Cases Civrev

FIRST DIVISION
June 7, 2017
G.R. No. 195003
CITY OF BATANGAS, represented by Hon. Severina Vilma Abaya, in her capacity as

1
City Mayor of Batangas, Petitioner

vs.
PHILIPPINE SHELL PETROLEUM CORPORATION and SHELL PHILIPPINES
EXPLORATION B.V., Respondents
DECISION
CAGUIOA, J.:
The policy of ensuring the autonomy of local governments was not intended to create
an imperium in imperio and install intra-sovereign political subdivisions independent of the
sovereign state. As agents of the state, local governments should· bear in mind that the police
2
power devolved to them by law must be, at all times, exercised in a manner consistent with the
will of their principal.
The Case
This is a petition for review on certiorari (Petition) filed under Rule 45 of the Rules of Court
3
against the Decision dated May 25, 2010 (Assailed Decision) and Resolution dated December
4 5
30, 2010 (Assailed Resolution) in CA-G.R. CV No. 90373 rendered by the Tenth Division of the
Court of Appeals (CA). The Assailed Decision and Resolution stem from an appeal from the
Decision dated June 29, 2007 rendered by the Regional Trial Court of Batangas City (RTC),
6
Branch 84 in SP. Civil Case Nos. 7924-7925, declaring as invalid Ordinance No. 3, series of
2001, (Assailed Ordinance), enacted by the Sangguniang Panlungsod (Sangguniang
7
Panlungsod) of the City of Batangas (Batangas City). 8
The Facts
Batangas City is a local government unit created by virtue of its charter, Republic Act No. 5495
(RA 5495). Under RA 5495, Batangas City constitutes a political body corporate, and is
endowed with powers which pertain to a municipal corporation. The Sangguniang
9
Panlungsod is the legislative body of Batangas City.
Philippine Shell Petroleum Corporation (PSPC) is a duly organized Philippine corporation

engaged in the business of manufacturing, refining and distribution of petroleum
products. PSPC owns and operates a refinery situated in Tabangao, Batangas City
10
(Tabangao Refinery). 11
Shell Philippines Exploration, B.V. (SPEX) is a foreign corporation licensed to do business in

the Philippines. In furtherance of the mandate of Presidential Decree No. 87 (PD 87) to
12
promote the discovery and production of indigenous petroleum, the Department of Energy
(DOE) executed Service Contract No. 38 (SC 38) with SPEX under which SPEX was tasked to
explore and develop possible petroleum sources in North Western Palawan. SPEX's 13
exploration led to the discovery of an abundant source of natural gas in the Malampaya field off
the shores of Palawan, which thereafter gave rise to the Malampaya Project. The Malampaya
Project required the construction of a 504-kilometer offshore pipeline for the transport of natural
gas from Malampaya field to Batangas, for treatment in PSPC's Tabangao Refinery. 14
On May 28, 2001, the Sangguniang Panlungsod enacted the Assailed Ordinance which
requires heavy industries operating along the portions of Batangas Bay within the territorial
jurisdiction of Batangas City to construct desalination plants to facilitate the use of seawater as
coolant for their industrial facilities. The pertinent portions of the Assailed Ordinance state:
15
SECTION 3. - MANDATORY REQUIREMENT FOR THE APPROVAL OF HEAVY INDUSTRIES

ALONG THE BATANGAS CITY PORTION OF BATANGAS BAY AND OTHER AREAS. - In
addition to the requirements provided by laws and ordinances, the City Government shall not
grant permit or clearance or its approval for any project or program involving the construction
or establishment of heavy industries along the Batangas City portion of the Batangas Bay and
other areas delineated as Heavy Industrial Zone without the required DESALINATION PLANT
for use of sea water instead of underground fresh water for cooling system and industrial
purposes.
SECTION 4. - GRACE PERIOD PROVIDED FOR HEAVY INDUSTRIES. - All heavy industries
already established or approved by the City Government prior to the enactment of this
Ordinance, including those to be established, are granted a period of five (5) years, counted
from the date of approval of this Ordinance, to install [a] desalination plant.
SECTION 5. - AUTHORITY TO GRANT EXEMPTION FROM THE CONSTRUCTION OF

DESALINATION PLANT. - The City Mayor with the concurrence of the Sangguniang
Panlungsod may grant exemption for a given period to an industry from installation or
construction of DESALINATION PLANT on the basis of the following conditions:
5.1. The exemption will not adversely affect the environment, public health, public safety and
the welfare of the people, more particularly, the local aquifers, as shown by a comprehensive
ground water assessment or comprehensive hydrological study conducted by the industry and
presented by the industry applying for exemption.
5.2. The industry or proposed project will support economic-based activities and provide
livelihood, employment, vital community services and facilities while at the same time posing
no adverse effect on the community.
5.3. A public hearing is conducted.
5.4. Such other reasonable conditions which the City Mayor may require with the concurrence
of the Sangguniang Panlungsod.
x x xx
SECTION 7. PENAL CLAUSE. -Any person who shall authorize the start of the construction,
development or operation of any project considered as heavy industry without the approval of
the government authorities herein mentioned shall suffer an imprisonment of not less than six
(6) months nor more than one (1) year and a fine of ₱5,000.00.
If the violator is a juridical person or association, the penalty shall be imposed upon the owner,
President, project manager and/or persons directly in charge of the construction, development
and operation of the project.
SECTION 8. POWER OF THE CITY MAYOR TO ISSUE A CEASE AND DESIST ORDER. -
The City Mayor, upon knowledge of the violation of this ordinance shall issue a cease and
desist order for the stoppage of the construction, development or operation of the project or
industry and shall exercise all powers necessary to give effect to the said order.
SECTION 9. ADMINISTRATIVE FINE. - An administrative fine/penalty of ₱5,000.00 per day of

violation of this ordinance shall be imposed upon the owner, President, project manager,
and/or persons directly in charge of the construction, development and operation of the project
or industry.16
The Assailed Ordinance was approved by the city mayor on June 7, 2001.
Heavy industries subject of the Assailed Ordinance had until May 28, 2006 to comply with its
provisions. Among the facilities affected by the Assailed Ordinance is PSPC's Tabangao
17
Refinery.
Proceedings before the RTC
On May 23, 2006, PSPC filed against Batangas City and the Sangguniang Panlungsod a
Petition for Declaration of Nullity (PSPC Petition) before the RTC praying that the Assailed
Ordinance be declared null and void. The PSPC Petition was raffled to Branch 84, and
docketed as SP Civil Case No. 7924. Thereafter, SPEX filed a petition-in-intervention
18
(Intervention) praying for the same relief. 19
JG Summit Petrochemical Corporation (JG Summit) and First Gas Power Corporation (First
Gas) filed similar petitions docketed as SP Civil Case Nos. 7925 (JG Summit Petition) and
7926 (First Gas Petition), respectively. These petitions were likewise raffled to Branch 84, and
20
consolidated with the PSPC Petition for joint trial. 21
For its part, PSPC averred that the Assailed Ordinance constitutes an invalid exercise of police
power as it failed to meet the substantive requirements for validity.22 Particularly, PSPC
argued that the Assailed Ordinance contravenes the Water Code of the Philippines (Water
Code), and encroaches upon the power of the National Water Resources Board (NWRB) to
regulate and control the Philippines' water resources. In addition, Batangas City and
23
the Sangguniang Panlungsod failed to sufficiently show the factual or technical basis for its
enactment. In this connection, PSPC
24
alleged that the Assailed Ordinance unduly singles out heavy industries, and holds them solely
accountable for the loss of water and destruction of aquifers without basis, resulting in the
deprivation of their property rights without due process of law.
25
On the procedural aspect, PSPC contended that the Assailed Ordinance was not posted or
published in a newspaper of general circulation in the province, nor were public hearings or
consultations involving concerned parties conducted thereon. Further, there are no records
26
showing that the Assailed Ordinance, as approved by the Sangguniang Panlungsod, was
forwarded to the Sangguniang Panlalawigan of the Province of Batangas after it was approved
by the city mayor, as required by Section 56 of the Local Government Code (LGC). 27
SPEX essentially adopted the allegations of PSPC and prayed for the same relief, asserting
that it possesses material and direct interest in the subject matter of the PSPC Petition.
28
In response, Batangas City and the Sangguniang Panlungsod maintained that they have the
power to enact the Assailed Ordinance pursuant to the general welfare clause under the
LGC. According to them, the rationale of the Assailed Ordinance is to stop PSPC and other
29
industries similarly situated from relying "too much" on ground water as coolants for their
machineries, and alternatively promote the use of seawater for such purpose, considering that
fresh ground water is a "perishable commodity." Further, Batangas City and the Sangguniang
30
Panlungsod countered that the "regulation or prohibition" on the use of ground water is merely
incidental to the main purpose of the Assailed Ordinance, which is to compel heavy industries
such as PSPC to construct desalination plants. Hence, provisions having regulatory and
prohibitive effect may be taken out of the Assailed Ordinance without entirely impairing its
validity. 31
Further, Batangas City and the Sangguniang Panlungsod took exception to PSPC's allegations
and asserted that the Assailed Ordinance had been published in Dyaryo Veritas, a newspaper
of general circulation in the area. Moreover, Batangas City and the Sangguniang
Panlungsod claimed that a joint public hearing on the Assailed Ordinance had in fact been
conducted by the Sangguniang Panlungsod and Sangguniang Panlalawigan, where PSPC was
duly represented. In addition, Batangas City and the Sangguniang Panlungsod argued that
32
the requirement of referral of ordinances to the Sangguniang Panlalawigan applies only to tax
and other revenue measures. 33
Finally, Batangas City and the Sangguniang Panlungsod averred that since PSPC and SPEX,
along with other concerned heavy industries, essentially question the former' s authority to
regulate and prohibit the use of fresh ground water, they should have first referred their
grievances to NWRB by filing a complaint for adjudication on the threatened revocation of their
existing water permits.34
On June 21, 2007, the RTC resolved the First Gas Petition by issuing a Decision declaring the
Assailed Ordinance null and void. 35
Subsequently, on June 29, 2007 the RTC rendered a Decision, this time resolving the PSPC
36
and JG Summit petitions. The dispositive portion of said Decision reads:

It is evident that from foregoing factual milieu and parameters, the questioned ordinance is
INVALID, as it is hereby declared INVALID, in its entirety for want of necessity and for not
conducting prior public hearing, and for violating the due process clause of the Constitution
with respect to its (sic) Sec. 8, City Ordinance No. 3, [s]. 2001. No pronouncement as to costs.
SO ORDERED. 37
The RTC gave credence to the testimony of PSPC's witness Engineer Joeffrey Caranto
(Engineer Caranto) who conducted a hydrogeology study on the Tabangao-Malitam watershed
from which PSPC sources fresh ground water. The RTC summarized the findings of said
38
study in this wise:
1. A water balance x x x calculation of the Tabangao-Malitam groundwater system shows that

the natural recharge (replenishment) rate far exceeds the current demand for water in the area.
Hence, there is no threat of depletion of the groundwater resource[s] in the Tabangao-Malitam
[w]atershed that purportedly may result from PSPC's deep well pumping.
2. Water levels in the PSPC wells have not lowered significantly over the last three (3)
decades, indicating that there is no substantial diminution of the supply of groundwater.
3. Among the four PSPC wells, only one [1] well shows very slightly elevated levels of chloride
at 300 milligrams per liter which however is very low compared to seawater (which measures
20,000 milligrams of chloride per liter). The chloride levels in the other nearby PSPC wells are
all within drinking water standards and have not increased in the last four (4) decades of
usage. This indicates that salt water intrusion is not occurring in the PSPC wells. (Emphasis
39
supplied)
The RTC also noted that the Sangguniang Panlungsod failed to consult the NWRB before
enacting the Assailed Ordinance, thereby encroaching upon its authority. 40
Anent Section 8, the RTC concluded that the power granted to the city mayor to cause the
issuance of cease and desist orders against the use of ground water without prior notice and
hearing constitutes a violation of the due process clause.41
Proceedings before the CA
Batangas City and the Sangguniang Panlungsod filed separate notices of appeal from the
decisions resolving the PSPC, JG Summit and First Gas petitions. 42
The appeals against JG Summit and First Gas were raffled to the Fourth Division (CA Fourth
Division) and were docketed as CA-G.R. CV Nos. 90324 (JG Summit Appeal) and 90365 (First
Gas Appeal), respectively. Meanwhile, the appeal filed against PSPC and SPEX was raffled to
the Tenth Division (CA Tenth Division), and docketed as CA-G.R. CV No. 90373 (PSPC
Appeal).
In the PSPC Appeal, Batangas City and the Sangguniang Panlungsod, as appellants, averred
that the R TC failed to consider the testimonies of barangay captains Joel Caaway and Calixto
Villena of Barangays Tabangao Aplaya and Pinamucan, respectively, who testified that some
wells in their areas had dried up, while others had begun to produce salt water. These
43
testimonies, according to Batangas City and the Sangguniang Panlungsod, serve as sufficient
factual bases for the enactment of the Assailed Ordinance, as "there could be no higher degree
of evidence than the actual experience of the inhabitants in the area."44
On May 28, 2009, the CA Fourth Division issued a Joint Decision resolving the JG Summit
45
and First Gas appeals. The Joint Decision affirmed the RTC's decisions in SP Civil Case Nos.
7924-7925 (involving JG Summit and PSPC) and 7926 (involving First Gas). 46
On October 15, 2009, the CA Tenth Division directed Batangas City and the Sangguniang
Panlungsod on one hand, and PSPC and SPEX on the other, to file their respective
memoranda on the filing of separate appeals, and the implications of the Joint Decision of the
CA Fourth Division on the resolution of the PSPC Appeal. 47
In their Joint Memorandum, PSPC and SPEX averred that the Joint Decision in the JG
48
Summit and First Gas appeals bars a contrary decision in the PSPC Appeal, pursuant to the
principle of judicial stability. PSPC and SPEX further contended that the filing of multiple
49
appeals involving the same issues and parties was tantamount to forum shopping. 50
In their defense, Batangas City and the Sangguniang Panlungsod claimed that the filing of
separate appeals was made necessary by the fact that the separate decisions of the RTC in
SP Civil Case Nos. 7924-7925 and 7926 were issued more than fifteen (15) days apart. 51
On the basis of the submissions of the parties, the CA Tenth Division issued the Assailed
Decision dismissing the appeal filed against PSPC and SPEX for lack of merit. The relevant
portions of the Assailed Decision read:
City Ordinance No. 3, S.2001 contravenes Presidential Decree No. 1067, better known
as "The Water Code of the Philippines" as it is an encroachment into the authority of the
[NWRB]. The use of water resources is under the regulatory power of the national government.
This is explicit from the provisions of the Water Code which states that -
"The utilization, explo[i]tation, development, conservation and protection of water resources

shall be subject to the control and regulation of the government through the [NWRB]".
Although respondents-appellants insist that the city ordinance is not an absolute prohibition but
merely a regulation on the use of fresh groundwater for cooling systems and industrial
purposes the argument cannot justify the attempt to usurp the NWRB' s power to regulate and
control water resources. Moreover, not only does the city ordinance prohibit or regulate the use
of fresh groundwater in disregard of previously granted water permits from the NWRB but also
directs the installation of desalination plants for purposes of utilizing sea water, without the
requisite water permit from the NWRB.
x x x The police power of the Sangguniang Panglungsod is subordinate to the constitutional

limitations that its exercise must be reasonable and for the public good. Without the
concurrence of these two requisites, the ordinance will not muster the test of a valid police
measure and should be struck down. The trial court aptly examined the city ordinance against
the requirement of reasonable necessity and correctly concluded that the subject ordinance
failed to prove that it was reasonably necessary to prohibit heavy industries from using ground
water and requiring them instead to construct desalination plants. There must be a reasonable
relation between the purposes of the police measure and the means employed for its
accomplishment. Arbitrary invasion of personal rights and those pertaining to private property
will not be allowed even under the guise of protecting public interest. It has not been sufficiently
demonstrated that there exists no other means less intrusive of private rights that would
equally be effective for the accomplishment of the same purpose.
With the foregoing premises considered, there is no more necessity to address the other errors
raised in the instant appeal.
WHEREFORE, the appeal is DISMISSED. The Decision dated 29 June 2007 rendered by the
Regional Trial Court of Batangas City, Branch 84, in SP Civil Case No. 7924, declaring invalid
City Ordinance No. 3, S.2001 is hereby AFFIRMED.
SO ORDERED. (Emphasis supplied)

52
Batangas City and the Sangguniang Panlungsod filed a Motion for Reconsideration (MR) 53
dated June 21, 2010, which the CA Tenth Division subsequently denied through the Assailed
Resolution. The CA Tenth Division found that the MR merely reiterated the arguments relied
upon in the appeal, which were already passed upon in the Assailed Decision. 54
Batangas City and the Sangguniang Panlungsod received a copy of the Assailed Resolution on
January 13, 2011.
On January 25, 2011, Batangas City filed the present Petition. Notably, the Petition does not
55
name the Sangguniang Panlungsod as party, and only the signature of then city mayor
56
Severina Vilma Abaya appears on the Verification and Certification of Non-Forum Shopping
attached thereto. 57
PSPC and SPEX filed a Motion for Additional Time dated April 1, 2011, praying for a period of
58
ten (10) days therefrom to file their comment.
Thereafter, PSPC and SPEX filed a Second Motion for Additional Time dated April 11, 2011,
59
praying for an additional period of seven (7) days to file said comment. Finally, PSPC and
SPEX filed their Joint Comment on and/or Opposition to the Petition for Review
on Certiorarz- (Joint Comment/Opposition) dated April 25, 2011 on even date.
60
Batangas City failed to timely file its reply to the Joint Comment/Opposition, prompting them to
file a Manifestation and Motion for Extension of Time to File a Reply (Manifestation and Motion)
dated December 12, 2011. The Manifestation and Motion prayed that it be granted twenty (20)
61
days therefrom to file its reply. Accordingly, Batangas City filed its Reply dated December 21,
62
2011 on even date. 63
The Issue
The sole issue for this Court's determination is whether the CA erred in affirming the RTC
Decision which declared the Assailed Ordinance invalid.
The Court's Ruling
Batangas City contends that it has the legal authority to enact ordinances in the exercise of its
police power for the purpose of promoting the general welfare of its inhabitants. Thus, it
64
asserts that it has the power to regulate PSPC's and SPEX's right to use ground water, as
continued use would be injurious to public interest. 65
Further, Batangas City insists that there is factual basis to justify the enactment of the Assailed
Ordinance. As testified to by barangay captains Joel Caaway and Calixto Villena, a gradual
66
change in the quality and quantity of ground water had taken place due to the increase in the
number of industrial plants along Batangas Bay. According to Batangas City, these testimonies
67
should be given more weight, since they are based on "actual facts and experience." 68
These assertions lack merit.
The amendment of the Petition should be allowed in the interest of justice.
At the outset, the Court notes that Batangas City erroneously referred to the 'Joint Decision
issued by the CA Fourth Division in the JG Summit and First Gas appeals as the subject of this
Petition, instead of the Decision issued by the CA Tenth Division resolving the PSPC Appeal.
Batangas City sought to correct this error in its Reply, thus:
1. After diligent and careful review [of] the Petition for Review submitted by the undersigned, it
was found out that there was an error which was inadvertently committed in the first paragraph
of the fifth (5th) page of the Petition;
2. The first paragraph on page 5 of the Petition for Review on Certiorari x x x;
xxxx
Should be amended to appear as:
"On June 13, 2007, herein Petitioner City Government of Batangas received the decision of the
Regional Trial Court (RTC), Branch 84 of Batangas City ruling in favor of Respondents, [PSPC]
and Intervenor [SPEX] x x x. Petitioner filed its Notice of Appeal x x x on 26 July 2007. The
case was elevated to the Court of Appeals and the Tenth Division rendered the 25 May 2010
favoring [PSPC] and SPEx x x x. The City Government of Batangas filed a Motion for
Reconsideration x x x. The motion was denied by the Tenth Division of the Court of Appeals in
its resolution dated 30 December 2010 x x x. Hence, now this Petition." (Emphasis omitted)
69
Considering the nature of the issues involved in the present Petition, and the lack of any
evidence showing that Batangas City's error resulted from anything more than inadvertence,
the Court resolves to permit the amendment of the Petition in the interest of substantial justice.
The Assailed Ordinance is void for being ultra vires, for being contrary to existing law, and for
lack of evidence showing the existence of factual basis for its enactment.
The requisites for a valid ordinance are well established. Time and again, the Court has ruled
that in order for an ordinance to be valid, it must not only be within the corporate powers of the
concerned LGU to enact, but must also be passed in accordance with the procedure
prescribed by law. Moreover, substantively, the ordinance (i) must not contravene the
Constitution or any statute; (ii) must not be unfair or oppressive; (iii) must not be partial or
discriminatory; (iv) must not prohibit, but may regulate trade; (v) must be general and
consistent with public policy; and (vi) must not be unreasonable. 70
Batangas City claims that the enactment of the Assailed Ordinance constitutes a valid exercise
of its police power. This claim is erroneous.
Police power is the power to prescribe regulations to promote the health, morals, peace,
education, good order, safety, and general welfare of the people. As an inherent attribute of
71
sovereignty, police power primarily rests with the State. In furtherance of the State's policy to
foster genuine and meaningful local autonomy, the national legislature delegated the exercise
of police power to local government units (LGUs) as agents of the State. Such delegation can
72
be found in Section 16 of the LGC, which embodies the general welfare clause.
73 74
Since LGUs exercise delegated police power as agents of the State, it is incumbent upon them
to act in conformity to the will of their principal, the State. Necessarily, therefore, ordinances
75
enacted pursuant to the general welfare clause may not subvert the State's will by
contradicting national statutes. Thus, in Batangas CATV, Inc. v. Court of Appeals, the Court
76
struck down an ordinance enacted by Batangas City which granted the Sangguniang
Panlungsod the power to fix subscriber rates charged by CATV providers operating within the
former's territory, as this directly violated a general law which grants such power exclusively to
the National Telecommunications Commission. In so ruling, the Court stressed that
municipalities are precluded from regulating conduct already covered by a statute involving the
same subject matter, hence:
In De la Cruz vs. Paraz, we laid the general rule "that ordinances passed by virtue of the
implied power found in the general welfare clause must be reasonable, consonant with the
general powers and purposes of the corporation, and not inconsistent with the laws or policy of
the State."
xxxx
In this regard, it is appropriate to stress that where the state legislature has made provision for
the regulation of conduct, it has manifested its intention that the subject matter shall be fully
covered by the statute, and that a municipality, under its general powers, cannot regulate the
same conduct. In Keller vs. State, it was held that: "Where there is no express power in the
1avvphi1
charter of a municipality authorizing it to adopt ordinances regulating certain matters which are
specifically covered by a general statute, a municipal ordinance, insofar as it attempts to
regulate the subject which is completely covered by a general statute of the legislature, may be
rendered invalid. x x x Where the subject is of statewide concern, and the legislature has
appropriated the field and declared the rule, its declaration is binding throughout the State." A
reason advanced for this view is that such ordinances are in excess of the powers granted to
the municipal corporation.
Since E.O. No. 205, a general law, mandates that the regulation of CATV operations shall be
exercised by the NTC, an LGU cannot enact an ordinance or approve a resolution in violation
of the said law.
It is a fundamental principle that municipal ordinances are inferior in status and subordinate to
the laws of the state. An ordinance in conflict with a state law of general character and
statewide application is universally held to be invalid. The principle is frequently expressed in
the declaration that municipal authorities, under a general grant of power, cannot adopt
ordinances which infringe the spirit of a state law or repugnant to the general policy of the
state. In every power to pass ordinances given to a municipality, there is an implied restriction
that the ordinances shall be consistent with the general law.x x x (Emphasis and underscoring
77
supplied)
In this Petition, the Court is called upon to determine whether the control and regulation of the
use of water may be made subject of a city ordinance under the regime of the Water Code - a
national statute governing the same subject matter.
The Water Code governs the ownership, appropriation, utilization, exploitation, development,
conservation and protection of water resources. Under Article 3 thereof, water resources are
78
placed under the control and regulation of the government through the National Water
Resources Council, now the NWRB. In turn, the privilege to appropriate and use water is one
79
which is exclusively granted and regulated by the State through water permits issued by the
NWRB. Once granted, these water permits continue to be valid save only for reasons spelled
80
out under the Water Code itself. 81
Conversely, the power to modify, suspend, cancel or revoke water permits already issued also
rests with NWRB. 82
On the other hand, the avowed purpose of the Assailed Ordinance, as stated in its whereas
clauses, is the protection of local aquifers for the benefit of the inhabitants of Batangas
City. Accordingly, the Assailed Ordinance mandates all heavy industries operating along
83
Batangas Bay to use seawater in the operation of their respective facilities, and install
desalination plants for this purpose. Failure to comply with this mandatory requirement would
have the effect of precluding continuous operation, and exposing noncompliant parties to penal
and administrative sanctions. 84
There is no doubt, therefore, that the Assailed Ordinance effectively contravenes the provisions
of the Water Code as it arrogates unto Batangas City the power to control and regulate the use
of ground water which, by virtue of the provisions of the Water Code, pertains solely to the
NWRB. By enacting the Assailed Ordinance, Batangas City acted in excess of the powers
granted to it as an LGU, rendering the Assailed Ordinance ultra vzres.
Being ultra vires, the Assailed Ordinance, in its entirety, is null and void. Thus, it becomes
unnecessary to still determine if it complies with the other substantive requirements for a valid
ordinance - i.e., that the ordinance is fair and reasonable.
In any case, it bears emphasizing that the measure of the substantive validity of an ordinance
is the underlying factual basis for which it was enacted. Hence, without factual basis, an
ordinance will necessarily fail the substantive test for validity.
Batangas City's failure to prove the existence of factual basis to justify the enactment of the
Assailed Ordinance had already been passed upon by the lower courts. The Court quotes,
1âwphi1
with approval, the Joint Decision of the CA Fourth Division:
To prohibit an act or to compel something to be done, there must be a shown reason for the
same. The purpose must also be cogent to the means adopted by the law to attain it. In this
case, as seen in the "whereas clause," the purpose of the ordinance is to protect the
environment and prevent ecological imbalance, especially the drying up of the aquifers of
Batangas City. In effect, the drying up of aquifers is being blamed on the establishments and
industries such as petitioners-appellees here. It would have been acceptable had there been a
specific study or findings that the local government conducted (sic) and not just its reliance on
the complaints of some constituents who merely made its conclusion that the drying up of wells
or its salination was due to the "heavy industries"' use of groundwater.
In addition, if appellants were convinced that those industries adversely affect the environment
and specifically the water resource in Batangas City, there would be no exemptions, as
provided in Section 5 of the Ordinance, as it would negate the purpose of the Jaw.
It thus becomes apparent that the ordinance was come up with in an arbitrary manner, if not
based purely on emotive or flawed premises. There was no scientific standard or any
acceptable standard at all that the ordinance was based on. x x x 85
While the Joint Decision resolves the JG Summit and First Gas appeals, these cases, pertain
to the same appeal filed by Batangas City and the Sangguniang Panlungsod from the Decision
of the RTC nullifying the Assailed Ordinance. As aptly put by the CA in the present case:
The factual antecedents and legal issues in the present CA-G.R. CV No. 90373 are identical to
those of CA-G.R. CV Nos. 90324 and 90365. The assignment of errors in the present appeal
are but a restatement of the errors raised in the two consolidated appeals cases, which errors
have already been exhaustively passed upon by the Court's Fourth Division in its Joint
Decision dated May 28, 2009, weighing pieces of evidence that are now the very same pieces
of evidence presented for consideration in this appeal. x x x (Emphasis supplied)
86
This Court, not being a trier of facts, accords the highest degree of respect to the findings of
fact of the trial court, especially where, as here, they have been affirmed by the CA;
accordingly, these findings will not be disturbed. To be sure, such findings are binding and
conclusive upon this Court, and it is not the Court's function in a petition for review
87
on certiorari to examine, evaluate or weigh anew the probative value of the evidence presented
before the trial court. While there are recognized exceptions to this rule, the Court finds that
88
none is present in this case.
Consequently, since it has been established that Batangas City did not have factual basis to
justify the purpose of the Assailed Ordinance, Batangas City cannot invoke the presumption of
validity. As held in Ermita-Ma/ate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila, which Batangas City itself cites in its Petition, the presumption of validity ascribed
89
to an ordinance prevails only in the absence of some factual foundation of record

sufficient to overthrow the assailed issuance. In this case, the presumption of validity
90
ascribed to the Assailed Ordinance had been overturned by documentary and testimonial
evidence showing that no substantial diminution in the supply of ground water in the
TabangaoMalitam watershed had occurred in the last three (3) decades, and that no threat of
depletion of ground water resources in said watershed existed. 91
Final Note
While the Assailed Ordinance has been struck down as invalid, the pronouncements hereunder
should not be misconstrued by heavy industries to be carte blanche to abuse their respective
water rights at the expense of the health and safety of the inhabitants of Batangas City, the
environment within which these inhabitants live, and the resources upon which these
inhabitants rely. The Court recognizes fresh ground water as an invaluable natural resource,
and deems it necessary to emphasize that Batangas City is not precluded from exercising its
right to protect its inhabitants from injurious effects which may result from the misuse of natural
water resources within its territorial jurisdiction, should these effects later arise, provided that
such exercise is done within the framework of applicable national law, particularly, the Water
Code.
WHEREFORE, premises considered, the petition for review on certiorari is DENIED. The
Decision dated May 25, 2010 and Resolution dated December 30, 2010 of the Court of
Appeals in CA-G.R. CV No. 90373 are AFFIRMED.
SO ORDERED.
ALFREDO BENJAMIN S. CAGUIOA

Associate Justice
WE CONCUR:
MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO

Associate Justice Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
Chief Justice
Footnotes
1
Referred to as Vilma Severina A. Dimacuha elsewhere in the records.
2
Batangas CATV, Inc. v. Court of Appeals, 482 Phil. 544, 571 (2004).
3
Rollo, pp. 3-21.
4
Id. at 315-333. Penned by Associate Justice Rosmari D. Carandang, with Associate
Justices Ramon R. Garcia and Manuel M. Barrios concurring.
5
Id. at 335-336.
6
Id. at 64-90. Penned by Presiding Judge Paterno V. Tac-an.
7
Entitled "AN ACT REQUIRING ALL ESTABLISHED HEAVY INDUSTRIES AND
THOSE TO BE ESTABLISHED ALONG THE BATANGAS CITY PORTION OF THE
BATANGAS BAY AND OTHER AREAS DECLARED AS HEAVY INDUSTRIAL ZONE
TO CONSTRUCT DESALINATION PLANT AND PROHIBITING THE USE OF
EXPLOITATION OF UNDERGROUND FRESH WATER FOR COOLING SYSTEM AND
INDUSTRIAL PURPOSES," rollo, pp. 24-26.
8
Rollo, pp. 89-90.
9
RA 5495, Sec. 3.
10
Rollo, pp. 139-140.
11
Id. at 141.
12
Id. at 191.
13
Id. at 193.
14
Id. at 194-196.
15
Batangas City Ordinance No. 3, s. 2001, Sec. 3; id. at 25.
16
Rollo, pp. 25-26.
17
Id.at318-319.
18
Id.at136-183,315,319.
19
Id. at 190-227.
20
Id. at 93.
21
Id. at 93, 96.
22
Id. at 138.
23
Id. at 149.
24
Id. at 138.
25
Id. at 149.
26
Id. at 139, 150.
27
Id. at 150, 178.
28
Id. at 190-191.
29
Id. at 229.
30
Id.
31
Id. at 230.
32
Id.
33
Id.
34
Id. at 265-266.
35
Id. at 30-31.
36
Supra note 6.
37
Id. at 89-90.
38
Id. at 72, 88.
39
Id. at 73.
Id. at 89; Presidential Decree No. 424, as amended by Presidential Decree No. 1067
40
and Executive Order No. 124-A, series of 1987.

41
Id.
42
Id. at 30-31, 92-93.
43
Id. at 84-85.
44
Id. at 101-102.
Id. at 30-59. Penned by Associate Justice Andres B. Reyes, Jr., with Associate
45
Justices Fernanda Lampas Peralta and Apolinario D. Bruselas, Jr. concurring.
46
Id. at 30-31, 58-59.
47
Id. at 325.
48
The Joint Memorandum does not form part of the records of the case.
49
Rollo, p. 325.
50
Id. at 325-326.
51
Id. at 326.
52
Id. at 330-332.
53
Id.atlll-132.
54
Id. at 335-336.
55
Id. at 3.
56
Id.
57
Id. at 19-20. There being no indication that the Petition was likewise filed on behalf of
the Sangguniang Panlungsod, Batangas City was deemed as sole petitioner
hereunder.
58
Id. at 304-307.
59
Id. at 340-343.
60
Id. at 353-391.
61
Id. at 499-501.
62
Id. at 500.
63
Id. at 505-513.
64
Id. at 13.
65
Id. at 14.
66
Id. at 7-12.
67
Id. at 16.
68
Id.
69
Id. at 505-506.
70
Social Justice Society (SJS) v. Atienza, Jr., 568 Phil. 658, 699-700 (2008).
71
Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 968 (2000).
72
Id. at 968-969.
73
Section 16 of the LGC provides:
SEC. 16. General Welfare. - Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units
shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and
self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.
74
Supra note 71, at 969.
75
See Batangas CATV, Inc. v. Court of Appeals, supra note 2, at 562.
76
See id. at 562-563.
77
Id. at 563-564.
78
wATER CODE, Article 2 (c ).
79
On July 22, 1987, the National Water Resources Council was renamed and
reorganized as the NWRB by virtue of Executive Order No. 124-A.
80
WATER CODE, Article 13.
The relevant provisions of the Water Code governing the grant, suspension,
81
modification, cancellation and revocation of water permits provide:
Article 28. Water permits shall continue to be valid as long as water is

beneficially used; however, it maybe suspended on the grounds of non-
compliance with approved plans and specifications or schedules of water
distribution; use of water for a. purpose other than that for which it was granted;
non-payment of water charges; wastage; failure to keep records of water
diversion, when required; and violation of any term or condition of any permit or
of rules and regulations promulgated by the [NWRB].
xxxx
Article 29. Water permits may be revoked after due notice and hearing on
grounds of non-use; gross violation of the conditions imposed in the permit;
unauthorized sale of water; willful failure or refusal to comply with rules and
regulations or any lawful order; pollution, public nuisance or acts detrimental to
public health and safety; when the appropriator is found to be disqualified under
the law to exploit and develop natural resources of the Philippines; when, in the
case of irrigation, the land is converted to non-agricultural purposes; and other
similar grounds.
Article 30. All water permits are subject to modification or cancellation by the
[NWRB], after due notice and hearing, in favor of a project of greater beneficial
use or for multi-purpose development, and a water permittee who suffers
thereby shall be duly compensated by the entity or person in whose favor the
cancellation was made. (Emphasis supplied)
82
WATER CODE, Article 30.
83
Rollo, p. 24.
84
Id. at 25-26.
85
Id. at 51-52.
86
Id. at 326.
87
Bulos, Jr. v. Yasuma, 554 Phil. 591, 601 (2007).
88
Id.
89
127 Phil. 306 (1967).
90
Id. at 315.
91
Rollo, p. 73.
SECOND DIVISION
G.R. No. 183416, October 05, 2016
PROVINCIAL ASSESSOR OF AGUSAN DEL SUR, Petitioner, v. FILIPINAS PALM OIL

PLANTATION, INC., Respondent.
DECISION
LEONEN, J.:
The exemption from real property taxes given to cooperatives applies regardless of whether or not the
land owned is leased. This exemption benefits the cooperative's lessee. The characterization of
machinery as real property is governed by the Local Government Code and not the Civil Code.
This Petition1 for review assails the Decision2 dated September 26, 2007 and the Resolution3 dated
May 26, 2008 of the Court of Appeals in CA-G.R. SP No. 74060. The Court of Appeals affirmed the
Decision of the Central Board of Assessment Appeals (CBAA) exempting Filipinas Palm Oil Plantation
Inc. from payment of real property taxes. 4 chanrobleslaw
Filipinas Palm Oil Plantation Inc. (Filipinas) is a private organization engaged in palm oil
plantation5 with a total land area of more than 7,000 hectares of National Development Company
(NDC) lands in Agusan del Sur.6 Harvested fruits from oil palm trees are converted into oil through
Filipinas' milling plant in the middle of the plantation area. 7 Within the plantation, there are also three
(3) plantation roads and a number of residential homes constructed by Filipinas for its employees. 8 chanrobleslaw
After the Comprehensive Agrarian Reform Law9 was passed, NDC lands were transferred to
Comprehensive Agrarian Reform Law beneficiaries who formed themselves as the merged NDC-
Guthrie Plantations, Inc. - NDC-Guthrie Estates, Inc. (NGPI-NGEI) Cooperatives. 10 Filipinas entered
into a lease contract agreement with NGPI-NGEI.11 chanrobleslaw
The Provincial-Assessor of Agusan del Sur (Provincial Assessor) is a government agency in charge with
the assessment of lands under the public domain.12 It assessed Filipinas' properties found within the
plantation area,13 which Filipinas assailed before the Local Board of Assessment Appeals (LBAA) on the
following grounds:
chanRoblesvirtualLawlibrary
(1.) The [petitioner] Provincial Assessors of Agusan del Sur ERRED in finding that the Market Value of
a single fruit bearing oil palm tree is P207.00 when it should only be P42.00 pesos per tree;
(2.) The [petitioner] ERRED in finding that the total number of standing and fruit bearing oil palm tree
is PI 10 [sic] trees per hectare when it should be only 92 trees;
(3.) The [petitioner] ERRED in finding that the Market Value[s] of the plantation roads are: ChanRoblesVirtualawlibrary
A.) P270,000.00 per kilometer for primary roads

B.) P135,000.00 for secondary roads
C.) P67,567.00 for tertiary roads constructed by the company.
It should only be: ChanRoblesVirtualawlibrary
A.) P105,000.00 for primary roads

B.) P52,300.00 for secondary roads
C.) P26,250.00 for tertiary roads
Likewise, bridges, culverts, canals and pipes should not be assessed separately from plantation roads,
the same being components of the roads thereof;
(4.) The [petitioner] ERRED in imposing real property taxes against the petitioner for roads, bridges,
culverts, pipes and canals as these belonged to the cooperatives;
([5].) The [petitioner] ERRED in finding that the Market Value of NDC service area is P11,000.00 per
hectare when it should only be P6,000.00 per hectare;
([6].) The [petitioner] ERRED in imposing realty taxes on Residential areas built by [respondent]
except for three of them;
([7].) The [petitioner] ERRED when it included haulers and other equipments [sic] which are
unmovable as taxable real properties.14
In its Decision15 dated June 8, 1999, the LBAA found that the P207.00 market value declared in the
assessment by the Provincial Assessor was unreasonable.16 It found that the market value should not
have been more than P85.00 per oil palm tree.17 The sudden increase of realty tax assessment level
from P42.00 for each oil palm tree in 1993 to P207.00 was confiscatory. 18 chanrobleslaw
The LBAA adopted Filipinas' claim that the basis for assessment should only be 98 trees. 19 Although
one (1) hectare of land can accommodate 124 oil palm trees, the mountainous terrain of the
plantation should be considered.20 Because of the terrain, not every meter of land can be fully planted
with trees.21The LBAA found that roads of any kind, as well as all their improvements, should not be
taxed since these roads were intermittently used by the public. 22 It resolved that the market valuation
should be based on the laws of the Department of Agrarian Reform since the area is owned by the
NDC, a quasi-governmental body of the Philippines. 23 chanrobleslaw
The LBAA exempted the low-cost housing units from taxation except those with a market value of
more than P150,000.00 under the Local Government Code.24 Finally, the LBAA considered the road
equipment and mini haulers as movables that are vital to Filipinas' business.
Filipinas appealed before the CBAA on July 16, 1999.26 On November 21, 2001, the CBAA rendered a
decision, the dispositive portion of which reads:
WHEREFORE, this Board has decided to set aside, as it does hereby set aside, the decision rendered
by the Local Board of Assessment Appeals of the Province of Agusan del Sur on June 8, 1999 in an
unnumbered case entitled "[F]ilipinas Palm Oil Co., Inc. Petitioner, versus the Provincial Assessors
Office of Agusan del Sur, Respondent" and hereby orders as follows:
A. The market value for each oil palm tree should be FIFTY- SEVEN & 55/100 PESOS (57.55),
effective January 1, 1991. The assessment for each municipality shall be based on the corresponding
number of trees as listed in Petitioner-Appellee's "Hectarage Statement" discussed hereinabove;
B. Petitioner-Appellee should not be made to pay for the real property taxes due on the roads starting
from January 1, 1991;
C. Petitioner-Appellee is not liable to the Government for real property taxes on the lands owned by
the Multi-purpose Cooperative;
D. The housing units with a market value of PI75,000.00 or less each shall be subjected to 0%
assessment level, starting 1994;
E. Road Equipment and haulers are not real properties and, accordingly, Petitioner-Appellee is not
liable for real property tax thereon;
F. Any real property taxes already paid by Petitioner-Appellee which, by virtue "of this decision, were
not due, shall be applied to future taxes rightfully due from Petitioner-Appellee.
SO ORDERED.27 (Emphasis supplied)
The CBAA denied the Motion for Reconsideration filed by the Provincial Assessor. 28 The Provincial
Assessor filed a Petition for Review before the Court of Appeals, which, in turn, sustained the CBAA's
Decision.29 chanrobleslaw
The Court of Appeals held that the land owned by NGPI-NGEI, which Filipinas has been leasing, cannot
be subjected to real property tax since these are owned by cooperatives that are tax-
exempt.30 Section 133(n) of the Local Government Code provides:
SECTION 133. Common Limitations on the Taxing Powers of Local Government Units. — Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
....
(n) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and cooperatives duly
registered under R.A. No. 6810 and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A. No.
6938) otherwise known as the "Cooperative Code of the Philippines." (Emphasis supplied)
Section 234(d) of the Local Government Code exempts duly registered cooperatives, like NGPI-NGEI,
from payment of real property taxes:
SECTION 234. Exemptions from Real Property Tax. — The following are exempted from payment of
the real property tax:
....
(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938[.]
(Emphasis supplied)
The Court of Appeals held that the pertinent provisions "neither distinguishes nor specifies" that the
exemption only applies to real properties used by the cooperatives. 31 It ruled that "[t]he clear absence
of any restriction or limitation in the provision could only mean that the exemption applies to
wherever the properties are situated and to whoever uses them." 32 Therefore, the exemption privilege
extends to Filipinas as the cooperatives' lessee.33
chanrobleslaw
On the roads constructed by Filipinas, the Court of Appeals held that although it is undisputed that the
roads were built primarily for Filipinas' benefit, the roads should be tax-exempt since these roads were
also being used by the cooperatives and the public. 34 It applied, by analogy, Bislig Bay Lumber
Company, Inc. v. Provincial Government of Surigao:35 chanrobleslaw
We are inclined to uphold the theory of appellee. In the first place, it cannot be disputed that the
ownership of the road that was constructed by appellee belongs to the government by right accession
not only because it is inherently incorporated or attached to the timber land leased to appellee but
also because upon the expiration of the concession, said road would ultimately pass to the national
government. In the second place, while the road was constructed by appellee primarily for its use and
benefit, the privilege is not exclusive, for, under the lease contract entered into by the appellee and
the government and by public in by the general. Thus, under said lease contract, appellee cannot
prevent the use of portions, of the concession for homesteading purposes. It is also in duty bound to
allow the free use of forest products within the concession for the personal use of individuals residing
in or within the vicinity of the land. . . . In other words, the government has practically reserved the
rights to use the road to promote its varied activities. Since, as above shown, the road in question
cannot be considered as an improvement which belongs to appellee, although in part is for its benefit,
it is clear that the same cannot be the subject of assessment within the meaning of section 2 of
Commonwealth Act No. 470.36 (Citations omitted)
Furthermore, the Court of Appeals agreed with the CBAA that the roads constructed by Filipinas had
become permanent improvements on the land owned by NGPI-NGEI. 37 Articles 440 and 445 of the
Civil Code provide that these improvements redound to the benefit of the land owner under the right
of accession:38 chanrobleslaw
Article 440. The ownership of property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or artificially.
....
Article 445. Whatever is built, planted or sown on the land of another and the improvements or
repairs made thereon, belong to the owner of the land, subject to the provisions of the following
articles.
On the road equipment and mini haulers as real properties subject to tax, the Court of Appeals
affirmed the CBAA's Decision that these are only movables. 39 Section 199(o) of the Local Government
Code provides a definition of machinery subject to real property taxation:
SECTION 199. Definition of Terms. — When used in this Title, the term:
....
(o) "Machinery" embraces machines, equipment, mechanical contrivances, instruments, appliances or

apparatus which may or may not be attached, permanently or temporarily, to the real property. It
includes the physical facilities for production, the installations and appurtenant service facilities, those
which are mobile, self-powered or self-propelled, and those not permanently attached to the real
property which are actually, directly, and exclusively used to meet the needs of the particular
industry, business or activity and which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining.
The Court of Appeals held that Section 19^(o) of the Local Government Code should be construed to
include machineries covered by the meaning of real properties provided for under Article 415(5) of the
Civil Code:40 chanrobleslaw
Article 415. The following are immovable property:

....
(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an
industry or works which may be carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works[.]
The Court of Appeals cited Davao Sawmill Company v. Castillo,41 where it has been held that
machinery that is movable by nature becomes immobilized only when placed by the owner of the
tenement, but not so when placed by a tenant or any other person having a temporary right unless
this person acts as an agent of the owner.42 Thus, the mini haulers and other road equipment retain
their nature as movables.43 chanrobleslaw
The Provincial Assessor filed before this Court a Petition for Review raising the following issues:
First, whether the exemption privilege of NGPI-NGEI from payment of real property tax extends to
respondent Filipinas Palm Oil Plantation Inc. as lessee of the parcel of land owned by cooperatives;
and cralawlawlibrary
Second, whether respondent's road equipment and mini haulers are movable properties and have not
been immobilized by destination for real property taxation.
Petitioner argues that based on Mactan Cebu International Airport Authority v. Ferdinand J.
Marcos,44cooperatives cannot extend its exemption from real property tax to taxable persons. 45 It
argues that Sections 198, 199, 205, and 217 of the Local Government Code provide that real property
taxes are assessed based on actual use.46 Moreover, the exemption of cooperatives applies only when
it is the cooperative that actually, directly, and exclusively uses and possesses the
properties.47 Sections 198, 199, 205, and 217 of the Local Government Code provide:
SECTION 198. Fundamental Principles. — The appraisal, assessment, levy and collection of real
property tax shall be guided by the following fundamental principles:
....
(b) Real property shall be classified for assessment purposes on the basis of its actual use[.]
....
....
(b) "Actual Use" refers to the purpose for which the property is principally or predominantly utilized by
the person in possession thereof[.]
....
SECTION 205. Listing of Real Property in the Assessment Rolls. —
....
(d) Real property owned by the Republic of the Philippines, its instrumentalities and political
subdivisions, the beneficial use of which has been granted, for consideration or otherwise, to a taxable
person, shall be listed, valued and assessed in the name of the possessor, grantee or of the public
entity if such property has been acquired or held for resale or lease.
....
SECTION 217. Actual Use of Real Property as Basis for Assessment. — Real property shall be
classified, valued and assessed on the basis of its actual use regardless of where located, whoever
owns it, and whoever uses it. (Emphasis supplied)
Petitioner claims that Section 199(o) of the Local Government Code specifically covers respondent's
road equipment and mini haulers since these are directly and exclusively used to meet the needs of
respondent's industry, business, or activity. 48 Article 415(5) of the Civil Code, which defines real
property, should not be made to control the Local Government Code, 49 a subsequent legislation that
specifically defines "machinery" for taxation purposes.50chanrobleslaw
In the Resolution51 dated October 13, 2008, this Court denied the Petition for Review due to
procedural missteps, which included the failure to attach legible duplicate original or certified true
copies of the assailed decision and failure to pay proper fees. On November 25, 2008, petitioner
moved for reconsideration,52 praying for the reversal of the Petition's denial due to mere technicalities.
On January 26, 2009, this Court granted Petitioner's Motion for Reconsideration. 53 It directed the
reinstatement of the Petition and required respondent to comment. 54 chanrobleslaw
On November 20, 2009, respondent filed its Comment.55 chanrobleslaw
Respondent reiterates the rulings of the CBAA and the Court of Appeals that the exemption of
cooperatives from real property taxes extends to it as the lessee. 56 It asserts that under its lease
agreement with NGPI-NGEI, it pays an Annual Fixed Rental, which includes the payment of taxes. 57 It
claims that in case NGPI-NGEI is liable to the local government for real property tax on the land, the
tax should be taken from the Annual Fixed Rental.58 To make respondent pay real property taxes on
the leased land would be equivalent to assessing it twice for the same property. 59 chanrobleslaw
On the road equipment and mini haulers being subjected to real property taxation, respondent
maintains that it should be spared from real property tax since the equipment and mini haulers are
movables.60 chanrobleslaw
The Petition is granted to modify the Court of Appeals Decision, but only with respect to the nature of
respondent's road equipment and mini haulers.
Under Section 133(n) of the Local Government Code, the taxing power of local government units shall
not extend to the levy of taxes, fees, or charges on duly registered cooperatives under the
Cooperative Code.61 Section 234(d) of the Local Government Code specifically provides for real
property tax exemption to cooperatives:
SECTION 234. Exemptions from Real Property Tax. — The following are exempted from payment of
....
(d) All real property owned by duly registered cooperatives as provided for under [Republic Act] No.
6938[.] (Emphasis supplied)
NGPI-NGEI, as the owner of the land being leased by respondent, falls within the purview of the law.
Section 234 of the Local Government Code exempts all real property owned by cooperatives without
distinction. Nothing in the law suggests that the real property tax exemption only applies when the
property is used by the cooperative itself. Similarly, the instance that the real property is leased to
either an individual or corporation is not a ground for withdrawal of tax exemption. 62chanrobleslaw
In arguing the first issue, petitioner hinges its claim on a misplaced reliance in Mactan, which refers to
the revocation of tax exemption due to the effectivity of the Local Government Code. However,
Mactan does not refer to the tax exemption extended to cooperatives. The portion that petitioner cited
specifically mentions that the exemption granted to cooperatives has not been withdrawn by the
effectivity of the Local Government Code:
[S]ection 232 must be deemed to qualify Section 133.
Thus, reading together Sections 133, 232, and 234 of the L[ocal] G[overnment] C[ode], we conclude
that as a general rule, as laid down in Section 133, the taxing powers of local government units
cannot extend to the levy of, inter alia, "taxes, fees and charges of any kind on the National
Government, its agencies and instrumentalities, and local government units"; however, pursuant to
Section 232, provinces, cities, and municipalities in the Metropolitan Manila Area may impose the real
property tax except on, inter alia, "real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been granted, for consideration or
otherwise, to a taxable person," as provided in item (a) of the first paragraph of Section 234.
As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons,

including government-owned and controlled corporations, Section 193 of the L[ocal] G[overnment]
C[ode] prescribes the general rule, viz., they are withdrawn upon the effectivity of the L[ocal]
G[overnment] C[ode], except those granted to local water districts, cooperatives duly registered
under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, and unless
otherwise provided in the L[ocal] Gfovernment] C[ode]. The latter proviso could refer to Section 234
which enumerates the properties exempt from real property tax. But the last paragraph of Section 234
further qualifies the retention of the exemption insofar as real property taxes are concerned by
limiting the retention only to those enumerated therein; all others not included in the enumeration lost
the privilege upon the effectivity of the L[ocal] G[overnment] C[ode]. Moreover, even as to real
property owned by the Republic of the Philippines or any of its political subdivisions covered by item
(a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such
property has been granted to a taxable person for consideration or otherwise.
Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the L[ocal]
G[overnment] C[ode], exemptions from payment of real property taxes granted to natural or juridical
persons, including government-owned or controlled corporations, except as provided in the said
section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows
that its exemption from such tax granted it in Section 14 of its Charter, R.A. No. 6958, has been
withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge under any
of the exceptions provided in Section 234, but not under Section 133, as it now asserts, since, as
shown above, the said section is qualified by Sections 232 and 234.
In short, the petitioner can no longer invoke the general rule in Section 133 that the taxing powers of
the local government units cannot extend to the levy of:
(o) taxes, fees or charges of any kind on the National Government, its agencies or instrumentalities,
and local government units.
It must show that the parcels of land in question, which are real property, are any one of those
enumerated in Section 234, either by virtue of ownership, character, or use of the
property.63 (Emphasis supplied)
The roads that respondent constructed within the leased area should not be assessed with real
property taxes. Bislig Bay finds application here. Bislig Bay Lumber Company, Inc. (Bislig Bay) was a
timber concessionaire of a portion of public forest in the provinces of Agusan and Surigao. 64 To aid in
developing its concession, Bislig Bay built a road at its expense from a barrio leading towards its
area.65 The Provincial Assessor of Surigao assessed Bislig Bay with real property tax on the
constructed road, which was paid by the company under protest. 66 It claimed that even if the road was
constructed on public land, it should be subjected to real property tax because it was built by the
company for its own benefit.67 On the other hand, Bislig Bay asserted that the road should be
exempted from real property tax because it belonged to national government by right of
accession.68 Moreover, the road constructed already became an inseparable part of the land. 69 The
records also showed that the road was not only built for the benefit of Bislig Bay, but also of the
public.70 This Court ruled for Bislig Bay, thus:
We are inclined to uphold the theory of appellee. In the first place, it cannot be disputed that the
ownership of the road that was constructed by appellee belongs to the government by right accession
not only because it is inherently incorporated or attached to the timber land leased to appellee but
also because upon the expiration of the concession, said road would ultimately pass to the national
government. ... In the second place, while the road was constructed by appellee primarily for its use
and benefit, the privilege is not exclusive, for, under the lease contract entered into by the appellee
and the government and by public in by the general. Thus, under said lease contract, appellee cannot
prevent the use of portions, of the concession for homesteading purposes. ... It is also in duty bound
to allow the free use of forest products within the concession for the personal use of individuals
residing in or within the vicinity of the land. ... In other words, the government has practically
reserved the rights to use the road to promote its varied activities. Since, as above shown, the road in
question cannot be considered as an improvement which belongs to appellee, although in part is for
its benefit, it is clear that the same cannot be the subject of assessment within the meaning of section
2 of Commonwealth Act No. 470.71
This was reiterated in Board of Assessment Appeals ofZamboanga del Sur v. Samar Mining Company,
Inc.72 Samar Mining Company, Inc. (Samar Mining) was a domestic corporation engaged in the mining
industry.73 Since Samar Mining's mining site and mill were in an inland location entailing long distance
from its area to the loading point, Samar Mining was constrained to construct a road for its
convenience.74 Initially, Samar Mining filed miscellaneous lease applications for a road right of way
covering lands under the jurisdiction of the Bureau of Lands and the Bureau of Forestry where the
proposed road would pass through.75 Samar Mining was given a "temporary permit to occupy and use
the lands applied for by it";76 hence, it was able to build what was eventually known as the Samico
Road. Samar Mining was assessed by the Provincial Assessor of Zamboanga del Sur with real property
taxes on the road, which prompted it to appeal before the Board of Assessment
Appeals.77 Invoking Bislig Bay,Samar Mining claimed that it should not be assessed with real property
tax since the road was constructed on public land. This Court ruled for Samar Mining, thus:
There is no question that the road constructed by respondent Saimar on the public lands leased to it
by the government is an improvement. But as to whether the same is taxable under the aforequoted
provision of the Assessment Law, this question has already been answered in the negaitive by this
Court. In the case of Bislig Bay Lumber Co., Inc. vs. Provincial Government of Surigao, where a similar
issue was raised. . ..
....
. . . What is emphasized in the Bislig case is that the improvement is exempt from taxation because it
is an integral part of the public land on which it is constructed and the improvement is the property of
the government by right of accession. Under Section 3(a) of the Assessment Law, all properties
owned by the government, without any distinction, are exempt from taxation.79 (Emphasis supplied,
citations omitted)
The roads that respondent constructed became permanent improvements on the land owned by the
NGPI-NGEI by right of accession under the Civil Code, thus:
Article 440. The ownership of property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or artificially.
....
Article 445. Whatever is built, planted or sown on the land of another and the improvements or
repairs made thereon, belong to the owner of the land[.]
Despite the land being leased by respondent when the roads were constructed, the ownership of the
improvement still belongs to NGPI-NGEI. As provided under Article 440 and 445 of the Civil Code, the
land is owned by the cooperatives at the time respondent built the roads. Hence, whatever is
incorporated in the land, either naturally or artificially, belongs to the NGPI-NGEI as the landowner.
Although the roads were primarily built for respondent's benefit, the roads were also being used by
the members of NGPI and the public. 80 Furthermore, the roads inured to the benefit of NGPI-NGEI as
owners of the land not only by right of accession but through the express provision in the lease
agreement:
On March 7, 1990 NGPI Multi-Purpose Cooperative, Inc., as Lessor, and NDC-Guthrie Plantations, Inc.,
as Lessee, entered into a "Lease Agreement" . . . covering the agricultural lands transferred by NDC to
the DAR, which lands the DAR ultimately distributed undivided to qualified workers-beneficiaries. . . .
....
Clause No. 6.3 of the same lease agreement provides that "All taxes due on the improvements on the
Leased Property except those improvements on the Area that the LESSOR shall have utilized under
Clause 1.2 hereof, shall be for the account of the LESSEE."
Clause No. 9.4 of the same lease agreement provides that ". . . All fixed and permanent
improvements, such as roads and palm trees introduced on the Leased Property, shall automatically
accrue to the LESSOR upon termination of this Lease Agreement without need of reimbursement."
All the above-cited stipulations in the lease agreement between NGPI Multi-Purpose Cooperative and
NDC-Guthrie Plantations, Inc. were reconfirmed and reaffirmed in the Addendum to Lease Agreement
entered into by and between NGPI Multi-Purpose Cooperative and Filipinas Palmoil Plantations, Inc. on
January 30, 1998. . . . The main subject of the said Addendum was the extension of the term of the
lease agreement up to December 31, 2032, along with economic benefits to the lessor other than
rentals.
There is no dispute that the roads are on the land owned by NGPI Multi-Purpose Cooperative which
leased the same to Petitioner-Appellee. These roads belong to the Multi-Purpose Cooperative, not only
by right of accession but also by express provisions of the Contract of Lease[.]81
Respondent claims that under its lease agreement with NGPI-NGEI, it pays an Annual Fixed Rental,
which includes the payment of taxes. 82 If NGPI-NGEI were liable to the local government for real
property tax on the land, the tax should be taken from the Annual Fixed Rental:
"2.1. In consideration of this Lease Agreement, the LESSEE shall pay the LESSOR the following annual
rentals: ChanRoblesVirtualawlibrary
"1) An annual fixed rental, in the following amount — "SIX HUNDRED THIRTY FIVE PESOS" (P635.00)
PER HECTARE PER ANNUM which would cover the following:
"(1) All Taxes on the Land

"(2) Administration Charges

"(3) Amortization charges
"It is understood that, if the annual fixed rental of "SIX HUNDRED THIRTY FIVE PESOS" (p 635.00) is
insufficient to pay any increase on the land taxes, the Lessee shall pay the difference, provided such
increase does not exceed ten percent (10%) of the immediately preceding tax imposed on the land;
provided further, that any increase beyond these percentage shall be borne equally by the LESSOR
and LESSEE.
"The foregoing notwithstanding, it is understood and agreed that at all times, liability for realty taxes
on the Leased Property Primarily and principally lies with the LESSOR and any reference herein to
payment by LESSEE of said taxes is only for purposes of earmarking the proceeds of the rentals
herein agreed upon."
Clause No. 6.3 of the same lease agreement provides that "All taxes due on the improvements on the
Leased Property except those improvements on the Area that the LESSOR shall have utilized under
Clause 1.2 hereof, shall be for the account of the LESSEE." 83 (Emphasis supplied)
Therefore, NGPI-NGEI, as owner of the roads that permanently became part of the land being leased
by respondent, shall be liable for real property taxes, if any. However, by express provision of the
Local Government Code, NGPI-NGEI is exempted from payment of real property tax. 84 chanrobleslaw
II
The road equipment and mini haulers shall be considered as real property, subject to real property
tax.
Section 199(o) of the Local Government Code defines "machinery" as real property subject to real
property tax,85 thus:
....
(o) "Machinery" embraces machines, equipment, mechanical contrivances, instruments, appliances or

apparatus which may or may not be attached, permanently or temporarily, to the real property. It
includes the physical facilities for production, the installations and appurtenant service facilities, those
which are mobile, self-powered or self-propelled, and those not permanently attached to the real
property which are actually, directly, and exclusively used to meet the needs of the particular
industry, business or activity and which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes[.]
Article 415(5) of the New Civil Code defines "machinery" as that which constitutes an immovable
property:
Article 415. The following are immovable property:

....
industry or works which may be carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works[.] (Emphasis supplied)
Petitioner contends that the second sentence of Section 199(o) includes the road equipment and mini
haulers since these are directly and exclusively used by respondent to meet the needs of its
operations.86 It further claims that Article 415(5) of the New Civil Code should not control the Local
Government Code, a subsequent legislation.87 chanrobleslaw
On the other hand, respondent claims that the road equipment and mini haulers are movables by
nature. It asserts that although there may be a difference between the meaning of "machinery" under
the Local Government Code arid that of immovable property under Article 415(5) of the Civil Code,
"the controlling interpretation of Section 199(o) of [the Local Government Code] is the interpretation
of Article 415(5) of the Civil Code."88
chanrobleslaw
In Manila Electric Company v. City Assessor,89 a similar issue of which definition of "machinery"
prevails to warrant the assessment of real property tax on it was raised.
Manila Electric Company (MERALCO) insisted on harmonizing the provisions of the Civil Code and the
Local Government Code and asserted that "machinery" contemplated under Section 199(o) of the
Local Government must still be within the contemplation of immovable property under Article 415 of
the Civil Code.90 However, this Court ruled that harmonizing such laws "would necessarily mean
imposing additional requirements for classifying machinery as real property for real property tax
purposes not provided for, or even in direct conflict with, the provisions of the Local Government
Code."91 Thus:
While the Local Government Code still does not provide for a specific definition of "real property,"
Sections 199(o) and 232 of the said Code, respectively, gives an extensive definition of what
constitutes "machinery" and unequivocally subjects such machinery to real property tax. The Court
reiterates that the machinery subject to real property tax under the Local Government Code "may or
may not be attached, permanently or temporarily to the real property"; and the physical facilities for
production, installations, and appurtenant service facilities, those which are mobile, self-powered or
self-propelled, or are not permanently attached must (a) be actually, directly, and exclusively used to
meet the needs of the particular industry, business, or activity; and (b) by their very nature and
purpose, be designed for, or necessary for manufacturing, mining, logging, commercial, industrial, or
agricultural purposes.
....
Article 415, paragraph (5) of the Civil Code considers as immovables or real properties "[m]achinery,
receptacles, instruments or implements intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works." The Civil Code, however, does not define "machinery."
The properties under Article 415, paragraph (5) of the Civil Code are immovables by destination, or
"those which are essentially movables, but by the purpose for which they have been placed in an
immovable, partake of the nature of the latter because of the added utility derived therefrom." These
properties, including machinery, become immobilized if the following requisites concur: (a) they are
placed in the tenement by the owner of such tenement; (b) they are destined for use in the industry
or work in the tenement; and (c) they tend to directly meet the needs of said industry or works. The
first two requisites are not found anywhere in the Local Government Code. 92 (Emphasis supplied,
citations omitted)
Section 199(o) of the Local Government prevails over Article 415(5) of the Civil Code. In Manila
Electric Company:
As between the Civil Code, a general law governing property and property relations, and the Local
Government Code, a special law granting local government units the power to impose real property
tax, then the latter shall prevail. As the Court pronounced in Disomangcop v. The Secretary of the
Department of Public Works and Highways Simeon A. Datumanong: ChanRoblesVirtualawlibrary
It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a
general one. Lex specialis derogant generali. As this Court expressed in the case of Leveriza v.
Intermediate Appellate Court, "another basic principle of statutory construction mandates that general
legislation must give way to special legislation on the same subject, and generally be so interpreted as
to embrace only cases in which the special provisions are not applicable, that specific statute prevails
over a general statute and that where two statutes are of equal theoretical application to a particular
case, the one designed therefor specially should prevail."
The Court also very clearly explicated in Vinzons-Chato v. Fortune Tobacco Corporationthat:
A general law and a special law on the same subject are statutes in pari materia and should,
accordingly, be read together and harmonized, if possible, with a view to giving effect to both. The
rule is that where there are two acts, one of which is special and particular and the other general
which, if standing alone, would include the same matter and thus conflict with the special act, the
special law must prevail since it evinces the legislative intent more clearly than that of a general
statute and must not be taken as intended to affect the more particular and specific provisions of the
earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at
all.
The circumstance that the special law is passed before or after the general act does not change the
principle. Where the special law is later, it will be regarded as an exception to, or a qualification of, the
prior general act; and where the general act is later, the special statute will be construed as remaining
an exception to its terms, unless repealed expressly or by necessary implication.
Furthermore, in Caltex (Philippines), Inc. v. Central Board of Assessment Appeals, the Court
acknowledged that "[i]t is a familiar phenomenon to see things classed as real property for purposes
of taxation which on general principle might be considered personal property[.]"
Therefore, for determining whether machinery is real property subject to real property tax, the
definition and requirements under the Local Government Code are controlling.93(Emphasis supplied,
citations omitted)
Respondent is engaged in palm oil plantation.94 Thus, it harvests fruits from palm trees for oil
conversion through its milling plant.95 By the nature of respondent's business, transportation is
indispensable for its operations.
Under the definition provided in Section 199(o) of the Local Government Code, the road equipment
and the mini haulers are classified as machinery, thus:
SECTION 199. Definition of Terms. — When used in this Title, the terra:
....
(o) "Machinery" . . . includes the physical facilities for production, the installations and
appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not
permanently attached to the real property which are actually, directly, and exclusively used to
meet the needs of the particular industry, business or activity and which by their very nature
and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial,
industrial or agricultural purposes [.] (Emphasis supplied)
Petitioner is correct in claiming that the phrase pertaining to physical facilities for production is
comprehensive enough to include the road equipment and mini haulers as actually, directly, and
exclusively used by respondent to meet the needs of its operations in palm oil production. 96 Moreover,
"mini-haulers are farm tractors pulling attached trailers used in the hauling of seedlings during
planting season and in transferring fresh palm fruits from the farm [or] field to the processing plant
within the plantation area."97 The indispensability of the road equipment and mini haulers in
transportation makes it actually, directly, and exclusively used in the operation of respondent's
business.
In its Comment, respondent claims that the equipment is no longer vital to its operation because it is
currently employing equipment outside the company to do the task. 98 However, respondent never
raised this contention before the lower courts. Hence, this is a factual issue of which this Court cannot
take cognizance. This Court is not a trier of facts.99 Only questions of law are entertained in a petition
for review assailing a Court of Appeals decision. 100
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WHEREFORE, the Petition is PARTLY GRANTED. The Decision of the Court of Appeals dated
September 26, 2007 and the Resolution dated May 26, 2008 in CA-G.R. SP No. 74060 are AFFIRMED
with MODIFICATION, in that the road equipment and the mini haulers should be assessed with real
property taxes.
SO ORDERED.
Carpio, (Chairperson), Del Castillo, , and Mendoza, JJ., concur.

Brion, J., on leave.
Endnotes:
Rollo, pp. 19-32.

1
2
Id. at 76-89. The Decision was penned by Associate Justice Edgardo A. Camello (Chair) and
concurred in by Associate Justices Jane Aurora C. Lantion and Elihu A. Ybanez of the Twenty-Third
Division, Court of Appeals, Cagayan de Oro.
3
Id. at 91-92. The Resolution was penned by Associate Justice Edgardo A. Camello (Chair) and
concurred in by Associate Justices Jane Aurora C. Lantion and Elihu A. Ybanez of the Twenty-third
Division, Court of Appeals, Cagayan de Oro.
4
Id. at 89.
5
Id. at 77.
6
Id.
7
Id.
8
Id.
9
Rep. Act No. 6657 (1988).
10
Rollo, p. 77. See Case Study on Lease Rental Arrangement
http://www.dar.gov.ph/downloads/category/93-Case%20Study%20on%20Agribusiness%20Ventures
%20Arrangements%20(AVAs)?download=898:AVA_NGEPI%20&NGEI_Agusan_del_Sur (visited
October 1, 2016).
11
Id.
12
Id.
13
Id.
14
Id. at 77-78.
15
Id. at 147-154.
16
Id. at 149.
17
Id.
18
Id.
19
Id. at 150.
20
Id.
21
Id.
22
Id.
23
Id. at 151.
24
Id. at 152.
25
cralawred Id.
26
Id. at 78.
27
Id. at 78-79.
28
Id at 79.
29
Id.
30
Id. at 83-85.
31
Id. at 84.
32
Id.
33
Id. at 85.
34
Id. at 86.
35
100 Phil. 303 (1956) [Per J. Bautista Angelo, En Bane].
36
Id. at 306-307. See rollo, p. 85.
37
Id. at 86.
38
Id.
39
Id. at 88.
40
Id. at 87-8
41
61 Phil. 709 (1935) [Per J. Malcolm, En Banc].
42
Id. at 714.
43
Id. at 88.
44
330 Phil. 392 (1996) [Per J. Davide, Jr., Third Division].
Rollo, p. 25.
45
46
Id. at 26-27.
47
Id. at 27.
48
Id. at 28.
49
Rep. Act No. 7160(1991).
Rollo, p. 29.
50
51
Id. at 68.
52
Id. at 70-73.
53
Id. at 108.
54
Id.
55
Id. at 160-164.
56
Id. at 161.
57
Id.
58
Id.
59
Id.
60
Id. at 162.
61
Rep. Act No. 6938(1990).
Rollo, p. 84.
62
63
330 Phil. 392, 413-414 (1996) [Per J. Davide, Jr., Third Division].
64
100 Phil. 303 (1956) [Per J. Bautista Angelo, En Banc].
65
Id. at 303-304.
65
Id. at 304.
67
Id.
68
Id.
69
Id.
70
Id.
71
Id. at 306-307.
72
147 Phil. 699 (1971) [Per J. Zaldivar, En Banc].
73
Id. at 703.
74
Id.
75
Id.
76
Id.
77
Id. at 704.
78
Id.
79
Id. at 705-708.
Rollo, p. 45.
80
81
Id. at 132-134.
82
Id. at 161.
83
Id. at 133.
84
LOCAL. GOVT. CODE, sec. 234(d).
Manila Electric Co. v. City Assessor, G.R. No. 166102, August 5, 2015, 765 SCRA 52, 85 [Per J.
85
Leonardo-de Castro, First Division].
Rollo, p. 28.
86
87
Id. at 29.
88
Id. at 162.
89
G.R. No. 166102, August 5, 2015, 765 SCRA 52 [Per J. Leonardo-de Castro, First Division].
90
Id. at 94.
91
Id.
92
Id. at 92-94.
93
Id. at 94-95.
94
Rollo, p. 77.
95
Id.
96
Id. at 63.
97
Id. at 63-64.
98
Id. at 162.
Bernardo v. Court of Appeals, 290 Phil. 649, 657 (1992) [Per J. Campos, Jr., Second Division]
99
100
Id.
FIRST DIVISION
G.R. No. 166102, August 05, 2015
MANILA ELECTRIC COMPANY, Petitioner, v. THE CITY ASSESSOR AND CITY TREASURER OF
LUCENA CITY, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
Manila Electric Company (MERALCO), seeking the reversal of the Decision 1 dated May 13, 2004 and
Resolution2dated November 18, 2004 of the Court of Appeals in CA-G.R. SP No. 67027. The appellate
court affirmed the Decision3 dated May 3, 2001 of the Central Board of Assessment Appeals (CBAA) in
CBAA Case No. L-20-98, which, in turn, affirmed with modification the Decision 4 dated June 17,
19985 of the Local Board of Assessment Appeals (LBAA) of Lucena City, Quezon Province, as regards
Tax Declaration Nos. 019-6500 and 019-7394, ruling that MERALCO is liable for real property tax on
its transformers, electric posts (or poles), transmission lines, insulators, and electric meters, beginning
1992.
MERALCO is a private corporation organized and existing under Philippine laws to operate as a public
utility engaged in electric distribution. MERALCO has been successively granted franchises to operate
in Lucena City beginning 1922 until present time, particularly, by: (1) Resolution No. 36 6 dated May
15, 1922 of the Municipal Council of Lucena; (2) Resolution No. 108 7 dated July 1, 1957 of the
Municipal Council of Lucena; (3) Resolution No. 26798 dated June 13, 1972 of the Municipal Board of
Lucena City;9(4) Certificate of Franchise10 dated October 28, 1993 issued by the National Electrification
Commission; and (5) Republic Act No. 920911 approved on June 9, 2003 by Congress.12
On February 20, 1989, MERALCO received from the City Assessor of Lucena a copy of Tax Declaration
No. 019-650013 covering the following electric facilities, classified as capital investment, of the
company: (a) transformer and electric post; (b) transmission line; (c) insulator; and (d) electric
meter, located in Quezon Ave. Ext., Brgy. Gulang-Gulang, Lucena City. Under Tax Declaration No.
019-6500, these electric facilities had a market value of P81,811,000.00 and an assessed value of
P65,448,800.00, and were subjected to real property tax as of 1985.
MERALCO appealed Tax Declaration No. 019-6500 before the LBAA of Lucena City, which was
docketed as LBAA-89-2. MERALCO claimed that its capital investment consisted only of its substation
facilities, the true and correct value of which was only P9,454,400.00; and that MERALCO was
exempted from payment of real property tax on said substation facilities.
The LBAA rendered a Decision14 in LBAA-89-2 on July 5, 1989, finding that under its franchise,
MERALCO was required to pay the City Government of Lucena a tax equal to 5% of its gross earnings,
and "[s]aid tax shall be due and payable quarterly and shall be in lieu of any and all taxes of any kind,
nature, or description levied, established, or collected x x x, on its poles, wires, insulators,
transformers and structures, installations, conductors, and accessories, x x x, from which taxes the
grantee (MERALCO) is hereby expressly exempted."15 As regards the issue of whether or not the
poles, wires, insulators, transformers, and electric meters of MERALCO were real properties, the LBAA
cited the 1964 case of Board of Assessment Appeals v. Manila Electric Company16 (1964 MERALCO
case) in which the Court held that: (1) the steel towers fell within the term "poles" expressly
exempted from taxes under the franchise of MERALCO; and (2) the steel towers were personal
properties under the provisions of the Civil Code and, hence, not subject to real property tax. The
LBAA lastly ordered that Tax Declaration No. 019-6500 would remain and the poles, wires, insulators,
transformers, and electric meters of MERALCO would be continuously assessed, but the City Assessor
would stamp on the said Tax Declaration the word "exempt." The LBAA decreed in the end: cralawlawlibrary
WHEREFORE, from the evidence adduced by the parties, the Board overrules the claim of the [City
Assessor of Lucena] and sustain the claim of [MERALCO].
Further, the Appellant (Meralco) is hereby ordered to render an accounting to the City Treasurer of
Lucena and to pay the City Government of Lucena the amount corresponding to the Five (5%) per
centum of the gross earnings in compliance with paragraph 13 both Resolutions 108 and 2679,
respectively, retroactive from November 9, 1957 to date, if said tax has not yet been paid. 17 chanrobleslaw
The City Assessor of Lucena filed an appeal with the CBAA, which was docketed as CBAA Case No.
248.In its Decision18 dated April 10, 1991, the CBAA affirmed the assailed LBAA judgment.
Apparently, the City Assessor of Lucena no longer appealed said CBAA Decision and it became final
and executory.
Six years later, on October 29, 1997, MERALCO received a letter19 dated October 16, 1997 from the
City Treasurer of Lucena, which stated that the company was being assessed real property tax
delinquency on its machineries beginning 1990, in the total amount of P17,925,117.34, computed as
follows:chanRoblesvirtualLawlibrary
TAX ASSESSED COVERE TAX DUE PENALTY TOTAL

DEC VALUE D
.# PERIOD
019- P65,448,800.0 1990-94 P3,272,440.0 P2,356,156.8 P5,628,596.80

650 0 0 0
0
019- 78,538,560.00 1995 785,385.60 534,062.21 1,319,447.81
739
4
1996 785,385.60 345,569.66 1,130,955.26
lst- 589,039.20 117,807.84 706,847.04
rd
3 /1997
4th 1997 196,346.40 (19,634.64) 176,711.76
BASIC---- P8,962,558.67
SEF---- 8,962,558.67
TOTAL TAX DELINQUENCY---- P17,925,117.3
4
The City Treasurer of Lucena requested that MERALCO settle the payable amount soon to avoid
accumulation of penalties. Attached to the letter were the following documents: (a) Notice of
Assessment20 dated October 20, 1997 issued by the City Assessor of Lucena, pertaining to Tax
Declaration No. 019-7394, which increased the market value and assessed value of the machinery;
(b) Property Record Form;21 and (c) Tax Declaration No. 019-6500.22
MERALCO appealed Tax Declaration Nos. 019-6500 and 019-7394 before the LBAA of Lucena City on
December 23, 1997 and posted a surety bond23 dated December 10, 1997 to guarantee payment of its
real property tax delinquency. MERALCO asked the LBAA to cancel and nullify the Notice of
Assessment dated October 20, 1997 and declare the properties covered by Tax Declaration Nos. 019-
6500 and 019-7394 exempt from real property tax.
In its Decision dated June 17, 1998 regarding Tax Declaration Nos. 019-6500 and 019-7394, the LBAA
declared that Sections 234 and 534(f) of the Local Government Code repealed the provisions in the
franchise of MERALCO and Presidential Decree No. 55124 pertaining to the exemption of MERALCO
from payment of real property tax on its poles, wires, insulators, transformers, and meters. The LBAA
refused to apply as res judicata its earlier judgment in LBAA-89-2, as affirmed by the CBAA, because
it involved collection of taxes from 1985 to 1989, while the present case concerned the collection of
taxes from 1989 to 1997; and LBAA is only an administrative body, not a court or quasi-judicial body.
The LBAA though instructed that the computation of the real property tax for the machineries should
be based on the prevailing 1991 Schedule of Market Values, less the depreciation cost allowed by law.
The LBAA ultimately disposed: cralawlawlibrary
WHEREFORE, in view of the foregoing, it is hereby ordered that: chanRoblesvirtualLawlibrary
1) MERALCO's appeal be dismissed for lack of merit; ChanRoblesVirtualawlibrary
2) MERALCO be required to pay the realty tax on the questioned properties, because they are not
exempt by law, same to be based on the 1991 level of assessment, less depreciation cost allowed by
law.25
chanrobleslaw
MERALCO went before the CBAA on appeal, which was docketed as CBAA Case No. L-20-98. The
CBAA, in its Decision dated May 3, 2001, agreed with the LBAA that MERALCO could no longer claim
exemption from real property tax on its machineries with the enactment of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, thus: cralawlawlibrary
Indeed, the Central Board of Assessment Appeals has had the opportunity of ruling in [MERALCO's]
favor in connection with this very same issue. The matter was settled on April 10, 1991 where this
Authority ruled that "wires, insulators, transformers and electric meters which are mounted on poles
and can be separated from the poles and moved from place to place without breaking the material or
causing [the] deterioration of the object, are deemed movable or personal property". The same
position of MERALCO would have been tenable and that decision may have stood firm prior to the
enactment of R.A. 7160 but not anymore in this jurisdiction. The Code provides and now sets a more
stringent yet broadened concept of machinery, x x x: chanRoblesvirtualLawlibrary
xxxx
The pivotal point where the difference lie between the former and the current case is that by the very
wordings of [Section 199(0)], the ground being anchored upon by MERALCO concerning the properties
in question being personal in nature does not hold anymore for the sole reason that these come now
within the purview and new concept of Machineries. The new law has treated these in an unequivocal
manner as machineries in the sense that they are instruments, mechanical contrivances or apparatus
though not attached permanently to the real properties of [MERALCO] are actually, directly and
exclusively used to meet their business of distributing electricity.
xxxx
Clearly, [Section 234 of the Local Government Code] lists down the instances of exemption in real
property taxation and very apparent is the fact that the enumeration is exclusive in character in view
of the wordings in the last paragraph. Applying the maxim "Expressio Unius est Exclusio Alterius", we
can say that "Where the statute enumerates those who can avail of the exemption, it is construed as
excluding all others not mentioned therein". Therefore, the above-named company [had] lost its
previous exemptions under its franchise because of non-inclusion in the enumeration in Section 234.
Furthermore, all tax exemptions being enjoyed by all persons, whether natural or juridical, including
all government-owned or controlled corporations are expressly withdrawn, upon effectivity of R.A.
7160.
In the given facts, it has been manifested that the Municipal Board of Lucena passed Resolution No.
108 on July 1, 1957 extending the franchise of MERALCO to operate in Lucena city an electric light
system for thirty-five years, which should have expired on November 9, 1992 and under Resolution
No. 2679 passed on June 13, 1972 by the City Council of Lucena City awarding [MERALCO] a franchise
to operate for twenty years an electric light, heat and power system in Lucena City, also to expire in
the year 1992. Under those franchises, they were only bound to pay franchise taxes and nothing
more.
Now, granting arguendo that there is no express revocation of the exemption under the franchise of
[MERALCO] since, unquestionably [MERALCO] is a recipient of another franchise granted this time by
the National Electrification Commission as evidenced by a certificate issued on October 28, 1993, such
conferment does not automatically include and/or award exemption from taxes, nor does it impliedly
give the franchisee the right to continue the privileges like exemption granted under its previous
franchise. It is just a plain and simple franchise. In countless times, the Supreme Court has ruled that
exemption must be clear in the language of the law granting such exemption for it is strictly construed
and favored against the person invoking it. In addition, a franchise though in the form of a contract is
also a privilege that must yield to the sublime yet inherent powers of the state, one of these is the
power of taxation.
Looking into the law creating the National Electrification Administration (Commission), P.D. 269 as
amended by P.D. 1645, nowhere in those laws can we find such authority to bestow upon the grantee
any tax exemption of whatever nature except those of cooperatives. This we believe is basically in
consonance with the provisions of the Local Government Code more particularly Section 234.
Furthermore, Section 534(f) of R.A. 7160 which is taken in relation to Section 234 thereof states that
"All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations or part or parts thereof which are inconsistent with any of the provisions of
this Code are hereby repealed or modified accordingly". Anent this unambiguous mandate, P.D. 551 is
mandatorily repealed due to its contradictory and irreconcilable provisions with R.A. 7160. 26
chanrobleslaw
Yet, the CBAA modified the ruling of the LBAA by excluding from the real property tax deficiency
assessment the years 1990 to 1991, considering that: cralawlawlibrary
In the years 1990 and 1991, the exemption granted to MERALCO under its franchise which incidentally
expired upon the effectivity of the Local Government Code of 1991 was very much in effect and the
decision rendered by the Central Board of Assessment Appeals (CBAA) classifying its poles, wires,
insulators, transformers and electric meters as personal property was still controlling as the law of the
case. So, from 1990 to 1991, it would be inappropriate and illegal to make the necessary assessment
on those properties, much more to impose any penalty for nonpayment of such.
But, assessments made beginning 1992 until 1997 by the City Government of Lucena is legal, both
procedurally and substantially. When R.A. 7160, which incorporated amended provisions of the Real
Property Tax Code, took effect on January 1, 1992, as already discussed, the nature of the aforecited
questioned properties considered formerly as personal metamorphosed to machineries and the
exemption being invoked by [MERALCO] was automatically withdrawn pursuant to the letter and spirit
of the law. x x x.27
chanrobleslaw
Resultantly, the decretal portion of said CBAA Decision reads: cralawlawlibrary
WHEREFORE, in view of the foregoing, the Decision appealed from is hereby modified. The City
Assessor of Lucena City is hereby directed to make a new assessment on the subject properties to
retroact from the year 1992 and the City Treasurer to collect the tax liabilities in accordance with the
provisions of the cited Section 222 of the Local Government Code. 28 chanrobleslaw
The CBAA denied the Motion for Reconsideration of MERALCO in a Resolution 29 dated August 16, 2001.
Disgruntled, MERALCO sought recourse from the Court of Appeals by filing a Petition for Review under
Rule 43 of the Rules of Court, which was docketed as CA-G.R. SP No. 67027.
The Court of Appeals rendered a Decision on May 13, 2004 rejecting all arguments proffered by
MERALCO. The appellate court found no deficiency in the Notice of Assessment issued by the City
Assessor of Lucena: cralawlawlibrary
It was not disputed that [MERALCO] failed to provide the [City Assessor and City Treasurer of Lucena]
with a sworn statement declaring the true value of each of the subject transformer and electric post,
transmission line, insulator and electric meter which should have been made the basis of the fair and
current market value of the aforesaid property and which would enable the assessor to identify the
same for assessment purposes. [MERALCO] merely claims that the assessment made by the [City
Assessor and City Treasurer of Lucena] was incorrect but did not even mention in their pleading the
true and correct assessment of the said properties. Absent any sworn statement given by [MERALCO],
[the City Assessor and City Treasurer of Lucena] were constrained to make an assessment based on
the materials within [their reach].30 chanrobleslaw
The Court of Appeals further ruled that there was no more basis for the real property tax exemption of
MERALCO under the Local Government Code and that the withdrawal of said exemption did not violate
the non-impairment clause of the Constitution, thus: cralawlawlibrary
Although it could not be denied that [MERALCO] was previously granted a Certificate of Franchise by
the National Electrification Commission on October 28, 1993 x x x, such conferment does not
automatically include an exemption from the payment of realty tax, nor does it impliedly give the
franchisee the right to continue the privileges granted under its previous franchise considering that
Sec. 534(f) of the Local Government Code of 1991 expressly repealed those provisions which are
inconsistent with the Code.
At the outset, the Supreme Court has held that "Section 193 of the LGC prescribes the general rule,
viz., tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons are
withdrawn upon the effectivity of the LGC except with respect to those entities expressly enumerated.
In the same vein, We must hold that the express withdrawal upon effectivity of the LGC of all
exemptions except only as provided therein, can no longer be invoked by MERALCO to disclaim liability
for the local tax." (City Government of San Pablo, Laguna vs. Reyes, 305 SCRA 353, 362-363)
In fine, [MERALCO's] invocation of the non-impairment clause of the Constitution is accordingly

unavailing. The LGC was enacted in pursuance of the constitutional policy to ensure autonomy to local
governments and to enable them to attain fullest development as self-reliant communities. The power
to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local
legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to [a] direct
authority conferred by Section 5, Article X of the Constitution. The important legal effect of Section 5
is that henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will be
resolved in favor of the municipal corporations. (Ibid. pp. 363-365) 31 chanrobleslaw
MERALCO similarly failed to persuade the Court of Appeals that the transformers, transmission lines,
insulators, and electric meters mounted on the electric posts of MERALCO were not real properties.
The appellate court invoked the definition of "machinery" under Section 199(o) of the Local
Government Code and then wrote that: cralawlawlibrary
We firmly believe and so hold that the wires, insulators, transformers and electric meters mounted on
the poles of [MERALCO] may nevertheless be considered as improvements on the land, enhancing its
utility and rendering it useful in distributing electricity. The said properties are actually, directly and
exclusively used to meet the needs of [MERALCO] in the distribution of electricity.
In addition, "improvements on land are commonly taxed as realty even though for some purposes
they might be considered personalty. It is a familiar personalty phenomenon to see things classed as
real property for purposes of taxation which on general principle might be considered personal
property." (Caltex (Phil) Inc. vs. Central Board of Assessment Appeals, 114 SCRA 296, 301-302) 32 chanrobleslaw
Lastly, the Court of Appeals agreed with the CBAA that the new assessment of the transformers,
electric posts, transmission lines, insulators, and electric meters of MERALCO shall retroact to 1992.
Hence, the Court of Appeals adjudged: cralawlawlibrary
WHEREFORE, premises considered, the assailed Decision [dated] May 3, 2001 and Resolution
dated August 16, 2001 are hereby AFFIRMED in toto and the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED for lack of merit.33
chanrobleslaw
In a Resolution dated November 18, 2004, the Court of Appeals denied the Motion for Reconsideration
of MERALCO.
MERALCO is presently before the Court via the instant Petition for Review on Certiorari grounded on
the following lone assignment of error: cralawlawlibrary
THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN AFFIRMING IN TOTO THE
DECISION OF THE CENTRAL BOARD OF ASSESSMENT APPEALS WHICH HELD THAT THE SUBJECT
PROPERTIES ARE REAL PROPERTIES SUBJECT TO REAL PROPERTY TAX; AND THAT ASSESSMENT ON
THE SUBJECT PROPERTIES SHOULD BE MADE TO TAKE EFFECT RETROACTIVELY FROM 1992 UNTIL
1997, WITH PENALTIES; THE SAME BEING UNJUST, WHIMSICAL AND NOT IN ACCORD WITH THE
LOCAL GOVERNMENT CODE.34 chanrobleslaw
MERALCO argues that its transformers, electric posts, transmission lines, insulators, and electric
meters are not subject to real property tax, given that: (1) the definition of "machinery" under Section
199(o) of the Local Government Code, on which real property tax is imposed, must still be within the
contemplation of real or immovable property under Article 415 of the Civil Code because it is
axiomatic that a statute should be construed to harmonize with other laws on the same subject matter
as to form a complete, coherent, and intelligible system; (2) the Decision dated April 10, 1991 of the
CBAA in CBAA Case No. 248, which affirmed the Decision dated July 5, 1989 of the LBAA in LBAA-89-
2, ruling that the transformers, electric posts, transmission lines, insulators, and electric meters of
MERALCO are movable or personal properties, is conclusive and binding; and (3) the electric poles are
not exclusively used to meet the needs of MERALCO alone since these are also being utilized by other
entities such as cable and telephone companies.
MERALCO further asserts that even if it is assumed for the sake of argument that the transformers,
electric posts, transmission lines, insulators, and electric meters are real properties, the assessment of
said properties by the City Assessor in 1997 is a patent nullity. The collection letter dated October 16,
1997 of the City Treasurer of Lucena, Notice of Assessment dated October 20, 1997 of the City
Assessor of Lucena, the Property Record Form dated October 20, 1997, and Tax Declaration No. 019-
6500 simply state a lump sum market value for all the transformers, electric posts, transmission lines,
insulators, and electric meters covered and did not provide an inventory/list showing the actual
number of said properties, or a schedule of values presenting the fair market value of each property
or type of property, which would have enabled MERALCO to verify the correctness and reasonableness
of the valuation of its properties. MERALCO was not furnished at all with a copy of Tax Declaration No.
019-7394, and while it received a copy of Tax Declaration No. 019-6500, said tax declaration did not
contain the requisite information regarding the date of operation of MERALCO and the original cost,
depreciation, and market value for each property covered. For the foregoing reasons, the assessment
of the properties of MERALCO in 1997 was arbitrary, whimsical, and without factual basis - in patent
violation of the right to due process of MERALCO. MERALCO additionally explains that it cannot be
expected to make a declaration of its transformers, electric posts, transmission lines, insulators, and
electric meters, because all the while, it was of the impression that the said properties were personal
properties by virtue of the Decision dated July 5, 1989 of the LBAA in LBAA-89-2 and the Decision
dated April 10, 1991 of the CBAA in CBAA Case No. 248.
Granting that the assessment of its transformers, electric posts, transmission lines, insulators, and
electric meters by the City Assessor of Lucena in 1997 is valid, MERALCO alternatively contends that:
(1) under Sections 22135 and 22236 of the Local Government Code, the assessment should take effect
only on January 1, 1998 and not retroact to 1992; (2) MERALCO should not be held liable for penalties
and interests since its nonpayment of real property tax on its properties was in good faith; and (3) if
interest may be legally imposed on MERALCO, it should only begin to run on the date it received the
Notice of Assessment on October 29, 1997 and not all the way back to 1992.
At the end of its Petition, MERALCO prays: cralawlawlibrary
WHEREFORE, it is respectfully prayed of this Honorable Court that the appealed Decision dated May
13, 2004 of the Court of Appeals, together with its Resolution dated November 18, 2004 be reversed
and set aside, and judgment be rendered x x x nullifying and cancel[l]ing the Notice of Assessment,
dated October 20, 1997, issued by respondent City Assessor, and the collection letter dated October
16, 1997 of respondent City Treasurer.
Petitioner also prays for such other relief as may be deemed just and equitable in the premises. 37
chanrobleslaw
The City Assessor and City Treasurer of Lucena counter that: (1) MERALCO was obliged to pay the real
property tax due, instead of posting a surety bond, while its appeal was pending, because Section 231
of the Local Government Code provides that the appeal of an assessment shall not suspend the
collection of the real property taxes; (2) the cases cited by MERALCO can no longer be applied to the
case at bar since they had been decided when Presidential Decree No. 464, otherwise known as the
Real Property Tax Code, was still in effect; (3) under the now prevailing Local Government Code,
which expressly repealed the Real Property Tax Code, the transformers, electric posts, transmission
lines, insulators, and electric meters of MERALCO fall within the new definition of "machineries,"
deemed as real properties subject to real property tax; and (4) the Notice of Assessment dated
October 20, 1997 covering the transformers, electric posts, transmission lines, insulators, and electric
meters of MERALCO only retroacts to 1992, which is less than 10 years prior to the date of initial
assessment, so it is in compliance with Section 222 of the Local Government Code, and since
MERALCO has yet to pay the real property taxes due on said assessment, then it is just right and
appropriate that it also be held liable to pay for penalties and interests from 1992 to present time.
Ultimately, the City Assessor and City Treasurer of Lucena seek judgment denying the instant Petition
and ordering MERALCO to pay the real property taxes due.
The Petition is partly meritorious.
The Court finds that the transformers, electric posts, transmission lines, insulators, and electric meters
of MERALCO are no longer exempted from real property tax and may qualify as "machinery" subject to
real property tax under the Local Government Code. Nevertheless, the Court declares null and void
the appraisal and assessment of said properties of MERALCO by the City Assessor in 1997 for failure to
comply with the requirements of the Local Government Code and, thus, violating the right of
MERALCO to due process.
By posting a surety bond before

filing its appeal of the assessment with
the LBAA, MERALCO substantially complied
with the requirement of payment under
protest in Section 252 of the Local
Government Code.
Section 252 of the Local Government Code mandates that "[n]o protest shall be entertained unless
the taxpayer first pays the tax." It is settled that the requirement of "payment under protest" is a
condition sine qua non before an appeal may be entertained.38 Section 231 of the same Code also
dictates that "[a]ppeal on assessments of real property x x x shall, in no case, suspend the collection
of the corresponding realty taxes on the property involved as assessed by the provincial or city
assessor, without prejudice to subsequent adjustment depending upon the final outcome of the
appeal." Clearly, under the Local Government Code, even when the assessment of the real property is
appealed, the real property tax due on the basis thereof should be paid to and/or collected by the
local government unit concerned.
In the case at bar, the City Treasurer of Lucena, in his letter dated October 16, 1997, sought to collect
from MERALCO the amount of P17,925,l 17.34 as real property taxes on its machineries, plus
penalties, for the period of 1990 to 1997, based on Tax Declaration Nos. 019-6500 and 019-7394
issued by the City Assessor of Lucena. MERALCO appealed Tax Declaration Nos. 019-6500 and 019-
7394 with the LBAA, but instead of paying the real property taxes and penalties due, it posted a
surety bond in the amount of PI 7,925,117.34.
By posting the surety bond, MERALCO may be considered to have substantially complied with Section
252 of the Local Government Code for the said bond already guarantees the payment to the Office of
the City Treasurer of Lucena of the total amount of real property taxes and penalties due on Tax
Declaration Nos. 019-6500 and 019-7394. This is not the first time that the Court allowed a surety
bond as an alternative to cash payment of the real property tax before protest/appeal as required by
Section 252 of the Local Government Code. In Camp John Hay Development Corporation v. Central
Board of Assessment Appeals39 the Court affirmed the ruling of the CBAA and the Court of Tax Appeals
en bane applying the "payment under protest" requirement in Section 252 of the Local Government
Code and remanding the case to the LBAA for "further proceedings subject to a full and up-to-date
payment, either in cash or surety, of realty tax on the subject properties x x x."
Accordingly, the LBAA herein correctly took cognizance of and gave due course to the appeal of Tax
Declaration Nos. 019-6500 and 019-7394 filed by MERALCO.
Beginning January 1, 1992,

MERALCO can no longer claim
exemption from real property tax of
its transformers, electric posts,
transmission lines, insulators, and
electric meters based on its
franchise.
MERALCO relies heavily on the Decision dated April 10, 1991 of the CBAA in CBAA Case No. 248,
which affirmed the Decision dated July 5, 1989 of the LBAA in LBAA-89-2. Said decisions of the CBAA
and the LBAA, in turn, cited Board of Assessment Appeals v. Manila Electric Co.,40 which was decided
by the Court way back in 1964 (1964 MERALCO case). The decisions in CBAA Case No. 248 and
the 1964 MERALCO case recognizing the exemption from real property tax of the transformers,
electric posts, transmission lines, insulators, and electric meters of MERALCO are no longer applicable
because of subsequent developments that changed the factual and legal milieu for MERALCO in the
present case.
In the 1964 MERALCO case, the City Assessor of Quezon City considered the steel towers of MERALCO
as real property and required MERALCO to pay real property taxes for the said steel towers for the
years 1952 to 1956. MERALCO was operating pursuant to the franchise granted under Ordinance No.
44 dated March 24, 1903 of the Municipal Board of Manila, which it acquired from the original grantee,
Charles M. Swift. Under its franchise, MERALCO was expressly granted the following tax exemption
privilege:
cralawlawlibrary
Par 9. The grantee shall be liable to pay the same taxes upon its real estate, buildings, plant (not
including poles, wires, transformers, and insulators), machinery and personal property as other
persons are or may be hereafter required by law to pay. x x x Said percentage shall be due and
payable at the times stated in paragraph nineteen of Part One hereof, x x x and shall be in lieu of all
taxes and assessments of whatsoever nature, and by whatsoever authority upon the privileges,
earnings, income, franchise, and poles, wires, transformers, and insulators of the grantee from which
taxes and assessments the grantee is hereby expressly exempted, x x x.41 chanrobleslaw
Given the express exemption from taxes and assessments of the "poles, wires, transformers, and
insulators" of MERALCO in the aforequoted paragraph, the sole issue in the 1964 MERALCO case was
whether or not the steel towers of MERALCO qualified as "poles" which were exempted from real
property tax. The Court ruled in the affirmative, ratiocinating that: cralawlawlibrary
Along the streets, in the City of Manila, may be seen cylindrical metal poles, cubical concrete poles,
and poles of the PLDT Co. which are made of two steel bars joined together by an interlacing metal
rod. They are called "poles" notwithstanding the fact that they are not made of wood. It must be
noted from paragraph 9, above quoted, that the concept of the "poles" for which exemption is
granted, is not determined by their place or location, nor by the character of the electric current it
carries, nor the material or form of which it is made, but the use to which they are dedicated. In
accordance with the definitions, a pole is not restricted to a long cylindrical piece of wood or metal,
but includes "upright standards to the top of which something is affixed or by which something is
supported." As heretofore described, respondent's steel supports consist of a framework of four steel
bars or strips which are bound by steel cross-arms atop of which are cross-arms supporting five high
voltage transmission wires (See Annex A) and their sole function is to support or carry such wires.
The conclusion of the CTA that the steel supports in question are embraced in the term "poles" is not a
novelty. Several courts of last resort in the United States have called these steel supports "steel
towers", and they have denominated these supports or towers, as electric poles. In their decisions the
words "towers" and "poles" were used interchangeably, and it is well understood in that jurisdiction
that a transmission tower or pole means the same thing.
xxxx
It is evident, therefore, that the word "poles", as used in Act No. 484 and incorporated in the
petitioner's franchise, should not be given a restrictive and narrow interpretation, as to defeat the
very object for which the franchise was granted. The poles as contemplated thereon, should be
understood and taken as a part of the electric power system of the respondent Meralco, for the
conveyance of electric current from the source thereof to its consumers, x x x. 42 chanrobleslaw
Similarly, it was clear that under the 20-year franchise granted to MERALCO by the Municipal Board of
Lucena City through Resolution No. 2679 dated June 13, 1972, the transformers, electric posts,
transmission lines, insulators, and electric meters of MERALCO were exempt from real property tax.
Paragraph 13 of Resolution No. 2679 is quoted in full below: cralawlawlibrary
13. The grantee shall be liable to pay the same taxes upon its real estate, building, machinery, and
personal property (not including poles, wires, transformers, and insulators) as other persons
are now or may hereafter be required by law to pay. In consideration of the franchise and rights
hereby granted, the grantee shall pay into the City Treasury of Lucena a tax equal to FIVE (5%)
PER CENTUM of the gross earnings received from electric current sold or supplied under this
franchise. Said tax shall be due and payable quarterly and shall be in lieu of any and all taxes of
any kind, nature or description levied, established, or collected by any authority whatsoever,
municipal, provincial, or national, now or in the future, on its poles, wires, insulators, switches,
transformers and structures, installations, conductors, and accessories, placed in and over
and under all the private and/or public property, including public streets and highways, provincial
roads, bridges, and public squares, and on its franchise rights, privileges, receipts, revenues and
profits, from which taxes the grantee is hereby expressly exempted. (Emphases supplied.) chanrobleslaw
In CBAA Case No. 248 (and LBAA-89-2), the City Assessor assessed the transformers, electric posts,
transmission lines, insulators, and electric meters of MERALCO located in Lucena City beginning 1985
under Tax Declaration No. 019-6500. The CBAA in its Decision dated April 10, 1991 in CBAA Case No.
248 sustained the exemption of the said properties of MERALCO from real property tax on the basis of
paragraph 13 of Resolution No. 2679 and the 1964 MERALCO case.
Just when the franchise of MERALCO in Lucena City was about to expire, the Local Government Code
took effect on January 1, 1992, Sections 193 and 234 of which provide: cralawlawlibrary
Section 193. Withdrawal of Tax Exemption Privileges. - Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical,
including government-owned or controlled corporations, except local water districts, cooperatives duly
registered under R.A. No. 6938, non-stock and nonprofit hospitals and educational institutions, are
hereby withdrawn upon the effectivity of this Code.
Section 234. Exemptions from Real Property Tax. - The following are exempted from payment of the
real property tax: chanRoblesvirtualLawlibrary
(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except
when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable
person; ChanRoblesVirtualawlibrary
(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit
or religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively
used for religious, charitable or educational purposes; ChanRoblesVirtualawlibrary
(c) All machineries and equipment that are actually, directly and exclusively used by local water
districts and government-owned or controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power; ChanRoblesVirtualawlibrary
(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and
(e) Machinery and equipment used for pollution control and environmental protection.
Except as provided herein, any exemption from payment of real property tax previously granted to, or
presently enjoyed by, all persons, whether natural or juridical, including all government-owned or
controlled corporations are hereby withdrawn upon the effectivity of this Code. chanrobleslaw
The Local Government Code, in addition, contains a general repealing clause under Section 534(f)
which states that "[a]ll general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are inconsistent with any
of the provisions of this Code are hereby repealed or modified accordingly."
Taking into account the above-mentioned provisions, the evident intent of the Local Government Code
is to withdraw/repeal all exemptions from local taxes, unless otherwise provided by the Code. The
limited and restrictive nature of the tax exemption privileges under the Local Government Code is
consistent with the State policy to ensure autonomy of local governments and the objective of the
Local Government Code to grant genuine and meaningful autonomy to enable local government units
to attain their fullest development as self-reliant communities and make them effective partners in the
attainment of national goals. The obvious intention of the law is to broaden the tax base of local
government units to assure them of substantial sources of revenue. 43
Section 234 of the Local Government Code particularly identifies the exemptions from payment of real
property tax, based on the ownership, character, and use of the property, viz.: cralawlawlibrary
(a) Ownership Exemptions. Exemptions from real property taxes on the basis of ownership are real
properties owned by: (i) the Republic, (ii) a province, (iii) a city, (iv) a municipality, (v) a barangay,
and (vi) registered cooperatives.
(b) Character Exemptions. Exempted from real property taxes on the basis of their character are: (i)
charitable institutions, (ii) houses and temples of prayer like churches, parsonages or convents
appurtenant thereto, mosques, and (iii) nonprofit or religious cemeteries.
(c) Usage exemptions. Exempted from real property taxes on the basis of the actual, direct and
exclusive use to which they are devoted are: (i) all lands, buildings and improvements which are
actually directly and exclusively used for religious, charitable or educational purposes; (ii) all
machineries and equipment actually, directly and exclusively used by local water districts or by
government-owned or controlled corporations engaged in the supply and distribution of water and/or
generation and transmission of electric power; and (iii) all machinery and equipment used for pollution
control and environmental protection.
To help provide a healthy environment in the midst of the modernization of the country, all machinery
and equipment for pollution control and environmental protection may not be taxed by local
governments.
2. Other Exemptions Withdrawn. All other exemptions previously granted to natural or juridical
persons including government-owned or controlled corporations are withdrawn upon the effectivity of
the Code.44chanrobleslaw
The last paragraph of Section 234 had unequivocally withdrawn, upon the effectivity of the Local
Government Code, exemptions from payment of real property taxes granted to natural or juridical
persons, including government-owned or controlled corporations, except as provided in the same
section.
MERALCO, a private corporation engaged in electric distribution, and its transformers, electric posts,
transmission lines, insulators, and electric meters used commercially do not qualify under any of the
ownership, character, and usage exemptions enumerated in Section 234 of the Local Government
Code. It is a basic precept of statutory construction that the express mention of one person, thing,
act, or consequence excludes all others as expressed in the familiar maxim expressio unius est
exclusio alterius.45 Not being among the recognized exemptions from real property tax in Section 234
of the Local Government Code, then the exemption of the transformers, electric posts, transmission
lines, insulators, and electric meters of MERALCO from real property tax granted under its franchise
was among the exemptions withdrawn upon the effectivity of the Local Government Code on January
1, 1998.
It is worthy to note that the subsequent franchises for operation granted to MERALCO, i.e., under the
Certificate of Franchise dated October 28, 1993 issued by the National Electrification Commission and
Republic Act No. 9209 enacted on June 9, 2003 by Congress, are completely silent on the matter of
exemption from real property tax of MERALCO or any of its properties.
It is settled that tax exemptions must be clear and unequivocal. A taxpayer claiming a tax exemption
must point to a specific provision of law conferring on the taxpayer, in clear and plain terms,
exemption from a common burden. Any doubt whether a tax exemption exists is resolved against the
taxpayer.46MERALCO has failed to present herein any express grant of exemption from real property
tax of its transformers, electric posts, transmission lines, insulators, and electric meters that is valid
and binding even under the Local Government Code.
The transformers, electric posts,

transmission lines, insulators, and electric
meters of MERALCO may qualify as
"machinery" under the Local Government
Code subject to real property tax.
Through the years, the relevant laws have consistently considered "machinery" as real property
subject to real property tax. It is the definition of "machinery" that has been changing and expanding,
as the following table will show:chanRoblesvirtualLawlibrary
Real Property Incidence of Real
Definition of Machinery47
Tax Law Property Tax
The Assessment Section 2. Incidence of real Section 3. Property exempt
Law property tax.- Except in from tax. - The exemptions
(Commonwealth chartered cities, there shall shall be as follows:
Act No. 470) be levied, assessed, and xxxx
collected, an annual ad (f) Machinery, which term
Effectivity: valorem tax on real shall embrace machines,
January 1, 1940 property, including land, mechanical contrivances,
buildings, machinery, and instruments, appliances,
other improvements not and apparatus attached to
hereinafter specifically the real estate, used for
exempted. industrial agricultural or
manufacturing purposes,
during the first five years of
the operation of the
machinery.
Real Property Section 38. Incidence of Section 3. Definition of
Tax Code Real Property Tax. - There Terms. -
shall be levied, assessed When used in this Code -
Effectivity: June and collected in all
1, 1974 provinces, cities and xxxx
municipalities an annual ad
valorem tax on real (m) Machinery - shall
property, such as land, embrace machines,
buildings, machinery and mechanical contrivances,
other improvements affixed instruments, appliances
or attached to real property and apparatus attached to
not hereinafter specifically the real estate. It includes
exempted. the physical facilities
available for production, as
well as the installations and
appurtenant service
facilities, together with all
other equipment designed
for or essential to its
manufacturing, industrial or
Real Property Section 38. Incidence of Section 3. Definition of
Tax Code, as Real Property Tax. - There Terms.
amended by shall be levied, assessed When used in this Code -
Presidential and collected in all xxxx
Decree No. provinces, cities and
1383 municipalities an annual ad (m) Machinery - shall
valorem tax on real embrace machines,
Effectivity: May property, such as land, equipment, mechanical
25, 1978 buildings, machinery and contrivances, instruments,
other improvements affixed appliances and apparatus
or attached to real property attached to the real estate.
not hereinafter specifically It shall include the physical
exempted. facilities available for
production, as well as the
installations and
appurtenant service
facilities, together with all
those not permanently
attached to the real estate
but are actually, directly
and essentially used to
meet the needs of the
particular industry,
business, or works, which
by their very nature and
purpose are designed for,
or essential to
manufacturing,
commercial, mining,
industrial or agricultural
purposes.
Local Section 232. Power to Levy Section 199. Definitions. -
Government Real Property Tax. — A When used in this Title:
Code province or city or a xxxx
municipality within the
Effectivity: Metropolitan Manila Area (o) "Machinery" embraces
January 1, 1992 may levy an annual ad machines, equipment,
valorem tax on real mechanical contrivances,
property such as land, instruments, appliances or
building, machinery, and apparatuswhich may or
other improvement not may not be attached,
hereinafter specifically permanently or
exempted. temporarily, to the real
property. It includes the
physical facilities for
production, the installations
and appurtenant service
facilities, those which are
mobile, self-powered or
self- propelled, and those
not permanently attached
to the real property which
are actually, directly, and
exclusively used to meet
the needs of the particular
industry, business or
activity and which by their
very nature and purpose
are designed for, or
necessary to its
manufacturing,
mining,logging,
commercial, industrial or
agricultural purposes[.]
MERALCO is a public utility engaged in electric distribution, and its transformers, electric posts,
transmission lines, insulators, and electric meters constitute the physical facilities through which
MERALCO delivers electricity to its consumers. Each may be considered as one or more of the
following: a
"machine,"48 "equipment,"49 "contrivance,"50 "instrument,"51 "appliance,"52 "apparatus,"53 or
"installation."54
The Court highlights that under Section 199(o) of the Local Government Code, machinery, to be
deemed real property subject to real property tax, need no longer be annexed to the land or building
as these "may or may not be attached, permanently or temporarily to the real property," and in fact,
such machinery may even be "mobile."55 The same provision though requires that to be machinery
subject to real property tax, the physical facilities for production, installations, and appurtenant
service facilities, those which are mobile, self-powered or self-propelled, or not permanently attached
to the real property (a) must be actually, directly, and exclusively used to meet the needs of the
particular industry, business, or activity; and (2) by their very nature and purpose, are designed for,
or necessary for manufacturing, mining, logging, commercial, industrial, or agricultural purposes.
Thus, Article 290(o) of the Rules and Regulations Implementing the Local Government Code of 1991
recognizes the following exemption: cralawlawlibrary
Machinery which are of general purpose use including but not limited to office equipment,
typewriters, telephone equipment, breakable or easily damaged containers (glass or cartons),
microcomputers, facsimile machines, telex machines, cash dispensers, furnitures and fixtures,
freezers, refrigerators, display cases or racks, fruit juice or beverage automatic dispensing machines
which are not directly and exclusively used to meet the needs of a particular industry, business or
activity shall not be considered within the definition of machinery under this Rule. (Emphasis
supplied.)chanrobleslaw
The 1964 MERALCO case was decided when The Assessment Law was still in effect and Section 3(f) of
said law still required that the machinery be attached to the real property. Moreover, as the Court
pointed out earlier, the ruling in the 1964 MERALCO case - that the electric poles (including the steel
towers) of MERALCO are not subject to real property tax - was primarily based on the express
exemption granted to MERALCO under its previous franchise. The reference in said case to the Civil
Code definition of real property was only an alternative argument: cralawlawlibrary
Granting for the purpose of argument that the steel supports or towers in question are not
embraced within the term poles, the logical question posited is whether they constitute real
properties, so that they can be subject to a real property tax. The tax law does not provide for
a definition of real property; but Article 415 of the Civil Code does, by stating the following are
immovable property: cralawlawlibrary
(1) Land, buildings, roads, and constructions of all kinds adhered to the soil; ChanRoblesVirtualawlibrary
xxxx
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object; ChanRoblesVirtualawlibrary
xxxx
industry or works which may be carried in a building or on a piece of land, and which tends directly to
meet the needs of the said industry or works; ChanRoblesVirtualawlibrary
xxxx
The steel towers or supports in question, do not come within the objects mentioned in paragraph 1,
because they do not constitute buildings or constructions adhered to the soil. They are not
constructions analogous to buildings nor adhering to the soil. As per description, given by the lower
court, they are removable and merely attached to a square metal frame by means of bolts, which
when unscrewed could easily be dismantled and moved from place to place. They can not be included
under paragraph 3, as they are not attached to an immovable in a fixed manner, and they can be
separated without breaking the material or causing deterioration upon the object to which they are
attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together
by means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing
the same. These steel towers or supports do not also fall under paragraph 5, for they are not
machineries or receptacles, instruments or implements, and even if they were, they are not intended
for industry or works on the land. Petitioner is not engaged in an industry or works on the land in
which the steel supports or towers are constructed.56(Emphases supplied.) chanrobleslaw
The aforequoted conclusions of the Court in the 1964 MERALCO case do not hold true anymore under
the Local Government Code.
While the Local Government Code still does not provide for a specific definition of "real property,"
Sections 199(o) and 232 of the said Code, respectively, gives an extensive definition of what
constitutes "machinery" and unequivocally subjects such machinery to real property tax. The Court
reiterates that the machinery subject to real property tax under the Local Government Code "may or
may not be attached, permanently or temporarily to the real property;" and the physical facilities for
production, installations, and appurtenant service facilities, those which are mobile, self-powered or
self-propelled, or are not permanently attached must (a) be actually, directly, and exclusively used to
meet the needs of the particular industry, business, or activity; and (2) by their very nature and
purpose, be designed for, or necessary for manufacturing, mining, logging, commercial, industrial, or
Article 415, paragraph (1) of the Civil Code declares as immovables or real properties "[l]and,
buildings, roads and constructions of all kinds adhered to the soil." The land, buildings, and roads are
immovables by nature "which cannot be moved from place to place," whereas the constructions
adhered to the soil are immovables by incorporation "which are essentially movables, but are attached
to an immovable in such manner as to be an integral part thereof." 57 Article 415, paragraph (3) of the
Civil Code, referring to "[ejverything attached to an immovable in a fixed manner, in such a way that
it cannot be separated therefrom without breaking the material or deterioration of the object," are
likewise immovables by incorporation. In contrast, the Local Government Code considers as real
property machinery which "may or may not be attached, permanently or temporarily to the real
property," and even those which are "mobile."
Article 415, paragraph (5) of the Civil Code considers as immovables or real properties "[machinery,
receptacles, instruments or implements intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works." The Civil Code, however, does not define "machinery."
The properties under Article 415, paragraph (5) of the Civil Code are immovables by destination, or
"those which are essentially movables, but by the purpose for which they have been placed in an
immovable, partake of the nature of the latter because of the added utility derived therefrom." 58 These
properties, including machinery, become immobilized if the following requisites concur: (a) they are
placed in the tenement by the owner of such tenement; (b) they are destined for use in the industry
or work in the tenement; and (c) they tend to directly meet the needs of said industry or works. 59 The
first two requisites are not found anywhere in the Local Government Code.
MERALCO insists on harmonizing the aforementioned provisions of the Civil Code and the Local
Government Code. The Court disagrees, however, for this would necessarily mean imposing additional
requirements for classifying machinery as real property for real property tax purposes not provided
for, or even in direct conflict with, the provisions of the Local Government Code.
As between the Civil Code, a general law governing property and property relations, and the Local
Government Code, a special law granting local government units the power to impose real property
tax, then the latter shall prevail. As the Court pronounced in Disomangcop v. The Secretary of the
Department of Public Works and Highways Simeon A. Datumanong 60: cralawlawlibrary
It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a
general one. Lex specialis derogant generali. As this Court expressed in the case of Leveriza v.
Intermediate Appellate Court, "another basic principle of statutory construction mandates that general
legislation must give way to special legislation on the same subject, and generally be so interpreted as
to embrace only cases in which the special provisions are not applicable, that specific statute prevails
over a general statute and that where two statutes are of equal theoretical application to a particular
case, the one designed therefor specially should prevail." (Citations omitted.) chanrobleslaw
The Court also very clearly explicated in Vinzons-Chato v. Fortune Tobacco Corporation61 that: cralawlawlibrary
A general law and a special law on the same subject are statutes in pah materia and should,
accordingly, be read together and harmonized, if possible, with a view to giving effect to both. The
rule is that where there are two acts, one of which is special and particular and the other general
which, if standing alone, would include the same matter and thus conflict with the special act, the
special law must prevail since it evinces the legislative intent more clearly than that of a general
statute and must not be taken as intended to affect the more particular and specific provisions of the
earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at
all.
The circumstance that the special law is passed before or after the general act does not change the
principle. Where the special law is later, it will be regarded as an exception to, or a qualification of, the
prior general act; and where the general act is later, the special statute will be construed as remaining
an exception to its terms, unless repealed expressly or by necessary implication. (Citations omitted.) chanrobleslaw
Furthermore, in Caltex (Philippines), Inc. v. Central Board of Assessment Appeals,62 the Court
acknowledged that "[i]t is a familiar phenomenon to see things classed as real property for purposes
of taxation which on general principle might be considered personal property[.]"
Therefore, for determining whether machinery is real property subject to real property tax, the
definition and requirements under the Local Government Code are controlling.
MERALCO maintains that its electric posts are not machinery subject to real property tax because said
posts are not being exclusively used by MERALCO; these are also being utilized by cable and
telephone companies. This, however, is a factual issue which the Court cannot take cognizance of in
the Petition at bar as it is not a trier of facts. Whether or not the electric posts of MERALCO are
actually being used by other companies or industries is best left to the determination of the City
Assessor or his deputy, who has been granted the authority to take evidence under Article 304 of the
Rules and Regulations Implementing the Local Government Code of 1991.
Nevertheless, the appraisal and

assessment of the transformers, electric
posts, transmission lines, insulators, and
electric meters of MERALCO as machinery
under Tax Declaration Nos. 019-6500 and
019-7394 were not in accordance with the
Local Government Code and in violation of
the right to due process of MERALCO and,
therefore, null and void.
The Local Government Code defines "appraisal" as the "act or process of determining the value of
property as of a specific date for a specific purpose." "Assessment" is "the act or process of
determining the value of a property, or proportion thereof subject to tax, including the discovery,
listing, classification, and appraisal of the properties[.]"63 When it comes to machinery, its appraisal
and assessment are particularly governed by Sections 224 and 225 of the Local Government Code,
which read: cralawlawlibrary
Section 224. Appraisal and Assessment of Machinery. - (a) The fair market value of a brand-new
machinery shall be the acquisition cost. In all other cases, the fair market value shall be determined
by dividing the remaining economic life of the machinery by its estimated economic life and multiplied
by the replacement or reproduction cost.
(b) If the machinery is imported, the acquisition cost includes freight, insurance, bank and other
charges, brokerage, arrastre and handling, duties and taxes, plus cost of inland transportation,
handling, and installation charges at the present site. The cost in foreign currency of imported
machinery shall be converted to peso cost on the basis of foreign currency exchange rates as fixed by
the Central Bank.
Section 225. Depreciation Allowance for Machinery. - For purposes of assessment, a depreciation
allowance shall be made for machinery at a rate not exceeding five percent (5%) of its original cost or
its replacement or reproduction cost, as the case may be, for each year of use: Provided,
however, That the remaining value for all kinds of machinery shall be fixed at not less than twenty
percent (20%) of such original, replacement, or reproduction cost for so long as the machinery is
useful and in operation. chanrobleslaw
It is apparent from these two provisions that every machinery must be individually appraised and
assessed depending on its acquisition cost, remaining economic life, estimated economic life,
replacement or reproduction cost, and depreciation.
Article 304 of the Rules and Regulations Implementing the Local Government Code of 1991 expressly
authorizes the local assessor or his deputy to receive evidence for the proper appraisal and
assessment of the real property: cralawlawlibrary
Article 304. Authority of Local Assessors to Take Evidence. - For the purpose of obtaining information
on which to base the market value of any real property, the assessor of the province, city, or
municipality or his deputy may summon the owners of the properties to be affected or persons having
legal interest therein and witnesses, administer oaths, and take deposition concerning the property, its
ownership, amount, nature, and value.
chanrobleslaw
The Local Government Code further mandates that the taxpayer be given a notice of the assessment
of real property in the following manner: cralawlawlibrary
Section 223. Notification of New or Revised Assessment. - When real property is assessed for the first
time or when an existing assessment is increased or decreased, the provincial, city or municipal
assessor shall within thirty (30) days give written notice of such new or revised assessment to the
person in whose name the property is declared. The notice may be delivered personally or by
registered mail or through the assistance of the punong barangay to the last known address of the
person to served. chanrobleslaw
A notice of assessment, which stands as the first instance the taxpayer is officially made aware of the
pending tax liability, should be sufficiently informative to apprise the taxpayer the legal basis of the
tax.64 In Manila Electric Company v. Barlis,65 the Court described the contents of a valid notice of
assessment of real property and differentiated the same from a notice of collection: cralawlawlibrary
A notice of assessment as provided for in the Real Property Tax Code should effectively inform the
taxpayer of the value of a specific property, or proportion thereof subject to tax, including the
discovery, listing, classification, and appraisal of properties. The September 3, 1986 and October 31,
1989 notices do not contain the essential information that a notice of assessment must specify,
namely, the value of a specific property or proportion thereof which is being taxed, nor does it state
the discovery, listing, classification and appraisal of the property subject to taxation. In fact, the tenor
of the notices bespeaks an intention to collect unpaid taxes, thus the reminder to the taxpayer that
the failure to pay the taxes shall authorize the government to auction off the properties subject to
taxes x x x. chanrobleslaw
Although the ruling quoted above was rendered under the Real Property Tax Code, the requirement of
a notice of assessment has not changed under the Local Government Code.
A perusal of the documents received by MERALCO on October 29, 1997 reveals that none of them
constitutes a valid notice of assessment of the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO.
The letter dated October 16, 1997 of the City Treasurer of Lucena (which interestingly precedes the
purported Notice of Assessment dated October 20, 1997 of the City Assessor of Lucena) is a notice of
collection, ending with the request for MERALCO to settle the payable amount soon in order to avoid
accumulation of penalties. It only presented in table form the tax declarations covering the machinery,
assessed values in the tax declarations in lump sums for all the machinery, the periods covered, and
the taxes and penalties due again in lump sums for all the machinery.
The Notice of Assessment dated October 20, 1997 issued by the City Assessor gave a summary of the
new/revised assessment of the "machinery" located in "Quezon Avenue Ext., Brgy. Gulang-Gulang,
Lucena City," covered by Tax Declaration No. 019-7394, with total market value of P98,173,200.00
and total assessed value of P78,538,560.00. The Property Record Form basically contained the same
information. Without specific description or identification of the machinery covered by said tax
declaration, said Notice of Assessment and Property Record Form give the false impression that there
is only one piece of machinery covered.
In Tax Declaration No. 019-6500, the City Assessor reported its findings under "Building and
Improvements" and not "Machinery." Said tax declaration covered "capital investment-commercial,"
specifically: (a) Transformer and Electric Post; (b) Transmission Line, (c) Insulator, and (d) Electric
Meter, with a total market value of P81,811,000.00, assessment level of 80%, and assessed value of
£65,448,800.00. Conspicuously, the table for "Machinery" - requiring the description, date of
operation, replacement cost, depreciation, and market value of the machinery - is totally blank.
MERALCO avers, and the City Assessor and the City Treasurer of Lucena do not refute at all, that
MERALCO has not been furnished the Owner's Copy of Tax Declaration No. 019-7394, in which the
total market value of the machinery of MERALCO was increased by PI6,632,200.00, compared to that
in Tax Declaration No. 019-6500.
The Court cannot help but attribute the lack of a valid notice of assessment to the apparent lack of a
valid appraisal and assessment conducted by the City Assessor of Lucena in the first place. It appears
that the City Assessor of Lucena simply lumped together all the transformers, electric posts,
transmission lines, insulators, and electric meters of MERALCO located in Lucena City under Tax
Declaration Nos. 019-6500 and 019-7394, contrary to the specificity demanded under Sections 224
and 225 of the Local Government Code for appraisal and assessment of machinery. The City Assessor
and the City Treasurer of Lucena did not even provide the most basic information such as the number
of transformers, electric posts, insulators, and electric meters or the length of the transmission lines
appraised and assessed under Tax Declaration Nos. 019-6500 and 019-7394. There is utter lack of
factual basis for the assessment of the transformers, electric posts, transmission lines, insulators, and
electric meters of MERALCO.
The Court of Appeals laid the blame on MERALCO for the lack of information regarding its
transformers, electric posts, transmission lines, insulators, and electric meters for appraisal and
assessment purposes because MERALCO failed to file a sworn declaration of said properties as
required by Section 202 of the Local Government Code. As MERALCO explained, it cannot be expected
to file such a declaration when all the while it believed that said properties were personal or movable
properties not subject to real property tax. More importantly, Section 204 of the Local Government
Code exactly covers such a situation, thus: cralawlawlibrary
Section 204. Declaration of Real Property by the Assessor. -When any person, natural or juridical, by
whom real property is required to be declared under Section 202 hereof, refuses or fails for any
reason to make such declaration within the time prescribed, the provincial, city or municipal assessor
shall himself declare the property in the name of the defaulting owner, if known, or against an
unknown owner, as the case may be, and shall assess the property for taxation in accordance with the
provision of this Title. No oath shall be required of a declaration thus made by the provincial, city or
municipal assessor. chanrobleslaw
Note that the only difference between the declarations of property made by the taxpayer, on one
hand, and the provincial/city/municipal assessor, on the other, is that the former must be made under
oath. After making the declaration of the property himself for the owner, the provincial/city/municipal
assessor is still required to assess the property for taxation in accordance with the provisions of the
Local Government Code.
It is true that tax assessments by tax examiners are presumed correct and made in good faith, with
the taxpayer having the burden of proving otherwise. 66 In this case, MERALCO was able to overcome
the presumption because it has clearly shown that the assessment of its properties by the City
Assessor was baselessly and arbitrarily done, without regard for the requirements of the Local
Government Code.
The exercise of the power of taxation constitutes a deprivation of property under the due process
clause, and the taxpayer's right to due process is violated when arbitrary or oppressive methods are
used in assessing and collecting taxes. 67 The Court applies by analogy its pronouncements
in Commissioner of Internal Revenue v. United Salvage and Towage (Phils.), Inc.,68 concerning an
assessment that did not comply with the requirements of the National Internal Revenue Code: cralawlawlibrary
On the strength of the foregoing observations, we ought to reiterate our earlier teachings that "in
balancing the scales between the power of the State to tax and its inherent right to prosecute
perceived transgressors of the law on one side, and the constitutional rights of a citizen to due process
of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual,
for a citizen's right is amply protected by the Bill of Rights under the Constitution." Thus, while "taxes
are the lifeblood of the government," the power to tax has its limits, in spite of all its plenitude. Even
as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic
regimes that it be exercised reasonably and in accordance with the prescribed procedure. (Citations
omitted.) chanrobleslaw
The appraisal and assessment of the transformers, electric posts, transmission lines, insulators, and
electric meters of MERALCO under Tax Declaration Nos. 019-6500 and 019-7394, not being in
compliance with the Local Government Code, are attempts at deprivation of property without due
process of law and, therefore, null and void.
WHEREFORE, premises considered, the Court PARTLY GRANTS the instant Petition and AFFIRMS
with MODIFICATION the Decision dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No.
67027, affirming in toto the Decision dated May 3, 2001 of the Central Board of Assessment Appeals
in CBAA Case No. L-20-98. The Court DECLARES that the transformers, electric posts, transmission
lines, insulators, and electric meters of Manila Electric Company are NOT EXEMPTED from real
property tax under the Local Government Code. However, the Court also DECLARES the appraisal
and assessment of the said properties under Tax Declaration Nos. 019-6500 and 019-7394
as NULL and VOID for not complying with the requirements of the Local Government Code and
violating the right to due process of Manila Electric Company, and ORDERS the CANCELLATION of
the collection letter dated October 16, 1997 of the City Treasurer of Lucena and the Notice of
Assessment dated October 20, 1997 of the City Assessor of Lucena, but WITHOUT PREJUDICE to
the conduct of a new appraisal and assessment of the same properties by the City Assessor of Lucena
in accord with the provisions of the Local Government Code and guidelines issued by the Bureau of
Local Government Financing.
SO ORDERED. chanroblesvirtuallawlibrary
Sereno, CJ., (Chairperson), Bersamin, Perez, and Perlas-Bernabe, JJ., concur.
Endnotes:
1
Rollo, pp. 27-34; penned by Associate Justice B. A. Adefuin-De La Cruz with Associate Justices Perlita
J. Tria Tirana and Arturo D. Brion (now a member of this Court), concurring.
2
Id. at 36-37; penned by Associate Justice Perlita J. Tria Tirana with Associate Justices Arturo D. Brion
and Fernanda Lampas Peralta, concurring.
3
Id. at 59-69; signed by Chairman Cesar S. Gutierrez and Members Angel P. Palomares and Benjamin
M. Kasala.
4
Id. at 52-56; signed by Chairman Alberto P. Marquez and Members Romeo Dato and Alfonso A.
Custodio.
5
Erroneously dated June 17, 1997.
6
CA rollo, p. 69. As stated in Resolution No. 108 dated July 1, 1957 of the Municipal Council of
Lucena, Quezon.
7
Id. at 69-73.
8
CA rollo, pp. 74-77.
9
Lucena became a city by virtue of Republic Act No. 3271, enacted on June 17, 1961.
10
CA rollo, p. 80.
An Act Granting the Manila Electric Company a Franchise to Construct, Operate and Maintain a
11
Distribution System for the Conveyance of Electric Power to the End-Users in the Cities/Municipalities
of Metro Manila, Bulacan, Cavite and Rizal, and Certain Cities/Municipalities/Barangays in Batangas,
Laguna, Quezon and Pampanga.
12
In compliance with Sections 22 and 27 of Republic Act No. 9136, otherwise known as the Electric
Power Industry Reform Act of 2001, which state, respectively, that "[t]he distribution of electricity to
end-users shall be a regulated common carrier business requiring a national franchise" and "[t]he
power to grant franchises to persons engaged in the transmission and distribution of electricity shall
be vested exclusively in the Congress of the Philippines."
13
Rollo, p. 50.
14
CA rollo, pp. 52-57. Signed by Chairman Elpidio G. Jorvina and Members Patricio C. Haway and Jose
E. Lao.
15
Id. at 55.
16
119 Phil. 328(1964).
17
CA rollo, p. 57.
18
Id. at 59-68. Signed by Chairman Jesus F. Estanislao (Secretary of Finance) and Members Franklin
M. Drilon (Secretary of Justice) and Luis T. Santos (Secretary of Interior and Local Government).
19
Rollo, p. 47.
20
Id. at 48.
21
Id. at 49.
22
Id. at 50.
23
CA rollo, pp. 43-47. Issued by The Mercantile Insurance Co., Inc. in the amount of P17,925,117.34.
24
Lowering the Cost to Consumers of Electricity by Reducing the Franchise Tax Payable by Electric
Franchise Holders and the Tariff on Fuel Oils for the Generation of Electric Power by Public Utilities.
25
Rollo, p. 56.
26
Id. at 62-65.
27
Id. at 65-66.
28
Id. at 69.
29
Id. at 57. Signed by Chairman Cesar S. Gutierrez and Members Angel P. Palomares and Benjamin
M. Kasala.
30
Id. at 29-30.
31
Id. at 31.
32
Id. at 32.
33
Id. at 34.
34
Id. at 12.
35
Section 221. Date of Effectivity of Assessment or Reassessment. ~~ All assessments or
reassessments made after the first (1st) day of January of any year shall take effect on the first (1 st)
day of January of the succeeding year: Provided, however, That the reassessment of real property due
to its partial or total destruction, or to a major change in its actual use, or to any great and sudden
inflation or deflation of real property values, or to the gross illegality of the assessment when made or
to any other abnormal cause, shall be made within ninety (90) days from the date any such cause or
causes occurred, and shall take effect at the beginning of the quarter next following the reassessment.
36
Section 222. Assessment of Property Subject to Back Taxes. - Real property declared for the first
time shall be assessed for taxes for the period during which it would have been liable but in no case
for more than ten (10) years prior to the date of initial assessment: Provided, however, That such
taxes shall be computed on the basis of the applicable schedule of values in force during the
corresponding period.
If such taxes are paid on or before the end of the quarter following the date the notice of assessment
was received by the owner or his representative, no interest for delinquency shall be imposed
thereon; otherwise such taxes shall be subject to an interest at the rate of two percent (2%) per
month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully
paid.
Rollo, p. 22.
37
Camp John Hay Development Corporation v. Central Board of Assessment Appeals, G.R. No. 169234,
38
October 2, 2013, 706 SCRA 547, 563.
39
Id. at 570.
40
Supra note 16.
41
Id. at 331.
42
Id. at 331-333.
Philippine Rural Electric Cooperatives Association, Inc. v. The Secretary, Department of Interior and
43
Local Government, 451 Phil. 683, 698 (2003), citing Mactan Cebu International Airport Authority v.
Marcos, 330 Phil. 392, 417 (1996).
44
Mactan Cebu International Airport Authority v. Marcos, id. at 410-411, citing Pimentel, Aquilino Jr.,
THE LOCAL GOVERNMENT CODE of 1991 — The Key to National Development [1933], 329.
National Power Corporation v. City of Cabanatuan, 449 Phil. 233, 259 (2003).
45
Digital Telecommunications Philippines, Inc. v. City Government ofBatangas, 594 Phil. 269 299
46
(2008).
47
Emphases on the substantial changes introduced by the succeeding law.
48
"Machine" is a piece of equipment with moving parts that does work when it is given power from
electricity, gasoline, etc.; an assemblage of parts that transmit forces, motion, and energy one to
another in a predetermined manner; an instrument (as a lever) designed to transmit or modify the
application of power, force, or motion; or a mechanically, electrically, or electronically operated device
for performing a task, (http://www.men-iam-webster.com/dictionary/machine, last visited on July
15,2015)
"Equipment" is the set of articles or physical resources serving to equip a person or thing;
49
apparatus; the implements used in an operation or activity; or all the fixed assets other than land and
buildings of a business enterprise; or a piece of such equipment. (http://www.merriam-
webster.com/dictionary/equipment, last visited on July 15, 2015)
50
"Contrivance" is a machine or piece of equipment made with skill and cleverness; or a thing
contrived, especially, a mechanical device, (http://www.merriam-webster.com/ dictionary/
contrivance, last visited on July 15, 2015)
51
"Instrument" is a tool or device used for a particular purpose, especially, a tool or device designed
to do careful and exact work; implement, especially, one designed for precision work; a relatively
simple device for performing work, (http://www.merriam-webster.com/dictionary/instrument, last
visited July 15,2015)
52
"Appliance" is a piece of equipment for adapting a tool or machine to a special purpose; an
instrument or device designed for a particular use or function (an orthodontic appliance); specifically,
a household or office device (as a stove, fan, or refrigerator) operated by gas or electric current; or a
tool or instrument utilising a power source and suggests portability or temporary attachment
(household appliances). (http://www.merriam- webster.com/dictionary/appliance, last visited on July
15, 2015)
53
"Apparatus" is a tool or piece of equipment used for specific activities; or an instrument or appliance
designed for a specific operation, (http://www.merriam-webster.com/dictionary/ apparatus, last
visited July 15, 2015)
54
"Installation" is something (such as a piece of equipment) that is put together and made ready for
use. (http://www.merriam-webster.com/dictionary/installation, last visited on July 15, 2015)
55
"Mobile" means capable of moving or being moved; or movable (a mobile missile launcher).
(http://www.inerriam-webster.com/dictionary/mobile, last visited July 15, 2015)
Board of Assessment Appeals v. Manila Electric Company, supra note 16 at334-335.

56
57
Tolentino, CIVIL CODE OF THE PHILIPPINES, Vol. II (1992 ed) p. 13.
58
Id.
59
Id. at 18-20.
60
486 Phil. 398, 448 (2004).
61
552 Phil. 101, 111 (2007).
62
199 Phil. 487, 492 (1982).
63
Section 199(e-f).
Yamane v. BA Lepanto Condominium Corporation, 510 Phil. 750, 770 (2005).

64
65
426 Phil. 280, 284 (2002).
Cagayan Robina Sugar Milling Company v. Court of Appeals, 396 Phil. 830, 839 (2000).
66
Yarnane v. BA Lepanlo Condominium Corporation, supra note 64 at 776.
67
68
G.R. No. 197515, July 2, 2014, 729 SCRA 113, 136.
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES, G. R. No. 185124

represented by the NATIONAL
IRRIGATION ADMINISTRATION
(NIA),
Petitioner,
- versus - Present:
RURAL BANK OF KABACAN, INC., CARPIO, J., Chairperson,

LITTIE SARAH A. AGDEPPA, PEREZ,
LEOSA NANETTE AGDEPPA and SERENO,
MARCELINO VIERNES, REYES, and
MARGARITA TABOADA, PORTIA PERLAS-BERNABE, JJ.*
CHARISMA RUTH ORTIZ,
represented by LINA ERLINDA A. Promulgated:
ORTIZ and MARIO ORTIZ, JUAN
MAMAC and GLORIA MATAS, January 25, 2012
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
SERENO, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of

the Rules of Court, seeking the reversal of the 12 August 2008 Court of
Appeals (CA) Decision and 22 October 2008 Resolution in CA-G.R. CV No.
65196.
The assailed issuances affirmed with modification the 31 August 1999
Judgment promulgated by the Regional Trial Court (RTC), Branch 22, Judicial
Region, Kabacan, Cotabato. The RTC had fixed the just compensation for the
value of the land and improvements thereon that were expropriated by
petitioner, but excluded the value of the excavated soil. Petitioner Republic of
the Philippines is represented in this case by the National Irrigation Authority
(NIA).
The Facts
NIA is a government-owned-and-controlled corporation created under
Republic Act No. (R.A.) 3601 on 22 June 1963. It is primarily responsible for
irrigation development and management in the country. Its charter was
amended by Presidential Decree (P.D.) 552 on 11 September 1974 and P.D.
1702 on 17 July 1980. To carry out its purpose, NIA was specifically
authorized under P.D. 552 to exercise the power of eminent domain.[1]
NIA needed some parcels of land for the purpose of constructing the
Malitubog-Marigadao Irrigation Project. On 08 September 1994, it filed with
the RTC of Kabacan, Cotabato a Complaint for the expropriation of a portion
of three (3) parcels of land covering a total of 14,497.91 square meters. [2] The
case was docketed as Special Civil Case No. 61 and was assigned to RTC-
Branch 22. The affected parcels of land were the following:
1) Lot No. 3080 covered by Transfer Certificate of Title (TCT)
No. T-61963 and registered under the Rural Bank of Kabacan
2) Lot No. 455 covered by TCT No. T-74516 and registered
under the names of RG May, Ronald and Rolando, all
surnamed Lao
3) Lot No. 3039 registered under the name of Littie Sarah
Agdeppa[3]
On 11 July 1995, NIA filed an Amended Complaint to include Leosa
Nanette A. Agdeppa and Marcelino Viernes as registered owners of Lot No.
3039.[4]
On 25 September 1995, NIA filed a Second Amended Complaint to

allege properly the area sought to be expropriated, the exact address of the
expropriated properties and the owners thereof. NIA further prayed that it be
authorized to take immediate possession of the properties after depositing with
the Philippine National Bank the amount of ₱19,246.58 representing the
provisional value thereof.[5]
On 31 October 1995, respondents filed their Answer with Affirmative

and Special Defenses and Counterclaim.[6] They alleged, inter alia, that NIA
had no authority to expropriate portions of their land, because it was not a
sovereign political entity; that it was not necessary to expropriate their
properties, because there was an abandoned government property adjacent to
theirs, where the project could pass through; that Lot No. 3080 was no longer
owned by the Rural Bank of Kabacan; that NIAs valuation of their
expropriated properties was inaccurate because of the improvements on the
land that should have placed its value at ₱5 million; and that NIA never
negotiated with the landowners before taking their properties for the project,
causing permanent and irreparable damages to their properties valued at
₱250,000.[7]
On 11 September 1996, the RTC issued an Order forming a committee

tasked to determine the fair market value of the expropriated
properties to establish the just compensation to be paid to the owners. The
committee was composed of the Clerk of Court of RTC Branch 22 as
chairperson and two (2) members of the parties to the case.[8]
On 20 September 1996, in response to the expropriation Complaint,

respondents-intervenors Margarita Tabaoda, Portia Charisma Ruth Ortiz, Lina
Erlinda Ortiz, Mario Ortiz, Juan Mamac and Gloria Matas filed their Answer-
in-Intervention with Affirmative and Special Defenses and Counter-Claim.
They essentially adopted the allegations in the Answer of the other
respondents and pointed out that Margarita Tabaoda and Portia Charisma Ruth
Ortiz were the new owners of Lot No. 3080, which the two acquired from the
Rural Bank of Kabacan. They further alleged that the four other respondents-
intervenors were joint tenants-cultivators of Lot Nos. 3080 and 3039.[9]
On 10 October 1996, the lower court issued an Order stating it would

issue a writ of possession in favor of NIA upon the determination of the fair
market value of the properties, subject of the expropriation proceedings.
[10]
The lower court later amended its ruling and, on 21 October 1996, issued a
Writ of Possession in favor of NIA.[11]
On 15 October 1996, the committee submitted a Commissioners

Report[12] to the RTC stating the following observations:
In the process of ocular inspection, the following were jointly
observed:
1) The area that was already occupied is 6x200 meters which is equivalent
to 1,200 square meters;
2) The area which is to be occupied is 18,930 square meters, more or less;
3) That the area to be occupied is fully planted by gmelina trees with a

spacing of 1x1 meters;
4) That the gmelina tress found in the area already occupied and used for
[the] road is planted with gmelina with spacing of 2x2 and more or less
one (1) year old;
5) That the gmelina trees found in the area to be occupied are already four
(4) years old;
6) That the number of banana clumps (is) two hundred twenty (220);
7) That the number of coco trees found (is) fifteen (15).[13]
The report, however, stated that the committee members could not agree
on the market value of the subject properties and recommended the
appointment of new independent commissioners to replace the ones coming
from the parties only.[14]On 22 October 1996, the RTC issued an
Order[15] revoking the appointments of Atty. Agdeppa and Engr. Mabang as
members of the committee and, in their stead, appointed Renato Sambrano,
Assistant Provincial Assessor of the Province of Cotabato; and Jack
Tumacmol, Division Chief of the Land Bank of the PhilippinesKidapawan
Branch.[16]
On 25 November 1996, the new committee submitted its

Commissioners Report to the lower court. The committee had agreed that the
fair market value of the land to be expropriated should be ₱65 per square
meter based on the zonal valuation of the Bureau of Internal Revenue (BIR).
As regards the improvement on the properties, the report recommended the
following compensation:
a. ₱200 for each gmelina tree that are more than four (4) years old
b. ₱150 for each gmelina tree that are more than one (1) year old
c. ₱164 for each coco tree
d. ₱270 for each banana clump[17]
On 03 December 1997, the committee submitted to the RTC another

report, which had adopted the first Committee Report, as well as the formers
25 November 1996 report. However, the committee added to its computation
the value of the earthfill excavated from portions of Lot Nos. 3039 and 3080.
[18]
Petitioner objected to the inclusion of the value of the excavated soil in the
computation of the value of the land.[19]
The Ruling of the Trial Court
On 31 August 1999, the RTC promulgated its Judgment,[20] the

dispositive portion of which reads:
WHEREFORE, IN VIEW of all the foregoing considerations, the
court finds and so holds that the commissioners have arrived at and were
able to determine the fair market value of the properties. The court adopts
their findings, and orders:
1. That 18,930 square meters of the lands owned by the defendants

is hereby expropriated in favor of the Republic of the Philippines
through the National Irrigation Administration;
2. That the NIA shall pay to the defendants the amount of

₱1,230,450 for the 18,930 square meters expropriated in
proportion to the areas so expropriated;
3. That the NIA shall pay to the defendant-intervenors, owners of
Lot No. 3080, the sum of ₱5,128,375.50, representing removed
earthfill;
4. That the NIA shall pay to the defendants, owners of Lot No.
3039, the sum of P1,929,611.30 representing earthfill;
5. To pay to the defendants the sum of ₱60,000 for the destroyed G-

melina trees (1 year old);
6. To pay to the defendants the sum of ₱3,786,000.00 for the 4-year

old G-melina trees;
7. That NIA shall pay to the defendants the sum of ₱2,460.00 for
the coconut trees;
8. That all payments intended for the defendant Rural Bank of

Kabacan shall be given to the defendants and intervenors who
have already acquired ownership over the land titled in the name
of the Bank.[21]
NIA, through the Office of the Solicitor General (OSG), appealed the
Decision of the RTC to the CA, which docketed the case as CA-G.R. CV No.
65196. NIA assailed the trial courts adoption of the Commissioners Report,
which had determined the just compensation to be awarded to the owners of
the lands expropriated. NIA also impugned as error the RTCs inclusion for
compensation of the excavated soil from the expropriated properties. Finally,
it disputed the trial courts Order to deliver the payment intended for the Rural
Bank of Kabacan to defendants-intervenors, who allegedly acquired
ownership of the land still titled in the name of the said rural bank.[22]
The Ruling of the Court of Appeals
On 12 August 2008, the CA through its Twenty-First (21 st) Division,

promulgated a Decision[23] affirming with modification the RTC Decision. It
ruled that the committee tasked to determine the fair market value of the
properties and improvements for the purpose of arriving at the just
compensation, properly performed its function. The appellate court noted that
the committee members had conducted ocular inspections of the area
surrounding the expropriated properties and made their recommendations
based on official documents from the BIR with regard to the zonal valuations
of the affected properties.[24] The CA observed that, as far as the valuation of
the improvements on the properties was concerned, the committee members
took into consideration the provincial assessors appraisal of the age of the
trees, their productivity and the inputs made.[25] The appellate court further
noted that despite the Manifestation of NIA that it be allowed to present
evidence to rebut the recommendation of the committee on the valuations of
the expropriated properties, NIA failed to do so.[26]
The assailed CA Decision, however, deleted the inclusion of the value

of the soil excavated from the properties in the just compensation. It ruled that
the property owner was entitled to compensation only for the value of the
property at the time of the taking.[27] In the construction of irrigation projects,
excavations are necessary to build the canals, and the excavated soil cannot be
valued separately from the land expropriated. Thus, it concluded that NIA, as
the new owner of the affected properties, had the right to enjoy and make use
of the property, including the excavated soil, pursuant to the latters objectives.
[28]
Finally, the CA affirmed the trial courts ruling that recognized

defendants-intervenors Margarita Tabaoda and Portia Charisma Ruth Ortiz as
the new owners ofLot No. 3080 and held that they were thus entitled to just
compensation. The appellate court based its conclusion on the non-
participation by the Rural Bank of Kabacan in the expropriation proceedings
and the latters Manifestation that it no longer owned Lot No. 3080.[29]
On 11 September 2008, the NIA through the OSG filed a Motion for
Reconsideration of the 12 August 2008 Decision, but that motion was denied.
[30]
Aggrieved by the appellate courts Decision, NIA now comes to this

Court via a Petition for Review on Certiorari under Rule 45.
The Issues
The following are the issues proffered by petitioner:

THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE
TRIAL COURTS FINDING OF JUST COMPENSATION OF THE LAND
AND THE IMPROVEMENTS THEREON BASED ON THE REPORT OF
THE COMMISSIONERS.
THE COURT OF APPEALS ERRED IN RULING THAT THE PAYMENT

OF JUST COMPENSATION FOR LOT NO. 3080 SHOULD BE MADE
TO RESPONDENTS MARGARITA TABOADA AND PORTIA
CHARISMA RUTH ORTIZ.[31]
The Courts Ruling
On the first issue, the Petition is not meritorious.
In expropriation proceedings, just compensation is defined as the full

and fair equivalent of the property taken from its owner by the expropriator.
The measure is not the taker's gain, but the owner's loss. The word just is used
to intensify the meaning of the word compensation and to convey thereby the
idea that the equivalent to be rendered for the property to be taken shall be
real, substantial, full and ample.[32] The constitutional limitation of just
compensation is considered to be a sum equivalent to the market value of the
property, broadly defined as the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition; or the fair value of
the property; as between one who receives and one who desires to sell it, fixed
at the time of the actual taking by the government.[33]
In the instant case, we affirm the appellate courts ruling that the
commissioners properly determined the just compensation to be awarded to
the landowners whose properties were expropriated by petitioner.
The records show that the trial court dutifully followed the procedure
under Rule 67 of the 1997 Rules of Civil Procedure when it formed a
committee that was tasked to determine the just compensation for the
expropriated properties. The first set of committee members made an ocular
inspection of the properties, subject of the expropriation. They also
determined the exact areas affected, as well as the kinds and the number of
improvements on the properties.[34] When the members were unable to agree
on the valuation of the land and the improvements thereon, the trial court
selected another batch of disinterested members to carry out the task of
determining the value of the land and the improvements.
The new committee members even made a second ocular inspection of

the expropriated areas. They also obtained data from the BIR to determine the
zonal valuation of the expropriated properties, interviewed the adjacent
property owners, and considered other factors such as distance from the
highway and the nearby town center.[35] Further, the committee members also
considered Provincial Ordinance No. 173, which was promulgated by the
Province of Cotabato on 15 June 1999, and which provide for the value of the
properties and the improvements for taxation purposes.[36]
We can readily deduce from these established facts that the committee
members endeavored a rigorous process to determine the just compensation to
be awarded to the owners of the expropriated properties. We cannot, as
petitioner would want us to, oversimplify the process undertaken by the
committee in arriving at its recommendations, because these were not based
on mere conjectures and unreliable data.
In National Power Corporation v. Diato-Bernal,[37] this Court emphasized that

the just-ness of the compensation could only be attained by using reliable and
actual data as bases for fixing the value of the condemned property. The
reliable and actual data we referred to in that case were the sworn declarations
of realtors in the area, as well as tax declarations and zonal valuation from the
BIR. In disregarding the Committee Report assailed by the National Power
Corporation in the said case, we ruled thus:
It is evident that the above conclusions are highly speculative and devoid
of any actual and reliable basis. First, the market values of the subject propertys
neighboring lots were mere estimates and unsupported by any corroborative
documents, such as sworn declarations of realtors in the area concerned, tax
declarations or zonal valuation from the Bureau of Internal Revenue for the
contiguous residential dwellings and commercial establishments. The report
also failed to elaborate on how and by how much the community centers and
convenience facilities enhanced the value of respondents property. Finally, the
market sales data and price listings alluded to in the report were not even
appended thereto.
As correctly invoked by NAPOCOR, a commissioners report of land
prices which is not based on any documentary evidence is manifestly hearsay
and should be disregarded by the court.
The trial court adopted the flawed findings of the commissioners hook,
line, and sinker. It did not even bother to require the submission of the alleged
market sales data and price listings. Further, the RTC overlooked the fact that
the recommended just compensation was gauged as of September 10, 1999 or
more than two years after the complaint was filed on January 8, 1997. It is
settled that just compensation is to be ascertained as of the time of the taking,
which usually coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes entry into the property,
the just compensation is to be ascertained as of the time of the filing of the
complaint. Clearly, the recommended just compensation in the commissioners
report is unacceptable.[38]
In the instant case, the committee members based their recommendations

on reliable data and, as aptly noted by the appellate court, considered various
factors that affected the value of the land and the improvements.[39]
Petitioner, however, strongly objects to the CAs affirmation of the trial

courts adoption of Provincial Ordinance No. 173. The OSG, on behalf of
petitioner, strongly argues that the recommendations of the committee formed
by the trial court were inaccurate. The OSG contends that the ordinance
reflects the 1999 market values of real properties in the Province of Cotabato,
while the actual taking was made in 1996.[40]
We are not persuaded.
We note that petitioner had ample opportunity to rebut the testimonial, as

well as documentary evidence presented by respondents when the case was
still on trial. It failed to do so, however. The issue raised by petitioner was
adequately addresses by the CAs assailed Decision in this wise:
A thorough scrutiny of the records reveals that the second set of
Commissioners, with Atty. Marasigan still being the Chairperson and Mr.
Zambrano and Mr. Tomacmol as members, was not arbitrary and capricious
in performing the task assigned to them. We note that these Commissioners
were competent and disinterested persons who were handpicked by the
court a quo due to their expertise in appraising the value of the land and the
improvements thereon in the province of Cotabato. They made a careful
study of the area affected by the expropriation, mindful of the fact that the
value of the land and its may be affected by many factors. The duly
appointed Commissioners made a second ocular inspection of the subject
area on 4 September 1997; went to the BIR office in order to get the BIR
zonal valuation of the properties located in Carmen, Cotabato; interviewed
adjacent property owners; and took into consideration various factors such
as the location of the land which is just less than a kilometer away from the
Poblacion and half a kilometer away from the highway and the fact that it is
near a military reservation. With regard to the improvements, the
Commissioners took into consideration the valuation of the Provincial
Assessor, the age of the trees, and the inputs and their productivity.
Thus, it could not be said that the schedule of market values in

Ordinance No. 173 was the sole basis of the Commissioners in arriving at
their valuation. Said ordinance merely gave credence to their valuation
which is comparable to the current price at that time. Besides, Mr. Zambrano
testified that the date used as bases for Ordinance No. 173 were taken from
1995 to 1996.[41]
Moreover, factual findings of the CA are generally binding on this Court.

The rule admits of exceptions, though, such as when the factual findings of the
appellate court and the trial court are contradictory, or when the findings are
not supported by the evidence on record.[42] These exceptions, however, are not
present in the instant case.
Thus, in the absence of contrary evidence, we affirm the findings of the

CA, which sustained the trial courts Decision adopting the committees
recommendations on the just compensation to be awarded to herein
respondents.
We also uphold the CA ruling, which deleted the inclusion of the value of the
excavated soil in the payment for just compensation. There is no legal basis to
separate the value of the excavated soil from that of the expropriated
properties, contrary to what the trial court did. In the context of expropriation
proceedings, the soil has no value separate from that of the expropriated land.
Just compensation ordinarily refers to the value of the land to compensate for
what the owner actually loses. Such value could only be that which prevailed
at the time of the taking.
In National Power Corporation v. Ibrahim, et al.,[43] we held that rights
over lands are indivisible, viz:
[C]onsequently, the CAs findings which upheld those of the trial court that
respondents owned and possessed the property and that its substrata was
possessed by petitioner since 1978 for the underground tunnels, cannot be
disturbed. Moreover, the Court sustains the finding of the lower courts that
the sub-terrain portion of the property similarly belongs to respondents. This
conclusion is drawn from Article 437 of the Civil Code which provides:
ART. 437. The owner of a parcel of land is the owner of

its surface and of everything under it, and he can construct thereon
any works or make any plantations and excavations which he may
deem proper, without detriment to servitudes and subject to special
laws and ordinances. He cannot complain of the reasonable
requirements of aerial navigation.
Thus, the ownership of land extends to the surface as well as to the

subsoil under it.
xxx xxx xxx
Registered landowners may even be ousted of ownership and possession of

their properties in the event the latter are reclassified as mineral lands
because real properties are characteristically indivisible. For the loss
sustained by such owners, they are entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings.
Moreover, petitioners argument that the landowners right extends to the sub-
soil insofar as necessary for their practical interests serves only to further
weaken its case. The theory would limit the right to the sub-soil upon the
economic utility which such area offers to the surface owners. Presumably,
the landowners right extends to such height or depth where it is possible for
them to obtain some benefit or enjoyment, and it is extinguished beyond
such limit as there would be no more interest protected by law.
Hence, the CA correctly modified the trial courts Decision when it ruled
thus:
We agree with the OSG that NIA, in the construction of irrigation
projects, must necessarily make excavations in order to build the canals.
Indeed it is preposterous that NIA will be made to pay not only for the value
of the land but also for the soil excavated from such land when such
excavation is a necessary phase in the building of irrigation projects. That
NIA will make use of the excavated soil is of no moment and is of no
concern to the landowner who has been paid the fair market value of his
land. As pointed out by the OSG, the law does not limit the use of the
expropriated land to the surface area only. Further, NIA, now being the
owner of the expropriated property, has the right to enjoy and make use of
the property in accordance with its mandate and objectives as provided by
law. To sanction the payment of the excavated soil is to allow the
landowners to recover more than the value of the land at the time when it
was taken, which is the true measure of the damages, or just compensation,
and would discourage the construction of important public improvements.[44]
On the second issue, the Petition is meritorious.
The CA affirmed the ruling of the trial court, which had awarded the
payment of just compensation intended for Lot No. 3080 registered in the
name of the Rural Bank of Kabacan to the defendants-intervenors on the basis
of the non-participation of the rural bank in the proceedings and the latters
subsequent Manifestation that it was no longer the owner of that lot. The
appellate court erred on this matter.
It should be noted that eminent domain cases involve the expenditure of

public funds.[45] In this kind of proceeding, we require trial courts to be more
circumspect in their evaluation of the just compensation to be awarded to the
owner of the expropriated property.[46] Thus, it was imprudent for the appellate
court to rely on the Rural Bank of Kabacans mere declaration of non-
ownership and non-participation in the expropriation proceeding to validate
defendants-intervenors claim of entitlement to that payment.
The law imposes certain legal requirements in order for a conveyance of

real property to be valid. It should be noted that Lot No. 3080 is a registered
parcel of land covered by TCT No. T-61963. In order for the reconveyance of
real property to be valid, the conveyance must be embodied in a public
document[47] and registered in the office of the Register of Deeds where the
property is situated.[48]
We have scrupulously examined the records of the case and found no
proof of conveyance or evidence of transfer of ownership of Lot No. 3080
from its registered owner, the Rural Bank of Kabacan, to defendants-
intervenors. As it is, the TCT is still registered in the name of the said rural
bank. It is not disputed that the bank did not participate in the expropriation
proceedings, and that it manifested that it no longer owned Lot No. 3080. The
trial court should have nevertheless required the rural bank and the
defendants-intervenors to show proof or evidence pertaining to the
conveyance of the subject lot. The court cannot rely on mere inference,
considering that the payment of just compensation is intended to be awarded
solely owner based on the latters proof of ownership.
The trial court should have been guided by Rule 67, Section 9 of the
1997 Rules of Court, which provides thus:
SEC. 9. Uncertain ownership; conflicting claims. If the ownership of
the property taken is uncertain, or there are conflicting claims to any part
thereof, the court may order any sum or sums awarded as compensation for
the property to be paid to the court for the benefit of the person adjudged in
the same proceeding to be entitled thereto. But the judgment shall require
the payment of the sum or sums awarded to either the defendant or the court
before the plaintiff can enter upon the property, or retain it for the public use
or purpose if entry has already been made.
Hence, the appellate court erred in affirming the trial courts Order to
award payment of just compensation to the defendants-intervenors. There is
doubt as to the real owner of Lot No. 3080. Despite the fact that the lot was
covered by TCT No. T-61963 and was registered under its name, the Rural
Bank of Kabacan manifested that the owner of the lot was no longer the bank,
but the defendants-intervenors; however, it presented no proof as to the
conveyance thereof. In this regard, we deem it proper to remand this case to
the trial court for the reception of evidence to establish the present owner of
Lot No. 3080 who will be entitled to receive the payment of just
compensation.
WHEREFORE, the Petition is PARTLY GRANTED. The 12 August

2008 CA Decision in CA-G.R. CV No. 65196, awarding just compensation to
the defendants as owners of the expropriated properties and deleting the
inclusion of the value of the excavated soil, is
hereby AFFIRMED with MODIFICATION. The case is
hereby REMANDED to the trial court for the reception of evidence to
establish the present owner of Lot No. 3080. No pronouncements as to cost.
SO ORDERED.
MARIA LOURDES P. A. SERENO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE PORTUGAL PEREZ BIENVENIDO L. REYES

Associate Justice
ATT E STAT I O N
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I FI CAT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
*
Designated as acting Member of the Second Division vice Associate Justice Arturo D. Brion per Special
Order No. 1174 dated January 9, 2012.
[1]
Presidential Decree No. 552 - Amending Certain Sections of Republic Act Numbered Thirty-Six Hundred
and One, Entitled, "An Act Creating the National Irrigation Administration"
SECTION 1. Section 2, Republic Act Numbered Thirty-six Hundred and One, is hereby amended to
read as follows:
xxx xxx xxx
(e) To acquire, by any mode of acquisition, real and personal properties, and all appurtenant
rights, easements, concessions and privileges, whether the same are already devoted to
private or public use in connection with the development of projects by the NIA;
The National Irrigation Administration is empowered to exercise the right of eminent
domain in the manner provided by law for the institution of expropriation proceedings.
[2]
Rollo, p. 67.
[3]
Rollo, p. 50.
[4]
Id. at 72-74.
[5]
Id. at 83.
[6]
Id. at 86.
[7]
Id. at 88-98.
[8]
Id. at 104.
[9]
Id. at 52.
[10]
Id.
[11]
Id. at 53.
[12]
Id. at 102-103. The Commission was composed of Atty. Hermenegildo Marasigan, Branch Clerk of Court,
RTC-Br. 22 of Kabacan, Cotabato as chairperson; and members Atty. Littie Sarah Agdeppa (respondent) for
the landowners and Engr. Abdulasis Mabang for NIA (petitioner).
[13]
Rollo, p. 103.
[14]
Id.
[15]
Id. at 177.
[16]
Id. at 54.
[17]
Id. at 105-106.
[18]
Id. at 107-108.
[19]
Id. at 17.
[20]
Id. at 109.
[21]
Id. at 114-115.
[22]
Rollo, p. 56.
[23]
CA Decision in CA-G.R. CV No. 65196 dated 12 August 2008, penned by Associate Justice Elihu A.
Ybaez and concurred in by Associate Justices Romulo V. Borja and Mario V. Lopez.
[24]
Rollo, p. 58.
[25]
Id. at 59.
[26]
Id.
[27]
Id. at 61.
[28]
Id. at 62.
[29]
Id.
[30]
Id. at 64-65.
[31]
Rollo, p. 20.
[32]
National Power Corporation v. Teresita Diato-Bernal, G.R. No. 180979, 15 December 2010, 638 SCRA
660, citing Republic v. Libunao, 594 SCRA 363(2009).
[33]
OSWALDO D. AGCAOILI, PROPERTY REGISTRATION DECREE AND RELATED LAWS (LAND
TITLES AND DEEDS) 581 (2000).
[34]
Rollo, p. 58.
[35]
Id.
[36]
Id.
[37]
Supra note 32.
[38]
Id. at 668-669.
[39]
Rollo, p. 60.
[40]
Id. at 24-26.
[41]
Id. at 58-59.
[42]
The Republic of the Philippines represented by the National Irrigation Administration v. Court of Appeals ,
G.R. No. 147245, 31 March 2005, 454 SCRA 516.
[43]
National Power Corporation v. Ibrahim, G.R. No. 168732, 29 June 2007, 526 SCRA 149, 159-160.
[44]
Rollo, pp. 61-62.
[45]
National Power Corporation v. Spouses Dela Cruz, G.R. No. 156093, 02 February 2007, 514 SCRA 56.
[46]
Supra, note 38.
[47]
Civil Code of the Philippines:
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest
therein a governed by Articles 1403, No. 2, and 1405;
[48]
P.D. 1529:
CHAPTER XII
Forms Used in Land Registration and Conveyancing
SECTION 112. Forms in Conveyancing. The Commissioner of Land Registration shall prepare convenient
blank forms as may be necessary to help facilitate the proceedings in land registration and shall take charge of
the printing of land title forms.
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments,
whether affecting registered or unregistered land, executed in accordance with law in the form of public
instruments shall be registrable: Provided, that, every such instrument shall be signed by the person or persons
executing the same in the presence of at least two witnesses who shall likewise sign thereon, and shall be
acknowledged to be the free act and deed of the person or persons executing the same before a notary public
or other public officer authorized by law to take acknowledgment. Where the instrument so acknowledged
consists of two or more pages including the page whereon acknowledgment is written, each page of the copy
which is to be registered in the office of the Register of Deeds, or if registration is not contemplated, each
page of the copy to be kept by the notary public, except the page where the signatures already appear at the
foot of the instrument, shall be signed on the left margin thereof by the person or persons executing the
instrument and their witnesses, and all the pages sealed with the notarial seal, and this fact as well as the
number of pages shall be stated in the acknowledgment. Where the instrument acknowledged relates to a sale,
transfer, mortgage or encumbrance of two or more parcels of land, the number thereof shall likewise be set
forth in said acknowledgment.
FIRST DIVISION
G.R. No. 155076 February 27, 2006
LUIS MARCOS P. LAUREL, Petitioner,

vs.
HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City,
Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari of the Decision 1 of the Court of Appeals (CA) in
CA-G.R. SP No. 68841 affirming the Order issued by Judge Zeus C. Abrogar, Regional Trial
Court (RTC), Makati City, Branch 150, which denied the "Motion to Quash (With Motion to
Defer Arraignment)" in Criminal Case No. 99-2425 for theft.
Philippine Long Distance Telephone Company (PLDT) is the holder of a legislative franchise to
render local and international telecommunication services under Republic Act No. 7082. 2 Under
said law, PLDT is authorized to establish, operate, manage, lease, maintain and purchase
telecommunication systems, including transmitting, receiving and switching stations, for both
domestic and international calls. For this purpose, it has installed an estimated 1.7 million
telephone lines nationwide. PLDT also offers other services as authorized by Certificates of
Public Convenience and Necessity (CPCN) duly issued by the National Telecommunications
Commission (NTC), and operates and maintains an International Gateway Facility (IGF). The
PLDT network is thus principally composed of the Public Switch Telephone Network (PSTN),
telephone handsets and/or telecommunications equipment used by its subscribers, the wires
and cables linking said telephone handsets and/or telecommunications equipment, antenna,
the IGF, and other telecommunications equipment which provide interconnections. 3 1avvphil.net
PLDT alleges that one of the alternative calling patterns that constitute network fraud and
violate its network integrity is that which is known as International Simple Resale (ISR). ISR is
a method of routing and completing international long distance calls using International Private
Leased Lines (IPL), cables, antenna or air wave or frequency, which connect directly to the
local or domestic exchange facilities of the terminating country (the country where the call is
destined). The IPL is linked to switching equipment which is connected to a PLDT telephone
line/number. In the process, the calls bypass the IGF found at the terminating country, or in
some instances, even those from the originating country. 4
One such alternative calling service is that offered by Baynet Co., Ltd. (Baynet) which sells
"Bay Super Orient Card" phone cards to people who call their friends and relatives in the
Philippines. With said card, one is entitled to a 27-minute call to the Philippines for about
¥37.03 per minute. After dialing the ISR access number indicated in the phone card, the ISR
operator requests the subscriber to give the PIN number also indicated in the phone card.
Once the caller’s identity (as purchaser of the phone card) is confirmed, the ISR operator will
then provide a Philippine local line to the requesting caller via the IPL. According to PLDT, calls
made through the IPL never pass the toll center of IGF operators in the Philippines. Using the
local line, the Baynet card user is able to place a call to any point in the Philippines, provided
the local line is National Direct Dial (NDD) capable. 5
PLDT asserts that Baynet conducts its ISR activities by utilizing an IPL to course its incoming
international long distance calls from Japan. The IPL is linked to switching equipment, which is
then connected to PLDT telephone lines/numbers and equipment, with Baynet as subscriber.
Through the use of the telephone lines and other auxiliary equipment, Baynet is able to
connect an international long distance call from Japan to any part of the Philippines, and make
it appear as a call originating from Metro Manila. Consequently, the operator of an ISR is able
to evade payment of access, termination or bypass charges and accounting rates, as well as
compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers
international telecommunication services at a lower rate, to the damage and prejudice of
legitimate operators like PLDT.6
PLDT pointed out that Baynet utilized the following equipment for its ISR activities: lines,
cables, and antennas or equipment or device capable of transmitting air waves or frequency,
such as an IPL and telephone lines and equipment; computers or any equipment or device
capable of accepting information applying the prescribed process of the information and
supplying the result of this process; modems or any equipment or device that enables a data
terminal equipment such as computers to communicate with other data terminal equipment via
a telephone line; multiplexers or any equipment or device that enables two or more signals
from different sources to pass through a common cable or transmission line; switching
equipment, or equipment or device capable of connecting telephone lines; and software,
diskettes, tapes or equipment or device used for recording and storing information. 7
PLDT also discovered that Baynet subscribed to a total of 123 PLDT telephone
lines/numbers.8 Based on the Traffic Study conducted on the volume of calls passing through
Baynet’s ISR network which bypass the IGF toll center, PLDT incurred an estimated monthly
loss of P10,185,325.96.9 Records at the Securities and Exchange Commission (SEC) also
revealed that Baynet was not authorized to provide international or domestic long distance
telephone service in the country. The following are its officers: Yuji Hijioka, a Japanese national
(chairman of the board of directors); Gina C. Mukaida, a Filipina (board member and
president); Luis Marcos P. Laurel, a Filipino (board member and corporate secretary); Ricky
Chan Pe, a Filipino (board member and treasurer); and Yasushi Ueshima, also a Japanese
national (board member).
Upon complaint of PLDT against Baynet for network fraud, and on the strength of two search
warrants10 issued by the RTC of Makati, Branch 147, National Bureau of Investigation (NBI)
agents searched its office at the 7th Floor, SJG Building, Kalayaan Avenue, Makati City on
November 8, 1999. Atsushi Matsuura, Nobuyoshi Miyake, Edourd D. Lacson and Rolando J.
Villegas were arrested by NBI agents while in the act of manning the operations of Baynet.
Seized in the premises during the search were numerous equipment and devices used in its
ISR activities, such as multiplexers, modems, computer monitors, CPUs, antenna, assorted
computer peripheral cords and microprocessors, cables/wires, assorted PLDT statement of
accounts, parabolic antennae and voltage regulators.
State Prosecutor Ofelia L. Calo conducted an inquest investigation and issued a

Resolution11 on January 28, 2000, finding probable cause for theft under Article 308 of the
Revised Penal Code and Presidential Decree No. 40112against the respondents therein,
including Laurel.
On February 8, 2000, State Prosecutor Calo filed an Information with the RTC of Makati City
charging Matsuura, Miyake, Lacson and Villegas with theft under Article 308 of the Revised
Penal Code. After conducting the requisite preliminary investigation, the State Prosecutor filed
an Amended Information impleading Laurel (a partner in the law firm of Ingles, Laurel, Salinas,
and, until November 19, 1999, a member of the board of directors and corporate secretary of
Baynet), and the other members of the board of directors of said corporation, namely, Yuji
Hijioka, Yasushi Ueshima, Mukaida, Lacson and Villegas, as accused for theft under Article
308 of the Revised Penal Code. The inculpatory portion of the Amended Information reads:
On or about September 10-19, 1999, or prior thereto, in Makati City, and within the jurisdiction
of this Honorable Court, the accused, conspiring and confederating together and all of them
mutually helping and aiding one another, with intent to gain and without the knowledge and
consent of the Philippine Long Distance Telephone (PLDT), did then and there willfully,
unlawfully and feloniously take, steal and use the international long distance calls belonging to
PLDT by conducting International Simple Resale (ISR), which is a method of routing and
completing international long distance calls using lines, cables, antennae, and/or air wave
frequency which connect directly to the local or domestic exchange facilities of the country
where the call is destined, effectively stealing this business from PLDT while using its facilities
in the estimated amount of P20,370,651.92 to the damage and prejudice of PLDT, in the said
amount.
CONTRARY TO LAW.13
Accused Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" on the ground that
the factual allegations in the Amended Information do not constitute the felony of theft under
Article 308 of the Revised Penal Code. He averred that the Revised Penal Code, or any other
special penal law for that matter, does not prohibit ISR operations. He claimed that telephone
calls with the use of PLDT telephone lines, whether domestic or international, belong to the
persons making the call, not to PLDT. He argued that the caller merely uses the facilities of
PLDT, and what the latter owns are the telecommunication infrastructures or facilities through
which the call is made. He also asserted that PLDT is compensated for the caller’s use of its
facilities by way of rental; for an outgoing overseas call, PLDT charges the caller per minute,
based on the duration of the call. Thus, no personal property was stolen from PLDT. According
to Laurel, the P20,370,651.92 stated in the Information, if anything, represents the rental for
the use of PLDT facilities, and not the value of anything owned by it. Finally, he averred that
the allegations in the Amended Information are already subsumed under the Information for
violation of Presidential Decree (P.D.) No. 401 filed and pending in the Metropolitan Trial Court
of Makati City, docketed as Criminal Case No. 276766.
The prosecution, through private complainant PLDT, opposed the motion, 14 contending that the
movant unlawfully took personal property belonging to it, as follows: 1) intangible telephone
services that are being offered by PLDT and other telecommunication companies, i.e., the
connection and interconnection to their telephone lines/facilities; 2) the use of those facilities
over a period of time; and 3) the revenues derived in connection with the rendition of such
services and the use of such facilities. 15
The prosecution asserted that the use of PLDT’s intangible telephone services/facilities allows
electronic voice signals to pass through the same, and ultimately to the called party’s number.
It averred that such service/facility is akin to electricity which, although an intangible property,
may, nevertheless, be appropriated and be the subject of theft. Such service over a period of
time for a consideration is the business that PLDT provides to its customers, which enables the
latter to send various messages to installed recipients. The service rendered by PLDT is akin
to merchandise which has specific value, and therefore, capable of appropriation by another,
as in this case, through the ISR operations conducted by the movant and his co-accused.
The prosecution further alleged that "international business calls and revenues constitute
personal property envisaged in Article 308 of the Revised Penal Code." Moreover, the
intangible telephone services/facilities belong to PLDT and not to the movant and the other
accused, because they have no telephone services and facilities of their own duly authorized
by the NTC; thus, the taking by the movant and his co-accused of PLDT services was with
intent to gain and without the latter’s consent.
The prosecution pointed out that the accused, as well as the movant, were paid in exchange
for their illegal appropriation and use of PLDT’s telephone services and facilities; on the other
hand, the accused did not pay a single centavo for their illegal ISR operations. Thus, the acts
of the accused were akin to the use of a "jumper" by a consumer to deflect the current from the
house electric meter, thereby enabling one to steal electricity. The prosecution emphasized that
its position is fortified by the Resolutions of the Department of Justice in PLDT v. Tiongson, et
al. (I.S. No. 97-0925) and in PAOCTF-PLDT v. Elton John Tuason, et al. (I.S. No. 2000-370)
which were issued on August 14, 2000 finding probable cause for theft against the respondents
therein.
On September 14, 2001, the RTC issued an Order 16 denying the Motion to Quash the
Amended Information. The court declared that, although there is no law that expressly prohibits
the use of ISR, the facts alleged in the Amended Information "will show how the alleged crime
was committed by conducting ISR," to the damage and prejudice of PLDT.
Laurel filed a Motion for Reconsideration 17 of the Order, alleging that international long distance
calls are not personal property, and are not capable of appropriation. He maintained that
business or revenue is not considered personal property, and that the prosecution failed to
adduce proof of its existence and the subsequent loss of personal property belonging to
another. Citing the ruling of the Court in United States v. De Guzman, 18 Laurel averred that the
case is not one with telephone calls which originate with a particular caller and terminates with
the called party. He insisted that telephone calls are considered privileged communications
under the Constitution and cannot be considered as "the property of PLDT." He further argued
that there is no kinship between telephone calls and electricity or gas, as the latter are forms of
energy which are generated and consumable, and may be considered as personal property
because of such characteristic. On the other hand, the movant argued, the telephone business
is not a form of energy but is an activity.
In its Order19 dated December 11, 2001, the RTC denied the movant’s Motion for
Reconsideration. This time, it ruled that what was stolen from PLDT was its "business"
because, as alleged in the Amended Information, the international long distance calls made
through the facilities of PLDT formed part of its business. The RTC noted that the movant was
charged with stealing the business of PLDT. To support its ruling, it cited Strochecker v.
Ramirez,20where the Court ruled that interest in business is personal property capable of
appropriation. It further declared that, through their ISR operations, the movant and his co-
accused deprived PLDT of fees for international long distance calls, and that the ISR used by
the movant and his co-accused was no different from the "jumper" used for stealing electricity.
Laurel then filed a Petition for Certiorari with the CA, assailing the Order of the RTC. He
alleged that the respondent judge gravely abused his discretion in denying his Motion to Quash
the Amended Information.21 As gleaned from the material averments of the amended
information, he was charged with stealing the international long distance calls belonging to
PLDT, not its business. Moreover, the RTC failed to distinguish between the business of PLDT
(providing services for international long distance calls) and the revenues derived therefrom.
He opined that a "business" or its revenues cannot be considered as personal property under
Article 308 of the Revised Penal Code, since a "business" is "(1) a commercial or mercantile
activity customarily engaged in as a means of livelihood and typically involving some
independence of judgment and power of decision; (2) a commercial or industrial enterprise;
and (3) refers to transactions, dealings or intercourse of any nature." On the other hand, the
term "revenue" is defined as "the income that comes back from an investment (as in real or
personal property); the annual or periodical rents, profits, interests, or issues of any species of
real or personal property."22
Laurel further posited that an electric company’s business is the production and distribution of
electricity; a gas company’s business is the production and/or distribution of gas (as fuel); while
a water company’s business is the production and distribution of potable water. He argued that
the "business" in all these cases is the commercial activity, while the goods and merchandise
are the products of such activity. Thus, in prosecutions for theft of certain forms of energy, it is
the electricity or gas which is alleged to be stolen and not the "business" of providing electricity
or gas. However, since a telephone company does not produce any energy, goods or
merchandise and merely renders a service or, in the words of PLDT, "the connection and
interconnection to their telephone lines/facilities," such service cannot be the subject of theft as
defined in Article 308 of the Revised Penal Code.23
He further declared that to categorize "business" as personal property under Article 308 of the
Revised Penal Code would lead to absurd consequences; in prosecutions for theft of gas,
electricity or water, it would then be permissible to allege in the Information that it is the gas
business, the electric business or the water business which has been stolen, and no longer the
merchandise produced by such enterprise. 24
Laurel further cited the Resolution of the Secretary of Justice in Piltel v. Mendoza, 25 where it
was ruled that the Revised Penal Code, legislated as it was before present technological
advances were even conceived, is not adequate to address the novel means of "stealing"
airwaves or airtime. In said resolution, it was noted that the inadequacy prompted the filing of
Senate Bill 2379 (sic) entitled "The Anti-Telecommunications Fraud of 1997" to deter cloning of
cellular phones and other forms of communications fraud. The said bill "aims to protect in
number (ESN) (sic) or Capcode, mobile identification number (MIN), electronic-international
mobile equipment identity (EMEI/IMEI), or subscriber identity module" and "any attempt to
duplicate the data on another cellular phone without the consent of a public
telecommunications entity would be punishable by law." 26 Thus, Laurel concluded, "there is no
crime if there is no law punishing the crime."
On August 30, 2002, the CA rendered judgment dismissing the petition. 27 The appellate court
ruled that a petition for certiorari under Rule 65 of the Rules of Court was not the proper
remedy of the petitioner. On the merits of the petition, it held that while business is generally an
activity
which is abstract and intangible in form, it is nevertheless considered "property" under Article
308 of the Revised Penal Code. The CA opined that PLDT’s business of providing international
calls is personal property which may be the object of theft, and cited United States v.
Carlos28 to support such conclusion. The tribunal also cited Strochecker v. Ramirez, 29 where
this Court ruled that one-half interest in a day’s business is personal property under Section 2
of Act No. 3952, otherwise known as the Bulk Sales Law. The appellate court held that the
operations of the ISR are not subsumed in the charge for violation of P.D. No. 401.
Laurel, now the petitioner, assails the decision of the CA, contending that -
THE COURT OF APPEALS ERRED IN RULING THAT THE PERSONAL PROPERTY

ALLEGEDLY STOLEN PER THE INFORMATION IS NOT THE "INTERNATIONAL
LONG DISTANCE CALLS" BUT THE "BUSINESS OF PLDT."
THE COURT OF APPEALS ERRED IN RULING THAT THE TERM "BUSINESS" IS

PERSONAL PROPERTY WITHIN THE MEANING OF ART. 308 OF THE REVISED
PENAL CODE.30
Petitioner avers that the petition for a writ of certiorari may be filed to nullify an interlocutory
order of the trial court which was issued with grave abuse of discretion amounting to excess or
lack of jurisdiction. In support of his petition before the Court, he reiterates the arguments in his
pleadings filed before the CA. He further claims that while the right to carry on a business or an
interest or participation in business is considered property under the New Civil Code, the term
"business," however, is not. He asserts that the Philippine Legislature, which approved the
Revised Penal Code way back in January 1, 1932, could not have contemplated to include
international long distance calls and "business" as personal property under Article 308 thereof.
In its comment on the petition, the Office of the Solicitor General (OSG) maintains that the
amended information clearly states all the essential elements of the crime of theft. Petitioner’s
interpretation as to whether an "international long distance call" is personal property under the
law is inconsequential, as a reading of the amended information readily reveals that specific
acts and circumstances were alleged charging Baynet, through its officers, including petitioner,
of feloniously taking, stealing and illegally using international long distance calls belonging to
respondent PLDT by conducting ISR operations, thus, "routing and completing international
long distance calls using lines, cables, antenna and/or airwave frequency which connect
directly to the local or domestic exchange facilities of the country where the call is destined."
The OSG maintains that the international long distance calls alleged in the amended
information should be construed to mean "business" of PLDT, which, while abstract and
intangible in form, is personal property susceptible of appropriation. 31 The OSG avers that what
was stolen by petitioner and his co-accused is the business of PLDT providing international
long distance calls which, though intangible, is personal property of the PLDT. 32
For its part, respondent PLDT asserts that personal property under Article 308 of the Revised
Penal Code comprehends intangible property such as electricity and gas which are valuable
articles for merchandise, brought and sold like other personal property, and are capable of
appropriation. It insists that the business of international calls and revenues constitute personal
property because the same are valuable articles of merchandise. The respondent reiterates
that international calls involve (a) the intangible telephone services that are being offered by it,
that is, the connection and interconnection to the telephone network, lines or facilities; (b) the
use of its telephone network, lines or facilities over a period of time; and (c) the income derived
in connection therewith.33
PLDT further posits that business revenues or the income derived in connection with the
rendition of such services and the use of its telephone network, lines or facilities are personal
properties under Article 308 of the Revised Penal Code; so is the use of said telephone
services/telephone network, lines or facilities which allow electronic voice signals to pass
through the same and ultimately to the called party’s number. It is akin to electricity which,
though intangible property, may nevertheless be appropriated and can be the object of theft.
The use of respondent PLDT’s telephone network, lines, or facilities over a period of time for
consideration is the business that it provides to its customers, which enables the latter to send
various messages to intended recipients. Such use over a period of time is akin to
merchandise which has value and, therefore, can be appropriated by another. According to
respondent PLDT, this is what actually happened when petitioner Laurel and the other accused
below conducted illegal ISR operations.34
The petition is meritorious.
The issues for resolution are as follows: (a) whether or not the petition for certiorari is the
proper remedy of the petitioner in the Court of Appeals; (b) whether or not international
telephone calls using Bay Super Orient Cards through the telecommunication services
provided by PLDT for such calls, or, in short, PLDT’s business of providing said
telecommunication services, are proper subjects of theft under Article 308 of the Revised Penal
Code; and (c) whether or not the trial court committed grave abuse of discretion amounting to
excess or lack of jurisdiction in denying the motion of the petitioner to quash the amended
information.
On the issue of whether or not the petition for certiorari instituted by the petitioner in the CA is
proper, the general rule is that a petition for certiorari under Rule 65 of the Rules of Court, as
amended, to nullify an order denying a motion to quash the Information is inappropriate
because the aggrieved party has a remedy of appeal in the ordinary course of law. Appeal and
certiorari are mutually exclusive of each other. The remedy of the aggrieved party is to continue
with the case in due course and, when an unfavorable judgment is rendered, assail the order
and the decision on appeal. However, if the trial court issues the order denying the motion to
quash the Amended Information with grave abuse of discretion amounting to excess or lack of
jurisdiction, or if such order is patently erroneous, or null and void for being contrary to the
Constitution, and the remedy of appeal would not afford adequate and expeditious relief, the
accused may resort to the extraordinary remedy of certiorari. 35 A special civil action for
certiorari is also available where there are special circumstances clearly demonstrating the
inadequacy of an appeal. As this Court held in Bristol Myers Squibb (Phils.), Inc. v. Viloria: 36
Nonetheless, the settled rule is that a writ of certiorari may be granted in cases where, despite
availability of appeal after trial, there is at least a prima facie showing on the face of the petition
and its annexes that: (a) the trial court issued the order with grave abuse of discretion
amounting to lack of or in excess of jurisdiction; (b) appeal would not prove to be a speedy and
adequate remedy; (c) where the order is a patent nullity; (d) the decision in the present case
will arrest future litigations; and (e) for certain considerations such as public welfare and public
policy.37
In his petition for certiorari in the CA, petitioner averred that the trial court committed grave
abuse of its discretion amounting to excess or lack of jurisdiction when it denied his motion to
quash the Amended Information despite his claim that the material allegations in the Amended
Information do not charge theft under Article 308 of the Revised Penal Code, or any offense for
that matter. By so doing, the trial court deprived him of his constitutional right to be informed of
the nature of the charge against him. He further averred that the order of the trial court is
contrary to the constitution and is, thus, null and void. He insists that he should not be
compelled to undergo the rigors and tribulations of a protracted trial and incur expenses to
defend himself against a non-existent charge.
Petitioner is correct.
An information or complaint must state explicitly and directly every act or omission constituting
an offense38 and must allege facts establishing conduct that a penal statute makes
criminal;39 and describes the property which is the subject of theft to advise the accused with
reasonable certainty of the accusation he is called upon to meet at the trial and to enable him
to rely on the judgment thereunder of a subsequent prosecution for the same offense. 40 It must
show, on its face, that if the alleged facts are true, an offense has been committed. The rule is
rooted on the constitutional right of the accused to be informed of the nature of the crime or
cause of the accusation against him. He cannot be convicted of an offense even if proven
unless it is alleged or necessarily included in the Information filed against him.
As a general prerequisite, a motion to quash on the ground that the Information does not
constitute the offense charged, or any offense for that matter, should be resolved on the basis
of said allegations whose truth and veracity are hypothetically committed; 41 and on additional
facts admitted or not denied by the prosecution.42 If the facts alleged in the Information do not
constitute an offense, the complaint or information should be quashed by the court. 43
We have reviewed the Amended Information and find that, as mentioned by the petitioner, it
does not contain material allegations charging the petitioner of theft of personal property under
Article 308 of the Revised Penal Code. It, thus, behooved the trial court to quash the Amended
Information. The Order of the trial court denying the motion of the petitioner to quash the
Amended Information is a patent nullity.
On the second issue, we find and so hold that the international telephone calls placed by Bay
Super Orient Card holders, the telecommunication services provided by PLDT and its business
of providing said services are not personal properties under Article 308 of the Revised Penal
Code. The construction by the respondents of Article 308 of the said Code to include, within its
coverage, the aforesaid international telephone calls, telecommunication services and
business is contrary to the letter and intent of the law.
The rule is that, penal laws are to be construed strictly. Such rule is founded on the tenderness
of the law for the rights of individuals and on the plain principle that the power of punishment is
vested in Congress, not in the judicial department. It is Congress, not the Court, which is to
define a crime, and ordain its punishment. 44 Due respect for the prerogative of Congress in
defining crimes/felonies constrains the Court to refrain from a broad interpretation of penal
laws where a "narrow interpretation" is appropriate. The Court must take heed to language,
legislative history and purpose, in order to strictly determine the wrath and breath of the
conduct the law forbids.45 However, when the congressional purpose is unclear, the court must
apply the rule of lenity, that is, ambiguity concerning the ambit of criminal statutes should be
resolved in favor of lenity.46
Penal statutes may not be enlarged by implication or intent beyond the fair meaning of the
language used; and may not be held to include offenses other than those which are clearly
described, notwithstanding that the Court may think that Congress should have made them
more comprehensive.47 Words and phrases in a statute are to be construed according to their
common meaning and accepted usage.
As Chief Justice John Marshall declared, "it would be dangerous, indeed, to carry the principle
that a case which is within the reason or
mischief of a statute is within its provision, so far as to punish a crime not enumerated in the
statute because it is of equal atrocity, or of kindred character with those which are
enumerated.48 When interpreting a criminal statute that does not explicitly reach the conduct in
question, the Court should not base an expansive reading on inferences from subjective and
variable understanding.49
Article 308 of the Revised Penal Code defines theft as follows:

Art. 308. Who are liable for theft.– Theft is committed by any person who, with intent to gain but
without violence, against or intimidation of persons nor force upon things, shall take personal
property of another without the latter’s consent.
The provision was taken from Article 530 of the Spanish Penal Code which reads:
1. Los que con ánimo de lucrarse, y sin violencia o intimidación en las personas ni fuerza en
las cosas, toman las cosas muebles ajenas sin la voluntad de su dueño. 50
For one to be guilty of theft, the accused must have an intent to steal (animus furandi) personal
property, meaning the intent to deprive another of his ownership/lawful possession of personal
property which intent is apart from and concurrently with the general criminal intent which is an
essential element of a felony of dolo (dolus malus).
An information or complaint for simple theft must allege the following elements: (a) the taking of
personal property; (b) the said property belongs to another; (c) the taking be done with intent to
gain; and (d) the taking be accomplished without the use of violence or intimidation of person/s
or force upon things.51
One is apt to conclude that "personal property" standing alone, covers both tangible and
intangible properties and are subject of theft under the Revised Penal Code. But the words
"Personal property" under the Revised Penal Code must be considered in tandem with the
word "take" in the law. The statutory definition of "taking" and movable property indicates that,
clearly, not all personal properties may be the proper subjects of theft. The general rule is that,
only movable properties which have physical or material existence and susceptible of
occupation by another are proper objects of theft. 52 As explained by Cuelo Callon: "Cosa
juridicamente es toda sustancia corporal, material, susceptible de ser aprehendida que tenga
un valor cualquiera."53
According to Cuello Callon, in the context of the Penal Code, only those movable properties
which can be taken and carried from the place they are found are proper subjects of theft.
Intangible properties such as rights and ideas are not subject of theft because the same cannot
be "taken" from the place it is found and is occupied or appropriated.
Solamente las cosas muebles y corporales pueden ser objeto de hurto. La sustracción de
cosas inmuebles y la cosas incorporales (v. gr., los derechos, las ideas) no puede integrar este
delito, pues no es posible asirlas, tomarlas, para conseguir su apropiación. El Codigo emplea
la expresión "cosas mueble" en el sentido de cosa que es susceptible de ser llevada del lugar
donde se encuentra, como dinero, joyas, ropas, etcétera, asi que su concepto no coincide por
completo con el formulado por el Codigo civil (arts. 335 y 336). 54
Thus, movable properties under Article 308 of the Revised Penal Code should be distinguished
from the rights or interests to which they relate. A naked right existing merely in contemplation
of law, although it may be very valuable to the person who is entitled to exercise it, is not the
subject of theft or larceny.55 Such rights or interests are intangible and cannot be "taken" by
another. Thus, right to produce oil, good will or an interest in business, or the right to engage in
business, credit or franchise are properties. So is the credit line represented by a credit card.
However, they are not proper subjects of theft or larceny because they are without form or
substance, the mere "breath" of the Congress. On the other hand, goods, wares and
merchandise of businessmen and credit cards issued to them are movable properties with
physical and material existence and may be taken by another; hence, proper subjects of theft.
There is "taking" of personal property, and theft is consummated when the offender unlawfully
acquires possession of personal property even if for a short time; or if such property is under
the dominion and control of the thief. The taker, at some particular amount, must have obtained
complete and absolute possession and control of the property adverse to the rights of the
owner or the lawful possessor thereof.56 It is not necessary that the property be actually carried
away out of the physical possession of the lawful possessor or that he should have made his
escape with it.57 Neither asportation nor actual manual possession of property is required.
Constructive possession of the thief of the property is enough. 58
The essence of the element is the taking of a thing out of the possession of the owner without
his privity and consent and without animus revertendi. 59
Taking may be by the offender’s own hands, by his use of innocent persons without any
felonious intent, as well as any mechanical device, such as an access device or card, or any
agency, animate or inanimate, with intent to gain. Intent to gain includes the unlawful taking of
personal property for the purpose of deriving utility, satisfaction, enjoyment and pleasure. 60
We agree with the contention of the respondents that intangible properties such as electrical
energy and gas are proper subjects of theft. The reason for this is that, as explained by this
Court in United States v. Carlos61 and United States v. Tambunting,62 based on decisions of the
Supreme Court of Spain and of the courts in England and the United States of America, gas or
electricity are capable of appropriation by another other than the owner. Gas and electrical
energy may be taken, carried away and appropriated. In People v. Menagas, 63 the Illinois State
Supreme Court declared that electricity, like gas, may be seen and felt. Electricity, the same as
gas, is a valuable article of merchandise, bought and sold like other personal property and is
capable of appropriation by another. It is a valuable article of merchandise, bought and sold
like other personal property, susceptible of being severed from a mass or larger quantity and of
being transported from place to place. Electrical energy may, likewise, be taken and carried
away. It is a valuable commodity, bought and sold like other personal property. It may be
transported from place to place. There is nothing in the nature of gas used for illuminating
purposes which renders it incapable of being feloniously taken and carried away.
In People ex rel Brush Electric Illuminating Co. v. Wemple, 64 the Court of Appeals of New York
held that electric energy is manufactured and sold in determinate quantities at a fixed price,
precisely as are coal, kerosene oil, and gas. It may be conveyed to the premises of the
consumer, stored in cells of different capacity known as an accumulator; or it may be sent
through a wire, just as gas or oil may be transported either in a close tank or forced through a
pipe. Having reached the premises of the consumer, it may be used in any way he may desire,
being, like illuminating gas, capable of being transformed either into heat, light, or power, at the
option of the purchaser. In Woods v. People, 65 the Supreme Court of Illinois declared that there
is nothing in the nature of gas used for illuminating purposes which renders it incapable of
being feloniously taken and carried away. It is a valuable article of merchandise, bought and
sold like other personal property, susceptible of being severed from a mass or larger quantity
and of being transported from place to place.
Gas and electrical energy should not be equated with business or services provided by
business entrepreneurs to the public. Business does not have an exact definition. Business is
referred as that which occupies the time, attention and labor of men for the purpose of
livelihood or profit. It embraces everything that which a person can be employed. 66 Business
may also mean employment, occupation or profession. Business is also defined as a
commercial activity for gain benefit or advantage.67 Business, like services in business,
although are properties, are not proper subjects of theft under the Revised Penal Code
because the same cannot be "taken" or "occupied." If it were otherwise, as claimed by the
respondents, there would be no juridical difference between the taking of the business of a
person or the services provided by him for gain, vis-à-vis, the taking of goods, wares or
merchandise, or equipment comprising his business.68 If it was its intention to include
"business" as personal property under Article 308 of the Revised Penal Code, the Philippine
Legislature should have spoken in language that is clear and definite: that business is personal
property under Article 308 of the Revised Penal Code. 69
We agree with the contention of the petitioner that, as gleaned from the material averments of
the Amended Information, he is charged of "stealing the international long distance calls
belonging to PLDT" and the use thereof, through the ISR. Contrary to the claims of the OSG
and respondent PLDT, the petitioner is not charged of stealing P20,370,651.95 from said
respondent. Said amount of P20,370,651.95 alleged in the Amended Information is the
aggregate amount of access, transmission or termination charges which the PLDT expected
from the international long distance calls of the callers with the use of Baynet Super Orient
Cards sold by Baynet Co. Ltd.
In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal
property without the consent of the owner thereof, the Philippine legislature could not have
contemplated the human voice which is converted into electronic impulses or electrical current
which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of
Baynet Card Ltd. within its coverage. When the Revised Penal Code was approved, on
December 8, 1930, international telephone calls and the transmission and routing of electronic
voice signals or impulses emanating from said calls, through the PSTN, IPL and ISR, were still
non-existent. Case law is that, where a legislative history fails to evidence congressional
awareness of the scope of the statute claimed by the respondents, a narrow interpretation of
the law is more consistent with the usual approach to the construction of the statute. Penal
responsibility cannot be extended beyond the fair scope of the statutory mandate. 70
Respondent PLDT does not acquire possession, much less, ownership of the voices of the
telephone callers or of the electronic voice signals or current emanating from said calls. The
human voice and the electronic voice signals or current caused thereby are intangible and not
susceptible of possession, occupation or appropriation by the respondent PLDT or even the
petitioner, for that matter. PLDT merely transmits the electronic voice signals through its
facilities and equipment. Baynet Card Ltd., through its operator, merely intercepts, reroutes the
calls and passes them to its toll center. Indeed, the parties called receive the telephone calls
from Japan.
In this modern age of technology, telecommunications systems have become so tightly merged
with computer systems that it is difficult to know where one starts and the other finishes. The
telephone set is highly computerized and allows computers to communicate across long
distances.71 The instrumentality at issue in this case is not merely a telephone but a telephone
inexplicably linked to a computerized communications system with the use of Baynet Cards
sold by the Baynet Card Ltd. The corporation uses computers, modems and software, among
others, for its ISR.72
The conduct complained of by respondent PLDT is reminiscent of "phreaking" (a slang term for
the action of making a telephone system to do something that it normally should not allow by
"making the phone company bend over and grab its ankles"). A "phreaker" is one who engages
in the act of manipulating phones and illegally markets telephone services. 73 Unless the phone
company replaces all its hardware, phreaking would be impossible to stop. The phone
companies in North America were impelled to replace all their hardware and adopted full digital
switching system known as the Common Channel Inter Office Signaling. Phreaking occurred
only during the 1960’s and 1970’s, decades after the Revised Penal Code took effect.
The petitioner is not charged, under the Amended Information, for theft of telecommunication
or telephone services offered by PLDT. Even if he is, the term "personal property" under Article
308 of the Revised Penal Code cannot be interpreted beyond its seams so as to include
"telecommunication or telephone services" or computer services for that matter. The word
"service" has a variety of meanings dependent upon the context, or the sense in which it is
used; and, in some instances, it may include a sale. For instance, the sale of food by
restaurants is usually referred to as "service," although an actual sale is involved. 74 It may also
mean the duty or labor to be rendered by one person to another; performance of labor for the
benefit of another.75 In the case of PLDT, it is to render local and international
telecommunications services and such other services as authorized by the CPCA issued by the
NTC. Even at common law, neither time nor services may be taken and occupied or
appropriated.76 A service is generally not considered property and a theft of service would not,
therefore, constitute theft since there can be no caption or asportation. 77 Neither is the
unauthorized use of the equipment and facilities of PLDT by the petitioner theft under the
aforequoted provision of the Revised Penal Code. 78
If it was the intent of the Philippine Legislature, in 1930, to include services to be the subject of
theft, it should have incorporated the same in Article 308 of the Revised Penal Code. The
Legislature did not. In fact, the Revised Penal Code does not even contain a definition of
services.
If taking of telecommunication services or the business of a person, is to be proscribed, it must

be by special statute79 or an amendment of the Revised Penal Code. Several states in the
United States, such as New York, New Jersey, California and Virginia, realized that their
criminal statutes did not contain any provisions penalizing the theft of services and passed
laws defining and penalizing theft of telephone and computer services. The Pennsylvania
Criminal Statute now penalizes theft of services, thus:
(a) Acquisition of services. --
(1) A person is guilty of theft if he intentionally obtains services for himself or for another which
he knows are available only for compensation, by deception or threat, by altering or tampering
with the public utility meter or measuring device by which such services are delivered or by
causing or permitting such altering or tampering, by making or maintaining any unauthorized
connection, whether physically, electrically or inductively, to a distribution or transmission line,
by attaching or maintaining the attachment of any unauthorized device to any cable, wire or
other component of an electric, telephone or cable television system or to a television receiving
set connected to a cable television system, by making or maintaining any unauthorized
modification or alteration to any device installed by a cable television system, or by false token
or other trick or artifice to avoid payment for the service.
In the State of Illinois in the United States of America, theft of labor or services or use of
property is penalized:
(a) A person commits theft when he obtains the temporary use of property, labor or services of
another which are available only for hire, by means of threat or deception or knowing that such
use is without the consent of the person providing the property, labor or services.
In 1980, the drafters of the Model Penal Code in the United States of America arrived at the
conclusion that labor and services, including professional services, have not been included
within the traditional scope of the term "property" in ordinary theft statutes. Hence, they
decided to incorporate in the Code Section 223.7, which defines and penalizes theft of
services, thus:
(1) A person is guilty of theft if he purposely obtains services which he knows are available only
for compensation, by deception or threat, or by false token or other means to avoid payment
for the service. "Services" include labor, professional service, transportation, telephone or other
public service, accommodation in hotels, restaurants or elsewhere, admission to exhibitions,
use of vehicles or other movable property. Where compensation for service is ordinarily paid
immediately upon the rendering of such service, as in the case of hotels and restaurants,
refusal to pay or absconding without payment or offer to pay gives rise to a presumption that
the service was obtained by deception as to intention to pay; (2) A person commits theft if,
having control over the disposition of services of others, to which he is not entitled, he
knowingly diverts such services to his own benefit or to the benefit of another not entitled
thereto.
Interestingly, after the State Supreme Court of Virginia promulgated its decision in Lund v.
Commonwealth,80declaring that neither time nor services may be taken and carried away and
are not proper subjects of larceny, the General Assembly of Virginia enacted Code No. 18-2-98
which reads:
Computer time or services or data processing services or information or data stored in

connection therewith is hereby defined to be property which may be the subject of larceny
under § § 18.2-95 or 18.2-96, or embezzlement under § 18.2-111, or false pretenses under §
18.2-178.
In the State of Alabama, Section 13A-8-10(a)(1) of the Penal Code of Alabama of 1975
penalizes theft of services:
"A person commits the crime of theft of services if: (a) He intentionally obtains services known
by him to be available only for compensation by deception, threat, false token or other means
to avoid payment for the services …"
In the Philippines, Congress has not amended the Revised Penal Code to include theft of
services or theft of business as felonies. Instead, it approved a law, Republic Act No. 8484,
otherwise known as the Access Devices Regulation Act of 1998, on February 11, 1998. Under
the law, an access device means any card, plate, code, account number, electronic serial
number, personal identification number and other telecommunication services, equipment or
instrumentalities-identifier or other means of account access that can be used to obtain money,
goods, services or any other thing of value or to initiate a transfer of funds other than a transfer
originated solely by paper instrument. Among the prohibited acts enumerated in Section 9 of
the law are the acts of obtaining money or anything of value through the use of an access
device, with intent to defraud or intent to gain and fleeing thereafter; and of effecting
transactions with one or more access devices issued to another person or persons to receive
payment or any other thing of value. Under Section 11 of the law, conspiracy to commit access
devices fraud is a crime. However, the petitioner is not charged of violation of R.A. 8484.
Significantly, a prosecution under the law shall be without prejudice to any liability for violation
of any provisions of the Revised Penal Code inclusive of theft under Rule 308 of the Revised
Penal Code and estafa under Article 315 of the Revised Penal Code. Thus, if an individual
steals a credit card and uses the same to obtain services, he is liable of the following: theft of
the credit card under Article 308 of the Revised Penal Code; violation of Republic Act No.
8484; and estafa under Article 315(2)(a) of the Revised Penal Code with the service provider
as the private complainant. The petitioner is not charged of estafa before the RTC in the
Amended Information.
Section 33 of Republic Act No. 8792, Electronic Commerce Act of 2000 provides:
Sec. 33. Penalties.— The following Acts shall be penalized by fine and/or imprisonment, as
follows:
a) Hacking or cracking which refers to unauthorized access into or interference in a computer

system/server or information and communication system; or any access in order to corrupt,
alter, steal, or destroy using a computer or other similar information and communication
devices, without the knowledge and consent of the owner of the computer or information and
communications system, including the introduction of computer viruses and the like, resulting
on the corruption, destruction, alteration, theft or loss of electronic data messages or electronic
documents shall be punished by a minimum fine of One hundred thousand pesos
(P100,000.00) and a maximum commensurate to the damage incurred and a mandatory
imprisonment of six (6) months to three (3) years.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of the
Regional Trial Court and the Decision of the Court of Appeals are REVERSED and SET
ASIDE. The Regional Trial Court is directed to issue an order granting the motion of the
petitioner to quash the Amended Information.
SO ORDERED.
ROMEO J. CALLEJO, SR.

Associate Justice
WE CONCUR:
(No part)
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO, MA. ALICIA AUSTRIA-MARTINEZ

(On leave)
MINITA V. CHICO-NAZARIO*
Associate Justice
C E RTI F I CATI O N
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions
in the above decision were reached in consultation before the case was assigned to the writer
of the opinion of the Court’s Division.
ARTEMIO V. PANGANIBAN
Chief Justice
Footnotes
* On leave.
1
Penned by Associate Justice Bienvenido L. Reyes, with Associate Justices Roberto A.
Barrios and Edgardo F. Sundiam, concurring.
2
an act further amending act no. 3436, as amended, "xxx consolidating the terms and
conditions of the franchise granted to [pldt], and extending the said franchise by twenty-
five (25) years from the expiration thereof xxx."
3
Rollo, pp. 129-130.
4
Id. at 131.
5
Id. at 131, 137.
6
Id.
7
Id. at 138.
8
Id. at 134.
9
Id. at 140.
10
Id. at 142-146.
11
Rollo, pp. 243-246.
12
NOW, THEREFORE, I FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution a Commander-in-Chief of all the
Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated
September 21, 1972, and General Order No. 1 dated September 22, 1972, as
amended, do hereby order and decree that any person who installs any water,
electrical or telephone connection without previous authority from the Metropolitan
Waterworks and Sewerage System, the Manila Electric Company or the Philippine
Long Distance Telephone Company, as the case may be; tampers and/or uses
tampered water or electrical meters or jumpers or other devices whereby water or
electricity is stolen; steals or pilfers water and/or electric meters or water, electric
and/or telephone wires; knowingly possesses stolen or pilfered water and/or electrical
meters as well as stolen or pilfered water, electrical and/or telephone wires, shall, upon
conviction, be punished by prision correccional in its minimum period or a fine ranging
from two thousand to six thousand pesos, or both. If the violation is committed with the
connivance or permission of an employee or officer of the Metropolitan Waterworks and
Sewerage System, or the Manila Electric Company, or the Philippine Long Distance
Telephone Company, such employee or officer shall, upon conviction, be punished by a
penalty one degree lower than prision correccional in its minimum period and forthwith
be dismissed and perpetually disqualified from employment in any public or private
utility or service company.
13
Rollo, pp. 57-58. (Underscoring supplied)
14
Id. at 67-76.
15
Id. at 69. (Emphasis supplied)
16
Id. at 77-80.
17
Id. at 81-86.
18
31 Phil. 494 (1915).
19
Rollo, pp. 87-94.
20
44 Phil. 933, 935 (1922).
21
CA rollo, p. 6.
22
Id. at 9-11.
23
Id.
24
Id.
25
Resolution No. 149, Series of 1999 dated April 16, 1999 (I.S. No. 96-3884), rollo, pp.
95-97.
26
Id.
27
Id. at 32-47.
28
21 Phil. 553 (1911).
29
30
Rollo, pp. 18-19.
31
Id. at 689.
32
Id. at 691.
33
Id. at 669-670.
34
Rollo, p. 670.
35
Madarang v. Court of Appeals, G.R. No. 143044, July 14, 2005, 463 SCRA 318, 327
(2005).
36
G.R. No. 148156, September 27, 2004, 439 SCRA 202 (2000).
37
Id. at 211.
38
Section 9, Rule 110 of the Revised Rules of Criminal Procedure.
39
People v. Weg, 450 N.Y.S.2d 957 (1982).
40
Clines v. Commonwealth, 298 S.W. 1107 (1927).
41
Santiago v. Garchitorena, G.R. No. 109266, December 2, 1993, 228 SCRA 214.
42
Garcia v. Court of Appeals, 334 Phil. 621, 634 (1997); People v. Navarro, 75 Phil.
516, 518 (1945).
43
Section 3(a), Rule 117 of the 2000 Rules of Criminal Procedure.
44
United States v. Wiltberger, 18 U.S. 76 (1820).
45
Dowling v. United States, 473 U.S. 207 (1985).
46
Liparota v. United States, 105 S. Ct. 2084 (1985).
47
Kelley v. State, 119 N.E.2d 322 (1954); State v. McGraw, 480 N.E.2d 552 (1985).
48
United States v. Wiltberger, supra note 44.
49
Dowling v. United States, supra note 45.
50
Viada, codigo penal reformado de 1870, concordado y comentado, 219.
The felony has the following elements:
(1) Apoderamiento de una cosa mueble; (2) Que la cosa mueble sea ajena; (3)
Que el apoderamiento se verifique con intención de lucro; (4) Que se tome la
cosa sin la voluntad de su dueño; (5) Que se realice el apoderamiento de la
cosa sin violencia intimidación en las personas ni fuerza en las cosas (Viada,
220-221).
51
People v. Sison, 379 Phil. 363, 384 (2000); People v. Bustinera, G.R. No. 148233,
June 8, 2004, 431 SCRA 284, 291.
52
Cuello Callon, Derecho Penal, Tomo II, p. 724.
53
Id.
54
See note 52, p. 725. (Underscoring supplied)
55
36 C.J.S. 737.
56
People v. Ashworth, 222 N.Y.S. 24 (1927).
57
People v. Salvilla, G.R. No. 86163, April 26, 1990, 184 SCRA 671, 677 (1990).
58
Harris v. State, 14 S.W. 390 (1890).
59
Woods v. People, 78 N.E. 607 (1906).
60
Villacorta v. Insurance Commission, G.R. No. 54171, October 28, 1980, 100 SCRA
467.
61
Supra note 28.
62
41 Phil. 364 (1921).
63
11 N.E.2d 403 (1937).
64
29 N.E. 808 (1892). (Emphasis supplied)
65
Supra note 59 (Emphasis supplied)
66
Doggett v. Burnet, 65 F.2d 191 (1933).
67
Black’s Law Dictionary, 5th ed., p. 179; Union League Club v. Johnson, 108 P.2d 487,
490 (1940).
68
United States v. McCraken, 19 C.M.R. 876 (1955).
69
People v. Tansey, 593 N.Y.S. 2d 426 (1992).
70
People v. Case, 42 N.Y.S. 2d 101.
71
Commonwealth v. Gerulis, 616 A.2d 686 (1992).
72
Rollo, p. 138.
73
Commonwealth v. Gerulis, supra note 71.
74
Central Power and Light Co. v. State, 165 S.W. 2d 920 (1942).
75
Black’s Law Dictionary, p. 1227.
76
Lund v. Commonwealth, 232 S.E.2d 745 (1977); 50 Am. Jur. 2d Larceny, p. 83.
Imbau, Thomson, Moenssens, Criminal Law, Second Edition, p. 6247, 2 Wharton

77
Criminal Law, Prodded , § 604:369.
78
Id. at 746; Commonwealth v. Rivera, 583 N.E.2d 867 (1991).
79
People v. Tansey, supra note 69.
80
See note 76.
THIRD DIVISION
[G.R. No. 137705. August 22, 2000]
SERGS PRODUCTS, INC., and SERGIO T.

GOQUIOLAY, petitioners, vs. PCI LEASING AND
FINANCE, INC., respondent.
DECISION
PANGANIBAN, J.:
After agreeing to a contract stipulating that a real or immovable

property be considered as personal or movable, a party is estopped from
subsequently claiming otherwise. Hence, such property is a proper subject
of a writ of replevin obtained by the other contracting party.
The Case
Before us is a Petition for Review on Certiorari assailing the January 6,
1999 Decision of the Court of Appeals (CA) in CA-GR SP No. 47332 and
[1] [2]
its February 26, 1999 Resolution denying reconsideration. The decretal

[3]
portion of the CA Decision reads as follows:
WHEREFORE, premises considered, the assailed Order dated February

18, 1998 and Resolution dated March 31, 1998 in Civil Case No. Q-98-
33500 are hereby AFFIRMED.The writ of preliminary injunction issued on
June 15, 1998 is hereby LIFTED. [4]
In its February 18, 1998 Order, the Regional Trial Court (RTC) of
[5]
Quezon City (Branch 218) issued a Writ of Seizure. The March 18, 1998
[6] [7]
Resolution denied petitioners Motion for Special Protective Order, praying

[8]
that the deputy sheriff be enjoined from seizing immobilized or other real
properties in (petitioners) factory in Cainta, Rizal and to return to their
original place whatever immobilized machineries or equipments he may
have removed. [9]
The Facts
The undisputed facts are summarized by the Court of Appeals as

follows:
[10]
On February 13, 1998, respondent PCI Leasing and Finance, Inc. (PCI
Leasing for short) filed with the RTC-QC a complaint for [a] sum of money
(Annex E), with an application for a writ of replevin docketed as Civil Case
No. Q-98-33500.
On March 6, 1998, upon an ex-parte application of PCI Leasing,

respondent judge issued a writ of replevin (Annex B) directing its sheriff to
seize and deliver the machineries and equipment to PCI Leasing after 5
days and upon the payment of the necessary expenses.
On March 24, 1998, in implementation of said writ, the sheriff proceeded

to petitioners factory, seized one machinery with [the] word that he [would]
return for the other machineries.
On March 25, 1998, petitioners filed a motion for special protective order
(Annex C), invoking the power of the court to control the conduct of its
officers and amend and control its processes, praying for a directive for
the sheriff to defer enforcement of the writ of replevin.
This motion was opposed by PCI Leasing (Annex F), on the ground that
the properties [were] still personal and therefore still subject to seizure
and a writ of replevin.
In their Reply, petitioners asserted that the properties sought to be seized

[were] immovable as defined in Article 415 of the Civil Code, the parties
agreement to the contrary notwithstanding. They argued that to give effect
to the agreement would be prejudicial to innocent third parties. They
further stated that PCI Leasing [was] estopped from treating these
machineries as personal because the contracts in which the alleged
agreement [were] embodied [were] totally sham and farcical.
On April 6, 1998, the sheriff again sought to enforce the writ of seizure
and take possession of the remaining properties. He was able to take two
more, but was prevented by the workers from taking the rest.
On April 7, 1998, they went to [the CA] via an original action for certiorari.
Ruling of the Court of Appeals
Citing the Agreement of the parties, the appellate court held that the
subject machines were personal property, and that they had only been
leased, not owned, by petitioners. It also ruled that the words of the
contract are clear and leave no doubt upon the true intention of the
contracting parties. Observing that Petitioner Goquiolay was an
experienced businessman who was not unfamiliar with the ways of the
trade, it ruled that he should have realized the import of the document he
signed. The CA further held:
Furthermore, to accord merit to this petition would be to preempt the trial

court in ruling upon the case below, since the merits of the whole matter
are laid down before us via a petition whose sole purpose is to inquire
upon the existence of a grave abuse of discretion on the part of the [RTC]
in issuing the assailed Order and Resolution. The issues raised herein
are proper subjects of a full-blown trial, necessitating presentation of
evidence by both parties. The contract is being enforced by one, and [its]
validity is attacked by the other a matter x x x which respondent court is in
the best position to determine.
Hence, this Petition. [11]
The Issues
In their Memorandum, petitioners submit the following issues for our

consideration:
A. Whether or not the machineries purchased and imported by SERGS

became real property by virtue of immobilization.
B. Whether or not the contract between the parties is a loan or a lease. [12]
In the main, the Court will resolve whether the said machines are
personal, not immovable, property which may be a proper subject of a writ
of replevin. As a preliminary matter, the Court will also address briefly the
procedural points raised by respondent.
The Courts Ruling
The Petition is not meritorious.
Preliminary Matter:Procedural Questions
Respondent contends that the Petition failed to indicate expressly

whether it was being filed under Rule 45 or Rule 65 of the Rules of
Court. It further alleges that the Petition erroneously impleaded Judge
Hilario Laqui as respondent.
There is no question that the present recourse is under Rule 45. This
conclusion finds support in the very title of the Petition, which is Petition for
Review on Certiorari. [13]
While Judge Laqui should not have been impleaded as a respondent,

substantial justice requires that such lapse by itself should not warrant
[14]
the dismissal of the present Petition. In this light, the Court deems it proper
to remove, motu proprio, the name of Judge Laqui from the caption of the
present case.
Main Issue: Nature of the Subject Machinery
Petitioners contend that the subject machines used in their factory

were not proper subjects of the Writ issued by the RTC, because they were
in fact real property. Serious policy considerations, they argue, militate
against a contrary characterization.
Rule 60 of the Rules of Court provides that writs of replevin are issued
for the recovery of personal property only. Section 3 thereof reads:
[15]
SEC. 3. Order. -- Upon the filing of such affidavit and approval of the
bond, the court shall issue an order and the corresponding writ of replevin
describing the personal property alleged to be wrongfully detained and
requiring the sheriff forthwith to take such property into his custody.
On the other hand, Article 415 of the Civil Code enumerates

immovable or real property as follows:
ART. 415. The following are immovable property:
x x x....................................x x x....................................x x x
(5) Machinery, receptacles, instruments or implements intended by the

owner of the tenement for an industry or works which may be carried on
in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works;
x x x....................................x x x....................................x x x
In the present case, the machines that were the subjects of the Writ of
Seizure were placed by petitioners in the factory built on their own
land.Indisputably, they were essential and principal elements of their
chocolate-making industry. Hence, although each of them was movable or
personal property on its own, all of them have become immobilized by
destination because they are essential and principal elements in the
industry. In that sense, petitioners are correct in arguing that the said
[16]
machines are real, not personal, property pursuant to Article 415 (5) of the
Civil Code. [17]
Be that as it may, we disagree with the submission of the petitioners
that the said machines are not proper subjects of the Writ of Seizure.
The Court has held that contracting parties may validly stipulate that a
real property be considered as personal. After agreeing to such
[18]
stipulation, they are consequently estopped from claiming

otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.
Hence, in Tumalad v. Vicencio, the Court upheld the intention of the
[19]
parties to treat a house as a personal property because it had been made

the subject of a chattel mortgage. The Court ruled:
x x x. Although there is no specific statement referring to the subject

house as personal property, yet by ceding, selling or transferring a
property by way of chattel mortgage defendants-appellants could only
have meant to convey the house as chattel, or at least, intended to treat
the same as such, so that they should not now be allowed to make an
inconsistent stand by claiming otherwise.
Applying Tumalad, the Court in Makati Leasing and Finance Corp. v.

Wearever Textile Mills also held that the machinery used in a factory and
[20]
essential to the industry, as in the present case, was a proper subject of a

writ of replevin because it was treated as personal property in a
contract. Pertinent portions of the Courts ruling are reproduced hereunder:
x x x. If a house of strong materials, like what was involved in the above

Tumalad case, may be considered as personal property for purposes of
executing a chattel mortgage thereon as long as the parties to the
contract so agree and no innocent third party will be prejudiced thereby,
there is absolutely no reason why a machinery, which is movable in its
nature and becomes immobilized only by destination or purpose, may not
be likewise treated as such. This is really because one who has so
agreed is estopped from denying the existence of the chattel mortgage.
In the present case, the Lease Agreement clearly provides that the
machines in question are to be considered as personal
property. Specifically, Section 12.1 of the Agreement reads as follows: [21]
12.1 The PROPERTY is, and shall at all times be and remain, personal
property notwithstanding that the PROPERTY or any part thereof may
now be, or hereafter become, in any manner affixed or attached to or
embedded in, or permanently resting upon, real property or any building
thereon, or attached in any manner to what is permanent.
Clearly then, petitioners are estopped from denying the

characterization of the subject machines as personal property. Under the
circumstances, they are proper subjects of the Writ of Seizure.
It should be stressed, however, that our holding -- that the machines
should be deemed personal property pursuant to the Lease Agreement is
good only insofar as the contracting parties are concerned. Hence, while
[22]
the parties are bound by the Agreement, third persons acting in good faith
are not affected by its stipulation characterizing the subject machinery as
personal. In any event, there is no showing that any specific third party
[23]
would be adversely affected.
Validity of the Lease Agreement
In their Memorandum, petitioners contend that the Agreement is a loan

and not a lease. Submitting documents supposedly showing that they
[24]
own the subject machines, petitioners also argue in their Petition that the
Agreement suffers from intrinsic ambiguity which places in serious doubt
the intention of the parties and the validity of the lease agreement itself.
In their Reply to respondents Comment, they further allege that the
[25]
Agreement is invalid. [26]
These arguments are unconvincing. The validity and the nature of the
contract are the lis mota of the civil action pending before the RTC. A
resolution of these questions, therefore, is effectively a resolution of the
merits of the case. Hence, they should be threshed out in the trial, not in
the proceedings involving the issuance of the Writ of Seizure.
Indeed, in La Tondea Distillers v. CA, the Court explained that the
[27]
policy under Rule 60 was that questions involving title to the subject
property questions which petitioners are now raising -- should be
determined in the trial. In that case, the Court noted that the remedy of
defendants under Rule 60 was either to post a counter-bond or to question
the sufficiency of the plaintiffs bond. They were not allowed, however, to
invoke the title to the subject property. The Court ruled:
In other words, the law does not allow the defendant to file a motion to
dissolve or discharge the writ of seizure (or delivery) on ground of
insufficiency of the complaint or of the grounds relied upon therefor, as in
proceedings on preliminary attachment or injunction, and thereby put at
issue the matter of the title or right of possession over the specific chattel
being replevied, the policy apparently being that said matter should be
ventilated and determined only at the trial on the merits. [28]
Besides, these questions require a determination of facts and a

presentation of evidence, both of which have no place in a petition for
certiorari in the CA under Rule 65 or in a petition for review in this Court
under Rule 45. [29]
Reliance on the Lease Agreement
It should be pointed out that the Court in this case may rely on the
Lease Agreement, for nothing on record shows that it has been nullified or
annulled. In fact, petitioners assailed it first only in the RTC proceedings,
which had ironically been instituted by respondent. Accordingly, it must be
presumed valid and binding as the law between the parties.
Makati Leasing and Finance Corporation is also instructive on this
[30]
point. In that case, the Deed of Chattel Mortgage, which characterized the
subject machinery as personal property, was also assailed because
respondent had allegedly been required to sign a printed form of chattel
mortgage which was in a blank form at the time of signing. The Court
rejected the argument and relied on the Deed, ruling as follows:
x x x. Moreover, even granting that the charge is true, such fact alone
does not render a contract void ab initio, but can only be a ground for
rendering said contract voidable, or annullable pursuant to Article 1390 of
the new Civil Code, by a proper action in court.There is nothing on record
to show that the mortgage has been annulled. Neither is it disclosed that
steps were taken to nullify the same. x x x
Alleged Injustice Committed on the Part of Petitioners
Petitioners contend that if the Court allows these machineries to be

seized, then its workers would be out of work and thrown into the streets.
They also allege that the seizure would nullify all efforts to rehabilitate
[31]
the corporation.
Petitioners arguments do not preclude the implementation of the
Writ. As earlier discussed, law and jurisprudence support its
propriety. Verily, the above-mentioned consequences, if they come true,
should not be blamed on this Court, but on the petitioners for failing to avail
themselves of the remedy under Section 5 of Rule 60, which allows the
filing of a counter-bond. The provision states:
SEC. 5. Return of property. -- If the adverse party objects to the

sufficiency of the applicants bond, or of the surety or sureties thereon, he
cannot immediately require the return of the property, but if he does not
so object, he may, at any time before the delivery of the property to the
applicant, require the return thereof, by filing with the court where the
action is pending a bond executed to the applicant, in double the value of
the property as stated in the applicants affidavit for the delivery thereof to
the applicant, if such delivery be adjudged, and for the payment of such
sum to him as may be recovered against the adverse party, and by
serving a copy bond on the applicant.
WHEREFORE, the Petition is DENIED and the assailed Decision of

the Court of Appeals AFFIRMED. Costs against petitioners.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
[1]
Rollo, pp. 177-180.
[2]
Penned by Justice Romeo A. Brawner (Division acting chairman), with the concurrence of Justices Eloy R.
Bello Jr. and Martin S. Villarama Jr.
[3]
Rollo, p. 189.
[4]
CA Decision, p. 3; rollo, p. 179.
[5]
Rollo, p. 356.
[6]
Presided by Judge Hilario L. Laqui.
[7]
Rollo, pp. 23-24.
[8]
Rollo, pp. 78-79.
[9]
Motion for Special Protective Order, pp. 3-4; rollo, pp. 76-77.
[10]
CA Decision, pp. 1-2; rollo, pp. 177-178.
[11]
The case was deemed submitted for resolution on October 21, 1999, upon receipt by this Court of the
petitioners Memorandum signed by Atty. Victor Basilio N. De Leon of Antonio R. Bautista & Partners.
Respondents Memorandum, which was signed by Atty. Amador F. Brioso Jr. of Perez & Calima Law Offices,
had been filed earlier on September 29, 1999.
[12] Petitioners Memorandum, p. 3; rollo, p. 376.
[13]
Section 1, Rule 45 of the Rules of Court.
[14]
Section 4 (a) of Rule 45 provides that the petition shall state the full name of the parties, without
impleading the lower courts or judges thereof either as petitioners or respondents.
[15]
BA Finance v. CA, 258 SCRA 102, July 5, 1996; Filinvest Credit v. CA, 248 SCRA 549, September 27,
1995;Machinery Engineering Supply v. CA, 96 Phil. 70, October 29, 1954.
[16]
Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197, September 29, 1962, per Labrador, J. See
also Vitug, Compendium of Civil Law and Jurisprudence, 1986 ed., pp. 99-100.
[17]
Peoples Bank & Trust Co. v. Dahican Lumber, 20 SCRA 84, May 16, 1967; Burgos v. Chief of Staff, 133
SCRA 800, December 26, 1984; Davao Sawmill Co. v. Castillo, 61 Phil. 709, August 7, 1935.
[18]
Chua Peng Hian v. CA, 133 SCRA 572, December 19, 1984; Standard Oil Co. v. Jaranillo, 44 Phil. 630,
March 16, 1923; Luna v. Encarnacion, 91 Phil. 531, June 30, 1952; Manarang v. Ofilada, 99 Phil. 109, May
18, 1956; Peoples Bank & Trust Co. v. Dahican Lumber, supra.
[19]
41 SCRA 143, 153, September 30, 1971, per Reyes, JBL, J.
[20]
122 SCRA 296, 300, May 16, 1983, per De Castro, J.
[21]
Rollo, p. 262.
[22]
Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401, April 23, 1958; Navarro v. Pineda, 9 SCRA
631, November 30, 1963.
[23]
Vitug, supra, pp. 100-101.
[24]
Petitioners Memorandum, p. 8; rollo, p. 381.
[25]
Petition, p. 10; rollo, p. 12.
[26]
Reply, p. 7; rollo, p. 301.
[27]
209 SCRA 553, 567, June 8, 1992, per Narvasa, CJ.
[28]
Ibid.
[29]
See Fuentes v. Court of Appeals, 268 SCRA 703, February 26, 1997.
[30]
Supra, p. 301.
[31]
Petition, p. 16; rollo, p. 18.
FIRST DIVISION
G.R. No. L-50003 April 28, 1980
RAMON CODILLA, GUILLERMO CODILLA and NARCISA ARCUINO, petitioners,

vs.
HON. NUMERIANO G. ESTENZO, HON. COURT OF APPEALS, and RUSTICO
CAPAHI, respondents.
Pablo P. Garcia for petitioners.
Gochan & Associates for private respondent.
MELENCIO-HERRERA, J.:
A petition for Review on certiorari of the Decision of the Court of Appeals in CA-G.R. No. SP-
08135 upholding the Order of respondent Judge, dated May 31, 1978, directing execution of
the final judgment in the case below (Case No. 911-1).
The factual antecedents of the case follow:
Lot 657 of the Ormoc Cadastre, containing 450 square meters, is registered under Transfer
Certificate of Title No. 5041 of the Registry of Deeds for Ormoc City in the names of:
RUSTICO CAPAHI, married to Salome Conopio, ½ share; and the other ½

share to the undivided equal shares to GUILLERMO CODILLA, married to
Narcisa Arcuino and RAMON CODILLA, married to Consorcia Enoveso, all of
legal ages, Filipinos, with residence and postal address at Ormoc City,
Philippines.
Although the title still reflects a co-ownership whereby a ½ undivided share belongs to
RUSTICO and a ¼ undivided share belongs to GUILLERMO and the last ¼ undivided share
belongs to RAMON, still, according to an entry on the back of the title, the 453 sq. m. lot has
been actually partitioned with a portion containing 243 square meters adjudicated to
RUSTICO, known as Lot "A", and 207 square meters adjudicated to RAMON and
GUILLERMO, known as Lt "B". There is a peculiar situation in regards to Lot "B" allocated to
RAMON and GUILLERMO in the sense that there is a residential commercial building erected
on that area which occupies almost its entirety.
If Lot "B" has been physically divided between RAMON and GUILLERMO, the land area
allocated to RAMON can be called Lot "B-1", and the portion of the building standing thereon
can be referred to as Portion "B-1 (a)"; while the area allocated to GUILLERMO can be called
Lot "B-2", and the portion of the building standing thereon can be referred to as Portion "B-2
(b)". If Lot "B" has not been actually divided and it has continued to be under co-ownership,
RAMON's undivided interest in Lot "B" can be called Participation "C" and that part of the
building standing thereon as Portion "B/C"; while the undivided interest of GUILLERMO can be
represented as Participation "D" and the portion of the building erected thereon as Portion
"B/D".
On October 27, 1964, RAMON executed a "Contract of Mortgage with Option to Purchase in
favor of private respondent RUSTICO whereby the former mortgaged all his rights, shares and
interests over his one half-share, or 103.5 square meters, "and the building built thereon" to
secure a loan of P6,725.00 without interest if paid within one year. That deed was registered
and annotated on the title to the property. In addition, paragraph 3-a of said Contract reads:
3-a. That for and in consideration of this mortgage, the Mortgagee is hereby
given the option to purchase the aforementioned property, together with the
residential building thereon for the amount of TWENTY THREE THOUSAND
PESOS (P23,000.00), if the right of option to buy is exercised after the third
(3rd) and before the fifth (5th) year from date of this instrument; and, by paying
the amount of TWENTY FIVE THOUSAND PESOS (P 25,000.00) to the
Mortgagor, if the right of option is exercised by the Mortgagee after the fifth
(5th) but before the seventh (7th) year from and after the date of this
instrument; PROVIDED, however, that in both instances, the Mortgagee shall
not sell the aforementioned property to any person, corporation or entity, within
the first three (3) years from and after the date of this instrument. (Emphasis
supplied)
On June 15, 1968, RAMON sold the mortgaged property to his brother GUILLERMO. That was
after RUSTICO's overture to exercise the option to purchase before the end of the fifth year,
and RAMON's attempts to redeem the mortgaged property, had both failed in March/April of
1968.
Case No. 911-0, CFI, Leyte CA-G.R. No. 48834-R, Court of appeals
On June 19, 1968, RAMON filed with the Court of First In. stance of Leyte an action for
Redemption of Mortgage through Consignation against RUSTICO, docketed as "Special Civil
Action No. 911-0" (Mortgage Redemption Case) seeking to compel RUSTICO to receive the
amount consigned by RAMON in payment of the loan of P6,725.00 plus interest, and to
execute a release of mortgage. RUSTICO, in an Amended Answer with Counterclaim,
demanded compliance by RAMON with the terms of the "Mortgage with Option to Purchase".
GUILLERMO and his spouse Narcisa Arcuino were impleaded as "defendants to the counter-
claim after RUSTICO learned of the sale to them by RAMON. Judgment was eventually
rendered therein ordering RAMON to pay the loan of P6,725.00, with interest, or P8,686.46,
and upholding the validity of the deed of sale executed by RAMON in favor of his brother
GUILLERMO covering the mortgaged property. However, on appeal to the Court of Appeals by
both parties, docketed as CA- G.R. No. 48834-R (Appealed Mortgage Redemption Case), said
Court, on February 15, 1977, held that the sale executed by RAMON in favor of GUILLERMO
1
could not defeat RUSTICO's option to purchase and ordered RAMON to execute the
corresponding deed of sale over his half of the property in favor of RUSTICO, as follows:
WHEREFORE, the decision appealed from is hereby reversed and judgment is

rendered setting aside the deed of sale executed by Ramon Codilla in favor of
the Spouses Guillermo C. Codilla and Narcisa Arcuino of the property in
question and ordering the plaintiff Ramon Codilla to execute the corresponding
deed of sale of one-half of the property embraced in Transfer Certificate of Title
No. 5041 containing an area of 103.5 square meters in favor of defendant
Rustico Capahi upon payment by said Rustico Capahi of the purchase price of
twenty-three thousand (P23,000.00) specified in paragraph 3-a of the mortgage
with option to purchase, Exh. '2' and ordering the plaintiff Ramon Codilla and
Narcisa Arcuino to pay, jointly and severally, the defendant Rustico Capahi
moral damages in the amount of P2,000.00 and the sum of P2,000.00 as
attorney's fees.
The amount of P 8,686.46 deposited by Ramon Codilla with the Clerk of Court
of the lower Court shall be deducted from the purchase price to be paid by
defendant Rustics Capahi to the plaintiff Ramon Codilla who is authorized to
withdraw the said amount of P8,686.46. No pronouncement as to costs.
xxx xxx xxx
A motion for Clarification and/or Reconsideration was filed by RUSTICO seeking amendment
of the dispositive portion so as to include the residential building standing on the 103.5 square-
meter portion of the land in the Deed of Sale to be executed in his favor by RAMON. Said
Motion was denied by the Court of Appeals in a Resolution dated April 18, 1977. Apparently, in
the mind of the appellate Court, its judgment was clear enough and did not need any
clarification since the dispositive portion thereof adverted to what was specified in paragraph 3-
a, supra of the contract between the parties.
The Petition for Review on certiorari of the above Decision of the Court of Appeals, filed by the
brothers Codilla (G.R. No. L-46120), was denied by this Court in a Resolution dated July
1,1977.
The Decision in the Appealed Mortgage Redemption Case (CA-G.R. No. 48834-R) having thus
become final and executory, a Writ of Execution, upon motion of RUSTICO, was issued by the
lower Court, presided by respondent Judge, on March 22, 1978, commanding RAMON to
execute the deed of sale in favor of respondent RUSTICO upon the latter's payment of the
purchase price of P23,000.00.
In compliance, on May 5, 1978, RAMON executed a Deed of Absolute Sale in favor of

RUSTICO conveying his undivided one- half-share for a consideration of P23,000.00. It should
be noted that the conveyance made no mention of the residential building.
On May 12, 1978, RAMON filed an ex-parte Motion alleging compliance with the Writ of
Execution and asking for the release of his deposit of P8,686.46. An Opposition thereto, with
Motion for Alias Writ of Execution, was filed by RUSTICO praying that the Clerk of Court be
made to execute the judgment on behalf of RAMON by preparing the deed of conveyance
covering the 103.5 square meter portion, together with the building thereon, upon his
(RUSTICO's) payment of P23,000.00.
On May 31, 1978, respondent Judge granted RUSTICO's petition in an Order, the dispositive
portion of which reads:
wherefore, finding the Opposition to Ex-Parte Motion of Ramon Cedilla, with

Motion for Issuance of an Alias Writ of Execution to be well grounded and in
order to carry out the final decision of the Honorable Court of Appeals as sent
to this Court, this Court hereby designates and directs the Clerk of Court, Atty.
Leonardo D. Dejano to execute the judgment pursuant to Sec. 10 of Rule 39 of
the Rules of Court, and to execute the judgment for and in behalf of the
defendant Ramon Codilla by executing a Deed of Conveyance in favor of
Rustico Capahi over a portion of Lot No. 657 of the Ormoc Cadastre,
containing an area of 103.5 square meters and covered by Transfer Certificate
of Title No. 5041, together with the building thereon upon payment by Mr.
Rustico Capahi of the price of Twenty-Three Thousand Pesos (P23,000.00) as
specified in paragraph 3-a of the Mortgage Contract with Option to Purchase,
Exh. '2', as stated both in the body and dispositive portion of the Decision of the
Honorable Court of Appeals, and after placing said Rustico Capahi in the
possession and ownership of the land, together with the improvements
thereon to deliver to Ramon Codilla the amount of P8,686.46.
SO ORDERED. (Emphasis supplied).

On July 24, 1978, the Clerk of Court executed the Deed of Sale, which was duly annotated on
the title.
What was sold to RUSTICO can be either a specific divided land area, Lot "B-1", and the
portion of the building standing thereon, Portion "B-1(a)", or it could be an undivided area,
Participation "C", and the portion of the building standing thereon, Portion "B/C".
CA-G.R. No. SP-08135
Their Motion for Reconsideration of the above Order having been denied, the brothers filed a
Petition for certiorari and Prohibition with the Court of Appeals, docketed as CA-G.R. No. SP-
08135 (Mortgage Redemption Case on Certiorari) alleging grave abuse of discretion on the
part of respondent Judge in that his Order varied or amended the dispositive portion of the
judgment in the Appealed Mortgage Redemption Case (CA-G.R. No. 48834-R) by providing for
the inclusion of the building when it was not so provided, and by directing the placing of
respondent RUSTICO in possession and ownership of the 103.5 square-meter portion, when
the issue of possession was not involved. The brothers further contended that to place
respondent RUSTICO in possession and ownership of the 103.5 square-meterportion would be
tantamount to depriving them of property without due process of law for the reasons that the
issues of possession and ownership were never raised in the Appealed Mortgage Redemption
Case (CA-G.R. No. 48834-R) and that the 207 square-meter property, on which the residential
building is erected, is owned by them in undivided equal shares and has not yet been
partitioned by them.
In the meantime, as a consequence of the sale of RAMON's interests to RUSTICO,

GUILLERMO, filed before the lower Court on July 5, 1978, a Complaint for Legal Redemption
(Legal Redemption Case) (Civil Case No. 1718-0) against RUSTICO, depositing with the Court
at the same time the sum of P23,000.00. The trial Court found from Exh. "K" and "5" winch was
presented, that there was already a physical separation of the portions belonging to RAMON
and GUILLERMO, that there was no longer a co-ownership between the two brothers, hence,
legal redemption by GUILLERMO was no longer possible. An appeal from said Order now
pends before the Court of Appeals in CA-G.R. No. 64576 (Appealed Legal Redemption Case).
In a Decision dated November 6, 1978, in the Mortgage Redemption Case on certiorari (SP-
2
08135), the Court of Appeals denied the Petition for certiorari and Prohibition and interpreted
its previous Decision in the Appealed Mortgage Redemption Case (CA-G.R. No. 48834-R),
thus:
And when we spoke therein of the 'property in question we refer to none other
than the subject of the contract of mortgage with option to purchase, Exhibit '2',
entered into by and between petitioner Ramon Codilla, as mortgagor, and
private respondent Rustico Capahi, mortgagee with option to purchase, i.e., ...
the aforementioned property, together with the residential building thereon ...
(Par. 3-a, Mortgage with option to purchase). emphasis supplied. To say that
we never intended to include the said residential building in the property
ordered by this Court in CA-G.R. No. 48834 to be conveyed to private
respondent Rustico Capahi would run counter to our holding therein that 'the
defendant Rustico Capahi should be allowed to purchase the property in
question in accordance with paragraph 3-a of the mortgage with option to
purchase, Exh. '2', and to do so would have the effect of amending or modifying
our decision which has already become final and executory. ... 3
Petitioners' Motion for Reconsideration thereof was denied by the Court of Appeals in a
Resolution dated January 30,1979.
This Case
Hence, the, instant Petition for Review alleging that in the Mortgage redemption Case
on certiorari (SP-08135) respondent Court of Appeals erred:
1. In sustaining the view that the direction in the dispositive portion of its final
and executory decision in CA-G.R. No. 48834-R (the Appealed Mortgage
Redemption Case) includes the placing of private respondent in the
'possession and ownership' of a definite portion of the property in question;
2. In applying the doctrines laid down by the Supreme Court in the cases
of 'Perez vs. Evite'. (1 SCRA 946) and 'Confesor vs. Pelayo' (1 SCRA 817)
which, it is humbly submitted, are inapplicable to the case at bar;
3. In sustaining the order in question of the lower Court which virtually directs a
partition of the property in question and which was implemented unilaterally by
the sheriff who thereby arrogated unto himself purely judicial functions; and
4. In not applying the doctrine laid down by the Supreme Court in the case of
'Talens vs. Garcia', (87 Phil. 173) and 'Jabon vs. Alo' (91 Phil. 751), which holds
that the declaration of ownership in favor of a party does not necessarily
include the placing in possession of that party.
The foregoing take issue with the following observations of respondent Court of Appeals:
Petitioners' contention that respondent Judge by his Order of May 31, 1978
cannot direct the placing of Rustico Capahi in the possession and ownership of
the land, together with the improvements thereon as the same is not directed
by the decision of this Court in CA-G.R. No. 48834-R, ignores what was said in
Perez vs. Evite (1 SCRA 946) that a judgment is not confined to what appears
upon the face of the decision but also those necessarily included therein or
necessary thereto. Indeed, as held in Confesor vs. Pelayo, (1 SCRA 817), it is
in accordance with good sense and propriety that, even in the absence of a
special pronouncement as regards the delivery of ownership and possession to
the private respondent in whose favor the deed of sale of the property in
question was directed to be executed, an execution may be issued to effect
such delivery in order to carry into full effect the judgment of this Court. This is
so because from the tenor of the judgment of this Court, the directive to
execute the corresponding deed of sale of the subject property necessarily
involves ownership and possession as an attribute thereof, of such property
and is, therefore, necessarily included in the judgment. It is also important to
note that petitioners have no other claim to possession of the subject property
than that which results from an attribute of ownership. And, as heretofore stated
— such ownership, together of course with its attributes, was ordered by this
Court conveyed by virtue of the corresponding deed of sale which we ordered
petitioner to execute. But because in the correct judgment of the respondent
Judge, the execution of the decision of this Court was returned unsatisfied, it
had to issue the questioned Order of May 31, 1978 for the full enforcement of
Our judgment.
Basically, the bone of contention is whether or not the trial Court had varied and/or amended
the dispositive portion of the judgment of the Court of Appeals in the Appealed Mortgage
Redemption Case (CA-G.R. No. 48834-R) by including the residential building and placing
RUSTICO "in ownership and possession", and whether or not respondent appellate Court had
erred in upholding the said ruling in the Mortgage Redemption Case on certiorari (SP-08135).
The brothers argue that the 207 square-meter property, on which a residential building stands,
still belongs to them in undivided equal shares, as evidenced by Transfer Certificate of Title No.
5041, and that what was mortgaged by RAMON and, consequently, ordered to be sold to
respondent RUSTICO in the Appealed Mortgage Redemption Case (CA-G.R. No. 48834-R)
was only the former's undivided one-half interest therein (Participation "C"). Claiming that the
207 square-meter property has not yet been partitioned by them prior to the conveyance of the
undivided one-half interest of RAMON to RUSTICO, petitioners maintain that RUSTICO may
not be placed in possession of one-half portion thereof, together with the improvements
thereon, until the respective portions shall have been determined and segregated. Thus, they
claim that the Sheriff, in placing RUSTICO in possession of a specific portion of the 207
square-meter property, together with the improvements thereon, arbitrarily arrogated upon
himself the task of dividing the property, thereby depriving them of their property without due
process of law.
RUSTICO, on the other hand, denies petitioners' claim of co- ownership of the 207 square-
meter property, citing petitioners' evidence in the Mortgage Redemption Case (Special Civil
Case No. 911 -0) and the Appealed Mortgage Redemption Case (CA-G.R. No. 48834-R) to the
effect that the portion belonging to RAMON had already been segregated from that belonging
to GUILLERMO, so that the title has ceased to be controlling in respect of the registered
owners thereof. He further claims that as the issue of co-ownership was first raised in the
Mortgage Redemption Case (Case No. 911-0), it has been passed upon on appeal by the
Court of Appeals and may not be raised anew in this Petition on the ground of bar by prior
judgment. Additionally, RUSTICO claims that this Petition was filed out of time.
We shall contend with the procedural aspect first.
Section 1, Rule 45 of the Rules of Court provides that appeal by certiorari from a judgment of
the Court of Appeals may be made by filing with the Supreme Court a Petition for certiorari
within fifteen days from notice of judgment or of the denial of the Motion for Reconsideration
filed in due time. In other words, the filing of a Motion for Reconsideration does not merely
suspend the running of the period within which to appeal, but that the entire period of fifteen
days commences to run again from notice of the denial of said Motion. Petitioners received the
Resolution of the Court of Appeals denying their Motion for Reconsideration on February 9,
1979, so that the period for appealing would have expired on February 24, 1979. However, on
February 15, 1979, petitioners sought an extension of thirty days from the expiration of the
reglementary period or up to March 26, 1979, within which to file a Petition for Review on
Certiorari, which we granted in a Resolution dated March 7, 1979. As the instant Petition was
filed on March 23, 1979, the same was, therefore, filed on time.
We come now to the substantive aspect.
We uphold the Court of Appeals in its conclusion that:
And when we spoke therein of the 'property in question we refer to none other
than the subject of the contract of mortgage with option to purchase, Exhibit '2',
entered into by and between petitioner Ramon Codilla, as mortgagor, and
private respondent Rustico Capahi mortgagee with option to purchase, i.e., ...
the aforementioned property, together with the residential building thereon ...
(Par. 3-a, Mortgage with option to purchase). ...
Indeed, paragraph 3-A of the Contract of Mortgage with Option to Purchase, heretofore quoted,
as well as the opening paragraph thereof clearly included the residential building. Paragraph 4
of RAMON's Complaint in the Mortgage Redemption Case (Case No. 911-0) also specifically
stated:
4. That on October 27, 1964, the herein plaintiff mortgaged one-half (1/2) of his
share of the above-described property, specifically, 103.5 sq. meters, with the
improvements thereon, to the defendant, ... (Emphasis supplied)
The judgment of the Court of Appeals in the Appealed Mortgage Redemption Case (CA-G.R.
No. 48834-R) has become final. Pursuant thereto, the property mortgaged by RAMON in favor
of RUSTICO should be sold to the latter and that sale should be implemented, whether it be a
sale of a specific portion of the land and building, Lot "B-1" and Portion "B-1 (a)" or of
an undivided participation in said land and building, Participation "C" and Portion "B/C".
The question now pending in the Court of Appeals in the Appealed Legal Redemption Case
(CA-G.R. No. 64576) should not deter the execution of the final judgment in the Mortgage
Redemption Case (Case No. 911-0) below.
The question in that suit, still with the appellate Court, is whether GUILLERMO can exercise
the right of redemption, which in turn, hinges on whether co-ownership still exists between him
and RAMON, or whether there has already been a physical partition of Lot "B" between them.
The trial Court in the Legal Redemption Case (CC No. 1718-0) dismissed the suit on the
ground that co-ownership between the two brothers had ceased to exist. The question is now
for the Court of Appeals to decide in CA-G.R. No. 64576. If there has been no actual partition
and co-ownership has continued, GUILLERMO has the right of redemption. But if there has
already been a physical division, as held by the trial Court, it should follow that GUILLERMO
has no right of redemption.
Be it one or the other, the fact remains that under the original Mortgage Redemption Case
(Case No. 911-0), appealed to the Court of Appeals (CA-G.R. No. 48834-R), and upheld by the
same Court on certiorari (CA-G.R. No. SP-08135), ownership and possession of one-half of
Lot "B" and of the building erected thereon can be delivered to RUSTICO, without prejudice to
the legal redemption that may be exercised by GUILLERMO should CA-G.R. No. 64576 be
decided in his favor.
WHEREFORE, the Order of respondent Judge, dated May 31, 1978, upheld by the Court of
Appeals in CA-G.R. No. SP-08135, delivering ownership and possession to respondent
Rustico Capahi over an area consisting of 103.5 square meters of the parcel of land covered
by Transfer Certificate of Title No. 5041 of the Registry of Deeds of Ormoc City, together with
the building thereon, is affirmed, without prejudice to legal redemption by Guillermo Codilla
should he be awarded such right in CA-G.R. No. 64576, and the corresponding judgment
becomes final.
No costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Guerrero and De Castro, JJ., concur.
Fernandez,* J., took no part.
Footnotes
1 per Fernandez, Ramon J., concurred in by Bautista, Jose and Alampay,

Nestor, JJ.
2 Penned by San Diego, J., concurred in by Gutierrez and Cuevas, JJ.
3 p. 40, Rollo.
FIRST DIVISION
G.R. No. L-50008 August 31, 1987
PRUDENTIAL BANK, petitioner,

vs.
HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III, Court of First Instance
of Zambales and Olongapo City; FERNANDO MAGCALE & TEODULA BALUYUT-
MAGCALE, respondents.
PARAS, J.:
This is a petition for review on certiorari of the November 13, 1978 Decision * of the then Court of First
Instance of Zambales and Olongapo City in Civil Case No. 2443-0 entitled "Spouses Fernando A. Magcale and Teodula Baluyut-
Magcale vs. Hon. Ramon Y. Pardo and Prudential Bank" declaring that the deeds of real estate mortgage executed by respondent
spouses in favor of petitioner bank are null and void.
The undisputed facts of this case by stipulation of the parties are as follows:
... on November 19, 1971, plaintiffs-spouses Fernando A. Magcale and Teodula

Baluyut Magcale secured a loan in the sum of P70,000.00 from the defendant
Prudential Bank. To secure payment of this loan, plaintiffs executed in favor of
defendant on the aforesaid date a deed of Real Estate Mortgage over the
following described properties:
l. A 2-STOREY, SEMI-CONCRETE, residential building with warehouse spaces

containing a total floor area of 263 sq. meters, more or less, generally
constructed of mixed hard wood and concrete materials, under a roofing of cor.
g. i. sheets; declared and assessed in the name of FERNANDO MAGCALE
under Tax Declaration No. 21109, issued by the Assessor of Olongapo City with
an assessed value of P35,290.00. This building is the only improvement of the
lot.
2. THE PROPERTY hereby conveyed by way of MORTGAGE includes the right

of occupancy on the lot where the above property is erected, and more
particularly described and bounded, as follows:
A first class residential land Identffied as Lot No. 720, (Ts-308,

Olongapo Townsite Subdivision) Ardoin Street, East Bajac-
Bajac, Olongapo City, containing an area of 465 sq. m. more or
less, declared and assessed in the name of FERNANDO
MAGCALE under Tax Duration No. 19595 issued by the
Assessor of Olongapo City with an assessed value of
P1,860.00; bounded on the
NORTH: By No. 6, Ardoin Street
SOUTH: By No. 2, Ardoin Street
EAST: By 37 Canda Street, and
WEST: By Ardoin Street.
All corners of the lot marked by conc. cylindrical

monuments of the Bureau of Lands as visible
limits. ( Exhibit "A, " also Exhibit "1" for
defendant).
Apart from the stipulations in the printed portion of the

aforestated deed of mortgage, there appears a rider typed at
the bottom of the reverse side of the document under the lists of
the properties mortgaged which reads, as follows:
AND IT IS FURTHER AGREED that in the event

the Sales Patent on the lot applied for by the
Mortgagors as herein stated is released or
issued by the Bureau of Lands, the Mortgagors
hereby authorize the Register of Deeds to hold
the Registration of same until this Mortgage is
cancelled, or to annotate this encumbrance on
the Title upon authority from the Secretary of
Agriculture and Natural Resources, which title
with annotation, shall be released in favor of the
herein Mortgage.
From the aforequoted stipulation, it is obvious that the

mortgagee (defendant Prudential Bank) was at the outset aware
of the fact that the mortgagors (plaintiffs) have already filed a
Miscellaneous Sales Application over the lot, possessory rights
over which, were mortgaged to it.
Exhibit "A" (Real Estate Mortgage) was registered under the

Provisions of Act 3344 with the Registry of Deeds of Zambales
on November 23, 1971.
On May 2, 1973, plaintiffs secured an additional loan from

defendant Prudential Bank in the sum of P20,000.00. To secure
payment of this additional loan, plaintiffs executed in favor of
the said defendant another deed of Real Estate Mortgage over
the same properties previously mortgaged in Exhibit "A."
(Exhibit "B;" also Exhibit "2" for defendant). This second deed of
Real Estate Mortgage was likewise registered with the Registry
of Deeds, this time in Olongapo City, on May 2,1973.
On April 24, 1973, the Secretary of Agriculture issued Miscellaneous Sales

Patent No. 4776 over the parcel of land, possessory rights over which were
mortgaged to defendant Prudential Bank, in favor of plaintiffs. On the basis of
the aforesaid Patent, and upon its transcription in the Registration Book of the
Province of Zambales, Original Certificate of Title No. P-2554 was issued in the
name of Plaintiff Fernando Magcale, by the Ex-Oficio Register of Deeds of
Zambales, on May 15, 1972.
For failure of plaintiffs to pay their obligation to defendant Bank after it became
due, and upon application of said defendant, the deeds of Real Estate
Mortgage (Exhibits "A" and "B") were extrajudicially foreclosed. Consequent to
the foreclosure was the sale of the properties therein mortgaged to defendant
as the highest bidder in a public auction sale conducted by the defendant City
Sheriff on April 12, 1978 (Exhibit "E"). The auction sale aforesaid was held
despite written request from plaintiffs through counsel dated March 29, 1978,
for the defendant City Sheriff to desist from going with the scheduled public
auction sale (Exhibit "D")." (Decision, Civil Case No. 2443-0, Rollo, pp. 29-31).
Respondent Court, in a Decision dated November 3, 1978 declared the deeds of Real Estate
Mortgage as null and void (Ibid., p. 35).
On December 14, 1978, petitioner filed a Motion for Reconsideration (Ibid., pp. 41-53),
opposed by private respondents on January 5, 1979 (Ibid., pp. 54-62), and in an Order dated
January 10, 1979 (Ibid., p. 63), the Motion for Reconsideration was denied for lack of merit.
Hence, the instant petition (Ibid., pp. 5-28).
The first Division of this Court, in a Resolution dated March 9, 1979, resolved to require the
respondents to comment (Ibid., p. 65), which order was complied with the Resolution dated
May 18,1979, (Ibid., p. 100), petitioner filed its Reply on June 2,1979 (Ibid., pp. 101-112).
Thereafter, in the Resolution dated June 13, 1979, the petition was given due course and the
parties were required to submit simultaneously their respective memoranda. (Ibid., p. 114).
On July 18, 1979, petitioner filed its Memorandum (Ibid., pp. 116-144), while private
respondents filed their Memorandum on August 1, 1979 (Ibid., pp. 146-155).
In a Resolution dated August 10, 1979, this case was considered submitted for decision (Ibid.,
P. 158).
In its Memorandum, petitioner raised the following issues:
1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND
2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE

RESPONDENTS OF MISCELLANEOUS SALES PATENT NO. 4776 ON APRIL 24, 1972
UNDER ACT NO. 730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO. P-2554
ON MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE
MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122).
This petition is impressed with merit.
The pivotal issue in this case is whether or not a valid real estate mortgage can be constituted
on the building erected on the land belonging to another.
The answer is in the affirmative.
In the enumeration of properties under Article 415 of the Civil Code of the Philippines, this
Court ruled that, "it is obvious that the inclusion of "building" separate and distinct from the
land, in said provision of law can only mean that a building is by itself an immovable property."
(Lopez vs. Orosa, Jr., et al., L-10817-18, Feb. 28, 1958; Associated Inc. and Surety Co., Inc.
vs. Iya, et al., L-10837-38, May 30,1958).
Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation
of the improvements thereon, buildings, still a building by itself may be mortgaged apart from
the land on which it has been built. Such a mortgage would be still a real estate mortgage for
the building would still be considered immovable property even if dealt with separately and
apart from the land (Leung Yee vs. Strong Machinery Co., 37 Phil. 644). In the same manner,
this Court has also established that possessory rights over said properties before title is vested
on the grantee, may be validly transferred or conveyed as in a deed of mortgage (Vda. de
Bautista vs. Marcos, 3 SCRA 438 [1961]).
Coming back to the case at bar, the records show, as aforestated that the original mortgage
deed on the 2-storey semi-concrete residential building with warehouse and on the right of
occupancy on the lot where the building was erected, was executed on November 19, 1971
and registered under the provisions of Act 3344 with the Register of Deeds of Zambales on
November 23, 1971. Miscellaneous Sales Patent No. 4776 on the land was issued on April 24,
1972, on the basis of which OCT No. 2554 was issued in the name of private respondent
Fernando Magcale on May 15, 1972. It is therefore without question that the original mortgage
was executed before the issuance of the final patent and before the government was divested
of its title to the land, an event which takes effect only on the issuance of the sales patent and
its subsequent registration in the Office of the Register of Deeds (Visayan Realty Inc. vs. Meer,
96 Phil. 515; Director of Lands vs. De Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-
14702, May 23, 1961; Pena "Law on Natural Resources", p. 49). Under the foregoing
considerations, it is evident that the mortgage executed by private respondent on his own
building which was erected on the land belonging to the government is to all intents and
purposes a valid mortgage.
As to restrictions expressly mentioned on the face of respondents' OCT No. P-2554, it will be
noted that Sections 121, 122 and 124 of the Public Land Act, refer to land already acquired
under the Public Land Act, or any improvement thereon and therefore have no application to
the assailed mortgage in the case at bar which was executed before such eventuality.
Likewise, Section 2 of Republic Act No. 730, also a restriction appearing on the face of private
respondent's title has likewise no application in the instant case, despite its reference to
encumbrance or alienation before the patent is issued because it refers specifically to
encumbrance or alienation on the land itself and does not mention anything regarding the
improvements existing thereon.
But it is a different matter, as regards the second mortgage executed over the same properties
on May 2, 1973 for an additional loan of P20,000.00 which was registered with the Registry of
Deeds of Olongapo City on the same date. Relative thereto, it is evident that such mortgage
executed after the issuance of the sales patent and of the Original Certificate of Title, falls
squarely under the prohibitions stated in Sections 121, 122 and 124 of the Public Land Act and
Section 2 of Republic Act 730, and is therefore null and void.
Petitioner points out that private respondents, after physically possessing the title for five years,
voluntarily surrendered the same to the bank in 1977 in order that the mortgaged may be
annotated, without requiring the bank to get the prior approval of the Ministry of Natural
Resources beforehand, thereby implicitly authorizing Prudential Bank to cause the annotation
of said mortgage on their title.
However, the Court, in recently ruling on violations of Section 124 which refers to Sections 118,
120, 122 and 123 of Commonwealth Act 141, has held:
... Nonetheless, we apply our earlier rulings because we believe that as in pari
delicto may not be invoked to defeat the policy of the State neither may the
doctrine of estoppel give a validating effect to a void contract. Indeed, it is
generally considered that as between parties to a contract, validity cannot be
given to it by estoppel if it is prohibited by law or is against public policy (19 Am.
Jur. 802). It is not within the competence of any citizen to barter away what
public policy by law was to preserve (Gonzalo Puyat & Sons, Inc. vs. De los
Amas and Alino supra). ... (Arsenal vs. IAC, 143 SCRA 54 [1986]).
This pronouncement covers only the previous transaction already alluded to and does not pass
upon any new contract between the parties (Ibid), as in the case at bar. It should not preclude
new contracts that may be entered into between petitioner bank and private respondents that
are in accordance with the requirements of the law. After all, private respondents themselves
declare that they are not denying the legitimacy of their debts and appear to be open to new
negotiations under the law (Comment; Rollo, pp. 95-96). Any new transaction, however, would
be subject to whatever steps the Government may take for the reversion of the land in its favor.
PREMISES CONSIDERED, the decision of the Court of First Instance of Zambales &
Olongapo City is hereby MODIFIED, declaring that the Deed of Real Estate Mortgage for
P70,000.00 is valid but ruling that the Deed of Real Estate Mortgage for an additional loan of
P20,000.00 is null and void, without prejudice to any appropriate action the Government may
take against private respondents.
SO ORDERED.
Teehankee, C.J., Narvasa, Cruz and Gancayco, JJ., concur.
Footnotes
* Penned by Judge Domingo D. Panis.
SECOND DIVISION
[ G.R. No. 197297, August 02, 2017 ]
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. SPOUSES

DANILO GO AND AMORLINA GO, RESPONDENTS.
DECISION
LEONEN, J.:
Public land remains inalienable unless it is shown to have been
reclassified and alienated to a private person.[1]
This resolves a Petition for Review assailing the Court of Appeals

Decision dated January 21, 2011 and Resolution dated June 6, 2011 in
CA-G.R. CV No. 93000, which affirmed the Decision of the Municipal
Trial Court in Cities dated December 12, 2008 issuing the Decree of
Registration for Lot No. 4699-B of Subdivision Plan Csd-04-022290-D
in favor of the Spouses Danilo and Amorlina Go.
On August 26, 2006, respondents Spouses Danilo and Amorlina Go

(the Spouses Go) applied for the registration and confirmation of title
over Cadastral Lot No. 4699-B (Lot No. 4699-B), a parcel of land in
Barangay Balagtas, Batangas City covering an area of 1,000 square
meters.[2]
The Spouses Go registered Lot No. 4699-B in their names for taxation
purposes. They had paid the real property taxes, including the arrears,
from 1997 to 2006, as shown in Tax Declaration No. 026-04167.[3] They
had also established a funeral parlor, San Sebastian Funeral Homes, on
the lot.[4]According to them, there were no other claimants over the
property.[5]
The Spouses Go claimed to be in an open, continuous, exclusive,

notorious, and actual possession of the property for seven (7) years
since they bought it.[6] They also tacked their possession through that of
their predecessors-in-interest, as follows:
Sometime in 1945,[7] Anselmo de Torres (Anselmo) came to know that

his parents, Sergia Almero and Andres de Torres (the Spouses de
Torres),[8]owned Lot No. 4699,[9] a bigger property where Lot No. 4699-
B came from. According to Anselmo, the Spouses de Torres paid the
real property taxes during their lifetime and planted bananas,
mangoes, calamansi, and rice on this lot.[10] His mother, Sergia Almero
(Sergia), allegedly inherited Lot No. 4699 from her parents, Celodonio
and Eufemia Almero (the Spouses Almero).[11]
In the 1960s, Anselmo and his siblings inherited Lot No. 4699 from
their parents upon their deaths.[12]
One of Anselmo's sisters, Cristina Almero de Torres Corlit (Cristina),

then built a residential house on Lot No. 4699-B,[13] declaring this
parcel of land under her name for tax purposes, as evidenced by Tax
Declaration No. 026-03492.[14] Meanwhile, Anselmo and his other
siblings built their homes on another portion of Lot No. 4699.
[15]
Anselmo, who was then 28 years old, started living in the eastern
portion from 1966.[16]
On January 26, 2000, the Spouses Go bought Lot No. 4699-B from the
previous owners, siblings Anselmo, Bernardo Almero de Torres,
Leonila Almero de Torres Morada, and Cristina, as evidenced by a
Deed of Absolute Sale.[17]
On August 26, 2006, the Spouses Go (respondents) applied for the

registration and confirmation of title of Lot No. 4699-B.[18] They
attached the Report dated January 31, 2007 of Special Land
Investigator I Ben Hur Hernandez (Hernandez) and the Certification
dated January 29, 2008 of Forester I Loida Maglinao (Maglinao) of the
Batangas City Community Environment and Natural Resources Office
(CENRO) of the Calamba, Laguna, Batangas, Rizal, and Quezon
(CALABARZON) Region of the Department of Environment and
Natural Resources (DENR).[19]
Hernandez's January 31, 2007 Report and Maglinao's January 29,

2008 Certification stated that the property was located in an alienable
and disposable zone[20] since March 26, 1928, under Project No. 13,
Land Classification Map No. 718.[21] No patent or decree was previously
issued over the property.[22]
On November 3, 2006, the Republic of the Philippines (petitioner)

opposed respondents' application for registration for the following
reasons: 1) Lot No. 4699-B was part of the public domain; 2) neither
the Spouses Go nor their predecessors-in-interest had been in open,
continuous, exclusive, and notorious possession and occupation of the
property since June 12, 1945 or even before then; 3) the tax declaration
and payment were not competent or sufficient proof of ownership,
especially considering that these were relatively recent.[23]
Anselmo and his siblings had no proof of their inheritance. He claimed

that the office having custody of the documentary proof of their
inheritance was burned[24] and they no longer had the original copy of
the documents.[25]
In the Decision[26] dated December 12, 2008, the Municipal Trial Court
in Cities confirmed the title of the lot in the name of the Spouses Go.
The dispositive portion read:
Considering that the applicants have duly established essential facts in

support of the application, the Court hereby confirms title to Lot 4699-
B, Cad 264 Batangas Cadastre covered in approved plan Csd-04-
22290-D, containing an area of ONE THOUSAND (1,000) SQUARE
METERS situated at Barangay Balagtas, Batangas City in the name of
Spouses Danilo Go and Amorlina A. Go, of legal age, Filipino and
residents of San Jose Subdivision, Barangay San Sebastian, Lipa City.
Once the Decision becomes final, let the corresponding Decree of

Registration be issued.
SO ORDERED.[27]
Petitioner appealed directly to the Court of Appeals. In the
Decision[28]dated January 21, 2011, the Court of Appeals denied the
appeal:
WHEREFORE, premises considered, the appeal is DENIED. The

assailed Decision, dated December 12, 2008, of the Municipal Trial
Court in Cities (MTCC), Branch 2, Pallocan West, Batangas City in
Land Registration Case No. 2006-162, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.[29]
Petitioner filed its Motion for Reconsideration,[30] which was denied on
June 6, 2011.[31]
Petitioner elevated[32] the case before this Court, arguing that Maglinao
testified having investigated only 200 square meters of the 1,000-
square-meter land for registration.[33] She also admitted that her
certification was based on the approved plan and not on the Land
Classification Map. She certified the lot only to determine "the point or
monument of the entire or whole area" and not to identify its alienable
character. Thus, petitioner argues that Maglinao's certification should
not have been used to determine that the land was alienable and
disposable.[34]
Petitioner assails respondents' failure to submit a copy of the original

classification map that bears the DENR Secretary's approval and its
legal custodian's certification as a true copy.[35] Petitioner argues that a
CENRO Certification is insufficient to establish that a land applied for
registration is alienable.[36]
In the Resolution dated August 15, 2011, this Court required

respondents to submit a certified true copy of any Presidential or
DENR Secretary's issuance stating Lot No. 4699-B as alienable and
disposable.[37]
In their Compliance[38] dated September 25, 2011, the Spouses Go

attached a certified photocopy of the CENRO Certification dated
January 29, 2008,[39] which this Court noted.[40] In the Resolution dated
November 14, 2011, this Court informed the Spouses Go that the
CENRO Certification was not the submission required of them. [41]
On June 20, 2012, the Spouses Go's counsel, Atty. Jose Amor M.
Amorado, was ordered "to show cause why he should not be
disciplinarily dealt with or held in contempt" for failure to comply with
this Court's August 15, 2011 Resolution.[42] The Spouses Go manifested
that they had already complied with this Court's Resolution through
their September 25, 2011 Compliance.[43] They re-attached the CENRO
Certification dated January 29, 2008.[44]
On September 24, 2012, this Court resolved[45] to require respondents

to file their Comment. The Spouses Go failed to do so, which led this
Court to again require[46] their counsel to show cause for their failure to
comply with the September 24, 2012 Resolution.
In their Compliance[47] dated August 15, 2013, the Spouses Go informed

this Court that they would dispense with the filing of their Comment.
For resolution before this Court is whether the Court of Appeals erred
in issuing the Spouses Go a Decree of Registration over Lot No. 4699-
B.
Any application for confirmation of title under Commonwealth Act No.

141[48] already concedes that the land is previously public.
For a person to perfect one's title to the land, he or she may apply with
the proper court for the confirmation of the claim of ownership and the
issuance of a certificate of title over the property.[49] This process is also
known as judicial confirmation of title.[50]
Section 48(b) of Commonwealth Act No. 141, as amended[51] by

Presidential Decree No. 1073,[52] states who can apply for judicial
confirmation of title:
Section 48. The following described citizens of the Philippines,

occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance [Regional Trial
Court] of the province where the land is located for confirmation of
their claims and the issuance of a certificate of title therefor, under the
Land Registration Act, to wit:
....
(b) Those who by themselves or through their predecessors in interest
have been in the open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition or ownership, except as against the
government, since July twenty-sixth, eighteen hundred and ninety-
four, except when prevented by war or force majeure. Those shall be
conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under
the provisions of this chapter. (Emphasis supplied)
Commonwealth Act No. 141 is a special law that applies to agricultural
lands of the public domain, not to forests, mineral lands, and national
parks.[53]The requisite period of possession and occupation is different
from that of land classification.
In an application for judicial confirmation of title, an applicant already

holds an imperfect title to an agricultural land of the public domain
after having occupied it from June 12, 1945 or earlier.[54] Thus, for
purposes of obtaining an imperfect title, the date it was classified is
immaterial.[55]
Classifying a land of the public domain as agricultural is essential only

to establish the applicant's "eligibility for land registration, not the
ownership or title over it."[56] Heirs of Malabanan v. Republic of the
Philippines[57]explained:
[T]he applicant's imperfect or incomplete title is derived only from

possession and occupation since June 12, 1945, or earlier. This means
that the character of the property subject of the application as alienable
and disposable agricultural land of the public domain determines its
eligibility for land registration, not the ownership or title over it. [58]
In Malabanan, the Court En Banc affirmed that June 12, 1945 is the
"reckoning point of the requisite possession and occupation" and not of
the land classification as alienable and disposable:
[T]he choice of June 12, 1945 as the reckoning point of the requisite
possession and occupation was the sole prerogative of Congress, the
determination of which should best be left to the wisdom of the
lawmakers. Except that said date qualified the period of possession
and occupation, no other legislative intent appears to be associated
with the fixing of the date of June 12, 1945. Accordingly, the Court
should interpret only the plain and literal meaning of the law as written
by the legislators.
[A]n examination of Section 48 (b) of the Public Land Act indicates

that Congress prescribed no requirement that the land subject of the
registration should have been classified as agricultural since June 12,
1945, or earlier.[59] (Emphasis supplied)
Thus, the land may be declared alienable and disposable at any time,
not necessarily before June 12, 1945. The moment that the land is
declared alienable and disposable, an applicant may then initiate the
proceedings for the judicial confirmation of title.
On the other hand, for the requisite duration of possession, an

applicant must have had possession of the property under a bona fide
claim of ownership or acquisition, from June 12, 1945 or earlier. Such
possession must have also been open, continuous, exclusive, and
notorious.[60]
Under Section 11(4)(a) of Commonwealth Act No, 141, the judicial

confirmation of imperfect or incomplete titles, which the law describes
as "judicial legalization," allows for agricultural public lands to be
disposed of by the State and acquired by Filipino citizens.[61]
Meanwhile, Section 14(1) of Presidential Decree No. 1529 [62] provides

for the procedure to register a title under the Torrens system:
Section 14. Who may apply. — The following persons may file in the
proper Court of First Instance an application for registration of title to
land, whether personally or through their duly authorized
representatives:
Those who by themselves or through their predecessors-in-interest

have been in open, continuous, exclusive and notorious possession
(1) and occupation of alienable and disposable lands of the public
domain under a bona fide claim of ownership since June 12, 1945,
or earlier.
Section 14(1) of Presidential Decree No. 1529 does not vest or create a
title to a public land that has already existed or has been vested under
Commonwealth Act No. 141.[63] The procedure of titling under
Presidential Decree No. 1529 "simply recognizes and documents
ownership and provides for the consequences of issuing paper titles." [64]
Thus, under Section 48(b) of Commonwealth Act No. 141, as amended,
and Section 14(1) of Presidential Decree No. 1529, Filipino citizens
applying for the judicial confirmation and registration of an imperfect
title must prove several requisites. First, they must prove that they, by
themselves or through their predecessors-in-interest, have been in
open, continuous, exclusive, and notorious possession of the property.
Second, it must be settled that the applicants' occupation is under
a bona fide claim of acquisition or ownership since June 12, 1945 or
earlier, immediately before the application was filed. Third, it should be
established that the land is an agricultural land of public domain.
Finally, it has to be shown that the land has been declared alienable
and disposable.[65]
The Spouses Go's possession, by themselves or through their

predecessors-in-interest, does not meet the statutory requirements.
The evidence the Spouses Go submitted to prove their required length

of possession consist of Anselmo's testimony, Cristina's sole Tax
Declaration, and the Spouses Go's sole Tax Declaration. Other than
these pieces of evidence, the Spouses Go could not support their claim
of possession in the concept of an owner, by themselves or through
their predecessors-in-interest, from June 12, 1945 or earlier.
The records do not show that the Spouses Go's predecessors-in-interest

fenced the original 3,994-square-meter Lot No. 4699, claiming it as
exclusively theirs or that they introduced improvements on it since
June 12, 1945 or earlier. Cristina built a residential house on Lot No.
4699-B[66]when her parents died in the 1960s,[67] while Anselmo started
living in the eastern portion of Lot No. 4699 in 1966 when he was 28
years old.[68]These events happened at least 15 years after 1945.
Moreover, the siblings could not produce any documentary proof of
their alleged inheritance of this land from their parents.[69]
Apart from Cristina's single tax declaration and the Spouses Go's single
tax declaration covering even Cristina's arrears from 1997 to 2000,
nothing in the records shows that the Spouses Go's predecessors-in-
interest religiously paid real property taxes. Payment of real property
taxes is a "good indicia of the possession in the concept of owner for no
one in his [or her] right mind would be paying taxes for a property that
is not in his [or her] actual, or at the least constructive, possession." [70]
Anselmo only gave bare assertions that his parents paid the real
property taxes during their lifetime.[71] Neither did the Spouses Go give
any proof of the alleged tax payments of the Spouses de Torres or of
Anselmo's grandparents, the Spouses Almero.
Although not adequate to establish ownership, a tax declaration may be

a basis to infer possession.[72] This Court has highlighted that where tax
declaration was presented, it must be the 1945 tax declaration because
June 12, 1945 is material to the case.[73] The specific date must be
ascertained; otherwise, applicants fail to comply with the requirements
of the law.[74] In Republic v. Manna Properties:[75]
It is unascertainable whether the 1945 tax declaration was issued on,

before or after 12 June 1945. Tax declarations are issued any time of the
year. A tax declaration issued in 1945 may have been issued in
December 1945. Unless the date and month of issuance in 1945 is
stated, compliance with the reckoning date in [Commonwealth Act
No.] 141 cannot be established.[76] (Emphasis in the original)
II
Even assuming that there is sufficient evidence to establish their claim

of possession in the concept of an owner since June 12, 1945, the
Spouses Go nevertheless failed to prove the alienable and disposable
character of the land.
The 1987 Constitution declares that the State owns all public lands.
[77]
Public lands are classified into agricultural, mineral, timber or forest,
and national parks. Of these four (4) types of public lands, only
agricultural lands may be alienated. Article XII, Sections 2 and 3 of the
Constitution provide:
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 . . .
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 [to] which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands . . . (Emphasis supplied)
Thus, an applicant has the burden of proving that the public land has
been classified as alienable and disposable.[78] To do this, the applicant
must show a positive act from the government declassifying the land
from the public domain[79] and converting it into an alienable and
disposable land.[80] "[T]he exclusive prerogative to classify public lands
under existing laws is vested in the Executive
Department."[81] In Victoria v. Republic:[82]
To prove that the land subject of the application for registration is

alienable, an applicant must establish the existence of a positive act of
the government such as a presidential proclamation or an executive
order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or statute. The applicant may
secure a certification from the government that the lands applied for
are alienable and disposable, but the certification must show that the
DENR Secretary had approved the land classification and released
the land of the public domain as alienable and disposable[.][83]
(Emphasis supplied, citations omitted)
Section X(1)[84] of the DENR Administrative Order No. 1998-24 and
Section IX(1)[85] of DENR Administrative Order No. 2000-11 affirm that
the DENR Secretary is the approving authority for "[l]and classification
and release of lands of the public domain as alienable and disposable."
Section 4.6 of DENR Administrative Order No. 2007-20 defines land
classification as follows:
Land classification is the process of demarcating, segregating,

delimiting and establishing the best category, kind, and uses of public
lands. Article XII, Section 3 of the 1987 Constitution of the Philippines
provides that lands of the public domain are to be classified into
agricultural, forest or timber, mineral lands, and national parks.
These provisions, read with Victoria v. Republic[86] establish the rule
that before an inalienable land of the public domain becomes private
land, the DENR Secretary must first approve the land classification into
an agricultural land and release it as alienable and disposable. [87] The
DENR Secretary's official acts "may be evidenced by an official
publication thereof or by a copy attested by the officer having legal
custody of the record, or by his deputy."[88]
The CENRO or the Provincial Environment and Natural Resources

Officer will then conduct a survey to verify that the land for original
registration falls within the DENR Secretary-approved alienable and
disposable zone.[89]
The CENRO certification is issued only to verify the DENR Secretary

issuance through a survey. "Thus, the CENRO Certification should have
been accompanied by an official publication of the DENR Secretary's
issuance declaring the land alienable and disposable."[90] A CENRO
certification, by itself, is insufficient to prove the alienability and
disposability of land sought to be registered.[91] In Republic v. Lualhati:
[92]
[I]t has been repeatedly ruled that certifications issued by the CENRO,
or specialists of the DENR, as well as Survey Plans prepared by the
DENR containing annotations that the subject lots are alienable, do not
constitute incontrovertible evidence to overcome the presumption that
the property sought to be registered belongs to the inalienable public
domain. Rather, this Court stressed the importance of proving
alienability by presenting a copy of the original classification of the
land approved by the DENR Secretary and certified as true copy by the
legal custodian of the official records.[93] (Emphasis supplied)
Here, in its Decision[94] dated December 12, 2008, the Court of Appeals
concluded that the January 29, 2008 CENRO Certification, which
stated that Lot No. 4699-B was within alienable and disposable zone,
was conclusive proof that this land applied for registration was
alienable. This Court disagrees.
To establish that a land is indeed alienable and disposable, applicants
must submit the application for original registration with the CENRO
certification and a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of
the official records.[95]
Judicially entrenched[96] is the rule that it is the DENR Secretary who

has the authority to approve land classification and release a land of
public domain as alienable and disposable. In Republic v. T.A.N.
Properties:[97]
[I]t is not enough for the PENRO or CENRO to certify that a land is
alienable and disposable. The applicant for land registration must
prove that the DENR Secretary had approved the land classification
and released the land of the public domain as alienable and disposable,
and that the land subject of the application for registration falls within
the approved area per verification through survey by the PENRO or
CENRO. In addition, the applicant for land registration must present a
copy of the original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records.
These facts must be established to prove that the land is alienable and
disposable.[98]
Republic v. Hanover[99] ruled that a CENRO certification does not
constitute incontrovertible proof that a piece of land is alienable and
disposable. This is because "the CENRO is not the official repository or
legal custodian of the issuances of the DENR Secretary declaring the
alienability and disposability of public lands."[100] Republic v. Vda. De
Josonexplained:[101]
This doctrine unavoidably means that the mere certification issued by

the CENRO or PENRO did not suffice to support the application for
registration, because the applicant must also submit a copy of the
original classification of the land as alienable and disposable as
approved by the DENR Secretary and certified as a true copy by the
legal custodian of the official records.[102]
III
The pieces of evidence the Spouses Go adduced fall short of the
requirements of the law.
First, the Spouses Go failed to present a certified true copy of the

original classification of the DENR Secretary. This Court has given
them enough chances to prove their claim. As a rule, this Court can
only consider the evidence submitted before the trial court.
[103]
Nevertheless, this Court gave respondents the opportunity to
submit "a certified true copy of the Presidential or Department of
Environment and Natural Resources Secretary's issuance declaring the
property alienable and disposable."[104]They failed to comply despite
being given a show-cause order.[105]
This Court also required them to file their Comment on petitioner's

opposition to their original registration.[106] Instead of complying, they
asked that their Comment be dispensed with.[107]
Second, although the Spouses Go submitted a CENRO certification

stating that the land was verified to be within alienable and disposable
zone under Project No. 13, Land Classification Map No. 718, Maglinao,
the person who issued the CENRO Certification, testified otherwise.
She admitted in her testimony that, she certified the lot only to
determine "the point or monument of the entire or whole area" and not
to identify its alienable character.[108]
The Spouses Go have the burden to show that the land for registration
is alienable or disposable,[109] which they miserably failed to do so.
Without the original land classification approved by the DENR
Secretary, the Spouses Go's application for registration must be denied.
[110]
The land remains inalienable.
In sum, the Court of Appeals gravely erred in affirming the trial court's
Decision that granted the Spouses Go's application for registration of
Lot No. 4699-B. The Spouses Go failed to adequately prove their claim
of possession in the concept of an owner since June 12, 1945. They
likewise failed to establish that the land applied for registration is
alienable and disposable. Thus, their occupation of this land, no matter
how long, cannot ripen into ownership and cannot be registered as a
title.[111]
WHEREFORE, the Petition is GRANTED. The Court of Appeals

Decision dated January 21, 2011 and Resolution dated June 6, 2011 in
CA-G.R. CV No. 93000, which affirmed the Decision of the Municipal
Trial Court in Cities dated December 12, 2008,
are REVERSED and SET ASIDE. The application for registration of
the Spouses Danilo Go and Amorlina Go of Lot No. 4699-B of
Subdivision Plan Csd-04-022290-D is DENIED for lack of merit.
SO ORDERED.
Carpio, (Chairperson), Peralta, Mendoza, and Martires, JJ., concur.
[1]
Republic v. Vega, 654 Phi). 511, 520 (2011) [Per J. Sereno, Third
Division].
[2]
Rollo, p. 32, Court of Appeals Decision.
[3]
Id. at 34, Court of Appeals Decision.
[4]
Id. at 56, RTC Decision.
[5]
Id. at 57.
[6]
Id. at 56.
[7]
Id. at 39. The records state that Anselmo was born on April 21, 1938
and he was seven (7) years old when he allegedly learned his parents'
ownership of the land.
[8]
[9]
Id. at 39. See rollo, pp. 54 and 56. Lot No. 4699 was a 3,994-square-
meter parcel of land that was subdivided into small areas under
Subdivision Plan Csd-04-022290-D.
[10]
Id. at 39.
[11]
Id. at 32.
[12]
[13]
Id. at 56-57, RTC Decision.
[14]
[15]
[16]
Id. at 57.
[17]
Id. at 15,32.
[18]
[19]
[20]
Id. at 57.
[21]
Id. at 74.
[22]
[23]
Id. at 36-37. Court of Appeals Decision.
[24]
Id. at 32. See rollo, p. 56, the Municipal Trial Court in Cities cites a
Certification dated March 31, 2008 of the Office of the City Assessor of
Batangas City purportedly showing that the office was burned on an
unstated date.
[25]
[26]
Id. at 54-59. The Decision, docketed as LRC Case No. 2006-162, was
penned by Judge Eleuterio L. Bathan of Branch 2, Municipal Trial
Court in Cities, Pallocan West, Batangas City.
[27]
Id. at 58-59.
[28]
Id. at 31-49. The Decision, docketed as CA-G.R. CV No. 93000, was
penned by Associate Justice Antonio L. Villamor and concurred in by
Associate Justices Jose C. Reyes, Jr. and Franchito N. Diamante of the
Special Thirteenth Division, Court of Appeals, Manila.
[29]
Id. at 48.
[30]
Id. at 60-65.
[31]
Id. at 50-53. The Resolution was penned by Associate Justice
Antonio L. Villamor and concurred in by Associate Justices Jose C.
Reyes, Jr. and Franchito N. Diamante of the Former Special Thirteenth
Division of the Court of Appeals, Manila.
[32]
Id. at 10-30, Petition for Review.
[33]
Id. at 20-21.
[34]
Id. at 21.
[35]
Id.
[36]
Id. at 22.
[37]
Id. at 70.
[38]
Id. at 72-73.
[39]
Id. at 74.
[40]
Id. at 76.
[41]
Id.
[42]
Id. at 82.
[43]
Id. at 83-86.
[44]
Id. at 87.
[45]
Id. at 89.
[46]
Id. at 95.
[47]
Id. at 96-97.
[48]
The Public Land Act (1936).
[49]
See Com. Act No. 141, sec. 48.
[50]
Heirs of Malabanan v. Republic, 717 Phil. 141, 164 (2013) [Per J.
Bersamin, En Banc].
[51]
See Republic v. Court of Appeals, 489 Phil. 405, 417 (2005) [Per J.
Tinga, Second Division]. This Court has explained:
When the Public Land Act was first promulgated in 1936, the period of
possession deemed necessary to vest the right to register their title to
agricultural lands of the public domain commenced from July 26, 1894.
However, this period was amended by R.A. No. 1942, which provided
that the bona fide claim of ownership must have been for at least thirty
(30) years. Then in 1977, Section 48(b) of the Public Land Act was
again amended, this time by P.D. No. 1073, which pegged the reckoning
date on June 12, 1945.
[52]
Pres. Decree No. 1073, sec. 4 provides:
Section 4. The provisions of Section 48(b) and Section 48(c), Chapter

VIII of the Public Land Act are hereby amended in the sense that these
provisions shall apply only to alienable and disposable lands of the
public domain which have been in open, continuous, exclusive and
notorious possession and occupation by the applicant himself or thru
his predecessor-in-interest, under a bona fide claim of acquisition of
ownership, since June 12, 1945.
[53]
In Heirs of Malabanan v. Republic, 717 Phil. 141, 164(2013) [Per J.
Bersamin, En Banc]. Note that Section 48(b) of the Public Land Act
used the words "lands of the public domain" or "alienable and
disposable lands of the public domain" to clearly signify that lands
otherwise classified, i.e., mineral, forest or timber, or national parks,
and lands of patrimonial or private ownership, are outside the coverage
of the Public Land Act. What the law does not include, it excludes. The
use of the descriptive phrase "alienable and disposable" further limits
the coverage of Section 48(b) to only the agricultural lands of the public
domain as set forth in Article XII, Section 2 of the 1987 Constitution.
[54]
Id.
[55]
Id.
[56]
Id. at 166.
[57]
717 Phil. 141 (2013) [Per J. Bersamin, En Banc].
[58]
Id. at 166.
[59]
Id. at 165.
[60]
Com. Act No. 141, sec. 48(b).
[61]
Com. Act No. 141, sec. 11 provides:
Section 11. Public lands suitable for agricultural purposes can be

disposed of only as follows, and not otherwise:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization; or
(b) By administrative legalization (free patent).
[62]
Property Registration Decree (1978).
[63]
Development Bank of the Phils. v. Court of Appeals, 387 Phil. 283,
296 (2000) [Per J. Mendoza, Second Division]); Concurring and
Dissenting Opinion of J. Leonen in Heirs of Malabanan v. Republic,
717 Phil. 141, 207 (2013) [Per J. Bersamin, En Banc]; Republic v.
Bautista Jr., G.R. No. 166890, June 28, 2016
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurispradence/2016/june2016/166890.pdf> 5 [Per J. Bersamin,
First Division]).
[64]
Concurring and Dissenting Opinion of J. Leonen in Heirs of
Malabanan v. Republic, 1X1 Phil. 141, 207 (2013) [Per J. Bersamin, En
Banc].
[65]
Republic v. Lualhati, G.R. No. 183511, March 25, 2015, 757 Phil. 119,
129 (2015) [Per J. Peralta, Third Division]; La Tondeña, Inc. v.
Republic, G.R. No. 194617, August 5, 2015, 765 SCRA 265, 283 (2015)
[Per J. Leonen, Second Division].
[66]
[67]
Id. at 56-57.
[68]
Id. at 57.
[69]
[70]
Republic v. Gielczyk, 720 Phil. 385, 397 (2013) [Per J. Reyes, First
Division].
[71]
Rollo, p. 39, CA Decision.
[72]
Republic v. Manna Properties Inc., 490 Phil. 654, 667-668 (2005)
[Per J. Carpio, First Division].
[73]
Id. at 668.
[74]
Id.
[75]
490 Phil. 654 (2005) [Per J. Carpio, First Division].
[76]
Id. at 668.
[77]
Republic v. Lualhati, 757 Phil. 119, 129 (2015) [Per J. Peralta, Third
Division].
[78]
Republic v. Lualhati, 757 Phil. 119 (2015) [Per J. Peralta, Third
Division].
[79]
Victoria v. Republic, 666 Phil. 519, 525 (2011) [Per J. Abad, Second
Division].
[80]
Ituralde v. Falcasantos, 361 Phil. 245, 250 (1999) [Per J. Pardo.
First Division]; La Tondeña, Inc. v. Republic, G.R. No. 194617, August
5, 2015, 765 SCRA 265, 285 [Per J. Leonen, Second Division].
[81]
Heirs of Malabanan v. Republic, 717 Phil. 141, 162 (2013) [Per J.
Bersamin, En Banc].
[82]
666 Phil. 519 (2031) [Per J. Abad, Second Division].
[83]
Id. at 525.
[84]
DENR Adm. Order No. 1998-24.
[85]
Dated February 8, 2000, at 72.
[86]
666 Phil. 519 (2011) [Per J. Abad, Second Division].
[87]
Republic v. Sese, 735 Phil. 108, 121 (2014) [Per J. Mendoza, Third
Division].
[88]
Republic v. T.A.N. Properties, Inc., 578 Phil. 441, 453 (2008) [Per J.
Carpio, First Division]; see RULES OF COURT, Rules 132, sec. 19(a).
[89]
Republic v. Sese, 735 Phil. 108, 121 (2014) [Per J. Mendoza, Third
Division].
[90]
Republic v. Hanover Worldwide Trading Corp., 636 Phil. 739, 752
(2010) [Per J. Peralta, Second Division].
[91]
Republic v. Local Superior of the Institute of the Sisters of the
Sacred Heart of Jesus of Ragusa, G.R. No. 185603, February 10, 2016,
783 SCRA 501, 514 [Per J. Reyes, Third Division].
[92]
757 Phil. 119 (2015) [Per J. Peralta, Third Division].
[93]
Id. at 131.
[94]
Rollo, pp. 54-59.
[95]
Republic v. Lualhati, 757 Phil. 119, 132 (2015) [Per J. Peralta, Third
Division].
[96]
See Republic v. T.A.N. Properties, Inc., 578 Phil. 441, 453 (2008)
[Per J. Carpio, First Division], Republic v. Hanover Worldwide
Trading Corp., 636 Phil. 739, 752 (2010) [Per J. Peralta, Second
Division], Republic v. Sese, 735 Phil. 108, 121 (2014) [Per J. Mendoza,
Third Division], Republic v. Vda. de Joson, 728 Phil. 550, 562 (2014)
[Per J. Bersamin, First Division], Republic v. Lualhati, 757 Phil. 119,
130-131 (2015) [Per J. Peralta, Third Division], Republic v. Local
Superior of the Institute of the Sisters of the Sacred Heart of Jesus of
Ragusa, G.R. No. 185603, February 10, 2016, 783 SCRA 501, 514 [Per
J, Reyes, Third Division]; Republic v. Vega, 654 Phil. 511 (2011) [Per J.
Sereno, Third Division].
[97]
[98]
Id. at 452-453.
[99]
636 Phil. 739 (2010) [Per J. Peralta, Second Division].
[100]
Id. at 752.
[101]
Republic v. Vda. de Joson, 728 Phil. 550 (2014) [Per J. Bersamin,
First Division].
[102]
Id. at 562.
[103]
Id.
[104]
Rollo, p. 70.
[105]
Id. at 82.
[106]
Id. at 89.
[107]
Id. at 96.
[108]
Id. at 21.
[109]
Republic v. Gomez, 682 Phil. 631, 637 (2012) [Per J. Sereno,
Second Division].
[110]
Republic v. Local Superior of the Institute of the Sisters of the
Sacred Heart of Jesus of Ragusa, G.R. No. 185603, February 10, 2016,
783 SCRA 501, 514 [Per J. Reyes, Third Division].
[111]
Republic v. Vega, 654 Phil. 511, 521 (2011) [Per J. Sereno, Third
Division].
EN BANC
August 1, 2017
G.R. No. 210669
HI-LON MANUFACTURING, INC., Petitioner,

vs.
COMMISSION ON AUDIT, Respondent
DECISION
PERALTA, J.:
This Petition for Certiorari under Rule 64, in relation to Rule 65 of the 1997 Rules of Civil
Procedure,
seeks to annul and set aside the Commission on Audit (COA) Decision No. 2011-003 dated 1
January 20, 2011, which denied HI-LON Manufacturing, Inc. 's (HI-LON) petition for review,
and affirmed with modification the Notice of Disallowance (ND) No. 2004-032 dated January
29, 2004 of COA's Legal and Adjudication Office-National Legal and Adjudication
Section (LAO-N). The LAO-N disallowed the amount of ₱9,937,596.20, representing the
difference between the partial payment of ₱10,461,338.00 by the Department of Public Works
and Highways (DPWH) and the auditor's valuation of ₱523,741.80, as just compensation for
the 29,690-square-meter road right-of-way taken by the government in 1978 from the subject
property with a total area of 89,070 sq. m. supposedly owned by HI-LON. The dispositive
portion of the assailed COA Decision No. 2011-003 reads:
WHEREFORE, premises considered, the instant petition for review is hereby DENIED for lack
of merit. Accordingly, ND No. 2004- 32 dated January 29, 2004 amounting to ₱9,937,596.20 is
hereby AFFIRMED with modification on the reason thereof that the claimant is not entitled
thereto.
On the other hand, the Special Audit Team constituted under COA Office Order No. 2009-494
dated July 16, 2009 is hereby instructed to issue a ND for the ₱523,741.80 payment to Hi-Lon
not covered by ND No. 2004-032 without prejudice to the other findings to be embodied in the
special audit report.
2
This Petition likewise assails COA's Decision No. 2013-212 dated December 3, 2013 which
3
denied HI-LON's motion for reconsideration, affirmed with finality COA Decision No. 2011-003,
and required it to refund payment made by DPWH in the amount of ₱10,461,338.00. The
dispositive portion of the assailed COA Decision No. 2013-212 reads:
WHEREFORE, the instant Motion for Reconsideration is hereby DENIED for lack of merit.
Accordingly, Commission on Audit Decision No. 2011-003 dated January 20, 2011 is
hereby AFFIRMEDWITHFINALITY. Hi-Lon Manufacturing Co., Inc. is hereby required to
refund the payment made by the Department of Public Works and Highways in the amount of
₱10,461,338.00. 4
The antecedent facts are as follows:
Sometime in 1978, the government, through the then Ministry of Public Works and Highways
(now DPWH), converted to a road right-of-way (RROW) a 29,690 sq. m. portion of the 89,070
sq. m. parcel of land (subject property) located in Mayapa, Calamba, Laguna, for the Manila
South Expressway Extension Project. The subject property was registered in the name of
Commercial and Industrial Real Estate Corporation (CIREC) under Transfer Certificate of
Title (TCT) No. T-40999.
Later on, Philippine Polymide Industrial Corporation (PPIC) acquired the subject property,
which led to the cancellation of TCT No. T-40999 and the issuance of TCT No. T-120988 under
its name. PPIC then mortgaged the subject property with the Development Bank of the
Philippines (DBP), a government financing institution, which later acquired the property in a
foreclosure proceeding on September 6, 1985. TCT No. T-120988, under PPIC's name, was
then cancelled, and TCT No. T-151837 was issued in favor of DBP.
Despite the use of the 29,690 sq. m. portion of the property as RROW, the government neither
annotated its claim or lien on the titles of CIREC, PPIC and DBP nor initiated expropriation
proceedings, much less paid just compensation to the registered owners.
Upon issuance of Administrative Order No. 14 dated February 3, 1987, entitled "Approving the
Identification of and Transfer to the National Government of Certain Assets and Liabilities of
the Development Bank of the Philippines and the Philippine National Bank," the DBP submitted
all its acquired assets, including the subject property, to the Asset Privatization Trust (APT) for
disposal, pursuant to Proclamation No. 50 dated 8 December 1986.
On June 30, 1987, APT disposed of a portion of the subject property in a public bidding. The
Abstract of Bids indicated that Fibertex Corporation (Fibertex), through Ester H. Tanco,
5
submitted a ₱154,000,000.00 bid for the asset formerly belonging to PPIC located in Calamba,
Laguna, i.e., "Land (5.9 hectares) TCT 4099, buildings & improvements, whole mill," while TNC
Philippines, Inc. and P. Lim Investment, Inc. submitted a bid of ₱106,666,000.00 and
₱138,000,000.00, respectively. With respect to the former assets of Texfiber Corporation
(Texfiber) in Taytay, Rizal i.e., "Land (214,062 sq. m. TCT (493917) 506665, buildings &
improvements, whole mill"), only Fibertex submitted a bid of ₱2 l 0,000,000.00.
In a Certification dated July 1, 1987, APT certified that Fibertex was the highest bidder of PPIC
6
and Texfiber assets for ₱370,000,000.00, and recommended to the Committee on Privatization
to award said assets to Fibertex. In a Letter dated November 10, 1988, APT certified that
7
Fibertex paid APT ₱370,000,000.00 for the purchase of the said assets formerly belonging to
PPIC and Texfiber.
Meanwhile, Fibertex allegedly requested APT to exclude separate deeds of sale for the parcel
of land and for improvements under the subject property covered by TCT No. 151837 in the
name of DBP. Having been paid the full bid amount, APT supposedly agreed with Fibertex that
the land would be registered in the name of TG Property, Inc. (TGPI) and the improvements to
Fibertex. Thus, APT executed two (2) separate Deeds of Sale with TGPI and Fibertex with
regard to the property, namely:
a. Deed of Sale between APT and TGPI executed on October 29, 1987 for the sale of a
parcel of land covered by TCT No. T-151837 for a consideration of ₱2,222,967.00.
b. Deed of Sale between APT and Fibertex executed on 19 August 1987 for the sale of
improvements (machinery, equipment and other properties) on the same property for a
consideration of ₱154,315,615.39.
Upon complete submission of the required documents and proof of tax payments on December
9, 1987, the Register of Deeds of Calamba, Laguna, cancelled DBP's TCT No. 151837 and
issued TCT No. T-158786 in the name of TGPI, covering the entire 89,070 sq. m. subject
property, including the 29,690 sq. m. RROW. From 1987 to 1996, TGPI had paid real property
taxes for the entire 89,070 sq. m. property, as shown by the Tax Declarations and the Official
Receipt issued by the City Assessor's Office and Office of the City Treasurer of Calamba,
Laguna, respectively.
On April 16, 1995, TGPI executed a Deed of Absolute Sale in favor of HI-LON over the entire
89,070 sq. m. subject property for a consideration of ₱44,535,000.00. HI-LON registered the
Deed with the Register of Deeds of Calamba, Laguna, which issued in its name TCT No.
383819.
Sometime in 1998, Rupert P. Quijano, Attorney-in-Fact of HI-LON, requested assistance from

the Urban Road Project Office (URPO) DPWH for payment of just compensation for the 29,690
sq. m. portion of the subject property converted to a RROW. The DPWH created an Ad
Hoc Committee which valued the RROW at ₱2,500/sq. m. based on the 1999 Bureau of
Internal Revenue (BIR) zonal valuation.
On December 21, 2001, a Deed of Sale was executed between HILON and the Republic of the
Philippines, represented by Lope S. Adriano, URPO-PMO Director, by authority of the DPWH
Secretary, covering the 29,690 sq. m. parcel of land converted to RROW for a total
consideration of ₱67,492,500.00. On January 23, 2002, the Republic, through the DPWH,
made the first partial payment to HI-LON in the amount of ₱10,461,338.00.
On post audit, the Supervising Auditor of the DPWH issued Audit Observation Memorandum
No. NGS VIII-A-03-001 dated April 2, 2003 which noted that the use of the 1999 zonal
valuation of ₱2,500.00/sq. m. as basis for the determination of just compensation was
unrealistic, considering that as of said year, the value of the subject property had already been
"glossed over by the consequential benefits" it has obtained from the years of having been
used as RROW. The auditor pointed out that the just compensation should be based on the
value of said property at the time of its actual taking in 1978. Taking into account the average
value between the 1978 and 1980 Tax Declarations covering the subject land, the Auditor
arrived at the amount of ₱19.40/sq. m. as reasonable compensation and, thus, recommended
the recovery of excess payments.
Upon review of the auditor's observations, the Director of the LAO-N issued on January 29,
2004 ND No. 2004-32 in the amount of ₱9,937,596.20, representing the difference between
the partial payment of ₱10,461,338.00 to HI-LON and the amount of P532,741.80, which
should have been paid as just compensation for the conversion of the RROW.
Acting on the request of Dir. Lope S. Adriano, Project Director (URPO-PMO) for the lifting of
ND No. 2004-032 dated January 29, 2004, the LAO-N rendered Decision No. 2004-172 dated
May 12, 2004, affirming the same ND, and stating the value of the property must be computed
from the time of the actual taking.
Resolving (1) the motions for reconsideration and request for exclusion from liability of former
DPWH Secretary Gregorio R. Vigilar, et al.; (2) the request for lifting of Notice of Disallowance
No. 2004-032 of OIC Director Leonora J. Cuenca; (3) the motion to lift the disallowance and/or
exclusion as person liable of Ms. Teresita S. de Vera, Head, Accounting Unit, DPWH; and (4)
the appeal from ND No. 2004-032 of former Assistant Secretary Joel C. Altea and of Mr. Rupert
P. Quijano, Attorney-in-Fact of HI-LON, the LAO-N issued Decision No. 2008-172-A dated June
25, 2008, which denied the appeal and affirmed the same ND with modification that payment of
interest is appropriate under the circumstances.
Aggrieved, HI-LON filed a petition for review before the COA. In its regular meeting on June 9,
2009, the COA deferred the resolution of the petition, and instructed its Legal Service Section
to create a Special Audit Team from the Fraud Audit and Investigation Office to investigate and
validate HI-LON's claim.
In its assailed Decision No. 2011-003 dated January 20, 2011, the COA denied for lack of merit
HI-LON's petition for review of the LAO-N Decision No. 2008-172-A, and affirmed ND No.
2004-032 dated July 29, 2004 with modification declaring the claimant not entitled to just
compensation. The COA also instructed the Special Audit Team to issue an ND for the
₱523,741.80 payment to HI-LON not covered by ND No. 2004- 032, without prejudice to the
other findings embodied by the special audit report.
On the issue of whether or not HI-LON is entitled to just compensation for the 29,690 sq. m.
portion of the subject property, the COA found that the evidence gathered by the Special Audit
Team are fatal to the claim for such compensation.
First, the COA noted that the transfer of the subject property in favor of TGPI, the parent
corporation of HI-LON, was tainted with anomalies because records show that TGPI did not
participate in the public bidding held on June 30, 1987, as only three (3) bidders participated,
namely: Fibertex Corporation, TNC Philippines, Inc., and P. Lim Investment, Inc.
Second, the COA pointed out that the Deed of Sale between APT and Fibertex has a
disclosure that "The subject of this Deed of Absolute Sale, therefore, as fully disclosed in the
APT Asset Catalogue, is the total useable area of 59,380 sq. m.," excluding for the purpose
8
the 29,690 sq. m. converted to RROW. The COA added that such exclusion was corroborated
by the Abstract of Bids duly signed by the then APT Executive Assistant and Associate
Executive Trustee, showing that the land covered by TCT No. T- 151387 was offered to the
public bidding for its useable portion of 5.9 hectares only, excluding the subject 29,690 sq. m.
converted to RROW.
Third, the COA observed that HI-LON is a mere subsidiary corporation which cannot acquire
better title than its parent corporation TGPI. The COA stressed that for more than (7) seven
years that the subject property was under the name of TGPI from its registration on December
9, 1987 until it was transferred to HI-LON on April 16, 1995, TGPI did not attempt to file a claim
for just compensation because it was stopped so as the Deed of Sale executed between APT
and TGPI clearly stated that the 29,690 sq. m. RROW was excluded from the sale and remains
a government property. Applying the principle of piercing the veil of corporate fiction since TGPI
owns 99.9% of HI-LON, the COA ruled that HI-LON cannot claim ignorance that the 29,690 sq.
m. RROW was excluded from the public auction.
Having determined that HI-LON or its predecessor-in-interest TGPI does not own the RROW in
question, as it has been the property of the Republic of the Philippines since its acquisition by
the DBP up to the present, the COA concluded that the proper valuation of the claim for just
compensation is irrelevant as HI-LON is not entitled thereto in the first place.
Dissatisfied, HI-LON filed a Motion for Reconsideration of COA Decision No. 2011-003 and a
Supplement thereto.
On December 3, 2013, the COA issued the assailed Decision No. 2013-212 denying HI-LON's
motion for reconsideration, affirming with finality its assailed Decision No. 2011-003, and
requiring HI-LON to refund the payment made by DPWH in the amount of ₱10,461,338.00.
In this Petition for Certiorari, HI-LON argues that the COA committed grave abuse of discretion,
amounting to lack or excess of jurisdiction when it held (1) that there was no property owned
by HI-LON that was taken by the government for public use; (2) that the 89,070-sq. m. subject
parcel of land, including the 29,690 sq. m. portion used as RROW by the government, had
been the property of the Republic of the Philippines; (3) that HI-LON is not entitled to payment
of just compensation; and (4) that it collaterally attacked HI-LON's ownership of the subject
land, including the RROW. 9
The Office of the Solicitor General (OSG) counters that the COA acted within its jurisdiction
when it evaluated and eventually disallowed what it found to be an irregular, anomalous and
unnecessary disbursement of public funds. The OSG agrees with the COA that HI-LON is not
entitled to payment of just compensation because the 29,690 sq. m. portion used as RROW is
already owned by the Republic since 1987 when DBP transferred the entire 89,070 sq. m.
subject property to APT, pursuant to Administrative Order No. 14. The OSG emphasizes that
the Deed of Absolute Sale dated October 29, 1987 between the Republic (through APT) and
TGPI clearly stated that the subject thereof, as fully disclosed in the APT Asset Specific
Catalogue, is the total useable area of 59,380 sq. m., hence, the 29,690 sq. m. portion used as
RROW was expressly excluded from the sale. Besides, the OSG notes that the COA aptly
found that there were only three bidders who participated in APT's public bidding of the subject
property and TGPI was not one of the bidders. There being an anomaly in the transfer of the
property from APT to TGPI, the OSG posits that HI-LON, as TGPI's successor-in-interest, is
not entitled to just compensation.
Stating that the intention of Proclamation No. 50 was to transfer the non-performing assets of
DBP to the national government, the OSG maintains that APT has no authority to offer for sale
the said portion because it is a performing asset, having been used by the government as
RROW for the Manila South Expressway since 1978. Considering that the said 29,690 sq. m.
portion was not sold and transferred by APT to TGPI, the OSG submits that TGPI cannot also
transfer the same portion to its subsidiary, HILON. The OSG concludes that HI-LON is not
entitled to payment of just compensation as it is not the owner of the said portion, and that the
COA properly ordered full disallowance of the ₱10,461,338.00 paid to HI-LON.
HI-LON's Petition for Certiorari is devoid of merit.
In support of its claim of entitlement to just compensation, HI-LON relies on the Deed of Sale
dated October 29, 1987, and insists that its predecessor-in-interest (TGPI) acquired from the
national government, through APT, the entire 89,070 sq. m. property, which was previously
registered in the name of DBP under TCT No. 151837. HI-LON asserts that the 29,690 sq. m.
RROW was not excluded from the sale because: (1) APT referred to the entire property in the
Whereas Clauses as one of the subject of the sale; (2) APT made an express warranty in the
said Deed that the properties sold are clear of liens and encumbrances, which discounts the
need to investigate on the real status of the subject property; and (3) the title registered in the
name of DBP, as well as the titles of the previous owners, CIREC and PPIC, contains no
annotation as regards any government's claim over the RROW.
HI-LON's assertions are contradicted by the clear and unequivocal terms of the Deed of
Sale dated 29 October 1987 between APT and TGPI, which state that the subject thereof is
10
the total usable area of 59,380 sq. m. of the subject property. Contrary to HI-LO N's claim,
nothing in the Whereas Clauses of the Deed indicates that the object of the sale is the entire
89,070 sq. m. property, considering that the 29,690 sq. m. portion thereof had been used as
road right-of-way (RROW) for the South Expressway, to wit:
xxxx
WHEREAS, the Development Bank of the Philippines (DBP) was the mortgagee of a parcel of
land (hereafter to be referred to as the "PROPERTY") covered by Transfer Certificate of Title
No. T-151837 of the Registry of Deeds for the Province of Laguna (Calamba Branch), more
particularly described as follows:
A parcel of land (Lot 2-D-I-J of the subd. Plan Psd- 39402, being a portion of Lot 2-D-l,
described on plan Psd- 18888, LRC (GLRO Rec. No. 9933, situated in the Bo. of Mayapa &
San Cristobal, Municipality of Calamba, Province of Laguna. Bounded on the N.E. by Lot No.
2-D- 1-I; of the subd. Plan; on the S., by the Provincial Road; on the SW., by Lot 2-D-1-K of the
subd. plan and on the NW., by Lot No. 2-B of plan Psd-925. Beginning at a point marked "l" on
plan, being S. 62 deg. 03 'W., 1946.22 from L.M. 5, Calamba Estate; Thence --- N. 64 deg.
35'E., 200.27 m. to point 2; S.21 deg. 03'E. 166.82 m. to point 3; S. 12 deg. 30'E, 141.01 m. to
point 4; S. 10 deg. 25'E, 168.29 m. to point 5; N. 84 deg. 47'W, 215.01 m. to point 6; N. 13 deg.
44'W., 150.99 m. Thence--- to point 7; N. 13 deg. 45'W., 27.66 m. to the point of beginning;
containing an area of EIGHTY-NINE THOUSAND SEVENTY (89,070) SQUARE METERS,
more or less. All points referred to are indicated on the plan and are marked on the ground by
PLS. cyl. conc. mons. bearings true detloop deg. 03 'E., date of original survey Jan. 1906 -
Jan. 1908 and Sept. 1913 and that of subd. survey, Aug. 23-25, 1953.
[As per Tax Declaration No. 9114, an area of 29,690 sq. m. had been used (road-right-of-way)
for the South Expressway. The subject of this Deed of Absolute Sale, therefore, as fully
disclosed in the APT Asset Sfecific Catalogue, is the total useable area of 59,380 sq. m.] 11
WHEREAS, the PROPERTY was subsequently acquired by DBP at public auction in a

foreclosure sale as evidenced by a Sheriff's Certificate of Sale dated September 6, 1985
issued by Mr. Godofredo E. Quiling, Deputy Provincial· Sheriff, Office of the Provincial Sheriff
of Laguna, Philippines, x x x
WHEREAS, pursuant to Administrative Order No. 14 issued on February 3, 1987 [Approving

the Identification of and Transfer to the National Government of Certain Assets and Liabilities
of the Development Bank of the Philippines and the Philippine National Bank], DBP's
ownership and interest over the PROPERTY were transferred to the National Government
through the ASSET PRIVATIZATION TRUST (APT), a public trust created under Proclamation
No. 50 dated December 8, 1986.
WHEREAS, in the public bidding conducted by the APT on June 30, 1987, the VENDEE [TGPI]
made the highest cash bid for the PROPERTY and was declared the winning bidder.
WHEREAS, the sale of the PROPERTY has been authorized by the COMMITTEE ON
PRIVATIZATION under Notice of Approval dated July21, 1987oftheAPT;
WHEREAS, the VENDEE [TGPI] has fully paid the VENDOR [Government of the Republic of
the Philippines, through APT] the purchase price of the PROPERTY in the amount of PESOS:
TWO MILLION TWO HUNDRED TWENTY-TWO THOUSAND NINE HUNDRED SIXTY-
SEVEN (₱2,222,967.00).
NOW, THEREFORE, for and in consideration of the above premises and for the sum of
PESOS: TWO MILLION TWO HUNDRED TWENTY-TWO THOUSAND NINE HUNDRED
SIXTY-SEVEN (₱2,222,967.00), Philippine Currency, paid by the VENDEE to the VENDOR,
the VENDOR does by these presents sell, transfer and convey the PROPERTY hereinabove
described unto the VENDEE, its successors and assigns, subject to the following conditions:
1. The VENDOR hereby warrant that the PROPERTIES shall be sold and
transferred free and clear of liens and encumbrances accruing before August
18, 1987, and that all taxes or charges accruing or becoming due on the
PROPERTIES before said date have or shall be fully paid by the VENDOR;
2. Documentary Stamp Taxes, Transfer Taxes. Registration fees, and all other
expenses arising out of or relating to the execution and delivery of this Deed
shall be for the account of and paid by the VENDEE;
3. Capital gains tax, if any, payable on or in respect of the transfer of the

PROPERTY to the VEND EE shall be for the account of and paid by the
VENDOR. 1awp++i1
IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed at
Makati, Metro Manila this [29th] day of [October], 1987. 12
As the Deed of Sale dated October 29, 1987 is very specific that the object of the sale is the
59,380. sq. m. portion of the subject property, HILON cannot insist to have acquired more than
what its predecessor-in-interest (TGPI)acquired from APT. Article 1370 of the New Civil Code
provides that if the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. Every contracting party is
presumed to know the contents of the contract before signing and delivering it, and that the
13
words used therein embody the will of the parties. Where the terms of the contract are simple
and clearly appears to have been executed with all the solemnities of the law, clear and
convincing evidence is required to impugn it. Perforce, HI-LON's bare allegation that the object
14
of the Deed of Sale is the entire 89,070 sq. m. area of the subject property, is self-serving and
deserves short shrift.
The Court thus agrees with the COA in rejecting HI-LON's claim of ownership over the 29,690
sq. m. RROW portion of the subject property in this wise:
xxxx
As clearly shown in the Abstract of Bids, the subject of the bidding was 59,380 sq. m. only. The
Deed of Sale expressly states that -
[As per Tax Declaration No. 9114, an area of 29,690 sq. m. had been used (road-right-of-way)
for the South Expressway. The subject of this Deed of Absolute Sale, therefore, as fully
1âwphi1
disclosed in the APT Asset Specific Catalogue, is the total useable area of 59,380 sq. m.]
The government cannot enter into a contract with the highest bidder and incorporate
substantial provisions beneficial to the latter which are not included or contemplated in the
terms and specifications upon which the bids were solicited. It is contrary to the very concept of
public bidding to permit an inconsistency between the terms and conditions under which the
bids were solicited and those under which the bids were solicited and those under which
proposals are submitted and accepted. Moreover, the substantive amendment of the terms and
conditions of the contract bid out, after the bidding process had been concluded, is violative of
the principles in public bidding and will render the government vulnerable to the complaints
from the losing bidders.
Thus, since the area of [29,690 sq. m. which later became] 26,997 sq. m. covered by the ROW
was not subject of the public bidding, Hi-Lon cannot validly acquire and own the same. The
owner of this property is still the Republic of the Philippines.
x x x. 15
Citing Bagatsing v. Committee on Privatization where it was held that Proclamation No. 50
16
does not prohibit APT from selling and disposing other kinds of assets whether they are
performing or non-performing, necessary or appropriate, HI-LON contends that regardless of
whether or not the RROW is a performing or non-performing asset, it could not have been
excluded in the sale of the entire 89,070 sq. m. property pursuant to the said Proclamation.
Concededly, the 29,690 sq. m. portion of the subject property is not just an ordinary asset, but
is being used as a RROW for the Manila South Expressway Extension Project, a road devoted
for a public use since it was taken in 1978. Under the Philippine Highway Act of 1953, "right-of-
way" is defined as the land secured and reserved to the public for highway purposes, whereas
"highway" includes rights-of-way, bridges, ferries, drainage structures, signs, guard rails, and
protective structures in connection with highways. Article 420 of the New Civil Code considers
17
as property of public dominion those intended for public use, such as roads, canals, torrents,
ports and bridges constructed by the state, banks, shores, roadsteads, and others of similar
character.
Being of similar character as roads for public use, a road right-of-way (RROW) can be
considered as a property of public dominion, which is outside the commerce of man, and
cannot be leased, donated, sold, or be the object of a contract, except insofar as they may be
18
the object of repairs or improvements and other incidental matters. However, this RROW must
be differentiated from the concept of easement of right of way under Article 649 of the same
19
Code, which merely gives the holder of the easement an incorporeal interest on the property
but grants no title thereto, inasmuch as the owner of the servient estate retains ownership of
20
the portion on which the easement is established, and may use the same in such a manner as
not to affect the exercise of the easement.21
As a property of public dominion akin to a public thoroughfare, a RROW cannot be registered

in the name of private persons under the Land Registration Law and be the subject of a
Torrens Title; and if erroneously included in a Torrens Title, the land involved remains as such a
property of public dominion. In Manila International Airport Authority v. Court of Appeals, the
22 23
Court declared that properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. "Any encumbrance, levy on
execution or auction sale of any property of public dominion is void for being contrary to public
policy. Essential public services will stop if properties of public dominion are subject to
encumbrances, foreclosures and auction sale. " 24
It is, therefore, inconceivable that the government, through APT, would even sell in a public
bidding the 29,690 sq. m. portion of the subject property, as long as the RROW remains as
property for public use. Hence, Hl-LON's contention that the RROW is included in the Deed of
Absolute Sale dated 29 October 1987, regardless whether the property is a performing or non-
performing asset, has no legal basis.
Neither can HI-LON harp on the express warranty in the Deed of Sale that the subject property
is clear from any encumbrance, and the lack of annotation of the government's claim of RROW
on the TCTs of CIREC, PPIC and DBP covering the subject property, to bolster its claim of
having acquired ownership of such property in good faith.
There is no dispute as to the finding of COA Commissioner Juanito G. Espino and DPWH
Officer-in-Charge Manuel M. Bonoan based on the examination of land titles of the subject
property that the entire 89,070 sq. m. area thereof was never reduced in the process of seven
(7) transfers of ownership from Emerito Banatin, et al., in 1971 to HI-LON in 1996, nor was
there an annotation of a RROW encumbrance on the TCTs of CIREC, PPIC, DBP and TGPI.
Be that as it may, HI-LON cannot overlook the fact that the RROW was taken upon the
directive of the Ministry of Public Works and Highways in 1978 for the construction of the
Manila South Expressway Extension project. Such public highway constitutes as a statutory
lien on the said TCTs, pursuant to Section 39 of the Land Registration Act (Act No. 496) and
Section 44 of the Property Registration Decree (Presidential Decree No. 1529):
Section 39. Every applicant receiving a certificate of title in pursuance of a decree of

registration, and every subsequent purchaser of registered land who takes a certificate of title
for value in good faith, shall hold the same free of all encumbrance except those noted on said
certificate, and any of the following encumbrances which may be subsisting, namely:
First. Liens, claims, or rights arising or existing under the laws or Constitution of the United
States or of the Philippine Islands which the statutes of the Philippine Islands cannot require to
appear of record in the registry.
Second. Taxes within two years after the same have become due and payable.
Third. Any public highway, way, or private way established by law, where the certificate of
title does not state that the boundaries of such highway or way have been determined. But
if there are easements or other rights appurtenant to a parcel of registered land which for any
reason have failed to be registered, such easements or rights shall remain so appurtenant
notwithstanding such failure, and shall be held to pass with the land until cut off or extinguished
by the registration of the servient estate, or in any other manner.
xxxx
SECTION 44. Statutory Liens Affecting Title. - Every registered owner receiving a certificate of
title in pursuance of a decree of registration, and every subsequent purchaser of registered
land taking a certificate of title for value and in good faith, shall hold the same free from all
encumbrances except those noted in said certificate and any of the following encumbrances
which may be subsisting, namely:
First. Liens, claims or rights arising or existing under the laws and Constitution of the
Philippines which are not by law required to appear of record in the Registry of Deeds in order
to be valid against subsequent purchasers or encumbrancers of record.
Second. Unpaid real estate taxes levied and assessed within two years immediately preceding
the acquisition of any right over the land by an innocent purchaser for value, without prejudice
to the right of the government to collect taxes payable before that period from the delinquent
taxpayer alone.
Third. Any public highway or private way established or recognized by law, or any
government irrigation canal or lateral thereof, if the certificate of title docs not state that the
boundaries of such highway or irrigation canal or lateral thereof have been determined.
Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or pursuant
to,
Presidential Decree No. 27 or any other law or regulations on agrarian reform. 25
Section 39 of Act No. 496 and Section 44 of P.D. No. 1529 provide for statutory liens which
subsist and bind the whole world, even without the benefit of registration under the Torrens
System. Thus, even if the TCTs of CIREC, PPIC, DBP and TGPI contain no annotation of such
encumbrance, HI-LON can hardly feign lack of notice of the government's claim of ownership
over the public highway built along the RROW, and claim to be an innocent purchaser for value
of the entire 89,070 sq. m. subject property because such highway prompts actual notice of a
possible claim of the government on the RROW.
Given that prospective .buyers dealing with registered lands are normally not required by law
.to inquire further than what appears on the face of the TCTs on file with the Register of Deeds,
it is equally settled that purchasers cannot close their eyes to known facts that should have put
a reasonable person on guard. Their mere refusal to face up to that possibility will not make
26
them innocent purchasers for value, if it later becomes apparent that the title was defective,
and that they would have discovered the fact, had they acted with the measure of precaution
required of a prudent person in a like situation. Having actual notice of a public highway built
27
on the RROW portion of the subject property, HI-LON cannot afford to ignore the possible
claim of encumbrance thereon by the government, much less fail to inquire into the status of
such property.
Invoking the principle of estoppel by laches, HI-LON posits that the government's failure to
assert its right of ownership over the RROW by registering its claim on the titles of CIREC,
PPIC, and DBP since the 29,690 sq. m. portion of the property was converted to a RROW way
back in 1978 until the purported sale of the entire 89,070 sq. m. property to TGPI in 1987, bars
it from claiming ownership of the RROW because it slept over its rights for almost nine (9)
years. HI-LON states that if it were true that the government was convinced that it acquired the
RROW, it would have lost no time in registering its claim before the Register of Deeds, instead
of surrendering to TGPI the owner's duplicate of TCT No. 151837 in the name of DBP, to
facilitate the issuance of a new title over the entire 89,070 sq. m. property, which includes the
29,690 sq. m. RROW. HI-LON further claims that the government is estopped from claiming its
alleged right of ownership of the RROW because the DPWH itself offered to buy and, in fact,
executed a Deed of Sale, thereby acknowledging that the RROW is a private property owned
by HI-LON.
The failure of the government to register its claim of RROW on the titles of CIREC, PPIC, DBP
and TGPI is not fatal to its cause. Registration is the ministerial act by which a deed, contract,
or instrument is inscribed in the records of the Office of the Register of Deeds and annotated
on the back of the TCT covering the land subject of the deed, contract, or instrument. It 28
creates a constructive notice to the whole world and binds third persons. Nevertheless, HI-
29
LON cannot invoke lack of notice of the government's claim over the 29,690 sq. m. RROW
simply because it has actual notice of the public highway built thereon, which constitutes as a
statutory lien on its title even if it is not inscribed on the titles of its predecessors-in-interest,
CIREC, PPIC, DBP, and TGPI. Indeed, actual notice is equivalent to registration, because to
hold otherwise would be to tolerate fraud and the Torrens System cannot be used to shield
fraud. 30
Meanwhile, the mistake of the government officials in offering to buy the 29,690 sq. m. RROW
does not bind the State, let alone vest ownership of the property to HI-LON. As a rule, the
State, as represented by the government, is not estopped by the mistakes or errors of its
officials or agents, especially true when the government's actions are sovereign in
nature. Even as this rule admits of exceptions in the interest of justice and fair play, none was
31
shown to obtain in this case. Considering that only 59,380 sq. m. of the subject property was
expressly conveyed and sold by the government (through APT) to HI-LON's predecessor-in-
interest (TGPI), HI-LON has no legal right to claim ownership over the entire 89,070 sq. m.
property, which includes the 29,690 sq. m. RROW taken and devoted for public use since
1978.
In arguing that the government had no legal title over the RROW, HILON points out that the
government acquired title thereto only in 2001 when a Deed of Sale was executed between HI-
LON and the DPWH. HI-LON claims that when the government used the 29,690 sq. m. portion
of the subject property as RROW in 1978, it never acquired legal title because it did not
institute any expropriation proceeding, let alone pay the registered owner just compensation for
the use thereof.
HI-LON's claim of ownership over the said RROW has been duly rejected by the COA in this
manner:
xxxx
By virtue of Administrative Order No. 14, s. 1987, pursuant to Section 23 of Proclamation No.
50, the 89,070 sq. m. subject parcel of land, including the 29,690 sq. m. which had been used
as ROW by the Government, was transferred to and owned by the National Government. TG
Property, Inc. cannot acquire a portion of the parcel of land without authority and consent of the
Philippine Government, being the owner and seller of the said property. Hi-Lon cannot even
claim ownership on the portion of the subject land without the said deed of sale executed by
the Government in favor of TG Property, Inc. The facts would show that the ROW has been
the property of the Republic of the Philippines since its transfer from DBP in 1987.
xxx 32
It bears emphasis that the right to claim just compensation for the 29,690 sq. m. portion which
was not exercised by CIREC or PPIC, ceased to exist when DBP acquired the entire 89,070
sq. m. property in a foreclosure sale and later transferred it to the national government
(through APT) in 1987, pursuant to Proclamation No. 50. Having consolidated its title over the
entire property, there is no more need for the government to initiate an action to determine just
compensation for such private property which it previously took for public use sans
expropriation proceedings.
Citing Section 48 of P .D. 1529 which bars collateral attack to certificates of title, HI-LON
asserts that COA erred in ruling that there was no property owned by HI-LON that was taken
by the government for public use, despite the fact that: (a) the ownership of the subject
property was not raised before the Commission Proper of the COA; and (b) COA has no
jurisdiction over issues of ownership and entitlement to just compensation. HI-LON stresses
that the titles issued to TGPI and HI-LON conclusively show that they are the registered
owners of the entire 89,070 sq. m. property in Calamba, Laguna, including the 29,690 sq. m.
RROW. Absent any proceeding directly assailing the said titles, the ownership of the said
property by HI-LON and TGPI is beyond dispute. HI-LON further states that Leoncio Lee Tek
Sheng v. Court of Appeal cited by the OSG is inapplicable because a notice of lis
33
pendens was annotated on the title subject of the case, unlike the titles of TGPI and HI-LON
which contain no annotation of claims of ownership by the Republic.
Suffice it to state that there is no merit in HI-LON's argument that the TCTs issued in its name
and that of its predecessor-in-interest (TGPI) have become incontrovertible and indefeasible,
and can no longer be altered, cancelled or modified or subject to any collateral attack after the
expiration of one (1) year from the date of entry of the decree of registration, pursuant to
Section 32 of P.D. No. 1529. In Heirs of Clemente Ermac v. Heirs of Vicente Ermac, the Court 34
clarified the foregoing principle, viz.:
x x x While it is true that Section 32 of PD 1529 provides that the decree of registration
becomes incontrovertible after a year, it does not altogether deprive an aggrieved party of a
remedy in law. The acceptability of the Torrens System would be impaired, if it is utilized to
perpetuate fraud against the real owners.
Furthermore, ownership is not the same as a certificate of title. Registering a piece of land
under the Torrens System does not create or vest title, because registration is not a mode of
acquiring ownership. A ce11ificate of title is merely an evidence of ownership or title over the
particular property described therein. Its issuance in favor of a particular person does not
foreclose the possibility that the real property may be coowned with persons not named in the
certificate, or that it may be held in trust for another person by the registered owner. 35
In Lacbayan v. Samay, Jr., the Court noted that what cannot be collaterally attacked is the
36
certificate of title, and not the title itself:
x x x The certificate referred to is that document issued by the Register of Deeds known as the
TCT. In contrast, the title referred to by law means ownership which is, more often than not,
represented by that document. xxx Title as a concept of ownership should not be confused with
the certificate of title as evidence of such ownership although both are interchangeably used.
In Mallilin, Jr. v. Castillo, the Court defined collateral attack on the title, as follows:
37
x x x When is an action an attack on a title? It is when the object of the action or proceeding is
to nullify the title, and thus challenge the judgment pursuant to which the title was decreed. The
attack is direct when the object of an action or proceeding is to annul or set aside such
judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when,
in an action to obtain a different relief, an attack on the judgment is nevertheless made as an
incident thereof. 38
In this case, what is being assailed by the COA when it sustained the Notice of Disallowance
for payment of just compensation is HI-LON's claim of ownership over the 29,690 sq. m.
portion of the property, and not the TCT of TGPI from which HI-LON derived its title. Granted
that there is an error in the registration of the entire 89,070 sq. m. subject property previously
in the name of TGPI under TCT No.· 156786 and currently in the name of HI-LON under TCT
39
No. T-383819 because the 29,690 sq. m. RROW portion belonging to the government was
40
mistakenly included, a judicial pronouncement is still ·necessary in order to have said portion
excluded from the Torrens title.41
HI-LON's assertion that the titles issued to TGPI and HI-LON conclusively show that they are
the registered owners of the entire 89,070 sq. m. property in Calamba, Laguna, including the
29,690 sq. m. RROW is anathema to the purpose of the Torrens System, which is intended to
guarantee the integrity and conclusiveness of the certificate of registration, but cannot be used
for the perpetration of fraud against the real owner of the registered land. On point is the case
42
of Balangcad v. Court of Appeals where it was held that "the system merely confirms
43
ownership and does not create it. Certainly, it cannot be used to divest the lawful owner of his
title for the purpose of transferring it to another who has not acquired it by any of the modes
allowed or recognized by law. Where such an erroneous transfer is made, as in this case, the
law presumes that no registration has been made and so retains title in the real owner of the
land."
It is also not amiss to cite Ledesma v. Municipality of Iloilo where it was ruled that "if a person
44
obtains title, under the Torrens system, which includes, by mistake or oversight, lands which
cannot be registered under the Torrens system, he does not, by virtue of said certificate alone,
become the owner of the land illegally included." Inasmuch as the inclusion of public highways
in the certificate of title under the Torrens system does not thereby give to the holder of such
certificate said public highways, the same holds true with respect to RROW s which are of
45
similar character as roads for public use.
Assuming arguendo that collateral attack of said titles are allowed, HI-LON claims that its right
of ownership of the subject RROW can no longer be assailed by the COA because it never
questioned such right until after it denied the petition for review. HI-LON notes that ND No.
2004-032 was issued and it was denied payment of just compensation for the RROW solely on
the ground that such compensation should be based on the value of the lot at the time of the
actual taking by the government in 1978. HI-LON avers that it was surprised to find out that in
the Decision dated 20 January 2011, the COA Commission Proper assailed for the first time
TGPI's and HI-LON's right of ownership over the RROW, instead of merely finding whether or
not the valuation of the property should be based on the value at the time of the taking in 1978
or the value of the ₱2,500.00/sq. m. HI-LON's arguments fail to persuade.
COA may delve into the question of ownership although this was not an original ground for the
issuance of the Notice of Disallowance, but only the proper valuation of the just compensation
based on the date of actual taking of the property. In Yap v. Commission on Audit, the Court
46
ruled that "COA is not required to limit its review only to the grounds relied upon by a
government agency's auditor with respect to disallowing certain disbursements of public funds.
In consonance with its general audit power, respondent COA is not merely legally permitted,
but is also duty-bound to make its own assessment of the merits of the disallowed
disbursement and not simply restrict itself to reviewing the validity of the ground relied upon by
the auditor of the government agency concerned . To hold otherwise would render the COA's
vital constitutional power unduly limited and thereby useless and ineffective." Tasked to be
vigilant and conscientious in safeguarding the proper use of the government's, and ultimately
the people's property, the COA is endowed with enough latitude to determine, prevent, and
disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures of
government funds. 47
It is the policy of the Court to sustain the decisions of administrative authorities, especially one
that was constitutionally created like herein respondent COA, not only on the basis of the
doctrine of separation of powers, but also of their presumed expertise in the laws they are
entrusted to enforce. Considering that findings of administrative agencies are accorded not
48
only respect but also finality when the decision and order are not tainted with unfairness or
arbitrariness amounting to grave abuse of discretion, it is only when the COA acted with such
abuse of discretion that the Court entertains a petition for certiorari under Rule 65 of the Rules
of Court.49
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction or, in other words, the exercise of the power in an arbitrary
manner by reason of passion, prejudice, or personal hostility; and it must be so patent or gross
as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined
or to act at all in contemplation of law. No grave abuse of discretion can be imputed against
51
the COA when it affirmed the Notice of Disallowance issued by the LAO-N in line with its
constitutional authority and jurisdiction over cases involving "disallowance of expenditures or
52
uses of government funds and properties found to be illegal, irregular, unnecessary, excessive,
extravagant or unconscionable." Having determined that HI-LON does not own the disputed
53
RROW, the COA correctly ruled that HI-LON is not entitled to payment of just compensation
and must accordingly refund the partial payment made by the DPWH in the amount of
₱10,461,338.00 .. To stress, even if HI-LON is the registered owner of the subject property
under TCT No. T-383819 with an area of 89,070 sq. m., the Deed of Absolute Sale dated 29
October 1987 clearly shows that only the 59,380 sq.· m. portion of the subject property, and not
29,690 sq. m. portion used as RROW, was sold and conveyed by the government (through
APT) to HI-LON's immediate predecessor-in-interest (TGPI).
In light of the foregoing disquisition, Hl-LON's prayer for issuance of Temporary Restraining
Order and/or Writ of Injunction must necessarily be denied for lack of clear and unmistakable
right over the disputed 29,690 sq. m. portion of the subject property.
Lastly, from the finality of the Court's decision until full payment, the total amount to be
refunded by HI-LON shall earn legal interest at the rate of six percent (6%) per
annum pursuant to Bangko Sentral ng Pilipinas Monetary Board Circular No. 799, Series of
2013, because such interest is imposed by reason of the Court's decision and takes the nature
of a judicial debt.
54
WHEREFORE, premises considered, the Petition for Certiorari is DENIED for lack of merit, and
the Commission on Audit Decision No. 2011-003 dated January 20, 2011 and Decision No.
2013-212 dated December 3, 2013 are AFFIRMED with MODIFICATION that a legal interest
of six percent (6%) per annum from the finality of this Decision until fully paid, is imposed on
the amount of ₱10,461,338.00 that HI-LON Manufacturing Co., Inc. is required to refund to the
Department of Public Works and Highways.
SO ORDERED.
DIOSDADO M. PERALTA,
Associate Justice
WE CONCUR:

Chief Justice
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

MARIANO C. DEL CASTILLO JOSE CATRAL MENDOZA

ESTELA M. PERLAS-BERNABE MARVIC M.V.F. LEONEN

On Leave
FRANCIS H. JARDELEZA
Associate Justice
Associate Justice
No part prior OSG action

NOEL GIMENEZ TIJAM
SAMUEL R. MARTIRES
Associate Justice
Associate Justice
ANDRES B. REYES, JR.

Associate Justice
CERTIFICATION
the opinion of the Court’s Division.
Chief Justice
Footnotes
*
No part .
**
On leave.
1
Signed by Chairman Reynaldo A. Villar, and Commissioners Juanito G. Espino, Jr.
and Evelyn R. Buenaventura.
2
Rollo, p. 49.
3
Signed by Chairperson Ma. Gracia M. Pulido Tan and Commissioners Heidi L.
Mendoza and Rowena V. Guanzon.
4
Rollo, p. 234.
5
Rollo, p. 172.
6
Id. at 173.
7
Id. at 176.
8
Id. at 47.
9
Id, at 21.
10
Rollo, Vol. I, pp. 188-191.
11
Emphasis and underscoring added.
12
Rollo, Vol. I, pp. 188-190.
13
Conde v. Court of Appeals, 204 Phil. 589, 597 (1982).
Development Bank of the Philippines v. National Merchandising Corporation, 148-B

14
Phil. 310, 331 15 (1971).
15
Rollo, Vol. I, p. 232. (Emphasis in the original).
16
G.R. No. 112399, July 14, 1995, 246 SCRA 334, 347.
17
Article II, Section 3 (a) and (k), Republic Act No. 917.
18
Municipality of Cavite v. Rojas, 30 Phil. 602, 607 (1915).
19
Art. 649. The owner, or any person who by virtue of a real right may cultivate or use
any immovable, which is surrounded by other immovables pertaining to other persons
and without adequate outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper indemnity.
Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the cultivation of
the estate surrounded by others and for the gathering of its crops through the
servient estate without a permanent way, the indemnity shall consist in the
payment of the damage caused by such encumbrance.
This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.
20
Boga-Medellin Milling Co., Inc. v. Court of Appeals, 455 Phil. 285, 300 (2003).
21
Article 630 of the New Civil Code.
22
Monsignor Acebedo v. Director of Lands, 150-A Phil. 806, 816 (1972); Civil Code of
the Philippines Annotated by Edgardo L. Paras, Volume 2, p. 47 (2008).
23
528 Phil. 181, 219 (2006).
24
MIAA v. Court of Appeals, supra.
25
Emphasis added.
26
Spouses Domingo v. Reed, 513 Phil. 339, 341 (2005).
27
Id.
28
Tecklo v. Rural Bank of Pamplona, Inc., 635 Phil. 249, 259 (201 0).
29
Id.
30
Lavi des v. Pre, 419 Phil. 665, 672 (2001).
31
Heirs of Reyes v. Republic, 529 Phil. 510, 519-520 (2006).
32
Rollo, Vol. 1, p. 232. (Underscoring in the original; emphasis added).
34
G.R. No. 115402, July 15, 1998, 292 SCRA 544.
35
451 Phil. 368 (2003). (Citations omitted).
Heirs of Clemente Ermac v. Heirs of Vicente Ermac, supra, at 376-377. (Citations

36
omitted)
37
661 Phil.307,317(2011).
38
389 Phil. 153 (2000), cited in Caraan v. Court of Appeals, 511 Phil. 162, 170 (20027).
39
Mallilin v. Castillo, supra, at 165.
40
Rollo, pp. 79-80.
41
Id. at 294-295.
42
Zobel v. Mercado, 108 Phil. 240, 242 (1960)
43
Balangcad v. Justice of the Court of Appeals, 5111 Div., 283 Phil. 59, 65 (1992).
44
Supra. 49 Phil. 769, 773 (1926).
45
Ledesma v. Municipality of Iloilo. supra, at 774.
46
633 Phil. I 74 (2010)
47
Delos Santos v. Commission on Audit, 716 Phil. 322, 332 (2013).
48
Id. at 332-333.
49
Id. at 333.
Espinas v. Commission on Audit, 731 Phil. 67, 77 (2014, citing Delos Santos v. COA,
50
supra.
51
Reyna v. Commission on Audit, , 657 Phil. 209, 236 (2011).
52
Section 2, Article IX-0 of the 1987 Constitution states:
53
Section 2.(1) The Commission on Audit shall have the power, authority and duty to
examine, audit, and settles all accounts pertaining to the revenue and receipts
of, and expenditures or uses of funds and property, owned or held in trust by, or
pertaining to, the Government, or any of its subdivisions, agencies or
instrumentalities, including government-owned or controlled corporations with
original charters, and on post-audit basis: (a) constitutional bodies, commissions and
offices that have been granted fiscal autonomy under this Constitution; (b) autonomous
state colleges and universities; (c) other government-owned or controlled corporations
and their subsidiaries; and (d) such nongovernmental entities receiving subsidy or
equity, directly or indirectly, from or through the Government, which are required by law
or the granting institution to submit such audit as a condition of subsidy or equity.
xxx
(2) The Commission shall have exclusive authority, subject to the limitations in
this Article, to define the scope of its audit and examination, establish the
techniques and methods required therefor, and promulgate accounting
and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant or
unconscionable expenditures or uses of government fui1ds and
properties. (Emphasis added)
Section l, Rule II, 2009 Revised Rules of Procedure of the Commission on

Audit.
FIRST DIVISION
April 24, 2017
G.R. No. 189950 *
BERNADETTE S. BILAG, ERLINDA BILAGSANTILLAN, DIXON BILAG, REYNALDO B.

SUELLO, HEIRS OF LOURDES S. BILAG, HEIRS OF LETICIA BILAG-HANAOKA, and
HEIRS OF NELLIE BILAG, Petitioners,
vs.
ESTELA AY-AY, ANDRES ACOP, JR., FELICITAS AP-AP, SERGIO AP-AP, JOHN
NAPOLEON A. RAMIREZ, JR., and MA. TERESA A. RAMIREZ, Respondents
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari are the Decision dated March 19, 2009 and the
1 2
Resolution dated September 3, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 86266,
3
which set aside the Order dated October 10, 2005 of the Regional Trial Court of Baguio City,
4
Branch 61 (RTC Br. 61), and consequently, remanded the case to the latter court for trial.
The Facts
The instant case stemmed from a Complaint dated August 12, 2004 for Quieting of Title with
5
Prayer for Preliminary Injunction filed by respondents Estela Ay-Ay, Andres Acop, Jr., Felicitas
Ap-Ap, Sergio ApAp, John Napoleon A. Ramirez, Jr., and Ma. Teresa A. Ramirez (respondents)
against petitioners Bernadette S. Bilag, Erlinda BilagSantillan, Dixon Bilag, Reynaldo B. Suello,
Heirs of Lourdes S. Bilag, Heirs of Leticia Bilag-Hanaoka, and Heirs of Nellie Bilag before the
RTC Br. 61, docketed as Civil Case No. 5881-R. Essentially, respondents alleged that Iloc
Bilag, petitioners' predecessor-in-interest, sold to them separately various portions of a
159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan No.
544367, Psu 189147 situated at Sitio Benin, Baguio City (subject lands), and that they
registered the corresponding Deeds of Sale with the Register of Deeds of Baguio City.
6
According to respondents, Iloc Bilag not only acknowledged full payment and guaranteed that
his heirs, successors-in-interest, and executors are to be bound by such sales, but he also
caused the subject lands to be removed from the Ancestral Land Claims. Respondents further
alleged that they have been in continuous possession of the said lands since 1976 when they
were delivered to them and that they have already introduced various improvements thereon.
Despite the foregoing, petitioners refused to honor the foregoing sales by asserting their
adverse rights on the subject lands. Worse, they continued to harass respondents, and even
threatened to demolish their improvements and dispossess them thereof. Hence, they filed the
instant complaint to quiet their respective titles over the subject lands and remove the cloud
cast upon their ownership as a result of petitioners' refusal to recognize the sales.7
For their part, petitioners filed a Motion to Dismiss dated November 4, 2004 on the grounds of
8
lack of jurisdiction, prescription/laches/estoppel, and res judicata. Anent the first ground,
petitioners averred that the subject lands are untitled, unregistered, and form part of the Baguio
Townsite Reservation which were long classified as lands of the public domain. As such, the
RTC has no jurisdiction over the case as it is the Land Management Bureau (formerly the
Bureau of Lands) which is vested with the authority to determine issues of ownership over
unregistered public lands. 9
As to the second ground, petitioners argued that it is only now, or more than 27 years from the
execution of the Deeds of Sale, that respondents seek to enforce said Deeds; thus, the present
action is already barred by prescription and/or laches. 10
Regarding the final ground, petitioners pointed out that on January 27, 1998, respondents had
already filed a complaint against them for injunction and damages, docketed as Civil Case No.
3934-R before the Regional Trial Court of Baguio City, Branch 5 (RTC Br. 5), wherein they
principally asserted their ownership over the subject lands. However, RTC Br. 5 dismissed Civil
Case No. 3934-R for lack of merit on the ground of respondents' failure to show convincing
proof of ownership over the same, which Order of dismissal was then affirmed by the CA on
11
appeal. Eventually, the Court issued a Resolution dated January 21, 2004 declaring the case
12 13
closed and terminated for failure to file the intended petition subject of the Motion for Extension
to file the same. In view of the foregoing, petitioners contended that due to the final and
executory ruling in Civil Case No. 3934-R, the filing of Civil Case No. 5881-R seeking to
establish the ownership thereof is already barred by res judicata. 14
The RTC Br. 61 Ruling
In an Order dated October 10, 2005, the RTC Br. 61 ruled in petitioners' favor, and
15
consequently, ordered the dismissal of Civil Case No. 5881-R on the following grounds: (a) it
had no authority to do so; (b) the Deeds of Sale in respondents' favor could not as yet be
considered title to the subject lands, noting the failure of respondents to perfect their title or
assert ownership and possession thereof for the past 27 years; and (c) the filing of the instant
case is barred by res judicata considering the final and executory Decision dismissing the
earlier filed Civil Case No. 3934-R where respondents similarly sought to be declared the
owners of the subject lands. 16
Aggrieved, respondents appealed to the CA. 17
The CA Ruling
In a Decision dated March 19, 2009, the CA set aside the dismissal of Civil Case No. 5881-R,
18
and accordingly, remanded the case to the court a quo for trial. It held that Civil Case No.
19
3934-R was an action for injunction where respondents sought to enjoin petitioners' alleged
entry into the subject lands and their introduction of improvements thereat; whereas Civil Case
No. 5881-R is an action to quiet title where respondents specifically prayed, inter alia, for the
removal of the cloud upon their ownership and possession of the subject lands. In this light, the
CA concluded that while these cases may involve the same properties, the nature of the action
differs; hence, res judicata is not a bar to the present suit. On the issue of laches, prescription
or estoppel, the CA pointed out that in view of respondents' allegation that they have been in
possession of the subject lands since 1976, their action to quiet title is imprescriptible.20
Dissatisfied, petitioners moved for reconsideration which was, however, denied in a

21
Resolution dated September 3, 2009; hence, this petition.

22
The Issue Before the Court
At the outset, it must be stressed that in setting aside the Order of dismissal of Civil Case No.
5881-R due to the inapplicability of the grounds of res judicata and prescription/laches, the CA
notably omitted from its discussion the first ground relied upon by petitioners, which is lack of
jurisdiction.
Jurisprudence has consistently held that "[j]urisdiction is defined as the power and authority of
a court to hear, try, and decide a case. In order for the court or an adjudicative body to have
authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over
the subject matter. It is axiomatic that jurisdiction over the subject matter is the power to hear
and determine the general class to which the proceedings in question belong; it is conferred by
law and not by the consent or acquiescence of any or all of the parties or by erroneous belief of
the court that it exists. Thus, when a court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action." Perforce, it is important that a court or tribunal should
23
first determine whether or not it has jurisdiction over the subject matter presented before it,
considering that any act that it performs without jurisdiction shall be null and void, and without
any binding legal effects. The Court's pronouncement in Tan v. Cinco, is instructive on this
24
matter, to wit:
A judgment rendered by a court without jurisdiction is null and void and may be attacked
anytime. It creates no rights and produces no effect. It remains a basic fact in law that the
1âwphi1
choice of the proper forum is crucial, as the decision of a court or tribunal without jurisdiction is
a total nullity. A void judgment for want of jurisdiction is no judgment at all. All acts performed
pursuant to it and all claims emanating from it have no legal effect. 25
Now, on the issue of jurisdiction, a review of the records shows that the subject lands form part
of a 159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan
No. 544367, Psu 189147 situated at Sitio Benin, Baguio City. Notably, such parcel of land
forms part of the Baguio Townsite Reservation, a portion of which, or 146, 428 square meters,
was awarded to Iloc Bilag due to the reopening of Civil Reservation Case No. 1, GLRO Record
No. 211, as evidenced by a Decision dated April 22, 1968 promulgated by the then-Court of
26
First Instance of Baguio City.
In a catena of cases, and more importantly, in Presidential Decree No. (PD) 1271, it was
27 28
expressly declared that all orders and decisions issued by the Court of First Instance of Baguio
and Benguet in connection with the proceedings for the reopening of Civil Reservation Case
No. 1, GLRO Record 211, covering lands within the Baguio Town site Reservation are null and
void and without force and effect. While PD 1271 provides for a means to validate ownership
over lands forming part of the Baguio Town site Reservation, it requires, among others, that a
Certificate of Title be issued on such lands on or before July 31, 1973. In this case, records
29
reveal that the subject lands are unregistered and untitled, as petitioners' assertion to that
effect was not seriously disputed by respondents. Clearly, the award of lots 2 and 3 of the
159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan No.
544367, Psu 189147 - which includes the subject lands - to Iloc Bilag by virtue of the reopening
of Civil Reservation Case No. 1, GLRO Record 211, is covered by the blanket nullification
provided under PD 1271, and consistently affirmed by the prevailing case law. In view of the
foregoing, it is only reasonable to conclude that the subject lands should be properly classified
as lands of the public domain as well.
Therefore, since the subject lands are untitled and unregistered public lands, then petitioners
correctly argued that it is the Director of Lands who has the authority to award their
ownership. Thus, the RTC Br. 61 correctly recognized its lack of power or authority to hear
30
and resolve respondents' action for quieting oftitle. In Heirs of Pocdo v. Avila, the Court ruled
31 32
that the trial court therein correctly dismissed an action to quiet title on the ground of lack of
jurisdiction for lack of authority to determine who among the parties have better right over the
disputed property, which is admittedly still part of public domain for being within the Baguio
Townsite Reservation, viz.:
The DENR Decision was affirmed by the Office of the President which held that lands within
the Baguio Townsite Reservation belong to the public domain and are no longer
registrable under the Land Registration Act. The Office of the President ordered the
disposition of the disputed property in accordance with the applicable rules of procedure for the
disposition of alienable public lands within the Baguio Townsite Reservation, particularly
Chapter X of Commonwealth Act No. 141 on Townsite Reservations and other applicable rules.
Having established that the disputed property is public land, the trial court was
therefore correct in dismissing the complaint to quiet title for lack of jurisdiction. The
trial court had no jurisdiction to determine who among the parties have better right over
the disputed property which is admittedly still part of the public domain. As held
in Dajunos v. Tandayag:
x x x The Tarucs' action was for "quieting of title" and necessitated determination of the
respective rights of the litigants, both claimants to a free patent title, over a piece of property,
admittedly public land. The law, as relied upon by jurisprudence, lodges "the power of
executive control, administration, disposition and alienation of public lands with the Director of
Lands subject, of course, to the control of the Secretary of Agriculture and Natural Resources."
In sum, the decision rendered in civil case 1218 on October 28, 1968 is a patent nullity. The
court below did not have power to determine who (the Firmalos or the Tarucs) were
entitled to an award of free patent title over that piece of property that yet belonged to
the public domain. Neither did it have power to adjudge the Tarucs as entitled to the "true
equitable ownership" thereof, the latter's effect being the same: the exclusion of the Firmalos in
favor of the Tarucs.
In an action for quieting of title, the complainant is seeking for "an adjudication that a claim of
title or interest in property adverse to the claimant is invalid, to free him from the danger of
hostile claim, and to remove a cloud upon or quiet title to land where stale or unenforceable
claims or demands exist." Under Articles 476 and 477 of the Civil Code, the two indispensable
requisites in an action to quiet title are: (1) that the plaintiff has a legal or equitable title to or
interest in the real property subject of the action; and (2) that there is a cloud on his title by
reason of any instrument, record, deed, claim, encumbrance or proceeding, which must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity.
In this case, petitioners, claiming to be owners of the disputed property, allege that
respondents are unlawfully claiming the disputed property by using void documents, namely
the "Catulagan" and the Deed of Waiver of Rights. However, the records reveal that
petitioners do not have legal or equitable title over the disputed property, which forms
part of Lot 43, a public land within the Baguio Townsite Reservation. It is clear from the
facts of the case that petitioners' predecessors-in-interest, the heirs of Pocdo Pool,
were not even granted a Certificate of Ancestral Land Claim over Lot 43, which remains
public land. Thus, the trial court had no other recourse but to dismiss the
case. (Emphases and underscoring supplied)
33
In conclusion, RTC Br. 61 has no jurisdiction over Civil Case No. 5881-R as the plaintiffs
therein (herein respondents) seek to quiet title over lands which belong to the public domain.
Necessarily, Civil Case No. 5881- R must be dismissed on this ground. It should be stressed
that the court a quo's lack of subject matter jurisdiction over the case renders it without
authority and necessarily obviates the resolution of the merits of the case. To reiterate, when a
court has no jurisdiction over the subject matter, the only power it has is to dismiss the action,
as any act it performs without jurisdiction is null and void, and without any binding legal effects.
In this light, the Court finds no further need to discuss the other grounds relied upon by
petitioners in this case.
WHEREFORE, the petition is GRANTED. The Decision dated March 19, 2009 and the
Resolution dated September 3, 2009 of the Court of Appeals in CA-G.R. CV No. 86266 are
hereby REVERSED and SET ASIDE. Accordingly, Civil Case No. 5881-R is DISMISSED on
the ground of lack of jurisdiction on the part of the Regional Trial Court of Baguio City, Branch
61.
SO ORDERED.
ESTELA M. PERLAS-BERNABE,
Associate Justice
WE CONCUR:

Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO


Associate Justice
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Chief Justice
Footnotes
*
Part of the Court's Decongestion Program.
1
Rollo, pp. 13-52.
2
Id. at 54-64. Penned by Associate Justice Romeo F. Barza with Associate Justices
Josefina Guevara-Salonga and Arcangelita M. Romilla-Lontok concurring.
3
Id. at 65-66.
4
Records, pp. 413-423. Penned by Presiding Judge Antonio C. Reyes.
5
Rollo, pp. 108-121.
6
Id. at 97-105.
7
Id. at 108-121. See also id. at 56-58.
8
Id. at 122-141.
9
Id. at 122-124.
10
Id. at 125-128.
See Order dated September 22, 1999 penned by Judge Antonio M. Esteves; records,
11
pp. 381-384.
See Decision dated October 29, 2002 (rollo, pp. 77-83) and Resolution dated
12
September 8, 2003 (rollo, pp. 85-86).
13
The January 21, 2004 Resolution was not attached to the rollo. However, the Court
issued a Resolution dated July 19, 2004 and clarified their ruling, declaring the case
closed and terminated. Id. at 87-88.
14
Id.at128-140.
15
Records, pp. 413-423.
16
Id. at 421-423.
17
See Notice of Appeal dated October 27, 2005; id. at 425-426.
18
Rollo, pp. 54-64.
19
Id. at 63.
20
Id. at 60-63.
21
22
Rollo, pp. 65-66.
Mitsubishi Motors Philippines Corporation v. Bureau of Customs, G.R. No. 209830,

23
June 17, 2015, 759 SCRA 306, 311-312. Citations omitted.
24
See G.R. No. 213054, June 15, 2016.
25
Id., citing Tiu v. First Plywood Corporation, 629 Phil. 120, 133 (2010).
26
CA rollo, pp. 91-94. Penned by Judge Pio R. Marcos.
27
See Presidential Decree No. 1271 Committee v. Rodriguez de Guzman, G.R. No.
187291, December 5,2016; Residents of Lower Atab & Teachers' Village, Sta. Tomas
Proper Barangay, Baguio City v. Sta. Monica Industrial & Development
Corporation, 745 Phil. 554 (2014); Heirs of Pocdo v. Avila, 730 Phil. 215
(2014); Republic v. Sangalang, 243 Phil. 46 (1988); Republic v. Fangonil, 218 Phil. 484
(1984); Republic v. Marcos, 152 Phil. 204 (1973); Republic of the Philippines v.
Marcos, 140 Phil. 241 (1969).
28
Entitled "AN ACT NULLIFYING DECREES OF REGISTRATION AND CERTIFICATES
OF TITLE COVERING LANDS WITHIN THE BAGUIO TOWNSITE RESERVATION
ISSUED IN CIVIL REGISTRATION CASE NO. 1, GLRO RECORD No. 211
PURSUANT TO REPUBLIC ACT No. 931, AS AMENDED, BUT CONSIDERING AS
VALID CERTAIN TITLES OF SUCH LANDS THAT ARE ALIENABLE AND
DISPOSABLE UNDER CERTAIN CONDITIONS AND FOR OTHER PURPOSES,"
approved on December 22, 1977.
29
See Section 1, PD 1271 which reads:
SECTION 1. All orders and decisions issued by the Court of First Instance of
Baguio and Benguet in connection with the proceedings for the reopening of
Civil Reservation Case No. 1, GLRO Record No. 211, covering lands within the
Baguio Townsite Reservation, and decreeing such lands in favor of private
individuals or entities, are hereby declared null and void and without force and
effect; PROVIDED, HOWEVER, that all certificates of titles issued on or before
July 31, 1973 shall be considered valid and the lands covered by them shall be
deemed to have been conveyed in fee simple to the registered owners upon a
showing of, and compliance with, the following conditions:
(a) The lands covered by the titles are not within any government,
public or quasi-public reservation, forest, military or otherwise, as
certified by appropriating government agencies;
(b) Payment by the present title holder to the Republic of the

Philippines of an amount equivalent to fifteen per centum (15%) of the
assessed value of the land whose title is voided as of revision period
1973 (P.D. 76), the amount payable as follows: Within ninety (90) days
of the effectivity of this Decree, the holders of the titles affected shall
manifest their desire to avail of the benefits of this provision and shall
pay ten per centum (10%) of the above amount and the balance in two
equal installments, the first installment to be paid within the first year of
the effectivity of this Decree and the second installment within a year
thereafter.
30
See People v. Pareja, 267 Phil. 172 (1990). See also Section 4 of Commonwealth Act
No. 141, entitled "AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO
LANDS OF THE PUBLIC DOMAIN," otherwise known as the "PUBLIC LAND ACT,"
(approved on November 7, 1936) which reads: Section 4. Subject to said control, the
Director of Lands shall have direct executive control of the survey, classification, lease,
sale or any other form of concession or • disposition and management of the lands of
the public domain, and his decisions as to questions of fact shall be conclusive when
approved by the Secretary of Agriculture and Commerce.
31
See records, p. 421.
32
730 Phil. 215 (2014).
33
Id. at 223-225.
En Banc
March 14, 2017
A.C. No. 11385
ORTIGAS PLAZA DEVELOPMENT CORPORATION, represented by JANICE

MONTERO, Complainant
vs
ATTY. EUGENIO S. TUMULAK, Respondent
DECISION
PER CURIAM:
Under the Lawyer's Oath and the Code of Professional Responsibility, a lawyer is sworn to
respect the law and legal processes, and any violation thereof merits condign disciplinary
action against the lawyer.
The present complaint asks for the disbarment of Atty. Eugenio S. Tumulak for his participation
in the forcible intrusion into the complainant's property.
Antecedents
Complainant Ortigas Plaza Development Corporation owned the parcel of land located in
Ortigas Avenue Extension, Pasig City and covered by Transfer Certificate of Title No. PT-
126797 of the Registry of Deeds of Rizal (property).
The complainant alleges that at around 11:00 a.m. of November 29, 2012, Atty. Tumulak,
accompanied by uniformed guards of the Nationwide Security Agency, Inc., unlawfully entered
and took control of the entrance and exit of the property. It appears that prior to the incident,
Atty. Tumulak had furnished several documents to the complainant, including the deed of
assignment executed by one Henry F. Rodriguez as the administrator of the Estate of the late
Don Hermogenes R. Rodriguez designating Atty. Tumulak as an assignee. The documents
1
furnished by Atty. Tumulak were all related to the intestate proceedings of the Estate of the late
Don Hermogenes Rodriguez docketed as S.P. No. IR-1110 of the Regional Trial Court, Branch
34, in Iriga City (RTC), which involved the claim of the heirs of the late Don Hermogenes
Rodriguez to several parcels of land situated all over the country, including the Provinces of
Rizal, Quezon, and Bulacan, and Quezon City, Caloocan City, Pasay City, Antipolo City,
Muntinlupa City, Parafiaque City, Marikina City, Baguio City, Angeles City, San Fernando City
and Tagaytay City. 2
The complainant charges Atty. Tumulak with deceit, dishonesty and fraud for claiming to have
coordinated with the proper government agencies prior to the illegal and forcible intrusion. The
3
complainant manifests that as a lawyer, Atty. Tumulak ought to know that the claim of his
principal in the property was barred by res judicata due to the valid issuance of a Torrens title
under its name. Accordingly, his conduct constituted conduct unbecoming of a lawyer
deserving of sanction. 4
In his answer to the complaint, Atty. Tumulak denies having been present when the security
5
guards of Nationwide Security Agency entered the complainant's property. He insists that the
allegations against him were pure hearsay because Ms. Montero, the representative of the
complainant, had no personal knowledge of the incident; that the documents he had furnished
to the complainant included records of the intestate proceedings in the R TC involving the
Estate of the late Don Hermogenes Rodriguez and Antonio Rodriguez; that he had no hand in
procuring the documents; that he did not himself enter the property; and that the entry into the
property was effected by the sheriff pursuant to a writ of execution. Report and
Recommendation of the Integrated Bar of the Philippines (IBP)
After due hearing, IBP Commissioner of Bar Discipline Ricardo M. Espina submitted his Report
and Recommendation, wherein he found Atty. Tumulak to have violated Rules 1.01 and 1.02,
6
Canon 1 of the Code of Professional Responsibility. Commissioner Espina recommended the

suspension of Atty. Tumulak from the practice of law for two years.
On October 28, 2015, the IBP Board of Governors issued Resolution No. XXII-2015-57
adopting the findings and recommendation of Commissioner Espina, viz.: 7
RESOLUTION NO. XXII-2015-57

CIBD Case No. 13-3707
Ortigas Plaza Dev't Corp. vs.
Atty. Eugenio S. Tumulak
RESOLVED to ADOPT the .findings o.f facts and recommended penalty of 2 years suspension
of Atty. Eugenio S. Tumulak by the Investigating Commissioner.
Issue
Did Atty. Tumulak violate Rules 1.01 and 1.02, Canon 1 of the Code of Professional
Responsibility when he facilitated the implementation of the writ of execution and the entry into
the complainant's property?
Ruling of the Court
Atty. Tumulak deserves to be severely sanctioned for violating the Lawyer's Oath and the Code
of Professional Responsibility.
Pertinent portions of Commissioner Espina's Report and Recommendation, which adequately

illustrated Atty. Tumulak's transgressions, are worth quoting verbatim, viz.:
We enumerate respondent lawyer's violation of the following rules/principles when he led the
forcible intrusion into OPDC office in Pasig City:
a) Atty. Tumulak knew, or ought to know, that property claims based on Spanish title can
no longer be cited as legitimate basis for ownership as of 16 February 1976 by virtue of
Presidential Decree No. 892;
b) Respondent lawyer, as a long-time practitioner (admitted to the Bar in 1971), is presumed

to know that the Supreme Court has promulgated a case specifically addressing
the fake titles arising from spurious "Deed of Assignment" of the supposed Estate of
Don Hermogenes Rodriguez. This is the 2005 case of Evangelista, et al. vs.
Santiago [G.R. No. 157447; April 29, 2005] where the same modus as the one adopted by
respondent lawyer, was used by an "assignee" in claiming properties located in
Paranque, Las Pinas, Muntinlupa, Cavite, Batangas, Pasay, Taguig, Makati, Pasig,
Mandaluyong, Quezon City, Caloocan, Bulacan, and Rizal, allegedly as part of the Estate
of Don Hermogenes Rodriguez;
c) xxxx;
d) While respondent lawyer claims that the "deed of assignment" in his favor has a
consideration, unfortunately we did not see any agreed consideration in the document. If there
is no monetary consideration, it will be treated as a donation with the corresponding payable
taxes. Respondent lawyer's documents don't show that taxes have been paid for the document
to be legally binding;
e) Torrens title cannot be attacked collaterally but can only be questioned in a principal action x
x x. If respondent lawyer thinks that OPDC's title on the Pasig property is questionable, he
could have filed an action to annul OPDC's title and not bring in the cavalry, so to speak, in the
form of uniformed security guards, to take over the property; and
f) We find respondent's actions highly questionable and contrary to legal protocol; (i) the court
documents were issued by the RTC-Iriga City, Br. 94; (ii) it "affects" a property located in Pasig
City; (iii) respondent lawyer became the "assignee" of a Pasig City prope11y; (iv) no taxes
were paid for the "assignment"; (v) assistance of the Sheriff of Pasig was not enlisted by
respondent, instead, he enlists the help of the Sheriff of Manila; (vi) all that the Sheriff of Manila
did was to deliver the RTC-Iriga, Br. 34 court documents to complainant but with a twist; the
Sheriff and respondent lawyer were escorted by a phalanx of security guards; (vii) the
uniformed guards, obviously upon instruction, took over and/or controlled the gates of OPDC
offices with attendant force and intimidation. Respondent lawyer's claimed innocence cannot
prevail over these illegalities of which he, or his agents, had a hand.
With the above highly questionable acts totally irreconcilable with a seasoned practitioner like
respondent lawyer, we find Atty. Eugenio S. Tumulak liable for violation of Canon 1, Code of
Professional Responsibility, specifically Rule 1.01 and 1.02 thereof. (Bold underscoring
supplied for emphasis)
Commissioner Espina correctly observed that the Court in the 2005 ruling in Evangelista v.
Santiago had already enjoined the successors and heirs of the late Don Hermogenes
8
Rodriguez from presenting the Spanish title as proof of their ownership in land registration
proceedings, as follow:
In their Complaint, petitioners claimed title to the Subject Property by virtue of their actual and
continuous possession of the same since time immemorial, by themselves and through their
predecessors-in-interest. Yet, the Deeds of Assignment executed by Ismael Favila in their
favor, attached to and an integral part of their Complaint, revealed that petitioners
predecessors-in-interest based their right to the Subject Property on the Spanish title awarded
to Don Hermogenes Rodriguez.
There existed a contradiction when petitioners based their claim of title to the Subject Property
on their possession thereof since time immemorial, and at the same time, on the Spanish title
granted to Don Hermogenes Rodriguez. Possession since time immemorial carried the
presumption that the land had never been part of the public domain or that it had been private
property even before the Spanish conquest. If the Subject Property was already private
property before the Spanish conquest, then it would have been beyond the power of the
Queen of Spain to award or grant to anyone.
The title to and possession of the Subject Property by petitioners predecessors-in-interest

could be traced only as far back as the Spanish title of Don Hermogenes Rodriguez.
Petitioners, having acquired portions of the Subject Property by assigmnent, could acquire no
better title to the said portions than their predecessors-in-interest, and hence, their title can
only be based on the same Spanish title.
Respondent maintained that P.D. No. 892 prevents petitioners from invoking the Spanish title
as basis of their ownership of the Subject Property. P.D. No. 892 strengthens the Torrens
system by discontinuing the system of registration under the Spanish Mortgage Law, and by
categorically declaring all lands recorded under the latter system, not yet covered by Torrens
title, unregistered lands. It further provides that within six months from its effectivity, all holders
of Spanish titles or grants should apply for registration of their land under what is now P.D. No.
1529, otherwise known as the Land Registration Decree. Thereafter, Spanish titles can no
longer be used as evidence of land ownership in any registration proceedings under the
Torrens system. Indubitably, P.D. No. 892 divests the Spanish titles of any legal force and effect
in establishing ownership over real property. P.D. No. 892 became effective on 16 February
1976. The successors of Don Hermogenes Rodriguez had only until 14 August 1976 to apply
for a Torrens title in their name covering the Subject Property. In the absence of an allegation in
petitioners' Complaint that petitioners predecessors-in-interest complied with P.D. No. 892,
then it could be assumed that they failed to do so. Since they failed to comply with P.D. No.
892, then the successors of Don Hermogenes Rodriguez were already enjoined from
presenting the Spanish title as proof of their ownership of the Subject Property in registration
proceedings.
Registration proceedings under the Torrens system do not create or vest title, but only confirm
and record title already created and vested. By virtue of P.D. No. 892, the courts, in registration
proceedings under the Torrens system, are precluded from accepting, confirming and recording
a Spanish title. Reason therefore dictates that courts, likewise, are prevented from accepting
and indirectly confirming such Spanish title in some other form of action brought before
them (i.e., removal of cloud on or quieting of title), only short of ordering its recording or
registration. To rule otherwise would open the doors to the circumvention of P.D. No. 892, and
1âwphi1
give rise to the existence of land titles, recognized and affirmed by the courts, but would never
be recorded under the Torrens system of registration. This would definitely undermine the
1âwphi1
Torrens system and cause confusion and instability in property ownership that P.D. No. 892
intended to eliminate. 9
Moreover, in Santiago v. Subic Bay Metropolitan Authority, the Court denied the petition of the
10
successors of the late Don Hermogenes Rodriguez by applying the principle of stare
decisis, ruling therein that the applicable laws, the issues, and the testimonial and documentary
evidence were identical to those in the situation in Evangelista v. Santiago, thusly:
The present petition is substantially infirm as this Court had already expressed in the case
of Nemencio C Evangelista, et al. v. Carmelina M Santiago, that the Spanish title of Don
Hermogenes Rodriguez, the Titulo de Propriedad de Torrenos of 1891, has been divested of
any evidentiary value to establish ownership over real property.
Victoria M. Rodriguez, Armando G. Mateo and petitioner Pedro R. Santiago anchor their right
to recover possession of the subject real property on claim of ownership by Victoria M.
Rodriguez being the sole heir of the named grantee, Hermogenes Rodriguez, in the Spanish
title Titulo de Propriedad de Torrenos.
xxxx
Prescinding from the foregoing, the instant petition must be denied by virtue of the principle
of stare decisis. Not only are the legal rights and relations of herein parties substantially the
same as those passed upon in the aforementioned 2005 Evangelista Case, but the facts, the
applicable laws, the issues, and the testimonial and documentary evidence are identical such
that a ruling in one case, under the principle of stare decisis, is a bar to any attempt to relitigate
the same issue. 11
Finally, the 2011 ruling in Pascual v. Robles affirmed the decision of the Court of Appeals (CA)
12
setting aside the amended decision rendered in S.P. No. IR-1110 by the RTC. This ruling
should have alerted Atty. Tumulak from taking the actions giving rise to the complaint against
him inasmuch as he has admitted to have derived his rights from the deed of assignment
executed in his favor by Henry Rodriguez as the administrator of the Estate of the late Don
Hermogenes Rodriguez pursuant to said amended decision. Moreover, Atty. Tumulak is
presumed as a lawyer to know the developments in S.P. No. IR-1110 not only by virtue of his
becoming an assignee of the estate but also because of his being a lawyer with the constant
responsibility of keeping abreast of legal developments. 13
Atty. Tumulak cannot shield himself from personal responsibility behind the deed of
assignment. The deed was doubtful on its face, as borne out by the text, to wit:
DEED OF ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS
This Deed of Assignment is made and executed by and between
The INTESTATE ESTATE OF THE LATE HERMOGENES R. RODRIGUEZ AND ANTONIO R.

RODRIGUEZ, represented by HENRY F. RODRIGUEZ, of legal age, widower, Filipino, x xx
Judicial Heir and Court-Appointed Administrator by virtue of AMENDED DECISION dated
August 13, 19999 of Fifth Judicial Region, RIC
Branch 34, Iriga City in SPECS. PROCS. No. IR-1110 which settled the issue of Heirship,
Administratorship and Settled [sic] of the Estate of Hermogenes and Antonio Rodriguez y
Reyes Estate, hereinafter referred to as the ASSIGNOR;
-and-
EUGENIO S. TUMULAK, of legal age, widower x x x hereinafter referred to as the ASSIGNEE:
WITNESSETH:
WHEREAS, the ASSIGNOR is the Court-Appointed Administrator and one of the Judicial heirs
of the Intestate Estate of the late HERMOGENES and ANTONIO RODRIGUEZy REYES
Estate by virtue of AMENDED DECISION dated Augsut 13, 1999 of Fifth Judicial
Region, RTC Branch 34, Iriga City in SPECS. PROCS. No. IR-1110 which settled the issue of
Heirship, Administratorship and Settlement of the Estate of Hermogenes and Antonio
Rodriguez y Reyes Estate, thereafter, petitions for certiorari filed with the SUPREME COURT
assailing the aforesaid Amended Decision were DENIED and declared FINAL & EXECUTORY
in G.R. Nos. 140271, 140915, 168648, 142477 and 182645, affirming the same Amended
Decision;
Whereas, the ASSIGNEE has secured the property and actual occupant/s over the same
property they are presently occupying and initiating steps for recovery of the same parcel and
has shown exemplary loyalty and faithfulness to the ASSIGNOR and also consistently
protected the rights and interest of the Estate against intruder, impostor, usurpers and false
claimant with spurious title/s over the same property;
NOW THEREFORE, for and in consideration of the foregoing, the ASSIGNOR has agreed to
execute this DEED OF ASSIGNMENT and the ASSIGNEE, has accepted and both parties
have mutually agreed to the following terms and conditions herein stipulated;
A parcel of land situated in Ortigas A venue corner Raymundo Avenue, Barangay Rosario,
Pasig City, Metro Manila, Island of Luzon, with containing an area of THIRTY-FIVE
THOUSAND EIGTH [sic] HUNDRED AND NINE[TY] ONE SQUARE METERS (35,891) more
or less technical description described below, to
xxxx
1. That the ASSIGNEE shall shoulder all the expenses in the performance of the task as
indicated x x x above such as payment for the real taxes, titling, researching, liaising with
government agencies, paying lawyers involved in the litigation, and other incidental expenses
relevant in the consummation of the said transaction;
2. That the ASSIGNEE shall secure and facilities [sic] all documents from Land Registration
Authority, DENR-LMB, DENR-LMS, Register of Deeds and such other goverm11ent agencies
concerned for the completion of titling process subject to the existing laws, rules and regulation
in accordance to Land Registration Act;
3. That the ASSIGNEE shall perform the task of relocation and verification[,] land survey,
possessing, fencing, guarding, surveying and or reviving plans, paying taxes, titling, selling,
leasing, developing, segregating and mortgaging;
4. That the ASSIGNEE shall be the AD-LITEM representative of the ASSIGNOR, before of [sic]
any Court[,] Administrative and Quasi-Judicial body and to bring suit, defend, in connection
with the actions brought for or against the ASSIGNOR of whatever nature and kind; and
5. That the ASSIGNEE shall report regularly to the ASSIGNOR per the above tasks and
accomplishment.
IN WITNESS WHEREOF, the parties have hereunto set their respective signatures on the date
22 March 2010 and place QUEZON CITY above written. (Bold underscoring supplied for
14
emphasis)
Atty. Tumulak cannot deny his personal participation in the unlawful and forcible intrusion into
the property just because the complainant did not establish his physical presence thereat at
the time. In fact, such physical participation was not even necessary in order to properly
implicate him in personal responsibility for the intrusion after he admitted having furnished to
the complainant the deed of assignment and other documents as the source of his authority.
Specifically, his duties under the deed of assignment included "shoulder[ing] all the expenses
in the performance of [securing the property x x x and initiating steps for recovery of the same
parcel] x x x such as x x x or payment for the real taxes, titling, researching, liaising with
government agencies, paying lawyers involved in the litigation, and other incidental expenses
relevant in the consummation of the said transaction;" and ''possessing, fencing, [and}
guarding" the property.
It is notable in this connection that Atty. Tumulak had been discharging his role as the assignee
since the time of the execution of the deed of assignment on March 22, 2010. Considering that
he had been in charge of doing all the actions necessary to enforce the interest of his principal
since March 22, 2010, and that the forcible intrusion complained about occurred on November
29, 2012, or more than two years from the execution of the deed of assignment, he is
reasonably and ineluctably presumed to have coordinated all the actions leading to the
intrusion.
Finally, even assuming that the amended decision was valid and enforceable, Atty. Tumulak
could not legitimately resort to forcible intrusion to advance the interest of the assignor. The
more appropriate action for him would be to cause the annulment of the complainant's title
instead of forcibly entering the property with the aid of armed security personnel.
All told, Atty. Tumulak was guilty of misconduct for circumventing existing laws and
disregarding settled rulings in order to commit injustice against the complainant. His conduct
betrayed his Lawyer's Oath "to support [the} Constitution and obey the laws as well as the
legal orders of the duly constituted authorities therein." He breached Canon 1, Rules 1.01 and
1.02 of the Code of Professional Responsibility, to wit:
CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE
LAND AND PROMOTE RESPECT FOR LAW AND FOR LEGAL PROCESSES.
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.
Rule 1.02 - A lawyer shall not counsel or abet activities aimed at defiance of the law or at
lessening confidence in the legal system.
To the best of his ability, every lawyer is expected to respect and abide by the law, and to avoid
any act or omission that is contrary thereto. The lawyer's personal deference to the law not
1âwphi1
only speaks of his or her commendable character but also inspires in the public a becoming
respect and obedience to the law. 15
The sworn obligation of every lawyer under the Lawyer's Oath and the Code of Professional
Responsibility to respect the law and the legal processes is a continuing condition for retaining
membership in the Legal Profession. The lawyer must act and comport himself or herself in
such a manner that would promote public confidence in the integrity of the Legal
Profession. Members of the Bar are reminded, therefore, that their FIRST Duty is to comply
16
with the rules of procedure, rather than to seek exceptions as loopholes. A lawyer who assists
17
a client in a dishonest scheme or who connives in violating the law commits an act that
warrants disciplinary action against him or her. 18
The suspension from the practice of law or disbarment of a lawyer is justified if he or she
proves unworthy of the trust and confidence imposed by the Lawyer's Oath, or is otherwise
found to be wanting in that honesty and integrity that must characterize the members of the
Bar in the performance of their professional duties. Although the Court imposed a six-month
19
suspension from the practice of law on erring lawyers found violating Canon 1, Rules 1.01 and
1.02, we adopt the recommendation of the IBP to suspend Atty. Tumulak from the practice of
20
law for a period of two years. Such penalty was appropriate and condign in relation to the
misconduct he committed as well as to the prejudice he caused the complainant.
ACCORDINGLY, the Court FINDS and DECLARES respondent ATTY. EUGENIO S.

TUMULAK guilty of violating the Lawyer's Oath and Canon 1, and Rules 1.01 and 1.02 of
the Code of Professional Responsibility; and SUSPENDS him from the practice of law for a
period of TWO (2) YEARS EFFECTIVE IMMEDIATELY, with the STERN WARNING that any
similar infraction in the future will be dealt with more severely.
This decision is IMMEDIATELY EXECUTORY.

Let copies of this decision be furnished to the Office of the Bar Confidant to be appended to the
respondent's personal record as an attorney; to the Integrated Bar of the Philippines; and to all
courts in the Philippines for their information and guidance.
SO ORDERED.

Chief Justice
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

ESTELA M. PERLAS-BERNABE MARVIC M.V.F. LEONEN

FRANCIS H. JARDELEZA ALFREDO BENJAMIN S. CAGUIOA

SAMUEL R. MARTIRES NOEL G. TIJAM

Footnotes
1
Rollo, pp. 15-16.
2
Id. at 2-4.
3
Id. at 4.
4
Id. at 5-6.
5
Id. at 131-137.
6
Id. at 215-219.
7
Id. at 213·214.
8
G.R. No. 157447, April 29, 2005, 457 SCRA 744.
9
Supra, at 766-767.
10
G.R. No. 156888, November 20, 2006, 507 SCRA 283.
11
Supra 292-295.
12
G.R. No. 182645, June 22, 2011, 652 SCRA 573.
13
Canon 5, Code of Professional Responsibility.
14
Rollo, pp. 15-16.
15
See Jimenez v. Francisco, A.C. No. 10548, December 10, 2014, 744 SCRA 215, 229.
16
Chu v. Guico, Jr., A.C. No. 10573, January 13, 2015, 745 SCRA 257, 265.
Suico Industrial Corp. v. Lagura-Yap, G.R. No 177711, September 5, 2012, 680

17
SCRA 145, 162 citing Lapid v. Laurea, G.R. No. 139607, October 28, 2002, 391 SCRA
277, 285.
18
Guarin v. Limpin, A.C. No. 10576, January 14, 2015, 745 SCRA 459, 464.
19
Ramiscal v. Orro, A.C. No. 10945, February 23, 2016, 784 SCRA 421, 428.
20
See Guarin v. Limpin, A.C. No. 10576, January 14, 2015, 745 SCRA 459 and Tejada
v. Palana, A.C. No. 7434, August 23, 2007, 530 SCRA 771.
THIRD DIVISION
January 30, 2017
G.R. No. 181596
JENESTOR B. CALDITO and MARIA FILOMENA T. CALDITO, Petitioner

vs.
ISAGANI V. OBANDO and GEREON V. OBANDO, Respondent
DECISION
REYES, J.:
Assailed in this petition for review on certiorari under Rule 45 of Reversed Rules of Court are
1
the Decision dated July 17, 2007 and the Resolution dated January 29, 2008 of the Court of
2 3
Appeals (CA) in CA-G.R. CV No. 87021, which reversed and set aside the Decision dated 4
December 23, 2005 of the Regional Trial Court (RTC) of Laoag City, Ilocos Norte, Branch 12,
in Civil Case No. 12932-12.
The Facts
This petition stemmed from a complaint for quieting of ownership over a parcel of land
5
covering the 272.33 square meters eastern portion of Lot No. 1633 situated at Barangay No. 5,
San Vicente, Sarrat, Ilocos Norte, filed by Spouses Jenestor B. Caldito and Ma. Filomena
Tejada Caldito (Filomena) (petitioners) against Isagani V. Obado (Isagani) and Gereon V.
Obado (respondents).
The record showed that as early as 1921, Lot No. 1633 was declared for taxation purposes in
the name of Felipe Obado (Felipe). After Felipe's death, Paterno Obado (Paterno), whom
Felipe treated like his own son, subsequently occupied Lot No. 1633 and continued to pay the
realty taxes of the same.6
Sometime in 1995, Antonio Ballesteros (Antonio) executed an Affidavit of Ownership dated

February 23, 1995 narrating his claim over the subject parcel of land.· In his affidavit, Antonio
claimed that Lot No. 1633 was co-owned by Felipe with his five siblings, namely: Eladia,
Estanislao, Maria, Severino and Tomasa, all surnamed Obado. 7
On the next day following the execution of the said affidavit or on February 24, 1995, Antonio
and Elena Ballesteros (Spouses Ballesteros) sold the subject parcel of land to the petitioners
for the sum of P70,000.000 evidenced by a Deed of Absolute Sale. Thereafter, the petitioners
declared the subject lot for taxation purposes and paid the realty taxes thereon. 8
In 2002, the petitioners attempted to build a house on the subject parcel of land but the
respondents prevented them from completing the same. The respondents then filed a
complaint before the barangay but no amicable settlement was reached between the
parties. Hence, on December 8, 2003, the petitioners instituted a complaint for quieting of
9
ownership against the respondents before the RTC, as well as an injunctive writ to prevent the
respondents from interfering with the construction of their house. 10
For their part, the respondents averred that the Spouses Ballesteros were not the owners and
possessors of the subject parcel of land. They maintained that Lot No. 1633 was inherited by
their father, Paterno, from its original owner Felipe, and they have been paying the real
property taxes for the entire property. They asserted that the petitioners are buyers in bad faith
since their family had been in possession of the entire Lot No. 1633 since 1969 and had been
in. open, peaceful and uninterrupted possession of the whole property up to the present or for
more than 30 years in the concept of an owner. 11
After trial, the court a quo rendered its judgment in favor of the petitioners. The trial court
upheld the validity of the sale between the petitioners and the Spouses Ballesteros and
dismissed the respondents' claim of ownership over Lot No. 1633. The trial court held that the
petitioners presented convincing evidence of ownership over the subject parcel of land which
consists of the following: (a) the Deed of Absolute Sale executed between the petitioners and
the Spouses Ballesteros; (b) the tax declarations all paid by the petitioners only; and (c) the
Affidavit of Ownership allegedly executed by Antonio. The trial court also found that the
respondents have no successional rights over the property of Felipe based on the governing
law and on the order of intestate succession at that time and the established facts. Thus, the
RTC disposed as follows:
WHEREFORE, IN VIEW OF ALL THE FOREGOING PREMISES, the preponderance of

evidence having substantially and sufficiently tilted in favor of the [petitioners] herein and
against the [respondents] herein named and their siblings, this Court hereby renders judgment
declaring the validity of the 272.33 square meters eastern portion of Lot No. 1633 in favor of
the [petitioners] and, the [respondents] are hereby ordered to do the following:
1. to respect, recognize and not to molest the lawful ownership and possession of the
[petitioners] over the 272.33 square meters located at the eastern portion of Lot No.
1633 of the Sarrat Cadastre;
2. to pay jointly and severally to the /petitioners} the total sum of:
2.a. PJJB,453.50- as and/or actual damages;
2.h. P400,000.00- as and/or moral damages;
2.c. PJ00,000.00- as and/or nominal damages;

2.d. P200,000.00- as and/or temperate damages; and
2.e. P300,000.00- as and/or exemplary damages or corrective.
With costs against the /respondents].
SO ORDERED. (Emphasis and italics in the original)

12
On appeal, the CA reversed and set aside the RTC decision upon finding that: (1) the
petitioners failed to prove the title of their immediate predecessors-in-interest, the Spouses
Ballesteros; (2) the petitioners failed to support their claim that Felipe and his siblings, Eladia,
Estanislao, Maria, Severino and Tomasa, co-owned Lot No. 1633; (3) Antonio should have
been called to the witness stand to testify on the contents of his Affidavit of Ownership; (4) the
Deed of Absolute Sale is not a sufficient and convincing evidence that the petitioners'
predecessors-in-interest have a title on the subject parcel of land. which they can transfer; (5)
the petitioners are not innocent purchasers for value since the subject lot is not registered and
is in the possession of another person, other than the Spouses Ballesteros; (6) nothing in the
record could establish the relationship between Felipe and his supposed legal heirs; and (7)
the respondents enjoy a legal presumption of just title in their favor since they are in
possession of the entire Lot No. 1633. The CA then ruled that:
For a party seeking to quiet their "ownership" of the portion in litigation, [the petitioners] have,
for starters, miserably failed to prove the title of their immediate predecessors-in-interest, the
[Spouses' Ballesteros]. Except for the February 23, 1995 Affidavit of Ownership I executed by
[Antonio], there is, in fact, no evidence on record to support the claim that the subject parcel
was, indeed, co-owned by [Felipe] [and]:1 his siblings, Eladia, Estanislao, Maria, Severino and
Tomasa, all surnamed Obado. To our mind, the fact that [Antonio] was not even called to the
witness stand to testify on the contents of his Affidavit of Ownership '~should have immediately
impelled the trial court to discount its probative value and, with it, the very foundation of [the
respondents'] supposed cause of action.
xxxx
With even greater reason are we disposed towards the reversal of the trial court's holding that,
pursuant to the provisions of the Spanish Civil Code of 1889 on intestate succession, Eladia,
Estanislao, Maria, s~verino and Tomasa, all surnamed Obado were the ones who have
rightfully inherited the subject parcel from their brother, [Felipe]. Except for the aforesaid
February 23, 1995 Affidavit of Ownership executed by [Antonio], [the respondents] correctly
argue that there is nothing on record from which the relationship of said decedent and his
supposed legal heirs may be reasonably deduced. Even if said relationship were, moreover,
assumed, the absence of evidence showing that [Felipe] predeceased all of his supposed
siblings impel us to regard, with considerable askance, the trial court's disposition of the case
by application of said rules on intestate succession. Litigations cannot be properly resolved by
suppositions, deductions, or presumptions, with no basis in evidence for the truth must have 1
to be determined by the hard rules on admissibility and proof. This is particularly true. of the
case at bench where the successional rights determined by the trial court are diametrically
opposed to [Antonio's] Affidavit of Ownership which dubiously claimed that the subject parcel
was, in fact, co-owned by [Felipe] and his ostensible siblings and had already been partitioned
by and among them. 13
The petitioners moved for reconsideration but the same was denied. Hence, this petition.
14 15
The Issue
WHETHER OR NOT THE PETITIONERS WERE ABLE TO PROVE OWNERSHIP OVER THE
SUBJECT PARCEL OF LAND.
Ruling of the Court
The petition has no merit.
At the outset, it bears to emphasize that there is no dispute with respect to the fact that Felipe
was the original owner of the entire parcel of unregistered land known as Lot No. 1633 which
he started declaring as his property for taxation purposes as early as 1921. When Felipe died
without issue, Lot No. 1633 was subsequently occupied by Paterno who then declared the
same for taxation purposes and paid the realty taxes thereon.
The petitioners' complaint styled as being for the "quieting of ownership" is in fact an action for
quieting of title. The petitioners anchor their cause of action upon the Deed of Sale and the
Affidavit of Ownership executed by Antonio. On the other hand, the respondents countered
that: (1) they inherited from their father, Paterno, Lot No. 1633, of which the herein disputed
subject parcel of land is part; and (2) they have been in possession of the same for more than
30 years in the concept of an owner.
Essentially, the issues raised center on the core question of whether the petitioners were able
to prove ownership over the subject parcel of land. In resolving this issue, the pertinent point
1âwphi1
of inquiry is whether the petitioners' predecessors-in-interest, the Spouses Ballesteros, have

lawful title over the subject parcel of land.
While the question raised is essentially one of fact, of which the Court normally abstains from,
yet, considering the incongruent factual conclusions of the courts below, the Court is
constrained to go by the exception to the general rule and proceed to reassess the factual
circumstances of the case and make its own assessment of the evidence and documents on
record. But even if the Court were to re-evaluate the evidence presented, there is still no
reason to depart from 'the CA' s ruling that Lot No. 1633 is owned by the respondents.
The Court concurs with the disquisition of the CA that the petitioners failed to: (1) prove the title
of their immediate predecessors-in-interest, the Spouses Ballesteros; and (2) present evidence
supporting the claim that Lot No. 1633 was co-owned by Felipe and his siblings, Eladia,
Estanislao, Maria, Severino and Tomasa. Also, the Court finds that the RTC mistakenly relied
upon the Affidavit of Ownership, executed by Antonio, to conclude that the petitioners were
possessors in good faith and with just title who acquired the subject parcel of land through a
valid deed of sale.
In this case, the petitioners' cause of action relates to an action to quiet title which has two
indispensable requisites, namely: (1) the plaintiff or complainant has a legal or an equitable title
to or interest in the real property subject of the action; find (2) the deed, claim, encumbrance or
proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its primafacie appearance of validity or legal efficacy.16
From the foregoing provisions, it is clear that the petitioners' cause of action must necessarily
fail mainly in view of the absence of the first requisite since the petitioners were not able to
prove equitable title or ownership over the subject parcel of land.
The petitioners' claim of legal title over the subject parcel of land by virtue of the Deed of Sale
and Affidavit of Ownership issued by Antonio cannot stand because they failed to prove the title
of their immediate predecessors-in-interest, the Spouses Ballesteros. The Court cannot give
full credence to Antonio's Affidavit of Ownership for he simply made general and self-serving
statements therein which were favorable to him, and which were not supported with
documentary evidence, with no specifics as to when their predecessors-in-interest acquired the
subject parcel of land, and when the Donations Propter Nuptias were made. Indeed, such is
hardly the well-nigh incontrovertible evidence required in cases of this nature. The petitioners
must present proof of specific acts of ownership to substantiate his claim and cannot just offer
general statements which are mere conclusions of law than factual evidence of
possession. Moreso, Antonio was not even called to the witness stand to testify on the
17
contents of his Affidavit of Ownership, thus, making the affidavit hearsay evidence and its
probative value questionable. Accordingly, this affidavit must be excluded from the judicial
proceedings being inadmissible hearsay evidence.
Furthermore, the said affidavit was executed by Antonio only a day before the subject parcel of
land was sold to the petitioners. The trial court should have considered this in evaluating the
18
value of the said affidavit in relation to the ownership of the subject parcel of land. The trial
court's reliance on the Affidavit of Ownership executed by Antonio that the entire Lot No. 1633
was co- owned by Felipe and his siblings, Eladia, Estanislao, Maria, Severino and Tomasa is
misplaced, considering that nothing on record shows the relationship between Felipe and his
supposed legal heirs. It also indicates the fact that there is no evidence showing Felipe
predeceasing all his supposed siblings. Moreover, no other piece of evidence was ever
19
presented to prove that Lot No. 1633 was ever subdivided. In fact, the petitioners admitted that
the subject lot has always been declared for taxation purposes in the name of Felipe and that
the Spouses Ballesteros or the siblings of Felipe have never declared the same for taxation
purposes in their names.
While the petitioners submitted official receipts and tax declarations to prove payment of taxes,
nowhere in the evidence was it shown that Spouses Ballesteros dEclared the subject parcel of
land in their name for taxation purposes or paid taxes due thereon. True, a tax declaration by
itself is not sufficient to prove ownership. Nonetheless, it may serve as sufficient basis for
inferring possession. In fact, what the petitioners presented as their pieces of evidence are
20
receipts and tax declarations which they, as the new owners of the subject parcel of land, have
paid. Thus, the petitioners could not also rely on these tax declarations and receipts because
those are of recent vintage and do not reflect the fact that their predecessors-in-interest have
been paying realty taxes for the subject parcel of land.
Be that as it may, the rights of the respondents as owners of Lot No. 1633 were never
alienated from them despite the sale of the subject parcel of land by the Spouses Ballesteros
to the petitioners nor does the fact that the petitioners succeeded in paying the real property
taxes of the subject parcel of land. Besides, it seems that the petitioners knew of the fact that
they did not have a title to the subject parcel of land and could not, therefore, have validly
registered the Same, because of the respondents' possession of the entire property.
The respondents also presented the following pieces of evidence: (1) old certified photocopies
of declarations of real property and original copy of tax receipts from year 1921 to 1944 in the
name of Felipe, covering payments by the latter for Lot No. 1633 from which the subject parcel
of land was taken; (2) original copy of tax receipts from year 1961 to year 1989 in the name of
21
the respondents' father Paterno, covering payments by the latter for Lot No. 1633; (3) original
22
copy of tax receipt dated July 21, 2004 in the name of Isagani, covering payments by the latter
for Lot No. 1633 ; (4) original copy of the Certification issued by the Municipal Treasurer of
23
Sarrat, Ilocos Norte that Lot No. 1633 covered by Tax Declaration No. 03-001-00271 declared
in the name of Felipe is not delinquent in the payment of realty taxes. 24
Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, as in the instant case, they are good indicia of possession in the concept of owner,
for no one in his right mind would be paying taxes for a property that is not in his actual or
constructive possession. They constitute evidence of great weight in support of the claim of
25
title of ownership by prescription when considered with the actual possession of the property
by the applicant.26
Indeed, the respondents' presentation of the tax declarations and tax receipts which all are of
ancient era indicates possession in the concept of an owner by the respondents and their
predecessors-in-interests. The tax declarations in the name of Paterno take on great
significance because the respondents can tack their claim of ownership to that of their father. It
is worthy to note that the respondents' father Paterno to whom they inherited the entire Lot No.
1633 paid the taxes due under his name from 1961 to 1989; and subsequently, the
respondents paid the taxes due after the death of Paterno in 2003. Granting without admitting
27
that Felipe's possession of Lot No. 1633 cannot be tacked with the respondents' possession,
the latter's possession can be tacked with that of Paterno. Thus, from 1961 to the time of the
filing of the quieting of title by the petitioners in 2003, the respondents have been in possession
of the entire Lot No. 1633 in the concept of an owner for almost 42 years. This period of time is
sufficient to vest extraordinary acquisitive prescription over the property on the respondents. As
such, it is immaterial now whether the respondents possessed the property in good faith or not.
Admittedly, the respondents built their house at the western portion of Lot No: 1633, and
Isagani has declared that the eastern part was their family's garden. Thus, it was fenced with
bamboo and was planted with banana trees and different vegetables. Clearly, there is no doubt
that the respondents did not only pay the taxes due for the whole Lot No. 1633, in which the
eastern portion is a part, but rather, the respondents were able to prove that they have
possession of the whole lot.
While the findings of the CA that the petitioners were a buyer in bad faith is in accord with the
evidence on record, it must be pointed out, however, that they overlooked the fact that Lot No.
1633 is an unregistered • piece of land. The Court had already ruled that the issue of good faith
or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not
where the property is an unregistered land. One who purchases an unregistered land does so
at his peril. His claim of having bought the land in good faith, i.e. without notice that some other
person has a right to, or interest in, the property, would not protect him if it turns out that the
seller does not actually own the property. 28
All the same, the application of this doctrine will not
affect the outcome of this case.
Obviously, the petitioners cannot benefit from the deed of sale of the subject parcel of land,
executed by the Spouses Ballesteros in their favor, to support their claim of possession in good
faith and with just title. The Court noted that in Filomena's testimony, she even admitted that
the respondents own the bigger portion of Lot No. 1633. Thus, it is clear that the petitioners
29
chose to close their eyes to facts which should have put a reasonable man on his guard. The
petitioners failed to ascertain whether the Spouses Ballesteros were the lawful owner of the
subject parcel of land being sold. Far from being prudent, the petitioners placed full faith on the
Affidavit of Ownership that Antonio executed. Hence, when the subject parcel of land was
bought by the petitioners, they merely stepped into the shoes of the Spouses Ballesteros and
acquired whatever rights and obligations appertain thereto.
It is also worthy to note of the respondents' reaction when the petitioners tried to construct a
house in the subject parcel of land in 2002. Upon learning that a house was being built on the
eastern portion of Lot No. 1633, the respondents went to the barangay to file a
complaint. Clearly, this indicates the respondents' vigilance to protect their property. The Court
30
also notes that in the respondent's possession of the entire Lot No. 1633 for almost 42 years,
there was no instance during this time that the petitioners or their predecessors-in-interest, for
that matter, questioned the respondents' right over Lot No. 1633.
From the foregoing disquisitions, it is clear that the petitioners were not able to prove equitable
title or ownership over the subject parcel of land. Except for their claim that they merely
purchased the same from the Spouses Ballesteros, the petitioners presented no other
justification to disprove the ownership of the respop.dents. Since the Spouses Ballesteros had
no right to sell the subject parcel of land, the petitioners cannot be deemed to have been the
lawful owners of the same.
WHEREFORE, the petition is DENIED. The Decision dated July 17, 2007 and the Resolution
dated January 29, 2008 of the Court of Appeals. in CA-G.R. CV No. 87021 are AFFIRMED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson
LUCAS P. BERSAMIN FRANCIS H. JARDELEZA

ALFREDO BENJAMIN S. CAGUIOA *
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Chief Justice
Footnotes
*
Designated Fifth Member of the Third Division per Special Order No. 2417 dated
January 4, 2017.
1
Rollo, pp. 9-28.
2
Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices
Magdangal M. De Leon and Ricardo R. Rosario concurring; id. at 224-24 I.
3
Id. at 248.
4
Id. at 147-175.
5
Id. at 31-35.
6
Id. at 225-226.
7
Id. at 226.
8
Id. at 228.
9
Id.
10
Id. at 31-35.
11
Id. at 229.
12
Id. at 175.
13
Id. at 235-238.
14
Id. at 242-247.
15
Id. at 248.
Heirs of Delfin and Maria Tappa v. Heirs of Jose Bacud, Henry Calabazaron and
16
Vicente Malupeng, G.R. No. 187633, April 4, 2016.
17
Republic of the Philippines v. Carrasco, 539 Phil. 205, 216 (2006).
18
Rollo, pp. 235-236.
19
Id. at 238.
20
Republic of the Philippines v. Carrasco, supra note 17.
21
22
Id. at 153-160.
23
Id. at 161.
24
Id. at 162.
25
Larena v. Mapili, 455 Phil. 944, 953 (2003).
26
Barillo v. Court of Appeals, 284-A Phil. 576, 594 (1992).
27
28
Rural Bank ofSiaton (Negros Oriental), Inc. v. Macajilos, 527 Phil. 456, 471 (2006).
29
TSN, October 6, 2004, p. 1 I.
30
Id. at 91-92.
SPECIAL EN BANC
G.R. No. 218345, December 07, 2016
REPUBLIC OF THE PHILIPPINES, Petitioner, v. THE ESTATE OF VIRGINIA SANTOS,

REPRESENTED BY PACIFICO SANTOS, Respondent.
DECISION
MENDOZA, J.:
This is a Petition for Review on Certiorari seeking to reverse and set aside the May 22, 2015
Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 100999, which affirmed the April 5, 2013
Amended Order2of the Metropolitan Trial Court, Branch 74, Taguig City (MeTC) in LRC Case No. 326, a
land registration case under Section 14 of Presidential Decree (P.D.) No. 1529.
The Antecedents
On October 9, 2006, the Application for Land Registration3 of a parcel of land identified as Lot No.
10839-C (subject land) located at P. Burgos St., Sta. Ana, Taguig City, with an area of 3,942 square
meters and an assessed value of P82,400.00, was filed by respondent Estate of Virginia Santos
(respondent estate), through its administrator, Pacifico Santos (Pacifico). The subject land was a
subdivision of Lot No. 10839 described under survey Plan Csd-00-000352 (Subdivision Plan of Lot No.
10839, MCadm 590-D, Taguig Cadastral Mapping).
Together with its application for registration, respondent estate submitted the following documents:
(1) Letters of Administration4 showing that Pacifico was appointed as the administrator of the estate of
Virginia Santos (Virginia); (2) Oath of Office of Pacifico;5 (3) Subdivision Plan6 of Lot No. 10839,
MCadm 590-D, Taguig Cadastral Mapping (Csd-00-000352) with the annotation that the survey was
inside L.C. Map No. 2623 Proj. No. 27-B classified as alienable/disposable by the Bureau of Forest
Development on January 03, 1968; (4) Technical Description of Lot No. 10839-C, Csd-00-
000352;7 (5) Certification in Lieu of Surveyor's/Geodetic Engineer's Certificate 8issued by the Land
Survey Records Section, Department of Environment and Natural Resources (DENR), National Capital
Region; (6) Tax Declaration (T.D.) No. FL-013-01057;9 and (7) Extrajudicial Settlement of Estate by
Sole Heir of the Late Alejandro Santos,10 dated March 27, 1975.
Respondent estate alleged that the late Virginia was the only child and heir of Alejandro Santos
(Alejandro), who was the owner of the subject land during his lifetime. It further asserted that on
March 27, 1975, or after Alejandro's death, Virginia executed an Extrajudicial Settlement of Estate by
Sole Heir of the Late Alejandro Santos (Extrajudicial Settlement) and appropriated the subject land for
herself. Respondent estate further alleged that Virginia, by her and through her predecessor-in-
interest, had been in open, continuous, exclusive, and adverse possession of the property in the
concept of owner for more than thirty (30) years. 11
On October 9, 2006, the MeTC issued a notice of hearing setting the case for initial hearing on
February 7, 2007.12
On April 30, 2007, petitioner Republic of the Philippines (Republic), through the Office of the Solicitor
General (OSG), filed its Opposition13 to the Application, raising the following grounds: that neither the
applicant nor the predecessors-in-interest of Virginia had been in open, continuous, exclusive, and
notorious possession and occupation of the subject land for a period of not less than thirty (30) years;
that the tax declarations and/or tax payment receipts attached to the application did not constitute
competent and sufficient evidence of a bona fide acquisition of the land applied for; that the claim of
ownership in fee simple on the basis of a Spanish title or grant could no longer be availed of by the
applicant; and that the subject land was a portion of the public domain belonging to the Republic and
not subject to private appropriation.
On July 12, 2007, the Land Registration Authority (LRA) submitted its Report14 stating that the subject
property, as plotted, did not appear to overlap with any previously plotted decreed properties and that
it was not in a position to verify whether or not the aforesaid land was already covered by a land
patent and previously approved isolated surveys.
Thereafter, trial ensued.
To support its allegation of possession and occupation, respondent estate presented Romualdo B.
Flores (Romualdo) who testified that Virginia owned the subject land; that he had been tilling the land
since 1970; that his father, Sixto Cuevas Flores (Sixto), tilled the land for Alejandro even before the
Japanese occupation in 1941; and that he knew this for a fact as he was already nine (9) years old
and attained the age of reason at that time. Respondent estate also offered in evidence several tax
declarations covering Lot No. 10839, the earliest of which was T.D. No. 6532 issued on August 19,
1949.15
The MeTC Ruling
In its August 31, 2011 Decision16 the MeTC denied respondent estate's application for registration of
the subject land. It opined that respondent estate failed to present sufficient evidence to establish its
claim of possession and ownership over the subject land. The MeTC reasoned that mere casual
cultivation of portions of the subject land did not constitute sufficient basis for a claim of ownership. It
did not give much weight either to the tax declarations offered in evidence as it stated that these
documents were mere indication of claim of ownership and not ownership itself. 17
The MeTC added that respondent estate failed to prove the alienable and disposable character of the
subject land. It opined that the certification at the dorsal portion of the survey plan was not the kind
of evidence contemplated in an application for original registration of title to land. The decretal portion
of the decision, thus, reads: ChanRoblesVirtualawlibrary
WHEREFORE, all premises considered, the instant application for registration of land filed by the Estate
of Virginia Santos represented by Pacifico S. Santos, is hereby denied.
SO ORDERED.18
On September 16, 2011, respondent estate filed its Motion for Reconsideration (With Alternative
Motion for New Trial).19 On February 24, 2012, the MeTC granted the motion and allowed respondent
estate to present further evidence in support of its application. In granting the motion, the MeTC
explained that respondent committed mistake or excusable negligence which ordinary prudence could
not have guarded against xxx."20
Respondent estate presented, among others, Felino Flores (Felino), who, through his judicial
affidavit,21testified that he had been tilling the subject land for Virginia and her estate since 1979; that
before him, his father, Romualdo, tilled the land from 1969 until he took over in 1979; that before his
father, his grandfather, Sixto, tilled the land even before the Second World War; and that such claim
was an accepted fact in their family history.
On April 5, 2013, the MeTC issued the Order22 granting the subject application. In completely
reversing itself, the trial court stated that the tax declarations submitted by respondent estate and the
certification appearing at the dorsal portion of the survey plan of Lot No. 10839, showing that the land
was disposable and alienable, were already sufficient to establish respondent estate's claim over the
property as well as the alienable and disposable character of the subject land.
On the same day, the MeTC issued the Amended Order 23 correcting the dispositive portion of the
earlier order where the area of the subject property was omitted: ChanRoblesVirtualawlibrary
WHEREFORE, all premises considered, this Court hereby confirms the title of applicant ESTATE OF
VIRGINA M. SANTOS, represented herein by the duly appointed administrator, PACIFICO M. SANTOS,
Filipino, of legal age, married to Priscilla Santos and a resident of No. 93 P. Mariano Street, Ususan,
Taguig City over the subject parcel of land designated as Lot 10839-C, as shown on subdivision plan
Csd-00-000352, being a portion of Lot 10839, MCadm-590-D, Taguig Cadastral Mapping, situated at
Barangay Sta. Ana, Taguig City, Metro Manila consisting of Three Thousand Nine Hundred Forty
Two (3,942) Square Meters, more or less and hereby order the registration thereof in its
name.
After finality of this Decision and upon payment of the corresponding taxes due on the said lot, let an
Order for the issuance of decree of registration be issued.
SO ORDERED.24 [Emphasis and underscoring in the original]
Aggrieved, the Republic, through the OSG, elevated an appeal to the CA. 25 cralawred
The CA Ruling
In its assailed Decision, dated May 22, 2015, the CA dismissed the Republic's appeal and affirmed the
Amended Order, dated August 5, 2013 of the MeTC. The appellate court noted that the cadastral
survey in this case was the same cadastral survey in the case of Natividad Sta. Ana Victoria vs.
Republic26 (Sta. Ana Victoria), wherein the Court granted the application for registration of property.
The CA concluded that it could not take a view contrary to the ruling in the aforesaid case. It also
concurred with the trial court that the DENR certification at the dorsal portion of the subdivision plan
of Lot No. 10839 was sufficient evidence to prove the character of Lot No. 10839-C as alienable and
disposable.
The appellate court further ratiocinated that the alleged discrepancies in the area of the property
applied for could be explained by the fact that the subject land was a subdivision of Lot No. 10839. It
also found that respondent estate was able to prove its open, continuous, exclusive, and notorious
possession in the concept of owner. Relying again on Sta. Ana Victoria, the CA held that a tax
declaration issued in 1949 could be accepted as proof of open, continuous, exclusive, and notorious
possession and occupation in the concept of an owner. The dispositive portion of the said decision
states:ChanRoblesVirtualawlibrary
WHEREFORE, the appeal is DISMISSED. The Amended Order dated April 5, 2013 of the Regional Trial
Court (sic), Branch 74, Taguig City in LRC Case No. 326, is AFFIRMED.
SO ORDERED.27
Hence, this petition, anchored on the following
GROUNDS
I
THE COURT OF APPEALS GRAVELY ERRED IN TAKING "JUDICIAL NOTICE" OF A "CADASTRAL
SURVEY'' SUBMITTED IN A DIFFERENT CASE ENTITLED "STA. ANA VICTORIA VS. REPUBLIC"
TO PROVE, DURING THE APPEAL PROCEEDINGS, THE DATE WHEN THE SUBJECT LAND WAS
FIRST DECLARED ALIENABLE AND DISPOSABLE.
II
THE COURT OF APPEALS GRAVELY ERRED IN GRANTING THE SUBJECT APPLICATION FOR
LAND REGISTRATION DESPITE THE EXISTENCE OF DOUBT IN THE TOTAL AREA OF THE
PARCEL OF LAND BEING APPLIED FOR REGISTRATION.
III
THE COURT OF APPEALS GRAVELY ERRED IN RELYING ON THE STA. ANA VICTORIA CASE
AND IN UTTERLY DISREGARDING THAT THERE IS ABSENCE OF EVIDENCE TO PROVE
POSSESSION AND OCCUPATION BY RESPONDENT OR ITS PREDECESSORS-IN-INTEREST
SINCE JUNE 12, 1945, OR EARLIER.28
The Republic argues, first, that the CA gravely erred in its over-reliance on Sta. Ana Victoria. It posits
that although the CA could take judicial notice of Sta. Ana Victoria, it could not hastily rule that the
subject land was also alienable and disposable based merely on the allegation that the subject
property and the property registered in the said case belonged to the same cadastral survey. Second,
the Republic asserts that respondent estate failed to establish its open, exclusive, continuous and
notorious possession and occupation under a bona fide claim of ownership over the subject land since
June 12, 1945, or earlier. It contends that the tax declarations submitted by respondent estate were
considered not proofs of ownership. Moreover, the earliest tax declaration submitted by respondent
estate was for the year 1949, short of the required possession under the law. Lastly, the Republic
insists that respondent estate's witnesses merely gave shady statements on the supposed ownership
of Virginia and Alejandro, without showing any manifestation of acts of dominion over the property.
In its Comment,29 respondent estate countered that judicial decisions of this Court, including the
findings of facts which were integral parts thereof, formed part of the legal system which all other
courts were bound to follow and be familiar with. It asserted that since the subject land emanated
from the same cadastral survey declared as alienable and disposable in Sta. Ana Victoria, the subject
property must likewise be declared as alienable and disposable. It further advanced that the contents
of the certification at the dorsal portion of the survey plan and the technical description of the
property enjoyed the presumption of their accuracy.
With regard to possession and occupation, respondent estate averred that its witnesses testified on
the identity of the property, the crops planted thereon, and the three generations of tenancy
agreement involving the subject land. It claimed that these testimonies were further supplemented by
the tax declarations it presented, which showed that Virginia and her predecessor-in-interest were in
possession of the subject land for more than fifty (50) years.
In its Reply,30 the Republic reiterated its position that respondent estate failed to adduce sufficient
evidence of possession and occupation on or before June 12, 1945; and that the appellate court erred
in concluding that the subject land was declared alienable and disposable based merely on the facts
sustained in Sta. Ana Victoria.
The Court's Ruling
Essentially, the Court is asked to resolve the issue of whether the CA erred in granting respondent
estate's application for registration despite its failure to comply with the requirements for original
registration of title to/and under Section 14 of P.D. No. 1529.
At the onset, the Court notes that there was some confusion as to what law on which the application
for registration of the subject land was based. As per examination of respondent estate's application,
it would seem that the basis for their application was Section 14(2) of P.D. No. 1529 considering its
allegation of possession and occupation in the concept of owner for more than thirty (30) years. The
MeTC, and later the appellate court, however, granted the application under Section 14(1) of the same
law making reference to June 12, 1945, or prior thereto, as the earliest date of possession and
occupation. Thus, the Court deems it proper to discuss respondent estate's application for registration
of title to the subject property vis-a-vis the provisions of Section 14(1) and (2) of P.D. No. 1529.
Respondent Estate Failed to Comply with the

Requirements under Section 14(1) of
P.D. No. 1529
In Republic of the Philippines vs. Cortez,31 the Court explained that applicants for original registration
of title to land must first establish compliance with the provisions of either Section 14(1) or Section
14(2) of P.D. No. 1529. Section 14(1) provides that: ChanRoblesVirtualawlibrary
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: ChanRoblesVirtualawlibrary
(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.
Under Section 14(1), applicants for registration of title must sufficiently establish the following: first,
that the land or property forms part of the disposable and alienable lands of the public domain;
second, that the applicant and his predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of the same; and third, that it is under a bona fide claim of
ownership since June 12, 1945, or earlier.
The first requisite of Section 14(1) only entails that the property sought to be registered be alienable
and disposable at the time of the filing of the application for registration. 32
In this case, to prove that the subject land formed part of the alienable and disposable lands of the
public domain, respondent estate relied on the annotation on the subdivision plan of Lot No. 10839
and on the certification issued by Rodelina M. De Villa, Forester II of the Forest Management Services
(FMS) of the DENR, which both stated that the subject land was verified to be "within the alienable
and disposable land under Project No. 27-B, Taguig Cadastral Mapping as per LC Map No. 2623." 33
These pieces of evidence, however, would not suffice. The present rule is that to prove the alienability
and disposability of the land sought to be registered, an application for original registration must be
accompanied by (1) a City Environment and Natural Resources Office (CENRO) or Provincial
Environment and Natural Resources Officer (PENRO) Certification; and (2) a copy of the original
classification approved by the DENR Secretary and certified as a true copy by the legal custodian of
the official records.34Clearly, the annotation on the subdivision plan and the certification from the FMS
fall short of these requirements.35
The judicial notice by the appellate court of the cadastral survey submitted in Sta. Ana Victoria will not
cure respondent estate's shortcomings.
In Spouses Latip vs. Chua,36 it was ruled that a court cannot take judicial notice of any fact which, in
part, was dependent on the existence or non-existence of a fact of which the court has no constructive
knowledge.37
In this case, in concluding that the subject land formed part of the alienable and disposable lands of
the public domain, the CA, in effect, assumed and took judicial notice that it was located within L.C.
Map No. 2623. This is, however, erroneous considering that the CA had no constructive knowledge as
to the location of the subject land and the technical boundaries of L.C. Map No. 2623. Furthermore,
the CA erred in assuming the identity and location of the subject land because such matter was still
under dispute. In fact, the Republic relentlessly raised this issue even during the trial arguing that the
identity of the land in question was doubtful. This position was further reiterated by the Republic in its
Reply when it argued that respondent estate failed to prove that the subject property was actually
covered by the same cadastral survey submitted in Sta. Ana Victoria.
Accordingly, the CA erred in taking judicial notice of the identity and location of subject land. Its
declaration that the subject land was alienable and disposable based merely on the declaration in Sta.
Ana Victoria was erroneous.
Proof of Possession
Aside from the alienable and disposable character of the land sought to be registered, the applicant
must also prove that he/she and/or his/her predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership
since June 12, 1945, or earlier. Possession is open when it is patent, visible, apparent, notorious, and
not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or occasional. It is
exclusive when the adverse possessor can show exclusive dominion over the land and an
appropriation of it to his own use and benefit. And it is notorious when it is so conspicuous that it is
generally known and talked of by the public or the people in the neighborhood. 38 Respondent estate in
this case also failed to prove this requirement.
Respondent estate presented several tax declarations in the name of Virginia and Alejandro. The
earliest of these tax declarations, however, dates back to 1949 only, short of the requirement that
possession and occupation under a bona fide claim of ownership should be since June 12, 1945 or
earlier.
Respondent also offered the testimonies of Romualdo and Felino to prove that Virginia's predecessor-
in-interest had been in possession and occupation under a bona fide claim of ownership since June 12,
1945. Romualdo testified as follows: ChanRoblesVirtualawlibrary
Atty. Valdez
Q.
At the time you started to farm the property, please describe the condition thereof?
A. It was being farmed and planted to rice, sir.
Q.
Who planted it with rice?
A.
My father, Sixto Cuevas Flores, sir.
Q.
Since when did your father start tilling the land?
A.
He started tilling the land even before the Japanese time in 1942?
Q.
How do you know?
A.
I have already reached the age of reason at the time being nine (9) years old in 1941, sir. 39
It needs to be pointed out, however, that in Republic vs. Remman Enterprises, Inc. 40 (Remman), the
Court held that for purposes of land registration under Section 14(1) of P.D. No. 1529, proof of
specific acts of ownership must be presented to substantiate the claim of open, continuous, exclusive,
and notorious possession and occupation of the land subject of the application. "Applicants for land
registration cannot just offer general statements which are mere conclusions of law rather than factual
evidence of possession. Actual possession consists in the manifestation of acts of dominion over it of
such nature as a party would actually exercise over his own property." 41
In a plethora of cases, the Court has repeatedly held that unsubstantiated claims of cultivation of land
do not suffice to prove open, continuous, exclusive, and notorious possession and occupation of the
public land applied for in the concept of an owner. In Remman, the Court denied the application for
original registration of title to land located in Taguig City as the testimony of the applicant's witness
lacked specifics as to the nature of the alleged cultivation. It was observed that: ChanRoblesVirtualawlibrary
Although Cerquena testified that the respondent and its predecessors-in-interest cultivated the subject
properties, by planting different crops thereon, his testimony is bereft of any specificity as to the
nature of such cultivation as to warrant the conclusion that they have been indeed in possession and
occupation of the subject properties in the manner required by law. There was no showing as to the
number of crops that are planted in the subject properties or to the volume of the produce harvested
from the crops supposedly planted thereon.42 (Underscoring supplied)
In Aranda vs. Republic of the Philippines,43 the Court held that mere statements regarding cultivation
of land would not establish possession in the concept of an owner, stating that: ChanRoblesVirtualawlibrary
X x x And even assuming that Lucio actually planted rice and corn on the land, such statement is not
sufficient to establish possession in the concept of owner as contemplated by law. Mere casual
cultivation of the land does not amount to exclusive and notorious possession that would give rise to
ownership. Specific acts of dominion must be clearly shown by the applicant. 44 (Underscoring supplied)
In Republic vs. Candy Maker, Inc.,45 the Court did not give credit to the unsupported claim of the
respondent-applicant's predecessor-in-interest that he and his father cultivated the property applied
for since 1937 by planting palay during the rainy season and vegetables during the dry season. The
Court emphasized the importance of showing specific acts of dominion by the applicant or his
predecessors-in-interest, to wit:ChanRoblesVirtualawlibrary
Fourth. When he testified on October 5, 2001, Antonio Cruz declared that he was "74 years old." He
must have been born in 1927, and was thus merely 10 years old in 1937. It is incredible that, at that
age, he was already cultivating the property with his father. Moreover, no evidence was presented to
prove how many cavans of palay were planted on the property, as well as the extent of such
cultivation, in order to support the claim of possession with a bona fide claim of ownership.
(Underscoring supplied)
Similarly in this case, assuming the veracity of the claim that Alejandro and/or Virginia cultivated the
subject land through Romualdo and Sixto, the Court finds that the same could only be considered as a
mere casual cultivation because his testimony was bereft of any specificity to warrant the conclusion
that Alejandro and/or Virginia had been indeed in possession and occupation of the subject land.
Romualdo's statements failed to show the nature of the cultivation and the volume of crops planted
and harvested on the property. Respondent estate, therefore, failed to satisfy the requisite exclusivity
and notoriety of the possession and occupation of the property because exclusive dominion and
conspicuous possession over the subject land were not established.
Felino's testimony during the new trial of this case was likewise insufficient to prove the required
possession and occupation since June 12, 1945 or earlier. Felino's pertinent testimony in his judicial
affidavit was as follows:ChanRoblesVirtualawlibrary
Atty. Valdez
Q.
Since when did you start tilling the property?
A.
In 1979 at the age of 17.
Q.
Before you, who cultivated the property, if any?
A.
Romualdo Flores, my father then as tenant of the owner.
Q.
Since when did Romualdo cultivate or till the property?
A.
Since 1969.
Q.
As tenant, up to when did your father till the property?
A.
Up to 1979 when I took over.
Q.
In 1969 when Romualdo took over, who was cultivating or tilling the property, if any?
A.
Sixto Flores, his father and my grandfather.
Q.
Since when did Sixto start to cultivate the property?
A.
Before the Second World War. Q. How do you know when you were born only in 1962?
A.
It is an accepted fact in our family history. I heard my parents and grandparents talk about it very,
very often. Everyone assumes it to be true. Besides during the days of my grandfather Sixto, there
was not much source of livelihood of the people but the farm. Many people worked or derived their
income from the farms.
Clearly, Felino failed to convincingly show that he had personal knowledge of the ownership or
possession over Lot No. 10839-C on or before June 12, 1945 having been born only in 1962. He also
talked of how his father and grandfather cultivated the land based on their family stories which were
not substantiated. Hence, the above testimony of Felino does not deserve any credit for being
hearsay.
From all the foregoing, the subject land cannot be registered in the name of Virginia and/or her estate
under Section 14(1) of P.D. No. 1529 for respondent estates failure to prove its alienable and
disposable character, and its possession and occupation from June 12, 1945 or earlier.
Respondent Failed to Comply with the

Requirements under Section 14(2) of
P.D. No. 1529
The subject land cannot also be registered under Section 14(2) of P.D. No. 1529, which
states: ChanRoblesVirtualawlibrary
Those who have acquired ownership of private lands by prescription
(2)
under the provision of existing laws.
In Heirs of Mario Malabanan vs. Republic46 (Malabanan), the Court explained that when Section 14(2)
of P.D. No. 1529 stated that persons "who have acquired ownership over private lands by prescription
under the provisions of existing laws," it unmistakably referred to the Civil Code as a valid basis for
the registration of lands. The Civil Code is the only existing law that specifically allows the acquisition
of private lands by prescription, including patrimonial property belonging to the State.
Section 14(2) explicitly refers to the principles on prescription, as set forth in the Civil Code. In this
regard, the Civil Code makes it clear that patrimonial property of the State may be acquired by private
persons through prescription. This is brought about by Article 1113, which provides that all things
which are within the commerce of man are susceptible to prescription, and that property of the State
or any of its subdivisions not patrimonial in character shall not be the object of prescription. 47
This does not necessarily mean, however, that when a piece of land is declared alienable and
disposable, it can already be acquired by prescription. In Malabanan, this Court ruled that declaration
of alienability and disposability was not enough — there must be an express declaration that the
public dominion property was no longer intended for public service or the development of the national
wealth or that the property had been converted into patrimonial, thus: ChanRoblesVirtualawlibrary
(2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil
Code, prescription is recognized as a mode of acquiring ownership of patrimonial property. However,
public domain lands become only patrimonial property not only with a declaration that these are
alienable or disposable. There must also be an express government manifestation that the property is
already patrimonial or no longer retained for public service or the development of national wealth,
under Article 422 of the Civil Code. And only when the property has become patrimonial can the
prescriptive period for the acquisition of property of the public dominion begin to run.48 (Underscoring
supplied)
In this case, and as already stated, respondent estate merely relied on the annotation on the
subdivision plan of Lot No. 10839 and on the certification issued by FMS-DENR which certified the
subject land to be "within the alienable and disposable land under Project No. 27-B, Taguig Cadastral
Mapping as per LC Map No. 2623." No certification or any competent evidence, however, was ever
presented to the effect that the subject land, or even the lands covered by L.C. Map No. 2623, were
no longer intended for public service or for the development of the national wealth pursuant to Article
422 of the Civil Code. The classification of the subject property as alienable and disposable land of the
public domain does not change its status as property of the public dominion under Article 420(2) of
the Civil Code. Thus, it is insusceptible to acquisition by prescription. Hence, respondent estate failed
to prove that acquisitive prescription had begun to run against the State, much less that it had
acquired title to the subject property by virtue thereof.
In fine, respondent failed to satisfy all the requisites for registration of title to land under either
Sections 14(1) or (2) of P.D. No. 1529. Respondent's application for original registration of imperfect
title over Lot No. 10839-C must be denied.
Without Prejudice
This denial, however, is without prejudice. As the FMS-DENR certified the subject land to be "within
the alienable and disposable land under Project No. 27-B, Taguig Cadastral Mapping as per LC Map
No. 2623," the respondent must be given the opportunity to present the required evidence. This is but
fair and reasonable because a property within an alienable and disposable land must be deemed to be
of the same status and condition. As earlier stated, however, the respondent must prove that the
subject property was actually covered by the same cadastral survey and that they and their
predecessors in interest were in possession and ownership since June 12, 1945 or earlier.
WHEREFORE, the petition is GRANTED. The May 22, 2015 Decision of the Court of Appeals in CA-
G.R. CV No. 100999 is hereby REVERSED and SET ASIDE.
The Application for Registration of the Estate of Virginia Santos in LRC Case No. 326 is DENIED,
without prejudice.
SO ORDERED.
Carpio, (Chairperson), Brion, Del Castillo, and Leonen, JJ., concur.
Endnotes:
1
Penned by Associate Justice Agnes Reyes-Carpio with Associate Justice Rosmari D. Carandang and
Associate Justice Maria Elisa Sempio Diy, concurring; rollo, pp. 49-57.
2
Penned by Presiding Judge Donna B. Pascual; id. at 141-147.
3
Records, pp. 1-4.
4
Id. at 5.
5
Id. at 6.
6
Id. at 7.
7
Id. at 8.
8
Id. at 9.
9
Id. at 10-11
10
Id. at 12-19.
11
Id. at 2.
12
Id. at 20.
13
Id. at 188-189.
14
Id. at 197.
15
Id. at 242.
16
Penned by the Presiding Judge Maria Paz R. Reyes-Yson; id. at 294-302.
17
Id. at 299.
18
Id. at 301.
19
Id. at 303-306.
20
Id. at 321-322.
21
Id. at 331-334.
22
Id. at 361-367.
23
Id. at 368-374.
24
Id. at 373-374.
25
cralawred Id. at 375-376.
26
666 Phil. 519 (2011).
Rollo, p. 56.
27
28
Id. at 26.
29
Id. at 223-227.
30
Id. at 235-243.
31
726 Phil. 212 (2014).
Naguit v. Republic, 489 Phil. 405, 414 (2005).

32
Rollo, pp. 203.

33
Republic v. De Guzman Vda. De Joson, G.R. No. 163767, March 10, 2014, 718 SCRA 228.
34
Republic v. Sese, G.R. No. 185092, June 4, 2014, 724 SCRA 592; Republic v. Santos, G.R. No.
35
191516, June 4, 2014, 724 SCRA 660.
36
619 Phil. 155 (2009).
37
Id. at 166.
Republic v. Gielczyk, 720 Phil. 385, 403 (2013).

38
39
TSN, March 28, 2007, pp. 5-6.
40
727 Phil. 608 (2014).
41
Id. at 625.
42
Id. at 625-626.
43
671 Phil. 651, 660 (2011).
44
Id. at 660-661.
45
525 Phil. 358, 380 (2006).
SECOND DIVISION
G.R. No. 193618, November 28, 2016
HEIRS OF LEOPOLDO DELFIN AND SOLEDAD DELFIN, NAMELY EMELITA D. FABRIGAR AND
LEONILO C. DELFIN, Petitioners, v. NATIONAL HOUSING AUTHORITY, Respondent.
DECISION
LEONEN, J.:
Under Commonwealth Act No. 141, a claimant may acquire alienable and disposable public land upon
evidence of exclusive and notorious possession of the land since June 12, 1945. The period to acquire
public land by acquisitive prescription under Presidential Decree No. 1529 begins to run only after the
promulgation of a law or a proclamation by the President stating that the land is no longer intended
for public use or the development of national wealth.
This resolves a Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure
praying that the assailed February 26, 2010 Decision2 and July 2, 2010 Resolution3 of the Court of
Appeals in CA-G.R. CV No. 80017 be reversed, and that the May 20, 2002 Decision 4 of the Regional
Trial Court in Civil Case No. II-1801 be reinstated.
The Regional Trial Court's May 20, 2002 Decision awarded compensation to Leopoldo and Soledad
Delfin (Delfin Spouses) for an Iligan City property subsequently occupied by respondent National
Housing Authority.
The assailed Court of Appeals Decision reversed the Regional Trial Court's May 20, 2002 Decision and
dismissed the Delfin Spouses' complaint seeking compensation. The assailed Court of Appeals
Resolution denied their Motion for Reconsideration.
In a Complaint for "Payment of Parcel(s) of Land and Improvements and Damages" 5 the Delfin
Spouses claimed that they were the owners of a 28,800 square meter parcel of land in Townsite,
Suarez, Iligan City (the "Iligan Property").6 They allegedly bought the property in 1951 from Felix
Natingo and Carlos Carbonay, who, allegedly, had been in actual possession of the property since time
immemorial.7 The Delfin Spouses had been declaring the Iligan Property in their names for tax
purposes since 1952,8 and had been planting it with mangoes, coconuts, corn, seasonal crops, and
vegetables.9
They farther alleged that, sometime in 1982, respondent National Housing Authority forcibly took
possession of a 10,798 square meter portion of the property.10 Despite their repeated demands for
compensation, the National Housing Authority failed to pay the value of the property. 11 The Delfin
Spouses thus, filed their Complaint.12
They asserted that the property's reasonable market value was not less than P40 per square
meter13 and that its improvements consisting of fruit-bearing trees should be valued at P13,360.00 at
the time of taking.14 They similarly claimed that because the National Housing Authority occupied the
property, they were deprived of an average net yearly income of P10,000.00. 15
In its Answer,16 the National Housing Authority alleged that the Delfin Spouses' property was part of a
military reservation area.17 It cited Proclamation No. 2151 (actually, Proclamation No. 2143, the
National Housing Authority made an erroneous citation) as having supposedly reserved the area in
which property is situated for Iligan City's slum improvement and resettlement program, and the
relocation of families who were dislocated by the National Steel Corporation's five-year expansion
program.18
According to the National Housing Authority, Proclamation No. 2151 also mandated it to determine the
improvements' valuation.19 Based on the study of the committee it created, the value of the property
was supposedly only P4.00 per square meter, regardless of the nature of the improvements on it. 20
It emphasized that among all claimants, only the Delfin Spouses and two others remained unpaid
because of their disagreement on the property's valuation.21
The National Housing Authority failed to appear during the pre-trial conference. 22 Upon the Delfin
Spouses' motion, the Regional Trial Court declared the National Housing Authority in default. 23 The
case was set for the ex-parte reception of the Delfin Spouses' evidence. 24
On May 20, 2002, the Regional Trial Court rendered a Decision in favor of the Delfin Spouses. 25 The
cralawred
dispositive portion of the Decision read:

WHEREFORE, premises considered, and by virtue of the existence of preponderance of evidence,

the Court hereby enters a judgment in favor of spouses-plaintiffs Leopoldo Delfin and Soledad
Delfin against defendant National Housing Authority, its agents or representative/s ordering to pay
the former the following, to wit:
1) P400,000.00 representing the reasonable market value of a portion

of the land taken by the defendant containing an area of 10,000
square meters at the rate of P40.00 per square meters plus legal
interest per annum from the filing in Court of the complaint until fully
paid;
2) P13,360.00 representing the value of the permanent improvements

that were damaged and destroyed plus legal interest per annum
from the time of the filing of this case until fully paid;
3) P10,000.00, representing attorney's fees;
4) The costs of this suit.26

The Regional Trial Court stated that it had no reason to doubt the evidence presented by the Delfin
Spouses:
On this regards (sic), the Court finds no reason to doubt the veracity of the plaintiff['s evidence],
there being none to controvert the same. If said. evidence did not ring true, the defendant should
have and could have easily destroyed their probatory value. Such indifference can only mean that
defendant had not (sic) equitable rights to protect or assert over the disputed property together with
all the improvements existing thereon. This, the defendant did not do so and the Court finds no cogent
reasons to disbelieve or reject the plaintiffs categorical declarations on the witness stand under a
solemn oath, for the same are entitled to full faith and credence. Indeed, if the defendant National
Housing Authority have been blinded with the consequence of their neglect and apathy, then
defendant have no right to pass on to the spouses-plaintiffs of their negligence and expect the Court
to come to their rescue. For it is now much too late in the day to assail the decision which has become
final and executory.27ChanRoblesVirtualawlibrary
The National Housing Authority filed a Motion for Reconsideration, but this was denied in the Regional
trial Court's September 10, 2002 Resolution.28
On the National Housing Authority's appeal, the Court of Appeals rendered the assailed February 26,
2010 Decision reversing the Regional Trial Court:29
WHEREFORE, the appeal is GRANTED. The assailed Decision is REVERSED and SET ASIDE.
Consequently, appellees' complaint for compensation is DISMISSED for lack of merit. The property
taken by appellant NHA and for which compensation is sought by appellees is hereby DECLARED land
of the public domain.30 ChanRoblesVirtualawlibrary
The Court of Appeals ruled that the characterization of the property is no longer an issue because the
National Housing Authority already conceded that the property is disposable public land by citing
Proclamation No. 2151, which characterized the property as "a certain disposable parcel of public
land."31However, the Delfin Spouses supposedly failed to establish their possession of the property
since June 12, 1945, as required in Section 48(b) of the Public Land Act. 32
During the pendency of their petition before the Court of Appeals. Both Leopoldo and Soledad Delfin
both passed away. Lepoldo passed away on February 3, 2005 and Soledad on June 22, 2004. Their
surviving heirs, Emelita D. Fabrigar and Leonilo C. Delfin filed a Motion for Substitution before the
Court of Appeals, which was not acted upon.33
In its assailed July 2, 2010 Resolution,34 the Court of Appeals denied the Motion for Reconsideration
filed by the heirs of the Delfin Spouses.
Hence, this petition which was filed by the surviving heirs of the Delfin Spouses, Emelita D. Fabrigar
and Leonilo C. Delfin (petitioners).35
For resolution is the issue of whether petitioners are entitled to just compensation for the Iligan City
property occupied by respondent National Housing Authority. chanroblesvirtuallawlibrary
The right to be justly compensated whenever private property is taken for public use cannot be
disputed. Article III, Section 9 of the 1987 Constitution states that
Section 9. Private property shall not be taken for public use without just compensation. ChanRoblesVirtualawlibrary
The case now hinges on whether the petitioners and their predecessors-in-interests have been in
possession of the Iligan Property for such duration and under such circumstances as will enable them
to claim ownership.
Petitioners argue that they and their predecessors-in-interests' open, continuous, exclusive, and
notorious possession of the Iligan Property for more than 30 years converted the property from public
to private.36 They then posit that they acquired ownership of the property through acquisitive
prescription under Section 14(2) of Presidential Decree No. 1529.37
Petitioners also assert that the Court of Appeals disregarded certifications and letters from
government agencies, which support their claims, particularly, their and their predecessors-in-
interest's possession since June 12, 1945.38
Respondent counters, citing the Court of Appeals Decision, that petitioners cannot rely on'Section
14(2) of Presidential Decree No. 1529 because the property was not yet declared private land when
they filed their Complaint.39 chanroblesvirtuallawlibrary
II
Petitioners are erroneously claiming title based on acquisitive prescription under Section 14(2) of
Presidential Decree No. 1529.
Section 14 reads in full:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an
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.
(2) Those who have acquired ownership of private lands by prescription

under the provision of existing laws.
(3) Those who have acquired ownership of private lands or abandoned

river beds by right of accession or accretion under the existing laws.
(4) Those who have acquired ownership of land in any other manner
provided for by law.
Where the land is owned in common, all the co-owners shall file the application jointly.
Where the land has been sold under pacto de retro, the vendor a retro may file an application for the
original registration of the land, provided, however, that should the period for redemption expire
during the pendency of the registration proceedings and ownership to the property consolidated in the
vendee a retro, the latter shall be substituted for the applicant and may continue the proceedings.
A trustee on behalf of his principal may apply for original registration of any land held in trust by him,
unless prohibited by the instrument creating the trust. [Emphasis supplied] ChanRoblesVirtualawlibrary
For acquisitive prescription to set in pursuant to Section 14(2) of Presidential Decree No. 1529, two
(2) requirements must be satisifled: first, the property is established to be private in character; and
second the applicable prescriptive period under existing laws had passed.
Property - such as land - is either of public dominion or private ownership. 40
"Land is considered of public dominion if it either: (a) is intended for public use; or (b) belongs to the
State, without being for public use, and is intended for some public service or for the development of
the national wealth."41 Land that belongs to the state but which is not or is no longer intended for
public use, for some public service or for the development of the national wealth, is patrimonial
property;42 it is property owned by the State in its private capacity. Provinces, cities, and
municipalities may also hold patrimonial lands.43
Private property "consists of all property belonging to private persons, either individually or
collectively,"44 as well as "the patrimonial property of the State, provinces, cities, and municipalities." 45
Accordingly, only publicly owned lands which are patrimonial in character are susceptible to
prescription under Section 14(2) of Presidential Decree No. 1529. Consistent with this, Article 1113 of
Civil Code demarcates properties of the state, which are not patrimonial in character, as being not
susceptible to prescription:
Art. 1113. All things which are within the commerce of men are susceptible of prescription, unless
provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the
object of prescription. ChanRoblesVirtualawlibrary
Contrary to petitioners' theory then, for prescription to be viable, the publicly-owned land must be
patrimonial or private in character at the onset. Possession for thirty (30) years does not convert it
into patrimonial property.
For land of the public domain to be converted into patrimonial property, there must be an express
declaration - "in the form of a law duly enacted by Congress or a Presidential Proclamation in cases
where the President is duly authorized by law"46 - that "the public dominion property is no longer
intended for public service or the development of the national wealth or that the property has been
converted into patrimonial."47
This Court's 2009 Decision in Heirs of Malabanan v. Republic48 explains:

Nonetheless, Article 422 of the Civil Code states that "[p]roperty of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the State".
It is this provision that controls how public dominion property may be converted into patrimonial
properly susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those
property "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" are public dominion property. For as long as the
property belongs to the State, although already classified as alienable or disposable, it remains
property of the public dominion if when * it is "intended for some public service or for the
development of the national wealth".
Accordingly, there must be an express declaration by the State that the public dominion property is no
longer intended for public service or the development of the national wealth or that the property has
been converted into patrimonial. Without such express declaration, the property, even if classified as
alienable or disposable, remains property of the public dominion, pursuant to Article 420 (2), and thus
incapable of acquisition by prescription. It is only when such alienable and disposable lands are
expressly declared by the State to be no longer intended for public service or for the development of
the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall
be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.49 ChanRoblesVirtualawlibrary
This was reiterated in this Court's 2013 Resolution in Heirs of Malabanan v. Republic:50
[W]hen public land is no longer intended for public service or for the development of the national
wealth, thereby effectively removing the land from the ambit of public dominion, a declaration of such
conversion must be made in the form of a law duly enacted by Congress or by a Presidential
proclamation in cases where the President is duly authorized by law to that effect. 51 ChanRoblesVirtualawlibrary
Attached to the present Petition was a copy of a May 18, 1988 supplemental letter to the Director of
the Land Management Bureau.52 This referred to an executive order, which stated that petitioners'
property was no longer needed for any public or quasi-public purposes:
That it is very clear in the 4th Indorsement of the Executive Secretary dated April 24, 1954 the portion
thereof that will not be needed for any public or quasi-public purposes, be disposed in favor of the
actual occupants under the administration of the Bureau of Lands (copy of the Executive Order is
herewith attached for ready reference)53 ChanRoblesVirtualawlibrary
However, a mere indorsement of the executive secretary is not the law or presidential proclamation
required for converting land of the public domain into patrimonial property and rendering it
susceptible to prescription. There then was no viable declaration rendering the Iligan property to have
been patrimonial property at the onset. Accordingly, regardless of the length of petitioners'
possession, no title could vest on them by way of prescription. chanroblesvirtuallawlibrary
III
While petitioners may not claim title by prescription, they may, nevertheless, claim title pursuant to
Section 48 (b) of Commonwealth Act No. 141 (the Public Land Act).
Section 48 enabled the confirmation of claims and issuance of titles in favor of citizens occupying or
claiming to own lands of the public domain or an interest therein. Section 48 (b) specifically pertained
to those who "have been in open, continuous, exclusive, and notorious possession and, occupation of
agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June
12, 1945":
Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain
or claiming to own any such lands or an interest therein, but whose titles have not been perfected
or completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor under the Land
Registration Act, to wit:
(b) Those who by themselves or through their predecessors-in-interest

have been in open, continuous, exclusive, and notorious possession
and, occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition or ownership, since June 12, 1945,
immediately preceding the filing of the application for confirmation
of title, except when prevented by war or force majeure. These shall
be conclusively presumed to have performed all the conditions
essential to a government grant and shall be entitled to a certificate
of title under the provisions of this chapter. (As amended by PD
1073.)
Section 48(b) of the Public Land Act therefore requires that two (2) requisites be satisfied before
claims of title to public domain lands may be confirmed: first, that the land subject of the claim is
agricultural land; and second, open, continuous, notorious, and exclusive possession of the land since
June 12, 1945.
The need for the land subject of the claim to have been classified as agricultural is in conformity with
the constitutional precept that "[a]lienable lands of the public domain shall be limited to agricultural
lands."54As explained in this Court's 2013 Resolution in Heirs of Malabanan v. Republic:
Whether or not land of the public domain is alienable and disposable primarily rests on the
classification of public lands made under the Constitution. Under the 1935 Constitution, lands of the
public domain were classified into three, namely, agricultural, timber and mineral. Section 10, Article
XTV of the 1973 Constitution classified lands of the public domain into seven, specifically, agricultural,
industrial or commercial, residential, resettlement, mineral, timber or forest, and grazing land, with
the reservation that the law might provide other classifications. The 1987 Constitution adopted the
classification under the 1935 Constitution into agricultural, forest or timber, and mineral, but added
national parks. Agricultural lands may be further classified by law according to the uses to which they
may be devoted. The identification of lands according to their legal classification is done exclusively by
and through a positive act of the Executive Department.
Based on the foregoing, the Constitution places a limit on the type of public land that may be
alienated. Under Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public
domain may be alienated; all other natural resources may not be.
Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial lands of the
State, or those classified as lands of private ownership under Article 425 of the Civil Code, without
limitation; and (b) lands of the public domain, or the public lands as provided by the Constitution, but
with the limitation that the lands must only be agricultural. Consequently, lands classified as forest or
timber, mineral, or national parks are not susceptible of alienation or disposition unless they are
reclassified as agricultural. A positive act of the Government is necessary to enable such
reclassification, and the exclusive prerogative to classify public lands under existing laws is vested in
the Executive Department, not in the courts. 55 ChanRoblesVirtualawlibrary
As the Court of Appeals emphasized, respondent has conceded that the Iligan property was alienable
and disposable land:
As to the first requirement: There was no need for appellees to establish that the property involved
was alienable and disposable public land. This characterization of the property is conceded by
[respondent] who cites Proclamation No. 2151 as declaring that the disputed property was a certain
disposable parcel of public land.56 ChanRoblesVirtualawlibrary
That the Iligan property was alienable and disposable, agricultural land, has been admitted. What is
claimed instead is that petitioners' possession is debunked by how the Iligan Property was supposedly
part of a military reservation area57 which was subsequently reserved for Iligan City's slum
improvement and resettlement program, and the relocation of families who were dislocated by the
National Steel Corporation's five-year expansion program.58
Indeed, by virtue of Proclamation No. 2143 (erroneously referred to by respondent as Proclamation

No. 2151) certain parcels of land in Barrio Suarez, Iligan City were reserved for slum-improvement
and resettlement program purposes.59 The proclamation characterized the covered area as "disposable
parcel of public land":
WHEREAS, a certain disposable parcel of public land situated at Barrio Suarez, Iligan City consisting of
one million one hundred seventy-four thousand eight hundred fifty-three (1,174,853) square meters,
more or less, has been chosen by National Steel Corporation and the City Government of Iligan with
the conformity of the National Housing/Authority, as the most suitable site for the relocation of the
families to be affected/dislocated as a result of National Steel Corporation's program and for the
establishment of a slum improvement and resettlement project in the City of Iligan; 60 ChanRoblesVirtualawlibrary
However, even if the Iligan Property was subsumed by Proclamation No. 2143, the same proclamation
recognized private rights, which may have already attached, and the rights of qualified free patent
applicants:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by law, do hereby reserve for relocation of the families to be affected/dislocated by the
5-year expansion program of the National Steel Corporation and for the slum improvement and
resettlement project of the City of Iligan under the administration and disposition of the National
Housing Authority, subject to private rights, if any there be, Lot 5258 (portion) of the Iligan Cadastre,
which parcel of land is of the public domain, situated in Barrio Suarez, City of Iligan and more
particularly described as follows:
....
This Proclamation is subject to the condition that the qualified free patent applicants occupying
portions of the aforedescribed parcel of land, if any, may be compensated for the value of their
respective portions and existing improvements thereon, as may be determined by the National
Housing Authority.61 ChanRoblesVirtualawlibrary
Whatever rights petitioners (and their predecessors-in-interest) may have had over the Iligan property
was, thus, not obliterated by Proclamation No. 2143. On the contrary, the Proclamation itself
facilitated compensation.
More importantly, there is documentary evidence to the effect that the Iligan Property was not even
within the area claimed by respondent. In a letter62 to the Director of Lands, dated December 22,
1987, Deputy Public Land Inspector Pio Lucero, Jr. noted that:
That this land known as Lot No. 5258, Cad. 292, Iligan Cadastre which portion was claimed also by
the Human Settlement and/or National Housing Authority; but the area applied for by Leopoldo Delfin
is outside the claim of the said agency as per certification issued dated June 10, 1988; copy of which
is herewith attached for ready reference;63 ChanRoblesVirtualawlibrary
The same letter likewise indicated that the Iligan Property was already occupied by June 1945 and
that it had even been released for agricultural purposes in favor of its occupants. 64 Accordingly, the
Deputy Public Land Inspector recommended the issuance of a patent in favor of petitioner Leopoldo
Delfin:65
Upon investigation conducted by the undersigned in the premises of the land, it was found and
ascertained that the land applied for by Leopoldo Delfrn was first entered, occupied, possessed and
cultivated by him since the year June, 1945 up to the present; he have already well improved the land
and introduced some considerable improvements such as coconut trees and different kinds of fruit
trees which are presently all fruit bearing trees; declared the same for taxation purposes and taxes
have been paid every year; and that there is no other person or persons who bothered him in his
peaceful occupation and cultivation thereof; chanrobleslaw
Records of this Office show that said land was surveyed and claimed by the Military Reservation, but
the portion of which has been released in favor of the actual occupants and the area of Leopoldo
Delfin is one of the portions released for agricultural purposes; chanrobleslaw
....
That the applicant caused the survey of the land under Sgs-12-000099, approved by the Regional
Land Director, Region XII, Bureau of Lands, Cotabato City on April 3, 1979 (see approved plan
attached hereof); chanrobleslaw
In view hereof, it is therefore respectfully recommended that the entry of the application be now
confirmed and that patent be yes issued in favor of Leopoldo Delfin. 66 ChanRoblesVirtualawlibrary
A May 18, 1988 supplemental letter to the Director of the Land Management Bureau further stated:
That the land applied for by Leopoldo Delfin is a portion of Lot No. 5258, Cad. 292, Iligan Cadastre
which was entered, occupied and possessed by the said applicant since the year June 1945 up to the
present; well improved the same and introduced some considerable improvements such as different
kinds of fruit trees, coconut trees and other permanent improvements thereon; chanrobleslaw
....
That is very clear in the 4th Indorsement of the Executive Secretary dated April 24, 1954 the portion
thereof that will not be needed for any public or quasi-public purposes, be disposed in favor of the
actual occupants under the administration of the Bureau of Lands[.] 67 ChanRoblesVirtualawlibrary
Clearly then, petitioners acquired title over the Iligan Property pursuant to Section 48(b) of the Public
Land Act.
First, there is no issue that the Iligan Property had already been declared to be alienable and
disposable land. Respondent has admitted this and Deputy Public Land Inspector Pio Lucero, Jr.'s
letters to the Director of Land attest to this.
Second, although the Delfin Spouses' testimonial evidence and tax declarations showed that their
possession went only as far back as 1952, Deputy Public Land Inspector Pio Lucero, Jr.'s letters to the
Director of Land nevertheless attest to a previous finding that the property had already been occupied
as early as June 1945.
Having shown that the requisites of Section 48(b) of the Public Land Act have been satisfied and
having established their rights to the Iligan Property, it follows that petitioners must be compensated
for its taking.
WHEREFORE, the Petition is GRANTED. The assailed Court of Appeals Decision dated February 26,
2010 and Resolution dated July 2, 2010 in CA-G.R. CV No. 80017 are REVERSED and SET ASIDE.
The Regional Trial Court's Decision dated May 20, 2002 in Civil Case No. II-1801 is REINSTATED.
SO ORDERED. cralawlawlibrary
Carpio, (Chairperson), Brion, Del Castillo, and Mendoza, JJ., concur. chanRoblesvirtualLawlibrary
Endnotes:
1
Rollo, pp. 50-67.
2
Id. at 69-85. The Decision was penned by Associate Justice Romulo V. Borja, and concurred in by
Associate Justices Edgardo T. Lloren and Angelita A. Gacutan of the Twenty-First Division, Court of
Appeals, Cagayan de Oro.
3
Id. at 99-105. The Resolution was penned by Associate Justice Romulo V. Borja, and concurred in by
Associate Justices Edgardo T. Lloren and Angelita A. Gacutan of the Former Twenty-First Division,
Court of Appeals, Cagayan de Oro.
4
Id. at 149-159. The Decision was penned by Presiding Judge Maximo B. Ratunil of the Regional Trial
Court of Lanao Del Norte.
5
Id. at 112-115.
6
Id. at 11.
7
Id. at 11 and 144.
8
Id. at 11.
9
Id. at 120-121.
10
Id. at 11 and 144.
11
Id. at 11.
12
Id. at 10.
13
Id. at 11.
14
Id.
15
Id.
16
Id. at 116-119.
17
Id. at 144.
18
Id.
19
Id. at 145.
20
Id.
21
Id.
22
Id. at 12.
23
Id.
24
Id. at 12-13.
25
cralawred Id. at 159.
26
Id. at 159.
27
Id. at 157.
28
Id. at 14-15.
29
Id. at 69-85.
30
Id. at 26.
31
Id. at 20.
32
Id. at 24.
Com. Act No. 141, sec. 48(b) provides:
Section 48. The following-described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor under the Land
....
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and, occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, immediately
preceding the filing of the application for confirmation of title, except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the conditions essential to a
government grant and shall be entitled to a certificate of title under the provisions of this chapter.
33
Id. at 52.
34
Rollo, pp. 99-105.
35
Id. at 52.
36
Id. at 60.
37
Id.
Pres. Decree No. 1529, sec. 14 states:
Section 14. Who may apply. The following persons may file in the proper Court of First Instance an
representatives:
....
(2) Those who have acquired ownership of private lands by prescription under the provision of existing
laws.
....
Where the land is owned in common, all the co-owners shall file the application jointly.
Where the land has been sold under pacto de retro, the vendor a retro may file an application for the
original registration of the land, provided, however, that should the period for redemption expire
during the pendency of the registration proceedings and ownership to the property consolidated in the
vendee a retro, the latter shall be substituted for the applicant and may continue the proceedings.
A trustee on behalf of his principal may apply for original registration of any land held in trust by him,
unless prohibited by the instrument creating the trust.
Rollo, p. 63.
38
39
Id. at 176-177.
40
CIVIL CODE, art. 419 provides:
Article 419. Property is either of public dominion or of private ownership.
41
Heirs of Malabanan v. Republic, 111 Phil. 141, 160 (2013). [Per J. Bersamin, En Banc], citing CIVIL
CODE, art. 420.
42
CIVIL CODE, arts. 421 and 422 provide:
Article 421. All other property of the State, which is not of the character stated in the preceding
article, is patrimonial property.
Article 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.
43
CIVIL CODE, arts. 423 and 424 state:
Article 423. The property of provinces, cities, and municipalities is divided into property for public use
and patrimonial property.
Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the
provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades,
and public works for public service paid for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this Code,
without prejudice to the provisions of special laws.
44
CIVIL CODE, art. 425 states:
Article 425. Property of private ownership, besides the patrimonial property of the State, provinces,
cities, and municipalities, consists of all property belonging to private persons, either individually or
collectively.
45
CIVIL CODE, art 425.
Heirs of Malabanan v. Republic, 605 Phil. 244, 279 (2009) [Per J. Tinga, En Banc].
46
47
Id.
48
605 Phil. 244 (2009) [Per J. Tinga, En Banc].
49
Id. at 278-279.
50
717 Phil. 141 (2013) [Per J. Bersamin, En Banc].
51
Id. at 162.
52
Rollo, p. 139.
53
Id.
THIRD DIVISION
G.R. No. 208350, November 14, 2016
REPUBLIC OF THE PHILIPPINES, Petitioner, v. HEIRS OF SPOUSES TOMASA ESTACIO AND

EULALIO OCOL, Respondents.
DECISION
PERALTA,***J.:
Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court which seeks the
reversal of the Decision2 dated February 20, 2013, and Resolution3 dated July 26, 2013 of the Court of
Appeals (CA) in CA-G.R. CV No. 96879. The CA affirmed the Order4 of the Regional Trial Court (RTC)
in LRC Case No. N-11598 granting respondents' application for registration and confirmation of title
over three (3) parcels of land located at Barangay Calzada, Taguig City with a total area of 11,380
square meters.
The factual antecedents are as follows:
On September 19, 2008,5 respondents, Heirs of Spouses Tomasa Estacio and Eulalio Ocol filed with
the RTC of Pasig City, Branch 266 an application for land registration under Presidential Decree No.
1529 (PD 1529) otherwise known as the Property Registration Decree. The application covers three
(3) parcels of land described as follows: a) Lot 2 under approved survey plan Ccs-00-000258 with an
area of 3,731 square meters; b) Lot 1672-A under approved subdivision plan Csd-00-001798
consisting of 1,583 square meters; c) a lot under approved survey plan Cvn-00-000194 consisting of
6,066 square meters.6The total assessed value of the parcels of land is P288,970.007 chanrobleslaw
On October 6, 2008, the RTC issued a Notice of Initial Hearing, copy furnished the Land Registration
Authority (LRA). The notice was sent to the Official Gazette for publication and was served on all the
adjoining owners. It was likewise posted conspicuously on each parcel of land included in the
application.8 During the initial hearing on January 13, 2010, respondents, by counsel, presented the
jurisdictional requirements (Exhibits "A" to "I" and their sub-markings). There being no private
oppositor, an Order of General Default was issued except against the Republic of the Philippines.
At the ex-parte presentation of evidence on January 22, 2010, respondents Rosa Ocol, 72 years old,
and Felipe Ocol, 70 years old, testified that they are the children of the late Tomasa Estacio and
Eulalio Ocol (Exhibits "U" and "V"). They inherited the subject lots from their father and mother who
died on February 1, 1949 and March 22, 1999, respectively. When Felipe Ocol was only about eight
years old and Rosa was still in grade school, their parents developed and cultivated the subject lots as
rice fields. In the 1940's, there were only a few houses around their house. At present, one of the lots
is residential while the two remaining lots have become idle. Their parents and grandparents had been
in continuous, actual and physical possession of the lots without any interruption for more than sixty
five (65) years. Felipe and Rosa have been in possession of the land for more than fifty (50) years.
There is n0 existing mortgage or encumbrance over the said lots. 9 chanrobleslaw
Respondents presented witness Antonia Marcelo who was 85 years old at the time she testified. She is
the neighbor of Tomasa Estacio and Eulalio Ocol in Barangay Calzada where she has been residing for
more than fifty (50) years. She testified that during her childhood days, she used to play on the
subject lots and had seen the spouses Ocol cultivate the lots by planting vegetables, rice and trees. 10chanrobleslaw
In support of their application, respondents presented documentary evidence which sought to

establish the following:
1. The first lot which is Lot 2 of the conv. Subd. plan Ccs-00-000258 with an area of 3,731
square meters was declared for taxation purposes in the names of Tomasa Estacio and Eulalio
Ocol in the years 1966, 1974, 1979, 1985, 2000 and 2002 (Exhibits "T" to "T-7");
2. The second lot which is Lot 1672-A under approved subdivision plan Csd-00-001798
consisting of 1,583 square meters was declared for taxation purposes in the names of Tomasa
Estacio and Eulalio Ocol in the years 1942, 1949, 1966, 1974, 1979, 1985, 1994, 2000 and
2002 (Exhibits "R" to "R-10");
3. The third lot which is a lot under approved survey plan CVN-00-000194 consisting of 6,066
square meters, being a conversion of Lot 1889, MCadm, 590-D Taguig Cadastral Mapping,
was declared for taxation purposes in the names of Tomasa Estacio and Eulalio Ocol in the
years 1949, 1974, 1979, 1985, 2000 and 2002 (Exhibits "S" to "S-6");
4. The subject lots used to have larger areas but certain portions were taken and designated as
legal easements. On December 17, 2009, the real property tax on the subject lots, declared in
the names of Tomasa Estacio and Eulalio Ocol as owners, were paid (Exhibits "Q", "Q-1" and
"Q-2");
5. The subject lots were surveyed for Tomasa Vda. de Ocol as evidenced by the Geodetic
Engineers' Certificates and Conversion Subdivision Plans (Exhibits "J", "K", "L", "P", "P-1", and
"P-2");
6. The subject lots are verified to be within alienable and disposable land under Project No. 27-B
Taguig Cadastral Mapping as per LC Map No. 2623 approved on January 3, 1968 as evidenced
by Certifications dated January 28, 2010 issued by the Department of Environment and
Natural Resources-National Capital Region (Exhibits "J-3, "K-2" and "L-3").11
On February 11, 2010, respondents formally offered their documentary evidence. The RTC set the
case for presentation of evidence of the government on April 16, 2010. On the date of the hearing,
there was no appearance from the government. Hence, the court, upon motion of applicants,
considered the case submitted for resolution.
On August 12, 2010, the RTC issued an Order granting the respondents' application for registration of
title to the subject properties, viz.: ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered thus: the title of the heirs of Tomasa Estacio and Eulalio
Ocol, namely, Rosa Ocol; and Felipe Ocol, to the three (3) parcels of land above-described is hereby
CONFIRMED.
Upon the finality of the judgment, let the proper Decree of Registration and Certificates of Title be
issued to the applicants pursuant to Section 39 of P.D. 1529.
Let two (2) copies of this Order be furnished the Land registration Authority Administrator Benedicta
B. Ulep thru Salvador L. Oriel, the Chief of the Docket Division of said Office, East Avenue, Quezon
City.
SO ORDERED.12 chanroblesvirtuallawlibrary
The RTC found that respondents were able to prove that their predecessors-in-interest possessed the
subject lots from 1966 until 2002 with respect to the first lot; from 1942 to 2002, with respect to the
second lot; and from 1949 to 2002 with respect to the third lot, as shown in the tax declarations. The
court posited that even if the subject lots were declared as alienable and disposable public land only
on January 3, 1968, respondents had already "acquired title to the land according to P.D. 1529" by
virtue of the continued possession of the respondents and their predecessors-in-interest from January
3, 1968 to the present.13chanrobleslaw
A motion for reconsideration was filed by the petitioner raising the following grounds:
(a) Respondents did not comply with the requirements in acquiring

ownership of the subject lots by prescription because the few tax
declarations of respondents failed to substantiate the requirement of
open, continuous, notorious and exclusive possession of the subject
lots for the required period as stated in the case of Wee vs.
Republic;14
(b) The evidence is insufficient to establish the nature of possession
because the testimony of witness Antonia Marcelo with regard to the
cultivation of the subject properties by spouses Ocol does not
convincingly prove possession and enjoyment of the subject lots to
the exclusion of other people;
(c) There was no declaration, either in the form of a law or a
presidential proclamation, showing that the lots are no longer
intended for public use or for the development of national wealth, or
that it has been converted to patrimonial property as stated in the
case of Heirs of Malabanan v. Republic.15
The Motion for Reconsideration was denied by the RTC on February 15, 2011.
The RTC opined that the case of Wee vs. Republic16 is not applicable in the instant case because the
parcels of land involved in the said case are "unirrigated ricefields". In the instant case, the first and
third lots are ricefields while the second lot is a residential one as shown in the tax declarations. The
RTC averred that, even prior to the dates stated in the tax declarations specifically during the 1940s,
spouses Tomasa and Eulalio Ocol had started planting rice on the first and third lots as testified to by
respondents. The testimony was corroborated by witness Antonia Marcelo, who is 15 years older than
the respondents, when she testified that she played on the subject lots and had seen the spouses Ocol
cultivate the same by planting vegetables, rice and trees in the 1930s. As to the second lot, the RTC
gave credence to the testimony of respondents that in the 1940s, respondents' house was already
erected on the said lot. According to the court, such is proof that the lot has been used for residential
purposes even prior to 1942 which is the earliest date of the tax declaration on the lot.
The RTC further held that the case of Heirs of Malabanan vs. Republic17 does not apply in the case at
bar because the said case involved a 71,324-square-meter lot, while the subject lots have a total area
of 11,380 square meters only. The court pointed out that respondents are not just entitled to a grant
of their application under Section 14(1) of PD 1529 but also under Section 14(2) of the same law
because respondents had proven that their predecessors-in-interest were in possession of the subject
lands earlier than 1945. Thus, there is no need for an express government manifestation that the
property is patrimonial, or that such is no longer intended for public service or for the development of
national wealth.
Aggrieved, petitioner filed an appeal before the CA. In a Decision dated February 20, 2013, the CA
affirmed the Decision of the RTC. The fallo of the Decision states: ChanRoblesVirtualawlibrary
WHEREFORE, the instant appeal is DISMISSED, and the Order dated August 12, 2010, of the Regional
Trial Court of Pasig City, Branch 266, in L.R.C. Case No. N-11598 (LRA Record No. N-79393) is
AFFIRMED IN TOTO.
SO ORDERED.18 chanroblesvirtuallawlibrary
In affirming the RTC Order, the CA made the following ratiocinations: ChanRoblesVirtualawlibrary
In the case at bar, the applicants-appellees seek the confirmation of their ownership to the subject
lands not based on prescription, but based on their claim that "they have been in open, continuous,
exclusive and notorious possession and occupation of alienable and disposable lands of the public
domain under a bonafide claim of ownership since June 12, 1945, or earlier". (Section 14[1], PD
1529). The requirement of prior declaration that the property is patrimonial property of the State,
therefore, does not apply. As explained in Heirs of Malabanan, for application based on Section 14(1)
of the Property Registration Decree, it is enough that the property is alienable and disposable property
of the State and the applicant has been in open, continuous, exclusive, and notorious possession and
occupation of the subject land under a bonafide claim of ownership from June 12, 1945 or earlier.
Both of these requirements are present in this case.19 chanroblesvirtuallawlibrary
A motion for reconsideration was filed by the petitioner but the same was denied by the CA on July
26, 2013.
Hence, this petition, raising the following errors: ChanRoblesVirtualawlibrary
1. THE RECORD IS BEREFT OF PROOF THAT THE SUBJECT PROPERTIES HAD BEEN
CLASSIFIED AS ALIENABLE AND DISPOSABLE;
2. THE RECORD IS BEREFT OF PROOF THAT RESPONDENTS HAVE BEEN IN OPEN,

CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION Of THE SUBJECT LOTS
UNDER A BONA FIDE CLAIM OF OWNERSHIP SINCE JUNE 12, 1945, OR EARLIER;
3. ALTERNATIVELY, RESPONDENTS CANNOT INVOKE PRESCRIPTION UNDER SECTION

14(2) OF PRESIDENTIAL DECREE NO. 1529. THE SUBJECT LOTS HAVE NOT BEEN
CONVERTED INTO PATRIMONIAL PROPERTY OF THE STATE. 20
On the first ground, petitioner states that respondents failed to present a copy of the original
certification, approved by the DENR Secretary and certified as a true copy by the legal custodian,
which would support respondents' claim that the subject lands are alienable and disposable. The
certification of Senior Forest Management Specialist Corazon D. Calamno and Chief of the Forest
Utilization and Law Enforcement Division of the DENR should not be treated as sufficient compliance
with the requirements of the law because she was not presented during trial to testify on the contents
of the certification.
On the second ground, petitioner argues that there is insufficient evidence of acts of dominion on the
part of respondents and their predecessors-in-interest for the following reasons:
(a) Respondents did not explain how the properties were acquired. The
only explanation as to the acquisition of Lot 1672-A was that it was
first acquired from a certain Gregorio, without even mentioning the
date of acquisition as well as any document evidencing the same. 21
(b) It was unusual for respondents' parents to possess and occupy three
(3) parcels of land that are not contiguous to one another;
(c) Respondents were able to present a tax receipt only for the year
2009;
(d) In terms of improvements, respondents did not go to the extent of
specifying whether fences were erected on the lots. While they claim
that crops were planted, it did not appear that they exclusively and
continuously enjoyed the possession of the lots;
(e) While respondents consistently affirm the development of the lots as
ricefields, they failed to consider the fact that the second lot, Lot
1672-A, is a residential land as stated on the tax declaration of the
land.
On the third ground, petitioner avers that respondents cannot invoke prescription under Section 14(2)
of P.D. 1529 because they failed to present the necessary documents which would show that the
subject properties are no longer intended for public service or no longer used for the development of
the national wealth. They did not present a declaration in the form of a law or a Presidential
Proclamation.
In their Comment,22 respondents counter that the certifications issued by the DENR constitute
substantial compliance with the legal requirement, and that with their continuous possession of the
subject lots for more than thirty (30) years, they had acquired ownership over the subject lots
through prescription under Section 14(2) of P.D. 1529.
In Reply,23 petitioner maintains that respondents failed to establish their compliance with the
requisites for original registration either under Section 14 (1) or Section 14 (2) of P.D. No. 1529. The
certifications of Senior Forest Management specialist Corazon C. Calamno and the Chief of the Forest
Utilization and Law Enforcement Division of the DENR did not comply with the legal requirements for
lack of approval by the DENR Secretary and for lack of certification by its legal custodian. Respondents
failed to establish that the State expressly declared, either through a law or a presidential
proclamation, that the parcels ofland are no longer retained for public service or the development of
national wealth, or that they had been converted into patrimonial properties. Without such, the
subject lots remain part of public dominion.
Petitioner further maintains that the tax declarations do not represent regular assertion of ownership
because of the large gaps in the years between declarations. Such sporadic assertion of alleged
ownership does not prove open, continuous, exclusive and notorious possession and occupation in the
concept of an owner. And that, since the parcels of land are not contiguous, alleged possession and
occupation over one parcel of land cannot prove possession and occupation over the other parcels of
land.24
chanrobleslaw
Under the Regalian Doctrine, which is embodied in our Constitution, all lands of the public domain
belong to the State, which is the source of any asserted right to any ownership of land. All lands not
appearing to be clearly within private ownership are presumed to belong to the State. 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. 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, who must prove that the land subject of the application is alienable or
disposable. To overcome this presumption, incontrovertible evidence must be presented to establish
that the land subject of the application is alienable or disposable.25
cralawredchanrobleslaw
Section 14 (1) of PD 1529, otherwise known as the Property Registration Decree provides: ChanRoblesVirtualawlibrary
SEC. 14. Who may apply. - The following persons may file in the proper Court of First Instance an
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.
(2) Those who have acquired ownership of private lands by prescription under the provision of existing
laws.
xxx
In the Order of the RTC granting the registration of the subject lots, it was stated that respondents
had "acquired title to the land according to P.D. 1529" by virtue of the continued possession of the
respondents and their predecessors-in-interest from January 3, 1968 to present. On motion for
reconsideration, however, the court added that respondents are not just entitled to a grant of their
application under Section 14(2) of the P.D. 1529, but also under Section 14(1) of the same law
because respondents had proven that their predecessors-in-interest were in possession of the subject
lots earlier than 1945. The CA explained, however, that the confirmation of the ownership to the
subject lots is not based on prescription, but on Section 14 (1), since it was established that the lots
are alienable and disposable, and the applicants are in continuous possession thereof since June 12,
1945 or earlier.
To distinguish between registration under Section 14(1) of P.D. No. 1529 from the one filed under
Section 14(2) of P.D. No. 1529, this Court held in the case of Heirs of Mario Malabanan v. Republic:26
Section 14(1) mandates registration on the basis of possession, while Section 14(2) entitles
registration on the basis of prescription. Registration under Section 14(1) is extended under the aegis
of the Property Registration Decree and the Public Land Act while registration under Section 14(2) is
made available both by the Property Registration Decree and the Civil Code.27 chanroblesvirtuallawlibrary
Registration under Section 14(1) of P.D. No. 1529 is based on possession and occupation of the
alienable and disposable land of the public domain since June 12, 1945 or earlier, without regard to
whether the land was susceptible to private ownership at that time. The applicant needs only to show
that the land had already been declared alienable and disposable at any time prior to the filing of the
application for registration.28 chanrobleslaw
On the other hand, registration under Section 14(2) of P.D. No. 1529 is based on acquisitive
prescription and must comply with the law on prescription as provided by the Civil Code. In that
regard, only the patrimonial property of the State may be acquired by prescription pursuant to the
Civil Code. For acquisitive prescription to set in, therefore, the land being possessed and occupied
must already be classified or declared as patrimonial property of the State. Otherwise, no length of
possession would vest any right in the possessor ifthe property has remained land of the public
dominion.29 chanrobleslaw
Moreover, Section 14(1) of P.D. No. 1529 refers to the judicial confirmation of imperfect or incomplete
titles to public land acquired under Section 48(b) of Commonwealth Act No. 141, or the Public Land
Act, as amended by P.D. No. 1073.30 Under Section 14(1), respondents need to prove that: (1) the
land forms part of the alienable and disposable land of the public domain; and (2) they, by themselves
or through their predecessors-in-interest, have been in open, continuous, exclusive, and notorious
possession and occupation of the subject land under a bona fide claim of ownership from June 12,
1945 or earlier. These the respondents must prove by no less than clear, positive and convincing
evidence.31 chanrobleslaw
In the case at bar, the first requirement was not satisfied. To prove that the subject property forms
part of the alienable and disposable lands of the public domain, the respondents presented three
certifications - two are dated January 29, 2010 (Exhibits "J-3" and "K-2") and one is dated January
28, 2010 (Exhibits "L-3") - issued by Senior Forest Management Specialist Corazon D. Calamno and
Chief of the Forest Utilization and Law Enforcement Division of the DENR-National Capital
Region.32 The certification attests that the lots are verified to be within alienable and disposable land
under Project No. 27-B Taguig Cadastral Mapping as per LC Map No. 2623 approved on January 3,
1968, thus: ChanRoblesVirtualawlibrary
This is to certify that the tract of land as shown and described at the reverse side hereof xxx as
surveyed by Geodetic Engineer Jose S. Agres, Jr. for Tomasa Vda de Ocol is verified to be within the
Alienable and Disposable Land, under Project No. 27-B of Taguig City as per LC Map 2623, approved
on January 3, 1968.33 chanroblesvirtuallawlibrary
However, the certifications presented by the respondents are insufficient to prove that the subject
properties are alienable and disposable. We reiterate the standing doctrine that land of the public
domain, to be the subject of appropriation, must be declared alienable and disposable either by the
President or the Secretary of the DENR. Applicants must present a copy of the original classification
approved by the DENR Secretary and certified as true copy by the legal custodian of the records.
In Republic of the Philippines v. T.A.N. Properties, Inc.,34 this Court explicitly ruled: ChanRoblesVirtualawlibrary
Further, it is not enough for the PENRO or CENRO35 to certify that a land is alienable and disposable.
The applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the land
subject of the application for registration falls within the approved area per verification through survey
by the PENRO or CENRO. In addition, the applicant for land registration must present a copy
of the original classification approved by the DENR Secretary and certified as a true copy by
the legal custodian of the official records. These facts must be established to prove that the
land is alienable and disposable. Respondent failed to do so because the certifications presented
by respondent do not, by themselves, prove that the land is alienable and disposable. 36 chanroblesvirtuallawlibrary
In Republic v. Bantigue Point Development Corporation, this Court deemed it appropriate to reiterate 37
the ruling in T.A.N. Properties, viz.: ChanRoblesVirtualawlibrary
The Regalian doctrine dictates that all lands of the public domain belong to the State. The applicant for
land registration has the burden of overcoming the presumption of State ownership by establishing
through incontrovertible evidence that the land sought to be registered is alienable or
disposable based on a positive act of the government. We held in Republic v. T.A.N. Properties,
Inc. that a CENRO certification is insufficient to prove the alienable and disposable character of the
land sought to be registered. The applicant must also show sufficient proof that the DENR Secretary
has approved the land classification and released the land in question as alienable and disposable.
Thus, the present rule is that an application for original registration must be accompanied by (1) a
CENRO or PENRO Certification; and (2) a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian of the official records.
Here, respondent Corporation only presented a CENRO certification in support of its application.
Clearly, this falls short of the requirements for original registration.38 chanroblesvirtuallawlibrary
Similarly, in Republic v. Cortez, this Court declared that: 39

ChanRoblesVirtualawlibrary
xxx. To prove that the subject property forms part of the alienable and disposable lands of the public
domain, Cortez adduced in evidence a survey plan Csd-00-000633 (conversion-subdivision plan of Lot
2697, MCadm 594-D, Pateros Cadastral Mapping) prepared by Geodetic Engineer Oscar B. Fernandez
and dertified by the Lands Management Bureau of the DENR. The said survey plan contained the
following annotation: ChanRoblesVirtualawlibrary
This survey is inside L.C. Map No. 2623, Project No. 29, classified as cuienable & disposable by the
Bureau of Forest Development on Jan. 3, 1968.
However, Cortez' reliance on the foregoing annotation in the survey plan is amiss; it ciloes
not constitute incontrovertible evidence to overcome the presumption that the subject
property remains part of the inalienable public domain. In Republic of the Philippines v. Tri-Plus
Corporation,40 the Court clarified that, the applicant must at the very least submit a certification froi:n
the proper government agency stating that the parcel of land subject of he application for registration
is indeed alienable and disposable, viz.: ChanRoblesVirtualawlibrary
It must be stressed that incontrovertible evidence must be presented to establish that the land subject
of the application is alie table or disposable.
In the present case, the only evidence to prove the character of the subject lands as required by law
is the notation appearinin the Advance Plan stating in effect that the said properties are alienable and
disposable. However, this is hardly the kind of proof required by law. To prove that the land subject of
an application for registration is alienable, an appficant 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, andla legislative act or statute. The applicant
may also secure certification from the Government that the lands applied: for are alienable and
disposable. In the case at bar, while the Advance Plan bearing the notation was certified by
the Lands Management Services of the DENR, the cert fication refers only to the technical
correctness of the survey plotted in the said plan and has nothing to do wh tsoever with the
nature and character of the property surveyed. Respondents failed to submit a certification
fromithe proper government agency to prove that the lands subject for registration are indeed
alienable and disposable.41chanroblesvirtuallawlibrary
Clearly, the aforestated doctrine unavoidably means that the mere certification issued by the DENR
does not suffice to support the application for registration, because the applicant must also submit a
copy of the original classification of the land as alienable and disposable as approved by the DENR
Secretary and certified as a true copy by the legal custodian of the official records. 42 chanrobleslaw
Hence, in the instant case, the DENR certifications that were presented by the respondents in support
of their application for registration are not sufficient to prove that the subject properties are indeed
classified by the DENR Secretary as alienable and disposable. It is still imperative for the respondents
to present a copy of the original classification approved by the DENR Secretary, which must be
certified by the legal custodian thereof as a true copy. Accordingly, the lower courts erred in granting
the application for registration in spite o£ the failure of the respondents to prove by well-nigh
incontrovertible evidence that the subject properties are alienable and disposable. 43 chanrobleslaw
Anent the second requirement, the tax declarations do not prove respondents' assertion. Although
respondents claim that they possessed the subject lots through their predecessors-in-interest since
the 1930s, their tax declarations belie the same. The earliest tax declarations presented for the first
lot was issued only in 1966, while the earliest tax declaration for the third lot was issued in 1949.
If it is true that the parents of respondents had been in possession of the properties in the 1930s as
testified to by witness Antonia Marcelo, why was the first lot declared for taxation purposes for the
first time only in 1966, and the third lot was declared only in 1949? While belated declaration of a
property for taxation purposes does not necessarily negate the fact of possession, tax declarations or
realty tax payments of property are, nevertheless, good indicia of possession in the concept of an
owner, for no one in his right mind would be paying taxes for a property that is not in his actual or, at
least, constructive possession.44 chanrobleslaw
That the subject properties were first declared for taxation purposes only in those mentioned years
gives rise to the presumption that the respondents claimed ownership or possession of the subject
properties starting in the year 1966 only with respect to the first lot; and year 1949, with respect to
the third lot.45The voluntary declaration of a piece of property for taxation purposes not only manifests
one's sincere and honest desire to obtain title to the property, but also announces an adverse claim
against the State and all other interested parties with an intention to contribute needed revenues to
the government. Such an act strengthens ones bona fide claim of acquisition of ownership.46 chanrobleslaw
Likewise, this Court notes that the tax declarations on the subject properties presented by the
respondents were only for the years 1966, 1974, 1979, 1985, 2000 and 2002 with respect to the first
lot (Lot 2 of the conv. Subd. plan Ccs-00-000258 with an area of 3,731 square meters); for the years
1942, 1949, 1966, 1974, 1979, 1985, 1994, 2000 and 2002 with respect to the second lot (Lot 1672-
A under approved subdivision plan Csd-00-001798 consisting of 1,583 square meters); for the years
1949, 1974, 1979, 1985,2000 and 2002 with respect to the third lot (a lot under approved survey
plan CVN-00-000194 consisting of 6,066 square meters being a conversion of Lot 1889, MCadm, 590-
D Taguig Cadastral Mapping).
Thus, there are only six tax declarations for the first lot, nine tax declarations for the second lot and
five tax declarations for the third lot within the alleged actual and physical possession of the lands
without any interruption for more than sixty five (65) years. In Wee v. Republic of the
Philippines,47 this Court stated that:
It bears stressing that petitioner presented only five tax declarations (for the years 1957, 1961,
1967, 1980 and 1985) for a claimed possession and occupation of more than 45 years (1945-
1993). This type of intermittent and sporadic assertion of alleged ownership does not prove
open, continuous, exclusive and notorious possession and occupation. In any event, in the
absence of other competent evidence, tax declarations do not conclusively establish either possession
or declarant's right to registration of title.48 chanroblesvirtuallawlibrary
Moreover, this Court emphasizes that respondents paid the taxes due on the parcels of land subject of
the application only in 2009, a year after the filing of the application. There is no showing of any tax
payments before 2009. This Court held in the case of Tan, et al. vs. Republic:49
Tax declarations per se do not qualify as competent evidence of actual possession for purposes of
prescription. More so, if the payment of the taxes due on the property is episodic, irregular and
random such as in this case. Indeed, how can the petitioners claim of possession for the entire
prescriptive period be ascribed any ounce of credibility when taxes were paid only on
eleven (11) occasions within the 40-year period from 1961 to 2001?50 chanroblesvirtuallawlibrary
From the foregoing, this Court doubts the respondents' claim that their predecessors-in-interest have
been in continuous, exclusive, and adverse possession and occupation thereof in the concept of
owners from June 12, 1945, or earlier. The evidence presented by the respondents does not prove
title thru possession and occupation of public land under Section 14(1) of P.D. 1529.
Further, the RTC ruled that with the continuous possession of the subject lots for more than 30 years,
respondents had acquired ownership over the subject lots through prescription under Section 14(2) of
P.D. 529. This view was adopted by the respondents in their Comment, 51 to the petition.
An application for original registration of land of the public domain under Section 14(2) of Presidential
Decree (PD) No. 1529 must show not only that the land has previously been declared alienable and
disposable, but also that the land has been declared patrimonial property of the State at the onset of
the 30-year or 10-year period of possession and occupation required under the law on acquisitive
prescription.52
chanrobleslaw
It was elucidated in Heirs of Malabanan53 that possession and occupation of an alienable and
disposable public land for the periods provided under the Civil Code will not convert it to patrimonial or
private property. There must be an express declaration that the property is no longer intended for
public service or the development of national wealth. In the absence thereof, the property remains to
be alienable and disposable and may not be acquired by prescription under Section 14(2) of P.D. No.
1529.
This Court, therefore, stresses that there must be an official declaration by the State that the public
dominion property is no longer intended for public use, public service, or for the development of
national wealth before it can be acquired by prescription; that a mere declaration by government
officials that a land of the public domain is already alienable and disposable would not suffice for
purposes of registration under Section 14(2) of P.D. No. 1529. The period of acquisitive prescription
would only begin to run from the time that the State officially declares that the public dominion
property is no longer intended for public use, public service, or for the development of national
wealth54.
In Republic v. Rizalvo, Jr.,55 this Court reiterated the ruling in Malabanan, viz.: ChanRoblesVirtualawlibrary
On this basis, respondent would have been eligible for application for registration because his claim of
ownership and possession over the subject property even exceeds thirty (30) years. However, it is
jurisprudentially clear that the thirty (30)-year period of prescription for purposes of acqmring
ownership and registration of public land under Section 14 (2) of P.D. No. 1529 only begins from the
moment the State expressly declares that the public dominion property is no longer intended for
public service or the development of the national wealth or that the property has been converted into
patrimonial. xxx
In this case, there is no evidence showing that the parcels of land in question were within an area
expressly declared by law either to be the patrimonial property of the State, or to be no longer
intended for public service or the development of the national wealth.
Evidently, there being no compliance, with either the first or second paragraph of Section 14 of PD
1529, the Regalian presumption stands and must be enforced in this case.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated February 20,
2013, in CA-G.R. CV No. 96879, affirming the Decision of the Regional Trial Court of Pasig City,
Branch 266, in LRC Case No. N-11598, is REVERSED and SET ASIDE. The application for registration
and confirmation of title filed by respondents Heirs of Spouses Tomasa Estacio and Eulalio Ocol over
three parcels of land, with a total area of eleven thousand three hundred eighty (11,380) square
meters situated at BarangayCalzada, Taguig City, Metro Manila, is DENIED.
SO ORDERED. chan robles virtuallawlibrary
Carpio,*Perez, and Reyes, JJ., concur.

Velasco, Jr., (Chairperson), J., on official leave.
Endnotes:
*
Designated Additional Member in lieu of Associate Justice Francis H. Jardeleza, per Raffle dated
September 22, 2014.
***
Acting Chairperson per Special Order No. 2395 dated October 19, 2016.
Rollo, pp. 7-26.

1
2
Penned by Associate Justice Ramon M. Bato, Jr., with Associate Justices Andres B. Reyes, Jr. and
Rodil V. Zalameda, concurring; id. at 28-41.
Id. at 42-43.
3
Rollo, pp. 44-49.

4
Id. at 29.
5
Id. at 44-46.
6
Id. at 29.
7
Id. at 30.
8
Id. at 47.
9
10
Id.
11
Id. at 46-47.
12
Id. at 48-49.
13
Id. at 48.
14
622 Phil. 944 (2009).
15
605 Phil. 244 (2009).
16
Supra note 14.
17
Supra note 15.
18
Rollo, p. 40.
19
Id. at 39-40.
20
Id. at 11.
21
Id. at 17.
22
Id. at 57-60.
23
Id. at 75-80.
24
Id. at 76.
25
cralawred Republic v. Medida, 692 Phil. 454, 463 (2012).
26
Supra note 15.
27
Republic v. Zurbaran Realty and Development Corp., G.R. No. 164408, March 24, 2014, 719 SCRA
28
601, 612.
29
Id. at 612-613.
30
Sec. 48(b) of the Public Land Act, as amended by P.D. No. 1073, provides that: Sec. 48. The
following described citizens of the Philippines, occupying lands of the public domain or claiming to own
any such lands or an interest therein, but whose titles have not been perfected or completed, may
apply to the Court of First Instance of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:
chanRoblesvirtualLawlibrary xxx
continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of
the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except when prevented by
war or force majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under the provisions of
this chapter.
31
Republic v. De la Paz, et al., 649 Phil. 106, 119-120 (2010).
32
Rollo, p. 35.
33
Id. at 35-36.
34
578 Phil. 441 (2008).
35
Certificate of Community Environment and Natural Resources Office (CENRO) and Provincial
Environmental and Natural Resources Office (PENRO).
36
Republic v. T.A.N. Properties, Inc., supra note 34, at 452-453. (Emphasis ours)
37
684 Phil. 192 (2012).
Republic v. Bantigue Point Development Corporation, supra, at 205-206. (Emphasis in the original).
38
39
G.R. No. 186639, February 5, 2014, 715 SCRA 417.
40
534 Phil. 181 (2006).
Supra note 39, at 427-428. (Emphasis ours)

41
Republic v. Rosario de Guzman Vda. de Joson, G.R. No. 163767, March 10, 2014, 718 SCRA 229,
42
243.
Republic v. Remman Enterprises, Inc., G.R. No. 199310, February 19, 2014, 717 SCRA 171, 188.
43
Republic v. Alconaba, 471 Phil. 607, 622 (2004).

44
Republic v. T.A.N. Properties, Inc., supra note 34, at 457-458.

45
Republic v. Alconaba, supra note 44, at 620.

46
Supra note 14.

47
Id. at 956. (Emphasis ours)

48
49
G.R. No. 193443, April 16, 2012, 669 SCRA 499.
Tan, et al. v. Republic, supra, at 509. (Emphasis ours)

50
Rollo, pp. 57-60.

51
Republic v. Zurbaran Realty and Development Corporation, supra note 28, at 603.
52
Supra note 15.

53
Republic v. Cortez, supra note 39, at 431-432.

54
55
659 Phil. 578, 589 (2011).
THIRD DIVISION
G.R. No. 174964, October 05, 2016
SANGGUNIANG PANLALAWIGAN OF BATAAN, Petitioner, v. CONGRESSMAN ENRIQUE T.

GARCIA, JR., MEMBERS OF THE FACULTY, CONCERNED STUDENTS AND THE BOARD OF
TRUSTEES OF THE BATAAN POLYTECHNIC STATE COLLEGE, Respondents.
DECISION
REYES, J.:
Before this Court is a Petition for Review on Certiorart1 of the Decision2 dated February 7, 2006 of the
Court of Appeals (CA) in CA-G.R. SP No. 85902 upholding the Decision dated November 29, 2002 of
the Regional Trial Court (RTC) of Bataan which granted the petition for a writ of mandamus in Special
Civil Action No. 7043. chanroblesvirtuallawlibrary
Antecedent Facts
Lot Nos. 2193 and 2194 of the Bataan Cadastre, containing 1,222 square meters and 10,598 sq m,
respectively, were registered in the name of the Province of Bataan. Both lots were embraced in
Original Certificate of Title (OCT) No. N-182, and occupied by the Bataan Community Colleges (BCC)
and the Medina Lacson de Leon School of Arts and Trades (MLLSAT), both State-run schools. 3
On February 26, 1998, the Congress of the Philippines passed Republic Act (R.A.) No. 8562, authored
by Congressman Enrique T. Garcia, Jr. (Cong. Garcia), converting the MLLSAT into a polytechnic
college, to be known as the Bataan Polytechnic State College (BPSC), and integrating thereto the
BCC.4 Section 24 of R.A. No. 8562 provides that: chanRoblesvirtualLawlibrary
All parcels of land belonging to the government occupied by the Medina Lacson de Leon School of Arts
and Trades and the Bataan Community Colleges are hereby declared to be the property of the Bataan
Polytechnic State College and shall be titled under that name: Provided, That should the State College
cease to exist or be abolished or should such parcels of land aforementioned be no longer needed by
the State College, the same shall revert to the Province of Bataan.
chanrobleslaw
On the basis of the above provision, Cong. Garcia wrote to then Governor of Bataan Leonardo Roman,
and the Sangguniang Panlalawigan of Bataan (petitioner), requesting them to cause the transfer of
the title of the aforesaid lots to BPSC. No transfer was effected. 5
Thus, Cong. Garcia, along with the faculty members and some concerned students of BPSC
(collectively, the respondents) filed a Special Civil Action for Mandamus with the RTC of Balanga,
Bataan against the Governor and the petitioner. Initially, the Board of Trustees of the BPSC was
impleaded as an unwilling plaintiff but was eventually included as co-petitioner in the civil suit
pursuant to Resolution No. 14, Series of 2000 of the BPSC. 6
In their Comment, the Governor and the petitioner took issue with the standing of the respondents,
arguing that they were not the real parties in interest who would be benefited or injured by the
judgment, or the party entitled to the avails of the suit. They asserted that the subject properties
were owned by the Province of Bataan and not the State, for them to be simply transferred to the
BPSC by virtue of the law.7
In its Decision dated November 29, 2002, the RTC granted the writ of mandamus. The fallo of the RTC
decision reads: chanRoblesvirtualLawlibrary
WHEREFORE, a writ of mandamus is hereby issued, ordering respondents to forthwith: cralawlawlibrary
1. Deliver the owner's duplicate copy of [OCX] No. N-182 to the Register of Deeds of Bataan, free
from any hen or encumbrance; ChanRoblesVirtualawlibrary
2. Execute the corresponding deed of conveyance of the parcels of land in issue in favor of the
[BPSC]; and
3. Cause the transfer and registration of the title to and in the name of the [BPSC].
SO ORDERED.8
chanrobleslaw
The Governor and the petitioner appealed to the CA alleging that the subject lots were the patrimonial
properties of the Province of Bataan, and as such they cannot be taken by the National Government
without due process of law and without just compensation. They also pointed out that certain loan
obligations of the Province of Bataan to the Land Bank of the Philippines (LBP) were secured with a
mortgage on the lots; and since the mortgage lien was duly annotated on its title, OCT No. N-182, the
writ of mandamus violated the non-impairment clause of the Constitution. The Governor and the
petitioner reiterated that the respondents had no legal standing since they were not the real parties in
interest.9
In the Decision10 dated February 7, 2006, the CA affirmed the RTC.
The CA rejected the claim that the subject lots were the patrimonial properties of the Province of
Bataan, declaring that the petitioner failed to provide proof that the Province of Bataan acquired them
with its own private or corporate funds, and for this reason the lots must be presumed to belong to
the State, citing Salas, etc., et al. v. Hon. Jarencio, etc., et al. 11 Concerning the mortgage to the LBP,
the appellate court agreed with the RTC that the consent of the LBP to the transfer of title to BPSC
must be obtained, and the mortgage lien must be carried over to the new title. The CA also held that
BPSC is a real party in interest on the basis of Section 24 of R.A. No. 8562, and was correctly
impleaded as a co-petitioner. The subsequent motion for reconsideration was denied in the CA
Resolution12 dated September 20, 2006; hence, this petition.
Issues
WHETHER OR NOT THE SUBJECT PARCELS OF LAND ARE PATRIMONIAL PROPERTIES OF THE
PROVINCE OF BATAAN WHICH CANNOT BE TAKEN WITHOUT DUE PROCESS OF LAW AND WITHOUT
JUST COMPENSATION. chanroblesvirtuallawlibrary
II
WHETHER OR NOT A WRIT OF MANDAMUS MAY BE ISSUED AGAINST THE PETITIONER TO COMPEL
THE TRANSFER OF THE SUBJECT PROPERTIES WITHOUT DUE PROCESS OF LAW AND WITHOUT JUST
COMPENSATION.13
chanrobleslaw
The petitioner insists that the subject lots are not communal lands, or legua comunal as they were
known under the laws of colonial Spain, but are the patrimonial properties of the Province of Bataan,
which were issued a Torrens title by the Cadastral Court on August 11, 1969 in Cadastral Case No.
5;14 that while in Salas,15 the title of the State over the disputed lot was expressly recognized by the
City of Manila, this is not so in the case at bar;16 that in the exercise of its proprietary rights over the
subject lots, the Province of Bataan has used them as collateral for its loan obligations with the
LBP;17 that in its Manifestation and Motion dated February 24, 2000, the Board of Trustees of BPSC
even acknowledged the titles of the Province of Bataan over the subject properties. 18
In addition to the above contentions, the petitioner proffers an alleged novel argument that R.A. No.
8562 infringes on the State's underlying policy of local autonomy for its territorial and political
subdivisions, found in Article X of the 1987 Constitution (formerly Article XI, 1973 Constitution) and
now fleshed out in a landmark legislation, R.A. No. 7160, better known as the Local Government Code
of 1991 (LGC). Thus, for this Court to still sustain its ruling in Salas would render the State's policy of
local autonomy purely illusory.19
Ruling of the Court
The decision of the CA is affirmed.
A. Under the well-entrenched and

time-honored Regalian Doctrine, all
lands of the public domain are
under the absolute control and
ownership of the State.
The State's ownership of and control over all lands and resources of the public domain are beyond
dispute. Reproducing almost verbatim from the 1973 Constitution, 20 Section 2, Article XII of the 1987
Constitution provides that "[a]ll 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, x x x." In Section 1, Article XIII of the Amended
1935 Constitution, it was also provided that "[a]ll 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 x x x."
Thus, in Cariño v. Insular Government,21 a case of Philippine origin, the Supreme Court of the United
States of America acknowledged that "Spain in its earlier decrees embodied the universal feudal
theory that all lands were held from the Crown x x x." In Hong Hok v. David,22 citing Cariño, the Court
likewise said that the theory is a manifestation of the concept of the Regalian Doctrine, or jura
regalia,23 which is enshrined in our 1935, 1973, and 1987 Constitutions. As adopted in our republican
system, this medieval concept is stripped of royal overtones; and ownership of all lands belonging to
the public domain is vested in the State.24 Under this well-entrenched and time-honored Regalian
Doctrine, all lands of the public domain are under the absolute control and ownership of the State.
B. Local government property

devoted to governmental purposes,
such as local administration, public
education, and public health, as
may be provided under special
laws, is classified as public.
In The Province of Zamboanga del Norte v. City of Zamboanga, et al. 25 cited by the CA, the Province of
Zamboanga del Norte sought to declare unconstitutional R.A. No. 3039, which ordered the transfer of
properties belonging to the Province of Zamboanga located within the territory of the City of
Zamboanga to the said City, for depriving the province of property without due process and just
compensation. In said case, the Court classified properties of local governments as either (a)
properties for public use, or (b) patrimonial properties, and held that the capacity in which the
property is held by a local government is dependent on the use to which it is intended and for which it
is devoted. If the property is owned by the municipal corporation in its public and governmental
capacity, it is public and Congress has absolute control over it; but if the property is owned in its
private or proprietary capacity, then it is patrimonial and Congress has no absolute control, in which
case, the municipality cannot be deprived of it without due process and payment of just
compensation.26 In upholding the validity of R.A. No. 3 039, the Court noted that it affected "lots used
as capitol site, school sites and its grounds, hospital and leprosarium sites and the high school
playground sites - a total of 24 lots - since these were held by the former Zamboanga province in its
governmental capacity and therefore are subject to the absolute control of Congress." 27
According to the Court, there are two established norms to determine the classification of the
properties: that of the Civil Code, particularly Articles 423 and 424 thereof, and that obtaining under
the law of Municipal Corporations. Articles 423 and 424 of the Civil Code provide, as follows: chanRoblesvirtualLawlibrary
Art. 423. The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property.
Art. 424. Property for public use, in the provinces, cities, and municipalities, consists of the provincial
roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public
works for public service paid for by said provinces, cities, or municipalities.
without prejudice to the provisions of special laws.
chanrobleslaw
In Province of Zamboanga del Norte,28 properties for the free and indiscriminate use of everyone are
classified under the Civil Code norm as for public use, while all other properties are patrimonial in
nature. In contrast, under the Municipal Corporations Law norm, to be considered public property, it is
'enough that a property is held and devoted to a governmental purpose, such as local administration,
public education, and public health.29 Nonetheless, the Court clarified that the classification of
properties in the municipalities, other than those for public use, as patrimonial under Article 424 of the
Civil Code, is "without prejudice to the provisions of special laws,"30 holding that the principles
obtaining under the Law of Municipal Corporations can be considered as "special laws" 31
Moreover, in the 2009 case of Heirs of Mario Malabanan v. Republic of the Philippines, 32 the Court
reiterated that Article 420(2) of the Civil Code makes clear that properties "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," are public dominion property. For as long as the property belongs to the State,
although already classified as alienable or disposable, it remains property of the public dominion when
it is "intended for some public service or for the development of the national wealth." 33
C. Property registered in the name

of the municipal corporation but
without proof that it was acquired
with its corporate funds is deemed
held by it in trust for the State.
The Court takes instructions from the case, of Salas as to properties belonging to the municipal
government. In Salas, at issue was the constitutionality of R.A. No. 4118 passed on June 20,
1964,34whereby Congress reserved a lot, long titled in the name of the City of Manila, as communal
property, and converted it into disposable land of the State for resale in small lots to its bona fide
occupants. On February 24, 1919, Lot No. 1, Block 557 of the Cadastre of the City of Manila,
containing 9,689.80 sq m, was declared by the Court of First Instance of Manila, Branch 4, acting as a
land registration court in Case No. 18, G.L.R.O. Record No. 111, as owned by the City of Manila in fee
simple. On August 21, 1920, OCT No. 4329 was issued in the name of the City of Manila over the said
lot. On various dates in 1924, the City of Manila sold portions of Lot No. 1, Block 557 to a certain Pura
Villanueva (Villanueva). OCT No. 4329 was cancelled, and transfer certificates of title (TCT) were
issued to Villanueva for the portions sold to her, while TCT No. 22547 was issued to the City of Manila
for the remainder of Lot No. 1 containing 7,490.10 sq m, now designated, as Lot No. 1-B-2-B of Block
557.35
On September 21, 1960, the local board of the City of Manila wrote to the President of the Philippines
seeking assistance in declaring the aforesaid lot as patrimonial property of the city for the purpose of
reselling the same in small lots to the actual occupants thereof. R.A. No. 4118 was passed by
Congress on June 20, 1964 for this purpose.36 On February 18, 1965, Manila Mayor Antonio Villegas
(Mayor Villegas) was furnished a copy of a subdivision plan for TCT No. 22547. He interposed no
objection to the implementation of R.A. No. 4118, and TCT No. 22547 was duly surrendered to the
Land Authority.37
Inexplicably, now claiming that R.A. No. 4118 was unconstitutional, Mayor Villegas brought on
December 20, 1966 an action for injunction and/or prohibition with preliminary injunction, to restrain,
prohibit and enjoin the Land Authority and the Register of Deeds of Manila from implementing R.A.
No. 4118. On September 23, 1968, the RTC declared the said law unconstitutional for depriving the
City of Manila of its property without due process and just compensation. 38
Acting on the petition for review, the Court declared that Lot 1-B-2-B of Block 557 was a communal
property held in trust by the City of Manila for the State, and therefore subject to the paramount
power of Congress to dispose of. Thus: chanRoblesvirtualLawlibrary
[T]he City of Manila, although declared by the Cadastral Court as owner in fee simple, has not shown
by any shred of evidence in what manner it acquired said land as its private or patrimonial property. It
is true that the City of Manila as well as its predecessor, the Ayuntamiento de Manila, could validly
acquire property in its corporate or private capacity, following the accepted doctrine on the dual
character - public and private - of a municipal corporation. And when it acquires property in its private
capacity, it acts like an ordinary person capable of entering into contracts or making transactions for
the transmission of title or other real rights. When it comes to acquisition of land, it must have done
so under any of the modes established by law for the acquisition of ownership and other real rights. In
the absence of a title deed to any land claimed by the City of Manila as its own, showing that it was
acquired with its private or corporate funds, the presumption is that such land came from the State
upon the creation of the municipality (Unson vs. Lacson, et al., 100 Phil. 695). Originally the
municipality owned no patrimonial property except those that were granted by the State not for its
public but for private use. Other properties it owns are acquired in the course of the exercise of its
corporate powers as a juridical entity to which category a municipal corporation pertains.
Communal lands or "legua comunal" came into existence when a town or pueblo was established in
this country under the laws of Spain (Law VII, Title III, Book VI, Recopilacion de las Leyes de Indios).
The municipalities of the Philippines were not entitled, as a matter of right, to any part of the public
domain for use as communal lands. The Spanish law provided that the usufruct of a portion of the
public domain adjoining municipal territory might be granted by the Government for communal
purposes, upon proper petition, but, until granted, no rights therein passed to the municipalities, and,
in any event, the ultimate title remained in the sovereign (City of Manila vs. Insular Government, 10
Phil. 327).
xxxx
It may, therefore, be laid down as a general rule that regardless of the source or classification of land
in the possession of a municipality, excepting those acquired with its own funds in its private or
corporate capacity, such property is held in trust for the State for the benefit of its inhabitants,
whether it be for governmental or proprietary purposes. It holds such lands subject to the paramount
power of the legislature to dispose of the same, for after all it owes its creation to it as an agent for
the performance of a part of its public work, the municipality being but a subdivision or
instrumentality thereof for purposes of local administration. Accordingly, the legal situation is the
same as if the State itself holds the property and puts it to a different use (2 Mc Quilin, Municipal
Corporations, 3rd Ed. p. 197, citing Monagham vs. Armatage, 218 Minn. 27, 15 N. W. 2nd 241).
True it is that the legislative control over a municipal corporation is not absolute even when it comes
to its property devoted to public use, for such control must not be exercised to the extent of depriving
persons of their property or rights without due process of law, or in a manner impairing the obligations
of contracts. Nevertheless, when it comes to property of the municipality which it did not acquire in its
private or corporate capacity with its own funds, the legislature can transfer its administration and
disposition to an agency of the National Government to be exposed of according to its discretion. Here
it did so in obedience to the constitutional mandate of promoting social justice to insure the well-being
and economic security of the people.39 (Underscoring ours)
chanrobleslaw
D. R.A. No. 8562 was not intended

to expropriate the subject lots titled
in the name of the Province of
Bataan, but to confirm their
character as communal land of the
State and to make them available
for disposition by the National
Government.
The case of Rabuco v. Hon. Villegas,40 decided in 1974, is a virtual reprise of the 1968 case
of Salas. In Rabuco, the constitutionality of R.A. No. 312041 was challenged, which provided for the
subdivision of Lot No. 21-B, Block 610 of the Cadastre of the City of Manila, containing about 10,198
sq m into residential lots, and the sale thereof to the tenants and bona fide occupants. The law
declared Lot No. 21-B "reserved as communal property" and then ordered it converted into
"disposable and alienable lands of the State."42
The Court ruled that, like R.A. No. 4118 in Salas, R.A. No. 3120 was intended to implement the social
justice policy of the Constitution and the government's program of land for the landless. Thus, the sale
of the subdivided lots to the bona fide occupants by authority of Congress was not an exercise of
eminent domain or expropriation without just compensation, which would have been in violation of
Section 1(2),43 Article III of the 1935 Constitution, but simply a manifestation of its right and power to
deal with State property.44 "It is established doctrine that the act of classifying State property calls for
the exercise of wide discretionary legislative power which will not be interfered with by the
courts."45 In Rabuco, the rule in Salas was reiterated that property of the public domain, although
titled to the local government, is held by it in trust for the State. It stated:
The Court [in Salas] reaffirmed the established general rule that "regardless of the source or
classification of land in the possession of a municipality, excepting those acquired with its own funds in
its private or corporate capacity, such property is held in trust for the State for the benefit of its
inhabitants, whether it be for governmental or proprietary purposes. It holds such lands subject to
the paramount power of the legislature to dispose of the same, for after all it owes its creation to it as
an agent for the performance of a part of its public work, the municipality being but a subdivision or
instrumentality thereof for purposes of local administration. Accordingly, the legal situation is the
same as if the State itself holds the property and puts it to a different use" and stressed that "the
property, as has been previously shown, was not acquired by the City of Manila with its own funds in
its private or proprietary capacity. That it has in its name a registered title is not questioned, but this
title should be deemed to be held in trust for the State as the land covered thereby was part of the
territory of the City of Manila granted by the sovereign upon its creation." 46
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E. The State's policy to promote

local autonomy and to devolve the
powers of the National Government
to its political subdivisions has for
its purpose to improve the quality
of local governance.
Sections 2 and 3, Article X of the 1987 Constitution, relied upon by the petitioner, provide: chanRoblesvirtualLawlibrary
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive
and accountable local government structure instituted through a system of decentralization with
effective mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the qualifications,
election, appointment and removal, term, salaries, powers and functions and duties of local officials,
and all other matters relating to the organization and operation of the local units.
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Pursuant to its mandate, the Congress passed the LGC in 1991 to spell out the above-declared policy
of the State, which is now amplified in Section 2 of R.A. No. 7160. It states, as follows: chanRoblesvirtualLawlibrary
Sec. 2. Declaration of Policy. - (a) It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them
to attain their fullest development as self-reliant communities and make them more effective partners
in the attainment of national goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The process
of decentralization shall proceed from the National Government to the local government units.
xxxx
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Also invoked by the petitioners are Sections 18 and 22 of the LGC, which state as follows: chanRoblesvirtualLawlibrary
Sec. 18. Power to Generate and Apply Resources. — Local government units shall have the power and
authority to establish an organization that shall be responsible for the efficient and effective
implementation of their development plans, program objectives and priorities; to create their own
sources of revenues and to levy taxes, fees, and charges which shall accrue exclusively for their use
and disposition and which shall be retained by them; to have a just share in national taxes which shall
be automatically and directly released to them without need of any further action; to have an
equitable share in the, proceeds from the utilization and development of the national wealth and
resources within their respective territorial jurisdictions including sharing the same with the
inhabitants by way of direct benefits; to acquire, develop, lease, encumber, alienate, or otherwise
dispose of real or personal property held by them in their proprietary capacity and to apply their
resources and assets for productive, developmental, or welfare purposes, in the exercise or
furtherance of their governmental or proprietary powers and functions and thereby ensure their
development into self-reliant communities and active participants in the attainment of national goals.
Sec. 22. Corporate Powers. - x x x
xxxx
(d) Local government units shall enjoy full autonomy in the exercise of their proprietary functions and
in the management of their economic enterprises, subject to the limitations provided in this Code and
other applicable laws.
chanrobleslaw
In the instant petition, it is essentially the petitioner's assertion that the State's policy of local
autonomy and decentralization endows the Province of Bataan with patrimonial rights to use or
dispose of the subject lots according to its own development plans, program objectives and priorities.
The Court disagrees.
Local autonomy and decentralization of State powers to the local political subdivisions are the results
of putting restraints upon the exercise by the Presidents of executive powers over local governments.
Section 4, Article X of the 1987 Constitution reads in part: "The President of the Philippines shall
exercise general supervision over local governments." As with the counterpart provisions of our earlier
Constitutions, the aforesaid provision has been interpreted to exclude the President's power of control
over local governments.47 The Constitutions of 1935, 1973 and 1987 have uniformly differentiated the
President's power of supervision over local governments and his power of control of the executive
departments, bureaus and offices.48 In Pimentel, Jr. v. Hon. Aguirre,49 it was held that Section 4
confines the President's power over local governments to one of general supervision, thus: chanRoblesvirtualLawlibrary
Under our present system of government, executive power is vested in the President. The members of
the Cabinet and other executive officials are merely alter egos. As such, they are subject to the power
of control of the President, at whose will and behest they can be removed from office; or their actions
and decisions changed, suspended or reversed. In contrast, the heads of political subdivisions are
elected by the people. Their sovereign powers emanate from the electorate, to whom they are directly
accountable. By constitutional fiat, they are subject to the President's supervision only, not control, so
long as their acts are exercised within the sphere of their legitimate powers. By the same token, the
President may not withhold or alter any authority or power given them by the Constitution and the
law.50
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On the other hand, local autonomy and decentralization of State powers to the local political
subdivisions have for their object to make governance directly responsive at the local levels by giving
them a free hand to chart their own destiny and shape their future with minimum intervention from
central authorities, thereby rendering them accountable to their local constituencies. 51 Thus, [h]and in
hand with the constitutional restraint on the President's power over local governments is the state
policy of ensuring local autonomy"52 As farther explained in Pimentel, Jr.:chanRoblesvirtualLawlibrary
Under the Philippine concept of local autonomy, the national government has not completely
relinquished all its powers over local governments, including autonomous regions. Only administrative
powers over local affairs are delegated to political subdivisions. The purpose of the delegation is to
make governance more directly responsive and effective at the local levels. In turn, economic, political
and social development at the smaller political units are expected to propel social and economic
growth and development. But to enable the country to develop as a whole, the programs and policies
effected locally must be integrated and coordinated towards a common national goal. Thus, policy-
setting for the entire country still lies in the President and Congress. As we stated in Magtajas v. Pryce
Properties Corp., Inc., municipal governments are still agents of the national government. 53 (Citation
omitted)
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It is clear, then, that local autonomy and decentralization do not deal directly with Issues concerning
ownership, classification, use or control of properties of the public domain held by local governments.
The State retains power over property of the public domain, exercised through Congress.
F. The grant of autonomy to local

governments, although a radical
policy change under the 1973 and
1987 Constitutions, does not affect
the settled rule that they possess
property of the public domain in
trust for the State.
The 1973 Constitution devoted an entire Article, Article XI, consisting of five sections, to laying down
its policy for the empowerment of the local governments. The 1987 Constitution, in turn, fully devotes
all 21 sections of its Article X for local government. It introduces significant new provisions, such as
the establishment of autonomous regions (Section 18) and the guarantee of just share of the local
governments in the national taxes and equitable share in the proceeds from the utilization of the
national wealth (Sections 6 and 7). It was unlike in the 1935 Constitution, which simply provided in
Section 10 of Article VII, dealing with the Executive Department, that "[t]he President shall have
control of all executive departments, bureaus or offices, exercise general provision over all local
governments as may be provided by law, and take care that the laws be faithfully executed."
The erudite Justice Enrique Fernando (Justice Fernando), in his highly instructive separate concurring
opinion in Rabuco,54 did at first admit to doubts as to the continuing authoritativeness of Province of
Zamboanga del Norte and Salas, both promulgated before the effectivity of the 1973 Constitution, in
view of the significant innovations introduced therein pertaining to the autonomy of local
governments. He stated that the goal of the 1973 Constitution was "the fullest autonomy to local
government units consistent with the basic theory of a unitary, not a federal, polity," 55 hoping thereby
to attain "their fullest development as self-reliant communities." 56 According to him, under the 1973
Constitution, "[tjhings have changed radically," 57 noting that under the 1935 Constitution, "[i]t could
hardly be assumed x x x that x x x the [local governments] could justifiably lay claim to real
autonomy."58 He observed thus: chanRoblesvirtualLawlibrary
We start with the declared principle of the State guaranteeing and promoting the autonomy of local
government units. We have likewise noted the earnestness of the framers as to the attainment of such
declared objective as set forth in the specific article on the matter. It is made obligatory on the
National Assembly to enact a local government code. What is more, unlike the general run of statutes,
it cannot be amended except by a majority vote of all its members. It is made to include "a more
responsive and accountable local government structure with an effective system of recall," with an
expressed reference to "qualifications, election and removal, term, salaries, powers, functions, and
duties of local officials, [as well as] all other matters relating to the organization and operation of the
local units." Mention is likewise made of the "powers, responsibilities, and resources," items that are
identified with local autonomy. As if that were not enough, the last sentence of this particular
provision reads: "However, any change in the existing form of local government shall not take effect
until ratified by a majority of the votes cast in a plebiscite called for the purpose." To the extent that
the last section requires that the creation, division, merger, abolition or alteration of a boundary of a
province, city, municipality, or barrio, must be in accordance with the criteria established in the local
government code and subject to the approval by a majority of the votes cast in a plebiscite in such
unit or units, the adherence to the basic principle of local self government is quite clear. Equally
significant is the stress on the competence of a province, city, municipality or barrio "to create its own
sources of revenue and to levy taxes subject to such limitations as may be provided by law." The care
and circumspection with which the framers saw to the enjoyment of real local self-government not
only in terms of administration but also in terms of resources is thus manifest. Their intent is
unmistakable. Unlike the case under the 1935 Constitution, there is thus a clear manifestation of the
presumption now in favor of a local government unit. It is a well-nigh complete departure from what
was. Nor should it be ignored that a highly urbanized city "shall be independent" not only of the
national government but also of a province. Would it not follow then that under the present
dispensation, the moment property is transferred to it by the national government, its control over the
same should be as extensive and as broad as possible, x x x.59 (Citations omitted)
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Up to that point, it could almost be presumed that Justice Fernando would dissent from the
lucid ponencia of Justice Claudio Teehankee (Justice Teehankee), borne of logical doubts as to
whether Province of Zamboanga del Norte and Salas still retained their unimpaired doctrinal force
under the then new 1973 Constitution. But two considerations kept him reined in, so to speak. One
was Justice Teehankee's "reference to the ratio decidendi of [Salas] as to the trust character
impressed on communal property of a municipal corporation, even if already titled," 60 "regardless of
the source of classification of land in the possession of a municipality, excepting those acquired with
its own funds in its private or corporate capacity." 61 Justice Fernando acknowledged that the local
government "holds such [communal property] subject to the paramount power of the legislature to
dispose of the same, for after all it owes its creation to it as an agent for the performance of a part of
its public work, the municipality being but a subdivision or instrumentality thereof for purposes of local
administration."62
Rabuco stressed that the properties in controversy were not acquired by the City of Manila with its
own private funds. Thus, according to Justice Fernando, "That [the City of Manila] has in its name a
registered title is not questioned, but this title should be deemed to be held in trust for the State as
the land covered thereby was part of the territory of the City of Manila granted by the sovereign upon
its creation."63 This doctrine, according to Justice Fernando, has its basis in the Regalian Doctrine and
is unaffected by the grant of extensive local autonomy under the 1973 Constitution. "It is my view
that under the [1973] Constitution, as was the case under the 1935 charter, the holding of a
municipal corporation as a unit of state does not impair the plenary power of the national government
exercising dominical rights to dispose of it in a manner it sees fit, subject to applicable constitutional
limitations as to the citizenship of the grantee."64
The other consideration noted by Justice Fernando in the ponencia of Justice Teehankee in Rabuco he
found further compelling was "the even more fundamental principle of social justice, which was given
further stress and a wider scope in the present Constitution." 65 He concluded that R.A. No. 3120, like
R.A. No. 4118, was intended to implement the social justice policy of the Constitution and the
government program of land for the landless, and was not "intended to expropriate the property
involved but merely to confirm its character as communal land of the State and to make it available
for disposition by the National Government."66
G. The Province of Bataan has the

duty to provide an adequate
security for its loans with the LBP,
without defeating BPSC's right to
hold title to the contested lots.
The RTC ordered the Province of Bataan to deliver the owner's duplicate copy of OCT No. N-182 to the
Register of Deeds of Bataan, free from any lien or encumbrance, to execute the corresponding deed of
conveyance in favor of BPSC, and to cause the transfer and registration of the title to and in the name
of the said college. The Province of Bataan erroneously believed that it could mortgage the subject
lots, notwithstanding that it held the same in trust for the State and despite the fact that the said lots
were actually being occupied by two government schools. As the RTC urged, then, the Province of
Bataan must address this issue of security for its loans with LBP. It cannot complain that its
compliance with the order of the RTC might violate the non-impairment clause of the Constitution,
since its duty to provide a replacement security for its loans with LBP is clear.
H. BPSC is entitled to a writ of
mandamus.
Section 3, Rule 65 of the 1997 Rules of Civil Procedure provides that a writ of mandamus shall issue
where a tribunal, corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty, to command the respondent to do the act required to be
done to protect the rights of the petitioner. Herein petitioner has argued that the mandamus
applicants are not entitled thereto because they are not real parties in interest. It is a rule re-echoed
in a long line of cases that every action must be prosecuted or defended in the name of the real party
in interest, meaning "the party who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit."67
At issue in this petition is Section 24 of R.A. No. 8562, which directs that "[a]ll parcels of land
belonging to the government occupied by the [MLLSAT] and the [BCC] are hereby declared to be the
property of the [BPSC] and shall be titled under that name." There is no dispute that the Congress has
expressly intended to entrust to BPSC the titles to the subject lots. Being the sole beneficiary of
Section 24 of R.A. No. 8562, BPSC is the real party in interest, and is entitled to mandamus to enforce
its right thereunder.68
WHEREFORE, in view of the foregoing, the petition for review on certiorari is DENIED. The Decision
of the Court of Appeals dated February 7, 2006 in CA-G.R. SP No. 85902 is AFFIRMED.
SO ORDERED. ChanRoblesVirtualawlibrary
Velasco, Jr., (Chairperson), Peralta, Perez, and Jardeleza, JJ., concur.
Endnotes:
Rollo, pp. 10-26.

1
2
Penned by Associate Justice Arcangelita M. Romilla-Lontok, with Associate Justices Marina L. Buzon
and Aurora Santiago-Lagman concurring; CA rollo, pp. 27-34.
3
Rollo, p. 14.
4
Id. at 14-15.
5
Id. at 15.
6
7
Id. at 29.
8
Id. at 28.
9
Id. at 12-20.
10
Id. at 27-34.
11
150-B Phil. 670 (1972).
12
13
Rollo, pp. 154-155.
14
Id. at 163.
15
Supra note 11.
Rollo, pp. 163-165.

16
17
Id. at 165.
18
Id. at 165-166.
19
Id. at 155-162.
20
Section 8, Article XIV of the 1973 Constitution states that "[a]ll 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, x x x."
21
212 US 449, 457 (1909).
22
150-C Phil. 542 (1972).
23
Id. at 547-548.
24
Bernas, S.J., The 1987 Constitution of the Philippines (1996), pp. 1009-1010.
25
131 Phil 446 (1968).
26
Id. at 454.
27
Id. at 456.
28
Supra note 25.
29
Id. at 455.
30
Id. at 459.
31
Id.
32
605 Phil. 244 (2009).
33
Id. at 277-278.
34
Salas, etc., et al. v. Hon. Jarencio, etc., et al, supra note 11, at 679.
35
Id. at 675.
36
Id. at 675-679.
37
Id. at 680-681.
38
Id. at 681-682.
39
Id. at 686-688.
40
154 Phil. 615 (1974).
41
AN ACT CONVERTING CERTAIN PARCELS OF LAND IN THE CITY OF MANILA WHICH ARE RESERVED
AS COMMUNAL PROPERTY INTO DISPOSABLE OR ALIENABLE LANDS OF THE STATE AND PROVIDING
FOR THEIR SUBDIVISION AND SALE, enacted on June 17, 1961.
Rabuco v. Hon. Villegas, supra note 40, at 619, 623.
42
43
Article III, Section 1(2) reads: "Private property shall not be taken for public use without just
compensation."
Rabuco v. Hon. Villegas, supra note 40, at 625-626.

44
45
Id. at 624.
46
Id. at 625.
The National Liga ng Mga Barangay v. Judge Paredes, 482 Phil. 331, 355 (2004).
47
See 1935 CONSTITUTION, Art. VII, Sec. 10; 1973 CONSTITUTION, Art. II, Sec. 10; 1987
48
CONSTITUTION, Art. VII, Sec. 17 and Art. X, Sec. 4.
49
391 Phil. 84 (2000).
50
Id. at 100.
51
Id. at 101-102, citing Limbona v. Mangelin, 252 Phil. 813, 825 (1989).
52
Id. at 100.
53
Id. at 102.
54
Supra note 40, at 626-634.
55
Id. at 628.
56
Id.
57
Id. at 630.
58
Id.
59
Id. at 630-631.
60
Id. at 632.
61
Id.
62
Id.
63
Id.
64
Id. at 633.
65
Id. at 633-634.
66
Id. at 634.
67
Republic of the Philippines v. Agunoy, Sr., 492 Phil. 118, 131 (2005).
68
Incidentally, on March 22, 2007, the Congress passed R.A. No. 9403, which further converted the
BPSC into a State University, to be known as the Bataan Peninsula State University, and integrating
therewith certain public schools land colleges in Bataan. Section 19 thereof also declares that all
parcels of land belonging to the Government occupied by the BPSC, the BCC in the City of Balanga,
the Bataan National School for Filipino Craftsmen in the Municipality of Orani and the Bataan State
College, are the property of the University, and shall be titled under that name.
THIRD DIVISION
G.R. No. 192132, September 14, 2016
HEIRS OF ZOSIMO Q. MARAVILLA, NAMELY, ZOSIMO W. MARAVILLA, JR., YVETTE

MARAVILLA AND RICHARD MARAVILLA, REPRESENTED BY ZOSIMO W. MARAVILLA,
JR., Petitioners, v.PRIVALDO TUPAS, Respondent.
DECISION
PERALTA, J.:
Indeed, the well-settled principle of immutability of final judgments demands that once a judgment
has become final, the winning party should not, through a mere subterfuge, be deprived of the fruits
of the verdict.1 There are, however, recognized exceptions to the execution as a matter of right of a
final and immutable judgment, one of which is the existence of a supervening event. 2
This is to resolve the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated May
25, 2010 seeking to set aside the Decision 3 dated November 11, 2009 and the Resolution dated March
17, 2010 of the Court of Appeals (CA) that declared null and void and set aside the Orders dated
February 2, 2009 and April 7, 2009 of the Regional Trial Court (RTC), Kalibo, Aklan directing the
execution of the latter's Decision dated March 31, 2003 that became final and executory on May 21,
2007.
The facts follow.
According to respondent, he, along with the other heirs of the late Asiclo S. Tupas, has maintained the
occupation and possession of certain portions of the property subject of this case. Thereafter, the late
Zosimo Maravilla claimed ownership over 10,000 square meters of said property by virtue of a Deed of
Sale dated February 8, 1975, purportedly executed between him and the late Asiclo S. Tupas. The
property situated in Diniwid, Barangay Balabag, Malay, Aklan, is more particularly described as
follows:
A parcel of land situated at Barangay Balabag, Malay, Aklan bounded on the North by Gil Aguirre, F.
Flores; South by Antonio Tupas & T. Sacapaño, East by Asicio (sic) Tupas, and West by Seashore L.
Villanueva of approximately 1,000 hectares, assessed at P2,610.00 under Tax Declaration No. 1304,
in the name of Maravilla, Ozosimo A. for the year of 1985.
Maravilla filed a case for quieting of title with recovery of possession and damages before Branch 9 of
the RTC of Kalibo, Aklan, docketed as Civil Case No. 4338. The dispositive portion of the
Decision4 reads:
WHEREFORE, decision is hereby rendered as follows:
1. Declaring the deed of sale (Exhs. A & 1) executed by Asiclo Tupas in favor of plaintiff Zosimo
Maravilla over one-half (½) portion or about 5,000 sq. m. of the conjugal property of the former as
legal and valid;
2. Ordering that the portion sold be delineated from the shoreline with a length of at least 28 m. long
from the southwestern direction traversing in a straight line towards northeastern part between points
5-6 embracing an area of about 5,000 sq. m., depicted in Exh. G, interpreted in relation to amended
commissioner's report and sketch plan, dated August 25, 1992 (Exh. L) across Lots B and A; with the
northern portion of 5,000 sq. m. awarded to the defendants and the southern portion of 5,000 sq. m.
to plaintiff; Defendants' cottages that may be found in plaintiff's one- half portion shall be removed by
the former at their expense within 30 days from the finality of this decision. The existing muniments
of the parties to the land in question like tax declarations, certificates of title, and other related
documents are ordered modified or corrected to conform to this decision;
3. Defendants are ordered jointly and severally, to refund plaintiff the amount of seven thousand
pesos (P7,000.00), Philippine currency, representing the consideration of the ½ portion of the land in
question herein awarded to them; and
4. Plaintiff is ordered to pay defendants for attorney's fees and litigation expenses in the sum of ten
thousand pesos (P10,000.00) and the costs of the suit.
SO ORDERED.5
Maravilla filed an appeal with the CA questioning the RTC's decision that he is only entitled to ½ of the
area sold even if the validity of the deed of sale was upheld. The CA, in a Decision 6 dated August 28,
1996, ruled that:
WHEREFORE, the Decision of the court a quo is SET ASIDE and another judgment is issued declaring
Zosimo Maravilla the owner of 10,000 sq. m. undivided share in the 36,382 sq. m. parcel of land of
Asiclo S. Tupas and Francisca Aguirre and directing that this land be partitioned, either extra-judicially
or judicially, and that Maravilla's portion of the property be determined; and ordering the defendants
to turn over possession of the portion allocated to Maravilla.
Special Proceedings No. 39517 is DISMISSED.
No pronouncement as to costs.
SO ORDERED.7
On October 21, 1999, Maravilla filed another case for partition and damages before the RTC of Kalibo,
Aklan, Branch 6, and on March 31, 2003, it disposed of the case as follows: 8
WHEREFORE, judgment is hereby rendered containing that the one-hectare portion in the Sketch Plan
[Annex B-1; Complaint] is the rightful share of the plaintiff.
Defendants are ordered to restore possession thereof to the plaintiff, and to pay jointly and severally
the latter the agreed monthly reasonable compensation for the use and occupation thereof of
P5,000.00 starting in 1990 until possession is fully restored to plaintiff.
Costs against the defendants.

SO ORDERED.9
Respondent appealed the decision with the CA, and in a Decision 10 dated April 13, 2007, the latter
dismissed the appeal on the ground of res judicata. The CA opined that the first case, the one for
quieting of title and the second case for partition, both presented identity of facts and evidence and
that the truth of the matter is, part of the judgment of the first case ordered for partition of the
subject parcel of land to delimit the portion owned by herein petitioner.
On October 31, 2008, Maravilla filed a Motion for Execution 11 of the March 31, 2003 Decision of the
RTC-Branch 6 of Kalibo, Aklan.
While the motion for execution was pending before the RTC-Branch 6 of Kalibo, Aklan, this Court, on
October 8, 2008, declared Boracay as government property in the consolidated cases of The Secretary
of the Department of Environment and Natural Resources (DENR), et al. v. Yap, et al. and Sacay, et
al. v. the Secretary of the DENR, et al. (Boracay Decision)12
On February 2, 2009, a Resolution was issued by the RTC granting the motion for execution.
Respondent filed a motion for reconsideration, but the RTC denied the same in an Order dated April 7,
2009.
Thus, respondent filed a petition for certiorari with the CA assailing the Resolution and the Order
issued by the RTC. Respondent raised as an issue that the grant of the motion for execution is not in
accordance with this Court's decision in The Secretary of the Department of Environment and Natural
Resources (DENR), et al. v. Yap, et al. and Sacay, et al. v. the Secretary of the DENR, et al., a
supervening event, and that the RTC erred in not declaring as null and void the deed of sale of
unregistered land considering that Boracay has been classified as an inalienable land. The CA granted
the petition, thus:
Withal, the Petition is hereby GRANTED. The assailed Orders dated February 2, 2009 and April 7,
2009, respectively, issued by public respondent are hereby declared NULL and VOID and SET ASIDE.
SO ORDERED.13
Maravilla's motion for reconsideration was denied in a Resolution dated March 17, 2010, hence, the
present petition.14
Petitioners (the heirs of Maravilla) raise the following grounds:
In rendering the assailed Decision and Resolution, petitioners most humbly submit that the Court of
Appeals gravely erred in making the following legal conclusions that warrants the power of review and
supervision by the Honorable Supreme Court:
I. The Court of Appeals so far departed from the accepted and usual course of judicial proceedings
when it set aside the Orders of the Regional Trial Court granting execution of the 31 March 2003
Decision of the Regional Trial Court in relation to the 28 August 1996 [Decision] of the Court of
Appeals, both of which judgments have long become final and executory.
II. The Court of Appeals' finding that the Boracay Decision is a supervening event that prevents the
trial court from implementing the writ of execution is not in accord with the applicable decisions of this
Honorable Supreme Court. The Court of Appeals erred in finding that:
a. the Boracay Decision had a direct effect on the issue litigated and settled with finality between the
parties, and substantially changed the rights and relations between the parties;
b. with the declaration of Boracay as state-owned, the claim of herein petitioners of rights to the
Property is already without basis;
c. to allow execution of the judgment would be to give undue advantage to herein petitioners and
would be a miscarriage of justice.15
They also bring up the following arguments:
I. Petitioners are entitled as a matter of right to the execution of the judgments that have long
become final and executory.
II. The pronouncement of the Supreme Court in the Boracay Decision is not a supervening event:
A. The settled dispute between the parties as to who has the better right to the Property is distinct
and separate from the issue of titling sought in the Boracay Decision;
B. The Boracay Decision does not substantially change the rights and relations between the petitioners
and respondent that were already decided by the courts with finality;
C. Notwithstanding the Boracay Decision, it is still possible to execute the decision regarding the
partition and restoration of the possession of Property in favor of petitioners as against respondent;
III. The Boracay Decision does not render the execution sought by [the] petition as unjust or
inequitable that precludes the execution of the final and executory judgments. 16
Petitioners insist that the CA's Decision dated August 28, 1996 in the original case for Quieting of Title
with Recovery of Possession and Damages entitled petitioners to the restoration of their possession of
the property consisting of 10,000 sq. m. out of the 36,382 sq. m. tract of land, after the validity of the
sale to Maravilla by respondent's predecessor has been upheld by the court with finality. They further
claim that it is well entrenched in Our rules and jurisprudence that the prevailing party may move for
the execution of a decision that has become final and executory as a matter of right and the issuance
of the writ of execution becomes a ministerial duty of the court.
The pronouncement in the Boracay Decision, according to petitioners, is not a supervening event. The
Boracay Decision is simply a recognition of the right of the State to classify the island and to pave the
way for the eventual titling or formalization of ownership claims of lands classified as alienable and
disposable, and as to whether or not petitioners may secure title to the property is an issue that has
not yet ripened into a legal controversy between petitioners and the State. Petitioners argue that the
settled dispute between the parties as to who has the better right to the property is distinct and
separate from the issue of titling sought in the Boracay Decision by the claimants therein.
Furthermore, petitioners do not contest the legal status of the land; what they assert is the
satisfaction of their right to enjoy whatever imperfect rights that their predecessors had validly
acquired from respondent's predecessor, as confirmed with finality by the courts.
The petition lacks merit.
The basic issue to be resolved is whether or not this Court's decision in The Secretary of the
Department of Environment and Natural Resources (DENR), et al. v. Yap, et al. and Sacay, et al. v.
the Secretary of the DENR, et al. can be considered as supervening event and if so, whether or not
such supervening event can prevent the execution of a judgment that has already attained finality.
In the present case, petitioners' basis of their claim over the subject property is the Deed of Sale of
Unregistered Land that the late Zosimo Maravilla executed with the late Asiclo S. Tupas. This Deed of
Sale has been acknowledged and adjudged by the RTC to be binding between the parties, and in fact,
has attained finality. This Court, however, in The Secretary of the Department of Environment and
Natural Resources (DENR), et al. v. Yap, et al. and Sacay, et al. v. the Secretary of the DENR, et
al.,ruled that the entire island of Boracay as state-owned except for lands already covered by existing
titles. To have a clearer view of the antecedents of the said case, the following are thus quoted:
On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the
National Reservation Survey of Boracay Island, which identified several lots as being occupied or
claimed by named persons.
On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 1801 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 3-82 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.
Respondents-claimants posited that Proclamation No. 1801 and its 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, 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.
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.
The RTC took judicial notice 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. The titles were issued on August 7, 1933.
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.
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. The Circular itself recognized private ownership
of lands. The trial court cited Sections 87 and 53 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.
The OSG moved for reconsideration, but its motion was denied. 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.
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. Hence, the present petition under
Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued
Proclamation No. 1064 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, Wilfredo Gelito, and other landowners
in Boracay filed with this Court an original petition for prohibition, mandamus, and nullification of
Proclamation No. 1064. They alleged 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.
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. 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. 17
The consolidated petitions basically raise the issue of whether or not private individuals may acquire
vested right of ownership over the island, considering that they have been in open and continued
possession for several years. With such factual antecedents, this Court adjudicated that Boracay is
classified as a public land, in particular, a forest land, thus:
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 DENR 109 and the National Mapping and Resource Information Authority 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.
Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island;
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 Constitution 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. The
discussion in Heirs of Amunategui v. Director of Forestry 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.
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. 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" and "areas declared as alienable and
disposable" 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.
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, coves 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.
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. 141 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.
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. Absent such classification, the land remains
unclassified until released and rendered open to disposition.
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.18
Therefore, the island, being owned by the State, can only be declared or made subject of private
ownership by the Government. And only the Government can determine the manner in which the
island should be disposed of or conveyed to private individuals, pursuant to the Regalian Doctrine as
this Court ruled in Secretary of the Department of Environment and Natural Resources v. Yap:19
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.20 The doctrine has been consistently adopted under the 1935, 1973, and 1987
Constitutions.21
All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the
State.22 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. 23 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.24
It was only in 2006 when certain parts of Boracay became agricultural land when then President Gloria
Macapagal-Arroyo issued Proclamation No. 1064, positively declaring parts of Boracay as alienable and
opening the same to private ownership.
As such, the CA is then correct in ruling that with this Court's pronouncement that Boracay is state-
owned, petitioners' claim of ownership over the subject property is negated, thus:
With the latest pronouncement of the Supreme Court of Boracay as state-owned, private respondent's
ownership over the property in dispute is defeated. As discussed at length by the highest tribunal in
the consolidated cases of The Secretary of DENR, et al. v. Yap, et al. in G.R. No. 167707 and Sacay, et
al. v. The Secretary of DENR, et al. in G.R. No. 173775, Boracay is an unclassified land of public
domain. Thus, where land is not alienable and disposable, possession of the land, no matter how long
cannot confer ownership or possessory right.
It follows then that Asicio (sic) S. Tupas was not in a position to sell that which he did not own in the
first place. This is because at the time the sale was entered into between private respondent and the
late Asicio (sic) S. Tupas, the land in dispute was not alienable and subject to disposition. Since
private respondent derives title from whatever right his predecessor-in-interest had, which
unfortunately Asicio (sic) S. Tupas had none, his claim is no longer tenable. Private respondent cannot
acquire a right greater than what his predecessor-in-interest had. To allow the execution of judgment
would be to give undue advantage to private respondent whose very basis of claim is no longer
tenable.25
cralawred
The above reasoning of the CA has its basis on a simple logic that one cannot dispose of a thing he
does not own. In this case, at the time of the sale of the subject property, the late Asiclo S. Tupas had
no right to sell a property that has not been declared alienable by the State; hence, he cannot pass
unto another any right or title to own or possess the land. Therefore, the "Sale of Unregistered Land"
entered into between the late Asiclo S. Tupas and the late Zosimo Maravilla on February 8, 1975,
previously considered valid and legitimate and became the basis used by the RTC to settle the dispute
between the parties as to who has the better to right to the property, has become null and void
because the subject property of the contract is a forest land and cannot be alienated at the time the
said deed of sale was executed. Article 1347 of the Civil Code provides that only things, which are not
outside the commerce of man, including future things, may be the objects of the contracts and Article
1409 of the Civil Code also states that contracts whose objects are outside the commerce of man are
non-existent and void ab initio.
With the above disquisitions, this Court's decision in The Secretary of the Department of Environment
and Natural Resources (DENR), et al. v. Yap, et al. and Sacay, et al. v. the Secretary of the DENR, et
al.is, therefore, considered as a supervening event that can stay the execution of a judgment that has
already attained finality. In Abrigo, et al. v. Flores, et al.26 this Court ruled that:
Once a judgment becomes immutable and unalterable by virtue of its finality, its execution should
follow as a matter of course. A supervening event, to be sufficient to stay or stop the execution, must
alter or modify the situation of the parties under the decision as to render the execution inequitable,
impossible, or unfair. The supervening event cannot rest on unproved or uncertain facts.
xxxx
We deem it highly relevant to point out that a supervening event is an exception to the execution as a
matter of right of a final and immutable judgment rule, only if it directly affects the matter already
litigated and settled, or substantially changes the rights or relations of the parties therein as to render
the execution unjust, impossible or inequitable.27 A supervening event consists of facts that transpire
after the judgment became final and executory, or of new circumstances that develop after the
judgment attained finality, including matters that the parties were not aware of prior to or during the
trial because such matters were not yet in existence at that time. 28 In that event, the interested party
may properly seek the stay of execution or the quashal of the writ of execution, 29 or he may move the
court to modify or alter the judgment in order to harmonize it with justice and the supervening
event.30 The party who alleges a supervening event to stay the execution should necessarily establish
the facts by competent evidence; otherwise, it would become all too easy to frustrate the conclusive
effects of a final and immutable judgment.31
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated May 25,
2010 of petitioners heirs of Zosimo Q. Maravilla is DENIED for lack of merit. Consequently, the
Decision dated November 11, 2009 and the Resolution dated March 17, 2010 of the Court of Appeals
are AFFIRMED.
SO ORDERED.
Velasco, Jr., (Chairperson), Perez, Reyes, and Jardeleza, JJ., concur.
Endnotes:
1
Gomez v. Hon. Presiding Judge, RTC, Br. 15, Ozamis City, 319 Phil. 555, 562 (1995); Johnson &
Johnson (Phils.), Inc., v. CA, 330 Phil. 856, 871 (1996).
Natalia Realty, Inc. v. Court of Appeals, 440 Phil. 1, 23 (2002).

2
3
Penned by Associate Justice Franchito N. Diamante, with the concurrence of Associate Justices
Edgardo L. Delos Santos and Samuel H. Gaerlan.
4
Penned by Judge Pedro M. Icamina.
Rollo, pp. 145-146.

5
6
Penned by Associate Justice Salome A. Montoya, with the concurrence of Associate Justices Godardo
A. Jacinto and Maximiano C. Asuncion.
Rollo, p. 154.
7
8
Penned by Judge Niovady M. Marin.
Rollo, pp. 119-120.

9
10
Penned by Associate Justice Francisco P. Acosta, with the concurrence of Associate Justices Arsenio
J. Magpale and Agustin S. Dizon.
11
Rollo, pp. 179-183.
12
589 Phil. 156 (2008).
13
Rollo, p. 26.
14
Penned by Associate Justice Edgardo L. Delos Santos, with Associate Justices Samuel H. Gaerlan
and Socorro B. Inting, concurring; id. at 30-31.
15
Rollo, pp. 67-68.
16
Id. at 68-69.
The Secretary of the Department of Environment and Natural Resources (DENR), et al. v. Yap, et
17
al. and Sacay, et al. v. the Secretary of the DENR, et al., supra note 12, at 168-173. (Citations
omitted)
18
Id. at 190-195.
19
Zarate v. Director of Lands, G.R. No. 131501, July 14, 2004, 434 SCRA 322; Reyes v. Court of
20
Appeals, 356 Phil. 606, 624 (1998).
Republic v. Estonilo, G.R. No. 157306, November 25, 2005, 476 SCRA 265.
21
Zarate v. Director of Lands, supra note 20; Collado v. Court of Appeals, G.R. No. 107764, October 4,
22
2002, 390 SCRA 343; Director of Lands v. Intermediate Appellate Court, G.R. No. 73246, March 2,
1993, 219 SCRA 339.
Republic v. Estonilo, supra note 21; Zarate v. Director of Lands, supra 20.
23
De los Reyes v. Ramolete, G.R. No. L-47331, June 21, 1983, 122 SCRA 652, citing Gonzaga v. Court
24
of Appeals, G.R. No. L-27455, June 28, 1973, 51 SCRA 381.
25
cralawred Rollo, pp. 23-24.
26
711 Phil. 251 (2013).
Javier v. Court of Appeals, G.R. No. 96086, July 21, 1993, 224 SCRA 704, 712.
27
Natalia Realty, Inc. v. Court of Appeals, G.R. No. 126462, November 12, 2002, 391 SCRA 370, 387.
28
Dee Ping Wee v. Lee Hiong Wee, G.R. No. 169345, August 25, 2010, 629 SCRA 145, 168; Ramirez
29
v. Court of Appeals, G.R. No. 85469, March 18, 1992, 207 SCRA 287, 292; Chua Lee A.H. v. Mapa, 51
Phil. 624, 628 (1928); Li Kim Tho v. Go Siu Kao, 82 Phil. 776, 778 (1949).
Serrano v. Court of Appeals, G.R. No. 133883, December 10, 2003, 417 SCRA 415, 424-
30
425; Limpin, Jr. v. Intermediate Appellate Court, No. L-70987, January 30, 1987, 147 SCRA 516, 522-
523.
Abrigo v. Flores, supra, at 253; 261-262.

31
FIRST DIVISION
August 24, 2016
G.R. No. 199239
PERCY MALONESIO in his capacity as General Manager of AIR TRANSPORTATION

OFFICE (ATO), Petitioner
vs.
ARTURO M. JIZMUNDO, Respondent
RESOLUTION
This Petition for Review on Certiorari under Rule of the Rules of Court seeks tyo set aside the
1
Decision dated November 30, 2010 and the Resolution dated October 7, 2011 of the Court of
2 3
Appeals in CA-G.R. CEB-SP. No. 02831.
On July 4, 2006, respondent Arturo M. Jizmundo (Jizmundo) filed an action for Unlawful
Detainer with Preliminary Injunction against petitioner Percy Malonesio, in the latter's
capacity as General Manager of the Air Transportation Office (ATO). The case was docketed
as Civil Case No. 2735 in the Municipal Trial Court (MTC) of Kalibo, Aklan.
The property subject of the case is a parcel of land designated as Lot 4857-B of the Kalibo
Cadastre situated in Barangay·Pook, Kalibo, Aklan and covered by Transfer Certificate of Title
(TCT) No. T-18445.
In a Decision dated September 11, 2006, the MTC made the following findings of fact:
4
[T]here is no question that the subject property is registered and declared for taxation purposes
in the name of the heirs of the late Barto la Marquez, one of whom is [Jizmundo] in his capacity
as one of the grandchildren of the said deceased. It is shown that since 1985 up to the present,
defendant Air Transportation Office has been, and is still occupying and utilizing the land as
airport parking area without any formal agreement or payment of rentals to [ Jizmundo] or any
of his co-heirs. [ Jizmundo] and his coowners appear to have tolerated [the ATO's] long
occupation of the lot in question because of its promise to them that they will be paid the
reasonable value of their land. Taking this fact into account, it appears that when [the ATO]
occupied [Jizmundo's] subject property sometime in 1985, [Jizmundo] was already aware that
the [ATO] intended to acquire not only the physical possession of the land but also the legal
right to • possess and ultimately to own the subject property, shown by its promise to pay the
just compensation therefor. Disconsolately, said promise was not made good by the [ATO].
[Jizmundo ], for himself and in behalf of his other co-owners, now seeks to eject the [ATO] from
the land, alleging that the [ATO] has become a deforciant illegally withholding from [Jizmundo]
the possession thereof when it refused to vacate the premises after [Jizmundo's] last demand
(Annex "C"), which it received on June 5, 2006 (Annex "D"). [Jizmundo] filed the instant case
on July 4, 2006, very well within one year from the date he made the last demand to vacate. 5
The ATO belatedly filed its answer to the complaint, raising special and affirmative defenses
such as the failure to implead the Republic of the Philippines as an indispensable party and the
doctrine of estoppel by laches. Jizmundo, thereafter, filed a Motion to Render Judgment, which
the MTC granted in its Order dated August 23, 2006.
In the above-quoted Decision dated September 11, 2006, the MTC, however, dismissed
Jizmundo' s complaint. The MTC ruled that the named defendant was Malonesio, who was
sued in his capacity as the General Manager of the ATO. As such, any claim against him or the
ATO is in reality a claim against the Republic of the Philippines as it is the public in general
who has a direct interest over the subject matter of this case. Thus, the Republic of the
Philippines is an indispensable party and Jizmundo' s failure to implead it as a party defendant
in the complaint gave the MTC no authority to validly and effectively grant the reliefs prayed for.
Jizmundo appealed the MTC ruling to the Regional Trial Court (R TC) of Kalibo, Aklan, Branch
4, which appeal was docketed as Civil Case No. 7925. Jizmundo argued that the failure to imp
lead an indispensable party is not a ground for the dismissal of the complaint. In such a case, it
is the duty of the MTC to stop the trial and order the inclusion of the indispensable party.
Jizmundo also averred that the ATO is not immune from suit as it is performing proprietary
functions.
In a Decision dated April 17, 2007, the RTC affirmed the judgment of the MTC. The trial court
6
brushed aside the argument of Jizmundo on non-joinder of parties, ruling that the same was
inapplicable under the Rule on Summary Procedure given that there is a limited period of time
for such proceedings. The RTC also ruled that the ATO is immune from suit as it is an
instrumentality of the Republic of the Philippines.
Jizmundo sought the reversal of the above RTC ruling in a Petition for Review under Rule 42 of
the Rules of Court filed before the Court of Appeals. The petition was docketed as CA-G.R.
CEB-SP. No. 02831.
While the petition was pending before the appellate court, the Civil .Aviation Authority Act of
2008 was passed on March 4, 2008. In accordance therewith, the ATO was abolished and all
7
its powers were transferred to the Civil Aviation Authority of the Philippines (CAAP).
On November 30, 2010, the Court of Appeals. rendered its assailed decision, which decreed:
WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED. The
Decision dated 17 April 2007 of the Regional Trial Court, Branch 4, Kalibo, Aldan in Civil Case
No. 7925, affirming in toto the Decision dated 11 September 2006 of the Municipal Trial Court
of Kalibo, Aldan in Civil Case No.2735 for Unlawful Detainer With Preliminary Injunction, is
hereby REVERSEDand SET ASIDE.
The respondent is ordered to restore to petitioner possession of the property.
No pronouncement as to costs. 8
The appellate court cited the ruling of the Court in Civil Aeronautics Administration v. Court of
Appeals, which declared that "as the CAA was created to undertake the management of
9
airport operations which primarily involve proprietary functions, it cannot avail of the immunity
from suit accorded to government agencies performing strictly governmental functions." Being
the successor-in-interest of the CAA, thus inheriting its functions, the Court of Appeals ruled
that the ATO was also not immune from suit. Thus, there was no reason to hold that the
Republic of the Philippines was an indispensable party in the case at bar.
The Court of Appeals further ruled that if possession is by tolerance, such possession
becomes illegal upon demand to vacate should the possessor refuse to comply with such
demand. When Jizmundo made a demand on the ATO to vacate the subject property, the
forbearance ceased and the occupancy of ATO became unlawful. Jizmundo's act of filing the
ejectment suit was, thus, a proper remedy against the ATO. The Court of Appeals also denied
for being uncorroborated the claim of Jizmundo of ₱20,000.00 per month as rental or
reasonable compensation for the use and occupation of the subject property.
Malonesio filed a motion for reconsideration but the same was denied in the assailed
Resolution dated October 7, 2011.
Malonesio, thus, filed this petition for review on certiorari, arguing that the Court of Appeals
erred: (1) in ordering the ATO to surrender possession of the subject property that is presently
used for the operation of the Kalibo, Aldan Domestic and International Airport; and (2) in
reversing the dismissal of the case, which dismissal was grounded on the fact that the
Republic of the Philippines was not impleaded as an indispensable party.
Malonesio insists that the ATO (now CAAP) is an institution without a personality that is
separate and distinct from the government such that any action against the ATO must be
brought against the government and not the ATO alone. Thus, the action should have been
brought against the real party-in-interest - the Republic of the Philippines. Malonesio posits that
the joinder of indispensable parties is mandatory and a complaint may be dismissed if an
indispensable party is not imp leaded in the complaint.
Malonesio further avers that the Court of Appeals judgment of ordering the restoration of the
possession of the subject property to Jizmundo is contrary to public policy and existing
jurisprudence as the property is where the ATO's (now CAAP) existing facilities and structures
are located. Said facilities and structures are vital to the country's civil aviation and airport
operation as they are used by the public for international and domestic travel, which is a public
purpose.
Lastly, Jizmundo was arguably estopped from questioning the CAAP's occupation and
possession over the subject property since for more than 20 years, Jizmundo neither bothered
to question the said possession nor did he raise his objections when the ATO constructed
clearly visible permanent improvements.
In his comment tb the petition, Jizmundo pointed out that the courts a quo found that the ATO's
possession of the subject property was by mere tolerance and had never been adverse.
Jizmundo claims that Malonesio failed to present any evidence to prove that Jizmundo was
guilty of laches. Jizmundo also argues that he cannot be deprived of his property for the sake
of public convenience. He insists that in Air Transportation Office v. Ramos, the Court ruled
10
that the ATO could be sued without the State's consent.
Finally, Jizmundo pleads that the continued occupation of the subject property by the ATO
without the payment of rental or just compensation despite the income derived therefrom is
unjustly causing grave and irreparable damage to the lawful owners of the subject property.
Thus, it is necessary that the Court of Appeals' order to restore the possession of the subject
property be immediately executed.
The Court grants the petition.
Firstly, the Court agrees with Jizmundo that the ATO may not claim immunity from suit such
that there would be a need to implead the Republic of the Philippines as the real party-in-
interest. Indeed, in Air Transportation Office v. Ramos, the Court definitively ruled on this
11
issue in this wise:
In our view, the [Court of Appeals] thereby correctly appreciated the juridical character of the A
TO as an agency of the Government not performing a purely governmental or sovereign
function, but was instead involved in the management and maintenance of the Loakan Airport,
an activity that was not the exclusive prerogative of the State in its sovereign capacity. Hence,
the ATO had no claim to the State's immunity from suit. x x x. (Emphasis supplied.)
Moreover, the Court also held in the above case that the issue of whether the ATO could be
sued without the State's consent had been rendered moot by the passage of the Civil Aviation
Authority Act of 2008, which abolished the ATO and transferred all its powers, duties and
12
rights to the CAAP. Under Section 23(a) of Republic Act No. 9497, one of the corporate
13
powers vested in the CAAP was the power to sue and be sued.
In Deutsche Gesellschaft Fur Technische Zusammenarbeit v. Court of Appeals, we declared

14
that:
State immunjty from suit may be waived by general or special law. The special law can take the
form of the original charter of the incorporated government agency. Jurisprudence is replete
with examples of incorporated government agencies which were ruled not entitled to invoke
immunity from suit, owing to provisions in their charters manifesting their consent to be sued.
These include the National Irrigation Administration, the former Central Bank, and the National
Power Corporation. In SSS v. Court of Appeals, the Court through Justice Melencio-Herrera
explained that by virtue of an express provision in its charter allowing it to sue and be sued, the
Social Security System did not enjoy immunity from suit x x x. (Citations omitted.)
Therefore, by virtue of the express provision of Section 23(a) of Republic Act No. 9497, the
CAAP also does not enjoy immunity from suit.
Secondly, we cannot uphold Malonesio's contention that Jizmundo and his co-heirs may no
longer question the ATO's ownership or possession of the subject property on the ground of !
aches or estoppel. Time and again, we have held that the owner of registered land does not
lose his rights over the property on the ground of !aches as long as the opposing claimant's
possession was merely tolerated by the owner. In Ocampo v. Heirs of Bernardino Dionisio, we
explained:
Equally untenable is the petitioners' claim that the respondents' right to recover the possession
of the subject property is already barred by laches. As owners of the subject property, the
respondents have the right to recover the possession thereof from any person illegally
occupying their property. This right is imprescriptible. Assuming arguendo that the petitioners
indeed have been occupying the subject property for a considerable length of time, the
respondents, as lawful owners, have the right to demand the return of their property at any
time as long as• the possession was unauthorized or merely tolerated, if at all.
Jurisprudence consistently holds that "prescription and laches can not apply to registered land
covered by the Torrens system" because "under the Property Registration Decree, no title to
registered land in derogation to that of the registered owner shall be acquired by prescription or
adverse possession." 15
We find no reason to disturb the MTC 's factual finding, which was affirmed by the Court of
Appeals, that the ATO's possession of the subject property was, and continues to be, by mere
tolerance of the heirs of the registered owner.
Be that as it may, we find that, contrary to the ruling of the Court of Appeals, Jizmundo no
longer has the right to recover the possession of the subject property, through an action for
ejectment, given that the same is now devoted to public use as it forms part of the Kalibo,
Aldan Domestic and International Airport. Instead, Jizmundo and his co-heirs, as lawful
owners, have the right to be compensated for the value thereof.
To recall, the courts a quo found that since 1985, the ATO occupied and possessed the subject
property as an airport parking area without any formal agreement or the payment of rentals to
Jizmundo or his co-heirs. Jizmundo and his co-heirs tolerated the ATO's possession in view of
the latter's promise that the heirs would be paid the value of their property.
However, said promise was not fulfilled. Demands were made for the ATO to vacate · the
subject property, but the same went unheeded. After Jizmundo's final demand for the ATO to
vacate the subject property in June 2006, he filed the case for unlawful detainer.
Clearly, the ATO occupied and possessed the subject property from 1985 up to present without
first undertaking the process of expropriating the same or entering into a similar agreement
with its rightful owners.
In the very case relied upon by petitioner, Forfom Development Corporation v. Philippine
National Railways, the Court cited cases that involved the taking of private property without
16
the benefit of expropriation proceedings, the conversion thereof to public use, the failure of the
landowner to question the taking after such conversion, and the remedy of the landowner in
such a situation. Thus -
In Manila Railroad Co. v. Paredes, the first case in this jurisdiction in which there was an
attempt to compel a public service corporation, endowed with the power of eminent domain, to
vacate the property it had occupied without first acquiring title thereto by amicable purchase or
expropriation proceedings, we said:
x x x whether the railroad company has the capacity to acquire the land in dispute by virtue of
its delegated power of eminent domain, and, if so, whether the company occupied the land
with the express or implied consent or acquiescence of the owner. If these questions of fact
be decided in the affirmative, it is uniformly held that an action of ejectment or trespass
or injunction will not lie against the railroad company, but only an action for damages,
that is, recovery of the value of the land taken, and the consequential damages, if any.
The primary reason for thus denying to the owner the remedies usually
afforded to him against usurpers is the irremedial injury which would result to the railroad
company and to the public in general. It will readily be seen that the interruption of the
transportation service at any point on the right of way impedes the entire service of the
company and causes loss and inconvenience to all passengers and shippers using the
line. Under these circumstances, public policy, if not public necessity, demands that the
owner of the land be denied the ordinarily remedies of ejectment and injunction x x x.
There is also something akin to equitable estoppel in the conduct of one who stands idly by
and watches the construction of the railroad without protest. x x x But the real strength of the
rule lies in the fact that it is against public policy to permit a property owner, under such
circumstances, to interfere with the service rendered to the public by the railroad company. x x
x (I)f a landowner, knowing that a railroad company has entered upon his land and is engaged
in constructing its road without having complied with a statute requiring either payment by
agreement or proceedings to condemn, remains inactive and permits it to go on and expend
large sums in the work, he is estopped from maintaining either trespass or ejectment for the
entry, and will be regarded as having acquiesced therein, and will be restricted to a suit for
damages.
Further, in De Ynchausti v. Manila Electric Railroad & Light Co., we ruled:
The owner of land, who stands by, without objection, and sees a public railroad constructed
over it, can not, after the road is completed, or large expenditures have been made thereon
upon the faith of his apparent acquiescence, reclaim the land, or enjoin its use by the railroad
company. In such a case there can only remain to the owner a right of compensation.
xxxx
One who permits a railroad company to occupy and use his land and construct its roads
thereon without remonstrance or complaint, cannot afterwards reclaim it free from the servitude
he has permitted to be imposed upon it. His acquiescence in the company's taking possession
and constructing its works under circumstances which made imperative his resistance, if he
ever intended to set up illegality, will be considered a waiver. But while this presumed waiver is
a bar to his action to dispossess the company, he is not deprived of his action for damages for
the value of the land, or for injuries done him by the construction or operation of the road.
xxxx
We conclude that x x x the complaint in this action praying for possession and for damages for
the alleged unlawful detention of the land in question, should be dismissed x x x but that such
dismissal x x x should be without prejudice to the right of the plaintiff to institute the appropriate
proceedings to recover the value of the lands actually taken, or to compel the railroad
corporation to take the necessary steps to secure the condemnation of the land and to pay the
amount of the compensation and damages assessed in the condemnation proceedings.
In Ansaldo v. Tantuico, Jr., a case involving the takeover by the Government of two private lots
to be used for the widening of a road without the benefit of an action for expropriation or
agreement with its owners, we held that the owners therein, having been silent for more than
two decades, were deemed to have consented to such taking - although they knew that there
had been no expropriation case commenced - and therefore had no reason to impugn the
existence of the power to expropriate or the public purpose for which that power had been
exercised. In said case, we directed the expropriator to forthwith institute the appropriate
expropriation action over the land, so that just compensation due the owners may be
determined in accordance with the Rules of Court.(Citations omitted; emphasis supplied.)
In the instant case, it had been more or less thirty-one (31) years since the ATO occupied and
possessed the subject property without first expropriating the same. Jizmundo and his co-heirs
Were well aware of this fact for, as the courts a quo found, it is the nonpayment of the value of
the subject property that caused them to file ejectment proceedings.
As things now stand, the property still forms part of the Kalibo, Aldan Domestic and
International Airport. In the instant petition, Malonesio states that:
It bears stressing that the property sought to be restored to Jizmundo is exactly where the
ATO's (how CAAP) existing facilities and structures are presently located. These facilities and
structures are vital to the country's civil aviation and airport operation as they are used by the
public for international and domestic travel and transportation, undoubtedly a public purpose.
As the country's premier agency in charge of implementing policies on civil aviation, air safety
and promotion of air travel in the Philippines and abroad, [the] ATO has the right to remain in
peaceful possession over the property, not only by reason of public policy, 'but by public
necessity as well. 17
Under the circumstances, an action for ejectment would not be proper. Verily, it is not
farfetched to presume that the grant of the unlawful detainer case against the CAAP and the
transfer of the possession of the subject property in favor of Jizmundo would result in the
interruption of the services provided by the CAAP and would lead to the inconvenience of the
passengers and personnel that makes use of the said airport.
In accordance with Forform, the recovery of possession of Jizmundo can no longer be allowed
so as not to hamper the said airport’s services to the public. The remedy left to Jizmundo and
1âwphi1
his co-heirs is the right to be compensated the reasonable value of the subject property, which
the CAAP admittedly still uses for what it deems to be a vital public purpose. The CAAP must
now institute the required action for expropriation over the subject property for the proper
determination of the just compensation due to the owners thereof. 18
WHEREFORE, the Decision dated November 30, 2010 and the Resolution dated October 7,
2011 of the Court of Appeals in CA-G.R. CEBSP. No. 02831 are hereby SET ASIDE. The Civil
Aviation Authority of the Philippines is DIRECTED to institute the appropriate expropriation
action over the property subject of this case within fifteen (15) days from finality of this
Decision, in order that the just compensation due to its proper owners may be determined. No
costs.
SO ORDERED.
TERESITA J. LEONARDO-DE CASTRO

Associate Justice
WE CONCUR:

Chief Justice
Chairperson
LUCAS P. BERSAMIN ESTELA M. PERLAS-BERNABE


Associate Justice
CERTIFICATION
above Resolution had been reached in consultation before the case was assigned to the writer
of the opinion of the Court’s Division.

Chief Justice
Footnotes
1
Rollo, pp. 19·51.
2
Id. at 53·65; penned by Associate Justice Pampio A. Abarintos with Associate Justices
Ramon A. Cruz and Myra V. Garcia·Fernandez concurring .
3
Id. at 66-68; penned by Associate Justice Pampio A. Abarintos with Associate Justices
Myra V. Garcia·Fernandez and Ramon Paul L. Hernando concurring.
4
Id. at 69-71; penned by Acting Presiding Judge Eva Vita V. Ta-ay Tejada.
5
Id. at 70.
6
Id. at 73-75; penned by Judge Narciso M. Aguilar.
7
Republic Act No. 9497.
8
Id. at 64-65.
9
249 Phil. 27, 35 (1988).
10
659 Phil. 104, 115-116 (2011).
11
Id. at 114.
12
Republic Act No. 9497.
13
Section 23 of Republic Act No. 9497 pertinently reads:
SECTION 23. Corporate Powers. -The Authority, acting through the Board,
shall have the following corporate powers:
(a) To succeed in its corporate name, to sue and be sued in such corporate
name, and to adopt, use and alter its corporate seal, which shall be judicially
noticed[.]
14
603 Phil. 150, 167 (2009).
15
G.R. No. 191101, October 1, 2014, 737 SCRA 381, 394.
16
594 Phil. 10, 28-30 (2008).
17
Rollo, p. 28. 17
18
See also Eusebio v. Luis, 618 Phil. 586 (2009).
FIRST DIVISION
G.R. No. 166890, June 28, 2016
REPUBLIC OF THE PHILIPPINES, Petitioner, v. APOLONIO BAUTISTA, JR., Respondent.
DECISION
BERSAMIN, J.:
The applicant for judicial confirmation of imperfect title must trace his possession of the subject land
to June 12, 1945, or earlier. Any length of possession that does not comply with the requirement
cannot support the application, which must be then dismissed for failure to comply with
Commonwealth Act No. 141 (Public Land Act) and Presidential Decree No. 1529 (Property Registration
Decree).
The Case
The Government appeals the adverse judgment promulgated on September 30, 2004, 1 whereby the
Court of Appeals (CA) affirmed the decision of the Municipal Trial Court (MTC) of Subic, Zambales
rendered on November 17, 1998 in LRC Case No. N-12-10-96 entitled In Re: Application for Land
Registration of Lot 17078 of Cad. 547-D, Subic Cadastre2 granting the application of respondent
Apolonio Bautista, Jr. for the judicial confirmation of title of Lot 17078 of Cad. 547-D, Subic Cadastre.
Antecedents
After acquiring Lot 17078 of Cad. 547-D, Subic Cadastre, located in Capisanan, Subic, Zambales from
Mario Jardin on February 15, 1971 and Cornelia Villanueva on May 25, 1973, Apolonio, Sr. had the
property declared for taxation purposes. He had been the sole and exclusive possessor and occupant
from the time of acquisition until his death, with no party questioning his possession and ownership,
or staking any adverse claim against him thereon.3 He died in 1987, and was succeeded by his
children, namely: respondent Apolonio, Jr. and his siblings. Apolonio, Sr.'s children executed an extra-
judicial settlement of their father's estate, whereby Apolonio, Jr.'s brothers and sisters waived their
rights in his favor. Thus, the property was declared for taxation purposes in Apolonio, Jr.'s name
under Tax Declaration No. 014-0432A of the Municipality of Subic, Zambales. There were no arrears in
real estate taxes.4 The declared value was P73,040.00.5 chanrobleslaw
On October 21, 1996, Apolonio Jr. commenced LRC Case No. N-12-10-96 in the MTC. He later on
testified that his father had been in actual possession since 1969, and had eventually acquired the
land from Jardin and Villanueva through the notarized Deeds of Absolute Sale dated February 15,
1971, and May 25, 1973; and that his father had paid taxes on the land.
The Government did not interpose any timely objection to the testimony of Apolonio, Jr. It did not also
object to the documentary evidence (i.e., the deeds of absolute sale and tax declarations) offered by
him. Hence, the MTC admitted all the evidence presented by Apolonio, Jr.
In due course, the MTC granted Apolonio, Jr.'s application, and declared him as the owner in fee
simple of the land,6 and confirmed his ownership thereof.7 chanrobleslaw
The Government appealed the decision to the Court of Appeals (CA), which, on September 30, 2004,
promulgated its assailed decision affirming the ruling of the MTC. 8 The CA pointed out that the
Government did not present evidence against the claim of Apolonio Jr.; and that the Government did
not timely object to his testimony on the ground of its being hearsay. 9 chanrobleslaw
Issue
In this appeal, the Government reiterates that the testimony of Apolonio, Jr. on possession, being
hearsay, had no probative value; that the alienation of public land should always undergo careful
scrutiny; and that the Court should carefully re-examine the factual issues that could alter the result
of the case.10chanrobleslaw
The Government points out that Apolonio, Jr. had given only general statements pertaining to the
open, continuous, exclusive and notorious possession of his father since 1971; that such statements
were mere conclusions of law, and did not prove the alleged possession; that because the application
for judicial confirmation of imperfect title was filed on October 21, 1996, the applicable law was
Section 48(b) of Commonwealth Act No. 141 (Public Land Act), as amended by Presidential Decree
No. 1073; that, accordingly, the required period of possession must be "since June 12, 1945 or
earlier," as stated in Republic v. Doldol,11 a more stringent requirement the non-compliance with which
was fatal to his cause.12 chanrobleslaw
Lastly, the Government points out that tax declarations or tax receipts did not suffice to prove
ownership of land in fee simple; that although it was the State's policy to encourage and promote
distribution of alienable public lands as an ideal of social justice, stringent safeguards must be adopted
and applied to prevent the lands from going to the wrong hands; and that Apolonio, Jr.'s reliance on
hearsay evidence showed his unfitness to own the land. 13 chanrobleslaw
In response, Apolonio Jr. insists that he had duly established his lawful occupation of the land as
owner in fee simple; that the Government did not timely object to his testimony, and did not also
controvert his evidence; that the property had been properly identified; and that the lower courts had
observed the legal safeguards and guidelines in granting his application for judicial confirmation of his
ownership in fee simple.14 chanrobleslaw
Ruling of the Court
We reverse.
The Government has correctly insisted that the requisite period of possession of the property should
conform to that provided for in Section 48(b) of the Public Land Act, as amended by Presidential
Decree No. 1073, which has limited the right to apply for judicial confirmation to citizens of the
Philippines "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 acquisition of ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except when prevented by
war or force majeure. x x x" The provision is reprised by Section 14(1) of Presidential Decree No.
1529 (Property Registration Decree), adopting the length of 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.
We note that in its amendment of the Public Land Act that took effect on January 25, 1977,
Presidential Decree No. 1073 changed the length of the requisite possession from "thirty (30) years
immediately preceding the filing of the application" to possession "since June 12, 1945, or
earlier." Republic v. Naguit15 has explained this change thusly: ChanRoblesVirtualawlibrary
When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary
to vest the right to register their title to agricultural lands of the public domain commenced from July
26, 1894. However, this period was amended by R.A. No. 1942, which provided that the bona fide
claim of ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the
Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning dale at
June 12, 1945. x x x
Based on the records before us, Apolonio, Jr. presented only himself to establish the possession and
ownership of his father, Apolonio, Sr., who was his immediate predecessor-in-interest. Me did not
present as witnesses during the trial either of the transferors of Apolonio, Sr. - that is, Mario Jardin or
Cornelia Villanueva - to establish the requisite length of the possession of the predecessors-in-interest
of the applicant that would be tacked to his own. His personal incompetence to attest to the
possession of the property within the time required by law underscored the weakness of the evidence
on possession, particularly as it has not been denied that the applicant had arrived in the Philippines
only on November 28, 1987. Considering that the possession and occupation of the property in
question by Apolonio, Jr. and his predecessors-in-interest were not shown in the records to have been
"since June 12, 1945, or earlier," the application must be rejected.
We should stress that only the title of those who had possessed and occupied alienable and disposable
lands of the public domain within the requisite period could be judicially confirmed. Indeed, alienable
public land held by a possessor, either personally or through his predecessors-in-interest, openly,
continuously and exclusively during the prescribed statutory period is converted to private property by
the mere lapse or completion of the period.16 chanrobleslaw
That the Government did not timely object to the admission of the testimony of Apolonio, Jr., or of the
other evidence presented by him was of no consequence to the success of the application. If he had
no personal knowledge of the facts establishing the possession of property for the requisite period, no
court can give any value to his assertion, particularly as it was conceded by him no less that he had
no personal or direct competence to know the truth of his assertion. It was one thing for the trial court
to admit the evidence, but quite another to give it any worth for purposes of judicial adjudication.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDE the decision promulgated on September 30, 2004; DISMISSES the application of respondent
Apolonio Bautista, Jr. for the judicial confirmation of his imperfect title in LRC Case No. N-12-10-96;
and ORDERSApolonio Bautista, Jr. to pay the costs of suit.
SO ORDERED. chanRoblesvirtualLawlibrary
Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe, and Caguioa, JJ., concur.
Endnotes:
1
Rollo, pp. 60-71; penned by Associate Justice Vicente S.E. Veloso (retired), with the concurrence of
Associate Justice Roberto A. Barrios (retired/deceased) and Associate Justice Amelita G. Tolentino
(retired).
2
Id. at 40-42; penned by Municipal Judge Miguel F. Famularcano, Jr.
3
Id. at 62.
4
Id.
5
Id. at 37.
6
Id.
7
Id. at 40-42.
8
Supra note 1.
9
Id.
10
Rollo, pp. 15-18.
11
G.R. No. 132963, September 10, 1998, 295 SCRA 359, 364-365.
12
Rollo, p. 20.
13
Id. at 21-22.
14
Id. at 85-87.
15
G.R. No. 144507, Januarv 17, 2005, 448 SCRA 442.
Director of Lands v. Intermediate Appellate Court, No. L-73002, December 29, 1986, 146 SCRA 509,
16
518. See also the dissenting opinion of Justice Teehankee in Manila Electric Company v. Judge Castro-
Bartolome, No. L-49623, June 29, 1982, 114 SCRA 799, 813.
SECOND DIVISION
G.R. No. 198774, April 04, 2016
TEOFILO ALOLINO, Petitioner, v. FORTUNATO FLORES AND ANASTACIA MARIE

FLORES, Respondents.
DECISION
BRION, J.:
This is a petition for review on certiorari filed from the July 8, 2011 decision of the Court of Appeals
(CA) in CA-G.R. CV No. 94524.1 The CA reversed the Regional Trial Court's (RTC) decision 2 in Civil
Case No. 693203 and dismissed petitioner Teofilo Alolino's complaint against the respondents for the
removal of their illegally constructed structure.
Antecedents
Alolino is the registered owner of two (2) contiguous parcels of land situated at No. 47 Gen. Luna
Street, Barangay Tuktukan, Taguig, covered by Transfer Certificate of Title (TCT) Nos. 784 and 976.
TCT No. 784 was issued on August 30, 1976 covering an area of 26 square meters; while TCT No. 976
was issued on August 29, 1977, with an area of 95 square meters.
Alolino initially constructed a bungalow-type house on the property. In 1980, he added a second floor
to the structure. He also extended his two-storey house up to the edge of his property. There are
terraces on both floors. There are also six (6) windows on the perimeter wall: three (3) on the ground
floor and another three (3) on the second floor.
In 1994, the respondent spouses Fortunato and Anastacia (Marie) Flores constructed their house/sari
saristore on the vacant municipal/barrio road immediately adjoining the rear perimeter wall of
Alolino's house. Since they were constructing on a municipal road, the respondents could not secure a
building permit. The structure is only about two (2) to three (3) inches away from the back of Alolino's
house, covering five windows and the exit door. The respondents' construction deprived Alolino of the
light and ventilation he had previously enjoyed and prevented his ingress and egress to the municipal
road through the rear door of his house.
Alolino demanded that the respondent spouses remove their structure but the latter refused. Thus, he
complained about the illegal construction to the Building Official of the Municipality of Taguig. He also
filed a complaint with the Barangay of Tuktukan.
Acting on Alolino's complaint, the Building Official issued a Notice of Illegal Construction against the
respondents on February 15, 1995, directing them to immediately stop further construction. 4
Sometime in 2001 or 2002, the respondents began constructing a second floor to their structure,
again without securing a building permit. This floor was to serve as residence for their daughter, Maria
Teresa Sison. The construction prompted Alolino to file another complaint with the Building Official of
Taguig.
The building official issued a second Notice of Illegal Construction against the respondents on May 6,
2002, directing the respondents to desist from their illegal construction. 5
On May 17, 2002, the Office of the Barangay Council of Tuktukan issued a certification that no
settlement was reached between the parties relative to Alolino's 1994 complaint. 6
The respondents did not comply with the directive from the building official. This prompted Alolino to
send them a letter dated January 23, 2003, demanding the removal of their illegally constructed
structure.
Despite receipt of the demand letter, the respondents refused to comply. Thus, on February 14, 2003,
Alolino filed a complaint against the respondents with the RTC praying for: (1) the removal of the
encroaching structure; (2) the enforcement of his right to easement of light and view; and (3) the
payment of damages. Alolino claimed that the respondents' encroaching structure deprived him of his
light and view and obstructed the air ventilation inside his house. The complaint was docketed as Civil
Case No. 69320.
In their answer,7 the respondent spouses denied that Alolino had a cause of action against them. They
alleged that they had occupied their lot where they constructed their house in 1955, long before the
plaintiff purchased his lot in the 70s. They further alleged that plaintiff only has himself to blame
because he constructed his house up to the very boundary of his lot without observing the required
setback. Finally, they emphasized that the wall of their house facing Alolino's does not violate the
latter's alleged easement of light and view because it has no window.
The respondents also admitted to them that they did not secure a building permit because the
property was constructed on a municipal/barrio road. They claimed, however, that on March 1, 2004,
the Sangguniang Bayan of Taguig (the Sanggunian) reclassified the property as a residential lot from
its prior classification as a barrio/municipal road.8
During the trial, both parties moved for an ocular inspection of the premises. Consequently, on
November 19, 2007, the RTC ordered the branch clerk of court, the deputy sheriff, and the
stenographer to conduct the inspection. The ocular inspection was conducted on December 6, 2007.
In their report dated January 30, 2008,9 the inspection team confirmed that the respondents' property
blocked the entry of light and air to Alolino's house.
On April 20, 2009, the RTC rendered a judgment ordering the respondents to remove their illegal
structure obstructing Alolino's right to light and view.
The RTC found that Alolino had already previously acquired an easement of light and view and that
the respondents subsequently blocked this easement with their construction. It held that the
respondents' illegal construction was a private nuisance with respect to Alolino because it prevented
him from using the back portion of his property and obstructed his free passage to
the barrio/municipal road. The court farther held that the respondents' house was a public nuisance,
having been illegally constructed on a barrio road - a government property - without a building permit.
The respondents appealed the decision to the CA and was docketed as CA-G.R. CV No. 94524.
On July 8, 2011, the CA reversed the RTC decision and dismissed the complaint for lack of merit.
The CA held (1) that Alolino had not acquired an easement of light and view because he never gave a
formal prohibition against the respondents pursuant to Article 66810 of the Civil Code; (2) that Alolino
was also at fault, having built his fyouse up to the edge of the property line in violation of the National
Building Code;11 (3) that Alolino had not acquired an easement of right of way to the barrio Road; and
(4) that the respondents' house was not a public nuisance because it did not endanger the safety of its
immediate surroundings.
The CA concluded that the Government had already abandoned the barrio road pursuant to the 2004
Sanggunian resolution. It further held that the respondents' property could not be demolished, citing
Section 28 of the Urban Development and Housing Act. 12
Alolino moved for reconsideration on July 28, 2011.
On September 28, 2011, the CA denied the motion for reconsideration and maintained that Alolino
had not acquired an easement of light and view.
Thus, on November 15, 2011, Alolino filed the present petition for review on certiorari.
The Petition
Alolino insists (1) that he acquired an easement of light and view by virtue of a title because the
respondents constructed their house on a barrio road; (2) that the provision of Sec. 708 of the
National Building Code and Article 670 of the Civil Code prescribing the setbacks is inapplicable
because the property is adjacent to a barrio road; (3) that he has a right of way over the lot occupied
by the respondents because it is a barrio road; and (4) that the respondents' house/sari sari store is a
nuisance per se.
In its comment, the respondent counters (1) that Alolino has not acquired an easement of light and
view or an easement of right of way, by either prescription or title; (2) that Alolino is at fault for
constructing his house up to the edge of his property line without observing the setbacks required in
Article 670 of the Civil Code and Section 702 of the National Building Code; and (3) that their
house/sari sari store is not a nuisance because it is not a serious threat to public safety and the
Sanggunian has already reclassified the lot as residential.
Our Ruling
We find the petition meritorious.
There is no dispute that respondents built their house/sari sari store on government property.
Properties of Local Government Units (LGUs) are classified as either property for public use or
patrimonial property.13 Article 424 of the Civil Code distinguishes between the two classifications:
Article 424. Property for public use, in the provinces, cities, and municipalities, consist of
the provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or municipalities.
without prejudice to the provisions of special laws. 14 (emphasis supplied)
From the foregoing, the barrio road adjacent to Alolino's house is property of public dominion devoted
to public use.
We find no merit in the respondents' contention that the Local Government of Taguig had already
withdrawn the subject barrio road from public use and reclassified it as a residential lot. The Local
Government Code15 (LGC) authorizes an LGU to withdraw a local road from public use under the folio
wing conditions:
Section 21. Closure and Opening of Roads. -
(a) A local government unit may, pursuant to an ordinance,

permanently or temporarily close or open any local road,
alley, park, or square falling within its jurisdiction; Provided,
however, That in case of permanent closure, such ordinance must
be approved by at least two-thirds (2/3) of all the members of the
Sanggunian, and when necessary, an adequate substitute for the.
public facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be permanently

closed without making provisions for the maintenance of public
safety therein. A property thus permanently withdrawn from
public use may be used or conveyed for any purpose for
which other real property belonging to the local government
unit concerned may be lawfully used or conveyed. x x x
To convert a barrio road into patrimonial property, the law requires the LGU to enact an ordinance,
approved by at least two-thirds (2/3) of the Sanggunian members, permanently closing the road.
In this case, the Sanggunian did not enact an ordinance but merely passed a resolution. The
difference between an ordinance and a resolution is settled in jurisprudence: an ordinance is a law but
a resolution is only a declaration of sentiment or opinion of the legislative body. 16
Properties of the local government that are devoted to public service are deemed public and are under
the absolute control of Congress.17 Hence, LGUs cannot control or regulate the use of these properties
unless specifically authorized by Congress, as is the case with Section 21 of the LGC. 18 In exercising
this authority, the LGU must comply with the conditions and observe the limitations prescribed by
Congress. The Sanggunian's failure to comply with Section 21 renders ineffective its reclassification of
the barrioroad.
As a barrio road, the subject lot's purpose is to serve the benefit of the collective citizenry. It is
outside the commerce of man and as a consequence: (1) it is not alienable or disposable; 19 (2) it is
not subject to registration under Presidential Decree No. 1529 and cannot be the subject of a Torrens
title;20 (3) it is not susceptible to prescription;21 (4) it cannot be leased, sold, or otherwise be the
object of a contract;22 (5) it is not subject to attachment and execution;23 and (6) it cannot be
burdened by any voluntary easements.24
An easement is an encumbrance imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or of one or more persons to whom
the encumbered estate does not belong.25Continuous and apparent easements may be acquired
by virtue of a title or by prescription of ten years.26 Meanwhile, continuous but non-apparent
easements and discontinuous ones can only be acquired by virtue of a title.27 Used in this sense,
title refers to a juridical justification for the acquisition of a right. It may refer to a law, a will, a
donation, or a contract.
We must distinguish between the respondents' house and the land it is built on. The land itself is
public property devoted to public use. It is not susceptible to prescription and cannot be burdened
with voluntary easements. On the other hand, the respondents' house is private property, albeit
illegally constructed on public property. It can be the object of prescription and can be burdened with
voluntary easements. Nevertheless, it is indisputable that the respondents have not voluntarily
burdened their property with an easement in favor of Alolino.
An easement of a right of way is discontinuous and cannot be acquired through prescription. 28 On the
other hand, an easement of light and view can be acquired through prescription counting from the
time when the owner of the dominant estate formally prohibits the adjoining lot owner from blocking
the view of a window located within the dominant estate. 29
Notably, Alolino had not made (and could not have made) a formal prohibition upon the respondents
prior to their construction in 1994; Alolino could not have acquired an easement of light and view
through prescription. Thus, only easements created by law can burden the respondents' property.
The provisions on legal easements are found in Book II, Title VII, Chapter 2 of the Civil Code whose
specific coverage we list and recite below for clarity and convenience.
Section 3 (Articles 649-657) governs legal easements of right of way. Article 649 creates a legal
easement in favor of an owner or any person entitled to use any immovable, which is landlocked by
other immovables pertaining to other persons without an adequate access to a public highway. Article
652creates a legal easement in favor of an isolated piece of land acquired by sale, exchange,
partition, or donation when it is surrounded by other estates of the vendor, exchanger, co-owner, or
donor. Article 653 grants the same right of way. in favor of the vendor, exchanger, co-owner, or
donor when his property is the one that becomes isolated. Article 656 grants the owner of an estate,
after payment of indemnity, a right of way to carry materials through the estate of another when it.is
indispensable for the construction or repair of a building in his estate. Finally, Article 657 governs right
of way easements for the passage of livestock.
None of these provisions are applicable to Alolino's property with respect to the barrio road where the
respondents' house stands on.
On the other hand, Section 5 of Book II, Title VII, Chapter 2 of the Civil Code (Articles 667-673)
governs legal easements of light and view. These seven provisions are:
SECTION 5
Easement of Light and View
Article 667. No part-owner may, without the consent of the others, open through the party wall any
window or aperture of any kind.
Article 668. The period of prescription for the acquisition of an easement of light and view shall be
counted: (1) From the time of the opening of the window, if it is through a party wall; or (2) From the
time of the formal prohibition ipon the proprietor of the adjoining land or tenement, if the window is
through a wall on the dominant estate.
Article 669. When the distances in article 670 are not observed, the owner of a wall which is not
party wall, adjoining a tenement or piece of land belonging to another, c^n make in it openings to
admit light at the height of the ceiling joints or immediately under the ceiling, and of the size of thirty
centimeters square, and, in every case, with an iron grating imbedded in|the wall and with a wire
screen.
Nevertheless, the owner of the tenement or property adjoining the wall in which the openings are
made can close them should he acquire part-ownership thereof, if there be no stipulation to the
contrary.
He can also obstruct them by constructing a building on his land or by raising a wall thereon
contiguous to that having such openings, unless an easement of light has been acquired.
Article 670. No windows, apertures, balconies, or other similar projections which afford a direct view
upon or towards an adjoining land or tenement can be made, without leaving a distance of two meters
between the wall in which they are made and such contiguous property.
Neither can side or oblique views upon or towards such conterminous property be had, unless there be
a distance of sixty centimeters.
The nonobservance of these distances does not give rise to prescription.
Article 671. The distance referred to in the preceding article shall be measured in cases of direct
views from the outer line of the wall when the openings do not project, from the outer line of the
latter when they do, and, in cases of oblique view, from the dividing line between the two properties.
Article 672. The provisions of article 670 are not applicable to buildings separated by a public way or
alley, which is not less than three meters wide, subject to special regulations and local ordinances.
Article 673. Whenever by any title a right has been acquired to have direct views, balconies or
belvederes overlooking an adjoining property, the owner of the servient estate cannot build thereon at
less than a distance of three meters to be measured in the manner provided in article 671. Any
stipulation permitting distances less than those prescribed in article 670 is void.
However, none of these provisions actually create a legal easement of light and view which can only
be acquired through prescription or a by virtue of a voluntary title.
From the foregoing, we agree with the respondents that Alolino does not have an easement of light
and view or an easement of right of way over the respondents' property or the barrio road it stands
on. This does not mean, however, that the respondents are entitled to continue occupying
the barrio road and blocking the rear of Alolino's house. Every building is subject to the easement
which prohibits the proprietor or possessor from committing nuisance. 30 Under Article 694 of the Civil
Code, the respondents' house is evidently a nuisance:
Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything
else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body
of water; or
(5) Hinders or impairs the use of property, (emphasis supplied)

A barrio road is designated for the use of the general public who are entitled to free and unobstructed
passage thereon. Permanent obstructions on these roads, such as the respondents' illegally
constructed house, are injurious to public welfare and convenience. The occupation and use of private
individuals of public places devoted to public use constitute public and private nuisances and
nuisance per se.31
The CA clearly erred when it invoked Section 28 of the Urban Development and Housing Act as a
ground to.deny the demolition of respondents' illegal structure. The invoked provision reads:
Sec. 28. Eviction and Demolition. - Eviction or demolition as a practice shall be discouraged.
Eviction or demolition, however, may be allowed under the following situations:
(a) When persons or entities occupy danger -areas such as esteros,

railroad tracks, garbage dumps, riverbanks, shorelines, waterways,
and other public places such as sidewalks, roads, parks, and
playgrounds;
xxxx
(c) When there is a court order for eviction and demolition. x x x
(emphasis supplied)
The invoked provision itself allows the demolition of illegal structures on public roads and sidewalks
because these nuisances are injurious to public welfare. Evidently, the respondents have no right to
maintain their occupation and permanent obstruction of the barrio road. The interests of the few do
not outweigh the greater interest of public health, public safety, good order, and general welfare. chanrobleslaw
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No.
94524is REVERSED and SET ASIDE and the decision of the Regional Trial Court, Pasig City, Branch
153 in Civil Case No. 69320 is REINSTATED.
The respondents, and all persons claiming rights under them, are ORDERED to remove and demolish
their illegal structure. The respondents are also ORDERED to pay the petitioner the sum of One
Hundred Thousand Pesos (P100,000.00) as attorney's fees. Costs against the respondents.
Carpio, (Chairperson), Del Castillo, Mendoza, and Leonen, JJ., concur. chanroblesvirtuallawlibrary
Endnotes:
1
Rollo, pp. 277-286. Penned by Associate Justice Manuel M. Barrios and concurred in by Associate
Justices Mario L. Guari
THIRD DIVISION
G.R. No. 195026, February 22, 2016
CENTRAL MINDANAO UNIVERSITY, REPRESENTED BY ITS PRESIDENT, DR. MARIA LUISA R.

SOLIVEN, Petitioner, v. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT
OF ENVIRONMENT AND NATURAL RESOURCES, Respondent.
DECISION
PERALTA, J.:
For this Court's resolution is a petition for review on certiorari dated January 14, 2011 filed by
petitioner Central Mindanao University (CMU), seeking to reverse and set aside the Decision1 dated
December 30, 2010 of the Court of Appeals (CA), which annulled the Decision 2 dated December 22,
1971, the Amended Decision3 dated October 7, 1972 and the Second Amended Decision 4 dated
September 12, 1974 rendered by the then Court of First Instance (CFI), 15th Judicial District, Branch II
of Bukidnon and annulled the Decrees No. N-154065, N-154066 and N-154067 issued in favor of
petitioner and the Original Certificate of Title (OCT) No. 0-160, OCT No. 0-161 and OCT No. 0-162
registered in petitioner's name on January 29, 1975.
The facts follow:
Petitioner Central Mindanao University (CMU) is an agricultural educational institution owned and run
by the State established by virtue of Republic Act No. 4498. 5 It is represented by its President, Dr.
Maria Luisa R. Soliven in accordance with CMU Board of Regents Resolution No. 02, s. 2011. 6
The subjects of the controversy are two parcels of land situated at Musuan, Maramag, Bukidnon
identified as "Sheet 1, Lot 1 of Ir-1031-D" consisting of 20,619,175 square meters, and "Sheet 2, Lot
2 of Ir-1031-D" consisting of 13,391,795 square meters, more or less. 7
In 1946, CMU took possession of the subject parcels of land and started construction for the school
site upon the confirmation of the Secretary of Public Instruction. 8 However, during the final survey in
1952, CMU discovered that there were several adverse claimants, holders, possessors and occupants
of the portions of lots identified as school sites.9
On January 16, 1958, upon the recommendation of the Secretary of Agriculture and Natural Resources
and pursuant to the provisions of Section 8310 of Commonwealth Act (C.A.) No. 141, otherwise known
asPublic Land Act, President Carlos P. Garcia issued Proclamation No. 47611 which reserved certain
portions of the public domain in Musuan, Maramag, Bukidnon for petitioner CMU's (formerly Mindanao
Agricultural College) site purposes.12 The said parcels of land were withdrawn from sale or settlement
and reserved for CMU's school site purposes, "subject to private rights, if any there be."
In a letter dated October 27, 1960, the Director of Lands Zoilo Castrillo formally requested the
Secretary of Agriculture and Natural Resources that he be authorized under Section 87 of C.A. No.
141, to file in the CFI of Bukidnon an application for the compulsory registration of the parcels of land
reserved by President Garcia under Proclamation No. 476 as CMU's school site purposes. 13
In the first indorsement dated November 9, 1960, the Office of the Secretary of Agriculture and
Natural Resources, through its Undersecretary Salvador F. Cunanan, forwarded to the Executive
Secretary a recommendation that the Director of Lands be authorized to file the said application. 14
Thereafter, the Office of the President, through the Assistant Executive Secretary Enrique C. Quema,
in the second indorsement dated December 12, 1960, authorized and directed the Director of Lands to
file the necessary petition in the CFI of Bukidnon for the compulsory registration of the parcels of land
reserved for CMU.15
Department Legal Counsel Alejandro V. Recto, in the indorsement dated December 28, 1960,
communicated the said directive and authority granted to the Director of Lands to file the application
for compulsory registration.16
On January 31, 1961, the Director of Lands filed a petition with the then Court of First Instance of
Bukidnon for the settlement and adjudication of the title of the parcels of land reserved in favor of
CMU, and for the determination of the rights of adverse claimants in relation to the reservation of the
land.17
The cadastral court, in its Decision dated December 22, 1971 in Land Registration Case Cadastral Rec.
No. 414, declared that the subject parcels of land as public land included in the reservation for CMU,
and be registered in its name, except for specified portions adjudicated to other persons. 18 The court
also gave the other 18 claimants an opportunity to acquire full ownership in the subject parcels of
land.19Hence, the court reduced the claim of CMU to 3,041 hectares of total land area. 20 The
dispositive portion of the decision reads:
In view of the foregoing considerations, judgment is hereby rendered declaring Lot No. 1 containing
an approximate area of 20,619,175 square meters and Lot No. 2 containing an area of 13,391,795
square meters, both situated in the barrio of Musuan, municipality of Maramag, Bukidnon, as
described in the survey plans and technical descriptions approved by the Director of Lands as IR-
1031-D, marked as Exhibits "D" and "D-l" of the Central Mindanao University, as public land included
in the reservation in favor of said University by virtue of Proclamation No. 476, series of 1958, of the
President of the Philippines, which may be registered in its name, except such portions hereinbelow
specified which are adjudicated in favor of the following:
1. Venancio Olohoy, married, and Esmeralda Lauga, married to Julio Sagde, both of legal ages and
residents of Valencia, Bukidnon- 17.75 hectares of Lot No.l as shown in the survey plan (Exh. "D");
2. Martina Songkit, of legal age, married to Martin Binanos and resident of Maramag, Bukidnon - 3
hectares of Lot No. 2 as shown in the plan Exh. "D-l";
3. Pablo Saldivar, widower, of legal age and resident of Dologon, Maramag, Bukidnon- 12 hectares of
Lot No. 2 as indicated in the survey plan Exh. "D-l" abovementioned;
4. Fernando Bungcas, married to Feliciana Gayonan and resident of Dologon, Maramag- 6 hectares of
Lot No. 2;
5. Cerilo Salicubay, married to Valentina Bento, and Virginia Salicubay, married to Ricardo Tunasan,
both of legal ages and residents of Panalsalan, Maramag, Bukidnon, share and share alike, - 4
hectares of Lot No. 2
6. Rosita Lupiahan, of legal age, married to Simplicio Alba and resident of Maramag, Bukidnon - 4
hectares of Lot No. 2.
The areas herein adjudicated to the above-named private individuals should be surveyed and each lot
given a separate number with their corresponding technical descriptions.
Considering, however, that the Court rejected most of the claim due to the dubious nature of the
occupation of the claimants prior to the take-over by the College, now University, in 1946 but most of
them remained on the land up to the present time, in order to avoid possible injustice and in line with
the national objective of providing land for the landless, it is hereby recommended that the claimants
enumerated hereunder who filed answers and presented evidence which, nevertheless, was found
short of the requirements for a decree of registration, be given the opportunity to acquire full
ownership thereof through a homestead, or free patent application if they are landless persons,
otherwise by means of a sales application if they are already owners of other pieces of real estate,
after a corresponding amendment of the Executive Proclamation through the avenues allowed by law.
The following claimants may be considered for that purpose, namely:
1. Geronimo Aniceto and his sister Francisca Aniceto- 12 hectares of Lot No. 2;
2. Bonifacio Aniceto- 6 hectares of Lot No. 2;
3. Julita Aniceto- 12 hectares of Lot No. 2;
4. Maximo Nulo- 5 hectares of Lot No. 2;
5. Magno Sepada- 3 hectares of Lot No. 1;
6. Eulogio Guimba- 12 hectares of Lot No. 2;
7. Mario Baguhin and his wife, Treponia Dagoplo 18 hectares of Lot No. 2;
8. Aniceto Nayawan- 12 hectares of Lot No. 2;
9. Eduardo Saloay-ay- 13 hectares of Lot No. 2;
10. Arcadio Belmis and his wife Beatriz Lauga- 24 hectares of Lot No. 1;
11. Vitaliano Lauga- 24 hectares of Lot No. 1;
12. Procopio Abellar- 12 hectares of Lot No. 1;
13. Rufino Dador- 12 hectares of Lot No. 1;
14. Roque Larayan- 12 hectares of Lot No. 1;
15. Benito Lutad- 12 hectares of Lot No. 1;
16. Juliana Pasamonte- 11 hectares of Lot No. 1;
17. Tirso Pimentel- 19 hectares of Lot No. 1; and
18. Dativa P. Velez- 18 hectares of Lot No. 1.
Should the above recommendation be given due course, it is further suggested that those claimants
included in the said recommendation who are now occupying portions of Lot No. 2 situated above the
university grounds on the hillside which they have already denuded, should be transferred to the lower
portions of the land near or along the Pulangi river in order to enable the University to reforest the
hillside to protect the watershed of its irrigation system and water supply.
After this decision become final and the portions adjudicated to private persons have been segregated
and their corresponding technical descriptions provided, the order of the issuance of the corresponding
decree and the certificates of title shall be issued.
SO ORDERED.21 ChanRoblesVirtualawlibrary
Upon the submission of the parties of the compromise agreement through a Joint Manifestation, the
cadastral court rendered its Amended Decision dated October 7, 1972 adjudicating in full ownership of
some portions of the subject lots to the 29 groups of claimants. 22 A portion of the fallo of the amended
decision reads:
WHEREFORE, pursuant to the evidence presented and the compromise agreement submitted by the
parties, the decision rendered by this Court on December 22, 1971 is hereby AMENDED and another
one entered ADJUDICATING in full ownership to the claimants hereinbelow specified the following
portions of the lots in questions, to wit:
xxxx
The remaining portions of Lots 1 and 2 not otherwise adjudicated to any of the above-named private
claimants are hereby ADJUDICATED in full ownership to the Central Mindanao State University. It is
hereby directed that the different portions of Lots 1 and 2 hereinabove granted to private claimants
must [be segregated] by a competent surveyor and given their technical descriptions and
corresponding lot numbers for purposes of the issuance of certificates of title in their favor.
It is, however, ordered that the area adjacent and around or near the watersheds or sources of Lot
No. 2 adjudicated to any of the private claimants specified in the foregoing paragraph may be replaced
or substituted to the Central Mindanao State University with other areas of equal extent in either Lot 1
or 2, should said University desire to do so in order to protect and conserve the watersheds.
The findings and resolutions made by the Court in its original decision not affected by the
amendments incorporated elsewhere herein shall stand.
The petition from relief from judgment presented by Lucio Butad which the Court finds without merit is
hereby denied.
Once the decision becomes final and the subdivision directed in the preceding paragraph has been
accomplished, the order for the issuance of the corresponding decree of registration and the
certificates of title in favor of each and every adjudicatee shall likewise issue.
Based on the Order made by the court that those portions of the private claimants in the area
adjacent and around, or near the watersheds of Lot No. 2 may be replaced or substituted by CMU with
areas of equal extent, the 16 grantees entered into an agreement with CMU for the replacement of the
areas adjudicated to them with those outside the watershed vicinity or beyond the area necessary for
the proper development, administration, supervision and utilization of the portion adjudicated to
CMU.24
Thereafter, the cadastral court, in its second amendment of the Decision dated September 12, 1974,
ordered that the specific portions of the subject lots be adjudicated to the 33 claimants as indicated in
their agreement.25 It also awarded to CMU Lot 1-S (18,531,671 square meters), Lot 2-A (10,001
square meters), and Lot 2-Q (12,266,524 square meters).26 On January 25, 1975, the court issued
Decrees No. N-154065, N-154066, and N-154067 in favor of CMU.27 Consequently, OCT Nos. 0-160,
0-161 and 0-162 were registered in the name of CMU on January 29, 1975. 28 The decretal portion of
the decision reads:
WHEREFORE, finding said manifestation and agreement of the parties in order, the dispositive portions
of the amended decision rendered by this Court on October 7, 1972 aforementioned is further
amended such that the lots specified hereunder and more particularly indicated in the revised plans
and technical descriptions above-mentioned are hereby adjudicated as follows:
1. To Roque Larayan, Lot 1-A with an area of 120.001 square meters;

2. To Fernanda Bungcas, Lot 1-B with an area of 60.00 square meters;
3. To Tirso Pimentel, Lot 1-C with an area of 190.000 square meters;
4. To Juliana Pasamonte, Lot 1-D with an area of 109.999 square meters;
5. To Dativa Velez, Lot 1-E with an area of 180.00 square meters;

6. To Mario Bagubin, Lot 1-F with an area of 60.00 square meters;
7. To Triponia Dagoplo, Lot 1-G with an area of 60.001 square meters;
8. To Mario Baguhin, Lot 1-H with an area of 60.001 square meters;
9. To Celerina Guimba, Lot 1-1 with an area of 30.001 square meters;
10. To Constantino Baston, Lot 1-J with an area of 30.001 square meters;
11. To Maximo Nulo, Lot 1-K with an area of 49.999 square meters;
12. To Beatriz Lauga, Lot 1-L with an area of 100.00 square meters;
13. To Evorcio Olohoy, Lot 1-M with an area of 177.500 square meters;
14. To Arcadio Belmis, Lot 1-N with an area of 140.000 square meters;
15. To Luciano Namuag, Lot 1-0 with an area of 240.000 square meters;
16. To Vitaliano Lauga, Lot 1-P with an area of 240.000 square meters;
17. To Rufino Dador, Lot 1-Q with an area of 120.00 square meters;
18. To Procopio Abellar, Lot 1-B with an area of 120.001 square meters;
19. To Eduardo Saloay-ay, Lot 2-B with an area of 130.000 square meters;
20. To Francisco Anecito, Lot 2-C with an area of 120.000 square meters;
21. To Julita Anecito, Lot 2-D with an area of 60.000 square meters;
22. To Vicente Buntan, Lot 2-E with an area of 30.000 square meters;
23. To Victoriano Lacorda, Lot 2-F with an area of 130.000 square meters;
24. To Cerilo Salicubay, Lot 2-G with an area of 40.000 square meters;
25. To Julita Anecito, Lot 2-H with an area of 60.000 square meters;
26. To Benito Butad, Lot 2-1 with an area of 120.000 square meters;
27. To Pablo Zaldivar, Lot 2-J with an area of 120.000 square meters;
28. To Magno Sepada, Lot 2-K with an area of 30.000 square meters;
29. To Anecito Nayawan, Lot 2-L with an area of 120.000 square meters;
30. To Bonifacio Anecito, Lot 2-M with an area of 60.001 square meters;
31. To Eulogio Guimba, Lot 2-N with an area of 120.001 square meters;
32. To Martina Songkit, Lot 2-0 with an area of 30.000 square meters;
33. To Rosita Lapianan, Lot 2-P with an area of 40.000 square meters;
34. To Central Mindanao State University; Lot 1-S with an area of 18,531.671
square meters;
35. To Central Mindanao State University; Lot 2-A with an area of 10.001 square
meters;
36. To Central Mindanao State University, Lot 2-Q with an area of 12,266,524
square meters;
The findings and resolutions made by this Court in its original decision not affected by the
amendments incorporated herein shall remain in force.
Once this decision becomes final, the order for the issuance of the corresponding decrees of
registration and the certification of title in favor of each and every adjudicates shall likewise issue.
On December 15, 2003, the Republic of the Philippines, represented by the Department of
Environment and Natural Resources through the Office of the Solicitor General (OSG), filed before the
CA a petition for annulment of the Decision dated September 12, 1974 by the cadastral court granting
in favor of CMU the title to the subject parcels of land.
The Republic argued that the cadastral court should have summarily dismissed the registration
proceedings since the Solicitor General did not sign or file the petition for compulsory registration of
the parcels of land, as provided in Sections 5330 and 8731 of Commonwealth Act No. 141.32 It also
alleged that the subject parcels of land are inalienable lands of public domain. 33 It maintained that the
cadastral court did not acquire jurisdiction over the res; hence, the entire proceedings of the case
should be null and void.
Accordingly, the CA ruled in favor of the respondent. The dispositive portion of the decision reads:
ACCORDINGLY, the instant petition is GRANTED. The 1) Decision dated December 22, 1971, 2)
Amended Decision dated October 7, 1972 and 3) Second Amended Decision dated September 12,
1974, all rendered by the Court of First Instance, 15th Judicial District, Branch II, Bukidnon Province,
in "L.R.C. Cad. Rec. No. 414, Sec. 87 of Commonwealth Act 141, Ir-1031-D (Lots 1 & 2), Maramag,
Bukidnon, insofar as they adjudicated a portion of the land covered by Proclamation No. 476 to the
Central Mindanao University, are declared NULL and VOID.
Consequently, 1) Decrees No. N-154065, N-154066 and N-l 54067 issued in favor of the University on
January 24, 1975; and 2) Original Certificates of Title (OCT) No. 0-160 (covering Lot 1-S), No. 0-161
(for Lot 2-A) and No. 0-162 (for Lot 2-Q) registered in the University's name on January 29, 1975, are
likewise declared NULL AND VOID.
The CA ruled that there was no sufficient proof of a positive act by the government, such as
presidential proclamation, executive order, administrative action, investigation reports of Bureau of
Lands investigators, or a legislative act or statute, which declared the land of the public domain
alienable and disposable.35 The documents adduced by CMU did not expressly declare that the covered
land is already alienable and disposable and that one of such documents was merely signed by the
Assistant Executive Secretary.36
According to the CA, CMU was unable to prove that the subject land ceased to have the status of a
reservation.37 However, the CA clarified that despite nullification of the titles in its favor, CMU is still
the rightful possessor of the subject property by virtue of Proclamation No. 476. 38
Hence, the petitioner CMU filed the present petition before this Court raising the sole issue:
Whether or not the Court of Appeals:
1. committed a serious and grave error and gravely abused its discretion on a question
of law, and
2. ruled and decided a question of substance in a way and manner not in accord with
law and applicable decisions of this Honorable Court
in granting the petition for annulment of judgment filed by respondent on the ground that the
cadastral court has no jurisdiction over the subject matter or the specific res of the subject matter of
the petition below for the reason that the subject lands are inalienable and non-disposable lands of the
public domain.39
CMU maintains that the CA has completely misconstrued the facts of the cadastral proceedings since
the documents it presented showed that the subject property has already been declared, classified,
and certified by the Office of the President as alienable and disposable lands. 40
cralawred
Particularly, CMU alleges that the specific and express authorization and the directive, as embodied in
the Second Indorsement41 dated December 12, 1960, from the President, through the then Assistant
Executive Secretary Enrique C. Quema, authorizing the Director of Lands to file the necessary petition
in the CFI of Bukidnon for compulsory registration of the parcels of land reserved for CMU's site
purposes is equivalent to a declaration and certification by the Office of the President that the subject
parcels of land are alienable and disposable.42
CMU has cited the case of Republic v. Judge De la Rosa43 wherein the then President Quirino issued on
June 22, 1951 a directive authorizing the Director of Lands to file the necessary petition in the CFI of
Isabela for the settlement and adjudication of the titles to the tract of land involved in the Gamu
Public Lands Subdivision, Pls-62, Case 5. This Court held that the said presidential directive was
equivalent to a declaration and certification that the subject land area is alienable and disposable. 44
This Court finds the instant petition without merit.
Under the Regalian doctrine, all lands of the public domain belong to the State, and that the State is
the source of any asserted right to ownership of land and charged with the conservation of such
patrimony.45Also, the doctrine states that all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.46 Consequently, the person applying for registration
has the burden of proof to overcome the presumption of ownership of lands of the public domain. 47
To prove that a land is alienable, the existence of a positive act of the government, such as
presidential proclamation or an executive order; an administrative action; investigation reports of
Bureau of Lands investigators; and a legislative act or a statute declaring the land as alienable and
disposable must be established.48 Hence, a public land remains part of the inalienable public domain
unless it is shown to have been reclassified and alienated by the State to a private person. 49
As noted, Proclamation No. 476 issued by then President Garcia, decreeing certain portions of the
public domain in Musuan, Maramag, Bukidnon for CMU's site purposes, was issued pursuant to Section
83 of C.A. No. 141. Being reserved as CMU's school site, the said parcels of land were withdrawn from
sale and settlement, and reserved for CMU. Under Section 88 of the same Act, the reserved parcels of
land would ordinarily be inalienable and not subject to occupation, entry, sale, lease or other
disposition, subject to an exception, viz.:
Section 88. The tract or tracts of land reserved under the provisions of section eighty-three shall be
non-alienable and shall not be subject to occupation, entry, sale, lease, or other disposition until
again declared alienable under the provisions of this Act or by proclamation of the
President. (Emphasis supplied)
In the case of Navy Officers' Village Association, Inc. v. Republic,50 it was held that parcels of land
classified as reservations for public or quasi-public uses: (1) are non-alienable and non-disposable in
view of Section 88 (in relation with Section 8) of C.A. No. 141, specifically declaring them as non-
alienable and not subject to disposition; and (2) they remain public domain lands until they are
actually disposed of in favor of private persons.51 In other words, lands of the public domain classified
as reservations remain to be property of the public dominion until withdrawn from the public or quasi-
public use for which they have been reserved, by act of Congress or by proclamation of the President,
or otherwise positively declared to have been converted to patrimonial property. 52
In the case at bar, CMU relies on the Court's ruling in the De la Rosa53 case that the directive from the
President authorizing the Director of Lands to file the necessary petition for the compulsory
registration of the parcels of land so reserved is the equivalent of the declaration and certification that
the subject land is alienable and disposable. As such, CMU avows that the subject lots, as declared
alienable and disposable, are properly registered in its name.
This Court finds that the De la Rosa case does not apply in the instant petition because of the varying
factual settings, to wit:
a. In De la Rosa, the Mallig Plains Reservation was reserved by the President for
settlement purposes under the administration of National Land Settlement
Administration (NLSA), later replaced by Land Settlement and Development
Corporation (LASEDECO), while the subject lots in the present case was reserved for
educational purposes, e.g. as CMU's school site, under the administration of the
Board of Trustees of CMU.
b. The National Resettlement and Rehabilitation Administration, when it replaced

LASEDECO, excluded the Mallig Plains Reservation among the properties it needed in
carrying out the purposes and objectives of Republic Act No. 1160, 54 thus, the
Reservation eventually reverted to and became public agricultural land. There was no
evidence that CMU ceased to use and occupy the reserved lots in Musuan, Maramag,
Bukidnon as its school site or that its public purpose is abandoned, for the lots to
revert to and become public agricultural land.
c. At the time that President Quirino issued the directive, the Gamu Public Land
Subdivision in the Mallig Plains Reservation was not reserved for public or quasi-
public purpose or has ceased to be so. On the other hand, the subject lots in
Bukidnon are reserved for public purpose when the President, through the Assistant
Executive Secretary, issued the said directive.
d. In the De la Rosa case, the private respondent was a qualified private claimant with
the requisite period of possession of the subject residential lot in his favor.
Meanwhile, CMU is not a private claimant of the land so reserved.
It was explicated in De la Rosa55 that the authority of the President to issue such a directive, held as
equivalent to a declaration and certification that the subject land area is alienable and disposable,
finds support in Section 7 of C.A. No. 141, to wit:
Sec. 7. For 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. (Emphasis
supplied).
However, the said directive by the President is limited to those enumerated in Section 8 of C.A. No.
141, which provides that:
Section 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. However, the President may, for reasons of
public interest, declare lands of the public domain open to disposition before the same have had their
boundaries established or been surveyed, or may, for the same reason, suspend their concession or
disposition until they are again declared open to concession or disposition by proclamation duly
published or by Act of the National Assembly. (Emphases supplied)
As can be gleaned from the above provision, the lands which can be declared open to disposition or
concession are those which have been officially delimited and classified, or when practicable surveyed;
those not reserved for public or quasi-public purpose; those not appropriated by the Government;
those which have not become private property in any manner; those which have no private right
authorized and recognized by C.A. No. 141 or any other valid law may be claimed; or those which
have ceased to be reserved or appropriated.
For the said President's directive to file the necessary petition for compulsory registration of parcels of
land be considered as an equivalent of a declaration that the land is alienable and disposable, the
subject land, among others, should not have been reserved for public or quasi-public purposes.
Therefore, the said directive on December 12, 1960 cannot be considered as a declaration that said
land is alienable and disposable. Unlike in De la Rosa, the lands, having been reserved for public
purpose by virtue of Proclamation No. 476, have not ceased to be so at the time the said directive was
made. Hence, the lots did not revert to and become public agricultural land for them to be the subject
of a declaration by the President that the same are alienable and disposable.
We have ruled in the case of CMU v. DARAB56 that the CMU land reservation is not alienable and
disposable land of public domain, viz.:
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of
Appeals in its Decision dated August 20, 1990, is not covered by the [Comprehensive Agrarian Reform
Program] CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly
and exclusively used and found to be necessaryfor school site and campus, including experimental
farm stations for educational purposes, and for establishing seed and seedling research and pilot
production centers.
The inalienable character of the lands as part of the long term functions of autonomous agricultural
educational institution is reiterated in CMU v. Executive Secretary:57
It did not matter that it was President Arroyo who, in this case, attempted by proclamation to
appropriate the lands for distribution to indigenous peoples and cultural communities. As already
stated, the lands by their character have become inalienable from the moment President Garcia
dedicated them for CMU's use in scientific and technological research in the field of agriculture.
They have ceased to be alienable public lands.58 ChanRoblesVirtualawlibrary
This Court is not unmindful of its earlier pronouncement in CMU v. DARAB that the land reservation is
a private land registered and titled in the name of its lawful owner, the CMU. This pronouncement,
which is now being argued by CMU as one of its bases in convincing this Court that the subject
property is owned by it and already alienable, is specious. The 1992 CMU case merely enumerated the
reasons why the said portion of the property is beyond the coverage of CARP. Moreover, the fact that
the Court had already settled the inalienable character of the subject property as part of the long term
functions of the autonomous agricultural educational institution in the case of CMU v. DARAB and
reiterated in CMU v. Executive Secretary, belies CMU's contention that this Court has recognized that
the said land is a private property or that the land is alienable and disposable.
As to what constitutes alienable and disposable land of the public domain, this Court expounds in its
pronouncements in Secretary of the Department of Environment and Natural Resources v. Yap:59
xxxx
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, declassifying inalienable public land into disposable land
for agricultural or other purposes. In fact, Section 8 of CA No. 141 limits alienable or disposable lands
only to those lands which have been "officially delimited and classified."
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. To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or claim) is
alienable or disposable. 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. The applicant may also secure a certification from the
government that the land claimed to have been nossessed for the required number of years is
alienable and disposable.60 ChanRoblesVirtualawlibrary
In the case at bar, CMU failed to establish, through incontrovertible evidence, that the land
reservations registered in its name are alienable and disposable lands of public domain. Aside from the
series of indorsements regarding the filing of the application for the compulsory registration of the
parcels of land and the said directive from the President, CMU did not present any proof of a positive
act of the government declaring the said lands alienable and disposable.
For lack of proof that the said land reservations have been reclassified as alienable and disposable, the
said lands remain part of inalienable public domain, hence; they are not registrable under Torrens
system.
This Court will not discuss the other issue raised by CMU, e.g., the filing of the petition for cadastral
proceeding was pursuant to the written consent, authorization and directive of the OSG, as the same
was not discussed in the assailed Decision of the CA. This Court also dismisses the other issue raised
— that the titles in CMU's name were singled out by respondent- for lack of evidence. chanrobleslaw
WHEREFORE, the petition for review on certiorari dated January 14, 2011 filed by petitioner Central
Mindanao University is hereby DENIED. The Decision dated December 30, 2010 of the Court of
Appeals in CA-G.R. SP No. 81301 is hereby AFFIRMED. The proceedings in the Court of First
Instance, 15thJudicial District, Branch II of Bukidnon is NULL and VOID. Accordingly, Original
Certificate of Title Nos. 0-160, OCT No. 0-161 and OCT No. 0-162 issued in the name of petitioner,
are CANCELLED. Sheet 1, Lot 1 of Ir-1031-D and Sheet 2, Lot 2 of Ir-1031 -D are ORDERED
REVERTED to the public domain.
Velasco, Jr., (Chairperson), Perez, Reyes, and Jardeleza, JJ., concur. chanroblesvirtuallawlibrary
Endnotes:
1
Penned by Associate Justice Romulo V. Borja, with Associate Justices Edgardo T. Lloren and Ramon
Paul L. Hernando, concurring, rollo, pp. 51-66.
2
Penned by Judge Abundio Z. Arrieta, CA rollo, pp. 30-71.
3
Id at 72-81.
4
Id. at 82-98.
5
AN ACT TO CONVERT MINDANAO AGRICULTURAL COLLEGE INTO CENTRAL MINDANAO UNIVERSITY
AND TO AUTHORIZE THE APPROPRIATION OF ADDITIONAL FUNDS THEREFOR.
Rollo, pp. 5-6.

6
7
Id. at 52.
8
Id. at 9.
9
Id. at 11.
10
Section 83. Upon the recommendation of the Secretary of Agriculture and Commerce, the President
may designate by proclamation any tract or tracts of land of the public domain as reservations for the
use of the Commonwealth of the Philippines or of any of its branches, or of the inhabitants thereof, in
accordance with regulations prescribed for this purpose, or for quasi-public uses or purposes when the
public interest, requires it, including reservations for highways, rights of way for railroads, hydraulic
power sites, irrigation systems, communal pastures or leguas connmales, public parks, public
quarries, public fishponds, workingmen's village and other improvements for the public benefit.
Reserving for the Mindanao Agricultural College Site Purposes Certain Portions of the Public Domain
11
Situated in the Barrio of Musuan, Municipality of Maramag, Province of Bukidnon, Island of Mindanao.
12
Rollo, p. 11.
13
Id. at 12.
14
Id. at 13.
15
Id.
16
Id. at 14.
17
18
Rollo, pp. 52-53.
19
Id. at 53.
20
Supra note 11.
21
22
Supra note 19.
23
24
Supra note 4, at 91. cralawred
25
Id. at 94-98.
26
Id. at 98. cralawred
27
Rollo, p. 54.
28
Id.
29
30
Section 53. It shall be lawful for the Director of Lands, whenever in the opinion of the President the
public interests shall require it, to cause to be filed in the proper Court of First Instance, through the
Solicitor-General or the officer acting in his stead, a petition against the holder, claimant, possessor,
or occupant of any land who shall not have voluntarily come in under the provisions of this chapter or
of the Land Registration Act, stating in substance that the title of such holder, claimant, possessor, or
occupant is open to discussion; or that the boundaries of any such land which has not been brought
into court as aforesaid are open to question; or that it is advisable that the title to such lands be
settled and adjudicated, and praying that the title to any such land or the boundaries thereof or the
right to occupancy thereof be settled and adjudicated. The judicial proceedings under this section shall
be in accordance with the laws on adjudication of title in cadastral proceedings.
31
Section 87. If all the lands included in the proclamation of the President are not registered under the
Land Registration Act, the Solicitor-General, if requested to do so by the Secretary of Agriculture and
Commerce, shall proceed in accordance with the provision of section fifty-three of this Act.
32
CA rollo, pp. 14 and 16.
33
Id. at 15.
Rollo, pp. 65-66.

34
35
Id. at 59-60.
36
Id at 60.
37
Id.
38
Id at 65.
39
Id. at 21. cralawred
40
Id. at 23.
41
Id. at 70.
42
Id. at 26.
43
255 Phil. (1989).
Republic v. Judge De la Rosa, supra, at 22.

44
Republic v. Capco de Tensuan, G.R. No. 171136, October 23, 2013, 708 SCRA 367 382
45
46
Id.
47
Id.
Republic of the Philippines, represented by Commander Raymond Alpuerto of the Naval Base Camilla
48
Osias, Port San Vicente, Sta. Ana, Cagayan v. Rev. Claudia R. Cortez, Sr., G.R. No. 197472,
September 7, 2015.
49
Id.
50
G.R. No. 177168, August 3, 2015.
Navy Officers' Village Association, Inc. v. Republic, supra.

51
52
Id.
Supra note 42.

53
AN ACT TO FURTHER IMPLEMENT THE FREE DISTRIBUTION OF AGRICULTURAL LANDS OF THE

54
PUBLIC DOMAIN AS PROVIDED FOR IN COMMONWEALTH ACT NUMBERED SIX HUNDRED AND
NINETY-ONE, AS AMENDED, TO ABOLISH THE LAND SETTLEMENT AND DEVELOPMENT CORPORATION
CREATED UNDER EXECUTIVE ORDER NUMBERED THREE HUNDRED AND FIFTY-FIVE, DATED OCTOBER
TWENTY-THREE, NINETEEN HUNDRED AND FIFTY, AND TO CREATE IN ITS PLACE THE NATIONAL
RESETTLEMENT AND REHABILITATION ADMINISTRATION, AND FOR OTHER PURPOSES.
Supra note 42.

55
56
G.R. No. 100091, October 22, 1992.
57
645 Phil. 282(2010).
58
CMU v. Executive Secretary, supra, at 291. (Emphasis supplied)
59
589 Phil. 156(2008).
Secretary of the Department of Environment and Natural Resources v. Yap, supra, at 182-183.
60
(Citations and emphasis omitted)
SECOND DIVISION
February 17, 2016
G.R. No. 175760

REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
SOGOD DEVELOPMENT CORPORATION, Respondent.
DECISION
LEONEN, J.:
For a judicial confirmation of title under Section 48(b) of the Public Land Act, the land subject of
the application needs only to be alienable and disposable as of the time of the application,
provided the applicant's possession and occupation of the land dates back to June 12, 1945, or
earlier.
This Petition for Review on Certiorari seeks to annul and set aside the Decision dated August
1 2
25, 2005 and Resolution dated November 7, 2006 of the Court of Appeals Cebu City in CA-
3
G.R. CV No. 72389. The Court of Appeals affirmed the Decision dated May 10, 2001 of the
4 5
Municipal Circuit Trial Court of Catmon-Carmen-Sogod, Cebu, which granted respondent

Sogod Development Corporation’s (Sogod) application for original registration of title over Lot
No. 2533, Cadastre 827-D, situated in Tabunok, Sogod, Cebu. 6
On December 9, 1999, Sogod filed an application for registration and confirmation of land title
over Lot No. 2533, Cad. 827-D with an area of 23,896 square meters and situated in Brgy.
Tabunok, Municipality of Sogod, Province of Cebu. The case was docketed as Land
7
Registration Case No. 016-SO. 8
Sogod claimed that it purchased the land "from Catalina Rivera per deed of absolute sale
dated Oct[ober] 28, 1996[.]" It also averred that "by itself and through its predecessors-in-
9
interest[,] [it had] been in open, continuous, exclusive[,] and notorious possession and
occupation of [the land] since June 12, 1945[.]" 10
On February 11, 2000, the Office of the Solicitor General moved to dismiss the Petition on the
11
ground that Sogod was disqualified from applying for original registration of title to alienable
lands pursuant to Article XII, Section 3 of the 1987 Constitution. 12
The trial court issued an Order dated June 15, 2000 pronouncing a "general default against all
persons except against the Solicitor General[.]" 13
On September 19, 2000, the Regional Executive Director of the Department of Environment
and Natural Resources, Region VII, Banilad, Mandaue City filed an Opposition on the ground
that the land was previously forest land and "was certified and released as alienable and
disposable only on January 17, 1986." Thus, it could not be registered without violating
14
Section 48, paragraph (b) of Commonwealth Act No. 141, otherwise known as the Public Land
Act, as amended by Republic Act No. 6940. 15
Apart from presenting documentary evidence, Sogod also presented witnesses Celedonio
Campos, Jr., Bonifacia Sugarol, and Ranito Quadra to prove its ownership and possession of
the land. According to their testimonies, the land "was originally in the possession of Ignacia
16
Rivera, the mother of Catalina." "Catalina inherited this land from her mother[.]" On October
17 18
28, 1996, Catalina sold the land to Sogod.19 "A tax clearance dated July 30, 1999 was issued
by the Office of the Municipal Treasurer, certifying that all taxes over the land covered by Tax
Declaration No. 043-6156 had been paid." "Thereafter, Tax Declaration No. 11096 A was
20
issued in the name of [Sogod]." 21
The Office of the Solicitor General did not present any controverting evidence. 22
On May 10, 2001, the trial court rendered the Decision granting the application. The Decision
23 24
stated, in part:
The facts presented show that the applicant corporation and its predecessor-in-interest have
been in open, continuous, exclusive, notorious and undisturbed possession of the land, subject
of this application for registration of title for not less than fifty (50) years or since time
immemorial. The state did not present evidence to controvert these facts.
WHEREFORE, from all the foregoing undisputed facts which are supported by oral and
documentary evidence, the court finds and so holds that the applicant, Sogod Development
Corporation represented by Celedonio Campos, Jr. has a registrable title to the land sought to
be registered, hereby confirming the same and ordering its registration under Act 494, as
amended by Presidential Decree No. 1529 over Lot 2533, Cad 827-D, situated in Tabunok,
Sogod, Cebu, Island of Cebu, Philippines, as described in Plan As-07-001393, and strictly in
line with its Technical Description, upon the finality of this decision. 25
The Office of the Solicitor General appealed to the Court of Appeals. According to the Office
26
of the Solicitor General, the trial court erred in allowing the titling of Lot No. 2533 because:
(1) Sogod failed to prove its open, continuous, exclusive, and notorious possession and
occupation of the land since June 12, 1945 or earlier; 27
(2) The tax declarations presented by Sogod "are of recent vintage" and are "not 28
accompanied by proof of actual possession . . . since June 12, 1945[;]" 29
(3) The land was only declared alienable and disposable on January 17, 1986,
pursuant to Forestry Administrative Order No. 4-1611, "making it impossible for
30
[Sogod] and its predecessor-sin-interest to have possessed the land in concept of an

owner since June 12, 1945 or earlier[;]" and
31
(4) "Article XII, Section 3 of the 1987 Constitution disqualifies private corporations from
applying for original registration of title to alienable lands."
32
On August 25, 2005, the Court of Appeals rendered its Decision affirming the Decision of the
6th Municipal Circuit Trial Court of Catmon-Carmen-Sogod, Cebu. It ruled that Sogod was able
33
to prove that "it and its predecessors-in-interest ha[d] been in possession of [Lot No. 2533]
since June 12, 1945 or earlier and the land sought to be registered is an agricultural
land[.]" Upholding the corporation’s right to file the application before the court a quo, the
34
Court of Appeals held that lands possessed in the manner and for the period required by
Section 48 of Commonwealth Act No. 141 become ipso jure private lands. Judicial 35
confirmation in this case would only be a formality to confirm "the earlier conversion of the land
into private land[.]"
36
The Office of the Solicitor General moved for reconsideration of the Court of Appeals
37
Decision. In the Resolution dated November 7, 2006, the Court of Appeals denied the Motion
for Reconsideration for lack of merit. Hence, the present Petition for Review was filed.
38
Respondent Sogod Development Corporation assigns the following errors:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION

WHEN IT ALLOWED THE TITLING OF LOT NO. 2533 DESPITE RESPONDENT’S FAILURE
TO SHOW THAT IT AND ITS PREDECESSORS-ININTEREST HAVE BEEN IN OPEN,
CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND OCCUPATION OF
ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC DOMAIN UNDER A BONAFIDE
CLAIM OF OWNERSHIP SINCE JUNE 12, 1945 OR PRIOR THERETO.
II
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN

AFFIRMING THE TRIAL COURT’S DECISION, GRANTING RESPONDENT’S APPLICATION
FOR REGISTRATION OF LOT NO. 2533 IN VIEW OF THE OPPOSITION DATED
SEPTEMBER 13, 2000 OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR) STATING THAT SAID PROPERTY WAS ONLY DECLARED
ALIENABLE AND DISPOSABLE ON JANUARY 17, 1986.
III
THE HONORABLE COURT OF APPEALS ERRED IN GRANTING RESPONDENT’S

APPLICATION FOR REGISTRATION OF TITLE SINCE ARTICLE XII, SECTION 3 OF THE
1987 CONSTITUTION DISQUALIFIES PRIVATE CORPORATIONS FROM APPLYING FOR
ORIGINAL REGISTRATION OF ALIENABLE LANDS.
IV
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE TRIAL

COURT’S DECISION DATED AUGUST 2, 2001, GRANTING THE APPLICATION FOR
REGISTRATION OF TITLE OF THE RESPONDENT ON THE BASES OF TAX
DECLARATIONS WHICH ARE OF RECENT VINTAGE. 39
Respondent filed its Comment, to which petitioner filed its Reply. On May 30, 2011, the court
40 41
gave due course to the Petition and required the parties to submit their respective
memoranda. 42
Petitioner and respondent filed their memoranda on January 4, 2012 and October 15,
43
2014, respectively.
44
Petitioner raises the following issues in its Memorandum:

First, "whether the occupation of forest land prior to its classification as alienable and
disposable land may be considered for purposes of complying with the requirements for judicial
confirmation of title[;]" and
45
Second, "whether [respondent] and its predecessors-in-interest have possessed the property
in the manner and length of time required by law." 46
Petitioner contends that since the "application for registration was filed on December 9, 1999,
respondent could only be considered in bona fide possession for a period of 13 years from the
time [the land] was classified as alienable and disposable [in 1986]." It adds that any
47
possession or occupation of the land prior to its declaration as "alienable and disposable
cannot be counted for purposes of acquisitive prescription because forest lands are not
susceptible of [private appropriation]." It further argues that Section 48(b) of Commonwealth
48
Act No. 141, as amended, "applies exclusively to alienable and disposable public agricultural
land[,] [and] [f]orest lands are excluded." 49
Moreover, petitioner contends that possession in good faith "is important in the consideration of
whether the applicant has acquired a grant of registrable title from the government." "The 50
alienable nature of the land is essential to the bona fide claim of ownership and possession
since June 12, 1945." 51
Even if the court’s ruling in Heirs of Mario Malabanan v. Republic is applied, respondent’s
52
possession would allegedly be short of the length of time required by law. The earliest tax
53
declaration presented by respondent is 1947, which was "short of the June 12, 1945
requirement of [the] law." According to petitioner, "[a] statement that a tax declaration for the
54
year 1945 existed does not equate to clear and convincing proof of possession required by law
considering further that the person who declared the property [could not] be precisely
determined." Petitioner also "point[s] out that the total area . . . declared by respondent’s
55
predecessor’s-in-interest [sic] [was] at most 21,000 square meters as opposed to the area of
23,456 [square] meters [that was] sought to be registered." Finally, according to petitioner, "it
56 57
does not appear that respondent submitted a document proving that Catalina Rivera inherited
the property from her mother." 58
On the other hand, respondent’s application, even when considered under Section 14(2) of
Presidential Decree No. 1529, "must still be dismissed for failure to prove the existence of an
express government manifestation that the property is already patrimonial." 59
Respondent counters that factual issues could not be raised in a petition for review on
certiorari, and the findings of the trial court and the Court of Appeals "that the respondent and
its predecessor-in-interest have been in open, continuous, exclusive, notorious, and adverse
possession of the . . . land since 12 June 1945 or earlier" must be respected.
60 61
Respondent contends that it sufficiently complied with the requirements of the law. First, the
land applied for was alienable and disposable when it filed its application in
1999. Citing Republic v. Court of Appeals and Naguit, respondent contends that "it [was]
62 63
enough that the land [was] declared as alienable and disposable prior to the filing of the
application for registration and not at the start of possession[.]" Second, it and its
64
predecessor-in-interest "occupied and possessed the land openly, continuously, exclusively,

and adversely under a bona fide claim of ownership since [June 12,] 1945 or earlier." 65
Contrary to petitioner’s claim, respondent stresses that it was able to present the tax
declaration for 1945. Moreover, "the various tax declarations, which prove continuity and
66
without intermission, and the tax clearance all in the name of Catalina Rivera[,] support the
claim that [she] was in possession of the . . . land since 1945 and even earlier[.]" Respondent
67
adds that "both the trial court and the Court of Appeals found that the . . . land was planted with
corn[.]" "[P]lanting of corn requires cultivation and fostering[,] which proves that the
68
possession by Catalina Rivera was actual, open and continuous." 69
We deny the Petition.
The main issue revolves around the proper interpretation of Section 48(b) of Commonwealth
Act No. 141, as amended, otherwise known as the Public Land Act, which requires
70
possession under a bona fide claim of ownership since June 12, 1945 for a judicial
confirmation of title:
SECTION 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
thereafter, under the Land Registration Act, to wit:
....
(b) 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 acquisition or ownership, since June 12, 1945, or earlier, immediately
preceding the filing of the application for confirmation of title, except when
prevented by war or force majeure. These shall be conclusively presumed to
have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this chapter. (Emphasis
supplied)
A similar provision is found in Section 14(1) of Presidential Decree No. 1529, otherwise known
as the Property Registration Decree, which reads:
SECTION 14. Who May Apply. — The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through their duly
authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have

been in open, continuous, exclusive and notorious possession and occupation
of alienable and disposable lands of the public domain under a bona fide claim
of ownership since June 12, 1945, or earlier.
This court in Heirs of Mario Malabanan v. Republic has clarified that the fixed date of June 12,
71
1945 qualifies possession and occupation, not land classification, as alienable and
disposable. The agricultural land subject of the application needs only to be classified as
72
alienable and disposable as of the time of the application, provided the applicant's possession
and occupation of the land dates back to June 12, 1945, or earlier. Thus: 73
The dissent stresses that the classification or reclassification of the land as alienable and
disposable agricultural land should likewise have been made on June 12, 1945 or earlier,
because any possession of the land prior to such classification or reclassification produced no
legal effects. It observes that the fixed date of June 12, 1945 could not be minimized or
glossed over by mere judicial interpretation or by judicial social policy concerns, and insisted
that the full legislative intent be respected.
We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite
possession and occupation was the sole prerogative of Congress, the determination of which
should best be left to the wisdom of the lawmakers. Except that said date qualified the period
of possession and occupation, no other legislative intent appears to be associated with the
fixing of the date of June 12, 1945. Accordingly, the Court should interpret only the plain and
literal meaning of the law as written by the legislators. 1avvphi1
Moreover, an examination of Section 48 (b) of the Public Land Act indicates that Congress
prescribed no requirement that the land subject of the registration should have been classified
as agricultural since June 12, 1945, or earlier. As such, the applicant’s imperfect or incomplete
title is derived only from possession and occupation since June 12, 1945, or earlier. This
means that the character of the property subject of the application as alienable and disposable
agricultural land of the public domain determines its eligibility for land registration, not the
ownership or title over it. Alienable public land held by a possessor, either personally or
through his predecessors-in-interest, openly, continuously and exclusively during the
prescribed statutory period is converted to private property by the mere lapse or completion of
the period. In fact, by virtue of this doctrine, corporations may now acquire lands of the public
domain for as long as the lands were already converted to private ownership, by operation of
law, as a result of satisfying the requisite period of possession prescribed by the Public Land
Act. It is for this reason that the property subject of the application of Malabanan need not be
classified as alienable and disposable agricultural land of the public domain for the entire
duration of the requisite period of possession.
To be clear, then, the requirement that the land should have been classified as alienable and
disposable agricultural land at the time of the 0application for registration is necessary only to
dispute the presumption that the land is inalienable. (Citations omitted)
74
The ruling in Heirs of Malabanan adopted the earlier interpretation in Republic v. Court of
Appeals and Naguit that Section 14(1) of the Property Registration Decree "merely requires
75
the property sought to be registered as already alienable and disposable at the time the
application for registration of title is filed." This court also emphasized in Naguit the absurdity
76
that would result in interpreting Section 14(1) as requiring that the public land should have
already been characterized as alienable by June 12, 1945. 77
Besides, we are mindful of the absurdity that would result if we adopt petitioner's position.
Absent a legislative amendment, the rule would be, adopting the OSG’s view, that all lands of
the public domain which were not declared alienable or disposable before June 12, 1945 would
not be susceptible to original registration, no matter the length of unchallenged possession by
the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and
even precludes the government from giving it effect even as it decides to reclassify public
agricultural lands as alienable and disposable. The unreasonableness of the situation would
even be aggravated considering that before June 12, 1945, the Philippines was not yet even
considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the
property sought to be registered as already alienable and disposable at the time the application
for registration of title is filed. If the State, at the time the application is made, has not yet
deemed it proper to release the property for alienation or disposition, the presumption is that
the government is still reserving the right to utilize the property; hence, the need to preserve its
ownership in the State irrespective of the length of adverse possession even if in good faith.
However, if the property has already been classified as alienable and disposable, as it is in this
case, then there is already an intention on the part of the State to abdicate its exclusive
prerogative over the property. 78
Untenable is petitioner’s reliance on Republic v. Diloy, which pronounced that the period of
79
possession before the declaration that land is alienable and disposable agricultural land should
be excluded in the computation of possession for purposes of confirmation of imperfect
title. Diloy was based on Republic v. Herbieto, which was expressly declared in Heirs of
80 81
Malabanan to be incorrect and without precedental value with respect to Section 14(1). The
court declared that:
[T]he correct interpretation of Section 14(1) is that which was adopted in Naguit. The contrary
pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the application of the
provision to the point of virtual inutility since it would only cover lands actually declared
alienable and disposable prior to 12 June 1945, even if the current possessor is able to
establish open, continuous, exclusive and notorious possession under a bona fide claim of
ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under a bona fide claim of
ownership to avail of judicial confirmation of their imperfect titles than what would be feasible
under Herbieto. This balancing fact is significant, especially considering our forthcoming
discussion on the scope and reach of Section 14(2) of the Property Registration Decree.
....
Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental
value with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in
Section 14(1), since it precisely involved [a] situation wherein the applicant had been in
exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Court’s
interpretation of Section 14(1) therein was decisive to the resolution of the case. Any doubt as
to which between Naguit or Herbieto provides the final word of the Court on Section 14(1) is
now settled in favor of Naguit.82
Petitioner’s claim that "[t]he alienable nature of the land is essential to the bona fide claim of
ownership and possession since June 12, 1945" is likewise untenable. In AFP Retirement and
83
Separation Benefits System (AFP-RSBS) v. Republic: 84

Although adverse, open, continuous, and notorious possession in the concept of an owner is a
conclusion of law to be determined by courts, it has more to do with a person’s belief in good
faith that he or she has just title to the property that he or she is occupying. It is unrelated to
the declaration that land is alienable or disposable. A possessor or occupant of property may,
therefore, be a possessor in the concept of an owner prior to the determination that the
property is alienable and disposable agricultural land. His or her rights, however, are still to be
determined under the law. 85
We proceed to the second issue relating to the sufficiency of evidence showing the nature and
length of respondent’s possession over the land. As a rule, factual findings of both the trial
court and the Court of Appeals are binding on this court. Petitioner did not show the existence
of any exceptions for us to depart from this rule.
The trial court and the Court of Appeals found that respondent applicant had sufficiently proved
its and its predecessors-in-interest’s continuous possession of the land tracing back to June
12, 1945 or earlier. Possession since 1945 was established through testimonies of
respondents’ witnesses, the unbroken chain of tax declarations in the name of Catalina Rivera,
the person from whom respondent bought the property in 1996, and a certification from the
86
municipal treasurer that all previous taxes had been paid. Tax declarations or realty tax
87
payments constitute at least proof that the holder has a sincere and honest claim of title over
the property. Moreover, witness Bonifacia Sugarol, the owner of the adjoining land, stated that
88
the land was owned by Ignacia Rivera and inherited by Catalina; and the land was planted with
corn and had many tenants. 89
Contrary to petitioner’s claim, respondent was able to present in evidence the tax declaration
for 1945. What were not presented were tax declarations before 1945 because as testified by a
representative from the Office of the Municipal Assessor of Sogod, all its records before the
war were destroyed. This was discussed by the Court of Appeals, thus:
The applicant also presented a representative from the Office of the Municipal Assessor of
Sogod in the person Ranito Quadra relative to the tax declaration history of Lot 2533. The
oldest tax declaration on file in the said government office was TD 04024 (marked and
submitted as Exh. "CC") for the year 1945. In the said tax declaration, a notation was placed in
the entry –
I (a) Land (Agricultural/Mineral)

ASSESSOR’S FINDINGS
Kind Area Class Unit Value Market Value
Cornland 4.0000 3a P800.00
Maguey 2.0000 1a 120.00
Pasture 4.0169 120.50

Total 10.0169 P1040.50
As can be gleaned from the face of this evidence, the land was already devoted to the planting
of corn, maguey and the rest was pastureland. Also, i[t] appears that TD 04024 cancelled the
1âwphi1
previous tax declaration with number TD 1417. A testimony was also adduced by the same
witness that the previous tax declarations covering the property cannot be produced anymore
because all of their records prior to the Second World War were destroyed.
Analyzing the above-quoted testimony as well as the documentary evidence submitted, it can
be clearly surmised that the land was devoted to agriculture in 1945 and even prior to that
year. Based on human experience, the area planted with corn and maguey is a considerable
tract of land that it presupposes that the land ceased to be a forest land. Such that, even if the
land was declared to be alienable and disposable only in the year 1986, the actual use of
Catalina Rivera of this tract of land was already agriculture. (Citations omitted)
90
Thus, respondent had established (by itself and through its predecessor-in-interest) its
possession in the concept of owner of the property since 1945. It is further undisputed that the
property was declared alienable and disposable in 1986 prior to respondent's filing of its
application in 1999. The Court of Appeals, therefore, did not err in affirming the Municipal
91
Circuit Trial Court Decision granting respondent's application for original registration of title.
WHEREFORE, the Petition is DENIED and the Court of Appeals Decision dated August 25,
2005 and Resolution dated November 7, 2006 are AFFIRMED.
MARVIC M.V.F. LEONEN

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
On leave
MARIANO C. DEL CASTILLO
ARTURO D. BRION *
Associate Justice
Associate Justice
JOSE CATRAL MENDOZA

Associate Justice
ATTESTATION
case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
consultation before the case was assigned to the writer of the opinion of the Court's Division.

Chief Justice
Footnotes
*
On leave.
1
Rollo, pp. 102-147. The Petition was filed pursuant to Rule 45 of the Rules of Court.
2
Id. at 150-160. The Decision was penned by Senior Associate Justice Pampio A.
Abarintos and concurred in by Executive Justice Mercedes Gozo-Dadole and Junior
Associate Justice Ramon M. Bato, Jr. of the Eighteenth Division.
3
Id. at 174. The Resolution was penned by Associate Justice Pampio A. Abarintos
(Chair) and concurred in by Associate Justices Agustin S. Dizon and Priscilla Baltazar-
Padilla of the Twentieth Division.
4
Id. at 102–103.
5
6
Id. at 150.
7
Id. at 150–151.
8
Id. at 107, Petition for Review on Certiorari.
9
10
Id.
11
Id.
12
Id. at 109, Petition for Review on Certiorari.
13
14
Id. at 152.
15
Id.
16
Id. at 105–106 and 114–115, Petition for Review on Certiorari.
17
Id. at 114.
18
Id.
19
Id.
20
Id. at 114–115.
21
Id. at 115.
22
23
Id. The Decision was penned by Judge Manuel D. Patalinghug.
24
Id.
25
Id.
26
Id.
27
Id. at 153.
28
Id.
29
Id.
30
Id. at 155.
31
Id. at 153.
32
Id.
33
Id. at 160.
34
Id. at 159.
35
Id. at 158–159.
36
Id. at 159.
37
Id. at 161–172.
38
Id. at 174.
39
Id. at 116–117, Petition for Review on Certiorari.
40
Id. at 192–194.
41
Id. at 204–211.
42
Id. at 219, Supreme Court Resolution.
43
Id. at 245–259.
44
Id. at 326–342.
45
Id. at 248, Republic’s Memorandum.
46
Id.
47
Id.
48
Id. at 249.
49
Id.
50
Id. at 251.
51
Id. at 253.
52
53
Rollo, p. 255, Republic’s Memorandum.
54
Id. at 256.
55
Id.
56
The land area should be 23,896 square meters.
57
Id.
58
Id.
59
Id. at 257.
60
Id. at 329, Sogod Development Corporation’s Memorandum.
61
Id. at 329–330.
62
Id. at 335.
63
489 Phil. 405 (2005) [Per J. Tinga, Second Division].
64
Rollo, p. 332, Sogod Development Corporation’s Memorandum.
65
Id. at 335.
66
Id.
67
Id. at 339.
68
Id. at 336–337.
69
Id. at 338.
70
Com. Act No. 141 (1936), sec. 48(b) has been amended by Pres. Decree No. 1073
(1977), sec. 4.
71
G.R. No. 179987, September 3, 2013, 704 SCRA 561 [Per J. Bersamin, En Banc].
72
Id. at 581.
73
Id. at 581–582.
74
Id. at 580–582.
75
76
Id. at 414.
77
Id.
78
Id.
79
585 Phil. 404 (2008) [Per J. Chico-Nazario, Third Division].
80
Id. at 415.
81
498 Phil. 227 (2005) [Per J. Chico-Nazario, Second Division].
Heirs of Mario Malabanan v. Republic, 605 Phil. 244, 269–271 (2009) [Per J. Tinga,
82
En Banc].
83
Rollo, p. 253, Republic’s Memorandum.
84
G.R. No. 180086, July 2, 2014, 728 SCRA 602 [Per J. Leonen, Third Division].
85
Id. at 614.
86
Rollo, pp. 338–339, Sogod Development Corporation’s Memorandum.
87
Id. at 114–115, Petition for Review on Certiorari.
Republic v. Court of Appeals, 328 Phil. 238, 248 (1996) [Per J. Torres, Jr., Second
88
Division].
Rollo, pp. 157, Court of Appeals Decision, and 337, Sogod Development
89
Corporation’s Memorandum.
90
Id. at 157–158, Court of Appeals Decision.
91
Id. at 155.
SECOND DIVISION
February 10, 2016
G.R. No. 199537

vs.
ANDREA TAN, Respondent.
DECISION
BRION, J.:
This is a petition for review on certiorari filed by the Republic of the Philippines (Republic) from
the May 29, 2009 decision and October 18, 2011 resolution of the Court of
1 2
Appeals (CA) in CA-G.R. CEB-CV No. 00702. The CA denied the Republic's appeal from LRC
Case No. N-144 wherein the Municipal Trial Court in Consolacion, Cebu, granted respondent
3
Andrea Tan's application for land title registration.
Antecedents
On October 2, 2002, Tan applied for the original registration of title of Lot No. 4080, Cad. 545-
D (new) situated in Casili, Consolacion, Cebu (the subject lot). She alleged that she is the
absolute owner in fee simple of the said 7,807 square-meter parcel of residential land she
purchased from a certain Julian Gonzaga on September 17, 1992. Her application was
docketed as LRC Case No. N-144.
After complying with the jurisdictional requirements, the land registration court issued an order
of general default, excepting the State which was duly represented by the Solicitor General.
During the trial, Tan proved the following facts:
1. The subject lot is within Block 1, Project No. 28, per LC Map No. 2545 of
Consolacion, Cebu;
2. The subject lot was declared alienable and disposable on September 1, 1965,
pursuant to Forestry Administrative Order No. 4-1063;
3. Luciano Gonzaga who was issued Tax Declaration Nos. 01465 in 1965 and 02983 in
1972 initially possessed the subject lot.
4. After Luciano’s death, Julian Gonzaga inherited the subject lot;
5. Andrea Tan purchased the subject lot from Julian Gonzaga on September 17, 1992;
6. She, through her predecessors, had been in peaceful, open, continuous, exclusive,
and notorious possession of the subject lot in the concept of an owner for over thirty
(30) years.
On 28 April 2004, the land registration court granted Tan’s application. The court confirmed her
title over the subject lot and ordered its registration.
The Republic appealed the case to the CA, arguing that Tan failed to prove that she is a
Filipino citizen who has been in open, continuous, exclusive, and notorious possession and
occupation of the subject lot, in the concept of an owner, since June 12, 1945, or earlier,
immediately preceding the filing of her application. The appeal was docketed as CA-G.R. CEB-
CV No. 00702.
On May 29, 2009, the CA denied the appeal. The CA observed that under the Public Land Act,
there are two kinds of applicants for original registration: (1) those who had possessed the land
since June 12, 1945; and (2) those who already acquired the property through prescription.
The respondent’s application fell under the second category.
The CA noted that before land of the public domain can be acquired by prescription, it must
have been declared alienable and disposable agricultural land. The CA pointed to the
certification issued by the Community Environment and Natural Resources Office (CENRO) as
evidence that the subject was classified as alienable and disposable on September 1, 1965,
pursuant to Land Classification Project No. 28. The CA concluded that Tan had already
acquired the subject lot by prescription.
On July 2, 2009, the Republic moved for reconsideration. Citing Republic v. Herbieto, it argued
4
that an applicant for judicial confirmation of title must have been in possession and occupation
of the subject land since June 12, 1945, or earlier, and that the subject land has been likewise
already declared alienable and disposable since June 12, 1945, or earlier. 5
On October 18, 2011, the CA denied the motion for reconsideration citing the then recent case
of Heirs of Mario Malabanan v. Rep. of the Philippines which abandoned the ruling in Herbieto.
6
Malabanan declared that our law does not require that the property should have been declared
alienable and disposable since June 12, 1945, as long as the declaration was made before the
application for registration is filed.
7
On January 5, 2012, the Republic filed the present petition for review on certiorari.
The Petition
The Republic argues: (1) that the CA misapplied the doctrine in Malabanan; and (2) that the
CENRO certification and tax declarations presented were insufficient to prove that the subject
lot was no longer intended for public use.
Meanwhile, the respondent insists that she has already proven her title over the subject lot.
She maintains that the classification of the subject lot as alienable and disposable public land
by the DENR on September 1, 1965, per Land Classification Project No. 28, converted it into
patrimonial property of the State.
From the submissions, the lone issue is whether a declaration that Government-owned land
has become alienable and disposable sufficiently converts it into patrimonial property of the
State, making it susceptible to acquisitive prescription.
Our Ruling
We find the petition meritorious.
All lands of the public domain belong to the State. It is the fountain from which springs any
asserted right of ownership over land. Accordingly, the State owns all lands that are not clearly
within private ownership. This is the Regalian Doctrine which has been incorporated in all of
our Constitutions and repeatedly embraced in jurisprudence.8 Under the present Constitution,
lands of the public domain are not alienable except for agricultural lands. 9
The Public Land Act (PLA) governs the classification, grant, and disposition of alienable and
10
disposable lands of the public domain. It is the primary substantive law on this matter. Section
11 thereof recognizes judicial confirmation of imperfect titles as a mode of disposition of
alienable public lands. Relative thereto, Section 48(b) of the PLA identifies who are entitled to
11
judicial confirmation of their title:
continuous, exclusive, and notorious possession and occupation of agricultural lands
of the public domain, under a bona fide claim of acquisition or ownership, since June
12, 1945, immediately preceding the filing of the application for confirmation of title, except
when prevented by war or force majeure. Those shall be conclusively presumed to have
performed all the conditions essential to a government grant and shall be entitled to a
certificate of title under the provisions of this chapter. (As amended by PD 1073.)
The Property Registration Decree (PRD) complements the PLA by prescribing how registrable
12
lands, including alienable public lands, are brought within the coverage of the Torrens system.
Section 14 of the PRD enumerates the qualified applicants for original registration of title:
Section 14. Who may apply. The following persons may file in the proper Court of First
(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;
(2) Those who have acquired ownership of private lands by prescription under
the provision of existing laws;
(3) Those who have acquired ownership of private lands or abandoned river beds by
right of accession or accretion under the existing laws;
(4) Those who have acquired ownership of land in any other manner provided for by
law.
13
The PRD also recognizes prescription as a mode of acquiring ownership under the Civil
Code. Nevertheless, prescription under Section 14(2) must not be confused with judicial
14
confirmation of title under Section 14(1). Judicial confirmation of title requires:

1. That the applicant is a Filipino citizen; 15
2. That the applicant, by himself or through his predecessors-ininterest, has been in

open, continuous, exclusive and notorious possession and occupation of the property
since June 12, 1945; 16
3. That the property had been declared alienable and disposable as of the filing of the
application.17
Only private property can be acquired by prescription. Property of public dominion is outside
the commerce of man. It cannot be the object of prescription because prescription does not
18 19
run against the State in its sovereign capacity. However, when property of public dominion is
20
no longer intended for public use or for public service, it becomes part of the patrimonial
property of the State. When this happens, the property is withdrawn from public dominion and
21
becomes property of private ownership, albeit still owned by the State. The property is now
22
brought within the commerce of man and becomes susceptible to the concepts of legal
possession and prescription. 1avvphi1
In the present case, respondent Tan’s application is not anchored on judicial confirmation of an
imperfect title because she does not claim to have possessed the subject lot since June 12,
1945. Her application is based on acquisitive prescription on the claim that: (1) the property
was declared alienable and disposable on September 1, 1965; and (2) she had been in open
continuous, public, and notorious possession of the subject lot in the concept of an owner for
over thirty (30) years.
In our 2009 decision and 2013 resolution in Malabanan, we already held en banc that a
23
declaration that property of the public dominion is alienable and disposable does not ipso
facto convert it into patrimonial property. We said:
Accordingly, there must be an express declaration by the State that the public dominion
property is no longer intended for public service or the development of the national wealth or
that the property has been converted into patrimonial. Without such express declaration, the
property, even if classified as alienable or disposable, remains property of the public
dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription.
It is only when such alienable and disposable lands are expressly declared by the State to be
no longer intended for public service or for the development of the national wealth that the
period of acquisitive prescription can begin to run. Such declaration shall be in the form of a
law duly enacted by Congress or a Presidential Proclamation in cases where the President is
duly authorized by law. 24
While a prior declaration that the property has become alienable and disposable is sufficient in
an application for judicial confirmation of title under Section 14(1) of the PRD, it does not
suffice for the purpose of prescription under the Civil Code. Before prescription can even
25
begin to run against the State, the following conditions must concur to convert the subject into
patrimonial property:
1. The subject lot must have been classified as agricultural land in compliance with
Sections 2 and 3 of Article XII of the Constitution;
2. The land must have been classified as alienable and disposable; 26
3. There must be a declaration from a competent authority that the subject lot is no
longer intended for public use, thereby converting it to patrimonial property.
Only when these conditions are met can applicants begin their public and peaceful possession
of the subject lot in the concept of an owner.
In the present case, the third condition is absent. Even though it has been declared alienable
and disposable, the property has not been withdrawn from public use or public service. Without
this, prescription cannot begin to run because the property has not yet been converted into
patrimonial property of the State. It remains outside the commerce of man and the
respondent’s physical possession and occupation thereof do not produce any legal effect. In
the eyes of the law, the respondent has never acquired legal possession of the property and
her physical possession thereof, no matter how long, can never ripen into ownership.
WHEREFORE, we hereby GRANT the petition. The May 29, 2009 decision and October 18,
2011 resolution of the Court of Appeals in CA- G.R. CEB-CV No.
00702 are REVERSED and SET ASIDE. The respondent's application for Land Registration
is DENIED for lack of merit. No pronouncement as to costs.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson


Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION

Chief Justice
Footnotes
1
Rollo, pp. 37-44. Penned by Associate Justice Fiorito S. Macalino and concurred in by
Associate Justices Stephen C. Cruz and Rodil V. Zalameda.
2
Id. at 31-35. Penned by Associate Justice Gabriel T. Ingles and concurred in by
Associate Justices Pampio A. Abarintos and Eduardo B. Peralla, Jr.
3
Id. at 45-48. Through Presiding Judge Jocelyn G. Uy-Po.
4
G.R. No. 156117, 26 May 2005, 459 SCRA 183, 186.
5
Rollo, p. 52.
6
605 Phil. 244 (2009).
7
Id. at 269, citing Republic v. Court of Appeals, G.R. No. 144507, 17 January 2005,
448 SCRA 442.
8
La Bugal-B’laan Tribal Association, Inc. v. Sec. Ramos, 465 Phil. 860, 866
(2004); Secretary of Environment and Natural Resources v. Yap, G.R. No. 167707, 8
October 2008, 568 SCRA 164, 200; Republic v. Ching, G.R. No. 186166, 20 October
2010, 634 SCRA 415.
9
Art. XII, Section 2, 3, PHIL. CONST.
10
Commonwealth Act No. 141 (as amended), [THE PUBLIC LAND ACT], (1936).
11
Section 11. Public lands suitable for agricultural purposes can be disposed of only as
follows:
1. For homestead settlement;
2. By sale;
3. By lease; and
4. By confirmation of imperfect or incomplete titles:
(a) By judicial legalization
(b) By administrative legalization (free patent)
12
Presidential Decree No. 1529, [PROPERTY REGISTRATION DECREE] (1978).
13
Section 14, PROPERTY REGISTRATION DECREE.
14
See CIVIL CODE, Arts. 712 and 1106.
15
Section 48 (b), PUBLIC LAND ACT.
Section 48 (b), PUBLIC LAND ACT; Section 14(1), PROPERTY REGISTRATION

16
DECREE.
17
Heirs of Mario Malabanan v. Republic of the Philippines, 704 SCRA 561, 581
(2013); Republic v. Court of Appeals, supra note 7.
18
Art. 1113, CIVIL CODE.
19
20
21
22
23
Heirs of Mario Malabanan v. Republic of the Philippines, supra note 17.
24
Heirs of Mario Malabanan v. Rep. of the Philippines, supra note 7.
Art. 1134. Ownership and other real rights over immovable property are acquired by
25
ordinary prescription through possession of ten years.
Art. 1137. Ownership and other real rights over immovables also prescribe
through uninterrupted adverse possession thereof for thirty years, without need
of title or of good faith.
26
Sec. 6, PUBLIC LAND ACT.
FIRST DIVISION
G.R. No. 169710, August 19, 2015
REPUBLIC OF THE PHILIPPINES, Petitioner, v. JOSE ALBERTO ALBA, REPRESENTED BY HIS

ATTORNEY-IN-FACT, MANUEL C. BLANCO, JR., Respondent.
DECISION
BERSAMIN, J.:
Under appeal is the decision promulgated on September 8, 2005, 1 whereby the Court of Appeals (CA)
upheld the judgment rendered on January 31, 2001 by the 7 th Municipal Circuit Trial Court (MCTC) of
Ibajay-Nabas, stationed in Ibajay, Aklan granting the application of the respondent for the registration
of five parcels of land with a total area of 213,037 square meters, more or less, all situated in
Barangay Rizal, Municipality of Nabas, Province of Aklan. 2
Antecedents
The respondent was the purchaser for value of the parcel of land known as Lot No. 9100 situated in
Barangay Rizal, Municipality of Nabas, Province of Aklan, and subdivided and designated in the
approved survey plan as Lot No. 9100-A, with an area of 50,000 square meters, more or less; Lot No.
9100-B, with an area of 49,999 square meters, more or less; Lot No. 9100-C, with an area of 50,000
square meters, more or less; Lot No. 9100-D, with an area of 35,001 square meters, more or less;
and Lot No. 9100-E, with an area of 28,037 square meters, more or less. He applied for the original
registration of title over the parcels of land in the MCTC. 3
The Office of the Solicitor General (OSG), in behalf of the Republic of the Philippines, opposed the
application for original registration of title, contending that the respondent and his predecessors-in-
interest had not been in open, continuous, exclusive and notorious possession and occupation of the
lands in question since June 12, 1945.4
After trial, the MCTC rendered judgment on the application on January 31, 2001, disposing: cralawlawlibrary
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the application for
registration of the parcel of land designated in the approved Survey Plan (Exhibit "C") known as Lot
No. 9100, Cad.758-D, Nabas Cadastre and described in the Technical Description (Exhibit "D") with an
area of FIFTY THOUSAND (50,000) square meters, more or less, Exhibit "D-l" with an area of FORTY
NINE THOUSAND NINE HUNDRED NINETY NINE (49,999) Exhibit "D-2" with an area of FIFTY
THOUSAND (50,000) square meters, more or less, Exhibit "D-3" with an area of THIRTY FIVE
THOUSAND ONE (35,001) square meters, more or less, and Exhibit "D-4" with an area of TWENTY
EIGHT THOUSAND THIRTY SEVEN (28,037) square meters, more or less, or a total area of TWO
HUNDRED THIRTEEN THOUSAND THIRTY SEVEN (213,037) SQUARE METERS, more or less, situated
at Barangay Rizal, Municipality of Nabas, Province of Aldan, Island of Panay, Philippines, under the
Property Registration Decree (PD 1529), and title thereto registered and confirmed in the name of
JOSE ALBERTO ALBA, of legal age, married to Maria Beatris Morales, Filipino citizen, and presently
residing at 34 Derby, White Plains, Quezon City, Metro Manila, and herein represented by his
attorney-in-fact Manual C. Blanco, whose residence is at Viscarra Subdivision, Andagao, Kalibo, Aldan.
After this decision shall have become final and executory, an order for the issuance of Decree of
Registration of Title shall issue in favor of the applicant.
SO ORDERED.5
chanrobleslaw
The OSG appealed the judgment to the CA upon the following errors, to wit: cralawlawlibrary
1. That the lower court did not acquire jurisdiction over the application for registration
due to the following:chanRoblesvirtualLawlibrary
a. applicant-appellee's failure to show that the land subject of the application

falls under the jurisdiction of the MCTC; ChanRoblesVirtualawlibrary
b. applicant-appellee's failure to adduce the Official Gazette as evidence; ChanRoblesVirtualawlibrary
c. applicant-appellee's failure to submit the original tracing cloth plan of the

land subject of the application; and
2. That the lower court erred in granting the application for registration when the
applicant-appellee failed to prove possession of an alienable and disposable land of
the public domain for the period and in the concept required by law. 6
Decision of the CA
On September 8, 2005,7 the CA, finding that the trial court did not disregard evidence that affected
the results of the case, and that there was no cogent reason to disturb its factual findings, decreed
thusly: cralawlawlibrary
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by

us DISMISSING the appeal filed in this case and AFFIRMING the Decision dated January 31, 2001
rendered by the lower court in LRC Case No. N-057, LRA Record No. N-69758.
SO ORDERED.8
chanrobleslaw
Issues
Hence, this appeal, with the petitioner insisting, through the OSG, that: cralawlawlibrary
I.
THE COURT A QUO DID NOT ACQUIRE JURISDICTION OVER THE SUBJECT APPLICATION FOR
REGISTRATION OF TITLE FOR FAILURE OF RESPONDENT TO SUBMIT THE ORIGINAL TRACING CLOTH
PLAN OR SEPIA OF THE LAND APPLIED FOR REGISTRATION
II.
RESPONDENT FAILED TO PROVE POSSESSION OVER THE PROPERTY APPLIED FOR REGISTRATION IN
THE CONCEPT REQUIRED BY LAW.9 chanrobleslaw
Ruling
The appeal is meritorious.
I
Requirement for the submission of the approved tracing
cloth plan may be excused if other competent means of
proving identity and location of the lands subject of the
application are available and produced in court
Although conceding the mandatory requirement for the tracing cloth plan, the CA nonetheless ruled in
favor of the respondent upon the authority of jurisprudence, including Director of Lands v. Court of
Appeals,10 wherein the Court, citing the purpose for the requirement of submitting the tracing cloth
plan to be the establishment of the true identity and location of the land subject of the application for
registration in order to avoid boundary overlaps with adjacent lands, 11 held that the respondent
satisfied this purpose by submitting the approved plan and the technical descriptions of Lot No. 9100
(and its derivative lots);12 that the approved plan and the technical descriptions settled the identity
and location of Lot No. 9100;13 and that considering that there was no glaring and irreconcilable
discrepancy,14 the purpose of submitting the tracing cloth plan was fully served.
The OSG maintains, however, that the submission of the tracing cloth plan was a statutory
requirement of mandatory character, rendering the non-submission fatal to the application; 15 that the
submission could not be waived expressly or impliedly;16 that to fix the exact or definite identity of the
land as shown in the approved plan and technical descriptions was the primary purpose of the
submission;17 and that upon the respondent's failure to "actually" present the tracing cloth plan, the
trial court did not acquire jurisdiction over the res, rendering the proceedings a nullity. 18
Section 17 of Presidential Decree No. 1529 (The Property Registration Decree of 1978) provides: cralawlawlibrary
Section 17. What and where to file.-The application for land registration shall be filed with the Court of
First Instance of the province or city where the land is situated. The applicant shall file, together with
the application, all original muniments of titles or copies thereof and a survey plan of the land
approved by the Bureau of Lands.
The clerk of court shall not accept any application unless it is shown that the applicant has furnished
the Director of Lands with a copy of the application and all annexes.
chanrobleslaw
Section 17 shows, indeed, that it is mandatory for the applicant for original registration to submit to
the trial court not only the original or duplicate copies of the muniments of title but also the copy of
the duly approved survey plan of the land sought to be registered. The survey plan is crucial because
it provides reference of the property's exact identity and location.
Did the respondent's submission of the approved plan and technical description, both of which had
been approved by Regional Technical Director of the Land Management Services, satisfy the
requirement?
The answer is in the affirmative. In Republic v. Guinto-Aldana,19 this Court has relaxed the
requirement for the submission of the tracing cloth plan by holding that: cralawlawlibrary
Yet if the reason for requiring an applicant to adduce in evidence the original tracing cloth plan is
merely to provide a convenient and necessary means to afford certainty as to the exact identity of the
property applied for registration and to ensure that the same does not overlap with the boundaries of
the adjoining lots, there stands to be no reason why a registration application must be denied for
failure to present the original tracing cloth plan, especially where it is accompanied by pieces of
evidence—such as a duly executed blueprint of the survey plan and a duly executed technical
description of the property—which may likewise substantially and with as much certainty prove the
limits and extent of the property sought to be registered.
chanrobleslaw
To the same effect were the rulings in Republic v. Court of Appeals,20Recto v. Republic21 and Republic
v. Hubilla22 where the Court has pointed out that although the best means to identify a piece of land
for registration purposes is the original tracing cloth plan approved by the Bureau of Lands (now the
Lands Management Services of the Department of Environment and Natural Resources), other
evidence could provide sufficient identification. In particular, the Court has said in Hubilla,
citing Recto: cralawlawlibrary
While the petitioner correctly asserts that the submission in evidence of the original tracing cloth plan,
duly approved by the Bureau of Lands, is a mandatory requirement, this Court has recognized
instances of substantial compliance with this rule. In previous cases, this Court ruled that blueprint
copies of the original tracing cloth plan from the Bureau of Lands and other evidence could also
provide sufficient identification to identify a piece of land for registration purposes, x x x 23chanrobleslaw
Here, the submission of the approved plan and technical description of Lot No. 9100 constituted a
substantial compliance with the legal requirement of ascertaining the identity or location of the lands
subject of the application for registration. The plan and technical description had been approved by
the Regional Technical Director of the Land Management Services, 24 and were subsequently identified,
marked, and offered in evidence during the trial. Verily, no error can be attributed to the CA when it
declared that: cralawlawlibrary
It is our view that the original tracing cloth plan need not be presented in evidence because the
identity and location of Lot No. 9100 were clearly established by the approved plan and the technical
description thereof It must be noted that, during the hearing of the case, no person appeared and
answered within the time allowed by the trial court to oppose the application filed by the applicant-
appellee except the oppositor-appellant. As a result thereof, the testimonial and documentary
evidence submitted and offered by the applicant-appellee were admitted as unrebutted and
unopposed.
Another point to consider is the fact that there is no glaring and irreconcilable discrepancy of the
actual area of Lot No. 9100. Thus, there is no need to present in evidence the original tracing cloth
plan.25
chanrobleslaw
II
Respondent did not establish his required possession
The CA upheld the finding of the MCTC that the respondent had established his title through
documentary evidence like the tax declarations and the deed of sale from his predecessors-in-interest;
and through evidence showing possession in the concept of an owner for over 50 years. It observed
that although the tax declarations or realty tax payments relevant to the lands were not conclusive
evidence of ownership, they were good indicia of his possession in the concept of owner, for "no one
in his right mind would be paying taxes for a property that is not in his actual or at least constructive
possession."26
The OSG counters that the CA should not have upheld the application for registration on the basis of
mere tax declarations and the testimonies of respondent's attorney-in-fact Manuel Blanco and Atty.
Gideon de Pedro; and that their testimonies of possession since time immemorial did not meet the
standard required by law to warrant the grant of the application.27 Essentially, the OSG contends that
in order for the respondent as the applicant for the original registration of title to prove possession of
alienable public land for the period prescribed by law that was open, exclusive and uninterrupted, 28 he
should not simply declare such possession as his and that of his predecessor-in-interest; 29 that general
statements or phrases were nothing more than conclusions of law that were not evidence of
possession;30 that instead the respondent as the applicant should present specific acts showing the
nature of the alleged possession;31 and that, accordingly, he did not discharge his burden of
substantiation of his application.32
We agree with the insistence of the OSG.
Section 14(1) of P.D. No. 1529 provides: cralawlawlibrary
SEC. 14. Who may apply. - The following persons may file in the proper Court of First Instance an
representatives: chanRoblesvirtualLawlibrary
continuous, exclusive and notorious possession of alienable and disposable lands of the
public domain under a bonafide claim of ownership since June 12, 1945, or earlier.
xxxx
There are three requisites for the filing of an application for registration of title under Section 14(1) of
PD 1529, namely: (1) that the property in question is alienable and disposable land of the public
domain; (2) that the applicant by himself or through his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation; and (3) that such possession is under
a bona fideclaim of ownership since June 12, 1945, or earlier. In short, the right to file the application
for original registration derives from a bona fide claim of ownership dating back to June 12, 1945, or
earlier, by reason of the claimant's open, continuous, exclusive and notorious possession of alienable
and disposable land of the public domain.
Anent the aforecited requisites, the OSG controverted only the second, that is, that the respondent did
not sufficiently prove his and his predecessors-in-interest's open, continuous, exclusive and notorious
possession and occupation of the lands.
The respondent did not satisfactorily demonstrate that his or his predecessors-in-interest's possession
and occupation were of the nature and character contemplated by the law. None of his witnesses
testified about any specific acts of ownership exercised by him or his predecessors-in-interest on the
lands. The general statements of his witnesses on the possession and occupation were mere
conclusions of law that did not qualify as competent and sufficient evidence of his open, continuous,
exclusive and notorious possession and occupation. As we see it, the OSG has correctly observed that
his witnesses did not testify on the specific acts of possession of the respondent or of his
predecessors-in-interest.
In Republic v. Alconaba,33 this Court has explained that the intent behind the law's use of the terms
possession and occupation is to emphasize the need for actual and not just constructive or fictional
possession, thus: cralawlawlibrary
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.34
chanrobleslaw
The Court reverses the CA. The respondent did not competently account for any act of occupation,
development, cultivation or maintenance of the lands subject of his application, either on his part or
on the part of his predecessors-in-interest for the entire time that they were supposedly in possession
of the lands. Witnesses Manuel Blanco and Atty. Gideon de Pedro only testified of their possession
since time immemorial but did not offer any details of specific acts indicative of possession and
occupation. To prove possession, the offer of general statements or phrases is a merely self-serving,
unsubstantiated assertion. Atty. de Pedro alleged that his uncle, Basilio de Pedro, had once possessed
the lands that werecogonal, and used them for pasture and planting of coconut trees, but did not
adduce any specific details indicating such activities as manifestations of ownership or possession that
could be ultimately attributed to the respondent. That the lands were cogonal or planted with coconut
trees did not conclusively disclose that the lands had been actively and regularly, not merely casually
or occasionally, cultivated and maintained.
The respondent's claim of ownership on the basis of the tax declarations alone did not also suffice.
In Cequeña v. Bolante,35 the Court has pointed out that only when tax declarations were coupled with
proof of actual possession of the property could they become the basis of a claim of
ownership.36 Indeed, in the absence of actual public and adverse possession, the declaration of the
land for tax purposes did not prove ownership. 37 It is well-settled that tax declarations are not
conclusive proof of possession or ownership, and their submission will not lend support in proving the
nature of the possession required by the law.
In sum, the respondent did not prove that he and his predecessors-in-interest have been in
continuous, exclusive, and adverse possession and occupation thereof in the concept of owners.
Hence, his application for original land registration fails.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDE the decision promulgated on September 8, 2005; DISMISSES the application for land
registration of the respondent; and ORDERS the respondent to pay the costs of suit.
Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ., concur.
Endnotes:
1
Rollo, pp. 27-36; penned by Associate Justice Isaias P. Dicdican (retired), with Associate Justice
Ramon M. Bato, Jr. and Associate Justice Enrico A. Lanzanas (retired) concurring.
2
3
Id. at 15.
4
Records, pp. 42-43.
5
Rollo, pp. 29-30.

6
7
Supra note I.
8
Id. at 35.
Rollo, p. 18.
9
10
G.R. No. L-56613, March 14, 1988, 158 SCRA 568.
11
Rollo , pp. 32-33.
12
Id. at 33.
13
Id.
14
Id.
15
Id. at 19.
16
Id. at 20.
17
Id.
18
Id.
19
G.R. No. 175578, August 11, 2010,628 SCRA 210, 220.
20
G.R. No. L-62680, November 9, 1988, 167 SCRA 150, 154, citing Republic v. Intermediate Appellate
Court, No. L-70594, October 10, 1986, 144 SCRA 705, 708 and Director of Lands v. Court of
Appeals, No. L-56613, March 14, 1988, 158 SCRA 568.
21
G.R. No. 160421, October 4, 2004, 440 SCRA 79.
22
23
Id. at 184-185.
24
Supra note 8.
25
Id. at 33.
26
Id. at 34.
27
Id. at 21.
28
Id.
29
Id.
30
Id.
31
Id.
32
Id.
33
G.R. No. 155012, April 14, 2004, 427 SCRA 611.
34
Id. at 619-620.
35
G.R. No. 137944, April 6, 2000, 330 SCRA 217.
36
Id. at 226-227.
37
Id. at 228.
FIRST DIVISION
G.R. No. 195990, August 05, 2015
HEIRS OF RAFAEL GOZO REPRESENTED BY CASTILLO GOZO AND RAFAEL GOZO,

JR., Petitioners, v. PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH DAY
ADVENTIST CHURCH (PUMCO), SOUTH PHILIPPINE UNION MISSION OF SDA (SPUMCO)
AND SEVENTH DAY ADVENTIST CHURCH AT SIMPAK, LALA, LANAO DEL NORTE
REPRESENTED BY BETTY PEREZ , Respondents.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 filed by petitioners Heirs of Rafael Gozo seeking to reverse
and set aside the 10 November 2010 Decision2 of the Court of Appeals and its 14 February 2011
Resolution3in CA-G.R. CV No. 00188. The assailed decision and resolution reversed the 30 June 2004
Decision of the Regional Trial Court (RTC) of Kapatagan, Lanao del Norte and held that the action for
nullification and recovery of possession filed by the petitioners is already, barred by laches. The
dispositive portion of the Court of Appeals Decision reads: chanRoblesvirtualLawlibrary
ACCORDINGLY, the Decision dated 30 June 2004 of the court a quo is REVERSED and SET ASIDE.
The South Philippine Union Mission of the Seventh Day Adventist Church remains the absolute owner
of the donated property.4 ChanRoblesVirtualawlibrary
The Facts
Petitioners claim that they are the heirs of the Spouses Rafael and Concepcion Gozo (Spouses Gozo)
who, before their death, were the original owners of a parcel of land with an area 236,638 square
meters located in Sitio Simpak, Brgy. Lala, Municipality of Kolambugan, Lanao del Norte. The
respondents claim that they own a 5,000 square-meter portion of the property. The assertion is based
on the 28 February 1937 Deed of Donation5 in favor of respondent Philippine Union Mission
Corporation of the Seventh Day Adventist (PUMCO-SDA). Respondents took possession of the subject
property by introducing improvements thereon through the construction of a church building, and later
on, an elementary school. On the date the Deed of Donation is executed in 1937, the Spouses Gozo
were not the registered owners of the property yet although they were the lawful possessors thereof.
It was only on 5 October 1953 that the Original Certificate of Title (OCT) No. P-642 covering the entire
property was issued in the name of Rafael Gozo (Rafael) married to Concepcion Gozo (Concepcion)
pursuant to the Homestead Patent granted by the President of the Philippines on 22 August 1953. 6
In view of Rafael's prior death, however, his heirs, Concepcion, and their six children, namely, Abnera,
Benia, Castillo, Dilbert, Filipinas and Grace caused the extrajudicial partition of the property.
Accordingly, the Register of Deeds of Lanao del Norte issued a new certificate of title under Transfer
Certificate of Title (TCT) No. (T-347)-2927 under the names of the heirs on 13 January 1954.
On 30 July 1992, Concepcion caused the survey and the subdivision of the entire property including
the portion occupied by PUMCO-SDA.8 It was at this point that respondents brought to the attention of
Concepcion that the 5,000 square-meter portion of the property is already owned by respondent
PUMCO-SDA in view of the Deed of Donation she executed together with her husband in their favor in
1937. When Concepcion, however, verified the matter with the Register Deeds, it appeared that the
donation was not annotated in the title. The absence of annotation of the so-called encumbrance in
the title prompted petitioners not to recognize the donation claimed by the respondents. The matter
was left unresolved until Concepcion died and the rest of the owners continued to pursue their claims
to recover the subject property from the respondents.
A compromise was initially reached by the parties wherein the petitioners were allowed by
respondents to harvest from the coconut trees planted on the subject property but a
misunderstanding ensued causing respondents to file a case for qualified theft against the petitioners.
On 19 June 2000 or around six decades after the Deed of Donation was executed, petitioners filed an
action for Declaration of Nullity of Document, Recovery of Possession and Ownership with Damages
against PUMCO-SDA before the RTC of Kapatagan, Lanao del Norte. 9 In their-Complaint docketed as
Civil Case No. 21-201, petitioners claimed that the possession of PUMCO-SDA on the subject property
was merely tolerated by petitioners and therefore could not ripen into ownership. 10 In addition,
petitioners argued that the signatures of the Spouses Gozo were forged underscoring the stark
contrast between the genuine signatures of their parents from the ones appearing in the
deed.11 Finally, petitioners averred that granting for the sake of argument that the said signatures
were genuine, the deed of donation will remain invalid for lack of acceptance which is an essential
requisite for a valid contract of donation.12
For their part, respondents insisted on the validity of the donation and on the genuineness of the
signatures of the donors who had voluntarily parted with their property as faithful devotees of the
church for the pursuit of social and religious ends.13 They further contended that from the moment the
Spouses Gozo delivered the subject property to respondents in 1937, they were already in open,
public, continuous and adverse possession thereof in the concept of an owner. 14 A considerable
improvement was claimed to have been introduced into the property in the form of church and school
buildings.15 The argument of the petitioners, therefore, that the donation was invalid for lack of
acceptance, a question which came 63 years after it was executed, is already barred by laches.
After the pre-trial conference, trial on the merits ensued. Both parties adduced documentary and
testimonial evidence to support their respective positions.
On 30 June 2004, the RTC rendered a Decision16 in favor of the petitioners thereby declaring that they
are the rightful owners of the subject property since the contract of donation which purportedly
transferred the. ownership of the subject property to PUMCO-SDA is void for lack of acceptance. In
upholding the right of the petitioners to the land, the court a quo held that an action or defense for
the declaration of nullity of a contract does not prescribe. Anent the claim that petitioners slept on
their rights, the RTC adjudged that the equitable doctrine of laches is inapplicable in the case at bar
because the action of the registered owners to recover possession is based on Torrens title which
cannot be barred by laches. The RTC disposed in this wise: chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing consideration, judgment is hereby rendered in favor of the
[petitioners], to wit:
(1) Declaring the 5,000 square meter portion of the land covered by TCT
[No.] (T-347)-292 part of the common property of the [petitioners];
and
(2) Declaring the Deed of Donation as void.

The [petitioners], however, are not entitled to damages, attorney's fees and cost of litigation prayed
for.17 ChanRoblesVirtualawlibrary
On appeal, the Court of Appeals reversed the RTC Decision 18 and ordered the dismissal of petitioners'
complaint on the ground of laches. The appellate court opined that petitioners failed to assert their
rights over the land for more than 60 years, thus, laches had set in. Even if petitioners were the
registered owners of the land in dispute, laches would still bar them from recovering possession of the
same.
The Motion for Reconsideration filed by the petitioners was likewise denied by the appellate court in a
Resolution19 dated 14 February 2011.
Petitioners are now before this Court via this instant Petition for Review on Certiorari seeking the
reversal of the Court of Appeals Decision and Resolution on the sole ground that: chanRoblesvirtualLawlibrary
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE DECISION OF
THE COURT A QUO ON THE GROUND OF LACHES.20 ChanRoblesVirtualawlibrary
The Court's Ruling
While the opposing parties center their arguments and counterarguments on the timeliness of raising
the question of the validity of' donation, a careful scrutiny of the records, however, reveals a
significant fact that at the time the Deed of Donation was executed by the Spouses Gozo on 28
February 1937, the subject property was part of the inalienable public domain. It was only almost
after two decades later or on 5 October 1953 that the State ceded its right over the land in favor of
the Spouses Gozo by granting their patent application and issuing an original certificate of title in their
favor. Prior to such conferment of title, the Spouses Gozo possessed no right to dispose of the land
which, by all intents and purposes, belongs to the State.
Under the Regalian doctrine, which is embodied in Article XII, Section 2 of our Constitution, all lands
of the public domain belong to the State, which is the source of any asserted right to any ownership of
land. All lands not appearing to be clearly within private ownership are presumed to belong to the
State. 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.21
The classification of public lands is an exclusive prerogative of the executive department of the
government and not the Courts. In the absence of such classification, the land remains as an
unclassified land until it is released therefrom and rendered open to disposition. This is in consonance
with the Regalian doctrine that all lands of the public domain belong to the State and that the State is
the source of any asserted right to ownership in land and charged with the conservation of such
patrimony.22
All lands not appearing to be clearly within private ownership are presumed to belong to the State.
Accordingly, all 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 alienable public domain. As
already well-settled in jurisprudence, no public land can be acquired by private persons without any
grant, express or implied, from the government; and it is indispensable that the person claiming title
to public land should show that his title was acquired from the State or any other mode of acquisition
recognized by law. 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. The applicant may also secure a certification from the
Government that the land applied for is alienable and disposable. 23
Commonwealth Act No. 141, also known as the Public Land Act, as amended by Presidential Decree
No. 1073, 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. The following provisions under Title I,
Chapter II of the Public Land Act, as amended, is very specific on how lands of the public domain
become alienable or disposable:24
SEC. 6. The President, upon the recommendation of the Secretary of Agriculture and Natural
Resources, shall from time to time classify the lands of the public domain into: chanRoblesvirtualLawlibrary
(a) Alienable or disposable,

(b) Timber, and
(c) Mineral lands,
and may at any time and in a like manner transfer such lands from one class to another, for the
purposes of their administration and disposition.
SEC. 7. For the purposes of the administration and disposition of alienable or disposable public lands,
the Batasang Pambansa or the President, upon recommendation by the Secretary of Natural
Resources, may from time to time declare what public lands are open to disposition or concession
under this Act.
xxxx
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. However,
the President may, for reasons of public interest, declare lands of the public domain open to
disposition before the same have had their boundaries established or been surveyed, or may, for the
same reason, suspend their concession or disposition until they are again declared open to concession
or disposition by proclamation duly published or by Act of the Congress.
SEC. 9. For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes to which such
lands are destined, as follows: chanRoblesvirtualLawlibrary
(a) Agricultural; cralawlawlibrary
(b) Residential, commercial, industrial, or for similar productive purposes; cralawlawlibrary
(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall
from time to time make the classifications provided for in this section, and may, at any time and in a
similar manner, transfer lands from one class to another.25 cralawredChanRoblesVirtualawlibrary
By virtue of Presidential Decree No. 705, otherwise known as the Revised Forestry Code, the President
delegated to the DENR Secretary the power to determine which of the unclassified lands of the public
domain are (1) needed for forest purposes and declare them as permanent forest to form part of the
forest reserves; and (2) not needed for forest purposes and declare them as alienable and disposable
lands.26
Per the Public Land Act, alienable and disposable public lands suitable for agricultural purposes can be
disposed of only as follows: chanRoblesvirtualLawlibrary
1. For homestead settlement; cralawlawlibrary
2. By sale; cralawlawlibrary
3. By lease; and
4. By confirmation of imperfect or incomplete titles:
(a) By judicial legalization; cralawlawlibrary
(b) By administrative legalization (free patent).27

Homestead over alienable and disposable public agricultural land is granted after
compliance by an applicant with the conditions and requirements laid down under Title II,
Chapter IV of the Public Land Act, the most basic of which are quoted below: chanRoblesvirtualLawlibrary
SEC. 12. Any citizen of the Philippines over the age of eighteen years, or the head of a family, who
does not own more than twenty-four hectares of land in the Philippines or has not had the benefit of
any gratuitous allotment of more than twenty-four hectares of land since the occupation of the
Philippines by the United States, may enter a homestead of not exceeding twenty-four hectares of
agricultural land of the public domain.
SEC. 13. Upon the filing of an application for a homestead, the Director of Lands, if he finds that the
application should be approved, shall do so and authorize the applicant to take possession of the land
upon the payment of five pesos, Philippine currency, as entry fee. Within six months from and after
the date of the approval of the application, the applicant shall begin to work the homestead, otherwise
he shall lose his prior right to the land.
SEC. 14. No certificate shall be given or patent issued for the land applied for until at least one-fifth of
the land has been improved and cultivated. The period within which the land shall be cultivated shall
not be less than one nor more than five years, from and after the date of the approval of the
application. The applicant shall, within the said period, notify the Director of Lands as soon as he is
ready to acquire the title. If at the date of such notice, the applicant shall prove to the satisfaction of
the Director of Lands, that he has resided continuously for at least one year in the municipality in
which the land is located, or in a municipality adjacent to the same and has cultivated at least one-
fifth of the land continuously since the approval of the application, and shall make affidavit that no
part of said land has been alienated or encumbered, and that he has complied with all the
requirements of this Act, then, upon the payment of five pesos, as final fee, he shall be entitled to a
patent.28ChanRoblesVirtualawlibrary
It is clear under the law that before compliance with the foregoing conditions and requirements the
applicant has no right over the land subject of the patent and therefore cannot dispose the same even
if such disposal was made gratuitously. It is an established principle that no one can give what one
does not have, nemo dat quod non habet.29 It is true that gratuitous disposal in donation may consist
of a thing or a right but the term right must be understood in a "proprietary" sense over which the
possessor has jus disponendi.30 This is because in true donations there results a consequent
impoverishment of the donor or diminution of his assets.31 In Republic v. Court of Appeals,32 the Court
declared the contract of donation, executed by the donor who has no proprietary right over the object
of the contract, null and void, viz: chanRoblesvirtualLawlibrary
Even on the gratuitous assumption that a donation of the military "camp site" was executed between
Eugenio de Jesus and Serafin Marabut, such donation would anyway be void because Eugenio
de Jesus held no dominical rights over the site when it was allegedly donated by him in
1936. In that year, Proclamation No. 85. of President Quezon already withdrew the area from sale or
settlement and reserved it for military purposes, x x x Eugenio de Jesus cannot be said to be
possessed of that "proprietary" right over the whole 33 hectares in 1936 including the disputed
12.8081 hectares for at the time this 12.8081-hectare lot had already been severed from the mass
disposable public lands by Proclamation No. 85 and excluded from the Sales Award. Impoverishment
of Eugenio's asset as a result of such donation is therefore farfetched. (Emphasis supplied)ChanRoblesVirtualawlibrary
It is beyond question that at the time the gratuitous transfer was effected by the Spouses Gozo on 28
February 1937, the subject property was part of the public domain and is outside the commerce of
man. It was only on 5 October 1953 that the ownership of the property was vested by the State to
the Spouses Gozo by virtue of its issuance of the OCT pursuant to the Homestead Patent granted by
the President of the Philippines on 22 August 1953. Hence, the donation of the subject property
which took place before 5 October 1953 is null and void from the very start.33
As a void contract, the Deed of Donation produces no legal effect whatsoever. Quod nullum est,
nullum producit effectum34 That which is a nullity produces no effect.35 Logically, it could not have
transferred title to the subject property from the Spouses Gozo to PUMCO-SDA and there can be no
basis for the church's demand for the issuance of title under its name. Neither does the church have
the right to subsequently dispose the property nor invoke acquisitive prescription to justify its
occupation. A void contract is not susceptible to ratification, and the action for the declaration of
absolute nullity of such contract is imprescriptible. 36
The lack of respondents' right over the property was confirmed when the Spouses Gozo had the entire
property, including the portion occupied by the church, surveyed and patented, and covered by their
homestead patent. Further, after a certificate of title was issued under their names, the Spouses Gozo
did not effect the annotation thereon of the supposed donation. Registration is the operative act that
gives validity to the transfer or creates a lien upon the land.37 Indeed it has been ruled that where
there was nothing in the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore farther than what the
Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto.38 If the rule were otherwise, the efficacy and conclusiveness of
the certificate of title which the Torrens system seeks to insure would entirely be futile and
nugatory.39 The public shall then be denied of its foremost motivation for respecting and observing the
Land Registration Act.40
Just as significantly, the homestead application of the Spouses Gozo over the entire area of the
property including that occupied by respondents and the issuance in their favor of the corresponding
title without any complaint or objection from the respondents, remove the case of the petitioners from
the operation of the doctrine of laches.
And, further than the issuance of an original title, the entire property was made subject of an
extrajudicial partition of the property by the Gozo heirs resulting in the issuance of TCTs in their
names in 1954. Again, in no instance during the partition did the respondents make known their claim
over the property.
Clearly from the facts, the petitioners asserted their rights repeatedly; it was the respondents who
kept silent all throughout about the supposed donee's rights.
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The assailed Decision
dated 10 November 2010 and Resolution dated 14 February 2011 of the Court of Appeals in CA-G.R.
CV No. 00188 are hereby REVERSED and SET ASIDE.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Perlas-Bernabe, JJ., concur.
Endnotes:
Rollo, pp. 10-24.

1
2
Id. at 50-64; Penned by Associate Justice Edgardo T. Lloren with Associate Justices Romulo V. Borja
and Ramon Paul L. Hernando, concurring.
3
Id. at 71-72.
4
Id. at 63.
5
Records, p. 101.
6
Id. at 8.
7
Id. at 143-145.
8
Id. at 146.
9
Id. at 1-7.
10
Id.
11
Id.
12
Id.
13
Id. at 19-24.
14
Id.
15
Id.
16
Rollo, pp. 28-49.
17
Id. at 48-49.
18
Id. at 50-64.
19
Id. at 71-72.
20
Id. at 15.
Republic-Bureau of Forest Development v. Roxas, G.R. No. 157988, 11 December 2013, 712 SCRA
21
177, 201.
22
Republic of the Phils., v. Intermediate Appellate Court, 239 Phil. 393, 401 (1987).
23
Rep. of the Phils., v. Muñoz, 562 Phil. 103, 115-116 (2007).
24
Republic-Bureau of Forest Development v. Roxas, supra note 21.
25
Id. at 201-202.
26
Id. at 203.
27
Id. at 204.
28
Id. at 204-205.
Naval v. Court of Appeals, 518 Phil. 271, 282 (2006).

29
30
That is why future property cannot be donated because ownership does not reside yet in the donor.
(Art. 751, New Civil Code) as cited in Republic v. Court of Appeals, 165 Phil. 142, 159 (1976).
Republic v. Court of Appeals, 165 Phil. 142, 159 (1976).

31
32
Id.
Art. 1409, New Civil Code. The following contracts are inexistent and void from the beginning:
33
(1) Those whose cause, object or purpose is contrary to law, morals,

good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the
transaction;
(4)Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal
object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law. (Emphasis
supplied)
Spouses Tan v. Bantegui, 510 Phil. 434, 447 (2005).
34
35
Id.
Binayug v. Ugaddan, G.R. No. 181623, 5 December 2012, 687 SCRA 260, 273.
36
Spouses Peralta v. Heirs of Abalon, G.R. No. 183448, 30 June 2014, 727 SCRA 477, 494 citing Fule
37
v. De Legare, 117 Phil. 367 (1963).
38
Id. at 494-495.
39
Id. at 495.
40
Id.
SECOND DIVISION
G.R. No. 194617, August 05, 2015
LA TONDEÑA, INC., Petitioner, v. REPUBLIC OF THE PHILIPPINES Respondent.
DECISION
LEONEN, J.:
La Tonde 164a, Inc. (La Tondeña) applied for registration of a 14,286- square-meter parcel of land,
with La Tondeña alleging acquisition and possession even before the Second Wor1d War. It argues the
inadmissibility of the Department of Environment and Natural Resources-Community Environment and
Natural Resources Office's (DENR-CENRO) Report on the land's classification as alienable and
disposable only on January 21, 1987 as this Report was not formally offered as evidence before the
trial court.
This case involves an application of Section 14(1) of Property Registration Decree in relation to Section
48(b) of Commonwealth Act No. 141, as amended, on the requisites for judicial confirmation of
imperfect title.1 This Petition for Review on Certiorari2 assails the Court of Appeals August 10, 2010
Decision3 that reversed and set aside the Municipal Trial Court December 15, 2005 Decision 4 granting
La Tondeña's application for land registration.5 La Tondeña prays that this court reverse and set aside
the Court of Appeals Decision and Resolution,6 then affirm in toto the Municipal Trial Court Decision or,
in the altemative, remand the case for further reception of evidence. 7 redarclaw
On September 28, 2004, La Tondeña, through its Vice President Rosendo A. Bautista, 8 filed an
Application9 for the registration of a 14,286- square-meter parcel of land in Central West, Bauang, La
Union.10redarclaw
La Tondeña alleged obtaining title or ownership by purchase from one Pablo Rimorin and attached the
following documents with its application: "(a) original tracing plan together with its print copies; (b)
technical description of the land; (c) certification, in lieu of lost Surveyor's Certificate for registration;
(d) certificate of tax assessment from 1948 up to the present; (e) copy of Tax Declaration No. 27726;
and (f) copy of the Secretary's Certificate authorizing Rosendo A. Bautista." 11 redarclaw
On October 15, 2004, the Land Registration Authority Administrator forwarded the entire records to
the Municipal Trial Court.12 On December 17, 2004, the trial court sent a Notice of Initial Hearing to
the Office of the Solicitor General. 13 redarclaw
On March 21, 2005, during the initial hearing, the trial court entered an Order of Special Default
against the whole world except against the Republic of the Philippines that filed a formal written
opposition to the application.14redarclaw
The trial court scheduled the hearing for marking of exhibits on April 12, 2005. 15 Rosendo A. Bautista
testified and identified the documents submitted with the application for registration. 16 He alleged that
all records showing La Tondeña's purchase of the land from one Pablo Rimorin were burned, thus,
applicant can only present tax declarations in its name for years 1948, 1953, 1964, 1974, 1980, 1985,
1994, and 1999.17 redarclaw
On May 30, 2005, La Tondeña's property administrator Victor Dumuk testified that from the time his
father, Juan Dumuk, was property administrator before the Second World War up to Victor Dumuk's
present administration, La Tondeña's ownership ofthe land was uncontested, and its possession was
peaceful, continuous, open, and public. 18 He testified that property taxes were paid from 1994 to
2005, and that mango trees and a basketball court can be found on the land. 19 redarclaw
DENR-CENRO Land Investigator Wilfredo Valera submitted a Report dated May 31, 2005 to the trial
court, stating that the land was declared alienable and disposable only on January 21, 1987. 20 The trial
court summarized the Report's contents in its Decision: LawlibraryofCRAlaw
In the investigation report submitted by Special Investigator Wilfreda B. Valera of the DENR, CENRO,
San Fernando City, La Union, the land is covered by Survey Plan No. AP-01-004436 approved by the
Regional Land District/Land Management Bureau, Region I, pursuant to P.D. No. 239 dated September
1973; that it consists of 14,286 square meters and is located in Brgy. Central West, Bauang, La
Union; that the entire area is within the alienable and disposable zone as classified under
Project No. 9, LC No. 3330 and released as well as certified as such on January 21, 1987;
that this parcel of land is not within any civil or military reservations, and is outside of any forest zone
and watershed reservations; that it is not covered by any previously issued land patent, decree or
title; that this land was declared for the first time in the year 1948 under Tax declaration No. 1745 in
the name of La Tondeña Distilleries with an area of 13,292 square meters; that this land is now
covered by Tax declaration No. 27726 in the name of La Tondeña Distilleria Incorporada; that the
corresponding realty taxes as per record of the Municipal Treasurer of Bauang, La Union have been
paid since 1948; that this lot has not been earmarked for public use and not reserved for any future
government projects; that this lot is flat in terrain, presently for agricultural purposes, with bamboos
and some fruit trees planted in it and about .00365 kilometers from the poblacion; that this lot was
found to be free from adverse claims and conflicts during the inspection; that La Tondeña Distilleria
Incorporada is in actual occupation and possession of the land; that this lot does not encroach upon
any bodies of water, Right of Way, and park sites that are devoted to the public; and that during the
investigation and ocular inspection of the area, applicant La Tondeña Inc. thru its authorized
representative, presented the following documents, to wit: Print copy of AP-01-004436 and tax
declarations from the year 1948 up to the present?21 (Emphasis supplied)
La Tondeña alleged that this Report was not presented and formally offered during the proceedings,
and it only learned of its existence during appeal. 22 redarclaw
The Municipal Trial Court, in its Decision dated December 15, 2005, approved La Tondeña's application
for registration:
LawlibraryofCRAlaw
Considering that the government represented by the Asst. Provincial Prosecutor, Bauang, La Union for
and in behalf of the Solicitor General (SOLGEN) is not presenting any evidence, documentary or
testimonial to substantiate the formal written opposition which was filed, the said formal written
opposition is hereby ordered dismissed for lack of merit.
Wherefore, this Court, confirming the Order of Special Default, hereby approves the application and
orders the adjudication and registration of the land described in Survey Plan No. AP-01-004436 (Exh.
"J") and the Technical description of said lot, Lot 4551, CAD 474-D, Bauang Cadastre (Exh. "K")
containing an area of Fourteen thousand two hundred eighty-six (14,286) square meters situated at
Brgy. Central West, Bauang, La Union.
Once this decision becomes final and executory, let the corresponding decree be issued.
So Ordered.23
The Republic of the Philippines filed a Notice of Appeal 24 before the Court of Appeals on the ground
that the trial court's Decision was "contrary to law and evidence." 25 It raised the Report dated May 31,
2005 on the land's classification as alienable and disposable only on January 21, 1987, thus, the land
cannot be the subject matter of an application for judicial confirmation of imperfect title under
Commonwealth Act No. 141 that requires possession from June 12, 1945 or earlier. 26 redarclaw
Instead of filing its Memorandum, La Tondeña filed a Manifestation with Motion to Remand
Case27 dated January 29, 2007 to present further evidence that the land was private land at the time
of its acquisition.28 The Court of Appeals noted the Comment of the Republic of the Philippines, and
denied the Motion of La Tondeña.29 redarclaw
La Tondeña filed a Motion for Reconsideration30 dated December 18, 2008 attaching as newly
discovered evidence the "Plan of Private Land as surveyed for Pablo Rimonin" under Psu-67458 duly
approved on March 5, 1930.31 The Court of Appeals denied reconsideration.32 redarclaw
The Court of Appeals, in its Decision dated August 10, 2010, reversed and set aside the Municipal Trial
Court December 15, 2005 Decision, and dismissed La Tondeña's application for registration. 33 It also
denied reconsideration.34 redarclaw
Hence, La Tondeña filed this Petition.

La Tondeña submits that the Report dated May 31, 2005 should not have been considered by the trial
court since it was not identified and formally offered as evidence. 35 Wilfredo Valera was never
presented in court, thus, he was never cross-examined in violation of La Tondeña's right to due
process.36 La Tondeña alleges that it only saw a copy of the Report when the case was on appeal. 37 redarclaw
In any event, La Tondeña raises the survey plan notation confirming that the land was "inside
alienable and disposable area as per Project No. 09, L.C. Map No. 0333 as certified on Aug. 12,
1934."38 The survey plan was approved by the Department of Environment and Natural Resources in
the performance of its official function that carries the presumption of regularity. 39 La Tondeña argues
that the Republic of the Philippines did not controvert this evidence, and Wilfredo Valera's Report
dated May 31, 2005 that was not formally offered as evidence cannot prevail over the survey plan that
the trial court duly admitted as evidence.40redarclaw
Assuming the land was only reclassified on January 21, 1987, La Tondeña argues that it acquired a
vested right over the land under the 1935 Constitution that allows a private corporation to acquire
alienable and disposable land of public domain:41 redarclaw
With due indulgence, the Honorable Court of Appeals failed to consider that petitioner has acquired a
vested right over the land sought to be registered under the 1935 Philippine Constitution and prior to
the effectivity of the 1973 and 1987 Philippine Constitutions. As a general rule, constitutional
provisions are given prospective application, not retroactive, unless retroactivity is expressly provided
or necessarily implied (People vs. Isagani, et al., 63 SCRA 4). Hence, due to the prospective
application of the 1973 and 1987 Constitutions, it is the provisions of the 1935 Constitution that
should apply to petitioner's application for registration. Undoubtedly, under the 1935 Philippine
Constitution, private corporations are allowed in acquiring alienable and disposable land of the public
domain. (Republic vs. T.A.N. Properties, Inc.[,] GR. No. 154953, June 26, 2008).
Interestingly, the original reckoning point for the required length of possession under the Public Land
Act (C.A. 141) is possession since July 26, 1894. The period of possession was shortened to thirty
(30) years by Republic Act No. 1942, which was enacted on June 22, 1957. Then, on January 25,
1977, Presidential Decree No. 1073 was enacted pegging the reckoning point of possession to June
12, 1945. Hence, until 1972, prior to the effectivity of the 1973 Philippine Constitution, the required
possession of alienable public land that would qualify to judicial confirmation under C.A. 141 is at least
thirty (30) years, or at least from the year 1942. If reckoned from 1972, the latest date when private
corporations are allowed to acquire alienable public lands. Therefore, petitioner already acquired a
vested right over the subject property in 1972.42
La Tondeña submits that "its possession was open, continuous, uninterrupted for more than thirty
(30) years until 1972 prior to the effectivity of the 1973 and 1987 Philippine Constitution[,] [t]hus, the
land became a private property by acquisitive prescription in accordance with the doctrine that open,
exclusive and undisputed possession of alienable land for the 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 order or other sanction ceases to be public land and becomes private property." 43redarclaw
La Tondeña contends that it presented sufficient evidence for approval of its application for
registration. Alternatively, a remand would allow it to cross-examine Wilfredo Valera on his Report,
and La Tondeña can present additional evidence to show that the land was private land as early as
March 5, 1930 as stated in the "Plan of Private Land as Surveyed for Pablo Rimorin" approved by the
Department of Agriculture and Natural Resources. 44 redarclaw
The Republic of the Philippines counters that Section 29 of Presidential Decree No. 1529 provides that
courts are "duty-bound to consider not only the evidence presented by the [parties,] but also the
reports of the Commissioner of Land Registration and the Director of Lands[.]" 45 redarclaw
Assuming the Report dated May 31, 2005 is inadmissible in evidence, La Tondeña still failed to present
proof that the land was declared alienable and disposable on or before June 12, 1945. 46 La Tondeña
cannot rely on the notation on the Sephia Plan of AP-01-004436 and its blueprint copy since this is not
the proof required by law.47 Neither can La Tondeña invoke the 30-year prescriptive period under
Republic Act No. 1942 since Presidential Decree No. 1073, already applicable when La Tondeña filed
its application for registration in 2004, requires possession from June 12, 1945 or earlier. 48 The
Republic of the Philippines quoted at length Heirs of Mario Malabanan v. Republic49 and Republic v.
Rizalvo, Jr.50 on the 30-year rule on land registration.51 Lastly, La Tondeña cannot invoke Article 1113
of the Civil Code since it did not present evidence that the. state declared the land "no longer intended
for public service or for the development of the national wealth." 52 redarclaw
The issues for resolution are: LawlibraryofCRAlaw
First, whether petitioner La Tondeña, Inc. complied with all the requirements for land registration
under Section 48(b) of Commonwealth Act No. 141, as amended, in relation to Section 14(1) of
Presidential Decree No. 1529;
Second, whether petitioner La Tondeña, Inc. acquired a vested right under the 1935 Constitution that
allows a private corporation to acquire alienable and disposable land of public domain; and
Finally, whether the Court of Appeals can consider the Report dated May 31, 2005 that was not
marked, identified, and formally offered as evidence before the trial court.
We deny the Petition.
Commonwealth Act No. 141 known as The Public Land Act covers matters such as "what lands are
open to disposition or concession[.]"53 Section 48(b), as amended, governs judicial confirmation of
imperfect title:
LawlibraryofCRAlaw
SEC. 48. The following-described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:LawlibraryofCRAlaw
...
(b) 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 acquisition or
ownership, since June 12, 1945, or earlier, immediately
preceding the filing of the applications for confirmation of title except
when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under
the provisions of this chapter.54 (Emphasis supplied)
Section 14(1) of Presidential Decree No. 1529 known as the Property
Registration Decree similarly reads: LawlibraryofCRAlaw
SEC. 14. Who may apply.-The following persons may file in the proper Court of First Instance an
representatives: LawlibraryofCRAlaw
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.
Based on Section 48(b) of the Public Land Act in relation to Section 14(1) of the Property Registration
Decree, an applicant for land registration must comply with the following requirements: LawlibraryofCRAlaw
1. The applicant, by himself or through his predecessor-in interest, has been in

possession and occupation of the property subject of the application; chanRoblesvirtualLawlibrary
2. The possession and occupation must be open, continuous, exclusive, and

notorious; chanRoblesvirtualLawlibrary
3. The possession and occupation must be under a bona fide claim of acquisition of
ownership; chanRoblesvirtualLawlibrary
4. The possession and occupation must have taken place since June 12, 1945, or
earlier; and
5. The property subject of the application must be an agricultural land of the public
domain.55
Petitioner argues that the survey plan notation stating that the land was confirmed as alienable and
disposable on August 12, 1934 should prevail over the Report dated May 31, 2005 stating that the
land was reclassified as alienable and disposable only on January 21, 1987 since this Report was not
formally offered as evidence before the trial court.56 redarclaw
Respondent counters that Section 29 of Presidential Decree No. 1529 mandates the court to consider
the Report dated May 31, 2005,57 and even assuming this Report is inadmissible, petitioner still failed
to prove that the land was declared alienable and disposable on or before June 12, 1945. 58 Section 29
reads:LawlibraryofCRAlaw
SEC. 29. Judgment confirming title.-All conflicting claims of ownership and interest in the land subject
of the application shall be determined by the court. If the court, after considering the evidence and
the reports of the Commissioner of Land Registration and the Director of Lands, finds that the
applicant or the oppositor has sufficient title proper for registration, judgment shall be rendered
confirming the title of the applicant, or the oppositor, to the land or portions thereof. (Emphasis
supplied)
The parties' arguments on the admissibility of the Report dated May 31, 2005 as evidence on when
the land was classified as alienable and disposable are mooted by this court's ruling in Heirs of Mario
Malabanan v. Republic.59 redarclaw
Heirs of Mario Malabanan clarified that the June 12, 1945 reckoning point refers to date of possession
and not to date of land classification as alienable and disposable. 60 redarclaw
This court held that "the agricultural land subject of the application needs only to be classified as
alienable and disposable as of the time of the application, provided the applicant's possession and
occupation of the land dated back to June 12, 1945, or earlier.'' 61 redarclaw
Petitioner filed the application for registration on September 28, 2004. All dates claimed as dates of
classification of the land as alienable and disposable-August 12, 1934 as stated in the survey plan
notation that petitioner relies upon; January 21, 1987 as stated in the Report dated May 31, 2005 that
petitioner argues to be inadmissible; and March 5, 1930 as stated in the "Plan of Private Land as
Surveyed for Pablo Rimorin" that petitioner would like to present as additional evidence if the court
remands the case-were all prior to the September 28, 2004 application date, in compliance with
the Heirs of Mario Malabanan ruling.
II
Petitioner's vested-right argument based on the 1935 Constitution that allows a private corporation to
acquire alienable and disposable land of public domain62 must also fail.
Under the 1935 Constitution, private corporations can still acquire public agricultural lands within the
limited area prescribed.63 In The Director of Lands v. Intermediate Appellate Court,64 "the land was
already private land when Acme acquired it from its owners in 1962 and, thus, Acme acquired a
registrable title."65redarclaw
In Republic v. TA.N. Properties, Inc.66 this court found The Director of Lands inapplicable since
respondent corporation "acquired the land on 8 August 1997 from Porting, who, along with his
predecessors-in-interest, has not shown to have been, as of that date, in open, continuous, and
adverse possession of the land for 30 years since 12 June 1945[,] [i]n short, when respondent
acquired the land from Porting, the land was not yet private property." 67redarclaw
Similarly, petitioner has not shown any proof of its purchase of the land, alleging that all records of
this transaction were burned.68 Without evidence on the exact acquisition date, or the character of its
predecessor's occupation or possession of the land, 69 no proof exists that the property was already
private land at the time of petitioner's acquisition.
Survey notations are not considered substantive evidence of the land's classification as alienable and
disposable. Republic v. T.A.N Properties, Inc. discussed the required proof: LawlibraryofCRAlaw
Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable.
The applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the land
subject of the application for registration falls within the approved area per verification through survey
by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the
original classification approved by the DENR Secretary and certified as a true copy by the legal
custodian of the official records. These facts must be established to prove that the land is alienable
and disposable. Respondent failed to do so because the certifications presented by respondent do not,
by themselves, prove that the land is alienable and disposable.70 (Emphasis supplied)
Petitioner's contention-that it acquired a vested right over the land in 1972 since Republic Act No.
1942 was enacted on June 22, 1957 shortened the required possession to 30 years, thus, until 1972
or prior to the 1973 Constitution and Presidential Decree No. 1073, the required possession for judicial
confirmation is at least 30 years or at least from 194271-also fails to convince.
Heirs of Mario Malabanan discussed that the 30-year-period rule in Republic Act No. 1942 was
repealed by Presidential Decree No. 1073 in 1977, thus, only applications for registration filed prior to
1977 may invoke Republic Act No. 1942.72 Since petitioner only filed for registration on September
28, 2004, the June 12, 1945 reckoning date under Presidential Decree No. 1073 applies.
III
Petitioner failed to prove possession and occupation since June 12, 1945 or earlier.
Petitioner's evidence consisted of tax declarations, and the testimonies of Rosendo Bautista and Victor
Dumuk.73 redarclaw
The trial court granted the application, despite lack of records showing petitioner's purchase and
possession of the land prior to June 12, 1945, by relying on Rosendo Bautista's testimony: LawlibraryofCRAlaw
Based on the evidences [sic] presented, testimonial and documentary as well, it is appearing that the
applicant company, La Tondeña Inc., thru its representative has established a satisfactory proof that it
has a registrable title over the subject property, it being a corporation duly organized and existing
under the law of the Philippines with principal address at CPJ Bldg., 105 Carlos Palanca, Jr. St.,
Legaspi Village, Makati City, Metro Manila, and qualified to own, acquire and possess land in the
Philippines, it being established that its possession dates back to 1948 when it was first
declared for the first time but before that, said applicant La Tondei'ia Inc. has owned the land subject
of this case before the Second World War since the oldest tax declaration recorded which is Tax
declaration No. 1745 series of 1948 cancelled Tax declaration No. 6590. Besides, this Court
believes the testimony of Rosendo Bautista to be trustworthy being given in the ordinary
course of business when he stated that La Tondeña Inc. acquired this property by purchase
from a certain Pablo Rimorin but he had no records about that transaction and all that the
company has are tax declarations as early as 1948 and tax receipt. Hence, applicant La
Tondeña Inc. has established a satisfactory proof that it has a reg[i]strable title to the said land
subject of this case since it has owned it for more than fifty-seven (57) years or more. 74
The Court of Appeals did not err in reversing and setting aside the trial court's Decision, and
dismissing petitioner's application for registration. It discussed the insufficiency of proof regarding
petitioner's acquisition of the land and, consequently, the character of the alleged possession by its
predecessor-in-interest: LawlibraryofCRAlaw
The OSG correctly points out the property is incapable of being the subject matter of an application for
judicial confirmation of imperfect title under C.A. 141, as amended, even by a natural person because
of the requirement that the period of possession must be from June 12, 1945 or earlier. Confronted
with the DENR-CENRO Report dated May 31, 2005, appellee did not present proof to establish its
claim that the property was already alienable and disposable from the time it acquired the same in
1948, let alone, its allegation that it acquired the property by purchase. Even Appellee's exact date
of acquisition as purported buyer was not shown with clarity. Neither did it show how its
predecessor-in-interest himself got hold of the property, the character of his possession or
occupation, and how long a time did he exercise the same on the land, if at all.75 (Emphasis
supplied)
On the tax declarations, the oldest recorded one presented by petitioner was for year 1948. 76 This
does not prove possession on or before June 12, 1945.77 redarclaw
In Republic v. Heirs of Dorotea Montoya,78 the only evidence presented to prove occupation and
possession from 1940 was a tax declaration for year 1947 with notation that realty tax payments were
paid since 1940.79 This court discussed that "[a] tax declaration, much less a tax declaration the
existence of which is proved by means of an annotation, is not a conclusive evidence of ownership,
which is, at best, only a basis for inferring possession."80
redarclaw
Petitioner claims possession even before the Second World War, yet petitioner only produced nine (9)
tax declarations.81 This court has held that "intermittent and sporadic assertion of alleged ownership
does not prove open, continuous, exclusive and notorious possession and occupation." 82 redarclaw
This court has also held that "it is only when these tax declarations are coupled with proof of actual
possession of the property that they may become the basis of a claim of ownership." 83 redarclaw
On property administrator Victor Dumuk's testimony, he mentioned that his father was property
administrator before the Second World War until he died in 1984 after which his mother, Felicidad
Dumuk, took over.84 While the tax declarations indicated his father as property administrator, 85 again,
none of these were issued on or before June 12, 1945.
The letter dated March 23, 199486 of petitioner's VP Treasurer Amando C. Ramat, Jr. to Victor Dumuk
confirming Victor Dumuk as caretaker of all petitioner's properties in Bauang, La Union effective
January 1, 199487 also does not prove possession on or before June 12, 1945.
Since petitioner failed to comply with all the requisites for registration as provided by law, the Court of
Appeals did not err in reversing the trial court, and dismissing petitioner's application for registration.
WHEREFORE, the Petition is DENIED.
Carpio, (Chairperson), Del Castillo, and Mendoza, JJ., concur.

Brion, J., see: concurring & dissenting opinion.
Endnotes:
1
See Heirs of Mario Malabanan v. Republic, G.R. No. 179987, September 3, 2013, 704 SCRA 561, 580
[Per J. Bersamin, En Banc].
Rollo, pp. 9-33.

2
3
Id. at 34-45. The Decision was penned by Associate Justice Amy C. Lazaro-Javier and concurred in
by Associate Justices Rebecca De Guia-Salvador (Chair) and Sesinando E. Villon of the Fifth Division.
4
Id. at 75-79. The Decision was penned by Judge Romeo V. Perez.
5
Id. at 9 and 31.
6
Id. at 47. The Resolution was penned by Associate Justice Amy C. Lazaro-Javier and concurred in by
Associate Justices Rebecca De Guia-Salvador (Chair) and Sesinando E. Villon of the Fifth Division.
7
Id. at 31.
8
Id. at 15.
9
Id. at 53-56. The application was docketed as LRC Case No. 85-MTC-Bg. LU.
10
Id. at 34-35 and 75.
11
Id. at 35.
12
Id.
13
Id. at.35-36.
14
Id. at 36 and 75.
15
Id. at 36.
16
Id.
17
Id. at 36 and 77.
18
Id. at 37 and 77.
19
Id. at 37 and 78.
20
Id. at 19.
21
Id. at 78-79.
22
Id. at 19-20.
23
Id. at 79.
24
Id. at 80.
25
Id.
26
Id. at 40.
27
Id. at 81-84.
28
Id. at 40.
29
Id. at 86.
30
Id. at 87-92.
31
Id. at 40-41.
32
Id. at 94.
33
Id. at 44.
34
Id. at 47.
35
Id. at 180.
36
Id. at 181.
37
Id.
38
Id.
39
Id. at 181-182.
40
Id. at 182.
41
Id. at 183.
42
Id. at 183-184.
43
Id. at 185.
44
Id. at 186 and 188-189.
45
Id. at 215.
46
Id. at 216.
47
Id. at 216-217.
48
Id. at 225.
49
605 Phil. 244, 275-279 (2009) [Per J. Tinga, En Banc].
50
659 Phil. 578, 585-590 (2011) [Per J. Villarama, Jr., Third Division].
Rollo, pp. 218-225.

51
52
Id. at 225.
53
Com. Act No. 141 (1936), sec. 7.
See Heirs of Mario Malabanan v. Republic, G.R. No. 179987, September 3, 2013, 704 SCRA 561,
54
578-579 [Per J. Bersamin, En Banc].
Heirs of Mario Malabanan v. Republic, G.R. No. 179987, September 3, 2013, 704 SCRA 561, 579-580
55
[Per J. Bersamin, En Banc].
Rollo, p. 182.
56
57
Id. at 214-215.
58
Id. at 216.
59
60
Id. at 581.
61
Id. at 584.
Rollo, pp. 183-184.

62
63
See Republic v. T.A.N. Properties, Inc., 578 Phil. 44 J, 460 (2008) [Per J. Carpio, First Division].
64
230 Phil. 590,605 (1986) [Per J. Narvasa, En Banc].
Republic v. T.A.N. Properties, Inc., 578 Phil. 441,460 (2008) [Per J. Carpio, First Division].
65
66
67
Id. at 461.
Rollo, pp. 36 and 77.

68
69
Id. at 42-43.
Republic v. T.A.N. Properties, Inc., 578 Phil. 441, 452-453 (2008) [Per J. Carpio, First Division].
70
Rollo, p. 184.
71
Heirs of Mario Malabanan v. Republic, 605 Phil. 244, 275-276 (2009) [Per J. Tinga, En Banc].
72
Rollo, p. 76.
73
74
Id. at 78.
75
Id. at 42-43.
76
Id. at 51-52.
See Republic v. Santos, G.R. No. 180027, July 18, 2012, 677 SCRA 144, 155 [Per J. Perez, Second
77
Division].
78
GR. No. 195137, June 13,2012, 672 SCRA 576 [Per J. Reyes, Second Division].
79
Id. at 586.
80
Id., citing Republic v. Court of Appeals, 328 Phil. 238 (1996) [Per J. Torres, Jr., Second Division].
Rollo, pp. 51-52.

81
Republic v. East Silverlane Realty Development Corporation, 682 Phil. 376, 394 (2012) [Per J. Reyes,
82
Second Division], quoting Wee v. Republic, 622 Phil. 944, 956 (2009) [Per J. Del Castillo, Second
Division].
83
Id. at 394, citing Cequeña v. Bolante. 386 PhiL 419, 430 (2000) [Per J. Panganiban, Third Division].
Rollo, p. 77.
84
85
Id.
86
Id. at 71.
87
Id. at 52.
CONCURRING AND DISSENTING OPINION
BRION, J.:
I concur with the DENIAL of the petition. I agree that petitioner La Tondeña, Inc. (La Tondeña) failed
to comply with all the requirements for land registration under Section 48 (b) of Commonwealth Act
No. 1411 or the Public Land Act (PLA) in relation with Section 14 (1) of Presidential Decree No.
15292 or the Property Registration Decree (PRD).
In particular, I believe that the petition should be denied for the following reasons: LawlibraryofCRAlaw
First, La Tondeña failed to prove that the property was already private at the time of its purchase.
Second, it could not have acquired any vested right over the property as of 1972 pursuant to
Republic Act No. 1942.3 redarclaw
Third and last, that La Tondeña failed to prove possession and occupation since June 12, 1945, or
earlier.
I find these conclusions fully supported by the facts (as shown by the evidence or its absence), the
relevant laws, and the principles and precedents applying these laws.
I dissent, however, from the ponencia's ruling that "the agricultural land subject of the application
[for registration under Section 48 (b) of the PLAin relation with Section 14 (1) of the PRD] needs only
to be classified as [A & D] as of the time of the [filing of the] application," not on June 12, 1945, as
required by Section 48 (b).
I find this conclusion (that relies heavily on Heirs of Mario Malabanan v. Republic of the
Philippines)4contrary to the Constitution, the law and their underlying principles and the precedents
that correctly and logically interpreted them. In ruling on this particular issue, the ponencia effectively
read into the law what the Constitution does not, and the legislature did not, provide an exercise in
policy determination and policy formulation process that the Court does not have the authority to
undertake.
Thus, I submit this opinion to reflect my continuing objection to the majority's continuing disregard, as
reflected in its ruling on this case, of the standards set by the Constitution and the PLA.
As I explained in my concurring and dissenting opinion in Heirs of Mario Malabanan5 (herein referred
to as the Malabanan Opinion), for purposes of confirmation and registration of imperfect title
under Section 48 (b) of the PLA (as amended) in relation with Section 14 (1) of the PRD,
the public land sought to be registered must have been classified as alienable and
disposable as of the cutoff date stated in Section 48 (b)-June 12, 1945, or earlier.
Refutation of the present ponencia

within the context of Heirs of Mario Malabanan
It will be recalled that the majority in Heirs of Mario Malabanan 6 brushed aside the position taken by
the Office of the Solicitor General (OSG) that for "one to acquire the right to seek registration of an
alienable and disposable land of the public domain, it is not enough that the applicant and his/her
predecessors-in-interest be in possession under a bona fide claim of ownership since 12 June 1945;
the alienable and disposable character of the property must have been declared also as of 12 June
1945."7redarclaw
Relying extensively on Republic v. Court of Appeals and Naguit,8 the majority in Heirs of Mario
Malabanan emphatically declared: LawlibraryofCRAlaw
x x x Following the OSGs approach, all lands certified as alienable and disposable after 12
June 1945 cannot be registered either under
Section 14(1) of the Property Registration Decree or Section 48(b) of the Public Land Act as
amended. The absurdity of such an implication was discussed in Naguit.
Petitioner suggests an interpretation that the alienable and disposable character of the land should
have already been established since June 12, 1945, or earlier. This is not borne out by the plain
meaning of Section 14(1). Since June 12, 1945, as used in the provision, qualifies its
antecedent phrase under a bonafide claim of ownership. Generally speaking, qualifying
words restrict or modify only the words or phrases to which they are immediately
associated, and not those distantly or remotely located. Ad proximum antecedents fiat
relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if we adopt petitioners position. Absent a
legislative amendment, the rule would be, adopting the OSGs view, that all lands of the public domain
which were not declared alienable or disposable before June 12, 1945 would not be susceptible to
original registration, no matter the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the
government from giving it effect even as it decides to reclassify public agricultural lands as alienable
and disposable. The unreasonableness of the situation would even be aggravated considering that
before June 12, 1945, the Philippines was not yet even considered an independent state.
Accordingly, the Court in Naguit explained: LawlibraryofCRAlaw
[T]he more reasonable interpretation of Section 14(1) is that it merely requires the
property sought to be registered as already alienable and disposable at the time the
application for registration of title is filed. If the State, at the time the application is made, has
not yet deemed it proper to release the property for alienation or disposition, the presumption is that
the government is still reserving the right to utilize the property; hence, the need to preserve its
ownership in the State irrespective of the length of adverse possession even if in good faith. However,
if the property has already been classified as alienable and disposable, as it is in this case, then there
is already an intention on the part of the State to abdicate its exclusive prerogative over the property.
The Court declares that the correct interpretation of Section 14(1) is that which was
adopted in Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit,
absurdly limits the application of the provision to the point of virtual inutility since it would
only cover lands actually declared alienable and disposable prior to 12 June 1945, even if the
current possessor is able to establish open, continuous, exclusive and notorious possession under
a bona fide claim of ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership to
avail of judicial confirmation of their imperfect titles than what would be feasible under Herbieto. This
balancing fact is significant, especially considering our forthcoming discussion on the scope and reach
of Section 14(2) of the Property Registration Decree. [All emphases and underscoring supplied.]
As I maintain the same view and legal reasoning, I reiterate below the pertinent portions of
my Malabanan Opinion that I invoke as basis, mutatis mutandis, of my position in the present case.
Classification is a constitutionally and

statutorily required step without which
the land forms part of the mass of the
public domain that are completely
inalienable
The Constitution, under Section 2, Article XII,9 classifies public lands into agricultural, mineral, and
timber. Of these public lands, only agricultural lands can be alienated. These classifications are
important and should be given full legal recognition and effect for without the requisite classification,
there is no basis to determine which lands of the public domain are alienable and which are not.
In other words, classification is a constitutionally required step. As I explained in my Malabanan

Opinion: "... without classification into disposable agricultural land, the land forms part of the mass of
the public domain that, not being agricultural, must be mineral or timber land that are completely
inalienable and as such cannot be possessed with legal effocts. "
This conclusion proceeds from the settled constitutional and jural precept, otherwise known as the
regalian doctrine, that all lands of the public domain as well as all natural resources enumerated
therein, whether on private or public land, belong to the State. "To allow effoctive possession is to do
violence to the regalian doctrine; the ownership and control that the doctrine denotes will be less than
full if the possession that should be with the State as owner, but is elsewhere without any authority,
can anyway be recognized."10 redarclaw
Classification, too, is a fundamental and indispensable requirement from the perspective of statutory
law.
In my Malabanan Opinion, I pointed out that the PLA, under which grants of public lands can be
claimed under its Section 48 (b), operates only on public lands already classified as alienable and
disposable. A necessary implication of this legal reality is the other legal reality that prior to such
classification, possession under Section 48 (b) cannot be claimed.
The reason for this position is simple: "In the absence of such classification, the land remains
unclassified public land that fully belongs to the State. This is fully supported by Sections 6, 7, 8, 9,
and 10 of CA 141. If the land is either mineral or timber and can never be the subject of
administration and disposition, it defies legal logic to allow the possession of these unclassified lands
to produce legal effect. Thus, the classification of public land as alienable and disposable is
inextricably linked to effective possession that can ripen into a claim under Section 48(b) of the
PLA."11 In short, "[t]here can simply be no imperfect title to be confirmed over lands not yet classified
as disposable or alienable."
Under Article 530 of the Civil Code,

only things and rights susceptible
of being appropriated may be the
object of possession.
Consistent with the constitutional and statutory reasons explained above, I also pointed out in
my Malabanan Opinion that possession is essentially a civil law term that can best be understood in
terms of the Civil Code given the absence of any specific definition in the PLA except in terms of time
of possession.
In this respect, "Article 530 of the Civil Code provides that '[o]nly things and rights which are
susceptible of being appropriated may be the object of possession. ' Prior to the declaration of
alienability, a land of the public domain cannot be appropriated; hence, any claimed possession of
public land [prior to such declaration} cannot have legal effects."12 redarclaw
Accordingly, whether the application for registration is filed before or after the declaration of
alienability of the public land is immaterial if, in one as in the other, no effective possession can be
recognized prior to the declaration of alienability.
Under PD 1073, the intent to count the

alienability to June 12, 1945, is seen in
the direct, continuous, and seamless
linking of the A & D lands of the public
domain to June 12,1945, under the
wording of the Decree
As the majority in Heirs of Mario Malabanan assumed (based on its statutory construction reasoning
and its reading of Section 48 (b) of the PLA), the ponencia in this case similarly assumes that all that
the law requires is possession from June 12, 1945, and that it suffices if the land has been classified
as alienable at the time of application for registration.
As I discussed in my Malabanan Opinion, the June 12, 1945 cutoff date was painstakingly set by law
and should, thus, be given full significance.
On this point, PD 1073 that amended Section 48(b) categorically shows the full import of this cutoff
date, as it reads:LawlibraryofCRAlaw
SECTION 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable lands
of the public domain which have been in open, continuous, exclusive and notorious possession and
occupation by the applicant himself or thru his predecessor-in-interest, under a bona fide claim of
acquisition of ownership, since June 12, 1945.
Note well that while "PD 1073 did not expressly state what Section 48(b) should provide under the
amendment PD 1073 introduced in terms of the exact wording of the amended Section 48(b),13 its
intent to reckon the alienability of the public land from June 12, 1945, is very clear. The provision
"applies onlyto alienable and disposable lands of the public domain that is described in terms of the
character of the possession required since June 12, 1945," i.e., open, continuous, exclusive, and
notorious possession and occupation under a bona fide claim of acquisition.
In other words, I submit that the clear legislative intent is demonstrated by the direct, continuous and
seamless linking of the alienable and disposable lands of the public domain to June 12, 1945, under
the wording of the Decree - an intent which the Court must respect and uphold.
This position is obviously contrary to the position taken by the majority in Heirs of Mario Malabanan as
they declared that (and I quote again) "[g]enerally speaking, qualifying words restrict or modify only
the words or phrases to which they are immediately associated, and not those distantly or remotely
located. Ad proximum antecedents fiat relation nisi impediatur sentencia."
In simpler terms, the majority in Heirs of Mario Malabanan theorized that the June 12, 1945 cutoff
date is far removed from. the words "alienable and disposable" by the more proximate words "in
open, continuous, exclusive, and notorious possession and occupation" such that the latter is the only
condition qualified by the cutoff date. Thus, they hold the position that it is only the time of
possession, not the declaration of alienability, which must begin as of June 12, 1945, or earlier.
What the majority in Heirs of Mario Malabanan apparently failed to note and mention is that the rule -
that the antecedent bears relation to what follows next - applies only as long as it does not destroy
the meaning of the sentence.
For the reasons I explained above, I submit that the interpretation espoused in Heirs of Mario
Malabananthat all the law requires is possession from June 12, 1945, regardless of the declaration-of-
alienability date as long as the land has been classified as alienable at the time of application for
registration - in fact destroys the meaning of PD 1073 as it amends Section 48 (b) of the PLA.
PD 1073 reads in a continuous, uninterrupted flow from the classification of the land - as alienable
and disposable - to the character of the possession of this land (classified as alienable and
disposable) as open, continuous, exclusive and notorious possession and occupation by the applicant
himself or thru his predecessor-in-interest -that begins as of June 12, 1945.
In other words, the June 12, 1945 cutoff date modifies not only the more immediate words that it
follows, i.e., the open, continuous, etc. character of possession that I described above, but also the
classification of the land which must be alienable and disposable.
The use of June I2, I945 as cutoff date for

the declaration of alienability will not render
the grant of alienable lands out of reach as it
may still be obtained by other modes under
the PLA, i.e., free patents under Republic
Act No.6940, and homestead settlement
and sales under Section II of the PLA.
I reiterate, as well, that "the use of June 12, 1945, as cutoff date for the declaration of alienability will
not render the grant of alienable public lands out of reach."
Contrary to what the majority ominously portrayed in Heirs of Mario Malabanan, the acquisition of
ownership and title may, in fact, still be obtained by other modes under the PLA.
Among other laws, RA No. 694014 allows the issuance of free patents for lands not in excess of twelve
(12) hectares to any natural-born citizen of the Philippines who is not the owner of more than 12
hectares and who, for at least thirty (30) years prior to effectivity of the amendatory act, has
continuously occupied and cultivated, either by himself or through his predecessors-in-interest, a tract
or tracts of agricultural public lands subject to disposition.15 "RA No. 6940 was approved on March 28,
1990; thus, counting 30 years backwards, possession since April 1960 or thereabouts may qualifY a
possessor to apply for a free patent." Additionally, the administrative modes under Section 11 of the
PLA, particularly, homestead settlement and sales are available for acquisition of ownership and title.
The ponencia's interpretation of the June

12, 1945 reckoning period, as it echoes
Heirs of Mario Malabanan, goes beyond
the plain wording of Section 48 (b),
as amended by PD 1073
By following Heirs of Mario Malabanan, the ponencia effectively (and similarly) acts beyond the limits
of the constitutionally mandated separation of powers as it gives Section 48 (b), as amended by PD
1073, an interpretation beyond its plain wording. As I pointedly declared in my Malabanan Opinion,
"[e]ven this Court cannot read into the law an intent that is not there even [if the] purpose is to avoid
an absurd situation. If we feel that a law already has absurd effects because of the passage of time,
our role under the principle of separation of powers is not to give the law an interpretation that is not
there in order to avoid the perceived absurdity." 16 redarclaw
By unquestioningly adopting Heirs of Mario Malabanan, the ponencia effectively dips into the realm
of policy determination and policy formulation - a role which the Constitution specifically
delegated to the Legislature. If only for this reason, the Court should avoid expanding - through
Naguit, Heirs of Mario Malabanan, and the present ponencia- the plain meaning of Section 48(b) of the
PLA, as amended by PD 1073.
I maintain in this respect that that there is more to Republic v. Herbieto17 than the Naguit ruling that
the majority in Heirs of Mario Malabanan passed off as the established and definitive rule on
possession under Section 14 (1) PRD.
In sum, I vote to deny the petition, subject to the above objections on the reckoning period for the
classification, as alienable and disposable, of lands of the public domain.
Endnotes:
1
"Amending and Codifying the Laws Relative to Registration of Property and For Other Purposes,"
approved on June 11, 1978.
2
"The Public Land Act," approved on November 7, 1936.
3
"An Act to Amend Subsection (b) Of Section Forty-Eight of Commonwealth Act Numbered One
Hundred Forty-One, Otherwise Known as the Public Land Act," approved on June 22, 1957.
4
605 Phil. 244 (2009).
5
Id. at 300-326.
6
Id. at 244.
7
Id. at 268.
8
GR No. 144507, January 17, 2005, 442 SCRA 445.
9
Section 2 of Article XII reads in full:
LawlibraryofCRAlaw
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. The State may directly undertake such activities, or
it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well
as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes,
bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either technical of
financial assistance for large-scale exploration, development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the
State shall promote the development and use oflocal scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
10
605 Phil. 244, 315 (2009).
11
Id. at 315-316.
Sections 6 to 10 of CA No. 141 provides: LawlibraryofCRAlaw
SECTION 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 a like manner transfer such lands from one class to another, for the
purposes of their administration and disposition.
SECTION 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.
SECTION 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.
However, the President may, for reasons of public interest, declare lands of the public domain open to
disposition before the same have had their boundaries established or been surveyed, or may, for the
same reason, 'suspend their concession or disposition until they are again declared open to concession
or disposition by proclamation duly published or by Act of the National Assembly.
SECTION 9. For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes to which such
lands are destined, as follows: LawlibraryofCRAlaw
(a) Agricultural;
(b) Residential, commercial, industrial, or for similar productive purposes;
(c) Educational, charitable, or other similar purposes;
(d) Reservations for town sites and for public and quasi public uses.
The President, upon recommendation by the Secretary of Agriculture and Commerce, shaH from time
to time make the classifications provided for in this section, and may, at any time and in a similar
manner, transfer lands from one class to another.
SECTION 10. The words "alienation," "disposition," or "concession" as used in this Act,
shall mean any of the methods authorized by this Act for the acquisition, lease, use, or
benefit of the lands of the public domain other than timber or mineral lands.
12
605 Phil. 244, 316 (2009).
13
Id. at 317.
14
"An Act Granting A Period ending on December 31, 2000, for Filing Applications for Free Patent and
Judicial Confirmation of Imperfect Title to Alienable and Disposable Lands of the Public Domain under
Chapters VII and VIII of the Public Land Act, as amended," enacted on March 28, 1990.
15
Note also that under RA No. 6940, the Congress recently extended the period for filing applications
for judicial confirmation of imperfect and incomplete titles to alienable and disposable lands of the
public domain under RA No. 9176 from December 31, 2000 to December 31, 2020.
16
605 Phil. 244, 318 (2009).
17
GR No. 156117, May 26, 2005, 459 SCRA 183.
SECOND DIVISION
G.R. No. 177168, August 03, 2015
NAVY OFFICERS' VILLAGE ASSOCIATION, INC. (NOVAI), Petitioner, v. REPUBLIC OF THE

PHILIPPINES, Respondent.
DECISION
BRION, J.:
We resolve the present petition for review on certiorari1 assailing the December 28, 2006
decision2 and March 28, 2007 resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 85179.
The CA reversed and set aside the August 20, 2004 decision 4 of the Regional Trial Court (RTC) Branch
67, Pasig City, that dismissed the complaint filed by the Republic of the Philippines (respondent or the
Republic) for the cancellation of Transfer Certificate of Title (TCT) No. T-15387 issued in the name of
Navy Officers' Village Association, Inc. or NOVAI (petitioner).
The Factual Antecedents
TCT No. T-15387,5 issued in NOVAI's name, covers a 475,009 square-meter parcel of land (the
property)6 situated inside the former Fort Andres Bonifacio Military Reservation (FBMR) in Taguig,
Metro Manila.
The property previously formed part of a larger 15,812,684 square-meter parcel of land situated at
the former Fort William McKinley, Rizal, which was covered by TCT No. 61524 issued in the name of
the Republic of the Philippines.
On July 12, 1957, then President Carlos P. Garcia issued Proclamation No. 4237 "reserving for
military purposes certain parcels of the public domain situated in the municipalities of Pasig, Taguig,
Parañaque, province of Rizal, and Pasay City," which included the 15,812,684 square-meter parcel of
land covered by TCT No. 61524.
On September 29, 1965, then Pres. Diosdado Macapagal issued Proclamation No. 4618 which
excluded from Fort McKinley "a certain portion of land embraced therein, situated in the municipalities
of Taguig and Parañaque, Province of Rizal, and Pasay City," with an area of 2,455,310 square meters,
and declared the excluded area as "AFP Officers' Village" to be disposed of under the provisions of
Republic Act Nos. 2749 and 730.10 cralawrednad
Barely a month after, or on October 25, 1965, Pres. Macapagal issued Proclamation No.
47811"reserving for the veterans rehabilitation, medicare and training center site purposes" an area of
537,520 square meters of the land previously declared as AFP Officers' Village under Proclamation No.
461, and placed the reserved area under the administration of the Veterans Federation of the
Philippines (VFP).
The property is within the 537,520 square-meter parcel of land reserved in VFP's favor.
On November 15, 1991, the property was the subject of a Deed of Sale12between the
Republic of the Philippines, through former Land Management Bureau (LMB) Director Abelardo G.
Palad, Jr., (Dir. Palad) and petitioner NOVAI. The deed of sale was subsequently registered
and from which TCT No. T-15387 was issued in NOVAI's name.
The Republic's Complaint for Cancellation of Title
In its complaint13 filed with the RTC on December 23, 1993, the Republic sought to cancel NOVAFs title
based on the following grounds: (a) the land covered by NOVAFs title is part of a military reservation;
(b) the deed of sale conveying the property to NOVAI, which became the basis for the issuance of TCT
No. 15387, is fictitious; (c) the LMB has no records of any application made by NOVAI for the
purchase of the property, and of the NOVAFs alleged payment of P14,250,270.00 for the property;
and (d) the presidential proclamation, i.e., Proclamation No. 2487, claimed to have been issued by
then President Corazon C. Aquino in 1991 that authorized the transfer and titling of the property to
NOVAI, is fictitious.
NOVAI's Answer to the Complaint
In its answer (which was later amended) to the Republic's complaint, NOVAI counter-argued that the
property was no longer part of the public dominion, as the land had long been segregated from the
military reservation pursuant to Proclamation No. 461.
NOVAI claimed that, contrary to the Republic's contention that there were no records of the sale, it
had actually filed a letter-application for a sales patent over the property with the LMB which
prepared, verified and approved the property's plan and technical description; and that the LMB
delivered to it a copy of the deed of sale, signed and executed by Dir. Palad, after it had paid a portion
of the P14,250,270.00 purchase price, corresponding taxes, and other charges, with the balance to be
paid in installments.
Also, NOVAI contended that, since any alleged irregularities that may have attended the sale
pertained only to formalities, the proper remedy for the Republic was to file an action for reformation
of instrument, not for cancellation of title. In any event, it added that the Republic's cause of action
had prescribed because its title to the property had already become indefeasible.
The RTC's decision
The RTC narrowed down the issues to: (a) the character of the property in question, i.e., whether the
property in question was part of the FBMR, and hence, inalienable; and (b) the validity of the deed of
sale conveying the property to NOVAI, i.e., whether the title over the property was acquired by NOVAI
through fraud. The RTC resolved both issues in NOVAI's favor.
In its decision, the RTC ruled that: (a) the property is alienable and disposable in character, as the
land falls within the area segregated from the FBMR pursuant to Proclamation No. 461; (b) the subject
deed of sale should be presumed valid on its face, as it was executed with all the formalities of a
notarial certification; (c) notwithstanding the claims of forgery, the signature of Dir. Palad on the deed
of sale appeared genuine and authentic; and (d) NOVAI's title to the property had attained
indefeasibility since the Republic's action for cancellation of title was filed close to two (2) years from
the issuance of the title.
The CA's decision
The CA reversed and set aside the RTC's decision. It ruled that the property is inalienable land of
the public domain; thus, it cannot be disposed of or be the subject of a sale. It pointed out that, since
NOVAI failed to discharge its burden of proving the existence of Proclamation No. 2487 - the positive
governmental act that would have removed the property from the public domain — the property
remained reserved for veterans rehabilitation purposes under Proclamation No. 478, the latest
executive issuance affecting the property.
Since the property is inalienable, the CA held that the incontestability and indefeasibility generally
accorded to a Torrens title cannot apply because the property, as in this case, is unregistrable land;
that a title issued by reason or on account of any sale, alienation, or transfer of an inalienable
property is void and a patent nullity; and that, consequently, the Republic's action for the cancellation
of NOVAI's title cannot be barred by prescription.
Also, the CA held that there can be no presumption of regularity in the execution of the subject deed
of sale given the questionable circumstances that surrounded the alleged sale of the property to
NOVAI,14e.g., NOVAI's failure to go through the regular process in the Department of Environment and
Natural Resources (DENR) or the LMB Offices in the filing of an application for sales patent and in the
conduct of survey and investigation; the execution of the deed of sale without payment of the full
purchase price as required by policy; and the appearances of forgery and falsification of Dir. Palad's
signature on the deed of sale and on the receipts issued to NOVAI for its installment payments on the
property, among others.
Lastly, the CA held that the Court's observations and ruling in Republic of the Philippines v. Southside
Homeowners Association, Inc (Southside)15 is applicable to the present case. In Southside, the
Republic similarly sought the cancellation of title - TCT No. 15084 - issued in favor of Southside
Homeowners Association, Inc. (SHAI) over a 39.99 hectare area of land situated in what was known
as the Joint U.S. Military Assistance Group (JUSMAG) housing area in Fort Bonifacio. The Court
cancelled the certificate of title issued to SHAI, as the latter failed to prove that the JUSMAG area had
been withdrawn from the military reservation and had been declared open for disposition. The Court
therein ruled that, since the JUSMAG area was still part of the FBMR, its alleged sale to SHAI is
necessarily void and of no effect.
NOVAI sought reconsideration of the CA's decision, which the CA denied in its March 28, 2007
resolution;16 hence, this petition.
The Petition
NOVAI alleges that the CA erred in declaring that: (a) the property is inalienable land of the public
domain, (b) the deed of sale and Proclamation No. 2487 were void and nonexistent, respectively, (c)
the Republic's action for cancellation of title was not barred by prescription, and (d) the ruling
in Southsidewas applicable to the present case.
In support of its petition, NOVAI raises the following arguments:ChanRoblesvirtualLawlibrary
(a)The property is no longer part of the public domain because, by

virtue of Proclamation No. 461, s. of 1965, the property was
excluded from the FBMR and made available for disposition to
qualified persons, subject to the provisions of R.A. Nos. 274 and 720
in relation to the Public Land Act;
(b)The deed of sale was, in all respects, valid and enforceable, as it was
shown to have been officially executed by an authorized public officer
under the provisions of the Public Land Act, and celebrated with all
the formalities of a notarial certification;
(c) Proclamation No. 2487 is to be presumed valid until proven

otherwise; that the Republic carried the burden of proving that
Proclamation No. 2487 was a forgery, and that it failed to discharge
this burden;
(d)The CA should not have considered as evidence the testimony of

Senator Franklin Drilon on the nonexistence of Proclamation No. 2487
because such testimony was given by Senator Drilon in another
case17 and was not formally offered in evidence by the Republic
during the trial of the present case before the RTC;
(e)The action for cancellation of title filed by the Republic is already

barred by prescription because it was filed only on December 23,
1993, or close to two (2) years from the issuance of NOVAI's title on
January 9, 1992; and
(f) The case of Southside is not a cognate or companion case to the

present case because the two cases involve completely dissimilar
factual and doctrinal bases; thus, the Court's observations and ruling
in Southside should not be applied to the present case.
The Republic's Comment to the Petition
Procedurally, the Republic assails the propriety of the issues raised by NOVAI, such as "whether
Proclamation No. 2487 and the signature of LMB Director Palad on the assailed deed of sale are forged
or fictitious," and "whether the Republic had presented adequate evidence to establish the
spuriousness of the subject proclamation," which are factual in nature and not allowed in a Rule 45
petition.
On the petition's substance, the Republic counters that:ChanRoblesvirtualLawlibrary
(a)The property is inalienable public land incapable of private

appropriation because, while the property formed part of the area
segregated from the FBMR under Proclamation No. 461, it was
subsequently reserved for a specific public use or purpose under
Proclamation No. 478;
(b)Proclamation No. 2487, which purportedly revoked Proclamation No.

478, does not legally exist and thus cannot be presumed valid and
constitutional unless proven otherwise; the presumption of validity
and constitutionality of a law applies only where there is no dispute
as to the authenticity and due execution of the law in issue;
(c) The deed of sale executed by NOVAI and by Dir. Palad was
undeniably forged, as Dir. Palad categorically denied having signed
the deed of sale, and a handwriting expert from the National Bureau
of Investigation (NBI) confirmed that Dir. Palad's signature was
indeed a forgery;18
(d)NOVAI, a private corporation, is disqualified from purchasing the

property because R.A. Nos. 274 and 730, and the Public Land Act
only allow the sale of alienable and disposable public lands to natural
persons, not juridical persons; and
(e)The Court's decision in Southside applies to the present case because

of the strong factual and evidentiary relationship between the two
cases.
BCDA's Comment-in-Intervention
On December 28, 2007, and while the case was pending before this Court, the Bases Conversion
Development Authority (BCDA) filed a motion for leave to file comment-in-intervention and to admit
the attached comment-in-intervention.19 cralawrednad
In a resolution dated February 18, 2008,20 the Court allowed the BCDA's intervention.
As the Republic has done, the BCDA contends that NOVAI is disqualified from acquiring the property
given the constitutional and statutory provisions that prohibit the acquisition of lands of the public
domain by a corporation or association; that any sale of land in violation of the Constitution or of the
provisions of R.A. Nos. 274 and 730, and the Public Land Act are null and void; and that any title
which may have been issued by mistake or error on the part of a public official can be cancelled at any
time by the State.
The BCDA further contends that NOVAI miserably failed to comply with the legal requirements for the
release of the property from the military reservation. More specifically, (1) the Director of Lands did
not cause the property's subdivision, including the determination of the number of prospective
applicants and the area of each subdivision lot which should not exceed one thousand (1,000) square
meters for residential purposes; (2) the purchase price for the property was not fixed by the Director
of Lands as approved by the DENR Secretary; (3) NOVAI did not pay the purchase price or a portion of
it to the LMB; and (4) the Deed of Sale was not signed by the President of the Republic of the
Philippines or by the Executive Secretary, but was signed only by the LMB Director.
Also, the BCDA observed that NOVAI was incorporated only on December 11, 1991, while the deed of
sale was purportedly executed on November 15, 1991, which shows that NOVAI did not yet legally
exist at the time of the property's purported sale.
OUR RULING
We resolve to DENY NOVAI's petition for review on certiorari as we find no reversible

error committed by the CA in issuing its December 28, 2006 decision and March 28, 2007 resolution.
I. Procedural Objections
A. In the filing of the present petition before this Court
Under Section 1, Rule 45 of the Rules of Court, a party desiring to appeal from a judgment or final
order of the CA shall raise only questions of law which must be distinctly set forth.
A question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence on a certain state of facts.21 The issue does not call for an examination of the probative
value of the evidence presented, the truth or falsehood of the facts being admitted. 22 In contrast, a
question of fact exists when a doubt or difference arises as to the truth or falsehood of facts or when
the query invites the calibration of the whole evidence considering mainly the credibility of the
witnesses; the existence and relevancy of specific surrounding circumstances, as well as their relation
to each other and to the whole; and the probability of the situation. 23
cralawrednad
The rule that only questions of law may be the subject of a Rule 45 Petition before this Court,
however, has exceptions.24 Among these exceptions is when there is conflict between the factual
findings of the RTC and that of the CA.
In this case, the CA totally reversed the RTC on the nature and character of the land, in question, and
on the,validity of the deed of sale between the parties. Due to the conflicting findings of the RTC and
the CA on these issues, we are allowed to reexamine the facts and the parties' evidence in order to
finally resolve the present controversy.
B. On BCD A's Intervention
In its reply25 to the BCDA's comment-in-intervention, NOVAI primarily objects to the BCDA's
cralawred
intervention because it was made too late.
Intervention is a proceeding in a suit or action by which a third person is permitted by the court to
make himself a party, either joining the plaintiff or defendant, or demanding something adverse to
both of them.26 Its purpose is to enable such third party to protect or preserve a right or interest
which may be affected by the proceeding,27 such interest being actual, material, direct and immediate,
not simply contingent and expectant.28 cralawrednad
As a general rule, intervention cannot be made at the appeal stage. Section 2, Rule 19 of the Rules of
Court, governing interventions, provides that "the motion to intervene may be filed at any time before
rendition of judgment by the trial court." This rule notwithstanding, intervention may be allowed after
judgment where it is necessary to protect some interest which cannot otherwise be protected, and
may be allowed for the purpose of preserving the intervenor's right to appeal. 29 "The rule on
intervention, like all other rules of procedure, is intended to make the powers of the Court fully and
completely available for justice x x x and aimed to facilitate a comprehensive adjudication of rival
claims overriding technicalities on the timeliness of the filing thereof." 30
cralawrednad
Thus, in exceptional cases, the Court may allow intervention although the trial court has already
rendered judgment. In fact, the Court had allowed intervention in one case even when the petition for
review was already submitted for decision before it.31cralawrednad
In the present case, the BCDA is indisputably the agency specifically created under R.A. No. 7227 32 to
own, hold and/or administer military reservations including, among others, those located inside the
FBMR. If we are to affirm the CA's decision, the BCDA stands to benefit as a favorable ruling will
enable it to pursue its mandate under R.A. No. 7227. On the other hand, if we reverse the CA's
decision, it stands to suffer as the contrary ruling will greatly affect the BCDA's performance of its
legal mandate as it will lose the property without the opportunity to defend its right in court.
Indeed, the BCDA has such substantial and material interest both in the outcome of the case and in
the disputed property that a final adjudication cannot be made in its absence without affecting such
interest. Clearly, the BCDA's intervention is necessary; hence, we allow the BCDA's intervention
although made beyond the period prescribed under Section 2, Rule 19 of the Rules of Court.
II. Substantive Issues
A. The property is non-disposable land of the public domain reserved for public or quasi-
public use or purpose
We agree with the CA that the property remains a part of the public domain that could not have been
validly disposed of in NOVAI's favor. NOVAI failed to discharge its burden of proving that the property
was withdrawn from the intended public or quasi-public use or purpose.
While the parties disagree on the character and nature of the property at the time of the questioned
sale, they agree, however, that the property formed part of the FBMR - a military reservation
belonging to the public domain. We note that the FBMR has been the subject of several presidential
proclamations and statues issued subsequent to Proclamation No. 423, which either removed or
reserved for specific public or quasi-public use or purpose certain of its portions.
On the one hand, NOVAI argues that Proclamation No. 461 had already transferred the property from
the State's "public domain" to its "private domain." On the other hand, the respondents argue that
Proclamation No. 478, in relation with RA 7227 and EO No. 40, had reverted the property to the
inalienable property of the "public domain."
The classification and disposition of lands of the public domain are governed by Commonwealth Act
(C.A.) No. 141 or the Public Land Act, the country's primary law on the matter.
Under Section 6 of C.A. No. 141, the President of the Republic of the Philippines, upon the
recommendation of the Secretary of Agriculture and Natural Resources, may, from time to
time, classifylands of the public domain into alienable or disposable, timber and mineral lands,
and transfer these lands from one class to another for purposes of their administration and
disposition.
Under Section 7 of C.A. No. 141, the President may, from time to time, upon recommendation of the
Secretary of Agriculture and Natural Resources and for purposes of the administration and disposition
of alienable and disposable public lands, declare what lands are open to disposition or concession
under the Acts' provisions.33cralawrednad
Section 8 of C.A. No. 141 sets out the public lands open to disposition or concession and the
requirement that they have been officially delimited and classified, and when practicable, surveyed.
Section 8 excludes (by implication) from disposition or concession, public lands which have been
reserved for public or quasi-public uses; appropriated by the Government; or in any manner have
become private property, or those on which a private right authorized and recognized by the Act or
any other valid law may be claimed. Further, Section 8 authorizes the President to suspend the
concession or disposition of lands previously declared open to disposition, until again declared open to
disposition by his proclamation or by act of Congress.
Lands of the public domain classified as alienable and disposable are further classified, under Section 9
of C.A. No. 141, according to their use or purpose into: (1) agricultural; (2) residential, commercial,
industrial, or for similar productive purposes; (3) educational, charitable, or other similar purposes;
and (4) reservations for townsites and for public and quasi-public uses. Section 9 also authorizes the
President to make the classifications and, at any time, transfer lands from one class to another.
Section 83 of C.A. No. 141 defines public domain lands classified as reservations for public and
quasi-public uses as "any tract or tracts of land of the public domain" which the President, by
proclamation and upon recommendation of the Secretary of Agriculture and Natural Resources,
may designate "as reservations for the use of the Republic of the Philippines or any of its branches, or
of the inhabitants thereof or "for quasi-public uses or purposes when the public interest requires
it."34 Under Section 88 of the same Act, these "reserved tract or tracts of lands shall be non-
alienable and shall not be subject to occupation, entry, sale, lease or other disposition until
again declared alienable under the provisions of [CA No. 141] or by proclamation of the
President."35cralawrednad
As these provisions operate, the President may classify lands of the public domain as alienable and
disposable, mineral or timber land, and transfer such lands from one class to another at any time.
Within the class of alienable and disposable lands of the public domain, the President may further
classify public domain lands, according to the use or purpose to which they are destined, as
agricultural: residential, commercial, industrial, etc.; educational, charitable, etc.; and reservations for
townsites and for public and quasi-public uses; and, he may transfer such lands from one class to the
other at any time.
Thus, the President may, for example, transfer a certain parcel of land from its classification as
agricultural (under Section 9 [a]), to residential, commercial, industrial, or for similar purposes (under
Section 9 [b]) and declare it available for disposition under any of the modes of disposition of
alienable and disposable public lands available under C.A. No. 141, as amended.
The modes of disposition of alienable and disposable lands available under C.A. No. 141 include: (1)
by homestead settlement (Chapter IV), by sale (Chapter V), by lease (Chapter VI) and by
confirmation of imperfect or incomplete titles (Chapters VII and VIII) for agricultural lands under Title
II of C.A. No. 141 as amended; (2) by sale or by lease for residential, commercial, or industrial lands
under Title III of C.A. No. 141, as amended; (3) by donation, sale, lease, exchange or any other form
for educational and charitable lands under Title IV of C.A. No. 141, as amended; and (4) by sale by
public auction for townsite reservations under Chapter XI, Title V of C.A. No. 141, as amended.
Once these parcels of lands are actually acquired by private persons, either by sale, grant, or other
modes of disposition, they are removed from the mass of land of the public domain and become, by
operation of law, their private property.
With particular regard, however, to parcels of land classified as reservations for public and quasi-
public uses (under Section 9 [d]), when the President transfers them to the class of .alienable and
disposable public domain lands destined for residential, commercial, industrial, or for similar purposes
(under Section 9 [b]), or some other class under Section 9, these reserved public domain lands
become available for disposition under any of the available modes of disposition under C.A. No. 141,
as provided above. Once these re-classified lands (to residential purposes from reservation for public
and quasi-public uses) are actually acquired by private persons, they become private property.
In the meantime, however, and until the parcels of land are actually granted to, acquired, or
purchased by private persons, they remain lands of the public domain which the President, under
Section 9 of C.A. No. 141, may classify again as reservations for public and quasi-public uses. The
President may also, under Section 8 of C.A. No. 141, suspend their concession or disposition.
If these parcels of land are re-classified as reservations before they are actually acquired by private
persons, or if the President suspends their concession or disposition, they shall not be subject to
occupation, entry, sale, lease, or other disposition until again declared open for disposition by
proclamation of the President pursuant to Section 88 in relation with Section 8 of C.A. No. 141.
Thus, in a limited sense, parcels of land classified as reservations for public or quasi-public uses under
Section 9 (d) of C.A. No. 141 are still non-alienable and non-disposable, even though they are, by the
general classification under Section 6, alienable and disposable lands of the public domain. By specific
declaration under Section 88, in relation with Section 8, these lands classified as reservations are non-
alienable and non-disposable.
In short, parcels of land classified as reservations for public or quasi-public uses: (1) are non-alienable
and non-disposable in view of Section 88 (in relation with Section 8) of CA No. 141 specifically
declaring them as non-alienable and not subject to disposition; and (2) they remain public domain
lands until they are actually disposed of in favor of private persons.
Complementing and reinforcing this interpretation - that lands designated as reservations for public
and quasi-public uses are non-alienable and non-disposable and retain their character as land of the
public domain is the Civil Code with its provisions on Property that deal with lands in general. We find
these provisions significant to our discussion and interpretation as lands are property, whether they
are public lands or private lands.36cralawrednad
In this regard, Article 419 of the Civil Code classifies property as either of public dominion or of private
ownership. Article 42037 defines property of the public dominion as those which are intended for public
use or, while not intended for public use, belong to the State and are intended for some public service.
Article 421, on the other hand, defines patrimonial property as all other property of the State which is
not of the character stated in Article 420. While Article 422 states that public dominion property which
is no longer intended for public use or service shall form part of the State's patrimonial property.
Thus, from the perspective of the general Civil Code provisions on Property, lands which are intended
for public use or public service such as reservations for public or quasi-public uses are property of the
public dominion and remain to be so as long as they remain reserved.
As property of the public dominion, public lands reserved for public or quasi-public uses are outside
the commerce of man.38 They cannot be subject to sale, disposition or encumbrance; any sale,
disposition or encumbrance of such property of the public dominion is void for being contrary to law
and public policy.39cralawrednad
To be subject to sale, occupation or other disposition, lands of the public domain designated as
reservations must first be withdrawn, by act of Congress or by proclamation of the President, from the
public or quasi-public use for which it has been reserved or otherwise positively declared to have been
converted to patrimonial property, pursuant to Sections 8 and 88 of C.A. No. 141 and Article 422 of
the Civil Code.40 Without such express declaration or positive governmental act, the reserved public
domain lands remain to be public dominion property of the State. 41cralawrednad
To summarize our discussion:ChanRoblesvirtualLawlibrary
(1) Lands of the public domain classified as reservations for public or quasi-public uses are non-
alienable and shall not be subject to disposition, although they are, by the general classification under
Section 6 of C.A. No. 141, alienable and disposable lands of the public domain, until declared open for
disposition by proclamation of the President; and
(2) Lands of the public domain classified as reservations are property of the public dominion; they
remain to be property of the public dominion until withdrawn from the public or quasi-public use for
which they have been reserved, by act of Congress or by proclamation of the President, or otherwise
positively declared to have been converted to patrimonial property.
Based on these principles, we now examine the various issuances affecting the property in order to
determine the property's character and nature, i.e., whether the property remains public domain
property of the State or has become its private property.
For easier reference, we reiterate the various presidential proclamations and statutes affecting the
property:cralawlawlibrary
(1)Proclamation No. 423, series of 1957 - established the FBMR, a
military reservation; the property falls within the FBMR;
(2)Proclamation No. 461, series of (September) 1965 - segregated,

from the FBMR, a portion of Parcel 3, plan Psd-2031, which includes
the property, for disposition in favor of the AFPOVAI;
(3)Proclamation No. 478, series of (October) 1965 — reserved the

property in favor of the Veterans Rehabilitation and Medical Training
Center (VRMTC); and
(4)RA No. 7227 (1992), as implemented by EO No. 40, series of 1992 -

subject to certain specified exemptions, transferred the military
camps within Metro Manila, among others, to the BCDA.
1. Proclamation No. 461 was not the legal basis for the property's sale in favor of NOVAI
We agree with the respondents that while Proclamation No. 461, issued in September 1965, removed
from the FBMR a certain parcel of land that includes the property, Proclamation No. 478, issued in
October 1965, in turn segregated the property from the area made available for disposition under
Proclamation No. 461, and reserved it for the use of the VRMTC.
We find it clear that Proclamation No. 478 was issued after, not before, Proclamation No. 461. Hence,
while Proclamation No. 461 withdrew a certain area or parcel of land from the FBMR and made the
covered area available for disposition in favor of the AFPOVAI, Proclamation No. 478 subsequently
withdrew the property from the total disposable portion and reserved it for the use of the VRMTC.
With the issuance of Proclamation No. 478, the property was transferred back to that class of public
domain land reserved for public or quasi-public use or purpose which, consistent with Article 420 of
the Civil Code, is property of the public dominion, not patrimonial property of the State.
Even under the parties' deed of sale, Proclamation No. 2487, not Proclamation No. 461, was used as
the authority for the transfer and sale of the property to NOVAI. The subject deed of sale pertinently
reads:cralawlawlibrary
"This DEED OF SALE, made and executed in Manila, Philippines, by the Director of Lands, Pursuant to
Batas Pambansa Blg. 878 and in representation of the Republic of the Philippines, hereinafter referred
to as the Vendor, in favor of THE NAVY OFFICERS VILLAGE ASSOCIATION (NOVA) and residing in Fort
Bonifacio, Metro Manila, referred to as the Vendee, WITNESSETH: ChanRoblesvirtualLawlibrary
xxxx
WHEREAS, pursuant to Presidential proclamation No. 478 as amended by proclamation No.
2487 in relation to the provision of Act No. 3038 and similar Acts supplemented thereto, the Vendee
applied for the purchase of a portion of the above-described Property which portion is identical to Lot
3, Swo-000183 and more particularly described on page two hereof;
xxxx
WHEREAS, the Vendee has complied with all other conditions required by Act No. 3038 in relation to
Commonwealth Act No. 141, as amended, and the rules and regulation promulgated thereunder.
x x x x. (Emphasis supplied)
Clearly, the legal basis of the property's sale could not have been Proclamation No. 461.
2. Proclamation No. 2487 which purportedly revoked Proclamation No. 478 does not legally exist;
hence, it did not withdraw the property from the reservation or from the public dominion
Neither can Proclamation No. 2487 serve as legal basis for the property's sale in NOVAI's favor.
Proclamation No. 2487 purportedly revoked Proclamation No. 478 and declared the property open for
disposition in favor of NOVAI.
The Republic and the BCD A (now respondents) argue that Proclamation No. 2487 does not legally
exist; it could not have served to release the property from the mass of the non-alienable property of
the State.
Hence, even if NOVAI relies on Proclamation No. 2487 - on which it did not as it relied on Proclamation
No. 4.61 - the sale and NOVAI's title are still void. NOVAI, on the other hand, claims in defense that
Proclamation No. 2487 is presumed valid and constitutional, and the burden of proving otherwise rests
on the respondents.
In insisting on the presumptive validity of law, NOVAI obviously failed to grasp and appreciate the
thrust of the respondents' arguments, including the impact of the evidence which they presented to
support the question they raised regarding the authenticity of Proclamation No. 2487.
Rather than the validity or constitutionality of Proclamation No. 2487, what the respondents assailed
was its legal existence, not whether it was constitutional or not. Put differently, they claimed that
Proclamation No. 2487 was never issued by former Pres. Aquino; hence, the presumptive validity and
constitutionality of laws cannot apply.
Accordingly, after the respondents presented their evidence, it was NOVAI's turn to present its own
evidence sufficient to rebut that of the respondents. On this point, we find the Republic's evidence
sufficiently convincing to show that Proclamation No. 2487 does not legally exist. These pieces of
evidence include: ChanRoblesvirtualLawlibrary
First, the October 26, 1993 letter of the Solicitor General to the Office of the President inquiring about
the existence of Proclamation No. 2487.42 cralawrednad
Second, the November 12, 1993 letter-reply of the Office of the President informing the Solicitor
General that Proclamation No. 2487 "is not among the alleged documents on file with [its] Office." 43 cralawrednad
Third, the testimony of the Assistant Director of the Records Office in Malacañang confirming that
indeed, after verifying their records or of the different implementing agencies, "[t]here is no existing
document(s) in [their] possession regarding that alleged Proclamation No. 2487;" 44 and
Fourth and last, the October 11, 1993 Memorandum of then Department of Justice Secretary Frahklin
M. Drilon (DOJ Secretary Drilon) to the NBI to investigate, among others, the circumstances
surrounding the issuance of Proclamation No. 2487.45 Notably, this October 11, 1993 Memorandum of
DOJ Secretary Drilon stated that: "Proclamation No. 2487 is null and void x x x. [It] does not exist in
the official records of the Office of the President x x x [and] could riot have been issued by the former
President since the last Proclamation issued during her term was proclamation No. 932 dated 19 June
1992."46cralawrednad
In this regard, we quote with approval the CA's observations in its December 28, 2006 decision: cralawlawlibrary
Cast against this backdrop, it stands to reason enough that the defendant-appellee NOVAI was
inevitably duty bound to prove and establish the very existence, as well as the genuineness or
authenticity, of this Presidential Proclamation No. 2487. For certain inexplicable reasons, however, the
defendant-appellee did not do so, but opted to build up and erect its case upon Presidential
Proclamation No. 461.
To be sure, the existence of Presidential Proclamation No. 2487 could be easily proved, and
established, by its publication in the Official Gazette. But the defendant-appellee could not,
as it did not, submit or present any copy or issue of the Official Gazette mentioning or
referring to this Presidential Proclamation No. 2487, this even in the face of the Government's
determined and unrelenting claim that it does not exist at all. 47 (Emphasis supplied)
A final point, we did not fail to notice the all too obvious and significant difference between the
proclamation number of Proclamation No. 2487 and the numbers of the proclamations actually issued
by then President Corazon C. Aquino on or about that time.
We take judicial notice that on September 25, 1991 - the very day when Proclamation No. 2487 was
supposedly issued - former Pres. Aquino issued Proclamation No. 80048 and Proclamation No.
801.49Previously, on September 20, 1991, Pres. Aquino issued Proclamation No. 799; 50 and thereafter,
on September 27, 1991, she issued Proclamation No. 802.51 cralawrednad
Other proclamations issued around or close to September 25, 1991, included the following: cralawlawlibrary
1. Proclamation No. 750 issued on July 1, 1991;52 cralawrednad
2. Proclamation No. 760 issued on July 18, 1991;53 cralawrednad
3. Proclamation No. 770 issued on August 12, 1991;54 cralawrednad
4. Proclamation No. 780 issued on August 26, 1991;55 cralawrednad
5. Proclamation No. 790 issued on September 3, 1991;56 cralawrednad
11. Proclamation No. 806 issued on October 2, 1991;62 cralawrednad
14. Proclamation No. 834 issued on November 13, 1991;65 and
15. Proclamation No. 840 issued on November 26, 1991.66

This list shows that the proclamations issued by former Pres. Aquino followed a series or sequential
pattern with each succeeding issuance bearing a proclamation number one count higher than the
proclamation number of the preceding Presidential Proclamation. It also shows that on or about the
time Proclamation No. 2487 was purportedly issued, the proclamation numbers of the proclamations
issued by President Aquino did not go beyond the hundreds series.
It is highly implausible that Proclamation No. 2487 was issued on September 25, 1991, or on any day
close to September 25, 1991, when the proclamations issued for the same period were sequentially
numbered and bore three-digit proclamation numbers.
As Proclamation No. 2487 does not legally exist and therefore could not have validly revoked
Proclamation No. 478, we find, as the CA also correctly did, that Proclamation No. 478 stands as the
most recent manifestation of the State's intention to reserve the property anew for some public or
quasi-public use or purpose. Thus, consistent with Sections 88, in relation with Section 8, of C.A. No.
141 and Article 420 of the Civil Code, as discussed above, the property which was classified again as
reservation for public or quasi-public use or purpose is non-alienable and not subject to disposition; it
also remains property of the public dominion; hence, non-alienable and non-disposable land of the
public domain.
As a consequence, when R.A. No. 7227 took effect in 1992, the property subject of this case, which
does not fall among the areas specifically designated as exempt from the law's operation 67 was, by
legal fiat, transferred to the BCDA's authority.
B. As the property remains a reserved public domain land, its sale and the title issued
pursuant to the sale are void
As the property remains a reserved public domain land, it is outside the commerce of man. Property
which are intended for public or quasi- public use or for some public purpose are public dominion
property of the State68 and are outside the commerce of man. NOVAI, therefore, could not have
validly purchased the property in 1991.
We reiterate and emphasize that property which has been reserved for public or quasi-public use or
purpose are non-alienable and shall not be subject to sale or other disposition until again declared
alienable by law or by proclamation of the President.69 Any sale or disposition of property of the public
dominion is void for being contrary to law and public policy. 70 cralawrednad
Since the sale of the property, in this case, is void, the title issued to NOVAI is similarly void ab initio.
It is a well-settled doctrine that registration under the Torrens System does not, by itself, vest title as
it is not a mode of acquiring ownership;71 that registration under the Torrens System merely confirms
the registrant's already existing title.72 cralawrednad
Accordingly, the indefeasibility of a Torrens title does not apply in this case and does not attach to
NOVAI's title. The principle of indefeasibility does not apply when the sale of the property and the title
based thereon are null and void. Hence, the Republic's action to declare the nullity of NOVAI's void
title has not prescribed.
NOVAI insists that the deed of sale carries the presumption of regularity in the performance of official
duties as it bears all the earmarks of a valid deed of sale and is duly notarized.
While we agree that duly notarized deeds of sale carry the legal presumption of regularity in the
performance of official duties,73 the presumption of regularity in the performance of official duties, like
all other disputable legal presumptions, applies only in the absence of clear and convincing evidence
establishing the contrary.74cralawrednad
When, as in this case, the evidence on record shows not only that the property was reserved for public
use or purpose, and thus, non-disposable - a fact that on its own defeats all the evidence which the
petitioner may have had to support the validity of the sale - but also shows that the sale and the
circumstances leading to it are void in form and in substance, the disputable presumption of regularity
in the performance of official duties certainly cannot apply.
C. Even assuming that Proclamation No. 2487 legally exists, the sale of the property to
NOVAI is illegal.
1. Dir. Palad did not have the authority to sell and convey the property.
The subject deed of sale points to Proclamation No. 2487, purportedly amending Proclamation No.
478, in relation with Act No. 3038,75 as legal basis for authorizing the sale.
Section 176 of Act No. 3038 authorizes the sale or lease only: (i) of land of the private domain, not
land of the public domain; and (ii) by the Secretary of Agriculture and Natural Resources, not by the
LMB Director. Section 277 of the said Act, in fact, specifically exempts from its coverage "land
necessary for the public service." As the sale was executed by the LMB Director covering the property
that was reserved for the use of the VRMTC, it, therefore, clearly violated the provisions of Act No.
3038.
2. The area subject of the sale far exceeded the area that the Director of Lands is authorized to
convey.
Batas Pambansa (B.P.) Blg. 87878 which, per the Deed of Sale, purportedly authorized the Director of
Lands, representing the Republic, to sell the property in favor of NOVAI, limits the authority of the
Director of Lands to sign patents or certificates covering lands to ten (10) hectares.
In this case, the subject deed of sale covers a total area of 475,009 square meters or 47.5009
hectares. Obviously, the area covered by the deed of sale and which NOVAI purportedly purchased,
far exceeds the area that the Director of Lands is authorized to convey under B.P. Blg. 878.
3. The evidence on record and the highly suspect circumstances surrounding the sale fully supports
the conclusion that the property's sale to NOVAI is fictitious, thus, void.
We note the following irregularities that attended the sale of the property to NOVAI:
a. The absence, on file with the LMB, of any request for approval of any survey plan or of an
approved survey plan in NOVAI's name covering the property. 79 The approved survey plan
relating to Lot 3, SWO-13-000183 subject of NOVAI's TCT No. 15387 pertains to the AFPOVAI
under Proclamation No. 461;80 cralawrednad
b. The technical description, which the DENR prepared for the property as covered by TCT No. T-
15387, was issued upon NOVAI's request only for purposes of reference, not for registration
of title, and was based on the approved survey plan of the AFPOVAI; 81 cralawrednad
c. There is no record of any public land application filed by NOVAI with the LMB or with the
DENR Office for the purchase of the property or of any parcel of land in Metro Manila; 82 cralawrednad
d. LMB Dir. Palad categorically denied signing and executing the deed of sale; 83 cralawrednad
e. The findings of the NBI handwriting; expert, detailed in the Questioned Documents Report No.
815-1093 dated October 29, 1993,84 revealed that the, signature of LMB Director Palad as it
appeared on the Deed of Sale and his standard/sample signature as they appeared on the
submitted comparison documents "were not written by one and the same person," 85 and
concluded that "[t]he questioned signature of 'ABELARDG G. PALAD, JR.' xxx is a TRACED
FORGERY by carbon process;"86 and
f. Lastly, the LMB Cashier's Office did not receive the amount of P14,250,270.00 allegedly paid
by NOVAI as consideration for the property. The receipts87 - O.R. No. 8282851 dated
November 28, 1991, for P160,000.00 and O.R. No. 317024 dated December 23, 1992, for
P200,000.00 - which NOVAI presented as evidence of its alleged payment bore official receipt
numbers which were not among the series of official receipts issued by the National Printing
Office to the LMB, and in fact, were not among the series used by the LMB on the pertinent
dates.88
In sum, we find - based on the facts, the law, and jurisprudence - that the property, at the time of the
sale, was a reserved public domain land. Its sale, therefore, and the corresponding title issued in favor
of petitioner NOVAI, is void.
WHEREFORE, we hereby DENY the present petition for review on certiorari. No reversible error
attended the decision dated December 28, 2006, and the resolution dated March 28, 2007, of the
Court of Appeals in CA-G.R. CV No. 85179.
SO ORDERED. chanrobles virtuallawlibrary
Carpio, (Chairperson), Del Castillo, Mendoza, and Leonen, JJ., concur. ChanRoblesVirtualawlibrary
Endnotes:
Rollo, pp. 8-45.

1
2
Penned by Associate Justice Renato C. Dacudao and concurred in by Associate Justices Rosmari D.
Carandang and Estela M. Perlas-Bernabe (now a Member of this Court), id. at 47-88.
3
Id. at 90.
4
Civil Case No. 63983, penned by Judge Mariano M. Singzon, Jr., id. at 182-190.
5
Annex "B" of the Records, Vol. I, pp. 9-11.
6
Designated as Lot 3, SWO-13-000183; rollo, pp. 96-97.
7
Entitled "RESERVING FOR MILITARY PURPOSES CERTAIN PARCELS OF THE PUBLIC DOMAIN
SITUATED IN THE MUNICIPALITIES OF PASIG, TAGUIG, PARAÑAQUE, PROVINCE OF RIZAL AND
PASAY CITY."
8
Entitled "EXCLUDING FROM THE OPERATION OF PROCLAMATION NO. 423 DATED JULY 12, 1957,
WHICH ESTABLISHED THE MILITARY RESERVATION KNOWN AS FORT WILLIAM MCKINLEY (NOW
FORT ANDRES BONIFACIO) SITUATED IN THE MUNICIPALITIES OF PASIG TAGUIG AND PARAÑAQUE,
PROVINCE OF RIZAL, AND PASAY CITY, A CERTAIN PORTION OF LAND EMBRACED THEREIN,
SITUATED IN THE MUNICIPALITIES OF TAGUIG AND PARAÑAQUE, PROVINCE OF RIZAL, AND PASAY
CITY, ISLAND OF LUZON, AND DECLARING THE SAME AS AFP OFFICERS' VILLAGE TO BE DISPOSED
OF UNDER THE PROVISIONS OF REPUBLIC ACTS NOS. 274 AND 730."
9
Entitled "AN ACT AUTHORIZING THE DIRECTOR OF LANDS TO SUBDIVIDE THE LANDS WITHIN
MILITARY RESERVATIONS BELONGING TO THE REPUBLIC OF THE PHILIPPINES WHICH ARE NO
LONGER NEEDED FOR MILITARY PURPOSES, AND TO DISPOSE OF THE SAME BY SALE SUBJECT TO
CERTAIN CONDITIONS, AND FOR OTHER PURPOSES," Approved June 15, 1948.
10
Entitled "AN ACT TO PERMIT THE SALE WITHOUT PUBLIC AUCTION OF PUBLIC LANDS OF THE
REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL PURPOSES TO QUALIFIED APPLICANTS UNDER
CERTAIN CONDITIONS," Approved June 18, 1952.
11
Entitled "RESERVING FOR THE VETERANS REHABILITATION, MEDICARE AND TRAINING CENTER
SITE PURPOSES A CERTAIN PARCEL OF LAND OF THE PRIVATE DOMAIN SITUATED IN THE PROVINCE
OF RIZAL, ISLAND OF LUZON."
12
Records, Vol. IV, pp. 682-684.
13
Records, Vol. I, pp. 1-5.
14
See rollo, pp. 79-80, where the CA enumerated the following circumstances that cast strong doubt
on the validity of the property's sale in favour of NOVAI: (1) the lack of record with the LMB of
NOVAI's application for sales patent; (2) the survey return shows that the subdivision survey was
requested by NOVAI itself; and (3) the technical description presented by NOVAI was prepared by the
LMB for reference purposes only, and not for registration of title.
15
G.R. No. 156951, September 22, 2006, cited in rollo, pp. 80-86. The CA's December 28, 2006
decision stated the name of the respondent in G.R. No. 156951 as "SouthcomHomeowners
Association, Inc." We believe the name "Southcom" was a clear typographical error and what the CA
was obviously referring to was "Southside" for other than the word "Southcom," the quoted portion of
the ruling, the GR No. and the date all pertains to the case entitled "Republic of the Philippines
v. Southside Homeowners Association, Inc. and the Register of Deeds, et al."
Supra note 3.
16
People v. Eduardo Domingo, et al., Criminal Case No 98-164382; TSN. November 17, 2003; CA rollo,
17
pp. 172-201.
18
Records, Vol. II, pp. 433-436.
Rollo, pp. 660-671. Comment-in-intervention, id. at 672-725.

19
20
Id., insert between pp. 746 and 747.
21
See Altres, et al. v. Empleo, et al., 594 Phil. 246, 263 (2008).
22
Id.
23
See Altres, et al. v. Empleo, et al., supra note 21, at 263; Republic v. Medida, GR No. 195097,
August 13, 2012, 678 SCRA317, 323-324.
24
In Development Bank of the Philippines v. Traders Royal Bank, G.R. No. 171982, August 18, 2010,
628 SCRA 404, the Court held: cralawlawlibrary
"The jurisdiction of the Court in cases brought before it from the appellate court is limited to reviewing
errors of law, and findings of fact of the Court of Appeals are conclusive upon the Court since it is not
the Court's function to analyze and weigh the evidence all over again. Nevertheless, in several cases,
the Court enumerated the exceptions to the rule that factual findings of the Court of Appeals are
binding on the Court: (1) when the findings are grounded entirely on speculations, surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when
there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals wsiit
beyond the issues of the case, or its findings are contrary to the admissions of bofy the appellant and
the appellee; (7) when the findings are contrary to that of the trial court; (8) when the findings
are conclusions without citation of specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or (11) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties, which, if properly considered, would justify a
different conclusion." (Emphasis supplied)
25
cralawred Rollo, pp. 783-807.
26
See GSIS v. Court of Appeals, 251 Phil. 222, 234 (1989).
27
See First Philippine Holdings Corporation v. Sandiganbayan, et al., 323 Phil. 36, 47 (1996).
28
See Garcia, et al. v. David, et al., 67 Phil. 279, 282 (1939); and Tahanan Development Corp. v. CA,
et al., 203 Phil. 652, 688-691 (1982).
29
See Pinlac v. Court of Appeals, 457 Phil. 527, 534 (2003).
30
Id.
31
See Pinlac v. Court of Appeals, supra note 29, at 534-535 (2003), citing Director of Lands v. Court
of Appeals, 181 Phil. 432 (1979).
32
Entitled "AN ACT ACCELERATING THE CONVERSION OF MILITARY RESERVATIONS INTO OTHER
PRODUCTIVE USES, CREATING THE BASES CONVERSION AND DEVELOPMENT AUTHORITY FOR THIS
PURPOSE, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES" or otherwise known as the
"BASES CONVERSION AND DEVELOPMENT ACT OF 1992;" approved on March 13, 1992.
33
See Section 7 of Commonwealth Act No. 141.
34
Section 83, C.A. No. 141 reads in full: ChanRoblesvirtualLawlibrary
SECTION 83. Upon the recommendation of the Secretary of Agriculture and Natural Resources,
the President may designate by proclamation any tract or tracts of land of the public domain
as reservations for the use of the Republic of the Philippines or of any of its branches, or of
the inhabitants thereof, in accordance with regulations prescribed for this purposes, or for
quasi-public uses or purposes when the public interest requires it, including reservations for
highways, rights of way for railroads, hydraulic power sites, irrigation systems, communal pastures or
lequas comnnunales, public parks, public quarries, public fishponds, working men's village and other
improvements for the public benefit, (Emphasis supplied)
35
Section 88, C.A. No. 141 provides in full: ChanRoblesvirtualLawlibrary
SECTION 88. The tract or tracts of land reserved under the provisions of Section eighty-three shall be
non-alienable and shall not be subject to occupation, entry, sale, lease, or other disposition until
again declared alienable under the provisions of this Act or by proclamation of the President,
(Emphasis supplied)
36
See J. Brion Dissent in Heirs of Mario Malabanan v. Rep. of the Philippines, 605 Phil. 244 (2009).
37
Article 420 of the Civil Code reads in full: cralawlawlibrary
Art. 420. The following things are the property of public dominion: ChanRoblesvirtualLawlibrary
(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, (Emphasis supplied)
38
See Manila International Airport Authority v. Court of Appeals, 528 Phil. 181, 218-221 (2006).
39
Id. at at 219.
40
Id. at 219-220.
41
Id. at 220-221.
42
The October 26, 1999 letter of then Solicitor General Raul I. Goco to Director Aurora T. Aquino of
the Office of the President inquiring about the existence of Proclamation No. 2487, records, Vol. II, pp.
205-206. It pertinently reads: cralawlawlibrary
"Dear Director Aquino,

The President, in Memorandum Order No. 173, directed the Solicitor General, in coordination with the
Administrator of the Land Authority, to file an action for the cancellation of x x x (ii) TCT No. 15387 in
the name of Navy Officers Village Association, covering Lot 3, SWO-13-0Q0183 with an area of
47.5009 hectares, otherwise known as the NOVA area.
Also, please furnish us with a copy of Proclamation No. 2487 which purportedly excluded from
Proclamation No. 478 {reservation for the Veterans Rehabilitation, Medicare and Training Center} that
portion known as NOVA area for disposition."
43
The November 12, 1993 reply-letter of Director Aurora T. Aquino to Solicitor General Drilon,
records, Vol. II, pp. 208-206. It reads in part:
cralawlawlibrary
"This has reference to your letter dated October 20, 1993 x x x
It is further informed that the alleged Proclamation No. 2487 excluding from the Proclamation No. 478
dated October 25, 1965, {reservation for the Veterans Rehabilitation, Medicare and Training Center
site purposes} the NOVA AREA for disposition, is not among the signed documents on file with this
Office x x x."
44
Testimony of Marianito Dimaandal, Assistant Director of the Records Office of Malacañang, records,
Vol. II, pp. 208-211.
45
Records, Vol. II, pp. 361-364.
46
Id. at 364.
Rollo, unnumbered page between pp. 74 and 75.

47
48
"DECLARING FRIDAY, SEPTEMBER 27, 1991, AS A SPECIAL DAY IN THE PROVENCE OF BATANGAS
AND THE CITIES OF BATANGAS AND LIPA;" www.gov.ph/1991/09/25/proclamation-no-800-S-
1991/ (last accessed May 22, 2015).
49
"RESERVING FOR SCHOOL SITE PURPOSES A CERTAIN PARCEL OF LAND OF THE PUBLIC DOMAIN
SITUATED IN RAKANOAY MADAUM, MUNICIPALITY OF TAGUM, PROVINCE OF DAVAO DEL NORTH
ISLAND OF MINDANAO www.gov.ph/1991/09/25/proclamation-no-801-s-1991/ (last accessed May 23,
2015).
"DECLARING THE PERIOD FROM NOVEMBER 3 TO 9, 1991 AS 'CIVIL ENGINEERING

50
WEEK;" www.gov.ph/1991/09/20/proclamation-no-799-s-1991/ (last accessed May 23, 2015).
51
"REVOKING PROCLAMATION NO. 207, SERIES OF 1950, WHICH RESERVED FOR RESIDENCIA SITE
PURPOSES A CERTAIN PARCEL OF LAND SITUATED IN THE MUNICIPALITY OF SANTIAGO, ISABELA,
ISLAND OF LUZON, AND RESERVING THE LOT EMBRACED THEREIN FOR MARKET EXPANSION AND
OTHER COMMERCIAL SITE PURPOSES OF THE MUNICIPALITY OF SANTIAGO,
ISABELA;" www.gov.ph/1991 /09/27/proclamation-no-802-s-1991/ (last accessed May 23, 2015).
"DECLARING THE MONTH OF JULY, 1991 AND EVERY YEAR THEREAFTER, AS 'KABISIG HOUSING
52
MONTH;" www.gov.ph/1991/07/01/proclamation-no-750-s-1991/ (last accessed May 22, 2015).
53
"DECLARING MONDAY, JULY 22, 1991 A DAY OF ECUMENICAL PRAYER FOR NATIONAL UNITY AND A
NON-WORKING DAY IN METRO MANILA;" www.gov.ph/1991/07/18/proclamation-no-760-s-
1991/ (last accessed May 22, 2015).
"DECLARING SEPTEMBER 1991 AS 'WORLD QUIZ BEE

54
55
"DECLARING FRIDAY, SEPTEMBER 6, 1991, AS A 'SPECIAL DAY' IN THE PROVINCE OF
BUKIDNON;" www.gov.ph/1991/07/01/proclamation-no-750-s-1991/ (last accessed May 22, 2015).
56
"AMENDING PROCLAMATION NO. 770 DATED AUGUST 12, 1991 TO DECLARE NOVEMBER 1991 AS
'WORLD QUIZ BEE MONTH', INSTEAD OF SEPTEMBER 1991;" www.gov.ph/1991 /09/03/proclamation-
no-790-s-1991/ (last accessed May 22, 2015).
57
"CONVERTING A PORTION OF THE PRISON SITE OF THE NEW BILIBID PRISON TO PATRIMONIAL
PROPERTY OF THE GOVERNMENT AND DECLARING THE SAME OPEN TO DISPOSITION AS THE SITE OF
THE DEPARTMENT OF JUSTICE HOUSING PROJECT IN ACCORDANCE WITH THE PROVISIONS OF ACT
NUMBERED THREE THOUSAND AND THIRTY-EIGHT;" http://www.gov.ph/1991/09/05/proclamation-
no-792-s-1991/ (last accessed May 23, 2015).
58
"DECLARING SATURDAY, OCTOBER 12, 1991, AS A SPECIAL DAY IN ZAMBOANGA
CITY;" www.gov.ph/1991/09/11/proclamation-no-797-s-1991/ (last accessed May 23, 2015)
"DECLARING THE MONTH OF OCTOBER OF EVERY YEAR AS MUSEUMS AND GALLERIES

59
60
"RESERVING FOR SCHOOL SITE PURPOSES OF THE KORONADAL CENTRAL ELEMENTARY SCHOOL A
CERTAIN PARCEL OF LAND OF THE PUBLIC DOMAIN SITUATED IN THE POBLACION, MUNICIPALITY OF
KORONADAL, PROVINCE OF SOUTH COTABATO, ISLAND OF
MINDANAO;" www.gov.ph/1991/09/30/proclamation-no-804-s-1991/ (last accessed May 23, 2015).
61
"FURTHER EXTENDING THE NATIONAL MEMBERSHIP, EDUCATIONAL AND FUND CAMPAIGN PERIOD
OF THE PHILIPPINE MENTAL HEALTH ASSOCIATION UP TO SEPTEMBER 30,
1992;" www.gov.ph/1991/09/30/proclamation-no-805-s-1991/ (last accessed May 23, 2015).
62
"AUTHORIZING THE FEDERATION OF SENIOR CITIZENS ASSOCIATION OF THE PHILIPPINES, INC.
TO CONDUCT A NATIONAL FUND CAMPAIGN FOR A PERIOD OF ONE
YEAR;" www.gov.ph/1991/10/02/proclamation-no-806-s-1991/ (last accessed May 23, 2015).
63
"RESERVING FOR ZAMBOANGA CITY GOVERNMENT CENTER SITE PURPOSES A CERTAIN PARCEL OF
LAND OF THE PUBLIC DOMAIN SITUATED IN THE POBLACION, CITY OF ZAMBOANGA, ISLAND OF
MINDANAO" www.gov.ph/1991/10/07/proclamation-no-810-s-1991/ (last accessed May 22, 2015).
64
"ESTABLISHING AS KABANKALAN WATERSHED FOREST RESERVE FOR PURPOSES OF PROTECTING,
MAINTAINING OR IMPROVING ITS WATER YIELD AND PROVIDING RESTRAINED MECHANISM FOR
INAPPROPRIATE FOREST EXPLOITATION AND DISRUPTIVE LAND-USE A PARCEL OF LAND OF THE
PUBLIC DOMAIN LOCATED IN THE MUNICIPALITY OF KABANKALAN, PROVINCE OF NEGROS
OCCIDENTAL, ISLAND OF NEGROS, PHILIPPINES" www.gov.ph/1991 /10/25/proclamation-no-820-s-
1991/ (last accessed May 22, 2015)
65
"ESTABLISHING AS CABADBARAN RIVER WATERSHED FOREST RESERVE FOR PURPOSES OF
PROTECTING, MAINTAINING AND IMPROVING ITS WATER YIELD AND TO PROVIDE RESTRAINING
MECHANISM FOR INAPPROPRIATE FOREST EXPLOITATION AND DISRUPTIVE LAND-USE, A CERTAIN
PARCEL OF LAND OF THE PUBLIC DOMAIN SITUATED IN THE MUNICIPALITIES OF CABADBARAN AND
SANTIAGO, PROVINCE OF AGUSAN DEL NORTE, ISLAND OF MINDANAO,
PHILIPPINES" www.gov.ph/1991/11/13/proclamation-no-834-s-1991/ (last accessed May 22, 2015).
66
"RESERVING FOR PROVINCIAL GOVERNMENT CENTER SITE PURPOSES A CERTAIN PARCEL OF LAND
OF THE PUBLIC DOMAIN SITUATED IN THE BARANGAY OF BULANAO, MUNICIPALITY OF TABUK,
PROVINCE OF KALINGA-APAYAO, ISLAND OF LUZON" www.gov.ph/1991/11 /26/proclamation-no-840-
s-1991/ (last accessed May 22, 2015).
67
The areas specifically exempted from sale, as enumerated under Section 8 of RA 7227, are: cralawlawlibrary
(a) Approximately 148.80 hectares in Fort Bonifacio for the National Capital Region (NCR) Security
Brigade, Philippine Army (PA) officers' housing area, and Philippine National Police (PNP) jails and
support services (presently Camp Bagong Diwa);
(b) Approximately 99.91 hectares in Villamore Air Base for the Presidential Airlift Wing, one squadron
of helicopters for the NCR and respective security units;
(c) The following areas segregated by Proclamation Nos.: cralawlawlibrary
(1) 461, series of 1965; (AFP Officers Village)
(2) 462, series of 1965; (AFP Enlisted Men's Village)
(3) 192, series of 1967; (Veterans Center)
(4) 208, series of 1967; (National Shrines)
(5) 469, series of 1969; (Philippine College of Commerce)
(6) 653, series of 1970; (National Manpower and Youth Council)
(7) 684, series of 1970; (University Center)
(8) 1041, series of 1972; (Open Lease Concession)
(9) 1160, series of 1973; (Manila Technical Institute)
(10) 1217, series of 1970; (Maharlika Village)
(11) 682, series of 1970; (Civil Aviation Purposes)
(13) 1453, series of 1975; (National Police Commission)
(14) 1633, series of 1977; (Housing and Urban Development)
(15) 2219, series of 1982; (Ministry of Human Settlements, BLISS)
(16) 172, series of 1987; (Upper, Lower and Western Bicutan and Signal Housing)
(17) 389, series of 1989; (National Mapping and Resource Information Authority)
(18) 518, series of 1990; (CEMBO, SO CEMBO, W REMBO, E REMBO, COMEMBO, PEMBO, PITOGO)
(19) 467, series of 1968; (General Manila Terminal Food Market Site)
(20) 347, series of 1968; (Greater Manila Food Market Site)
(21) 376, series of 1968; (National Development Board and Science Community)
(d) A proposal of 15 hectares as relocation site for families to be affected by circumferential road 5
and radial road 4 construction; Provided, further, That the boundaries and technical description of
these crumpet areas shall be determined by an actual group survey.
68
See Article 420 of the Civil Code.
69
See Section 88, C.A. No. 141.

70
71
See Lorzano v. Tabayag, Jr., G.R. No. 189647, February 6, 2012, 665 SCRA 38, 51, citing Republic
v. Heirs of Felipe Alejaga, Sr., 441 Phil. 656 (2002).
72
Id. at 51. See also Torbela v. Rosario, G.R. No. 140553, December 7, 2011, 661 SCRA 633, 659.
73
See Section 3 (k), Rule 131 of the Rules of Court.
74
See Section 3, Rule 131 of the Rules of Court. See also Delfin v. Billones, 519 Phil. 720, 732 (2006).
75
Approved on March 9, 1922, entitled "An Act Authorizing the Secretary of Agriculture and Natural
Resources to Sell or Lease Land of the Private Domain of the Government of the Philippine Islands."
76
"Section 1. The Secretary of Agriculture and Natural Resources is hereby authorized to sell or lease
land of the private domain of the Government of the Philippines Islands, or any part thereof, to such
persons, corporations or associations as are, under the provisions of Act Numbered Twenty-eight
hundred and seventy-four, known as the Public Land Act, entitled to apply for the purchase or lease of
agricultural public land."
77
"Sec. 2. The sale or lease of the land referred to in the preceding section shall, if such land is
agricultural, be made in the manner and subject to the limitations prescribed in chapters five and six,
respectively, of said Public Land Act, and if it be classified differently in conformity with the provisions
of chapter nine of said Act: Provided, however, That the land necessary for the public service shall be
exempt from the provision of this Act."
78
Entitled "AN ACT FURTHER AMENDING SECTION ONE HUNDRED SEVEN OF COMMONWEALTH ACT
NUMBER ONE HUNDRED FORTY-ONE, OTHERWISE KNOWN AS THE PUBLIC LAND ACT, AS AMENDED."
It was enacted on July 9, 1985.
79
See testimony of Ernesto Erive, then Chief of Surveys Division of the National Capital Region,
Department of Environment and Natural Resources (DENR-NCR), TSN, September 16, 1996, pp. 18-
25.
80
See testimony of Ernesto Erive, then Chief of Surveys Division, DENR-NCR, TSN, pp. April 22, 1996,
pp. 2-24.
81
See testimony of Ernesto Erive, then Chief of Surveys Division, DENR-NCR, TSN, August 26, 1996,
pp. 2-3.
82
Certification of Jose Mariano, Chief of the LMB Records Management Division, dated September 24,
1993, records, Vol. II, p. 347.
See also TSN of the testimonies of Armando B. Bangayan, then Chief of the LMB Records Management
Division, January 10, 1996; Jose Parayno, Records Officer I of the DENR-NCR South CENRO,
September 16, 1996, pp. 3-7; and of Ernesto Erive, Chief of Surveys Division, DENR-NCR, July 13,
1996, pp. 3-10.
83
See October 4, 1993 letter of LMB Director Palad to Captain Nilo Rosario Villarta, Office of the Naval
Judge Advocate, records, Vol. II, pp. 343-344; and TSN, February 12, 1997.
84
Submitted by Eliodoro M. Constantino NBI Document Examiner III, Records, Vol. II, pp. 433- 436.
See also TSNs dated July 25, 1997 and December 2, 1997 where NBI Document Examiner Constantino
confirmed his findings in the October 29, 1993 Questioned Documents Report.
85
Records, Vol. II, p. 436.
86
Id.
87
Records, Vol. I, p. 163.
88
See November 22, 1994 Certification issued by the LMB Cash Section, signed by Cash Section OIC
Lilibeth Sloan, records, Vo. II, p. 348.
LMB Cashier Lilibeth Sloan testified that the official receipts which the LMB used on November 28,
1991, started from No. 4195501 S up to 4195550 S; while those which it used on December 23,
1992, started with 4195699 S up to 4195709 S, TSN, September 3, 2002, pp. 7-9.
SECOND DIVISION
G.R. No. 210341 July 1, 2015

vs.
JOSEFINO O. ALORA and OSCAR O. ALORA, Respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review under Rule 45 of the Rules of Court assailing the 5
December 2013 Decision of the Court of Appeals (CA) in CA-G.R.CV No. 99280, which
1
denied the appeal of the Republic of the Philippines (petitioner) and affirmed the 3 July 2012
Resolution of the Regional Trial Court, Branch 31 of San Pedro, Laguna (RTC) in LRC Case
No.SPL-0697-10.
The Facts
On 6 May 1969, spouses Pedro and Rafaela Alora sold a parcel of land with an area of 12, 710
square meters, located in Barangay San Vicente, San Pedro, Laguna to their sons Josefino 0.
Alora and Oscar 0. Alora (respondents) for ₱5,000.00. This parcel of land is more particularly
2
described under Plan Psu-119876, and covered by Tax Declaration No. 24-0017-00507. The 3
parties to the sale executed a Deed of Conveyance dated 8 May 1969.
On 6 June 2010, respondents filed a verified application for registration of title before the RTC,
which was docketed as LRC Case No. SPL-0697-10. Oscar, who was in the United States,
authorized his brother Josefino to represent him in the proceedings, under a Special Power of
Attorney dated 26 November 2010.
In the application, respondents claimed that they purchased the parcel of land, and that they
had no knowledge of any mortgage or encumbrance or any person having any interest over
the same property. they further claimed that they had been planting crops on the parcel of
4
land from 1969 to 2010.
The approved plan showed six lots which respondents in tended to develop as a commercial
property.5
The respondents further claimed that they paid all taxes on the property and registered the
Deed of Conveyance with the Registry of Deeds and Assessor’s Office, and had traced back
the tax declarations of their predecessors-in-interest from 1935. The parcel of land originally
belonged to Colegio de San Jose, Inc., and was transferred to Pedro Salandanan.
Subsequently, Salandanan conveyed the property to Pedro Alora, respondents’ father.
In order to prove that the parcel of land was disposable and alienable, respondents submitted
the following as evidence:
1. Certification dated 17 May 2010 issued by Jovito Oandasan, Chief of Forest

Management Service of the Community Environment and Natural Resources Office
(CENRO) of the Department of Environment and Natural Resources (DENR) which
stated that the parcel of land is part of "Alienable and Disposable (A & D) land under
Project No. 10-A, per BFD Land Classification Map No. 3004 certified and declared as
such on September 28, 1981."; 6
2. Land certification mark 304 consisting of sheets 1 and 2 from the National Mapping
Resource Information Authority (NAMRIA) which bears a certification that the areas set
aside are alienable and disposable for cropland and fishpond development under
Forestry Administrative Order No. 4-1627 dated 28 September 1981; 7
3. Certified copy of the polyester film copy (SEPIA) of approved Plan Psu-119876
dated 20 April 1949; 8
4. Certified technical description of Plan Psu-119876; and

9
5. Certification in lieu of Geode tic Engineer’s Certificate for Registration Purposes. 10
Respondents were also able to present the following documents:
1. Certified photocopies of Tax Declaration Nos.1794, 2206 (dated 28 December 1950),

2352 (dated 22 January 1952) and 2381 (dated 28 January 1952) issued to Colegio de
San Jose, Inc.;
2. Affidavit of Transfer of Real Property executed by Colegio de San Jose, Inc. in favor
of Pedro Salandanan and N.V. Sinclair;
3. Certified photocopy of Tax Declaration No. 2466 issued to Pedro Salandanan on 17

December 1952;
4. Certified copy of the Deed of Absolute Sale executed by Pedro Salandanan in favor
of Pedro Alora dated 22 September 1953;
5. Certified photocopy of Tax Declaration No. 2946 issued to Pedro Alora on 21

December 1964;
6. Official Receipt No. 3820443 dated 18 March 2010;
7. Copy of the Deed of Conveyance dated 8 May 1969 executed by Pedro Alora in
favor of respondents;
8. Certified photocopy of Tax Declaration No. 8707 issued to respondents in 1985;
9. Official Receipt No. 8594515 dated 14 September 2010;
10. Duplicate original copy of Tax Declaration No. 017-0592 issued to respondents in
2000;
11. Certified photocopy of Tax Declaration No. 0017-000507 issued to respondents in

2006; and
12. Official Receipt No. 9454614 dated 9 February 2010. 11
The following persons also testified to support respondents’ claim:
1. Jovito Oandasan, Chief of Forest Management Service of CENRO;
2. Rodolfo Gonzales, Special Investigator I of the DENR, Provincial Environment and

Natural Resources Office (PENRO), Los Baños, Laguna;
3. Engineer Marlon Climaco, a licensed Geodetic Engineer;
4. Rolando Rosal, one of re spondents’ helpers; and
5. Respondent Josefino Alora. 12
Oandasan testified that as chief of CENRO, his professional duties included issuing
certifications as to th e status of lands. He also claimed that the subject parcel of land is
alienable and disposable under BFD Land Classification No. P004 released on 28 September
1981, and that he was able to secure a land certification mark 304 from the NAMRIA which
bears a certification stating that the areas set aside are alienable and disposable for cropland
and fishpond development under Forestry Administrative Order No. 4-1627 also dated 28
September 1981. 13
Gonzales testified that he was tasked with investigating public land applications. He conducted
an ocular inspection of the property as well as examined documentary evidence relating to
respondents’ application. Gonzales’ report stated that the property is "not within a previously
patented title or any public land application or administrative title."14
Petitioner, through Assistant Provincial Prosecutor Jose De Leon, Jr., did not present any
evidence to oppose the application. 15
The Ruling of the RTC
The RTC ruled in favor of the respondents. The dispositive portion of the Resolution dated 3
July 2012 reads:
WHEREFORE, and upon previous confirmation of the Order of General Default, the Court
hereby adjudicates an d decrees a parcel of land (subdivided into Lots 1 to 6), as shown on
Plan Psu-119876 situated in Barangay San Vicente, San Pedro, Laguna containing an area of
12,710 square meters in favor of and in the names of Josefino O. Alora and Oscar O. Alora.
SO ORDERED. 16
The RTC stated that under the Regalian Doctrine, all lands of the public domain belong to the
State. Thus, the applicant bears the burden of proving "through incontrovertible evidence that
the land sought to be registered is alienable and disposable based on a positive act of the
government." 17
The RTC also cited Sections 14 and 48 of Presidential Decree (P.D.) No. 1529 which provide
that an application for land registration must fulfill three requisites:
(1) The land is alienable public land;
(2) The applicant has been in open, continuous, exclusive, and notorious possession
and occupation of the land since 12 June 1945 or earlier; and
(3) the applicant’s possession must be under a bona fide claim of ownership. 18
The RTC held that while Republic v. T.A.N. Properties, Inc . clearly stated that "the applicant
19
for land registration must present a copy of the original classification approved by the DENR
Secretary and certified as true copy by the legal custodian of the official records," the
applicable doctrine is that in Republic v. Serrano :
20
x x x However, in the case of Republic v. Serrano , which is [on] all fours with this case, the
Court he ld that a DENR Regional Technical Director’s certification, which is annotated on the
subdivision plan submitted in evidence, constitutes substantial compliance with the legal
requirements. Applying the said precedent, this Court finds that a DENR Regional Technical
Director’s Certification annotated on the subdivision plan and attested to by the CENRO and
DENR official representatives declaring under oath that the property subject of this application
is within the areas set aside as alienable and disposable for cropland and fishpond
development under Forestry Administrative Order No. 4-1627 dated 28 September 1981
constitutes sufficient compliance with the above-stated requirements. 21
The RTC also held that the applicants had satisfactorily shown that they and their
predecessors-in-interest had been in open, continuous, exclusive, adverse, and notorious pos
session of the property under a bona fide claim of ownership for the period required by the
Property Registration Decree. 22
Thus, petitioner, represented by the Office of the Solicitor General, filed an appeal before the
CA.
Petitioner argued that the RTC erred in applying the doctrine in Republic v. Serrano, which
23
was decided on 24 February 2010, and the applicable doctrine is Republic v. T.A.N. Properties,
Inc. Which was decided on 26 June 2008 and has been reiterated in subsequent cases.
The CA, however, denied the appeal. The court a quo cited the case of
Republic v. Vega, which harmonized the conflicting rulings in Republic v. Serrano and
24
Republic v. T.A.N. Properties, Inc. In Republic v. Vega, this Court ruled that the doctrine
enunciated under Republic v. Serrano applies pro hac vice and "it does not in any way detract
from our rulings in Republic v. T.A.N. Properties, Inc ., and similar cases which impose a strict
requirement to prove that public land is alienable x x x."25
The CA based its ruling on the express declaration in Republic v. Vega, to wit: As an exception,
however, the courts — in their sound discretion and based solely on the evidence presented on
record — may approve the application, pro hac vice, on the ground of substantial compliance
showing that there has been a positive act of the government to show the nature and character
of the land an d an absence of effective opposition from the government. This exception shall
only apply to applications for registration currently pending before the trial court prior to this
Decision and shall be inapplicable to all future applications. (Underscoring and boldfacing in
26
the original)
Hence, the instant petition.
The Issues
Petitioner alleges that:
1. The CA erred in holding that respondents were able to substantially establish that
the subject parcel of land is alienable and disposable; and
2. The CA erred in holding that the respondents were able to sufficiently prove that they
and their predecessors-in-interest were in possession of the subject property since 12
June 1945 or earlier.
The Ruling of the Court
The petition is granted.
To reiterate, under Section 14 of the Property Registration Decree:
Section 14. Who May Apply — The following persons may file in the proper Court of First
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.
xxxx
Thus, applicants for registration must prove the following:(1) that the subject land forms part of
the disposable and alienable lands of the public domain; and (2) that they have been in open,
continuous, exclusive, and notorious possession and occupation of the land under a bona fide
claim of ownership since 12 June 1945 or earlier.
In order to prove that the parcel of land is part of the disposable and alienable lands of the
public domain, respondents rely on the certification issued by the CENRO. The issue is
whether this is sufficient evidence to show that the subject parcel of land falls within the
disposable and alienable lands of the public domain.
Petitioner claims that the CA and the RTC should have applied our ruling in Republic v. T.A.N.
Properties, Inc., which was promulgated on 26 June 2008. In that case, we held that
1âwphi1
applicants for land registration must present a copy of the original classification approved by
the DENR Secretary and certified as true copy by the legal custodian of the official records. If
this standard were to be applied in the instant case, the CA decision should be overturned
because respondents failed to present a certified classification from the DENR Secretary.
Petitioner argues that the standard in Republic v. T.A.N. Properties, Inc. has been applied in
more recent decisions of this Court.
The CA, however, did not follow the ruling in Republic v. T.A.N. Properties, Inc. Instead, it
followed Republic v. Serrano (decided on 24 February 2010) and Republic v. Vega (decided on
17 January 2011). In Republic v. Serrano, we allowed the approval of a land registration
application even without the submission of the certification from the DENR Secretary. As this
ruling presented an apparent contradiction with our earlier pronouncement in Republic v. T.A.N.
Properties, Inc., we sought to harmonize our previous rulings in Republic v. Vega. We then said
that the applications for land registration may be granted even without the DENR Secretary’s
certification provided that the application was currently pending at the time Republic v. Vega
was promulgated. Since respondents’ application was pending before the RTC at the time
Republic v. Vega was promulgated, the CA ruled in favor of the respondents, despite the lack
of certification from the DENR Secretary.
Admittedly, we declared in Republic v. Vega that trial courts may grant applications for
registration despite the absence of a certification from the DENR Secretary. It should be
emphasized, however, that Republic v. Vega applies on a pro hac vice basis only. After
Republic v. Vega, we pointed out in Republic v. San Mateo that: 27
In Vega, the Court was mindful of the fact that the trial court rendered its decision on
November 13, 2003, way before the rule on strict compliance was laid down in T.A.N
Properties on June 26, 2008. Thus, the trial court was merely applying the rule prevailing at the
time, which was substantial compliance. Thus, even if the case reached the Supreme Court
after the promulgation of T.A.N Properties, the Court allowed the application of substantial
compliance, because there was no opportunity for the registrant to comply with the Court's
ruling in T.A.N Properties, the trial court and the CA already having decided the case prior to
the promulgation of T.A.N Properties.
In the case here, however, the RTC Decision was only handed down on November 23, 2010,
when the rule on strict compliance was already in effect. Thus, there was ample opportunity for
the respondents to comply with the new rule, and present before the RTC evidence of the
DENR Secretary's approval of the DENR-South CENRO Certification. This, they failed to do.
In the instant case, the RTC Resolution was issued on 3 July 2012, after the promulgation of
Republic v. T.A.N Properties, Inc. Thus, following our ruling in Republic v. San Mateo, the rule
requiring certification from the DENR Secretary should be applied. It is important to emphasize
that the more recent case of Republic v. Spouses Castuera, decided on 14 January 2015,
28
applied the rule in Republic v. T.A.N Properties, Inc. without any qualification.
WHEREFORE, the petition is GRANTED. The 5 December 2013 Decision of the Court of
Appeals in CA-G.R. CV No. 99280 and the 3 July 2012 Resolution of the Regional Trial Court,
Branch 31 of San Pedro, Laguna in LRC Case No. SPL-0697-10 are hereby REVERSED and
SET ASIDE.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
LUCAS P. BERSAMIN*
Associate Justice


Associate Justice
ATT E STATI O N
ANTONIO T. CARPIO
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's

Chief Justice
Footnotes
*
Designated acting member per Special Order No. 2079 dated 29 June 2015.
1
Rollo, pp. 40-53. Penned by Associate Justice Agnes Reyes-Carpio, with Associate
Justices Noel J. Tijam and Priscilla J. Baltazar-Padilla concurring.
2
Id. At 11.
3
Id. at 40-41.
4
Id. at 11-12.
5
Id. at 43.
6
Id. at 93
7
Id. At 70, 95.
8
Id. at 72.
9
Id.
10
Id.
11
Id. at 42-43.
12
Id. at 41-43.
13
Id. at 41.
14
Id.
15
Id. at 44.
16
Id. at 76.
17
Id. at 75.
18
Id.
19
578 Phil. 441 (2008).
20
627 Phil. 350 (2010).
21
Rollo, p. 75.
22
Id.
23
627 Phil. 350 (2010).
24
654 Phil. 511 (2011).
25
Id. at 527.
26
Id.
27
G.R. No. 203560, 10 November 2014.
28
G.R. No. 203384, 14 January 2015.
SECOND DIVISION
G.R. No. 203384 January 14, 2015

vs.
SPS. JOSE CASTUERA PERLA CASTUERA, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition
1
challenges the 26 March 2012 Decision and 14 August 2012 Resolution of the Court of
2 3
Appeals in CA-G.R. CV No. 85015, affirming the 31 January 2005 Decision of the Regional
4
Trial Court (RTC), Branch 70, Iba, Zambales, in Land Registration Case No. RTC-N-92-I and
denying the motion for reconsideration, respectively.
The Facts
Andres Valiente owned a 3,135-square meter land in Barangay Siminublan, San Narciso,
Zambales. In 1978, he sold the property to respondents Jose and Perla Castuera (Spouses
Castuera). On 21 May 2003, the Spouses Castuera filed with the RTC an application for 5
original registration of title over the property.
The Spouses Castuera presented three witnesses to support their application. The three
witnesses were (1) former barangay captain and councilman Alfredo Dadural, (2) Senior Police
Officer 2 Teodorico Cudal, and (3) Perla Castuera. All witnesses testified that the Spouses
Castuera owned the property.
The Spouses Castuera also presented documentary evidence to support their application. The
documents included tax receipts and an advance plan with a notation, "Checked and verified
6
against the cadastral records on file in this office and is for registration purposes. This survey is
within the Alienable and Disposable land proj. No. 3-H certified by Director of Forestry on June
20, 1927 per LC Map No. 669 Sheet 1."
Petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor General,
filed an opposition to the application for original registration.
The RTC’s Ruling
In its 31 January 2005 Decision, the RTC granted the application for original registration of title
over the property. The RTC held:
From the evidence submitted by the applicants, they have shown preponderantly that they are
the lawful owners in fee simple and the actual possessors of Lot 6553 of the San Narciso
Cadastre. They are entitled therefore to a judicial confirmation of their imperfect title to the said
land pursuant to the provisions of the new Property Registration Decree (PD 1529). 7
Petitioner appealed the RTC Decisionto the Court of Appeals. The Spouses Castuera attached
to their appellees’ brief a certification from the Community Environment and Natural
8
Resources Office (CENRO), stating:
THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso,
Zambales containing an area of ONE THOUSAND EIGHT HUNDRED FORTY SEVEN
(1847.00) SQUARE METERS as shown and described in this sketch as verified by Cart.
Nestor L. Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the
Alienable or Disposable, Project No. 3-H, certified by then Director of Forestry, manila [sic] on
June 20, 1927 per LC Map No. 669, sheet No. 1. 9
The Court of Appeals’ Ruling
In its 26 March 2012 Decision, the Court of Appeals affirmed the RTC Decision. The Court of
Appeals held that:
Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides
for the instances when a person may file for an application for registration of title over a parcel
of land:
"Section 14. Who May Apply. — The following persons may file in the proper Court of first
Those who by themselves or through their predecessors-in-interest havebeen in open,

earlier." Accordingly, pursuant to the aforequoted provision of law, applicants for registration of
title must prove the following: (1) that the subject land forms part of the disposable and
alienable lands of the public domain; and (2) that they have been in open, continuous,
exclusive and notorious possession and occupation of the land under a bona fide claim of
ownership since 12 June 1945 or earlier. Section 14(1) of the law requires that the property
sought to be registered is already alienable and disposable at the time the application for
registration is filed.
Applying the foregoing in the present case, We find and so rule that the trial court is correct in
granting appellees’ application for original registration of the subject land. A scrutiny of the
records shows that there is substantial compliance with the requirement that the subject land is
alienable and disposable land. It bears to emphasize that the Advance Plan has the following
notations:
"Checked and verified against the cadastral records on file in this office and is for registration
purposes.["]
"This survey is within the alienable and disposable land proj. no. 3-H certified by Director of
Forestry on June 20, 1927 per LC Map No. 669, Sheet 1."
In Republic v. Serrano, the Supreme Court affirmed the findings of the trial court and this Court
that the parcel of land subject of registration was alienable and disposable. It held that a DENR
Regional Technical Director’s certification, which is annotated on the subdivision plan
submitted in evidence, constitutes substantial compliance with the legal requirement:
"While Cayetano failed tosubmit any certification which would formally attest tothe alienable
and disposable character of the land applied for, the Certification by DENR Regional Technical
Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in evidence by
Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that
Lot 249 had been verified as belonging to the alienable and disposable area as early as July
18, 1925.["]
"The DENR certification enjoys the presumption of regularity absent any evidence to the
contrary. It bears noting that no opposition was filed or registered by the Land Registration
Authority or the DENR to contest respondents’ applications on the ground that their respective
shares of the lot are inalienable. There being no substantive rights which stand to be
prejudiced, the benefit of the Certification may thus be equitably extended in favor of
respondents."
While in the case of Republic v.T.A.N. Properties, Inc., the Supreme Court overturned the grant
bythe lower courts of an original application for registration over a parcel of land in Batangas
and ruled that a CENRO certification is not enough to certify that a land is alienable and
disposable: ["]Further, it is not enoughfor the PENRO or CENRO to certify that a land is
alienable and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the application for registration falls within
the approved area per verification through survey by the PENRO or CENRO. In addition, the
applicant for land registration must present a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official records.
These facts must be established to prove that the land is alienable and disposable.
Respondent failed to do so because the certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable."
However, in the recent case of Republic vs. Carlos R. Vega, et al., as an exception to the strict
application of the stringent rule imposed in the above pronouncement that the absence of
these twin certifications justifies a denial of an application for registration, the Supreme Court,
in its sound discretion, and based solely on the evidence on record, may approve the
application, pro hac vice, on the ground of substantial compliance showing that there has been
a positive act of government to show the nature and character of the land and an absence of
effective opposition from the government. This exception shall only apply to applications for
registration currently pending before the trial court prior to this Decision and shall be
inapplicable toall future applications.
It must be noted that the present case was decided by the trial court only on January 31, 2005,
prior to the above pronouncement[.] We believe that the same rule shall apply to the present
case allowing the registration of the subject property as there is substantial compliance with
the requirement that the land subject of registration is an alienable and disposable land.
Besides, appellees had attached to their appellees’ brief a Certification from the DENR-CENR
Office issued on December 2, 1999, which states the following:
"THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso,
Zambales containing an area of ONE THOUSAND EIGHT HUNDRED FORTY SEVEN (1,847)
SQUARE METERS as shown and described in this sketch as verified by Cart. Nestor L.
Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the Alienable or
Disposable, Project No. 3-H, certified by then Director of Forestry, Manila on June 20, 1927 per
LC Map No 669, Sheet No. 1." 10
Petitioner filed a motion for reconsideration. In its 14 August 2012 Resolution, the Court of
Appeals denied the motion. Hence, the present petition.
The Issue
Petitioner raises as issue that the advance plan and the CENRO certification are insufficient
proofs of the alienable and disposable character of the property.
The Court’s Ruling
The advance plan and the CENRO certification are insufficient proofs of the alienable and
disposable character of the property. The Spouses Castuera, as applicants for registration of
title, must present a certified true copy of the Department of Environment and Natural
Resources Secretary’s declaration or classification of the land as alienable and disposable. In
Republic of the Philippines v. Heirs of Juan Fabio, citing Republic v. T.A.N. Properties,
11
Inc., the Court held that:

12
In Republic v. T.A.N. Properties, Inc., we ruled that it is not enough for the Provincial
Environment and Natural Resources Office (PENRO) or CENRO to certify that a land is
alienable and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the application for registration falls within
the approved area per verification through survey by the PENRO or CENRO. In addition, the
applicant must present a copy of the original classification of the land into alienable and
disposable, as declared by the DENR Secretary, or as proclaimed by the President. Such copy
of the DENR Secretary's declaration or the President's proclamation must be certified as a true
copy by the legal custodian of such official record. These facts must be established to prove
that the land is alienable and disposable. 13
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the 26 March 2012 Decision
and 14 August 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 85015.
Respondents Jose and Perla Castuera's application for registration is DISMISSED.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.*

Associate Justice


Associate Justice
ATT E STATI O N
ANTONIO T. CARPIO
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's

Chief Justice
Footnotes
* Designated Acting Member per Special Order No. 1910 dated 12 January 2015.
1
Rollo, pp. 7-26.
2
Id. at 27-34. Penned by Associate Justice Stephen C. Cruz, with Associate Justices
Vicente S. E. Veloso and Myra V. Garcia-Fernandez concurring.
3
Id. at 35-36.
4
CA rollo, pp. 35-38. Penned by Judge Clodualdo M. Monta.
5
Records, pp. 2-5.
6
Id. at 6.
7
8
Id. at 57.
9
Id.
10
Rollo, pp. 30-33.
11
595 Phil. 664 (2008).
12
578 Phil. 441 (2008).
13
FIRST DIVISION
G.R. No. 156205, November 12, 2014
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL EXECUTIVE DIRECTOR,

REGION IV, DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, Petitioner, v.MARJENS INVESTMENT CORPORATION AND PATROCINIO P.
VILLANUEVA, Respondents.
DECISION
This petition for review on certiorari seeks to reverse the November 19, 2002 Decision[1 of the Court of
Appeals in CA-G.R. SP No. 50023, which dismissed petitioner Republic of the Philippines' petition on
the ground that the disputed property had already been segregated and classified as private property
and no longer form part of the public domain.
Background
The Court of Appeals gave a short background on the subject property.
In Land Registration Case No. 52, G.L.R.O. Rec. No. 3454, entitled, "Hammon H. Buck, et al. vs.
Director of Lands," the then Court of First Instance of Batangas rendered a Decision dated March 30,
1951 x x x granting the application for registration of several parcels of land in favor of the applicants
therein, Hammon H. Buck, et al.
In the said judgment, it was established that the lands described in Plans Psu-118922 and 114430
were originally owned by Rita Vda. de Ilustre since 1890. In 1923, the parcels of land applied for were
purchased by Donato Punzalan. Later, the lots under Plan Psu-114430 were purchased from Donato
Punzalan by Agustin Canoso and Gregorio Decepeda and in consideration of the survey and
registration thereof, Lots 1 and 2, Plan Psu-114430 were ceded to Hammon H. Buck. This was to
become the basis of Hammon H. Buck's application for registration under Land Registration Case No.
52.
As a consequence of the final and executory decision in Land Registration Case No. 52, Decree No.
6610 was awarded to Hammon H. Buck which finally led to the issuance in his name of Original
Certificate of Title No. 0-669 x x x on February 18, 1952.2
The Facts of the Case
On December 22, 1998, or almost 46 years after the issuance of Original Certificate of Title (OCT) No.
0-669, petitioner Republic, represented by the Region IV Regional Executive Director of the
Department of Environment and Natural Resources (DENR), filed a petition before the Court of
Appeals for annulment of judgment, cancellation of title, and reversion against respondents Marjens
Investment Corporation (Marjens) and Patrocinio Villanueva (Villanueva), the Register of Deeds for the
Province of Batangas (Tanauan, Batangas), and the Regional Trial Court of LipaCity. 3 chanroblesvirtuallawlibrary
Petitioner, through the Office of the Solicitor General (OSG), alleges that respondents Marjens and
Villanueva appear as registered owners of a land identified as Lot 1 (LRC) Pcs-943, which is a portion
of Lots 1 and 2, plan Psu-114430 LRC (G.L.R.O.) Record No. N-3454, with an area of five thousand
(5,000) square meters, covered by Transfer Certificate of Title (TCT) No. T-18592 issued on April 7,
1976 by the Office of the Register of Deeds of Tanauan, Batangas. 4 chanroblesvirtuallawlibrary
The OSG avers that TCT No. T-18592 appears to have emanated from Original Certificate of Title
(OCT) No. 0-669 in the name of Hammon H. Buck issued by virtue of a Decision 5 dated March 30,
1951, rendered in Land Registration Case No. 52, G.L.R.O. Record No. N-3454 of the Court of First
Instance (CFI) of Lipa City, Batangas, Eighth Judicial District.6
chanroblesvirtuallawlibrary
The OSG further alleges that upon verification through a certification 7 dated April 30, 1997 issued by
the Community Environment and Natural Resources Office (CENRO) of the DENR in Batangas City, it
was ascertained that the land covered by TCT No. T-18592 is within the unclassified public forest per
Land Classification Control Map No. 10 for the Provinces of Batangas and Cavite.
The OSG argues that the land in question cannot be the subject of disposition or registration, and the
trial court did not acquire jurisdiction over said property, much less to decree the same as private
property. Therefore, the registration proceedings, the judgment in the subject case, the OCT No. O-
669 issued pursuant thereto, and all subsequent titles are null and void. The land covered by TCT No.
T-18592, not having been legally registered, remains and forms part of the public domain of the
State.8
In their comment, respondents deny the OSG's allegations. They claim that their titles, their
predecessors' titles, and their mother title are issued in accordance with law, and that the property
was registered and brought under the Torrens system. Respondents contend that the subject property
was already private property even before the Spanish Crown ceded sovereignty over the Philippine
Islands to the United States of America.9 chanroblesvirtuallawlibrary
Respondents assert that the government has lost its rights by laches and estoppel to question the
validity of the OCT No. 0-669, the proceedings in LRC Case No. 52, G.L.R.O. Record No. N-3454, and
the corresponding decree (Decree 6610) issued after almost 50 years have lapsed. They maintain that
the proceeding for its registration was made in accordance with the requirements of the law, including
the publication of notices addressed to the Solicitor General, the Director of Lands, and the Director of
Forestry, among others, in the Official Gazette (Vol. 46, No. 12, pp. 6381-6382 and Vol. 47, No. 1, pp.
438-439). Despite the notices, there was no opposition from the government. 10 chanroblesvirtuallawlibrary
Respondents insist that it will be most unfair and will violate their right to due process if they will
again be required to undergo another trial to establish their long continued, open, public, adverse
possession and cultivation of the property in the concept of owners as against the whole world, now
that all their witnesses are long dead, senile, or impossible to locate. They also point out that the
subject property has transferred to various parties who have been regularly assessed and paying
realty taxes for several years.11 chanroblesvirtuallawlibrary
Respondents allege that the government through the Bureau of Lands had presumably issued various
free patents over the subject property that has constrained petitioners to file a petition for annulment
based on these free patent titles that overlap with the respondents' title. They questioned why the
government issued free patents over the subject property when it believed that the same is part of an
unclassified public forest. They even suggested to implead the individuals with titles overlapping with
their titles for a complete determination of the issues in the case and to avoid unnecessary and
wasteful duplication of valuable time and resources of the OSG. 12 chanroblesvirtuallawlibrary
To bolster its argument, respondents cited that there are many real estate developments going on
near or around the area where the property is located, one of which is the Splendido Gardens, a resort
and golf course. Respondents speculated how the said developments proceeded if the property
covered therein is within the unclassified public forest as the government claims, and that is assuming
all the requisite government approvals have been secured by the developers. 13 chanroblesvirtuallawlibrary
Respondents availed of two modes of discovery, and moved to serve written interrogatories to parties
and for the production of documents.14 The Court of Appeals granted the motions,15 to which the
petitioner filed its comments. The Court of Appeals likewise directed both parties to file their
respective memoranda, after which the case was submitted for decision. 16 chanroblesvirtuallawlibrary
The Court of Appeals Decision
On November 19, 2002, the Court of Appeals dismissed the petition as follows: chanroblesvirtuallawlibrary
IN VIEW OF THE FOREGOING, the instant petition is ordered DISMISSED. No cost.17 ChanRoblesVirtualawlibrary
The Court of Appeals applied the case of Cariho v. Insular Government of the
Philippine Islands,18 which recognized private ownership of lands already possessed or held by
individuals under claim of ownership as far back as testimony or memory goes and therefore never to
have been public land that Spain could bequeath to the United States of America.
Reiterating the CFI Decision, the Court of Appeals held that the subject properties under Plan Psu-
114430 were originally owned by Rita Vda. de Ilustre since 1890 before the Treaty of Paris. Reckoned
from such time, under the Cariño ruling, the subject property had already ceased to be public, had
been appropriated into private ownership, and therefore excluded from the "public domain" ceded by
Spain to the United States of America in the Treaty of Paris of 1898. 19 chanroblesvirtuallawlibrary
The Court of Appeals pronounced that the CFI of Batangas is unmistakably equipped with jurisdiction
and authority to legally adjudicate the land applied for in Registration Case No. 52 in favor of the
applicants. Consequently, Decree 6610, OCT No. O-669, and TCT No. T-18592, in respondents' name,
must be upheld as valid issuances and documents of title. 20 chanroblesvirtuallawlibrary
Further, the Court of Appeals said that there are still other reasons in rejecting the arguments of the
petitioner that the controversial lot and title in this petition still forms part of the public domain. By its
own act and admission in the answer to the written interrogatories, petitioner confessed to have
issued several Environmental Compliance Certificates (ECCs) to projects within Land Classification
Control Map (LCCM) No. 10, although identification is not feasible as the issuance of ECCs began in
1982, pursuant to Presidential Decree No. 1586 dated June 11, 1978, among others. 21 The foregoing
admissions militate against petitioner's assertion and cast serious doubts on what the DENR
certification contains. The Court of Appeals said that it is inconceivable how petitioner can claim that
the subject land is an inalienable forest land when it had been alienating it by the numerous grants
and decrees it had issued.22 chanroblesvirtuallawlibrary
The Court of Appeals cited Republic v. Court of Appeals and Cosalan,23 wherein the Court declared that
despite the general rule that forest lands cannot be appropriated by private ownership, it had been
previously held that while the government has the right to classify portions of public land, the primary
right of a private individual who possessed and cultivated the land in good faith much prior to such
classification must be recognized and should not be prejudiced by after-events which could not have
been anticipated.
Moreover, the Court of Appeals observed that LCCM No. 10 is not dated. Petitioner explained that
according to the Land Classification Department of National Mapping and Resource Information
Authority (NAMRIA), LCCM No. 10 is not dated because it is used as a control map or reference in
order to determine which land classification map is to be used. When the lot covered by TCT No. T-
18592 was plotted based on the given tie point/line, it is covered by LC Map No. 3013 under the land
classification for Batangas. LC Map No. 3013 was certified under Forest Administrative Order No. 4-
1656 dated March 15, 1982. The Court of Appeals concluded that long before LC Map No. 3013 was
certified, the subject property covered by TCT No. T-18592 had already acquired the character of a
private ownership before the reclassification of the area to an unclassified forest. 24 chanroblesvirtuallawlibrary
As for respondents' affirmative defenses of estoppel and laches, the Court of Appeals ruled that
estoppel and laches run against the State, citing Republic v. Court of Appeals and Santos,25 as cralawred
follows:chanroblesvirtuallawlibrary
The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents. However, like all general rules, this is also subject to exceptions, viz.: chanRoblesvirtualLawlibrary
Estoppels against the public are little favored. They should not be invoked except in ra[r]e and
unusual circumstances, and may not be invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be applied with circumspection and
should be applied only in those special cases where the interests of justice clearly require it.
Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the
doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals. (Citations omitted.)
Unconvinced, the OSG filed this petition for review on certiorari before the Court assigning the
following as errors:cralawlawlibrary
1) The Court of Appeals' finding that the property covered by TCT No. T- 18592 had become private
property prior to the classification of the area to an unclassified forest, and
2) The Court of Appeals' ruling that the instant case is an exception to the general rule that laches and
estoppel do not run against the State.[26chanroblesvirtuallawlibrary
The Court's Ruling
The petition is denied.
First Issue: Whether or not the subject property covered by TCT No. T-18592 is a private
property or part of the public domain.
The case of Cariño v. Insular Government of the Philippine Islands27 states that "[prescription is
mentioned again in the royal cedula of October 15, 1754, cited in 3 Philippine, 546; '[w]here such
possessors shall not be able to produce title deeds, it shall be sufficient if they shall show that ancient
possession, as a valid title by prescription.' It may be that this means possession from before 1700;
but, at all events, the principle is admitted. As prescription, even against Crown lands, was recognized
by the laws of Spain we see no sufficient reason for hesitating to admit that it was recognized in the
Philippines in regard to lands over which Spain had only a paper sovereignty."
The United States Supreme Court through Mr. Justice Oliver Wendell Holmes pronounced in
the Cariñocase28 that "every presumption is and ought to be against the government in a case like the
present. It might, perhaps, be proper and sufficient to say that when, as far back as testimony or
memory goes, the land has been held by individuals under a claim of private ownership, it will be
presumed to have been held in the same way from before the Spanish conquest, and never to have
been public land."
The records did not categorically state that Rita Vda. de Ilustre had Spanish title over the subject
property. But by virtue of her long continued, open, public, adverse possession and cultivation of the
property in the concept of owner as against the whole world she is deemed to have acquired
ownership over the subject property.
As for respondents, it is undisputed that the property covered by TCT No. T-18592 traces its title to
the property originally owned by Rita Vda. de Ilustre since 1890. From her it passed on to several
hands until it was transferred to Hammon H. Buck, who successfully registered it in his name on
February 18, 1952. From 1890, respondents' predecessors in interest had been in peaceful, open,
continuous, exclusive, adverse, and notorious possession in the concept of an owner of the subject
property including the portion covered by TCT No. T-18592. Following the Cariño ruling, the subject
property had been a private land and excluded from the public domain since 1890 prior to the signing
of the Treaty of Paris on December 10, 1898. Therefore, it is not part of the public domain that passed
on from Spain to the United States of America.
For the same reason, it is also not part of the unclassified public forest as petitioner claims.
In Republic v. Court of Appeals and Cosalan, 29 the Court held that "[d]espite the general rule that
forest lands cannot be appropriated by private ownership, it has been previously held that 'while the
Government has the right to classify portions of public land, the primary right of a private individual
who possessed and cultivated the land in good faith much prior to such classification must be
recognized and should not be prejudiced by after-events which could not have been
anticipated...Government in the first instance 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'"
The map (LC Map No. 3013), which is the basis of petitioner's claim, is inexistent at the time Hammon
H. Buck was issued an original certificate of title. Therefore, the subject property had been a private
property before it was classified. Thus, the Court agrees with the Court of Appeals' findings and
upholds the private character of the subject property.
The Court also agrees with the Court of Appeals' observation that petitioner admitted in its answer to
the written interrogatories that the DENR issued several ECCs to projects within LCCM No. 10. The
admissions go against petitioner's assertion and cast serious doubts on what the DENR certification
contains. The Court of Appeals said, to which the Court concurs, that it is inconceivable how petitioner
can claim that the subject land is an inalienable forest land when it had been alienating it by the
numerous grants and decrees it had issued. Quoted hereunder are excerpts from petitioner's answer
to respondents' written interrogatories.
10. Have you issued any Environmental Clearance Certificate (ECC) for any property or development
project of any project situated within (and/or where any portion of such project is located within) LC
Map CM-10 for the Province of Batangas and Cavite mentioned in Annex "D" of your petition?
ANSWER: Yes.
11. If your answer to the immediately preceding interrogatory is in the affirmative, please identify
such ECC and/or the project.
ANSWER: The DENR Region IV had already issued several Environmental Compliance Certificates
(ECC) to projects within [the] Land Classification Control Map (LCCM) 10. Identification of such
projects is not feasible considering that the issuance of the ECCs began in 1982 pursuant to
Presidential Decree No. 1586 dated June 11, 1978 and the said map covers the two (2) Provinces of
Batangas and Cavite. The issuance of the ECCs in 1982 up to 1992 was previously done by the
defunct National Environmental Protection Council (NEPC), then by the Environmental Management
Bureau (EMB) and subsequently, upon the implementation of Executive Order No. 192, the
Department of Environment and Natural Resources (DENR) Reorganization Law, it was issued by the
DENR-EMB, however, there were projects within the jurisdiction of the DENR Regional Office and the
issuance of the ECCs was devolved to the latter office.
xxxx
16. Has the government issued any free patents, sales patents, or homestead patents, under the
provisions of the Public Land Act (CA No. 141, as amended), over any property located within (or
including within its boundary any portion thereof) the area covered by LC Map CM-10 for the Province
of Batangas and Cavite?
ANSWER: Yes.
17. If your answer to the immediately preceding interrogatory is in the affirmative, please identify
such free patents, sales patents and homestead patents.
ANSWER: It is impossible to identify all the patents issued within the area covered by LCCM-10
considering that thousands were already issued within the Provinces of Cavite and Batangas since the
approval of Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act on
November 7, 1936.30 ChanRoblesVirtualawlibrary
From the foregoing, the Court sustains the Court of Appeals' ruling that the CFI of Batangas has
jurisdiction and authority to legally adjudicate the land applied for in Registration Case No. 52 in favor
of the applicants. Consequently, Decree 6610, OCT No. 0-669, and TCT No. T-18592, in respondents'
name, must be upheld as valid issuances and documents of title.
Second Issue: Whether or not the government is barred by laches and estoppel.
Laches has been defined as the "failure or neglect for an unreasonable and unexplained length of time
to do that which, by observance of due diligence, could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time, warranting the presumption that the
party entitled to assert his right either has abandoned or declined to assert it." 31
The following elements must be present in order to constitute laches: (a) conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in
asserting complainant's rights after he had knowledge of defendant's acts and after he has had the
opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the
right on which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is
accorded to the complainant.32 chanroblesvirtuallawlibrary
We find it unnecessary to discuss further this issue in view of our ruling that Decree No. 6610, OCT
No. 0-669, and TCT No. T-18592 registered in the name of respondents were validly issued.
WHEREFORE, premises considered, the Court of Appeals Decision dated November 19, 2002 in CA-
G.R. SP No. 50023 is AFFIRMED.
SO ORDERED.
Velasco, Jr.,* Del Castillo,*** Perez, and Perlas-Bernabe, JJ., concur.

Leonardo-De Castro,** J. (Acting Chairperson).
Endnotes:
*
Per Special Order No. 1870 dated November 4, 2014.
**
***
1
Rollo, pp. 28-48; penned by Associate Justice Conrado M. Vasquez, Jr. with Associate Justices Elvi
John S. Asuncion and Sergio L. Pestano, concurring.
2
Id. at 28-29.
3
Id. at 10.
4
Id. at 10-11.
5
Id. at 51-54; penned by Judge Juan P. Enriquez.
6
Id. at 11.
7
Id. at 55; signed by CENR Officer Pancrasio M. Alcantara and verified by Forester I Ramon B.
Berbano.
8
Id. at 12.
9
10
Id. at 67-69. Id.
11
Id.
12
Id. at 69.
13
Id. at 71.
14
Id. at 102-110, 112-115.
15
Id. at 111, 122, and 154.
16
Id. at 157, 230.
Rollo, p. 47.
17
18
41 Phil. 935(1909).
Rollo, p. 42.
19
20
Id. at 42-43.
21
Id. at 43.
22
Id. at 43-44.
23
G.R. No. 38810, May 7, 1992, 208 SCRA 428, 433.
Rollo, pp. 44-45.

24
25
cralawred 361 Phil. 319, 329(1999).
Rollo, pp. 161-162.

26
27
Supra note 18 at 942.
28
Id. at 941.
29
Supra note 23, citing Ankron v. Government of the Philippine Islands, 40 Phil. 10, 16
(1919); Republic v. Court of Appeals and Marcelo, 250 Phil. 82, 89-90 (1988); Republic v. Court of
Appeals and Arquillo, 261 Phil. 393, 408 (1990).
30
Fernando, Jr. v. Acuna, G.R. No. 161030, September 14, 2011, 657 SCRA 499, 514-515.
31
32
Id. at 515.
SECOND DIVISION
G.R. No. 176020 September 29, 2014
HEIRS OF TELESFORO JULAO, namely, ANITA VDA. DE ENRIQUEZ, SONIA J.

TOLENTINO and RODERICK JULAO, Petitioners,
vs.
SPOUSES ALEJANDRO and MORENITA DE JESUS, Respondents.
DECISION
DEL CASTILLO, J.:
Jurisdiction over the subject matter is conferred by law and is determined by the material
allegations of the complaint. Thus, it cannot be acquired through, or waived by, any act or
1
omission of the parties; nor can it be cured by their silence, acquiescence, or even express
2
consent. 3
This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the
4
Decision dated December 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 72845.
5
Factual Antecedents
Sometime in the 1960's, Telesforo Julao (Telesforo) filed before the Department of
6
Environment and Natural Resources (DENR), Baguio City, two Townsite Sales Applications
(TSA), TSA No. V-2132 and TSA No. V-6667. Upon his death on June 1, 1971, his applications
7
were transferred to his heirs. 8
On April 30, 1979, Solito Julao (Solito) executed a Deed of Transfer of Rights, transferring his
9 10
hereditary share in the property covered by TSA No. V-6667 to respondent spouses Alejandro
and Morenita De Jesus. In 1983, respondent spouses constructed a house on the property
they acquired from Solito. In 1986, Solito went missing.
11 12
On March 15, 1996, the DENR issued an Order: Rejection and Transfer of Sales Rights, to 13
wit:
WHEREFORE, premises considered and it appearing that herein applicant is a holder of two
(2) applications in violation with established policy in the disposition [of] public lands in the City
of Baguio, TSA V-6667 is hereby ordered dropped from the records. Accordingly, it is
henceforth ordered that TSA 2132 in the name ofTELESFORO JULAO be, as [it is] hereby
transferred to the heirs of TELESFORO JULAO, represented by ANITA VDA. DE ENRIQUEZ,
and as thus transferred, the same shall continue to be given due course. For convenience of
easy reference, it is directed that the [pertinent] records be consolidated in the name of the
latter.
SO ORDERED. 14
Consequently, on December 21, 1998, Original Certificate of Title (OCT) No. P-2446, covering 15
a 641-square meter property, was issued in favor of the heirs of Telesforo. 16
On March 2, 1999, petitioners Anita Julao vda. De Enriquez, Sonia J. Tolentino and Roderick
Julao, representing themselves to be the heirs of Telesforo, filed before the Regional Trial
17
Court (RTC), Baguio City, a Complaint or Recovery of Possession of Real Property, docketed 18
as Civil Case No. 4308-R, against respondent spouses. Petitioners alleged that they are the
19
true and lawful owners of a 641-square meter parcel of land located at Naguilian Road, Baguio
City, covered by OCT No. P-2446; that the subject property originated from TSA No. V-
20
2132; that respondent spouses' house encroached on 70 square meters of the subject
21
property; that on August 4, 1998, petitioners sent a demand letter to respondent spouses
22
asking them to return the subject property; that respondent spouses refused to accede to the
23
demand, insisting that they acquired the subject property from petitioners' brother, Solito, by
virtue of a Deed of Transfer of Rights; that in the Deed of Transfer of Rights, Solito expressly
24
transferred in favor of respondent spouses his hereditary share in the parcel of land covered by
TSA No. V-6667; that TSA No. V-6667 was rejected by the DENR; and that respondent
25 26
spouses have no valid claim over the subject property because it is covered by a separate
application, TSA No. V-2132. 27
Respondent spouses filed a Motion to Dismiss on the ground of prescription, which the RTC
28
denied for lack of merit. Thus, they filed an Answer contending that they are the true and
29 30
lawful owners and possessors of the subject property; that they acquired the said property
31
from petitioners' brother, Solito; and that contrary to the claim of petitioners, TSA No. V-6667
32
and TSA No. V-2132 pertain to the same property. 33
During the trial, petitioners disputed the validity of the Deed of Transfer of Rights executed by
Solito. They presented evidence to show that Telesforo submitted two applications, TSA No. V-
2132 and TSA No. V-6667. The first one, TSA No. V-2132, resulted in the issuance of OCT
34
No. P-2446 in favor of the heirs ofTelesforo, while the second one, TSA No. V-6667, was
dropped from the records. They also presented evidence to prove that Solito had no
35
hereditary share in the estate of Telesforo because Solito was not Telesforo's biological son,
but his stepson, and that Solito 's real name was Francisco Bognot. 36
After petitioners rested their case, respondent spouses filed a Motion for Leave of Court to File
a Demurrer to Evidence. The RTC, however, denied the Motion.
37 38
The heirs of Solito then moved to intervene and filed an Answer-lnlntervention, arguing that 39
their father, Solito, is a legitimate son ofTelesforo and that Solito sold his hereditary share in
the estate of his father to respondent spouses by virtue of a Deed of Transfer of Rights. 40
To refute the evidence presented by petitioners, respondent spouses presented two letters
from the DENR: ( 1) a letter dated April 27, 1999 issued by Amando I. Francisco, the Officer-In-
Charge of CENRO-Baguio City, stating that "it can be concluded that TSA No. V-2132 and TSA
No. V-6667 referred to one and the same application covering one and the same lot;" and (2) 41
a letter dated September 30, 1998 from the DENR stating that "the land applied for with
42
assigned number TSA No. V-2132 was renumbered as TSA No. V-6667 as per 2nd
Indorsement dated November 20, 1957 x x x." They also presented two affidavits, both dated
43 44
August 31, 1994, executed by petitioners Sonia Tolentino and Roderick Julao, acknowledging 45
that Solito was their co-heir and that he was the eldest son of Telesforo. Ruling of the
46
Regional Trial Court
On August 10, 2001, the RTC rendered a Decision in favor of petitioners. The RTC found that
47
1âwphi1
although petitioners failed to prove their allegation that Solito was not an heir of
Telesforo, they were nevertheless able to convincingly show that Telesforo filed with the
48
DENR two applications, covering two separate parcels of land, and that it was his first
application, TSA No. V-2132, which resulted in the issuance of OCT No. P-2446. And since 49
what Solito transferred to respondent spouses was his hereditary share in the parcel of land
covered by TSA No. V-6667, respondent spouses acquired no right over the subject property,
which was derived from a separate application, TSA No. V-2132. Thus, the RTC disposed of
50
the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the [petitioners]

and against the [respondents] who are hereby ordered to restore the possession of the land in
question consisting of an area of 70 square meters, more or less, which is a portion of the land
covered by [OCT] No. P-2446. The [respondents] are ordered to remove the house and/or
other improvements that they constructed over the said parcel of land and to vacate the same
upon the finality of this decision.
SO ORDERED. 51
Ruling of the Court of Appeals
Aggrieved, respondent spouses elevated the case to the CA.
On December 4, 2006, the CA reversed the ruling of the RTC. The CA found the Complaint
dismissible on two grounds: (1) failure on the part of petitioners to identify the property sought
to be recovered; and (2) lack of jurisdiction. The CA noted that petitioners failed to pinpoint the
property sought to be recovered. In fact, they did not present any survey plan to show that
52
respondent spouses actually encroached on petitioners' property. Moreover, the CA was not
53
fully convinced that the two applications pertain to two separate parcels of land since
respondent spouses were able to present evidence to refute such allegation. The CA likewise 54
pointed out that the Complaint failed to establish that the RTC had jurisdiction over the case as
petitioners failed to allege the assessed value of the subject property. Thus:
55
WHEREFORE, premises considered, the appeal is GRANTED. The decision appealed from is
REVERSED and SET ASIDE. The complaint is DISMISSED.
SO ORDERED. 56
Issues
Hence, petitioners filed the instant Petition for Review on Certiorari, raising the following errors:
I
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT PETITIONERS FAILED TO
PROVE THE IDENTITY OF THE PROPERTY IN QUESTION.
II
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID
NOT ACQUIRE JURISDICTION OVER THE COMPLAINT. 57
At this juncture, it must be mentioned that in the Resolution dated March 19, 2007, we
58
required respondent spouses to file their Comment to the Petition which they failed to comply
with. Thus, in the Resolution dated March 11, 2013, we dispensed with the filing of respondent
59
spouses' Comment. At the same time, we required petitioners to manifest whether they are
willing to submit the case for resolution based on the pleadings filed. To date, petitioners have
not done so.
Our Ruling
The Petition lacks merit.
The assessed value must be alleged in the complaint to determine which court has jurisdiction
over the action.
Jurisdiction as we have said is conferred by law and is detennined by the allegations in the
complaint, which contains the concise statement of the ultimate facts of a plaintiffs cause of
action.60
Section 19(2) and Section 33(3) of Batas Pambansa Big. 129, as amended by Republic Act
No. 7691, provide:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any interest
therein, where the assessed value of the property involved exceeds twenty thousand pesos
(₱20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand
pesos (₱50,000.00) except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts:
xxxx
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
x x x x (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty Thousand Pesos (₱20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty Thousand Pesos (₱50,000.00)
exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes, the value of such property
shall be determined by the assessed value of the adjacent lots.
Based on the foregoing, it is clear that in an action for recovery of possession, the assessed
value of the property sought to be recovered determines the court's jurisdiction. 61
In this case, for the RTC to exercise jurisdiction, the assessed value of the subject property
must exceed ₱20,000.00. Since petitioners failed to allege in their Complaint the assessed
value of the subject property, the CA correctly dismissed the Complaint as petitioners failed to
establish that the RTC had jurisdiction over it. In fact, since the assessed value of the property
was not alleged, it cannot be determined which trial court had original and exclusive jurisdiction
over the case.
Furthermore, contrary to the claim of petitioners, the issue of lack of jurisdiction was raised by
respondents in their Appellant's Brief And the fact that it was raised for the first time on appeal
62
is of no moment. Under Section 1, Rule 9 of the Revised Rules of Court, defenses not pleaded
63
either in a motion to dismiss or in the answer are deemed waived, except for lack of
jurisdiction, litis pendentia, res judicata, and prescription, which must be apparent from the
pleadings or the evidence on record. In other words, the defense of lack of jurisdiction over the
subject matter may be raised at any stage of the proceedings, even for the first time on
appeal. In fact, the court may motu proprio dismiss a complaint at any time when it appears
64
from the pleadings or the evidence on record that lack of jurisdiction exists. 65
In an action to recover, the property must be identified
Moreover, Article 434 of the Civil Code states that "[i]n an action to recover, the property must
be identified, and the plaintiff must rely on the strength of his title and not on the weakness of
the defendant's claim." The plaintiff, therefore, is duty-bound to clearly identify the land sought
to be recovered, in accordance with the title on which he anchors his right of ownership. It 66
bears stressing that the failure of the plaintiff to establish the identity of the property claimed is
fatal to his case.
67
In this case, petitioners failed to identify the property they seek to recover as they failed to
describe the location, the area, as well as the boundaries thereof. In fact, as aptly pointed out
by the CA, no survey plan was presented by petitioners to prove that respondent spouses
actually encroached upon the 70-square meter portion of petitioners' property. Failing to prove
68
their allegation, petitioners are not entitled to the relief prayed for in their Complaint.
All told, we find no error on the part of the CA in dismissing the Complaint for lack of jurisdiction
and for failing to identify the property sought to be recovered.
WHEREFORE, the Petition is hereby DENIED. The Decision dated December 4, 2006 of the
Court of Appeals in CA-G.R. CV No. 72845 is hereby AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO*
Associate Justice
Chairperson
ARTURO D. BRION JOSE CATRAL MENDOZA


Associate Justice
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Acting Chief Justice
Footnotes
* Per Special Order No. 1803 dated September 24, 2014.
1
Padlan v. Dinglasan, G.R.-No. 180321, March 20, 2013, 694 SCRA 91, 98.
2
Heirs of Julian Dela Cruz v. Heirs of Alberto Cruz, 512 Phil. 389, 400 (2005).
3
Peralta-Labrador v. Bugarin, 505 Phil. 409, 415 (2005).
4
Rollo, pp. 8-24.
5
CA rollo, pp. 61-71; penned by Associate Justice Arcangelita M. Romilla-Lontok and
concurred in by Associate Justices Portia Aliño-Hormachuelos and Amelita G.
Tolentino.
6
Married to Maria Serrano Julao, (also referred to as Maria Consolacion Serrano Julao
in some parts of the records), who died on July 15, 1960; roffo, p. 71.
7
Id. at 12.
8
Id.
9
Erroneously dated as April 3, 1979 in petitioners' Complaint; id. at 40.
10
Id. at 48-49.
11
Id. at 71.
12
Id.
13
Id. at 45.
14
Id.
15
Id. at 44.
16
Id. at 71.
Petitioner Roderick Julao is the son of Rogelio Julao, one of the children of Telesforo
17
Julao and Maria Consolacion Serrano Julao.
18
Rollo, pp. 37-43.
19
Raffled to Branch 60 of the RTC of Baguio City.
20
Rollo, pp. 37-38.
21
Id. at 38.
22
Id. at 39.
23
Id.
24
Id. at 39-40.
25
Id. at 40.
26
Id.
27
Id.
28
Id. at 51-52.
29
Id. at 69.
30
Id. at 53-55.
31
Id. at 53-54.
32
Id.
33
Id. at 54.
34
Id. at 71.
35
Id.
36
Id. at 72.
37
Id. at 70.
38
Id.
39
Id. at 65-67.
40
Id. at 66.
41
Id. at 72.
42
Id. at 60.
43
CA rollo, pp. 69.
44
Rollo, pp. 58-59.
45
Petitioner Roderick Julao and his mother, Josefina Julao, executed a Joint Affidavit.
46
Rollo, pp. 72-74.
47
Id. at 68-75; penned by Judge Edilberto T. Claravall.
48
Id. at 73-74.
49
Id. at 74.
50
Id. at 74-75.
51
Id. at 75.
52
53
Id. at 65.
54
Id. at 68-69.
55
Id. at 69-70.
56
Id. at 71.
57
Rollo, p. 14.
58
ld. at 77.
59
Id. at 174.
60
Padlan v. Dinglasan, supra note 1.
Bernardo v. Heirs of Eusebio Villegas, G.R. No. 183357, March 15, 2010, 615 SCRA
61
466, 472.
62
CA rollo, p. 26.
63
Section 1. Defenses and objections not pleaded. - Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived. However,
when it appears from the pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action pending between the
same parties for the same cause, or that the action is barred by a prior judgment or by
statute oflimitations, the court shall dismiss the claim.
Heirs of Jose Fernando v. De Belen, G.R. No. 186366, July 3, 2013, 700 SCRA 556,
64
562.
65
Id.
66
Dr. Seriña v. Caballero, 480 Phil. 277, 287(2004).
67
Id. at 287-288; and Spouses Divinagracia v. Comet a, 518 Phil. 79, 89 (2006).
68
CA rollo, p. 65.
THIRD DIVISION
G.R. No.180086 July 2, 2014
AFP RETIREMENT AND SEPARATION BENEFITS SYSTEM [AFP-RSBS], Petitioner,

vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
LEONEN, J.:
The period of possession prior to the declaration that land is alienable and disposable
agricultural land is included in the computation of possession for purposes of acquiring
registration rights over a property if the land has already been declared as such at the time of
the application for registration.
This is a Rule 45 petition of the Court of Appeals' January 10, 2007 decision and October 5,
2007 resolution. The Court of Appeals reversed the trial court decision approving petitioner's
application for registration.
On July 10, 1997, the Armed Forcesof the Philippines Retirement and Separation Benefits
System (AFP-RSBS) filed an application for original registration of parcels of land consisting of
48,151 square meters in Silang, Cavite. The parcels of land were designated as Lot Nos. 2969-
1
A, 2969-B, and 2969-C, and had a total area of 48,151 square meters. These were allegedly
2
acquired from Narciso Ambrad, Alberto Tibayan, and Restituto Tibayan on March 13, 1997. It 3
was also alleged that their predecessors-ininterest had been in possession ofthe properties
since June 12, 1945. 4
In a decision dated July 28, 2001,the Municipal Circuit Trial Court approved AFP-RSBS’s
application for original registration. The Register of Deeds was directed to cause the
5
registration of the properties in the name of AFP-RSBS. 6
The Republic of the Philippines moved for the reconsideration of the decision. However, the
7
motion was denied in an order dated February 19, 2003. 8
On March 14, 2003, the Republic appealed the decision and order of the trial court, alleging
improper identification of the properties, noncompliance with SC Administrative Circular No. 7-
96 dated July 15, 1996 requiring that copies of a list of lots applied for be furnished to the
Bureau of Lands, non-submission of a tracing cloth plan, and lack of the Department of
9
Environment and Natural Resources certification showing that the properties were already
declared alienable and disposable at the time of possession by the predecessors-in-interest. 10
On January 10, 2007, the Court ofAppeals reversed the decision of the trial court and
dismissed AFP-RSBS’s application. The dispositive portion of the decision reads:
11
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE and another one
entered DISMISSING the application for original registration. 12
The Court of Appeals found that the properties had no pending land application and that there
were no overlapping lots. Hence, no person needed to be notified of the land registration
13
proceedings. The Court of Appeals also found that AFP-RSBS complied with the requirement
14
to submit a tracing cloth plan. 15
However, according to the Court of Appeals, since Lot 2969 was declared alienable and
disposable only on March 15, 1982, the period of possession of the predecessors-in-interest
before that date should be excluded from the computation of the period of possession. Hence,
16
AFPRSBS’s and its predecessors-in-interest’s possessions could not ripen into ownership. 17
The Court of Appeals also ruled that AFP-RSBS, as a private corporation or association, may
not own alienable lands of the public domain pursuant to Section 3, Article XII of the
Constitution. 18
On February 7, 2007, AFP-RSBS filed a motion for reconsideration of the Court of Appeals’
decision. The Court of Appeals denied this motion in a resolution promulgated on October 5,
19
2007. 20
Hence, this petition was filed.
The issue in this case is whether the period of possession before the declaration that land is
alienable and disposable agricultural land should be excluded from the computation of the
period of possession for purposes of original registration.
AFP-RSBS argued that "[w]hat is required is that the property sought to be registered has
already been declared to be alienable and disposable land of the public domain at the time
[of]the application for registration . . . before the court." In support of this argument, AFP-
21
RSBS cited Republic v. CA and Naguit and Republic v. Bibonia and Manahan. Hence,
22 23
AFPRSBS and its predecessors-in-interest’s possession before June 12, 1945 should have
ripened into a bonafide claim of ownership. AFP-RSBS also argued that the land had already
24
been private before its acquisition in 1997 by virtue of the claim of ownership ofits
predecessors-in-interest before 1945. Therefore, petitioner corporation may acquire the
25
property.
In its comment, the Republic argued that the classification of land as alienable and disposable
is required before possession can ripen into ownership. The period of possession before
26
declaration that the land is alienable and disposable cannot be included in computing the
period of adverse possession. Hence, before March 15, 1982, there could have been no
27
possession in the concept of an owner. The Republic also argued that there was no sufficient
28
evidence of open, continuous, exclusive, and notorious possession under a bona fide claim of
ownership before June 12, 1945.
We rule for petitioner.
The requirements for the application for original registration of land based on a claim of open
and continuous possession of alienable and disposable lands of public domain are provided in
Section 14(1) of Presidential Decree No. 1529 or the Property Registration Decree. It provides:
Section 14. Who may apply. The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally orthrough their duly
continuous, exclusive and notorious possession and occupationof alienable and disposable
lands of the public domainunder a bona fide claim of ownership since June 12, 1945, or earlier.
(Emphasis supplied)
A similar provision can be found in Commonwealth Act No. 141 or Public Land Act:
Sec. 48. The following-described citizens of the Philippines, occupying lands of the public
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
therefor under the Land Registration Act, to wit:
....
continuous, exclusive, and notorious possession and occupationof agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945,
immediately preceding the filing of the application for confirmation of title, except when
prevented by war or force majeure. Those shall be conclusively presumed to have performed
all the conditions essential to a government grant and shall be entitled to a certificate of title
under the provisions of this chapter. (As amended by Presidential Decree No. 1073) (Emphasis
supplied)
Based on these provisions, an applicant for original registration based on a claim of exclusive
and continuouspossession or occupation must show the existence of the following:
1) Open, continuous, exclusive,and notorious possession, by themselves or through their

predecessors-in-interest, of land;
2) The land possessed or occupied musthave been declared alienable and disposable
agricultural land of public domain;
3) The possession or occupation was under a bona fide claim of ownership;
4) Possession dates back to June 12, 1945 or earlier.
On one hand, petitioner argued that its and its predecessors-ininterest’s possession before the
declaration that the property was alienable and disposable agricultural land in1982 should be
included in the computation of the period of possession for purposes of registration. On the
29
other hand, respondent holds the position that possession before the establishment of
alienability of the land should be excluded in the computation. 30
Republic v. Naguit involves the similar question.In that case, this court clarified that Section
31
14(1) of the Property Registration Decree should be interpreted to includepossession before

the declaration of the land’s alienability as long as at the time of the application for registration,
the land has already been declared part of the alienable and disposable agricultural public
lands. This court also emphasized in that case the absurdity that would result in interpreting
Section 14(1)as requiring that the alienability of public land should have already been
established by June 12, 1945. Thus, this court said in Naguit:
Besides, we are mindful of the absurdity that would result if we adopt petitioner’s position.
Absent a legislative amendment, the rule would be, adopting the OSG’s view, that all lands of
the public domain which were not declared alienable or disposable before June 12, 1945 would
not be susceptible to originalregistration, no matter the length of unchallenged possession by
the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and
even precludes the government from giving it effect even as it decides to reclassify public
agricultural lands as alienable and disposable. The unreasonableness of the situation would
even be aggravated considering that before June 12, 1945, the Philippines was not yet even
considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the
property sought tobe registered as already alienable and disposable at the time the application
for registration of title is filed. If the State, at the time the application is made, has not yet
deemed it proper to release the property for alienation ordisposition, the presumption is that
the government is still reserving the rightto utilize the property; hence, the need to preserve its
ownership in the State irrespective of the length of adverse possession even if in good faith.
However, if the property has already been classified as alienable and disposable, as it is in this
case, then there is already an intention on the part of the State to abdicate its exclusive
prerogative over the property. 32
However, in the later case of Republic v. Herbieto that was cited by respondent, this court
33
ruled that the period of possession before the declaration that land is alienable and disposable
cannot be included in the computation of the period of possession. This court said:
Section 48(b), as amended, now requires adverse possession of the land since 12 June 1945
or earlier.In the present Petition, the Subject Lots became alienable and disposable only on 25
June 1963. Any period of possession prior tothe date when the Subject Lots were classified as
alienable and disposable is inconsequential and should be excluded from the computation of
the period of possession; such possession can never ripen into ownership and unless the land
had been classified as alienable and disposable, the rules on confirmation of imperfect title
shall not apply thereto. It is very apparent then that respondents could not have complied with
the period of possession required by Section 48(b) of the Public Land Act, as amended, to
acquire imperfect or incomplete title to the Subject Lots that may be judicially confirmed or
legalized. This court clarified the role of the date, June 12, 1945, in computing the period of
34
possession for purposes of registration in Heirs of Mario Malabanan v. Republic of the

Philippines. In that case, this court declared that Naguit and not Herbieto should be followed.
35
Herbieto "has [no] precedental value with respect to Section 14(1)." This court said:
36
The Court declares that the correct interpretation of Section 14(1) is that which was adopted in
Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the
application of the provision to the point of virtual inutility since it would only cover lands actually
declared alienable and disposable prior to 12 June 1945, even if the current possessor is able
to establish open, continuous, exclusive and notorious possession under a bona fideclaim of
ownership long before that date.
Moreover, the Naguitinterpretation allows more possessors under a bona fideclaim of

ownership to avail ofjudicial confirmation of their imperfect titles than whatwould be feasible
under Herbieto. This balancing fact is significant, especially considering our forthcoming
discussion on the scope and reach ofSection 14(2) of the Property Registration Decree.
....
Thus, neither Herbietonor its principal discipular ruling Buenaventura has any precedental
value with respect to Section 14(1). On the other hand, the ratio of Naguitis embedded in
Section 14(1), since it precisely involved situation wherein the applicant had been in exclusive
possession under a bona fideclaim of ownership prior to 12 June 1945. The Court’s
interpretation of Section 14(1) therein was decisive to the resolution of the case. Any doubt as
to which between Naguitor Herbieto provides the final word of the Court on Section 14(1)
isnow settled in favor of Naguit.
37
Moreover, in the resolution of the motions for reconsideration of this court’s 2009 decision in
Heirs of Malabanan, this court explained that there was no other legislative intent thatcould be
38
associated with the date, June 12, 1945, as written in our registration laws except that it
qualifies the requisite period of possession and occupation. The law imposes no requirement
that land should have been declared alienable and disposable agricultural land as early as
June 12, 1945.
Therefore, what is important in computing the period of possession is that the land has already
been declaredalienable and disposable at the time of the application for registration. Upon
satisfaction of this requirement, the computation of the period may include the period of
adverse possession prior to the declaration that land is alienable and disposable.
Persons are entitled to the registration of their titles upon satisfaction of all the requirements
enumerated under our laws. No presumption or doctrine in favor of state ownership candeprive
them of their titles once all the conditions are satisfied. Our Constitution contains no such limit
39
upon our citizens or privilege upon the state. Neither was this doctrine extended to our organic
40
acts. 41
Respondent argued that "[s]ince the land subject of petitioner’s application for registration was
classified alienable and disposable only on March 15, 1982, it follows that petitioner could not
have possessed the same in the concept of owner, earlier than the said date." 42
Respondent is mistaken. Although adverse, open, continuous, and notorious possession in the
concept of an owner is a conclusion of law to be determined by courts, it has more to do with a
person’s belief in good faith that he or she has just title to the property that he or she is
occupying. It is unrelated to the declaration that land isalienable or disposable. A possessor or
occupant of property may, therefore,be a possessor in the concept of an owner prior to the
determination that the property is alienable and disposable agricultural land. His or her rights,
however, are still to be determined under the law.
Petitioner’s right to the original registration of titleover the property is, therefore, dependent on
the existence of: a) a declaration that the land is alienable and disposable at the time ofthe
application for registration and b) open and continuous possession in the concept of an owner
through itself or through its predecessors-in-interest since June 12, 1945 or earlier.
In this case, there is no dispute that the properties were already declared alienable and
disposable land on March 15, 1982. Hence, the property was already alienable and disposable
at the time of petitioner’s application for registration on July 10, 1997.
As to the required period of possession, petitioner was able to show that it, through itself or its
predecessors-in-interest, has been in open, continuous, exclusive, and notorious possession
before 1945 through testimonies and documents.
One of petitioner’s predecessors-in-interest, Emilia Amadure, testified that as early as her birth
in 1917, her family was already residing in Barangay Biluso, Silang, Cavite. Her father, Maximo
Amadure, was the properties’ previous owner. She was able to describe the lots’ metes and
bounds as well as the adjoining properties’ owners. She also testified that "the first time she
43
came to know aboutsaid lots was at the age of reason" at which time, she saw her father in
44
possession of the properties. By June 12, 1945, she was already 28 years old.Tax declarations
between 1948 to 1998 under Maximo’s name and other previous owners’ names were also
presented. 45
Maximo Amadure’s grandson, Rogelio Amadure, corroborated Emilia’s testimony. He testified

thathis grandfather owned and tilled the properties with his five children: Catalino, Dominador,
Margarita, Gregonia, and Emelia Amadure. They cultivated banana, corn, papaya, and palay
46
on the properties. Before the war, Rogelio’s father informed him that Maximo owned the
47
properties. Maximo’s children took possession of the properties after Maximo’s death.
48 49
Based on the testimonies, we can already deduce that petitioner’s predecessors-in-interest

had possessed the properties in the concept of an owner even earlier than 1945.
Petitioner was, therefore, able to prove all the requisites for the grant of an original registration
of title under our registration laws.
Respondent argues that although petitioner is a government-owned and -controlled

corporation, it cannot acquire title through acquisitive prescription. This argument is
unmeritorious. The type of corporation that petitioner is has nothing to do with the grant of its
application for original registration. Petitioner also acquired title to the property under Section
14(1) of the Property Registration Decree or Section 48(b) of the Public Land Act, and not
through acquisitive prescription.
If respondent’s argument stems from the Court of Appeals’ ruling that petitioner cannot acquire
title to the property because of Section 3, Article XII of the Constitution, which prohibits private
corporations from acquiring public land, respondent is, again, mistaken. The prohibition in
Section 3, Article XII of the Constitution applies only to private corporations. Petitioner is a
government corporation organized under Presidential Decree No. 361, as amended by
Presidential Decree No. 1656.
WHEREFORE, the petition is GRANTED. The Court of Appeals' decision of January 10, 2007
and resolution of October 5, 2007 are SET ASIDE. The July 28, 2001 trial court decision is
REINSTATED.
SO ORDERED.
MARVIC MARIO VICTOR F. LEONEN

Associate Justice
WE CONCUR:

Associate Justice
Chairperson
DIOSDADO M. PERLATA MARTIN S. VILLARAMA, JR.*

JOSE C. MENDOZA
Associate Justice
ATT E STATI O N
I attest that the conclusions in the above Decision had beeyreached in consultation before the

Associate Justice
Chairperson

Chief Justice
Footnotes
* Villarama, Jr., J., designated as Acting Member per Special Order No. 1691 dated
May 22, 2014 in view of the vacancy in the Third Division.
1
Rollo, p. 29.
2
Id.
3
Id. at 29–30.
4
Id. at 30.
5
Id.
6
Id. at 31.
7
Id.
8
Id.
9
Id. at 31 and 47.
10
Id. at 32.
11
Id. at 29–36.
12
Id. at 36.
13
Id. at 32.
14
Id.
15
Id. at 32–33.
16
Id. at 34–35.
17
Id. at 35.
18
Id.
19
Id. at 12.
20
Id. at 27–28.
21
Id. at 17.
22
23
552 Phil. 345 (2007) [Per J. Sandoval-Gutierrez, First Division].
24
Rollo, pp. 20–21.
25
Id. at 21–22.
26
Id. at 105–106.
27
Id. at 107–108.
28
Id. at 108.
29
Id. at 17.
30
Id. at 107–108.
31
32
Id. at 414.
33
498 Phil. 227 (2005) [Per J. Chico-Nazario, Second Division].
34
Id. at 245.
35
36
Id. at 269–270.
37
Id. at 269–270.
38
See J. Leonen’s concurring and dissenting opinion in Heirs of Mario Malabanan v.

39
Republic of the Philippines, G.R. No. 179987, September 3, 2013, 704 SCRA 561,
623–631 [Per J. Bersamin, En Banc].
40
Id.
41
Id.
42
Rollo, p. 108.
43
Id. at 40.
44
Id. at 41.
45
Id. at 41–42.
46
Id. at 41.
47
Id.
48
Id.
49
Id.
THIRD DIVISION
G.R. No. 202414 June 4, 2014
JOSEPHINE WEE, Petitioner,

vs.
FELICIDAD MARDO, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 assailing the June 26, 2012 Decision of
the Court of Appeals (CA), which reversed and set aside the September 4, 2009 Decision of
the Regional Trial Court, Branch XVIII, Tagaytay City, Cavite (RTC), granting petitioner's
"Application for Registration of Title."
Factual and Procedural Antecedents:
Respondent Felicidad Gonzales, married to Leopoldo Mardo, was granted a registered Free
Patent No. (IV-2) 15284, dated April 26, 1979, covering Lot No. 8348, situated in Puting Kahoy,
Silang, Cavite.
On February 1, 1993, respondent allegedly conveyed to petitioner, Josephine Wee, through a

Deed of Absolute Sale, a portion of Lot No. 8348 known as Lot No. 8348-B, for a consideration
1
of ₱250,000.00 which was fully paid. Respondent, however, refused to vacate and turn over
the subject property claiming that the alleged sale was falsified.
On December 22, 1994, petitioner filed an Application for Original Registration of a parcel of
land located at Barangay Putting Kahoy, Silang, Cavite, known as Lot No. 8349. Said
application was amended on September 19, 1996, this time covering a parcel of land known as
Lot 8348-B situated in Barangay Puting Kahoy, Silang, Cavite. Petitioner claimed that she is
the owner of the said unregistered land by virtue of a deed of absolute sale.
On September 19, 1997, respondent filed her Opposition to the Amended Application alleging
1] that she is the true and lawful owner of the parcel of land which is the subject of the
amended application; and 2] that petitioner’s deed of absolute sale is surreptitious.
On October 28, 2000, respondent filed a Motion to Dismiss the Application alleging that the
land described in the application was different from the land being claimed for titling. The
motion was, however, denied. A motion for reconsideration and second urgent motion for
reconsideration were subsequently filed by respondent, but both were denied by the RTC.
Thereafter, petitioner completed her presentation of evidence and filed a formal offer which
was admitted by the RTC.
On June 10, 2003, during the pendency of the case, respondent managed to register the land
in her name under Original Certificate of Title (OCT) No. OP-1840. Petitioner filed a Notice of
Lis Pendens with the Registry of Deeds of Cavite on May 10, 2005 which was annotated on
the title. A "Motion for Leave to File Supplemental Pleading and to Admit Attached
Supplemental Complaint for Reconveyance" was filed by petitioner which was denied by the
RTC on the ground that a motion for reconveyance was different from an application for
registration of title.
Consequently, respondent presented her own evidence, through the testimony of her counsel,
who testified that the parcel of land subject of the application for registration was the property
she bought ten (10) years ago. Respondent, however, did not state from whom she bought it.
As proof of her alleged ownership, she presented copies of tax declarations in the absence of
any deed of sale in her favor.
On September 4, 2009, the RTC rendered a Decision granting the application of petitioner.
2
The dispositive portion of said decision reads:
WHEREFORE, judgment is hereby rendered granting the applicant, Josephine Wee, as

qualified to register the subject land in her name, and the Administrator of LRA is hereby
directed to issue the corresponding decree in her name based on the plan and technical
description of said land as submitted by the applicant and the Register of Deeds of the
Province of Cavite to issue title in her name.
SO ORDERED.
A motion for reconsideration was filed by respondent which was denied by the RTC. Hence,
respondent appealed the decision before the CA, which case was docketed as CA-G.R. CV
No. 96934.
On June 26, 2012, the CA handed down a Judgment reversing and setting aside the RTC
3
decision. The decretal portion of the CA decision reads:
WHEREFORE, the appeal is GRANTED. The Decision, dated September 4, 2009, of the
Regional Trial Court (Branch XVIII) of Tagaytay City, Cavite, in LRC No. TG-647 is SET ASIDE.
Accordingly, applicant-appellee’s Application for Original Registration of a parcel of land

located at Barangay Putting Kahoy, Silang Cavite, known as Lot No. 8349, Cad. Lot 042118-
011719-D of Silang Cadastre, is hereby DENIED.
SO ORDERED.
The CA held, among others, that petitioner was not able to comply with the requirement of
possession and occupation under Sec. 14 (1) of P.D. No. 1529. Her admission that the subject
lot was not physically turned over to her due to some objections and oppositions to her title
suggested that she was not exercising any acts of dominion over the subject property, an
essential element in the requirement of possession and occupation contemplated under Sec.
14 (1) of P.D. No. 1529.
A copy of the decision was received by petitioner on July 2, 2012. On August 15, 2012,
petitioner filed this subject petition for review challenging the CA decision.
Hence, this petition.
In advocacy of her petition, petitioner assigns the following
ERRORS:
I.
The Court of Appeals gravely erred and ruled contrary to law in not finding that petitioner is
entitled to register the subject land under her name. Under the peculiar circumstances of this
case, wherein petitioner’s predecessor-in-interest unexpectedly and unjustifiably continued to
be in physical possession of the subject property after the sale thereof to petitioner, the latter
must be deemed to be in possession and occupation thereof through her predecessor-in-
interest. Under the Public Land Act and Presidential Decree No. 1529, the period of
possession of an applicant’s predecessor-in-interest benefits and is credited in favor of the
applicant.
II.
Moreover, petitioner was denied actual possession of the subject land by circumstances
amounting to a fortuitous event. By express provision of Sec. 48(b) of the Public Land Act,
such fortuitous event does not affect her vested right to register the property under her name.
III.
The Court of Appeals likewise seriously erred and ruled contrary to the law and to the evidence
in not finding that petitioner’s predecessor-in-interest, respondent Felicidad Mardo, had
possession and occupation of the subject parcel of land under a bona fide claim of ownership
since June 12, 1945, or earlier.
IV.
In view of the fact that the validity of the sale of the subject parcel of land to petitioner in 1993
was duly established before the trial court and affirmed by the Court of Appeals and
considering further that the registration of the said land under respondents name was
fraudulently secured, in order to avoid multiplicity of suits and to put an end to the long pending
dispute between the parties, the Court of Appeals should have ordered the reconveyance of
the subject parcel of land to the petitioner as its rightful owner.
Petitioner presents the theory that she must be deemed to have been in possession and
occupation of the subject property through respondent, her predecessor-in-interest, who after
the sale in 1993 and despite demands from her, unexpectedly and unjustifiably continued to
occupy the property and refused to turn over physical possession to her. Petitioner argues that
it is not necessary that the person in possession should himself be the occupant as the
occupancy can be held by another in his name.
Moreover, petitioner also seeks reconveyance of the subject property arguing that by virtue of
its fraudulent registration, respondent became a trustee of an implied trust for her benefit, as its
real owner, having validly acquired the same from respondent through an absolute deed of
sale.
The petition deserves no merit.
P.D. 1529, otherwise known as Property Registration Decree, governs the original registration
proceedings of unregistered land. The subject application for original registration was filed
pursuant to Sec. 14(1) of PD 1529, which provides the condition necessary for registration.
Thus:
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
earlier.(Emphasis supplied)
Based on these legal parameters, applicants for registration of title under Section 14(1) must
sufficiently establish: (1) that the subject land forms part of the disposable and alienable lands
of the public domain; (2) that the applicant and his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of the same; and (3) that it is
under a bona fide claim of ownership since June 12, 1945 or earlier. 4
The CA denied the application on the issue of open, continuous, exclusive, and notorious
possession and occupation of the subject land. It was of the view that she could not have
complied with the requirement of possession and occupation under Sec. 14 (1) of P.D. No.
1529 considering that she had admitted that it was not physically turned over to her. As she
was not in actual and physical possession, she could not have exercised any acts of dominion
over the subject property which was essential to the requirement of possession and occupation
contemplated under Sec. 14 (1) of P.D. No. 1529.
A more important consideration, however, is that the subject land is already registered under
OCT No. OP-1840 (Patent No. 042118-03-6111) of the Registry of Deeds of Cavite, under the
name of respondent Felicidad Gonzales.
In the case of Republic vs. Umali, this Court ruled that once a patent is registered and the
5
corresponding certificate of title is issued, the land ceases to be part of public domain and
becomes private property over which the Director of Lands has neither control nor jurisdiction.
A public land patent, when registered in the corresponding Register of Deeds, is a veritable
Torrens title, and becomes as indefeasible upon the expiration of one (1) year from the date of
issuance thereof. Said title, like one issued pursuant to a judicial decree, is subject to review
within one (1) year from the date of the issuance of the patent. This rule is embodied in Section
103 of PD 1529, which provides that:
Section 103. Certificates of title pursuant 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. x x x After due registration and issuance of the certificate of
title, such land shall be deemed to be registered land to all intents and purposes under this
Decree. (Emphasis supplied)
Accordingly, respondent’s registered patent in the corresponding Registry of Deeds is a

veritable Torrens title and becomes as indefeasible as a Torrens title upon the expiration of one
(1) year from the date of its issuance. 6
For said reason, the order of the RTC directing the Administrator of LRA to issue a
corresponding decree in petitioner’s name is null and void. A land registration court has no
jurisdiction to order the registration of land already decreed in the name of another in an earlier
land registration case. A second decree for the same land would be null and void, since the
principle behind the original registration is to register a parcel of land only once. 7
Verily, once a title is registered, as a consequence either of judicial or administrative

proceedings, the owner may rest secure, without the necessity of waiting in the portals of the
court sitting in the mirador de su casa to avoid the possibility of losing his land. The certificate
8
of title cannot be defeated by adverse, open and notorious possession. Neither can it be
defeated by prescription. As provided under Sec. 47 of PD 1529, no title to registered land in
derogation of the title of the registered owner shall be acquired by prescription or adverse
possession.
A Certificate of Title Not

Subject to Collateral Attack
Petitioner argued that the rule on indefeasibility of title does not attach to titles secured by
fraud and misrepresentation. In this case, she alleged that the respondent fraudulently
registered the subject property under her name after she (respondent) had already sold a
portion thereof to her (petitioner). By virtue of the deed of sale, petitioner insists that she is
considered to be the real owner of the subject parcel of land.
The Court finds no merit in petitioner’s argument. It is settled in this jurisdiction that the issue of
the validity of title can only be assailed in an action expressly instituted for such purpose. A9
certificate of title cannot be attacked collaterally. This rule is provided under Section 48 of PD
1529 which states that:
SEC. 48. Certificate not subject to collateral attack. ― A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified, or canceled except in a direct proceeding in
accordance with law. (Emphasis supplied)
In Lagrosa v. Court of Appeals, it was stated that it is a well-known doctrine that the issue as
10
to whether title was procured by falsification or fraud as advanced by petitioner can only be
raised in an action expressly instituted for the purpose. A Torrens title can be attacked only for
fraud, within one year after the date of the issuance of the decree of registration. Such attack
must be direct, and not by a collateral proceeding. The title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.
In this case, the petitioner is contesting the indefeasibility of title on the ground of fraud and
misrepresentation. Applying the abovementioned doctrine, even assuming that the petitioner’s
allegations are true, the same are considered as collateral attacks, and such must be raised in
an action expressly instituted for such purpose and in a proper proceeding.
Thus, in Carvajal v. Court of Appeals, it was ruled that an application for registration of an
11
already titled land constitutes a collateral attack on the existing title. The title may be
challenged only in a proceeding for that purpose, not in an application for registration of a land
already registered in the name of another person. After one year from its registration, the title is
incontrovertible and is no longer open to review.
Remedy of the petitioner is to file a separate proceeding such as an action for specific
performance or for reconveyance
Petitioner further argues that considering the registration of the said land under respondent’s
name was fraudulently secured, in order to avoid multiplicity of suits and to put an end to the
long pending dispute between the parties, the courts below should have ordered the
reconveyance of the subject land to her as its rightful owner.
Petitioner advances the theory that by virtue of the fraudulent registration of a subject property,
respondent is a trustee of an implied trust for her benefit, being the real owner of the subject
property, as she had validly acquired the same from respondent through an absolute deed of
sale.
Petitioner’s argument fails to persuade. The issue of fraudulent alienation raised in the second
application for registration of the subject property is collateral attack which should be directly
raised in a separate proceeding filed for such purpose. It cannot be entertained in this
proceeding. In several cases, the Court has ruled that an attack is indirect or collateral when, in
an action to obtain a different relief, an attack on the judgment or proceeding is nevertheless
made as an incident thereof. 12
The RTC was, thus, correct in denying petitioner’s "Motion for Leave to File Supplemental
Pleading and to Admit Attached Supplemental Complaint For Reconveyance." Allowing it would
not have been permissible because the application for original registration of title over a parcel
of land already registered is a collateral attack itself. It is settled that an application for
registration of a parcel of land already covered by a Torrens title is actually a collateral attack,
not permitted under the principle of indefeasibility of a Torrens title.
13
Registration, however, does not deprive an aggrieved party of a remedy in law. What cannot be
collaterally attacked is the certificate of title and not the title or ownership which is represented
by such certificate. Ownership is different from a certificate of title. The fact that a person was
able to secure a title in his name did not operate to vest ownership upon him of the subject
land. Registration of a piece of land under the Torrens System does not create or vest title,
because it is not a mode of acquiring ownership.
A certificate of title is merely an evidence of ownership or title over the particular property
described therein. It cannot be used to protect a usurper from the true owner; nor can it be
1âwphi1
used as a shield for the commission of fraud: neither does it permit one to enrich himself at the
expense of others. Its issuance in favor of a particular person does not foreclose the possibility
that the real prope1iy may be co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered owner. 14
The remedy of the petitioner is to file a separate proceeding or action to protect her alleged
interest. As she claimed that she bought the subject property for value from the respondent as
evidenced by a deed of sale, she can file an action for specific performance to compel the
respondent to comply with her obligation in the alleged deed of sale and/or an action for
reconveyance of the property. She can also file an action for rescission. Needless to state,
petitioner must prove her entitlement because the respondent claims that the sale was
falsified.
Reconveyance is based on Section 55 of Act No. 496, as amended by Act No. 3322, which
states that in all cases of registration procured by fraud the owner may pursue all his legal and
equitable remedies against the parties to such fraud, without prejudice, however, to the rights
of any innocent holder for value of a certificate of title. It is an action in personam available to
15
a person whose property has been wrongfully registered under the Torrens system in another's
name. It does not seek to set aside the decree but, respecting it as incontrovertible and no
16
longer open to review, seeks to transfer or reconvey the land from the registered owner to the
rightful owner. Reconveyance is always available as long as the property has not passed to
17
an innocent third person for value. 18
WHEREFORE, the petition is hereby DENIED, without prejudice to any remedial action by the
petitioner to protect her claimed interest.
SO ORDERED.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:

Associate Justice
DIOSDADO M. PERALTA MARTIN S. VILLARAMA, JR.*


Associate Justice
ATT E STATI O N
case was assigned to the writer of the opinion or the Court's Division.
Associate Justice
Pursuant to Section 13, A1iicle VIII of the Constitution and the Division Chairperson's

Chief Justice
Footnotes
* Designated Acting Member in view of the vacancy in the Third Division. per Special
Order No. 1691 dated May 22, 2014.
1
Rollo, p. 54.
2
Id. at 145; penned by Acting Presiding Judge Emma S. Young.
3
Id. at 15; penned by Associate Justice Jose C. Reyes,Jr., and concurred by Associate
Justice Priscilla J. Baltazar-Padilla and Associate Justice Agnes Reyes-Carpio
4
Republic v. Manimtim, G.R. No. 169599, March 16, 2011, 645 SCRA 520, 533-534.
5
253 Phil. 732 (1989).
6
The Director of Lands v. De Luna, 110 Phil. 32 (1960).
7
Spouses Laburada v. Land Registration Authority, 350 Phil. 779, 790-791 (1998).
8
Salao, et al. v. Salao, 162 Phil. 116 (1976).
9
Ingusanl, Miguel v. Heirs of Aureliano I. Reyes, 558 Phil. 60 (2007), citing Caraan v.
Court of Appeals, 551 Phil. 172 (2005); and Spouses Apostol v. Court of Appeals, 476
Phil. 414 (2004).
10
Lagrosa v. Court of Appeals, 371 Phil. 238 (1999).
11
345 Phil. 592 (1997).
12
Sampaco v. Lantud, G.R. No. 163551, July 18, 2011, 654 SCRA 54.
13
Fil-Estate Management v. Trono,518 Phil. 8, 14-15 (2006).
14
Naval v. Court of Appeals, 518 Phil. 271, 282-283 (2006).
15
Heirs of Lopez, Sr., v. Hon. Enriquez. 490 Phil. 89 (2005).
16
Pacete v. Asotigue, G.R. No. 188575, December 10, 2012, 687 SCRA 580.
Director of Lands v. Register of Deeds, G.R. No. L-4463, March 24, 1953, 92 SCRA
17
831.
18
Heirs of Eugenio Lopez, Sr. v. Hon. Alfredo Enriquez, 490 Phil. 90 (2005).
THIRD DIVISION
G.R. No. 185092 June 4, 2014

vs.
CORAZON C. SESE and FE C. SESE, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner
Republic of the Philippines, represented by the Office of the Solicitor General (OSGJ, assailing
the November 21, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 81439,
1
which dismissed its appeal and affirmed the October 3, 2003 Decision of the Municipal Trial
2
Court of Pulilan, Bulacan (MTC), in LRC Case No. 026.
Factual and Procedural Antecedents:
Records show that on September 17, 2002, Corazon C. Sese and Fe C. Sese (respondents)
filed with the MTC an application for original registration of land over a parcel of land with an
area of 10, 792 square meters, situated in Barangay Sto. Cristo, Municipality of Pulilan,
Province of Bulacan, and more particularly described as Lot 11247, Cad. 345, Pulilan
Cadastre, under Plan No. AP-03-004226.
Respondents alleged that on July 22, 1972, they acquired, through a donation inter vivos from
their mother, Resurreccion L. Castro (Resurreccion), the subject agricultural land; that they,
through their predecessors-in-interest, had been in possession of the subject property; and that
the property was not within a reservation.
In support of their application, respondents submitted the following documents, namely: (1) Tax
Declaration No. 99-19015-01557 "in the name of Corazon Sese and Fe Sese, minor,
representing their mother Resurreccion Castro, as her Natural Guardian"; (2) Certificate of
Technical Description which was approved on December 10, 1998 by the Land Management
Service, Region III, of the Department of Environment and Natural Resources (DENR); (3)
Certification in lieu of lost Surveyor’s Certificate issued by the same authority; (4) Official
Receipt of payment of real property tax over the subject property; (5) Certification from the
Office of the Municipal Treasurer of Pulilan, stating that the registered owners of a property
under Tax Declaration No. 99-19-015-01557 were Corazon Sese and others; and (6) Survey
plan of Lot 11247, CAD 345,Pulilan Cadastre, approved by the Regional Technical Director of
the Land Management Service, Region III, of the DENR, stating that the land subject of the
survey was alienable and disposable land, and as certified to by the Bureau of Forestry on
March 1, 1927, was outside of any civil or military reservation. On the lower portion of the plan,
there was a note stating that a deed of absolute sale over the subject property was executed
by a certain Luis Santos and Fermina Santos (the Santoses) in favor of Resurreccion on
October 4, 1950.
On the lower portion of the survey plan, a note stated, among others, that: "This survey is
inside the alienable and disposable area as per Project No. 20 LC Map No. 637 certified by the
Bureau of Forestry on March 1, 1927. It is outside any civil or military reservation." The said
plan was approved by the DENR, Land Management Services, Regional Office III, San
Fernando, Pampanga, on December 3, 1998.
Finding the application sufficient in form and substance, the MTC issued the Order, dated
October 10, 2002, setting the case for hearing with the corresponding publication. After
compliance with all the requirements of the law regarding publication, mailing and posting,
hearing on the merits of the application followed.
During the trial on June 4, 2003, respondent Corazon C. Sese (Corazon) testified on their
claim over the subject lot. Thereafter, respondents submitted their formal offer of evidence,
after which the evidence offered were admitted by the MTC in the Order, dated July 10, 2003,
without objection from the public prosecutor.
The OSG did not present any evidence to oppose the application.
On October 3, 2003, the MTC rendered its Decision, ordering the registration of the subject
3
property in the name of respondents. The dispositive portion of the decision reads:
WHEREFORE, finding the instant application to be sufficient in form and substance and the
applicants having established their right of ownership over the subject parcel of land and are
therefore entitled to registration thereof, the Court thereby grants the petition.
Accordingly, the Court hereby orders the registration of the parcel of land subject matter of this
petition which is more particularly described in Plan Ap-03-004226 Pulilan Cadastre and in
their corresponding technical descriptions in the name of Resureccion Castro.
Upon this decision becoming final, let an Order for the decree be issued.
SO ORDERED.
The MTC reasoned out that there was evidence to show that the subject lots had been in open,
continuous, adverse, and public possession, either by the applicants themselves or their
predecessor-in-interest. Such possession since time immemorial conferred an effective title on
the applicants, whereby the land ceased to be public and became private property. It had been
the accepted norm that open, adverse and continuous possession for at least 30 years was
sufficient. The MTC noted that evidence showed that the parcel of land involved was not
covered by land patent or a public land application as certified to by the Community
Environment and Natural Resources of Tabang, Guiguinto, Bulacan. Moreover, it added that
the technical descriptions of Lot 11247 were prepared and secured from the Land Management
Sector, DENR, Region III, San Fernando, Pampanga, and were verified and found to be
correct by Eriberto Almazan, In-Charge of the Regional Survey Division.
On December 19, 2003, the OSG interposed an appeal with the CA, docketed as CA-GR. CV
No. 81439. In its brief, the OSG presented the following assignment of errors: a) only alienable
4
lands of the public domain occupied and possessed in concept of owner for a period of at least
thirty (30) years is entitled to confirmation of title; and b) respondents failed to prove specific
acts of possession.
The OSG argued that there was no proof that the subject property was already segregated
from inalienable lands of the public domain. Verily, it was only from the date of declaration of
such lands as alienable and disposable that the period for counting the statutory requirement
of possession would start.
Also, there was absolutely no proof of respondents’ supposed possession of the subject
property. Save for the testimony of Corazon that "at present, the worker of (her) mother is
occupying the subject property," there was no evidence that respondents were actually
occupying the subject tract of land or that they had introduced improvement thereon.
On November 21, 2007, the CA rendered a Decision affirming the judgment of the MTC
5
ordering the registration of the subject property in the name of respondents. The decretal
portion of which reads:
WHEREFORE, the appeal is DISMISSED. The assailed decision dated October 3, 2003 of the
MTC of Pulilan, Bulacan, in LRC Case No. 026 is AFFIRMED.
SO ORDERED.
The CA reasoned out, among others, that the approved survey plan of the subject property
with an annotation, stating that the subject property was alienable and disposable land, was a
public document, having been issued by the DENR, a competent authority. Its contents were
prima facie evidence of the facts stated therein. Thus, the evidence was sufficient to establish
that the subject property was indeed alienable and disposable.
With respect to the second issue, the CA was of the view that the doctrine of constructive
possession was applicable. Respondents acquired the subject property through a donation
inter vivos executed on July 22, 1972 from their mother. The latter acquired the said property
from the Santoses on October 4, 1950 by virtue of a deed of absolute sale. Further, respondent
Corazon testified that a small hut was built on the said land, which was occupied by the worker
of her mother. Moreover, neither the public prosecutor nor any private individual appeared to
oppose the application for registration of the subject property.
The CA also stated that respondents’ claim of possession over the subject property was
buttressed by the Tax Declaration No. 99-19015-01557 "in the name of Corazon Sese and Fe
Sese, minor, representing their mother Resurreccion Castro, as her Natural Guardian"; the
official receipt of payment of real property tax over the subject property; and the certificate from
the Office of the Municipal Treasurer of Pulilan, stating that the registered owner of a property
under Tax Declaration No. 99-19015-01557 were respondents.
The CA added that although tax declaration or realty tax payments of property were not
conclusive evidence of ownership, nevertheless, they were good indicia of possession in the
concept of owner.
Hence, the OSG filed this petition.
ISSUES
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN RULING THAT THE

APPROVED SURVEY PLAN IDENTIFIED BY ONE OF THE RESPONDENTS IS PROOF
THAT THE SUBJECT LAND IS ALIENABLE AND DISPOSABLE.
II
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN GRANTING THE

APPLICATION FOR REGISTRATION.
The OSG argues that unless a piece of land is shown to have been classified as alienable and
disposable, it remains part of the inalienable land of the public domain. In the present case, the
CA relied on the approved survey indicating that the survey was inside alienable and
disposable land. It is well-settled, however, that such notation does not suffice to prove that the
land sought to be registered is alienable and disposable. What respondents should have done
was to show that the DENR Secretary had approved the land classification and released the
land of the public domain as alienable and disposable, and that the land subject of the
application for registration fell within the approved area per verification through survey by the
PENRO or CENRO. In addition, they should have adduced a copy of the original classification
approved by the DENR Secretary and certified as a true copy by the legal custodian of the
official records.
To bolster its argument, the OSG cites the case of Republic of the Philippine v. T.A.N.
Properties, Inc., where the Court stated that the trial court should not have accepted the
6
contents of the certifications as proof of the facts stated therein. Even if the certifications are
presumed duly issued and admissible in evidence, they have no probative value in establishing
that the land is alienable and disposable. Such government certifications do not, by their mere
issuance, prove the facts stated therein. As such, the certifications are prima facie evidence of
their due execution and date of issuance but they do not constitute prima facie evidence of the
facts stated therein.
With respect to the second assignment of error, the OSG argues that respondents failed to
present specific acts of ownership to prove open, continuous, exclusive, notorious, and
adverse possession in the concept of an owner. Facts constituting possession must be duly
established by competent evidence. As to the tax declaration adduced by respondents, it
cannot be said that it clearly manifested their adverse claim on the property. If respondents
genuinely and consistently believed their claim of ownership, they should have regularly
complied with their real estate obligations from the start of their supposed occupation.
Position of Respondents
On the other hand, respondents assert that the CA correctly found that the subject land was
alienable and disposable. The approved survey plan of the subject property with an annotation,
stating that the subject property is alienable and disposable land, is a public document, having
been issued by the DENR, a competent authority. Its contents are prima facie evidence of the
facts stated therein and are sufficient to establish that the subject property is indeed alienable
and disposable.
Respondents cite the case of Republic v. Serrano, where the Court stated that a DENR
7
Regional Technical Director’s certification, which was annotated on the subdivision plan
submitted in evidence, constituted substantial compliance with the legal requirement. The
DENR certification enjoyed the presumption of regularity absent any evidence to the contrary.
Anent the second assignment of error, respondents contend that the CA correctly applied the
doctrine of constructive possession because they acquired the subject land from their mother,
Resurreccion, through a donation inter vivos, dated July 22, 1972.Their mother, in turn,
acquired the subject land from the Santoses on October 4, 1950 by virtue of an absolute sale.
They claim that a small hut was built in the said land and was occupied by a worker of her
mother. They countered that although tax declarations or realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner, for no one in his right mind would be paying taxes for a property which is not
in his actual or constructive custody.
The vital issue to be resolved by the Court is whether respondents are entitled to the
registration of land title under Section 14(1) of Presidential Decree (P.D.)No. 1529, or pursuant
to Section 14(2) of the same statute. Section 14(1) of P.D. No. 1529 in relation to Section 48(b)
of Commonwealth Act No. 141, as amended by Section 4 of P.D. No. 1073, provides:
8 9
SECTION 14. Who may apply. — The following persons may file in the proper Court of First
(1) Those who by themselves or through their predecessors in-interest have been in open,
earlier.
xxxx
Section 48. The following described citizens of the Philippines, occupying lands of the public
been perfected or completed, may apply to the Court of First Instance now Regional Trial Court
of the province where the land is located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or
earlier, immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
Based on the above-quoted provisions, applicants for registration of land title must establish
and prove: (1) that the subject land forms part of the disposable and alienable lands of the
public domain; (2) that the applicant and his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of the same; and (3) that it is
under a bona fide claim of ownership since June 12, 1945, or earlier. Compliance with the
10
foregoing requirements is indispensable for an application for registration of land title, under
Section 14(1) of P.D. No. 1529, to validly prosper. The absence of any one requisite renders
the application for registration substantially defective.
Anent the first requisite, respondents presented evidence to establish the disposable and
alienable character of the subject land through a survey plan, where on its lower portion, a note
stated, among others, as follows: "This survey is inside the alienable and disposable area as
per Project No. 20 LC Map No. 637 certified by the Bureau of Forestry on March 1, 1927. It is
outside any civil or military reservation." The said plan was approved by the DENR, Land
Management Services, Regional Office III, San Fernando, Pampanga on December 3, 1998.
The annotation in the survey plan, however, fell short of the requirement of the law in proving
its disposable and alienable character.
In Republic v. Espinosa, citing Republic v. Sarmiento and Menguito v. Republic, the Court
11 12 13
reiterated the rule that that a notation made by a surveyor-geodetic engineer that the property
surveyed was alienable and disposable was not the positive government act that would
remove the property from the inalienable domain and neither was it the evidence accepted as
sufficient to controvert the presumption that the property was inalienable. Thus:
To discharge the onus, respondent relies on the blue print Copy of the conversion and
subdivision plan approved by the DENR Center which bears the notation of the surveyor-
geodetic engineer that "this survey is inside the alienable and disposable area, Project No. 27-
B. L.C. Map No. 2623, certified on January 3, 1968 by the Bureau of Forestry."
Menguito v. Republic teaches, however, that reliance on such annotation to prove that the lot is
alienable is insufficient and does not constitute incontrovertible evidence to overcome the
presumption that it remains part of the inalienable public domain.
"To prove that the land in question formed part of the alienable and disposable lands of the
public domain, petitioners relied on the printed words which read: ‘This survey plan is inside
Alienable and Disposable Land Area, Project No. 27-B as per L.C. Map No. 2623, certified by
the Bureau of Forestry on January 3, 1968,’ appearing on Exhibit "E" (Survey Plan No. Swo-
13-000227).
This proof is not sufficient. Section 2, Article XII of the 1987 Constitution, provides: "All lands of
the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State..."
For the original registration of title, the applicant (petitioners in this case) must overcome the
presumption that the land sought to be registered forms part of the public domain. Unless
public land is shown to have been reclassified or alienated to a private person by the State, it
remains part of the inalienable public domain. Indeed, "occupation thereof in the concept of
owner, no matter how long, cannot ripen into ownership and be registered as a title." To
overcome such presumption, incontrovertible evidence must be shown by the applicant.
Absent such evidence, the land sought to be registered remains inalienable.
In the present case, petitioners cite a surveyor geodetic engineer’s notation in Exhibit "E"
indicating that the survey was inside alienable and disposable land. Such notation does not
constitute a positive government act validly changing the classification of the land in question.
Verily, a mere surveyor has no authority to reclassify lands of the public domain. By relying
solely on the said surveyor’s assertion, petitioners have not sufficiently proven that the land in
question has been declared alienable." (Citations omitted and emphases supplied)
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. To overcome this
presumption, incontrovertible evidence must be established that the land subject of the
application (or claim) is alienable or disposable. 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; or a legislative act
or a statute. 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. 14
Republic v. T.A.N. Properties, Inc. declared that a CENRO certification was insufficient to
15
prove the alienable and disposable character of the land sought to be registered. The applicant
must also show sufficient proof that the DENR Secretary approved the land classification and
released the land in question as alienable and disposable.
Thus, the present rule is that an application for original registration must be accompanied by
(1) a CENRO or PENRO Certification; and (2) a copy of the original classification approved by
the DENR Secretary and certified as a true copy by the legal custodian of the official records. 16
Here, the only evidence presented by respondents to prove the disposable and alienable
character of the subject land was an annotation by a geodetic engineer in a survey plan.
Although this was certified by the DENR, it clearly falls short of the requirements for original
registration.
With regard to the third requisite, it must be shown that the possession and occupation of a
parcel of land by the applicant, by himself or through his predecessors-in-interest, started on
June 12, 1945 or earlier. A mere showing of possession and occupation for 30 years or more,
17
by itself, is not sufficient. 18
In this regard, respondents likewise failed. As the records and pleadings of this case will
reveal, the earliest that respondents and their predecessor-in-interest can trace back
possession and occupation of the subject land was only in the year 1950,when their mother,
Resurreccion, acquired the subject land from the Santoses on October 4, 1950 by virtue of an
absolute sale. Evidently, their possession of the subject property commenced roughly five (5)
years beyond June 12, 1945, the reckoning date expressly provided under Section 14(1) of
P.D. No. 1529. Thus, their application for registration of land title was legally infirm.
The respondents cannot invoke Section 14 (2) of P.D. No. 1529 which provides:
SEC. 14. Who may apply. – The following persons may file in the proper Court of First Instance
xxxx
(2) Those who have acquired ownership of private lands by prescription under the provisions of
existing laws. The case of Malabanan v. Republic gives a definitive clarity to the applicability
1avvphi1
19
and scope of original registration proceedings under Section 14(2) of the Property Registration
Decree. In the said case, the Court laid down the following rules:
We synthesize the doctrines laid down in this case, as follows:
xxxx
(2) In complying with Section 14(2) of the Property Registration Decree, consider that under
the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial
property. However, public domain lands become only patrimonial property not only with a
declaration that these are alienable or disposable. There must also be an express government
manifestation that the property is already patrimonial or no longer retained for public service or
the development of national wealth, under Article 422 of the Civil Code. And only when the
property has become patrimonial can the prescriptive period for the acquisition of property of
the public dominion begin to run.
(a) Patrimonial property is private property of the government. The person

acquires ownership of patrimonial property by prescription under the Civil Code
is entitled to secure registration thereof under Section 14(2) of the Property
Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be
acquired, one ordinary and other extraordinary. Under ordinary acquisitive
prescription, a person acquires ownership of a patrimonial property through
possession for at least ten (10) years, in good faith and with just title. Under
extraordinary acquisitive prescription, a person’s uninterrupted adverse
possession of patrimonial property for at least thirty (30) years, regardless of
good faith or just title, ripens into ownership. (Emphasis supplied)
property, even if classified as alienable or disposable, remains property of the public dominion,
pursuant to Article 420(2), and, thus, incapable of acquisition by prescription. It is only when
such alienable and disposable lands are expressly declared by the State to be no longer
intended for public service or for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly
enacted by Congress or a Presidential Proclamation in cases where the President is duly
authorized by law. 20
Thus, under Section 14(2) of P.D. No. 1529, for acquisitive prescription to commence and
operate against the State, the classification of land as alienable and disposable alone is not
sufficient. The applicant must be able to show that the State, in addition to the said
classification, expressly declared through either a law enacted by Congress or a proclamation
issued by the President that the subject land is no longer retained for public service or the
development of the national wealth or that the property has been converted into patrimonial.
Consequently, without an express declaration by the State, the land remains to be a property of
public dominion and, hence, not susceptible to acquisition by virtue of prescription. The 21
classification of the subject property as alienable and disposable land of the public domain
does not change its status as property of the public dominion under Article 420(2) of the Civil
Code. It is still insusceptible to acquisition by prescription. 22
For the above reasons, the respondents cannot avail of either Section 14 (1) or 14 (2) of P.O.
No. 1529. Under Section 14 (1), respondents failed to prove (a) that the property is alienable
and disposable; and (b) that their possession of the property dated back to June 12, 1945 or
earlier. Failing to prove the alienable and disposable nature of the subject land, respondents all
the more cannot apply for registration by way of prescription pursuant to Section 14 (2) which
requires possession for 30 years to acquire or take. Not only did respondents need to prove
the classification of the subject land as alienable and disposable, but also to show that it has
been converted into patrimonial. As to whether respondents were able to prove that their
possession and occupation were of the character prescribed by law, the resolution of this issue
has been rendered unnecessary by the foregoing considerations.
In fine, the Court holds that the ruling of the CA lacks sufficient factual or legal
justification. Hence, the Court is constrained to reverse the assailed CA decision and
1âwphi1
resolution and deny the application for registration of land title of respondents.
WHEREFORE, the petition is GRANTED. The November 21, 2007 Decision and the October
8, 2008 Resolution of the Court of Appeals, in CA-G.R. CV No. 81439, are REVERSED and
SET ASIDE. Accordingly, the Application for Registration of Title of Respondents Corazon C.
Sese and Fe C. Sese in Land Registration Case No. 026 is DENIED.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:

Associate Justice
Chairperson
DIOSDADO M. PERALTA MARTIN S. VILLARAMA, JR.*

Concur subject to my separate opinion in Heirs of Malabanan v. Republic, GR 179987 (2013)

Associate Justice
ATT E STATI O N
case was assigned to the writer of the opinion or the Court's Division.

Associate Justice
Pursuant to Section 13, A1iicle VIII of the Constitution and the Division Chairperson's

Chief Justice
Footnotes
* Designated Acting Member in view of the vacancy in the Third Division. per Special
Order No. 1691 elated May 22. 2014.
1
Rollo. pp. 26-33, Penned by Associate Justice Hakim S. Abdulwahid and Associate
Justice Rodrigo V. Cosico and Associate Justice Arturo G. Tayag, concurring
2
Id. at 40-45. Penned by Hon. Horacio T. Viola. Jr.
3
Id. at 26-40.
4
Id. at 50.
5
Id. at 26-33.
6
578 Phil. 441 (2008).
7
G.R. No. 183063, February 4, 2010.
8
Public Land Act.
9
Extending the Period of Filing Applications for Administrative Legalization (Free
Patent) and Judicial Confirmation of Imperfect and Incomplete Titles to Alienable and
Disposable Lands in the Public Domain under Chapter vii and Chapter viii of
Commonwealth Act No. 141, As Amended, For Eleven (11) years commencing January
1, 1977.
10
Republic v. Aboitiz, G.R. No. 174626, October 23, 2013.
11
G.R. No. 171514, July 18, 2012, 677 SCRA 92, 108–109.
12
547 Phil. 157, 166–167 (2007).
13
401 Phil. 274, 287-288 (2000).
Secretary of the Department of Environment and Natural Resources v. Yap, 589 Phil.
14
156, 182–183 (2008).
15
Supra note 6, at 451–452.
Republic v. Bantigue Point Development Corporation, G. R. No. 162322, March 14,

16
2012, 668 SCRA 158, 171.
17
Malabanan v. Republic, 605 Phil. 244, 279 (2009).
18
Republic v. Tsai, 608 Phil. 224, 234 (2009).
19
Supra note 17, at 284–286.
20
Supra note 17.
21
Republic v. Aboitiz, supra note 10.
22
Malabanan v. Republic, supra note 17 at 286.
FIRST DIVISION
G.R. No. 186639 February 5, 2014

vs.
EMMANUEL C. CORTEZ, Respondent.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
1
seeking to annul and set aside the Decision dated February 17, 2009 of the Court of Appeals
2
(CA) in CA-G.R. CV No. 87505. The CA affirmed the Decision dated February 7, 2006 of the
3
Regional Trial Court (RTC) of Pasig City, Branch 68, in LRC Case No. N-11496.
The Facts
On February 28, 2003, respondent Emmanuel C. Cortez (Cortez) filed with the RTC an
application for judicial confirmation of title over a parcel of land located at Barangay
4
(Poblacion) Aguho, P. Herrera Street, Pateros, Metro Manila. The said parcel of land has an
area of 110 square meters and more particularly described as Lot No. 2697-B of the Pateros
Cadastre. In support of his application, Cortez submitted, inter alia, the following documents:
(1) tax declarations for various years from 1966 until 2005; (2) survey plan of the property, with
the annotation that the property is classified as alienable and disposable; (3) technical
description of the property, with a certification issued by a geodetic engineer; (4) tax clearance
certificate; (5) extrajudicial settlement of estate dated March 21, 1998, conveying the subject
property to Cortez; and (6) escritura de particion extrajudicial dated July 19, 1946, allocating
the subject property to Felicisima Cotas – Cortez’ mother.
As there was no opposition, the RTC issued an Order of General Default and Cortez was
allowed to present his evidence ex-parte.
Cortez claimed that the subject parcel of land is a portion of Lot No. 2697, which was declared
for taxation purposes in the name of his mother. He alleged that Lot No. 2697 was inherited by
his mother from her parents in 1946; that, on March 21, 1998, after his parents died, he and his
siblings executed an Extra-Judicial Settlement of Estate over the properties of their deceased
parents and one of the properties allocated to him was the subject property. He alleged that the
subject property had been in the possession of his family since time immemorial; that the
subject parcel of land is not part of the reservation of the Department of Environment and
Natural Resources (DENR) and is, in fact, classified as alienable and disposable by the Bureau
of Forest Development (BFD).
Cortez likewise adduced in evidence the testimony of Ernesto Santos, who testified that he has
known the family of Cortez for over sixty (60) years and that Cortez and his predecessors-in-
interest have been in possession of the subject property since he came to know them.
On February 7, 2006, the RTC rendered a Decision, which granted Cortez’ application for
5
registration, viz:
WHEREFORE, finding the application meritorious, the Court DECLARES, CONFIRMS, and
ORDERS the registration of the applicant’s title thereto.
As soon as this Decision shall have become final and after payment of the required fees, let
the corresponding Decrees be issued in the name of the applicant, Emmanuel C. Cortez.
Let copies of this Decision be furnished the Office of the Solicitor General, Land Registration
Authority, Land Management Bureau, and the Registry of Deeds of Rizal.
SO ORDERED. 6
In granting Cortez’ application for registration of title to the subject property, the RTC made the
following ratiocinations:
From the foregoing, the Court finds that there is sufficient basis to grant the relief prayed for. It
having been established by competent evidence that the possession of the land being applied
for by the applicant and his predecessor-in-interest have been in open, actual, uninterrupted,
and adverse possession, under claim of title and in the concept of owners, all within the time
prescribed by law, the title of the applicant should be and must be AFFIRMED and
CONFIRMED. 7
The Republic of the Philippines (petitioner), represented by the Office of the Solicitor General,
appealed to the CA, alleging that the RTC erred in granting the application for registration
despite the failure of Cortez to comply with the requirements for original registration of title. The
petitioner pointed out that, although Cortez declared that he and his predecessors-in-interest
were in possession of the subject parcel of land since time immemorial, no document was ever
presented that would establish his predecessors-in-interest’s possession of the same during
the period required by law. That petitioner claimed that Cortez’ assertion that he and his
predecessors-in-interest had been in open, adverse, and continuous possession of the subject
property for more than thirty (30) years does not constitute well-neigh incontrovertible evidence
required in land registration cases; that it is a mere claim, which should not have been given
weight by the RTC.
Further, the petitioner alleged that there was no certification from any government agency that
the subject property had already been declared alienable and disposable. As such, the
petitioner claims, Cortez’ possession of the subject property, no matter how long, cannot confer
ownership or possessory rights.
On February 17, 2009, the CA, by way of the assailed Decision, dismissed the petitioner’s
8
appeal and affirmed the RTC Decision dated February 7, 2006. The CA ruled that Cortez was
able to prove that the subject property was indeed alienable and disposable, as evidenced by
the declaration/notation from the BFD.
Further, the CA found that Cortez and his predecessors-in-interest had been in open,
continuous, and exclusive possession of the subject property for more than 30 years, which,
under Section 14(2) of Presidential Decree (P.D.) No. 1529 , sufficed to convert it to private
9
property. Thus:
It has been settled that properties classified as alienable and disposable land may be
converted into private property by reason of open, continuous and exclusive possession of at
least 30 years. Such property now falls within the contemplation of "private lands" under
Section 14(2) of PD 1529, over which title by prescription can be acquired. Thus, under the
second paragraph of Section 14 of PD 1529, those who are in possession of alienable and
disposable land, and whose possession has been characterized as open, continuous and
exclusive for 30 years or more, may have the right to register their title to such land despite the
fact that their possession of the land commenced only after 12 June 1945. x x x
xxxx
While it is significant to note that applicant-appellee’s possession of the subject property can
be traced from his mother’s possession of the same, the records, indeed, show that his
possession of the subject property, following Section 14(2) [of PD 1529], is to be reckoned from
January 3, 1968, when the subject property was declared alienable and disposable and not
way back in 1946, the year when he inherited the same from his mother. At any rate, at the
time the application for registration was filed in 2003, there was already sufficient compliance
with the requirement of possession. His possession of the subject property has been
characterized as open, continuous, exclusive and notorious possession and occupation in the
concept of an owner. (Citations omitted)
10
Hence, the instant petition.
The Issue
The sole issue to be resolved by the Court is whether the CA erred in affirming the RTC
Decision dated February 7, 2006, which granted the application for registration filed by Cortez.
At the outset, the Court notes that the RTC did not cite any specific provision of law under
which authority Cortez’ application for registration of title to the subject property was granted. In
granting the application for registration, the RTC merely stated that "the possession of the land
being applied for by [Cortez] and his predecessor-in-interest have been in open, actual,
uninterrupted, and adverse possession, under claim of title and in the concept of owners, all
within the time prescribed by law[.]" On the other hand, the CA assumed that Cortez’
11
application for registration was based on Section 14(2) of P.D. No. 1529. Nevertheless, Cortez,
in the application for registration he filed with the RTC, proffered that should the subject
property not be registrable under Section 14(2) of P.D. No. 1529, it could still be registered
under Section 48(b) of Commonwealth Act No. 141 (C.A. No. 141), or the Public Land Act, as
amended by P.D. No. 1073 in relation to Section 14(1) of P.D. No. 1529. Thus, the Court
12
deems it proper to discuss Cortez’ application for registration of title to the subject property vis-
à-vis the provisions of Section 14(1) and (2) of P.D. No. 1529.
Applicants for original registration of title to land must establish compliance with the provisions
of Section 14 of P.D. No. 1529, which pertinently provides that:
Sec. 14. Who may apply. The following persons may file in the proper Court of First Instance
(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.
(2) Those who have acquired ownership of private lands by prescription under the
provision of existing laws.
xxxx
After a careful scrutiny of the records of this case, the Court finds that Cortez failed to comply
with the legal requirements for the registration of the subject property under Section 14(1) and
(2) of P.D. No. 1529.
Section 14(1) of P.D. No. 1529 refers to the judicial confirmation of imperfect or incomplete
titles to public land acquired under Section 48(b) of C.A. No. 141, as amended by P.D. No.
1073. "Under Section 14(1) [of P.D. No. 1529], applicants for registration of title must
sufficiently establish first, that the subject land forms part of the disposable and alienable lands
of the public domain; second, that the applicant and his predecessors-in-interest have been in
open, continuous, exclusive, and notorious possession and occupation of the same; and third,
that it is under a bona fide claim of ownership since June 12, 1945, or earlier." 13
The first requirement was not satisfied in this case. To prove that the subject property forms
part of the alienable and disposable lands of the public domain, Cortez adduced in evidence a
survey plan Csd-00-000633 (conversion-subdivision plan of Lot 2697, MCadm 594-D, Pateros
14
Cadastral Mapping) prepared by Geodetic Engineer Oscar B. Fernandez and certified by the
Lands Management Bureau of the DENR. The said survey plan contained the following
annotation:
This survey is inside L.C. Map No. 2623, Project No. 29, classified as alienable & disposable
by the Bureau of Forest Development on Jan. 3, 1968.
However, Cortez’ reliance on the foregoing annotation in the survey plan is amiss; it does not
constitute incontrovertible evidence to overcome the presumption that the subject property
remains part of the inalienable public domain. In Republic of the Philippines v. Tri-Plus
Corporation, the Court clarified that, the applicant must at the very least submit a certification
15
from the proper government agency stating that the parcel of land subject of the application for
registration is indeed alienable and disposable, viz:
It must be stressed that incontrovertible evidence must be presented to establish that the land
subject of the application is alienable or disposable.
In the present case, the only evidence to prove the character of the subject lands as required
by law is the notation appearing in the Advance Plan stating in effect that the said properties
are alienable and disposable. However, this is hardly the kind of proof required by law. To
prove that the land subject of an application for registration is alienable, an applicant must
establish the existence of a positive act of the government such as a presidential proclamation
or an executive order, an administrative action, investigation reports of Bureau of Lands
investigators, and a legislative act or statute. The applicant may also secure a certification from
the Government that the lands applied for are alienable and disposable. In the case at bar,
while the Advance Plan bearing the notation was certified by the Lands Management Services
of the DENR, the certification refers only to the technical correctness of the survey plotted in
the said plan and has nothing to do whatsoever with the nature and character of the property
surveyed. Respondents failed to submit a certification from the proper government agency to
prove that the lands subject for registration are indeed alienable and disposable. (Citations
16
omitted and emphasis ours)
Similarly, in Republic v. Roche, the Court declared that:

17
Respecting the third requirement, the applicant bears the burden of proving the status of the
land. In this connection, the Court has held that he must present a certificate of land
classification status issued by the Community Environment and Natural Resources Office
(CENRO) or the Provincial Environment and Natural Resources Office (PENRO) of the DENR.
He must also prove that the DENR Secretary had approved the land classification and
released the land as alienable and disposable, and that it is within the approved area per
verification through survey by the CENRO or PENRO. Further, the applicant must present a
copy of the original classification approved by the DENR Secretary and certified as true copy
by the legal custodian of the official records. These facts must be established by the applicant
to prove that the land is alienable and disposable.
Here, Roche did not present evidence that the land she applied for has been classified as
alienable or disposable land of the public domain. She submitted only the survey map and
technical description of the land which bears no information regarding the land’s classification.
She did not bother to establish the status of the land by any certification from the appropriate
government agency. Thus, it cannot be said that she complied with all requisites for registration
of title under Section 14(1) of P.D. 1529. (Citations omitted and emphasis ours)
18
The annotation in the survey plan presented by Cortez is not the kind of evidence required by
law as proof that the subject property forms part of the alienable and disposable land of the
public domain. Cortez failed to present a certification from the proper government agency as to
the classification of the subject property. Cortez likewise failed to present any evidence
showing that the DENR Secretary had indeed classified the subject property as alienable and
disposable. Having failed to present any incontrovertible evidence, Cortez’ claim that the
subject property forms part of the alienable and disposable lands of the public domain must
fail.
Anent the second and third requirements, the Court finds that Cortez likewise failed to
establish the same. Cortez failed to present any evidence to prove that he and his
1âwphi1
predecessors-in-interest have been in open, continuous, exclusive, and notorious possession

and occupation of the subject property since June 12, 1945, or earlier. Cortez was only able to
present oral and documentary evidence of his and his mother’s ownership and possession of
the subject property since 1946, the year in which his mother supposedly inherited the same.
Other than his bare claim that his family possessed the subject property since time
immemorial, Cortez failed to present any evidence to show that he and his predecessors-in-
interest indeed possessed the subject property prior to 1946; it is a mere claim and not factual
proof of possession. "It is a rule that general statements that are mere conclusions of law and
not factual proof of possession are unavailing and cannot suffice. An applicant in a land
registration case cannot just harp on mere conclusions of law to embellish the application but
must impress thereto the facts and circumstances evidencing the alleged ownership and
possession of the land." 19
Further, the earliest tax declaration presented by Cortez was only in 1966. Cortez failed to
explain why, despite his claim that he and his predecessors-in-interest have been in
possession of the subject property since time immemorial, it was only in 1966 that his
predecessors-in-interest started to declare the same for purposes of taxation.
That Cortez and his predecessors-in-interest have been in possession of the subject property
for fifty-seven (57) years at the time he filed his application for registration in 2003 would
likewise not entitle him to registration thereof under Section 14(2) of P.D. No. 1529.
Section 14(2) of P.D. No. 1529 sanctions the original registration of lands acquired by
prescription under the provisions of existing laws. "As Section 14(2) [of P.D. No. 1529]
categorically provides, only private properties may be acquired thru prescription and under
Articles 420 and 421 of the Civil Code, only those properties, which are not for public use,
public service or intended for the development of national wealth, are considered private."20
In Heirs of Mario Malabanan v. Republic, the Court however clarified that lands of the public
21
domain that are patrimonial in character are susceptible to acquisitive prescription and,
accordingly, eligible for registration under Section 14(2) of P.D. No. 1529, viz:
The Civil Code makes it clear that patrimonial property of the State may be acquired by private
persons through prescription. This is brought about by Article 1113, which states that "[a]ll
things which are within the commerce of man are susceptible to prescription," and that property
of the State or any of its subdivisions not patrimonial in character shall not be the object of
prescription."
There are two modes of prescription through which immovables may be acquired under the
Civil Code. The first is ordinary acquisitive prescription, which, under Article 1117, requires
1âwphi1
possession in good faith and with just title; and, under Article 1134, is completed through
possession of ten (10) years. There is nothing in the Civil Code that bars a person from
acquiring patrimonial property of the State through ordinary acquisitive prescription, nor is
there any apparent reason to impose such a rule. At the same time, there are indispensable
requisites–good faith and just title. The ascertainment of good faith involves the application of
Articles 526, 527, and 528, as well as Article 1127 of the Civil Code, provisions that more or
less speak for themselves. (Citation omitted and emphasis ours)
22
The Court nevertheless emphasized that there must be an official declaration by the State that
the public dominion property is no longer intended for public use, public service, or for the
development of national wealth before it can be acquired by prescription; that a mere
declaration by government officials that a land of the public domain is already alienable and
disposable would not suffice for purposes of registration under Section 14(2) of P.D. No. 1529.
The Court further stressed that the period of acquisitive prescription would only begin to run
from the time that the State officially declares that the public dominion property is no longer
intended for public use, public service, or for the development of national wealth. Thus:
Let us now explore the effects under the Civil Code of a declaration by the President or any
duly authorized government officer of alienability and disposability of lands of the public
domain. Would such lands so declared alienable and disposable be converted, under the Civil
Code, from property of the public dominion into patrimonial property? After all, by connotative
definition, alienable and disposable lands may be the object of the commerce of man; Article
1113 provides that all things within the commerce of man are susceptible to prescription; and
the same provision further provides that patrimonial property of the State may be acquired by
prescription.
Nonetheless, Article 422 of the Civil Code states that "[p]roperty of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial property of
the State." It is this provision that controls how public dominion property may be converted into
patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes
clear that those property "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" are public
dominion property. For as long as the property belongs to the State, although already classified
as alienable or disposable, it remains property of the public dominion if when it is "intended for
some public service or for the development of the national wealth."
property, even if classified as alienable or disposable, remains property of the public dominion,
pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when
such alienable and disposable lands are expressly declared by the State to be no longer
intended for public service or for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly
enacted by Congress or a Presidential Proclamation in cases where the President is duly
authorized by law. (Emphasis supplied)
23
In Republic v. Rizalvo, the Court deemed it appropriate to reiterate the ruling in Malabanan,
24
viz:
On this basis, respondent would have been eligible for application for registration because his
claim of ownership and possession over the subject property even exceeds thirty (30) years.
However, it is jurisprudentially clear that the thirty (30)-year period of prescription for purposes
of acquiring ownership and registration of public land under Section 14 (2) of P.D. No. 1529
only begins from the moment the State expressly declares that the public dominion property is
no longer intended for public service or the development of the national wealth or that the
property has been converted into patrimonial. x x x. (Citation omitted and emphasis ours)
25
Accordingly, although lands of the public domain that are considered patrimonial may be
acquired by prescription under Section 14(2) of P.D. No. 1529, before acquisitive prescription
could commence, the property sought to be registered must not only be classified as alienable
and disposable; it must also be declared by the State that it is no longer intended for public
use, public service or the development of the national wealth. Thus, absent an express
declaration by the State, the land remains to be property of public dominion. 26
The Court finds no evidence of any official declaration from the state attesting to the
patrimonial character of the subject property. Cortez failed to prove that acquisitive prescription
has begun to run against the State, much less that he has acquired title to the subject property
by virtue thereof. It is of no moment that Cortez and his predecessors-in-interest have been in
possession of the subject property for 57 years at the time he applied for the registration of title
thereto. "[l]t is not the notorious, exclusive and uninterrupted possession and occupation of an
alienable and disposable public land for the mandated periods that converts it to patrimonial.
The indispensability of an official declaration that the property is now held by the State in its
private capacity or placed within the commerce of man for prescription to have any effect
against the State cannot be overemphasized. " 27
WHEREFORE, in consideration of the foregoing disquisitions, the instant petition is

GRANTED. The Decision dated February 17, 2009 of the Court of Appeals in CA-G.R. CV No.
87505, which affirmed the Decision dated February 7, 2006 of the Regional Trial Court of Pasig
City, Branch 68, in LRC Case No. N-11496, is hereby REVERSED and SET ASIDE. The
Application for Registration of Emmanuel C. Cortez in LRC Case No. N-11496 is DENIED for
lack of merit.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:

Chief Justice
Chairperson

MARTIN S. VILLARAMA, JR.

Associate Justice

Chief Justice
Footnotes
1
Rollo, pp. 13-25.
2
Penned by Associate Justice Jose Catral Mendoza (now a member of this Court), with
Associate Justices Portia Aliño-Hormachuelos and Ramon M. Bato, Jr., concurring; id.
at 28-40.
3
Issued by Judge Santiago G. Estrella; id. at 55A-60.
4
Id. at 44-48.
5
Id. at 55A-60.
6
Id. at 59-60.
7
Id. at 59.
8
Id. at 28-40.
9
Property Registration Decree.
10
Rollo, pp. 35, 38.
11
Id. at 59.
12
Section 48(b) of the Public Land Act, as amended by P.D. No. 1073, provides that:
Section 48. The following-described citizens of the Philippines, occupying lands

of the public domain or claiming to own any such lands or an interest therein,
but whose titles have not been perfected or completed, may apply to the Court
of First Instance of the province where the land is located for confirmation of
their claims and the issuance of a certificate of title therefor, under the Land
xxxx
(b) 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 acquisition or ownership, since June 12, 1945, or earlier, immediately
preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to
have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this chapter.
13
See Republic v. Rizalvo, Jr., G.R. No. 172011, March 7, 2011, 644 SCRA 516, 523.
14
Records, p. 231.
15
534 Phil. 181 (2006).
16
Id. at 194-195.
17
G.R. No. 175846, July 6, 2010, 624 SCRA 116.
18
Id. at 121-122.
Republic v. Dela Paz, G.R. No. 171631, November 15, 2010, 634 SCRA 610, 622-
19
623, citing Mistica v. Republic, G.R. No. 165141, September 11, 2009, 599 SCRA 401,
410-411 and Lim v. Republic, G.R. Nos. 158630 and 162047, September 4, 2009, 598
SCRA 247, 262.
20
Republic v. Espinosa, G.R. No. 171514, July 18, 2012, 677 SCRA 92, 106.
21
G.R. No. 179987, April 29, 2009, 587 SCRA 172.
22
Id. at 207.
23
Id. at 202-203.
24
G.R. No. 172011, March 7, 2011, 644 SCRA 516.
25
Id. at 526.
26
See Republic v. Ching, G .R. No. 186166, October 20, 2010, 634 SCRA 415, 428.
See Republic v. Metro Index Realty and Development Corporation, G.R. No. 198585,
27
July 2, 2012, 675 SCRA 439, 446.
FIRST DIVISION
G.R. No. 192896 July 24, 2013
DREAM VILLAGE NEIGHBORHOOD ASSOCIATION, INC., represented by its Incumbent

President, GREG SERIEGO, Petitioner,
vs.
BASES DEVELOPMENT AUTHORITY, Respondent.
DECISION
REYES, J.:
Before us on Petition for Review1 under Rule 45 of the Rules of Court is the Decision2 dated
September 10, 2009 and Resolution3 dated July 13, 2010 of the Court of Appeals (CA) in CA-
G.R. SP No. 85228 nullifying and setting aside for lack of jurisdiction the Resolution 4 dated
April 28, 2004 of the Commission on the Settlement of Land Problems (COSLAP) in COS LAP
Case No. 99-500. The fallo of the assailed COS LAP Resolution reads, as follows:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring the subject property, covering an area of 78,466 square meters, now being
occupied by the members of the Dream Village Neighborhood Association, Inc. to be
outside of Swo-00-0001302 BCDA property.
2. In accordance with the tenets of social justice, members of said association are
advised to apply for sales patent on their respective occupied lots with the Land
Management Bureau, DENR-NCR, pursuant to R.A. Nos. 274 and 730.
3. Directing the Land Management Bureau-DENR-NCR to process the sales patent

application of complainants pursuant to existing laws and regulation.
4. The peaceful possession of actual occupants be respected by the respondents.
SO ORDERED.5
Antecedent Facts
Petitioner Dream Village Neighborhood Association, Inc. (Dream Village) claims to represent
more than 2,000 families who have been occupying a 78,466-square meter lot in Western
Bicutan, Taguig City since 1985 "in the concept of owners continuously, exclusively and
notoriously."6 The lot used to be part of the Hacienda de Maricaban (Maricaban), owned by
Dolores Casal y Ochoa and registered under a Torrens title, 7 Original Certificate of Title (OCT)
No. 291, issued on October 17, 1906 by the Registry of Deeds of Rizal. 8 Maricaban covered
several parcels of land with a total area of over 2,544 hectares spread out over Makati, Pasig,
Taguig, Pasay, and Parañaque.9
Following the purchase of Maricaban by the government of the United States of America (USA)
early in the American colonial period, to be converted into the military reservation known as
Fort William Mckinley, Transfer Certificate of Title (TCT) No. 192 was issued in the name of the
USA to cancel OCT No. 291.10 The US government later transferred 30 has. of Maricaban to
the Manila Railroad Company, for which TCT No. 192 was cancelled by TCT Nos. 1218 and
1219, the first in the name of the Manila Railroad Company for 30 has., and the second in the
name of the USA for the rest of the Maricaban property.11
On January 29, 1914, TCT No. 1219 was cancelled and replaced by TCT No. 1688, and later
that year, on September 15, 1914, TCT No. 1688 was cancelled and replaced by TCT No.
2288, both times in the name of the USA.12 On December 6, 1956, the USA formally ceded Fort
William Mckinley to the Republic of the Philippines (Republic), and on September 11, 1958,
TCT No. 2288 was cancelled and replaced by TCT No. 61524, this time in the name of the
Republic.13 On July 12, 1957, President Carlos P. Garcia issued Proclamation No. 423
withdrawing from sale or settlement the tracts of land within Fort William Mckinley, now
renamed Fort Bonifacio, and reserving them for military purposes. 14
On January 7, 1986, President Ferdinand E. Marcos issued Proclamation No. 2476 declaring
certain portions of Fort Bonifacio alienable and disposable 15 in the manner provided under
Republic Act (R.A.) Nos. 274 and 730, in relation to the Public Land Act, 16 thus allowing the
sale to the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and Western
Bicutan.17
On October 16, 1987, President Corazon C. Aquino issued Proclamation No. 172 amending
Proclamation No. 2476 by limiting to Lots 1 and 2 of the survey Swo-13-000298 the areas in
Western Bicutan open for disposition.18
On March 13, 1992, R.A. No. 7227 was passed19 creating the Bases Conversion and
Development Authority (BCDA) to oversee and accelerate the conversion of Clark and Subic
military reservations and their extension camps (John Hay Station, Wallace Air Station,
O’Donnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay
Station) to productive civilian uses. Section 820 of the said law provides that the capital of the
BCDA will be provided from sales proceeds or transfers of lots in nine (9) military camps in
Metro Manila, including 723 has. of Fort Bonifacio. The law, thus, expressly authorized the
President of the Philippines "to sell the above lands, in whole or in part, which are hereby
declared alienable and disposable pursuant to the provisions of existing laws and regulations
governing sales of government properties," 21 specifically to raise capital for the BCDA. Titles to
the camps were transferred to the BCDA for this purpose, 22 and TCT No. 61524 was cancelled
on January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460, 23889, 23890, and 23891, now
in the name of the BCDA.23
Excepted from disposition by the BCDA are: a) approximately 148.80 has. reserved for the
National Capital Region (NCR) Security Brigade, Philippine Army officers’ housing area, and
Philippine National Police jails and support services (presently known as Camp Bagong Diwa);
b) approximately 99.91 has. in Villamor Air Base for the Presidential Airlift Wing, one squadron
of helicopters for the NCR and respective security units; c) twenty one (21) areas segregated
by various presidential proclamations; and d) a proposed 30.15 has. as relocation site for
families to be affected by the construction of Circumferential Road 5 and Radial Road 4,
provided that the boundaries and technical description of these exempt areas shall be
determined by an actual ground survey.24
Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully subjecting
its members to summary demolition, resulting in unrest and tensions among the residents, 25 on
November 22, 1999, the latter filed a letter-complaint with the COSLAP to seek its assistance
in the verification survey of the subject 78,466-sq m property, which they claimed is within Lot 1
of Swo-13-000298 and thus is covered by Proclamation No. 172. They claim that they have
been occupying the area for thirty (30) years "in the concept of owners continuously,
exclusively and notoriously for several years," and have built their houses of sturdy materials
thereon and introduced paved roads, drainage and recreational and religious facilities. Dream
Village, thus, asserts that the lot is not among those transferred to the BCDA under R.A. No.
7227, and therefore patent applications by the occupants should be processed by the Land
Management Bureau (LMB).
On August 15, 2000, Dream Village formalized its complaint by filing an Amended Petition 26 in
the COSLAP. Among the reliefs it sought were:
d. DECLARING the subject property as alienable and disposable by virtue of applicable

laws;
e. Declaring the portion of Lot 1 of subdivision Plan SWO-13-000298, situated in the

barrio of Western Bicutan, Taguig, Metro Manila, which is presently being occupied by
herein petitioner as within the coverage of Proclamation Nos. 2476 and 172 and
outside the claim of AFP-RSBS INDUSTRIAL PARK COMPLEX and/or BASES
CONVESION DEVELOPMENT AUTHORITY.
f. ORDERING the Land Management Bureau to process the application of the

ASSOCIATION members for the purchase of their respective lots under the provisions
of Acts Nos. 274 and 730. (Underscoring supplied)
Respondent BCDA in its Answer28 dated November 23, 2000 questioned the jurisdiction of the
COSLAP to hear Dream Village’s complaint, while asserting its title to the subject property
pursuant to R.A. No. 7227. It argued that under Executive Order (E.O.) No. 561 which created
the COSLAP, its task is merely to coordinate the various government offices and agencies
involved in the settlement of land problems or disputes, adding that BCDA does not fall in the
enumeration in Section 3 of E.O. No. 561, it being neither a pastureland-lease holder, a timber
concessionaire, or a government reservation grantee, but the holder of patrimonial government
property which cannot be the subject of a petition for classification, release or subdivision by
the occupants of Dream Village.
In its Resolution29 dated April 28, 2004, the COSLAP narrated that it called a mediation
conference on March 22, 2001, during which the parties agreed to have a
relocation/verification survey conducted of the subject lot. On April 4, 2001, the COSLAP wrote
to the Department of Environment and Natural Resources (DENR)-Community Environment
and Natural Resources Office-NCR requesting the survey, which would also include Swo-00-
0001302, covering the adjacent AFP-RSBS Industrial Park established by Proclamation No.
1218 on May 8, 1998 as well as the abandoned Circumferential Road 5 (C-5 Road). 30
On April 1, 2004, the COSLAP received the final report of the verification survey and a
blueprint copy of the survey plan from Atty. Rizaldy Barcelo, Regional Technical Director for
Lands of DENR. Specifically, Item No. 3 of the DENR report states:
3. Lot-1, Swo-000298 is inside Proclamation 172. Dream Village Neighborhood Association,

Inc. is outside Lot-1, Swo-13-000298 and inside Lot-10, 11 & Portion of Lot 13, Swo-00-
0001302 with an actual area of 78,466 square meters. Likewise, the area actually is outside
Swo-00-0001302 of BCDA.31 (Emphasis ours and underscoring supplied)
COSLAP Ruling
On the basis of the DENR’s verification survey report, the COSLAP resolved that Dream
Village lies outside of BCDA, and particularly, outside of Swo-00-0001302, and thus directed
the LMB of the DENR to process the applications of Dream Village’s members for sales patent,
noting that in view of the length of time that they "have been openly, continuously and
notoriously occupying the subject property in the concept of an owner, x x x they are qualified
to apply for sales patent on their respective occupied lots pursuant to R.A. Nos. 274 and 730 in
relation to the provisions of the Public Land Act."32
On the question of its jurisdiction over the complaint, the COSLAP cited the likelihood that the
summary eviction by the BCDA of more than 2,000 families in Dream Village could stir up
serious social unrest, and maintained that Section 3(2) of E.O. No. 561 authorizes it to
"assume jurisdiction and resolve land problems or disputes which are critical and explosive in
nature considering, for instance, the large number of parties involved, the presence or
emergence of social tension or unrest, or other similar critical situations requiring immediate
action," even as Section 3(2)(d) of E.O. No. 561 also allows it to take cognizance of "petitions
for classification, release and/or subdivision of lands of the public domain," exactly the ultimate
relief sought by Dream Village. Rationalizing that it was created precisely to provide a more
effective mechanism for the expeditious settlement of land problems "in general," the COSLAP
invoked as its authority the 1990 case of Bañaga v. COSLAP, 33 where this Court said:
It is true that Executive Order No. 561 provides that the COSLAP may take cognizance of
cases which are "critical and explosive in nature considering, for instance, the large number of
parties involved, the presence or emergence of social tension or unrest, or other similar critical
situations requiring immediate action." However, the use of the word "may" does not mean that
the COSLAP’s jurisdiction is merely confined to the above mentioned cases. The provisions of
the said Executive Order are clear that the COSLAP was created as a means of providing a
more effective mechanism for the expeditious settlement of land problems in general, which
are frequently the source of conflicts among settlers, landowners and cultural minorities.
Besides, the COSLAP merely took over from the abolished PACLAP whose functions, including
its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2, P.D.
No. 832) were all assumed by it. The said Executive Order No. 561 containing said provision,
being enacted only on September 21, 1979, cannot affect the exercise of jurisdiction of the
PACLAP Provincial Committee of Koronadal on September 20, 1978. Neither can it affect the
decision of the COSLAP which merely affirmed said exercise of jurisdiction. 34
In its Motion for Reconsideration35 filed on May 20, 2004, the BCDA questioned the validity of
the survey results since it was conducted without its representatives present, at the same time
denying that it received a notification of the DENR verification survey.36 It maintained that there
is no basis for the COSLAP’s finding that the members of Dream Village were in open,
continuous, and adverse possession in the concept of owner, because not only is the property
not among those declared alienable and disposable, but it is a titled patrimonial property of the
State.37
In the Order38 dated June 17, 2004, the COSLAP denied BCDA’s Motion for Reconsideration,
insisting that it had due notice of the verification survey, while also noting that although the
BCDA wanted to postpone the verification survey due to its tight schedule, it actually stalled the
survey when it failed to suggest an alternative survey date to ensure its presence.
CA Ruling
On Petition for Review39 to the CA, the BCDA argued that the dispute is outside the jurisdiction
of the COSLAP because of the land’s history of private ownership and because it is registered
under an indefeasible Torrens title40; that Proclamation No. 172 covers only Lots 1 and 2 of
Swo-13-000298 in Western Bicutan, whereas Dream Village occupies Lots 10, 11 and part of
13 of Swo-00-0001302, which also belongs to the BCDA 41; that the COSLAP resolution is
based on an erroneous DENR report stating that Dream Village is outside of BCDA, because
Lots 10, 11, and portion of Lot 13 of Swo-00-0001302 are within the DA 42; that the COSLAP
was not justified in ignoring BCDA’s request to postpone the survey to the succeeding year
because the presence of its representatives in such an important verification survey was
indispensable for the impartiality of the survey aimed at resolving a highly volatile situation 43;
that the COSLAP is a mere coordinating administrative agency with limited jurisdiction 44; and,
that the present case is not among those enumerated in Section 3 of E.O. No. 561 45.
The COSLAP, on the other hand, maintained that Section 3(2)(e) of E.O. No. 561 provides that
it may assume jurisdiction and resolve land problems or disputes in "other similar land
problems of grave urgency and magnitude," 46 and the present case is one such problem.
The CA in its Decision47 dated September 10, 2009 ruled that the COSLAP has no jurisdiction
over the complaint because the question of whether Dream Village is within the areas declared
as available for disposition in Proclamation No. 172 is beyond its competence to determine,
even as the land in dispute has been under a private title since 1906, and presently its title is
held by a government agency, the BCDA, in contrast to the case of Bañaga relied upon by
Dream Village, where the disputed land was part of the public domain and the disputants were
applicants for sales patent thereto.
Dream Village’s motion for reconsideration was denied in the appellate court’s Order 48 of July
13, 2010.
Petition for Review in the Supreme Court
On petition for review on certiorari to this Court, Dream Village interposes the following issues:
IN ANNULLING THE RESOLUTION OF COSLAP IN COSLAP CASE NO. 99-500, THE

HONORABLE CA DECIDED THE CASE IN A MANNER NOT CONSISTENT WITH LAW AND
APPLICABLE DECISIONS OF THIS HONORABLE COURT;
THE HONORABLE CA ERRED IN RULING THAT COSLAP HAD NO JURISDICTION OVER

THE CONTROVERSY BETWEEN THE PARTIES HEREIN.49
We find no merit in the petition.
The BCDA holds title to Fort Bonifacio.
That the BCDA has title to Fort Bonifacio has long been decided with finality. In Samahan ng
Masang Pilipino sa Makati, Inc. v. BCDA,50 it was categorically ruled as follows:
First, it is unequivocal that the Philippine Government, and now the BCDA, has title and
ownership over Fort Bonifacio. The case of Acting Registrars of Land Titles and Deeds of
Pasay City, Pasig and Makati is final and conclusive on the ownership of the then Hacienda de
Maricaban estate by the Republic of the Philippines. Clearly, the issue on the ownership of the
subject lands in Fort Bonifacio is laid to rest. Other than their view that the USA is still the
owner of the subject lots, petitioner has not put forward any claim of ownership or interest in
them.51
The facts in Samahan ng Masang Pilipino sa Makati are essentially not much different from the
controversy below. There, 20,000 families were long-time residents occupying 98 has. of Fort
Bonifacio in Makati City, who vainly sought to avert their eviction and the demolition of their
houses by the BCDA upon a claim that the land was owned by the USA under TCT No. 2288.
The Supreme Court found that TCT No. 2288 had in fact been cancelled by TCT No. 61524 in
the name of the Republic, which title was in turn cancelled on January 3, 1995 by TCT Nos.
23888, 23887, 23886, 22460, 23889, 23890, and 23891, all in the name of the BCDA. The
Court ruled that the BCDA’s aforesaid titles over Fort Bonifacio are valid, indefeasible and
beyond question, since TCT No. 61524 was cancelled in favor of BCDA pursuant to an explicit
authority under R.A. No. 7227, the legal basis for BCDA’s takeover and management of the
subject lots.52
Dream Village sits on the
abandoned C-5 Road, which lies
outside the area declared in
Proclamation Nos. 2476 and 172 as
alienable and disposable.
Pursuant to Proclamation No. 2476, the following surveys were conducted by the Bureau of
Lands to delimit the boundaries of the areas excluded from the coverage of Proclamation No.
423:
Barangay Survey Plan Date Approved
1. Lower Bicutan SWO-13-000253 October 21, 1986
2. Signal Village SWO-13-000258 May 13, 1986
3. Upper Bicutan SWO-13-000258 May 13, 1986
4. Western Bicutan SWO-13-000298 January 15, 198753
However, the survey plan for Western Bicutan, Swo-13-000298, shows that Lots 3, 4, 5 and 6
thereof are inside the area segregated for the Libingan ng mga Bayani under Proclamation No.
208, which then leaves only Lots 1 and 2 of Swo-13-000298 as available for disposition. For
this reason, it was necessary to amend Proclamation No. 2476. Thus, in Proclamation No. 172
only Lots 1 and 2 of Swo-13-000298 are declared alienable and disposable. 54
The DENR verification survey report states that Dream Village is not situated in Lot 1 of Swo-
13-000298 but actually occupies Lots 10, 11 and part of 13 of Swo-00-0001302: "x x x Dream
Village is outside Lot1, SWO-13-000298 and inside Lot 10, 11 & portion of Lot 13, SWO-00-
0001302 with an actual area of 78466 square meters. The area is actually is [sic] outside
SWO-00-0001302 of BCDA."55 Inexplicably and gratuitously, the DENR also states that the
area is outside of BCDA, completely oblivious that the BCDA holds title over the entire Fort
Bonifacio, even as the BCDA asserts that Lots 10, 11 and 13 of SWO-00-0001302 are part of
the abandoned right-of-way of C-5 Road. This area is described as lying north of Lot 1 of Swo-
13-000298 and of Lots 3, 4, 5 and 6 of Swo-13-000298 (Western Bicutan) inside the Libingan
ng mga Bayani, and the boundary line of Lot 1 mentioned as C-5 Road is really the proposed
alignment of C-5 Road, which was abandoned when, as constructed, it was made to traverse
northward into the Libingan ng mga Bayani. Dream Village has not disputed this assertion.
The mere fact that the original plan for C-5 Road to cross Swo-00-0001302 was abandoned by
deviating it northward to traverse the southern part of Libingan ng mga Bayani does not signify
abandonment by the government of the bypassed lots, nor that these lots would then become
alienable and disposable. They remain under the title of the BCDA, even as it is significant that
under Section 8(d) of R.A. No. 7227, a relocation site of 30.5 has. was to be reserved for
families affected by the construction of C-5 Road. It is nowhere claimed that Lots 10, 11 and 13
of Swo-00-0001302 are part of the said relocation site. These lots border C-5 Road in the
south,56making them commercially valuable to BCDA, a farther argument against a claim that
the government has abandoned them to Dream Village.
While property of the State or any
of its subdivisions patrimonial in
character may be the object of
prescription, those "intended for
some public service or for the
development of the national
wealth" are considered property of
public dominion and therefore not
susceptible to acquisition by
prescription.
Article 1113 of the Civil Code provides that "property of the State or any of its subdivisions not
patrimonial in character shall not be the object of prescription." Articles 420 and 421 identify
what is property of public dominion and what is patrimonial property:
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.
Art. 421. All other property of the State, which is not of the character stated in the preceding
article, is patrimonial property.
One question laid before us is whether the area occupied by Dream Village is susceptible of
acquisition by prescription. In Heirs of Mario Malabanan v. Republic, 57 it was pointed out that
from the moment R.A. No. 7227 was enacted, the subject military lands in Metro Manila
became alienable and disposable. However, it was also clarified that the said lands did not
thereby become patrimonial, since the BCDA law makes the express reservation that they are
to be sold in order to raise funds for the conversion of the former American bases in Clark and
Subic. The Court noted that the purpose of the law can be tied to either "public service" or "the
development of national wealth" under Article 420(2) of the Civil Code, such that the lands
remain property of the public dominion, albeit their status is now alienable and disposable. The
Court then explained that it is only upon their sale to a private person or entity as authorized by
the BCDA law that they become private property and cease to be property of the public
dominion:58
For as long as the property belongs to the State, although already classified as alienable or
disposable, it remains property of the public dominion if when it is "intended for some public
service or for the development of the national wealth." 59
Thus, under Article 422 of the Civil Code, public domain lands become patrimonial property
only if there is a declaration that these are alienable or disposable, together with an express
government manifestation that the property is already patrimonial or no longer retained for
public service or the development of national wealth. Only when the property has become
patrimonial can the prescriptive period for the acquisition of property of the public dominion
begin to run. Also under Section 14(2) of Presidential Decree (P.D.) No. 1529, it is provided
that before acquisitive prescription can commence, the property sought to be registered must
not only be classified as alienable and disposable, it must also be expressly declared by the
State that it is no longer intended for public service or the development of the national wealth,
or that the property has been converted into patrimonial. Absent such an express declaration
by the State, the land remains to be property of public dominion. 60
Since the issuance of Proclamation No. 423 in 1957, vast portions of the former Maricaban
have been legally disposed to settlers, besides those segregated for public or government use.
Proclamation No. 1217 (1973) established the Maharlika Village in Bicutan, Taguig to serve the
needs of resident Muslims of Metro Manila; Proclamation No. 2476 (1986), as amended by
Proclamation No. 172 (1987), declared more than 400 has. of Maricaban in Upper and Lower
Bicutan, Signal Village, and Western Bicutan as alienable and disposable; Proclamation No.
518 (1990) formally exempted from Proclamation No. 423 the Barangays of Cembo, South
Cembo, West Rembo, East Rembo, Comembo, Pembo and Pitogo, comprising 314 has., and
declared them open for disposition.
The above proclamations notwithstanding, Fort Bonifacio remains property of public dominion
of the State, because although declared alienable and disposable, it is reserved for some
public service or for the development of the national wealth, in this case, for the conversion of
military reservations in the country to productive civilian uses.61Needless to say, the acquisitive
prescription asserted by Dream Village has not even begun to run.
Ownership of a land registered

under a Torrens title cannot be lost
by prescription or adverse
possession.
Dream Village has been unable to dispute BCDA’s claim that Lots 10, 11 and part of 13 of Swo-
00-0001302 are the abandoned right-of-way of C-5 Road, which is within the vast titled territory
of Fort Bonifacio. We have already established that these lots have not been declared
alienable and disposable under Proclamation Nos. 2476 or 172.
Moreover, it is a settled rule that lands under a Torrens title cannot be acquired by prescription
or adverse possession.62 Section 47 of P.D. No. 1529, the Property Registration Decree,
expressly provides that no title to registered land in derogation of the title of the registered
owner shall be acquired by prescription or adverse possession. And, although the registered
landowner may still lose his right to recover the possession of his registered property by
reason of laches,63 nowhere has Dream Village alleged or proved laches, which has been
defined as such neglect or omission to assert a right, taken in conjunction with lapse of time
and other circumstances causing prejudice to an adverse party, as will operate as a bar in
equity. Put any way, it is a delay in the assertion of a right which works disadvantage to another
because of the inequity founded on some change in the condition or relations of the property or
parties. It is based on public policy which, for the peace of society, ordains that relief will be
denied to a stale demand which otherwise could be a valid claim. 64
The subject property having been
expressly reserved for a specific
public purpose, the COSLAP
cannot exercise jurisdiction over the
complaint of the Dream Village
settlers.
BCDA has repeatedly asserted that the COSLAP has no jurisdiction to hear Dream Village’s
complaint. Concurring, the CA has ruled that questions as to the physical identity of Dream
Village and whether it lies in Lots 10, 11 and 13 of Swo-00-0001302, or whether Proclamation
No. 172 has released the disputed area for disposition are issues which are "manifestly beyond
the scope of the COSLAP’s jurisdiction vis-á-vis Paragraph 2, Section 3 of E.O. No.
561,"65 rendering its Resolution a patent nullity and its pronouncements void. Thus, the CA
said, under Section 3 of E.O. No. 561, the COSLAP’s duty would have been to refer the conflict
to another tribunal or agency of government in view of the serious ramifications of the disputed
claims:
In fine, it is apparent that the COSLAP acted outside its jurisdiction in taking cognizance of the
case. It would have been more prudent if the COSLAP has [sic] just referred the controversy to
the proper forum in order to fully thresh out the ramifications of the dispute at bar. As it is, the
impugned Resolution is a patent nullity since the tribunal which rendered it lacks jurisdiction.
Thus, the pronouncements contained therein are void. "We have consistently ruled that a
judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right or the
creator of any obligation. All acts performed pursuant to it and all claims emanating from it
have no legal effect."66 (Citation omitted)
We add that Fort Bonifacio has been reserved for a declared specific public purpose under
R.A. No. 7227, which unfortunately for Dream Village does not encompass the present
demands of its members. Indeed, this purpose was the very reason why title to Fort Bonifacio
has been transferred to the BCDA, and it is this very purpose which takes the dispute out of
the direct jurisdiction of the COSLAP. A review of the history of the COSLAP will readily clarify
that its jurisdiction is limited to disputes over public lands not reserved or declared for a public
use or purpose.
On July 31, 1970, President Marcos issued E.O. No. 251 creating the Presidential Action
Committee on Land Problems (PACLAP) to expedite and coordinate the investigation and
resolution of all kinds of land disputes between settlers, streamline and shorten administrative
procedures, adopt bold and decisive measures to solve land problems, or recommend other
solutions.67 E.O. No. 305, issued on March 19, 1971, reconstituted the PACLAP and gave it
exclusive jurisdiction over all cases involving public lands and other lands of the public
domain,68 as well as adjudicatory powers phrased in broad terms: "To investigate, coordinate,
and resolve expeditiously land disputes, streamline administrative proceedings, and, in
general, to adopt bold and decisive measures to solve problems involving public lands and
lands of the public domain."69
On November 27, 1975, P.D. No. 832 reorganized the PACLAP and enlarged its functions and
duties. Section 2 thereof even granted it quasi judicial functions, to wit:
Sec. 2. Functions and duties of the PACLAP. – The PACLAP shall have the following functions
and duties:
1. Direct and coordinate the activities, particularly the investigation work, of the various
government agencies and agencies involved in land problems or disputes, and
streamline administrative procedures to relieve small settlers and landholders and
members of cultural minorities of the expense and time-consuming delay attendant to
the solution of such problems or disputes;
2. Refer for immediate action any land problem or dispute brought to the attention of
the PACLAP, to any member agency having jurisdiction thereof: Provided, That when
the Executive Committee decides to act on a case, its resolution, order or decision
thereon shall have the force and effect of a regular administrative resolution, order or
decision, and shall be binding upon the parties therein involved and upon the member
agency having jurisdiction thereof;
xxxx
4. Evolve and implement a system of procedure for the speedy investigation and resolution of
land disputes or problems at provincial level, if possible. (Underscoring supplied)
On September 21, 1979, E.O. No. 561 abolished the PACLAP and created the COSLAP to be
a more effective administrative body to provide a mechanism for the expeditious settlement of
land problems among small settlers, landowners and members of the cultural minorities to
avoid social unrest.70 Paragraph 2, Section 3 of E.O No. 561 now specifically enumerates the
instances when the COSLAP can exercise its adjudicatory functions:
Sec. 3. Powers and Functions. — The Commission shall have the following powers and
functions:
1. Coordinate the activities, particularly the investigation work, of the various

government offices and agencies involved in the settlement of land problems or
disputes, and streamline administrative procedures to relieve small settlers and
landholders and members of cultural minorities of the expense and time consuming
delay attendant to the solution of such problems or disputes;
2. Refer and follow-up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission: Provided, That the
Commission may, in the following cases, assume jurisdiction and resolve land
problems or disputes which are critical and explosive in nature considering, for
instance, the large number of the parties involved, the presence or emergence of social
tension or unrest, or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or

timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;

(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the public
domain; and
(e) Other similar land problems of grave urgency and magnitude.
xxxx
Citing the constant threat of summary eviction and demolition by the BCDA and the
seriousness and urgency of the reliefs sought in its Amended Petition, Dream Village insists
that the COSLAP was justified in assuming jurisdiction of COSLAP Case No. 99-500. But in
Longino v. Atty. General,71 it was held that as an administrative agency, COSLAP’s jurisdiction
is limited to cases specifically mentioned in its enabling statute, E.O. No. 561. The Supreme
Court said:
Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and, as such,
could wield only such as are specifically granted to them by the enabling statutes. x x x.
xxxx
Under the law, E.O. No. 561, the COSLAP has two options in acting on a land dispute or
problem lodged before it, namely, (a) refer the matter to the agency having appropriate
jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter is one of those
enumerated in paragraph 2(a) to (e) of the law, if such case is critical and explosive in nature,
taking into account the large number of the parties involved, the presence or emergence of
social tension or unrest, or other similar critical situations requiring immediate action. In
resolving whether to assume jurisdiction over a case or to refer the same to the particular
agency concerned, the COSLAP has to consider the nature or classification of the land
involved, the parties to the case, the nature of the questions raised, and the need for
immediate and urgent action thereon to prevent injuries to persons and damage or destruction
to property. The law does not vest jurisdiction on the COSLAP over any land dispute or
problem.72 (Citation omitted)
The Longino ruling has been consistently cited in subsequent COSLAP cases, among them
Davao New Town Development Corp. v. COSLAP,73 Barranco v. COSLAP,74 NHA v.
COSLAP,75 Cayabyab v. de Aquino,76 Ga, Jr. v. Tubungan,77 Machado v. Gatdula,78 and Vda. de
Herrera v. Bernardo.79
Thus, in Machado, it was held that the COSLAP cannot invoke Section 3(2)(e) of E.O. No. 561
to assume jurisdiction over "other similar land problems of grave urgency," since the statutory
construction principle of ejusdem generis prescribes that where general words follow an
enumeration of persons or things, by words of a particular and specific meaning, such general
words are not to be construed in their widest extent but are to be held as applying only to
persons or things of the same kind as those specifically mentioned. 80 Following this rule,
COSLAP’s jurisdiction is limited to disputes involving lands in which the government has a
proprietary or regulatory interest,81 or public lands covered with a specific license from the
government such as a pasture lease agreements, a timber concessions, or a reservation
grants,82 and where moreover, the dispute is between occupants/squatters and pasture lease
agreement holders or timber concessionaires; between occupants/squatters and government
reservation grantees; and between occupants/squatters and public land claimants or
applicants.
In Longino, the parties competed to lease a property of the Philippine National Railways. The
high court rejected COSLAP’s jurisdiction, noting that the disputed lot is not public land, and
neither party was a squatter, patent lease agreement holder, government reservation grantee,
public land claimant or occupant, or a member of any cultural minority, nor was the dispute
critical and explosive in nature so as to generate social tension or unrest, or a critical situation
which required immediate action.83
In Davao New Town Development Corp., it was held that the COSLAP has no concurrent
jurisdiction with the Department of Agrarian Reform (DAR) in respect of disputes concerning
the implementation of agrarian reform laws, since "the grant of exclusive and primary
jurisdiction over agrarian reform matters on the DAR implies that no other court, tribunal, or
agency is authorized to resolve disputes properly cognizable by the DAR." 84 Thus, instead of
hearing and resolving the case, COSLAP should have simply referred private respondents’
complaint to the DAR or DARAB. According to the Court:
The abovementioned proviso Section (3)(2) of E.O. No. 561, which vests COSLAP the power
to resolve land disputes, does not confer upon COSLAP blanket authority to assume every
matter referred to it. Its jurisdiction is confined only to disputes over lands in which the
government has proprietary or regulatory interest. Moreover, the land dispute in Bañaga
involved parties with conflicting free patent applications which was within the authority of
PACLAP to resolve, unlike that of the instant case which is exclusively cognizable by the
DAR.85
In Barranco, COSLAP issued a writ to demolish structures encroaching into private

property. The Supreme court ruled that COSLAP may resolve only land disputes "involving
1âwphi1
public lands or lands of the public domain or those covered with a specific license from the
government such as a pasture lease agreement, a timber concession, or a reservation grant." 86
In NHA, it was held that COSLAP has no jurisdiction over a boundary dispute between two
local government units, that its decision is an utter nullity correctible by certiorari, that it can
never become final and any writ of execution based on it is void, and all acts performed
pursuant to it and all claims emanating from it have no legal effect. 87
In Cayabyab, it was held that "the jurisdiction of COSLAP does not extend to disputes involving
the ownership of private lands, or those already covered by a certificate of title, as these fall
exactly within the jurisdiction of the courts and other administrative agencies." 88
In Ga, Jr., it was reiterated that the COSLAP has no jurisdiction over controversies relating to
ownership and possession of private lands, and thus, the failure of respondents to properly
appeal from the COSLAP decision before the appropriate court was held not fatal to the
petition for certiorari that they eventually filed with the CA. The latter remedy remained
available despite the lapse of the period to appeal from the void COSLAP decision. 89
In Machado, the high court ruled that COSLAP has no jurisdiction in disputes over private
lands between private parties, reiterating the essential rules contained in Section 3 of E.O. No.
561 governing the exercise by COSLAP of its jurisdiction, to wit:
Under these terms, the COSLAP has two different rules in acting on a land dispute or problem
lodged before it, e.g., COSLAP can assume jurisdiction only if the matter is one of those
enumerated in paragraph 2(a) to (e) of the law. Otherwise, it should refer the case to the
agency having appropriate jurisdiction for settlement or resolution. In resolving whether to
assume jurisdiction over a case or to refer it to the particular agency concerned, the COSLAP
considers: (a) the nature or classification of the land involved; (b) the parties to the case; (c)
the nature of the questions raised; and (d) the need for immediate and urgent action thereon to
prevent injury to persons and damage or destruction to property. The terms of the law clearly
do not vest on the COSLAP the general power to assume jurisdiction over any land dispute or
problem. Thus, under EO 561, the instances when the COSLAP may resolve land disputes are
limited only to those involving public lands or those covered by a specific license from the
government, such as pasture lease agreements, timber concessions, or reservation
grants.90 (Citations omitted)
In Vda. de Herrera, the COSLAP assumed jurisdiction over a complaint for "interference,
disturbance, unlawful claim, harassment and trespassing" over a private parcel of land. The CA
ruled that the parties were estopped to question COSLAP’s jurisdiction since they participated
actively in the proceedings. The Supreme Court, noting from the complaint that the case
actually involved a claim of title and possession of private land, ruled that the RTC or the MTC
has jurisdiction since the dispute did not fall under Section 3, paragraph 2 (a) to (e) of E.O. No.
561, was not critical and explosive in nature, did not involve a large number of parties, nor was
there social tension or unrest present or emergent. 91
In the case at bar, COSLAP has invoked Bañaga to assert its jurisdiction. There, Guillermo
Bañaga had filed a free patent application with the Bureau of Lands over a public land with an
area of 30 has. Gregorio Daproza (Daproza) also filed a patent application for the same
property. The opposing claims and protests of the claimants remained unresolved by the
Bureau of Lands, and neither did it conduct an investigation. Daproza wrote to the COSLAP,
which then opted to exercise jurisdiction over the controversy. The high court sustained
COSLAP, declaring that its jurisdiction is not confined to the cases mentioned in paragraph 2(a)
to (e) of E.O. No. 561, but includes land problems in general, which are frequently the source
of conflicts among settlers, landowners and cultural minorities.
But as the Court has since clarified in Longino and in the other cases aforecited, the land
dispute in Bañaga was between private individuals who were free patent applicants over
unregistered public lands. In contrast, the present petition involves land titled to and managed
by a government agency which has been expressly reserved by law for a specific public
purpose other than for settlement. Thus, as we have advised in Longino, the law does not vest
jurisdiction on the COSLAP over any land dispute or problem, but it has to consider the nature
or classification of the land involved, the parties to the case, the nature of the questions raised,
and the need for immediate and urgent action thereon to prevent injuries to persons and
damage or destruction to property.
WHEREFORE, premises considered, the petition is DENIED.

SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:

Chief Justice
Chairperson

MARTIN S. VILLARAMA, JR.

Associate Justice

Chief Justice
Footnotes
1
Rollo. pp. 24-46.
2
Penned by Associate Justice Priscilla J. Baltazar-Padilla. with Associate Justices
Josefina GuevaraSalonga and Celia C. Librea-Leagogo. concurring; id. at 55-67.
3
ld.at71-72.
4
Id. at 112-116.
5
Id. at 115-116.
6
Id. at 29.
7
Pursuant to Act No. 496 (1902) or the Land Registration Act.
8
Rollo, p. 56.
9
Samahan ng Masang Pilipino sa Makati, Inc. v. BCDA, 542 Phil. 86 (2007).
10
Rollo, p. 56.
11
Id. at 125; supra note 9, at 93.
12
Id. at 125-126.
13
Id. at 56, 126.
14
Id. at 29, 126.
15
Id. at 29.
16
Under R.A. No. 274, passed on June 15, 1948, and R.A. No. 730, passed on June
18, 1952, the Director of Lands shall cause the subdivision into agricultural or
residential lots of lands within military reservations owned by the RP which may be
declared by the President of the Philippines as no longer needed for military purposes,
for sale, first, to bona fide occupants, then to veterans, etc. The lots shall not be
encumbered or alienated prior to the issuance of the patent, or for ten years thereafter,
nor shall they be used to satisfy a debt contracted by the patent holder in the
meantime.
17
In a hand-written addendum by President Marcos to Proclamation No. 2476, Western
Bicutan was also declared open for disposition, but in Nagkakaisang Maralita ng Sitio
Masigasig, Inc. v. Marine Shrine Services (G.R. No. 187587, June 5, 2013), the
addendum was held as without legal effect for lack of publication.
18
The additional lots declared open for disposition under Proclamation No. 172 were:
LOT 1 (WESTERN BICUTAN)
A PARCEL OF LAND (Lot 1 of the subdivision plan Swo-13-000298, being a

portion of the Proclamation No. 2476) LRC Record No. — situated in the Bo. of
Western Bicutan, Taguig, Metro Manila.
Bounded on the SW., and SE., along lines 1-2-3 by Lot 9100 (Manila
Technician Institute) Proclamation No. 1160; on the NW., SW., and NW., along
lines 3 to 16 by Circumferential Road, 50 m. wide); on the N.E., along lines 16-
17 by Lot 2 of plan Swo-13-000298, and on the SE., along line 17-1 by Lot
8062 (Veteran’s Center Compound) (Proclamation No. 192) of plan MCadm-
590-D Taguig Cadastral Mapping.
NOTE: Lot 2 == Lot 10253, MCadm-590-D, Case 17, Taguig Cadastral

Mapping Beginning at a point marked "1" on plan, being S 63 deg. 25’W., 4346,
11 m. from BLBM No. 1, MCadm-590-D, Taguig Cadastral, thence -
xxxx
beginning, containing an area of TWO HUNDRED FIFTY-TWO THOUSAND
FOUR HUNDRED SEVENTY-SIX (252,476) SQUARE METERS. All points
referred to are indicated on the plan and are marked on the ground by PS cyl.
conc. wall, and pt l 17 by nail w/conc. hallow blocks; bearings grid, date of
original survey, April 23, 1978-July 12, 1979, that of special work order, July 5-
10, 1986, approved on Jan. 15, 1987.
LOT 2 SWO-13-000298 (WESTERN BICUTAN)
A PARCEL OF LAND (Lot 2 (Western Bicutan) of the subdivision plan Swo-13-

000298, being a portion of land described in Proclamation No. 2476, LRC
Record No. PSU-467), situated in the Bo. of Western Bicutan, Taguig, Metro
Manila.
Bounded on the SE., along lines 1-2 by Veteran’s Center Compound

(Proclamation No. 192) (Lot 8092, MCad-s-90-D); on the SEW, along lines 3 to
11 by Circumferential Road (5 m. wide); on the NE., along lines 11-12 by Lot
0063 (Military Reservation) (Fort Bonifacio) portion of Lot 3, Psu-2030 (portion
on) MCadm-590-D; on the SE., along lines 12-13 by Lot 1 Swo-13-000258
(Signal Village) (Lot 00202, MCads-590-D, Case 17, Taguig Cad Mapping and
on the SW., along line 1s-1 by Veteran’s Center Compound) (Proclamation No.
192) (Lot 8062, MCadm-590-D, Taguig Cad. Mapping.
NOTE: Lot 2 == Lot 10253, MCadm-590-D, Case 17, Taguig Cadastral

Mapping.
Beginning at a point marked "1" on plan, being S. 64 deg. 051’W., 2805.47 m.

from BLBM No. 1, MCadm 590-D, Taguig Cadastre; thence
xxxx
beginning, containing an area of Three-Hundred Eighty-Five Thousand Thirty-

Two (385,032) Square Meters. All points referred to are indicated on the plan
and the marked on the ground by PS cyl. conc. mons.; except pts. 1 by BGY.
No. 38; pt. 2 by nail with crown; pt. 12 by old PS cyl. conc. mons.; pt. 10 by
edge of conc. wall; bearings and rod, date of original survey, April 23, 1978-July
27, 1979, that of the special work order July 5-10, 1986, approved on January
14, 1987. x x x.
An Act Accelerating The Conversion of Military Reservations Into Productive Uses,

19
Creating the Bases Conversion and Development Authority for This Purpose, Providing
Funds Therefor and For Other Purposes.
20
Sec. 8. Funding Scheme. — The capital of the Conversion Authority shall come from
the sales proceeds and/or transfers of certain Metro Manila military camps, including all
lands covered by Proclamation No. 423, series of 1957, commonly known as Fort
Bonifacio and Villamor (Nicholas) Air Base, namely:
Area in has.
Camp
(more or less)
Phase I (for immediate disposal)
1. Camp Claudio 2.0
2. Camp Bago Bantay 5.0
3. Part of Villamor Air Base 135.10
4. Part of Fort Bonifacio 498.40
Total 640.50
Phase II
1. Camp Ver 1.9
2. Camp Melchor 1.0
3. Camp Atienza 4.9
4. Part of Villamor Air Base 37.9
5. Part of Fort Bonifacio 224.90
6. Fort Abad .60
Total 271.20
Provided, That the following areas shall be exempt from sale:
(a) Approximately 148.80 hectares in Fort Bonifacio for the National

Capital Region (NCR) Security Brigade, Philippine Army (PA) officers’
housing area, and Philippine National Police (PNP) jails and support
services (Presently Camp Bagong Diwa);
(b) Approximately 99.91 hectares in Villamor Air Base for the

Presidential Airlift Wing, one squadron of helicopters for the NCR and
respective security units;
(c) The following areas segregated by Proclamation Nos.:
(1) 461, series of 1965; (AFP Officers Village)
(2) 462, series of 1965; (AFP Enlisted Men’s Village)
(3) 192, series of 1967; (Veterans Center)

(4) 208, series of 1967; (National Shrines)
(5) 469, series of 1969; (Philippine College of Commerce)
(6) 653, series of 1970; (National Manpower and Youth Council)
(7) 684, series of 1970; (University Center)
(8) 1041, series of 1972; (Open Lease Concession)
(9) 1160, series of 1973; (Manila Technical Institute)
(10) 1217, series of 1973; (Maharlika Village)
(13) 1453, series of 1975; (National Police Commission)
(14) 1633, series of 1977; (Housing and Urban Development)
(15) 2219, series of 1982; (Ministry of Human Settlements,

BLISS)
(16) 172, series of 1987; (Upper, Lower and Western Bicutan

and Signal Housing)
(17) 389, series of 1989; (National Mapping and Resource

Information Authority)
(18) 518, series of 1990; (CEMBO, SO CEMBO, W REMBO, E

REMBO, COMEMBO, PEMBO, PITOGO)
(19) 467, series of 1968; (Greater Manila Terminal Food Market

Site)
(20) 347, series of 1968; (Greater Manila Food Market Site)
(21) 376, series of 1968; (National Development Board and

Science Community)
(d) A proposed 30.15 hectares as relocation site for families to be

affected by circumferential road 5 and radial road 4 construction:
Provided, further, That the boundaries and technical description of
these exempt areas shall be determined by an actual ground survey.
The President is hereby authorized to sell the above lands, in whole or in part,
which are hereby declared alienable and disposable pursuant to the provisions
of existing laws and regulations governing sales of government properties:
Provided, That no sale or disposition of such lands will be undertaken until a
development plan embodying projects for conversion shall be approved by the
President in accordance with paragraph (b), Section 4, of this Act. However, six
(6) months after approval of this Act, the President shall authorize the
Conversion Authority to dispose of certain areas in Fort Bonifacio and Villamor
as the latter so determines. x x x.
xxxx
With respect to the military reservations and their extensions, the President
upon recommendation of the Conversion Authority or the Subic Authority when
it concerns the Subic Special Economic Zone shall likewise be authorized to
sell or dispose those portions of lands which the Conversion Authority or the
Subic Authority may find essential for the development of their projects.
(Underscoring ours)
21
Id.
22
Also transferred to the BCDA were:
Section 7. Transfer of Properties. — Pursuant to paragraph (a), Section 4

hereof, the President shall transfer forthwith to the Conversion Authority:
(a) Station
Area in has.
(more or less)
John Hay Air Station 570
Wallace Air Station 167
O’Donnell Transmitter Station 1,755
San Miguel Naval Communications Station 1,100
Mt. Sta. Rita Station (Hermosa, Bataan)
(b) Such other properties including, but not limited to, portions of Metro Manila
military camps, pursuant to Section 8 of this Act: Provided, however, That the
areas which shall remain as military reservations shall be delineated and
proclaimed as such by the President.
23
24
See R.A. No. 7227, Sec. 8.
25
Section 27 of R.A. No. 7279 authorizes the summary eviction and demolition of
professional squatters, thus:
Sec. 27. Action Against Professional Squatters and Squatting Syndicates. —

The local government units, in cooperation with the Philippine National Police,
the Presidential Commission for the Urban Poor (PCUP), and the PCUP-
accredited urban poor organization in the area, shall adopt measures to identify
and effectively curtail the nefarious and illegal activities of professional
squatters and squatting syndicates, as herein defined.
Any person or group identified as such shall be summarily evicted and their
dwellings or structures demolished, and shall be disqualified to avail of the
benefits of the Program. A public official who tolerates or abets the commission
of the abovementioned acts shall be dealt with in accordance with existing
laws.
26
Rollo, pp. 82-90.
27
Id. at 87.
28
Id. at 107-111.
29
Id. at 112-116.
30
Id. at 125.
31
Id. at 115.
32
Id.
33
260 Phil. 643 (1990).
34
Id. at 653-654.
35
Rollo, pp. 145-149.
36
Id. at 146.
37
Id. at 147-148.
38
Id. at 150-152.
39
Id. at 121-139.
40
Id. at 130, citing Republic v. CA, G.R. No. 84966, November 21, 1991, 204 SCRA
358.
41
Id. at 132-133.
42
Id. at 131.
43
Id. at 130-131.
44
Id. at 127.
45
Id. at 135-136.
46
Executive Order No. 561, Section 3, Paragraph 2(e).
47
Rollo, pp. 55-67.
48
Id. at 71-72.
49
Id. at 35.
50
542 Phil. 86 (2007).
51
Id. at 97-98.
52
Id. at 98.
53
Rollo, p. 244.
54
Id.
55
Id. at 133.
56
See Sketch Plan; id. at 167.
57
G.R. No. 179987, April 29, 2009, 587 SCRA 172.
58
Id. at 204-205.
59
Id. at 203.
60
Id.
Republic v. Ching, G.R. No. 186166, October 20, 2010, 634 SCRA 415, 427, citing
61
Heirs of Mario Malabanan, id. at 210.
See Benin v. Tuason, 156 Phil. 525 (1974); Natalia Realty Corporation v. Vallez, 255
62
Phil. 510 (1989).

63
Isabela Colleges, Inc. v. Heirs of Tolentino-Rivera, 397 Phil. 955, 969 (2000).
64
De Vera-Cruz v. Miguel, 505 Phil. 593, 602-603 (2005).
65
Rollo, p. 65.
66
Id. at 66.
67
Machado v. Gatdula, G.R. No. 156287, February 16, 2010, 612 SCRA 546, 554.
68
Id., citing The United Residents of Dominican Hill, Inc. v. COSLAP, 406 Phil. 354, 366
(2001).
Id. at 554-555, citing Davao New Town Development Corporation v. COSLAP, 498
69
Phil. 530, 545 (2005).
70
Vda. de Herrera v. Bernardo, G.R. No. 170251, June 1, 2011, 650 SCRA 87, 92.
71
491 Phil. 600 (2005).
72
Id. at 618-621.
73
498 Phil. 530 (2005).
74
524 Phil. 533 (2006).
75
535 Phil. 766 (2006).
76
559 Phil. 132 (2007).
77
G.R. No. 182185, September 18, 2009, 600 SCRA 739.
78
79
G.R. No. 170251, June 1, 2011, 650 SCRA 87.
80
Supra note 78, at 558, citing Longino v. Atty. General, supra note 71, at 622.
81
Id. at 558, citing Davao New Town Development Corp. v. COSLAP, supra note 73, at
548.
82
Id. at 557, citing Barranco v. COSLAP, supra note 74, at 547.
83
84
85
Id. at 548-549.
86
Supra note 74, at 547, citing Davao New Town Development Corp. v. COSLAP, supra
note 73, at 546.
87
88
89
90
91
THIRD DIVISION
G.R. No. 191109 July 18, 2012
REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE RECLAMATION

AUTHORITY (PRA),Petitioner,
vs.
CITY OF PARANAQUE, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, on
pure questions of law, assailing the January 8, 2010 Order of the Regional Trial Court, Branch
1
195, Parafiaque City (RTC), which ruled that petitioner Philippine Reclamation Authority (PRA)
is a government-owned and controlled corporation (GOCC), a taxable entity, and, therefore, .
not exempt from payment of real property taxes. The pertinent portion of the said order reads:
In view of the finding of this court that petitioner is not exempt from payment of real property
taxes, respondent Parañaque City Treasurer Liberato M. Carabeo did not act xxx without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or in excess of
jurisdiction in issuing the warrants of levy on the subject properties.
WHEREFORE, the instant petition is dismissed. The Motion for Leave to File and Admit
Attached Supplemental Petition is denied and the supplemental petition attached thereto is not
admitted.
The Public Estates Authority (PEA) is a government corporation created by virtue of

Presidential Decree (P.D.) No. 1084 (Creating the Public Estates Authority, Defining its Powers
and Functions, Providing Funds Therefor and For Other Purposes) which took effect on
February 4,
1977 to provide a coordinated, economical and efficient reclamation of lands, and the
administration and operation of lands belonging to, managed and/or operated by, the
government with the object of maximizing their utilization and hastening their development
consistent with public interest.
On February 14, 1979, by virtue of Executive Order (E.O.) No. 525 issued by then President
Ferdinand Marcos, PEA was designated as the agency primarily responsible for integrating,
directing and coordinating all reclamation projects for and on behalf of the National
Government.
On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O. No. 380
transforming PEA into PRA, which shall perform all the powers and functions of the PEA
relating to reclamation activities.
By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore areas of
Manila Bay, including those located in Parañaque City, and was issued Original Certificates of
Title (OCT Nos. 180, 202, 206, 207, 289, 557, and 559) and Transfer Certificates of Title (TCT
Nos. 104628, 7312, 7309, 7311, 9685, and 9686) over the reclaimed lands.
On February 19, 2003, then Parañaque City Treasurer Liberato M. Carabeo (Carabeo) issued
Warrants of Levy on PRA’s reclaimed properties (Central Business Park and Barangay San
Dionisio) located in Parañaque City based on the assessment for delinquent real property
taxes made by then Parañaque City Assessor Soledad Medina Cue for tax years 2001 and
2002.
On March 26, 2003, PRA filed a petition for prohibition with prayer for temporary restraining
order (TRO) and/or writ of preliminary injunction against Carabeo before the RTC.
On April 3, 2003, after due hearing, the RTC issued an order denying PRA’s petition for the
issuance of a temporary restraining order.
On April 4, 2003, PRA sent a letter to Carabeo requesting the latter not to proceed with the
public auction of the subject reclaimed properties on April 7, 2003. In response, Carabeo sent
a letter stating that the public auction could not be deferred because the RTC had already
denied PRA’s TRO application.
On April 25, 2003, the RTC denied PRA’s prayer for the issuance of a writ of preliminary
injunction for being moot and academic considering that the auction sale of the subject
properties on April 7, 2003 had already been consummated.
On August 3, 2009, after an exchange of several pleadings and the failure of both parties to
arrive at a compromise agreement, PRA filed a Motion for Leave to File and Admit Attached
Supplemental Petition which sought to declare as null and void the assessment for real
property taxes, the levy based on the said assessment, the public auction sale conducted on
April 7, 2003, and the Certificates of Sale issued pursuant to the auction sale.
On January 8, 2010, the RTC rendered its decision dismissing PRA’s petition. In ruling that
PRA was not exempt from payment of real property taxes, the RTC reasoned out that it was a
GOCC under Section 3 of P.D. No. 1084. It was organized as a stock corporation because it
had an authorized capital stock divided into no par value shares. In fact, PRA admitted its
corporate personality and that said properties were registered in its name as shown by the
certificates of title. Therefore, as a GOCC, local tax exemption is withdrawn by virtue of Section
193 of Republic Act (R.A.) No. 7160 Local Government Code (LGC) which was the prevailing
law in 2001 and 2002 with respect to real property taxation. The RTC also ruled that the tax
exemption claimed by PRA under E.O. No. 654 had already been expressly repealed by R.A.
No. 7160 and that PRA failed to comply with the procedural requirements in Section 206
thereof.
Not in conformity, PRA filed this petition for certiorari assailing the January 8, 2010 RTC Order
based on the following GROUNDS
THE TRIAL COURT GRAVELY ERRED IN FINDING THAT PETITIONER IS LIABLE TO PAY
REAL PROPERTY TAX ON THE SUBJECT RECLAIMED LANDS CONSIDERING
THAT PETITIONER IS AN INCORPORATED INSTRUMENTALITY OF THE NATIONAL

GOVERNMENT AND IS, THEREFORE, EXEMPT FROM PAYMENT OF REAL PROPERTY
TAX UNDER SECTIONS 234(A) AND 133(O) OF REPUBLIC ACT 7160 OR THE LOCAL
GOVERNMENT CODE VIS-À-VIS MANILA INTERNATIONAL AIRPORT AUTHORITY V.
COURT OF APPEALS.
II
THE TRIAL COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT RECLAIMED

LANDS ARE PART OF THE PUBLIC DOMAIN AND, HENCE, EXEMPT FROM REAL
PROPERTY TAX.
PRA asserts that it is not a GOCC under Section 2(13) of the Introductory Provisions of the
Administrative Code. Neither is it a GOCC under Section 16, Article XII of the 1987 Constitution
because it is not required to meet the test of economic viability. Instead, PRA is a government
instrumentality vested with corporate powers and performing an essential public service
pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. Although it
has a capital stock divided into shares, it is not authorized to distribute dividends and allotment
of surplus and profits to its stockholders. Therefore, it may not be classified as a stock
corporation because it lacks the second requisite of a stock corporation which is the
distribution of dividends and allotment of surplus and profits to the stockholders.
It insists that it may not be classified as a non-stock corporation because it has no members
and it is not organized for charitable, religious, educational, professional, cultural, recreational,
fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry,
agriculture and like chambers as provided in Section 88 of the Corporation Code.
Moreover, PRA points out that it was not created to compete in the market place as there was
no competing reclamation company operated by the private sector. Also, while PRA is vested
with corporate powers under P.D. No. 1084, such circumstance does not make it a corporation
but merely an incorporated instrumentality and that the mere fact that an incorporated
instrumentality of the National Government holds title to real property does not make said
instrumentality a GOCC. Section 48, Chapter 12, Book I of the Administrative Code of 1987
recognizes a scenario where a piece of land owned by the Republic is titled in the name of a
department, agency or instrumentality.
Thus, PRA insists that, as an incorporated instrumentality of the National Government, it is

exempt from payment of real property tax except when the beneficial use of the real property is
granted to a taxable person. PRA claims that based on Section 133(o) of the LGC, local
governments cannot tax the national government which delegate to local governments the
power to tax.
It explains that reclaimed lands are part of the public domain, owned by the State, thus,
exempt from the payment of real estate taxes. Reclaimed lands retain their inherent potential
as areas for public use or public service. While the subject reclaimed lands are still in its hands,
these lands remain public lands and form part of the public domain. Hence, the assessment of
real property taxes made on said lands, as well as the levy thereon, and the public sale thereof
on April 7, 2003, including the issuance of the certificates of sale in favor of the respondent
Parañaque City, are invalid and of no force and effect.
On the other hand, the City of Parañaque (respondent) argues that PRA since its creation
consistently represented itself to be a GOCC. PRA’s very own charter (P.D. No. 1084) declared
it to be a GOCC and that it has entered into several thousands of contracts where it
represented itself to be a GOCC. In fact, PRA admitted in its original and amended petitions
and pre-trial brief filed with the RTC of Parañaque City that it was a GOCC.
Respondent further argues that PRA is a stock corporation with an authorized capital stock
divided into 3 million no par value shares, out of which 2 million shares have been subscribed
and fully paid up. Section 193 of the LGC of 1991 has withdrawn tax exemption privileges
granted to or presently enjoyed by all persons, whether natural or juridical, including GOCCs.
Hence, since PRA is a GOCC, it is not exempt from the payment of real property tax.
THE COURT’S RULING
The Court finds merit in the petition.
Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines a
GOCC as follows:
SEC. 2. General Terms Defined. – x x x x
(13) Government-owned or controlled corporation refers to any agency organized as a stock or

non-stock corporation, vested with functions relating to public needs whether governmental or
proprietary in nature, and owned by the Government directly or through its instrumentalities
either wholly, or, where applicable as in the case of stock corporations, to the extent of at least
fifty-one
(51) percent of its capital stock: x x x.
On the other hand, Section 2(10) of the Introductory Provisions of the Administrative Code
defines a government "instrumentality" as follows:
SEC. 2. General Terms Defined. –– x x x x
(10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. x x x
From the above definitions, it is clear that a GOCC must be "organized as a stock or non-stock
corporation" while an instrumentality is vested by law with corporate powers. Likewise, when
the law makes a government instrumentality operationally autonomous, the instrumentality
remains part of the National Government machinery although not integrated with the
department framework.
When the law vests in a government instrumentality corporate powers, the instrumentality does
not necessarily become a corporation. Unless the government instrumentality is organized as a
stock or non-stock corporation, it remains a government instrumentality exercising not only
governmental but also corporate powers.
Many government instrumentalities are vested with corporate powers but they do not become
stock or non-stock corporations, which is a necessary condition before an agency or
instrumentality is deemed a GOCC. Examples are the Mactan International Airport Authority,
the Philippine Ports Authority, the University of the Philippines, and Bangko Sentral ng
Pilipinas. All these government instrumentalities exercise corporate powers but they are not
organized as stock or non-stock corporations as required by Section 2(13) of the Introductory
Provisions of the Administrative Code. These government instrumentalities are sometimes
loosely called government corporate entities. They are not, however, GOCCs in the strict sense
as understood under the Administrative Code, which is the governing law defining the legal
relationship and status of government entities. 2
Correlatively, Section 3 of the Corporation Code defines a stock corporation as one whose
"capital stock is divided into shares and x x x authorized to distribute to the holders of such
shares dividends x x x." Section 87 thereof defines a non-stock corporation as "one where no
part of its income is distributable as dividends to its members, trustees or officers." Further,
Section 88 provides that non-stock corporations are "organized for charitable, religious,
educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service,
or similar purposes, like trade, industry, agriculture and like chambers."
Two requisites must concur before one may be classified as a stock corporation, namely: (1)
that it has capital stock divided into shares; and (2) that it is authorized to distribute dividends
and allotments of surplus and profits to its stockholders. If only one requisite is present, it
cannot be properly classified as a stock corporation. As for non-stock corporations, they must
have members and must not distribute any part of their income to said members. 3
In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock
corporation. It cannot be considered as a stock corporation because although it has a capital
stock divided into no par value shares as provided in Section 7 of P.D. No. 1084, it is not
4
authorized to distribute dividends, surplus allotments or profits to stockholders. There is no

provision whatsoever in P.D. No. 1084 or in any of the subsequent executive issuances
pertaining to PRA, particularly, E.O. No. 525, E.O. No. 654 and EO No. 798 that authorizes
5 6 7
PRA to distribute dividends, surplus allotments or profits to its stockholders.
PRA cannot be considered a non-stock corporation either because it does not have members.
A non-stock corporation must have members. Moreover, it was not organized for any of the
8
purposes mentioned in Section 88 of the Corporation Code. Specifically, it was created to
manage all government reclamation projects.
Furthermore, there is another reason why the PRA cannot be classified as a GOCC. Section
16, Article XII of the 1987 Constitution provides as follows:
Section 16. The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the common
good and subject to the test of economic viability.
The fundamental provision above authorizes Congress to create GOCCs through special
charters on two conditions: 1) the GOCC must be established for the common good; and 2) the
GOCC must meet the test of economic viability. In this case, PRA may have passed the first
condition of common good but failed the second one - economic viability. Undoubtedly, the
purpose behind the creation of PRA was not for economic or commercial activities. Neither was
it created to compete in the market place considering that there were no other competing
reclamation companies being operated by the private sector. As mentioned earlier, PRA was
created essentially to perform a public service considering that it was primarily responsible for
a coordinated, economical and efficient reclamation, administration and operation of lands
belonging to the government with the object of maximizing their utilization and hastening their
development consistent with the public interest. Sections 2 and 4 of P.D. No. 1084 reads, as
follows:
Section 2. Declaration of policy. It is the declared policy of the State to provide for a
coordinated, economical and efficient reclamation of lands, and the administration and
operation of lands belonging to, managed and/or operated by the government, with the object
of maximizing their utilization and hastening their development consistent with the public
interest.
Section 4. Purposes. 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 services as may be necessary for the
efficient, economical and beneficial utilization of the above properties.
The twin requirement of common good and economic viability was lengthily discussed in the
case of Manila International Airport Authority v. Court of Appeals, the pertinent portion of which
9
reads:
Third, the government-owned or controlled corporations created through special charters are
those that meet the two conditions prescribed in Section 16, Article XII of the Constitution.
The first condition is that the government-owned or controlled corporation must be established
for the common good. The second condition is that the government-owned or controlled
corporation must meet the test of economic viability. Section 16, Article XII of the 1987
Constitution provides:
SEC. 16. The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the common
good and subject to the test of economic viability.
The Constitution expressly authorizes the legislature to create "government-owned or

controlled corporations" through special charters only if these entities are required to meet the
twin conditions of common good and economic viability. In other words, Congress has no
power to create government-owned or controlled corporations with special charters unless they
are made to comply with the two conditions of common good and economic viability. The test
of economic viability applies only to government-owned or controlled corporations that perform
economic or commercial activities and need to compete in the market place. Being essentially
economic vehicles of the State for the common good — meaning for economic development
purposes — these government-owned or controlled corporations with special charters are
usually organized as stock corporations just like ordinary private corporations.
In contrast, government instrumentalities vested with corporate powers and performing

governmental or public functions need not meet the test of economic viability. These
instrumentalities perform essential public services for the common good, services that every
modern State must provide its citizens. These instrumentalities need not be economically
viable since the government may even subsidize their entire operations. These
instrumentalities are not the "government-owned or controlled corporations" referred to in
Section 16, Article XII of the 1987 Constitution.
Thus, the Constitution imposes no limitation when the legislature creates government
instrumentalities vested with corporate powers but performing essential governmental or public
functions. Congress has plenary authority to create government instrumentalities vested with
corporate powers provided these instrumentalities perform essential government functions or
public services. However, when the legislature creates through special charters corporations
that perform economic or commercial activities, such entities — known as "government-owned
or controlled corporations" — must meet the test of economic viability because they compete in
the market place.
This is the situation of the Land Bank of the Philippines and the Development Bank of the
Philippines and similar government-owned or controlled corporations, which derive their
incometo meet operating expenses solely from commercial transactions in competition with the
private sector. The intent of the Constitution is to prevent the creation of government-owned or
controlled corporations that cannot survive on their own in the market place and thus merely
drain the public coffers.
Commissioner Blas F. Ople, proponent of the test of economic viability, explained to the
Constitutional Commission the purpose of this test, as follows:
MR. OPLE: Madam President, the reason for this concern is really that when the government
creates a corporation, there is a sense in which this corporation becomes exempt from the test
of economic performance. We know what happened in the past. If a government corporation
loses, then it makes its claim upon the taxpayers' money through new equity infusions from the
government and what is always invoked is the common good. That is the reason why this year,
out of a budget of P115 billion for the entire government, about P28 billion of this will go into
equity infusions to support a few government financial institutions. And this is all taxpayers'
money which could have been relocated to agrarian reform, to social services like health and
education, to augment the salaries of grossly underpaid public employees. And yet this is all
going down the drain.
Therefore, when we insert the phrase "ECONOMIC VIABILITY" together with the "common
good," this becomes a restraint on future enthusiasts for state capitalism to excuse themselves
from the responsibility of meeting the market test so that they become viable. And so, Madam
President, I reiterate, for the committee's consideration and I am glad that I am joined in this
proposal by Commissioner Foz, the insertion of the standard of "ECONOMIC VIABILITY OR
THE ECONOMIC TEST," together with the common good. 1âwphi1
Father Joaquin G. Bernas, a leading member of the Constitutional Commission, explains in his
textbook The 1987 Constitution of the Republic of the Philippines: A Commentary:
The second sentence was added by the 1986 Constitutional Commission. The significant
addition, however, is the phrase "in the interest of the common good and subject to the test of
economic viability." The addition includes the ideas that they must show capacity to function
efficiently in business and that they should not go into activities which the private sector can do
better. Moreover, economic viability is more than financial viability but also includes capability
to make profit and generate benefits not quantifiable in financial terms.
Clearly, the test of economic viability does not apply to government entities vested with
corporate powers and performing essential public services. The State is obligated to render
essential public services regardless of the economic viability of providing such service. The
non-economic viability of rendering such essential public service does not excuse the State
from withholding such essential services from the public.
However, government-owned or controlled corporations with special charters, organized

essentially for economic or commercial objectives, must meet the test of economic viability.
These are the government-owned or controlled corporations that are usually organized under
their special charters as stock corporations, like the Land Bank of the Philippines and the
Development Bank of the Philippines. These are the government-owned or controlled
corporations, along with government-owned or controlled corporations organized under the
Corporation Code, that fall under the definition of "government-owned or controlled
corporations" in Section 2(10) of the Administrative Code. [Emphases supplied]
This Court is convinced that PRA is not a GOCC either under Section 2(3) of the Introductory
Provisions of the Administrative Code or under Section 16, Article XII of the 1987 Constitution.
The facts, the evidence on record and jurisprudence on the issue support the position that PRA
was not organized either as a stock or a non-stock corporation. Neither was it created by
Congress to operate commercially and compete in the private market. Instead, PRA is a
government instrumentality vested with corporate powers and performing an essential public
service pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code.
Being an incorporated government instrumentality, it is exempt from payment of real property
tax.
Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands managed
by PRA. On the other hand, Section 234(a) of the LGC, in relation to its Section 133(o),
exempts PRA from paying realty taxes and protects it from the taxing powers of local
government units.
Sections 234(a) and 133(o) of the LGC provide, as follows:
SEC. 234. Exemptions from Real Property Tax – The following are exempted from payment of
(a) Real property owned by the Republic of the Philippines or any of its political subdivisions
except when the beneficial use thereof has been granted, for consideration or otherwise, to a
taxable person.
xxxx
SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. – Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
xxxx
(o) Taxes, fees or charges of any kinds on the National Government, its agencies and
instrumentalities, and local government units. [Emphasis supplied]
It is clear from Section 234 that real property owned by the Republic of the Philippines (the
Republic) is exempt from real property tax unless the beneficial use thereof has been granted
to a taxable person. In this case, there is no proof that PRA granted the beneficial use of the
subject reclaimed lands to a taxable entity. There is no showing on record either that PRA
leased the subject reclaimed properties to a private taxable entity.
This exemption should be read in relation to Section 133(o) of the same Code, which prohibits
local governments from imposing "taxes, fees or charges of any kind on the National
Government, its agencies and instrumentalities x x x." The Administrative Code allows real
property owned by the Republic to be titled in the name of agencies or instrumentalities of the
national government. Such real properties remain owned by the Republic and continue to be
exempt from real estate tax.
Indeed, the Republic grants the beneficial use of its real property to an agency or
instrumentality of the national government. This happens when the title of the real property is
transferred to an agency or instrumentality even as the Republic remains the owner of the real
property. Such arrangement does not result in the loss of the tax exemption, unless "the
beneficial use thereof has been granted, for consideration or otherwise, to a taxable person." 10
The rationale behind Section 133(o) has also been explained in the case of the Manila
International Airport Authority, to wit:
11
Section 133(o) recognizes the basic principle that local governments cannot tax the national
government, which historically merely delegated to local governments the power to tax. While
the 1987 Constitution now includes taxation as one of the powers of local governments, local
governments may only exercise such power "subject to such guidelines and limitations as the
Congress may provide."
When local governments invoke the power to tax on national government instrumentalities,
such power is construed strictly against local governments. The rule is that a tax is never
presumed and there must be clear language in the law imposing the tax. Any doubt whether a
person, article or activity is taxable is resolved against taxation. This rule applies with greater
force when local governments seek to tax national government instrumentalities.
Another rule is that a tax exemption is strictly construed against the taxpayer claiming the
exemption. However, when Congress grants an exemption to a national government
instrumentality from local taxation, such exemption is construed liberally in favor of the national
government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.:
The reason for the rule does not apply in the case of exemptions running to the benefit of the
government itself or its agencies. In such case the practical effect of an exemption is merely to
reduce the amount of money that has to be handled by government in the course of its
operations. For these reasons, provisions granting exemptions to government agencies may
be construed liberally, in favor of non tax-liability of such agencies.
There is, moreover, no point in national and local governments taxing each other, unless a
sound and compelling policy requires such transfer of public funds from one government
pocket to another.
There is also no reason for local governments to tax national government instrumentalities for
rendering essential public services to inhabitants of local governments. The only exception is
when the legislature clearly intended to tax government instrumentalities for the delivery of
essential public services for sound and compelling policy considerations. There must be
express language in the law empowering local governments to tax national government
instrumentalities. Any doubt whether such power exists is resolved against local governments.
Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in
the Code, local governments cannot tax national government instrumentalities. As this Court
held in Basco v. Philippine Amusements and Gaming Corporation:
The states have no power by taxation or otherwise, to retard, impede, burden or in any manner
control the operation of constitutional laws enacted by Congress to carry into execution the
powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
"Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of
the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or
political subdivision can regulate a federal instrumentality in such a way as to prevent it from
consummating its federal responsibilities, or even to seriously burden it in the accomplishment
of them." (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what
local authorities may perceive to be undesirable activities or enterprise using the power to tax
as "a tool for regulation." (U.S. v. Sanchez, 340 US 42)
The power to tax which was called by Justice Marshall as the "power to destroy" (McCulloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity
which has the inherent power to wield it. [Emphases supplied]
The Court agrees with PRA that the subject reclaimed lands are still part of the public domain,
owned by the State and, therefore, exempt from payment of real estate taxes.
Section 2, Article XII of the 1987 Constitution reads in part, as follows:
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. The State may
directly undertake such activities, or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or associations at least 60
per centum of whose capital is owned by such citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for not more than twenty-five years, and under
such terms and conditions as may provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of waterpower, beneficial use
may be the measure and limit of the grant.
Similarly, Article 420 of the Civil Code enumerates properties belonging to the State:
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. [Emphases supplied]
Here, the subject lands are reclaimed lands, specifically portions of the foreshore and offshore
areas of Manila Bay. As such, these lands remain public lands and form part of the public
domain. In the case of Chavez v. Public Estates Authority and AMARI Coastal Development
Corporation, the Court held that foreshore and submerged areas irrefutably belonged to the
12
public domain and were inalienable unless reclaimed, classified as alienable lands open to
disposition and further declared no longer needed for public service. The fact that alienable
lands of the public domain were transferred to the PEA (now PRA) and issued land patents or
certificates of title in PEA’s name did not automatically make such lands private. This Court
also held therein that reclaimed lands retained their inherent potential as areas for public use
or public service.
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. 13
Likewise, it is worthy to mention Section 14, Chapter 4, Title I, Book III of the Administrative
Code of 1987, thus:
SEC 14. Power to Reserve Lands of the Public and Private Dominion of the Government.-
(1)The President shall have the power to reserve for settlement or public use, and for specific
public purposes, any of the lands of the public domain, the use of which is not otherwise
directed by law. The reserved land shall thereafter remain subject to the specific public purpose
indicated until otherwise provided by law or proclamation.
Reclaimed lands such as the subject lands in issue are reserved lands for public use. They are
properties of public dominion. The ownership of such lands remains with the State unless they
are withdrawn by law or presidential proclamation from public use.
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.
As the Court has repeatedly ruled, properties of public dominion are not subject to execution or
foreclosure sale. Thus, the assessment, levy and foreclosure made on the subject reclaimed
14
lands by respondent, as well as the issuances of certificates of title in favor of respondent, are
without basis.
WHEREFORE, the petition is GRANTED. The January 8, 2010 Order of the Regional Trial
Court, Branch 195, Parañaque City, is REVERSED and SET ASIDE. All reclaimed properties
owned by the Philippine Reclamation Authority are hereby declared EXEMPT from real estate
taxes. All real estate tax assessments, including the final notices of real estate tax
delinquencies, issued by the City of Parañaque on the subject reclaimed properties; the
assailed auction sale, dated April 7, 2003; and the Certificates of Sale subsequently issued by
the Parañaque City Treasurer in favor of the City of Parañaque, are all declared VOID.
SO ORDERED.
JOSE CATRLA MENDOZA

Associate justice
WE CONCUR:
DIOSDADO M. PERALTA
Associate justice
Acting Chairperson
MARIANO C. DEL CASTILLO* ROBERTO A. ABAD

Associate justice
ATT E STATI O N
DIOSDADO M. PERALTA
Associate justice
Acting Chairperson, Third Division
I certify that the conclusions in the above Decision had been reached in consultation before the
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. No. 926, The Judiciary Act of 1948, as amended)
Footnotes
* Designated Additional Member in lieu of Associate Justice Presbitero J. Velasco, Jr.,

per Raffle dated July 18, 2012.
1
Rollo, pp. 50-55.
2
Manila International Airport Authority v. Court of Appeals, G.R. No. 155650, July 20,
2006, 495 SCRA 618-619.
3
Philippine Fisheries Development Authority v. Court of Appeals, G.R. No. 169836, July
31, 2007, 528 SCRA 706, 712.
4
Section 7. Capital Stock. The Authority shall have an authorized capital stock divided
into THREE MILLION (3,000,000) no par value shares to be subscribed and paid for as
follows:
(a) TWO MILLION (2,000,000) shares shall be originally subscribed and

paid for by the Republic of the Philippines by the transfer, conveyance
and assignment of all the rights and interest of the Republic of the
Philippines in that contract executed by and between the Construction
and Development Corporation of the Philippines and the Bureau of
Public Highways on November 20, 1973 the fair value of such rights
and interests to be determined by the Board of Directors and approved
by the President of the Philippines and the amount of FIVE MILLION (₱
5,000,000.00) PESOS in cash;
(b) The remaining ONE MILLION (1,000,000) shares of stock may be

subscribed and paid for by the Republic of the Philippines or by
government financial institutions at values to be determined by the
Board and approved by the President of the Philippines.
The fair value of the interests hereby transferred shall, for all intents and
purposes, be considered as paid-up capital pertaining to the government of the
Republic of the Philippines in the Authority.
The voting power pertaining to the shares of stock subscribed by the

government of the Republic of the Philippines shall be vested in the President
of the Philippines or in such person or persons as he may designate.
5
Entitled "Designating the Public Estates Authority as the Agency primarily responsible
for all Reclamation Projects" dated February 14, 1979.
Entitled "Further Defining Certain Functions and Powers of the Public Estates
6
Authority" dated February 26, 1981.

7
Entitled "Transferring the Philippine Reclamation Authority from the Department of
Public Works and Highways to the Department of Environment and Natural Resources"
dated May 14, 2009.
8
Manila International Airport Authority v. Court of Appeals, supra note 2.
9
Id.
10
Local Government Code, Section 234(a).
11
Supra note 2.
12
433 Phil. 506, 589 (2002).
13
Id. at 584-585.
14
Manila International Airport Authority v. Court of Appeals, supra note 2.
SECOND DIVISION
MANUEL ALMAGRO joined by his G.R. Nos. 175806 and 175810
spouse, ELIZABETH ALMAGRO,
Petitioners,
- versus -
SALVACION C. KWAN, WILLIAM

C. KWAN, VICTORIA C. KWAN,
assisted by her husband, JOSE A.
ARBAS, and CECILIA C. KWAN,
Respondents.
x------------------------x
MARGARITA PACHORO, DRONICA G.R. No. 175849
ORLINA, PIO TUBAT, JR., ANDRES
TUBAT, EDUVIGIS KISKIS, ELSA Present:
BIALBER, NOELA TUBAT, ELSA TUBAT,
and ROGELIO DURAN, CARPIO, J., Chairperson,
NACHURA,
Petitioners, LEONARDO-DE CASTRO,*
PERALTA, and
MENDOZA, JJ.
- versus -
WILLIAM C. KWAN, SALVACION C.

KWAN, VICTORIA C. KWAN,
assisted by her husband, JOSE A.
ARBAS, and CECILIA C. KWAN,
Respondents. Promulgated:
October 20, 2010

x--------------------------------------------------x
DECISION
CARPIO, J.:
This is a consolidation of two separate petitions for review, [1] assailing the 4
April 2006 Decision[2] and the 31 October 2006 Resolution [3] of the Court of
Appeals in CA-G.R. SP Nos. 71237 and 71437.
This case involves Lot No. 6278-M, a 17,181 square meter parcel of land
covered by TCT No. T-11397. Lot No. 6278-M is located at Maslog, Sibulan,
Negros Oriental and is registered in the name of spouses Kwan Chin and
Zosima Sarana. Respondents are the legitimate children of spouses Kwan
Chin and Zosima Sarana, who both died intestate on 2 November 1986 and 23
January 1976, respectively, in Dumaguete City. Upon the death of their
parents, respondents inherited Lot No. 6278-M through hereditary succession.
On 18 September 1996, respondents filed with the Municipal Trial Court

(MTC) an action for recovery of possession and damages against spouses
Rogelio and Lourdes Duran, spouses Romulo Vinalver and Elsa Vinalver,
[4]
spouses Marte[5] Bati-on and Liz E. Bati-on, spouses Pablo Deciar and
Marlyn Deciar, spouses Salvador Palongpalong and Bienvenida Palongpalong,
spouses Sabas Kiskis and Eduvigis Kiskis, spouses Pio Tubat, Jr. and
Encarnita Tubat, spouses Andres Tubat and Leonides Tubat, spouses George
Tubat and Noela Tubat, spouses Dodong Go and Alice Go, spouses Delano
Bangay and Maria Bangay,[6] spouses Simeon Pachoro and Margarita Pachoro,
spouses Cepriano[7] Tubat and Elsa Tubat, spouses Jovito Remolano and
Editha Orlina Remolano, spouses Nelson Miravalles and Erlene Miravalles,
Dronica Orlina,[8] Clarita Barot Lara, Conchita Orlina, Antonia Malahay and
the Philippine National Police (PNP),[9] Agan-an, Sibulan, Negros Oriental.
Subsequently, spouses Manuel Almagro and Elizabeth Almagro intervened as
successors-in-interest of spouses Delano Bangay and Maria Bangay.
During pre-trial, the parties agreed to refer the case to the Chief of the Land
Management Services Division, PENRO-DENR, Dumaguete City, to conduct
a verification survey of Lot No. 6278-M. When the PENRO personnel failed
to conduct the verification survey, the court and the parties designated
Geodetic Engineer Jorge Suasin, Sr. (Engr. Suasin) as joint commissioner to
do the task. Engr. Suasin conducted the verification and relocation survey
of Lot No. 6278-M on 12-13 September 2000 in the presence of the parties,
some of their lawyers, and the MTC Clerk of Court. Thereafter, Engr. Suasin
submitted a written report with the following findings:
WRITTEN REPORT
Comes now, the undersigned Geodetic Engineer Jorge S. Suasin, Sr., to this
Honorable Court, most respectfully submit the following written report of
the verification and relocation survey of the lot 6278-M located at Maslog,
Sibulan, Negros Oriental with T.C.T. No. T-11397 owned by Salvacion G.
Kwan, et al.
A. That a big portion of the lot is submerged under the sea and only a small
portion remain as dry land.
B. That some of the defendants have constructed their buildings or houses

inside the dry land while others have constructed outside or only a small
portion of their buildings or houses are on the said dry land.
The defendants and their buildings or houses are as follows:
1. Sps. Rogelio Duran . . . . . . . . . . . . . . . . . . . . . . . . . inside

2. Sps. Romulo Vinalver. . . . . . . . . . . . . . . . . . . . . . . inside
3. Sps. Marto Bati-on . . . . . . . . . . . . . . . . . . . . . . . . . inside
4. Sps. Salvador Palongpalong . . . . . . . . . . . . . . . . . . inside
5. Sps. Pablo Deciar . . . . . . . . . . . . . . . . . . . . . . . . . . inside
6. Sps. Sabas Kiskis . . . . . . . . . . . . . . . . . . . . . . . . . . .inside
7. Sps. Pio Tubat, Jr. . . . . . . . . . . . . . . . . . . . . . . . 2 houses, the first house a
portion, and the second one - inside
8. Sps. Andres Tubat . . . . . . . . . . . . . . . . . . . . . . . . . . inside
9. Sps. George Tubat . . . . . . . . . . . . . . . . . . . . . . . . . . portion
10. Sps. Dodong Go . . . . . . . . . . . . . . . . . . . . . . . . . . inside
11. Sps. Delano Bangay-Almagro . . . . . . . . . . . . . . . . portion
12. Sps. Simeon Pachoro . . . . . . . . . . . . . . . . . . . . . . . inside
13. Sps. Cipriano Tubat . . . . . . . . . . . . . . . . . . . . . . . . inside
14. Sps. Jovito Remolano . .. . . . . . . . . . . . . . . . . . . . . inside
15. Sps. Nelson Miravalles . . . . . . . . . . . . . . . . . . . . . cottage and
house - outside
16. Monica Orlina . . . . . . . . . . . . . . . . . . . . . . . . . . . . cottage inside
and house -
portion
17. Clarita Barot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . outside
18. Conchita Orlina . . . . . . . . . . . . . . . . . . . . . . . . . . . outside
19. Antonia Malahay . . . . . . . . . . . . . . . . . . . . . . . . . . outside
The verification and relocation survey was executed last September 12-13,
2000 with the presence of both parties and of the Clerk of Court. The cost of
the survey was FIFTEEN THOUSAND PESOS (P15,000) shouldered by the
plaintiffs and the defendants equally.
Enclosed are a blue print of the sketch plan and a xerox copy of the land title
of the said lot.
Respectfully submitted by:
(Sgd) JORGE SUASIN, SR.

Geodetic Engineer[10]
After the court admitted Engr. Suasin's report and the pleadings of the parties,
respondents filed a motion for judgment on the pleadings, which the MTC
granted.
In its Judgment dated 11 May 2001, the MTC dismissed the complaint on the
ground that the remaining dry portion of Lot No. 6278-M has become
foreshore land and should be returned to the public domain. The MTC
explained:
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. 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.
The term foreshore land clearly does not include submerged lands.
From these definitions, it is safe to conclude that the remaining dry portion of
Lot No. 6278-M is now foreshore land. A big portion of the said lot is
presently underwater or submerged under the sea. When the sea moves
towards the estate and the tide invades it, the invaded property becomes
foreshore land and passes to the realm of public domain. The subject land,
being foreshore land, should therefore be returned to the public domain.
Besides, Article 420 of the Civil Code provides:
Art. 420. The following thin[g]s 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;
Plaintiff cannot use the doctrine of indefeasibility of their Torrens title, as

property in question is clearly foreshore land. At the time of its registration,
property was along the shores. In fact, it is bounded by the Taon Strait on the
NW along lines 2-3-4. The property was of public dominion and should not
have been subject of registration. The survey showed that the sea had
advanced and the waves permanently invaded a big portion of the property
making the land part of the shore or the beach. The remaining dry land is
foreshore and therefore should be returned to the public domain.[11]
Respondents appealed to the Regional Trial Court (RTC). The RTC
conducted ocular inspections of Lot No. 6278-M on two separate dates: on 5
October 2001 during low tide and on 15 October 2001 when the high tide
registered 1.5 meters. All the parties and their lawyers were notified before the
two ocular inspections were conducted. During the ocular inspections, in
which some parties and their lawyers were present, the RTC observed that the
small portion referred to by Engr. Suasin as dry land in his report actually
remained dry even during high tide.[12] Thus, the RTC concluded that the
disputed remaining portion of Lot No. 6278-M is not foreshore land. The RTC
stated:
It is the Court's considered view that the small portion of plaintiff's property
which remains as dry land is not within the scope of the well-settled
definition of foreshore and foreshore land as mentioned above. For one
thing, the small dry portion is not adjacent to the sea as the term adjacent as
defined in Webster's Dictionary means contiguous or touching one another or
lying next to. Secondly, the small dry portion is not alternately wet and dry
by the ordinary flow of the tides as it is dry land. Granting, as posited by
defendants, that at certain times of the year, said dry portion is reached by
the waves, then that is not anymore caused by the ordinary flow of the tide as
contemplated in the above definition. The Court then finds that the testimony
of Engr. Suasin dovetails with the import and meaning of foreshore and
foreshore land as defined above.
Anent the case of Republic vs. Court of Appeals, 281 SCRA 639, also cited
in the appealed judgment, the same has a different factual milieu. Said case
involves a holder of a free patent on a parcel of land situated at
Pinagtalleran, Caluag, Quezon who mortgaged and leased portions thereof
within the prescribed five-year period from the date of issuance of the patent.
It was established in said case that the land subject of the free patent is five
(5) to six (6) feet deep under water during high tideand two (2) feet deep
at low tide. Such is not the situation of the remaining small dry portion
which plaintiffs seek to recover in the case at bar.[13]
On 8 January 2002, the RTC rendered its Decision, [14] the dispositive portion of
which reads:
WHEREFORE, all told and circumspectly considered, the appealed judgment

is hereby reversed and set aside insofar as it states that plaintiffs are not
entitled to recover possession of the property in question.
Plaintiffs-appellants have the right to recover possession of the remaining
small dry portion of the subject property in question. It is further ordered to
remand this case to the court of origin for the reception of further evidence to
determine who among the defendants-appellees are builders or possessors in
good faith and who are not and once determined, to apply accordingly the
pertinent laws and jurisprudence on the matter.
SO ORDERED.[15]
Petitioners moved for reconsideration, which the RTC denied in its

Order[16] dated 6 May 2002.
Petitioners filed separate petitions for review with the Court of Appeals,
alleging that the disputed portion of Lot No. 6278-M is no longer private land
but has become foreshore land and is now part of the public domain.
The Ruling of the Court of Appeals
On 4 April 2006, the Court of Appeals promulgated its decision, affirming

with modification the RTC Decision. The dispositive portion of the Court of
Appeals Decision[17] reads:
WHEREFORE, the instant petitions for review are DENIED. And the
Decision dated January 8, 2002 of Branch 38 of the Regional Trial Court of
Dumaguete City is hereby AFFIRMED with MODIFICATION as regards
the dispositive portion only. Based on the written report of Geodetic Engr.
Suasin categorically indentifying who among herein petitioners are illegally
occupying a portion of Lot No. 6278-M, the following petitioners
are ordered to vacate the premises and/or remove the houses and/or
cottages constructed on Lot No. 6278-M within thirty (30) days from
finality of judgment, namely: 1)Sps. Rogelio Duran, 2) Sps. Romulo
Vinalver, 3) Sps. Marto Bati-on, 4) Sps. Salvador Palongpalong, 5) Sps.
Pablo Deciar, 6) Sps. Sabas Kiskis, 7) Sps. Pio Tubat, Jr. (first house
portion, second house inside), 8) Sps. Andres Tubat, 9) George Tubat
(portion), 10) Sps. Dodong Go, 11) Sps. Delano Bangay-Almagro (portion),
12) Sps. Simeon Pachoro, 13) Sps. Cipriano Tubat, 14) Sps. Jovito
Remolano and 15) Monica Orlina (cottageinside and house portion).
Costs against petitioners.
SO ORDERED.[18]
In modifying the RTC Decision, the Court of Appeals explained:
Lastly, the argument that the RTC decision was vague and indefinite is
utterly bereft of merit. We have found no reversible error in the appreciation
of the facts and in the application of the law by the RTC which will warrant
the reversal of the questioned decision. However, litigation must end and
terminate sometime and somewhere, and it is essential to the administration
of justice that the issues or causes therein should be laid to rest. Hence, in
keeping with this principle, We modify the assailed decision insofar as the
dispositive portion is concerned. It is our considered view that there is no
longer a need to determine who among the petitioners are builders in good
faith or not considering that it has been established in the MTC that they
knew all along that the subject lot is a titled property. As such, petitioners
should vacate and/or demolish the houses and/or cottages they constructed
on Lot No. 6278-M as stated in the written report of Geodetic Engineer
Jorge S. Suasin, Sr. Remanding this case to the court of origin would not
only unduly prolong the resolution of the issues of this case, but would also
subject the parties to unnecessary expenses.[19]
Hence, these consolidated petitions.
The Issue
The primary issue in this case is whether the disputed portion of Lot No.
6278-M is still private land or has become foreshore land which forms part of
the public domain.
The Ruling of the Court
We find the petitions without merit.
Petitioners contend that the disputed portion of Lot No. 6278-M is already
foreshore land. In fact, most of them allegedly have foreshore lease permits
from the Department of Environment and Natural Resources (DENR) on the
said foreshore land.
However, petitioners failed to present evidence to prove their claim that they
are holders of foreshore lease permits from the DENR. Thus, the RTC Order
dated 6 May 2002 stated:
Defendants-appellees have been harping that they have been granted
foreshore leases by DENR. However, this is merely lip service and not
supported at all by concrete evidence. Not even an iota of evidence was
submitted to the lower court to show that defendants-appellees herein have
been granted foreshore leases.[20]
Although the MTC concluded that the subject land is foreshore land, we find
such conclusion contrary to the evidence on record.
It is undisputed that the subject land is part of Lot No. 6278-M, which is
covered by TCT No. T-11397, registered in the name of respondents' parents,
Kwan Chin and Zosimo Sarana. In fact, as found by the Court of Appeals,
even the Provincial Environment and Natural Resources Officer (PENRO)
declared in May 1996 that Lot No. 6278-M is a private property covered by a
Torrens Title and that petitioners should vacate the disputed property or make
other arrangements with respondents.[21]
Furthermore, from the report of Engr. Suasin, the geodetic engineer designated
by the court and the parties as joint commissioner to conduct the survey, it can
be clearly gleaned that the contested land is the small portion of dry land of
Lot No. 6278-M.Even in his testimony, Engr. Suasin was adamant in stating
that the remaining portionof Lot No. 6278-M is not foreshore because it is
already dry land and is away from the shoreline. [22] Because of this apparent
contradiction between the evidence and the conclusion of the MTC, the RTC
conducted ocular inspection twice, during low tide and high tide, and observed
that the disputed portion of Lot No. 6278-M actually remained dry land even
during high tide. Thus, the RTC concluded that the said land is not foreshore
land. On appeal, the Court of Appeals adopted the findings and conclusion of
the RTC that the disputed land is not foreshore land and that it remains as
private land owned by respondents.
We are in accord with the conclusion of the Court of Appeals and the RTC that
the disputed land is not foreshore land. To qualify as foreshore land, it must be
shown that the land lies between the high and low water marks and is
alternately wet and dry according to the flow of the tide. [23] The land's
proximity to the waters alone does not automatically make it a foreshore land.
[24]
Thus, in Republic of the Philippines v. Lensico,[25] the Court held that although
the two corners of the subject lot adjoins the sea, the lot cannot be considered
as foreshore land since it has not been proven that the lot was covered by
water during high tide.
Similarly in this case, it was clearly proven that the disputed land remained
dry even during high tide. Indeed, all the evidence supports the conclusion that
the disputed portion of Lot No. 6278-M is not foreshore land but remains
private land owned by respondents.
WHEREFORE, we DENY the petitions. We AFFIRM the 4 April 2006

Decision and the 31 October 2006 Resolution of the Court of Appeals in CA-
G.R. SP Nos. 71237 and 71437.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
ANTONIO EDUARDO B. NACHURA

Associate Justice
TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

JOSE C. MENDOZA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
*
Designated additional member per Special Order No. 905 dated 5 October 2010.
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[2]
Rollo (G.R. Nos. 175806 and 175810), pp. 28-43. Penned by Associate Justice Ramon M. Bato, Jr. with
Associate Justices Isaias P. Dicdican and Apolinario D. Bruselas, Jr., concurring.
[3]
Id. at 50-51.
[4]
Also spelled as Bialber in the title of the case.
[5]
Also spelled as Marto.
[6]
Stated as Sps. Delano Bangay-Almagro in the Written Report of Engr. Suasin.
[7]
Also spelled as Cirpriano.
[8]
Also spelled as Monica Orlina in the Written Report of Engr. Suasin.
[9]
The PNP, through its Provincial Director Paneda, filed a manifestation, acknowledging and respecting the
ownership of respondents over Lot No. 6278-M and stating that demolition of its building would be
done before the year 1996 ended. Thus, the PNP prayed that the case against them be
dismissed; rollo (G.R. Nos. 175806 and 175810), p. 63.
[10]
Rollo (G.R. Nos. 175806 and 175810), pp. 67-68; MTC Judgment dated 11 May 2001, pp. 5-6.
[11]
Rollo (G.R. Nos. 175806 and 175810), pp. 68-69.
[12]
Id. at 80.
[13]
Id. at 81. (Underscoring in the original)
[14]
Id. at 71-84.
[15]
Id. at 84.
[16]
Id. at 85-89.
[17]
Id. at 28-43.
[18]
Id. at. 42. (Emphasis in the original)
[19]
Id. at 41.
[20]
Id. at 88.
[21]
Id. at 37.
[22]
Id. at 79.
[23]
Republic v. Leonor, G.R. No. 161424, 23 December 2009, 609 SCRA 75.
[24]
Id.
[25]
503 Phil. 967 (2005).

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FIRST DIVISION

G.R. No. 195003

CITY OF BATANGAS, represented by Hon. Severina Vilma Abaya, in her capacity as

City Mayor of Batangas, Petitioner

Panlungsod) of the City of Batangas (Batangas City). 8

Panlungsod is the legislative body of Batangas City.

Philippine Shell Petroleum Corporation (PSPC) is a duly organized Philippine corporation

Shell Philippines Exploration, B.V. (SPEX) is a foreign corporation licensed to do business in

SECTION 3. - MANDATORY REQUIREMENT FOR THE APPROVAL OF HEAVY INDUSTRIES

SECTION 5. - AUTHORITY TO GRANT EXEMPTION FROM THE CONSTRUCTION OF

5.3. A public hearing is conducted.

SECTION 9. ADMINISTRATIVE FINE. - An administrative fine/penalty of ₱5,000.00 per day of

Proceedings before the RTC

(Intervention) praying for the same relief. 19

consolidated with the PSPC Petition for joint trial. 21

and JG Summit petitions. The dispositive portion of said Decision reads:

study in this wise:

1. A water balance x x x calculation of the Tabangao-Malitam groundwater system shows that

Proceedings before the CA

"The utilization, explo[i]tation, development, conservation and protection of water resources

x x x The police power of the Sangguniang Panglungsod is subordinate to the constitutional

SO ORDERED. (Emphasis supplied)

ten (10) days therefrom to file their comment.

2011 on even date. 63

These assertions lack merit.

The amendment of the Petition should be allowed in the interest of justice.

2. The first paragraph on page 5 of the Petition for Review on Certiorari x x x;

Should be amended to appear as:

out under the Water Code itself. 81

with approval, the Joint Decision of the CA Fourth Division:

none is present in this case.

to an ordinance prevails only in the absence of some factual foundation of record

ALFREDO BENJAMIN S. CAGUIOA

MARIA LOURDES P.A. SERENO

TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO

and Executive Order No. 124-A, series of 1987.

Justices Fernanda Lampas Peralta and Apolinario D. Bruselas, Jr. concurring.

modification, cancellation and revocation of water permits provide:

Article 28. Water permits shall continue to be valid as long as water is

G.R. No. 183416, October 05, 2016

PROVINCIAL ASSESSOR OF AGUSAN DEL SUR, Petitioner, v. FILIPINAS PALM OIL

A.) P270,000.00 per kilometer for primary roads

A.) P105,000.00 for primary roads

SO ORDERED.27 (Emphasis supplied)

(o) "Machinery" embraces machines, equipment, mechanical contrivances, instruments, appliances or

Article 415. The following are immovable property:

On November 20, 2009, respondent filed its Comment.55 chanrobleslaw

[S]ection 232 must be deemed to qualify Section 133.

As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons,

"(1) All Taxes on the Land

"(2) Administration Charges

(o) "Machinery" embraces machines, equipment, mechanical contrivances, instruments, appliances or

Article 415. The following are immovable property:

Carpio, (Chairperson), Del Castillo, , and Mendoza, JJ., concur.

Rollo, pp. 19-32.

Leonardo-de Castro, First Division].

G.R. No. 166102, August 05, 2015

LEONARDO-DE CASTRO, J.:

TAX ASSESSED COVERE TAX DUE PENALTY TOTAL

019- P65,448,800.0 1990-94 P3,272,440.0 P2,356,156.8 P5,628,596.80

WHEREFORE, in view of the foregoing, it is hereby ordered that: chanRoblesvirtualLawlibrary

1) MERALCO's appeal be dismissed for lack of merit; ChanRoblesVirtualawlibrary

Resultantly, the decretal portion of said CBAA Decision reads: cralawlawlibrary