Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION

DR. DIOSCORO CARBONILLA,

Petitioner,

G.R. No. 177637

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

MARCELO ABIERA and MARICRIS

ABIERA PAREDES, SUBSTITUTED
BY HER HEIRS,
Respondents.

Promulgated:
July 26, 2010

x--------------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Assailed in this petition for review are the Decision [1] of the Court of
Appeals (CA) dated September 18, 2006 and the Resolution dated April 17, 2007,
which dismissed petitioners complaint for ejectment against respondents.

The case arose from the following antecedents:

Petitioner, Dr. Dioscoro Carbonilla, filed a complaint for ejectment against
respondents, Marcelo Abiera and Maricris Abiera Paredes, with the Municipal Trial
Court in Cities (MTCC), Maasin City. The complaint alleged that petitioner is the
registered owner of a parcel of land, located in Barangay Canturing, Maasin City,
identified as Lot No. 1781-B-P-3-B-2-B PSD-08-8452-D, Maasin Cadastre. The
land is purportedly covered by a certificate of title, and declared for assessment
and taxation purposes in petitioners name. Petitioner further claimed that he is also
the owner of the residential building standing on the land, which building he
acquired through a Deed of Extrajudicial Settlement of Estate
(Residential Building) with Waiver and Quitclaim of Ownership. He maintained
that the building was being occupied by respondents by mere tolerance of the
previous owners. Petitioner asserted that he intends to use the property as his
residence, thus, he sent a demand letter to respondents asking them to leave the
premises within 15 days from receipt of the letter, but they failed and refused to do
so. Conciliation efforts with the Barangay proved futile.[2]
To corroborate his claim, petitioner presented copies of Transfer Certificate
of Title (TCT) No. T-3784; Deed of Extrajudicial Settlement of Estate (Residential
Building) with Waiver and Quitclaim of Ownership dated November 10, 2002,
executed by the heirs of Jovita Yanto Garciano; Tax Declaration (TD) with ARP
No. 07020-000019; and Demand Letter dated November 20, 2002. TCT No. T3784 shows that the land was originally registered on January 30, 1968 in the name
of Diosdado Carbonilla, petitioners father, under Original Certificate of Title No.
185.
In their defense, respondents vehemently denied petitioners allegation that
they possessed the building by mere tolerance of the previous owners. Instead, they
asserted that they occupied the building as owners, having inherited the same from
Alfredo Abiera and Teodorica Capistrano, respondent Marcelos parents and
respondent Maricris grandparents. They maintained that they have been in
possession of the building since 1960, but it has not been declared for taxation
purposes. As for the subject land, respondents claimed that they inherited the same
from Francisco Plasabas, grandfather of Alfredo Abiera. They pointed out that the
land had, in fact, been declared for taxation purposes in the name of Francisco

Plasabas under TD No. 4676, before the Second World War. This TD was later
cancelled by TD No. 8735 in 1948, TD No. 14363 in 1958, and TD No. 16182 in
1963. Respondents averred that the building was previously a garage-like structure
but, in 1977, Alfredo Abiera and Teodorica Capistrano repaired and remodeled it,
for which reason, they obtained a building permit on April 11, 1977 from the then
Municipality of Maasin. Finally, respondents contended that the case should be
dismissed for failure to implead as defendants respondent Marcelos siblings, who
are co-heirs of the subject properties.[3] Respondents presented copies of the two
TDs in the name of Francisco Plasabas and the Building Permit dated April 11,
1977.
The MTCC decided the case in favor of respondents. It opined that
petitioners claim of ownership over the subject parcel of land was not successfully
rebutted by respondents; hence, petitioners ownership of the same was deemed
established.[4] However, with respect to the building, the court declared respondents
as having the better right to its material possession in light of petitioners failure to
refute respondents claim that their predecessors had been in prior possession of the
building since 1960 and that they have continued such possession up to the present.
[5]
In so ruling, the court applied Art. 546[6] of the Civil Code which allows the
possessor in good faith to retain the property until he is reimbursed for necessary
expenses. Thus, in its decision dated March 15, 2004, the MTCC pronounced:
WHEREFORE, foregoing premises considered and the collated
evidences at hand [have] preponderantly established, JUDGMENT is
hereby rendered in favor of the defendants DECLARING the defendants
to have the better rights of (material) possession to the assailed building
and deemed as possessors in good faith and are legally entitled to its
possession and occupancy.
The plaintiff judicially affirmed as the land owner is enjoined to
respect the rights of the defendants pursuant to the provisions of Art.
546, Chapter III, New Civil Code of the Philippines[, w]ithout prejudice
to the provisions of Arts. 547 and 548, New Civil Code of
the Philippines. No pronouncement as to costs as defendants
predecessors-in-interest are deemed possessors and builders in good
faith.
SO ORDERED.[7]

Petitioner elevated the case to the Regional Trial Court (RTC). On July 12,
2004, the RTC reversed the MTCC decision. The RTC agreed with the MTCC that
the land is owned by petitioner. The two courts differed, however, in their
conclusion with respect to the building. The RTC placed the burden upon
respondents to prove their claim that they built it prior to petitioners acquisition of
the land, which burden, the court found, respondents failed to discharge. The RTC
held that, either waywhether the building was constructed before or after petitioner
acquired ownership of the landpetitioner, as owner of the land, would have every
right to evict respondents from the land. As theorized by the RTC, if the building
was erected before petitioner or his predecessors acquired ownership of the land,
then Article 445[8] of the Civil Code would apply. Thus, petitioner, as owner of the
land, would be deemed the owner of the building standing thereon, considering
that, when ownership of the land was transferred to him, there was no reservation
by the original owner that the building was not included in the transfer. On the
other hand, if the building was constructed after petitioner became the owner of the
land, it is with more reason that petitioner has the right to evict respondents from
the land. The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
1.

Reversing the decision of the court a quo;

2.

Ordering defendants to immediately vacate the residential

house/building subject of this litigation;

3.

Ordering defendants to pay attorneys fee in the amount

of P30,000.00; and

4.

To pay the cost of the suit.

SO ORDERED.[9]
Respondents then filed a petition for review with the CA. Finding no evidence to
prove that respondents possession of the building was by mere tolerance, the CA
reversed the RTC decision and ordered the dismissal of petitioners
complaint. Because of this, the CA, following this Courts ruling in Ten Forty
Realty and Development Corporation v. Cruz, categorized the complaint as one for
forcible entry. It then proceeded to declare that the action had prescribed since the

one-year period for filing the forcible entry case had already lapsed. The
dispositive portion of the CA Decision dated September 18, 2006 reads:
WHEREFORE, premises considered, the assailed decision promulgated
on July 12, 2004 of Branch 25 of the Regional Trial Court
(RTC), Maasin City, Southern Leyte in Civil Case No. R-3382 is hereby
declared NULL and VOID for failure of the plaintiff (herein respondent)
to prove that the case at bar is for unlawful detainer or forcible entry.
Accordingly, the instant case is hereby DISMISSED.
xxxx
SO ORDERED.[10]

Petitioner sought reconsideration of the Decision, but the CA denied

petitioners motion for lack of merit.[11] Hence, petitioner came to this Court through
a petition for review on certiorari.
On September 3, 2007, respondents counsel informed this Court that
respondent, Maricris Abiera Paredes, died on June 25, 2006 of asphyxia due to
hanging, and moved that the latters heirs be allowed to substitute for the deceased.
[12]
In the Resolution[13] dated November 14, 2007, the Court granted the motion.
Petitioner argues that he has sufficiently established his ownership of the
subject properties; consequently, he asserts the right to recover possession thereof.
The petition has no merit.
To set the record straight, while petitioner may have proven his ownership of
the land, as there can be no other piece of evidence more worthy of credence than
a Torrens certificate of title, he failed to present any evidence to substantiate his
claim of ownership or right to the possession of the building. Like the CA, we
cannot accept the Deed of Extrajudicial Settlement of Estate (Residential Building)
with Waiver and Quitclaim of Ownership executed by the Garcianos as proof that
petitioner acquired ownership of the building. There is no showing that the
Garcianos were the owners of the building or that they had any proprietary right
over it. Ranged against respondents proof of possession of the building since 1977,
petitioners evidence pales in comparison and leaves us totally unconvinced.

Without a doubt, the registered owner of real property is entitled to its

possession. However, the owner cannot simply wrest possession thereof from
whoever is in actual occupation of the property. To recover possession, he must
resort to the proper judicial remedy and, once he chooses what action to file, he is
required to satisfy the conditions necessary for such action to prosper.
In the present case, petitioner opted to file an ejectment case against
respondents. Ejectment casesforcible entry and unlawful detainerare summary
proceedings designed to provide expeditious means to protect actual possession or
the right to possession of the property involved. [14] The only question that the
courts resolve in ejectment proceedings is: who is entitled to the physical
possession of the premises, that is, to the possession de facto and not to the
possessionde jure. It does not even matter if a partys title to the property is
questionable.[15] For this reason, an ejectment case will not necessarily be decided
in favor of one who has presented proof of ownership of the subject property. Key
jurisdictional facts constitutive of the particular ejectment case filed must be
averred in the complaint and sufficiently proven.
The statements in the complaint that respondents possession of the building
was by mere tolerance of petitioner clearly make out a case for unlawful
detainer. Unlawful detainer involves the persons withholding from another of the
possession of the real property to which the latter is entitled, after the expiration or
termination of the formers right to hold possession under the contract, either
expressed or implied.[16]
A requisite for a valid cause of action in an unlawful detainer case is that
possession must be originally lawful, and such possession must have turned
unlawful only upon the expiration of the right to possess.[17] It must be shown that
the possession was initially lawful; hence, the basis of such lawful possession must
be established. If, as in this case, the claim is that such possession is by mere
tolerance of the plaintiff, the acts of tolerance must be proved.
Petitioner failed to prove that respondents possession was based on his
alleged tolerance. He did not offer any evidence or even only an affidavit of the
Garcianos attesting that they tolerated respondents entry to and occupation of the

subject properties. A bare allegation of tolerance will not suffice. Plaintiff must, at
least, show overt acts indicative of his or his predecessors permission to occupy the
subject property. Thus, we must agree with the CA when it said:
A careful scrutiny of the records revealed that herein respondent
miserably failed to prove his claim that petitioners possession of the
subject building was by mere tolerance as alleged in the
complaint. Tolerance must be [present] right from the start of possession
sought to be recovered to be within the purview of unlawful detainer.
Mere tolerance always carries with it permission and not merely silence
or inaction for silence or inaction is negligence, not tolerance. [18]

In addition, plaintiff must also show that the supposed acts of tolerance have
been present right from the very start of the possessionfrom entry to the
property. Otherwise, if the possession was unlawful from the start, an action for
unlawful detainer would be an improper remedy.[19] Notably, no mention was made
in the complaint of how entry by respondents was effected or how and when
dispossession started. Neither was there any evidence showing such details.
In any event, petitioner has some other recourse. He may pursue recovering
possession of his property by filing an accion publiciana, which is a plenary action
intended to recover the better right to possess; or an accion reivindicatoria, a suit
to recover ownership of real property. We stress, however, that the pronouncement
in this case as to the ownership of the land should be regarded as merely
provisional and, therefore, would not bar or prejudice an action between the same
parties involving title to the land.[20]
WHEREFORE, premises considered, the petition is DENIED. The CA
Decision dated September 18, 2006 and Resolution dated April 17, 2007
areAFFIRMED.

FIRST DIVISION
RAMON ARANDA,
Petitioner,

G.R. No. 172331

Present:

CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
PEREZ, JJ.

- versus -

REPUBLIC OF THE PHILIPPINES,

Respondent.

Promulgated:

August 24, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
VILLARAMA, JR., J.:
On appeal is the Decision[1] dated July 26, 2005 and Resolution[2] dated April 11,
2006 of the Court of Appeals (CA) in CA-G.R. CV No. 73067 which reversed and
set aside the Decision[3] dated January 31, 2001 of the Regional Trial Court (RTC)
of Tanauan, Batangas, Branch 6 in Land Reg. Case No. T-335 (LRA Record No. N69447).
Subject of a petition for original registration before the RTC is a parcel of land
situated in San Andres, Malvar, Batangas with an area of 9,103 square meters and
designated as Lot 3730, Psc 47, Malvar Cadastre. The petition[4] was originally
filed by ICTSI Warehousing, Inc. (ICTSI-WI) represented by its Chairman,
Enrique K. Razon, Jr. The Republic through the Office of the Solicitor General
(OSG) filed its opposition[5] on grounds that the land applied for is part of the
public domain and the applicant has not acquired a registrable title thereto under
the provisions of Commonwealth Act No. 141 as amended by Republic Act No.
6940.
ICTSI-WI sought leave of court to amend the application citing the following
reasons: (1) the petition was not accompanied by a certification of non-forum
shopping; (2) the statement of technical description was based merely on the
boundaries set forth in the tax declaration; and (3) due to a technicality, the sale

between the vendor and applicant corporation cannot push through and
consequently the tax declaration is still in the name of vendor Ramon Aranda and
the land cannot be transferred and declared in the name of ICTSI-WI.[6]
The trial court admitted the Amended Application for Registration of Title, [7] this
time filed in the name of Ramon Aranda, herein petitioner. Petitioner prayed that
should the Land Registration Act be not applicable to this case, he invokes the
liberal provisions of Section 48 of Commonwealth Act No. 141, as amended,
having been in continuous possession of the subject land in the concept of owner,
publicly, openly and adversely for more than thirty (30) years prior to the filing of
the application.[8]
In support of the application, petitioners sister Merlita A. Enriquez testified that in
1965 her father Anatalio Aranda donated the subject land to his brother (petitioner),
as evidenced by documents Pagpapatunay ng Pagkakaloob ng Lupa which she and
her siblings executed on June 7, 2000.[9] She came to know the land for the first
time in 1965 when she was eight years old and his brother Ramon has been tilling
the land since then, planting it with rice and corn. His brother did not introduce any
permanent improvement and also did not hire a tenant to work on the land. As to
the donation made by his father to his brother Ramon, she recalled there was such
a document but it was eaten by rats.[10]
Another witness, Luis Olan, testified that his father Lucio Olan originally owned
the land and that he had known about this property since he was six (6) years old as
he used to accompany his father in going to the land. His father farmed the land
and planted it first, with rice, and later corn. They had open, peaceful, continuous
and adverse possession of the land in the concept of owner until his father sold the
land in 1946 to Anatalio Aranda. The children of Anatalio then took over in tilling
the land, planting it with rice and corn and adding a few coconut trees. He does not
have any copy of the document of sale because his mother gave it to Anatalio.[11]
On January 31, 2001, the trial court rendered its Decision [12] granting the
application and ordering the issuance of a decree of registration in favor of
petitioner.

The Republic appealed to the CA which reversed the trial court. The CA held that
petitioners evidence does not satisfactorily establish the character and duration of
possession required by law, as petitioner failed to prove specific acts showing the
nature of the possession by his predecessors-in-interest. The CA also did not give
evidentiary weight to the documents Pagpapatunay ng Pagkakaloob ng
Lupa and Pagpapatunay ng Bilihang Lampasan ng Lupa,[13] both prepared only in
the year 2000 when the application for registration was filed, as factual proof of
ownership by the parties to the compromise agreement.
Petitioners motion for reconsideration was likewise denied by the CA.
Hence, this appeal by way of a petition for review on certiorari under Rule
45 alleging that the decision of the CA is based on a misapprehension of facts with
regard to compliance with the required 30 years of open, exclusive, public and
adverse possession in the concept of owner. Petitioner argues that the deeds of
confirmation of the 1946 sale in favor of Anatalio Aranda and the 1965 donation to
petitioner are competent proof of transfer of ownership notwithstanding that these
were executed only in the year 2000. He asserts that the testimonies of witnesses
Merlita Aranda-Enriquez and Luis Olan on the fact of loss and destruction of
copies of the aforesaid deeds constitute secondary evidence of the contents thereof
based on recollection of persons who are adversely affected. Such testimonial
evidence coupled with the deeds of confirmation warrants the application of the
exception from the best evidence rule. Petitioner thus contends that the CA had no
legal basis to doubt the veracity of the donation and sale of the subject property,
and to conclude that the confirmation deeds can be treated as compromise
agreement considering that the transactions had been previously completed and
perfected by the parties.
We deny the petition.
The Property Registration Decree (P.D. No. 1529) provides for original registration
of land in an ordinary registration proceeding. Under Section 14(1)[14] thereof, a
petition may be granted upon compliance with the following requisites: (a) that the
property in question is alienable and disposable land of the public domain; (b) that
the applicants by themselves or through their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and occupation; and (c) that

such possession is under a bona fide claim of ownership since June 12, 1945 or
earlier.
Under the Regalian doctrine which is embodied in Section 2, Article XII of
the 1987 Constitution, all lands of the public domain belong to the State, which is
the source of any asserted right to ownership of land. All lands not appearing to be
clearly within private ownership are presumed to belong to the State. Unless public
land is shown to have been reclassified or alienated to a private person by the
State, it remains part of the inalienable public domain. To overcome this
presumption, incontrovertible evidence must be established that the land subject of
the application is alienable or disposable.[15]
To prove that the land subject of an application for registration is alienable,
an applicant must establish the existence of a positive act of the government such
as a presidential proclamation or an executive order; an administrative action;
investigation reports of Bureau of Lands investigators; and a legislative act or a
statute.[16] The applicant may also secure a certification from the Government that
the lands applied for are alienable and disposable.[17]
In this case, the Assistant Regional Executive Director For Operations-Mainland
Provinces of the Department of Environment and Natural Resources (DENR), in
compliance with the directive of the trial court, issued a certification stating that
the subject property falls within the Alienable and Disposable Land, Project No.
22-A of Lipa, Batangas per LC Map 718 certified on March 26, 1928.[18] However,
in the Certification[19] dated January 14, 2000 issued by the DENR CENR Officer
of Batangas City, Pancrasio M. Alcantara, which was submitted in evidence by the
petitioner, it states that:
This is to certify that based on projection from the technical
reference map of this Office, Lot No. 3730, Ap-04-009883, situated at
Barangay San Andres, Malvar, Batangas containing an area of NINE
THOUSAND ONE HUNDRED THREE AND FORTY SEVEN
(9,103.47) SQUARE METERS and shown at the reverse side hereof has
been verified to be within the ALIENABLE AND DISPOSABLE ZONE
under Project No. 39, Land Classification Map No. 3601 certified on
22 December 1997except for twenty meters strip of land along the creek

bounding on the northeastern portion which is to be maintained as

streambank protection.
x x x x (Emphasis supplied.)

Petitioner has not explained the discrepancies in the dates of

classification[20] mentioned
in
the
foregoing
government
certifications. Consequently, the status of the land applied for as alienable and
disposable was not clearly established.
We also agree with the CA that petitioners evidence failed to show that he
possessed the property in the manner and for the duration required by law.
Petitioner presented tax declarations and the deeds of confirmation of the 1946 sale
from the original owner (Lucio Olan) to Anatalio Aranda and the 1965 donation
made by the latter in favor of petitioner. But as found by the CA, the history of the
land shows that it was declared for taxation purposes for the first time only in
1981. On the other hand, the Certification issued by the Municipal Treasurer of
Malvar stated that petitioner, who supposedly received the property from his father
in 1965, had been paying the corresponding taxes for said land for more than five
consecutive years including the current year [1999], or beginning 1994 only or just
three years before the filing of the application for original registration. While, as a
rule, tax declarations or realty tax payments of property are not conclusive
evidence of ownership, nevertheless they are good indicia of possession in the
concept of owner, for no one in his right mind would be paying taxes for a property
that is not in his actual or constructive possession they constitute at least proof that
the holder has a claim of title over the property.[21]
Petitioner likewise failed to prove the alleged possession of his predecessors-ininterest. His witness Luis Olan testified that he had been visiting the land along
with his father Lucio since he was 6 years old (he was 70 years old at the time he
testified), or as early as 1936. Yet, there was no evidence that Lucio Olan declared
the property for tax purposes at anytime before he sold it to Anatalio Aranda. There
is also no showing that Anatalio Aranda declared the property in his name from the
time he bought it from Lucio Olan. And even assuming that Lucio actually planted
rice and corn on the land, such statement is not sufficient to establish possession in

the concept of owner as contemplated by law. Mere casual cultivation of the land
does not amount to exclusive and notorious possession that would give rise to
ownership.[22] Specific acts of dominion must be clearly shown by the applicant.
We have held that a person who seeks the registration of title to a piece of land on
the basis of possession by himself and his predecessors-in-interest must prove his
claim by clear and convincing evidence, i.e., he must prove his title and should not
rely on the absence or weakness of the evidence of the oppositors. [23]Furthermore,
the court has the bounden duty, even in the absence of any opposition, to require
the petitioner to show, by a preponderance of evidence and by positive and
absolute proof, so far as possible, that he is the owner in fee simple of the lands
which he is attempting to register.[24] Since petitioner failed to meet the quantum of
proof required by law, the CA was correct in reversing the trial court and
dismissing his application for judicial confirmation of title.
WHEREFORE, the present petition for review on certiorari is DENIED. The
Decision dated July 26, 2005 and Resolution dated April 11, 2006 of the Court of
Appeals in CA-G.R. CV No. 73067 are AFFIRMED and UPHELD.
With costs against the petitioner.
SO ORDERED.
Manila
EN BANC
G.R. No. 133250

July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,

vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition further
seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways, signed a
contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity)
to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out
all the works in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands." 1 On the same
date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay" 2 under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its
contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by
PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29,
1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of works
on a unit price/lump sum basis for items of work to be agreed upon, subject to price
escalation, retention and other terms and conditions provided for in Presidential Decree No.
1594. All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have
not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which
areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and approximately
Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888)
square meters of reclaimed areas at varying elevations above Mean Low Water Level
located outside the Financial Center Area and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand
eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register
of Deeds of the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and
7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom
Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands to complete the configuration
in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI

entered into the JVA through negotiation without public bidding.4 On April 28, 1995, the Board of
Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA. 6
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the
Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA seeks
to transfer to AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of
title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No.
365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were ongoing renegotiations between PEA and AMARI under an order issued by then President Fidel V.
Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and
retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application
for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No.
132994 seeking to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of
judicial hierarchy, without prejudice to the refiling of the case before the proper court." 12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in
the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the
1987 Constitution on the right of the people to information on matters of public concern. Petitioner
assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII
of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private
corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in
properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19,
1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the
Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the
parties to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void." 14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND
ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT
FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations
for a new agreement." The petition also prays that the Court enjoin PEA from "privately entering into,
perfecting and/or executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner
on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed
upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the
renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot
because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking
the signing and approval of the Amended JVA before the Court could act on the issue. Presidential
approval does not resolve the constitutional issue or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President
cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still
to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation if in the meantime PEA
and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing
the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits
the government from alienating lands of the public domain to private corporations. If the Amended
JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to safeguard
the national patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if
the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and
ownership of alienable lands of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the
public.17
Also, the instant petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural landssold to private corporations which acquired the lands from
private parties. The transferors of the private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed
lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the Amended
JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial
confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or
still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and
notorious occupation of agricultural lands of the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title
expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because
of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the
reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy
percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended
JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.21
Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As it
is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the public. 22 The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct resort to
the Court violates the principle of exhaustion of administrative remedies. It also violates the rule that
mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary
course of law.
PEA distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Taada, the Executive Department had
an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act
No. 63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in
Taada to make an initial demand from the Office of the President. In the instant case, PEA claims it
has no affirmative statutory duty to disclose publicly information about its renegotiation of the JVA.
Thus, PEA asserts that the Court must apply the principle of exhaustion of administrative remedies
to the instant case in view of the failure of petitioner here to demand initially from PEA the needed
information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation.
Under Section 79 of the Government Auditing Code,26 the disposition of government lands to private
parties requires public bidding. PEA was under a positive legal duty to disclose to the public the
terms and conditions for the sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of a negotiated contract,
not of a public bidding. Considering that PEA had an affirmative statutory duty to make the public
disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct judicial
intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question. 27 The
principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of
the constitutional ban prohibiting the alienation of lands of the public domain to private corporations.
We rule that the principle of exhaustion of administrative remedies does not apply in the instant
case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will suffer
any concrete injury because of the signing or implementation of the Amended JVA. Thus, there is no
actual controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to
comply with its constitutional duties. There are two constitutional issues involved here. First is the
right of citizens to information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus "Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of 'transcendental importance to the public.' He asserts that ordinary
taxpayers have a right to initiate and prosecute actions questioning the validity of acts or
orders of government agencies or instrumentalities, if the issues raised are of 'paramount
public interest,' and if they 'immediately affect the social, economic and moral well being of
the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest,
when the proceeding involves the assertion of a public right, such as in this case. He invokes
several decisions of this Court which have set aside the procedural matter of locus standi,
when the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded as
the real parties in interest; and because it is sufficient that petitioner is a citizen and as such
is interested in the execution of the laws, he need not show that he has any legal or special
interest in the result of the action. In the aforesaid case, the petitioners sought to enforce
their right to be informed on matters of public concern, a right then recognized in Section 6,
Article IV of the 1973 Constitution, in connection with the rule that laws in order to be valid
and enforceable must be published in the Official Gazette or otherwise effectively
promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they
sought to be enforced 'is a public right recognized by no less than the fundamental law of the
land.'
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general 'public' which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have
been involved under the questioned contract for the development, management and
operation of the Manila International Container Terminal, 'public interest [was] definitely
involved considering the important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the financial consideration involved.' We
concluded that, as a consequence, the disclosure provision in the Constitution would
constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access
to official records, documents and papers a right guaranteed under Section 7, Article III of
the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's
legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we
rule that the petition at bar should be allowed."
We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional
rights - to information and to the equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official information on
on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of public
concern in this manner:
"Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used as
basis for policy development, shall be afforded the citizen, subject to such limitations as may
be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public
interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of freedom
of expression. If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be speculative and
amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x
accountable to the people,"29 for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can participate in public
discussions leading to the formulation of government policies and their effective implementation. An
informed citizenry is essential to the existence and proper functioning of any democracy. As
explained by the Court in Valmonte v. Belmonte, Jr.30
"An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that
the channels for free political discussion be maintained to the end that the government may
perceive and be responsive to the people's will. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."

PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information
is limited to "definite propositions of the government." PEA maintains the right does not include
access to "intra-agency or inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before
the closing of the transaction. To support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover
both steps leading to a contract and already a consummated contract, Mr. Presiding
Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation
of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the right.
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade
the quality of decision-making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the public.
Before the consummation of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These include the size,
location, technical description and nature of the property being disposed of, the terms and conditions
of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this information at
any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken by
the bidding or review committee is not immediately accessible under the right to information. While
the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this moment, the public's right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose

sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions on disclosure of information in general,
as discussed earlier such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public to expose its defects.
1wphi1.nt

Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating
in the public discussion of any proposedcontract, effectively truncating a basic right enshrined in the
Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the
State of its avowed "policy of full disclosure of all its transactions involving public interest."
The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and
(3) government research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or processed, owned by the
government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.34 The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and copying. 35
The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers.36 The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of crimes
by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential.37 The right may also be subject to other limitations that Congress may
impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal

deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress,38 are recognized as confidential. This kind of information cannot be pried open by a coequal branch of government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and Judicial power.39This is not
the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on ongoing negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and public
order.40 Congress has also prescribed other limitations on the right to information in several
legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine which holds that the State owns all lands and waters of the public domain. Upon the
Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in the
Philippines passed to the Spanish Crown.42The King, as the sovereign ruler and representative of the
people, acquired and owned all lands and territories in the Philippines except those he disposed of
by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land ownership that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the public domain." 43 Article
339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the
Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. On November 7,
1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the
maritime zone of the Spanish territory belonged to the public domain for public use. 44 The Spanish
Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of the
grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking
the reclamation, provided the government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such as
walls, fortresses, and other works for the defense of the territory, and mines, until granted to
private individuals."
Property devoted to public use referred to property open for use by the public. In contrast, property
devoted to public service referred to property used for some specific public service and open only to
those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but also to property
not so used but employed to develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or commercial activity to increase
the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into
private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State."
This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties. 45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing law, and
the title to all Government or public lands made or reclaimed by the Government by
dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to
the City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made
or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or
blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
plans of such surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice to
the public that such parts of the lands so made or reclaimed as are not needed for
public purposes will be leased for commercial and business purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-General may
by executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands.
Private parties could lease lands reclaimed by the government only if these lands were no longer
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
public lands which the government could sell to private parties, these reclaimed lands were available
only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654
did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law
of Waters. Lands reclaimed from the sea by private parties with government permission remained
private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46 The
salient provisions of Act No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, 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) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public
lands, the Governor-General, 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."
Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited or classified x x x.

xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land,
shall be classified as suitable for residential purposes or for commercial, industrial, or
other productive purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of this chapter, and not
otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to
"declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive nonagricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other nonagricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise." The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were "not necessary for the public
service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed,
foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy
lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could sell to private parties. Thus, under
Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of
the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The
1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that
"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for
the exploitation, development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of
the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural lands,
which were the only natural resources the State could alienate. Thus, foreshore lands, considered
part of the State's natural resources, became inalienable by constitutional fiat, available only for
lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands, fell under the classification of public agricultural lands. 50 However, government
reclaimed and marshy lands, although subject to classification as disposable public agricultural
lands, could only be leased and not sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and marshy
lands of the public domain was only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:

"Section 2. No private corporation or association may acquire, lease, or hold public

agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty
hectares, or by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association."
(Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No.
2874 to open for sale to private parties government reclaimed and marshy lands of the public
domain. On the contrary, the legislature continued the long established State policy of retaining for
the government title and ownership of government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as
the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No.
141, as amended, remains to this day the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands. 51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"52 lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President to
"declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that are "officially delimited
and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another,53 for
the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable
public lands, the President, upon recommendation by the Secretary of Agriculture and
Commerce, shall from time to time declare what lands are open to disposition or
concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. x x x."

Thus, before the government could alienate or dispose of lands of the public domain, the President
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands for public or quasi-public
uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the
public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this chapter
and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may
be, to any person, corporation, or association authorized to purchase or lease public lands
for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the
President, upon recommendation by the Secretary of Agriculture, shall declare that the
same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act
No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of
the public domain. All these lands are intended for residential, commercial, industrial or other nonagricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.
The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under
the 1935 Constitution which only allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA
No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX,
Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are lands
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of
1919 and 1936 also declared that the foreshore and lands reclaimed by the government
were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
Natural Resources, had first to determine that the land reclaimed was not necessary for the
public service. This requisite must have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained
in effect at present."
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA
No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution. Foreshore lands became
inalienable as natural resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the classification of
government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of
the public domain continued to be only leased and not sold to private parties. 56 These lands
remained sui generis, as the only alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified
under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the
government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under
Section 59 that the government previously transferred to government units or entities could be sold
to private parties. Section 60 of CA No. 141 declares that
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the
Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes
for which such sale or lease is requested, and shall not exceed one hundred and forty-four
hectares: Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest;but the land so granted,
donated, or transferred to a province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or otherwise disposed of in a

manner affecting its title, except when authorized by Congress: x x x." (Emphasis
supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141 exempted government
units and entities from the maximum area of public lands that could be acquired from the State.
These government units and entities should not just turn around and sell these lands to private
parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for nonagricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of
government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA
No. 141 constitutes by operation of law a lien on these lands.57
In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No.
141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as
follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now
the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of
such authority, the Director of Lands shall give notice by public advertisement in the same
manner as in the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be
made to the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable
or disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
permission. However, thereclaimed land could become private land only if classified as
alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion found in
the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that
"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.

x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State."
Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial property
of the State.59 In the case of government reclaimed and marshy lands of the public domain, the
declaration of their being disposable, as well as the manner of their disposition, is governed by the
applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if developed to enhance the national wealth,
are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the
Philippines belong to the State. With the exception of agricultural, industrial or
commercial, residential, and resettlement lands of the public domain, natural
resources shall not be alienated, and no license, concession, or lease for the exploration,
development, exploitation, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the measure and the
limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
contrast, the 1935 Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain. 60 If the
land of public domain were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore,
prohibited the alienation of all natural resources except agricultural lands of the public
domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or acquired by, or leased to, any
qualified individual, corporation, or association, and the conditions therefor. No private

corporation or association may hold alienable lands of the public domain except by
lease not to exceed one thousand hectares in area nor may any citizen hold such lands by
lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in
excess of twenty-four hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may be increased by the
Batasang Pambansa upon recommendation of the National Economic and Development
Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease. Only individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from acquiring any kind of alienable land
of the public domain. The constitutional ban extended to all kinds of alienable lands of the public
domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore
and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. 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 service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified." (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide. 61 Submerged
areas are those permanently under water regardless of the ebb and flow of the tide. 62 Foreshore and
submerged areas indisputably belong to the public domain 63 and are inalienable unless reclaimed,
classified as alienable lands open to disposition, and further declared no longer needed for public
service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public
domain did not apply to PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies now, only to "private corporations
and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain,
there must be legislative authority empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No.141, which states
"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to
PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public domain. Hence, such
legislative authority could only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian
doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and
except for alienable agricultural lands of the public domain, natural resources cannot be alienated.
Sections 2 and 3, Article XII of the 1987 Constitution state that
"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. x x x.
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 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." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations fromacquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public
domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the
lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public
domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through lease,
alienable lands of the public domain is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which
says:
`No private corporation or association may hold alienable lands of the public domain except
by lease, not to exceed one thousand hectares in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced
in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what the reason for this is.
In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this
is to prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where
a chapel stood because the Supreme Court said it would be in violation of this." (Emphasis
supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse land ownership or to encourage 'ownercultivatorship and the economic family-size farm' and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had spawned social
unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
simply limited the size of alienable lands of the public domain that corporations could acquire. The
Constitution could have followed the limitations on individuals, who could acquire not more than 24
hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name
of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares
in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing
break-up of farmlands into smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An individual
could own as many corporations as his means would allow him. An individual could even hide his
ownership of a corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain to a qualified individual. This constitutional intent
is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public
domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable
public lands are gradually decreasing in the face of an ever-growing population. The most effective
way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the
public domain only to individuals. This, it would seem, is the practical benefit arising from the
constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area." 65
PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the
750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is

defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila
Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:
"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. x x x.
xxx
Section 3. x x x 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, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum, 67 PEA admits that

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
are classified as alienable and disposable lands of the public domain."69 The Legal Task Force
concluded that
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of
which PEA, as owner, may validly convey the same to any qualified person without violating
the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land, except
by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory grant."
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. 71
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia, 73 the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article 422 74of
the Civil Code, a property of public dominion retains such character until formally declared
otherwise. The Court ruled that
"The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co.
v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain,
not available for private appropriation or ownership 'until there is a formal declaration

on the part of the government to withdraw it from being such'(Ignacio v. Director of

Lands, 108 Phil. 335 [1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84
hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of
a land patent also constitute a declaration that the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the
Freedom Islands although subsequently there were partial erosions on some areas. The government
had also completed the necessary surveys on these islands. Thus, the Freedom Islands were no
longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution
classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national
parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such as the seas or bays, are "waters
x x x owned by the State" forming part of the public domain, and are inalienable pursuant to Section
2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation,
reclaimed the islands under a contract dated November 20, 1973 with the Commissioner of Public
Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that "if the
ownership of reclaimed lands may be given to the party constructing the works, then it cannot be
said that reclaimed lands are lands of the public domain which the State may not alienate." 75 Article 5
of the Spanish Law of Waters reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of
the grant of authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only
with "proper permission" from the State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This clearly meant that no one could
reclaim from the sea without permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold ownership of the reclaimed land
because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land

ownership that "all lands that were not acquired from the government, either by purchase or by
grant, belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP
and the government was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that
"The provisions of any law to the contrary notwithstanding, the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government or
any person authorized by it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas
under water could now be undertaken only by the National Government or by a person contracted by
the National Government. Private parties may reclaim from the sea only under a contract with the
National Government, and no longer by grant or permission as provided in Section 5 of the Spanish
Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government," which
"shall be undertaken by the PEA or through a proper contract executed by it with any person
or entity." Under such contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed
land is first classified as alienable or disposable land open to disposition, and then declared no
longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable lands of the public domain
open to disposition. These submerged areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed from the sea,
these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part
of the public domain and consequently inalienable. Only when actually reclaimed from the sea can
these submerged areas be classified as public agricultural lands, which under the Constitution are
the only natural resources that the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands as alienable or disposable
lands open to disposition. Thereafter, the government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be considered alienable or disposable lands of
the public domain and within the commerce of man.

The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable
lands open to disposition is necessary because PEA is tasked under its charter to undertake public
services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the
functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of
land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as
may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary."
PEA is empowered to issue "rules and regulations as may be necessary for the proper use by
private parties of any or all of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore
and submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation
to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests."79 Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal declaration
segregating reclaimed lands no longer needed for public service from those still needed for public
service.
1wphi1.nt

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned
by the PEA," could not automatically operate to classify inalienable lands into alienable or disposable
lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public
domain would automatically become alienable once reclaimed by PEA, whether or not classified as
alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests
in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers
and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources and, in the process of exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning the
development, exploration and utilization of the country's marine, freshwater, and
brackish water and over all aquatic resources of the country and shall continue to

oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other
causes which are in furtherance of the conservation of natural resources and supportive of
the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of
the public domain and serve as the sole agency responsible for classification, subclassification, surveying and titling of lands in consultation with appropriate
agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before PEA can
undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the lands
as alienable or disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the
Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to classify lands of the public
domain into alienable or disposable lands subject to the approval of the President. On the other
hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain,
open to disposition under the Constitution, Title I and Title III 83of CA No. 141 and other applicable
laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA,
citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of
the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting
its title, except when authorized by Congress: x x x."85 (Emphasis by PEA)

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which
states that
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that "It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to
sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that
"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development Corporation
of the Philippines dated November 20, 1973 and/or any other contract or reclamation
covering the same area is hereby transferred, conveyed and assigned to the ownership
and administration of the Public Estates Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests of the Construction and Development
Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and
respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations
of the Republic of the Philippines (Department of Public Highways) arising from, or incident
to, the aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said
entity with an issued value of said shares of stock (which) shall be deemed fully paid and
non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in
favor of the Public Estates Authority without prejudice to the subsequent transfer to
the contractor or his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the above-mentioned contract. On the basis of such
patents, the Land Registration Commission shall issue the corresponding certificate
of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in accordance
with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may
derive from the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed
lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be
owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in
accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties itspatrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its
alienable or disposable lands of the public domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations
but only to individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and
67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a
public auction.88 Special Patent No. 3517 expressly states that the patent is issued by authority of the
Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended." This is
an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable
lands of the public domain unless otherwise provided by law. Executive Order No. 654, 89 which
authorizes PEA "to determine the kind and manner of payment for the transfer" of its assets and
properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely
authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
the government is required to sell valuable government property through public bidding. Section 79
of PD No. 1445 mandates that

"Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by
the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or where the
value of the property does not warrant the expense of publication, by notices posted for a
like period in at least three public places in the locality where the property is to be sold. In
the event that the public auction fails, the property may be sold at a private sale at
such price as may be fixed by the same committee or body concerned and approved
by the Commission."
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price. 90 The Commission on Audit implements Section
79 of the Government Auditing Code through Circular No. 89-296 91 dated January 27, 1989. This
circular emphasizes that government assets must be disposed of only through public auction, and a
negotiated sale can be resorted to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore
and submerged alienable lands of the public domain. Private corporations are barred from bidding at
the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder.92 No one, however, submitted a bid. On December 23,
1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands through
negotiation, without need of another public bidding, because of the failure of the public bidding on
December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another
350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares, 95 is
not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three
years before the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as
legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance
of any infrastructure projects undertaken through the build-operate-and-transfer arrangement

or any of its variations pursuant to the provisions of this Act, the project proponent x x x may
likewise be repaid in the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed
land, subject to the constitutional requirements with respect to the ownership of the
land: x x x." (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional
ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the industrial estate
constructed."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of the
BOT Law, the constitutional restrictions on land ownership automatically apply even though not
expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor
or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares 96 of nonagricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing
such conveyance. This is the only way these provisions of the BOT Law and the Local Government
Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain and converts the
property into patrimonial or private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA
and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held
"Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director
of Lands has neither control nor jurisdiction."

2. Lee Hong Hok v. David,98 where the Court declared "After the registration and issuance of the certificate and duplicate certificate of title based on
a public land patent, the land covered thereby automatically comes under the operation of
Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco
v. Heirs of Jose Aliwalas,99 where the Court ruled "While the Director of Lands has the power to review homestead patents, he may do so only
so long as the land remains part of the public domain and continues to be under his
exclusive control; but once the patent is registered and a certificate of title is issued, the land
ceases to be part of the public domain and becomes private property over which the Director
of Lands has neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court held
"When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to be
part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same."
5.Republic v. Court of Appeals,101 where the Court stated
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration under the Land Registration
Act. Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner
Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of
grants or patents involving public lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government of the United States or to the Government of
the Philippines are alienated, granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this Act (Land
Registration Act, Act 496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titlesissued to private parties. These four cases uniformly hold that the Director of
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a
wholly government owned corporation performing public as well as proprietary functions. No patent
or certificate of title has been issued to any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's
certificates of title should remain with PEA, and the land covered by these certificates, being
alienable lands of the public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the registrant had prior to the
registration.102 The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.103
Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to government
units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the
provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President
Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and
in conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto
the Public Estates Authority the aforesaid tracts of land containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof."
(Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No.
1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to government units or entities. Section 60
of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the
registered land even if not annotated on the certificate of title. 104 Alienable lands of the public domain
held by government entities under Section 60 of CA No. 141 remain public lands because they
cannot be alienated or encumbered unless Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convert alienable lands of the public domain into private or patrimonial lands.
The alienable lands of the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National Government to
reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;

Whereas, there is a need to give further institutional support to the Government's declared
policy to provide for a coordinated, economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited
to the National Government or any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government
which shall ensure a coordinated and integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions
and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of
the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416,
do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of
the National Government. All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in
consultation with the PEA upon approval of the President.
x x x ."
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.
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 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.105 The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No.
1529, automatically become private lands is contrary to existing laws. Several laws authorize lands
of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No.
1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons or
the public or private corporations, the same shall be brought forthwith under the operation
of this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith under the
operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529
includes conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or
branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration,
however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents the registered land of
the public domain from becoming private land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed
in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the name of
any political subdivision or of any corporate agency or instrumentality, by the
executive head of the agency or instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf may
be titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in
any existing law for the de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government new certificates of title covering
such expropriated lands. Section 85 of PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely
by an adequate description, the particular property or interest expropriated, the number of
the certificate of title, and the nature of the public use. A memorandum of the right or interest
taken shall be made on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or
issuance of a new certificate of title shall be for the account of the authority taking the land or
interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands
or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original
cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP
under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture, the
fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
certificates of title conveying AMARI's Land Share in the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands
other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a

transaction considered a sale or alienation under CA No. 141,108 the Government Auditing
Code,109 and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable, unless converted pursuant to law
into alienable or disposable lands of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties unlike other alienable public
lands. Reclaimed lands retain their inherent potential as areas for public use or public service.
Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable
land of the public domain. Those who attempt to dispose of inalienable natural resources of the
State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.
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 hectares110 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
hectares111 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 1409112 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.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last
issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual
matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.
SO ORDERED.

[G.R. No. 144057. January 17, 2005]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE HONORABLE

COURT OF APPEALS and CORAZON NAGUIT, respondents.
DECISION
TINGA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules
of Civil Procedure, seeking to review the Decision of the Sixth Division of the
Court of Appeals dated July 12, 2000 in CA-G.R. SP No. 51921. The appellate
court affirmed the decisions of both the Regional Trial Court (RTC), Branch 8,
of Kalibo, Aklan dated February 26, 1999, and the 7th Municipal Circuit Trial
Court (MCTC) of Ibajay-Nabas, Aklan dated February 18, 1998, which
granted the application for registration of a parcel of land of Corazon Naguit
(Naguit), the respondent herein.
[1]

[2]

[3]

The facts are as follows:

On January 5, 1993, Naguit, a Filipino citizen, of legal age and married to
Manolito S. Naguit, filed with the MCTC of Ibajay-Nabas, Aklan, a petition for
registration of title of a parcel of land situated in Brgy. Union, Nabas, Aklan.
The parcel of land is designated as Lot No. 10049, Cad. 758-D, Nabas
Cadastre, AP 060414-014779, and contains an area of 31,374 square meters.
The application seeks judicial confirmation of respondents imperfect title over
the aforesaid land.

On February 20, 1995, the court held initial hearing on the application. The
public prosecutor, appearing for the government, and Jose Angeles,
representing the heirs of Rustico Angeles, opposed the petition. On a later
date, however, the heirs of Rustico Angeles filed a formal opposition to the
petition. Also on February 20, 1995, the court issued an order of general
default against the whole world except as to the heirs of Rustico Angeles and
the government.
The evidence on record reveals that the subject parcel of land was
originally declared for taxation purposes in the name of Ramon Urbano
(Urbano) in 1945 under Tax Declaration No. 3888 until 1991. On July 9, 1992,
Urbano executed a Deed of Quitclaim in favor of the heirs of Honorato
Maming (Maming), wherein he renounced all his rights to the subject property
and confirmed the sale made by his father to Maming sometime in 1955 or
1956. Subsequently, the heirs of Maming executed a deed of absolute sale in
favor of respondent Naguit who thereupon started occupying the same. She
constituted Manuel Blanco, Jr. as her attorney-in-fact and administrator. The
administrator introduced improvements, planted trees, such as mahogany,
coconut and gemelina trees in addition to existing coconut trees which were
then 50 to 60 years old, and paid the corresponding taxes due on the subject
land. At present, there are parcels of land surrounding the subject land which
have been issued titles by virtue of judicial decrees. Naguit and her
predecessors-in-interest have occupied the land openly and in the concept of
owner without any objection from any private person or even the government
until she filed her application for registration.
[4]

[5]

After the presentation of evidence for Naguit, the public prosecutor

manifested that the government did not intend to present any evidence while
oppositor Jose Angeles, as representative of the heirs of Rustico Angeles,
failed to appear during the trial despite notice. On September 27, 1997, the
MCTC rendered a decision ordering that the subject parcel be brought under
the operation of the Property Registration Decree or Presidential Decree
(P.D.) No. 1529 and that the title thereto registered and confirmed in the name
of Naguit.
[6]

The Republic of the Philippines (Republic), thru the Office of the Solicitor
General (OSG), filed a motion for reconsideration. The OSG stressed that the

land applied for was declared alienable and disposable only on October 15,
1980, per the certification from Regional Executive Director Raoul T.
Geollegue of the Department of Environment and Natural Resources, Region
VI. However, the court denied the motion for reconsideration in an order
dated February 18, 1998.
[7]

[8]

Thereafter, the Republic appealed the decision and the order of the MCTC
to the RTC, Kalibo, Aklan, Branch 8. On February 26, 1999, the RTC rendered
its decision, dismissing the appeal.
[9]

Undaunted, the Republic elevated the case to the Court of Appeals via
Rule 42 of the 1997 Rules of Civil Procedure. On July 12, 2000, the appellate
court rendered a decision dismissing the petition filed by the Republic and
affirmed in toto the assailed decision of the RTC.
Hence, the present petition for review raising a pure question of law was
filed by the Republic on September 4, 2000.
[10]

The OSG assails the decision of the Court of Appeals contending that the
appellate court gravely erred in holding that there is no need for the
governments prior release of the subject lot from the public domain before it
can be considered alienable or disposable within the meaning of P.D. No.
1529, and that Naguit had been in possession of Lot No. 10049 in the concept
of owner for the required period.
[11]

Hence, the central question for resolution is whether is necessary under

Section 14(1) of the Property Registration Decree that the subject land be first
classified as alienable and disposable before the applicants possession under
a bona fide claim of ownership could even start.
The OSG invokes our holding in Director of Lands v. Intermediate
Appellate Court in arguing that the property which is in open, continuous and
exclusive possession must first be alienable. Since the subject land was
declared alienable only on October 15, 1980, Naguit could not have
maintained a bona fide claim of ownership since June 12, 1945, as required
by Section 14 of the Property Registration Decree, since prior to 1980, the
land was not alienable or disposable, the OSG argues.
[12]

Section 14 of the Property Registration Decree, governing original

registration proceedings, bears close examination. It expressly provides:
SECTION 14. Who may apply. The following persons may file in the proper Court of
First Instance an application for registration of title to land, whether personally 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.
(2) Those who have acquired ownership over private lands by prescription
under the provisions of existing laws.
....
There are three obvious requisites for the filing of an application for
registration of title under Section 14(1) that the property in question is
alienable and disposable land of the public domain; that the applicants by
themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation, and; that
such possession is under a bona fide claim of ownership since June 12, 1945
or earlier.
Petitioner suggests an interpretation that the alienable and disposable
character of the land should have already been established since June 12,
1945 or earlier. This is not borne out by the plain meaning of Section 14(1).
Since June 12, 1945, as used in the provision, qualifies its antecedent phrase
under a bonafide claim of ownership. Generally speaking, qualifying words
restrict or modify only the words or phrases to which they are immediately
associated, and not those distantly or remotely located. Ad proximum
antecedents fiat relation nisi impediatur sentencia.
[13]

Besides, we are mindful of the absurdity that would result if we adopt

petitioners position. Absent a legislative amendment, the rule would be,
adopting the OSGs view, that all lands of the public domain which were not

declared alienable or disposable before June 12, 1945 would not be

susceptible to original registration, no matter the length of unchallenged
possession by the occupant. Such interpretation renders paragraph (1) of
Section 14 virtually inoperative and even precludes the government from
giving it effect even as it decides to reclassify public agricultural lands as
alienable and disposable. The unreasonableness of the situation would even
be aggravated considering that before June 12, 1945, the Philippines was not
yet even considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it
merely requires the property sought to be registered as already alienable and
disposable at the time the application for registration of title is filed. If the
State, at the time the application is made, has not yet deemed it proper to
release the property for alienation or disposition, the presumption is that the
government is still reserving the right to utilize the property; hence, the need
to preserve its ownership in the State irrespective of the length of adverse
possession even if in good faith. However, if the property has already been
classified as alienable and disposable, as it is in this case, then there is
already an intention on the part of the State to abdicate its exclusive
prerogative over the property.
This reading aligns conformably with our holding in Republic v. Court of
Appeals. Therein, the Court noted that to prove that the land subject of an
application for registration is alienable, an applicant must establish the
existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation
reports of Bureau of Lands investigators; and a legislative act or a statute. In
that case, the subject land had been certified by the DENR as alienable and
disposable in 1980, thus the Court concluded that the alienable status of the
land, compounded by the established fact that therein respondents had
occupied the land even before 1927, sufficed to allow the application for
registration of the said property. In the case at bar, even the petitioner admits
that the subject property was released and certified as within alienable and
disposable zone in 1980 by the DENR.
[14]

[15]

[16]

This case is distinguishable from Bracewell v. Court of Appeals, wherein

the Court noted that while the claimant had been in possession since 1908, it
[17]

was only in 1972 that the lands in question were classified as alienable and
disposable. Thus, the bid at registration therein did not succeed. In Bracewell,
the claimant had filed his application in 1963, or nine (9) years before the
property was declared alienable and disposable. Thus, in this case, where the
application was made years after the property had been certified as alienable
and disposable, the Bracewell ruling does not apply.
A different rule obtains for forest lands, such as those which form part of
a reservation for provincial park purposes the possession of which cannot
ripen into ownership. It is elementary in the law governing natural resources
that forest land cannot be owned by private persons. As held in Palomo v.
Court of Appeals, forest land is not registrable and possession thereof, no
matter how lengthy, cannot convert it into private property, unless such lands
are reclassified and considered disposable and alienable. In the case at bar,
the property in question was undisputedly classified as disposable and
alienable; hence, the ruling in Palomo is inapplicable, as correctly held by the
Court of Appeals.
[18]

[19]

[20]

[21]

[22]

[23]

It must be noted that the present case was decided by the lower courts on
the basis of Section 14(1) of the Property Registration Decree, which pertains
to original registration through ordinary registration proceedings. The right to
file the application for registration derives from a bona fide claim of ownership
going back to June 12, 1945 or earlier, by reason of the claimants open,
continuous, exclusive and notorious possession of alienable and disposable
lands of the public domain.
A similar right is given under Section 48(b) of the Public Land Act, which
reads:
Sec. 48. The following described citizens of the Philippines, occupying lands of the
public domain or claiming to own any such land or an interest therein, but those titles
have not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of
a certificate of title therefor, under the Land Registration Act, to wit:
xxx xxx xxx

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for at
least thirty years immediately preceding the filing of the application for confirmation
of title except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this chapter.
When the Public Land Act was first promulgated in 1936, the period of
possession deemed necessary to vest the right to register their title to
agricultural lands of the public domain commenced from July 26, 1894.
However, this period was amended by R.A. No. 1942, which provided that
the bona fide claim of ownership must have been for at least thirty (30) years.
Then in 1977, Section 48(b) of the Public Land Act was again amended, this
time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945.
This new starting point is concordant with Section 14(1) of the Property
Registration Decree.
Indeed, there are no material differences between Section 14(1) of the
Property Registration Decree and Section 48(b) of the Public Land Act, as
amended. True, the Public Land Act does refer to agricultural lands of the
public domain, while the Property Registration Decree uses the term alienable
and disposable lands of the public domain. It must be noted though that the
Constitution declares that alienable lands of the public domain shall be limited
to agricultural lands. Clearly, the subject lands under Section 48(b) of the
Public Land Act and Section 14(1) of the Property Registration Decree are of
the same type.
[24]

Did the enactment of the Property Registration Decree and the

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

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

Code. There is a consistent jurisprudential rule that properties classified as
alienable public land may be converted into private property by reason of
open, continuous and exclusive possession of at least thirty (30) years. With
such conversion, such property may now fall within the contemplation of
private lands under Section 14(2), and thus susceptible to registration by
those who have acquired ownership through prescription. Thus, even if
possession of the alienable public land commenced on a date later than June
12, 1945, and such possession being been open, continuous and exclusive,
then the possessor may have the right to register the land by virtue of Section
14(2) of the Property Registration Decree.
[25]

[26]

The land in question was found to be cocal in nature, it having been

planted with coconut trees now over fifty years old. The inherent nature of
the land but confirms its certification in 1980 as alienable, hence agricultural.
There is no impediment to the application of Section 14(1) of the Property
Registration Decree, as correctly accomplished by the lower courts.
[27]

The OSG posits that the Court of Appeals erred in holding that Naguit had
been in possession in the concept of owner for the required period. The
argument begs the question. It is again hinged on the assertionshown earlier
to be unfoundedthat there could have been no bona fide claim of ownership
prior to 1980, when the subject land was declared alienable or disposable.
We find no reason to disturb the conclusion of both the RTC and the Court
of Appeals that Naguit had the right to apply for registration owing to the
continuous possession by her and her predecessors-in-interest of the land
since 1945. The basis of such conclusion is primarily factual, and the Court
generally respects the factual findings made by lower courts. Notably,
possession since 1945 was established through proof of the existence of 50 to
60-year old trees at the time Naguit purchased the property as well as tax
declarations executed by Urbano in 1945. Although tax declarations and realty
tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of the possession in the concept of owner
for no one in his right mind would be paying taxes for a property that is not in
his actual or at least constructive possession. They constitute at least proof
that the holder has a claim of title over the property. The voluntary declaration

of a piece of property for taxation purposes manifests not only ones sincere
and honest desire to obtain title to the property and announces his adverse
claim against the State and all other interested parties, but also the intention
to contribute needed revenues to the Government. Such an act strengthens
ones bona fide claim of acquisition of ownership.
[28]

Considering that the possession of the subject parcel of land by the

respondent can be traced back to that of her predecessors-in-interest which
commenced since 1945 or for almost fifty (50) years, it is indeed beyond any
cloud of doubt that she has acquired title thereto which may be properly
brought under the operation of the Torrens system. That she has been in
possession of the land in the concept of an owner, open, continuous, peaceful
and without any opposition from any private person and the government itself
makes her right thereto undoubtedly settled and deserving of protection under
the law.
WHEREFORE, foregoing premises considered, the assailed Decision of
the Court of Appeals dated July 12, 2000 is hereby AFFIRMED. No costs.
SO ORDERED.

G.R. No. L-27088 July 31, 1975

HEIRS OF BATIOG LACAMEN, petitioners-appellants,
vs.
HEIRS OF LARUAN, * respondents-appellants.
Leonardo A. Amores for petitioners-appellants.
Reyes and Cabato for respondents-appellees.

MARTIN, J.:
Petition for review by certiorari of a decision of the Honorable Court of Appeals affirming the
judgment of the Court of First Instance of Baguio City in Civil Case No. 738 entitled "Heirs of Batiog
Lacamen vs. Heirs of Laruan" "... declaring the contract of sale between Lacamen and Laruan null
and void [for lack of approval of the Director of the Bureau of Non-Christian Tribes] ..."

Petitioners-appellants are the surviving heirs of Batiog Lacamen, while respondents-appellants are
the heirs of Laruan. 1
Sometime on January 28, 1928, Laruan executed a Deed of Sale in favor of Batiog
Lacamen 2 conveying for the sum of P300.00 his parcel of land situated in the sitio of La Trinidad,
Benguet, Mountain Province, comprising 86 ares and 16 centares 3 and covered by Certificate of Title No.
420 of the Registry of Benguet. The deed was acknowledged before Antonio Rimando, a notary public in
the City of Baguio. 4
Immediately after the sale, Laruan delivered the certificate of title to Lacamen. Thereupon, Lacamen
entered in possession and occupancy of the land without first securing the corresponding transfer
certificate of title in his name. He introduced various improvements and paid the proper taxes. His
possession was open, continuous, peaceful, and adverse. After his death in 1942, his heirs
remained in and continued possession and occupancy of the land. They too paid the taxes.
After the last Global War, Lacamen's heirs "started fixing up the papers of all the properties" left by
him 5 In or about June, 1957, they discovered that Laruan's heirs, respondents-appellants, were able to
procure a new owner's copy of Certificate of Title No. 420 by a petition filed in court alleging that their
copy has been lost or destroyed. Through this owner's copy, respondents-appellants caused the transfer
of the title on the lot in their names. 6 Transfer Certificate of Title No. T-775 was issued to them by the
Registry of Deeds of Benguet.
Refused of their demands for reconveyance of the title, petitioners-appellants sued respondentsappellants in the Court of First Instance of Baguio City on December 9, 1957, prayings among other
things, that they be declared owners of the subject property; that respondents-appellants be ordered
to convey to them by proper instruments or documents the land in question; and that the Register of
Deeds of Benguet be ordered to cancel Transfer Certificate of Title No. T-775 and issue in lieu
thereof a new certificate of title in their names. 7
In answer, respondents-appellants traversed the averments in the complaint and claim absolute
ownership over the land. They asserted that their deceased father, Laruan, never sold the property
and that the Deed of Sale was not thumbmarked by him. 8
On 5 April 1962, the Court of First Instance of Baguio City found for respondents-appellants and
against petitioners-appellants. Forthwith, petitioners-appellants appealed to the Court of Appeals.
On 7 December 1966, the Court of Appeals sustained the trial court.
In this review, petitioners-appellants press that the Court of Appeals erred
I
... IN DECLARING THE SALE BETWEEN LACAMEN AND LARUAN TO BE NULL
AND VOID.
II

... IN APPLYING STRICTLY THE PROVISIONS OF SECTIONS 118 AND 122 OF

ACT NO. 2874 AND SECTIONS 145 AND 164 OF THE CODE OF MINDANAO AND
SULU.
III
... IN AFFIRMING THE DECISION OF THE COURT OF FIRST INSTANCE OF
BAGUIO CITY.
which assignments could be whittled down into the pervading issue of whether the deceased Batiog
Lacamen and/or his heirs, herein petitioners-appellants, have validly acquired ownership over the
disputed parcel of land.
The 1917 Administrative Code of Mindanao and Sulu declares in its Section 145 that no contract or
agreement relating to real property shall be made by any person with any non-Christian inhabitant of
the Department of Mindanao and Sulu, unless such contract shall bear the approval of the provincial
governor of the province wherein the contract was executed, or his representative duly authorized
for such purpose in writing endorsed upon it. 9 Any contract or agreement in violation of this section is "null and void" under
the succeeding Section 146.

10

On 24 February 1919, Act No. 2798 was approved by the Philippine Legislature extending to the
Mountain Province and the Province of Nueva Vizcaya the laws and other legal provisions pertaining
to the provinces and minor political subdivisions of the Department of Mindanao and Sulu, with
the specific proviso that the approval of the land transaction shall be by the Director of the Bureau of
Non-Christian Tribes. 11
Then on 29 November 1919, came Act No. 2874 otherwise known as "The Public Land Act". It
provided in Section 118 thereof that "Conveyances and encumbrances made by persons belonging
to the so-called 'non-Christian tribes', when proper, shall not be valid unless duly approved by the
Director of the Bureau of non-Christian Tribes." Any violation of this injunction would result in the
nullity and avoidance of the transaction under the following Section 122.
During the regime of the Commonwealth, C.A. 141 otherwise known as "The Public Land Act" was
passed November 7, 1936 amending Act No. 2874. However, it contained a similar provision in
its Section 120 that "Conveyances and encumbrances made by illiterate non-Christians shall not be
valid unless duly approved by the Commissioner of Mindanao and Sulu.
The contracting parties, Lacamen and Laruan, are bound by the foregoing laws, since both of them
are illiterate Igorots, belonging to the "non-Christian Tribes" of the Mountain Province 12 , and the
controverted land was derived from a Free Patent 13 or acquired from the public domain. 14
The trial court did show cordiality to judicial pronouncements when it avoided the realty sale between
Lacamen and Laruan for want of approval of the Director of the Bureau of Non-Christian Tribes. For
jurisprudence decrees that non-approved conveyances and encumbrances of realty by illiterate nonChristians are not valid, i.e., not binding or obligatory. 15

Nevertheless, the thrust of the facts in the case before Us weakens the gathered strength of the
cited rule. The facts summon the equity of laches.
"Laches" has been defined as "such neglect or ommission to assert a right, taken in conjunction with
lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar
in equity." 16 It is a delay in the assertion of a right "which works disadvantage to another" 17 because of
the "inequity founded on some change in the condition or relations of the property or parties." 18 It is based
on public policy which, for the peace of society, 19 ordains that relief will be denied to a stale demand
which otherwise could be a valid claim. 20 It is different from and applies independently of prescription.
While prescription is concerned with the fact of delay, laches is concerned with the effect of delay.
Prescription is concerned with the effect of delay. Prescription is a matter of time; laches is principally a
question of inequity of permitting a claim to be enforced, this inequity being founded on some change in
the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches
applies in equity, whereas prescription applies at law. Prescription is based on a fixed time, laches is
not. 21
Laruan's sale of the subject lot to Lacamen could have been valid were it not for the sole fact that it
lacked the approval of the Director of the Bureau of Non-Christian Tribes. There was impressed
upon its face full faith and credit after it was notarized by the notary public. 22 The non-approval was
the only "drawback" of which the trial court has found the respondents-appellants to "have taken
advantage as their lever to deprive [petitioners-appellants] of this land and that their motive is out and out
greed." 23 As between Laruan and Lacamen, the sale was regular, not infected with any
flaw. Laruan's delivery of his certificate of title to Lacamen just after the sale symbolizes nothing more
than a bared recognition and acceptance on his part that Lacamen is the new owner of the property.
Thus, not any antagonistic show of ownership was ever exhibited by Laruan after that sale and until his
death in May 1938.
From the transfer of the land on January 28, 1928, Lacamen possessed and occupied the ceded
land in concepto de dueo until his death in April 1942. Thereafter his heirs, petitioners-appellants
herein, took over and exercised dominion over the property, likewise unmolested for nearly 30 years
(1928-1957) until the heirs of Laruan, respondents-appellants, claimed ownership over the property
and secured registration of the same in their names. At the trial, petitioners-appellants have been
found to have introduced improvements on the land consisting of houses, barns, greenhouses,
walls, roads, etc., and trees valued at P38,920.00. 24
At this state, therefore, respondents-appellants' Claim of absolute ownership over the land cannot be
countenanced. It has been held that while a person may not acquire title to the registered property
through continuous adverse possession, in derogation of the title of the original registered owner, the
heir of the latter, however, may lose his right to recover back the possession of such property and
the title thereto, by reason of laches. 25 Much more should it be in the instant case where the possession
of nearly 30 years or almost half a century now is in pursuance of sale which regrettably did not bear the
approval of the executive authority but which the vendor never questioned during his life
time. Laruan's laches extends to his heirs, the respondents-appellants herein, since they stand in privity
with him. 26
Indeed, in a like case, 27 it was ruled that

Courts can not look with favor at parties who, by their silence, delay and inaction,
knowingly induce another to spend time, effort and expense in cultivating the land,
paying taxes and making improvements thereon for 30 long years, only to spring
from ambush and claim title when the possessor's efforts and the rise of land values
offer an opportunity to make easy profit at his expense.
For notwithstanding the invalidity of the sale, the vendor Laruan suffered the vendee Lacamen to
enter, possess and occupy the property in concepto de dueo without demurrer and molestation,
from 1928, until the former's death in 1938; and when respondents-appellants succeeded to the
estate of their father, they too kept silent, never claiming that the lot is their own until in 1957 or after
almost 30 years they took "advantage of the [non-approval of the sale] as their lever to deprive
[petitioners-appellants] of this land" with a motive that was "out and out greed." Even granting,
therefore, that no prescription lies against their father's recorded title, their quiescence and inaction
for almost 30 years now commands the imposition of laches against their adverse claim. (Miguel,
footnote 27)
It results that as against Laruan and his heirs, respondents-appellants herein, the late Batiog
Lacamen and his heirs, petitioners-appellants herein, have superior right and, hence, have validly
acquired ownership of the litigated land. Vigilantibus non dormientibos sequitas subvenit.
IN VIEW OF THE FOREGOING, the judgment of the Court of Appeals affirming that of the trial court
is hereby reversed and set aside.
The petitioners-appellants are hereby declared the lawful owners of the land in question.
Accordingly, Transfer Certificate of Title No. T-775 in the name of respondents-appellants is hereby
cancelled and in lieu thereof the Register of Deeds of Benguet is ordered to issue a new transfer
certificate of title in the name of petitioners-appellants.
Without pronouncement as to costs.
SO ORDERED.

G.R. No. 92161

March 18, 1991

SIMPLICIO BINALAY, PONCIANO GANNABAN, NICANOR MACUTAY, DOMINGO ROSALES,

GREGORIO ARGONZA, EUSTAQUIO BAUA, FLORENTINO ROSALES, TEODORO
MABBORANG, PATRICIO MABBORANG and FULGENCIO MORA, petitioners
vs.
GUILLERMO MANALO and COURT OF APPEALS, respondents.
Josefin De Alban Law Office for Petitioners.
FELICIANO, J.:

The late Judge Taccad originally owned a parcel of land situated in Tumauini, Isabela having an
estimated area of twenty (20) hectares. The western portion of this land bordering on the Cagayan
River has an elevation lower than that of the eastern portion which borders on the national road.
Through the years, the western portion would periodically go under the waters of the Cagayan River
as those waters swelled with the coming of the rains. The submerged portion, however, would reappear during the dry season from January to August. It would remain under water for the rest of the
year, that is, from September to December during the rainy season.
The ownership of the landholding eventually moved from one person to another. On 9 May 1959,
respondent Guillermo Manalo acquired 8.65 hectares thereof from Faustina Taccad, daughter of
Judge Juan Taccad. The land sold was described in the Deed of Absolute Sale as follows:
1

. . . a parcel of agricultural land in Balug, Tumauini, Isabela, containing an area of 8.6500

hectares, more or less; bounded on the North by Francisco Forto on the East by National
Road; on South by Julian Tumolva and on the West by Cagayan River; declared for taxation
under Tax Declaration No. 12681 in the name of Faustina Taccad, and assessed at P 750.00.
...
Later in 1964, respondent Manalo purchased another 1.80 hectares from Gregorio Taguba who had
earlier acquired the same from Judge Juan Taccad. The second purchase brought the total
acquisition of respondent Manalo to 10.45 hectares. The second piece of property was more
particularly described as follows:
. . . a piece of agricultural land consisting of tobacco land, and containing an area of 18,000
square meters, more or less, bounded on the North by Balug Creek; on the South, by
Faustina Taccad (now Guillermo R. Manalo); on the East, by a Provincial Road; and on the
West, by Cagayan River assessed at P 440.00, as tax Declaration No. 3152. . . .
2

During the cadastral survey conducted at Balug, Tumauini, Isabela on 21 October 1969, the two (2)
parcels of land belonging to respondent Manalo were surveyed and consolidated into one lot,
designated as Lot No. 307, Pls-964. Lot 307 which contains 4.6489 hectares includes: (a) the whole
of the 1.80 hectares acquired from Gregorio Taguba; and (b) 2.8489 hectares out of the 8.65
hectares purchased from Faustina Taccad. As the survey was conducted on a rainy month, a portion
of the land bought from Faustina Taccad then under water was left unsurveyed and was not included
in Lot 307.
The Sketch Plan submitted during the trial of this case and which was identified by respondent
Manalo shows that the Cagayan River running from south to north, forks at a certain point to form
two (2) branchesthe western and the eastern branchesand then unites at the other end, further
north, to form a narrow strip of land. The eastern branch of the river cuts through the land of
respondent Manalo and is inundated with water only during the rainy season. The bed of the eastern
branch is the submerged or the unsurveyed portion of the land belonging to respondent Manalo. For
about eight (8) months of the year when the level of water at the point where the Cagayan River
forks is at its ordinary depth, river water does not flow into the eastern branch. While this condition
persists, the eastern bed is dry and is susceptible to cultivation.
3

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

It was found to have a total area of 22.7209 hectares and was designated as Lot 821 and Lot 822.
The area of Lot 822 is 10.8122 hectares while Lot 821 has an area of 11.9087 hectares. Lot 821 is
located directly opposite Lot 307 and is separated from the latter only by the eastern branch of the
Cagayan River during the rainy season and, during the dry season, by the exposed, dry river bed,
being a portion of the land bought from Faustina Taccad. Respondent Manalo claims that Lot 821
also belongs to him by way of accretion to the submerged portion of the property to which it is
adjacent.
Petitioners who are in possession of Lot 821, upon the other hand, insist that they own Lot 821.
They occupy the outer edges of Lot 821 along the river banks, i.e., the fertile portions on which they
plant tobacco and other agricultural products. They also cultivate the western strip of the unsurveyed
portion during summer. This situation compelled respondent Manalo to file a case for forcible entry
against petitioners on 20 May 1969. The case was dismissed by the Municipal Court of Tumauini,
Isabela for failure of both parties to appear. On 15 December 1972, respondent Manalo again filed a
case for forcible entry against petitioners. The latter case was similarly dismissed for lack of
jurisdiction by the Municipal Court of Tumauini, Isabela.
5

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

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

WHEREFORE, in the light of the foregoing premises, the Court renders judgment against the
defendants and in favor of the plaintiff and orders:
1. That plaintiff, Guillermo Manalo, is declared the lawful owner of the land in question, Lot
No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in
paragraph 2-b of the Complaint;
2. That the defendants are hereby ordered to vacate the premises of the land in question, Lot
No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in
paragraph 2-b of the Complaint;

3. That the defendants are being restrained from entering the premises of the land in
question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly
described in paragraph 2-b of the Complaint; and
4. That there is no pronouncement as to attorney's fees and costs.
SO ORDERED.

Petitioners appealed to the Court of Appeals which, however, affirmed the decision of the trial court.
They filed a motion for reconsideration, without success.
While petitioners insist that Lot 821 is part of an island surrounded by the two (2) branches of the
Cagayan River, the Court of Appeals found otherwise. The Court of Appeals concurred with the
finding of the trial court that Lot 821 cannot be considered separate and distinct from Lot 307 since
the eastern branch of the Cagayan River substantially dries up for the most part of the year such that
when this happens, Lot 821 becomes physically (i.e., by land) connected with the dried up bed
owned by respondent Manalo. Both courts below in effect rejected the assertion of petitioners that
the depression on the earth's surface which separates Lot 307 and Lot 821 is, during part of the
year, the bed of the eastern branch of the Cagayan River.
It is a familiar rule that the findings of facts of the trial court are entitled to great respect, and that
they carry even more weight when affirmed by the Court of Appeals. This is in recognition of the
peculiar advantage on the part of the trial court of being able to observe first-hand the deportment of
the witnesses while testifying. Jurisprudence is likewise settled that the Court of Appeals is the final
arbiter of questions of fact. But whether a conclusion drawn from such findings of facts is correct, is
a question of law cognizable by this Court.
9

10

11

In the instant case, the conclusion reached by both courts below apparently collides with their
findings that periodically at the onset of and during the rainy season, river water flows through the
eastern bed of the Cagayan River. The trial court held:
The Court believes that the land in controversy is of the nature and character of alluvion
(Accretion), for it appears that during the dry season, the body of water separating the same
land in controversy (Lot No. 821, Pls-964) and the two (2) parcels of land which the plaintiff
purchased from Gregorio Taguba and Justina Taccad Cayaba becomes a marshy land and is
only six (6) inches deep and twelve (12) meters in width at its widest in the northern tip
(Exhs. "W", "W-l", "W-2", "W-3" and "W-4"), It has been held by our Supreme Court that "the
owner of the riparian land which receives the gradual deposits of alluvion, does not have to
make an express act of possession. The law does not require it, and the deposit created by
the current of the water becomes manifest" (Roxas vs. Tuazon, 6 Phil. 408).
12

The Court of Appeals adhered substantially to the conclusion reached by the trial court, thus:
As found by the trial court, the disputed property is not an island in the strict sense of the
word since the eastern portion of the said property claimed by appellants to be part of the
Cagayan River dries up during summer. Admittedly, it is the action of the heavy rains which

comes during rainy season especially from September to November which increases the
water level of the Cagayan river. As the river becomes swollen due to heavy rains, the lower
portion of the said strip of land located at its southernmost point would be inundated with
water. This is where the water of the Cagayan river gains its entry. Consequently, if the water
level is high the whole strip of land would be under water.
In Government of the Philippine Islands vs. Colegio de San Jose, it was held that
According to the foregoing definition of the words "ordinary" and "extra-ordinary," the highest
depth of the waters of Laguna de Bay during the dry season is the ordinary one, and the
highest depth they attain during the extra-ordinary one (sic); inasmuch as the former is the
one which is regular, common, natural, which occurs always or most of the time during the
year, while the latter is uncommon, transcends the general rule, order and measure, and
goes beyond that which is the ordinary depth. If according to the definition given by Article 74
of the Law of Waters quoted above, the natural bed or basin of the lakes is the ground
covered by their waters when at their highest ordinary depth, the natural bed or basin of
Laguna de Bay is the ground covered by its waters when at their highest depth during the
dry season, that is up to the northeastern boundary of the two parcels of land in question.
We find the foregoing ruling to be analogous to the case at bar. The highest ordinary level of the
waters of the Cagayan River is that attained during the dry season which is confined only on the
west side of Lot [821] and Lot [822]. This is the natural Cagayan river itself. The small residual of
water between Lot [821] and 307 is part of the small stream already in existence when the whole of
the late Judge Juan Taccad's property was still susceptible to cultivation and uneroded.
13

The Court is unable to agree with the Court of Appeals that Government of the Philippine Islands
vs. Colegio de San Jose is applicable to the present case. That case involved Laguna de Bay;
since Laguna de Bay is a lake, the Court applied the legal provisions governing the ownership and
use of lakes and their beds and shores, in order to determine the character and ownership of the
disputed property. Specifically, the Court applied the definition of the natural bed or basin of lakes
found in Article 74 of the Law of Waters of 3 August 1866. Upon the other hand, what is involved in
the instant case is the eastern bed of the Cagayan River.
14

We believe and so hold that Article 70 of the Law of Waters of 3 August 1866 is the law applicable to
the case at bar:
Art. 70. The natural bed or channel of a creek or river is the ground covered by its waters
during the highest floods. (Emphasis supplied)
We note that Article 70 defines the natural bed or channel of a creek or river as the ground covered
by its waters during the highest floods. The highest floods in the eastern branch of the Cagayan
River occur with the annual coming of the rains as the river waters in their onward course cover the
entire depressed portion. Though the eastern bed substantially dries up for the most part of the year
(i.e., from January to August), we cannot ignore the periodical swelling of the waters ( i.e., from
September to December) causing the eastern bed to be covered with flowing river waters.

The conclusion of this Court that the depressed portion is a river bed rests upon evidence of
record. Firstly, respondent Manalo admitted in open court that the entire area he bought from
Gregorio Taguba was included in Lot 307. If the 1.80 hectares purchased from Gregorio Taguba
was included in Lot 307, then the Cagayan River referred to as the western boundary in the Deed of
Sale transferring the land from Gregorio Taguba to respondent Manalo as well as the Deed of Sale
signed by Faustina Taccad, must refer to the dried up bed (during the dry months) or the eastern
branch of the river (during the rainy months). In the Sketch Plan attached to the records of the case,
Lot 307 is separated from the western branch of the Cagayan River by a large tract of land which
includes not only Lot 821 but also what this Court characterizes as the eastern branch of the
Cagayan River.
1wphi1

15

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

17

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

Now, then, pursuant to Article 420 of the Civil Code, respondent Manalo did not acquire private
ownership of the bed of the eastern branch of the river even if it was included in the deeds of
absolute sale executed by Gregorio Taguba and Faustina Taccad in his favor. These vendors could
not have validly sold land that constituted property of public dominion. Article 420 of the Civil Code
states:
The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth. (Emphasis supplied)

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

La naturaleza especial de los rios, en punto a su disfrute general, hace que sea necesario
considerar en su relacion de dominio algo mas que sus aguas corrientes. En efecto en todo
rio es preciso distinguir 1. esta agua corriente; 2. el alveo o cauce, y 3. las riberas. Ahora
bien: son estas dos ultimas cosas siempre de dominio publico, como las aguas?
Realmente no puede imaginarse un rio sin alveo y sin ribera; de suerte que al decir el
Codigo civil que los rios son de dominio publico, parece que debe ir implicito el dominio
publico de aquellos tres elementos que integran el rio. Por otra parte, en cuanto a los alveos
o cauces tenemos la declaracion del art. 407, num 1, donde dice: son de dominion publico . .
. los rios y sus cauces naturales; declaracion que concuerda con lo que dispone el art. 34 de
la ley de [Aguas], segun el cual, son de dominion publico: 1. los alveos o cauces de los
arroyos que no se hallen comprendidos en el art. 33, y 2. los alveos o cauces naturales de
los riosen la extension que cubran sus aguas en las mayores crecidas
ordinarias. (Emphasis supplied)
20

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

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

Assuming (arguendo only) that the Cagayan River referred to in the Deeds of Sale transferring
ownership of the land to respondent Manalo is the western branch, the decision of the Court of
Appeals and of the trial court are bare of factual findings to the effect that the land purchased by

respondent Manalo received alluvium from the action of the aver in a slow and gradual manner. On
the contrary, the decision of the lower court made mention of several floods that caused the land to
reappear making it susceptible to cultivation. A sudden and forceful action like that of flooding is
hardly the alluvial process contemplated under Article 457 of the Civil Code. It is the slow and hardly
perceptible accumulation of soil deposits that the law grants to the riparian owner.
Besides, it is important to note that Lot 821 has an area of 11.91 hectares. Lot 821 is the northern
portion of the strip of land having a total area of 22.72 hectares. We find it difficult to suppose that
such a sizable area as Lot 821 resulted from slow accretion to another lot of almost equal size. The
total landholding purchased by respondent Manalo is 10.45 hectares (8.65 hectares from Faustina
Taccad and 1.80 hectares from Gregorio Taguba in 1959 and 1964, respectively), in fact even
smaller than Lot 821 which he claims by way of accretion. The cadastral survey showing that Lot
821 has an area of 11.91 hectares was conducted in 1969. If respondent Manalo's contention were
accepted, it would mean that in a span of only ten (10) years, he had more than doubled his
landholding by what the Court of Appeals and the trial court considered as accretion. As already
noted, there are steep vertical dike-like slopes separating the depressed portion or river bed and Lot
821 and Lot 307. This topography of the land, among other things, precludes a reasonable
conclusion that Lot 821 is an increment to the depressed portion by reason of the slow and constant
action of the waters of either the western or the eastern branches of the Cagayan River.
We turn finally to the issue of ownership of Lot 821. Respondent Manalo's claim over Lot 821 rests
on accretion coupled with alleged prior possession. He alleged that the parcels of land he bought
separately from Gregorio Taguba and Faustina Taccad were formerly owned by Judge Juan Taccad
who was in possession thereof through his (Judge Taccad's) tenants. When ownership was
transferred to him, respondent Manalo took over the cultivation of the property and had it declared
for taxation purposes in his name. When petitioners forcibly entered into his property, he twice
instituted the appropriate action before the Municipal Trial Court of Tumauini, Isabela. Against
respondent Manalo's allegation of prior possession, petitioners presented tax declarations standing
in their respective names. They claimed lawful, peaceful and adverse possession of Lot 821 since
1955.
If respondent Manalo had proved prior possession, it was limited physically to Lot 307 and the
depressed portion or the eastern river bed. The testimony of Dominga Malana who was a tenant for
Justina Taccad did not indicate that she was also cultivating Lot 821. In fact, the complaints for
forcible entry lodged before the Municipal Trial Court of Tumauini, Isabela pertained only to Lot 307
and the depressed portion or river bed and not to Lot 821. In the same manner, the tax declarations
presented by petitioners conflict with those of respondent Manalo. Under Article 477 of the Civil
Code, the plaintiff in an action for quieting of title must at least have equitable title to or interest in the
real property which is the subject matter of the action. The evidence of record on this point is less
than satisfactory and the Court feels compelled to refrain from determining the ownership and
possession of Lot 821, adjudging neither petitioners nor respondent Manalo as owner(s) thereof.
WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-GR CV No. 04892 are
hereby SET ASIDE. Respondent Manalo is hereby declared the owner of Lot 307. The regularly
submerged portion or the eastern bed of the Cagayan River is hereby DECLARED to be property of

public dominion. The ownership of Lot 821 shall be determined in an appropriate action that may be
instituted by the interested parties inter se. No pronouncement as to costs.
SO ORDERED.

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

REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE HONORABLE

COURT OF APPEALS AND REPUBLIC REAL ESTATE
CORPORATION,respondents. CULTURAL CENTER
OF THE
PHILIPPINES, intervenor.
[G.R. No. 105276. November 25, 1998]

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

At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised
Rules of Court. Here, the Court is confronted with a case commenced before the then Court of
First Instance (now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades
back, that has spanned six administrations of the Republic and outlasted the tenure of
ten(10) Chief Justices of the Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision,
dated January 29, 1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals [1],
which affirmed with modification the Decision of the former Court of First Instance of
Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, entitled Republic of the Philippines
versus Pasay City and Republic Real Estate Corporation.
The facts that matter are, as follows:

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

SECTION 1. Authority is hereby granted to all municipalities and chartered cities to

undertake and carry out at their own expense the reclamation by dredging, filling, or
other means, of any foreshore lands bordering them, and to establish, provide,
construct, maintain and repair proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in consultation with the
Secretary of Finance and the Secretary of Public Works and Communications.
On May 6, 1958, invoking the aforecited provision of RA 1899, the Pasay City Council
passed Ordinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore
lands in Pasay City, empowering the City Mayor to award and enter into reclamation contracts,
and prescribing terms and conditions therefor. The said Ordinance was amended on April 21,
1959 by Ordinance No. 158, which authorized the Republic Real Estate Corporation (RREC) to
reclaim foreshore lands of Pasay City under certain terms and conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement[2] for the reclamation of
the foreshore lands in Pasay City.
On December 19, 1961, the Republic of the Philippines (Republic) filed a Complaint[3] for
Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and
Mandatory Injunction, docketed as Civil Case No. 2229-P before the former Court of First
Instance of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines filed an Amended
Complaint[4] questioning subject Agreement between Pasay City and RREC (Exhibit P) on the
grounds that the subject-matter of such Agreement is outside the commerce of man, that its terms
and conditions are violative of RA 1899, and that the said Agreement was executed without any
public bidding.
The Answers[5] of RREC and Pasay City, dated March 10 and March 14, 1962, respectively,
averred that the subject-matter of said Agreement is within the commerce of man, that the phrase
foreshore lands within the contemplation of RA 1899 has a broader meaning than the cited
definition of the term in the Words and Phrases and in the Websters Third New International
Dictionary and the plans and specifications of the reclamation involved were approved by the
authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First
Instance of Rizal (Branch 7, Pasay City) issued an Order[6] the dispositive portion of which was
to the following effect:

WHEREFORE, the court hereby orders the defendants, their agents, and all
persons claiming under them, to refrain from further reclaiming or committing
acts of dispossession or dispoilation over any area within the Manila Bay or
the Manila Bay Beach Resort, until further orders of the court.
On the following day, the same trial court issued a writ of preliminary injunction [7] which
enjoined the defendants, RREC and Pasay City, their agents, and all persons claiming under them
from further reclaiming or committing acts of dispossession.
Thereafter, a Motion to Intervene[8], dated June 27, 1962, was filed by Jose L. Bautista,
Emiliano Custodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martinez,
Emilia E. Paez, Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento,
Jesus Yujuico, Zamora Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan
Distributors of the Philippines, and Bayview Hotel, Inc. stating inter alia that they were buyers
of lots in the Manila Bay area being reclaimed by RREC, whose rights would be affected by
whatever decision to be rendered in the case. The Motion was granted by the trial court and the
Answer attached thereto admitted.[9]
The defendants and the intervenors then moved to dismiss[10] the Complaint of the Republic,
placing reliance on Section 3 of Republic Act No. 5187, which reads:

Sec. 3. Miscellaneous Projects

xxx

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

finally, that the foregoing provisions and those of other laws, executive orders,
rules and regulations to the contrary notwithstanding, existing rights, projects
and/or contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected. x x x. (underscoring ours)
Since the aforecited law provides that existing contracts shall be respected, movants contended
that the issues raised by the pleadings have become moot, academic and of no further validity or
effect.
Meanwhile, the Pasay Law and Conscience Union, Inc. (PLCU) moved to intervene[11],
alleging as legal interest in the matter in litigation the avowed purpose of the organization for the
promotion of good government in Pasay City. In its Order of June 10, 1969, the lower court of
origin allowed the said intervention[12].
On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:

WHEREFORE, after carefully considering (1) the original complaint, (2) the
first Amended Complaint, (3) the Answer of Defendant Republic Real Estate
Corporation to the first Amended Complaint, (4) the Answer of Defendant
Pasay City to the first Amended Complaint, (5) the Second Amended
Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to
the Second Amended Complaint, (7) the Answer of Defendant Pasay City to
the Second Amended Complaint, (8) the Memorandum in Support of
Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the
Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City
and Defendant Republic Real Estate Corporation, (10) the Answer in
Intervention of Intervenors Bautista, et. al., (11) Plaintiffs Opposition to
Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of
Intervenors Bautista, et. al. , (13) the Stipulation of Facts by all the parties,
(14) the Motion for Leave to Intervene of Intervenor Pasay Law and
Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene
of Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and
Conscience Union, Inc., (17) the Supplement to Opposition to Motion to
Intervene of Defendant Pasay City and Republic Real Estate Corporation,
(18) the Complaint in Intervention of Intervenor Pasay Law and Conscience
Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation,
(20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in
Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate

Corporation, and Intervenors Bautista, et. al., (22) the Opposition of Plaintiff
to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and
Conscience Union, Inc., (24) the Memorandum of the Defendant Republic
Real Estate Corporation, (25) the Memorandum for the Intervenor Pasay Law
and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by the
Office of the Solicitor General, and all the documentary evidence by the
parties to wit: (a) Plaintiffs Exhibits A to YYY-4, (b) Defendant Republic Real
Estate Corporations Exhibits 1-RREC to 40-a and (c) Intervenor Pasay Law
and Conscience Union, Incs., Exhibits A-PLACU to C-PLACU, the Court
hereby:
(1) Denies the Motion to Dismiss filed on January 10, 1968, by Defendant Republic
Real Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this
Court that Republic Act No. 5187 was not passed by Congress to cure any defect in
the ordinance and agreement in question and that the passage of said Republic Act
No. 5187 did not make the legal issues raised in the pleadings moot, academic and of
no further validity or effect; and
(2) Renders judgment:
(a) dismissing the Plaintiffs Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and
Conscience Union, Inc.,
(c)Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City
to have all the plans and specifications in the reclamation approved by the Director of
Public Works and to have all the contracts and sub-contracts for said reclamation
awarded by means of, and only after, public bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon
as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to the Director of Public Works,
and shall have obtained approval thereof, and as soon as the corresponding public
bidding for the award to the contractor and sub-contractor that will undertake the
reclamation project shall have been effected.
No pronouncement as to costs.

SO ORDERED. (See Court of Appeals Decision dated January 28, 1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of
Appeals. However, on January 11, 1973, before the appeal could be resolved, Presidential Decree
No. 3-A issued, amending Presidential Decree No. 3, thus:

SECTION 1. Section 7 of Presidential Decree No. 3, dated September 26,

1972, is hereby amended by the addition of the following paragraphs:
The provisions of any law to the contrary notwithstanding, the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government
or any person authorized by it under a proper contract.
All reclamations made in violation of this provision shall be forfeited to the State
without need of judicial action.
Contracts for reclamation still legally existing or whose validity has been accepted by
the National Government shall be taken over by the National Government on the
basis of quantum meruit, for proper prosecution of the project involved by
administration.
On November 20, 1973, the Republic and the Construction Development Corporation of the
Philippines (CDCP) signed a Contract[13] for the Manila-Cavite Coastal Road Project(Phases
I and II) which contract included the reclamation and development of areas covered by the
Agreement between Pasay City and RREC. Then, there was issued Presidential Decree No. 1085
which transferred to the Public Estate Authority (PEA) the rights and obligations of the Republic
of the Philippines under the contract between the Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the Republic, on the one
hand, and those of Pasay City and RREC, on the other, did not work out. The parties involved
failed to hammer out a compromise.
On January 28, 1992, the Court of Appeals came out with a Decision [14] dismissing the
appeal of the Republic and holding, thus:

WHEREFORE, the decision appealed from is hereby AFFIRMED with the

following modifications:
1. The requirement by the trial court on public bidding and the submission of RRECs
plans and specification to the Department of Public Works and Highways in order

that RREC may continue the implementation of the reclamation work is deleted for
being moot and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and
possession over all vacant spaces in the twenty-one hectare area already reclaimed by
Pasay City and RREC at the time it took over the same. Areas thereat over which
permanent structures has (sic) been introduced shall, including the structures, remain
in the possession of the present possessor, subject to any negotiation between Pasay
City and the said present possessor, as regards the continued possession and
ownership of the latter area.
3. Sustaining RRECs irrevocable option to purchase sixty (60%) percent of the
Twenty-One (21) hectares of land already reclaimed by it, to be exercised within one
(1) year from the finality of this decision, at the same terms and condition embodied
in the Pasay City-RREC reclamation contract, and enjoining appellee Pasay City to
respect RRECs option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of
such Decision of the Court of Appeals, contending, among others, that RREC had actually
reclaimed Fifty-Five (55) hectares, and not only Twenty-one (21) hectares, and the respondent
Court of Appeals erred in not awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion for
Reconsideration, by amending the dispositive portion of its judgment of January 28, 1992, to
read as follows:

WHEREFORE, the dispositive portion of our Decision dated January 28,

1992 is hereby AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the submission of the
RRECs plans and specification to the Department of Public Works and Highways in
order that RREC may continue the implementation of the reclamation work is deleted
for being moot and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and
possession of the above enumerated lots (1 to 9).

3. Sustaining RRECs irrevocable option to purchase sixty (60%) percent of the land
referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from
the finality of this Decision, at the same terms and condition embodied in the Pasay
City-RREC reclamation contract, and enjoining Pasay City to respect RRECs
irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals aforementioned, the
Republic of the Philippines, as well as Pasay City and RREC, have come to this Court to seek
relief, albeit with different prayers.
On September 10, 1997, the Court commissioned the former thirteenth Division of Court of
Appeals to hear and receive evidence on the controversy. The corresponding Commissioners
Report, dated November 25, 1997, was submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines (CCP) filed a Petition in
Intervention, theorizing that it has a direct interest in the case being the owner of subject
nine (9)lots titled in its (CCP) name, which the respondent Court of Appeals ordered to be turned
over to Pasay City. The CCP, as such intervenor, was allowed to present its evidence, as it did,
before the Court of Appeals, which evidence has been considered in the formulation of this
disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of
errors, that:
I

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF

PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE
RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY CITY
AND RREC;
II

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD

RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER TO
PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9)
LOTS TITLED IN THE NAME OF CCP.

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

THE COURT OF APPEALS ERRED IN NOT DECLARING

PRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;
II

THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN

FAVOR OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21,
1959 and the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the
negative.
Section 1 of RA 1899, reads:

SECTION 1. Authority is hereby granted to all municipalities and chartered

cities to undertake and carry out at their own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering them, and
to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may
determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore
lands along the seaside of Pasay City[15]; that what Pasay City has are submerged or offshore
areas outside the commerce of man which could not be a proper subject matter of the Agreement
between Pasay City and RREC in question as the area affected is within the National Park,
known as Manila Bay Beach Resort, established under Proclamation No. 41, dated July 5, 1954,
pursuant to Act No. 3915, of which area it (Republic) has been in open, continuous and peaceful
possession since time immemorial.
Petitioner faults the respondent court for unduly expanding what may be considered
foreshore land through the following disquisition:

The former Secretary of Justice Alejo Mabanag, in response to a request for

an opinion from the then Secretary of Public Works and Communications as

to whether the term foreshore areas as used in Section I of the immediately

aforequoted law is that defined in Websters Dictionary and the Law of Waters
so as to make any dredging or filling beyond its prescribed limit illegal,
opined:
According to the basic letter of the Director of Public Works, the law of
Waters speaks of shore and defines it thus: that space movement of the
tide. Its interior or terrestrial limit in the line reached by highest
equinoctial tides.
Websters definition of foreshore reads as follows:
That part of the shore between high water and low-water marks usually
fixed at the line to which the ordinary means tide flows: also, by
extension, the beach, the shore near the waters edge.
If we were to be strictly literal the term foreshore or foreshore lands
should be confined to but a portion of the shore, in itself a very limited
area. (p. 6, Intervenors-appellees brief).
Bearing in mind the (Websters and Law of Waters) definitions of shore
and of foreshore lands, one is struck with the apparent inconsistency
between the areas thus described and the purpose to which that area,
when reclaimed under the provision of Republic Act No. 1899, shall be
devoted. Section I (of said Law) authorizes the construction thereat of
adequate docking and harbor facilities. This purpose is repeated in
Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend only
from 10 to 20 meters along the coast. Not very much more if at all. In
fact, certain parts in Manila bordering on Manila Bay, has no
foreshore to speak of since the sea washes the sea wall.
It does not seem logical, then, that Congress had in mind. Websters
limited concept of foreshore when it enacted Republic Act No. 1899,
unless it intends that the wharves, piers, docks, etc. should be
constructed parallel to the shore, which is impractical.

Since it is to be presumed that Congress could not have intended to

enact an ineffectual measure not one that would lead to absurd
consequences, it would seem that it used foreshore in a sense wider in
scope that that defined by Webster. xxx
To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant
could not offer any refutation or contrary opinion. Neither can we. In fact, the
above construction is consistent with the rule on context in statutory
construction which provides that in construing a statute, the same must be
construed as a whole. The particular words, clauses and phrases should not
be studied as detached and isolated expressions, but the whole and every part
of the statute must be considered in fixing the meaning of any of its parts in
order to produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil.
709). There are two reasons for this. Firstly, the force and significance of
particular expressions will largely depend upon the connection in which they
are found and their relation to the general subject-matter of the law. The
legislature must be understood to have expressed its whole mind on the
special object to which the legislative act is directed but the vehicle for the
expressions of that meaning is the statute, considered as one entire and
continuous act, and not as an agglomeration of unrelated clauses . Each
clause or provision will be illuminated by those which are cognate to it and by
the general tenor of the whole statute and thus obscurities and ambiguities
may often be cleared up by the most direct and natural means. Secondly, effect
must be given, if it is possible, to every word and clause of the statute, so that
nothing shall be left devoid of meaning or destitute of force. To this end, each
provision of the statute should be read in the light of the whole. For the
general meaning of the legislature, as gathered from the entire act, may often
prevail over the construction which would appear to be the most natural and
obvious on the face of a particular clause. It is by this means that
contradiction and repugnance between the different parts of the statute may
be avoided. (See Black, Interpretation of Laws, 2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the Explanatory Note to House Bill No. 3630, which was
subsequently enacted as Republic Act No. 1899, reads:
In order to develop and expand the Maritime Commerce of the
Philippines, it is necessary that harbor facilities be correspondingly

improved, and, where necessary, expanded and developed. The

national government is not in a financial position to handle all this
work. On the other hand, with a greater autonomy, many chartered
cities and provinces are financially able to have credit position which
will allow them to undertake these projects. Some cities, such as the
City of Bacolod under R.A. 161, has been authorized to reclaim
foreshore lands bordering it.
Other cities and provinces have continuously been requesting for
authority to reclaim foreshore lands on the basis of the Bacolod City
pattern, and to undertake work to establish, construct on the reclaimed
area and maintain such port facilities as may be necessary. In order not
to unduly delay the undertaking of these projects, and inorder to
obviate the passage of individual pieces of legislation for every
chartered city and province, it is hereby recommended that the
accompanying bill be approved. It covers Authority for All chartered
cities and provinces to undertake this work. x x x (underscoring
supplied)
Utilizing the above explanatory note in interpreting and construing
the provisions of R.A. 1899, then Secretary of Justice Mabanag opined:
It is clear that the Bacolod City pattern was the basis of the enactment
of the aforementioned bill of general application. This so-called
Bacolod City pattern appears to be composed of 3 parts, namely:
Republic Act No. 161, which grants authority to Bacolod City to
undertake or carry out ... the reclamation ... of any [sic] carry out the
reclamation project conformably with Republic Act No. 161; and
Republic Act No. 1132 authorizing Bacolod City to contract
indebtedness or to issue bonds in the amount not exceeding six million
pesos to finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the precise space therein
referred to as foreshore lands, but it provided that docking and harbor
facilities should be erected on the reclaimed portions thereof, while not
conclusive would indicate that Congress used the word foreshore in its
broadest sense. Significantly, the plan of reclamation of foreshore

drawn up by the Bureau of Public Works maps out an area of

approximately 1,600,000 square meters, the boundaries of which
clearly extend way beyond Websters limited concept of the term
foreshore. As a contemporaneous construction by that branch of the
Government empowered to oversee at least, the conduct of the work,
such an interpretation deserves great weight. Finally, Congress in
enacting Republic Act No. 1132 (supplement to RA 161), tacitly
confirmed and approved the Bureaus interpretation of the term
foreshore when instead of taking the occasion to correct the Bureau of
over extending its plan, it authorized the city of Bacolod to raise the
full estimated cost of reclaiming the total area covered by the plan. The
explanatory note to House Bill No. 1249 which became Republic Act
No. 1132 states among the things:
The Bureau of Public Works already prepared a plan for the reclamation of about
1,600,000 square meters of land at an estimated costs of about P6,000,000.00. The
project is self-supporting because the proceeds from the sales or leases of lands so
reclaimed will be more than sufficient to cover the cost of the project.
Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the
reclamation by local governments of foreshore lands on the basis of the Bacolod
City pattern and in order to obviate the passage of individual pieces of legislation for
every chartered city and provinces requesting authority to undertake such projects,
the lawmaking body could not have had in mind the limited area described by Webster
as foreshore lands. x x x.
If it was really the intention of Congress to limit the area to the strict literal
meaning of foreshore lands which may be reclaimed by chartered cities and
municipalities, Congress would have excluded the cities of Manila, Iloilo,
Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by
Senator Cuenco during the deliberation of the bill considering that these
cities do not have foreshore lands in the strict meaning of the term. Yet,
Congress did not approve the proposed amendment of Senator
Cuenco, implying therefore, that Congress intended not to limit the area that
may be reclaimed to the strict definition of foreshore lands.

The opinion of the then Secretary of Justice Mabanag, who was at that time
the chief law officer and legal adviser of the government and whose office is
required by law to issue opinions for the guidance of the various departments
of the government, there being then no judicial interpretation to the contrary,
is entitled to respect (see Bengzon vs. Secretary of Justice and Insular Auditor,
68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated February 3,
1965 in Ponce vs. Gomez (L-21870) and Ponce vs. City of Cebu (L-2266 , by
a unanimous vote of six (6) justices (the other five (5) members deemed it
unnecessary to express their view because in their opinion the questions
raised were not properly brought before the court), which in essence applied
the strict dictionary meaning of foreshore lands as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the then
Secretary of Justice Mabanag rendered the above opinion on November 16,
1959 and long after RREC has started the subject reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme Court
issued the aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said
law, Congress appropriated money for the construction of the seawall and
limited access highway from the South boundary of the city of Manila to
Cavite City, to the South, and from the North boundary of the city of Manila to
the municipality of Mariveles, province of Bataan, to the North (including the
reclamation of foreshore and submerged areas ... provided ... that ... existing
projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected... This is a
clear manifestation that Congress in enacting RA 1899, did not intend to limit
the interpretation of the term foreshore land to its dictionary meaning.
It is presumed that the legislature was acquainted with and had in mind the
judicial construction given to a former statute on the subject, and that the
statute on the subject, and that the statute was enacted having in mind the
judicial construction that the prior enactment had received , or in the light of
such existing judicial decisions as have direct bearing upon it (see 50 Am.
Jur., Sec. 321, pp. 312-313). But notwithstanding said interpretation by the
Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law
covering the same areas previously embraced in a RA 1899 (as mentioned

earlier, cities without foreshore lands which were sought to be excluded from
the operation of RA 1899 were not excluded), providing that respect be given
the reclamation of not only foreshore lands but also of submerged lands
signifying its non-conformity to the judicial construction given to RA 1899. If
Congress was in accord with the interpretation and construction made by the
Supreme Court on RA 1899, it would have mentioned reclamation of foreshore
lands only in RA 5187, but Congress included submerged lands in order to
clarify the intention on the grant of authority to cities and municipalities in
the reclamation of lands bordering them as provided in RA 1899. It is,
therefore, our opinion that it is actually the intention of Congress in RA 1899
not to limit the authority granted to cities and municipalities to reclaim
foreshore lands in its strict dictionary meaning but rather in its wider scope
as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent court that under RA
1899, the term foreshore lands includes submerged areas. As can be gleaned from its disquisition
and rationalization aforequoted, the respondent court unduly stretched and broadened the
meaning of foreshore lands, beyond the intentment of the law, and against the recognized legal
connotation of foreshore lands. Well entrenched, to the point of being elementary, is the rule that
when the law speaks in clear and categorical language, there is no reason for interpretation or
construction, but only for application.[16] So also, resort to extrinsic aids, like the records of the
constitutional convention, is unwarranted, the language of the law being plain and unambiguous.
[17]
Then, too, opinions of the Secretary of Justice are unavailing to supplant or rectify any
mistake or omission in the law.[18] To repeat, the term foreshore lands refers to:

The strip of land that lies between the high and low water marks and that is
alternately wet and dry according to the flow of the tide. (Words and Phrases,
Foreshore)
A strip of land margining a body of water (as a lake or stream); the part of a
seashore between the low-water line usually at the seaward margin of a lowtide terrace and the upper limit of wave wash at high tide usually marked by
a beach scarp or berm. (Websters Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot
broaden its meaning, much less widen the coverage thereof. If the intention of Congress were to

include submerged areas, it should have provided expressly. That Congress did not so provide
could only signify the exclusion of submerged areas from the term foreshore lands.
Neither is there any valid ground to disregard the Resolution of this Court dated February 3,
1965 in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of
Republic Act No. 5187 (RA 5187), the relevant portion of which, reads:

Sec. 3. Miscellaneous Projects

xxx

m. For the construction of seawall and limited access highway from the south
boundary of the City of Manila to Cavite City, to the south, and from the north
boundary of the City of Manila to the municipality of Mariveles, province of
Bataan, to the north, including the reclamation of the foreshore and
submerged areas: Provided, That priority in the construction of such
seawalls, highway and attendant reclamation works shall be given to any
corporation and/or corporations that may offer to undertake at its own
expense such projects, in which case the President of the Philippines may,
after competitive bidding, award contracts for the construction of such
projects, with the winning bidder shouldering all costs thereof, the same to be
paid in terms of percentage fee of the contractor which shall not exceed fifty
percent of the area reclaimed by the contractor and shall represent full
compensation for the purpose, the provisions of the Public Land Law
concerning disposition of reclaimed and foreshore lands to the contrary
notwithstanding: Provided, finally, that the foregoing provisions and those of
other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or municipal
governments for the reclamation of foreshore and submerged lands shall be
respected. x x x.
There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden
the scope of foreshore lands. The said law is not amendatory to RA 1899. It is an Appropriations
Act, entitled AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING
THE SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS.
All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L21870) and Ponce v. City of Cebu (L-22669) that the term foreshore refers to that part of the land

adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides. As
opined by this Court in said cases:

WHEREAS, six (6) members of the Court (Justices Bautista Angelo,

Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that said city
ordinance and contracts areultra vires and hence, null and void, insofar as
the remaining 60% of the area aforementioned, because the term foreshore
lands as used in Republic Act No. 1899 should be understood in the sense
attached thereto by common parlance; (underscoring ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his
opinion dated December 22, 1966, in a case with analogous facts as the present one, to wit:

December 22, 1966

The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx

I. Facts 1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899,
the Municipality of Navotas enacted Ordinance No. 1 authorizing the
Municipal Mayor to enter into a reclamation contract with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded between the
Municipality of Navotas, represented by the Municipal Mayor, and Mr.
Chuanico in accordance with the above ordinance. Thereunder, Mr. Chuanico
shall be the attorney-in-fact of the Municipality in prosecuting the
reclamation project and shall advance the money needed therefor; that the
actual expenses incurred shall be deemed a loan to the Municipality; that Mr.
Chuanico shall have the irrevocable option to buy 70% of the reclaimed area
at P7.00 per square meter; that he shall have the full and irrevocable powers

to do any and all things necessary and proper in and about the premises,
including the power to hire necessary personnel for the prosecution of the
work, purchase materials and supplies, and purchase or lease construction
machineries and equipment, but any and all contracts to be concluded by him
in behalf of the Municipality shall be submitted to public bidding.
xxx

3. On March 16, 1961, the Municipal Council of Navotas passed Resolution

No. 22 approving and ratifying the contract.
xxx

III. Comments 1. The above reclamation contract was concluded on the basis of Navotas
Ordinance No. 1 which, in turn, had been enacted avowedly pursuant to
Republic Act No. 1899. This being so, the contract, in order to be valid, must
conform to the provisions of the said law.
By authorizing local governments to execute by administration any
reclamation work, (Republic Act No. 1899 impliedly forbids the execution of
said project by contract. Thus, in the case of Ponce et al. vs. Gomez
(February 3, 1966), five justices of the Supreme Court voted to annul the
contract between Cebu Development Corporation and Cebu City for the
reclamation of foreshore lands because the provisions of said ... contract are
not ... in accordance with the provisions of Republic Act No. 1899, as against
one Justice who opined that the contract substantially complied with the
provisions of the said law. (Five Justices expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar to the
Cebu reclamation contract, it is believed that the former is likewise fatally
defective.
2. The Navotas reclamation project envisages the construction of a channel
along the Manila Bay periphery of that town and the reclamation of
approximately 650 hectares of land from said channel to a seaward distance
of one kilometer. In the basic letter it is stated that practically, all the 650

hectares of lands proposed to be reclaimed under the agreement do not

constitute foreshore lands and that the greater portion of the area . . . is in
fact navigable and presently being used as a fishing harbor by deep-sea
fishing operators as well as a fishing ground of sustenance
fisherman. Assuming the correctness of these averments, the Navotas
reclamation contract evidently transcends the authority granted under
Republic Act No. 1899, which empowers the local governments to reclaim
nothing more than foreshore lands, i.e., that part of the land adjacent to the
sea which is alternately covered and left dry by the ordinary flow of the
tides. (26 C.J. 890.) It was for this reason that in the cited case Ponce case,
the Supreme Court, by a vote of 6-0 with five Justices abstaining, declared
ultra vires and void the contractual stipulation for the reclamation of
submerged lands off Cebu City, and permanently enjoined its execution under
Republic Act No. 1899.
xxx

In accordance with the foregoing, I have the honor to submit the view that the
Navotas reclamation contract is not binding and should be disregarded
for non-compliance with law.
Very truly yours,
(SGD) CLAUDIO
TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became Associate Justice, and later
Chief Justice, of this Court, did, in our considered view, supersede the earlier opinion of former
Justice Secretary Alejo Mabanag, aforestated, as the cases, in connection with which subject
opinions were sought, were with similar facts. The said Teehankee opinion accords with RA
1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by
Ordinance No. 158, and the Agreement under attack, have been found to be outside the
intendment and scope of RA 1899, and therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.

Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed
55 hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that
RREC had reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to
be done by RREC, even as it required RREC to submit the pertinent papers to show its supposed
accomplishment, to secure approval by the Ministry of Public Works and Highways to the
reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject
reclamation project but RREC never complied with such requirements and
conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the
reclamation project were presented to reflect any accomplishment. Not even any statement or
itemization of works accomplished by contractors or subcontractors or vouchers and other
relevant papers were introduced to describe the extent of RRECs accomplishment. Neither was
the requisite certification from the City Engineer concerned that portions of the reclamation
project not less than 50 hectares in area shall have been accomplished or completed obtained and
presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC,
and extent thereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer,
surveyor, or any other witness involved in the alleged reclamation work of RREC testified on the
55 hectares supposedly reclaimed by RREC. What work was done, who did the work, where was
it commenced, and when was it completed, was never brought to light by any witness before the
court. Certainly, onus probandi was on RREC and Pasay City to show and point out the as yet
unidentified 55 hectares they allegedly reclaimed. But this burden of proof RREC and Pasay City
miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the complaint of
plaintiff-appellant, now petitioner Republic of the Philippines, the lifting of the writ of
Preliminary Injunction issued on April 26, 1962 would become effective only as soon as
Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the
corresponding plans and specifications to the Director of Public Works, and shall have obtained
approval thereof, and as soon as corresponding public bidding for the award to the contractor and
sub-contractor that will undertake the reclamation project shall have been effected. (Rollo, pp.
127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City never complied
with such prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC
had no authority to resume its reclamation work which was stopped by said writ of preliminary
injunction issued on April 26, 1962.

From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit 21-A for
RREC before the lower court, and Exhibit EE for CCP before the Court of Appeals, it can be
deduced that only on November 26, 1960 did RREC contract out the dredging work to C and A
Construction Company, Inc., for the reclamation of the 55 hectares initially programmed to be
reclaimed by it. But, as stated by RREC itself in the position paper filed with this Court on July
15, 1997, with reference to CDCPs reclamation work, mobilization of the reclamation team
would take one year before a reclamation work could actually begin. Therefore, the reclamation
work undertaken by RREC could not have started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its
reclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work on
subject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares,
with the stipulated specifications and elevation, in such a brief span of time. In the report of
RREC (Exhibit DD for CCP), it was conceded that due to the writ of preliminary injunction
issued on April 26, 1962, C and A Construction Co., Inc. had suspended its dredging operation
since May, 1962.
The graphical report on the Pasay Reclamation project, as of April 30, 1962, attached to the
Progress Report marked Exhibit DD, is a schematic representation of the work accomplishment
referred to in such Progress Report, indicating the various elevations of the land surface it
embraced, ranging from 0.00 meters to the highest elevation of 2.5 meters above MLLW. Such
portrayal of work accomplished is crucial in our determination of whether or not RREC had
actually reclaimed any land as under its Contract for Dredging Work with C and A Construction
Company (Exhibit EE), the required final elevation for a completely reclaimed land was 3.5
meters above MLLW, as explicitly provided in said Contract for Dredging Work. So, the
irresistible conclusion is - when the work on subject RREC-Pasay City reclamation project
stopped in April, 1962 in compliance with the writ of preliminary injunction issued by the trial
court of origin, no portion of the reclamation project worked on by RREC had reached the
stipulated elevation of 3.5 meters above MLLW. The entire area it worked on was only at sea
level or 0.00 meter above MLLW. In short, RREC had not yet reclaimed any area when the writ
of preliminary injunction issued in April 1962.
On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing
partner of Leandro V. Locsin and partners, Architect and City Planner Manuel T. Maoza, Jr. of
Planning Resources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the
President, from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP
Advisory Committee, come to the fore. These credible, impartial and knowledgeable witnesses
recounted on the witness stand that when the construction of the Main Building of the Cultural
Center of the Philippines (CCP) began in 1966, the only surface land available was the site for
the said building (TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of and
behind it was all water (TSN, Sept. 29, 1997, pages 127-128). When the CCP Main Building was

being constructed, from 1966 to 1969, the land above sea level thereat was only where the CCP
Main Building was erected and the rest of the surroundings were all under water, particularly the
back portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R.
Kasilag stressed that on April 16, 1966, during the ground breaking for the CCP Main Building,
it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order and declare
that the requirement by the trial court on public bidding and the submission of RRECs plans and
specification to the Department of Public Works and Highways in order that RREC may continue
the implementation of the reclamation work is deleted for being moot and academic.Said
requirement has never become moot and academic. It has remained indispensable, as ever, and
non-compliance therewith restrained RREC from lawfully resuming the reclamation work under
controversy, notwithstanding the rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with
the prescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC)opted to
file with the former Ministry of Public Highways, a claim for compensation of P30,396,878.20,
for reclamation work allegedly done before the CDCP started working on the reclamation of the
CCP grounds. On September 7, 1979, RREC asked the Solicitor General to settle its subject
claim for compensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by
the cost data, work volume accomplished and other relevant information gathered by the former
Ministry of Public Highways, the Solicitor General informed RREC that the value of what it had
accomplished, based on 1962 price levels, was only P8,344,741.29, and the expenses for
mobilization of equipment amounted to P2,581,330.00. The aforesaid evaluation made by the
government, through the then Minister of Public Highways, is factual and realistic, so much so
that on June 25, 1981, RREC, in its reply letter to the Solicitor General, stated:

We regret that we are not agreeable to the amount of P10,926,071.29, based on

1962 cost data, etc., as compensation based on quantum meruit. The least we
would consider is the amount of P10.926,071.29 plus interest at the rate of 6%
per annum from 1962 to the time of payment. We feel that 6% is very much less
than the accepted rate of inflation that has supervened since 1962 to the present,
and even less than the present legal rate of 12% per annum. [19]
Undoubtedly, what RREC claimed for was payment for what it had done, and for the dredge
fill of 1,558,395 cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of the following
titled lots, to wit:

LOT NO. BUILDING AREA OCT/TCT

42 Gloria Maris 9,516 sq.m. OCT 159 in the Restaurant name of GSIS

3 Asean Garden 76,299 sq.m. OCT 10251 in the

name of CCP

12 Folk Arts Theater 1.7503 sq.m. TCT 18627 in the

and PICC parking name of CCP
space

22 landscaped with 132,924 sq.m. TCT 75676 in the

sculpture of Asean name of CCP
Artists-site of
Boom na Boom

23 open space, back 34,346 sq.m. TCT 75677 in the

of Philcite name of CCP

24 Parking space for 10,352 sq.m. TCT 75678 in the

Star City, CCP, name of CCP
Philcite

25 open space, 11,323 sq.m. TCT 75679 in the

occupied by Star name of CCP
City

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

beside PICC name of CCP

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

leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justification therefor. In the first place, in their answer
to the Complaint and Amended Complaint below, RREC and Pasay City never prayed for the
transfer to Pasay City of subject lots, title to which had long become indefeasible in favor of the
rightful title holders, CCP and GSIS, respectively.
The annotation of a notice of lis pendens on the certificates of title covering the said lots is
of no moment. It did not vest in Pasay City and RREC any real right superior to the absolute
ownership thereover of CCP and GSIS. Besides, the nature of the action did not really warrant
the issuance of a notice of lis pendens.
Section 14 of Rule 13, Revised Rules of Civil Procedure, reads:

Sec. 14. Notice of lis pendens. - In an action affecting the title or the right of
possession of real property, the plaintiff and the defendant, when affirmative
relief is claimed in his answer, may record in the office of the registry of deeds
of the province in which the property is situated a notice of the pendency of
the action. Said notice shall contain the names of the parties and the object of
the action or defense, and a description of the property in that province
affected thereby. Only from the time of filing such notice for record shall a

purchaser, or encumbrancer of the property affected thereby, be deemed to

have constructive notice of the pendency of the action, and only of its
pendency against the parties designated by their real names.
The notice of lis pendens herein above mentioned may be cancelled only upon
order of the court, after proper showing that the notice is for the purpose of
molesting the adverse party, or that it is not necessary to protect the rights of
the party who caused it to be recorded.
Under the aforecited provision of law in point, a notice of lis pendens is necessary when the
action is for recovery of possession or ownership of a parcel of land. In the present litigation,
RREC and Pasay City, as defendants in the main case, did not counterclaim for the turnover to
Pasay City of the titled lots aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens
title, whether fraudulently issued or not, may be posed only in an action brought to impugn or
annul it. (Halili vs. National Labor Relations Commission, 257 SCRA 174; Cimafranca vs.
Intermediate Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the
germane provision of Section 48 of P.D. 1529, that a certificate of title can never be the subject
of a collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding
instituted in accordance with law.
Although Pasay City and RREC did not succeed in their undertaking to reclaim any area
within subject reclamation project, it appearing that something compensable was accomplished
by them, following the applicable provision of law and hearkening to the dictates of equity, that
no one, not even the government, shall unjustly enrich oneself/itself at the expense of another [20],
we believe; and so hold, that Pasay City and RREC should be paid for the said actual work done
and dredge-fill poured in, worth P10,926,071.29, as verified by the former Ministry of Public
Highways, and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this valley of tears, the court,
for its herein historic disposition, will be exalted by the future generations of Filipinos, for the
preservation of the national patrimony and promotion of our cultural heritage. As writer
Channing rightly puts it: Whatever expands the affections, or enlarges the sphere of our
sympathies - Whatever makes us feel our relation to the universe and all that it inherits in time
and in eternity, and to the great and beneficent cause of all, must unquestionably refine our
nature, and elevate us in the scale of being.
WHEREFORE:

In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and
Amended Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and
Pasay City Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959,
as well as the Reclamation Agreements entered into by Pasay City and Republic Real Estate
Corporation (RREC) as authorized by said city ordinances, are declared NULL and VOID for
being ultra vires, and contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil
Case No. 2229-P is made permanent, and the notice of lis pendens issued by the Court of
Appeals in CA G.R. CV No. 51349 ordered CANCELLED. The Register of Deeds of Pasay City
is directed to take note of and annotate on the certificates of title involved, the cancellation of
subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and
Republic Real Estate Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX
THOUSAND SEVENTY-ONE AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS,
plus interest thereon of six (6%) percent per annum from May 1, 1962 until full payment, which
amount shall be divided by Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.

[G.R. No. 133250. July 9, 2002]

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY

and
AMARI
COASTAL
BAY
DEVELOPMENT
CORPORATION,respondents.
DECISION
CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the Public
Estates Authority (PEA for brevity) to disclose all facts on PEAs then on-going

renegotiations with Amari Coastal Bay and Development Corporation (AMARI for
brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from
signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public
Highways, signed a contract with the Construction and Development Corporation of the
Philippines (CDCP for brevity) to reclaim certain foreshore and offshore areas of Manila
Bay. The contract also included the construction of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty
percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential
Decree No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including
foreshore and submerged areas, and to develop, improve, acquire, x x x lease and sell
any and all kinds of lands. On the same date, then President Marcos issued
Presidential Decree No. 1085 transferring to PEA the lands reclaimed in the foreshore
and offshore of the Manila Bay under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP).
[1]

[2]

On December 29, 1981, then President Marcos issued a memorandum directing

PEA to amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall
be funded and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum
of Agreement dated December 29, 1981, which stated:

(i) CDCP shall undertake all reclamation, construction, and such other works
in the MCCRRP as may be agreed upon by the parties, to be paid according
to progress of works on a unit price/lump sum basis for items of work to be
agreed upon, subject to price escalation, retention and other terms and
conditions provided for in Presidential Decree No. 1594. All the financing
required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to
cede and transfer in favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of land reclaimed by CDCP in the
MCCRRP as of December 30, 1981 which have not yet been sold, transferred
or otherwise disposed of by CDCP asof said date, which areas consist of
approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty Two Thousand Eight
Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying

elevations above Mean Low Water Level located outside the Financial Center
Area and the First Neighborhood Unit.
[3]

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No.
3517, granting and transferring to PEA the parcels of land so reclaimed under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894)
square meters. Subsequently, on April 9, 1988, the Register of Deeds of the Municipality
of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the
name of PEA, covering the three reclaimed islands known as the Freedom Islands
located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City.The
Freedom Islands have a total land area of One Million Five Hundred Seventy Eight
Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841
hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity)
with AMARI, a private corporation, to develop the Freedom Islands. The JVA also
required the reclamation of an additional 250 hectares of submerged areas surrounding
these islands to complete the configuration in the Master Development Plan of the
Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding. On April 28, 1995, the Board of Directors of PEA, in
its Resolution No. 1245, confirmed the JVA. On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the JVA.
[4]

[5]

[6]

On November 29, 1996, then Senate President Ernesto Maceda delivered a

privilege speech in the Senate and denounced the JVA as the grandmother of all
scams. As a result, the Senate Committee on Government Corporations and Public
Enterprises, and the Committee on Accountability of Public Officers and Investigations,
conducted a joint investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16, 1997. Among
the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
[7]

On December 5, 1997, then President Fidel V. Ramos issued Presidential

Administrative Order No. 365 creating a Legal Task Force to conduct a study on the
legality of the JVA in view of Senate Committee Report No. 560. The members of the
Legal Task Force were the Secretary of Justice, the Chief Presidential Legal Counsel,
and the Government Corporate Counsel. The Legal Task Force upheld the legality of
the JVA, contrary to the conclusions reached by the Senate Committees.
[8]

[9]

[10]

[11]

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports
that there were on-going renegotiations between PEA and AMARI under an order
issued by then President Fidel V. Ramos. According to these reports, PEA Director
Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz
composed the negotiating panel of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining Order and
Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The
Court dismissed the petition for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court.
[12]

On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer,
filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order. Petitioner contends the
government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to
AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the
JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on
the right of the people to information on matters of public concern. Petitioner assails the
sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article
XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain
to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of
billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time, PEA and AMARI filed their Comments
on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28,
1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order;
and (c) to set the case for hearing on oral argument. Petitioner filed a Reiterative Motion
for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution
dated June 22, 1999.
[13]

In a Resolution dated March 23, 1999, the Court gave due course to the petition
and required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement
(Amended JVA, for brevity). On May 28, 1999, the Office of the President under the
administration of then President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner
now prays that on constitutional and statutory grounds the renegotiated contract be
declared null and void.
[14]

The Issues
The issues raised by petitioner, PEA and AMARI are as follows:
[15]

[16]

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE

MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE
OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

The Courts Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and
academic because of subsequent events.
The petition prays that PEA publicly disclose the terms and conditions of the ongoing negotiations for a new agreement. The petition also prays that the Court enjoin
PEA from privately entering into, perfecting and/or executing any new agreement with
AMARI.
PEA and AMARI claim the petition is now moot and academic because AMARI
furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing the
terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied
petitioners prayer for a public disclosure of the renegotiations. Likewise, petitioners
prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI
have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the
President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by
simply fast-tracking the signing and approval of the Amended JVA before the Court
could act on the issue. Presidential approval does not resolve the constitutional issue or
remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval
by the President cannot operate to moot the petition and divest the Court of its
jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to
enjoin the signing of the Amended JVA on constitutional grounds necessarily includes
preventing its implementation if in the meantime PEA and AMARI have signed one in
violation of the Constitution. Petitioners principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its

implementation, and if already implemented, to annul the effects of such

unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now becomes
more compelling for the Court to resolve the issue to insure the government itself does
not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the
instant case, if the Amended JVA runs counter to the Constitution, the Court can still
prevent the transfer of title and ownership of alienable lands of the public domain in the
name of AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised to formulate
controlling principles to guide the bench, bar, and the public.
[17]

Also, the instant petition is a case of first impression. All previous decisions of the
Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart
provision in the 1973 Constitution, covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the
private corporations claimed or could claim the right to judicial confirmation of their
imperfect titles under Title II of Commonwealth Act. 141 (CA No. 141 for brevity). In
the instant case, AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands
and
submerged
areas
for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain
undertakings by AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles because
the lands covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive
and notorious occupation of agricultural lands of the public domain for at least thirty
years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicial confirmation of imperfect title expired on December 31, 1987.
[18]

[19]

[20]

Lastly, there is a need to resolve immediately the constitutional issue raised in this
petition because of the possible transfer at any time by PEA to AMARI of title and
ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is obligated
to transfer to AMARI the latters seventy percent proportionate share in the reclaimed
areas as the reclamation progresses. The Amended JVA even allows AMARI to
mortgage at any time the entire reclaimed area to raise financing for the reclamation
project.
[21]

Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally to cases

involving factual questions. As it is not a trier of facts, the Court cannot entertain cases
involving factual issues. The instant case, however, raises constitutional issues of
transcendental importance to the public. The Court can resolve this case without
determining any factual issue related to the case. Also, the instant case is a petition
formandamus which falls under the original jurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the
instant case.
[22]

Third issue: whether the petition merits dismissal for non-exhaustion of

administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose
publicly certain information without first asking PEA the needed information. PEA claims
petitioners direct resort to the Court violates the principle of exhaustion of administrative
remedies. It also violates the rule that mandamus may issue only if there is no other
plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera where the Court granted
the petition for mandamus even if the petitioners there did not initially demand from the
Office of the President the publication of the presidential decrees. PEA points out that
in Taada, the Executive Department had an affirmative statutory dutyunder Article 2 of
the Civil Code and Section 1 of Commonwealth Act No. 638 to publish the
presidential decrees. There was, therefore, no need for the petitioners inTaada to make
an initial demand from the Office of the President. In the instant case, PEA claims it has
no affirmative statutory duty to disclose publicly information about its renegotiation of
the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrative remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.
[23]

[24]

[25]

The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing Code, the
disposition of government lands to private parties requires public bidding. PEA was
under a positive legal duty to disclose to the public the terms and conditions for
the sale of its lands. The law obligated PEA to make this public disclosure even
without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of
a negotiated contract, not of a public bidding. Considering that PEA had an affirmative
statutory duty to make the public disclosure, and was even in breach of this legal duty,
petitioner had the right to seek direct judicial intervention.
[26]2

Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question. The principal issue in the instant case is the capacity of AMARI
to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation
of lands of the public domain to private corporations. We rule that the principle of
exhaustion of administrative remedies does not apply in the instant case.
[27]

Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to
enforce his constitutional right to information without a showing that PEA refused to
perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury because of the signing or
implementation of the Amended JVA. Thus, there is no actual controversy requiring the
exercise of the power of judicial review.
The petitioner has standing to bring this taxpayers suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional issues
involved here. First is the right of citizens to information on matters of public
concern. Second is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly information on
the sale of government lands worth billions of pesos, information which the Constitution
and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in
violation of the Constitution, compelling PEA to comply with a constitutional duty to the
nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG, the Court upheld the right of a citizen to bring a taxpayers
suit on matters of transcendental importance to the public, thus [28]

Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth

of the Marcoses is an issue of transcendental importance to the public. He
asserts that ordinary taxpayers have a right to initiate and prosecute actions
questioning the validity of acts or orders of government agencies or
instrumentalities, if the issues raised are of paramount public interest, and if
they immediately affect the social, economic and moral well being of the
people.
Moreover, the mere fact that he is a citizen satisfies the requirement of
personal interest, when the proceeding involves the assertion of a public right,
such as in this case.He invokes several decisions of this Court which have set
aside the procedural matter of locus standi, when the subject of the case
involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public
right and the object of mandamus is to obtain the enforcement of a public
duty, the people are regarded as the real parties in interest; and because it is
sufficient that petitioner is a citizen and as such is interested in the execution

of the laws, he need not show that he has any legal or special interest in the
result of the action. In the aforesaid case, the petitioners sought to enforce
their right to be informed on matters of public concern, a right then recognized
in Section 6, Article IV of the 1973 Constitution, in connection with the rule that
laws in order to be valid and enforceable must be published in the Official
Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal
standing, the Court declared that the right they sought to be enforced is a
public right recognized by no less than the fundamental law of the land.
Legaspi v. Civil Service Commission, while reiterating Taada, further declared
that when a mandamus proceeding involves the assertion of a public right, the
requirement of personal interest is satisfied by the mere fact that petitioner is
a citizen and, therefore, part of the general 'public' which possesses the right.
Further, in Albano v. Reyes, we said that while expenditure of public funds
may not have been involved under the questioned contract for the
development, management and operation of the Manila International
Container Terminal, public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of the
country and the magnitude of the financial consideration involved. We
concluded that, as a consequence, the disclosure provision in the Constitution
would constitute sufficient authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to
information and access to official records, documents and papers a right
guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino citizen. Because of the satisfaction of the
two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar should be allowed.
We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights - to information and to the equitable diffusion of
natural resources - matters of transcendental public importance, the petitioner has the
requisite locus standi.
Fifth issue: whether the constitutional right to information includes official
information on on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the peoples right to information on
matters of public concern in this manner:

Sec. 7. The right of the people to information on matters of public concern

shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by
law. (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest
reinforces the peoples right to information on matters of public concern. This State
policy is expressed in Section 28, Article II of the Constitution, thus:

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions
involving public interest. (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policymaking and in the operations of the government, as well as provide the people sufficient
information to exercise effectively other constitutional rights. These twin provisions are
essential to the exercise of freedom of expression. If the government does not disclose
its official acts, transactions and decisions to citizens, whatever citizens say, even if
expressed without any restraint, will be speculative and amount to nothing. These twin
provisions are also essential to hold public officials at all times x x x accountable to the
people, for unless citizens have the proper information, they cannot hold public officials
accountable for anything. Armed with the right information, citizens can participate in
public discussions leading to the formulation of government policies and their effective
implementation. An informed citizenry is essential to the existence and proper
functioning of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.
[29]

[30]

An essential element of these freedoms is to keep open a continuing dialogue

or process of communication between the government and the people. It is in
the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to
the peoples will. Yet, this open dialogue can be effective only to the extent that
the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.
PEA asserts, citing Chavez v. PCGG, that in cases of on-going negotiations the
right to information is limited to definite propositions of the government. PEA maintains
the right does not include access to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of
being formulated or are in the exploratory stage.
[31]

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional
stage or before the closing of the transaction. To support its contention, AMARI cites the
following discussion in the 1986 Constitutional Commission:

Mr. Suarez. And when we say transactions which should be distinguished

from contracts, agreements, or treaties or whatever, does the Gentleman refer
to the steps leading to the consummation of the contract, or does he refer to
the contract itself?
Mr. Ople: The transactions used here, I suppose is generic and
therefore, it can cover both steps leading to a contract and already a
consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national
interest.
Mr. Suarez: Thank you. (Emphasis supplied)
[32]

AMARI argues there must first be a consummated contract before petitioner can invoke
the right. Requiring government officials to reveal their deliberations at the predecisional stage will degrade the quality of decision-making in government
agencies. Government officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their discussions, putting
them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires
PEA to disclose publicly, and information the constitutional right to information requires
PEA to release to the public. Before the consummation of the contract, PEA must, on its
own and without demand from anyone, disclose to the public matters relating to the
disposition of its property. These include the size, location, technical description and
nature of the property being disposed of, the terms and conditions of the disposition, the
parties qualified to bid, the minimum price and similar information. PEA must prepare all
these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code
requires public bidding. If PEA fails to make this disclosure, any citizen can demand
from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being
undertaken by the bidding or review committee is not immediately accessible under the
right to information. While the evaluation or review is still on-going, there are no official
acts, transactions, or decisions on the bids or proposals. However, once the committee
makes its official recommendation, there arises a definite proposition on the part of
the government. From this moment, the publics right to information attaches, and any

citizen can access all the non-proprietary information leading to such definite
proposition. In Chavez v. PCGG, the Court ruled as follows:
[33]

Considering the intent of the framers of the Constitution, we believe that it is

incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must pertain to definite
propositions of the government, not necessarily to intra-agency or interagency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the exploratory
stage. There is need, of course, to observe the same restrictions on disclosure
of information in general, as discussed earlier such as on matters involving
national security, diplomatic or foreign relations, intelligence and other
classified information. (Emphasis supplied)
Contrary to AMARIs contention, the commissioners of the 1986 Constitutional
Commission understood that the right to information contemplates inclusion of
negotiations leading to the consummation of the transaction. Certainly, a
consummated contract is not a requirement for the exercise of the right to
information.Otherwise, the people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too late for the public to expose its
defects.
Requiring a consummated contract will keep the public in the dark until the contract,
which may be grossly disadvantageous to the government or even illegal, becomes
a fait accompli. This negates the State policy of full transparency on matters of public
concern, a situation which the framers of the Constitution could not have intended. Such
a requirement will prevent the citizenry from participating in the public discussion of
any proposed contract, effectively truncating a basic right enshrined in the Bill of
Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by
the State of its avowed policy of full disclosure of all its transactions involving public
interest.
The right covers three categories of information which are matters of public
concern, namely: (1) official records; (2) documents and papers pertaining to official
acts, transactions and decisions; and (3) government research data used in formulating
policies. The first category refers to any document that is part of the public records in
the custody of government agencies or officials. The second category refers to
documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or
officials. The third category refers to research data, whether raw, collated or processed,
owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes
evaluation reports, recommendations, legal and expert opinions, minutes of meetings,

terms of reference and other documents attached to such reports or minutes, all relating
to the JVA. However, the right to information does not compel PEA to prepare lists,
abstracts, summaries and the like relating to the renegotiation of the JVA. The right
only affords access to records, documents and papers, which means the opportunity to
inspect and copy them. One who exercises the right must copy the records, documents
and papers at his expense. The exercise of the right is also subject to reasonable
regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection
and copying.
[34]

[35]

The right to information, however, does not extend to matters recognized as

privileged information under the separation of powers. The right does not also apply to
information on military and diplomatic secrets, information affecting national security,
and information on investigations of crimes by law enforcement agencies before the
prosecution of the accused, which courts have long recognized as confidential. The
right may also be subject to other limitations that Congress may impose by law.
[36]

[37]

There is no claim by PEA that the information demanded by petitioner is privileged

information rooted in the separation of powers. The information does not cover
Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme Court and other
collegiate courts, or executive sessions of either house of Congress, are recognized
as confidential. This kind of information cannot be pried open by a co-equal branch of
government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential, Legislative
and Judicial power. This is not the situation in the instant case.
[38]

[39]

We rule, therefore, that the constitutional right to information includes official

information on on-going negotiations before a final contract. The information,
however, must constitute definite propositions by the government and should not cover
recognized exceptions like privileged information, military and diplomatic secrets and
similar matters affecting national security and public order. Congress has also
prescribed other limitations on the right to information in several legislations.
[40]

[41]

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of
lands, reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in
the Regalian doctrine which holds that the State owns all lands and waters of the public
domain. Upon the Spanish conquest of the Philippines, ownership of all lands, territories
and possessions in the Philippines passed to the Spanish Crown. The King, as the
sovereign ruler and representative of the people, acquired and owned all lands and
territories in the Philippines except those he disposed of by grant or sale to private
individuals.
[42]

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the public
domain. The Regalian doctrine is the foundation of the time-honored principle of land
ownership that all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
[43]

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the
Philippine Commission enacted Act No. 1654 which provided for the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. Later,
on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public
Land Act, which authorized the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. On November 7, 1936, the National
Assembly passed Commonwealth Act No. 141, also known as the Public Land Act,
which authorized the lease, but not the sale, of reclaimed lands of the government
to corporations and individuals. CA No. 141 continues to this day as the general law
governing the classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
waters within the maritime zone of the Spanish territory belonged to the public domain
for public use. The Spanish Law of Waters of 1866 allowed the reclamation of the sea
under Article 5, which provided as follows:
[44]

Article 5. Lands reclaimed from the sea in consequence of works constructed

by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority.
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit and
did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

Art. 339. Property of public dominion is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such

as walls, fortresses, and other works for the defense of the territory, and mines, until
granted to private individuals.

Property devoted to public use referred to property open for use by the public. In
contrast, property devoted to public service referred to property used for some specific
public service and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but
also to property not so used but employed to develop the national wealth. This class
of property constituted property of public dominion although employed for some
economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of
public dominion into private property, to wit:

Art. 341. Property of public dominion, when no longer devoted to public use or
to the defense of the territory, shall become a part of the private property of
the State.
This provision, however, was not self-executing. The legislature, or the executive
department pursuant to law, must declare the property no longer needed for public use
or territorial defense before the government could lease or alienate the property to
private parties.
[45]

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated
the lease of reclaimed and foreshore lands. The salient provisions of this law were as
follows:

Section 1. The control and disposition of the foreshore as defined in

existing law, and the title to all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights
conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or
public lands made or reclaimed by the Government by dredging or filling or
otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to
be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall
give notice to the public that such parts of the lands so made or
reclaimed as are not needed for public purposes will be leased for
commercial and business purposes, x x x.

xxx
(e) The leases above provided for shall be disposed of to the highest
and best bidder therefore, subject to such regulations and safeguards as the
Governor-General may by executive order prescribe. (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control and
disposition of foreshore lands. Private parties could lease lands reclaimed by the
government only if these lands were no longer needed for public purpose. Act No. 1654
mandated public bidding in the lease of government reclaimed lands. Act No. 1654
made government reclaimed lands sui generis in that unlike other public lands which
the government could sell to private parties, these reclaimed lands were available only
for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of
1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by private
parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public
Land Act. The salient provisions of Act No. 2874, on reclaimed lands, were as follows:
[46]

Sec. 6. The Governor-General, 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) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or
disposable public lands, the Governor-General, 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.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor
mineral land, shall be classified as suitable for residential purposes or for
commercial, industrial, or other productive purposes other than

agricultural purposes, and shall be open to disposition or concession, shall

be disposed of under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fiftysix shall be disposed of to private parties by lease only and not
otherwise, as soon asthe Governor-General, upon recommendation by
the Secretary of Agriculture and Natural Resources, shall declare that
the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act. (Emphasis
supplied)
Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the
public domain into x x x alienable or disposable lands. Section 7 of the Act empowered
the Governor-General to declare what lands are open to disposition or concession.
Section 8 of the Act limited alienable or disposable lands only to those lands which have
been officially delimited and classified.
[47]

Section 56 of Act No. 2874 stated that lands disposable under this title shall be
classified as government reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for residential, commercial, industrial
or other productive non-agricultural purposes. These provisions vested upon the
Governor-General the power to classify inalienable lands of the public domain into
disposable lands of the public domain. These provisions also empowered the GovernorGeneral to classify further such disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public domain, as well as other nonagricultural lands.
[48]

Section 58 of Act No. 2874 categorically mandated that disposable lands of the
public domain classified as government reclaimed, foreshore and marshy lands shall
be disposed of to private parties by lease only and not otherwise. The GovernorGeneral, before allowing the lease of these lands to private parties, must formally
declare that the lands were not necessary for the public service. Act No. 2874 reiterated
the State policy to lease and not to sell government reclaimed, foreshore and marshy
lands of the public domain, a policy first enunciated in 1907 in Act No.

1654. Government reclaimed, foreshore and marshy lands remained sui generis, as
the only alienable or disposable lands of the public domain that the government could
not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore
and marshy public lands for non-agricultural purposes retain their inherent potential as
areas for public service. This is the reason the government prohibited the sale, and only
allowed the lease, of these lands to private parties. The State always reserved these
lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section 56
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposes
the government could sell to private parties. Thus, under Act No. 2874, the government
could not sell government reclaimed, foreshore and marshy lands to private
parties, unless the legislature passed a law allowing their sale.
[49]

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea
pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the
sea by private parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the
Filipino people. The 1935 Constitution, in adopting the Regalian doctrine, declared in
Section 1, Article XIII, that

Section 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy and other natural resources of the Philippines belong to the State, and
their disposition, exploitation, development, or utilization shall be limited to
citizens of the Philippines or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any
existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twentyfive years, renewable for another twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the
measure and limit of the grant. (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public
agricultural lands, which were the only natural resources the State could alienate.Thus,
foreshore lands, considered part of the States natural resources, became inalienable by
constitutional fiat, available only for lease for 25 years, renewable for another 25

years. The government could alienate foreshore lands only after these lands were
reclaimed and classified as alienable agricultural lands of the public
domain.Government reclaimed and marshy lands of the public domain, being neither
timber nor mineral lands, fell under the classification of public agricultural lands.
However, government reclaimed and marshy lands, although subject to classification
as disposable public agricultural lands, could only be leased and not sold to private
parties because of Act No. 2874.
[50]

The prohibition on private parties from acquiring ownership of government

reclaimed and marshy lands of the public domain was only a statutory prohibition and
the legislature could therefore remove such prohibition. The 1935 Constitution did not
prohibit individuals and corporations from acquiring government reclaimed and marshy
lands of the public domain that were classified as agricultural lands under existing public
land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:

Section 2. No private corporation or association may acquire, lease, or

hold public agricultural lands in excess of one thousand and twenty four
hectares, nor may any individual acquire such lands by purchase in
excess of one hundred and forty hectares, or by lease in excess of one
thousand and twenty-four hectares, or by homestead in excess of twenty-four
hectares. Lands adapted to grazing, not exceeding two thousand hectares,
may be leased to an individual, private corporation, or association. (Emphasis
supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section
58 of Act No. 2874 to open for sale to private parties government reclaimed and marshy
lands of the public domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and ownership of
government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No.
141, also known as the Public Land Act, which compiled the then existing laws on lands
of the public domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands of the public domain
other than timber and mineral lands.
[51]

Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into alienable or disposable lands of the public domain, which prior to such
classification are inalienable and outside the commerce of man. Section 7 of CA No.
141 authorizes the President to declare what lands are open to disposition or
concession. Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are officially delimited and classified. Sections
6, 7 and 8 of CA No. 141 read as follows:
[52]

Sec. 6. The President, upon the recommendation of the Secretary of

Agriculture and Commerce, shall from time to time classify the lands of
the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another, for the purpose of their administration and disposition.
[53]

Sec. 7. For the purposes of the administration and disposition of alienable or

disposable public lands, the President, upon recommendation by the
Secretary of Agriculture and Commerce, shall from time to time declare
what lands are open to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited and classified and, when
practicable, surveyed, and which have not been reserved for public or
quasi-public uses, nor appropriated by the Government, nor in any manner
become private property, nor those on which a private right authorized and
recognized by this Act or any other valid law may be claimed, or which, having
been reserved or appropriated, have ceased to be so. x x x.
Thus, before the government could alienate or dispose of lands of the public domain,
the President must first officially classify these lands as alienable or disposable, and
then declare them open to disposition or concession. There must be no law reserving
these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and
marshy lands of the public domain, are as follows:

Sec. 58. Any tract of land of the public domain which, being neither
timber nor mineral land, is intended to be used for residential purposes
or for commercial, industrial, or other productive purposes other than
agricultural, and is open to disposition or concession, shall be disposed
of under the provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;

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

Sec. 60. Any tract of land comprised under this title may be leased or sold, as
the case may be, to any person, corporation, or association authorized to
purchase or lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fiftynine shall be disposed of to private parties by lease only and not
otherwise, as soon asthe President, upon recommendation by the Secretary
of Agriculture, shall declare that the same are not necessary for the public
service and are open to disposition under this chapter. The lands included
in class (d) may be disposed of by sale or lease under the provisions of
this Act. (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution,
Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and
marshy disposable lands of the public domain. All these lands are intended for
residential, commercial, industrial or other non-agricultural purposes. As before, Section
61 allowed only the lease of such lands to private parties. The government could sell to
private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for
non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became
inalienable under the 1935 Constitution which only allowed the lease of these lands to
qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public
domain intended for residential, commercial, industrial or other productive purposes
other than agricultural shall be disposed of under the provisions of this chapter
and not otherwise. Under Section 10 of CA No. 141, the term disposition includes
lease of the land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of
CA No. 141, unless a subsequent law amended or repealed these provisions.
[54]

In his concurring opinion in the landmark case of Republic Real Estate

Corporation v. Court of Appeals, Justice Reynato S. Puno summarized succinctly
the law on this matter, as follows:
[55]

Foreshore lands are lands of public dominion intended for public use. So too
are lands reclaimed by the government by dredging, filling, or other
means. Act 1654 mandated that the control and disposition of the foreshore
and lands under water remained in the national government. Said law allowed
only the leasing of reclaimed land. The Public Land Acts of 1919 and 1936
also declared that the foreshore and lands reclaimed by the government were
to be disposed of to private parties by lease only and not otherwise. Before
leasing, however, the Governor-General, upon recommendation of the

Secretary of Agriculture and Natural Resources, had first to determine that the
land reclaimed was not necessary for the public service. This requisite must
have been met before the land could be disposed of. But even then, the
foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by
lease. The land remained property of the State. (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141 has
remained in effect at present.
The State policy prohibiting the sale to private parties of government reclaimed,
foreshore and marshy alienable lands of the public domain, first implemented in 1907
was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The
prohibition on the sale of foreshore lands, however, became a constitutional edict under
the 1935 Constitution. Foreshore lands became inalienable as natural resources of the
State, unless reclaimed by the government and classified as agricultural lands of the
public domain, in which case they would fall under the classification of government
reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy
disposable lands of the public domain continued to be only leased and not sold to
private parties. These lands remained sui generis, as the only alienable or disposable
lands of the public domain the government could not sell to private parties.
[56]

Since then and until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the
President to reclassify government reclaimed and marshy lands into other nonagricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the
only alienable or disposable lands for non-agricultural purposes that the government
could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
government units or entities could be sold to private parties. Section 60 of CA No. 141
declares that

Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is
requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the
Government for the purposes deemed by said entities conducive to the public
interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be

alienated, encumbered, or otherwise disposed of in a manner affecting

its title, except when authorized by Congress: x x x. (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative
authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public lands that
could be acquired from the State. These government units and entities should not just
turn around and sell these lands to private parties in violation of constitutional or
statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional limitations on
ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on
the sale of government reclaimed and marshy lands of the public domain to private
parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands.
[57]

In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections 63
and 67 of CA No. 141 provide as follows:

Sec. 63. Whenever it is decided that lands covered by this chapter are not
needed for public purposes, the Director of Lands shall ask the Secretary of
Agriculture and Commerce (now the Secretary of Natural Resources) for
authority to dispose of the same. Upon receipt of such authority, the Director
of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and
adjudication shall be made to the highest bidder. x x x. (Emphasis
supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales
of alienable or disposable lands of the public domain.
[58]

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5
of the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the
sea with government permission. However, the reclaimed land could become private
land only if classified as alienable agricultural land of the public domainopen to
disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all
natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public
dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950
state that

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.

x x x.
Art. 422. Property of public dominion, when no longer intended for public use
or for public service, shall form part of the patrimonial property of the State.
Again, the government must formally declare that the property of public dominion is
no longer needed for public use or public service, before the same could be classified
as patrimonial property of the State. In the case of government reclaimed and marshy
lands of the public domain, the declaration of their being disposable, as well as the
manner of their disposition, is governed by the applicable provisions of CA No. 141.
[59]

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public
dominion those properties of the State which, without being for public use, are intended
for public service or the development of the national wealth. Thus, government
reclaimed and marshy lands of the State, even if not employed for public use or public
service, if developed to enhance the national wealth, are classified as property of public
dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the
Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. With the exception
of agricultural, industrial or commercial, residential, and resettlement
lands of the public domain, natural resources shall not be alienated, and
no license, concession, or lease for the exploration, development, exploitation,
or utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which cases, beneficial
use may be the measure and the limit of the grant. (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the
exception of agricultural, industrial or commercial, residential, and resettlement lands of
the public domain. In contrast, the 1935 Constitution barred the alienation of all natural
resources except public agricultural lands. However, the term public agricultural lands in
the 1935 Constitution encompassed industrial, commercial, residential and resettlement
lands of the public domain. If the land of public domain were neither timber nor mineral
land, it would fall under the classification of agricultural land of the public domain. Both
the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural
resources except agricultural lands of the public domain.
[60]

The 1973 Constitution, however, limited the alienation of lands of the public domain
to individuals who were citizens of the Philippines. Private corporations, even if wholly
owned by Philippine citizens, were no longer allowed to acquire alienable lands of the
public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973
Constitution declared that

Sec. 11. The Batasang Pambansa, taking into account conservation,

ecological, and development requirements of the natural resources, shall
determine by law the size of land of the public domain which may be
developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area nor
may any citizen hold such lands by lease in excess of five hundred hectares
or acquire by purchase, homestead or grant, in excess of twenty-four
hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest
resources in excess of one hundred thousand hectares. However, such area
may be increased by the Batasang Pambansa upon recommendation of the
National Economic and Development Authority. (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands
of the public domain only through lease. Only individuals could now acquire alienable
lands of the public domain, and private corporations became absolutely barred
from acquiring any kind of alienable land of the public domain. The constitutional
ban extended to all kinds of alienable lands of the public domain, while the statutory ban
under CA No. 141 applied only to government reclaimed, foreshore and marshy
alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree
No. 1084 creating PEA, a wholly government owned and controlled corporation with a

special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes
and powers:

Sec. 4. Purpose. 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 service as may be necessary for
the efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying
out the purposes for which it is created, have the following powers and
functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area
permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any
stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for
the attainment of the purposes and objectives herein specified. (Emphasis
supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the
public domain. Foreshore areas are those covered and uncovered by the ebb and flow
of the tide. Submerged areas are those permanently under water regardless of the ebb
and flow of the tide. Foreshore and submerged areas indisputably 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.
[61]

[62]

[63]

The ban in the 1973 Constitution on private corporations from acquiring alienable
lands of the public domain did not apply to PEA since it was then, and until today, a fully
owned government corporation. The constitutional ban applied then, as it still applies
now, only to private corporations and associations. PD No. 1084 expressly empowers
PEA to hold lands of the public domain even in excess of the area permitted to
private corporations by statute. Thus, PEA can hold title to private lands, as well as
title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of
the public domain, there must be legislative authority empowering PEA to sell these

lands. This legislative authority is necessary in view of Section 60 of CA No.141, which

states

Sec. 60. x x x; but the land so granted, donated or transferred to a province,

municipality, or branch or subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its
title, except when authorized by Congress; x x x. (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. Nevertheless, any
legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from acquiring
alienable lands of the public domain. Hence, such legislative authority could only benefit
private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted
the Regalian doctrine. The 1987 Constitution declares that all natural resources
areowned by the State, and except for alienable agricultural lands of the public
domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987
Constitution state that

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. x x x.
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 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 twentyfive 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. (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning
private corporations from acquiring any kind of alienable land of the public
domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to
hold alienable lands of the public domain only through lease. As in the 1935 and 1973
Constitutions, the general law governing the lease to private corporations of reclaimed,
foreshore and marshy alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except
through lease, alienable lands of the public domain is not well understood. During the
deliberations of the 1986 Constitutional Commission, the commissioners probed the
rationale behind this ban, thus:

FR. BERNAS: Mr. Vice-President, my questions have reference to page 3,

line 5 which says:
`No private corporation or association may hold alienable lands of the
public domain except by lease, not to exceed one thousand hectares
in area.
If we recall, this provision did not exist under the 1935 Constitution, but this
was introduced in the 1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands. But it has not been very
clear in jurisprudence what the reason for this is. In some of the cases
decided in 1982 and 1983, it was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313square meter land where a chapel stood because the Supreme Court said it
would be in violation of this. (Emphasis supplied)

In Ayog v. Cusi, the Court explained the rationale behind this constitutional ban in
this way:
[64]

Indeed, one purpose of the constitutional prohibition against purchases of

public agricultural lands by private corporations is to equitably diffuse land
ownership or to encourage owner-cultivatorship and the economic family-size
farm and to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had spawned social unrest.
However, if the constitutional intent is to prevent huge landholdings, the Constitution
could have simply limited the size of alienable lands of the public domain that
corporations could acquire. The Constitution could have followed the limitations on
individuals, who could acquire not more than 24 hectares of alienable lands of the public
domain under the 1973 Constitution, and not more than 12 hectares under the 1987
Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the
land in the name of a corporation would be more effective in preventing the break-up of
farmlands. If the farmland is registered in the name of a corporation, upon the death of
the owner, his heirs would inherit shares in the corporation instead of subdivided parcels
of the farmland. This would prevent the continuing break-up of farmlands into smaller
and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public
domain. Without the constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up corporations to acquire
more alienable public lands. An individual could own as many corporations as his
means would allow him. An individual could even hide his ownership of a corporation by
putting his nominees as stockholders of the corporation. The corporation is a convenient
vehicle to circumvent the constitutional limitation on acquisition by individuals of
alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer
ownership of only a limited area of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The available alienable public lands are
gradually decreasing in the face of an ever-growing population. The most effective way
to insure faithful adherence to this constitutional intent is to grant or sell alienable lands
of the public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.
The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause,
consists of three properties, namely:
1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and
3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area.[65]

PEA confirms that the Amended JVA involves the development of the Freedom Islands
and further reclamation of about 250 hectares x x x, plus an option granted to AMARI to
subsequently reclaim another 350 hectares x x x.
[66]

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84
hectares of the 750-hectare reclamation project have been reclaimed, and the rest
of the 592.15 hectares are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00
for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also
complete, at its own expense, the reclamation of the Freedom Islands. AMARI will
further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares,
still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30
percent, respectively, the total net usable area which is defined in the Amended JVA as
the total reclaimed area less 30 percent earmarked for common areas. Title to AMARIs
share in the net usable area, totaling 367.5 hectares, will be issued in the name of
AMARI. Section 5.2 (c) of the Amended JVA provides that

x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARIs Land share based on
the Land Allocation Plan. PEA, when requested in writing by AMARI, shall
then cause the issuance and delivery of the proper certificates of title
covering AMARIs Land Share in the name of AMARI, x x x; provided, that if
more than seventy percent (70%) of the titled area at any given time pertains
to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles
pertaining to AMARI, until such time when a corresponding proportionate area
of additional land pertaining to PEA has been titled.(Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of
367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI
joint venture PEAs statutory authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that

PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the
Reclamation Area, thereby granting the Joint Venture the full and exclusive

right, authority and privilege to undertake the Project in accordance with the
Master Development Plan.
The Amended JVA is the product of a renegotiation of the original JVA dated April 25,
1995 and its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own
under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in
Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which state
that:

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. x x x.
xxx
Section 3. x x x 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, x x x.(Emphasis
supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of
Manila Bay are alienable or disposable lands of the public domain. In its Memorandum,
PEA admits that
[67]

Under the Public Land Act (CA 141, as amended), reclaimed lands are
classified as alienable and disposable lands of the public domain:
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or
other means;
x x x. (Emphasis supplied)

Likewise, the Legal Task Force constituted under Presidential Administrative Order
No. 365 admitted in its Report and Recommendation to then President Fidel V.
Ramos, [R]eclaimed lands are classified as alienable and disposable lands of the
public domain. The Legal Task Force concluded that
[68]

[69]

D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory
authority, the rights of ownership and disposition over reclaimed lands have
been transferred to PEA, by virtue of which PEA, as owner, may validly
convey the same to any qualified person without violating the Constitution or
any statute.
The constitutional provision prohibiting private corporations from holding
public land, except by lease (Sec. 3, Art. XVII, 1987 Constitution), does not
apply to reclaimed lands whose ownership has passed on to PEA by statutory
grant.
[70]

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.
[71]

Section 8 of CA No. 141 provides that only those lands shall be declared open to
disposition or concession which have been officially delimited and classified. The
President has the authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain, pursuant to Section 6 of CA No.
141. In Laurel vs. Garcia, the Executive Department attempted to sell the Roppongi
property in Tokyo, Japan, which was acquired by the Philippine Government for use as
the Chancery of the Philippine Embassy. Although the Chancery had transferred to
another location thirteen years earlier, the Court still ruled that, under Article 422 of the
Civil Code, a property of public dominion retains such character until formally
declared otherwise. The Court ruled that
[72]

[73]

[74]

The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Any
such conversion happens only if the property is withdrawn from public use
(Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of the public domain, not available for

private appropriation or ownership until there is a formal declaration on

the part of the government to withdraw it from being such (Ignacio v.
Director of Lands, 108 Phil. 335 [1960]. (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila
Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent No.
3517 in the name of PEA for the 157.84 hectares comprising the partially reclaimed
Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of the
Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA
pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name
of PEA.
PD No. 1085, coupled with President Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085
and President Aquinos issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already
reclaimed the Freedom Islands although subsequently there were partial erosions on
some areas. The government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks. Being
neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under
the 1987 Constitution, agricultural lands of the public domain are the only natural
resources that the State may alienate to qualified private parties. All other natural
resources, such as the seas or bays, are waters x x x owned by the State forming part
of the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987
Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a
private corporation, reclaimed the islands under a contract dated November 20, 1973
with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law
of Waters of 1866, argues that if the ownership of reclaimed lands may be given to the
party constructing the works, then it cannot be said that reclaimed lands are lands of the
public domain which the State may not alienate. Article 5 of the Spanish Law of Waters
reads as follows:
[75]

Article 5. Lands reclaimed from the sea in consequence of works constructed

by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such

works, unless otherwise provided by the terms of the grant of authority.

(Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim
from the sea only with proper permission from the State. Private parties could own the
reclaimed land only if not otherwise provided by the terms of the grant of authority. This
clearly meant that no one could reclaim from the sea without permission from the State
because the sea is property of public dominion. It also meant that the State could grant
or withhold ownership of the reclaimed land because any reclaimed land, like the sea
from which it emerged, belonged to the State. Thus, a private person reclaiming from
the sea without permission from the State could not acquire ownership of the reclaimed
land which would remain property of public dominion like the sea it replaced. Article 5
of the Spanish Law of Waters of 1866 adopted the time-honored principle of land
ownership that all lands that were not acquired from the government, either by purchase
or by grant, belong to the public domain.
[76]

[77]

Article 5 of the Spanish Law of Waters must be read together with laws
subsequently enacted on the disposition of public lands. In particular, CA No. 141
requires that lands of the public domain must first be classified as alienable or
disposable before the government can alienate them. These lands must not be reserved
for public or quasi-public purposes. Moreover, the contract between CDCP and the
government was executed after the effectivity of the 1973 Constitution which barred
private corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private
corporation.
[78]

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the National
Government the power to reclaim lands. Section 1 of PD No. 3-A declared that

The provisions of any law to the contrary notwithstanding, the

reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person authorized by it
under a proper contract. (Emphasis supplied)
x x x.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the National
Government or by a person contracted by the National Government. Private parties may
reclaim from the sea only under a contract with the National Government, and no longer
by grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Governments implementing arm to undertake all reclamation projects of the
government, which shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity. Under such contract, a private party

receives compensation for reclamation services rendered to PEA. Payment to the

contractor may be in cash, or in kind consisting of portions of the reclaimed land,
subject to the constitutional ban on private corporations from acquiring alienable lands
of the public domain. The reclaimed land can be used as payment in kind only if the
reclaimed land is first classified as alienable or disposable land open to disposition, and
then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional
592.15 hectares which are still submerged and forming part of Manila Bay. There is no
legislative or Presidential act classifying these submerged areas as alienable or
disposable lands of the public domain open to disposition. These submerged
areas are not covered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain, and in their present state
areinalienable and outside the commerce of man. Until reclaimed from the sea,
these submerged areas are, under the Constitution, waters x x x owned by the State,
forming part of the public domain and consequently inalienable. Only when actually
reclaimed from the sea can these submerged areas be classified as public agricultural
lands, which under the Constitution are the only natural resources that the State may
alienate. Once reclaimed and transformed into public agricultural lands, the government
may then officially classify these lands as alienable or disposable lands open to
disposition. Thereafter, the government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the commerce of man.
The classification of PEAs reclaimed foreshore and submerged lands into alienable
or disposable lands open to disposition is necessary because PEA is tasked under its
charter to undertake public services that require the use of lands of the public
domain. Under Section 5 of PD No. 1084, the functions of PEA include the following:
[T]o own or operate railroads, tramways and other kinds of land transportation, x x x;
[T]o construct, maintain and operate such systems of sanitary sewers as may be
necessary; [T]o construct, maintain and operate such storm drains as may be
necessary. PEA is empowered to issue rules and regulations as may be necessary for
the proper use by private parties of any or all of the highways, roads, utilities,
buildings and/or any of its properties and to impose or collect fees or tolls for their
use.Thus, part of the reclaimed foreshore and submerged lands held by the PEA would
actually be needed for public use or service since many of the functions imposed on
PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be
primarily responsible for integrating, directing, and coordinating all reclamation projects
for and on behalf of the National Government. The same section also states that [A]ll
reclamation projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract executed by it
with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A and
PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No.
525 recognized PEA as the government entity to undertake the reclamation of lands and
ensure their maximum utilization in promoting public welfare and interests. Since
[79]

large portions of these reclaimed lands would obviously be needed for public service,
there must be a formal declaration segregating reclaimed lands no longer needed for
public service from those still needed for public service.
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong
to or be owned by the PEA, could not automatically operate to classify inalienable lands
into alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore
and submerged lands of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or
EO No. 525, vests in the Department of Environment and Natural Resources (DENR for
brevity) the following powers and functions:

Sec. 4. Powers and Functions. The Department shall:

(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and
disposable public lands, mineral resources and, in the process of exercising
such control, impose appropriate taxes, fees, charges, rentals and any such
form of levy and collect such revenues for the exploration, development,
utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of
licenses, permits, concessions, lease agreements and such other
privileges concerning the development, exploration and utilization of the
countrys marine, freshwater, and brackish water and over all aquatic
resources of the country and shall continue to oversee, supervise and
police our natural resources; cancel or cause to cancel such privileges
upon failure, non-compliance or violations of any regulation, order, and for all
other causes which are in furtherance of the conservation of natural resources
and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition
of all lands of the public domain and serve as the sole agency
responsible for classification, sub-classification, surveying and titling of
lands in consultation with appropriate agencies. (Emphasis supplied)
[80]

As manager, conservator and overseer of the natural resources of the State, DENR
exercises supervision and control over alienable and disposable public lands.DENR
also exercises exclusive jurisdiction on the management and disposition of all lands of
the public domain. Thus, DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or not. This means that PEA

needs authorization from DENR before PEA can undertake reclamation projects in
Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 6 and 7 of CA No. 141. Once DENR decides
that the reclaimed lands should be so classified, it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or disposable lands of
the public domain open to disposition. We note that then DENR Secretary Fulgencio S.
Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.
[81]

[82]

In short, DENR is vested with the power to authorize the reclamation of areas under
water, while PEA is vested with the power to undertake the physical reclamation of
areas under water, whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged
areas does not make the reclaimed lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the
National Government of lands of the public domain to PEA does not make the lands
alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable
and open to disposition and a declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands of the public domain. Only
such an official classification and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to disposition under the
Constitution, Title I and Title III of CA No. 141 and other applicable laws.
[83]

[84]

PEAs Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the
public domain, the reclaimed lands shall be disposed of in accordance with CA No. 141,
the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands
transferred to a branch or subdivision of the government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x. (Emphasis by PEA)
[85]

In Laurel vs. Garcia, the Court cited Section 48 of the Revised Administrative
Code of 1987, which states that
[86]

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of

conveyance shall be executed in behalf of the government by the following: x

x x.
Thus, the Court concluded that a law is needed to convey any real property belonging to
the Government. The Court declared that -

It is not for the President to convey real property of the government on his or
her own sole will. Any such conveyance must be authorized and
approved by a law enacted by the Congress. It requires executive and
legislative concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority
allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,
provides that

The land reclaimed in the foreshore and offshore area of Manila

Bay pursuant to the contract for the reclamation and construction of the
Manila-Cavite Coastal Road Project between the Republic of the Philippines
and the Construction and Development Corporation of the Philippines dated
November 20, 1973 and/or any other contract or reclamation covering the
same area is hereby transferred, conveyed and assigned to the
ownership and administration of the Public Estates Authorityestablished
pursuant to PD No. 1084; Provided, however, That the rights and interests of
the Construction and Development Corporation of the Philippines pursuant to
the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume
the obligations of the Republic of the Philippines (Department of Public
Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development
Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an issued value of said
shares of stock (which) shall be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public
Estates Authority shall execute such contracts or agreements, including
appropriate agreements with the Construction and Development Corporation
of the Philippines, as may be necessary to implement the above.

Special land patent/patents shall be issued by the Secretary of Natural

Resources in favor of the Public Estates Authority without prejudice to
the subsequent transfer to the contractor or his assignees of such
portion or portions of the land reclaimed or to be reclaimed as provided
for in the above-mentioned contract. On the basis of such patents, the
Land Registration Commission shall issue the corresponding certificate
of title. (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides
that -

Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the

PEA which shall be responsible for its administration, development, utilization
or disposition in accordance with the provisions of Presidential Decree No.
1084. Any and all income that the PEA may derive from the sale, lease or use
of reclaimed lands shall be used in accordance with the provisions of
Presidential Decree No. 1084.
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to
sell its reclaimed lands. PD No. 1085 merely transferred ownership and administration
of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA shall belong to or be owned by PEA. EO No. 525 expressly states
that PEA should dispose of its reclaimed lands in accordance with the provisions of
Presidential Decree No. 1084, the charter of PEA.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x
owned, managed, controlled and/or operated by the government. (Emphasis
supplied) There is, therefore, legislative authority granted to PEA to sell its lands,
whether patrimonial or alienable lands of the public domain. PEA may sell to
private parties its patrimonial properties in accordance with the PEA charter free from
constitutional limitations. The constitutional ban on private corporations from acquiring
alienable lands of the public domain does not apply to the sale of PEAs patrimonial
lands.
[87]

PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban does not apply to
individuals. PEA, however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land
of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be
transferred by PEA to the contractor or his assignees (Emphasis supplied) would not

apply to private corporations but only to individuals because of the constitutional

ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987
Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable
lands open to disposition, and further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or leasing these lands. PEA must
observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in
the absence of a law exempting PEA from holding a public auction. Special Patent No.
3517 expressly states that the patent is issued by authority of the Constitution and PD
No. 1084, supplemented by Commonwealth Act No. 141, as amended. This is an
acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise provided by law. Executive Order
No. 654, which authorizes PEA to determine the kind and manner of payment for the
transfer of its assets and properties, does not exempt PEA from the requirement of
public auction. EO No. 654 merely authorizes PEA to decide the mode of payment,
whether in kind and in installment, but does not authorize PEA to dispense with public
auction.
[88]

[89]

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government

Auditing Code, the government is required to sell valuable government property through
public bidding. Section 79 of PD No. 1445 mandates that

Section 79. When government property has become unserviceable for any
cause, or is no longer needed, it shall, upon application of the officer
accountable therefor, be inspected by the head of the agency or his duly
authorized representative in the presence of the auditor concerned and, if
found to be valueless or unsaleable, it may be destroyed in their presence. If
found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar
body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any
newspaper of general circulation, or where the value of the property does
not warrant the expense of publication, by notices posted for a like period in at
least three public places in the locality where the property is to be sold. In the
event that the public auction fails, the property may be sold at a private
sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.

It is only when the public auction fails that a negotiated sale is allowed, in which case
the Commission on Audit must approve the selling price. The Commission on Audit
implements Section 79 of the Government Auditing Code through Circular No. 89296 dated January 27, 1989. This circular emphasizes that government assets must
be disposed of only through public auction, and a negotiated sale can be resorted to
only in case of failure of public auction.
[90]

[91]

At the public auction sale, only Philippine citizens are qualified to bid for PEAs
reclaimed foreshore and submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale of any kind of alienable land of
the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10,
1991. PEA imposed a condition that the winning bidder should reclaim another 250
hectares of submerged areas to regularize the shape of the Freedom Islands, under a
60-40 sharing of the additional reclaimed areas in favor of the winning bidder. No one,
however, submitted a bid. On December 23, 1994, the Government Corporate Counsel
advised PEA it could sell the Freedom Islands through negotiation, without need of
another public bidding, because of the failure of the public bidding on December 10,
1991.
[92]

[93]

However, the original JVA dated April 25, 1995 covered not only the Freedom
Islands and the additional 250 hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract,
enlarged the reclamation area to 750 hectares. The failure of public bidding on
December 10, 1991, involving only 407.84 hectares, is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the
failure of public bidding happened on December 10, 1991, more than three years before
the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.
[94]

[95]

Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is
absolute and clear: Private corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x. Even Republic Act No. 6957 (BOT
Law, for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed lands
to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957 states

Sec. 6. Repayment Scheme. - For the financing, construction, operation and

maintenance of any infrastructure projects undertaken through the buildoperate-and-transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent x x x may likewise be repaid in the
form of a share in the revenue of the project or other non-monetary payments,
such as, but not limited to, the grant of a portion or percentage of the

reclaimed land, subject to the constitutional requirements with respect to

the ownership of the land: x x x. (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the public domain
in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI,
authorizes local governments in land reclamation projects to pay the contractor or
developer in kind consisting of a percentage of the reclaimed land, to wit:

Section 302. Financing, Construction, Maintenance, Operation, and

Management of Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment
plan may consist of the grant of a portion or percentage of the reclaimed land
or the industrial estate constructed.
Although Section 302 of the Local Government Code does not contain a proviso similar
to that of the BOT Law, the constitutional restrictions on land ownership automatically
apply even though not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the reclaimed
land, not exceeding 12 hectares of non-agricultural lands, may be conveyed to him in
ownership in view of the legislative authority allowing such conveyance. This is the only
way these provisions of the BOT Law and the Local Government Code can avoid a
direct collision with Section 3, Article XII of the 1987 Constitution.
[96]

Registration of lands of the public domain

Finally, PEA theorizes that the act of conveying the ownership of the reclaimed
lands to public respondent PEA transformed such lands of the public domain to private
lands. This theory is echoed by AMARI which maintains that the issuance of the special
patent leading to the eventual issuance of title takes the subject land away from the land
of public domain and converts the property into patrimonial or private property. In short,
PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the
corresponding certificates of titles, the 157.84 hectares comprising the Freedom Islands
have become private lands of PEA. In support of their theory, PEA and AMARI cite the
following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held

Once the patent was granted and the corresponding certificate of title was issued,
the land ceased to be part of the public domain and became private property over
which the Director of Lands has neither control nor jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title
is issued, the land ceases to be part of the public domain and becomes private
property over which the Director of Lands has neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the Court held
When the lots in dispute were certified as disposable on May 19, 1971, and free
patents were issued covering the same in favor of the private respondents, the said
lots ceased to be part of the public domain and, therefore, the Director of Lands lost
jurisdiction over the same.
5.Republic v. Court of Appeals,[101] where the Court stated
Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient for initial registration under
the Land Registration Act. Such land grant is constitutive of a fee simple title or
absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of
the Act, which governs the registration of grants or patents involving public lands,
provides that Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act (Land Registration
Act, Act 496) and shall become registered lands.

The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private lands or that
upon issuance of the certificate of title the land automatically comes under the Torrens
System.The fifth case cited involves the registration under the Torrens System of a
12.8-hectare public land granted by the National Government to Mindanao Medical
Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings
and other facilities of Mindanao Medical Center, which performed a public service. The
Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao
Medical Center under Section 122 of Act No. 496. This fifth case is an example of a
public land being registered under Act No. 496 without the land losing its character as a
property of public dominion.

In the instant case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any private
party. No one is asking the Director of Lands to cancel PEAs patent or certificates of
title. In fact, the thrust of the instant petition is that PEAs certificates of title should
remain with PEA, and the land covered by these certificates, being alienable lands of
the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the
registrant private or public ownership of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously conferred by any of the
recognized modes of acquiring ownership. Registration does not give the registrant a
better right than what the registrant had prior to the registration. The registration of
lands of the public domain under the Torrens system, by itself, cannot convert public
lands into private lands.
[102]

[103]

Jurisprudence holding that upon the grant of the patent or issuance of the certificate
of title the alienable land of the public domain automatically becomes private land
cannot apply to government units and entities like PEA. The transfer of the Freedom
Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated in
Special Patent No. 3517 issued by then President Aquino, to wit:

NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the

Philippines and in conformity with the provisions of Presidential Decree No.
1084,supplemented by Commonwealth Act No. 141, as amended, there
are hereby granted and conveyed unto the Public Estates Authority the
aforesaid tracts of land containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part
hereof. (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not
covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized
by Congress, the sale of alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of
PD No. 1529, a statutory lien affecting title of the registered land even if not annotated
on the certificate of title. Alienable lands of the public domain held by government
entities under Section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their
disposition.Congress, however, cannot authorize the sale to private corporations of
reclaimed alienable lands of the public domain because of the constitutional ban. Only
individuals can benefit from such law.
[104]

The grant of legislative authority to sell public lands in accordance with Section 60
of CA No. 141 does not automatically convert alienable lands of the public domain into
private or patrimonial lands. The alienable lands of the public domain must be
transferred to qualified private parties, or to government entities not tasked to dispose of

public lands, before these lands can become private or patrimonial lands. Otherwise,
the constitutional ban will become illusory if Congress can declare lands of the public
domain as private or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly
public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain.Thus, EO
No. 525 declares that

EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible
for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be
evaluated for consistency with national programs;
Whereas, there is a need to give further institutional support to the
Governments declared policy to provide for a coordinated, economical and
efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas
shall be limited to the National Government or any person authorized by it
under proper contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach
in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates
Authority as a government corporation to undertake reclamation of
lands and ensure their maximum utilization in promoting public welfare
and interests; and
Whereas, Presidential Decree No. 1416 provides the President with
continuing authority to reorganize the national government including the
transfer, abolition, or merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution and

pursuant to Presidential Decree No. 1416, do hereby order and direct the
following:
Section 1. The Public Estates Authority (PEA) shall be primarily
responsible for integrating, directing, and coordinating all reclamation
projects for and on behalf of the National Government. All reclamation
projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity; Provided, that, reclamation projects of
any national government agency or entity authorized under its charter shall be
undertaken in consultation with the PEA upon approval of the President.
xxx.
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, PEAs 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 PEAs name does not automatically make such lands private.
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 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.
[105]

The contention of PEA and AMARI that public lands, once registered under Act No.
496 or PD No. 1529, automatically become private lands is contrary to existing
laws. Several laws authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing their character as
public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively,
provide as follows:

Act No. 496

Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x
x Government of the Philippine Islands are alienated, granted, or conveyed to
persons or thepublic or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become registered lands.
PD No. 1529
Sec. 103. Certificate of Title to Patents. Whenever public land is by the
Government alienated, granted or conveyed to any person, the same shall be
brought forthwith under the operation of this Decree. (Emphasis supplied)
Based on its legislative history, the phrase conveyed to any person in Section 103 of PD
No. 1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government, as provided in Section 60 of
CA No. 141, may be registered under the Torrens System pursuant to Section 103 of
PD No. 1529. Such registration, however, is expressly subject to the condition in
Section 60 of CA No. 141 that the land shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by
Congress. This provision refers to government reclaimed, foreshore and marshy lands
of the public domain that have been titled but still cannot be alienated or encumbered
unless expressly authorized by Congress. The need for legislative authority prevents
the registered land of the public domain from becoming private land that can be
disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public
domain may be registered under the Torrens System. Section 48, Chapter 12, Book I of
the Code states

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled
in the name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public
wharf may be titled in the name of a government corporation regulating port operations
in the country. Private property purchased by the National Government for expansion of
an airport may also be titled in the name of the government agency tasked to administer
the airport. Private property donated to a municipality for use as a town plaza or public
school site may likewise be titled in the name of the municipality. All these properties
become properties of the public domain, and if already registered under Act No. 496 or
PD No. 1529, remain registered land. There is no requirement or provision in any
existing law for the de-registration of land from the Torrens System.
[106]

Private lands taken by the Government for public use under its power of eminent
domain become unquestionably part of the public domain. Nevertheless, Section 85 of
PD No. 1529 authorizes the Register of Deeds to issue in the name of the National
Government new certificates of title covering such expropriated lands. Section 85 of PD
No. 1529 states

Sec. 85. Land taken by eminent domain. Whenever any registered land, or
interest therein, is expropriated or taken by eminent domain, the National
Government, province, city or municipality, or any other agency or
instrumentality exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state definitely by an
adequate description, the particular property or interest expropriated, the
number of the certificate of title, and the nature of the public use.A
memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government, province,
city, municipality, or any other agency or instrumentality exercising such
right for the land so taken. The legal expenses incident to the memorandum of
registration or issuance of a new certificate of title shall be for the account of
the authority taking the land or interest therein.(Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively
private or patrimonial lands. Lands of the public domain may also be registered
pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the
Freedom Islands or of the lands to be reclaimed from submerged areas of Manila
Bay. In the words of AMARI, the Amended JVA is not a sale but a joint venture with a
stipulation for reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under its 1973 contract
with the Republic. Whether the Amended JVA is a sale or a joint venture, the fact
remains that the Amended JVA requires PEA to cause the issuance and delivery of the
certificates of title conveying AMARIs Land Share in the name of AMARI.
[107]

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which
provides that private corporations shall not hold such alienable lands of the public
domain except by lease. The transfer of title and ownership to AMARI clearly means
that AMARI will hold the reclaimed lands other than by lease. The transfer of title and
ownership is a disposition of the reclaimed lands, a transaction considered a sale or
alienation under CA No. 141, the Government Auditing Code, and Section 3, Article
XII of the 1987 Constitution.
[108]

[109]

The Regalian doctrine is deeply implanted in our legal system. Foreshore and
submerged areas form part of the public domain and are inalienable. Lands reclaimed
from foreshore and submerged areas also form part of the public domain and are also
inalienable, unless converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government are sui generis, not
available for sale to private parties unlike other alienable public lands. Reclaimed lands
retain their inherent potential as areas for public use or public service. Alienable lands of
the public domain, increasingly becoming scarce natural resources, are to be distributed
equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind
of alienable land of the public domain. Those who attempt to dispose of inalienable
natural resources of the State, or seek to circumvent the constitutional ban on alienation
of lands of the public domain to private corporations, do so at their own risk.
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[110] 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[111] 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.
[112]

Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to
rule on this last issue. Besides, the Court is not a trier of facts, and this last issue
involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared NULL
and VOID ab initio.
SO ORDERED.

G.R. No. 73002 December 29, 1986

THE DIRECTOR OF LANDS, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC.,
ETC., respondents.
D. Nacion Law Office for private respondent.

NARVASA, J.:

The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate
Appellate Court affirming a decision of the Court of First Instance of Isabela, which ordered
registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481, 390
square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat
tribe.
The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act
No. 141 (The Public Land Act). as amended: and the appealed judgment sums up the findings of the
trial court in said proceedings in this wise:
1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a
corporation duly organized in accordance with the laws of the Republic of the Philippines and
registered with the Securities and Exchange Commission on December 23, 1959;
2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can acquire
real properties pursuant to the provisions of the Articles of Incorporation particularly on the
provision of its secondary purposes (paragraph (9), Exhibit 'M-l');
3. That the land subject of the Land Registration proceeding was ancestrally acquired by
Acme Plywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel and Acer Infiel,
both members of the Dumagat tribe and as such are cultural minorities;
4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale
took place on October 29, 1962;
5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood &
Veneer Co., Inc., dates back before the Philippines was discovered by Magellan as the
ancestors of the Infiels have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer Infiel;
6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous,
adverse and public from 1962 to the present and tacking the possession of the Infiels who
were granted from whom the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial.
7. That the land sought to be registered is a private land pursuant to the provisions of
Republic Act No. 3872 granting absolute ownership to members of the non-Christian Tribes
on land occupied by them or their ancestral lands, whether with the alienable or disposable
public land or within the public domain;
8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five
Million (P45,000,000.00) Pesos worth of improvements, said improvements were seen by
the Court during its ocular investigation of the land sought to be registered on September 18,
1982;

9. That the ownership and possession of the land sought to be registered by the applicant
was duly recognized by the government when the Municipal Officials of Maconacon, Isabela,
have negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc., and
this negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer
Co., Inc., had donated a part of the land bought by the Company from the Infiels for the
townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was
accepted by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their
special session on November 22, 1979.
The Director of Lands takes no issue with any of these findings except as to the applicability of the
1935 Constitution to the matter at hand. Concerning this, he asserts that, the registration
proceedings have been commenced only on July 17, 1981, or long after the 1973 Constitution had
gone into effect, the latter is the correctly applicable law; and since section 11 of its Article XIV
prohibits private corporations or associations from holding alienable lands of the public domain,
except by lease not to exceed 1,000 hectares (a prohibition not found in the 1935 Constitution which
was in force in 1962 when Acme purchased the lands in question from the Infiels), it was reversible
error to decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth
Act No. 141, as amended, reads:
SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims, and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) Members of the National Cultural minorities who by themselves or through their
predecessors-in-interest have been in open. continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in subsection (b) hereof.
The Petition for Review does not dispute-indeed, in view of the quoted findings of the trial court
which were cited and affirmed by the Intermediate Appellate Court, it can no longer controvert before
this Court-the fact that Mariano and Acer Infiel, from whom Acme purchased the lands in question on
October 29, 1962, are members of the national cultural minorities who had, by themselves and
through their progenitors, possessed and occupied those lands since time immemorial, or for more

than the required 30-year period and were, by reason thereof, entitled to exercise the right granted in
Section 48 of the Public Land Act to have their title judicially confirmed. Nor is there any pretension
that Acme, as the successor-in-interest of the Infiels, is disqualified to acquire and register ownership
of said lands under any provisions of the 1973 Constitution other than Section 11 of its Article XIV
already referred to.
Given the foregoing, the question before this Court is whether or not the title that the Infiels had
transferred to Acme in 1962 could be confirmed in favor of the latter in proceedings instituted by it in
1981 when the 1973 Constitution was already in effect, having in mind the prohibition therein against
private corporations holding lands of the public domain except in lease not exceeding 1,000
hectares.
The question turns upon a determination of the character of the lands at the time of institution of the
registration proceedings in 1981. If they were then still part of the public domain, it must be
answered in the negative. If, on the other hand, they were then already private lands, the
constitutional prohibition against their acquisition by private corporations or associations obviously
does not apply.
In this regard, attention has been invited to Manila Electric Company vs. Castro-Bartolome, et
al, 1 where a similar set of facts prevailed. In that case, Manila Electric Company, a domestic corporation
more than 60% of the capital stock of which is Filipino-owned, had purchased in 1947 two lots in Tanay,
Rizal from the Piguing spouses. The lots had been possessed by the vendors and, before them, by their
predecessor-in-interest, Olimpia Ramos, since prior to the outbreak of the Pacific War in 1941. On
December 1, 1976, Meralco applied to the Court of First Instance of Rizal, Makati Branch, for confirmation
of title to said lots. The court, assuming that the lots were public land, dismissed the application on the
ground that Meralco, a juridical person, was not qualified to apply for registration under Section 48(b) of
the Public Land Act which allows only Filipino citizens or natural persons to apply for judicial confirmation
of imperfect titles to public land. Meralco appealed, and a majority of this Court upheld the dismissal. It
was held that:
..., the said land is still public land. It would cease to be public land only upon the issuance of
the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still
public land and the Meralco, as a juridical person, is disqualified to apply for its registration
under section 48(b), Meralco's application cannot be given due course or has to be
dismissed.
Finally, it may be observed that the constitutional prohibition makes no distinction between
(on the one hand) alienable agricultural public lands as to which no occupant has an
imperfect title and (on the other hand) alienable lands of the public domain as to which an
occupant has on imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make any distinction or
qualification. The prohibition applies to alienable public lands as to which a Torrens title may
be secured under section 48(b). The proceeding under section 48(b) 'presupposes that the
land is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning
with Carino in 1909 2thru Susi in 1925 3 down to Herico in 1980, 4 which developed, affirmed and
reaffirmed the doctrine that open, exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes
private property. That said dissent expressed what is the better and, indeed, the correct, view-becomes
evident from a consideration of some of the principal rulings cited therein,
The main theme was given birth, so to speak, in Carino involving the Decree/Regulations of June 25,
1880 for adjustment of royal lands wrongfully occupied by private individuals in the Philippine
Islands. It was ruled that:
It is true that the language of articles 4 and 5 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. ...
That ruling assumed a more doctrinal character because expressed in more categorical language,
in Susi:
.... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established in
paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary
requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of
the public domain openly, continuously, exclusively and publicly since July 26, 1984, with a
right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So
that when Angela Razon applied for the grant in her favor, Valentin Susi had already
acquired, by operation of law not only a right to a grant, but a grant of the Government, for it
is not necessary that a certificate of title should be issued in order that said grant may be
sanctioned by the courts, an application therefore is sufficient, under the provisions of
section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the land in
question by a grant of the State, it had already ceased to be of the public domain and had
become private property, at least by presumption, of Valentin Susi, beyond the control of the
Director of Lands. Consequently, in selling the land in question of Angela Razon, the Director
of Lands disposed of a land over which he had no longer any title or control, and the sale
thus made was void and of no effect, and Angela Razon did not thereby acquire any right. 6
Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of
Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs. Cabanatuan, 9 Miguel vs. Court of
Appeals 10 and Herico vs. Dar, supra, by invoking and affirming the Susi doctrine have firmly rooted it in
jurisprudence.

Herico, in particular, appears to be squarely affirmative: 11

.... Secondly, under the provisions of Republic Act No. 1942, which the respondent Court
held to be inapplicable to the petitioner's case, with the latter's proven occupation and
cultivation for more than 30 years since 1914, by himself and by his predecessors-ininterest, title over the land has vested on petitioner so as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by
free patent. ....
xxx xxx xxx
As interpreted in several cases, when the conditions as specified in the foregoing provision
are complied with, the possessor is deemed to have acquired, by operation of law, a right to
a grant, a government grant, without the necessity of a certificate of title being issued. The
land, therefore, ceases to be of the public domain and beyond the authority of the Director of
Lands to dispose of. The application for confirmation is mere formality, the lack of which
does not affect the legal sufficiency of the title as would be evidenced by the patent and the
Torrens title to be issued upon the strength of said patent. 12
Nothing can more clearly demonstrate the logical inevitability of considering possession of public
land which is of the character and duration prescribed by statute as the equivalent of an express
grant from the State than the dictum of the statute itself 13 that the possessor(s) "... shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title .... " No proof being admissible to overcome a conclusive presumption,
confirmation proceedings would, in truth be little more than a formality, at the most limited to ascertaining
whether the possession claimed is of the required character and length of time; and registration
thereunder would not confer title, but simply recognize a title already vested. The proceedings would
not originally convert the land from public to private land, but only confirm such a conversion already
affected by operation of law from the moment the required period of possession became complete. As
was so well put in Carino, "... (T)here 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."
If it is accepted-as it must be-that the land was already private land to which the Infiels had a legally
sufficient and transferable title on October 29, 1962 when Acme acquired it from said owners, it must
also be conceded that Acme had a perfect right to make such acquisition, there being nothing in the
1935 Constitution then in force (or, for that matter, in the 1973 Constitution which came into effect
later) prohibiting corporations from acquiring and owning private lands.
Even on the proposition that the land remained technically "public" land, despite immemorial
possession of the Infiels and their ancestors, until title in their favor was actually confirmed in
appropriate proceedings under the Public Land Act, there can be no serious question of Acmes right
to acquire the land at the time it did, there also being nothing in the 1935 Constitution that might be
construed to prohibit corporations from purchasing or acquiring interests in public land to which the
vendor had already acquired that type of so-called "incomplete" or "imperfect" title. The only
limitation then extant was that corporations could not acquire, hold or lease public agricultural lands

in excess of 1,024 hectares. The purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids corporations from owning lands of the
public domain cannot defeat a right already vested before that law came into effect, or invalidate
transactions then perfectly valid and proper. This Court has already held, in analogous
circumstances, that the Constitution cannot impair vested rights.
We hold that the said constitutional prohibition 14 has no retroactive application to the sales
application of Binan Development Co., Inc. because it had already acquired a vested right to the
land applied for at the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by the new Constitution.
Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public
agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner'
prohibition action is barred by the doctrine of vested rights in constitutional law.
xxx xxx xxx
The due process clause prohibits the annihilation of vested rights. 'A state may not impair
vested rights by legislative enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power'(16 C.J.S. 1177-78).
xxx xxx xxx
In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the
right of the corporation to purchase the land in question had become fixed and established
and was no longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the issuance of a patent had
the effect of segregating the said land from the public domain. The corporation's right to
obtain a patent for the land is protected by law. It cannot be deprived of that right without due
process (Director of Lands vs. CA, 123 Phil. 919). 15
<re||an1w>

The fact, therefore, that the confirmation proceedings were instituted by Acme in its own name must
be regarded as simply another accidental circumstance, productive of a defect hardly more than
procedural and in nowise affecting the substance and merits of the right of ownership sought to be
confirmed in said proceedings, there being no doubt of Acme's entitlement to the land. As it is
unquestionable that in the light of the undisputed facts, the Infiels, under either the 1935 or the 1973
Constitution, could have had title in themselves confirmed and registered, only a rigid subservience
to the letter of the law would deny the same benefit to their lawful successor-in-interest by valid
conveyance which violates no constitutional mandate.
The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling
in Meralco must be reconsidered and no longer deemed to be binding precedent. The correct rule,
as enunciated in the line of cases already referred to, is that alienable public land held by a
possessor, personally or through his predecessors-in-interest, openly, continuously and exclusively

for the prescribed statutory period (30 years under The Public Land Act, as amended) is converted
to private property by the mere lapse or completion of said period, ipso jure. Following that rule and
on the basis of the undisputed facts, the land subject of this appeal was already private property at
the time it was acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there
being at the time no prohibition against said corporation's holding or owning private land. The
objection that, as a juridical person, Acme is not qualified to apply for judicial confirmation of title
under section 48(b) of the Public Land Act is technical, rather than substantial and, again, finds its
answer in the dissent in Meralco:
6. To uphold respondent judge's denial of Meralco's application on the technicality that the
Public Land Act allows only citizens of the Philippines who are natural persons to apply for
confirmation of their title would be impractical and would just give rise to multiplicity of court
actions. Assuming that there was a technical error not having filed the application for
registration in the name of the Piguing spouses as the original owners and vendors, still it is
conceded that there is no prohibition against their sale of the land to the applicant Meralco
and neither is there any prohibition against the application being refiled with retroactive effect
in the name of the original owners and vendors (as such natural persons) with the end result
of their application being granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in their favor. It should not
be necessary to go through all the rituals at the great cost of refiling of all such applications
in their names and adding to the overcrowded court dockets when the Court can after all
these years dispose of it here and now. (See Francisco vs. City of Davao)
The ends of justice would best be served, therefore, by considering the applications for
confirmation as amended to conform to the evidence, i.e. as filed in the names of the original
persons who as natural persons are duly qualified to apply for formal confirmation of the title
that they had acquired by conclusive presumption and mandate of the Public Land Act and
who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly
qualified to hold and own private lands) and granting the applications for confirmation of title
to the private lands so acquired and sold or exchanged.
There is also nothing to prevent Acme from reconveying the lands to the Infiels and the latter from
themselves applying for confirmation of title and, after issuance of the certificate/s of title in their
names, deeding the lands back to Acme. But this would be merely indulging in empty charades,
whereas the same result is more efficaciously and speedily obtained, with no prejudice to anyone, by
a liberal application of the rule on amendment to conform to the evidence suggested in the dissent
in Meralco.
While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a real
sense, it breaks no precedent, but only reaffirms and re-established, as it were, doctrines the
soundness of which has passed the test of searching examination and inquiry in many past cases.
Indeed, it is worth noting that the majority opinion, as well as the concurring opinions of Chief Justice
Fernando and Justice Abad Santos, in Meralco rested chiefly on the proposition that the petitioner
therein, a juridical person, was disqualified from applying for confirmation of an imperfect title to
public land under Section 48(b) of the Public Land Act. Reference to the 1973 Constitution and its
Article XIV, Section 11, was only tangential limited to a brief paragraph in the main opinion, and may,

in that context, be considered as essentially obiter. Meralco, in short, decided no constitutional

question.
WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate
Appellate Court, the same is hereby affirmed, without costs in this instance.
SO ORDERED.
Feria, Yap, Fernan, Alampay, Cruz, Paras and Feliciano, JJ., concur.

Separate Opinions
GUTIERREZ, JR., J., concurring:
I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:

I am honored by my brethren's judgment at bar that my dissenting opinion in the June,
1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is the better. . . .
and indeed the correct view." My dissent was anchored on the landmark 1909 case of Carino 2 through
the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is
established doctrine....... that an open, continuous, adverse and public possession of a land of the public
domain for the period provided in the Public Land Act provision in force at the time (from July 26, 1894
in Susi under the old law [this period was reduced to 'at least thirty years immediately preceding the filing
of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to the
period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors
confers an effective title on said possessor, whereby the land ceases to be land of the public domain and
becomes private property." I hereby reproduce the same by reference for brevity's sake. But since we are
reverting to the old above-cited established doctrine and precedents and discarding
the Meralco and Iglesia ni Cristo cases which departed therefrom in the recent past, I feel constrained to
write this concurrence in amplification of my views and ratio decidendi.
Under the express text and mandate of the cited Act, such possessors "shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this chapter. "
The Court thus held in Susi that under the presumption juris et de jure established in the Act, the
rightful possessor of the public land for the statutory period "already acquired, by operation of law,
not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of title
should be issued an order that said grant may be sanctioned by the courts, an application therefore

is sufficient . . . . If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the
State, it had already ceased to be of the public domainand had become private property, at least by
presumption, of Valentin Susi, beyond the control of the Director of Lands [and beyond his authority
to sell to any other person]. " 6
The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the
U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who would have been deprived of
ancestral family lands by the dismissal of his application for registration) which reversed the
dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view
that under the decree and regulations of June 25, 1880, "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, whenever
made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by
earlier law."
The Court's decision at bar now expressly overturns the Meralco and related cases subsequent
thereto which failed to adhere to the aforecited established doctrine dating back to 1909 and was
consistently applied up to June 29, 1982 (when the Meralco decision was promulgated). We reaffirm
the established doctrine that such acquisitive prescription of alienable public lands takes place ipso
jure or by operation of law without the necessity of a prior issuance of a certificate of title. The
land ipso jure ceases to be of the public domain and becomes private property, which may be
lawfully sold to and acquired by qualified corporations such as respondent corporation. (As stressed
in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect
the legal sufficiency of the title.")
Such ipso jure conversion into private property of public lands publicly held under a bona fide claim
of acquisition or ownership is the public policy of the Act and is so expressly stated therein. By virtue
of such conversion into private property, qualified corporations may lawfully acquire them and there
is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or
acquiring title to lands of the public domain, as claimed in the dissenting opinion, for the simple
reason that no public lands are involved.
It should be noted that respondent corporation purchased the land from the Infiels on October 16,
1962 under the aegis of the 1935 Constitution which contained no prohibition against corporations
holding public lands (except a limit of 1,024 hectares) unlike the later 1973 Constitution which
imposed an absolute prohibition. Even on the erroneous assumption that the land remained public
land despite the Infiels' open possession thereof as owners from time immemorial, respondent
corporation's lawful purchase from them of the land in 1962 and P 45million investments redounding
presumably to the welfare and progress of the community, particularly the municipality of
Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which
could not be impaired by the prohibition adopted eleven years later. But as sufficiently stressed, the
land of the Infiels had been ipso jure converted into private land and they had a legally sufficient and
transferable title conferred by the conclusive presumption of the Public Land Act (which needed only
to be established in confirmation of title proceedings for formalization and issuance of the certificate
of title) which they lawfully and validly transferred to respondent corporation.

In fact, the many amendments to the Act extending the period for the filing of such applications for
judicial confirmation of imperfect and incomplete titles to alienable and disposable public lands
expressly reiterate that it has always been the "policy of the State to hasten the settlement,
adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands
publicly and notoriously occupied and cultivated under bona fide claim of acquisition or ownership
have ipso jure been converted into private property and grant the possessors the opportunity to
establish and record such fact. Thus, the deadline for the filing of such application which would have
originally expired first on December 31, 1938 was successively extended to December 31, 1941,
then extended to December 31, 1957, then to December 31, 1968, further extended to December
31, 1976 and lastly extended to December 31, 1987. 7
The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in
effect a technicality of procedure and not of substance. My submittal in Meralco, mutatis mutandis, is
properly applicable: "The ends of justice would best be served, therefore, by considering the
applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the
original persons who as natural persons are duly qualified to apply for formal confirmation of the title
that they had acquired by conclusive presumption and mandate of the Public Land Act and who
thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to
hold and own private lands) and granting the applications for confirmation of title to the private lands
so acquired and sold or exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise
dissented along the same line from the majority ruling therein and held: "I dissent insofar as the opinion of
the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical person
rather than the natural persons-transferors, under the particular circumstances of this case, as an
insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be
distinguished, the approach followed by us in Francisco v. City of Davao,where the legal question raised,
instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the
exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the
application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such
disability." 9 Justice Vicente Abad Santos, now retired, while concurring in the procedural result, likewise,
in effect dissented from the therein majority ruling on the question of substance, and stated his opinion
that "the lots which are sought to be registered have ceased to be lands of the public domain at the time
they were acquired by the petitioner corporation. They are already private lands because of acquisitive
prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title.
Accordingly, the constitutional provision that no private corporation or association may hold alienable
lands of the public domain is inapplicable. " 10
To my mind, the reason why the Act limits the filing of such applications to natural citizens who may
prove their undisputed and open possession of public lands for the required statutory thirty-year
period, tacking on their predecessors'-in-interest possession is that only natural persons, to the
exclusion of juridical persons such as corporations, can actually, physically and in reality possess
public lands for the required statutory 30-year period. That juridical persons or corporations cannot
do so is obvious. But when the natural persons have fulfilled the required statutory period of
possession, the Act confers on them a legally sufficient and transferable title. It is preferable to follow
the letter of the law that they file the applications for confirmation of their title, although they have
lawfully transferred their title to the land. But such procedural failure cannot and should not defeat
the substance of the law, as stressed in the above-cited opinions, that the lands are
already private lands because ofacquisitive prescription by the corporation's predecessors and the

realistic solution would be to consider the application for confirmation as filed by the natural personstransferors, and in accordance with the evidence, confirm their title to the private lands so converted
by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes
the validity of the transfer and sale of the private land to the corporation. It should not be necessary
to go in a round-about way and have the corporation reassign its rights to the private land to natural
persons-(as I understand), was done after the decision in the Meralco and Iglesia ni Cristo cases)
just for the purpose of complying on paper with the technicality of having natural persons file the
application for confirmation of title to the private land.

MELENCIO-HERRERA, J., dissenting:

Section 48 of the Public Land Act, in part, provides:
SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:
(a) ...
(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
are the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) ...
Article XIV, Section 11, of the 1973 Constitution, in part, provides:
SEC. 11. .... No private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area; nor may any citizen
hold such lands by lease in excess of five hundred hectares ....
It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation
from directly applying to the Courts for the issuance of Original Certificates of Title to lands of the
public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799; Republic vs.
Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon.
Judge, CFI of Nueva Ecija, Br. 1). It is my opinion that the literalism should be adhered to in this
case.

The reasoning of the majority can be restated in simple terms as follows:

(a) The INFIELS can successfully file an application for a certificate of title over the land involved in
the case.
(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.
(c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the
Courts for the Certificate of Title, thus avoiding the circuituous "literal" requirement that the INFIELS
should first apply to the courts for the titles, and afterwards transfer the title to ACME.
The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric
Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]).
To uphold respondent judge's denial of Meralco's application on the technicality that the
Public Land Act allows only citizens of the Philippines who are natural persons to apply for
confirmation of their title would be impractical and would just give rise to multiplicity of court
actions. Assuming that there was a technical error in not having filed the application for
registration in the name of the Piguing spouses as the original owners and vendors,
still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco
and neither is there any prohibition against the application being refiled with retroactive effect
in the name of the original owners and vendors (as such natural persons) with the end result
of their application being granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in their favor.
It should not be necessary to go through all the rituals at the great cost of refiling of all such
applications in their names and adding to the overcrowded court dockets when the Court can after
all these years dispose of it here and now." (Paragraphing supplied)
The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural
persons) can apply for certificates of title under Section 48(b) of the Public Land Act, as well as the
constitutional provision (Article XIV, Section 11) which prohibits corporations from acquiring title to
lands of the public domain. That interpretation or construction adopted by the majority cannot be
justified. "A construction adopted should not be such as to nullify, destroy or defeat the intention of
the legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct
2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd., p.
351).
It has also been said that:
In the construction of statutes, the courts start with the assumption that the legislature
intended to enact an effective law, and the legislature is not to be presumed to have done a
vain thing in the enactment of a statute. Hence, it is a general principle that the courts

should, if reasonably possible to do so interpret the statute, or the provision being construed,
so as to give it efficient operation and effect as a whole. An interpretation should, if possible,
be avoided, under which the statute or provision being construed is defeated, or as
otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly susceptible
of two constructions, one of which will give effect to the act, while the other will defeat it, the
former construction is preferred. One part of a statute may not be construed so as to render
another part nugatory or of no effect. Moreover, notwithstanding the general rule against the
enlargement of extension of a statute by construction, the meaning of a statute may be
extended beyond the precise words used in the law, and words or phrases may be altered or
supplied, where this is necessary to prevent a law from becoming a nullity. Wherever the
provision of a statute is general everything which is necessary to make such provision
effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143
NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)
The statutory provision and the constitutional prohibition express a public policy. The proper course
for the Court to take is to promote in the fullest manner the policy thus laid down and to avoid a
construction which would alter or defeat that policy.
In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114
SCRA 799 [1982] and related cases.

Separate Opinions
GUTIERREZ, JR., J., concurring:
I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:

I am honored by my brethren's judgment at bar that my dissenting opinion in the June,
1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is the better. . . .
and indeed the correct view." My dissent was anchored on the landmark 1909 case of Carino 2 through
the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is
established doctrine....... that an open, continuous, adverse and public possession of a land of the public
domain for the period provided in the Public Land Act provision in force at the time (from July 26, 1894
in Susi under the old law [this period was reduced to 'at least thirty years immediately preceding the filing
of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to the
period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors
confers an effective title on said possessor, whereby the land ceases to be land of the public domain and
becomes private property." I hereby reproduce the same by reference for brevity's sake. But since we are

reverting to the old above-cited established doctrine and precedents and discarding
the Meralco and Iglesia ni Cristo cases which departed therefrom in the recent past, I feel constrained to
write this concurrence in amplification of my views and ratio decidendi.

Under the express text and mandate of the cited Act, such possessors "shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this chapter. "
The Court thus held in Susi that under the presumption juris et de jure established in the Act, the
rightful possessor of the public land for the statutory period "already acquired, by operation of law,
not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of title
should be issued an order that said grant may be sanctioned by the courts, an application therefore
is sufficient . . . . If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the
State, it had already ceased to be of the public domainand had become private property, at least by
presumption, of Valentin Susi, beyond the control of the Director of Lands [and beyond his authority
to sell to any other person]. " 6
The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the
U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who would have been deprived of
ancestral family lands by the dismissal of his application for registration) which reversed the
dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view
that under the decree and regulations of June 25, 1880, "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, whenever
made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by
earlier law."
The Court's decision at bar now expressly overturns the Meralco and related cases subsequent
thereto which failed to adhere to the aforecited established doctrine dating back to 1909 and was
consistently applied up to June 29, 1982 (when the Meralco decision was promulgated). We
reaffirm the established doctrine that such acquisitive prescription of alienable public lands takes
place ipso jure or by operation of law without the necessity of a prior issuance of a certificate of title.
The land ipso jure ceases to be of the public domain and becomes private property, which may be
lawfully sold to and acquired by qualified corporations such as respondent corporation. (As stressed
in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect
the legal sufficiency of the title.")
<re||an1w>

Such ipso jure conversion into private property of public lands publicly held under a bona fide claim
of acquisition or ownership is the public policy of the Act and is so expressly stated therein. By virtue
of such conversion into private property, qualified corporations may lawfully acquire them and there
is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or
acquiring title to lands of the public domain, as claimed in the dissenting opinion, for the simple
reason that no public lands are involved.

It should be noted that respondent corporation purchased the land from the Infiels on October 16,
1962 under the aegis of the 1935 Constitution which contained no prohibition against corporations
holding public lands (except a limit of 1,024 hectares) unlike the later 1973 Constitution which
imposed an absolute prohibition. Even on the erroneous assumption that the land remained public
land despite the Infiels' open possession thereof as owners from time immemorial, respondent
corporation's lawful purchase from them of the land in 1962 and P 45million investments redounding
presumably to the welfare and progress of the community, particularly the municipality of
Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which
could not be impaired by the prohibition adopted eleven years later. But as sufficiently stressed, the
land of the Infiels had been ipso jure converted into private land and they had a legally sufficient and
transferable title conferred by the conclusive presumption of the Public Land Act (which needed only
to be established in confirmation of title proceedings for formalization and issuance of the certificate
of title) which they lawfully and validly transferred to respondent corporation.
In fact, the many amendments to the Act extending the period for the filing of such applications for
judicial confirmation of imperfect and incomplete titles to alienable and disposable public lands
expressly reiterate that it has always been the "policy of the State to hasten the settlement,
adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands
publicly and notoriously occupied and cultivated under bona fide claim of acquisition or ownership
have ipso jure been converted into private property and grant the possessors the opportunity to
establish and record such fact. Thus, the deadline for the filing of such application which would have
originally expired first on December 31, 1938 was successively extended to December 31, 1941,
then extended to December 31, 1957, then to December 31, 1968, further extended to December
31, 1976 and lastly extended to December 31, 1987. 7
The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in
effect a technicality of procedure and not of substance. My submittal in Meralco, mutatis mutandis, is
properly applicable: "The ends of justice would best be served, therefore, by considering the
applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the
original persons who as natural persons are duly qualified to apply for formal confirmation of the title
that they had acquired by conclusive presumption and mandate of the Public Land Act and who
thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to
hold and own private lands) and granting the applications for confirmation of title to the private lands
so acquired and sold or exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise
dissented along the same line from the majority ruling therein and held: "I dissent insofar as the opinion of
the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical person
rather than the natural persons-transferors, under the particular circumstances of this case, as an
insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be
distinguished, the approach followed by us in Francisco v. City of Davao,where the legal question raised,
instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the
exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the
application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such
disability." 9 Justice Vicente Abad Santos, now retired, while concurring in the procedural result, likewise,
in effect dissented from the therein majority ruling on the question of substance, and stated his opinion
that "the lots which are sought to be registered have ceased to be lands of the public domain at the time
they were acquired by the petitioner corporation. They are already private lands because of acquisitive
prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title.

Accordingly, the constitutional provision that no private corporation or association may hold alienable
lands of the public domain is inapplicable. " 10

To my mind, the reason why the Act limits the filing of such applications to natural citizens who may
prove their undisputed and open possession of public lands for the required statutory thirty-year
period, tacking on their predecessors'-in-interest possession is that only natural persons, to the
exclusion of juridical persons such as corporations, can actually, physically and in reality possess
public lands for the required statutory 30-year period. That juridical persons or corporations cannot
do so is obvious. But when the natural persons have fulfilled the required statutory period of
possession, the Act confers on them a legally sufficient and transferable title. It is preferable to follow
the letter of the law that they file the applications for confirmation of their title, although they have
lawfully transferred their title to the land. But such procedural failure cannot and should not defeat
the substance of the law, as stressed in the above-cited opinions, that the lands are
already private lands because ofacquisitive prescription by the corporation's predecessors and the
realistic solution would be to consider the application for confirmation as filed by the natural personstransferors, and in accordance with the evidence, confirm their title to the private lands so converted
by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes
the validity of the transfer and sale of the private land to the corporation. It should not be necessary
to go in a round-about way and have the corporation reassign its rights to the private land to natural
persons-(as I understand), was done after the decision in the Meralco and Iglesia ni Cristo cases)
just for the purpose of complying on paper with the technicality of having natural persons file the
application for confirmation of title to the private land.

MELENCIO-HERRERA, J., dissenting:

Section 48 of the Public Land Act, in part, provides:
SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:
(a) ...
(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
are the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
(c) ...

Article XIV, Section 11, of the 1973 Constitution, in part, provides:

SEC. 11. .... No private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area; nor may any citizen
hold such lands by lease in excess of five hundred hectares ....
It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation
from directly applying to the Courts for the issuance of Original Certificates of Title to lands of the
public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799; Republic vs.
Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon.
Judge, CFI of Nueva Ecija, Br. 1). It is my opinion that the literalism should be adhered to in this
case.
The reasoning of the majority can be restated in simple terms as follows:
(a) The INFIELS can successfully file an application for a certificate of title over the land involved in
the case.
(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.
(c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the
Courts for the Certificate of Title, thus avoiding the circuituous "literal" requirement that the INFIELS
should first apply to the courts for the titles, and afterwards transfer the title to ACME.
The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric
Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]).
To uphold respondent judge's denial of Meralco's application on the technicality that the
Public Land Act allows only citizens of the Philippines who are natural persons to apply for
confirmation of their title would be impractical and would just give rise to multiplicity of court
actions. Assuming that there was a technical error in not having filed the application for
registration in the name of the Piguing spouses as the original owners and vendors,
still it is conceded that there is no prohibition against their sale of the land to the applicant
Meralco
and neither is there any prohibition against the application being refiled with retroactive effect
in the name of the original owners and vendors (as such natural persons) with the end result
of their application being granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in their favor.
It should not be necessary to go through all the rituals at the great cost of refiling of all such
applications in their names and adding to the overcrowded court dockets when the Court can after
all these years dispose of it here and now." (Emphasis supplied)

The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural
persons) can apply for certificates of title under Section 48(b) of the Public Land Act, as well as the
constitutional provision (Article XIV, Section 11) which prohibits corporations from acquiring title to
lands of the public domain. That interpretation or construction adopted by the majority cannot be
justified. "A construction adopted should not be such as to nullify, destroy or defeat the intention of
the legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct
2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd., p.
351).
It has also been said that:
In the construction of statutes, the courts start with the assumption that the legislature
intended to enact an effective law, and the legislature is not to be presumed to have done a
vain thing in the enactment of a statute. Hence, it is a general principle that the courts
should, if reasonably possible to do so interpret the statute, or the provision being construed,
so as to give it efficient operation and effect as a whole. An interpretation should, if possible,
be avoided, under which the statute or provision being construed is defeated, or as
otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly susceptible
of two constructions, one of which will give effect to the act, while the other will defeat it, the
former construction is preferred. One part of a statute may not be construed so as to render
another part nugatory or of no effect. Moreover, notwithstanding the general rule against the
enlargement of extension of a statute by construction, the meaning of a statute may be
extended beyond the precise words used in the law, and words or phrases may be altered or
supplied, where this is necessary to prevent a law from becoming a nullity. Wherever the
provision of a statute is general everything which is necessary to make such provision
effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143
NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)
The statutory provision and the constitutional prohibition express a public policy. The proper course
for the Court to take is to promote in the fullest manner the policy thus laid down and to avoid a
construction which would alter or defeat that policy.
In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114
SCRA 799 [1982] and related cases.
G.R. No. L-34602 May 31, 1979
THE DIRECTOR OF LANDS and DIRECTOR OF FORESTRY, petitioners,
vs.
LILIA A. ABAIRO, CELSO ABAIRO and THE COURT OF FIRST INSTANCE OF
ISABELA, respondents.
Office of the Solicitor General for petitioner.
Eligio A. Labog for private respondents.

MAKASIAR, J.:
This is a petition for review on certiorari of the decision dated September 27, 1971 (pp. 17-18, rec.),
of respondent Court of First Instance of Isabela confirming the ownership by Lilia A. Abairo and
Celso Abairo, of a parcel of land.
The facts of this case are undisputed. On March 1, 1971, respondent Lilia Abairo filed an application
for registration under the Land Registration Act of a parcel of land containing an area of about 573
square meters situated in Centro, Cauayan, Isabela, alleging open, public, peaceful and
uninterrupted possession thereof in the concept of owner by herself and through her predecessorsin- interest since time immemorial up to the present (p. 12, rec.).
Respondent Lilia Abairo and her counsel appeared at the initial hearing but nobody appeared to
oppose the petition for registration of her title, except the assistant provincial fiscal who entered his
opposition in behalf of the Bureau of Lands and the Bureau of Forestry, but who subsequently
withdrew his opposition on the ground that there was a new law extending the period for filing
registration petitions up to 1976. The fiscal submitted a report of the Director of Lands to the effect
that he is withdrawing his opposition. The fiscal likewise submitted a letter from the Bureau of
Forestry showing that it has no opposition to the application for registration of title. These facts are
embodied in the Order of Judge Andres Plan, to wit:
When this case was called for initial hearing, the applicant, assisted by counsel,
appeared. The Fiscal manifested in open Court that due to the amended bill which
extends the period of filing registration petitions up to 1976, the serious opposition
filed has become moot and academic. The Fiscal also submitted a report of the
Director of Lands to the effect that the Bureau of Lands is withdrawing its opposition.
The Fiscal also submitted a letter from the Bureau of Forestry showing that they have
no opposition to the application for registration of title,
With these manifestations of the fiscal, the Bureau of Lands and the Bureau of
Forestry, the lot has become non-contested.
Upon motion of counsel for the applicant, let an order of general default issue against
the whole world. Upon his petition, the Clerk of Court, Atty. Raymundo B. Neris Jr., is
hereby appointed Commissioner to receive the evidence in support of the petition for
registration. (p. 16, rec.).
After the case was heard, respondent Court rendered a decision dated September 27, 1971,
confirming the ownership of respondent Abairo over the land in question after finding that the original
owner of the land in dispute was a certain Pablo Rivera, who possessed the land which formed part
of his estate since 1912 or even much prior thereto; that he sold said land to Inocencia Accad
sometime in 1939 and the latter had been in possession of said land up to the time when she sold it
to her daughter, Lilia A. Abairo, on December 31, 1969; that respondent has a residential house on
the land and that she has declared the lot for taxation purposes in her name and has been

religiously paying taxes thereon; that respondent Abairo and her predecessors-in-interest have been
in open, public, peaceful and uninterrupted possession of the land in the concept of owners since
1912 up to the present; that the land is free from all liens and encumbrances; and that the land is the
conjugal property of spouses Lilia and Celso Abairo (pp. 17-18, rec.).
A motion for reconsideration dated November 18, 1971 (p. 19, rec.) was filed by the Solicitor General
on the ground that respondent Court did not have jurisdiction to entertain the application for
registration of title as it was filed on March 1, 1971, after December 31, 1968, the date set by R.A.
No. 2061 as the time limit for the judicial confirmation of imperfect and incomplete titles like that of
applicant, and before the effectivity on June 19, 1971, of R.A. No. 6236 extending the time limit for
such purpose.
Respondent Court denied the aforesaid motion for reconsideration in an order dated December 15,
1971 (p. 28, rec.). Hence, this petition.
It is the contention of petitioners that respondent Court should have dismissed the application of
respondent Lilia Abairo because it has no jurisdiction over it inasmuch as it was filed on March 1,
197 1, that is, after December 31, 1968, the expiry date for filing such kind of applications based on
imperfect or incomplete titles under RA No. 2061.
Petitioner's contention is without merit.
R.A. No. 6236, enacted on June 19, 1971, further amended Section 47 of C.A. No. 141 (which was
previously amended by R.A. No. 2061) by extending to December 31, 1976 the time limit for the
filing of applications for the judical confirmation of imperfect or incomplete titles.
As amended by R.A. No. 2061, Section 47 of C.A. No. 141 reads:
Sec. 47. The persons specified in the next following section are hereby granted
time, not to extend beyond December thirty-one, nineteen hundred and sixtyeight within which to take advantage of the benefit of this chapter: Provided, That the
several periods of time designated by the President in accordance with section fortyfive of this Act shall apply also to the lands comprised in the provisions of this
chapter, but this section shall not be construed as prohibiting any of said persons
from acting under this chapter at any time prior to the period fixed by the
President (emphasis supplied).
As amended by R.A. No. 6236, the aforesaid Section 47 states:
Sec. 47. The persons specified in the next following section are hereby granted
time, not to extend beyond December thirty-one, nineteen hundred and seventy-six,
within which to take advantage of the benefit of this chapter: Provided, That this
extension shall apply only where the area applied for does not exceed 144 hectares:
Provided further, That the several periods of time designated by the President in
accordance with section forty-five of this Act shall apply also to the lands comprised
in the provisions of this chapter, but this section shall not be construed as prohibiting

any of said persons from acting under this chapter at any time prior to the period
fixed by the President(emphasis supplied).
As amended by Presidential Decree No. 1073, promulgated on January 25, 1977, the filing of such
application has been extended to December 31, 1987.
It is clear from the law itself that those who applied for judicial confirmation of their titles at any time
prior to the cutoff date of December 31, 1976 (as provided for in R.A. No. 6236) did so on time, even
if such application were filed during the intervening period from January 1, 1969 to June 18, 1971,
like the application of respondent Abairo, who instituted the same on March 1, 197 1.
All the amendments to Section 47 of C.A. 141 expressly includes the proviso that "this section shall
not be construed as prohibiting any of said persons from acting under this chapter at any time prior
to the period fixed by the President." No period has been fixed by the President despite the authority
granted him by the aforesaid proviso.
But even in the absence of the aforesaid proviso of Section 47, as amended, the basis of the petition
is too technical to merit serious consideration. The extension until December 31, 1976 by R.A. No.
6236 for the filing of such application, retroacted to, and covered the applications filed after January
1, 1969 and before June 19, 1971. Moreover, the application which private respondent filed on
March 1, 1971, could be considered as re-filed after the effectivity of R.A. No. 6236 on June 19,
1971, less than four months thereafter.
Respect should be given to the obvious intention of the lawmaker in extending the period for filing
such applications time and time again, to give full opportunity to those who are qualified under the
law to own disposable lands of the public domain and thus reduce the number of landless among the
citizenry.
Considering the area of the lot applied for only about 573 square meters it was quite unfair, if
not oppressive, to put the private respondent to such expense and anxiety, after the Director of
Lands withdrew his opposition, while the Director of Forestry interposed no opposition to private
respondent's application.
WHEREFORE, THE DECISION OF THE LOWER COURT IS HEREBY AFFIRMED AND THE
PETITION IS HEREBY DISMISSED. NO COSTS.
G.R. No. L-48321

August 31, 1946

OH CHO, applicant-appellee,
vs.
THE DIRECTOR OF LANDS, oppositor-appellant.
Office of the Solicitor General Roman Ozaeta and Assistant Solicitor General Rafael Amparo for
appellant.
Vicente Constantino for appellee.
Ferrier, Gomez and Sotelo and J. T. Chuidian as amici curiae.

PADILLA, J.:
This is an appeal from a judgment decreeing the registration of a residential lot located in the
municipality of Guinayangan, Province of Tayabas in the name of the applicant.
The opposition of the Director of Lands is based on the applicant's lack of title to the lot, and on his
disqualification, as alien, from acquiring lands of the public domain.
The applicant, who is an alien, and his predecessors in interest have been in open, continuous,
exclusive and notorious possession of the lot from 1880 to filing of the application for registration on
January 17, 1940.
The Solicitor General reiterates the second objection of the opponent and adds that the lower court,
committed an error in not declaring null and void the sale of the lot to the applicant.
The applicant invokes the Land Registration Act (Act No. 496), or should it not be applicable to the
case, then he would apply for the benefits of the Public Land Act (C.A. No. 141).
The applicant failed to show that he has title to the lot that may be confirmed under the Land
Registration Act. He failed to show that he or any of his predecessors in interest had acquired the lot
from the Government, either by purchase or by grant, under the laws, orders and decrease
promulgated by the Spanish Government in the Philippines, or by possessory information under the
Mortgaged Law (section 19, Act 496). All lands that were not acquired from the Government, either
by purchase or by grant below to the public domain. An exception to the rule would be any land that
should have been in the possession of an occupant and of his predecessors in interest since time
immemorial, for such possession would justify the presumption that the land had never been part of
the public domain or that it had been a private property even before the Spanish conquest.
(Cario vs.Insular Government, 212 U.S., 449; 53 Law. Ed., 594.) The applicant does not come
under the exception, for the earliest possession of the lot by his first predecessors in interest begun
in 1880.
As the applicant failed to show title to the lot, the next question is whether he is entitled to decree or
registration of the lot, because he is alien disqualified from acquiring lands of the public domain
(sections 48, 49, C.A. No. 141).
As the applicant failed to show the title to the lot, and has invoked the provisions of the Public Land
Act, it seems unnecessary to make pronouncement in this case on the nature or classifications of
the sought to be registered.
It may be argued that under the provisions of the Public Land Act the applicant immediate
predecessor in interest would have been entitled to a decree of registration of the lot had they
applied for its registration; and that he having purchased or acquired it, the right of his immediate
predecessor in interest to a decree of registration must be deemed also to have been acquired by
him. The benefits provided in the Public Land Act for applicant's immediate predecessors in interest
should comply with the condition precedent for the grant of such benefits. The condition precedent is
to apply for the registration of the land of which they had been in possession at least since July 26,
1894. This the applicant's immediate predecessors in interest failed to do. They did not have any
vested right in the lot amounting to the title which was transmissible to the applicant. The only right, if
it may thus be called, is their possession of the lot which, tacked to that of their predecessors in
interest, may be availed of by a qualified person to apply for its registration but not by a person as
the applicant who is disqualified.

It is urged that the sale of the lot to the applicant should have been declared null and void. In a suit
between vendor and vendee for the annulment of the sale, such pronouncement would be
necessary, if the court were of the opinion that it is void. It is not necessary in this case where the
vendors do not even object to the application filed by the vendee.
Accordingly, judgment is reversed and the application for registration dismissed, without costs.
Moran, C.J., Feria, Pablo, Hilado and Bengzon, JJ., concur.
G.R. No. 108998 August 24, 1994
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE COURT OF APPEALS AND SPOUSES MARIO B. LAPIA AND FLOR DE
VEGA, respondents.
Byron V. Belarmino and Juan B. Belarmino for private respondents.

BIDIN, J.:
Can a foreign national apply for registration of title over a parcel of land which he acquired by
purchase while still a citizen of the Philippines, from a vendor who has complied with the
requirements for registration under the Public Land Act (CA 141)?
The Republic would have us rule on the negative and asks this Court to nullify the decision of the
appellate court which affirmed the judgment of the court a quo in granting the application of
respondent spouses for registration over the lots in question.
On June 17, 1978, respondent spouses bought Lots 347 and 348, Cad. s38-D, as their residence
with a total area of 91.77 sq. m. situated in San Pablo City, from one Cristeta Dazo Belen (Rollo, p.
41). At the time of the purchase, respondent spouses where then natural-born Filipino citizens.
On February 5, 1987, the spouses filed an application for registration of title of the two (2) parcels of
land before the Regional Trial Court of San Pablo City, Branch XXXI. This time, however, they were
no longer Filipino citizens and have opted to embrace Canadian citizenship through naturalization.
An opposition was filed by the Republic and after the parties have presented their respective
evidence, the court a quo rendered a decision confirming private respondents' title to the lots in
question, the dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby approves the said
application and confirms the title and possession of herein applicants over Lots 347
and 348, Ap-04-003755 in the names of spouses Mario B. Lapia and Flor de Vega,
all of legal age, Filipino citizens by birth but now Canadian citizens by naturalization

and residing at 14 A. Mabini Street, San Pablo City and/or 201-1170-124 Street,
Edmonton, Alberta T5M-OK9, Canada.
Once this Decision becomes final, let the corresponding decree of registration be
issued. In the certificate of title to be issued, there shall be annotated an easement of
.265 meters road right-of-way.
SO ORDERED. (Rollo, p. 25)
On appeal, respondent court affirmed the decision of the trial court based on the following
ratiocination:
In the present case, it is undisputed that both applicants were still Filipino citizens
when they bought the land in controversy from its former owner. For this reason, the
prohibition against the acquisition of private lands by aliens could not apply. In justice
and equity, they are the rightful owners of the subject realty considering also that
they had paid for it quite a large sum of money. Their purpose in initiating the instant
action is merely to confirm their title over the land, for, as has been passed upon,
they had been the owners of the same since 1978. It ought to be pointed out that
registration is not a mode of acquiring ownership. The Torrens System was not
established as a means for the acquisition of title to private land. It is intended merely
to confirm and register the title which one may already have (Municipality of Victorias
vs. Court of Appeals, G.R. No. L-31189, March 31, 1987). With particular reference to
the main issue at bar, the High Court has ruled that title and ownership over lands
within the meaning and for the purposes of the constitutional prohibition dates back
to the time of their purchase, not later. The fact that the applicants-appellees are not
Filipino citizens now cannot be taken against them for they were not disqualified from
acquiring the land in question (Bollozos vs. Yu Tieng Su, G.R. No. L-29442,
November 11, 1987). (Rollo, pp. 27-28)
Expectedly, respondent court's disposition did not merit petitioner's approval, hence this present
recourse, which was belatedly filed.
Ordinarily, this petition would have been denied outright for having been filed out of time had it not
been for the constitutional issue presented therein.
At the outset, petitioner submits that private respondents have not acquired proprietary rights over
the subject properties before they acquired Canadian citizenship through naturalization to justify the
registration thereof in their favor. It maintains that even privately owned unregistered lands are
presumed to be public lands under the principle that lands of whatever classification belong to the
State under the Regalian doctrine. Thus, before the issuance of the certificate of title, the occupant is
not in the jurisdical sense the true owner of the land since it still pertains to the State. Petitioner
further argued that it is only when the court adjudicates the land to the applicant for confirmation of
title would the land become privately owned land, for in the same proceeding, the court may declare
it public land, depending on the evidence.

As found by the trial court:

The evidence thus presented established that applicants, by themselves and their
predecessors-in-interest, had been in open, public, peaceful, continuous, exclusive
and notorious possession and occupation of the two adjacent parcels of land applied
for registration of title under a bona-fide claim of ownership long before June 12,
1945. Such being the case, it is conclusively presumed that all the conditions
essential to the confirmation of their title over the two adjacent parcels of land are
sought to be registered have been complied with thereby entitling them to the
issuance of the corresponding certificate of title pursuant to the provisions of
Presidential Decree No. 1529, otherwise known as the Property Registration Decree.
(Rollo, p. 26)
Respondent court echoed the court a quo's observation, thus:
The land sought to be registered has been declared to be within the alienable and
disposable zone established by the Bureau of Forest Development (Exhibit "P"). The
investigation conducted by the Bureau of Lands, Natural Resources District (IV-2)
reveals that the disputed realty had been occupied by the applicants "whose house
of strong materials stands thereon"; that it had been declared for taxation purposes
in the name of applicants-spouses since 1979; that they acquired the same by
means of a public instrument entitled "Kasulatan ng Bilihang Tuluyan" duly executed
by the vendor, Cristeta Dazo Belen, on June 17, 1978 (Exhibits "I" and "J"); and that
applicants and their predecessors in interest had been in possession of the land for
more than 30 years prior to the filing of the application for registration. But what is of
great significance in the instant case is the circumstance that at the time the
applicants purchased the subject lot in 1978, both of them were Filipino citizens such
that when they filed their application for registration in 1987, ownership over the land
in dispute had already passed to them. (Rollo, p., 27)
The Republic disagrees with the appellate court's concept of possession and argues:
17. The Court of Appeals found that the land was declared for taxation purposes in
the name of respondent spouses only since 1979. However, tax declarations or
reality tax payments of property are not conclusive evidence of ownership. (citing
cases)
18. Then again, the appellate court found that "applicants (respondents) and their
predecessors-in-interest had been in possession of the land for more than 30 years
prior to the filing of the application for registration." This is not, however, the same as
saying that respondents have been in possession "since June 12, 1945." (PD No.
1073, amending Sec. 48 [b], CA NO. 141; sec. also Sec. 14, PD No. 1529). So there
is a void in respondents' possession. They fall short of the required possession since
June 12, 1945 or prior thereto. And, even if they needed only to prove thirty (30)
years possession prior to the filing of their application (on February 5, 1987), they
would still be short of the required possession if the starting point is 1979 when,

according to the Court of Appeals, the land was declared for taxation purposes in
their name. (Rollo, pp. 14-15)
The argument is myopic, to say the least. Following the logic of petitioner, any transferee is thus
foreclosed to apply for registration of title over a parcel of land notwithstanding the fact that the
transferor, or his predecessor-in-interest has been in open, notorious and exclusive possession
thereof for thirty (30) years or more. This is not, however, what the law provides.
As petitioner itself argues, Section 48 of the Public Land Act (CA 141) reads:
Sec. 48. The following-described citizens of the Philippines, occupying lands of the
public domain or claiming interest therein, but whose titles have not been perfected
or completed, may apply to the Court of First Instance (now Regional Trial Court) of
the province where the land is located for confirmation of their claims and the
issuance of a certificate of title therefor under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors-in-interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition or ownership, for at
least thirty years immediately preceding the filing of the application for confirmation of
title except when prevented by wars or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this chapter. (Emphasis
supplied)
As amended by PD 1073:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public
Land Act are hereby amended in the sense that these provisions shall apply only to
alienable and disposable lands of the public domain which have been in open,
continuous, exclusive and notorious possession and occupation by the applicant
himself or thru his predecessor-in-interest, under a bona fide claim of acquisition or
ownership, since June 12, 1945.
It must be noted that with respect to possession and occupation of the alienable and disposable
lands of the public domain, the law employs the terms "by themselves", "the applicant himself or
through his predecessor-in-interest". Thus, it matters not whether the vendee/applicant has been in
possession of the subject property for only a day so long as the period and/or legal requirements for
confirmation of title has been complied with by his predecessor-in-interest, the said period is tacked
to his possession. In the case at bar, respondents' predecessors-in-interest have been in open,
continuous, exclusive and notorious possession of the disputed land not only since June 12, 1945,
but even as early as 1937. Petitioner does not deny this except that respondent spouses, in its
perception, were in possession of the land sought to be registered only in 1978 and therefore short
of the required length of time. As aforesaid, the disputed parcels of land were acquired by private

respondents through their predecessors-in-interest, who, in turn, have been in open and continued
possession thereof since 1937. Private respondents stepped into the shoes of their predecessors-ininterest and by virtue thereof, acquired all the legal rights necessary to confirm what could otherwise
be deemed as an imperfect title.
At this juncture, petitioner's reliance in Republic v. Villanueva (114 SCRA 875 [1982]) deserves scant
consideration. There, it was held that before the issuance of the certificate of title, the occupant is not
in the juridical sense the true owner of the land since it still pertains to the State.
Suffice it to state that the ruling in Republic v. Villanueva (supra), has already been abandoned in the
1986 case of Director of Lands v. Intermediate Appellate Court (146 SCRA 509; and reiterated in
Director of Lands v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court, through then Associate
Justice, now Chief Justice Narvasa, declared that:
(The weight of authority is) that open, exclusive and undisputed possession of
alienable public land for the period prescribed by law creates the legal fiction
whereby the land, upon completion of the requisite period ipso jure and without the
need of judicial or other sanction, ceases to be public land and becomes private
property. . . .
Herico in particular, appears to be squarely affirmative:
. . . Secondly, under the provisions of Republic Act
No. 1942, which the respondent Court held to be inapplicable to the
petitioner's case, with the latter's proven occupation and cultivation
for more than 30 years since 1914, by himself and by his
predecessors-in-interest, title over the land has vested on petitioner
so as to segregate the land from the mass of public land. Thereafter,
it is no longer disposable under the Public Land Act as by free
patent . . .
xxx xxx xxx
As interpreted in several cases, when the conditions as specified in
the foregoing provision are complied with, the possessor is deemed
to have acquired, by operation of law, a right to a grant, a
government grant, without the necessity of a certificate of title being
issued. The land, therefore, ceases to be of the public domain and
beyond the authority of the Director of Lands to dispose of. The
application for confirmation is mere formality, the lack of which does
not affect the legal sufficiency of the title as would be evidenced by
the patent and the Torrens title to be issued upon the strength of said
patent.
Nothing can more clearly demonstrate the logical inevitability of considering
possession of public land which is of the character and duration prescribed by the

statute as the equivalent of an express grant from the State than the dictum of the
statute itself (Section 48 [b]) that the possessor(s) ". . . shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title ..." No proof being admissible to overcome a
conclusive presumption, confirmation proceedings would, in truth be little more than
a formality, at the most limited to ascertaining whether the possession claims is of
the required character and length of time; and registration thereunder would not
confer title, but simply recognize a title already vested. The proceedings would not
originally convert the land from public to private land, but only confirm such a
conversion already affected by operation of law from the moment the required period
of possession became complete. As was so well put in Cario, ". . .(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. (Emphasis supplied)
Subsequent cases have hewed to the above pronouncement such that open, continuous and
exclusive possession for at least 30 years of alienable public land ipso jure converts the same to
private property (Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183 SCRA 602
[1990]). This means that occupation and cultivation for more than 30 years by an applicant and his
predecessors-in-interest, vest title on such applicant so as to segregate the land from the mass of
public and (National Power Corporation v. CA, 218 SCRA 41 [1993]).
The Public Land Act requires that the applicant must prove that (a) the land is alienable public land
and (b) his possession, in the concept above stated, must be either since time immemorial or for the
period prescribed in the Public Land Act (Director of Lands v. Buyco, 216 SCRA 78 [1992]). When
the conditions set by law are complied with, the possessor of the land, by operation of law, acquires
a right to a grant, a government grant, without the necessity of a certificate of title being issued
(National Power Corporation v. CA, supra). As such, the land ceases to be a part of the public
domain and goes beyond the authority of the Director of Lands to dispose of.
In other words, the Torrens system was not established as a means for the acquisition of title to
private land (Municipality of Victorias v. CA, 149 SCRA 32 [1987]). It merely confirms, but does not
confer ownership. As could be gleaned from the evidence adduced, private respondents were able
to establish the nature of possession of their predecessors-in-interest. Evidence was offered to
prove that their predecessors-in-interest had paid taxes on the subject land and introduced
improvements thereon (Exhibits "F" to "F9"). A certified true copy of the affidavit executed by Cristeta
Dazo and her sister Simplicia was also formally offered to prove that the subject parcels of land were
inherited by vendor Cristeta Dazo from her father Pedro Dazo with the conformity of her only sister
Simplicia (Exhibit "G"). Likewise, a report from the Bureau of Lands was presented in evidence
together with a letter from the Bureau of Forest Development, to prove that the questioned lots were
part of the alienable and disposable zone of the government and that no forestry interest was
affected (CA GR No. 28953, Records, p. 33).

In the main, petitioner seeks to defeat respondents' application for registration of title on the ground
of foreign nationality. Accordingly, the ruling in Director of Lands v. Buyco (supra) supports
petitioner's thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign nationals but were natural-born Filipino
citizens at the time of their supposed acquisition of the property. But this is where the similarity ends.
The applicants in Buyco sought to register a large tract of land under the provisions of the Land
Registration Act, and in the alternative, under the provisions of the Public Land Act. The land
registration court decided in favor of the applicants and was affirmed by the appellate court on
appeal. The Director of Lands brought the matter before us on review and we reversed.
This Court, speaking through Justice Davide, Jr., stated:
As could be gleaned from the evidence adduced, the private respondents do not rely
on fee simple ownership based on a Spanish grant or possessory information title
under Section 19 of the Land Registration Act; the private respondents did not
present any proof that they or their predecessors-in-interest derived title from an old
Spanish grant such as (a) the "titulo real" or royal grant (b) the "concession especial"
or especial grant; (c) the "composicion con el estado" title or adjustment title; (d) the
"titulo de compra" or title by purchase; and (e) the "informacion posesoria" or
possessory information title, which could become a "titulo gratuito" or a gratuitous
title (Director of Forestry v. Muoz, 23 SCRA 1183 [1968]). The primary basis of their
claim is possession, by themselves and their predecessors-in-interest, since time
immemorial.
If indeed private respondents and their predecessors have been in possession since
time immemorial, the rulings of both courts could be upheld for, as this Court stated
in Oh Cho v. Director of Lands (75 Phil. 890 [1946]):
. . . All lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. An exception to
the rule would be any land that should have been in the possession
of an occupant and of his predecessors in interest since time
immemorial, for such possession would justify the presumption that
the land had never been part of the public domain or that if had been
a private property even before the Spanish conquest (Cario v.
Insular Government, 41 Phil 935 [1909]; 212 U.S. 449; 53 Law. Ed.,
594) The applicant does not come under the exception, for the
earliest possession of the lot by his first predecessor in interest began
in 1880.
. . . alienable public land held by a possessor, personally or through
his predecessors-in-interest, openly, continuously and exclusively for
the prescribed statutory period (30 years under the Public Land Act,

as amended) is converted to private property by the mere lapse or

completion of said period, ipso jure. (Director of Lands v. Intermediate
Appellate Court, supra)
It is obvious from the foregoing rule that the applicant must prove that (a) the land is
alienable public land and (b) his possession, in the concept above stated, must be
either since time immemorial, as ruled in both Cario and Susi, or for the period
prescribed in the Public Land Act. As to the latter, this Court, in Gutierrez Hermanos
v. Court of Appeals (178 SCRA 37 [1989]), adopted the rule enunciated by the Court
of Appeals, per then Associate Justice Hugo R. Gutierrez, Jr., . . ., that an applicant
for registration under Section 48 of the Public Land Act must secure a certification
from the Government that the lands which he claims to have possessed as owner for
more than thirty (30) years are alienable and disposable. It is the burden of the
applicant to prove its positive averments.
In the instant case, private respondents offered no evidence at all to prove that the
property subject of the application is an alienable and disposable land. On the
contrary, the entire property . . . was pasture land (and therefore inalienable under
the then 1973 Constitution).
. . . (P)rivate respondents' evidence miserably failed to establish their imperfect title
to the property in question. Their allegation of possession since time
immemorial, . . ., is patently baseless. . . . When referring to possession, specifically
"immemorial possession," it means possession of which no man living has seen the
beginning, and the existence of which he has learned from his elders (Susi v. Razon,
supra). Such possession was never present in the case of private respondents. . . .
. . ., there does not even exist a reasonable basis for the finding that the private
respondents and their predecessors-in-interest possessed the land for more than
eighty (80) years, . . .
xxx xxx xxx
To this Court's mind, private respondents failed to prove that (their predecessor-ininterest) had possessed the property allegedly covered by Tax Declaration No. 15853
and made the subject of both his last will and testament and the project of partition of
his estate among his heirs in such manner as to remove the same from the public
domain under the Cario and Susi doctrines. Thus, (when the predecessor-ininterest) died on 31 May 1937, he transmitted no right whatsoever, with respect to
the said property, to his heirs. This being the case, his possession cannot be tacked
to that of the private respondents for the latter's benefit pursuant to Section 48(b) of
the Public Land Act, the alternative ground relied upon in their application . . .
xxx xxx xxx

Considering that the private respondents became American citizens before such
filing, it goes without saying that they had acquired no vested right, consisting of an
imperfect title, over the property before they lost their Philippine citizenship.
(Emphasis supplied)
Clearly, the application in Buyco were denied registration of title not merely because they were
American citizens at the time of their application therefor. Respondents therein failed to prove
possession of their predecessor-in-interest since time immemorial or possession in such a manner
that the property has been segregated from public domain; such that at the time of their application,
as American citizens, they have acquired no vested rights over the parcel of land.
In the case at bar, private respondents were undoubtedly natural-born Filipino citizens at the time of
the acquisition of the properties and by virtue thereof, acquired vested rights thereon, tacking in the
process, the possession in the concept of owner and the prescribed period of time held by their
predecessors-in-interest under the Public Land Act. In addition, private respondents have
constructed a house of strong materials on the contested property, now occupied by respondent
Lapias mother.
But what should not be missed in the disposition of this case is the fact that the Constitution itself
allows private respondents to register the contested parcels of land in their favor. Sections 7 and 8 of
Article XII of the Constitution contain the following pertinent provisions, to wit:
Sec. 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.
Sec. 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. (Emphasis supplied)
Section 8, Article XII of the 1987 Constitution above quoted is similar to Section 15, Article XIV of the
then 1973 Constitution which reads:
Sec. 15. Notwithstanding the provisions of Section 14 of this Article, a natural-born
citizen of the Philippines who has lost his citizenship may be a transferee of private
land, for use by him as his residence, as the Batasang Pambansa may provide.
Pursuant thereto, Batas Pambansa Blg. 185 was passed into law, the relevant provision of which
provides:
Sec. 2. Any natural-born citizen of the Philippines who has lost his Philippine
citizenship and who has the legal capacity to enter into a contract under Philippine
laws may be a transferee of a private land up to a maximum area of one thousand
square meters, in the case of urban land, or one hectare in the case of rural land, to
be used by him as his residence. In the case of married couples, one of them may

avail of the privilege herein granted; Provided, That if both shall avail of the same,
the total area acquired shall not exceed the maximum herein fixed.
In case the transferee already owns urban or rural lands for residential purposes, he
shall still be entitled to be a transferee of an additional urban or rural lands for
residential purposes which, when added to those already owned by him, shall not
exceed the maximum areas herein authorized.
From the adoption of the 1987 Constitution up to the present, no other law has been passed by the
legislature on the same subject. Thus, what governs the disposition of private lands in favor of a
natural-born Filipino citizen who has lost his Philippine citizenship remains to be BP 185.
Even if private respondents were already Canadian citizens at the time they applied for registration
of the properties in question, said properties as discussed above were already private lands;
consequently, there could be no legal impediment for the registration thereof by respondents in view
of what the Constitution ordains. The parcels of land sought to be registered no longer form part of
the public domain. They are already private in character since private respondents' predecessors-ininterest have been in open, continuous and exclusive possession and occupation thereof under
claim of ownership prior to June 12, 1945 or since 1937. The law provides that a natural-born citizen
of the Philippines who has lost his Philippine citizenship may be a transferee of a private land up to a
maximum area of 1,000 sq.m., if urban, or one (1) hectare in case of rural land, to be used by him as
his residence (BP 185).
It is undisputed that private respondents, as vendees of a private land, were natural-born citizens of
the Philippines. For the purpose of transfer and/or acquisition of a parcel of residential land, it is not
significant whether private respondents are no longer Filipino citizens at the time they purchased or
registered the parcels of land in question. What is important is that private respondents were
formerly natural-born citizens of the Philippines, and as transferees of a private land, they could
apply for registration in accordance with the mandate of Section 8, Article XII of the Constitution.
Considering that private respondents were able to prove the requisite period and character of
possession of their predecessors-in-interest over the subject lots, their application for registration of
title must perforce be approved.
The dissenting opinion, however, states that the requirements in BP 185, must also be complied with
by private respondents. Specifically, it refers to Section 6, which provides:
Sec. 6. In addition to the requirements provided for in other laws for the registration
of titles to lands, no private land shall be transferred under this Act, unless the
transferee shall submit to the register of deeds of the province or city where the
property is located a sworn statement showing the date and place of his birth; the
names and addresses of his parents, of his spouse and children, if any; the area, the
location and the mode of acquisition of his landholdings in the Philippines, if any; his
intention to reside permanently in the Philippines; the date he lost his Philippine
citizenship and the country of which he is presently a citizen; and such other
information as may be required under Section 8 of this Act.

The Court is of the view that the requirements in Sec. 6 of BP 185 do not apply in the instant case
since said requirements are primarily directed to the register of deeds before whom compliance
therewith is to be submitted. Nowhere in the provision is it stated, much less implied, that the
requirements must likewise be submitted before the land registration court prior to the approval of an
application for registration of title. An application for registration of title before a land registration
court should not be confused with the issuance of a certificate of title by the register of deeds. It is
only when the judgment of the land registration court approving the application for registration has
become final that a decree of registration is issued. And that is the time when the requirements of
Sec. 6, BP 185, before the register of deeds should be complied with by the applicants. This decree
of registration is the one that is submitted to the office of the register of deeds for issuance of the
certificate of title in favor of the applicant. Prior to the issuance of the decree of registration, the
register of deeds has no participation in the approval of the application for registration of title as the
decree of registration is yet to be issued.
WHEREFORE, the petition is DISMISSED and the decision appealed from is hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Vitug, Kapunan, and Mendoza, JJ.,concur.