INTERNATIONAL HARDWOOD v UNIVERSITY OF THE PHILIPPINES
G.R. No. L-52518 August 13, 1991
DAVIDE, JR., J.:
FACTS:
International Hardwood was granted by the Government an exclusive license for a period of
25 years expiring on February 1, 1985, to cut, collect and remove timber from a portion of
timber land under License Agreement No. 27-A. In 1961, Executive Proclamation No. 791 was
issued reserving a portion of the land covered by the License agreement for the College of
Agriculture, University of the Philippines, as experiment station for the proposed Dairy
Research and production studies of this College. In 1964, RA 3990 was enacted to establish a
central experiment station for the UP. The lands covered by EP 791 was ceded and transferred
in full ownership to UP, subject to any existing concessions, if any. On the strength of RA 3990,
UP demanded from Hardwood:
1. Payment of forest charges due and demandable under the License Agreement to UP,
instead of the BIR
2. That the sale of any timber felled or cut by Hardwood within the land described in RA
3990 be performed by UP personnel
In relation to the implementation of RA 3990, Business Executive of UP sent a letter to the CIR
securing the approval for the UP to shall receive all forest charges and royalties due from any
logging concession at the land grant (including those already paid by Intl Hardwood to the
District Forester of Laguna from June, 1964). The CIR approved the request in its reply letter-
ruling. This was concurred by the Director of Bureau of Forestry.
A case was then filed by Intl Hardwood before the RTC seeking therein a declaration that
respondent UP does not have the right to supervise and regulate the cutting and removal of
timber and other forest products, to scale, measure and seal the timber cut and/or to collect
forest charges, reforestation fees and royalties from petitioner and/or impose any other duty
or burden upon the latter in that portion of its concession, covered by License Agreement.
The trial court ruled in favor of the plaintiff. It ruled that under Republic Act No. 3990, the
University of the Philippines cannot legally use the tract of land ceded to it for purposes other
than those therein expressly provided, namely, 'for the use of the University of the Philippines
in connection with its research and extension functions. Respondents appealed to the CA. CA
elevated the case to SC as the entire case hinges on the interpretation and construction of
Republic Act 3990 as it applies to a set of facts which are not disputed by the parties and
therefore, is a legal question.
ISSUE:
WON UP as owner had the right to scale, measure, and seal the timber cut by Hardwood and
collect forestry charges thereon.
HELD:
YES. By virtue of the full cession and transfer of ownership by the government to UP.
When RA 3990 ceded the property to UP, the Republic completely removed it from the public
domain and segregated the areas covered by the timber license from the public forest. The
Republic relinquished and conveyed its rights over the area to UP. Thus, UP became the owner
of the land, subject only to existing concession. The express proviso on existing concessions,
this means that the right of Hardwood as a timber licensee must not be affected, impaired,
or diminished; it must be respected but insofar as the Government is concerned, all its rights
as grantor of the license were effectively assigned, ceded and conveyed to UP. Having been
effectively segregated and removed from the public domain or from a public forest and, in
effect, converted into a registered private woodland, the authority and jurisdiction of the
Bureau of Forestry over it were likewise terminated. BIR also lost authority to measure the
timber cut from the subject area and to collect forestry charges and other fees thereon
because of this full transfer.
As owner, UP has the right to enjoy and dispose of the thing without other limitations than
those established by law. In this case, that exception is made for Hardwood as licensee or
grantee of the concession, which has been given the license to cut, collect, and remove timber
from the area ceded and transferred to UP until February 1985. However, Hardwood has the
correlative duty and obligation to pay the forest charges or royalties to the new owner, UP.
Thus, the charges should not be paid to the Government but to UP. It follows then that
respondent UP is entitled to supervise, through its duly appointed personnel, the logging,
felling and removal of timber within the area covered by R.A. No. 3990.