DIGEST THE FOLLOWING CASES
Dumo vs. Republic GR 218269 June 6, 2018
(DUE SEPT 29, 2018)
Narra Nickel Mining vs. Redmont Cons. Mines,
G.R. No. 195580, Jan. 28, 2015
ISSUE #1: What is the “grandfather rule” in
determining Filipino control and ownership over
a corporation? When do you apply the
“grandfather rule”?
RULING: Grandfather Rule is "the method by which
the percentage of Filipino equity in a corporation
engaged in nationalized and/or partly nationalized
areas of activities, provided for under the
Constitution and other nationalization laws is
computed, in cases where corporate shareholders are
present, by attributing the nationality of the second
or even subsequent tier of ownership to determine
the nationality of the corporate shareholder." Thus,
to arrive at the actual Filipino ownership and control
in a corporation, both the direct and indirect
shareholdings in the corporation are determined.
The "Grandfather Rule" is applied specifically in cases
where the corporation has corporate stockholders
with alien stockholdings, otherwise, if the rule is not
applied, the presence of such corporate stockholders
could diminish the effective control of Filipinos. It is
only when the Control Test is first complied with that
the Grandfather Rule may be applied. Moreover, a
resort to the Grandfather Rule is necessary if there is
doubt, based on the attendant facts and
circumstances of the case, in the 60/40 Filipino
equity ownership in the corporation.
ISSUE #2: Does the application of the
“grandfather rule” eschew the control test?
RULING: No, it does not. The Court did not foreclose
the application of the Control Test in determining
which corporations may be considered as Philippine
nationals. Instead, the used of the Grandfather Rule is
a "supplement" to the Control Test so that the intent
underlying the averted Sec. 2, Art. XII of the
Constitution be given effect. The Control Test and the
Grandfather Rule are not incompatible ownership-
determinant methods that can only be applied
alternative to each other. These methods can, if
appropriate, be used cumulatively in the
determination of the ownership and control of
corporations engaged in fully or partly nationalized
activities.
Issue: Does the DENR Secretary have the power to
classify unclassified and agricultural lands of the
public domain as alienable and disposable lands?
Ruling: Qualify. Unclassified: no, agricultural land:
yes. Under Sec. 13 of PD 705 or the Revised Forestry
Code of the Philippines, the DENR Secretary has been
delegated by law the discretionary power to classify
as alienable and disposable, forest lands of the public
domain no longer necessary for forest services. Sec. 3
Art XII of the Consti states that “alienable lands of the
public domain shall be limited to agricultural lands”.
Thus, the unclassified lands of the public domain, not
needed for forest reserve purposes, must first be
declared agricultural lands of the public domain
before the Secretary can declare them alienable and
disposable. Under the mentioned Sec 13 of PD 705,
the Secretary has no discretionary power to classify
unclassified lands of the public domain not needed
for forest reserve purposes, into agricultural lands.
Once so declared as agricultural lands of the public
domain, the DENR secretary can then invoke his
delegated power under Sec. 13 PD 705 to declare
such agricultural lands as alienable and disposable
lands of the public domain.
Republic vs. Cabrera, G.R. No. 218418, Nov. 8,
2017
Issue: In reversion proceedings, who bears the
burden of proving that the property in question
was inalienable at the time it was decreed?
Ruling: Reversion proceeding is the manner through
which the State seeks to revert land to the mass of the
public domain; it is proper when public land is
fraudulently awarded and disposed of in favor of
private individuals or corporations, or when a person
obtains a title under the Public Land Act which
includes, by oversight, lands which cannot be
registered under the Torrens system as they form
part of the public domain. Owing to the nature of
reversion proceedings and the outcome which a
favorable decision therein entails, the State bears the
burden to prove that the land previously decreed or
adjudicated in favor of the defendant constitutes land
which cannot be owned by private individuals.
Republic v .Alaminos
GR No 189723 July 11, 2018
Issue: In land registration proceedings who has a
burden of proving that a piece of land is
inalienable, indisposable, hence incapable of
registration?
Ruling:
The burden of proving that the land is
alienable and disposable is the person applying for
registration. (Dilijd kayo super responsive ang ruling
sa issue ni sir but maonisiya.)
The Regalian Doctrine, embodied in our Constitution,
decrees that all lands of the public domain belong to
the State, the source of any asserted right to any
ownership of land. Corollary to the doctrine, lands
not appearing to be clearly within private ownership
are presumed to belong to the State. Hence, while a
burden of proof in registration proceedings exists, it
is this: that of overcoming the presumption of State
ownership of lands of the public domain. Logically,
such burden lies on the person applying for
registration.
In order to overcome the presumption of
State ownership of public dominion lands, the
applicant must present incontrovertible evidence
that the land subject of the application is alienable or
disposable. The CENRO certification is no such
evidence.
Yinlu Bicol Mining Corp. vs Trans-Asia Oil &
EDC, GR no. 207942, Jan 12, 2015
Issue: are rights pertaining to mining patents
issued pursuant to the Phlippine Bill of 1902
and existing prior to November 15, 1935,
vested rights that cannot be impaired?
Ruling: Yes. Under the 1935 Constitution, which
took effect on November 15 1935, the alienation
of natural resources, with the exception of public
agricultural land, was expressly prohibited. The
natural resources being referred therein
included mineral lands of public domain, but not
mineral lands that at the time the 1935
Constitution took effect no longer formed part of
the public domain. Consequently, such
prohibition against the alienation of natural
resources did not apply to a mining claim or
patent existing prior to November 15, 1935.
Even without a patent, the possessory right of a
qualified locator after discovery of minerals
upon the claim is a property right in the fullest
sense, unaffected by the fact that the paramount
title to the land is in the Government, and it is
capable of transfer by conveyance, inheritance,
or devise. we must conclude that, inasmuch as
the petitioner had located, held and perfected his
location of the mineral lands inquestion, and had
actually discovered petroleum oil therein, he had
acquired a property right in said claims; that said
Act No. 2932, which deprives him of such right,
without due process of law, is in conflict with
section 3 of the Jones Law, and is therefore
unconstitutional and void.
Lim vs. Gamosa, G.R. No. 193964, Dec 2, 2015
Issue: What proof is required in asserting the
right of ancestral property?
Ruling: The right of ancestral property requires
historical proof which, of course, must proceed
from allegations in the petition. As noted in the
separate opinion of former Chief Justice Reynato
S. Puno in Cruz v. Sec of Environment & Natural
Resources, the IPRA grants to ICCs/IPs rights
over ancestral domains and ancestral lands
where land is the central element of the IPs’
existence.
Issue: Were the Tagbanuas able to establish
this requisite proof?
Ruling: No. Respondents made no allegation
outlining and tracing the history of their
indigenous ownership of domain and land. It is
also significant to note that respondents do not
identify themselves with other Tagbanuas who
have been awarded a Certificate of Ancestral
Domain Claim as of 1998. Palpably, in the factual
milieu obtaining herein, the NCIP does not have
ipso facto jurisdiction over the petition of
respondents just by the mere expedient that
their petition involves rights of ICCs/IPs. Section
66 of the IPRA, even as it grants jurisdiction to
the NCIP over all claims and disputes involving
rights of ICCs/IPs, requires that the opposing
parties are both ICCs/IPs who have exhausted all
their remedies under their customs and
customary law before bringing their claim and
dispute to the NCIP.
Begnaen vs. Caligtan, G.R. No. 189852, Aug. 17,
2016
Issue: Did the land [owned since time
immemorial ] cease to become an ancestral land
upon purchased by respondents?
Ruling: No. As defined, "ancestral lands are lands
occupied, possessed and utilized by individuals,
families and clans who are members of the ICCs/IPs
since time immemorial, by themselves or through
their predecessors-in-interest, under claims of
individual or traditional group ownership,
continuously, to the present xxx." Thus, the claim of
petitioner that when land is purchased, it is no longer
within the ambit of ancestral land/domain, is devoid
of merit. Furthermore, when questioned, both parties
admitted that the land subject of their dispute and of
the case, was ancestral land.
Note:FYI definition of ancestral land:
Section 3(a) and (b) and Section 56 of R.A. 8371
provide for a more comprehensive definition of
ancestral domains and ancestral lands: SECTION 3.
Definition of Terms. - For purposes of this Act, the
following terms shall mean: a) Ancestral Domains -
Subject to Section 56 hereof, refers to all areas
generally belonging to ICCs/IPs comprising lands,
inland waters, coastal areas, and natural resources
therein, held under a claim of ownership, occupied or
possessed by ICCs/IPs, by themselves or through
their ancestors, communally or individually since
time immemorial, continuously to the present except
when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a
consequence of government projects or any other
voluntary dealings entered into by government and
private individuals/corporations, and which are
necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands,
forests, pasture, residential, agricultural, and other
lands individually owned whether alienable and
disposable or otherwise, hunting grounds, burial
grounds, worship areas, bodies of water, mineral and
other natural resources, and lands which may no
longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their
subsistence and traditional activities, particularly the
home ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators;
b) Ancestral Lands - Subject to Section 56 hereof,
refers to lands occupied, possessed and utilized by
individuals, families and clans who are members of
the /CCs/IPs since time immemorial, by themselves
or through their predecessors-in-interest, under
claims of individual or traditional group ownership,
continuously, to the present except when interrupted
by war, force majeure or displacement by force,
deceit, stealth, or as a consequence of government
projects and other voluntary dealings entered into by
government and private individuals/corporations,
including, but not limited to, residential lots, rice
terraces or paddies, private forests,• swidden farms
and tree lots.
SECTION 56. Existing Property Rights Regimes. -
Property rights within the ancestral domains already
existing and/or vested upon effectivity of this Act,
shall be recognized and respected.
Drugstores Association vs NCDA GR 194561 Sept.
14, 2016
Issue: For failing to provide just compensation to
petitioners and other similarly situated
drugstores, is the mandated PWD an invalid
exercise of the power of eminent domain?
Ruling: No. The court ruled that it is a valid exercise
of police power, as in the case of Carlos Superdrug v.
DSWD. Police power is the power of the state to
promote public welfare by restraining and regulating
the use of liberty and property. On the other hand,
the power of eminent domain is the inherent right of
the state (and of those entities to which the power
has been lawfully delegated) to condemn private
property to public use upon payment of just
compensation. In the exercise of police power,
property rights of private individuals are subjected to
restraints and burdens in order to secure the general
comfort, health, and prosperity of the state. A
legislative act based on the police power requires the
concurrence of a lawful subject and a lawful method.
In more familiar words, (a) the interests of the public
generally, as distinguished from those of a particular
class, should justify the interference of the state; and
(b) the means employed are reasonably necessary for
the accomplishment of the purpose and not unduly
oppressive upon individuals.
It has a valid subject considering that the concept of
public use is no longer confined to the traditional
notion of use by the public, but held synonymous with
public interest, public benefit, public welfare, and
public convenience. As in the case of senior citizens,
the discount privilege to which the PWDs are entitled
is actually a benefit enjoyed by the general public to
which these citizens belong. The means employed in
invoking the active participation of the private sector,
in order to achieve the purpose or objective of the
law, is reasonably and directly related. Also, the
means employed to provide a fair, just and quality
health care to PWDs are reasonably related to its
accomplishment, and are not oppressive, considering
that as a form of reimbursement, the discount
extended to PWDs in the purchase of medicine can be
claimed by the establishments as allowable tax
deductions pursuant to Section 32 of R.A. No. 9442 as
implemented in Section 4 of DOF Revenue
Regulations No. 1-2009. Otherwise stated, the
discount reduces taxable income upon which the tax
liability of the establishments is computed.
Issue: Does the priority given to PWDs under RA
7277 have constitutional basis?
Ruling: Yes.
ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY
Section 6. The use of property bears a social function,
and all economic agents shall contribute to the
common good. Individuals and private groups,
including corporations, cooperatives, and similar
collective organizations, shall have the right to own,
establish, and operate economic enterprises, subject
to the duty of the State to promote distributive justice
and to intervene when the common good so
demands.
ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
Section 11. The State shall adopt an integrated and
comprehensive approach to health development
which shall endeavor to make essential goods, health
and other social services available to all the people at
affordable cost. There shall be priority for the needs
of the underprivileged, sick, elderly, disabled, women,
and children. The State shall endeavor to provide free
medical care to paupers.
Ang vs. So, G.R. No. 182252, Aug, 3, 2016
Issue: Is the transfer and registration of land by a
Chinese in the favor of a Filipino ward, valid and
constitutional?
Ruling: No. Our Constitution clearly reserves for
Filipino citizens or corporations at least sixty percent
of the capital of which is owned by Filipinos the right
to acquire lands of the public domain. The
prohibition against aliens owning lands in the
Philippines is subject only to limited constitutional
exceptions, and not even an implied trust can be
permitted on equity considerations.
Much as We sympathize with the plight of a mother
who adopted an infant son, only to have her
ungrateful ward eject her from her property during
her twilight years, We cannot grant her prayer.
Applying the above rules to the present case, We find
that she acquired the subject parcels of land in
violation of the constitutional prohibition against
aliens owning real property in the Philippines.
Axiomatically, the properties in question cannot be
legally reconveyed to one who had no right to own
them in the first place. This being the case, We no
longer find it necessary to pass upon the question of
respondent SySo's substitution in these proceedings
Ang vs. So, G.R. No. 182252, Aug, 3, 2016
Issue: Can the property be subject to escheat
proceedings by the State?
Ruling: Yes. The Solicitor Generalmay initiate an
action for reversion or escheat of the land to the
State. In sales of real estate to aliens incapable of
holding title thereto by virtue of the provisions of
the Constitution, both the vendor and the vendee
are deemed to have committed the constitutional
violation. Being in pari delicto the courts will not
afford protection to either party. The proper party
who could assail the sale is the Solicitor General.
Fullido v. Grilli
GR No 215014, Feb 29, 2016
Issue: Did the lease contract and the MOA in favor
of a foreigner circumvent the constitutional
restraint against foreign ownership of lands?
Ruling:
Yes. The prohibition on the transfer of lands
to aliens was adopted in the present 1987
Constitution, under Sections 2, 3 and 7 of Article XII
thereof. Agricultural lands, whether public or private,
include residential, commercial and industrial lands.
The purpose of prohibiting the transfer of lands to
foreigners is to uphold the conservation of our
national patrimony and ensure that agricultural
resources remain in the hands of Filipino citizens.The
prohibition, however, is not limited to the sale of
lands to foreigners. It also covers leases of lands
amounting to the transfer of all or substantially all
the rights of dominion.
The dominion of Grilli (the foreigner) over
the land had been firmly cemented by the terms of
the MOA as it reinforced Grilli’s property rights over
the land because, first, it brazenly dictated that
ownership of the land and the residential building
resided with him. Second, Fullido was expressly
prohibited from transferring the same without Grilli’s
conformity. Third, Grilli would permanently reside in
the residential building. Fourth, Grilli may
capriciously dispose Fullido’s property once their
common-law relationship is terminated. This right
was recently exercised when the land was
transferred to Guibone. Lastly, Fullido shall be
compelled to transfer the land to Grilli if a law would
be passed allowing foreigners to own real properties
in the Philippines.
Issue: Is Pari Delicto Doctrine applicable in this
case?
Ruling:
No. The application of the doctrine of in pari
delicto is not always rigid. An accepted exception
arises when its application contravenes well-
established public policy. In this jurisdiction, public
policy has been defined as that principle of the law
which holds that no subject or citizen can lawfully do
that which has a tendency to be injurious to the
public or against the public good. Thus, whenever
public policy is advanced by either party, they may be
allowed to sue for relief against the transaction.
In the present case, both Grilli and Fullido were
undoubtedly parties to a void contract. Fullido,
however, was not barred from filing the present
petition before the Court because the matters at hand
involved an issue of public policy, specifically the
Constitutional prohibition against land ownership by
aliens. As pronounced in Philippine Banking
Corporation v. Lui She, the said constitutional
provision would be defeated and its continued
violation sanctioned if the lands continue to remain
in the hands of a foreigner. Thus, the doctrine of in
pari delicto shall not be applicable in this case.
Encarnacion vs. Johnson, G.R. No. 192285,
July 11, 2018
Issue: Man an alien own private lands by
virtue of an execution sale?
Ruling: No. An Alien cannot acquire land through
participating in a public auction sale. While
mindful of the ruling that the petitioners in this
case cannot file a petition for annulment of
judgment; we nevertheless cannot turn a blind
eye to the blatant violation of the Constitution’s
prohibition on foreign ownership of lands. The
fundamental law is clear that aliens, whether
individuals or corporations are disqualified from
acquiring lands of public domain. The rule is
clear and inflexible: aliens are absolutely not
allowed to acquire public or private lands in the
Philippines, save only in constitutionally
recognized exceptions.
In this case, it is undisputed that respondent is a
Canadian citizen. Being, an alien, he is absolutely
prohibited from participating in execution sale,
which has for its objects, the transfer of
ownership and title of property to the highest
bidder. What cannot be legally done directly
cannot be done indirectly.
Roy vs. Gamboa, G.R. 207246, Nov 22, 2016
Issue: Did the SEC commit grave abuse of
discretion amounting to lack or excess of
jurisdiction when it issued SEC MC No. 8?
Ruling: No. The Court holds that, even if the
resolution of the procedural issues were
conceded in favor of petitioners, the petitions,
being anchored on Rule 65, must nonetheless fail
because the SEC did not commit grave abuse of
discretion amounting to lack or excess of
jurisdiction when it issued SECMC No. 8. To the
contrary, the Court finds SEC-MC No. 8 to have
been issued in fealty to the Gamboa Decision and
Resolution. To recall, the sole issue in the
Gamboa case was: "whether the term 'capital' in
Section 11, Article XII of the Constitution refers
to the total common shares only or to the total
outstanding capital stock (combined total of
common and non-voting preferred shares) of
PLDT, a public utility." The Court directly
answered the issue and consistently defined the
term "capital" as follows: x x x
The term "capital" in Section 11, Article
XII of the Constitution refers only to
shares of stock entitled to vote in the
election of directors, and thus in the
present case only to common shares, and
not to the total outstanding capital stock
comprising both common and nonvoting
preferred shares.
Section 2 of SEC-MC No. 8 clearly incorporates
the Voting Control Test or the controlling
interest requirement. In fact, Section 2 goes
beyond requiring a 60-40 ratio in favor of
Filipino nationals in the voting stocks; it
moreover requires the 60-40 percentage
ownership in the total number of outstanding
shares of stock, whether voting or not. The SEC
formulated SEC-MC No. 8 to adhere to the Court's
unambiguous pronouncement that "[f]ull
beneficial ownership of 60 percent of the
outstanding capital stock, coupled with 60
percent of the voting rights is required." Clearly,
SEC-MC No. 8 cannot be said to have been issued
with grave abuse of discretion.
Issue: Must the 60% Filipino equity
requirement be applied to each class of
shares?
Ruling: No. In the exhaustive review made by the
Court in the Gamboa Resolution of the
deliberations of the Constitutional Commission,
the opinions of the framers of the 1987
Constitution, the opinions of the SEC and the DOJ
as well as the provisions of the FIA, its
implementing rules and its predecessor statutes,
the intention to apply the voting control test and
the beneficial ownership test was not mentioned
in reference to "each class of shares." To be sure,
the application of the 60-40 Filipino-foreign
ownership requirement separately to each class
of shares, whether common, preferred non-
voting, preferred voting or any other class of
shares fails to understand and appreciate the
nature and features of stocks as financial
instruments. Nowhere in the discussion of the
definition of the term "capital" in Section 11,
Article XII of the 1987 Constitution in the
Gamboa Decision did the Court mention the 60%
Filipino equity requirement to be applied to each
class of shares. The definition of "Philippine
national" in the FIA and expounded in its IRR,
which the Court adopted in its interpretation of
the term "capital", does not support such
application. To revisit or even clarify the
unequivocal definition of the term "capital" as
referring "only to shares of stock entitled to
vote in the election of directors" and apply the
60% Filipino ownership requirement to each
class of share is effectively and unwarrantedly
amending or changing the Gamboa Decision and
Resolution. The Gamboa Decision and Resolution
Doctrine did NOT make any definitive ruling that
the 60% Filipino ownership requirement was
intended to apply to each class of share.
READ THE FOLLOWING CASES
Resident Marine Mammals vs. Reyes, G.R. No.
180771, Apr. 21, 2015
Issue: Is Service Contract No. 46 (SC-46), which
allowed the exploration, development, and
exploitation of petroleum resources within Tañon
Strait, valid and constitutional?
Ruling: No, SC-46 is indeed null and void for
noncompliance with the requirements of the 1987
Constitution. In La Bugal case, we held that the
deletion of the words "service contracts" in the 1987
Constitution did not amount to a ban on them per se.
The following are the safeguards this Court
enumerated in La Bugal:
Such service contracts may be entered into only with
respect to minerals, petroleum and other mineral
oils. The grant thereof is subject to several
safeguards, among which are these requirements:
(1) The service contract shall be crafted in
accordance with a general law that will set standard
or uniform terms, conditions and requirements,
presumably to attain a certain uniformity in
provisions and avoid the possible insertion of terms
disadvantageous to the country.
(2) The President shall be the signatory for the
government because, supposedly before an
agreement is presented to the President for
signature, it will have been vetted several times over
at different levels to ensure that it conforms to law
and can withstand public scrutiny.
(3) Within thirty days of the executed agreement, the
President shall report it to Congress to give that
branch of government an opportunity to look over
the agreement and interpose timely objections, if any
While the Court finds that Presidential Decree No. 87
is sufficient to satisfy the requirement of a general
law, the absence of the two other conditions, that the
President be a signatory to SC-46, and that Congress
be notified of such contract, renders it null and void.
Paragraph 4, Section 2, Article XII of the 1987
Constitution requires that the President himself enter
into any service contract for the exploration of
petroleum. SC-46 appeared to have been entered into
and signed only by the DOE through its then
Secretary, Vicente S. Perez, Jr., contrary to the said
constitutional requirement. Moreover, public
respondents have neither shown nor alleged that
Congress was subsequently notified of the execution
of such contract.
Public respondents' implied argument that based on
the "alter ego principle," their acts are also that of
then President Macapagal-Arroyo's, cannot apply in
this case. While the requirements in executing service
contracts in paragraph 4, Section 2 of Article XII of
the 1987 Constitution seem like mere formalities,
they, in reality, take on a much bigger role. As we
have explained in La Bugal, they are the safeguards
put in place by the framers of the Constitution to
"eliminate or minimize the abuses prevalent during
the martial law regime." Thus, they are not just mere
formalities, which will only render a contract
unenforceable but not void, if not complied with.
They are requirements placed, not just in an ordinary
statute, but in the fundamental law, the non-
observance of which will nullify the contract.
Our Constitution requires that the President himself
be the signatory of service agreements with foreign-
owned corporations involving the exploration,
development, and utilization of our minerals,
petroleum, and other mineral oils. This power cannot
be taken lightly.
In this case, the public respondents have failed to
show that the President had any participation in SC-
46. Their argument that their acts are actually the
acts of then President Macapagal-Arroyo, absent
proof of her disapproval, must fail as the requirement
that the President herself enter into these kinds of
contracts is embodied not just in any ordinary
statute, but in the Constitution itself. These service
contracts involving the exploitation, development,
and utilization of our natural resources are of
paramount interest to the present and future
generations. Hence, safeguards were put in place to
insure that the guidelines set by law are meticulously
observed and likewise to eradicate the corruption
that may easily penetrate departments and agencies
by ensuring that the President has authorized or
approved of these service contracts herself.
It must be shown that the government agency or
subordinate official has been authorized by the
President to enter into such service contract for the
government. Otherwise, it should be at least shown
that the President subsequently approved of such
contract explicitly. None of these circumstances is
evident in the case at bar.
Narra nickel mining v. Redmont Cons. Mines
GR 195580 April 21, 2014
Issue: Is Narra Nickel Mining a Filipino
corporation under the “grandfather rule”
allowed to mine in the Philippines?
Ruling: No. The grandfather rule provides that
shares belonging to corporations or partnerships
at least 60% of the capital of which is owned by
Filipino citizens shall be considered as of
Philippine nationality, but if the percentage of
Filipino ownership in the corporation or
partnership is less than 60%, only the number of
shares corresponding to such percentage shall be
counted as of Philippine nationality. Thus, if
100,000 shares are registered in the name of a
corporation or partnership at least 60% of the
capital stock or capital, respectively, of which
belong to Filipino citizens, all of the shares shall
be recorded as owned by Filipinos. But if less
than 60%, or say, 50% of the capital stock or
capital of the corporation or partnership,
respectively, belongs to Filipino citizens, only
50,000 shares shall be recorded as belonging to
aliens.
Art. XII, Sec. 2 of the Constitution provides:
Sec. 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. The
State may directly undertake such activities, or it may
enter into co production, joint venture or production
sharing agreements with Filipino citizens, or corporations
or associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law.
xxx
The President may enter into agreements with Foreign-
owned corporations involving either technical or financial
assistance for large scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by
law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the
State shall promote the development and use of local
scientific and technical resources.
Petitioners McArthur, Tesoro and Narra are not
Filipino since MBMI, a 100% Canadian
corporation, owns 60% or more of their equity
interests. Such conclusion is derived from
grandfathering petitioners’ corporate owners,
namely: MMI, SMMI and PLMDC. Going further
and adding to the picture, MBMI’s Summary of
Significant Accounting Policies statement– –
regarding the "joint venture" agreements that it
entered into with the "Olympic" and "Alpha"
groups––involves SMMI, Tesoro, PLMDC and
Narra. Noticeably, the ownership of the "layered"
corporations boils down to MBMI, Olympic or
corporations under the "Alpha" group wherein
MBMI has joint venture agreements with,
practically exercising majority control over the
corporations mentioned. In effect, whether
looking at the capital structure or the underlying
relationships between and among the
corporations, petitioners are NOT Filipino
nationals and must be considered foreign since
60% or more of their capital stocks or equity
interests are owned by MBMI.

IDEALS vs. PSALM, G.R. No. 192088, Oct. 9, 2012
Issue: Did the sale of AHEPP and its water
rights to a foreign corporation pursuant to the
privatization mandated by the EPIRA violate
the 1987 Constitution?
Ruling: No. Foreign ownership of a hydropower
facility is not prohibited underexisting laws. The
construction, rehabilitation and development
ofhydropower plants are among those infrastructure
projects which evenwholly-owned foreign
corporations are allowed to undertake under
theAmended Build-Operate-Transfer (Amended
BOT) Law (R.A. No. 7718). Beginning 1987, the policy
has been openness to foreign investments asevident
in the fiscal incentives provided for the restructuring
andprivatization of the power industry in the
Philippines, under the PowerSector Restructuring
Program (PSRP) of the Asian Development Bank.
With respect to foreign investors, the nationality
issue had beenframed in terms of the character or
nature of the power generation processitself,i.e.,
whether the activity amounts to utilization of
natural resourceswithin the meaning of Sec. 2, Art.
XII of the Constitution. If so, then foreigncompanies
cannot engage in hydropower generation business;
but if not,then government may legally allow even
foreign-owned companies tooperate hydropower
facilities.The DOJ has consistently regarded
hydropower generation by foreignentities as not
constitutionally proscribed based on the definition
of waterappropriation under the Water Code.
Under the Water Code concept of appropriation, a
foreign companymay not be said to be
“appropriating” our natural resources if it utilizes
thewaters collected in the dam and converts the
same into electricity throughartificial devices. Since
the NPC remains in control of the operation of
thedam by virtue of water rights granted to it, as
determined under DOJOpinion No. 122, s. 1998,
there is no legal impediment to foreign-
ownedcompanies undertaking the generation of
electric power using watersalready appropriated by
NPC, the holder of water permit. Such was
thesituation of hydropower projects under the BOT
contractual arrangementswhereby foreign investors
are allowed to finance or undertake constructionand
rehabilitation of infrastructure projects and/or own
and operate thefacility constructed. However, in
case the facility requires a public utilityfranchise, the
facility operator must be a Filipino corporation or at
least 60%owned by Filipino.
Republic v. Tan
GR No 199537 Feb 10, 2016
Issue: What is the Regalian Doctrine?
Ruling: The Regalian Doctrine states that, all
lands of the public domain belong to the State. It
is the fountain from which springs any asserted
right of ownership over land. Accordingly, the
State owns all lands that are not clearly within
private ownership. This has been incorporated
in all of our Constitutions and repeatedly
embraced in jurisprudence. Under the present
Constitution, lands of the public domain are not
alienable except for agricultural lands
Issue: Was the property in this case
converted into patrimonial property or has it
remained under the operation of the Regalian
Doctrine?
Ruling:
It has remained under the operation of
the Regalian Doctrine.There must be an express
declaration by the State that the public dominion
property is no longer intended for public service
or the development of the national wealth or that
the property has been converted into
patrimonial. Without such express
declaration, the property, even if classified as
alienable or disposable, remains property of
the public dominion, pursuant to Article
420(2), and thus incapable of acquisition by
prescription. It is only when such alienable and
disposable lands are expressly declared by the
State to be no longer intended for public service
or for the development of the national wealth
that the period of acquisitive prescription can
begin to run. Such declaration shall be in the
form of a law duly enacted by Congress or a
Presidential Proclamation in cases where the
President is duly authorized by law.
While a prior declaration that the property has
become alienable and disposable is sufficient in
an application for judicial confirmation of title
under Section 14(1) of the PRD, it does not
suffice for the purpose of prescription under the
Civil Code. Before prescription can even begin to
run against the State, the following conditions
must concur to convert the subject into
patrimonial property:
1. The subject lot must have been
classified as agricultural land in
compliance with Sections 2 and 3 of
Article XII of the Constitution;
2. The land must have been classified as
alienable and disposable;
3. There must be a declaration from a
competent authority that the subject lot is
no longer intended for public use, thereby
converting it to patrimonial property.
Only when these conditions are met can
applicants begin their public and peaceful
possession of the subject lot in the concept of an
owner.
In the present case, the third condition is absent.
Even though it has been declared alienable and
disposable, the property has not been withdrawn
from public use or public service. Without this,
prescription cannot begin to run because the
property has not yet been converted into
patrimonial property of the State. It remains
outside the commerce of man and the
respondent’s physical possession and occupation
thereof do not produce any legal effect. In the
eyes of the law, the respondent has never
acquired legal possession of the property and
her physical possession thereof, no matter how
long, can never ripen into ownership.
Republic vs. Espinosa G.R. No 186603 April 5,
2017
Issue: Whether or not the State has
sufficiently proved that the property is part
of inalienable forestland at the time Espinosa
was granted the cadastral decree and issues a
title?
Ruling: No. The State failed to prove that the
property was classified as forest land at the time
of the grant of the cadastral decree and issuance
of title to Espinosa.In land registration
proceedings, the applicant has the burden of
overcoming the presumption of State ownership.
It must establish, through incontrovertible
evidence, that the land sought to be registered is
alienable or disposable based on a positive act of
the government.Since cadastral proceedings are
governed by the usual rules of practice,
procedure, and evidence, a cadastral decree and
a certificate of title are issued only after the
applicant proves all the requisite jurisdictional
facts-that they are entitled to the claimed lot,
that all parties are heard, and that evidence is
considered.31 As such, the cadastral decree is a
judgment which adjudicates ownership after
proving these jurisdictional facts. Here, it is
undisputed that Espinosa was granted a
cadastral decree and was subsequently issued
OCT No. 191-N, the predecessor title of Caliston's
TCT No. 91117. Having been granted a decree in
a cadastral proceeding, Espinosa can be
presumed to have overcome the presumption
that the land sought to be registered forms part
of the public domain. 33 This means that
Espinosa, as the applicant, was able to prove by
incontrovertible evidence that the property is
alienable and disposable property in the
cadastral proceedings.
The State hinges its whole claim on its lone piece
of evidence, the land classification map prepared
in 1986. The records show, however, that LC
Map No. 2978 was not formally offered in
evidence. Even assuming that the survey can be
admitted in evidence, this will not help to further
the State's cause.1âwphi1This is because the
only fact proved by the map is one already
admitted by the State, that is, that the land was
reclassified in 1986.This fact does not address
the presumption/conclusion that Espinosa has,
at the time of the cadastral proceedings
conducted in 1955, proved that the land is
alienable and disposable, as evidenced by the
decree issued in his favor in 1962.
Central Mindanao University vs. Republic,
G.R. No. 195026, February 22, 2016
Issue: Was CMU able to establish, through
incontrovertible evidence, that the land
reservations registered in its name are
alienable and disposable lands of public
domain?
Ruling: NoUnder the Regalian doctrine, all lands
of the public domain belong to the State, and that
the State is the source of any asserted right to
ownership of land and charged with the
conservation of such patrimony. Also, the
doctrine states that all lands not otherwise
appearing to be clearly within private ownership
are presumed to belong to the State. 46
Consequently, the person applying for
registration has the burden of proof to overcome
the presumption of ownership of lands of the
public domain. To prove that a land is alienable,
the existence of a positive act of the government,
such as presidential proclamation or an
executive order; an administrative action;
investigation reports of Bureau of Lands
investigators; and a legislative act or a statute
declaring the land as alienable and disposable
must be established. 48 Hence, a public land
remains part of the inalienable public domain
unless it is shown to have been reclassified and
alienated by the State to a private person. . In the
case at bar, CMU failed to establish, through
incontrovertible evidence, that the land
reservations registered in its name are alienable
and disposable lands of public domain. Aside
from the series of indorsements regarding the
filing of the application for the compulsory
registration of the parcels of land and the said
directive from the President, CMU did not
present any proof of a positive act of the
government declaring the said lands alienable
and disposable. For lack of proof that the said
land reservations have been reclassified as
alienable and disposable, the said lands remain
part of inalienable public domain, hence; they
are not registrable under Torrens system.
Notes: In the case at bar, CMU relies on the Court's ruling
in the De la Rosa case that the directive from the President
authorizing the Director of Lands to file the necessary
petition for the compulsory registration of the parcels of
land so reserved is the equivalent of the declaration and
certification that the subject land is alienable and
disposable. As such, CMU avows that the subject lots, as
declared alienable and disposable, are properly registered
in its name. The lands which can be declared open to
disposition or concession are those which have been
officially delimited and classified, or when practicable
surveyed; those not reserved for public or quasi-public
purpose; those not appropriated by the Government; those
which have not become private property in any manner;
those which have no private right authorized and
recognized by C.A. No. or any other valid law may be
claimed; or those which have ceased to be reserved or
appropriated. For the said President's directive to file the
necessary petition for compulsory registration of parcels
of land be considered as an equivalent of a declaration that
the land is alienable and disposable, the subject land,
among others, should not have been reserved for public or
quasi-public purposes. Therefore, the said directive on
December 12, 1960 cannot be considered as a declaration
that said land is alienable and disposable. Unlike in De la
Rosa, the lands, having been reserved for public purpose
by virtue of Proclamation No. 4 76, have not ceased to be
so at the time the said directive was made. Hence, the lots
did not revert to and become public agricultural land for
them to be the subject of a declaration by the President
that the same are alienable and disposable.
Republic versus- AFF-RSBS, G.R. No. 180463,
Jan. 16, 2013
ISSUE:May national parks be increased or
diminished?
RULING: Yes. Under the present Constitution,
national parks are declared part of the public
domain, and shall be conserved and may not be
increased nor diminished, except by law. Under
Section 83 of CA 141, "the President may
designate by proclamation any tract or tracts of
land of the public domain as reservations for the
use of the Commonwealth of the Philippines or of
any of its branches, or of the inhabitants thereof,
in accordance with regulations prescribed for
this purpose, or for quasipublic uses or purposes,
when the public interest requires it….”
Beumer vs. Amores GR 195672 Dec. 3, 2012
Issue: Can an alien husband seek
reimbursement for the value of the lands
purchased with his funds and titled in the
name of his Filipina spouse?
Ruling: The Foreign Investments Act, like all its
predecessor statutes, clearly defines a“Philippine
national” as a Filipino citizen, or a domestic
corporation “atleast sixty percent (60%) of the
capital stock outstanding and entitled tovote” is
owned by Filipino citizens. A domestic corporation
is a “Philippinenational” only if at least 60% of its
voting stock is owned by Filipinocitizens. This
definition of a “Philippine national” is crucial in the
presentcase because the FIA reiterates and clarifies
Section 11, Article XII of the1987 Constitution, which
limits the ownership and operation of publicutilities
to Filipino citizens or to corporations or associations
at least 60%Filipino-owned

Ruling: No. The Court cannot, even on the

grounds of equity, grant reimbursement to
petitioner given that he acquired no right
whatsoever over the subject properties by virtue
of its unconstitutional purchase. It is well-
established that equity as a rule will follow the
law and will not permit that to be done indirectly
which, because of public policy, cannot be done
directly. A contract that violates the Constitution
and the law is null and void, vests no rights,
creates no obligations and produces no legal
effect at all. Under Article 1412 of the Civil Code,
petitioner cannot have the subject properties
deeded to him or allow him to recover the money
he had spent for the purchase thereof. The law
will not aid either party to an illegal contract or
agreement; it leaves the parties where it finds
them. Indeed, one cannot salvage any rights from
an unconstitutional transaction knowingly
entered into.

Gamboa vs. Teves, G.R. No. 176579, Oct. 9, 2012

(MR)
Issue: Who is a “Philippine national” entitled to
the own and operate a reserved public utility
pursuant to Sec. 11, Art, XII of the Constitution?