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TUMALAD V.

VICENCIO 41 SCRA 143 FACTS: Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their house, which was being rented by Madrigal and company. This was executed to guarantee a loan, payable in one year with a 12% per annum interest. The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house was sold at a public auction and the plaintiffs were the highest bidder. A corresponding certificate of sale was issued. Thereafter, the plaintiffs filed an action for ejectment against the defendants, praying that the latter vacate the house as they were the proper owners. ISSUE: WHETHER OR NOT THE SUBJECT MATTER OF THE MORTGAGE, A HOUSE OF STRONG MATERIALS, BE THE OBKECT OF A CHATTEL MORTGAGE? HELD: Certain deviations have been allowed from the general doctrine that buildings are immovable property such as when through stipulation, parties may agree to treat as personal property those by their nature would be real property. This is partly based on the principle of estoppel wherein the principle is predicated on statements by the owner declaring his house as chattel, a conduct that may conceivably stop him from subsequently claiming otherwise. In the case at bar, though there be no specific statement referring to the subject house as personal property, yet by ceding, selling or transferring a property through chattel mortgage could only have meant that defendant conveys the house as chattel, or at least, intended to treat the same as such, so that they should not now be allowed to make an inconsistent stand by claiming otherwise. PRUDENTIAL BANK V. PANIS

153 SCRA 390 FACTS: Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage over a residential building. The mortgage included also the right to occupy the lot and the information about the sales patent applied for by the spouses for the lot to which the building stood. After securing the first loan, the spouses secured another from the same bank. To secure payment, another real estate mortgage was executed over the same properties. The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in public auction despite opposition from the spouses. The respondent court held that the REM was null and void. ISSUES: 1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND 2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE RESPONDENTS OF MISCELLANEOUS SALES PATENT NO. 4776 ON APRIL 24, 1972 UNDER ACT NO. 730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO. P-2554 ON MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE MORTGAGE. HELD: A real estate mortgage can be constituted on the building erected on the land belonging to another. The inclusion of building distinct and separate from the land in the Civil Code can only mean that the building itself is an immovable

property. While it is true that a mortgage of land necessarily includes in the absence of stipulation of the improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is built. Such a mortgage would still be considered as a REM for the building would still be considered as immovable property even if dealt with separately and apart from the land. The original mortgage on the building and right to occupancy of the land was executed before the issuance of the sales patent and before the government was divested of title to the land. Under the foregoing, it is evident that the mortgage executed by private respondent on his own building was a valid mortgage. As to the second mortgage, it was done after the sales patent was issued and thus prohibits pertinent provisions of the Public Land Act. SERG S PRODUCTS AND GOQUIOLAY V. PCI LEASING AND FINANCE 338 SCRA 499 FACTS: PCI filed a case for collection of a sum of money as well as a writ of replevin for the seizure of machineries, subject of a chattel mortgage executed by petitioner in favor of PCI. Machineries of petitioner were seized and petitioner filed a motion for special protective order. It asserts that the machineries were real property and could not be subject of a chattel mortgage. The Issue

A. Whether or not the machineries purchased and imported by SERG S became real property by virtue of immobilization. HELD: The machineries in question have become immobilized by destination because they are essential and principal elements in the industry, and thus have become immovable in nature. Nonetheless, they are still proper subjects for a chattel mortgage. Contracting parties may validly stipulate that a real property be considered as personal. After agreement, they are consequently estopped from claiming otherwise.

TSAI V. COURT OF APPEALS 336 SCRA 324 FACTS: EVERTEX secured a loan from PBC, guaranteed by a real estate and chattel mortgage over a parcel of land where the factory stands, and the chattels located therein, as included in a schedule attached to the mortgage contract. Another loan was obtained secured by a chattel mortgage over properties with similar descriptions listed in the first schedule. During the date of execution of the second mortgage, EVERTEX purchased machineries and equipment. Due to business reverses, EVERTEX filed for insolvency proceedings. It failed to pay its obligation and thus, PBC initiated extrajudicial foreclosure of the mortgages. PBC was the highest bidder in the public auctions, making it the owner of the properties. It then leased the factory premises

to Tsai. Afterwards, EVERTEX sought the annulment of the sale and conveyance of the properties to PBC as it was allegedly a violation of the INSOLVENCY LAW. The RTC held that the lease and sale were irregular as it involved properties not included in the schedule of the mortgage contract. HELD: While it is true that the controverted properties appear to be immobile, a perusal of the contract of REM and CM executed by the parties gives a contrary indication. In the case at bar, both the trial and appellate courts show that the intention was to treat the machineries as movables or personal property. Assuming that the properties were considered immovables, nothing detracts the parties from treating it as chattels to secure an obligation under the principle of estoppel. Sec. of DENR vs. yap g.r. no. 167707 Facts: Respondents-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land. Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act.[32] Thus, their possession in the concept of owner for the required period entitled them to judicial confirmation of imperfect title. Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed portions of the island are

inalienable and cannot be the subject of judicial confirmation of imperfect title. It is only the executive department, not the courts, which has authority to reclassify lands of the public domain into alienable and disposable lands. There is a need for a positive government act in order to release the lots for disposition. Issue: Is PGMA's presidential proclaimation no. 1064 classifying boracay island into 400 hectares of reserved and forest land and 628 hectares of agricultural land (alienable and disposable) valid and constitutional? Ruling: In issuing Proclamation No. 1064, President Gloria MacapagalArroyo merely exercised the authority granted to her to classify lands of the public domain, presumably subject to existing vested rights. Classification of public lands is the exclusive prerogative of the Executive Department, through the Office of the President. Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center line of roads and trails, which are reserved for right of way and which shall form part of the area reserved for forest land protection purposes. Contrary to private claimants argument, there was nothing invalid or irregular, much less unconstitutional, about the classification of Boracay Island made by the President through Proclamation No. 1064. It was within her authority to make such classification, subject to existing vested rights. HEIRS OF MARIO MALABANAN vs. REPUBLIC OF THE PHILIPPINES FACTS: On 20 February 1998, Mario Malabanan filed an application for land registration before the RTC of Cavite-Tagaytay, covering a parcel of land situated in Silang Cavite, consisting of 71,324 square meters.

Malabanan claimed that he had purchased the property from Eduardo Velazco, and that he and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for more than thirty (30) years. Velazco testified that the property was originally belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Esteban the fourth being Aristedes s grandfather. Upon Lino s death, his four sons inherited the property and divided it among themselves. But by 1966, Esteban s wife, Magdalena, had become the administrator of all the properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to Malabanan. Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001, issued by the Community Environment & Natural Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated that the subject property was verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982. On 3 December 2002, the RTC approved the application for registration. The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC had erred in finding that he had been in possession of the property in the manner and for the length of time required by law for confirmation of imperfect title. On 23 February 2007, the Court of Appeals reversed the RTC ruling and dismissed the application of Malabanan.

G. R. NO. 158449

October 22, 2004

LUNINGNING P. DEL ROSARIO-IGTIBEN, JOSE REYES IGTIBEN, JOSE DEL ROSARIO IGTIBEN, JR. and THERESA TOPACIO MEDINA, petitioners, vs. REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, respondents. petitioners filed with the trial court an application for registration of land under Presidential Decree (PD) No. 1529, covering a parcel of land. Petitioners alleged that they acquired the Subject Property by purchase, and that they, by themselves and through their predecessors-in-interest, had been in actual, continuous, uninterrupted, open, public, and adverse possession of the Subject Property in the concept of owner for more that 30 years.3 the Tonido family sold the Subject Property to petitioners, as evidenced by a Deed of Absolute Sale.7 The history of possession of the Subject Property, was supported by tax declarations in the name of petitioners and their predecessors-ininterest from 1958 to 1998.8 , the trial court rendered a decision approving petitioners application for registration of the Subject Property. The Republic of the Philippines, represented by the Office of the Solicitor General, appealed the decision of the trial court to the Court of Appeals. In its appeal, the Republic alleged that the trial court erred in approving the application for registration despite petitioners failure to prove open, continuous, exclusive and notorious possession and occupation of the Subject Property since 12 June 1945, or earlier, as required by Section 48(b) of Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended by PD No. 1073. Moreover, petitioners

also failed to produce monuments of title to tack their possession to those of their predecessors-in-interest in compliance with the prescriptive period required by law.9 On 20 December 2002, the Court of Appeals rendered a decision finding the appeal meritorious, setting aside the decision of the trial court, and dismissing the application for registration of petitioners.10 The Court of Appeals denied petitioners Motion for Reconsideration in its resolution dated 22 May 2003.11Petitioners filed this petition for review on certiorari Issue: 1) Whether petitioners have complied with the period of possession and occupation required by the Public Land Act? Held: (1) Section 44 of the Public Land Act, as amended by RA No. 6940, which provides for a prescriptive period of thirty (30) years possession, applies only to applications for free patents; (2) The case at bar is a judicial application for confirmation of an imperfect or incomplete title over the Subject Property covered by Section 48(b) of the Public Land Act; and (3) Section 48(b) of the Public Land Act requires for judicial confirmation of an imperfect or incomplete title the continuous possession of the land since 12 June 1945, or earlier, which petitioners herein failed to comply with.

G.R. No. 134209

January 24, 2006

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. CELESTINA NAGUIAT, Respondent. This is an application for registration of title to four (4) parcels of land located in Panan, Botolan, Zambales, filed by Celestina Naguiat on 29 December 1989 with the Regional Trial Court of Zambales, Branch 69. Applicant [herein respondent] alleges, inter alia, that she is the owner of the said parcels of land having acquired them by purchase from the LID Corporation which likewise acquired the same from Demetria Calderon, Josefina Moraga and Fausto Monje and their predecessors-ininterest who have been in possession thereof for more than thirty (30) years; and that to the best of her knowledge, said lots suffer no mortgage or encumbrance of whatever kind nor is there any person having any interest, legal or equitable, or in possession thereof. On 29 June 1990, the Republic of the Philippines [herein petitioner]. . . filed an opposition to the application on the ground that neither the applicant nor her predecessors-in interest have been in open, continuous, exclusive and notorious possession and occupation of the lands in question since 12 June 1945 or prior thereto; that the muniments of title and tax payment receipts of applicant do not constitute competent and sufficient evidence of a bona-fide acquisition of the lands applied for or of his open, continuous, exclusive and notorious possession and occupation thereof in the concept of (an) owner; that the applicant s claim of ownership in fee simple on the basis of Spanish title or grant can no longer be availed of . . .; and that the parcels of land applied for are part of the public domain belonging to the Republic of the Philippines not subject to private appropriation.

the trial court rendered judgment for herein respondent Celestina Naguiat, adjudicating unto her the parcels of land in question and decreeing the registration thereof in her name, With its motion for reconsideration having been denied by the trial court, petitioner Republic went on appeal to the CA in CA-G.R. CV No. 37001. As stated at the outset hereof, the CA, in the herein assailed decision of May 29, 1998, affirmed that of the trial court, Hence, the Republic s present recourse on its basic submission that the CA s decision "is not in accordance with law, jurisprudence and the evidence, since respondent has not established with the required evidence her title in fee simple or imperfect title in respect of the subject lots which would warrant their registration under (P.D. 1529 or Public Land Act (C.A.) 141." In particular, petitioner Republic faults the appellate court on its finding respecting the length of respondent s occupation of the property subject of her application for registration and for not considering the fact that she has not established that the lands in question have been declassified from forest or timber zone to alienable and disposable property. Issue: whether or not the areas in question have ceased to have the status of forest or other inalienable lands of the public domain. public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable public domain.13 Under Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands of the public domain, i.e., from forest or mineral to agricultural and vice versa, belongs to the Executive Branch of the government and not the court.14 Needless to stress, the onus to overturn, by incontrovertible

evidence, the presumption that the land subject of an application for registration is alienable or disposable rests with the applicant.15 respondent never presented the required certification from the proper government agency or official proclamation reclassifying the land applied for as alienable and disposable. declassification of forest and mineral lands, as the case may be, and their conversion into alienable and disposable lands need an express and positive act from the government.21 The foregoing considered, the issue of whether or not respondent and her predecessor-in-interest have been in open, exclusive and continuous possession of the parcels of land in question is now of little moment. For, unclassified land, as here, cannot be acquired by adverse occupation or possession; occupation thereof in the concept of owner, however long, cannot ripen into private ownership and be registered as title.22

Director of Forestry v. Villareal [G.R. No. L-32266. February 27, 1989.] En Banc, Cruz (J): 13 concur, 1 took no part. Facts: Ruperto Villareal applied for its registration on 25 January 1949, a land consisting of 178,113 sq. m. of mangrove swamps located in the municipality of Sapian, Capiz, alleging that he and his predecessors-ininterest had been in possession of the land for more than 40 years. He was opposed by several persons, including the Director of Foresty on behalf of the Republic of the Philippines. After trial, the application was approved by the CFI Capiz. The decision was affirmed by the Court of Appeals. The Director of Forestry then came to the Supreme Court in a petition for review on certiorari.

ISSUE: Whether or not the land in dispute was forestal in nature and not subject to private appropriation? HELD: The Supreme Court set aside the decision of the Court of Appeals and dismissed the application for registration of title of Villareal, 4. Administrative Code of 1917; Mangrove swamps form part of the public forests of the country Subsequently, the Philippine Legislature categorically declared that mangrove swamps form part of the public forests of this country. This it did in the Administrative Code of 1917, which became effective on 1 October 1917, providing in Section 1820 of said code that for the purpose of this chapter 'public forest' includes, except as otherwise specially indicated, all unreserved public land, including nipa and mangrove swamps, and all forest reserves of whatever character." The legislative definition embodied in Section 1820 of the Revised Administrative Code of 1917, remains unamended up to now, provides that mangrove swamps or manglares form part of the public forests of the Philippines. As such, they are not alienable under the Constitution and may not be the subject of private ownership until and unless they are first released as forest land and classified as alienable agricultural land. EDUBIGIS GORDULA, CELSO V. FERNANDEZ, JR., CELSO A. FERNANDEZ, NORA ELLEN ESTRELLADO, DEVELOPMENT BANK OF THE PHILIPPINES, J.F. FESTEJO AND CO., INC. AND REGISTER OF DEEDS OF LAGUNA, Petitioners, vs. THE HONORABLE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES (represented by the National Power Corporation), Respondents. DECISION PUNO, J.: virtualawlibrary

former President Ferdinand E. Marcos issued Proclamation No. 573[3] withdrawing from sale and settlement and setting aside as permanent forest reserves, subject to private rights, certain parcels of the public domain which included Parcel No. 9 - Caliraya-Lumot River Forest Reserve. They were primarily for use as watershed area. the parcel of land subject of the case at bar is, by petitioners' explicit admission,[4] within Parcel No. 9, the Caliraya-Lumot River Forest Reserve. virtualawlibrary petitioner Edubigis Gordula filed with the Bureau of Lands, an Application[5] for a Free Patent over the land. Manuel Fernandez and several others also filed free patent applications covering other parcels of land in the area. Mr. Antonio Aquino, Jr., the Civil Security Officer of the Cavinti reservoir complex, sent a Memorandum to the President of the Napocor informing him of the fences and roads being constructed in the saddle area, more particularly, in the lots sold by petitioner Fernandez to petitioner Estrellado. virtualawlibrary Respondent Republic, through the Napocor, filed against petitioners a Complaint for Annulment of Free Patent and Cancellation of Titles and Reversion with Writ of Preliminary Injunction in the RTC of Sta. Cruz, Laguna.[8] the trial court rendered judgment in favor of petitioners. Respondent Republic, through the Napocor, elevated the case to the respondent Court of Appeals. virtualawlibrary On June 20, 1996, the respondent Court of Appeals ruled against petitioners. Hence, this petition.

ISSUE: Whether or not the subject parcel of lands are non-disposable and inalienable public land? HELD: the two (2) parcels of land were public disposable and alienable lands before the issuance, by the former President, of Proclamation No. 573, on June 26, 196[9]. x x x The property was, however, later reserved, under Proclamation No. 573, as a permanent forest, on June 26, 196[9]. Since then, the property became non-disposable and inalienable public land. By their very nature[13] or by executive or statutory fiat, they are outside the commerce of man, unsusceptible of private appropriation in any form,[14] and inconvertible into any character less than of inalienable public domain, regardless of their actual state, for as long as the reservation subsists and is not revoked by a subsequent valid declassification.[15] virtualawlibrary Petitioners do not contest the nature of the land in the case at bar. It is admitted that it lies in the heart of the Caliraya-Lumot River Forest Reserve, which Proclamation No. 573 classified as inalienable and indisposable. No public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of a title from the state.[17] The facts show that petitioner Gordula, did not acquire title to the subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good. virtualawlibrary

brary

Spouses GEMINIANO and AMPARO DE OCAMPO and Spouses PEDRO and CRISANTA SANTOS, petitioners, vs. FEDERICO ARLOS, MARY ARLOS, TEOFILO OJERIO and BELLA OJERIO, respondents. DECISION PANGANIBAN, J.: Under the Public Land Act as amended, only titles to alienable and disposable lands of the public domain may be judicially confirmed. Unless a public land is reclassified and declared as such, occupation thereof in the concept of owner, no matter how long ago, cannot confer ownership or possessory rights. A suit for the reversion of such property to the State may be instituted only by the Office of the Solicitor General (OSG).
The Facts

Federico S. Arlos and Teofilo D. Ojerio filed an application for registration, docketed as Land Registration Case No. N-340, wherein they seek judicial confirmation of their titles [to] three parcels of land, all located at Cabcaben, Mariveles, Bataan,. Spouses Geminiano de Ocampo and Amparo De Ocampo and spouses Pedro Santos and Crisanta Santos opposed the application for registration, alleging that they are the co-owners of Lots 1 and 2 of Plan SGS 3062, situated at Cabcaben, Mariveles, Bataan, and their ownership is evidenced by Transfer Certificate of Title Nos. T-43298 and T-44205, and that they became owners of said lots by purchase from the government through sales patents. The Republic of the Philippines also opposed the application, contending that neither the applicants nor their predecessors-in-interests have been in open, continuous, exclusive and notorious possession and occupation of the lands in question for at least 30 years immediately

preceding the filing of the application; and that the parcels of land applied for are portions of the public domain belonging to the Republic of the Philippines not subject to private appropriation. the CA ruled that petitioners had failed to comply with the Public Land Act, which required sales patent applicants to be the actual occupants and cultivators of the land. It held that the testimonies of petitioners, which were incongruous with reality, bolstered the finding that [they had] never occupied, cultivated or made improvements on the property.
The Issues

ISSUE: Whther or not (1) the registration of respondents title under the Public Land Act is proper?
HELD:

Respondents application for registration of title to the three parcels of land that were once part of the public domain is governed by the Public Land Act, a title may be judicially confirmed under Section 48 of the Public Land Act only if it pertains to alienable lands of the public domain. Unless such assets are reclassified and considered disposable and alienable, occupation thereof in the concept of owner, no matter how long cannot ripen into ownership and be registered as a title. Verily, Presidential Decree No. 1073 clarified Section 48 (b) of the Public Land Act by specifically declaring that the latter applied only to alienable and disposable lands of the public domain. In the present case, the disputed land which was formerly a part of a US military reservation that had been turned over to the Philippine government in 1965, was declared disposable and alienable only in 1971. Second, respondents and their predecessors-in-interest could not have occupied the subject property from 1947 until 1971 when the land was

declared alienable and disposable, because it was a military reservation at the time. Hence, it was not subject to occupation, entry or settlement. We reiterate that the land was declared alienable only in 1971; hence, respondents have not satisfied the thirty-year requirement under the Public Land Act. Moreover, they could not have occupied the property for thirty years, because it formed part of a military reservation. Clearly then, their application for the registration of their titles was erroneously granted by the appellate and the trial courts.

G.R. No. L-10510 LEONCIO ZARATE, applicant-appellant, vs. THE DIRECTOR OF LANDS, ET AL., objectors-appellees. Aurelio Cecilio for appellant. Attorney-General Avancea in behalf of Director of Lands. Moreland, J.: FACTS:This is a proceeding to register the title to lands described in the petition. The Government of the Philippine Islands interposed an objection to the registration of title on the ground "that said parcel of land was part of the public domain and is occupied by Apolonio Gamido and Bibiana Olivite by virtue of applications made by them for homesteads Nos. 2061 and 5626, respectively. Registration of title to that portion of the land found to be occupied by the persons and highway named was denied; and from that judgment the applicant appealed. the lands in question belong to the applicant who has shown by a strong preponderance of the evidence that he is the owner thereof. The land in question not being public and, the Government of the Philippine Islands had no authority to declare it open for homesteads; and as a necessary

consequence, whatever concessions the Government has made with respect to such land are without force and effect, except as to the homestead of Apolonio Gamido who, prior to the commencement of this proceeding, appears to have received his homestead patent from the Government. Under Act No. 926 a patent issued under the Homestead Law has all the force and effect of a Torrens title acquired under Act No. 496; and that being the case, and no question having been raised here or in the court below as to the validity of that Act in connection with the proceedings for homesteads mentioned in this case, we must respect the title so secured, provided it be a fact that a patent has been secured in any of said homestead proceedings. IT clearly appears that the applicant and his predecessors in interest were the owners of and had a good title thereto. In our judgment the evidence falls far short of showing abandonment, the record discloses no acts of the owners on which abandonment can be cased. Nor is there any claim of title by adverse possession. ISSUE: WHETHER OR NOT THE APPLICANT HAS THE RIGHT TO REGISTER THE TITLE DESCRIBED IN THE APPLICATION? HELD: it is declared that the applicant has the right to register title to all of the lands described in the application, with the exception of that portion claimed as a homestead by Apolonio Gamido, which homestead shall be excluded from registration by the applicant provided the Court of Land Registration shall find that said Apolonio Gamido has obtained a patent for said land; but if the Court of Land Registration finds that said Gamido has not yet obtained a patent therefor, then the court shall register title in favor of the applicant to all the lands described in the application. G.R. No. 163766 June 22, 2006

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.

CANDY MAKER, INC., as represented by its President, ONG YEE SEE,* Respondent DECISION Candy Maker, Inc. decided to purchase a parcel of land located below the reglementary lake elevation of 12.50 meters, about 900 meters away from the Laguna de Bay, The Community Environment and Natural Resources Officer (CENRO) of Antipolo City filed on August 18, 1999 his Report8 declaring that "[t]he land falls within the Alienable and Disposable Zone, On the other hand, the LRA, in its September 21, 1999 Report,9 recommended the exclusion of Lot No. 3138-B on the ground that it is a legal easement and intended for public use, hence, inalienable and indisposable. On September 30, 1999, the Laguna Lake Development Authority (LLDA) approved Resolution No. 113, Series of 1993, providing that untitled shoreland areas may be leased subject to conditions enumerated therein. The applicant filed its Amended Application10 on December 15, 1999 for the confirmation of its alleged title on Lot No. 3138, On July 20, 2001, the Republic of the Philippines, the LLDA filed its Opposition17 to the Amended Application in which it alleged that the lot subject of the application for registration may not be alienated and disposed since it is considered part of the Laguna Lake bed, a public land within its jurisdiction pursuant to Republic Act (R.A.) No. 4850, as amended. the municipal court hereby rendered judgment confirming title of the applicants over the real property On appeal to the CA, the petitioner contended that the MTC did not acquire jurisdiction over the application for registration since the actual copies of the Official Gazette (O.G.) where the notice of hearing was published were not adduced in evidence; the applicant likewise failed to

establish exclusive ownership over the subject property in the manner prescribed by law. The applicant averred in its Appellees Brief54 that Sec. 14, par. 1 of P.D. 1529 is inapplicable since it speaks of possession and occupation of alienable and disposable lands of the public domain. Instead, par. 4 of the same section55 should govern because the subject parcels of land are lands of private ownership, having being acquired through purchase from its predecessors-in-interest, who, in turn, inherited the same from their parents. the appellate court rendered judgment which dismissed the appeal and affirmed in toto the Decision of the MTC,56: The issues in this case are the following: (2) whether the property subject of the amended application is alienable and disposable property of the State, and, if so, (3) whether respondent adduced the requisite quantum of evidence to prove its ownership over the property under Section 14 of P.D. 1529. The petition is meritorious. On the second and third issues, we find and so rule that the property subject of this application was alienable and disposable public agricultural land until July 18, 1966. However, respondent failed to prove that it possesses registerable title over the property. the petition is GRANTED. The decision of the Court of Appeals in CAG.R. CV No. 73278 is SET ASIDE. The Municipal Trial Court of Taytay, Rizal is DIRECTED to dismiss the application for registration of respondent Candymaker, Inc. in Land Registration Case No. 99-0031. Usero v Court of Appeals, G.R. No. 152115, 26 January 2005 Corona (J.) Facts of the Case:

This is a consolidated petition assailing the decision of the Court of Appeals (CA). Petitioners and the private respondent are registered owners of neighboring parcels of land wherein between the lots is a lowlevel strip of land with stagnant body of water. Whenever there is a storm or heavy rain, the water therein would flood thereby causing damage to houses of the Polinars prompting them to build a concrete wall on the bank of the strip of land about 3meters from their house and riprapped the soil in that portion. The Useros claimed ownership of the strip, demanded the halt of the construction but the Polinars never heeded believing that the strip is part of a creek. However, the Polinars offered to pay for the land. As the parties still failed to settle, both filed separate complaints for forcible entry. The Municipal Trial Court ruled in favor of the petitioner, while the regional trial court reversed and ordered the dismissal of the complaint and confirmed the existence of the creek between the lots. Issue: Whether or not the disputed strip of land is part of the creek hence part of public domain Ruling: Art. 420 of the Philippine New Civil Code provides for properties which are part of public domain. A creek is included in the phrase "and others of similar character". A creek, which refers to a recess or arm of a river is a property belonging to the public domain, therefore not susceptible of private ownership. Being a public water, it cannot be registered under the Torrens system under the name of any individual. JOSE MENCHAVEZ, JUAN MENCHAVEZ JR., SIMEON MENCHAVEZ, RODOLFO MENCHAVEZ, CESAR MENCHAVEZ, REYNALDO, MENCHAVEZ, ALMA MENCHAVEZ, ELMA MENCHAVEZ, CHARITO M. MAGA, FE M. POTOT, THELMA M. REROMA, MYRNA M. YBAEZ, and SARAH M. VILLABER, petitioners, vs. FLORENTINO TEVES JR., respondent.

DECISION PANGANIBAN, J.: A void contract is deemed legally nonexistent. It produces no legal effect. As a general rule, courts leave parties to such a contract as they are, because they are in pari delicto or equally at fault. Neither party is entitled to legal protection. The Case Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the February 28, 2001 Decision[2] and the April 16, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No. 51144. The challenged Decision disposed as follows: WHEREFORE, the assailed MODIFIED, as follows: decision is hereby

1. Ordering [petitioners] to jointly and severally pay the [respondent] the amount of P128,074.40 as actual damages, and P50,000.00 as liquidated damages; 2. Dismissing the third party complaint against the third party defendants; 3. Upholding the counterclaims of the third party defendants against the [petitioners. Petitioners] are hereby required to pay [the] third party defendants the sum of P30,000.00 as moral damages for the clearly unfounded suit;

4. Requiring the [petitioners] to reimburse the third party defendants the sum of P10,000.00 in the concept of attorneys fees and appearance fees of P300.00 per appearance; 5. Requiring the [petitioners] to reimburse the third party defendants the sum of P10,000.00 as exemplary damages pro bono publico and litigation expenses including costs, in the sum of P5,000.00.[4] The assailed Resolution denied petitioners Motion for Reconsideration. The Facts On February 28, 1986, a Contract of Lease was executed by Jose S. Menchavez, Juan S. Menchavez Sr., Juan S. Menchavez Jr., Rodolfo Menchavez, Simeon Menchavez, Reynaldo Menchavez, Cesar Menchavez, Charito M. Maga, Fe M. Potot, Thelma R. Reroma, Myrna Ybaez, Sonia S. Menchavez, Sarah Villaver, Alma S. Menchavez, and Elma S. Menchavez, as lessors; and Florentino Teves Jr. as lessee Of an area covered by FISHPOND APPLICATION No. VI-1076 of Juan Menchavez, Sr., covering an area of 10.0 hectares more or less located at Tabuelan, Cebu; On June 2, 1988, Cebu RTC Sheriffs Gumersindo Gimenez and Arturo Cabigon demolished the fishpond dikes constructed by respondent and delivered possession of the subject property to other parties.[6] As a result, he filed a Complaint for damages with application for preliminary attachment against

petitioners. In his Complaint, he alleged that the lessors had violated their Contract of Lease, As a consequence of these provisions, and the declared public policy of the State under the Regalian Doctrine, the lease contract between Florentino Teves, Jr. and Juan Menchavez Sr. and his family is a patent nullity. Being a patent nullity, [petitioners] could not give any rights to Florentino Teves, Jr. under the principle: NEMO DAT QUOD NON HABET - meaning ONE CANNOT GIVE WHAT HE DOES NOT HAVE, considering that this property in litigation belongs to the State and not to [petitioners]. Therefore, the first issue is resolved in the negative, as the court declares the contract of lease as invalid and void ab-initio. On the issue of whether [respondent] and [petitioners] are guilty of mutual fraud, the court rules that the [respondent] and [petitioners] are in pari-delicto. As a consequence of this, the court must leave them where they are found. x x x. xxx xxx xxx

x x x. Why? Because the defendants ought to have known that they cannot lease what does not belong to them for as a matter of fact, they themselves are still applying for a lease of the same property under litigation from the government. On the other hand, Florentino Teves, being fully aware that [petitioners were] not yet the owner[s], had assumed the risks and under the principle of VOLENTI NON FIT INJURIA NEQUES DOLUS - He who voluntarily

assumes a risk, does not suffer damage[s] thereby. As a consequence, when Teves leased the fishpond area from [petitioners]- who were mere holders or possessors thereof, he took the risk that it may turn out later that his application for lease may not be approved. After the court has ruled that the contract of lease is null and void ab-initio, there is no right of the [respondent] to protect and therefore[,] there is no basis for questioning the Sheriffs authority to demolish the dikes in order to restore the prevailing party, under the principle VIDETUR NEMO QUISQUAM ID CAPERE QUOD EI NECESSE EST ALII RESTITUERE - He will not be considered as using force who exercise his rights and proceeds by the force of law. The court hereby renders judgment as follows: 1. Dismissing the x x x complaint by the [respondent] against the [petitioners]; 2. Dismissing the third party complaint against the third party defendants; Respondent elevated the case to the Court of Appeals, where it was docketed as CA-GR CV No. 51144. Ruling of the Court of Appeals The CA disagreed with the RTCs finding that petitioners and respondent were in pari delicto. It contended that while there was negligence on the part of respondent for failing to verify the ownership of the subject property, there was no evidence that he had knowledge of petitioners lack of ownership.[11]

Hence, this Petition.[15] The Issues Were the Parties in Pari Delicto? The Court shall discuss the two issues simultaneously. In Pari Delicto Rule on Void Contracts The parties do not dispute the finding of the trial and the appellate courts that the Contract of Lease was void.[17] Indeed, the RTC correctly held that it was the State, not petitioners, that owned the fishpond. The 1987 Constitution specifically declares that all lands of the public domain, waters, fisheries and other natural resources belong to the State.[18] Included here are fishponds, which may not be alienated but only leased.[19] Possession thereof, no matter how long, cannot ripen into ownership.[20] Being merely applicants for the lease of the fishponds, petitioners had no transferable right over them. And even if the State were to grant their application, the law expressly disallowed sublease of the fishponds to respondent.[21] Void are all contracts in which the cause, object or purpose is contrary to law, public order or public policy.[22] Finding of In Pari Delicto: A Question of Fact Unquestionably, petitioners leased out a property that did not belong to them, one that they had no authority to sublease. The trial court correctly observed that petitioners still had a pending lease application with the

State at the time they entered into the Contract with respondent.[33] Respondent, on the other hand, claims that petitioners misled him into executing the Contract.[34] He insists that he relied on their assertions regarding their ownership of the property. His own evidence, however, rebuts his contention that he did not know that they lacked ownership. At the very least, he had notice of their doubtful ownership of the fishpond. Respondent himself admitted that he was aware that the petitioners lease application for the fishpond had not yet been approved.[35] Thus, he knowingly entered into the Contract with the risk that the application might be disapproved. Noteworthy is the fact that the existence of a fishpond lease application necessarily contradicts a claim of ownership. That respondent did not know of petitioners lack of ownership is therefore incredible. A cursory examination of the Contract suggests that it was drafted to favor the lessee. It can readily be presumed that it was he or his counsel who prepared it -a matter supported by petitioners evidence.[39] The ambiguity should therefore be resolved against him, being the one who primarily caused it.[40] The CA erred in finding that petitioners had failed to prove actual knowledge of respondent of the ownership status of the property that had been leased to him. it reveals his fault in entering into a void Contract. As both parties are equally at fault, neither may recover against the other.[42]

Since there is no contract, the injured party may only recover through other sources of obligations such as a law or a quasi-contract.[47] A party recovering through these other sources of obligations may not claim liquidated damages, which is an obligation arising from a contract. WHEREFORE, the Petition is GRANTED and the assailed Decision and Resolution SET ASIDE. The Decision of the trial court is hereby REINSTATED. No pronouncement as to costs. SO ORDERED. CHAVEZ V. PUBLIC ESTATES AUTHORITY 384 SCRA 152

FACTS: President Marcos through a presidential decree created PEA, which was tasked with the development, improvement, and acquisition, lease, and sale of all kinds of lands. The then president also transferred to PEA the foreshore and offshore lands of Manila Bay under the Manila-Cavite Coastal Road and Reclamation Project. Thereafter, PEA was granted patent to the reclaimed areas of land and then, years later, PEA entered into a JVA with AMARI for the development of the Freedom Islands. These two entered into a joint venture in the absence of any public bidding.

Later, a privilege speech was given by Senator President Maceda denouncing the JVA as the grandmother of all scams. An investigation was conducted and it was concluded that the lands that PEA was conveying to AMARI were lands of the public domain; the certificates of title over the Freedom Islands were void; and the JVA itself was illegal. This prompted Ramos to form an investigatory committee on the legality of the JVA. Petitioner now comes and contends that the government stands to lose billions by the conveyance or sale of the reclaimed areas to AMARI. He also asked for the full disclosure of the renegotiations happening between the parties.

ISSUE: W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed or to be reclaimed, violate the Constitution.

HELD: 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. The 1987 Constitution recognizes the Regalian doctrine. It 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. 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 area are stillsubmerged areas forming part of Manila Bay. Further, it is provided that AMARI will reimburse the actual costs in reclaiming the areas of land and it will shoulder the other reclamation costs to be incurred. The foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters and other natural resources and consequently owned by the State. As such, foreshore and submerged areas shall not be alienable unless they are classified as agricultural lands of the public domain. The mere reclamation of these areas by the PEA doesnt convert these inalienable natural resources of the State into alienable and disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable and disposable if the law has reserved them for some public or quasi-public use. FERNANDA ARBIAS, PETITIONER, VS. THE REPUBLIC OF THE PHILIPPINES, RESPONDENT.

The factual antecedents of the case are as follows: Jardeleza) executed a Deed of Absolute Sale[5] selling to petitioner, married to Jimmy Arbias (Jimmy), a parcel of unregistered land for the sum of P33,000.00. According to the Deed, the subject property was residential and consisted of 600 square meters, more or less. petitioner filed with the RTC a verified Application for Registration of Title[6] over the subject property, the respondent Republic of the Philippines, through the Office of the Solicitor General (OSG), filed its Notice of Appearance and deputized the City Prosecutor of Iloilo City to appear on its behalf before the RTC in LRC Case No. N-1025. Thereafter, the respondent filed an Opposition

to petitioner's application for registration of the subject property.[12] the RTC ruled on petitioner's application for registration the Court of Appeals rendered the assailed Decision in which it REVERSED and SET ASIDE. Accordingly, the application for original registration of title is hereby DISMISSED.[21]

It was on the issue of possession, however, that the Court of Appeals digressed from the ruling of the RTC. The appellate court found that other than petitioner's own general statements and tax declarations, no other evidence was presented to prove her possession of the subject property for the period required by law. Likewise, petitioner failed to establish the classification of the subject property as an alienable and disposable land of the public domain. ISSUES: Petitioner ascribes error on the part of the Court of Appeals for failing to conclude that she and her predecessor-in-interest possessed the subject property in the concept of an owner for more than 30 years and that the said property had already been classified as an alienable and disposable land of the public domain. Petitioner contends that her documentary and testimonial evidence were sufficient to substantiate the said allegations, as correctly and conclusively pronounced by the RTC. Petitioner likewise points out that no third party appeared before the RTC to oppose her application and possession other than respondent. Respondent, then represented by the City Prosecutor, did not even adduce any evidence before the RTC to rebut petitioner's claims; thus, respondent, presently represented by the OSG, is now estopped from assailing the RTC Decision. Petitioner finally maintains that assuming her possession was indeed not proven under the circumstances, the Court of Appeals should have remanded the case to the trial court for further

proceedings, instead of dismissing it outright. This Court finds the petition plainly without merit. HELD: the burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the person applying for registration. The applicant must show that the land subject of the application is alienable or disposable.[26] In the case at bar, petitioner miserably failed to discharge the burden of proof imposed on her by the law. First, the documentary evidence that petitioner presented before the RTC did not in any way prove the length and character of her possession and those of her predecessor-in-interest relative to the subject property. Second, neither does the evidence on record establish to our satisfaction that the subject property has been classified as alienable and disposable. petitioner failed to prove that she had an imperfect title to the subject property, which could be confirmed by registrationSO ORDERED. REPUBLIC OF THE PHILIPPINES, Petitioner, vs. CAYETANO L. SERRANO,1cralaw and HEIRS OF CATALINO M. ALAAN, represented by PAULITA P. ALAAN, Respondents. DECISION CARPIO MORALES, J.: Respondent Cayetano L. Serrano (Cayetano) filed on September 21, 1988 before the Regional Trial Court (RTC) of Butuan City an application for registration,2cralaw Cayetano claimed to have acquired the lot by inheritance from his deceased parents, Simeon Serrano (Simeon) and Agustina Luz; by virtue of a Deed of Exchange3cralaw dated February 10, 1961; and by a private deed of partition and extrajudicial settlement forged by him and his co-heirs.

Cayetano also claimed to have been in open, continuous, exclusive and notorious possession of the lot under a claim of ownership before 1917 by himself and through his deceased parentspredecessors-in-interest or for more than 70 years. The Heirs of Catalino Alaan, represented by Paulita Alaan (Paulita),5cralaw intervened and filed an application for registration,6cralaw their predecessor-in-interest Catalino Alaan (Catalino) having purchased7cralaw a 217.45-square meter undivided portion of the lot from Cayetano on February 27, 1989 during the pendency of Cayetano's application for registration. The intervenor-heirs of Catalino, also invoking the provisions of the Property Registration Decree or, alternatively, of Chapter VIII, Section 48(b) of Commonwealth Act No. 141, prayed that their application for confirmation of title be considered jointly with that of Cayetano's, and that, thereafter, original certificates of title be issued in both their names. Cayetano raised no objection or opposition to the intervenor-Heirs of Catalino's application for registration.8cralaw By Decision of November 3, 2003,27cralaw the RTC granted respondents applications, The Office of the Solicitor General, on behalf of herein petitioner, appealed the RTC decision before the Court of Appeals on the grounds that respondents failed to present evidence that the property was alienable or that they possessed the same in the manner and duration required by the provisions of the Property Registration Decree.28cralaw By Decision of May 13, 2008,29cralaw the appellate court affirmed the decision of the RTC ISSUE: that respondents failed to present evidence that the property was alienable or that they possessed the same in the manner and duration

required by the provisions of the Property Registration Decree.28cralaw raised by petitioner before the appellate court. HELD: The requisites for the filing of an application for registration of title under Section 14(1) of the Property Registration Decree are: that the property is alienable and disposable land of the public domain; that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation thereof; and that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.31cralaw While Cayetano failed to submit any certification which would formally attest to the alienable and disposable character of the land applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in evidence by Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that Lot 249 had been verified as belonging to the alienable and disposable area as early as July 18, 1925. The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that no opposition was filed or registered by the Land Registration Authority or the DENR to contest respondents applications on the ground that their respective shares of the lot are inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the Certification may thus be equitably extended in favor of respondents. Leonardo clearly established the character of the possession of Cayetano and his predecessors-in-interest over the lot. The totality of the evidence thus points to the unbroken chain of acts exercised by Cayetano to demonstrate his occupation and possession of the land in the concept of owner, to the exclusion of all others.

SO ORDERED. REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. HEIRS OF JUAN FABIO, NAMELY: DOMINGA C. FABIO, SOCORRO D. FABIO, LYDIA D. FABIO, ROLANDO D. FABIO, NORMA D. FABIO, NORMA L. FABIO, ANGELITA FABIO, ROSALIE FABIO, DANILO FABIO, RENATO FABIO, LEVITA FABIO, IRENE FABIO, TERESITA MOLERA, ROSEMARIE C. PAKAY, LIGAYA C. MASANGKAY, ALFREDO F. CASTILLO, MELINDA F. CASTILLO, MERCEDITA F. CASTILLO, ESTELA DE JESUS AQUINO, FELECITO FABIO, AND ALEXANDER FABIO, REPRESENTED HEREIN BY ANGELITA F. ESTEIBAR AS THEIR ATTORNEY-IN-FACT, RESPONDENTS. DECISION CARPIO, J.: The Facts respondents, who are the heirs of Juan Fabio, , filed with the Regional Trial Court of Naic, Cavite, an application for registration of title situated in Barangay Sapang, Ternate, Cavite. The respondents sought the registration of title under the provisions of Act No. 496 or the Land Registration Act, as amended by Presidential Decree No. 1529 (PD 1529).[4] In the application, respondents alleged that they are the owners of the Lot, including all the improvements, having acquired the same through a bona fide claim of ownership. They declared that they and their predecessors-in-interest were in open, continuous, exclusive and notorious possession of the Lot in the concept of an owner for more than 100 years.[5]

On 29 September 1997, the trial court rendered a Decision ordering the registration of the Lot in the name of Juan Fabio. The Republic of the Philippines (petitioner), through the Office of the Solicitor General, filed an appeal with the Court of Appeals. Petitioner claimed that the trial court erred in ruling that respondents have acquired a vested right over the Lot which falls within the Calumpang Point Naval Reservation. the Court of Appeals affirmed the ruling of the trial court Hence, the instant petition. The Issues whether the respondents have acquired a right over the Lot. The Court's Ruling Second Issue: Validity of Respondents' Title Petitioner asserts that both the trial and appellate courts failed to recognize the import of the notation in the survey plan stating that the Lot falls within the Calumpang Point Naval Reservation. At the time the application for registration of title was filed, the Lot was no longer open to private ownership as it had been classified as a military reservation for public service. Thus, respondents are not entitled to have the Lot registered under the Torrens system. persons claiming the protection of "private rights" in order to exclude their lands from military reservations must show by clear and convincing evidence that the properties in question have been acquired by a legal method of acquiring public lands. Here, respondents failed to do so, and are thus not entitled to have the Lot registered in their names. Clearly, both the trial and appellate courts gravely erred in granting respondents' application for registration of title.

DIAZ VS REPUBLIC RESOLUTION CORONA, J .: This is a letter-motion praying for reconsideration (for the third time) of the June 16, 2008 resolution of this Court denying the petition for review filed by petitioner Florencia G. Diaz. Petitioner's late mother, Flora Garcia (Garcia), filed an application for registration of a vast tract of land1cralaw located in Laur, Nueva Ecija and Palayan City in the then Court of First Instance (CFI), Branch 1, Nueva Ecija on August 12, 1976.2cralaw She alleged that she possessed the land as owner and worked, developed and harvested the agricultural products and benefits of the same continuously, publicly and adversely for more or less 26 years. The Republic of the Philippines, represented by the Office of the Solicitor General (OSG), opposed the application because the land in question was within the Fort Magsaysay Military Reservation (FMMR), established by virtue of Proclamation No. 237 (Proclamation 237)3cralaw in 1955. Thus, it was inalienable as it formed part of the public domain. Significantly, on November 28, 1975, this Court already ruled in Director of Lands v. Reyes 4cralaw that the property subject of Garcia's application was inalienable as it formed part of a military reservation. Moreover, the existence of Possessory Information Title No. 216 (allegedly registered in the name of a certain Melecio Padilla on March 5, 1895), on which therein respondent Paraaque Investment and Development Corporation anchored its claim on the land, was not proven. Accordingly, the decree of registration issued in its favor was declared null and void.

Reyes notwithstanding, the CFI ruled in Garcia's favor in a decision5cralaw dated July 1, 1981. The Republic eventually appealed the decision of the CFI to the Court of Appeals (CA). In its decision6cralaw dated February 26, 1992, penned by Justice Vicente V. Mendoza (Mendoza decision),7cralaw the appellate court reversed and set aside the decision of the CFI. The CA found that Reyes was applicable to petitioner's case as it involved the same property. The CA observed that Garcia also traced her ownership of the land in question to Possessory Information Title No. 216. As Garcia's right to the property was largely dependent on the existence and validity of the possessory information title the probative value of which had already been passed upon by this Court in Reyes, and inasmuch as the land was situated inside a military reservation, the CA concluded that she did not validly acquire title thereto. During the pendency of the case in the CA, Garcia passed away and was substituted by her heirs, one of whom was petitioner Florencia G. Diaz.8cralaw Petitioner filed a motion for reconsideration of the Mendoza decision. While the motion was pending in the CA, petitioner also filed a motion for recall of the records from the former CFI. Without acting on the motion for reconsideration, the appellate court, with Justice Mendoza as ponente , issued a resolution9cralaw upholding petitioner's right to recall the records of the case. Subsequently, however, the CA encouraged the parties to reach an amicable settlement on the matter and even gave the parties sufficient time to draft and finalize the same. The parties ultimately entered into a compromise agreement with the Republic withdrawing its claim on the more or less 4,689 hectares supposedly outside the FMMR. For her part, petitioner withdrew her

application for the portion of the property inside the military reservation. They filed a motion for approval of the amicable settlement in the CA.10cralaw On June 30, 1999, the appellate court approved the compromise agreement.11cralaw On January 12, 2000, it directed the Land Registration Administration to issue the corresponding decree of registration in petitioner's favor.12cralaw However, acting on a letter written by a certain Atty. Restituto S. Lazaro, the OSG filed a motion for reconsideration of the CA resolution ordering the issuance of the decree of registration. The OSG informed the appellate court that the tract of land subject of the amicable settlement was still within the military reservation. On April 16, 2007, the CA issued an amended resolution (amended resolution)13cralaw annulling the compromise agreement entered into between the parties. The relevant part of the dispositive portion of the resolution read: ACCORDINGLY,the Court resolves to: (1) x x x x x x (2) x x x x x x (3) x x x x x x (4) x x x x x x (5) x x x x x x (6) REVERSEthe Resolution dated June 30, 1999 of this Court approving the Amicable Settlement dated May 18, 1999 executed between the Office of the Solicitor General and Florencia Garcia Diaz[;]

(7) ANNUL and SET ASIDEthe Amicable Settlement dated May 18, 1999 executed between the Office of the Solicitor General and Florencia Garcia Diaz; the said Amicable Settlement is hereby DECLAREDto be without force and effect; (8) GRANTthe Motion for Reconsideration filed by the Office of the Solicitor General and, consequently, SET ASIDEthe Resolution dated January 12, 2000 which ordered, among other matters, that a certificate of title be issued in the name of plaintiffappellee Florencia Garcia Diaz over the portion of the subject property in consonance with the Amicable Settlement dated May 18, 1999 approved by the Court in its Resolution dated June 30, 1999; (9) SET ASIDEthe Resolution dated June 30, 1999 approving the May 18, 1999 Amicable Settlement and the Resolution dated September 20, 1999 amending the aforesaid June 30, 1999 Resolution; and (10) REINSTATE the Decision dated February 26, 1992 dismissing applicant-appellee Diaz registration herein. SO ORDERED. (Emphasis supplied) Petitioner moved for reconsideration. For the first time, she assailed the validity of the Mendoza decision the February 26, 1992 decision adverted to in the CA's amended resolution. She alleged that Justice Mendoza was the assistant solicitor general during the initial stages of the land registration proceedings in the trial court and therefore should have inhibited himself when the case reached the CA. His failure to do so, she laments, worked an injustice against her constitutional right to due process. Thus, the Mendoza decision should be declared null and void. The motion was denied.14cralaw

Thereafter, petitioner filed a petition for review on certiorari 15cralaw in this Court. It was denied for raising factual issues.16cralaw She moved for reconsideration.17cralaw This motion was denied with finality on the ground that there was no substantial argument warranting a modification of the Court's resolution. The Court then ordered that no further pleadings would be entertained. Accordingly, we ordered entry of judgment to be made in due course.18cralaw Petitioner, however, insisted on filing a motion to lift entry of judgment and motion for leave to file a second motion for reconsideration and to refer the case to the Supreme Court en banc .19cralaw The Court denied20cralaw it considering that a second motion for reconsideration is a prohibited pleading.21cralaw Furthermore, the motion to refer the case to the banc was likewise denied as the banc is not an appellate court to which decisions or resolutions of the divisions may be appealed.22cralaw We reiterated our directive that no further pleadings would be entertained and that entry of judgment be made in due course. Not one to be easily deterred, petitioner wrote identical letters, first addressed to Justice Leonardo A. Quisumbing (then Acting Chief Justice) and then to Chief Justice Reynato S. Puno himself.23cralaw The body of the letter, undoubtedly in the nature of a third motion for reconsideration, is hereby reproduced in its entirety: This is in response to your call for "Moral Forces" in order to "redirect the destiny of our country which is suffering from moral decadence," that to your mind, is the problem which confronts us. (Inquirer, January 15, 2009, page 1)[.] I recently lost my case with the Supreme Court, G.R. N[o] . 181502, and my lawyer has done all that is humanly possible to convince the court to take a second look at the miscarriage of justice that will result from the implementation of the DISMISSAL in a MINUTE RESOLUTION of our Petition for Review.

Pending before your Division (First Division) is a last plea for justice so that the case may be elevated to the Supreme Court en banc . I hope the Court exercises utmost prudence in resolving the last plea. For ready reference, a copy of the Motion is hereto attached as Annex "A". The issue that was brought before the Honorable Supreme Court involves the Decision of then Justice Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio . It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in which it became possible for him to discharge the minimum requirement of due process, [ i.e .] the ability of the court to render "impartial justice," because Mr. Justice Mendoza became the ponente of the Court of Appeals Decision, reversing the findings of the trial court, notwithstanding the fact that he, as Assistant Solicitor General, was the very person who appeared on behalf of the Republic, as the oppositor in the very same land registration proceedings in which he lost. In other words, he discharged the duties of prosecutor and judge in the very same case. In the case of the "Alabang Boys[,] " the public was outraged by the actions of Atty. Verano who admitted having prepared a simple resolution to be signed by the Secretary of Justice. In my case, the act complained of is the worst kind of violation of my constitutional right. It is simply immoral, illegal and unconstitutional, for the prosecutor to eventually act as the judge, and reverse the very decision in which he had lost. If leaked to the tri-media[,] my case will certainly evoke even greater spite from the public, and put the Supreme Court in bad light. I must confess that I was tempted to pursue such course of action. I however

believe that such an action will do more harm than good, and even destroy the good name of Hon. Justice Mendoza. I fully support your call for "moral force" that will slowly and eventually lead our country to redirect its destiny and escape from this moral decadence, in which we all find ourselves. I am content with the fact that at least, the Chief Justice continues to fight the dark forces that surround us everyday. I only ask that the Supreme Court endeavor to ensure that cases such as mine do not happen again, so that the next person who seeks justice will not experience the pain and frustration that I suffered under our judicial system. Thank you, and more power to you, SIR. (Emphasis in the original). The language of petitioner's letter/motion is unmistakable. It is a thinly veiled threat precisely worded and calculated to intimidate this Court into giving in to her demands to honor an otherwise legally infirm compromise agreement, at the risk of being vilified in the media and by the public. This Court will not be cowed into submission. We deny petitioner's letter/third motion for reconsideration. APPLICABILITY OF REYES The Court agrees with the Republic's position that Reyes is applicable to this case. To constitute res judicata , the following elements must concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits;

(3) it must have been rendered by a court having jurisdiction over the subject matter and parties; and (4) there must be between the first and second actions, identity of parties, of subject matter, and of causes of action. 24cralaw The first three requisites have undoubtedly been complied with. However, petitioner takes exception to the fourth requisite, particularly on the issue of identity of parties. In her petition for review filed in this Court, she contends that since the applicants in the two cases are different, the merits of the two cases should, accordingly, be determined independently of each other.25cralaw This contention is erroneous. The facts obtaining in this case closely resemble those in Aquino v. Director of Lands .26cralaw In that case, Quintin Taedo endeavored to secure title to a considerable tract of land by virtue of his possession thereof under CA 141. When the case eventually reached this Court, we affirmed the trial court's decision to dismiss the proceedings as the property in question was part of the public domain. Quintin's successorin-interest, Florencia Taedo, who despite knowledge of the proceedings did not participate therein, thereafter sold the same property to Benigno S. Aquino. The latter sought to have it registered in his name. The question in that case, as well as in this one, was whether our decision in the case in which another person was the applicant constituted res judicata as against his successors-in-interest. We ruled there, and we so rule now, that in registration cases filed under the provisions of the Public Land Act for the judicial confirmation of an incomplete and imperfect title, an order dismissing an application for registration and declaring the land as part of the public domain constitutes res judicata , not only against the adverse claimant, but also against allpersons.27cralaw We also declared in Aquino that:

From another point of view, the decision in the first action has become the "law of the case" or at least falls within the rule of stare decisis . That adjudication should be followed unless manifestly erroneous. It was taken and should be taken as the authoritative view of the highest tribunal in the Philippines. It is indispensable to the due administration of justice especially by a court of last resort that a question once deliberately examined and decided should be considered as settled and closed to further argument. x x x28cralaw Be that as it may, the fact is that, even before the CFI came out with its decision in favor of petitioner on July 1, 1981, this Court, in Reyes , already made an earlier ruling on November 28, 1975 that the disputed realty was inalienable as it formed part of a military reservation. Thus, petitioner's argument that the findings of fact of the trial court on her registrable title are binding on us on the principle that findings of fact of lower courts are accorded great respect and bind even this Court is untenable. Rather, it was incumbent upon the court a quo to respect this Court's ruling in Reyes , and not the other way around. However, despite having been apprised of the Court's findings in Reyes (which should have been a matter of judicial notice in the first place), the trial court still insisted on its divergent finding and disregarded the Court's decision in Reyes, declaring the subject land as forming part of a military reservation, and thus outside the commerce of man. By not applying our ruling in Reyes , the trial judge virtually nullified the decision of this Court and therefore acted with grave abuse of discretion.29cralaw Notably, a judgment rendered with grave abuse of discretion is void and does not exist in legal contemplation.30cralaw All lower courts, especially the trial court concerned in this case, ought to be reminded that it is their duty to obey the decisions of the Supreme Court. A conduct becoming of inferior courts demands a conscious awareness of the position they occupy in the interrelation and operation of our judicial system. As eloquently declared by Justice J.B. L. Reyes,

"There is only one Supreme Court from whose decision all other courts should take their bearings."31cralaw ACQUISITION OF PRIVATE RIGHTS Petitioner, however, argues that Proclamation 237 itself recognizes that its effectivity is "subject to private rights, if any there be." By way of a background, we recognized in Reyes that the property where the military reservation is situated is forest land. Thus: Before the military reservation was established, the evidence is inconclusive as to possession, for it is shown by the evidence that the land involved is largely mountainous and forested. As a matter of fact, at the time of the hearing, it was conceded thatapproximately 13,957 hectares of said land consist of public forest.x x x (Emphasis supplied)32cralaw Concomitantly, we stated therein, and we remind petitioner now, that forest lands are not registrable under CA 141. [E] ven more important, Section 48[b] of CA No. 141, as amended, applies exclusively to public agricultural land. Forest lands or area covered with forest are excluded. It is well-settled that forest land is incapable of registration; and its inclusion in a title, whether such title be one issued using the Spanish sovereignty or under the present Torrens system of registration, nullifies the title. (Emphasis supplied).33cralaw However, it is true that forest lands may be registered when they have been reclassified as alienable by the President in a clear and categorical manner (upon the recommendation of the proper department head who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands)34cralaw coupled with possession by the claimant as well as that of her predecessors-in-interest. Unfortunately for petitioner, she was not able to produce such evidence.

Accordingly, her occupation thereof, and that of her predecessors-ininterest, could not have ripened into ownership of the subject land. This is because prior to the conversion of forest land as alienable land, any occupation or possession thereof cannot be counted in reckoning compliance with the thirty-year possession requirement under Commonwealth Act 141 (CA 141) or the Public Land Act.35cralaw This was our ruling in Almeda v. CA .36cralaw The rules on the confirmation of imperfect titles do not apply unless and until the land classified as forest land is released through an official proclamation to that effect. Then and only then will it form part of the disposable agricultural lands of the public domain.37cralaw Coming now to petitioner's contention that her "private rights" to the property, meaning her and her predecessors possession thereof prior to the establishment of the FMMR, must be respected, the same is untenable. As earlier stated, we had already recognized the same land to be public forest even before the FMMR was established . To reiterate: Before the military reservation was established, the evidence is inconclusive as to possession, for it is shown by the evidence that the land involved is largely mountainous and forested. As a matter of fact, at the time of the hearing, it was conceded that approximately 13,957 hectares of said land consist of public forest. x x x Therefore, even if possession was for more than 30 years, it could never ripen to ownership. But even assuming that the land in question was alienable land before it was established as a military reservation, there was nevertheless still a dearth of evidence with respect to its occupation by petitioner and her predecessors-in-interest for more than 30 years. In Reyes , we noted: Evidently, Melecio Padilla, having died on February 9, 1900, barely five (5) years after the inscription of the informacion possessoria, could not have converted the same into a record of ownership twenty (20) years

after such inscription, pursuant to Article 393 of the Spanish Mortgage Law. xxx During the lifetime of Melecio Padilla, only a small portion thereof was cleared and cultivated under the kaingin system, while some portions were used as grazing land. After his death, his daughter, Maria Padilla, caused the planting of vegetables and had about forty (40) tenants for the purpose. During the Japanese occupation, Maria Padilla died. x x x xxx A mere casual cultivation of portions of the land by the claimant, and the raising thereon of cattle, do not constitute possession under claim of ownership. In that sense, possession is not exclusive and notorious as to give rise to a presumptive grant from the State. While grazing livestock over land is of course to be considered with other acts of dominion to show possession, the mere occupancy of land by grazing livestock upon it, without substantial inclosures, or other permanent improvements, is not sufficient to support a claim of title thru acquisitive prescription. The possession of public land, however long the period may have extended, never confers title thereto upon the possessor because the statute of limitations with regard to public land does not operate against the State unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State.38cralaw xxx Furthermore, the fact that the possessory information title on which petitioner also bases her claim of ownership was found to be inexistent in Reyes ,39cralaw thus rendering its probative value suspect, further militates against granting her application for registration. NULLITY OF COMPROMISE AGREEMENT

On the compromise agreement between the parties, we agree with the CA that the same was null and void. An amicable settlement or a compromise agreement is in the nature of a contract and must necessarily comply with the provisions of Article 1318 of the New Civil Code which provides: Art. 1318. There is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. Petitioner was not able to provide any proof that the consent of the Republic, through the appropriate government agencies, i.e. the Department of Environment and Natural Resources, Land Management Bureau, Land Registration Authority, and the Office of the President, was secured by the OSG when it executed the agreement with her.40cralaw The lack of authority on the part of the OSG rendered the compromise agreement between the parties null and void because although it is the duty of the OSG to represent the State in cases involving land registration proceedings, it must do so only within the scope of the authority granted to it by its principal, the Republic of the Philippines.41cralaw In this case, although the OSG was authorized to appear as counsel for respondent, it was never given the specific or special authority to enter into a compromise agreement with petitioner. This is in violation of the provisions of Rule 138 Section 23, of the Rules of Court which requires "special authority" for attorneys to bind their clients. Section 23. Authority of attorneys to bind clients. Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special

authority, compromise their client's litigation,or receive anything in discharge of a client's claim but the full amount in cash. (Emphasis supplied). Moreover, the land in question could not have been a valid subject matter of a contract because, being forest land, it was inalienable. Article 1347 of the Civil Code provides: Art. 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract.All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law. All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract. (Emphasis supplied) Finally, the Court finds the cause or consideration of the obligation contrary to law and against public policy. The agreement provided that, in consideration of petitioner's withdrawal of her application for registration of title from that portion of the property located within the military reservation, respondent was withdrawing its claim on that part of the land situated outside said reservation. The Republic could not validly enter into such undertaking as the subject matter of the agreement was outside the commerce of man. PETITIONERS CONTEMPT OF COURT This Court, being the very institution that dispenses justice, cannot reasonably be expected to just sit by and do nothing when it comes under attack. That petitioner's letter-motion constitutes an attack against the integrity of this Court cannot be denied. Petitioner started her letter innocently enough by stating:

This is in response to your call for "Moral Forces" in order to "redirect the destiny of our country which is suffering from moral decadence," that to your mind, is the problem which confronts us. (Inquirer, January 15, 2009, page 1)[.] It, however, quickly progressed into a barely concealed resentment for what she perceived as this Court's failure to exercise "utmost prudence" in rendering "impartial justice" in deciding her case. Petitioner recounted: I recently lost my case with the Supreme Court, G.R. N[o] . 181502, and my lawyer has done all that is humanly possible to convince the court to take a second look at the miscarriage of justice that will result from the implementation of the DISMISSAL in a MINUTE RESOLUTION of our Petitionfor Review. Pending before your Division (First Division) is a last plea for justice so that the case may be elevated to the Supreme Court en banc . I hope the Court exercises utmost prudence in resolving the last plea. For ready reference, a copy of the Motion is hereto attached as Annex "A". The issue that was brought before the Honorable Supreme Court involves the Decision of then Justice Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio . It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in which it became possible for him to discharge the minimum requirement of due process, [ i.e .] the ability of the court to render "impartial justice," because Mr. Justice Mendoza became the ponente of the Court of Appeals Decision, reversing the findings of the trial court, notwithstanding the fact that he, as Assistant Solicitor General, was the very person who appeared on behalf of the Republic, as the oppositor in the very same land registration proceedings in which he lost. (Emphasis supplied).

Petitioner then indirectly hints that, when push comes to shove, she has no choice but to expose the irregularity concerning the Mendoza decision to the media. This is evident in her arrogant declaration that: If leaked to the tri-media[,] my case will certainly evoke even greater spite from the public, and put the Supreme Court in bad light. But she hastens to add in the same breath that: I must confess that I was tempted to pursue such course of action. I however believe that such an action will do more harm than good, and even destroy the good name of Hon. Justice Mendoza. Petitioner ends her letter by taking this Court to task: . . . endeavor to ensure that cases such as mine do not happen again, so that the next person who seeks justice will not experience the pain and frustration that I suffered under our judicial system. When required to show cause why she should not be cited for contempt for her baseless charges and veiled threats, petitioner answered: xxx The Letter of January 26, 2009 is not a "veiled threat[.] It was written in response to the call of the Chief Justice for a moral revolution. Juxtaposed against the factual backdrop of the "Alabang Boys" case and the Meralco [c] ase, involving Mr. Justice Jose L. Sabio which also enjoyed wide publicity over the tri-media, petitioner felt that the facts of the said cases pale in comparison to the facts of her case where the lawyer of her opponent eventually became justice of the appellate court and ended up reversing the very decision in which he lost, in clear violation of her [c] onstitutional [r] ight to fundamental fair play for no contestant in any litigation can ever serve as a judge without transgression of the due process clause. This is basic.

Petitioner confesses that she may have been emotional in the delivery of her piece, because correctly or incorrectly[,] she believes they are irrefutable. If in the course of that emotional delivery, she has offended your honors sensibilities, she is ready for the punishment, and only prays that his Court temper its strike with compassion as her letter to the Chief Justice was never written with a view of threatening the Court. xxx Petitioner wrote the Chief Justice in order to obtain redress and correction of the inequity bestowed upon her by destiny. It was never meant as a threat. The Court now puts an end to petitioner's irresponsible insinuations and threats of "going public" with this case. We are not blind to petitioner's clever and foxy interplay of threats alternating with false concern for the reputation of this Court. It is well to remind petitioner that the Court has consistently rendered justice with neither fear nor favor. The disposition in this case was arrived at after a careful and thorough deliberation of the facts of this case and all the matters pertaining thereto. The records of the case, in fact, show that all the pertinent issues raised by petitioner were passed upon and sufficiently addressed by the appellate court and this Court in their respective resolutions. As to petitioner's complaint regarding this Court's denial of her petition through a mere minute resolution (which allegedly deprived her of due process as the Court did not issue a full-blown decision stating the facts and applicable jurisprudence), suffice it to say that the Court is not dutybound to issue decisions or resolutions signed by the justices all the time. It has ample discretion to formulate ponencias , extended resolutions or even minute resolutions issued by or upon its authority, depending on its evaluation of a case, as long as a legal basis exists. When a minute resolution (signed by the Clerk of Court upon orders of the Court) denies or dismisses a petition or motion for reconsideration

for lack of merit, it is understood that the assailed decision or order, together with all its findings of fact and legal conclusions, are deemed sustained.42cralaw Furthermore, petitioner has doggedly pursued her case in this Court by filing three successive motions for reconsideration, including the lettermotion subject of this resolution. This, despite our repeated warnings that "no further pleadings shall be entertained in this case." Her unreasonable persistence constitutes utter defiance of this Court's orders and an abuse of the rules of procedure. This, alongside her thinly veiled threats to leak her case to the media to gain public sympathy although the tone of petitioner's compliance with our show-cause resolution was decidedly subdued compared to her earlier letters constitutes contempt of court. In Republic v. Unimex ,43cralaw we held: A statement of this Court that no further pleadings would be entertained is a declaration that the Court has already considered all issues presented by the parties and that it has adjudicated the case with finality. It is a directive to the parties to desist from filing any further pleadings or motions. Like all orders of this Court, it must be strictly observed by the parties. It should not be circumvented by filing motions ill-disguised as requests for clarification. A FEW OBSERVATIONS If petitioner was, as she adamantly insists, only guarding her constitutional right to due process, then why did she question the validity of the Mendoza decision late in the proceedings, that is, only after her motion for reconsideration in the CA (for its subsequent annulment of the compromise agreement) was denied? It is obvious that it was only when her case became hopeless that her present counsel frantically searched for some ground, any ground to resuscitate his client's lost cause, subsequently raising the issue. This is evident from a statement in her petition to this Court that:

It is this fresh discovery by the undersigned counsel of the nullity of the proceedings of the Court of Appealsthat places in doubt the entire proceedings it previously conducted, which led to the rendition of the February 26, 1992 Decision, a fact that escaped the scrutiny of applicant for registration Flora L. Garcia, as well as her lawyer, Atty. Cayetano Dante Diaz,who died in 1993, and the late Justice Fernando A. Santiago, who stood as counsel for Flora L. Garcia's successor-in-interest, herein petitioner, Florencia G. Garcia.44cralaw (Emphasis supplied). The above cited statement does not help petitioner's cause at all. If anything, it only proves how desperate the case has become for petitioner and her counsel. WHEREFORE,the letter-motion dated January 26, 2009 of petitioner is NOTED andis hereby treated as a third motion for reconsideration. The motion is DENIED considering that a third motion for reconsideration is a prohibited pleading and the plea utterly lacks merit. Petitioner is found GUILTYof contempt of court. Accordingly, a FINEof Five Thousand Pesos is hereby imposed on her, payable within ten days from receipt of this resolution. She is hereby WARNEDthat any repetition hereof shall be dealt with more severely. Treble costs against petitioner. SO ORDERED. G.R. No. 163072 : April 2, 2009 MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner, vs. CITY OF PASAY, SANGGUNIANG PANGLUNGSOD NG PASAY, CITY MAYOR OF PASAY, CITY TREASURER OF PASAY, and CITY ASSESSOR OF PASAY, Respondents. DISSENTING OPINION

TINGA, J.: DECISION.: DISSENTING OPINION, YNARES-SANTIAGO, J.: SEPARATE OPINION, NACHURA, J.: I maintain my dissent expressed in the 2006 ruling in MIAA v. City of Paraaque1 (the "Paraaque case.") The majority relies on two main points drawn from the 2006 Paraaque case in this instance as it rules once again that the MIAA is exempt from realty taxes assessed by the City of Pasay. First, because MIAA is a government instrumentality, it somehow finds itself exempt from the said taxes, supposedly by operation of the Local Government Code. Second, the subject properties are allegedly owned by the Republic of the Philippines, notwithstanding that legal title thereto is in the name of the MIAA, which is a distinct and independent juridical personality from the Republic. I. Once again, attempts are drawn to classify MIAA as a government instrumentality, and not as a government owned or controlled corporation. Such characterization was apparently insisted upon in order to tailor-fit the MIAA to Section 133 of the Local Government Code, which reads: Sec. 133. Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxx 15. Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units. (emphasis and underscoring supplied).

How was the Paraaque case able to define the MIAA as a instrumentality of the National Government? The case propounded that MIAA was not a GOCC: There is no dispute that a government-owned or controlled corporation is not exempt from real estate tax. However, MIAA is not a governmentowned or controlled corporation. Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines a governmentowned or controlled corporation as follows: SEC. 2. General Terms Defined. - ... (13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: .... (Emphasis supplied) A government-owned or controlled corporation must be "organized as a stock or non-stock corporation." MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no capital stock divided into shares. MIAA has no stockholders or voting shares. xxx Clearly, under its Charter, MIAA does not have capital stock that is divided into shares. Section 3 of the Corporation Code 10 defines a stock corporation as one whose "capital stock is divided into shares and . . . authorized to distribute to the holders of such shares dividends ...." MIAA has capital but it is not divided into shares of stock. MIAA has no stockholders or voting shares. Hence, MIAA is not a stock corporation.

MIAA is also not a non-stock corporation because it has no members. Section 87 of the Corporation Code defines a non-stock corporation as "one where no part of its income is distributable as dividends to its members, trustees or officers." A non-stock corporation must have members. Even if we assume that the Government is considered as the sole member of MIAA, this will not make MIAA a non-stock corporation. Non-stock corporations cannot distribute any part of their income to their members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual gross operating income to the National Treasury. 11 This prevents MIAA from qualifying as a non-stock corporation. Section 88 of the Corporation Code provides that non-stock corporations are "organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry, agriculture and like chambers." MIAA is not organized for any of these purposes. MIAA, a public utility, is organized to operate an international and domestic airport for public use.2 This "black or white" categorization of "stock" and "non-stock" corporations utterly disregards the fact that nothing in the Constitution prevents Congress from creating government owned or controlled corporations in whatever structure it deems necessary. Note that this definitions of "stock" and "non-stock" corporations are taken from the Administrative Code, and not the Constitution. The Administrative Code is a statute, and is thus not superior in hierarchy to any other subsequent statute created by Congress, including the charters for GOCCs. Since MIAA was presumed not to be a stock or non-stock corporation, the majority in the Paraaque case then strived to fit it into a category. Since MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify as a government-owned or controlled corporation. What then is the legal status of MIAA within the National Government?

MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. Section 2(10) of the Introductory Provisions of the Administrative Code defines a government "instrumentality" as follows: SEC. 2. General Terms Defined. - ... (10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter.... (Emphasis supplied) When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers. Thus, MIAA exercises the governmental powers of eminent domain, police authority and the levying of fees and charges. At the same time, MIAA exercises "all the powers of a corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this Executive Order."3 Unfortunately, this cited statutory definition of an "instrumentality" is incomplete. Worse, the omitted portion from Section 2(10) completely contradicts the premise of the ponente that an instrumentality is mutually exclusive from a GOCC. For the provision reads in full, with the omitted portion highlighted, thus: (10)Instrumentality refers to any agency of the National Government not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational

autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned or controlled corporations. This previous omission had not escaped the attention of the outside world. For example, lawyer Gregorio Batiller, Jr., has written a paper on the Paraaque case entitled "A Tale of Two Airports," which is published on the Internet.4 He notes therein: Also of interest was the dissenting opinion of Justice Dante Tinga to the effect that the majority opinion failed to quote in full the definition of "government instrumentality:" The Majority gives the impression that a government instrumentality is a distinct concept from a government corporation. Most tellingly, the majority selectively cites a portion of Section 2(10) of the Administrative Code of 1987, as follows: Instrumentality refers to any agency of the National Government not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. xxx (emphasis omitted)" However, Section 2(10) of the Administrative Code, when read in full, makes an important clarification which the majority does not show. The portions omitted by the majority are highlighted below: xxx "(10)Instrumentality refers to any agency of the National Government not integrated within the department framework, vested with special functions or jurisdiction by, law endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government - owned or controlled corporations.

So the majority opinion effectively begged the question in finding that the MIAA was not a GOCC but a mere government instrumentality, which is other than a GOCC.5 The Office of the President itself was alarmed by the redefinition made by the MIAA case of instrumentalities, causing it on 29 December 2006 to issue Executive Order No. 596 creating the unwieldy category of "Government Instrumentality Vested with Corporate Powers or Government Corporate Entities" just so that it was clear that these newly defined "instrumentalities" or "government corporate entities" still fell within the jurisdiction of the Office of the Government Corporate Counsel. The E.O. reads in part: EXECUTIVE ORDER NO. 596 DEFINING AND INCLUDING "GOVERNMENT INSTRUMENTRALITY VESTED WITH CORPORATE POWERS" OR "GOVERNMENT CORPORATE ENTITIES" UNDER THE JURISDICTION OF THE OFFICE OF THE GOVERNMENT CORPORATE COUNSEL (OGCC) AS PRINCIPAL LAW OFFICE OF GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCs) AND FOR OTHER PURPOSES. WHEREAS, the Office of the Government Corporate Counsel (OGCC), as the principal law office of all Government-Owned or Controlled Corporations (GOCCs), including their subsidiaries, other corporate offsprings and government acquired assets corporations, plays a very significant role in safeguarding the legal interests and providing the legal requirements of all GOCCs; WHEREAS, there is an imperative need to integrate, strengthen and rationalize the powers and jurisdiction of the OGCC in the light of the Decision of the Supreme Court dated July 20, 2006, in the case of "Manila International Airport Authority vs. Court of Appeals, City of Paraaque, et al" (G.R. No. 155650), where the High Court differentiated "government corporate entities" and government

instrumentalities with corporate powers" from GOCCs for purposes of the provisions of the Local Government Code on real estate taxes, and other fees and charges imposed by local government units; WHEREAS, in the interest of an effective administration of justice, the application and definition of the term "GOCCs" need to be further clarified and rationalized to have consistency in referring to the term and to avoid unintended conflicts and/or confusion' NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in my by law, do hereby order: SECTION 1. The Office of the Government Corporate Counsel (OGCC) shall be the principal law office of all GOCCs, except as may otherwise be provided by their respective charter or authorized by the President, their subsidiaries, corporate offsprings, and government acquired asset corporations. The OGCC shall likewise be the principal law of the "government instrumentality vested with corporate powers" or "government corporate entity," as defined by the Supreme Court in the case of "MIAA v. Court of Appeals, City of Paraaque, et al.," supra, notable examples of which are: Manila International Airport Authority (MIAA), Mactan International Airport Authority, the Philippine Ports Authority (PPA), Philippine Deposit Insurance Corporation (PDIC), Metropolitan Water and Sewerage Services (MWSS), Philippine Rice Research Institute (PRRI), Laguna Lake Development Authority (LLDA), Fisheries Development Authority (FDA), Bases Conversion Development Authority (BCDA), Cebu Port Authority (CPA), Cagayan de Oro Port Authority, and San Fernando Port Authority. SECTION 2. As provided under PD 2029, series of 1986, the term GOCCs is defined as a stock or non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law, is owned or controlled by the government directly, or indirectly, through a parent corporation or subsidiary corporation, to the extent of at

least majority of its outstanding capital stock or of its outstanding voting capital stock. Under Section 2(10) of the Introductory Provisions of the Administrative Code of 1987, a government "instrumentality" refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some, if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. SECTION 3. The following corporations are considered GOCCs under the conditions and/or circumstances indicated: a) A corporation organized under the general corporation law under private ownership at least a majority of the shares of stock of which were conveyed to a government financial institution, whether by foreclosure or otherwise, or a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease, or operate specific assets acquired by a government financial institution in satisfaction of debts incurred therewith and which in any case by enunciated policy of the government is required to be disposed of to private ownership within a specified period of time, shall not be considered a GOCC before such disposition and even if the ownership or control thereof is subsequently transferred to another GOCC; b) A corporation created by special law which is explicitly intended under that law for ultimate transfer to private ownership under certain specified conditions shall be considered a GOCC, until it is transferred to private ownership; c) A corporation that is authorized to be established by special law, but which is still required under that law to register with the Securities and Exchange Commission in order to acquire a juridical personality, shall not, on the basis of the special law alone, be considered a GOCC.

xxx Reading this Executive Order, one cannot help but get the impression that the Republic of the Philippines, ostensibly the victorious party in the Paraaque case, felt that the 2006 ponencia redefining "instrumentalities" was wrong. Ostensibly, the Office of the Government Corporate Counsel, the winning counsel in the MIAA case, cooperated in the drafting of this E.O. and probably also felt that the redefinition of "instrumentalities" was wrong. I had pointed out in my Dissent to the MIAA case that under the framework propounded in that case, GOCCs such as the Philippine Ports Authority, the Bases Conversion Development Authority, the Philippine Economic Zone Authority, the Light Rail Transit Authority, the Bangko Sentral ng Pilipinas, the National Power Corporation, the Lung Center of the Philippines, and even the Philippine Institute of Traditional and Alternative Health Care have been reclassified as instrumentalities instead of GOCCs. Notably, GOCCs are mandated by Republic Act No. 7656 to remit 50% of their annual net earnings as cash, stock or property dividends to the National Government. By denying categorization of those abovementioned corporations as GOCCs, the Court in MIAA effectively gave its imprimatur to those entities to withhold remitting 50% of their annual net earnings to the National Government. Hence, the necessity of E.O. No. 596 to undo the destructive effects of the Paraaque case on the national coffers. In a welcome development, the majority now acknowledges the existence of that second clause in Section 2(10) of the Introductory Provisions of the Administrative Code, the clause which made explicit that government instrumentalities include GOCCs. In truth, I had never quite understood this hesitation in plainly saying that GOCCs are instrumentalities. That fact is really of little consequence in determining whether or not the MIAA or other government instrumentalities or GOCCs are exempt from real property taxes.

As I had consistently explained, the liability of such entities is mandated by Section 232, in relation with Section 234 of the Local Government Code. Section 232 lays down the general rule that provinces, cities or municipalities within Metro Manila may levy an ad valorem tax on real property "not hereinafter specifically exempted." Such specific exemptions are enumerated in Section 234, and the only exemption tied to government properties extends to "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted.to a taxable person."6 Moreover, the final paragraph of Section 234 explains that "[e]xcept as provided herein [in Section 234], any exemption from payment of real property tax previously granted to, or presently enjoyed by all persons, whether natural or juridical, including all government-owned or controlled corporations are hereby withdrawn upon the effectivity of this Code." What are the implications of Section 232 in relation to Section 234 as to the liability for real property taxes of government instrumentalities such as MIAA? 1) All persons, whether natural or juridical, including GOCCs are liable for real property taxes. 2) The only exempt properties are those owned by the Republic or any of its political subdivisions. 3) So-called "government corporate entities," so long as they have juridical personality distinct from the Republic of the Philippines or any of its political subdivisions, are liable for real property taxes. 4) After the enactment of the Local Government Code in 1991, Congress remained free to reenact tax exemptions from real property taxes to government instrumentalities, as it did with the Government Service Insurance System in 1997.

It is that simple. The most honest intellectual argument favoring the exemption of the MIAA from real property taxes corresponds with the issue of whether its properties may be deemed as "owned by the Republic or any of its political subdivisions". The matter of whether MIAA is a GOCC or an instrumentality or a "government corporate entity" should in fact be irrelevant. However, the framework established by the ponente beginning with the Paraaque case has inexplicably and unnecessarily included the question of what is a GOCC? That issue, utterly irrelevant to settling the question of MIAA's tax liability, has caused nothing but distraction and confusion. It should be remembered that prior to the Paraaque case, the prevailing rule on taxation of GOCCs was as enunciated in Mactan Cebu International Airport v. Hon. Marcos.7 That rule was a highly sensible rule that gave due respect to national government prerogatives and the devolution of taxing powers to local governments. Neither did Mactan Cebu prevent Congress from enacting legislation exempting selected GOCCs to be exempt from real property taxes. A significant portion of my Dissenting Opinion in the Paraaque case was devoted to explaining Mactan Cebu, and criticizing the ponencia for implicitly rejecting that doctrine without categorically saying so. In the years since, significant confusion has arisen on whether Mactan Cebu and the framework it established in real property taxation of GOCCs and instrumentalities, remains extant. Batiller makes the same point in his paper, expressly asking why "the Supreme Court did not explicitly declare that the Mactan Cebu International Airport case was deemed repealed." He added: Inevitably, the refusal of the Supreme Court to clarify whether its Decision in the Mactan Cebu International Airport case is deemed repealed would leave us with an ambiguous situation where two (2) of our major international airports are treated differently tax wise: one in Cebu which is deemed to be a GOCC subject to real estate taxes and the other in Manila which is not a GOCC and exempt from real estate taxes.

Where lies the substantial difference between the two (2) airports? Your guess is as good as mine.8 There are no good reasons why the Court should not reassert the Mactan Cebu doctrine. Under that ruling, real properties owned by the Republic of the Philippines or any of its political subdivisions are exempted from the payment of real property taxes, while instrumentalities or GOCCs are generally exempted from local government taxes, save for real property taxes. At the same time, Congress is free should it so desire to exempt particular GOCCs or instrumentalities from real property taxes by enacting legislation for that purpose. This paradigm is eminently more sober than that created by the Paraaque case, which attempted to amend the Constitution by elevating as a constitutional principle, the real property tax exemption of all government instrumentalities, most of which also happen to be GOCCs. Considering that the Constitution itself is supremely deferential to the notion of local government rule and the power of local governments to generate revenue through local taxes, the idea that not even the local government code could subject such "instrumentalities" to local taxes is plainly absurd. II. I do recognize that the present majority opinion has chosen to lay equal, if not greater emphasis on the premise that the MIAA properties are supposedly of public dominion, and as such are exempt from realty taxes under Section 234(a) of the Local Government Code. Again, I respectfully disagree. It is Article 420 of the Civil Code which defines what are properties of public dominion. I do not doubt that Article 420 can be interpreted in such a way that airport properties, such as its runways, hangars and the like, can be considered akin to ports or roads, both of which are among those properties considered as part of the public dominion under Article 420(1). It may likewise be possible that those properties considered as "property of public dominion" under Article 420 of the Civil Code are

also "property owned by the Republic," which under Section 234 of the Local Government Code, are exempt from real property taxes. The necessary question to ask is whether properties which are similar in character to those enumerated under Article 420(1) may be considered still part of the public dominion if, by virtue of statute, ownership thereof is vested in a GOCC which has independent juridical personality from the Republic of the Philippines. The question becomes even more complex if, as in the case of MIAA, the law itself authorizes such GOCC to sell the properties in question. One of the most recognizable characteristics of public dominion properties is that they are placed outside the commerce of man and cannot be alienated or leased or otherwise be the subject matter of contracts.9 The fact is that the MIAA may, by law, alienate, lease or place the airport properties as the subject matter of contracts. The following provisions of the MIAA charter make that clear: SECTION 5. Functions, Powers, and Duties. - The Authority shall have the following functions, powers and duties: xxx (i) To acquire, purchase, own, administer, lease, mortgage, sell or otherwise dispose of any land, building, airport facility, or property of whatever kind and nature, whether movable or immovable, or any interest therein; xxx SECTION 16. Borrowing Power. - The Authority may, after consultation with the Minister of Finance and with the approval of the President of the Philippines, as recommended by the Minister of Transportation and Communications, raise funds, either from local or international sources, by way of loans, credits or securities, and other

borrowing instruments, with the power to create pledges, mortgages and other voluntary liens or encumbrances on any of its assets or properties. There is thus that contradiction where property which ostensibly is classified as part of the public dominion under Article 420 of the Civil Code is nonetheless classified to lie within the commerce of man by virtue of a subsequent law such as the MIAA charter. In order for the Court to classify the MIAA properties as part of public dominion, it will be necessary to invalidate the provisions of the MIAA charter allowing the Authority to lease, sell, create pledges, mortgages and other voluntary liens or encumbrances on any of the airport properties. The provisions of the MIAA charter could not very well be invalidated with the Civil Code as basis, since the MIAA charter and the Civil Code are both statutes, and thus of equal rank in the hierarchy of laws, and more significantly the Civil Code was enacted earlier and therefore could not be the repealing law. If there is a provision in the Constitution that adopted the definition of and limitations on public dominion properties as found in the Civil Code, then the aforequoted provisions from the MIAA charter allowing the Authority to place its properties within the commerce of man may be invalidated. The Constitution however does not do so, confining itself instead to a general statement that "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." Note though that under Article 420, public dominion properties are not necessarily owned by the State, the two subsections thereto referring to (a) properties intended for public use; and (b) those which belong to the State and are intended for some public service or for the development of the national wealth.10 In Laurel v. Garcia,11 the Court notably acknowledged that "property of public dominion is not owned by the State but pertains to the State." Thus,

there is no equivalence between the concept of public dominion under the Civil Code, and of public domain under the Constitution. Accordingly, the framework of public dominion properties is one that is statutory, rather than constitutional in design. That being the case, Congress is able by law to segregate properties which ostensibly are, by their nature, part of the public dominion under Article 420(1) of the Civil Code, and place them within the commerce of man by vesting title thereto in an independent juridical personality such as the MIAA, and authorizing their sale, lease, mortgage and other similar encumbrances. When Congress accomplishes that by law, the properties could no longer be considered as part of the public dominion. This point has been recognized by previous jurisprudence which I had cited in my dissent in the Paraaque case. For example, in Philippine Ports Authority v. City of Iloilo, the Court stated that "properties of public dominion are owned by the general public and cannot be declared to be owned by a public corporation, such as [the Philippine Ports Authority]."12 I had likewise previously explained: The second Public Ports Authority case, penned by Justice Callejo, likewise lays down useful doctrines in this regard. The Court refuted the claim that the properties of the PPA were owned by the Republic of the Philippines, noting that PPA's charter expressly transferred ownership over these properties to the PPA, a situation which similarly obtains with MIAA. The Court even went as far as saying that the fact that the PPA "had not been issued any torrens title over the port and port facilities and appurtenances is of no legal consequence. A torrens title does not, by itself, vest ownership; it is merely an evidence of title over properties.... It has never been recognized as a mode of acquiring ownership over real properties." The Court further added: . . . The bare fact that the port and its facilities and appurtenances are accessible to the general public does not exempt it from the payment of

real property taxes. It must be stressed that the said port facilities and appurtenances are the petitioner's corporate patrimonial properties, not for public use, and that the operation of the port and its facilities and the administration of its buildings are in the nature of ordinary business. The petitioner is clothed, under P.D. No. 857, with corporate status and corporate powers in the furtherance of its proprietary interests . . . The petitioner is even empowered to invest its funds in such government securities approved by the Board of Directors, and derives its income from rates, charges or fees for the use by vessels of the port premises, appliances or equipment.... Clearly then, the petitioner is a profit-earning corporation; hence, its patrimonial properties are subject to tax. There is no doubt that the properties of the MIAA, as with the PPA, are in a sense, for public use. A similar argument was propounded by the Light Rail Transit Authority in Light Rail Transit Authority v. Central Board of Assessment, 118 which was cited in Philippine Ports Authority and deserves renewed emphasis. The Light Rail Transit Authority (LRTA), a body corporate, "provides valuable transportation facilities to the paying public." 119 It claimed that its carriage-ways and terminal stations are immovably attached to government-owned national roads, and to impose real property taxes thereupon would be to impose taxes on public roads. This view did not persuade the Court, whose decision was penned by Justice (now Chief Justice) Panganiban. It was noted: Though the creation of the LRTA was impelled by public service - to provide mass transportation to alleviate the traffic and transportation situation in Metro Manila - its operation undeniably partakes of ordinary business. Petitioner is clothed with corporate status and corporate powers in the furtherance of its proprietary objectives. Indeed, it operates much like any private corporation engaged in the mass transport industry. Given that it is engaged in a service-oriented commercial endeavor, its carriageways and terminal stations are

patrimonial property subject to tax, notwithstanding its claim of being a government-owned or controlled corporation. xxx Petitioner argues that it merely operates and maintains the LRT system, and that the actual users of the carriageways and terminal stations are the commuting public. It adds that the public use character of the LRT is not negated by the fact that revenue is obtained from the latter's operations. We do not agree. Unlike public roads which are open for use by everyone, the LRT is accessible only to those who pay the required fare. It is thus apparent that petitioner does not exist solely for public service, and that the LRT carriageways and terminal stations are not exclusively for public use. Although petitioner is a public utility, it is nonetheless profit-earning. It actually uses those carriageways and terminal stations in its public utility business and earns money therefrom. xxx Even granting that the national government indeed owns the carriageways and terminal stations, the exemption would not apply because their beneficial use has been granted to petitioner, a taxable entity. There is no substantial distinction between the properties held by the PPA, the LRTA, and the MIAA. These three entities are in the business of operating facilities that promote public transportation. The majority further asserts that MIAA's properties, being part of the public dominion, are outside the commerce of man. But if this is so, then why does Section 3 of MIAA's charter authorize the President of the Philippines to approve the sale of any of these properties? In fact, why does MIAA's charter in the first place authorize the transfer of these airport properties, assuming that indeed these are beyond the commerce of man?13

III. In the present case, the City of Pasay had issued notices of levy and warrants of levy for the NAIA Pasay properties, leading MIAA to file with the Court of Appeals a petition for prohibition and injunction, seeking to enjoin the City of Pasay from imposing real property taxes, levying against and auctioning for public sale the NAIA Pasay properties. In the Paraaque case, I had expressed that while MIAA was liable for the realty taxes, its properties could not be foreclosed upon by the local government unit seeking the taxes. I explained then: Despite the fact that the City of Paraaque ineluctably has the power to impose real property taxes over the MIAA, there is an equally relevant statutory limitation on this power that must be fully upheld. Section 3 of the MIAA charter states that "[a]ny portion [of the [lands transferred, conveyed and assigned to the ownership and administration of the MIAA] shall not be disposed through sale or through any other mode unless specifically approved by the President of the Philippines." Nothing in the Local Government Code, even with its wide grant of powers to LGUs, can be deemed as repealing this prohibition under Section 3, even if it effectively forecloses one possible remedy of the LGU in the collection of delinquent real property taxes. While the Local Government Code withdrew all previous local tax exemptions of the MIAA and other natural and juridical persons, it did not similarly withdraw any previously enacted prohibitions on properties owned by GOCCs, agencies or instrumentalities. Moreover, the resulting legal effect, subjecting on one hand the MIAA to local taxes but on the other hand shielding its properties from any form of sale or disposition, is not contradictory or paradoxical, onerous as its effect may be on the LGU. It simply means that the LGU has to find another way to collect the taxes due from MIAA, thus paving the way for a mutually acceptable negotiated solution.

Accordingly, I believe that MIAA is entitled to a writ of prohibition and injunctive relief enjoining the City of Pasay from auctioning for public sale the NAIA Pasay properties. Thus, the Court of Appeals erred when it denied those reliefs to the MIAA. I VOTE to PARTIALLY GRANT the petition and to issue the Writ of Prohibition insofar as it would enjoin the City of Pasay from auctioning for public sale the NAIA Pasay properties. In all other respects, I respectfully dissent. DANTE O. TINGA Associate Justice MIAA v. Court of Appeals G.R. No. 155650, July 20, 2006 Facts: The Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903 (MIAA Charter), as amended. As such operator, it administers the land, improvements and equipment within the NAIA Complex. In March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061 to the effect that the Local Government Code of 1991 (LGC) withdrew the exemption from real estate tax granted to MIAA under Section 21 of its Charter. Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final Notices of Real Estate Tax Delinquency from the City of Paraaque for the taxable years 1992 to 2001. The City Treasurer subsequently issued notices of levy and warrants of levy on the airport lands and buildings. At the instance of MIAA, the OGCC issued Opinion No. 147 clarifying Opinion No. 061, pointing out that Sec. 206 of the LGC requires persons

exempt from real estate tax to show proof of exemption. According to the OGCC, Sec. 21 of the MIAA Charter is the proof that MIAA is exempt from real estate tax. MIAA, thus, filed a petition with the Court of Appeals seeking to restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the airport lands and buildings, but this was dismissed for having been filed out of time. Hence, MIAA filed this petition for review, pointing out that it is exempt from real estate tax under Sec. 21 of its charter and Sec. 234 of the LGC. It invokes the principle that the government cannot tax itself as a justification for exemption, since the airport lands and buildings, being devoted to public use and public service, are owned by the Republic of the Philippines. On the other hand, the City of Paraaque invokes Sec. 193 of the LGC, which expressly withdrew the tax exemption privileges of government-owned and controlled corporations (GOCC) upon the effectivity of the LGC. It asserts that an international airport is not among the exceptions mentioned in the said law. Meanwhile, the City of Paraaque posted and published notices announcing the public auction sale of the airport lands and buildings. In the afternoon before the scheduled public auction, MIAA applied with the Court for the issuance of a TRO to restrain the auction sale. The Court issued a TRO on the day of the auction sale, however, the same was received only by the City of Paraaque three hours after the sale. Issue: Whether or not the airport lands and buildings of MIAA are exempt from real estate tax? Held: The Petition is GRANTED.

The airport lands and buildings of MIAA are exempt from real estate tax imposed by local governments. Sec. 243(a) of the LGC exempts from real estate tax any real property owned by the Republic of the Philippines. This exemption should be read in relation with Sec. 133(o) of the LGC, which provides that the exercise of the taxing powers of local governments shall not extend to the levy of taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities. These provisions recognize the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. This rule applies with greater force when local governments seek to tax national government instrumentalities. Moreover, a tax exemption is construed liberally in favor of national government instrumentalities. MIAA is not a GOCC, but an instrumentality of the government. The Republic remains the beneficial owner of the properties. MIAA itself is owned solely by the Republic. At any time, the President can transfer back to the Republic title to the airport lands and buildings without the Republic paying MIAA any consideration. As long as the airport lands and buildings are reserved for public use, their ownership remains with the State. Unless the President issues a proclamation withdrawing these properties from public use, they remain properties of public dominion. As such, they are inalienable, hence, they are not subject to levy on execution or foreclosure sale, and they are exempt from real estate tax. However, portions of the airport lands and buildings that MIAA leases

to private entities are not exempt from real estate tax. In such a case, MIAA has granted the beneficial use of such portions for a consideration to a taxable person. G.R. No. 150301 October 2, 2007

PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY, petitioner, vs. THE HONORABLE COURT OF APPEALS, THE HONORABLE REGIONAL TRIAL COURT, BRANCH 169, MALABON, METRO MANILA, THE MUNICIPALITY OF NAVOTAS, METRO MANILA, HON. FLORANTE M. BARREDO, in his official capacity as Municipal Treasurer of Navotas, Metro Manila, and HON. NORBERTO E. AZARCON, in his capacity as Chairman of the Public Auction Sale Committee of Navotas, Metro Manila, respondent. DECISION AZCUNA, J.: This is a petition for review1 of the decision and resolution of the Court of Appeals (CA), dated July 19, 2001 and September 19, 2001, respectively, in CA-G.R. CV No. 42472, entitled "Philippine Fisheries Development Authority v. The Municipality of Navotas, Metro Manila, et al." The facts appear as follows: The controversy arose when respondent Municipality of Navotas assessed the real estate taxes allegedly due from petitioner Philippine Fisheries Development Authority (PFDA) for the period 1981-1990 on properties under its jurisdiction, management and operation located inside the Navotas Fishing Port Complex (NFPC).

The assessed taxes had remained unpaid despite the demands made by the municipality which prompted it, through Municipal Treasurer Florante M. Barredo, to give notice to petitioner on October 29, 1990 that the NFPC will be sold at public auction on November 30, 1990 in order that the municipality will be able to collect on petitioners delinquent realty taxes which, as of June 30, 1990, amounted to P23,128,304.51, inclusive of penalties. Petitioner sought the deferment of the auction sale claiming that the NFPC is owned by the Republic of the Philippines, and pursuant to Presidential Decree (P.D.) No. 977, it (PFDA) is not a taxable entity. In view of the refusal of PFDA to pay the assessed realty taxes, the matter was referred to the Department of Finance (DOF). On July 14, 1990 the DOF stated that: This Department takes cognizance of the allegations of [the Office of the Mayor of Navotas] that PFDA has leased its properties to beneficial users, such as "businessmen, private persons and entities who are taxable persons." For this reason, it is imperative that the Municipality should conduct an ocular inspection on the real properties (land and building owned by PFDA) in order to identify the properties actually leased and the taxable persons enjoying the beneficial use thereof. The ocular inspection is necessary for reason that the real properties, the use of which has been granted to taxable persons, for consideration or otherwise, are subject to the payment of real property taxes which must be paid by the grantees pursuant to the provisions of the Real Property Tax Code, as amended. ... Therefore, it is imperative to determine who the actual users of the properties concerned [are]. If used by a non-taxable person other than PFDA itself, it remains to be non-taxable. Otherwise, if said properties are being used by taxable persons, same becomes taxable properties. For this purpose, it is also incumbent upon PFDA to furnish the Municipality copies of the deed of lease or

other relevant documents showing the leased properties and their beneficial users for proper assessment.2 Notwithstanding the DOFs instruction, respondent Municipality proceeded to publish the notice of sale of NFPC in the November 2, 1990 issue of Balita, a local newspaper. On November 19, 1990, petitioner instituted Civil Case No. 1524 in the Regional Trial Court (RTC) of Malabon, Metro Manila against respondent Municipality, its Municipal Treasurer and the Chairman of the Public Auction Sale Committee. Petitioner asked the RTC to enjoin the auction of the NFPC on the ground that the properties comprising the NFPC are owned by the Republic of the Philippines and are, thus, exempt from taxation. According to petitioner, only a small portion of NFPC which had been leased to private parties may be subjected to real property tax which should be paid by the latter. Respondent Municipality, on the other hand, insisted that: 1) the real properties within NFPC are owned entirely by petitioner which, despite the opportunity given, had failed to submit proof to the Municipal Assessor that the properties are indeed owned by the Republic of the Philippines; 2) if the properties in question really belong to the government, then the complaint should have been instituted in the name of the Republic of the Philippines, represented by the Office of the Solicitor General; and 3) the complaint is fatally defective because of non-compliance with a condition precedent, which is, payment of the disputed tax assessment under protest. On December 8, 1990, the RTC issued a writ of preliminary injunction enjoining respondent Municipality from proceeding with the public auction. On February 19, 1993, however, the RTC dismissed the case and dissolved the writ of preliminary injunction, thus:

[T]he plaintiff [petitioner] failed to present convincing evidence to support its claim of realty tax exemption and ownership of the property by the Republic of the Philippines as mandated by Sec. 9 of P.D. 464. Notwithstanding receipt of the notices of tax assessments from the defendants [public respondent], the plaintiff did not avail of the remedies under the law by raising on appeal the said tax assessments to the Local Board of Assessment Appeals, then to the Central Board of Assessment Appeals and ultimately, to the Court of Tax Appeals. Instead, the plaintiff continuously ignored the notices of tax assessments on the pretext that the properties inside the NFPC are exempt from payment of real estate taxes as they are owned by the Republic of the Philippines. Assailing the validity of the tax assessments of the NFPC properties is not the proper recourse for the plaintiff but to pay first the tax assessments under protest and then raise the same on appeal to the Local Board of Assessment Appeals, then to the Central Board of Assessment Appeals, then ultimately, to the Court of Tax Appeals pursuant to the Real Property Tax Code. The plaintiff failed in this regard, hence the Municipality, exercising its power to assess and collect taxes on real properties within its jurisdiction, did the right thing, that is, to schedule the NFPC properties for public auction. Furthermore, while the plaintiff is insisting that the NFPC properties are owned by the Republic of the Philippines, and is therefore exempt from payment of real estate taxes, yet it admitted that there are those lessees who leased portion[s] of the complex, and [it was] even willing to submit [a] list of these lessees for proper tax assessments. ... WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant [public respondent Municipality of Navotas] and against the plaintiff, ordering: 1. The DISMISSAL of this case;

2. The preliminary injunction previously issued in this case DISSOLVED; and 3. The plaintiff to pay the defendant [public respondent] Municipality the sum of P13,767.00 as actual damages. SO ORDERED.3 The CA affirmed the ruling of the RTC in a Decision dated July 19, 2001, the pertinent portions of which read: The thrust of appellant PFDAs arguments has shoved to the fore the fact that the 67-hectare land on which the NFPC Navotas Fishing Port Complex stands was reclaimed from the sea which explains why it was bounded on the North by the Manila Bay, on the East by Roxas Boulevard, on the South by the Manila Bay and on the West, by the breakwater. Even the Municipalitys counsel, Atty. Victorino Landas; Assessor, Arturo Coronel; and Treasurer, Florante Barredo have admitted that much, as pointed out by PFDA.4 Such being the origin of the land, its ownership by the State as property of public dominion5 can hardly be disputed. The "reclaimed land; breakwaters; piers; wharves and quaywalls; and, fish market building forming part of the Navotas Fish Port" were furthermore certified by the Undersecretary of Public Works and Highways6 as belonging to the national government since they were built using the proceeds of the loan agreement entered into by and between the Republic of the Philippines and the Asian Development Bank on December 12, 1971.7 On August 11, 1976, the Philippine Fish Marketing Authority (PFMA) was created as a body corporate by P.D. No. 977 to carry out ... the policy of the Government to promote the development of the fishing industry and improve efficiency in the handling,

preserving, marketing and distribution of fish and fishery/aquatic products through the establishment and operation of fish markets and the efficient operation of fishing ports harbors and other marketing facilities.8 ... The PFMA was furthermore extended exemption from the payment of income tax in this tenor: The authority shall be exempted from the payment of income tax. The foregoing exemption may, however, be entirely or partly lifted by the President of the Philippines, upon recommendation of the Secretary of Finance, not earlier than five years from the approval of this Decree, if the President shall find the authority to be selfsustaining and financially capable to pay such tax after providing for debt service requirements of the authority and its projected capital and operating expenditures.9 Meanwhile, harbor operations at the Navotas Fishing Port Complex (NFPC) commenced on January 15, 1997 while the market operation started on April 3, 1977. On February 8, 1982, P.D. No. 977 was amended by Executive Order No. 772. Insofar as material to the case at bar, the salient features of the amendments introduced by the E.O. are: (a) The creation of the Philippine Fisheries Development Authority (PFDA) to replace the Philippine Fish Marketing Authority (PFMA). ... (b) The capitalization of the PFDA has included the Navotas Fishing Port Complex (NFPC).

... (c) The NFPC has been transferred to the exclusive jurisdiction, control, administration, and supervision of the PFDA. ... There can, therefore, [be] no escaping the conclusion that the appellant PFDA became the owner of the Navotas Fishing Port Complex as of February 8, 1982. It cannot be any sooner because under P.D. No. 977, the NFPC was not made part of the capital of the Philippine Fish Marketing Authority (PFMA), PFDAs predecessor, as only the Navotas Fish Landing was made part of such capital while the Navotas Fishing Port and Fish Market were transferred merely to the "exclusive jurisdiction, control, administration, and supervision" of the PFMA. It was not then altogether clear if the Navotas Fishing Port Complex (NFPC) was conveyed to the PFMA. ... Indeed, it is quite true that a property continues to be part of the public domain, and not available for alienation, private appropriation or ownership, until it is withdrawn from being such by the Government through the Executive Department or the Legislative,10 and that it is not for the President to convey valuable real property of the Government on his own sole will as any such conveyance requires executive and legislative concurrence.11 But the stark reality is that at the time E.O. No, 772 was issued on February 8, 1982, President Marcos was exercising both executive and legislative powers.12 Hence, his conveyance of the NFPC to form part of the capital of PFDA cannot but be valid. The fact that the PFDA has up to now no certificate of title to the NFPC nor has the PFDA declared it for tax purposes is of no

consequence. Such a certificate is merely an evidence of ownership and not the title itself,13 while a tax declaration does not prove nor disprove ownership. What is significant is that the PFDA has openly declared and represented that it "owns, maintains and operates" the NFPC when it leased a portion thereof to the Frabelle Fishing Corporation on March 13, 1989. All told, the PFDA being the owner of the NFPC beginning February 8, 1982 is liable for the realty taxes due thereon, its tax exemption being only from the payment of income tax.14 WHEREFORE, the appealed decision is AFFIRMED, without pronouncement as to costs. SO ORDERED.15 Petitioner filed a motion for reconsideration but the same was denied by the CA. Petitioner now raises the following arguments: One, the CA acknowledged that the property in question is a reclaimed land. As such, it is a property of public dominion (Art. 420, Civil Code) and is owned by the State. Notwithstanding this, the CA erroneously ruled that the government had validly transferred ownership of the land to PFDA in 1982 when P.D. No. 977 was amended by E.O. No. 772 by virtue of which the property became part of the assets of PFDA (Sec. 5 of E.O. No. 772); Two, as a reclaimed land, the port complex should be considered a reserved land. In NDC v. Cebu City,16 the Supreme Court held that a reserved land is a public land that has been withheld or kept back from sale or disposition. The land remains an absolute property of the government. As its title remains with the State, the reserved land is tax exempt;

Three, in Government v. Cabangis17 and Lampria v. Director of Lands,18 this Court declared that the land reclaimed from the sea, as a result of the construction by the government of a breakwater fronting the place where it is situated, belongs to the State in accordance with Article 5 of the Law of Waters of 1866; Four, petitioner merely operates the area or the NFPC complex in favor of the Republic of the Philippines. Section 4.A of P.D. No. 977, as amended by E.O. No. 772, provides that PFDA shall: [M]anage, administer, operate, improve and modernize, coordinate and otherwise govern the activities, operation and facilities in the fishing ports, markets and landings that may hereinafter be placed under, or transferred to the Authority, and such other fish markets, fishing ports/harbors and infrastructure facilities as may be established under this Decree; to investigate, prepare, adopt, implement and execute a comprehensive plan for the overall development of fishing port and market complexes and update such plan as may be necessary from time to time; to construct or authorize the construction in the land area under its jurisdiction, of infrastructure facilities, factory buildings, warehouses, cold storage and ice plants, and other structures related to the fishing industry or necessary and useful in the conduct of its business or in the attainment of the purpose and objectives of this Decree; to acquire, hold and dispose real and personal property in the exercise of its functions and powers. Lastly, the NFPC property is intended for public use and public service. As such, it is owned by the State, hence, exempt from real property tax. The issue is whether petitioner is liable to pay real property tax. Local government units, pursuant to the fiscal autonomy granted by the provisions of Republic Act No. 7160 or the 1991 Local Government Code, can impose realty taxes on juridical persons19 subject to the limitations enumerated in Section 133 of the Code:

SEC. 133. Common Limitations on the Taxing Power of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: ... (o) taxes, fees, charges of any kind on the national government, its agencies and instrumentalities, and local government units. Nonetheless, the above exemption does not apply when the beneficial use of the government property has been granted to a taxable person. Section 234 (a) of the Code states that real property owned by the Republic of the Philippines or any of its political subdivisions is exempted from payment of the real property tax "except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person." Thus, as a rule, petitioner PFDA, being an instrumentality20 of the national government, is exempt from real property tax but the exemption does not extend to the portions of the NFPC that were leased to taxable or private persons and entities for their beneficial use. This is in consonance with the ruling in Philippine Fisheries Development Authority v. Court of Appeals21 where this Court held that: On the basis of the parameters set in the MIAA [Manila International Airport Authority v. Court of Appeals]22 case, the Authority should be classified as an instrumentality of the national government. As such, it is generally exempt from payment of real property tax, except those portions which have been leased to private entities. In the MIAA case, petitioner Philippine Fisheries Development Authority was cited as among the instrumentalities of the national government 23

Indeed, the Authority is not a GOCC24 but an instrumentality of the government. The Authority has a capital stock but it is not divided into shares of stocks.25 Also, it has no stockholders or voting shares. Hence, it is not a stock corporation. Neither it is a nonstock corporation because it has no members. ... The real property tax assessments issued by the City of Iloilo should be upheld only with respect to the portions leased to private persons. In case the Authority fails to pay the real property taxes due thereon, said portions cannot be sold at public auction to satisfy the tax delinquency. ... The port built by the State in the Iloilo fishing complex is a property of public dominion and cannot therefore be sold at public auction. Article 420 of the Civil Code provides: ARTICLE 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 national wealth. The Iloilo [F]ishing [P]ort [Complex/IFPC] which was constructed by the State for public use and/or public service falls within the term "port" in the aforecited provision. Being a property of public dominion the same cannot be subject to execution or foreclosure sale.26 Whether there are improvements in the fishing port complex that should not be construed to be embraced within the

term port involves evidentiary matters that cannot be addressed in the present case. As for now, considering that the Authority is a national government instrumentality, any doubt on whether the entire IFPC may be levied upon to satisfy the tax delinquency should be resolved against the City of Iloilo. Similarly, for the same reason, the NFPC cannot be sold at public auction in satisfaction of the tax delinquency assessments made by the Municipality of Navotas on the entire complex. Additionally, the land on which the NFPC property sits is a reclaimed land, which belongs to the State. In Chavez v. Public Estates Authority,27 the Court declared that reclaimed lands are lands of the public domain and cannot, without Congressional fiat, be subject of a sale, public or private. 28 In light of the above, petitioner is only liable to pay the amount of P62,841,947.79 representing the total taxes due as of December 31, 2001 from PFDA-owned properties that were leased, as shown in the Summary of Realty Taxes Due Properties Owned and/or Managed by PFDA as per Realty Tax Order of Payment dated September 16, 2002.29 WHEREFORE, the petition is GRANTED. The Decision and Resolution of the Court of Appeals, dated July 19, 2001 and September 19, 2001, respectively, in CA-G.R. CV No. 42472 are SET ASIDE. The Realty Tax Order of Payment issued by respondent Municipality of Navotas on September 16, 2002 is declared VOID EXCEPT as to the amount of P62,841,947.79 representing the total taxes due as of December 31, 2001 on the properties leased by petitioner to private parties. Respondent Municipality of Navotas is DIRECTED to refrain from levying on the Navotas Fishing Port Complex (NFPC) to satisfy the payment of the real property tax delinquency. No costs. SO ORDERED.

Puno, C.J., Chairperson, Sandoval-Gutierrez, Corona, Garcia, JJ., concur.

Macasiano v. Diokno [G.R. No. 97764. August 10, 1992.] En Banc, Medialdea (J): 12 concur Facts: On 13 June 1990, the Municipality of Paranaque passed Ordinance 86, s. 1990 which authorized the closure of J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market thereon. The said ordinance was approved by the municipal council pursuant to MCC Ordinance 2, s. 1979, authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions. On 20 July 1990, the Metropolitan Manila Authority approved Ordinance 86, s. 1990 of the municipal council subject to conditions. On 20 June 1990, the municipal council issued a resolution authorizing the Paraaque Mayor to enter into contract with any service cooperative for the establishment, operation, maintenance and management of flea markets and/or vending areas. On 8 August 1990, the municipality and Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage the flea market with the obligation to remit dues to the treasury of the municipal government of Paraaque. Consequently, market stalls were put up by Palanyag on the said streets. On 13 September 1990 Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabrielle St. in Baclaran. These stalls were later returned to Palanyag. On 16 October 1990, Macasiano wrote a letter to Palanyag giving the latter 10 days to discontinue the flea market; otherwise, the market stalls shall be dismantled.

On 23 October 1990, the municipality and Palanyag filed with the trial court a joint petition for prohibition and mandamus with damages and prayer for preliminary injunction. On 17 December 1990, the trial court issued an order upholding the validity of Ordinance 86 s. 1990 of the Municipality of Paraaque and enjoining Macasiano from enforcing his letter-order against Palanyag. Hence, a petition for certiorari under Rule 65 was filed by Macasiano thru the OSG. The Supreme Court granted the petition, and reversed and set aside the 17 December 1990 decision of the RTC which granted the writ of preliminary injunction enjoining the PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition of market stalls along J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets. 1. Property of provinces, cities and municipalities; Property for public use The property of provinces, cities and municipalities is divided into property for public use and patrimonial property (Art. 423, Civil Code). As to property for public use, Article 424 of Civil Code provides that "property for public use, in the provinces, cities and municipalities, consists of the provincial roads, city streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws." In the present case, thus, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia Extension and Opena streets are local roads used for public service and are therefore considered public properties of the municipality. 2. Properties for public service deemed public and under absolute control of Congress Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress

(Province of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334 [1968]). 3. Local governments have no authority to regulate use of public properties unless authority is vested upon by Congress; e.g. Closure of roads Local governments have no authority whatsoever to control or regulate the use of public properties unless specific authority is vested upon them by Congress. One such example of this authority given by Congress to the local governments is the power to close roads as provided in Section 10, Chapter II of the Local Government Code (BP 337), which states A local government unit may likewise, through its head acting pursuant to a resolution of its sangguniang and in accordance with existing law and the provisions of this Code, close any barangay, municipal, city or provincial road, street, alley, park or square. No such way or place or any part thereof shall be closed without indemnifying any person prejudiced thereby. A property thus withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed." 4. Legal provision should be read and interpreted in accordance with basic principles already established by law; LGU has no power to lease a road available to public and ordinarily used for vehicular traffic The legal provision (Chapter II, Section 10 of the LGC) which gives authority to local government units to close roads and other similar public places should be read and interpreted in accordance with basic principles already established by law. These basic principles have the effect of limiting such authority of the province, city or municipality to close a public street or thoroughfare. Article 424 NCC lays down the basic principle that properties of public dominion devoted to public use and made available to the public in general are outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. Aside from the requirement of due process which

should be complied with before closing a road, street or park, the closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or public service. When it is already withdrawn from public use, the property then becomes patrimonial property of the local government unit (LGU) (Article 422 NCC; Cebu Oxygen v. Bercilles, 66 SCRA 481 [1975]). It is only then that the LGU can "use or convey them for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed." However, those roads and streets which are available to the public in general and ordinarily used for vehicular traffic are still considered public property devoted to public use. In such case, the LGU has no power to use it for another purpose or to dispose of or lease it to private persons. 5. Related case, Cebu Oxygen v. Bercilles In Cebu Oxygen v. Bercilles, the City Council of Cebu, through a resolution, declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not being included in the City Development Plan. Thereafter, the City Council passed another resolution authorizing the sale of the said abandoned road through public bidding. The Court held that the City of Cebu is empowered to close a city street and to vacate or withdraw the same from public use. Such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract 6. Related case, Dacanay v. Asistio In Dacanay v. Asistio, the disputed areas from which the market stalls are sought to be evicted are public streets. A public street is property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contract (Villanueva, et al. v. Castaeda and Macalino, 15 SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot v. De la Fuente, 48 O.G. 4860). The right of the public to use the city

streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to protect. The leases or licenses granted by the City Government to stallholders are null and void for being contrary to law. The Executive Order issued by the acting Mayor authorizing the use of Heroes del '96 Street as a vending area for stallholders contravenes the general law that reserves city streets and roads for public use. The Executive Order may not infringe upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians. 7. In gratia argumenti, ordinance cannot be validly implemented as municipality has not complied with conditions imposed by the MMA for the approval of the ordinance Even assuming, in gratia argumenti, that the municipality has the authority to pass the disputed ordinance, the same cannot be validly implemented because it cannot be considered approved by the Metropolitan Manila Authority due to non-compliance by the municipality of the conditions imposed by the former for the approval of the ordinance. The allegations of the municipality that the closed streets were not used for vehicular traffic and that the majority of the residents do not oppose the establishment of a flea market on said streets are unsupported by any evidence that will show that the first condition has been met. Likewise, the designation by the Municipality of a time schedule during which the flea market shall operate is absent (fourth condition). 8. Baclaran area congested; establishment of flea market on municipality streets does not help solve problem of congestion It is of public notice that the streets along Baclaran area are congested with people, houses and traffic brought about by the proliferation of vendors occupying the streets. To license and allow the establishment of a flea market along J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in Baclaran would not help in solving the

problem of congestion but rather leads to inconvenience to children as the normal transportation flow is disrupted, to pollution and deterioration of health of residents due to the garbage left by the vendors on the streets. Further, ambulances and fire engines are not able to use the roads for a more direct access to the fire area and thus lose valuable time that should have been spent in saving properties and lives. And further, the ambulances and people rushing patients to St. Rita Hospital located along GG Cruz Street are delayed as they are unable to pass through said street due to the stalls and vendors. 9. Powers of local government unit not absolute The powers of a local government unit are not absolute. They are subject to limitations laid down by the Constitution and the laws such as our Civil Code. Moreover, the exercise of such powers should be subservient to paramount considerations of health and well-being of the members of the community. Every local government unit has the sworn obligation to enact measures that will enhance the public health, safety and convenience, maintain peace and order, and promote the general prosperity of the inhabitants of the local units. Based on this objective, the local government should refrain from acting towards that which might prejudice or adversely affect the general welfare. 10. General public has legal right to demand the restoration of city streets to their specific public purpose As in the Dacanay case, the general public have a legal right to demand the demolition of the illegally constructed stalls in public roads and streets and the officials of municipality have the corresponding duty arising from public office to clear the city streets and restore them to their specific public purpose. 11. Applicability of the Dacanay case; Contracts by Local Government governed by the original terms and conditions, and the law in force at time the rights were vested As in the Dacanay case, both cases involve an ordinance which is void and illegal for lack of basis and authority in laws applicable during its

time. However, BP 337 (Local Government Code), has already been repealed by RA7160 (Local Government Code of 1991) which took effect on 1 January 1992. Section 5(d) of the new Code provides that rights and obligations existing on the date of effectivity of the new Code and arising out of contracts or any other source of prestation involving a local government unit shall be governed by the original terms and conditions of the said contracts or the law in force at the time such rights were vested. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 172102 July 2, 2010

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. HANOVER WORLWIDE TRADING CORPORATION, Respondent. DECISION PERALTA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking the reversal and setting aside of the Decision1 dated May 6, 2005 of the Court of Appeals (CA) in CA-G.R. CV No. 70077, which affirmed the August 7, 1997 Decision of the Regional Trial Court (RTC) of Mandaue City, Branch 56, in LAND REG. CASE NO. N-281. Petitioner also assails the CA Resolution2 dated March 30, 2006, denying its Motion for Reconsideration. The facts of the case are as follows:

On October 15, 1993, Hanover Worldwide Trading Corporation filed an application for Registration of Title over Lot No. 4488 of Consolacion Cad-545-D (New) under Vs-072219-000396, situated in Barrio Sacsac, Consolacion, Cebu, containing an area of One Hundred Three Thousand Three Hundred Fifty (103,350) square meters, more or less, pursuant to Presidential Decree (P.D.) No. 1529, otherwise known as the Property Registration Decree. The application stated that Hanover is the owner in fee simple of Lot No. 4488, its title thereto having been obtained through purchase evidenced by a Deed of Absolute Sale. Attached to the petition are: 1) a Verification Survey Plan; 2) a copy of the approved Technical Description of Lot 4488; 3) a copy of the Deed of Sale in favor of Hanovers President and General Manager; 4) a copy of a Waiver executed by the President and General Manager of Hanover in favor of the latter; 5) a Geodetic Engineer's Certificate attesting that the property was surveyed; 6) a Tax Declaration; 7) a tax clearance; 8) a Municipal Assessor's Certification stating, among others, the assessed value and market value of the property; and 9) a CENRO Certification on the alienability and disposability of the property. Except for the Republic, there were no other oppositors to the application. The Republic contended, among others, that neither Hanover nor its predecessors-in-interest are in open, continuous, exclusive and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto; the muniments of title, tax declarations and receipts of tax payments attached to or alleged in the application do not constitute competent and sufficient evidence of a bona fide acquisition of the lands applied for; Hanover is a private corporation disqualified under the Constitution to hold alienable lands of the public domain; the parcels of land applied for are portions of the public domain belonging to the Republic and are not subject to private appropriation. The case was then called for trial and respondent proceeded with the presentation of its evidence. The Republic was represented in the

proceedings by officers from the Office of the Solicitor General (OSG) and the Department of Environment and Natural Resources (DENR). On August 7, 1997, the RTC rendered its Decision3 approving Hanovers application for registration of the subject lot. It held that from the documentary and oral evidence presented by Hanover, the trial court was convinced that Hanover and its predecessors-in-interest had been in open, public, continuous, notorious and peaceful possession, in the concept of an owner, of the land applied for registration of title, and that it had registrable title thereto in accordance with Section 14 of P.D. 1529. On appeal by the State, the judgment of the RTC was affirmed by the CA via the presently assailed Decision and Resolution. Hence, the instant petition based on the following grounds: I THE DEFECTIVE AND/OR WANT OF NOTICE BY PUBLICATION OF THE INITIAL HEARING OF THE CASE A QUO DID NOT VEST THE TRIAL COURT WITH JURISDICTION TO TAKE COGNIZANCE THEREOF. II DEEDS OF SALE AND TAX DECLARATIONS/CLEARANCES DID NOT CONSTITUTE THE "WELL-NIGH INCONTROVERTIBLE" EVIDENCE NECESSARY TO ACQUIRE TITLE THROUGH ADVERSE OCCUPATION.4 Petitioner claims that the RTC failed to acquire jurisdiction over the case. It avers that the RTC set the initial hearing of the case on September 25, 1995 in an Order dated June 13, 1995. Petitioner contends, however, that, pursuant to Section 23 of P.D. 1529, the initial hearing of the case must be not earlier than forty-five (45) days and not later than ninety (90) days from the date of the Order setting the date and

hour of the initial hearing. Since the RTC Order was issued on June 13, 1995, the initial hearing should have been set not earlier than July 28, 1995 (45 days from June 13, 1995) and not later than September 11, 1995 (90 days from June 13, 1995). Unfortunately, the initial hearing was scheduled and actually held on September 25, 1998, some fourteen (14) days later than the prescribed period. Petitioner also argues that respondent failed to present incontrovertible evidence in the form of specific facts indicating the nature and duration of the occupation of its predecessor-in-interest to prove that the latter has been in possession of the subject lot under a bona fide claim of acquisition of ownership since June 12, 1945 or earlier. The petition is meritorious. As to the first assigned error, however, the Court is not persuaded by petitioners contention that the RTC did not acquire jurisdiction over the case. It is true that in land registration cases, the applicant must strictly comply with the jurisdictional requirements. In the instant case, though, there is no dispute that respondent complied with the requirements of the law for the court to acquire jurisdiction over the case. With respect to the setting of the initial hearing outside the 90-day period set forth under Section 23 of P.D. 1529, the Court agrees with the CA in ruling that the setting of the initial hearing is the duty of the land registration court and not the applicant. Citing Republic v. Manna Properties, Inc.,5 this Court held in Republic v. San Lorenzo Development Corporation6 that: The duty and the power to set the hearing date lie with the land registration court. After an applicant has filed his application, the law requires the issuance of a court order setting the initial hearing date. The notice of initial hearing is a court document. The notice of initial hearing is signed by the judge and copy of the notice is mailed by the clerk of court to the LRA [Land Registration Authority]. This involves a process to which the party-applicant absolutely has no participation. x x x

xxxx x x x a party to an action has no control over the Administrator or the Clerk of Court acting as a land court; he has no right to meddle unduly with the business of such official in the performance of his duties. A party cannot intervene in matters within the exclusive power of the trial court. No fault is attributable to such party if the trial court errs on matters within its sole power. It is unfair to punish an applicant for an act or omission over which the applicant has neither responsibility nor control, especially if the applicant has complied with all the requirements of the law. Moreover, it is evident in Manna Properties, Inc. that what is more important than the date on which the initial hearing is set is the giving of sufficient notice of the registration proceedings via publication. x x x In the instant case, there is no dispute that sufficient notice of the registration proceedings via publication was duly made.1avvphi1 Moreover, petitioner concedes (a) that respondent should not be entirely faulted if the initial hearing that was conducted on September 25, 1995 was outside the 90-day period set forth under Section 23 of Presidential Decree No. 1529, and (b) that respondent substantially complied with the requirement relating to the registration of the subject land. Hence, on the issue of jurisdiction, the Court finds that the RTC did not commit any error in giving due course to respondents application for registration. The foregoing notwithstanding, the Court agrees with petitioner on the more important issue that respondent failed to present sufficient evidence to prove that it or its predecessors-in-interest possessed and occupied the subject property for the period required by law. Section 14 (1) of P.D. 1529, as amended, provides:

SEC. 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.7 Likewise, Section 48 (b) of Commonwealth Act 141, as amended by Section 4 of P.D. 1073, states: Section 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance [now Regional Trial Court] of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxxx (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.8 As the law now stands, a mere showing of possession and occupation for 30 years or more is not sufficient. Therefore, since the effectivity of P.D. 1073 on January 25, 1977, it must now be shown that possession and occupation of the piece of land by the applicant, by himself or through

his predecessors-in-interest, started on June 12, 1945 or earlier. This provision is in total conformity with Section 14 (1) of P.D. 1529.9 Thus, pursuant to the aforequoted provisions of law, applicants for registration of title must prove: (1) that the subject land forms part of the disposable and alienable lands of the public domain, and (2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership since June 12, 1945, or earlier. It is true, as respondent argues, that an examination of these requisites involve delving into questions of fact which are not proper in a petition for review on certiorari. Factual findings of the court a quo are generally binding on this Court, except for certain recognized exceptions,10 to wit: (1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) When the findings are contrary to those of the trial Court; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based;

(9) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.11 The Court finds that the instant case falls under the third and ninth exceptions. A careful reading of the Decisions of the RTC and the CA will show that there is neither finding nor discussion by both the trial and appellate courts which would support their conclusion that respondents predecessors-in-interest had open, continuous, exclusive and notorious possession and occupation of the disputed parcel of land since June 12, 1945 or earlier. No testimonial evidence was presented to prove that respondent or its predecessors-in-interest had been possessing and occupying the subject property since June 12, 1945 or earlier. Hanovers President and General Manager testified only with respect to his claim that he was the former owner of the subject property and that he acquired the same from the heirs of a certain Damiano Bontoyan; that he caused the payment of realty taxes due on the property; that a tax declaration was issued in favor of Hanover; that Hanover caused a survey of the subject lot, duly approved by the Bureau of Lands; and that his and Hanovers possession of the property started in 1990.12 The pieces of documentary evidence submitted by respondent neither show that its predecessors possession and occupation of the subject land is for the period or duration required by law. The earliest date of the Tax Declarations presented in evidence by respondent is 1965, the others being 1973, 1980, 1992 and 1993. Respondent failed to present any credible explanation why the realty taxes due on the subject property were only paid starting in 1965. While tax declarations are not

conclusive evidence of ownership, they constitute proof of claim of ownership.13 In the present case, the payment of realty taxes starting 1965 gives rise to the presumption that respondents predecessors-ininterest claimed ownership or possession of the subject lot only in that year. Settled is the rule that the burden of proof in land registration cases rests on the applicant who must show by clear, positive and convincing evidence that his alleged possession and occupation of the land is of the nature and duration required by law.14 Unfortunately, as petitioner contends, the pieces of evidence presented by respondent do not constitute the "well-nigh incontrovertible" proof necessary in cases of this nature. Lastly, the Court notes that respondent failed to prove that the subject lot had been declared alienable and disposable by the DENR Secretary. The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably belong to the State.15 The onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application for registration is alienable and disposable rests with the applicant.16 In the present case, to prove the alienability and disposability of the subject property, Hanover submitted a Certification issued by the Community Environment and Natural Resources Offices (CENRO) attesting that "lot 4488, CAD-545-D, containing an area of ONE HUNDRED THREE THOUSAND THREE HUNDRED FIFTY (103,350) square meters, more or less, situated at Sacsac, Consolacion, Cebu" was found to be within "Alienable and Disposable Block-1, land classification project no. 28, per map 2545 of Consolacion, Cebu." However, this certification is not sufficient. In Republic v. T.A.N. Properties, Inc.17 this Court held that it is not enough for the Provincial Environment and Natural Resources Offices

(PENRO) or CENRO to certify that a land is alienable and disposable, thus: x x x The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that the land is alienable and disposable x x x.18 In the instant case, even the veracity of the facts stated in the CENRO Certification was not confirmed as only the President and General Manager of respondent corporation identified said Certification submitted by the latter. It is settled that a document or writing admitted as part of the testimony of a witness does not constitute proof of the facts stated therein.19 In the present case, Hanovers President and General Manager, who identified the CENRO Certification, is a private individual. He was not the one who prepared the Certification. The government official who issued the Certification was not presented before the RTC so that he could have testified regarding its contents. Hence, the RTC should not have accepted the contents of the Certification as proof of the facts stated therein. The contents of the Certification are hearsay, because Hanovers President and General Manager was incompetent to testify on the truth of the contents of such Certification. Even if the subject Certification is presumed duly issued and admissible in evidence, it has no probative value in establishing that the land is alienable and disposable.20 Moreover, the CENRO is not the official repository or legal custodian of the issuances of the DENR Secretary declaring the alienability and disposability of public lands.21 Thus, the CENRO Certification should

have been accompanied by an official publication of the DENR Secretarys issuance declaring the land alienable and disposable. Respondent, however, failed to comply with the foregoing requirements. WHEREFORE, the petition is GRANTED. The May 6, 2005 Decision and March 30, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 70077 and the August 7, 1997 Decision of the Regional Trial Court of Mandaue City, Branch 56 in Land Registration Case No. N-281 are SET ASIDE. Respondent Hanover Worldwide Trading Corporations application for registration of Lot No. 4488 of Consolacion Cad-545-D (New), under Vs-072219-000396, Barrio Sacsac, Consolacion, Cebu, is DENIED. SO ORDERED. DIOSDADO M. PERALTA Associate Justice WE CONCUR: