Académique Documents
Professionnel Documents
Culture Documents
Separate Opinions
AQUINO, J.:
Like L-49623, Manila Electric Company vs. Judge Castro-Bartolome, this case involves the prohibition in section 11, Article XIV of the
Constitution that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed one
thousand hectares in area".
Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with an area of 313 square meters and an assessed value of P1,350 were
acquired by the Iglesia Ni Cristo on January 9, 1953 from Andres Perez in exchange for a lot with an area of 247 square meters owned by
the said church (Exh. D).
The said lots were already possessed by Perez in 1933. They are not included in any military reservation. They are inside an area which was
certified as alienable or disposable by the Bureau of Forestry in 1927. The lots are planted to santol and mango trees and banana plants. A
chapel exists on the said land. The land had been declared for realty tax purposes. Realty taxes had been paid therefor (Exh. N).
On September 13, 1977, the Iglesia Ni Cristo, a corporation sole, duly existing under Philippine laws, filed with the Court of First Instance of
Bulacan an application for the registration of the two lots. It alleged that it and its predecessors-in-interest had possessed the land for more
than thirty years. It invoked section 48(b) of the Public Land Law, which provides:
Chapter VIII.Judicial confirmation of imperfect or incomplete titles.
xxx xxx xxx
SEC. 48. The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the
land is located for confirmation of their claims and the issuance of a certificate of title therefore, under the Land Register Act, to wit:
xxx xxx xxx
Separate Opinions
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It is true that the language of articles 4 and 5 attributes title to those 'who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the
notion that ancient family possessions were in danger, if he had read every word of it. The words 'may prove' (acrediten), as well, or better,
in view of the other provisions, might be taken to mean when called upon to do so in any litigation. There are indications that registration
was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by virtue of
certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land became private property upon completion of the 30th year of continuous, exclusive, and unchallenged possession
of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the Meralco, there is no
justification for denying the Meralco's application for registration of its duly acquired title to the land. Meralco's predecessors-in-interest
had acquired ownership of the land by acquisitive prescription as provided by the Public Land Act and by the Civil Code. The land became
private property and Meralco duly acquired it by right of purchase. To deny Meralco's application to register the property because it is not a
natural person is unjustified because neither the new constitutional ban under the 1973 Constitution against private corporations owning
lands of the public domain or the Public Land Act's limitation on the right of application for confirmation of imperfect title to lands of the
public domain can be invoked any longer as the land had long ceased to be public land but had become private property. Meralco's
application in effect seeks confirmation of the acquisition of ownership of the land which had become private property of its predecessorsin-interest, the Piguing spouses who thru their open and unchallenged possession of the land for over thirty years acquired title thereto by
acquisitive prescription and by conclusive presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title
being transferred to the Meralco by right of purchase and traditio for it is not claimed that there is any legal prohibition against the
Piguing spouses transferring the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco,
even before the formal issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing
spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners
and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all
the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court
can after all these years dispose of it here and now. (See Francisco vs. City of Davao 14 )
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the
title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for
confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning hereof, the
Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent judge held in effect
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Separate Opinions
ABAD SANTOS, J., concurring:
In the result for the same reasons I have already given in Manila Electric Co. vs. Judge Floreliana Castro-Bartolome, G.R. No. L-49623.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of Herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public land laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
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AQUINO, J.:p
This case involves the prohibition in section 11, Article XIV of the Constitution that "no private coporation or associaiton may hold alienable
lands of the public domain except by lease not to exceed on ethousand hectares in area". * That prohibition is not found in the 1935
Constitution.
The Manila Electric Company, a domestic corporation organized under Philippine laws, more than sixty percent of whose capital stock is
owned by Filipino citizens, in its application filed on December 1, 1976 in the Makati branch of the Court of First Instance of Rizal, prayed
for the confirmation of its title to two lots with a total area of one hundred sixty-five square meters, located at Tanay, Rizal with an
assessed value of P3,270 (LRC Case No. N-9485, LRC No. N-50801).
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Separate Opinions
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Separate Opinions
ABAD SANTOS, J.: concurring:
I concur in the result. I am of the opinion that the lots which are sought to be registered have ceased to be lands of the public domain at
the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive prescription by the
predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain is inapplicable. However, the petitioner is relying on Sec. 48 of the
Public Land Act for the confirmation of its title and Mr. Justice Aquino is correct in holding that said provision cannot be availed by juridical
entities.
FERNANDO, C.J., concurring and dissenting:
I concur in the ruling of the Court that Meralco "as a juridical person" is disqualified to apply for its registration under Section 48(b).. 1 I
dissent insofar as the opinion of the Court would characterize such jurisdictional defect, under the particular circumstances of this case, as
an insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed
by us in Francisco v. City of Davao, 2 where the legal question raised, instead of being deferred and possibly taken up in another case, was
resolved. By legal fiction 3 and in the exercise of our equitable jurisdiction, I feel that the realistic solutionwould be to decide the matter as
if the application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such disability.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public lands laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of this
stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure known as
judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the land may be
granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The Director of Lands
has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of disposition of public land,
referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in which case, as in the
issuance of homestead and sales patents, the land involved is undoubtedly public land. The possessor of a piece of public land would have
the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is that in the latter case, the
area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the area subject to judicial
confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish laws and decrees, which
certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of incomplete and
imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect that such land has
ceased to be a public land. What these statements, however, really mean is that the land referred to no longer forms part of the mass of
public domain still disposable by the Director of Lands, under the authority granted him by the public land statutes. It, however, would not
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NARVASA, J.:
The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate Appellate Court affirming a decision of the
Court of First Instance of Isabela, which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring
481, 390 square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat tribe.
The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act No. 141 (The Public Land Act). as
amended: and the appealed judgment sums up the findings of the trial court in said proceedings in this wise:
1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a corporation duly organized in accordance with the laws of
the Republic of the Philippines and registered with the Securities and Exchange Commission on December 23, 1959;
2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can acquire real properties pursuant to the provisions of the
Articles of Incorporation particularly on the provision of its secondary purposes (paragraph (9), Exhibit 'M-l');
3. That the land subject of the Land Registration proceeding was ancestrally acquired by Acme Plywood & Veneer Co., Inc., on October 29,
1962, from Mariano Infiel and Acer Infiel, both members of the Dumagat tribe and as such are cultural minorities;
4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale took place on October 29, 1962;
5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood & Veneer Co., Inc., dates back before the
Philippines was discovered by Magellan as the ancestors of the Infiels have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer Infiel;
6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous, adverse and public from 1962 to the present and
tacking the possession of the Infiels who were granted from whom the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial.
7. That the land sought to be registered is a private land pursuant to the provisions of Republic Act No. 3872 granting absolute ownership to
members of the non-Christian Tribes on land occupied by them or their ancestral lands, whether with the alienable or disposable public
land or within the public domain;
8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five Million (P45,000,000.00) Pesos worth of
improvements, said improvements were seen by the Court during its ocular investigation of the land sought to be registered on September
18, 1982;
9. That the ownership and possession of the land sought to be registered by the applicant was duly recognized by the government when
the Municipal Officials of Maconacon, Isabela, have negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc.,
and this negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer Co., Inc., had donated a part of the land
bought by the Company from the Infiels for the townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was
accepted by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their special session on November 22, 1979.
The Director of Lands takes no issue with any of these findings except as to the applicability of the 1935 Constitution to the matter at hand.
Concerning this, he asserts that, the registration proceedings have been commenced only on July 17, 1981, or long after the 1973
Constitution had gone into effect, the latter is the correctly applicable law; and since section 11 of its Article XIV prohibits private
corporations or associations from holding alienable lands of the public domain, except by lease not to exceed 1,000 hectares (a prohibition
not found in the 1935 Constitution which was in force in 1962 when Acme purchased the lands in question from the Infiels), it was
reversible error to decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No. 141, as amended,
reads:
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Separate Opinions
GUTIERREZ, JR., J., concurring:
I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.
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Separate Opinions
GUTIERREZ, JR., J., concurring:
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NARVASA, J.:
From the adverse judgment of the Court of Appeals, 1 affirming in toto that of the Trial Court, 2 the petitioner has come to this Court on an
appeal by certiorari to plead for reversal of (1) the factual determination that she had sold the lot in controversy to private respondent, and
(2) the legal conclusion that neither the 1973 nor the 1987 Constitution disqualifies the corporation known as the Religious of the Virgin
Mary, from acquiring the land in question and registering it in its name. In light of the time-honored rule that findings of fact of the Court of
Appeals are generally final, and the doctrine lately laid down by this Court on the precise legal issue now raised by petitioner, her appeal
must fail.
The controversy at bar arose in connection with cadastral proceedings initiated by the Director of Lands, in behalf of the Republic, for the
settlement and adjudication of title to a large tract of land measuring 261.5791 hectares, divided into 1,419 lots, situated in the City of
Iligan. 3
Victoria Ong de Ocsio (herein petitioner) seasonably presented an answer to the petition. She alleged that she was the owner, by purchase,
of two (2) parcels of land with specific boundaries comprehended in the cadastral proceeding: Lot No. 1272, measuring 256 square meters,
and Lot 1273 a road lot, measuring 21 square meters; and that as owner, she had been in possession of both lots for fifteen (15) years, and
her predecessors-in-interest, for sixty (60) years. 4 Title to the same parcels of land was however claimed by the Religious of the Virgin
Mary. 5 In its answer, it averred that it had bought the lots from Victoria Ong de Ocsio and had been in possession as owner thereof for
over four years, and its possession and that of its predecessors was immemorial.
Evidence was received on these conflicting assertions after which the Cadastral Court rendered judgment, declaring that the evidence
satisfactorily established that Victoria Ong de Ocsio had in truth sold Lot No. 1272 to the Religious of the Virgin Mary in virtue of a deed of
sale dated April 12, 1956 (Exhibit 1), and Lot No. 1273 was a road right of way granted to the City of Iligan. The judgment contained the
following dispositive portion, viz: 6
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48
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PUNO, J.:
Before us is a petition to affirm the Decision of the Regional Trial Court, Branch 27, Sta. Cruz, Laguna, which was reversed by the
respondent Court of Appeals in its Decision 1 dated June 20, 1996 in C.A.-G.R. CV No. 45466. Petitioners' Motion for Reconsideration was
denied by respondent court on November 15, 1996. 2
The facts show that on June 26, 1969, former President Ferdinand E. Marcos issued Proclamation No. 573 3 withdrawing from sale and
settlement and setting aside as permanent forest reserves, subject to private rights, certain parcels of the public domain denominated as
follows:
Parcel No. 1. Magat River Forest Reserve
Parcel No. 2 Chico River Forest Reserve
Parcel No. 3 Abulug River Forest Reserve
Parcel No. 4 Penaranda River Forest Reserve
Parcel No. 5 Angat River-Bustos Dam Forest Reserve
Parcel No. 6 Ambayawan River Forest Reserve
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56
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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
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Even if we simply assume that the market value of the Property is half of the market value fixed by the Municipal Assessors Office
of Paraaque for lands along Roxas Boulevard, or P3,000.00 per square meter, the Government now stands to lose approximately
P2,841,193,800.00. But an even better assumption would be that the value of the Property is P4,500.00 per square meter, as per
the AACI appraisal report dated 26 March 1996, since this is the valuation used to justify the issuance of P4 billion worth of shares
of stock of Centennial City Inc. (CCI) in exchange for 4,800,000 AMARI shares with a total par value of only P480,000,000.00. With
such valuation, the Governments loss will amount to P5,208,855,300.00.
Clearly, the purchase price agreed to by PEA is way below the actual value of the Property, thereby subjecting the Government
to grave injury and enabling AMARI to enjoy tremendous benefit and advantage. (Emphasis supplied)
The Senate Committee Report No. 560 attached the following official documents from the Bureau of Internal Revenue, the Municipal
Assessor of Paraaque, Metro Manila, and the Commission on Audit:
1. Annex "M," Certified True Copy of BIR Zonal Valuations as certified by Antonio F. Montemayor, Revenue District Officer. This
official document fixed the market value of the 157.84 hectares at P7,800 per square meter.
2. Annex "N," Certification of Soledad S. Medina-Cue, Municipal Assessor, Paraaque, dated 10 December 1996. This official
document fixed the market value at P6,000 per square meter.
3. Exhibit "1-Engr. Santiago," the Appraisal Report of the Commission on Audit. This official document fixed the market value at
P21,333.07 per square meter.
Whether based on the official appraisal of the BIR, the Municipal Assessor or the Commission on Audit, the P1,200 per square meter
purchase price, or a total of P1.894 billion for the 157.84 hectares of government lands, is grossly and unconscionably undervalued. The
authoritative appraisal, of course, is that of the Commission on Audit which valued the 157.84 hectares at P21,333.07 per square meter or a
total of P33.673 billion. Thus, based on the official appraisal of the Commission on Audit, the independent constitutional body that
safeguards government assets, the actual loss to the Filipino people is a shocking P31.779 billion.
This gargantuan monetary anomaly, aptly earning the epithet "Grandmother of All Scams," 4 is not the major defect of this government
contract. The major flaw is not even the P1.754 billion in commissions the Senate Committees discovered the private entity paid to various
persons to secure the contract,5 described in Senate Report No. 560 as follows:
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in behalf of AMARI, on
the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun Siong (a.k.a. Frank
Chua), on the other, sets forth various payments AMARI paid or agreed to pay the aforesaid stockholders by way of fees for
"professional efforts and services in successfully negotiating and securing for AMARI the Joint Venture Agreement", as follows:
Form of Payment
Paid/Payable On
Amount
Managers Checks
28 April 1995
P 400,000,000.00
Managers Checks
262,500,000.00
127,000,000.00
24 PDCs
31 Aug. 95 to 31 Jan. 98
150,000,000.00
48 PDCs
357,363,050.00
68
not exceeding
157,844,100.00
Costing
300,000,000.00
TOTAL
P1,754,707,150.00
==============
Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was approved by the AMARI
Board.6 (Emphasis supplied)
The private entity that purchased the reclaimed lands for P1.894 billion expressly admitted before the Senate Committees that it spent
P1.754 billion in commissions to pay various individuals for "professional efforts and services in successfully negotiating and securing" the
contract. By any legal or moral yardstick, the P1.754 billion in commissions obviously constitutes bribe money. Nonetheless, there are
those who insist that the billions in investments of the private entity deserve protection by this Court. Should this Court establish a new
doctrine by elevating grease money to the status of legitimate investments deserving of protection by the law? Should this Court reward
the patently illegal and grossly unethical business practice of the private entity in securing the contract? Should we allow those with hands
dripping with dirty money equitable relief from this Court?
Despite these revolting anomalies unearthed by the Senate Committees, the fatal flaw of this contract is that it glaringly violates provisions
of the Constitution expressly prohibiting the alienation of lands of the public domain.
Thus, we now come to the resolution of the second Motions for Reconsideration 7 filed by public respondent Public Estates Authority
("PEA") and private respondent Amari Coastal Bay Development Corporation ("Amari"). As correctly pointed out by petitioner Francisco I.
Chavez in his Consolidated Comment,8 the second Motions for Reconsideration raise no new issues.
However, the Supplement to "Separate Opinion, Concurring and Dissenting" of Justice Josue N. Bellosillo brings to the Courts attention the
Resolutions of this Court on 3 February 1965 and 24 June 1966 in L- 21870 entitled "Manuel O. Ponce, et al. v. Hon. Amador Gomez, et al."
and No. L-22669 entitled "Manuel O. Ponce, et al. v. The City of Cebu, et al." ("Ponce Cases"). In effect, the Supplement to the Dissenting
Opinion claims that these two Resolutions serve as authority that a single private corporation like Amari may acquire hundreds of
hectares of submerged lands, as well as reclaimed submerged lands, within Manila Bay under the Amended Joint Venture Agreement
("Amended JVA").
We find the cited Ponce Cases inapplicable to the instant case.
First, as Justice Bellosillo himself states in his supplement to his dissent, the Ponce Cases admit that "submerged lands still belong to the
National Government."9 The correct formulation, however, is that submerged lands are owned by the State and are inalienable. Section 2,
Article XII of the 1987 Constitution provides:
All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x. (Emphasis supplied)
Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources. Submerged lands are
property of public dominion, absolutely inalienable and outside the commerce of man.10 This is also true with respect to foreshore lands.
Any sale of submerged or foreshore lands is void being contrary to the Constitution. 11
This is why the Cebu City ordinance merely granted Essel, Inc. an "irrevocable option" to purchase the foreshore lands after the reclamation
and did not actually sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the Ponce Cases the option to purchase referred to
reclaimed lands, and not to foreshore lands which are inalienable. Reclaimed lands are no longer foreshore or submerged lands, and thus
may qualify as alienable agricultural lands of the public domain provided the requirements of public land laws are met.
In the instant case, the bulk of the lands subject of the Amended JVA are still submerged lands even to this very day, and therefore
inalienable and outside the commerce of man. Of the 750 hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area
are still submerged, permanently under the waters of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the submerged
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See "The Grandmother of All Scams" by Sheila S. Coronel and Ellen Tordesillas, 18-20 March 1998, Philippine Center for
Investigative Journalism. This report won the 1st Prize in the 1998 JVO Investigative Journalism Awards.
2
PEAs Memorandum dated 4 August 1999 quoted extensively, in its Statement of Facts and the Case, the Statement of Facts in
Senate Committee Report No. 560 dated 16 September 1997. Moreover, the existence of this report is a matter of judicial notice
pursuant to Section 1, Rule 129 of the Rules of Court which provides, "A court shall take judicial notice, without the introduction
of evidence, of x x x the official acts of the legislature."
4
A more detailed discussion on this matter in Senate Report No. 560 reads as follows:
The Commissions
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta and Emmanuel Sy for and in behalf of
AMARI, on the one hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun
Siong (a.k.a. Frank Chua), on the other, sets forth various payments AMARI paid or agreed to pay the aforesaid
stockholders by way of fees for "professional efforts and services in successfully negotiating and securing for AMARI the
Joint Venture Agreement", as follows:
Form of Payment
Paid/Payable On
Amount
Managers Checks
28 April 1995
P 400,000,000.00
Managers Checks
262,500,000.00
127,000,000.00
24 PDCs
31 Aug. 95 to 31 Jan. 98
150,000,000.00
48 PDCs
357,363,050.00
Cash bonus
not exceeding
157,844,100.00
Costing
Phase
300,000,000.00
TOTAL
P1,754,707,150.00
==============
Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said Letter-Agreement was approved by the
AMARI Board.
On the first payment of P400 million, records show that P300 million was paid in managers checks of Citibank-Makati,
while the balance of P100 million was deposited to the account of the two Chinese in a Hongkong bank. On the basis of a
Memorandum Order dated April 28, 1995 issued by Messrs. Karnasuta and Emmanuel Sy, and upon the instruction of
Messrs. Chin San Cordova and Chua Hun Siong, 31 managers checks in the total amount of P300 million were issued by
Citibank-Makati in favor of a Mr. George Trivio, a Dominican Republic national, broken down as follows:
1) Twenty-nine (29) managers checks at P10 million each;
72
AMOUNT
P 6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
March 31,1997
6,250,000
6,250,000
6,250,000
6,250,000
73
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
6,250,000
Total
P150,000,000
==========
"3.3 Forty Eight (48) checks in the total amount of Three Hundred Fifty Seven Million Three Hundred
Sixty Three Thousand Fifty Pesos (Pesos 357,363,050) payable over a period of twelve (12) months as
follows:
"Each monthly payment to consist of Four (4) checks, three (3) checks of which shall each bear the
amount of P7,250,000 and one (1) check of which shall bear the amount of P8,000,000 for a total
monthly amount of P29,750,000. These monthly payment of four (4) checks each shall be dated the
last date of the thirteen, fourteen, fifteen, sixteen, seventeen, eighteen, nineteen, twenty, twentyone, twenty-two, twenty-three, and twenty-four months from the date of this letter agreement. The
last issued check hereunder shall bear the sum of P8,363,050."
The Provisional Receipt shows that Mr. Chin San Cordova and Mr. Chua Hun Siong received the amount of
P896,863,050.00 as of 09 June 1995. Based on the submitted photocopies of the returned checks issued by AMARI vis-avis item 3(b) of the quoted Letter-Agreement, the following persons were made payees: Emmanuel Sy, Manuel Sy, Sy Pio
Lato, International Merchandising and Development Corporation, Golden Star Industrial Corporation, Chin San Cordova,
EY, and Wee Te Lato. Other payments were made payable to Cash (bearer instruments). Each person was thus named
payee to the following amounts:
1. Emmanuel Sy:
Citibank Check No. 000019 dated 10/31/96
P 6,250,000
2. Manuel Sy:
Citibank Check No. 000007 dated 8/8/95
12,700,000
3. Sy Pio Lato:
Citibank Check No. 000008 dated 8/8/95
12,700,000
12,700,000
12,700,000
6,250,000
6,250,000
6,250,000
6,250,000
7,250,000
6,250,000
7,250,000
74
7,250,000
7. EY:
Citibank Check No. 000047 dated 10/31/96
7,250,000
7,250,000
8. Wee Te Lato:
Citibank Check No. 000048 dated 10/31/96
7,250,000
12,700,000
12,700,000
12,700,000
12,700,000
12,700,000
12,700,000
6,250,000
6,250,000
7,250,000
7,250,000
8,000,000
7,250,000
7,250,000
8,000,000
6,250,000
On the other hand, Ms. Aurora Montano, a cousin of Mr. Justiniano Montano IV, was asked by a Mr. Ben Cuevo if she
knew anybody from PEA, and she answered: "Yes, I know Mr. Justiniano Montano IV." For this answer, and for
introducing the AMARI representative to Mr. Montano, she received P10 million in cash and P20 million in postdated
managers checks in the office of Mr. Benito Co and in the presence of, aside from Mr. Benito Co, Mr. Ben Cuevo and Mr.
Frank Chua. Ms. Montano, however, insisted that she actually received only P10 million.
Ms. Montano furthermore admitted that, through Mr. Ben Cuevo, she met Messrs. Chin San Cordova and Chua Hun
Siong in 1994 for this transaction.
In Executive Session, Mr. Ben Cuevo admitted to having encashed two checks at Pilipinas Bank, worth P12.5 million.
According to him, the two checks form part of the P150 million worth of post-dated checks (PDCs), with a face value of
P6.25 million per check, described in the Letter-Agreement. Of this P150 million, Mr. Cuevo actually received five (5)
PDCs worth P31 million, but he was only able to encash 2 checks at P12.5 million.
Still in Executive Session, Mr. Ben Cuevo also admitted receiving a check worth P6.25 million payable to his company,
International Merchandising and Development Corporation. This was deposited in his Current Account No. 604010562-A,
and the amount was transferred by credit memo to Mr. Montano IVs account at Pilipinas Bank.
Mr. Montano IV admitted that he has an account with Pilipinas Bank, but invoked his constitutional right against selfincrimination when asked if he received the amount of P6.25 million transferred to his account. The Pilipinas Bank Credit
Advice dated May 6, 1996, marked as Exhibit 1-Montano IV, indicating the transfer of the amount of P6.25 million was
presented by Senator Drilon. Once or twice, a certain Ms. Polly Tragico accompanied Mr. Montano IV to withdraw funds
from Pilipinas Bank-Pavilion.
75
Both filed on 26 May 2003. On 6 June 2003 Amari filed a Supplement to its second Motion for Reconsideration.
Decision dated 17 January 1964 of Judge Amador E. Gomez. Also quoted in Justice Josue N. Bellosillos Supplement to Separate
Opinion, Concurring and Dissenting.
10
11
12
13
14
15
16
Ibid.
17
SECTION 79. Destruction or sale of unserviceable property. When government property has become unserviceable for any
cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the
agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsalable, it
may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the
supervision of the proper committee on awards or similar body in the presence of the auditor concerned or other duly authorized
representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive
days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the
public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.
18
SECTION 379. Property Disposal. When property of any local government unit has become unserviceable for any cause or is
no longer needed, it shall upon application of the officer accountable therefor, be inspected and appraised by the provincial, city
or municipal auditor, as the case may be, or his duly authorized representative or that of the Commission on Audit and, if found
valueless or unusable, shall be destroyed in the presence of the inspecting officer.
If found valuable, the same shall be sold at public auction to the highest bidder under the supervision of the committee on awards
and in the presence of the provincial, city or municipal auditor or his duly authorized representative. Notice of the public auction
shall be posted in at least three (3) publicly accessible and conspicuous places, and if the acquisition cost exceeds One hundred
thousand pesos (P100,000.00) in the case of provinces and cities, and Fifty thousand pesos (P50,000.00) in the case of
municipalities, notice of auction shall be published at least two (2) times within a reasonable period in a newspaper of general
circulation in the locality.
19
Under Section 380 of the 1991 Local Government Code, local governments can sell real property through negotiated sale only
with the approval of the Commission on Audit. Under paragraph 2 (a) of COA Circular No. 89-296, on "Sale Thru Negotiation," a
negotiated sale may be resorted to only if "[T]here was a failure of public auction." The Commission on Audit enforces the express
requirement in Section 79 of the Government Auditing Code that a negotiated sale is possible only after there is a failure of public
auction.
20
21
Laurel v. Garcia, G.R. No. 92013, 25 July 1990, 187 SCRA 797.
76
July 9, 2002
77
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79
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81
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84
85
86
87
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95
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Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of the public
domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is expropriated or taken by eminent domain,
the National Government, province, city or municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely by an adequate description, the particular
property or interest expropriated, the number of the certificate of title, and the nature of the public use. A memorandum of the right or
interest taken shall be made on each certificate of title by the Register of Deeds, and where the fee simple is taken, a new certificate shall
be issued in favor of the National Government, province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or issuance of a new certificate of title shall be for the
account of the authority taking the land or interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial lands. Lands of the public
domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be reclaimed from
submerged areas of Manila Bay. In the words of AMARI, the Amended JVA "is not a sale but a joint venture with a stipulation for
reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its
1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended JVA requires
PEA to "cause the issuance and delivery of the certificates of title conveying AMARI's Land Share in the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private corporations "shall not hold such
alienable lands of the public domain except by lease." The transfer of title and ownership to AMARI clearly means that AMARI will "hold"
the reclaimed lands other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a transaction
considered a sale or alienation under CA No. 141,108 the Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of the public domain and are
inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable, unless
converted pursuant to law into alienable or disposable lands of the public domain. Historically, lands reclaimed by the government are sui
103
May 6, 2003
104
105
106
107
108
109