Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-56077 February 28, 1985
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, SPOUSES PRUDENCIO MAXINO and TARCIANA MORALES,
PEDRO GONZALES, ROGELIO AQUINO, Minor represented by his father, Manuel Aquino,
and ALEJANDRO, SOCORRO, MERCEDES, CONCHITA, REMEDIOS and FLORA, all
surnamed CONSOLACION, respondents.
Silvestre Loreria, Jr. for respondent spouses Prudencio Maxino and Tarciana Morales.

AQUINO, J.:
This case is about the validity of the registration of 885 hectares of public forestal land located in
Mulanay, Quezon.
In Land Registration Case No. 81-G of the Court of First Instance at Gumaca, Quezon, Judge
Vicente del Rosario on March 21, 1961 rendered a decision, ordering the registration of said
land, Lot 1, allegedly located at Barrio Cambuga (Anonang), Mulanay, in the names of the
spouses Prudencio Maxino and Tarciana Morales, less 200 hectares which should be registered
in the names of the Heirs of Lorenzo Consolacion (72, Record on Appeal). The decision
became final and executory. A decree and an original certificate of title were issued.
More than eight years later, or on June 20, 1969, the Republic of the Philippines filed with the
Gumaca court an amended petition to annul the decision, decree and title on the ground that
they are void because the land in question was still a part of the unclassified public forest.
Moreover, the possessory information title relied upon by the Maxino spouses covered only
29 hectares of land and not 885 hectares. The petition was verified by the Acting Director of
Forestry.
The Maxinos opposed the petition. After a hearing on the merits, Judge Agana denied the
petition in his order of September 8, 1970. That order was served upon the assistant provincial
fiscal on September 16, 1970 and on the special counsel, Jaime Dispo of the Bureau of
Forestry, on November 26, 1970.
A copy of the order was transmitted by the fiscal to the Solicitor General's Office only
on September 2, 1971 or nearly one year from the issuance of the order. Twenty-two days
thereafter or on September 24 the Solicitor General appealed from that order and filed a motion
for extension of time within which to submit a record on appeal. The appeal was given due
course.

In its decision dated October 24, 1980 the Appellate Court through Justices Asuncion, Porfirio
V. Sison and Sundiam dismissed the petition because the 1970 order had allegedly long
become final and unappealable. The Solicitor General appealed to this Court.
That is the issue to be resolved first: whether the appeal of the State from the trial court's 1970
order of denial was seasonably made. The Appellate Court held that the service of the order on
Dispo, as special attorney, was binding on the Solicitor General's Office. Consequently, the
record on appeal, which was filed after thirty days from the service of the order upon Dispo, was
filed out of time.
We hold that the reglementary thirty-day period for appeal should be reckoned from the time the
Solicitor General's Office was apprised of the 1970 order of denial and not from the time the
special counsel or the fiscal was served with that order. These representatives of the Solicitor
General had no power to decide whether an appeal should be made. They should have referred
the matter to the Solicitor General.
In the designation of Dispo as special counsel by Solicitor General Barredo, approved by
Secretary of Justice Teehankee, it was specified that he should consult the Solicitor General on
all questions, legal and factual, regarding the case. The question of whether an appeal should
be made could only be decided by the Solicitor General's Office.
The 1969 petition to annul the decision, decree and titles was filed by Solicitor General Felix V.
Makasiar, Assistant Solicitor General Antonio A. Torres and Solicitor Alicia Sempio-Diy.
Consequently, the Solicitor General's Office should be served with the final order disposing of
the petition and should not be bound by the service on his surrogates, the special counsel and
the fiscal (Republic vs. Polo, L-49247, March 13, 1979, 89 SCRA 33; Republic vs. Mendoza, L49891, October 31, 1983, 125 SCRA 539).
The fact that after the record on appeal was filed on time, the Solicitor General's Office was late
in filing the amendments to it is of no moment. In exceptional cases, like the instant case, the
interest of justice may warrant waiver of the rules (Republic vs. Court of Appeals, L-31303-04,
May 31, 1978, 83 SCRA 453).
In this case, where it is contended that the registration is void allegedly because public forestal
land was registered and the State sought to declare the decision void, the Government should
not be estopped by the mistakes or errors of its agents (Gov't. of the U. S. vs. Judge of 1st Inst.
of Pampanga, 50 Phil. 975, 980; Bachrach Motor Co. vs. Unson, 50 Phil. 981, 990; Go Tian An
vs. Republic, 124 Phil. 472, 475; Republic vs. Aquino, L-33983, January 27, 1983, 120 SCRA
186, 191-192).
Now, as to the merits of the case. It is incontestable that Lot 1, the 885-hectare area registered
by the Maxinos, is within the public forest, not alienable and disposable nor susceptible of
private appropriation. Its inclusion in the public forest was certified by Director of Forestry
Florencio Tamesis on July 6, 1940, as per Land Classification Map No. 1386, Tayabas Project
No. 16-E of Mulanay, Exhibit C-Annulment, and as shown in the report and testimony of
Lorenzo R. Tria, a forest station warden (Exh. B-Annulment; 7, 10-15 tsn March 5, 1970). Tria
recommended that the title of the Maxino spouses be annulled (Exh. B-Annulment).
The certification was reiterated by the Director of Forestry on May 20, 1948 as per Land
Classification Map No. 1516, No. 16-E of Mulanay, Quezon, Exhibit 1-A-Director of Forestry,

and as shown in paragraph 6 of the report of Forester Emerson B. Abraham who recommended
that the opposition to the registration entered by the Director be sustained (Exh. 1-Director of
Forestry; Exh. Q, Report of Land Investigator Serapion Bauzon).
The basis of the claim of the Maxinos is a Spanish title, Exhibit G, a gratuitous composition
title or adjustment title issued on July 30, 1888 to Prudencio Tesalona pursuant to the Royal
Decree of December 26, 1884 for 29 hectares of pasture land (pasto de animales) allegedly
bounded by the Yamay and Campalacio Creeks. *
There is a monstrous and bewildering discrepancy between the area of 29 hectares and the
actual area of the land bounded by the Yamay and Campalacio Creeks which is 970
hectares as surveyed in 1959 (Exh. D). We have no hesitation in saying that the composition
title erred in stating the boundaries. The trial court grievously erred in applying to this case the
rule that the area comprised in the boundaries should prevail over that stated in the moniments
of title.
Tria averred in his report and testimony that the Yamay and Campalacio Creeks mentioned in
the composition title really refer to the Banguian and Mamba creeks. This would mean that the
actual area claimed by Maxino was only 371 hectares, not 970 (Exh. B-Annulment; 27-30 tsn
March 5, 1970).
That would also explain why in the document, Exhibit H, presented by the Maxinos, mention is
made of "paligawang 'Manba' ".
The unreliability or dubiousness of the composition title is evident from the sale executed by the
heirs of Prudencio Tesalona in favor of Tarciana Morales-Maxino (Exh. F).
Prudencio Tesalona died in 1905. He was survived by his two children Maria and Lucila. On
September 24, 1935 the two heirs, without executing an extrajudicial settlement of Prudencio's
estate and adjudicating the said 29-hectare land to themselves, executed an " absolute sale" of
the land in favor of Tarciana Morales-Maxino (Exh. F), the wife of applicant Prudencio Maxino
who was Maria's son and the grandson of Prudencio Tesalona.
That curious document is not a sale at all. It is a "quit-claim". It is stated therein that in
consideration of P200 the Tesalona sisters "releases and forever quitclaim unto the said
Vendee" the 29-hectare land described in the composition title (Exh. F).
As an indication that the Tesalona "vendors" were not certain that their title was good, it was
stipulated as an "express condition" that the said vendors had no obligation of warranty for "the
premises hereby sold by them, the Vendee hereby expressly releasing the Vendor(s) from all
duty of defending the Vendee against all persons now claiming, or who may hereafter claim, to
have a better right and title thereto, and assuming all the risk of eviction by superior title" (Exh.
F).
It was further stipulated "that in the event that any third person shall succeed in establishing
right or title to said premises or to any portion thereof superior to that of the grantor and in
lawfully dispossessing the Vendee therefrom the Vendee shall not be entitled to reimbursement
from the Vendor of the sum of TWO HUNDRED PESOS which constitutes the consideration for
these presents, or of any part thereof, or to damages" (Exh. F).

The Maxinos contend that Tesalona's gratuitous adjustment or composition title (as
distinguished from anonerous adjustment title) should prevail in determining the Identity of the
disputed land. This assertion is untenable in the light of the notorious discrepancy between the
area of 29 hectares stated in the title and the 970 hectares now claimed as the real area (885
hectares for Lot 1 and 84 hectares for Lot 2 which is not involved in this case).
The most that can be said for Tesalona is that his gratuitous adjustment title granted him
possessory rights over pasture land with an area of 29 hectares but not ownership over 970
hectares of grazing land. As to the requirements for an adjustment proceeding under the Royal
Decree of December 26, 1884, where the area in hectares, not the boundaries, is important, see
Ventura, Land Registration and Mortgages, pp. 1719.
The Maxinos have the burden of proving that the title justified the considerable increase in area.
They have not shown that a title for 29 hectares could be a valid title for 970 hectares. The
boundaries and areas stated in Tesalona's tax declarations reveal that a different land was
covered thereby. The title states that the 29-hectare land was located in Barrio Yamay. In his
tax declarations it is stated that the land was located in Barrio Cambuga, now Anonang.
His 1906 tax declaration is for a parcel of land whose boundaries are not the Yamay and
Campalacio Creeks but it was bounded by the Yamay Creek and the lands of Maximo
Tesalona, Emiterio Tesalona and Felix Aguilles, with an area of 120 hectares (Exh. I). On the
other hand, his 1919 and 1921 tax declarations are for land with the same boundaries but with
an area of 36 hectares only (Exh. I-2 and I-3).
The 1948, 1958 and 1961 tax declarations use the boundaries Campalacio and Yamay Creeks
but the area of the pasture land is 100 hectares only, a far cry from the 970 hectares as
surveyed (Exh. I-4, I-5 and I-6).
It is axiomatic that public forestal land is not registerable. Its inclusion in a title, whether the title
be issued during the Spanish regime or under the Torrens system, nullifies the title (Director of
Lands vs. Reyes, L-27594 and Alinsunurin vs. Director of Lands, L-28144, November 28, 1975,
68 SCRA 177, 194-5; Director of Lands vs. Salazar, G. R. No. 50340, December 26, 1984).
Possession of public forestal lands, however long, cannot ripen into private ownership (Director
of Forestry vs. Munoz, L-24796, June 28, 1968, 23 SCRA 1183, 1199; Director of Lands vs.
Salazar, supra).
The oral evidence does not bolster the case at all for the applicants. Applicant Prudencio
Maxino testified that the lot he was seeking to register has an area of more than seventy
hectares (8 tsn Jan. 11, 1961). He purchased the lot from his aunt and mother, as shown in the
deed of September 24, 1935, Exhibit F (9).
He testified that the Mamba Creek is also known as Yamay Creek (13). The land was grazing or
pasture land (15). Thirty-one squatters occupied the land (5 tsn March 6, 1961). He did not
know that the land had an area of 29 hectares in 1935 when he bought it (6). He came to know
the area of the land when it was surveyed. He was not present when it was surveyed (6).
Another witness, Fortunato Naadiego, 76, testified that the land was possessed during the
Spanish regime by his stepfather, Pedro Tesalona, the owner, not Prudencio Tesalona, the
holder of the adjustment title (11).

Spanish titles are not indefeasible (Director of Forestry vs. Munoz, supra, p. 1198). The instant
case bears similarities to Ramirez and Bayot de Ramirez vs. Director of Lands, 60 Phil. 114,
where an adjustment title issued in 1896 was held to be void because it was fraudulent and it
covered public forestal land not subject to registration. As to void composition or patent issued
in 1898, see Testagorda vs. Commanding General, 6 Phil. 573.
Incidentally, it may be mentioned that Presidential Decree No. 892 effective February 16, 1976
discontinued the use of Spanish titles as evidence in land registration proceedings.
WHEREFORE, the order of Judge Agana, the decision of the Appellate Court and the decision
of Judge Del Rosario dated March 21, 1961 are reversed and set aside. The application for
registration of Lot 1, Psu-175880 is dismissed. No costs.
SO ORDERED.
Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.
Makasiar, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 71176 May 21, 1990

REPUBLIC OF THE PHILIPPINES (Ministry of Education and Culture), petitioner,
vs.
INTERMEDIATE APPELLATE COURT and AMEREX ELECTRONICS, PHILS.
CORPORATION, respondents.
Siguion Reyna, Montecillo and Ongsiako for private respondents.

FERNAN, C.J.:
The government, in the exercise of its power of eminent domain, expropriated property owned
by Amerex Electronics, Phils. Corporation. The amount of just compensation for such property
is now the subject of this petition for review on certiorari.
The property involved consists of four (4) parcels of land with a total area of 9,650 square
meters located at No. 2090 Dr. Manuel L. Carreon Street, Manila, a short walking distance from
Herran (now Pedro Gil) Street. Its previous owner, Avegon Inc., offered it for sale to the City
School Board of Manila on July 21, 1973 at P2,300,000. The school board was willing to buy at
P1,800,000 but the then Mayor of Manila intervened and volunteered to negotiate with Avegon
Inc. for a better price.
Inasmuch as the alleged negotiation did not materialize, on June 3, 1974, Avegon Inc. sold the
property and its improvements to Amerex Electronics, Phils. Corporation (Amerex for brevity) for
P1,800,000. Thereafter, Transfer Certificates of Title Nos. 115571, 115572, 115573 and 115574
were issued in favor of Amerex.
On August 29, 1975, the Solicitor General filed for the Department of Education and Culture
(DEC) a complaint against Amerex for the expropriation of said property before the Court of
First Instance of Manila (Civil Case No. 99190). The complaint stated that the property was
needed by the government as a permanent site for the Manuel de la Fuente High School (later
renamed Don Mariano Marcos Memorial High School); that the fair market value of the property
had been declared by Amerex as P2,435,000, and that the assessor had determined its market
value as P2,432,042 and assessed it for taxation purposes in the amount of P1,303,470. 1
In a motion praying that the plaintiff be authorized to take immediate possession of the property,
the then Acting Solicitor General Hugo E. Gutierrez, Jr., invoking Presidential Decree No. 42,
informed the court that said assessed value of the property for taxation purposes had been
deposited with the Philippine National Bank (PNB) in Escolta, Manila on September 30, 1975.

Consequently, on October 9, 1975, the court issued an order directing the sheriff to place the
plaintiff in possession of the property. The plaintiff took actual possession thereof on October
13, 1975.
Amerex filed a motion to dismiss the complaint stating that while it was not contesting the merits
of the complaint, the same failed to categorically state the amount of just compensation for the
property. It therefore prayed that in consonance with P.D. No. 794, the just compensation be
fixed at P2,432,042, the market value of the property determined by the assessor which was
lower than Amerex's own declaration.
The motion to dismiss was opposed by the plaintiff reasoning that while indeed the market value
as determined by the assessor was lower than that declared by Amerex, the plaintiff intended to
present evidence of a much lower market value.
Alleging that its motion to dismiss merely sought a clarification on the just compensation for the
property, Amerex filed a motion to withdraw the plaintiffs deposit of P1,303,470 with the PNB
without prejudice to its entitlement to the amount of P1,128,572, the balance of the just
compensation of P2,432,042 insisted upon. The plaintiff interposed no objection to the motion
provided that an order of condemnation be issued by the court and that the plaintiff be allowed
to present its evidence on the matter of just compensation.
On December 3, 1975, the lower court issued an order vesting the plaintiff with the lawful light to
take the property upon payment of just compensation as provided by law. On December 19,
1975, after the parties had submitted the names of their respective recommendees to the
appraisal committee, the lower court appointed Atty. Narciso Pea, Aurelio V. Aquino and Atty.
Higinio Sunico as commissioners.
Thereafter, the lower court ordered Amerex to submit an audited financial statement on the
acquisition cost of the property including expenses for its improvement. Amerex was also
allowed by the court, after it had filed a second motion therefor, to withdraw the P1,303,470
deposit with the PNB.
On March 12, 1976, the plaintiff filed a motion for leave of court to amend its complaint stating
that after it had filed the same, P.D. No. 464 2 was amended by P.D. No. 794; that Section 92 of
said Code, as amended, provided that when private property is acquired for public use, its just
compensation "shall not exceed the market value declared by the owner or administrator or
anyone having legal interest in the property, or such market value as determined by the
assessor, whichever is lower"; and that the amended complaint would state that the fair market
value of the property could not be in excess of P1,800,000, the amount for which defendant's
predecessor-in-interest had offered to sell said properties to the Division of Public Schools of
Manila and which amount was also the purchase price paid by Amerex to Avegon Inc. In due
course, plaintiff filed an amended complaint.
Amerex, however, opposed the motion for leave to amend the complaint contending that the
plaintiff was insisting on a valuation given by neither the owner nor the assessor as mandated
by P.D. No. 794 but by another person in August 1973 when the peso value was much higher.
The lower court denied the motion to amend the complaint; but after the plaintiff had filed a
motion for reconsideration, the lower court admitted the amended complaint on April 27, 1976.
In the meantime, Amerex submitted to the court "audited financial statements' consisting of an

account stating that the cost of its land and buildings was P2,107,479.48, and another account
stating that it incurred total expenses of P150,539 for their maintenance. 3 These statements
yielded the amount of P2,258,018.48 as the total value of the property.
The commissioners conducted an ocular inspection and hearing on the value of the property.
On October 18, 1976, the plaintiff filed a motion seeking the disqualification of Engineer Aurelio
B. Aquino as commissioner on the ground that he could not be expected to be unbiased
inasmuch as in the three appraisal reports submitted by Amerex, Aquino had indicated as fair
market value of the property amounts much more than the plaintiffs fair market value
determination of P1,800,000. Said appraisal reports were made by Ampil Realty and Appraisal
Co., Inc. with Aquino signing thereon as real estate appraiser. One report, dated February 15,
1974 and submitted to Commonwealth Insurance Company indicated P2,100,000 as the fair
market value of the property. 4 Two other reports were made at the behest of Amerex with one,
dated November 15, 1974, fixing the fair market value at P2,300,0005, and the other, dated
June 5, 1975, with P2,400,000 as the fair market value. 6
Amerex opposed the motion to disqualify Aquino as commissioner, and the court, in its order of
November 5, 1976, denied it. Hence, on January 24, 1977, the commissioners submitted their
appraisal report finding that the fair market value of the property was P2,763,400. The
commissioners, however added:
Under the provision of Presidential Decree No. 464, as amended by Presidential
Decree No. 794, abovequoted, we could have safely adopted the valuation of the
City Assessor in the sum of P2,432,042.00, this being lower than that declared
by the owner in the sum of P2,435,000.00, although by actual appraisal of the
undersigned Commissioners the property could command a fair market value of
P2,763,400.00 as of the date of our ocular inspection.
Considering, however, that according to the audited statement submitted by
defendant, the acquisition costs and other legal expenses incurred on the subject
property by AMEREX, the grand total of P2,258,018.57, are (sic) lower than the
findings of the undersigned Commissioners, the explanation being the fact that
the price of the sale was a real bargain possibly due to dire necessities of the
seller Avegon, it is respectfully submitted that the said sum of P2,258,018.57 be
adopted for purposes of determining just compensation payable to defendant
AMEREX, which sum does not exceed, but is even lower than, the fair market
value was determined by the City Assessor and as declared by said defendant. 7
Both parties objected to the report of the commissioners. The plaintiff contended that the
commissioners' conclusion that the fair market value of the property was P2,763,400 was
unsupported by evidence and that their recommended just compensation of P2,258,018.57 was
excessive. It reiterated its stand that the just compensation should only be P1,800,000 it being
the price had the sale between the city school board and Avegon Inc. materialized and also the
actual price of the sale between Avegon Inc. and Amerex. On the other hand, Amerex averred
that the recommended just compensation was unjustified in view of the commissioners' finding
that the fair market value of the property was P2,763,400.
On March 15, 1977, the lower court 8 rendered a decision based on the following findings:

The court believes that the findings of the commissioners are supported by the
evidence adduced during the hearings and that their recommendation is
reasonable. The property was originaly owned by Avegon Inc. and was assessed
at P1,079,370.00 by the City of Manila for the year 1974 (Exh. A-4). Avegon Inc.
offered to sell it to the City School Board on July 21, 1973 at P2,300,000.00 but it
accepted the counter-offer of P1,800,000. The negotiations, however, fell through
when the city failed to act (Exhs. C, C-1, C-2, C-3 and C-4). The property was
appraised on February 15, 1974 at P2,100,000.00 at the Instance of
Commonwealth Insurance Company, an affiliate of Warner, Barnes & Co., Inc.
(Exh. G). The defendant company introduced improvements on the property in
the middle part of 1974 worth P260,690.50 (Exhs. 4, 4-A to 4-J; 11, 13, 14 to 19).
After the renovation, the property was again appraised at the instance of the
defendant at P2,300,000.00 on November 15, 1974 (Exh. 2). Due to the worldwide recession, there followed a slump in the demand for electronic products. On
June 4, 1975, the Traders Commodities Corporation offered to buy the property
at P2,750,000.00 with a deposit of P50,000.00 as earnest money. The offer was
formally made by the law firm Salonga, Ordoez, Yap, Africano and Associates
(Exch. 6). The offer was accepted on June 9, 1975 (Exhs. 7 and 8). The sale was
not consummated, however, when the government notified the defendant in a
conference held in Malacanang on June 15, 1975 that it wanted to buy the
property for the use of the Manuel de la Fuente High School (Exh. 9). Because of
the failure of the parties to agree on the price and other conditions of the
purchase, the government filed this action on August 2, 1975.
It is apparent that the commissioners were influenced by the fact that the city
assessors fixed the market value of the property at P2,432,042.00 for the year
1975 pursuant to Presidential Decree No. 464 and that there was a perfected
contract to buy it at P2,750,000.00. No evidence was presented nor even an
allegation made, to show that the government valuation is fraudulent or
erroneous. It must therefore be regular (Rule 131, sec. m) and in view of the
reliance of the Presidential Decree upon it as a standard to be followed by the
courts in arriving at the just compensation of the property when it is acquired by
the government, it has great evidentiary weight. The offer to buy at
P2,750,000.00 was made by one of the most reputable law firms in the country. It
is not likely that it would have lent itself to any fraudulent device or scheme to
inflate the value of the property. Commissioner Pea is a renowned authority on
land registration, and has been a realtor for many years. Atty. Higinio Sunico is
the chief of the Land Management Division, Bureau of Lands, who was
recommended by the plaintiff. Both are well-known for their probability Although it
appears that Mr. Aquino, the commissioner recommended by the defendant, had
occasion in the past to participate in transactions involving the same property,
the court believes that the concurrence of the other commissioners is a safe
guaranty of the correctness of their appraisal and recommendation.
Accordingly, the dispositive portion of the decision reads as follows:
WHEREFORE, judgment is hereby rendered funding the amount of
P2,258.018.57 as just compensation for the property of the defendant and
declaring the plaintiff entitled to possess and approximate it to the public use
alleged in the complaint and to retain it upon payment of the said amount, after

deducting the amount of P1,303,470.00, with legal interest from October 13,
1975 when the plaintiff was placed in possession of the real property, and upon
payment to each of the commissioners of the sum of P35.00 for their attendance
during the hearings held on January 23, February 16, May 11, July 23,
September 17, October 12 and December 10, 1976, plus P500.00 each for the
preparation of the report, and the costs.
The plaintiff elevated the case to the then Intermediate Appellate Court (IAC) for review. On
October 29, 1984, it affirmed the appealed decision with the modification that the plaintiff
Republic of the Philippines be exempted from the payment of the commissioners' fees, the
P500.00 granted each of them for the preparation of the report and the costs.
Its motion for the reconsideration of said decision having been denied, petitioner filed the instant
petition submitting the following issues for resolution:
1. Whether or not respondent Court erred in not disqualifying
Commissioner Aurelio B. Aquino from membership in the
Committee of Appraisal.
2. Whether or not respondent Court erred in not totally
disregarding the audited statement by the defendant, which is
hearsay in nature and was not formally offered in evidence.
3. Whether or not respondent Court erred in totally disregarding
petitioner's evidence showing that the award of just compensation
should be only P1,800,000.00 and not P2,258.018.57 as awarded
by said respondent Court.
The issue of the disqualification of Aquino as commissioner deserves scant attention. Under
Section 8, Rule 67 of the Rules of Court, the court may take the following actions on the report
submitted by commissioners: it may "accept the report and render judgment in accordance
therewith; or for cause shown, it may recommit the same to the commissioners for further report
of facts, or it may set aside the report and appoint new commissioners, or it may accept the
report in part and reject it in part; . . . ." In other words, the report of the commissioners is merely
advisory and recommendatory in character as far as the court is concerned. 9
Hence, it hardly matters that one of the three commissioners had a preconceived and biased
valuation of the condemned property. The veracity or exactitude of the estimate arrived at by the
commissioners may not be adversely affected thereby. In fact, the report of only two
commissioners may suffice if the third commissioner dissents from the former's
valuation. 10 Indeed, the participation of an allegedly biased commissioner may not result in the
total disregard of an appraisal report in the absence of proof that the two other commissioners
were unduly influenced by their allegedly partial colleague.
The determination of just compensation for a condemned property is basically a judicial
function. As the court is not bound by the commissioners' report, it may make such order or
render such judgment as shall secure to the plaintiff the property essential to the exercise of its
right of condemnation, and to the defendant just compensation for the property expropriated.
For that matter, this Court may even substitute its own estimate of the value as gathered from
the record. 11 Hence, although the determination of just compensation appears to be a factual

matter which is ordinarily outside the ambit of its jurisdiction, this Court may disturb the lower
court's factual finding on appeal when there is clear error or grave abuse of discretion. 12
We hold that the courts below made an erroneous determination of just compensation in this
case.
In the first place, the just compensation prescribed herein is based on the commissioners'
recommendation which in turn is founded on the "audited" statements of Amerex that the
property is worth P2,258,018.57. As earlier pointed out, while the court may accept the
commissioners' report and render judgment in accordance therewith, it may not do so without
considering whether the report is supported by evidence. The court is also duty-bound to
determine whether the commissioners had discharged the trust reposed in them according to
well-established rules and formed their judgment upon correct legal principles for they are not
supposed to act ad libitum . 13
Amerex's "audited" statement on the acquisition cost, cost of painting and major repairs, taxes,
and insurance premiums which totals P2,107,479.48, contains the following certification:
We have checked the details of the transactions indicated in the foregoing
schedule of Land and Building Account as at January 31, 1976 with the books
and records of Amerex Electronics (Philippines) Corporation which were
presented to us for examination and have found the details to be in accordance
therewith. We have not made an audit of the books of accounts of Amerex
Electronics (Philippines) Corporation.
Sycip, Gorres Velayo & Co.
PTR No. 4709791
January 23, 1976
Makati, Rizal
(Emphasis supplied). 14
Amerex's other "audited" statement on the maintenance expenses of the property wherein it
allegedly incurred the amount of P150,539.09 contains a similar certification by the same
accounting firm specifically stating that the auditor did not make an audit of the books of
accounts of Amerex. 15
It is clear from these certifications that the accounting firm which issued them merely compared
the figures in the schedules or "audited" statements with those of the records and books of
accounts of Amerex. As no investigation was made as to the veracity of the figures in the
account, there was no audit in the real sense of the term. To audit is to examine an account,
compare it with the vouchers, adjust the same, and to state the balance, by persons legally
authorized for the purpose. 16 While the word "audit" is sometimes restricted to a mere
mathematical process, it generally includes investigation, the weighing of evidence, and
deciding whether items should or should not be included in the account . 17 Audit involves the
exercise of discretion; it is a quasi-judicial function. 18 The accuracy of the "audited" statements
herein is therefore suspect.

Besides the fact that the petitioner was not furnished a copy of the audited statements which
were also not introduced in evidence, Enrique P. Esteban, vice-president and treasurer of
Amerex, and even a representative of the accounting firm, were likewise not presented during
the trial thereby depriving petitioner herein of the opportunity to cross-examine them. It would
therefore be unfair to the petitioner to hold it bound by the "audited" statements of Amerex
which may have been premised on false or mistaken data. 19
This Court having declared as unconstitutional the mode of fixing just compensation under P.D.
No. 794 20 just compensation should be determined either at the time of the actual taking of the
government or at the time of the judgment of the court, whichever comes first. 21
In this case, the issuance of the condemnation order and the actual taking of the property both
occurred in October, 1975. Accordingly, the appraisal made by Ampil Realty and Appraisal Co.,
Inc. on June 5, 1975, which date is nearest to that of the actual taking of the property, should be
the basis for the determination of just compensation the record being bereft of any indications of
anomaly appertaining thereto. It should be added that Wenceslao Ampil, the president of said
appraisal firm, testified at the trial and therefore petitioner had the opportunity to confront him
and to question his report. The reasonableness of the June 5,1975 appraisal fixing at
P2,400,000 the fair market value of the property, is bolstered by the fact that on June 4, 1975,
Traders Commodities Corporation, through its lawyer, Sedfrey A. Ordoez offered to buy the
property at P2,750,000. 22 It must be emphasized, however, that legal interest on the balance of
the just compensation of P2,400,000 after deducting the amount of P1,303,470 which had been
delivered to Amerex, should be paid by petitioner from the time the government actually took
over the propert y. 23
Much as we realize the need of the government, under these trying times, to get the best
possible price for the expropriated property considering the ceaseless and continuing necessity
for schools, we cannot agree with the petitioner that the just compensation for the property
should be the price it commanded when it was first offered for sale to the City School Board of
Manila. Petitioner failed to substantiate its claim that the property is worth the lower amount of
P1,800,000. In contrast, Amerex submitted evidence consisting of the aforesaid June 5, 1975
appraisal report which fixed the fair market value of the property at P2,400,000.
WHEREFORE, the just compensation of the property expropriated for the use of the Manuel de
la Fuente High School Don Mariano Marcos Memorial High School) is hereby fixed at Two
Million Four Hundred Thousand Pesos (P2,400,000.00). After deducting the amount of
P1,303,470.00 therefrom, the petitioner shall pay the balance with legal interest from October
13, 1975.
SO ORDERED.
Feliciano and Cortes, JJ., concur.
Gutierrez, Jr. and Bidin, JJ., took no part

FIRST DIVISION
[G.R. No. L-27873. November 29, 1983.]
HEIRS OF JOSE AMUNATEGUI, Petitioners, v. DIRECTOR OF
FORESTRY, Respondent.
[G.R. No. L-30035. November 29, 1983.]
ROQUE BORRE and ENCARNACION DELFIN, Petitioners, v. ANGEL ALPASAN,
HEIRS OF MELQUIADES BORRE, EMETERIO BEREBER and HEIRS OF JOSE
AMUNATEGUI and THE CAPIZ COURT OF FIRST INSTANCE, Respondents.
SYLLABUS
1. CIVIL LAW; PUBLIC LAND ACT; FOREST LAND; CLASSIFICATION NOT LOST
EVEN IF IT HAS BEEN STRIPPED OF FOREST COVER; UNLESS RELEASED IN AN
OFFICIAL PROCLAMATION AS DISPOSABLE LANDS, RULES ON CONFIRMATION OF
IMPERFECT TITLE DO NOT APPLY. A forested area classified as forest land of the
public domain does not lose such classification simply because loggers or settlers
may have stripped it of its forest cover. Parcels of land classified as forest land may
actually be covered with grass or planted to crops by kaingin cultivators or other
farmers. "Forest lands" do not have to be on mountains or in out of the way places.
Swampy areas covered by mangrove trees, nipa palms, and other tress growing in
brackish or sea water may also be classified as forest land. The classification is
descriptive of its legal nature or status and does not have to be descriptive of what
the land actually looks like. Unless and until the land classified as "forest" is
released in an official proclamation to that effect so that it may form part of the
disposable agricultural lands of the public domain, the rules on confirmation of
imperfect title do not apply.
2. ID.; ID.; FOREST LANDS; ACQUISITIVE OWNERSHIP NOT ACQUIRED. This
Court ruled in the leading case of Director of Forestry v. Muoz (23 SCRA 1184)
that possession of forest lands, no matter how long, cannot ripen into private
ownership. And in Republic v. Animas (56 SCRA 499), we granted the petition on
the ground that the ares covered by the patent and title was not disposable public
land, it being a part of the forest zone and any patent and title to said area is void
ab initio. It bears emphasizing that a positive act of Government is needed to
declassify land which is classified as forest and to convert it into alienable or
disposable land for agricultural or other purposes.
3. ID.; ID.; CONFIRMATION, OF IMPERFECT TITLE CASES; BURDEN OF PROVING
THAT THE REQUIREMENTS OF THE LAW HAVE BEEN MET, RESTS ON THE
APPLICANT. In confirmation of imperfect title cases, the applicant shoulders the
burden of proving that he meets the requirements of Section 48, Commonwealth
Act No. 141, as amended by Republic Act No. 1942. He must overcome the

presumption that the land he is applying for is part of the public domain but that he
has an interest therein sufficient to warrant registration in his name because of an
imperfect title such as those derived from old Spanish grants or that he has had
continuous, open, 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 (30) years preceding the filing of his application.
DECISION
GUTIERREZ, JR., J.:
The two petitions for review on certiorari before us question the decision of the
Court of Appeals which declared the disputed property as forest land, not subject to
titling in favor of private persons.
These two petitions have their genesis in an application for confirmation of
imperfect title and its registration filed with the Court of First Instance of Capiz. The
parcel of land sought to be registered is known as Lot No. 885 of the Cadastral
Survey of Pilar, Capiz, and has an area of 645,703 square meters.cralawnad
Roque Borre, petitioner in G.R. No, L-30035, and Melquiades Borre, filed the
application for registration. In due time, the heirs of Jose Amunategui, petitioners in
G.R. No. L-27873 filed an opposition to the application of Roque and Melquiades
Borre. At the same time, they prayed that the title to a portion of Lot No. 885 of
Pilar Cadastre containing 527,747 square meters be confirmed and registered in the
names of said Heirs of Jose Amunategui.
The Director of Forestry, through the Provincial Fiscal of Capiz, also filed an
opposition to the application for registration of title claiming that the land was
mangrove swamp which was still classified as forest land and part of the public
domain.
Another oppositor, Emeterio Bereber filed his opposition insofar as a portion of Lot
No. 885 containing 117,956 square meters was concerned and prayed that title to
said portion be confirmed and registered in his name.
During the progress of the trial, applicant-petitioner Roque Borre sold whatever
rights and interests he may have on Lot No. 885 to Angel Alpasan. The latter also
filed an opposition, claiming that he is entitled to have said lot registered in his
name.
After trial, the Court of First Instance of Capiz adjudicated 117,956 square meters
to Emeterio Bereber and the rest of the land containing 527,747 square meters was
adjudicated in the proportion of 5/6 share to Angel Alpasan and 1/6 share to
Melquiades Borre.

Only the Heirs of Jose Amunategui and the Director of Forestry filed their respective
appeals with the Court of Appeals, The case was docketed as CA-G.R. No. 34190-R.
In its decision, the Court of Appeals held:jgc:chanrobles.com.ph
". . . the conclusion so far must have to be that as to the private litigants that have
been shown to have a better right over Lot 885 are, as to the northeastern portion
of a little less than 117,956 square meters, it was Emeterio Bereber and as to the
rest of 527,747 square meters, it was the heirs of Jose Amunategui; but the last
question that must have to be considered is whether after all, the title that these
two (2) private litigants have shown did not amount to a registerable one in view of
the opposition and evidence of the Director of Forestry; . . .
". . . turning back the clock thirty (30) years from 1955 when the application was
filed which would place it at 1925, the fact must have to be accepted that during
that period, the land was a classified forest land so much so that timber licenses
had to be issued to certain licensee before 1926 and after that; that even Jose
Amunategui himself took the trouble to ask for a license to cut timber within the
area; and this can only mean that the Bureau of Forestry had stood and maintained
its ground that it was a forest land as indeed the testimonial evidence referred to
above persuasively indicates, and the only time when the property was converted
into a fishpond was sometime after 1950; or a bare five (5) years before the filing
of the application; but only after there had been a previous warning by the District
Forester that that could not be done because it was classified as a public forest; so
that having these in mind and remembering that even under Republic Act 1942
which came into effect in 1957, two (2) years after this case had already been filed
in the lower Court, in order for applicant to be able to demonstrate a registerable
title he must have shown.
"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 (30) years, preceding the filing of the application;
the foregoing details cannot but justify the conclusion that not one of the applicants
or oppositors had shown that during the required period of thirty (30) years
prescribed by Republic Act 1942 in order for him to have shown a registerable title
for the entire period of thirty (30) years before filing of the application, he had been
in
"open, continuous, exclusive and notorious possession and occupation of
agricultural lands of the public domain,
it is evident that the Bureau of Forestry had insisted on its claim all throughout that
period of thirty (30) years and even before and applicants and their predecessors
had made implicit recognition of that; the result must be to deny all these
applications; this Court stating that it had felt impelled notwithstanding, just the
same to resolve the conflicting positions of the private litigants among themselves

as to who of them had demonstrated a better right to possess because this Court
foresees that this litigation will go all the way to the Supreme Court and it is always
better that the findings be as complete as possible to enable the Highest Court to
pass final judgment;
"IN VIEW WHEREOF, the decision must have to be as it is hereby reversed; the
application as well as all the oppositions with the exception of that of the Director of
Forestry which is hereby sustained are dismissed; no more pronouncement as to
costs."cralaw virtua1aw library
A petition for review on certiorari was filed by the Heirs of Jose Amunategui
contending that the disputed lot had been in the possession of private persons for
over thirty years and therefore in accordance with Republic Act No. 1942, said lot
could still be the subject of registration and confirmation of title in the name of a
private person in accordance with Act No. 496 known as the Land Registration Act.
On the other hand, another petition for review on certiorari was filed by Roque
Borre and Encarnacion Delfin, contending that the trial court committed grave
abuse of discretion in dismissing their complaint against the Heirs of Jose
Amunategui. The Borre complaint was for the annulment of the deed of absolute
sale of Lot No. 885 executed by them in favor of the Heirs of Amunategui. The
complaint was dismissed on the basis of the Court of Appeals decision that the
disputed lot is part of the public domain. The petitioners also question the
jurisdiction of the Court of Appeals in passing upon the relative rights of the parties
over the disputed lot when its final decision after all is to declare said lot a part of
the public domain classified as forest land.chanrobles law library : red
The need for resolving the questions raised by Roque Borre and Encarnacion Delfin
in their petition depends on the issue raised by the Heirs of Jose Amunategui, that
is, whether or not Lot No. 885 is public forest land, not capable of registration in
the names of the private applicants.
The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as
forest land because it is not thickly forested but is a "mangrove swamp." Although
conceding that a "mangrove swamp" is included in the classification of forest land in
accordance with Section 1820 of the Revised Administrative Code, the petitioners
argue that no big trees classified in Section 1821 of said Code as first, second and
third groups are found on the land in question. Furthermore, they contend that Lot
885, even if it is a mangrove swamp, is still subject to land registration proceedings
because the property had been in actual possession of private persons for many
years, and therefore, said land was already "private land" better adapted and more
valuable for agricultural than for forest purposes and not required by the public
interests to be kept under forest classification.
The petition is without merit.
A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest
cover. Parcels of land classified as forest land may actually be covered with grass or

planted to crops by kaingin cultivators or other farmers. "Forest lands" do not have
to be on mountains or in out of the way places. Swampy areas covered by
mangrove trees, nipa palms, and other trees growing in brackish or sea water may
also be classified as forest land. The classification is descriptive of its legal nature or
status and does not have to be descriptive of what the land actually looks like.
Unless and until the land classified as "forest" is released in an official proclamation
to that effect so that it may form part of the disposable agricultural lands of the
public domain, the rules on confirmation of imperfect title do not apply.
This Court ruled in the leading case of Director of Forestry v. Muoz (23 SCRA
1184) that possession of forest lands, no matter how long, cannot ripen into private
ownership. And in Republic v. Animas (56 SCRA 499), we granted the petition on
the ground that the area covered by the patent and title was not disposable public
land, it being a part of the forest zone and any patent and title to said area is void
ab initio. It bears emphasizing that a positive act of Government is needed to
declassify land which is classified as forest and to convert it into alienable or
disposable land for agricultural or other purposes.
The findings of the Court of Appeals are particularly well-grounded in the instant
petition.
The fact that no trees enumerated in Section 1821 of the Revised Administrative
Code are found in Lot No. 885 does not divest such land of its being classified as
forest land, much less as land of the public domain. The appellate court found that
in 1912, the land must have been a virgin forest as stated by Emeterio Berebers
witness Deogracias Gavacao, and that as late as 1926, it must have been a thickly
forested area as testified by Jaime Bertolde. The opposition of the Director of
Forestry was strengthened by the appellate courts finding that timber licenses had
to be issued to certain licensees and even Jose Amunategui himself took the trouble
to ask for a license to cut timber within the area. It was only sometime in 1950 that
the property was converted into fishpond but only after a previous warning from
the District Forester that the same could not be done because it was classified as
"public forest." chanrobles.com:cralaw:red
In confirmation of imperfect title cases, the applicant shoulders the burden of
proving that he meets the requirements of Section 48, Commonwealth Act No. 141,
as amended by Republic Act No. 1942. He must overcome the presumption that the
land he is applying for is part of the public domain but that he has an interest
therein sufficient to warrant registration in his name because of an imperfect title
such as those derived from old Spanish grants or that he has had continuous, open,
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 (30) years
preceding the filing of his application.
The decision of the appellate court is not based merely on the presumptions implicit
in Commonwealth Act No. 141 as amended. The records show that Lot No. 88S
never ceased to be classified as forest land of the public domain.

In Republic v. Gonong (118 SCRA 729) we ruled:jgc:chanrobles.com.ph

"As held in Oh Cho v. Director of Lands, 75 Phil. 890, 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-interests 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."cralaw virtua1aw library
In the instant petitions, the exception in the Oh Cho case does not apply. The
evidence is clear that Lot No. 885 had always been public land classified as forest.
Similarly, in Republic v. Vera (120 SCRA 210), we ruled:jgc:chanrobles.com.ph
". . . The possession of public land however long the period thereof may have
extended, never confers title thereto upon the possessor because the statute of
limitations with regard to public land does not operate against the State, unless the
occupant can prove possession and occupation of the same under claim of
ownership for the required number of years to constitute a grant from the State.
(Director of Lands v. Reyes, 68 SCRA 177, 195)."cralaw virtua1aw library
We, therefore, affirm the finding that the disputed property Lot No. 885 is part of
the public domain, classified as public forest land. There is no need for us to pass
upon the other issues raised by petitioners Roque Borre and Encarnacion Delfin, as
such issues are rendered moot by this finding.chanrobles virtual lawlibrary
WHEREFORE, the petitions in G. R. No. L-30035 and G. R. No. L-27873 are
DISMISSED for lack of merit. Costs against the petitioners.
SO ORDERED.