G.R. No. 167707 October 8, 2008
1801 and its
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, THE REGIONAL EXECUTIVE DIRECTOR,
DENR-REGION VI, REGIONAL TECHNICAL DIRECTOR FOR LANDS,
LANDS MANAGEMENT BUREAU, REGION VI PROVINCIAL
ENVIRONMENT AND NATURAL RESOURCES OFFICER OF KALIBO,
AKLAN, REGISTER OF DEEDS, DIRECTOR OF LAND REGISTRATION
AUTHORITY, DEPARTMENT OF TOURISM SECRETARY, DIRECTOR OF
PHILIPPINE TOURISM AUTHORITY, petitioners,
vs.
MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD, and
ANICETO YAP, in their behalf and in behalf of all those similarly situated,
respondents.
x--------------------------------------------------x
G.R. No. G.R. No. 173775 October 8, 2008
DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE
LANDOWNERS OF BORACAY SIMILARLY SITUATED NAMED IN A LIST,
ANNEX "A" OF THIS PETITION, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, THE REGIONAL TECHNICAL DIRECTOR FOR
LANDS, LANDS MANAGEMENT BUREAU, REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL RESOURCES OFFICER, KALIBO,
AKLAN, respondents.
DECISION
REYES, R.T., J.:
AT stake in these consolidated cases is the right of the present occupants of
Boracay Island to secure titles over their occupied lands.
There are two consolidated petitions. The first is G.R. No. 167707, a petition
for review on certiorari of the Decision1 of the Court of Appeals (CA)
affirming that2 of the Regional Trial Court (RTC) in Kalibo, Aklan, which
granted the petition for declaratory relief filed by respondents-claimants
Mayor Jose Yap, et al. and ordered the survey of Boracay for titling purposes.
The second is G.R. No. 173775, a petition for prohibition, mandamus, and
nullification of Proclamation No. 10645">[3] issued by President Gloria
Macapagal-Arroyo classifying Boracay into reserved forest and agricultural
land.
The Antecedents
G.R. No. 167707
Boracay Island in the Municipality of Malay, Aklan, with its powdery white
sand beaches and warm crystalline waters, is reputedly a premier Philippine
tourist destination. The island is also home to 12,003 inhabitants4 who live
in the bone-shaped island’s three barangays.5
On April 14, 1976, the Department of Environment and Natural Resources
(DENR) approved the National Reservation Survey of Boracay
Island,6 which identified several lots as being occupied or claimed by named
persons.7
On November 10, 1978, then President Ferdinand Marcos issued
Proclamation No. 18018 declaring Boracay Island, among other islands,
caves and peninsulas in the Philippines, as tourist zones and marine reserves
under the administration of the Philippine Tourism Authority (PTA).
President Marcos later approved the issuance of PTA Circular 3-829 dated
September 3, 1982, to implement Proclamation No. 1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded
them from filing an application for judicial confirmation of imperfect title or
survey of land for titling purposes, respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap
filed a petition for declaratory relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No. 1801
and PTA Circular No. 3-82 raised doubts on their right to secure titles over
their occupied lands. They declared that they themselves, or through their
predecessors-in-interest, had been in open, continuous, exclusive, and
notorious possession and occupation in Boracay since June 12, 1945, or
earlier since time immemorial. They declared their lands for tax purposes
and paid realty taxes on them.10
Respondents-claimants posited that Proclamation No.
implementing Circular did not place Boracay beyond the commerce of man.
Since the Island was classified as a tourist zone, it was susceptible of private
ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141,
otherwise known as the Public Land Act, they had the right to have the lots
registered in their names through judicial confirmation of imperfect titles.
The Republic, through the Office of the Solicitor General (OSG), opposed the
petition for declaratory relief. The OSG countered that Boracay Island was an
unclassified land of the public domain. It formed part of the mass of lands
classified as "public forest," which was not available for disposition pursuant
to Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry
Code,11 as amended.
The OSG maintained that respondents-claimants’ reliance on PD No. 1801
and PTA Circular No. 3-82 was misplaced. Their right to judicial
confirmation of title was governed by CA No. 141 and PD No. 705. Since
Boracay Island had not been classified as alienable and disposable, whatever
possession they had cannot ripen into ownership.
During pre-trial, respondents-claimants and the OSG stipulated on the
following facts: (1) respondents-claimants were presently in possession of
parcels of land in Boracay Island; (2) these parcels of land were planted with
coconut trees and other natural growing trees; (3) the coconut trees had
heights of more or less twenty (20) meters and were planted more or less fifty
(50) years ago; and (4) respondents-claimants declared the land they were
occupying for tax purposes.12
The parties also agreed that the principal issue for resolution was purely
legal: whether Proclamation No. 1801 posed any legal hindrance or
impediment to the titling of the lands in Boracay. They decided to forego with
the trial and to submit the case for resolution upon submission of their
respective memoranda.13
The RTC took judicial notice14 that certain parcels of land in Boracay Island,
more particularly Lots 1 and 30, Plan PSU-5344, were covered by Original
Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S.
Tirol. These lots were involved in Civil Case Nos. 5222 and 5262 filed before
the RTC of Kalibo, Aklan.15 The titles were issued on
August 7, 1933.16
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-
claimants, with a fallo reading:
WHEREFORE, in view of the foregoing, the Court declares that Proclamation
No. 1801 and PTA Circular No. 3-82 pose no legal obstacle to the petitioners
and those similarly situated to acquire title to their lands in Boracay, in
accordance with the applicable laws and in the manner prescribed therein;
and to have their lands surveyed and approved by respondent Regional
Technical Director of Lands as the approved survey does not in itself
constitute a title to the land.
SO ORDERED.17
The RTC upheld respondents-claimants’ right to have their occupied lands
titled in their name. It ruled that neither Proclamation No. 1801 nor PTA
Circular No. 3-82 mentioned that lands in Boracay were inalienable or could
not be the subject of disposition.18 The Circular itself recognized private
ownership of lands.19 The trial court cited Sections 8720 and 5321 of the
Public Land Act as basis for acknowledging private ownership of lands in
Boracay and that only those forested areas in public lands were declared as
part of the forest reserve.22
The OSG moved for reconsideration but its motion was denied.23 The
Republic then appealed to the CA.
On December 9, 2004, the appellate court affirmed in toto the RTC decision,
disposing as follows:
WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered by us DENYING the appeal filed in this case and AFFIRMING the
decision of the lower court.24
The CA held that respondents-claimants could not be prejudiced by a
declaration that the lands they occupied since time immemorial were part of
a forest reserve.
Again, the OSG sought reconsideration but it was similarly denied.25 Hence,
the present petition under Rule 45.
Page 1 of 36

G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria
Macapagal-Arroyo issued Proclamation No. 106426 classifying Boracay
Island into four hundred (400) hectares of reserved forest land (protection
purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of
agricultural land (alienable and disposable). The Proclamation likewise
provided for a fifteen-meter buffer zone on each side of the centerline of
roads and trails, reserved for right-of-way and which shall form part of the
area reserved for forest land protection purposes.
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,27 Wilfredo
Gelito,28 and other landowners29 in Boracay filed with this Court an original
petition for prohibition, mandamus, and nullification of Proclamation No.
1064.30 They allege that the Proclamation infringed on their "prior vested
rights" over portions of Boracay. They have been in continued possession of
their respective lots in Boracay since time immemorial. They have also
invested billions of pesos in developing their lands and building
internationally renowned first class resorts on their lots.31
Petitioners-claimants contended that there is no need for a proclamation
reclassifying Boracay into agricultural land. Being classified as neither
mineral nor timber land, the island is deemed agricultural pursuant to the
Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act.
32 Thus, their possession in the concept of owner for the required period
entitled them to judicial confirmation of imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not have
a vested right over their occupied portions in the island. Boracay is an
unclassified public forest land pursuant to Section 3(a) of PD No. 705. Being
public forest, the claimed portions of the island are inalienable and cannot be
the subject of judicial confirmation of imperfect title. It is only the executive
department, not the courts, which has authority to reclassify lands of the
public domain into alienable and disposable lands. There is a need for a
positive government act in order to release the lots for disposition.
On November 21, 2006, this Court ordered the consolidation of the two
petitions as they principally involve the same issues on the land classification
of Boracay Island.33
Issues
G.R. No. 167707
The OSG raises the lone issue of whether Proclamation No. 1801 and PTA
Circular No. 3-82 pose any legal obstacle for respondents, and all those
similarly situated, to acquire title to their occupied lands in Boracay Island.
34
G.R. No. 173775
Petitioners-claimants hoist five (5) issues, namely:
I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN
CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY,
SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR
TO THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON
NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM PUBLIC
AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON JUDICIAL
CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS
DEFINED BY SEC. 3a, PD 705?
II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF
PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS OF
BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED
YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE?
III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE
AND DISPOSABLE UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-
REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE
TORRENS SYSTEM?
IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006,
VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP
OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY
THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS
PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA
6657.
V.
CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE
SURVEY AND TO APPROVE THE SURVEY PLANS FOR PURPOSES OF
THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN
BORACAY?35 (Underscoring supplied)
In capsule, the main issue is whether private claimants (respondents-
claimants in G.R. No. 167707 and petitioners-claimants in G.R. No. 173775)
have a right to secure titles over their occupied portions in Boracay. The twin
petitions pertain to their right, if any, to judicial confirmation of imperfect
title under CA No. 141, as amended. They do not involve their right to secure
title under other pertinent laws.
Our Ruling
Regalian Doctrine and power of the executive
to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for
judicial confirmation of imperfect title, namely: (a) Philippine Bill of 190236
in relation to Act No. 926, later amended and/or superseded by Act No. 2874
and CA No. 141;37 (b) Proclamation No. 180138 issued by then President
Marcos; and (c) Proclamation No. 106439 issued by President Gloria
Macapagal-Arroyo. We shall proceed to determine their rights to apply for
judicial confirmation of imperfect title under these laws and executive acts.
But first, a peek at the Regalian principle and the power of the executive to
reclassify lands of the public domain.
The 1935 Constitution classified lands of the public domain into agricultural,
forest or timber.40 Meanwhile, the 1973 Constitution provided the following
divisions: agricultural, industrial or commercial, residential, resettlement,
mineral, timber or forest and grazing lands, and such other classes as may be
provided by law,41 giving the government great leeway for classification.42
Then the 1987 Constitution reverted to the 1935 Constitution classification
with one addition: national parks.43 Of these, only agricultural lands may be
alienated.44 Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island
had never been expressly and administratively classified under any of these
grand divisions. Boracay was an unclassified land of the public domain.
The Regalian Doctrine dictates that all lands of the public domain belong to
the State, that the State is the source of any asserted right to ownership of
land and charged with the conservation of such patrimony.45 The doctrine
has been consistently adopted under the 1935, 1973, and 1987 Constitutions.
46
All lands not otherwise appearing to be clearly within private ownership are
presumed to belong to the State.47 Thus, all lands that have not been
acquired from the government, either by purchase or by grant, belong to the
State as part of the inalienable public domain.48 Necessarily, it is up to the
State to determine if lands of the public domain will be disposed of for
private ownership. The government, as the agent of the state, is possessed of
the plenary power as the persona in law to determine who shall be the
favored recipients of public lands, as well as under what terms they may be
granted such privilege, not excluding the placing of obstacles in the way of
their exercise of what otherwise would be ordinary acts of ownership.49
Our present land law traces its roots to the Regalian Doctrine. Upon the
Spanish conquest of the Philippines, ownership of all lands, territories and
possessions in the Philippines passed to the Spanish Crown.50 The Regalian
doctrine was first introduced in the Philippines through the Laws of the
Indies and the Royal Cedulas, which laid the foundation that "all lands that
were not acquired from the Government, either by purchase or by grant,
belong to the public domain."51
The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage
Law of 1893. The Spanish Mortgage Law provided for the systematic
registration of titles and deeds as well as possessory claims.52
The Royal Decree of 1894 or the Maura Law53 partly amended the Spanish
Mortgage Law and the Laws of the Indies. It established possessory
information as the method of legalizing possession of vacant Crown land,
under certain conditions which were set forth in said decree.54 Under
Page 2 of 36
Section 393 of the Maura Law, an informacion posesoria or possessory
information title,55 when duly inscribed in the Registry of Property, is
converted into a title of ownership only after the lapse of twenty (20) years of
uninterrupted possession which must be actual, public, and adverse,56 from
the date of its inscription.57 However, possessory information title had to be
perfected one year after the promulgation of the Maura Law, or until April 17,
1895. Otherwise, the lands would revert to the State.58
In sum, private ownership of land under the Spanish regime could only be
founded on royal concessions which took various forms, namely: (1) titulo
real or royal grant; (2) concesion especial or special grant; (3) composicion
con el estado or adjustment title; (4) titulo de compra or title by purchase;
and (5) informacion posesoria or possessory information title.59>
The first law governing the disposition of public lands in the Philippines
under American rule was embodied in the Philippine Bill of 1902.60 By this
law, lands of the public domain in the Philippine Islands were classified into
three (3) grand divisions, to wit: agricultural, mineral, and timber or forest
lands.61 The act provided for, among others, the disposal of mineral lands by
means of absolute grant (freehold system) and by lease (leasehold system).62
It also provided the definition by exclusion of "agricultural public lands."63
Interpreting the meaning of "agricultural lands" under the Philippine Bill of
1902, the Court declared in Mapa v. Insular Government:64
x x x In other words, that the phrase "agricultural land" as used in Act No.
926 means those public lands acquired from Spain which are not timber or
mineral lands. x x x65 (Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act No. 496,
otherwise known as the Land Registration Act. The act established a system
of registration by which recorded title becomes absolute, indefeasible, and
imprescriptible. This is known as the Torrens system.66
Concurrently, on October 7, 1903, the Philippine Commission passed Act No.
926, which was the first Public Land Act. The Act introduced the homestead
system and made provisions for judicial and administrative confirmation of
imperfect titles and for the sale or lease of public lands. It permitted
corporations regardless of the nationality of persons owning the controlling
stock to lease or purchase lands of the public domain.67 Under the Act, open,
continuous, exclusive, and notorious possession and occupation of
agricultural lands for the next ten (10) years preceding July 26, 1904 was
sufficient for judicial confirmation of imperfect title.68
On November 29, 1919, Act No. 926 was superseded by Act No. 2874,
otherwise known as the second Public Land Act. This new, more
comprehensive law limited the exploitation of agricultural lands to Filipinos
and Americans and citizens of other countries which gave Filipinos the same
privileges. For judicial confirmation of title, possession and occupation en
concepto dueño since time immemorial, or since July 26, 1894, was required.
69
After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874
on December 1, 1936. To this day, CA No. 141, as amended, remains as the
existing general law governing the classification and disposition of lands of
the public domain other than timber and mineral lands,70 and privately
owned lands which reverted to the State.71
Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of
possession and occupation of lands of the public domain since time
immemorial or since July 26, 1894. However, this provision was superseded
by Republic Act (RA) No. 1942,72 which provided for a simple thirty-year
prescriptive period for judicial confirmation of imperfect title. The provision
was last amended by PD No. 1073,73 which now provides for possession and
occupation of the land applied for since June 12, 1945, or earlier.74
The issuance of PD No. 89275 on February 16, 1976 discontinued the use of
Spanish titles as evidence in land registration proceedings.76 Under the
decree, all holders of Spanish titles or grants should apply for registration of
their lands under Act No. 496 within six (6) months from the effectivity of the
decree on February 16, 1976. Thereafter, the recording of all unregistered
lands77 shall be governed by Section 194 of the Revised Administrative Code,
as amended by Act No. 3344.
On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529,
known as the Property Registration Decree. It was enacted to codify the
various laws relative to registration of property.78 It governs registration of
lands under the Torrens system as well as unregistered lands, including
chattel mortgages.79
A positive act declaring land as alienable and disposable is required. In
keeping with the presumption of State ownership, the Court has time and
again emphasized that there must be a positive act of the government, such
as an official proclamation,80 declassifying inalienable public land into
disposable land for agricultural or other purposes.81 In fact, Section 8 of CA
No. 141 limits alienable or disposable lands only to those lands which have
been "officially delimited and classified."82
The burden of proof in overcoming the presumption of State ownership of
the lands of the public domain is on the person applying for registration (or
claiming ownership), who must prove that the land subject of the application
is alienable or disposable.83 To overcome this presumption, incontrovertible
evidence must be established that the land subject of the application (or
claim) is alienable or disposable.84 There must still be a positive act
declaring land of the public domain as alienable and disposable. To prove
that the land subject of an application for registration is alienable, the
applicant must establish the existence of a positive act of the government
such as a presidential proclamation or an executive order; an administrative
action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute.85 The applicant may also secure a certification
from the government that the land claimed to have been possessed for the
required number of years is alienable and disposable.86
In the case at bar, no such proclamation, executive order, administrative
action, report, statute, or certification was presented to the Court. The
records are bereft of evidence showing that, prior to 2006, the portions of
Boracay occupied by private claimants were subject of a government
proclamation that the land is alienable and disposable. Absent such well-nigh
incontrovertible evidence, the Court cannot accept the submission that lands
occupied by private claimants were already open to disposition before 2006.
Matters of land classification or reclassification cannot be assumed. They call
for proof.87
Ankron and De Aldecoa did not make the whole of Boracay Island, or
portions of it, agricultural lands. Private claimants posit that Boracay was
already an agricultural land pursuant to the old cases Ankron v. Government
of the Philippine Islands (1919)88 and De Aldecoa v. The Insular
Government (1909).89 These cases were decided under the provisions of the
Philippine Bill of 1902 and Act No. 926. There is a statement in these old
cases that "in the absence of evidence to the contrary, that in each case the
lands are agricultural lands until the contrary is shown."90
Private claimants’ reliance on Ankron and De Aldecoa is misplaced. These
cases did not have the effect of converting the whole of Boracay Island or
portions of it into agricultural lands. It should be stressed that the Philippine
Bill of 1902 and Act No. 926 merely provided the manner through which land
registration courts would classify lands of the public domain. Whether the
land would be classified as timber, mineral, or agricultural depended on
proof presented in each case.
Ankron and De Aldecoa were decided at a time when the President of the
Philippines had no power to classify lands of the public domain into mineral,
timber, and agricultural. At that time, the courts were free to make
corresponding classifications in justiciable cases, or were vested with implicit
power to do so, depending upon the preponderance of the evidence.91 This
was the Court’s ruling in Heirs of the Late Spouses Pedro S. Palanca and
Soterranea Rafols Vda. De Palanca v. Republic,92 in which it stated, through
Justice Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that a particular land need not be
formally released by an act of the Executive before it can be deemed open to
private ownership, citing the cases of Ramos v. Director of Lands and Ankron
v. Government of the Philippine Islands.
xxxx
Petitioner’s reliance upon Ramos v. Director of Lands and Ankron v.
Government is misplaced. These cases were decided under the Philippine Bill
of 1902 and the first Public Land Act No. 926 enacted by the Philippine
Commission on October 7, 1926, under which there was no legal provision
vesting in the Chief Executive or President of the Philippines the power to
classify lands of the public domain into mineral, timber and agricultural so
that the courts then were free to make corresponding classifications in
justiciable cases, or were vested with implicit power to do so, depending upon
the preponderance of the evidence.93
To aid the courts in resolving land registration cases under Act No. 926, it
was then necessary to devise a presumption on land classification. Thus
evolved the dictum in Ankron that "the courts have a right to presume, in the
absence of evidence to the contrary, that in each case the lands are
agricultural lands until the contrary is shown."94
But We cannot unduly expand the presumption in Ankron and De Aldecoa to
an argument that all lands of the public domain had been automatically
reclassified as disposable and alienable agricultural lands. By no stretch of
Page 3 of 36
imagination did the presumption convert all lands of the public domain into
agricultural lands.
If We accept the position of private claimants, the Philippine Bill of 1902 and
Act No. 926 would have automatically made all lands in the Philippines,
except those already classified as timber or mineral land, alienable and
disposable lands. That would take these lands out of State ownership and
worse, would be utterly inconsistent with and totally repugnant to the long-
entrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land
registration cases brought under the provisions of Act No. 926, or more
specifically those cases dealing with judicial and administrative confirmation
of imperfect titles. The presumption applies to an applicant for judicial or
administrative conformation of imperfect title under Act No. 926. It certainly
cannot apply to landowners, such as private claimants or their predecessors-
in-interest, who failed to avail themselves of the benefits of Act No. 926. As to
them, their land remained unclassified and, by virtue of the Regalian
doctrine, continued to be owned by the State.
In any case, the assumption in Ankron and De Aldecoa was not absolute.
Land classification was, in the end, dependent on proof. If there was proof
that the land was better suited for non-agricultural uses, the courts could
adjudge it as a mineral or timber land despite the presumption. In Ankron,
this Court stated:
In the case of Jocson vs. Director of Forestry (supra), the Attorney-General
admitted in effect that whether the particular land in question belongs to one
class or another is a question of fact. The mere fact that a tract of land has
trees upon it or has mineral within it is not of itself sufficient to declare that
one is forestry land and the other, mineral land. There must be some proof of
the extent and present or future value of the forestry and of the minerals.
While, as we have just said, many definitions have been given for
"agriculture," "forestry," and "mineral" lands, and that in each case it is a
question of fact, we think it is safe to say that in order to be forestry or
mineral land the proof must show that it is more valuable for the forestry or
the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act
No. 1148.) It is not sufficient to show that there exists some trees upon the
land or that it bears some mineral. Land may be classified as forestry or
mineral today, and, by reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-versa, by reason of the
rapid growth of timber or the discovery of valuable minerals, lands classified
as agricultural today may be differently classified tomorrow. Each case must
be decided upon the proof in that particular case, having regard for its
present or future value for one or the other purposes. We believe, however,
considering the fact that it is a matter of public knowledge that a majority of
the lands in the Philippine Islands are agricultural lands that the courts have
a right to presume, in the absence of evidence to the contrary, that in each
case the lands are agricultural lands until the contrary is shown. Whatever
the land involved in a particular land registration case is forestry or mineral
land must, therefore, be a matter of proof. Its superior value for one purpose
or the other is a question of fact to be settled by the proof in each particular
case. The fact that the land is a manglar [mangrove swamp] is not sufficient
for the courts to decide whether it is agricultural, forestry, or mineral land. It
may perchance belong to one or the other of said classes of land. The
Government, in the first instance, under the provisions of Act No. 1148, may,
by reservation, decide for itself what portions of public land shall be
considered forestry land, unless private interests have intervened before such
reservation is made. In the latter case, whether the land is agricultural,
forestry, or mineral, is a question of proof. Until private interests have
intervened, the Government, by virtue of the terms of said Act (No. 1148),
may decide for itself what portions of the "public domain" shall be set aside
and reserved as forestry or mineral land. (Ramos vs. Director of Lands, 39
Phil. 175; Jocson vs. Director of Forestry, supra)95 (Emphasis ours)
Since 1919, courts were no longer free to determine the classification of lands
from the facts of each case, except those that have already became private
lands.96 Act No. 2874, promulgated in 1919 and reproduced in Section 6 of
CA No. 141, gave the Executive Department, through the President, the
exclusive prerogative to classify or reclassify public lands into alienable or
disposable, mineral or forest.96-a Since then, courts no longer had the
authority, whether express or implied, to determine the classification of lands
of the public domain.97
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued
their title in 1933,98 did not present a justiciable case for determination by
the land registration court of the property’s land classification. Simply put,
there was no opportunity for the courts then to resolve if the land the Boracay
occupants are now claiming were agricultural lands. When Act No. 926 was
supplanted by Act No. 2874 in 1919, without an application for judicial
confirmation having been filed by private claimants or their predecessors-in-
interest, the courts were no longer authorized to determine the property’s
land classification. Hence, private claimants cannot bank on Act No. 926.
We note that the RTC decision99 in G.R. No. 167707 mentioned Krivenko v.
Register of Deeds of Manila,100 which was decided in 1947 when CA No. 141,
vesting the Executive with the sole power to classify lands of the public
domain was already in effect. Krivenko cited the old cases Mapa v. Insular
Government,101 De Aldecoa v. The Insular Government,102 and Ankron v.
Government of the Philippine Islands.103
Krivenko, however, is not controlling here because it involved a totally
different issue. The pertinent issue in Krivenko was whether residential lots
were included in the general classification of agricultural lands; and if so,
whether an alien could acquire a residential lot. This Court ruled that as an
alien, Krivenko was prohibited by the 1935 Constitution104 from acquiring
agricultural land, which included residential lots. Here, the issue is whether
unclassified lands of the public domain are automatically deemed
agricultural.
Notably, the definition of "agricultural public lands" mentioned in Krivenko
relied on the old cases decided prior to the enactment of Act No. 2874,
including Ankron and De Aldecoa.105 As We have already stated, those cases
cannot apply here, since they were decided when the Executive did not have
the authority to classify lands as agricultural, timber, or mineral.
Private claimants’ continued possession under Act No. 926 does not create a
presumption that the land is alienable. Private claimants also contend that
their continued possession of portions of Boracay Island for the requisite
period of ten (10) years under Act No. 926106 ipso facto converted the island
into private ownership. Hence, they may apply for a title in their name.
A similar argument was squarely rejected by the Court in Collado v. Court of
Appeals.107 Collado, citing the separate opinion of now Chief Justice
Reynato S. Puno in Cruz v. Secretary of Environment and Natural Resources,
107-a ruled:
"Act No. 926, the first Public Land Act, was passed in pursuance of the
provisions of the Philippine Bill of 1902. The law governed the disposition of
lands of the public domain. It prescribed rules and regulations for the
homesteading, selling and leasing of portions of the public domain of the
Philippine Islands, and prescribed the terms and conditions to enable
persons to perfect their titles to public lands in the Islands. It also provided
for the "issuance of patents to certain native settlers upon public lands," for
the establishment of town sites and sale of lots therein, for the completion of
imperfect titles, and for the cancellation or confirmation of Spanish
concessions and grants in the Islands." In short, the Public Land Act operated
on the assumption that title to public lands in the Philippine Islands
remained in the government; and that the government’s title to public land
sprung from the Treaty of Paris and other subsequent treaties between Spain
and the United States. The term "public land" referred to all lands of the
public domain whose title still remained in the government and are thrown
open to private appropriation and settlement, and excluded the patrimonial
property of the government and the friar lands."
Thus, it is plain error for petitioners to argue that under the Philippine Bill of
1902 and Public Land Act No. 926, mere possession by private individuals of
lands creates the legal presumption that the lands are alienable and
disposable.108 (Emphasis Ours)
Except for lands already covered by existing titles, Boracay was an
unclassified land of the public domain prior to Proclamation No. 1064. Such
unclassified lands are considered public forest under PD No. 705. The
DENR109 and the National Mapping and Resource Information Authority110
certify that Boracay Island is an unclassified land of the public domain.
PD No. 705 issued by President Marcos categorized all unclassified lands of
the public domain as public forest. Section 3(a) of PD No. 705 defines a
public forest as "a mass of lands of the public domain which has not been the
subject of the present system of classification for the determination of which
lands are needed for forest purpose and which are not." Applying PD No.
705, all unclassified lands, including those in Boracay Island, are ipso facto
considered public forests. PD No. 705, however, respects titles already
existing prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under PD
No. 705 may seem to be out of touch with the present realities in the island.
Boracay, no doubt, has been partly stripped of its forest cover to pave the way
for commercial developments. As a premier tourist destination for local and
foreign tourists, Boracay appears more of a commercial island resort, rather
than a forest land.
Page 4 of 36
Nevertheless, that the occupants of Boracay have built multi-million peso
beach resorts on the island;111 that the island has already been stripped of its
forest cover; or that the implementation of Proclamation No. 1064 will
destroy the island’s tourism industry, do not negate its character as public
forest.
Forests, in the context of both the Public Land Act and the Constitution112
classifying lands of the public domain into "agricultural, forest or timber,
mineral lands, and national parks," do not necessarily refer to large tracts of
wooded land or expanses covered by dense growths of trees and
underbrushes.113 The discussion in Heirs of Amunategui v. Director of
Forestry114 is particularly instructive:
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.115
(Emphasis supplied)
There is a big difference between "forest" as defined in a dictionary and
"forest or timber land" as a classification of lands of the public domain as
appearing in our statutes. One is descriptive of what appears on the land
while the other is a legal status, a classification for legal purposes.116 At any
rate, the Court is tasked to determine the legal status of Boracay Island, and
not look into its physical layout. Hence, even if its forest cover has been
replaced by beach resorts, restaurants and other commercial establishments,
it has not been automatically converted from public forest to alienable
agricultural land.
Private claimants cannot rely on Proclamation No. 1801 as basis for judicial
confirmation of imperfect title. The proclamation did not convert Boracay
into an agricultural land. However, private claimants argue that
Proclamation No. 1801 issued by then President Marcos in 1978 entitles them
to judicial confirmation of imperfect title. The Proclamation classified
Boracay, among other islands, as a tourist zone. Private claimants assert that,
as a tourist spot, the island is susceptible of private ownership.
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of
Boracay into an agricultural land. There is nothing in the law or the Circular
which made Boracay Island an agricultural land. The reference in Circular
No. 3-82 to "private lands"117 and "areas declared as alienable and
disposable"118 does not by itself classify the entire island as agricultural.
Notably, Circular No. 3-82 makes reference not only to private lands and
areas but also to public forested lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut without prior authority from the
PTA. All forested areas in public lands are declared forest reserves.
(Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely
recognizes that the island can be classified by the Executive department
pursuant to its powers under CA No. 141. In fact, Section 5 of the Circular
recognizes the then Bureau of Forest Development’s authority to declare
areas in the island as alienable and disposable when it provides:
Subsistence farming, in areas declared as alienable and disposable by the
Bureau of Forest Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act needed
to classify Boracay Island as alienable and disposable land. If President
Marcos intended to classify the island as alienable and disposable or forest,
or both, he would have identified the specific limits of each, as President
Arroyo did in Proclamation No. 1064. This was not done in Proclamation No.
1801.
The Whereas clauses of Proclamation No. 1801 also explain the rationale
behind the declaration of Boracay Island, together with other islands, caves
and peninsulas in the Philippines, as a tourist zone and marine reserve to be
administered by the PTA – to ensure the concentrated efforts of the public
and private sectors in the development of the areas’ tourism potential with
due regard for ecological balance in the marine environment. Simply put, the
proclamation is aimed at administering the islands for tourism and ecological
purposes. It does not address the areas’ alienability.119
More importantly, Proclamation No. 1801 covers not only Boracay Island, but
sixty-four (64) other islands, coves, and peninsulas in the Philippines, such
as Fortune and Verde Islands in Batangas, Port Galera in Oriental Mindoro,
Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and
surrounding areas in Palawan, Camiguin Island in Cagayan de Oro, and
Misamis Oriental, to name a few. If the designation of Boracay Island as
tourist zone makes it alienable and disposable by virtue of Proclamation No.
1801, all the other areas mentioned would likewise be declared wide open for
private disposition. That could not have been, and is clearly beyond, the
intent of the proclamation.
It was Proclamation No. 1064 of 2006 which positively declared part of
Boracay as alienable and opened the same to private ownership. Sections 6
and 7 of CA No. 141120 provide that it is only the President, upon the
recommendation of the proper department head, who has the authority to
classify the lands of the public domain into alienable or disposable, timber
and mineral lands.121
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo
merely exercised the authority granted to her to classify lands of the public
domain, presumably subject to existing vested rights. Classification of public
lands is the exclusive prerogative of the Executive Department, through the
Office of the President. Courts have no authority to do so.122 Absent such
classification, the land remains unclassified until released and rendered open
to disposition.123
Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest
land and 628.96 hectares of agricultural land. The Proclamation likewise
provides for a 15-meter buffer zone on each side of the center line of roads
and trails, which are reserved for right of way and which shall form part of
the area reserved for forest land protection purposes.
Contrary to private claimants’ argument, there was nothing invalid or
irregular, much less unconstitutional, about the classification of Boracay
Island made by the President through Proclamation No. 1064. It was within
her authority to make such classification, subject to existing vested rights.
Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform
Law. Private claimants further assert that Proclamation No. 1064 violates the
provision of the Comprehensive Agrarian Reform Law (CARL) or RA No.
6657 barring conversion of public forests into agricultural lands. They claim
that since Boracay is a public forest under PD No. 705, President Arroyo can
no longer convert it into an agricultural land without running afoul of Section
4(a) of RA No. 6657, thus:
SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall
cover, regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands as provided in Proclamation No. 131 and
Executive Order No. 229, including other lands of the public domain suitable
for agriculture.
More specifically, the following lands are covered by the Comprehensive
Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or
suitable for agriculture. No reclassification of forest or mineral lands to
agricultural lands shall be undertaken after the approval of this Act until
Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public
domain.
That Boracay Island was classified as a public forest under PD No. 705 did
not bar the Executive from later converting it into agricultural land. Boracay
Island still remained an unclassified land of the public domain despite PD
No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v.
Republic,124 the Court stated that unclassified lands are public forests.
While it is true that the land classification map does not categorically state
that the islands are public forests, the fact that they were unclassified lands
leads to the same result. In the absence of the classification as mineral or
timber land, the land remains unclassified land until released and rendered
open to disposition.125 (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a "reclassification"
of land. If the land had never been previously classified, as in the case of
Boracay, there can be no prohibited reclassification under the agrarian law.
We agree with the opinion of the Department of Justice126 on this point:
Indeed, the key word to the correct application of the prohibition in Section
4(a) is the word "reclassification." Where there has been no previous
Page 5 of 36
classification of public forest [referring, we repeat, to the mass of the public
domain which has not been the subject of the present system of classification
for purposes of determining which are needed for forest purposes and which
are not] into permanent forest or forest reserves or some other forest uses
under the Revised Forestry Code, there can be no "reclassification of forest
lands" to speak of within the meaning of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the CARL against the
reclassification of forest lands to agricultural lands without a prior law
delimiting the limits of the public domain, does not, and cannot, apply to
those lands of the public domain, denominated as "public forest" under the
Revised Forestry Code, which have not been previously determined, or
classified, as needed for forest purposes in accordance with the provisions of
the Revised Forestry Code.127
Private claimants are not entitled to apply for judicial confirmation of
imperfect title under CA No. 141. Neither do they have vested rights over the
occupied lands under the said law. There are two requisites for judicial
confirmation of imperfect or incomplete title under CA No. 141, namely: (1)
open, continuous, exclusive, and notorious possession and occupation of the
subject land by himself or through his predecessors-in-interest under a bona
fide claim of ownership since time immemorial or from June 12, 1945; and
(2) the classification of the land as alienable and disposable land of the public
domain.128
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No.
1801 did not convert portions of Boracay Island into an agricultural land. The
island remained an unclassified land of the public domain and, applying the
Regalian doctrine, is considered State property.
Private claimants’ bid for judicial confirmation of imperfect title, relying on
the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail
because of the absence of the second element of alienable and disposable
land. Their entitlement to a government grant under our present Public Land
Act presupposes that the land possessed and applied for is already alienable
and disposable. This is clear from the wording of the law itself.129 Where the
land is not alienable and disposable, possession of the land, no matter how
long, cannot confer ownership or possessory rights.130
Neither may private claimants apply for judicial confirmation of imperfect
title under Proclamation No. 1064, with respect to those lands which were
classified as agricultural lands. Private claimants failed to prove the first
element of open, continuous, exclusive, and notorious possession of their
lands in Boracay since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for declaratory
relief that private claimants complied with the requisite period of possession.
The tax declarations in the name of private claimants are insufficient to prove
the first element of possession. We note that the earliest of the tax
declarations in the name of private claimants were issued in 1993. Being of
recent dates, the tax declarations are not sufficient to convince this Court that
the period of possession and occupation commenced on June 12, 1945.
Private claimants insist that they have a vested right in Boracay, having been
in possession of the island for a long time. They have invested millions of
pesos in developing the island into a tourist spot. They say their continued
possession and investments give them a vested right which cannot be
unilaterally rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private claimants
do not automatically give them a vested right in Boracay. Nor do these give
them a right to apply for a title to the land they are presently occupying. This
Court is constitutionally bound to decide cases based on the evidence
presented and the laws applicable. As the law and jurisprudence stand,
private claimants are ineligible to apply for a judicial confirmation of title
over their occupied portions in Boracay even with their continued possession
and considerable investment in the island.
One Last Note
The Court is aware that millions of pesos have been invested for the
development of Boracay Island, making it a by-word in the local and
international tourism industry. The Court also notes that for a number of
years, thousands of people have called the island their home. While the Court
commiserates with private claimants’ plight, We are bound to apply the law
strictly and judiciously. This is the law and it should prevail. Ito ang batas at
ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be eligible
to apply for judicial confirmation of imperfect title under Section 48(b) of CA
No. 141, as amended, this does not denote their automatic ouster from the
residential, commercial, and other areas they possess now classified as
agricultural. Neither will this mean the loss of their substantial investments
on their occupied alienable lands. Lack of title does not necessarily mean lack
of right to possess.
For one thing, those with lawful possession may claim good faith as builders
of improvements. They can take steps to preserve or protect their possession.
For another, they may look into other modes of applying for original
registration of title, such as by homestead131 or sales patent,132 subject to
the conditions imposed by law.
More realistically, Congress may enact a law to entitle private claimants to
acquire title to their occupied lots or to exempt them from certain
requirements under the present land laws. There is one such bill133 now
pending in the House of Representatives. Whether that bill or a similar bill
will become a law is for Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step
necessary to open up the island to private ownership. This gesture may not be
sufficient to appease some sectors which view the classification of the island
partially into a forest reserve as absurd. That the island is no longer overrun
by trees, however, does not becloud the vision to protect its remaining forest
cover and to strike a healthy balance between progress and ecology.
Ecological conservation is as important as economic progress.
To be sure, forest lands are fundamental to our nation’s survival. Their
promotion and protection are not just fancy rhetoric for politicians and
activists. These are needs that become more urgent as destruction of our
environment gets prevalent and difficult to control. As aptly observed by
Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:134
The view this Court takes of the cases at bar is but in adherence to public
policy that should be followed with respect to forest lands. Many have written
much, and many more have spoken, and quite often, about the pressing need
for forest preservation, conservation, protection, development and
reforestation. Not without justification. For, forests constitute a vital segment
of any country's natural resources. It is of common knowledge by now that
absence of the necessary green cover on our lands produces a number of
adverse or ill effects of serious proportions. Without the trees, watersheds dry
up; rivers and lakes which they supply are emptied of their contents. The fish
disappear. Denuded areas become dust bowls. As waterfalls cease to function,
so will hydroelectric plants. With the rains, the fertile topsoil is washed away;
geological erosion results. With erosion come the dreaded floods that wreak
havoc and destruction to property – crops, livestock, houses, and highways –
not to mention precious human lives. Indeed, the foregoing observations
should be written down in a lumberman’s decalogue.135
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court
of Appeals Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of
merit.
SO ORDERED.
—————————
G.R. No. 134209 January 24, 2006
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
CELESTINA NAGUIAT, Respondent.
DECISION
GARCIA, J.:
Before the Court is this petition for review under Rule 45 of the Rules of
Court seeking the reversal of the Decision1 dated May 29, 1998 of the Court
of Appeals (CA) in CA-G.R. CV No. 37001 which affirmed an earlier decision2
of the Regional Trial Court at Iba, Zambales, Branch 69 in Land Registration
Case No. N-25-1.
The decision under review recites the factual backdrop, as follows:
This is an application for registration of title to four (4) parcels of land
located in Panan, Botolan, Zambales, more particularly described in the
amended application filed by Celestina Naguiat on 29 December 1989 with
the Regional Trial Court of Zambales, Branch 69. Applicant [herein
respondent] alleges, inter alia, that she is the owner of the said parcels of
Page 6 of 36
land having acquired them by purchase from the LID Corporation which
likewise acquired the same from Demetria Calderon, Josefina Moraga and
Fausto Monje and their predecessors-in-interest who have been in possession
thereof for more than thirty (30) years; and that to the best of her knowledge,
said lots suffer no mortgage or encumbrance of whatever kind nor is there
any person having any interest, legal or equitable, or in possession thereof.
On 29 June 1990, the Republic of the Philippines [herein petitioner]. . . filed
an opposition to the application on the ground that neither the applicant nor
her predecessors-in interest have been in open, continuous, exclusive and
notorious possession and occupation of the lands in question since 12 June
1945 or prior thereto; that the muniments of title and tax payment receipts of
applicant do not constitute competent and sufficient evidence of a bona-fide
acquisition of the lands applied for or of his open, continuous, exclusive and
notorious possession and occupation thereof in the concept of (an) owner;
that the applicant’s claim of ownership in fee simple on the basis of Spanish
title or grant can no longer be availed of . . .; and that the parcels of land
applied for are part of the public domain belonging to the Republic of the
Philippines not subject to private appropriation.
On 15 October 1990, the lower court issued an order of general default as
against the whole world, with the exception of the Office of the Solicitor
General, and proceeded with the hearing of this registration case.
After she had presented and formally offered her evidence . . . applicant
rested her case. The Solicitor General, thru the Provincial Prosecutor,
interposed no objection to the admission of the exhibits. Later . . . the
Provincial Prosecutor manifest (sic) that the Government had no evidence to
adduce. 3
In a decision4 dated September 30, 1991, the trial court rendered judgment
for herein respondent Celestina Naguiat, adjudicating unto her the parcels of
land in question and decreeing the registration thereof in her name, thus:
WHEREFORE, premises considered, this Court hereby adjudicates the
parcels of land situated in Panan, Botolan, Zambales, appearing on Plan
AP-03-003447 containing an area of 3,131 square meters, appearing on Plan
AP-03-003446 containing an area of 15,322 containing an area of 15,387
square meters to herein applicant Celestina T. Naguiat, of legal age, Filipino
citizen, married to Rommel Naguiat and a resident of Angeles City,
Pampanga together with all the improvements existing thereon and orders
and decrees registration in her name in accordance with Act No. 496,
Commonwealth Act No. 14, [should be 141] as amended, and Presidential
Decree No. 1529. This adjudication, however, is subject to the various
easements/reservations provided for under pertinent laws, presidential
decrees and/or presidential letters of instructions which should be
annotated/ projected on the title to be issued. And once this decision
becomes final, let the corresponding decree of registration be immediately
issued. (Words in bracket added)
With its motion for reconsideration having been denied by the trial court,
petitioner Republic went on appeal to the CA in CA-G.R. CV No. 37001.
As stated at the outset hereof, the CA, in the herein assailed decision of May
29, 1998, affirmed that of the trial court, to wit:
WHEREFORE, premises considered, the decision appealed from is hereby
AFFIRMED.
SO ORDERED.
Hence, the Republic’s present recourse on its basic submission that the CA’s
decision "is not in accordance with law, jurisprudence and the evidence, since
respondent has not established with the required evidence her title in fee
simple or imperfect title in respect of the subject lots which would warrant
their registration under … (P.D. 1529 or Public Land Act (C.A.) 141." In
particular, petitioner Republic faults the appellate court on its finding
respecting the length of respondent’s occupation of the property subject of
her application for registration and for not considering the fact that she has
not established that the lands in question have been declassified from forest
or timber zone to alienable and disposable property.
Public forest lands or forest reserves, unless declassified and released by
positive act of the Government so that they may form part of the disposable
agricultural lands of the public domain, are not capable of private
appropriation.5 As to these assets, the rules on confirmation of imperfect title
do not apply.6 Given this postulate, the principal issue to be addressed turns
on the question of whether or not the areas in question have ceased to have
the status of forest or other inalienable lands of the public domain.
Forests, in the context of both the Public Land Act7 and the Constitution8
classifying lands of the public domain into "agricultural, forest or timber,
mineral lands and national parks," do not necessarily refer to a large tract of
wooded land or an expanse covered by dense growth of trees and
underbrush. As we stated in Heirs of Amunategui 9-
A forested area classified as forest land of the public domain does not lose
such classification simply because loggers or settlers 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. xxx. The
classification is merely descriptive of its legal nature or status and does not
have to be descriptive of what the land actually looks like. xxx
Under Section 2, Article XII of the Constitution,10 which embodies the
Regalian doctrine, all lands of the public domain belong to the State – the
source of any asserted right to ownership of land.11 All lands not appearing to
be clearly of private dominion presumptively belong to the State.12
Accordingly, public lands not shown to have been reclassified or released as
alienable agricultural land or alienated to a private person by the State
remain part of the inalienable public domain.13 Under Section 6 of the Public
Land Act, the prerogative of classifying or reclassifying lands of the public
domain, i.e., from forest or mineral to agricultural and vice versa, belongs to
the Executive Branch of the government and not the court.14 Needless to
stress, the onus to overturn, by incontrovertible evidence, the presumption
that the land subject of an application for registration is alienable or
disposable rests with the applicant.15
In the present case, the CA assumed that the lands in question are already
alienable and disposable. Wrote the appellate court:
The theory of [petitioner] that the properties in question are lands of the
public domain cannot be sustained as it is directly against the above doctrine.
Said doctrine is a reaffirmation of the principle established in the earlier
cases . . . that open, exclusive and undisputed possession of alienable public
land for period prescribed by law creates the legal fiction whereby the land,
upon completion of the requisite period, ipso jure and without the need of
judicial or other sanction, ceases to be public land and becomes private
property …. (Word in bracket and underscoring added.)
The principal reason for the appellate court’s disposition, finding a
registerable title for respondent, is her and her predecessor-in-interest’s
open, continuous and exclusive occupation of the subject property for more
than 30 years. Prescinding from its above assumption and finding, the
appellate court went on to conclude, citing Director of Lands vs. Intermediate
Appellate Court (IAC)16 and Herico vs. DAR,17 among other cases, that,
upon the completion of the requisite period of possession, the lands in
question cease to be public land and become private property.
Director of Lands, Herico and the other cases cited by the CA are not,
however, winning cards for the respondent, for the simple reason that, in said
cases, the disposable and alienable nature of the land sought to be registered
was established, or, at least, not put in issue. And there lies the difference.
Here, respondent never presented the required certification from the proper
government agency or official proclamation reclassifying the land applied for
as alienable and disposable. Matters of land classification or reclassification
cannot be assumed. It calls for proof.18 Aside from tax receipts, respondent
submitted in evidence the survey map and technical descriptions of the lands,
which, needless to state, provided no information respecting the
classification of the property. As the Court has held, however, these
documents are not sufficient to overcome the presumption that the land
sought to be registered forms part of the public domain.19
It cannot be overemphasized that unwarranted appropriation of public lands
has been a notorious practice resorted to in land registration cases.20 For
this reason, the Court has made it a point to stress, when appropriate, that
declassification of forest and mineral lands, as the case may be, and their
conversion into alienable and disposable lands need an express and positive
act from the government.21
The foregoing considered, the issue of whether or not respondent and her
predecessor-in-interest have been in open, exclusive and continuous
possession of the parcels of land in question is now of little moment. For,
unclassified land, as here, cannot be acquired by adverse occupation or
possession; occupation thereof in the concept of owner, however long, cannot
ripen into private ownership and be registered as title.22
WHEREFORE, the instant petition is GRANTED and the assailed decision
dated May 29, 1998 of the Court of Appeals in CA-G.R. CV No. 37001 is
REVERSED and SET ASIDE. Accordingly, respondent’s application for
original registration of title in Land Registration Case No. N-25-1 of the
Regional Trial Court at Iba, Zambales, Branch 69, is DENIED.
Page 7 of 36
No costs.
SO ORDERED.
——————————
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.
Muñoz (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.
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;
Page 8 of 36
"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."
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. Muñoz (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 Bereber’s 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
court’s 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."
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)."
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.
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.
————————————
G.R. No. 100709 November 14, 1997
REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF
LANDS, petitioner,
vs.
COURT OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA CO and
ANTONIO QUILATAN AND THE REGISTER OF DEEDS OF QUEZON
PROVINCE, respondents.
PANGANIBAN, J.:
Will the lease and/or mortgage of a portion of a realty acquired through free
patent constitute sufficient ground for the nullification of such land grant?
Should such property revert to the State once it is invaded by the sea and thus
becomes foreshore land?
The Case
These are the two questions raised in the petition before us assailing the
Court of Appeals' 1 Decision in CA-G.R. CV No. 02667 promulgated on June
13, 1991 which answered the said questions in the negative. 2 Respondent
Court's dismissed 3 petitioner's appeal and affirmed in toto the decision of
the Regional Trial Court4 of Calauag, Quezon, dated December 28, 1983 in
Civil Case No. C-608. In turn, the Regional Trial Court's decision dismissed
petitioner's complaint for cancellation of the Torrens Certificate of Title of
Respondent Morato and for reversion of the parcel of land subject thereof of
the public domain.
The Facts
Page 9 of 36
The petition of the solicitor general, representing the Republic of the
Philippines, recites the following facts: 5
Sometime in December, 1972, respondent Morato filed a Free Patent
Application No. III-3-8186-B on a parcel of land with an area of 1,265 square
meters situated at Pinagtalleran, Calauag, Quezon. On January 16, 1974, the
patent was approved and the Register of Deeds of Quezon at Lucena City
issued on February 4, 1974 Original Certificate of Title No. P-17789. Both the
free paten and the title specifically mandate that the land shall not be
alienated nor encumbered within five years from the date of the issuance of
the patent (Sections 118 and 124 of CA No. 141, as amended).
Subsequently, the District Land Officer in Lucena City, acting upon reports
that respondent Morato had encumbered the land in violation of the
condition of the patent, conducted an investigation. Thereafter, it was
established that the subject land is a portion of the Calauag Bay, five (5) to six
(6) feet deep under water during high tide and two (2) feet deep at low tide,
and not suitable to vegetation. Moreover, on October 24, 1974, a portion of
the land was mortgaged by respondent Morato to respondents Nenita Co and
Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits). The spouses
Quilatan constructed a house on the land. Another portion of the land was
leased to Perfecto Advincula on February 2, 1976 at P100.00 a month, where
a warehouse was constructed.
On November 5, 1978, petitioner filed an amended complaint against
respondents Morato, spouses Nenita Co and Antonio Quilatan, and the
Register of Deeds of Quezon for the cancellation of title and reversion of a
parcel of land to the public domain, subject of a free patent in favor of
respondent Morato, on the grounds that the land is a foreshore land and was
mortgaged and leased within the five-year prohibitory period (p. 46,
Records).
After trial, the lower court, on December 28, 1983, rendered a decision
dismissing petitioner's complaint. In finding for private respondents, the
lower court ruled that there was no violation of the 5-year period ban against
alienating or encumbering the land, because the land was merely leased and
not alienated. It also found that the mortgage to Nenita Co and Antonio
Quilatan covered only the improvement and not the land itself.
On appeal, the Court of Appeals affirmed the decision of the trial court.
Thereafter, the Republic of the Philippines filed the present petition. 6
The Issues
Petitioner alleges that the following errors were committed by Respondent
Court: 7
I thereof will also show that what petitioner was able to prove never
Respondent court erred in holding that the patent granted and certificate of
title issued to Respondent Morato cannot be cancelled and annulled since the
certificate of title becomes indefeasible after one year from the issuance of
the title.
II
Respondent Court erred in holding that the questioned land is part of a
disposable public land and not a foreshore land.
The Court's Ruling
The petition is meritorious.
First Issue: Indefeasibility of a Free Patent Title
In resolving the first issue against petitioner, Respondent Court held: 8
. . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas, 168 SCRA
198. ". . . The rule is well-settled that an original certificate of title issued on
the strength of a homestead patent partakes of the nature of a certificate of
title issued in a judicial proceeding, as long as the land disposed of is really
part of the disposable land of the public domain, and becomes indefeasible
and incontrovertible upon the expiration of one year from the date of
promulgation of the order of the Director of Lands for the issuance of the
patent. (Republic v. Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v. Ramelo,
107 Phil. 498 (1960); Lopez v. Padilla, (G.R. No. L-27559, May 18, 1972, 45
SCRA 44). A homestead patent, one registered under the Land Registration
Act, becomes as indefeasible as a Torrens Title. (Pamintuan v. San Agustin,
43 Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); Duran v.
Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R. No. L-33676, June 30,
1971, 39 SCRA 676). (p. 203).
Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia ni Cristo v.
Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA 516 (1983) and
Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 (1971) held that once a
homestead patent granted in accordance with the Public Land Act is
registered pursuant to Section 122 of Act 496, the certificate of title issued in
virtue of said patent has the force and effect of a Torrens Title issued under
the Land Registration Act.
Indefeasibility of the title, however, may not bar the State, thru the Solicitor
General, from filing an action for reversion, as ruled in Heirs of Gregorio
Tengco v. Heirs of Jose Aliwalas, (supra), as follows:
But, as correctly pointed out by the respondent Court of Appeals, Dr.
Aliwalas' title to the property having become incontrovertible, such may no
longer be collaterally attacked. If indeed there had been any fraud or
misrepresentation in obtaining the title, an action for reversion instituted by
the Solicitor General would be the proper remedy (Sec. 101, C.A. No. 141;
Director of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32;
Lopez v. Padilla, supra). (p. 204).
Petitioner contends that the grant of Free Patent (IV-3) 275 and the
subsequent issuance of Original Certificate of Title No. P-17789 to
Respondent Josefina L. Morato were subject to the conditions provided for in
Commonwealth Act (CA) No. 141. It alleges that on October 24, 1974, or nine
(9) months and eight (8) days after the grant of the patent, mortgaged a
portion of the land" to Respondent Nenita Co, who thereafter constructed a
house thereon. Likewise, on February 2, 1976 and "within the five-year
prohibitory period," Respondent Morato "leased a portion of the land to
Perfecto Advincula at a monthly rent of P100.00 who, shortly thereafter,
constructed a house of concrete materials on the subject land."9 Further,
petitioner argues that the defense of indefeasibility of title is "inaccurate."
The original certificate of title issued to Respondent Morato "contains the
seeds of its own cancellation": such certificate specifically states on its face
that "it is subject to the provisions of Sections 118, 119, 121, 122, 124 of CA
No. 141, as amended." 10
Respondent Morato counters by stating that although a "portion of the land
was previously leased," it resulted "from the fact that Perfecto Advincula built
a warehouse in the subject land without [her] prior consent." The mortgage
executed over the improvement "cannot be considered a violation of the said
grant since it can never affect the ownership." 11 She states further:
. . . . the appeal of the petitioner was dismissed not because of the principle of
indefeasibility of title but mainly due to failure of the latter to support and
prove the alleged violations of respondent Morato. The records of this case
will readily show that although petitioner was able to establish that Morato
committed some acts during the prohibitory period of 5 years, a perusal
constituted a violation of the grant. 12
Respondent-Spouses Quilatan, on the other hand, state that the mortgage
contract they entered into with Respondent Morato "can never be considered
as [an] 'alienation' inasmuch as the ownership over the property remains
with the owner." 13 Besides, it is the director of lands and not the Republic of
the Philippines who is the real party in interest in this case, contrary to the
provision of the Public Land Act which states that actions for reversion
should be instituted by the solicitor general in the name of Republic of the
Philippines. 14
We find for petitioner.
Quoted below are relevant sections of Commonwealth Act No. 141, otherwise
known as the Public Land Act:
Sec. 118. Except in favor of the Government or any of its branches, units or
institutions, or legally constituted banking corporations, lands acquired
under free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of the application
and for a term of five years from and after the date of issuance of the patent
or grant nor shall they become liable to the satisfaction of any debt
contracted prior to the expiration of said period; but the improvements or
crops on the land may be mortgaged or pledged to qualified persons,
associations, or corporations.
No alienation, transfer, or conveyance of any homestead after five years and
before twenty-five years after issuance of title shall be valid without the
approval of the Secretary of Agriculture and Natural Resources, which
approval shall not be denied except on constitutional and legal grounds. (As
amended by Com. Act No. 456, approved June 8, 1939.)
xxx xxx xxx
Page 10 of 36
Sec. 121. Except with the consent of the grantee and the approval of the
Secretary of Agriculture and Natural Resources, and solely for educational,
religious, or charitable purposes or for a right of way, no corporation,
association, or partnership may acquire or have any right, title, interest, or
property right whatsoever to any land granted under the free patent,
homestead, or individual sale provisions of this Act or to any permanent
improvement on such land. (As amended by Com. Act No. 615, approved May
5, 1941)
Sec. 122. No land originally acquired in any manner under the provisions of
this Act, nor any permanent improvement on such land, shall be
encumbered, alienation or transferred, except to persons, corporations,
association, or partnerships who may acquire lands of the public domain
under this Act or to corporations organized in the Philippines authorized
therefore by their charters.
Except in cases of hereditary successions, no land or any portion thereof
originally acquired under the free patent, homestead, or individual sale
provisions of this Act, or any permanent improvement on such land, shall be
transferred or assigned to any individual, nor shall such land or any
permanent improvement thereon be leased to such individual, when the area
of said land, added to that of this own, shall exceed one hundred and forty-
four hectares. Any transfer, assignment, or lease made in violation hereto
shall be null and void. (As amended by Com Act No. 615, Id.).
xxx xxx xxx
Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract
made or executed in violation of any of the provisions of sections one
hundred and eighteen, one hundred and twenty, one hundred and twenty-
one, one hundred and twenty-two, and one hundred and twenty-three of this
Act shall be unlawful and null and void from its execution and shall produce
the effect of annulling and cancelling the grant, title, patent, or permit
originally issued, recognized or confirmed, actually or presumatively, and
cause the reversion of the property and its improvements to the State.
(Emphasis supplied)
The foregoing legal provisions clearly proscribe the encumbrance of a parcel
of land acquired under a free patent or homestead within five years from the
grant of such patent. Furthermore, such encumbrance results in the
cancellation of the grant and the reversion of the land to the public domain.
Encumbrance has been defined as "[a]nything that impairs the use or
transfer of property; anything which constitutes a burden on the title; a
burden or charge upon property; a claim or lien upon property." It may be a
"legal claim on an estate for the discharge of which the estate is liable; and
embarrassment of the estate or property so that it cannot be disposed of
without being subject to it; an estate, interest, or right in lands, diminishing
their value to the general owner; a liability resting upon an estate." 15 Do the
contracts of lease and mortgage executed within five (5) years from the
issuance of the patent constitute an "encumbrance" and violate the terms and
conditions of such patent? Respondent Court answered in the negative: 16
From the evidence adduced by both parties, it has been proved that the area
of the portion of the land, subject matter of the lease contract (Exh. "B")
executed by and between Perfecto Advincula and Josefina L. Morato is only
10 x 12 square meters, where the total area of the land granted to Morato is
1,265 square meters. It is clear from this that the portion of the land leased by
Advincula does not significantly affect Morato's ownership and possession.
Above all, the circumstances under which the lease was executed do not
reflect a voluntary and blatant intent to violate the conditions provided for in
the patent issued in her favor. On the contrary, Morato was compelled to
enter into that contract of lease
out of sympathy and the goodness of her heart to accommodate a fellow man.
...
It is indisputable, however, that Respondent Morato cannot fully use or enjoy
the land during the duration of the lease contract. This restriction on the
enjoyment of her property sufficiently meets the definition of an
encumbrance under Section 118 of the Public Land Act, because such
contract "impairs the use of the property" by the grantee. In a contract of
lease which is consensual, bilateral, onerous and commutative, the owner
temporarily grants the use of his or her property to another who undertakes
to pay rent therefor. 17 During the term of the lease, the grantee of the patent
cannot enjoy the beneficial use of the land leased. As already observed, the
Public Land Act does not permit a grantee of a free patent from encumbering
any portion of such land. Such encumbrance is a ground for the nullification
of the award.
Morato's resort to equity, i.e. that the lease was executed allegedly out of the
goodness of her heart without any intention of violating the law, cannot help
her. Equity, which has been aptly described as "justice outside legality," is
applied only in the absence of, and never against, statutory law or judicial
rules of procedure. Positive rules prevail over all abstract arguments based on
equity contra legem. 18
Respondents failed to justify their position that the mortgage should not be
considered an encumbrance. Indeed, we do not find any support for such
contention. The questioned mortgage falls squarely within the term
"encumbrance" proscribed by Section 118 of the Public Land Act. 19 Verily, a
mortgage constitutes a legal limitation on the estate, and the foreclosure of
such mortgage would necessarily result in the auction of the property. 20
Even if only part of the property has been sold or alienated within the
prohibited period of five years from the issuance of the patent, such
alienation is a sufficient cause for the reversion of the whole estate to the
State. As a condition for the grant of a free patent to an applicant, the law
requires that the land should not be encumbered, sold or alienated within
five years from the issuance of
the patent. The sale or the alienation of part of the homestead violates that
condition. 21
The prohibition against the encumbrance — lease and mortgage included —
of a homestead which, by analogy applies to a free patent, is mandated by the
rationale for the grant, viz.: 22
It is well-known that the homestead laws were designed to distribute
disposable agricultural lots of the State to land-destitute citizens for their
home and cultivation. Pursuant to such benevolent intention the State
prohibits the sale or incumbrance of the homestead (Section 116) within five
years after the grant of the patent. After that five-year period the law
impliedly permits alienation of the homestead; but in line with the
primordial purpose to favor the homesteader and his family the statute
provides that such alienation or conveyance (Section 117) shall be subject to
the right of repurchase by the homesteader, his widow or heirs within five
years. This section 117 is undoubtedly a complement of section 116. It aims to
preserve and keep in the family of the homesteader that portion of public
land which the State had gratuitously given to him. It would, therefore, be in
keeping with this fundamental idea to hold, as we hold, that the right to
repurchase exists not only when the original homesteader makes the
conveyance, but also when it is made by his widow or heirs. This construction
is clearly deducible from the terms of the statute.
By express provision of Section 118 of Commonwealth Act 141 and in
conformity with the policy of the law, any transfer or alienation of a free
patent or homestead within five years from the issuance of the patent is
proscribed. Such transfer nullifies said alienation and constitutes a cause for
the reversion of the property to the State.
The prohibition against any alienation or encumbrance of the land grant is a
proviso attached to the approval of every application. 23 Prior to the
fulfillment of the requirements of law, Respondent Morato had only an
inchoate right to the property; such property remained part of the public
domain and, therefore, not susceptible to alienation or encumbrance.
Conversely, when a "homesteader has complied with all the terms and
conditions which entitled him to a patent for [a] particular tract of public
land, he acquires a vested interest therein and has to be regarded an
equitable owner thereof." 24 However, for Respondent Morato's title of
ownership over the patented land to be perfected, she should have complied
with the requirements of the law, one of which was to keep the property for
herself and her family within the prescribed period of five (5) years. Prior to
the fulfillment of all requirements of the law, Respondent Morato's title over
the property was incomplete. Accordingly, if the requirements are not
complied with, the State as the grantor could petition for the annulment of
the patent and the cancellation of the title.
Respondent Morato cannot use the doctrine of the indefeasibility of her
Torrens title to bar the state from questioning its transfer or encumbrance.
The certificate of title issued to her clearly stipulated that its award was
"subject to the conditions provided for in Sections 118, 119, 121, 122 and 124
of Commonwealth Act (CA) No. 141." Because she violated Section 118, the
reversion of the property to the public domain necessarily follows, pursuant
to Section 124.
Second Issue: Foreshore Land
Revert to the Public Domain
There is yet another reason for granting this petition.
Although Respondent Court found that the subject land was foreshore land, it
nevertheless sustained the award thereof to Respondent Morato: 25
First of all, the issue here is whether the land in question, is really part of the
foreshore lands. The Supreme Court defines foreshore land in the case of
Republic vs. Alagad, 169 SCRA 455, 464, as follows:
Page 11 of 36

Otherwise, where the rise in water level is due to, the "extraordinary" action
of nature, rainful, for instance, the portions inundated thereby are not
considered part of the bed or basin of the body of water in question. It cannot
therefore be said to be foreshore land but land outside of the public
dominion, and land capable of registration as private property.
A foreshore land, on the other hand has been defined as follows:
. . . that part of (the land) which is between high
and low water and left dry by the flux and reflux of the tides . . . . (Republic
vs. C.A., Nos. L-43105, L-43190, August 31, 1984, 131 SCRA 532; Government
vs. Colegio de San Jose, 53 Phil 423)
The strip of land that lies between the high and low water marks and that is
alternatively wet and dry according to the flow of the tide. (Rep. vs. CA,
supra, 539).
The factual findings of the lower court regarding the nature of the parcel of
land in question reads:
Evidence disclose that the marginal area of the land radically changed
sometime in 1937 up to 1955 due to a strong earthquake followed by frequent
storms eventually eroding the land. From 1955 to 1968, however, gradual
reclamation was undertaken by the lumber company owned by the Moratos.
Having thus restored the land thru mostly human hands employed by the
lumber company, the area continued to be utilized by the owner of the
sawmill up to the time of his death in 1965. On or about March 17, 1973, there
again was a strong earthquake unfortunately causing destruction to hundreds
of residential houses fronting the Calauag Bay including the Santiago
Building, a cinema house constructed of concrete materials. The catastrophe
totally caused the sinking of a concrete bridge at Sumulong river also in the
municipality of Calauag, Quezon.
On November 13, 1977 a typhoon code named "Unding" wrought havoc as it
lashed the main land of Calauag, Quezon causing again great erosion this
time than that which the area suffered in 1937. The Court noted with the
significance of the newspaper clipping entitled "Baryo ng Mangingisda
Kinain ng Dagat" (Exh. "11").
xxx xxx xxx
Evidently this was the condition of the land when on or about December 5,
1972 defendant Josefina L. Morato filed with the Bureau of Lands her free
patent application. The defendant Josefina Morato having taken possession
of the land after the demise of Don Tomas Morato, she introduced
improvement and continued developing the area, planted it to coconut tree.
Having applied for a free patent, defendant had the land area surveyed and
an approved plan (Exh. "9") based on the cadastral survey as early as 1927
(Exh. "10") was secured. The area was declared for taxation purposes in the
name of defendant Josefina Morato denominated as Tax Declaration No.
4115 (Exh. "8") and the corresponding realty taxes religiously paid as shown
by Exh. "8-A"). (pp. 12-14, DECISION).
Being supported by substantial evidence and for failure of the appellant to
show cause which would warrant disturbance, the aforecited findings of the
lower court, must be respected.
Petitioner correctly contends, however, that Private Respondent Morato
cannot own foreshore land:
Through the encroachment or erosion by the ebb and flow of the tide, a
portion of the subject land was invaded by the waves and sea advances.
During high tide, at least half of the land (632.5 square meters) is 6 feet deep
under water and three (3) feet deep during low tide. The Calauag Bay shore
has extended up to a portion of the questioned land.
While at the time of the grant of free patent to respondent Morato, the land
was not reached by the water, however, due to gradual sinking of the land
caused by natural calamities, the sea advances had permanently invaded a
portion of subject land. As disclosed at the trial, through the testimony of the
court-appointed commissioner, Engr. Abraham B. Pili, the land was under
water during high tide in the month of August 1978. The water margin covers
half of the property, but during low tide, the water is about a kilometer (TSN,
July 19, 1979, p. 12). Also, in 1974, after the grant of the patent, the land was
covered with vegetation, but it disappeared in 1978 when the land was
reached by the tides (Exh. "E-1", "E-14"). In fact, in its decision dated
December 28, 1983, the lower court observed that the erosion of the land was
caused by natural calamities that struck the place in 1977 (Cf. Decision, pp.
17-18). 26
Respondent-Spouses Quilatan argue, however, that it is "unfair and unjust if
Josefina Morato will be deprived of the whole property just because a portion
thereof was immersed in water for reasons not her own doing." 27
As a general rule, findings of facts of the Court of Appeals are binding and
conclusive upon this Court, unless such factual findings are palpably
unsupported by the evidence on record or unless the judgment itself is based
on a misapprehension of facts. 28 The application for a free patent was made
in 1972. From the undisputed factual findings of the Court of Appeals,
however, the land has since become foreshore. Accordingly, it can no longer
be subject of a free patent under the Public Land Act. Government of the
Philippine Islands vs. Cabañgis 29 explained the rationale for this
proscription:
Article 339, subsection 1, of the Civil Code, reads:
Art. 339. Property of public ownership is —
1. That devoted to public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, riverbanks, shores, roadsteads,
and that of a similar character.
xxx xxx xxx
Article 1, case 3, of the law of Waters of August 3, 1866, provides as follows:
Art. 1. The following are part of the national domain open to public use.
xxx xxx xxx
3. The Shores. By the shore is understood that space covered and
uncovered by the movement of the tide. Its interior or terrestrial limit is the
line reached by the highest equinoctal tides. Where the tides are not
appreciable, the shore begins on the land side at the line reached by the sea
during ordinary storms or tempests.
In the case of Aragon vs. Insular Government (19 Phil. 223), with reference to
article 339 of the Civil Code just quoted, this Court said:
We should not be understood, by this decision, to hold that in a case of
gradual encroachment or erosion by the ebb and flow of the tide, private
property may not become "property of public ownership." as defined in
article 339 of the code, where it appear that the owner has to all intents and
purposes abandoned it and permitted it to be totally destroyed, so as to
become a part of the "playa" (shore of the sea), "rada" (roadstead), or the like.
...
In the Enciclopedia Juridica Española, volume XII, page 558, we read the
following:
With relative frequency the opposite phenomenon occurs; that is, the sea
advances and private properties are permanently invaded by the waves, and
in this case they become part of the shore or breach. The then pass to the
public domain, but the owner thus dispossessed does not retain any right to
the natural products resulting from their new nature; it is a de facto case of
eminent domain, and not subject to indemnity.
In comparison, Article 420 of the Civil Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the national
wealth.
When the sea moved towards the estate and the tide invaded it, the invaded
property became foreshore land and passed to the realm of the public
domain. In fact, the Court in Government vs. Cabangis 30 annulled the
registration of land subject of cadastral proceedings when the parcel
subsequently became foreshore land. 31 In another case, the Court voided the
registration decree of a trial court and held that said court had no jurisdiction
to award foreshore land to any private person or entity. 32 The subject land
in this case, being foreshore land, should therefore be returned to the public
domain.
WHEREFORE, the petition is GRANTED. This Court hereby REVERSES and
SETS ASIDE the assailed Decision of Respondent Court and ORDERS the
CANCELLATION of Free Patent No. (IV-3) 275 issued to Respondent Morato
Page 12 of 36
and the subsequent Original Certificate of Title No. P-17789. The subject land
therefore REVERTS to the State. No costs.
SO ORDERED.
———————————
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of
preliminary injunction and a temporary restraining order. The petition seeks
to compel the Public Estates Authority ("PEA" for brevity) to disclose all facts
on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of
Manila Bay. The petition further seeks to enjoin PEA from signing a new
agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public
Highways, signed a contract with the Construction and Development
Corporation of the Philippines ("CDCP" for brevity) to reclaim certain
foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP
obligated itself to carry out all the works in consideration of fifty percent of
the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential
Decree No. 1084 creating PEA. PD No. 1084 tasked PEA "to reclaim land,
including foreshore and submerged areas," and "to develop, improve,
acquire, x x x lease and sell any and all kinds of lands."1 On the same date,
then President Marcos issued Presidential Decree No. 1085 transferring to
PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay"2
under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum
directing PEA to amend its contract with CDCP, so that "[A]ll future works in
MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and
CDCP executed a Memorandum of Agreement dated December 29, 1981,
which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other
works in the MCCRRP as may be agreed upon by the parties, to be paid
according to progress of works on a unit price/lump sum basis for items of
work to be agreed upon, subject to price escalation, retention and other terms
and conditions provided for in Presidential Decree No. 1594. All the financing
required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to
cede and transfer in favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of land reclaimed by CDCP in
the MCCRRP as of December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as of said date, which areas
consist of approximately Ninety-Nine Thousand Four Hundred Seventy
Three (99,473) square meters in the Financial Center Area covered by land
pledge No. 5 and approximately Three Million Three Hundred Eighty Two
Thousand Eight Hundred Eighty Eight (3,382,888) square meters of
reclaimed areas at varying elevations above Mean Low Water Level located
outside the Financial Center Area and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued Special Patent
No. 3517, granting and transferring to PEA "the parcels of land so reclaimed
under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP)
containing a total area of one million nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square meters." Subsequently, on April 9,
1988, the Register of Deeds of the Municipality of Parañaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering
the three reclaimed islands known as the "Freedom Islands" located at the
southern portion of the Manila-Cavite Coastal Road, Parañaque City. The
Freedom Islands have a total land area of One Million Five Hundred Seventy
Eight Thousand Four Hundred and Forty One (1,578,441) square meters or
157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for
brevity) with AMARI, a private corporation, to develop the Freedom Islands.
The JVA also required the reclamation of an additional 250 hectares of
submerged areas surrounding these islands to complete the configuration in
the Master Development Plan of the Southern Reclamation Project-
MCCRRP. PEA and AMARI entered into the JVA through negotiation
without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in
its Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then
President Fidel V. Ramos, through then Executive Secretary Ruben Torres,
approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda delivered a
privilege speech in the Senate and denounced the JVA as the "grandmother
of all scams." As a result, the Senate Committee on Government Corporations
and Public Enterprises, and the Committee on Accountability of Public
Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee
Report No. 560 dated September 16, 1997.7 Among the conclusions of their
report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the
JVA are lands of the public domain which the government has not classified
as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the
JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a Legal Task Force to conduct a study
on the legality of the JVA in view of Senate Committee Report No. 560. The
members of the Legal Task Force were the Secretary of Justice,8 the Chief
Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The
Legal Task Force upheld the legality of the JVA, contrary to the conclusions
reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published
reports that there were on-going renegotiations between PEA and AMARI
under an order issued by then President Fidel V. Ramos. According to these
reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired
Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining
Order and Preliminary Injunction docketed as G.R. No. 132994 seeking to
nullify the JVA. The Court dismissed the petition "for unwarranted disregard
of judicial hierarchy, without prejudice to the refiling of the case before the
proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a
taxpayer, filed the instant Petition for Mandamus with Prayer for the
Issuance of a Writ of Preliminary Injunction and Temporary Restraining
Order. Petitioner contends the government stands to lose billions of pesos in
the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA
publicly disclose the terms of any renegotiation of the JVA, invoking Section
28, Article II, and Section 7, Article III, of the 1987 Constitution on the right
of the people to information on matters of public concern. Petitioner assails
the sale to AMARI of lands of the public domain as a blatant violation of
Section 3, Article XII of the 1987 Constitution prohibiting the sale of
alienable lands of the public domain to private corporations. Finally,
petitioner asserts that he seeks to enjoin the loss of billions of pesos in
properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their
Comments on October 19, 1998 and June 25, 1998, respectively. Meanwhile,
on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require
PEA to submit the terms of the renegotiated PEA-AMARI contract; (b) for
issuance of a temporary restraining order; and (c) to set the case for hearing
on oral argument. Petitioner filed a Reiterative Motion for Issuance of a TRO
dated May 26, 1999, which the Court denied in a Resolution dated June 22,
1999.
In a Resolution dated March 23, 1999, the Court gave due course to the
petition and required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture
Agreement ("Amended JVA," for brevity). On May 28, 1999, the Office of the
President under the administration of then President Joseph E. Estrada
approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President,
petitioner now prays that on "constitutional and statutory grounds the
renegotiated contract be declared null and void."14
The Issues
Page 13 of 36
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION
ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO
OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-
EXHAUSTION OF ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION
INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS
BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE
ISSUE OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS
GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition are moot
and academic because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the
on-going negotiations for a new agreement." The petition also prays that the
Court enjoin PEA from "privately entering into, perfecting and/or executing
any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because
AMARI furnished petitioner on June 21, 1999 a copy of the signed Amended
JVA containing the terms and conditions agreed upon in the renegotiations.
Thus, PEA has satisfied petitioner's prayer for a public disclosure of the
renegotiations. Likewise, petitioner's prayer to enjoin the signing of the
Amended JVA is now moot because PEA and AMARI have already signed the
Amended JVA on March 30, 1999. Moreover, the Office of the President has
approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional
issue by simply fast-tracking the signing and approval of the Amended JVA
before the Court could act on the issue. Presidential approval does not resolve
the constitutional issue or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its
approval by the President cannot operate to moot the petition and divest the
Court of its jurisdiction. PEA and AMARI have still to implement the
Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation if
in the meantime PEA and AMARI have signed one in violation of the
Constitution. Petitioner's principal basis in assailing the renegotiation of the
JVA is its violation of Section 3, Article XII of the Constitution, which
prohibits the government from alienating lands of the public domain to
private corporations. If the Amended JVA indeed violates the Constitution, it
is the duty of the Court to enjoin its implementation, and if already
implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which
seeks to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now
becomes more compelling for the Court to resolve the issue to insure the
government itself does not violate a provision of the Constitution intended to
safeguard the national patrimony. Supervening events, whether intended or
accidental, cannot prevent the Court from rendering a decision if there is a
grave violation of the Constitution. In the instant case, if the Amended JVA
runs counter to the Constitution, the Court can still prevent the transfer of
title and ownership of alienable lands of the public domain in the name of
AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised
to formulate controlling principles to guide the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous decisions
of the Court involving Section 3, Article XII of the 1987 Constitution, or its
counterpart provision in the 1973 Constitution,18 covered agricultural lands
sold to private corporations which acquired the lands from private parties.
The transferors of the private corporations claimed or could claim the right to
judicial confirmation of their imperfect titles19 under Title II of
Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant case,
AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and
submerged areas for non-agricultural purposes by purchase under PD No.
1084 (charter of PEA) and Title III of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their
titles because the lands covered by the Amended JVA are newly reclaimed or
still to be reclaimed. Judicial confirmation of imperfect title requires open,
continuous, exclusive and notorious occupation of agricultural lands of the
public domain for at least thirty years since June 12, 1945 or earlier. Besides,
the deadline for filing applications for judicial confirmation of imperfect title
expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the constitutional issue raised
in this petition because of the possible transfer at any time by PEA to AMARI
of title and ownership to portions of the reclaimed lands. Under the
Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy
percent proportionate share in the reclaimed areas as the reclamation
progresses. The Amended JVA even allows AMARI to mortgage at any time
the entire reclaimed area to raise financing for the reclamation project.21
Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking
relief directly from the Court. The principle of hierarchy of courts applies
generally to cases involving factual questions. As it is not a trier of facts, the
Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the
public.22 The Court can resolve this case without determining any factual
issue related to the case. Also, the instant case is a petition for mandamus
which falls under the original jurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise primary jurisdiction
over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of
administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to
disclose publicly certain information without first asking PEA the needed
information. PEA claims petitioner's direct resort to the Court violates the
principle of exhaustion of administrative remedies. It also violates the rule
that mandamus may issue only if there is no other plain, speedy and
adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court
granted the petition for mandamus even if the petitioners there did not
initially demand from the Office of the President the publication of the
presidential decrees. PEA points out that in Tañada, the Executive
Department had an affirmative statutory duty under Article 2 of the Civil
Code24 and Section 1 of Commonwealth Act No. 63825 to publish the
presidential decrees. There was, therefore, no need for the petitioners in
Tañada to make an initial demand from the Office of the President. In the
instant case, PEA claims it has no affirmative statutory duty to disclose
publicly information about its renegotiation of the JVA. Thus, PEA asserts
that the Court must apply the principle of exhaustion of administrative
remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing
Code,26 the disposition of government lands to private parties requires
public bidding. PEA was under a positive legal duty to disclose to the public
the terms and conditions for the sale of its lands. The law obligated PEA to
make this public disclosure even without demand from petitioner or from
anyone. PEA failed to make this public disclosure because the original JVA,
like the Amended JVA, was the result of a negotiated contract, not of a public
bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had the
right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of
exhaustion of administrative remedies does not apply when the issue
involved is a purely legal or constitutional question.27 The principal issue in
the instant case is the capacity of AMARI to acquire lands held by PEA in
view of the constitutional ban prohibiting the alienation of lands of the public
domain to private corporations. We rule that the principle of exhaustion of
administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
Page 14 of 36
PEA argues that petitioner has no standing to institute mandamus
proceedings to enforce his constitutional right to information without a
showing that PEA refused to perform an affirmative duty imposed on PEA by
the Constitution. PEA also claims that petitioner has not shown that he will
suffer any concrete injury because of the signing or implementation of the
Amended JVA. Thus, there is no actual controversy requiring the exercise of
the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the petition
seeks to compel PEA to comply with its constitutional duties. There are two
constitutional issues involved here. First is the right of citizens to information
on matters of public concern. Second is the application of a constitutional
provision intended to insure the equitable distribution of alienable lands of
the public domain among Filipino citizens. The thrust of the first issue is to
compel PEA to disclose publicly information on the sale of government lands
worth billions of pesos, information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue is to prevent PEA
from alienating hundreds of hectares of alienable lands of the public domain
in violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,28 the Court upheld the right of a citizen to bring
a taxpayer's suit on matters of transcendental importance to the public, thus -
"Besides, petitioner emphasizes, the matter of recovering the ill-gotten
wealth of the Marcoses is an issue of 'transcendental importance to the
public.' He asserts that ordinary taxpayers have a right to initiate and
prosecute actions questioning the validity of acts or orders of government
agencies or instrumentalities, if the issues raised are of 'paramount public
interest,' and if they 'immediately affect the social, economic and moral well
being of the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of
personal interest, when the proceeding involves the assertion of a public
right, such as in this case. He invokes several decisions of this Court which
have set aside the procedural matter of locus standi, when the subject of the
case involved public interest.
xxx
In Tañada v. Tuvera, the Court asserted that when the issue concerns a public
right and the object of mandamus is to obtain the enforcement of a public
duty, the people are regarded as the real parties in interest; and because it is
sufficient that petitioner is a citizen and as such is interested in the execution
of the laws, he need not show that he has any legal or special interest in the
result of the action. In the aforesaid case, the petitioners sought to enforce
their right to be informed on matters of public concern, a right then
recognized in Section 6, Article IV of the 1973 Constitution, in connection
with the rule that laws in order to be valid and enforceable must be published
in the Official Gazette or otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right they sought to be
enforced 'is a public right recognized by no less than the fundamental law of
the land.'
Legaspi v. Civil Service Commission, while reiterating Tañada, further
declared that 'when a mandamus proceeding involves the assertion of a
public right, the requirement of personal interest is satisfied by the mere fact
that petitioner is a citizen and, therefore, part of the general 'public' which
possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds
may not have been involved under the questioned contract for the
development, management and operation of the Manila International
Container Terminal, 'public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of
the country and the magnitude of the financial consideration involved.' We
concluded that, as a consequence, the disclosure provision in the
Constitution would constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to
information and access to official records, documents and papers — a right
guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino citizen. Because of the satisfaction of the
two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar should be allowed."
We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights - to information and to the equitable
diffusion of natural resources - matters of transcendental public importance,
the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official
information on on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to
information on matters of public concern in this manner:
"Sec. 7. The right of the people to information on matters of public concern
shall be recognized. Access to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law." (Emphasis
supplied)
The State policy of full transparency in all transactions involving public
interest reinforces the people's right to information on matters of public
concern. This State policy is expressed in Section 28, Article II of the
Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions
involving public interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in
policy-making and in the operations of the government, as well as provide
the people sufficient information to exercise effectively other constitutional
rights. These twin provisions are essential to the exercise of freedom of
expression. If the government does not disclose its official acts, transactions
and decisions to citizens, whatever citizens say, even if expressed without any
restraint, will be speculative and amount to nothing. These twin provisions
are also essential to hold public officials "at all times x x x accountable to the
people,"29 for unless citizens have the proper information, they cannot hold
public officials accountable for anything. Armed with the right information,
citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed
citizenry is essential to the existence and proper functioning of any
democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30 –
"An essential element of these freedoms is to keep open a continuing
dialogue or process of communication between the government and the
people. It is in the interest of the State that the channels for free political
discussion be maintained to the end that the government may perceive and
be responsive to the people's will. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are aware of the
issues and have access to information relating thereto can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations
the right to information is limited to "definite propositions of the
government." PEA maintains the right does not include access to "intra-
agency or inter-agency recommendations or communications during the
stage when common assertions are still in the process of being formulated or
are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-
decisional stage or before the closing of the transaction. To support its
contention, AMARI cites the following discussion in the 1986 Constitutional
Commission:
"Mr. Suarez. And when we say 'transactions' which should be distinguished
from contracts, agreements, or treaties or whatever, does the Gentleman
refer to the steps leading to the consummation of the contract, or does he
refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it
can cover both steps leading to a contract and already a consummated
contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner
can invoke the right. Requiring government officials to reveal their
deliberations at the pre-decisional stage will degrade the quality of decision-
making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public
Page 15 of 36
dissemination of their discussions, putting them under all kinds of pressure
before they decide.
We must first distinguish between information the law on public bidding
requires PEA to disclose publicly, and information the constitutional right to
information requires PEA to release to the public. Before the consummation
of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These
include the size, location, technical description and nature of the property
being disposed of, the terms and conditions of the disposition, the parties
qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the
disposition process, long before the consummation of the contract, because
the Government Auditing Code requires public bidding. If PEA fails to make
this disclosure, any citizen can demand from PEA this information at any
time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals
being undertaken by the bidding or review committee is not immediately
accessible under the right to information. While the evaluation or review is
still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official
recommendation, there arises a "definite proposition" on the part of the
government. From this moment, the public's right to information attaches,
and any citizen can access all the non-proprietary information leading to
such definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it
is incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must pertain to
definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the
"exploratory" stage. There is need, of course, to observe the same restrictions
on disclosure of information in general, as discussed earlier – such as on
matters involving national security, diplomatic or foreign relations,
intelligence and other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986
Constitutional Commission understood that the right to information
"contemplates inclusion of negotiations leading to the consummation of the
transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise
the right if no contract is consummated, and if one is consummated, it may
be too late for the public to expose its defects.1âwphi1.nêt
Requiring a consummated contract will keep the public in the dark until the
contract, which may be grossly disadvantageous to the government or even
illegal, becomes a fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of
the Constitution could not have intended. Such a requirement will prevent
the citizenry from participating in the public discussion of any proposed
contract, effectively truncating a basic right enshrined in the Bill of Rights.
We can allow neither an emasculation of a constitutional right, nor a retreat
by the State of its avowed "policy of full disclosure of all its transactions
involving public interest."
The right covers three categories of information which are "matters of public
concern," namely: (1) official records; (2) documents and papers pertaining
to official acts, transactions and decisions; and (3) government research data
used in formulating policies. The first category refers to any document that is
part of the public records in the custody of government agencies or officials.
The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts,
transactions or decisions of government agencies or officials. The third
category refers to research data, whether raw, collated or processed, owned
by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA
includes evaluation reports, recommendations, legal and expert opinions,
minutes of meetings, terms of reference and other documents attached to
such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and
the like relating to the renegotiation of the JVA.34 The right only affords
access to records, documents and papers, which means the opportunity to
inspect and copy them. One who exercises the right must copy the records,
documents and papers at his expense. The exercise of the right is also subject
to reasonable regulations to protect the integrity of the public records and to
minimize disruption to government operations, like rules specifying when
and how to conduct the inspection and copying.35
The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers.36 The right does not
also apply to information on military and diplomatic secrets, information
affecting national security, and information on investigations of crimes by
law enforcement agencies before the prosecution of the accused, which courts
have long recognized as confidential.37 The right may also be subject to other
limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is
privileged information rooted in the separation of powers. The information
does not cover Presidential conversations, correspondences, or discussions
during closed-door Cabinet meetings which, like internal deliberations of the
Supreme Court and other collegiate courts, or executive sessions of either
house of Congress,38 are recognized as confidential. This kind of information
cannot be pried open by a co-equal branch of government. A frank exchange
of exploratory ideas and assessments, free from the glare of publicity and
pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and
Judicial power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes
official information on on-going negotiations before a final contract. The
information, however, must constitute definite propositions by the
government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting
national security and public order.40 Congress has also prescribed other
limitations on the right to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to
AMARI of lands, reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is
rooted in the Regalian doctrine which holds that the State owns all lands and
waters of the public domain. Upon the Spanish conquest of the Philippines,
ownership of all "lands, territories and possessions" in the Philippines passed
to the Spanish Crown.42 The King, as the sovereign ruler and representative
of the people, acquired and owned all lands and territories in the Philippines
except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine
substituting, however, the State, in lieu of the King, as the owner of all lands
and waters of the public domain. The Regalian doctrine is the foundation of
the time-honored principle of land ownership that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the
public domain."43 Article 339 of the Civil Code of 1889, which is now Article
420 of the Civil Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18,
1907, the Philippine Commission enacted Act No. 1654 which provided for
the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized
the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. On November 7, 1936, the National Assembly
passed Commonwealth Act No. 141, also known as the Public Land Act, which
authorized the lease, but not the sale, of reclaimed lands of the government
to corporations and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of lands of the public
domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and
all waters within the maritime zone of the Spanish territory belonged to the
public domain for public use.44 The Spanish Law of Waters of 1866 allowed
the reclamation of the sea under Article 5, which provided as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed
by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to
the party undertaking the reclamation, provided the government issued the
necessary permit and did not reserve ownership of the reclaimed land to the
State.
Page 16 of 36

Article 339 of the Civil Code of 1889 defined property of public dominion as
follows:
"Art. 339. Property of public dominion is –
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, riverbanks, shores, roadsteads, and that of a
similar character;
2. That belonging exclusively to the State which, without being of general
public use, is employed in some public service, or in the development of the
national wealth, such as walls, fortresses, and other works for the defense of
the territory, and mines, until granted to private individuals."
Property devoted to public use referred to property open for use by the
public. In contrast, property devoted to public service referred to property
used for some specific public service and open only to those authorized to use
the property.
Property of public dominion referred not only to property devoted to public
use, but also to property not so used but employed to develop the national
wealth. This class of property constituted property of public dominion
although employed for some economic or commercial activity to increase the
national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property
of public dominion into private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use
or to the defense of the territory, shall become a part of the private property
of the State."
This provision, however, was not self-executing. The legislature, or the
executive department pursuant to law, must declare the property no longer
needed for public use or territorial defense before the government could lease
or alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which
regulated the lease of reclaimed and foreshore lands. The salient provisions
of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing
law, and the title to all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout the Philippine
Islands, shall be retained by the Government without prejudice to vested
rights and without prejudice to rights conceded to the City of Manila in the
Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or
public lands made or reclaimed by the Government by dredging or filling or
otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to
be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give
notice to the public that such parts of the lands so made or reclaimed as are
not needed for public purposes will be leased for commercial and business
purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-
General may by executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control
and disposition of foreshore lands. Private parties could lease lands
reclaimed by the government only if these lands were no longer needed for
public purpose. Act No. 1654 mandated public bidding in the lease of
government reclaimed lands. Act No. 1654 made government reclaimed lands
sui generis in that unlike other public lands which the government could sell
to private parties, these reclaimed lands were available only for lease to
private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters
of 1866. Act No. 1654 did not prohibit private parties from reclaiming parts of
the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from
the sea by private parties with government permission remained private
lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the
Public Land Act.46 The salient provisions of Act No. 2874, on reclaimed
lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands
of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or
disposable public lands, the Governor-General, upon recommendation by the
Secretary of Agriculture and Natural Resources, shall from time to time
declare what lands are open to disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber
nor mineral land, shall be classified as suitable for residential purposes or for
commercial, industrial, or other productive purposes other than agricultural
purposes, and shall be open to disposition or concession, shall be disposed of
under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six
shall be disposed of to private parties by lease only and not otherwise, as
soon as the Governor-General, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall declare that the same are not
necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease
under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands
of the public domain into x x x alienable or disposable"47 lands. Section 7 of
the Act empowered the Governor-General to "declare what lands are open to
disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited
and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48
shall be classified" as government reclaimed, foreshore and marshy lands, as
well as other lands. All these lands, however, must be suitable for residential,
commercial, industrial or other productive non-agricultural purposes. These
provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public
domain. These provisions also empowered the Governor-General to classify
further such disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public domain, as well as other
non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of
the public domain classified as government reclaimed, foreshore and marshy
lands "shall be disposed of to private parties by lease only and not otherwise."
The Governor-General, before allowing the lease of these lands to private
parties, must formally declare that the lands were "not necessary for the
public service." Act No. 2874 reiterated the State policy to lease and not to
sell government reclaimed, foreshore and marshy lands of the public domain,
a policy first enunciated in 1907 in Act No. 1654. Government reclaimed,
Page 17 of 36
foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to
private parties.
The rationale behind this State policy is obvious. Government reclaimed,
foreshore and marshy public lands for non-agricultural purposes retain their
inherent potential as areas for public service. This is the reason the
government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public
service.
Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section
56 (d). Lands falling under Section 56 (d) were the only lands for non-
agricultural purposes the government could sell to private parties. Thus,
under Act No. 2874, the government could not sell government reclaimed,
foreshore and marshy lands to private parties, unless the legislature passed a
law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea
pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed
from the sea by private parties with government permission remained private
lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the
Filipino people. The 1935 Constitution, in adopting the Regalian doctrine,
declared in Section 1, Article XIII, that –
"Section 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy and other natural resources of the Philippines belong to the
State, and their disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines or to corporations or associations at
least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the
inauguration of the Government established under this Constitution. Natural
resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation,
development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five
years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases
beneficial use may be the measure and limit of the grant." (Emphasis
supplied)
The 1935 Constitution barred the alienation of all natural resources except
public agricultural lands, which were the only natural resources the State
could alienate. Thus, foreshore lands, considered part of the State's natural
resources, became inalienable by constitutional fiat, available only for lease
for 25 years, renewable for another 25 years. The government could alienate
foreshore lands only after these lands were reclaimed and classified as
alienable agricultural lands of the public domain. Government reclaimed and
marshy lands of the public domain, being neither timber nor mineral lands,
fell under the classification of public agricultural lands.50 However,
government reclaimed and marshy lands, although subject to classification as
disposable public agricultural lands, could only be leased and not sold to
private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government
reclaimed and marshy lands of the public domain was only a statutory
prohibition and the legislature could therefore remove such prohibition. The
1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that
were classified as agricultural lands under existing public land laws. Section
2, Article XIII of the 1935 Constitution provided as follows:
"Section 2. No private corporation or association may acquire, lease, or hold
public agricultural lands in excess of one thousand and twenty four hectares,
nor may any individual acquire such lands by purchase in excess of one
hundred and forty hectares, or by lease in excess of one thousand and twenty-
four hectares, or by homestead in excess of twenty-four hectares. Lands
adapted to grazing, not exceeding two thousand hectares, may be leased to an
individual, private corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not
repeal Section 58 of Act No. 2874 to open for sale to private parties
government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of
retaining for the government title and ownership of government reclaimed
and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act
No. 141, also known as the Public Land Act, which compiled the then existing
laws on lands of the public domain. CA No. 141, as amended, remains to this
day the existing general law governing the classification and disposition of
lands of the public domain other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into "alienable or disposable"52 lands of the public domain, which
prior to such classification are inalienable and outside the commerce of man.
Section 7 of CA No. 141 authorizes the President to "declare what lands are
open to disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that
are "officially delimited and classified." Sections 6, 7 and 8 of CA No. 141 read
as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of
Agriculture and Commerce, shall from time to time classify the lands of the
public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another,53 for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the
Secretary of Agriculture and Commerce, shall from time to time declare what
lands are open to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited and classified and, when practicable,
surveyed, and which have not been reserved for public or quasi-public uses,
nor appropriated by the Government, nor in any manner become private
property, nor those on which a private right authorized and recognized by
this Act or any other valid law may be claimed, or which, having been
reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of the public
domain, the President must first officially classify these lands as alienable or
disposable, and then declare them open to disposition or concession. There
must be no law reserving these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore
and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber
nor mineral land, is intended to be used for residential purposes or for
commercial, industrial, or other productive purposes other than agricultural,
and is open to disposition or concession, shall be disposed of under the
provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as
the case may be, to any person, corporation, or association authorized to
purchase or lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine
shall be disposed of to private parties by lease only and not otherwise, as
soon as the President, upon recommendation by the Secretary of Agriculture,
shall declare that the same are not necessary for the public service and are
open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis
supplied)
Page 18 of 36
Section 61 of CA No. 141 readopted, after the effectivity of the 1935
Constitution, Section 58 of Act No. 2874 prohibiting the sale of government
reclaimed, foreshore and marshy disposable lands of the public domain. All
these lands are intended for residential, commercial, industrial or other non-
agricultural purposes. As before, Section 61 allowed only the lease of such
lands to private parties. The government could sell to private parties only
lands falling under Section 59 (d) of CA No. 141, or those lands for non-
agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however,
became inalienable under the 1935 Constitution which only allowed the lease
of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public
domain intended for residential, commercial, industrial or other productive
purposes other than agricultural "shall be disposed of under the provisions of
this chapter and not otherwise." Under Section 10 of CA No. 141, the term
"disposition" includes lease of the land. Any disposition of government
reclaimed, foreshore and marshy disposable lands for non-agricultural
purposes must comply with Chapter IX, Title III of CA No. 141,54 unless a
subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate
Corporation v. Court of Appeals,55 Justice Reynato S. Puno summarized
succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too
are lands reclaimed by the government by dredging, filling, or other means.
Act 1654 mandated that the control and disposition of the foreshore and
lands under water remained in the national government. Said law allowed
only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936
also declared that the foreshore and lands reclaimed by the government were
to be "disposed of to private parties by lease only and not otherwise." Before
leasing, however, the Governor-General, upon recommendation of the
Secretary of Agriculture and Natural Resources, had first to determine that
the land reclaimed was not necessary for the public service. This requisite
must have been met before the land could be disposed of. But even then, the
foreshore and lands under water were not to be alienated and sold to private
parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act
No. 141 has remained in effect at present."
The State policy prohibiting the sale to private parties of government
reclaimed, foreshore and marshy alienable lands of the public domain, first
implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935
Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution.
Foreshore lands became inalienable as natural resources of the State, unless
reclaimed by the government and classified as agricultural lands of the public
domain, in which case they would fall under the classification of government
reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and
marshy disposable lands of the public domain continued to be only leased
and not sold to private parties.56 These lands remained sui generis, as the
only alienable or disposable lands of the public domain the government could
not sell to private parties.
Since then and until now, the only way the government can sell to private
parties government reclaimed and marshy disposable lands of the public
domain is for the legislature to pass a law authorizing such sale. CA No. 141
does not authorize the President to reclassify government reclaimed and
marshy lands into other non-agricultural lands under Section 59 (d). Lands
classified under Section 59 (d) are the only alienable or disposable lands for
non-agricultural purposes that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional
authority before lands under Section 59 that the government previously
transferred to government units or entities could be sold to private parties.
Section 60 of CA No. 141 declares that –
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is
requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants, donations,
or transfers made to a province, municipality or branch or subdivision of the
Government for the purposes deemed by said entities conducive to the public
interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be
alienated, encumbered, or otherwise disposed of in a manner affecting its
title, except when authorized by Congress: x x x." (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the
legislative authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public
lands that could be acquired from the State. These government units and
entities should not just turn around and sell these lands to private parties in
violation of constitutional or statutory limitations. Otherwise, the transfer of
lands for non-agricultural purposes to government units and entities could be
used to circumvent constitutional limitations on ownership of alienable or
disposable lands of the public domain. In the same manner, such transfers
could also be used to evade the statutory prohibition in CA No. 141 on the sale
of government reclaimed and marshy lands of the public domain to private
parties. Section 60 of CA No. 141 constitutes by operation of law a lien on
these lands.57
In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding.
Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not
needed for public purposes, the Director of Lands shall ask the Secretary of
Agriculture and Commerce (now the Secretary of Natural Resources) for
authority to dispose of the same. Upon receipt of such authority, the Director
of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication
shall be made to the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases
or sales of alienable or disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal
Section 5 of the Spanish Law of Waters of 1866. Private parties could still
reclaim portions of the sea with government permission. However, the
reclaimed land could become private land only if classified as alienable
agricultural land of the public domain open to disposition under CA No. 141.
The 1935 Constitution prohibited the alienation of all natural resources
except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of
public dominion found in the Civil Code of 1889. Articles 420 and 422 of the
Civil Code of 1950 state that –
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads, and others of
similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property of the
State."
Again, the government must formally declare that the property of public
dominion is no longer needed for public use or public service, before the
same could be classified as patrimonial property of the State.59 In the case of
government reclaimed and marshy lands of the public domain, the
declaration of their being disposable, as well as the manner of their
disposition, is governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of
public dominion those properties of the State which, without being for public
use, are intended for public service or the "development of the national
wealth." Thus, government reclaimed and marshy lands of the State, even if
not employed for public use or public service, if developed to enhance the
national wealth, are classified as property of public dominion.
Dispositions under the 1973 Constitution
Page 19 of 36
The 1973 Constitution, which took effect on January 17, 1973, likewise
adopted the Regalian doctrine. Section 8, Article XIV of the 1973 Constitution
stated that –
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. With the exception of
agricultural, industrial or commercial, residential, and resettlement lands of
the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which cases, beneficial
use may be the measure and the limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources with
the exception of "agricultural, industrial or commercial, residential, and
resettlement lands of the public domain." In contrast, the 1935 Constitution
barred the alienation of all natural resources except "public agricultural
lands." However, the term "public agricultural lands" in the 1935
Constitution encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of public domain were
neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions,
therefore, prohibited the alienation of all natural resources except
agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public
domain to individuals who were citizens of the Philippines. Private
corporations, even if wholly owned by Philippine citizens, were no longer
allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that –
"Sec. 11. The Batasang Pambansa, taking into account conservation,
ecological, and development requirements of the natural resources, shall
determine by law the size of land of the public domain which may be
developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain
except by lease not to exceed one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five hundred hectares or acquire
by purchase, homestead or grant, in excess of twenty-four hectares. No
private corporation or association may hold by lease, concession, license or
permit, timber or forest lands and other timber or forest resources in excess
of one hundred thousand hectares. However, such area may be increased by
the Batasang Pambansa upon recommendation of the National Economic
and Development Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable
lands of the public domain only through lease. Only individuals could now
acquire alienable lands of the public domain, and private corporations
became absolutely barred from acquiring any kind of alienable land of the
public domain. The constitutional ban extended to all kinds of alienable lands
of the public domain, while the statutory ban under CA No. 141 applied only
to government reclaimed, foreshore and marshy alienable lands of the public
domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential
Decree No. 1084 creating PEA, a wholly government owned and controlled
corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests
PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose,
lease and sell any and all kinds of lands, buildings, estates and other forms of
real property, owned, managed, controlled and/or operated by the
government;
(c) To provide for, operate or administer such service as may be necessary for
the efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying
out the purposes for which it is created, have the following powers and
functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to
private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for
the attainment of the purposes and objectives herein specified." (Emphasis
supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas
of the public domain. Foreshore areas are those covered and uncovered by
the ebb and flow of the tide.61 Submerged areas are those permanently under
water regardless of the ebb and flow of the tide.62 Foreshore and submerged
areas indisputably belong to the public domain63 and are inalienable unless
reclaimed, classified as alienable lands open to disposition, and further
declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring
alienable lands of the public domain did not apply to PEA since it was then,
and until today, a fully owned government corporation. The constitutional
ban applied then, as it still applies now, only to "private corporations and
associations." PD No. 1084 expressly empowers PEA "to hold lands of the
public domain" even "in excess of the area permitted to private corporations
by statute." Thus, PEA can hold title to private lands, as well as title to lands
of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable
lands of the public domain, there must be legislative authority empowering
PEA to sell these lands. This legislative authority is necessary in view of
Section 60 of CA No.141, which states –
"Sec. 60. x x x; but the land so granted, donated or transferred to a province,
municipality, or branch or subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its
title, except when authorized by Congress; x x x." (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its
reclaimed foreshore and submerged alienable lands of the public domain.
Nevertheless, any legislative authority granted to PEA to sell its reclaimed
alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public
domain. Hence, such legislative authority could only benefit private
individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has
adopted the Regalian doctrine. The 1987 Constitution declares that all
natural resources are "owned by the State," and except for alienable
agricultural lands of the public domain, natural resources cannot be
alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that –
"Section 2. 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. The exploration, development, and utilization of
natural resources shall be under the full control and supervision of the State.
x x x.
Section 3. Lands of the public domain are classified into agricultural, forest
or timber, mineral lands, and national parks. Agricultural lands of the public
domain may be further classified by law according to the uses which they may
be devoted. Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years,
and not to exceed one thousand hectares in area. Citizens of the Philippines
may lease not more than five hundred hectares, or acquire not more than
twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain
Page 20 of 36
which may be acquired, developed, held, or leased and the conditions
therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution
banning private corporations from acquiring any kind of alienable land of the
public domain. Like the 1973 Constitution, the 1987 Constitution allows
private corporations to hold alienable lands of the public domain only
through lease. As in the 1935 and 1973 Constitutions, the general law
governing the lease to private corporations of reclaimed, foreshore and
marshy alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring,
except through lease, alienable lands of the public domain is not well
understood. During the deliberations of the 1986 Constitutional Commission,
the commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3,
line 5 which says:
`No private corporation or association may hold alienable lands of the public
domain except by lease, not to exceed one thousand hectares in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this
was introduced in the 1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands. But it has not been very
clear in jurisprudence what the reason for this is. In some of the cases
decided in 1982 and 1983, it was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-
square meter land where a chapel stood because the Supreme Court said it
would be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this
constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of
public agricultural lands by private corporations is to equitably diffuse land
ownership or to encourage 'owner-cultivatorship and the economic family-
size farm' and to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the
Constitution could have simply limited the size of alienable lands of the
public domain that corporations could acquire. The Constitution could have
followed the limitations on individuals, who could acquire not more than 24
hectares of alienable lands of the public domain under the 1973 Constitution,
and not more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms,
placing the land in the name of a corporation would be more effective in
preventing the break-up of farmlands. If the farmland is registered in the
name of a corporation, upon the death of the owner, his heirs would inherit
shares in the corporation instead of subdivided parcels of the farmland. This
would prevent the continuing break-up of farmlands into smaller and smaller
plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional
limitation on individuals from acquiring more than the allowed area of
alienable lands of the public domain. Without the constitutional ban,
individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable
public lands. An individual could own as many corporations as his means
would allow him. An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional
limitation on acquisition by individuals of alienable lands of the public
domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to
transfer ownership of only a limited area of alienable land of the public
domain to a qualified individual. This constitutional intent is safeguarded by
the provision prohibiting corporations from acquiring alienable lands of the
public domain, since the vehicle to circumvent the constitutional intent is
removed. The available alienable public lands are gradually decreasing in the
face of an ever-growing population. The most effective way to insure faithful
adherence to this constitutional intent is to grant or sell alienable lands of the
public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas
clause, consists of three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio
Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila, with a
combined titled area of 1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three
islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares
more or less to regularize the configuration of the reclaimed area."65
PEA confirms that the Amended JVA involves "the development of the
Freedom Islands and further reclamation of about 250 hectares x x x," plus
an option "granted to AMARI to subsequently reclaim another 350 hectares x
x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only
157.84 hectares of the 750-hectare reclamation project have been reclaimed,
and the rest of the 592.15 hectares are still submerged areas forming part of
Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of
P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the
Freedom Islands. AMARI will also complete, at its own expense, the
reclamation of the Freedom Islands. AMARI will further shoulder all the
reclamation costs of all the other areas, totaling 592.15 hectares, still to be
reclaimed. AMARI and PEA will share, in the proportion of 70 percent and
30 percent, respectively, the total net usable area which is defined in the
Amended JVA as the total reclaimed area less 30 percent earmarked for
common areas. Title to AMARI's share in the net usable area, totaling 367.5
hectares, will be issued in the name of AMARI. Section 5.2 (c) of the
Amended JVA provides that –
"x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARI's Land share based
on the Land Allocation Plan. PEA, when requested in writing by AMARI,
shall then cause the issuance and delivery of the proper certificates of title
covering AMARI's Land Share in the name of AMARI, x x x; provided, that if
more than seventy percent (70%) of the titled area at any given time pertains
to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding
proportionate area of additional land pertaining to PEA has been
titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a
maximum of 367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-
AMARI joint venture PEA's statutory authority, rights and privileges to
reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the
Amended JVA states that –
"PEA hereby contributes to the joint venture its rights and privileges to
perform Rawland Reclamation and Horizontal Development as well as own
the Reclamation Area, thereby granting the Joint Venture the full and
exclusive right, authority and privilege to undertake the Project in accordance
with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated
April 25, 1995 and its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire
and own under the Amended JVA 367.5 hectares of reclaimed foreshore and
submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the
1987 Constitution which state that:
"Section 2. 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.
xxx
Page 21 of 36

Section 3. x x x Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, x x x."(Emphasis
supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged
areas of Manila Bay are alienable or disposable lands of the public domain. In
its Memorandum,67 PEA admits that –
"Under the Public Land Act (CA 141, as amended), reclaimed lands are
classified as alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential
Administrative Order No. 365 admitted in its Report and Recommendation
to then President Fidel V. Ramos, "[R]eclaimed lands are classified as
alienable and disposable lands of the public domain."69 The Legal Task
Force concluded that –
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory
authority, the rights of ownership and disposition over reclaimed lands have
been transferred to PEA, by virtue of which PEA, as owner, may validly
convey the same to any qualified person without violating the Constitution or
any statute.
The constitutional provision prohibiting private corporations from holding
public land, except by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not
apply to reclaimed lands whose ownership has passed on to PEA by statutory
grant."
Under Section 2, Article XII of the 1987 Constitution, the foreshore and
submerged areas of Manila Bay are part of the "lands of the public domain,
waters x x x and other natural resources" and consequently "owned by the
State." As such, foreshore and submerged areas "shall not be alienated,"
unless they are classified as "agricultural lands" of the public domain. The
mere reclamation of these areas by PEA does not convert these inalienable
natural resources of the State into alienable or disposable lands of the public
domain. There must be a law or presidential proclamation officially
classifying these reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed lands cannot be
classified as alienable or disposable if the law has reserved them for some
public or quasi-public use.71
Section 8 of CA No. 141 provides that "only those lands shall be declared open
to disposition or concession which have been officially delimited and
classified."72 The President has the authority to classify inalienable lands of
the public domain into alienable or disposable lands of the public domain,
pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive
Department attempted to sell the Roppongi property in Tokyo, Japan, which
was acquired by the Philippine Government for use as the Chancery of the
Philippine Embassy. Although the Chancery had transferred to another
location thirteen years earlier, the Court still ruled that, under Article 42274
of the Civil Code, a property of public dominion retains such character until
formally declared otherwise. The Court ruled that –
"The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property.
Any such conversion happens only if the property is withdrawn from public
use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of the public domain, not available for private
appropriation or ownership 'until there is a formal declaration on the part of
the government to withdraw it from being such' (Ignacio v. Director of Lands,
108 Phil. 335 [1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special
land patents for lands reclaimed by PEA from the foreshore or submerged
areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino
issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares
comprising the partially reclaimed Freedom Islands. Subsequently, on April
9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT
Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD
No. 1529 authorizing the issuance of certificates of title corresponding to land
patents. To this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special
patent covering the Freedom Islands, is equivalent to an official proclamation
classifying the Freedom Islands as alienable or disposable lands of the public
domain. PD No. 1085 and President Aquino's issuance of a land patent also
constitute a declaration that the Freedom Islands are no longer needed for
public service. The Freedom Islands are thus alienable or disposable lands of
the public domain, open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had
already reclaimed the Freedom Islands although subsequently there were
partial erosions on some areas. The government had also completed the
necessary surveys on these islands. Thus, the Freedom Islands were no
longer part of Manila Bay but part of the land mass. Section 3, Article XII of
the 1987 Constitution classifies lands of the public domain into "agricultural,
forest or timber, mineral lands, and national parks." Being neither timber,
mineral, nor national park lands, the reclaimed Freedom Islands necessarily
fall under the classification of agricultural lands of the public domain. Under
the 1987 Constitution, agricultural lands of the public domain are the only
natural resources that the State may alienate to qualified private parties. All
other natural resources, such as the seas or bays, are "waters x x x owned by
the State" forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP,
then a private corporation, reclaimed the islands under a contract dated
November 20, 1973 with the Commissioner of Public Highways. AMARI,
citing Article 5 of the Spanish Law of Waters of 1866, argues that "if the
ownership of reclaimed lands may be given to the party constructing the
works, then it cannot be said that reclaimed lands are lands of the public
domain which the State may not alienate."75 Article 5 of the Spanish Law of
Waters reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed
by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority." (Emphasis
supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could
reclaim from the sea only with "proper permission" from the State. Private
parties could own the reclaimed land only if not "otherwise provided by the
terms of the grant of authority." This clearly meant that no one could reclaim
from the sea without permission from the State because the sea is property of
public dominion. It also meant that the State could grant or withhold
ownership of the reclaimed land because any reclaimed land, like the sea
from which it emerged, belonged to the State. Thus, a private person
reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public
dominion like the sea it replaced.76 Article 5 of the Spanish Law of Waters of
1866 adopted the time-honored principle of land ownership that "all lands
that were not acquired from the government, either by purchase or by grant,
belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws
subsequently enacted on the disposition of public lands. In particular, CA No.
141 requires that lands of the public domain must first be classified as
alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes.78 Moreover, the
contract between CDCP and the government was executed after the effectivity
of the 1973 Constitution which barred private corporations from acquiring
any kind of alienable land of the public domain. This contract could not have
converted the Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the
National Government the power to reclaim lands. Section 1 of PD No. 3-A
declared that –
"The provisions of any law to the contrary notwithstanding, the reclamation
of areas under water, whether foreshore or inland, shall be limited to the
National Government or any person authorized by it under a proper contract.
(Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the
National Government or by a person contracted by the National Government.
Private parties may reclaim from the sea only under a contract with the
Page 22 of 36
National Government, and no longer by grant or permission as provided in
Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Government's implementing arm to undertake "all reclamation
projects of the government," which "shall be undertaken by the PEA or
through a proper contract executed by it with any person or entity." Under
such contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind
consisting of portions of the reclaimed land, subject to the constitutional ban
on private corporations from acquiring alienable lands of the public domain.
The reclaimed land can be used as payment in kind only if the reclaimed land
is first classified as alienable or disposable land open to disposition, and then
declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an
additional 592.15 hectares which are still submerged and forming part of
Manila Bay. There is no legislative or Presidential act classifying these
submerged areas as alienable or disposable lands of the public domain open
to disposition. These submerged areas are not covered by any patent or
certificate of title. There can be no dispute that these submerged areas form
part of the public domain, and in their present state are inalienable and
outside the commerce of man. Until reclaimed from the sea, these submerged
areas are, under the Constitution, "waters x x x owned by the State," forming
part of the public domain and consequently inalienable. Only when actually
reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural
resources that the State may alienate. Once reclaimed and transformed into
public agricultural lands, the government may then officially classify these
lands as alienable or disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for public service.
Only then can these reclaimed lands be considered alienable or disposable
lands of the public domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands into
alienable or disposable lands open to disposition is necessary because PEA is
tasked under its charter to undertake public services that require the use of
lands of the public domain. Under Section 5 of PD No. 1084, the functions of
PEA include the following: "[T]o own or operate railroads, tramways and
other kinds of land transportation, x x x; [T]o construct, maintain and
operate such systems of sanitary sewers as may be necessary; [T]o construct,
maintain and operate such storm drains as may be necessary." PEA is
empowered to issue "rules and regulations as may be necessary for the proper
use by private parties of any or all of the highways, roads, utilities, buildings
and/or any of its properties and to impose or collect fees or tolls for their
use." Thus, part of the reclaimed foreshore and submerged lands held by the
PEA would actually be needed for public use or service since many of the
functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be
primarily responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government." The
same section also states that "[A]ll reclamation projects shall be approved by
the President upon recommendation of the PEA, and shall be undertaken by
the PEA or through a proper contract executed by it with any person or
entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A and PD No.
1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain.
EO No. 525 recognized PEA as the government entity "to undertake the
reclamation of lands and ensure their maximum utilization in promoting
public welfare and interests."79 Since large portions of these reclaimed lands
would obviously be needed for public service, there must be a formal
declaration segregating reclaimed lands no longer needed for public service
from those still needed for public service.1âwphi1.nêt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall
belong to or be owned by the PEA," could not automatically operate to
classify inalienable lands into alienable or disposable lands of the public
domain. Otherwise, reclaimed foreshore and submerged lands of the public
domain would automatically become alienable once reclaimed by PEA,
whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084
or EO No. 525, vests in the Department of Environment and Natural
Resources ("DENR" for brevity) the following powers and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and
disposable public lands, mineral resources and, in the process of exercising
such control, impose appropriate taxes, fees, charges, rentals and any such
form of levy and collect such revenues for the exploration, development,
utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning
the development, exploration and utilization of the country's marine,
freshwater, and brackish water and over all aquatic resources of the country
and shall continue to oversee, supervise and police our natural resources;
cancel or cause to cancel such privileges upon failure, non-compliance or
violations of any regulation, order, and for all other causes which are in
furtherance of the conservation of natural resources and supportive of the
national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all
lands of the public domain and serve as the sole agency responsible for
classification, sub-classification, surveying and titling of lands in consultation
with appropriate agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State,
DENR exercises "supervision and control over alienable and disposable
public lands." DENR also exercises "exclusive jurisdiction on the
management and disposition of all lands of the public domain." Thus, DENR
decides whether areas under water, like foreshore or submerged areas of
Manila Bay, should be reclaimed or not. This means that PEA needs
authorization from DENR before PEA can undertake reclamation projects in
Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of
the public domain. Hence, DENR decides whether reclaimed lands of PEA
should be classified as alienable under Sections 681 and 782 of CA No. 141.
Once DENR decides that the reclaimed lands should be so classified, it then
recommends to the President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public domain open to
disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas
under water, while PEA is vested with the power to undertake the physical
reclamation of areas under water, whether directly or through private
contractors. DENR is also empowered to classify lands of the public domain
into alienable or disposable lands subject to the approval of the President. On
the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable
lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or
submerged areas does not make the reclaimed lands alienable or disposable
lands of the public domain, much less patrimonial lands of PEA. Likewise,
the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA.
Absent two official acts – a classification that these lands are alienable or
disposable and open to disposition and a declaration that these lands are not
needed for public service, lands reclaimed by PEA remain inalienable lands
of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of
the public domain, open to disposition under the Constitution, Title I and
Title III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of
the public domain, the reclaimed lands shall be disposed of in accordance
with CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141,
admits that reclaimed lands transferred to a branch or subdivision of the
government "shall not be alienated, encumbered, or otherwise disposed of in
a manner affecting its title, except when authorized by Congress: x x x."85
(Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following: x
x x."
Page 23 of 36

Thus, the Court concluded that a law is needed to convey any real property
belonging to the Government. The Court declared that -
"It is not for the President to convey real property of the government on his
or her own sole will. Any such conveyance must be authorized and approved
by a law enacted by the Congress. It requires executive and legislative
concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative
authority allowing PEA to sell its reclaimed lands. PD No. 1085, issued on
February 4, 1977, provides that –
"The land reclaimed in the foreshore and offshore area of Manila Bay
pursuant to the contract for the reclamation and construction of the Manila-
Cavite Coastal Road Project between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines dated
November 20, 1973 and/or any other contract or reclamation covering the
same area is hereby transferred, conveyed and assigned to the ownership and
administration of the Public Estates Authority established pursuant to PD
No. 1084; Provided, however, That the rights and interests of the
Construction and Development Corporation of the Philippines pursuant to
the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume
the obligations of the Republic of the Philippines (Department of Public
Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development
Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an issued value of said
shares of stock (which) shall be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public
Estates Authority shall execute such contracts or agreements, including
appropriate agreements with the Construction and Development Corporation
of the Philippines, as may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the
above-mentioned contract. On the basis of such patents, the Land
Registration Commission shall issue the corresponding certificate of
title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979,
provides that -
"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA
which shall be responsible for its administration, development, utilization or
disposition in accordance with the provisions of Presidential Decree No.
1084. Any and all income that the PEA may derive from the sale, lease or use
of reclaimed lands shall be used in accordance with the provisions of
Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for
PEA to sell its reclaimed lands. PD No. 1085 merely transferred "ownership
and administration" of lands reclaimed from Manila Bay to PEA, while EO
No. 525 declared that lands reclaimed by PEA "shall belong to or be owned by
PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed
lands "in accordance with the provisions of Presidential Decree No. 1084,"
the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of
lands x x x owned, managed, controlled and/or operated by the
government."87 (Emphasis supplied) There is, therefore, legislative authority
granted to PEA to sell its lands, whether patrimonial or alienable lands of the
public domain. PEA may sell to private parties its patrimonial properties in
accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of
the public domain does not apply to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any
statutory prohibition against such sales and the constitutional ban does not
apply to individuals. PEA, however, cannot sell any of its alienable or
disposable lands of the public domain to private corporations since Section 3,
Article XII of the 1987 Constitution expressly prohibits such sales. The
legislative authority benefits only individuals. Private corporations remain
barred from acquiring any kind of alienable land of the public domain,
including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands
could be transferred by PEA to the "contractor or his assignees" (Emphasis
supplied) would not apply to private corporations but only to individuals
because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable
lands open to disposition, and further declared no longer needed for public
service, PEA would have to conduct a public bidding in selling or leasing
these lands. PEA must observe the provisions of Sections 63 and 67 of CA No.
141 requiring public auction, in the absence of a law exempting PEA from
holding a public auction.88 Special Patent No. 3517 expressly states that the
patent is issued by authority of the Constitution and PD No. 1084,
"supplemented by Commonwealth Act No. 141, as amended." This is an
acknowledgment that the provisions of CA No. 141 apply to the disposition of
reclaimed alienable lands of the public domain unless otherwise provided by
law. Executive Order No. 654,89 which authorizes PEA "to determine the
kind and manner of payment for the transfer" of its assets and properties,
does not exempt PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment, whether in kind and
in installment, but does not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the
Government Auditing Code, the government is required to sell valuable
government property through public bidding. Section 79 of PD No. 1445
mandates that –
"Section 79. 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 unsaleable, 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 award or similar body in
the presence of the auditor concerned or other 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."
It is only when the public auction fails that a negotiated sale is allowed, in
which case the Commission on Audit must approve the selling price.90 The
Commission on Audit implements Section 79 of the Government Auditing
Code through Circular No. 89-29691 dated January 27, 1989. This circular
emphasizes that government assets must be disposed of only through public
auction, and a negotiated sale can be resorted to only in case of "failure of
public auction."
At the public auction sale, only Philippine citizens are qualified to bid for
PEA's reclaimed foreshore and submerged alienable lands of the public
domain. Private corporations are barred from bidding at the auction sale of
any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on
December 10, 1991. PEA imposed a condition that the winning bidder should
reclaim another 250 hectares of submerged areas to regularize the shape of
the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas
in favor of the winning bidder.92 No one, however, submitted a bid. On
December 23, 1994, the Government Corporate Counsel advised PEA it could
sell the Freedom Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the Freedom
Islands and the additional 250 hectares still to be reclaimed, it also granted
an option to AMARI to reclaim another 350 hectares. The original JVA, a
negotiated contract, enlarged the reclamation area to 750 hectares.94 The
failure of public bidding on December 10, 1991, involving only 407.84
hectares,95 is not a valid justification for a negotiated sale of 750 hectares,
almost double the area publicly auctioned. Besides, the failure of public
bidding happened on December 10, 1991, more than three years before the
signing of the original JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening period.
Page 24 of 36

Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987
Constitution is absolute and clear: "Private corporations or associations may
not hold such alienable lands of the public domain except by lease, x x x."
Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and
AMARI as legislative authority to sell reclaimed lands to private parties,
recognizes the constitutional ban. Section 6 of RA No. 6957 states –
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-
operate-and-transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent x x x may likewise be repaid in
the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of
the reclaimed land, subject to the constitutional requirements with respect to
the ownership of the land: x x x." (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the
public domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and
AMARI, authorizes local governments in land reclamation projects to pay the
contractor or developer in kind consisting of a percentage of the reclaimed
land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and
Management of Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the
repayment plan may consist of the grant of a portion or percentage of the
reclaimed land or the industrial estate constructed."
Although Section 302 of the Local Government Code does not contain a
proviso similar to that of the BOT Law, the constitutional restrictions on land
ownership automatically apply even though not expressly mentioned in the
Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the
contractor or developer, if a corporate entity, can only be paid with
leaseholds on portions of the reclaimed land. If the contractor or developer is
an individual, portions of the reclaimed land, not exceeding 12 hectares96 of
non-agricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these
provisions of the BOT Law and the Local Government Code can avoid a direct
collision with Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the
reclaimed lands to public respondent PEA transformed such lands of the
public domain to private lands." This theory is echoed by AMARI which
maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain
and converts the property into patrimonial or private property." In short,
PEA and AMARI contend that with the issuance of Special Patent No. 3517
and the corresponding certificates of titles, the 157.84 hectares comprising
the Freedom Islands have become private lands of PEA. In support of their
theory, PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
"Once the patent was granted and the corresponding certificate of title was
issued, the land ceased to be part of the public domain and became private
property over which the Director of Lands has neither control nor
jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared -
"After the registration and issuance of the certificate and duplicate certificate
of title based on a public land patent, the land covered thereby automatically
comes under the operation of Republic Act 496 subject to all the safeguards
provided therein."3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,99
where the Court ruled -
"While the Director of Lands has the power to review homestead patents, he
may do so only so long as the land remains part of the public domain and
continues to be under his exclusive control; but once the patent is registered
and a certificate of title is issued, the land ceases to be part of the public
domain and becomes private property over which the Director of Lands has
neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court held –
"When the lots in dispute were certified as disposable on May 19, 1971, and
free patents were issued covering the same in favor of the private
respondents, the said lots ceased to be part of the public domain and,
therefore, the Director of Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the Court stated –
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay
legally effected a land grant to the Mindanao Medical Center, Bureau of
Medical Services, Department of Health, of the whole lot, validly sufficient
for initial registration under the Land Registration Act. Such land grant is
constitutive of a 'fee simple' title or absolute title in favor of petitioner
Mindanao Medical Center. Thus, Section 122 of the Act, which governs the
registration of grants or patents involving public lands, provides that
'Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this
Act (Land Registration Act, Act 496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private
lands or that upon issuance of the certificate of title the land automatically
comes under the Torrens System. The fifth case cited involves the registration
under the Torrens System of a 12.8-hectare public land granted by the
National Government to Mindanao Medical Center, a government unit under
the Department of Health. The National Government transferred the 12.8-
hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The
Court affirmed the registration of the 12.8-hectare public land in the name of
Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is
an example of a public land being registered under Act No. 496 without the
land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in
the name of PEA, a wholly government owned corporation performing public
as well as proprietary functions. No patent or certificate of title has been
issued to any private party. No one is asking the Director of Lands to cancel
PEA's patent or certificates of title. In fact, the thrust of the instant petition is
that PEA's certificates of title should remain with PEA, and the land covered
by these certificates, being alienable lands of the public domain, should not
be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the
registrant private or public ownership of the land. Registration is not a mode
of acquiring ownership but is merely evidence of ownership previously
conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the
registrant had prior to the registration.102 The registration of lands of the
public domain under the Torrens system, by itself, cannot convert public
lands into private lands.103
Jurisprudence holding that upon the grant of the patent or issuance of the
certificate of title the alienable land of the public domain automatically
becomes private land cannot apply to government units and entities like PEA.
The transfer of the Freedom Islands to PEA was made subject to the
provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued
by then President Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the
Philippines and in conformity with the provisions of Presidential Decree No.
1084, supplemented by Commonwealth Act No. 141, as amended, there are
hereby granted and conveyed unto the Public Estates Authority the aforesaid
tracts of land containing a total area of one million nine hundred fifteen
thousand eight hundred ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an integral part
hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters
not covered by PD No. 1084. Section 60 of CA No. 141 prohibits, "except
when authorized by Congress," the sale of alienable lands of the public
domain that are transferred to government units or entities. Section 60 of CA
No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien
affecting title" of the registered land even if not annotated on the certificate
of title.104 Alienable lands of the public domain held by government entities
Page 25 of 36
under Section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their
disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain because of the
constitutional ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with
Section 60 of CA No. 141 does not automatically convert alienable lands of
the public domain into private or patrimonial lands. The alienable lands of
the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands
can become private or patrimonial lands. Otherwise, the constitutional ban
will become illusory if Congress can declare lands of the public domain as
private or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire
directly from government agencies limitless areas of lands which, prior to
such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the
National Government to reclaim foreshore and submerged areas of the public
domain. Thus, EO No. 525 declares that –
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily
Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be
evaluated for consistency with national programs;
Whereas, there is a need to give further institutional support to the
Government's declared policy to provide for a coordinated, economical and
efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas
shall be limited to the National Government or any person authorized by it
under proper contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach in the
reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority
as a government corporation to undertake reclamation of lands and ensure
their maximum utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with
continuing authority to reorganize the national government including the
transfer, abolition, or merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution and
pursuant to Presidential Decree No. 1416, do hereby order and direct the
following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible
for integrating, directing, and coordinating all reclamation projects for and
on behalf of the National Government. All reclamation projects shall be
approved by the President upon recommendation of the PEA, and shall be
undertaken by the PEA or through a proper contract executed by it with any
person or entity; Provided, that, reclamation projects of any national
government agency or entity authorized under its charter shall be undertaken
in consultation with the PEA upon approval of the President.
x x x ."
As the central implementing agency tasked to undertake reclamation projects
nationwide, with authority to sell reclaimed lands, PEA took the place of
DENR as the government agency charged with leasing or selling reclaimed
lands of the public domain. The reclaimed lands being leased or sold by PEA
are not private lands, in the same manner that DENR, when it disposes of
other alienable lands, does not dispose of private lands but alienable lands of
the public domain. Only when qualified private parties acquire these lands
will the lands become private lands. In the hands of the government agency
tasked and authorized to dispose of alienable of disposable lands of the public
domain, these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold lands of the
public domain" as well as "any and all kinds of lands." PEA can hold both
lands of the public domain and private lands. Thus, the mere fact that
alienable lands of the public domain like the Freedom Islands are transferred
to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred
to PEA as private lands will sanction a gross violation of the constitutional
ban on private corporations from acquiring any kind of alienable land of the
public domain. PEA will simply turn around, as PEA has now done under the
Amended JVA, and transfer several hundreds of hectares of these reclaimed
and still to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban in
Section 3, Article XII of the 1987 Constitution which was intended to diffuse
equitably the ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of
the public domain since PEA can "acquire x x x any and all kinds of lands."
This will open the floodgates to corporations and even individuals acquiring
hundreds of hectares of alienable lands of the public domain under the guise
that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country -
creating the very evil that the constitutional ban was designed to prevent.
This will completely reverse the clear direction of constitutional development
in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.105 The 1973
Constitution prohibited private corporations from acquiring any kind of
public land, and the 1987 Constitution has unequivocally reiterated this
prohibition.
The contention of PEA and AMARI that public lands, once registered under
Act No. 496 or PD No. 1529, automatically become private lands is contrary
to existing laws. Several laws authorize lands of the public domain to be
registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and
Section 103 of PD No. 1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x
x x Government of the Philippine Islands are alienated, granted, or conveyed
to persons or the public or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the
Government alienated, granted or conveyed to any person, the same shall be
brought forthwith under the operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in
Section 103 of PD No. 1529 includes conveyances of public lands to public
corporations.
Alienable lands of the public domain "granted, donated, or transferred to a
province, municipality, or branch or subdivision of the Government," as
provided in Section 60 of CA No. 141, may be registered under the Torrens
System pursuant to Section 103 of PD No. 1529. Such registration, however,
is expressly subject to the condition in Section 60 of CA No. 141 that the land
"shall not be alienated, encumbered or otherwise disposed of in a manner
affecting its title, except when authorized by Congress." This provision refers
to government reclaimed, foreshore and marshy lands of the public domain
that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents
the registered land of the public domain from becoming private land that can
be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the
public domain may be registered under the Torrens System. Section 48,
Chapter 12, Book I of the Code states –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for expansion
of a public wharf may be titled in the name of a government corporation
Page 26 of 36
regulating port operations in the country. Private property purchased by the
National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private
property donated to a municipality for use as a town plaza or public school
site may likewise be titled in the name of the municipality.106 All these
properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the de-registration of land
from the Torrens System.
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 generis, not available for sale to private
parties unlike other alienable public lands. Reclaimed lands retain their
inherent potential as areas for public use or public service. Alienable lands of
the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of the public domain.
Those who attempt to dispose of inalienable natural resources of the State, or
seek to circumvent the constitutional ban on alienation of lands of the public
domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands,
now covered by certificates of title in the name of PEA, are alienable lands of
the public domain. PEA may lease these lands to private corporations but
may not sell or transfer ownership of these lands to private corporations.
PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable
natural resources of the public domain until classified as alienable or
disposable lands open to disposition and declared no longer needed for
public service. The government can make such classification and declaration
only after PEA has reclaimed these submerged areas. Only then can these
lands qualify as agricultural lands of the public domain, which are the only
natural resources the government can alienate. In their present state, the
592.15 hectares of submerged areas are inalienable and outside the
commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares110 of the Freedom Islands, such transfer is void
for being contrary to Section 3, Article XII of the 1987 Constitution which
prohibits private corporations from acquiring any kind of alienable land of
the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of
290.156 hectares111 of still submerged areas of Manila Bay, such transfer is
void for being contrary to Section 2, Article XII of the 1987 Constitution
which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas.
Thereafter, the government can classify the reclaimed lands as alienable or
disposable, and further declare them no longer needed for public service.
Still, the transfer of such reclaimed alienable lands of the public domain to
AMARI will be void in view of Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of
the 1987 Constitution. Under Article 1409112 of the Civil Code, contracts
whose "object or purpose is contrary to law," or whose "object is outside the
commerce of men," are "inexistent and void from the beginning." The Court
must perform its duty to defend and uphold the Constitution, and therefore
declares the Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no
necessity to rule on this last issue. Besides, the Court is not a trier of facts,
and this last issue involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and
Amari Coastal Bay Development Corporation are PERMANENTLY
ENJOINED from implementing the Amended Joint Venture Agreement
which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban,
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, and
Corona, JJ., concur.
———————————
G.R. No. 103882 November 25, 1998
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE
CORPORATION, respondents, CULTURAL CENTER OF THE
PHILIPPINES, intervenor.
G.R. No. 105276 November 25, 1998
PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,
vs.
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.
PURISIMA, J.:
At bar are two consolidated petitions for review on certiorari under Rule 45
of the Revised Rules of Court. Here, the Court is confronted with a case
commenced before the then Court of First Instance (now Regional Trial
Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has
spanned six administrations of the Republic and outlasted the tenure of ten
(10) Chief Justices of the Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the
Decision, dated January 29, 1992 and Amended Decision, dated April 28,
1992, of the Court of Appeals1 which affirmed with modification the Decision
of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil
Page 27 of 36
Case No. 2229-P, entitled "Republic of the Philippines vs. Pasay City and
Republic Real Estate Corporation".
The facts that matter are, as follows:
Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957,
authorized the reclamation of foreshore lands by chartered cities and
municipalities. Section I of said law, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered
cities to undertake and carry out at their own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering them, and
to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may
determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.
On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City
Council passed Ordinance No. 121, for the reclamation of Three Hundred
(300) hectares of foreshore lands in Pasay City, empowering the City Mayor
to award and enter into reclamation contracts, and prescribing terms and
conditions therefor. The said Ordinance was amended on April 21, 1959 by
Ordinance No. 158, which authorized the Republic Real Estate Corporation
("RREC") to reclaim foreshore lands of Pasay City under certain terms and
conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement 2 for the
reclamation of the foreshore lands in Pasay City.
On December 19, 1961, the Republic of the Philippines ("Republic") filed a
Complaint 3 for Recovery of Possession and Damages with Writ of
Preliminary Preventive injunction and Mandatory Injunction, docketed as
Civil Case No. 2229-P before the former Court of First Instance of Rizal,
(Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines filed an Amended
Complaint 4 questioning subject Agreement between Pasay City and RREC
(Exhibit "P") on the grounds that the subject-matter of such Agreement is
outside the commerce of man, that its terms and conditions are violative of
RA 1899, and that the said Agreement was executed without any public
bidding.
The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962,
respectively, averred that the subject-matter of said Agreement is within the
commerce of man, that the phrase "foreshore lands" within the
contemplation of RA 1899 has a broader meaning than the cited definition of
the term in the Words and Phrases and in the Webster's Third New
International Dictionary and the plans and specifications of the reclamation
involved were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former
Court of First Instance of Rizal (Branch 7, Pasay City) issued an Order6 the
dispositive portion of which was to the following effect:
WHEREFORE, the court hereby orders the defendants, their agents, and all
persons claiming under them, to refrain from "further reclaiming or
committing acts of dispossession or dispoilation over any area within the
Manila Bay or the Manila Bay Beach Resort", until further orders of the
court.
On the following day, the same trial court issued a writ of preliminary
injunction 7 which enjoined the defendants, RREC and Pasay City, their
agents, and all persons claiming under them "from further reclaiming or
committing acts of dispossession."
Thereafter, a Motion to Intervene8, dated June 27, 1962, was filed by Jose L.
Bautista, Emiliano Custodio, Renato Custodio, Roger de la Rosa, Belen
Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R. Parreno, Antolin M.
Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora
Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan
Distributors of the Philippines, and Bayview Hotel, Inc. stating inter alia that
they were buyers of lots in the Manila Bay area being reclaimed by RREC,
whose rights would be affected by whatever decision to be rendered in the
case. The Motion was granted by the trial court and the Answer attached
thereto admitted.9
The defendants and the intervenors then moved to dismiss 10 the Complaint
of the Republic, placing reliance on Section 3 of Republic Act No. 5187, which
reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from
the south boundary of the City of Manila to Cavite City, to the south, and
from the north boundary of the City of Manila to the municipality of
Mariveles, province of Bataan, to the north, including the reclamation of the
foreshore and submerged areas: Provided, That priority in the construction
of such seawalls, highway and attendant reclamation works shall be given to
any corporation and/or corporations that may offer to undertake at its own
expense such projects, in which case the President of the Philippines may,
after competitive didding, award contracts for the construction of such
project, with the winning bidder shouldering all costs thereof, the same to be
paid in terms of percentage fee of the contractor which shall not exceed fifty
percent of the area reclaimed by the contractor and shall represent full
compensation for the purpose, the provisions of the Public Land Law
concerning disposition of reclaimed and foreshore lands to the contrary
notwithstanding: Provided, finally, that the foregoing provisions and those of
other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or
municipal governments for the reclamation of foreshore and submerged
lands shall be respected. . . . . (emphasis ours).
Since the aforecited law provides that existing contracts shall be respected,
movants contended that the issues raised by the pleadings have become
"moot, academic and of no further validity or effect."
Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to
intervene 11, alleging as legal interest in the matter in litigation the avowed
purpose of the organization for the promotion of good government in Pasay
City. In its Order of June 10, 1969, the lower court of origin allowed the said
intervention 12.
On March 24, 1972, the trial court of origin came out with a Decision,
disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint, (2) the
first Amended Complaint, (3) the Answer of Defendant Republic Real Estate
Corporation to the first Amended Complaint, (4) the Answer of Defendant
Pasay City to the first Amended Complaint, (5) the Second Amended
Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to
the Second Amended Complaint, (7) the Answer of Defendant Pasay City to
the Second Amended Complaint, (8) the Memorandum in Support of
Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the
Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City
and Defendant Republic Real Estate Corporation, (10) the Answer in
Intervention of Intervenors Bautista, et. al., (11) Plaintiff's Opposition to
Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of
Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties,
(14) the Motion for Leave to Intervene of Intervenor Pasay Law and
Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene
of Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and
Conscience Union, Inc., (17) the Supplement to Opposition to Motion to
Intervene of Defendant Pasay City and Republic Real Estate Corporation (18)
the Complain in Intervention of Intervenor Pasay Law and Conscience
Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation,
(20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in
Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate
Corporation, and Intervenors Bautista, et. al., (22) the Opposition of Plaintiff
to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and
Conscience Union, Inc., (24) the Memorandum of the Defendant Republic
Real Estate Corporation, (25) the Memorandum for the Intervenor Pasay
Law and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by
the Office of the Solicitor General, and all the documentary evidence by the
parties to wit: (a) Plaintiff's Exhibits "A" to "YYY- 4", (b) Defendant Republic
Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c) Intervenor
Pasay Law and Conscience Union, Inc's., Exhibits "A-PLACU" to "C-PLACU",
the Court hereby:
(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by
Defendant Republic Real Estate Corporation and Intervenors Bautista, et. al.,
as it is the finding of this Court that Republic Act No. 5187 was not passed by
Congress to cure any defect in the ordinance and agreement in question and
that the passage of said Republic Act No. 5187 did not make the legal issues
raised in the pleadings "moot, academic and of no further validity or effect;"
and
(2) Renders judgment:
(a) dismissing the Plaintiff's Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law
and Conscience Union, Inc.,
Page 28 of 36

(c) Enjoining Defendant Republic Real Estate Corporation and
Defendant Pasay City to have all the plans and specifications in the
reclamation approved by the Director of Public Works and to have all the
contracts and sub-contracts for said reclamation awarded by means of, and
only after, public bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26,
1962, as soon as Defendant Republic Real Estate Corporation and Defendant
Pasay City shall have submitted the corresponding plans and specifications to
the Director of Public Works, and shall have obtained approval thereof, and
as soon as the corresponding public bidding for the award to the contractor
and sub-contractor that will undertake the reclamation project shall have
been effected.
No pronouncement as to costs.
SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp.
6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the
Court of Appeals. However, on January 11, 1973, before the appeal could be
resolved, Presidential Decree No. 3-A issued, amending Presidential Decree
No. 3, thus:
Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972,
is hereby amended by the addition of the following paragraphs:
The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the
National Government or any person authorized by it under a proper contract.
All reclamations made in violation of this provision shall be forfeited to the
State without need of judicial action.
Contracts for reclamation still legally existing or whose validity has been
accepted by the National Government shall be taken over by the National
Government on the basis of quantum meruit, for proper prosecution of the
project involved by administration.
On November 20, 1973, the Republic and the Construction Development
Corporation of the Philippines ("CDCP") signed a Contract13 for the Manila-
Cavite Coastal Road Project (Phases I and II) which contract included the
reclamation and development of areas covered by the Agreement between
Pasay City and RREC. Then, there was issued Presidential Decree No. 1085
which transferred to the Public Estate Authority ("PEA") the rights and
obligations of the Republic of the Philippines under the contract between the
Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the
Republic, on the one hand, and those of Pasay City and RREC, on the other,
did not work out. The parties involved failed to hammer out a compromise.
On January 28, 1992, the Court of Appeals came out with a Decision 14
dismissing the appeal of the Republic and holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the
following modifications:
1. The requirement by the trial court on public bidding and
submission of RREC's plans specification to the Department Public Works
and Highways in order that RREC may continue the implementation of the
reclamation work is deleted for being moot and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the
ownership and possession over all vacant spaces in the twenty-one hectare
area already reclaimed by Pasay City and RREC at the time it took over the
same. Areas thereat over which permanent structures has (sic) been
introduced shall, including the structures, remain in the possession of the
present possessor, subject to any negotiation between Pasay City and the said
present possessor, as regards the continued possession and ownership of the
latter area.
3. Sustaining RREC's irrevocable option to purchase sixty (60%)
percent of the Twenty-One (21) hectares of land already reclaimed by it, to be
exercised within one (1) year from the finality of this decision, at the same
terms and condition embodied in the Pasay City-RREC reclamation contract,
and enjoining appellee Pasay City to respect RREC's option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for
Reconsideration of such Decision of the Court of Appeals, contending, among
others, that RREC had actually reclaimed Fifty-Five (55) hectares, and not
only Twenty-one (21) hectares, and the respondent Court of Appeals erred in
not awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion
for Reconsideration, by amending the dispositive portion of its judgment of
January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated January 28,
1992 is hereby AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the
submission of the RREC's plans and specification to the Department of
Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and
academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the
ownership and possession of the above enumerated lots (1 to 9).
3. Sustaining RREC's irrevocable option to purchase sixty (60%)
percent of the land referred to in No. 2 of this dispositive portion, to be
exercised within one (1) year from the finality of this Decision, at the same
terms and condition embodied in the Pasay City-RREC reclamation contract,
and enjoining Pasay City to respect RREC's irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals
aforementioned, the Republic of the Philippines, as well as Pasay City and
RREC, have come to this Court to seek relief, albeit with different prayers.
On September 10, 1997, the Court commissioned the former thirteenth
Division of Court of Appeals to hear and receive evidence on the controversy.
The corresponding Commissioner's Report, dated November 25, 1997, was
submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a
Petition in Intervention, theorizing that it has a direct interest in the case
being the owner of subject nine (9) lots titled in its (CCP) name, which the
respondent Court of Appeals ordered to be turned over to Pasay City. The
CCP, as such intervenor, was allowed to present its evidence, as it did, before
the Court of Appeals, which evidence has been considered in the formulation
of this disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of
assignment of errors, that:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF
PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE
RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY CITY
AND RREC;
II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD
RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER TO
PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9) LOTS
TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:
I
THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL
DECREE NO. 3-A UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN
FAVOR OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158
dated April 21, 1959 and the Agreement dated April 24, 1959 between Pasay
City and RREC, we rule in the negative.
Page 29 of 36
Sec. 1 of RA 1899, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered
cities to undertake and carry out at their own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering them, and
to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may
determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there
are no foreshore lands along the seaside of Pasay City 15; that what Pasay
City has are submerged or offshore areas outside the commerce of man which
could not be a proper subject matter of the Agreement between Pasay City
and RREC in question as the area affected is within the National Park, known
as Manila Bay Beach Resort, established under Proclamation No. 41, dated
July 5, 1954, pursuant to Act No. 3915, of which area it (Republic) has been in
open, continuous and peaceful possession since time immemorial.
Petitioner faults the respondent court for unduly expanding what may be
considered "foreshore land" through the following disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a request for
an opinion from the then Secretary of Public Works and Communications as
to whether the term, "foreshore areas" as used in Section I of the immediately
aforequoted law is that defined in Webster's Dictionary and the Law of
Waters so as to make any dredging or filling beyond its prescribed limit
illegal, opined:
According to the basic letter of the Director of Public Works, the law of
Waters speaks of "shore" and defines it thus: "that space movement of the
tide. Its interior or terrestrial limit in the line reached by highest equinoctial
tides."
Webster's definition of foreshore reads as follows:
That part of the shore between high water and low-water marks usually fixed
at the line to which the ordinary means tide flows: also, by extension, the
beach, the shore near the water's edge.
If we were to be strictly literal the term foreshore or foreshore lands should
be confined to but a portion of the shore, in itself a very limited area. (p. 6,
Intervenors-appellees' brief).
Bearing in mind the (Webster's and Law of Waters) definitions of "shore" and
of foreshore lands, one is struck with the apparent inconsistency between the
areas thus described and the purpose to which that area, when reclaimed
under the provision of Republic Act No. 1899, shall be devoted. Section I (of
said Law) authorizes the construction thereat of "adequate docking and
harbor facilities". This purpose is repeated in Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend only from
10 to 20 meters along the coast. Not very much more if at all. In fact certain
parts in Manila bordering on Manila Bay, has no foreshore to speak of since
the sea washes the sea wall.
It does not seem logical, then, that Congress had in mind. Webster's limited
concept of foreshore when it enacted Republic Act No. 1899, unless it intends
that the wharves, piers, docks, etc. should be constructed parallel to the
shore, which is impractical.
Since it is to be presumed that Congress could not have intended to enact an
ineffectual measure not one that would lead to absurd consequences, it would
seem that it used "foreshore" in a sense wider in scope that defined by
Webster. . . .
To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant
could not offer any refutation or contrary opinion. Neither can we. In fact, the
above construction is consistent with the "rule on context" in statutory
construction which provides that in construing a statute, the same must be
construed as a whole. The particular words, clauses and phrases should not
be studied as detached and isolated expressions, but the whole and every part
of the statute must be considered in fixing the meaning of any of its parts in
order to produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil.
709). There are two reasons for this. Firstly, the force and significance of
particular expressions will largely depend upon the connection in which they
are found and their relation to the general subject-matter of the law. The
legislature must be understood to have expressed its whole mind on the
special object to which the legislative act is directed but the vehicle for the
expressions of that meaning is the statute, considered as one entire and
continuous act, and not as an agglomeration of unrelated clauses. Each
clause or provision will be illuminated by those which are cognate to it and by
the general tenor of the whole statute and thus obscurities end ambiguities
may often be cleared up by the most direct and natural means. Secondly
effect must be given, if it is possible, to every word and clause of the statute,
so that nothing shall be left devoid of meaning or destitute of force. To this
end, each provision of the statute should be read in the light of the whole. For
the general meaning of the legislature, as gathered from the entire act, may
often prevail over the construction which would appear to be the most
natural and obvious on the face of a particular clause. If is by this means that
contradiction and repugnance between the different parts of the statute may
be avoided. (See Black, Interpretation of Laws, 2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the "Explanatory Note" to House Bill No. 3830,
which was subsequently enacted as Republic Act No. 1899, reads:
In order to develop and expand the Maritime Commerce of the Philippines, it
is necessary that harbor facilities be correspondingly improved and, where
necessary, expanded and developed. The national government is not in a
financial position to handle all this work. On the other hand, with a greater
autonomy many chartered cities and provinces are financially able to have
credit position which will allow them to undertake these projects. Some
cities, such as the City of Bacolod under R.A. 161, has been authorized to
reclaim foreshore lands bordering it.
Other cities end provinces have continuously been requesting for authority to
reclaim foreshore lands on the basis of the Bacolod City pattern, and to
undertake work to establish, construct on the reclaimed area and maintain
such port facilities as may be necessary. In order not to unduly delay the
undertaking of these projects, and inorder to obviate the passage of
individual pieces of legislation for every chartered city and province, it is
hereby recommended that the accompanying bill be approved. It covers
Authority for All chartered cities and provinces to undertake this work. . . .
(emphasis supplied)
Utilizing the above explanatory note in interpreting and construing the
provisions of R.A. 1899, then Secretary of Justice Mabanag opined:
It is clear that the "Bacolod City pattern" was the basis of the enactment of
the aforementioned bill of general application. This so-called "Bacolod City
pattern" appears to be composed of 3 parts, namely: Republic Ad No. 161,
which grants authority to Bacolod City to undertake or carry out . . . the
reclamation . . . of any [sic] carry out the reclamation project conformably
with Republic Act No. 161; and Republic Act No. 1132 authorizing Bacolod
City to contract indebtedness or to issue bonds in the amount not exceeding
six million pesos to finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the precise space therein
referred to as "foreshore" lands, but it provided that docking and harbor
facilities should be erected on the reclaimed portions thereof, while not
conclusive would indicate that Congress used the word "foreshore" in its
broadest sense. Significantly, the plan of reclamation of foreshore drawn up
by the Bureau of Public Works maps out an area of approximately 1,600,000
square meters, the boundaries of which clearly extend way beyond Webster's
limited concept of the term "foreshore". As a contemporaneous construction
by that branch of the Government empowered to oversee at least, the conduct
of the work, such an interpretation deserves great weight. Finally, Congress
in enacting Republic Act No. 1132 (supplement to RA 161), tacitly confirmed
and approved the Bureau's interpretation of the term 'foreshore' when
instead of taking the occasion to correct the Bureau of over extending its
plan, it authorized the city of Bacolod to raise the full estimated cost of
reclaiming the total area covered by the plan. The explanatory note to House
Bill No. 1249 which became Republic Act No. 1132 states among the things:
The Bureau of Public Works already prepared a plan for the reclamation of
about 1,600,000 square meters of land at an estimated costs of about
P6,000,000.00. The project is self-supporting because the proceeds from the
sales or leases of lands so reclaimed will be more than sufficient to cover the
cost of the project.
Consequently, when Congress passed Republic Act No. 1899 in order to
facilitate the reclamation by local governments of foreshore lands on the
basis of the Bacolod City pattern and in order to obviate the passage of
individual pieces of legislation for every chartered city and provinces
requesting authority to undertake such projects, the lawmaking body could
not have had in mind the limited area described by Webster as "foreshore"
lands. . . . .
If it was really the intention of Congress to limit the area to the strict literal
meaning of "foreshore" lands which may be reclaimed by chartered cities and
municipalities, Congress would have excluded the cities of Manila, Iloilo,
Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by
Senator Cuenco during the deliberation of the bill considering that these
cities do not have 'foreshore' lands in the strict meaning of the term. Yet,
Page 30 of 36
Congress did not approve the proposed amendment of Senator Cuenco,
implying therefore, that Congress intended not to limit the area that may be
reclaimed to the strict definition of "foreshore" lands.
The opinion of the then Secretary of Justice Mabanag, who was at that time
the chief law officer and legal adviser of the government and whose office is
required by law to issue opinions for the guidance of the various departments
of the government, there being then no judicial interpretation to the contrary,
is entitled to respect (see Bengzon vs. Secretary of Justice and Insular
Auditor, 68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated February 3,
1965 in Ponce vs. Gomez (L-21870) and Ponce vs. City of Cebu (L-2266), by a
unanimous vote of six (6) justices (the other five (5) members deemed it
unnecessary to express their view because in their opinion the questions
raised were not properly brought before the court), which in essence applied
the strict dictionary meaning of "foreshore lands" as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the then
Secretary of Justice Mabanag rendered the above opinion on November 16,
1959 and long after RREC has started the subject reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme Court
issued the aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said
law, Congress appropriated money "for the construction of the seawall and
limited access highway from the South boundary of the city of Manila to
Cavite City, to the South, and from the North boundary of the city of Manila
to the municipality of Mariveles, province of Bataan, to the North (including
the reclamation of foreshore and submerged areas . . . provided . . . that . . .
existing projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected . . ." This is
a clear manifestation that Congress in enacting RA 1899, did not intend to
limit the interpretation of the term "foreshore land" to its dictionary
meaning.
It is presumed that the legislature was acquainted with and had in mind the
judicial construction given to a former statute on the subject, and that the
statute on the subject, and that the statute was enacted having in mind the
judicial construction that the prior enactment had received, or in the light of
such existing judicial decisions as have direct bearing upon it (see 50 Am.
Jur., Sec. 321, pp. 312-313). But notwithstanding said interpretation by the
Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law
covering the same areas previously embraced in a RA 1899 (as mentioned
earlier, cities without foreshore lands which were sought to be excluded from
the operation of RA 1899 were not excluded), providing that respect be given
the reclamation of not only foreshore lands but also of submerged lands
signifying its non-conformity to the judicial construction given to RA 1899. If
Congress was in accord with the interpretation and construction made by the
Supreme Court on RA 1899, it would have mentioned reclamation of
"foreshore lands" only in RA 5187, but Congress included "submerged lands"
in order to clarify the intention on the grant of authority to cities and
municipalities in the reclamation of lands bordering them as provided in RA
1899. It is, therefore, our opinion that it is actually the intention of Congress
in RA 1899 not to limit the authority granted to cities and municipalities to
reclaim foreshore lands in its strict dictionary meaning but rather in its wider
scope as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent
court that under RA 1899, the term "foreshore lands" includes submerged
areas. As can be gleaned from its disquisition and rationalization
aforequoted, the respondent court unduly stretched and broadened the
meaning of "foreshore lands", beyond the intentment of the law, and against
the recognized legal connotation of "foreshore lands". Well entrenched, to the
point of being elementary, is the rule that when the law speaks in clear and
categorical language, there is no reason for interpretation or construction,
but only for application. 16 So also, resort to extrinsic aids, like the records of
the constitutional convention, is unwarranted, the language of the law being
plain and unambiguous. 17 Then, too, opinions of the Secretary of Justice are
unavailing to supplant or rectify any mistake or omission in the law. 18 To
repeat, the term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks and that is
alternately wet and dry according to the flow of the tide. (Words and Phrases,
"Foreshore")
A strip of land margining a body of water (as a lake or stream); the part of a
seashore between the low-water line usually at the seaward margin of a low-
tide terrace and the upper limit of wave wash at high tide usually marked by a
beach scarp or berm. (Webster's Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing,
we cannot broaden its meaning, much less widen the coverage thereof. If the
intention of Congress were to include submerged areas, it should have
provided expressly. That Congress did not so provide could only signify the
exclusion of submerged areas from the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this Court
dated February 3, 1965 in Ponce v. Gomez (L-21870) and Ponce v. City of
Cebu (L-22669) despite the enactment of Republic Act No. 5187 ("RA 5187"),
the relevant portion of which, reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from
the south boundary of the City of Manila to Cavite City, to the south, and
from the north boundary of the City of Manila to the municipality of
Mariveles, province of Bataan, to the north, including the reclamation of the
foreshore and submerged areas: Provided, That priority in the construction
of such seawalls, highway and attendant reclamation works shell be given to
any corporation and/or corporations that may offer to undertake at its own
expense such projects, in which case the President of the Philippines may,
after competitive bidding, award contracts for the construction of such
projects, with the winning bidder shouldering all costs thereof, the same to be
paid in terms of percentage fee of the contractor which shall not exceed fifty
percent of the area reclaimed by the contractor and shall represent full
compensation for the purpose, the provisions of the Public Land Law
concerning disposition of reclaimed and foreshore lands to the contrary
notwithstanding: Provided, finally, that the foregoing provisions and those of
other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or
municipal governments for the reclamation of foreshore and submerged
lands shall be respected. . . . .
There is nothing in the foregoing provision of RA 5187 which can be
interpreted to broaden the scope of "foreshore lands." The said law is not
amendatory to RA 1899. It is an Appropriations Act, entitled — "AN ACT
APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE
SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."
All things viewed in proper perspective, we reiterate what was said in Ponce
v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) that the term
"foreshore" refers to "that part of the land adjacent to the sea which is
alternately covered and left dry by the ordinary flow of the tides." As opined
by this Court in said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo,
Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that said city
ordinance and contracts are ultra vires and hence, null and void, insofar as
the remaining 60% of the area aforementioned, because the term "foreshore
lands" as used in Republic Act No. 1899 should be understood in the sense
attached thereto by common parlance; (emphasis ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio
Teehankee, in his opinion dated December 22, 1966, in a case with analogous
facts as the present one, to wit:
December 22, 1966
The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx xxx xxx
I. Facts —
1. On January 19, 1961, pursuant to the provisions of Republic Act
No. 1899, the Municipality of Navotas enacted Ordinance No. 1 authorizing
the Municipal Mayor to enter into a reclamation contract with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded between
the Municipality of Navotas, represented by the Municipal Mayor, and Mr.
Chuanico in accordance with the above ordinance. Thereunder, Mr. Chuanico
shall be the attorney-in-fact of the Municipality in prosecuting the
reclamation project and shall advance the money needed therefor; that the
actual expenses incurred shall be deemed a loan to the Municipality; that Mr.
Page 31 of 36
Chuanico shall have the irrevocable option to buy 70% of the reclaimed area
at P7.00 per square meter; that he shall have the full and irrevocable powers
to do any and all things necessary and proper in and about the premises,"
including the power to hire necessary personnel for the prosecution of the
work, purchase materials and supplies, and purchase or lease construction
machineries and equipment, but any and all contracts to be concluded by him
in behalf of the Municipality shall be submitted to public bidding.
xxx xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed
Resolution No. 22 approving and ratifying the contract.
xxx xxx xxx
III. Comments —
1. The above reclamation contract was concluded on the basis of
Navotas Ordinance No. 1 which, in turn, had been enacted avowedly
pursuant to Republic Act No. 1899. This being so, the contract, in order to be
valid, must conform to the provisions of the said law.
By authorizing local governments "to execute by administration any
reclamation work," (Republic Act No. 1899 impliedly forbids the execution of
said project by contract. Thus, in the case or Ponce et al. vs. Gomez (February
3, 1966), five justices of the Supreme Court voted to annul the contract
between Cebu Development Corporation and Cebu City for the reclamation of
foreshore lands because "the provisions of said . . . contract are not . . . in
accordance with the provisions of Republic Act No. 1899," as against one
Justice who opined that the contract substantially complied with the
provisions of the said law. (Five Justices expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar to the
Cebu reclamation contract, it is believed that the former is likewise fatally
defective.
2. The Navotas reclamation project envisages the construction of a
channel along the Manila Bay periphery of that town and the reclamation of
approximately 650 hectares of land from said channel to a seaward distance
of one kilometer. In the basic letter it is stated that "practically, all the 650
hectares of lands proposed to be reclaimed under the agreement" do not
constitute foreshore lands and that "the greater portion of the area . . . is in
fact navigable and presently being used as a fishing harbor by deep-sea
fishing operators as well as a fishing ground of sustenance fisherman.
Assuming the correctness of these averments, the Navotas reclamation
contract evidently transcends the authority granted under Republic Act No.
1899, which empowers the local governments to reclaim nothing more than
"foreshore lands, i.e., "that part of the land adjacent to the see which is
alternately covered and left dry by the ordinary flow of the tides." (26 C.J.
890.) It was for this reason that in the cited case Ponce case, the Supreme
Court, by a vote of 6-0 with five Justices abstaining, declared ultra vires and
void the contractual stipulation for the reclamation of submerged lands off
Cebu City, and permanently enjoined its execution under Republic Act No.
1899.
xxx xxx xxx
In accordance with the foregoing, I have the honor to submit the view that
the Navotas reclamation contract is not binding and should be disregarded
for non-compliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became Associate
Justice, and later Chief Justice, of this Court, did, in our considered view,
supersede the earlier opinion of former justice Secretary Alejo Mabanag,
aforestated, as the cases, in connection with which subject opinions were
sought, were with similar facts. The said Teehankee opinion accords with RA
1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as
amended by Ordinance No. 158, and the Agreement under attack, have been
found to be outside the intendment and scope of RA 1899, and therefore ultra
vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a
public bidding.
Obviously, there is a complete dearth of evidence to prove that RREC had
really reclaimed 55 hectares. The letter of Minister Baltazar Aquino relied
upon by RREC is no proof at all that RREC had reclaimed 55 hectares. Said
letter was just referring to a tentative schedule of work to be done by RREC,
even as it required RREC to submit the pertinent papers to show its supposed
accomplishment, to secure approval by the Ministry of Public Works and
Highways to the reclamation plan, and to submit to a public bidding all
contracts and sub-contracts for subject reclamation project but RREC never
complied with such requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or
specifications of the reclamation project were presented to reflect any
accomplishment. Not even any statement or itemization of works
accomplished by contractors or subcontractors or vouchers and other
relevant papers were introduced to describe the extent of RREC's
accomplishment. Neither was the requisite certification from the City
Engineer concerned that "portions of the reclamation project not less than 50
hectares in area shall have been accomplished or completed" obtained and
presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by
RREC, and extent thereof, as of April 26, 1962. Not a single contractor, sub-
contractor, engineer, surveyor, or any other witness involved in the alleged
reclamation work of RREC testified on the 55 hectares supposedly reclaimed
by RREC. What work was done, who did the work, where was it commenced,
and when was it completed, was never brought to light by any witness before
the court. Certainly, onus probandi was on RREC and Pasay City to show and
point out the as yet unidentified 55 hectares they allegedly reclaimed. But
this burden of proof RREC and Pasay City miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the
complaint of plaintiff-appellant, now petitioner Republic of the Philippines,
the lifting of the writ of Preliminary Injunction issued on April 26, 1962
would become effective only "as soon as Defendant Republic Real Estate
Corporation and Defendant Pasay City shall have submitted the
corresponding plans and specifications to the Director of Public Work, and
shall have obtained approval thereof, and as soon as corresponding public
bidding for the award to the contractor and sub-contractor that will
undertake the reclamation project shall have been effected." (Rollo, pp.
127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City
never complied with such prerequisites for the lifting of the writ of
Preliminary Injunction. Consequently, RREC had no authority to resume its
reclamation work which was stopped by said writ of preliminary injunction
issued on April 26, 1962.
From the Contract for Dredging Work, dated November 26, 1960, marked
Exhibit "21-A" for RREC before the lower court, and Exhibit "EE" for CCP
before the Court of Appeals, it can be deduced that only on November 26,
1960 did RREC contract out the dredging work to C and A Construction
Company, Inc., for the reclamation of the 55 hectares initially programmed to
be reclaimed by it. But, as stated by RREC itself in the position paper filed
with this Court on July 15, 1997, with reference to CDCP's reclamation work,
mobilization of the reclamation team would take one year before a
reclamation work could actually begin. Therefore, the reclamation work
undertaker by RREC could not have started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any
further with its reclamation work, it had barely five (5) months, from
November, 1961 to April, 1962, to work on subject reclamation project. It was
thus physically impossible for RREC to reclaim 55 hectares, with the
stipulated specifications and elevation, in such a brief span of time. In the
report of RREC (Exhibit "DD" for CCP), it was conceded that due to the writ
of preliminary injunction issued on April 26, 1962, C and A Construction Co.,
Inc. had suspended its dredging operation since May, 1962.
The "graphical report" on the Pasay Reclamation project, as of April 30, 1962,
attached to the Progress Report marked Exhibit "DD", is a schematic
representation of the work accomplishment referred to in such Progress
Report, indicating the various elevations of the land surface it embraced,
ranging from 0.00 meters to the highest elevation of 2.5 meters above
MLLW. Such portrayal of work accomplished is crucial in our determination
of whether or not RREC had actually "reclaimed" any land as under its
Contract for Dredging Work with C and A Construction Company (Exhibit
"EE", the required final elevation for a completely reclaimed land was 3.5
meters above MLLW, as explicitly provided in said Contract for Dredging
Work. So, the irresistible conclusion is — when the work on subject RREC-
Pasay City reclamation project stopped in April, 1962 in compliance with the
writ of preliminary injunction issued by the trial court of origin, no portion of
the reclamation project worked on by RREC had reached the stipulated
elevation of 3.5 meters above MLLW. The entire area it worked on was only
Page 32 of 36
at sea level or 0.00 meter above MLLW. In short, RREC had not yet
reclaimed any area when the writ of preliminary injunction issued in April
1962.
On this point, the testimonies of Architect Ruben M. Protacio, Architect and
Managing partner of Leandro V. Locsin and partners, Architect and City
Planner Manuel T. Mañoza, Jr. of Planning Resources and Operation System,
Inc., Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to
1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory
Committee, come to the fore. These credible, impartial and knowledgeable
witnesses recounted on the witness stand that when the construction of the
Main Building of the Cultural Center of the Philippines (CCP) began in 1966,
the only surface land available was the site for the said building (TSN, Sept.
29, 1997, pages 8, 14 and 50), what could be seen in front of and behind it
was all water (TSN, Sept. 29, 1997 pages 127-128). When the CCP Main
Building was being constructed, from 1968 to 1969, the land above sea level
thereat was only where the CCP Main Building was erected and the rest of the
surroundings were all under water, particularly the back portion fronting the
bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag
stressed that on April 16, 1966, during the ground breaking for the CCP Main
Building, it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order
and declare that "the requirement by the trial court on public bidding and the
submission of RREC's plans and specification to the Department of Public
Works and Highways in order that RREC may continue the implementation
of the reclamation work is deleted for being moot and academic." Said
requirement has never become moot and academic. It has remained
indispensable, as ever, and non-compliance therewith restrained RREC from
lawfully resuming the reclamation work under controversy, notwithstanding
the rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed
any area with the prescribed elevation of 3.5 meters above MLLW, so much
so that in 1978, it (RREC) opted to file with the former Ministry of Public
Highways, a claim for compensation of P30,396,878.20, for reclamation
work allegedly done before the CDCP started working on the reclamation of
the CCP grounds. On September 7, 1979, RREC asked the Solicitor General to
settle its subject claim for compensation at the same amount of
P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume
accomplished and other relevant information gathered by the former
Ministry of Public Highways, the Solicitor General informed RREC that the
value of what it had accomplished, based on 1962 price levels, was only
P8,344,741.29, and the expenses for mobilization of equipment amounted to
P2,581,330.00. The aforesaid evaluation made by the government, through
the then Minister of Public Highways, is factual and realistic, so much so that
on June 25, 1981, RREC, in its reply letter to the Solicitor General, stated:
We regret that we are not agreeable to the amount of P10,926,071.29, based
on 1962 cost data, etc., as compensation based on quantum meruit. The least
we would consider is the amount of P10,926,071.29 plus interest at the rate
of 6% per annum from 1962 to the time of payment. We feel that 6% is very
much less than the accepted rate of inflation that has supervened since 1962
to the present, and even less than the present legal rate of 12% per annum. 19
Undoubtedly, what RREC claimed for was compensation for what it had
done, and for the dredge fill of 1,558,395 cubic meters it used, on subject
reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of
the following titled lots, to wit:
LOT NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the
Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 10251 in the
name of CCP
12 Folk Arts Theater 1.7503 hec. TCT 18627 in the
and PICC parking name of CCP
space
22 landscaped with 132,924 sq.m. TCT 75676 in the
sculpture of Asean name of CCP
Artists-site of
Boom na Boom
23 open space, back 34,346 sq.m. TCT 75677 in the
of Philcite name of CCP
24 Parking space for 10,352 sq.m. TCT 75678 in the
Star City, CCP, name of CCP
Philcite
25 open space 11,323 sq.m. TCT 75679 in the
occupied by Star name of CCP
City
28 open space, 27,689 sq.m. TCT 75684 in the
beside PICC name of CCP
29 open space, 106,067 sq.m. TCT 75681 in the
leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justification therefor. In the first
place, in their answer to the Complaint and Amended Complaint below,
RREC and Pasay City never prayed for the transfer to Pasay City of subject
lots, title to which had long become indefeasible in favor of the rightful title
holders, CCP and GSIS, respectively.
The annotation of a notice of lis pendens on the certificates of title covering
the said lots is of no moment. It did not vest in Pasay City and RREC any real
right superior to the absolute ownership thereover of CCP and GSIS. Besides,
the nature of the action did not really warrant the issuance of a notice of lis
pendens.
Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:
Sec. 14. Notice of lis pendens. — In an action affecting the title or the right
of possession of real properly, the plaintiff and the defendant, when
affirmative relief is claimed in his answer, may record in the office of the
registry of deeds of the province in which the property is situated a notice of
the pendency of the action. Said notice shall contain the names of the parties
and the object of the action or defense, and a description of the property in
that province affected thereby. Only from the time of filing such notice for
record shall a purchaser, or encumbrancer of the property affected thereby,
be deemed to have constructive notice of the pendency of the action, and only
of its pendency against the parties designated by their real names.
The notice of lis pendens herein above mentioned may be cancelled only
upon order of the court, after proper showing that the notice is for the
purpose of molesting the adverse party, or that it is not necessary to protect
the rights of the party who caused it to be recorded.
Under the aforecited provision of law in point, a notice of lis pendens is
necessary when the action is for recovery of possession or ownership of a
parcel of land. In the present litigation, RREC and Pasay City, as defendants
in the main case, did not counterclaim for the turnover to Pasay City of the
titled lots aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of
validity of a torrens title, whether fraudulently issued or not, may be posed
only in an action brought to impugn or annul it. (Halili vs. National Labor
Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate Appellate
Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane
provision of Section 48 of P.D. 1529, that a certificate of title can never be the
subject of a collateral attack. It cannot be altered, modified, or cancelled
except in a direct proceeding instituted in accordance with law.
Although Pasay City and RREC did not succeed in their undertaking to
reclaim any area within subject reclamation project, it appearing that
something compensable was accomplished by them, following the applicable
provision of law and hearkening to the dictates of equity, that no one, not
even the government, shall unjustly enrich oneself/itself at the expense of
another 20, we believe; and so hold, that Pasay City and RREC should be
paid for the said actual work done and dredge-fill poured in, worth
Page 33 of 36
P10,926,071.29, as verified by the former Ministry of Public Highways, and
as claimed by RREC itself in its aforequoted letter dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this valley of
tears, the court, for its herein historic disposition, will be exalted by the
future generations of Filipinos, for the preservation of the national patrimony
and promotion of our cultural heritage. As writer Channing rightly puts it:
"Whatever expands the affections, or enlarges the sphere of our sympathies
— Whatever makes us feel our relation to the universe and all that it inherits
in time and in eternity, and to the great and beneficent cause of all, must
unquestionably refine our nature, and elevate us in the scale of being."
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January
28, 1992, and Amended Decision, dated April 28, 1992, of the Court of
Appeals, are both SET ASIDE; and Pasay City Ordinance No. 121, dated May
6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the
Reclamation Agreements entered into by Pasay City and Republic Real Estate
Corporation (RREC) as authorized by said city ordinances, are declared
NULL and VOID for being ultra vires, and contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the trial court
a quo in Civil Case No. 2229-P is made permanent and the notice of lis
pendens issued by the Court of Appeals in CA G.R. CV No. 51349 ordered
CANCELLED. The Register of Deeds of Pasay City is directed to take note of
and annotate on the certificates of title involved, the cancellation of subject
notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay
City and Republic Real Estate Corporation the sum of TEN MILLION NINE
HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND TWENTY-
NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon of six (6%)
percent per annum from May 1, 1962 until full payment, which amount shall
be divided by Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
————————————
G.R. No. 160145 November 11, 2005
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
PEDRO O. ENCISO, Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of
Court, as amended, assailing the Decision1 of the Court of Appeals (CA)
dated September 26, 2003, which affirmed the Decision2 of the Regional
Trial Court (RTC), Iba, Zambales, Branch 71, promulgated on July 31, 2001 in
LRC Case No. RTC-N-75-I. The CA and the trial court adjudicated Lot No.
2278-A, Cad. 652-D, Masinloc Cadastre in favor of respondent Pedro O.
Enciso, pursuant to Section 29 of Presidential Decree (P.D.) No. 1529.
The facts, as culled from the records of the case, show that on April 24, 2000,
the respondent, alleging to be the owner in fee simple of a parcel of
residential land located in Barangay South Poblacion, Masinloc, Zambales,
filed a petition for land registration before the RTC of Iba, Zambales. The lot
is described as follows:
A parcel of land (Lot 2278-A of the subdivision plan Csd-03-012562-D being
a portion of Lot 2278, Cad. 652-D L.R.C. Rec. No.), situated in the Barrio of
South Poblacion, Municipality of Masinloc, Province of Zambales. Bounded
on the NW., along line 1-2 by Sta. Lucia Street; on the NE., along line 2-3 by
Capt. Albright Street; on the SE. & SW. along line 3-4-1 by Lot 2278-B of the
subd. plan. Beginning at a point marked "1" on plan being N. 39 deg. 35’E.,
12.05 m. from BLLM.1,
Cad. 652-D.
thence N. 16 deg. 13’E., 32.48 m. to point. 2;
thence S. 75 deg. 05’E., 44.83 m. to point. 3;
thence S. 16 deg. 19’W., 33.36 m. to point. 4;
thence N. 73 deg. 57’W., 44.76 m. to point. of;
beginning; containing an area of ONE THOUSAND FOUR HUNDRED
SEVENTY-FIVE (1,475) square meters. All points referred to are indicated on
the plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms.
Bearings; true; date of original survey; Sept. 1927-July 1928 and that of the
subdivision survey; July 22, 1999 and was approved on Jan. 20, 2000.3
The respondent averred, inter alia, that he acquired title to the said lot by
virtue of an extrajudicial settlement of estate and quitclaim on March 15,
1999; the said property is not tenanted or occupied by any person other than
the respondent and his family who are in actual physical possession of the
same; and the respondent and his predecessors-in-interest have been in
continuous, peaceful, open, notorious, uninterrupted and adverse possession
of the land in the concept of an owner for not less than 30 years immediately
preceding the filing of the application.4
Petitioner Republic of the Philippines, through the Office of the Solicitor
General (OSG), opposed the application on the following grounds: (a) neither
the respondent nor his predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of the
subject land since June 12, 1945 or prior thereto; (b) the respondent failed to
adduce any muniment of title and/or the tax declaration with the application
to prove bona fide acquisition of the land applied for or its open, continuous,
exclusive and notorious possession and occupation thereof in the concept of
owner since June 12, 1945 or prior thereto; (c) the alleged tax declaration
adverted to in the application does not appear to be genuine and the tax
declarations indicate such possession to be of recent vintage; (d) the claim of
ownership in fee simple on the basis of Spanish title or grant can no longer be
availed of by the respondent considering that he failed to file an appropriate
application for registration within the period of six months from February 16,
1976 as required by P.D. No. 892; and (e) the subject land is a portion of the
public domain belonging to the Republic of the Philippines which is not
subject to private appropriation.5
After ascertaining that the jurisdictional requirements for the application
were done in accordance with the law during the initial hearing6 on
November 9, 2000, the trial court issued an Order of Default7 on January 3,
2001 against all persons with the exception of the government.
The respondent presented tax receipts to show that the property was declared
for taxation purposes in his name. He also testified that he acquired the
property by inheritance from his deceased father, Vicente Enciso, who died
on May 18, 1991. He then immediately took possession of the property and
constructed a house thereon in 1991. On March 15, 1999, he and his siblings
executed an extrajudicial settlement of estate where the land was adjudicated
in his favor.
The respondent further narrated that the property was originally owned by
the Municipality of Masinloc, Zambales. On October 5, 1968, the
municipality passed Resolution No. 71,8 undertaking to construct a road
along the shoreline of the poblacion, but requiring landowners adjoining the
roads to share in the expenses for an inner wall adjacent to their lots. In view
of this, the same resolution provided that:
WHEREAS, where the above landowners share in the construction of the
roads, the same may be given the priority to acquire such additional available
areas by purchase, if such additional areas are not needed by the government
for public use, the advances of the landowners as a result of his [sic]
construction (inner wall) be considered as price of the land, provided that the
cost and value of the inner wall exceeds the assessed value of the land, and if
the cost of the inner wall is less than the assessed value of the land, the
landowners will have to pay the corresponding balance to the government; …
9
On March 8, 1969, the Municipality of Masinloc, Zambales passed
supplementary Resolution No. 102,10 which stated that in consideration of
the financial assistance extended by the abutting property owners, and
because the government no longer needed the additional areas for public use,
the municipality was authorizing the Municipal Mayor to enter into and sign
deeds of purchase between the municipality and the landowners concerned.
Consequently, the Municipal Council of Masinloc, Zambales unanimously
approved Resolution No. 102-A11 dated March 15, 1969, authorizing its
mayor to execute a deed of sale in favor of Honorato Edaño, covering a
portion of the reclaimed lots no longer needed for public use. Honorato was
thus entitled to buy the lot for his help in carrying out the project envisioned
in Resolution No. 71, and after the submission of an itemized statement of the
cost of the construction of the inner wall along Sta. Lucia Street.
Page 34 of 36
Immediately thereafter, the Municipality of Masinloc, Zambales, represented
by its Mayor, P.A. Edaño, executed a Deed of Absolute Sale12 covering a piece The OSG assigned the following error to the appellate court:
of reclaimed land containing more or less 2,790 square meters in favor of
Honorato Edaño. The deed stated that the vendee constructed the inner wall THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
needed to facilitate the fabrication of a portion of Sta. Lucia Street, which was GRANTING RESPONDENT’S PETITION FOR REGISTRATION SANS ANY
opposite his lot, and the extensions of Magsaysay and Capt. Albright Streets SHOWING THAT THE SUBJECT PROPERTY WAS PREVIOUSLY
at a total expense of ₱1,683.80. Considering that the assessed value of the lot DECLARED ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC
was ₱2,092.50, or ₱408.70 DOMAIN.21
more than the vendee spent for the construction of the inner wall, the vendee
paid ₱408.70 to the vendor. The petitioner contends that the first and primordial element in order to
warrant the registration of title is to show that the land must be an alienable
The respondent admitted that Honorato was his uncle, being his father’s half- and disposable land of the public domain. On this note, the petitioner
brother.13 He further narrated that on December 9, 1980, the spouses believes that the respondent failed to adduce any evidence to show that the
Honorato and Esperanza Edaño sold the lot to Vicente B. Enciso for subject land was already previously declared part of such alienable and
disposable land of the public domain. Furthermore, the petitioner adds that
₱2,092.50 via a Deed of Absolute Sale.14 On January 17, 1981, Vicente
under the Regalian doctrine, all lands of the public domain belong to the
Enciso, Natividad Edaño Asuncion and Thelma A. Edaño entered into a Deed
State, and those not otherwise appearing to be clearly within private
of Partition15 involving the same parcel of land. Vicente was awarded one-
ownership are presumed to belong to it.
half of the total area of the property, 1,398 square meters, more or less;
Natividad and Thelma got one-fourth each, or approximately 697.5 square
In his comment to the petition, the respondent asserts that the CA was
meters individually.
correct in affirming the decision of the land registration court. The
respondent cites the following justification of the CA in supporting his claim
No cross-examination was conducted and no evidence was adduced by the
over Lot No. 2278-A:
government to controvert the application for registration.
Records reveal that subject land is a residential land owned by the
On May 8, 2001, Director Felino M. Cortez of the Department on
Municipality of Masinloc, Zambales. The Municipality of Masinloc, through
Registration submitted the Report16 of the Land Registration Authority,
Resolutions 71, 102 and 102-A-29 sold the subject land to Honorato Edaño as
informing the trial court that it was not in a position to verify whether the
evidenced by the Deed of Absolute Sale dated March 31, 1969 executed by the
parcel of land subject of registration was already covered by a land patent
Municipal Mayor.
and previously approved isolated survey. Acting on this report, the trial court
directed the Lands Management Bureau, the Community Environment and
Article 423 of the Civil Code provides that:
Natural Resources Office of Iba, Zambales, and the
"Art. 423. The property of provinces, cities, and municipalities is divided into
Department of Environment and Natural Resources Regional Executive
property for public use and patrimonial property."
Director for Region III, San Fernando, Pampanga, to submit a report on the
status of the parcel of land.17
Properties of political subdivision[s] which are patrimonial in character may
be alienated. By analogy, when a municipality’s properties for public use are
Without waiting for the final report, the trial court granted the application for
no longer intended for such use, the same become patrimonial and may be
registration on July 31, 2001, the dispositive portion of the decision reads:
the subject of a contract. Thus, the Deed of Absolute Sale executed by and
between the Municipal Mayor of Masinloc and Honorato Edaño was a valid
WHEREFORE, this Court, after confirming the Order of General Default
contract. Subject land was likewise sold by Honorato Edaño to petitioner-
entered into the record of this case on January 3, 2001 hereby adjudicates
appellee’s father, Vicente Enciso, by virtue of a Deed of Absolute Sale. From
Lot No. 2278-A, Cad. 652-D, Masinloc Cadastre, containing an area of 1,475
then, subject land changed hand until it was acquired by petitioner-appellee
square meters, situated at Brgy. South Poblacion, Masinloc, Zambales,
when his siblings executed an Extrajudicial Partition assigning said land to
Philippines, as appearing on the approved Plan No. Csd-03-012562-D
him. It was declared for taxation purposes in his name under Tax Declaration
(Exhibit "M") and also in the Technical Description of said lot (Exhibit "K")
No. 007-0700R. …
in favor of the applicant whose address is at Brgy. South Poblacion, Masinloc,
Zambales, Philippines, in accordance with Section 29 of Presidential Decree
…
No. 1529. This adjudication however is subject to the various easements/
reservations provided for under pertinent laws, Presidential Decree and/or
Subject land was reclassified as residential. It was already segregated from
Presidential Letters of Instruction, which should be annotated/projected in
the public domain and assumed the character of private ownership. It was
the title to be issued.
reclaimed by the Municipality of Masinloc and eventually adjudicated to
Honorato Edaño. The Municipality of Masinloc must have been in possession
Once this decision becomes final, let the corresponding decree and title be
of the subject land even before 1969 considering that it was originally
issued.
surveyed way back in 1927-1928. In the exercise of its proprietary right, the
Municipality of Masinloc validly conveyed the subject land to petitioner-
SO ORDERED.18
appellee’s predecessors-in-interest. Petitioner-appellee’s possession and
occupation of the subject land is continuous, public, adverse and
The trial court ruled that the respondent satisfactorily proved his ownership
uninterrupted and in the concept an owner and no other person claimed
in fee simple, as well as the identity of the land sought to be titled. Likewise,
possession and ownership of the same. Article 1137 of the Civil Code
the trial court found that the respondent, as well as his predecessors-in-
provides:
interest, had been in open, peaceful, continuous, public, adverse, and under a
bona fide claim of ownership. According to the trial court, there was no
"Art. 1137. Ownership and other real rights over immovables also prescribed
evidence that the subject parcel of land was within any government
(sic) through uninterrupted adverse possession thereof for thirty years,
reservation, or that the applicant was disqualified from owning real property
without need of titles or of good faith."
under the Constitution.19
Parenthetically, petitioner-appellee’s possession tacked with that of his
The Republic of the Philippines appealed the case before the CA, contending
predecessors-in-interest already complied with the thirty (30)-year
that the trial court erred in granting the application despite his failure to
requirement of open, continuous, exclusive and notorious possession
prove registrable title over Lot No. 2278-A.
required under the law.
The CA disposed of the appeal on September 26, 2003 and affirmed the
Prescinding from the foregoing, petitioner-appellee sufficiently and
decision of the trial court. The fallo of the decision reads:
satisfactorily proved his real and absolute ownership in fee simple; that he
has a registrable title over the subject land and that he complied with the
WHEREFORE, premises considered, the assailed decision dated July 31,
requirements under the law to warrant registration of title over the subject
2001 of the RTC, Branch 71 of Iba, Zambales in LRC Case No. RTC-N-75-1 is
land.22
hereby AFFIRMED.
The petition is meritorious.
SO ORDERED.20
While it is the rule that findings of fact of appellate courts are conclusive
The petitioner dispensed with the filing of a motion for reconsideration and
upon this Court, among the recognized exceptions is where the findings of
forthwith filed the instant petition.

Page 35 of 36
fact are not supported by the record or are conspicuously erroneous as to
constitute a serious abuse of discretion.23 This is the situation in this case.
Section 14(1) of P.D. No. 1529, otherwise known as the Property Registration
Decree, provides:
SEC. 14. Who may apply. –The following persons may file in the proper Court
of First Instance an application for registration of title to land, whether
personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious possession and occupation
of alienable and disposable lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or earlier.
Applicants for registration of title must therefore prove the following: (a) that
the land forms part of the disposable and alienable lands of the public
domain; and (b) that they have been in open, continuous, exclusive,
and notorious possession and occupation of the same under a bona fide claim
of ownership either since time immemorial, or since June 12, 1945. It is not
disputed that the land sought to be registered was originally part of the
reclamation project undertaken by the Municipality of Masinloc, Zambales.
The prevailing rule is that reclaimed disposable lands of the public domain
may only be leased and not sold to private parties. These lands remained sui
generis, as the only alienable or disposable lands of the public domain which
the government could not sell to private parties except if the legislature
passes a law authorizing such sale. Reclaimed lands retain their inherent
potential as areas for public use or public service.24 The ownership of lands
reclaimed from foreshore areas is rooted in the Regalian doctrine, which
declares that all lands and waters of the public domain belong to the State.25
On November 7, 1936, the National Assembly approved Commonwealth Act
No. 141, also known as the Public Land Act, compiling all the existing laws on
lands of the public domain. This remains to this day the existing and
applicable general law governing the classification and disposition of lands of
the public domain. The State policy prohibiting the sale of government
reclaimed, foreshore and marshy alienable lands of the public domain to
private individuals continued under the 1935 Constitution.
The evidence on record shows that a house was constructed on the subject
property only in 1991. Certain discrepancies likewise surround the
application for registration: Honorato Edaño sold a parcel of land consisting
of 2,790 square meters on December 9, 1980 to Vicente Enciso alone; on
January 17, 1981, Vicente Enciso, Natividad Edaño Asuncion and Thelma
Edaño executed a deed of partition covering the same lot. Why was there a
need to partition the property if the entire land had already been sold to
Vicente? The Court also notes that in the said deed of partition, one-half of
the total area of the land, which was 1,398 square meters, was adjudicated in
favor of Vicente; however, in the respondent’s application for registration,
the land sought to be registered consists of 1,475 square meters.
Well-entrenched is the rule that the burden of proof in land registration cases
rests on the applicant who must show clear, positive and convincing evidence
that his alleged possession and occupation were of the nature and duration
required by law. Bare allegations, without more, do not amount to
preponderant evidence that would shift the burden to the oppositor.28
Evidently, the respondent failed to prove that (1) Lot No. 2278-A was
classified as part of the disposable and alienable land of the public domain;
and (2) he and his predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation thereof in the concept of
owners since time immemorial, or from June 12, 1945.
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals dated September 26, 2003 in CA-G.R. CV No. 72859 is REVERSED
and SET ASIDE. Respondent Pedro O. Enciso’s application for registration
and issuance of title to Lot No. 2278-A, Cad. 652-D, Masinloc Cadastre, is
hereby DISMISSED for lack of merit.
SO ORDERED.

Indeed, there is nothing to support the respondent’s claim that the property
"was reclassified as residential … already segregated from the public domain
and assumed the character of private ownership." At the

moment, it is not clear as to when the proper authorities classified the subject
as alienable and disposable. It must be stressed that incontrovertible
evidence must be presented to establish that the land subject of the
application is alienable or disposable.26

According to the CA, "the Municipality of Masinloc must have been in

possession of the subject land even before 1969 considering that it was
originally surveyed way back in 1927-1928." This is not the kind of possession
and occupation contemplated under the law. While the subject property was
still in the hands of the municipality, it was undeniably part of the public
domain. The municipality cannot then be considered a predecessor-in-
interest of the applicant from whom the period of possession and occupation
required by law may be reckoned with. Any other interpretation would be
dangerously detrimental to our national patrimony.

Even assuming that Honorato Edaño, the respondent’s earliest predecessor-

in-interest, possessed the property as early as 1969, the respondent’s claim
must still fail, as he was unable to prove open, continuous, exclusive, and
notorious possession and occupation of the subject land under a bona fide
claim of acquisition of ownership. As the Court ruled in Republic v. Alconaba:
27

The law speaks of possession and occupation. Since these words are
separated by the conjunction and, the clear intention of the law is not to
make one synonymous with the other. Possession is broader than occupation
because it includes constructive possession. When, therefore, the law adds
the word occupation, it seeks to delimit the all encompassing effect of
constructive possession. Taken together with the words open, continuous,
exclusive and notorious, the word occupation serves to highlight the fact that
for an applicant to qualify, his possession must not be a mere fiction. Actual
possession of a land consists in the manifestation of acts of dominion over it
of such a nature as a party would naturally exercise over his own property.

The respondent’s possession and that of his "predecessors-in-interest" will

not suffice for purposes of judicial confirmation of title. What is categorically
required by law is open, continuous, exclusive, and notorious possession and
occupation under a bona fide claim of ownership since June 12, 1945 or
earlier.

Page 36 of 36