands which are inalienable.
Reclaimed lands are no longer foreshore or submerged lands, and thus may qualify as alienable agricultural lands of the
public domain provided the requirements of public land laws are met.

In the instant case, the bulk of the lands subject of the Amended JVA are still submerged lands even to this very day,
and therefore inalienable and outside the commerce of man. Of the 750 hectares subject of the Amended JVA, 592.15
hectares or 78% of the total area are still submerged, permanently under the waters of Manila Bay. Under the
Amended JVA, the PEA conveyed to Amari the submerged lands even before their actual reclamation, although the
documentation of the deed of transfer and issuance of the certificates of title would be made only after actual reclamation.

The Amended JVA states that the PEA "hereby contributes to the Joint Venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the Reclamation Area."12 The Amended JVA further
states that "the sharing of the Joint Venture Proceeds shall be based on the ratio of thirty percent (30%) for PEA and
seventy percent (70%) for AMARI."13 The Amended JVA also provides that the PEA "hereby designates AMARI to
perform PEAs rights and privileges to reclaim, own and develop the Reclamation Area." 14 In short, under the Amended
JVA the PEA contributed its rights, privileges and ownership over the Reclamation Area to the Joint Venture
which is 70% owned by Amari. Moreover, the PEA delegated to Amari the right and privilege to reclaim the
submerged lands.

The Amended JVA mandates that the PEA had "the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARIs Land share based on the Land Allocation Plan." 15 The Amended JVA also
provides that "PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the proper
certificates of title covering AMARIs Land Share in the name of AMARI, x x x."16

In the Ponce Cases, the City of Cebu retained ownership of the reclaimed foreshore lands and Essel, Inc. only had an
"irrevocable option" to purchase portions of the foreshore lands once actually reclaimed. In sharp contrast, in the instant
case ownership of the reclamation area, including the submerged lands, was immediately transferred to the joint venture.
Amari immediately acquired the absolute right to own 70% percent of the reclamation area, with the deeds of transfer to
be documented and the certificates of title to be issued upon actual reclamation. Amaris right to own the submerged
lands is immediately effective upon the approval of the Amended JVA and not merely an option to be exercised in the
future if and when the reclamation is actually realized. The submerged lands, being inalienable and outside the commerce
of man, could not be the subject of the commercial transactions specified in the Amended JVA.

Second, in the Ponce Cases the Cebu City ordinance granted Essel, Inc. an "irrevocable option" to purchase from Cebu
City not more than 70% of the reclaimed lands. The ownership of the reclaimed lands remained with Cebu City until Essel,
Inc. exercised its option to purchase. With the subsequent enactment of the Government Auditing Code (Presidential
Decree No. 1445) on 11 June 1978, any sale of government land must be made only through public bidding. Thus, such
an "irrevocable option" to purchase government land would now be void being contrary to the requirement of public
bidding expressly required in Section 7917 of PD No. 1445. This requirement of public bidding is reiterated in Section
37918 of the 1991 Local Government Code.19 Obviously, the ingenious reclamation scheme adopted in the Cebu City
ordinance can no longer be followed in view of the requirement of public bidding in the sale of government lands. In the
instant case, the Amended JVA is a negotiated contract which clearly contravenes Section 79 of PD No. 1445.

Third, Republic Act No. 1899 authorized municipalities and chartered cities to reclaim foreshore lands. The two
Resolutions in the Ponce Cases upheld the Cebu City ordinance only with respect to foreshore areas, and nullified the
same with respect to submerged areas. Thus, the 27 June 1965 Resolution made the injunction of the trial court against
the City of Cebu "permanent insofar x x x as the area outside or beyond the foreshore land proper is concerned."

As we held in the 1998 case of Republic Real Estate Corporation v. Court of Appeals,20 citing the Ponce Cases, RA
No. 1899 applies only to foreshore lands, not to submerged lands. In his concurring opinion in Republic Real Estate
Corporation, Justice Reynato S. Puno stated that under Commonwealth Act No. 141, "foreshore and lands under water
were not to be alienated and sold to private parties," and that such lands "remained property of the State." Justice Puno
emphasized that "Commonwealth Act No. 141 has remained in effect at present." The instant case involves principally
submerged lands within Manila Bay. On this score, the Ponce Cases, which were decided based on RA No. 1899, are not
applicable to the instant case.

Fourth, the Ponce Cases involve the authority of the City of Cebu to reclaim foreshore areas pursuant to a general law,
RA No. 1899. The City of Cebu is a public corporation and is qualified, under the 1935, 1973, and 1987 Constitutions, to
hold alienable or even inalienable lands of the public domain. There is no dispute that a public corporation is not covered
by the constitutional ban on acquisition of alienable public lands. Both the 9 July 2002 Decision and the 6 May 2003
Resolution of this Court in the instant case expressly recognize this.

Cebu City is an end user government agency, just like the Bases Conversion and Development Authority or the
Department of Foreign Affairs.21 Thus, Congress may by law transfer public lands to the City of Cebu to be used for
municipal purposes, which may be public or patrimonial. Lands thus acquired by the City of Cebu for a public purpose
may not be sold to private parties. However, lands so acquired by the City of Cebu for a patrimonial purpose may be sold
to private parties, including private corporations.
However, in the instant case the PEA is not an end user agency with respect to the reclaimed lands under the Amended
JVA. As we explained in the 6 May 2003 Resolution:

PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the
place of the Department of Environment and Natural Resources ("DENR" for brevity) as the government agency
charged with leasing or selling all reclaimed lands of the public domain. In the hands of PEA, which took over
the leasing and selling functions of DENR, reclaimed foreshore (or submerged lands) lands are public
lands in the same manner that these same lands would have been public lands in the hands of
DENR. (Emphasis supplied)

Our 9 July 2002 Decision explained the rationale for treating the PEA in the same manner as the DENR with respect to
reclaimed foreshore or submerged lands in this wise:

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction
a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the
public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer
several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in
only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong. (Emphasis supplied)

Finally, the Ponce Cases were decided under the 1935 Constitution which allowed private corporations to acquire
alienable lands of the public domain. However, the 1973 Constitution prohibited private corporations from acquiring
alienable lands of the public domain, and the 1987 Constitution reiterated this prohibition. Obviously, the Ponce Cases
cannot serve as authority for a private corporation to acquire alienable public lands, much less submerged lands, since
under the present Constitution a private corporation like Amari is barred from acquiring alienable lands of the public
domain.

Clearly, the facts in the Ponce Cases are different from the facts in the instant case. Moreover, the governing
constitutional and statutory provisions have changed since the Ponce Cases were disposed of in 1965 and 1966 through
minute Resolutions of a divided (6 to 5) Court.

This Resolution does not prejudice any innocent third party purchaser of the reclaimed lands covered by the Amended
JVA. Neither the PEA nor Amari has sold any portion of the reclaimed lands to third parties. Title to the reclaimed lands
remains with the PEA. As we stated in our 9 July 2002 Decision:

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly
government owned corporation performing public as well as proprietary functions. No patent or certificate of title
has been issued to any private party. No one is asking the Director of Lands to cancel PEAs patent or certificates
of title. In fact, the thrust of the instant petition is that PEAs certificates of title should remain with PEA, and the
land covered by these certificates, being alienable lands of the public domain, should not be sold to a private
corporation.

As we held in our 9 July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution." In our 6 May 2003 Resolution, we DENIED with FINALITY respondents Motions for Reconsideration.
Litigations must end some time. It is now time to write finis to this "Grandmother of All Scams."

WHEREFORE, the second Motions for Reconsideration filed by Public Estates Authority and Amari Coastal Bay
Development Corporation are DENIED for being prohibited pleadings. In any event, these Motions for Reconsideration
have no merit. No further pleadings shall be allowed from any of the parties.

SO ORDERED.