LAW ON NATURAL RESOURCES

Article 1. The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.Article 2, Section 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.

Article 12, Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.Article 12, Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.Article 12, Section 5. The State, subject to the provisions of this Constitution and national development policies and programs, shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being.The Congress may provide for the applicability of customary laws governing property rights or relations in determining the ownership and extent of ancestral domain.Article 12, Section 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.Article 12, Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.Article 12, Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.

Cruz vs Secretary of Environment and Natural Resources, et al. (G.R. No. 135385, Dec. 6, 2000

R E S O L U T I O N

PER CURIAM:

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules).

In its resolution of September 29, 1998, the Court required respondents to comment. [1] In compliance, respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.

On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed through the Solicitor General a consolidated Comment.  The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays that the petition be granted in part.

On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene.  They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal of the petition.

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or to Appear as Amicus Curiae.  The CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples.  For this reason it prays that the petition be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene with attached Comment-in-Intervention.  They agree with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for prohibition and mandamus be dismissed.

The motions for intervention of the aforesaid groups and organizations were granted.

Oral arguments were heard on April 13, 1999.  Thereafter, the parties and intervenors filed their respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and during the hearing.

Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:

“(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in turn, defines ancestral lands;

“(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable public lands, bodies of water, mineral and other resources found within ancestral domains are private but community property of the indigenous peoples;

“(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and ancestral lands;

“(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral lands;

“(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction, development or exploration of minerals and other natural resources within the areas claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous peoples for the

development and utilization of natural resources therein for a period not exceeding 25 years, renewable for not more than 25 years; and

“(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect and conserve the ancestral domains and portions thereof which are found to be necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or reforestation.”[2]

Petitioners also content that, by providing for an all-encompassing definition of “ancestral domains” and “ancestral lands” which might even include private lands found within said areas, Sections 3(a) and 3(b) violate the rights of private landowners.[3]

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the NCIP and making customary law applicable to the settlement of disputes involving ancestral domains and ancestral lands on the ground that these provisions violate the due process clause of the Constitution.[4]

These provisions are:

“(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral domains and which vest on the NCIP the sole authority to delineate ancestral domains and ancestral lands;

“(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an ancestral domain and upon notification to the following officials, namely, the Secretary of Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of Justice and Commissioner of the National Development Corporation, the jurisdiction of said officials over said area terminates;

“(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples shall be applied first with respect to property rights, claims of ownership, hereditary succession and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof shall be resolved in favor of the indigenous peoples;

“(4) Section 65 which states that customary laws and practices shall be used to resolve disputes involving indigenous peoples; and

“(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving rights of the indigenous peoples.”[5]

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1, series of 1998, which provides that “the administrative relationship of the NCIP to the Office of the President is characterized as a lateral but autonomous relationship for purposes of policy and program coordination.”  They contend that said Rule infringes upon the President’s power of control over executive departments under Section 17, Article VII of the Constitution.[6]

Petitioners pray for the following:

“(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related provisions of R.A. 8371 are unconstitutional and invalid;

“(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its Implementing Rules;

“(3) The issuance of a writ of prohibition directing the Secretary of the Department of Environment and Natural Resources to cease and desist from implementing Department of Environment and Natural Resources Circular No. 2, series of 1998;

“(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to cease and desist from disbursing public funds for the implementation of the assailed provisions of R.A. 8371; and

“(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural Resources to comply with his duty of carrying out the State’s constitutional mandate to control and supervise the exploration, development, utilization and conservation of Philippine natural resources.”[7]

After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition.  Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371.  Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part

II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution.   On the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the constitutionality of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition.  Justice Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional.  He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights may have been violated by the IPRA.  Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.  Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon.  However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban.

SO ORDERED.

Secretary of Environment & Natural Resources, et al. vs Mayor Jose S. Yap, et al. (G.R. No. 167707, October 8, 2008)

D E C I S I O N REYES, R.T., J.: 

AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles over their occupied lands. 

There are two consolidated petitions.  The first is G.R. No. 167707, a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming that[2] of the Regional Trial Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for titling purposes.  The second is G.R. No. 173775, a petition for prohibition, mandamus, and nullification of Proclamation No. 1064[3] issued by President Gloria Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land. 

The Antecedents 

G.R. No. 167707 

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm crystalline waters, is reputedly a premier Philippine tourist destination.  The island is also home to 12,003 inhabitants[4] who live in the bone-shaped island’s three barangays.[5]

 On April 14, 1976, the Department of Environment and Natural Resources  (DENR) approved  the  National

Reservation  Survey of BoracayIsland,[6] which identified several lots as being occupied or claimed by named persons.[7]

 On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 1801[8] declaring Boracay Island,

among other islands, caves and peninsulas in thePhilippines, as tourist zones and marine reserves under the administration of the Philippine Tourism Authority (PTA).  President Marcos later approved the issuance of PTACircular 3-82[9] dated September 3, 1982, to implement Proclamation No. 1801. 

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants Mayor  Jose  S.  Yap, Jr.,  Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief with the RTC in Kalibo, Aklan. 

In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82 raised doubts on their right to secure titles over their occupied lands.  They declared that they themselves, or through their predecessors-in-

interest, had been in open, continuous, exclusive, and notorious possession and occupation in Boracay since  June 12, 1945, or earlier since time immemorial.  They declared their lands for tax purposes and paid realty taxes on them.[10]

 Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place Boracay

beyond the commerce of man.  Since the Island was classified as a tourist zone, it was susceptible of private ownership.  Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they had the right to have the lots registered in their names through judicial confirmation of imperfect titles. 

The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory relief.  The OSG countered that Boracay Island was an unclassified land of the public domain.  It formed part of the mass of lands classified as “public forest,” which was not available for disposition pursuant to Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry Code,[11] as amended. 

The OSG maintained that respondents-claimants’ reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced.  Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705.  Since Boracay Island had not been classified as alienable and disposable, whatever possession they had cannot ripen into ownership. 

During pre-trial, respondents-claimants and the OSG stipulated on the following facts:  (1) respondents-claimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were planted with coconut trees and other natural growing trees; (3) the coconut trees had heights of more or less twenty (20) meters and were planted more or less fifty (50) years ago; and  (4) respondents-claimants declared the land they were occupying for tax purposes.[12]

 The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No. 1801 posed

any legal hindrance or impediment to the titling of the lands in Boracay.  They decided to forego with the trial and to submit the case for resolution upon submission of their respective memoranda.[13]

 The RTC took judicial notice[14] that certain parcels of land in Boracay Island, more particularly Lots 1 and 30,

Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol.  These lots were involved in Civil Case Nos. 5222 and 5262 filed before the RTC  of  Kalibo,  Aklan.[15] The  titles  were  issued  onAugust 7, 1933.[16]

 RTC and CA Dispositions

 On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading:

 WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801

and PTA Circular No. 3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire title to their lands in Boracay, in accordance with the applicable laws and in the manner prescribed therein; and to have their lands surveyed and approved by respondent Regional Technical Director of Lands as the approved survey does not in itself constitute a title to the land.

 SO ORDERED.[17]

 The RTC upheld respondents-claimants’ right to have their occupied lands titled in their name.  It ruled that neither

Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable or could not be the subject of disposition.[18]  The Circular itself recognized private ownership of lands.[19]  The trial court cited Sections 87[20] and 53[21] of the Public Land Act as basis for acknowledging private ownership of lands in Boracay and that only those forested areas in public lands were declared as part of the forest reserve.[22]

 The OSG moved for reconsideration but its motion was denied.[23]  The Republic then appealed to the CA.

 On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows:

 WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING

the appeal filed in this case and AFFIRMING the decision of the lower court.[24]

  

The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they occupied since time immemorial were part of a forest reserve. 

Again, the OSG sought reconsideration but it was similarly denied.[25]  Hence, the present petition under Rule 45.

 G.R. No. 173775

           On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued Proclamation No. 1064[26] classifying Boracay Island into four hundred (400) hectares of reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area reserved for forest land protection purposes. 

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and other landowners[29] in Boracay filed with this Court an original petition for prohibition, mandamus, and nullification of Proclamation No. 1064. [30]  They allege  that the Proclamation infringed on their “prior vested rights” over portions of Boracay. They have been in continued possession of their respective lots in Boracay since time immemorial.  They have also invested billions of pesos in developing their lands and building internationally renowned first class resorts on their lots.[31]

  

Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land.  Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926,  known as the first Public Land Act.[32]  Thus, their possession in the concept of owner for the required period entitled them to judicial confirmation of imperfect title. 

Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied portions in the island.  Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705.  Being public forest, the claimed portions of the island are inalienable and cannot be the subject of judicial confirmation of imperfect title.   It is only the executive department, not the courts, which has authority to reclassify lands of the public domain into alienable and disposable lands.  There is a need for a positive government act in order to release the lots for disposition. 

On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve the same issues on the land classification of Boracay Island.[33]

 Issues

 G.R. No. 167707

 The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal obstacle

for respondents, and all those similarly situated, to acquire title to their occupied lands in Boracay Island.[34]

   

G.R. No. 173775 

Petitioners-claimants hoist five (5) issues, namely: 

I.AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY   LAWS   THEN  ON JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY   SEC. 3a, PD 705 ? 

II.HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THEFACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE? 

III.IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE   AND   DISPOSABLE  UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS SYSTEM? 

IV.IS THE ISSUANCE OF PROCLAMATION 1064 ON   MAY   22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657. 

V.CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY   AND   TO APPROVE THE SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN BORACAY?[35]  (Underscoring supplied)

 In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and petitioners-

claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in Boracay.  The twin petitions pertain to their right, if any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do not involve their right to secure title under other pertinent laws. 

Our Ruling 

Regalian Doctrine and power of the executiveto reclassify lands of the public domain

 Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of imperfect title,

namely: (a) Philippine Bill of 1902[36] in relation to Act No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141;[37]  (b) Proclamation No. 1801[38] issued by then President Marcos; and (c) Proclamation No. 1064 [39] issued by President Gloria Macapagal-Arroyo.  We shall proceed to determine their rights to apply for judicial confirmation of imperfect title under these laws and executive acts. 

But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public domain. 

The 1935 Constitution classified lands of the public domain into agricultural, forest or timber.[40]  Meanwhile, the 1973 Constitution provided the following divisions: agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest and grazing lands, and such other classes as may be provided by law,[41] giving the government great leeway for classification.[42] Then the 1987 Constitution reverted to the 1935 Constitution classification with one addition: national parks.[43]  Of these, onlyagricultural lands may be alienated.[44]  Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and administratively classified under any of these grand divisions.  Boracay was an unclassified land of the public domain. 

The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the source of any asserted right to ownership of land and charged with the conservation of such patrimony. [45]  The doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions.[46]

 All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. [47]  Thus,

all lands that have not been acquired from the government, either by purchase or by grant, belong to the State as part of the inalienable public domain.[48]  Necessarily, it is up to the State to determine if lands of the public domain will be disposed  of for private ownership. The government, as the agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the favored recipients of public lands, as well as under what terms they may be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of ownership.[49]

 Our present land law traces its roots to the Regalian Doctrine.  Upon the Spanish conquest of the Philippines,

ownership of all lands, territories and possessions in thePhilippines passed to the Spanish Crown.[50]  The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies and the Royal Cedulas, which laid the foundation that “all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain.”[51]

 The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893.  The Spanish Mortgage

Law provided for the systematic registration of titles and deeds as well as possessory claims.[52]

 The Royal Decree of 1894 or  the Maura Law[53] partly amended the Spanish Mortgage Law and the Laws of the

Indies.  It established possessory information as the method of legalizing possession of vacant Crown land, under certain conditions which were set forth in said decree.[54]  Under Section 393 of the Maura Law, an informacion posesoria or possessory information title,[55] when duly inscribed in the Registry of Property, is converted into a title of ownership only after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and adverse, [56] from the date of its inscription.

[57] However, possessory information title had to be perfected one year after the promulgation of the Maura Law, or until  April 17, 1895.  Otherwise, the lands would revert to the State.[58]

 In sum, private ownership of land under the Spanish regime could only be founded  on royal concessions which took

various forms, namely:   (1) titulo real or royal grant; (2) concesion especial or special grant;          (3) composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and (5) informacion posesoria or possessory information title.[59]

 The first law governing the disposition of public lands in the Philippines under American rule was embodied in the

Philippine Bill of 1902.[60]  By this law, lands of the public domain in the Philippine Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest lands. [61]  The act provided for, among others, the disposal of mineral lands by means of absolute grant (freehold system) and by lease (leasehold system). [62]  It also provided the definition by exclusion of “agricultural public lands.”[63]  Interpreting the meaning of “agricultural lands” under the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:[64]

  

x x x  In other words, that the phrase “agricultural land” as used in Act No. 926 means those public lands acquired from Spain which are not timber or mineral lands.  x x x[65](Emphasis Ours)

 On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land Registration

Act.  The act established a system of registration by which recorded title becomes absolute, indefeasible, and imprescriptible.  This is known as the Torrens system.[66]

 Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first Public Land

Act.  The Act introduced the homestead system and made provisions for judicial and administrative confirmation of imperfect titles and for the sale or lease of public lands.  It permitted corporations regardless of the nationality of persons owning the controlling stock to lease or purchase lands of the public domain.[67]  Under the Act, open, continuous, exclusive, and notorious possession and occupation of agricultural lands for the next ten (10) years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title.[68]

 On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the second Public Land

Act. This new, more comprehensive law limited the exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos the same privileges.  For judicial confirmation of title, possession and occupation en concepto dueño since time immemorial, or since July 26, 1894, was required.[69]

 After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936.  To this day,

CA No. 141, as amended, remains as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands,[70] and privately owned lands which reverted to the State.[71]

 Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and occupation of lands of the

public domain since time immemorial or since July 26, 1894.  However, this provision was superseded by Republic Act (RA) No. 1942,[72] which provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect title.  The provision was last amended by PD No. 1073,[73] which now provides for possession and occupation of the land applied for since June 12, 1945, or earlier.[74]

 The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of Spanish titles as evidence in land

registration proceedings.[76]  Under the decree, all holders of Spanish titles or grants should apply for registration of their lands under Act No. 496 within six (6) months from the effectivity of the decree on February 16, 1976.  Thereafter, the recording of all unregistered lands[77] shall be governed by Section 194 of the Revised Administrative Code, as amended by Act No. 3344. 

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property Registration Decree.  It was enacted to codify the various laws relative to registration of property.[78]  It governs registration of lands under the Torrens system as well as unregistered lands, including chattel mortgages.[79]

 A positive act declaring land as alienable and disposable is required.  In keeping with the presumption of State

ownership, the Court has time and again emphasized that there must be a  positive act of the government, such as an official proclamation,[80] declassifying inalienable public land into disposable land for agricultural or other purposes. [81]  In fact, Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have been “officially delimited and classified.”[82]

 The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the

person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable.[83]  To overcome this presumption, incontrovertible evidence must be established that the land subject of the

application (or claim) is alienable or disposable.[84]  There must still be a positive act declaring land of the public domain as alienable and disposable.  To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. [85]  The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable.[86]

 In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was

presented to the Court.  The records are bereft of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants were subject of a government proclamation that the land is alienable and disposable.  Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by private claimants were already open to disposition before 2006. Matters of land classification or reclassification cannot be assumed.  They call for proof.[87]

 Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural lands. Private

claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v. Government of the Philippine Islands (1919)[88] and De Aldecoa v. The Insular Government (1909).[89]  These cases were decided under the provisions of the Philippine Bill of 1902 and Act No. 926.  There is a statement in these old cases that “in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.”[90]

 Private claimants’ reliance on Ankron and De Aldecoa is misplaced.  These cases did not have the effect of converting

the whole of Boracay Island or portions of it into agricultural lands.  It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration courts would classify lands of the public domain.   Whether the land would be classified as timber, mineral, or agricultural depended on proof presented in each case. 

Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to classify lands of the public domain into mineral, timber, and agricultural.  At that time, the courts were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence. [91]  This was the Court’s ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic ,[92] in which it stated, through Justice Adolfo Azcuna, viz.:

 x x x  Petitioners furthermore insist that a particular land need not be formally released by an act of

the Executive before it can be deemed open to private ownership, citing the cases ofRamos v. Director of Lands and Ankron v. Government of the Philippine Islands.

 x x x x

 Petitioner’s reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced.

These cases were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief Executive or President of the Philippines the power to classify lands of the public domain into mineral, timber and agricultural so that the courts then were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence.[93]

 To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a presumption

on land classification.  Thus evolved the dictum inAnkron that “the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.”[94]

   

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of the public domain had been automatically reclassified as disposable and alienable agricultural lands.  By no stretch of imagination did the presumption convert all lands of the public domain into agricultural lands. 

If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable lands.  That would take  these lands out of State ownership and worse, would be utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine. 

The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative confirmation of imperfect titles.   The presumption applies to an applicant for judicial or administrative conformation of imperfect title under Act No. 926.  It certainly cannot apply to landowners, such as private claimants or their predecessors-in-interest, who failed to avail themselves of the

benefits of Act No. 926.  As to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by the State. 

In any case, the assumption in Ankron and De Aldecoa was not absolute.  Land classification was, in the end, dependent on proof.  If there was proof that the land was better suited for non-agricultural uses, the courts could  adjudge it as a mineral or timber land despite the presumption.  In Ankron, this Court stated: 

In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether the particular land in question belongs to one class or another is a question of fact.  The mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry land and the other, mineral land.  There must be some proof of the extent and present or future value of the forestry and of the minerals.  While, as we have just said,  many definitions have been given for “agriculture,” “forestry,” and “mineral” lands, and that in each case it is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof must show that it is more valuable for the forestry or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.)   It is not sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be classified as agricultural land tomorrow.  And vice-versa, by reason of the rapid growth of timber or the discovery of valuable minerals, lands classified as agricultural today may be differently classified tomorrow.  Each case must be decided upon the proof in that particular case,having regard for its present or future value for one or the other purposes.  We believe, however, considering the fact that it is a matter of public knowledge that a majority of the lands in the Philippine Islands are agricultural lands that the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.  Whatever the land involved in a particular land registration case is forestry or mineral land must, therefore, be a matter of proof.  Its superior value for one purpose or the other is a question of fact to be settled by the proof in each particular case.  The fact that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural, forestry, or mineral land.  It may perchance belong to one or the other of said classes of land.   The Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what portions of public land shall be considered forestry land, unless private interests have intervened before such reservation is made.  In the latter case, whether the land is agricultural, forestry, or mineral, is a question of proof. Until private interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the “public domain” shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)[95](Emphasis ours)

 Since 1919, courts were no longer free to determine the classification of lands from the facts of each case, except those

that have already became private lands.[96]  Act No. 2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the Executive Department, through the President, the exclusive prerogative to classify or reclassify public lands into alienable or disposable, mineral or forest.96-a  Since then, courts no longer had the authority, whether express or implied, to determine the classification of lands of the public domain.[97]

 Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933, [98] did not present a

justiciable case for determination by the land registration court of the property’s land classification.   Simply put, there was no opportunity for the courts then to resolve if the land the Boracay occupants are now claiming were agricultural lands.   When Act No. 926 was supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having been filed by private claimants or their predecessors-in-interest, the courts were no longer authorized to determine  the property’s land classification.  Hence, private claimants cannot bank on Act No. 926. 

We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,[100] which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify lands of  the public domain was already in effect.  Krivenko cited the old cases Mapa v. Insular Government,[101] De Aldecoa v. The Insular Government,[102] and Ankron v. Government of the Philippine Islands.[103]

 Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue

in Krivenko was whether residential lots were included in the general classification of agricultural lands; and if so, whether an alien could acquire a residential lot.  This Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution [104] from acquiring agricultural land, which included residential lots.  Here, the issue is whether unclassified lands of the public domain are automatically deemed agricultural.  

Notably, the definition of “agricultural public lands” mentioned in Krivenko relied on the old cases decided prior to the enactment of Act No. 2874, including Ankron andDe Aldecoa.[105]  As We have already stated, those cases cannot apply here, since they were decided when the Executive did not have the authority to classify lands as agricultural, timber, or mineral. 

Private claimants’ continued possession under Act No. 926 does not create a presumption that the land is alienable.  Private claimants also contend that their continued possession of portions of Boracay Island for the requisite period of ten (10) years under Act No. 926[106] ipso facto converted the island into private ownership.  Hence, they may apply for a title in their name. 

A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.[107]  Collado, citing the separate opinion of now Chief Justice Reynato S. Puno inCruz v. Secretary of Environment and Natural Resources,107-a ruled: 

“Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the “issuance of patents to certain native settlers upon public lands,” for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in theIslands.” In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the government’s title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States. The term “public land” referred to all lands of the public domain whose title still remained in the government and are thrown open to private appropriation and settlement, and excluded the patrimonial property of the government and the friar lands.”

 Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable.[108] (Emphasis Ours)

 Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to

Proclamation No. 1064.  Such unclassified lands are considered public forest under PD No. 705 .  The DENR[109] and the National Mapping and Resource Information Authority[110] certify that Boracay Island is an unclassified land of the public domain. 

PD No. 705 issued by President Marcos categorized all unclassified lands of   the public domain as public forest.  Section 3(a) of PD No. 705 defines a public forest as “amass of lands of the public domain which has not been the subject of the present system of classification for the determination of which lands are needed for forest purpose and which are not.”  Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso facto considered public forests.  PD No. 705, however, respects titles already existing prior to its effectivity. 

The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of touch with the present realities in the island.  Boracay, no doubt, has been partly stripped of its forest cover to pave the way for commercial developments.  As a premier tourist destination for local and foreign tourists, Boracay appears more of a commercial island resort, rather than a forest land. 

Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island; [111] that the island has already been stripped of its forest cover; or that the implementation of Proclamation No. 1064 will destroy the island’s tourism industry, do not negate its character as public forest. 

Forests, in the context of both the Public Land Act and the Constitution [112] classifying lands of the public domain into “agricultural, forest or timber, mineral lands, and national parks,” do not necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees and underbrushes. [113]  The discussion in Heirs of Amunategui v. Director of Forestry[114] is particularly instructive: 

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover.  Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers.  “Forest lands” do not have to be on mountains or in out of the way places.  Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as

forest land.  The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like.  Unless and until the land classified as “forest” is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.[115]  (Emphasis supplied)

           There is a big difference between “forest” as defined in a dictionary and “forest or timber land” as a classification of lands of the public domain as appearing in our statutes. One is descriptive of what appears on the land while the other is a legal status, a classification for legal purposes.[116]  At any rate, the Court is tasked to determine the legalstatus of Boracay Island, and not look into its physical layout.  Hence, even if its forest cover has been replaced by beach resorts, restaurants and other commercial establishments, it has not been automatically converted from public forest to alienable agricultural land. 

Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect title.   The proclamation did not convert Boracay into an agricultural land.  However, private claimants argue that Proclamation No. 1801 issued by then President Marcos in 1978 entitles them to judicial confirmation of imperfect title.  The Proclamation classified Boracay, among other islands, as a tourist zone.  Private claimants assert that, as a tourist spot, the island is susceptible of private ownership. 

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural land.  There is nothing in the law or the Circular which madeBoracay Island an agricultural land.  The reference in Circular No. 3-82 to “private lands”[117] and “areas declared as alienable and disposable”[118] does not by itself classify the entire island as agricultural.  Notably, Circular No. 3-82 makes reference not only to private lands and areas but also to public forested lands.  Rule VIII, Section 3 provides: 

No trees in forested private lands may be cut without prior authority from the PTA.  All forested areas in public lands are declared forest reserves.  (Emphasis supplied)

 Clearly, the reference in the Circular to both private and public lands merely recognizes that the island can be classified

by the Executive department pursuant to its powers under CA No. 141.  In fact, Section 5 of the Circular recognizes the then Bureau of Forest Development’s authority to declare areas in the island as alienable and disposable when it provides: 

Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.

 Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify Boracay Island as alienable and

disposable land.  If President Marcos intended to classify the island as alienable and disposable or forest, or both, he would have identified the specific limits of each, as President Arroyo did in Proclamation No. 1064.   This was not done in Proclamation No. 1801. 

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine reserve to be administered by the PTA – to ensure the concentrated efforts of the public and private sectors in the development of the areas’ tourism potential with due regard for ecological balance in the marine environment.  Simply put, the proclamation is aimed at administering the islands for tourism and ecological purposes.  It does not address the areas’ alienability.[119]

 More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands, coves, and

peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few.  If the designation of Boracay Island as tourist zone makes it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition.  That could not have been, and is clearly beyond, the intent of the proclamation. 

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened the same to private ownership.  Sections 6 and 7 of CA No. 141[120] provide that it is only the President, upon the recommendation of the proper department head, who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands.[121]

 In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority granted to her to

classify lands of the public domain, presumably subject to existing vested rights.  Classification of public lands is the exclusive prerogative of the Executive Department, through the Office of the President.  Courts have no authority to do so.[122]  Absent such classification, the land remains unclassified until released and rendered open to disposition.[123]

 

Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center line of roads and trails, which are reserved for right of way and which shall form part of the area reserved for forest land protection purposes.

Contrary to  private claimants’ argument, there was nothing invalid or irregular, much less unconstitutional, about the classification of Boracay Island made by the President through Proclamation No. 1064.  It was within her authority to make such classification, subject to existing vested rights. 

Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law.  Private claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands.  They claim that since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an agricultural land without running afoul of Section 4(a) of RA No. 6657, thus: 

SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture.

 More specifically, the following lands are covered by the Comprehensive Agrarian Reform

Program: (a)   All alienable and disposable lands of the public domain devoted to or suitable for

agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain.

 That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from later converting

it into agricultural land.  Boracay Island still remained an unclassified land of the public domain despite PD No. 705. 

In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,[124] the Court stated that unclassified lands are public forests.  

While it is true that the land classification map does not categorically state that the islands are public forests, the fact that they were unclassified lands leads to the same result.  In the absence of the classification as mineral or timber land, the land remains unclassified land until released and rendered open to disposition.[125]  (Emphasis supplied)

 Moreover, the prohibition under the CARL applies only to a “reclassification” of land.   If the land had never been

previously classified, as in the case of Boracay, there can be no prohibited reclassification under the agrarian law.   We agree with the opinion of the Department of Justice[126] on this point: 

Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word “reclassification.” Where there has been no previous classification of public forest [referring, we repeat, to the mass of the public domain which has not been the subject of the present system of classification for purposes of determining which are needed for forest purposes and which are not] into permanent forest or forest reserves or some other forest uses under the Revised Forestry Code, there can be no “reclassification of forest lands” to speak of within the meaning of Section 4(a).

 Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest

lands to agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply to those lands of the public domain, denominated as “public forest” under the Revised Forestry Code, which have not been previously determined, or classified, as needed for forest purposes in accordance with the provisions of the Revised Forestry Code.[127]

 Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141.  Neither do

they have vested rights over the occupied lands under the said law .  There are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through his predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the public domain.[128]

 

As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions of Boracay Island into an agricultural land.  The island remained an unclassified land of the public domain and, applying the Regalian doctrine, is considered State property. 

Private claimants’ bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the absence of the second element of alienable and disposable land.  Their entitlement to a government grant under our present Public Land Act presupposes that the land possessed and applied for is already alienable and disposable.  This is clear from the wording of the law itself. [129]  Where the land is not alienable and disposable, possession of the land, no matter how long, cannot confer ownership or possessory rights.[130]

 Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No. 1064, with

respect to those lands which were classified as agricultural lands.  Private claimants failed to prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945. 

We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants complied with the requisite period of possession. 

The tax declarations in the name of private claimants are insufficient to prove the first element of possession.  We note that the earliest of the tax declarations in the name of private claimants were issued in 1993.  Being of recent dates,  the tax declarations are not sufficient to convince this Court  that the period of possession and occupation commenced on June 12, 1945. 

Private claimants insist that they have a vested right in Boracay, having been in possession of the island for a long time.  They have invested millions of pesos in developing the island into a tourist spot.   They say their continued possession and investments give them a vested right which cannot be unilaterally rescinded by Proclamation No. 1064. 

The continued possession and considerable investment of private claimants do not automatically give them a vested right in Boracay.  Nor do these give them a right to apply for a title to the land they are presently occupying.  This Court is constitutionally bound to decide cases based on the evidence presented and the laws applicable.  As the law and jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in Boracay even with their continued possession and considerable investment in the island. 

One Last Note 

The Court is aware that millions of pesos have been invested for the development of  Boracay Island, making it a by-word in the local and international tourism industry. The Court also notes that for a number of years, thousands of people have called the island their home.  While the Court commiserates with private claimants’ plight, We are bound to apply the law strictly and judiciously.  This is the law and it should prevail.  Ito ang batas at ito ang dapat umiral. 

All is not lost, however, for private claimants.  While they may not be eligible to  apply for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their automatic ouster from the residential, commercial, and other areas they possess now classified as agricultural.  Neither will this mean the loss of their substantial investments on their occupied alienable lands.  Lack of title does not necessarily mean lack of right to possess. 

For one thing, those with lawful possession may claim good faith as builders of improvements.   They can take steps to preserve or protect their possession.  For another, they may look into other modes of applying for original registration of title, such as by homestead[131] or sales patent,[132] subject to the conditions imposed by law. 

More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied lots or to exempt them from certain requirements under the present land laws.  There is one such bill[133] now pending in the House of Representatives.  Whether that bill or a similar bill will become a law is for Congress to decide. 

In issuing Proclamation No. 1064, the government has taken the step necessary to open up the island to private ownership.  This gesture may not be sufficient to appease some sectors which view the classification of the island partially into a forest reserve as absurd.  That the island is no longer overrun by trees, however, does not becloud the vision to protect its remaining forest cover and to strike a healthy balance between progress and ecology.  Ecological conservation is as important as economic progress. 

To be sure, forest lands are fundamental to our nation’s survival.  Their promotion and protection are not just fancy rhetoric for politicians and activists.  These are needs that become more urgent as destruction of our environment gets prevalent and difficult to control.  As aptly observed by Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:[134]

 

The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect to forest lands.  Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation.  Not without justification.  For, forests constitute a vital segment of any country's natural resources.  It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions.  Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property – crops, livestock, houses, and highways – not to mention precious human lives.  Indeed, the foregoing observations should be written down in a lumberman’s decalogue.[135]

 WHEREFORE, judgment is rendered as follows:

 1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision in CA-G.R. CV

No. 71118 REVERSED AND SET ASIDE. 

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.             SO ORDERED. 

RA 8371

Section 3. Definition of Terms. - For purposes of this Act, the following terms shall mean:

a) Ancestral Domains - Subject to Section 56 hereof, refer to all areas generally belonging to ICCs/IPs comprising lands,inland waters, coastal areas, and natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs, themselves or through their ancestors, communally or individually since time immemorial, continuously to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individuals, corporations, and which are necessary to ensure their economic, social and cultural welfare. It shall include ancestral land, forests, pasture, residential, agricultural, and other lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from which their traditionally had access to for their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators;

b) Ancestral Lands - Subject to Section 56 hereof, refers to land occupied, possessed and utilized by individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or through their predecessors-in-interest, under claims of individual or traditional group ownership,continuously, to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth, or as a consequence of government projects and other voluntary dealings entered into by government and private individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies, private forests, swidden farms and tree lots;

c) Certificate of Ancestral Domain Title - refers to a title formally recognizing the rights of possession and ownership of ICCs/IPs over their ancestral domains identified and delineated in accordance with this law;

d) Certificate of Ancestral Lands Title - refers to a title formally recognizing the rights of ICCs/IPs over their ancestral lands;

e) Communal Claims - refer to claims on land, resources and rights thereon, belonging to the whole community within a defined territory

f) Customary Laws - refer to a body of written and/or unwritten rules, usages, customs and practices traditionally and continually recognized, accepted and observed by respective ICCs/IPs;

g) Free and Prior Informed Consent - as used in this Act shall mean the consensus of all members of the ICCs/IPs to; be determined in accordance with their respective customary laws and practices, free from any

external manipulation, interference and coercion, and obtained after fully disclosing the intent and scope of the activity, in a language an process understandable to the community;

h) Indigenous Cultural Communities/Indigenous Peoples - refer to a group of people or homogenous societies identified by self-ascription and ascription by other, who have continuously lived as organized community on communally bounded and defined territory, and who have, under claims of ownership since time immemorial, occupied, possessed customs, tradition and other distinctive cultural traits, or who have, through resistance to political, social and cultural inroads of colonization, non-indigenous religions and culture, became historically differentiated from the majority of Filipinos. ICCs/IPs shall likewise include peoples who are regarded as indigenous on account of their descent from the populations which inhabited the country, at the time of conquest or colonization, or at the time of inroads of non-indigenous religions and cultures, or the establishment of present state boundaries, who retain some or all of their own social, economic, cultural and political institutions, but who may have been displaced from their traditional domains or who may have resettled outside their ancestral domains;

i) Indigenous Political Structure - refer to organizational and cultural leadership systems, institutions, relationships, patterns and processed for decision-making and participation, identified by ICCs/IPs such as, but not limited to, Council of Elders, Council of Timuays, Bodong Holder, or any other tribunal or body of similar nature;

j) Individual Claims - refer to claims on land and rights thereon which have been devolved to individuals, families and clans including, but not limited to, residential lots, rice terraces or paddies and tree lots;

k) National Commission on Indigenous Peoples (NCIP) - refers to the office created under this Act, which shall be under the Office of the President, and which shall be the primary government agency responsible for the formulation and implementation of policies, plans and programs to recognize, protect and promote the rights of ICCs/IPs;

l) Native Title - refers to pre-conquest rights to lands and domains which, as far back as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands and are thus indisputably presumed to have been held that way since before the Spanish Conquest;

m) Nongovernment Organization - refers to a private, nonprofit voluntary organization that has been organized primarily for the delivery of various services to the ICCs/IPs and has an established track record for effectiveness and acceptability in the community where it serves;

n) People's Organization - refers to a private, nonprofit voluntary organization of members of an ICC/IP which is accepted as representative of such ICCs/IPs;

o) Sustainable Traditional Resource Rights - refer to the rights of ICCs/IPs to sustainably use,manage, protect and conserve a) land, air, water, and minerals; b) plants, animals and other organisms; c) collecting, fishing and hunting grounds; d) sacred sites; and e) other areas of economic, ceremonial and aesthetic value in accordance with their indigenous knowledge, beliefs, systems and practices; and

p) Time Immemorial - refers to a period of time when as far back as memory can go, certain ICCs/IPs are known to have occupied, possessed in the concept of owner, and utilized a defined territory devolved to them, by operation of customary law or inherited from their ancestors, in accordance with their customs and traditions.

Mateo Cariño vs Insular Government (41 Phil. 935 [Feb. 23, 1909])

`This was an application to the Philippine court of land registration for the registration of

certain land. The application was granted by the court on March 4, 1904. An appeal was taken to the

court of first instance of the province of Benguet, on behalf of the government of the Philippines, and

also on behalf of the United States, those governments having taken possession of the property for

public and military purposes. The court of first instance found the facts and dismissed the application

upon grounds of law. This judgment was affirmed by the supreme court (7 Philippine, 132), and the

case then was brought here by writ of error.

The material facts found are very few. The applicant and plaintiff in error is an Igorot of the province of

Benguet, where the land lies. For more than fifty years before the treaty of Paris, April 11, 1899 30

Stat. at L. 1754, as far back as the findings go, the plaintiff and his ancestors had held the land as

owners. His grandfather had lived upon it, and had maintained fences sufficient for the holding of

cattle, according to the custom of the country, some of the fences, it seems, having been of much

earlier date. His father had cultivated parts and had used parts for pasturing cattle, and he had used it

for pasture in his turn. They all had been recognized as owners by the Igorots, and he had inherited or

received the land from his father, in accordance with Igorot custom. No document of title, however,

had issued from the Spanish Crown, and although, in 1893-1894, and again in 1896-1897, he made

application for one under the royal decrees then in force, nothing seems to have come of it, unless,

perhaps, information that lands in Benguet could not be conceded until those to be occupied for a

sanatorium, etc., had been designated,—a purpose that has been carried out by the Philippine

government and the United States. In 1901 the plaintiff filed a petition, alleging ownership, under the

mortgage law, and the lands were registered to him, that process, however, establishing only a

possessory title, it is said.

Before we deal with the merits, we must dispose of a technical point. The government has spent some

energy in maintaining that this case should have been brought up by appeal, and not by writ of error.

We are of opinion, however, that the mode adopted was right. The proceeding for registration is

likened to bills in equity to quiet title, but it is different in principle. It is a proceeding in rem under a

statute of the type of the Torrens act, such as was discussed in Tyler v. Registration Ct. Judges, 175

Mass. 71, 51 L.R.A. 433, 55 N. E. 812. It is nearer to law than to equity, and is an assertion of legal

title; but we think it unnecessary to put it into either pigeon hole. A writ of error is the general method

of bringing cases to this court, an appeal the exception, confined to equity in the main. There is no

reason for not applying the general rule to this case. Ormsby v. Webb, 134 U. S. 47, 65, 33 L. ed. 805,

812, 10 Sup. Ct. Rep. 478; Campbell v. Porter, 162 U. S. 478, 40 L. ed. 1044, 16 Sup. Ct. Rep. 871;

Metropolitan R. Co. v. District of Columbia (Metropolitan R. Co. v. Macfarland) 195 U. S. 322, 49 L. ed.

219, 25 Sup. Ct. Rep. 28.

Another preliminary matter may as well be disposed of here. It is suggested that, even if the applicant

have title, he cannot have it registered, because the Philippine Commission's act No. 926, of 1903,

excepts the province of Benguet among others from its operation. But that act deals with the

acquisition of new titles by homestead entries, purchase, etc., and the perfecting of titles begun under

the Spanish law. The applicant's claim is that he now owns the land, and is entitled to registration

under the Philippine Commission's act No. 496, of 1902, which established a court for that purpose

with jurisdiction 'throughout the Philippine archipelago,' § 2, and authorized in general terms

applications to be made by persons claiming to own the legal estate in fee simple, as the applicant

does. He is entitled to registration if his claim of ownership can be maintained.

We come, then, to the question on which the case was decided below,—namely, whether the plaintiff

owns the land. The position of the government, shortly stated, is that Spain assumed, asserted, and

had title to all the land in the Philippines except so far as it saw fit to permit private titles to be

acquired; that there was no prescription against the Crown, and that, if there was, a decree of June 25,

1880, required registration within a limited time to make the title good; that the plaintiff's land was not

registered, and therefore became, if it was not always, public land; that the United States succeeded

to the title of Spain, and so that the plaintiff has no rights that the Philippine government is bound to

respect.

If we suppose for the moment that the government's contention is so far correct that the Crown of

Spain in form asserted a title to this land at the date of the treaty of Paris, to which the United States

succeeded, it is not to be assumed without argument that the plaintiff's case is at an end. It is true that

Spain, in its earlier decrees, embodied the universal feudal theory that all lands were held from the

Crown, and perhaps the general attitude of conquering nations toward people not recognized as

entitled to the treatment accorded to those in the same zone of civilization with themselves. It is true,

also, that, in legal theory, sovereignty is absolute, and that, as against foreign nations, the United

States may assert, as Spain asserted, absolute power. But it does not follow that, as against the

inhabitants of the Philippines, the United States asserts that Spain had such power. When theory is left

on one side, sovereignty is a question of strength, and may vary in degree. How far a new sovereign

shall insist upon the theoretical relation of the subjects to the head in the past, and how far it shall

recognize actual facts, are matters for it to decide.

The province of Benguet was inhabited by a tribe that the Solicitor General, in his argument,

characterized as a savage tribe that never was brought under the civil or military government of the

Spanish Crown. It seems probable, if not certain, that the Spanish officials would not have granted to

anyone in that province the registration to which formerly the plaintiff was entitled by the Spanish

laws, and which would have made his title beyond question good. Whatever may have been the

technical position of Spain, it does not follow that, in the view of the United States, he had lost all

rights and was a mere trespasser when the present government seized his land. The argument to that

effect seems to amount to a denial of native titles throughout an important part of the island of Luzon,

at least, for the want of ceremonies which the Spaniards would not have permitted and had not the

power to enforce.

The acquisition of the Philippines was not like the settlement of the white race in the United States.

Whatever consideration may have been shown to the North American Indians, the dominant purpose of

the whites in America was to occupy the land. It is obvious that, however stated, the reason for our

taking over the Philippines was different. No one, we suppose, would deny that, so far as consistent

with paramount necessities, our first object in the internal administration of the islands is to do justice

to the natives, not to exploit their country for private gain. By the organic act of July 1, 1902, chap.

1369, § 12, 32 Stat. at L. 691, all the property and rights acquired there by the United States are to be

administered 'for the benefit of the inhabitants thereof.' It is reasonable to suppose that the attitude

thus assumed by the United States with regard to what was unquestionably its own is also its attitude

in deciding what it will claim for its own. The same statute made a bill of rights, embodying the

safeguards of the Constitution, and, like the Constitution, extends those safeguards to all. It provides

that 'no law shall be enacted in said islands which shall deprive any person of life, liberty, or property

without due process of law, or deny to any person therein the equal protection of the laws.' § 5. In the

light of the declaration that we have quoted from § 12, it is hard to believe that the United States was

ready to declare in the next breath that 'any person' did not embrace the inhabitants of Benguet, or

that it meant by 'property' only that which had become such by ceremonies of which presumably a

large part of the inhabitants never had heard, and that it proposed to treat as public land what they,

by native custom and by long association,—one of the profoundest factors in human thought, regarded

as their own.

It is true that, by § 14, the government of the Philippines is empowered to enact rules and prescribe

terms for perfecting titles to public lands where some, but not all, Spanish conditions had been

fulfilled, and to issue patents to natives for not more than 16 hectares of public lands actually occupied

by the native or his ancestors before August 13, 1898. But this section perhaps might be satisfied if

confined to cases where the occupation was of land admitted to be public land, and had not continued

for such a length of time and under such circumstances as to give rise to the understanding that the

occupants were owners at that date. We hesitate to suppose that it was intended to declare every

native who had not a paper title a trespasser, and to set the claims of all the wilder tribes afloat. It is

true again that there is excepted from the provision that we have quoted as to the administration of

the property and rights acquired by the United States, such land and property as shall be designated

by the President for military or other reservations, as this land since has been. But there still remains

the question what property and rights the United States asserted itself to have acquired.

Whatever the law upon these points may be, and we mean to go no further than the necessities of

decision demand, every presumption is and ought to be against the government in a case like the

present. It might, perhaps, be proper and sufficient to say that when, as far back as testimony or

memory goes, the land has been held by individuals under a claim of private ownership, it will be

presumed to have been held in the same way from before the Spanish conquest, and never to have

been public land. Certainly in a case like this, if there is doubt or ambiguity in the Spanish law, we

ought to give the applicant the benefit of the doubt. Whether justice to the natives and the import of

the organic act ought not to carry us beyond a subtle examination of ancient texts, or perhaps even

beyond the attitude of Spanish law, humane though it was, it is unnecessary to decide. If, in a tacit

way, it was assumed that the wild tribes of the Philippines were to be dealt with as the power and

inclination of the conqueror might dictate, Congress has not yet sanctioned the same course as the

proper one 'for the benefit of the inhabitants thereof.'

If the applicant's case is to be tried by the law of Spain, we do not discover such clear proof that it was

bad by that law as to satisfy us that he does not own the land. To begin with, the older decrees and

laws cited by the counsel for the plaintiff in error seem to indicate pretty clearly that the natives were

recognized as owning some lands, irrespective of any royal grant. In other words, Spain did not

assume to convert all the native inhabitants of the Philippines into trespassers or even into tenants at

will. For instance, Book 4, title 12, Law 14 of the Recopilacion de Leyes de las Indias, cited for a

contrary conclusion in Valenton v. Murciano, 3 Philippine, 537, while it commands viceroys and others,

when it seems proper, to call for the exhibition of grants, directs them to confirm those who hold by

good grants or justa prescripcion. It is true that it begins by the characteristic assertion of feudal

overlordship and the origin of all titles in the King or his predecessors. That was theory and discourse.

The fact was that titles were admitted to exist that owed nothing to the powers of Spain beyond this

recognition in their books.

Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3 Philippine, 546:

'Where such possessors shall not be able to produce title deeds, it shall be sufficient if they shall show

that ancient possession, as a valid title by prescription.' It may be that this means possession from

before 1700; but, at all events, the principle is admitted. As prescription, even against Crown lands,

was recognized by the laws of Spain, we see no sufficient reason for hesitating to admit that it was

recognized in the Philippines in regard to lands over which Spain had only a paper sovereignty.

The question comes, however, on the decree of June 25, 1880, for the adjustment of royal lands

wrongfully occupied by private individuals in the Philippine Islands. This begins with the usual theoretic

assertion that, for private ownership, there must have been a grant by competent authority; but

instantly descends to fact by providing that, for all legal effects, those who have been in possession for

certain times shall be deemed owners. For cultivated land, twenty years, uninterrupted, is enough. For

uncultivated, thirty. Art. 5. So that, when this decree went into effect, the applicant's father was owner

of the land by the very terms of the decree. But, it is said, the object of this law was to require the

adjustment or registration proceedings that it described, and in that way to require every one to get a

document of title or lose his land. That purpose may have been entertained, but it does not appear

clearly to have been applicable to all. The regulations purport to have been made 'for the adjustment

of royal lands wrongfully occupied by private individuals.' (We follow the translation in the

government's brief.) It does not appear that this land ever was royal land or wrongfully occupied. In

Article 6 it is provided that 'interested parties not included within the two preceding articles the

articles recognizing prescription of twenty and thirty years may legalize their possession, and thereby

acquire the full ownership of the said lands, by means of adjustment proceedings, to be conducted in

the following manner.' This seems, by its very terms, not to apply to those declared already to be

owners by lapse of time. Article 8 provides for the case of parties not asking an adjustment of the

lands of which they are unlawfully enjoying the possession, within one year, and threatens that the

treasury 'will reassert the ownership of the state over the lands,' and will sell at auction such part as it

does not reserve. The applicant's possession was not unlawful, and no attempt at any such

proceedings against him or his father ever was made. Finally, it should be noted that the natural

construction of the decree is confirmed by the report of the council of state. That report puts forward

as a reason for the regulations that, in view of the condition of almost all property in the Philippines, it

is important to fix its status by general rules, on the principle that the lapse of a fixed period legalizes

completely all possession; recommends in two articles twenty and thirty years, as adopted in the

decree; and then suggests that interested parties not included in those articles may legalize their

possession and acquire ownership by adjustment at a certain price.

It is true that the language of arts. 4 and 5 attributes title to those 'who may prove' possession for the

necessary time, and we do not overlook the argument that this means may prove in registration

proceedings. It may be that an English conveyancer would have recommended an application under

the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the

notion that ancient family possessions were in danger, if he had read every word of it. The words 'may

prove' (acrediten), as well, or better, in view of the other provisions, might be taken to mean when

called upon to do so in any litigation. There are indications that registration was expected from all, but

none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the

proof, wherever made, was not to confer title, but simply to establish it, as already conferred by the

decree, if not by earlier law. The royal decree of February 13, 1894, declaring forfeited titles that were

capable of adjustment under the decree of 1880, for which adjustment had not been sought, should

not be construed as a confiscation, but as the withdrawal of a privilege. As a matter of fact, the

applicant never was disturbed. This same decree is quoted by the court of land registration for another

recognition of the common-law prescription of thirty years as still running against alienable Crown

land.

It will be perceived that the rights of the applicant under the Spanish law present a problem not

without difficulties for courts of a different legal tradition. We have deemed it proper on that account

to notice the possible effect of the change of sovereignty and the act of Congress establishing the

fundamental principles now to be observed. Upon a consideration of the whole case we are of opinion

that law and justice require that the applicant should be granted what he seeks, and should not be

deprived of what, by the practice and belief of those among whom he lived, was his property, through

a refined interpretation of an almost forgotten law of Spain.

Judgment reversed.

ABSENT POSITIVE PROOF, LAND IS PRESUMED TO BE INALIENABLE PUBLIC DOMAIN:Pacifico M. Valiao vs Republic (G.R. No. 170757, November 28, 2011)

DECISION 

PERALTA, J.: 

          Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision[1] and Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 54811, which reversed the Decision [3] of the Regional Trial Court (RTC) of Kabankalan, Negros Occidental, Branch 61, in Land Registration Case No. 03, granting petitioners' application for registration of title over a parcel of land located in Ilog, Negros Occidental.          The factual milieu of this case is as follows:           On August 11, 1987, petitioners[4] Pacifico, Lodovico, Ricardo, Bienvenido, all surnamed Valiao, and Nemesio Grandea filed with the RTC of Kabankalan, Negros Occidental an application for registration of a parcel of land with an area of 504,535 square meters, more or less, situated in Barrio Galicia, Municipality of Ilog, Negros Occidental.

           On June 20, 1988, private oppositors Macario Zafra and Manuel Yusay filed their Motion to Dismiss the application on the following grounds: (1) the land applied for has not been declared alienable and disposable; (2)  res judicata has set in to bar the application for registration; and (3) the application has no factual or legal basis.           On August 24, 1988, the Republic of the Philippines (Republic), through the Office of the Solicitor General (OSG), opposed the application for registration on the following grounds, among others: that neither the applicants nor their  predecessors-in-interest had been in open, continuous, exclusive and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto; that the muniment/s of title and/or the tax declaration/s and tax payments/receipts of applicants, if any, attached to or alleged in the application, do/es not constitute competent and sufficient evidence of a  bona fide acquisition of the land applied for or of their open, continuous, exclusive and notorious possession and occupation in the concept of owner, since June 12, 1945 or prior thereto; that the parcel of land applied for is a portion of public domain belonging to the Republic, which is not subject to private appropriation; and that the present action is barred by a previous final judgment in a cadastral case prosecuted between the same parties and involving the same parcel of land.           On July 3, 1989, the RTC denied private oppositors' Motion to Dismiss. Trial thereafter ensued.           In support of their application for registration, petitioners alleged that they acquired the subject property in 1947, upon the death of their uncle Basilio Millarez (Basilio), who purchased the land from a certain Fermin Payogao, pursuant to a Deed of Sale[5] dated May 19, 1916 entirely handwritten in Spanish language. Basilio possessed the land in question from May 19, 1916 until his death in 1947. Basilio's possession was open, continuous, peaceful, adverse, notorious, uninterrupted and in the concept of an owner. Upon Basilio's death, the applicants as co-heirs possessed the said land until 1966, when oppositor Zafra unlawfully and violently dispossessed them of their property, which compelled them to file complaints of Grave Coercion and Qualified Theft against Zafra. In support of their claim of possession over the subject property, petitioners submitted in evidence Tax Declaration No. 9562[6] dated September 29, 1976 under the names of the heirs of Basilio Millarez.                   The RTC, in its Decision dated December 15, 1995, granted petitioners' application for registration of the subject property, the dispositive portion of which states: 

          WHEREFORE, in view of the foregoing, this Court hereby orders and decrees registration of Lot No. 2372 subject of the present proceedings and the registration of title thereto, in favor of the applicants, who are declared the true and lawful owners of said Lot No. 2372, except applicant Lodovico Valiao, who sold his right to Macario Zafra.           Upon the finality of this decision, let the corresponding decree of registration and Certificate of Title be issued in the name of the applicants, Heirs of Basilio Millarez, namely: Pacifico Valiao, Ricardo Valiao, Bienvenido Valiao and Nemesio Grandea, subject to the rights of private oppositors, Macario Zafra and Manuel Yusay over said lot whose fishpond permits are declared VALID and will expire on December 31, 2003.           No costs. 

                          SO ORDERED.[7]

            Aggrieved by the Decision, the private oppositors and the Republic, through Assistant Prosecutor Josue A. Gatin, filed an appeal with the CA, which reversed the trial court's findings in its Decision dated June 23, 2005. The CA ruled that the classification of lands of the public domain is an exclusive prerogative of the executive department of the government and in the absence of such classification, the lands remain as unclassified until it is released therefrom and rendered open to disposition. Further, there exists a prior cadastral case involving the same parties herein and the same Lot No. 2372, which ruled that Lot No. 2372 belongs to the Republic. The CA held that such judgment constitutes res judicata that bars a subsequent action for land registration. It also ruled that the subject property is part of the inalienable land of the public domain and petitioners failed to prove that they and their predecessors-in-interest had been in open, continuous, exclusive and notorious possession of the land in question since June 12, 1945 or earlier. The dispositive portion of the decision reads: 

WHEREFORE, premises considered, the instant appeal is GRANTED. Accordingly, We REVERSE the Decision dated December 15, 1995 of the Regional Trial Court, DENY the application for registration of title filed by petitioners-appellees, DECLARE as moot and academic any and all claims of private oppositors-appellants over Lot No. 2372, and DECLARE the subject parcel of land to be inalienable and indisposable land belonging to the public domain.

 SO ORDERED.[8] 

           Petitioners filed a motion for reconsideration, which was denied by the CA in a Resolution dated November 17, 2005. Hence, the present petition with the following issues:   

IWHETHER OR NOT LOT NO. 2372 OF THE ILOG CADASTRE IS ALIENABLE AND DISPOSABLE LAND OF THE PUBLIC DOMAIN. 

IIWHETHER OR NOT THE CLAIM OF PRESCRIPTION BY THE APPLICANT WILL LIE ON LOT NO. 2372. 

IIIWHETHER OR NOT THE DECISION OF THE COURT OF APPEALS IN CAD. CASE NO. 23, ENTITLED LODOVICO VALIAO, ET, AL., VS. MACARIO ZAFRA, ET, AL., AC G.R. NO. CV-68873, CONSTITUTES RES JUDICATA AS FAR AS THIS APPLICATION FOR REGISTRATION IS CONCERNED. 

IVWHETHER OR NOT THE ALLEGED POSSESSION OF THE APPLICANTS THROUGH THEIR PREDECESSORS-IN-INTEREST IS SUFFICIENT TO SUSTAIN THEIR CLAIM FOR PRESCRIPTION.[9]

            Petitioners claim that Lot No. 2372 is an alienable and disposable portion of the public domain.   The possession of applicants' predecessors-in interest since 1916 until 1966 had been open, continuous and uninterrupted; thus, converting the said land into a private land. The subject lot had already become private in character in view of the length of time the applicants and their predecessors-in-interest had possessed the subject lot, which entitles them to the confirmation of their title. Petitioners further claim that prior dismissal in a cadastral proceeding does not constitute res judicata in a subsequent application for registration of a parcel of land.           In its Comment, the OSG submits that the issues to be resolved  in the present petition, i.e., whether Lot No. 2372 is alienable and disposable land of the public domain and whether petitioners have the right to have the said property registered in their name through prescription of time are questions of fact, which were already passed upon by the CA and no longer reviewable by the Court, since findings of fact of the CA, when supported by sufficient evidence, are conclusive and binding on the parties. The OSG further claims that petitioners failed to prove that the subject lot is part of the alienable and disposable portion of the public domain and that petitioners' application for land registration is already barred by a prior decision in a cadastral case.  Lastly, the OSG asserts that petitioners did not present sufficient evidence to prove that their possession over the subject lot applied for had been open, peaceful, exclusive, continuous and adverse.           Anent the propriety of filing a petition for review under Rule 45 of the Rules of Court, the principle is well-established that this Court is not a trier of facts and that only questions of law may be raised.   The resolution of factual issues is the function of the lower courts whose findings on these matters are received with respect and are, as a rule, binding on this Court.   This rule, however, is subject to certain exceptions. One of these is when the findings of the appellate court are contrary to those of the trial court.[10] Due to the divergence of the findings of the CA and the RTC, the Court will now re-examine the facts and evidence adduced before the lower courts.           Section 14 (1) of Presidential Decree No. (PD) 1529, otherwise known as the Property Registration Decree provides:

 SEC. 14. Who may apply. - The following persons may file in the proper Court of First Instance an

application for registration of title to land, whether personally or through their duly-authorized representatives:

            (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.  

            From the foregoing, petitioners need to prove that: (1) the land forms part of the alienable and disposable land of the public domain; and (2) they, by themselves or through their predecessors-in-interest, have been in open, continuous, exclusive,

and notorious possession and occupation of the subject land under a bona fide claim of ownership from June 12, 1945 or earlier.[11] These the petitioners must prove by no less than clear, positive and convincing evidence.[12]

           Under the Regalian doctrine, which is embodied in our Constitution, all lands of the public domain belong to the State, which is the source of any asserted right to any ownership of land.  All lands not appearing to be clearly within private ownership are presumed to belong to the State. Accordingly, public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable public domain.[13] Unless public land is shown to have been reclassified as alienable or disposable to a private person by the State, it remains part of the inalienable public domain. Property of the public domain is beyond the commerce of man and not susceptible of private appropriation and acquisitive prescription. Occupation thereof in the concept of owner no matter how long cannot ripen into ownership and be registered as a title.[14] The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable.  To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.[15]

           There must be a positive act declaring land of the public domain as alienable and disposable. To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government, such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. The applicant may also secure a certification from the government that the  land claimed to have been possessed for the required number of years is alienable and disposable.[16]

           No such evidence was offered by the petitioners to show that the land in question has been classified as alienable and disposable land of the public domain. In the absence of incontrovertible evidence to prove that the subject property is already classified as alienable and disposable, we must consider the same as still inalienable public domain. [17]Verily, the rules on the confirmation of imperfect title do not apply unless and until the land subject thereof is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain. 

With respect to the existence of a prior cadastral case, it appears that on July 11, 1966, the petitioners filed in Cadastral Case No. 23 of the then CFI of Negros Occidental a petition to reopen the proceedings relative to three lots, one of which is Lot No. 2372.  The lower court, in its Order[18] dated October 20, 1980, held that Lot No. 2372 belongs to the Republic.  It found that after the subject lot was declared public land, it was found to be inside the communal forest.   On appeal, the CA, in its Decision[19] dated August 7, 1984, found no reversible error and affirmed the decision of the cadastral court. Thereafter, a petition elevating the case to this Court was dismissed for lack of merit.[20] In the present case, the CA, in its Decision dated June 23, 2005, ruled that such judgment constitutes res judicata that will bar a subsequent action for land registration on the same land.

           In Director of Lands v. Court of Appeals,[21] the Court held that a judicial declaration that a parcel of land is public, does not preclude even the same applicant from subsequently seeking a judicial confirmation of his title to the same land, provided he thereafter complies with the provisions of Section 48[22] of Commonwealth Act No. 141, as amended, and as long as said public lands remain alienable and disposable. In the case at bar, not only did the petitioners fail to prove that the subject land is part of the alienable and disposable portion of the public domain, they failed to demonstrate that they by themselves or through their predecessors-in-interest have possessed and occupied the subject land since June 12, 1945 or earlier as mandated by the law.           It is settled that the applicant must present proof of specific acts of ownership to substantiate the claim and cannot just offer general statements which are mere conclusions of law than factual evidence of possession.[23] Actual possession consists in the manifestation of acts of dominion over it of such a nature as a party would actually exercise over his own property.[24]

           The testimonies of Nemesio and Pacifico as to their own and their predecessors-in-interest's possession and ownership over the subject lot fail to convince Us.  Petitioners claim that Basilio was in possession of the land way back in 1916. Yet no tax declaration covering the subject property, during the period Basilio allegedly occupied the subject property, i.e., 1916 to 1947, was presented in evidence. Other than the bare allegations of Nemesio and Pacifico that Basilio allegedly introduced improvements on the subject property, there is nothing in the records which would substantiate petitioners' claim that Basilio was in possession of Lot No. 2372 since June 12, 1945 or earlier, the period of possession required by law. Hence, petitioners' assertion that Basilio possessed the property in question from 1916 to 1947 is, at best, conjectural and self-serving.           As regards petitioners' possession of the land in question from 1947 to 1966, petitioners could only support the same with a tax declaration dated September 29, 1976.  At best, petitioners can only prove possession since said date. What is required is open, exclusive, continuous and notorious possession by petitioners and their predecessors-in-interest, under a  bona fide claim of ownership, since June 12, 1945 or earlier.[25] Petitioners failed to explain why, despite their claim that their predecessors-in-interest have possessed the subject properties in the concept of an owner even before June 12, 1945, it was only in 1976 that they started to declare the same for purposes of taxation. Moreover, tax declarations and receipts are not conclusive evidence of ownership or of the right to possess land when not supported by any other evidence. The disputed property may have been

declared for taxation purposes in the names of the applicants for registration, or of their predecessors-in-interest, but it does not necessarily prove ownership.  They are merely indicia of a claim of ownership.[26]

           Evidently, since the petitioners failed to prove that (1) the subject property was classified as part of the disposable and alienable land of the    public domain; and (2) they and their predecessors-in-interest had been in open, continuous, exclusive, and notorious possession and occupation thereof under a bona fide claim of ownership since June 12, 1945 or earlier, their application for confirmation and registration of the subject property under PD 1529 should be denied.           WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 54811, which reversed the Decision of the Regional Trial Court of Kabankalan, Negros Occidental, Branch 61, in Land Registration Case No. 03, is AFFIRMED. The application for registration of title filed by the petitioners Pacifico Valiao, Lodovico Valiao, Ricardo Valiao, Bienvenido Valiao, and Nemesio Grandea, over Lot No. 2372, with a total area of  504,535 square meters, more or less, situated in Barrio Galicia, Municipality of Ilog, Negros Occidental, is DENIED.            SO ORDERED.

*public lands not shown to have been reclassified by the State as alienable agricultural land remain part of the inalienable public domain. Property of the public domain is beyond the commerce of man and not susceptible of private appropriation and acquisitive prescription. Occupation thereof in the concept of owner no matter how long cannot ripen into ownership and be registered as a title. The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable. To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.

RECLAIMED LANDS: Francisco I. Chavez vs Public Estates Authority & Amari Coastal Bay Development Corp . (G.R. No. 133250, May 6, 2003, and reconsideration on July 9, 2002): foreshore and submerged areas belong to the public domain and are inalienable unless reclaimed, classified as alienable lands open to disposition and further declared no longer needed for public service. The fact that alienable lands of the public domain were transferred to the PEA and issued land patents or certificates of title in PEA’s name did not automatically make such lands private. 

R E S O L U T I O N

CARPIO, J.:

For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent Amari Coastal Bay Development Corporation (“Amari” for brevity) on September 13, 2002;  (2) Motion to Set Case for Hearing on Oral Argument filed by Amari on August 20, 2002;   (3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July 26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by respondent Public Estates Authority (“PEA” for brevity) on July 26, 2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the Office of the Solicitor General on July 25, 2002.  Petitioner Francisco I. Chavez filed on November 13, 2002 his Consolidated Opposition to the main and supplemental motions for reconsideration.

To recall, the Court’s decision of July 9, 2002 (“Decision” for brevity) on the instant case states in its summary:

We can now summarize our conclusions as follows:

1.  The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain.  PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations.  PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2.  The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas.  Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate.  In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.

3.  Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

4.  Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain.  PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service.  Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.  Under Article 1409 of the Civil Code, contracts whose “object or purpose is contrary to law,” or whose “object is outside the commerce of men,” are “inexistent and void from the beginning.”  The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.

Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before his appointment to the Court, wrote in his Manila Timescolumn of July 1, 1997, “I have always maintained that the law requires the public bidding of reclamation projects.”  Justice Carpio, then a private law practitioner, also stated in the same column, “The Amari-PEA reclamation contract is legally flawed because it was not bid out by the PEA.”  Amari claims that because of these statements Justice Carpio should inhibit himself “on the grounds of bias and prejudgment” and that the instant case should be “re-deliberated” after being assigned to a new ponente.

The motion to inhibit Justice Carpio must be denied for three reasons.  First, the motion to inhibit came after Justice Carpio had already rendered his opinion on the merits of the case.  The rule is that a motion to inhibit must be denied if filed after a member of the Court had already given an opinion on the merits of the case, [1] the rationale being that “a litigant cannot be permitted to speculate upon the action of the Court xxx (only to) raise an objection of this sort after a decision has been rendered.”  Second, as can be readily gleaned from the summary of the Decision quoted above, the absence of public bidding is not one of the ratio decidendi of the Decision which is anchored on violation of specific provisions of the Constitution.  The absence of public bidding was not raised as an issue by the parties.  The absence of public bidding was mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance of public officials.  At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence of public bidding in the disposition of the Freedom Islands rendered the Amended JVA null and void.[2] Third, judges and justices are not disqualified from participating in a case just because they have written legal articles on the law involved in the case.  As stated by the Court in Republic v. Cocofed,[3] -

The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in the same manner that jurists will not be disqualified just because they may have given their opinions as textbook writers on the question involved in a case. 

Besides, the subject and title of the column in question was “The CCP reclamation project” and the column referred to the Amari-PEA contract only in passing in one sentence.

Amari’s motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed exhaustively the issues involved in the case.

The motions for reconsideration reiterate mainly the arguments already discussed in the Decision.  We shall consider in this Resolution only the new arguments raised by respondents.

In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively, not retroactively to cover the Amended JVA.  Amari argues that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached, citing De Agbayani v. PNB,[4] thus:

x x x. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.  The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, - with respect to particular relations, individual and corporate, and particular conduct, private and official."  This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores.  x x x.

x x x

x x x  That before the decision they were not constitutionally infirm was admitted expressly. There is all the more reason then to yield assent to the now prevailing principle that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached.

Amari now claims that “assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these decrees and executive orders should only be applied prospectively from the finality of the Decision.”

Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs vested rights.   Amari maintains that the new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old doctrine in good faith, citing Spouses Benzonan v. Court of Appeals,[5] thus:

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.

There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application of doctrine to temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the present petitions, however, we find no such equitable considerations. Not only did the private respondent apply for free agricultural land when he did not need it and he had no intentions of applying it to the noble purposes behind the law, he would now repurchase for only P327,995.00, the property purchased by the petitioners in good faith for P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land must be worth more than that amount now.

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to

respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of the Belisario ruling.

Amari’s reliance on De Agbayani and Spouses Benzonan is misplaced.  These cases would apply if the prevailing law or doctrine at the time of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the public domain, and the Decision annulled the law or reversed this doctrine.  Obviously, this is not the case here.

Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain.  But since the effectivity of the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of the public domain.  The 1987 Constitution continued this constitutional prohibition.  The prevailing law before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain.  The Decision has not annulled or in any way changed the law on this matter.   The Decision, whether made retroactive or not, does not change the law since the Decision merely reiterates the law that prevailed since the effectivity of the 1973 Constitution.  Thus, De Agbayani, which refers to a law that is invalidated by a decision of the Court, has no application to the instant case.

Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent decision which adopts a new doctrine.  In the instant case, there is no previous doctrine that is overruled by the Decision.  Since the case of Manila Electric Company v. Judge Castro-Bartolome,[6] decided on June 29, 1982, the Court has applied consistently the constitutional provision that private corporations cannot hold, except by lease, alienable lands of the public domain.  The Court reiterated this in numerous cases, and the only dispute in the application of this constitutional provision is whether the land in question had already become private property before the effectivity of the 1973 Constitution.[7] If the land was already private land before the 1973 Constitution because the corporation had possessed it openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973 Constitution, then the corporation could never hold, except by lease, such public land.  Indisputably, the Decision does not overrule any previous doctrine of the Court.

The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain.  This is one of the two main reasons why the Decision annulled the Amended JVA.  The other main reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and beyond the commerce of man, a doctrine that has remained immutable since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does not overrule, any existing judicial doctrine. 

Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law or doctrine.  Since the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always been part of the public domain.  And since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973 Constitution, statutory law never allowed foreshore lands reclaimed by the government to be sold to private corporations.  The 1973 and 1987 Constitution enshrined and expanded the ban to include any alienable land of the public domain. 

There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the sale or transfer of the land may no longer be invalidated because of “weighty considerations of equity and social justice.”[8] The invalidation of the sale or transfer may also be superfluous if the purpose of the statutory or constitutional ban has been achieved.  But none of these cases apply to Amari.

Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a citizen. [9] Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos has been achieved. [10] In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a qualified party.  In the instant case, however, Amari has not transferred the Freedom Islands, or any portion of it, to any qualified party.  In fact, Amari admits that title to the Freedom Islands still remains with PEA.[11]

The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned under the principle of res judicata, provided the requisites for res judicata are present.[12] Under this principle, the courts and the parties are bound by a prior final decision, otherwise there will be no end to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals,[13]  “once a judgement has become final and executory, it can no longer be disturbed no matter how erroneous it may be.”  In the instant case, there is no prior final decision adjudicating the Freedom Islands to Amari.

There are, moreover, special circumstances that disqualify Amari from invoking equity principles.  Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands.    Even before the filing of this petition, two Senate Committees[14] had already approved on September 16, 1997 Senate Committee Report No. 560.  This Report concluded, after a well-publicized investigation into PEA’s sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.

Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom Islands.  Amari states that it has paid PEA only P300,000,000.00[15] out of theP1,894,129,200.00 total reimbursement cost agreed upon in the Amended JVA.  Moreover, Amari does not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or to have started to construct any permanent infrastructure on the Freedom Islands.   In short, Amari does not claim to have introduced any physical improvement or development on the reclamation project that is the subject of the Amended JVA.  And yet Amari claims that it had already spent a “whoppingP9,876,108,638.00” as its total development cost as of June 30, 2002. [16] Amari does not explain how it spent the rest of the P9,876,108,638.00 total project cost after paying PEAP300,000,000.00.  Certainly, Amari cannot claim to be an innocent purchaser in good faith and for value.

In its Supplement to Motion for Reconsideration, PEA claims that it is “similarly situated” as the Bases Conversion Development Authority (BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other military reservations.  PEA’s comparison is incorrect.  The Decision states as follows:

As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain.  The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain.  Only when qualified private parties acquire these lands will the lands become private lands.  In the hands of the government agency tasked and authorized to dispose of alienable or disposable lands of the public domain, these lands are still public, not private lands.

PEA is the central implementing agency tasked to undertake reclamation projects nationwide.  PEA took the place of Department of Environment and Natural Resources (“DENR” for brevity) as the government agency charged with leasing or selling all reclaimed lands of the public domain.  In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore lands are public lands in the same manner that these same lands would have been public lands in the hands of DENR .  BCDA is an entirely different government entity.  BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense.  BCDA’s mandate is specific and limited in area, while PEA’s mandate is general and national.   BCDA holds government lands that have been granted to end-user government entities – the military services of the armed forces.  In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency “primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government.” 

In Laurel v. Garcia,[17] cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign Affairs, when no longer needed for public use, may be declared patrimonial property for sale to private parties provided there is a law authorizing such act.  Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties.  R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties. 

Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations.  Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property[18] which even private corporations can acquire by purchase.  Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations.

We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to reclaimed foreshore lands, thus:

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain.   PEA

will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction.   This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can “acquire x x x any and all kinds of lands.”  This will open the floodgates to corporations and even individuals acquiring hundreds, if not thousands, of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands.  This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent.  This will completely reverse the clear direction of constitutional development in this country.  The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands.  The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition.

Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is “enormous” and “it would be difficult for PEA to accomplish such project without the participation of private corporations.”[19] The Decision does not bar private corporations from participating in reclamation projects and being paid for their services in reclaiming lands.  What the Decision prohibits, following the explicit constitutional mandate, is for private corporations to acquire reclaimed lands of the public domain.  There is no prohibition on the directors, officers and stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction reclaimed alienable lands of the public domain.  They can acquire not more than 12 hectares per individual, and the land thus acquired becomes private land.

Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a quantum meruit basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of nullity.

WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY.  The Motion to Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise DENIED.

SO ORDERED.

Republic vs City of Paranaque. (G.R. No. 191109, July 18, 2012): The reclaimed lands are still part of the public domain, owned by the State and, therefore, exempt from payment of real estate taxes. The subject lands are reclaimed lands, specifically portions of the foreshore and offshore areas of Manila Bay.

D E C I S I O NMENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, on pure questions of law, assailing the January 8, 2010 Order1 of the Regional Trial Court, Branch 195, Parafiaque City (RTC), which ruled that petitioner Philippine Reclamation Authority (PRA) is a government-owned and controlled corporation (GOCC), a taxable entity, and, therefore, . not exempt from payment of real property taxes. The pertinent portion of the said order reads:In view of the finding of this court that petitioner is not exempt from payment of real property taxes, respondent Parañaque City Treasurer Liberato M. Carabeo did not act xxx without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or in excess of jurisdiction in issuing the warrants of levy on the subject properties.WHEREFORE, the instant petition is dismissed. The Motion for Leave to File and Admit Attached Supplemental Petition is denied and the supplemental petition attached thereto is not admitted.The Public Estates Authority (PEA) is a government corporation created by virtue of Presidential Decree (P.D.) No. 1084 (Creating the Public Estates Authority, Defining its Powers and Functions, Providing Funds Therefor and For Other Purposes) which took effect on February 4,1977 to provide a coordinated, economical and efficient reclamation of lands, and the administration and operation of lands belonging to, managed and/or operated by, the government with the object of maximizing their utilization and hastening their development consistent with public interest.On February 14, 1979, by virtue of Executive Order (E.O.) No. 525 issued by then President Ferdinand Marcos, PEA was designated as the agency primarily responsible for integrating, directing and coordinating all reclamation projects for and on behalf of the National Government.

On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O. No. 380 transforming PEA into PRA, which shall perform all the powers and functions of the PEA relating to reclamation activities.By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore areas of Manila Bay, including those located in Parañaque City, and was issued Original Certificates of Title (OCT Nos. 180, 202, 206, 207, 289, 557, and 559) and Transfer Certificates of Title (TCT Nos. 104628, 7312, 7309, 7311, 9685, and 9686) over the reclaimed lands.On February 19, 2003, then Parañaque City Treasurer Liberato M. Carabeo (Carabeo) issued Warrants of Levy on PRA’s reclaimed properties (Central Business Park and Barangay San Dionisio) located in Parañaque City based on the assessment for delinquent real property taxes made by then Parañaque City Assessor Soledad Medina Cue for tax years 2001 and 2002.On March 26, 2003, PRA filed a petition for prohibition with prayer for temporary restraining order (TRO) and/or writ of preliminary injunction against Carabeo before the RTC.On April 3, 2003, after due hearing, the RTC issued an order denying PRA’s petition for the issuance of a temporary restraining order.On April 4, 2003, PRA sent a letter to Carabeo requesting the latter not to proceed with the public auction of the subject reclaimed properties on April 7, 2003. In response, Carabeo sent a letter stating that the public auction could not be deferred because the RTC had already denied PRA’s TRO application.On April 25, 2003, the RTC denied PRA’s prayer for the issuance of a writ of preliminary injunction for being moot and academic considering that the auction sale of the subject properties on April 7, 2003 had already been consummated.On August 3, 2009, after an exchange of several pleadings and the failure of both parties to arrive at a compromise agreement, PRA filed a Motion for Leave to File and Admit Attached Supplemental Petition which sought to declare as null and void the assessment for real property taxes, the levy based on the said assessment, the public auction sale conducted on April 7, 2003, and the Certificates of Sale issued pursuant to the auction sale.On January 8, 2010, the RTC rendered its decision dismissing PRA’s petition. In ruling that PRA was not exempt from payment of real property taxes, the RTC reasoned out that it was a GOCC under Section 3 of P.D. No. 1084. It was organized as a stock corporation because it had an authorized capital stock divided into no par value shares. In fact, PRA admitted its corporate personality and that said properties were registered in its name as shown by the certificates of title. Therefore, as a GOCC, local tax exemption is withdrawn by virtue of Section 193 of Republic Act (R.A.) No. 7160 Local Government Code (LGC) which was the prevailing law in 2001 and 2002 with respect to real property taxation. The RTC also ruled that the tax exemption claimed by PRA under E.O. No. 654 had already been expressly repealed by R.A. No. 7160 and that PRA failed to comply with the procedural requirements in Section 206 thereof.Not in conformity, PRA filed this petition for certiorari assailing the January 8, 2010 RTC Order based on the following GROUNDS

ITHE TRIAL COURT GRAVELY ERRED IN FINDING THAT PETITIONER IS LIABLE TO PAY REAL PROPERTY TAX ON THE SUBJECT RECLAIMED LANDS CONSIDERINGTHAT PETITIONER IS AN INCORPORATED INSTRUMENTALITY OF THE NATIONAL GOVERNMENT AND IS, THEREFORE, EXEMPT FROM PAYMENT OF REAL PROPERTY TAX UNDER SECTIONS 234(A) AND 133(O) OF REPUBLIC ACT 7160 OR THE LOCAL GOVERNMENT CODE VIS-À-VIS MANILA INTERNATIONAL AIRPORT AUTHORITY V. COURT OF APPEALS.

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

instrumentality a GOCC. Section 48, Chapter 12, Book I of the Administrative Code of 1987 recognizes a scenario where a piece of land owned by the Republic is titled in the name of a department, agency or instrumentality.Thus, PRA insists that, as an incorporated instrumentality of the National Government, it is exempt from payment of real property tax except when the beneficial use of the real property is granted to a taxable person. PRA claims that based on Section 133(o) of the LGC, local governments cannot tax the national government which delegate to local governments the power to tax.It explains that reclaimed lands are part of the public domain, owned by the State, thus, exempt from the payment of real estate taxes. Reclaimed lands retain their inherent potential as areas for public use or public service. While the subject reclaimed lands are still in its hands, these lands remain public lands and form part of the public domain. Hence, the assessment of real property taxes made on said lands, as well as the levy thereon, and the public sale thereof on April 7, 2003, including the issuance of the certificates of sale in favor of the respondent Parañaque City, are invalid and of no force and effect.On the other hand, the City of Parañaque (respondent) argues that PRA since its creation consistently represented itself to be a GOCC. PRA’s very own charter (P.D. No. 1084) declared it to be a GOCC and that it has entered into several thousands of contracts where it represented itself to be a GOCC. In fact, PRA admitted in its original and amended petitions and pre-trial brief filed with the RTC of Parañaque City that it was a GOCC.Respondent further argues that PRA is a stock corporation with an authorized capital stock divided into 3 million no par value shares, out of which 2 million shares have been subscribed and fully paid up. Section 193 of the LGC of 1991 has withdrawn tax exemption privileges granted to or presently enjoyed by all persons, whether natural or juridical, including GOCCs.Hence, since PRA is a GOCC, it is not exempt from the payment of real property tax.THE COURT’S RULINGThe Court finds merit in the petition.Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines a GOCC as follows:SEC. 2. General Terms Defined. – x x x x(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one(51) percent of its capital stock: x x x.On the other hand, Section 2(10) of the Introductory Provisions of the Administrative Code defines a government "instrumentality" as follows:SEC. 2. General Terms Defined. –– x x x x(10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x xFrom the above definitions, it is clear that a GOCC must be "organized as a stock or non-stock corporation" while an instrumentality is vested by law with corporate powers. Likewise, when the law makes a government instrumentality operationally autonomous, the instrumentality remains part of the National Government machinery although not integrated with the department framework.When the law vests in a government instrumentality corporate powers, the instrumentality does not necessarily become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers.Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed a GOCC. Examples are the Mactan International Airport Authority, the Philippine Ports Authority, the University of the Philippines, and Bangko Sentral ng Pilipinas. All these government instrumentalities exercise corporate powers but they are not organized as stock or non-stock corporations as required by Section 2(13) of the Introductory Provisions of the Administrative Code. These government instrumentalities are sometimes loosely called government corporate entities. They are not, however, GOCCs in the strict sense as understood under the Administrative Code, which is the governing law defining the legal relationship and status of government entities.2

Correlatively, Section 3 of the Corporation Code defines a stock corporation as one whose "capital stock is divided into shares and x x x authorized to distribute to the holders of such shares dividends x x x." Section 87 thereof defines a non-stock corporation as "one where no part of its income is distributable as dividends to its members, trustees or officers." Further, Section 88 provides that non-stock corporations are "organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry, agriculture and like chambers."Two requisites must concur before one may be classified as a stock corporation, namely: (1) that it has capital stock divided into shares; and (2) that it is authorized to distribute dividends and allotments of surplus and profits to its stockholders. If only one requisite is present, it cannot be properly classified as a stock corporation. As for non-stock corporations, they must have members and must not distribute any part of their income to said members.3

In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock corporation. It cannot be considered as a stock corporation because although it has a capital stock divided into no par value shares as provided in Section 74 of P.D. No. 1084, it is not authorized to distribute dividends, surplus allotments or profits to stockholders. There is no provision whatsoever in P.D. No. 1084 or in any of the subsequent executive issuances pertaining to PRA, particularly, E.O. No. 525,5 E.O. No. 6546 and EO No. 7987 that authorizes PRA to distribute dividends, surplus allotments or profits to its stockholders.PRA cannot be considered a non-stock corporation either because it does not have members. A non-stock corporation must have members.8 Moreover, it was not organized for any of the purposes mentioned in Section 88 of the Corporation Code. Specifically, it was created to manage all government reclamation projects.Furthermore, there is another reason why the PRA cannot be classified as a GOCC. Section 16, Article XII of the 1987 Constitution provides as follows:Section 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.The fundamental provision above authorizes Congress to create GOCCs through special charters on two conditions: 1) the GOCC must be established for the common good; and 2) the GOCC must meet the test of economic viability. In this case, PRA may have passed the first condition of common good but failed the second one - economic viability. Undoubtedly, the purpose behind the creation of PRA was not for economic or commercial activities. Neither was it created to compete in the market place considering that there were no other competing reclamation companies being operated by the private sector. As mentioned earlier, PRA was created essentially to perform a public service considering that it was primarily responsible for a coordinated, economical and efficient reclamation, administration and operation of lands belonging to the government with the object of maximizing their utilization and hastening their development consistent with the public interest. Sections 2 and 4 of P.D. No. 1084 reads, as follows:Section 2. Declaration of policy. It is the declared policy of the State to provide for a coordinated, economical and efficient reclamation of lands, and the administration and operation of lands belonging to, managed and/or operated by the government, with the object of maximizing their utilization and hastening their development consistent with the public interest.Section 4. Purposes. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to acquire reclaimed land;(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the government.(c) To provide for, operate or administer such services as may be necessary for the efficient, economical and beneficial utilization of the above properties.

The twin requirement of common good and economic viability was lengthily discussed in the case of Manila International Airport Authority v. Court of Appeals,9 the pertinent portion of which reads:Third, the government-owned or controlled corporations created through special charters are those that meet the two conditions prescribed in Section 16, Article XII of the Constitution.The first condition is that the government-owned or controlled corporation must be established for the common good. The second condition is that the government-owned or controlled corporation must meet the test of economic viability. Section 16, Article XII of the 1987 Constitution provides:SEC. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.The Constitution expressly authorizes the legislature to create "government-owned or controlled corporations" through special charters only if these entities are required to meet the twin conditions of common good and economic viability. In other words, Congress has no power to create government-owned or controlled corporations with special charters unless they are made to comply with the two conditions of common good and economic viability. The test of economic viability applies only to government-owned or controlled corporations that perform economic or commercial activities and need to compete in the market place. Being essentially economic vehicles of the State for the common good — meaning for economic development purposes — these government-owned or controlled corporations with special charters are usually organized as stock corporations just like ordinary private corporations.In contrast, government instrumentalities vested with corporate powers and performing governmental or public functions need not meet the test of economic viability. These instrumentalities perform essential public services for the common good, services that every modern State must provide its citizens. These instrumentalities need not be economically viable since the government may even subsidize their entire operations. These instrumentalities are not the "government-owned or controlled corporations" referred to in Section 16, Article XII of the 1987 Constitution.Thus, the Constitution imposes no limitation when the legislature creates government instrumentalities vested with corporate powers but performing essential governmental or public functions. Congress has plenary authority to create government instrumentalities vested with corporate powers provided these instrumentalities perform essential government functions or public services. However, when the legislature creates through special charters corporations

that perform economic or commercial activities, such entities — known as "government-owned or controlled corporations" — must meet the test of economic viability because they compete in the market place.This is the situation of the Land Bank of the Philippines and the Development Bank of the Philippines and similar government-owned or controlled corporations, which derive their incometo meet operating expenses solely from commercial transactions in competition with the private sector. The intent of the Constitution is to prevent the creation of government-owned or controlled corporations that cannot survive on their own in the market place and thus merely drain the public coffers.Commissioner Blas F. Ople, proponent of the test of economic viability, explained to the Constitutional Commission the purpose of this test, as follows:MR. OPLE: Madam President, the reason for this concern is really that when the government creates a corporation, there is a sense in which this corporation becomes exempt from the test of economic performance. We know what happened in the past. If a government corporation loses, then it makes its claim upon the taxpayers' money through new equity infusions from the government and what is always invoked is the common good. That is the reason why this year, out of a budget of P115 billion for the entire government, about P28 billion of this will go into equity infusions to support a few government financial institutions. And this is all taxpayers' money which could have been relocated to agrarian reform, to social services like health and education, to augment the salaries of grossly underpaid public employees. And yet this is all going down the drain.Therefore, when we insert the phrase "ECONOMIC VIABILITY" together with the "common good," this becomes a restraint on future enthusiasts for state capitalism to excuse themselves from the responsibility of meeting the market test so that they become viable. And so, Madam President, I reiterate, for the committee's consideration and I am glad that I am joined in this proposal by Commissioner Foz, the insertion of the standard of "ECONOMIC VIABILITY OR THE ECONOMIC TEST," together with the common good.1âwphi1Father Joaquin G. Bernas, a leading member of the Constitutional Commission, explains in his textbook The 1987 Constitution of the Republic of the Philippines: A Commentary:The second sentence was added by the 1986 Constitutional Commission. The significant addition, however, is the phrase "in the interest of the common good and subject to the test of economic viability." The addition includes the ideas that they must show capacity to function efficiently in business and that they should not go into activities which the private sector can do better. Moreover, economic viability is more than financial viability but also includes capability to make profit and generate benefits not quantifiable in financial terms.Clearly, the test of economic viability does not apply to government entities vested with corporate powers and performing essential public services. The State is obligated to render essential public services regardless of the economic viability of providing such service. The non-economic viability of rendering such essential public service does not excuse the State from withholding such essential services from the public.However, government-owned or controlled corporations with special charters, organized essentially for economic or commercial objectives, must meet the test of economic viability. These are the government-owned or controlled corporations that are usually organized under their special charters as stock corporations, like the Land Bank of the Philippines and the Development Bank of the Philippines. These are the government-owned or controlled corporations, along with government-owned or controlled corporations organized under the Corporation Code, that fall under the definition of "government-owned or controlled corporations" in Section 2(10) of the Administrative Code. [Emphases supplied]This Court is convinced that PRA is not a GOCC either under Section 2(3) of the Introductory Provisions of the Administrative Code or under Section 16, Article XII of the 1987 Constitution. The facts, the evidence on record and jurisprudence on the issue support the position that PRA was not organized either as a stock or a non-stock corporation. Neither was it created by Congress to operate commercially and compete in the private market. Instead, PRA is a government instrumentality vested with corporate powers and performing an essential public service pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. Being an incorporated government instrumentality, it is exempt from payment of real property tax.Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands managed by PRA. On the other hand, Section 234(a) of the LGC, in relation to its Section 133(o), exempts PRA from paying realty taxes and protects it from the taxing powers of local government units.Sections 234(a) and 133(o) of the LGC provide, as follows:SEC. 234. Exemptions from Real Property Tax – The following are exempted from payment of the real property tax:(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.x x x xSEC. 133. Common Limitations on the Taxing Powers of Local Government Units. – Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:x x x x(o) Taxes, fees or charges of any kinds on the National Government, its agencies and instrumentalities, and local government units. [Emphasis supplied]

It is clear from Section 234 that real property owned by the Republic of the Philippines (the Republic) is exempt from real property tax unless the beneficial use thereof has been granted to a taxable person. In this case, there is no proof that PRA granted the beneficial use of the subject reclaimed lands to a taxable entity. There is no showing on record either that PRA leased the subject reclaimed properties to a private taxable entity.This exemption should be read in relation to Section 133(o) of the same Code, which prohibits local governments from imposing "taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities x x x." The Administrative Code allows real property owned by the Republic to be titled in the name of agencies or instrumentalities of the national government. Such real properties remain owned by the Republic and continue to be exempt from real estate tax.Indeed, the Republic grants the beneficial use of its real property to an agency or instrumentality of the national government. This happens when the title of the real property is transferred to an agency or instrumentality even as the Republic remains the owner of the real property. Such arrangement does not result in the loss of the tax exemption, unless "the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person."10

The rationale behind Section 133(o) has also been explained in the case of the Manila International Airport Authority,11 to wit:Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may provide."When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities.Another rule is that a tax exemption is strictly construed against the taxpayer claiming the exemption. However, when Congress grants an exemption to a national government instrumentality from local taxation, such exemption is construed liberally in favor of the national government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.:The reason for the rule does not apply in the case of exemptions running to the benefit of the government itself or its agencies. In such case the practical effect of an exemption is merely to reduce the amount of money that has to be handled by government in the course of its operations. For these reasons, provisions granting exemptions to government agencies may be construed liberally, in favor of non tax-liability of such agencies.There is, moreover, no point in national and local governments taxing each other, unless a sound and compelling policy requires such transfer of public funds from one government pocket to another.There is also no reason for local governments to tax national government instrumentalities for rendering essential public services to inhabitants of local governments. The only exception is when the legislature clearly intended to tax government instrumentalities for the delivery of essential public services for sound and compelling policy considerations. There must be express language in the law empowering local governments to tax national government instrumentalities. Any doubt whether such power exists is resolved against local governments.Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in the Code, local governments cannot tax national government instrumentalities. As this Court held in Basco v. Philippine Amusements and Gaming Corporation:The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579)This doctrine emanates from the "supremacy" of the National Government over local governments."Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal responsibilities, or even to seriously burden it in the accomplishment of them." (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool for regulation." (U.S. v. Sanchez, 340 US 42)The power to tax which was called by Justice Marshall as the "power to destroy" (McCulloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has the inherent power to wield it. [Emphases supplied]The Court agrees with PRA that the subject reclaimed lands are still part of the public domain, owned by the State and, therefore, exempt from payment of real estate taxes.Section 2, Article XII of the 1987 Constitution reads in part, as follows:Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration,

development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of waterpower, beneficial use may be the measure and limit of the grant.Similarly, Article 420 of the Civil Code enumerates properties belonging to the State:Art. 420. The following things are property of public dominion:

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

Here, the subject lands are reclaimed lands, specifically portions of the foreshore and offshore areas of Manila Bay. As such, these lands remain public lands and form part of the public domain. In the case of Chavez v. Public Estates Authority and AMARI Coastal Development Corporation,12 the Court held that foreshore and submerged areas irrefutably belonged to the public domain and were inalienable unless reclaimed, classified as alienable lands open to disposition and further declared no longer needed for public service. The fact that alienable lands of the public domain were transferred to the PEA (now PRA) and issued land patents or certificates of title in PEA’s name did not automatically make such lands private. This Court also held therein that reclaimed lands retained their inherent potential as areas for public use or public service.As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the public domain, these lands are still public, not private lands.Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as "any and all kinds of lands." PEA can hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEA's name does not automatically make such lands private.13

Likewise, it is worthy to mention Section 14, Chapter 4, Title I, Book III of the Administrative Code of 1987, thus:SEC 14. Power to Reserve Lands of the Public and Private Dominion of the Government.-(1)The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the public domain, the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise provided by law or proclamation.Reclaimed lands such as the subject lands in issue are reserved lands for public use. They are properties of public dominion. The ownership of such lands remains with the State unless they are withdrawn by law or presidential proclamation from public use.Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the "lands of the public domain, waters x x x and other natural resources" and consequently "owned by the State." As such, foreshore and submerged areas "shall not be alienated," unless they are classified as "agricultural lands" of the public domain. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-public use.As the Court has repeatedly ruled, properties of public dominion are not subject to execution or foreclosure sale.14 Thus, the assessment, levy and foreclosure made on the subject reclaimed lands by respondent, as well as the issuances of certificates of title in favor of respondent, are without basis.WHEREFORE, the petition is GRANTED. The January 8, 2010 Order of the Regional Trial Court, Branch 195, Parañaque City, is REVERSED and SET ASIDE. All reclaimed properties owned by the Philippine Reclamation Authority are hereby declared EXEMPT from real estate taxes. All real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of Parañaque on the subject reclaimed properties; the assailed auction sale, dated April 7, 2003; and the Certificates of Sale subsequently issued by the Parañaque City Treasurer in favor of the City of Parañaque, are all declared VOID.SO ORDERED.

FOREST LANDS:

City Government of Baguio vs Atty. Brain Masweng, Regional Officer, NCIP-CAR, et al. (G.R. No. 180206, February 4, 2009): the courts have no jurisdictional competence to adjudicate forest lands. See also: The Baguio Regreening Movement, Inc., et al. vs Atty. Brain Masweng, et al. (G.R. No. 180882, February 27, 2013). These cases also discuss ancestral domains/lands.

D E C I S I O N 

TINGA, J.: 

Petitioners, the City Government of Baguio City, represented by its Mayor, Reinaldo Bautista, Jr., the Anti-Squatting Committee, represented by Atty. Melchor Carlos R. Rabanes; the City Buildings and Architecture Office, represented by Oscar Flores; and the Public Order and Safety Office, represented by Emmanuel Reyes and later substituted by Gregorio Deligero, assail the Decision[1] of the Court of Appeals in CA G.R. SP No. 96895, dated April 16, 2007, and its Resolution[2] dated September 11, 2007, which affirmed the injunctive writ issued by the National Commission on Indigenous Peoples (NCIP) against the demolition orders of petitioners. 

The following undisputed facts are culled from the assailed Decision: The case stemmed from the three (3) Demolition Orders issued by the City Mayor of Baguio City,

Braulio D. Yaranon, ordering the demolition of the illegal structures constructed by Lazaro Bawas, Alexander Ampaguey, Sr. and a certain Mr. Basatan on a portion of the Busol Watershed Reservation located at Aurora Hill, Baguio City, without the required building permits and in violation of Section 69 of Presidential Decree No. 705, as amended, Presidential Decree No. 1096 and Republic Act No. 7279.

 Pursuant thereto, the corresponding demolition advices dated September 19, 2006 were issued

informing the occupants thereon of the intended demolition of the erected structures on October 17 to 20, 2006. Consequently, Elvin Gumangan, Narciso Basatan and Lazaro Bawas (hereinafter private respondents) filed a petition for injunction with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction against the Office of the City Mayor of Baguio City through its Acting City Mayor, Reynaldo Bautista, the City Building and Architecture Office, the Anti-Squatting Task Force, and the Public Order and Safety Division, among others, (collectively called petitioners) before the National Commission on Indigenous Peoples, Cordillera Administrative Region (NCIP-CAR), Regional Hearing Office, La Trinidad, Benguet, docketed as Case No. 31-CAR-06.

 In their petition, private respondents basically claimed that the lands where their residential houses

stand are their ancestral lands which they have been occupying and possessing openly and continuously since time immemorial; that their ownership thereof have been expressly recognized in Proclamation No. 15 dated April 27, 1922 and recommended by the Department of Environment and Natural Resources (DENR) for exclusion from the coverage of the Busol Forest Reserve. They, thus, contended that the demolition of their residential houses is a violation of their right of possession and ownership of ancestral lands accorded by the Constitution and the law, perforce, must be restrained.

 On October 16 and 19, 2006, Regional Hearing Officer Atty. Brain S. Masweng of the NCIP issued

the two (2) assailed temporary restraining orders (TRO) directing the petitioners and all persons acting for and in their behalf to refrain from enforcing Demolition Advice dated September 18, 2006; Demolition Order dated September 19, 2006; Demolition Order No. 25, Series of 2004; Demolition Order No. 33, Series of 2005; and Demolition Order No. 28, Series of 2004, for a total period of twenty (20) days.

 Subsequently, the NCIP issued the other assailed Resolution dated November 10, 2006 granting the

private respondents’ application for preliminary injunction subject to the posting of an injunctive bond each in the amount of P10,000.00.[3]

  Acting on the petition for certiorari filed by petitioners,[4] the Court of Appeals upheld the jurisdiction of the NCIP over

the action filed by private respondents and affirmed the temporary restraining orders dated October 16 [5] and 19, 2006,[6] and the Resolution dated November 10, 2006,[7] granting the application for a writ of preliminary injunction, issued by the NCIP. The appellate court also ruled that Baguio City is not exempt from the coverage of Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA).

 Petitioners assert that the NCIP has no jurisdiction to hear and decide main actions for injunction such as the one filed

by private respondents. They claim that the NCIP has the authority to issue temporary restraining orders and writs of preliminary injunction only as auxiliary remedies to cases pending before it. 

 Further, the IPRA provides that Baguio City shall be governed by its Charter. Thus, private respondents cannot claim

their alleged ancestral lands under the provisions of the IPRA. Petitioners contend that private respondents are not entitled to the protection of an injunctive writ because they

encroached upon the Busol Forest Reservation and built structures thereon without the requisite permit. Moreover, this Court, in Heirs of Gumangan v. Court of Appeals,[8] had already declared that the Busol Forest Reservation is inalienable and possession thereof, no matter how long, cannot convert the same into private property.  Even assuming that private respondents have a pending application for ancestral land claim, their right is at best contingent and cannot come under the protective mantle of injunction.

 Petitioners also claim that the Busol Forest Reservation is exempt from ancestral claims as it is needed for public

welfare. It is allegedly one of the few remaining forests inBaguio City and is the city’s main watershed. Finally, petitioners contend that the demolition orders were issued pursuant to the police power of the local

government. In their Comment[9] dated March 1, 2007, private respondents defend the jurisdiction of the NCIP to take cognizance of

and decide main actions for injunction arguing that the IPRA does not state that the NCIP may only issue such writs of injunction as auxiliary remedies. Private respondents also contend that the IPRA does not exempt  BaguioCity from its coverage nor does it state that there are no ancestral lands in Baguio City.

 As members of the Ibaloi Indigenous Community native to Baguio City, private respondents are treated as squatters

despite the fact that they hold native title to their ancestral land.  The IPRA allegedly now recognizes ancestral lands held by native title as never to have been public lands.

 Private respondents aver that the Busol Forest Reservation is subject to ancestral land claims. In fact, Proclamation No.

15[10] dated April 27, 1922, which declared the area a forest reserve, allegedly did not nullify the vested rights of private respondents over their ancestral lands and even identified the claimants of the particular portions within the forest reserve. This claim of ownership is an exception to the government’s contention that the whole area is a forest reservation.

 Lastly, private respondents assert that the power of the city mayor to order the demolition of certain structures is not

absolute. Regard should be taken of the fact that private respondents cannot be issued building permits precisely because they do not have paper titles over their ancestral lands, a requirement for the issuance of a building permit under the National Building Code.

 Petitioners’ Reply to Comment[11] dated June 11, 2008 merely reiterates their previous arguments. We shall first dispose of the elemental issue of the NCIP’s jurisdiction. The NCIP is the primary government agency responsible for the formulation and implementation of policies, plans and

programs to protect and promote the rights and well-being of indigenous cultural communities/indigenous peoples (ICCs/IPs) and the recognition of their ancestral domains as well as their rights thereto.[12]  In order to fully effectuate its mandate, the NCIP is vested with jurisdiction over all claims and disputes involving the rights of ICCs/IPs.  The only condition precedent to the NCIP’s assumption of jurisdiction over such disputes is that the parties thereto shall have exhausted all remedies provided under their customary laws and have obtained a certification from the Council of Elders/Leaders who participated in the attempt to settle the dispute that the same has not been resolved.[13]

 In addition, NCIP Administrative Circular No. 1-03 dated April 9, 2003, known as the Rules on Pleadings, Practice and

Procedure Before the NCIP, reiterates the jurisdiction of the NCIP over claims and disputes involving ancestral lands and enumerates the actions that may be brought before the commission.  Sec. 5, Rule III thereof provides:

 Sec. 5. Jurisdiction of the NCIP.—The NCIP through its Regional Hearing Offices shall exercise

jurisdiction over all claims and disputes involving rights of ICCs/IPs and all cases pertaining to the implementation, enforcement, and interpretation of R.A. 8371, including but not limited to the following:

 (1)   Original and Exclusive Jurisdiction of the Regional Hearing Office (RHO):

 a.       Cases involving disputes and controversies over ancestral lands/domains of ICCs/IPs;b.      Cases involving violations of the requirement of free and prior and informed consent of ICCs/IPs;c.       Actions for enforcement of decisions of ICCs/IPs involving violations of customary laws or

desecration of ceremonial sites, sacred places, or rituals;

d.      Actions for redemption/reconveyance under Section 8(b) of R.A. 8371; ande.       Such other cases analogous to the foregoing. 

(2)   Original Jurisdiction of the Regional Hearing Officer: a.       Cases affecting property rights, claims of ownership, hereditary succession, and settlement of land

disputes, between and among ICCs/IPs that have not been settled under customary laws; andb.      Actions for damages arising out of any violation of Republic Act No. 8371. 

(3)   Exclusive and Original Jurisdiction of the Commission: a.   Petition for cancellation of Certificate of Ancestral Domain Titles/Certificate of Ancestral Land

Titles (CADTs/CALTs) alleged to have been fraudulently acquired by, and issued to, any person or community as provided for under Section 54 of R.A. 8371. Provided that such action is filed within one (1) year from the date of registration.

 In order to determine whether the NCIP has jurisdiction over the dispute in accordance with the foregoing provisions, it

is necessary to resolve, on the basis of the allegations in their petition, whether private respondents are members of ICCs/IPs.   In their petition[14] filed before the NCIP, private respondents, members of the Ibaloi tribe who first settled in Baguio City, were asserting ownership of portions of the Busol Forest Reservation which they claim to be their ancestral lands. Correctly denominated as a petition for injunction as it sought to prevent the enforcement of the demolition orders issued by the City Mayor, the petition traced private respondents’ ancestry to Molintas and Gumangan and asserted their possession, occupation and utilization of their ancestral lands. The petition also alleged that private respondents’ claim over these lands had been recognized by Proclamation No. 15 which mentions the names of Molintas and Gumangan as having claims over portions of the Busol Forest Reservation.[15]

 Clearly then, the allegations in the petition, which axiomatically determine the nature of the action and the jurisdiction

of a particular tribunal,[16] squarely qualify it as a “dispute(s) or controversy(s) over ancestral lands/domains of ICCs/IPs” within the original and exclusive jurisdiction of the NCIP-RHO.

 The IPRA, furthermore, endows the NCIP with the power to issue temporary restraining orders and writs of

injunction.  Sec. 69 thereof states: 

Sec. 69. Quasi-Judicial Powers of the NCIP.—The NCIP shall have the power and authority: a)      To promulgate rules and regulations governing the hearing and disposition of cases filed before it

as well as those pertaining to its internal functions and such rules and regulations as may be necessary to carry out the purposes of this Act; 

b)      To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, agreements, and other document of similar nature as may be material to a just determination of the matter under investigation or hearing conducted in pursuance of this Act; 

c)      To hold any person in contempt, directly or indirectly, and impose appropriate penalties therefor; and 

d)      To enjoin any or all acts involving or arising from any case pending before it which, if not restrained forthwith, may cause grave or irreparable damage to any of the parties to the case or seriously affect social or economic activity. [Emphasis supplied]

     

NCIP Administrative Circular No. 1-03 echoes the above-quoted provision in Sec. 82, Rule XV, which provides: 

Sec. 82. Preliminary Injunction and Temporary Restraining Order.—A writ of preliminary injunction or restraining order may be granted by the Commission pursuant to the provisions of Sections 59 and 69 of R.A. [No.] 8371 when it is established, on the basis of sworn allegations in a petition, that the acts complained of involving or arising from any case, if not restrained forthwith, may cause grave or irreparable

damage or injury to any of the parties, or seriously affect social or economic activity. This power may also be exercised by RHOs in cases pending before them in order to preserve the rights of the parties. As can be gleaned from the foregoing provisions, the NCIP may issue temporary restraining orders and writs of

injunction without any prohibition against the issuance of the writ when the main action is for injunction. The power to issue temporary restraining orders or writs of injunction allows parties to a dispute over which the NCIP has jurisdiction to seek relief against any action which may cause them grave or irreparable damage or injury.  In this case, the Regional Hearing Officer issued the injunctive writ because its jurisdiction was called upon to protect and preserve the rights of private respondents who are undoubtedly members of ICCs/IPs.

 Parenthetically, in order to reinforce the powers of the NCIP, the IPRA even provides that no restraining order or

preliminary injunction may be issued by any inferior court against the NCIP in any case,   dispute   or   controversy   arising   from   or   necessary  to  theinterpretation of the IPRA and other laws relating to ICCs/IPs and ancestral domains.[17]

 Petitioners argue that Baguio City is exempt from the provisions of the IPRA, and necessarily the jurisdiction of the

NCIP, by virtue of Sec. 78 thereof, which states: SEC. 78. Special Provision.—The City of Baguio shall remain to be governed by its Charter and all

lands proclaimed as part of its townsite reservation shall remain as such until otherwise reclassified by appropriate legislation: Provided, That prior land rights and titles recognized and/or acquired through any judicial, administrative or other processes before the effectivity of this Act shall remain valid: Provided, further, That this provision shall not apply to any territory which becomes part of the City of Baguio after the effectivity of this Act. [Emphasis supplied]  

          The foregoing provision indeed states that Baguio City is governed by its own charter.  Its exemption from the IPRA, however, cannot ipso facto be deduced because the law concedes the validity of prior land rights recognized or acquired through any process before its effectivity.  The IPRA demands that the city’s charter respect the validity of these recognized land rights and titles.  

The crucial question to be asked then is whether private respondents’ ancestral land claim was indeed recognized by Proclamation No. 15, in which  case,  their  right thereto  may be protected by an injunctive writ.  After all, before a writ of preliminary injunction may be issued, petitioners must show that there exists a right to be protected and that the acts against which injunction is directed are violative of said right.[18]

 Proclamation No. 15, however, does not appear to be a definitive recognition of private respondents’ ancestral land

claim. The proclamation merely identifies the Molintas and Gumangan families, the predecessors-in-interest of private respondents, as claimants of a portion of the Busol Forest Reservation but does not acknowledge vested rights over the same.   In fact, Proclamation No. 15 explicitly withdraws the Busol Forest Reservation from sale or settlement. It provides:

 Pursuant to the provisions of section eighteen hundred and twenty-six of Act Numbered Twenty-

seven Hundred and eleven[,] I hereby establish the  Busol Forest Reservation to be administered by the Bureau of Forestry for the purpose of conserving and protecting water and timber, the protection of the water supply being of primary importance and all other uses of the forest are to be subordinated to that purpose.  I therefore withdraw from sale or settlement the following described parcels of the public domain situated in the Township of La Trinidad, City ofBaguio, Mountain Province, Island of Luzon, to wit: The fact remains, too, that the Busol Forest Reservation was declared by the Court as inalienable in Heirs of Gumangan

v. Court of Appeals.[19] The declaration of the Busol Forest Reservation as such precludes its conversion into private property. Relatedly, the courts are not endowed with jurisdictional competence to adjudicate forest lands. 

 All told, although the NCIP has the authority to issue temporary restraining orders and writs of injunction, we are not

convinced that private respondents are entitled to the relief granted by the Commission.  

WHEREFORE, the instant petition is GRANTED.  The Decision of the Court of Appeals in CA G.R. SP No. 96895 dated April 16, 2007 and its Resolution datedSeptember 11, 2007 are REVERSED  and  SET  ASIDE.  Case  No. 31-CAR-06 entitled, Elvin Gumangan, Narciso Basatan and Lazaro Bawas v. Office of the City Mayor of Baguio City , et al. is DISMISSED.  No pronouncement as to costs.

 SO ORDERED.

 Republic vs Celestina Naguiat (G.R. No. 134209, January 24, 2006): declassification of forest and mineral lands, as the case may be, and their conversion into alienable and disposable lands need an express and positive act from the government.

D E C I S I O N 

GARCIA, J.: Before the Court is this petition for review under Rule 45 of the Rules of Court seeking the

reversal of the Decision[1] dated May 29, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 37001 which affirmed an earlier decision[2] of the Regional Trial Court at Iba, Zambales, Branch 69 in Land Registration Case No. N-25-1.

 

The decision under review recites the factual backdrop, as follows:

 This is an application for registration of title to four (4) parcels of land located in Panan, Botolan,

Zambales, more particularly described in the amended application filed by Celestina Naguiat on 29 December 1989 with the Regional Trial Court of Zambales, Branch 69. Applicant [herein respondent] alleges, inter alia, that she is the owner of the said parcels of land having acquired them by purchase from the LID Corporation which likewise acquired the same from Demetria Calderon, Josefina Moraga and Fausto Monje and their predecessors-in-interest who have been in possession thereof for more than thirty (30) years; and  that to the best of her knowledge, said lots suffer no mortgage or encumbrance of whatever kind nor is there any person having any interest, legal or equitable, or in possession thereof.

 On 29 June 1990, the Republic of the Philippines [herein petitioner]. . . filed an opposition to the

application on the ground that neither the applicant nor her predecessors-in interest have been in open, continuous, exclusive and notorious possession and occupation of the lands in question since 12 June 1945 or prior thereto; that the muniments of title and tax payment receipts of applicant do not  constitute  competent and sufficient evidence of a bona-fide acquisition of the lands applied for or of his open, continuous, exclusive and notorious possession and occupation thereof  in the concept of (an) owner; that the  applicant’s claim of ownership in fee simple on the basis of  Spanish title or grant can no longer be availed of . . .; and that the  parcels of land applied for are part of the public domain belonging to the Republic of the Philippines not subject to private appropriation.

 On 15 October 1990, the lower court issued an order of general default as against the whole world,

with the exception of the Office of the Solicitor General, and proceeded with the hearing of this registration case.

 After she had presented and formally offered her evidence . . . applicant rested her case. The

Solicitor General, thru the Provincial Prosecutor, interposed no objection to the admission of the exhibits. Later . . . the Provincial Prosecutor manifest (sic) that the Government had no evidence to adduce. [3]  

 

 

 

In a decision[4] dated September 30, 1991, the trial court rendered judgment for herein

respondent Celestina Naguiat,  adjudicating unto her the parcels of land in question and decreeing the

registration thereof in her name, thus: 

WHEREFORE, premises considered, this Court hereby adjudicates the parcels of land situated in Panan, Botolan, Zambales, appearing on Plan AP-03-003447 containing an area of 3,131 square meters, appearing on Plan AP-03-003446 containing an area of 15,322  containing an area of 15,387 square meters to herein applicant Celestina T. Naguiat, of legal age, Filipino citizen, married to Rommel Naguiat and a resident of Angeles City, Pampanga together with all the improvements existing thereon and orders and decrees registration in her name in accordance with Act No. 496, Commonwealth Act No. 14, [should be 141] as amended, and Presidential Decree No. 1529. This adjudication, however, is subject to the various easements/reservations provided for under pertinent laws, presidential decrees and/or presidential letters of instructions which should be annotated/ projected on the title to be issued. And once this decision becomes final, let the corresponding decree of registration be immediately issued. (Words in bracket added) 

 

With its motion for reconsideration having been denied by the trial court, petitioner Republic

went on appeal to the CA in CA-G.R. CV No. 37001.

 

As stated at the outset hereof, the CA, in the herein assailed decision of May 29, 1998,

affirmed that of the trial court, to wit:

 WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED. SO ORDERED.    

 

Hence, the Republic’s present recourse on its basic submission that the CA’s decision “is not in

accordance with law, jurisprudence and the evidence, since respondent has not established with the

required evidence her title in fee simple or imperfect title in respect of the subject lots which would

warrant their registration under … (P.D. 1529 or Public Land Act (C.A.) 141.”  In

particular, petitioner Republic faults the appellate court on its finding respecting the length of

respondent’s occupation of the property subject of her application for registration and  for not

considering the fact that she has not established that the lands in question have been declassified

from forest or timber zone to alienable and disposable property. 

          Public forest lands or forest reserves, unless declassified and released by positive act of the

Government so that they may form part of the disposable agricultural lands of the public domain, are

not capable of private appropriation.[5] As to these assets, the rules on confirmation of imperfect title

do not apply.[6]  Given this postulate, the principal issue to be  addressed turns on the question of

whether or not the areas in question have ceased to have the status of forest or other inalienable

lands of the public domain.

 

        Forests,  in  the  context  of  both  the  Public Land Act[7] and the Constitution[8] classifying lands of

the public domain into “agricultural, forest or timber, mineral lands and national parks,” do not

necessarily refer to a large tract of wooded land or an expanse covered by dense growth of trees and

underbrush. As we stated in Heirs of Amunategui [9]-

         A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. “Forest lands” do not have to be on mountains or in out of the way places.  xxx. The classification is merely descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. xxx   

 

        Under Section 2, Article XII of the Constitution,[10] which embodies the Regalian doctrine, all lands

of the public domain belong to the State – the source of any asserted right to ownership of land. [11] All

lands not appearing to be clearly of private dominion presumptively belong to the State. [12] 

Accordingly, public lands not shown to have been reclassified or released  as alienable agricultural

land or alienated to a private person by the State remain part of the inalienable public domain. [13] 

Under Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands of the public

domain, i.e., from forest or mineral to agricultural and vice versa, belongs to the Executive Branch of

the government and not the court.[14] Needless to stress, the onus to overturn, by incontrovertible

evidence, the presumption that the land subject of an application for registration is alienable or

disposable rests with the applicant.[15]  

       

        In the present case, the CA assumed that the lands in question are already alienable and

disposable. Wrote the appellate court:

                         The theory of [petitioner] that the properties in question are lands of the public domain cannot be

sustained as it is directly against the above doctrine. Said doctrine is a reaffirmation of the principle established in the earlier cases . . . that open, exclusive and undisputed possession of alienable public land for period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite period, ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes private property …. (Word in bracket and underscoring added.)

 

        The principal reason for the appellate court’s disposition, finding a registerable title for

respondent, is her and her predecessor-in-interest’s open, continuous and exclusive occupation of the

subject property for more than 30 years. Prescinding from its above assumption and finding, the

appellate court went on to conclude, citing Director of Lands vs. Intermediate Appellate Court (IAC)

[16] and Herico vs. DAR,[17] among other cases, that, upon the completion of the requisite period of

possession, the  lands in question cease to be  public land and become private property.

 

        Director of Lands, Herico and the other cases cited by the CA are not, however, winning cards for

the  respondent,  for the simple reason that, in said cases, the disposable and alienable nature of the

land sought to be registered was established, or, at least, not put in issue. And there lies the

difference.

 

        Here, respondent never presented the required certification from the proper government agency

or official proclamation reclassifying the land applied for as alienable and disposable. Matters of land

classification or reclassification cannot be assumed. It calls for proof. [18]   Aside from tax receipts,

respondent submitted in evidence the survey map and technical descriptions of the lands, which,

needless to state, provided no information respecting the classification of the property. As the Court

has held, however, these documents are not sufficient to overcome the presumption that the land

sought to be registered forms part of the public domain.[19] 

 

        It cannot be overemphasized that unwarranted appropriation of public lands has been a notorious

practice resorted to in land registration cases.[20] For this reason, the Court has made it a point to

stress, when appropriate, that declassification of forest and mineral lands, as the case may be, and

their conversion into alienable and disposable lands need an express and positive act from the

government.[21] 

 

        The foregoing considered, the issue of whether or not respondent and her predecessor-in-interest

have been in open, exclusive and continuous possession of the parcels of land in question is now of

little moment. For, unclassified land, as here, cannot be acquired by adverse occupation or possession;

occupation thereof in the concept of owner, however long, cannot ripen into private ownership and be

registered as title.[22]  

WHEREFORE, the instant petition is GRANTED and the assailed decision dated May 29,

1998 of the Court of Appeals in CA-G.R. CV No. 37001 isREVERSED and SET ASIDE.  Accordingly,

respondent’s application for original registration of title in Land Registration Case No. N-25-1 of the

Regional Trial Court at Iba, Zambales, Branch 69, is DENIED.

No costs.

SO ORDERED.

Secretary of Environment & Natural Resources, et al. vs Mayor Jose S. Yap, et al. (G.R. No. 167707, October 8, 2008): Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest under PD No. 705. The DENR and the National Mapping and Resource Information Authority certify that Boracay Island is an unclassified land of the public domain.

ARE MANGROVE SWAMPS ALSO FOREST LANDS?

THE DIRECTOR OF FORESTRY, petitioner vs.RUPERTO A. VILLAREAL, respondent.

CRUZ, J.:

The basic question before the Court is the legal classification of mangrove swamps, or manglares, as they are commonly known. If they are part of our public forest lands, they are not alienable under the Constitution. If they are considered public agricultural lands, they may be acquired under private ownership. The private respondent's claim to the land in question must be judged by these criteria.

The said land consists of 178,113 square meters of mangrove swamps located in the municipality of Sapian, Capiz. Ruperto Villareal applied for its registration on January 25, 1949, alleging that he and his predecessors-in-interest had been in possession of the land for more than forty years. He was opposed by several persons, including the petitioner on behalf of the Republic of the Philippines. After trial, the application was approved by the Court of First Instance. of Capiz. 1 The decision was affirmed by the Court of Appeals. 2 The Director of Forestry then came to this Court in a petition for review on certiorari claiming that the land in dispute was forestal in nature and not subject to private appropriation. He asks that the registration be reversed.

It should be stressed at the outset that both the petitioner and the private respondent agree that the land is mangrove land. There is no dispute as to this. The bone of contention between the parties is the legal nature of mangrove swamps or manglares. The petitioner claims, it is forestal and therefore not disposable and the private respondent insists it is alienable as agricultural land. The issue before us is legal, not factual.

For a proper background of this case, we have to go back to the Philippine Bill of 1902, one of the earlier American organic acts in the country. By this law, lands of the public domain in the Philippine Islands were classified into three grand divisions, to wit, agricultural, mineral and timber or forest lands. This classification was maintained in the Constitution of the Commonwealth, promulgated in 1935, until it was superseded by the Constitution of 1973. That new charter expanded the classification of public lands to include industrial or commercial, residential, resettlement, and grazing lands and even permitted the legislature to provide for other categories. 3 This provision has been reproduced, but with substantial modifications, in the present Constitution. 4

Under the Commonwealth Constitution, which was the charter in force when this case arose, only agricultural lands were allowed to be alienated. 5 Their disposition was provided for under C.A. No. 141. Mineral and timber or forest lands were not subject to private ownership unless they were first reclassified as agricultural lands and so released for alienation.

In the leading case of Montano v. Insular Government, 6 promulgated in 1909, mangrove swamps or manglares were defined by the Court as:

... mud flats, alternately washed and exposed by the tide, in which grows various kindred plants which will not live except when watered by the sea, extending their roots deep into the mud and casting their seeds, which also germinate there. These constitute the mangrove flats of the tropics, which exist naturally, but which are also, to some extent cultivated by man for the sake of the combustible wood of the mangrove and like trees as well as for the useful nipa palm propagated thereon. Although these flats are literally tidal lands, yet we are of the opinion that they cannot be so regarded in the sense in which that term is used in the cases cited or in general American jurisprudence. The waters flowing over them are not available for purpose of navigation, and they may be disposed of without impairment of the public interest in what remains.

x x x

Under this uncertain and somewhat unsatisfactory condition of the law, the custom had grown of converting manglares and nipa lands into fisheries which became a common feature of settlement along the coast and at the same time of the change of sovereignty constituted one of the most productive industries of the Islands, the abrogation of which would destroy vested interests and prove a public disaster.

Mangrove swamps were thus considered agricultural lands and so susceptible of private ownership.

Subsequently, the Philippine Legislature categorically declared, despite the above-cited case, that mangrove swamps form part of the public forests of this country. This it did in the Administrative Code of 1917, which became effective on October 1 of that year, thus:

Section 1820. Words and phrase defined. - For the purpose of this chapter 'public forest' includes, except as otherwise specially indicated, all unreserved public land, including nipa and mangrove swamps, and all forest reserves of whatever character.

It is noteworthy, though, that notwithstanding this definition, the Court maintained the doctrine in the Montano case when two years later it held in the case of Jocson v. Director of Forestry: 7

...the words timber land are always translated in the Spanish translation of that Act (Act of Congress) as terrenos forestales. We think there is an error in this translation and that a better translation would be 'terrenos madereros.' Lumber land in English means land with trees growing on it. The mangler plant would never be called a tree in English but a bush, and land which has only bushes, shrubs or aquatic plants growing on it cannot be called 'timber land.

xxx xxx xxx

The fact that there are a few trees growing in a manglare or nipa swamps does not change the general character of the land from manglare to timber land.

More to the point, addressing itself directly to above-quoted Section 1820, the Court declared:

'In the case of Mapa vs. Insular Government (10 Phil. Rep., 175), this Court said that the phrase agricultural lands as used in Act No. 926 means those public lands acquired from Spain which are not timber or mineral lands.

Whatever may have been the meaning of the term 'forestry' under the Spanish law, the Act of Congress of July 1st 1902, classifies the public lands in the Philippine Islands as timber, mineral or agricultural lands, and all public lands that are not timber or mineral lands are necessarily agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm lands.

The definition of forestry as including manglares found in the Administrative Code of 1917 cannot affect rights which vested prior to its enactment.

These lands being neither timber nor mineral lands, the trial court should have considered them agricultural lands. If they are agricultural lands, then the rights of appellants are fully established by Act No. 926.

The doctrine was reiterated still later in Garchitorena Vda. de Centenera v. Obias, 8 promulgated on March 4, 1933, more than fifteen years after the effectivity of the Administrative Code of 1917. Justice Ostrand declared for a unanimous Court:

The opposition rests mainly upon the proposition that the land covered by the application there are mangrove lands as shown in his opponent's Exh. 1, but we think this opposition of the Director of Forestry is untenable, inasmuch as it has been definitely decided that mangrove lands are not forest lands in the sense in which this phrase is used in the Act of Congress.

No elaboration was made on this conclusion which was merely based on the cases of Montano and Jocson. And in 1977, the above ruling was reaffirmed in Tongson v. Director of Forestry, 9 with Justice Fernando declaring that the mangrove lands in litis were agricultural in nature. The decision even quoted with approval the statement of the trial court that:

... Mangrove swamps where only trees of mangrove species grow, where the trees are small and sparse, fit only for firewood purposes and the trees growing are not of commercial value as lumber

do not convert the land into public land. Such lands are not forest in character. They do not form part of the public domain.

Only last year, in Republic v. De Porkan, 10 the Court, citing Krivenko v. Register of Deeds, 11 reiterated the ruling in the Mapa case that "all public lands that are not timber or mineral lands are necessarily agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm lands.

But the problem is not all that simple. As it happens, there is also a line of decisions holding the contrary view.

In Yngson v. Secretary of Agriculture and Natural Resources, 12 promulgated in 1983, the Court ruled "that the Bureau of Fisheries has no jurisdiction to dispose of swamp lands or mangrove lands forming part of the public domain while such lands are still classified as forest lands.

Four months later, in Heirs of Amunategui v. Director of Forestry, 13 the Court was more positive when it held, again through Justice Gutierrez:

The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as forest land because it is not thickly forested but is a 'mangrove swamps.' Although conceding that 'mangrove swamp' is included in the classification of forest land in accordance with Section 1820 of the Revised Administrative Code, the petitioners argue that no big trees classified in Section 1821 of the said Code as first, second and third groups are found on the land in question. Furthermore, they contend that Lot 885, even if it is a mangrove swamp, is still subject to land registration proceedings because the property had been in actual possession of private persons for many years, and therefore, said land was already 'private land' better adapted and more valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest classification.

The petition is without merit.

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. 'Forested lands' do not have to be on mountains or in out-of-the-way places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classsified as 'forest' is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect titles do not apply.'

The view was maintained in Vallarta v. Intermediate Appellate Court, 14 where this Court agreed with the Solicitor General's submission that the land in dispute, which he described as "swamp mangrove or forestal land," were not private properties and so not registerable. This case was decided only twelve days after the De Porkan case.

Faced with these apparent contradictions, the Court feels there is a need for a categorical pronouncement that should resolve once and for all the question of whether mangrove swamps are agricultural lands or forest lands.

The determination of this question is a function initially belonging to the legislature, which has the authority to implement the constitutional provision classifying the lands of the public domain (and is now even permitted to provide for more categories of public lands). The legislature having made such implementation, the executive officials may then, in the discharge of their own role, administer our public lands pursuant to their constitutional duty " to ensure that the laws be faithfully executed' and in accordance with the policy prescribed. For their part, the courts will step into the picture if the rules laid down by the legislature are challenged or, assuming they are valid, it is claimed that they are not being correctly observed by the executive. Thus do the three departments, coordinating with each other, pursue and achieve the objectives of the Constitution in the conservation and utilization of our natural resources.

In C.A. No. 141, the National Assembly delegated to the President of the Philippines the function of making periodic classifications of public lands, thus:

Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time classify the lands of the public domain into:

(a) Alienable or disposable,

(b) Lumber, and

(c) Mineral lands,

and may at any time and in a like manner transfer such lands from one class to another, for the purposes of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or disposable lands, the President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition or concession under this Act.

With particular regard to alienable public lands, Section 9 of the same law provides:

For the purpose of their administration and disposition, the lands of the public domain alienable or open to disposition shall be classified, according to the use or purposes to which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.

The President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time make the classifications provided for in this section, and may, at any time and in a similar manner, transfer lands from one class to another.

As for timber or forest lands, the Revised Administrative Code states as follows:

Sec. 1826. Regulation setting apart forest reserves- Revocation of same. - Upon there commendation of the Director of Forestry, with the approval of the Department Head, the President of the Philippines may set apart forest reserves from the public lands and he shall by proclamation declare the establishment of such reserves and the boundaries thereof, and thereafter such forest reserves shall not be entered, sold, or otherwise disposed of, but shall remain as such for forest uses, and shall be administered in the same manner as public forest.

The President of the Philippines may in like manner by proclamation alter or modify the boundaries of any forest reserve from time to time, or revoke any such proclamation, and upon such revocation such forest reserve shall be and become part of the public lands as though such proclamation had never been made.

Sec. 1827. Assignment of forest land for agricultural purposes. - Lands in public forest, not including forest reserves, upon the certification of the Director of Forestry that said lands are better adapted and more valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest, shall be declared by the Department Head to be agricultural lands.

With these principles in mind, we reach the following conclusion:

Mangrove swamps or manglares should be understood as comprised within the public forests of the Philippines as defined in the aforecited Section 1820 of the Administrative Code of 1917. The legislature having so determined, we have no authority to ignore or modify its decision, and in effect veto it, in the exercise of our own discretion. The statutory definition remains unchanged to date and, no less noteworthy, is accepted and invoked by the executive department. More importantly, the said provision has not been challenged as arbitrary or unrealistic or unconstitutional assuming the requisite conditions, to justify our judicial intervention and scrutiny. The law is thus presumed valid and so must be respected. We repeat our statement in the Amunategui case that the classification of mangrove swamps as forest lands is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. That determination having been made and no cogent argument having been raised to annul it, we have no duty as judges but to apply it. And so we shall.

Our previous description of the term in question as pertaining to our agricultural lands should be understood as covering only those lands over which ownership had already vested before the Administrative Code of 1917 became effective. Such lands could not be retroactively legislated as forest lands because this would be violative of a duly acquired property right protected by the due process clause. So we ruled again only two months ago in Republic of the Philippines vs. Court of Appeals, 15 where the possession of the land in dispute commenced as early as 1909, before it was much later classified as timberland.

It follows from all this that the land under contention being admittedly a part of the mangrove swamps of Sapian, and for which a minor forest license had in fact been issued by the Bureau of Forestry from 1920 to 1950, it must be considered forest land. It could therefore not be the subject of the adverse possession and consequent ownership claimed by the private respondent in support of his application for registration. To be so, it had first to be released as forest land and reclassified as agricultural land pursuant to the certification the Director of Forestry may issue under Section 1827 of the Revised Administrative Code.

The private respondent invokes the survey plan of the mangrove swamps approved by the Director of Lands, 16to prove that the land is registerable. It should be plain, however, that the mere existence of such a plan would not have the effect of converting the mangrove swamps, as forest land, into agricultural land. Such approval is ineffectual because it is clearly in officious. The Director of Lands was not authorized to act in the premises. Under the aforecited law, it is the Director of Forestry who has the authority to determine whether forest land is more valuable for agricultural rather than forestry uses, as a basis for its declaration as agricultural land and release for private ownership.

Thus we held in the Yngson case:

It is elementary in the law governing the disposition of lands of the public domain that until timber or forest lands are released as disposable and alienable neither the Bureau of Lands nor the Bureau of Fisheries has authority to lease, grant, sell or otherwise dispose of these lands for homesteads, sales patents, leases for grazing or other purposes, fishpond leases and other modes of utilization.

The Bureau of Fisheries has no jurisdiction to administer and dispose of swamp lands or mangrove lands forming part of the public domain while such lands are still classified as forest land or timber land and not released for fishery or other purposes.

The same rule was echoed in the Vallarta case, thus:

It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registerable. The adverse possession which can be the basis of a grant of title in confirmation of imperfect title cases cannot commence until after the forest land has been declared alienable and disposable. Possession of forest land, no matter bow long cannot convert it into private property.'

We find in fact that even if the land in dispute were agricultural in nature, the proof the private respondent offers of prescriptive possession thereof is remarkably meager and of dubious persuasiveness. The record contains no convincing evidence of the existence of the informacion posesoria allegedly obtained by the original transferor of the property, let alone the fact that the conditions for acquiring title thereunder have been satisfied. Nowhere has it been shown that the informacion posesoria has been inscribed or registered in the registry of property and that the land

has been under the actual and adverse possession of the private respondent for twenty years as required by the Spanish Mortgage Law. 17 These matters are not presumed but must be established with definite proof, which is lacking in this case.

Significantly, the tax declarations made by the private respondent were practically the only basis used by the appellate court in sustaining his claim of possession over the land in question. Tax declarations are, of course, not sufficient to prove possession and much less vest ownership in favor of the declarant, as we have held in countless cases. 18

We hold, in sum, that the private respondent has not established his right to the registration of the subject land in his name. Accordingly, the petition must be granted.

It is reiterated for emphasis that, conformably to the legislative definition embodied in Section 1820 of the Revised Administrative Code of 1917, which remains unamended up to now, mangrove swamps or manglares form part of the public forests of the Philippines. As such, they are not alienable under the Constitution and may not be the subject of private ownership until and unless they are first released as forest land and classified as alienable agricultural land.

WHEREFORE, the decision of the Court of Appeals is SET ASIDE and the application for registration of title of private respondent is DISMISSED, with cost against him. This decision is immediately executory.

SO ORDERED.

THE STATE OWNS THE MINERALS UNDER TITLED AGRICULTURAL LANDS: the provisions of the Mining Law expressly declare that the ownership of land for other purposes does not include the minerals, and that mineral rights are not included in agricultural land patents.

MAXIMA NIETO DE COMILANG, petitioner-appellant, vs.ABDON DELENELA, GUILLERMO PEREZ, ET AL., respondents-appellees.

Bienvenido L. Garcia for petitioner-appellant.Daniel M. Zarate, Guillermo de Guzman, Roque E. Hebron and Celestino L. Luna for respondents-appellees.

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of Baguio, Hon. Jesus de Veyra, presiding, denying a petition of petitioner herein Maxima Nieto de Comilang to annul an order of the Municipal Judge of Baguio City dated August 12, 1959 directing the sheriff of Mountain Province to place Guillermo Perez and Abdon Delenela in possession of the property described as follows:

A parcel of residential land, situated at Tuding, Benguet, Mt. Province, containing an area of about one and a half (1-½ ha.) hectares, together with the residential house constructed thereon, made of strong materials, as well as all other improvements existing thereon, assessed at P10,000.00 under Tax Declaration No. 4771 in the name of Marcos B. Comilang.1äwphï1.ñët

The facts giving rise to the petition for certiorari filed in the lower court, as stated by the court below, are as follows:

The roots of this case go back as far as 1908 when Nicolas Comilang occupied the land as a mineral claim and staked out what is now known as the Bua Mineral Claim. Surface rights over this claim were the subject of litigation resulting in a final decision by the Court of Appeals, holding that Marcos Comilang only had the right to 1-½ hectares of this surface (See Decision, Exhibit "F"). Later on March 3, 1958 the ownership of the Bua Mineral Claim became the subject of litigation, resulting in a settlement whereby Marcos Comilang was awarded a one-half undivided share in this claim (See Exhibit "D"). However, on June 1, 1957, by virtue of a Certificate of Sale, whatever right, title, interest and claim, Marcos

Comilang might have over the land of 1-½ hectares declared for taxation in his name under Tax Declaration No. 4771, was sold at public auction to the Coloma spouses (Exhibit "E") and in turn, defendants Delenela and Perez, with the knowledge and conformity of Marcos Comilang, and in the exercise of their right of redemption as co-owners, bought from the Coloma spouses whatever rights, title, interest and claim they had obtained by virtue of the Certificate of Sale, Exhibit "E" (See Exhibit "5"). This redemption sale took place on June 11, 1958. On February 9, 1959, the director of Mines recommended the issuance of a lode patent over the Bua Mineral Claim in favor of Marcos Comilang and Delenela, et al. in undivided shares as a result of the amicable settlement in the decision, Exhibit "D" (See Exhibit "C"). On August 12, 1959, Respondent Municipal Judge issued a writ of possession in favor of Delenela and Perez directing the sheriff to evict the Comilang Spouses from the 1-½ hectares. A motion for reconsideration having been denied, Maxima Nieto de Comilang, wife of Marcos Comilang, has come to this Court in this present action for certiorari and injunction on two grounds — that as wife, conjugal property is being levied upon and her share of the same is affected, and secondly that there can be no severance of surface rights over a mineral claim located under the Philippine Bill of 1902 — so that the sheriff could not have sold surface rights in his certificate of sale, Exhibit "E" ...

The ownership of Marcos Comilang of 1-½ hectares of agricultural land was declared in the decision of the Court of Appeals promulgated October 29, 1955 (Exhibit "F"). On the other hand, the ownership of Marcos Comilang of the undivided ½ share of the Bua Mineral Claim was declared in a decision of the Court of First Instance of the City of Baguio, which approved an amicable settlement in Civil Case No. 735 of said court entitled "Marcoslina Comilang, et al. vs. Marcos Comilang" dated March 3, 1958 (Annex "B"). The certificate of sale dated June 1, 1957, Exhibit "E", describes the property sold in compliance with an execution issued by the municipal court of Baguio on December 21, as follows:

A parcel of residential land, situated at Tuding, Itogon, Benguet, Mountain Province, containing an area of about one and one-half (1-½ ha.) hectares, together with the residential house constructed thereon, made of strong materials, as well as all other improvements existing thereon, assessed at P10,000.00 under Tax Declaration No. 4771 in the name of Marcos B. Comilang; (Exhibit "E-1").

On August 12, 1957, the judge of the municipal court of Baguio City issued a writ of possession commanding the sheriff of Mountain Province to place Guillermo Perez and Abdon Delenela in possession of the residential land already described above, containing 1-½ hectares, together with a residential house constructed thereon, etc.

As stated by the lower court in its decision, the petitioner herein Maxima Nieto de Comilang claims that the property (residential land and house) sought to be placed in the possession of respondents Delenela and Perez is conjugal property of herself (Maxima Nieto de Comilang) and Marcos Comilang, and said conjugal property may not be taken from her, or her share therein can not be taken away without her consent.

The court below in its judgment made a finding of fact that the judgment "in favor of the Coloma spouses (by reason of which the writ of execution upon the property was issued) was a conjugal debt so that conjugal property must answer for the same — more so as this was conjugal property acquired prior to the effectivity of the New Civil Code." This finding of fact made in the decision of the court below can not be reviewed by Us as the decision was appealed directly to this Court, so that all findings of fact made by the trial court are deemed to have been admitted by the appellant and only questions of law may be raised. (Jacinto v. Jacinto, L-12313, July 31, 1959)

The judge further held that since the property executed was acquired prior to the effectivity of the New Civil Code, the wife, petitioner herein, cannot object to the disposal of the property by the husband, or the execution of the property in question by reason of the payment of a debt by the husband. (Art. 106, Civil Code of the Philippines)

We therefore find that the court's order overruling the objection of petitioner that as the property was conjugal property, the taking away thereof by execution and sale on execution, is well-founded and the request for a review of this ruling of the court below is hereby denied.

We next come to the effect of the sale on execution of the residential land over the mining claim of Marcos Comilang. In its decision the court below held as follows:

... Marcos Comilang, having submitted to the jurisdiction of our courts as to the surface rights over this mineral claim and by final judgment having been awarded 1-½ hectares of these surface rights, is now barred by res judicata. Marcos Comilang in consenting to the redemption by Delenela and Perez from the Coloma spouses (Exhibit "4"), is in estoppel by deed to raise up the question of severability of surface rights. But from the way this Court looks at the matter Marcos Comilang is in an even worse condition. By virtue of the amicable settlement in the decision Exhibit "D", on March 3, 1958, Marcos Comilang becamepro indiviso owner of the Bua Mineral Claim to the extent of one-half. When the Sheriff sold all his right, title and interest over the 1-½ hectares of land, this pro indiviso share was deemed to be part of that "right, title and interest" sold — so that Marcos Comilang, by virtue of that auction sale lost all his right, title and interest to his pro indiviso share in the Bua Mineral Claim. Having lost this right, following his own theory, he also loses all rights to the surface. From all angles of equity and law, therefore, Marcos Comilang has lost all right over the mineral claim as well as its surface.

We find the above ruling objectionable on two grounds: (1) that the certificate of the sale on execution, as well as the order of the court for a writ of possession, expressly included a residential land alone and not the mineral claim known as the Bua Mineral claim of nine hectares covered in part by the 1-½ hectares residential lot; and (2) there is no express or implied taking away of the said mineral rights or the mineral claim by virtue of the execution, nor is there any express act of Marcos Comilang supposedly consenting to the redemption by Delenela and Perez of the ownership of the mineral claim.

With respect to the first objection above-mentioned, it is to be noted that while the attachment included both the residential land as well as the mining claim in the said parcel of land (see Exhibit "E"), the only property actually sold at public auction as described in the certificate of sale, Exhibit "E", is the residential land containing an area of 1-½ hectares, together with the improvements existing thereon, without including the Bua Mineral Claim or the undivided one-half right thereto of Marcos Comilang (see Exhibit "E-1"). The mineral claim under the said residential land was therefore excluded from the certificate of sale and such mineral claim was excluded also by the order of the justice of the peace for the issuance of a writ of possession. No amount of reasoning can lead to the belief, therefore, that the express sale of the 1-½ hectare residential land could have included the ½ share of Marcos Comilang in the nine-hectare mineral claim.

As to the second objection, the court found that Marcos Comilang or his wife, petitioner herein, is barred from questioning that the mining claim was included because Comilang consented to the redemption of the land and its sale thereafter to the respondents herein. There was no actual or implied inclusion of the mining claim. The consent of Marcos Comilang to the repurchase did not extend to the mineral claim as may be shown by Exhibit "4". Said exhibit refers to an act of redemption and repurchase, and what could be redeemed was what was sold at public auction in execution and thereafter covered by the certificate of sale (Exhibit "2" and Exhibit "3"), both of which, including Exhibit "4", do not include the mining rights.

Aside from the fact that the mineral claim was not sold in execution, the provisions of the Mining Law expressly declare that the ownership of land for other purposes does not include the minerals, and that mineral rights are not included in agricultural land patents.

SEC. 4. The ownership and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.

SEC. 5. The ownership of, and the right to extract and utilize, the mineral included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents. (Com. Act 137)

Pursuant to the above provisions, the ownership over the Bua Mineral Claim by Marcos Comilang of ½ undivided share thereof was never included in the sale on execution or in the redemption of the land authorized by Marcos Comilang in Exhibit "4".

For the foregoing considerations the judgment appealed from is hereby affirmed insofar as it denies the petition of Maxima Nieto de Comilang to exclude from the sale, or annul the sale on execution of the residential lot formerly owned by her husband, of 1-½ hectares covered in the final certificate of sale; but that part of the appealed decision holding that such sale at public auction included the ½ undivided share of Marcos Comilang to the Bua Mineral Claim, is hereby set aside and said mineral rights of Marcos Comilang are hereby declared free from execution, or the sale on execution. Without costs. So ordered.

G.R. No. L-43938 April 15, 1988

REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner, vs.HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents. 

CRUZ, J.:

The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth even if the land where the discovery is made be private. 1 In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not correctly applied.

These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3

In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation. She testified she was born in the land, which was possessed by her parents under claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964. 7

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land. 8

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon. 9

The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902 which provided that:

SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and unsurveyed are hereby declared to be free and open to exploration, occupation and purchase and the land in which they are found to occupation and purchase by the citizens of the United States, or of said islands.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973. 10

The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered. 11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its own petition for review and reiterates its argument that neither the private respondents nor the two mining companies have any valid claim to the land because it is not alienable and registerable.

It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The Court of Appeals correctly declared that:

There is no question that the 9 lots applied for are within the June Bug mineral claims of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining locator. He filed his declaration of the location of the June Bug mineral and the same was recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the required affidavit of annual assessment. After World War II, Benguet introduced improvements on mineral claim June Bug, and also conducted geological mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for taxation and had religiously paid the taxes.

The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.

The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having been perfected prior to the approval of the Constitution of the Philippines of 1935, they were removed from the public domain and had become private properties of Benguet and Atok.

It is not disputed that the location of the mining claim under consideration was perfected prior to November 15, 1935, when the Government of the Commonwealth was inaugurated; and according to the laws existing at that time, as construed and applied by this court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the area from the public domain. Said the court in that case: The moment the locator discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be granted to any other person. The reservations of public lands cannot be made so as to include prior mineral perfected locations; and, of course, if a valid mining location is made upon public lands afterwards included in a reservation, such inclusion or reservation does not affect the validity of the former location. By such location and perfection, the land located is segregated from the public domain even as against the Government. (Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).

"The legal effect of a valid location of a mining claim is not only to segregate the area from the public domain, but to grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon compliance with the terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area becomes segregated from the public domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the effect of a grant by the United States of the right of present and exclusive possession, with the right to the exclusive enjoyment of all the surface ground as well as of all the minerals within the lines of the claim, except as limited by the extralateral right of adjoining locators; and this is the locator's right before as well as after the issuance of the patent. While a lode locator acquires a vested property right by virtue of his location made in compliance with the mining laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)

It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to secure a patent as long as he complies with the provisions of the mining laws; his possessory right, for all practical purposes of ownership, is as good as though secured by patent.

We agree likewise with the oppositors that having complied with all the requirements of the mining laws, the claims were removed from the public domain, and not even the government of the Philippines can take away this right from them. The reason is obvious. Having become the private properties of the oppositors, they cannot be deprived thereof without due process of law. 13

Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:

SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy and other natural resources of the Philipppines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the government established under this Constitution. Natural resources with the exception of public agricultural lands, shall not be alienated, and no license, concession, or lease for the exploitation, development or utilization of any of the natural resources shall be granted for a period exceeding 25 years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which case beneficial use may be the measure and the limit of the grant.

Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:

Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all locations of mining claim made prior to February 8, 1935 within lands set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which would be valid and subsisting location except to the existence of said reserve are hereby declared to be valid and subsisting locations as of the date of their respective locations.

The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. 14 By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the

purchase of the land or the obtention of a patent over it. 15 As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.

It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at bar, for two reasons.

First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the applicants was insufficient to support their claim of ownership. They themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave abuse of discretion or without sufficient basis. 17

Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the subject property, their possession was not in the concept of owner of the mining claim but of the property as agricultural land, which it was not. The property was mineral land, and they were claiming it as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining of the land. In fact, Balbalio testified that she was aware of the diggings being undertaken "down below" 18 but she did not mind, much less protest, the same although she claimed to be the owner of the said land.

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. 19 Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. 20 As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.

What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:

Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their disposition, exploitation, development or utilization, shall be limited to citizens of the Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of government established under the Constitution.

SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.

SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents.

SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all areas for which Torrens titles are granted are excluded and excepted from all such titles.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the

exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. 21

Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes.

WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.

SO ORDERED.

the provisions of the Mining Law expressly declare that the ownership of land for other purposes does not include the minerals, and that mineral rights are not included in agricultural land patents.Republic vs Court of Appeals (G.R. No. L-43938, April 15, 1988, 160 SCRA 228): rights over the land are indivisible and the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. // Once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein. For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings

MAY AN ALIEN OWN LAND IN THE PHILIPPINES?

Republic Vs. Register of Deeds Roxas City

D E C I S I O N CARPIO, J.: 

The Case           This is a petition for review[1] of the Decision[2] dated 12 July 2002 and the Resolution dated  9 May 2003  of the Court of Appeals in CA-G.R. CV No. 53890.   

The Facts                   In March 1936, Lee Liong, a Chinese citizen, bought Lot No. 398 from Vicenta Arcenas, Francisco, Carmen Ramon, Mercedes, Concepcion, Mariano, Jose, and Manuel, all surnamed Dinglasan. Lot No. 398, with an area of 1,574 square meters, is located at the corner of Roxas  Avenue and Pavia Street in Roxas City. In February 1944, Lee Liongdied intestate and was survived by his widow Ang Chia, and his sons Lee Bing Hoo and Lee Bun Ting.  On 30 June 1947, the surviving heirs of Lee Liong extrajudicially settled the estate of the deceased and partitioned among themselves Lot    No. 398. When Lee Bing Hoo and Lee Bun Ting died, Lot No. 398 was transferred by succession to their respective wives, Elizabeth Lee (Elizabeth) and Pacita Yu-Lee (Pacita).           In the 1956 case of Dinglasan v. Lee Bun Ting,[3] involving Lot        No. 398, the Court held that even if the sale of the property was null and void for violating the constitutional prohibition on the sale of land to an alien, still the doctrine of in pari delicto barred the sellers from recovering the title to the property.  Eleven years later, in the case of Lee Bun Ting v. Judge Aligaen,[4] the Court ordered the trial court to dismiss the complaint of the Dinglasans for the recovery of Lot No. 398. Applying the doctrine ofres judicata, the Court held that the case was a mere relitigation of the same issues previously adjudged with finality in the  Dinglasan case, involving the same parties or their privies and concerning the same subject matter.                   On 7 September 1993, Elizabeth and Pacita (private respondents) filed a petition for reconstitution of title of Lot No. 398 because the records of the Register of Deeds,Roxas City were burned during the war. On 3 October 2001, the Court held  that the

trial court’s order of reconstitution was void for lack of factual support because it was based merely on the plan and technical description approved by the Land Registration Authority.[5]

           Meanwhile, on 26 January 1995, petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor General (OSG), filed with the Regional Trial Court of Roxas City a Complaint[6] for Reversion of Title against private respondents and the Register of Deeds of Roxas City, praying that (1) the sale of Lot No. 398 to Lee Liong be set aside for being null and void ab initio; and (2) Lot No. 398 be reverted to the public domain for the State’s disposal in accordance with law.                   In their Answer, private respondents invoked as affirmative defenses: (1) prescription; (2) private ownership of Lot No. 398; and (3) Lee Liong’s being a buyer in good faith and for value.  Furthermore, private respondents claimed that as Filipino citizens, they are qualified to acquire Lot No. 398 by succession.                   The Register of Deeds of Roxas City did not file an answer.                            On 7 May 1996, the trial court rendered a decision ordering the reversion of Lot No. 398 to the State.           On appeal, the Court of Appeals rendered its Decision [7] dated 12 July 2002, reversing the trial court’s decision and declaring private respondents as the absolute and lawful owners of Lot No. 398. Petitioner moved for reconsideration, which the Court of Appeals denied in its Resolution[8] dated 9 May 2003.                   Hence, this petition for review.  

The Ruling of the Trial Court                   The trial court ordered the reversion of Lot No. 398 to the State.   The trial court held that private respondents could not have acquired a valid title over Lot No. 398 because the sale of the lot to their predecessor-in-interest Lee  Liong was null and void. Being an innocent purchaser in good faith and for value did not cure Lee  Liong’s disqualification as an alien who is prohibited from acquiring land under the Constitution. The trial court further held that prescription cannot be invoked against the State as regards an action for reversion or reconveyance of land to the State.                  

 The Ruling of the Court of Appeals

           The Court of Appeals  agreed with the trial court that the State is not barred by prescription. However, the Court of Appeals held that the trial court erred in ordering the reversion of Lot No. 398 to the State. Although the sale of Lot No. 398 to Lee Liong violated the constitutional prohibition on aliens acquiring land, the Court of Appeals noted that Lot No. 398 had already been acquired by private respondents through succession. The transfer of Lot No. 398 to private respondents, who are  Filipino citizens qualified to acquire lands, can no longer be impugned on the basis of the invalidity of the initial transfer. The flaw in the original transaction is considered cured and the title of the transferee is deemed valid considering that the objective of the constitutional proscription against alien ownership of lands, that is to keep our lands in Filipino hands, has been achieved. 

The Issue                   Petitioner raises the lone issue that:         

            THE COURT OF APPEALS GRAVELY ERRED WHEN IT REVERSED AND SET ASIDE THE APPEALED DECISION AND DECLARED PRIVATE RESPONDENTS THE ABSOLUTE AND LAWFUL OWNERS AND POSSESSORS OF LOT NO. 398 OF ROXAS CITY CADASTRE CONSIDERING THAT LEE LIONG, WHO IS AN ALIEN, AND THUS, CONSTITUTIONALLY PROHIBITED TO OWN REAL PROPERTY IN THE PHILIPPINES, ACQUIRED NO RIGHT OR TITLE OVER SUBJECT LOT WHICH HE COULD HAVE TRANSMITTED BY SUCCESSION TO PRIVATE RESPONDENTS’ PREDECESSORS-IN-INTEREST. 

 The Ruling of the Court

           The petition is without merit. 

          Petitioner argues that since the sale of Lot No. 398 to Lee Liong was void, Lot No. 398 never became part of the deceased Lee Liong’s estate. Hence, Lot No. 398 could not be transmitted by succession to Lee Liong’s surviving heirs and eventually to private respondents.                   We do not subscribe to petitioner’s position.          The circumstances of this case are similar to the case of De Castro v. Teng Queen Tan,[9] wherein a residential lot was sold to a Chinese citizen. Upon the death of the alien vendee, his heirs entered into an extrajudicial settlement of the estate of the deceased and the subject land was transferred to a son who was a naturalized Filipino. Subsequently, the vendor of the lot filed a suit for annulment of sale for alleged violation of the Constitution prohibiting the sale of land to aliens. Independently of the doctrine of in pari delicto, the Court sustained the sale, holding that while the vendee was an alien at the time of the sale, the land has since become the property of a naturalized Filipino citizen who is constitutionally qualified to own land.           Similarly, in this case, upon the death of the original vendee who was a Chinese citizen, his widow and two sons extrajudicially settled his estate, including Lot No. 398. When the two sons died, Lot No. 398 was transferred by succession to their respective spouses, herein private respondents who are Filipino citizens.           We now discuss whether reversion proceedings is still viable considering that Lot No. 398 has already been transfered to Filipino citizens.  In the reconstitution case of Lee v. Republic of the Philippines[10] involving Lot No. 398, this Court explained that the OSG may initiate an action        for reversion or escheat of lands which were sold to aliens disqualified from acquiring lands under the Constitution. However, in the case of Lot No. 398, the fact that it was already transferred to Filipinos militates against escheat proceedings, thus: 

            Although ownership of the land cannot revert to the original sellers, because of the doctrine of pari delicto, the Solicitor General may initiate an action for reversion or escheat of the land to the State, subject to other defenses, as hereafter set forth.             In this case, subsequent circumstances militate against escheat proceedings because the land is now in the hands of Filipinos. The original vendee, Lee Liong, has since died and the land has been inherited by his heirs and subsequently their heirs, petitioners herein [Elizabeth Lee and Pacita Yu Lee]. Petitioners are Filipino citizens, a fact the Solicitor General does not dispute.             The constitutional proscription on alien ownership of lands of the public or private domain was intended to protect lands from falling in the hands of non-Filipinos. In this case, however, there would be no more public policy violated since the land is in the hands of Filipinos qualified to acquire and own such land. “If land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.” Thus, the subsequent transfer of the property to qualified Filipinos may no longer be impugned on the basis of invalidity of the initial transfer. The objective of the constitutional provision to keep our lands in Filipino hands has been achieved.[11] (Emphasis supplied) 

           In this case, the reversion proceedings was initiated only after almost 40 years from the promulgation of the case of Dinglasan v. Lee Bun Ting,[12] where the Court held that the sale of Lot No. 398 was null and void for violating the constitutional prohibition on the sale of land to an alien.  If petitioner had commenced reversion proceedings when Lot No. 398 was still in the hands of the original vendee who was an alien disqualified to hold title thereto, then reversion of the land to the State would undoubtedly be allowed. However, this is not the case here. When petitioner instituted the action for reversion of title in 1995, Lot No. 398 had already been transferred by succession to private respondents who are Filipino citizens.                   Since Lot No. 398 has already been transferred to Filipino citizens,  the flaw in the original transaction is considered cured.[13]  As held in Chavez v. Public Estates Authority:[14]

 

            Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a citizen. Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the sale was validated since the purpose of the constitutional ban to limit land ownership to Filipinos has been achieved. In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a qualified party.[15] (Emphasis supplied)

                    Clearly, since Lot No. 398 has already been transferred to private respondents who are Filipino citizens, the prior invalid sale to  Lee Liong can no longer be assailed. Hence, reversion proceedings will no longer prosper since the land is now in the hands of Filipino citizens.

           WHEREFORE, we DENY the petition. We AFFIRM  the Decision dated 12 July 2002 and the Resolution dated  9 May 2003  of the Court of Appeals in CA-G.R. CV No. 53890.            SO ORDERED.

 

If land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid

G.R. No. 149615 August 29, 2006IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA MULLER, Petitioner,vs.HELMUT MULLER, Respondent.

D E C I S I O NYNARES-SANTIAGO, J.:This petition for review on certiorari 1 assails the February 26, 2001 Decision 2 of the Court of Appeals in CA-G.R. CV No. 59321 affirming with modification the August 12, 1996 Decision 3 of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which terminated the regime of absolute community of property between petitioner and respondent, as well as the Resolution 4 dated August 13, 2001 denying the motion for reconsideration.The facts are as follows:Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany on September 22, 1989. The couple resided in Germany at a house owned by respondent’s parents but decided to move and reside permanently in the Philippines in 1992. By this time, respondent had inherited the house in Germany from his parents which he sold and used the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the construction of a house amounting to P2,300,000.00. The Antipolo property was registered in the name of petitioner under Transfer Certificate of Title No. 219438 5 of the Register of Deeds of Marikina, Metro Manila.Due to incompatibilities and respondent’s alleged womanizing, drinking, and maltreatment, the spouses eventually separated. On September 26, 1994, respondent filed a petition 6 for separation of properties before the Regional Trial Court of Quezon City.On August 12, 1996, the trial court rendered a decision which terminated the regime of absolute community of property between the petitioner and respondent. It also decreed the separation of properties between them and ordered the equal partition of personal properties located within the country, excluding those acquired by gratuitous title during the marriage. With regard to the Antipolo property, the court held that it was acquired using paraphernal funds of the respondent. However, it ruled that respondent cannot recover his funds because the property was purchased in violation of Section 7, Article XII of the Constitution. Thus –However, pursuant to Article 92 of the Family Code, properties acquired by gratuitous title by either spouse during the marriage shall be excluded from the community property. The real property, therefore, inherited by petitioner in Germany is excluded from the absolute community of property of the herein spouses. Necessarily, the proceeds of the sale of said real property as well as the personal properties purchased thereby, belong exclusively to the petitioner. However, the part of that inheritance used by the petitioner for acquiring the house and lot in this country cannot be recovered by the petitioner, its acquisition being a violation of Section 7, Article XII of the Constitution which provides that "save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain." The law will leave the parties in the situation where they are in without prejudice to a voluntary partition by the parties of the said real property. x x xx x x xAs regards the property covered by Transfer Certificate of Title No. 219438 of the Registry of Deeds of Marikina, Metro Manila, situated in Antipolo, Rizal and the improvements thereon, the Court shall not make any pronouncement on constitutional grounds. 7

Respondent appealed to the Court of Appeals which rendered the assailed decision modifying the trial court’s Decision. It held that respondent merely prayed for reimbursement for the purchase of the Antipolo property, and not acquisition or transfer of ownership to him. It also considered petitioner’s ownership over the property in trust for the respondent. As regards the house, the Court of Appeals ruled that there is nothing in the Constitution which prohibits respondent from acquiring the same. The dispositive portion of the assailed decision reads:WHEREFORE, in view of the foregoing, the Decision of the lower court dated August 12, 1996 is hereby MODIFIED. Respondent Elena Buenaventura Muller is hereby ordered to REIMBURSE the petitioner the amount of P528,000.00 for the acquisition of the land and the amount of P2,300,000.00 for the construction of the house situated in Atnipolo, Rizal, deducting therefrom the amount respondent spent for the preservation, maintenance and development of the aforesaid real property including the depreciation cost of the house or in the alternative to SELL the house and lot in the event respondent does not have the means to reimburse the petitioner out of her own money and from the proceeds thereof, reimburse the petitioner of the cost of the land and the house deducting the expenses for its maintenance and preservation spent by the respondent. Should there be profit, the same shall be divided in proportion to the equity each has over the property. The case is REMANDED to the lower court for reception of evidence as to the amount claimed by the respondents for the preservation and maintenance of the property.SO ORDERED. 8

Hence, the instant petition for review raising the following issues:I

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN ACT DONE WHICH OTHERWISE COULD NOT BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN THE PHILIPPINES.

IITHE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING RESPONDENT’S CAUSE OF ACTION WHICH IS ACTUALLY A DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT IN QUESTION, CLOTHED UNDER THE GUISE OF CLAIMING REIMBURSEMENT.Petitioner contends that respondent, being an alien, is disqualified to own private lands in the Philippines; that respondent was aware of the constitutional prohibition but circumvented the same; and that respondent’s purpose for filing an action for separation of property is to obtain exclusive possession, control and disposition of the Antipolo property.Respondent claims that he is not praying for transfer of ownership of the Antipolo property but merely reimbursement; that the funds paid by him for the said property were in consideration of his marriage to petitioner; that the funds were given to petitioner in trust; and that equity demands that respondent should be reimbursed of his personal funds.The issue for resolution is whether respondent is entitled to reimbursement of the funds used for the acquisition of the Antipolo property.The petition has merit.Section 7, Article XII of the 1987 Constitution states:Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence, they are also disqualified from acquiring private lands. 9 The primary purpose of the constitutional provision is the conservation of the national patrimony. In the case of Krivenko v. Register of Deeds, 10 the Court held:Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall not be alienated," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:"Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines."This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens’ hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x xx x x xIf the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant’s words, strictly agricultural." (Solicitor General’s Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.Respondent was aware of the constitutional prohibition and expressly admitted his knowledge thereof to this Court. 11 He declared that he had the Antipolo property titled in the name of petitioner because of the said prohibition. 12 His attempt at subsequently asserting or claiming a right on the said property cannot be sustained.The Court of Appeals erred in holding that an implied trust was created and resulted by operation of law in view of petitioner’s marriage to respondent. Save for the exception provided in cases of hereditary succession, respondent’s disqualification from owning lands in the Philippines is absolute. Not even an ownership in trust is allowed. Besides, where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud. 13 To hold otherwise would allow circumvention of the constitutional prohibition.Invoking the principle that a court is not only a court of law but also a court of equity, is likewise misplaced. It has been held that equity as a rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done directly. 14 He who seeks equity must do equity, and he who comes into equity must come with clean hands. The latter is a frequently stated maxim which is also expressed in the principle that he who has done inequity shall not have equity. It signifies that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in issue. 15

Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the constitutional prohibition.Further, the distinction made between transfer of ownership as opposed to recovery of funds is a futile exercise on respondent’s part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus, it is likewise proscribed by law. As expressly held in Cheesman v. Intermediate Appellate Court: 16

Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain." Petitioner Thomas Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming that it was his intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him was null and void. In any event, he had and has no capacity or personality to question the subsequent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative of a husband in respect of conjugal property. To sustain such a theory would permit indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord to the alien husband a

not insubstantial interest and right over land, as he would then have a decisive vote as to its transfer or disposition. This is a right that the Constitution does not permit him to have.As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, at this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used conjugal funds to make the acquisition, the considerations just set out to militate, on high constitutional grounds, against his recovering and holding the property so acquired, or any part thereof. And whether in such an event, he may recover from his wife any share of the money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal funds is not now inquired into; that would be, in the premises, a purely academic exercise. (Emphasis added)WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The Decision dated February 26, 2001 of the Court of Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to reimburse respondent Helmut Muller the amount of P528,000 for the acquisition of the land and the amount of P2,300,000 for the construction of the house in Antipolo City, and the Resolution dated August 13, 2001 denying reconsideration thereof, are REVERSED and SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862 terminating the regime of absolute community between the petitioner and respondent, decreeing a separation of property between them and ordering the partition of the personal properties located in the Philippines equally, is REINSTATED.SO ORDERED.

Philip Matthews vs Benjamin A. Taylor and Joselyn C. Taylor

DECISION 

NACHURA, J.:                            

   

           Assailed in this petition for review on certiorari are the Court of Appeals (CA) December 19, 2003 Decision[1] and July 14, 2004 Resolution[2] in CA-G.R. CV No. 59573.  The assailed decision affirmed and upheld the June 30, 1997 Decision[3] of the Regional Trial Court (RTC), Branch 8, Kalibo, Aklan in Civil Case No. 4632 forDeclaration of Nullity of Agreement of Lease with Damages.           On June 30, 1988, respondent Benjamin A. Taylor (Benjamin), a British subject, married Joselyn C. Taylor (Joselyn), a 17-year old Filipina.[4]  On June 9, 1989, while their marriage was subsisting, Joselyn bought from Diosa M. Martin a 1,294 square-meter lot (Boracay property) situated at Manoc-Manoc, Boracay Island, Malay, Aklan, for and in consideration of P129,000.00.[5]  The sale was allegedly financed by Benjamin.[6]  Joselyn and Benjamin, also using the latter’s funds, constructed improvements thereon and eventually converted the property to a vacation and tourist resort known as the Admiral Ben Bow Inn.[7] All required permits and licenses for the operation of the resort were obtained in the name of Ginna Celestino, Joselyn’s sister.[8]            However, Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen. On June 8, 1992, Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin, authorizing the latter to maintain, sell, lease, and sub-lease and otherwise enter into contract with third parties with respect to their Boracay property.[9]

           On July 20, 1992, Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an Agreement of Lease[10] (Agreement) involving the Boracay property for a period of 25 years, with an annual rental of P12,000.00.  The agreement was signed by the parties and executed before a Notary Public. Petitioner thereafter took possession of the property and renamed the resort as Music Garden Resort.            Claiming that the Agreement was null and void since it was entered into by Joselyn without his (Benjamin’s) consent, Benjamin instituted an action for Declaration of Nullity of Agreement of Lease with Damages[11] against Joselyn and the petitioner.  Benjamin claimed that his funds were used in the acquisition and improvement of the Boracay property, and coupled with the fact that he was Joselyn’s husband, any transaction involving said property required his consent. 

          No Answer was filed, hence, the RTC declared Joselyn and the petitioner in defeault.  On March 14, 1994, the RTC rendered judgment by default declaring the Agreement null and void. [12]  The decision was, however, set aside by the CA in CA-G.R. SP No. 34054. [13]  The CA also ordered the RTC to allow the petitioner to file his Answer, and to conduct further proceedings.           In his Answer,[14] petitioner claimed good faith in transacting with Joselyn.  Since Joselyn appeared to be the owner of the Boracay property, he found it unnecessary to obtain the consent of Benjamin.  Moreover, as appearing in the Agreement, Benjamin signed as a witness to the contract, indicating his knowledge of the transaction and, impliedly, his conformity to the agreement entered into by his wife.  Benjamin was, therefore, estopped from questioning the validity of the Agreement.           There being no amicable settlement during the pre-trial, trial on the merits ensued.           On June 30, 1997, the RTC disposed of the case in this manner: 

          WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants as follows: 

1.      The Agreement of Lease dated July 20, 1992 consisting of eight (8) pages (Exhibits “T”, “T-1”, “T-2”, “T-3”, “T-4”, “T-5”, “T-6” and “T-7”) entered into by and between Joselyn C. Taylor and Philip Matthews before Notary Public Lenito T. Serrano under Doc. No. 390, Page 79, Book I, Series of 1992 is hereby declared NULL and VOID;

 2.      Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum

of SIXTEEN THOUSAND (P16,000.00) PESOS as damages representing unrealized income for the residential building and cottages computed monthly from July 1992 up to the time the property in question is restored to plaintiff; and

  3.      Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum

of TWENTY THOUSAND (P20,000.00) PESOS, Philippine Currency, for attorney’s fees and other incidental expenses.

 SO ORDERED.[15]    

           The RTC considered the Boracay property as community property of Benjamin and Joselyn; thus, the consent of the spouses was necessary to validate any contract involving the property.   Benjamin’s right over the Boracay property was bolstered by the court’s findings that the property was purchased and improved through funds provided by Benjamin. Although the Agreement was evidenced by a public document, the trial court refused to consider the alleged participation of Benjamin in the questioned transaction primarily because his signature appeared only on the last page of the document and not on every page thereof.           On appeal to the CA, petitioner still failed to obtain a favorable decision.  In its December 19, 2003 Decision,[16] the CA affirmed the conclusions made by the RTC.  The appellate court was of the view that if, indeed, Benjamin was a willing participant in the questioned transaction, the parties to the Agreement should have used the phrase “with my consent” instead of “signed in the presence of.”   The CA noted that Joselyn already prepared an SPA in favor of Benjamin involving the Boracay property; it was therefore unnecessary for Joselyn to participate in the execution of the Agreement.   Taken together,

these circumstances yielded the inevitable conclusion that the contract was null and void having been entered into by Joselyn without the consent of Benjamin.           Aggrieved, petitioner now comes before this Court in this petition for review on certiorari based on the following grounds:     

             4.1. THE MARITAL CONSENT OF RESPONDENT BENJAMIN TAYLOR IS NOT REQUIRED IN THE AGREEMENT OF LEASE DATED 20 JULY 1992.  GRANTINGARGUENDO THAT HIS CONSENT IS REQUIRED, BENJAMIN TAYLOR IS DEEMED TO HAVE GIVEN HIS CONSENT WHEN HE AFFIXED HIS SIGNATURE IN THE AGREEMENT OF LEASE AS WITNESS IN THE LIGHT OF THE RULING OF THE SUPREME COURT IN THE CASE OF SPOUSES PELAYO VS. MELKI PEREZ, G.R. NO. 141323,JUNE 8, 2005.             4.2. THE PARCEL OF LAND SUBJECT OF THE AGREEMENT OF LEASE IS THE EXCLUSIVE PROPERTY OF JOCELYN C. TAYLOR, A FILIPINO CITIZEN, IN THE LIGHT OF CHEESMAN VS. IAC, G.R. NO. 74833, JANUARY 21, 1991.             4.3. THE COURTS A QUO ERRONEOUSLY APPLIED ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES WHICH IS A PROVISION REFERRING TO THE ABSOLUTE COMMUNITY OF PROPERTY.  THE PROPERTY REGIME GOVERNING THE PROPERTY RELATIONS OF BENJAMIN TAYLOR AND JOSELYN TAYLOR IS THE CONJUGAL PARTNERSHIP OF GAINS BECAUSE THEY WERE MARRIED ON 30 JUNE 1988 WHICH IS PRIOR TO THE EFFECTIVITY OF THE FAMILY CODE.  ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES FINDS NO APPLICATION IN THIS CASE.             4.4. THE HONORABLE COURT OF APPEALS IGNORED THE PRESUMPTION OF REGULARITY IN THE EXECUTION OF NOTARIAL DOCUMENTS.              4.5. THE HONORABLE COURT OF APPEALS FAILED TO PASS UPON THE COUNTERCLAIM OF PETITIONER DESPITE THE FACT THAT IT WAS NOT CONTESTED AND DESPITE THE PRESENTATION OF EVIDENCE ESTABLISHING SAID CLAIM.[17]

           The petition is impressed with merit.           In fine, we are called upon to determine the validity of an Agreement of Lease of a parcel of land entered into by a Filipino wife without the consent of her British husband.  In addressing the matter before us, we are confronted not only with civil law or conflicts of law issues, but more importantly, with a constitutional question.           It is undisputed that Joselyn acquired the Boracay property in 1989.  Said acquisition was evidenced by a Deed of Sale with Joselyn as the vendee.  The property was also declared for taxation purposes under her name.  When Joselyn leased the property to petitioner, Benjamin sought the nullification of the contract on two grounds: first, that he was the actual owner of the property since he provided the funds used in purchasing the same; and second, that Joselyn could not enter into a valid contract involving the subject property without his consent.  

          The trial and appellate courts both focused on the property relations of petitioner and respondent in light of the Civil Code and Family Code provisions.  They, however, failed to observe the applicable constitutional principles, which, in fact, are the more decisive.             Section 7, Article XII of the 1987 Constitution states:[18]      

          Section 7.  Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. 

           Aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public domain.  Hence, by virtue of the aforecited constitutional provision, they are also disqualified from acquiring private lands.[19] The primary purpose of this constitutional provision is the conservation of the national patrimony.[20]  Our fundamental law cannot be any clearer.  The right to acquire lands of the public domain is reserved only to Filipino citizens or corporations at least sixty percent of the capital of which is owned by Filipinos.[21]

           In Krivenko v. Register of Deeds,[22] cited in Muller v. Muller,[23] we had the occasion to explain the constitutional prohibition: 

Under Section 1 of Article XIII of the Constitution, “natural resources, with the exception of public agricultural land, shall not be alienated,” and with respect to public agricultural lands, their alienation is limited to Filipino citizens.  But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens.  It is partly to prevent this result that Section 5 is included in Article XIII, and it reads as follows:

 “Section 5. Save in cases of hereditary succession, no private agricultural land

will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.”

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into alien’s hands.  It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x x

 x x x x If the term “private agricultural lands” is to be construed as not including

residential lots or lands not strictly agricultural, the result would be that “aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities,” and that “they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant’s words, strictly agricultural.” (Solicitor General’s Brief, p. 6) That this is obnoxious to the conservative spirit of the Constitution is beyond question.[24]    

           The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines, save only in constitutionally recognized exceptions.[25] There is no rule more settled

than this constitutional prohibition, as more and more aliens attempt to circumvent the provision by trying to own lands through another.  In a long line of cases, we have settled issues that directly or indirectly involve the above constitutional provision.  We had cases where aliens wanted that a particular property be declared as part of their father’s estate;[26] that they be reimbursed the funds used in purchasing a property titled in the name of another;[27] that an implied trust be declared in their (aliens’) favor; [28] and that a contract of sale be nullified for their lack of consent.[29]

           In Ting Ho, Jr. v. Teng Gui,[30] Felix Ting Ho, a Chinese citizen, acquired a parcel of land, together with the improvements thereon.  Upon his death, his heirs (the petitioners therein) claimed the properties as part of the estate of their deceased father, and sought the partition of said properties among themselves.  We, however, excluded the land and improvements thereon from the estate of Felix Ting Ho, precisely because he never became the owner thereof in light of the above-mentioned constitutional prohibition.           In Muller v. Muller,[31] petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Germany.  During the subsistence of their marriage, respondent purchased a parcel of land in Antipolo City and constructed a house thereon.  The Antipolo property was registered in the name of the petitioner.  They eventually separated, prompting the respondent to file a petition for separation of property.  Specifically, respondent prayed for reimbursement of the funds he paid for the acquisition of said property.  In deciding the case in favor of the petitioner, the Court held that respondent was aware that as an alien, he was prohibited from owning a parcel of land situated in thePhilippines. He had,   in fact, declared that when the spouses acquired the Antipolo property, he had it titled in the name of the petitioner because of said prohibition.  Hence, we denied his attempt at subsequently asserting a right to the said property in the form of a claim for reimbursement. Neither did the Court declare that an implied trust was created by operation of law in view of petitioner’s marriage to respondent.   We said that to rule otherwise would permit circumvention of the constitutional prohibition.             In Frenzel v. Catito,[32] petitioner, an Australian citizen, was married to Teresita Santos; while respondent, a Filipina, was married to Klaus Muller.  Petitioner and respondent met and later cohabited in a common-law relationship, during which petitioner acquired real properties; and since he was disqualified from owning lands in thePhilippines, respondent’s name appeared as the vendee in the deeds of sale.  When their relationship turned sour, petitioner filed an action for the recovery of the real properties registered in the name of respondent, claiming that he was the real owner.  Again, as in the other cases, the Court refused to declare petitioner as the owner mainly because of the constitutional prohibition.  The Court added that being a party to an illegal contract, he could not come to court and ask to have his illegal objective carried out.  One who loses his money or property by knowingly engaging in an illegal contract may not maintain an action for his losses.                     Finally, in Cheesman v. Intermediate Appellate Court,[33] petitioner (an American citizen) and Criselda Cheesman acquired a parcel of land that was later registered in the latter’s name.  Criselda subsequently sold the land to a third person without the knowledge of the petitioner.  The petitioner then sought the nullification of the sale as he did not give his consent thereto.  The Court held that assuming that it was his (petitioner’s) intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the Constitution; thus, the sale as to him was null and void.            

In light of the foregoing jurisprudence, we find and so hold that Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner.  Benjamin, being an alien, is absolutely

prohibited from acquiring private and public lands in the Philippines.  Considering that Joselyn appeared to be the designated “vendee” in the Deed of Sale of said property, she acquired sole ownership thereto.  This is true even if we sustain Benjamin’s claim that he provided the funds for such acquisition. By entering into such contract knowing that it was illegal, no implied trust was created in his favor; no reimbursement for his expenses can be allowed; and no declaration can be made that the subject property was part of the conjugal/community property of the spouses.   In any event, he had and has no capacity or personality to question the subsequent lease of the Boracay property by his wife on the theory that in so doing, he was merely exercising the prerogative of a husband in respect of conjugal property.   To sustain such a theory would countenance indirect controversion of the constitutional prohibition.  If the property were to be declared conjugal, this would accord the alien husband a substantial interest and right over the land, as he would then have a decisive vote as to its transfer or disposition.  This is a right that the Constitution does not permit him to have.[34]

           In fine, the Agreement of Lease entered into between Joselyn and petitioner cannot be nullified on the grounds advanced by Benjamin.  Thus, we uphold its validity.  

With the foregoing disquisition, we find it unnecessary to address the other issues raised by the petitioner.         

WHEREFORE, premises considered, the December 19, 2003 Decision and July 14, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59573, areREVERSED and SET ASIDE and a new one is entered DISMISSING the complaint against petitioner Philip Matthews.

 SO ORDERED.