266 Scra 392

SECOND DIVISION

[G.R. No. 95608. January 21, 1997.]

SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and CARMEN PALOMO VDA. DE BUENAVENTURA, petitioners, vs. THE HONORABLE COURT OF APPEALS, THE REPUBLIC OF THE PHILIPPINES, FAUSTINO J. PERFECTO, RAFFY SANTILLAN, BOY ARIADO, LORENZO BROCALES, SALVADOR DOE, and other DOES, respondents.

Kallos Law Office for petitioners.

SYLLABUS

1.CIVIL LAW; LAW ON NATURAL RESOURCES; MODES OF ACQUISITION OF LANDS DURING THE SPANISH REGIME. — The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether agricultural, mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. Hence, private ownership of land could only be acquired through royal concessions which were documented in various forms, such as (1) Titulo Real or Royal Grant, (2) Concesion Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion Posesoria or Possessory Information title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889. Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old Spanish grant.

2.REMEDIAL LAW; CIVIL ACTIONS; LACHES; FAILURE FOR 83 YEARS TO ASSAIL INCLUSION OF CLAIMED PROPERTIES TO FOREST RESERVATION. — Moreover, despite claims by the petitioners that their predecessors in interest were in open, adverse and continuous possession of the lands for 20 to 50 years prior to their registration in 1916- 1917, the lands were surveyed only in December 1913, the very same year they were acquired by Diego Palomo. Curiously in February

1913 or 10 months before the lands were surveyed for Diego Palomo, the government had already surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners' predecessors in interest were indeed in possession of the lands for a number of years prior to their registration in 1916-1917, they would have undoubtedly known about the inclusion of these properties in the reservation in 1913. It certainly is a trifle late at this point to argue that the government had no right to include these properties in the reservation when the question should have been raised 83 years ago.

3.ID.; ID.; ESTOPPEL; DOES NOT OPERATE AGAINST THE GOVERNMENT FOR ACT OF ITS AGENTS. — As regards the petitioners' contention that inasmuch as they obtained the titles without government opposition, the government is now estopped from questioning the validity of the certificates of title which were granted. As correctly pointed out by the respondent Court of Appeals, the principle of estoppel does not operate against the Government for the act of its agents.

4.CIVIL LAW; LAW ON NATURAL RESOURCES; FOREST LAND, NOT REGISTRABLE. — Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of appropriation. The adverse possession which may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of the public domain.

5.REMEDIAL LAW; EVIDENCE; TAX DECLARATIONS; NOT CONCLUSIVE PROOF OF OWNERSHIP. — There is no question that the lands in the case at bar were not alienable lands of the public domain. As testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject to private alienation prior to 1913 up to the present. Moreover, as part of the reservation for provincial park purposes, they form part of the forest zone. It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registrable and possession thereof, no matter how lengthy, cannot convert it into private property, unless such lands are reclassified and considered disposable and alienable. Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land inasmuch as the weight of authority is that tax declarations are not conclusive proof of ownership in land registration cases.

6.ID.; CIVIL ACTIONS; ANNULMENT OF TITLE; TITLE SHOULD BE ANNULLED ONLY WITH RESPECT TO AREA FALLING WITHIN THE

FOREST RESERVATION. — Since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the reservation, TCT 3913 should be annulled only with respect to the aforesaid area.

7.ID.; ID.; INJUNCTION WITH DAMAGES; ABSENCE OF LIABILITY FOR DAMAGES WHERE BAMBOOS CUT BY THE EMPLOYEES OF THE BUREAU OF FOREST DEVELOPMENT WERE WITHIN THE PERIMETER OF THE NATIONAL PARK. — Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40 was already in force at the time the lands in question were surveyed for Diego Palomo. Petitioners also apparently knew that the subject lands were covered under the reservation when they filed a petition for reconstitution of the lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of the Land Registration Office Enrique Altavas in 1953 as a true and correct copy for the Original Plan No. II-9299 filed in the Bureau of Lands dated September 11, 1948 contains the following note, "in conflict with provincial reservation." In any case, petitioners are presumed to know the law and the failure of the government to oppose the registration of lands in question is no justification for the petitioners to plead good faith in introducing improvements on the lots. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-143, were within the perimeter of the national park, no pronouncement as to damages is in order.

D E C I S I O N

ROMERO, J p:

The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form part of the "Tiwi Hot Spring National Park." The facts of the case are as follows.

On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes issued Executive Order No. 40 which reserved for provincial park purposes some 440,530 square meters of land situated in Barrio Naga, Municipality of Tiwi, Province of Albay pursuant to the provisions of Act 648 of the Philippine Commission. 1

Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of America, ordered the registration of 15 parcels of land covered by Executive Order No. 40 in the name of Diego Palomo on December 9, 1916; 2 December 28, 1916; 3 and January 17, 1917. 4 Diego Palomo donated these parcels of land consisting of 74,872 square meters which were allegedly covered by Original Certificates of Title Nos. 513, 169, 176 and 173 5 to his heirs, herein petitioners, Ignacio and Carmen Palomo two months before his death in April 1937. 6

Claiming that the aforesaid original certificates of title were lost during the Japanese occupation, Ignacio Palomo filed a petition for reconstitution with the Court of First Instance of Albay on May 30, 1950. 7 The Register of Deeds of Albay issued Transfer Certificates of Title Nos. 3911, 3912, 3913 and 3914 sometime in October 1953. 8

On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area embraced by Executive Order No. 40 into the "Tiwi Hot Spring National Park," under the control, management, protection and administration of the defunct Commission of Parks and Wildlife, now a division of the Bureau of Forest Development. The area was never released as alienable and disposable portion of the public domain and, therefore, is neither susceptible to disposition under the provisions of the Public Land Law (CA 141) nor registrable under the Land Registration Act (Act No. 496).

The Palomos, however, continued in possession of the property, paid real estate taxes thereon 9 and introduced improvements by planting rice, bananas, pandan and coconuts. On April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual mortgaged the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the Philippine Islands.

In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual filed Civil Case No. T-143 before the then Court of First Instance of Albay for Injunction with damages against private respondents Faustino J. Perfecto, Raffy Santillan, Boy Ariado, Lorenzo Brocales, Salvador Doe and other Does who are all employees of the Bureau of Forest Development who entered the land covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally leveling no less than 4 groves worth not less than P2,000.00.

On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and cancellation of Certificates of Title involving the 15 parcels of land registered in the name of the petitioners and subject of Civil Case T-143. Impleaded with the petitioners as defendants were the Bank of the Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.

The case against the Bank of Philippine Islands was dismissed because the loan of P200,000 with the Bank was already paid and the mortgage in its favor cancelled.

A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties and on July 31, 1986, the trial court rendered the following decision:

"WHEREFORE, premises considered, judgment is hereby rendered:

IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs, dismissing the complaint for injunction and damages, as it is hereby DISMISSED.

Costs against the plaintiffs.

In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:

(1)Declaring null and void and no force and effect the Order dated September 14, 1953, as well as the Original Certificate of Titles Nos. 153, 10 169, 173 and 176 and Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the Register of Deeds of Albay and all transactions based on said titles.

 

(2)Forfeiting in favor of the plaintiff Government any and all improvements on the lands in question that are found therein and introduced by the defendants;

(3)Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12, Plan II-9299 and Lots 1, 21, 11 3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring National Park;

(4)and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged Original Certificates of Titles Nos. 513, 169, 173 and 176, Transfer Certificates of Title Nos. T-3911, T-3912, T-3913 and T-3914.

Costs against the defendants.

So Ordered." 12

The court a quo in ruling for the Republic found no sufficient proof that the Palomos have established property rights over the parcels of land in question before the Treaty of Paris which ended the Spanish-American War at the end of the century. The court further stated that assuming that the decrees of the Court of First Instance of Albay were really issued, the Palomos obtained no right at all over the properties because these were issued only when Executive Order No. 40 was already in force. At this point, we take note that although the Geodetic Engineer of the Bureau of Lands appointed as one of the Commissioners in the relocation survey of the properties stated in his reamended report that of the 3,384 square meters covered by Lot 2, Plan II-9205, only 1,976 square meters fall within the reservation area, 13 the RTC ordered TCT 3913 covering the entire Lot 21 (sic) Plan II-9205 cancelled.

The petitioners appealed to the Court of Appeals which affirmed in toto the findings of the lower Court; hence this petition raising the following issues:

1.The respondent Court of Appeals committed grave abuse of discretion in affirming in toto the decision of the lower court.

2.The declaration of nullity of the original certificates of title and subsequent transfer certificates of titles of the petitioners over the properties in question is contrary to law and jurisprudence on the matter.

3.The forfeiture of all improvements introduced by the petitioners in the premises in favor of the government is against our existing law and jurisprudence.

The issues raised essentially boil down to whether or not the alleged original certificate of titles issued pursuant to the order of the Court of First Instance in 1916-1917 and the subsequent TCTs issued in 1953 pursuant to the petition for reconstitution are valid.

Petitioners contend that the Treaty of Paris which ended the Spanish-American War at the end of the 19th century recognized the property rights of Spanish and Filipino citizens and the American government had no inherent power to confiscate properties of private citizens and declare them part of any kind of government reservation. They allege that their predecessors in interest have been in open, adverse and continuous possession of the subject lands for 20-50 years prior to their registration in 1916-1917. Hence, the reservation of the lands for provincial purposes in 1913 by then Governor-general Forbes was tantamount to deprivation of private property without due process of law.

In support of their claim, the petitioners presented copies of a number of decisions of the Court of First Instance of Albay, 15th Judicial District of the United States of America which state that the predecessors in interest of the petitioners' father Diego Palomo, were in continuous, open and adverse possession of the lands from 20 to 50 years at the time of their registration in 1916.

We are not convinced.

The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether agricultural, mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. Hence, private ownership of land could only be acquired through royal concessions which were documented in various forms, such as (1) Titulo Real or Royal Grant," (2) Concession Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion Posesoria or Possessory Information title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889.

Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old Spanish grant. Petitioners placed much reliance upon the declarations in Expediente No. 5, G.L.R.O. Record Decision No. 9820, dated January 17, 1917; Expediente No. 6, G.L.R.O. Record No. 9821, dated December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916; Expediente No. 8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10, G.L.R.O. Record No. 9868, dated December 9, 1916 of the Court of First Instance of Albay, 15th Judicial District of the United States of America presided by Judge Isidro Paredes that their predecessors in interest were in open, adverse and

continuous possession of the subject lands for 20-50 years. 14 The aforesaid "decisions" of the Court of First Instance, however, were not signed by the judge but were merely certified copies of notification to Diego Palomo bearing the signature of the clerk of court.

Moreover, despite claims by the petitioners that their predecessors in interest were in open , adverse and continuous possession of the lands for 20 to 50 years prior to their registration in 1916-1917, the lands were surveyed only in December 1913, the very same year they were acquired by Diego Palomo. Curiously, in February 1913 or 10 months before the lands were surveyed for Diego Palomo, the government had already surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners' predecessors in interest were indeed in possession of the lands for a number of years prior to their registration in 1916-1917, they would have undoubtedly known about the inclusion of these properties in the reservation in 1913. It certainly is a trifle late at this point to argue that the government had no right to include these properties in the reservation when the question should have been raised 83 years ago.

As regards the petitioners' contention that inasmuch as they obtained the titles without government opposition, the government is now estopped from questioning the validity of the certificates of title which were granted. As correctly pointed out by the respondent Court of Appeals, the principle of estoppel does not operate against the Government for the act of its agents. 15

Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of appropriation. The adverse possession which may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of the public domain.

There is no question that the lands in the case at bar were not alienable lands of the public domain. As testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject to private alienation prior to 1913 up to the present. 16 Moreover, as part of the reservation for provincial park purposes, they form part of the forest zone.

It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registrable and

possession thereof, no matter how lengthy, cannot convert it into private property, 17 unless such lands are reclassified and considered disposable and alienable. cdt

Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land inasmuch as the weight of authority is that tax declarations are not conclusive proof of ownership in land registration cases. 18

Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40 was already in force at the time the lands in question were surveyed for Diego Palomo. Petitioners also apparently knew that the subject lands were covered under the reservation when they filed a petition for reconstitution of the lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of the Land Registration Office Enrique Altavas in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the Bureau of Lands dated September 11, 1948 19 contains the following note, "in conflict with provincial reservation." 20 In any case, petitioners are presumed to know the law and the failure of the government to oppose the registration of the lands in question is no justification for the petitioners to plead good faith in introducing improvements on the lots.

Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the reservation, TCT 3913 should be annulled only with respect to the aforesaid area. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-143, 21 were within the perimeter of the national park, 22 no pronouncement as to damages is in order.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that TCT 3913 be annulled with respect to the 1,976 square meter area falling within the reservation zone.

SO ORDERED.

Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

Footnotes

1.Act 648 of the Philippine Commission entitled, "An Act authorizing the Governor-general to reserve for civil public purposes and from sale or settlement, any part of the public domain not appropriated by law for special public purposes, unless otherwise directed by law and extending provisions of Act Numbered 627 so that public lands desired to be reserved by the Insular Government for public use, or private lands desired to be purchased by the Insular Government for such uses, may be brought under the operation of Land Registration."

 

2.As shown by Expediente No. 7, GLRO Record 9822 which became the basis for the issuance of alleged OCT No. 1955 (169) and Expediente No. 10 GLRO Record 9868. It should be noted however that the Register of the Deeds does not have any record of any OCT issued pursuant to GLRO Record 9868.

3.As shown by Expediente No. 6, GLRO record 9821 which became the basis for the issuance of the alleged OCT No. RO-1956 (173) and Expediente No. 8 GLRO Record 9823 which became the basis for the issuance of alleged OCT No. RO 1954 (176).

4.As shown by Expediente No. 5 which became the basis for the issuance of alleged OCT No. RO 1953 (513).

5.OCT 513 covered Lot Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 of Plan II-9299 while OCT 169,176 and 173 covered Lot Nos. 2, 1 and 3 of Plan II-9205. Another alleged OCT with an unspecified number covered Lot No. 4 of Plan II-9205.

6.Exh. 21.

7.Exh. B.

8.TCT 3911 (Exh 1-A) originated from OCT No. RO-1953 (513) (Exh 1); TCT 3912 (Exh 2-A) originated from OCT No. RO 1954 (176) [Exh 2] while TCT 3913 (Exh 3-A) originated from OCT No. RO 1955 (169) [Exh 3] and TCT No. 3914 (Exh 4-A) originated from OCT No. RO-1956 (173) [Exh 4].

9.Aside from tax receipts marked as Exh 9-U to 9-H covering the years 1977, 1983 and 1984, tax declaration Nos. 1838, 1528, 1527, 1526, 1536, 1840, 1835, 1842, 1833, 1841, 1832, 1834 and 1839 marked as Exh 6, 6-A to 6-L, also presented in evidence marked as Exh 19 was a Certificate of Appreciation awarded by the Province of Albay in

1956 to petitioner Ignacio Palomo for prompt and up to date payment of tax obligations.

10.Should be OCT 513.

11Should be Lot 2.

12.Rollo, pp. 63-64.

13.Records, pp. 62. The Republic, in fact, never claimed the entire 3,384 square meters as shown by the Relocation Plan of II-6679 (marked as Exh H-3-T ) when surveyed for Civil Case T-143 and 176.

14.Exhibits 14, 15, 15-A, 16, 16-A, 17, 18, 18-A.

15.Auyong Hian v. Court of Tax Appeals, 59 SCRA 110 (1974); Cruz v. CA, 194 SCRA 145; Sharp International Marketing v. CA, 201 SCRA 299; Republic v. IAC, 209 SCRA 90; GSIS v. CA, 218 SCRA 233.

16.TSN, 27 September 1977, pp. 18-19.

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

18.Reyes v. Sierra, 93 SCRA 472; Masagana v. Argamosa, 109 SCRA 53; Ferrer Lopez v. CA, 150 SCRA 393; Carag v. IAC, 177 SCRA 313; Director of Lands v. IAC, 195 SCRA 38.

19.Exhibit H-4.

20.Exhibit H-5.

21.Petitioners alleged that 4 bamboo groves in the lots covered by TCT 3913 and/or 3914 were "eradicated" by employees of the Office of Parks and Wildlife, now Bureau of Forest and Development.

22.TSN, 28 October 1985, pp. 26-27.

295 scra 296

SECOND DIVISION

[G.R. No. 94524. September 10, 1998.]

SPS. FEDERICO L. REYES AND MAXIMA DELA PAZ; SPS. SILVINA L. REYES AND CESARIO SANTIAGO; SPS. VICENTA L. REYES AND EMILIO ESTEBAN; SPS. IRENEO L. REYES AND JOSEFINA DEL FIERRO; SPS. LEOVIGILDO L. REYES AND JOSEFINA OCHOA; AND FELIX L. REYES,petitioners, vs. COURT OF APPEALS, and the REPUBLIC OF THE PHILIPPINES, respondent.

SYLLABUS

1.LAND REGISTRATION; LAW ON NATURAL RESOURCES; FOREST LANDS OR FOREST RESERVES ARE NOT CAPABLE OF PRIVATE APPROPRIATION AND POSSESSION THEREOF, HOWEVER LONG, CANNOT CONVERT THEM INTO PRIVATE PROPERTY. — It is clear from the testimony of Forester Marceliano Pobre that at the time the homestead patent was issued to petitioners' predecessor-in-interest, the subject lot still was part of the public domain. Hence, the title issued to herein petitioners is considered void ab initio. It is a settled rule that forest lands or forest reserves are not capable of private appropriation and possession thereof, however long, cannot convert them into private property.

2.ID.; ID.; ID.; ID.; THE BURDEN OF PROOF IN OVERCOMING THE PRESUMPTION OF STATE OWNERSHIP IS ON THE PERSON APPLYING FOR REGISTRATION; PETITIONERS FAILED TO DO SO IN CASE AT BAR. — Petitioners also contend that the respondent Republic failed to present sufficient and substantial evidence to overcome the presumption of the alienability of land and the presumption that the officers who issued the patent and the title have regularly performed their official duties. 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 in land and charged with the conservation of such patrimony. This same doctrine also states that all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. Hence, the burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the person applying for registration. The applicant must show that the land subject of the application is alienable or disposable.

3.ID.; ID.; ID.; ID.; PRESCRIPTION DOES NOT RUN AGAINST THE STATE. — Petitioners' contention that the government is now estopped from questioning the validity of OCT No. 727 issued to them, considering that it took the government 45 years to assail the same, is erroneous. We have ruled in a host of cases that prescription does not run against the government. In point is the case of Republic vs. Court of Appeals, wherein we declared: "And in so far as the timeliness of the action of the Government is concerned, it is basic that prescription does not run against the State. . . . The case law has also been: 'When the government is the real party in interest, and is proceeding mainly to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation,' . . . 'Public land fraudulent included in patents or certificates of title may be recovered

or reverted to the State in accordance with Section 101 of the Public Land Act.Prescription does not lie against the State in such cases for the Statute of Limitations does not run against the State. The right of reversion or reconveyance to the State is not barred by prescription.' "

4.ID.; ID.; ID.; ID.; THE SUBSEQUENT RELEASE OF THE SUBJECT LAND AS ALIENABLE CANNOT CURE THE DEFECT IN THE GRANT THEREOF; A VOID ACT CANNOT BE VALIDATED OR RATIFIED. — We do not agree. The rule is that a void act cannot be validated or ratified. The subsequent release of the subject land as alienable and disposable did not cure any defect in the issuance of the homestead patent nor validated the grant. The hard fact remains that at the time of the issuance of the homestead patent and the title, the subject land was not yet released as alienable. While we sympathize with the petitioners, we nonetheless can not, at this instance, yield to compassion and equity. The rule must stand no matter how harsh it may seem. Dura lex sed lex. IETCAS

D E C I S I O N

MARTINEZ, J p:

This petition for review on certiorari assails the Decision 1 of the respondent Court of Appeals dated April 19, 1990, in CA-G.R. CV No. 14600, the dispositive portion of which reads: prLL

"WHEREFORE, in the light of the foregoing, the decision of the court a quo dated April 17, 1986 is hereby SET ASIDE and another is rendered:

a)Declaring Original Certificate of Title No. 727 in the name of the heirs of Antonia Labalan as null and void and all other derivative titles, if any there be, are hereby ordered cancelled and

b)Declaring that the land covered by the cancelled certificate of title be reverted to the State including whatever improvements introduced by the defendants which are ordered forfeited in favor of the Republic of the Philippines." 2

The factual backdrop of the case, as accurately summarized by the respondent court in the assailed decision, is as follows:  Cdpr

"Antonia Labalan filed with the Bureau of Lands Homestead Application No. 214067 on February 17, 1936 (Exh '2') The same was approved on April 23, 1937. On December 28, 1937 the applicant died survived by her children who are the defendants in this case (Exh. '5'). Before the application of the homestead patent by Antonia Labalan, she was already residing in the said place and made improvements on the land. After her death, defendant FedericoReyes, one of her children continued to reside therein. After the land was surveyed, Federico Reyes filed the required Notice of Intention to make Final Proof (Exh. "3"). On January 2, 1941, Homestead Patent No. 64863 was issued in the name of the heirs of Antonia Labalan and the corresponding Original Certificate of Title No. 727 was issued (Exh. '1').

"SOMETIME in October 1968, a certain Mary Agnes Burns, a resident of Olongapo City, filed with the Bureau of Lands a Miscellaneous Sales Application (Exhs. 'O,' 'O-1') over a 50-hectares property she allegedly purchased from Salvador Moreno on November 23, 1955 (Exh. 'I') located in Matain, Subic, Zambales. Included thereat is the property covered by O.C.T. No. 727. She allegedly made improvements on the land. She likewise constructed roads thereon after securing the necessary mayor's permit (Exhs. 'K,' 'K-1,' 'K-2'). Declaring the property in her own name, she also paid the yearly taxes from 1965-1978 (Exhs 'M' to 'M-6') and from 1979-1982 (Exh. 'N'). Notwithstanding the land she bought was still within the Naval Reservation Area and therefore part of the forest zone, Mary Agnes Burns nevertheless took the risk of occupying and improving the land after verifying that the same would be released for private disposition.

"Acting on Mary Agnes Burns' request for survey authority, the Bureau of Lands ordered Land Inspector Mateo D. Sicat to inspect and survey the property. In the report dated December 23, 1968 (Exh. 'P'), the latter favorably recommended the survey endorsed by District Land Officer Rodolfo Paelmo on January 3, 1969 (Exh. 'P-1'). Mary Agnes Burns also learned from Sicat's report that the titled property consisting of 20 hectares adjacent to her property is owned by Natalia dela Paz. Knowing that said property is within the forest zone hence inalienable prior to January 31, 1961, she reported the matter to the Solicitor General who thereafter had the title cancelled

and the land reverted to the public domain on the basis of the Decision dated November 9, 1981 in Civil Case No. 299-2-0 entitled Republic of the Philippines vs. Fabian Arcega and Natalia dela Paz (Exhs 'Q; to 'Q-4).

"IN 1969, alleging that Mary Agnes Burns illegally and forcibly entered the defendant's titled property consisting of 6,5030 hectares, the defendants filed a Forcible Entry Case against the former with four (4) others in the Municipal Court of Subic Zambales. Dismissed for lack of jurisdiction, herein defendants (plaintiffs in the Forcible Entry Case) elevated the case to the then Court of First Instance of Zambales and Olongapo City, Branch III, and docketed as Civil Case No. 765-0. In the decision dated April 17, 1986 the heirs of Antonia Labalan were declared as the registered owner of the land covered by Original Certificate No. 727 and therefore entitled to the possession of the same. (Exh. '8'). prLL

"IN 1980, Mary Agnes Burns filed a petition with the Solicitor General for the cancellation of Original Certificate of Title No. 727 on the ground that the land covered thereby is within the forest zone. The petition was referred by the Solicitor General to the Bureau of Lands for investigation (Exh. "A"). Lands investigator Guillermo Venegas conducted the investigation and submitted his report (Exh. 'B') and the supplemental report (Exh. 'B-1'). Likewise, Mary Agnes Burns went to the District Forester and requested the survey of the said land covered by O.C.T No. 727 and Assistant District Forester Marceliano Pobre made the survey. By virtue of the reports submitted by the land inspectors and the certification issued by district Forester Rogelio Delgado, Certification No. 65, showing that the land in question was found to be within the alienable and disposable land only on January 31, 1961 per LCM 2427. That the area covered by O.C.T. No. 727 and the adjoining owners of the land are still forest zone from 1941 to 1960." 3

On the basis of the reports submitted by the land inspectors and the Certification No. 65 issued by District Forester Delgado, the Solicitor General in behalf of the Republic of the Philippines (hereafter "Republic") filed on October 23, 1981 a complaint 4 for "Cancellation of Title and Reversion" against herein petitioners before theCourt of First Instance (now Regional Trial Court) of Olongapo City docketed as Civil Case No. 3271-0.

The complaint was dismissed by the trial court on April 17, 1986 on the ground that the Republic failed to prove its allegation that the subject land was not yet alienable and disposable at the time the Bureau of Lands granted petitioners' predecessor-in-interest, Antonia Labalan, a homestead patent. The trial courtratiocinated in this wise:

 

"It would be the height of injustice if the Court will countenance the annulment of the homestead patent granted the defendants forty five (45) years ago and the cancellation of OCT No. 727 issued way back in 1941 simply on the unsubstantiated basis that the homestead patent and the title were granted and issued when the land was still within the forest zone. Even if it were true as contended by the plaintiff that at the time of the granting of patent and the issuance of OCT No. 727 in 1941 to the defendants, the land was not yet released from the forest zone and therefore not yet disposable and alienable, although Certification No. 282 of District Forester Rogelio Delgado (Exh. 10) states otherwise, yet such error committed by the government thru the Bureau of Land in granting the homestead patent to a land not yet alienable and disposable, was rectified by the same government thru the then Bureau of Forestry when it released the said land covered by the homestead patent from the forest zone and proclaimed it alienable and disposable in 1961 as per Certification No. 65 (Exh. 'C'). If there was an error committed by the Bureau of Land in granting the homestead patent of a land not yet disposable at that time, the patentees should not be made to suffer the consequence, it appearing that they acted in atmost (sic) good faith and complied with all the requirements of the Public Land Laws in their acquisition of the homestead patent. Equity demands that the government must not annul and cancel the homestead patent issued in 1941 even if the land was not yet alienable and disposable then, for after all the said land became alienable and disposable in 1961." 5

The Republic appealed 6 to the respondent court arguing that the trial court erred in ruling that: (a) Homestead Patent No. 64863 and the corresponding OCT No. 727 issued to petitioners (appellees below) are valid and binding; (b) the petitioners have complied with all the requirements of cultivation and occupation as required by the Public Land Law; (c) the subsequent release of the land as alienable and disposable in 1961 rectified or validated the grant to them or at least

gave them priority over the land; and (d) the government is estopped from impugning the titles. cdtai

Finding the appeal meritorious, the respondent court in a decision dated April 19, 1990, reversed the trial court, ruling that the land subject matter of the case was part of the forest lands when Homestead Patent No. 64832 dated January 2, 1941 and Original Certificate of Title No. 727 were issued in the name of the petitioners. In arriving at the said conclusion, the respondent court considered: (a) the Certification No. 65, dated January 13, 1981, issued by District Forester Rogelio L. Delgado (Exh. "C"), (b) the Land Classification Map No. 2427 (Exh. "F"), and (c) the testimony of Marceliano Pobre. The respondent court opined:

"IT is a well-known doctrine that a Torrens title, as a rule, is indefeasible, unassailable and irrevocable. However, when the certificate of title covers property of public dominion classified as forest and mineral lands, any title issued on these non-disposable lots should be cancelled even in the hands of an innocent purchaser for value (Lepanto Consolidated Mining Co. vs. Damyung, 89 SCRA 532).

'TWO certifications are in dispute in the case before US. They are Certification No. 65 dated January 13, 1981 and Certification No. 282 dated November 25, 1981 which were both issued by Rogelio L. Delgado, District Forester. Certifications Nos. 65 and 282 respectively are hereby quoted as follows:

'THIS IS TO CERTIFY that the tract of land situated at Matain, Subic, Zambales covered by O.C.T. No. 727 of the Heirs of Antonia Labalan, containing an area of 6.5030 hectares as shown and described in the attached sketch as verified and plotted by Forester Marceliano P. Pobre based on the technical descriptions appearing at the back of the title was found to be within the Alienable and Disposable Land, LC Project No. 13-G, Subic, Zambales, certified as such by then Director of Forestry, Manila on January 31, 1961 per LC Map No. 2427 (Exh 'C;' emphasis supplied)

and

'THIS IS TO CERTIFY that the area described in the attached Plan as surveyed/prepared by Geodetic

Engineer Teodoro Victoriano for Heirs of Antonia Labalan of Subic, Zambales containing an area of 65,030 square meters located at Matain, Subic, Zambales after compiling the same in our control map was found to be within the Alienable and Disposable Land, Block 1, Project 13, Subic, Zambales certified as such by then Director of Forestry, Manila on June 7, 1927 Per LC Map No. 6656 (Exh. '10'); emphasis supplied). prLL

"THE apparent differences between the two (2) certifications was first explained in the Manifestation/Motion dated January 17, 1983 of Forester Marceliano Pobre. . . .

"NOTWITHSTANDING the fact that Rogelio L. Delgado, the District Forester who issued the certifications was not presented as a witness for the plaintiff, his testimony at most would be superfluous. Forester Marceliano Pobre actually conducted the survey and verification and whose findings over the status of the land in question was the basis of the Certification No 65 signed by Rogelio L. Delgado in his capacity as the District Forester.

"THUS, it was held in the case of RP vs. Animas, 56 SCRA 499 that:

'The defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the State in an action for reversion of land covered thereby when such land is a part of a public forest or a forest reservation. As a general rule, timber or forest lands are not alienable or disposable under either the Constitution of 1935 or the Constitution of 1973. Although the Director of Lands has jurisdiction over public lands classified as agricultural under the Constitution, or alienable or disposable under the Public Land Act and is charged with the administration of all laws relative thereto, mineral and timber lands are beyond his jurisdiction . . . when defendant Isagani Du Timbol filed his application for free patent over the land in question, the area was not a disposable or alienable public land but a public forest. Titles issued to private parties by the Bureau of Lands when the land covered thereby is not disposable public land but forest land are void ab initio.'

'THE nature and character of a public land made in the investigation reports of the Bureau of Lands, is binding on

the court (Republic vs. Porkan, 151 SCRA 88). Prescription does not lie against the State (Art. 1108 par. 4; New Civil Code). Hence, the right of reversion or conveyance to the State is not barred by prescription. The lower court in its decision is of the opinion that 'even if it were true as contended by the plaintiff that at the time of the granting of patent and the issuance of OCT No. 727 in 1941 to the defendants, the land was not yet disposable and alienable . . . yet such error committed by the government thru the Bureau of Lands in granting the homestead patent, was rectified by the same government thru the then Bureau of Forestry when it released the said land covered by the Homestead Patent from the forest zone . . . Equity demands that the government must not annul and cancel the homestead patent issued in 1941 even if the land was not yet alienable and disposable then, for after all the said became alienable and disposable in 1961' ( pp. 323-324, Record) We believe though that the rule must stand no matter how harsh it may seem Dura lex sed lex." 7

Dissatisfied with the said decision, petitioners now come to us raising the following issues:

I

Whether or not Certification No. 65 relied upon in the assailed decision of the respondent court prevails over Certification No. 282, both issued by the same District Officer relating to the subject land; cdll

II

Whether or not the testimony of Forester Marceliano Pobre is sufficient to outweigh Certification No. 282 and thereby accord greater probative value to Certification No. 65;

III

Whether or not, given the legal presumptions in favor of alienability of the subject land and the regularity of its grant as a homestead, sufficient substantial evidence exists on record to overcome the said presumptions; and cdrep

IV

Whether or not, given the facts on record and the equities of the case, assuming arguendo that the grant of the land was flawed, the subsequent release of said land as alienable rectified or validated the defect or at least accords the grantees preferential right over the same.

We shall discuss the issues raised in seriatim.

Petitioners argue that since both certifications issued by District Forester Rogelio Delgado certify that the subject land was, according to the land classification maps, albeit prepared on different dates, alienable and disposable, then there should be no doubt that, even as far back as June 7, 1927 when Land Classification Map (LCM) No. 665 8 was prepared, the subject land was already alienable and disposable in character. Petitioners further contend that Certification No. 282 is actually a correction of Certification No. 65 in that it was made clear that the subject land was already classified as alienable and disposable in 1927 and not only in 1961 as shown in LCM No. 2427 9 .

We have carefully perused the record of the case and find that the two certifications issued by Forester Rogelio L. Delgado, i.e., Certification No. 65 dated January 13, 1981 10 and Certification No. 282 dated November 25, 1981, 11 are not really contradictory as petitioners contend. A comparison of the land classification maps (LC Map 665 and LC Map 2427) which were made the basis of the issuance of the said certifications show that the subject lot is part of the unclassified public forest when the Homestead Patent was issued to petitioners' predecessor-in-interest, Antonia Labalan. LCM No. 665, 12 which was the basis of Certification No. 65, reveals that the subject lot is found in the area enclosed by broken lines from points 141 to 144 13 on the side of the portion marked as "Unclassified Public Forest." As shown in LCM No. 665, the subject lot was deliberately segregated from the alienable and disposable portion identified as Block I, Project 13. If the subject lot was included in the area classified as alienable and disposable as early as 1927, as petitioners claim, then it should have been included in the said classified portion. This explains why in the LCM No. 2427, which is the basis of Certification No. 282, the subject lot was identified as Project 13-G, and classified as alienable and disposable land only on January 31, 1961.

 

This observation is supported by the testimony of Forester Marceliano Pobre who surveyed and plotted the land in question. In the Manifestation/Motion dated January 17, 1983 filed by Forester Pobre with the trial court, he stated:

"xxx xxx xxx

2.That upon verification and examination of the records of the Heirs of Antonia Labalan, undersigned found out that the two (2) certifications were issued by district forester Rogelio Delgado, one upon the request of Mary Agnes Burns and the other issued upon request of Federico Reyes dated January 13, 1981 and November 25, 1981, respectively; cdphil

3.That undersigned was the one who plotted and prepared the map of the land owned by the heirs of Antonia Labalan and the said land contained an area of 6.5030 hectares located at Matain, Subic Zambales under Original Certificate of Title No. 727, . . .

4.That the certifications both issued to Mary Agnes Burns and Antonia Labalan thru the request of Mr. Federico Reyes over the said land have the same area of 6.5030 hectares (65,030 square meters) of (sic) identical; to each other;

5.That, however, the certification issued to Antonia Labalan which Federico Reyes submitted to this Honorable Court contained some typographical errors like 'Block I, Project No. 13, Subic, Zambales, certified as such by then Director of Forestry, Manila on June 7, 1927 per LC Map No. 665.'

6.That after Federico Reyes obtained such certification I noticed that the copy left on our files contained some errors as stated under paragraph 5 of this Manifestation/Motion which should be 'Project 13-G, certified by the then Director of Forestry, Manila as per LC Map No. 2427.' When said entries were discovered, we tried to contact Mr. Federico Reyes to inform him about the errors but it was only too late. Recently, when Mr. Federico Reyes came back to the office, we informed him about the errors contained in the certification issued to Antonia Labalan and I further informed him that our file copy had already been corrected." 14 (Emphasis Ours)

Testifying on the said observation, Forester Pobre explained:

"QAside from the verification and plotting what else did you do? prcd

'AI prepared a sketch map showing their relative locations and area of the land sir.

'QNow . . . in this sketch plan that you prepared . . . will you indicate here the exact location of the property involved in this case . . . in relation to this sketch?

'AThe area is located in Matain, Subic, within Project 13-G of Subic, Zambales Sir.

'QMy question to you Mr. witness is: will you show to the Honorable Court the location of the parcel of land of the heirs of Antonia Labalan as appearing in this sketch plan?

'AIn front of that dogpatch in Matain, opposite Sir.

'QSo . . . in other words based on this plotting . . . the land in plot falls inside Project 13-G of LC Map 2427?

'AYes, sir." 15

On cross-examination, Forester Pobre declared:

"QCan you tell us how come the timber land was incorporated in this land classification map?

"AThere was already classification made in Subic before this area was made classification.

"QYou made it understand that prior to 1961 there was already land classification map conducted?

"AYes, your Honor.

"QAnd in that map it was also shown that the area which are timber land and the area which are actually disposable.

"AYes, your Honor.

"QDo you know that map number of the land with respect to Subic?

"AYes, your Honor.

"QWhat is the number?

"A665 Sir.

xxx xxx xxx

"QAre you in position to tell the Court that the location of that land covered by that title of Labalan in this classification map 665.

"AI can show you the approximate location.

"QAre you referring to the land titled covered by the Labalan?

"AYes, your Honor.

"QWill you bindly(sic) show to us where that land is located? (witness indicating the location near Calapacuan to that area covered by the word Calapacuan and Mt. Panaligan). LibLex

"COURT:

And by the reason of the place you pointed to am I correct to say that the land is within the alienable and disposable portion of land classification map 665?

"ANo your Honor because it was not released, it was not alienable during that time.

"QIt is not within the alienable and disposable as indicated therein?

"ANo, your Honor.

"QWhere is the alienable and disposable and will you indicate here?

"AOutside the right portion sir, beyond this right sir. This is the boundary of all this land are all timber land.

"COURT:

"QWill you point the alienable and disposable area in this map?

"AThis one up to here, up to this right, below this right, sir.

"COURT

Go ahead.

"ATTY. ROQUE

Are you saying Mr. Pobre all of the area comprises within the Municipality of Subic are within the land classification map Project 13-G?

"ANo, your Honor, a portion only.

"QHow about Barrio Matain was it within part of Subic was not within Project 13-G?

"ACalapacuan, Nausog and other barrio separate Calapacuan, and Matain because it is within that Project 13-G.

"QAnd you agree with me Mr. Pobre that there is something mentioned here nor in land classification map 2427 that Barrio Matain, Subic is within Project 13-G?

"ABecause the barrio is within this Project.

xxx xxx xxx

"QWhat is your basis in finding that Matain is within Project 13-G?

"APhysically if you will go to the area Matain is within area Project 13-G, is within that land classification map 665 also.

"QIs the area in land classification map 242 also included in land classification map 665?

"APortion only sir.

"QLike what?

"ALike Barangay Matain and Calapacuan.

"COURT:

"QYou know Barangay Matain?

"AIt is now alienable sir.

"QBy following the land classification map 2427?

"AYes, your Honor.

"QIn land classification map 665 you want the court to understand that Matain is not disposable and alienable? prcd

"AYes, your Honor, it is within our reservation per this map.

"QSo it is Naval Reservation?

"AYes, your Honor. When this map 665 dated June 7, 1927 it was certified.

"QAnd even that time there was already a Naval Reservation?

"AAccording to the map it sees there is Naval Reservation and classified as U.S. reservation.

"QFrom here up to there, this U.S. Naval Reservation and cannot classified such forest. From here to there." 16 (Emphasis Ours)

It is clear from the foregoing that at the time the homestead patent was issued to petitioners' predecessor-in-interest, the subject lot still was part of the public domain. Hence, the title issued to herein petitioners is considered void ab initio. It is a settled rule that forest lands or forest reserves are not capable of private appropriation and possession thereof, however long, cannot convert them into private property. 17

Petitioners impugn the credibility of Forester Pobre contending that his testimony is tainted with bias.

While this Court ordinarily does not rule on the issue of credibility of witnesses, that being a question of fact which is proscribed under Section 1, Rule 45 of the Revised Rules of Court, this Court has undertaken to do so in exceptional situations where, as here, the trial court and the Court of Appeals arrived at divergent conclusions on questions of fact and the credibility of witnesses. 18

After carefully reviewing the testimony of Forester Pobre, we are convinced that his testimony is worthy of credence. Forester Pobre actually went to the disputed area and conducted the verification survey on the subject lot. His report on the survey was used as basis of Certification No. 65 issued and signed by Rogelio Delgado in his official capacity as District Forester. Although Rogelio Delgado was not presented as a witness, his testimony would not be of much use since his certification was anchored on the survey report of Forester Pobre who had actual verification on the status of the questioned land.

Petitioners' contention that the testimony of Forester Pobre is partial in that his survey and verification of the subject land was made at the instance of Mary Agnes Burns who is interested in ousting them is erroneous. Forester Rogelio Delgado conducted the verification survey on the subject lot upon District Forester Delgado's order. He testified thus:

"QMr. Pobre . . . you conducted a verification survey of the land in question at the instance of Mary Agnes Burns is that correct? LibLex

"AYes sir, because she came to our office requesting for the status of that land in Matain. 19

xxx xxx xxx

"QSo it was not personally thru you that the verification was requested?

"AIt was thru Mr. Rogelio Delgado sir . . . then Mr. Delgado ordered me to conduct the verification survey.

"COURT:

Not personally to you?

"ANo sir." 20 (Emphasis Ours)

Thus, Forester Pobre was merely performing his official duty as a forester when he surveyed the land in question. Moreover, the testimony of Forester Pobre was never rebutted by herein respondents. Hence, in the absence of any evidence showing that Pobre was biased towards any party, his verification survey report should be accorded

the presumption of regularity in the performance of his duties as a public officer.

Petitioners also contend that the respondent Republic failed to present sufficient and substantial evidence to overcome the presumption of the alienability of land and the presumption that the officers who issued the patent and the title have regularly performed their official duties.

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 in land and charged with the conservation of such patrimony. This same doctrine also states that all lands: not otherwise appearing to be clearly within private ownership are presumed to belong to the state. 21

Hence, the burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the person applying for registration. The applicant must show that the land subject of the application is alienable or disposable. 22 This petitioners failed to do. LibLex

 

We have stated earlier that at the time the homestead patent was issued to petitioners' predecessor-in-interest, the subject land belonged to the inalienable and undisposable portion of the public domain. Thus, any title issued in their name by mistake or oversight is void ab initio because at the time the homestead patent was issued to petitioners, as successors-in-interest of the original patent applicant, the Director of Lands was not then authorized to dispose of the same because the area was not yet classified as disposable public land. Consequently, the title issued to herein petitioners by the Bureau of Lands is void ab initio.

Petitioners' contention that the government is now estopped from questioning the validity of OCT No. 727 issued to them, considering that it took the government 45 years to assail the same, is erroneous. We have ruled in a host of cases that prescription does not run against the government. In point is the case of Republic vs.Court of Appeals, 23 wherein we declared:

"And in so far as the timeliness of the action of the Government is concerned, it is basic that prescription does not run against the State. . . . The case law has also been:

'When the government is the real party in interest, and is proceeding mainly to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation.' . . .

'Public land fraudulently included in patents or certificates of title may be recovered or reverted to the State in accordance with Section 101 of the Public Land Act. Prescription does not lie against the State in such cases for the Statute of Limitations does not run against the State. The right of reversion or reconveyance to the State is not barred by prescription." (Emphasis Ours) LexLib

Finally, petitioners argue that the subsequent release of the land as alienable cured any defect in the grant thereof.

We do not agree.

The rule is that a void act cannot be validated or ratified. The subsequent release of the subject land as alienable and disposable did not cure any defect in the issuance of the homestead patent nor validated the grant. The hard fact remains that at the time of the issuance of the homestead patent and the title, the subject land was not yet released as alienable. While we sympathize with the petitioners, we nonetheless can not, at this instance, yield to compassion and equity. The rule must stand no matter how harsh it may seem. Dura lex sed lex.

WHEREFORE, the decision of the respondent Court of Appeals is hereby AFFIRMED en toto.

SO ORDERED.

Melo, Puno and Mendoza, JJ ., concur.

Regalado, J ., is on leave.

299 scra 199

EN BANC

[G.R. No. 103882. November 25, 1998.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION,respondents, CULTURAL CENTER OF THE PHILIPPINES, intervenor.

[G.R. No. 105276. November 25, 1998.]

PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners, vs. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES,respondents.

SYLLABUS

1.STATUTORY CONSTRUCTION; LAW IS CLEAR; NO ROOM FOR INTERPRETATION AND CONSTRUCTION BUT ONLY FOR APPLICATION. — Well entrenched, to the point of being elementary, is the rule that when the law speaks in clear and categorical language, there is no reason for interpretation or construction, but only for application.

2.ID.; ID.; RESORT TO EXTRINSIC AIDS IS UNWARRANTED. — So also, resort to extrinsic aids, like the records of the constitutional convention, is unwarranted, the language of the law being plain and unambiguous. Then, too, opinions of the Secretary of Justice are unavailing to supplant or rectify any mistake or omission in the law.

3.ID.; EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS. — The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning, much less widen the coverage thereof. If the intention of Congress were to include submerged areas, it should have provided expressly. That Congress did not so provide could only signify the exclusion of submerged areas from the term "foreshore lands". All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides."

4.REMEDIAL LAW; EVIDENCE; PROBATIVE VALUE; LETTER RELIED UPON BY RREC IS NO PROOF THAT IT HAD RECLAIMED 55 HECTARES OF LAND. — There is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as it required RREC to submit the pertinent papers to show its supposed accomplishment, to secure approval by the Ministry of Public Works and Highways to the reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject reclamation project but RREC never complied with such requirements and conditions sine qua non. TECcHA

5.ID.; ACTION; NOTICE OF LIS PENDENS; NECESSARY IN AN ACTION FOR RECOVERY OF POSSESSION; CASE AT BAR. — A notice of lis pendens is necessary when the action is for recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled lots aforementioned. EHcaAI

6.CIVIL LAW; LAND TITLES; TORRENS SYSTEM OF REGISTRATION; TORRENS TITLE CANNOT BE COLLATERALLY ATTACKED. — A torrens title cannot be collaterally attacked. The issue of validity of a torrens title, whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili vs. National Labor Relations Commission, 257 SCRA 174; Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of Section 48 of P.D. 1529, that a certificate of title can never be the subject of a collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding instituted in accordance with law.

7.ID.; HUMAN RELATIONS; NO ONE SHALL UNJUSTLY ENRICH ITSELF AT THE EXPENSE OF ANOTHER. — Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject reclamation project, it appearing that something compensable was accomplished by them, following the applicable provision of law and hearkening to the dictates of equity, that no one, not even the government, shall unjustly enrich oneself/itself at the expense of another, we believe; and so hold, that Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in, worth P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.

D E C I S I O N

PURISIMA, J p:

At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of Court. Here, the Court is confronted with a case commenced before the then Court of First Instance (now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3

decades back, that has spanned six administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of the Supreme Court. Cdpr

In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January 29, 1992 and Amended Decision, dated April 28, 1992, of theCourt of Appeals, 1 which affirmed with modification the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, entitled Republic of the Philippines versus Pasay City and Republic Real Estate Corporation."

The facts that matter are, as follows:

Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the reclamation of foreshore lands by chartered cities and municipalities. Section I of said law, reads:

"SEC. 1.Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications."

On May 6, 1958, invoking the aforecited provision of RA 1899, the Pasay City Council passed Ordinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay City, empowering the City Mayor to award and enter into reclamation contracts, and prescribing terms and conditions therefor. The said Ordinance was amended on April 21, 1959 by Ordinance No. 158, which authorized the Republic Real Estate Corporation ("RREC") to reclaim foreshore lands of Pasay City under certain terms and conditions.

On April 24, 1959, the Pasay City and RREC entered into an Agreement 2 for the reclamation of the foreshore lands in Pasay City.

On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3 for Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and Mandatory Injunction,

docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay City).

On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4 questioning subject Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and that the said Agreement was executed without any public bidding.

The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that the subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands" within the contemplation of RA 1899 has a broader meaning than the cited definition of the term in the Words and Phrases and in the Webster's Third New International Dictionary and the plans and specifications of the reclamation involved were approved by the authorities concerned.

On April 26, 1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of Rizal (Branch 7, Pasay City) issued an Order 6 the dispositive portion of which was to the following effect:

"WHEREFORE, the court hereby orders the defendants, their agents, and all persons claiming under them, to refrain from 'further reclaiming or committing acts of dispossession or despoliation over any area within the Manila Bay or the Manila Bay Beach Resort', until further orders of the court."

On the following day, the same trial court issued a writ of preliminary injunction 7 which enjoined the defendants, RREC and Pasay City, their agents, and all persons claiming under them "from further reclaiming or committing acts of dispossession".

Thereafter, a Motion to Intervene 8 , dated June 27, 1962, was filed by Jose L. Bautista, Emiliano Custodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martinez, Emilia E. Paez, Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines, and Bayview Hotel, Inc. stating inter alia that they were buyers of lots in the Manila Bay area being reclaimed by RREC, whose rights would be affected by whatever

decision to be rendered in the case. The Motion was granted by the trial court and the Answer attached thereto admitted. 9

The defendants and the intervenors then moved to dismiss 10 the complaint of the Republic, placing reliance on Section 3 of Republic Act No. 5187, which reads:

"Section 3.Miscellaneous Projects. llcd

xxx xxx xxx

m.For the construction of seawall and limited access highway from the south boundary of the City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore and submerged areas: Provided, That priority in the construction of such seawalls, highway and attendant reclamation works shall be given to any corporation and/or corporations that may offer to undertake at its own expense such projects, in which case the President of the Philippines may, after competitive bidding, award contracts for the construction of such projects, with the winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full compensation for the purpose, the provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected. . . ." (emphasis ours)

 

Since the aforecited law provides that existing contracts shall be respected, movants contended that the issues raised by the pleadings have become moot, academic and of no further validity or effect."

Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11 , alleging as legal interest in the matter in litigation the avowed purpose of the organization for the promotion of good

government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the said intervention 12 .

On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:

"WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended Complaint, (3) the Answer of Defendant Republic Real Estate Corporation to the first Amended Complaint, (4) the Answer of Defendant Pasay City to the first Amended Complaint, (5) the Second Amended Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to the Second Amended Complaint, (7) the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the Memorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City and Defendant Republic Real Estate Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11) Plaintiff's Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion for Leave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene of Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement to Opposition to Motion to Intervene of Defendant Pasay City and Republic Real Estate Corporation, (18) the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation, (20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate Corporation, and Intervenors Bautista, et. al., (22) the Opposition of Plaintiff to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and Conscience Union, Inc., (24) the Memorandum of the Defendant RepublicReal Estate Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor General, and all the documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY-4", (b) Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc.'s., Exhibits "A-PLACU" to "C-PLACU", the Court hereby:

(1)Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic Real Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that Republic Act No. 5187 was not passed by Congress to cure any defect in the ordinance and agreement in question and that the passage of said Republic Act No. 5187 did not make the legal issues raised in the pleadings "moot, academic and of no further validity or effect; " and

(2)Renders judgment: prLL

(a)dismissing the Plaintiff's Complaint;

(b)Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc.,

(c)Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have all the plans and specifications in the reclamation approved by the Director of Public Works and to have all the contracts and sub-contracts for said reclamation awarded by means of, and only after, public bidding; and

(d)Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director of Public Works, and shall have obtained approval thereof, and as soon as the corresponding public bidding for the award to the contractor and sub-contractor that will undertake the reclamation project shall have been effected.

No pronouncement as to costs.

SO ORDERED." (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)

Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals. However, on January 11, 1973, before the appeal could be resolved,Presidential Decree No. 3-A issued, amending Presidential Decree No. 3, thus: prLL

"SEC. 1.Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby amended by the addition of the following paragraphs:

The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract.

All reclamations made in violation of this provision shall be forfeited to the State without need of judicial action.

Contracts for reclamation still legally existing or whose validity has been accepted by the National Government shall be taken over by the National Government on the basis of quantum meruit, for proper prosecution of the project involved by administration."

On November 20, 1973, the Republic and the Construction Development Corporation of the Philippines ("CDCP") signed a Contract 13 for the Manila-Cavite Coastal Road Project (Phases I and II) which contract included the reclamation and development of areas covered by the Agreement between Pasay City and RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the Public Estate Authority ("PEA") the rights and obligations of the Republic of the Philippines under the contract between the Republic and CDCP.

Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and those of Pasay City and RREC, on the other, did not work out. The parties involved failed to hammer out a compromise.

On January 28, 1992, the Court of Appeals came out with a Decision 14 dismissing the appeal of the Republic and holding, thus:

"WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications:

1.The requirement by the trial court on public bidding and the submission of RREC's plans and specification to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic;

2.Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession over all vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and RREC at the time it took over the same. Areas thereat over which permanent structures has (sic) been introduced shall, including the structures, remain in the possession of the present possessor, subject to any negotiation between Pasay City and the said present possessor, as regards the continued possession and ownership of the latter area.

3.Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the Twenty-One (21) hectares of land already reclaimed by it, to be exercised within one (1) year from the finality of this decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining appellee Pasay City to respect RREC's option.

SO ORDERED."

On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision of the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55) hectares, and not only Twenty-one (21) hectares, and the respondent Court of Appeals erred in not awarding damages to them, movants.

On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by amending the dispositive portion of its judgment of January 28, 1992, to read as follows:

"WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby AMENDED to read as follows:

1.The requirement by the trial court on public bidding and the submission of the RREC's plans and specification to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic.

2.Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of the above enumerated lots (1 to 9).

3.Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land referred to in No. 2 of this dispositive

portion, to be exercised within one (1) year from the finality of this Decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining Pasay City to respect RREC's irrevocable option.

SO ORDERED."

From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the Philippines, as well as Pasay City and RREC, have come to thisCourt to seek relief, albeit with different prayers.

On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to hear and receive evidence on the controversy. The corresponding Commissioner's Report, dated November 25, 1997, was submitted and now forms part of the records. prcd

On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention, theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its (CCP) name, which the respondent Court of Appeals ordered to be turned over to Pasay City. The CCP, as such intervenor, was allowed to present its evidence, as it did, before the Court of Appeals, which evidence has been considered in the formulation of this disposition.

In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:

 

I

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY CITY AND RREC;

II

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF CCP.

In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:

I

THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;

II

THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY CITY AND RREC.

Let us first tackle the issues posed in G.R. No. 103882.

On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.

Section 1 of RA 1899, reads:

"SEC. 1.Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications."

It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands along the seaside of Pasay City 15 ; that what Pasay City has are submerged or offshore areas outside the commerce of man which could not be a proper subject matter of the Agreement between Pasay City and RREC in question as the area affected is within the National Park, known as Manila Bay Beach Resort, established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it (Republic) has been in open, continuous and peaceful possession since time immemorial.

Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land" through the following disquisition:

"The former Secretary of Justice Alejo Mabanag, in response to a request for an opinion from the then Secretary of Public Works and Communications as to whether the term 'foreshore areas' as used in Section I of the immediately aforequoted law is that defined in Webster's Dictionary and the Law of Waters so as to make any dredging or filling beyond its prescribed limit illegal opined:

'According to the basic letter of the Director of Public Works, the law of Waters speaks of 'shore' and defines it thus: 'that space movement of the tide. Its interior or terrestrial limit in the line reached by highest equinoctial tides.'

Webster's definition of foreshore reads as follows:

That part of the shore between high water and low-water marks usually fixed at the line to which the ordinary means tide flows: also, by extension, the beach, the shore near the water's edge.'

If we were to be strictly literal the term foreshore or foreshore lands should be confined to but a portion of the shore, in itself a very limited area.' (p. 6, Intervenors appellees' brief).

Bearing in mind the (Webster's and Law of Waters) definitions of 'shore' and of foreshore lands, one is struck with the apparent inconsistency between the areas thus described and the purpose to which that area, when reclaimed under the provision of Republic Act No. 1899, shall be devoted. Section I (of said Law) authorizes the construction thereat of 'adequate docking and harbor facilities'. This purpose is repeated in Sections 3 and 4 of the Act.

And yet, it is well known fact that foreshore lands normally extend only from 10 to 20 meters along the coast. Not very much more if at all. In fact, certain parts in Manila bordering on Manila Bay, has no foreshore to speak of since the sea washes the sea wall.

It does not seem logical, then, that Congress had in mind. Webster's limited concept of foreshore when it enacted Republic Act No. 1899, unless it intends that the

wharves, piers, docks, etc. should be constructed parallel to the shore, which is impractical.

Since it is to be presumed that Congress could not have intended to enact an ineffectual measure not one that would lead to absurd consequences, it would seem that it used 'foreshore' in a sense wider in scope than that defined by Webster . . . cdphil

To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any refutation or contrary opinion. Neither can we. In fact, the above construction is consistent with the 'rule on context' in statutory construction which provides that in construing a statute, the same must be construed as a whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but the whole and every part of the statute must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil. 709). There are two reasons for this. Firstly, the force and significance of particular expressions will largely depend upon the connection in which they are found and their relation to the general subject-matter of the law. The legislature must be understood to have expressed its whole mind on the special object to which the legislative act is directed but the vehicle for the expressions of that meaning is the statute, considered as one entire and continuous act, and not as an agglomeration of unrelated clauses. Each clause or provision will be illuminated by those which are cognate to it and by the general tenor of the whole statute and thus obscurities and ambiguities may often be cleared up by the most direct and natural means. Secondly, effect must be given, if it is possible, to every word and clause of the statute, so that nothing shall be left devoid of meaning or destitute of force. To this end, each provision of the statute should be read in the light of the whole. For the general meaning of the legislature, as gathered from the entire act, may often prevail over the construction which would appear to be the most natural and obvious on the face of a particular clause. It is by this means that contradiction and repugnance between the different parts of the statute may be avoided.' (See Black, Interpretation of Laws, 2nd Ed., pp. 317-319).

Resorting to extrinsic aids, the 'Explanatory Note' to House Bill No. 3630, which was subsequently enacted as Republic Act No. 1899, reads:

'In order to develop and expand the Maritime Commerce of the Philippines, it is necessary that harbor facilities be correspondingly improved, and, where necessary, expanded and developed. The national government is not in a financial position to handle all this work. On the other hand, with a greater autonomy, many chartered cities and provinces are financially able to have credit position which will allow them to undertake these projects. Some cities, such as the City of Bacolod under R.A. 161, has been authorized to reclaim foreshore lands bordering it.

Other cities and provinces have continuously been requesting for authority to reclaim foreshore lands on the basis of the Bacolod City pattern, and to undertake work to establish, construct on the reclaimed area and maintain such port facilities as may be necessary. In order not to unduly delay the undertaking of these projects, and in order to obviate the passage of individual pieces of legislation for every chartered city and province, it is hereby recommended that the accompanying bill be approved. It covers Authority for All chartered cities and provinces to undertake this work. . . (emphasis supplied)

Utilizing the above explanatory note in interpreting and construing the provisions of R.A. 1899, then Secretary of Justice Mabanag opined:

It is clear that the 'Bacolod City pattern' was the basis of the enactment of the aforementioned bill of general application. This so-called 'Bacolod City pattern' appears to be composed of 3 parts, namely: Republic Act No. 161, which grants authority to Bacolod City to undertake or carry out . . . the reclamation . . . of any [sic] carry out the reclamation project conformably with Republic Act No. 161; and Republic Act No. 1132 authorizing Bacolod City to contract indebtedness or to issue bonds in the amount not exceeding six million pesos to finance the reclamation of land in said city.

Republic Act No. 161 did not in itself specify the precise space therein referred to as 'foreshore' lands, but it provided that docking and harbor facilities should be erected on the reclaimed portions thereof, while not conclusive would indicate that Congress used the word 'foreshore' in its broadest sense. Significantly, the plan of

reclamation of foreshore drawn up by the Bureau of Public Works maps out an area of approximately 1,600,000 square meters, the boundaries of which clearly extend way beyond Webster's limited concept of the term 'foreshore'. As a contemporaneous construction by that branch of the Government empowered to oversee at least, the conduct of the work, such an interpretation deserves great weight. Finally, Congress in enacting Republic Act No. 1132 (supplement to RA 161), 'tacitly confirmed and approved the Bureau's interpretation of the term 'foreshore' when instead of taking the occasion to correct the Bureau of over extending its plan, it authorized the city of Bacolod to raise the full estimated cost of reclaiming the total area covered by the plan. The explanatory note to House Bill No. 1249 which became Republic Act No. 1132 states among the things: cda

'The Bureau of Public Works already prepared a plan for the reclamation of about 1,600,000 square meters of land at an estimated costs of about P6,000,000.00. The project is self-supporting because the proceeds from the sales or leases of lands so reclaimed will be more than sufficient to cover the cost of the project. '

Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the reclamation by local governments of foreshore lands on the basis of the Bacolod City pattern and in order to obviate the passage of individual pieces of legislation for every chartered city and provinces requesting authority to undertake such projects, the lawmaking body could not have had in mind the limited area described by Webster as 'foreshore' lands . . .".

 

If it was really the intention of Congress to limit the area to the strict literal meaning of "foreshore" lands which may be reclaimed by chartered cities and municipalities, Congress would have excluded the cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by Senator Cuenco during the deliberation of the bill considering that these cities do not

have 'foreshore' lands in the strict meaning of the term. Yet, Congress did not approve the proposed amendment of Senator Cuenco, implying therefore, that Congress intended not to limit the area that may be reclaimed to the strict definition of 'foreshore' lands.

The opinion of the then Secretary of Justice Mabanag, who was at that time the chief law officer and legal adviser of the government and whose office is required by law to issue opinions for the guidance of the various departments of the government, there being then no judicial interpretation to the contrary, is entitled to respect (see Bengzon vs. Secretary of Justice and Insular Auditor, 68 Phil. 912).

We are not unmindful of the Supreme Court Resolution dated February 3, 1965 in Ponce vs. Gomez (L-21870) and Ponce vs. City of Cebu (L-2266}, by a unanimous vote of six (6) justices (the other five (5) members deemed it unnecessary to express their view because in their opinion the questions raised were not properly brought before the court), which in essence applied the strict dictionary meaning of "foreshore lands" as used in RA 1899 in the case of the city of Cebu. But this was promulgated long after the then Secretary of Justice Mabanag rendered the above opinion on November 16, 1959 and long after RREC has started the subject reclamation project.

Furthermore, as held by the lower court, Congress, after the Supreme Court issued the aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said law, Congress appropriated money 'for the construction of the seawall and limited access highway from the South boundary of the city of Manila to Cavite City, to the South, and from the North boundary of the city of Manila to the municipality of Mariveles, province of Bataan, to the North (including the reclamation of foreshore and submerged areas . . . provided . . . that . . . existing projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected . . .' This is a clear manifestation that Congress in enacting RA 1899, did not intend to limit the interpretation of the term "foreshore land" to its dictionary meaning.

It is presumed that the legislature was acquainted with and had in mind the judicial construction given to a former statute on the subject, and that the statute on the subject, and that the statute was enacted having in mind the judicial construction that the prior enactment had received, or in the light of such existing judicial decisions as have direct bearing upon it (see 50 Am. Jur., Sec. 321, pp. 312-313). But notwithstanding said interpretation by the Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law covering the same areas previously embraced in a RA 1899 (as mentioned earlier, cities without foreshore lands which were sought to be excluded from the operation of RA 1899 were not excluded), providing that respect be given the reclamation of not only foreshore lands but also of submerged lands signifying its non-conformity to the judicial construction given to RA 1899. If Congress was in accord with the interpretation and construction made by the Supreme Court on RA 1899, it would have mentioned reclamation of "foreshore lands" only in RA 5187, but Congress included "submerged lands" in order to clarify the intention on the grant of authority to cities and municipalities in the reclamation of lands bordering them as provided in RA 1899. It is, therefore, our opinion that it is actually the intention of Congress in RA 1899 not to limit the authority granted to cities and municipalities to reclaim foreshore lands in its strict dictionary meaning but rather in its wider scope as to include submerged lands."

The Petition is impressed with merit.

To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the term "foreshore lands" includes submerged areas. As can be gleaned from its disquisition and rationalization aforequoted, the respondent court unduly stretched and broadened the meaning of "foreshore lands", beyond the intentment of the law, and against the recognized legal connotation of "foreshore lands". Well entrenched, to the point of being elementary, is the rule that when the law speaks in clear and categorical language, there is no reason for interpretation or construction, but only for application. 16 So also, resort to extrinsic aids, like the records of the constitutional convention, is unwarranted, the language of the law being plain and unambiguous. 17 Then, too, opinions of the Secretary of Justice are

unavailing to supplant or rectify any mistake or omission in the law. 18 To repeat, the term "foreshore lands" refers to:

"The strip of land that lies between the high and low water marks and that is alternately wet and dry according to the flow of the tide." (Words and Phrases, "Foreshore") prcd

"A strip of land margining a body of water (as a lake or stream); the part of a seashore between the low-water line usually at the seaward margin of a low-tide terrace and the upper limit of wave wash at high tide usually marked by a beach scarp or berm." (Webster's Third New International Dictionary)

The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning, much less widen the coverage thereof. If the intention of Congress were to include submerged areas, it should have provided expressly. That Congress did not so provide could only signify the exclusion of submerged areas from the term "foreshore lands".

Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965 in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act No. 5187 ("RA 5187"), the relevant portion of which, reads:

"Section 3.Miscellaneous Projects

xxx xxx xxx

m.For the construction of seawall and limited access highway from the south boundary of the City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore and submerged areas: Provided, That priority in the construction of such seawalls, highway and attendant reclamation works shall be given to any corporation and/or corporations that may offer to undertake at its own expense such projects, in which case the President of the Philippines may, after competitive bidding, award contracts for the construction of such projects, with the winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full compensation for the purpose, the

provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected. . . .

There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope of "foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled — "AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."

All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides." As opined by this Court in said cases:

"WHEREAS, six (6) members of the Court (Justices Bautista Angelo, Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that said city ordinance and contracts are ultra vires and hence, null and void, insofar as the remaining 60% of the area aforementioned, because the term 'foreshore lands' as used inRepublic Act No. 1899 should be understood in the sense attached thereto by common parlance;" (emphasis ours)

The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated December 22, 1966, in a case with analogous facts as the present one, to wit:

"December 22, 1966

The Secretary of Agriculture

and Natural Resources

Diliman, Quezon City

Sir:

xxx xxx xxx

I.Facts —

1.On January 19, 1961, pursuant to the provisions of Republic Act No. 1899, the Municipality of Navotas enacted Ordinance No. 1 authorizing the Municipal Mayor to enter into a reclamation contract with Mr. Chuanico.

2.On March 15, 1961, a reclamation contract was concluded between the Municipality of Navotas, represented by the Municipal Mayor, and Mr. Chuanico in accordance with the above ordinance. Thereunder, Mr. Chuanico shall be the attorney-in-fact of the Municipality in prosecuting the reclamation project and shall advance the money needed therefor; that the actual expenses incurred shall be deemed a loan to the Municipality; that Mr. Chuanico shall have the irrevocable option to buy 70% of the reclaimed area at P7.00 per square meter; that he shall have the full and irrevocable powers to do any and all things necessary and proper in and about the premises," including the power to hire necessary personnel for the prosecution of the work, purchase materials and supplies, and purchase or lease construction machineries and equipment, but any and all contracts to be concluded by him in behalf of the Municipality shall be submitted to public bidding.

 

xxx xxx xxx

3.On March 16, 1961, the Municipal Council of Navotas passed Resolution No. 22 approving and ratifying the contract.  llcd

xxx xxx xxx

III.Comments —

1.The above reclamation contract was concluded on the basis of Navotas Ordinance No. 1 which, in turn, had been enacted avowedly pursuant to RepublicAct No. 1899. This being so, the contract, in order to be valid, must conform to the provisions of the said law.

By authorizing local governments 'to execute by administration any reclamation work," (Republic Act No. 1899 impliedly forbids the execution of said project by contract. Thus, in the case of Ponce et al. vs. Gomez (February 3, 1966), five justices of the Supreme Court voted to annul the contract between Cebu Development Corporation and Cebu City for the

reclamation of foreshore lands because "the provisions of said . . . contract are not . . . in accordance with the provisions of Republic Act No. 1899," as against one Justice who opined that the contract substantially complied with the provisions of the said law. (Five Justices expressed no opinion on this point.)

Inasmuch as the Navotas reclamation contract is substantially similar to the Cebu reclamation contract, it is believed that the former is likewise fatally defective.

2.The Navotas reclamation project envisages the construction of a channel along the Manila Bay periphery of that town and the reclamation of approximately 650 hectares of land from said channel to a seaward distance of one kilometer. In the basic letter it is stated that 'practically, all the 650 hectares of lands proposed to be reclaimed under the agreement" do not constitute foreshore lands and that 'the greater portion of the area . . . is in fact navigable and presently being used as s fishing harbor by deep-sea fishing operators as well as a fishing ground of sustenance fisherman. Assuming the correctness of these averments, the Navotas reclamation contract evidently transcends the authority granted under Republic Act No. 1899, which empowers the local governments to reclaim nothing more than 'foreshore lands," i.e., 'that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides." (26 C.J. 890.) It was for this reason that in the cited case Ponce case, the Supreme Court, by a vote of 6-0 with five Justices abstaining, declared ultra vires and void the contractual stipulation for the reclamation of submerged lands off Cebu City, and permanently enjoined its execution under Republic Act No. 1899.

xxx xxx xxx

In accordance with the foregoing, I have the honor to submit the view that the Navotas reclamation contract is not binding and should be disregarded for non-compliance with law.

Very truly yours,

(SGD) CLAUDIO TEEHANKEE

Secretary of Justice"

The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice, of this Court, did, in our considered

view, supersede the earlier opinion of former Justice Secretary Alejo Mabanag, aforestated, as the cases, in connection with which subject opinions were sought, were with similar facts. The said Teehankee opinion accords with RA 1899.

It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No. 158, and the Agreement under attack, have been found to be outside the intendment and scope of RA 1899, and therefore ultra vires and null and void.

What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.

Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as it required RREC to submit the pertinent papers to show its supposed accomplishment, to secure approval by the Ministry of Public Works and Highways to the reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject reclamation project but RREC never complied with such requirements and conditions sine qua non.

No contracts or sub-contracts or agreements, plans, designs, and/or -specifications of the reclamation project were presented to reflect any accomplishment. Not even any statement or itemization of works accomplished by contractors or subcontractors or vouchers and other relevant papers were introduced to describe the extent of RREC's accomplishment. Neither was the requisite certification from the City Engineer concerned that "portions of the reclamation project not less than 50 hectares in area shall have been accomplished or completed" obtained and presented by RREC.

As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent thereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other witness involved in the alleged reclamation work of RREC testified on the 55 hectares supposedly reclaimed by RREC. What work was done, who did the work, where was it commenced, and when was it completed, was never brought to light by any witness before the court. Certainly, onus probandi was on RREC and Pasay City to show and point out the as yet

unidentified 55 hectares they allegedly reclaimed. But this burden of proof RREC and Pasay City miserably failed to discharge. cdphil

So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant, now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction issued on April 26, 1962 would become effective only has soon as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director of Public Works and shall have obtained approval thereof, and as soon as corresponding public bidding for the award to the contractor and sub-contractor that will undertake the reclamation project shall have been effected." (Rollo, pp. 127- 129, G.R. No. 103882)

From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority to resume its reclamation work which was stopped by said writ of preliminary injunction issued on April 26, 1962.

From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC before the lower court, and Exhibit "EE" for CCP before the Court ofAppeals, it can be deduced that only on November 26, 1960 did RREC contract out the dredging work to C and A Construction Company, Inc., for the reclamation of the 55 hectares initially programmed to be reclaimed by it. But, as stated by RREC itself in the position paper filed with this Court on July 15, 1997, with reference to CDCP's reclamation work, mobilization of the reclamation team would take one year before a reclamation work could actually begin. Therefore, the reclamation work undertaken by RREC could not have started before November 26, 1961.

Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its reclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work on subject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares, with the stipulated specifications and elevation, in such a brief span of time. In the report of RREC (Exhibit "DD" for CCP), it was conceded that due to the writ of preliminary injunction issued on April 26, 1962, C and A Construction Co., Inc. had suspended its dredging operation since May, 1962.

The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress Report marked Exhibit "DD", is a schematic representation of the work accomplishment referred to in such Progress Report, indicating the various elevations of the land surface it embraced, ranging from 0.00 meters to the highest elevation of 2.5 meters above MLLW. Such portrayal of work accomplished is crucial in our determination of whether or not RREC had actually "reclaimed' any land as under its Contract for Dredging Work with C and A Construction Company (Exhibit "EE"), the required final elevation for a completely reclaimed land was 3.5 meters above MLLW, as explicitly provided in said Contract for Dredging Work so, the irresistible conclusion is — when the work on subject RREC-Pasay City reclamation project stopped in April, 1962 in compliance with the writ of preliminary injunction issued by the trial court of origin, no portion of the reclamation project worked on by RREC had reached the stipulated elevation of 3.5 meters above MLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In short, RREC had not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.

On this point the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of Leandro V. Locsin and partners, Architect and City Planner Manuel T. Mañoza, Jr. of Planning Resources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory Committee, come to the fore. These credible, impartial and knowledgeable witnesses recounted on the witness stand that when the construction of the Main Building of the Cultural Center of the Philippines (CCP) began in 1966, the only surface land available was the site for the said building (TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of and behind it was all water (TSN, Sept. 29, 1997, pages 127-128). When the CCP Main Building was being constructed, from 1966 to 1969, the land above sea level thereat was only where the CCP Main Building was erected and the rest of the surroundings were all under water, particularly the back portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April 16, 1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).

 

There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the requirement by the trial court on public bidding and the submission of RREC's plans and specification to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic." Said requirement has never become moot and academic. It has remained indispensable, as ever, and non-compliance therewith restrained RREC from lawfully resuming the reclamation work under controversy, notwithstanding the rendition below of the decision in its favor.

Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the prescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with the former Ministry of Public Highways, a claim for compensation of P30,396,878.20, for reclamation work allegedly done before the CDCP started working on the reclamation of the CCP grounds. On September 7, 1979, RREC asked the Solicitor General to settle its subject claim for compensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume accomplished and other relevant information gathered by the former Ministry of Public Highways, the Solicitor General informed RREC that the value of what it had accomplished, based on 1962 price levels was only P8,344,741.29 and the expenses for mobilization of equipment amounted to P2,581,330.00. The aforesaid evaluation made by the government, through the then Minister of Public Highways, is factual and realistic, so much so that on June 25, 1981 RREC in its reply letter to the Solicitor General stated: cdasia

"We regret that we are not agreeable to the amount of P10,926,071.29 based on 1962 cost data, etc., as compensation based on quantum meruit. The least we would consider is the amount of P10,926,071.29 plus interest at the rate of 6% per annum from 1962 to the time of payment. We feel that 6% is very much less than the accepted rate of inflation that has supervened since 1962 to the present, and even less than the present legal rate of 12% per annum." 19

Undoubtedly, what RREC claimed for was compensation for what it had done and for the dredge fill of 1,558,395 cubic meters it used, on subject reclamation project.

Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to wit:

LOT NO.BUILDINGAREAOCT/TCT

42Gloria Maris9,516 sq.m.OCT 159 in the

Restaurantname of GSIS

3Asean Garden76,299 sq.m.OCT 10251 in the

name of CCP

12Folk Arts Theater1.7503 hec.TCT 18627 in the

and PICC parkingname of CCP

space

22landscaped with132,924 sq.m.TCT 75676 in the

sculpture of Aseanname of CCP

Artists-site of

Boom na Boom

23open space, back34,346 sq.m.TCT 75677 in the

of Philcitename of CCP

24Parking space for10,352 sq.m.TCT 75678 in the

Star City, CCP,name of CCP

Philcite

25open space11,323 sq.m.TCT 75679 in the

occupied by Starname of CCP

City

28open space,27,689 sq.m.TCT 75684 in the

beside PICCname of CCP

29open space,106,067 sq.m.TCT 75681 in the

leased by Elname of CCP

Shaddai

We discern no factual basis nor any legal justification therefor. In the first place, in their answer to the Complaint and Amended Complaint below, RREC and Pasay City never prayed for the transfer to Pasay City of subject lots, title to which had long become indefeasible in favor of the rightful title holders, CCP and GSIS, respectively.

The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no moment. It did not vest in Pasay City and RREC any real right superior to the absolute ownership thereover of CCP and GSIS. Besides, the nature of the action did not really warrant the issuance of a notice of lis pendens.

Section 14 of Rule 13, Revised Rules of Civil Procedure, reads:

"Section 14.Notice of lis pendens. — In an action affecting the title or the right of possession of real property, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the property is situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the object of the action or defense, and a description of the property in that province affected thereby. Only from the time of filing such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against the parties designated by their real names.

The notice of lis pendens herein above mentioned may be cancelled only upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded."

Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is for recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled lots aforementioned.

What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title, whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili vs. National Labor Relations Commission, 257 SCRA 174; Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of Section 48 of P.D. 1529, that a certificate of title can never be the subject of a collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding instituted in accordance with law.

Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject reclamation project, it appearing that something compensable was accomplished by them, following the applicable provision of law and hearkening to the dictates of equity, that no one, not even the government shall unjustly enrich oneself/itself at the expense of another, 20 we believe; and so hold, that Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in, worth P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.

It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein historic disposition, will be exalted by the future generations of Filipinos, for the preservation of the national patrimony and promotion of our cultural heritage. As writer Channing rightly puts it: "Whatever expands the affections, or enlarges the sphere of our sympathies — Whatever makes us feel our relation to the universe and all that it inherits in time and in eternity, and to the great and beneficent cause of all, must unquestionably refine our nature, and elevate us in the scale of being."

WHEREFORE: cdphil

In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the Reclamation Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC) as authorized by said city ordinances, are declared NULL and VOID for being ultra vires, and contrary to Rep. Act 1899.

The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No. 2229-P is made permanent, and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV No. 51349 ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of and annotate on the certificates of title involved, the cancellation of subject notice of lis pendens.

The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real Estate Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon of six (6%) percent per annum from May 1, 1962 until full payment, which amount shall be divided by Pasay City and RREC, share and share alike.

In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.

No pronouncement as to costs.

SO ORDERED.

Narvasa, C .J ., I dissent: Ponce is not binding precedent, and P.D. 3-A is in utter nullity:

Davide, Jr., J ., also that of the concurring opinion of Mr. Justice Puno.

Bellosillo, Quisumbing, Melo and Pardo, JJ ., concur.

Separate Opinions

ROMERO, J .:

"Culture doesn't save anything or anyone, it doesn't justify. But it's a product of man: he projects himself into it, he recognizes himself in it; that critical mirror alone offers him his image." So said Jean Paul Sartre, one of the greatest philosophical thinkers of our time. Matthew Arnold referred to it as the "pursuit of our total perfection" or the "study of perfection." The English mathematician and philosopher Alfred North Whitehead, placing premium on human subjectivity, declared, "Culture is activity of thought, and receptiveness to beauty and humane feeling."

Image, perfection, beauty, and feeling. These are elements which are also associated with art and creation. Yet, art in itself is a multi-faceted concept. The revered and, at times, controversial President John Fitzgerald Kennedy, in one of his numerous speeches, elevated art to the level of a pyscho-social necessity of man when he said" . . . (A)rt establishes the basic human truths which must serve as the touchstone of our judgment." Indeed, there is no question that art satisfies one of the deepest spiritual needs of man.

 

Of course, when one speaks of art and culture, he in fact speaks of it in two ways: the abstract and the concrete. What is abstract is conditioned by time; that which is concrete is ravaged by it. While the concept of "culture and art" endures man's follies, amassing innumerable, priceless enhancements as it effortlessly slides through generations of human progress, its tangible counterpart, that which is preserved for our children's appreciation, is unfortunately fragile. Art works, music, architecture, literature, and other cultural embellishments which exhibit extraordinary longevity are proclaimed as national treasures, and rightly so, for they are lasting testimonials of man's boundless imagination and creativity, that single trait that places the human species above all other creatures of the Almighty.

Most evidence of a culture's richness are lost, not in the tide of nature's frivolity, but through man's foolishness and capriciousness. Wars used to be the main culprit in the virtual obliteration of the works of ancient scholars. We are now, and for the past century or so, faced with a greater foe: progress. Progress and development are the hallmarks of successful governance. Our leaders, and there are so many of them now, decide "what is best" for the public. Inopportunely, what is perceived to be in the "best interest" of the majority in the name of "progress" may sometimes, and in the long run, be calamitous to the entire people in terms of cultural atrophy. This is the quandary in which this Court finds itself as it attempts to weigh once more private rights against sovereignty and the general welfare.

Background Facts

In a nutshell, the undisputed facts in these consolidated petitions follow.

Pursuant to Republic Act No. 1899, which authorized chartered cities and municipalities to reclaim adjoining foreshore lands, the City Council of Pasay resolved to reclaim a portion of the Manila Bay covering the Manila-Pasay-Parañaque boundaries and, for this purpose, enacted Ordinance No. 121 on May 6, 1958. Two days later, on the strength of said ordinance, Pasay City Mayor Pablo Cuneta contracted with Republic Real Estate Corporation (RREC) for the reclamation of portions of the Manila Bay. On April 21, 1959, the City Council of Pasay amended Ordinance No. 121 by enacting Ordinance No. 158. A new agreement between the parties (theReclamation Agreement) was executed three days thereafter, which, among other things, granted the reclamation project to RREC and gave it an irrevocable option to purchase a maximum of 60% of the area reclaimed at P10.00 per square meter, the amount of which could be set off against any outstanding obligation of the City to RREC. Such an option could only be effected within a year from the time the City Engineer certified that 50 hectares had been reclaimed. The reclamation itself was made by the RREC through third parties who were awarded contracts on the various phases of the project through public bidding. To raise more funds, RREC entered into contracts to sell the reclaimed areas which it could purchase from Pasay City by exercising its option under the Reclamation Agreement.

Proceedings before the trial court

On December 19, 1961, the Republic of the Philippines filed a complaint (amended on March 5, 1962) against Pasay City and RREC for "Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and Mandatory Injunction" before Branch 7 of the then Court of First Instance of Rizal, Pasay City, praying for the declaration of nullity of Ordinance Nos. 121 and 158, the Reclamation Agreement, and the Contracts to Sell between RREC and the buyers of the reclaimed land. Among other things, the following matters were alleged: (a) the area reclaimed was already reserved as a national park under Proclamation No. 41, dated July 5, 1954 and Act No. 3915, hence, the subject of the Reclamation Agreement was beyond man's commerce; (b) Ordinance Nos. 121 and 158 were ultra vires and void ab initio for being violative of R.A. No. 1899, because they involved the reclamation of "submerged areas" and not "foreshore lands" as allowed by said law; and (c) the Reclamation Agreement was illegal, contrary to morals and public policy because it was executed

with neither authority from the National Government nor any public bidding.

In their separate answers, Pasay City and RREC set forth the following negative defenses: (a) Pasay City was empowered by R.A. No. 1899 to reclaim any portion of the Manila Bay; (b) the area reclaimed was not a portion of the Manila Bay Beach Resort, which was the area reserved as a national park under Proclamation No. 41 and Act No. 3915; (c) under R.A. No. 1899, the term "foreshore lands" meant much more than its technical definition and extended to submerged areas beyond the water marks of the shore; and (d) all the actuations of the City and RREC regarding the reclamation project were in accordance with R.A. No. 1899 and related laws.

On April 26, 1962, the trial court issued a writ of preliminary injunction ordering Pasay City and RREC to refrain from their activities at the Manila Bay. On January 10, 1968, however, RREC filed a "Motion to Dismiss" the complaint on the ground that the passage of Republic Act No. 5187 (otherwise known as the Public Works Act) on September 16, 1967, rendered the issues raised by the Republic of the Philippines moot and academic. Specifically, RREC relied on Section 3(m) thereof which stated that all "contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected" during the construction by the national government of a sea wall and limited access highway passing through the projected area of the reclamation. In the meantime, the trial court allowed Jose Bautista and others who allegedly bought in good faith and for value from RREC some portions of the reclaimed land, to intervene in the action and join cause with Pasay City and RREC. On the other hand, the Pasay Law and Conscience Union, Inc. (PLCUI), a civic organization, joined with the Republic of the Philippines and filed a complaint in intervention.

On May 24, 1972, the court a quo rendered a judgment on the pleadings, upholding the validity of Ordinance Nos. 121 and 158 of the Reclamation Agreement; dismissing the complaint as well as PLCUI's complaint in intervention; enjoining RREC and Pasay City "to have all the plans and specifications in the reclamation approved by the Director of Public Works, and to have all the contracts and subcontracts for said reclamation awarded by means of, and only after, public bidding"; and lifting the preliminary injunction, dated April 26, 1962, as soon as said conditions shall have been met by RREC and Pasay City. cdtai

Proceedings before the Court of Appeals

During the pendency of the State's appeal with the Court of Appeals, President Marcos issued on January 11, 1973, Presidential Decree No. 3-A, providing, inter alia, that "the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract," and that it shall take over any validly existing reclamation contract on the basis of quantum meruit. On the strength of P.D. No. 3-A, the Commission of Public Highways and the Construction Development Corporation of the Philippines (CDCP) took over the reclamation contract between Pasay City and RREC for the construction of the Manila-Cavite City Coastal Road. CDCP developed the area already reclaimed by RREC and continued reclaiming where the latter left off. These areas, which came to be known as the Cultural Center Complex and the Financial Center Complex, were registered in the name of the CCP.

On February 4, 1977, the Public Estates Authority (PEA) was created by virtue of Presidential Decree No. 1084. It was designated as the agency primarily responsible for all the reclamation projects of the national government. The PEA then took over the Manila Bay reclamation contract between the Republic of the Philippines and CDCP.

In 1978, RREC filed a claim for P30,396,878.20 with the then Ministry of Public Highways (MPH) for its actual reclamation in the CCP Complex before CDCP assumed authority over the project. The MPH, on the other hand, determined the amount of reclamation by RREC to be only P10,926,071.29. Later, RREC offered to settle the case with the Office of the Solicitor General for the original amount of its claim. The OSG would, however, settle only for the lesser amount assessed by the MPH. This was acceptable to RREC only with an additional 6% interest per annum from 1962 up to the time of payment. Within the decade that followed, RREC's proposals for settling the case ballooned from a P35,455,011.31 cash settlement or a property settlement of 3.5 hectares in the CCP Complex covered by TCT No. 75676, to a cash settlement of P175 million, then later, P245 million. The Office of the President, to which the proposals were referred, rejected the same. In other words, no amicable settlement was reached.

The first decision

On January 28, 1992, the Court of Appeals rendered a decision, affirming the trial court's judgment with the following modifications: (a) the requirement on public bidding and submission of plans and specifications to the DPWH by RREC was deleted; (b) the Republic of the Philippines was ordered to turn over to Pasay City the ownership and possession of the 21 hectares already reclaimed by RREC; and (c) RREC's irrevocable option to purchase 60% of the 21 hectares it had already reclaimed was sustained.

The amended decision

On April 28, 1992, the appellate court rendered an amended decision. It agreed with the position of Pasay City and RREC in their motion for reconsideration that the actual area reclaimed was 55, not 21, hectares. Considering, however, that the latter were willing to accept 35 hectares of open land in the CCP Complex, the courtordered the Republic of the Philippines to reconvey to Pasay City and RREC said parcels of land comprising nine lots registered in the name of CCP. This is the decision being assailed by both parties in the instant consolidated petitions.

 

Issues raised

In G.R. No. 103882

Are Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, valid and binding as against the National Government and the Cultural Center of the Philippines?

The Republic of the Philippines claims that the Court of Appeals erred in sustaining the validity of Ordinance Nos. 121 and 158 and the Reclamation Agreement executed pursuant thereto, and in ordering the reconveyance of the nine lots titled in the name of CCP to the City of Pasay and RREC. It stresses that the reclamation project undertaken by Pasay City and RREC violated R.A. No. 1899, especially since the subject areas were "submerged lands," not "foreshore lands" which are the only lands that may be reclaimed by local governments under said law.

The CCP, as Intervenor in G.R. No. 103882, alleges that the appellate court's amended decision was not binding upon it because it

was never made a party to the action and that it was compelled to intervene in the instant petitions to protect its proprietary interests. It claims that the Court of Appeals erred in finding that the actual area reclaimed by RREC was 55 hectares, and in ordering it to turn over to RREC and Pasay City the nine lots registered in its name.

In G.R. No. 105276

Is P.D. 3-A constitutional?

The City of Pasay and RREC claim it is not and that the Court of Appeals erred in not ruling upon its constitutionality, considering that said decree deprived them of their property and rights of ownership without due process of law and without payment of just compensation, and that it violated the non-impairment clause of the Constitution; and in not awarding them damages for the alleged illegal takeover of the reclamation contract and the reclaimed area. Thus, they pray for the modification of the assailed amended decision by awarding them damages and conveying to them, not merely 35, but 55 hectares of the land allegedly reclaimed.

The Commissioners' Report

On September 10, 1997, the Court's Second Division issued a Resolution remanding the case to the Court of Appeals to receive further evidence and determine the actual area reclaimed by RREC and the areas of the CCP Complex which are "open spaces." In its Commissioner's Report dated November 25, 1997, the appellatecourt concluded that the CCP and the Solicitor General failed to refute its earlier finding that RREC and Pasay City were able to reclaim 55 hectares of the Manila Bay.

Discussion of Issues

1)Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, are null and void for violating the clear and unambiguous provisions of R.A. No. 1899.

In 1984, the term "foreshore lands" was defined by this Court in the case of Republic v. Court of Appeals. 1 Although the subject of this case was part of the Laguna de Bay, the Court nevertheless applied Bouvier's definition of "foreshore lands," viz.: "that part of the land immediately in front of the shore; the part which is between high and

low water marks and alternately covered with water and left dry by the flux and reflux of the tides. It is indicated by a middle line between the highest and lowest tides."

This judicial interpretation did not escape the attention of the legislature in the enactment of later related laws. In R.A. No. 5187, for example, Congress specified the areas that may be reclaimed in the construction of the Manila-Cavite City Coastal Road to include both "foreshore and submerged areas." The Chief Executive also recognized the disparity between the two terms when he signed into law P.D. No. 3-A, authorizing the reclamation of "areas under water, whether foreshore or inland." Similarly, P.D. No. 1084, creating the Public Estates Authority, granted it authority to "reclaim land, including foreshore and submerged areas."

Initially, legislative intent and later jurisprudential usage clearly delimited the term "foreshore lands" to that part of the land where the tides literally converge, thus excluding submerged lands. This restricted explication was unquestionably acknowledged by the other branches of government when, in passing subsequent related statutes, they added the terms "submerged areas" or "areas under water" to "foreshore lands." Under the principles of legal construction, since R.A. No. 1899 partakes of the nature of a legislative grant of a sovereign right to municipalities and chartered cities, that is, the right "to reclaim," it must be strictly construed against the latter.

R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore lands." Thus, when RREC was permitted by the City of Pasay, through Ordinance Nos. 121 and 158 and the ensuing Reclamation Agreement, to reclaim up to a one-kilometer stretch into the Manila Bay, more than just "foreshore lands" was obviously contemplated and involved. Furthermore, R.A. No. 1899 mandates that any reclamation must be carried out by the municipality or chartered city concerned 2 with the aid of funds which it may borrow from third persons or lending institutions. 3 The reclamation of Manila Bay was undertaken, not by Pasay City, but by RREC itself under a special power of attorney from Pasay City using funds exclusively borrowed by the latter from RREC. To compound the anomaly of it all, the reclamation project itself was awarded by Pasay City to RREC without any public bidding. Finally, to complete Pasay City's absolute abdication of its duty to champion public over private interest, RREC was granted an irrevocable option to purchase the land reclaimed in lieu of simply paying for it using a determinable and liquidated amount "in Philippine currency or in the

currency in which the principal has been originally received," 4 as required by R.A. No. 1899. In fact, RREC began disposing of the land by entering into contracts to sell with various third persons while the reclamation project was still in progress and long before it acquired any right of dominion over the lands yet to be reclaimed. These are all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121 and 158, no less than the Reclamation Agreement and the Contracts to Sell it has spawned, should all be deemed null and void, the reclamation itself being ultra vires.

2.P.D. No. 3-A is constitutional and valid

Applying the regalian doctrine, the State owns all waters and lands of the public domain, including those physically reclaimed. As a general rule, therefore, only the National Government can reclaim foreshore lands and other submerged areas. At times, though, the State, to effectuate an expressed public policy, delegates some of its sovereign powers either to the legislature or to some of its alter egos. One such instance was R.A. No. 1899 which was intended to increase the autonomy of local governments, an innovation introduced by the Marcos administration. There is no doubt, however, that R.A. No. 1899 was a mere public grant, a privilege which may be withdrawn by the granting authority, the sovereign, in the exercise of police power. This is precisely what President Marcos did when he issued P.D. No. 3-A, a valid and effective means of regaining the State's right to reclaim. It must be noted that this decree was not revoked by President Aquino when she assumed the presidency.

P.D. No. 3-A does not violate the equal protection clause, as claimed by Pasay City and RREC, because, far from singling out the latter, its terminology is simple and extensive enough to cover just about any municipality or city. The decree was signed by President Marcos under his emergency powers when martial law was in effect throughout the country. Thus, it is not an undue delegation or usurpation of legislative power. Neither does it authorize the taking of property without just compensation, for it specifically allows such payment, albeit based on quantum meruit. Incidentally, while RREC attacks the constitutionality of P.D. No. 3-A, and only at this late stage in the proceedings, it relied on this "quantum meruit compensation" clause in the same decree when it filed a claim before the then Ministry of Public Works way back in 1978 and again in 1983. This is an oddity which this Court takes notice of in disallowing RREC from taking contrary

positions regarding the validity of a statute in this action. It cannot take advantage of a provision of law even as it attacks the same.

Finally, the Court notes that the amended decision of the Court of Appeals dated April 28, 1992, is based on inadequate evidence. Its conclusion that RREC was able to reclaim 35 hectares is totally unsupported by the dubious proof presented by Pasay City and RREC.

In ruling in favor of Pasay City and RREC, the appellate court relied mostly on three documents issued by the government to the RREC, namely, the "Cost of Data for Items of Work Covered by the Republic Real Estate Corporation for Work Performed in the Manila Bay" issued by the Ministry of Public Highways, and two letters both addressed to RREC Executive Vice President Vicente Asuncion, Jr., one dated June 6, 1979, from then Minister of Public Highways Baltazar Aquino, and another, dated June 10, 1981; from then Solicitor General Estelito Mendoza. These documents, however, never proved that RREC was able to reclaim 35 hectares. In fact, the letter of Aquino, finding that RREC had reclaimed 55 hectares, was, in its own words, merely "tentative, pending the submittal of corroborative documents"; hence, it does not amount to the "certification" contemplated in R.A. No. 1899. Mendoza's letter, on the other hand, far from supporting RREC's position, rejected RREC's proposal in the latter's attempt at settlement. It is puzzling why the appellate court even considered this letter in favor of RREC and Pasay City.

On the other hand, there is ample proof that RREC was not able to reclaim the 55 hectares which it claims it did, or even 35 hectares, as found by the Court ofAppeals as follows: aerial photographs of the Manila Bay area in 1966 and 1968; photographs of the CCP taken in 1967 and 1968 during construction of the main building; and the testimonies of the persons familiar with the circumstances under which said photographs were taken, as well as the other witnesses who were, one way or another, connected with the construction of the CCP main building, including a member of the Board of Directors of RREC.

 

3.RREC is entitled to some monetary award

While the extent of reclamation actually done by RREC is debatable, there is no dispute that it did reclaim some portion of the Manila Bay.

In the preceding discussion, we declared the nullity of Ordinance Nos. 121 and 158 and the Reclamation Agreement, which are the wellsprings of RREC's right to be compensated. Its reclamation efforts were also found to be ultra vires. Equity and fairness, however, dictate that it be compensated for the work actually performed by it . After all, the State cannot deny that it did benefit from such reclamation. RREC was initially willing to settle the case for P30,396,878.20. In view of the foregoing premises, we believe that RREC should only be given the amount which the State was willing to pay, that is P10,929,071.29, without legal interest. It is axiomatic that legal interest is given either for the use of the money (a loan or forbearance of money) or as a penalty for breach of an obligation (damages). In the case of Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court had occasion to set the guidelines by which litigants may claim or be awarded interest as or by way of actual or compensatory damages. Thus,

"II.With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1.When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2.When an obligation not consisting of a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification damages may be deemed to have been reasonably ascertained). The actual base for the computation

of legal interest shall, in any case, be on the amount finally adjudged. . ." (Citations omitted)

These are the only circumstances under which interest in the concept of actual or compensatory damages, liquidated or otherwise, may be justified. In the case at bar, no loan or forbearance of money is involved; neither is there any breach of obligation. Consequently, the lone commitment of the State would be the payment for services allegedly rendered, services for which RREC would have the National Government cede to it its property, the value of which has been inflated to unimaginable proportions since the inception of the reclamation project. This is manifestly cupidity at its worst. Neither should the state be penalized for something for which it is entirely blameless. The circumstances which led to the filing of these twin actions have long been overtaken by supervening events, rendering the issues incipiently raised moot and academic. Thus, RREC and Pasay City are, as they should be, only entitled to P10,926,071.29. No more, no less.

Conclusion

For almost three decades, the Cultural Center of the Philippines has been the principal, if not the sole, purveyor of the arts in this country. It has weathered criticism, civil unrest, and "internecine" politics. It relies on the occasional beneficence of loyal patrons, the so-called "cultured" class scorned and spurned by the "masa." Otherwise, it subsists on the rental income it receives from private entities leasing portions of the CCP Complex. With the trial and appellate courts upholding their claims, Pasay City and RREC wish to dismember this bastion of cultural heritage and stunt its growth by claiming ownership over a substantial portion of its property, that which literally serves as its bloodline. This must not be countenanced. The CCP is certainly not about to draw its curtains and take a final bow. As Matthew Arnold said more than a century ago, "I am a Liberal, yet I am a Liberal tempered by experience, reflection, and renouncement, and I am, above all, a believer in culture."

I vote to grant the State's petition, with the qualification adverted to above.

PANGANIBAN, J ., concurring:

I concur with the persuasive ponencia of Mr. Justice Fidel P. Purisima, as fortified by the Separate Opinion of Mr. Justice Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation Agreement between Pasay City and the Republic Real Estate Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158, and (2) retains ownership of the reclaimed land in favor of the Cultural Center of the Philippines. With due respect, I submit, however, that the majority has no factual basis for its determination of the compensation awarded to RREC and Pasay City.

(1)Nullity of Reclamation Agreement

and Ordinance Nos. 121 and 158

Pasay City justifies its execution of the Reclamation Agreement with RREC and the passage of Ordinance Nos. 121 and 158 on the basis of Republic Act No. 1899 (RA 1899), the law authorizing chartered cities and municipalities to undertake the reclamation of foreshore lands. The questioned Agreement and Ordinances, however, cover submerged areas of the Manila Bay. As explained in the ponencia, with which I agree, the legal and common definition of foreshore land does not include areas that are fully submerged by the sea.

The Manila Bay area is, therefore, definitely outside the scope of RA 1899. It remains part of the public domain and is, as such, outside the commerce of man. It could not be the object of ordinary contracts or ordinances. The questioned Agreement and Ordinances, the objects of which involve such public property, are thus null and void.

(2)Reclaimed Area

Belongs to CCP

As a consequence, the Cultural Center of the Philippines (CCP), to which PD Nos. 15 and 774 have conveyed ownership of the reclaimed land, remains the lawful owner of the subject land. Title to the nine (9) lots, which Respondent Court wrongfully ordered to be turned over to Pasay City, had long been issued in favor of CCP (One subsequently to the GSIS as a successor-in-interest). Such titles are unaffected by the claims of RREC and cannot be collaterally attacked 1 in this litigation.

(3)No Factual Basis for

Determination of Compensation

Even if the Agreement and Ordinances were null and void, it cannot be denied that RREC and the city government of Pasay spent time, money and effort which undoubtedly inured to the benefit of the government. It is a time-honored principle that no one, not even the government, may be enriched at the expense of another,2 particularly one who, like RREC and Pasay City, acted in good faith.

While RREC and Pasay City should be compensated for their work on the reclamation project, I respectfully submit that the amount of such compensation must be supported by substantial and material proof of the reasonable expenses they incurred. But, the records of the case are bereft of any such factual evidence.

However, the records do indicate some attempts of the parties to reach an amicable settlement as a consequence of the promulgation of PD 3-A by former President Ferdinand Marcos. Thus, in 1978, RREC sought the amount of P30,396.878.20 representing the supposed monetary value of the reclamation work that it had undertaken so far. The then Ministry of Public Highways (MPH) (and later the solicitor general also) rejected this offer in 1981 and, instead, counteroffered P10,926,071.29 as the reasonable value of such work. RREC replied that it would consider such amount only if it would bear six (6) percent interest per annum from 1962 up to the time of payment. It submitted other proposals, but all were rejected by the government. No final extrajudicial settlement was ever reached.

Obviously, the offers and counteroffer were made by the parties with a view to arriving at a compromise agreement. At that point, they were not submitted as evidence, but only as a means of arriving at a peaceful settlement prior to judgment. By then, the case, which had commenced in December 1961 and was still on appeal with the Court of Appeals, was already dragging on for two decades.

Nature of Compromise

A compromise is an agreement between two or more parties whereby their differences are adjusted in a manner which they mutually agree on, and which they prefer to "the hope of gaining, balanced by the danger of losing." 3 The parties usually make reciprocal concessions in order to avoid litigation or terminate a pending one. 4

However, basic is the rule on evidence that in civil cases, an offer of compromise cannot be taken as an admission of liability, nor can it be admissible as an evidence against the offeror. 5 The offer to compromise a claim or a cause of action is not an admission that the claim is valid, but merely admits that there is a dispute and that an amount is to be paid to avoid or end the controversy. 6 I submit that an unaccepted offer or counteroffer of compromise cannot be the basis of the sum to be adjudged in favor of or against a party, more so if such sum is unsupported by competent evidence. In such case, the court itself insofar as it adopts the amount either offered or counteroffered would be bereft of factual basis for its decision. Where the proposed compromise is not accepted, the parties to the litigation would be back to square one: they have to present before the court sufficient and credible evidence to prove their respective claims.

 

As a rule, an offer or a counteroffer given in an effort to reach a compromise should not be accorded evidentiary value on its face, because by its very nature, a compromise is concessionary. And if one of the parties does not concur, the court cannot impose an amount based on the unaccepted offer, even if the culpability of a party has been duly established. The amount of any such liability must be independently ascertained with competent evidence. Otherwise, this Court would be setting a dangerous precedent. Hence, parties would not submit offers to compromise for fear that such offers, if not accepted, would be used by the Court against them. Upon the other hand, parties may offer bloated amounts in the hope that said sums could influence the court to eventually grant them a relief more than they deserve. In any event, the rationale for the policy encouraging compromises would be defeated.

In the case at bar, we should bear in mind that when RREC conceded in 1981 to the solicitor general's counteroffer of P10,926,071.29, provided the amount would bear 6 percent interest per annum, it was with the caveat that such interest rate was already "very much less than the accepted rate of inflation that has supervened since 1962 . . ." Indeed, if we are to compare current prices with those of three and a half decades ago, or even seventeen years ago, such interest rate on the principal may no longer compensate the 1962 expense. In other words, what may have been a "fair and reasonable" compromise in 1981 may no longer be

acceptable at this time. In any event, the solicitor general's counteroffer, not being supported with factual evidence, still cannot be the basis of a judicial award.

Need to Receive Evidence of

Value of RREC Accomplishment

In the instant case, there appears no dispute that RREC has undertaken partial work for the Manila Bay reclamation project to the extent of 1,558,395 cubic meters of dredge-fill work. In the words of the ponencia:

"Undoubtedly, what RREC claimed for was the payment for what it had done on, and for the dredge-fill of 1,558,395 cubic meters used for the reclamation project worked on."

This case must therefore be remanded for the purpose of receiving evidence of the peso value of the 1,558,395 cubic meters of dredge-fill work undisputedly done by RREC.

WHEREFORE, I vote for the following:

1.The DECLARATION of the nullity of (a) the Reclamation Agreement Between Pasay City and RREC and (b) Ordinance Nos. 121 and 158 of Pasay City.

2.The RETENTION of ownership of the reclaimed land in favor of the Cultural Center of the Philippines.

3.The REMAND of the case to the Commission composed of the former Thirteenth Division of the Court of Appeals (consisting of Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-Reyes and Quirino D. Abad Santos Jr.) for the sole purpose of receiving evidence of the peso value of the work accomplished by RREC and Pasay City for which they shall be paid by the national government.

PUNO, J ., concurring:

Petitioners seek to modify the Decision and Amended Decision of the Court of Appeals in CA-G.R. CV No. 51349 1 which ordered the Republic of the Philippines to award thirty-five (35) hectares of the

Cultural Center Complex to Pasay City and the Republic Real Estate Corporation.

The cases at bar span forty (40) years and the administrations of six (6) Presidents — Garcia, Macapagal, Marcos, Aquino, Ramos and Estrada. The opening scene saw the passage on June 22, 1957 of Republic Act (R.A.) No. 1899 authorizing chartered cities and municipalities to reclaim foreshore lands along their borders. On May 6, 1958, the Pasay City Government, through its legislative council, passed City Ordinance No. 121 authorizing "the reclamation of three hundred (300) hectares, more or less, of the foreshore lands of Pasay City, "beginning from the present boundary of Pasay City and Parañaque, and from the present sea-wall of Pasay City to a distance of one kilometer towards Manila Bay." The Ordinance empowered the City Mayor, in behalf of Pasay City to "issue bonds in the amounts fixed by the Secretary of Finance; or contract and award the reclamation work to any person or persons, associations, corporations, or institutions." It also provided that the cost of such reclamation works shall not be paid or reimbursed by city government but the award shall be subject to terms and conditions enumerated therein.

On May 8, 1958, the Mayor of Pasay City, Pablo Cuneta, entered into an Agreement with the Republic Real Estate Corporation (RREC) to undertake the reclamation project contemplated in Ordinance No. 121. 2

Almost a year later, on April 21, 1959, the Pasay City Government amended Ordinance No. 121 by passing Ordinance No. 158 "to make the terms and conditions of the reclamation work more beneficial to Pasay City." On April 24, 1959, the Mayor of Pasay City, for and in behalf of Pasay City, entered into another Agreement with the Republic Real Estate Corporation (RREC) for the reclamation project authorized in Ordinance Nos. 121 and 158. 3 This became the Agreement that was to govern the reclamation project itself .

Under the terms of the Reclamation Agreement, Pasay City was to borrow from RREC and nobody else, at the rate of six per cent (6%) per annum, such sums of money that may be needed for the reclamation project; that Pasay City shall pay RREC this debt upon written demand and after at least fifty (50) hectares shall have been reclaimed; that in consideration for this loan, RREC shall have the irrevocable option to purchase sixty percent (60%) of the area reclaimed at P10.00 per square meter; and that this option shall be exercised not later than

twelve (12) months from the date the City Engineer certifies that fifty (50) hectares have been reclaimed in accordance with the plans and specifications approved by the Director of Public Works.

Pursuant to this Agreement, RREC immediately undertook the reclamation of Manila Bay. It conducted public biddings for and in behalf of Pasay City and contracted with third persons for particular works on the project. RREC submitted to Pasay City monthly progress reports and statements of disbursements incurred in the course of the project. To generate additional funds, RREC entered into contracts to sell with third persons 4 over portions of the area reclaimed and those to be reclaimed which RREC shall have purchased from Pasay City under its irrevocable option.

On March 5, 1962, the Republic of the Philippines (National Government) represented by the Solicitor General filed against Pasay City and RREC Civil Case No. 2229-Pfor "Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and Mandatory Injunction" before the then Court of First Instance of Rizal, Seventh Judicial District, Branch VII, Pasay City. 5 The National Government prayed for recovery of possession of the land, damages, and for the declaration of nullity of City Ordinance Nos. 121 and 158, the Reclamation Agreement and other contracts executed between Pasay City and RREC as well as all Contracts to Sell between RREC and buyers of the land. The National Government alleged that the Manila Bay and the area covered by the reclamation project between Pasay City and RREC is land of the public domain and belongs to the state; that as early as July 5, 1954, President Magsaysay issued Proclamation No. 41 pursuant to Act 3915 declaring the Manila Bay area a national park known as the "Manila Bay Beach Resort" and placing it under the management and administration of the Commission on Parks and Wildlife of the Department of Agriculture and Natural Resources; that the reclamation of areas within its territorial jurisdiction may be made by Pasay City, a chartered city, pursuant to R.A. No. 1899 but this authority is limited to foreshore lands only; that Manila Bay has no foreshore land and the reclamation area subject of the Ordinances and Reclamation Agreement is under sea water; that the Pasay City Government and RREC entered into the Reclamation Agreement without authority from the National Government, without public bidding and with full knowledge of its illegality; that the Reclamation Agreement is illegal, contrary to morals and public policy, and the subject matter is beyond the commerce of man; that Ordinance Nos.

121 and 158 are likewise illegal and ultra vires for being contrary to the provisions of R.A. 1899; that verbal and written demands to vacate the reclamation site were made by the National Government on Pasay City and RREC but these were not heeded. 6

In their separate answers, Pasay City and RREC claimed that the Manila Bay Beach Resort reserved as national park under Proclamation No. 41 covers a parcel of "land" in the cities of Manila and Pasay and the municipality of Parañaque and does not include a portion of "Manila Bay" as certified by the Acting Chief of the Bureau of Lands; that assuming that the reclaimed area encroaches the national park, the Pasay City government is authorized by R.A. 1899 which empowers chartered cities and municipalities to reclaim foreshore lands bordering them; the term "foreshore lands" as used in R.A. 1899 is not limited to its technical meaning but extends to submerged areas beyond the high and low-water marks of the beach; that the Commission on Parks and Wildlife never managed nor administered any portion of the Manila Bay; that the complaint was filed to harass and vilify the Pasay City Government and RREC who acted in good faith and with good intentions for the benefit of the city and national government. 7

On April 26, 1962, the CFI issued a writ of preliminary injunction ordering Pasay City and RREC and their agents from "further reclaiming or committing acts of dispossession or dispoilation [sic] over any area within the Manila Bay or the Manila Bay Beach Resort until further orders of the court." 8 RREC ceased its reclamation work.

 

On June 28, 1962, Jose L. Bautista and sixteen (16) others who were buyers of portions of the reclaimed land moved to intervene and join in the cause of Pasay City and RREC.

On September 16, 1967, Congress passed Republic Act (R.A.) No. 5187, the Public Works Act. This Act appropriated P600,000,000.00 for the construction of seawall and limited access highway from the south boundary of the City of Manila to Cavite City, and from the north boundary of the City of Manila to the Municipality of Mariveles, Bataan to the north, "including the reclamation of the foreshore and submerged areas." The law also provided that "the provisions and those of other laws to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected."

This project was referred to as the "Manila-Cavite Coastal Road Project."

In view of R.A. No. 5187, RREC and Intervenors Jose Bautista, et al. moved to dismiss the complaint in Civil Case No. 2229-P. They alleged that R.A. No. 5187 expressly acknowledged existing reclamation projects and contracts and rendered the issues raised by the National Government moot and academic. Meanwhile, the Pasay Law and Conscience Union, Inc., a civic organization dedicated to the interest of "good government and public welfare" and organized to "fight for, defend, uphold and preserve the rule of law and conscience in Pasay City" filed a complaint in intervention, joining cause with the National Government.

On February 8, 1972, intervenors Jose Bautista, et al. filed a motion for a judgment on the pleadings. There being no opposition, the CFI granted the motion. OnMarch 24, 1972, after almost eleven (11) years, the trial court rendered a decision based on the pleadings. The court upheld the validity of Ordinance Nos. 121 and 158 and the Reclamation Agreement between Pasay City and RREC. The trial court, however, ordered RREC and Pasay City to secure the approval of the Director of Public Works to all the plans and specifications of the reclamation and for the City Government to award the contract by public bidding. The dispositive portion of the decision reads as follows:

"WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended Complaint, (3) the Answer of Defendant Republic Real Estate Corporation to the First Amended Complaint, (4) the Answer of Defendant Pasay City to the First Amended Complaint, (5) the Second Amended Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to the Second Amended Complaint, (7) the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the Memorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum in Support of the Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City and Defendant Republic Real Estate Corporation, (10) the Answer in Intervention of Intervenors Bautista, et al., (11) Plaintiff's Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors Bautista, et al., (13) the Stipulation of Facts by all the parties, (14) the Motion for Leave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene of Intervenors Bautista, et al., (16) the Reply of

Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement to Opposition to Motion to Intervene of Defendant Pasay City and Republic Real Estate Corporation, (18) the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation, (20) the Answer of Intervenor Jose L. Bautista, et al., to Complaint in Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate Corporation, and Intervenors Bautista, et al., (22) the Opposition of Plaintiff to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and Conscience Union, Inc., (24) the Memorandum of the Defendant Republic Real Estate Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor General, and all the documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to 'YYY-4", (b) Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc., Exhibits "A-PLACU" to C- PLACU", the Court hereby;

(1)Denies The Motion To Dismiss' filed on January 10, 1968, by Defendant Republic Real Estate Corporation and Intervenors Bautista, et al., as it is the finding of this Court that Republic Act No. 5187 was not passed by Congress to cure any defect in the Ordinance and agreement in question and that the passage of said Republic Act No. 5187 did not make the legal issues raised in the pleadings 'moot, academic and of no further validity or effect;' and

(2)Renders judgment;

(a)Dismissing Plaintiff's Complaint;

(b)Dismissing the Complaint In Intervention of Intervenor Pasay Law and Conscience Union, Inc.;

(c)Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have all the plans and specifications in the reclamation approved by the Director of Public Works, and to have all the contracts and subcontracts for said reclamation awarded by means of, and only after, public bidding; and

(d)Lifting the preliminary injunction issued by this Court on April 26, 1962, as soon as defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director Of Public Works, and shall have obtained approval thereof, and as soon as the corresponding public bidding for the award to the contractor and subcontractor that will undertake the reclamation project shall have been effected."

The National Government appealed to the Court of Appeals.

Earlier, while the case was pending before the CFI, then President Marcos issued Proclamation No. 100 on September 10, 1966 reserving a parcel of land in the District of Malate, City of Manila consisting of 245,690 square meters under Swo-40880 for Philippine Cultural Center site purposes. On December 15, 1967 President Marcos issued Proclamation No. 316 revoking Proclamation No. 100 and reserving another parcel of land in the Manila Bay area consisting of 257,898 square meters 9under Swo-40880, as site for a Philippine Cultural Center. On October 5, 1972, when the case was before the Court of Appeals, President Marcos issued Presidential Decree (P.D.) No. 15 creating the Cultural Center of the Philippines (CCP). In the same decree, the President assigned and conveyed to the CCP the parcel of land reserved in Proclamation No. 316. 10

On January 11, 1973, President Marcos issued P.D. No. 3-A amending the Public Works Act, R.A. No. 5187. P.D. No. 3-A provided that "the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract," and that existing reclamation contracts "whose validity has been accepted by the National Government shall be taken over by the National Government on the basis of quantum meruit." Pursuant to P.D. 3-A, on November 20, 1973, the National Government, represented by the Commissioner of Public Highways, contracted the services of the Construction and Development Corporation of the Philippines (CDCP) to undertake the "Manila-Cavite Coastal Road Project." 11 CDCP immediately entered into its obligation and continued the reclamation of the Manila Bay area. CDCP developed the area reclaimed by RREC and reclaimed more areas towards the south of Manila. This gave birth to what is now known as the Cultural Center Complex and the Financial Center Complex. 12

On August 22, 1975, President Marcos issued P.D. No. 774 assigning and conveying additional two (2) parcels of reclaimed land consisting of 104,717 square meters under Swo-04-000078 and 400,000 square meters under Swo-04-00141 totalling 504,717 square meters 13 to the Cultural Center of the Philippines.

On February 4, 1977, President Marcos issued P.D. No. 1084 creating the Public Estates Authority (PEA). The PEA was established for the purpose of reclaiming land, including foreshore and submerged areas, and developing, improving and disposing all kinds of real property owned and operated by the government. 14 On the same day, President Marcos issued P.D. No. 1085 decreeing that the reclaimed "foreshore and off-shore areas of the Manila Bay from the CCP, passing through Pasay City, Parañaque, Las Piñas, Zapote, Bacoor up to Cavite City" of the Manila-Cavite Coastal Road Project and all other reclamation contracts covering the same area be conveyed to the PEA. The PEA was to assume the obligations of the National Government in the reclamation project.

In 1978, RREC filed a claim with the then Ministry of Public Highways pursuant to P.D. No. 3-A. RREC proposed to settle the case amicably by seeking from the government payment of P30,396,878.20 representing the value of the reclamation work based on 1974 price levels. 15 The Solicitor General, with the assistance of the Ministry of Public Highways, counter-proposed the payment of the amount of P10,926,071.29 based on price levels obtaining in 1962 when the reclamation work was restrained by the court. RREC rejected the counter-proposal unless an additional six per cent (6%) interest from 1962 up to the time of payment be made. 16 In 1983, RREC again offered to settle the case amicably if it were to be paid in land. Nothing positive came out of it.

On October 20, 1986, RREC filed before the Court of Appeals a "Motion to Admit Additional Evidence" in view of the events that transpired following the promulgation of P.D. No. 3-A. Without objection from the Solicitor General, RREC and Pasay City presented their additional evidence. 17

 

On January 14, 1987, RREC again proposed to settle on the basis of (1) a cash settlement of P35,455,101.31, or (2) property settlement of three point five (3.5) hectares within the CCP Complex covered by TCT

No. 75676 of the CCP. 18 The amount of P35,455,101.31 was based on the principal sum of P10,926,071.29 representing actual reclamation cost at 1962 price levels plus interest at six per cent (6%) and twelve per cent (12%) per annum from 1962 to December 31, 1986.19 The proposal was referred to the Office of the President for consideration. 20 While the proposal was pending, RREC increased its cash demand to P175,000,000.00 and then to P245,000,000.00. The Office of the President found the proposals unacceptable. 21

The proceedings before the Court of Appeals resumed on November 14, 1990. 22 On January 28, 1992, the Court of Appeals affirmed with modification the decision of the trial court. The appellate court upheld the validity of the Reclamation Agreement between Pasay City and RREC but dispensed with the required public bidding in the trial court's decision. It found that RREC reclaimed twenty-one (21) hectares of Manila Bay per admission of RREC's counsel in its appellee's brief, 23 and ordered the National Government to turn over to Pasay City all spaces with no permanent improvement on the 21-hectare reclaimed area. The Court of Appeals also sustained RREC's irrevocable option to purchase sixty per cent (60%) of the 21-hectare land to be exercised within one (1) year from finality of the decision. The dispositive portion of the decision reads as follows:

"WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications:

1.The requirement by the trial court on public bidding and the submission of RREC's plans and specifications to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic;

2.Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession over all vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and RREC at the time it took over the same. Areas thereat over which permanent structures have been introduced shall, including the structures, remain in the possession of the present possessor, subject to any negotiation between Pasay City and the said present possessor, as regards the continued possession and ownership of the latter area.

3.Sustaining RREC's irrevocable option to purchase sixty (60) per cent of the twenty-one (21) hectares of land already

reclaimed by it, to be exercised within one (1) year from the finality of this decision, at the same terms and conditions embodied in the Pasay City-RREC reclamation contract, and enjoining appellee Pasay City to respect RREC's option." 24

RREC and Pasay City moved for reconsideration of the decision mainly claiming that RREC had reclaimed a total of fifty-five (55), not twenty-one (21), hectares of Manila Bay.

In an Amended Decision dated April 28, 1992, the Court of Appeals held that RREC and Pasay City actually reclaimed fifty-five (55) hectares of the Manila Bay before the project was taken over by the National Government. The appellate court declared that since RREC and Pasay City were willing to accept only thirty-five (35) hectares of open land, specifically the Trade and Convention Site and several vacant lots in the CCP Complex, 25 the National Government should reconvey to Pasay City and RREC these "open spaces" totalling nine (9) parcels of land in the name of the CCP. These parcels of land were as follows:

"1.Lot No. 12 with an area of 17,503 sq. m. covered by TCT 18627;

2.Lot No. 3 covered by OCT No. 10251;

3.Lot No. 22 with an area of 132,924 sq. m. covered by TCT 75676;

4.Lot No. 24 with an area of 10,352 sq. m. covered by TCT 75678;

5.Lot No. 25 with an area of 11,323 sq. m. covered by TCT No. 75679;

6.Lot No. 28 with an area of 17,689 sq. m. covered by TCT No. 757684;

7.Lot No. 29 with an area of 106,067 sq. m. covered by TCT 75681;

8.Lot No. 42 with an area of 9,516 sq. m. covered by OCT 159;

9.Lot No. 23 (portion only) with an area of 15,925 sq. m. covered by TCT 75677. 26

The Court of Appeals held:

"WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby AMENDED to read as follows:

1.The requirement by the trial court on public bidding and the submission of the RREC's plans and specifications to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic;

2.Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession of the above- enumerated lots (1 to 9);

3.Sustaining RREC's irrevocable option to purchase sixty (60) percent of the land referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from finality of this Decision, at the same terms and conditions embodied in the Pasay City-RREC reclamation contract, and enjoining Pasay City to respect RREC's irrevocable option." 27

Both parties appealed to this Court.

In September 1992, the Cultural Center of the Philippines, through the Office of the Government Corporate Counsel, filed a petition-in-intervention in G.R. No. 103882 joining cause with the National Government. It alleged that the Amended Decision of the Court of Appeals reconveying to RREC the parcels of land in CCP's name did not bind CCP because CCP was never made a party to the case; and that CCP was compelled to intervene to protect its properties which are indispensable to its existence. 28

Oral arguments were held on June 18, 1997 by the Second Division of this Court where the parties and the CCP were heard. CCP argued, among others, that the nine (9) lots ordered by the Court of Appeals to be reconveyed to RREC and Pasay City are integral to the Cultural Center Complex and are important for the use and enjoyment of the public. One of the lots, i.e., Lot 23 has a permanent improvement which is the Philcite; the four vacant lots are the parking lots of the Philcite, the Cultural Center main building, the Folk Arts Theater (FAT),

the Philippine International Convention Center (PICC); and that three (3) of the lots have been leased out to third parties, i.e., the El Shaddai, the Boom na Boom and Star City. CCP claimed that since 1986, the CCP has not been receiving financial support from the National Government and to finance its projects, it has been subsisting on the income derived from the earnings of its real property. 29

On September 10, 1997, the Second Division of this Court issued a Resolution remanding the case to the Court of Appeals, former Thirteenth Division, 30 to receive evidence and thereafter determine:

"(1)the actual area reclaimed by the RREC; and

(2)the areas of the Cultural Center Complex which are "open spaces" and/or "areas reserved for certain purposes," determining in the process the validity of such postulates and the respective measurements of the areas referred to." 31

The Court of Appeals received evidence presented by CCP and the Solicitor General, and the rebuttal evidence of Pasay City and RREC. In a Commissioners' Report dated November 25, 1997, the Court of Appeals found that CCP and the Solicitor General failed to present sufficient evidence to disprove the finding in the Amended Decision that RREC and Pasay City were able to reclaim fifty-five (55) hectares of Manila Bay. The Commissioners, after ocular inspection of the CCP Complex and consultation with the parties, submitted a list enumerating the lots in the Complex where permanent structures were found and those without structures, otherwise referred to as "open spaces." 32

In June 1998, the Court en banc decided to accept the cases at bar in view of the constitutional issues involved.

In G.R. No. 103882, petitioner Republic of the Philippines (National Government) and petitioner-intervenor Cultural Center of the Philippines (CCP) seek to annul and set aside the Decision and Amended Decision of respondent Court of Appeals.

In G.R. No. 105276, petitioners Pasay City and RREC seek to modify the said Amended decision by ordering respondents National Government and CCP to pay damages and convey fifty-five (55) instead of merely thirty-five (35) hectares of the land the former allegedly reclaimed from Manila Bay.

The National Government claims that:

"I.THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY CITY AND RREC;

II.THE COURT OF APPEALS ERRED IN ORDERING THE TURN OVER TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF CCP." 33

CCP claims that:

"I.THE COURT OF APPEALS ERRED IN FINDING THAT RREC ACTUALLY RECLAIMED AN AREA OF FIFTY FIVE HECTARES OF THE MANILA BAY.

II.THE HONORABLE COURT OF APPEALS ERRED IN ORDERING THE TURNOVER TO RREC OF NINE PARCELS OF LAND REGISTERED IN THE NAME OF CCP." 34

RREC and Pasay City contend that:

"I.THE COURT OF APPEALS ERRED IN NOT DECLARING P.D. No. 3-A UNCONSTITUTIONAL.

II.THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY CITY AND RREC FOR THE ILLEGAL TAKEOVER BY THEREPUBLIC OF THE PHILIPPINES OF THE QUESTIONED RECLAMATION CONTRACT AND THE RECLAIMED AREA." 35

In sum, the main issues are:

1.(a) Does R.A. No. 1899, the law authorizing chartered cities and municipalities to reclaim foreshore lands on their borders, allow the reclamation of submerged lands?

(b)Are the Reclamation Agreements between Pasay City and RREC and City Ordinance Nos. 121 and 158 in accord with R.A. No. 1899?

2.(a) Is P.D. No. 3-A unconstitutional?

(b)Can the President, by the issuance of P.D. No. 3-A, empower the National Government to take over reclamation projects undertaken pursuant to R.A. No. 1899?

 

3.(a) Did the Court of Appeals, in its Amended Decision and Commissioners' Report, correctly determine the size of the area reclaimed by RREC before it was enjoined and taken over by the National Government?

FIRST ISSUE

A.R.A. 1899 authorized municipalities

and chartered cities to undertake

reclamation of foreshore lands only.

Republic Act No. 1899 entitled "An Act to Authorize the Reclamation of Foreshore Lands by Chartered Cities and Municipalities" was passed on June 22, 1957. Section 1 of the law provides:

"Section 1.Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications."

R.A. No. 1899 authorizes municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling or other means, of any foreshore lands bordering their respective territories. The law itself specifies what lands may be reclaimed and these are foreshore lands. It did not, however, define the term foreshore lands.

Four years before R.A. No. 1899 was passed, the term "foreshore lands" was defined by the Court of Appeals in the case of Hacut v. Director of Lands 36 which involved a parcel of land along Basilan Island. The appellate court, quoting from Bouvier's Law Dictionary, defined foreshore lands as:

"that part of the land immediately in front of the shore; the part which is between high and low water marks, and alternately covered with water and left dry by the flux and reflux of the tides. It is indicated by a middle line between the highest and lowest tides." 37

RREC and Pasay City contend that this dictionary definition should not be read into R.A. No. 1899 because it runs counter to the intent of the law. It is alleged that R.A. No. 1899 was patterned after R.A. No. 161 passed by Congress in 1947 authorizing the City of Bacolod to reclaim foreshore lands within its territory. Congress authorized Bacolod City to raise funds not exceeding P6 million to finance the project. 38 Bacolod City, according to RREC and Pasay City, reclaimed 1,600,000 square meters which was not limited to the foreshore as defined in Hacut but extended to lands submerged by the sea. The city later constructed docking and harbor facilities on land it reclaimed.

It is our duty in construing a law to determine legislative intention from its language. 39 The history of events transpiring during the process of enacting a law, from its introduction in the legislature to its final validation has generally been the first extrinsic aid to which courts turn to construe an ambiguous act. 40 We bear in mind, however, that extrinsic aids are resorted to only if the words of the statute are ambiguous. 41 The clear, unambiguous and unequivocal language of a statute precludes any court from further construing it and gives it no discretion but to apply the law. 42 When a statute is clear, it must be taken to mean exactly what it says. 43

Under settled principles of statutory construction, if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. 44 The verba legis 45 or the plain meaning rule rests on the valid presumption that the words employed by the legislature in a statute correctly express its intent or will and preclude the court from construing it differently. 46 The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by the use of such words as are found in the statute. 47

"Foreshore lands" has a settled meaning. It was the dictionary meaning of the term that the Court of Appeals adopted in Hacut. This Court upheld this dictionary meaning in 1965 in the cases of Ponce v. Gomez 48 and Ponce v. City of Cebu. 49 In these cases, the City of Cebu entered into a reclamation contract with the

Cebu Development Corporation to reclaim foreshore land along the coast of Cebu City pursuant to R.A. 1899. This Court declared that the authority to reclaim granted to chartered cities and municipalities under R.A. 1899 is limited to foreshore lands only which, quoting Corpus Juris, is

"that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides."

According to this Court, this is how the term "foreshore" is "generally understood." As a consequence, this Court declared the reclamation contract ultra viresinsofar as sixty per cent (60%) of the area sought to be reclaimed was beyond the foreshore, and sustained as valid only forty per cent (40%) of the area covered by the ordinance and contract within the foreshore.

Almost twenty years thereafter, this Court again defined foreshore lands in the 1984 case of Republic v. Court of Appeals. 50 The case involved the registration of a parcel of land reclaimed by adjoining owners along the shores of the Laguna de Bay. The Director of Lands opposed the application on the ground that the subject land was foreshore land and part of the lake bed. Although the case did not involve the sea, this Court, again citing Bouvier's Law Dictionary, applied the definition offoreshore land as:

". . . that part of [the land] which is between high and low water and left dry by the flux and reflux of the tides . . .

'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." 51

Based on this definition, this Court found that the reclaimed property was not part of the foreshore nor of the lake bed and consequently allowed its registration as private property.

Clearly, the judiciary had adopted the dictionary meaning of "foreshore lands" years before and after the enactment of R.A. No. 1899. Our courts applied this meaning consistently without extending it to include submerged areas or areas under water. We are seldom at liberty to set aside a rule of long standing. Our decisions form part of the law of the land. And when they interpret certain statutes they should be taken into consideration in construing subsequent statutes of similar nature.

It is fair to assume that the legislature, at the time of the enactment of a statute was advised of the prior holdings of the courts, and that it would have specifically altered the courts' interpretation if it so desired. 52 The presumption is that the legislature was acquainted with, and had in mind, the judicial construction of the words in the prior enactment. 53

It was the dictionary definition the judiciary gave to the word "foreshore" that the Legislature recognized in subsequent laws. In 1967, two years after this Courtpromulgated the Ponce cases, Congress passed R.A. 5187, the Public Works Act. Congress approved and appropriated P600 million for the construction of the Manila-Cavite Coastal Road Project, to wit:

"Section 3 (m).For the construction of a seawall and limited access highway from the south boundary of the City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the Municipality of Mariveles, Province of Bataan, to the north, including the reclamation of foreshore and submerged areas: provided That priority in the construction of such seawalls, highway and attendant reclamation works shall be given to any corporation and/or corporations that may offer to undertake at its own expense such projects, in which case the President of the Philippines may, after competitive bidding, award contracts for the construction of such projects, with the winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which shall not exceed fifty per cent of the area reclaimed by the contractor and shall represent full compensation for the purpose, the provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, That the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected —— P600,000,000."

By adding the term "submerged areas" in the reclamation of Manila Bay for the Coastal Road Project, Congress tacitly recognized the limited dictionary meaning of "foreshore lands."

This definition of foreshore lands was again recognized in P.D. No. 3-A, a legislative measure issued by the Chief Executive in 1972. P.D. 3-A

authorized the reclamation of "areas under water, whether foreshore or inland." In 1977, P.D. 1084 created the PEA and authorized it to "reclaim land, including foreshore and submerged areas."

The term "foreshore lands" clearly does not include submerged lands. If it were otherwise, there would have been no need for the legislative and executive branches of government to include "submerged areas" or "areas under water" in subsequent laws. R. A. 5187 and P.D. 3-A were passed after this Court defined "foreshore lands" in the Ponce cases. The adoption of an amendment throws light on the meaning of the act before it was amended. 54 Indeed, where the terms of a statute have acquired a settled meaning through judicial interpretation, and the statute is changed by amendment or re-enactment, and the terms to which judicial interpretation have been given remain in the law thereafter, they are to be understood and interpreted in the same sense theretofore attributed to them by the court, unless by qualifying or explanatory addition a contrary intention of the legislature is made clear. The judicial construction becomes a part of the law, as it is presumed that the legislature in passing the later law knew the judicial construction which had been given to the words of the prior enactment. 55

 

Both the judicial and legislative interpretations lead to the inescapable conclusion that R.A. No. 1899 is limited to the reclamation of foreshore lands and does not include offshore and submerged lands.

It must also be noted that R.A. No. 1899 is a legislative grant of the right to reclaim, the right to develop the land reclaimed and the right to own the reclaimed land. Assuming that the term "foreshore land" is ambiguous and does not have a settled meaning but requires construction, legislative grants are to be construed most favorably to the sovereign and most strongly as against the grantee. 56 Statutory grants by the legislature, when they delegate sovereign authority, or confer special benefits or exemptions are to be construed strictly against the grantee. 57 Statutes in derogation of common or general rights are strictly construed and rigidly confined to cases clearly within their scope and purpose. 58 Grants of public land derogate from sovereign authority and are to be construed strictly against the grantee. 59

RREC and Pasay City claim that reclamation under R.A. No. 1899 cannot be limited to foreshore lands only because this would render the law absurd and useless. They cite sections 1 and 4 of R.A. 1899 which provide:

"Section 1.Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications. Cdpr

xxx xxx xxx

"Section 4.All lands reclaimed as herein provided, except such as may be necessary for wharves, piers and embankments, roads, parks and other public improvements, may be sold or leased under such rules and regulations as the municipality or chartered city may prescribe."

It is contended that reclamation under R.A. No. 1899 was granted to local government units for the primary purpose of establishing, providing, constructing, maintaining and repairing "proper and adequate docking and harbor facilities," as well as the construction of "wharves, piers, embankments, roads, parks and other public improvements." According to RREC and Pasay City, if what may be reclaimed is limited to the area between the high- and low-water marks which is some 10 to 20 meters along the coast, then there will be practically nothing for the construction of the facilities envisioned in the law. They cite the Opinion of former Secretary of Justice Alejo Mabanag to the effect that the technical definition of foreshore land will limit the construction of wharves, piers, docks, etc. to the area parallel to the shore which is an absurd situation. To avoid this perceived absurdity, it is opined that the term "foreshore" should be construed to include offshore or submerged lands.

A close examination of the law, however, will reveal that the purpose of the grant will not be defeated if reclamation is limited to foreshore land. For one, the purpose of reclamation under R.A. No. 1899 is not only to be able to construct piers, docks, etc. Reclaimed foreshore lands can be devoted to a lot of public and private purposes. Roads, parks and other public improvements may be made on reclaimed

foreshore land especially if these are extensions of already existing roads and parks adjacent to the foreshore. Indeed, RREC sold lots to private individuals and these lots are presumably part of the foreshore lands. For another, it is not impossible to reclaim foreshore land, construct wharves and piers on the reclaimed land and extend these structures from the reclaimed land to the submerged areas out in the deep waters. Undeniably, wharves and piers may be constructed on water. Moreover, in some navigable waters of the archipelago, the sea, river or lake bed do not gradually descend from the shore into the deep but at some point from the shore drop into the deep abruptly. In the Ponce cases, this Court did not nullify the entire reclamation agreement of the City of Cebu. It nullified only sixty per cent (60%) of the area sought to be reclaimed as beyond the foreshore but upheld as valid forty per cent (40%) of the area. The plain meaning of a provision not contradicted by any other provision in the same statute, cannot be regarded as absurd. An absurdity means anything which is irrational, unnatural or inconvenient that it cannot be supposed to have been within the intention of men of ordinary intelligence and discretion. 60 The plain meaning of the word must be one in which the absurdity and injustice of applying the provision to the case would be so monstrous that all mankind would, without hesitation, unite in rejecting the application. 61 This situation does not obtain in R.A. No. 1899 limiting reclamation to foreshore lands. And even assuming that R.A. No. 1899 is defective because it only authorized the reclamation of foreshore land, still the remedy is to amend the law and not to torture its contextual meaning by judicial interpretation.

RREC and Pasay City also contend that R.A. No. 161, on which R.A. No. 1899 was patterned, granted the City of Bacolod the authority to reclaim foreshore lands bordering the city. It is claimed that Bacolod City actually reclaimed areas beyond the foreshore under R.A. No. 161. Assuming the truth of the allegation, the act of Bacolod City does not authorize other chartered cities and municipalities under R.A. No. 1899 to likewise reclaim beyond the foreshore. Government cannot be estopped by the mistakes, errors or omissions of its agents. 62 The government's alleged acquiescence in the Bacolod City reclamation project does not estop it from questioning future acts of cities and municipalities especially after the Court of Appeals defined "foreshore lands" years after R.A. No. 161 was enacted and before R.A. No. 1899 became law.

The view that Hacut and the Ponce cases are inapplicable to the case at bar is not well-taken. Hacut may have involved the registration of a parcel of land acquired by accretion but the issue of whether said land could be registered depended on whether it was foreshore land. If it was not, it could be registered; otherwise, it was public property and could not be registered. In fine, the resolution of the issue depended on the definition of foreshore land and the Court of Appeals adopted its dictionary meaning.

The Ponce cases squarely dealt with the application of R.A. No. 1899. To disregard these cases is to ignore the doctrine of stare decisis. The Ponce cases were decided by this Court en banc and we should not thoughtlessly overturn its ruling, lest our decisions become as unpredictable as lotto results.

In sum, the reclamation of lands beyond the foreshore of Manila Bay was ultra vires and therefore null and void.

B.The Reclamation Agreement

and Pasay City Ordinance

Nos. 121 and 159 are

contrary to R.A. No. 1899

and are null and void.

In the instant cases, the Reclamation Agreement between RREC and Pasay City as well as Ordinance Nos. 121 and 158 are not in accordance with the provisions of R.A. No. 1899.

The full text of R.A. No. 1899 reads:

"SEC. 1.Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.

SEC. 2.Any and all lands reclaimed, as herein provided, shall be the property of the respective municipalities or chartered cities: Provided, however, That the new foreshore along the reclaimed areas shall continue to be the property of the National Government.

SEC. 3.For the purpose of this reclamation, and of the construction, maintenance and repair of such wharves, piers, docking and other harbor facilities as may be provided in accordance with Section One hereof, the municipalities and chartered cities are hereby authorized to contract indebtedness with any person, association, corporation, or lending institution. Upon proper application, a municipality or chartered city may, for the same purpose, likewise issue bonds in such amounts and under such terms and conditions as may be fixed by the Secretary of Finance. Such bonds shall be guaranteed by the Government of the Philippines and their issue, servicing and liquidation shall be undertaken by the Central Bank of the Philippines.

SEC. 4.All lands reclaimed as herein provided, except such as may be necessary for wharves, piers and embankments, roads, parks and other public improvements, may be sold or leased under such rules and regulations as the municipality or chartered city may prescribe. All proceeds derived from such sale or lease, and all berthing and other fees and such other earnings as the municipality or chartered city shall derive from the use of the port facilities and improvements contemplated under this Act, shall be credited to a special fund which shall accrue in the first instance to the sinking fund hereafter provided.Any balance thereof in excess of periodic sinking fund requirements shall be available for other permanent public improvements of the municipality or chartered city.

SEC. 5.Upon application by a municipality or chartered city to issue bonds, the Secretary of Finance shall determine the borrowing and paying capacity of the applicant, the amount of the issue that may be authorized, and, in consultation with the Monetary Board of the Central Bank of the Philippines, the form, rate of interest, and redemption of said bonds. In the redemption of these bonds the Secretary of Finance may apply the lottery principle by which bonds, drawn by lot, may be redeemed before maturity.

 

SEC. 6.All loans contracted, and bonds issued under this Act shall be payable, both as to the principal and interest, in Philippine currency or in the currency in which the principal has been originally received, which fact shall be acknowledged on the face of the note or certificate accomplished therefor, free from any tax or other public impost arising from currency conversion, any existing law to the contrary notwithstanding.

SEC. 7.Bonds issued under this Act shall be exempt from taxation, which fact shall be stated on the face of the certificates which shall be issued in accordance with this Act.

SEC. 8.Should the receipts accruing under section four be insufficient to service adequately bonds issued under this Act, the sinking fund deficiency shall be made good by the general funds of the municipality or chartered city in such manner that the annual contribution shall be sufficient to redeem at maturity the bonds issued under this Act. The sinking fund shall be under the custody of the Central Bank of the Philippines which shall invest the same in such manner as the Monetary Board shall approve.

SEC. 9.The provisions of existing law to the contrary notwithstanding, municipalities and chartered cities are hereby authorized and empowered to execute by administration any reclamation work or any construction authorized in section one hereof : Provided, That all such works shall be prosecuted on the basis of plans and specifications approved by the Director or City Engineer concerned who shall certify every statement of accomplished work that the same is in accordance with the approved plans and specifications.

SEC. 10.This Act shall take effect upon its approval."

R.A. No. 1899 grants authority to municipalities and chartered cities to undertake and carry out the reclamation of lands along bodies of water in their respective territorial jurisdiction. The grant of this power is for a public purpose, i.e., to "establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities." The reclamation project must be undertaken by the municipality or chartered city itself by administration in consultation with the Secretary of Finance and the Secretary of Public Works and Communications. To finance the project, the municipal government is authorized to contract indebtedness with any third person, or issue bonds under terms and conditions to be fixed by the Secretary of

Finance. All loans contracted and bonds issued shall be paid in Philippine currency or in the currency in which the principal loan was originally received. All lands reclaimed shall become the property of the municipality or chartered city. Any new foreshore land along the reclaimed areas shall, however, continue to be property of the National Government. Except as may be necessary for public improvements, the reclaimed land may be sold or leased by the municipality or chartered city and all proceeds therefrom and such other fees shall be credited to a special fund. The special fund must first accrue to a sinking fund to pay off the loan incurred from the issuance of bonds. Any excess in the sinking fund shall be used for other permanent public improvements of the municipality or chartered city.

The Agreement dated April 24, 1959 between Pasay City and RREC and Ordinance Nos. 121 and 158 were made under the authority of R.A. No. 1899. The Reclamation Agreement substantially carries the provisions of Ordinance Nos. 121 and 158 and reads as follows:

"AGREEMENT"

"This AGREEMENT entered into by and between PASAY CITY, represented in this act by its duly authorized City Mayor, Pablo Cuneta, and the REPUBLICREAL ESTATE CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the Philippines with principal office at the 2nd Floor, Magsaysay Building, 520 San Luis, Ermita, Manila, represented in this act by its duly authorized officer, Esperanza Zamora.

WITNESSETH:

WHEREAS, Republic Act No. 1899 authorizes municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling or other means of any foreshore lands bordering them;

WHEREAS, Ordinance No. 121 of Pasay City, approved on May 6, 1958, declared a reclamation area aggregating to 300 hectares more or less, of lands bordering Pasay City, beginning from the present boundary of Pasay City and Manila, and extending to the present boundary of Pasay City and Parañaque, and from the present seawall of Pasay City to a distance of one kilometer towards the Manila Bay;

WHEREAS, said Ordinance No. 121 authorized the Republic Real Estate Corporation for and in behalf of Pasay City to reclaim foreshore lands bordering Pasay City, for and in behalf of the said City;

WHEREAS, after consultation with the aforementioned corporation, it was deemed advisable to amend Ordinance No. 121 so to make the terms and conditions of the reclamation work more beneficial to Pasay City;

WHEREAS, the Republic Real Estate Corporation has agreed to the amendment of the aforementioned Ordinance No. 121;

WHEREAS, Amendatory Ordinance No. 158 was approved on April 21, 1959;

WHEREAS, under said Amendatory Ordinance, the Mayor of Pasay City is authorized, empowered and directed to sign and execute any and all papers, documents, contract or contracts necessary and proper to be signed and executed with the Republic Real Estate Corporation or with any person or entity in order to immediately put into effect the provisions of this Ordinance.

NOW THEREFORE, for and in consideration of the foregoing premises and the hereunder stipulations, the parties have hereby agreed and covenanted that:

1.Pasay City will borrow from the Republic Real Estate Corporation and from nobody else, such sum or sums of money which may be needed from time to time to undertake the reclamation of foreshore lands bordering the City, in accordance with plans and specifications submitted to the Director of Public Works for approval; provided, however, that the loan or loans shall be made by the Republic Real Estate Corporation from time to time as disbursements are made for the purchase of materials and supplies, the purchase or lease of construction machinery and equipment, the payment of salaries and wages and the payment of other contractual obligations in any form incurred in connection with the reclamation of foreshore lands above mentioned.

2.The sum or sums of money to be borrowed by Pasay City under this Ordinance, shall bear interest at the rate of 6% per annum computed from the date of the actual

disbursement made by Republic Real Estate Corporation in behalf of the City.

3.The Republic Real Estate Corporation shall, as soon as practicable, after the end of each month, submit to Pasay City a complete and accurate statement of the amount of disbursements and expenditures during the preceding month

4.The sum or sums of money loaned by the Republic Real Estate Corporation to Pasay City, including the accrued interests thereon, shall be payable to the said corporation upon its written demand but not before 50 hectares of foreshore lands shall have been reclaimed and certified by the City Engineer and accomplished in accordance with plans and specifications approved by the Director of Public Works; provided, however, that further demands for payment may be made from time to time as reclamation of every additional 50 hectares of foreshore lands shall have been accomplished and certified by the District Engineer, until the entire project envisioned under this ordinance is finally completed.

5.The Republic Real Estate Corporation, in consideration of its agreeing to loan to the City the funds necessary for the reclamation of the foreshore lands abovementioned is hereby granted the irrevocable option to purchase from Pasay City all the reclaimed lands which the City, in accordance with law, has the power to sell but which shall not exceed 60% of the entire area reclaimed, it being understood that 40% of the reclaimed area shall be reserved by the City for use as wharves, piers, embankments, roads, gutters, sites for schoolrooms, municipal areas, sites for civic buildings, parks, estuaries, lagoons, and other public improvements as are indicated in the plans submitted to the Director of Public Works; provided, however, that theRepublic Real Estate Corporation shall have the right to select that portion of the reclaimed land which it shall purchase; provided, further, that the option to purchase herein granted to the Republic Real Estate Corporation shall be exercised not later than 12 months from the date or dates the City Engineer shall certify that portions of the reclamation project not less than 50 hectares in area shall have been accomplished or completed in accordance with the plans and specifications approved by the Director of Public

Works; and provided, furthermore, that the purchase price to be paid by theRepublic Real Estate Corporation under its irrevocable option shall be P10.00 per square meter.

6.In case Pasay City has outstanding obligations in favor of the Republic Real Estate Corporation in connection with the loans made pursuant to this Ordinance at the time that the Republic Real Estate Corporation exercises its option to purchase the reclaimed land to be designated by said corporation within the limits stated in Section 5 hereof, the amount of said obligations may be directed by said Corporation to be applied against the purchase price thereof and as soon as the full purchase price of the reclaimed area or a portion thereof is paid by the Republic Real Estate Corporation, it shall be the obligation of this City to deliver to the said Corporation possession of the land purchased and immediately take such step or steps as are necessary to obtain for the Republic Real Estate Corporation title to the property purchased in accordance with the Land Registration Act or any other law or laws of the Philippines, provided, however, that, at its option, the Republic Real Estate Corporation may take such step or steps as are necessary to obtain such title in its name in accordance with the laws aforementioned at the expense of the City.

 

7.In the event that all the saleable portion of the reclaimed land is purchased by the Republic Estate Corporation in accordance with this ordinance, and the purchase price thereof is less than the actual outstanding loans payable by the City to said Corporation under this ordinance, this City shall be relieved from paying the difference and the Republic Real Estate Corporation shall have no recourse, absolutely and forever, against the City or any of its properties.

8.The area of the foreshore lands to be reclaimed by Pasay City shall be 300 hectares; provided, however, that should it be deemed necessary to reclaim a larger area than 300 hectares, then such reclamation of the additional area shall be undertaken under the same terms and conditions of this ordinance, except that with regard to such additional area the Republic Real Estate

Corporation shall continue to have irrevocable option to purchase these additional lands at the same price fixed in Section 5 of this Ordinance; provided, however, in such a case Republic Real Estate Corporation shall have the option to purchase only 50% of the additional area so reclaimed, the other 50% being reserved by the City for itself and the said 50% shall not be held liable to the Republic Real Estate Corporation for any indebtedness that the City may incur in favor of the said corporation, but the RepublicReal Estate Corporation shall have the option to make or not to make further loans to the City.

9.The Republic Real Estate Corporation, for and in consideration of the loan that it will extend to Pasay City, is hereby constituted, appointed, nominated, and made as the Attorney-in-fact of the said City, with full and irrevocable powers to do any and all things necessary and proper in and about the premises to carry out the reclamation of foreshore lands bordering Pasay City, to the extent indicated in the next preceding Section, including, but not limited to, the power to hire the services of contractors or sub-contractors, to retain the services of any person or persons, natural or juridical, as technical consultants and supervisors; provided, however, that any and all contracts to be entered into by the said Attorney-in-fact, for and in behalf of Pasay City, in connection with the reclamation work to be undertaken, shall be submitted to public bidding, provided, furthermore, that in the event that there are no bidders or that the bids submitted by the contractors or sub-contractors are not acceptable because prejudicial to the interest of the City in the discretion of the Attorney-in-fact, then, the Attorney-in-fact may itself undertake the work to be performed so as not to delay or hamper the reclamation.

10.The Republic Real Estate Corporation shall, upon the signing of this agreement, immediately undertake for and in behalf of Pasay City, all the works on the reclamation of the whole three hundred (300) hectares, more or less, mentioned in the second WHEREAS Clause of this Agreement, and shall start or commence the initial work thereon like dredging, filling and others, not later than December 31, 1959.

11.That the Republic Real Estate Corporation shall also be required to put a fishermen's wharf where banca-owners can take their bancas; and this area may be extended beyond the one kilometer limit from the original shoreline but not to exceed one and one-half kilometers.

12.The Republic Real Estate Corporation shall be responsible for all damages actually sustained by owners of private property by virtue of the reclamation project and suits by employees and workers arising from or in connection with their employment or service in the reclamation project that will be undertaken by the Republic Real Estate Corporation, provided, however, that the Republic Real Estate Corporation can avail itself of all defenses pertaining to Pasay City.

13.The Republic Real Estate Corporation thereby agrees, in connection with hiring of laborers for the construction and reclamation hereinabove mentioned, to hire 80% of the laborers who are bona-fide residents of Pasay City, thru the City Mayor, except those which may require highly technical skills.

14.That to insure the compliance by the Republic Real Estate Corporation of any and all the conditions hereinabove mentioned, in favor of the Pasay City Government, the Republic Real Estate Corporation shall execute a performance bond in an amount of ONE HUNDRED THOUSAND (P100,000.00) PESOS.

IN WITNESS WHEREOF, the parties have hereunto set their hands in the City of Manila this 24th day of April, 1959.

REPUBLIC REAL ESTATE

CORPORATIONPASAY CITY

By: (Sgd.) Esperanza ZamoraBy: (Sgd.) Pablo Cuneta

(T.W.) ESPERANZA ZAMORA(T.W.) PABLO CUNETA

TreasurerMayor

SIGNED IN THE PRESENCE OF:

(Sgd.) Illegible(Sgd.) Lorenzo S. Ramos"

xxx xxx xxx." 63

The Reclamation Agreement does not conform with R.A. No. 1899 for the following reasons:

(1)The Agreement does not only cover foreshore lands but starts from the seawall on Pasay City and extends one kilometer into the Bay. The one-kilometer stretch shall start from the Pasay City-Manila border and end at the Pasay City-Parañaque border for a total of three hundred hectares (300) with right to reclaim a larger area when deemed necessary by RREC . It is of judicial notice that Manila Bay does not have substantial foreshore land. The waters of the bay wash against the seawall and any foreshore is confined to a few meters along the coast; 64

(2)The reclamation under R.A. No. 1899 must be undertaken by the chartered city or municipality by administration. 65 In the Agreement, reclamation was undertaken and administered by RREC not Pasay City. 66

RREC and Pasay City claim that RREC was the attorney-in-fact or agent of Pasay City, therefore, in effect, Pasay City itself administered the reclamation.

This arrangement does not conform with R.A. No. 1899. The law expressly provides that reclamation shall be done by the local government unit by administration. "Administration" is synonymous with management. The required "administration" by the municipal corporation excludes the idea of an agency for the purpose of performing the reclamation work. In other words, the chartered city or municipality should itself administer or manage the reclamation project. Where a statute directs the performance of certain things in a particular manner or by a particular person, it implies that it shall not be done otherwise or by a different person. 67Expressio unius est exclusio alterius.

(3)Assuming that R.A. No. 1899 allows reclamation by contract, the reclamation contract with RREC was not awarded by Pasay City through public bidding. 68

RREC and Pasay City argue that RREC's authority to reclaim did not attach ipso facto but was subject to the condition that all reclamation contracts and sub-contracts be submitted first to public bidding. In short, RREC was also under obligation to bid for the reclamation contract. It is only when no bidders shall have appeared or qualified, or when the bids submitted were "not acceptable because they are prejudicial to the interest of the city" that RREC could undertake the reclamation.

Paragraph 9 of the Agreement provides that any and all contracts entered into by the attorney-in-fact in connection with the reclamation work shall be submitted to public bidding and if there are no bidders or the bids submitted are not acceptable because they are prejudicial to the interest of the City "in the discretion of the attorney-in-fact," then the attorney-in-fact "may itself undertake the work to be performed." The Agreement does not state whether Pasay City conducted a bidding before it awarded the principal contract to RREC. The required public bidding in the Agreement refers to the sub-contracting of works in the project which works may likewise be undertaken by RREC itself.

(4)The reclamation under R.A. No. 1899 is to be undertaken and carried out by the chartered city or municipality itself, at its own expense and to be financed by loans obtained from third persons or lending institutions.

Under the Agreement, Pasay City was to borrow money from RREC to finance the reclamation project. 69 For and in consideration of this loan, RREC was to be paid the following: (1) the principal sum of what Pasay City borrowed; (2) interest on the sums borrowed at the rate of 6 per cent (6%) per annum computed from the date of its actual disbursement in behalf of the City; 70 and (3) by the express grant of an irrevocable option to purchase 60% of the entire lands reclaimed. 71

The Agreement does not mention the amount of money Pasay City was to borrow from RREC. Strangely enough, the Agreement provides that Pasay City was to borrow money from RREC, and nobody else. This implies that Pasay City was not free to contract indebtedness with any person, association or corporation or lending institution. Pasay City was to borrow money only from RREC to finance the reclamation which RREC itself, and not Pasay City, was to undertake. Pasay City bound itself to pay this undetermined loan with interest after RREC shall have reclaimed fifty (50) hectares of the contract area. Indeed, even before

RREC could reclaim said fifty (50) hectares, it was already selling lots to the public. In sum, RREC was to lend money to Pasay City to finance the project which RREC was going to undertake. 72 RREC was, in effect, giving itself its own money!

(5)Under R.A. No. 1899, the loan contracted by Pasay City is to be payable in Philippine currency or in the currency in which the principal had been originally received. 73

There is nothing in the Agreement that indicates how much Pasay City proposed to borrow from RREC and in what currency the loan was to be given. Paragraph 1 of the Agreement merely declares that Pasay City was to borrow "such sum or sums of money as may be needed from time to time . . ."

 

Paragraph 2 of the Agreement states that this "debt" was to bear interest at 6% per annum which shall be paid to RREC upon written demand after 50 hectares shall have been reclaimed. 74 There is no clear and categorical statement as to the amount of the principal "loan" of Pasay City, or whether this "loan" was delivered to and received by Pasay City, directly or indirectly.

The Agreement, however, grants RREC, in consideration of its loan to Pasay City, the irrevocable option to purchase sixty per cent (60%) of the land reclaimed at a fixed price of P10.00 per square meter. The irrevocable option shall be exercised not later than twelve (12) months from the time the City Engineer certifies that fifty (50) hectares of the project have been reclaimed in accordance with the plans and specifications approved by the Director of Public Works. 75 The Agreement provides that in case Pasay City is unable to pay its "debt" to RREC, the debt shall be applied to the purchase price of the land under RREC's irrevocable option.

In short, the irrevocable option to purchase granted by Pasay City to RREC implies that Pasay City's "debt" shall be payable in land. 76

Foreshore lands are lands of public dominion. They belong to the State. In derogation of the State's sovereign power over its property, R.A. No. 1899 gave chartered cities and municipalities the right to acquire these lands for a stated public purpose, provided that the conditions of the law are met. 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. 77 It is clear from a reading of R.A. No. 1899 that at every stage of the procedure — before, during and after the reclamation — the State retains control and regulation over the disposition of its own property. Unless the land is alienated in accordance with law, the State retains its rights over its property as dominus.78

The provisions of the Reclamation Agreement do not meet the requirements of R.A. No. 1899. City Ordinance Nos. 121 and 158 which are substantially reproduced in the said Agreement are illegal. They purport to grant Pasay City the authority to reclaim lands in Manila Bay for purposes stated in the law. The Agreement, however, gives RREC the power to reclaim and own practically almost all of the land sought to be reclaimed. The complex provisions of the Agreement reveals an insidious attempt to circumvent R.A. No. 1899 for the benefit of RREC . The Agreement is in reality a sweetheart contract; it is grossly disadvantageous and iniquitous to Pasay City.

Since the Reclamation Agreement and City Ordinance Nos. 121 and 158 are illegal, it follows that the reclamation project by RREC and Pasay City is null and void and the State retains ownership over the land reclaimed.

SECOND ISSUE

Assuming, nevertheless, that the Reclamation Agreement is valid, the take over of the reclamation project by the National Government was well within the sovereign power of the State.

The National Government, by virtue of P.D. 3-A, took over the reclamation project of RREC and Pasay City. P.D. No. 3-A provides that the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized thereby. All reclamations made by entities other than the National Government are deemed forfeited to the State without need of judicial action. All ongoing reclamation projects shall likewise be taken over by the National Government which shall, however, compensate the parties to the reclamation projects quantum meruit.

In the cases at bar, Pasay City and RREC claim that P.D. No. 3-A is unconstitutional because it is a legislative measure issued by the Chief Executive; that it impaired the obligation of contracts and amounts to a

deprivation of property without just compensation and due process of law. These submissions lack merit.

A.Reclamation, which includes

ownership of the land

reclaimed is essentially a

function of the sovereign.

All lands and waters of the public domain are owned by the state. This principle is derived from the jura regalia or Regalian doctrine which is the prerogative or proprietary right belonging to the sovereign. 79 The doctrine was adopted and enshrined in the 1935, 80 1973 81 and 1987 Constitutions. 82 The State is, by the Constitution, the owner of all lands belonging to the public domain, the waters, minerals, fisheries, forests and all natural resources therein.

Spain, in its earlier decrees, embodied the universal feudal theory that all lands were held from the Crown. 83 In one of the royal decrees incorporated in theRecopilacion de Leyes de las Indias, the Spaniards declared that:

"We, having acquired full sovereignty over the Indies, and all lands, territories, and possessions not heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to the royal crown and patrimony, it is our will that all lands which are held without proper and true deeds of grant be restored to us according as they belong to us, in order that after reserving before all what to us or to our viceroys, audiencias, and governors may seem necessary for public squares, ways, pastures, and commons in those places which are peopled, taking into consideration not only their present condition, but also their future and their probable increase, and after distributing to the natives what may be necessary for tillage and pasturage, confirming them in what they now have and giving them more if necessary, all the rest of said lands may remain free and unencumbered for us to dispose of as we may wish." 84

This decree dictated that all those lands which had not been granted by Philip, or in his name, or by the kings who preceded him, belonged to the Crown. 85 The king, as the representative of the

people, assumed, asserted, and had title to all the land in the Philippines, except as far as he saw fit to permit private titles to be acquired. 86

The Regalian doctrine was also recognized in the common law of England and was introduced into the United States. 87 The English possessions in America were claimed by right of discovery. 88 Having been discovered by subjects of the King of England, and taken possession of in his name, by his authority or with his assent, they were held by the King as the representative of and in trust for the nation; and all vacant lands, and the exclusive power granted them, were vested in him. 89The Crown, according to the principles of the British law, was the proper organ to dispose of the public domains. 90

The Crown's title to the land extended to all land covered by navigable waters in which the tide ebbs and flows. By the common law, both the title and the dominion of the sea, and of the rivers and arms of the sea, where the tide ebbs and flows, and of all lands below high-water mark, within the jurisdiction of the Crown of England, were in the King. 91 Such waters and the lands they covered, either at all times, or when the tide was in, were incapable of ordinary and private occupation, cultivation and improvement; and their natural and primary uses were public in their nature, for highways of navigation and commerce, domestic and foreign, and for the purpose of fishing by all the King's subjects. Therefore, the title, jus privatum, in such lands, as of waste and unoccupied lands, belonged to the King as the sovereign; and the dominion thereof, jus publicum, was vested in him as the representative of the nation and for the public benefit. 92

Similarly in the Philippines, the Spanish Law of Waters of 1866 provided that the coasts or maritime frontiers of Spanish territory with their coves, inlets, creeks, roadsteads, bays and ports were part of the national dominion and open to public use. They belonged to the sovereign, now the state, and to no one person in particular. 93 These bodies of water are within the land boundaries of the state or are closely linked to its land domain that they are treated as internal waters inInternational Law. Internal waters have been considered as legally equivalent to the national land. 94

Articles 1 and 18 of the Spanish Law of Waters of 1866 provide:

"Article 1.The following are part of the national domain open to public use:

1.The coasts or maritime frontiers of Spanish territory, with their coves, inlets, creeks, roadsteads, bays and ports.

2.The coast sea, that is, the maritime zone encircling the coasts, to the full width recognized by international law. The State provides for and regulates the police supervision and uses of this zone, as well as the right of refuge and immunity therein, in accordance with law and international treaties.

3.The Shores. — By the shore is understood that space covered and uncovered by the movement of the tide.

Its interior or terrestrial limit is the line reached by the highest equinoctial tides. Where the tides are not appreciable, the shore begins on the land side at the line reached by the sea during ordinary storms or tempests."

xxx xxx xxx

Article 18.In no place on the coasts, shores, ports, or entrances of rivers, nor on the islands referred to in Art. 3, shall new works of any kind whatever be constructed, nor any building be erected, without proper permission, in accordance with the provisions of this law and with those of the law regarding ports.

xxx xxx xxx."

The coast sea and its shores 95 with its coves, inlets, creeks, roadsteads, ports, bays, etc. are part of the national domain and are open to public use. They have remained property of public ownership devoted to public use under the Civil Code of 1889 96 and property of public dominion under the Civil Code of 1950. 97Property of the public domain is held by the State in the exercise of its sovereignty for the public interest. The State takes care of it, preserves and regulates it whenever it must be brought into use. It is part of the patrimony under safeguard of the State. 98

 

Since the sea and its shores belong to the national domain, Article 18 of the Spanish Law of Waters of 1866 as aforequoted strictly prohibited the construction of any works or the erection of any building at any place on the coasts and shores, without proper authorization from the government. 99 The foreshore lands and those under water were

controlled by the government as agent of the State and were held in trust for the benefit of the public. 100

The State, as sovereign owner of the sea and its shores, recognized the right to reclaim the land it owns. Article 5 of the Spanish Law of Waters, provides:

"Article 5.Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority."

This provision recognized the power of the State and the provinces, pueblos and private persons, with proper permission, to reclaim lands from the sea. The grant to provinces, pueblos or private persons to undertake reclamation of lands of the sea, however, did not divest the State of its ownership and control over these lands. The State remained owner of the lands. Ownership of land reclaimed from the sea and its shores could be given the adjoining owner or of the person reclaiming, pursuant only to an express grant. 101 There must be a formal declaration through the executive or legislative branches of government that land reclaimed from the sea was no longer needed for coast guard service, for public use or for special industries in order that such land could be considered as having ceased to be part of the public domain and was now available for private appropriation or ownership. 102 Absent a valid grant and declaration from the State, any land reclaimed from the sea, whether foreshore or under water, remained property of the State.

The public nature of reclaimed land was affirmed in 1907 when the Philippine Commission passed Act 1654, "An Act to Provide for the Leasing of Reclaimed Land for Commercial Purposes, for the Leasing of the Foreshore and Lands Under Water, and to Regulate the Construction of Bridges over Navigable Waterways." Act 1654affirmed the power of the National Government, as agent of the State, to reclaim the foreshore and lands under water. The law, in pertinent part, reads:

"Section 1.The control and disposition of the foreshore as defined in existing law, and the title to all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands, shall be

retained by the Government without prejudice to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta Extension."

Section 2.(a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed in the Bureau of Lands.

(b)Upon the completion of such plats 103 and plans the Governor-General shall give notice to the public that such parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial and business purposes, and upon receipt of an application or applications for a lease or leases, the Governor-General shall designate and specify certain portions of the land for such use, and shall give notice by public advertisement that such applications have been made and that the Government will lease lots or blocks, to be specified in said advertisement, for commercial and business purposes, such leases to run for a period of ninety-nine years . . ."

xxx xxx xxx

Section 5.Upon receipt of an application or applications for the lease of any portion of the foreshore or lands under water in the Philippine Islands for the purpose of erecting and maintaining wharves, docks, piers, marine railways, or other appropriate structures, and upon the recommendation of the Secretary of Commerce and Police, the Governor-General may designate and specify such portions of the foreshore lands or lands under water for such use, and shall give notice by public advertisement that such applications have been made and that the Government will lease such portion of the foreshore, to be specified in said advertisement, for wharves, docks, piers, marine railways, or other appropriate structures for a term not to exceed ninety-nine years, with the right on the part of the lessee to erect and maintain such wharves, docks, piers, marine railways, or other appropriate structures, or to make such other beneficial use of such leased foreshore or lands under water as may be specified in the lease, subject, however, to all vested rights or easements of owners of lands adjacent to such foreshore or lands under water.

xxx xxx xxx" 104

In 1919, the Philippine Legislature passed Act 2874, the Public Land Act. This law declared which lands of the public domain may be disposed to the public. Lands reclaimed by the government and the foreshore could only be disposed of by lease. Title III of the law was devoted to lands for commercial or industrial purposes and for this purpose classified disposable lands as follows:

"Section 56.The lands disposable under this title shall be classified as follows:

(a)Lands reclaimed by the Government by dredging, filling, or other means;

(b)Foreshore;

(c)Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;

(d)Lands not included in any of the foregoing classes.

xxx xxx xxx

Section 58.The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private parties by lease only and not otherwise, as soon as the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act."

The provisions of Act 2874 as amended, specifically Title III thereof, were substantially reenacted in Commonwealth Act 141, the Public Land Act of 1936. 105Commonwealth Act No. 141 has remained in effect at present.

Foreshore lands are lands of public dominion intended for public use. 106 So too are lands reclaimed by the government by dredging, filling, or other means. Act 1654mandated that the control and disposition of the foreshore and lands under water remained in the national government. Said law allowed only the "leasing" of reclaimed

land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government were to be "disposed of to private parties by lease only and not otherwise." Before leasing, however, the Governor General, upon recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that the land reclaimed was not necessary for the public service. This requisite must have been met before the land could be disposed of. But even then, the foreshore and lands under water were not to be alienated and sold to private parties. The disposition of the reclaimed land was only by lease. The land remained property of the State.

Reclamation refers to the filling of submerged land by deliberate act and reclaiming title thereto. 107 The right to reclaim is a function of the sovereign who owns title to all the lands and waters of the public domain. The authority to reclaim is not a right or privilege accorded any person and the land reclaimed does not belong to whosoever undertakes its reclamation. Even private owners of lands adjoining bodies of water, especially the sea and navigable waters, cannot motu proprioundertake reclamation of shores and submerged lands and claim title thereto. Unless the State, through Congress, grants this right, it is only the National Government that can undertake reclamation work and assert title to reclaimed land. 108

B.The State, in derogation of

its sovereign power, delegated

to municipalities and chartered

cities the right to reclaim

foreshore lands on their borders

with the passage of R.A. No. 1899.

After the war, the State delegated to specific municipalities the right to reclaim land. The Philippine Legislature passed laws granting municipalities the right to reclaim foreshore or marshy lands within their respective territories. 109 The rule remained, nonetheless, that no person, public or private, could undertake reclamation work and own the land they reclaimed without a specific grant from Congress. It was only with the passage of R.A. 1899 in 1957 that Congress granted to chartered cities and municipalities a general authority to reclaim

foreshore lands bordering their respective territories. 110 The law was in keeping with the trend of giving more autonomy to local governments.

It is beyond debate that the grant of the right to reclaim and assert title to the land reclaimed is a public grant and must be subject to strict scrutiny. We have announced this principle in Manila Lodge No. 761 v. Court of Appeals 111 where in 1905, the Philippine Commission enacted Act No. 1360 authorizing the City of Manila to reclaim a portion of the Luneta to form part of the Luneta Extension. The Act provided that the reclaimed area "shall be the property of the City of Manila." ThisCourt held that the grant made by Act No. 1360 was a grant of a public nature, the same having been made to a local political subdivision. It was a gratuitous donation of public resources which resulted in unfair advantage to the grantee. 112 The exercise of the right by the grantee must therefore be in accordance with, and is limited by the conditions expressly and impliedly imposed by the State, the grantor.

 

It ought to be self-evident that being a public grant, the right to reclaim and own public land granted by the sovereign to municipal corporations may be revoked by the sovereign itself .

C.The State, through P.D. No.

3-A, validly revested in the

National Government the

right to reclaim.

P.D. No. 3-A revoked the power delegated to municipalities and chartered cities to reclaim foreshore lands in their territories. It returned to the National Government the power to reclaim "areas under water, whether foreshore or inland." In effect, it repealed R.A. No. 1899.

Presidential Decree No. 3-A was promulgated on January 11, 1973 and reads as follows:

"AMENDING SECTION 7 OF PRESIDENTIAL DECREE NO. 3, DATED SEPTEMBER 26, 1972, BY PROVIDING FOR THE EXCLUSIVE PROSECUTION BY ADMINISTRATION OR BY CONTRACT OF RECLAMATION PROJECTS.

I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as 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:

SEC. 1.Section 7 of Presidential Decree No. 3 dated September 26, 1972, is hereby amended by the addition of the following paragraphs:

"The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract.

"All reclamations made in violation of this provision shall be forfeited to the State without need of judicial action.

"Contracts for reclamation still legally existing or whose validity has been accepted by the National Government shall be taken over by the National Government on the basis of quantum meruit, for proper prosecution of the project involved by administration."

SEC. 2.This Decree shall take effect immediately.

xxx xxx xxx

P.D. No. 3-A revested in the National Government the power to undertake reclamation projects. P.D. No. 3-A was an amendment to P.D. No. 3 which reads as follows:

"PRESIDENTIAL DECREE NO. 3

"APPROPRIATING FUNDS FOR PUBLIC WORKS INVOLVING REHABILITATION AND CAPITAL DEVELOPMENT, SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS"

WHEREAS, the rehabilitation and reconstruction of damaged infrastructure facilities due to the recent calamities is a

primordial duty of the Government, to bring about normality in the economic and social activities of the people;

WHEREAS, in addition to rehabilitation and reconstruction, development efforts must be carried on with even greater effect, to avoid economic stagnation;

WHEREAS, the implementation of the rehabilitation and reconstruction and the undertaking of other development projects would require the availment of financial assistance proffered by international lending institutions and other governments;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081 dated September 22, 1972, as amended, and for sustained development of the economy, do hereby issue this decree.

For this purpose, the attached appropriations measure is hereby adopted and decreed as part of the law of the land.

Done in the City of Manila, this 26th day of September, in the year of our Lord, nineteen hundred and seventy-two."

P.D. No. 3 appropriated funds for public works for the "rehabilitation and reconstruction of damaged infrastructure facilities due to recent calamities," and at the same time, carry "development efforts with greater effect to avoid economic stagnation." In other words, P.D. No. 3 was aimed at reconstructing damaged infrastructure facilities and developing other public works in line with the national infrastructure and development plan. P.D. No. 3-A amended P.D. No. 3 by declaring reclamation as a national project.

D.No right to irrepealable laws —

R.A. No. 1899 validly repealed.

P.D. No. 3-A is an amendatory law and was impelled by a public purpose, i.e., the necessity to provide for a centralized mechanism in the implementation of public works projects. The National Government obtained loans from international lending institutions and foreign governments to finance vital infrastructure projects. To ensure the priority and completion of these projects, the National Government

saw it fit to integrate all reclamation projects and take over the same in sync with the national agenda. 113

It is thus clear that the National Government did not revest to itself the right to reclaim foreshore and submerged lands for a frivolous purpose. It used the reclaimed land to construct a cultural and financial center complex in these areas and dedicated the entire land reclaimed and to be reclaimed to this noble vision. The Cultural Center Complex covers an area of eighty-seven point two (87.2) hectares and is composed of lots where several buildings now stand. The Complex principally has the main CCP building which houses the main theater, smaller theaters, an art gallery and library under one structure. Behind the main building are the Folk Arts Theater, the Tahanang Pilipino, the Philcite, Philippine International Convention Center, the Philippine Plaza Hotel, etc. South of the CCP Complex is the Financial Center Complex. It is composed of lots for the Central Bank of the Philippines, the Government Service Insurance System, the Social Security System, the Philippine National Bank and the Development Bank of the Philippines. 114

The CCP is a "non-municipal public corporation" 115 established for the primary purpose of propagating arts and culture in the Philippines. It was created to awaken the consciousness of the Filipino people to their artistic and cultural heritage, and encourage them to assist in its preservation, promotion, enhancement and development. 116 The CCP Complex was established as a worthy venue for Filipino artists to express their art and for the people to appreciate art and the Filipino culture. In furtherance of this objective, the CCP, through its Board of Trustees, was likewise mandated to come up with programs and projects that cultivate and enhance public interest in, and appreciation of Philippine art; discover and develop talents connected with Philippine cultural pursuits; create opportunities for individual and national self-expression in cultural affairs; and encourage the organization of cultural groups and the staging of cultural exhibitions. 117 The properties of the CCP, both real and personal, are administered and held in trust by the Board of Trustees of the CCP for the benefit of the Filipino people. 118 Income derived from its projects and operations are invested by the Board of Trustees in a Cultural Development Fund set up to attain the objectives of the CCP. 119

The site of the CCP was chosen for historical reasons. Much of our history and culture flourished along the shores of Manila Bay. This is where the early Filipinos under Rajah Lakandula made their

settlement. This is also where the Spaniards and their armadas landed to establish Intramuros. It was also in Manila Bay where the Spanish-American battle was fought, and in nearby Corregidor, the Filipinos and Americans heroically fought the Japanese. 120

Unlike other decrees of President Marcos, P.D. No. 3-A was not revoked by President Corazon C . Aquino. 121 Today, the reclamation of foreshore and submerged lands within the national territory continues to be a function of the National Government, through the PEA. The PEA was created by P.D. No. 1084 in 1977 and until now, it still exists under the same charter. It discharges the same functions in its charter and continues to coordinate and exercise jurisdiction over all reclamation projects throughout the country in accordance with the national agenda. 122

E.P.D. No. 3-A does not

violate the equal

protection clause.

P.D. No. 3-A does not violate the equal protection clause of the Constitution. Equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. 123 The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class. P.D. 3-A does not discriminate against Pasay City and RREC. The law is couched in general terms and applies to all persons, natural or juridical, under the same class. It addresses all "contracts for reclamation . . . legally existing or whose validity has been accepted by the National Government . . ." It provides for the take-over of all reclamation projects and applies to all reclamation contracts regardless of the parties and the size or location of the area being reclaimed.

F.P.D. No. 3-A is not an undue

delegation of legislative

power.

Nor is the law an undue delegation of legislative power. Neither is it a usurpation of legislative power. P.D. Nos. 3 and 3-A were promulgated after then President Marcos declared martial law on September 21, 1972. 124 The President invoked his emergency powers under Proclamation No. 1081 and General Order No. 1 in enacting both P.D.'s. 125 As Commander-in-Chief of the Armed Forces, the power of then President Marcos to promulgate proclamations, orders and decrees essential to the security of the Republic, and the power to institute political and economic reforms to meet the impact of worldwide recession, inflation and economic crisis was recognized by this Court in Aquino, Jr. v. Commission on Elections. 126 This Court upheld the legislative power of the President as flowing from his martial law powers and the transitory provisions of the 1973 Constitution. 127 Noteworthy, the Freedom Constitution also granted former President Aquino legislative power to cope with the emergency posed by the transition from former President Marcos' government.

 

G.P.D. No. 3-A does not authorize

taking of property without just

compensation.

No property can be taken without just compensation. P.D. No. 3-A recognized the existence of "reclamation contracts still legally existing or those whose validity has been accepted by the National Government" and provided compensation on the basis of quantum meruit.

Quantum meruit means that payment shall be made in an action for work and labor as much as the plaintiff reasonably deserves. 128 P.D. No. 3-A did not declare a fixed non-negotiable price for compensation, in disregard of due process. It set compensation at the common law concept of quantum meruit, "as much as the person deserves" which is a fair and equitable consideration. Moreover, compensation is not limited to reclamation contracts that are valid under the law. Compensation also extends to those contracts "whose validity has been accepted by the National Government."

H.RREC cannot invoke P.D.

No. 3-A and later attack

it as unconstitutional.

RREC and Pasay City did not challenge the constitutionality of P.D. No. 3-A before the Court of Appeals. For this Court to exercise the power of judicial review, the question of constitutionality must be raised at the earliest opportunity. 129 And RREC and Pasay City not only failed to challenge the constitutionality of the decree, worse, they used P.D. No. 3-A in seeking compensation from the National Government. P.D. No. 3-A was issued in 1973. Five (5) years later, in 1978, RREC filed a claim for quantum meruit compensation on the basis of P.D. No. 3-A with the then Ministry of Public Highways and the Solicitor General. In 1983, RREC offered to accept land and negotiated with the PEA for such payment. On October 20, 1986, RREC filed with the Court of Appeals, a Motion to Admit Additional Evidence to prove the area of land it reclaimed so it can be compensated under P.D. No. 3-A on the basis of quantum meruit. RREC's flip-flopping stance on P.D. No. 3-A cannot be countenanced. It cannot be allowed to use P.D. No. 3-A upon its convenience. Its attack on P.D. No. 3-A is a clear afterthought, a bargaining chip against the National Government.

THIRD ISSUE

A.The Amended Decision of the

Court of Appeals is based on

insufficient and doubtful

evidence.

In its Amended Decision, the Court of Appeals found that RREC reclaimed fifty-five (55) hectares of Manila Bay from 1959 to 1962. This was allegedly confirmed by RREC's evidence adduced at the Commissioners' hearings. 130 The contrary evidence presented by the CCP was considered insufficient.

The Court of Appeals' ruling is based on three documents issued by the government to RREC during the pendency of the case. The first is the "Cost Data for Items of Work Covered by the Republic Real Estate Corporation for Work Performed In the Manila Bay" issued by the Ministry of Public Highways (MPH). 131 The second is the letter dated June 6, 1979 of then Minister of Public Highways Baltazar Aquino

addressed to Mr. Vicente Asuncion, Jr., Executive Vice-President of RREC. 132 The third is the letter dated June 10, 1981 of then Solicitor General Estelito Mendoza also to Mr. Asuncion, Jr. 133 The Court of Appeals held:

"One of said evidences (Exh. 17-A) shows that the then Ministry of Public Highways conducted actual and physical investigation, inspection and measurement of RREC's accomplishment as far as reclaimed lands are concerned. Their report on said inspection and measurement was reduced into a document entitled "Cost Data Items of Work Covered By the Republic Real Estate Corporation For Work Performed In the Manila Bay," prepared by Supervising Civil Engineer III Ignacio Gallego and noted by staff Civil Engineer Juan Mendoza and Executive Director for Special Projects Antonio Goco, all of the Ministry of Public Highways. This document shows the technical measurement and costs, among others, of the work accomplished by RREC: "reclamation of approximately fifty- five (55) hectares:" prLL

On the basis of this actual inspection, the then Minister of Public Highways, Minister Baltazar Aquino, wrote the Executive Vice-President of RREC acknowledging RREC's accomplishment at "approximately fifty-five (55) hectares." The said letter (Exh. 15) reads in part:

xxx xxx xxx

In the letter subsequently sent by the Solicitor General to the RREC as regards the settlement of this case (Exh. 18), the Solicitor General did not dispute but instead made reference to the facts stated in the above letter of the then Minister of Public Highways certifying to RREC's having reclaimed approximately fifty-five (55) hectares of Manila Bay.

These documents and their contents were not even disputed by plaintiff-appellant as far as "the extent of the work accomplished as above certified" (see p. 3, Comment of OSG), only that, it asserts that the documents are not conclusive proofs of RREC's allegation that it was one which reclaimed the entire fifty-five hectares.

To our mind, plaintiff-appellant's assertion needs no further elaboration since thru the naked eye it can easily be seen and discerned that plaintiff-appellant, all along, believed and

admitted that the fifty-five (55) hectares were undoubtedly reclaimed by RREC in contract with Pasay City.

The then Minister of Public Works (now deceased), who was the protector of the government interest as far as public works is concerned has already certified that RREC has reclaimed approximately fifty-five (55) hectares after having weighed and examined the proper documents and has made the actual inspection. A person in his position would not have made the declaration unless he believed it to be true and correct.

Besides, actual, physical inspection reduced to a documentary evidence executed by high public officials of the government, who is [sic] always presumed to have regularly performed his [sic] functions (see Sec. 3[m], Rule 131 of the Rules of Court), is always accorded high probative value by courts.'' 134

In determining the size of the land reclaimed by RREC and Pasay City, and rejecting the contrary evidence of CCP and the National Government, the Court ofAppeals Commissioners concluded that:

'There was no competent evidence presented by CCP and RP from which the actual area reclaimed by RREC can be conclusively established. While the thrust of CCP's evidence is to challenge the correctness of the assumption in Exh. "15" that the area reclaimed by RREC from 1959 to 1962 was approximately 55 hectares, the evidence presented was not based on personal knowledge of the witnesses as to the actual condition and/or depth of the seabed at the time of the reclamation. Moreover, even the actual or required elevation of the reclaimed area at that time was not satisfactorily established.

The testimonies of RREC's witnesses tend to confirm the correctness of the assumption in Exhibit 15 that RREC has reclaimed approximately fifty-five (55) hectares as of 1962." 135

These findings and conclusions of the Court of Appeals are grossly erroneous and cannot be affirmed. The "Cost Data Items of Work Covered by the Republic Real Estate Corporation For Work Performed in Manila Bay" is a tabulation of the findings of the MPH on the extent of RREC's reclamation work in Manila Bay. Item No. 2 of the table states "[r]eclamation of approximately 55 has." Contrary to the finding of the Court of Appeals, this entry does not amount to a certification by

the MPH. It merely describes the item of work where dredge fill was allegedly measured. The "Cost Data Items of Work . . ." was summarized in the letter of then Minister Baltazar Aquino. The full text of Minister Aquino's letter reads as follows:

"Sir:

This has reference to your claim based on "quantum meruit" pursuant to Presidential Decree No. 3-A for the reclamation work undertaken on the Manila Bay during the period from 1959 to 1962.

Considering that your claim is still the subject of Civil Case No. 2229-R, CFI of Rizal, Branch VIII, Pasay City, now pending appeal with the Court of Appeals(CA-G.R. 51349-R), we are confining our action hereon only on the determination of the physical measurement of your work accomplished in the reclamation project.

Based on the documents you have submitted, we have tentatively made, pending submittal of corroborative documents, such as the latest partial payment vouchers (and its supporting papers) and release of retention vouchers, the findings on your accomplishments shown below in comparison with your claimed accomplishments:

ITEMS OF WORKQUANTITY

RREC CLAIMMPH FINDINGS

1.Improvement of existing

submerged breakwater,

353.00 m. long (Sta 0+000

Sta. 0+353); construction of a

seawall/breakwater, 47 M.

long (Sta. 0+353-Sta. +440)

and construction of submerged

seawall/breakwater, 819 M.

long (Sta. 0+400-Sta. 1+219

involving the following

material:

a)Class I Rocks28,869.47 M.T.25,675.84 M.T.

b)Class II Rocks20,623.45 M.T.19,021.98 M.T.

c)Class III Rocks32,321.15 M.T.26,704.25 M.T.

d)Bedding Rocks31,866.62 M.T.21,514.90 M.T.

(Protective

coverings)

e)Class "B"488.36 Cu.M.467.40 Cu.M.

concrete

filler

f)Sand Mattress84,792.65 Cu.M.61,188.11 Cu.M.

(Sand Fill)

2)Reclamation of approximately

55 Has. involving:

a)Dredge Fill1,134,837.00 Cu.M.1,173,993.00 Cu.M.

for Area A

(Trade & Convention

Site Area)

b)Dredge Fill for423,558.00 Cu.M.400,958.00 Cu.M.

Area B (Cultural

Center Complex

Area)

3)Construction of a

drainage Interceptor,

262.49 M. long

including manholes and

tappings to existing

pipes, involving:

a)Class "A" Concrete502.77 Cu.M.488.87 Cu.M.

b)Reinforcing Steel28,280.05 Cu.M.27,329.44 Cu.M.

c)Foundation Fill325.51 Cu.M.525.04 Cu.M.

d)Excavation for

Structures2,707.02 Cu.M.1,806.24 Cu.M.

e)Manholes and R.C.4 units4 units

Pipes

In this connection, please submit all the statements of work accomplished by your Contractors including the quantities of pay items and accompanying vouchers.

 

Your claim for pre-operating (planning and detailed engineering) expenses and the mobilization of L.S. Dillingham Dredger, as well as clearing and grubbing of quarry site, preparation of two quarry benches, and construction and repair of marginal wharf may well be taken up when the cost issue is discussed after your case in court shall have been finally resolved in your favor.

Very truly yours,

(SGD.)

BALTAZAR AQUINO

Minister." 136

The letter above-quoted was rendered by Baltazar Aquino in his capacity as the head of the Ministry of Public Highways (MPH), the department tasked with the public works program of government. His alleged "certification" that RREC was able to reclaim 55 hectares of Manila Bay was merely "tentative, pending the submittal of corroborative documents." This is expressly stated in the letter itself. A tentative finding is provisional; it is not final. Its finality was conditioned on RREC's submission of documents to corroborate the MPH's tentative findings. And there is no showing RREC submitted such documents so as to elevate the tentative status of the MPH findings to a full-fledged certification.

The "Items of Work" tabulating RREC's claim and the Ministry of Public Highways' findings do not state that the Ministry found RREC to have reclaimed 55 hectares. No. 2 of the "Items of Work" is merely a description of the area where dredge fill was found and measured. In fact, the quantity of dredge fill found by the MPHsubstantially differed from the quantity claimed by RREC.

Compromise negotiations continued. On June 10, 1981, then Solicitor General Estelito Mendoza wrote Mr. Vicente Asuncion, Jr. This letter reads in full:

"Sir:

This is with reference to your letter dated September 7, 1979 offering a compromise of the above-noted case by asking payment, based on quantum meruit, of the amount of P30,396,878.20 for the reclamation work on a portion of the Manila Bay area.

We have considered the proposal in the light of cost data, work volume accomplished and other information given us by the Ministry of Public Highways, and have found the amount of your claim to be unjustified. If settlement should be proper, the amount of P10,926,071.29 based on price levels obtaining in 1962 when the reclamation work was stopped by the court, and not on prevailing prices, would seem to be reasonable. The cost breakdown would be:

a.Work accomplished

based on 1962

price levelsP8,344,741.29

b.Mobilization of

equipment2,581,330.00

——————

10,926,071.29

We should like to inform you, in this connection, that we referred to the Public Estates Authority for consideration your offer for settlement on the belief that it has jurisdiction over all reclaimed lands. The PEA replied (see annex) stating that the land in question is not under its administration.

Pending determination of the proper Government agency authorized to entertain and consider your proposals and without prejudice to whatever funding requirements the proposed agreement may entail, we would like to know, as a start, if Republic Real Estate Corporation is agreeable to the amount of P10,926,071.29 as compensation in the event settlement is to be pursued.

We will appreciate your early reply.

Very truly yours,

(SGD.)

ESTELITO P. MENDOZA

Solicitor General" 137

Then Solicitor General Mendoza rejected RREC's proposed compromise amount on the basis of "cost data, work volume accomplished and other information given by the Ministry of Public Highways." The Solicitor did not accept RREC's proposal on the basis of the Cost Data Report and Minister Aquino's letter only. He based it also on "other information given by the MPH." The Solicitor General's rejection of RREC's proposal affirms the tentativeness of the MPH findings.

In Item of Work No. 2 of Minister Aquino's letter, the MPH found that RREC was able to deposit 1,574,891 cubic meters of dredge fill for the

reclamation of Manila Bay. 138 RREC now claims before this Court that this amount of dredge fill covered 55 hectares and the entry "reclamation of approximately 55 has." in Minister Aquino's letter certified to such finding. The Solicitor General presented evidence before the Court of Appeals Commissioners that disproves RREC's claim. In its reply to an official query by then Solicitor General Ramon S. Desuasido, the Public Estates Authority made the following observations:

'The Public Estates Authority (PEA) as the primary agency of the national government on reclamation would like to call attention to a mis-reading or mis-appreciation, to the point of certainty, of the letter of the Ministry of Public Highways (MPH) dated 6 June 1979. This was used as exhibit in the case and served as the basis of the conclusion that RREC was able to reclaim 55 has. covering the period 1959 to 1962.

An examination of the aforecited letter-exhibit will indicate that it is simply not possible physically for RREC to have reclaimed 55 has. based on scientific technical and engineering considerations. Please note the following, viz:

(i)The hydrographic nature of the area or the physical contour and configuration of the seabed measured at sea level (technically called MLLW or mean lower low water level representing the average of the low tide observed over a 20-year period) indicates an average depth of -7 meters. To undertake a reclamation under such a condition, the requirement is not only 7 cu.m. of dredge fill but an additional 3 more (technically described as +3 meters above MLLW) or a total of 10 cu.m. to make allowance for natural land settlement over time.

With the above in mind, a 55 has. reclamation would therefore require a 5.5 Million cubic meters of dredge fill based on this computation i.e. 10 cu.m. of dredge fill x 10,000 sq.m. or 1 ha. or 100,000 cu.m. per hectare x 55 has. equals a total of 5,500,000 cu.m. The above cited letter-exhibit of the MPH validated only a total accomplishment of 1,574,891 cu.m. of dredge fill. In terms of hectares, this is equivalent to only 15.74 has. of accomplishment.

(ii)The abovecited letter-exhibit of the MPH did not really certify to a 55 ha. accomplishment. What was certified or validated was the quantity of work accomplished measured principally in terms of cubic meters of dredge fill through a tabular comparison of what is claimed by RREC vis a vis the findings of MPH. Looking at the tabular presentation and noting the big difference in physical accomplishment between the claims of RREC and the findings of MPH it is simply untenable to come to the same conclusion that 55 has. was accomplished based on differing set of physical data.

(iii)The fact is, the 55 has. was mentioned in the column "Items of Work" which was simply a description or list of work to be done and not in the column under "Quantity" where the physical measure of work accomplished was made by MPH in comparison with RREC's claims. It is clear that the 55 has. was indicated under "Items of Work" simply as a target benchmark of work to be done . . .

(iv)Finally, we wish to note that the original claim of RREC that it has reclaimed 21 has. is closer to the quantity in terms of cubic meters validated and certified by the MPH in the cited letter-exhibit of some 1,574,891 cu.m. or 15.74 has (say 16 has). To insist that this volume of cubic meters as certified by the MPH is sufficient to reclaim 55 has. is to come to the ridiculous conclusion that there was no reclamation undertaken (in the sense of recovering land submerged under water), that the Manila Bay offshore area has no depth or that the land is equivalent to the sea level, and what was done was simply to put it up to +3 meters above sea level (computation "3 cu.m. x 10,000 sq.m. or 1 ha. x 55 has. equals 1,650,000 cu.m. nearly approximating the 1,574,891 cu.m. validated by MPH. This is simply not possible. 139

This opinion was rendered on June 19, 1992 by then Acting General Manager Manuel R. Berina, Jr. of the PEA. Engineer Berina affirmed the contents of his opinion before the Court of Appeals Commissioners. As an expert witness, Engineer Berina testified that he and his staff exhausted the scenarios of reclaiming land in Manila Bay with 1,574,891 cubic meters of dredge fill. They found that in no way could such quantity of dredge fill reclaim fifty- five (55) hectares. Assuming that 1,574,891 cubic

meters indeed filled 55 hectares, this produced a slice of land 55 hectares in area but with a thickness or depth of only 2.8 meters of dredge fill.140 The reclamation of Manila Bay requires that the seabed be filled up to sea level, in addition, this filled up portion must be raised to a minimum of three (3) meters from sea level to withstand the changing tide. 141 The 55 hectares of 2.8 meters of reclaimed land means that the land was never below sea level. If so, there was nothing to reclaim from the beginning. 142

B.There is overwhelming evidence

that RREC did not reclaim

fifty-five hectares

of Manila Bay.

The general rule in this jurisdiction is that actual findings of the Court of Appeals are not reviewable but are final and conclusive on the Supreme Court. This is not a hard and fast rule, however. The Supreme Court may review such findings where the judgment of the appellate court is based on a misapprehension of facts, or the inferences made therein are manifestly mistaken, absurd or impossible. 143

The allegation that RREC failed to reclaim fifty-five (55) hectares of Manila Bay is supported by the following evidence:

(1)The aerial photographs of the Manila Bay area taken by the Armed Forces of the Philippines (AFP) in 1966 and 1968 and filed with the AFP Mapping Center.144 The AFP Mapping Center is the custodian of aerial films, negatives, photographs and documents kept by the government for the making of military maps and other purposes. 145 Captain Bailey Nograles, Chief of the AFP Mapping and Surveying Division of the Center, testified that the negatives of the photographs have been in the possession of his office since the time they were taken and have never been altered. 146 The photographs were reproduced by his staff from the office archives upon request by the CCP in 1997. They were released upon approval by the commanding officer of the Mapping Center. 147

 

The photographs form a series of aerial views of Manila Bay. 148 On the left margin of each photograph are some figures — a square, rectangle, circle and clocks and dials. Capt. Nograles identified these as indicators of the time the photograph was taken, the date and location of the area when the photograph was taken, the calibrated focal lens size of the camera used, the film roll number, the lens serial number, the camera number, the type of plane used in taking the photograph, and the altitude. 149 The first photograph indicates that it was taken on March 8, 1966. 150 The second, third, fourth and fifth photographs do not indicate the date clearly although the other entries show that they were taken by the same camera, same lens and at the same altitude at approximately five-second intervals from the other.151 The second series of photographs clearly indicate the date they were taken as "4-2-68" or April 2, 1968, and all other entries. 152

The entries in the photographs have been summarized in the flight data presented by Capt. Nograles. Flight data are usually entered into the film negatives by the company or person who developed the aerial photographs. 153 Capt. Nograles merely reproduced the data from the film negative. The flight data for the first six aerial photographs indicate that they were taken on March 8, 1966. 154 The second flight data showed that the next three photographs were taken in 1968. 155

The photographs are presumed to have been taken by the military in the regular course of duty. 156 They form part of the official records of the AFP Mapping Center which is a technical service of the AFP, the military arm of government under the Department of National Defense. 157 As official documents, the photographs are public documents and therefore need no authentication. 158 Moreover, the 1966 photographs are ancient documents. They are unblemished and were more than thirty (30) years old when produced from the custody of the AFP Mapping Center in 1997. Under the Revised Rules on Evidence, ancient documents require no authentication. 159

The series of photographs show a strip of mass jutting out from the mainland towards Manila Bay. The mass is an irregularly-shaped rectangle with its right side (eastern side) adjacent to the mainland. The length of the right side (eastern side) is twice the length of the left side (western side) with the base (south) sharply curving inwards. Within the rectangle are light and dark patches. This formation was examined by Architect Manuel T. Manosa, Jr. who measured, analyzed and verified his findings with the use of maps and computer digital analysis. Architect Manosa found that the mass extended from the

mainland to the bay for about one kilometer. 160 The light patches in the rectangle showed surface land located primarily in the center and lower right side (or southeastern side) and some patches in the southwestern and northeastern portions. The dark patches showed water. The total area of visible land measured approximately sixteen point 8 (16.8) hectares in the 1966 photographs. The 1968 photographs showed that two point eight (2.8) hectares were added to the land thereby increasing the area to nineteen point six (19.6) hectares. 161

Architect Manosa is an architect and environmental planner and has been President for twenty-one years of the Planning Resources and Operations Systems, Inc., a corporation specializing in city planning and consulting services. 162 Testifying as an expert witness, he declared that aerial photographs are taken by special cameras and, although expensive, are very accurate. These photographs are important in city planning and development because they accurately trace the sequence of changes in an urban area. 163 Architect Manosa's testimony was not discredited on cross and additional cross-examinations by RREC and Pasay City. 164

(2)The photographs of the CCP site taken in 1967 and 1968 during the construction of the CCP main building as identified and presented by Architect Ruben A.Protacio, the Managing Partner of the architectural firm of Leandro V . Locsin and Partners. 165 Leandro V. Locsin and Partners conceptualized the blueprint of the CCP main building. As a member of the firm, Architect Protacio was personally involved in the project from design to the completion of the building. 166 Architect Protacio presented and identified seven (7) photographs taken during the construction of the CCP main building. The photographs were part of progress reports submitted by the building contractor to Leandro Locsin and Partners which reports were verified by Architect Protacio and his team members by personal inspection of the site. 167These photographs were found in the archives of Leandro V. Locsin and Partners and were certified by Architect Protacio as a true and faithful reproduction of the main building construction site from 1967 to 1968.

The general rule in this jurisdiction is that photographs, when presented in evidence, must be identified by the photographer as to their production and testified as to the circumstances under which they were produced. The photographer, however, is not the only witness who can identify the pictures. The faithful representation of the photograph may be proved prima facie by the testimony of those who

were present at the time it was taken, or by any other competent witness who can testify as to its exactness and accuracy. 168 Once proved, the court may admit it subject to impeachment as to its accuracy. 169 The exactness and accuracy of the photographs were certified by Architect Protacio and these have not been impeached.

The value of a photograph lies in its being a correct representation or reproduction of the original, and its admissibility is determined by its accuracy in portraying the scene at the time the picture was taken. 170 The photographs show that the CCP main building was the very first improvement constructed on the reclaimed area. The area where the CCP main building itself was being constructed was clearly above-water. Behind the construction was land but further beyond where the Folk Arts Theater (FAT) now stands had some parts in water. 171 The CCP main building was constructed facing east, towards Roxas Boulevard on the mainland. To the immediate left of the main building 172 was land but further to its left rear where the Philippine International Convention Center (PICC), the Philippine Plaza Hotel, the Film Center and all structures now existing are located, were the waters of the bay. 173 It was all sea.

Architect Protacio himself testified that when his firm, Leandro V. Locsin and Partners, constructed the FAT in 1974, and the PICC and the Philippine Plaza in 1975, reclamation of the land was done simultaneously with the construction of the buildings. 174

(3)The eyewitness testimony of Architect Antonio S. Dimalanta whose firm, Trans-Asia Phil., of which he was President from 1965 to 1983, was the engineering consultant and project manager for the construction of the CCP main building, the FAT, the PICC and Philippine Plaza Hotel. Architect Dimalanta visited the proposed site for the CCP in 1965. He saw that the CCP site topography was irregular and that there was no road or any improvement on the land except for a seawall running parallel to Roxas Boulevard starting from the breakwater of the Manila Yacht Club and the Philippine Navy extending southwards to the area where the Coconut Palace or Tanghalang Pilipino now stands. He saw that within the seawall was a large patch of visible land but that its elevation was lower than Roxas Boulevard. To prepare the site for CCP, his firm surveyed the area and coordinated with the Department of Public Works (DPW) who filled in the land to bring it to the level of Roxas Boulevard. 175 During the construction of the CCP main building, his firm surveyed the land periodically as the DPW continuously reclaimed. 176 The DPW also filled in the patches of

water behind the CCP main building such that by 1968, the condition of the land improved. 177 Architect Dimalanta supported his testimony with a photograph of the reclamation site taken by the company photographer in 1968 which was part of the progress reports his office submitted to the firm of Leandro V. Locsin and Partners. 178 The photograph shows continuous land, sandy, behind the CCP main building all the way to the seawall. 179 To the left rear of the CCP main building, however, were the waters of the bay and along its shores were shanties. 180

According to Architect Dimalanta, reclamation by the DPW never ceased and was never interrupted. 181 The FAT was constructed in 1974. Reclamation continued and the land steadily increased in size. Reclamation extended to the left rear of the CCP main building where PICC and Philippine Plaza Hotel were eventually constructed. And even during the construction of these two buildings, reclamation never ceased.

(4)The eyewitness accounts of Dr. Lucrecia Kasilag and Mrs. Rose Duavit Cruz. Dr. Lucrecia Kasilag was the Artistic Director of the CCP in 1966 and its President from 1976 to 1986. She attended the formal ground-breaking ceremony of the CCP main building on April 17, 1966 at the reclamation site. The only visible land was the area where the building was to be constructed and the neighboring Philippine Navy Compound. 182 Much of the surrounding area of the site was under water. 183

Mrs. Rose Duavit Cruz was with the Office of the President in 1966 and was assigned to the CCP project as Project Coordinator and Comptroller. She became Administrative Director of the CCP from 1970 to 1976. She testified that in 1966, the immediate area where the CCP main building was being constructed was the only land available in Manila Bay. The area behind was under water during high tide and had to be filled in. 184 In 1970, when the main Central Bank building was being constructed across Roxas Boulevard, she allowed Central Bank, per their request, to dump debris and rocks on the land behind the CCP main building. She "welcomed all the filling materials in Manila to be dumped there." 185 Central Bank dumped its debris on the lot where the Design Center Building now stands. Beyond the Design Center Building was the FAT which was constructed from 1973 to 1974. The lot of the FAT was then below sea level such that CCP had to finance the cost of filling it up. It was the Department of Public Works and the Philippine Navy that filled up the land and continued the

reclamation. 186 Eventually, the land was filled by materials delivered by trucks twenty-four (24) hours a day. 187 Reclamation extended to the area to the left rear of the CCP main building which was still underwater. 188 In the early 1970's, the Construction Development Corporation of the Philippines (CDCP) took over and continued the reclamation southwards to Buendia. 189

 

(5)The testimony of RREC's and Pasay City's witness, Mr. Lauro Marquez and the "General Development Plan'' 190 and "Contract to Sell'' 191 he identified. Mr. Marquez is a member of the Board of Directors of RREC since 1993 until the present. When RREC was organized in 1958, he was a stockholder of the corporation and one of its two (2) exclusive brokers for the sale of portions of the reclaimed land.

Mr. Marquez testified that in 1961, RREC, through him and the other broker, sold to various third persons 165 subdivided lots in the reclaimed land totalling 250,600 square meters in area, or approximately 25 hectares. Each sale was evidenced by a Contract to Sell 192 executed by RREC and the buyer. The Contract to Sell incorporated and made reference to the Reclamation Agreement between RREC and Pasay City, specifically the provision where RREC must reclaim at least fifty (50) hectares before it can be allowed to subdivides develop and sell portions thereon. According to Mr. Marquez, since RREC was able to sell lots, then the presumption is that RREC had already reclaimed and developed at least fifty (50) hectares of Manila Bay. 193

This presumption has been rebutted by Mr. Marquez's testimony itself. The lots sold by RREC were subdivided in accordance with a General Development Plan approved by the City Engineer and City Mayor of Pasay in November 1960. 194 The General Development Plan was attached to the Contract to Sell. The Fourth Whereas Clause of the Contract to Sell states that the "City Mayor and City Engineer of Pasay have approved the attached General Development Plan for the firstfifty-five (55) hectares of the Pasay reclamation project." Mr. Marquez admitted on the witness stand that the General Development Plan attached the Contract to Sell covered Phase I of the project and that this covered an aggregate area of 347,752 square meters or thirty four point seven (34.7) hectares only. 195 In other words, the General Development Plan did not cover fifty-five (55) hectares but merely

thirty-four hectares of reclaimed land. Mr. Marquez said that RREC had anotherGeneral Development Plan for other portions of the reclaimed property. When requested to produce this Plan, Mr. Marquez declared that he could not produce it before the Commissioners. 196 The records of the then CFI and the Court of Appeals do not reveal whether such other Plan has ever been submitted.

The words of the Contract to Sell provides that RREC promised to sell the lots after they shall have been reclaimed. The pertinent portions of the Contract read as follows:

"WHEREAS, the PARTY OF THE SECOND PART 197 will require and use additional funds to proceed with the reclamation project on the terms and conditions of the above-mentioned agreements, and the PARTY OF THE FIRST PART, 198 being fully aware thereof and in view therefor, is hereby offering to advance and remit to the PARTY OF THE SECOND PART the amount hereinunder stated, provided, that the PARTY OF THE SECOND PART promises to sell to the PARTY OF THE FIRST PART the lot indicated in the attached General Development Plan after said lot is reclaimed and the City of Pasay transfers and delivers possession of and title to said lot in favor of the PARTY OF THE SECOND PART hereof in accordance with the above-mentioned agreement attached as Annex "A" hereof, at the price which the PARTY OF THE FIRST PART considers cheap, and on the terms and conditions, hereunder fixed;

WHEREAS, in view therefore, and in accordance with the above-quoted provisions of the Agreement attached as Annex "A" hereof, the PARTY OF THE SECOND PART is going to exercise at the proper time its irrevocable option to purchase from Pasay City the reclaimed land indicated in the attached General Development Plan;

NOW, THEREFORE, premises considered, the PARTY OF THE FIRST PART hereby offers and agrees to buy, and the PARTY OF THE SECOND PART hereby accepts said offer, and hereby agrees to sell to the PARTY OF THE FIRST PART, the lot to be reclaimed by the PARTY OF THE SECOND PART as attorney-in-fact of Pasay City, and to be sold, transferred and delivered by said City in favor of the PARTY OF THE SECOND PART, in accordance with the abovementioned agreements, indicated

and identified in the attached General Development Plan, Annex "B" hereof, as follows:

Lot No. _______, Block No. ________ with an approximate area of _______ (_________) square meters, under the following terms and conditions:

1. . . . 199

As the area covered by the attached General Development Plan after reclamation, shall still be surveyed and subdivided and the technical description of each lot therein, subject to review and approval by the proper governmental authority, the area of the lot covered by this Contract to Sell is subject to change; if said area is bigger than the area stated above upon actual survey and subdivision of the lots of the attached General Development Plan and per its approved technical description, the PARTY OF THE FIRST PART shall pay the corresponding proportionate increase of the total purchase price on the basis of the above terms and conditions; conversely, if the area is smaller than the area as stated above, the PARTY OF THE SECOND PART shall make the corresponding refund to the PARTY OF THE FIRST PART also taking into account the above terms and conditions and the amount of each of the above installments shall also be reduced accordingly;

2.. . .

3.The PARTY OF THE FIRST PART may take possession of the above-mentioned lot and make improvements thereon, not contrary to law, ordinance, governmental zoning rules and regulations, as well as rules and regulations, easements, and restrictions contained in the Deed of Restrictions hereto attached and marked as Annex "C" hereof, adopted by the PARTY OF THE SECOND PART for some areas covered by the attached General Development Plan, after said lot is reclaimed and possession and title thereto are delivered and transferred by Pasay City to the PARTY OF THE SECOND PART .

xxx xxx xxx

6.Upon full payment of the above-mentioned total purchase price together with the interests thereon, the PARTY OF THE SECOND PART shall execute the corresponding deed of absolute sale in favor of the PARTY OF THE FIRST PART of the abovementioned lot, when reclaimed and after the City of

Pasay delivers and transfers possession and title to said lot to the PARTY OF THE SECOND PART, free and clear of all liens and encumbrances, except such rules and regulations, and such easements, restrictions and zoning regulations referred to in paragraph 3 hereof; and all expenses for any documentary stamps and registration fees for the registration of said instrument is for any reason invalidated by the court, nor for any fortuitous events." 200

RREC promised to sell the lot indicated in the General Development Plan "after said lot is reclaimed and the City of Pasay transfers and delivers possession of and title to said lot" in favor of RREC. RREC expressly acknowledged that it was going to exercise its irrevocable option to purchase the reclaimed land indicated in the General Development Plan at the proper time;" and that as the area covered in the Plan after reclamation "shall still be surveyed and subdivided . . . subject to the review and approval by the government, the area may be subject to change."

The contract speaks for itself. At the time RREC sold lots on the reclaimed land, the lands had not yet been reclaimed and RREC could not have, in any way, exercised its irrevocable option to purchase the land. The money paid by the buyers was used by RREC to finance the reclamation project. The lots did not yet exist and the Contract to Sell fully apprised the buyers of this fact. Mr. Marquez himself admitted that some buyers did not inspect the reclamation site but merely looked at the General Development Plan before they decided to buy. 201

There is no evidence that the provisions of the Contract to Sell had been amended and that RREC had been able to exercise this irrevocable option. Lacking such evidence, the Contract to Sell stands as the only instrument that governed the sale of the lots. And this Contract unmistakably shows that RREC engaged in preselling the lots. RREC, of and by itself, directly sold to third persons lots it did not own and did not yet exist, and used the proceeds from this sale to produce the land it promised to sell.

RREC's claim that it had reclaimed and developed fifty-five (55) hectares of Manila Bay before it was taken over by the National Government is belied by the evidence — overwhelmingly and unmistakably so. What the evidence shows is that RREC, as attorney-in-fact of Pasay City, started reclaiming land in Manila Bay in 1959

pursuant to the Reclamation Agreement and Pasay City Ordinances Nos. 161 and 158. As the reclamation proceeded, RREC, citing its irrevocable option to purchase under the Reclamation Agreement, directly sold portions of the land being reclaimed to third persons and used the funds derived from the sale to finance the reclamation project. The inexistent lots were subdivided and sold by RREC on the basis of the General Development Plan, a proposed subdivision plan of the reclaimed area approved and certified by the City Mayor and City Engineer of Pasay. Reclamation work begun by RREC ceased after the CFI issued a writ of preliminary injunction on April 26, 1962. The land RREC reclaimed and left unfinished was rectangular in shape, with a large patch of land in the center and patches of land and water surrounding it. The visible land on the eastern portion of the rectangle covered the lots where the CCP main building now stands. There were patches of water further behind the main building where now stand the Design Center Building, the FAT, the FAT Parking Lot, Tahanang Pilipino, the Administration Building, and the Flagpole site. The southeast portion of the rectangle was a small mass of land which is now part of the land leased by Boom na Boom. Behind it, where the Philcite, the PICC and the Philippine Plaza were erected and the bulk of the Boom na Boom are located, were the waters of Manila Bay. In 1965, the National Government, through the then Department of Public Works, entered into the area and continued the reclamation work of RREC by filling in the patches of water within the rectangle. It was within this area that the CCP main building was constructed from 1965 to 1967. On September 10, 1966, President Marcos issued Proclamation No. 100 reserving the parcel of land where the CCP main building was being constructed as site for a Philippine Cultural Center. The land reserved was surveyed as Swo-40880 and covered a total of 245,690 square meters or 24.5 hectares. On December 15, 1967, after the completion of the CCP main building, President Marcos issued Proclamation No. 315 revoking Proclamation No. 100 and reserving a larger parcel of land as site for a Philippine Cultural Center. The land reserved was 257,898 square meters, or approximately 25.79 hectares under Swo-40880. It was the same land originally reserved under Proclamation No. 100 but with almost two hectares added on the western side adjacent to the seawall. 202 The land granted by Proclamations Nos. 100 and 316 is composed of the lots of the CCP main building, the CCP open parking lot, the Design Center Building, the FAT, the FAT parking lot, and all other lots within the rectangular mass left by RREC. 203In other words, Swo-40880 encompassed the entire rectangular mass reclaimed by RREC. On October 5, 1972, the

CCP was created by P.D. No. 15 which conveyed to it the 25.79 hectares reserved in Proclamation No. 315. In 1973, the reclamation by the Department of Public Works was taken over by CDCP which continued and extended reclamation south of the rectangle where the waters of the bay were. On August 22, 1975, P.D. No. 774 conveyed to CCP two more parcels totalling 504,717 square meters or approximately 50 hectares under Swo-04-000078 and Swo-04-00141. These parcels covered the land outside of the rectangular mass reclaimed by RREC and these are the lots where the PICC, Philippine Plaza, Philcite, Fiesta Island Pavilion, the parking lots and Boom na Boom now stand. 204

 

The Solicitor General, through the PEA, claims that RREC was able to reclaim fifteen point seventy-four (15.74) hectares of land from Manila Bay. 205 The CCP claims that based on the 1966 aerial photographs examined by Architect Protacio the rectangular land mass reclaimed by RREC measured approximately sixteen point eight (16.8) hectares. 206 RREC and Pasay City did not present further evidence before the Court of Appeals Commissioners to prove the size of the area they actually reclaimed. They relied solely on the contents of Minister Aquino's letter and the "Cost Data Items of Work" allegedly certifying that they reclaimed fifty-five (55) hectares of Manila Bay. What is clear, nevertheless, is that RREC, on behalf of Pasay City, was able to reclaim, albeit unfinished, that mass of land in Manila Bay on which the CCP main building was constructed.

Given all the facts, Pasay City and RREC cannot be left uncompensated. The National Government should not be unjustly enriched 207 at the expense of Pasay City and RREC. Pasay City and RREC deserve to be compensated quantum meruit and on equitable consideration for their work. It is not practical at this stage to award Pasay City and RREC any land by way of compensation. The controversy as to the location of the lots to be awarded will certainly result in another cycle of cases as all these lots are now part of the Cultural Center Complex. The compensation should therefore be in cash plus legal interest of six per cent (6%) per annum from 1962 until full payment.

I agree with the majority of the Court that RREC and Pasay City should be paid the amount of P10,976.071.29 plus legal interest of six per cent (6%) per annum from 1962 until full payment. During the

pendency of the case before the Court of Appeals, RREC proposed an amicable settlement with the National Government upon payment of a certain sum of money. The Solicitor General counterproposed the amount of P10,926,071.29 as a fair valuation of RREC's and Pasay City's reclamation project based on 1962 price levels. In a letter dated June 15, 1981, RREC and Pasay City accepted the amount of P10,926,071.29 but with the addition of six per cent (6%) interest per annum from 1962 until full payment of the obligation.

The rule in civil cases is that an offer of compromise is not an admission of any liability, and is not admissible in evidence against the offeror. 208 Where, however, the amount named in the offer to accept a certain sum in settlement appears to have been arrived at as a fair estimate of value, it is relevant. Hence, the rule of exclusion of compromise negotiations does not apply when there is no denial, expressed or implied, of liability and the only question discussed relates to the amount to be paid. 209 In the instant case, the compromise negotiations show that the only question addressed by the parties was the amount of compensation to be paid by the National Government to RREC and Pasay City. The aforementioned offer of RREC can therefore be used as a basis for compensation. The offer is used to compensate RREC and not to impose any liability.

CONCLUSION

By affirming the Decision and Amended Decision of the Court of Appeals, the people will lose billions of pesos, the conservative approximate of which runs from 20 to 30 billion. But more than its peso and centavo significance, the Decision and Amended Decision, unless reversed, will deal arts and culture a debilitating blow. Arts and culture are not empty words in the Filipino psyche. Our great national hero, Dr. Jose Rizal, strove zealously to awaken in his countrymen a meaningful awareness of their indigenous culture and to develop in them a suitable appreciation. 210 To this end, Rizal did everything he could to preserve and promote the cultural advancement of his countrymen. He wrote poetry in the Tagalog dialect, now the Filipino language. He annotated Morga's "Sucesos de las Islas Filipinas" for the purpose of making "our past known so as to better judge the present and assess our movement in three centuries.'' 211 Rizal saw our rich cultural heritage and believed in the potentialities of his countrymen in the field of arts and letters. He took pride in the awards reaped by the paintings of Juan Luna and Felix Resurreccion Hidalgo. He also proudly acknowledged the fiery and

convincing editorials of Marcelo H. del Pilar which earned for him the respect of his own antagonists.

Rizal, however, was not a blind, bigoted and intolerant nationalist. He stood not only for the preservation and development of Philippine culture, cleansed of its imperfections. He also favored the freest possible assimilation of the best there is in the culture of other lands. 212

The CCP has helped us realize the vision of our national hero. The CCP Complex is the only area in the Philippines that is fully devoted to the growth and propagation of arts and culture. It is the only venue in the country where artists, Filipino and foreign alike, may express their art in its various forms, be it in music, dance, theater, or in the visual arts such as painting, sculpture and installation art or in literature such as prose, poetry and the indigenous oral and written literary forms. The theaters and facilities of the Complex have been utilized for the staging of cultural presentations and for the conduct of lectures and demonstrations by renowned visiting artists. The wide open spaces of the Complex are the only open spaces in Metropolitan Manila that have been used to accommodate huge crowds in cultural, artistic and even religious events.

But the fulfillment of CCP's mandate did not start and end in Manila Bay. The CCP, through its Board of Trustees, has reached out to the provinces through programs, scholarships and national competitions for young artists. It has helped young artists hone their craft and develop their creativity and ingenuity. It has also exposed the Filipino artists to foreign art and advanced instruction, and thereby develop world-class artists, earning for the Philippines the respect and admiration of other countries. The CCP has likewise exposed the ordinary Filipino to the national culture. It has enhanced public interest in Philippine art in various forms, in our history, in our indigenous and modern culture, and at the same time, enriched us with the culture of other countries. The CCP has indeed emerged as a dynamic force in the promotion of the country's artistic and cultural heritage and the development of new and modern art forms. Through the years, it has helped raise the Filipino consciousness to our nationhood, and in the process, inculcated love for our country. LibLex

Article XV of the 1987 Constitution provides:

"Sec. 14.The State shall foster the preservation, enrichment, and dynamic evolution of a Filipino national culture based on the principle of unity in diversity in a climate of free artistic and intellectual expression.

Sec. 15.Arts and letters shall enjoy the patronage of the State. The State shall conserve, promote, and popularize the nation's historical and cultural heritage and resources, as well as artistic creations.

xxx xxx xxx."

The state recognizes the vital role arts and culture play in national development. Indeed, a nation that would give up its cultural patrimony in exchange for economic and material pursuits cannot but be doomed as a "people without a soul." 213 The Cultural Center of the Philippines has helped us capture this "soul."

I vote to annul the Decision dated January 28, 1992 and the Amended Decision dated April 28, 1992 of the Court of Appeals in CA G.R. CV No. 51349. The Reclamation Agreement between Pasay City and RREC as well as Pasay City Ordinance Nos. 121 and 158 are contrary to the provisions of R.A. No. 1899 and should also be voided.

I also vote to award Pasay City and Republic Real Estate Corporation the sum of P10,926,071.29 plus interest thereon of 6% per annum from May 1, 1962 until full payment. The amount shall be paid by the National Government and shall be shared equally by Pasay City and RREC.

I also vote to dismiss the petition in G.R. No. 105276.

Mendoza, J ., concurs.

295 scra 27

FIRST DIVISION

[G.R. No. 74454. September 3, 1998.]

ALFRED PEARSON, for himself and as the attorney-in-fact of his co-heirs/co-successors-in-interest, namely: ELSIE PEARSON-FUENTES, HENRY PEARSON, WILLIAM PEARSON, JR, ROBERT PEARSON, EDUARD PEARSON, CHARLES PEARSON, FREDRIECHPEARSON and HARRY F. GASSER, petitioners, vs. INTERMEDIATE APPELLATE COURT, Hon. REGIONAL TRIAL COURT,

Branch 155, Pasig, Metro Manila, Hon. Presidential Executive Assistant; Hon. Minister of Natural Resources; Hon. Director of Mines; DIAMOND MINING CORPORATION, ROSARIO MINING DEVELOPMENT CORPORATION, and A. SORIANO CORPORATION, respondents.

Maximo F. Belmonte for petitioners.

Eriberto D. Ignacio for private respondents.

SYNOPSIS

Alfred Pearson, et al. as successors-in-interest of the late William F. Pearson, Sr., the biggest stockholder and sole owner of the dissolved Tambis Gold Dredging Co., Inc., the claimant of the mining claims in Brgy. Bahi, Lianga, Surigao del Sur, filed a petition for certiorari, prohibition and mandamus with preliminary injunction against the herein respondents with the Court of First Instance (CFI) of Pasig to annul the decision of the Office of the President affirming the decision of the Ministry of Natural Resources which held that "Appellant's (herein petitioners) mining claims are abandoned, if not null and void. Evidence on record clearly establishes the fact that appellants failed to conduct the necessary works on their claim, to file the affidavit of annual work obligations, and to pay the real estate taxes," and to restrain the private respondents mining companies, Rosario Mining and Diamond Mining from entering and developing the mining claims involved. The mining companies filed their joint motion to dismiss and opposition to the preliminary injunction. Instead of resolving the motion to dismiss, the CFI ordered the creation of an Ad Hoc Ocular Inspection Committee to determine the correct tie-point of private respondents' mineral claim, and subsequently scheduled the ocular inspection.

In turn, the mining companies filed with the IAC a petition for certiorari and prohibition, assailing the aforementioned orders of the CFI which granted the writ and set aside the orders of the CFI.

After the decision of the IAC became final and executory, the CFI issued an order dismissing the petition filed by the Pearsons. Hence, the petition.

The petition is entirely devoid of merit. No reversible error was committed by the IAC when it assumed jurisdiction over private respondents' petition for certiorariinvolving interlocutory orders of the trial court.

The trial court clearly acted outside of its jurisdiction when it issued the assailed ordered creating the Ad Hoc Committee and scheduling the ocular inspection. HEITAD

The lower court did not have jurisdiction over the mining dispute. With the issuance of Presidential Decree Nos. 99-A, 309, and 463, the procedure of adjudicating conflicting mining claims has been made completely administrative in character, with the President as the final appeal authority. cACEHI

The public officials' judgment are well supported by substantial evidence. Moreover, by the Pearsons' own admission, they failed to file the affidavit of annual assessment works and to pay the real estate taxes from 1957-1974, which were filed and paid only later in 1974.

SYLLABUS

1.REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; PRINCIPLE OF HIERARCHY OF COURTS MUST BE OBSERVED. — It has also been emphasized in a number of cases that while this Court has concurrent jurisdiction with the Court of Appeals and the Regional Trial Courts (for writs enforceable within their respective regions), to issue writs of mandamus, prohibition or certiorari, the litigants are well advised against taking a direct recourse to this Court. Instead, they should initially seek the proper relief from the lower courts. As a court of last resort, this Court should not be burdened with the task of dealing with causes in the first instance. Where the issuance of an extraordinary writ is concurrently within the competence of the CA and RTC, litigants must observe the principle of hierarchy of courts. This Court's original jurisdiction to issue extraordinary writs should be exercised only where absolutely necessary, or where serious and important reasons therefor exist. CAETcH

2.ID.; ID.; ID.; ALLOWED AS A MODE OF REDRESS TO PREVENT IRREPARABLE DAMAGES AND INJURY TO A PARTY. — As a general rule, an interlocutory order is not appealable until after the rendition of the judgment on the merits, an exception is made where the remedy of

appeal cannot afford an adequate and expeditious relief. In such exception, certiorari can be allowed as a mode of redress to prevent irreparable damage and injury to a party. We further held that where the order complained of is a patent nullity, a petition for certiorari and mandamus may properly be entertained despite the existence of the remedy of appeal.

3.CIVIL LAW; NATURAL RESOURCES; MINING CLAIMS; PRESIDENT IS THE FINAL APPEAL AUTHORITY. — With the issuance of Presidential Decree Nos. 99-A, 309, and 463, the procedure of adjudicating conflicting mining claims has been made completely administrative in character, with the President as the final appeal authority.

4.ID.; ID.; ID.; DECISIONS OF MINES ADJUDICATION BOARD CAN BE RAISED TO THE APPROPRIATE COURT THROUGH PETITION FOR REVIEW ONCERTIORARI. — Findings of fact by the Mines Adjudication Board, which exercises appellate jurisdiction over decisions or orders of the panel of arbitrators, shall be conclusive and binding on the parties, and its decision or order shall be final and executory. But resort to the appropriate court, through a petition by certiorari, involving questions of law, may be made within thirty days from the receipt of the order or decision of the Mines Adjudication Board. EDACSa

5.ID.; ID.; ID.; FINDINGS OF FACT BY THE MINISTER OF NATURAL RESOURCES IS NOT APPEALABLE TO THIS COURT UNLESS THERE IS A GRAVE ABUSE OF DISCRETION IN MAKING SUCH FINDINGS. — Well established is the rule that findings of fact made in the decision of the Minister of Natural Resources (then Secretary of Agriculture and Natural Resources) appealed from will not be reviewed by this Court unless there has been a grave abuse of discretion in making said findings by reason of the total absence of competent evidence in support thereof.

6.ID.; ID.; ID.; RIGHT OF A LOCATOR OF A MINING CLAIM IS NOT ABSOLUTE. — While it is recognized that the right of a locator of a mining claim is a property right, such right is not absolute. It is merely a possessory right, more so where petitioner's claims are still unpatented. Mere location does not mean absolute ownership over the affected land or located claim. It merely segregates the located land or area from the public domain by barring other would-be locators from locating the same and appropriating for themselves the minerals found therein. To rule otherwise would imply the location is all that is needed to acquire and maintain rights over a located mining claim. This cannot

be approved or sanctioned because it is contrary to the intention of the lawmaker that the locator should faithfully and consistently comply with the requirement for annual works and improvements in the located mining claims. Not only should there be a valid and subsisting location of the mineral land but also there should be, thereafter, continuous compliance with all the requirements of law such as the performance of annual assessment works and payment of real estate taxes. CIETDc

D E C I S I O N

QUISUMBING, J p:

This Petition for Certiorari, Prohibition and Mandamus with Preliminary Injunction and Prayer for a Restraining Order seeks to annul the following: prcd

1.Decision dated September 30, 1983 of respondent Intermediate Appellate Court (now Court of Appeals) in AC-G.R. No. 15439 which in effect upheld herein private respondents' mining claims and directed respondent Regional Trial Court to resolve the motion to dismiss in Civil Case No 45053. 1

2.Order dated July 31, 1984 of the Court of First Instance, Branch X (now Regional Trial Court, Branch 155), Pasig, Metro Manila, dismissing Civil Case No. 45053 on the basis of an earlier decision of the Court of Appeals upholding the findings of fact of the Minister of Natural Resources; 2

3.Decision dated August 31, 1981 of the Office of the President, upholding the finding of the Minister that petitioners had abandoned their "BAROBO" mining claims and accordingly dismissed their appeal; 3

4.Decision dated October 29, 1979 of the Minister of Natural Resources, affirming the decision of the Director of Mines; 4

5.Consolidated Decision dated May 12, 1976 of the Director of Mines in Mines Administrative Case Nos. V-817 and V-818, upholding the preferential rights of private respondents to lease, possess, explore and develop their respective "DIAMOND" and "MARTIN" mining claims in question; 5

The petitioners also pray that their mining claims be declared valid and that private respondents' mining claims be declared null and void.

The petitioners Alfred Pearson, et al. (hereinafter "Pearsons") claim to have inherited the beneficial-interest of the Tambis Gold Dredging Co., Inc. (hereinafter "Tambis Gold") upon its dissolution, owing to the fact that the biggest stockholder of said company and the sole owner of the claims was their ancestor, William F.Pearson, Sr. 6

Private respondents Diamond Mining Corporation, Rosario Mining Development Corporation and their assignee A. Soriano Corporation (hereinafter "Mining Companies") are domestic corporations organized and existing under Philippine laws.

The public respondents are the Director of Mines, the Minister of Natural Resources, the Presidential Executive Assistant, the Court of First Instance (CFI), and the Intermediate Appellate Court (IAC). 7 Each of them had ruled in favor of the Mining Companies.

 

The facts as found by the respondent Minister of Natural Resources and confirmed by the respondents Presidential Executive Assistant and the IAC are as follows:

"From the records and the documentary evidence at hand, it appears that the Tambis Gold Dredging Co., Inc. filed in 1919, under the Act of Congress of July 1, 1902, declarations of location covering the "BAROBO-1" to "BAROBO-5" placer claims located at the barrio of Bahi, municipality of Lianga, province of Surigao del Sur. These declarations of location were destroyed or lost during the war.

In 1948, the Tambis Gold Dredging Co., Inc. filed with the Bureau of Mines affidavits to reconstitute the declarations of location for the "BAROBO" placer claims. The affidavits were recorded with the mining recorder on January 19, 1949.

On February 29, 1960, the Tambis Gold Dredging Co., Inc. was dissolved. Appellants (herein petitioners) were at that time stockholders of the corporation.

From May 10 to June 11, 1970, appellee (now respondent) Rosario Mining, through its agent Marcelino Manabat, discovered and located the "MARTIN - 1", "MARTIN - 2", "MARTIN - 5", "MARTIN - 6" and "MARTIN - 27" placer claims in the barrio of Bahi, municipality of Barobo, province of Surigao del Sur. On June 25, 1970, the declarations of location therefor, and the Special Power and (sic) Attorney appointing Marcelino Manabat as attorney-in-fact, were registered with the Mining Recorder of Surigao del Sur.

On August 31, 1970, the applications for the survey of the "MARTIN" claims were filed, and, on March 13, 1973 and December 18, 1973, the corresponding orders for survey were issued.

On June 22, 1973, appellee (now respondent) Rosario Mining filed the lease application covering the "MARTIN" placer claims. After the survey returns of said placer claims were approved on January 3, 1975, the notice of lease was published in February 20 and 27, 1975 issues of the "Mindanao Times" and in the February 25 and March 4, 1975 issues of the "Times Journal".

Meanwhile, from February 24 to March 5, 1974, appellee (now also respondent) Diamond Mining, through its agent Justiniano Deloso, discovered and located the "DIAMOND - I" to "DIAMOND - 7" placer claims in the barrio of Bahi, municipality of Barobo, province of Surigao del Sur. On March 25, 1974, the declarations of location therefor, including the Special Power of Attorney in favor of Justiniano Deloso, were registered with the Mining Recorder of Surigao del Sur.

On April 17, 1973, the application for survey of the "DIAMOND" placer claims were filed, and, on May 21, 1974, the order for survey was issued.

On April 22, 1974 appellee Diamond Mining filed the lease applications covering the "DIAMOND" placer claims. Subsequently, after the survey returns of said claims were approved on December 24, 1974 and January 3, 1975, the notice of lease application was published in the February 25 and March 4, 1975 issues of the "Times Journal" and in the February 27 and March 6, 1975 issues of the "Mindanao Times".

On 10 March 1975, appellants (petitioners herein) filed the adverse claims against appellees (now private respondents).

After the case was heard by the Panel of Investigators of the Bureau of Mines, the Director of Mines rendred (sic) the decision appealed from.

In his decision, the Director held that appellants (petitioners) failed to establish the existence of the conflict among the placer claims involved; that the "BAROBO" placer claims are null and void because their tie points, as described in the affidavits to reconstitute the declarations of location therefor, are not the natural objects or permanent monuments prescribed under the law and their geographical positions cannot be accurately determined; that, even if said "BAROBO" claims were validly located, the same have been abandoned due to the failure of the original locators thereof to perform assessment works therein, to file the corresponding affidavits of annual work obligations, and to pay the real estate taxes thereon; and that appellants (petitioners) are not the successors-in-interest of the Tambis Gold Dredging Co., Inc., hence they have no legal personality to institute the adverse claims." 8

On appeal, the Minister of Natural Resources in a Decision dated October 29, 1979, affirmed the judgment of the Director of Mines. 9 He agreed with the Director's finding on the issue of abandonment.

Not satisfied with the decision of the Minister of Natural Resources, the Pearsons appealed to the Office of the President. They filed a Manifestation requesting the Office to require the Mining Companies to file a bond in such amount as may be necessary to protect the interests of the Pearsons during the pendency of the case before it. Also, they prayed for an order for immediate ocular inspection of the area to determine the fundamental issue of the correct tie point of the controverted mining claims. 10

In an Order dated June 23, 1981, the Office of the President granted the motion concerning the bond but denied the request for ocular inspection. In the order, it was stated that "the investigation conducted by the Presidential Investigating Committee of the Bureau of Mines has already considered and determined the issue which require no more (sic) further verification and clarification." 11 The Pearsons and the Mining Companies separately moved for reconsideration. 12

Subsequently, the Office of the President granted the motion for ocular inspection, and ordered the creation of an Ad Hoc Ocular Inspection Committee on June 23, 1989. 13 The Mining Companies moved for reconsideration of this order. 14

In a Decision dated August 31, 1981, the Office of the President revoked the order allowing ocular inspection, dismissed the appeal for lack of merit, and released all monies that might have been deposited by the Mining Companies. The pertinent grounds of its dismissal are hereunder quoted: 15

". . . We agree with the findings of the Ministry of Natural Resources that Appellant's mining claims are abandoned, if not null and void. Evidence on record clearly establishes the fact that appellants failed to conduct the necessary works on their claim, to file the affidavits of annual work obligations, and to pay the real estate taxes. These ommissions (sic) by appellants constitute abandonment of their claims. Executive Order No. 141 dated August 1, 1968, explicitly states that unpatented mining claims which were located more than thirty years ago under the provisions of the Philippine Bill of 1902, as amended, and which have not complied with the annual assessment requirement are considered abandoned and their declaration of location cancelled. On this score, this Office finds no legal justification to modify, much less reverse, the appealed decision."

On January 18, 1982, the Office of the President issued a Resolution denying the Pearsons' motion for reconsideration. 16

After said denial, the Pearsons filed a petition for certiorari, prohibition and mandamus, with a writ of preliminary injunction, before Branch X of the CFI of Pasig to annul the aforementioned decisions of public respondents and to restrain private respondents from entering and developing the mining claims involved. 17 This was docketed as Civil Case No. 45053. The Mining Companies filed their joint motion to dismiss and opposition to the preliminary injunction alleging, among others, that the Decision dated August 31, 1981 of the Office of the President is already final and executory pursuant to Presidential Decree No. 463, Section 50 which states that:

"Appeals — Any party not satisfied with the decision or order of the Director, may, within five (5) days from receipt thereof, appeal to the Secretary. Decisions of the Secretary are likewise

appealable within five (5) days from receipt thereof by the affected party to the President of the Philippines whose decision shall be final and executory.

xxx xxx xxx"

Instead of expressly resolving the said motion to dismiss, the CFI ordered on October 15, 1982 the creation of an Ad Hoc Ocular Inspection Committee "to determine the correct tie-point of private respondents' mineral claim". Both the public and private respondents moved for reconsideration of said order. 18 The CFI denied both motions and issued the Order dated December 21, 1982 scheduling the ocular inspection for January 3, 1983.

In view of this last order, the Mining Companies filed with the IAC their Petition for Certiorari and Prohibition, assailing the abovementioned orders dated October 15, 1982 and December 21, 1982 allowing the creation of and setting the schedule for ocular inspection by the Ad Hoc Committee, and praying that the latter court be prohibited from further proceeding with Civil Case No. 45053. The Mining Companies argued that when P.D. Nos. 99-A, 309, and 463 were promulgated, it became unquestionable that the procedure of adjudicating mining claims was made completely administrative with the President as the final authority. 19 In their Answer, the Pearsons assailed the propriety of the petition since its subjects are two interlocutory orders. 20

The IAC issued a Restraining Order dated January 31, 1983, restraining the CFI judge from implementing his order directing the Ad Hoc Committee to conduct an ocular inspection. 21 Later on, the IAC granted the writ of certiorari, set aside the orders of the CFI with regard to the Ad Hoc Committee and ocular inspection, and directed the CFI "to resolve the joint motion to dismiss filed by the private respondents in said case in light of what has been stated in this decision." The decision of the IAC was promulgated on September 30, 1983, and the same became final and executory with an entry of judgment issued by the said IAC on February 17, 1984.

As directed by the IAC, the CFI issued an Order on July 31, 1984 dismissing the petition of the Pearsons before it.

 

Hence, the petitioners now come before this Court raising in their petition the following issues: 22

I.WHETHER OR NOT THE DECISION OF RESPONDENT INTERMEDIATE APPELLATE COURT IN CA-G.R. NO. 15439 IS NULL AND VOID FOR LACK OF JURISDICTION OVER THE SUBJECT MATTER OF THE CASE;

II.ASSUMING ARGUENDO THAT IT HAS JURISDICTION OVER THE CASE, WHETHER OR NOT RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION, AMOUNTING TO LACK OF JURISDICTION, WHEN IT GAVE DUE COURSE TO AND DECIDED SAID PETITION DESPITE THE CLEAR SHOWING BY HEREIN PETITIONER THAT THE ORDERS IN QUESTION ARE MERELY INTERLOCUTORY AND ARE, THEREFORE, NOT PROPER SUBJECT MATTER OF A PETITION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT; AND

III.ASSUMING AGAIN ARGUENDO THAT THE QUESTIONED INTERLOCUTORY ORDERS ARE PROPER SUBJECT OF CERTIORARI, WHETHER OR NOT THE DECISION DATED SEPTEMBER 30, 1983 OF RESPONDENT INTERMEDIATE APPELLATE COURT IS A PATENT NULLITY FOR BEING DEVOID OF ANY FACTUAL OR LEGAL BASIS.

Petitioners maintain that the Supreme Court has the exclusive jurisdiction over all cases where the jurisdiction of a lower court is in issue, as well as all cases decided by lower courts involving pure questions of law, 23 pursuant to paragraph 2(c), Section 5, Art X of the present Constitution which states that:

"Sec. 5.The Supreme Court shall have the following powers:

xxx xxx xxx

(2)Review and revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and decrees of inferior courts in —

xxx xxx xxx

(c)All cases in which the jurisdiction of any inferior court is in issue.

xxx xxx xxx

Likewise, they assert that the Judiciary Act of 1948 (R.A. No. 296), as amended, also clearly provides that the Supreme Court has exclusive jurisdiction over the case, pursuant to Paragraph (3), Sec. 1 7 thereof, to wit:

"Sec. 17.Jurisdiction of the Supreme Court. —

xxx xxx xxx

The Supreme Court shall further have exclusive jurisdiction to review revise, reverse, modify or affirm on certiorari as the law or rules of court may provide, final judgments and decrees of inferior courts as herein provided in —

xxx xxx xxx

(2)All cases in which the jurisdiction of any inferior court is in issue.

xxx xxx xxx

Consequently, they argue that the IAC Decision dated September 30, 1983 is a patent nullity for utter want of jurisdiction.

They further argue that the questioned orders of the CFI dated October 15, 1982 and December 21, 1982 allowing the creation of and setting the schedule for ocular inspection by the Ad Hoc Committee were merely interlocutory, and therefore, cannot be subject of a petition for certiorari in the IAC. 24

Lastly, they claim that the IAC, in its September 30, 1984 decision sustaining the Decision dated August 31, 1981 of the Office of the President dismissing the appeal of petitioners, has no factual and legal bases. They stress that they have lived in their ancestral home in the mining area up to the filing of this petition; they continued performing the assessment work on their mineral claims up to 1975 when this case arose, and they were enjoined to stop their operations by respondent Bureau of Mines; that they have performed assessment work continuously up to 1975; that they filed religiously their affidavits of assessment work; and that they paid their realty taxes due, although they admitted that certain affidavits were filed and certain taxes were also paid in later years. 25

Private respondents, in their Comment dated June 26, 1986, allege that the IAC has jurisdiction to entertain the original petition for certiorari filed by them against respondents CFI and the Pearsons under Rule 65 of the New Rules of Court. They argue that under P.D. Nos. 99-A, 309 and 463 governing the procedures of adjudicating conflicting mining claims which were made completely administrative, the decision of the President on appeal to his Office is final and executory, and therefore, not subject to judicial review. 26

The different issues raised in the instant petition may be subsumed in two principal issues: LexLib

1.Whether or not respondent IAC committed reversible error in assuming jurisdiction over the private respondents' petition for certiorari assailing the trial court's interlocutory orders?

2.Assuming the IAC had validly assumed jurisdiction, whether or not it committed reversible errors of law in its decision now before us?

We find the petition entirely devoid of merit. Thus we see, in regard to the first principal issue, no reversible error committed by the IAC when it assumed jurisdiction over private respondents' petition for certiorari involving interlocutory orders of the trial court.

The petitioners launch a two-pronged attack against the jurisdiction of the respondent appellate court, to wit: first, the IAC could not adjudicate cases where the jurisdiction of the trial court is in issue; and second, the orders of the CFI, being merely interlocutory, could not be the subject of a petition for certiorari in the IAC.

The petitioners err on both counts.

Firstly, the IAC correctly invoked the ruling of this Court in Uytiepo vs. Aggabao 27 , to wit:

"As regards the claim that the issues raised by Aggabao in her action filed with the respondent Court of Appeals involve only questions of law and are therefore exclusively reviewable by this Court, the petitioners apparently confuse the remedy of special civil action of certiorari under Rule 65 of the Rules of Court in relation to section 30 of the Judiciary Act as amended and an appeal by certiorari under Rule 42 also of the Rules of Court in relation to the fourth paragraph of section 17 of the same Act. The first is a remedy available in the Court of

Appeals, in aid of its appellate jurisdiction, essentially to correct errors of jurisdiction or abuse of discretion amounting to lack of jurisdiction. The second lies within the competence of this Court for the review of errors of inferior courts involving only questions of law. . ."

What private respondents availed of was the first remedy, placing in issue the jurisdiction of the trial court to create an Ad Hoc Committee and schedule an ocular inspection.

Considered in relation to Section 9 of B.P. Blg. 129 (The Judiciary Reorganization Act of 1980), now incorporated in Section 4, Rule 65 of the 1997 Rules of Civil Procedure, which vested the then IAC with original jurisdiction to issue writs of certiorari and prohibition, among other auxillary writs, "whether or not in aid of its appellate jurisdiction", we find that respondent appellate court correctly assumed jurisdiction over CA-G.R. No. 15439.

It has also been emphasized in a number of cases 28 that while this Court has concurrent jurisdiction with the Court of Appeals and the Regional Trial Courts (for writs enforceable within their respective regions), to issue writs of mandamus, prohibition or certiorari, the litigants are well advised against taking a direct recourse to this Court. Instead, they should initially seek the proper relief from the lower courts. As a court of last resort, this Court should not be burdened with the task of dealing with causes in the first instance. Where the issuance of an extraordinary writ is concurrently within the competence of the CA or RTC, litigants must observe the principle of hierarchy of courts. This Court's original jurisdiction to issue extraordinary writs should be exercised only where absolutely necessary, or where serious and important reasons therefor exist.

Secondly, petitioner's contention that the lower court's orders of October 15, 1982 and December 21, 1982, being merely interlocutory, are not correctible by certiorari, ignores this Court's consistent ruling, to wit:

"On the procedural issues raised, we hold that where an interlocutory order was allegedly issued with grave abuse of discretion amounting to lack or excess of jurisdiction, such order may be questioned before the Court on a petition for certiorari under Rule 65 of the Revised Rules of Court. To delay the review of the order until the appeal from the decision of the

main case would not afford the party adversely affected by the said order a speedy, plain and adequate remedy." 29

In Marcelo vs. De Guzman, 30 we held that although, as a general rule, an interlocutory order is not appealable until after the rendition of the judgment on the merits, an exception is made where the remedy of appeal cannot afford an adequate and expeditious relief. In such exception, certiorari can be allowed as a mode of redress to prevent irreparable damage and injury to a party. We further held that where the order complained of is a patent nullity, a petition for certiorari and mandamus may properly be entertained despite the existence of the remedy of appeal. 31 This we reiterated in Salcedo-Ortañez vs. Court of Appeals. 32

Does the controversy at hand fall under the exception where interlocutory orders may be the subject of a petition for certiorari in the IAC? In our view, it does. For the trial court clearly acted outside of its jurisdiction when it issued the assailed orders creating the Ad Hoc Committee and scheduling the ocular inspection.

To begin with the lower court did not have jurisdiction over the mining dispute. With the issuance of Presidential Decree Nos. 99-A, 309, and 463, 33 the procedure of adjudicating conflicting mining claims has been made completely administrative in character, with the President as the final appeal authority. 34 Section 50 of P.D. 463, providing for a modernized system of administration and disposition of mineral lands, to promote and encourage the development and exploitation thereof, mandates on the matter of "Protests, Adverse Claims and Appeals," the following procedure:

 

"Appeals — Any party not satisfied with the decision or order of the Director may, within five (5) days from receipt thereof, appeal to the secretary. Decisions of the Secretary are likewise appealable within five (5) days from receipt thereof by the affected party to the President of the Philippines whose decision shall be final and executory.

It should be noted that before its amendment, the Mining Law (C.A. No. 137) required that after the filing of adverse claim with the Bureau of Mines, the adverse claimant had to go to a court of competent jurisdiction for the settlement of the claim. With the amendment

seeking to expedite the resolution of mining conflicts, the Director of Mines became the mandatory adjudicator of adverse claims, instead of the Court of First Instance. 35 Thus, it cannot escape notice that under Section 61 of the Mining Law, as amended by Republic Act Nos. 746 and 4388, appeals from the decision of the Secretary of Agriculture and Natural Resources (then Minister of Natural Resources) on conflicts and disputes arising out of mining locations may be made to the Court of Appeals or the Supreme Court as the case may be. In contrast, under the decrees issued at the onset of martial law, it has been expressly provided that the decisions of the same Secretary in mining cases are appealable to the President of the Philippines under Section 50 of the Mineral Resources Development Decree of 1974 (P.D. No. 463) and Section 7 of P.D. No. 1281 in relation to P.D. No. 309. 36

The trend at present is to make the adjudication of mining cases a purely administrative matter. 37 This does not mean that administrative bodies have complete rein over mining disputes. The very terms of Section 73 of the Mining Law, as amended by R.A. No. 4388, in requiring that the adverse claim must "state in full detail the nature, boundaries and extent of the adverse claim" show that the conflicts to be decided by reason of such adverse claim refer primarily to questions of fact. The controversies to be submitted and resolved by the Director of Mines under the sections referred only to the overlapping of claims and administrative matters incidental thereto. 38 Questions and controversies that are judicial, not administrative, in nature can be resolved only by the regular courts in whom is vested the judicial power to resolve and adjudicate such civil disputes and controversies between litigants in accordance with the established norms of law and justice. 39Decisions of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature, such as "granting of license, permits, lease and contracts, or approving, rejecting, reinstating or cancelling applications, or deciding conflicting applications," and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by the courts of justice. 40

This distinction is carried on even under the present law. 41 Findings of fact by the Mines Adjudication Board, which exercises appellate jurisdiction over decisions or orders of the panel of arbitrators, shall be

conclusive and binding on the parties, and its decision or order shall be final and executory. 42 But resort to the appropriate court, through a petition for review by certiorari, involving questions of law, may be made within thirty days from the receipt of the order or decision of the Mines Adjudication Board. 43

With regard to the second issue, the query boils down to whether the IAC committed reversible error in concluding that petitioners had abandoned their mining claims.

As found by the IAC:

"It will not be amiss to state here that the basis of abandonment of the Pearsons of their mining claims is well established by the evidence already presented to the Bureau of Mines and to the Ministry of Natural Resources. We need only to refer to the following reasons found in the decision of the Ministry of Natural Resources, dated October 29, 1975, to wit:

'. . . assuming, in gratia argumentis, that the 'BAROBO' placer claims were validly located, said claims have been abandoned for failure of the claim owners thereof to conduct works therein, to file the affidavits of annual work obligations, and to pay the real estate taxes.

The evidence indicate that affidavits of annual assessment works have been filed for the 'BAROBO-2' to 'BAROBO-5' placer claims from 1946 to 1951. However, the affidavits for the years 1957 to 1974, respectively were all filed only on April 8, 1975. Thus, during the latter years, no proof was submitted to show compliance with the annual assessment works. So, at the time the 'DIAMOND' and 'MARTIN' placer claims were located and registered, the 'BAROBO' claims had already been deemed abandoned and the areas covered thereby open to relocation.'

"Said decision also took into account Executive Order No. 141, dated August 1, 1968, which provides:

'NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby declare unpatented mining claims which were located more than thirty years ago under the provisions of the Philippine Bill of 1902, as amended, and

which had not complied with the annual assessment requirement, as abandoned and their declaration of location cancelled.'" 44

Well established is the rule that findings of fact made in the decision of the Minister of Natural Resources (then Secretary of Agriculture and Natural Resources) appealed from will not be reviewed by this Court unless there has been a grave abuse of discretion in making said findings by reason of the total absence of competent evidence in support thereof. 45 As shown above, the public officials' judgments are well supported by substantial evidence. Moreover, by the Pearsons' own admission, they failed to file the affidavit of annual assessment works and to pay the real estate taxes from 1957-1974, which were filed and paid only later in 1974. 46

In Santa Rosa Mining Co. vs. Hon. Minister of Natural Resources Jose Leido, Jr. and Director of Mines Juanito Fernandez 47 , this Court held that while it is recognized that the right of a locator of a mining claim is a property right, such right is not absolute. It is merely a possessory right, more so where petitioner's claims are still unpatented. Mere location does not mean absolute ownership over the affected land or located claim. It merely segregates the located land or area from the public domain by barring other would-be locators from locating the same and appropriating for themselves the minerals found therein. To rule otherwise would imply the location is all that is needed to acquire and maintain rights over a located mining claim. This cannot be approved or sanctioned because it is contrary to the intention of the lawmaker that the locator should faithfully and consistently comply with the requirement for annual works and improvements in the located mining claims. 48Not only should there be a valid and subsisting location of the mineral land but also there should be, thereafter, continuous compliance with all the requirements of law such as the performance of annual assessment works and payment of real estate taxes. 49

While it is understandable that petitioners would want this Court to reassess the evidence presented before the mining officials to support their plea of not having abandoned the mining claim involved, this cannot be done now in this proceeding, for this Court is not a trier of facts. Moreover, we find no cogent, much less compelling, reason to depart from established practice and precedents. For where, as in the case at bar, there is no showing that there was fraud, collusion, arbitrariness, illegality, imposition or mistake on the part of the Office

of the President or a department head in rendering a questioned decision; nor a total lack of substantial evidence to support their administrative decisions, their factual findings and conclusions are entitled to great weight and respect, and will not be interfered with. 50

WHEREFORE, the instant petition is hereby DENIED, and the assailed Orders and Decisions, particularly the Decision of the Intermediate Appellate Court in AC-G.R. No. 15439, including the Order of dismissal of Civil Case No. 45053, are hereby AFFIRMED.

No pronouncement as to costs. llcd

SO ORDERED.

Bellosillo, Vitug and Panganiban, JJ ., concur.

Davide, Jr., principally for the reason that the instant petition was filed out of time and, definitely as a substitute for the lost remedy of appeal.

290 scra 117

FIRST DIVISION

[G.R. No. 115507. May 19, 1998.]

ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO, petitioners, vs. THE PEOPLE OF THE

PHILIPPINES and THE COURT OF APPEALS, respondents.

Rolando P. Quimbo for petitioners.

SYNOPSIS

Petitioners were caught in possession of lumber without the legal documents as required under existing forest laws and regulations. Consequently, the petitioners were charged with violation of Section 68, Presidential Decree No. 705 (Forestry Reform Code), as amended by Executive Order No 277. After trial, the Regional Trial Court of Romblon found petitioners guilty as charged. On appeal, the Court of Appeals affirmed the judgment of the trial court. Hence, this petition. Petitioners contended that only the cutting, gathering, collecting and/or possession, without license, of timber and other forest products are prohibited under the Forestry Reform Code, as amended, and as expressly defined under Section 3(q) of PD 705, lumber is not timber or a forest product. Thus, petitioners submitted that courts should not construe lumber as timber. Moreover, petitioners claimed that said Executive Order is not applicable to them. aITECA

In affirming the decision of the Court of Appeals, the Supreme Court reiterated that the gathering, collection and/or possession, without license, of lumber, which is considered timber or forest product, are prohibited and penalized under the Forestry Reform Code, as amended. The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in the case of Mustang Lumber Inc. vs. Court of Appeals (257 SCRA 430), in which the Supreme Court expressly ruled that "lumber is included in the term timber." Consistent with Mustang, the Court found no error in the holding of both lower courts. Moreover, the Court found no merit in petitioners' insistence that EO 277 is not applicable to them. Petitioners' unlawful possession of the subject lumber occurred in October 1989 and EO 277 which specifically included possession of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them.

SYLLABUS

1.POLITICAL LAW; STATUTES; CONSTITUTIONALITY; NULLIFICATION OF PROVISION NOT JUSTIFIED IN THE ABSENCE OF UNEQUIVOCAL BREACH OF THE CONSTITUTION; JUDICIAL INQUIRY NOT PROPER WHEN IT DOES NOT APPEAR THAT A PARTY IS ASSERTING A RIGHT FOR WHICH HE IS LAWFULLY ENTITLED TO. — One of the essential requisites for a successful judicial inquiry into the constitutionality of a law is the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial determination. As Respondent Court of Appeals correctly pointed out, petitioners were not "charged with the [unlawful] possession of 'firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish"; thus, the inclusion of any of these enumerated items in EO 277 "is absolutely of no concern" to petitioners. They are not asserting a legal right for which they are entitled to a judicial determination at this time. Besides, they did not present any convincing evidence of a clear and unequivocal breach of the Constitution that would justify the nullification of said provision. A statute is always presumed to be constitutional, and one who attacks it on the ground of unconstitutionality must convincingly prove its invalidity. cdphil

2.ID.; ADMINISTRATIVE LAW; PRESIDENTIAL DECREE NO. 705, AS AMENDED BY EXECUTIVE ORDER NO. 277; SECTION 68 THEREOF; RULING IN MUSTANG CASE (257 SCRA 430) AND LALICAN CASE (G.R. NO. 108619, JULY 31, 1997) TERM "TIMBER", CONSTRUED. — The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in Mustang Lumber, Inc. vs. Court of Appeals, in which this Court expressly ruled that "lumber is included in the term timber." Mustang was recently reiterated in Lalican vs. Vergara, where we also said that '[t]o exclude possession of 'lumber' from the acts penalized in Sec. 68 would certainly emasculate the law itself. . . . After all, the phrase 'forest products' is broad enough to encompass lumber which, to reiterate, is manufactured timber." Indeed, to mention lumber in the aforesaid section would simply result in tautology.

3.ID.; ID.; ID.; TERM "LUMBER"; DEFINITION UNDER AMERICAN JURISPRUDENCE. — Under American jurisprudence, lumber has been legally accepted as a term referring to the manufactured product of logs or to timber sawed or split into marketable form, especially for use in buildings. CSAaDE

4.ID.; ID.; ID.; VIOLATION THEREOF, ESTABLISHED IN CASE AT BAR. — Petitioners insist that EO 277 is not applicable to them, because the seized lumber had been lawfully possessed by Cajidiocan Trading since March 1987, while the amendatory law was issued only on July 25, 1987, and took effect fifteen days after publication. This strained reasoning deserves scant consideration. First, at no time during the apprehensions did petitioners claim that the lumber belonged to Cajidiocan Trading. In fact, Petitioner Ramilo and the drivers openly claimed that the lumber and the trucks belonged to A & E Construction which was, in turn, owned by Petitioner Tan. It was only during the course of the trial, through the testimony of Prisco Marin (characterized by the appellate court as "anything but credible"), that the alleged ownership thereof by Cajidiocan Trading was brought out. Second, the supposed sale of the subject lumber by Matzhou to Cajidiocan Trading, as evidenced by the auxiliary invoice, occurred in March 1987, or more than two and a half years prior to the apprehension and seizure that gave rise to this case. It is highly doubtful if the lumber bought at the earlier date was the very same lumber confiscated in October 1989. No evidence was presented to overcome this veritable doubt. Third and most important, assuming that indeed they were the very same lumber, forest laws and regulations also require the following documents: (1) certificate of lumber origin, (2) sales invoice, (3) delivery receipt, (4) tally sheet, and (5) certificate of transport agreement. None of these documents were proffered in court or elsewhere.

5.ID.; ID.; ID.; VIOLATION THEREOF, A MALUM PROHIBITUM .— Petitioners' unlawful possession of the subject lumber occurred in October 1989. EO 277, which specifically included "possession" of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them. DASCIc

D E C I S I O N

PANGANIBAN, J p:

In denying this petition, the Court reiterates that the gathering, collection and/or possession, without license, of lumber, which is considered timber orforest product, are prohibited and penalized under the Forestry Reform Code, as amended. LLcd

The Case

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek to set aside the Decision 1 of the Court of Appeals 2 in CA-GR No. CR-12815 promulgated on July 30, 1993, and its Resolution 3 promulgated on April 28, 1994. The assailed Decision affirmed the judgment 4 of the Regional Trial Court of Romblon, Branch 81, 5 which, in the complaint against petitioners for violation of Section 68, PD 705 (Forestry Reform Code) as amended, disposed as follows:

"WHEREFORE, this Court finds:

a)the accused ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs, and

b)the accused ALEJANDRO TAN, ISMAEL RAMILO and CRISPIN CABUDOL GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs.

The two (2) terms of imprisonment of each of the accused shall be served successively under Article 70, RPC.

The preventive imprisonment which any of the accused may have suffered is credited in his favor to its full extent.

The Court further orders the confiscation of the lumber described in the aforesaid Informations in favor of the government.

SO ORDERED."

The Facts

On October 26, 1989, about 6:30 p.m., in the town proper of Cajidiocan, Sibuyan Island, Romblon, Forest Guards Joseph Panadero and Eduardo Rabino intercepted a dump truck loaded with narra and white lauan lumber. The truck was driven by Petitioner Fred Moreno, an employee of A & E Construction. Again, about 8:00 p.m. on October 30, 1989, this time in Barangay Cambajao, Forest Guards Panadero and Rabino apprehended another dump truck with Plate No. DEK-646 loaded withtanguile lumber. Said truck was driven by Crispin Cabudol, also an employee of A & E Construction. Both motor vehicles, as well as the construction firm, were owned by Petitioner Alejandro Tan. In both instances, no documents showing legal possession of the lumber were, upon demand, presented to the forest guards; thus, the pieces of lumber were confiscated.

 

On March 16, 1990, Tan and Moreno, together with Ismael Ramilo, caretaker and timekeeper of A & E Construction, were charged by First Assistant Provincial Prosecutor Felix R. Rocero with violation of Section 68, 6 PD No. 705, as amended by EO No. 277, in an Information 7 which reads:

"That on or about the 26th day of October, 1989, at around 6:30 o'clock in the evening, in the Poblacion, municipality of Cajidiocan, province of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conspiring, confederating and mutually helping one another, with intent of gain and without the legal documents as required under existing forest laws and regulations, did then and there wilfully, unlawfully and feloniously have in their possession and under their custody and control 13 pieces narra lumber about 171 board feet and 41 pieces tanguile lumber about 834 board feet valued at P8,724.00, Philippine currency, to the damage and prejudice of the government in the aforestated amount."

In another Information, 8 Tan and Ramilo, together with Crispin Cabudol, were also charged for the same violation in connection with the October 30, 1989 incident.

On April 26, 1990, all the accused, assisted by counsel, were arraigned on the basis of the aforementioned Informations; each pleaded not

guilty. 9 The cases were thence jointly tried, pursuant to Section 14, Rule 119 of the Rules of Court. 10

During the trial, the defense did not contest the above factual circumstances except to deny that the forest guards demanded, on either of the two occasions, papers or documents showing legal possession of the lumber. Additionally, Prisco Marin, who claimed to have been the officer-in-charge (OIC) of the Bureau of Forest Development of Sibuyan, testified that the seized pieces of lumber were bought by Tan's Cajidiocan Trading, one of the licensed lumber dealers in the island, from Matzhou Development Corporation ("Matzhou") which thus delivered to the former Auxiliary Invoice No. 763850 11 dated March 19, 1987 issued by the Bureau of Internal Revenue office in Romblon. According to Marin, the director of forestry had granted Matzhou a Tree Recovery Permit covering the entire island of Sibuyan. He added that he had inspected the lumber in question in the compound of A & E Construction or Cajidiocan Trading, where he was shown the auxiliary invoice covering the subject. 12

Ruling of the Trial Court

The trial court brushed aside the version of the defense and ruled that the confiscated pieces of lumber which were admittedly owned by Accused Tan were not legitimate deliveries but aborted nocturnal haulings. It convicted all the accused as charged, for their failure to comply with the Forestry Reform Code, which requires the following legal documents: (1) an auxiliary invoice, (2) a certificate of origin, (3) a sales invoice, (4) scale/tally sheets and (5) a lumber dealer permit.

Ruling of Respondent Court of Appeals

On appeal, the accused assigned to the trial court these ten errors: (1) holding them liable under Section 68 of EO 277; (2) ruling that their possession of the lumber were unauthorized or illegal; (3) retroactively applying E.O. 277; (4) ruling that the accused did not have the necessary documents to make their possession legal; (5) convicting them despite the absence of the corpus delicti; (6) admitting in evidence the alleged seizure receipts or, assuming their admissibility, considering them as evidence of corpus delicti; (7) finding that the deliveries were aborted nocturnal haulings; (8) convicting Alejandro Tan on the ground of conspiracy; (9) ruling that the guilt of the accused was proved beyond reasonable doubt; and (10) sustaining the constitutionality of EO 277. 13

As regards the first assigned error, the Court of Appeals held petitioners' "artful distinction between timber and lumber" "to be fallacious and utterly unmeritorious." It thereby upheld the solicitor general's manifestation that "forest products" include "wood" which is defined by Webster's Dictionary as "the hard fibrous substance beneath the back of trees and shrubs." Respondent Court succinctly ruled that to construe "sawn lumber" as not covered by "sawn timber" would defeat the evident intent and purpose of the law, for "what would prevent an illegal logger [from bringing] with him a portable saw and having the timber illegally cut/gathered [and] sawn right on the spot, thus gaining immunity for himself[?]" 14

As to the next three assigned errors which relied heavily on Prisco Marin's testimony, Respondent Court dismissed the said witness' account as "anything but credible." It added that Marin's testimony largely focused on a certification he made stating that, five years ago, he inspected the same confiscated lumber which were to be used for the repair of school buildings by A & E Construction in Sibuyan. But during the cross-examination, he admitted that he made the inspection in December 1989. The appellate tribunal noted that, by then, he had already been relieved of his position as OIC of the Bureau of Forest Development in Romblon; hence, he had no business inspecting the lumberyard of Petitioner Tan. In fact, he admitted that in December 1989, it was Romulae Gadaoni who was already the highest forest officer in the island. 15

As to the fifth and sixth alleged errors, Respondent Court ruled that corpus delicti does not refer literally to the object of the crime — in this case, the forest products possessed without the required legal documents. The fact that the crimes charged were perpetrated by the petitioners was credibly and amply proven by the detailed testimonies of the prosecution witnesses, including the admission of Defense Witness Ismael Ramilo. The seizure receipts merely served to corroborate their testimonies. 16

The seventh and ninth assigned errors were deemed answered in the foregoing discussions. As to the eighth, no other than the admission of his caretaker orkatiwala, Co-Accused Ramilo, proved that Tan was involved in the conspiracy. Ramilo testified that the deliveries of lumber on the subject dates (October 26 and 30, 1989) were made pursuant to the instruction of Tan; and that the latter owned said lumber, the trucks and the construction firm. The two accused truck

drivers who were caught in flagrante delicto were mere employees of Tan. 17

The last assigned error was set aside by Respondent Court as unnecessary. Absolutely of no concern to the petitioners, who were caught in possession of lumber without the required legal documents, was the alleged unconstitutionality of the inclusion of "firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish" in EO 277. There being other grounds to resolve the case, the constitutionality of said phrase was not passed upon. 18

In their motion for reconsideration, petitioners raised these additional grounds: (1) the Forestry Reform Code and the laws and regulations of the Department of Environment and Natural Resources (DENR) distinguish between timber and lumber and between lumber and other forest products; (2) the Informations alleged and the facts proved that lumber is not covered by the provision supposedly violated; (3) judicial interpretation or construction may not be resorted to in order to fill a gap or clear an ambiguity in penal statutes and, assuming the propriety thereof, construction should be in favor of the accused; (4) lack of documents for possession of lumber is not punishable under the law; and (5) the perceived weakness in the testimony of Defense Witness Prisco Marin should not strengthen the case for the prosecution. In its April 28, 1994 Resolution, Respondent Court found "no cogent reason for the reversal or modification" of its Decision. Hence, this petition. 19

The Issues

Petitioners now ask this Court to likewise pass upon their foregoing submissions. Many of the errors raised, however, involve factual questions, the review of which is not within the ambit of this Court's functions, particularly in this case where the findings of the trial court were affirmed by the appellate court and where petitioners failed to show any misappreciation of the evidence presented. 20 We shall therefore limit our review only to questions of law. LLcd

Accordingly, we shall rule on the following legal issues: (1) the constitutionality of Section 68 of EO 277, (2) the treatment by the lower courts of lumber as timberand/or forest product within the contemplation of PD 705, as amended, and (3) the alleged retroactive application of EO 277.

The Court's Ruling

The petition is not meritorious.

Preliminary Issue:

Constitutionality of Sec. 68, E.O. 277

The impugned legal provision reads:

"Sec. 68.Cutting, Gathering and/or Collecting Timber, or other Forest Products Without License. — Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found."

 

Petitioners aver that the above provision is violative of substantive due process, because it requires the possession of certain legal documents to justify "mere possession" of forest products which, under Section 3(q) of PD 705, includes, among others, "firewood, bark, honey, beeswax, and even grass, shrub, flowering plant, 'the associated water' or fish" and penalizes failure to present such required documents.

One of the essential requisites for a successful judicial inquiry into the constitutionality of a law is the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial determination. 21 As Respondent Court of Appeals correctly pointed

out, petitioners were not "charged with the [unlawful] possession of 'firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish"; thus, the inclusion of any of these enumerated items in EO 277 "is absolutely of no concern" to petitioners. They are not asserting a legal right for which they are entitled to a judicial determination at this time. Besides, they did not present any convincing evidence of a clear and unequivocal breach of the Constitution that would justify the nullification of said provision. 22 A statute is always presumed to be constitutional, and one who attacks it on the ground of unconstitutionality must convincingly prove its invalidity. 23

Main Issue: Under PD 705 and EO 277, Is Lumber Considered Timber or Forest Product?

Petitioners contend that possession of manufactured lumber is not punishable under the Forestry Reform Code, as amended. As explicitly provided in Section 68 of both PD 705 and EO 277 (the law that amended the former), only the cutting, gathering, collecting and/or possession, without license, of timber and other forest products are prohibited. As expressly defined under Section 3(q) of PD 705, lumber is not timber or a forest product. It is only in Section 79 of the same law where the sale of lumber, without compliance with established grading rules and standards, is prohibited. Petitioners submit that the forest laws and regulations sufficiently differentiate between timber and lumber; therefore, courts should not construe lumber as timber.

The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in Mustang Lumber, Inc. vs. Court of Appeals,24 in which this Court expressly ruled that "lumber is included in the term timber." 25 We quote at length the Court's discussion:

"The Revised Forestry Code contains no definition of either timber or lumber. While the former is included in forest products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same section in the definition of 'Processing plant,' which reads:

(aa)Processing plant is any mechanical set-up, machine or combination of machine used for the processing of logs and other forest raw materials into lumber, veneer,

plywood, wallboard, blackboard, paper board, pulp, paper or other finished wood products. LLcd

This simply means that lumber is a processed log or processed forest raw material. Clearly, the Code uses the term lumber in its ordinary or common usage. In the 1993 copyright edition of Webster's Third New International Dictionary, lumber is defined, inter alia, as 'timber or logs after being prepared for the market.' Simply put, lumber is a processed log or timber.

It is settled that in the absence of legislative intent to the contrary, words and phrases used in a statute should be given their plain, ordinary, and common usage meaning. And insofar as possession of timber without the required legal documents is concerned, Section 68 of P.D. No. 705, as amended, makes no distinction between raw or processed timber. Neither do we. Ubi lex non distinguit nec nos distinguire debemus." 26

Mustang was recently reiterated in Lalican vs. Vergara, 27 where we also said that '[t]o exclude possession of 'lumber' from the acts penalized in Sec. 68 would certainly emasculate the law itself. . . . After all, the phrase 'forest products' is broad enough to encompass lumber which, to reiterate, is manufactured timber." Indeed, to mention lumber in the aforesaid section would simply result in tautology.

In addition, under American Jurisprudence, lumber has been legally accepted as a term referring to the manufactured product of logs 28 or to timber sawed or split into marketable form, especially for use in buildings. 29

Consistent with Mustang, we find no error in the holding of both lower courts. Clearly, petitioners are liable for violation of Section 68 of the Forestry Reform Code, as amended.

Corollary Issue: No Retroactive Application of EO 277

Petitioners insist that EO 277 is not applicable to them, because the seized lumber had been lawfully possessed by Cajidiocan Trading since March 1987, while the amendatory law was issued only on July 25, 1987, and took effect fifteen days after publication. This strained reasoning deserves scant consideration. First, at no time during the apprehensions did petitioners claim that the lumber belonged to Cajidiocan Trading. In fact, Petitioner Ramilo and the drivers openly claimed that the lumber and the trucks belonged to A & E Construction

which was, in turn, owned by Petitioner Tan. It was only during the course of the trial, through the testimony of Prisco Marin (characterized by the appellate court as "anything but credible"), that the alleged ownership thereof by Cajidiocan Trading was brought out. Second, the supposed sale of the subject lumber by Matzhou to Cajidiocan Trading, as evidence by the auxillary invoice, occurred in March 1987, or more than two and a half years prior to the apprehension and seizure that gave rise to this case. It is highly doubtful if the lumber bought at the earlier date was the very same lumber confiscated in October 1989. No evidence was presented to overcome this veritable doubt. Third and most important, assuming that indeed they were the very same lumber, forest laws and regulations also require the following documents: (1) certificate of lumber origin, (2) sales invoice, (3) delivery receipt, (4) tally sheet, and (5) certificate of transport agreement. 30 None of these documents were proffered in court or elsewhere.

Petitioners' unlawful possession of the subject lumber occurred in October 1989. EO 277, which specifically included "possession" of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them. 31

WHEREFORE, the petition is DENIED for utter lack of merit. The questioned Decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.

SO ORDERED. LLcd

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ ., concur.

284 scra 617

SECOND DIVISION

[G.R. No. 127296. January 22, 1998.]

EDUBIGIS GORDULA, CELSO V. FERNANDEZ, JR., CELSO A. FERNANDEZ, NORA ELLEN ESTRELLADO, DEVELOPMENT BANK OF THE PHILIPPINES, J.F. FESTEJO AND CO., INC. AND REGISTER OF DEEDS OF LAGUNA, petitioners, vs. THE HONORABLE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES (represented by the National Power Corporation), respondents.

Fernandez, Panote, Quimbo & Guades for petitioners.

The Solicitor General for respondents.

SYNOPSIS

The land in question is located in Talaongan, Cavinti, Laguna and within the Caliraya-Lumot River Forest Reserve pursuant to Proclamation No. 573 as issued by President Ferdinand E. Marcos. However, three years after such proclamation of petitioner Edubigis Gordula filed an application for free patent over the land with the Bureau of Lands, which was granted. Subsequently, a Certificate of Title covering the land in question was issued by the Register of Deeds in the name of Gordula. The other petitioners acquired rights over the land in question by purchase. On July 16, 1987, former President Corazon Aquino issued Executive Order No. 224 vesting in the Napocor complete jurisdiction, control and regulation over the "Caliraya-Lumot Watershed Reservation as covered by Proclamation No. 573. The Napocor then stopped the construction of the road and fences being undertaken by private petitioner Estrellado, as well as ordered Estrellado to remove all the improvements made therein. For failure of petitioner Estrellado to remove the improvements, the NAPOCOR then filed a complaint for Annulment of the Free Patent and Cancellation of Titles and Reversion. After the trial court ruled in favor of petitioners. But it was reversed by the Court of Appeals.

Hence, this petition.

In denying this petition the court ruled that it is well-settled that forest land is incapable of registration, and its inclusion in a title is incapable of registration, and its inclusion in a title nullifies that title. To be sure, the defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the state in an action for reversion of the land covered thereby when such land is a part of a public forest or of a forest reservation, the patent covering forest land being void ab initio. Nor can the mistake or error of its officials or agents in this regard be invoked against the government.

SYLLABUS

1.CIVIL LAW; PUBLIC LAND ACT; FOREST LANDS; OUTSIDE THE COMMERCE OF MAN. — We start with the proposition that the sovereign people, represented by their lawfully constituted government, have untrammeled dominion over the forests on their native soil. Forest lands, being the self-replenishing, versatile and all-important natural resource that they are, need to be reserved and saved to promote the people's welfare. By their very nature or by executive or statutory fiat, they are outside the commerce of man,

unsusceptible of private appropriation in any form, and inconvertible into any character less than of inalienable public domain, regardless of their actual state, for as long as the reservation subsists and is not revoked by a subsequent valid declassification. It is well-settled that forest land is incapable of registration, and its inclusion in a title nullifies that title.

2.ID.; ID.; NO PUBLIC LAND CAN BE ACQUIRE BY PRIVATE PERSONS WITHOUT ANY GRANT FROM THE GOVERNMENT; CASE AT BAR. — No public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of a title from the state. The facts show that petitioner Gordula, did not acquire title to the subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good. TDSICH

3.ID.; ID.; ID.; CLAIMANT MUST SHOW BY CLEAR AND CONVINCING EVIDENCE THAT PROPERTY WAS ACQUIRED BY ANY MEANS FOR ACQUISITION OF PUBLIC LANDS. — In Director of Lands v. Reyes, we held that a settler claiming the protection of "private rights" to exclude his land from a military or forest reservation must show ". . . by clear and convincing evidence that the property in question was acquired by [any] . . . means for the acquisition of public lands." In fine, one claiming "private rights" must prove that he has complied with C.A. No. 141, as amended otherwise known as the Public Land Act, which prescribes the substantive as well as the procedural requirements for acquisition of public lands. This requires at least thirty (30) years of open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of acquisition, immediately preceding the filing of the application for free patent. The rationale for the 30-year period lies in the presumption that the land applied for pertains to the State, and that the occupants and/or possessors claim an interest therein only by virtue of their imperfect title or continuous, open and notorious possession.

4.ID.; ID.; CONTINUOUS POSSESSION FOR LONG PERIOD OF TIME OF PUBLIC AGRICULTURAL LAND NEVER CONFERS TITLE; REASON. — Indeed, the possession of public agricultural land, however long the period may have extended, never confers title thereto upon the

possessor. The reason, to reiterate our ruling, is because the statute of limitations with regard to public agricultural land does not operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State.

5.ID.; ID.; ID.; POSSESSION FOR 25 YEARS OF THE LAND PRIOR TO ITS RESERVATION SHORT OF 30-YEAR ACQUISITIVE PRESCRIPTION. — In the case at bar, petitioners have failed to comply with the mandatory 30-year period of possession. Their 25-year possession of the land prior to its reservation as part of the Caliraya-Lumot River Forest Reserve cannot be considered compliance with C.A. No. 141, as amended.

6.ID.; TORRENS SYSTEM OF LAND REGISTRATION; DEFENSE OF DEFEASIBILITY OF TITLE DOES NOT LIE AGAINST THE STATE. — The defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the state in an action for reversion of the land covered thereby when such land is a part of a public forest or of a forest reservation, the patent covering forest land being void ab initio.

7.POLITICAL LAW; STATE; MISTAKES OR ERROR OF ITS OFFICIAL CANNOT BE INVOKED AGAINST IT. — Nor can the mistake or error of its officials or agents in this regard be invoked against the government.

8.CIVIL LAW; PUBLIC LAND LAW; FOREST LAND; CONVERSION OF FOREST RESERVE INTO PUBLIC ALIENABLE LAND REQUIRES A CATEGORICAL ACT OF DECLASSIFICATION BY THE PRESIDENT. — The conversion of a forest reserve into public alienable land, requires no less than a categorical act of declassification by 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. There is none such in this case.

D E C I S I O N

PUNO, J p:

Before us is a petition to affirm the Decision of the Regional Trial Court, Branch 27, Sta. Cruz, Laguna, which was reversed by the respondent

Court of Appeals in its Decision 1 dated June 20, 1995 in C.A.-G.R. CV No. 45466. Petitioners' Motion for Reconsideration was denied by respondent court on November 15, 1996. 2

The facts show that on June 26, 1969, former President Ferdinand E. Marcos issued Proclamation No. 573 3 withdrawing from sale and settlement and setting aside as permanent forest reserves, subject to private rights, certain parcels of the public domain denominated as follows:

Parcel No. 1 — Magat River Forest Reserve cdtai

Parcel No. 2 — Chico River Forest Reserve

Parcel No. 3 — Abulug River Forest Reserve

Parcel No. 4 — Penaranda River Forest Reserve

Parcel No. 5 — Angat River-Bustos Dam Forest Reserve

Parcel No. 6 — Ambayawan River Forest Reserve

Parcel No. 7 — Umiray River Forest Reserve

Parcel No. 8 — Kaliwa River Forest Reserve

Parcel No. 9 — Caliraya-Lumot River Forest Reserve

Parcel No. 10 — Barit River-Lake Buhi Forest Reserve

Parcel No. 11 — Jalaur River Forest Reserve

They were primarily for use as watershed area. Their development was to be undertaken by the Bureau of Forestry, with the cooperation of, among other government agencies, the National Power Corporation (Napocor).

Located in Talaongan, Cavinti, Laguna with an area of Twenty Nine Thousand Seven Hundred Seven (29,707) square meters, and bearing the following boundaries:

North — National Power Corporation

South — Road and Baldomero Halili

West — National Power Corporation

East — National Power Corporation

the parcel of land subject of the case at bar is, by petitioners' explicit admission, 4 within Parcel No. 9, the Caliraya-Lumot River Forest Reserve.

More than three years after the land was segregated as part of the Caliraya-Lumot River Forest Reserve, or on January 9, 1973, petitioner Edubigis Gordula, a native of Cavinti Laguna, filed with the Bureau of Lands, an Application 5 for a Free Patent over the land. Manuel Fernandez and several others also filed free patent applications covering other parcels of land in the area.

On February 5, 1973, petitioner Gordula declared the land for taxation purposes in his name as shown in Tax Declaration No. 0429.

The Regional Director of the Bureau of Lands referred the free patent applications of petitioner Gordula, Fernandez, and several others to Mr. Ravanal Ravanzo, then the General Manager of the Napocor. Mr. Ravanzo responded through the following letter:

 

"October 24, 1973

The Director

Regional Lands Office No. IV

757 Gen. Solano St.

San Miguel, Manila

S i r :

This refers to the Free Patent Application[s] of Manuel Fernandez, et al., of Barrio Talaongan, Cavinti, Laguna, which were referred to this Office for clearance it having been found that they are within the Caliraya-Lumot Watershed Reservation under Proclamation No. 573 dated June 26, 1969.

Investigation conducted by this Office reveals that applicants have sufficient ground to establish 'priority rights' over the areas claimed and that agricultural improvements introduced thereon are not detrimental to the watershed.

In view thereof, this Office interpose[s] no objection to the application by the applicants contained in your letter dated October 2, 1973.

Very truly yours,

(Sgd.) R.R. RAVANZO

General Manager"

On December 10, 1973, petitioner Gordula had the land surveyed; Survey Plan No. F(IV-5) 949-D under his name was approved by the Regional Director of the Bureau of Lands. Thereafter, Mr. Amundo Munda, a Land Inspector of the Bureau of Lands, conducted the requisite investigations.

On January 17, 1974, petitioner Gordula's Application for Free Patent was approved. Free Patent No. 693 was issued in his name.

On January 30, 1974, the Register of Deeds of Laguna issued, on the basis of Free Patent No. 693, Original Certificate of Title No. P-1405 in the name of petitionerGordula.

He declared the land anew for taxation purposes under Tax Declaration No. 6498. He paid its real estate taxes from 1975 to 1979.

In the meantime, respondent Republic, through the Napocor, contracted the Certeza Surveying Company to survey the area constituting the Caliraya-Lumot River Forest Reserve. The survey plans were approved by the Regional Director of the Bureau of Lands on October 27, 1975.

The said survey plans, as well as the Cadastral Map of Talaongan and the Geological Plan of the Caliraya-Lumot River Forest Reserve, show that petitioner Gordula'sland is located in the saddle area of the watershed recreation for the hydro-electric reservoir.

On January 22, 1979, petitioner Gordula sold the land to petitioner Celso V. Fernandez, Jr. for six thousand pesos (P6,000.00). The

Register of Deeds of Laguna cancelled Original Certificate of Title No. P-1405 and issued, in lieu thereof, Transfer Certificate of Title No. T-85445 in the name of petitioner Fernandez, Jr. The latter declared the land for taxation purposes in his name.

On March 12, 1979, Fernandez, Jr. executed a Deed of Absolute Sale over the land in favor of petitioner Celso A. Fernandez for six thousand five hundred pesos (P6,500.00). Transfer Certificate of Title No. T-85445 was cancelled and Transfer Certificate of Title No. 85594 was issued on March 21, 1979 in the name of petitioner Fernandez.

As approved by the Bureau of Lands in Psd-Plan 04-014230, petitioner Fernandez subdivided the land into nine (9) lots. On August 16, 1985, the Register of Deeds of Laguna issued Transfer Certificates of Title Nos. 102492 to 102500 in his name covering the nine (9) subdivision lots.

On August 29, 1985, he sold the lots to petitioner Nora Ellen Estrellado for twenty one thousand pesos (P21,000.00) Transfer Certificates of Title Nos. 102492 to 102500 were cancelled, and in lieu thereof, Transfer Certificates of Title Nos. T-103404 to T-103412 were issued to petitioner Estrellado.

On October 17, 1986, petitioner Estrellado mortgaged to petitioner Development Bank of the Philippines (DBP) four 6 (4) of the (9) lots. Another lot, covered by Transfer Certificate of Title No. 103408, was sold to petitioner J.F. Festejo Company, Inc. to whom was issued, in lieu of the former, Transfer Certificate of Title No. 106495.

On July 16, 1987, former President Corazon Aquino issued Executive Order (E.O.) No. 224 7 vesting in the Napocor "complete jurisdiction, control and regulation" over the "Caliraya-Lumot Watershed Reservation as covered by Proclamation No. 573".

On July 26, 1987, Mr. Antonio Aquino, Jr., the Civil Security Officer of the Cavinti reservoir complex, sent a Memorandum to the President of the Napocor informing him of the fences and roads being constructed in the saddle area, more particularly, in the lots sold by petitioner Fernandez to petitioner Estrellado.

On July 28, 1987, Mr. A. Coronado, the Manager of the Cavinti reservoir complex, asked petitioner Fernandez to remove all the improvements made in the Estrellado lots. In reply, petitioner Fernandez claimed that

the roads being constructed would not adversely affect the reservoir area in case of heavy floods because the Estrellado lots were elevated at a height of around fifty (50) feet.

In view of petitioner Fernandez's refusal, the Napocor assigned two (2) security guards over the lot. The guards ordered the construction workers to leave their posts and barred their return without permission from the Napocor.

On October 18, 1987, petitioner Fernandez, as attorney-in-fact and counsel of petitioner Estrellado, wrote to the President of the Napocor threatening to file a multi-million damage suit if the guards were not removed within fifteen (15) days.

On November 18, 1987, respondent Republic, through the Napocor, filed against petitioners a Complaint for Annulment of Free Patent and Cancellation of Titles and Reversion with Writ of Preliminary Injunction in the RTC of Sta. Cruz, Laguna. 8 On January 29, 1988, the trial court issued a writ of preliminary injunction upon a bond of one hundred thousand pesos (P100,000.00).

On December 28, 1993, the trial court rendered judgment in favor of petitioners. The dispositive portion of its decision states:

"WHEREFORE, judgment is hereby rendered in favor of the defendants and against plaintiff:

(1)Dismissing plaintiff's complaint and dissolving the writ of preliminary injunction issued in this case;

(2)Ordering National Power Corporation to pay defendant Celso A. Fernandez P300,000.00 as actual damages and P30,000.00 as attorney's fees; and

With costs against the plaintiff.

SO ORDERED." 9

Respondent Republic, through the Napocor, elevated the case to the respondent Court of Appeals.

On June 20, 1996, the respondent Court of Appeals ruled against petitioners. It held, inter alia, viz:

"The kernel and primal issue to be resolved by the Court is whether or not Free Patent No. IV-5(693) and Original Certificate of Title No. P-1405 and all derivative titles thereafter issued to the Appellees . . . are null and void. The Appellant avers that the parcel of land covered by the aforesaid Free Patent issued to Gordula is a portion of the vast track of land reserved by former President Marcos as permanent forest under Proclamation No. 573 dated June 26, 196[9] . . . and hence, non-disposable and inalienable, pursuant to Section 88 in relation to Section 83 of Commonwealth Act [No.] 141, as amended. In contrast, the Court a quo dismissed Appellant's complaint, in the light of the exclusionary clause in Proclamation No. 573 . . . that the setting up of the permanent forest reserves over the Caliraya-Lumot Watershed area was 'subject to private rights' if there be any and the letter-clearance of the then General Manager of [Napocor] . . . dated October 24, 1973, interposing no objection to the application for a free patent of Manuel Fernandez, at al.

xxx xxx xxx

We are convinced, beyond cavil, that the parcel of land subject of the Free Patent issued to Gordula on January 17, 1974 and covered by Original Certificate of Title No. P-1405 issued On January 30, 1974 . . . as the two (2) parcels of land purportedly purchased by the [Republic] from Perez and Glorioso in 1941, were public disposable and alienable lands before the issuance, by the former President, of Proclamation No. 573, on June 26, 196[9]. . . the property was, however, later reserved, under Proclamation No. 573, as a permanent forest, on June 26, 196[9]. Since then, the property became non-disposable and inalienable public land. . .

xxx xxx xxx

At the time Gordula filed his application for a Free Patent, on January 9, 1973, the parcel of land . . . was already reserved as a permanent forest under Proclamation No. 573. Since the property was already a forest reservation as of June 26, 196[9], the same could no longer be disposed of or alienated in favor of private individuals . . .

xxx xxx xxx

We do not agree with Appellees' and the Court a quo's pose that Gordula's property was exempt from the application of

Proclamation No. 573 because, by express provision thereof, the reservation was 'subject to private rights, if there be any' . . .

Appellees failed to adduce proof that, as of June 26, 196[9], Gordula had acquired ownership or title to the aforesaid property either by deed or by any other mode of acquisition from the State by operation of law for that matter such as for instance, alienable public land held by a possessor personally, or through his predecessors-in-interest, openly, continuously and exclusively for the prescribed period of thirty (30) years, is converted into private property by mere lapse of period ipso jure . . . In the present recourse, Gordula, as of 196[9], had been in possession of the property or only [twenty-five (25) years] years since 1944 when he commenced, as can be gleaned from his application . . . for a free patent, possession of the property. The period of Gordula's occupancy after 196[9] should not be tacked to the period from 1944 because by then the property was not susceptible of occupancy, disposition, conveyance or alienation. . .

xxx xxx xxx

The Appellees cannot find refuge in the letter of the then General Manager of [Napocor], Ravanal Ravanzo, on October 24, 1973 . . .

In the first place, Ravanzo made no explicit and unequivocal statement, in said letter, that Gordula had priority rights to the property. What he merely declared was that 'applicants have sufficient ground to establish priority rights over the areas claimed . . .' Even if it may be conceded, for the nonce, that indeed, Ravanzo declared that Gordula had priority rights over the property claimed by him, such a declaration is irrefragably erroneous. Munda and the Director of Lands erred in recommending the approval of Gordula's application in the same manner that the then Secretary of Agriculture and Natural Resources erred in issuing the patent to Gordula. But then, well-settled is the doctrine, enunciated by the Supreme Court, in a catena of cases, that the State cannot be bound and estopped by the errors or mistakes of its agents or officials . . .

 

The General Manager of the Appellant is not vested with authority to allow the occupancy or acquisition, by private

individuals, of such properties, whether still needed by the Appellant or not, reserved by the President of the Philippines for permanent forests. Only the President or [the] Congress, by statutory fiat, can revert the property to the disposable or alienable portion of the public domain. LLjur

Anent Appellees' plea that they are buyers of the property in good faith, they must harken to the Decision of the Supreme Court in Republic of the Philippines vs. Court of Appeals, et al., 148 SCRA 480 that:

'. . . even assuming that the transferees are innocent purchasers for value, their titles to said lands derived from the titles of private respondents which were not validly issued as they cover lands still a part of the public domain, may be cancelled.' . .

We do not agree with Appellees' claim that Appellant's suit was barred by prescription and by the purported indefeasibility of their title. Prescription, basically, does not run against the State. The right of the State for the reversion of unlawfully acquired property is not barred by prescription nor by the perceived indefeasibility of Appellees' title for that matter. . ." 10

Thus states the dispositive portion of the decision of respondent appellate court:

"IN THE LIGHT OF ALL THE FOREGOING, THE assailed Decision is hereby REVERSED and SET ASIDE. Another Decision is hereby rendered as follows:

1.Free patent No. IV-5-693 and Original Certificate of Title No. P1405 issued under the name of Edubigis Gordula and all derivative titles issued to the Appellees are hereby declared null and void;

2.The parcel of land covered by said titles is hereby declared reverted to the Government under the jurisdiction, control and supervision of the [Napocor] under Executive Order No. 224 of former President Corazon C. Aquino;

3.The Appellees and all those acting for and in their behalf are hereby prohibited from intruding into and

disturbing the Appellant of its possession and dominion of the subject property; [and]

4.Appellees' counterclaims are DISMISSED. No pronouncement as to costs.

SO ORDERED. 11

Hence, this petition anchored on the following grounds:

"FIRST

RESPONDENT COURT OF APPEALS ERRED TANTAMOUNT TO LACK OF JURISDICTION WHEN IT CONCLUDED THAT THE SUBJECT LAND IS WITHIN THE LANDS BOUGHT BY THE NPC EITHER FROM GERONIMO PEREZ ON MARCH 10, 1941 AND/OR FROM CELERINO GLORIOSO ON SEPTEMBER 26, 1941;

SECOND

ON [sic] THE LAST PARAGRAPH OF PAGE 19 UP TO PAGE 23, LAST PAGE OF THE DECISION, THE RESPONDENT COURT WENT BEYOND THE ISSUES OF THE CASE WHICH RESULTED [IN THE] REVERSAL OF THE, DECISION OF THE LOWER COURT . . .;

THIRD

THE FACTUAL FINDINGS AND CONCLUSION OF THE TRIAL COURT ARE IN CONFLICT WITH THE FINDINGS OF THE RESPONDENT COURT CONCERNING THE ISSUE OF WHETHER OR NOT PETITIONER EDUBIGIS GORDULA HAD ACQUIRED 'PRIVATE RIGHTS' ON THE SUBJECT LAND, WHICH IS AN EXCEPTION UNDER PROCLAMATION NO. 573. HENCE, THIS CASE IS A QUESTION OF FACTS AND OF LAW. . .;

FOURTH

THERE IS NO QUESTION THAT THE SUBJECT LAND IS WITHIN THE AREA OF PROCLAMATION NO. 573. HOWEVER THE RESPONDENT [COURT] GRAVELY ERRED TANTAMOUNT TO LACK OF JURISDICTION WHEN IT WENT TO THE EXTENT OF DISCUSSING ON [sic] THE CIRCUMSTANCES AND INVESTIGATION RELATIVE TO THE ISSUANCE OF THE TITLE TO PETITIONER EDUBIGIS GORDULA AND AFTERWARD DECLARED THAT GORDULA WHO HAS A TITLE ON THE SUBJECT LAND HAS NOT ACQUIRED 'PRIVATE RIGHTS' ON THE LAND DESPITE OF

[sic] THE FACT THAT SAID RESPONDENT COURT IS ALREADY PRECLUDED FROM DISCUSSING THE FACTS RELATIVE ON [sic] THE ISSUANCE OF THE TITLE BY AUTHORITY OF THE PRESIDENT OF THE PHILIPPINES, MORE SO ITS FINDINGS AND CONCLUSION IS [sic] AGAINST THE LAW, JUSTICE AND EQUITY. THIS IS AGAINST THE RULING IN ESPINOSA VS. MAKALINTAL, 79 PHIL. 134 and ORTUA VS. SINGSON ENCARNACION, 5[9] PHIL. 440; and

FIFTH

THE RESPONDENT COURT GRAVELY ERRED IN CONCLUDING THAT THEN GENERAL MANAGER RAVANZO OF NPC AND UNDERSECRETARY OF AGRICULTURE BY AUTHORITY OF THE PRESIDENT OF THE PHILIPPINES ERRED IN ISSUING THE PATENT TO PETITIONER GORDULA. THIS IS AGAINST THE RULING IN ESPINOSA VS. MAKALINTAL, 79 PHIL. 134 and ORTUA VS. SINGSON ENCARNACION, 5[9] PHIL. 440." 12

We affirm the Court of Appeals.

We start with the proposition that the sovereign people, represented by their lawfully constituted government, have untrammeled dominion over the forests on their native soil. Forest lands, being the self-replenishing, versatile and all-important natural resource that they are, need to be reserved and saved to promote the people's welfare. By their very nature 13 or by executive or statutory fiat, they are outside the commerce of man, unsusceptible of private appropriation in any form, 14and inconvertible into any character less than of inalienable public domain, regardless of their actual state, for as long as the reservation subsists and is not revoked by a subsequent valid declassification. 15

"Once again, we reiterate the rule enunciated by this Court in Director of Forestry vs. Muñoz and consistently adhered to in a long line of cases the more recent of which is Republic vs. Court of Appeals, that forest lands or forest reserves are incapable of private appropriation, and possession thereof, however long, cannot convert them into private properties. This ruling is premised on the Regalian doctrine enshrined not only in the 1935 and 1973 Constitution but also in the 1987 Constitution." 16

Petitioners do not contest the nature of the land in the case at bar. It is admitted that it lies in the heart of the Caliraya-Lumot River Forest

Reserve, which Proclamation No. 573 classified as inalienable and indisposable. Its control was vested in the NAPOCOR under E.O. No. 224.

Petitioners, however, contend that Proclamation No. 573 itself recognizes private rights of landowners prior to the reservation. They claim to have established their private rights to the subject land.

We do not agree. No public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of a title from the state. 17 The facts show that petitioner Gordula, did not acquire title to the subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good.

Nonetheless, petitioners insist that the term, "private rights", in Proclamation No. 573, should not be interpreted as requiring a title. They opine that it suffices if the claimant "had occupied and cultivated the property for so many number of years, declared the land for taxation purposes, [paid] the corresponding real estate taxes [which are] accepted by the government, and [his] occupancy and possession [is] continuous, open and unmolested and recognized by the government". 18Prescinding from this premise, petitioners urge that the 25-year possession by petitioner Gordula from 1944 to 1969, albeit five (5) years short of the 30-year possession required under Commonwealth Act (C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula the "private rights" recognized and respected in Proclamation No. 573.

The case law does not support this submission. In Director of Lands v. Reyes, 19 we held that a settler claiming the protection of "private rights" to exclude his land from a military or forest reservation must show ". . . by clear and convincing evidence that the property in question was acquired by [any] . . . means for the acquisition of public lands".

In fine, one claiming "private rights" must prove that he has complied with C.A. No. 141, as amended, otherwise known as the Public Land Act, which prescribes the substantive as well as the procedural

requirements for acquisition of public lands. This law requires at least thirty (30) years of open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition, immediately preceding the filing of the application for free patent. The rationale for the 30-year period lies in the presumption that the land applied for pertains to the State, and that the occupants and/or possessors claim an interest therein only by virtue of their imperfect title or continuous, open and notorious possession. 20

Indeed, the possession of public agricultural land, however long the period may have extended, never confers title thereto upon the possessor. 21 The reason, to reiterate our ruling, is because the statute of limitations with regard to public agricultural land does not operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State. 22

In the case at bar, petitioners have failed to comply with the mandatory 30-year period of possession. Their 25-year possession of the land prior to its reservation as part of the Caliraya-Lumot River Forest Reserve cannot be considered compliance with C.A. No. 141, as amended. The Court has no authority to lower this requirement for it cannot amend the law.

Next, petitioners contend that their "private rights" have been recognized by the government itself. They point to (1) the letter dated October 24, 1973 of then NAPOCOR General Manager, Ravanal Ravanzo, (2) the action of the Bureau of Lands which after investigation, declared him qualified to acquire the land; and (3) the Free Patent issued on January 17, 1974 by the Undersecretary of Agriculture and Natural Resources, by authority of the President of the Philippines. Petitioners urge that the findings and conclusions of the aforementioned government agencies and/or officers are conclusive and binding upon the courts, as held in the cases of Ortua v. Singson Encarnacion 23 and Espinosa v. Makalintal. 24

 

The submissions are unconvincing.

In the first place, there is nothing in Espinosa v. Makalintal that is relevant to petitioners' claims. On the other hand, our ruling in Ortua v.

Singson Encarnacion that "a decision rendered by the Director of Lands and approved by the Secretary of Agriculture and Commerce, upon a question of fact is conclusive and not subject to be reviewed by the courts," 25 was made subject to the categorical caveat "in the absence of a showing that such decision was rendered in consequence or fraud, imposition, or mistake". 2 6

Undoubtedly, then General Manager Ravanzo erred in holding that petitioner Gordula "ha[d] sufficient ground to establish 'priority rights' over the areas claimed". This error mothered the subsequent error of the Bureau of Lands which culminated in the erroneous grant of a free patent on January 17, 1974. The perpetration of these errors does not have the effect of converting a forest reserve into public alienable land. It is well-settled that forest land is incapable of registration, and its inclusion in a title nullifies that title. 27 To be sure, the defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the state in an action for reversion of the land covered thereby when such land is a part of a public forest or of a forest reservation, the patent covering forest land being void ab initio. 28 Nor can the mistake or error of its officials or agents in this regard be invoked against the government. 29 Finally, the conversion of a forest reserve into public alienable land, requires no less than a categorical act of declassification by 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. 30 There is none such in this case. LLphil

SO ORDERED.

Regalado, Mendoza and Martinez, JJ .,concur.

286 scra 230

THIRD DIVISION

[G.R. No. 120652. February 11, 1998.]

EUGENIO DE LA CRUZ, petitioner, vs. COURT OF APPEALS, and CRISTINA MADLANGSAKAY VILLANUEVA, respondents.

Sixto T. Antonio for petitioner.

F.C. Burgos Law Office for private respondent.

SYNOPSIS

In October 1959, petitioner contracted a loan from the parents of private respondent mortgaging the disputed land as security. Sometime in 1973, the land became the subject of an application for registration under the Land Registration Act (Act No. 496) by the Ramos brothers, insisting that they had a better claim than petitioner, being successors-in-interest of a previous possessor of the land. Petitioner opposed the application which, after trial, was denied on the ground that the land, not having been reclassified for other purposes, remained part of the forest reserve, hence, inalienable. Shortly

thereafter, the brothers successfully pursued the reclassification of the land and were granted ownership of the same. It was after this occurrence that private respondent came to purchase the disputed land from the Ramoses. Petitioner filed a complaint for reconveyance with damages against private respondent. The complaint was dismissed. On appeal, the appellate court affirmed in toto the decision of the trial court. A motion for reconsideration was filed by the petitioner but did not prosper. The crucial issue to be resolved by the Court: Is petitioner vested with a better right over the residential lot to which he devoted an abundance of time, effort and resources in fencing and cultivating the same?

The Supreme Court affirmed the decision of the Court of Appeals. The Court held that the ruling in Republic vs. Court of Appeals and Miguel Marcelo, et al. is inapplicable to the present case. In said case, the disputed land was classified after the possession and cultivation in good faith of the applicant, while in the case at bar, petitioner possessed and occupied the land after it had been declared by the government as part of the forest zone. The land remained part of the forest reserve until such time that it was reclassified into alienable or disposable land at the behest of the Ramoses. Absent the fact of declassification prior to the possession and cultivation in good faith by the petitioner, the property occupied by him remained classified as forest or timberland, which petitioner could not have acquired by prescription. cHCIDE

Petition denied.

SYLLABUS

1.CIVIL LAW; LAND REGISTRATION; PUBLIC LANDS; FOREST LAND; ABSENT THE FACT OF DECLASSIFICATION PRIOR TO THE POSSESSION AND CULTIVATION IN GOOD FAITH BY PETITIONER, THE PROPERTY OCCUPIED BY HIM REMAINED CLASSIFIED AS FOREST OR TIMBERLAND, WHICH PETITIONER COULD NOT HAVE ACQUIRED BY PRESCRIPTION. — Unfortunately for him, Republic vs. Court of Appeals and Miguel Marcelo, et al. is inapplicable in the present case. In said case, the disputed land was classified after the possession and cultivation in good faith of the applicant. The Court stated that "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." Land Classification Project No. 3 was certified by the Director of Lands on December 22, 1924, whereas the possession thereof commenced as early as 1909. Petitioner therein was not deprived of his possessory rights by the subsequent classification of the land. Although the classification of lands is a government prerogative which it may opt to exercise to the detriment of another, still, private interests regarding the same are not prejudiced and the possessor in good faith is respected in his right not be disturbed. This was the auspicious situation of petitioner in the abovecited case. In case at bar, petitioner possessed and occupied the land after it had been declared by the Government as part of the forest zone. In fact, the land remained part of the forest reserve until such time that it was reclassified into alienable or disposable land at the behest of the Ramoses. As succinctly stated by this Court in Director of Lands vs. Court of Appeals, a positive act of the Government is needed to declassify land which is classified as forest, and to convert it into alienable or disposable land for other purposes. Until such lands have been properly declared to be available for other purposes, there is no disposable land to speak of. Absent the fact of declassification prior to the possession and cultivation in good faith by petitioner, the property occupied by him remained classified as forest or timberland, which he could not have acquired by prescription. Clearly, the effort to apply Republic vs. Court of Appeals and Miguel Marcelo, et al. in the case at bar is futile. No similarity of facts or events exist which would merit its application to the case presented by petitioner.

2.ID.; MODES OF ACQUIRING OWNERSHIP; PRESCRIPTION; DOES NOT LIE AGAINST THE STATE; THE LENGTHY OCCUPATION OF THE DISPUTED LAND BY PETITIONER CANNOT BE COUNTED IN ITS FAVOR, AS IT REMAINED PART OF THE PATRIMONIAL PROPERTY OF THE STATE. — Neither may the rewards of prescription be successfully invoked by petitioner, as it is an iron-clad dictum that prescription can never lie against the Government. The lengthy occupation of the disputed land by petitioner cannot be counted in his favor, as it remained part of the patrimonial property of the State, which property, as stated earlier, is inalienable and indisposable, under Article 1113 of the Civil Code. Further, jurisprudence is replete with cases which iterate that forest lands or forest reserves are not capable of private appropriation, and possession thereof, however long, cannot convert them into private property. Possession of the residential lot by petitioner, whether spanning decades or centuries, could never ripen into ownership. This Court is constrained to abide by the latin maxim "(d)ura lex, sed lex."

The fact that the disputed land was used for a dual private purpose, namely, as a residential lot and as part of the ricemill business of private respondent's parents, is immaterial. As held in Heirs of Jose Amunategui vs. Director of Forestry, the classification of forest land, or any land for that matter, is descriptive of its legal nature or status, and does not have to be descriptive of what the land actually looks like.

3.ID.; GENERAL PRINCIPLES OF LAW; ESTOPPEL; NOT APPLICABLE IN CASE AT BAR; REASON. — Recourse to the principle of estoppel must likewise fail. Petitioner invokes this principle in light of the contract of mortgage between him and the parents of private respondent. While it is true that the mortgagees, having entered into a contract with petitioner as mortgagor, are estopped from questioning the latter's ownership of the mortgaged property and his concomitant capacity to alienate or encumber the same, it must be considered that, in the first place, petitioner did not possess such capacity to encumber the land at the time for the stark reason that it had been classified as a forest land and remained a part of the patrimonial property of the State. Assuming, without admitting, that the mortgagees cannot subsequently question the fact of ownership of petitioner after having dealt with him in that capacity, still, petitioner was never vested with the proprietary power to encumber the property. In fact, even if the mortgagees continued to acknowledge petitioner as the owner of the disputed land, in the eyes of the law, the latter can never be presumed to be owner. CSTcEI

D E C I S I O N

ROMERO, J p:

The oft-debated issue of ownership based on acquisitive prescription submits itself before the Court anew, involving a four hundred and seven (407) square meter residential lot located at Barangay San Jose, Bulacan, Bulacan. Petitioner Eugenio De La Cruz claims to be the owner and actual possessor of the lot, having possessed and occupied it openly, publicly, notoriously, adversely against the whole world, and in the concept of an owner, for more than thirty years, 1 at the commencement of this controversy on September 28, 1987. Private respondent Cristina Madlangsakay Villanueva is a purchaser of the

same lot from the Ramos brothers, Rogelio and Augusto, Jr., who claim to be successors-in-interest of a previous possessor of the same.

In October 1959, petitioner contracted a loan from the parents of private respondent, Anastacio Sakay and Lourdes Manuel, in the amount of one thousand pesos (P1,000.00), mortgaging the disputed land as security. Sometime in 1973, the land became the subject of an application for registration under the Land Registration Act (Act No. 496) 2 by the Ramos brothers. They insisted that, under said Act, they had a better claim than petitioner, being successors-in-interest of a previous possessor of the land. Petitioner seasonably opposed the application which, after trial, was denied on the ground that the land, not having been reclassified for other purposes, remained part of the forest reserve, hence, inalienable. 3 Consequently, the opposition was dismissed. Shortly thereafter, the brothers successfully pursued the reclassification of the land and were granted ownership of the same. It was after this occurrence that private respondent came to purchase the disputed land from the Ramoses.

Oblivious of the Ramoses' success in claiming the land, petitioner was later surprised to learn that its ownership had been bestowed upon them, and that it was subsequently sold to private respondent. Petitioner, as plaintiff in Civil Case No. 520-M-87, entitled "Eugenio De La Cruz versus Cristina Madlangsakay Villanueva," filed a complaint on September 28, 1987 for reconveyance with damages against private respondent, defendant therein. The complaint was dismissed.

On appeal, plaintiff-appellant elucidated that an uncle of his had given the land to his mother, after having purchased it from a Cecilio Espiritu in 1930. 4 He sought a reversal of the decision of the lower court, praying for a reconveyance of the land in his favor. The appealed decision was affirmed in toto by the appellate court. A motion for reconsideration, for lack of merit, did not prosper.

 

The persistent petitioner, filing this petition for review, opined that the questioned decision of the trial court was incompatible with the ruling in Republic vs. Court of Appeals and Miguel Marcelo, et al., 5 where this Court held that the primary right of a private individual who possessed and cultivated the land in good faith, much prior to its classification, must be recognized and should not be prejudiced by after-events which could not have been anticipated. 6 He relies on the equitable

principle of estoppel, alleging that, by virtue of the contract of mortgage, private respondent and her parents thereby tacitly acknowledged him as the true and lawful owner of the mortgaged property. As such, they are estopped from claiming for themselves the disputed land. He prays for the reconveyance of the lot in his favor; moral damages in the amount of ten thousand pesos (P10,000.00); exemplary damages of like amount; and attorney's fees of twenty thousand pesos (P20,000.00), plus one thousand pesos (P1,000.00) per court appearance and the costs of the suit. 7

This petition cannot be given due course.

The several decades when petitioner possessed and occupied true land in question may not be considered in his favor after all. "In an action for reconveyance, what is sought is the transfer of the property which has been wrongfully or erroneously registered in another person's name, to its rightful and legal owner, or to one with a better right. This (sic) is what reconveyance is all about." 8

The crucial point for resolution is this: Is petitioner vested with a better right over the residential lot to which he devoted an abundance of time, effort and resources in fencing and cultivating the same? It is sad that even the magnanimous compassion of this Court cannot offer him any spark of consolation for his assiduous preservation and enhancement of the property.

We answer in the negative.

Unfortunately for him, Republic vs. Court of Appeals and Miguel Marcelo, et al. 9 is inapplicable in the present case. In said case, the disputed land was classified afterthe possession and cultivation in good faith of the applicant. The Court stated that "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." 10 Land Classification Project No. 3 was certified by the Director of Lands on December 22, 1924, whereas the possession thereof commenced as early as 1909. 11 Petitioner therein was not deprived of his possessory rights by the subsequent classification of the land. Although the classification of lands is a government prerogative which it may opt to exercise to the detriment of another, still, private interests regarding the same are not prejudiced and the

possessor in good faith is respected in his right not be disturbed. This was the auspicious situation of petitioner in the abovecited case.

Here, petitioner possessed and occupied the land after it had been declared by the Government as part of the forest zone. In fact, the land remained part of the forest reserve until such time that it was reclassified into alienable or disposable land at the behest of the Ramoses. As succinctly stated by this Court in Director of Lands vs. Court of Appeals, 12 a positive act of the Government is needed to declassify land which is classified as forest, and to convert it into alienable or disposable land for other purposes. Until such lands have been properly declared to be available for other purposes, there is no disposable land to speak of. 13 Absent the fact of declassification prior to the possession and cultivation in good faith by petitioner, the property occupied by him remained classified as forest or timberland, which he could not have acquired by prescription. 14

Clearly, the effort to apply Republic vs. Court of Appeals and Miguel Marcelo, et al. in the case at bar is futile. No similarity of facts or events exist which would merit its application to the case presented by petitioner.

Neither may the rewards of prescription be successfully invoked by petitioner, as it is an iron-clad dictum that prescription can never lie against the Government. The lengthy occupation of the disputed land by petitioner cannot be counted in his favor, as it remained part of the patrimonial property of the State, which property, as stated earlier, is inalienable and indisposable. Under Article 1113 of the Civil Code:

"All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription." (Emphasis supplied).

Further, jurisprudence is replete with cases which iterate that forest lands or forest reserves are not capable of private appropriation, and possession thereof,however long, cannot convert them into private property. 15 Possession or the residential lot by petitioner, whether spanning decades or centuries, could never ripen into ownership. This Court is constrained to abide by the latin maxim "(d)ura lex, sed lex." 16

The fact that the disputed land was used for a dual private purpose, namely, as a residential lot and as part of the ricemill business of private respondent's parents, is immaterial. As held in Heirs of Jose Amunategui vs. Director of Forestry, 17 the classification of forest land, or any land for that matter, is descriptive of its legal nature or status, and does not have to be descriptive of what the land actually looks like.

Recourse to the principle of estoppel must likewise fail. Petitioner invokes this principle in light of the contract of mortgage between him and the parents of private respondent. While it is true that the mortgagees, having entered into a contract with petitioner as mortgagor, are estopped from questioning the latter's ownership of the mortgaged property and his concomitant capacity to alienate or encumber the same, 18 it must be considered that, in the first place, petitioner did not possess such capacity to encumber the land at the time for the stark reason that it had been classified as a forest land and remained a part of the patrimonial property of the State. Assuming, without admitting, that the mortgagees cannot subsequently question the fact of ownership of petitioner after having dealt with him in that capacity, still, petitioner was never vested with the proprietary power to encumber the property. In fact, even if the mortgagees continued to acknowledge petitioner as the owner of the disputed land, in the eyes of the law, the latter can never be presumed to be owner.

WHEREFORE, considering the foregoing, we are bound by the findings of the appellate court and are constrained to AFFIRM the same in toto. No pronouncement as to costs.

SO ORDERED.

Narvasa, C .J ., Kapunan, Francisco and Purisima, JJ ., concur.

309 scra 193

THIRD DIVISION

[G.R. No. 105912. June 28, 1999.]

SPOUSES TEOFILO C. VILLARICO and MAXIMA A. FAUSTINO, petitioners, vs. HONORABLE COURT OF APPEALS, REPUBLIC OF THE PHILIPPINES and MARCOS CAMARGO, respondents.

Teofilo C. Villarico for petitioners.

Manuel T. De Guia for private respondent.

SYNOPSIS

On May 31, 1977, an application for confirmation of title was filed by petitioners over a parcel of land situated in Meycauayan, Bulacan. The application was opposed by Marcos Camargo who claimed to be the real owner thereof. The government also interposed an opposition, averring that the land in question is part of the public domain. The trial court of origin dismissed the case. According to the trial court, the petitioners had not presented any Certification from the Bureau of Forestry attesting to the fact that the subject property is no longer within the unclassified region of Meycauayan, Bulacan. The Court of Appeals affirmed said dismissal. Hence, this petition.

The assigned errors relate to factual and evidentiary matters which the Supreme Court does not inquire into in an appeal on certiorari. TSaEcH

Both the court a quoand the Court of Appeals correctly adjudged the area at stake as within the unclassified forest zone incapable of private appropriation. Indeed, forest lands cannot be owned by private persons. Possession thereof, no matter how long, does not ripen into a registrable title.

SYLLABUS

1.REMEDIAL LAW; EVIDENCE; CREDIBILITY; FINDINGS OF FACT OF TRIAL COURT, AND COURT OF APPEALS, BINDING ON SUPREME COURT. — It bears stressing that the first, second, and third assigned errors

relate to factual and evidentiary matters which the Supreme Court does not inquire into in an appeal oncertiorari. It is well-settled that in a petition for review on certiorari as a mode of appeal under Rule 45 of the Rules of Court, only questions of law may be raised. The Supreme Court is not a trier of facts. Findings of fact by the trial court and the Court of Appeals are binding on the Supreme Court.

2.ID.; ID.; ID.; ID.; CASE AT BAR. — In the case under consideration, the Court discerns no compelling reason to reverse such findings arrived at by the trialcourt and affirmed by the respondent court, absent any showing of any error, mistake, or misappreciation of facts. Records on hand indicate that the decisions under attack accord with the law and the evidence. As aptly observed by the respondent court, the primordial issue here is the character or classification of the property applied for registration — whether or not the same still forms part of the public domain. On this crucial question, the trial court a quo and the Court of Appealscorrectly adjudged the area at stake as within the unclassified forest zone incapable of private appropriation. CIHAED

3.LAND TITLES AND DEEDS; PUBLIC LAND ACT; FOREST LAND; POSSESSION THEREOF, NO MATTER HOW LONG, DOES NOT RIPEN INTO REGISTRABLE TITLE. — Indeed, forest lands cannot be owned by private persons. Possession thereof, no matter how long, does not ripen into a registrable title. The adverse possession which may be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or disposable portions of the public domain.

D E C I S I O N

PURISIMA, J p:

This is a petition for review on certiorari of the decision of the Court of Appeals 1 in CA-G.R. CV No. 22608, affirming the decision of Branch 22 of the Regional TrialCourt, Malolos, Bulacan, which dismissed the application for confirmation of title in LRC Case No. 604-V-77.

The facts that matter are as follows:

On May 31, 1977, an application for confirmation of title was filed by the spouses, Teofilo Villarico and Maxima Villarico, over a 1,834 square meter parcel of land in Ubihan, Meycauayan, Bulacan, docketed as LRC Case No. 604-V-77 before the then Court of First Instance of Bulacan. Among others, applicants alleged that they are the absolute owners of subject property, having bought the same from the spouses, Segundo Villarico (Teofilo's father) and Mercedes Cardenas, that they and their predecessors-in-interest have been in actual, open, adverse and continuous possession thereof for more than thirty (30) years, that they are not aware of any mortgage or encumbrance thereon nor of any person having an estate or interest therein, and that the land involved is not within the forest zone or government reservation. cdphil

The application for land registration at bar was opposed by Marcos Camargo, who claims to be the real owner thereof. 2 The Government interposed its opposition, through the Director of Forestry (now Director of Forest Management), averring that the land in question is part of the public domain, within the unclassified area in Meycauayan, Bulacan per LC Map No. 637 dated March 1, 1927 of the Bureau of Forest Management and consequently, not available for private appropriation.

On May 23, 1989, the trial court of origin dismissed the case, ratiocinating thus:

"It is well settled in this jurisdiction that a certificate of title is void when it covers property of the public domain classified as forest or timber and mineral lands. Any title thus issued on non-disposable lots, even in the hands of an innocent purchaser for value, should be cancelled (Lepanto Consolidated Mining vs. Dumyang, L-31666, April 30, 1979). There being no concrete evidence presented in this case that the property in question was ever acquired by the applicants or by the private oppositor (as attested to by the proceedings of B.L. Claim No. 38 (N) before the Bureau of Lands) or by their respective predecessors-in-interest either by composition of title or by any other means for the acquisition of public lands, the property in question must be held to be part of the public domain, especially so that the private parties had not presented any Certification from the Bureau of Forestry attesting to the fact that the subject property is no longer within the unclassified region of Meycauayan, Bulacan. Thus, if the land in question still forms part of the public forest, then, possession thereof, however long, cannot convert it into private property as it is

within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction of the cadastral court to register under the Torrens System (Republic vs. Court of Appeals, 89 SCRA 648). LLjur

WHEREFORE, premises considered, let this case be, as it is hereby DISMISSED.

No pronouncement as to costs.

SO ORDERED." 3

Therefrom, petitioners appealed to the Court of Appeals, which came out with a judgment of affirmance on June 26, 1992. Respondent court affirmed the findings of facts below, holding that subject parcel of land is within the public domain not available for private appropriation.

Undaunted, petitioners found their way to this court via the present petition for review on certiorari; placing reliance on the assignment of errors, that:

I

THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDINGS OF THE TRIAL COURT THAT BEFORE 1948 THERE WAS NO DOCUMENTATION IN FAVOR OF EITHER PARTIES.

II

THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDING OF THE TRIAL COURT THAT BUENAVENTURA VILLARICO APPARENTLY DIED PRIOR TO 1914.

III

THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDING OF THE TRIAL COURT THAT TAX DECLARATION NO. 3912 IN THE NAME OF BUENAVENTURA VILLARICO COULD HAVE BEEN CONTRIVED SENSING THAT A CONFLICT OVER THE PROPERTY IN THE NEAR FUTURE WAS INEVITABLE. LibLex

IV

THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDING OF THE TRIAL COURT THAT THERE IS NO CONCRETE EVIDENCE PRESENTED TO THE EFFECT THAT THE PROPERTY IN QUESTION WAS EVER ACQUIRED BY THE APPLICANT OR BY THE PRIVATE OPPOSITOR OR BY THEIR RESPECTIVE PREDECESSORS-IN-INTEREST THROUGH LAWFUL MEANS FOR THE ACQUISITION OF PUBLIC LANDS.

V

THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT ERRED IN DISMISSING THE CASE AT BAR.

The appeal is without merit and cannot prosper.

It bears stressing that the first, second, and third assigned errors relate to factual and evidentiary matters which the Supreme Court does not inquire into in an appeal on certiorari. 4 It is well-settled that in a petition for review on certiorari as a mode of appeal under Rule 45 of the Rules of Court, only questions of law may be raised. 5 The Supreme Court is not a trier of facts. 6 Findings of fact by the trial court and the Court of Appeals are binding on the Supreme Court. 7

In the case under consideration, the Court discerns no compelling reason to reverse such findings arrived at by the trial court and affirmed by the respondent court, absent any showing of any error, mistake, or misappreciation of facts. Records on hand indicate that the decisions under attack accord with the law and the evidence.LLjur

As aptly observed by the respondent court, the primordial issue here is the character or classification of the property applied for registration — whether or not the same still forms part of the public domain. On this crucial question, the trial court a quo and the Court of Appeals correctly adjudged the area at stake as within the unclassified forest zone incapable of private appropriation. Accordingly, the Court of Appeals held:

". . . In the case at bar, as found by the court a quo, there has been no showing that a declassification has been made by the Director of Forestry declaring the land in question as disposable or alienable. And the record indeed discloses that applicants have not introduced any evidence which would have led the court a quo to find or rule otherwise. . . .

And so, considering the foregoing, possession of the land in question by the applicants and/or their predecessors-in-interest even for more than 30 years, as they allege, cannot convert the land into private property capable of private appropriation." (Court of Appeals' Decision, pp. 4-5) dctai

Indeed, forest lands cannot be owned by private persons. 8 Possession thereof, no matter how long, does not ripen into a registrable title. The adverse possession which may be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or disposable portions of the public domain. 9

 

WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CV No. 22608 AFFIRMED in toto. No pronouncements as to costs.

SO ORDERED.

Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

Romero, J.,is abroad on official business.

Footnotes

1.Penned by Associate Justice Lorna S. Lombos-de la Fuente and concurred by Associate Justices Eduardo R. Bengzon and Quirino D. Abad-Santos, Jr.

2.Comment of Private Respondent, Rollo, pp. 66-73.

3.Comment of Republic of the Philippines, Rollo, pp. 35-36.

4.Alicbusan v. Court of Appeals, 269 SCRA 336.

5.Laza v. Court of Appeals, 269 SCRA 654.

6.David-Chan v. Court of Appeals, 268 SCRA 677; Union Insurance Society of Canton v. Court of Appeals, 260 SCRA 431.

7.Willex Plastic Industries Corporation v. Court of Appeals, 256 SCRA 478.

8.Palomo v. Court of Appeals, 266 SCRA 392.

9.Ibid.; see also Republic v. Court of Appeals, 258 SCRA 223.

303 scra 127

FIRST DIVISION

[G.R. No. 130906. February 11, 1999.]

REPUBLIC OF THE PHILIPPINES represented by the DIRECTOR, LANDS MANAGEMENT BUREAU, petitioner, vs. FELIX S. IMPERIALJR., FELIZA S. IMPERIAL, ELIAS S. IMPERIAL, MIRIAM S. IMPERIAL, LOLITA ALCAZAR, SALVADOR ALCAZAR, EANCRA CORPORATION, and the REGISTER OF DEEDS of LEGASPI CITY, respondents.

The Solicitor General for petitioner.

Jose A. Verches and Romeo B. Gonzaga for respondents.

SYNOPSIS

On September 12, 1917, the late Elias Imperial was issued Original Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of then Court of First Instance of Albay. OCT No. 55173 was subdivided and further subdivided resulting in the issuance of several titles, which are now the subjects of herein petition in the name of private respondents. Petitioner Republic of the Philippines filed a case with the trial court to judicially declare the Transfer Certificates of Title (TCT) issued to herein private respondents null and void on the ground that the subject land is foreshore land. Within the time for pleading, private

respondents EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed their answer with cross-claim, while the rest, namely, Felix S. Imperial, Feliza S. Imperial, Elias S. Imperial and Miriam S. Imperialfiled a motion to dismiss. They contended that the adjudication by the cadastral court is binding against the whole world including the Republic since the cadastral proceedings are in rem and the government itself through the Director of Lands instituted the proceedings and was a direct and active participant therein. Petitioner, through the Office of the Solicitor General, filed an objection to the motion to dismiss. After hearing the motion to dismiss, the trial court dismissed the complaint on the ground that the judgment rendered by the cadastral court in G.R. Cad. Rec. No. 88 and the Court's resolution in the petition to quiet title, G.R. 85770, both decreed that the parcel of land covered by OCT No. 408 (500) was not foreshore. Petitioner appealed to the Court of Appeals. The appellate court denied petitioner's motion for reconsideration for lack of merit and for failure to file the appellant's brief within the extended period granted to petitioner. Hence, the present petition. Petitioner Republic assailed the dismissal of its appeal on purely technical grounds. Petitioner also alleged that it has raised meritorious grounds which, if not allowed to be laid down before the proper Court, will result to the prejudice of, and irreparable injury to, public interest, as the Government would lose its opportunity to recover what it believes to be non-registerable lands of the public domain. aDHCEA

The Supreme Court granted the petition. The Court ruled that the question of what constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. It has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrants or when the purpose of justice requires it. In the case at bar, the need to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing the procedural rules and granting the third and fourth motions for extensions to file appellant's brief. PetitionerRepublic's appeal presented an exceptional circumstance impressed with public interest which in the Court's discretion must be given due course.

SYLLABUS

1.REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; THE NEED TO DETERMINE ONCE AND FOR ALL WHETHER THE LANDS SUBJECT OF

PETITIONER'S REVERSION EFFORTS ARE FORESHORE LANDS CONSTITUTE GOOD AND SUFFICIENT CAUSE FOR RELAXING PROCEDURAL RULES AND GRANTING THE THIRD AND FOURTH MOTIONS FOR EXTENSION TO FILE APPELLANT'S BRIEF; CASE AT BAR; AN EXCEPTIONAL CIRCUMSTANCE IMPRESSED WITH PUBLIC INTEREST. — The rules of court governing practice and procedure were formulated in order to promote just, speedy, and inexpensive disposition of every action or proceeding without sacrificing substantial justice and equity considerations. The filing of appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an appealmay be dismissed by the Court of Appeals on its own motion or on that of the appellee upon failure of the appellant to serve and file the required number of copies of the brief within the time provided. If the appeal brief cannot be filed on time, extension of time may be allowed provided (1) there is good and sufficient cause, and (2) the motion for extension is filed before the expiration of the time sought to be extended. The court's liberality on extensions notwithstanding, lawyers should never presume that their motions for extension would be granted as a matter of course or for the length of time sought; their concession lies in the sound discretion of the Court exercised in accordance with the attendant circumstances. What constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. The court has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrant or when the purpose of justice requires it. Among the reasons which the court allowed in suspending application of the rules on filing an appeal brief were the following: (1) the cause for the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (2) there was no objection from the State, and the brief was filed within the period requested; (3) no material injury was suffered by the appellee by reason of the delay in filing the brief; (4) the fake lawyer failed to file the brief; (5) appellant was represented by counsel de oficio; (6) petitioner's original counsel died; and (7) the preparation of the consolidated brief involved a comparative study of many exhibits. At the core of the controversy is whether the parcels of land in question are foreshore lands. Foreshore land is a part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. It was defined as "that part (of the land) which is between high and low water and left dry by the flux and reflux of the tides." It is also known as "a strip of land that lies between the high and low water marks and is alternatively wet and dry according to the

flow of the tide." The classification of public lands is a function of the executive branch of government, specifically the director of lands (now the director of the Lands Management Bureau). The decision of the director of lands when approved by the Secretary of the Department of Environment and Natural Resources (DENR) as to questions of fact is conclusive upon the court. The principle behind this ruling is that the subject has been exhaustively weighed and discussed and must therefore be given credit. This doctrine finds no application, however, when the decision of the director of lands is revoked by, or in conflict with that of, the DENR Secretary. There is allegedly a conflict between the findings of the Director of Lands and the DENR, Region V, in the present case. Respondents contend that the Director of Lands found Jose Baritua's land covered by TCT No. 18655, which stemmed from OCT 408 (500), to be "definitely outside of the foreshore area." Petitioner, on the other hand, claims that subsequent investigation of the DENR, Region V, Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence the titles were derived "has the features of a foreshore land." The contradictory views of the Director of Lands and the DENR, Region V, Legazpi City, on the true nature of the land, which contradiction was neither discussed nor resolved by the RTC, cannot be the premise of any conclusive classification of the land involved. The need, therefore, to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing procedural rules and granting the third and fourth motions for extension to file appellant's brief. Petitioner's appeal presents an exceptional circumstance impressed with public interest and must then be given due course. acCTIS

D E C I S I O N

DAVIDE, JR., C.J p:

In this petition for review on certiorari, petitioner seeks to reverse and set aside the (1) Resolution 1 of 30 July 1997 of the Court of Appeals in CA-G.R. CV No. 53972 granting petitioner until 11 August 1997 within which to file its appellant's brief, and the (2) Resolution 2 of 29 September 1997 dismissing petitioner's appeal. The appeal was taken from the Order 3 of Branch I, Regional Trial Court of Legaspi City in Civil Case No. 9176, which petitioner instituted to cancel the title to

some lots issued to private respondents for the reversion thereof to the mass of the public domain.

The facts of the case, as found by the trial court, are as follows:

On September 12, 1917, the late Elias Imperial was issued Original Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of the then Court of First Instance of Albay, covering a parcel of land identified as Lot No. 1113 of the Cadastral Survey of Legazpi, G.L. Cad. Rec. No. 88, containing an area of fifty eight thousand and twenty six square meters (58,026), more or less, situated in Legazpi City.

Original Certificate of Title No. 408 (500) was subdivided and further subdivided resulting in the issuance of several titles, which are now the subject of this case, in the name of the following defendants:

TCT NO.LOT NO.AREA (sq.m.)REGISTERED OWNER

1. 9781113-M-35,853Elias S. Imperial

2. 310541113-M-4-A1,200Felix S. Imperial

3. 310551113-M-4-B4,653Felix S. Imperial

4. 355081113-M-2-A1,335EANCRA CORPORATION

5. 355091113-M-2-B4,518Feliza S. Imperial

6. 352131113-M-1-A1,500Lolita Alcazar and

Salvador Alcazar

 

7. 352141113-M-1-B4,353Miriam S. Imperial

The plaintiff seeks to judicially declare the transfer certificate of titles described in the preceding paragraphs null and void; to order the said defendants to surrender the owner's duplicate of their aforesaid titles to the Register of Deeds of Legazpi City and directing [sic] the latter to cancel them as well as the originals thereof and to declare the reversion of the lots covered by the aforesaid titles to the mass of the public domain.

In support of its stand, the plaintiff contends among others that on letter request addressed to the Honorable Solicitor General dated March 20, 1994, residents of Purok No. 1 and Bgy. 24, Legazpi City, represented by Antonio F. Aguilar, requested that Original Certificate of Title No. 408 (500) in the name of Elias Imperial be cancelled and the land covered thereby reverted back to the State on the ground that the land subject thereof is a foreshore land. Subsequent investigation conducted by the Department of Environment and Natural Resources (DENR), Region V, Legazpi City, upon the request of the Office of the Solicitor General (OSG) disclosed that OCT No. 408 (500), from whence the transfer certificate of titles of the defendants were derived is null and void, and was, thus, acquired to the prejudice of the State, considering that:

a.the parcel of land covered by OCT No. 408 (500) has the features of a foreshore land;

b.natural ground plants such as mangroves and nipas thrive on certain portions of the land in question;

c.some portions of the same land are permanently submerged in seawater even at low tide;

d.some portions of the same land are not anymore inundated by seawater due to the considerable amount of improvements built thereon and the placing of boulders and other land-filling materials by the actual residents therein.

The plaintiff alleged that consequently on the basis of said findings, the Director, Lands Management Bureau recommended to the Director, Lands Services, DENR, the cancellation of OCT No. 406 [sic] (500) as well as its derivative titles through appropriate proceedings.

The plaintiff contended that since the land in question is a foreshore land, the same cannot be registered under the Land Registration Act (Act No. 496, now P.D. No. 1529) in the name of private persons since it is non-alienable and belongs to the public domain, administered and managed by the State for the benefit of the general public.

The plaintiff further contended that under Public Land Act No. 141, as amended, such land shall be disposed of to private parties by lease only and not otherwise as soon as the

President upon recommendation of the Secretary of Agriculture and Natural Resources, now DENR, shall declare that the same are not necessary for public services and are open to disposition.

Within the time for pleading, defendants EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed their answer with cross-claim, while the rest of the defendants, namely, Felix S. Imperial, Jr., Feliza S. Imperial, Elias S. Imperial and Miriam S. Imperial filed a motion to dismiss.

The aforesaid motion to dismiss was anchored on the following grounds: (a) the lands covered by the defendants' transfer certificate of titles which were derived from OCT No. 408 (500) was already the subject of the cadastral proceedings in 1917 and which has been implemented by the issuance of OCT No. 408 (500) under the Torrens system.

The adjudication by the cadastral court is binding against the whole world including the plaintiff since cadastral proceedings are in rem and the government itself through the Director of Lands instituted the proceedings and is a direct and active participant. OCT No. 408 (500) issued under the Torrens system has long become incontrovertible after the lapse of one year from the entry of decree of registration; (b) OCT No. 408 (500) was judicially reconstituted in 1953 in accordance with Republic Act [No.] 26 in the then Court of First Instance of Albay, by Jose R. Imperial Samson in Court Case No. RT-305, entitled, The Director of Lands vs. Jose R. Imperial Samson. The proceedings in the judicial reconstitution in said case No. RT-305 is one in rem and has long become final and gave rise to res judicata and therefore can no longer legally be assailed; (c) the findings of the Director of Lands dated February 22, 1983 [sic] from which no appeal was taken in said administrative investigation that Lot No. 1113, Cad. 27 and a portion of it covered by Lot No. 1113-M-5 in the name of Jose Baritua cannot be considered as part of the shore or foreshore of Albay Gulf. This finding of the Director of Lands has become final and thus constitute res judicata, and finally moving defendants contended that several interrelated cases have been decided related to OCT No. 408 (500), specifically Civil Cases Nos. 6556, 6885, 6999 and 7104, all of the Regional Trial Court, Legazpi City which have been brought by several squatters [sic] family against Jose Baritua attacking the latter's title over Lot No. 1113-M-5 which was derived from OCT No. 408 (500) which cases were all decided in favor of Jose Baritua,

hence, the decisions rendered therein have become final and executory and constitute res judicata.

The plaintiff through the Office of the Solicitor General filed an objection to the motion to dismiss based on the following grounds: (1) the purported decision issued by the Court of First Instance of Albay in G.R. Cad. Rec. No. 88 supposedly resulting in the issuance of OCT No. 408 (500) pursuant to Decree No. 55173 does not constitute res judicata to the present case; (2) the incontestable and indisputable character of a Torrens certificate of title does not apply when the land thus covered, like foreshore land, is not capable of registration; (3) a certificate of title judicially reconstituted from a void certificate of title is, likewise, void; (4) administrative investigation conducted by the Director of Lands is not a bar to the filing of reversion suits; and (5) the filing of the motion to dismiss carries with it the admission of the truth of all material facts of the complaint. 4

After hearing the motion to dismiss, or on 9 August 1996, the trial court dismissed the complaint on the ground that the judgment rendered by the cadastral court in G.R. Cad. Rec. No. 88 and our resolution in the petition to quiet title, G.R. No. 85770, both decreed that the parcel of land covered by OCT No. 408 (500) was not foreshore. The 1917 cadastral proceeding was binding upon the government, which had initiated the same and had been an active and direct participant thereon. Likewise, the 1982 petition to cancel OCT No. 408 (500) filed by the claimants of Lot No. 1113, Cad-47, and resolved by the Director of Lands in his 22 February 1984 letter 5 to the effect that "Original Certificate of Title No. 408 (500) 2113 in the name of Elias Imperial and its derivative title[s] were legally issued" was res judicatato the instant case. Petitioner's contention that the judicially reconstituted certificate of title was void since the land covered by OCT No. 408 (500) was foreshore land was a mere assumption contrary to existing physical facts. The court further considered as forum shopping petitioner's attempt to seek a favorable opinion after it was declared in related cases questioning the title of a certain Jose Baritua, which was also derived from OCT No. 408(500), that the land in question was foreshore.

On 28 October 1996, petitioner filed a notice of appeal.

On 18 April 1997, the Court of Appeals required petitioner to file its appellant's brief within forty-five (45) days from receipt of the notice. Petitioner received said notice ten (10) days later, or on 28 April 1997.

Due to the alleged heavy workload of the solicitor assigned to the case, petitioner moved for an extension of thirty (30) days from 12 June 1997, or until 12 July 1997, within which to file the appellant's brief. The Court of Appeals granted petitioner's motion for extension in a resolution dated 26 June 1997.

On the same ground of continuing heavy pressure of work, petitioner filed, on 12 July 1997, its second motion for extension of thirty (30) days or until 11 August 1997 within which to file the appellant's brief.

On 11 August 1997, petitioner asked for a third extension of thirty (30) days, or until 10 September 1997, within which to file appellant's brief citing the same ground of heavy pressure of work.

Meanwhile, on 30 July 1997, the Court of Appeals issued a resolution, the full text of which reads:

The Office of the Solicitor General is GRANTED a LAST EXTENSION of thirty (30) days from July 12, 1997, or until August 11, 1997, within which to file the oppositor-appellant's brief. Failure to file said brief within the said period will mean dismissal of the appeal. 6

On 12 August 1997, petitioner received a copy of the aforesaid resolution.

On 26 August 1997, petitioner moved to reconsider the 30 July 1997 resolution and, despite the appellate court's warning, reiterated its third motion for extension of another thirty (30) days to file the appellant's brief.

On 10 September 1997, petitioner filed a manifestation and motion requesting another extension of five (5) days, or until 15 September 1997, within which to file appellant's brief, reasoning that the brief, although finalized, was yet to be signed by the Solicitor General.

On 15 September 1997, petitioner filed the required appellant's brief.

On 29 September 1997, the Court of Appeals denied petitioner's motion for reconsideration for lack of merit and sustained its Resolution of 30 July 1997 dismissing the case for failure to file the appellant's brief within the extended period.

Hence, petitioner filed this petition assailing the dismissal of its appeal on purely technical grounds. It alleges that it "has raised meritorious grounds in support of its appeal which, if not allowed to be laid down before the proper Court, will result to the prejudice of, and irreparable injury to, public interest, as the Government would lose its opportunity to recover what it believes to be non-registrable lands of the public domain." Minor lapses in adherence to procedural rules should be condoned in order not to frustrate the ends of justice. Thus, petitioner begs the court's indulgence, enumerating the cases that had occupied its time and attention which prevented the filing of the required brief within the extended periods granted by the Court of Appeals.

 

Petitioner maintains that our resolution of 8 May 1989 in G.R. No. 85770 entitled "Spouses Espiritu v. Baritua" does not constitute res judicata to the instant case because there is no identity of parties, causes of action, and subject matter between the two cases. The Supreme Court case was instituted by Spouses Jose and Maura Espiritu and others against Jose Baritua, while the instant case was filed by no less than the Republic of the Philippines against herein respondents. The former arose from a proceeding to quiet title, while the latter is an action for reversion.

Anent the "unappealed letter-decision" of the Director of Lands, petitioner contends that the same was a "reversible mistake" which did not bar the filing of a reversion suit, as the government is never estopped by the mistakes of its officials or agents.

Petitioner also argues that the 1953 reconstitution case only involved the restoration of the title which was supposed to have been lost or destroyed. The issue as to the nature of the land covered by OCT No. 408 (500) was never delved into by the court. Petitioner insists that the parcels of land in question are foreshore lands, and hence, inalienable and incapable of registration. Consequently, the certificates of title covering said lands are void ab initio.

As regards the trial court's finding of forum shopping, petitioner asserts that the same is without basis. It is the first time that petitioner instituted an action against herein respondents concerning the lands in question.

On the other hand, respondents maintain that the dismissal of the appeal for failure to file brief on time was not an abuse of discretion on the part of the Court of Appeals. Petitioner failed to present special circumstances or good reasons to justify its motions for extension. Moreover, that the parcels of land involved are foreshore was confirmed in the 1917 cadastral and 1953 reconstitution proceedings. This finding attained finality through our resolution in the action for quieting of title (G.R. No. 85770), and was further affirmed through the administrative investigation conducted by the Director of Lands. Thus, the instant case is now barred byres judicata.

We have long observed that the Office of the Solicitor General (OSG) regularly presents motions for extension of time to file pleadings, taking for granted the court's leniency in granting the same. Instead of contributing to the swift administration of justice as an instrumentality of the State, the OSG contributes to needless delays in litigation. Despite the numerous cases that need the OSG's time and attention, equal importance should be allotted to each and every case. Deadlines must be respected and court warnings not taken lightly.

However, after a thorough reexamination of this case, we are of the view that the challenged resolutions should be reconsidered.

The rules of court governing practice and procedure were formulated in order to promote just, speedy, and inexpensive disposition of every action or proceeding without sacrificing substantial justice and equity considerations. 7

The filing of appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an appeal may be dismissed by the Court of Appeals on its own motion or on that of the appellee upon failure of the appellant to serve and file the required number of copies of the brief within the time provided. 8

If the appeal brief cannot be filed on time, extension of time may be allowed provided (1) there is good and sufficient cause, and (2) the motion for extension is filed before the expiration of the time sought to be extended. 9 The court's liberality on extensions notwithstanding,

lawyers should never presume that their motions for extension would be granted as a matter of course or for the length of time sought; their concession lies in the sound discretion of the Court exercised in accordance with the attendant circumstances. 10

What constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. The court has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrant or when the purpose of justice requires it. 11 Among the reasons which the court allowed in suspending application of the rules on filing an appeal brief were the following: (1) the cause for the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; 12 (2) there was no objection from the State, 13 and the brief was filed within the period requested; (3) no material injury was suffered by the appellee by reason of the delay in filing the brief; 14 (4) the fake lawyer failed to file the brief; 15 (5) appellant was represented by counsel de oficio; 16 (6) petitioner's original counsel died; 17 and (7) the preparation of the consolidated brief involved a comparative study of many exhibits. 18

At the core of the controversy is whether the parcels of land in question are foreshore lands. Foreshore land is a part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. It was defined as "that part (of the land) which is between high and low water and left dry by the flux and reflux of the tides." 19 It is also known as "a strip of land that lies between the high and low water marks and is alternatively wet and dry according to the flow of the tide."20

The classification of public lands is a function of the executive branch of government, specifically the director of lands (now the director of the Lands Management Bureau). The decision of the director of lands when approved by the Secretary of the Department of Environment and Natural Resources (DENR) 21 as to questions of fact is conclusive upon the court. The principle behind this ruling is that the subject has been exhaustively weighed and discussed and must therefore be given credit. This doctrine finds no application, however, when the decision of the director of lands is revoked by, or in conflict with that of, the DENR Secretary. 22

There is allegedly a conflict between the findings of the Director of Lands and the DENR, Region V, in the present case. Respondents

contend that the Director of Lands found Jose Baritua's land covered by TCT No. 18655, which stemmed from OCT 408(500), to be "definitely outside of the foreshore area." 23 Petitioner, on the other hand, claims that subsequent investigation of the DENR, Region V, Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence the titles were derived "has the features of a foreshore land." 24 The contradictory views of the Director of Lands and the DENR, Region V, Legazpi City, on the true nature of the land, which contradiction was neither discussed nor resolved by the RTC, cannot be the premise of any conclusive classification of the land involved.

The need, therefore, to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing procedural rules and granting the third and fourth motions for extension to file appellant's brief. Petitioner's appeal presents an exceptional circumstance impressed with public interest and must then be given due course.

WHEREFORE, the instant petition is hereby GRANTED; the Resolutions of 30 July 1997 and 29 September 1997 of the Court of Appeals are SET ASIDE; petitioner's appeal is reinstated; and the instant case is REMANDED to the Court of Appeals for further proceedings.

ORDERED.

Melo, Kapunan and Pardo, JJ., concur.

319 scra 366

FIRST DIVISION

[G.R. No. 130906. February 11, 1999.]

REPUBLIC OF THE PHILIPPINES represented by the DIRECTOR, LANDS MANAGEMENT BUREAU, petitioner, vs. FELIX S. IMPERIALJR., FELIZA S. IMPERIAL, ELIAS S. IMPERIAL, MIRIAM S. IMPERIAL, LOLITA ALCAZAR, SALVADOR ALCAZAR, EANCRA CORPORATION, and the REGISTER OF DEEDS of LEGASPI CITY, respondents.

The Solicitor General for petitioner.

Jose A. Verches and Romeo B. Gonzaga for respondents.

SYNOPSIS

On September 12, 1917, the late Elias Imperial was issued Original Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of then Court of First Instance of Albay. OCT No. 55173 was subdivided and further subdivided resulting in the issuance of several titles, which are now the subjects of herein petition in the name of private respondents. Petitioner Republic of the Philippines filed a case with the trial court to judicially declare the Transfer Certificates of Title (TCT) issued to herein private respondents null and void on the ground that the subject land is foreshore land. Within the time for pleading, private respondents EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed their answer with cross-claim, while the rest, namely, Felix

S. Imperial, Feliza S. Imperial, Elias S. Imperial and Miriam S. Imperialfiled a motion to dismiss. They contended that the adjudication by the cadastral court is binding against the whole world including the Republic since the cadastral proceedings are in rem and the government itself through the Director of Lands instituted the proceedings and was a direct and active participant therein. Petitioner, through the Office of the Solicitor General, filed an objection to the motion to dismiss. After hearing the motion to dismiss, the trial court dismissed the complaint on the ground that the judgment rendered by the cadastral court in G.R. Cad. Rec. No. 88 and the Court's resolution in the petition to quiet title, G.R. 85770, both decreed that the parcel of land covered by OCT No. 408 (500) was not foreshore. Petitioner appealed to the Court of Appeals. The appellate court denied petitioner's motion for reconsideration for lack of merit and for failure to file the appellant's brief within the extended period granted to petitioner. Hence, the present petition. Petitioner Republic assailed the dismissal of its appeal on purely technical grounds. Petitioner also alleged that it has raised meritorious grounds which, if not allowed to be laid down before the proper Court, will result to the prejudice of, and irreparable injury to, public interest, as the Government would lose its opportunity to recover what it believes to be non-registerable lands of the public domain. aDHCEA

The Supreme Court granted the petition. The Court ruled that the question of what constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. It has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrants or when the purpose of justice requires it. In the case at bar, the need to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing the procedural rules and granting the third and fourth motions for extensions to file appellant's brief. PetitionerRepublic's appeal presented an exceptional circumstance impressed with public interest which in the Court's discretion must be given due course.

SYLLABUS

1.REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; THE NEED TO DETERMINE ONCE AND FOR ALL WHETHER THE LANDS SUBJECT OF PETITIONER'S REVERSION EFFORTS ARE FORESHORE LANDS CONSTITUTE GOOD AND SUFFICIENT CAUSE FOR RELAXING

PROCEDURAL RULES AND GRANTING THE THIRD AND FOURTH MOTIONS FOR EXTENSION TO FILE APPELLANT'S BRIEF; CASE AT BAR; AN EXCEPTIONAL CIRCUMSTANCE IMPRESSED WITH PUBLIC INTEREST. — The rules of court governing practice and procedure were formulated in order to promote just, speedy, and inexpensive disposition of every action or proceeding without sacrificing substantial justice and equity considerations. The filing of appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an appealmay be dismissed by the Court of Appeals on its own motion or on that of the appellee upon failure of the appellant to serve and file the required number of copies of the brief within the time provided. If the appeal brief cannot be filed on time, extension of time may be allowed provided (1) there is good and sufficient cause, and (2) the motion for extension is filed before the expiration of the time sought to be extended. The court's liberality on extensions notwithstanding, lawyers should never presume that their motions for extension would be granted as a matter of course or for the length of time sought; their concession lies in the sound discretion of the Court exercised in accordance with the attendant circumstances. What constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. The court has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrant or when the purpose of justice requires it. Among the reasons which the court allowed in suspending application of the rules on filing an appeal brief were the following: (1) the cause for the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (2) there was no objection from the State, and the brief was filed within the period requested; (3) no material injury was suffered by the appellee by reason of the delay in filing the brief; (4) the fake lawyer failed to file the brief; (5) appellant was represented by counsel de oficio; (6) petitioner's original counsel died; and (7) the preparation of the consolidated brief involved a comparative study of many exhibits. At the core of the controversy is whether the parcels of land in question are foreshore lands. Foreshore land is a part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. It was defined as "that part (of the land) which is between high and low water and left dry by the flux and reflux of the tides." It is also known as "a strip of land that lies between the high and low water marks and is alternatively wet and dry according to the flow of the tide." The classification of public lands is a function of the executive branch of government, specifically the director of lands (now

the director of the Lands Management Bureau). The decision of the director of lands when approved by the Secretary of the Department of Environment and Natural Resources (DENR) as to questions of fact is conclusive upon the court. The principle behind this ruling is that the subject has been exhaustively weighed and discussed and must therefore be given credit. This doctrine finds no application, however, when the decision of the director of lands is revoked by, or in conflict with that of, the DENR Secretary. There is allegedly a conflict between the findings of the Director of Lands and the DENR, Region V, in the present case. Respondents contend that the Director of Lands found Jose Baritua's land covered by TCT No. 18655, which stemmed from OCT 408 (500), to be "definitely outside of the foreshore area." Petitioner, on the other hand, claims that subsequent investigation of the DENR, Region V, Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence the titles were derived "has the features of a foreshore land." The contradictory views of the Director of Lands and the DENR, Region V, Legazpi City, on the true nature of the land, which contradiction was neither discussed nor resolved by the RTC, cannot be the premise of any conclusive classification of the land involved. The need, therefore, to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing procedural rules and granting the third and fourth motions for extension to file appellant's brief. Petitioner's appeal presents an exceptional circumstance impressed with public interest and must then be given due course. acCTIS

D E C I S I O N

DAVIDE, JR., C.J p:

In this petition for review on certiorari, petitioner seeks to reverse and set aside the (1) Resolution 1 of 30 July 1997 of the Court of Appeals in CA-G.R. CV No. 53972 granting petitioner until 11 August 1997 within which to file its appellant's brief, and the (2) Resolution 2 of 29 September 1997 dismissing petitioner's appeal. The appeal was taken from the Order 3 of Branch I, Regional Trial Court of Legaspi City in Civil Case No. 9176, which petitioner instituted to cancel the title to some lots issued to private respondents for the reversion thereof to the mass of the public domain.

The facts of the case, as found by the trial court, are as follows:

On September 12, 1917, the late Elias Imperial was issued Original Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of the then Court of First Instance of Albay, covering a parcel of land identified as Lot No. 1113 of the Cadastral Survey of Legazpi, G.L. Cad. Rec. No. 88, containing an area of fifty eight thousand and twenty six square meters (58,026), more or less, situated in Legazpi City.

Original Certificate of Title No. 408 (500) was subdivided and further subdivided resulting in the issuance of several titles, which are now the subject of this case, in the name of the following defendants:

TCT NO.LOT NO.AREA (sq.m.)REGISTERED OWNER

1. 9781113-M-35,853Elias S. Imperial

2. 310541113-M-4-A1,200Felix S. Imperial

3. 310551113-M-4-B4,653Felix S. Imperial

4. 355081113-M-2-A1,335EANCRA CORPORATION

5. 355091113-M-2-B4,518Feliza S. Imperial

6. 352131113-M-1-A1,500Lolita Alcazar and

Salvador Alcazar

 

7. 352141113-M-1-B4,353Miriam S. Imperial

The plaintiff seeks to judicially declare the transfer certificate of titles described in the preceding paragraphs null and void; to order the said defendants to surrender the owner's duplicate of their aforesaid titles to the Register of Deeds of Legazpi City and directing [sic] the latter to cancel them as well as the originals thereof and to declare the reversion of the lots covered by the aforesaid titles to the mass of the public domain.

In support of its stand, the plaintiff contends among others that on letter request addressed to the Honorable Solicitor General dated March 20, 1994, residents of Purok No. 1 and Bgy. 24,

Legazpi City, represented by Antonio F. Aguilar, requested that Original Certificate of Title No. 408 (500) in the name of Elias Imperial be cancelled and the land covered thereby reverted back to the State on the ground that the land subject thereof is a foreshore land. Subsequent investigation conducted by the Department of Environment and Natural Resources (DENR), Region V, Legazpi City, upon the request of the Office of the Solicitor General (OSG) disclosed that OCT No. 408 (500), from whence the transfer certificate of titles of the defendants were derived is null and void, and was, thus, acquired to the prejudice of the State, considering that:

a.the parcel of land covered by OCT No. 408 (500) has the features of a foreshore land;

b.natural ground plants such as mangroves and nipas thrive on certain portions of the land in question;

c.some portions of the same land are permanently submerged in seawater even at low tide;

d.some portions of the same land are not anymore inundated by seawater due to the considerable amount of improvements built thereon and the placing of boulders and other land-filling materials by the actual residents therein.

The plaintiff alleged that consequently on the basis of said findings, the Director, Lands Management Bureau recommended to the Director, Lands Services, DENR, the cancellation of OCT No. 406 [sic] (500) as well as its derivative titles through appropriate proceedings.

The plaintiff contended that since the land in question is a foreshore land, the same cannot be registered under the Land Registration Act (Act No. 496, now P.D. No. 1529) in the name of private persons since it is non-alienable and belongs to the public domain, administered and managed by the State for the benefit of the general public.

The plaintiff further contended that under Public Land Act No. 141, as amended, such land shall be disposed of to private parties by lease only and not otherwise as soon as the President upon recommendation of the Secretary of Agriculture and Natural Resources, now DENR, shall declare that the same

are not necessary for public services and are open to disposition.

Within the time for pleading, defendants EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed their answer with cross-claim, while the rest of the defendants, namely, Felix S. Imperial, Jr., Feliza S. Imperial, Elias S. Imperial and Miriam S. Imperial filed a motion to dismiss.

The aforesaid motion to dismiss was anchored on the following grounds: (a) the lands covered by the defendants' transfer certificate of titles which were derived from OCT No. 408 (500) was already the subject of the cadastral proceedings in 1917 and which has been implemented by the issuance of OCT No. 408 (500) under the Torrens system.

The adjudication by the cadastral court is binding against the whole world including the plaintiff since cadastral proceedings are in rem and the government itself through the Director of Lands instituted the proceedings and is a direct and active participant. OCT No. 408 (500) issued under the Torrens system has long become incontrovertible after the lapse of one year from the entry of decree of registration; (b) OCT No. 408 (500) was judicially reconstituted in 1953 in accordance with Republic Act [No.] 26 in the then Court of First Instance of Albay, by Jose R. Imperial Samson in Court Case No. RT-305, entitled, The Director of Lands vs. Jose R. Imperial Samson. The proceedings in the judicial reconstitution in said case No. RT-305 is one in rem and has long become final and gave rise to res judicata and therefore can no longer legally be assailed; (c) the findings of the Director of Lands dated February 22, 1983 [sic] from which no appeal was taken in said administrative investigation that Lot No. 1113, Cad. 27 and a portion of it covered by Lot No. 1113-M-5 in the name of Jose Baritua cannot be considered as part of the shore or foreshore of Albay Gulf. This finding of the Director of Lands has become final and thus constitute res judicata, and finally moving defendants contended that several interrelated cases have been decided related to OCT No. 408 (500), specifically Civil Cases Nos. 6556, 6885, 6999 and 7104, all of the Regional Trial Court, Legazpi City which have been brought by several squatters [sic] family against Jose Baritua attacking the latter's title over Lot No. 1113-M-5 which was derived from OCT No. 408 (500) which cases were all decided in favor of Jose Baritua, hence, the decisions rendered therein have become final and executory and constitute res judicata.

The plaintiff through the Office of the Solicitor General filed an objection to the motion to dismiss based on the following grounds: (1) the purported decision issued by the Court of First Instance of Albay in G.R. Cad. Rec. No. 88 supposedly resulting in the issuance of OCT No. 408 (500) pursuant to Decree No. 55173 does not constitute res judicata to the present case; (2) the incontestable and indisputable character of a Torrens certificate of title does not apply when the land thus covered, like foreshore land, is not capable of registration; (3) a certificate of title judicially reconstituted from a void certificate of title is, likewise, void; (4) administrative investigation conducted by the Director of Lands is not a bar to the filing of reversion suits; and (5) the filing of the motion to dismiss carries with it the admission of the truth of all material facts of the complaint. 4

After hearing the motion to dismiss, or on 9 August 1996, the trial court dismissed the complaint on the ground that the judgment rendered by the cadastral court in G.R. Cad. Rec. No. 88 and our resolution in the petition to quiet title, G.R. No. 85770, both decreed that the parcel of land covered by OCT No. 408 (500) was not foreshore. The 1917 cadastral proceeding was binding upon the government, which had initiated the same and had been an active and direct participant thereon. Likewise, the 1982 petition to cancel OCT No. 408 (500) filed by the claimants of Lot No. 1113, Cad-47, and resolved by the Director of Lands in his 22 February 1984 letter 5 to the effect that "Original Certificate of Title No. 408 (500) 2113 in the name of Elias Imperial and its derivative title[s] were legally issued" was res judicatato the instant case. Petitioner's contention that the judicially reconstituted certificate of title was void since the land covered by OCT No. 408 (500) was foreshore land was a mere assumption contrary to existing physical facts. The court further considered as forum shopping petitioner's attempt to seek a favorable opinion after it was declared in related cases questioning the title of a certain Jose Baritua, which was also derived from OCT No. 408(500), that the land in question was foreshore.

On 28 October 1996, petitioner filed a notice of appeal.

On 18 April 1997, the Court of Appeals required petitioner to file its appellant's brief within forty-five (45) days from receipt of the notice. Petitioner received said notice ten (10) days later, or on 28 April 1997.

Due to the alleged heavy workload of the solicitor assigned to the case, petitioner moved for an extension of thirty (30) days from 12 June 1997, or until 12 July 1997, within which to file the appellant's brief. The Court of Appeals granted petitioner's motion for extension in a resolution dated 26 June 1997.

On the same ground of continuing heavy pressure of work, petitioner filed, on 12 July 1997, its second motion for extension of thirty (30) days or until 11 August 1997 within which to file the appellant's brief.

On 11 August 1997, petitioner asked for a third extension of thirty (30) days, or until 10 September 1997, within which to file appellant's brief citing the same ground of heavy pressure of work.

Meanwhile, on 30 July 1997, the Court of Appeals issued a resolution, the full text of which reads:

The Office of the Solicitor General is GRANTED a LAST EXTENSION of thirty (30) days from July 12, 1997, or until August 11, 1997, within which to file the oppositor-appellant's brief. Failure to file said brief within the said period will mean dismissal of the appeal. 6

On 12 August 1997, petitioner received a copy of the aforesaid resolution.

On 26 August 1997, petitioner moved to reconsider the 30 July 1997 resolution and, despite the appellate court's warning, reiterated its third motion for extension of another thirty (30) days to file the appellant's brief.

On 10 September 1997, petitioner filed a manifestation and motion requesting another extension of five (5) days, or until 15 September 1997, within which to file appellant's brief, reasoning that the brief, although finalized, was yet to be signed by the Solicitor General.

On 15 September 1997, petitioner filed the required appellant's brief.

On 29 September 1997, the Court of Appeals denied petitioner's motion for reconsideration for lack of merit and sustained its Resolution of 30 July 1997 dismissing the case for failure to file the appellant's brief within the extended period.

Hence, petitioner filed this petition assailing the dismissal of its appeal on purely technical grounds. It alleges that it "has raised meritorious grounds in support of its appeal which, if not allowed to be laid down before the proper Court, will result to the prejudice of, and irreparable injury to, public interest, as the Government would lose its opportunity to recover what it believes to be non-registrable lands of the public domain." Minor lapses in adherence to procedural rules should be condoned in order not to frustrate the ends of justice. Thus, petitioner begs the court's indulgence, enumerating the cases that had occupied its time and attention which prevented the filing of the required brief within the extended periods granted by the Court of Appeals.

 

Petitioner maintains that our resolution of 8 May 1989 in G.R. No. 85770 entitled "Spouses Espiritu v. Baritua" does not constitute res judicata to the instant case because there is no identity of parties, causes of action, and subject matter between the two cases. The Supreme Court case was instituted by Spouses Jose and Maura Espiritu and others against Jose Baritua, while the instant case was filed by no less than the Republic of the Philippines against herein respondents. The former arose from a proceeding to quiet title, while the latter is an action for reversion.

Anent the "unappealed letter-decision" of the Director of Lands, petitioner contends that the same was a "reversible mistake" which did not bar the filing of a reversion suit, as the government is never estopped by the mistakes of its officials or agents.

Petitioner also argues that the 1953 reconstitution case only involved the restoration of the title which was supposed to have been lost or destroyed. The issue as to the nature of the land covered by OCT No. 408 (500) was never delved into by the court. Petitioner insists that the parcels of land in question are foreshore lands, and hence, inalienable and incapable of registration. Consequently, the certificates of title covering said lands are void ab initio.

As regards the trial court's finding of forum shopping, petitioner asserts that the same is without basis. It is the first time that petitioner instituted an action against herein respondents concerning the lands in question.

On the other hand, respondents maintain that the dismissal of the appeal for failure to file brief on time was not an abuse of discretion on the part of the Court of Appeals. Petitioner failed to present special circumstances or good reasons to justify its motions for extension. Moreover, that the parcels of land involved are foreshore was confirmed in the 1917 cadastral and 1953 reconstitution proceedings. This finding attained finality through our resolution in the action for quieting of title (G.R. No. 85770), and was further affirmed through the administrative investigation conducted by the Director of Lands. Thus, the instant case is now barred byres judicata.

We have long observed that the Office of the Solicitor General (OSG) regularly presents motions for extension of time to file pleadings, taking for granted the court's leniency in granting the same. Instead of contributing to the swift administration of justice as an instrumentality of the State, the OSG contributes to needless delays in litigation. Despite the numerous cases that need the OSG's time and attention, equal importance should be allotted to each and every case. Deadlines must be respected and court warnings not taken lightly.

However, after a thorough reexamination of this case, we are of the view that the challenged resolutions should be reconsidered.

The rules of court governing practice and procedure were formulated in order to promote just, speedy, and inexpensive disposition of every action or proceeding without sacrificing substantial justice and equity considerations. 7

The filing of appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an appeal may be dismissed by the Court of Appeals on its own motion or on that of the appellee upon failure of the appellant to serve and file the required number of copies of the brief within the time provided. 8

If the appeal brief cannot be filed on time, extension of time may be allowed provided (1) there is good and sufficient cause, and (2) the motion for extension is filed before the expiration of the time sought to be extended. 9 The court's liberality on extensions notwithstanding, lawyers should never presume that their motions for extension would be granted as a matter of course or for the length of time sought; their concession lies in the sound discretion of the Court exercised in accordance with the attendant circumstances. 10

What constitutes good and sufficient cause that will merit suspension of the rules is discretionary upon the court. The court has the power to relax or suspend the rules or to except a case from their operation when compelling reasons so warrant or when the purpose of justice requires it. 11 Among the reasons which the court allowed in suspending application of the rules on filing an appeal brief were the following: (1) the cause for the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; 12 (2) there was no objection from the State, 13 and the brief was filed within the period requested; (3) no material injury was suffered by the appellee by reason of the delay in filing the brief; 14 (4) the fake lawyer failed to file the brief; 15 (5) appellant was represented by counsel de oficio; 16 (6) petitioner's original counsel died; 17 and (7) the preparation of the consolidated brief involved a comparative study of many exhibits. 18

At the core of the controversy is whether the parcels of land in question are foreshore lands. Foreshore land is a part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. It was defined as "that part (of the land) which is between high and low water and left dry by the flux and reflux of the tides." 19 It is also known as "a strip of land that lies between the high and low water marks and is alternatively wet and dry according to the flow of the tide."20

The classification of public lands is a function of the executive branch of government, specifically the director of lands (now the director of the Lands Management Bureau). The decision of the director of lands when approved by the Secretary of the Department of Environment and Natural Resources (DENR) 21 as to questions of fact is conclusive upon the court. The principle behind this ruling is that the subject has been exhaustively weighed and discussed and must therefore be given credit. This doctrine finds no application, however, when the decision of the director of lands is revoked by, or in conflict with that of, the DENR Secretary. 22

There is allegedly a conflict between the findings of the Director of Lands and the DENR, Region V, in the present case. Respondents contend that the Director of Lands found Jose Baritua's land covered by TCT No. 18655, which stemmed from OCT 408(500), to be "definitely outside of the foreshore area." 23 Petitioner, on the other hand, claims that subsequent investigation of the DENR, Region V, Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence the

titles were derived "has the features of a foreshore land." 24 The contradictory views of the Director of Lands and the DENR, Region V, Legazpi City, on the true nature of the land, which contradiction was neither discussed nor resolved by the RTC, cannot be the premise of any conclusive classification of the land involved.

The need, therefore, to determine once and for all whether the lands subject of petitioner's reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing procedural rules and granting the third and fourth motions for extension to file appellant's brief. Petitioner's appeal presents an exceptional circumstance impressed with public interest and must then be given due course.

WHEREFORE, the instant petition is hereby GRANTED; the Resolutions of 30 July 1997 and 29 September 1997 of the Court of Appeals are SET ASIDE; petitioner's appeal is reinstated; and the instant case is REMANDED to the Court of Appeals for further proceedings.

ORDERED.

Melo, Kapunan and Pardo, JJ., concur.

319 scra 180

THIRD DIVISION

[G.R. No. 109307. November 25, 1999.]

TEODORA SALTIGA DE ROMERO, PRESENTACION ROMERO MAMA, Represented by SABDULLAH MAMA, LUCITA ROMERO PACAS, GLORIOSA ROMERO RASONABLE and MINDALINA ROMERO NUENAY, petitioners, vs. THE HONORABLE COURT OF APPEALS, THE HONORABLE SEVENTEENTH DIVISION and LUTERO ROMERO and NATIVIDAD ROMERO and THE DEVELOPMENT BANK OF THE PHILIPPINES, ILIGAN BRANCH, ILIGAN CITY and THE REGISTER OF DEEDS OF LANAO DEL NORTE, respondents.

Jesus S. Anonat for petitioners.

Wilson, C. Namocot for respondent DBP.

Virgilio P. Alconera for private respondents.

SYNOPSIS

Eugenio Romero applied for a homestead patent for a 12-hectare land. The same was, however, disapproved because he had previously applied for the maximum allowable area of 24 hectares. He therefore placed the application in the name of his eldest son Eutiquio, allegedly in trust for all the children of Eugenio. When Eutiquio got married, the application was transferred to his brother Lutero, and when Lutero got married, he relinquished the application in favor of his younger brother Ricardo. It was, however, Lutero who was issued a homestead patent in 1967. In 1969, Lutero was allegedly forced by her three sisters and their husbands to sign three affidavits of conveyance in their favor. In 1975, Lutero obtained a loan from the Development Bank of the

Philippines and mortgaged the land as collateral for the loan. Thereafter, through a letter Lutero asked his sister to vacate the land in question. After a few days, his sisters and their husbands filed a civil case against Lutero. However, the Regional Trial Court (RTC) rendered a decision favoring Lutero instead. The three affidavits of conveyances were declared null and void, possession of the land in question were ordered to be surrendered to Lutero and the tax declarations in the names of the plaintiffs therein were ordered cancelled by the trial court. Not satisfied with the decision of the RTC, petitioners appealed to the Court of Appeals, which affirmed the decision of the RTC in favor of Lutero. Hence, this petition. The core issue herein is whether Lutero acquired the lot in trust for the benefit of the heirs of Eugenio.

According to the Supreme Court, the petitioners did not present any evidence to prove the existence of the trust. The alleged agreement that Lutero would merely hold the lot in trust for the benefit of Eugenio's heirs was not proven. The said trust would be of doubtful validity considering that it would promote a direct violation of the provision of the Public Land Act as regards the acquisition of a homestead patent. As to the three affidavits of conveyances, the Court of Appeals correctly declared them void for being violative of CA 141, which prohibits the alienation of a homestead within five years from the issuance of the patent. The Supreme Court denied this petition.

SYLLABUS

1.CIVIL LAW; SPECIAL CONTRACTS; TRUSTS; DEFINED. — "A trust is the legal relationship between a person having an equitable ownership in property and' another person owning the legal title to such property, the equitable ownership of the former entitling him to performance of certain duties and the exercise of certain powers by the latter."

2.ID.; ID.; ID.; EXPRESS AND IMPLIED; DEFINED. — Trust relations between parties may be express or implied. Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words evidencing an intention to create a trust. Implied trusts are those which without being express, are deducible from the nature of the transaction as matters of intent, or which are superinduced on the transaction by operation of law as a matter of equity, independently of the particular intention of the parties.

3.ID.; ID.; ID.; RESULTING DISTINGUISHED FROM CONSTRUCTIVE. — Implied trusts may either be resulting or constructive trusts, both coming into by operation of law. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, constructive trusts are created by construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or hold the legal right to property, which he ought not, in equity and good conscience, to hold. However, it has been held that a trust will not be created when, for the purpose of evading the law prohibiting one from taking or holding real property, he takes a conveyance thereof in the name of a third person.

4.ID.; PUBLIC LAND ACT (CA 141); HOMESTEAD; APPLICANT, REQUIRED TO OCCUPY AND CULTIVATE THE LAND FOR HIS OWN BENEFIT; NOT PRESENT IN CASE AT BAR. — A homestead applicant is required by law to occupy and cultivate the land for his own benefit, and not for the benefit of someone else. Furthermore, under Section 12 of The Public Land Act (CA 141), a person is allowed to enter a homestead not exceeding twenty-four (24) hectares. In the present case, it is not disputed that EUGENIO already applied for a homestead patent for twenty-four (24) hectares of land and was disqualified from applying for an additional twelve (12) hectares. If the Court upholds the theory of the petitioners and rule that a trust in fact existed, it would be abetting a circumvention of the statutory prohibitions stated under the Public Land Act. It therefore found no legal or factual basis to sustain the contention of the petitioner that LUTERO merely held Lot 23 Pls-35 in trust for the benefit of the heirs of EUGENIO.

5.ID.; ID.; ID.; PROHIBITS ALIENATION WITHIN FIVE YEARS FROM THE ISSUANCE OF THE PATENT; APPLICATION IN CASE AT BAR. — CA 141 prohibits the alienation of a homestead within five years from the issuance of the patent and grant under Section 118 which states: "Section 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from

and after the date of issuance of the patent and grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations. No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds." The conveyance of a homestead before the expiration of the five-year prohibitory period following the issuance of the homestead patent is null and void and cannot be enforced, for it is not within the competence of any citizen to barter away that public policy by law seeks to preserve."' In the present case, since the sales were made on January 17, 1969 or less than two years after the issuance of LUTERO's title to the homestead on April 7, 1967 the sales are clearly void.

D E C I S I O N

GONZAGA-REYES, J p:

Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals 1 in CA-G.R. CV No. 33164 entitled TEODORA SALTIGA DE ROMERO ET AL. vs. LUCERO ROMERO ET AL. and LUTERO ROMERO, ET AL. vs. SPOUSES MELITON PACAS, ET AL. involving two civil cases which were tried jointly by the Regional Trial Court of Lanao Del Norte, Branch 7, namely: LexLib

1.Civil Case No. 591, which was filed by herein Petitioners Teodora Saltiga De Romero, Presentacion Romero-Mama (PRESENTACION), Lucita Romero-Pacas (LUCITA), Gloriosa Romero-Rasonable (GLORIOSA), and Mindalina Romero-Nuenay (MINDALINA) against Lutero Romero (LUTERO) and the Development Bank of the Philippines (DBP) for reconveyance of their share in a parcel of land, Lot 23 Pls-35, titled in the name of LUTERO; and

2.Civil Case No. 1056, which was filed by LUTERO and his wife Natividad S. Romero against LUCITA and her

husband Meliton Pacas, PRESENTACION and her husband Sabdullah Mama and GLORIOSA and her husband Dionisio Rasonable for annulment of three affidavits wherein LUTERO supposedly sold to them shares over Lot No. 23 Pls-35.

The facts as found by the Court of Appeals are as follows:

"From the evidence presented by the appellants, it appears that on December 12, 1939 Eugenio Romero bought from spouses Celedonio Jaug and Sofia Macan the latter's 'rights, interest, participation, ownership and possession' of 12 hectares of land. The land in question was then public land. When Eugenio Romero applied for a homestead patent for said land, the same was disapproved by the Bureau of Lands because said Romero already had applied for a homestead patent for 24 hectares and was disqualified from owning the additional 12 hectares.

Eugenio Romero placed the application in the name of his eldest son, Eutiquio Romero, allegedly in trust for all the children of Eugenio. When Eutiquio got married and had children, his brothers and sisters got worried that his heirs may claim the land so the application was transferred in the name of Lutero Romero, the second son of Eugenio who was then still single. When Lutero in turn got married, he relinquished the application in favor of his younger brother Ricardo through an instrument dated July 5, 1952.

The spouses Eugenio Romero and Teodora Saltiga had nine (9) children. Other than the three (3) sons aforenamed, they had six (6) daughters, namely Generosa, Diosdada, Mindalina, Lucita, Presentacion and Gloriosa.

 

Eugenio Romero died sometime in 1948. In 1961 his widow Teodora caused the land in question to be subdivided among six (6) of her children, the other three (3) having already been given their shares in the other properties of the Romero spouses. The twelve (12) hectares were supposedly divided equally among Lutero, Ricardo, Mindalina, Lucita, Presentacion, and Gloriosa who all got about two (2) hectares each. Subsequently, however, Ricardo conveyed his share to Lucita and Gloriosa who therefore had 3 hectares each. On the other

hand, Mindalina left her share in the care of her mother Teodora and her sister Presentacion because she left for Davao City. Lutero later requested that he be allowed to farm this share of Mindalina, thus he occupied a total of 4 hectares with the consent of his mother Teodora and sister Presentacion.

The appellants further claimed that after the partition, they had been in occupancy of their respective shares through their tenants.

However, appellee Lutero Romero presented evidence to the effect that sometime in 1969 a policeman picked him up and brought him to the office of Mayor Pablito Abragan of Kapatagan where he found his mother Teodora and his three (3) sisters Gloriosa, Presentacion and Lucita and the respective husbands of the latter two. He testified that when he arrived at the office, he was presented three (3) affidavits for his signature. Said affidavits were to the effect that he sold three (3) hectares each out of the 12 hectares of land to his sister Gloriosa, his brother-in-law Sabdullah Mama married to Presentacion Romero, and to Meliton Pacas married to Lucita Romero for a consideration of P3,000.00 each.

Appellee Lutero Romero testified that he told the mayor that he was not selling the land and that he could not do so because the five-year period had not yet elapsed but the mayor told him to just sign the affidavits because after five (5) years his sisters will get the land and pay for them and that if they would not pay, the mayor will take steps to return the land personally to him. Lutero stated that he has not been paid for the land by his sisters.

Lutero Romeo claimed that as early as 1940-1941 he had already been in occupancy of the 12 hectares in question when it was shown to him by this father who owned the adjoining parcel; and that the said land had been titled in his name even while his father Eugenio was still alive. Indeed it appears that the title to the property, O.C.T No. P-2,261, had been issued to Lutero Romero as early as April 26, 1967, after the homestead patent was issued in his favor on April 7, 1967. He said that his three (3) sisters occupied portions of the property only in 1969, after he was forced to sign the affidavits by Mayor Abragan.

Lutero Romero had thereafter repudiated the three (3) affidavits on August 12, 1974. Because of this, estafa charges

were filed against him by the three (3) parties concerned but said charges were dismissed.

It further appears that Lutero Romero obtained a loan from the Development Bank of the Philippines on December 3, 1975 and mortgaged the land in question as collateral for said loan. Appellants claim that only then did they know that the land had been titled in the name of Lutero Romero. Thereafter, through a letter dated August 2, 1976, Lutero Romero asked his sisters to vacate the land in question.

A few days thereafter, or on August 14, 1976, Civil Case No. 591 was filed against Lutero Romero." 2

On March 11, 1991, the RTC rendered a decision the dispositive portion of which reads: llcd

"WHEREFORE, judgment is hereby rendered:

1.Declaring the three (3) affidavits of sale as null and void and no effect;

2.Ordering the plaintiffs in Civil Case No. 591 and defendants in Civil Case No. 1056, namely Sabdullah Mama, Presentation Romero-Mama, Gloriosa Romero Rasonable, Meliton Pacas and Lucita Romero to surrender and to deliver to Lutero Romero the possession of all the portions of Lot 23, Pls-35;

3.Ordering the Municipal Assessor of Kapatagan, Lanao del Norte to cancel Tax Declaration Nos. 6029, 6030, 6031 and 6032 in the names of defendants (Civil Case No. 1056) Sabdullah Mama, Gloriosa Rasonable, plaintiff Lutero Romero and defendant Meliton Pacas and to restore Tax Declaration No. 1347 in the name of Lutero Romero for the entire Lot 23, Pls-35;

4.Ordering the defendants (Civil Case No. 1056) to pay to the plaintiff the sum of TEN THOUSAND (P10,000.00) PESOS as actual damages;

5.Ordering the defendants (Civil Case no. 1056) to pay to the plaintiffs the sum of TEN THOUSAND (P10,000.00) Pesos as moral damages; and

6.Ordering the defendants (Civil Case No. 1056) to pay the cost of this proceeding.

SO ORDERED." 3

Not satisfied with the decision of the RTC, petitioners appealed to the Court of Appeals, which affirmed the decision of the RTC in favor of LUTERO. Hence this petition where the petitioners assign the following issues:

"WHETHER OR NOT LUTERO ROMERO IS A TRUSTEE OF LOT 23 PLS-35 FOR THE BENEFIT OF THE HEIRS OF EUGENIO ROMERO.

WHETHER OR NOT WITH OR WITHOUT SAID THREE (3) AFFIDAVITS IN QUESTION PETITIONERS' VALID CAUSE OF ACTION CAN STAND OR NOT." 4

DBP filed its comment to the petition and seeks the dismissal of the case against it considering that the agricultural loan in favor of LUTERO has been paid in full. DBP maintains that since the mortgage was already cancelled, petitioners have no cause of action against it. 5

Petitioners contend that LUTERO merely holds Lot 23 Pls-35 in trust for the benefit of the heirs of his father EUGENIO since it was actually EUGENIO who first applied for the homestead but considering that EUGENIO was already granted a homestead, the application had to be placed in the name of his eldest son EUTIQUIO. The application was subsequently transferred to the name of LUTERO who later transferred the application in the name of Ricardo Romero (RICARDO), his younger brother. To support their contention, petitioners point to the testimony of LUTERO during the investigation of the homestead application of RICARDO to the effect that he transferred and relinquished his rights as trustee of the lot to RICARDO. The fact that LUTERO was able to cause the issuance of the Homestead title of the land in question under his name clearly shows that LUTERO employed fraud in procuring the same. Consequently, herein petitioners are entitled to recover the said lot. Petitioners also rely on the three affidavits of sale executed by LUTERO wherein he sold portions of Lot 23 Pls-35 in favor of GLORIOSA, PRESENTACION and her husband and LUCITA and her husband. They claim that pursuant to these three affidavits, LUTERO no longer has a claim over Lot 23 Pls-35. 6

On the other hand, respondents maintain that LUTERO did not commit fraud in the titling of Lot 23 Pls-35. They allege that the petitioners failed to prove this during the trial of the case. On the contrary, LUTERO complied with all the requirements of the law when he successfully obtained title to the lot. Respondents also deny that LUTERO held the land in trust for the benefit of the heirs of his father EUGENIO. According to them, this violates the provisions of The Public Land Act. Even assuming that a trust in fact was created, such is null and void for being contrary to law. Finally, respondents maintain that the three affidavits of sale executed in favor of the petitioners are void since they were simulated and not supported by any consideration; and they were executed within the five-year prohibitory period from the issuance of the patent. 7

The Court of Appeals ruled in favor of LUTERO, stating:

"Appellants herein maintain that the land was held by Lutero Romero, only in trust for his brothers and sisters because the land belonged to their father Eugenio Romero. We do not find any basis for this posture. Eugenio Romero was never the owner of the land in question because all he bought from the Jaug spouses were the alleged rights and interests, if there was any, to the said land which was then part of the public domain. The Jaugs could not have sold said land to Eugenio as they did not own it. Eugenio Romero was not granted, and could not have been granted, a patent for said land because he was disqualified by virtue of the fact that he already had applied for the maximum limit of 24 hectares to which he was entitled. The land in question could not therefore have passed on from him to his children. cdll

On the other hand, Lutero Romero applied for a homestead patent over the land in question and his application was duly approved. The appellants have not established that there was any fraud committed in this application. In fact it appears that there was even a hearing conducted by the Bureau of Lands on the application because a certain Potenciano Jaug had been contesting the application. Under the presumption of law, that official duty has been regularly performed, there appears to be no ground to question the grant of the patent to Lutero Romero in 1967.

His sisters Gloriosa, Presentacion, and Lucita apparently recognized Lutero's ownership of the property when in 1969 they sought the help of the mayor of Kapatagan to convince

Lutero to execute affidavits of sale in their favor. However, Lutero could not have sold any portion of the property to them. Any such sale executed within five (5) year period from the date of the issuance of the title is null and void even if the sale was made by the homesteader in favor of his/her descendants (Gayapano vs. IAC, 199 SCRA 309). Furthermore, it has been established that the three supposed vendees never paid any consideration for the supposed sale of the lots they occupied.

We agree with the observation of the appellee that under the theory of the appellants, the latter had sought to circumvent the law. It would appear that because Eugenio Romero could not legally qualify to have the land in question, he had allegedly sought to place the application in another's name with the same intention to own it through another. This certainly cannot be countenanced." 8

 

We find no reversible error committed by the Court of Appeals.

The core issue in this case is whether LUTERO acquired Lot 23 Pls-35 in trust for the benefit of the heirs of EUGENIO.

"A trust is the legal relationship between a person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to performance of certain duties and the exercise of certain powers by the latter." 9 Trust relations between parties may be express or implied. 10 Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words evidencing an intention to create a trust. 11 Implied trusts are those which without being express, are deducible from the nature of the transaction as matters of intent, or which are superinduced on the transaction by operation of law as a matter of equity, independently of the particular intention of the parties. 12 Implied trusts may either be resulting or constructive trusts, both coming into by operation of law.

Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his

legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or hold the legal right to property, which he ought not, in equity and good conscience, to hold. 13

However, it has been held that a trust will not be created when, for the purpose of evading the law prohibiting one from taking or holding real property, he takes a conveyance thereof in the name of a third person. 14

In the present case, the petitioners did not present any evidence to prove the existence of the trust. Petitioners merely alleged that LUTERO, through fraudulent means, had the title of Lot 23 Pls-35 issued in his name contrary to the alleged agreement between the family that LUTERO would merely hold the lot in trust for the benefit of EUGENIO's heirs. The alleged agreement was not proven and even assuming that the petitioners duly proved the existence of the trust, said trust would be of doubtful validity considering that it would promote a direct violation of the provisions of the Public Land Act as regards the acquisition of a homestead patent. A homestead applicant is required by law to occupy and cultivate the land for his own benefit, and not for the benefit of someone else. 15 Furthermore, under Section 12 of The Public Land Act (CA 141), a person is allowed to enter a homestead not exceeding twenty-four (24) hectares. In the present case, it is not disputed that EUGENIO already applied for a homestead patent for twenty-four (24) hectares of land and was disqualified from applying for an additional twelve (12) hectares. If we uphold the theory of the petitioners and rule that a trust in fact existed, we would be abetting a circumvention of the statutory prohibitions stated under the Public Land Act. We therefore find no legal or factual basis to sustain the contention of the petitioners that LUTERO merely held Lot 23 Pls-35 in trust for the benefit of the heirs of EUGENIO.

As for the alleged sale of three portions of the lot for a consideration of P3,000.00 each evidenced by the three affidavits of sale executed by LUTERO in favor of GLORIOSA, PRESENTACION and LUCITA, the Court of Appeals correctly declared the three conveyances void. CA 141 prohibits the alienation of a homestead within five years from the issuance of the patent and grant under Section 118, which states: LLphil

"Sec. 118.Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent and grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds."

"The conveyance of a homestead before the expiration of the five-year prohibitory period following the issuance of the homestead patent is null and void and cannot be enforced for 'it is not within the competence of any citizen to barter away what public policy by law seeks to preserve'." 16 In the present case, since the sales were made on January 17, 1969 or less than two years after the issuance of LUTERO's title to the homestead on April 7, 1967, the sales are clearly void.

Finally, we cannot grant DBP's prayer to be dropped from the case even if the mortgage in its favor has been cancelled. DBP did not appeal the decision of the Court of Appeals and cannot therefore seek affirmative relief from this Court other than the ones granted in the decision of the court below. 17 All that said appellee can do is to make a counter-assignment of errors or to argue on issues raised at the trial only for the purpose of sustaining the judgment in his favor, even on grounds not included in the decision of the court a quo nor raised in the appellant's assignment of errors or arguments.

WHEREFORE, the instant petition is hereby DENIED.

SO ORDERED. llcd

Melo, Vitug, Panganiban and Purisima, JJ., concur.

316 scra 650

factsSpouses Pineda were the owners of a parcel of land which they mortgaged to DBP in consideration of a loan. As the loan was unpaid, the mortgage was

foreclosed and DBP took possession of the property. It was opined by the Ministry of Justice that the subject property may not be the subject of foreclosure proceedings. The spouses then sought to redeem the propertybut was denied as the land was allegedly tenanted. They then sought the cancellation of the title and specific performance.

HELD:A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it and he who alleges bad faith on the part of the possessor has the burden of proof. 

THIRD DIVISION

[G.R. No. 111737. October 13, 1999.]

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE HONORABLE COURT OF APPEALS AND SPOUSES TIMOTEO and SELFIDA S. PIÑEDA, respondents.

The Chief Legal Counsel for petitioner.

Antonio A. Bisnar for private respondents.

SYNOPSIS

To secure an agricultural loan which they obtained from the Development Bank of the Philippines (DBP), spouses Timoteo and Selfida Piñeda executed a mortgage over a certain parcel of land they owned. Because the spouses failed to comply with the terms and conditions of the mortgage contract, the land was extrajudicially foreclosed. The property was sold to DBP as the highest bidder in the foreclosure sale, subject to redemption within 5 years from the date of registration of the certificate of sale. After the one year redemption period provided for under Act 3135 expired, DBP consolidated its title over said property. Then it took possession of the foreclosed property

and appropriated its produce On December 21, 1981, the Piñedas filed a complaint against DBP for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction. According to the spouses, the DBP, in evident bad faith, caused the consolidation of its title to the parcel of land in question in spite of the fact that the 5-year redemption period expressly stated in the sheriff's certificate of sale had not yet lapsed. The Regional Trial Court ruled in favor of the Piñedas. The Court of Appeals affirmed the RTC's decision. Hence, this petition.

The period of redemption of extrajudicially foreclosed land is provided under Section 6 of Act No. 3135. If no redemption is made within one year, the purchaser is entitled as a matter of right to consolidate and to possess the property accordingly, DBP's act of consolidating its title and taking possession of the subject property after the expiration of the period of redemption was in accordance with law. Moreover it was in consonance with Section 4 of the mortgage contract between DBP and the Pinedas where they agreed to the appointment of DBP as receiver to take charge and to hold possession of the mortgaged property in case of foreclosure.

SYLLABUS

1.CIVIL LAW; PROPERTY, OWNERSHIP AND ITS MODIFICATION; POSSESSION; POSSESSION IN GOOD FAITH; GOOD FAITH ALWAYS PRESUMED. — A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it. Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. It was therefore incumbent on the PIÑEDAS to prove that DBP was aware of the flaw in its title i. e. the nullity of the foreclosure. This, they failed to do.

2.ID.; ID.; ID.; ID.; CONSOLIDATION OF TITLE OVER FORECLOSED PROPERTY AFTER EXPIRATION OF ONE YEAR PERIOD OF REDEMPTION DESPITE STATEMENT IN SHERIFF'S CERTIFICATE OF SALE THAT SUBJECT LAND WAS SUBJECT TO FIVE YEAR REDEMPTION PERIOD, NOT BAD FAITH. — Respondent PIÑEDAS argue that DBP's bad faith stems from the fact that DBP consolidated title over the disputed property despite the statement in the Sheriffs Certificate of Sale to the effect that said land was subject to a five year redemption period. The period

of redemption of extrajudicially foreclosed land is provided under Section 6 of Act No. 3135. If no redemption is made within one year, the purchaser is entitled as a matter of right to consolidate and to possess the property. Accordingly, DBP's act of consolidating its title and taking possession of the subject property after the expiration of the period of redemption was in accordance with law. Moreover, it was in consonance with Section 4 of the mortgage contract between DBP and the PINEDAS where they agreed to the appointment of DBP as receiver to take charge and to hold possession of the mortgage property in case of foreclosure. DBP's acts cannot therefore be tainted with bad faith.

3.ID.; ID.; ID.; ID.; ID.; RIGHT TO CONSOLIDATE TITLE NOT AFFECTED BY MORTGAGOR'S RIGHT TO REPURCHASE PROPERTY WITHIN PERIOD OF FIVE YEARS. — The right of DBP to consolidate its title and take possession of the subject property is not affected by the PINEDAS' right to repurchase said property within five years from the date of conveyance granted by Section 119 of C.A. No. 141. In fact, without the act of DBP consolidating title in its name, the PINEDAS would not be able to assert their right to repurchase granted under the aforementioned section. Respondent PIÑEDAS are of the erroneous belief that said section prohibits a purchaser of homestead land in a foreclosure sale from consolidating his title over said property after the one-year period to redeem said property has expired. Section 119 does not contain any prohibition to convey homestead land but grants the homesteader, his widow or legal heirs a right to repurchase said land within a period of five years in the event that he conveys said land. This is in consonance with the policy of homestead laws to distribute disposable agricultural lands of the State to land-destitute citizens for their home and cultivation. The right to repurchase under Section 119 aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given him. Such right is based on the assumption that the person under obligation to reconvey the property has the full title to the property because it was voluntarily conveyed to him or that he consolidated his title thereto by reason of a redemptioner's failure to exercise his right of redemption. It is also settled that the five-year period of redemption fixed in Section 119 of the Public Land Law of homestead sold at extrajudicial foreclosure begins to run from the day after the expiration of the one-year period of repurchase allowed in an extrajudicial foreclosure. Thus DBP's consolidation of title did not derogate from or impair the right of the PIÑEDAS to redeem the same under C.A. No. 141.

4.ID.; ID.; ID.; MISTAKE UPON A DOUBTFUL OR DIFFICULT QUESTION OF LAW MAY BE BASIS OF GOOD FAITH. — It may be argued that P.D. 27 was already in effect when DBP foreclosed the property. However, the legal propriety of the foreclosure of the land was put into question only after Opinion No. 92 series of 1978 of the Ministry of Justice declared that said land was covered by P.D. 27 and could not be subject to foreclosure proceedings. The Opinion of the Ministry of Justice was issued on July 5, 1978 or almost two months after DBP consolidated its title to the property on March 10, 1978. By law and jurisprudence, a mistake upon a doubtful or difficult question of law may properly be the basis of good faith.

5.ID.; ID.; ID.; POSSESSOR ENTITLED TO KEEP FRUITS DURING PERIOD FOR WHICH IT HELD PROPERTY IN GOOD FAITH. — In the case of Maneclang vs. Baun, we held that when a contract of sale is void, the possessor is entitled to keep the fruits during the period for which it held the property in good faith. Good faith of the possessor ceases when an action to recover possession of the property is filed against him and he is served summons therefore. In the present case, DBP was served summons on June 30, 1982. By that time, it was no longer in possession of the disputed land as possession thereof was given back to the PIÑEDAS after the foreclosure of DBP was declared null and void on February 22, 1982. Therefore, any income collected by DBP after it consolidated its title and took possession of the property on May 30, 1978 up to February 22, 1982 belongs to DBP as a possessor in good faith since its possession was never legally interrupted.

6.CIVIL LAW; DAMAGES; ATTORNEY'S FEES; AWARD DELETED WHERE MORTGAGEE'S ACTS WERE CLEARLY NOT UNJUSTIFIED. — Finally, we delete the award for attorney's fees. Although attorney's fees. may be awarded if the claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought, we hold that DBP's acts were clearly not unjustified.

D E C I S I O N

GONZAGA-REYES, J p:

Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals 1 in CA-G.R. CV No. 28549 entitled "SPOUSES TIMOTEO PIÑEDA, ET. AL. vs. DEVELOPMENT BANK OF THE PHILIPPINES" which affirmed the decision of the Regional Trial Court (RTC), Branch 16 2 , Roxas City in Civil Case No. V-4590, for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction. LLpr

The records show that respondent spouses Piñeda (PIÑEDAS) are the registered owners of a parcel of land (Lot 11-14-1-14) situated at barangay Astorga Dumarao, Capiz containing an area of 238,406 square meters, more or less, and covered by Homestead Patent No. 0844 and Original Certificate of Title No. P-1930. On March 7, 1972, the PIÑEDAS mortgaged the above described parcel of land to petitioner, Development Bank of the Philippines (DBP) to secure their agricultural loan in the amount of P20,000.00. The PIÑEDAS failed to comply with the terms and conditions of the mortgage compelling DBP to extrajudicially foreclose on February 2, 1977. In the foreclosure sale, DBP was the highest bidder and a Sheriff Certificate of Sale was executed in its favor. In the corresponding Certificate of Sale, the sheriff indicated that "This property is sold subject to the redemption within five (5) years from the date of registration of this instrument and in the manner provided for by law applicable to this case". The certificate of sale was registered in the Register of Deeds of Capiz on April 25, 1977. On March 10, 1978, after the expiration of the one-year redemption period provided for under Section 6, ACT 3135, DBP consolidated its title over the foreclosed property by executing an Affidavit of Consolidation of Ownership. Subsequently, a Final Deed of Sale was executed in DBP's favor, which was registered together with the Affidavit of Consolidation of Ownership with the Register of Deeds of Capiz on May 30, 1978. Consequently, Original Certificate of Title No. P-1930 was cancelled and TCT No. T-15559 was issued in the name of DBP. Thereafter, DBP took possession of the foreclosed property and appropriated the produce thereof. cdphil

 

On July 5, 1978, the Ministry of Justice issued Opinion No. 92, Series of 1978 3 which declared that lands covered by P.D. No. 27 4 , like the herein subject property, may not be the object of foreclosure proceedings after the promulgation of said decree on Oct. 21, 1972.

On August 24, 1981, the PIÑEDAS offered to redeem the foreclosed property by offering P10,000.00 as partial redemption payment. This amount was accepted by DBP who issued O.R. No. 1665719 and through a letter, conditionally approved the offer of redemption considering the P10,000.00 as down payment. 5 However, on November 11, 1981, DBP sent the PIÑEDAS another letter informing them that pursuant to P.D. 27, their offer to redeem and/or repurchase the subject property could not be favorably considered for the reason that said property was tenanted. 6 On November 16, 1981, in deference to the above-mentioned opinion, DBP through Ramon Buenaflor sent a letter to the Acting Register of Deeds of Capiz requesting the latter to cancel TCT No. T-15559 and to restore Original Certificate of Title No. P-1930 in the name of the PIÑEDAS. The Acting Register of Deeds, in reply to such request, suggested that DBP file a petition in court pursuant to Section 108 of Presidential Decree 1529 7 . In compliance with said suggestion, DBP petitioned for the cancellation of TCT No. T-15559 with then Court of First Instance of Capiz, Branch II, docketed as Special Case No. 2653. The petition was favorably acted upon on February 22, 1982. Thus, the foreclosure proceeding conducted on February 2, 1977 was declared null and void and the Register of Deeds of Capiz was ordered to cancel TCT No. 15559; OCT No. 1930 was ordered revived. Cdpr

Meanwhile, on December 21, 1981, the PIÑEDAS filed the instant complaint against DBP for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction averring that DBP, in evident bad faith, caused the consolidation of its title to the parcel of land in question in spite of the fact that the 5-year redemption period expressly stated in the Sheriff's Certificate of Sale had not yet lapsed and that their offer to redeem the foreclosed property was made well within said period of redemption. 8

After trial, the RTC ruled in favor of the PIÑEDAS stating that DBP violated the stipulation in the Sheriff's Certificate of Sale which provided that the redemption period is five (5) years from the registration thereof in consonance with Section 119 9 of CA No. 141 10 . DBP should therefore assume liability for the fruits that said property produced from said land considering that it prematurely took possession thereof. The dispositive portion of the decision reads:

"WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the defendant Development Bank of the Philippines as follows:

1.Condemning the defendant DBP to pay the plaintiffs P201,138.28 less whatever amount the plaintiffs still have to pay the said defendant DBP as balance of their loan account reckoned up to the date of this decision; P20,000.00 as attorney's fees; P5,000.00 as litigation expenses and costs. llcd

SO ORDERED." 11

DBP appealed to the Court of Appeals, which affirmed the decision of the RTC. The Court of Appeals stated that since DBP was in evident bad faith when it unlawfully took possession of the property subject of the dispute and defied what was written on the Sheriff's Certificate of Sale, the PIÑEDAS were entitled to recover the fruits produced by the property or its equivalent valued at P72,000.00 per annum or a total of P216,000.00 for the three-year period. Respondent court stated that said amount was not rebutted by DBP and was fair considering the size of the land in question. The court added that any discussion with respect to the redemption period was of little significance since the foreclosure proceeding was declared null and void in Special Civil Case No. 2653 12 on February 22, 1982. Thus, the right of the PIÑEDAS to redeem the property has become moot and academic. Finally, the award of attorney's fees amounting to P10,000.00 13 was justified considering that the PIÑEDAS were compelled to protect their interests. 14

DBP's Motion for Reconsideration 15 was denied; hence this petition where it assigns the following errors:

"Ground No. 1 — The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Decision Awarding Actual Damages In The Amount Of P216,000.00 In Favor Of The Private Respondents Notwithstanding The Absence Of Evidence Substantiating Said Award. Thus, The Honorable Court Of Appeals Had Decided This Instant Case In A Way Not In Accord With Applicable Law And Jurisprudence. cdrep

2.Ground No. 2 — The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Finding That DBP Was In Bad Faith When It Took Possession Of The Property In Question Notwithstanding the Contrary Evidence Adduced By Petitioner

DBP. Thus, The Honorable Court Of Appeals Departed From The Accepted And Usual Course f Judicial Proceedings.

3.Ground No. 3 — The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Decision Awarding Attorney's Fees And Litigation Costs In Favor Of The Private Respondents Notwithstanding Absence Of Evidence Proving the Same. Clearly, The Lower Court Committed Misapprehension Of Facts That Can Be Considered A Question Of Law." 16

DBP maintains that the valuation of the income derived from the property in dispute allegedly amounting to P216,000.00 was not proven by the PIÑEDAS. DBP argues that they granted the PIÑEDAS a loan of P20,000.00 in March 7, 1972 and up to the time of the foreclosure of the property, the PIÑEDAS have paid only P2,000.00 on their principal. The failure of the PIÑEDAS to pay this loan is attributable to the fact that said property did not produce income amounting to P72,000.00 per annum. According to DBP, in the absence of receipts or other evidence to support such a claim, the Court of Appeals should not have granted said amount considering that the PIÑEDAS had the burden of proving actual damages. Furthermore, Selfida Piñeda herself admitted that the property never produced income amounting to P72,000.00 per annum. At any rate, the actual amount earned by the property in terms of rentals turned over by the tenant-farmers or caretakers of the land were duly receipted and were duly accounted for by the DBP. prLL

DBP also alleges that the mere fact that DBP took possession and administration of the property does not warrant a finding that DBP was in bad faith. First, records show that the PIÑEDAS consented to and approved the takeover of DBP. Second, Sec. 7 17 of Act No. 3135 18 allows the mortgagee-buyer to take possession of the mortgaged property even during the redemption period. Third, DBP's act of consolidating the title of the property in its name does not constitute bad faith as there is no law which prohibits the purchaser at public auction from consolidating title in its name after the expiration of the one (1) year redemption period reckoned from the time the Certificate of Sale was registered; and neither is there any law or jurisprudence which prohibits the PIÑEDAS from exercising their right of redemption over said property within five (5) years even if title is consolidated in the name of the purchaser. When DBP consolidated title over the property in its name, the new TCT issued in its favor was subject to the lien i.e. the right of redemption of the PIÑEDAS; if there

was a failure to register this in the TCT, DBP should not be faulted. Besides, even if the five (5) year period of redemption was not indicated therein, Sec. 44 19 and 46 20 of Presidential Decree No. 1529 21 attaches such lien by operation of law even in the absence of an annotation in the title. Moreover, Sec. 119 of CA No. 141 also makes said right of redemption a statutory lien, which subsists and binds the whole world despite the absence of registration.

DBP also could not have been in bad faith when it denied the PIÑEDAS' offer to redeem the property since the denial was premised on Opinion No. 92 of the Minister of Justice series of 1978 which stated that said land was covered under P.D. 27 and could not be the subject of foreclosure proceedings. For this reason, DBP immediately filed a petition to nullify the foreclosure proceedings which was favorably acted upon prior to the service of summons and the complaint in the present case on DBP on June 30, 1982. If DBP was really in bad faith, it would not have filed said petition for said petition was against its own interests.

Further, DBP asserts that PIÑEDAS appointed DBP as their attorney-in-fact or agent in case of foreclosure of the property under Section 4 of the mortgage contract, which provides: prcd

"4.. . . In case of foreclosure, the Mortgagor hereby consents to the appointment of the mortgagee or any of its employees as receiver, without any bond, to take charge of the mortgage property at once, and to hold possession of the case and the rents and profits derived from the mortgaged property before the sale. . . ." 22

DBP was therefore entitled to take possession of the property pursuant to the mortgage contract.

Finally, considering that DBP lawfully had material possession of the property after it consolidated its title, DBP was entitled to the fruits and income thereof pursuant to Section 34, Rule 39 of the Rules of Court:

"Sec. 34.Rents and Profits Pending Redemption. Statement thereof and credit therefor on redemption. — The purchaser, from the time of the sale until a redemption, and a redemptioner, from the time of his redemption until another redemption, is entitled to receive the rents of the property sold or the value of the use or occupation thereof when such property is in the possession of a tenant. . . ."

 

Taking all this into consideration, DBP cannot be faulted for taking over possession of the property in question. prLL

The core issue in this case is whether DBP was in bad faith when it took possession of the disputed lot.

We rule in the negative and find DBP's contentions meritorious.

A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it. 23 Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. 24 It was therefore incumbent on the PIÑEDAS to prove that DBP was aware of the flaw in its title i.e. the nullity of the foreclosure. This, they failed to do.

Respondent PIÑEDAS argue that DBP's bad faith stems from the fact that DBP consolidated title over the disputed property despite the statement in the Sheriff's Certificate of Sale to the effect that said land was subject to a five year redemption period. The period of redemption of extrajudicially foreclosed land is provided under Section 6 of ACT No. 3135 to wit:

"Sec. 6.In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of sale; and such redemption shall be governed by the provisions of section four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure 25 , in so far as these are not inconsistent with the provisions of this Act." cdtai

If no redemption is made within one year, the purchaser is entitled as a matter of right to consolidate 26 and to possess 27 the property. 28 Accordingly, DBP's act of consolidating its title and taking possession of the subject property after the expiration of the period of redemption was in accordance with law. Moreover, it was in consonance with Section 4 of the mortgage contract between DBP and the PIÑEDAS where they agreed to the appointment of DBP as receiver

to take charge and to hold possession of the mortgage property in case of foreclosure. DBP's acts cannot therefore be tainted with bad faith.

The right of DBP to consolidate its title and take possession of the subject property is not affected by the PIÑEDAS' right to repurchase said property within five years from the date of conveyance granted by Section 119 of CA No. 141. In fact, without the act of DBP consolidating title in its name, the PIÑEDAS would not be able to assert their right to repurchase granted under the aforementioned section. Respondent PIÑEDAS are of the erroneous belief that said section prohibits a purchaser of homestead land in a foreclosure sale from consolidating his title over said property after the one-year period to redeem said property has expired. Section 119 does not contain any prohibition to convey homestead land but grants the homesteader, his widow or legal heirs a right to repurchase said land within a period of five years in the event that he conveys said land. This is in consonance with the policy of homestead laws to distribute disposable agricultural lands of the State to land-destitute citizens for their home and cultivation. 29 The right to repurchase under Section 119 aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given him. 30 Such right is based on the assumption that the person under obligation to reconvey the property has the full title to the property because it was voluntarily conveyed to him or that he consolidated his title thereto by reason of a redemptioner's failure to exercise his right of redemption. 31 It is also settled that "the five-year period of redemption fixed in Section 119 of the Public Land Law of homestead sold at extrajudicial foreclosure begins to run from the day after the expiration of the one-year period of repurchase allowed in an extrajudicial foreclosure". 32 Thus DBP's consolidation of title did not derogate from or impair the right of the PIÑEDAS to redeem the same under C.A. No. 141.

It may be argued that P.D. 27 was already in effect when DBP foreclosed the property. However, the legal propriety of the foreclosure of the land was put into question only after Opinion No. 92 series of 1978 of the Ministry of Justice declared that said land was covered by P.D. 27 and could not be subject to foreclosure proceedings. The Opinion of the Ministry of Justice was issued on July 5, 1978 or almost two months after DBP consolidated its title to the property on March 10, 1978. By law and jurisprudence, a mistake upon a doubtful or difficult question of law may properly be the basis of good faith. 33 LLjur

In the case of Maneclang vs. Baun, 34 we held that when a contract of sale is void, the possessor is entitled to keep the fruits during the period for which it held the property in good faith. Good faith of the possessor ceases when an action to recover possession of the property is filed against him and he is served summons therefore. 35 In the present case, DBP was served summons on June 30, 1982. 36 By that time, it was no longer in possession of the disputed land as possession thereof was given back to the PIÑEDAS after the foreclosure of DBP was declared null and void on February 22, 1982. Therefore, any income collected by DBP after it consolidated its title and took possession of the property on May 30, 1978 up to February 22, 1982 belongs to DBP as a possessor in good faith since its possession was never legally interrupted.

Finally, we delete the award for attorney's fees. Although attorney's fees may be awarded if the claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought, 37 we hold that DBP's acts were clearly not unjustified.

WHEREFORE, the instant petition is hereby GRANTED, and the appealed decision of the Court of Appeals is REVERSED. The Development Bank of the Philippines is absolved from any liability to Timoteo and Selfida Piñeda in so far as it orders the DBP to pay the PIÑEDAS P216,000.00 as annual produce value of the land; P20,000.00 in attorney's fees, P5,000.00 in litigation expenses and the costs of the suit. This decision is without prejudice to whatever liability the PIÑEDAS may still have to the DBP with respect to their loan. LexLib

SO ORDERED.

304 scra 308

FIRST DIVISION

[G.R. No. 108532. March 9, 1999.]

PABLITO TANEO, JR., JOSE TANEO, NENA T. CATUBIG and HUSBAND, CILIA T. MORING and HUSBAND, petitioners, vs. COURT OF APPEALS and ABDON GILIG, respondents.

Carlito P. Somido for petitioners.

Augusto G. Maderazo for private respondent.

SYNOPSIS

The two parcels of land owned by Pablo Taneo located at Barrio Igpit, Opol, Misamis Oriental were levied to satisfy the judgment in Civil Case No. 590 for recovery of property in favor of private respondent Abdon Gilig. The subject properties were sold at public auction on February 12, 1966 to the private respondent as the highest bidder. After Pablo Taneo failed to redeem the said properties, a final deed of conveyance was executed on February 9, 1968, in favor of the private respondent. On February 12, 1977, Pablo Taneo died. And on November 5, 1985, the herein petitioners as legal heirs of Pablo Taneo, filed an action to declare the deed of conveyance void and to quiet title over the land claiming that one parcel of land had been acquired through free patent under Commonwealth Act No. 141 and the other parcel of land is a family home, hence, both parcels of land are inalienable and not subject to any encumbrance for the payment of debt. After trial, the RTC dismissed the complaint. On appeal, the Court of Appeals affirmed in toto the decision of the trial court.

Hence, this petition. DEICHc

The Court ruled that the prohibition against alienation of lands acquired by homestead or free patent commences on the date of the approval of the application for free patent and the five-year period is counted from the issuance of the patent. The reckoning point is actually the date of approval of the application. Pablo Taneo's application for free patent was approved only on October 19, 1973. As of February 9, 1968, the date of issuance of the deed of conveyance, Pablo Taneo did not actually have anymore rights over the land which he could have transferred to herein petitioners. The petitioners are not the owners of the land and cannot claim to be such by invoking Commonwealth Act No. 141. The prohibition does not apply since it is clear from the records that the judgment debt and the execution sale took place prior to the approval of the application for free patent.

Further, the applicable law in the case at bar is still the Civil Code where registration of the declaration of a family home is a prerequisite. The instrument constituting the family home was registered only on January 24, 1966. The money judgment against Pablo Taneo was registered on January 24, 1964. Thus, at that time when the "debt" was

incurred, the family home was not yet constituted or even registered. Clearly, petitioners' alleged family home, as constituted by their father, is not exempt as it falls under the exception of Article 243 (2).

The petition was DENIED. TCaADS

SYLLABUS

1.CIVIL LAW; LAND TITLES AND DEEDS; COMMONWEALTH ACT NO. 141; INTENT OF THE LAW. — We are not unmindful of the intent of the law. In fact, inRepublic v. Court of Appeals, the Court elucidated, to wit: It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs within five years. This Section 117 is undoubtedly a complement of Section 116. It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the statute.

2.ID.; ID.; ID.; PROHIBITION AGAINST ALIENATION OF LANDS. — The prohibition against alienation of lands acquired by homestead or free patent commences on the date of the approval of the application for free patent and the five-year period is counted from the issuance of the patent. The reckoning point is actually the date of approval of the application.

3.ID.; ID.; ID.; ID.; NOT APPLICABLE IN CASE AT BAR. — The sequence of the events leads us to the inescapable conclusion that even before the application for homestead had been approved, Pablo Taneo was no longer the owner of the land. The deed of conveyance issued on February 9, 1968 finally transferred the property to Abdon Gilig. As of that date, Pablo Taneo did not actually have anymore rights over the

land which he could have transferred to herein petitioners. The petitioners are not the owners of the land and cannot claim to be such by invoking Commonwealth Act No. 141. The prohibition does not apply since it is clear from the records that the judgment debt and the execution sale took place prior to the approval of the application for free patent.

4.ID.; PERSONS; FAMILY HOME; CONCEPT. — A family home is the dwelling place of a person and his family. It is said, however, that the family home is a real right, which is gratuitous, inalienable and free from attachment, constituted over the dwelling place and the land on which it is situated, which confers upon a particular family the right to enjoy such properties, which must remain with the person constituting it and his heirs. It cannot be seized by creditors except in certain special cases.

5.ID.; ID.; ID.; WAYS TO CONSTITUTE. — Under the Civil Code (Articles 224 to 251), a family home may be constituted judicially and extrajudicially, the former by the filing of the petition and with the approval of the proper court, and the latter by the recording of a public instrument in the proper registry of property declaring the establishment of the family home. The operative act then which created the family home extrajudicially was the registration in the Registry of Property of the declaration prescribed by Articles 240 and 241 of the Civil Code. Under the Family Code, however, registration was no longer necessary. Article 153 of the Family Code provides that the family home is deemed constituted on a house and lot from the time it is occupied in the family residence. HAICcD

6.ID.; ID.; ID.; RETROACTIVE EFFECT OF THE FAMILY CODE IN RELATION THERETO. — However, the retroactive effect of the Family Code, particularly on the provisions on the family home has been clearly laid down by the court as explained in the case of Manacop v. Court of Appeals, to wit: Finally, the petitioner insists that the attached property is a family home, having been occupied by him and his family since 1972, and is therefore exempt from attachment. The contention is not well-taken. While Article 153 of the Family Code provides that the family home is deemed constituted on a house and lot from the time it is occupied as a family residence, it does not mean that said article has a retroactive effect such that all existing family residences, petitioners included, are deemed to have been constituted as family homes at the time of their occupation prior to the effectivity of the Family Code and henceforth, are exempt from execution for the payment of obligations

incurred before the effectivity of the Family Code on August 3, 1988 (Modequillo vs. Breva, 185 SCRA 766). Neither does Article 162 of said Code state that the provisions of Chapter 2, Title V thereof have retroactive effect. It simply means that all existing family residences at the time of the effectivity of the Family Code are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code (Modequillo vs. Breva, supra). Since petitioner's debt was incurred as early as November 25, 1987, it preceded the effectivity of the Family Code. His property is therefore not exempt from attachment. CEASaT

7.ID.; ID.; ID.; NOT EXEMPTED FROM EXECUTION; CASE AT BAR. — The applicable law, therefore, in the case at bar is still the Civil Code where registration of the declaration of a family home is a prerequisite. The trial court found that on March 7, 1964, Pablo Taneo constituted the house in question, erected on the land of Plutarco Vacalares, as the family home. The instrument constituting the family home was registered only on January 24, 1966. The money judgment against Pablo Taneo was rendered on January 24, 1964. Thus, at that time when the "debt" was incurred, the family home was not yet constituted or even registered. Clearly, petitioners' alleged family home, as constituted by their father is not exempt as it falls under the exception of Article 243(2).

8.ID.; ID.; ID.; THE HOUSE MUST BE CONSTRUCTED ON THE LAND NOT BELONGING TO ANOTHER. — Moreover, the constitution of the family home by Pablo Taneo is even doubtful considering that such constitution did not comply with the requirements of the law. The trial court found that the house was erected not on the land which the Taneos owned but on the land of one Plutarco Vacalares. By the very definition of the law that the "family home is the dwelling house where a person and his family resides and the land on which it is situated," it is understood that the house should be constructed on a land not belonging to another. caIETS

D E C I S I O N

KAPUNAN, J p:

The issues in this case are not novel: whether or not the conveyance made by way of the sheriff's sale pursuant to the writ of execution issued by the trial court in Civil Case No. 590 is prohibited under Sec. 118 of Commonwealth Act No. 141; and whether or not the family home is exempt from execution.

 

As a result of a judgment in Civil Case No. 590 (for recovery of property) in favor of private respondent, two (2) of petitioners' properties were levied to satisfy the judgment amount of about P5,000.00: one was a parcel of land located in Barrio Igpit, Municipality of Opol, Misamis Oriental with an area of about five (5) hectares, and the other was the family home also located at Igpit, Opol, Misamis Oriental. The subject properties were sold at public auction on February 12, 1966 to the private respondent as the highest bidder. Consequently, after petitioners' failure to redeem the same, a final deed of conveyance was executed on February 9, 1968, definitely selling, transferring, and conveying said properties to the private respondent.

To forestall such conveyance, petitioners filed an action on November 5, 1985 (docketed as Civil Case No. 10407) to declare the deed of conveyance void and to quiet title over the land with a prayer for a writ of preliminary injunction. In their complaint, it was alleged that petitioners are the children and heirs of Pablo Taneo and Narcisa Valaceras who died on February 12, 1977 and September 12, 1984, respectively. Upon their death, they left the subject property covered by OCT No. P-12820 and Free Patent No. 548906. Considering that said property has been acquired through free patent, such property is therefore inalienable and not subject to any encumbrance for the payment of debt, pursuant to Commonwealth Act No. 141. Petitioners further alleged that they were in continuous, open and peaceful possession of the land and that on February 9, 1968, Deputy Provincial Sheriff Jose V. Yasay issued a Sheriff's Deed of Conveyance in favor of the private respondent over the subject property including their family home which was extrajudicially constituted in accordance with law. As a result of the alleged illegal deed of conveyance, private respondent was able to obtain in his name Tax Declaration No. 851920 over the land, thus casting a cloud of doubt over the title and ownership of petitioners over said property. cdtai

Private respondent refuted petitioners' contentions alleging that he lawfully acquired the subject properties described as Lot No. 5545, Cad. 237 which was a private land, by virtue of a Sheriff's Sale on February 12, 1966. Said sale has become final as no redemption was made within one year from the registration of the Sheriff's Certificate of Sale. The validity of the sale in favor of Abdon Gilig was even confirmed by the Court of Appeals in a related case (CA No. 499965-R) entitled "Arriola v. Gilig," where one Rufino Arriola also claimed ownership over the subject property.

Private respondent averred that the subject land was originally owned by Lazaro Ba-a who sold the land to Pablo Taneo on September 18, 1941, as evidenced by anEscritura de Venta. Despite it being a private land, Pablo Taneo filed an application for free patent which was made final only in 1979.

As counterclaim, private respondent alleged that since petitioners are still in possession of the subject property, he has been deprived of acts of ownership and possession and therefore, prayed for payment of rentals from February, 1968 until possession has been restored to them.

In its decision of March 27, 1989, the RTC dismissed the complaint. The dispositive portion thereof reads as follows:

Premises considered, Judgment is hereby rendered in favor of the defendant and against the plaintiffs, ordering the dismissal of the complaint filed by the plaintiffs;

a)Declaring OCT No. P-12820 and Free Patent No. 548906 both in the name of Pablo Taneo as null and void and directing the Register of Deeds to cancel the same, without prejudice however on the part of the defendant to institute legal proceedings for the transfer of the said title in the name of defendant Abdon Gilig;

b)Declaring Abdon Gilig as the absolute and legal owner of the land covered by OCT No. P-12820, and covered by Tax Declaration No. 851920, and hence entitled to the possession of the same and as a necessary concomitant, admonishing the plaintiffs to refrain from disturbing the peaceful possession of the defendant over the land in question; cdrep

c)Likewise declaring the defendant Abdon Gilig as the true and absolute owner of the house in question formerly declared under Tax Declaration No. 4142 in the name of Pablo Taneo and presently declared under Tax Declaration No. 851916 in the name of Abdon Gilig; ordering the plaintiffs or any of their representatives to vacate and return the possession of the same to defendant Abdon Gilig;

d)Ordering the plaintiffs, except the nominal parties herein, to pay to defendant Abdon Gilig the amount of P500.00 a month as reasonable rental of the house in question to be reckoned from February 9, 1968 until the possession of the same is returned to the defendant.

e)To pay to defendant the amount of P5,000.00 as attorney's fees and to pay the costs.

SO ORDERED. 1

On appeal, the Court of Appeals affirmed in toto the decision of the RTC.

Hence, this petition.

The petition is devoid of merit.

In resolving the issues, the lower court made the following findings of fact which this Court finds no cogent reason to disturb:

1.That the land in question originally belonged to Lazaro Ba-a who sold the same to the late Pablito (sic) Taneo father of the herein plaintiff on September 18, 1941, by virtue of an Escritura de Venta identified as Reg. Not. 50; pages 53, Foleo Not. V, Series of 1941 of the Notarial Register of Ernie Pelaez (Exh. 10);

2.That on July 19, 1951 Abdon Gilig with his wife filed a Civil Case No. 590 for recovery of property against Pablo Taneo, et al., wherein Judgment was rendered on June 24, 1964, in favor of Abdon Gilig and against Pablo Taneo ordering the latter to pay damages in the amount of P5,000.00 (Exh. 2);Cdpr

3.That by virtue of said decision, a writ of Execution was issued on November 22, 1965 against the properties of Pablo Taneo and on December 1, 1965, a Notice of Levy was executed by the Clerk of Court Pedro Perez wherein the properties in question were among the properties levied by the Sheriff (Exh. 3);

4.That the said properties were sold at public auction wherein the defendant Abdon Gilig came out as the highest bidder and on February 12, 1965, a Sheriff's Certificate of Sale was executed by Ex-Oficio Provincial Sheriff Pedro Perez (Exh. 1) ceding the said properties in favor of Abdon Gilig and which Certificate of Sale was registered with the Register of Deeds on March 2, 1966;

5.That for failure to redeem the said property within the reglementary period, a Sheriff's final Deed of Conveyance was executed by same Provincial Sheriff Jose V. Yasay on February 1968, (Exhs. 4, 4-A) conveying the property definitely to Abdon Gilig.

6.That on April 20, 1966, after his third-party claim which he filed with the Sheriff in Civil Case No. 590 was not given due course, Rufino Arriola filed Civil Case No. 2667 entitled Arriola vs. Abdon Gilig, et al., for Recovery of Property and/or annulment of Sale with Damages;

7.That Judgment was rendered by the Court thru Judge Bernardo Teves dismissing the case with costs on February 21, 1969;

8.That said decision was appealed to the Court of Appeals which affirmed the decision in toto on June 20, 1979; declaring the alleged Deed of Sale executed by Abdon Gilig in favor of the plaintiff as null and void for being simulated or fictitious and executed in fraud or (sic) creditors;

9.That on March 7, 1964, Pablo Taneo constituted the house in question erected on the land of Plutarco Vacalares as a family home (Exh. F) but was however, notarized only on May 2, 1965 and registered with the Register of Deeds on June 24, 1966;

10.That in the meanwhile, unknown to the defendant, Pablo Taneo applied for a free patent on the land in question

which was approved on October 13, 1973, (Exh. B) and the Patent and Title issued on December 10, 1980 (Oct No. P-12820-Exh. 12);

11.On November 3, 1985, the plaintiff filed the present action. 2 cdll

Petitioners contend that under Section 118 of Commonwealth Act No. 141, the subject land which they inherited from their father under free patent cannot be alienated or encumbered in violation of the law. Citing in particular the cases of Oliveros v. Porciongcola 3 and Gonzaga v. Court of Appeals, 4 the execution or auction sale of the litigated land falls within the prohibited period and is, likewise, a disavowal of the rationale of the law which is to give the homesteader or patentee every chance to preserve for himself and his family the land which the State had gratuitously given to him as a reward for his labor in cleaning and cultivating it. 5

We are not unmindful of the intent of the law. In fact, in Republic v. Court of Appeals, 6 the Court elucidated, to wit:

It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs within five years. This Section 117 is undoubtedly a complement of Section 116. It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the statute. LLpr

 

The intent of the law is undisputable but under the facts of the case, the prohibition invoked by the petitioners under Section 118 does not apply to them.

Section 118 of Commonwealth Act No. 141 reads:

Except in favor of the Government or any of its branches, units or institutions, or legally constituted banking corporations, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

xxx xxx xxx.

The prohibition against alienation of lands acquired by homestead or free patent commences on the date of the approval of the application for free patent and the five-year period is counted from the issuance of the patent. The reckoning point is actually the date of approval of the application. In Amper v. Presiding Judge, 7 the Court held that:

. . . The date when the prohibition against the alienation of lands acquired by homesteads or free patents commences is "the date of the approval of the application" and the prohibition embraces the entire five-year period "from and after the date of issuance of the patent or grant." As stated in Beniga v. Bugas, (35 SCRA 111), the provision would make no sense if the prohibition starting "from the date of the approval of the application" would have no termination date.

The specific period of five years within which the alienation or encumbrance of a homestead is restricted starts to be computed from the date of the issuance of the patent. But the prohibition of alienation commences from the date the application is approved which comes earlier. (Underlining ours.) LLphil

Following this ruling, we agree with the respondent court that the conveyance made by way of the sheriff's sale was not violative of the law. The judgment obligation of the petitioners against Abdon Gilig arose on June 24, 1964. The properties were levied and sold at public

auction with Abdon Gilig as the highest bidder on February 12, 1966. On February 9, 1968, the final deed of conveyance ceding the subject property to Abdon Gilig was issued after the petitioners failed to redeem the property after the reglementary period. Pablo Taneo's application for free patent was approved only on October 19, 1973.

The sequence of the events leads us to the inescapable conclusion that even before the application for homestead had been approved, Pablo Taneo was no longer the owner of the land. The deed of conveyance issued on February 9, 1968 finally transferred the property to Abdon Gilig. As of that date, Pablo Taneo did not actually have anymore rights over the land which he could have transferred to herein petitioners. The petitioners are not the owners of the land and cannot claim to be such by invoking Commonwealth Act No. 141. The prohibition does not apply since it is clear from the records that the judgment debt and the execution sale took placeprior to the approval of the application for free patent. We quote with favor the respondent court's valid observation on the matter:

. . . the application of Pablo Taneo for a free patent was approved only on 19 October 1973 and Free Patent was issued on 10 December 1980. Under the aforecited provision, the subject land could not be made liable for the satisfaction of any debt contracted from the time of the application and during the 5-year period following 10 December 1980, or until 10 December 1985. However, debts contracted prior to the approval of the application for free patent, that is prior to 18 October 1973, are not covered by the prohibition. This is because they do not fall within the scope of the prohibited period. In this case, the judgment debt in favor of defendant-appellee was rendered on 24 June 1964, the writ of execution issued on 22 November 1965, notice of levy made on 1 December 1965, the execution sale held on 12 February 1966, and the certificate of sale registered on 2 March 1966, all before Pablo Taneo's application for free patent was approved on 19 October 1973. The execution, therefore, was not violative of the law. 8

Anent the second issue, petitioners aver that the house which their father constituted as family home is exempt from execution. In a last ditch effort to save their property, petitioners invoke the benefits accorded to the family home under the Family Code. prcd

A family home is the dwelling place of a person and his family. It is said, however, that the family home is a real right, which is gratuitous, inalienable and free from attachment, constituted over the dwelling place and the land on which it is situated, which confers upon a particular family the right to enjoy such properties, which must remain with the person constituting it and his heirs. 9 It cannot be seized by creditors except in certain special cases.

Under the Civil Code (Articles 224 to 251), a family home may be constituted judicially and extrajudicially, the former by the filing of the petition and with the approval of the proper court, and the latter by the recording of a public instrument in the proper registry of property declaring the establishment of the family home. The operative act then which created the family home extrajudicially was the registration in the Registry of Property of the declaration prescribed by Articles 240 and 241 of the Civil Code. 10

Under the Family Code, however, registration was no longer necessary. Article 153 of the Family Code provides that the family home is deemed constituted on a house and lot from the time it is occupied in the family residence. It reads:

The family home is deemed constituted on a house and lot from the time it is occupied as family residence. From the time of its constitution and so long as its beneficiaries actually resides therein, the family home continues to be such and is exempt from execution, forced sale or attachment, except as hereinafter provided and to the extent of the value allowed by law.

It is under the foregoing provision which petitioners seek refuge to avert execution of the family home arguing that as early as 1964, Pablo Taneo had already constituted the house in question as their family home. However, the retroactive effect of the Family Code, particularly on the provisions on the family home has been clearly laid down by the court as explained in the case of Manacop v. Court of Appeals 11 to wit: cdtai

Finally, the petitioner insists that the attached property is a family home, having been occupied by him and his family since 1972, and is therefore exempt from attachment.

The contention is not well-taken.

While Article 153 of the Family Code provides that the family home is deemed constituted on a house and lot from the time it is occupied as a family residence, it does not mean that said article has a retroactive effect such that all existing family residences, petitioner's included, are deemed to have been constituted as family homes at the time of their occupation prior to the effectivity of the Family Code and henceforth, are exempt from execution for the payment of obligations incurred before the effectivity of the Family Code on August 3, 1988 (Modequillo vs. Breva, 185 SCRA 766). Neither does Article 162 of said Code state that the provisions of Chapter 2, Title V thereof have retroactive effect. It simply means that all existing family residences at the time of the effectivity of the Family Code are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code (Modequillo vs. Breva, supra). Since petitioner's debt was incurred as early as November 25, 1987, it preceded the effectivity of the Family Code. His property is therefore not exempt from attachment (Annex "O," Plaintiff's Position Paper and Memorandum of Authorities, p. 78)." (pp. 5-6, Decision; pp. 64-65, Rollo) (underscoring ours)

The applicable law, therefore, in the case at bar is still the Civil Code where registration of the declaration of a family home is a prerequisite. Nonetheless, the law provides certain instances where the family home is not exempted from execution, forced sale or attachment.

Article 243 reads:

The family home extrajudicially formed shall be exempt from execution, forced sale or attachment, except:

(1)For nonpayment of taxes;

(2)For debts incurred before the declaration was recorded in the Registry of Property;

(3)For debts secured by mortgages on the premises before or after such record of the declaration;

(4)For debts due to laborers, mechanics, architects, builders, material-men and others who have rendered service or furnished material for the construction of the building. 12 cdrep

The trial court found that on March 7, 1964, Pablo Taneo constituted the house in question, erected on the land of Plutarco Vacalares, as the family home. The instrument constituting the family home was registered only on January 24, 1966. The money judgment against Pablo Taneo was rendered on January 24, 1964. Thus, at that time when the "debt" was incurred, the family home was not yet constituted or even registered. Clearly, petitioners' alleged family home, as constituted by their father is not exempt as it falls under the exception of Article 243(2).

Moreover, the constitution of the family home by Pablo Taneo is even doubtful considering that such constitution did not comply with the requirements of the law. The trial court found that the house was erected not on the land which the Taneos owned but on the land of one Plutarco Vacalares. By the very definition of the law that the "family home is the dwelling house where a person and his family resides and the land on which it is situated," 13 it is understood that the house should be constructed on a land not belonging to another. Apparently the constitution of a family home by Pablo Taneo in the instant case was merely an afterthought in order to escape execution of their property but to no avail. cdphil

 

WHEREFORE the petition is DENIED for lack of merit.

SO ORDERED.

Davide, Jr., C.J., Melo and Pardo, JJ., concur.

301 scra 293

FIRST DIVISION

[G.R. No. 128017. January 20, 1999.]

RAMON ITURALDE, petitioner, vs. ALFREDO FALCASANTOS, respondent.

Leo Jay T. Principe for petitioner.

Bienvenido G. Martin for private respondent.

SYNOPSIS

Petitioner acquired by purchase a 6-hectare land located at Bañas, Lantawan, Basilan Province on October 17, 1986. However, said lot was applied with the Bureau of Lands by respondent for a free patent. The same was dismissed by the Regional Director of Lands for failure to exercise the right to repurchase and allowed petitioner to file a public land application for the subject land. Thereafter, petitioner filed a complaint for recovery of ownership and possession against respondent. The trial court rendered judgment in favor of petitioner who was declared the owner and possessor of the subject land. On appeal, the Court of Appeals reversed the appealed decision in finding that the land is within the forest reserve area, hence, not capable of private appropriation and occupation. Hence, this recourse, petitioner by claiming that allowance of the Director of Lands to file a public land application for said property is equivalent to a declaration that said land was no longer part of the public domain.

Lands within the forest reserve are not capable of private appropriation and occupation; that a positive act of the government is needed to declassify a forest land into alienable or disposable land for agricultural or other purposes; and that possession of forest lands, however long, cannot ripen into private ownership. ICHcTD

SYLLABUS

1.CIVIL LAW; PUBLIC LAND ACT; LANDS WITHIN FOREST RESERVE, NOT CAPABLE OF PRIVATE APPROPRIATION AND OCCUPATION. — The Court of Appeals correctly held that "the evidence is unrebutted that the subject land is within the Forest Reserve Area as per L.C. Map No. 1557 certified on August 13, 1951." and, hence, not capable of private appropriation and occupation. In Republic vs. Register of Deeds of Quezon, we held that "Forest lands, like mineral or timber lands which are public lands, are not subject to private ownership unless they under the Constitution, become private properties. In the absence of such classification, the land remains unclassified public land until released therefrom and rendered open to disposition." HDTCSI

2.ID.; ID.; DECLASSIFICATION OF PUBLIC LANDS; POSITIVE ACT FROM GOVERNMENT, INDISPENSABLE. — In Sunbeam Convenience Foods Inc. vs. Court of Appeals, we said: "Thus, before any land may be declassified from the forest group and converted into alienable or disposable land for agricultural or other purposes, there must be a positive act from the government. Even rules on the confirmation of

imperfect titles do not apply unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain." Hence, a positive act of the government is needed to declassify a forest land into alienable or disposable land for agricultural or other purposes."

3.ID.; POSSESSION; POSSESSION OF FOREST LANDS HOWEVER LONG CANNOT RIPEN INTO PRIVATE OWNERSHIP. — The rule is "Possession of forest lands, however long, cannot ripen into private ownership."

D E C I S I O N

PARDO, J p:

The case is an appeal via certiorari from a decision of the Court of Appeals reversing that of the Regional Trial Court, Branch 2, Basilan province, and dismissing petitioner's complaint for recovery of possession and ownership of a parcel of land with the improvements existing thereon, situated at Barangay Upper Bañas, municipality of Lantawan, province of Basilan, with an area of 7.1248 hectares. cdlex

The facts may be related as follows:

On October 17, 1986, petitioner acquired by purchase from the heirs of Pedro Mana-ay a parcel of land located at Bañas, Lantawan, Basilan Province, with an area of 6.0000 hectares, more or less, more particularly described as follows:

"A parcel of land, situated at Bañas, Lantawan Basilan. Bounded on the North by property of Alejandro Marso; on the East by property of Ramon Bacor; on the South by property of Atty. Ricardo G. Mon and on the West by property of Librada Guerrero. Containing an area of 6.0000 hectares, more or less."

However, on November 3, 1986, respondent applied with the Bureau of Lands in Isabela, Basilan province, for the award to him of the same parcel of land under free patent. On November 17, 1986, petitioner filed a protest to such application.

On February 7, 1989, the Regional Director of Lands rendered a decision giving respondent a period of one hundred twenty (120) days to exercise the right to repurchase the land by reimbursing petitioner of all expenses he incurred in the purchase of the property in question, and held in abeyance respondent's application for free patent.

On October 11, 1989, the Regional Director issued an order declaring that respondent had waived his right of repurchase, and rejected his application for free patent for lack of interest, and allowed petitioner to file a public land application for the subject land.

On May 8, 1990, the Regional Director ordered respondent to vacate the land in question, but respondent refused.

On July 24, 1990, petitioner filed with the Regional Trial Court, Basilan province, a complaint for recovery of ownership and possession with preliminary injunction of the subject parcel of land.

In answer to the complaint, respondent alleged that the land occupied by him belonged to the Republic of the Philippines, and that he had introduced improvements thereon such as coconut and other fruit trees. cdtai

After trial on the merits, on March 20, 1993, the trial court rendered decision declaring petitioner the owner and possessor of the subject parcel of land with all the improvements existing thereon, situated at Barangay Upper Bañas, municipality of Lantawan, province of Basilan, with an area of 3.1248 hectares, and ordering respondent to vacate the land in question, to pay petitioner the amount of ten thousand pesos (P10,000.00) as attorneys fee, the amount of five thousand pesos (P5,000.00) as litigation expenses, and three hundred pesos (P300.00) as judicial cost.

In due time, petitioner appealed the trial court's decision to the Court of Appeals.

On December 20, 1996, the Court of Appeals rendered decision reversing the appealed decision, and entering a new judgment dismissing petitioner's complaint without prejudice to any action that petitioner may take if the subject land was declassified from forest land to alienable and disposable land of the public domain.

Hence, the present recourse.

Petitioner submits that the Court of Appeals erred in setting aside the trial court's decision in his favor and dismissing the complaint because when the Director of Lands allowed petitioner to file a public land application for said property, it was equivalent to a declaration that said land was no longer part of the public domain.

We deny the petition. The Court of Appeals correctly held that "the evidence is unrebutted that the subject land is within the Forest Reserve Area as per L.C. Map No. 1557 certified on August 13, 1951' " 1 and, hence, not capable of private appropriation and occupation. 2

In Republic vs. Register of Deeds of Quezon, we held that "Forest lands, like mineral or timber lands which are public lands, are not subject to private ownership unless they under the Constitution, become private properties. In the absence of such classification, the land remains unclassified public land until released therefrom and rendered open to disposition." 3

In Sunbeam Convenience Foods Inc. vs. Court of Appeals, we said: "Thus, before any land may be declassified from the forest group and converted into alienable or disposable land for agricultural or other purposes, there must be a positive act from the government. Even rules on the confirmation of imperfect titles do not apply unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain." 4

"Hence, a positive act of the government is needed to declassify a forest land into alienable or disposable land for agricultural or other purposes." 5

And the rule is "Possession of forest lands, however long, cannot ripen into private ownership." 6

What is more, there is yet no award or grant to petitioner of the land in question by free patent or other ways of acquisition of public land. Consequently, he can not lawfully claim to be the owner of the land in question.

WHEREFORE, the Court hereby AFFIRMS the appealed decision of the Court of Appeals in CA-G.R. CV No. 42306, dismissing the complaint of petitioner before the Regional Trial Court, Basilan province, in Civil Case No. 441-63. cdrep

No costs.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan and Martinez, JJ., concur.

Footnotes

1.Exhibit 4, 4-A, Record, p. 186.

2.Director of Land Management vs. Court of Appeals, 172 SCRA 455; Republic vs. Court of Appeals, 154 SCRA 476.

3.244 SCRA 537, 546 (1995).

4.181 SCRA 443, 448 (1990); De la Cruz vs. Court of Appeals, G.R. No. 120652, February 11, 1998.

5.Director of Lands vs. Intermediate Appellate Court, 219 SCRA 339, 347 (1993).

6.Director of Forestry vs. Muñoz, 23 SCRA 1184, 1199, citing Adorable vs. Director, 107 Phil. 401; see also Vaño vs. Government, 41 Phil. 161, 162.