December 4, 1967

G.R. No. L-15829ROMAN R. SANTOS, petitioner-appellee, vs.HON. FLORENCIO MORENO, as Secretary of Public Works and Communications and JULIAN C. CARGULLO, respondents-appellants.Gil R. Carlos and Associates for petitioner-appellee.Office of the Solicitor General for respondents-appellants.BENGZON, J.P., J.:

THE APPEALThe Honorable Secretary of Public Works & Communications appeals from the decision of the Court of First Instance of Manila declaring of private ownership certain creeks situated in barrio San Esteban, Macabebe, Pampanga.

THE BACKGROUNDThe Zobel family of Spain formerly owned vast track of marshland in the municipality of Macabebe, Pampanga province. Called Hacienda San Esteban, it was administered and managed by the Ayala y Cia. From the year 1860 to about the year 1924 Ayala y Cia., devoted the hacienda to the planting and cultivation of nipa palms from which it gathered nipa sap or "tuba." It operated a distillery plant in barrio San Esteban to turn nipa tuba into potable alcohol which was in turn manufactured into liquor.

Accessibility through the nipa palms deep into the hacienda posed as a problem. Ayala y Cia., therefore dug canals leading towards the hacienda's interior where most of them interlinked with each other. The canals facilitated the gathering of tuba and the guarding and patrolling of the hacienda by security guards called "arundines." By the gradual process of erosion these canals acquired the characteristics and dimensions of rivers.

In 1924 Ayala y Cia shifted from the business of alcohol production to bangus culture. It converted Hacienda San Esteban from a forest of nipa groves to a web of fishponds. To do so, it cut down the nipa palm, constructed dikes and closed the canals criss-crossing the hacienda.

Sometime in 1925 or 1926 Ayala y Cia., sold a portion of Hacienda San Esteban to Roman Santos who also transformed the swamp land into a fishpond. In so doing, he closed and built dikes across Sapang Malauling Maragul, Quiñorang Silab, Pepangebunan, Bulacus, Nigui and Nasi.

The closing of the man-made canals in Hacienda San Esteban drew complaints from residents of the surrounding communities. Claiming that the closing of the canals caused floods during the rainy season, and that it deprived them of their means of transportation and fishing grounds, said residents demanded re-opening of those canals. Subsequently, Mayor Lazaro Yambao of Macabebe, accompanied by policemen and some residents went to Hacienda San Esteban and opened the closure dikes at Sapang Malauling Maragul Nigui and Quiñorang Silab. Whereupon, Roman Santos filed Civil Case No. 4488 in the Court of First Instance of Pampanga which preliminarily enjoined Mayor Yambao and others from demolishing the dikes across the canals. The municipal officials of Macabebe countered by filing a complaint (docketed as Civil Case No. 4527) in the same court. The Pampanga Court of First Instance rendered judgment in both cases against Roman Santos who immediately elevated the case to the Supreme Court.

In the meantime, the Secretary of Commerce and Communications[[1]] conducted his own investigation and found that the aforementioned six streams closed by Roman Santos were natural, floatable and navigable and were utilized by the public for transportation since time immemorial. He consequently ordered Roman Santos on November 3, 1930 to demolish the dikes across said six streams. However, on May 8, 1931 the said official revoked his decision of November 3, 1930 and declared the streams in question privately owned because they were artificially constructed. Subsequently, upon authority granted under Act 3982 the Secretary of Commerce and Communications entered into a contract with Roman Santos whereby the former recognized the private ownership of Sapang Malauling Maragul, Quiñorang Silab, Pepangebunan, Bulacus, Nigui and Nasi and the latter turned over for public use two artificial canals and bound himself to maintain them in navigable state. The Provincial Board of Pampanga and the municipal councils of Macabebe and Masantol objected to the contract. However, the Secretary of Justice, in his opinion dated March 6, 1934, upheld its legality. Roman Santos withdraw his appeals in the Supreme Court.

With respect to the portion of Hacienda San Esteban still owned by the Zobel family, the municipal authorities of Macabebe filed in 1930 an administrative complaint, in the Bureau of Public Works praying for the opening of the dikes and dams across certain streams in Hacienda San Esteban. Whereupon, the district engineer of Pampanga and a representative of the Bureau of Public Works conducted investigations. In the meantime, the Attorney General, upon a query from the Secretary of Commerce and Communications, rendered an opinion dated October 11, 1930 sustaining the latter's power to declare streams as publicly owned under Sec. 4 ofAct 2152, as amended by Act 3208.On September 29, 1930 the investigator of the Bureau of Public Works, Eliseo Panopio, submitted his report recommending the removal of the dikes and dams in question. And on the basis of said report, the Secretary of Commerce and Communications rendered his decision on November 3, 1930 ordering Ayala y Cia., to demolish the dikes and dams across the streams named therein situated in Hacienda San Esteban. Ayala y Cia., moved for reconsideration, questioning the power of the Secretary of Commerce and Communications to order the demolition of said dikes.

Days before the Secretary of Commerce and Communications rendered his aforementioned decision, Ayala y Cia., thru counsel, made representations with the Director of Public Works for a compromise agreement. In its letter dated October 11, 1930, Ayala y Cia., offered to admit public ownership of the following creeks:

Antipolo, Batasan Teracan, Biuas or Batasan, Capiz, Carbon, Cutut, Dalayap, Enrique, Iba, Inaun, Margarita, Malauli or Budbud, Matalaba Palapat, Palipit Maisao, Panlovenas, Panquitan, Quinapati, Quiñorang, Bubong or Malauli Malati, Salop, Sinubli and Vitas.

provided the rest of the streams were declared private. Acting on said offer, the Director of Public Works instructed the surveyor in his office, Eliseo Panopio, to proceed to Pampanga and conduct another investigation.

On January 23, 1931 Panopio submitted his report to the Director of Public Works recommending that some streams enumerated therein be declared public and some private on the ground that they were originally dug by the hacienda owners. The private streams were:

Agape, Atlong, Cruz, Balanga, Batasan, Batasan Matlaue, Balibago, Baliti, Bato, Buengco Malati, Bungalin, Bungo Malati, Bungo Maragui, Buta-buta, Camastiles, Catlu, Cauayan or Biabas, Cela, Dampalit, Danlimpu, Dilinquente, Fabian, Laguzan, Lalap Maburac, Mabutol, Macabacle, Maragul or Macanduli, Macabacle or Mababo, Maisac, Malande, Malati, Magasawa, Maniup, Manulit, Mapanlao, Maisac, Maragul Mariablus Malate, Masamaral, Mitulid, Nasi, Nigui or Bulacus, Palipit, Maragul, Pangebonan, Paumbong, Pasco or Culali, Pilapil, Pinac Malati, Pinac, Maragul or Macabacle, Quiñorang Silab or Malauli Maragul, Raymundo, Salamin, Salop Maisac, Salop Maragul, Sermon and Sinca or Mabulog.

He therefore recommended revocation of the decision already mentioned above, dated November 3, 1930 of the Secretary of Commerce and Communications ordering the demolition of the dikes closing Malauling Maragul, Quiñorang, Silab, Pepangebonan, Nigui, Bulacus, Nasi, and Pinac. On February 13, 1931 the Director of Public Works concurred in Panopio's report and forwarded the same the Secretary of Commerce and Communications.

On February 25, 1935 the municipality of Macabebe and the Zobel family executed an agreement whereby they recognized the nature of the streams mentioned in Panopio's report as public or private, depending on the findings in said report. This agreement was approved by the Secretary of Public Works and Communications on February 27, 1935 and confirmed the next day by the municipal council of Macabebe under Resolution No. 36.

A few months later, that is, on June 12, 1935, the then Secretary of Justice issued an opinion holding that the contract executed by the Zobel family and the municipality of Macabebe has no validity for two reasons, namely, (1) the streams although originally dug by Ayala y Cia., lost their private nature by prescription inasmuch as the public was allowed to use them for navigation and fishing, citing Mercado vs. Municipality of Macabebe, 59 Phil. 592; and (2) at the time the Secretary of Commerce and Communications approved the said contract, he had no more power so to do, because such power under Sec. 2 of Act 2152 was revoked by the amending Act 4175 which took effect on December 7, 1934.Despite the above ruling of the Secretary of Justice, the streams in question remained closed.

In 1939 administrative investigations were again conducted by various agencies of the Executive branch of our government culminating in an order of President Manuel Quezon immediately before the national elections in 1941 requiring the opening of Sapang Macanduling, Maragul Macabacle, Balbaro and Cansusu. Said streams were again closed in 1942 allegedly upon order of President Quezon.

THE CASERoman Santos acquired in 1940 from the Zobel family a larger portion of Hacienda San Esteban wherein are located 25 streams which were closed by Ayala y Cia., and are now the subject matter in the instant controversy.

Eighteen years later, that is in 1958, Congress enacted Republic Act No. 2056[[2]]following a congressional inquiry which was kindled by a speech delivered by Senator Rogelio de la Rosa in the Senate. On August 15, 1958 Senator de la Rosa requested in writing the Secretary of Public Works and communications to proceed in pursuance ofRepublic Act No. 2056 against fishpond owners in the province of Pampanga who have closed rivers and appropriated them as fishponds without color of title. On the same day, Benigno Musni and other residents in the vicinity of Hacienda San Esteban petitioned the Secretary of Public Works and Communications to open the following streams:Balbaro, Batasan Matua, Bunga, Cansusu, Macabacle, Macanduling, Maragul, Mariablus, Malate, Matalabang, Maisac, Nigui, Quiñorang Silab, Sapang Maragul and Sepung Bato.

Thereupon, the Secretary of Public Works and Communications instructed Julian C. Cargullo to conduct an investigation on the above named streams.

On October 20, 1958 Musni and his co-petitioners amended their petition to include other streams. The amended petition therefore covered the following streams:

Balbaro, Balili, Banawa, Batasan Matua Bato, Bengco, Bunga, Buta-buta, Camastiles, Cansusu, Cela, Don Timpo, Mabalanga, Mabutol, Macabacle, Macabacle qng. Iba, Macanduling, Maragul, Malauli, Magasawa, Mariablus Malate Masamaral, Matalabang Maisa, Mariablus,[[3]] Nigui, Pita, Quiñorang, Silab, Sapang Maragul, Sepung Bato, Sinag and Tumbong.On March 2, 4, 10, 30 and 31, and April 1, 1959, the Secretary of Public Works and Communications rendered his decisions ordering the opening and restoration of the channel of all the streams in controversy except Sapang Malauling, Maragul, Quiñorang, Silab, Nigui Pepangebonan, Nasi and Bulacus, within 30 days on the ground that said streams belong to the public domain.

On April 29, 1959, that is, after receipt of the Secretary's decision dated March 4, 1959, Roman Santos filed a motion with the Court of First Instance of Man for junction against the Secretary of Public Works and Communications and Julian C. Cargullo. As prayed for preliminary injunction was granted on May 8, 1959. The Secretary of Public Work and Communications answered and alleged as defense that venue was improperly laid; that Roman Santos failed to exhaust administrative remedies; that the contract between Ayala y Cia., and the Municipality of Macabebe is null and void; and, that Section 39 of Act 496 excludes public streams from the operation of the Torrens System.On April 29 and June 12, 1969, Roman Santos received the decision of the Secretary of Public Works and Communications dated March 10 and March 30, March 31, and April 1, 1959. Consequently, on June 24, 1959 he asked the court to cite in contempt Secretary Florendo Moreno, Undersecretary M.D. Bautista and Julian Cargullo for issuing and serving upon him the said decisions despite the existence of the preliminary injunction. The Solicitor General opposed the motion alleging that the decisions in question had long been issued when the petition for injunction was filed, that they were received after preliminary injunction issued because they were transmitted through the District Engineer of Pampanga to Roman Santos; that their issuance was for Roman Santos' information and guidance; and, that the motion did not allege that respondents took steps to enforce the decision. Acting upon said motion, on July 17, 1959, the trial court considered unsatisfactory the explanation of the Solicitor General but ruled that Secretary Florencio Moreno, Undersecretary M.D. Bautista and Julian Cargullo acted in good faith. Hence, they were merely "admonished to desist from any and further action in this case, observe the preliminary injunction issued by this Court, with the stern warning, however, that a repetition of the acts complained of shall be dealt with severely."

On July 18, 1959 the trial court declared all the streams under litigation private, and rendered the following judgment:

The Writ of preliminary injunction restraining the respondent Secretary of Public Works & Communications from enforcing the decisions of March 2 And 4, 1959 and all other similar decisions is hereby made permanent.

The Secretary of Public Works and Communication and Julian Cargullo appealed to this Court from the order of July 17, 1959 issued in connection with Roman Santos' motion for contempt and from the decision of the lower court on the merits of the case.

ISSUESThe issues are: (1) Did Roman Santos exhaust administrative remedies? (2) Was venue properly laid? (3) Did the lower court err in conducting a trial de novo of the case and in admitting evidence not presented during the administrative proceeding? (4) Do the streams involved in this case belong to the public domain or to the owner of Hacienda San Esteban according to law and the evidence submitted to the Department of Public Works and Communications?

DISCUSSION OF THE ISSUES1. Respondents maintain that Roman Santos resorted to the courts without first exhausting administrative remedies available to him, namely, (a) motion for reconsideration of the decisions of the Secretary of Public Works and Communications; and, (b) appeal to the President of the Philippines.

Whether a litigant, in exhausting available administrative remedies, need move for the reconsideration of an administrative decision before he can turn to the courts for relief, would largely depend upon the pertinent law,[[4]] the rules of procedure and the usual practice followed in a particular office.[[5]]

Republic Act No. 2056 does not require the filing of a motion for reconsideration as a condition precedent to judicial relief. From the context of the law, the intention of the legislators to forego a motion for reconsideration manifests itself clearly. Republic Act No. 2056 underscores the urgency and summary nature of the proceedings authorized thereunder. Thus in Section 2 thereof the Secretary of Public Works and Communications under pain of criminal liability is duty bound to terminate the proceedings and render his decision within a period not exceeding 90 days from the filing of the complaint. Under the same section, the party respondent concerned is given not than 30 days within which to comply with the decision of the Secretary of Public Works and Communications, otherwise the removal of the dams would be done by the Government at the expense of said party. Congress has precisely provided for a speedy and a most expeditious proceeding for the removal of illegal obstructions to rivers and on the basis of such a provision it would be preposterous to conclude that it had in mind to require a party to file a motion for reconsideration — an additional proceeding which would certainly lengthen the time towards the final settlement of existing controversies. The logical conclusion is that Congress intended the decision of the Secretary of Public Works and Communications to be final and executory subject to a timely review by the courts without going through formal and time consuming preliminaries.Moreover, the issues raised during the administrative proceedings of this case are the same ones submitted to court for resolution. No new matter was introduced during the proceeding in the court below which the Secretary of Public Works and Communications had no opportunity to correct under his authority.

Furthermore, Roman Santos assailed the constitutionality of Republic Act No. 2056 and the jurisdiction of the Secretary of Public Works and Communications to order the demolition of dams across rivers or streams. Those questions are not within the competence of said Secretary to decide upon a motion for reconsideration. They are purely legal questions, not administrative in nature, and should properly be aired before a competent court as was rightly done by petitioner Roman Santos .At any rate, there is no showing in the records of this case that the Secretary of Public Works and Communications adopted rule of procedure in investigations authorized under Republic Act No. 2056 which require a party litigant to file a motion for the reconsideration of the Secretary's decision before he can appeal to the courts. Roman Santos however stated in his brief that the practice is not to entertain motions for reconsideration for the reason that Republic Act No. 2056 does not expressly or impliedly allow the Secretary to grant the same. Roman Santos' statement is supported by Opinion No. 61, Series of 1959, dated April 14, 1959 of the Secretary of Justice.As to the failure of Roman Santos to appeal from the decision of the Secretary of Public Works and Communications to the President of the Philippines, suffice it to state that such appeal could be dispensed with because said Secretary is the alter ego of the President. The actions of the former are presumed to have the implied sanction of the latter.[[6]]

2. It is contended that if this case were considered as an ordinary civil action, venue was improperly laid when the same was instituted in the Court of First Instance of Manila for the reason that the case affects the title of a real property. In fine, the proposition is that since the controversy dwells on the ownership of or title to the streams located in Hacienda San Esteban, the case is real action which, pursuant to Sec. 3 of Rule 5 of the Rules of Court should have been filed in the Court of First Instance of Pampanga.

The mere fact that the resolution of the controversy in this case would wholly rest on the ownership of the streams involved herein would not necessarily classify it as a real action. The purpose of this suit is to review the decision of the Secretary of Public Works and Communications to enjoin him from enforcing them and to prevent him from making and issuing similar decisions concerning the stream in Hacienda San Esteban. The acts of the Secretary of Public Works and Communications are the object of the litigation, that is, petitioner Roman Santos seeks to control them, hence, the suit ought to be filed in the Court of First Instance whose territorial jurisdiction encompasses the place where the respondent Secretary is found or is holding office. For the rule is that outside its territorial limits, the court has no power to enforce its order.[[7]]

Section 3 of Rule 5 of the Rules of Court does not apply to determine venue of this action. Applicable is Sec. 1 the same rule, which states:

Sec. 1. General rule. — Civil actions in Courts of First Instance may be commenced and tried where the defendant any of the defendants residents or may be found or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.Accordingly, the Petition for injunction who correctly filed in the Court of First Instance of Manila. Respondents Secretary of Public Works and Communications and Julian Cargullo are found and hold office in the City of Manila.

3. The lower court tried this case de novo. Against this procedure respondents objected and maintained that the action, although captioned as an injunction is really a petition for certiorari to review the decision of the Secretary of Public Works and Communications. Therefore they now contend that the court should have confined itself to reviewing the decisions of the respondent Secretary of Public Works and Communications only on the basis of the evidence presented in the administrative proceedings. On the other hand, Roman Santos now, submits that the action is a proceeding independent and distinct from the administrative investigation; that, accordingly, the lower court correctly acted in trying the case anew and rendering judgment upon evidence adduced during the trial.Whether the action instituted in the Court of First Instance be for mandamus, injunction or certiorari is not very material. In reviewing the decision of the Secretary of Public Works and Communications, the Court of First Instance shall confine its inquiry to the evidence presented during, the administrative proceedings. Evidence not presented therein shall not be admitted, and considered by the trial court. As aptly by this Court speaking through Mr. Justice J.B.L. Reyes, in a similar case:The findings of the Secretary can not be enervated by new evidence not laid before him, for that would be tantamount to holding a new investigation, and to substitute for the discretion and judgment of the Secretary the discretion and judgment of the court, to whom the statute had not entrusted the case. It is immaterial that the present action should be one for prohibition or injunction and not one for certiorari; in either event the case must be resolved upon the evidence submitted to the Secretary, since a judicial review of executive decisions does not import a trial de novo, but only an ascertainment of whether the "executive findings are not in violation of the Constitution or of the laws, and are free from fraud or imposition, and whether they find reasonable support in the evidence. . . .[[8]]

The case at bar, no matter what the parties call it, is in reality a review of several administrative decisions of the Secretary of Public Works and Communications. Being so, it was error for the lower court to conduct a trial de novo. Accordingly, for purposes of this review, only the evidence presented and admitted in the administrative investigation will be considered in our determination of whether on the basis thereof the decisions of the Secretary of Public Works and Communications were correct.4. We come to the question whether the streams involved in this case belong to the public domain or to the owner of Hacienda San Esteban. If said streams are public, then Republic Act 2056 applies, if private, then the Secretary of Public Works and Communications cannot order demolition of the dikes and dams across them pursuant to his authority granted by said law.First, we come to the question of the constitutionality of Republic Act No. 2056. The lower court held Republic Act No. 2056 constitutional but ruled that it was applied by respondents unconstitutionally. That is, it held that Roman Santos was being deprived of his property without due process of law, for the dikes of his fishponds were ordered demolished through an administrative, instead of a judicial, proceeding. This conclusion and rationalization of the lower court amount in effect to declaring the law unconstitutional, stated inversely. Note that the law provides for an expeditious administrative process to determine whether or not a dam or dike should be declare a public nuisance and ordered demolished. And to say that such an administrative process, when put to operation, is unconstitutional is tantamount to saying that the law itself violates the Constitution. In Lovina vs. Moreno, supra, We held said law constitutional. We see no reason here to hold otherwise.Discussing now the applicability of Republic Act 2056, the same applies to two types of bodies of water, namely (1) public navigable rivers, streams, coastal waters, or waterways and (b) areas declared as communal fishing grounds, as provided for in Section 1 thereof:Sec. 1. . . . the construction or building of dams, dikes or any other works which encroaches into any public navigable river, stream, coastal waters and any other navigable public waters or waterways as well as the construction or building of dams, dikes or any other works in areas declared as communal fishing grounds, shall be ordered removed as public nuisances or as prohibited constructions as herein provided: . .

We are not concerned with communal fishing grounds because the streams here involved have not been so declared, but with public navigable streams. The question therefore is: Are the streams in Hacienda San Esteban which are mentioned in the petition of Benigno Musni and others, public and navigable?

Respondents contend that said streams are public on the following grounds:

(1) Hacienda San Esteban was formerly a marshland and being so, it is not susceptible to appropriation. It therefore belongs to the State. Respondents rely on Montano vs. Insular Government, 12 Phil. 572.(2) The streams in question are natural streams. They are tributaries of public streams. Cited are the cases of Samson vs. Dionisio, et al., 11 Phil. 538 and Bautista vs. Alarcon, 23 Phil. 636.(3) The streams have for their source public rivers, therefore they cannot be classified as canals.

(4) Assuming the streams were artificially made by Ayala y Cia., said titleholder lost ownership over them by prescription when it allowed the public to use them for navigation for a long time. Respondents cite Mercado vs. Municipal President of Macabebe,59 Phil. 592.(5) Assuming the streams in question are not mentioned as public in the certificates of title held by Ayala y Cia., over Hacienda San Esteban, still they cannot be considered as privately owned for Section 39 of Act 496 expressly excepts public streams from private ownership.(6) The Panopio Report, which found the streams in question of private ownership was nullified by the Secretary of Justice in his opinion dated June 12, 1935. And, the contract between Ayala y Cia., and the Secretary of Commerce and Communications agreeing on the ownership of the streams in question is ultra vires.The doctrine in Montano vs. Insular Government, supra, that a marshland which is inundated by the rise of the tides belongs to the State and is not susceptible to appropriation by occupation — has no application here inasmuch as in said case the land subject matter of the litigation was not yet titled and precisely Isabelo Montano sought title thereon on the strength of ten years' occupation pursuant to paragraph 6, section 54 of Act 926 of the Philippine Commission. Whereas, the subject matter in this case — Hacienda San Esteban — is titled land and private ownership thereof by Ayala y Cia., has been recognized by the King of Spain and later by the Philippine Government when the same was registered under Act 496.Respondents further cite Bautista vs. Alarcon, 23 Phil. 631, where the plaintiff sought injunction against the defendants who allegedly constructed a dam across a public canal which conveyed water from the Obando River to fishponds belonging to several persons. The canal was situated within a public land. In sustaining the injunction granted by the Court of First Instance, this Court said:No private persons has right to usurp possession of a watercourse, branch of a river, or lake of the public domain and use, unless it shall have been proved that he constructed the same within in property of his exclusive ownership, and such usurpation constitutes a violation of the legal provisions which explicity exclude such waterways from the exclusive use or possession of a private party. (Emphasis supplied)As indicated in the above-cited case, a private person may take possession of a watercourse if he constructed the same within his property. This puts Us into inquiry whether the streams in question are natural or artificial. In so doing, We shall examine only the evidence presented before the Department of Public Works and Communications and disregard that which was presented for the first time before the lower court, following our ruling in Lovina vs. Moreno, supra.(1) Sapang Macanduling Maragul or Macanduli is presently enclosed in Fishpond No. 12 of Roman Santos. Its banks cannot anymore be seen but some traces of them could be noted by a row of isolated nipa palms. Its water is subject to the rise and fall of the tides coming from Guagua and Antipolo Rivers and it is navigable by light watercrafts. Its inlet is Antipolo River; another dike at its outlet along the Palapat River.[[9]] It is closed by four dikes: One dike at its inlet along the Antipolo River; another dike at its cutlet along the Palatpat River; and, two dikes in between. Then exist channel at the Palapat River where the fishpond gate lies has been filled up with dredge spoils from the Pampanga River Control Project.(2) Sapang Macabacle is found in Fishpond No. 13. Its banks are still evident. This stream is about 30 meters wide, two meters deep and one and one-half to two kilometers long. Its source is Rio Cansusu. Like Macanduli, its channel is obstructed by four dikes. One of them was constructed by the engineers of the Pampanga River Control Project.(3) Sapang Balbaro which is found in Fishpond No. 13, runs from Canal Enrique near Rio Cansusu to Sapang Macabacle, a distance of about one-half kilometer. It is passable by banca. The closures of this stream consist of two dikes located at each ends on Canal Enrique and Sapang Macabacle.(4) Sapang Cansusu is a continuation of the Cansusu River. The Cansusu River opens at the Guagua River and allegedly ends at the Palanas River in front of Barrio San Esteban. At a point near the mouth of Sapang Balbaro, the owners of Hacienda San Esteban built a canal leading straight to one end of Barrio San Esteban. They called this canal "Canal Enrique." And at the point where Canal Enrique joins Cansusu they built a dike across Cansusu, thus closing this very portion of the river which extends up to Palanas River where they built another closure dike. This closed portion, called "Sapang Cansusu," is now part of Fishpond No. 1.Sapang Cansusu is half a kilometer long and navigable by banca.

Appellant's witnesses, Beligno Musni, 41, Macario Quiambao, 96, Roman Manansala, 55 and Castor Quiambao, 76, all residents of Barrio San Esteban, testified that prior to their closure, Sapang Macaduli, Macabacle, Balbaro and Cansusu were used as passageway and as fishing grounds; that people transported through them tuba,[[10]]wood and sasa,[[11]] and that the tuba was brought to the distillery in Barrio San Esteban. Macario Quiambao testified also that said four streams "were created by God for the town people"; and that if any digging was done it was only to deepen the shallow parts to make passage easier. According to witness Anastacio Quiambao said streams were navigable, even Yangco's ship "Cababayan" could pass through. Simplicio Quiambao, 36, and Marcelino Ocampo, 55, stated on direct examination that before closure of the above named four streams, people from the surrounding towns of Guagua, Bacolor, Macabebe, Masantol and Sexmoan fished and navigated in them.Against the aforementioned, testimonial evidence Roman Santos presented the testimony of Nicanor Donarber, 80, Mariano Guinto, 71, and his own. Donarber, who started working as an arundin[[12]] testified that Ayala y Cia., dug Sapang Macanduli, Balbaro and Macabacle; that he worked also in the construction together with other workers; and, that as an overseer he inspected their work. Mariano Guinto testified that he worked for Ayala y Cia., as a tuba gatherer; that in order to reach remote nipa groves by banca, they made canals; and, that he was one of the who worked in the construction of those canals. Roman Santos also testified that Sapang Macanduli, Macabacle, Balbaro and Cansusu are artificial canals excavated as far back as 1850 and due to erosion coupled with the spongy nature of the land, they acquired the proportion of rivers; that he joined Sapang Balbaro to Sapang Macabacle because the former was a dying canal; and that Cansusu River is different from Sapang Cansusu Witness Domingo Yumang likewise testified that Sapang Balbaro man-made.We observe that witnesses positively stated that Sapang Macanduli, Macabacle and Balbaro were made by the owners of Hacienda San Esteban. With respect to Sapang Cansusu none, except Roman Santos himself, testified that Sapang Cansusu is an artificial canal. It is not one of the streams found and recommended to be declared private in the Panopio Report. Sapang Cansusu follows a winding course different and, distinct from that of a canal such as that of Canal Enrique which is straight. Moreover, Sapang Cansusu is a part of Cansusu River, admittedly a public stream.

(5) Sapang Maragul, Mabalanga and Don Timpo are all part of Fishpond No. 1. Maragul is 600 meters long and 30 to 35 meters wide. Mabalanga is 250 meters in length and 50 meters in width. Don Timpo is 220 meters long and 20 meters wide. All of them are navigable by banca. Maragul and Mabalanga open at Guagua River and join each other inside the hacienda to form one single stream, Sapang Don Timpo, which leads to the Matalaba River. Maragul, Mabalanga and Don Timpo, formerly ended inside the hacienda but later Mabalanga was connected to Don Timpo. Maragul was connected to Mabalanga and Sapang Cela was extended to join Maragul.Witnesses Nicanor Donarber, Mariano Ocampo and Mariano Guinto testified that Maragul, Mabalanga and Don Timpo are artificial canals dug by Ayala y Cia., and that they (Donarber and Mariano Guinto) worked in said excavations.[[13]] Witness Mariano Guinto clarified that Don Timpo was originally dug but Mabalanga and Maragul were formerly small non-navigable streams which were deepened into artificial navigable canals by Ayala y Cia.[[14]]

Exhibit F, which is a map showing the streams and rivers in Hacienda San Esteban, shows that Maragul, Mabalanga and Don Timpo are more or less straight. From the big rivers (Guagua and Matalaba Rivers) they lead deep into the interior of the hacienda, thus confirming the testimony that they were built precisely as a means of reaching the interior of the estate by banca. The weight of evidence, therefore, indicate that said streams are manmade.

(6) Sapang Bunga, now part of Bunga fishpond, gets its water from Sapanga Iba and empties at Sta. Cruz River. It is about 300-400 meters long, 5-6 meters wide and 1-1.60 meters deep.(7) Sapang Batu is found in Capiz Fishpond. About 300-400 meters long, 4-5 meters wide and 1.50-2.20 meters deep, it starts at Capiz River and ends at Malauling Maragul. From Capiz River until it intersects Sapang Nigui the stream is called Sapang Batu Commencing from Sapang Nigui and up to its end at Sapang Malauling Maragul, the stream is called Sapang Batu. Commencing from Sapang Nigui and up to its end at Sapang Malauling Maragul, the stream is called Sepong Batu. Sepong Batu is not among those streams declared in the Panopio Report as private.(8) Sapang Banawa has one end at Palanas River and the other at Sapang Macabacle. It is about 300 meters long, 3-4 meters wide and 1.30-1.40 meters deep. Its whole length is within Fishpond No. 13 of Roman Santos.(9) Sapang Mabutol is a dead-end stream, that is, it ends inside the hacienda. It opens along Guagua river. Since its closure, it has become part of Fishpond No. 1.(10) Sapang Buta-buta, like Mabutol, dies inside the hacienda. It connects with Cansusu River and is about 100 meters long, 3-4 meters wide and 1.2-1.5 meters deep. It is now a part of Fishpond No. 13.(11) Sapang Masamaral, another stream which opens at Cansusu River And ends inside the hacienda., is 100-200 meters long, 3-4 meters wide and 1.50-2 meters deep. It now forms part of Fishpond No. 13.The uncontradicted testimony of Marcos Guinto is that Sapang Bunga, Batu, Sepong Batu, Banawa, Mabutol, Buta-Buta and Masamaral were constructed by Ayala y Cia., to gain access to the nipa the, interior of the hacienda. This testimony tallies with the findings in the Panopio Report which will be discussed herein later.

The evidence adduced in the administrative proceeding conducted before a representative of the Secretary of Public Works and Communications supports the contention that said streams are merely canals built by Ayala y Cia., for easy passage into the hinterland of its hacienda.

(12) Sapang Magasawa consists of two streams running parallel to each other commencing from Matalaba River and terminating at Mariablus Rivers. About 600-700 meters long, 4-5 meters wide and 1.5-2 meters deep, these two streams are navigable by banca. They are enclosed within Fishpond No. 1.(13) Sapang Mariablus Malate, about 3-4 meters wide and 250 meters long, is another stream that ends inside the hacienda and gets its water from Guagua River. It is no part of Fishpond No. 1.(14) Sapang Matalabang Malate or Maisac opens at Guagua River and ends at Sapang Cela and Matalabang Maragul. This stream, which is about 800 meters long and 18 meters wide, forms part of Fishpond No. 1 of Roman Santos.(15) Sapang Batasan Matua about 600 meters long, three meters wide and .80 meters deep at low tide and 1.90 meters deep at high tide crosses the hacienda from Mariablus River to Cansusu River. It is at present a part of Fishpond No. 1-A.(16) Sapang Camastiles, a dead end stream of about 200 to 300 meters in length, gets its water from Biuas River. It is within Fishpond No. 1.(17) Sapang Cela is within Fishpond No. 1. Its whole length situated inside the hacienda, it opens at Sapang Matalabang Malate or Maisac and ends at Sapang Malungkot. Latter Cela was extended to connect with Sapang Maragul. It is about 200 meters long and four meters wide.Mariano Guinto, 71, testified without contradiction that Sapang Mariablus Malate and Matalabang Malate were formerly small and non-navigable streams which were dug by Ayala y Cia.,[[15]] while Batasan Matua Camastiles, Magasawa and Cela are original canals made by Ayala y Cia.,[[16]] that he was one of those who worked in the construction of said canals; and that it took years to construct them. All these streams were recommended in the Panopio Report for declaration as private streams.(18) Sapang Sinag, 200 meters long, four to five meters wide, one meter and one and one-half meters deep at low and high tides, respectively, gets its water from Cutod River and leads inside the hacienda to connect with Sapang Atlong Cruz, a stream declared private in the Panopio Report. It is now inside Fishpond No. 14.(19) Sapang Balili, also found inside Fishpond No. 14, is about 200 meters long, three to four meters wide and one meter deep at low tide. From its mouth at Cutod River it drifts into the interior of the hacienda and joins Sapang Bengco.[[17]]

(20) Sapang Pita is within Fishpond Capiz. It takes water from Capiz River but dies 250 meters inside the hacienda. It is about four to five meters wide, and one meter deep at low tide and 1.50 meters deep at high tide.(21) Sapang Tumbong, situated inside Capiz Fishpond, derives its water from Sapang Quiñorang Silab, a stream declared private by the Secretary of Public Works and Communications, and ends inside the hacienda.[[18]]

(22) Sapang Bengco is found within Fishpond No. 14. Two hundred meters long, five meters wide, and one meter deep at low tide and 1.50 meters deep at high tide it gets water from Sapang Biabas and connects with Baliling Maisac.[[19]]

According to Marcos Guinto, a witness for Roman Santos, Sapang Sinag, Balili, Pita Tumbong and Bengco were excavated a long time ago by Ayala y Cia.; and that they have a winding course because when they were made the workers followed the location of the nipa palms.[[20]] On the other hand, Marcelo Quiambao, testified that Sapang Tumbong is a natural stream and that the reason he said so is because the stream was already there as far back as 1910 when he reached the age of ten. No other oral evidence was presented to contradict the testimony of Marcos Guinto that the said five streams were artificially made by Ayala y Cia.To show that the streams involved in this case were used exclusively by the hacienda personnel and occasionally by members of their families, Roman Santos introduced the testimony of Eliseo Panopio, Nicanor Donarber, Blas Gaddi, Mariano Ocampo, Mariano Guinto, Alejandro Manansala and himself. The witnesses categorically testified that the public was prohibited from using the streams as a means of navigation and that the prohibition was enforced by guards called arundines.One and all, the evidence, oral and documentary, presented by Roman Santos in the administrative proceedings supports the conclusion of the lower court that the streams involved in this case were originally man-made canals constructed by the former owners of Hacienda San Esteban and that said streams were not held open for public use. This same conclusion was reached 27 years earlier by an investigator of the Bureau of Public Works whose report and recommendations were approved by the Director of Public Works and submitted to the Secretary of Commerce and Communications.

As stated, pursuant to Act 2152, as amended by Act 3208, the Bureau of Public Works and the Department of Commerce and Communications locked into and settled the question of whether or not the streams situated within Hacienda San Esteban are publicly or privately owned. We refer to the so-called Panopio Report which contains the findings and recommendations of Eliseo Panopio, a surveyor in the Bureau of Public Works, who was designated to conduct formal hearings and investigation. Said report found the following streams, among others, of private ownership:

Camastiles, Cela Balanga, Bato, Batasan, Bengco, Buta-buta, Don Timpo, Mabutol, Macabacle, Macanduli, Malande Malate (Bunga), Magasawa, Masamaral, Maragul, Mariablus Malate, Matalaba Malate, Nasi, Nigui, Pangebonan and Quiñorang Silab

on the ground that —

The preponderance of the probatory facts, . . ., shows that the rivers, creeks, esteros and canals listed in (1) have originally been constructed, deepened, widened, and lengthened by the owners of the Hacienda San Esteban. That they have been used as means of communication from one place to another and to the inner most of the nipales, exclusively for the employees, colonos and laborers of the said Hacienda San Esteban. That they have never been used by the public for navigation without the express consent of the owners of the said Hacienda.[[21]]

Bases for the above-quoted conclusion were "the reliable informations gathered from old residents of the locality, from outsiders, the sworn statements obtained from different persons not interested in this case and the comparison of the three plans prepared in 1880, 1906 and 1930.[[22]] The persons referred to are Martin Isip, Hilarion Lobo, Emigdio Ignacio, Castor Quiambao, Matias Sunga facio Cruz, Inocencio Dayrit, Gabriel Manansala, Lope Quiambao, Marcelino Bustos and Juan Lara .On February 13, 1931 the Director of Public Works transmitted the Panopio Report to the Secretary of Commerce and Communications recommending approval thereof. Later, on February 27, 1935, Secretary of Public Works and Communications De las Alas approved the agreement of Ayala y Cia., and the Municipality of Macabebe, concerning the ownership of the streams in Hacienda San Esteban, for being in conformity with said Panopio Report.

This agreement of Ayala y Cia and the Municipality of Macabebe which was approved by the Secretary of Public Works and Communications only on February 27, 1935, could not however bind the Government because the power of the Secretary of Public Works and Communication to enter thereto had been suppressed by the Philppine Legislature when it enacted Act 4175 which effect on December 7, 1934.

Nullity of the aforesaid contract would not of course affect the findings of fact contained in the Panopio Report.

In weighing the evidence presented before the administrative investigation which culminated in this appeal, respondent Secretary seemed to have ignored the Panopio Report and other documentary evidence as well as the testimony of witnesses presented by petitioner but instead gave credence only to the witnesses of Benigno Musni, et al. Upon review, however, the lower court, taking into account all the evidence adduced in the administrative hearing, including the Panopio Report, as well as those presented for the first time before it, sustained petitioner's averment that the streams in question were artificially made, hence of private ownership. As stated, this conclusion of the lower court which is in accord with the findings of Panopio as contained in his report, finds ample support from the evidence presented and admitted in the administrative investigation. Accordingly, we see no merit in disturbing the lower court's findings fact.

We next consider the issue of whether under pertinent laws, the streams in question are public or private.

We quote Articles 339, 407 and 408 of the Spanish Civil Code of 1889:

Art. 339. Property of public ownerships is —

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, river banks, shores, roadsteads, and that of a similar character;

Art. 407. The following are of public ownership:

1. Rivers and their natural channels;

2. Continuous or intermittent waters from springs or brooks running in their natural channels and the channels themselves.

3. Waters rising continuously or intermittently on lands of public ownership;

4. Lakes and ponds formed by nature, on public lands, and their beds;

5. Rain waters running through ravines or sand beds, the channels of which are of public ownership;

6. Subterranean waters on public lands;

7. Waters found within the zone of operation of public works, even though constructed under contract;

8. Waters which flow continuously or intermittently from lands belonging to private persons, to the State, to provinces, or to towns, from the moment they leave such lands;

9. The waste waters of fountains, sewers, and public institutions.

Art. 408. The following are of private ownership:

1. Waters, either continuous or intermittent rising on private etates, while they run through them;

2. Lakes and ponds and their beds when formed by nature on such estates;

3. Subterranean waters found therein;

4. Rain water falling thereon as long as their bounderies.

5. The channels of flowing streams, continuous or intermittent, formed by rain water, and those of brooks crossing estates which are not of public ownership.

The water, bed, banks, and floodgates of a ditch or aqueduct are deemed to be an integral part of the estate or building for which the waters are intended. The owners of estates through or along the boundaries of which the aqueduct passes can assert no ownership over it, nor any right to make use. of it beds or banks, unless they base their claims on title deed which specify the right or the ownership claimed.

Articles 71 and 72 of the Spanish Law of Waters of August 3, 1866 state:

Art. 71. The water-beds of all creeks belong to the owners of the estates or lands over which they flow.

Art. 72. The water-beds on public land, of creeks through which spring waters run, are a part of the public domain.

The natural water-beds or channels of rivers are also part of the public domain.

Pursuant to Article 71 of the Spanish Law of Waters of August 3, 1866, and Article 408(5) of the Spanish Civil Code, channels of creeks and brooks belong to the owners of estates over which they flow. The channels, therefore, of the streams in question which may be classified creeks, belong to the owners of Hacienda San Esteban.

The said streams, considered as canals, of which they originally were, are of private ownership in contemplation of Article 339(l) of the Spanish Civil Code. Under Article 339, canals constructed by the State

and devoted to public use are of public ownership. Conversely, canals constructed by private persons within private lands and devoted exclusively for private use must be of private ownership.

Our attention has been called to the case of Mercado v. Municipal President of Macabebe,59 Phil. 592. There the creek (Batasan-Limasan) involved was originally dug by the estate's owner who, subsequently allowed said creek to be used by the public for navigation and fishing purposes for a period of 22 years. Said this Court through Mr. Justice Diaz:And even granting that the Batasan-Limasan creek acquired the proportions which it had, before it was closed, as a result of excavations made by laborers of the appellant's predecesor in interest, it being a fact that, since the time it was opened as a water route between the Nasi River and Limasan creek, the owners thereof as well as strangers, that is, both the residents of the hacienda and those of other nearby barrios and municipalities, had been using it not only for their bancas to pass through but also for fishing purposes, and it being also a fact that such was the condition of the creek at least since 1906 until it was closed in 1928, if the appellant and her predecessors in interest had acquired any right to the creek in question by virtue of excavations which they had made thereon, they had such right through prescription, inasmuch as they failed to obtain, and in fact they have not obtained, the necessary authorization to devote it to their own use to the exclusion of all others. The use and enjoyment of a creek, as any other property simceptible of appropriation, may be acquired or lost through prescription, and the appellant and her predecessors in interest certainly lost such right through the said cause, and they cannot now claim it exclusively for themselves after the general public had been openly using the same from 1906 to 1928. . .

In the cited case, the creek could have been of private ownership had not its builder lost it by prescription. Applying the principle therein enunciated to the case at bar, the conclusion would be inevitably in favor of private ownership, considering that the owners of Hacienda San Esteban held them for their exclusive use and prohibited the public from using them.

It may be noted that in the opinion, mentioned earlier, issued on June 12, 1935, the Secretary of Justice answered in the negative the query of the Secretary of Public Works and Communications whether the latter can declare of private ownership those streams which "were dug up artificially", because it was assumed that the streams were used "by the public as fishing ground and in transporting their commerce in bancas or in small crafts without the objection of the parties who dug" them. Precisely,Mercado v. Municipality of Macabebe was given application therein. However, the facts, as then found by the Bureau of Public Works, do not support the factual premise that the streams in question were used by the public "without the objection of the parties who dug" them. We cannot therefore take as controlling in determining the merits of this the factual premises and the legal conclusion contained in said opinion.The case at bar should be differentiated from those cases where We held illegal the closing and/or appropriation of rivers or streams by owners of estates through which they flow for purposes of converting them into fishponds or other works.[[23]] In those cases, the watercourses which were dammed were natural navigable streams and used habitually by the public for a long time as a means of navigation. Consequently, they belong to the public domain either as rivers pursuant to Article 407 (1) of the Spanish Civil Code of 1889 or as property devoted to public use under Article 339 of the same code. Whereas, the streams involved in this case were artificially made and devoted to the exclusive use of the hacienda owner.Finally, Sapang Cansusu, being a natural stream and a continuation of the Cansusu River, admittedly a public stream, belongs to the public domain. Its closure therefore by the predecessors of Roman Santos was illegal.

The petition for the opening of Sapang Malauling Maragul, Quiñorang Silab, Nigui, Pepangebunan, Nasi and Bulacus was dismissed by the Secretary of Public Works and Communications and the case considered closed. The said administrative decision has not been questioned in this appeal by either party. Hence, they are deemed excluded herein.

All the other streams, being artificial and devoted exclusively for the use of the hacienda owner and his personnel, are declared of private ownership. Hence, the dams across them should not he ordered demolished as public nuisances.

With respect to the issue of contempt of court on the part of the Secretary of Public Works and Communications and Julian Cargullo for the alleged issuance of a administrative decisions ordering demolition of dikes involved in this case after the writ of injunction was granted and served, suffice it to state that the lower court made no finding of contempt of court. Necessarily, there is no conviction for contempt reviewable by this Court and any discussion on the matter would be academic.

WHEREFORE, the decision appealed from is affirmed, except as to Sapang Cansusu which is hereby declared public and as to which the judgment of the lower court is reversed. No costs. So ordered.

G.R. No. 100709 November 14, 1997

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner, vs.COURT OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO QUILATAN AND THE REGISTER OF DEEDS OF QUEZON PROVINCE, respondents.

 

PANGANIBAN, J.:

Will the lease and/or mortgage of a portion of a realty acquired through free patent constitute sufficient ground for the nullification of such land grant? Should such property revert to the State once it is invaded by the sea and thus becomes foreshore land?

The Case

These are the two questions raised in the petition before us assailing the Court of Appeals' 1 Decision in CA-G.R. CV No. 02667 promulgated on June 13, 1991 which answered the said questions in the negative. 2 Respondent Court's dismissed 3 petitioner's appeal and affirmed in toto the decision of the Regional Trial Court 4 of Calauag, Quezon, dated December 28, 1983 in Civil Case No. C-608. In turn, the Regional Trial Court's decision dismissed petitioner's complaint for cancellation of the Torrens Certificate of Title of Respondent Morato and for reversion of the parcel of land subject thereof of the public domain.

The Facts

The petition of the solicitor general, representing the Republic of the Philippines, recites the following facts: 5

Sometime in December, 1972, respondent Morato filed a Free Patent Application No. III-3-8186-B on a parcel of land with an area of 1,265 square meters situated at Pinagtalleran, Calauag, Quezon. On January 16, 1974, the patent was approved and the Register of Deeds of Quezon at Lucena City issued on February 4, 1974 Original Certificate of Title No. P-17789. Both the free paten and the title specifically mandate that the land shall not be alienated nor encumbered within five years from the date of the issuance of the patent (Sections 118 and 124 of CA No. 141, as amended).

Subsequently, the District Land Officer in Lucena City, acting upon reports that respondent Morato had encumbered the land in violation of the condition of the patent, conducted an investigation. Thereafter, it was established that the subject land is a portion of the Calauag Bay, five (5) to six (6) feet deep under water during high tide and two (2) feet deep at low tide, and not suitable to vegetation. Moreover, on October 24, 1974, a portion of the land was mortgaged by respondent Morato to respondents Nenita Co and Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits). The spouses Quilatan constructed a house on the land. Another portion of the land was leased to Perfecto Advincula on February 2, 1976 at P100.00 a month, where a warehouse was constructed.

On November 5, 1978, petitioner filed an amended complaint against respondents Morato, spouses Nenita Co and Antonio Quilatan, and the Register of Deeds of Quezon for the cancellation of title and reversion of a parcel of land to the public domain, subject of a free patent in favor of respondent Morato, on the grounds that the land is a foreshore land and was mortgaged and leased within the five-year prohibitory period (p. 46, Records).

After trial, the lower court, on December 28, 1983, rendered a decision dismissing petitioner's complaint. In finding for private respondents, the lower court ruled that there was no violation of the 5-year period ban against alienating or encumbering the land, because the land was merely leased and not alienated. It also found that the mortgage to Nenita Co and Antonio Quilatan covered only the improvement and not the land itself.

On appeal, the Court of Appeals affirmed the decision of the trial court. Thereafter, the Republic of the Philippines filed the present petition. 6

The Issues

Petitioner alleges that the following errors were committed by Respondent Court: 7

I

Respondent court erred in holding that the patent granted and certificate of title issued to Respondent Morato cannot be cancelled and annulled since the certificate of title becomes indefeasible after one year from the issuance of the title.

II

Respondent Court erred in holding that the questioned land is part of a disposable public land and not a foreshore land.

The Court's Ruling

The petition is meritorious.

First Issue: Indefeasibility of a Free Patent Title

In resolving the first issue against petitioner, Respondent Court held: 8

. . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas, 168 SCRA 198. ". . . The rule is well-settled that an original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is really part of the disposable land of the public domain, and becomes indefeasible and incontrovertible upon the expiration of one year from the date of promulgation of the order of the Director of Lands for the issuance of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla, (G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead patent, one registered under the Land Registration Act, becomes as indefeasible as a Torrens Title. (Pamintuan v. San Agustin, 43 Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676). (p. 203).

Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia ni Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA 516 (1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 (1971) held that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to Section 122 of Act 496, the certificate of title issued in virtue of said patent has the force and effect of a Torrens Title issued under the Land Registration Act.

Indefeasibility of the title, however, may not bar the State, thru the Solicitor General, from filing an action for reversion, as ruled in Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas, (supra), as follows:

But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas' title to the property having become incontrovertible, such may no longer be collaterally attacked. If indeed there had been any fraud or misrepresentation in obtaining the title, an action for reversion instituted by the Solicitor General would be the proper remedy (Sec. 101, C.A. No. 141; Director of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v. Padilla, supra). (p. 204).

Petitioner contends that the grant of Free Patent (IV-3) 275 and the subsequent issuance of Original Certificate of Title No. P-17789 to Respondent Josefina L. Morato were subject to the conditions provided for in Commonwealth Act (CA) No. 141. It alleges that on October 24, 1974, or nine (9) months and eight (8) days after the grant of the patent, mortgaged a portion of the land" to Respondent Nenita Co, who thereafter constructed a house thereon. Likewise, on February 2, 1976 and "within the five-year prohibitory period," Respondent Morato "leased a portion of the land to Perfecto Advincula at a monthly rent of P100.00 who, shortly thereafter, constructed a house of concrete materials on the subject land." 9 Further, petitioner argues that the defense of indefeasibility of title is "inaccurate." The original certificate of title issued to Respondent Morato "contains the seeds of its own cancellation": such certificate specifically states on its face that "it is subject to the provisions of Sections 118, 119, 121, 122, 124 of CA No. 141, as amended." 10

Respondent Morato counters by stating that although a "portion of the land was previously leased," it resulted "from the fact that Perfecto Advincula built a warehouse in the subject land without [her] prior consent." The mortgage executed over the improvement "cannot be considered a violation of the said grant since it can never affect the ownership." 11 She states further:

. . . . the appeal of the petitioner was dismissed not because of the principle of indefeasibility of title but mainly due to failure of the latter to support and prove the alleged violations of respondent Morato. The records of this case will readily show that although petitioner was able to establish that Morato committed some acts during the prohibitory period of 5 years, a perusal thereof will also show that what petitioner was able to prove never constituted a violation of the grant. 12

Respondent-Spouses Quilatan, on the other hand, state that the mortgage contract they entered into with Respondent Morato "can never be considered as [an] 'alienation' inasmuch as the ownership over the property remains with the owner." 13 Besides, it is the director of lands and not the Republic of the Philippines who is the real party in interest in this case, contrary to the provision of the Public Land Act which states that actions for reversion should be instituted by the solicitor general in the name of Republic of the Philippines. 14

We find for petitioner.

Quoted below are relevant sections of Commonwealth Act No. 141, otherwise known as the Public Land Act:

Sec. 118. Except in favor of the Government or any of its branches, units or institutions, or legally constituted banking corporations, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources, which approval shall not be denied except on constitutional and legal grounds. (As amended by Com. Act No. 456, approved June 8, 1939.)

xxx xxx xxx

Sec. 121. Except with the consent of the grantee and the approval of the Secretary of Agriculture and Natural Resources, and solely for educational, religious, or charitable purposes or for a right of way, no corporation, association, or partnership may acquire or have any right, title, interest, or property right whatsoever to any land granted under the free patent, homestead, or individual sale provisions of this Act or to any permanent improvement on such land. (As amended by Com. Act No. 615, approved May 5, 1941)

Sec. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienation or transferred, except to persons, corporations, association, or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized therefore by their charters.

Except in cases of hereditary successions, no land or any portion thereof originally acquired under the free patent, homestead, or individual sale provisions of this Act, or any permanent improvement on such land, shall be transferred or assigned to any individual, nor shall such land or any permanent improvement thereon be leased to such individual, when the area of said land, added to that of this own, shall exceed one hundred and forty-four hectares. Any transfer, assignment, or lease made in violation hereto shall be null and void. (As amended by Com Act No. 615, Id.).

xxx xxx xxx

Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation of any of the provisions of sections one hundred and eighteen, one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this Act shall be unlawful and null and void from its execution and shall produce the effect of annulling and cancelling the grant, title, patent, or permit originally issued, recognized or confirmed, actually or presumatively, and cause the reversion of the property and its improvements to the State. (Emphasis supplied)

The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free patent or homestead within five years from the grant of such patent. Furthermore, such encumbrance results in the cancellation of the grant and the reversion of the land to the public domain. Encumbrance has been defined as "[a]nything that impairs the use or transfer of property; anything which constitutes a burden on the title; a burden or charge upon property; a claim or lien upon property." It may be a "legal claim on an estate for the discharge of which the estate is liable; and embarrassment of the estate or property so that it cannot be disposed of without being subject to it; an estate, interest, or right in lands, diminishing their value to the general owner; a liability resting upon an estate." 15 Do the contracts of lease and mortgage executed within five (5) years from the issuance of the patent constitute an "encumbrance" and violate the terms and conditions of such patent? Respondent Court answered in the negative: 16

From the evidence adduced by both parties, it has been proved that the area of the portion of the land, subject matter of the lease contract (Exh. "B") executed by and between Perfecto Advincula and Josefina L. Morato is only 10 x 12 square meters, where the total area of the land granted to Morato is 1,265 square meters. It is clear from this that the portion of the land leased by Advincula does not significantly affect Morato's ownership and possession. Above all, the circumstances under which the lease was executed do not reflect a voluntary and blatant intent to violate the conditions provided for in the patent issued in her favor. On the contrary, Morato was compelled to enter into that contract of leaseout of sympathy and the goodness of her heart to accommodate a fellow man. . . .

It is indisputable, however, that Respondent Morato cannot fully use or enjoy the land during the duration of the lease contract. This restriction on the enjoyment of her property sufficiently meets the definition of an encumbrance under Section 118 of the Public Land Act, because such contract "impairs the use of the property" by the grantee. In a contract of lease which is consensual, bilateral, onerous and commutative, the

owner temporarily grants the use of his or her property to another who undertakes to pay rent therefor. 17 During the term of the lease, the grantee of the patent cannot enjoy the beneficial use of the land leased. As already observed, the Public Land Act does not permit a grantee of a free patent from encumbering any portion of such land. Such encumbrance is a ground for the nullification of the award.

Morato's resort to equity, i.e. that the lease was executed allegedly out of the goodness of her heart without any intention of violating the law, cannot help her. Equity, which has been aptly described as "justice outside legality," is applied only in the absence of, and never against, statutory law or judicial rules of procedure. Positive rules prevail over all abstract arguments based on equity contra legem. 18

Respondents failed to justify their position that the mortgage should not be considered an encumbrance. Indeed, we do not find any support for such contention. The questioned mortgage falls squarely within the term "encumbrance" proscribed by Section 118 of the Public Land Act. 19 Verily, a mortgage constitutes a legal limitation on the estate, and the foreclosure of such mortgage would necessarily result in the auction of the property. 20

Even if only part of the property has been sold or alienated within the prohibited period of five years from the issuance of the patent, such alienation is a sufficient cause for the reversion of the whole estate to the State. As a condition for the grant of a free patent to an applicant, the law requires that the land should not be encumbered, sold or alienated within five years from the issuance ofthe patent. The sale or the alienation of part of the homestead violates that condition. 21

The prohibition against the encumbrance — lease and mortgage included — of a homestead which, by analogy applies to a free patent, is mandated by the rationale for the grant, viz.: 22

It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or incumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs within five years. This section 117 is undoubtedly a complement of section 116. It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the statute.

By express provision of Section 118 of Commonwealth Act 141 and in conformity with the policy of the law, any transfer or alienation of a free patent or homestead within five years from the issuance of the patent is proscribed. Such transfer nullifies said alienation and constitutes a cause for the reversion of the property to the State.

The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the approval of every application. 23 Prior to the fulfillment of the requirements of law, Respondent Morato had only an inchoate right to the property; such property remained part of the public domain and, therefore, not susceptible to alienation or encumbrance. Conversely, when a "homesteader has complied with all the terms and conditions which entitled him to a patent for [a] particular tract of public land, he acquires a vested interest therein and has to be regarded an equitable owner thereof." 24However, for Respondent Morato's title of ownership over the patented land to be perfected, she should have complied with the requirements of the law, one of which was to keep the property for herself and her family within the prescribed period of five (5) years. Prior to the fulfillment of all requirements of the law, Respondent Morato's title over the property was incomplete. Accordingly, if the requirements are not complied with, the State as the grantor could petition for the annulment of the patent and the cancellation of the title.

Respondent Morato cannot use the doctrine of the indefeasibility of her Torrens title to bar the state from questioning its transfer or encumbrance. The certificate of title issued to her clearly stipulated that its award was "subject to the conditions provided for in Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA)

No. 141." Because she violated Section 118, the reversion of the property to the public domain necessarily follows, pursuant to Section 124.

Second Issue: Foreshore LandRevert to the Public Domain

There is yet another reason for granting this petition.

Although Respondent Court found that the subject land was foreshore land, it nevertheless sustained the award thereof to Respondent Morato: 25

First of all, the issue here is whether the land in question, is really part of the foreshore lands. The Supreme Court defines foreshore land in the case of Republic vs. Alagad, 169 SCRA 455, 464, as follows:

Otherwise, where the rise in water level is due to, the "extraordinary" action of nature, rainful, for instance, the portions inundated thereby are not considered part of the bed or basin of the body of water in question. It cannot therefore be said to be foreshore land but land outside of the public dominion, and land capable of registration as private property.

A foreshore land, on the other hand has been defined as follows:

. . . that part of (the land) which is between highand low water and left dry by the flux and reflux of the tides . . . . (Republic vs. C.A., Nos. L-43105, L-43190, August 31, 1984, 131 SCRA 532; Government vs. Colegio de San Jose, 53 Phil 423)

The strip of land that lies between the high and low water marks and that is alternatively wet and dry according to the flow of the tide. (Rep. vs. CA,supra, 539).

The factual findings of the lower court regarding the nature of the parcel of land in question reads:

Evidence disclose that the marginal area of the land radically changed sometime in 1937 up to 1955 due to a strong earthquake followed by frequent storms eventually eroding the land. From 1955 to 1968, however, gradual reclamation was undertaken by the lumber company owned by the Moratos. Having thus restored the land thru mostly human hands employed by the lumber company, the area continued to be utilized by the owner of the sawmill up to the time of his death in 1965. On or about March 17, 1973, there again was a strong earthquake unfortunately causing destruction to hundreds of residential houses fronting the Calauag Bay including the Santiago Building, a cinema house constructed of concrete materials. The catastrophe totally caused the sinking of a concrete bridge at Sumulong river also in the municipality of Calauag, Quezon.

On November 13, 1977 a typhoon code named "Unding" wrought havoc as it lashed the main land of Calauag, Quezon causing again great erosion this time than that which the area suffered in 1937. The Court noted with the significance of the newspaper clipping entitled "Baryo ng Mangingisda Kinain ng Dagat" (Exh. "11").

xxx xxx xxx

Evidently this was the condition of the land when on or about December 5, 1972 defendant Josefina L. Morato filed with the Bureau of Lands her free patent application. The defendant Josefina Morato having taken possession of the land after the demise of Don Tomas Morato, she introduced improvement and continued developing the area, planted it to coconut tree. Having applied for a free patent, defendant had the land area surveyed and an approved plan (Exh. "9") based on the cadastral survey as early as 1927 (Exh. "10") was secured. The area was declared for taxation purposes in the name of defendant Josefina Morato denominated as Tax Declaration No. 4115 (Exh. "8") and the corresponding realty taxes religiously paid as shown by Exh. "8-A"). (pp. 12-14, DECISION).

Being supported by substantial evidence and for failure of the appellant to show cause which would warrant disturbance, the aforecited findings of the lower court, must be respected.

Petitioner correctly contends, however, that Private Respondent Morato cannot own foreshore land:

Through the encroachment or erosion by the ebb and flow of the tide, a portion of the subject land was invaded by the waves and sea advances. During high tide, at least half of the land (632.5 square meters) is 6 feet deep under water and three (3) feet deep during low tide. The Calauag Bay shore has extended up to a portion of the questioned land.

While at the time of the grant of free patent to respondent Morato, the land was not reached by the water, however, due to gradual sinking of the land caused by natural calamities, the sea advances had permanently invaded a portion of subject land. As disclosed at the trial, through the testimony of the court-appointed commissioner, Engr. Abraham B. Pili, the land was under water during high tide in the month of August 1978. The water margin covers half of the property, but during low tide, the water is about a kilometer (TSN, July 19, 1979, p. 12). Also, in 1974, after the grant of the patent, the land was covered with vegetation, but it disappeared in 1978 when the land was reached by the tides (Exh. "E-1", "E-14"). In fact, in its decision dated December 28, 1983, the lower court observed that the erosion of the land was caused by natural calamities that struck the place in 1977 (Cf. Decision, pp. 17-18). 26

Respondent-Spouses Quilatan argue, however, that it is "unfair and unjust if Josefina Morato will be deprived of the whole property just because a portion thereof was immersed in water for reasons not her own doing." 27

As a general rule, findings of facts of the Court of Appeals are binding and conclusive upon this Court, unless such factual findings are palpably unsupported by the evidence on record or unless the judgment itself is based on a misapprehension of facts. 28 The application for a free patent was made in 1972. From the undisputed factual findings of the Court of Appeals, however, the land has since become foreshore. Accordingly, it can no longer be subject of a free patent under the Public Land Act. Government of the Philippine Islands vs. Cabañgis 29 explained the rationale for this proscription:

Article 339, subsection 1, of the Civil Code, reads:

Art. 339. Property of public ownership is —

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar character.

xxx xxx xxx

Article 1, case 3, of the law of Waters of August 3, 1866, provides as follows:

Art. 1. The following are part of the national domain open to public use.

xxx xxx xxx

3. The Shores. By the shore is understood that space covered and uncovered by the movement of the tide. Its interior or terrestrial limit is the line reached by the highest equinoctal tides. Where the tides are not appreciable, the shore begins on the land side at the line reached by the sea during ordinary storms or tempests.

In the case of Aragon vs. Insular Government (19 Phil. 223), with reference to article 339 of the Civil Code just quoted, this Court said:

We should not be understood, by this decision, to hold that in a case of gradual encroachment or erosion by the ebb and flow of the tide, private property may not become "property of public ownership." as defined in article 339 of the code, where it appear that the owner has to all intents and purposes abandoned it and permitted it to be totally destroyed, so as to become a part of the "playa" (shore of the sea), "rada" (roadstead), or the like. . . .

In the Enciclopedia Juridica Española, volume XII, page 558, we read the following:

With relative frequency the opposite phenomenon occurs; that is, the sea advances and private properties are permanently invaded by the waves, and in this case they become part of the shore or breach. The then pass to the public domain, but the owner thus dispossessed does not retain any right to the natural products resulting from their new nature; it is a de facto case of eminent domain, and not subject to indemnity.

In comparison, Article 420 of the Civil Code provides:

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore land and passed to the realm of the public domain. In fact, the Court in Government vs. Cabangis 30 annulled the registration of land subject of cadastral proceedings when the parcel subsequently became foreshore land. 31 In another case, the Court voided the registration decree of a trial court and held that said court had no jurisdiction to award foreshore land to any private person or entity. 32 The subject land in this case, being foreshore land, should therefore be returned to the public domain.

WHEREFORE, the petition is GRANTED. This Court hereby REVERSES and SETS ASIDE the assailed Decision of Respondent Court and ORDERS the CANCELLATION of Free Patent No. (IV-3) 275 issued to Respondent Morato and the subsequent Original Certificate of Title No. P-17789. The subject land therefore REVERTS to the State. No costs.

SO ORDERED.

G.R. No. 92161             March 18, 1991

SIMPLICIO BINALAY, PONCIANO GANNABAN, NICANOR MACUTAY, DOMINGO ROSALES, GREGORIO ARGONZA, EUSTAQUIO BAUA, FLORENTINO ROSALES, TEODORO MABBORANG, PATRICIO MABBORANG and FULGENCIO MORA, petitioners vs.GUILLERMO MANALO and COURT OF APPEALS, respondents.

Josefin De Alban Law Office for Petitioners.

FELICIANO, J.:

The late Judge Taccad originally owned a parcel of land situated in Tumauini, Isabela having an estimated area of twenty (20) hectares. The western portion of this land bordering on the Cagayan River has an elevation lower than that of the eastern portion which borders on the national road. Through the years, the western portion would periodically go under the waters of the Cagayan River as those waters swelled with the coming of the rains. The submerged portion, however, would re-appear during the dry season from January to August. It would remain under water for the rest of the year, that is, from September to December during the rainy season.

The ownership of the landholding eventually moved from one person to another. On 9 May 1959, respondent Guillermo Manalo acquired 8.65 hectares thereof from Faustina Taccad, daughter of Judge Juan Taccad. The land sold was described in the Deed of Absolute Sale 1 as follows:

. . . a parcel of agricultural land in Balug, Tumauini, Isabela, containing an area of 8.6500 hectares, more or less; bounded on the North by Francisco Forto on the East by National Road; on South by Julian Tumolva and on the West by Cagayan River; declared for taxation under Tax Declaration No. 12681 in the name of Faustina Taccad, and assessed at P 750.00. . . .

Later in 1964, respondent Manalo purchased another 1.80 hectares from Gregorio Taguba who had earlier acquired the same from Judge Juan Taccad. The second purchase brought the total acquisition of respondent Manalo to 10.45 hectares. The second piece of property was more particularly described as follows:

. . . a piece of agricultural land consisting of tobacco land, and containing an area of 18,000 square meters, more or less, bounded on the North by Balug Creek; on the South, by Faustina Taccad (now Guillermo R. Manalo); on the East, by a Provincial Road; and on the West, by Cagayan River assessed at P 440.00, as tax Declaration No. 3152. . . . 2

During the cadastral survey conducted at Balug, Tumauini, Isabela on 21 October 1969, the two (2) parcels of land belonging to respondent Manalo were surveyed and consolidated into one lot, designated as Lot No. 307, Pls-964. Lot 307 which contains 4.6489 hectares includes: (a) the whole of the 1.80 hectares acquired from Gregorio Taguba; and (b) 2.8489 hectares out of the 8.65 hectares purchased from Faustina Taccad. As the survey was conducted on a rainy month, a portion of the land bought from Faustina Taccad then under water was left unsurveyed and was not included in Lot 307.

The Sketch Plan 3 submitted during the trial of this case and which was identified by respondent Manalo shows that the Cagayan River running from south to north, forks at a certain point to form two (2) branches—the western and the eastern branches—and then unites at the other end, further north, to form a narrow strip of land. The eastern branch of the river cuts through the land of respondent Manalo and is inundated with water only during the rainy season. The bed of the eastern branch is the submerged or the unsurveyed portion of the land belonging to respondent Manalo. For about eight (8) months of the year when the level of water at

the point where the Cagayan River forks is at its ordinary depth, river water does not flow into the eastern branch. While this condition persists, the eastern bed is dry and is susceptible to cultivation.

Considering that water flowed through the eastern branch of the Cagayan River when the cadastral survey was conducted, the elongated strip of land formed by the western and the eastern branches of the Cagayan River looked very much like an island. This strip of land was surveyed on 12 December 1969. 4

It was found to have a total area of 22.7209 hectares and was designated as Lot 821 and Lot 822. The area of Lot 822 is 10.8122 hectares while Lot 821 has an area of 11.9087 hectares. Lot 821 is located directly opposite Lot 307 and is separated from the latter only by the eastern branch of the Cagayan River during the rainy season and, during the dry season, by the exposed, dry river bed, being a portion of the land bought from Faustina Taccad. Respondent Manalo claims that Lot 821 also belongs to him by way of accretion to the submerged portion of the property to which it is adjacent.

Petitioners who are in possession of Lot 821, upon the other hand, insist that they own Lot 821. They occupy the outer edges of Lot 821 along the river banks, i.e., the fertile portions on which they plant tobacco and other agricultural products. They also cultivate the western strip of the unsurveyed portion during summer. 5 This situation compelled respondent Manalo to file a case for forcible entry against petitioners on 20 May 1969. The case was dismissed by the Municipal Court of Tumauini, Isabela for failure of both parties to appear. On 15 December 1972, respondent Manalo again filed a case for forcible entry against petitioners. The latter case was similarly dismissed for lack of jurisdiction by the Municipal Court of Tumauini, Isabela.

On 24 July 1974, respondent Manalo filed a complaints 6 before the then Court of First Instance of Isabela, Branch 3 for quieting of title, possession and damages against petitioners. He alleged ownership of the two (2) parcels of land he bought separately from Faustina Taccad and Gregorio Taguba for which reason he prayed that judgment be entered ordering petitioners to vacate the western strip of the unsurveyed portion. Respondent Manalo likewise prayed that judgment be entered declaring him as owner of Lot 821 on which he had laid his claim during the survey.

Petitioners filed their answer denying the material allegations of the complaint. The case was then set for trial for failure of the parties to reach an amicable agreement or to enter into a stipulation of facts. 7 On 10 November 1982, the trial court rendered a decision with the following dispositive portion:

WHEREFORE, in the light of the foregoing premises, the Court renders judgment against the defendants and in favor of the plaintiff and orders:

1. That plaintiff, Guillermo Manalo, is declared the lawful owner of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint;

2. That the defendants are hereby ordered to vacate the premises of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint;

3. That the defendants are being restrained from entering the premises of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint; and

4. That there is no pronouncement as to attorney's fees and costs.

SO ORDERED. 8

Petitioners appealed to the Court of Appeals which, however, affirmed the decision of the trial court. They filed a motion for reconsideration, without success.

While petitioners insist that Lot 821 is part of an island surrounded by the two (2) branches of the Cagayan River, the Court of Appeals found otherwise. The Court of Appeals concurred with the finding of the trial court

that Lot 821 cannot be considered separate and distinct from Lot 307 since the eastern branch of the Cagayan River substantially dries up for the most part of the year such that when this happens, Lot 821 becomes physically (i.e., by land) connected with the dried up bed owned by respondent Manalo. Both courts below in effect rejected the assertion of petitioners that the depression on the earth's surface which separates Lot 307 and Lot 821 is, during part of the year, the bed of the eastern branch of the Cagayan River.

It is a familiar rule that the findings of facts of the trial court are entitled to great respect, and that they carry even more weight when affirmed by the Court of Appeals. 9 This is in recognition of the peculiar advantage on the part of the trial court of being able to observe first-hand the deportment of the witnesses while testifying. Jurisprudence is likewise settled that the Court of Appeals is the final arbiter of questions of fact. 10 But whether a conclusion drawn from such findings of facts is correct, is a question of law cognizable by this Court. 11

In the instant case, the conclusion reached by both courts below apparently collides with their findings that periodically at the onset of and during the rainy season, river water flows through the eastern bed of the Cagayan River. The trial court held:

The Court believes that the land in controversy is of the nature and character of alluvion (Accretion), for it appears that during the dry season, the body of water separating the same land in controversy (Lot No. 821, Pls-964) and the two (2) parcels of land which the plaintiff purchased from Gregorio Taguba and Justina Taccad Cayaba becomes a marshy land and is only six (6) inches deep and twelve (12) meters in width at its widest in the northern tip (Exhs. "W", "W-l", "W-2", "W-3" and "W-4"), It has been held by our Supreme Court that "the owner of the riparian land which receives the gradual deposits of alluvion, does not have to make an express act of possession. The law does not require it, and the deposit created by the current of the water becomes manifest" (Roxas vs. Tuazon, 6 Phil. 408). 12

The Court of Appeals adhered substantially to the conclusion reached by the trial court, thus:

As found by the trial court, the disputed property is not an island in the strict sense of the word since the eastern portion of the said property claimed by appellants to be part of the Cagayan River dries up during summer. Admittedly, it is the action of the heavy rains which comes during rainy season especially from September to November which increases the water level of the Cagayan river. As the river becomes swollen due to heavy rains, the lower portion of the said strip of land located at its southernmost point would be inundated with water. This is where the water of the Cagayan river gains its entry. Consequently, if the water level is high the whole strip of land would be under water.

In Government of the Philippine Islands vs. Colegio de San Jose, it was held that —

According to the foregoing definition of the words "ordinary" and "extra-ordinary," the highest depth of the waters of Laguna de Bay during the dry season is the ordinary one, and the highest depth they attain during the extra-ordinary one (sic); inasmuch as the former is the one which is regular, common, natural, which occurs always or most of the time during the year, while the latter is uncommon, transcends the general rule, order and measure, and goes beyond that which is the ordinary depth. If according to the definition given by Article 74 of the Law of Waters quoted above, the natural bed or basin of the lakes is the ground covered by their waters when at their highest ordinary depth, the natural bed or basin of Laguna de Bay is the ground covered by its waters when at their highest depth during the dry season, that is up to the northeastern boundary of the two parcels of land in question.

We find the foregoing ruling to be analogous to the case at bar. The highest ordinary level of the waters of the Cagayan River is that attained during the dry season which is confined only on the west side of Lot [821] and Lot [822]. This is the natural Cagayan river itself. The small residual of water between Lot [821] and 307 is part of the small stream already in existence when the whole of the late Judge Juan Taccad's property was still susceptible to cultivation and uneroded. 13

The Court is unable to agree with the Court of Appeals that Government of the Philippine Islands vs. Colegio de San Jose 14 is applicable to the present case. That case involved Laguna de Bay; since Laguna de Bay is a lake, the Court applied the legal provisions governing the ownership and use of lakes and their beds and

shores, in order to determine the character and ownership of the disputed property. Specifically, the Court applied the definition of the natural bed or basin of lakes found in Article 74 of the Law of Waters of 3 August 1866. Upon the other hand, what is involved in the instant case is the eastern bed of the Cagayan River.

We believe and so hold that Article 70 of the Law of Waters of 3 August 1866 is the law applicable to the case at bar:

Art. 70. The natural bed or channel of a creek or river is the ground covered by its waters during the highest floods. (Emphasis supplied)

We note that Article 70 defines the natural bed or channel of a creek or river as the ground covered by its waters during the highest floods. The highest floods in the eastern branch of the Cagayan River occur with the annual coming of the rains as the river waters in their onward course cover the entire depressed portion. Though the eastern bed substantially dries up for the most part of the year (i.e., from January to August), we cannot ignore the periodical swelling of the waters ( i.e., from September to December) causing the eastern bed to be covered with flowing river waters.

The conclusion of this Court that the depressed portion is a river bed rests upon evidence of record.1âwphi1 Firstly, respondent Manalo admitted in open court that the entire area he bought from Gregorio Taguba was included in Lot 307. 15 If the 1.80 hectares purchased from Gregorio Taguba was included in Lot 307, then the Cagayan River referred to as the western boundary in the Deed of Sale transferring the land from Gregorio Taguba to respondent Manalo as well as the Deed of Sale signed by Faustina Taccad, must refer to the dried up bed (during the dry months) or the eastern branch of the river (during the rainy months). In the Sketch Plan attached to the records of the case, Lot 307 is separated from the western branch of the Cagayan River by a large tract of land which includes not only Lot 821 but also what this Court characterizes as the eastern branch of the Cagayan River.

Secondly, the pictures identified by respondent Manalo during his direct examination depict the depressed portion as a river bed. The pictures, marked as Exhibits "W" to "W-4", were taken in July 1973 or at a time when the eastern bed becomes visible. 16 Thus, Exhibit "W-2" which according to respondent Manalo was taken facing the east and Exhibit "W-3" which was taken facing the west both show that the visible, dried up portion has a markedly lower elevation than Lot 307 and Lot 821. It has dike-like slopes on both sides connecting it to Lot 307 and Lot 821 that are vertical upward and very prominent. This topographic feature is compatible with the fact that a huge volume of water passes through the eastern bed regularly during the rainy season. In addition, petitioner Ponciano Gannaban testified that one had to go down what he called a "cliff" from the surveyed portion of the land of respondent Manalo to the depressed portion. The cliff, as related by petitioner Gannaban, has a height of eight (8) meters. 17

The records do not show when the Cagayan River began to carve its eastern channel on the surface of the earth. However, Exhibit "E" 18 for the prosecution which was the Declaration of Real Property standing in the name of Faustina Taccad indicates that the eastern bed already existed even before the sale to respondent Manalo. The words "old bed" enclosed in parentheses—perhaps written to make legitimate the claim of private ownership over the submerged portion—is an implied admission of the existence of the river bed. In the Declaration of Real Property made by respondent Manalo, the depressed portion assumed the name Rio Muerte de Cagayan. Indeed, the steep dike-like slopes on either side of the eastern bed could have been formed only after a prolonged period of time.

Now, then, pursuant to Article 420 of the Civil Code, respondent Manalo did not acquire private ownership of the bed of the eastern branch of the river even if it was included in the deeds of absolute sale executed by Gregorio Taguba and Faustina Taccad in his favor. These vendors could not have validly sold land that constituted property of public dominion. Article 420 of the Civil Code states:

The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Emphasis supplied)

Although Article 420 speaks only of rivers and banks, "rivers" is a composite term which includes: (1) the running waters, (2) the bed, and (3) the banks. 19 Manresa, in commenting upon Article 339 of the Spanish Civil Code of 1889 from which Article 420 of the Philippine Civil Code was taken, stressed the public ownership of river beds:

La naturaleza especial de los rios, en punto a su disfrute general, hace que sea necesario considerar en su relacion de dominio algo mas que sus aguas corrientes. En efecto en todo rio es preciso distinguir 1. esta agua corriente; 2. el alveo o cauce, y 3. las riberas. Ahora bien: son estas dos ultimas cosas siempre de dominio publico, como las aguas?

Realmente no puede imaginarse un rio sin alveo y sin ribera; de suerte que al decir el Codigo civil que los rios son de dominio publico, parece que debe ir implicito el dominio publico de aquellos tres elementos que integran el rio. Por otra parte, en cuanto a los alveos o cauces tenemos la declaracion del art. 407, num 1, donde dice: son de dominion publico . . . los rios y sus cauces naturales; declaracion que concuerda con lo que dispone el art. 34 de la ley de [Aguas], segun el cual, son de dominion publico: 1. los alveos o cauces de los arroyos que no se hallen comprendidos en el art. 33, y 2. los alveos o cauces naturales de los riosen la extension que cubran sus aguas en las mayores crecidas ordinarias. 20 (Emphasis supplied)

The claim of ownership of respondent Manalo over the submerged portion is bereft of basis even if it were alleged and proved that the Cagayan River first began to encroach on his property after the purchase from Gregorio Taguba and Faustina Taccad. Article 462 of the Civil Code would then apply divesting, by operation of law, respondent Manalo of private ownership over the new river bed. The intrusion of the eastern branch of the Cagayan River into his landholding obviously prejudiced respondent Manalo but this is a common occurrence since estates bordering on rivers are exposed to floods and other evils produced by the destructive force of the waters. That loss is compensated by, inter alia, the right of accretion acknowledged by Article 457 of the Civil Code. 21 It so happened that instead of increasing the size of Lot 307, the eastern branch of the Cagayan River had carved a channel on it.

We turn next to the issue of accretion. After examining the records of the case, the Court considers that there was no evidence to prove that Lot 821 is an increment to Lot 307 and the bed of the eastern branch of the river. Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of three (3) requisites: (a) that the deposition of soil or sediment be gradual and imperceptible; (b) that it be the result of the action of the waters of the river (or sea); and (c) that the land where accretion takes place is adjacent to the banks of rivers (or the sea coast). 22 The Court notes that the parcels of land bought by respondent Manalo border on the eastern branch of the Cagayan River. Any accretion formed by this eastern branch which respondent Manalo may claim must be deposited on or attached to Lot 307. As it is, the claimed accretion (Lot 821) lies on the bank of the river not adjacent to Lot 307 but directly opposite Lot 307 across the river.

Assuming (arguendo only) that the Cagayan River referred to in the Deeds of Sale transferring ownership of the land to respondent Manalo is the western branch, the decision of the Court of Appeals and of the trial court are bare of factual findings to the effect that the land purchased by respondent Manalo received alluvium from the action of the aver in a slow and gradual manner. On the contrary, the decision of the lower court made mention of several floods that caused the land to reappear making it susceptible to cultivation. A sudden and forceful action like that of flooding is hardly the alluvial process contemplated under Article 457 of the Civil Code. It is the slow and hardly perceptible accumulation of soil deposits that the law grants to the riparian owner.

Besides, it is important to note that Lot 821 has an area of 11.91 hectares. Lot 821 is the northern portion of the strip of land having a total area of 22.72 hectares. We find it difficult to suppose that such a sizable area as Lot 821 resulted from slow accretion to another lot of almost equal size. The total landholding purchased by respondent Manalo is 10.45 hectares (8.65 hectares from Faustina Taccad and 1.80 hectares from Gregorio Taguba in 1959 and 1964, respectively), in fact even smaller than Lot 821 which he claims by way of accretion. The cadastral survey showing that Lot 821 has an area of 11.91 hectares was conducted in 1969. If respondent Manalo's contention were accepted, it would mean that in a span of only ten (10) years, he had more than doubled his landholding by what the Court of Appeals and the trial court considered as accretion. As already noted, there are steep vertical dike-like slopes separating the depressed portion or river bed and Lot 821 and Lot 307. This topography of the land, among other things, precludes a reasonable conclusion that Lot 821 is an increment to the depressed portion by reason of the slow and constant action of the waters of either the western or the eastern branches of the Cagayan River.

We turn finally to the issue of ownership of Lot 821. Respondent Manalo's claim over Lot 821 rests on accretion coupled with alleged prior possession. He alleged that the parcels of land he bought separately from Gregorio Taguba and Faustina Taccad were formerly owned by Judge Juan Taccad who was in possession thereof through his (Judge Taccad's) tenants. When ownership was transferred to him, respondent Manalo took over the cultivation of the property and had it declared for taxation purposes in his name. When petitioners forcibly entered into his property, he twice instituted the appropriate action before the Municipal Trial Court of Tumauini, Isabela. Against respondent Manalo's allegation of prior possession, petitioners presented tax declarations standing in their respective names. They claimed lawful, peaceful and adverse possession of Lot 821 since 1955.

If respondent Manalo had proved prior possession, it was limited physically to Lot 307 and the depressed portion or the eastern river bed. The testimony of Dominga Malana who was a tenant for Justina Taccad did not indicate that she was also cultivating Lot 821. In fact, the complaints for forcible entry lodged before the Municipal Trial Court of Tumauini, Isabela pertained only to Lot 307 and the depressed portion or river bed and not to Lot 821. In the same manner, the tax declarations presented by petitioners conflict with those of respondent Manalo. Under Article 477 of the Civil Code, the plaintiff in an action for quieting of title must at least have equitable title to or interest in the real property which is the subject matter of the action. The evidence of record on this point is less than satisfactory and the Court feels compelled to refrain from determining the ownership and possession of Lot 821, adjudging neither petitioners nor respondent Manalo as owner(s) thereof.

WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-GR CV No. 04892 are hereby SET ASIDE. Respondent Manalo is hereby declared the owner of Lot 307. The regularly submerged portion or the eastern bed of the Cagayan River is hereby DECLARED to be property of public dominion. The ownership of Lot 821 shall be determined in an appropriate action that may be instituted by the interested parties inter se. No pronouncement as to costs.

SO ORDERED.

G.R. No. 93654 May 6, 1992

FRANCISCO U. DACANAY, petitioner, vs.MAYOR MACARIO ASISTIO, JR., CITY ENGR. LUCIANO SARNE, JR. of Kalookan City, Metro Manila, MILA PASTRANA AND/OR RODOLFO TEOFE, STALLHOLDERS AND REPRESENTING CO-STALLHOLDERS,respondents.

David D. Advincula, Jr. for petitioner.

Juan P. Banaga for private respondents.

 

GRIÑO-AQUINO, J.:

May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city ordinance or resolution of the Metro Manila Commission? This issue is posed by the petitioner, an aggrieved Caloocan City resident who filed a special civil action of mandamus against the incumbent city mayor and city engineer, to compel these city officials to remove the market stalls from certain city streets which the aforementioned city officials have designated as flea markets, and the private respondents (stallholders) to vacate the streets.

On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan Manila Commission, designating certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant, thereto, the Caloocan City mayor opened up seven (7) flea markets in that city. One of those streets was the "Heroes del '96" where the petitioner lives. Upon application of vendors Rodolfo Teope, Mila Pastrana, Carmen Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo Paguirigan, Alejandro Castron, Ruben Araneta, Juanita and Rafael Malibaran, and others, the respondents city mayor and city engineer, issued them licenses to conduct vending activities on said street.

In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market stalls on Heroes del '96, V. Gozon and Gonzales streets. To stop Mayor Martinez' efforts to clear the city streets, Rodolfo Teope, Mila Pastrana and other stallowners filed an action for prohibition against the City of Caloocan, the OIC City Mayor and the City Engineer and/or their deputies (Civil Case No. C-12921) in the Regional Trial Court of Caloocan City, Branch 122, praying the court to issue a writ of preliminary injunction ordering these city officials to discontinue the demolition of their stalls during the pendency of the action.

The court issued the writ prayed for. However, on December 20, 1987, it dismissed the petition and lifted the writ of preliminary injunction which it had earlier issued. The trial court observed that:

A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will show on the title itself that it is an ordinance ––

Authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions, subject to the approval of the Metropolitan Manila Commission, and for other purposes

which is further amplified in Section 2 of the said ordinance, quoted hereunder:

Sec. 2. The streets, roads and open spaces to be used as sites for flea markets (tiangge) or vending areas; the design, measurement or specification of the structures, equipment and apparatuses to be used or put up; the allowable distances; the days and time allowed for the conduct of the businesses and/or activities herein authorized; the rates or fees or charges to be imposed, levied and collected; the kinds of merchandise, goods and commodities sold and services rendered; and other matters and activities related to the establishment, maintenance and management and operation of flea markets and vending areas, shall be determined and prescribed by the mayors of the cities and municipalities in the Metropolitan Manila where the same are located, subject to the approval of the Metropolitan Manila Commission and consistent with the guidelines hereby prescribed.

Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC that —

Sec. 6. In the establishment, operation, maintenance and management of flea markets and vending areas, the following guidelines, among others, shall be observed:

xxx xxx xxx

(m) That the permittee shall remove the equipment, facilities and other appurtenances used by him in the conduct of his business after the close or termination of business hours. (Emphasis ours; pp. 15-16, Rollo.)

The trial court found that Heroes del '96, Gozon and Gonzales streets are of public dominion, hence, outside the commerce of man:

The Heroes del '96 street, V. Gozon street and Gonzales street, being of public dominion must, therefore, be outside of the commerce of man. Considering the nature of the subject premises, the following jurisprudence co/principles are applicable on the matter:

1) They cannot be alienated or leased or otherwise be the subject matter of contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602);

2) They cannot be acquired by prescription against the state (Insular Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire them for use as communal lands against the state (City of Manila vs. Insular Government, 10 Phil. 327);

3) They are not subject to attachment and execution (Tan Toco vs. Municipal Council of Iloilo, 49 Phil. 52);

4) They cannot be burdened by any voluntary easement (2-II Colin & Capitant 520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp. 29-30).

In the aforecited case of Municipality of Cavite vs. Rojas, it was held that properties for public use may not be leased to private individuals. Such a lease is null and void for the reason that a municipal council cannot withdraw part of the plaza from public use. If possession has already been given, the lessee must restore possession by vacating it and the municipality must thereupon restore to him any sums it may have collected as rent.

In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the Supreme Court held:

The property being a public one, the Manila Mayors did not have the authority to give permits, written or oral, to the squatters, and that the permits granted are therefore considered null and void.

This doctrine was reiterated in the case of Baguio Citizens Action Inc. vs. The City Council, 121 SCRA 368, where it was held that:

An ordinance legalizing the occupancy by squatters of public land is null and void.

The authority of respondent Municipality of Makati to demolish the shanties of the petitioner's members is mandated by P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public officials, one of whom is the Municipal Mayor to remove all illegal constructions including buildings on and along esteros and river banks, those along railroad tracks and those built without permits on public or private property (Zansibarian Residents Association vs. Mun. of Makati, 135 SCRA 235). The City Engineer is also among those required to comply with said Letter of Instruction.

The occupation and use of private individuals of sidewalks and other public places devoted for public use constitute both public and private nuisances and nuisance per se, and this applies to even case involving the use or lease of public places under permits and licenses issued by competent authority, upon the theory that such holders could not take advantage of their unlawful permits and license and claim that the land in question is a part of a public street or a public place devoted to public

use, hence, beyond the commerce of man. (Padilla, Civil Code Annotated, Vol. II, p. 59, 6th Ed., citing Umali vs. Aquino, IC. A. Rep. 339.)

From the aforequoted jurisprudence/principles, the Court opines that defendants have the right to demolish the subject stalls of the plaintiffs, more so when Section 185, par. 4 of Batas Pambansa Blg. 337, otherwise known as the Local Government Code provides that the City Engineer shall:

(4) . . .

(c) Prevent the encroachment of private buildings and fences on the streets and public places;

xxx xxx xxx

(j) Inspect and supervise the construction, repair, removal and safety of private buildings;

xxx xxx xxx

(k) With the previous approval of the City Mayor in each case, order the removal of materials employed in the construction or repair of any building or structures made in violation of law or ordinance, and cause buildings and structures dangerous to the public to made secure or torn down;

xxx xxx xxx

Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27, par. g, 1 and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 17-20, Rollo.)

However, shortly after the decision came out, the city administration in Caloocan City changed hands. City Mayor Macario Asistio, Jr., as successor of Mayor Martinez, did not pursue the latter's policy of clearing and cleaning up the city streets.

Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a concerned citizen, taxpayer and registered voter of Barangay 74, Zone 7, District II of Caloocan City, who resides on Heroes del '96 Street, one of the affected streets, wrote a letter dated March 7, 1988 to Mayor Asistio, Jr., calling his attention to the illegally-constructed stalls on Heroes del '96 Street and asked for their demolition.

Dacanay followed up that letter with another one dated April 7, 1988 addressed to the mayor and the city engineer, Luciano Sarne, Jr. (who replaced Engineer Arturo Samonte), inviting their attention to the Regional Trial Court's decision in Civil Case No. 12921. There was still no response.

Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on the matter. His letter was referred to the city mayor for appropriate action. The acting Caloocan City secretary, Asuncion Manalo, in a letter dated August 1, 1988, informed the Presidential Staff Director that the city officials were still studying the issue of whether or not to proceed with the demolition of the market stalls.

Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office of the OMBUDSMAN. In their letter-comment dated April 3, 1989, said city officials explained that in view of the huge number of stallholders involved, not to mention their dependents, it would be harsh and inhuman to eject them from the area in question, for their relocation would not be an easy task.

In reply, Dacanay maintained that respondents have been derelict in the performance of their duties and through manifest partiality constituting a violation of Section 3(e) of R.A. 3019, have caused undue injury to the Government and given unwarranted benefits to the stallholders.

After conducting a preliminary investigation, the OMBUDSMAN rendered a final evaluation and report on August 28, 1989, finding that the respondents' inaction is purely motivated by their perceived moral and social responsibility toward their constituents, but "the fact remains that there is an omission of an act which ought to be performed, in clear violation of Sections 3(e) and (f) of Republic Act 3019." (pp. 83-84, Rollo.) The OMBUDSMAN recommended the filing of the corresponding information in court.

As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the public respondents, and in clear violation of the decision it Civil Case No. C-12921, Dacanay filed the present petition for mandamuson June 19, 1990, praying that the public respondents be ordered to enforce the final decision in Civil Case No. C-12921 which upheld the city mayor's authority to order the demolition of market stalls on V. Gozon, Gonzales and Heroes del '96 Streets and to enforce P.D. No. 772 and other pertinent laws.

On August 16, 1990, the public respondents, through the City Legal Officer, filed their Comment' on the petition. The Office of the Solicitor General asked to be excused from filing a separate Comment in behalf of the public respondents. The City Legal Officer alleged that the vending area was transferred to Heroes del '96 Street to decongest Malonzo Street, which is comparatively a busier thoroughfare; that the transfer was made by virtue of Barangay Resolution No. 30 s'78 dated January 15, 1978; that while the resolution was awaiting approval by the Metropolitan Manila Commission, the latter passed Ordinance No. 79-2, authorizing the use of certain streets and open spaces as sites for flea markets and/or vending areas; that pursuant thereto, Acting MMC Mayor Virgilio P. Robles issued Executive Order No. 135 dated January 10, 1979, ordering the establishment and operation of flea markets in specified areas and created the Caloocan City Flea Market Authority as a regulatory body; and that among the sites chosen and approved by the Metro Manila Commission, Heroes del '96 Street has considered "most viable and progressive, lessening unemployment in the city and servicing the residents with affordable basic necessities."

The petition for mandamus is meritorious.

There is no doubt that the disputed areas from which the private respondents' market stalls are sought to be evicted are public streets, as found by the trial court in Civil Case No. C-12921. A public street is property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contract (Villanueva et al. vs. Castañeda and Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot vs. De la Fuente, 48 O.G. 4860).

As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to protect.

The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a vending area for stallholders who were granted licenses by the city government contravenes the general law that reserves city streets and roads for public use. Mayor Robles' Executive Order may not infringe upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians. As early as 1989, the public respondents bad started to look for feasible alternative sites for flea markets. They have had more than ample time to relocate the street vendors.

WHEREFORE, it having been established that the petitioner and the general public have a legal right to the relief demanded and that the public respondents have the corresponding duty, arising from public office, to clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City

of Manila vs. Garcia et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents City Mayor and City Engineer of Caloocan City or their successors in office are hereby ordered to immediately enforce and implement the decision in Civil Case No. C-1292 declaring that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public use, and they are ordered to remove or demolish, or cause to be removed or demolished, the market stalls occupying said city streets with utmost dispatch within thirty (30)days from notice of this decision. This decision is immediately executory.

SO ORDERED.

[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.

D E C I S I O N

PURISIMA, J.:

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 Trial Court, 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 involve is not within the forest zone or government reservation.

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).

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.

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.

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:

"xxx 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. xxx

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)

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.

G. R. No. L-41001 September 30, 1976

MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF THE ELKS, INC., petitioner, vs.THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC DEVELOPMENT CORPORATION,respondents.

No. L-41012 September 30, 1976

TARLAC DEVELOPMENT CORPORATION, petitioner, vs.HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC., respondents.

 

CASTRO, C.J.:têñ.£îhqwâ£

STATEMENT OF THE CASE AND STATEMENTOF THE FACTS

These two cases are petitions on certiorari to review the decision dated June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R entitled "Tarlac Development Corporation vs. City of Manila, and Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the trial court's finding in Civil Case No. 83009 that the property subject of the decision a quo is a "public park or plaza."

On June 26, 1905 the Philippine Commission enacted Act No. l360 which authorized the City of Manila to reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta extension. The Act provided that the reclaimed area "Shall be the property of the City of Manila" and that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension x x x at the north end not to exceed five hundred feet by six hundred feet in size, for a hotel site, and to lease the same, with the approval of the Governor General, to a responsible person or corporation for a term not exceed ninety-nine years."

Subsequently, the Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No. 1360, so as to authorize the City of' Manila either to lease or to sell the portion set aside as a hotel site.

The total area reclaimed was a little over 25 hectares. The City of Manila applied for the registration of the reclaimed area, and on January 20, 1911, O.C.T. No. 1909 was issued in the name of the City of Manila. The title described the registered land as "un terreno conocido con el nombre de Luneta Extension, situato en el

distrito de la Ermita x x x." The registration was "subject, however to such of the incumbrances mentioned in Article 39 of said law (Land Registration Act) as may be subsisting" and "sujeto a las disposiciones y condiciones impuestas en la Ley No. 1360; y sujeto tambein a los contratos de venta, celebrados y otorgados por la Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge No. 761, Benevolent and Protective Order of Elks, fechados respectivamente, en 29 de Diciembre de 1908 y 16 de Enero de 1909." 1

On July 13, 1911 the City of Manila, affirming a prior sale dated January 16, 1909 cancelled 5,543.07 square meters of the reclaimed area to the Manila Lodge No. 761, Benevolent and Protective Order of Elks of the U.S.A. (BPOE, for short) on the basis of which TCT No. 2195 2 was issued to the latter over the Marcela de terreno que es parte de la Luneta Extension, Situada en el Distrito le la Ermita ... ." At the back of this title vas annotated document 4608/T-1635, which in part reads as follows: "que la citada Ciusdad de Manila tendra derecho a su opcion, de recomparar la expresada propiedad para fines publicos solamete in cualquier tiempo despues de cincuenta anos desde el 13 le Julio le 1911, precio de la misma propiedad, mas el valor que entonces tengan las mejoras."

For the remainder of the Luneta Extension, that is, after segregating therefrom the portion sold to the Manila Lodge No. 761, PBOE, a new Certificate of Title No. 2196 3 was issued on July 17, 1911 to the City of Manila.

Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 square meters to the Elks Club, Inc., to which was issued TCT No. 67488. 4 The registered owner, "The Elks Club, Inc.," was later changed by court oder to "Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc."

In January 1963 the BPOE. petitioned the Court of First Instance of Manila, Branch IV, for the cancellation of the right of the City of Manila to repurchase the property This petition was granted on February 15, 1963.

On November 19, 1963 the BPOE sold for the sum of P4,700,000 the land together with all the improvements thereon to the Tarlac Development Corporation (TDC, for short) which paid P1,700.000 as down payment and mortgaged to the vendor the same realty to secure the payment of the balance to be paid in quarterly installments.5 At the time of the sale,, there was no annotation of any subsisting lien on the title to the property. On December 12, 1963 TCT No. 73444 was issued to TDC over the subject land still described as "UNA PARCELA DE TERRENO, que es parte de la Luneta Extension, situada en el Distrito de Ermita ... ."

In June 1964 the City of Manila filed with the Court of First Instance of Manila a petition for the reannotation of its right to repurchase; the court, after haering, issued an order, dated November 19, 1964, directing the Register of Deeds of the City of Manila to reannotate in toto the entry regarind the right of the City of Manila to repurchase the property after fifty years. From this order TDC and BPOE appealed to this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-24469 the trial court's order of reannotation, but reserved to TDC the right to bring another action for the clarification of its rights.

As a consequence of such reservation, TDC filed on April 28, 1971 against the City of Manila and the Manila Lodge No. 761, BPOE, a complaint, docketed as Civil Case No. 83009 of the Court of First Instance of Manila, containing three causes of action and praying -

a) On the first cause of action, that the plaintiff TDC be declared to have purchased the parcel of land now in question with the buildings and improvements thereon from the defendant BPOE for value and in good faith, and accordingly ordering the cancellation of Entry No. 4608/T-1635 on Transfer Certificate of Title No. 73444 in the name of the Plaintiff;

b) On the second cause of action, ordering the defendant City of Manila to pay the plaintiff TDC damages in the sum of note less than one hundred thousand pesos (P100,000.00);

c) On the third cause of action, reserving to the plaintiff TDC the right to recover from the defendant BPOE the amounts mentioned in par. XVI of the complaint in accordance with Art. 1555 of the Civil Code, in the remote event that the final judgment in this case should be that the parcel of land now in question is a public park; and

d) For costs, and for such other and further relief as the Court may deem just and equitable. 6

Therein defendant City of Manila, in its answer dated May 19, 1971, admitted all the facts alleged in the first cause of action except the allegation that TDC purchased said property "for value and in good faith," but denied for lack of knowledge or information the allegations in the second and third causes of action. As, special and affirmative defense, the City of Manila claimed that TDC was not a purchaser in good faith for it had actual notice of the City's right to repurchase which was annotated at the back of the title prior to its cancellation, and that, assuming arguendo that TDC had no notice of the right to repurchase, it was, nevertheless, under obligation to investigate inasmuch as its title recites that the property is a part of the Luneta extension. 7

The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971, admitted having sold the land together with the improvements thereon for value to therein plaintiff which was in good faith, but denied for lack of knowledge as to their veracity the allegations under the second cause of action. It furthermore admitted that TDC had paid the quarterly installments until October l5, 1964 but claimed that the latter failed without justifiable cause to pay the subsequent installments. It also asserted that it was a seller for value in good faith without having misrepresented or concealed tacts relative to the title on the property. As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the balance of the purchase price plus interest and costs. 8

On June 15, 1971 TDC answered the aforesaid counterclaim, alleging that its refusal to make further payments was fully justified. 9

After due trial the court a quo rendered on July 14, 1972 its decision finding the subject land to be part of the "public park or plaza" and, therefore, part of the public domain. The court consequently declared that the sale of the subject land by the City of Manila to Manila Lodge No. 761, BPOE, was null and void; that plaintiff TDC was a purchaser thereof in g faith and for value from BPOE and can enforce its rights against the latter; and that BPOE is entitled to recover from the City of Manila whatever consideration it had 'paid the latter. 'The dispositive part of the decision reads: ñé+.£ªwph!1

WHEREFORE, the Court hereby declares that the parcel of land formerly covered by Transfer Certificate of Title Nos 2195 and 67488 in the name of BPOE and now by Transfer Certificate of Title No. 73444 in the name of Tarlac Development Corporation is a public' park or plaza, and, consequently, instant complaint is dimissed, without pronouncement as to costs.

In view of the reservation made by plaintiff Tarlac Development Corporation to recover from defendant BPOE the amounts mentioned in paragraph XVI of the complaint in accordance with Article 1555 of the Civil Code, the Court makes no pronouncement on this point. 10

From said decision the therein plaintiff TDC as well as the defendant Manila Lodge No. 761, BPOE, appealed to the Court of Appeals.

In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No. 761, BPOE, avers that the trial court committed the following errors, namely:

1. In holding that the property subject of the action is not patrimonial property of the City of Manila; and

2. In holding that the Tarlac Development Corporation may recover and enforce its right against the defendant BPOE. 11

The Tarlac Development Corporation, on the other hand, asserts that the trial court erred:

(1) In finding that the property in question is or was a public park and in consequently nullifying the sale thereof by the City of Manila to BPOE;

(2) In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil. 602, and Government vs. Cabangis, 53 Phil. 112, to the case at bar; and

(3) In not holding that the plaintiff-appellant is entitled to ,recover damages from the defendant City of Manila. 12

Furthermore, TDC as appellee regarding the second assignment of error raised by BPOE, maintained that it can recover and enforce its rigth against BPOE in the event that the land in question is declared a public park or part thereof. 13

In its decision promulgated on June 30, 1975, the Court of Appeals concur ed in the findings and conclusions of the lower court upon the ground that they are supported by he evidence and are in accordance with law, and accordingly affirmed the lower court's judgment.

Hence, the present petitions for review on certiorari.

G.R. No. L-41001

The Manila Lodge No. 761, BPOE, contends, in its petition for review on certiorari docketed as G.R. No. L-41001, that the Court of Appeals erred in (1) disregarding the very enabling acts and/or statutes according to which the subject property was, and still is, patrimonial property of the City of Manila and could therefore be sold and/or disposed of like any other private property; and (2) in departing from the accepted and usual course of judicial proceedings when it simply made a general affirmance of the court a quo's findings and conclusions without bothering to discuss or resolve several vital points stressed by the BPOE in its assigned errrors. 14

G.R. No. L-41012

The Tarlac Development Corporation, in its petition for review on certiorari docketed as G.R. No. L-41012, relies on the following grounds for the allowance of its petition:

1. that the Court of Appeals did not correctly interpret Act No. 1360, as amended by Act No. 1657, of the Philippine Commission; and

2. that the Court of Appeals has departed from the accepted and usual course of judicial proceedings in that it did not make its own findings but simply recited those of the lower court. 15

ISSUES AND ARGUMENTS

FIRST ISSUE

Upon the first issue, both petitioners claim that the property subject of the action, pursuant to the provisions of Act No. 1360, as amended by Act No. 1657, was patrimonial property of the City of Manila and not a park or plaza.

Arguments of Petitioners

In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that "there appears to be some logic in the conclusion" of the Court of Appeals that "neither Act No. 1360 nor Act No. 1657 could have meant to supply the City of Manila the authority to sell the subject property which is located at the south end not the north — of the reclaimed area." 16 It argues, however, that when Act No. 1360, as amended, authorized the City of Manila to undertake the construction of the Luneta extension by reclaimed land from the Manila Bay, and declared that the reclaimed land shall be the "property of the City of Manila," the State expressly granted the ownership thereof to the City of Manila which. consequently. could enter into transactions involving it; that upon the issuance of O.C.T. No. 1909, there could he no doubt that the reclaimed area owned by the City was its patrimonial property;" that the south end of the reclaimed area could not be for public use for. as argued by TDC a street, park or promenade can be property for public use pursuant to Article 344 of the Spanish Civil Code only when it has already been so constructed or laid out, and the subject land, at the time it was sold to the Elk's Club, was neither actually constructed as a street, park or promenade nor laid out as a street, park or

promenade;" that even assuming that the subject property was at the beginning property of public dominion, it was subsequently converted into patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch as it had never been used, red or utilized since it was reclaimed in 1905 for purpose other than this of an ordinary real estate for sale or lease; that the subject property had never been intended for public use, is further shown by the fact that it was neither included as a part of the Luneta Park under Plan No. 30 of the National Planning Commission nor considered a part of the Luneta National Park (now Rizal Park) by Proclamation No. 234 dated December 19, 1955 of President Ramon Magsaysay or by Proclamation Order No. 274 dated October 4, 1967 of President Ferdinand E. Marcos;" 19 that, such being the case, there is no reason why the subject property should -not be considered as having been converted into patrimonial property, pursuant to the ruling in Municipality vs. Roa 7 Phil. 20, inasmuch as the City of Manila has considered it as its patrimonial property not only bringing it under the operation of the Land Registration Act but also by disposing of it; 20 and that to consider now the subject property as a public plaza or park would not only impair the obligations of the parties to the contract of sale (rated July 13, 1911, but also authorize deprivation of property without due process of law. 21

G.R. No. L-410112

In L-41012, the petitioner TDC stresses that the principal issue is the interpretation of Act No. 1360, as amended by. Act No. 1657 of the Philippine Commission, 22 and avers that inasmuch as Section 6 of Act No. 1360, as amended by Act 1657, provided that the reclamation of the Luneta extension was to be paid for out of the funds of the City of Manila which was authorized to borrow P350,000 "to be expended in the construction of Luneta Extension," the reclaimed area became "public land" belonging to the City of Manila that spent for the reclamation, conformably to the holding in Cabangis,23 and consequently, said land was subject to sale and other disposition; that the Insular Government itself considered the reclaimed Luneta extension as patrimonial property subject to disposition as evidenced by the fact that See. 3 of Act 1360 declared that "the land hereby reclaimed shall be the property of the City of Manila;" that this property cannot be property for public use for according to Article 344 of the Civil Code, the character of property for public use can only attach to roads and squares that have already been constructed or at least laid out as such, which conditions did not obtain regarding the subject land, that Sec. 5 of Act 1360 authorized the City of Manila to lease the northern part of the reclaimed area for hotel purposes; that Act No. 1657 furthermore authorized the City of Manila to sell the same; 24 that the express statutory authority to lease or sell the northern part of the reclaimed area cannot be interpreted to mean that the remaining area could not be sold inasmuch as the purpose of the statute was not merely to confer authority to sell the northern portion but rather to limit the city's power of disposition thereof, to wit: to prevent disposition of the northern portion for any purpose other than for a hotel site that the northern and southern ends of the reclaimed area cannot be considered as extension of the Luneta for they lie beyond the sides of the original Luneta when extended in the direction of the sea, and that is the reason why the law authorized the sale of the northern portion for hotel purposes, and, for the same reason, it is implied that the southern portion could likewise be disposed of. 26

TDC argues likewise that there are several items of uncontradicted circumstantial evidence which may serve as aids in construing the legislative intent and which demonstrate that the subject property is patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of the National Planning Commission showing the Luneta and its vicinity, do not include the subject property as part of the Luneta Park; (2) Exhibit "K", which is the plan of the subject property covered by TCT No. 67488 of BPOE, prepared on November 11, 1963, indicates that said property is not a public park; (3) Exhibit "T", which is a certified copy of Proclamation No. 234 issued on December 15, 1955 is President Magsaysay, and Exhibit "U" which is Proclamation Order No. 273 issued on October 4, 1967 by President Marcos, do not include the subject property in the Luneta Park-, (4) Exhibit "W", which is the location plan of the Luneta National Park under Proclamations Nos. 234 and 273, further confirms that the subject property is not a public park; and (5) Exhibit "Y", which is a copy of O.C.T. No. 7333 in the name of the United States of America covering the land now occupied by the America covering the land now occupied by the American Embassy, the boundaries of which were delineated by the Philippine Legislature, states that the said land is bounded on the northwest by properties of the Army and Navy Club (Block No. 321) and the Elks Club (Block No. 321), and this circumstance shows that even the Philippine Legislature recognized the subject property as private property of the Elks Club. 27

TDC furthermore contends that the City of Manila is estopped from questioning the validity of the sale of the subject property that it executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for several reasons, namely: (1) the City's petition for the reannotation of Entry No. 4608/T-1635 was predicated on the validity of said sale; (2) when the property was bought by the petitioner TDC it was not a public plaza or park as testified to by both Pedro Cojuanco, treasurer of TDC, and the surveyor, Manuel Añoneuvo, according to whom the subject property was from all appearances private property as it was enclosed by fences; (3) the property in question was cadastrally surveyed and registered as property of the Elks Club, according to Manuel Anonuevo; (4) the property was never used as a public park, for, since the issuance of T.C.T. No. 2165 on July 17, 1911 in the name of the Manila Lodge NO. 761, the latter used it as private property, and as early as

January 16, 1909 the City of Manila had already executed a deed of sale over the property in favor of the Manila Lodge No. 761; and (5) the City of Manila has not presented any evidence to show that the subject property has ever been proclaimed or used as a public park. 28

TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot apply to the subject land, for Com. Act No. 141 took effect on December 1, 1936 and at that time the subject land was no longer part of the part of the public domain. 29

TDC also stresses that its rights as a purchaser in good faith cannot be disregarded, for the mere mention in the certificate of title that the lot it purchased was "part of the Luneta extension" was not a sufficient warning that tile title to the City of Manila was invalid; and that although the trial court, in its decision affirmed by the Court of Appeals, found the TDC -to has been an innocent purchaser for value, the court disregarded the petitioner's rights as such purchaser that relied on Torrens certificate of title. 30

The Court, continues the petitioner TDC erred in not holding that the latter is entitled to recover from the City of Manila damages in the amount of P100,000 caused by the City's petition for- reannotation of its right to repurchase.

DISCUSSION AND RESOLUTION OF FIRST ISSUE

It is a cardinal rule of statutory construction that courts must give effect to the general legislative intent that can be discovered from or is unraveled by the four corners of the statute, 31 and in order to discover said intent, the whole statute, and not only a particular provision thereof, should be considered. 32 It is, therefore, necessary to analyze all the provisions of Act No. 1360, as amended, in order to unravel the legislative intent.

Act No. 1360 which was enacted by the Philippine Commission on June 26, 1905, as amended by Act No. 1657 enacted on May 18, 1907, authorized the "construction of such rock and timber bulkheads or sea walls as may be necessary for the making of an extension to the Luneta" (Sec. 1 [a]), and the placing of the material dredged from the harbor of Manila "inside the bulkheads constructed to inclose the Luneta extension above referred to" (Sec. 1 [a]). It likewise provided that the plan of Architect D. H. Burnham as "a general outline for the extension and improvement of the Luneta in the City of Manila" be adopted; that "the reclamation from the Bay of Manila of the land included in said projected Luneta extension... is hereby authorized and the land thereby reclaimed shall be the property of the City of Manila" (Sec. 3); that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension authorized by this Act at the worth end of said tract, not to exceed five hundred feet by six hundred feet in size, for a hotel site, and to lease the same with the approval of the Governor General, ... for a term not exceeding ninety-nine years; that "should the Municipal Board ... deem it advisable it is hereby authorized to advertise for sale to sell said tract of land ... ;" "that said tract shall be used for hotel purposes as herein prescribed, and shall not be devoted to any other purpose or object whatever;" "that should the grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said tract of land sold, conveyed, and transferred, and shall not be devoted to any other purpose or object whatever;" "that should the grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said tract of land sold, conveyed, and transferred to the grantee shall revert to the City of Manila, and said City of Manila shall thereupon become entitled to immediate possession of said tract of land" (Sec. 5); that the construction of the rock and timber bulkheads or sea wall "shall be paid for out of the funds of the City of Manila, but the area to be reclaimed by said proposed Luneta extension shall be filled, without cost to the City of Manila, with material dredged from Manila Bay at the expense of the Insular Government" (Sec. 6); and that "the City of Manila is hereby authorized to borrow from the Insular Government ... the sum of three hundred thousand pesos, to be expended in the construction of Luneta extension provided for by paragraph (a) of section one hereof" (Sec.7).

The grant made by Act No. 1360 of the reclaimed land to the City of Manila is a grant of "public" nature, the same having been made to a local political subdivision. Such grants have always been strictly construed against the grantee. 33 One compelling reason given for the strict interpretation of a public grant is that there is in such grant a gratuitous donation of, public money or resources which results in an unfair advantage to the grantee and for that reason, the grant should be narrowly restricted in favor of the public. 34 This reason for strict interpretation obtains relative to the aforesaid grant, for, although the City of Manila was to pay for the construction of such work and timber bulkheads or sea walls as may be necessary for the making of the Luneta extension, the area to be reclaimed would be filled at the expense of the Insular Government and without cost to the City of Manila, with material dredged from Manila Bay. Hence, the letter of the statute should be narrowed to exclude maters which if included would defeat the policy of the legislation.

The reclaimed area, an extension to the Luneta, is declared to be property of the City of Manila. Property, however, is either of public ownership or of private ownership. 35 What kind of property of the City is the reclaimed land? Is it of public ownership (dominion) or of private ownership?

We hold that it is of public dominion, intended for public use.

Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City could, by virtue of its ownership, dispose of the whole reclaimed area without need of authorization to do so from the lawmaking body. Thus Article 348 of the Civil Code of Spain provides that "ownership is the right to enjoy and dispose of a thing without further limitations than those established by law." 36 The right to dispose (jus disponendi) of one's property is an attribute of ownership. Act No. 1360, as amended, however, provides by necessary implication, that the City of Manila could not dispose of the reclaimed area without being authorized by the lawmaking body. Thus the statute provides that "the City of Manila is hereby authorized to set aside a tract ... at the north end, for a hotel site, and to lease the same ... should the municipal board ... deem it advisable, it is hereby authorized ...to sell said tract of land ... " (Sec. 5). If the reclaimed area were patrimonial property of the City, the latter could dispose of it without need of the authorization provided by the statute, and the authorization to set aside ... lease ... or sell ... given by the statute would indeed be superfluous. To so construe the statute s to render the term "authorize," which is repeatedly used by the statute, superfluous would violate the elementary rule of legal hermeneutics that effect must be given to every word, clause, and sentence of the statute and that a statute should be so interpreted that no part thereof becomes inoperative or superfluous.37 To authorize means to empower, to give a right to act. 38 Act No. 1360 furthermore qualifies the verb it authorize" with the adverb "hereby," which means "by means of this statue or section," Hence without the authorization expressly given by Act No. 1360, the City of Manila could not lease or sell even the northern portion; much less could it dispose of the whole reclaimed area. Consequently, the reclaimed area was granted to the City of Manila, not as its patrimonial property. At most, only the northern portion reserved as a hotel site could be said to be patrimonial property for, by express statutory provision it could be disposed of, and the title thereto would revert to the City should the grantee fail to comply with the terms provided by the statute.

TDC however, contends that the purpose of the authorization provided in Act No. 1360 to lease or sell was really to limit the City's power of disposition. To sustain such contention is to beg the question. If the purpose of the law was to limit the City's power of disposition then it is necessarily assumed that the City had already the power to dispose, for if such power did not exist, how could it be limited? It was precisely Act 1360 that gave the City the power to dispose for it was hereby authorized by lease of sale. Hence, the City of Manila had no power to dispose of the reclaimed land had such power not been granted by Act No. 1360, and the purpose of the authorization was to empower the city to sell or lease the northern part and not, as TDC claims, to limit only the power to dispose. Moreover, it is presumed that when the lawmaking body enacted the statute, it had full knowledge of prior and existing laws and legislation on the subject of the statute and acted in accordance or with respect thereto. 39 If by another previous law, the City of Manila could already dispose of the reclaimed area, which it could do if such area were given to it as its patrimonial property, would it then not be a superfluity for Act No. 1360 to authorize the City to dispose of the reclaimed land? Neither has petitioner TDC pointed to any other law that authorized the City to do so, nor have we come across any. What we do know is that if the reclaimed land were patrimonial property, there would be no need of giving special authorization to the City to dispose of it. Said authorization was given because the reclaimed land was not intended to be patrimonial property of the City of Manila, and without the express authorization to dispose of the northern portion, the City could not dispose of even that part.

Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila." 40 If the reclaimed area is an extension of the Luneta, then it is of the same nature or character as the old Luneta. Anent this matter, it has been said that a power to extend (or continue an act or business) cannot authorize a transaction that is totally distinct. 41 It is not disputed that the old Luneta is a public park or plaza and it is so considered by Section 859 of the Revised Ordinances of the City of Manila. 42 Hence the "extension to the Luneta" must be also a public park or plaza and for public use.

TDC, however, contends that the subject property cannot be considered an extension of the old Luneta because it is outside of the limits of the old Luneta when extended to the sea. This is a strained interpretation of the term "extension," for an "extension," it has been held, "signifies enlargement in any direction — in length, breadth, or circumstance." 43

Thirdly, the reclaimed area was formerly a part of the manila Bay. A bay is nothing more than an inlet of the sea. Pursuant to Article 1 of the Law of Waters of 1866, bays, roadsteads, coast sea, inlets and shores are

parts of the national domain open to public use. These are also property of public ownership devoted to public use, according to Article 339 of the Civil Code of Spain.

When the shore or part of the bay is reclaimed, it does not lose its character of being property for public use, according to Government of the Philippine Islands vs. Cabangis. 44 The predecessor of the claimants in this case was the owner of a big tract of land including the lots in question. From 1896 said land began to wear away due to the action of the waters of Manila Bay. In 1901 the lots in question became completely submerged in water in ordinary tides. It remained in such a state until 1912 when the Government undertook the dredging of the Vitas estuary and dumped the Sand and - silt from estuary on the low lands completely Submerged in water thereby gradually forming the lots in question. Tomas Cabangis took possession thereof as soon as they were reclaimed hence, the claimants, his successors in interest, claimed that the lots belonged to them. The trial court found for the claimants and the Government appealed. This Court held that when the lots became a part of the shore. As they remained in that condition until reclaimed by the filling done by the Government, they belonged to the public domain. for public use .4' Hence, a part of the shore, and for that purpose a part of the bay, did not lose its character of being for public use after it was reclaimed.

Fourthly, Act 1360, as amended, authorized the lease or sale of the northern portion of the reclaimed area as a hotel sites. The subject property is not that northern portion authorized to be leased or sold; the subject property is the southern portion. Hence, applying the rule of expresio unius est exlusio alterius, the City of Manila was not authorized to sell the subject property. The application of this principle of statutory construction becomes the more imperative in the case at bar inasmuch as not only must the public grant of the reclaimed area to the City of Manila be, as above stated, strictly construed against the City of Manila, but also because a grant of power to a municipal corporation, as happens in this case where the city is author ized to lease or sell the northern portion of the Luneta extension, is strictly limited to such as are expressly or impliedly authorized or necessarily incidental to the objectives of the corporation.

Fifthly, Article 344 of the Civil Code of Spain provides that to property of public use, in provinces and in towns, comprises the provincial and town roads, the squares streets fountains, and public waters the promenades, and public works of general service paid for by such towns or provinces." A park or plaza, such as the extension to the Luneta, is undoubtedly comprised in said article.

The petitioners, however, argue that, according to said Article 344, in order that the character of property for public use may be so attached to a plaza, the latter must be actually constructed or at least laid out as such, and since the subject property was not yet constructed as a plaza or at least laid out as a plaza when it was sold by the City, it could not be property for public use. It should be noted, however, that properties of provinces and towns for public use are governed by the same principles as properties of the same character belonging to the public domain. 46 In order to be property of public domain an intention to devote it to public use is sufficient. 47 The, petitioners' contention is refuted by Manresa himself who said, in his comments", on Article 344, that: ñé+.£ªwph!1

Las plazas, calles y paseos publicos correspondent sin duda aiguna aldominio publico municipal ), porque se hallan establecidos sobre suelo municipal y estan destinadas al uso de todos Laurent presenta tratando de las plazas, una question relativa a si deben conceptuarse como de dominio publico los lugares vacios libres, que se encuenttan en los Municipios rurales ... Laurent opina contra Pioudhon que toda vez que estan al servicio de todos pesos lugares, deben considerable publicos y de dominion publico. Realmente, pala decidir el punto, bastara siempre fijarse en el destino real y efectivo de los citados lugares, y si este destino entraña un uso comun de todos, no hay duda que son de dominio publico municipal si no patrimoniales.

It is not necessary, therefore, that a plaza be already constructed of- laid out as a plaza in order that it be considered property for public use. It is sufficient that it be intended to be such In the case at bar, it has been shown that the intention of the lawmaking body in giving to the City of Manila the extension to the Luneta was not a grant to it of patrimonial property but a grant for public use as a plaza.

We have demonstrated ad satietatem that the Luneta extension as intended to be property of the City of Manila for public use. But, could not said property-later on be converted, as the petitioners contend, to patrimonial property? It could be. But this Court has already said, in Ignacio vs. The Director of Lands, 49 the executive and possibly the legislation department that has the authority and the power to make the declaration that said property, is no longer required for public use, and until such declaration i made the property must continue to form paint of the public domain. In the case at bar, there has been no such explicit or unequivocal

declaration It should be noted, furthermore, anent this matter, that courts are undoubted v not. primarily called upon, and are not in a position, to determine whether any public land is still needed for the purposes specified in Article 4 of the Law of Waters . 50

Having disposed of the petitioners' principal arguments relative to the main issue, we now pass to the items of circumstantial evidence which TDC claims may serve as aids in construing the legislative intent in the enactment of Act No. 1360, as amended. It is noteworthy that all these items of alleged circumstantial evidence are acts far removed in time from the date of the enactment of Act No.1360 such that they cannot be considered contemporaneous with its enactment. Moreover, it is not farfetched that this mass of circumstantial evidence might have been influenced by the antecedent series of invalid acts, to wit: the City's having obtained over the reclaimed area OCT No. 1909 on January 20,1911; the sale made by the City of the subject property to Manila Lodge No. 761; and the issuance to the latter of T.C.T. No. 2195. It cannot gainsaid that if the subsequent acts constituting the circumstantial evidence have been base on, or at least influenced, by those antecedent invalid acts and Torrens titles S they can hardly be indicative of the intent of the lawmaking body in enacting Act No. 1360 and its amendatory act.

TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the subject property is not a park.

Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed development" dated May 14, 1949, were prepared by the National Urban Planning Commission of the Office of the President. It cannot be reasonably expected that this plan for development of the Luneta should show that the subject property occupied by the ElksClub is a public park, for it was made 38 years after the sale to the Elks, and after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that the Office of the President was cognizant of the Torrens title of BPOE. That the subject property was not included as a part of the Luneta only indicated that the National Urban Planning Commission that made the plan knew that the subject property was occupied by Elks and that Elks had a Torrens title thereto. But this in no way proves that the subject property was originally intended to be patrimonial property of the City of Manila or that the sale to Elks or that the Torrens-title of the latter is valid.

Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared for Tarlac Development Company." It was made on November 11, 1963 by Felipe F. Cruz, private land surveyor. This surveyor is admittedly a surveyor for TDC. 51 This plan cannot be expected to show that the subject property is a part of the Luneta Park, for he plan was made to show the lot that "was to be sold to petitioner." This plan must have also assumed the existence of a valid title to the land in favor of Elks.

Exhibits "T" and "U" are copies of Presidential Proclamations No. 234 issued on November 15, 1955 and No. 273 issued on October 4, 1967, respectively. The purpose of the said Proclamations was to reserve certain parcels of land situated in the District of Ermita, City of Manila, for park site purposes. Assuming that the subject property is not within the boundaries of the reservation, this cannot be interpreted to mean that the subject property was not originally intended to be for public use or that it has ceased to be such. Conversely, had the subject property been included in the reservation, it would mean, if it really were private property, that the rights of the owners thereof would be extinguished, for the reservations was "subject to private rights, if any there be." That the subject property was not included in the reservation only indicates that the President knew of the existence of the Torrens titles mentioned above. The failure of the Proclamations to include the subject property in the reservation for park site could not change the character of the subject property as originally for public use and to form part of the Luneta Park. What has been said here applies to Exhibits "V", "V-1" to "V-3," and "W" which also refer to the area and location of the reservation for the Luneta Park.

Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, covering the lot where now stands the American Embassy [Chancery]. It states that the property is "bounded ... on the Northwest by properties of Army and Navy Club (Block No.321) and Elks Club (Block No. 321)." Inasmuch as the said bounderies delineated by the Philippine Legislature in Act No. 4269, the petitioners contend that the Legislature recognized and conceded the existence of the Elks Club property as a primate property (the property in question) and not as a public park or plaza. This argument is non sequitur plain and simple Said Original Certificate of Title cannot be considered as an incontrovertible declaration that the Elks Club was in truth and in fact the owner of such boundary lot. Such mention as boundary owner is not a means of acquiring title nor can it validate a title that is null and void.

TDC finally claims that the City of Manila is estopped from questioning the validity of the sale it executed on July 13,'1911 conconveying the subject property to the Manila Lodge No. 761, BPOE. This contention cannot be seriously defended in the light of the doctrine repeatedly enunciated by this Court that the Government is never estopped by mistakes or errors on the pan of its agents, and estoppel does not apply to a municipal

corporation to validate a contract that is prohibited by law or its against Republic policy, and the sale of July 13, 1911 executed by the City of Manila to Manila Lodge was certainly a contract prohibited by law. Moreover, estoppel cannot be urged even if the City of Manila accepted the benefits of such contract of sale and the Manila Lodge No. 761 had performed its part of the agreement, for to apply the doctrine of estoppel against the City of Manila in this case would be tantamount to enabling it to do indirectly what it could not do directly. 52

The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE, was void and inexistent for lack of subject matter. 53 It suffered from an incurable defect that could not be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired no right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen, cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for there was it, contemplation of law, no contract at all.

The inexistence of said sale can be set up against anyone who asserts a right arising from it, not only against the first vendee, the Manila Lodge No. 761, BPOE, but also against all its suceessors, including the TDC which are not protected the doctrine of bona fide ii purchaser without notice, being claimed by the TDC does not apply where there is a total absence of title in the vendor, and the good faith of the purchaser TDC cannot create title where none exists. 55

The so-called sale of the subject property having been executed, the restoration or restitution of what has been given is order 56

SECOND ISSUE

The second ground alleged in support of the instant petitions for review on certiorari is that the Court of Appeals has departed from the accepted and usual course of judicial proceedings as to call for an exercise of the power of supervision. TDC in L-41012, argues that the respondent Court did not make its own findings but simply recited those of the lower court and made a general affirmance, contrary to the requirements of the Constitution; that the respondent Court made glaring and patent mistakes in recounting even the copied findings, palpably showing lack of deliberate consideration of the matters involved, as, for example, when said court said that Act No. 1657 authorized the City of Manila to set aside a portion of the reclaimed land "formed by the Luneta Extension of- to lease or sell the same for park purposes;" and that respondent Court. further more, did not resolve or dispose of any of the assigned errors contrary to the mandate of the Judiciary Act.. 57

The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the reasons warranting review, that the Court of Appeals departed from the accepted and usual course of Judicial proceedings by simply making a general affirmance of the court a quo findings without bothering to resolve several vital points mentioned by the BPOE in its assigned errors. 58

COMMENTS ON SECOND ISSUE

We have shown in our discussion of the first issue that the decision of the trial court is fully in accordance with law. To follows that when such decision was affirmed by the Court of Appeals, the affirmance was likewise in accordance with law. Hence, no useful purpose will be served in further discussing the second issue.

CONCLUSION

ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012 are denied for lack of merit, and the decision of the Court of Appeals of June 30, 1975, is hereby affirmed, at petitioner's cost.

G.R. No. L40474 August 29, 1975

CEBU OXYGEN & ACETYLENE CO., INC., petitioner, vs.HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial District, and JOSE L. ESPELETA, Assistant Provincial Fiscal, Province of Cebu, representing the Solicitor General's Office and the Bureau of Lands, respondents.

Jose Antonio R Conde for petitioner.

Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Octavio R. Ramirez and Trial Attorney David R. Hilario for respondents. .

 

CONCEPCION, Jr., J.:

This is a petition for the review of the order of the Court of First Instance of Cebu dismissing petitioner's application for registration of title over a parcel of land situated in the City of Cebu.

The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, Cebu City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an abandoned road, the same not being included in the City Development Plan. 1 Subsequently, on December 19, 1968, the City Council of Cebu passed Resolution No. 2755, authorizing the Acting City Mayor to sell the land through a public bidding. 2 Pursuant thereto, the lot was awarded to the herein petitioner being the highest bidder and on March 3, 1969, the City of Cebu, through the Acting City Mayor, executed a deed of absolute sale to the herein petitioner for a total consideration of P10,800.00. 3 By virtue of the aforesaid deed of absolute sale, the petitioner filed an application with the Court of First instance of Cebu to have its title to the land registered. 4

On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground that the property sought to be registered being a public road intended for public use is considered part of the public domain and therefore outside the commerce of man. Consequently, it cannot be subject to registration by any private individual. 5

After hearing the parties, on October 11, 1974 the trial court issued an order dismissing the petitioner's application for registration of title. 6 Hence, the instant petition for review.

For the resolution of this case, the petitioner poses the following questions:

(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31, paragraph 34, give the City of Cebu the valid right to declare a road as abandoned? and

(2) Does the declaration of the road, as abandoned, make it the patrimonial property of the City of Cebu which may be the object of a common contract?

(1) The pertinent portions of the Revised Charter of Cebu City provides:

Section 31. Legislative Powers. Any provision of law and executive order to the contrary notwithstanding, the City Council shall have the following legislative powers:

xxx xxx xxx

(34) ...; to close any city road, street or alley, boulevard, avenue, park or square. Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.

From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city road or street. In the case of Favis vs. City of Baguio, 7 where the power of the city Council of Baguio City to close city streets and to vacate or withdraw the same from public use was similarly assailed, this court said:

5. So it is, that appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city street. The city council, it would seem to us, is the authority competent to determine whether or not a certain property is still necessary for public use.

Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance.

(2) Since that portion of the city street subject of petitioner's application for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract.

Article 422 of the Civil Code expressly provides that "Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State."

Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and unequivocal terms, states that: "Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed."

Accordingly, the withdrawal of the property in question from public use and its subsequent sale to the petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.

WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land Reg. Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is hereby ordered to proceed with the hearing of the petitioner's application for registration of title.

SO ORDERED.

HEIRS OF MARIO MALABANAN, G.R. No. 179987Petitioner,Present:PUNO, C.J.,QUISUMBING,YNARES-SANTIAGO,CARPIO,- versus - AUSTRIA-MARTINEZ,CORONA,CARPIO MORALES,TINGA,

CHICO-NAZARIO,VELASCO, JR.,

NACHURA,LEONARDO DE CASTRO,BRION,REPUBLIC OF THE PHILIPPINES, PERALTA, and

Respondent. BERSAMIN, JJ. Promulgated: April 29, 2009 x--------------------------------------------------------------------------- x  

D E C I S I O N 

TINGA, J.: 

One main reason why the informal sector has not become formal is that from Indonesia to Brazil, 90 percent of the informal lands are not titled and registered. This is a generalized phenomenon in the so-called Third World. And it has many consequences.  

xxx 

The question is: How is it that so many governments, from Suharto's in Indonesia to Fujimori's in Peru, have wanted to title these people and have not been able to do so effectively? One reason is that none of the state systems in  Asia or Latin America can gather proof of informal titles. In Peru, the informals have means of proving property ownership to each other which are not the same means developed by the Spanish legal system. The informals have their own papers, their own forms of agreements, and their own systems of registration, all of which are very clearly stated in the maps which they use for their own informal business transactions.

If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field--in each field a different dog is going to bark at you. Even dogs know what private property is all about. The only one who does not know it is the government. The issue is that there exists a "common law" and an "informal law" which the Latin American formal legal system does not know how to recognize.

- Hernando De Soto[1]

 

This decision inevitably affects all untitled lands currently in possession of persons and entities other than the Philippine government. The petition, while unremarkable as to the facts, was accepted by the Court en banc in order to provide definitive clarity to the applicability and scope of original registration proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court confronts not only the relevant provisions of the Public Land Act and the Civil Code, but also the reality on the ground. The countrywide phenomenon of untitled lands, as well as the problem of informal settlement it has spawned, has unfortunately been treated with benign neglect. Yet our current laws are hemmed in by their own circumscriptions in addressing the phenomenon. Still, the duty on our part is primarily to decide cases

before us in accord with the Constitution and the legal principles that have developed our public land law, though our social obligations dissuade us from casting a blind eye on the endemic problems. 

I. On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of land identified as Lot 9864-A, Cad-452-D, Silang Cadastre,[2] situated in Barangay Tibig, Silang Cavite, and consisting of 71,324 square meters. Malabanan claimed that he had purchased the property from Eduardo Velazco,[3] and that he and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for more than thirty (30) years. The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, Branch 18. The Office of the Solicitor General (OSG) duly designated the Assistant Provincial Prosecutor of Cavite, Jose Velazco, Jr., to appear on behalf of the State.[4] Apart from presenting documentary evidence, Malabanan himself and his witness, Aristedes Velazco, testified at the hearing. Velazco testified that the property was originally belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being Aristedess grandfather. Upon Linos death, his four sons inherited the property and divided it among themselves. But by 1966, Estebans wife,  Magdalena, had become the administrator of all the properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to Malabanan.[5]

 Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine Aristedes Velazco. He

further manifested that he also [knew] the property and I affirm the truth of the testimony given by Mr. Velazco.[6] The Republic of the Philippines likewise did not present any evidence to controvert the application.

 Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001,

issued by the Community Environment & Natural Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated that the subject property was verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.[7]

 On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the dispositive portion

of which reads: 

WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.

 Once this Decision becomes final and executory, the corresponding decree

of registration shall forthwith issue. SO ORDERED. 

 The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to

prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC had erred in finding that he had been in possession of the property in the manner and for the length of time required by law for confirmation of imperfect title.

 On 23 February 2007, the Court of Appeals rendered a Decision [8] reversing the RTC and

dismissing the application of Malabanan. The appellate court held that under Section 14(1) of the Property Registration Decree any period of possession prior to the classification of the lots as alienable and disposable was inconsequential and should be excluded from the computation of the period of possession. Thus, the appellate court noted that since the CENRO-DENR certification had verified that the property was declared alienable and disposable only on 15 March 1982, the Velazcos possession prior to that date could not be factored in the computation of the period of possession. This interpretation of the Court of Appeals of Section 14(1) of the Property Registration Decree was based on the Courts ruling in Republic v. Herbieto.[9]

 Malabanan died while the case was pending with the Court of Appeals;[10] hence, it was his heirs

who appealed the decision of the appellate court. Petitioners, before this Court, rely on our ruling in Republic

v. Naguit,[11] which was handed down just four months prior to Herbieto. Petitioners suggest that the discussion in Herbieto cited by the Court of Appeals is actually obiter dictum since the Metropolitan Trial Court therein which had directed the registration of the property had no jurisdiction in the first place since the requisite notice of hearing was published only after the hearing had already begun. Naguit, petitioners argue, remains the controlling doctrine, especially when the property in question is agricultural land. Therefore, with respect to agricultural lands, any possession prior to the declaration of the alienable property as disposable may be counted in reckoning the period of possession to perfect title under the Public Land Act and the Property Registration Decree.

   The petition was referred to the Court en banc,[12] and on 11 November 2008, the case was heard

on oral arguments. The Court formulated the principal issues for the oral arguments, to wit: 

1. In order that an alienable and disposable land of the public domain may be registered under Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it sufficient that such classification occur at any time prior to the filing of the applicant for registration provided that it is established that the applicant has been in open, continuous, exclusive and notorious possession of the land under a bona fide claim of ownership since June 12, 1945 or earlier?

 2. For purposes of Section 14(2) of the Property Registration Decree may a

parcel of land classified as alienable and disposable be deemed private land and therefore susceptible to acquisition by prescription in accordance with the Civil Code?

 3. May a parcel of land established as agricultural in character either

because of its use or because its slope is below that of forest lands be registrable under Section 14(2) of the Property Registration Decree in relation to the provisions of the Civil Code on acquisitive prescription?

 4. Are petitioners entitled to the registration of the subject land in their

names under Section 14(1) or Section 14(2) of the Property Registration Decree or both?[13]

 Based on these issues, the parties formulated their respective positions. With respect to Section 14(1), petitioners reiterate that the analysis of the Court in Naguit is the

correct interpretation of the provision. The seemingly contradictory pronouncement in Herbieto, it is submitted, should be considered obiter dictum, since the land registration proceedings therein was void ab initio due to lack of publication of the notice of initial hearing. Petitioners further point out that in Republic v. Bibonia,[14] promulgated in June of 2007, the Court applied Naguit and adopted the same observation that the preferred interpretation by the OSG of Section 14(1) was patently absurd. For its part, the OSG remains insistent that for Section 14(1) to apply, the land should have been classified as alienable and disposable as of 12 June 1945. Apart from Herbieto, the OSG also cites the subsequent rulings in Buenaventura v. Republic,[15] Fieldman Agricultural Trading v. Republic[16] and Republic v. Imperial Credit Corporation,[17] as well as the earlier case of Director of Lands v. Court of Appeals.[18]

 With respect to Section 14(2), petitioners submit that open, continuous, exclusive and notorious

possession of an alienable land of the public domain for more than 30 years ipso jure converts the land into private property, thus placing it under the coverage of Section 14(2). According to them, it would not matter whether the land sought to be registered was previously classified as agricultural land of the public domain so long as, at the time of the application, the property had already been converted into private property through prescription. To bolster their argument, petitioners cite extensively from our 2008 ruling in Republic v. T.A.N. Properties.[19]

  The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The OSG

notes that under Article 1113 of the Civil Code, the acquisitive prescription of properties of the State refers to patrimonial property, while Section 14(2) speaks of private lands. It observes that the Court has yet to decide a case that presented Section 14(2) as a ground for application for registration, and that the 30-year possession period refers to the period of possession under Section 48(b) of the Public Land Act, and not the concept of prescription under the Civil Code. The OSG further submits that, assuming that the 30-year prescriptive period can run against public lands, said period should be reckoned from the time the public land was declared alienable and disposable.

 

Both sides likewise offer special arguments with respect to the particular factual circumstances surrounding the subject property and the ownership thereof. 

II. First, we discuss Section 14(1) of the Property Registration Decree. For a full understanding of the provision, reference has to be made to the Public Land Act. 

A. 

Commonwealth Act No. 141, also known as the Public Land Act, has, since its enactment, governed the classification and disposition of lands of the public domain. The President is authorized, from time to time, to classify the lands of the public domain into alienable and disposable, timber, or mineral lands.[20] Alienable and disposable lands of the public domain are further classified according to their uses into (a) agricultural; (b) residential, commercial, industrial, or for similar productive purposes; (c) educational, charitable, or other similar purposes; or (d) reservations for town sites and for public and quasi-public uses.[21]

 May a private person validly seek the registration in his/her name of alienable and disposable

lands of the public domain? Section 11 of the Public Land Act acknowledges that public lands suitable for agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles through judicial legalization.[22] Section 48(b) of the Public Land Act, as amended by P.D. No. 1073, supplies the details and unmistakably grants that right, subject to the requisites stated therein: 

Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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

 (b) Those who by themselves or through their predecessors in interest

have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.

  Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law was amended by P.D. No. 1073. Two significant amendments were introduced by P.D. No. 1073. First, the term agricultural lands was changed to alienable and disposable lands of the public domain. The OSG submits that this amendment restricted the scope of the lands that may be registered.[23] This is not actually the case. Under Section 9 of the Public Land Act, agricultural lands are a mere subset of lands of the public domain alienable or open to disposition. Evidently, alienable and disposable lands of the public domain are a larger class than only agricultural lands. Second, the length of the requisite possession was changed from possession for thirty (30) years immediately preceding the filing of the application to possession since June 12, 1945 or earlier. The Court in Naguit explained: 

When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to vest the right to register their title to agricultural lands of the public domain commenced from July 26, 1894. However, this period was amended by R.A. No. 1942, which provided that the bona fide claim of ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. xxx

  It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same as Section 14(1) of the Property Registration Decree. Said Decree codified the various laws relative to the registration of property, including lands of the public domain. It is Section 14(1) that operationalizes the registration of such lands of the public domain. The provision reads:

 

 SECTION 14. Who may apply. The following persons may file in the proper

Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

 (1)      those who by themselves or through their predecessors-

in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

  

Notwithstanding the passage of the Property Registration Decree and the inclusion of Section 14(1) therein, the Public Land Act has remained in effect. Both laws commonly refer to persons or their predecessors-in-interest who have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. That circumstance may have led to the impression that one or the other is a redundancy, or that Section 48(b) of the Public Land Act has somehow been repealed or mooted. That is not the case.

 The opening clauses of Section 48 of the Public Land Act and Section 14 of the Property

Registration Decree warrant comparison: 

Sec. 48 [of the Public Land Act]. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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 

Sec. 14 [of the Property Registration Decree]. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

 xxx

 It is clear that Section 48 of the Public Land Act is more descriptive of the nature of the right

enjoyed by the possessor than Section 14 of the Property Registration Decree, which seems to presume the pre-existence of the right, rather than establishing the right itself for the first time. It is proper to assert that it is the Public Land Act, as amended by P.D. No. 1073 effective 25 January 1977, that has primarily established the right of a Filipino citizen who has been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945 to perfect or complete his title by applying with the proper court for the confirmation of his ownership claim and the issuance of the corresponding certificate of title.

  Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the Public Land Act,

which provides that public lands suitable for agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles, and given the notion that both provisions declare that it is indeed the Public Land Act that primarily establishes the substantive ownership of the possessor who has been in possession of the property since 12 June 1945. In turn, Section 14(a) of the Property Registration Decree recognizes the substantive right granted under Section 48(b) of the Public Land Act, as well provides the corresponding original registration procedure for the judicial confirmation of an imperfect or incomplete title. There is another limitation to the right granted under Section 48(b). Section 47 of the Public Land Act limits the period within which one may exercise the right to seek registration under Section 48. The provision has been amended several times, most recently by Rep. Act No. 9176 in 2002. It currently reads thus: 

Section 47. The persons specified in the next following section are hereby granted time, not to extend beyond December 31, 2020 within which to avail of the benefits of this Chapter: Provided, That this period shall apply only where the area applied for does not exceed twelve (12) hectares: Provided, further, That the several periods of time designated by the President in accordance with Section Forty-Five of this Act shall apply also to the lands comprised in the provisions of this Chapter, but this

Section shall not be construed as prohibiting any said persons from acting under this Chapter at any time prior to the period fixed by the President.[24]

 Accordingly under the current state of the law, the substantive right granted under Section 48(b) may be availed of only until 31 December 2020. 

B. Despite the clear text of Section 48(b) of the Public Land Act, as amended and Section 14(a) of the

Property Registration Decree, the OSG has adopted the position that for one to acquire the right to seek registration of an alienable and disposable land of the public domain, it is not enough that the applicant and his/her predecessors-in-interest be in possession under a bona fide claim of ownership since 12 June 1945; the alienable and disposable character of the property must have been declared also as of 12 June 1945. Following the OSGs approach, all lands certified as alienable and disposable after 12 June 1945 cannot be registered either under Section 14(1) of the Property Registration Decree or Section 48(b) of the Public Land Act as amended. The absurdity of such an implication was discussed in Naguit.

 Petitioner suggests an interpretation that the alienable and disposable

character of the land should have already been established since June 12, 1945 or earlier. This is not borne out by the plain meaning of Section 14(1). Since June 12, 1945, as used in the provision, qualifies its antecedent phrase under a bonafide claim of ownership. Generally speaking, qualifying words restrict or modify only the words or phrases to which they are immediately associated, and not those distantly or remotely located.[25] Ad proximum antecedents fiat relation nisi impediatur sentencia. Besides, we are mindful of the absurdity that would result if we adopt petitioners position. Absent a legislative amendment, the rule would be, adopting the OSGs view, that all lands of the public domain which were not declared alienable or disposable before June 12, 1945 would not be susceptible to original registration, no matter the length of unchallenged possession by the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect even as it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not yet even considered an independent state. Accordingly, the Court in Naguit explained: 

[T]he more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property.  The Court declares that the correct interpretation of Section 14(1) is that which was adopted

in Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the application of the provision to the point of virtual inutility since it would only cover lands actually declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to establish open, continuous, exclusive and notorious possession under a bona fide claim of ownership long before that date.

 Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership

to avail of judicial confirmation of their imperfect titles than what would be feasible under  Herbieto. This balancing fact is significant, especially considering our forthcoming discussion on the scope and reach of Section 14(2) of the Property Registration Decree.

 Petitioners make the salient observation that the contradictory passages from Herbieto are obiter

dicta since the land registration proceedings therein is void ab initio in the first place due to lack of the requisite publication of the notice of initial hearing. There is no need to explicitly overturn  Herbieto, as it suffices that the Courts acknowledgment that the particular line of argument used therein concerning Section 14(1) is indeed obiter.

It may be noted that in the subsequent case of Buenaventura,[26] the Court, citing Herbieto, again stated that [a]ny period of possession prior to the date when the [s]ubject [property was] classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession That statement, in the context of Section 14(1), is certainly erroneous. Nonetheless, the passage as cited in Buenaventura should again be considered as obiter. The application therein was ultimately granted, citing Section 14(2). The evidence submitted by petitioners therein did not establish any mode of possession on their part prior to 1948, thereby precluding the application of Section 14(1). It is not even apparent from the decision whether petitioners therein had claimed entitlement to original registration following Section 14(1), their position being that they had been in exclusive possession under a bona fide claim of ownership for over fifty (50) years, but not before 12 June 1945.

Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in Section 14(1), since it precisely involved situation wherein the applicant had been in exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Courts interpretation of Section 14(1) therein was decisive to the resolution of the case. Any doubt as to which between Naguit or Herbieto provides the final word of the Court on Section 14(1) is now settled in favor of Naguit. We noted in Naguit that it should be distinguished from Bracewell v. Court of Appeals[27] since in the latter, the application for registration had been filed before the land was declared alienable or disposable. The dissent though pronounces Bracewell as the better rule between the two. Yet two years after Bracewell, its ponente, the esteemed Justice Consuelo Ynares-Santiago, penned the ruling in Republic v. Ceniza,[28] which involved a claim of possession that extended back to 1927 over a public domain land that was declared alienable and disposable only in 1980. Ceniza cited Bracewell, quoted extensively from it, and following the mindset of the dissent, the attempt at registration in Cenizashould have failed. Not so. 

To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute.

 In this case, private respondents presented a certification dated November

25, 1994, issued by Eduardo M. Inting, the Community Environment and Natural Resources Officer in the Department of Environment and Natural Resources Office in Cebu City, stating that the lots involved were "found to be within the alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map 2962 4-I555 dated December 9, 1980." This is sufficient evidence to show the real character of the land subject of private respondents application. Further, the certification enjoys a presumption of regularity in the absence of contradictory evidence, which is true in this case. Worth noting also was the observation of the Court of Appeals stating that:

 [n]o opposition was filed by the Bureaus of Lands

and Forestry to contest the application of appellees on the ground that the property still forms part of the public domain. Nor is there any showing that the lots in question are forestal land.... Thus, while the Court of Appeals erred in ruling that mere possession of

public land for the period required by law would entitle its occupant to a confirmation of imperfect title, it did not err in ruling in favor of private respondents as far as the first requirement in Section 48(b) of the Public Land Act is concerned, for they were able to overcome the burden of proving the alienability of the land subject of their application.

 As correctly found by the Court of Appeals, private respondents were able

to prove their open, continuous, exclusive and notorious possession of the subject land even before the year 1927. As a rule, we are bound by the factual findings of the Court of Appeals. Although there are exceptions, petitioner did not show that this is one of them.[29]

 Why did the Court in Ceniza, through the same eminent member who authored Bracewell, sanction the registration under Section 48(b) of public domain lands declared alienable or disposable thirty-five (35) years and 180 days after 12 June 1945? The telling difference is that in Ceniza, the application for registration was filed nearly six (6) years after the land had been declared alienable or disposable, while in Bracewell, the application was filed nine (9) years before the land was declared alienable or disposable. That crucial difference was also stressed in Naguit to contradistinguish it from Bracewell, a difference which the dissent seeks to belittle.

 III.

 We next ascertain the correct framework of analysis with respect to Section 14(2). The provision reads: 

  SECTION 14. Who may apply. The following persons may file in the proper

Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

 xxx

 (2)      Those who have acquired ownership over private lands

by prescription under the provisions of existing laws.  

The Court in Naguit offered the following discussion concerning Section 14(2), which we did even then recognize, and still do, to be an obiter dictum, but we nonetheless refer to it as material for further discussion, thus:

 Did the enactment of the Property Registration Decree and the amendatory

P.D. No. 1073 preclude the application for registration of alienable lands of the public domain, possession over which commenced only after June 12, 1945? It did not, considering Section 14(2) of the Property Registration Decree, which governs and authorizes the application of those who have acquired ownership of private lands by prescription under the provisions of existing laws.

 Prescription is one of the modes of acquiring ownership under the Civil

Code.[[30]] There is a consistent jurisprudential rule that properties classified as alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years.[ [31]] With such conversion, such property may now fall within the contemplation of private lands under Section 14(2), and thus susceptible to registration by those who have acquired ownership through prescription. Thus, even if possession of the alienable public land commenced on a date later than June 12, 1945, and such possession being been open, continuous and exclusive, then the possessor may have the right to register the land by virtue of Section 14(2) of the Property Registration Decree.

 Naguit did not involve the application of Section 14(2), unlike in this case where petitioners have based their registration bid primarily on that provision, and where the evidence definitively establishes their claim of possession only as far back as 1948. It is in this case that we can properly appreciate the nuances of the provision. 

A. The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis for application for original registration under Section 14(2). Specifically, it is Article 1113 which provides legal foundation for the application. It reads: 

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.

  It is clear under the Civil Code that where lands of the public domain are patrimonial in character, they are susceptible to acquisitive prescription. On the other hand, among the public domain lands that are not susceptible to acquisitive prescription are timber lands and mineral lands. The Constitution itself proscribes private ownership of timber or mineral lands.

 There are in fact several provisions in the Civil Code concerning the acquisition of real property

through prescription. Ownership of real property may be acquired by ordinary prescription of ten (10) years,[32] or through extraordinary prescription of thirty (30) years.[33] Ordinary acquisitive prescription requires possession in good faith,[34]as well as just title.[35]

 When Section 14(2) of the Property Registration Decree explicitly provides that persons who have

acquired ownership over private lands by prescription under the provisions of existing laws, it unmistakably

refers to the Civil Code as a valid basis for the registration of lands. The Civil Code is the only existing law that specifically allows the acquisition by prescription of private lands, including patrimonial property belonging to the State. Thus, the critical question that needs affirmation is whether Section 14(2) does encompass original registration proceedings over patrimonial property of the State, which a private person has acquired through prescription.

 The Naguit obiter had adverted to a frequently reiterated jurisprudence holding that properties

classified as alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years.[36] Yet if we ascertain the source of the thirty-year period, additional complexities relating to Section 14(2) and to how exactly it operates would emerge. For there are in fact two distinct origins of the thirty (30)-year rule.

 The first source is Rep. Act No. 1942, enacted in 1957, which amended Section 48(b) of the Public

Land Act by granting the right to seek original registration of alienable public lands through possession in the concept of an owner for at least thirty years.

 The following-described citizens of the Philippines, occupying lands of the

public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:

 x x x           x x x           x x x

 (b) Those who by themselves or through their predecessors in interest

have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, 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. (emphasis supplied)[37]

  This provision was repealed in 1977 with the enactment of P.D. 1073, which made the date 12

June 1945 the reckoning point for the first time. Nonetheless, applications for registration filed prior to 1977 could have invoked the 30-year rule introduced by Rep. Act No. 1942.

 The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as it applies the rules

on prescription under the Civil Code, particularly Article 1113 in relation to Article 1137. Note that there are two kinds of prescription under the Civil Codeordinary acquisitive prescription and extraordinary acquisitive prescription, which, under Article 1137, is completed through uninterrupted adverse possession for thirty years, without need of title or of good faith.

 Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942, became

unavailable after 1977. At present, the only legal basis for the thirty (30)-year period is the law on prescription under the Civil Code, as mandated under Section 14(2). However, there is a material difference between how the thirty (30)-year rule operated under Rep. Act No. 1942 and how it did under the Civil Code.

 Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not refer to or call into

application the Civil Code provisions on prescription. It merely set forth a requisite thirty-year possession period immediately preceding the application for confirmation of title, without any qualification as to whether the property should be declared alienable at the beginning of, and continue as such, throughout the entire thirty-(30) years. There is neither statutory nor jurisprudential basis to assert Rep. Act No. 1942 had mandated such a requirement,[38] similar to our earlier finding with respect to the present language of Section 48(b), which now sets 12 June 1945 as the point of reference.

 Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as basis for original

registration became Section 14(2) of the Property Registration Decree, which entitled those who have acquired ownership over private lands by prescription under the provisions of existing laws to apply for original registration. Again, the thirty-year period is derived from the rule on extraordinary prescription under Article 1137 of the Civil Code. At the same time, Section 14(2) puts into operation the entire regime of prescription under the Civil Code, a fact which does not hold true with respect to Section 14(1). 

B. 

Unlike Section 14(1), Section 14(2) explicitly refers to the principles on prescription under existing laws. Accordingly, we are impelled to apply the civil law concept of prescription, as set forth in the Civil Code, in our interpretation of Section 14(2). There is no similar demand on our part in the case of Section 14(1).

 The critical qualification under Article 1113 of the Civil Code is thus: [p]roperty of the State or any of

its subdivisions not patrimonial in character shall not be the object of prescription. The identification what consists of patrimonial property is provided by Articles 420 and 421, which we quote in full:

 Art. 420. The following things are property of public dominion:

 (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

 Art. 421. All other property of the State, which is not of the character stated in

the preceding article, is patrimonial property It is clear that property of public dominion, which generally includes property belonging to the State, cannot be the object of prescription or, indeed, be subject of the commerce of man.[39] Lands of the public domain, whether declared alienable and disposable or not, are property of public dominion and thus insusceptible to acquisition by prescription. Let us now explore the effects under the Civil Code of a declaration by the President or any duly authorized government officer of alienability and disposability of lands of the public domain. Would such lands so declared alienable and disposable be converted, under the Civil Code, from property of the public dominion into patrimonial property? After all, by connotative definition, alienable and disposable lands may be the object of the commerce of man; Article 1113 provides that all things within the commerce of man are susceptible to prescription; and the same provision further provides that patrimonial property of the State may be acquired by prescription. 

Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.  It is this provision that controls how public dominion property may be converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth are public dominion property. For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public dominion if when it is intended for some public service or for the development of the national wealth.

 Accordingly, there must be an express declaration by the State that the public dominion

property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

 It is comprehensible with ease that this reading of Section 14(2) of the Property Registration

Decree limits its scope and reach and thus affects the registrability even of lands already declared alienable and disposable to the detriment of the bona fide possessors or occupants claiming title to the lands. Yet this interpretation is in accord with the Regalian doctrine and its concomitant assumption that all lands owned by the State, although declared alienable or disposable, remain as such and ought to be used only by the Government.

 Recourse does not lie with this Court in the matter. The duty of the Court is to apply the

Constitution and the laws in accordance with their language and intent. The remedy is to change the law, which is the province of the legislative branch. Congress can very well be entreated to amend Section 14(2) of the Property Registration Decree and pertinent provisions of the Civil Code to liberalize the requirements for judicial confirmation of imperfect or incomplete titles.

 The operation of the foregoing interpretation can be illustrated by an actual example. Republic Act

No. 7227, entitled An Act Accelerating The Conversion Of Military Reservations Into Other Productive Uses,

etc., is more commonly known as the BCDA law. Section 2 of the law authorizes the sale of certain military reservations and portions of military camps in Metro Manila, including Fort Bonifacio and Villamor Air Base. For purposes of effecting the sale of the military camps, the law mandates the President to transfer such military lands to the Bases Conversion Development Authority (BCDA) [40] which in turn is authorized to own, hold and/or administer them.[41] The President is authorized to sell portions of the military camps, in whole or in part.[42] Accordingly, the BCDA law itself declares that the military lands subject thereof are alienable and disposable pursuant to the provisions of existing laws and regulations governing sales of government properties.[43]

 From the moment the BCDA law was enacted the subject military lands have become alienable

and disposable. However, said lands did not become patrimonial, as the BCDA law itself expressly makes the reservation that these lands are to be sold in order to raise funds for the conversion of the former American bases at Clark and Subic.[44]Such purpose can be tied to either public service or the development of national wealth under Article 420(2). Thus, at that time, the lands remained property of the public dominion under Article 420(2), notwithstanding their status as alienable and disposable. It is upon their sale as authorized under the BCDA law to a private person or entity that such lands become private property and cease to be property of the public dominion.

 C.

 Should public domain lands become patrimonial because they are declared as such in a duly

enacted law or duly promulgated proclamation that they are no longer intended for public service or for the development of the national wealth, would the period of possession prior to the conversion of such public dominion into patrimonial be reckoned in counting the prescriptive period in favor of the possessors? We rule in the negative. The limitation imposed by Article 1113 dissuades us from ruling that the period of possession before the public domain land becomes patrimonial may be counted for the purpose of completing the prescriptive period. Possession of public dominion property before it becomes patrimonial cannot be the object of prescription according to the Civil Code. As the application for registration under Section 14(2) falls wholly within the framework of prescription under the Civil Code, there is no way that possession during the time that the land was still classified as public dominion property can be counted to meet the requisites of acquisitive prescription and justify registration. 

Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2)? There is no inconsistency. Section 14(1) mandates registration on the basis ofpossession, while Section 14(2) entitles registration on the basis of prescription .  Registration under Section 14(1) is extended under the aegis of the Property Registration Decree and the Public Land Act while registration under Section 14(2) is made available both by the Property Registration Decree and the Civil Code. In the same manner, we can distinguish between the thirty-year period under Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1472, and the thirty-year period available through Section 14(2) of the Property Registration Decree in relation to Article 1137 of the Civil Code. The period under the former speaks of a thirty-year period of possession ,   while the period under the latter concerns a thirty-year period of extraordinary prescription. Registration under Section 48(b) of the Public Land Act as amended by Rep. Act No. 1472 is based on thirty years of possession alone without regard to the Civil Code, while the registration under Section 14(2) of the Property Registration Decree is founded on extraordinary prescription under the Civil Code. It may be asked why the principles of prescription under the Civil Code should not apply as well to Section 14(1). Notwithstanding the vaunted status of the Civil Code, it ultimately is just one of numerous statutes, neither superior nor inferior to other statutes such as the Property Registration Decree. The legislative branch is not bound to adhere to the framework set forth by the Civil Code when it enacts subsequent legislation. Section 14(2) manifests a clear intent to interrelate the registration allowed under that provision with the Civil Code, but no such intent exists with respect to Section 14(1). 

IV. One of the keys to understanding the framework we set forth today is seeing how our land registration procedures correlate with our law on prescription, which, under the Civil Code, is one of the modes for acquiring ownership over property. The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons through prescription. This is brought about by Article 1113, which states that [a]ll things which are within the commerce of man are susceptible to prescription, and that [p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. 

There are two modes of prescription through which immovables may be acquired under the Civil Code. The first is ordinary acquisitive prescription, which, under Article 1117, requires possession in good faith and with just title; and, under Article 1134, is completed through possession of ten (10) years. There is nothing in the Civil Code that bars a person from acquiring patrimonial property of the State through ordinary acquisitive prescription, nor is there any apparent reason to impose such a rule. At the same time, there are indispensable requisitesgood faith and just title. The ascertainment of good faith involves the application of Articles 526, 527, and 528, as well as Article 1127 of the Civil Code, [45] provisions that more or less speak for themselves. 

On the other hand, the concept of just title requires some clarification.  Under Article 1129, there is just title for the purposes of prescription when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right. Dr. Tolentino explains: 

Just title is an act which has for its purpose the transmission of ownership, and which would have actually transferred ownership if the grantor had been the owner. This vice or defect is the one cured by prescription. Examples: sale with delivery, exchange, donation, succession, and dacion in payment.[46]

The OSG submits that the requirement of just title necessarily precludes the applicability of ordinary acquisitive prescription to patrimonial property. The major premise for the argument is that the State, as the owner and grantor, could not transmit ownership to the possessor before the completion of the required period of possession.[47] It is evident that the OSG erred when it assumed that the grantor referred to in Article 1129 is the State. The grantor is the one from whom the person invoking ordinary acquisitive prescription derived the title, whether by sale, exchange, donation, succession or any other mode of the acquisition of ownership or other real rights. 

Earlier, we made it clear that, whether under ordinary prescription or extraordinary prescription, the period of possession preceding the classification of public dominion lands as patrimonial cannot be counted for the purpose of computing prescription. But after the property has been become patrimonial, the period of prescription begins to run in favor of the possessor. Once the requisite period has been completed, two legal events ensue: (1) the patrimonial property is ipso jure converted into private land; and (2) the person in possession for the periods prescribed under the Civil Code acquires ownership of the property by operation of the Civil Code.

 It is evident that once the possessor automatically becomes the owner of the converted patrimonial

property, the ideal next step is the registration of the property under theTorrens system. It should be remembered that registration of property is not a mode of acquisition of ownership, but merely a mode of confirmation of ownership.[48]

 Looking back at the registration regime prior to the adoption of the Property Registration Decree in

1977, it is apparent that the registration system then did not fully accommodate the acquisition of ownership of patrimonial property under the Civil Code. What the system accommodated was the confirmation of imperfect title brought about by the completion of a period of possession ordained under the Public Land Act (either 30 years following Rep. Act No. 1942, or since 12 June 1945 following P.D. No. 1073).

 The Land Registration Act[49] was noticeably silent on the requisites for alienable public lands

acquired through ordinary prescription under the Civil Code, though it arguably did not preclude such registration.[50] Still, the gap was lamentable, considering that the Civil Code, by itself, establishes ownership over the patrimonial property of persons who have completed the prescriptive periods ordained therein. The gap was finally closed with the adoption of the Property Registration Decree in 1977, with Section 14(2) thereof expressly authorizing original registration in favor of persons who have acquired ownership over private lands by prescription under the provisions of existing laws, that is, the Civil Code as of now. 

V. We synthesize the doctrines laid down in this case, as follows: (1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act recognizes and confirms that those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945 have acquired ownership of, and registrable title to, such lands based on the length and quality of their possession. 

(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and disposable during the entire period of possession, the possessor is entitled to secure judicial confirmation of his title thereto as soon as it

is declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.[51]

 (b) The right to register granted under Section 48(b) of the Public Land Act is further

confirmed by Section 14(1) of the Property Registration Decree. (2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public domain lands become only patrimonial property not only with a declaration that these are alienable or disposable. There must also be an express government manifestation that the property is already patrimonial or no longer retained for public service or the development of national wealth, under Article 422 of the Civil Code. And only when the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run. 

(a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial property by prescription under the Civil Code is entitled to secure registration thereof under Section 14(2) of the Property Registration Decree. 

(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and other extraordinary. Under ordinary acquisitive prescription, a person acquires ownership of a patrimonial property through possession for at least ten (10) years, in good faith and with just title. Under extraordinary acquisitive prescription, a persons uninterrupted adverse possession of patrimonial property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership.

 B.

 We now apply the above-stated doctrines to the case at bar. It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession, according to their own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus, they cannot avail themselves of registration under Section 14(1) of the Property Registration Decree.  Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended for public use service or for the development of the national evidence, conformably with Article 422 of the Civil Code. The classification of the subject property as alienable and disposable land of the public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code.Thus, it is insusceptible to acquisition by prescription. 

VI. 

A final word. The Court is comfortable with the correctness of the legal doctrines established in this decision. Nonetheless, discomfiture over the implications of todays ruling cannot be discounted. For, every untitled property that is occupied in the country will be affected by this ruling. The social implications cannot be dismissed lightly, and the Court would be abdicating its social responsibility to the Filipino people if we simply levied the law without comment. The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to long-standing habit and cultural acquiescence, and is common among the so-called Third World countries. This paradigm powerfully evokes the disconnect between a legal system and the reality on the ground. The law so far has been unable to bridge that gap. Alternative means of acquisition of these public domain lands, such as through homestead or free patent, haveproven unattractive due to limitations imposed on the grantee in the encumbrance or alienation of said properties.[52] Judicial confirmation of imperfect title has emerged as the most viable, if not the most attractive means to regularize the informal settlement of alienable or disposable lands of the public domain, yet even that system, as revealed in this decision, has considerable limits. There are millions upon millions of Filipinos who have individually or exclusively held residential lands on which they have lived and raised their families. Many more have tilled and made productive idle lands of the State with their hands. They have been regarded for generation by their families and their communities as common law owners. There is much to be said about the virtues of according them legitimate states. Yet such virtues are not for the Court to translate into positive law, as the law itself considered such lands as property of

the public dominion. It could only be up to Congress to set forth a new phase of land reform to sensibly regularize and formalize the settlement of such lands which in legal theory are lands of the public domain before the problem becomes insoluble. This could be accomplished, to cite two examples, by liberalizing the standards for judicial confirmation of imperfect title, or amending the Civil Code itself to ease the requisites for the conversion of public dominion property into patrimonial. 

Ones sense of security over land rights infuses into every aspect of well-being not only of that individual, but also to the persons family. Once that sense of security is deprived, life and livelihood are put on stasis. It is for the political branches to bring welcome closure to the long pestering problem. WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February 2007 and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs. SO ORDERED.