1ST EXAM COVERAGE CASE COMPILATION

NATURAL RESOURCES (Atty. Edison Batacan)1ST EXAM COVERAGE CASE COMPILATION

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REPUBLIC v. COURT OF APPEALSRepublic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. L-43938 April 15, 1988REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT),petitioner,vs.HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA,respondents.G.R. No. L-44081 April 15, 1988BENGUET CONSOLIDATED, INC.,petitioner,vs.HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA,respondents.G.R. No. L-44092 April 15, 1988ATOK-BIG WEDGE MINING COMPANY,petitioner,vs.HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA,respondents.CRUZ,J.:The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth even if the land where the discovery is made be private.1In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not correctly applied.These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964.2The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9.3In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation. She testified she was born in the land, which was possessed by her parents under claim of ownership.4Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier possession of the land by Alberto's father.5Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to 1964,6Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964.7Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land.8For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon.9The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902 which provided that:SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and unsurveyed are hereby declared to be free and open to exploration, occupation and purchase and the land in which they are found to occupation and purchase by the citizens of the United States, or of said islands.The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973.10The trial court*denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered.11The applicants appealed to the respondent court,*which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims.12In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its own petition for review and reiterates its argument that neither the private respondents nor the two mining companies have any valid claim to the land because it is not alienable and registerable.It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The Court of Appeals correctly declared that:There is no question that the 9 lots applied for are within the June Bug mineral claims of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining locator. He filed his declaration of the location of the June Bug mineral and the same was recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the required affidavit of annual assessment. After World War II, Benguet introduced improvements on mineral claim June Bug, and also conducted geological mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for taxation and had religiously paid the taxes.The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having been perfected prior to the approval of the Constitution of the Philippines of 1935, they were removed from the public domain and had become private properties of Benguet and Atok.It is not disputed that the location of the mining claim under consideration was perfected prior to November 15, 1935, when the Government of the Commonwealth was inaugurated; and according to the laws existing at that time, as construed and applied by this court inMcDaniel v. Apacible and Cuisia(42 Phil. 749), a valid location of a mining claim segregated the area from the public domain. Said the court in that case: The moment the locator discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be granted to any other person. The reservations of public lands cannot be made so as to include prior mineral perfected locations; and, of course, if a valid mining location is made upon public lands afterwards included in a reservation, such inclusion or reservation does not affect the validity of the former location. By such location and perfection, the land located is segregated from the public domain even as against the Government. (Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546)."The legal effect of a valid location of a mining claim is not only to segregate the area from the public domain, but to grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon compliance with the terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area becomes segregated from the public domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the effect of a grant by the United States of the right of present and exclusive possession,with the right to the exclusive enjoyment of all the surface ground as well as of all the minerals within the lines of the claim, except as limited by the extralateral right of adjoining locators; and this is the locator's right before as well as after the issuance of the patent. While a lode locator acquires a vested property right by virtue of his location made in compliance with the mining laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to secure a patent as long as he complies with the provisions of the mining laws; his possessory right, for all practical purposes of ownership, is as good as though secured by patent.We agree likewise with the oppositors that having complied with all the requirements of the mining laws, the claims were removed from the public domain, and not even the government of the Philippines can take away this right from them. The reason is obvious. Having become the private properties of the oppositors, they cannot be deprived thereof without due process of law.13Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy and other natural resources of the Philipppines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the government established under this Constitution. Natural resources with the exception of public agricultural lands, shall not be alienated, and no license, concession, or lease for the exploitation, development or utilization of any of the natural resources shall be granted for a period exceeding 25 years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which case beneficial use may be the measure and the limit of the grant.Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all locations of mining claim made prior to February 8, 1935 within lands set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which would be valid and subsisting location except to the existence of said reserve are hereby declared to be valid and subsisting locations as of the date of their respective locations.The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain.14By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it.15As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at bar, for two reasons.First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the applicants was insufficient to support their claim of ownership. They themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged possession of their predecessors-in-interest.16The trial judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave abuse of discretion or without sufficient basis.17Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the subject property, their possession was not in the concept of owner of themining claimbut of the property asagricultural land, which it was not. The property was mineral land, and they were claiming it as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining of the land. In fact, Balbalio testified that she was aware of the diggings being undertaken "down below"18but she did not mind, much less protest, the same although she claimed to be the owner of the said land.The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height.19Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing line between the surface and the sub-surface rights?The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral and completely mineral once the mining claims were perfected.20As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their disposition, exploitation, development or utilization, shall be limited to citizens of the Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of government established under the Constitution.SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents.SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all areas for which Torrens titles are granted are excluded and excepted from all such titles.This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposessimultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings.21Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes.WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.SO ORDERED.REPUBLIC v. QUASHARepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-30299 August 17, 1972REPUBLIC OF THE PHILIPPINES and/or THE SOLICITOR GENERALpetitioners,vs.WILLIAM H. QUASHA,respondent.Office of the Solicitor General Estelito P. Mendoza for petitioner.Quasha, Asperilla Blanco, Zafra & Tayag for respondent.REYES J. B. L.,J.:pThis case involves a judicial determination of the scope and duration of the rights acquired by American citizens and corporations controlled by them, under the Ordinance appended to the Constitution as of 18 September 1946, or the so-called Parity Amendment.The respondent, William H. Quasha, an American citizen, had acquired by purchase on 26 November 1954 a parcel of land with the permanent improvements thereon, situated at 22 Molave Place, in Forbes Park, Municipality of Makati, Province of Rizal, with an area of 2,616 sq. m. more or less, described in and covered by T. C. T. 36862. On 19 March 1968, he filed a petition in the Court of First Instance of Rizal, docketed as its Civil Case No. 10732, wherein he (Quasha) averred the acquisition of the real estate aforesaid; that the Republic of the Philippines, through its officials, claimed that upon expiration of the Parity Amendment on 3 July 1974, rights acquired by citizens of the United States of America shall cease and be of no further force and effect; that such claims necessarily affect the rights and interest of the plaintiff, and that continued uncertainty as to the status of plaintiff's property after 3 July 1974 reduces the value thereof, and precludes further improvements being introduced thereon, for which reason plaintiff Quasha sought a declaration of his rights under the Parity Amendment, said plaintiff contending that the ownership of properties during the effectivity of the Parity Amendment continues notwithstanding the termination and effectivity of the Amendment.The then Solicitor General Antonio P. Barredo (and later on his successors in office, Felix V. Makasiar and Felix Q. Antonio) contended that the land acquired by plaintiff constituted private agricultural land and that the acquisition violated section 5, Article XIII, of the Constitution of the Philippines, which prohibits the transfer of private agricultural land to non-Filipinos, except by hereditary succession; and assuming, without conceding, that Quasha's acquisition was valid, any and all rights by him so acquired "will expireipso factoandipso jureat the end of the day on 3 July 1974, if he continued to hold the property until then, and will be subject to escheat or reversion proceedings" by the Republic.After hearing, the Court of First Instance of Rizal (Judge Pedro A. Revilla presiding) rendered a decision, dated 6 March 1969, in favor of plaintiff, with the following dispositive portion:WHEREFORE, judgment is hereby rendered declaring that acquisition by the plaintiff on 26 November 1954 of, the private agricultural land described in and covered by Transfer Certificate of Title No. 36862 in his name was valid, and that plaintiff has a right to continue in ownership of the said property even beyond July 3, 1974.Defendants appealed directly to this Court on questions of law, pleading that the court below erred:(1) In ruling that under the Parity Amendment American citizens and American owned and/or controlled business enterprises "are also qualified to acquire private agricultural lands" in the Philippines; and(2) In ruling that when the Parity Amendment ceases to be effective on 3 July 1974, "what must be considered to end should be the right to acquire land, and not the right to continue in ownership of land already acquired prior to that time."As a historical background, requisite to a proper understanding of the issues being litigated, it should be recalled that the Constitution as originally adopted, contained the following provisions:Article XIII CONSERVATION AND UTILIZATIONOF NATURAL RESOURCESSection 1. All Agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for the resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water right for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and the limit of the grant.Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in excess of one thousand and twenty-four hectares, nor may any individual acquire such lands by purchase in excess of one hundred and forty-four hectares, or by lease in excess of one thousand and twenty-four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing not exceeding two thousand hectares, may be leased to an individual, private corporation, or association.xxx xxx xxxSection 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.Article XIV GENERAL PROVISIONSSection 8. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or other entities organized under the laws of the Philippines, sixty per centum of the capital of which is owned by citizens of the Philippines, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. No franchise or right shall be granted to any individual, firm, or corporation, except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the public interest so requires.The nationalistic spirit that pervaded these and other provisions of the Constitution are self-evident and require no further emphasis.From the Japanese occupation and the reconquest of the Archipelago, the Philippine nation emerged with its industries destroyed and its economy dislocated. It was described in this Court's opinion inCommissioner of Internal Revenue vs. Guerrero, et al.,L-20942, 22 September 1967, 21 SCRA 181, 187, penned by Justice Enrique M. Fernando, in the following terms:It was fortunate that the Japanese Occupation ended when it did. Liberation was hailed by all, but the problems faced by the legitimate government were awesome in their immensity. The Philippine treasury was bankrupt and her economy prostrate. There were no dollar-earning export crops to speak of; commercial operations were paralyzed; and her industries were unable to produce with mills, factories and plants either destroyed or their machineries obsolete or dismantled. It was a desolate and tragic sight that greeted the victorious American and Filipino troops. Manila, particularly that portion south of the Pasig, lay in ruins, its public edifices and business buildings lying in a heap of rubble and numberless houses razed to the ground. It was in fact, next to Warsaw, the most devastated city in the expert opinion of the then General Eisenhower. There was thus a clear need of help from the United States. American aid was forthcoming but on terms proposed by her government and later on accepted by the Philippines.The foregoing description is confirmed by the 1945 Report of the Committee on Territories and Insular Affairs to the United States Congress:When the Philippines do become independent next July, they will start on the road to independence with a country whose commerce, trade and political institutions have been very, very seriously damaged. Years of rebuilding are necessary before the former physical conditions of the islands can be restored. Factories, homes, government and commercial buildings, roads, bridges, docks, harbors and the like are in need of complete reconstruction or widespread repairs. It will be quite some while before the Philippine can produce sufficient food with which to sustain themselves.The internal revenues of the country have been greatly diminished by war. Much of the assessable property basis has been destroyed. Foreign trade has vanished. Internal commerce is but a faction of what it used to be. Machinery, farming implements, ships, bus and truck lines, inter-island transportation and communications have been wrecked.Shortly thereafter, in 1946, the United States 79th Congress enacted Public Law 3721, known as the Philippine Trade Act, authorizing the President of the United States to enter into an Executive Agreement with the President of the Philippines, which should contain a provision that The disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,; all forces and sources of potential energy, and other natural resources of the Philippines, and the operation of public utilities shall, if open to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled, directly or indirectly, by United States citizens.and that:The President of the United States is not authorized ... to enter into such executive agreement unless in the agreement the Government of the Philippines ... will promptly take such steps as are necessary to secure the amendment of the Constitution of the Philippines so as to permit the taking effect as laws of the Philippines of such part of the provisions of section 1331 ... as is in conflict with such Constitution before such amendment.The Philippine Congress, by Commonwealth Act No. 733, authorized the President of the Philippines to enter into the Executive Agreement. Said Act provided,inter alia, the following:ARTICLE VII1. The disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, mineral, coal, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the Philippines, and the operation of public utilities, shall, if open to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled, directly or indirectly, by United States citizens, except that (for the period prior to the amendment of the Constitution of the Philippines referred to in Paragraph 2 of this Article) the Philippines shall not be required to comply with such part of the foregoing provisions of this sentence as are in conflict with such Constitution.2. The Government of the Philippines will promptly take such steps as are necessary to secure the amendment of the constitution of the Philippines so as to permit the taking effect as laws of the Philippines of such part of the provisions of Paragraph 1 of this Article as is in conflict with such Constitution before such amendment.Thus authorized, the Executive Agreement was signed on 4 July 1946, and shortly thereafter the President of the Philippines recommended to the Philippine Congress the approval of a resolution proposing amendments to the Philippine Constitution pursuant to the Executive Agreement. Approved by the Congress in joint session, the proposed amendment was submitted to a plebiscite and was ratified in November of 1946. Generally known as the Parity Amendment, it was in the form of an Ordinance appended to the Philippine Constitution, reading as follows:Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of the foregoing Constitution, during the effectivity of the Executive Agreement entered into by the President of the Philippines with the President of the United States on the fourth of July, nineteen hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred and thirty-three, but in no case to extend beyond the third of July, nineteen hundred and seventy-four, the disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, minerals, coals, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the Philippines, and the operation of public utilities, shall, if OPEN to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled, directly or indirectly, by citizens of the United States in the same manner as to and under the same conditions imposed upon, citizens of the Philippines or corporations or associations owned or controlled by citizens of the Philippines.A revision of the 1946 Executive Agreement was authorized by the Philippines by Republic Act 1355, enacted in July 1955. The revision was duly negotiated by representatives of the Philippines and the United States, and a new agreement was concluded on 6 September 1955 to take effect on 1 January 1956, becoming known as the Laurel-Langley Agreement.This latter agreement, however, has no direct application to the case at bar, since the purchase by herein respondent Quasha of the property in question was made in 1954, more than one year prior to the effectivity of the Laurel-Langley Agreement..IBearing in mind the legal provisions previously quoted and their background, We turn to the first main issue posed in this appeal: whether under or by virtue of the so-called Parity Amendment to the Philippine Constitution respondent Quasha could validly acquire ownership of the private residential land in Forbes Park, Makati, Rizal, which is concededly classified private agricultural land.Examination of the "Parity Amendment", as ratified, reveals that it only establishes an express exception to two (2) provisions of our Constitution, to wit: (a) Section 1, Article XIII, re disposition, exploitation, development and utilization of agricultural, timber and mineral lands of the public domain and other natural resources of the Philippines; and (b) Section 8, Article XIV, regarding operation of public utilities. As originally drafted by the framers of the Constitution, the privilege to acquire and exploit agricultural landsof the public domain, and other natural resources of the Philippines, and to operate public utilities, were reserved to Filipinos and entities owned or controlled by them: but the "Parity Amendment" expressly extended the privilege to citizens of the United States of America and/or to business enterprises owned or controlled by them.No other provision of our Constitution was referred to by the "Parity Amendment"; nor Section 2 of Article XIII limiting the maximum area of public agricultural lands that could be held by individuals or corporations or associations; nor Section 5 restricting the transfer or assignment of private agricultural lands to those qualified to acquire or hold lands of the public domain (which under the original Section 1 of Article XIII meant Filipinos exclusively), save in cases of hereditary succession. These sections 2 and 5 were therefore left untouched and allowed to continue in operation as originally intended by the Constitution's framers.Respondent Quasha argues that since the amendment permitted United States citizens or entities controlled by them to acquire agricultural lands of the public domain, then such citizens or entities became entitled to acquire private agricultural land in the Philippines, even without hereditary succession, since said section 5 of Article XIII only negates the transfer or assignment of private agricultural land to individuals or entities not qualified to acquire or hold lands of the public domain. Clearly, this argument of respondent Quasha rests not upon the text of the Constitutional Amendment but upon a mere inference therefrom. If it was ever intended to create also an exception to section 5 of Article XIII, why was mention therein made only of Section 1 of Article XIII and Section 8 of Article XIV and of no other? When the text of the Amendment was submitted for popular ratification, did the voters understand that three sections of the Constitution were to be modified, when only two sections were therein mentioned?A reading of Sections 1 and 4 of Article XIII, as originally drafted by its farmers, leaves no doubt that the policy of the Constitution was to reserve to Filipinos the disposition, exploitation development or utilization of agricultural lands, public (section 1) or private (section 5), as well as all other natural resources of the Philippines. The "Parity Amendment" created exceptions to that Constitutional Policy and in consequence to the sovereignty of the Philippines. By all canons of construction, such exceptions must be given strict interpretation; and this Court has already so ruled inCommissioner of Internal Revenue vs. Guerrero, et al., L-20942, 22 September 1967, 21 SCRA 181, per Justice Enrique M. Fernando:While good faith, no less than adherence to the categorical wording of the Ordinance, requires that all the rights and privileges thus granted to Americans and business enterprises owned and controlled by them be respected, anything further would not be warranted. Nothing less would suffice but anything more is not justified.The basis for the strict interpretation was given by former President of the University of the Philippines, Hon. Vicente G. Sinco (Congressional Record, House of Representatives, Volume 1, No. 26, page 561):It should be emphatically stated that the provisions of our Constitution which limit to Filipinos the rights to develop the natural resources and to operate the public utilities of the Philippines is one of the bulwarks of our national integrity. The Filipino people decided to include it in our Constitution in order that it may have the stability and permanency that its importance requires. It is written in our Constitution so that it may neither be the subject of barter nor be impaired in the give and take of politics. With our natural resources, our sources of power and energy, our public lands, and our public utilities, the material basis of the nation's existence, in the hands of aliens over whom the Philippine Government does not have complete control, the Filipinos may soon find themselves deprived of their patrimony and living as it were, in a house that no longer belongs to them.The true extent of the Parity Amendment, as understood by its proponents in the Philippine Congress, was clearly expressed by one of its advocates, Senator Lorenzo Sumulong:It is amisconceptionto believe that under this amendment Americans will be able to acquire all kinds of natural resources of this country, andeven after the expiration of 28 years their acquired rights cannot be divested from them. If we read carefully the language of this amendment which is taken verbatim from the Provision of the Bell Act, and, which in turn, is taken also verbatim from certain sections of the Constitution, you will find out that the equality of rights granted under this amendment refers only to two subjects. Firstly, it refers to exploitation of natural resources, and secondly, it refers to the operation of public utilities. Now, when it comes to exploitation of natural resources, it must be pointed out here that, under our Constitution and under this amendment, only public agricultural land may be acquired, may be bought, so that on the supposition that we give way to this amendment and on the further supposition that it is approved by our people, let not the mistaken belief be entertained that all kinds of natural resources may be acquired by Americans because under our Constitution forest lands cannot be bought, mineral lands cannot be bought, because by explicit provision of the Constitution they belong to the State, they belong to our Government, they belong to our people. That is why we call them rightly the patrimony of our race. Even if the Americans should so desire, they can have no further privilege than to ask for a lease of concession of forest lands and mineral lands because it is so commanded in the Constitution. And under the Constitution, such a concession is given only for a limited period. It can be extended only for 25 years, renewable for another 25.So that with respect to mineral or forest lands, all they can do is to lease it for 25 years, and after the expiration of the original 25 years they will have to extend it, and I believe it can be extended provided that it does not exceed 28 years because this agreement is to be effected only as an ordinance and for the express period of 28 years.So that it is my humble belief that there is nothing to worry about insofar as our forest and mineral lands are concerned.Now, coming to the operation of public utilities, as every member of the Congress knows, it is also for a limited period, under our Constitution, for a period not exceeding 50 years. And since this amendment is intended to endure only for 28 years, it is my humble opinion that when Americans try to operate public utilities they cannot take advantage of the maximum provided in the Constitution but only the 28 years which is expressly provided to be the life of this amendment.There remains for us to consider the case of our public agricultural lands. To be sure, they may be bought, and if we pass this amendment, Americans may buy our public agricultural lands, but the very same Constitution applying even to Filipinos, provides that the sale of public agricultural lands to a corporation can never exceed one thousand and twenty-four hectares. That is to say, if an American corporation, and American enterprise, should decide to invest its money in public agricultural lands, it will be limited to the amount of 1,024 hectares, no more than 1,024 hectares' (Emphasis supplied).No views contrary to these were ever expressed in the Philippine Legislature during the discussion of the Proposed Amendment to our Constitution, nor was any reference made to acquisition of private agricultural lands by non-Filipinos except by hereditary succession. On the American side, it is significant to observe that the draft of the Philippine Trade Act submitted to the House of Representatives by Congressman Bell, provided in the first Portion of Section 19 the following:SEC. 19. Notwithstanding any existing provision of the constitution and statutes of the Philippine Government, citizens and corporations of the United States shall enjoy in the Philippine Islands during the period of the validity of this Act, or any extension thereof by statute or treaty, the same rights as toproperty, residence, and occupationas citizens of the Philippine Islands ...But as finally approved by the United States Congress, the equality as to "property residence and occupation" provided in the bill was eliminated and Section 341 of the Trade Act limited such parity to the disposition, exploitation, development, and utilization of lands of the public domain, and other natural resources of the Philippines (V. ante, page 5 of this opinion).Thus, whether from the Philippine or the American side, the intention was to secure parity for United States citizens, only in two matters: (1) exploitation, development and utilization of public lands, and other natural resources of the Philippines; and (2) the operation of public utilities. That and nothing else.Respondent Quasha avers that as of 1935 when the Constitution was adopted, citizens of the United States were already qualified to acquire public agricultural lands, so that the literal text of section 5 must be understood as permitting transfer or assignment of private agricultural lands to Americans even without hereditary succession. Such capacity of United States citizens could exist only during the American sovereignty over the Islands. For the Constitution of the Philippines was designed to operate even beyond the extinction of the United States sovereignty, when the Philippines would become fully independent. That is apparent from the provision of the original Ordinance appended to the Constitution as originally approved and ratified. Section 17 of said Ordinance provided that:(17) Citizens and corporations of the United States shall enjoyin the Commonwealth of the Philippinesall the civil rights of the citizens and corporations, respectively, thereof. (Emphasis supplied)The import of paragraph (17) of the Ordinance was confirmed and reenforced by Section 127 of Commonwealth Act 141 (the Public Land Act of 1936) that prescribes:Sec. 127. During the existence and continuance of the Commonwealth,and before the Republic of the Philippines is established, citizens and corporations of the United States shall enjoy the same rights granted to citizens and corporations of the Philippines under this Act.thus clearly evidencing once more that equal rights of citizens and corporations of the United States to acquire agricultural lands of the Philippines vanished with the advent of the Philippine Republic. Which explains the need of introducing the "Parity Amendment" of 1946.It is then indubitable that the right of United States citizens and corporations to acquire and exploit private or public lands and other natural resources of the Philippines was intended to expire when the Commonwealth ended on 4 July 1946. Thereafter, public and private agricultural lands and natural resources of the Philippines were or became exclusively reserved by our Constitution for Filipino citizens. This situation lasted until the "Parity Amendment", ratified in November, 1946, once more reopened to United States citizens and business enterprises owned or controlled by them the lands of thepublic domain, the natural resources of the Philippines, and the operation of the public utilities, exclusively, but not the acquisition or exploitation of private agricultural lands, about which not a word is found in the Parity Amendment..Respondent Quasha's pretenses can find no support in Article VI of the Trade Agreement of 1955, known popularly as the Laurel-Langley Agreement, establishing a sort of reciprocity rights between citizens of the Philippines and those of the United States, couched in the following terms:ARTICLE VI2. The rights provided for in Paragraph I may be exercised, in the case of citizens of the Philippines with respect to natural resources in the United States which are subject to Federal control or regulations, only through the medium of a corporation organized under the laws of the United States or one of the States hereof and likewise, in the case of citizens of the United States with respect to natural resources in thepublic domainin the Philippines only through the medium of a corporation organized under the laws of the Philippines and at least 60% of the capital stock of which is owned or controlled by citizens of the United States. This provision, however,does not affect the rightof citizens of the United States to acquire or own private agricultural lands in the Philippines or citizens of the Philippines to acquire or own land in the United States which is subject to the jurisdiction of the United States and not within the jurisdiction of any state and which is not within the public domain. The Philippines reserves the right to dispose of the public lands in small quantities on especially favorable terms exclusively to actual settlers or other users who are its own citizens. The United States reserves the right to dispose of its public lands in small quantities on especially favorable terms exclusively to actual settlers or other users who are its own citizens or aliens who have declared their intention to become citizens. Each party reserves the right to limit the extent to which aliens may engage in fishing, or engage in enterprises which furnish communications services and air or water transport. The United States also reserves the right to limit the extent to which aliens may own land in its outlying territories and possessions, but the Philippines will extend to American nationals who are residents of any of those outlying territories and possessions only the same rights, with respect to, ownership of lands, which are granted therein to citizens of the Philippines. The rights provided for in this paragraph shall not, however, be exercised by either party so as to derogate from the rights previously acquired by citizens or corporations or associations owned or controlled by citizens of the other party.The words used in Article VI to the effect that ... This provision does not affect theright of citizen of the United States to acquire or own private agricultural lands in the Philippines, or citizens of the Philippines to acquire or own land in the United States which is subject to the jurisdiction of the United States ...must be understood as referring to rights of United States citizens to acquire or own private agricultural lands before the independence of the Philippines since the obvious purpose of the article was to establish rights of United States and Filipino citizens on a basis of reciprocity. For as already shown, no such right to acquire or own private agricultural lands in the Philippines has existed since the independent Republic was established in 1946. The quoted expressions of the Laurel-Langley Agreement could not expand the rights of United States citizens as to public agricultural lands of the Philippines to private lands, when the Parity Amendment and the Constitution authorize such United States citizens and business entities only to acquire and exploitagricultural lands of the public domain. If the reopening of only public lands to Americans required a Constitutional Amendment, how could a mere Trade Agreement, like the Laurel-Langley, by itself enable United States citizens to acquire and exploit private agricultural lands, a right that ceased to exist since the independence of the Philippines by express prescription of our Constitution?We turn to the second issue involved in this appeal: On the assumption that respondent Quasha's purchase of the private agricultural land involved is valid and constitutional, will or will not his rights expire on 3 July 1974?For the solution of this problem, We again turn to the "Parity Amendment". Under it,Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of the foregoing Constitution,during the effectivity of the Executive Agreement entered into bythe President of the Philippines with the President of the United Stateson the fourth of July, nineteen hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred and thirty-three,but in no case to extend beyond the third of July, nineteen hundred and seventy-four, the disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, minerals, coals, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the Philippines, and the operation of public utilities, shall, if open to any person, be open to citizens of the United states and to all forms of business enterprise owned or controlled, directly or indirectly, by citizens of the United States in the same manner as to, and under the same conditions imposed upon, citizens of the Philippines or corporations or associations owned or controlled by citizens of the Philippines. (Emphasis supplied)It is easy to see that all exceptional rights conferred upon United States citizens and business entities owned or controlled by them, under the Amendment, are subject to one and the same resolutory term or period: they are to last "during the effectivity of the Executive Agreement entered into on 4 July 1946", "but in no case to extend beyond the, third of July, 1974". None of the privileges conferred by the "Parity Amendment" are excepted from this resolutory period.This limitation of time is in conformity with Article X, Section 2, of the Philippine Trade Act of 1946, as embodied in Commonwealth Act No. 733. It says:ARTICLE X2. This Agreement shall have no effect after 3 July 1974. It may be terminated by either the United States or the Philippines at any time, upon not less than five years' written notice. It the President of the United States or the President of the Philippines determines and proclaims that the other Country has adopted or applied measures or practices which would operate to nullify or impair any right or obligation provided for in this Agreement, then the Agreement may be terminated upon not less than six months' written notice.Respondent Quasha argues that the limitative period set in the "Parity Amendment" should be understood not to be applicable to the disposition, or correlative acquisition, of alienable agricultural lands of the public domain, since such lands can be acquired in full ownership, in which event, under Article 428 of the Civil Code of Philippines ART, 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law.The owner has also a right of action against the holder and possessor of the thing in order to recover it.and that since any period or condition which produces the effect of loss or deprivation of valuable rights is in derogation of due process of law, there must be "a law which expressly and indubitably limits and extinguishes the ownership of non-citizens over private agricultural lands situated in the Philippines validly acquired under the law existing at the time of acquisition."Strangely enough, this argument ignores the provisions of the "Parity Amendment" prescribing that the disposition and exploitation, etc. of agricultural lands of the public domainare in no caseto extend beyond the third of July 1974. This limitation already existed when Quasha in 1954 purchased the Forbes Park property, and the acquisition was subject to it. If the Philippine government can not dispose of its alienable public agricultural lands beyond that date under the "Parity Amendment", then, logically, the Constitution, as modified by the Amendment, only authorizes either of two things: (a) alienation or transfer of rights less than ownership or (b) a resoluble ownership that will be extinguished not later than the specified period. For the Philippine government to dispose of the public agricultural land for an indefinite time would necessarily be in violation of the Constitution. There is nothing in the Civil Law of this country that is repugnant to the existence of ownership for a limited duration; thus the title of a "reservista" (ascendant inheriting from a descendant) inreserva troncal, under Article 891 of the Civil Code of the Philippines, is one such owner, holding title and dominion, although under condition subsequent; he can do anything that a genuine owner can do, until his death supervenes with "reservataries surviving", i.e., relatives within the third degree (Edroso vs. Sablan, 25 Phil. 295; Lunsod vs. Ortega, 46 Phil. 661, 695). In truth, respondent himself invokes Article 428 of the Civil Code to the effect that "the owner has the right to enjoy and dispose of a thing, without otherlimitations than those established by law". One such limitation is the period fixed on the "Parity Amendment", which forms part of the Constitution, the highest law of the land. How then can he complain of deprivation of due process?That the legislature has not yet determined what is to be done with the property when the respondent's rights thereto terminate on 3 July 1974 is irrelevant to the issues in this case. The law, making power has until that date full power to adopt the apposite measures, and it is expected to do so.One last point: under the "Parity Amendment" the disposition, exploitation, development and utilization of lands of the public domain, and other natural resources of the Philippines, and the operation of public utilities are open to citizens of the United States and to all forms of business enterprisesowned or controlled, directly or indirectly, by citizens of the United Stateswhile under the Philippine Constitution (section 1, Article XIII, and section 8, Article XIV) utilization of such lands, natural resources and public utilities are open to citizens of the Philippines or to corporations or associations at leastsixty per centum of the capital of which is owned by such citizens...It is thus apparent that American business enterprises are more favored than Philippine organization during the period of parity in that, first, they need not be owned by American citizens up to 60% of their capital; all that is required is that they becontrolledby United States citizens, a control that is attained by ownership of only 51%aof the capital stock; and second, that the control by United States citizens may be direct orindirect(voting trusts, pyramiding, etc.) which indirect control is not allowed in the case of Philippine nationals.That Filipinos should be placed under the so-called Parity in a more disadvantageous position than United States citizens in the disposition, exploitation, development and utilization of the public lands, forests, mines, oils and other natural resources oftheir own countryis certainly rank injustice and inequity that warrants a most strict interpretation of the "Parity Amendment", in order that the dishonorable inferiority in which Filipinos find themselves at present in the land of their ancestors should not be prolonged more than is absolutely necessary.FOR THE FOREGOING REASONS, the appealed decision of the Court of First Instance of Rizal is hereby reversed and set aside; and judgment is rendered declaring that, under the "Parity Amendment" to our Constitution, citizens of the United States and corporations and business enterprises owned or controlled by them can not acquire and own, save in cases of hereditary succession, private agricultural lands in the Philippines and that all other rights acquired by them under said amendment will expire on 3 July 1974.AYOG v. CUSIRepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-46729 November 19, 1982LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE ABAQUETA, BERNARDINO ADORMEO, VIDAL ALBANO, FELICIANO ARIAS, ANTONIO BALDOS, MAXIMO BALDOS, ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA, SR., HERACLEO CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA VDA. DE DIANNA, DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN DIVINAGRACIA, LEODEGARDIO DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS EMPERADO, PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS GARLET, TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA NAQUILA, TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY, SR., DIEGO ONGRIA, ERNESTO PANARES, VICENTE PATULOT, IGNACIA RIBAO, JUANO RICO, JESUS ROSALITA, ARMANDO TANTE and ANSELMO VALMORES,petitioners,vs.JUDGE VICENTE N. CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF OF DAVAO, and BINAN DEVELOPMENT CO., INC., respondents. MINISTER OF NATURAL RESOURCES and DIRECTOR OF LANDS,intervenors.AQUINO,J.:This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a private corporation from purchasing public lands) to a1953sales award made by the Bureau of Lands, for which a sales patent and Torrens title were issued in1975, and to the1964decision of the trial court, ejecting some of the petitioners from the land purchased, which decision was affirmed in 1975 by the Court of Appeals. That legal question arises under the following facts:On January 21, 1953, the Director of Lands, after a bidding, awarded to Bian Development Co., Inc. on the basis of its 1951 Sales Application No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan, Guianga (Baguio District), Davao City with an area of about two hundred fifty hectares. Some occupants of the lot protested against the sale. The Director of Lands in his decision of August 30, 1957 dismissed the protests and ordered the occupants to vacate the lot and remove their improvements. No appeal was made from that decision.The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are now petitioners herein) entered the land only after it was awarded to the corporation and, therefore, they could not be regarded asbona fideoccupants thereof. The Director characterized them as squatters. He found that some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay vs. CA). He issued a writ of execution but the protestants defied the writ and refused to vacate the land (p. 28, Rollo of L-43505, Okay vs. CA).**Because the alleged occupants refused to vacate the land, the corporation filed against them on February 27, 1961 in the Court of First Instance of Davao, Civil Case No. 3711, an ejectment suit (accion publiciana). The forty defendants were Identified as follows:1. Vicente Abaqueta 21. Eniego Garlic2. Candido Abella 22. Nicolas Garlic3. Julio Ayog 23. Rufo Garlic4. Arcadio Ayong 24. Alfonso Ibales5. Generoso Bangonan 25. Julian Locacia6. Lomayong Cabao 26. Filomeno Labantaban7. Jose Catibring 27. Arcadio Lumantas8. Teodolfo Chua 28. Santos Militante9. Guillermo Dagoy 29. Toribio Naquila10. Anastacia Vda. de Didal 30. Elpidio Okay11. Alfredo Divinagracia 31. Guillermo Omac12. Silverio Divinagracia 32. Emilio Padayday13. Galina Edsa 33. Marcosa Vda. de Rejoy14. Jesus Emperado 34. Lorenzo Rutsa15. Porfirio Enoc 35. Ramon Samsa16. Benito Ente 36. Rebecca Samsa17. German Flores 37. Alfeao Sante18. Ciriaco Fuentes 38. Meliton Sante19. Pulong Gabao 39. Amil Sidaani20. Constancio Garlic 40. Cosme VillegasThat ejectment suit delayed the issuance of the patent. The trial court found that the protests of twenty of the abovenamed defendants were among those that were dismissed by the Director of Lands in his 1957 decision already mentioned.OnJuly 18, 1961the purchase price of ten thousand pesos was fully paid by Binan Development Co., Inc. OnNovember 10, 1961, an official of the Bureau of Lands submitted a final investigation report wherein it was stated that the corporation had complied with the cultivation and other requirements under the Public Land Law and had paid the purchase price of the land (p. 248, Rollo).It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was issued to the corporation for that lot with a reduced area of 175.3 hectares. The patent was registered. Original Certificate of Title No. P-5176 was issued to the patentee.The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural Resources, recommending approval of the sales patent, pointed out that the purchaser corporation had complied with the said requirements long before the effectivity of the Constitution, that the land in question was free from claims and conflicts and that the issuance of the patent was in conformity with the guidelines prescribed in Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad Santos and was an exception to the prohibition in section 11, Article XIV of the Constitution (p. 258, Rollo).Secretary of Natural Resources Jose J. Leido, Jr., in approving the patent on August 14, 1975, noted that the applicanthad acquired a nested rightto its issuance (p. 259, Rollo).Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of forty), namely, Julio Ayog, Guillermo Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose Emperado, Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton Sante, Ramon Samsa, Rebecca Samsa, Arcadio Sarumines and Felix Tahantahan, testified that they entered the disputed land long before 1951 and that they planted it to coconuts, coffee, jackfruit and other fruit trees. (p. 28, Record on Appeal).The trial court did not give credence to their testimonies. It believed the report of an official of the Bureau of Lands that in 1953 the land was free from private claims and conflicts and it gave much weight to the decision of the Director of Lands dismissing the protests of the defendants against the sales award (p. 30, Record on Appeal).Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that the plantings on the land could not be more than ten years old, meaning that they were not existing in 1953 when the sales award was made. Hence, the trial court ordered the defendants to vacate the land and to restore the possession thereof to tile company. The Court of Appeals affirmed that judgment on December 5,1975in its decision in Binan Development Co., Inc. vs, Sante, CA-G.R. No. 37142- R. The review of the decision was denied by this Court on May 17,1976in Elpidio Okay vs. Court of Appeals, L-43505.After the record was remanded to the trial court, the corporation filed a motion for execution. The defendants, some of whom are now petitioners herein, opposed the motion. They contended that the adoption of the Constitution, which took effect on January 17, 1973, was a supervening fact which rendered it legally impossible to execute the lower court's judgment. They invoked the constitutional prohibition, already mentioned, that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area."The lower court suspended action on the motion for execution because of the manifestation of the defendants that they would file a petition for prohibition in this Court. On August 24, 1977, the instant prohibition action was filed. Some of the petitioners were not defendants in the ejectment case.We hold that the said constitutional prohibition has no retroactive application to the sales application of Bian Development Co., Inc. because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect.That vested right has to be respected. lt could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioners' prohibition action is barred by the doctrine of vested rights in constitutional law."A right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J. 955, Note 46, No. 6) or "some right or interest in property which has become fixed and established and is no longer open to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the police power" (16 C.J.S. 1177-78).It has been observed that, generally, the term "vested right" expresses the concept of present fixed interest, which in right reason and natural justice should be protected against arbitrary State action, or an innately just and imperative right which an enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the Constitution took effect, had fully complied with all his obligations under the Public Land Act in order to entitle him to a sales patent, there would seem to be no legal or equitable justification for refusing to issue or release the sales patent (p. 254, Rollo).In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land and to him the area limitation in the new Constitution would not apply.In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements were fulfilled before the new Constitution took effect but the full payment of the price was completed after January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p. 256, Rollo).Such a contemporaneous construction of the constitutional prohibition by a high executive official carries great weight and should be accorded much respect. It is a correct interpretation of section 11 of Article XIV.In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land in question had become fixed and established and was no longer open to doubt or controversy.Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from the public domain. The corporation's right to obtain a patent for that land is protected by law. It cannot be deprived of that right without due process (Director of Lands vs. CA, 123 Phil. 919).As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot entertain petitioners' contention that many of them by themselves and through their predecessors-in-interest have possessed portions of land even before the war. They should have filed homestead or free patent applications.Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an obstacle to the implementation of the trial court's 1964 final and executory judgment ejecting the petitioners. On that issue, we have no choice but to sustain its enforceability.Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law grinds the faces of the poor, the administrative authorities should find ways and means of accommodating some of the petitioners ifthey are landless and are really tillers of the soilwho in the words of President Magsaysay deserve a little more food in their stomachs, a little more shelter over their heads and a little more clothing on their backs. The State should endeavor to help the poor who find it difficult to make both ends meet and who suffer privations in the universal struggle for existence.A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The common man should be assisted in possessing and cultivating a piece of land for his sustenance, to give him social security and to enable him to achieve a dignified existence and become an independent, self-reliant and responsible citizen in our democratic society.To guarantee him that right is to discourage him from becoming a subversive or from rebelling against a social order where, as the architect of the French Revolution observed, the rich are choking with the superfluities of life but the famished multitude lack the barest necessities.Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage "owner-cultivatorship and the economic family- size farm" and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons had owned social unrest.Petitioners' counsel claims that Bian Development Co., Inc. seeks to execute the judgment in Civil Case No. 3711, the ejectment suit from which this prohibition case arose, against some of thepetitioners who were not defendants in that suit(p. 126, Rollo).Those petitioners are not successors-in-interest of the defendants in the ejectmentsuit. Nor do they derive their right of possession from the said defendants. Those petitioners occupy portions of the disputed land distinct and separate from the portions occupied by the said defendants.We hold that judgment cannot be enforced against the said petitioners who were not defendants in that litigation or who were not summoned and heard in that case. Generally, "it is an axiom of the law that no man shall be affected by proceedings to which he is a stranger" (Ed. A. Keller & Co. vs Ellerman & Bucknall Steamship Co., 38 Phil. 514, 520).To enforce the judgment against those who were not parties to the caseand who occupy portions of the disputed land distinct and separate from the portions occupied by the defendants in the ejectment suit,would be violative of due process of law, the law which, according to Daniel Webster in his argument in the Dartmouth College case, is the law of the land, a law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. "The meaning is, that every citizen shall hold his life, liberty, property, and immunities, under the protection of the general rules which govern society." (Cited in Lopez vs. Director of Lands, 47 Phil. 23, 32. See Gatchalian vs. Arlegui, L-35615 and Tang Tee vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234 and Berses vs. Villanueva, 25 Phil. 473.)Contempt incident.-During the pendency of this case, or at about four o'clock in the morning of December 12, 1978, Ciriaco Tebayan, Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of the Crown Fruits and Cannery Corporation, plowed or bulldozed with their tractors a portion of the disputed land which was occupied by Melquiades Emberador, one of the petitioners herein. The disputed land was leased by Bian Development Co., Inc. to the canning corporation.The four tractor drivers destroyed the improvements thereon worth about five thousand pesos consisting of coffee, coconut and banana plants. Emberador was in the hospital at the time the alleged destruction of the improvements occurred. However, it should be noted that Emberador was not expressly named as a defendant in the ejectment suit. Apparently, he is not included in the trial court's decision although he was joined as a co-petitioner in this prohibition case.The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto Garcia, the manager of Bian Development Co., Inc., be declared in contempt of court for having disregarded the restraining order issued by this Court on August 29, 1977, enjoining specifically Judge Vicente N. Cusi and the provincial sheriff from enforcing the decision in the ejectment suit, Civil Case No. 3711 (pp. 46-47, 138- 141, Rollo).Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge Antonio M. Martinez of the Court of First Instance of Davao. Judge Martinez found that the plowing was made at the instance of Garcia who told the barrio captain, petitioner Lausan Ayog, a Bagobo, that he (Garcia) could not wait anymore for the termination of this case.The record shows that on April 30, 1979 or four months after the said incident, Emberador, in consideration of P3,500, as the value of the improvements on his land, executed a quitclaim in favor of the Crown Fruits and Cannery Corporation (Exh. 1, 2 and 3).We hold that no contempt was committed. The temporary restraining order was not directed to Bian Development Co., Inc. its officers, agents or privies. Emberador was not named specifically in the trial court's judgment as one of the occupants to be ejected.For the redress of whatever wrong or delict was committed against Emberador by reason of the destruction of his improvements, his remedy is not in a contempt proceeding but in some appropriate civil and criminal actions against the destroyer of the improvements.In resume, we find that there is no merit in the instant prohibition action. The constitutional prohibition relied upon by the petitioners as a ground to stop the execution of the judgment in the ejectment suit has no retroactive application to that case and does not divest the trial court of jurisdiction to enforce that judgment.WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said judgment cannot be enforced against those petitioners herein who were not defendants in the ejectment case, Civil Case No. 3711, and over whom the lower court did not acquire jurisdiction. The contempt proceeding is also dismissed. No costs.SO ORDERED.

REPUBLIC v. VILLANUEVARepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-55289 June 29, 1982REPUBLIC OF THE PHILIPPINES, represented by the Director of Lands,petitioner-appellant,vs.JUDGE CANDIDO P. VILLANUEVA, of the Court of First Instance of Bulacan, Malolos Branch VII, and IGLESIA NI CRISTO, as a corporation sole, represented by ERAO G. MANALO, as Executive Minister,respondents-appellees.AQUINO,J.:Like L-49623, Manila Electric Company vs. Judge Castro-Bartolome, this case involves the prohibition in section 11, Article XIV of the Constitution that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area".Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with an area of 313 square meters and an assessed value of P1,350 were acquired by the Iglesia Ni Cristo on January 9, 1953 from Andres Perez in exchange for a lot with an area of 247 square meters owned by the said church (Exh. D).The said lots were already possessed by Perez in 1933. They are not included in any military reservation. They are inside an area which was certified as alienable or disposable by the Bureau of Forestry in 1927. The lots are planted to santol and mango trees and banana plants. A chapel exists on the said land. The land had been declared for realty tax purposes. Realty taxes had been paid therefor (Exh. N).On September 13, 1977, the Iglesia Ni Cristo, a corporation sole, duly existing under Philippine laws, filed with the Court of First Instance of Bulacan an application for the registration of the two lots. It alleged that it and its predecessors-in-interest had possessed the land for more than thirty years. It invoked section 48(b) of the Public Land Law, which provides:Chapter VIII.Judicial confirmation of imperfect or incomplete titles.xxx xxx xxxSEC. 48. The following-describedcitizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefore, under the Land Register Act, to wit:xxx xxx xxx(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under abona fideclaim of acquisition of ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter." (As amended by Republic Act No. 1942, approved on June 22, 1957.)The Republic of the Philippines, through the Direct/r of Lands, opposed the application on the grounds that applicant, as a private corporation, is disqualified to hold alienable lands of the public domain, that the land applied for is public land not susceptible of private appropriation and that the applicant and its predecessors-in-interest have not been in the open, continuous, exclusive and notorious possession of the land since June 12, 1945.After hearing, the trial court ordered the registration of the two lots, as described in Plan Ap-04-001344 (Exh. E), in the name of the Iglesia Ni Cristo, a corporation sole, represented by Executive Minister Erao G. Manalo, with office at the corner of Central and Don Mariano Marcos Avenues, Quezon City, From that decision, the Republic of the Philippines appealed to this Court under Republic Act No. 5440. The appeal should be sustained.As correctly contended by the Solicitor General, the Iglesia Ni Cristo, as a corporation sole or a juridical person, is disqualified to acquire or hold alienable lands of the public domain, like the two lots in question, because of the constitutional prohibition already mentioned and because the said church is not entitled to avail itself of the benefits of section 48(b) which applies only to Filipino citizens or natural persons. A corporation sole (an "unhappy freak of English law") has no nationality (Roman Catholic Apostolic Adm. of Davao, Inc. vs. Land Registration Commission, 102 Phil. 596. See Register of Deeds vs. Ung Siu Si Temple, 97 Phil. 58 and sec. 49 of the Public Land Law).The contention in the comments of the Iglesia Ni Cristo (its lawyer did not file any brief) that the two lots are private lands, following the rule laid down in Susi vs. Razon and Director of Lands, 48 Phil. 424, is not correct. What was considered private land in theSusicase was a parcel of land possessed by a Filipino citizensince time immemorial,as inCario vs. Insular Government,212 U.S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132. The lots sought to be registered in this case do not fall within that category. They are still public lands. A land registration proceeding under section 48(b) "presupposes that the land is public" (Mindanao vs. Director of Lands, L-19535, July 10, 1967, 20 SCRA 641, 644).As held inOh Cho vs. Director of Lands, 75 Phil. 890, "all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his predecessors-in-interest since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain or that it had been a private property even before the Spanish conquest. "InUy Un vs. Perez, 71 Phil. 508, it was noted that the right of an occupant of public agricultural land to obtain a confirmation of his title under section 48(b) of the Public Land Law is a "derecho dominical incoativo"and that before the issuance of the certificate of title the occupant is not in the juridical sense the true owner of the land since it still pertains to the State.The lower court's judgment is reversed and set aside. The application for registration of the Iglesia Ni Cristo is dismissed with costs against said applicant.SO ORDERED.

MERALCO v. BARTOLOMERepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-49623 June 29, 1982MANILA ELECTRIC COMPANY,petitioner-appellant,vs.JUDGE FLORENLIANA CASTRO-BARTOLOME of the Court of First Instance of Rizal, Makati Branch XV, and REPUBLIC OF THE PHILIPPINES,respondent-appellees.AQUINO,J.:pThis case involves the prohibition in section 11, Article XIV of the Constitution that "no private coporation or associaiton may hold alienable lands of the public domain except by lease not to exceed on ethousand hectares in area".*That prohibition is not found in the 1935 Constitution.The Manila Electric Company, a domestic corporation organized under Philippine laws, more than sixty percent of whose capital stock is owned by Filipino citizens, in its application filed on December 1, 1976 in the Makati branch of the Court of First Instance of Rizal, prayed for the confirmation of its title to two lots with a total area of one hundred sixty-five square meters, located at Tanay, Rizal with an assessed value of P3,270 (LRC Case No. N-9485, LRC No. N-50801).The Republic of the Philippines opposed theh application on the grounds that the applicant, as a private corporation,is disqualified to hold alienable public lands and that the applicant and its prredecessors-in-interest have not been in the open, continuous, exclusive and notorious possession and occupation of the land for at least thirty years immediately preceding the filing of the application (pp. 65-66,Rollo).After the trial had commenced, the Province of rizal and the Municipality of Tanay filed a joint opposition to the application on the ground that one of the lots, Lot No. 1165 of the Tanay cadastre, would be needed for the widening and improvement of Jose Abad Santos and E.Quirino Streetsin the town of Tanay.The land was possessed by Olimpia ramos before the Pacific war which broke out in 1941. On July 3, 1947, Ramos sold the land to the spouses Rafael Piguing and MInerva Inocencio (Exh. K). The Piguing sapouses constructed a house therereon. Because the Meralco had installed the "anchor guy" of its steel post on the land, the Piguing spouses sold the lot to the Meralco on August 13, 1976.The said land was included in the1968 cadastral survey made in Tanacy by the Bureau of Lands, Plan AP-04-000902 (Exh. F and H) and was divided into two lots, Lots Nos. 1164 and 1165, so as to segregate Lot No. 1165 which would be used to widen the two street serving as the land's eastern and southern boundaries.The land was declared for realty tax purposes since 1945 and taxes had been paid thereon up to 1977. It is residential in character as distinguished from a strictly agricultural land. It is not included in any military reservation. Since 1927, it has formed part of the alienable portion of the public domain.After trial, the lowre court rendered a decision dismissing the application because in its opinion the Meralco is not qualified to apply for the registration of the said land since under section 48(b) of the Public Land Law only Filipino citizens or natural persons can apply for judicial confirmationof their imperfect titles to public land. The Meralco is a juridical person. The trial court assumed that the land which it seeks to register ispublic land.From that decision, the Meralco appealed to this Court under Republic Act No. 5440.In contends that the said land, after having been possessed in the concept of owner by Olimpia Ramos and the Piguing spouses for more than thirty years, had becomeprivate landin the hands of the latter, and, therefore, the constitutional prohibition, banning a private corporation from acquiring alienable public land, is not applicable to the said land.The Meralco further contends that it has invoke section 48(b) of the Public Land Law, not for itself, but for the Piguing spouses who, as Filipino citizens, could secure a judicial confirmation of their imperfect title to the land.In reply to these contentions, the Solicitor General counters that the said land is not private land because the Meralco and its predecessors-in-interest have no composition title from the Spanish government nor possessory information title or any other means for the acquisition of public lands such as grants or patents (Republic vs. Court of Appeals and De Jesus, L-40912, September 30, 1976, 73 SCRA 146, 157; Director of Lands vs. Reyes, L-27594, November 28, 1975, and Alinsunurin vs. Director of Lands, L-28144, November 28, 1975; 68 SCRA 177; 195; Lee Hong Hok vs. David, L-30389, December 27, 1972, 48 SCRA 372, 378-9; Director of Lands vs. Court of Appeals and Raymundo, L-29575, April 30, 1971, 38 SCRA 634, 639; Padilla vs. Reyes and Director of Lands, 60 Phil. 967, 969; Heirs of Datu Pendatun vs. Director of Lands, 59 Phil. 600, 603).The Public Land Law provides:CHAPTER VIII. Judicial confirmation of imperfect or incomplete titles.xxx xxx xxxSEC. 48. The following describedcitizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:xxx xxx xxx(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under abona fideclaim of acquisition of ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (As amended by Republic Act No. 1942, approved on June 22, 1957.)xxx xxx xxxSEC. 49. No person claiming title to lands of the public domain not in possession of the qualifications specified in the last preceding section may apply for the benefits of this chapter.We hold that, as between the State and the Meralco, the said land is still public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still public land and the Meralco, as a juridical person, is disqualified to apply for its registration under section 48(b), Meralco's application cannot