G.R. No.

95694 October 9, 1997VICENTE VILLAFLOR, substituted by his heirs,

petitioner,
vs.
COURT OF APPEALS and NASIPIT LUMBER CO., INC.,
respondents.
PANGANIBAN,J.:

The case is a petition for review on certiorari seeking the reversal of the CA’s
order affirming the dismissal by the lower court of petitioner’s complaint against private
respondent Nasipit Lumber Co., Incorporated.
FACTS :
The Petitioner bought a large tract of land containing one hundred forty (140) hectares to four
(4) different owners in 1940. The land was part of the public domain, but the petitioners
predecessor in interest over which he acquired the property, have been in open, exclusive and
notorious possession of the same for some time. After acquisition, petitioner asserts exclusive
rights thereof for more than fifty (50) years. In 1946, petitioner entered into a lease agreement
with respondent Nasipit Lumber Co. Inc. However, an “Agreement for the Relinquishment
of Rights” was entered into by both parties in 1950. The respondent having complied
with all the requirements agreed upon, assumed ownership and possession of the
property since then. Respondent corporation likewise filed a sales application in 1950 over
the property to bolster his claim which the Bureau of Land otherwise granted on the same
year as proof of an “Order of Award” issued. In 1974 or twenty four (24) years had passed, when
petitioner, questioned and made several collateral and extraneous claims against the
respondent. However, the Bureau of Lands dismissed the claim, arguing that petitioner no
longer has any substantial rights to question the validity of acquisition of the respondent
and the subsequent issuance of free patent by the Bureau of Lands.
Unperturbed, petitioner filed a motion for reconsideration at the Ministry of Natural
Resources which likewise dismissed the petition. On July 6, 1978, petitioner filed a
complaint in the trial court for "Declaration of Nullity of Contract
( D e e d o f Relinquishment of Rights), Recovery of Possession (of two parcels of land subject
of the contract), and Damages" at about the same time that he appealed the decision of the
Minister of Natural Resources to the Office of the President. On January 28, 1983, petitioner died.
Petitioner’s heir substituted in his behalf to pursue the claim. The trial court in Butuan City who initially take
cognizance of the case ordered the case dismissed, on the grounds that: (1) petitioner admitted
the due execution and genuineness of the contract and was estopped from proving its nullity, (2)
the verbal lease agreements were unenforceable under Article 1403 (2) (e) of the Civil Code,
and (3) his causes of action were barred by extinctive prescription and/or laches. The heirs
appealed to the CA which likewise rendered judgment of dismissal by upholding the
lower court’s ruling. Not satisfied, petitioner's heirs filed the instant petition for review
which the court granted, hence this petition.

ISSUE/S:
Whether or not the petitioner still has cause of action to pursue claim of
ownership over the property since his rights thereon was already transferred and relinquished to the
respondent by virtue of the Deed executed thereon; and
Whether or not the private respondent corporation is qualified to acquire
ownership over the land of public domain.
RULING:
The petition is bereft of merit. The court ruled that the petitioner no longer has a cause of action
to demand declaration of nullity over the rights conferred to respondents since his claimed thereof was
merely based on speculations, surmises and conjectures. The petitioner’s claim of ownership
and rights over the property was negated by proof that he ceded the same to the respondent by
virtue of an “Agreement on the Relinquishment of Rights” which they have executed. The petitioner
insistence that the court erred in affirming his cause is misplaced. The finding of the court and
the agency which acquire primary jurisdiction over the petition, was accorded great weight by the
court. As to the prohibition that “xxxx corporation or association may not hold alienable land of
public domain except for lease not to exceed one thousand hectares ”, that court
declared that “xxx where the applicant had, before the Constitution took effect,
fully complied with all this obligations under the Public Land Act in order to entitle him
to a Sales patent, there would be no legal or equitable justification for refusing to issue
or release the sales patent”.
The requirements for a sales application under the Public Land Act for a corporation to
acquire ownership of public domain, was essentially complied upon by the respondent,
hence no disqualification exist not to extend and validly issued the confirmation of title
over the land in question to the respondent
corporation. All told, the only disqualification that can be imputed to private respondent is the
prohibition in the 1973 Constitution against the holding of alienable lands of the public domain
by corporations. However, this Court settled the matter, declaring that said constitutional
prohibition had no retroactive effect and could not prevail over a vested right to the land.
Application for patent for and in behalf of Nasipit has clearly no impediment, for
they have proven satisfactory compliance of the requirements of the law. Petition is DISMISSED.