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COURSE OUTLINE

SESSION 1
LTD
ARELLANO UNIVERSITY SCHOOL OF LAW

PART II
Article 423. The property of provinces, cities, and municipalities is divided into property for public use and
patrimonial property. (343)
Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial
roads, city streets, municipal 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. (344a)
Article 425. Property of private ownership, besides the patrimonial property of the State, provinces, cities,
and municipalities, consists of all property belonging to private persons, either individually or collectively.
(345a)
Case:
G.R. No. L-14518

August 29, 1960

EUGENIA NELAYAN, ET AL., plaintiffs-appellants, vs. CECILIA NELAYAN, ET AL., defendants-appellees.


Antonio Pandes for appellants.
Reyes and Dy-Liacco for appellees.
REYES, J.B.L., J.:
On December 15, 1952, plaintiffs filed versus Cecilia Nelayan and the Director of Lands a complaint with the
Court of First Instance of Camarines Sur for "Cancellation of Title and Reconveyance ", alleging that they
(plaintiffs) have been since time immemorial, in actual possession as owners, respectively, of various
parcels of land described therein; that such possession has been public, uninterrupted and in the concept of
owner; that on October 23, 1952, Original Certificate of Title No. 518 was issued in the name of defendant
Cecilia Nelayan as a result of her application for free patent over the parcels of land in dispute; that said
certificate of title is null and void with respect to the parcels claimed by plaintiffs, as the same were no longer
part of the public domain, and that the Director of Lands was without jurisdiction in entertaining the
application for, and in granting the free patent; that plaintiffs were never informed nor had they any
knowledge of the survey of the said lands or of the proceedings instituted by Cecilia Nelayan; and that the
latter, who very well knew that said parcels of land were being possessed by the plaintiffs as owners thereof,
is guilty of fraud in failing to notify them of the said proceedings. Plaintiffs, therefore, prayed that Original
Certificate of Title No. 518 be annulled and that they be declared owners of the parcels of land in question.
They further asked for such other relief as the court might deem just and equitable.
Answering the complaint, defendant Cecilia Nelayan denied all material allegations of the complaint, and by
way of special defense, asserted ownership over the disputed parcels, having been in continuous, peaceful,
public, adverse and material possession over it for a period of over 50 years. Defendant Director of Lands, in
his answer, likewise denied the material allegations of the complaint and attested, as special defense, to the
regularity of the proceedings leading to the issuance in Cecilia's favor of the certificate of title in question.
On February 11, 1957, defendant Cecilia Nelayan filed a motion to dismiss the complaint on the ground that
(1) the complaint failed to state facts sufficient to constitute a cause of action and (2) that the lower court had
no jurisdiction to annul or set aside the certificate of title already issued to her. Over plaintiff's objections, the
lower court ordered the dismissal of the case for lack of jurisdiction (Order of April 30, 1957). From this order

of dismissal and from the orders denying their motions for reconsideration and another motion for leave to
amend the complaint so as to add a specific prayer for reconveyance, 36 3 plaintiffs interposed the present
appeal to the Court of Appeals, that certified the same to us, because it involves only questions of law.
Appellants contend, while appellees deny (1) that the Court of First Instance of Camarines Sur,
notwithstanding the certificate of title under free patent already issued to defendant Nelayan, still had the
right to exercise its jurisdiction to try the case; (2) that the complaint stated good cause of action against the
defendant; and lastly, (3) that the lower court erred in denying plaintiffs' motion for leave to accept the
amended complaint.
Pertinent to the first issue is the rule that once a patent is issued, the land acquires the character of
registered property under section 122 of Act No. 496, and is, therefore, deemed brought within the operation
of the said Land Registration Act (see Tomas Roco, et al., vs. Juan Gimeda,* 55 Off. Gaz. [37] 7922). It
follows that after issuance of the patent, an aggrieved party is accorded the same or similar remedies as are
extended in ordinary registration proceedings after entry of the decree of confirmation or registration. One of
such remedies may be found under section 38 of Act 496, which, in part provides:
. . . subject, however, to the right of any person deprived of land or of any estate or interest therein
by decree of registration obtained by fraud to file in the competent Court of First Instance a petition
for review within one year after entry of the decree provided no innocent purchaser for value has
acquired an interest. Upon expiration of said term of one year, every decree of certificate of title
issued in accordance with this section shall be incontrovertible. . . .
In Diwaling Sumail vs. Court of First Instance of Cotabato, et al., 96 Phil., 946; 51 Off. Gaz.[5] 2413, this
Court opined that the one-year period provided under section 38 should, in the case of public land grants
(patents), be counted from the issuance of the patent by the Government under the Public Land Act (C.A.
141). Free Patent No. V-2371 was issued only on October 9, 1952, while the complaint in the case at bar
was filed on December 15, 1952, or after a period of only two months and six days. Having been filed in due
time, the case should have been given its regular course by the lower court, instead of having been ordered
dismissed outright.
Neither is the complaint insufficient in stating a cause of action. Among other matters, it contains allegations
to the effect that the plaintiffs have been, since time immemorial, in possession as owners of the disputed
parcels of land, but that through actual fraud, defendant Cecilia Nelayan succeeded in securing for herself
the certificate of title in question. Defendants-appellees must base their claim of ownership or right of action
on Section 48 (B) of the Public Land Act, providing that:
Those who by themselves or through their predecessors in interest have been in the open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership for at least thirty years immediately
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 certificate of title under the provisions of this chapter. (As
amended by Republic Act No. 1942, June 22, 1957)1
under which they may ask for the judicial confirmation of their imperfect or incomplete title; but which course
of action, appellees argue, is no longer available to the appellants because section 48, in connection with
section 47 of the Public Land Act ceased to become operative on the day following December 31, 1938, the
original period fixed in the said Act within which possessors or occupants of public lands could avail of its
benefits. Appellees evidently overlook that this period has been extended from time to time by the
legislature, the latest prorogation being by Republic Act No. 2061, which extends the terms of its effectivity
until December 31, 1968.
There is likewise no merit in appellees' contention that the complaint does not aver sufficient facts of
ownership to hold against either the appellee Nelayan or the government.
Plaintiffs' allegation that they have been in continued possession of the properties in dispute since time
immemorial as owners thereof is a sufficient averment of private ownership.2 It should be remembered that
possession since time immemorial carries the presumption that the land had never been part of the public

domain or that it had been a private property even before the Spanish conquest. And so, we said in one
case
... All lands that were not acquired from the Government, either by purchase or by grant, belong to
the public domain. An exception to the rule would be any land that should have been in the
possession of an occupant and of his predecessors in interest since time immemorial for such
possession would justify the presumption that the land had never been part of the public domain or
that it had been a private property even before the Spanish conquest. (Oh Cho vs. Director of
Lands, 75 Phil., 890 892, Citing Cario vs. Insular Government, 212 U.S. 449, 53 L. ed. 394).
(Emphasis supplied).
Whether this presumption should hold as a fact or not is a question appropriately determinable only after the
parties have already adduced, or at least, are given the opportunity to adduce, their respective evidence.
The ruling of this Court in Susi vs. Razon, and Director of Lands, 48 Phil., 424, 428 (reaffirmed in Mesina vs.
Pineda, 108 Phil., 251; 58 Off. Gaz [25] 4603), is also conclusive in favor of appellants herein. It said:
In favor of Valentin Susi, there is moreover, the presumption juris et de jure established in
paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary
requirements for a grant by the Government were complied with, for he has been in actual and
physical possession, personally and through his predecessors, of an agricultural land of the public
domain openly, continuously, exclusively and publicly since July 26, 1894, with a right to a
certificate of title to said land under the provisions of Chapter VIII of said Act. So that when Angela
Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law,
not only a right to grant, but a grant of the Government for it is not necessary that certificate of title
should be issued in order that said grant may be sanctioned by the courts, an application therefor is
sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had
acquired the land in question by a grant of the State, it had already at least by presumption, of
Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in
question to Angela Razon, the Director of Lands disposed of a land over which he had no longer
any title or control, and the sale thus made was void and of no effect, and Angela did not thereby
acquire any right.
The Director of Lands contends that the land in question being of the public domain, the plaintiffappellee cannot maintain an action to recover possession thereof.
If, as above-stated, the land, the possession of which is in dispute, had already become, by
operation of law, private property of the plaintiff, there lacking only the judicial sanction of his title,
Valentin Susi has the right to bring an action to recover the possession thereof and hold it.
The case of Reyes, et al., vs. Rodriguez, et al., 62 Phil., 771, cited by the appellees, is not the authority to
the contrary. In said case, there was a trial and upon the evidence at hand, it did not appear that the
appellant really had any title or interest in the land in question, presumed or proven, to hold against the
appellee or the government. The presumption of ownership could not likewise hold because appellants'
possession was neither alleged nor proven to be since time immemorial. In fact, the averment made there,
that the claimant's possession started in 1883, was not even believed by the Court. For similar reasons, Li
Seng Giap and Co. vs. Director of Lands, 59 Phil., 687 does not govern the case at bar, considering that the
possession therein averred started only during the Spanish regime.
It may not be amiss to state, furthermore, that the remedial provisions of section 38 of the Land Registration
Act, prescribing a mode by which a decree may be set aside upon petition by private individuals, are
expressly made applicable even to those who may have been deprived merely of an estate or interest in
(not necessarily ownership of) the land.
The fraud averred by plaintiffs is actual fraud, consisting in the alleged concealment from the plaintiffs of the
proceedings leading to the issuance of defendant Nelayan of the questioned free patent, notwithstanding her
knowledge that the land covered under her application was being possessed by the appellants as the
owners thereof. This is fraud as contemplated under section 38 of the Land Registration Act (Angelo vs.
Director of Lands, et al., 49 Phil., 838).

The third issue, presented by the parties in this appeal, is whether or not the amended complaint should
have been admitted by the court a quo. No discussion is called for, since in substance and in contents, the
original complaint (which has been captioned "For Cancellation of Title and Reconveyance"), as shown in
the preceding discussion, contains sufficient averments for either the cancellation of defendant Nelayan's
title or the reconveyance of the property, thereby negating further need for an amendment. As authorized by
the Rules (Section 9, Rule 15, Rules of Court; see also Section 1, Rule 2, ibid), plaintiff may allege causes of
action in the alternative, be they compatible with each other or not, to the end that the real matter in the
controversy may be resolved and determined.
Wherefore the order of dismissal appealed from is hereby set aside, and the case ordered remanded to the
lower court for further proceedings. Costs in this appeal against appellee Cecilia Nelayan.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion, Barrera and Gutierrez David, JJ.,
concur.
Footnotes
*

104 Phil. 1011.

Note that under the latest amendatory provisions, the phrase "except as against the government"
found in the original Act and previous amendments was deleted. (See R.A. 2061 and 1942).
2

In fact, plaintiffs pray in their complaint that they be declared owners of the parcel of land in
litigation.
Article 712. Ownership is acquired by occupation and by intellectual creation.
Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate
and intestate succession, and in consequence of certain contracts, by tradition.
They may also be acquired by means of prescription. (609a)
H. Aquisitive Prescription against Extinctive Prescription (New Civil Code)
Article 1106. By prescription, one acquires ownership and other real rights through the lapse of time in the
manner and under the conditions laid down by law.
In the same way, rights and conditions are lost by prescription. (1930a)
Cases:
[G.R. No. 149750. June 16, 2003]
AURORA ALCANTARA-DAUS, petitioner, vs. Sps HERMOSO and SOCORRO DE LEON, respondents.
DECISION
PANGANIBAN, J.:
While a contract of sale is perfected by mere consent, ownership of the thing sold is acquired only upon its
delivery to the buyer. Upon the perfection of the sale, the seller assumes the obligation to transfer
ownership and to deliver the thing sold, but the real right of ownership is transferred only by tradition or
delivery thereof to the buyer.
The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February 9,
2001 Decision and the August 31, 2001 Resolution of the Court of Appeals(CA) in CA-GR CV No. 47587.
The dispositive portion of the assailed Decision reads as follows:
WHEREFORE, premises considered, the decision of the trial court is hereby REVERSED, and judgment
rendered:
1. Declaring null and void and of no effect, the [D]eed of [A]bsolute [S]ale dated December 6, 1975, the
[D]eed of [E]xtra-judicial [P]artition and [Q]uitclaim dated July 1, 1985, and T.C.T. No. T-31262;
2. Declaring T.C.T. No. 42238 as valid and binding;
3. Eliminating the award of P5,000.00 each to be paid to defendants-appellees.
The assailed Resolution denied petitioners Motion for Reconsideration.
The Facts
The antecedents of the case were summarized by the Regional Trial Court (RTC) and adopted by the CA as
follows:
This is a [C]omplaint for annulment of documents and title, ownership, possession, injunction, preliminary
injunction, restraining order and damages.
[Respondents] alleged in their [C]omplaint that they are the owners of a parcel of land hereunder described
as follows, to wit:
A parcel of land (Lot No. 4786 of the Cadastral Survey of San Manuel) situated in the Municipality of San
Manuel, Bounded on the NW., by Lot No. 4785; and on the SE., by Lot Nos. 11094 & 11096; containing an
area of Four Thousand Two Hundred Twelve (4,212) sq. m., more or less. Covered by Original Certificate of
Title No. 22134 of the Land Records of Pangasinan.
which [Respondent] Hermoso de Leon inherited from his father Marcelino de Leon by virtue of a [D]eed of
[E]xtra-judicial [P]artition. Sometime in the early 1960s, [respondents] engaged the services of the late Atty.
Florencio Juan to take care of the documents of the properties of his parents. Atty. Juan let them sign
voluminous documents. After the death of Atty. Juan, some documents surfaced and most revealed that
their properties had been conveyed by sale or quitclaim to [Respondent] Hermosos brothers and sisters, to
Atty. Juan and his sisters, when in truth and in fact, no such conveyances were ever intended by them. His
signature in the [D]eed of [E]xtra-judicial [P]artition with [Q]uitclaim made in favor of x x x Rodolfo de Leon
was forged. They discovered that the land in question was sold by x x x Rodolfo de Leon to [Petitioner]
Aurora Alcantara. They demanded annulment of the document and reconveyance but defendants refused x
x x.
xxx

xxx

[Petitioner] Aurora Alcantara-Daus [averred] that she bought the land in question in good faith and for value
on December 6, 1975. [She] has been in continuous, public, peaceful, open possession over the same and
has been appropriating the produce thereof without objection from anyone.
On August 23, 1994, the RTC (Branch 48) of Urdaneta, Pangasinan rendered its Decision in favor of herein
petitioner. It ruled that respondents claim was barred by laches, because more than 18 years had passed
since the land was sold. It further ruled that since it was a notarial document, the Deed of Extrajudicial
Partition in favor of Rodolfo de Leon was presumptively authentic.
Ruling of the Court of Appeals

In reversing the RTC, the CA held that laches did not bar respondents from pursuing their claim.
Notwithstanding the delay, laches is a doctrine in equity and may not be invoked to resist the enforcement of
a legal right.
The appellate court also held that since Rodolfo de Leon was not the owner of the land at the time of the
sale, he could not transfer any land rights to petitioner. It further declared that the signature of Hermoso de
Leon on the Deed of Extrajudicial Partition and Quitclaim -- upon which petitioner bases her claim -- was a
forgery. It added that under the above circumstances, petitioner could not be said to be a buyer in good
faith.
Hence, this Petition.
The Issues
Petitioner raises the following issues for our consideration:
1. Whether or not the Deed of Absolute Sale dated December 6, 1975 executed by Rodolfo de Leon
(deceased) over the land in question in favor of petitioner was perfected and binding upon the parties
therein?
2. Whether or not the evidentiary weight of the Deed of Extrajudicial Partition with Quitclaim, executed by
[R]espondent Hermoso de Leon, Perlita de Leon and Carlota de Leon in favor of Rodolfo de Leon was
overcome by more than [a] preponderance of evidence of respondents?
3. Whether or not the possession of petitioner including her predecessor-in-interest Rodolfo de Leon over
the land in question was in good faith?
4. And whether or not the instant case initiated and filed by respondents on February 24, 1993 before the
trial court has prescribed and respondents are guilty of laches?
The Courts Ruling
The Petition has no merit.
First Issue:
Validity of the Deed of Absolute Sale
Petitioner argues that, having been perfected, the Contract of Sale executed on December 6, 1975 was thus
binding upon the parties thereto.
A contract of sale is consensual. It is perfected by mere consent, upon a meeting of the minds on the offer
and the acceptance thereof based on subject matter, price and terms of payment. At this stage, the sellers
ownership of the thing sold is not an element in the perfection of the contract of sale.
The contract, however, creates an obligation on the part of the seller to transfer ownership and to deliver the
subject matter of the contract. It is during the delivery that the law requires the seller to have the right to
transfer ownership of the thing sold. In general, a perfected contract of sale cannot be challenged on the
ground of the sellers non-ownership of the thing sold at the time of the perfection of the contract.
Further, even after the contract of sale has been perfected between the parties, its consummation by
delivery is yet another matter. It is through tradition or delivery that the buyer acquires the real right of
ownership over the thing sold.
Undisputed is the fact that at the time of the sale, Rodolfo de Leon was not the owner of the land he
delivered to petitioner. Thus, the consummation of the contract and the consequent transfer of ownership
would depend on whether he subsequently acquired ownership of the land in accordance with Article 1434

of the Civil Code. Therefore, we need to resolve the issue of the authenticity and the due execution of the
Extrajudicial Partition and Quitclaim in his favor.
Second Issue:
Authenticity of the Extrajudicial Partition
Petitioner contends that the Extrajudicial Partition and Quitclaim is authentic, because it was notarized and
executed in accordance with law. She claims that there is no clear and convincing evidence to set aside the
presumption of regularity in the issuance of such public document. We disagree.
As a general rule, the due execution and authenticity of a document must be reasonably established before
it may be admitted in evidence. Notarial documents, however, may be presented in evidence without further
proof of their authenticity, since the certificate of acknowledgment is prima facie evidence of the execution of
the instrument or document involved. To contradict facts in a notarial document and the presumption of
regularity in its favor, the evidence must be clear, convincing and more than merely preponderant.
The CA ruled that the signature of Hermoso de Leon on the Extrajudicial Partition and Quitclaim was forged.
However, this factual finding is in conflict with that of the RTC. While normally this Court does not review
factual issues, this rule does not apply when there is a conflict between the holdings of the CA and those of
the trial court, as in the present case.
After poring over the records, we find no reason to reverse the factual finding of the appellate court. A
comparison of the genuine signatures of Hermoso de Leon with his purported signature on the Deed of
Extrajudicial Partition with Quitclaim will readily reveal that the latter is a forgery. As aptly held by the CA,
such variance cannot be attributed to the age or the mechanical acts of the person signing.
Without the corroborative testimony of the attesting witnesses, the lone account of the notary regarding the
due execution of the Deed is insufficient to sustain the authenticity of this document. He can hardly be
expected to dispute the authenticity of the very Deed he notarized. For this reason, his testimony was -- as
it should be --minutely scrutinized by the appellate court, and was found wanting.
Third Issue:
Possession in Good Faith
Petitioner claims that her possession of the land is in good faith and that, consequently, she has acquired
ownership thereof by virtue of prescription. We are not persuaded.
It is well-settled that no title to registered land in derogation of that of the registered owner shall be acquired
by prescription or adverse possession. Neither can prescription be allowed against the hereditary
successors of the registered owner, because they merely step into the shoes of the decedent and are
merely the continuation of the personality of their predecessor in interest. Consequently, since a certificate
of registration covers it, the disputed land cannot be acquired by prescription regardless of petitioners good
faith.
Fourth Issue:
Prescription of Action and Laches
Petitioner also argues that the right to recover ownership has prescribed, and that respondents are guilty of
laches. Again, we disagree.
Article 1141 of the New Civil Code provides that real actions over immovable properties prescribe after thirty
years. This period for filing an action is interrupted when a complaint is filed in court. Rodolfo de Leon
alleged that the land had been allocated to him by his brother Hermoso de Leon in March 1963, but that the
Deed of Extrajudicial Partition assigning the contested land to the latter was executed only on September
16, 1963. In any case, the Complaint to recover the land from petitioner was filed on February 24, 1993,
which was within the 30-year prescriptive period.

On the claim of laches, we find no reason to reverse the ruling of the CA. Laches is based upon equity and
the public policy of discouraging stale claims. Since laches is an equitable doctrine, its application is
controlled by equitable considerations. It cannot be used to defeat justice or to perpetuate fraud and
injustice. Thus, the assertion of laches to thwart the claim of respondents is foreclosed, because the Deed
upon which petitioner bases her claim is a forgery.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
Rollo, pp. 9-20.
Thirteenth Division. Written by Justice Presbitero J. Velasco Jr. and concurred in by Justices Ruben T.
Reyes (Division chairman) and Juan Q. Enriquez Jr. (member).
Assailed Decision, p. 10; rollo, p. 114.
Id., pp. 121-123.
Id., pp. 1-3 & 105-107.
Presided by Judge Alicia B. Gonzalez-Decano.
Rollo, pp. 37-50; records, pp. 252-265.
This case was submitted for decision on November 7, 2002, upon the Courts receipt of respondents
Memorandum signed by Atty. Villamor A. Tolete. Petitioners Memorandum, filed on October 14, 2002, was
signed by Atty. Simplicio M. Sevilleja.
Petitioners Memorandum, p. 6; rollo, p. 182.
Balatbat v. Court of Appeals, 329 Phil. 858, August 28, 1996; Campillo v. Court of Appeals, 214 Phil. 452,
May 29, 1984.
Article 1475 of the New Civil Code (NCC): The contract of sale is perfected at the moment there is a
meeting of the minds upon the thing which is the object of the contract and upon the price. x x x.
Coronel v. Court of Appeals, 331 Phil. 294, October 7, 1996; Leabres v. Court of Appeals, 146 SCRA 158,
December 12, 1986.
Article 1458 of the NCC: By the contract of sale one of the contracting parties obligates himself to transfer
ownership of and to deliver a determinate thing x x x.
Article 712 of the NCC: x x x. Ownership and other real rights over property are acquired and transmitted x
x x in consequence of certain contracts, by tradition. Emphasis supplied.
Quijada v. Court of Appeals, 360 Phil. 81, December 4, 1998.
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 370 SCRA 56, November 21, 2001.
Art. 1434 of the NCC: When a person who is not the owner of a thing sells or alienates and delivers it; and
later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee.

20 of Rule 132 of the Rules of Court.


30 of Rule 132 of the Rules of Court.
Lao v. Villones-Lao, 366 Phil. 49, April 29, 1999; Calahat v. Intermediate Appellate Court, 311 Phil. 379,
February 15, 1995; Yturralde v. Azurin, 138 Phil. 432, May 30, 1969.
Flores v. Uy, 368 SCRA 347, October 26, 2001; Santos v. Reyes, 368 SCRA 261, October 25, 2001;
Urbanes Jr. v. Court of Appeals, 355 SCRA 537, March 28, 2001; American Express International, Inc. v.
Court of Appeals, 367 Phil. 333, June 8, 1999; Guerrero v. Court of Appeals, 285 SCRA 670, January 30,
1998.
Si v. Court of Appeals, 342 SCRA 653, October 12, 2000; Nokom v. National Labor Relations Commission,
336 SCRA 97, July 18, 2000; Republic of the Philippines v. Court of Appeals, 314 SCRA 230, September 14,
1999; Sta. Maria v. Court of Appeals, 285 SCRA 351, January 28, 1998; Sps. Estonina v. Court of Appeals,
334 Phil. 577, January 27, 1997.
See Deed of Extrajudicial Partition, folder of exhibits, pp. 1-3; Individual Income Tax Return, folder of
exhibits, p. 29; Philippine American Life Insurance Company Health Statement, folder of exhibits, p. 30; and
Panunumpa sa Katungkulan, folder of exhibits, p. 31.
Folder of exhibits, p. 5.
Assailed Decision, p. 8; rollo, p. 112.
Lopez v. Court of Appeals, 81 SCRA 153, January 23, 1978.
47 of the Property Registration Decree (PD 1529); Jose v. Court of Appeals, 192 SCRA 735, December 26,
1990; Ferrer-Lopez v. Court of Appeals, 150 SCRA 393, May 29, 1987.
Jose v. Court of Appeals, supra; Bailon-Casilao v. Court of Appeals, 160 SCRA 738, April 15, 1988.
Transfer Certificate of Title No. T-42238, folder of exhibits, p. 7.
Article 1155 of the NCC: The prescription of actions is interrupted when they are filed before the court, x x
x.
TSN, April 25, 1994, pp. 5-6.
See Deed of Extrajudicial Partition, supra.
See respondents Complaint, rollo, p. 23.
Sotto v. Teves, 86 SCRA 154, October 31, 1978; Tijam v. Sibonghanoy, 131 Phil. 556, April 15, 1968.
Agra v. Philippine National Bank, 368 Phil. 829, June 21, 1999; De Vera v. Court of Appeals, 365 Phil. 170,
April 14, 1999; Sotto v. Teves, supra.
Reyes v. Court of Appeals, 315 SCRA 626, September 30, 1999; De Vera v. Court of Appeals, supra;
Jimenez v. Fernandez, 184 SCRA 190, April 6, 1990.
G.R. No. 155206

October 28, 2003

GSIS, petitioner, vs. EDUARDO M. SANTIAGO, substituted by his widow ROSARIO ENRIQUEZ VDA. DE
SANTIAGO, respondent.

DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by the Government Service Insurance System
(GSIS), seeking to reverse and set aside the Decision1 dated February 22, 2002 of the Court of Appeals
(CA) in CA-G.R. CV No. 62309 and its Resolution dated September 5, 2002 denying its motion for
reconsideration.
The antecedent facts of the case, as culled from the assailed CA decision and that of the trial court, are as
follows:
Deceased spouses Jose C. Zulueta and Soledad Ramos obtained various loans from defendant GSIS for
(the) period September, 1956 to October, 1957 in the total amount of P3,117,000.00 secured by real estate
mortgages over parcels of land covered by TCT Nos. 26105, 37177 and 50365. The Zuluetas failed to pay
their loans to defendant GSIS and the latter foreclosed the real estate mortgages dated September 25,
1956, March 6, 1957, April 4, 1957 and October 15, 1957.
On August 14, 1974, the mortgaged properties were sold at public auction by defendant GSIS submitting a
bid price of P5,229,927.84. Not all lots covered by the mortgaged titles, however, were sold. Ninety-one (91)
lots were expressly excluded from the auction since the lots were sufficient to pay for all the mortgage debts.
A Certificate of Sale (Annex "F," Records, Vol. I, pp. 23-28) was issued by then Provincial Sheriff Nicanor D.
Salaysay.
The Certificate of Sale dated August 14, 1974 had been annotated and inscribed in TCT Nos. 26105, 37177
and 50356, with the following notations: "(T)he following lots which form part of this title (TCT No. 26105) are
not covered by the mortgage contract due to sale to third parties and donation to the government: 50-H-5-C9-J-65-H-8, 50-H-5-C-9J-M-7; 50-H-5-C-9-J-65-H-5; 1 lots Nos. 1 to 13, Block No. 1 -6,138 sq.m. 2. Lots
Nos. 1 to 11, Block No. 2 4,660 sq.m. 3. Lot No. 15, Block No. 3 487 sq.m. 4. Lot No. 17, Block No. 4
263 sq.m. 5. Lot No. 1, Block No. 7 402 sq.m. 6. Road Lots Nos. 1, 2, 3, & 4 2,747 sq.m."
In another "NOTE: The following lots in the Antonio Subdivision were already released by the GSIS and
therefore are not included in this sale, namely: LOT NO. 1, 6, 7, 8, 9, 10, and 13 (Old Plan) Block I; 1, 3, 4,
5, 7, 8 and 10 (Old Plan) Block II; 3, 10, 12 and 13 (New Plan) Block I (Old Plan) Block III; 7, 14 and 20
(New Plan) Block III (Old Plan) Block V; 13 and 20 (New Plan) Block IV (Old Plan) Block VI; 1, 2, 3 and 10
(New Plan) Block V (Old Plan) Block VII; 1, 5, 8, 15, 26 and 27 (New Plan) Block VI (Old Plan) Block VIII; 7,
12 and 20 (New Plan) Block VII (Old Plan) Block II; 1, 4 and 6 (New Plan) Block VIII (Old Plan) Block X; 5
(New Plan) Block X (Old Plan) Block ZXII; 6 (New Plan) Block XI (Old Plan) Block XII; 1, Block 9; 12 Block 1;
11 Block 2; 19 Block 1; 10 Block 6; 23 Block 3."
And the lots on "ADDITIONAL EXCLUSION FROM PUBLIC SALE" are "LOTS NO. 6 Block 4; 2 Block 2; 5
Block 5; 1, 2 and 3 Block 11, 1, 2, 3 and 4 Block 10; 5 Block 11 (New); 1 Block 3; 5 Block 1; 15 Block 7; 11
Block 9; 13 Block 5; 12 Block 5; 3 Block 10; 6."
On November 25, 1975, an Affidavit of Consolidation of Ownership (Annex "G," Records, Vol. I, pp. 29-31)
was executed by defendant GSIS over Zuluetas lots, including the lots, which as earlier stated, were
already excluded from the foreclosure.
On March 6, 1980, defendant GSIS sold the foreclosed properties to Yorkstown Development Corporation
which sale was disapproved by the Office of the President of the Philippines. The sold properties were
returned to defendant GSIS.
The Register of Deeds of Rizal cancelled the land titles issued to Yorkstown Development Corporation. On
July 2, 1980, TCT No. 23552 was issued cancelling TCT No. 21926; TCT No. 23553 cancelled TCT No.
21925; and TCT No. 23554 cancelling TCT No. 21924, all in the name of defendant GSIS.1awphi1.nt
After defendant GSIS had re-acquired the properties sold to Yorkstown Development Corporation, it began
disposing the foreclosed lots including the excluded ones.

10

On April 7, 1990, representative Eduardo Santiago and then plaintiff Antonio Vic Zulueta executed an
agreement whereby Zulueta transferred all his rights and interests over the excluded lots. Plaintiff Eduardo
Santiagos lawyer, Atty. Wenceslao B. Trinidad, wrote a demand letter dated May 11, 1989 (Annex "H,"
Records, Vol. I, pp. 32-33) to defendant GSIS asking for the return of the eighty-one (81) excluded lots.2
On May 7, 1990, Antonio Vic Zulueta, represented by Eduardo M. Santiago, filed with the Regional Trial
Court (RTC) of Pasig City, Branch 71, a complaint for reconveyance of real estate against the GSIS.
Spouses Alfeo and Nenita Escasa, Manuel III and Sylvia G. Urbano, and Marciana P. Gonzales and the
heirs of Mamerto Gonzales moved to be included as intervenors and filed their respective answers in
intervention. Subsequently, the petitioner, as defendant therein, filed its answer alleging inter alia that the
action was barred by the statute of limitations and/or laches and that the complaint stated no cause of
action. Subsequently, Zulueta was substituted by Santiago as the plaintiff in the complaint a quo. Upon the
death of Santiago on March 6, 1996, he was substituted by his widow, Rosario Enriquez Vda. de Santiago,
as the plaintiff.
After due trial, the RTC rendered judgment against the petitioner ordering it to reconvey to the respondent,
Rosario Enriquez Vda. de Santiago, in substitution of her deceased husband Eduardo, the seventy-eight lots
excluded from the foreclosure sale.1awphi1.nt The dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendant:
1. Ordering defendant to reconvey to plaintiff the seventy-eight (78) lots released and excluded
from the foreclosure sale including the additional exclusion from the public sale, namely:
a. Lot Nos. 1, 6, 7, 8, 0, 10, 13, Block I (Old Plan).
b. Lot Nos. 1, 3, 4, 5, 7, 8 and 10, Block II (Old Plan).
c. Lot Nos. 3, 10, 12, and 13, Block I (New Plan), Block III (Old Plan),
d. Lot Nos. 7, 14 and 20, Block III (New Plan), Block V (Old Plan).
e. Lot Nos. 13 and 20, Block IV (New Plan), Block VI (Old Plan).
f. Lot Nos. 1, 2, 3 and 10, Block V (New Plan), Block VII (Old Plan).
g. Lot Nos. 1, 5, 8, 15, 26 and 27, Block VI (New Plan), Block VIII (Old Plan).
h. Lot Nos. 7 and 12, Block VII (New Plan), Block II (Old Plan).
i. Lot Nos. 1, 4 and 6, Block VIII (New Plan), Block X (Old Plan).
j. Lot 5, Block X (New Plan), Block XII (Old Plan).
k. Lot 6, Block XI (New Plan), Block XII (Old Plan).
l. Lots 2, 5, 12 and 15, Block I.
m. Lots 6, 9 and 11, Block 2.
n. Lots 1, 5, 6, 7, 16 and 23, Block 3.
o. Lot 6, Block 4.
p. Lots 5, 12, 13 and 24, Block 5.

11

q. Lots 10 and 16, Block 6.


r. Lots 6 and 15, Block 7.
s. Lots 13, 24, 28 and 29, Block 8.
t. Lots 1, 11, 17 and 22, Block 9.
u. Lots 1, 2, 3 and 4, Block 10.
v. Lots 1, 2, 3 and 5 (New), Block 11.
2. Ordering defendant to pay plaintiff, if the seventy-eight (78) excluded lots could not be
reconveyed, the fair market value of each of said lots.
3. Ordering the Registry of Deeds of Pasig City to cancel the land titles covering the excluded lots
in the name of defendant or any of its successors-in-interest including all derivative titles therefrom
and to issue new land titles in plaintiffs name.
4. Ordering the Registry of Deeds of Pasig City to cancel the Notices of Lis Pendens inscribed in
TCT No. PT-80342 under Entry No. PT-12267/T-23554; TCT No. 81812 under Entry No. PT12267/T-23554; and TCT No. PT-84913 under Entry No. PT-12267/T-23554.
5. Costs of suit.3
The petitioner elevated the case to the CA which rendered the assailed decision affirming that of the RTC.
The dispositive portion of the assailed decision reads:
WHEREFORE, premises considered, the herein appeal is DISMISSED for lack of merit. The Decision of
December 17, 1997 of Branch 71 of the Regional Trial Court of Pasig City is hereby AFFIRMED.4
The petitioner moved for a reconsideration of the aforesaid decision but the same was denied in the assailed
CA Resolution of September 5, 2002.
The petitioner now comes to this Court alleging that:
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT A) PETITIONER WAS
GUILTY OF BAD FAITH WHEN IN TRUTH AND IN FACT, THERE WAS NO SUFFICIENT GROUND TO
SUPPORT SUCH CONCLUSION; AND B) THERE WAS NO PRESCRIPTION IN THIS CASE. 5
In its petition, the petitioner maintains that it did not act in bad faith when it erroneously included in its
certificate of sale, and subsequently consolidated the titles in its name over the seventy-eight lots ("subject
lots") that were excluded from the foreclosure sale. There was no proof of bad faith nor could fraud or malice
be attributed to the petitioner when it erroneously caused the issuance of certificates of title over the subject
lots despite the fact that these were expressly excluded from the foreclosure sale.
The petitioner asserts that the action for reconveyance instituted by the respondent had already prescribed
after the lapse of ten years from November 25, 1975 when the petitioner consolidated its ownership over the
subject lots. According to the petitioner, an action for reconveyance based on implied or constructive trust
prescribes in ten years from the time of its creation or upon the alleged fraudulent registration of the
property. In this case, when the action was instituted on May 7, 1990, more than fourteen years had already
lapsed. Thus, the petitioner contends that the same was already barred by prescription as well as laches.
The petitioner likewise takes exception to the holding of the trial court and the CA that it (the petitioner) failed
to apprise or return to the Zuluetas, the respondents predecessors-in-interest, the seventy-eight lots

12

excluded from the foreclosure sale because the petitioner had no such obligation under the pertinent loan
and mortgage agreement.
The petitioners arguments fail to persuade.1awphi1.nt
At the outset, it bears emphasis that the jurisdiction of this Court in a petition for review on certiorari under
Rule 45 of the Rules of Court, as amended, is limited to reviewing only errors of law. This Court is not a trier
of facts. Case law has it that the findings of the trial court especially when affirmed by the CA are binding
and conclusive upon this Court. Although there are exceptions to the said rule, we find no reason to deviate
therefrom.6 By assailing the findings of facts of the trial court as affirmed by the CA, that it acted in bad faith,
the petitioner thereby raised questions of facts in its petition.
Nonetheless, even if we indulged the petition and delved into the factual issues, we find the petition barren
of merit.
That the petitioner acted in bad faith in consolidating ownership and causing the issuance of titles in its
name over the subject lots, notwithstanding that these were expressly excluded from the foreclosure sale
was the uniform ruling of the trial court and appellate court. As declared by the CA:
The acts of defendant-appellant GSIS in concealing from the Zuluetas [the respondents predecessors-ininterest] the existence of these lots, in failing to notify or apprise the spouses Zulueta about the excluded lots
from the time it consolidated its titles on their foreclosed properties in 1975, in failing to inform them when it
entered into a contract of sale of the foreclosed properties to Yorkstown Development Corporation in 1980
as well as when the said sale was revoked by then President Ferdinand E. Marcos during the same year
demonstrated a clear effort on its part to defraud the spouses Zulueta and appropriate for itself the subject
properties. Even if titles over the lots had been issued in the name of the defendant-appellant, still it could
not legally claim ownership and absolute dominion over them because indefeasibility of title under the
Torrens system does not attach to titles secured by fraud or misrepresentation. The fraud committed by
defendant-appellant in the form of concealment of the existence of said lots and failure to return the same to
the real owners after their exclusion from the foreclosure sale made defendant-appellant holders in bad faith.
It is well-settled that a holder in bad faith of a certificate of title is not entitled to the protection of the law for
the law cannot be used as a shield for fraud.7
The Court agrees with the findings and conclusion of the trial court and the CA. The petitioner is not an
ordinary mortgagee. It is a government financial institution and, like banks, is expected to exercise greater
care and prudence in its dealings, including those involving registered lands.8 The Courts ruling in Rural
Bank of Compostela v. CA9 is apropos:
Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private
individuals, for their business is one affected with public interest, keeping in trust money belonging to their
depositors, which they should guard against loss by not committing any act of negligence which amounts to
lack of good faith by which they would be denied the protective mantle of land registration statute, Act [No.]
496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same
character and description.10
Due diligence required of banks extend even to persons, or institutions like the petitioner, regularly engaged
in the business of lending money secured by real estate mortgages.11
In this case, the petitioner executed an affidavit in consolidating its ownership and causing the issuance of
titles in its name over the subject lots despite the fact that these were expressly excluded from the
foreclosure sale. By so doing, the petitioner acted in gross and evident bad faith. It cannot feign ignorance of
the fact that the subject lots were excluded from the sale at public auction. At the least, its act constituted
gross negligence amounting to bad faith. Further, as found by the CA, the petitioners acts of concealing
the existence of these lots, its failure to return them to the Zuluetas and even its attempt to sell them to a
third party is proof of the petitioners intent to defraud the Zuluetas and appropriate for itself the subject
lots.
On the issue of prescription, generally, an action for reconveyance of real property based on fraud
prescribes in four years from the discovery of fraud; such discovery is deemed to have taken place upon the

13

issuance of the certificate of title over the property. Registration of real property is a constructive notice to all
persons and, thus, the four-year period shall be counted therefrom.12 On the other hand, Article 1456 of the
Civil Code provides:
Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property comes.
An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged
fraudulent registration or date of issuance of the certificate of title over the property.13
The petitioners defense of prescription is untenable. As held by the CA, the general rule that the discovery
of fraud is deemed to have taken place upon the registration of real property because it is "considered a
constructive notice to all persons" does not apply in this case. The CA correctly cited the cases of Adille v.
Court of Appeals14 and Samonte v. Court of Appeals,15 where this Court reckoned the prescriptive period for
the filing of the action for reconveyance based on implied trust from the actual discovery of fraud.
In ruling that the action had not yet prescribed despite the fact that more than ten years had lapsed between
the date of registration and the institution of the action for reconveyance, the Court in Adille ratiocinated:
It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our
holding that the Torrens title does not furnish a shield for fraud. It is therefore no argument to say that the act
of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the longstanding rule that registration operates as a universal notice of title.
For the same reason, we cannot dismiss private respondents claims commenced in 1974 over the estate
registered in 1955. While actions to enforce a constructive trust prescribes in ten years, reckoned from the
date of the registration of the property, we, as we said, are not prepared to count the period from such a date
in this case. We note the petitioners sub rosa efforts to get hold of the property exclusively for himself
beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is
"the only heir and child of his mother Feliza with the consequence that he was able to secure title in his
name [alone]." Accordingly, we hold that the right of the private respondents commenced from the time they
actually discovered the petitioners act of defraudation. According to the respondent Court of Appeals, they
"came to know [of it] apparently only during the progress of the litigation." Hence, prescription is not a bar.16
The above ruling was reiterated in the more recent case of Samonte. In this case, as established by the CA,
the respondent actually discovered the fraudulent act of the petitioner only in 1989:
... [T]he prescriptive period of the action is to be reckoned from the time plaintiff-appellee (then Eduardo M.
Santiago) had actually discovered the fraudulent act of defendant-appellant which was, as borne out by the
records, only in 1989. Plaintiff-appellee Eduardo M. Santiago categorically testified (TSN of July 11, 1995,
pp. 14-15) that he came to know that there were 91 excluded lots in Antonio Village which were foreclosed
by the GSIS and included in its consolidation of ownership in 1975 when, in 1989, he and Antonio Vic
Zulueta discussed it and he was given by Zulueta a special power of attorney to represent him to recover the
subject properties from GSIS. The complaint for reconveyance was filed barely a year from the discovery of
the fraud.17
Following the Courts pronouncements in Adille and Samonte, the institution of the action for reconveyance
in the court a quo in 1990 was thus well within the prescriptive period. Having acted in bad faith in securing
titles over the subject lots, the petitioner is a holder in bad faith of certificates of title over the subject lots.
The petitioner is not entitled to the protection of the law for the law cannot be used as a shield for frauds.18
Contrary to its claim, the petitioner unarguably had the legal duty to return the subject lots to the Zuluetas.
The petitioners attempts to justify its omission by insisting that it had no such duty under the mortgage
contract is obviously clutching at straw. Article 22 of the Civil Code explicitly provides that "every person
who, through an act of performance by another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall return the same to him."

14

WHEREFORE, the petition is DENIED for lack of merit.1a\^/phi1.net The assailed Decision dated February
22, 2002 and Resolution dated September 5, 2002 of the Court of Appeals in CA-G.R. CV No. 62309 are
AFFIRMED IN TOTO. Costs against the petitioner.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.
Footnotes
1

Penned by Associate Justice Sergio L. Pestao with Associate Justices Conchita Carpio Morales
and Martin S. Villanueva, Jr. concurring.
2

CA Decision, pp. 3-5; Rollo, pp. 37-39.

Rollo, p. 36.

Id. at 44.

Id. at 21-22.

Baricuatro v. Court of Appeals, 325 SCRA 137 (2000).

Id. at 42. (Citations omitted).

Cruz v. Bancom Finance Corporation, 379 SCRA 490 (2002).

271 SCRA 76 (1997).

10

Id. at 88.

11

Adriano v. Pangilinan, 373 SCRA 544 (2002).

12

Philippine Economic Zone Authority v. Fernandez, 358 SCRA 489 (2001).

13

Ibid.

14

157 SCRA 455 (1988).

15

361 SCRA 173 (2001).

16

Supra.

17

Rollo, pp. 41-42.

18

See note 6.

[G.R. No. 122249. January 29, 2004]


REYNALDO, TELESFORO, REMEDIOS, ALFREDO and BELEN, all surnamed AGUIRRE, VICENTA,
HORACIO and FLORENCIO, all surnamed MAGTIBAY and LEONILA, CECILIA, ANTONIO, and
VENANCIO, all surnamed MEDRANO, and ZOSIMA QUIAMBAO, petitioners, vs. CA and ELIAS, JOSE,
ARSENIA and ROGELIO, all surnamed BALITAAN, and MARIA ROSALES, respondents.

15

DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the
Decision dated July 26, 1995 rendered by the Court of Appeals in CA-G.R. CV No. 42350 which set aside
the Decision dated April 28, 1992 of the Regional Trial Court of Batangas City (Branch 2) in Civil Case No.
202, and declared private respondents Heirs of Tiburcio Balitaan, as owners of the parcel of unregistered
land with an approximate area of 1,695 square meters, located at Aplaya, Bauan, Batangas.
The facts of the case are as follows:
In his lifetime, Leocadio Medrano was the owner and possessor of a parcel of residential land, situated in
Aplaya, Bauan, Batangas, containing an area of 2,611 square meters. The parcel of land was conjugal
property, having been acquired by Leocadio during his first marriage with one Emiliana Narito. Their union
begot four children, namely: (a) Gertrudes Medrano, now deceased, represented in this case by her
children, herein petitioners Telesforo, Reynaldo, Remedios, Alfredo, and Belen, all surnamed Aguirre; (b)
Isabel Medrano, likewise deceased, represented by her children, herein petitioners Vicenta, Horacio, and
Florencio, all surnamed Magtibay; (c) Placido Medrano, also deceased, represented by his only child, herein
petitioner Zosima Quiambao; and (d) Sixto Medrano.
After the death of his first wife, Leocadio contracted a second marriage with Miguela Cario. Their union
bore four children, herein co-petitioners, namely: Venancio, Leonila, Antonio and Cecilia, all surnamed
Medrano.
Upon the death of Leocadio on March 19, 1945, the surviving heirs agreed that Sixto should manage and
administer the subject property.
Sixto died on May 17, 1974. It was only after his death that petitioners heard rumors that Sixto had, in fact,
sold significant portions of the estate of Leocadio. It appears that on September 7, 1953, Sixto, without the
knowledge and consent of the petitioners, executed an Affidavit of Transfer of Real Property stating therein
that he was the only heir of Leocadio. Sixto declared that Leocadio died on September 16, 1949, instead of
the actual date of his death on March 19, 1945. With the use of said affidavit and a survey plan, Tax
Declaration No. 40105 in the name of Leocadio was cancelled and Tax Declaration No. 44984 was issued in
the name of Sixto. On August 29, 1957, Sixto sold to Maria Bacong a 160- square meter portion of the
subject land. On September 28, 1959, Sixto sold to Tiburcio Balitaan a 1,695 square meter portion of the
same land. Sometime in November 1967, Maria Bacong sold her property to Rosendo Bacong.
Petitioners demanded the reconveyance of the portions sold by Sixto but Tiburcio Balitaan, Maria Bacong
and Rosendo Bacong refused to do so. Hence, petitioners filed against them before the Regional Trial Court
of Batangas (Branch 2), a complaint for Declaration of Nullity of Documents, Partition, Malicious Prosecution
and Damages, docketed as Civil Case No. 202.
In their Answer, Maria Bacong and Rosendo Bacong contend that petitioners have no cause of action
because they acquired their property thru a valid deed of sale dated August 29, 1957, executed by Sixto
and, alternatively, petitioners cause of action, if any, was barred by prescription and laches.
In his Answer, Tiburcio Balitaan contends that petitioners have no cause of action since petitioners were
well-aware of the sale of the property to him by Sixto; and that he was an innocent purchaser for value, in
possession and enjoyment of the land in the concept of absolute owner, peacefully and publicly. He further
echoed the contention of Maria and Rosendo Bacong that any cause of action petitioners may have was
barred by prescription and laches.
Maria Bacong died during the pendency of the suit in the trial court and she was substituted by her surviving
heirs, namely, Lorenza, Elena, Felipa, Manuel, Marilou, Ricardo, Medel, Monchito and Milag, all surnamed
Medrano. Tiburcio Balitaan also died and was substituted by his heirs, herein private respondents, namely:
his wife, Maria Rosales and their four children: Elias, Jose, Arsenia and Rogelio, all surnamed Balitaan.

16

On July 28, 1989, petitioners and Rosendo Bacong, for himself and as attorney-in-fact of the heirs of Maria
Bacong, entered into a compromise agreement to settle the case between them. The compromise
agreement, as approved by the trial court, provided that Rosendo Bacong and the heirs of Maria Bacong
agreed to pay P30,000.00 to petitioners in recognition of petitioners ownership of a 269-square meter
portion and in consideration of which, petitioners recognized the full ownership, rights, interest and
participation of the former over said land. The area of the subject land is thus reduced to 2,342 square
meters (2,611 square meters minus 269 square meters).
After trial on the merits, the trial court rendered judgment dated April 28, 1992, ruling that private
respondents did not dispute, by any evidence, the falsity of the Affidavit of Transfer, as well as the fact that
Sixto had co-owners to the property. It found that private respondents affirmative defense of laches and/or
prescription are unavailing against a property held in co-ownership as long as the state of co-ownership is
recognized. Consequently, the trial court upheld the sale made by Sixto in favor of private respondents only
to the extent that Sixto is entitled to by virtue of his being a co-owner.
In determining the area that Sixto could have validly sold to private respondents, the trial court, in its
decision, provided for the manner of partition among the parties, based on the memorandum submitted by
petitioners, thus:
For the four (4) children of the first marriage, namely:
(1)

Gertrudes, who is already dead represented by her children Tefesforo, Reynaldo, Remedios,
Alfredo and Belen, all surnamed Aguirre 399.42 square meters;

(2)

Isabel Medrano, who is already dead, represented by the plaintiffs, her children Vicenta,
Horacio and Florencio, all surnamed Magtibay 399.42 square meters;

(3)

Placido Medrano (dead), represented by his only child Zosima Medrano 399.42 square
meters; and

(4)

Sixto Medrano 399.42 square meters only which he had the right to dispose of in favor of
Tiburcio Balitaan and Maria Rosales.

The above consist of undivided interest, shares and participations from the inheritance or succession to the
conjugal estate of Leocadio Medrano and Emiliana Narito.
For the children of the second marriage their shares in the inheritance from the property of Leocadio
Medrano are as follows:
(1)

To Venancio Medrano

138.32 square meters

(2)

To Leonila Medrano

138.32 square meters

(3)

To Antonio Medrano

138.32 square meters

(4)

To Cecilia Medrano

138.32 square meters

with all the above consisting of undivided shares, interest and participation in the estate.
For the defendants Maria Rosales, surviving spouse of the deceased Tiburcio Balitaan and their Children, an
area of 399.42 square meters, the only area and extent which Sixto Medrano could have legally dispensed
of in their favor.
Thus, the dispositive portion of the trial courts decision reads as follows:

17

WHEREFORE, in view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the
defendants, to wit:
(a)

Ordering the partition of the property in question among the plaintiffs and the defendants; and

(b) Ordering the parties, plaintiffs and defendants, to make a partition among themselves by proper
instruments of conveyance and to submit before this Court a project of partition should the parties be able to
agree for the confirmation of the Court within two (2) months upon receipt of this decision, otherwise this
Court will be constrained to appoint commissioners to make the partition in accordance with law.
All other claims not having been duly proved are ordered dismissed.
SO ORDERED.
Aggrieved, private respondents appealed to the Court of Appeals.
On July 26, 1995, the appellate court rendered judgment recognizing the validity of the sale only with
respect to the undivided share of Sixto Medrano as co-owner; but nonetheless, declaring respondents as
absolute owners of 1,695 square meters of the subject property, reasoning that:
. . . Defendants-appellees have been in possession, in the concept of owner, of the entire parcel of land sold
to Tiburcio Balitaan by Sixto Medrano for more than ten years, seventeen years to be exact (1958-1975).
Relying on the affidavit of transfer (Exhibit B) the tax declaration (Exhibit C) and the survey plan (Exhibit
D) shown to him by Sixto Medrano which indicate the latter as owner of the property in dispute, Tiburcio
Balitaan believed transfer to him was effected. (TSN, April 17, 1991, pp. 14-17) and thus, entered the
property as owner (Ibid. at p. 13) Tiburcio Balitaan, believing himself as the lawful transferee, in addition,
caused Tax Declaration No. 51038 to be issued in his name (Exhibits 6, 6-A, 6-B, and 6-C). Thus,
although the sale of the co-owned property is only valid as to the undivided share of Sixto Medrano,
defendants, by virtue of their open, adverse and uninterrupted possession from 1958 (Exhibit G) to 1975,
obtained title to the entire property and not just Sixtos undivided share. This is pursuant to Article 1134
(1957a) of the New Civil Code which provides that:
Ownership and other real rights over immovable property are acquired by ordinary prescription through
possession of ten years.
...
Plaintiffs did not at all inquire as to the status of their property all this time and thus have been remiss of their
duties as owners of the property. Plaintiffs waited until Sixtos death to learn more about their property.
Even though the co-ownership is to be preserved in accordance with the wishes of the deceased, the
plaintiffs should have taken it upon themselves to look into the status of the property once in a while, to
assure themselves that it is managed well and that they are receiving what is due them as co-owners of the
parcel of land or to at least manifest their continued interest in the property as normal owners would do. But
the plaintiffs did not show any interest in the way Sixto Medrano was managing the property which in effect
gave the latter carte blanche powers over the same. Such passivity is aggravated by the fact that one of the
plaintiffs resides a mere 600 meters away from the disputed property (TSN, April 17, 1991, p. 13). By not
showing any interest, the plaintiffs have, in fact, slept on their rights and thus, cannot now exercise a stale
right.
Petitioners sought reconsideration but the appellate court denied it in a Resolution dated October 5, 1995.
In their present recourse, petitioners take exception from the appellate courts findings that respondents
have been in possession, in the concept of owner of the entire parcel of land sold to Tiburcio Balitaan by
Sixto Medrano for seventeen years (1958-1975), relying on the Affidavit of Transfer and Tax Declaration No.
51038 in the name of Sixto; and that Tiburcio acquired ownership of the whole property from Sixto through
ordinary prescription for ten years.

18

Petitioners submit that Tiburcio Balitaan was not a purchaser in good faith and for value since there are
enough circumstances which should have put him on guard and prompted him to be more circumspect and
inquire further about the true status of Sixto Medranos ownership; that during his lifetime, Tiburcio was a
neighbor of petitioners and was well-aware that Sixto had other siblings but Tiburcio chose to rely on the
Affidavit of Transfer executed by Sixto Medrano declaring that he was the only heir of Leocadio; that the
Court of Appeals should not have faulted them for failing to inquire about the status of the disputed property
until after the death of Sixto Medrano; that they are not guilty of laches.
It is settled that in the exercise of the Supreme Courts power of review, the findings of facts of the Court of
Appeals are conclusive and binding on the Supreme Court. The exceptions to this rule are: (1) when the
findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is 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 in
making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court;
(8) when the findings 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
respondent; (10) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.
Exceptions (4), (7), (10) and (11) are present in the instant case.
We find the petition meritorious. We agree with the petitioners that the Court of Appeals committed a
reversible error in upholding the claim of petitioners that they acquired ownership of the subject property
through prescription.
Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary acquisitive prescription
requires possession of things in good faith and with just title for the time fixed by law; without good faith and
just title, acquisitive prescription can only be extraordinary in character. Regarding real or immovable
property, ordinary acquisitive prescription requires a period of possession of ten years, while extraordinary
acquisitive prescription requires an uninterrupted adverse possession of thirty years.
Ordinary acquisitive prescription demands that possession be in good faith, which consists in the
reasonable belief that the person from whom the thing is received has been the owner thereof and could
thereby transmit that ownership. There is just title when the adverse claimant comes into possession of the
property through any of the modes recognized by law for the acquisition of ownership or other real rights, but
that the grantor is neither the owner nor in a position to transmit the right.
Article 1130 of the Civil Code states that the title for prescription must be true and valid. In Doliendo vs.
Biarnesa, we elucidated on this provision, thus:
We think that this contention is based on a misconception of the scope and effect of the provisions of this
article of the Code in its application to ordinary prescription. It is evident that by a titulo verdadero y
valido in this connection we are not to understand a titulo que por si solo tiene fuerza de transferir el
dominio sin necesidad de la prescricion (a title which of itself is sufficient to transfer the ownership without
the necessity of the lapse of the prescription period); and we accept the opinion of a learned Spanish law
writer who holds that the titulo verdadero y valido as used in this article of the code prescribes a titulo
Colorado and not merely putativo; a titulo Colorado being one which a person has when he buys a
thing, in good faith, from one whom he believes to be the owner, and a titulo putativo being one which is
supposed to have preceded the acquisition of a thing, although in fact it did not, as might happen when one
is in possession of a thing in the belief that it had been bequeathed to him. (Viso Derecho Civil, Parte
Segunda, p. 541)
The requirements for ordinary acquisitive prescription as hereinabove described have not been met in this
case.
It must be remembered that the burden of proving the status of a purchaser in good faith lies upon him who
asserts that status. It is not sufficient to invoke the ordinary presumption of good faith, that is, that everyone

19

is presumed to have acted in good faith, since the good faith that is here essential is integral with the very
status that must be established.
After a careful examination of the records, we find that private respondents failed to discharge the burden of
proof that Tiburcio Balitaan was a purchaser in good faith. It is undisputed that Tiburcio practically lived his
entire lifetime in the area where the property in dispute is located and had been a neighbor of petitioners.
He knew that Sixto Medrano had other siblings because his son, Dr. Elias Balitaan, is the godson by baptism
of spouses Jose Aguirre and Gertrudes Medrano, the latter being a deceased sister of Sixto. Thus, Tiburcio
was not a complete stranger to the Medrano clan. Yet, he deliberately chose to close his eyes to said facts
and despite his personal knowledge to the contrary, he purchased the disputed property from Sixto on the
basis of the misrepresentation of the latter in his Affidavit of Transfer that he is the sole surviving heir of
Leocadio. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.
Since the disputed property is an unregistered land, Tiburcio as buyer thereof did so at his peril. Private
respondents claim that Tiburcio bought the land in good faith, that is, without notice that some other person
has a right to or interest in the property, would not protect them if it turns out, as it actually did in this case,
that the seller, Sixto Medrano, did not own the entire property at the time of the sale, but only an undivided
portion of the land as a co-owner. Private respondents failed to show that the petitioners were notified of the
subject sale or that respondents gave their consent to the sale. Not being in good faith, the ten-year period
required for ordinary acquisitive prescription does not apply.
Even the thirty-year period under extraordinary acquisitive prescription has not been met in this case.
Private respondents claim to have been in possession, in the concept of owner, of the entire parcel of land
sold to Tiburcio Balitaan by Sixto Medrano for only seventeen years (1958-1975).
In addition, as we have enunciated in Salvador vs. Court of Appeals, to wit:
This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as
adverse to the other co-owners but in fact as beneficial to all of them. Acts which may be considered
adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent
possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings
and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of
exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of
possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.
Thus, in order that a co-owners possession may be deemed adverse to the cestui que trust or the other coowners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation
amounting to an ouster of the cestui que trust or the other co-owners; (2) that such positive acts of
repudiation have been made known to the cestui que trust or the other co-owners; and (3) that the evidence
thereon must be clear and convincing. (Emphasis supplied)
Tested against these guidelines, respondents failed to present competent evidence that the acts of Sixto
adversely and clearly repudiated the existing co-ownership among the heirs of Leocadio Medrano.
Private respondents reliance on the tax declaration in the name of Sixto Medrano is unworthy of credit since
we have held on several occasions that tax declarations by themselves do not conclusively prove title to
land. Further, private respondents failed to show that the Affidavit executed by Sixto to the effect that he is
the sole owner of the subject property was known or made known to the other co-heirs of Leocadio
Medrano.
Neither can we subscribe to the appellate courts view that petitioners are guilty of laches. Laches is the
negligence or omission to assert a right within a reasonable time, warranting a presumption that the party
entitled to assert it has abandoned it or declined to assert it. It does not involve mere lapse or passage of
time, but is principally an impediment to the assertion or enforcement of a right, which has become under
the circumstances inequitable or unfair to permit. The rule that each co-owner may demand at any time the
partition of the common property implies that an action to demand partition is imprescriptible or cannot be
barred by laches.

20

We have consistently held that if a co-owner sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to the sale. Article 493 of the Civil Code
provides:
Art. 493. Each co-owner shall have the full ownership of his part and the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership.
It clearly provides that the sale or other disposition affects only the sellers share pro indiviso, and the
transferee gets only what corresponds to his grantors share in the partition of the property owned in
common. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one coowner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller
are transferred, thereby making the buyer a co-owner of the property. Accordingly, we held in Bailon-Casilao
vs. Court of Appeals:
From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of
the entire property by one-co-owner without the consent of the other co-owners is not null and void.
However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the
property.
The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of
the thing owned in common from the third person who substituted the co-owner or co-owners who alienated
their shares, but the DIVISION of the common property as if it continued to remain in the possession of the
co-owners who possessed and administered it [Mainit v. Bandoy, supra].
Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not
secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the coowners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of
possession nor restitution can be granted since the defendant buyers are legitimate proprietors and
possessors in joint ownership of the common property claimed [Ramirez v. Bautista, supra].
It is clear therefore that the deed of sale executed by Sixto Medrano in favor of Tiburcio Balitaan is a valid
conveyance only insofar as the share of Sixto Medrano in the co-ownership is concerned. Thus, the
respondent court erred in declaring the ownership of the entire 1,695-square meter property sold by Sixto, in
favor of the private respondents.
The next question is what is the area of the pro indiviso share pertaining to Sixto Medrano that was sold to
private respondents? The trial court endeavored to determine the same by ascertaining the inheritance of
each of the heirs of Leocadio. However, the manner of partition as set out by the trial court in the text of its
decision needs to be amended so as to conform to the laws on intestate succession under the Old Civil
Code absent any allegation or showing that Leocadio left any last will and testament.
It is not disputed that the 2,342-square meter property was a conjugal property of Leocadio and Emiliana.
Upon the death of Emiliana, which occurred many years before the death of Leocadio in 1945, both deaths
occurring before the enactment of the New Civil Code in 1950, all the four children of the first marriage and
the four children of the second marriage shall share equally. The subject property should have been divided
into eight equal parts, pursuant to Articles 921 and 931 of the old Civil Code, or 292.75 square meters each.
The respective heirs of the now deceased children of Leocadio inherit by way of representation the
respective shares of their respective parents, pursuant to Articles 933 and 934 of the Old Civil Code.
At the time of death of Leocadio in 1945, Miguela was entitled only to the usufruct of the land pursuant to
Article 834 of the Old Civil Code, which provides that [i]f only one legitimate child or descendant survives,
the widower or widow shall have the usufruct of the third available for betterment, such child or descendant
to have the naked ownership until, on the death of the surviving spouse, the whole title is merged in him.
Thus, to recapitulate, each of the heirs of Leocadio should inherit 292.75 square meters, pro-indiviso (2,342
square meters 8 = 292.75 square meters) after deducting from the original 2,611 square meters of the

21

subject property the 269 square meters ceded to the heirs of Maria Bacong in a compromise agreement
among the petitioners and the heirs of Maria Bacong. The deceased children of Leocadio are represented
by their respective heirs by right of representation under Articles 933 and 934 of the Old Civil Code.
Accordingly, the undivided shares of Leocadios eight children or their heirs by right of representation, upon
the death of Leocadio in 1945 are as follows:
(1)

Venancio Medrano

292.75 square meters

(2)

Leonila Medrano

292.75 square meters

(3)

Antonio Medrano

292.75 square meters

(4)

Cecilia Medrano

292.75 square meters

(5) Heirs of Gertrudes M. Aguirre, Telesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed
Aguirre292.75 square meters
(6) Heirs of Isabel M. Magtibay, Vicenta, Horacio and Florencio, all surnamed Magtibay
square meters
(7) Heirs of Placido Medrano, plaintiff Zosima Medrano Quimbao
square meters
(8)

Sixto Medrano

292.75

292.75

292.75 square meters

During the pendency of the case in the trial court but after the death of Sixto, petitioners sold 460 square
meters to one Mateo Castillo. Consequently, the 460 square meters should be charged against the shares
of petitioners only and should not affect the 292.75 square meters undivided share of Sixto Medrano which
he had sold in 1959. Accordingly, 460 square meters divided by 7 equals 65.71 square meters. Deducting
said area from 292.75 square meters, the final undivided share of each of the seven heirs of Leocadio
should be 227.04 square meters (292.75 - 65.71 = 227.04) and that pertaining to Sixto in 292.75 square
meters.
Thus, the manner of partition set forth by the trial court in its decision should be amended, as follows:
(1) Gertrudes M. Aguirre, deceased, represented by her children, herein petitioners Telesforo, Reynaldo,
Remedios, Alfredo and Belen, all surnamed Aguirre
227.04 square meters
(2) Isabel M. Magtibay, deceased, represented by her children, herein petitioners Vicenta, Horacio and
Florencio, all surnamed Magtibay
227.04
square meters
(3)
-

Placido Medrano, deceased, represented by his only child, Placido Medrano


227.04 square meters

(4) Private respondents Maria Rosales and heirs of Tiburcio Balitaan, namely: Elias, Jose, Arsenia and
Rogelio all surnamed Balitaan (in lieu of Sixto Medrano)
292.75
square meters
(5)

Venancio Medrano

227.04 square meters

(6)

Leonila Medrano

227.04 square meters

22

(7)

Antonio Medrano

227.04 square meters

(8)

Cecilia Medrano

227.04 square meters

(9)

Rosendo Bacong

269 square meters

460 square meters

(10) Mateo Castillo

WHEREFORE, we GRANT the petition. The assailed decision of the Court of Appeals in CA-G.R. CV No.
42350, dated July 26, 1995, is REVERSED and SET ASIDE. The decision of the Regional Trial Court is
REINSTATED with the following MODIFICATIONS:
The sale in favor of private respondents is declared VALID but only insofar as the 292.75 square meters
undivided share of Sixto Medrano in the subject property is concerned.
Let the parcel of land, located at Aplaya, Bauan, Batangas, consisting of 2,611 square meters, be partitioned
and distributed as determined by the Court in the text of herein decision. Accordingly, let the records of the
case be remanded to the Regional Trial Court of Batangas City (Branch 2) in Civil Case No. 202 for further
appropriate proceedings under Rule 69 of the Rules of Court.
No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), Quisumbing, Callejo Sr. and Tinga, JJ., concur.
Penned by Justice Jorge S. Imperial (now deceased) and concurred in by Justice Pacita Caizares-Nye
(now deceased) and Justice Romeo J. Callejo, Sr. (now Associate Justice of the Supreme Court), Rollo, pp.
32-46.
Penned by Judge Ireneo V. Mendoza.
Entitled, Reynaldo, Telesforo, Remedios, Alfredo and Belen all surnamed Aguirre, Vicenta, Horacio and
Florencio all surnamed Magtibay, Leonila, Cecilia, Antonio and Venancio all surnamed Medrano and Zosima
Quiambao vs. Tiburcio Balitaan, Maria Bacong and Rosendo Bacong
1,791 square meters of which was declared in Tax Declaration No. 40105 while 820 square meters
remained undeclared for taxation purposes until 1953 in Tax Declaration No. 44984 issued in the name of
Sixto Medrano; Original Records, pp. 8,10.
Id., p. 9.
Id., p. 11.
Id., p. 10.
Id., p. 16.
Id., pp. 14-15.
Id., p. 18.
Entitled Reynaldo, Telesforo, Remedios, Alfredo and Belen all surnamed Aguirre, Vicenta, Horacio and
Florencio all surnamed Magtibay, Leonila, Cecilia, Antonio and Venancio all surnamed Medrano and Zosima
Quiambao vs. Tiburcio Balitaan, Maria Bacong and Rosendo Bacong, Id., p. 1.

23

Id., p. 28-29.
Id., p. 32.
Id., p. 102.
Id., p. 254.
Id., p. 338.
Id., p. 520.
Id., p. 339.
Rollo, pp. 66-74.
Id., pp. 72-73.
Id., pp. 73-74.
Id., pp. 75-120. Private respondents initially filed a Notice of Appeal with the trial court which the latter
denied on the ground that the decision promulgated on April 28, 1992 is not yet final and executory
considering that there are still many things to be done. On petition for mandamus with the Court of Appeals
(CA-G.R. SP No. 30446), the Court of Appeals granted the petition and directed the trial court to give due
course to private respondents appeal. (Court of Appeals Rollo, pp. 89)
Rollo, pp. 40-42.
Id., pp. 47-65.
Id., p. 30.
Pestao vs. Sumayang, 346 SCRA 870, 878 (2000); Baas, Jr. vs. Court of Appeals, 325 SCRA 259, 271
(2000); Borromeo vs. Sun, 317 SCRA 176, 182 (1999); Lagrosa vs. Court of Appeals, 312 SCRA 298, 310
(1999); Security Bank and Trust Company vs. Triumph Lumber and Construction Corporation, 301 SCRA
537, 548 (1999).
Langkaan Realty Development, Inc. vs. United Coconut Planters Bank, 347 SCRA 542, 549 (2000); Nokom
vs. National Labor Relations Commission, 336 SCRA 97, 110 (2000); Commissioner of Internal Revenue vs.
Embroidery and Garments Industries (Phil.), Inc., 305 SCRA 70, 74 (1999); Sta. Maria vs. Court of Appeals,
285 SCRA 351, 357 (1998).
Original Records of Civil Case No. 42350 were received by the Court only on September 4, 2003.
Article 1117, Civil Code.
Article 1134, Civil Code.
Article 1137, Civil Code.
Article 1127, Civil Code.
Article 1129, Civil Code.

24

7 Phil. 232 (1906).


Id., p. 234.
Embrado vs. Court of Appeals, 233 SCRA 335, 344 (1994).
Development Bank of the Philippines vs. Court of Appeals, 331 SCRA 267, 290 (2000); Lucena vs. Court of
Appeals, 313 SCRA 47, 57 (1999).
243 SCRA 239 (1995).
Id., p. 251
Hemedes vs. Court of Appeals, 316 SCRA 347, 370 (1999); Heirs of Leopoldo Vencilao, Sr. vs. Court of
Appeals, 288 SCRA 574, 581 (1998); Titong vs. Court of Appeals (4th Division), 287 SCRA 102, 115 (1998).
Ignacio vs. Basilio, 366 SCRA 15, 23 (2001); Lim Tay vs. Court of Appeals, 293 SCRA 634, 659 (1998).
Philippine Bank of Communications vs. Court of Appeals, 289 SCRA 178, 186 (1998).
Deiparine vs. Court of Appeals, 299 SCRA 668, 679 (1998); Sandoval vs. Court of Appeals, 243 SCRA 239,
250 (1995).
Tomas Claudio Memorial College, Inc. vs. Court of Appeals, 316 SCRA 502, 509 (1999); Bailon-Casilao vs.
Court of Appeals, 160 SCRA 738, 746 (1988).
Fernandez vs. Fernandez, 363 SCRA 811, 829 (2001).
Supra, Note 44 at p. 745.
Art. 921. In every inheritance the relative nearest in degree excludes the one more remote, except in cases
in which the right of representation exists.
Relatives in the same degree shall inherit in equal portions, subject to the provisions of Article 949 with
respect to relationship by the whole blood.
Art. 931. Legitimate children and their descendants succeed the parents and other ascendants, without
distinction of sex or age, even though they spring from different marriages.
Art. 933. The grandchildren and other descendants shall inherit by right or representation, and if any one of
them should have died, leaving several heirs, the portion pertaining to him shall be divided among the latter
in equal portions.
Art. 934. Should children and descendants of other deceased children survive, the former shall inherit in
their own right, and the latter by right of representation.
NOW ART. 996 of the New Civil Code. [a widow or widower and legitimate children or descendants are left,
the surviving spouse has in the succession the same share as that of each of the children].
Rollo, pp. 523,524.
G.R. No. 155080

February 5, 2004

25

SOLEDAD CALICDAN, represented by her guardian GUADALUPE CASTILLO, petitioner


vs.
SILVERiO CENDAA, substituted by his legal heir CELSA CENDAA-ALARAS, respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks the reversal of the April 4, 2002 decision of the Court of Appeals in CA-G.R.
CV No. 67266,1 which set aside the November 12, 1996 decision of the Regional Trial Court of Dagupan
City, Branch 44 in Civil Case No. D-10270.2
The instant controversy involves a 760 square meter parcel of unregistered land located in Poblacion,
Mangaldan, Pangasinan. The land was formerly owned by Sixto Calicdan, who died intestate on November
4, 1941. He was survived by his wife, Fermina, and three children, namely, petitioner Soledad, Jose and
Benigno, all surnamed Calicdan.3
On August 25, 1947, Fermina executed a deed of donation inter vivos whereby she conveyed the land to
respondent Silverio Cendaa,4 who immediately entered into possession of the land, built a fence around
the land and constructed a two-storey residential house thereon sometime in 1949, where he resided until
his death in 1998.5
On June 29, 1992, petitioner, through her legal guardian Guadalupe Castillo, filed a complaint for "Recovery
of Ownership, Possession and Damages" against the respondent, alleging that the donation was void; that
respondent took advantage of her incompetence in acquiring the land; and that she merely tolerated
respondents possession of the land as well as the construction of his house thereon.6
In his "Answer with Motion to Dismiss", respondent alleged, by way of affirmative defenses, that the land
was donated to him by Fermina in 1947; and that he had been publicly, peacefully, continuously, and
adversely in possession of the land for a period of 45 years. Moreover, he argued that the complaint was
barred by prior judgment in the special proceedings for the "Inventory of Properties of Incompetent Soledad
Calicdan", where the court decreed the exclusion of the land from the inventory of properties of the
petitioner.7
On November 12, 1996, the trial court rendered a decision in favor of the petitioner, the dispositive portion of
which reads as follows:
WHEREFORE, judgment is rendered in favor of plaintiff and against the defendant as follows:
1. Ordering defendant Silverio Cendaa to vacate the land in question and surrender ownership
and possession of the same to plaintiff; and
2. Ordering defendant to pay plaintiff P20,000.00 as moral damages, P20,000.00 as exemplary
damages, P10,000.00 by way of attorneys fees and other litigation expenses, plus cost of suit.
SO ORDERED.8
On appeal by the respondent, the Court of Appeals reversed the trial courts decision and declared that the
donation was valid. Furthermore, it held that petitioner lost her ownership of the property by prescription.
Hence, the instant petition for review on the following issues:
(1) whether or not the donation inter vivos is valid; and
(2) whether or not petitioner lost ownership of the land by prescription.

26

As a rule, our jurisdiction in cases brought from the Court of Appeals is limited to the review and revision of
errors of law allegedly committed by the appellate court. This is because its findings of fact are deemed
conclusive and we are not duty-bound to analyze and weigh all over again the evidence already considered
in the proceedings below.9
The rule, however, admits of the following exceptions:
(1) when the findings are grounded on speculation, surmises or conjectures;
(2) when the inference made is manifestly mistaken, absurd or impossible;
(3) when there is grave abuse of discretion in the appreciation of facts;
(4) when the factual findings of the trial and appellate courts are conflicting;
(5) when the Court of Appeals, in making its findings, has gone beyond the issues of the case and
such findings are contrary to the admissions of both appellant and appellee;
(6) when the judgment of the appellate court is premised on a misapprehension of facts or when it
has failed to consider certain relevant facts which, if properly taken into account, will justify a
different conclusion;
(7) when the findings of fact are conclusions without citation of specific evidence upon which they
are based; and
(8) when findings of fact of the Court of Appeals are premised on the absence of evidence but are
contradicted by the evidence on record.10
In the case at bar, the factual findings of the trial court and the Court of Appeals are conflicting; thus, we are
constrained to review the findings of facts.
The trial court found the donation of the land void because Fermina was not the owner thereof, considering
that it was inherited by Sixto from his parents. Thus, the land was not part of the conjugal property of the
spouses Sixto and Fermina Calicdan, because under the Spanish Civil Code, the law applicable when Sixto
died in 1941, the surviving spouse had a right of usufruct only over the estate of the deceased spouse.
Consequently, respondent, who derived his rights from Fermina, only acquired the right of usufruct as it was
the only right which the latter could convey.
After a review of the evidence on record, we find that the Court of Appeals ruling that the donation was
valid was not supported by convincing proof. Respondent himself admitted during the cross examination that
he had no personal knowledge of whether Sixto Calicdan in fact purchased the subject land from Felomino
Bautista. Pertinent portions of his testimony read:
Q. And Sixto Calicdan inherited this property from his parents?
A. No, sir.
Q. What do you mean by no?
A. To my knowledge and information, Sixto Calicdan bought the property from his cousin, I think
Flaviano or Felomino Bautista.
Q. So, in other words, you have no personal knowledge about how Sixto Calicdan acquired this
property?
A. I think it was by purchase.

27

Q. According to information, so you have no actual personal knowledge how Sixto Calicadan
acquired this property?
A. Yes, because when the property was bought by my uncle, I was not yet born, so information
only.
Q. So when you were born, you came to know already that Sixto Calicdan is the owner of this
property?
A. Yes, thru the son of Felomino Bautista who is now, I think, in Baguio.
Q. You have not seen any document to show that Sixto Calicdan purchased the property from one
Felomino Bautista?
A. None, sir.11
In People v. Guittap,12 we held that:
Under Rule 130, Section 36 of the Rules of Court, a witness can testify only to those facts which he knows
of his own personal knowledge, i.e., which are derived from his own perception; otherwise, such testimony
would be hearsay. Hearsay evidence is defined as "evidence not of what the witness knows himself but of
what he has heard from others." The hearsay rule bars the testimony of a witness who merely recites what
someone else has told him, whether orally or in writing. In Sanvicente v. People, we held that when evidence
is based on what was supposedly told the witness, the same is without any evidentiary weight for being
patently hearsay. Familiar and fundamental is the rule that hearsay testimony is inadmissible as evidence.
The Court of Appeals thus erred in ruling based on respondents bare hearsay testimony as evidence of
the donation made by Fermina.
Notwithstanding the invalidity of the donation, we find that respondent has become the rightful owner of the
land by extraordinary acquisitive prescription.
Prescription is another mode of acquiring ownership and other real rights over immovable property. It is
concerned with lapse of time in the manner and under conditions laid down by law, namely, that the
possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Acquisitive
prescription is either ordinary or extraordinary. Ordinary acquisitive prescription requires possession in good
faith and with just title for ten years. In extraordinary prescription ownership and other real rights over
immovable property are acquired through uninterrupted adverse possession thereof for thirty years without
need of title or of good faith.13
The good faith of the possessor consists in the reasonable belief that the person from whom he received the
thing was the owner thereof, and could transmit his ownership.14 For purposes of prescription, there is just
title when the adverse claimant came into possession of the property through one of the modes recognized
by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not
transmit any right.15
Assuming arguendo that ordinary acquisitive prescription is unavailing in the case at bar as it demands that
the possession be "in good faith and with just title,"16 and there is no evidence on record to prove
respondents "good faith", nevertheless, his adverse possession of the land for more than 45 years aptly
shows that he has met the requirements for extraordinary acquisitive prescription to set in.
The records show that the subject land is an unregistered land. When the petitioner filed the instant case on
June 29, 1992, respondent was in possession of the land for 45 years counted from the time of the donation
in 1947. This is more than the required 30 years of uninterrupted adverse possession without just title and
good faith. Such possession was public, adverse and in the concept of an owner. Respondent fenced the
land and built his house in 1949, with the help of Guadalupes father as his contractor. His act of cultivating
and reaping the fruits of the land was manifest and visible to all. He declared the land for taxation purposes
and religiously paid the realty taxes thereon.17 Together with his actual possession of the land, these tax

28

declarations constitute strong evidence of ownership of the land occupied by him. As we said in the case of
Heirs of Simplicio Santiago v. Heirs of Mariano Santiago:18
Although tax declarations or realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner, for no one in his right mind would
be paying taxes for a property that is not in his actual or constructive possession. They constitute at least
proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for
taxation purposes manifests not only ones sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other interested parties, but also the intention to
contribute needed revenues to the Government. Such an act strengthens ones bona fide claim of
acquisition of ownership.
Moreover, the deed of donation inter vivos, albeit void for having been executed by one who was not the
owner of the property donated, may still be used to show the exclusive and adverse character of
respondents possession. Thus, in Heirs of Segunda Maningding v. Court of Appeals,19 we held:
Even assuming that the donation propter nuptias is void for failure to comply with formal requisites, it could
still constitute a legal basis for adverse possession. With clear and convincing evidence of possession, a
private document of donation may serve as basis for a claim of ownership. In Pensader v. Pensader we
ruled that while the verbal donation under which the defendant and his predecessors-in-interest have been
in possession of the lands in question is not effective as a transfer of title, still it is a circumstance which may
explain the adverse and exclusive character of the possession. (Underscoring ours)
In sum, the Court of Appeals correctly ordered the dismissal of Civil Case No. D-10270 before the Regional
Trial Court of Dagupan City, Branch 44, and declared respondent the rightful owner of the subject property,
not on the basis of the Deed of Donation Inter Vivos, which is hereby declared void, but on extraordinary
acquisitive prescription.
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated
April 4, 2002 in CA-G.R. CV No. 67266, which ordered the dismissal of Civil Case No. D-10270 before the
Regional Trial Court of Dagupan City, Branch 44, is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, and Carpio, JJ., concur.
Azcuna, J., on official leave.
Footnotes
1

Rollo, p. 26; penned by Associate Justice Wenceslao I. Agnir, and concurred in by Associate
Justices B.A. Adefuin-De la Cruz and Josefina Guevara-Salonga.
2

Rollo, p. 95.

TSN, August 13, 1993, pp. 4-7.

Records, p. 88.

TSN, January 17, 1994, pp. 6-11.

Rollo, pp. 40-41.

Id., pp. 44-50.

Id., p. 102.

29

Tugade v. Court of Appeals, G.R. No. 120874, 31 July 2003.

10

China Airlines, LTD. v. Court of Appeals, G.R. No. 129988, 14 July 2003.

11

TSN, January 26, 1994, pp. 3-4.

12

G.R. No. 144621, 9 May 2003.

13

Gesmundo v. Court of Appeals, 378 Phil. 1099, 1107 [1999].

14

Article 1127, New Civil Code.

15

Article 1129, New Civil Code.

16

Marcelo v. Court of Appeals, 365 Phil. 354, 362 [1999].

17

TSN, January 17, 1994, pp. 4-12.

18

G.R. No. 151440, 17 June 2003.

19

342 Phil. 567, 574-575 [1997].

G.R. No. 144057

January 17, 2005

RP, petitioner, vs. THE HONORABLE CA and CORAZON NAGUIT, respondents.


DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to
review the Decision1 of the Sixth Division of the Court of Appeals dated July 12, 2000 in CA-G.R. SP No.
51921. The appellate court affirmed the decisions of both the Regional Trial Court (RTC),2 Branch 8, of
Kalibo, Aklan dated February 26, 1999, and the 7th Municipal Circuit Trial Court (MCTC)3 of Ibajay-Nabas,
Aklan dated February 18, 1998, which granted the application for registration of a parcel of land of Corazon
Naguit (Naguit), the respondent herein.
The facts are as follows:
On January 5, 1993, Naguit, a Filipino citizen, of legal age and married to Manolito S. Naguit, filed with the
MCTC of Ibajay-Nabas, Aklan, a petition for registration of title of a parcel of land situated in Brgy. Union,
Nabas, Aklan. The parcel of land is designated as Lot No. 10049, Cad. 758-D, Nabas Cadastre, AP
060414-014779, and contains an area of 31,374 square meters. The application seeks judicial confirmation
of respondents imperfect title over the aforesaid land.
On February 20, 1995, the court held initial hearing on the application. The public prosecutor, appearing for
the government, and Jose Angeles, representing the heirs of Rustico Angeles, opposed the petition. On a
later date, however, the heirs of Rustico Angeles filed a formal opposition to the petition. Also on February
20, 1995, the court issued an order of general default against the whole world except as to the heirs of
Rustico Angeles and the government.
The evidence on record reveals that the subject parcel of land was originally declared for taxation purposes
in the name of Ramon Urbano (Urbano) in 1945 under Tax Declaration No. 3888 until 1991.4 On July 9,
1992, Urbano executed a Deed of Quitclaim in favor of the heirs of Honorato Maming (Maming), wherein he
renounced all his rights to the subject property and confirmed the sale made by his father to Maming

30

sometime in 1955 or 1956.5 Subsequently, the heirs of Maming executed a deed of absolute sale in favor of
respondent Naguit who thereupon started occupying the same. She constituted Manuel Blanco, Jr. as her
attorney-in-fact and administrator. The administrator introduced improvements, planted trees, such as
mahogany, coconut and gemelina trees in addition to existing coconut trees which were then 50 to 60 years
old, and paid the corresponding taxes due on the subject land. At present, there are parcels of land
surrounding the subject land which have been issued titles by virtue of judicial decrees. Naguit and her
predecessors-in-interest have occupied the land openly and in the concept of owner without any objection
from any private person or even the government until she filed her application for registration.
After the presentation of evidence for Naguit, the public prosecutor manifested that the government did not
intend to present any evidence while oppositor Jose Angeles, as representative of the heirs of Rustico
Angeles, failed to appear during the trial despite notice. On September 27, 1997, the MCTC rendered a
decision ordering that the subject parcel be brought under the operation of the Property Registration Decree
or Presidential Decree (P.D.) No. 1529 and that the title thereto registered and confirmed in the name of
Naguit.6
The Republic of the Philippines (Republic), thru the Office of the Solicitor General (OSG), filed a motion for
reconsideration. The OSG stressed that the land applied for was declared alienable and disposable only on
October 15, 1980, per the certification from Regional Executive Director Raoul T. Geollegue of the
Department of Environment and Natural Resources, Region VI.7 However, the court denied the motion for
reconsideration in an order dated February 18, 1998.81awphi1.nt
Thereafter, the Republic appealed the decision and the order of the MCTC to the RTC, Kalibo, Aklan,
Branch 8. On February 26, 1999, the RTC rendered its decision, dismissing the appeal.9
Undaunted, the Republic elevated the case to the Court of Appeals via Rule 42 of the 1997 Rules of Civil
Procedure. On July 12, 2000, the appellate court rendered a decision dismissing the petition filed by the
Republic and affirmed in toto the assailed decision of the RTC.
Hence, the present petition for review raising a pure question of law was filed by the Republic on September
4, 2000.10
The OSG assails the decision of the Court of Appeals contending that the appellate court gravely erred in
holding that there is no need for the governments prior release of the subject lot from the public domain
before it can be considered alienable or disposable within the meaning of P.D. No. 1529, and that Naguit
had been in possession of Lot No. 10049 in the concept of owner for the required period.11
Hence, the central question for resolution is whether is necessary under Section 14(1) of the Property
Registration Decree that the subject land be first classified as alienable and disposable before the
applicants possession under a bona fide claim of ownership could even start.
The OSG invokes our holding in Director of Lands v. Intermediate Appellate Court12 in arguing that the
property which is in open, continuous and exclusive possession must first be alienable. Since the subject
land was declared alienable only on October 15, 1980, Naguit could not have maintained a bona fide claim
of ownership since June 12, 1945, as required by Section 14 of the Property Registration Decree, since prior
to 1980, the land was not alienable or disposable, the OSG argues.
Section 14 of the Property Registration Decree, governing original registration proceedings, bears close
examination. It expressly provides:
SECTION 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.

31

(2) Those who have acquired ownership over private lands by prescription under the provisions of
existing laws.
....
There are three obvious requisites for the filing of an application for registration of title under Section 14(1)
that the property in question 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, and; that such possession is under a bona fide claim of ownership
since June 12, 1945 or earlier.
Petitioner suggests an interpretation that the alienable and disposable character of the land should have
already been established since June 12, 1945 or earlier. This is not borne out by the plain meaning of
Section 14(1). "Since June 12, 1945," as used in the provision, qualifies its antecedent phrase "under a
bonafide claim of ownership." Generally speaking, qualifying words restrict or modify only the words or
phrases to which they are immediately associated, and not those distantly or remotely located.13 Ad
proximum antecedents fiat relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if we adopt petitioners position. Absent a
legislative amendment, the rule would be, adopting the OSGs view, that all lands of the public domain
which were not declared alienable or disposable before June 12, 1945 would not be susceptible to original
registration, no matter the length of unchallenged possession by the occupant. Such interpretation renders
paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect
even as it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness
of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not yet
even considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the property sought to
be registered as already alienable and disposable at the time the application for registration of title is filed. If
the State, at the time the application is made, has not yet deemed it proper to release the property for
alienation or disposition, the presumption is that the government is still reserving the right to utilize the
property; hence, the need to preserve its ownership in the State irrespective of the length of adverse
possession even if in good faith. However, if the property has already been classified as alienable and
disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its
exclusive prerogative over the property.
This reading aligns conformably with our holding in Republic v. Court of Appeals .14 Therein, the Court noted
that "to prove that the land subject of an application for registration is alienable, an applicant must establish
the existence of a positive act of the government such as a presidential proclamation or an executive order;
an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a
statute."15 In that case, the subject land had been certified by the DENR as alienable and disposable in
1980, thus the Court concluded that the alienable status of the land, compounded by the established fact
that therein respondents had occupied the land even before 1927, sufficed to allow the application for
registration of the said property. In the case at bar, even the petitioner admits that the subject property was
released and certified as within alienable and disposable zone in 1980 by the DENR.16
This case is distinguishable from Bracewell v. Court of Appeals,17 wherein the Court noted that while the
claimant had been in possession since 1908, it was only in 1972 that the lands in question were classified as
alienable and disposable. Thus, the bid at registration therein did not succeed. In Bracewell, the claimant
had filed his application in 1963, or nine (9) years before the property was declared alienable and
disposable.1awphi1.nt Thus, in this case, where the application was made years after the property had
been certified as alienable and disposable, the Bracewell ruling does not apply.
A different rule obtains for forest lands,18 such as those which form part of a reservation for provincial park
purposes19 the possession of which cannot ripen into ownership.20 It is elementary in the law governing
natural resources that forest land cannot be owned by private persons. As held in Palomo v. Court of
Appeals,21 forest land is not registrable and possession thereof, no matter how lengthy, cannot convert it into
private property, unless such lands are reclassified and considered disposable and alienable.22 In the case

32

at bar, the property in question was undisputedly classified as disposable and alienable; hence, the ruling in
Palomo is inapplicable, as correctly held by the Court of Appeals.23
It must be noted that the present case was decided by the lower courts on the basis of Section 14(1) of the
Property Registration Decree, which pertains to original registration through ordinary registration
proceedings. The right to file the application for registration derives from a bona fide claim of ownership
going back to June 12, 1945 or earlier, by reason of the claimants open, continuous, exclusive and
notorious possession of alienable and disposable lands of the public domain.
A similar right is given under Section 48(b) of the Public Land Act, which reads:
Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such land or an interest therein, but those titles have not been perfected or completed,
may apply to the Court of First Instance of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:
xxx xxx xxx
(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, for at least thirty years 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.
When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to
vest the right to register their title to agricultural lands of the public domain commenced from July 26, 1894.
However, this period was amended by R.A. No. 1942, which provided that the bona fide claim of ownership
must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act was again
amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. This new starting
point is concordant with Section 14(1) of the Property Registration Decree.
Indeed, there are no material differences between Section 14(1) of the Property Registration Decree and
Section 48(b) of the Public Land Act, as amended. True, the Public Land Act does refer to "agricultural lands
of the public domain," while the Property Registration Decree uses the term "alienable and disposable lands
of the public domain." It must be noted though that the Constitution declares that "alienable lands of the
public domain shall be limited to agricultural lands."24 Clearly, the subject lands under Section 48(b) of the
Public Land Act and Section 14(1) of the Property Registration Decree are of the same type.
Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the
application for registration of alienable lands of the public domain, possession over which commenced only
after June 12, 1945? It did not, considering Section 14(2) of the Property Registration Decree, which
governs and authorizes the application of "those who have acquired ownership of private lands by
prescription under the provisions of existing laws."
Prescription is one of the modes of acquiring ownership under the Civil Code.25 There is a consistent
jurisprudential rule that properties classified as alienable public land may be converted into private property
by reason of open, continuous and exclusive possession of at least thirty (30) years.26 With such conversion,
such property may now fall within the contemplation of "private lands" under Section 14(2), and thus
susceptible to registration by those who have acquired ownership through prescription. Thus, even if
possession of the alienable public land commenced on a date later than June 12, 1945, and such
possession being been open, continuous and exclusive, then the possessor may have the right to register
the land by virtue of Section 14(2) of the Property Registration Decree.
The land in question was found to be cocal in nature, it having been planted with coconut trees now over fifty
years old.27 The inherent nature of the land but confirms its certification in 1980 as alienable, hence
agricultural. There is no impediment to the application of Section 14(1) of the Property Registration Decree,
as correctly accomplished by the lower courts.l^vvphi1.net

33

The OSG posits that the Court of Appeals erred in holding that Naguit had been in possession in the concept
of owner for the required period. The argument begs the question. It is again hinged on the
assertionshown earlier to be unfoundedthat there could have been no bona fide claim of ownership
prior to 1980, when the subject land was declared alienable or disposable.
We find no reason to disturb the conclusion of both the RTC and the Court of Appeals that Naguit had the
right to apply for registration owing to the continuous possession by her and her predecessors-in-interest of
the land since 1945. The basis of such conclusion is primarily factual, and the Court generally respects the
factual findings made by lower courts. Notably, possession since 1945 was established through proof of the
existence of 50 to 60-year old trees at the time Naguit purchased the property as well as tax declarations
executed by Urbano in 1945. Although tax declarations and realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of the possession in the concept of
owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least
constructive possession. They constitute at least proof that the holder has a claim of title over the property.
The voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere and
honest desire to obtain title to the property and announces his adverse claim against the State and all other
interested parties, but also the intention to contribute needed revenues to the Government. Such an act
strengthens ones bona fide claim of acquisition of ownership.28
Considering that the possession of the subject parcel of land by the respondent can be traced back to that of
her predecessors-in-interest which commenced since 1945 or for almost fifty (50) years, it is indeed beyond
any cloud of doubt that she has acquired title thereto which may be properly brought under the operation of
the Torrens system. That she has been in possession of the land in the concept of an owner, open,
continuous, peaceful and without any opposition from any private person and the government itself makes
her right thereto undoubtedly settled and deserving of protection under the law.
WHEREFORE, foregoing premises considered, the assailed Decision of the Court of Appeals dated July 12,
2000 is hereby AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Footnotes
1

Penned by Justice P. Alio-Hormachuelos, concurred in by Justices A. Austria-Martinez and E.J.


Asuncion.
2

Penned by Judge E. Terencio.

Penned by Judge R. Barrios.

Rollo, p. 31.

Ibid.

Id. at 50.

Id. at 40.

Id. at 16; but see 103.

Id. at 77.

10

Id. at 10.

34

11

Id. at 19.

12

G.R. No. 65663, 16 October 1992, 214 SCRA 604.

13

R. Agpalo, Statutory Construction, 3rd ed., 1995 at 182.

14

G.R. No. 127060, 19 November 2002, 392 SCRA 190.

15

Id. at 201.

16

Rollo, p. 21.

17

380 Phil. 156 (2000).

18

See e.g., Almeda v. Court of Appeals, G.R. No. 85322, 30 April 1991, 196 SCRA 476, 480;
Director of Lands v. Court of Appeals, 218 Phil. 666,674 (1984); Heirs of Amunategui v. Director of
Forestry, 211 Phil 260 (1983); Pagkatipunan v. Court of Appeals 429 Phil. 377 (2002).
19

See Palomo v. Court of Appeals, 334 Phil 357 (1997).

20

Director of Lands v. Court of Appeals, supra note 12 citing Director of Forestry v. Muoz, G.R.
No. 24796, 28 June 1968, 23 SCRA 1183.
21

Supra note 19.

22

Id. citing Vano v. Government of P.I., 41 Phil. 161 [1920]; Li Seng Giap y CIAA v. Director, 55
Phil. 693 [1931]; Fernandez Hermanos v. Director, 57 Phil. 929 [1931]; Military Reservations v.
Marcos, 52 SCRA 238 [1973]; Republic v. Court of Appeals, 154 SCRA 476; Vallarta v. IAC, 152
SCRA 679; Director of Forest Administration v. Fernandez, 192 SCRA 121.
23

See Rollo, at 35.

24

Section 3, Article XII, Constitution.

25

See Article 1113, Civil Code, which states: "All things which are within the commerce of men are
susceptible of prescription, unless otherwise provided. Property of the State or any of its
subdivisions not patrimonial in character shall not be the object of prescription."
26

See e.g., Director of Lands v. IAC, G.R. No. 65663, 16 October 1992, 214 SCRA 604, 611;
Republic v. Court of Appeals, G.R. No. 108998, 24 August 1994, 235 SCRA 567, 576; Group
Commander, Intelligence and Security Group v. Dr. Malvar, 438 Phil. 252, 275 (2002).
27

Rollo, p. 35.

28

Director of Lands v. Court of Appeals, 367 Phil. 597 (1999); Director of Lands v. Intermediate
Appellate Court, G.R. No. 70825, March 11, 1991, 195 SCRA 38; Rivera v. Court of Appeals, G.R.
No. 130876, January 31, 2002, 244 SCRA 218; Republic v. Court of Appeals, 325 Phil. 674 (1996);
Heirs of Placido Miranda v. Court of Appeals, 255 SCRA 368; Alonso v. Cebu Country Club, Inc.,
375 SCRA 390.
G.R. No. 95608 January 21, 1997
SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and CARMEN PALOMO VDA. DE
BUENAVENTURA, petitioners,
vs.

35

THE HONORABLE CA, THE REPUBLIC OF THE PHILIPPINES, FAUSTINO J. PERFECTO, RAFFY
SANTILLAN, BOY ARIADO, LORENZO BROCALES, SALVADOR DOE, and other DOES, respondents.
ROMERO, J.:
The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form part of the
"Tiwi Hot Spring National Park." The facts of the case are as follows.
On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes issued
Executive Order No. 40 which reserved for provincial park purposes some 440,530 square meters of land
situated in Barrio Naga, Municipality of Tiwi, Province of Albay pursuant to the provisions of Act 648 of the
Philippine Commission. 1
Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of America,
ordered the registration of 15 parcels of land covered by Executive Order No. 40 in the name of Diego
Palomo on December 9, 1916; 2 December 28, 3 and January 17, 1917. 4 Diego Palomo donated these
parcels of land consisting of 74,872 square meters which were allegedly covered by Original Certificates of
Title Nos. 513, 169, 176 and 173 5 to his heirs, herein petitioners, Ignacio and Carmen Palomo two months
before his death in April 1937. 6
Claiming that the aforesaid original certificates of title were lost during the Japanese occupation, Ignacio
Palomo filed a petition for reconstitution with the Court of First Instance of Albay on May 30, 1950. 7 The
Register of Deeds of Albay issued Transfer Certificates of Title Nos. 3911, 3912, 3913 and 3914 sometime in
October 1953. 8
On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area embraced
by Executive Order No. 40 into the "Tiwi Hot Spring National Park," under the control, management,
protection and administration of the defunct Commission of Parks and Wildlife, now a division of the Bureau
of Forest Development. The area was never released as alienable and disposable portion of the public
domain and, therefore, is neither susceptible to disposition under the provisions of the Public Land Law (CA
141) nor registrable under the Land Registration Act (Act No. 496).
The Palomos, however, continued in possession of the property, paid real estate taxes thereon 9 and
introduced improvements by planting rice, bananas, pandan and coconuts. On April 8, 1971, petitioner
Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual mortgaged the parcels of
land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the
Philippine Islands.
In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual
filed Civil Case No. T-143 before the then Court of First Instance of Albay for Injunction with damages
against private respondents Faustino J. Perfecto, Raffy Santillan, Boy Ariado, Lorenzo Brocales, Salvador
Doe and other Does who are all employees of the Bureau of Forest Development who entered the land
covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally leveling no less than 4
groves worth not less than P2,000.00.
On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and
cancellation of Certificates of Title involving the 15 parcels of land registered in the name of the petitioners
and subject of Civil Case T-143. Impleaded with the petitioners as defendants were the Bank of the
Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.
The case against the Bank of Philippine Islands was dismissed because the loan of P200,000 with the Bank
was already paid and the mortgage in its favor cancelled.
A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties and on July 31,
1986, the trial court rendered the following decision:
WHEREFORE, premises considered, judgment is hereby rendered:

36

IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs, dismissing
the complaint for injunction and damages, as it is hereby DISMISSED.
Costs against the plaintiffs.
In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:
(1) Declaring null and void and no force and effect the Order dated September 14, 1953,
as well as the Original Certificate of Titles Nos. 153, 10 169, 173 and 176 and Transfer
Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the Register of Deeds
of Albay and all transactions based on said titles.
(2) Forfeiting in favor of the plaintiff Government any and all improvements on the lands in
question that are found therein and introduced by the defendants;
(3) Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7 8, 9,10, 11 and 12, Plan II-9299 and Lots 1, 21, 11
3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring National Park;
(4) and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged
Original Certificates of Titles Nos. 513, 169, 173 and 176, Transfer Certificates of Title
Nos. T-3911, T-3912, T-3913 and T-3914.
Costs against the defendants.
So Ordered. 12
The court a quo in ruling for the Republic found no sufficient proof that the Palomos have established
property rights over the parcels of land in question before the Treaty of Paris which ended the SpanishAmerican War at the end of the century. The court further stated that assuming that the decrees of the Court
of First Instance of Albay were really issued, the Palomos obtained no right at all over the properties
because these were issued only when Executive Order No. 40 was already in force. At this point, we take
note that although the Geodetic Engineer of the Bureau of Lands appointed as one of the Commissioners in
the relocation survey of the properties stated in his reamended report that of the 3,384 square meters
covered by Lot 2, Plan II-9205, only 1,976 square meters fall within the reservation area, 13 the RTC ordered
TCT 3913 covering the entire Lot 21 (sic) Plan II-9205 cancelled.
The petitioners appealed to the Court of Appeals which affirmed in toto the findings of the lower Court;
hence this petition raising the following issues:
1. The respondent Court of Appeals committed grave abuse of discretion in affirming in
toto the decision of the lower court.
2. The declaration of nullity of the original certificates of title and subsequent transfer
certificates of titles of the petitioners over the properties in question is contrary to law and
jurisprudence on the matter.
3. The forfeiture of all improvements introduced by the petitioners in the premises in favor
of the government is against our existing law and jurisprudence.
The issues raised essentially boil down to whether or not the alleged original certificate of titles issued
pursuant to the order of the Court of First Instance in 1916-1917 and the subsequent TCTs issued in 1953
pursuant to the petition for reconstitution are valid.
Petitioners contend that the Treaty of Paris which ended the Spanish-American War at the end of the 19th
century recognized the property rights of Spanish and Filipino citizens and the American government had no
inherent power to confiscate properties of private citizens and declare them part of any kind of government
reservation. They allege that their predecessors in interest have been in open, adverse and continuous

37

possession of the subject lands for 20-50 years prior to their registration in 1916-1917. Hence, the
reservation of the lands for provincial purposes in 1913 by then Governor-general Forbes was tantamount to
deprivation of private property without due process of law.
In support of their claim, the petitioners presented copies of a number of decisions of the Court of First
Instance of Albay, 15th Judicial District of the United States of America which state that the predecessors in
interest of the petitioners' father Diego Palomo, were in continuous, open and adverse possession of the
lands from 20 to 50 years at the time of their registration in 1916.
We are not convinced.
The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the
Treaty of Paris in April 11, 1899, our lands, whether agricultural, mineral or forest were under the exclusive
patrimony and dominion of the Spanish Crown. Hence, private ownership of land could only be acquired
through royal concessions which were documented in various forms, such as (1) Titulo Real or Royal Grant,"
(2) Concesion Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion
Posesoria or Possessory Information title obtained under the Spanish Mortgage Law or under the Royal
Decree of January 26, 1889.
Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old
Spanish grant. Petitioners placed much reliance upon the declarations in Expediente No. 5, G.L.R.O.
Record Decision No. 9820, dated January 17, 1917; Expediente No. 6, G.L.R.O. Record No. 9821, dated
December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916; Expediente
No. 8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10, G.L.R.O. Record No.
9868, dated December 9, 1916 of the Court of First Instance of Albay, 15th Judicial District of the United
States of America presided by Judge Isidro Paredes that their predecessors in interest were in open,
adverse and continuous possession of the subject lands for 20-50 years. 14 The aforesaid "decisions" of the
Court of First Instance, however, were not signed by the judge but were merely certified copies of notification
to Diego Palomo bearing the signature of the clerk of court.
Moreover, despite claims by the petitioners that their predecessors in interest were in open, adverse and
continuous possession of the lands for 20 to 50 years prior to their registration in 1916-1917, the lands were
surveyed only in December 1913, the very same year they were acquired by Diego Palomo. Curiously , in
February 1913 or 10 months before the lands were surveyed for Diego Palomo, the government had already
surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners'
predecessors in interest were indeed in possession of the lands for a number of years prior to their
registration in 1916-1917, they would have undoubtedly known about the inclusion of these properties in the
reservation in 1913. It certainly is a trifle late at this point to argue that the government had no right to
include these properties in the reservation when the question should have been raised 83 years ago.
As regards the petitioners' contention that inasmuch as they obtained the titles without government
opposition, the government is now estopped from questioning the validity of the certificates of title which
were granted. As correctly pointed out by the respondent Court of Appeals, the principle of estoppel, does
not operate against the Government for the act of its agents. 15
Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of
appropriation. The adverse possession which may be the basis of a grant of title in confirmation of imperfect
title cases applies only to alienable lands of the public domain.
There is no question that the lands in the case at bar were not alienable lands of the public domain. As
testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never
declared as alienable and disposable and subject to private alienation prior to 1913 up to the present. 16
Moreover, as part of the reservation for provincial park purposes, they form part of the forest zone.
It is elementary in the law governing natural resources that forest land cannot be owned by private persons.
It is not registrable and possession thereof, no matter how lengthy, cannot convert it into private property, 17
unless such lands are reclassified and considered disposable and alienable.

38

Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land
inasmuch as the weight of authority is that tax declarations are not conclusive proof of ownership in land
registration cases. 18
Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of
improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40 was already
in force at the time the lands in question were surveyed for Diego Palomo. Petitioners also apparently knew
that the subject lands were covered under the reservation when they filed a petition for reconstitution of the
lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II9299 approved by the Chief of the Land Registration Office Enrique Altavas in 1953 as a true and correct
copy of the Original Plan No. II-9299 filed in the Bureau of Lands dated September 11, 1948 19 contains the
following note, "in conflict with provincial reservation." 20 In any case, petitioners are presumed to know the
law and the failure of the government to oppose the registration of the lands in question is no justification for
the petitioners to plead good faith in introducing improvements on the lots.
Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the
reservation, TCT 3913 should be annulled only with respect to the aforesaid area. Inasmuch as the bamboo
groves leveled in TCT 3913 and subject of Civil Case T-143, 21 were within the perimeter of the national
park, 22 no pronouncement as to damages is in order.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that TCT
3913 be annulled with respect to the 1,976 square meter area falling within the reservation zone.
SO ORDERED.
Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.
Footnotes
1 Act 648 of the Philippine Commission entitled, "An Act authorizing the Governor-general
to reserve for civil public purposes and from sale or settlement , any part of the public
domain not appropriated by law for special public purposes, unless otherwise directed by
law and extending provisions of Act Numbered 627 so that public lands desired to be
reserved by the Insular Government for public use, or private lands desired to be
purchased by the Insular Government for such uses, may be brought under the operation
of Land Registration."
2 As shown by Expediente No. 7, GLRO Record 9822 which became the basis for the
issuance of alleged OCT No. 1955 (169) and Expediente No. 10 GLRO Record 9868. It
should be noted however that the Register of the Deeds does not have any record of any
OCT issued pursuant to GLRO Record 9868.
3 As shown by Expediente No. 6, GLRO record 9821 which became the basis for the
issuance of the alleged OCT No. RO-1956 (173) and Expediente No. 8 GLRO Record
9823 which became the basis for the issuance of alleged OCT No. RO 1954 (176).
4 As shown by Expediente No. 5 which became the basis for the issuance of alleged OCT
No. RO 1953 (513).
5 OCT 513 covered Lot Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 of Plan II-9299 while
OCT 169, 176 and 173 covered Lot Nos. 2, 1 and 3 of Plan II-9205. Another alleged OCT
with an unspecified number covered Lot No. 4 of Plan II-9205.
6 Exh. 21.
7 Exh. B.

39

8 TCT 3911 (Exh 1-A) originated from OCT No. RO-1953 (513) (Exh 1); TCT 3912 (Exh 2A) originated from OCT No. RO 1954 (176) [Exh 2] while TCT 3913 (Exh 3-A) originated
from OCT No. RO 1955 (169) [Exh 3] and TCT No. 3914 (Exh 4-A) originated from OCT
No. RO-1956 (173) [Exh 4].
9 Aside from tax receipts marked as Exh 9-U to 9-H covering the years 1977, 1983 and
1984, tax declaration Nos. 1838, 1528, 1527, 1526, 1536, 1840, 1835, 1842, 1833, 1841,
1832, 1834 and 1839 marked as Exh 6, 6-A to 6-L, also presented in evidence marked as
Exh 19 was a Certificate of Appreciation awarded by the Province of Albay in 1956 to
petitioner Ignacio Palomo for prompt and up to date payment of tax obligations.
10 Should be OCT 513.
11 Should be Lot 2.
12 Rollo, pp. 63-64.
13 Records, pp. 62. The Republic, in fact, never claimed the entire 3,384 square meters
as shown by the Relocation Plan of II-6679 (marked as Exh H-3-T ) when surveyed for
Civil Case T-143 and 176.
14 Exhibits 14, 15, 15-A, 16, 16-A, 17, 18, 18-A.
15 Auyong Hian v. Court of Tax Appeals, 59 SCRA 110 (1974); Cruz v. CA, 194 SCRA
145; Sharp International Marketing v CA, 201 SCRA 299; Republic v. IAC, 209 SCRA 90;
GSIS v CA, 218 SCRA 233.
16 TSN, 27 September 1977, pp. 18-19.
17 Vano v. Government of P.I. 41 P 161 [1920]; Li Seng Giap y Cia v. Director, 55 Phil 693
[1931]; Fernandez Hnos. v. Director, 57 Phil 929 [1931]; Military Reservations v. Marcos,
52 SCRA 238 [1973]; Republic v. CA, 154 SCRA 476; Vallarta v. IAC, 152 SCRA 679;
Director of Forest Administration v. Fernandez, 192 SCRA 121.
18 Reyes v. Sierra, 93 SCRA 472; Masagana v. Argamosa, 109 SCRA 53; Ferrer Lopez v.
CA, 150 SCRA 393; Carag v. IAC, 177 SCRA 313; Director of Lands v. IAC, 195 SCRA 38.
19 Exhibit H-4.
20 Exhibit H-5.
21 Petitioners alleged that 4 bamboo groves in the lots covered by TCT 3913 and/or 3914
were "eradicated" by employees of the Office of Parks and Wildlife, now Bureau of Forest
and Development.
22 TSN, 28 October 1985, pp. 26-27.
G.R. No. 143369

November 27, 2002

LEOPOLDO C. LEONARDO, represented by his daughter EMERENCIANA LEONARDO, petitioner,


vs.
VIRGINIA TORRES MARAVILLA and LEONOR C. NADAL, as Administratrices of the Estate of MARIANO
TORRES, as substituted by FE NADAL VENTURINA, respondents.
DECISION

40

YNARES-SANTIAGO, J.:
This is a petition for review seeking to set aside the decision1 dated November 26, 1999 and the resolution2
dated May 19, 2000 of the Court of Appeals3 in CA-G.R. CV No. 52932, which affirmed the order4 of the
Regional Trial Court of Pasay City, Branch III, dismissing petitioners complaint5 for "Delivery of Possession
of Property, Owners Duplicate Certificate of Title, Rentals and Damages," in Civil Case No. 93-10282.
The instant controversy stemmed from a dispute over a 1,151.80 square meter lot, located in Pasay City,
covered by Transfer Certificate of Title No. 2355 (34515),6 and registered in the name of Mariano Torres y
Chavarria, the predecessor-in-interest of respondents. Petitioner claims that he is the lawful owner of the
disputed lot, having purchased it on September 29, 1972 from a certain Eusebio Leonardo Roxas,7 who in
turn acquired the same lot by purchase on August 28, 1972 from Mariano Torres y Chavarria.8
On September 14, 1972, Eusebio Leonardo Roxas sent a letter-request9 to the Register of Deed of Pasay
City asking for the registration of the deed of sale allegedly executed in his favor by Mariano Torres y
Chavarria. The letter was entered in the Registers Primary Book under Entry No. 55780, Vol. V. The Office
of the Register of Deeds, however, did not register the deed as it was awaiting the final disposition of a
pending case10 between Mariano Torres y Chavarria and a certain Francisco E. Fernandez involving title of
the lot.11 Incidentally, the said case was decided in favor of Mariano Torres y Chavarria, which decision
became final and executory on September 21, 1972.12
On October 6, 1972, petitioner likewise asked the Register of Deeds to register the deeds of sale dated
August 28, 1972 and the September 29, 1972 involving Transfer Certificate of Title No. 2355 (34515), and to
issue the corresponding transfer certificate of title in his name.13 Petitioner did not present the owners
duplicate copy of Transfer Certificate of Title No. 2355 (34515), which remained in the possession of
respondents. Petitioners letter-request was entered in the Primary Books of the Register of Deeds under
Entry No. 55952, V.5, on October 19, 1972. The Register of Deeds, however, certified that the original copy
of TCT No. 2355 (34515), could not be retrieved or located in the office of the Register of Deeds of Pasay,
hence, the requested registration could not be effected.14
On November 13, 1972, petitioner executed an affidavit of adverse claim15 over TCT No. 2355 (34515)
which was entered in the Primary Book under Entry No. 56039, Vol. 5, on November 15, 1972.
On May 18, 1993, the Register of Deeds of Pasay City was able to retrieve the original copy of TCT No.
2355 (34515).16
On May 20, 1993, petitioner caused the annotation of his affidavit of adverse claim on TCT No. 2355
(34515),17 and asked the respondents to deliver possession of the owners duplicate copy of TCT No. 2355
(34515). When the latter ignored his demand, petitioner filed on September 6, 1993 a complaint for "Delivery
of Possession of Property, Owners Duplicate Certificate of Title, Rentals and Damages." Petitioner alleged
that he filed the case against respondents only in 1993 because he was living abroad.18
In their Answer, respondents countered that since 1938 up to the present, the lot in question has been
registered in the name of the late Mariano Torres y Chavarria, their predecessor-in-interest, and that they
have been in material possession thereof in the concept of owners. In the settlement of the estate of
Mariano Torres y Chavarria, who died on August 30, 1974,19 his widow, Rosario Nadal, and his natural child,
Virginia Torres Maravilla, acquired the disputed lot by succession.20 After the demise of Rosario Nadal,
sometime in January 1990, her share in the said lot was inherited by her sister, Leonor Nadal, who was
appointed as special administratrix of the estate of Rosario Nadal.21 Subsequently, Leonor Nadal was also
appointed administratrix of the estate of Mariano Torres y Chavarria.22 Respondents maintain that they have
been in open and peaceful possession of the said property and that it was only in 1993 when they came to
know of the alleged claim of petitioners over the same property.
Respondents contended further that the deeds of sale dated August 28, 1972 and September 29, 1972 are
falsified documents and that the signature of Mariano Torres y Chavarria on the August 28, 1972 deed of
absolute sale was a forgery. On February 28, 1994, respondents filed a motion to dismiss23 the complaint on
the grounds of: (1) non-payment of the correct docket fees; (2) prescription; and (3) laches. The motion to
dismiss was denied on July 25, 1995.

41

Meanwhile, Leonor Nadal died on October 23, 1995, and was substituted by Fe Nadal Venturina on January
19, 1996.24
On motion of respondents, the trial court reconsidered its order of July 25, 1995, and issued an order on
February 1, 1996, dismissing petitioners complaint on the ground of prescription and laches.
Dissatisfied, petitioner appealed to the Court of Appeals which affirmed the assailed order on November 26,
1999. The motion for reconsideration was denied on May 19, 2000.
Hence, the instant petition contending that the Court of Appeals erred in holding that:
I
THE RIGHT OF PETITIONER TO ENFORCE THE DEEDS (EXHS. 2 AND 4) THROUGH HIS COMPLAINT
FILED ON SEPTEMBER 6, 1993 HAD ALREADY PRESCRIBED ON SEPTEMBER 29, 1982 PER ARTICLE
114[4];
II
THE TITLE ON THE PROPERTY REMAINED IN THE VENDORS (MARIO TORRES) NAME BEFORE
AND AFTER THE EXECUTION OF THE DEEDS (EXHS. 2 AND 4);
III
IF THE ORIGINAL COPY OF THE TCT WAS LOST/MISSING IN THE FILES OF THE REGISTER OF
DEEDS, PETITIONER SHOULD HAVE FILED A PETITION FOR RECONSTITUTION OF THE TITLE;
IV
PETITIONERS INACTION FOR 21 YEARS TO ENFORCE HIS RIGHTS ON THE DEEDS (EXHS. 2 AND
4) MADE RESPONDENTS BELIVE THAT HE HAD ABANDONED HIS RIGHTS ON THE PROPERTY; and,
V
LACHES HAD OPERATED NOTWITHSTANDING THAT PETITIONER WROTE THE REGISTER OF
DEEDS OF PASAY CITY (EXH. 8) AND THE LATTER REPLIED THAT REGISTRATION COULD NOT BE
EFFECTED BECAUSE THE TITLE WAS MISSING (EXH. 9).25
The issue in the instant case is whether or not petitioners action is barred by prescription and laches.
The Court of Appeals ruled that petitioners cause of action is founded on the deed of absolute sale
allegedly executed by respondents predecessor-in-interest on August 28, 1972, which purportedly
conveyed the disputed lot to Eusebio Leonardo Roxas, and the deed of sale dated September 29, 1972,
whereby the latter sold the same lot to petitioner. Being an action based on written contracts, petitioners
complaint falls under Article 114426 of the Civil Code, which provides that an action upon a written contract
shall prescribe in ten years from the time the right of action accrued. Since petitioner brought the instant
case only on September 6, 1993, or 21 years from the time his supposed right of action accrued on
September 29, 1972, i.e., the date of execution of the contract conveying to him the questioned lot, his
action was clearly barred by the statute of limitations.
Petitioner, on the other hand, contends that the applicable provision is Article 114127 and not 1144 of the Civil
Code because his action is one for recovery of possession of real property which prescribes in thirty years.
The contention is without merit. Petitioners action is actually an action for specific performance, i.e., to
enforce the deed of absolute sale allegedly executed in his favor. It is a fundamental principle that ownership
does not pass by mere stipulation but by delivery. The delivery of a thing constitutes a necessary and

42

indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract.28
Under Article 1498 of the Civil Code, when the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred. Thus, the execution of the contract is only a
presumptive, not conclusive delivery which can be rebutted by evidence to the contrary, as when there is
failure on the part of the vendee to take material possession of the land subject of the sale in the concept of
a purchaser-owner.29
In the case at bar, it is not disputed that the lot in question was never delivered to petitioner notwithstanding
the alleged execution of a deed of absolute sale. From 1972 to 1993, petitioner neither had, nor demanded,
material possession of the disputed lot. It was the respondents who have been in control and possession
thereof in the concept of owners since 1938 up to the present. It follows that ownership of the lot was never
transferred to petitioner. Hence, he can not claim that the instant case is an accion reivindicatoria or an
action to recover ownership and full possession of the property which, in the first place, never came into his
possession for lack of the requisite delivery. Thus, in Danguilan v. Intermediate Appellate Court,30 where the
requisite delivery was not effected, the Court held that:
Since in this jurisdiction it is a fundamental and elementary principle that ownership does not pass by mere
stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the
execution of a public document does not constitute sufficient delivery where the property involved is in the
actual and adverse possession of third persons (Addison v. Felix, 38 Phil. 404; Masallo v. Cesar, 39 Phil.
134), it becomes incontestable that even if included in the contract, the ownership of the property in dispute
did not pass... Not having become the owner for lack of delivery, [one] cannot presume to recover the
property from its present possessors. [The] action, therefore, is not one of revindicacion, but one against
[the] vendor for specific performance of the sale ...
Clearly, the case filed by petitioner was an action for specific performance of a written contract of sale which,
pursuant to Article 1144 of the Civil Code, prescribes in 10 years from the accrual of the right of action. In a
contract of sale, there is a reciprocal obligation to pay the purchase price and the corresponding delivery of
the thing sold, which obligations give rise to a right of action in case of breach.31 Here, petitioners right of
action for specific performance or rescission arose when delivery of the thing sold was not effected on
September 29, 1972, despite the payment of the purchase price. Hence, from 1972 to 1993, when petitioner
filed the instant case, 21 years had elapsed barring the institution of petitioners action which is definitely
beyond the 10 year prescriptive period.
Petitioners claim that the prescriptive period was tolled when he registered his adverse claim with the
Register of Deeds is untenable. In Garbin v. Court of Appeals, et al.,32 wherein an action for annulment of a
deed of sale was dismissed on the ground of prescription and laches, the Court held that the registration of
an adverse claim does not toll the running of the prescriptive period, thus:
x x x the title of the defendant must be upheld for failure or the neglect of the plaintiffs for an unreasonable
and unexplained length of time of more than fifteen (15) years since they registered their adverse claim, or
for a period of more than three (3) decades since the execution of the deed of sale in their favor upon which
their adverse claim is based, to do that which, by exercising diligence, could or should have been done
earlier. For it is this negligence or omission to assert a right within reasonable time that is construed that
plaintiffs had abandoned their right to claim ownership under the deed of sale, or declined to assert it. Thus,
when a person slept on his rights for 28 years from the time of the transaction, before filing the action,
amounts to laches which cannot be excused even by ignorance resulting from inexcusable negligence (Vda.
de Lima v. Tiu, 52 SCRA 516 [1970]).
In the same vein, the annotation on May 20, 1993 of the November 13, 1972 affidavit of adverse claim on
TCT No. 2355 (34515) afforded no protection to petitioner for the same reason that said belated assertion of
his alleged right over the property is barred by prescription and laches.
Moreover, the affidavit of adverse claim registered by petitioner in 1972 was ineffective. The law enforced at
the time petitioner filed an adverse claim was Section 110, of Act 496,33 also known as the Land Registration
Act, (now Section 7034 of P.D. No. 1529, or the Property Registration Decree35), which stated:

43

Sec. 110. Whoever claims any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no other provision is made in this Act for
registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or
under whom acquired, and a reference to the volume and page of the certificate of title of the registered
owner, and a description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's residence and designate
a place at which all notices may be served upon him. This statement shall be entitled to registration as an
adverse claim, and the court, upon a petition of any party in interest, shall grant a speedy hearing upon the
question of the validity of such adverse claim and shall enter such decree therein as justice and equity may
require. If the claim is adjudged to be invalid, the registration shall be cancelled. If in any case the court after
notice and hearing shall find that a claim thus registered was frivolous or vexatious, it may tax the adverse
claimant double or treble costs in its discretion.
In Junio v. De los Santos, et al.,36 an action for cancellation of an adverse claim, the Court ruled that the
procedure for registration of voluntary instruments, like a deed of sale, is laid down in Section 5737 of Act
496. But where the vendor refused to deliver to the vendee the owners duplicate certificate of title, which
title must be presented in order that the deed of conveyance may be registered and the corresponding
transfer certificate of title may be issued,38 the vendee may file with the Register of Deeds an adverse claim
under Section 110 of Act No. 496. For an adverse claim to be valid, it must be shown that a demand was
made on the vendor and that the latter refused to surrender the owners duplicate certificate of title.39
In instant case, it was not shown that Mariano Torres y Chavarria, the registered owner of the disputed lot,
refused to surrender the owners duplicate certificate of title, nor that petitioner demanded the surrender
thereof. In the affidavit of adverse claim registered by petitioner he merely stated: "9. That in the meantime
the herein (VENDEE) LEOPOLDO C. LEONARDO has no means to get or secure the aforementioned
Owner[]s Duplicate Copy of Title No. 2355 (34515) Pasay City Registry Office, from the said Parties, he
(Leopoldo C. Leonardo) hereby requests the Register of Deeds of Pasay City to annotate whatever rights
and interest on the ORIGINAL CERTIFICATE OF TITLE No. 2355 (34515), Pasay Registry Office, in the
name of MARIANO C. TORRES as a Notice of Adverse Claim(s) in favor of LEOPOLDO C. LEONARDO to
any third party/ies;" For lack of the requisite unjustified refusal of the registered owner to surrender the
owners duplicate certificate of title, the affidavit of adverse claim registered by petitioner is not valid.
Likewise, there is no merit in petitioner's assertion that the prescriptive period should commence to run only
on May 18, 1993 when the original copy of Transfer Certificate of Title No. 2355 (34515) was retrieved by
the Register of Deeds. The loss of the original title will not prevent petitioners pursuit to enforce his right.
Otherwise stated, the recovery of the original title or the reconstitution thereof is not the only means by
which petitioner could protect his right. Under Article 1155 of the Civil Code - "[t]he prescription of actions is
interrupted when they are filed in court, when there is a written extrajudicial demand by the creditors, and
when there is any written acknowledgement of the debt by the debtor." Petitioner therefore may pursue
either judicial or extrajudicial means manifesting his interest in the questioned property in order to interrupt
the prescriptive period.
Certainly, petitioners action filed on September 6, 1993 is barred by the 10 year prescriptive period from
the accrual of his alleged right of action on September 29, 1972. In the same vein, said action is barred by
laches having allowed 21 years to lapse before enforcing his alleged right. Laches is defined as failure or
neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence
could or should have been done earlier. It is negligence or omission to assert a right within a reasonable
time, warranting presumption that the party entitled to assert it has abandoned it or has declined to assert
it.40 Tempus enim modus tollendi obligationes et actiones, quia tempus currit contra desides et sui juris
contemptores For time is a means of dissipating obligations and actions, because time runs against the
slothful and careless of their own rights.41
WHEREFORE, in view of all the foregoing, the instant petition is DENIED. The November 26, 1999 decision
and the May 19, 2000 resolution of the Court of Appeals in CA-G.R. CV No. 52932, which sustained the
February 1, 1996 order of the Regional Trial Court of Pasay City, Branch III, dismissing petitioners
complaint in Civil Case No. 93-10282 on the ground of prescription and laches, is AFFIRMED.
SO ORDERED.

44

Vitug, (Acting chairman), Carpio, and Azcuna, JJ., concur.


Davide, Jr., C.J. (Chairman), on official leave.
Footnotes
1

Rollo, p. 192.

Rollo, p. 208.

Fourth Division, composed of Associate Justices: Mariano M. Umali (ponente); Romeo J. Callejo,
Sr. (member); and Quirino D. Abad Santos, Jr. (chairman).
4

Issued by Judge Angel V. Colet (Rollo, p. 311).

Rollo, pp. 54; Amended Complaint, Rollo, p. 70.

Records, p. 74.

Rollo, p. 92.

Rollo, p. 99.

Rollo, p. 103.

10

Mariano Torres Y Chavarria v. Francisco E. Fernandez, CA G.R. No. 47004-R.

11

Rollo, p. 104.

12

Rollo, p. 102.

13

Rollo, p. 105.

14

Rollo, p. 106.

15

Rollo, p. 107.

16

Court of Appeals Rollo, p. 113.

17

Exhibit 3-B, Folder of Exhibits.

18

Rollo, p. 19.

19

Exhibit B, Folder of Exhibits.

20

Answer, Rollo, p. 63.

21

Ibid., Rollo, pp. 65-66.

22

Id., Rollo, p. 66.

23

Rollo, p. 76.

24

Records, p. 342.

45

25

Rollo, p. 25.

26

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:
Upon a written contract;
Upon an obligation created by law;
Upon a judgment.
27

Art. 1141. Real actions over immovables prescribe after thirty years.
This Provision is without prejudice to what is established for the acquisition of ownership
and other real rights by prescription.

28

Danguilan v. Intermediate Appellate Court, 168 SCRA 22, 31 [1988], citing Garchitorena v.
Almeda, 48 O.G. 3432 [1950]; Fidelity Deposit Co. v. Wilson, 8 Phil. 51 [1907].
29

Santos v. Santos, et al., G.R. No. 133895, October 2, 2001; citing Montenegro v. Roxas de
Gomez, 58 Phil. 723 [1993]; Pasagui v. Villablanca, 68 SCRA 18 [1975].
30

Danguilan, supra.

31

Integrated Packaging Corporation v. Court of Appeals, et al., 333 SCRA 170 [2000]; citing De
Leon, Comments and Cases on Sales, p. 5 [1995]; Tolentino, IV Civil Code of the Philippines, p.
175 [1985].
32

253 SCRA 187, 194 [1996].

33

Took effect on February 1, 1903.

Sec. 70. Adverse Claim Whoever claims any part or interest in registered land adverse to the
registered owner, arising subsequent to the date of the original registration, may, if no other
provision is made in this Decree for registering the same, make a statement in writing setting forth
fully his alleged right or interest, and how or under whom acquired, a reference to the number of
certificate of title of the registered owner, the name of the registered owner, and a description of the
land in which the right or interest is claimed.
34

The statement shall be signed and sworn to, and shall state the adverse claimant's
residence, and a place at which all notices may be served upon him. This statement shall
be entitled to registration as an adverse claim on the certificate of title. The adverse claim
shall be effective for a period of thirty days from the date of registration. After the lapse of
said period, the annotation of adverse claim may be cancelled upon filing of a verified
petition therefor by the party in interest: Provided, however, that after cancellation, no
second adverse claim based on the same ground shall be registered by the same
claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the
Court of First Instance where the land is situated for the cancellation of the adverse claim,
and the court shall grant a speedy hearing upon the question of the validity of such
adverse claim, and shall render judgment as may be just and equitable. If the adverse
claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in
any case, the court, after notice and hearing shall find that the adverse claim thus
registered was frivolous, it may fine the claimant in an amount not less than one thousand
pesos, nor more than five thousand pesos, in its discretion. Before the lapse of thirty days,

46

the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn
petition to that effect. (P.D. No. 1529 took effect on June 11, 1978).
35

Sanojas v. Court of Appeals, 258 SCRA 79, 93-94 [1996].

36

132 SCRA 209, 211-212 [1984], citing Roxas v. Dinglasan, 28 SCRA 430 (1969); Jovellanos
Dimalanta, 105 Phil. 1250 (1959).
37

Sec. 57. An owner desiring to convey in fee his registered land or any portion thereof shall
execute a deed of conveyance, which the grantor or grantee may present to the register of deeds in
the province where the land lies, The grantor's duplicate certificate shall be produced and
presented at the same time. The register of deeds shall thereupon, in accordance with the rules
and instructions of the court, make out in the registration book a new certificate of title to the
grantee, and shall prepare and deliver to him an owners duplicate certificate. The register of
deeds shall note upon the original and duplicate certificates the date of transfer, the volume and
page of the registration book where the new certificate is registered, and a reference by number to
the last prior certificate. The grantors duplicate certificate shall be surrendered, and the word
"canceled" stamped upon it. The original certificate shall also be stamped "canceled." The deed of
conveyance shall be filed and indorsed with the number and place of registration of the certificate
of title of the land conveyed.
38

SEC. 55. No new certificate of title shall be entered, no memorandum shall be made upon any
certificate of title by the register of deeds, in pursuance of any deed or other voluntary instrument,
unless the owners duplicate certificate is presented for such endorsement, except in cases
expressly provided for in this Act, or upon the order of the court for cause shown; and whenever
such order is made, a memorandum thereof shall be entered upon the new certificate of title and
upon the owners duplicate
The production of the owners duplicate certificate whenever a voluntary instrument is
presented for registration shall be conclusive authority from the registered owner to the
register of deeds to enter a new certificate or to make a memorandum shall be signing
upon the registered owner and upon all persons claiming under him in favor of every
purchaser for value and in good faith(Now Section 52 of P.D. No. 1529)
39

L.P. Leviste & Company, Inc. v. Noblejas et al., 89 SCRA 520, 529 [1979].

40

R.F. Navarro & Co., Inc. v. Hon. Fotunato A. Vailoces, G.R. No. 102313, July 12, 2001, citing
Vda. De Cabrera v. Court of Appeals, 267 SCRA 339 [1997].
41

Pangilinan, et al., v. Court of Appeals, et al., 279 SCRA 590, 601 [1997].

I. RECLAMATION
Case:
G.R. No. 103882 November 25, 1998
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION, respondents,
CULTURAL CENTER OF THE PHILIPPINES, intervenor.
G.R. No. 105276 November 25, 1998
PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,
vs.
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

47

PURISIMA, J.:
At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of Court.
Here, the Court is confronted with a case commenced before the then Court of First Instance (now Regional
Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has spanned six administrations
of the Republic and outlasted the tenure of ten (10) Chief Justices of the Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January 29,
1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals 1 which affirmed with modification
the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P,
entitled "Republic of the Philippines vs. Pasay City and Republic Real Estate Corporation".
The facts that matter are, as follows:
Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the reclamation of
foreshore lands by chartered cities and municipalities. Section I of said law, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake
and carry out at their own expense the reclamation by dredging, filling, or other means, of
any foreshore lands bordering them, and to establish, provide, construct, maintain and
repair proper and adequate docking and harbor facilities as such municipalities and
chartered cities may determine in consultation with the Secretary of Finance and the
Secretary of Public Works and Communications.
On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passed Ordinance
No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay City, empowering
the City Mayor to award and enter into reclamation contracts, and prescribing terms and conditions therefor.
The said Ordinance was amended on April 21, 1959 by Ordinance No. 158, which authorized the Republic
Real Estate Corporation ("RREC") to reclaim foreshore lands of Pasay City under certain terms and
conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement 2 for the reclamation of the foreshore
lands in Pasay City.
On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3 for Recovery of
Possession and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction, docketed
as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4 questioning subject
Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such
Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and that
the said Agreement was executed without any public bidding.
The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that the
subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands" within
the contemplation of RA 1899 has a broader meaning than the cited definition of the term in the Words and
Phrases and in the Webster's Third New International Dictionary and the plans and specifications of the
reclamation involved were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of Rizal
(Branch 7, Pasay City) issued an Order 6 the dispositive portion of which was to the following effect:
WHEREFORE, the court hereby orders the defendants, their agents, and all persons
claiming under them, to refrain from "further reclaiming or committing acts of
dispossession or dispoilation over any area within the Manila Bay or the Manila Bay
Beach Resort", until further orders of the court.

48

On the following day, the same trial court issued a writ of preliminary injunction 7 which enjoined the
defendants, RREC and Pasay City, their agents, and all persons claiming under them "from further
reclaiming or committing acts of dispossession."
Thereafter, a Motion to Intervene 8, dated June 27, 1962, was filed by Jose L. Bautista, Emiliano Custodio,
Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R.
Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora Enterprises, Inc.,
Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines, and Bayview Hotel, Inc.
stating inter alia that they were buyers of lots in the Manila Bay area being reclaimed by RREC, whose rights
would be affected by whatever decision to be rendered in the case. The Motion was granted by the trial
court and the Answer attached thereto admitted. 9
The defendants and the intervenors then moved to dismiss 10 the Complaint of the Republic, placing reliance
on Section 3 of Republic Act No. 5187, which reads:
Sec. 3. Miscellaneous Projectsxxx xxx xxx
m. For the construction of seawall and limited access highway from the
south boundary of the City of Manila to Cavite City, to the south, and
from the north boundary of the City of Manila to the municipality of
Mariveles, province of Bataan, to the north, including the reclamation of
the foreshore and submerged areas: Provided, That priority in the
construction of such seawalls, highway and attendant reclamation works
shall be given to any corporation and/or corporations that may offer to
undertake at its own expense such projects, in which case the President
of the Philippines may, after competitive didding, award contracts for the
construction of such project, with the winning bidder shouldering all
costs thereof, the same to be paid in terms of percentage fee of the
contractor which shall not exceed fifty percent of the area reclaimed by
the contractor and shall represent full compensation for the purpose, the
provisions of the Public Land Law concerning disposition of reclaimed
and foreshore lands to the contrary notwithstanding: Provided, finally,
that the foregoing provisions and those of other laws, executive orders,
rules and regulations to the contrary notwithstanding, existing rights,
projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. . . . .
(emphasis ours).
Since the aforecited law provides that existing contracts shall be respected, movants contended
that the issues raised by the pleadings have become "moot, academic and of no further validity or
effect."
Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11, alleging as legal
interest in the matter in litigation the avowed purpose of the organization for the promotion of good
government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the said
intervention 12.
On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended
Complaint, (3) the Answer of Defendant Republic Real Estate Corporation to the first
Amended Complaint, (4) the Answer of Defendant Pasay City to the first Amended
Complaint, (5) the Second Amended Complaint, (6) the Answer of Defendant Republic
Real Estate Corporation to the Second Amended Complaint, (7) the Answer of Defendant
Pasay City to the Second Amended Complaint, (8) the Memorandum in Support of
Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the Opposition to the
Issuance of Preliminary Injunction of Defendant Pasay City and Defendant Republic Real
Estate Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11)
Plaintiff's Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to

49

Intervene of Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties,
(14) the Motion for Leave to Intervene of Intervenor Pasay Law and Conscience Union,
Inc., (15) the Opposition to Motion For Leave to Intervene of Intervenors Bautista, et. al.,
(16) the Reply of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement
to Opposition to Motion to Intervene of Defendant Pasay City and Republic Real Estate
Corporation (18) the Complain in Intervention of Intervenor Pasay Law and Conscience
Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation, (20) the
Answer of Intervenor Jose L. Bautista, et. al., to Complaint in Intervention, (21) the Motion
to Dismiss of Defendant Republic Real Estate Corporation, and Intervenors Bautista, et.
al., (22) the Opposition of Plaintiff to said Motion to Dismiss, (23) the Opposition of
Intervenor Pasay Law and Conscience Union, Inc., (24) the Memorandum of the
Defendant Republic Real Estate Corporation, (25) the Memorandum for the Intervenor
Pasay Law and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by the
Office of the Solicitor General, and all the documentary evidence by the parties to wit: (a)
Plaintiff's Exhibits "A" to "YYY- 4", (b) Defendant Republic Real Estate Corporation's
Exhibits "1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc's.,
Exhibits "A-PLACU" to "C-PLACU", the Court hereby:
(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic Real
Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that
Republic Act No. 5187 was not passed by Congress to cure any defect in the ordinance
and agreement in question and that the passage of said Republic Act No. 5187 did not
make the legal issues raised in the pleadings "moot, academic and of no further validity or
effect;" and
(2) Renders judgment:
(a) dismissing the Plaintiff's Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience
Union, Inc.,
(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to
have all the plans and specifications in the reclamation approved by the Director of Public
Works and to have all the contracts and sub-contracts for said reclamation awarded by
means of, and only after, public bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as
Defendant Republic Real Estate Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to the Director of Public Works, and
shall have obtained approval thereof, and as soon as the corresponding public bidding for
the award to the contractor and sub-contractor that will undertake the reclamation project
shall have been effected.
No pronouncement as to costs.
SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals. However, on
January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A issued, amending
Presidential Decree No. 3, thus:
Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby
amended by the addition of the following paragraphs:
The provisions of any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National Government or any
person authorized by it under a proper contract.

50

All reclamations made in violation of this provision shall be forfeited to the State without
need of judicial action.
Contracts for reclamation still legally existing or whose validity has been accepted by the
National Government shall be taken over by the National Government on the basis of
quantum meruit, for proper prosecution of the project involved by administration.
On November 20, 1973, the Republic and the Construction Development Corporation of the Philippines
("CDCP") signed a Contract 13 for the Manila-Cavite Coastal Road Project (Phases I and II) which contract
included the reclamation and development of areas covered by the Agreement between Pasay City and
RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the Public Estate
Authority ("PEA") the rights and obligations of the Republic of the Philippines under the contract between the
Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and those
of Pasay City and RREC, on the other, did not work out. The parties involved failed to hammer out a
compromise.
On January 28, 1992, the Court of Appeals came out with a Decision 14 dismissing the appeal of the
Republic and holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the following
modifications:
1. The requirement by the trial court on public bidding and submission of RREC's plans
specification to the Department Public Works and Highways in order that RREC may
continue the implementation of the reclamation work is deleted for being moot and
academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession
over all vacant spaces in the twenty-one hectare area already reclaimed by Pasay City
and RREC at the time it took over the same. Areas thereat over which permanent
structures has (sic) been introduced shall, including the structures, remain in the
possession of the present possessor, subject to any negotiation between Pasay City and
the said present possessor, as regards the continued possession and ownership of the
latter area.
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the TwentyOne (21) hectares of land already reclaimed by it, to be exercised within one (1) year from
the finality of this decision, at the same terms and condition embodied in the Pasay CityRREC reclamation contract, and enjoining appellee Pasay City to respect RREC's option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision of
the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55) hectares,
and not only Twenty-one (21) hectares, and the respondent Court of Appeals erred in not awarding damages
to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by
amending the dispositive portion of its judgment of January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby
AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the submission of the RREC's
plans and specification to the Department of Public Works and Highways in order that

51

RREC may continue the implementation of the reclamation work is deleted for being moot
and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of
the above enumerated lots (1 to 9).
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land
referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from the
finality of this Decision, at the same terms and condition embodied in the Pasay CityRREC reclamation contract, and enjoining Pasay City to respect RREC's irrevocable
option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the
Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit with different
prayers.
On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to hear
and receive evidence on the controversy. The corresponding Commissioner's Report, dated November 25,
1997, was submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention, theorizing
that it has a direct interest in the case being the owner of subject nine (9) lots titled in its (CCP) name, which
the respondent Court of Appeals ordered to be turned over to Pasay City. The CCP, as such intervenor, was
allowed to present its evidence, as it did, before the Court of Appeals, which evidence has been considered
in the formulation of this disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:
I. THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY ORDINANCE NO.
158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY
CITY AND RREC;
II. THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55 HECTARES AND IN
ORDERING THE TURN-OVER TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9)
LOTS TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:
I. THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE NO. 3-A
UNCONSTITUTIONAL;
II. THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY CITY AND
RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and the
Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.
Sec. 1 of RA 1899, reads:

52

Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at
their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering
them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor
facilities as such municipalities and chartered cities may determine in consultation with the Secretary of
Finance and the Secretary of Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands along the
seaside of Pasay City 15; that what Pasay City has are submerged or offshore areas outside the commerce
of man which could not be a proper subject matter of the Agreement between Pasay City and RREC in
question as the area affected is within the National Park, known as Manila Bay Beach Resort, established
under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it (Republic) has
been in open, continuous and peaceful possession since time immemorial.
Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land"
through the following disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a request for an opinion from the then
Secretary of Public Works and Communications as to whether the term, "foreshore areas" as used in
Section I of the immediately aforequoted law is that defined in Webster's Dictionary and the Law of Waters
so as to make any dredging or filling beyond its prescribed limit illegal, opined:
According to the basic letter of the Director of Public Works, the law of Waters speaks of "shore" and defines
it thus: "that space movement of the tide. Its interior or terrestrial limit in the line reached by highest
equinoctial tides."
Webster's definition of foreshore reads as follows:
That part of the shore between high water and low-water marks usually fixed at the line to which the ordinary
means tide flows: also, by extension, the beach, the shore near the water's edge.
If we were to be strictly literal the term foreshore or foreshore lands should be confined to but a portion of
the shore, in itself a very limited area. (p. 6, Intervenors-appellees' brief).
Bearing in mind the (Webster's and Law of Waters) definitions of "shore" and of foreshore lands, one is
struck with the apparent inconsistency between the areas thus described and the purpose to which that
area, when reclaimed under the provision of Republic Act No. 1899, shall be devoted. Section I (of said Law)
authorizes the construction thereat of "adequate docking and harbor facilities". This purpose is repeated in
Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend only from 10 to 20 meters along the coast.
Not very much more if at all. In fact certain parts in Manila bordering on Manila Bay, has no foreshore to
speak of since the sea washes the sea wall.
It does not seem logical, then, that Congress had in mind. Webster's limited concept of foreshore when it
enacted Republic Act No. 1899, unless it intends that the wharves, piers, docks, etc. should be constructed
parallel to the shore, which is impractical.
Since it is to be presumed that Congress could not have intended to enact an ineffectual measure not one
that would lead to absurd consequences, it would seem that it used "foreshore" in a sense wider in scope
that defined by Webster. . . .
To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any refutation or
contrary opinion. Neither can we. In fact, the above construction is consistent with the "rule on context" in

53

statutory construction which provides that in construing a statute, the same must be construed as a whole.
The particular words, clauses and phrases should not be studied as detached and isolated expressions, but
the whole and every part of the statute must be considered in fixing the meaning of any of its parts in order
to produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil. 709). There are two reasons for this.
Firstly, the force and significance of particular expressions will largely depend upon the connection in which
they are found and their relation to the general subject-matter of the law. The legislature must be understood
to have expressed its whole mind on the special object to which the legislative act is directed but the vehicle
for the expressions of that meaning is the statute, considered as one entire and continuous act, and not as
an agglomeration of unrelated clauses. Each clause or provision will be illuminated by those which are
cognate to it and by the general tenor of the whole statute and thus obscurities end ambiguities may often
be cleared up by the most direct and natural means. Secondly effect must be given, if it is possible, to every
word and clause of the statute, so that nothing shall be left devoid of meaning or destitute of force. To this
end, each provision of the statute should be read in the light of the whole. For the general meaning of the
legislature, as gathered from the entire act, may often prevail over the construction which would appear to
be the most natural and obvious on the face of a particular clause. If is by this means that contradiction and
repugnance between the different parts of the statute may be avoided. (See Black, Interpretation of Laws,
2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the "Explanatory Note" to House Bill No. 3830, which was subsequently enacted
as Republic Act No. 1899, reads:
In order to develop and expand the Maritime Commerce of the Philippines, it is necessary that harbor
facilities be correspondingly improved and, where necessary, expanded and developed. The national
government is not in a financial position to handle all this work. On the other hand, with a greater autonomy
many chartered cities and provinces are financially able to have credit position which will allow them to
undertake these projects. Some cities, such as the City of Bacolod under R.A. 161, has been authorized to
reclaim foreshore lands bordering it.
Other cities end provinces have continuously been requesting for authority to reclaim foreshore lands on the
basis of the Bacolod City pattern, and to undertake work to establish, construct on the reclaimed area and
maintain such port facilities as may be necessary. In order not to unduly delay the undertaking of these
projects, and inorder to obviate the passage of individual pieces of legislation for every chartered city and
province, it is hereby recommended that the accompanying bill be approved. It covers Authority for All
chartered cities and provinces to undertake this work. . . . (emphasis supplied)
Utilizing the above explanatory note in interpreting and construing the provisions of R.A. 1899, then
Secretary of Justice Mabanag opined:
It is clear that the "Bacolod City pattern" was the basis of the enactment of the aforementioned bill of general
application. This so-called "Bacolod City pattern" appears to be composed of 3 parts, namely: Republic Ad
No. 161, which grants authority to Bacolod City to undertake or carry out . . . the reclamation . . . of any [sic]
carry out the reclamation project conformably with Republic Act No. 161; and Republic Act No. 1132
authorizing Bacolod City to contract indebtedness or to issue bonds in the amount not exceeding six million
pesos to finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the precise space therein referred to as "foreshore" lands, but it
provided that docking and harbor facilities should be erected on the reclaimed portions thereof, while not
conclusive would indicate that Congress used the word "foreshore" in its broadest sense. Significantly, the
plan of reclamation of foreshore drawn up by the Bureau of Public Works maps out an area of approximately
1,600,000 square meters, the boundaries of which clearly extend way beyond Webster's limited concept of
the term "foreshore". As a contemporaneous construction by that branch of the Government empowered to
oversee at least, the conduct of the work, such an interpretation deserves great weight. Finally, Congress in
enacting Republic Act No. 1132 (supplement to RA 161), tacitly confirmed and approved the Bureau's

54

interpretation of the term 'foreshore' when instead of taking the occasion to correct the Bureau of over
extending its plan, it authorized the city of Bacolod to raise the full estimated cost of reclaiming the total area
covered by the plan. The explanatory note to House Bill No. 1249 which became Republic Act No. 1132
states among the things:
The Bureau of Public Works already prepared a plan for the reclamation of about 1,600,000 square meters
of land at an estimated costs of about P6,000,000.00. The project is self-supporting because the proceeds
from the sales or leases of lands so reclaimed will be more than sufficient to cover the cost of the project.
Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the reclamation by local
governments of foreshore lands on the basis of the Bacolod City pattern and in order to obviate the passage
of individual pieces of legislation for every chartered city and provinces requesting authority to undertake
such projects, the lawmaking body could not have had in mind the limited area described by Webster as
"foreshore" lands. . . . .
If it was really the intention of Congress to limit the area to the strict literal meaning of "foreshore" lands
which may be reclaimed by chartered cities and municipalities, Congress would have excluded the cities of
Manila, Iloilo, Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by Senator
Cuenco during the deliberation of the bill considering that these cities do not have 'foreshore' lands in the
strict meaning of the term. Yet, Congress did not approve the proposed amendment of Senator Cuenco,
implying therefore, that Congress intended not to limit the area that may be reclaimed to the strict definition
of "foreshore" lands.
The opinion of the then Secretary of Justice Mabanag, who was at that time the chief law officer and legal
adviser of the government and whose office is required by law to issue opinions for the guidance of the
various departments of the government, there being then no judicial interpretation to the contrary, is entitled
to respect (see Bengzon vs. Secretary of Justice and Insular Auditor, 68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated February 3, 1965 in Ponce vs. Gomez (L21870) and Ponce vs. City of Cebu (L-2266), by a unanimous vote of six (6) justices (the other five (5)
members deemed it unnecessary to express their view because in their opinion the questions raised were
not properly brought before the court), which in essence applied the strict dictionary meaning of "foreshore
lands" as used in RA 1899 in the case of the city of Cebu. But this was promulgated long after the then
Secretary of Justice Mabanag rendered the above opinion on November 16, 1959 and long after RREC has
started the subject reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme Court issued the aforementioned
Resolution, enacted RA 5187. In Sec. 3 (m) of said law, Congress appropriated money "for the construction
of the seawall and limited access highway from the South boundary of the city of Manila to Cavite City, to the
South, and from the North boundary of the city of Manila to the municipality of Mariveles, province of Bataan,
to the North (including the reclamation of foreshore and submerged areas . . . provided . . . that . . . existing
projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged
lands shall be respected . . ." This is a clear manifestation that Congress in enacting RA 1899, did not intend
to limit the interpretation of the term "foreshore land" to its dictionary meaning.
It is presumed that the legislature was acquainted with and had in mind the judicial construction given to a
former statute on the subject, and that the statute on the subject, and that the statute was enacted having in
mind the judicial construction that the prior enactment had received, or in the light of such existing judicial
decisions as have direct bearing upon it (see 50 Am. Jur., Sec. 321, pp. 312-313). But notwithstanding said
interpretation by the Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law covering the
same areas previously embraced in a RA 1899 (as mentioned earlier, cities without foreshore lands which
were sought to be excluded from the operation of RA 1899 were not excluded), providing that respect be
given the reclamation of not only foreshore lands but also of submerged lands signifying its non-conformity
to the judicial construction given to RA 1899. If Congress was in accord with the interpretation and

55

construction made by the Supreme Court on RA 1899, it would have mentioned reclamation of "foreshore
lands" only in RA 5187, but Congress included "submerged lands" in order to clarify the intention on the
grant of authority to cities and municipalities in the reclamation of lands bordering them as provided in RA
1899. It is, therefore, our opinion that it is actually the intention of Congress in RA 1899 not to limit the
authority granted to cities and municipalities to reclaim foreshore lands in its strict dictionary meaning but
rather in its wider scope as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the term
"foreshore lands" includes submerged areas. As can be gleaned from its disquisition and rationalization
aforequoted, the respondent court unduly stretched and broadened the meaning of "foreshore lands",
beyond the intentment of the law, and against the recognized legal connotation of "foreshore lands". Well
entrenched, to the point of being elementary, is the rule that when the law speaks in clear and categorical
language, there is no reason for interpretation or construction, but only for application. 16 So also, resort to
extrinsic aids, like the records of the constitutional convention, is unwarranted, the language of the law being
plain and unambiguous. 17 Then, too, opinions of the Secretary of Justice are unavailing to supplant or rectify
any mistake or omission in the law. 18 To repeat, the term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and dry
according to the flow of the tide. (Words and Phrases, "Foreshore")
A strip of land margining a body of water (as a lake or stream); the part of a seashore between the low-water
line usually at the seaward margin of a low-tide terrace and the upper limit of wave wash at high tide usually
marked by a beach scarp or berm. (Webster's Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning,
much less widen the coverage thereof. If the intention of Congress were to include submerged areas, it
should have provided expressly. That Congress did not so provide could only signify the exclusion of
submerged areas from the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965 in Ponce
v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act No. 5187
("RA 5187"), the relevant portion of which, reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from the south boundary of the City of Manila
to Cavite City, to the south, and from the north boundary of the City of Manila to the municipality of
Mariveles, province of Bataan, to the north, including the reclamation of the foreshore and submerged areas:
Provided, That priority in the construction of such seawalls, highway and attendant reclamation works shell
be given to any corporation and/or corporations that may offer to undertake at its own expense such
projects, in which case the President of the Philippines may, after competitive bidding, award contracts for
the construction of such projects, with the winning bidder shouldering all costs thereof, the same to be paid
in terms of percentage fee of the contractor which shall not exceed fifty percent of the area reclaimed by the
contractor and shall represent full compensation for the purpose, the provisions of the Public Land Law
concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally,
that the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. . . . .
There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope of
"foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled "AN

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ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH PREVIOUS
PUBLIC WORKS APPROPRIATIONS."
All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and Ponce
v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to the sea which is
alternately covered and left dry by the ordinary flow of the tides." As opined by this Court in said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo, Concepcion, Reyes, Barrera, Dizon and
Jose P. Bengzon) opine that said city ordinance and contracts are ultra vires and hence, null and void,
insofar as the remaining 60% of the area aforementioned, because the term "foreshore lands" as used in
Republic Act No. 1899 should be understood in the sense attached thereto by common parlance; (emphasis
ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated
December 22, 1966, in a case with analogous facts as the present one, to wit:
December 22, 1966
The Secretary of Agriculture and Natural Resources Diliman, Quezon City
Sir:
xxx xxx xxx
I. Facts
1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899, the Municipality of Navotas
enacted Ordinance No. 1 authorizing the Municipal Mayor to enter into a reclamation contract with Mr.
Chuanico.
2. On March 15, 1961, a reclamation contract was concluded between the Municipality of Navotas,
represented by the Municipal Mayor, and Mr. Chuanico in accordance with the above ordinance.
Thereunder, Mr. Chuanico shall be the attorney-in-fact of the Municipality in prosecuting the reclamation
project and shall advance the money needed therefor; that the actual expenses incurred shall be deemed a
loan to the Municipality; that Mr. Chuanico shall have the irrevocable option to buy 70% of the reclaimed
area at P7.00 per square meter; that he shall have the full and irrevocable powers to do any and all things
necessary and proper in and about the premises," including the power to hire necessary personnel for the
prosecution of the work, purchase materials and supplies, and purchase or lease construction machineries
and equipment, but any and all contracts to be concluded by him in behalf of the Municipality shall be
submitted to public bidding.
xxx xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed Resolution No. 22 approving and ratifying
the contract.
xxx xxx xxx
III. Comments

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1. The above reclamation contract was concluded on the basis of Navotas Ordinance No. 1 which, in turn,
had been enacted avowedly pursuant to Republic Act No. 1899. This being so, the contract, in order to be
valid, must conform to the provisions of the said law.
By authorizing local governments "to execute by administration any reclamation work," (Republic Act No.
1899 impliedly forbids the execution of said project by contract. Thus, in the case or Ponce et al. vs. Gomez
(February 3, 1966), five justices of the Supreme Court voted to annul the contract between Cebu
Development Corporation and Cebu City for the reclamation of foreshore lands because "the provisions of
said . . . contract are not . . . in accordance with the provisions of Republic Act No. 1899," as against one
Justice who opined that the contract substantially complied with the provisions of the said law. (Five Justices
expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar to the Cebu reclamation contract, it is
believed that the former is likewise fatally defective.
2. The Navotas reclamation project envisages the construction of a channel along the Manila Bay periphery
of that town and the reclamation of approximately 650 hectares of land from said channel to a seaward
distance of one kilometer. In the basic letter it is stated that "practically, all the 650 hectares of lands
proposed to be reclaimed under the agreement" do not constitute foreshore lands and that "the greater
portion of the area . . . is in fact navigable and presently being used as a fishing harbor by deep-sea fishing
operators as well as a fishing ground of sustenance fisherman. Assuming the correctness of these
averments, the Navotas reclamation contract evidently transcends the authority granted under Republic Act
No. 1899, which empowers the local governments to reclaim nothing more than "foreshore lands, i.e., "that
part of the land adjacent to the see which is alternately covered and left dry by the ordinary flow of the tides."
(26 C.J. 890.) It was for this reason that in the cited case Ponce case, the Supreme Court, by a vote of 6-0
with five Justices abstaining, declared ultra vires and void the contractual stipulation for the reclamation of
submerged lands off Cebu City, and permanently enjoined its execution under Republic Act No. 1899.
xxx xxx xxx
In accordance with the foregoing, I have the honor to submit the view that the Navotas reclamation contract
is not binding and should be disregarded for non-compliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice, of
this Court, did, in our considered view, supersede the earlier opinion of former justice Secretary Alejo
Mabanag, aforestated, as the cases, in connection with which subject opinions were sought, were with
similar facts. The said Teehankee opinion accords with RA 1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No.
158, and the Agreement under attack, have been found to be outside the intendment and scope of RA 1899,
and therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.
Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares. The
letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55
hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as it
required RREC to submit the pertinent papers to show its supposed accomplishment, to secure approval by

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the Ministry of Public Works and Highways to the reclamation plan, and to submit to a public bidding all
contracts and sub-contracts for subject reclamation project but RREC never complied with such
requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the reclamation project
were presented to reflect any accomplishment. Not even any statement or itemization of works
accomplished by contractors or subcontractors or vouchers and other relevant papers were introduced to
describe the extent of RREC's accomplishment. Neither was the requisite certification from the City
Engineer concerned that "portions of the reclamation project not less than 50 hectares in area shall have
been accomplished or completed" obtained and presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent thereof, as
of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other witness involved in
the alleged reclamation work of RREC testified on the 55 hectares supposedly reclaimed by RREC. What
work was done, who did the work, where was it commenced, and when was it completed, was never brought
to light by any witness before the court. Certainly, onus probandi was on RREC and Pasay City to show and
point out the as yet unidentified 55 hectares they allegedly reclaimed. But this burden of proof RREC and
Pasay City miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant,
now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction issued on April 26,
1962 would become effective only "as soon as Defendant Republic Real Estate Corporation and Defendant
Pasay City shall have submitted the corresponding plans and specifications to the Director of Public Work,
and shall have obtained approval thereof, and as soon as corresponding public bidding for the award to the
contractor and sub-contractor that will undertake the reclamation project shall have been effected." (Rollo,
pp. 127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such
prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority to
resume its reclamation work which was stopped by said writ of preliminary injunction issued on April 26,
1962.
From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC before
the lower court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced that only on
November 26, 1960 did RREC contract out the dredging work to C and A Construction Company, Inc., for
the reclamation of the 55 hectares initially programmed to be reclaimed by it. But, as stated by RREC itself
in the position paper filed with this Court on July 15, 1997, with reference to CDCP's reclamation work,
mobilization of the reclamation team would take one year before a reclamation work could actually begin.
Therefore, the reclamation work undertaker by RREC could not have started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its reclamation
work, it had barely five (5) months, from November, 1961 to April, 1962, to work on subject reclamation
project. It was thus physically impossible for RREC to reclaim 55 hectares, with the stipulated specifications
and elevation, in such a brief span of time. In the report of RREC (Exhibit "DD" for CCP), it was conceded
that due to the writ of preliminary injunction issued on April 26, 1962, C and A Construction Co., Inc. had
suspended its dredging operation since May, 1962.
The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress
Report marked Exhibit "DD", is a schematic representation of the work accomplishment referred to in such
Progress Report, indicating the various elevations of the land surface it embraced, ranging from 0.00 meters
to the highest elevation of 2.5 meters above MLLW. Such portrayal of work accomplished is crucial in our
determination of whether or not RREC had actually "reclaimed" any land as under its Contract for Dredging
Work with C and A Construction Company (Exhibit "EE", the required final elevation for a completely
reclaimed land was 3.5 meters above MLLW, as explicitly provided in said Contract for Dredging Work. So,
the irresistible conclusion is when the work on subject RREC-Pasay City reclamation project stopped in
April, 1962 in compliance with the writ of preliminary injunction issued by the trial court of origin, no portion
of the reclamation project worked on by RREC had reached the stipulated elevation of 3.5 meters above
MLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In short, RREC had
not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.

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On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of Leandro V.
Locsin and partners, Architect and City Planner Manuel T. Maoza, Jr. of Planning Resources and Operation
System, Inc., Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to 1970, and Dr.
Lucrecia Kasilag, National Artist and member of CCP Advisory Committee, come to the fore. These credible,
impartial and knowledgeable witnesses recounted on the witness stand that when the construction of the
Main Building of the Cultural Center of the Philippines (CCP) began in 1966, the only surface land available
was the site for the said building (TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of
and behind it was all water (TSN, Sept. 29, 1997 pages 127-128). When the CCP Main Building was being
constructed, from 1968 to 1969, the land above sea level thereat was only where the CCP Main Building
was erected and the rest of the surroundings were all under water, particularly the back portion fronting the
bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April 16,
1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept. 30, 1997,
pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the
requirement by the trial court on public bidding and the submission of RREC's plans and specification to the
Department of Public Works and Highways in order that RREC may continue the implementation of the
reclamation work is deleted for being moot and academic." Said requirement has never become moot and
academic. It has remained indispensable, as ever, and non-compliance therewith restrained RREC from
lawfully resuming the reclamation work under controversy, notwithstanding the rendition below of the
decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the prescribed
elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with the former
Ministry of Public Highways, a claim for compensation of P30,396,878.20, for reclamation work allegedly
done before the CDCP started working on the reclamation of the CCP grounds. On September 7, 1979,
RREC asked the Solicitor General to settle its subject claim for compensation at the same amount of
P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume accomplished and other
relevant information gathered by the former Ministry of Public Highways, the Solicitor General informed
RREC that the value of what it had accomplished, based on 1962 price levels, was only P8,344,741.29, and
the expenses for mobilization of equipment amounted to P2,581,330.00. The aforesaid evaluation made by
the government, through the then Minister of Public Highways, is factual and realistic, so much so that on
June 25, 1981, RREC, in its reply letter to the Solicitor General, stated:
We regret that we are not agreeable to the amount of P10,926,071.29, based on 1962 cost data, etc., as
compensation based on quantum meruit. The least we would consider is the amount of P10,926,071.29 plus
interest at the rate of 6% per annum from 1962 to the time of payment. We feel that 6% is very much less
than the accepted rate of inflation that has supervened since 1962 to the present, and even less than the
present legal rate of 12% per annum. 19
Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fill of
1,558,395 cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to wit:
LOT NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the Restaurant name of GSIS 3 Asean Garden 76,299 sq.m. OCT
10251 in the name of CCP 12 Folk Arts Theater 1.7503 hec. TCT 18627 in the and PICC parking name of
CCP space 22 landscaped with 132,924 sq.m. TCT 75676 in the sculpture of Asean name of CCP Artistssite of Boom na Boom 23 open space, back 34,346 sq.m. TCT 75677 in the of Philcite name of CCP 24
Parking space for 10,352 sq.m. TCT 75678 in the Star City, CCP, name of CCP Philcite 25 open space
11,323 sq.m. TCT 75679 in the occupied by Star name of CCP City 28 open space, 27,689 sq.m. TCT
75684 in the beside PICC name of CCP 29 open space, 106,067 sq.m. TCT 75681 in the leased by El name
of CCP Shaddai We discern no factual basis nor any legal justification therefor. In the first place, in their
answer to the Complaint and Amended Complaint below, RREC and Pasay City never prayed for the

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transfer to Pasay City of subject lots, title to which had long become indefeasible in favor of the rightful title
holders, CCP and GSIS, respectively.
The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no moment. It
did not vest in Pasay City and RREC any real right superior to the absolute ownership thereover of CCP and
GSIS. Besides, the nature of the action did not really warrant the issuance of a notice of lis pendens.
Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:
Sec. 14. Notice of lis pendens. In an action affecting the title or the right of possession of real properly,
the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in the office of the
registry of deeds of the province in which the property is situated a notice of the pendency of the action. Said
notice shall contain the names of the parties and the object of the action or defense, and a description of the
property in that province affected thereby. Only from the time of filing such notice for record shall a
purchaser, or encumbrancer of the property affected thereby, be deemed to have constructive notice of the
pendency of the action, and only of its pendency against the parties designated by their real names.
The notice of lis pendens herein above mentioned may be cancelled only upon order of the court, after
proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to
protect the rights of the party who caused it to be recorded.
Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is for
recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as
defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled lots
aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title, whether
fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili vs. National
Labor Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.)
Unmistakable, and cannot be ignored, is the germane provision of Section 48 of P.D. 1529, that a certificate
of title can never be the subject of a collateral attack. It cannot be altered, modified, or cancelled except in a
direct proceeding instituted in accordance with law.
Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject
reclamation project, it appearing that something compensable was accomplished by them, following the
applicable provision of law and hearkening to the dictates of equity, that no one, not even the government,
shall unjustly enrich oneself/itself at the expense of another 20, we believe; and so hold, that Pasay City and
RREC should be paid for the said actual work done and dredge-fill poured in, worth P10,926,071.29, as
verified by the former Ministry of Public Highways, and as claimed by RREC itself in its aforequoted letter
dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein
historic disposition, will be exalted by the future generations of Filipinos, for the preservation of the national
patrimony and promotion of our cultural heritage. As writer Channing rightly puts it: "Whatever expands the
affections, or enlarges the sphere of our sympathies Whatever makes us feel our relation to the universe
and all that it inherits in time and in eternity, and to the great and beneficent cause of all, must
unquestionably refine our nature, and elevate us in the scale of being."
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended
Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City Ordinance No.
121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the Reclamation
Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC) as authorized by said
city ordinances, are declared NULL and VOID for being ultra vires, and contrary to Rep. Act 1899.

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The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No. 2229-P is
made permanent and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV No. 51349
ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of and annotate on the
certificates of title involved, the cancellation of subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real Estate
Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND
TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon of six (6%) percent per annum
from May 1, 1962 until full payment, which amount shall be divided by Pasay City and RREC, share and
share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Melo, Quisumbing and Pardo, JJ., concur.
Narvasa, C.J., I DISSENT: Ponce is not binding precedent, and P.D. 3-A is in utter nullity:
Davide, Jr., J., also that of the concurring opinion of Mr. Justice Puno.
Romero, J., Please see Separate Opinion.
Puno, J., Please see Concurring Opinion.
Vitug, J., In the result.
Kapunan, J., No part, having appeared for the Gov't. when I was in the OSG.
Mendoza, J., I concur in this and in the concurring opinion of Justice Puno.
Panganiban, J., Please see Separate Opinion.
Martinez, J., I join the Chief Justice in his dissent.
Separate Opinions
ROMERO, J., separate opinion;
Culture doesn't save anything or any-one, it doesn't justify. But it's a product of man: he projects himself into
it, he recognizes himself in it; that critical mirror alone offers him his image." So said Jean Paul Sartre, one
of the greatest philosophical thinkers of our time. Matthew Arnold referred to it as the "pursuit of our total
perfection" or the "study of perfection." The English mathematican and philosopher Alfred North Whitehead,
placing premium on human subjectivity, declared, "Culture is activity of thought, and receptiveness to beauty
and humane feeling.
Image, perfection, beauty, and feeling. These are elements which are also associated with art and creation.
Yet, art in itself is a multi-faceted concept. The revered and, at times, controversial President John Fitzgerald
Kennedy, in one of his numerous speeches, elevated art to the level of a pyscho-social necessity of man
when he said, ". . . (A)rt establishes the basic human truths which ust serve as the touchstone of our
judgment." Indeed, there is no question that art satisfies one of the deepest spiritual needs of man.

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Of course, when one speaks of art and culture, he in fact speaks of it in two ways: the abstract and the
concrete. What is abstract is conditioned by time; that which is and the concrete is ravaged by it. While the
concept of "culture and art" endures man's folies, amassing innumerable, priceless enhancements as it
effortlessly slides through generations of human progress, its tangible counterpart, that which is preserved
for our children's appreciation, is unfortunately fragile. Art works, music, architecture, literature, and other
cultural embellishments which exhibit extraordinary longevity are proclaimed as national treasures, and
rightly so, for they are lasting testiminials of man's boundless imagination and creativity, that single trait that
places the human species above all other creatures of the Almighty.
Most evidence of a culture's richness are lost, not in the tide of nature's frivolity, but through man's
foolishness and capriciousness. Wars used to be the main culprit in the virtual obliteration of the works of
ancient scholars. We are now, and for the past century or so, faced with a greater foe: progress. Progress
and development are the hallmarks of successful governance. Our leaders, and there are so many of them
now, decide "what is best" for the public. Inopportunely, what is perceived to be in the "best interest" of the
majority in the name of "progress" may sometimes, and in the long run, the calamitous to the entire people
in terms of cultural atrophy. This is the quandary in which this Court finds itself as it attempts to weigh once
more private rights against sovereignty and the general welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated petitions follow.
Pursuant to Republic Act No. 1899, which authorized chartered cities and municipalities to reclaim adjoining
foreshore lands, the City Council of Pasay resolved to reclaim a portion of the Manila Bay covering the
Manila-Pasay-Paraaque bounderies and, for this purpose, enacted Ordinance No. 121 on May 6, 1958.
Two days later, on the strength of said ordinance, Pasay City Mayor Pablo Cuneta contracted with Republic
Real Estate Corporation (RREC) for the reclamation of portions of the Manila Bay. On April 21, 1959, the
City Council of Pasay amended Ordinance No. 121 by enacting Ordinance No. 158. A new agreement
between the parties (the Reclamation Agreement) was executed three days thereafter, whcih, among other
things, granted the reclamation project to RREC and gave it an irrevocable option to purchase a maximum
of 60% of the area reclaimed at P10.00 per square meter, the amount of which could be set off against any
outstanding obligation of the City to RREC. Such an option could only be effected within a year from the time
the City Engineer certified that 50 hectares had been reclaimed. The reclamation itself was made by the
RREC through third parties who were awarded contracts on the various phases of the project through public
bidding. To raise more funds, RREC entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed a complaint (amended on March 5, 1962)
against Pasay City and RREC for "Recovery of Possession and Damages with Writ of Preliminary
Preventive Injunction and Mandatory Injunction" before Branch 7 of the then Court of First Instance of Rizal,
Pasay City, praying for the declaration of nullity of Ordinance Nos. 121 and 158, the Reclamation
Agreement, and the Contracts to Sell between RREC and the buyers of the reclaimed land. Among other
things, the following matters were alleged: (a) the area reclaimed was already reserved as a national park
under Proclamation No. 41, dated July 5, 1954 and Act No. 3915, hence, the subject of the Reclamation
Agreement was beyond man's commerce; (b) Ordinance Nos. 121 and 158 were ultra vires and void ab
initio for being violative of R.A. No. 1899, because they involved the reclamation of "submerged areas" and
not "foreshore lands" as allowed by said law; and (c) the Reclamation Agreement was illegal, contrary to
morals and public policy because it was executed with neither authority from the National Government nor
any public bidding.
In their separate answer, Pasay City and RREC set forth the following negative defenses: (a) Pasay City
was empowered by R.A. No. 1899 to reclaim any portion of the Manila Bay; (b) the area reclaimed was not a
portion of the Manila Bay Resort, which was the area reserved as a national park under Proclamation No. 41
and Act No. 3915; (c) under R.A. No. 1899, the term "foreshore lands" meant much more than its technical
definition and extended to submerged areas beyond the water marks of the shore; and (d) all the actuations
of the City RREC regarding the reclamation project were in accordance with R.A. No. 1899 and related laws.

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On April 26, 1962, the trial court issued a writ of preliminary injunction ordering Pasay City and RREC to
refrain from their activities at the Manila Bay. On January 10, 1968, however, RREC filed a "Motion to
Dismiss" the complaint on the ground that the passage of Republic Act No. 5187 (otherwise known as the
Public Works Act) on September 16, 1967, rendered the issues raised by the Republic of the Philippines
moot and academic. Specifically, RREC relied on Section 3 (m) thereof which stated that all "contracts of city
or municipal governments for the reclamation of foreshore and submerged lands shall be respected" during
the construction by the national government of a sea wall and limited access highway passing through the
projected area of the reclamation. In the meantime, the trial court allowed Jose Bautista and others who
allegedly bought in good faith and for value from RREC some portions of the reclaimed land, to intervene in
the action and join cause with Pasay City and RREC. On the other hand, the Pasay Law and Conscience
Union, Inc. (PLCUI), a civic organization, joined with the Republic of the Philippines and filed a complaint in
intervention.
On May 24, 1972, the court a quo rendered a judgment on the pleadings, upholding the validity of Ordinance
Nos. 121 and 158 of the Reclamation Agreement; dismissing the complaint as well as PLCUI's complaint in
intervention; enjoining RREC and Pasay City "to have all the plans and specifications in the reclamation
approved by the Director of Public Works, and to have all the contracts and subcontracts for said
reclamation awarded by means of, and only after, public bidding"; and lifting the preliminary injunction, dated
April 26, 1962, as soon as said conditions shall have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of Appeals, President Marcos issued on January
11, 1973, Pressidential Decree No. 3-A, providing, inter alia, that "the reclamation of areas under water,
whether foreshore or inland, shall be limited to the National Government or any person aurhorized by it
under a proper contract," and that it shall take over any validly existing reclamation contract on the basis of
quantum meruit. On the strength of P.D. No. 3-A, the Commission of Public Highways and the Construction
Development Corporation of the Philippines (CDCP) took over the reclamation contract between Pasay City
and RREC for the construction of the Manila-Cavite City Coastal Road. CDCP development the area already
reclaimed by RREC and continued reclaiming where the latter left off. These areas, which came to be known
as the Cultural Center Complex and the Financial Center Complex, were registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was created by virtue of Presidential Decree No.
1084. It was designated as the agency primarily responsible for all the reclaation projects of the national
government. The PEA then took over the Manila Bay reclamation contract between the Republic of the
Philippines and CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry of Public Highways (MPH) for its actual
reclamation in the CCP Complex before CDCP assumed authority over the project. The MPH, on the other
hand, determined the amount of reclamation by RREC to be only P10,926,071.29. Later, RREC offered to
settle the case with the Office of the Solicitor General for the original amount of its claim. The OSG would,
however, settle only for the lesser amount assessed by the MPH. This was acceptable to RREC only with an
additional 6% interest per annum from 1962 up to the time of payment. Within the decade that followed,
RREC's proposals for settling the case ballooned from a P35,455,011.31 cash settlement or a property
settlement of 3.5 hectares in the CCP Complex covered by TCT No. 75676, to a cash settlement of P175
million, then later, P245 million. The Office of the President, to which the proposals were referred, rejected
the same. In other words, no amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision, affirming the trial court's judgment with the
following modifications: (a) the requirement on public bidding and submission of plans and specifications to
the DPWH by RREC was deleted; (b) the Republic of the Philippines was ordered to turn over to Pasay City
the ownership and possession of the 21 hectares already reclaimed by RREC; and (c) RREC's irrevocable
option to purchase 60% of the 21 hectares it had already reclaimed was sustained.
The amended decision

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On April 28, 1992, the appellate court rendered an amended decision. It agreed with the position of Pasay
City and RREC in their motion for reconsideration that the actual the reclaimed was 55, not 21, hectares.
Considering, however, that latter were willing to accept 35 hectares of open land in the CCP Complex, the
court ordered the Republic of the Philippines to reconvey to Pasay City and RREC said parcels of land
comprising nine lots registered in the name of CCP. This is the decision being assailed by both parties in the
instant consolidated petitions.
Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC,
valid and bindings as against the National Government and the Cultural Center of the Philippines?
The Republic of the Philippines claims that the Court of Appeals erred in sustaining the validity of Ordinance
Nos. 121 and 158 and the Reclamation Agreement executed pursuant thereto, and in ordering the
reconveyance of the nine lots titled in the name of CCP to the City of Pasay and RREC. It stresses that the
reclamation project undertaken by Pasay City and RREC violated R.A. No. 1899, especially since the
subject areas were "submerged lands", not "foreshore lands" which are the only lands that may be
reclaimed by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate court's amended decision was not
binding upon it because it was never made a party to the action and that it was compelled to intervene in the
instant petitions to protect its proprietary interests. It claims that the Court of Appeals erred in findings that
the actual area reclaimed by RREC was 55 hectares, and in ordering it to turn over to RREC and Pasay City
the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of Apealls erred in not ruling upon its
constitutionality, considering that said decree deprived them of their property and rights of ownership without
due process of law and without payment of just compensation, and that it violated the non-impairment
clause of the Constitution; and in not awarding them damages for the alleged illegal takeover of the
reclamation contract and the reclaimed area. Thus, they pray for the modification of the assailed amended
decision by awarding them damages and conveying to them, not merely 35, but 55 hectares of the land
allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a Resolution remanding the case to the Court
of Appeals to receive further evidence and determine the actual area reclaimed by RREC and the arreas of
the CCP Complex which are "open spaces." In its Commissioner's Report dated November 25, 1997, the
appellate court conclude that the CCP and the Solicitor General failed to refute its earleir finding that RREC
and Pasay City were able to reclaim 55 hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and
RREC, are null and void for violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the case of Republic v. Court of Appeals. 1
Although the subject of this case was part of the Laguna de Bay, the Court nevertheless applied Bouvier's
definition of "foreshore lands," viz: "that part of the land immediately in front of the shore; the part which is
between high and low water marks, and alternately covered with water and left dry by the flux and reflux of
the tides. It is indicated by a middle line between the highest and lowest tides."

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This judicial interpretation did not escape the attention of the legislature in the enactment of later related
laws. In R.A. No. 5187, for example, Congress specified the areas that may be reclaimed in the construction
of the Manila-Cavite City Coastal Road to include both "foreshore and submerged areas." The Chief
Executive also recognized the disparity between the two terms when he signed into law P.D. No. 3-A,
authorizing the reclamation of "areas under water, whether foreshore or inland." Similarly, P.D. No. 1094,
creating the Public Estates authority to "reclaim land, including foreshore and submerged areas."
Initially, legislative intent and later jurisprudential usage clearly delimited the term "foreshore lands" to that
part of the land where the tides literally converge, thus excluding submerged lands. This restricted
explication was unquestionably ackonwledged by the other branches of government when, in passing
subsequent related statutes, they added the terms "submerged areas" or "areas under water" to foreshore
lands." Under the principles of legal construction, since R.A No. 1899 partakes of the nature of a legislative
grant of a sovereign right to municipalities and chartered cities, that is, the right "to reclaim," it must be
strictly construed against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore lands." Thus, when RREC was
permitted by the City of Pasay, through Ordinance Nos. 121 and 158 and the ensuing Reclamation
Agreement, to reclaim up to a one-kilometer stretch into the Manila Bay, more than just "foreshore lands"
was obviously contemplated and involved. Furthermore, R.A. No. 1899 mandates that any reclamation must
be carried out by the municipality or chartered city concerned 2 with the aid of funds which it may borrow
from third persons or lending institution. 3 The reclamation of Manila Bay was undertaken, not by Pasay City,
but by RREC itself under a special power of attorney from Pasay City using funds exclusively borrowed by
the latter from RREC. To compound the anomaly of it all, the reclamation project itself was awarded by
Pasay City to RREC without any public bidding. Finally, to complete Pasay City's absolute abdication of its
duty to champion public over private interest, RREC was granted an irrevocable option to purchase the land
reclaimed in lieu of simply paying for it using a determinable and liquadated amount "in Philippine currency
or in the currency in which the principal has been originally received," 4 as required by R.A. No. 1899. In fact,
RREC began disposing of the land by entering into contracts to sell with various third persons while the
reclamation project was still in progress and long before it acquired any right of dominion over the lands yet
to be reclaimed. These are all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121 and 158, no
less than the Reclamation Agreement and the Contracts to Sell it has spawned, should all be deemed null
and void, the reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands of the public domain, including those
physically reclaimed. As a general rule, therefore, only the National Government can reclaim foreshore lands
and other submerged areas. At times, though, the State, to effectuate an expressed public, policy, delagates
some of its sovereign powers either to the legislature or to some of its alter egos. One such instance was
R.A. No. 1899 which was intended to increase the autonomy of local governments, an innovation introduced
by the Marcos administration. There is no doubt, however, that R.A. No. 1899 was a mere public grant, a
privilege which may be withdrawn by the granting authority, the sovereign, in the exercise of police power.
This is precisely what President Marcos did when he issued P.D. No. 3-A, a valid and effective means of
regaining the State's right to reclaim. It must be noted that this decree was not revoked by President Aquino
when she assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed by Pasay City and RREC, because, far
from singling out the latter, its terminology is simple and extensive enough to cover just about any
municipality or city. The decree was signed by President Marcos under his emergency powers when martial
law was in effect throughout the country. Thus, it is not an undue delegation or usurpation of legislation
power. Neither does it authorize the taking of property without just compensation, for it specifically allows
such payment, albeit based on quantum meruit. Incidentally, while RREC attacks the constitutionality of P.D.
No. 3-A, and only at this late stage in the proceedings, it relied on this "quantum meruit compensation"
clause in the same decree when it filed a claim before the then Ministry of Public Works way back in 1978
and again in 1983. This is an oddity which this Court takes notice of in disallowing RREC from taking
contrary positions regarding the validity of a statute in this action. It cannot take advantage of a provision of
law even as it attacks the same.

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Finally, the Court notes that the amended decision of the Court of Appeals dated April 28, 1992, is based on
inadequate evidence. Its conclusion that RREC was able to reclaim 35 hectares is totally unsupported by the
dubious proof presented by Pasay City and RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied mostly on three documents issued by
the government to the RREC, namely, the "Cost of Data for Items of Work Covered by the Republic Real
Estate Corporation for Work Performed in the Manila Bay" issued by the Ministry of Public Highways, and
two letters both addressed to RREC Executive Vice President Vicente Asuncion, Jr., one dated June 6,
1979, from then Minister of Public Highways Baltazar Aquino, and another, dated June 10, 1981; from then
Solicitor General Estelito Mendoza. These documents, however, never proved that RREC was able to
reclaim 35 hectares. In fact, the letter of Aquino, finding that RREC had reclaimed 55 hectares, was in its
own words, merely "tentative, pending the submittal of corroborative documents"; hence, it does not amount
to the "certification" contemplated in R.A. No. 1899. Mendoza's letter, on the other hand, far from supporting
RREC's position, rejected RREC's proposal in the latter's attempt at settlement. It is puzzling why the
appellate court even considered this letter in favor of RREC and Pasay City .
On the other hand, there is aimple proof that RREC was not able to reclaim the 55 hectares which it claims it
did, or even 35 hectares, as found by the Court of Appeals as follows: aerial photographs of the Manila Bay
area in 1966 and 1968; photographs of the CCP taken 1967 and 1968 during construction of the main
building; and the testimonies of the persons familiar with the circumstances under which said photographs
were taken, as well as the other witnesses who were, one way or another, connected with the construction
of the CCP main building, including a member of the Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable, there is no dispute that it did reclaim
some portion of the Manila Bay. In the preceding discussion, we declared the nullity of Ordinace Nos. 121
and 158 and the Reclamation Agreement, which are the wellsprings of RREC's right to be compensated. Its
reclamation efforts were also found to be ultra vires. Equity and fairness, however, dictate that it be
compensated for the work actually performed by it. After all, the State cannot deny that it did benefit from
such reclamation. RREC was initially willing to settle the case for P30,396,878.20. In view of the foregoing
premises, we believe that RREC should only be given the amount which the State was willing to pay, that is
P10,929,071.29, without legal interest. It is axiomatic that legal interest is given either for the use of the
money (a loan or forbearance of money) or as a penalty for beach of an obligation (damages). In the case of
Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court had occassion to set the guidelines by which
litigants may claim or be awarded interest as or by way of actual or compensatory damages. Thus,
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e.,
a loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the court
at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated
claims or damages can be established with reasonable certainty. Accordingly, were the
demand is established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at which
time the quantification damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged. . . . (Citations omitted)

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These are the only circumstances under which interest in the concept of actual or compensatory damages,
liquidated or otherwise, may be justified. In the case at bar, no loan or forbearance of money is involved;
neither is there any breach of obligation. Consequently, the lone commitment of the State would be the
payment for services allegedly rendered, services for which RREC would have the National Government
cede to it its property, the value of which has been inflated to unimaginable proportions since the inception of
the reclamation project. This is manifestly cupidity at its worst. Neither should the state be penalized for
something for which it is entirely blameless. The circumstances which led to the filing of these twin actions
have long been overtaken by supervening events, rendering the issues incipiently raised moot and
academic. Thus, RREC and Pasay City are, as they should be, only entilled to P10,926,071.29. No more, no
less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has been the principal, if not the sole,
purveyor of the arts in this country. It has weathered criticism, civil unrest, and "internecine" politics. It relies
on the occasional beneficence of loyal patrons, the so-called "cultured" class scorned and spurned by the
"masa." Otherwise, it subsists on the rental income it receives from private entities leasing portions of the
CCP Complex. With the trial and appellate courts upholding their claims, Pasay City and RREC wish to
dismember this bastion of cultural heritage and stunt its growth by claiming ownership over a substantial
portion of its property, that which literally serves as its bloodline. This must not be countenanced. The CCP
is certainly not about to draw its curtains and take a final bow. As Matthew Arnold said more than a century
ago, "I am a Liberal, yet I am a Liberal tempered by experience, reflection, and renouncement, and I am,
above all, a believer in culture.
I vote to grant the State's petition, with the qualification adverted to above.

PANGANIBAN, J., separate opinion;


I concur with the persuasive ponencia of Mr. Justice Fidel P. Purisima, as fortified by the Separate Opinion of
Mr. Justice Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation Agreement between Pasay City
and the Republic Real Estate Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158, and (2)
retains ownership of the reclaimed land in favor of the Cultural Center of the Philippines. With due respect, I
submit, however, that the majority has no factual basis for its determination of the compensation awarded to
RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and 158.
Pasay City justifies its execution of the Reclamation Agreement with RREC and the passage of Ordinance
Nos. 121 and 158 on the basis of Republic Act No. 1899 (RA 1899), the law authorizing chartered cities and
municipalities to undertake the undertake the reclamation of foreshore lands. The questioned Agreement
and Ordinance, however, cover submerged areas of the Manila Bay. As explained in the ponencia, with
which I agree, the legal and common definition of foreshore land does not include areas that are fully
submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA 1899. It remains part of the public
domain and is, as such, outside the commerce of man. It could not be the object of ordinary contracts or
ordinances. The questioned Agreement and Ordinances, the objects of which involve such public property,
are thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to which PD Nos. 15 and 774 have
conveyed ownership of the reclaimed land, remains the lawful owner of the subject land. Title to the nine (9)
lots, which Respondent Court wrongfully ordered to be turned over to Pasay City, had long been issued in

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favor of CCP (One subsequently to the GSIS as a successor-in-interest). Such titles are unaffected by the
claims of RREC and cannot be collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot be denied that RREC and the city
government of Pasay spent time, money and effort which undoubtedly inured to the benefit of the
government. It is a time-honored principle that no one, not even the government, may be enriched at the
expenses of another, 2 particularly one who, like RREC and Pasay City, acted on good faith.
While RREC and Pasay City should be compensated for their work on the reclamation project, I respectfully
submit that the amount of such compensation must be supported by substantial and material proof of the
reasonable expenses they incurred. But, the records of the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to reach an amicable settlement as a
consequence of the promulgation of PD 3-A by former President Ferdinand Marcos. Thus, in 1978, RREC
sought the amount of P30,396.878.20 representing the supposed monetory value of the reclamation work
that it had undertaken so far. The then Ministry of Public Highways (MPH) (and later the solicitor general
also) rejected this offer in 1981 and, instead, counteroffered P10,926,071.29 as the reasonable value of
such work. RREC replied that it would be consider such amount only if it would bear six (6) percent interest
per annum from 1962 up to the time of payment. It submitted other proposals, but all were rejected by the
government. No final extrajudicial settlement was ever reached.
Obviously, the offers and counteroffer were made by the parties with a view to arriving at compromise
agreement. At that point, they were not submitted as evidence, but only as a means of arriving at a peaceful
settlemet prior to judgment. By then, the case, which had commenced in December 1961 and was still on
appeal with the Court of Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties whereby their differences are adjusted in a
manner which they mutually agree on, and which they prefer to "hope of gaining, balanced by the danger of
losing. 3 The parties usually make reciprocal concessions in order to avoid litigation or terminate a pending
one. 4
However, basic is the rule on evidence that in civil cases, an offer of compromise cannot be taken as an
admission of liability; nor can it be admissable as an evidence against the offeror. 5 The offer to compromise
a claim or a cause of action is not an admission that the claim is valid, but merely admits that there is a
dispute and that an amount is to be paid to avoid or end the controversy. 6 I submit that an unaccepted offer
or counteroffer of compromise cannot be the basis of the sum to be adjudged in favor of or against a party,
more so if such sum is unsuported by competent evidence. In such case, the court itself insofar as it adopts
the amount either offered or conteroffered would be bereft of factual basis for its decision. Where the
proposed compromise is not accepted, the parties to the litigation would be back to square one; they have to
present before the court sufficient and credible evidence to prove their respective claims.
As a rule, an offer or a counteroffer given in an effort to reach a compromise should not be accorded
evidentiary value on its face, because by its very nature, a compromise is concessionary. And if one of the
parties does not concur, the court cannot impose an amount based on the unaccepted offer, even if
culpability of a party has been duly established. The amount of any such liability must be independently
ascertained with competent evidence. Otherwise, this Court would be setting a dangerous precedent.
Hence, parties, would not submit offers to compromise for fear that such offers, if not accepted, would be
used by the Court against them. Upon the other hand, parties may offer bloated amounts in the hope that
siad sums could influence the court to eventually grant them a relief more than they deserve. In any, event,
the rationale for the policy encouraging compromise would be defeated.

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In the case at bar, we should bear in mind that when RREC conceded in 1981 to the solicitor general's
counteroffer of P10,926,071.29, provided the amount would bear 6 percent interest per annum, it was with
the caveat that such interest rate was already "very much less that the accepted rate of inflation that has
supervened since 1962 . . . ." Indeed, if we are to compare current prices with those of three and a half
decades ago, or even seventheen years ago, such interest rate on the principal may no longer compensate
the 1962 expense. In other words, what may have been a "fair and reasonable" compromise in 1981 may no
longer be acceptable at this time. In any event, the solicitor general's counteroffer, not being supported with
factual evidence, still cannot be the basis of a judicial award.
Need to Receive Evidence of
Value of RREC Accomplishment
In the instant case, there appears no dispute that RREC has undertaken partil work for the Manila Bay
reclamation project to the extent of 1,558,395 cubic meteres of dredge-fill work. In the words of the
ponencia:
Undoubtedly, what RREC claimed for was the payment for what it had done on, and for
dredge-fill of 1,558.395 cubic meters used for the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving evidence of the peso value of the
1,558,395 cubic meters of dredge-fill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The RECLARATION of the nullity of (a) the Reclamation Agreement Between Pasay City and RREC and
(b) Ordinance Nos. 121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the former Thirteenth Division of the Court of
Appeals (consisting of Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-Reyes and
Quirino D. Abad Santos Jr.) for the sole purpose of receiving evidence of the peso value of the work
accomplished by RREC and Pasay City for which they shall be paid by the national government.
Separate Opinions
ROMERO, J., separate opinion;
Culture doesn't save anything or any-one, it doesn't justify. But it's a product of man: he projects himself into
it, he recognizes himself in it; that critical mirror alone offers him his image." So said Jean Paul Sartre, one
of the greatest philosophical thinkers of our time. Matthew Arnold referred to it as the "pursuit of our total
perfection" or the "study of perfection." The English mathematican and philosopher Alfred North Whitehead,
placing premium on human subjectivity, declared, "Culture is activity of thought, and receptiveness to beauty
and humane feeling.
Image, perfection, beauty, and feeling. These are elements which are also associated with art and creation.
Yet, art in itself is a multi-faceted concept. The revered and, at times, controversial President John Fitzgerald
Kennedy, in one of his numerous speeches, elevated art to the level of a pyscho-social necessity of man
when he said, ". . . (A)rt establishes the basic human truths which ust serve as the touchstone of our
judgment." Indeed, there is no question that art satisfies one of the deepest spiritual needs of man.
Of course, when one speaks of art and culture, he in fact speaks of it in two ways: the abstract and the
concrete. What is abstract is conditioned by time; that which is and the concrete is ravaged by it. While the
concept of "culture and art" endures man's folies, amassing innumerable, priceless enhancements as it
effortlessly slides through generations of human progress, its tangible counterpart, that which is preserved
for our children's appreciation, is unfortunately fragile. Art works, music, architecture, literature, and other

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cultural embellishments which exhibit extraordinary longevity are proclaimed as national treasures, and
rightly so, for they are lasting testiminials of man's boundless imagination and creativity, that single trait that
places the human species above all other creatures of the Almighty.
Most evidence of a culture's richness are lost, not in the tide of nature's frivolity, but through man's
foolishness and capriciousness. Wars used to be the main culprit in the virtual obliteration of the works of
ancient scholars. We are now, and for the past century or so, faced with a greater foe: progress. Progress
and development are the hallmarks of successful governance. Our leaders, and there are so many of them
now, decide "what is best" for the public. Inopportunely, what is perceived to be in the "best interest" of the
majority in the name of "progress" may sometimes, and in the long run, the calamitous to the entire people
in terms of cultural atrophy. This is the quandary in which this Court finds itself as it attempts to weigh once
more private rights against sovereignty and the general welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated petitions follow.
Pursuant to Republic Act No. 1899, which authorized chartered cities and municipalities to reclaim adjoining
foreshore lands, the City Council of Pasay resolved to reclaim a portion of the Manila Bay covering the
Manila-Pasay-Paraaque bounderies and, for this purpose, enacted Ordinance No. 121 on May 6, 1958.
Two days later, on the strength of said ordinance, Pasay City Mayor Pablo Cuneta contracted with Republic
Real Estate Corporation (RREC) for the reclamation of portions of the Manila Bay. On April 21, 1959, the
City Council of Pasay amended Ordinance No. 121 by enacting Ordinance No. 158. A new agreement
between the parties (the Reclamation Agreement) was executed three days thereafter, whcih, among other
things, granted the reclamation project to RREC and gave it an irrevocable option to purchase a maximum
of 60% of the area reclaimed at P10.00 per square meter, the amount of which could be set off against any
outstanding obligation of the City to RREC. Such an option could only be effected within a year from the time
the City Engineer certified that 50 hectares had been reclaimed. The reclamation itself was made by the
RREC through third parties who were awarded contracts on the various phases of the project through public
bidding. To raise more funds, RREC entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed a complaint (amended on March 5, 1962)
against Pasay City and RREC for "Recovery of Possession and Damages with Writ of Preliminary
Preventive Injunction and Mandatory Injunction" before Branch 7 of the then Court of First Instance of Rizal,
Pasay City, praying for the declaration of nullity of Ordinance Nos. 121 and 158, the Reclamation
Agreement, and the Contracts to Sell between RREC and the buyers of the reclaimed land. Among other
things, the following matters were alleged: (a) the area reclaimed was already reserved as a national park
under Proclamation No. 41, dated July 5, 1954 and Act No. 3915, hence, the subject of the Reclamation
Agreement was beyond man's commerce; (b) Ordinance Nos. 121 and 158 were ultra vires and void ab
initio for being violative of R.A. No. 1899, because they involved the reclamation of "submerged areas" and
not "foreshore lands" as allowed by said law; and (c) the Reclamation Agreement was illegal, contrary to
morals and public policy because it was executed with neither authority from the National Government nor
any public bidding.
In their separate answer, Pasay City and RREC set forth the following negative defenses: (a) Pasay City
was empowered by R.A. No. 1899 to reclaim any portion of the Manila Bay; (b) the area reclaimed was not a
portion of the Manila Bay Resort, which was the area reserved as a national park under Proclamation No. 41
and Act No. 3915; (c) under R.A. No. 1899, the term "foreshore lands" meant much more than its technical
definition and extended to submerged areas beyond the water marks of the shore; and (d) all the actuations
of the City RREC regarding the reclamation project were in accordance with R.A. No. 1899 and related laws.
On April 26, 1962, the trial court issued a writ of preliminary injunction ordering Pasay City and RREC to
refrain from their activities at the Manila Bay. On January 10, 1968, however, RREC filed a "Motion to
Dismiss" the complaint on the ground that the passage of Republic Act No. 5187 (otherwise known as the
Public Works Act) on September 16, 1967, rendered the issues raised by the Republic of the Philippines
moot and academic. Specifically, RREC relied on Section 3 (m) thereof which stated that all "contracts of city

71

or municipal governments for the reclamation of foreshore and submerged lands shall be respected" during
the construction by the national government of a sea wall and limited access highway passing through the
projected area of the reclamation. In the meantime, the trial court allowed Jose Bautista and others who
allegedly bought in good faith and for value from RREC some portions of the reclaimed land, to intervene in
the action and join cause with Pasay City and RREC. On the other hand, the Pasay Law and Conscience
Union, Inc. (PLCUI), a civic organization, joined with the Republic of the Philippines and filed a complaint in
intervention.
On May 24, 1972, the court a quo rendered a judgment on the pleadings, upholding the validity of Ordinance
Nos. 121 and 158 of the Reclamation Agreement; dismissing the complaint as well as PLCUI's complaint in
intervention; enjoining RREC and Pasay City "to have all the plans and specifications in the reclamation
approved by the Director of Public Works, and to have all the contracts and subcontracts for said
reclamation awarded by means of, and only after, public bidding"; and lifting the preliminary injunction, dated
April 26, 1962, as soon as said conditions shall have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of Appeals, President Marcos issued on January
11, 1973, Pressidential Decree No. 3-A, providing, inter alia, that "the reclamation of areas under water,
whether foreshore or inland, shall be limited to the National Government or any person aurhorized by it
under a proper contract," and that it shall take over any validly existing reclamation contract on the basis of
quantum meruit. On the strength of P.D. No. 3-A, the Commission of Public Highways and the Construction
Development Corporation of the Philippines (CDCP) took over the reclamation contract between Pasay City
and RREC for the construction of the Manila-Cavite City Coastal Road. CDCP development the area already
reclaimed by RREC and continued reclaiming where the latter left off. These areas, which came to be known
as the Cultural Center Complex and the Financial Center Complex, were registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was created by virtue of Presidential Decree No.
1084. It was designated as the agency primarily responsible for all the reclaation projects of the national
government. The PEA then took over the Manila Bay reclamation contract between the Republic of the
Philippines and CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry of Public Highways (MPH) for its actual
reclamation in the CCP Complex before CDCP assumed authority over the project. The MPH, on the other
hand, determined the amount of reclamation by RREC to be only P10,926,071.29. Later, RREC offered to
settle the case with the Office of the Solicitor General for the original amount of its claim. The OSG would,
however, settle only for the lesser amount assessed by the MPH. This was acceptable to RREC only with an
additional 6% interest per annum from 1962 up to the time of payment. Within the decade that followed,
RREC's proposals for settling the case ballooned from a P35,455,011.31 cash settlement or a property
settlement of 3.5 hectares in the CCP Complex covered by TCT No. 75676, to a cash settlement of P175
million, then later, P245 million. The Office of the President, to which the proposals were referred, rejected
the same. In other words, no amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision, affirming the trial court's judgment with the
following modifications: (a) the requirement on public bidding and submission of plans and specifications to
the DPWH by RREC was deleted; (b) the Republic of the Philippines was ordered to turn over to Pasay City
the ownership and possession of the 21 hectares already reclaimed by RREC; and (c) RREC's irrevocable
option to purchase 60% of the 21 hectares it had already reclaimed was sustained.
The amended decision
On April 28, 1992, the appellate court rendered an amended decision. It agreed with the position of Pasay
City and RREC in their motion for reconsideration that the actual the reclaimed was 55, not 21, hectares.
Considering, however, that latter were willing to accept 35 hectares of open land in the CCP Complex, the
court ordered the Republic of the Philippines to reconvey to Pasay City and RREC said parcels of land
comprising nine lots registered in the name of CCP. This is the decision being assailed by both parties in the
instant consolidated petitions.

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Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC,
valid and bindings as against the National Government and the Cultural Center of the Philippines?
The Republic of the Philippines claims that the Court of Appeals erred in sustaining the validity of Ordinance
Nos. 121 and 158 and the Reclamation Agreement executed pursuant thereto, and in ordering the
reconveyance of the nine lots titled in the name of CCP to the City of Pasay and RREC. It stresses that the
reclamation project undertaken by Pasay City and RREC violated R.A. No. 1899, especially since the
subject areas were "submerged lands", not "foreshore lands" which are the only lands that may be
reclaimed by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate court's amended decision was not
binding upon it because it was never made a party to the action and that it was compelled to intervene in the
instant petitions to protect its proprietary interests. It claims that the Court of Appeals erred in findings that
the actual area reclaimed by RREC was 55 hectares, and in ordering it to turn over to RREC and Pasay City
the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of Apealls erred in not ruling upon its
constitutionality, considering that said decree deprived them of their property and rights of ownership without
due process of law and without payment of just compensation, and that it violated the non-impairment
clause of the Constitution; and in not awarding them damages for the alleged illegal takeover of the
reclamation contract and the reclaimed area. Thus, they pray for the modification of the assailed amended
decision by awarding them damages and conveying to them, not merely 35, but 55 hectares of the land
allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a Resolution remanding the case to the Court
of Appeals to receive further evidence and determine the actual area reclaimed by RREC and the arreas of
the CCP Complex which are "open spaces." In its Commissioner's Report dated November 25, 1997, the
appellate court conclude that the CCP and the Solicitor General failed to refute its earleir finding that RREC
and Pasay City were able to reclaim 55 hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and
RREC, are null and void for violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the case of Republic v. Court of Appeals. 1
Although the subject of this case was part of the Laguna de Bay, the Court nevertheless applied Bouvier's
definition of "foreshore lands," viz: "that part of the land immediately in front of the shore; the part which is
between high and low water marks, and alternately covered with water and left dry by the flux and reflux of
the tides. It is indicated by a middle line between the highest and lowest tides."
This judicial interpretation did not escape the attention of the legislature in the enactment of later related
laws. In R.A. No. 5187, for example, Congress specified the areas that may be reclaimed in the construction
of the Manila-Cavite City Coastal Road to include both "foreshore and submerged areas." The Chief
Executive also recognized the disparity between the two terms when he signed into law P.D. No. 3-A,
authorizing the reclamation of "areas under water, whether foreshore or inland." Similarly, P.D. No. 1094,
creating the Public Estates authority to "reclaim land, including foreshore and submerged areas."

73

Initially, legislative intent and later jurisprudential usage clearly delimited the term "foreshore lands" to that
part of the land where the tides literally converge, thus excluding submerged lands. This restricted
explication was unquestionably ackonwledged by the other branches of government when, in passing
subsequent related statutes, they added the terms "submerged areas" or "areas under water" to foreshore
lands." Under the principles of legal construction, since R.A No. 1899 partakes of the nature of a legislative
grant of a sovereign right to municipalities and chartered cities, that is, the right "to reclaim," it must be
strictly construed against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore lands." Thus, when RREC was
permitted by the City of Pasay, through Ordinance Nos. 121 and 158 and the ensuing Reclamation
Agreement, to reclaim up to a one-kilometer stretch into the Manila Bay, more than just "foreshore lands"
was obviously contemplated and involved. Furthermore, R.A. No. 1899 mandates that any reclamation must
be carried out by the municipality or chartered city concerned 2 with the aid of funds which it may borrow
from third persons or lending institution. 3 The reclamation of Manila Bay was undertaken, not by Pasay City,
but by RREC itself under a special power of attorney from Pasay City using funds exclusively borrowed by
the latter from RREC. To compound the anomaly of it all, the reclamation project itself was awarded by
Pasay City to RREC without any public bidding. Finally, to complete Pasay City's absolute abdication of its
duty to champion public over private interest, RREC was granted an irrevocable option to purchase the land
reclaimed in lieu of simply paying for it using a determinable and liquadated amount "in Philippine currency
or in the currency in which the principal has been originally received," 4 as required by R.A. No. 1899. In fact,
RREC began disposing of the land by entering into contracts to sell with various third persons while the
reclamation project was still in progress and long before it acquired any right of dominion over the lands yet
to be reclaimed. These are all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121 and 158, no
less than the Reclamation Agreement and the Contracts to Sell it has spawned, should all be deemed null
and void, the reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands of the public domain, including those
physically reclaimed. As a general rule, therefore, only the National Government can reclaim foreshore lands
and other submerged areas. At times, though, the State, to effectuate an expressed public, policy, delagates
some of its sovereign powers either to the legislature or to some of its alter egos. One such instance was
R.A. No. 1899 which was intended to increase the autonomy of local governments, an innovation introduced
by the Marcos administration. There is no doubt, however, that R.A. No. 1899 was a mere public grant, a
privilege which may be withdrawn by the granting authority, the sovereign, in the exercise of police power.
This is precisely what President Marcos did when he issued P.D. No. 3-A, a valid and effective means of
regaining the State's right to reclaim. It must be noted that this decree was not revoked by President Aquino
when she assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed by Pasay City and RREC, because, far
from singling out the latter, its terminology is simple and extensive enough to cover just about any
municipality or city. The decree was signed by President Marcos under his emergency powers when martial
law was in effect throughout the country. Thus, it is not an undue delegation or usurpation of legislation
power. Neither does it authorize the taking of property without just compensation, for it specifically allows
such payment, albeit based on quantum meruit. Incidentally, while RREC attacks the constitutionality of P.D.
No. 3-A, and only at this late stage in the proceedings, it relied on this "quantum meruit compensation"
clause in the same decree when it filed a claim before the then Ministry of Public Works way back in 1978
and again in 1983. This is an oddity which this Court takes notice of in disallowing RREC from taking
contrary positions regarding the validity of a statute in this action. It cannot take advantage of a provision of
law even as it attacks the same.
Finally, the Court notes that the amended decision of the Court of Appeals dated April 28, 1992, is based on
inadequate evidence. Its conclusion that RREC was able to reclaim 35 hectares is totally unsupported by the
dubious proof presented by Pasay City and RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied mostly on three documents issued by
the government to the RREC, namely, the "Cost of Data for Items of Work Covered by the Republic Real
Estate Corporation for Work Performed in the Manila Bay" issued by the Ministry of Public Highways, and
two letters both addressed to RREC Executive Vice President Vicente Asuncion, Jr., one dated June 6,
1979, from then Minister of Public Highways Baltazar Aquino, and another, dated June 10, 1981; from then

74

Solicitor General Estelito Mendoza. These documents, however, never proved that RREC was able to
reclaim 35 hectares. In fact, the letter of Aquino, finding that RREC had reclaimed 55 hectares, was in its
own words, merely "tentative, pending the submittal of corroborative documents"; hence, it does not amount
to the "certification" contemplated in R.A. No. 1899. Mendoza's letter, on the other hand, far from supporting
RREC's position, rejected RREC's proposal in the latter's attempt at settlement. It is puzzling why the
appellate court even considered this letter in favor of RREC and Pasay City .
On the other hand, there is aimple proof that RREC was not able to reclaim the 55 hectares which it claims it
did, or even 35 hectares, as found by the Court of Appeals as follows: aerial photographs of the Manila Bay
area in 1966 and 1968; photographs of the CCP taken 1967 and 1968 during construction of the main
building; and the testimonies of the persons familiar with the circumstances under which said photographs
were taken, as well as the other witnesses who were, one way or another, connected with the construction
of the CCP main building, including a member of the Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable, there is no dispute that it did reclaim
some portion of the Manila Bay. In the preceding discussion, we declared the nullity of Ordinace Nos. 121
and 158 and the Reclamation Agreement, which are the wellsprings of RREC's right to be compensated. Its
reclamation efforts were also found to be ultra vires. Equity and fairness, however, dictate that it be
compensated for the work actually performed by it. After all, the State cannot deny that it did benefit from
such reclamation. RREC was initially willing to settle the case for P30,396,878.20. In view of the foregoing
premises, we believe that RREC should only be given the amount which the State was willing to pay, that is
P10,929,071.29, without legal interest. It is axiomatic that legal interest is given either for the use of the
money (a loan or forbearance of money) or as a penalty for beach of an obligation (damages). In the case of
Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court had occassion to set the guidelines by which
litigants may claim or be awarded interest as or by way of actual or compensatory damages. Thus,
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e.,
a loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the court
at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated
claims or damages can be established with reasonable certainty. Accordingly, were the
demand is established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at which
time the quantification damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged. . . . (Citations omitted)
These are the only circumstances under which interest in the concept of actual or compensatory damages,
liquidated or otherwise, may be justified. In the case at bar, no loan or forbearance of money is involved;
neither is there any breach of obligation. Consequently, the lone commitment of the State would be the
payment for services allegedly rendered, services for which RREC would have the National Government
cede to it its property, the value of which has been inflated to unimaginable proportions since the inception of
the reclamation project. This is manifestly cupidity at its worst. Neither should the state be penalized for
something for which it is entirely blameless. The circumstances which led to the filing of these twin actions
have long been overtaken by supervening events, rendering the issues incipiently raised moot and

75

academic. Thus, RREC and Pasay City are, as they should be, only entilled to P10,926,071.29. No more, no
less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has been the principal, if not the sole,
purveyor of the arts in this country. It has weathered criticism, civil unrest, and "internecine" politics. It relies
on the occasional beneficence of loyal patrons, the so-called "cultured" class scorned and spurned by the
"masa." Otherwise, it subsists on the rental income it receives from private entities leasing portions of the
CCP Complex. With the trial and appellate courts upholding their claims, Pasay City and RREC wish to
dismember this bastion of cultural heritage and stunt its growth by claiming ownership over a substantial
portion of its property, that which literally serves as its bloodline. This must not be countenanced. The CCP
is certainly not about to draw its curtains and take a final bow. As Matthew Arnold said more than a century
ago, "I am a Liberal, yet I am a Liberal tempered by experience, reflection, and renouncement, and I am,
above all, a believer in culture.
I vote to grant the State's petition, with the qualification adverted to above.
PANGANIBAN, J., separate opinion;
I concur with the persuasive ponencia of Mr. Justice Fidel P. Purisima, as fortified by the Separate Opinion of
Mr. Justice Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation Agreement between Pasay City
and the Republic Real Estate Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158, and (2)
retains ownership of the reclaimed land in favor of the Cultural Center of the Philippines. With due respect, I
submit, however, that the majority has no factual basis for its determination of the compensation awarded to
RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and 158.
Pasay City justifies its execution of the Reclamation Agreement with RREC and the passage of Ordinance
Nos. 121 and 158 on the basis of Republic Act No. 1899 (RA 1899), the law authorizing chartered cities and
municipalities to undertake the undertake the reclamation of foreshore lands. The questioned Agreement
and Ordinance, however, cover submerged areas of the Manila Bay. As explained in the ponencia, with
which I agree, the legal and common definition of foreshore land does not include areas that are fully
submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA 1899. It remains part of the public
domain and is, as such, outside the commerce of man. It could not be the object of ordinary contracts or
ordinances. The questioned Agreement and Ordinances, the objects of which involve such public property,
are thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to which PD Nos. 15 and 774 have
conveyed ownership of the reclaimed land, remains the lawful owner of the subject land. Title to the nine (9)
lots, which Respondent Court wrongfully ordered to be turned over to Pasay City, had long been issued in
favor of CCP (One subsequently to the GSIS as a successor-in-interest). Such titles are unaffected by the
claims of RREC and cannot be collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot be denied that RREC and the city
government of Pasay spent time, money and effort which undoubtedly inured to the benefit of the

76

government. It is a time-honored principle that no one, not even the government, may be enriched at the
expenses of another, 2 particularly one who, like RREC and Pasay City, acted on good faith.
While RREC and Pasay City should be compensated for their work on the reclamation project, I respectfully
submit that the amount of such compensation must be supported by substantial and material proof of the
reasonable expenses they incurred. But, the records of the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to reach an amicable settlement as a
consequence of the promulgation of PD 3-A by former President Ferdinand Marcos. Thus, in 1978, RREC
sought the amount of P30,396.878.20 representing the supposed monetory value of the reclamation work
that it had undertaken so far. The then Ministry of Public Highways (MPH) (and later the solicitor general
also) rejected this offer in 1981 and, instead, counteroffered P10,926,071.29 as the reasonable value of
such work. RREC replied that it would be consider such amount only if it would bear six (6) percent interest
per annum from 1962 up to the time of payment. It submitted other proposals, but all were rejected by the
government. No final extrajudicial settlement was ever reached.
Obviously, the offers and counteroffer were made by the parties with a view to arriving at compromise
agreement. At that point, they were not submitted as evidence, but only as a means of arriving at a peaceful
settlemet prior to judgment. By then, the case, which had commenced in December 1961 and was still on
appeal with the Court of Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties whereby their differences are adjusted in a
manner which they mutually agree on, and which they prefer to "hope of gaining, balanced by the danger of
losing. 3 The parties usually make reciprocal concessions in order to avoid litigation or terminate a pending
one. 4
However, basic is the rule on evidence that in civil cases, an offer of compromise cannot be taken as an
admission of liability; nor can it be admissable as an evidence against the offeror. 5 The offer to compromise
a claim or a cause of action is not an admission that the claim is valid, but merely admits that there is a
dispute and that an amount is to be paid to avoid or end the controversy. 6 I submit that an unaccepted offer
or counteroffer of compromise cannot be the basis of the sum to be adjudged in favor of or against a party,
more so if such sum is unsuported by competent evidence. In such case, the court itself insofar as it adopts
the amount either offered or conteroffered would be bereft of factual basis for its decision. Where the
proposed compromise is not accepted, the parties to the litigation would be back to square one; they have to
present before the court sufficient and credible evidence to prove their respective claims.
As a rule, an offer or a counteroffer given in an effort to reach a compromise should not be accorded
evidentiary value on its face, because by its very nature, a compromise is concessionary. And if one of the
parties does not concur, the court cannot impose an amount based on the unaccepted offer, even if
culpability of a party has been duly established. The amount of any such liability must be independently
ascertained with competent evidence. Otherwise, this Court would be setting a dangerous precedent.
Hence, parties, would not submit offers to compromise for fear that such offers, if not accepted, would be
used by the Court against them. Upon the other hand, parties may offer bloated amounts in the hope that
siad sums could influence the court to eventually grant them a relief more than they deserve. In any, event,
the rationale for the policy encouraging compromise would be defeated.
In the case at bar, we should bear in mind that when RREC conceded in 1981 to the solicitor general's
counteroffer of P10,926,071.29, provided the amount would bear 6 percent interest per annum, it was with
the caveat that such interest rate was already "very much less that the accepted rate of inflation that has
supervened since 1962 . . . ." Indeed, if we are to compare current prices with those of three and a half
decades ago, or even seventheen years ago, such interest rate on the principal may no longer compensate
the 1962 expense. In other words, what may have been a "fair and reasonable" compromise in 1981 may no
longer be acceptable at this time. In any event, the solicitor general's counteroffer, not being supported with
factual evidence, still cannot be the basis of a judicial award.
Need to Receive Evidence of

77

Value of RREC Accomplishment


In the instant case, there appears no dispute that RREC has undertaken partil work for the Manila Bay
reclamation project to the extent of 1,558,395 cubic meteres of dredge-fill work. In the words of the
ponencia:
Undoubtedly, what RREC claimed for was the payment for what it had done on, and for
dredge-fill of 1,558.395 cubic meters used for the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving evidence of the peso value of the
1,558,395 cubic meters of dredge-fill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The RECLARATION of the nullity of (a) the Reclamation Agreement Between Pasay City and RREC and
(b) Ordinance Nos. 121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the former Thirteenth Division of the Court of
Appeals (consisting of Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-Reyes and
Quirino D. Abad Santos Jr.) for the sole purpose of receiving evidence of the peso value of the work
accomplished by RREC and Pasay City for which they shall be paid by the national government.
Footnotes
1 Penned by Associate Justice Quirino D. Abad Santos and concurred by Associate
Justices Arturo B. Buena and Minerva Gonzaga-Reyes.
2 Exh. "P"; Folder No. I, Record on Appeal, p. 24.
3 Annex "A"; Record on Appeal, pp. 10-17.
4 Annex "E"; Record on Appeal, pp. 64-73.
5 Annexes "F" and "G"; Record on Appeal, pp. 74-105.
6 Annex "H", Record on Appeal, p. 106.
7 Annex "I"; Record on Appeal, p. 107.
8 Annex "J"; Record on Appeal, pp. 109-128.
9 Annex "H"; Record on Appeal, p. 129.
10 Annex "N"; Record on Appeal, pp. 169-172.
11 Annex "O"; Record on Appeal, pp. 175-176.
12 Annex "T"; Record on Appeal, p. 193.
13 Rollo, G.R. No. 103882, pp. 853-869.
14 Rollo, G.R. No. 105276, pp. 7-47.

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15 See Amended Complaint; supra, footnote 4.


16 Land Bank of the Philippines v. Court of Appeals, 258 SCRA 405.
17 People v. Amigo, 252 SCRA 43.
18 Largado v. Masaganda, 5 SCRA 552.
19 CA Rollo, p. 760.
20 Art. 2142, Civil Code:
Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasicontract to the end that no one shall be unjustly enriched or benefited at the expense of
another.
ROMERO, J., separate opinion;
1 131 SCRA 532.
2 At Section 1, in relation to Section 9.
3 At Section 3.
4 At Section 6.
5 234 SCRA 78, 95-96 (1994).
PANGANIBAN, J., separate opinion;
1 Halili v. Court of Industrial Relations, 257 SCRA 174,184, May 30, 1996.
2 Art. 22, Civil Code. Commissioner of Internal Revenue v. Fireman's Fund Ins. Co., 148
SCRA 315, 324, March 9, 1987; Ramie Textiles, Inc. v. Mathay Sr., SCRA 586, 592, April
30, 1979.
3 Del Rosario v. Madayag, 247 SCRA 767, August 28, 1995.
4 Galay v. Court of Appeals, 250 SCRA 629, December 4, 1995; Domingo v. Court
Appeals, 255 SCRA 189, March 20, 1996; Sanchez v. Court of Appeals, 279 SCRA 647,
675, September 29, 1997.
5 26, Rule 130, Rules of Court. See also Servicewide Specialists, Inc. v. Court of
Apeals, 257 SCRA 643, 656, June 26, 1996.
6 Servicewide Specialists, Inc., ibid., citing 15A CJS Compromise and Settlement 22.
J. ACCRETION
Case:
G.R. No. L-4012

March 25, 1908

79

MAXIMO CORTES Y PROSPERO, petitioner-appellant,


vs.
THE CITY OF MANILA, respondent-appellee.
J.R. Serra for appellant.
M. Reyes for appellee.
TORRES, J.:
On the 26th of September, 1906, Maximo Cortes filed a written application for the registration of a parcel of
land owned by him, free of all incumbrances, situated in Calle Aguilar, corner of Calle Cecilia in the district of
Binondo, this city, together with the buildings erected thereon, which land has an area of 1,172.21 square
meters, its boundaries being stated in the application. The land was acquired by the applicant by purchase
from Higinio Francisco y Prospero, according to a deed of sale dated July 3, 1894, recorded in the registry of
property, no other person having any title to or interest therein, and the property was assessed, for the
purpose of taxation of the last fiscal year, at $1,444, United States currency. The buildings erected thereon
were paid for by the applicant with his own money, and the application is accompanied by the deed of sale,
plan, and technical description of the land.
The examiner of titles reported, in due course, that the said building lot was attached by reason of certain
proceedings instituted against the applicant for reason and rebellion, yet, inasmuch as the land was
acquired by him more than ten years previously, he could be considered the real owner thereof by
prescription; but that, in order to obtain title, it was necessary for him to show that said attachment had been
discharged or canceled, for which reason he considered the title of the applicant to be defective and that it
could not be registered.
Against the claim of the applicant the attorney for the city of Manila objected and reproduced the verbal
opposition offered in the case, alleging that both the plan and the technical description exhibited contained
errors; that there was an excess in the measurement which affected the interests of the city, and that, should
the application be granted, an area of 33.40 square meters of the Meisic Creek would become the property
of Maximo Cortes, when, as a matter of fact, the said creek was one of public use and belonged to the city
of manila. For these reasons he asked that the registration applied for be denied in so far as it affected the
Meisic Creek, with costs against the applicant.
Upon an examination of the evidence adduced, the judge rendered his decision on the 11th of March,
sustaining the opposition of the city of Manila, and ordering that the said land, including its walls, be
adjudicated and registered in favor of the applicant upon presentation of an amended description, showing
the measurements of the property, including its walls but excluding therefrom the rest of the land shown in
Exhibit A.
The applicant asked that the case be reopened on account of his having discovered very important proof; to
this end he filed an affidavit stating that he had learned the whereabouts of the original owner of the land,
who was better informed with respect to its conditions and location; but, as said motion was overruled, he
excepted to the judgment and also moved for a new trial on the ground that the decision of the court was
contrary to law and to the weight of the evidence. This motion was likewise denied and exception taken.
The dominion of the applicant, Maximo Cortes, over the land or building lot acquired by him from Higinio
Francisco y Prospero, according to the public deed executed before a notary on the 3rd of July, 1894,
registered in the registry of property, is unquestionable and has been fully proven; and, in view of the validity
of his title, the city attorney had to limit his opposition to the registration simply to its effect upon the Meisic
Creek. The court, upon previous declaration of general default, then ordered the adjudication and
registration of the title of the applicant, Cortes, to said building lot upon submitting an amended description
of the land.
It having been satisfactorily shown that the portion of land included in the technical description presented by
the applicant, situated between the lot to which said instrument refers and the bed of the Meisic Creek, has
been gradually formed by alluvion, as the result of the current in the said stream, it can not be denied that
said portion of land with an area of 33.40 square meters, belongs by right accretion to the owner of the land
referred to in the instrument of the 3rd of July, 1894, exhibited by the applicant.

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The Law of Waters, promulgated by royal decree of the 3d of August, 1866, and extended to these Islands
by a royal decree dated April 8, 1873, provides in article 84 that
The accretion resulting from the gradual deposit by or sedimentation from the waters belongs to the
owners of land bordering on streams, torrents, lakes, and rivers.
Article 366 of the Civil Code provides that
The accretions which banks of rivers may gradually received from the effects of the currents belong
to the owners of the estates bordering thereon.
There is no evidence whatever to prove that the addition to the said property was made artificially by the
owner; therefore, the facts alleged and proven in the proceedings must stand. The increase or accretion
which in a latent, incessant, and spontaneous manner is received by the land from the effects of the current
depositing, in the course of time, sediment and alluvial matter along the shore, is undeniably the work of
nature and lawfully belongs to the owner of the property; and from the fact that all or almost the whole area
of said increased portion is soft and unsettled, one is naturally convinced that it was formed by alluvion, and
that for such reason it appertains to the owner of the land bordering thereon by virtue of the right of accretion
recognized by the law.
The reason therefore is quite evident because, if lands bordering on streams are exposed to floods and
other damage due to destructive force of the waters, and if by virtue of law they are subject to incumbrances
and various kinds of easements, it is only just that such risks or dangers as may prejudice the owners
thereof should in some way be compensated by the right of accretion.
And, although the acts of possession exercised over the bordering land are always understood legally to
cover that portion added to the property by accretion, in this case shrubs have been planted there, which
furnish additional proof that Maximo Cortes has exercised rights of ownership and possession over the
whole area of the property the registration of which he requests.
For the reasons above set forth it is our opinion that the judgment appealed from should be reversed, as we
do hereby reverse the same, and that the court below should direct that the land to which the appellant
refers be recorded in the registry of property in accordance with the law, including that portion of the same
added by accretion up to the water line of the Meisic River, without any special ruling as to costs. So
ordered.
Arellano, C.J., Mapa, Johnson, Carson, Willard, and Tracey, JJ., concur.
III. Torrens System of Land Registration
Original Registration
JUDICIAL TITLING
(Ordinary Registration Proceedings)
(Act 496 as amended by P.D. 1529)
1. Definitions and concepts of proceeding in personam, in rem and quasi in rem.
ACTION IN
REM
Directed
against the
thing itself

ACTION IN
ACTION
PERSONAM QUASI IN REM
Directed
against
particular
persons

Directed
against
particular
persons

81

Judgment is Judgment is
Judgment
binding on the binding only binding upon
whole world
upon parties
particular
impleaded or persons, but
their
the real motive
successors in is to deal with
interest
real property or
to subject said
property to
certain claims.
Ex. Land
Ex. action to Ex. Unlawful
registration
recover
detainer or
case; probate
damages;
forcible entry;
proceedings
action for
judicial
for allowance
breach of
foreclosure of
of a will.
contract
mortgage.
2. Definition of jurisdiction, its source and applicability to land registration cases.
Jurisdiction is the power and authority of the court to hear, try and decide a case. In general, jurisdiction may
either be over the nature of the action, over the subject matter, over the person of the defendants or over the
issues framed in the pleadings.
Jurisdiction over the nature of the action and subject matter is conferred by law. It is determined by the
allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein. Jurisdiction over the person of the plaintiff is acquired from the time he files
his complaint; while jurisdiction over the person of the defendant is acquired by his voluntary appearance in
court and his submission to its authority, or by the coercive power of legal processes exerted over his
person.
3. Batas Pambansa Bilang 129 (as Amended by RA No. 7691)
a. StudySection 1 to 5 of RA No. 7691
REPUBLIC ACT No. 7691
AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL
COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS
PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY REORGANIZATION ACT OF 1980"
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of
1980", is hereby amended to read as follows:
"Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original
jurisdiction.
"(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;
"(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

82

"(3) In all actions in admiralty and maritime jurisdiction where the demand or claim
exceeds One hundred thousand pesos (P100,000.00) or, in Metro Manila, where such
demand or claim exceeds Two hundred thousand pesos (P200,000.00);
"(4) In all matters of probate, both testate and intestate, where the gross value of the
estate exceeds One hundred thousand pesos (P100,000.00) or, in probate matters in
Metro Manila, where such gross value exceeds Two Hundred thousand pesos
(P200,000.00);
"(5) In all actions involving the contract of marriage and marital relations;
"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body
exercising jurisdiction of any court, tribunal, person or body exercising judicial or quasijudicial functions;
"(7) In all civil actions and special proceedings falling within the exclusive original
jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian
Relations as now provided by law; and
"(8) In all other cases in which the demand, exclusive of interest, damages of whatever
kind, attorney's fees, litigation expenses, and costs or the value of the property in
controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases
in Metro Manila, where the demand exclusive of the abovementioned items exceeds Two
Hundred thousand pesos (P200,000.00)."
Section 2. Section 32 of the same law is hereby amended to read as follows:
"Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in Criminal Cases. Except in cases falling within the exclusive original jurisdiction of
Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:
"(1) Exclusive original jurisdiction over all violations of city or municipal ordinances
committed within their respective territorial jurisdiction; and
"(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not
exceeding six (6) years irrespective of the amount of fine, and regardless of other
imposable accessory or other penalties, including the civil liability arising from such
offenses or predicated thereon, irrespective of kind, nature, value or amount thereof:
Provided, however, That in offenses involving damage to property through criminal
negligence, they shall have exclusive original jurisdiction thereof."
Section 3. Section 33 of the same law is hereby amended to read as follows:
"Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts shall exercise:
"(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and
intestate, including the grant of provisional remedies in proper cases, where the value of
the personal property, estate, or amount of the demand does not exceed One hundred
thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate,
or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00),
exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and
costs, the amount of which must be specifically alleged: Provided, That interest, damages
of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the
determination of the filing fees: Provided, further, That where there are several claims or
causes of actions between the same or different parties, embodied in the same complaint,

83

the amount of the demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or different
transactions;
"(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer:
Provided, That when, in such cases, the defendant raises the questions of ownership in
his pleadings and the question of possession cannot be resolved without deciding the
issue of ownership, the issue of ownership shall be resolved only to determine the issue of
possession; and
"(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of,
real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and
costs: Provided, That in cases of land not declared for taxation purposes, the value of
such property shall be determined by the assessed value of the adjacent lots."
Section 4. Section 34 of the same law is hereby amended to read as follows:
"Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme
Court to hear and determine cadastral or land registration cases covering lots where there is no
controversy or opposition, or contested lots where the value of which does not exceed One
hundred thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the
claimant or by agreement of the respective claimants if there are more than one, or from the
corresponding tax declaration of the real property. Their decisions in these cases shall be
appealable in the same manner as decisions of the Regional Trial Courts."
Section 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec.
19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to
Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be
adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of
Metro Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the
effectivity of this Act to Four hundred thousand pesos (P400,000.00).
Section 6. All laws, decrees, and orders inconsistent with the provisions of this Act shall be considered
amended or modified accordingly.
Section 7. The provisions of this Act shall apply to all civil cases that have not yet reached the pre-trial stage.
However, by agreement of all the parties, civil cases cognizable by municipal and metropolitan courts by the
provisions of this Act may be transferred from the Regional Trial Courts to the latter. The executive judge of
the appropriate Regional Trial Courts shall define the administrative procedure of transferring the cases
affected by the redefinition of jurisdiction to the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts.
Section 8. This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in two
(2) national newspapers of general circulation.
Approved: March 25, 1994
4. Rule 1, Sections 4 of the Rules of Court
Sec. 4. In what cases not applicable.
These Rules shall not apply to election cases, land registration, cadastral, naturalization and
insolvency proceedings, and other cases not herein provided for, except by analogy or in a
suppletory character and whenever practicable and convenient.

84

G.R. No. L-48480

July 30, 1943

FABIAN B. S. ABELLERA, petitioner, vs. MEYNARDO M. FAROL, ET AL., respondents.


Fabian B.S. Abellera in his own behalf.
Pedro C. Quinto and Agaton R. Yaranon for respondents.
BOCOBO, J.:
Whether in a cadastral case, the judge may upon motion of adverse claimants order the cancellation of the
claimant's answer and keep the latter from introducing evidence to prove his ownership because the case is
barred by a prior judgment, is the legal question at issue in this case. An order to that effect issued by the
Court of First Instance of La Union, is impugned by Fabian B.S. Abellera in a petition for a writ of certiorari.
Abellera, in a previous case concerning the same real estate involved herein, sued Hermegildo Balanag and
others who are either the same parties in this case or the latter's predecessors in interest, alleging
ownership of the land. But his complaint was dismissed by the Court of First Instance on two grounds: (1)
prescription in favor of defendants; and (2) the deed of donation of these lands to him had not been formally
accepted according to Article 633 of the Civil Code. Upon appeal to this Court, the judgment of the trial court
was affirmed on the second ground aforementioned (Abellera vs. Balanag G.R. No. 11970, promulgated
March 22, 1918, and reported in 37 Phil. 865).
It appears in that decision of this Court that after the perfection of the appeal, Abellera executed a public
document formally accepting the donation of the land, and presented and deed of acceptance together with
proofs of notification of acceptance to the donor, as ground for new trial. This Court held that this was not
newly-discovered evidence, and that Abellera had not acquired title to the hacienda until the execution of the
deed of acceptance and the notification thereof to donor. This Court added:
So that whether rights he may have to institute and maintain a new action of ejectment in reliance
upon his claim that he has acquired title to the hacienda, since the date of the dismissal of this
action, it is clear that the present action was properly dismissed on the ground of failure of proof of
title in the plaintiff at the time when the action was instituted and later when judgment of dismissal
was entered by the trial court.
In July of 1918, or four months after the above-mentioned decision of this Court, petitioner herein brought
another action for recovery of the land against the same defendants in the previous case. The second suit
was later dismissed by the Court of First Instance and transferred to cadastral case No. 5 which included the
hacienda in question that had in the meantime been subdivided into lots. When the cadastral case came up
before the Hon. Meynardo M. Farol at Aringay, La Union, in July 1941, Fabian B.S. Abellera appeared as
claimant while Narciso de Guzman and others appeared as adverse claimant. The latter through counsel
moved that Abellera's claim over the lots concerned be dismissed on the grounds of res judicata and
prescription.
A careful examination of the decision of this Court in the previous case (37 Phil., 865) convinces us that
there is no res judicata. We merely held that Abellera had not acquired title to the hacienda until the
execution of the deed of acceptance and the notification thereof, and we clearly refused to prevent Abellera
from instituting a new action based upon his assertion that he had acquired title to the estate since the
dismissal of his original action.
The other ground for the motion for dismissal, prescription, is not involved in the present proceedings.
The next question is: Did the cadastral court, on the ground of res judicata, have any power to entertain the
motion to dismiss Abellera's claim and bar him from presenting evidence to prove his ownership of these
lots?
Rule 132 of the Rules of Court provides:

85

These rules shall not apply to land registration, cadastral and election cases, naturalization and
insolvency proceedings, and other cases not herein provided for, except by analogy or in a
suppletory character and whenever practicable and convenient.
The Rules of Court may be applied in cadastral cases when two conditions are present: (1) analogy or need
to supplement the cadastral law, and (2) practicability and convenience.
If the nature and objective of the cadastral scheme are kept in view, a motion to dismiss in a cadastral case
on the ground of prior judgment would seem to be out of place. The Government initiates a cadastral case,
compelling all claimants in a municipality to litigate against one another regarding their respective claims of
ownership. By this plan, all the private lands in a town are registered in one single collective proceeding.
Thus, the piece-meal and isolated registration of lands, so inadequate in more ways than one, is avoided.
The principal aim is to settle as much as possible all disputes over land and to remove all clouds over land
titles, as far a practicable, in a community. To attain this purpose, the cadastral court should allow all
claimants ample freedom to ventilate whatever right they may assert over real estate, permitting them, in
keeping with the law of evidence, to offer proofs in support of their allegations. To countenance the contrary
opinion, by suppressing the presentation of evidence in support of claims, would but serve to perpetuate
conflicts over land, for such stifled affirmations of ownership will fester like wounds unskillfully treated. No
sufficient leeway having been give all claimants to demonstrate the strength and consistently of their alleged
rights, the stability of decrees of title is jeopardized.
In Haw Pia vs. Roman A. Cruz (G.R. No. 48506), we declared that the Court of First Instance in a cadastral
proceeding cannot appoint a receiver because its jurisdiction is special and limited. We declined in that case
to apply the new Rules of Court by analogy.
We are, therefore, of the opinion that while in a cadastral case res judicata is available to a claimant in order
to defeat the alleged rights of another claimant, nevertheless prior judgment can not set up in a motion to
dismiss.
The order appealed from is hereby reversed. Petitioner herein shall in the cadastral proceedings be allowed
to present evidence to prove his claim over the lots in question. With costs against the adverse claimants
who are respondents herein. So ordered.
Yulo, C.J., Moran and Ozaeta, JJ. concur.
Separate Opinions
PARAS, J., dissenting:
Years ago a judge of first instance said that res adjudicata cannot be set up as a defense in land registration
proceedings. On appeal this Court held:
A final judgment in an ordinary civil case determining the ownership of certain land is res adjudicata
in a registration proceedings when the parties and the property are the same as in the former case.
(Menor vs. Quintana, 56 Phil., 657.)
This doctrine is a reiteration of that laid down in Verzosa vs. Nicolas, 29 Phil., 425, and Santiago vs. Santos,
54 Phil. 619, which stated:
A decision in ejectment bars a loser from opposing registration under Act No. 496 by the prevailing
party.
When the same parties have heretofore litigated over the same land for the recovery of real
property, the judgment in that case (48 Phil., 567) constitutes res adjudicata in proceedings for
registration of the land. A party cannot by varying the form of action escape the operation of the
principle that one and the same cause of action shall not be twice litigated.

86

In a revindicatory actions it was declared that the plaintiffs had no right to the land sued for. In a
subsequent action some of the former or successful plaintiffs sought to recover various portions of
the same land from certain individuals to whom such portions had been deeded by the principal
defendant in the prior case. Held: Judgment in the first case was conclusive against the plaintiffs in
the second case. (Baguinguito vs. Rivera, 56 Phil., 423.)
The answers in a cadastral proceedings partake of an action to recover title, as real rights are
claimed therein. (Dais vs. Court of First Instance of Capiz, 51 Phil., 896)
The reason for the application of the rule must lie in the fact that actions and proceedings are analogous in
so far as the Court is therein called upon to adjudicate land in favor of any of the conflicting parties or
claimants.
The parcels of land involved in the instant case had been litigated between the same parties since the year
1914. The petitioner here, who was plaintiff in the case of Abellera vs. Balanag (37 Phil., 865), alleged that
the defendants had been possessing the land since 1907. They are in fact still in possession thereof.
Notwithstanding the decision of this Court in 1918 which affirmed the judgment of the lower court in the
aforesaid case absolving the defendants-respondents from the complaint on the ground that the plaintiffpetitioner had failed to show title in his favor, the majority are now allowing the same parties to continue their
odyssey in court.
I dissent because in my opinion Rule 132 in connection with Rule 8 of the Rules of Court, instead of
prohibiting, expressly authorizes the lower court in land registration or cadastral proceedings to entertain a
motion for dismissal on the ground of res adjudicata or prescription. Of course the dismissal of petitioner's
claim will not necessarily or automatically mean adjudication of title to the individual respondents, but it will
certainly facilitate the consideration of their claims which cease to be contested. Prompt disposal of cases or
such claims is the main purpose of the said rules. Let there be no retrogression in the application of sound
rules and doctrines.
The decision in Abellera vs. Balanag (37 Phil. 865) is on the merits and not one without prejudice to the filing
of a new action against the same defendants. The dispositive part reads as follows:
Twenty days hereafter let judgment be entered affirming the judgment of dismissal in the court
below, with the costs of this instance against the appellant, and ten days thereafter let the record be
returned to the court wherein it originated. So ordered.
It must be borne in mind that the documentary title on which the plaintiff relied covers a large area of land
and the defendants are occupying only small portions thereof. The new action contemplated must therefore
refer to the remaining unoccupied portion, should any question be raised in relation thereto. And if the lower
court had erred is granting the motion for dismissal, the remedy would have been an appeal from the said
order.

87