G.R. No.

167707 October 8, 2008

DENR V. YAP

REYES, R.T., J.:


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

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

The Antecedents

G.R. No. 167707

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


On April 14, 1976, the Department of Environment and Natural Resources (DENR)
approved the National Reservation Survey of Boracay
Island,
[6]
which identified several lots as being occupied or claimed by named persons.
[7]


On November 10, 1978, then President Ferdinand Marcos issued Proclamation
No. 1801
[8]
declaring Boracay Island, among other islands, caves and peninsulas in thePhilippines,
as tourist zones and marine reserves under the administration of the Philippine Tourism Authority
(PTA). President Marcos later approved the issuance of PTACircular 3-82
[9]
dated September 3, 1982,
to implement Proclamation No. 1801.

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

In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular
No. 3-82 raised doubts on their right to secure titles over their occupied lands. They declared that
they themselves, or through their predecessors-in-interest, had been in open, continuous, exclusive,
and notorious possession and occupation in Boracay sinceJune 12, 1945, or earlier since time
immemorial. They declared their lands for tax purposes and paid realty taxes on them.
[10]


Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular
did not place Boracay beyond the commerce of man. Since the Island was classified as a tourist zone,
it was susceptible of private ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141,
otherwise known as the Public Land Act, they had the right to have the lots registered in their names
through judicial confirmation of imperfect titles.

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

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

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


The parties also agreed that the principal issue for resolution was purely legal: whether
Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands in
Boracay. They decided to forego with the trial and to submit the case for resolution upon submission
of their respective memoranda.
[13]


The RTC took judicial notice
[14]
that certain parcels of land in Boracay Island, more
particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO
2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in Civil Case Nos. 5222 and
5262 filed before the RTC of Kalibo, Aklan.
[15]
The titles were issued on
August 7, 1933.
[16]


RTC and CA Dispositions

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

WHEREFORE, in view of the foregoing, the Court declares that
Proclamation No. 1801 and PTA Circular No. 3-82 pose no legal obstacle to the
petitioners and those similarly situated to acquire title to their lands in Boracay, in
accordance with the applicable laws and in the manner prescribed therein; and to
have their lands surveyed and approved by respondent Regional Technical Director
of Lands as the approved survey does not in itself constitute a title to the land.

SO ORDERED.
[17]


The RTC upheld respondents-claimants right to have their occupied lands titled in their
name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in
Boracay were inalienable or could not be the subject of disposition.
[18]
The Circular itself recognized
private ownership of lands.
[19]
The trial court cited Sections 87
[20]
and 53
[21]
of the Public Land Act as
basis for acknowledging private ownership of lands in Boracay and that only those forested areas in
public lands were declared as part of the forest reserve.
[22]


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

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

WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered by us DENYING the appeal filed in this case and AFFIRMING the decision
of the lower court.
[24]



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

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

G.R. No. 173775

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

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



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

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

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


Issues

G.R. No. 167707

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82
pose any legal obstacle for respondents, and all those similarly situated, to acquire title to their
occupied lands in Boracay Island.
[34]




G.R. No. 173775

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

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

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

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

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

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

In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No.
167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles over their occupied
portions in Boracay. The twin petitions pertain to their right, if any, to judicial confirmation of
imperfect title under CA No. 141, as amended. They do not involve their right to secure title under
other pertinent laws.

Our Ruling

Regalian Doctrine and power of the executive
to reclassify lands of the public domain

Private claimants rely on three (3) laws and executive acts in their bid for judicial
confirmation of imperfect title, namely: (a) Philippine Bill of 1902
[36]
in relation to Act No. 926, later
amended and/or superseded by Act No. 2874 and CA No. 141;
[37]
(b) Proclamation No. 1801
[38]
issued
by then President Marcos; and (c) Proclamation No. 1064
[39]
issued by President Gloria Macapagal-
Arroyo. We shall proceed to determine their rights to apply for judicial confirmation of imperfect
title under these laws and executive acts.

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

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

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


All lands not otherwise appearing to be clearly within private ownership are presumed to
belong to the State.
[47]
Thus, all lands that have not been acquired from the government, either by
purchase or by grant, belong to the State as part of the inalienable public domain.
[48]
Necessarily, it is
up to the State to determine if lands of the public domain will be disposed of for private ownership.
The government, as the agent of the state, is possessed of the plenary power as the persona in law to
determine who shall be the favored recipients of public lands, as well as under what terms they may
be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what
otherwise would be ordinary acts of ownership.
[49]


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


The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of
1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well
as possessory claims.
[52]


The Royal Decree of 1894 or the Maura Law
[53]
partly amended the Spanish Mortgage Law
and the Laws of the Indies. It established possessory information as the method of legalizing
possession of vacant Crown land, under certain conditions which were set forth in said
decree.
[54]
Under Section 393 of the Maura Law, an informacion posesoria or possessory information
title,
[55]
when duly inscribed in the Registry of Property, is converted into a title of ownership only
after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and
adverse,
[56]
from the date of its inscription.
[57]
However, possessory information title had to be
perfected one year after the promulgation of the Maura Law, or until April 17, 1895. Otherwise, the
lands would revert to the State.
[58]


In sum, private ownership of land under the Spanish regime could only be founded on royal
concessions which took various forms, namely: (1) titulo real or royal grant; (2) concesion especial or
special grant; (3) composicion con el estado or adjustment title; (4) titulo de compra or title by
purchase; and (5) informacion posesoria or possessory information title.
[59]


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



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

On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the
Land Registration Act. The act established a system of registration by which recorded title becomes
absolute, indefeasible, and imprescriptible. This is known as the Torrens system.
[66]


Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was
the first Public Land Act. The Act introduced the homestead system and made provisions for judicial
and administrative confirmation of imperfect titles and for the sale or lease of public lands. It
permitted corporations regardless of the nationality of persons owning the controlling stock to lease
or purchase lands of the public domain.
[67]
Under the Act, open, continuous, exclusive, and notorious
possession and occupation of agricultural lands for the next ten (10) years preceding July 26,
1904 was sufficient for judicial confirmation of imperfect title.
[68]


On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as
the second Public Land Act. This new, more comprehensive law limited the exploitation of agricultural
lands to Filipinos and Americans and citizens of other countries which gave Filipinos the same
privileges. For judicial confirmation of title, possession and occupation en concepto dueo since time
immemorial, or since July 26, 1894, was required.
[69]


After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December
1, 1936. To this day, CA No. 141, as amended, remains as the existing general law governing the
classification and disposition of lands of the public domain other than timber and mineral
lands,
[70]
and privately owned lands which reverted to the State.
[71]


Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and
occupation of lands of the public domain since time immemorial or since July 26, 1894. However, this
provision was superseded by Republic Act (RA) No. 1942,
[72]
which provided for a simple thirty-year
prescriptive period for judicial confirmation of imperfect title. The provision was last amended by PD
No. 1073,
[73]
which now provides for possession and occupation of the land applied for since June 12,
1945, or earlier.
[74]


The issuance of PD No. 892
[75]
on February 16, 1976 discontinued the use of Spanish titles as
evidence in land registration proceedings.
[76]
Under the decree, all holders of Spanish titles or grants
should apply for registration of their lands under Act No. 496 within six (6) months from the
effectivity of the decree on February 16, 1976. Thereafter, the recording of all unregistered
lands
[77]
shall be governed by Section 194 of the Revised Administrative Code, as amended by Act No.
3344.

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


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


The burden of proof in overcoming the presumption of State ownership of the lands of the
public domain is on the person applying for registration (or claiming ownership), who must prove that
the land subject of the application is alienable or disposable.
[83]
To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or claim) is
alienable or disposable.
[84]
There must still be a positive act declaring land of the public domain as
alienable and disposable. To prove that the land subject of an application for registration is alienable,
the applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute.
[85]
The applicant may also secure a certification
from the government that the land claimed to have been possessed for the required number of years
is alienable and disposable.
[86]


In the case at bar, no such proclamation, executive order, administrative action, report,
statute, or certification was presented to the Court. The records are bereft of evidence showing that,
prior to 2006, the portions of Boracay occupied by private claimants were subject of a government
proclamation that the land is alienable and disposable. Absent such well-nigh incontrovertible
evidence, the Court cannot accept the submission that lands occupied by private claimants were
already open to disposition before 2006. Matters of land classification or reclassification cannot be
assumed. They call for proof.
[87]


Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it,
agricultural lands. Private claimants posit that Boracay was already an agricultural land pursuant to
the old cases Ankron v. Government of the Philippine Islands (1919)
[88]
and De Aldecoa v. The Insular
Government (1909).
[89]
These cases were decided under the provisions of the Philippine Bill of 1902
and Act No. 926. There is a statement in these old cases that in the absence of evidence to the
contrary, that in each case the lands are agricultural lands until the contrary is shown.
[90]


Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not have
the effect of converting the whole of Boracay Island or portions of it into agricultural lands. It should
be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner through
which land registration courts would classify lands of the public domain. Whether the land would be
classified as timber, mineral, or agricultural depended on proof presented in each case.

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

x x x Petitioners furthermore insist that a particular land need not be
formally released by an act of the Executive before it can be deemed open to
private ownership, citing the cases of Ramos v. Director of Lands and Ankron v.
Government of the Philippine Islands.

x x x x

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


To aid the courts in resolving land registration cases under Act No. 926, it was then
necessary to devise a presumption on land classification. Thus evolved the dictum inAnkron that the
courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands
are agricultural lands until the contrary is shown.
[94]


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

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

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

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

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

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


Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in
1933,
[98]
did not present a justiciable case for determination by the land registration court of the
propertys land classification. Simply put, there was no opportunity for the courts then to resolve if
the land the Boracay occupants are now claiming were agricultural lands. When Act No. 926 was
supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having been filed
by private claimants or their predecessors-in-interest, the courts were no longer authorized to
determine the propertys land classification. Hence, private claimants cannot bank on Act No. 926.

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


Krivenko, however, is not controlling here because it involved a totally different issue. The
pertinent issue in Krivenko was whether residential lots were included in the general classification of
agricultural lands; and if so, whether an alien could acquire a residential lot. This Court ruled that as
an alien, Krivenko was prohibited by the 1935 Constitution
[104]
from acquiring agricultural land, which
included residential lots. Here, the issue is whether unclassified lands of the public domain are
automatically deemed agricultural.


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

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

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

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

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

Except for lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest
under PD No. 705. The DENR
[109]
and the National Mapping and Resource Information
Authority
[110]
certify that Boracay Island is an unclassified land of the public domain.

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

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

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

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

A forested area classified as forest land of the public domain does not lose
such classification simply because loggers or settlers may have stripped it of its
forest cover. Parcels of land classified as forest land may actually be covered with
grass or planted to crops by kaingin cultivators or other farmers. Forest lands do
not have to be on mountains or in out of the way places. Swampy areas covered by
mangrove trees, nipa palms, and other trees growing in brackish or sea water may
also be classified as forest land. The classification is descriptive of its legal nature
or status and does not have to be descriptive of what the land actually looks
like. Unless and until the land classified as forest is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain, the rules on confirmation of imperfect title do not
apply.
[115]
(Emphasis supplied)

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

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

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

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

Clearly, the reference in the Circular to both private and public lands merely recognizes that
the island can be classified by the Executive department pursuant to its powers under CA No. 141. In
fact, Section 5 of the Circular recognizes the then Bureau of Forest Developments authority to
declare areas in the island as alienable and disposable when it provides:

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

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

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


More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64)
other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas,
Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa
and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name
a few. If the designation of Boracay Island as tourist zone makes it alienable and disposable by virtue
of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide open for
private disposition. That could not have been, and is clearly beyond, the intent of the proclamation.

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


In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the
authority granted to her to classify lands of the public domain, presumably subject to existing vested
rights. Classification of public lands is the exclusive prerogative of the Executive Department, through
the Office of the President. Courts have no authority to do so.
[122]
Absent such classification, the land
remains unclassified until released and rendered open to disposition.
[123]


Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and
628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone
on each side of the center line of roads and trails, which are reserved for right of way and which shall
form part of the area reserved for forest land protection purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much less
unconstitutional, about the classification of Boracay Island made by the President through
Proclamation No. 1064. It was within her authority to make such classification, subject to existing
vested rights.

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

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

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

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

That Boracay Island was classified as a public forest under PD No. 705 did not bar the
Executive from later converting it into agricultural land. Boracay Island still remained an unclassified
land of the public domain despite PD No. 705.

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


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

Moreover, the prohibition under the CARL applies only to a reclassification of land. If the
land had never been previously classified, as in the case of Boracay, there can be no prohibited
reclassification under the agrarian law. We agree with the opinion of the Department of
Justice
[126]
on this point:

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

Thus, obviously, the prohibition in Section 4(a) of the CARL against the
reclassification of forest lands to agricultural lands without a prior law delimiting
the limits of the public domain, does not, and cannot, apply to those lands of the
public domain, denominated as public forest under the Revised Forestry Code,
which have not been previously determined, or classified, as needed for forest
purposes in accordance with the provisions of the Revised Forestry Code.
[127]


Private claimants are not entitled to apply for judicial confirmation of imperfect title under
CA No. 141. Neither do they have vested rights over the occupied lands under the said law. There
are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141,
namely: (1) open, continuous, exclusive, and notorious possession and occupation of the subject land
by himself or through his predecessors-in-interest under a bona fide claim of ownership since time
immemorial or fromJune 12, 1945; and (2) the classification of the land as alienable and disposable
land of the public domain.
[128]


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

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


Neither may private claimants apply for judicial confirmation of imperfect title under
Proclamation No. 1064, with respect to those lands which were classified as agricultural
lands. Private claimants failed to prove the first element of open, continuous, exclusive, and
notorious possession of their lands in Boracay since June 12, 1945.

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

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

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

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

One Last Note

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

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

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

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

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

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


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


WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals
Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED.

G.R. No. 154080 January 22, 2008
Caete vs Genuino Ice Co. Inc.

D E C I S I O N
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the Decision
1
of the Court of Appeals dated
January 9, 2002 in CA-G.R. SP No. 64337 entitled "Genuino Ice Company, Inc. vs. Hon. Victorino P.
Evangelista, Nelsie B. Caete, et al.," and its Resolution
2
dated June 26, 2002, dismissing petitioners
"Second Amended Complaint" in Civil Case No. Q-99-36483 filed in Branch 223 of the Regional Trial
Court of Quezon City.
Records show that on January 11, 1999, petitioners filed a complaint for cancellation of title to
property covered by Transfer Certificate of Title (TCT) Nos. N-140441;
3
14399;
4
RT-94384
(292245);
5
RT-94794 (292246);
6
and 292247.
7
Petitioners alleged that said titles are spurious,
fictitious and were issued "under mysterious circumstances," considering that the holders thereof
including their predecessors-in-interest were never in actual, adverse and physical possession of the
property, rendering them ineligible to acquire title to the said property under the Friar Lands
Act.
8
Petitioners also sought to nullify Original Certificate of Title (OCT) No. 614 from which the
foregoing titles sought to be cancelled originated or were derived.
Respondent Genuino Ice Co., Inc. filed a motion to dismiss
9
on the ground that the complaint states
no cause of action because petitioners are not real parties-in-interest; that no relief may be granted
as a matter of law; and that petitioners failed to exhaust administrative remedies, but it was denied
by the trial court. Respondent moved for reconsideration but the same was denied.
On November 4, 1999, petitioners filed a "Second Amended Complaint"
10
which sought to annul, in
addition to the titles already alleged in the original complaint, TCT Nos. 274095 and 274096;
11
274097
and 274098;
12
and 274099.
13

The Second Amended Complaint alleged the following causes of action, as well as the remedy sought
to be obtained, thus:
4. That plaintiffs (petitioners) and their predecessors-in-interest are among those who have been in
actual, adverse, peaceful and continuous possession in concept of owners of unregistered parcels of
land situated at Sitio Mabilog, Barangay Culiat, Quezon City, Metro Manila, which parcels of land are
more particularly described as follows:
(1) "A parcel of unregistered land known as Lot 668, situated at Barangay Culiat, Quezon City x x x."
(2) "A parcel of unregistered land known as Lot 669, situated at Barangay Culiat, Quezon City x x x."
5. That the above-described real property is a portion of a friar land known as "Piedad Estate," which
property is intended for distribution among the bona fide occupants thereof pursuant to the Friar
Lands Act.
6. That transfer certificates of title allegedly having originated or derived from Original Certificate of
Title No. 614 were issued by the Register of Deeds of Quezon City, which transfer certificates of title
are in truth and in fact fictitious, spurious and null and void, for the following reasons: (a) that no
record of any agency of the government shows as to how and in what manner was OCT 614 issued;
(b) that no record of any proceedings whatsoever, whether judicial or administrative, can support
defendants claim that the above-described property originated from OCT 614; and (c) that the
transfer certificates of title over the above-described property were issued under mysterious
circumstances for the above-named defendants and their so-called predecessors-in-interest never
had any actual, adverse, physical possession of the said property, thus, not allowed to acquire title
over the property in litigation pursuant to the Friar Lands Act.
7. That defendants are holders of transfer certificates of title of the above-described property, which
transfer certificates of title are null and void, for reasons specifically mentioned in Paragraph 6 hereof
x x x;
8. That the acts in acquiring and keeping the said transfer certificates of title in violation of the Friar
Lands Act and other existing laws are prejudicial to plaintiffs rights over the above-described
property.
9. That equity demands that defendants transfer certificates of title as specified in Paragraph 7
hereof be declared fictitious, spurious and null and void ab initio.
P R A Y E R
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that
judgment be rendered in favor of plaintiffs and against defendants:
(1) Declaring as null and void ab initio OCT 614 and all transfer certificates of title derived therefrom;
(2) Declaring as null and void defendants transfer certificates of title over the property in litigation;
(3) Ordering defendant Register of Deeds of Quezon City to cancel defendants transfer certificates of
title and all transfer certificates of title derived therefrom;
(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the
provisions of the Friar Lands Act and other existing laws.
14

Respondent moved to dismiss the Second Amended Complaint on the following grounds:
a) The complaint states no cause of action because: (1) on the allegations alone, plaintiffs
(petitioners) are not real parties in interest who may bring suit to cancel defendants (including
respondent) titles; (2) based on the allegations and prayer of the complaint, no relief, as a matter of
law, may be granted;
b) Prescription has set in;
c) There are earlier similar complaints (Civil Case Nos. Q-95-22834 and Q-95-23111) filed by a
different set of plaintiffs against a different set of defendants but which involve the same subject
matter, cause of action and allegations of the plaintiffs, with respect to the cancellation of OCT 614
and succeeding titles derived from it. Said complaints have since been dismissed by Branch 93 of the
Regional Trial Court of Quezon City, the dismissal of which is the subject of a pending certiorari
proceeding in the appellate court.
15

On January 3, 2001,
16
the trial court denied respondents motion to dismiss the Second Amended
Complaint. Its motion for reconsideration was likewise denied hence respondent filed a petition for
certiorari with the Court of Appeals.
The appellate court granted respondents petition for certiorari and dismissed petitioners Second
Amended Complaint for failure to state a cause of action. Hence, the instant petition raising the
following issues:
A. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE COMPLAINT FILED BY THE
PETITIONERS WITH THE REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL CASE NO. Q-99-36483
DOES NOT STATE A VALID CAUSE OF ACTION;
B. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE PETITIONERS ARE NOT REAL
PARTIES IN INTEREST;
C. THAT THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF "EXHAUSTION OF
ADMINISTRATIVE REMEDIES"; and,
D. THAT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND DENIED
PETITIONERS RIGHT TO DUE PROCESS WHEN IT DISMISSED THEIR COMPLAINT.
17

We deny the petition.
The subject lots are part of the Piedad Estate, Quezon City, a Friar Land acquired on December 23,
1903 by the Philippine Government from the Philippine Sugar Estates Development Company, Ltd., La
Sociedad Agricola de Ultramar, the British-Manila Estate Company, Ltd., and the Recoleto Order of
the Philippine Islands, as indicated in Public Act No. 1120 (Friar Lands Act) enacted on April 26,
1904.
18

After the Piedad Estate was registered in OCT No. 614 in the name of the Philippine Government in
1910 under the provisions of Act 496, the area was subdivided originally into 874 lots. As a result of
subsequent surveys executed in the course of disposition, the number of lots increased to 1,305.
Disposition of these lots was made by the Bureau of Lands thru sales, under the Friar Lands Act, as
early as 1910 and records show that even before the Second World War, all lots in the Piedad Estate
have been disposed of.
19
The Piedad Estate has long been segregated from the mass of the public
domain and has become private land duly registered under the Torrens system following the
procedure for the confirmation of private lands prescribed in Act 496. Thus the lands inside the
Piedad Estate are no longer lands of the public domain.
20

One who acquires land under the Friar Lands Act, as well as his successors-in-interest, may not claim
successional rights to purchase by reason of occupation from time immemorial, as this contravenes
the historical fact that friar lands were bought by the Government of the Philippine Islands, pursuant
to an Act of Congress of the United States, approved on July 1, 1902, not from individual persons but
from certain companies, a society and a religious order. Under the Friar Lands Act, only "actual
settlers and occupants at the time said lands are acquired by the Government" were given preference
to lease, purchase, or acquire their holdings, in disregard of the settlement and occupation of persons
before the government acquired the lands.
21

The basic rules of proper pleading and procedure require that every pleading shall contain in a
methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the
party pleading relies for his claim or defense, as the case may be, omitting the statement of mere
evidentiary facts.
22
And in all averments of fraud or mistake, the circumstances constituting fraud or
mistake must be stated with particularity.
23

It is axiomatic that the averments of the complaint determine the nature of the action, and
consequently, the jurisdiction of the courts. This is because the complaint must contain a concise
statement of the ultimate facts constituting the plaintiff's cause of action and must specify the relief
sought. No rule is better established than that which requires the complaint to contain a statement of
all the facts constituting the plaintiff's cause of action. Additionally, Section 5, Rule 8 of the Rules of
Court provides that in all averments of fraud or mistake, the circumstances constituting fraud or
mistake must be stated with particularity. In the case at bar, while there are allegations of fraud in
the above quoted complaints, the same are not particular enough to bring the controversy within the
SEC's jurisdiction. The said allegations are not statements of ultimate facts but are mere conclusions
of law.
A pleading should state the ultimate facts essential to the rights of action or defense asserted, as
distinguished from mere conclusions of fact, or conclusions of law. General allegations that a contract
is valid or legal, or is just, fair and reasonable, are mere conclusions of law. Likewise, allegations that
a contract is void, voidable, invalid, illegal, ultra vires, or against public policy, without stating facts
showing its invalidity, are mere conclusions of law.
24

"Ultimate facts" means the essential facts constituting the plaintiff's cause of action, or such facts as
are so essential that they cannot be stricken out without leaving the statement of the cause of action
inadequate.
25
"Cause of action" has been defined as an act or omission of one party in violation of the
legal right or rights of the other;
26
and its essential elements are: 1) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is created; 2) an obligation on the part of the
named defendant to respect or not to violate such right; and 3) an act or omission on the part of the
named defendant violative of the right of the plaintiff or constituting a breach of the obligation of
defendant to the plaintiff for which the latter may maintain an action for recovery of damages. If
these elements are not extant, the complaint becomes vulnerable to a motion to dismiss on the
ground of failure to state a cause of action.
27
In the resolution of a motion to dismiss based on failure
to state a cause of action, only the facts alleged in the complaint as well as its annexes must be
considered.
28
The test in such case is whether a court can render a valid judgment on the complaint
based upon the facts alleged and pursuant to the prayer therein.
29

Corollarily, the question of whether or not a complaint states a cause of action against a defendant or
the action is premature is one of law. The trial court can consider all the pleadings filed, including
annexes, motions and the evidence on record. However in so doing, the trial court does not rule on
the truth or falsity of such documents. It merely includes such documents in the hypothetical
admission. Any review of a finding of lack of cause of action based on these documents would not
involve a calibration of the probative value of such pieces of evidence but would only limit itself to
the inquiry of whether the law was properly applied given the facts and these supporting documents.
Therefore, what would inevitably arise from such a review are pure questions of law, and not
questions of fact.
The trial court must likewise apply relevant statutes and jurisprudence in determining whether the
allegations in a complaint establish a cause of action. While it focuses on the complaint, a court
clearly cannot disregard decisions material to the proper appreciation of the questions before it. In
resolving a motion to dismiss, every court must take cognizance of decisions this Court has rendered
because they are proper subjects of mandatory judicial notice. The said decisions, more importantly,
form part of the legal system, and failure of any court to apply them shall constitute an abdication of
its duty to resolve a dispute in accordance with law, and shall be a ground for administrative action
against an inferior court magistrate.
30

Considering the foregoing, it is not difficult to see the need for particularity and incipient
substantiation in the petitioners Second Amended Complaint.
First, their initial claim that OCT 614 of which all the other subject titles are derivatives is null and
void, has been proven wrong. As has been held in Pinlac and other cases, OCT 614 did legally exist
and was previously issued in the name of the Philippine Government in 1910 under the provisions of
Act 496.
Second, the Ad Hoc Committee of the then Ministry of Natural Resources, which was specifically
tasked to investigate the historical background of the Piedad Estate, found that as early as the period
prior to the Second World War, all lots in the Piedad Estate had already been disposed of.
Third, the Piedad Estate has been placed under the Torrens system of land registration, which means
that all lots therein are titled.
Fourth, as held in the Balicudiong case, one who acquires land under the Friar Lands Act, as well as
his successors-in-interest, may not claim successional rights to purchase by reason of occupation
from time immemorial, which means that petitioners claimed actual, adverse, peaceful and
continuous possession of the subject property is really of no moment unless it is shown that their
predecessors-in-interest were actual settlers and occupants at the time said lands were acquired by
the Government, and whose rights were not disregarded even though they were in occupation of the
same before the government acquired the land; yet, no period of time in relation to adverse
possession is alleged.
Petitioners Second Amended Complaint betrays no more than an incomplete narration of facts
unsupported by documentary or other exhibits; the allegations therein partake of conclusions of law
unsupported by a particular averment of circumstances that will show why or how such inferences or
conclusions were arrived at. It is replete with sweeping generalizations and inferences derived from
facts that are not found therein. While there are allegations of fraud upon the claim that the subject
titles were fictitious, spurious and obtained under "mysterious circumstances," the same are not
specific to bring the controversy within the trial courts jurisdiction. There is no explanation or
narration of facts as would show why said titles are claimed to be fictitious or spurious, contrary to
the requirement of the Rules that the circumstances constituting fraud must be stated with
particularity; otherwise, the allegation of fraud would simply be an unfounded conclusion of law. In
the absence of specific averments, the complaint is defective, for it presents no basis upon which the
court should act, or for the defendant to meet it with an intelligent answer.
As to the second issue raised, petitioners claim that they are bona fide occupants of the subject
property within the contemplation of the Friar Lands Act, having allegedly been in actual, adverse,
peaceful and continuous possession of the property, although it is not stated for how long and since
when. In their second amended complaint, they seek judgment
(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the
provisions of the Friar Lands Act and other existing laws. (Emphasis supplied)
They do not pray to be declared owners of the subject property despite their alleged adverse
possession but only to be adjudged as the "bona fide occupants" thereof. In other words,
petitioners concede the States ownership of the property.
Being so, petitioners may not be considered the real parties in interest for the purpose of maintaining
the suit for cancellation of the subject titles. The Court of Appeals is correct in declaring that only the
State, through the Solicitor General, may institute such suit. Jurisprudence on the matter has been
settled and the issue need not be belabored. Thus
The Court also holds that private respondents are not the proper parties to initiate the present suit.
The complaint, praying as it did for the cancellation of the transfer certificates of title of petitioners
on the ground that they were derived from a "spurious" OCT No. 4216, assailed in effect the validity
of said title. While private respondents did not pray for the reversion of the land to the government,
we agree with the petitioners that the prayer in the complaint will have the same result of reverting
the land to the government under the Regalian doctrine. Gabila vs. Barriga ruled that only the
government is entitled to this relief. The Court in that case held:
"The present motion to dismiss is actually predicated on Section 1(g), Rule 16 of the Revised Rules of
Court, i.e., failure of the complaint to state a cause of action, for it alleges in paragraph 12 thereof
that the plaintiff admits that he has no right to demand the cancellation or amendment of the
defendants title, because, even if the said title were canceled or amended, the ownership of the land
embraced therein, or of the portion thereof affected by the amendment, would revert to the public
domain. In his amended complaint the plaintiff makes no pretense at all that any part of the land
covered by the defendants title was privately owned by him or by his predecessors-in-
interest.Indeed, it is admitted therein that the said land was at all times a part of the public domain
until December 18, 1964, when the government issued a title thereon in favor of defendant. Thus, if
there is any person or entity to relief, it can only be the government.
In the case at bar, the plaintiffs own averments negate the existence of such right, for it would
appear therefrom that whatever right might have been violated by the defendant belonged to the
government, not to the plaintiff. Plaintiff-appellant argues that although his complaint is captioned as
one for cancellation of title, he has nevertheless stated therein several causes of action based on his
alleged rights of possession and ownership over the improvements, on defendant-appellees alleged
fraudulent acquisition of the land, and on the damages allegedly incurred by him (plaintiff-appellant)
in relation to the improvements. These matters are merely ancillary to the central issue of whether or
not defendant-appellees title should be canceled or amended, and they may not be leaned upon in
an effort to make out a cause of action in relation to the said focal issue. Indeed, the principal relief
prayed for in the amended complaint is the cancellation or amendment of defendant-appellees
title."
31

Under Rule 3, Section 2 of the Rules of Court, a real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.
"Interest" within the meaning of the rule means material interest, an interest in issue and to be
affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest. The interest of the party must also be personal and not one based on a desire to
vindicate the constitutional right of some third and unrelated party. Real interest, on the other hand,
means a present substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate, or consequential interest.
32

If petitioners are to be believed, they would possess a mere inchoate interest in the properties
covered by the subject titles, a mere expectancy conditioned upon the fact that if the questioned
titles are cancelled and the property is reverted to the State, they would probably or possibly be given
preferential treatment as qualified buyers or lessees of the property under the Friar Lands Act. But
this certainly is not the "interest" required by law that grants them license or the personality to
prosecute their case. Only to the State does the privilege belong.
On the issue of exhaustion of administrative remedies, suffice it to state that since petitioners do not
possess the necessary interest to prosecute the case for cancellation of title in the courts, neither do
they have the right to pursue administrative remedies outside thereof. They are not the owners; nor
are they qualified applicants therefor. It has not been shown by their complaint that they have
previously taken steps to avail of the benefits under the Friar Lands Act, since all they seek, should
the questioned titles be nullified, is to be declared bona fideoccupants of the property covered by the
questioned titles. Neither is there any indication that they possess the qualifications necessary to
enable them to avail of the preference granted under the Act.
Finally, there is no merit in petitioners contention that respondent belatedly filed the petition for
certiorari with the Court of Appeals, and that the appellate court gravely abused its discretion when it
entertained and resolved the same.
The Order of the trial court dated January 3, 2001 denying respondents motion to dismiss the Second
Amended Complaint was received by the respondent on January 16, 2001. Respondent filed a motion
for reconsideration on January 18, 2001 which was denied on February 28, 2001. Respondent
received the order denying its motion for reconsideration on March 27, 2001. On the same day, it
filed a Notice to File Petition for Certiorari. On April 2, 2001, the petition for certiorari was filed with
the Court of Appeals. Clearly, the same was timely filed hence, the appellate court correctly
entertained the same.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated January 9, 2002 in
CA-G.R. SP No. 64337 dismissing petitioners "Second Amended Complaint" in Civil Case No. Q-99-
36483 and the Resolution dated June 26, 2002 denying the motion for reconsideration,
are AFFIRMED.
SO ORDERED.
Austria-Martinez, Corona
*
, Nachura, Reyes, JJ., concur.

G.R. No. 150824 February 4, 2008
Land Bank V. Republic
D E C I S I O N


REYES, R.T., J.:


FOREST lands are outside the commerce of man and unsusceptible of private appropriation in any
form.
[1]


It is well settled that a certificate of title is void when it covers property of public domain classified as
forest, timber or mineral lands. Any title issued covering non-disposable lots even in the hands of an
alleged innocent purchaser for value shall be cancelled.
[2]
The rule must stand no matter how harsh it
may seem. Dura lex sed lex.
[3]
Ang batas ay maaaring mahigpit subalit ito ang mananaig.

Before Us is a petition for review on certiorari under Rule 45 filed by petitioner Land Bank of the
Philippines (LBP) appealing the: (1) Decision
[4]
of the Court of Appeals (CA), dated August 23, 2001, in
CA-G.R. CV No. 64121 entitled Republic of the Philippines, represented by the Director of Lands v.
Angelito Bugayong, et al.; and (2) Resolution
[5]
of the same Court, dated November 12, 2001,
denying LBPs motion for reconsideration.

The CA affirmed the Decision
[6]
of the Regional Trial Court (RTC), dated July 9, 1996, declaring null and
void Original Certificate of Title (OCT) No. P-2823, as well as other titles originating from it, on the
ground that at the time it was issued, the land covered was still within the forest zone.
[7]


The Facts

OCT No. P-2823 was issued on September 26, 1969 in favor of one Angelito C. Bugayong. Said
mother title emanated from Sales Patent No. 4576 issued in Bugayongs name on September 22,
1969.
[8]
It covered a parcel of land located in Bocana, Kabacan, Davao City, with an area of 41,276
square meters. It was originally identified and surveyed as Lot No. 4159 under Plan SI-(VIII-1), 328-
D. Marshy and under water during high tide, it used to be a portion of a dry river bed near the mouth
of Davao River.
[9]




The land was initially subdivided into four lots, viz.: Lot Nos. 4159-A, 4159-B, 4159-C and 4159-D
under Subdivision Plan (LRC) Psd-139511 approved by the Commissioner of Land Registration on April
23, 1971.
[10]
Consequently, OCT No. P-2823 was cancelled and new Transfer Certificates of Title
(TCTs) replaced it, all in the name of Bugayong.

Bugayong sold all of the four lots to different persons. Lot No. 4159-A, which was then under TCT No.
T-32769, was sold to spouses Lourdes and Candido Du. Accordingly, said TCT was cancelled and
replaced by TCT No. T-42166 in the name of spouses Du.
[11]


Afterwards, the spouses Du further caused the subdivision of the land covered by their TCT No. T-
42166 into two (2) lots. They sold one of said lots to spouses Felix and Guadalupe Dayola, who were
issued TCT No. T-45586. The other remaining lot, registered under TCT No. T-45587, was retained
by and registered in the names of spouses Du.
[12]


Subsequently, Du spouses TCT No. T-45587 was cancelled and was replaced by TCT No. T-57348
registered in the name of Lourdes Farms, Inc. subject of this case.
[13]
Lourdes Farms, Inc. mortgaged
this property to petitioner LBP on April 14, 1980.
[14]


The validity of OCT No. P-2823, as well as its derivative TCTs, remained undisturbed until some
residents of the land it covered, particularly those along Bolton Diversion Road, filed a formal petition
before the Bureau of Lands on July 15, 1981.
[15]




Investigation and ocular inspection were conducted by the Bureau of Lands to check the legitimacy of
OCT No. P-2823. They found out that: (1) at the time Sales Patent No. 4576 was issued to Bugayong,
the land it covered was still within the forest zone, classified under Project No. 1, LC-47 dated August
6, 1923; it was released as alienable and disposable land only on March 25, 1981, pursuant
to BFD Administrative Order No. 4-1585 and to the provisions of Section 13, Presidential Decree (P.D.)
No. 705;
[16]
(2) the land was marshy and covered by sea water during high tide; and (3) Bugayong
was never in actual possession of the land.
[17]


In view of the foregoing findings, the Bureau of Lands resolved that the sales patent in favor of
Bugayong was improperly and illegally issued and that the Director of Lands had no jurisdiction to
dispose of the subject land.
[18]


Upon recommendation of the Bureau of Lands, the Republic of the Philippines represented by the
Director of Lands, through the Office of the Solicitor General (OSG), instituted a complaint
[19]
before
the RTC in Davao, Branch 15, for the cancellation of title/patent and reversion of the land covered
by OCT No. P-2823 into the mass of public domain. The complaint, as amended,
[20]
was filed against
Bugayong and other present owners and mortgagees of the land, such as Lourdes Farms, Inc. and the
latters mortgagee, petitioner LBP.

In its answer with cross-claim,
[21]
LBP claimed that it is a mortgagee in good faith and for value. It
prayed that should TCT No. T-57348 of Lourdes Farms, Inc. be annulled by the court, Lourdes Farms,
Inc. should be ordered to pay its outstanding obligations to LBP or to provide a new collateral
security.
[22]


RTC Judgment

Eventually, the RTC rendered its judgment
[23]
on July 9, 1996 determining that:

x x x The mistakes and the flaws in the granting of the title were made by the Bureau of Lands
personnel more particularly the Director of Lands who is the Officer charged with the following the
provisions of the Public Land Law. x x x.

It is clear that the mother Title, OCTP-2823 in the name of defendant Bugayong was issued at a time
when the area was not yet released by the Bureau of Forestry to the Bureau of Lands.

The area covered by OCT No. P. 2823 was not yet declared by the Bureau of Lands alienable and
disposable when the said OCT was issued. The subdivision of the lot covered by OCT P-2823 into 4
lots covered by TCT Nos. T-32768, 32769, 32756 and 32771 did not cure the defect. x x x.
[24]


The RTC explained that titles issued to private parties by the Bureau of Lands are void ab initio if the
land covered by it is a forest land.
[25]
It went further by stating that if the mother title is void, all titles
arising from the mother title are also void.
[26]
It thus ruled in favor of the Republic with
a fallo reading:

IN VIEW WHEREOF, judgment is hereby rendered declaring Original Certificate of Title No. P-2823
issued in the name of defendant Angelito Bugayong null and void. The following Transfer Certificate
of Titles which were originally part of the lot covered by O.C.T. No. P-2823 are likewise declared void:

1.A. TCT No. 57348 in the name of defendant Lourdes Farms mortgaged to defendant Land Bank.

B. TCT No. 84749 in the name of defendants Johnny and Catherine Du mortgaged to defendant
Development Bank of the Philippines.

C. TCT No. 37386 in the name of defendants spouses Pahamotang mortgaged to defendant Lourdes
Du mortgaged with defendant Allied Bank.

E. TCT Nos. 68154 and 32768 in the names of defendants/spouses Maglana Santamaria.

2. All private defendants shall give to the Davao City Register of Deeds their titles, who shall cancel
the Transfer Certificate of Titles mentioned in paragraph number one.

3. Lot No. 4159, Plan SI (VIII-1) 328-D covered by O.C.T. P-2823 is hereby REVERTED to the mass of
public domain.

SO ORDERED.
[27]
(Underscoring supplied)

Disagreeing with the RTC judgment, LBP appealed to the CA on October 31, 1996. It asserted in
its appellants brief
[28]
that it validly acquired mortgage interest or lien over the subject property
because it was an innocent mortgagee for value and in good faith.
[29]
It also emphasized that it is a
government financial institution.

CA Disposition

In a Decision
[30]
dated August 23, 2001, the CA ruled against the appellants,
[31]
disposing thus:

WHEREFORE, premises considered, the present appeals are hereby DISMISSED and the Decision of
the trial court in Civil Case No. 17516 is hereby AFFIRMED.
[32]


The CA confirmed that the evidence for the plaintiff clearly established that the land covered by OCT
No. P-2823 issued pursuant to a sales patent granted to defendant Angelito C. Bugayong was still
within the forestal zone at the time of the grant of the said patent.
[33]
It explained:

Forest lands or forest reserves, are incapable of private appropriation and possession thereof,
however long, cannot convert them into private properties. This is premised on the Regalian
Doctrineenshrined not only in the 1935 and 1973 Constitutions but also in the 1987 Constitution. Our
Supreme Court has upheld this rule consistently even in earlier cases. It has also been held that
whatever possession of the land prior to the date of release of forested land as alienable and
disposable cannot be credited to the 30-year requirement (now, since June 12, 1945) under Section
48(b) of the Public Land Act. It is only from that date that the period of occupancy for purposes of
confirmation of imperfect or incomplete title may be counted. Since the subject land was declared as
alienable and disposable only on March 25, 1981, appellants and their predecessors-in-interest could
not claim any vested right thereon prior to its release from public forest zone.

The inclusion of forest land in a title, whether title be issued during the Spanish regime or under
the Torrens system, nullifies the title. It is, of course, a well-recognized principle that the Director of
Lands (now Land Management Bureau) is bereft of any jurisdiction over public forest or any lands not
capable of registration. It is the Bureau of Forestry that has jurisdiction and authority over the
demarcation, protection, management, reproduction, occupancy and use of all public forests and
forest reservations and over the granting of licenses for the taking of products therefrom. And where
the land applied for is part of the public forest, the land registration court acquires no jurisdiction
over the land, which is not yet alienable and disposable.

Thus, notwithstanding the issuance of a sales patent over the subject parcel of land, the State may
still take action to have the same land reverted to the mass of public domain and the certificate of
title covering said forest land declared null and void for having been improperly and illegally
issued. Titles issued over non-alienable public lands have been held as void ab initio. The defense of
indefeasibility of title issued pursuant to such patent does not lie against the State. Public land
fraudulently included in patents or certificates of title may be recovered or reverted to the State in
accordance with Section 101 of the Public Land Act. In such cases, prescription does not lie against
the State. Likewise, the government is not estopped by such fraudulent or wrongful issuance of a
patent over public forest land inasmuch as the principle of estoppel does not operate against the
Government for the acts of its agents. x x x.
[34]
(Citations omitted)

With respect to LBPs contention
[35]
that it was a mortgagee in good faith and for value, the CA
declared, citing Republic v. Reyes
[36]
that: mortgagees of non-disposable lands where titles thereto
were erroneously
issued acquire no protection under the land registration law. Appellants-mortgagees proper
recourse therefore is to pursue their claims against their respective mortgagors and debtors.
[37]


When LBPs motion for reconsideration was denied, it resorted to the petition at bar.

Issues

LBP seeks the reversal of the CA disposition on the following grounds

A.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE PETITIONER LAND BANK OF
THE PHILIPPINES MORTGAGE RIGHT AND INTEREST AS AN INNOCENT PURCHASER (MORTGAGEE)
FOR VALUE AND IN GOOD FAITH OVER THE SUBJECT LAND COVERED BY TCT NO. T-57348 IS
VALID AND SUBSISTING IN ACCORDANCE WITH THE LAW AND EXISTING JURISPRUDENCE IN OUR
COUNTRY.

B.
THE COURT OF APPEALS ERRED IN NOT FINDING PETITIONER LAND BANK OF THE PHILIPPINES
MORTGAGE RIGHT AND INTEREST OVER THE SUBJECT LAND AS VALID AND SUBSISTING UNDER THE
CONSTITUTIONAL GUARANTEE OF NON-IMPAIRMENT OF OBLIGATION OF CONTRACTS.

C.
THE COURT OF APPEALS ERRED IN NOT AWARDING TO PETITIONER LAND BANK OF THE
PHILIPPINES THE RELIEF PRAYED FOR UNDER ITS CROSS-CLAIMAGAINST CO-DEFENDANT LOURDES
FARMS, INC., THAT IS, ORDERING SAID CO-DEFENDANT LOURDES FARMS, INC. TO PAY ITS
OUTSTANDING OBLIGATION TO THELAND BANK COVERED BY THE SUPPOSED
NULL AND VOID TCT NO. T-57348, OR TO PROVIDE A SUBSTITUTE COLLATERAL IN LIEU OF
SAID TCT NO. T-57348.
[38]
(Underscoring supplied)

Our Ruling

LBP has no valid and subsisting mortgagees interest over the land covered by TCT No. T-57348.

It has been established and admitted by LBP that: (1) the subject land mortgaged to it by
Lourdes Farms, Inc. is covered by TCT No. T-57348; and (2) the said TCT is derived from OCT No. P-
2823 issued to Bugayong.
[39]


It was further ascertained by the courts below that at the time OCT No. P-2823 was issued to
Bugayong on September 26, 1969, the land it covered was still within the forest zone. It was declared
as alienable and disposable only on March 25, 1981.
[40]


Despite these established facts, LBP argues that its alleged interest as mortgagee of the subject
land covered by TCT No. T-57348 must be respected. It avers that TCTNo. T-57348 is a Torrens title
which has no written indications of defect or vice affecting the ownership of Lourdes Farms,
Inc. Hence, it posits that it was not and could not have been required to explore or go beyond what
the title indicates or to search for defects not indicated in it.

LBP cites cases where the Court ruled that a party is not required to explore further than what
the Torrens title upon its face indicates in quest of any hidden defect of an inchoate right that may
subsequently defeat his right to it; and that a bank is not required before accepting a mortgage to
make an investigation of the title of the property being given as security. LBP submits that its right as
a mortgagee is binding against the whole world and may not be disregarded.
[41]



It further argues that review or reopening of registration is proscribed, as the title has become
incontrovertible pursuant to Section 32 of P.D. No. 1529; and that its mortgage rights and interest
over the subject land is protected by the constitutional guarantee of non-impairment of contracts.
[42]


The contention that LBP has an interest over the subject land as a mortgagee has no merit. The
mortgagor, Lourdes Farms, Inc. from which LBP supposedly obtained its alleged interest has never
been the owner of the mortgaged land. Acquisition of the subject land by Lourdes Farms, Inc. is
legally impossible as the land was released as alienable and disposable only on March 25, 1981. Even
at present, no one could have possessed the same under a claim of ownership for the period of thirty
(30) years required under Section 48(b) of Commonwealth Act No. 141, as amended.
[43]
Hence, LBP
acquired no rights over the land.

Under Article 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the
thing mortgaged, to wit:

ARTICLE 2085. The following requisites are essential to the contracts of pledge and mortgage:

(1) That they be constituted to secure the fulfillment of a principal obligation;

(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged;

(3) That the persons constituting the pledge or mortgage have the free disposal of their property,
and in the absence thereof, that they be legally authorized for the purpose. (Emphasis ours)

Since Lourdes Farms, Inc. is not the owner of the land, it does not have the capacity to mortgage it to
LBP. In De la Cruz v. Court of Appeals,
[44]
the Court declared:

While it is true that the mortgagees, having entered into a contract with petitioner as mortgagor, are
estopped from questioning the latters ownership of the mortgaged property and his concomitant
capacity to alienate or encumber the same, it must be considered that, in the first place, petitioner
did not possess such capacity to encumber the land at the time for the stark reason that it had been
classified as a forest land and remained a part of the patrimonial property of the State. Assuming,
without admitting, that the mortgagees cannot subsequently question the fact of ownership of
petitioner after having dealt with him in that capacity, still, petitioner was never vested with the
proprietary power to encumber the property. In fact, even if the mortgagees continued to
acknowledge petitioner as the owner of the disputed land, in the eyes of the law, the latter can never
be presumed to be owner.

As correctly pointed out by the OSG, mortgagees of non-disposable lands, titles to which were
erroneously issued, acquire no protection under the Land Registration Law.
[45]


Even assuming that LBP was able to obtain its own TCT over the property by means of its mortgage
contract with Lourdes Farms, Inc., the title must also be cancelled as it was derived from OCT No. P-
2823 which was not validly issued to Bugayong. Forest lands cannot be owned by private persons. It
is not registerable whether the title is a Spanish title or a Torrens title.
[46]
It is well settled that a
certificate of title is void when it covers property of public domain classified as forest or timber or
mineral land. Any title issued covering non-disposable lots even in the hands of an alleged innocent
purchaser for value shall be cancelled.
[47]


Moreover, the Court has already addressed the same issue in its Resolution of November 14, 2001 on
the petition filed by the Philippine National Bank (PNB) in G. R. No. 149568 entitled Philippine
National Bank v. Republic of the Philippines represented by the Director of Lands, which also
appealed the subject CA decision. PNB, like LBP, is also a mortgagee of another derivative TCT of the
same OCT No. 2823. Said resolution reads:

On September 22, 1969, Angelito C. Bugayong was issued a sales patent covering a 41,276 square
meter parcel of land in Bocana, Barrio Kabacan, Davao City by the Bureau of Lands. On the basis of
the sales patent, the Register of Deeds of Davao City issued OCT No. P-2823 to Bugayong. Bugayong
later subdivided the land into four lots, one of which (Lot No. 4159-B covered by TCT No. T-32770)
was sold by him to the spouses Reynaldo Rogacion and Corazon Pahamotang. After obtaining TCT No.
T-37786 in their names, the spouses mortgaged the lot to the Philippine National Bank (PNB). As they
defaulted in the payment of their loan, the PNB foreclosed the property and purchased it at the
foreclosure sale as the highest bidder. Eventually, the PNB consolidated its title.

Sometime in 1981, upon the petition of the residents of the land, the Bureau of Lands conducted an
investigation into the sales patent issued in favor of Angelito C. Bugayong and found the sales patent
to have been illegally issued because (1) the land was released as alienable and disposable only
on March 25, 1981; previous to that, the land was within the forest zone; (2) the land is covered by
sea water during high tide; and (3) the patentee, Angelito C. Bugayong, had never been in actual
possession of the land.

Based on this investigation, the government instituted the present suit in 1987 for cancellation of
title/patent and reversion of the parcel of land against Angelito C. Bugayong, the Rogacion spouses,
and the PNB, among others.

On July 6, 1996, the trial court rendered a decision declaring OCT No. P-2823 and all titles derived
therefrom null and void and ordering reversion of the subject property to the mass of the public
domain. On appeal, the Court of Appeals affirmed the trial courts decision. Hence, this petition.

First. Petitioner contends that it had a right to rely on TCT No. T-37786 showing the mortgagors
Reynaldo Rogacion and Corazon Pahamotangs ownership of the property.

The contention is without merit. It is well settled that a certificate of title is void when it covers
property of public domain classified as forest or timber or mineral lands. Any title issued covering
non-disposable lots even in the hands of an alleged innocent purchaser for value shall be cancelled
(Republic v. Reyes, 155 SCRA 313 (1987)).

(Republic v. Court of Appeals, 148 SCRA 480 (1987)). In this case, petitioner does not dispute that its
predecessor-in-interest, Angelito C. Bugayong, had the subject property registered in his name when
it was forest land. Indeed, even if the subject property had been eventually segregated from the
forest zone, neither petitioner nor its predecessors-in-interest could have possessed the same under
claim of ownership for the requisite period of thirty (30) years because it was released as alienable
and disposable only on March 25, 1981.

Second. Petitioners contention that respondents action for reversion is barred by prescription for
having been filed nearly two decades after the issuance of Bugayongs sales patent is likewise without
merit. Prescription does not lie against the State for reversion of property which is part of the public
forest or of a forest reservation registered in favor of any party. Public land registered under the
Land Registration Act may be recovered by the State at any time (Republic v. Court of Appeals, 258
SCRA 223 (1996)).
[48]


Contrary to the argument of LBP, since the title is void, it could not have become
incontrovertible. Even prescription may not be used as a defense against the Republic. On this
aspect, the Court in Reyes v. Court of Appeals,
[49]
citing Republic v. Court of Appeals,
[50]
held:

Petitioners contention that the government is now estopped from questioning the validity of OCT
No. 727 issued to them, considering that it took the government 45 years to assail the same, is
erroneous. We have ruled in a host of cases that prescription does not run against the
government. In point is the case of Republic v. Court of Appeals, wherein we declared:

And in so far as the timeliness of the action of the Government is concerned, it is basic that
prescription does not run against the State x x x. The case law has also been:

When the government is the real party in interest, and is proceeding mainly to assert its own rights
and recover its own property, there can be no defense on the ground of laches or limitation x x x.

Public land fraudulently included in patents or certificates of title may be recovered or reverted to
the State in accordance with Section 101 of the Public Land Act.Prescription does not lie against the
State in such cases for the Statute of Limitations does not run against the State. The right of reversion
or reconveyance to the State is not barred by prescription. (Emphasis ours)

There is no impairment of contract but a valid exercise of police power of the State.

The constitutional guarantee of non-impairment of contracts may not likewise be used by LBP to
validate its interest over the land as mortgagee. The States restraint upon the right to have an
interest or ownership over forest lands does not violate the constitutional guarantee of non-
impairment of contracts. Said restraint is a valid exercise of the police power of the State. As
explained by the Court in Director of Forestry v. Muoz:
[51]


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

Because of the importance of forests to the nation, the States police power has been wielded to
regulate the use and occupancy of forest and forest reserves.

To be sure, the validity of the exercise of police power in the name of the general welfare cannot be
seriously attacked. Our government had definite instructions from the Constitutions preamble to
promote the general welfare. Jurisprudence has time and again upheld the police power over
individual rights, because of the general welfare. Five decades ago, Mr. Justice Malcolm made it clear
that the right of the individual is necessarily subject to reasonable restraint by general law for the
common good and that the liberty of the citizen may be restrained in the interest of public health,
or of the public order and safety, or otherwise within the proper scope of the police power. Mr.
Justice Laurel, about twenty years later, affirmed the precept when he declared that the state in
order to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations and that *p+ersons and property may be subjected to all kinds of
restraints and burdens, in order to secure the general comfort, health, and prosperity of the
state. Recently, we quoted from leading American case, which pronounced that neither property
rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work them harm, and
that, therefore, *e+qually fundamental with the private right is that of the public to regulate it in the
common interest. (Emphasis ours and citations omitted)

In Edu v. Ericta,
[52]
the Court defined police power as the authority of the state to enact legislation
that may interfere with personal liberty or property in order to promote the general welfare. It is the
power to prescribe regulations to promote the health, morals, peace, education, good order or
safety, and general welfare of the people. It is that inherent and plenary power of the State which
enables it to prohibit all things hurtful to the comfort, safety and welfare of society.
[53]
It extends to
all the great public needs and is described as the most pervasive, the least limitable and the most
demanding of the three inherent powers of the State, far outpacing taxation and eminent
domain.
[54]
It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its regulation under the police power is not only
proper but necessary.
[55]


Preservation of our forest lands could entail intrusion upon contractual rights as in this case but it is
justified by the Latin maxims Salus populi est suprema lex and Sic utere tuo ut alienum non laedas,
which call for the subordination of individual interests to the benefit of the greater number.
[56]


While We sympathize with petitioner, We nonetheless cannot, in this instance, yield to compassion
and equity. The rule must stand no matter how harsh it may seem.
[57]



We cannot resolve the cross-claim for lack of factual basis. The cross-claim must be remanded to
the RTC for further proceedings.

LBP filed a cross-claim against Lourdes Farms, Inc. before the RTC.
[58]
The cross-claim is for the
payment of cross-defendant Lourdes Farms, Inc.s alleged obligation to LBP or its submission of a
substitute collateral security in lieu of the property covered by TCT No. T-57348.

However, the records do not show that Lourdes Farms, Inc. was required by the RTC to file an answer
to the cross-claim. Likewise, Lourdes Farms, Inc. was not notified of the proceedings before the
CA. It was not also made a party to this petition.

LPB now contends that the CA erred in not granting its cross-claim against Lourdes Farms, Inc. We
are thus confronted with the question: Should We now order Lourdes Farms, Inc. to comply with the
demand of LBP?

We rule in the negative. It may be true that Lourdes Farms, Inc. still has an obligation to LBP but
We cannot make a ruling regarding the same for lack of factual basis. There is no evidence-taking on
the cross-claim. No evidence was adduced before the RTC or the CA regarding it. No factual finding
or ruling was made by the RTC or the CA about it.

It bears stressing that in a petition for review on certiorari, the scope of this Court's judicial review of
decisions of the CA is generally confined only to errors of law. Questions of fact are not
entertained.
[59]


Moreover, the failure to make a ruling on the cross-claim by the RTC was not assigned as an error in
LBPs appellants brief
[60]
before the CA. Hence, the CA cannot be faulted for not making a ruling on
it.

As held in De Liano v. Court of Appeals,
[61]
appellant has to specify in what aspect of the law or the
facts the trial court erred. The conclusion, therefore, is that appellant must carefully formulate his
assignment of errors. Its importance cannot be underestimated, as Section 8, Rule 51 of the Rules of
Court will attest:

Questions that may be decided. No error which does not affect the jurisdiction over the subject
matter or the validity of the judgment appealed from or the proceedings therein will be considered
unless stated in the assignment of errors, or closely related to or dependent on an assigned error and
properly argued in the brief, save as the court may pass upon plain errors and clerical errors.

Apparently, the cross-claim was taken for granted not only by the RTC but also by LBP. The cross-
claim was not included as a subject or issue in the pre-trial order and instead of asking that the same
be heard, LBP filed a motion
[62]
to submit the main case for resolution. The main case was thus
resolved by the RTC without touching on the merits of the cross-claim.

On the other hand, while the CA did not make a categorical ruling on LBPs cross-claim, it pointed out
that: (1) as found by the RTC, there is a mortgage contract between LBP and Lourdes Farms, Inc., with
LBP as mortgagee and Lourdes Farms, Inc. as mortgagor; and (2) LBPs proper recourse is to pursue its
claim against Lourdes Farms, Inc.
[63]


The CA thus impliedly ruled that LBPs cross-claim should not be included in this case. Instead of
making a ruling on the same, it recommended that LBP pursue its claim against Lourdes Farms, Inc.
All told, although the relationship between LBP and Lourdes Farms, Inc. as mortgagee and mortgagor
was established, the cross-claim of LBP against Lourdes Farms, Inc. was left unresolved.

The Court is not in a position to resolve the cross-claim based on the records. In order for the cross-
claim to be equitably decided, the Court, not being a trier of facts, is constrained to remand the case
to the RTC for further proceedings. Remand of the case for further proceedings is proper due to
absence of a definitive factual determination regarding the cross-claim.
[64]


WHEREFORE, the appealed Decision of the Court of Appeals is hereby AFFIRMED with
the MODIFICATION that the cross-claim of petitioner Land Bank of thePhilippines against Lourdes
Farms, Inc. is REMANDED to the Regional Trial Court, Branch 15, Davao City, for further proceedings.

SO ORDERED.

G.R. No. 181502 February 2, 2010
Diaz V. Republic of the Philippines

R E S O L U T I O N
CORONA, J.:
This is a letter-motion praying for reconsideration (for the third time) of the June 16, 2008
resolution of this Court denying the petition for review filed by petitioner Florencia G. Diaz.

Petitioners late mother, Flora Garcia (Garcia), filed an application for registration of a vast tract
of land
[1]
located in Laur, Nueva Ecija and Palayan City in the then Court of First Instance (CFI), Branch
1, Nueva Ecija on August 12, 1976.
[2]
She alleged that she possessed the land as owner and worked,
developed and harvested the agricultural products and benefits of the same continuously, publicly
and adversely for more or less 26 years.

The Republic of the Philippines, represented by the Office of the Solicitor General (OSG),
opposed the application because the land in question was within the Fort Magsaysay Military
Reservation (FMMR), established by virtue of Proclamation No. 237 (Proclamation 237)
[3]
in 1955.
Thus, it was inalienable as it formed part of the public domain.

Significantly, on November 28, 1975, this Court already ruled in Director of Lands v. Reyes
[4]
that the
property subject of Garcias application was inalienable as it formed part of a military reservation.
Moreover, the existence of Possessory Information Title No. 216 (allegedly registered in the name of
a certain Melecio Padilla on March 5, 1895), on which therein respondent Paraaque Investment and
Development Corporation anchored its claim on the land, was not proven. Accordingly, the decree of
registration issued in its favor was declared null and void.

Reyes notwithstanding, the CFI ruled in Garcias favor in a decision
[5]
dated July 1, 1981.
The Republic eventually appealed the decision of the CFI to the Court of Appeals (CA). In its
decision
[6]
dated February 26, 1992, penned by Justice Vicente V. Mendoza (Mendoza decision),
[7]
the
appellate court reversed and set aside the decision of the CFI. The CA found that Reyes was applicable
to petitioners case as it involved the same property.

The CA observed that Garcia also traced her ownership of the land in question to Possessory
Information Title No. 216. As Garcias right to the property was largely dependent on the existence
and validity of the possessory information title the probative value of which had already been passed
upon by this Court in Reyes, and inasmuch as the land was situated inside a military reservation, the
CA concluded that she did not validly acquire title thereto.

During the pendency of the case in the CA, Garcia passed away and was substituted by her heirs, one
of whom was petitioner Florencia G. Diaz.
[8]


Petitioner filed a motion for reconsideration of the Mendoza decision. While the motion was pending
in the CA, petitioner also filed a motion for recall of the records from the former CFI. Without acting
on the motion for reconsideration, the appellate court, with Justice Mendoza as ponente, issued a
resolution
[9]
upholding petitioners right to recall the records of the case.

Subsequently, however, the CA encouraged the parties to reach an amicable settlement on the
matter and even gave the parties sufficient time to draft and finalize the same.

The parties ultimately entered into a compromise agreement with the Republic withdrawing its claim
on the more or less 4,689 hectares supposedly outside the FMMR. For her part, petitioner withdrew
her application for the portion of the property inside the military reservation. They filed a motion for
approval of the amicable settlement in the CA.
[10]


On June 30, 1999, the appellate court approved the compromise agreement.
[11]
On January 12, 2000,
it directed the Land Registration Administration to issue the corresponding decree of registration in
petitioners favor.
[12]


However, acting on a letter written by a certain Atty. Restituto S. Lazaro, the OSG filed a motion for
reconsideration of the CA resolution ordering the issuance of the decree of registration. The OSG
informed the appellate court that the tract of land subject of the amicable settlement was still within
the military reservation.

On April 16, 2007, the CA issued an amended resolution (amended resolution)
[13]
annulling the
compromise agreement entered into between the parties. The relevant part of the dispositive
portion of the resolution read:
ACCORDINGLY, the Court resolves to:
(1) x x x x x x
(2) x x x x x x
(3) x x x x x x
(4) x x x x x x
(5) x x x x x x
(6) REVERSE the Resolution dated June 30, 1999 of this Court approving the Amicable Settlement
dated May 18, 1999 executed between the Office of the Solicitor General and Florencia Garcia Diaz[;]
(7) ANNUL and SET ASIDE the Amicable Settlement dated May 18, 1999 executed between the
Office of the Solicitor General and Florencia Garcia Diaz; the said Amicable Settlement is
herebyDECLARED to be without force and effect;
(8) GRANT the Motion for Reconsideration filed by the Office of the Solicitor General and,
consequently, SET ASIDE the Resolution dated January 12, 2000 which ordered, among other
matters, that a certificate of title be issued in the name of plaintiff-appellee Florencia Garcia Diaz over
the portion of the subject property in consonance with the Amicable Settlement dated May 18, 1999
approved by the Court in its Resolution dated June 30, 1999;
(9) SET ASIDE the Resolution dated June 30, 1999 approving the May 18, 1999 Amicable
Settlement and the Resolution dated September 20, 1999 amending the aforesaid June 30, 1999
Resolution; and
(10) REINSTATE the Decision dated February 26, 1992 dismissing applicant-appellee Diaz
registration herein.

SO ORDERED.

(Emphasis supplied)

Petitioner moved for reconsideration. For the first time, she assailed the validity of the Mendoza
decision the February 26, 1992 decision adverted to in the CAs amended resolution. She alleged
that Justice Mendoza was the assistant solicitor general during the initial stages of the land
registration proceedings in the trial court and therefore should have inhibited himself when the case
reached the CA. His failure to do so, she laments, worked an injustice against her constitutional right
to due process. Thus, the Mendoza decision should be declared null and void. The motion was
denied.
[14]


Thereafter, petitioner filed a petition for review on certiorari
[15]
in this Court. It was denied for raising
factual issues.
[16]
She moved for reconsideration.
[17]
This motion was denied with finality on the
ground that there was no substantial argument warranting a modification of the Courts resolution.
The Court then ordered that no further pleadings would be entertained. Accordingly, we ordered
entry of judgment to be made in due course.
[18]


Petitioner, however, insisted on filing a motion to lift entry of judgment and motion for leave to file a
second motion for reconsideration and to refer the case to the Supreme Court en banc.
[19]
The Court
denied
[20]
it considering that a second motion for reconsideration is a prohibited
pleading.
[21]
Furthermore, the motion to refer the case to thebanc was likewise denied as the banc is
not an appellate court to which decisions or resolutions of the divisions may be appealed.
[22]
We
reiterated our directive that no further pleadings would be entertained and that entry of judgment be
made in due course.

Not one to be easily deterred, petitioner wrote identical letters, first addressed to Justice Leonardo A.
Quisumbing (then Acting Chief Justice) and then to Chief Justice Reynato S. Puno himself.
[23]
The
body of the letter, undoubtedly in the nature of a third motion for reconsideration, is hereby
reproduced in its entirety:

This is in response to your call for Moral Forces in order to redirect the destiny of our country
which is suffering from moral decadence, that to your mind, is the problem which confronts us.
(Inquirer, January 15, 2009, page 1)[.]

I recently lost my case with the Supreme Court, G.R. N[o]. 181502, and my lawyer has done all that is
humanly possible to convince the court to take a second look at the miscarriage of justice that will
result from the implementation of the DISMISSAL in a MINUTE RESOLUTION of our Petition for
Review.

Pending before your Division (First Division) is a last plea for justice so that the case may be
elevated to the Supreme Court en banc. I hope the Court exercises utmost prudence in resolving
the last plea. For ready reference, a copy of the Motion is hereto attached as Annex A.

The issue that was brought before the Honorable Supreme Court involves the Decision of then Justice
Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio.

It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in which it
became possible for him to discharge the minimum requirement of due process, [i.e.] the ability of
the court to render impartial justice, because Mr. Justice Mendoza became the ponente of the
Court of Appeals Decision, reversing the findings of the trial court, notwithstanding the fact that he,
as Assistant Solicitor General, was the very person who appeared on behalf of the Republic, as the
oppositor in the very same land registration proceedings in which he lost.

In other words, he discharged the duties of prosecutor and judge in the very same case.

In the case of the Alabang Boys*,+ the public was outraged by the actions of Atty. Verano who
admitted having prepared a simple resolution to be signed by the Secretary of Justice.

In my case, the act complained of is the worst kind of violation of my constitutional right. It is simply
immoral, illegal and unconstitutional, for the prosecutor to eventually act as the judge, and reverse
the very decision in which he had lost.

If leaked to the tri-media[,] my case will certainly evoke even greater spite from the public, and put
the Supreme Court in bad light. I must confess that I was tempted to pursue such course of action. I
however believe that such an action will do more harm than good, and even destroy the good name
of Hon. Justice Mendoza.

I fully support your call for moral force that will slowly and eventually lead our country to redirect
its destiny and escape from this moral decadence, in which we all find ourselves.

I am content with the fact that at least, the Chief Justice continues to fight the dark forces that
surround us everyday.

I only ask that the Supreme Court endeavor to ensure that cases such as mine do not happen again,
so that the next person who seeks justice will not experience the pain and frustration that I suffered
under our judicial system.

Thank you, and more power to you, SIR. (Emphasis in the original).

The language of petitioners letter/motion is unmistakable. It is a thinly veiled threat precisely
worded and calculated to intimidate this Court into giving in to her demands to honor an otherwise
legally infirm compromise agreement, at the risk of being vilified in the media and by the public.

This Court will not be cowed into submission. We deny petitioners letter/third motion for
reconsideration.

APPLICABILITY OF REYES
The Court agrees with the Republics position that Reyes is applicable to this case.

To constitute res judicata, the following elements must concur:
(1) the former judgment or order must be final;
(2) the judgment or order must be on the merits;
(3) it must have been rendered by a court having jurisdiction over the subject matter and
parties; and
(4) there must be between the first and second actions, identity of parties, of subject matter,
and of causes of action.
[24]


The first three requisites have undoubtedly been complied with. However, petitioner takes exception
to the fourth requisite, particularly on the issue of identity of parties. In her petition for review filed
in this Court, she contends that since the applicants in the two cases are different, the merits of the
two cases should, accordingly, be determined independently of each other.
[25]

This contention is erroneous.

The facts obtaining in this case closely resemble those in Aquino v. Director of Lands.
[26]
In that case,
Quintin Taedo endeavored to secure title to a considerable tract of land by virtue of his possession
thereof under CA 141. When the case eventually reached this Court, we affirmed the trial courts
decision to dismiss the proceedings as the property in question was part of the public domain.
Quintins successor-in-interest, Florencia Taedo, who despite knowledge of the proceedings did not
participate therein, thereafter sold the same property to Benigno S. Aquino. The latter sought to have
it registered in his name. The question in that case, as well as in this one, was whether our decision in
the case in which another person was the applicant constituted res judicata as against his successors-
in-interest.

We ruled there, and we so rule now, that in registration cases filed under the provisions of the Public
Land Act for the judicial confirmation of an incomplete and imperfect title, an order dismissing an
application for registration and declaring the land as part of the public domain constitutes res
judicata, not only against the adverse claimant, but also against all persons.
[27]


We also declared in Aquino that:

From another point of view, the decision in the first action has become the law of the case or at
least falls within the rule of stare decisis. That adjudication should be followed unless manifestly
erroneous. It was taken and should be taken as the authoritative view of the highest tribunal in the
Philippines. It is indispensable to the due administration of justice especially by a court of last resort
that a question once deliberately examined and decided should be considered as settled and closed
to further argument. x x x
[28]


Be that as it may, the fact is that, even before the CFI came out with its decision in favor of petitioner
on July 1, 1981, this Court, in Reyes, already made an earlier ruling on November 28, 1975 that the
disputed realty was inalienable as it formed part of a military reservation. Thus, petitioners argument
that the findings of fact of the trial court on her registrable title are binding on us on the principle
that findings of fact of lower courts are accorded great respect and bind even this Court is
untenable. Rather, it was incumbent upon the court a quo to respect this Courts ruling in Reyes, and
not the other way around.

However, despite having been apprised of the Court's findings in Reyes (which should have been a
matter of judicial notice in the first place), the trial court still insisted on its divergent finding and
disregarded the Court's decision in Reyes, declaring the subject land as forming part of a military
reservation, and thus outside the commerce of man.

By not applying our ruling in Reyes, the trial judge virtually nullified the decision of this Court and
therefore acted with grave abuse of discretion.
[29]
Notably, a judgment rendered with grave abuse of
discretion is void and does not exist in legal contemplation.
[30]


All lower courts, especially the trial court concerned in this case, ought to be reminded that it is their
duty to obey the decisions of the Supreme Court. A conduct becoming of inferior courts demands a
conscious awareness of the position they occupy in the interrelation and operation of our judicial
system. As eloquently declared by Justice J.B. L. Reyes, "There is only one Supreme Court from whose
decision all other courts should take their bearings."
[31]


ACQUISITION OF PRIVATE RIGHTS

Petitioner, however, argues that Proclamation 237 itself recognizes that its effectivity is subject to
private rights, if any there be.

By way of a background, we recognized in Reyes that the property where the military reservation is
situated is forest land. Thus:

Before the military reservation was established, the evidence is inconclusive as to possession, for it is
shown by the evidence that the land involved is largely mountainous and forested. As a matter of
fact, at the time of the hearing, it was conceded that approximately 13,957 hectares of said land
consist of public forest. x x x (Emphasis supplied)
[32]


Concomitantly, we stated therein, and we remind petitioner now, that forest lands are not registrable
under CA 141.

[E]ven more important, Section 48[b] of CA No. 141, as amended, applies exclusively to public
agricultural land. Forest lands or area covered with forest are excluded. It is well-settled that forest
land is incapable of registration; and its inclusion in a title, whether such title be one issued using
the Spanish sovereignty or under the present Torrens system of registration, nullifies the
title. (Emphasis supplied).
[33]


However, it is true that forest lands may be registered when they have been reclassified as
alienable by the President in a clear and categorical manner (upon the recommendation of the
proper department head who has the authority to classify the lands of the public domain into
alienable or disposable, timber and mineral lands)
[34]
coupled with possession by the claimant as well
as that of her predecessors-in-interest. Unfortunately for petitioner, she was not able to produce
such evidence. Accordingly, her occupation thereof, and that of her predecessors-in-interest, could
not have ripened into ownership of the subject land. This is because prior to the conversion of forest
land as alienable land, any occupation or possession thereof cannot be counted in reckoning
compliance with the thirty-year possession requirement under Commonwealth Act 141 (CA 141) or
the Public Land Act.
[35]
This was our ruling in Almeda v. CA.
[36]
The rules on the confirmation of
imperfect titles do not apply unless and until the land classified as forest land is released through an
official proclamation to that effect. Then and only then will it form part of the disposable agricultural
lands of the public domain.
[37]


Coming now to petitioners contention that her private rights to the property, meaning her and her
predecessors possession thereof prior to the establishment of the FMMR, must be respected, the
same is untenable. As earlier stated, we had already recognized the same land to be public forest
even before the FMMR was established. To reiterate:

Before the military reservation was established, the evidence is inconclusive as to possession, for it is
shown by the evidence that the land involved is largely mountainous and forested. As a matter of
fact, at the time of the hearing, it was conceded that approximately 13,957 hectares of said land
consist of public forest. x x x

Therefore, even if possession was for more than 30 years, it could never ripen to ownership.
But even assuming that the land in question was alienable land before it was established as a military
reservation, there was nevertheless still a dearth of evidence with respect to its occupation by
petitioner and her predecessors-in-interest for more than 30 years. In Reyes, we noted:

Evidently, Melecio Padilla, having died on February 9, 1900, barely five (5) years after the inscription
of the informacion possessoria, could not have converted the same into a record of ownership
twenty (20) years after such inscription, pursuant to Article 393 of the Spanish Mortgage Law.

x x x

During the lifetime of Melecio Padilla, only a small portion thereof was cleared and cultivated
under the kaingin system, while some portions were used as grazing land. After his death, his
daughter, Maria Padilla, caused the planting of vegetables and had about forty (40) tenants for the
purpose. During the Japanese occupation, Maria Padilla died. x x x

x x x

A mere casual cultivation of portions of the land by the claimant, and the raising thereon of
cattle, do not constitute possession under claim of ownership. In that sense, possession is not
exclusive and notorious as to give rise to a presumptive grant from the State. While grazing livestock
over land is of course to be considered with other acts of dominion to show possession, the mere
occupancy of land by grazing livestock upon it, without substantial inclosures, or other permanent
improvements, is not sufficient to support a claim of title thru acquisitive prescription. The possession
of public land, however long the period may have extended, never confers title thereto upon the
possessor because the statute of limitations with regard to public land does not operate against the
State unless the occupant can prove possession and occupation of the same under claim of
ownership for the required number of years to constitute a grant from the State.
[38]


x x x
Furthermore, the fact that the possessory information title on which petitioner also bases her claim
of ownership was found to be inexistent in Reyes,
[39]
thus rendering its probative value suspect,
further militates against granting her application for registration.

NULLITY OF COMPROMISE AGREEMENT

On the compromise agreement between the parties, we agree with the CA that the same was null
and void.

An amicable settlement or a compromise agreement is in the nature of a contract and must
necessarily comply with the provisions of Article 1318 of the New Civil Code which provides:

Art. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.

Petitioner was not able to provide any proof that the consent of the Republic, through the
appropriate government agencies, i.e. the Department of Environment and Natural Resources, Land
Management Bureau, Land Registration Authority, and the Office of the President, was secured by
the OSG when it executed the agreement with her.
[40]
The lack of authority on the part of the OSG
rendered the compromise agreement between the parties null and void because although it is the
duty of the OSG to represent the State in cases involving land registration proceedings, it must do so
only within the scope of the authority granted to it by its principal, the Republic of the Philippines.
[41]


In this case, although the OSG was authorized to appear as counsel for respondent, it was never
given the specific or special authority to enter into a compromise agreement with petitioner. This is in
violation of the provisions of Rule 138 Section 23, of the Rules of Court which requires special
authority for attorneys to bind their clients.

Section 23. Authority of attorneys to bind clients. Attorneys have authority to bind their clients in
any case by any agreement in relation thereto made in writing, and in taking appeals, and in all
matters of ordinary judicial procedure. But they cannot, without special authority, compromise their
clients litigation, or receive anything in discharge of a clients claim but the full amount in cash.
(Emphasis supplied).

Moreover, the land in question could not have been a valid subject matter of a contract because,
being forest land, it was inalienable. Article 1347 of the Civil Code provides:

Art. 1347. All things which are not outside the commerce of men, including future things, may be
the object of a contract. All rights which are not intransmissible may also be the object of contracts.
No contract may be entered into upon future inheritance except in cases expressly authorized by law.
All services which are not contrary to law, morals, good customs, public order or public policy may
likewise be the object of a contract. (Emphasis supplied)

Finally, the Court finds the cause or consideration of the obligation contrary to law and against public
policy. The agreement provided that, in consideration of petitioners withdrawal of her application
for registration of title from that portion of the property located within the military reservation,
respondent was withdrawing its claim on that part of the land situated outside said reservation. The
Republic could not validly enter into such undertaking as the subject matter of the agreement was
outside the commerce of man.

PETITIONERS CONTEMPT
OF COURT

This Court, being the very institution that dispenses justice, cannot reasonably be expected to just sit
by and do nothing when it comes under attack.

That petitioners letter-motion constitutes an attack against the integrity of this Court cannot be
denied. Petitioner started her letter innocently enough by stating:

This is in response to your call for Moral Forces in order to redirect the destiny of our country
which is suffering from moral decadence, that to your mind, is the problem which confronts us.
(Inquirer, January 15, 2009, page 1)[.]


It, however, quickly progressed into a barely concealed resentment for what she perceived as this
Courts failure to exercise utmost prudence in rendering impartial justice in deciding her case.
Petitioner recounted:

I recently lost my case with the Supreme Court, G.R. N[o]. 181502, and my lawyer has done all that is
humanly possible to convince the court to take a second look at the miscarriage of justice that will
result from the implementation of the DISMISSAL in a MINUTE RESOLUTION of our Petition for
Review.

Pending before your Division (First Division) is a last plea for justice so that the case may be
elevated to the Supreme Court en banc. I hope the Court exercises utmost prudence in resolving the
last plea. For ready reference, a copy of the Motion is hereto attached as Annex A.

The issue that was brought before the Honorable Supreme Court involves the Decision of then Justice
Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio.

It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in which it
became possible for him to discharge the minimum requirement of due process, [i.e.] the ability of
the court to render impartial justice, because Mr. Justice Mendoza became the ponente of the
Court of Appeals Decision, reversing the findings of the trial court, notwithstanding the fact that he,
as Assistant Solicitor General, was the very person who appeared on behalf of the Republic, as the
oppositor in the very same land registration proceedings in which he lost. (Emphasis supplied).

Petitioner then indirectly hints that, when push comes to shove, she has no choice but to expose the
irregularity concerning the Mendoza decision to the media. This is evident in her arrogant declaration
that:

If leaked to the tri-media[,] my case will certainly evoke even greater spite from the public, and put
the Supreme Court in bad light.

But she hastens to add in the same breath that:

I must confess that I was tempted to pursue such course of action. I however believe that such an
action will do more harm than good, and even destroy the good name of Hon. Justice Mendoza.

Petitioner ends her letter by taking this Court to task:

. . . endeavor to ensure that cases such as mine do not happen again, so that the next person who
seeks justice will not experience the pain and frustration that I suffered under our judicial system.

When required to show cause why she should not be cited for contempt for her baseless
charges and veiled threats, petitioner answered:
x x x
The Letter of January 26, 2009 is not a veiled threat*.+ It was written in response to the call of
the Chief Justice for a moral revolution. Juxtaposed against the factual backdrop of the Alabang
Boys case and the Meralco *c+ase, involving Mr. Justice Jose L. Sabio which also enjoyed wide
publicity over the tri-media, petitioner felt that the facts of the said cases pale in comparison to the
facts of her case where the lawyer of her opponent eventually became justice of the appellate court
and ended up reversing the very decision in which he lost, in clear violation of her [c]onstitutional
[r]ight to fundamental fair play for no contestant in any litigation can ever serve as a judge without
transgression of the due process clause. This is basic.

Petitioner confesses that she may have been emotional in the delivery of her piece, because
correctly or incorrectly[,] she believes they are irrefutable. If in the course of that emotional delivery,
she has offended your honors sensibilities, she is ready for the punishment, and only prays that his
Court temper its strike with compassion as her letter to the Chief Justice was never written with a
view of threatening the Court.

x x x

Petitioner wrote the Chief Justice in order to obtain redress and correction of the inequity
bestowed upon her by destiny. It was never meant as a threat.

The Court now puts an end to petitioners irresponsible insinuations and threats of going public
with this case. We are not blind to petitioners clever and foxy interplay of threats alternating with
false concern for the reputation of this Court.

It is well to remind petitioner that the Court has consistently rendered justice with neither fear nor
favor. The disposition in this case was arrived at after a careful and thorough deliberation of the facts
of this case and all the matters pertaining thereto. The records of the case, in fact, show that all the
pertinent issues raised by petitioner were passed upon and sufficiently addressed by the appellate
court and this Court in their respective resolutions.

As to petitioners complaint regarding this Courts denial of her petition through a mere minute
resolution (which allegedly deprived her of due process as the Court did not issue a full-blown
decision stating the facts and applicable jurisprudence), suffice it to say that the Court is not duty-
bound to issue decisions or resolutions signed by the justices all the time. It has ample discretion to
formulate ponencias, extended resolutions or even minute resolutions issued by or upon its
authority, depending on its evaluation of a case, as long as a legal basis exists. When a minute
resolution (signed by the Clerk of Court upon orders of the Court) denies or dismisses a petition or
motion for reconsideration for lack of merit, it is understood that the assailed decision or order,
together with all its findings of fact and legal conclusions, are deemed sustained.
[42]

Furthermore, petitioner has doggedly pursued her case in this Court by filing three successive
motions for reconsideration, including the letter-motion subject of this resolution. This, despite our
repeated warnings that no further pleadings shall be entertained in this case. Her unreasonable
persistence constitutes utter defiance of this Courts orders and an abuse of the rules of procedure.
This, alongside her thinly veiled threats to leak her case to the media to gain public sympathy
although the tone of petitioners compliance with our show-cause resolution was decidedly subdued
compared to her earlier letters constitutes contempt of court.

In Republic v. Unimex,
[43]
we held:

A statement of this Court that no further pleadings would be entertained is a declaration that the
Court has already considered all issues presented by the parties and that it has adjudicated the case
with finality. It is a directive to the parties to desist from filing any further pleadings or motions. Like
all orders of this Court, it must be strictly observed by the parties. It should not be circumvented by
filing motions ill-disguised as requests for clarification.


A FEW OBSERVATIONS

If petitioner was, as she adamantly insists, only guarding her constitutional right to due process, then
why did she question the validity of the Mendoza decision late in the proceedings, that is, only after
her motion for reconsideration in the CA (for its subsequent annulment of the compromise
agreement) was denied? It is obvious that it was only when her case became hopeless that her
present counsel frantically searched for some ground, any ground to resuscitate his clients lost
cause, subsequently raising the issue. This is evident from a statement in her petition to this Court
that:

It is this fresh discovery by the undersigned counsel of the nullity of the proceedings of the Court of
Appeals that places in doubt the entire proceedings it previously conducted, which led to the
rendition of the February 26, 1992 Decision, a fact that escaped the scrutiny of applicant for
registration Flora L. Garcia, as well as her lawyer, Atty. Cayetano Dante Diaz, who died in 1993, and
the late Justice Fernando A. Santiago, who stood as counsel for Flora L. Garcias successor-in-
interest, herein petitioner, Florencia G. Garcia.
[44]
(Emphasis supplied).

The above cited statement does not help petitioners cause at all. If anything, it only proves how
desperate the case has become for petitioner and her counsel.

WHEREFORE, the letter-motion dated January 26, 2009 of petitioner is NOTED and is hereby treated
as a third motion for reconsideration. The motion is DENIEDconsidering that a third motion for
reconsideration is a prohibited pleading and the plea utterly lacks merit.

Petitioner is found GUILTY of contempt of court. Accordingly, a FINE of Five Thousand Pesos is hereby
imposed on her, payable within ten days from receipt of this resolution. She is hereby WARNED that
any repetition hereof shall be dealt with more severely.
Treble costs against petitioner.
SO ORDERED.

G.R. No. 168386 March 29, 2010
Cantoja V. Lim

R E S O L U T I O N

CARPIO, Acting C.J.:

The Case

This is a petition for review
[1]
of the Decision
[2]
dated 24 January 2005 and the Resolution dated
12 May 2005 of the Court of Appeals in CA-G.R. SP No. 76661.

The Facts

Petitioner in this case is the widow of the late Roberto Cantoja, Sr. (Cantoja), whom the DENR
awarded a Foreshore Lease Agreement over the foreshore area situated in Makar, General Santos
City. Under the Lease Contract
[3]
executed on 23 November 1990, the foreshore lease would expire
on 21 October 2015.

The facts as found by the Court of Appeals are as follows:

On 16 November 1989, the late Roberto Cantoja Sr. filed with the Office of the DENR, General
Santos City, an application for a Foreshore Lease Contract over an area situated in Makar, General
Santos City, per Survey Plan No. (XI-5B) 000002-D. Cantoja was awarded the Foreshore Lease
Agreement (FLA) on 23 November 1990.

On 4 March 1994, herein petitioner [Harry S. Lim] filed his protest docketed as DENR Case No.
5231, questioning the grant of the FLA to Cantoja. The protest was based on petitioners allegation
that Cantoja committed fraud and misrepresentation in declaring in his application that the subject
foreshore area adjoined his (Cantojas) property. To prove this allegation, petitioner presented his
Transfer Certificate of Title (TCT) No. 8423, over Lot 2-B, (LRC) Psd-210799, which adjoins the
foreshore area subject of the lease.

On 23 May 1995, Regional Executive Director Augustus L. Momongan of DENR XI, Davao City,
issued Memorandum/Order assigning the above entitled case to Special Investigator Romulo
Marohomsalic of the DENR Office No. XI-5D, General Santos City, for further investigation and
appropriate action Upon ocular inspection, during which petitioner failed to appear despite notice,
Special Investigator Marohomsalic found that Cantoja was in actual possession of the foreshore area
which was utilized as dock-board of the Cantojas Fishing Business. It was further ascertained, that
no portion thereof, has been occupied or possessed by any other person or persons, nor was there
any adverse claimant thereof.

On 12 December 1995, Geodetic Engineer Bernardo L. Soria, in compliance with the 27
October 1995 Order of the City Environment and Natural Resources Office (CENRO) XI-5B, submitted
his report stating, inter alia, that there was no overlapping of xxx Lot 2-B, (LRC) Psd-210799; and Fli-
XI-5b-000002-D xxx all shown in the prepared sketch xxx of (the) report.
On 1 February 1996, Director Momongan issued *an+ Order dismissing petitioners protest on
the ground that (i)n view of all the xxx circumstances and facts gathered during the investigative
proceedings, this Office finds that the foreshore area under survey plan Fli-XI-5B-000002-
D, covered by FLA No. (XI-5B) 000002 is separate and distinct from that parcel of land, identified as
Lot 2-B, Psd-210799, registered in the name of Claimant-Protestant Harry G. Lim. The petitioner,
concluded the Director, has no legal personality to question the veracity of the possession and
occupation of herein Applicant-Respondent over the foreshore area in question, as the same has
been legally and regularly acquired by Applicant-Respondent Roberto Cantoja, through public bidding
and Applicant-Respondents occupation and possession thereof is by virtue of a valid award granted
by the Department of Environment and Natural Resources (DENR).

On 5 May 1997, petitioner filed Motion for Reconsideration of the said Order.

Meanwhile, on 6 October 1997, the DENR through the Office of the Solicitor General instituted
Civil Case No. 6438 for annulment/cancellation of Patent No. 188030 and OCT No. P-14720 both
issued in the name of Jacinto Acharon, as well as petitioners TCT No. 8423. The suit was
anchored on the findings and recommendations of Special Investigator Romulo J. Marohomsalic that
the area in question is xxx partly foreshore and partly river bed of the Makar and therefore
inalienable.

On 2 May 2000, then DENR Secretary Antonio H. Cerilles, rendered a Decision reconsidering
the 1 February 1996 Order issued by Executive Director Momongan, and thereby cancelled the FLA
previously granted to Cantoja. Secretary Cerilles ratiocinated that:

Clearly, the foreshore area leased to Cantoja is bounded on the West by Lot 2, Psu-164268, of
which Lot 2-B (LRC) Psd-210799 of herein protestant is a portion. In other words, the said Lot 2-B
immediately adjoins the foreshore area leased to Cantoja, contrary to Roberto Cantojas statement
and declaration in his Application for Foreshore Lease that his properties adjoin the foreshore area
leased to him. Obviously, Mr. Cantoja could not be expected to state otherwise for this will result in
his outright disqualification as Cantoja could not have legal access to said foreshore area without
passing thru Lot-2-B of herein protestant.
(Rollo, p. 79)

A motion for reconsideration with supplemental grounds was subsequently filed by
Cantoja. Petitioner in turn filed his opposition.

On 16 August 2000, Secretary Cerilles issued Special Order No. 2000-820 for the Creation of a
Team to Conduct Investigation and Ocular Inspection of the Land Located in General Santos City
subject of DENR Case No. 5231. Said order was issued (i)n view of the request of the Office of the
Solicitor General for comment on the proposal of Mr. Harry Lim for amicable settlement of the case
xxx.
Without waiting, however, for the result of the investigation of said team, Secretary Cerilles, in
an Order dated 17 October 2000, set aside its 2 May 2000 Order and reinstated the FLA in favor of
Cantoja. The DENR Secretary also denied petitioners motion for reconsideration.

On appeal, the Office of the President rendered the herein assailed Decision affirming the 17
October 2000 Order of the DENR Secretary. Like the DENR Secretary, the Office of the President also
relied on the findings of Special Investigator Marohomsalic that the petitioners titled land is an
inalienable foreshore area which could not be subject of a valid patent or title.
[4]


Aggrieved, respondent Harry Lim (respondent) appealed to the Court of Appeals. On 24 January
2005, the Court of Appeals rendered a decision, setting aside the 27 March 2003 decision of the
Office of the President and reinstating the 2 May 2000 decision of the Secretary of the Department of
Environment and Natural Resources (DENR).
Hence, this petition for review.
The Ruling of the Court of Appeals The Court of Appeals reinstated the 2 May 2000 decision of
the DENR Secretary, which cancelled and rescinded the Foreshore Lease Contract covering the
foreshore area under survey plan Fli-XI-5B- 000002-D in favor of Cantoja.
The Court of Appeals held that Cantoja committed misrepresentation amounting to fraud in his
application for lease when he declared in his application that his lot adjoins that of the foreshore area
sought to be leased.
The Issue

The primary issue in this case is whether the Court of Appeals erred in cancelling the Foreshore
Lease Contract granted to Cantoja covering the foreshore area under survey plan Fli-XI-5B-000002-
D.
The Ruling of the Court
The petition has no merit.

It is undisputed that respondent is the registered owner of the land adjacent to the foreshore
area leased to Cantoja, which is covered by TCT No. 8423
[5]
issued on 20 January 1975. Respondents
predecessor-in-interest, Jacinto Acharon, was issued OCT No. P-14720 on 17 August 1961 by virtue of
a free patent grant. Thus, prior to Cantojas foreshore lease application on 16 November 1989 and
the grant of the foreshore lease contract on 23 November 1990, respondent already owned the land
adjacent to the foreshore land. The sketch plan
[6]
dated 12 December 1995 submitted by the
Geodetic Engineer clearly shows that respondents property is in between the foreshore land and
Cantojas property. As stated by the DENR Secretary in his Decision
[7]
dated 2 May 2000:

Clearly, the foreshore area leased to Cantoja is bounded on the West by Lot 2, Psu-164268, of
which Lot 2-B (LRC) Psd-210799 of herein protestant is a portion. In other words, the said Lot 2-B
immediately adjoins the foreshore area leased to Cantoja, contrary to Roberto Cantojas statement
and declaration in his Application for Foreclosure Lease that his properties adjoin the foreshore area
leased to him. Obviously, Mr. Cantoja could not be expected to state otherwise for this will result in
his outright disqualification as Cantoja would not have legal access to said foreshore area without
passing thru Lot 2-B of herein protestant.
[8]


Being the owner of the land adjoining the foreshore area, respondent is the riparian or littoral
owner
[9]
who has preferential right to lease the foreshore area
[10]
as provided under paragraph 32 of
the Lands Administrative Order No. 7-1, dated 30 April 1936, which reads:

32. Preference of Riparian Owner. The owner of the property adjoining foreshore lands, marshy
lands or lands covered with water bordering upon shores or banks of navigable lakes or rivers, shall
be given preference to apply for such lands adjoining his property as may not be needed for the
public service, subject to the laws and regulations governing lands of this nature, provided that he
applies therefor within sixty (60) days from the date he receives a communication from the Director
of Lands advising him of his preferential right.
The Court explained in Santulan v. The Executive Secretary
[11]
the reason for such grant of
preferential right to the riparian or littoral owner, thus:

Now, then, is there any justification for giving to the littoral owner the preferential right to
lease the foreshore land abutting on his land?

That rule in paragraph 32 is in consonance with Article 4 of the Spanish Law of Waters of 1866
which provides that, while lands added to the shore by accretions and alluvial deposits caused by the
action of the sea form part of the public domain, such lands, when they are no longer washed by the
waters of the sea and are not necessary for purposes of public utility, or for the established [sic] of
special industries, or for the coast guard service, shall be declared by the Government to be the
property of the owners of the estates adjacent thereto and as increment thereof.

In other words, article 4 recognizes the preferential right of the littoral owner (riparian
according to paragraph 32) to the foreshore land formed by accretions or alluvial deposits due to the
action of the sea.

The reason for that preferential right is the same as the justification for giving accretions to the
riparian owner, which is that accretion compensates the riparian owner for the diminutions which his
land suffers by reason of the destructive force of the waters. So, in the case of littoral lands, he who
loses by the encroachments of the sea should gain by its recession.
[12]
(Citations omitted)

In this case, Cantoja committed fraud when he misrepresented himself as the riparian or littoral
owner in his application for the foreshore lease. Under stipulation no. 15 of the Foreshore Lease
Agreement, any fraud or misrepresentation committed by the applicant is a ground for cancellation
or rescission of the Foreshore Lease Agreement.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 24 January 2005 and the
Resolution dated 12 May 2005 of the Court of Appeals in CA-G.R. SP No. 76661.

SO ORDERED.

G.R. No. 164527 August 15, 2007
Chavez V. NHA

Ponente: VELASCO, JR., J.
FACTS:
On August 5, 2004, former Solicitor General Francisco Chavez, filed an instant petition raising
constitutional issues on the JVA entered by National Housing Authority and R-II Builders, Inc.
On March 1, 1988, then-President Cory Aquino issued Memorandum order No. (MO) 161 approving
and directing implementation of the Comprehensive and Integrated Metropolitan Manila Waste
Management Plan. During this time, Smokey Mountain, a wasteland in Tondo, Manila, are being
made residence of many Filipinos living in a subhuman state.
As presented in MO 161, NHA prepared feasibility studies to turn the dumpsite into low-cost housing
project, thus, Smokey Mountain Development and Reclamation Project (SMDRP), came into
place. RA 6957 (Build-Operate-Transfer Law) was passed on July 1990 declaring the importance of
private sectors as contractors in government projects. Thereafter, Aquino proclaimed MO 415
applying RA 6957 to SMDRP, among others. The same MO also established EXECOM and TECHCOM
in the execution and evaluation of the plan, respectively, to be assisted by the Public Estates
Authority (PEA).
Notices of public bidding to become NHAs venture partner for SMDRP were published in newspapers
in 1992, from which R-II Builders, Inc. (RBI) won the bidding process. Then-President Ramos
authorized NHA to enter into a Joint Venture Agreement with RBI.
Under the JVA, the project involves the clearing of Smokey Mountain for eventual development into a
low cost housing complex and industrial/commercial site. RBI is expected to fully finance the
development of Smokey Mountain and reclaim 40 hectares of the land at the Manila Bay Area. The
latter together with the commercial area to be built on Smokey Mountain will be owned by RBI as
enabling components. If the project is revoked or terminated by the Government through no fault of
RBI or by mutual agreement, the Government shall compensate RBI for its actual expenses incurred
in the Project plus a reasonable rate of return not exceeding that stated in the feasibility study and in
the contract as of the date of such revocation, cancellation, or termination on a schedule to be
agreed upon by both parties.
To summarize, the SMDRP shall consist of Phase I and Phase II. Phase I of the project involves
clearing, levelling-off the dumpsite, and construction of temporary housing units for the current
residents on the cleared and levelled site. Phase II involves the construction of a fenced incineration
area for the on-site disposal of the garbage at the dumpsite.
Due to the recommendations done by the DENR after evaluations done, the JVA was amended and
restated (now ARJVA) to accommodate the design changes and additional work to be done to
successfully implement the project. The original 3,500 units of temporary housing were decreased to
2,992. The reclaimed land as enabling component was increased from 40 hectares to 79 hectares,
which was supported by the issuance of Proclamation No. 465 by President Ramos. The revision also
provided for the 119-hectare land as an enabling component for Phase II of the project.
Subsequently, the Clean Air Act was passed by the legislature which made the establishment of an
incinerator illegal, making the off-site dumpsite at Smokey Mountain necessary. On August 1, 1998,
the project was suspended, to be later reconstituted by President Estrada in MO No. 33.
On August 27, 2003, the NHA and RBI executed a Memorandum of Agreement whereby both parties
agreed to terminate the JVA and subsequent agreements. During this time, NHA reported that 34
temporary housing structures and 21 permanent housing structures had been turned over by RBI.
ISSUES:
1. Whether respondents NHA and RBI have been granted the power and authority to reclaim
lands of the public domain as this power is vested exclusively in PEA as claimed by petitioner
2. Whether respondents NHA and RBI were given the power and authority by DENR to reclaim
foreshore and submerged lands
3. Whether respondent RBI can acquire reclaimed foreshore and submerged lands considered
as alienable and outside the commerce of man
4. Whether respondent RBI can acquire reclaimed lands when there was no declaration that
said lands are no longer needed for public use
5. Whether there is a law authorizing sale of reclaimed lands
6. Whether the transfer of reclaimed lands to RBI was done by public bidding
7. Whether RBI, being a private corporation, is barred by the Constitution to acquire lands of
public domain
8. Whether respondents can be compelled to disclose all information related to the SMDRP
9. Whether the operative fact doctrine applies to the instant position
HELD:
1. Executive Order 525 reads that the PEA shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. This does not mean that it shall be responsible for all. The requisites for a
valid and legal reclamation project are approval by the President (which were provided for
by MOs), favourable recommendation of PEA (which were seen as a part of its
recommendations to the EXECOM), and undertaken either by PEA or entity under contract
of PEA or by the National Government Agency (NHA is a government agency whose
authority to reclaim lands under consultation with PEA is derived under PD 727 and RA
7279).
2. Notwithstanding the need for DENR permission, the DENR is deemed to have granted the
authority to reclaim in the Smokey Mountain Project for the DENR is one of the members of
the EXECOM which provides reviews for the project. ECCs and Special Patent Orders were
given by the DENR which are exercises of its power of supervision over the
project. Furthermore, it was the President via the abovementioned MOs that originally
authorized the reclamation. It must be noted that the reclamation of lands of public domain
is reposed first in the Philippine President.
3. The reclaimed lands were classified alienable and disposable via MO 415 issued by President
Aquino and Proclamation Nos. 39 and 465 by President Ramos.
4. Despite not having an explicit declaration, the lands have been deemed to be no longer
needed for public use as stated in Proclamation No. 39 that these are to be disposed to
qualified beneficiaries. Furthermore, these lands have already been necessarily reclassified
as alienable and disposable lands under the BOT law.
5. Letter I of Sec. 6 of PD 757 clearly states that the NHA can acquire property rights and
interests and encumber or otherwise dispose of them as it may deem appropriate.
6. There is no doubt that respondent NHA conducted a public bidding of the right to become its
joint venture partner in the Smokey Mountain Project. It was noted that notices were
published in national newspapers. The bidding proper was done by the Bids and Awards
Committee on May 18, 1992.
7. RA 6957 as amended by RA 7718 explicitly states that a contractor can be paid a portion as
percentage of the reclaimed land subject to the constitutional requirement that only
Filipino citizens or corporation with at least 60% Filipino equity can acquire the same. In
addition, when the lands were transferred to the NHA, these were considered Patrimonial
lands of the state, by which it has the power to sell the same to any qualified person.
8. This relief must be granted. It is the right of the Filipino people to information on matters of
public concerned as stated in Article II, Sec. 28, and Article III, Sec. 7 of the 1987
Constitution.
9. When the petitioner filed the case, the JVA had already been terminated by virtue of MOA
between RBI and NHA. The properties and rights in question after the passage of around 10
years from the start of the projects implementation cannot be disturbed or questioned. The
petitioner, being the Solicitor General at the time SMDRP was formulated, had ample
opportunity to question the said project, but did not do so. The moment to challenge has
passed.

G.R. No. L-32941 July 31, 1973
Republic V. Marcos
FERNANDO, J.:
A perusal, even the most cursory, of this petition for review on certiorari, would make evident its
being impressed with merit. Respondent Judge, under color of a statutory provision
1
and at the
instance of private respondents, did re-open Civil Registration Case No. 1 of the Court of First
Instance of Baguio establishing the Baguio Townsite Reservation, promulgated as far back as
November 13, 1922, thus enabling private respondents to apply for the registration of an area of
74,017 square meters inside the Camp John Hay Leave and Recreation Center. In the decision now
sought to be set aside in this suit dated November 9, 1968, its registration therefor was ordered in
favor of the aforesaid private respondents. Petitioner Republic of the Philippines thus has a legitimate
grievance. Republic v. Marcos,
2
a 1969 a decision, speaks authoritatively. It does provide a firm, not
to say rocklike foundation. Respondent Judge was without power to re-open the aforesaid Civil
Reservation Case No. 1 which was not a cadastral proceeding. What is more, it is undeniable that the
land in question, being a part of a duly established military camp or reservation, cannot be thus
ordered registered in favor of private respondents. We have to grant the petition.
It would appear from the facts that on November 12, 1966, respondents, the Carantes heirs, filed
under Civil Reservation Case No. 1
3
of the Court of First Instance of Baguio City a petition for the re-
opening of said proceeding to have them declared owners, and for the registration in their favor of
four lots with a total area of 74,017 square meters therein described. Then on December 14, 1966,
respondent Judge issued an order requiring the publication and posting of notices thereof. The
Director of Lands duly opposed, as a report of an investigator of his office was that the area sought to
be registered is inside Camp John Hay in Baguio City. This notwithstanding, on November 9, 1968, the
respondent Judge rendered his decision, the dispositive portion of which reads: "[Wherefore], this
Court hereby orders the registration of this parcel of land, situated in Res. Sec. "J", Baguio City,
identified as Lots 1, 2, 3, and 4 as shown on survey plan PSU 223402, and described in its Technical
Descriptions and Surveyor's Certificate, with a combined total area of 74,017 square meters, more or
less, in the names of the petitioners, pro-indiviso, namely, [Alson Carantes], married to Monica
Pedro, [Eduardo Carantes], married to Jesusa Rosal, and [Bill Carantes], married to Budaet Onias, all
of legal ages, Filipino citizens, with residence and postal addresses at Loakan, Baguio City,
Philippines."
4
The efforts exerted by the Director of Lands and the City of Baguio to appeal said
decision, seasonably made, did not prosper, respondent Judge being of the belief that "the proper
party to appeal should be Camp John Hay." Unfortunately, with the Solicitor-General not having been
informed of what did transpire, such denial went unchallenged.
5
It was not until August 22, 1969 that
the Solicitor-General entered his appearance in the case and filed a motion to annul the decision
based on the ground of lack of jurisdiction of the court over the subject matter of the proceedings as
the land in question is part of a duly established military reservation. Such motion was denied by
respondent Judge on December 8, 1969. It must be noted that the location of the lot inside Camp
John Hay is not a subject of dispute. Apparently, the respondent Judge in refusing to set aside his
decision was impressed by the claim that the private respondents had been in possession "since the
Spanish regime," and thus came within the protection of the words annotated on all survey plans of
Camp John Hay, to wit: "subject to prior and existing private rights."
6

What is immediately apparent is that even if the above decision were not flawed by a grave infirmity,
it could not survive after the decision of this Court in Republic v. Marcos,
7
as noted in the brief for
private respondents, an action against the very same judge whose actuation over a matter not
dissimilar was challenged and challenged successfully. For the absence of jurisdiction under such
statutory provision from which he would derive his competence as well as the location of the
disputed area inside a military reservation deprived the decision now sought to be nullified of the
slightest claim to validity. Nor could private respondents derive comfort from the doctrine of
estoppel which as they should be the first to realize cannot operate against the state. Accordingly, as
noted at the outset, we grant the petition.
1. The question of jurisdiction was squarely raised and passed upon in the aforesaid Republic v.
Marcos. Thus: "Republic Act No. 931 speaks in a manner far from ambiguous. It is quite explicit and
categorical. Only persons "claiming to parcels of land that have been the object of cadastral
proceedings' are granted the right to petition for a re-opening thereof if the other conditions named
therein are successfully met. It cannot admit of doubt, therefore, that if the parcels of land were not
the object of cadastral proceedings, then this statute finds no application. Considering that as far
back as October 10, 1910, the then President of the United States, William H. Taft, issued an
executive order reserving for naval purposes the lots now disputed, they could not have been the
object of the cadastral proceedings involving the Baguio townsite reservation, decided only on
November 13, 1922."
8
It was then stated in the opinion: "The Cadastral Act was enacted on February
11, 1913, taking effect on its passage. As is made clear in the first section thereof, when public
interest requires that titles to any land be settled and adjudicated, in the opinion of the then
executive, the Governor General, he could order the Director of Lands, to make a survey and plan of
such lands. Clearly, it does not include the survey of lands declared as reservations."
9

Its historical background was next passed upon: "An earlier act, enacted as far back as 1903,
specifically governs the subject matter of reservations. As provided therein: "All lands or buildings, or
any interests therein, within the Philippine Islands lying within the boundaries of the areas now or
hereafter set apart and declared to be military reservations shall be forthwith brought under the
operations of the Land Registration Act, and such of said lands, buildings, and interests therein as
shall not be determined to be public lands shall become registered land in accordance with the
provisions of said Land Registration Act, under the circumstances hereinafter stated." The validity of
this statute was sustained as against the allegation that there was a violation of the due process
clause, in a 1910 decision, Jose v. Commander of the Philippine Squadron."
10
Finally, an earlier case of
decisive significance was referred to: "What is even more conclusive as to the absence of any right on
the part of the private respondents to seek a re-opening under Republic Act No. 931 is our ruling
in Government v. Court of First Instance of Pampanga, a 1926 decision. We there explicitly held: "The
defendant's contention that the respondent court, in a cadastral case, has jurisdiction to order the
registration portions of a legally established military reservation cannot be sustained. The
establishment of military reservations is governed by Act No. 627 of the Philippine Commission and
Section 1 of that Act provides that "All lands or buildings, or any interest therein, within the Philippine
Islands lying within the boundaries of the areas now or hereafter set apart and declared to be military
reservations shall be forthwith brought under the operations of the Land Registration
Act. ... ." ' "
11

This Court could conclude therefore that as contended by petitioner Republic, respondent Judge in
that case was devoid "of jurisdiction to pass upon the claim of private respondents invoking the
benefits of Republic Act No. 931."
12
So it is in the present case. The absence of jurisdiction is equally
clear.
2. That Republic v. Marcos is likewise an insuperable bar to the re-opening sought by private
respondents is made clear by the latter portion of the opinion. Thus: "This lack of jurisdiction on the
part of respondent Judge is made more patent by another specific restriction of the right of a person
to seek re-opening under this statute. For the power of the Court to order such re-opening is limited
'to such of said parcels of land as have not been alienated, reserved, leased, granted, or otherwise
provisionally or permanently disposed of by the Government. ... .' Included in the petition is an
executive order of then President Herbert Hoover of June 19, 1929 declaring to be a naval reservation
of the Government of the United States 'that tract of land known as lot no. 141, residence Section D,
Baguio naval reservation, heretofore reserved for naval
purposes ... .' If there were still any lingering doubt, that ought to be removed by this reaffirmation of
a presidential determination, then binding and conclusive as we were under American sovereignty,
that the lot in question should be a naval reservation."
13

3. The state of the law could thus be summarized: "The private respondents are thus bereft of any
right which they could assert under Republic Act No. 931. Such an enactment is the basis of whatever
standing that would justify their reliance on the specific power granted courts of first instance to re-
open cadastral proceedings. Such jurisdiction is thus limited and specific. Unless a party can make it
manifest by express language or a clear implication from the wording of the statute too strong to be
resisted, he may not set in motion the judicial machinery under such specific grant of authority. This,
private respondents have failed to do as the statute in terms that are crystal clear and free from
ambiguity denies them such a right. Petitioners have made out their case for certiorari and
prohibition."
14

Private respondents, however, would not give up without an attempt to escape from the operation of
a decision that is controlling. Not that it did them any good. Their counsel, with as show of diligence,
would cite authorities on estoppel. He ought to have known better. He should have realized that
resort to them would be without avail. For, as Justice J.B.L. Reyes, speaking for this Court, in Luciano
v. Estrella,
15
categorically declared, "it is a well known and settled rule in our jurisdiction that the
Republic, or its government, is usually not estopped by mistake or error on the part of its officials or
agents."
16
In an earlier case, Republic v. Philippine Rabbit Lines, Inc.,
17
there was an enunciation of
such a principle in this wise: "Thus did the lower court, as pointed out by the then Solicitor General,
conclude that the government was bound by the mistaken interpretation arrived at by the national
treasurer and the auditor general. It would consider estoppel as applicable. That is not the law.
Estoppel does not lie. Such a principle dates back to Aguinaldo de Romero v. Director of Lands, a 1919
decision."
18

Nor is this all. An indication that one's appreciation of controlling doctrine leaves something to be
desired is bad enough. What is worse is the impression yielded of a failure to discern the thought that
lies behind the 1969 decision of Republic v. Marcos.
19
It is this: the state as a persona in law is the
juridical entity, which is the source of any asserted right to ownership in land under the basic doctrine
embodied in the 1935 Constitution as well as the present charter. It is charged moreover with the
conservation of such patrimony.
20
There is need therefore of the most rigorous scrutiny before
private claims to portions thereof are judicially accorded recognition, especially so where the matter
is sought to be raked up anew after almost fifty years. Such primordial consideration, not the
apparent carelessness, much less the acquiescence of public officials, is the controlling norm. Nor is
there anything unjust in such an approach as the alleged deprivation of a private right without
justification by the government is not remediless, where there is persuasive proof that such is the
case. The point of this decision as well as the earlier Republic v. Marcos is that the procedure
followed by private respondents is not the road to such an objective even on the assumption, purely
hypothetical, that there is basis in law for what is hoped for and aimed.
WHEREFORE, the writ of certiorari is granted annulling and setting aside the decision of respondent
Judge, dated November 9, 1968, which is declared to be without any force or effect as having been
issued without jurisdiction. Costs against private respondents.
Makalintal, Actg. C.J., Castro, Teehankee, Barredo and Esguerra, JJ., concur.
Makasiar and Antonio, JJ., took no part.
Zaldivar, J., is on leave.

G.R. No. 146459 June 8, 2006
Heirs of Dicman V. Cario

D E C I S I O N
AUSTRIA-MARTINEZ, J.:
This refers to the petition for review on certiorari under Rule 45 of the Rules of Court questioning the
Decision
1
dated June 30, 2000 of the Court of Appeals (CA) in C.A.-G.R. CV No. 33731, which affirmed
in toto the Decision dated November 28, 1990 of the Regional Trial Court (RTC), Branch 7 (Baguio
City), La Trinidad, Benguet; and the CA Resolution dated December 15, 2000 which denied the
petitioners motion for reconsideration.
The petition originated from an action for recovery of possession of the eastern half of a parcel of
land situated in Residence Section "J", Camp Seven, Baguio City, consisting of 101,006 square meters,
more or less, and identified as Lot 46, Ts-39, Plan SWO-37115.
2

The antecedent facts are clear:
The subject land, at the turn of the 20th century, had been part of the land claim of Mateo Cario.
Within this site, a sawmill and other buildings had been constructed by H.C. Heald in connection with
his lumber business. On March 14, 1916, H.C. Heald sold the buildings to Sioco Cario, son of Mateo
Cario and grandfather of private respondent Jose Cario. Sioco Cario then took possession of the
buildings and the land on which the buildings were situated.
Ting-el Dicman,
3
predecessor-in-interest of the petitioners, namely, Ernesto Dicman, Paul Dicman,
Florence Dicman, Babing Cosil, Feliciano Torres, Cristina Alawas, Emily Torres and Tomasito Torres,
and resident of Atab, a sitio within the City of Baguio but located at some distance from the land in
controversy, had been employed by Sioco Cario as his cattle herder. On the advice of his lawyers,
and because there were already many parcels of land recorded in his name,
4
Sioco Cario caused the
survey of the land in controversy in the name of Ting-el Dicman.
On October 22, 1928, Ting-el Dicman executed a public instrument entitled "Deed of Conveyance of
Part Rights and Interests in Agricultural Land" with Sioco Cario. The deed reads:
DEED OF CONVEYANCE OF PART RIGHTS AND
INTERESTS IN AGRICULTURAL LAND.
KNOW ALL PERSONS BY THESE PRESENTS:
That I, Ting-el Diac-man, of legal age, widower, and resident of the sitio known as "Atab", near Camp
Seven, City of Baguio, Philippine Islands, DO HEREBY STATE, viz:
That I am the applicant for a free-patent of a parcel of land (public), having a surface of over ten (10)
hectares, surveyed by the District Land Office of Baguio for me, and located in the place known as
Camp Seven, Baguio;
That to-date I have not as yet received the plan for said survey;
That Mr. Sioco Cario has advanced all expenses for said survey for me and in my name, and also all
other expenses for the improvement of said land, to date;
That for and in consideration of said advance expenses, to me made and delivered by said Mr. Sioco
Cario, I hereby pledge and promise to convey, deliver and transfer unto said Sioco Cario, of legal
age, married to Guilata Acop, and resident of Baguio, P.I., his heirs and assigns, one half (1/2) of my
title, rights, and interest to and in the aforesaid parcel of land; same to be delivered, conveyed and
transferred in a final form, according to law, to him, his heirs and assigns, by me, my heirs, and
assigns, as soon as title for the same is issued to me by proper authorities.
That this conveyance, transfer, or assignment, notwithstanding its temporary nature, shall have legal
force and effect; once it is approved by the approving authorities all the final papers and documents,
this instrument shall be considered superseded.
After I have received my title to said parcel of land I bind myself, my heirs and assigns, to execute the
final papers and forward same for approval of the competent authorities at Mr. Sioco Carios
expense.
WITNESS MY HAND in the City of Baguio, P.I., this, the 22nd day of October, 1928, A.D.
his right thumbmark
5

TING-EL DIAC-MAN
After the execution of the foregoing deed, Sioco Cario, who had been in possession of the land in
controversy since 1916, continued to stay thereon.
On January 10, 1938, Sioco Cario executed, as seller, a public instrument entitled "Deed of Absolute
Sale" covering the subject land and its improvements with his son, Guzman Cario, as buyer. The
contract states in part:
x x x for and in consideration of the sum of ONE PESO (P 1.00) Philippine Currency and other valuable
considerations which I had received from my son, Guzman A. Cario x x x have ceded, transferred and
conveyed as by these presents do hereby cede, convey and transfer unto the [sic] said Guzman A.
Cario, his heirs, executors, administrators and assigns, all my rights, title, interests in and
participation to that parcel of land (public) covered by an application for free patent with a surface
area of Ten (10) hectares, surveyed by the District Land Office of Baguio in the name of Pingel
Dicman, and who ceded, conveyed and transferred one half of his title, rights and interests to me
under an instrument executed by the said owner in the city of Baguio, Philippines, on the 22nd day of
October, 1928 A.D. and duly ratified before Notary Public x x x together with all improvements
therein, consisting of oranges, mangoes, and other fruit trees and a building of strong materials (half
finished) x x x, which building was purchased by me from H.C. Heald on March 14, 1916, free from all
liens and encumbrances, with full rights and authority to the said Guzman A. Cario to perfect his
claim with any government agency the proper issuance of such patent or title as may be permitted to
him under existing laws.
x x x x
6

In a letter dated January 15, 1938, Sioco Cario asked his son, Guzman Cario, who had been doing
business in Damortis, Sto. Tomas, La Union, to take possession of the subject land and
building.
7
Guzman Cario moved to Baguio as requested and occupied the property. Evidence was
adduced in the RTC to the effect that Guzman Cario took possession of the property publicly,
peacefully, and in the concept of owner: the directory of Baguio Telephones published in October
1940 lists the residence of Guzman A. Cario at Camp 7, Baguio City, along with his telephone
number; pictures were taken of him and his family, including the private respondent who was then an
infant, depicting the property in the background; U.S. Army authorities obtained permission from
Guzman Cario to use a part of the land in question after the war; he introduced various
improvements on the property over the years and exercised acts of ownership over them; he
permitted the use of portions of the land to Governor Eulogio Rodriguez, Jr. and the Boy Scouts of
Rizal Province; he leased out portions of the land to Bayani Pictures, Inc.; and his neighbors confirmed
the possession and occupation over the property of Guzman Cario and, after him, his son, herein
private respondent Jose Cario. These findings of fact were either confirmed or uncontroverted by
the CA.
8

On July 27, 1954, Guzman Cario had the entire Lot 46 resurveyed so as to indicate the half portion
that belonged to him and the other half that belonged to the petitioners. The resurvey evenly divided
the lot into Lot 76-A and 76-B, and purportedly indicated that Lot 76-A, consisting of 50,953 square
meters, belonged to the petitioners, while Lot 76-B, also consisting of 50,953 square meters, formerly
pertained to Sioco Cario and, later, to Guzman Cario. Additionally, the resurvey indicated the
house where private respondent Jose Cario resided and, before him, where his predecessors-in-
interest, Sioco and Guzman Cario, also resided.
On May 23, 1955, Guzman Cario filed a Free Patent Application over the land in question. The
application was given due course, but Guzman later withdrew it when he decided to file his
opposition to the petition later filed by the heirs of Ting-el Dicman. This petition, entitled "Petition of
the Heirs of Dicman to Reopen Civil Reservation Case No. 1, G.L.R.O. 211," was filed by Felipe Dicman,
Bobing Dicman and Cating Dicman, in their capacity as compulsory heirs of Ting-el Dicman on April
24, 1959 with the Court of First Instance of Baguio. The petition sought to establish ownership over
Lot 76-A and Lot 76-B which, taken together, covered an area of 10.1006 hectares. Guzman Cario
opposed the petition insofar as he insisted ownership over Lot 76-B, the land in controversy. The
Estate of Sioco Cario likewise filed an opposition.
On March 6, 1963, the trial court rendered a partial judgment and confirmed that the title over Lot
76-A belonged to the heirs of Ting-el Dicman, there having been no adverse claim. But as to Lot 76-B,
the trial court found it necessary to hold further hearing in order to decide on the adverse claims of
the parties.
Meanwhile, on January 8, 1960, while the foregoing petition was pending in the trial court, President
Carlos P. Garcia issued Proclamation No. 628 "excluding from the operation of the Baguio Townsite
Reservation certain parcels of public land known as Igorot Claims situated in the City of Baguio and
declaring the same open to disposition under the provisions of Chapter VII of the Public Land Act."
The Proclamation further provided that the "Igorot Claims" enumerated therein shall be "subject to
the condition that except in favor of the government or any of its branches, units, or institutions,
lands acquired by virtue of this proclamation shall not be encumbered or alienated within a period of
fifteen years from and after the date of issuance of patent." One such claim pertained to the "Heirs of
Dicman," to wit:
Name Lot No. Survey Plan Residence Section Area (Sq.m.)
Heirs of 46 Swo-37115 "J" 101,006
Dicman
Before the trial court could dispose of the case, the Supreme Court promulgated Republic v.
Marcos
9
which held that Courts of First Instance of Baguio have no jurisdiction to reopen judicial
proceedings on the basis of Republic Act No. 931. As a consequence, on July 28, 1978, the trial court
dismissed the petition to reopen Civil Reservation Case No. 1, G.L.R.O. 211 insofar as Lot 76-B was
concerned, and the certificate of title issued pursuant to the partial decision involving Lot 76-A was
invalidated. The trial court stated that the remedy for those who were issued titles was to file a
petition for revalidation under Presidential Decree No. 1271, as amended by Presidential Decrees No.
1311 and 2034.
After the dismissal of the case, Guzman Cario was left undisturbed in his possession of the subject
property until his death on August 19, 1982. His remains are buried on the land in question, next to
the large house purchased in 1916 by his father, Sioco Cario (the grandfather of private respondent),
from H.C. Heald. Guzmans widow and son, private respondent Jose Sioco C. Cario, continued
possession of the subject property.
10

On April 20, 1983, petitioners, suing as compulsory heirs of Ting-el Dicman, revived the foregoing
case by filing a complaint for recovery of possession with damages involving the subject property
with the RTC, docketed as Civil Case No. 59-R. As earlier stated, petitioners, then complainants,
originally sought to recover possession of the eastern half of the parcel of land situated in Residence
Section "J", Camp Seven, Baguio City, consisting of 101,006 square meters, more or less, and
identified as Lot 46, Ts-39, Plan SWO-37115.
Petitioners, then plaintiffs, averred in their complaint:
10. That however, this Honorable Court was not able to decide the [ ] petition for reopening as far as
the remaining eastern half portion of the above-described property is concerned due to the fact that
the said petition was dismissed for alleged lack of jurisdiction; x x x
11. That because of the above-mentioned dismissal, the conflict between herein plaintiffs and
defendant over the half eastern portion of the above-described property which was one of the issues
supposed to be decided in the said judicial reopening case remains undecided;
12. That after the dismissal of the abovementioned petition and before the dispute between herein
plaintiffs and defendant over the eastern half portion of the above-described property, defendant
unlawfully and illegally continue to occupy portion [sic] of the above-described property to the clear
damage and prejudice of herein plaintiffs;
13. That the defendant has no valid claim of ownership and possession over any of the portions of the
above-described property;
14. That plaintiffs and their predecessors-in-interest have been religiously paying the realty taxes
covering the above-described property x x x
11

Private respondent Jose Cario filed his answer and prayed for dismissal. He alleged that his
predecessors-in-interest had acquired the land by onerous title through the "Deed of Absolute Sale"
dated January 10, 1938 executed by his grandfather, Sioco Cario, as seller, and his father, Guzman
Cario, as buyer; that the property was earlier acquired by Sioco Cario by virtue of the "Deed of
Conveyance of Part Rights and Interests in Agricultural Land" dated October 22, 1928 executed
between Sioco Cario and Ting-el Dicman; and that he has been in possession of the subject property
for 55 years peacefully, in good faith, and in concept of owner and therefore perfected title over the
same through acquisitive prescription.
On June 13, 1983, the administratrix of the Estate of Sioco Cario filed a motion to intervene with the
RTC. On July 1, 1983, the RTC granted said motion. On July 11, 1983, the Estate of Sioco Cario filed
its Complaint-in-Intervention, praying for quieting of title among the adverse claimants.
The RTC, through an ocular inspection on February 15, 1984, found that the larger building still stands
on the land in controversy and, together with the surrounding area, constituted the residence and
was in the possession of private respondent and his family.
On November 28, 1990, the RTC rendered its decision in favor of private respondent, the dispositive
portion of which states:
IN VIEW OF THE FOREGOING, judgment is hereby rendered as follows:
1. Plaintiffs complaint is hereby DISMISSED;
2. Plaintiffs-Intervenors complaint-in-intervention is hereby dismissed;
3. Defendant is hereby declared the lawful possessor and as the party who has the better right over
the land subject matter [sic] of this action and as such he may apply for the confirmation of his title
thereto in accordance with law (R.A. No. 8940
12
)*.+ Defendants counterclaim is dismissed;
4. Costs is [sic] adjudged against the plaintiff and plaintiff-intervenor.
SO ORDERED.
To support its ruling, the RTC found that the tax declarations and their revisions submitted as
evidence by the petitioners made no reference to the land in question;
13
that no tax declaration over
the land declared in the name of the Estate of Sioco Cario had been submitted as evidence, and that
the intervenor-estate presented tax declarations over the building only; that it was Guzman Cario
alone who declared for taxation purposes both the land and the improvements thereon in his
name;
14
that there is no evidence to the
effect that petitioners ever filed any action to challenge the validity of the "Deed of Conveyance of
Part Rights and Interests in Agricultural Land" dated October 22, 1928; that even assuming that this
instrument may be invalid for whatever reason, the fact remains that Sioco Cario and his successors-
in-interest had been in possession of the subject property publicly, adversely, continuously and in
concept of owner for at least 55 years before the filing of the action;
15
that Siocos successor, Guzman
Cario, had been in open and continuous possession of the property in good faith and in the concept
of owner from 1938 until his death in 1982 and, hence, the Estate of Sioco Cario has lost all rights to
recover possession from Guzman Cario or his heirs and assigns; and that although the Estate of
Sioco Cario attempted to assail the genuineness and due execution of the "Deed of Absolute Sale"
dated January 10, 1938 executed by Sioco Cario in favor of his son, Guzman Cario, the challenge
failed since no evidence had been adduced to support the allegation of forgery.
16

On January 23, 1991, petitioners seasonably filed their notice of appeal. The RTC, however, denied
the motion for reconsideration and motion to admit appeal filed by the Estate of Sioco Cario on July
3, 1991 for being filed out of time.
Petitioners raised the following issues before the Court of Appeals:
1. THE HONORABLE TRIAL COURT SERIOUSLY ERRED IN NOT CONSIDERING THE DOCUMENTARY
EVIDENCE OF THE PLAINTIFFS-APPELLANTS AND THE STRAIGHTFORWARD DECLARATIONS OF THEIR
WITNESS.
2. THE HONORABLE TRIAL COURT ERRED IN CONSIDERING THE DEED OF CONVEYANCE [OF] PART
RIGHTS AND INTERESTS IN AGRICULTURAL LAND EXECUTED BY DICMAN IN FAVOR OF SIOCO CARIO
DESPITE ITS NULLITY.
3. THE HONORABLE TRIAL COURT ERRED IN DECLARING DEFENDANT-APPELLEE TO HAVE A BETTER
RIGHT TO THE PROPERTY IN DISPUTE.
4. THE HONORABLE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT AND NOT GRANTING THE
RELIEFS PRAYED FOR THEREIN.
On June 30, 2000, the CA dismissed the petition and affirmed in toto the ruling of the RTC. On
December 15, 2000, the CA issued a Resolution denying petitioners motion for reconsideration.
The CA based its ruling on the following reasons: that the petitioners raised for the first time on
appeal the issue on whether the "Deed of Conveyance of Part Rights and Interests in Agricultural
Land" is void ab initio under Sections 145 and 146 of the Administrative Code of Mindanao and
Sulu
17
(which was made applicable later to the Mountain Province and Nueva Viscaya by Act 2798, as
amended by Act 2913, and then to all other cultural minorities found within the national territory by
virtue of Section 120 of the Public Land Act
18
) and, hence, cannot be considered by the reviewing
court;
19
that, even if this issue were considered, the records fail to show that Ting-el Dicman, though
an Igorot, is a non-Christian and, hence, the foregoing laws are not applicable;
20
that there was
sufficient proof of consideration for the said deed;
21
and that even if the deed were a mere contract
to sell and not an absolute sale, under Borromeo v. Franco
22
the obligation on the part of the
purchaser to perfect the title papers within a certain time is not a condition subsequent nor essential
to the obligation to sell, but rather the same is an incidental undertaking the failure to comply
therewith not being a bar to the sale agreed upon.
23

On February 12, 2001, petitioners, through newly retained counsel, filed their petition for review
on certiorariunder Rule 45.
Petitioners raise the following grounds for the petition:
A.
THE COURT OF APPEALS ERRED IN RULING THAT THE PROVISIONS OF ACT NO. 2798 ARE NOT
APPLICABLE TO THE "DEED OF CONVEYANCE" EXECUTED BY PING-EL DICMAN ON THE GROUNDS
THAT THERE IS NO PROOF THAT HE WAS A NON-CHRISTIAN AND THAT BAGUIO CITY IS NOT COVERED
BY THE SAID ACT.
B.
THE COURT OF APPEALS ERRED IN THE APPLICATION OF THE RULING IN BORROMEO V. FRANCO (5
PHIL 49 [1905]) THAT AN AGREEMENT ON THE PART OF THE PARTY TO A CONTRACT TO PERFECT THE
TITLE PAPERS TO A CERTAIN PROPERTY WITHIN A CERTAIN TIME IS NOT A CONDITION SUBSEQUENT
OR ESSENTIAL OF THE OBLIGATION TO SELL [sic].
C.
THE COURT OF APPEALS ERRED IN RULING THAT THE PROPERTY SUBJECT OF LITIGATION AND OVER
WHICH RESPONDENTS IMPROVEMENTS ARE BUILT BELONGS TO RESPONDENT NOTWITHSTANDING
UNCONTROVERTED EVIDENCE THAT PETITIONERS PREDECESSOR-IN-INTEREST PING-EL DICMAN HAD
APPLIED FOR FREE PATENT OVER THE SUBJECT AREA AND HAD BEEN ISSUED PLAN SWO-37115 IN HIS
NAME BY THE BUREAU OF LANDS IN 1954 AND HAD BEEN IN ACTUAL, OPEN, PEACEFUL, ADVERSE
AND CONTINUOUS POSSESSION OF THE PROPERTY SINCE THE EARLY 1900s UNTIL HIS DEATH WHEN
HIS GRANCHILDREN AND SUCCESSORS-IN-INTEREST, THE PETITIONERS, TOOK OVER AND CONTINUED
THE POSSESSION OF THEIR GRANDFATHER, PING-EL DICMAN.
On March 2, 2001, petitioners filed their Manifestation and Motion to Substitute Babing Cosil and
Cristina Alawas With Their Respective Heirs stating, among others, that Julio F. Dicman, son of
petitioner Ernesto Dicman, had been appointed by the petitioners to sign the petition for and in their
behalf, but due to distance and time constraints between Makati City and Baguio, he was not able to
submit the same in time for the deadline for the petition on February 12, 2001. Petitioners attached
the Special Power of Attorney seeking to formalize the appointment of Julio F. Dicman as their
attorney-in-fact and to ratify his execution of the verification and certification of non-forum shopping
for and on behalf of the petitioners.
On March 15, 2001, private respondent filed with this Court a Motion for Leave of Court to File
Motion to Dismiss and/or Deny Due Course, arguing that the petition failed to comply with the
requirements for verification and certification of non-forum shopping. The affiant of the petition,
according to private respondent, is not a principal party in the case; rather, he is merely the son of
Ernesto Dicman, one of the petitioners. The verification and certification reads:
VERIFICATION AND CERTIFICATION
I, JULIO F. DICMAN, of legal age, Filipino, with residence address at Camp 7, Montecillo Road, Baguio
City, after being first duly sworn in accordance with law, do hereby depose and state:
1. I am one of the petitioners in the above-entitled case;
x x x (emphasis supplied)
To private respondent, since Ernesto Dicman, one of the petitioners, appears to be alive, he excludes
his son as the successor-in-interest of Ting-el Dicman. The verification, therefore, is false in view of
the statement under oath that Julio F. Dicman is a petitioner when in fact he is not, and should be
cause for the dismissal of the case and indirect contempt of court, without prejudice to
administrative and criminal action.
On May 2, 2001, in their Manifestation and Motion for Leave to File the Attached Reply and Reply,
petitioners argued that while it may be true that the verification and certification to the petition were
signed by Julio F. Dicman, the son of one of the petitioners, they subsequently confirmed his
authority to sign on behalf of all the petitioners through the Special Power of Attorney submitted to
the Court in a Manifestation and Motion to Substitute Babing Cosil and Cristina Alawas With Their
Respective Heirs filed on March 2, 2001. Petitioners invoked substantial compliance and prayed that
the Court overlook the procedural lapse in the interest of substantial justice. The parties thereafter
submitted their respective memoranda.
The petition must be dismissed on the following grounds:
1. Section 5, Rule 7 of the 1997 Rules of Civil Procedure, which requires the pleader to submit a
certificate of non-forum shopping to be executed by the plaintiff or principal party, is mandatory, and
non-compliance therewith is a sufficient ground for the dismissal of the petition.
24
The forum
shopping certification must be signed by the party himself as he has personal knowledge of the facts
therein stated.
25
Obviously, it is the plaintiff or principal party who is in the best position to know
whether he actually filed or caused the filing of a petition in the case.
26
Where there are two or more
plaintiffs or petitioners, all of them must sign the verification and non-forum certification, and the
signature of only one of them is insufficient,
27
unless the one who signs the verification and
certification has been authorized to execute the same by, and on behalf of, the co-plaintiff or co-
petitioner.
28
But it must be stressed that the requirement the principal party himself should sign the
certification applies only to a natural person and not to a juridical person which can only act through
its officer or duly authorized agent.
29

However, the Court has also held that the rules on forum shopping were designed to promote and
facilitate the orderly administration of justice and thus should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance
may be availed of with respect to the contents of the certification. This is because the requirement of
strict compliance with the provisions regarding the certification of non-forum shopping merely
underscores its mandatory nature in that the certification cannot be altogether dispensed with or its
requirements completely disregarded.
30
Thus, under justifiable circumstances, the Court has relaxed
the rule requiring the submission of such certification considering that although it is obligatory, it is
not jurisdictional.
31
lawphil.net
But a perusal of the relevant decisions handed down by this Court consistently shows that substantial
compliance may be invoked and the procedural lapse overlooked provided that, where the petitioner
is a natural person as in the case at bar, the authorized signatory must also be a principal party or co-
petitioner.
32
Petitioners, as natural persons, cannot therefore appoint a non-party to sign for them,
especially since only the petitioners occupy the best position to know whether they actually filed or
caused the filing of a petition in this case and who personally know the facts stated in the petition. On
this point alone the petition should be dismissed.
2. It is a settled rule that in the exercise of the Supreme Courts power of review, the Court is not a
trier of facts and does not normally undertake the re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings of facts of the CA are
conclusive and binding on the Court. While jurisprudence has recognized several exceptions in which
factual issues may be resolved by this Court, namely: (1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its
findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of
both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when
the findings are conclusions without citation of specific evidence on which they are based; (9) when
the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed
by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly considered, could justify a different
conclusion,
33
none of these exceptions has been shown to apply in the present case and, hence, this
Court may not review the findings of fact made by the lower courts.
3. Petitioners argue on appeal that the "Deed of Conveyance of Part Rights and Interests in
Agricultural Land" dated October 22, 1928 executed between Sioco Cario and Ting-el Dicman is
void ab initio for lack of approval of competent authorities as required under Section 145 in relation
to Section 146 of the Administrative Code of Mindanao and Sulu, the application of which was later
extended to the Mountain Province and Nueva Viscaya and, thereafter, throughout the entire
national territory;
34
that the sale was without valid consideration; and that the said deed is not an
absolute sale but merely a contract to sell subject to the suspensive condition that the papers
evidencing the title must first be perfected. These arguments were lumped under the following issue
in their appeal to the CA:
2. THE HONORABLE TRIAL COURT ERRED IN CONSIDERING THE DEED OF CONVEYANCE [OF] PART
RIGHTS AND INTERESTS IN AGRICULTURAL LAND EXECUTED BY DICMAN IN FAVOR OF SIOCO CARIO
DESPITE ITS NULLITY.
The foregoing issue and the incidents thereunder were never raised by the petitioners during the
proceedings before the RTC. Suffice it to say that issues raised for the first time on appeal and not
raised timely in the proceedings in the lower court are barred by estoppel.
35
Matters, theories or
arguments not brought out in the original proceedings cannot be considered on review or appeal
where they are raised for the first time. To consider the alleged facts and arguments raised belatedly
would amount to trampling on the basic principles of fair play, justice and due process.
36

4. Even if this Court should declare the sale null and void or the agreement merely a contract to sell
subject to a suspensive condition that has yet to occur, private respondent nonetheless acquired
ownership over the land in question through acquisitive prescription.
37

The records show that as early as 1938, the land in controversy had been in the possession of
Guzman Cario, predecessor-in-interest of private respondent, continuously, publicly, peacefully, in
concept of owner, and in good faith with just title, to the exclusion of the petitioners and their
predecessors-in-interest, well beyond the period required under law to acquire title by acquisitive
prescription which, in this case, is 10 years.
38
The findings of fact of the lower courts, and which this
Court has no reason to disturb, inescapably point to this conclusion: immediately after the "Deed of
Absolute Sale," a public instrument dated January 10, 1938, had been executed by Sioco Cario in
favor of his son, Guzman Cario (the father of private respondent), the latter immediately occupied
the property; the 1940 directory of Baguio Telephones lists his residence at Camp 7, Baguio City along
with his telephone number; his permitting the use of portions of the property to various third parties;
his introduction of improvements over the land in controversy; the testimonial accounts of his
neighbors; and that it was Guzman Cario alone who declared for tax purposes both the land and the
improvements thereon in his name, while the tax declarations of the other claimants made no
reference to the subject property.
39
Although arguably Sioco Cario may not have been the owner of
the subject property when he executed the "Deed of Absolute Sale" in 1938 in favor of his son, the
requirement of just title is nonetheless satisfied, which means that the mode of transferring
ownership should ordinarily have been valid and true, had the grantor been the owner.
40
By the time
the successors-in-interest of Ting-el Dicman sought to establish ownership over the land in
controversy by filing their "Petition of the Heirs of Dicman to Reopen Civil Reservation Case No. 1,
G.L.R.O. 211" on April 24, 1959 with the trial court, and which Guzman timely opposed, more than 20
years had already elapsed. Thus, the 10-year period for acquisitive prescription is deemed satisfied
well before Guzmans possession can be said to be civilly interrupted by the filing of the foregoing
petition to reopen.
41
After the dismissal of that case on July 28, 1978, Guzman Cario was left
undisturbed in his possession of the subject property until his death on August 19, 1982. His remains
are buried on the land in question. Thereafter, Guzmans widow and son, herein private respondent,
continued possession of the subject property in the same manner. When petitioners, heirs of Ting-el
Dicman, tried to revive the case on April 20, 1983, they had, far before that time, lost all rights to
recover possession or ownership.
5. Prescinding from the issue on prescription, the petitioners and their predecessors-in-interest are
nonetheless guilty of laches.
Laches has been defined as such neglect or omission to assert a right, taken in conjunction with the
lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar
in equity.
42
It is a delay in the assertion of a right which works disadvantage to another
43
because of
the inequity founded on some change in the condition or relations of the property or parties.
44
It is
based on public policy which, for the peace of society,
45
ordains that relief will be denied to a stale
demand which otherwise could be a valid claim.
46
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 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.
47
Laches means the failure or neglect for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting the presumption that the party
entitled to assert it either has abandoned or declined to assert it.
48
It has been held that even a
registered owner of property under the Torrens Title system may be barred from recovering
possession of property by virtue of laches.
49

Given the foregoing findings of fact, all the four (4) elements of laches, as prescribed by the decisions
of this Court, are present in the case, to wit:
1. a. Conduct on the part of the defendant, or of one under whom he claims, giving rise to the
situation of which complaint is made and for which the complaint seeks a remedy;
2. b. Delay in asserting the complainants rights, the complainant having had knowledge or notice, of
the defendants conduct and having been afforded an opportunity to institute a suit;
3. c. Lack of knowledge or notice on the part of the defendant that the complainant would assert the
right on which he bases his suit; and
d. Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is
not held to be barred.
50

As correctly held by the RTC, there is no evidence to the effect that Ting-el Dicman or his successors-
in-interest ever filed any action to question the validity of the "Deed of Conveyance of Part Rights and
Interests in Agricultural Land" after its execution on October 22, 1928
51
despite having every
opportunity to do so. Nor was any action to recover possession of the property from Guzman Cario
instituted anytime prior to April 24, 1959, a time when the period for acquisitive prescription,
reckoned from Guzmans occupation of the property in 1938, had already transpired in his favor. No
evidence likewise appears on the record that Sioco Cario or his Estate ever filed any action to
contest the validity of the "Deed of Absolute Sale" dated January 10, 1938.
52
Though counsel for the
Estate of Sioco Cario tried to assail the deed as a forgery in the trial court, the attempt failed and no
appeal was lodged therefrom. It will be difficult for this Court to assume that the petitioners and their
predecessors were all the while ignorant of the adverse possession of private respondent and his
predecessors given the publicity of their conduct and the nature of their acts. Private respondent and
his predecessors-in-interest were made to feel secure in the belief that no action would be filed
against them by such passivity. There is no justifiable reason for petitioners delay in asserting their
rightsthe facts in their entirety show that they have slept on them. For over 30 years reckoned
from the "Deed of Conveyance of Part Rights and Interests in Agricultural Land" dated October 22,
1928, or 20 years reckoned from the "Deed of Absolute Sale" dated January 10, 1938, they neglected
to take positive steps to assert their dominical claim over the property. With the exception of forgery,
all other issues concerning the validity of the two instruments abovementioned, as well as the
averment that the former was in the nature of a contract to sell, were issues raised only for the first
time on appeal and cannot therefore be taken up at this late a stage. The features of this case are not
new. The Court has on several occasions held in particular that despite the judicial pronouncement
that the sale of real property by illiterate ethnic minorities is null and void for lack of approval of
competent authorities, the right to recover possession has nonetheless been barred through the
operation of the equitable doctrine of laches.
53

6. Petitioners argue that Proclamation No. 628 issued by then President Carlos P. Garcia on January 8,
1960 had the effect of "segregating" and "reserving" certain Igorot claims identified therein, including
one purportedly belonging to the "Heirs of Dicman," and prohibiting any encumbrance or alienation
of these claims for a period of 15 years from acquisition of patent. But by the time the Proclamation
had been issued, all rights over the property in question had already been vested in private
respondent. The executive issuance can only go so far as to classify public land, but it cannot be
construed as to prejudice vested rights. Moreover, property rights may not be altered or deprived by
executive fiat alone without contravening the due process guarantees
54
of the Constitution and may
amount to unlawful taking of private property to be redistributed for public use without just
compensation.
55

The recognition, respect, and protection of the rights of indigenous peoples to preserve and develop
their cultures, traditions, and institutions are vital concerns of the State and constitute important
public policies which bear upon this case. To give life and meaning unto these policies the legislature
saw it fit to enact Republic Act No. 8371, otherwise known as The Indigenous Peoples Rights Act of
1997, as a culminating measure to affirm the views and opinions of indigenous peoples and ethnic
minorities
on matters that affect their life and culture.
56
The provisions of that law unify an otherwise
fragmented account of constitutional, jurisprudential and statutory doctrine which enjoins the organs
of government to be vigilant for the protection of indigenous cultural communities as a marginalized
sector,
57
to protect their ancestral domain and ancestral lands and ensure their economic, social, and
cultural well-being,
58
and to guard their patrimony from those inclined to prey upon their ignorance
or ductility.
59
As the final arbiter of disputes and the last bulwark of the Rule of Law this Court has
always been mindful of the highest edicts of social justice especially where doubts arise in the
interpretation and application of the law. But when in the pursuit of the loftiest ends ordained by the
Constitution this Court finds that the law is clear and leaves no room for doubt, it shall decide
according to the principles of right and justice as all people conceive them to be, and with due
appreciation of the rights of all persons concerned.
WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.