PELBEL MANUFACTURING

CORPORATION, Substituted by
Pelagia Beltran, and VIRGINIA
MALOLOS,
Petitioners,

G.R. No. 141325

- versus HON. COURT OF APPEALS,

and THE REPUBLIC OF
THEPHILIPPINES,
Respondents.
x-------------------------------x

ALADDIN F. TRINIDAD and AQUILINA

C. BONZON,

Petitioners,
- versus REPUBLIC OF THE PHILIPPINES
(LAGUNA LAKE DEVELOPMENT
AUTHORITY),
Respondent.

G.R. No. 141174

Present:
PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:
July 31, 2006

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

DECISION
PUNO, J.:
Before us are the consolidated cases of Pelbel Manufacturing
Corporation, Substituted by Pelagia Beltran, and Virginia Malolos v.
Court of Appeals and the Republic of the Philippines
and Aladdin F. Trinidad and Aquilina C. Bonzon v. Republic of
the Philippines (Laguna Lake Development Authority), appealing the
Court of Appeals November 14, 1997 Decision[1] in CA-G.R. CV No.
23592 and December 22, 1999 Resolution,[2] which reversed the Regional
Trial Courts (RTCs) Decision[3] dated September 12, 1988 in Land
Registration Case No. 243-A. The RTC granted the application of

petitioners Pelagia Beltran, Aladdin F. Trinidad and Virginia Malolos to

have the parcels of land situated in San Juan, Taytay, Rizal, and indicated
in Psu-240345 to be registered in their names.

The facts, narrated by the Court of Appeals, are as follows:

The original applicants for registration are Pelbel
Manufacturing Corporation, Aladdin Trinidad and Virginia
Malolos. The lots sought to be registered are two parcels of
land covered by Plan Psu-240345, the first parcel having an
area of 28,181 square meters, more or less and the second
parcel having an area of 2,070 square meters, more or
less. Both parcels of land are situated [in] San Juan, Taytay,
Rizal.
The case was set for initial hearing on April 1, 1985 and
after fulfillment by the applicants of the jurisdictional
requirements of notice, posting and publication, initial hearing
took place as scheduled. There being no formal opposition on
record, an Order of general default was issued and Applicants
were allowed to present evidence ex-parte before the Acting
Clerk of Court who was commissioned to receive evidence.
Earlier on March 28, 1985 however, the Laguna Lake
Development Authority filed a Manifestation (Record, pp. 3031) stating that, as per projections of the subject lots in the
topographic map prepared by the Bureau of Coast and
Geodetic Survey using technical description of the lots
approved by the Bureau of Lands, subject lots are situated
below the elevation of 12.50 meters, thus forming part of the
bed of the Laguna Lake in accordance with Sec. 41 (paragraph
11) of Republic Act No. 4850 as amended by P.D. No. 813.
On April 22, 1985, the Office of the Solicitor General
filed its Opposition (Record, p. 40) alleging that neither the
applicants nor their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation
of the land since June 12, 1945 or prior thereto; that the
applicants claim of ownership in fee simple on the basis of
Spanish Title or grant can no longer be availed of for failure to
file the appropriate application for registration within six (6)
months from February 16, 1976 as required by P.D. No. 892;

and that applicant Pelbel Manufacturing Corporation is

disqualified, being a private corporation, to hold lands of the
public domain except by lease pursuant to Section 11, Article
XIV of the 1973 Constitution.
On May 3, 1985, a Motion For Substitution of Party
Applicant was filed by Pelbel to substitute Pelagia P. Beltran
in its place as applicant with respect to 17,500 square meters of
the lot applied for, which Motion was granted by the lower
court (Record, p. 48).
On May 4, 1985, the lower court rendered the assailed
Decision (Record, p. 49) adjudicating the parcels of land
applied for in favor of the following: Pelagia Beltran 17,500
square meters; Aladdin Trinidad 2,500 square meters;
Virginia Malolos 10,251 square meters (Appellants Brief, p.
3; Rollo, p. 260), based on the following findings:
The aforecited established facts support the
application for registration of the two parcels of land
subject of the present application. The applicants have
satisfactorily proven their peaceful, continuous, and
public possession of the said parcels of land for over a
period of thirty years and no person or persons had/have
disturbed their possession thereof nor interposed any
formal opposition to the instant application. The subject
parcels of land being within the disposable portion of
the public domain, the applicants are therefore entitled
to the registration of their titles to the parcels of land
subject of this case. The Provincial Engineer of Rizal
attested to the effect that the subject property will not be
affected by any government highway as shown in the
clearance marked as Exh.[s] H and H-1 of the applicant
corporation.
WHEREFORE, premises considered, this court
confirms and declares the applicants as the true and
absolute owners of the parcels of land subject of this
application, situated [in] San Juan, Taytay, Rizal and let
therefore an order be as it is hereby ordered issued for
the registration of the titles to the subject land in the
following proportions in favor and in the names of:
a) 17,500 square meters unto Pelagia Beltran, 60
years old, married to Geronimo Beltran,

Filipino citizen, and a resident of Gen.

Segundo St., Pasig, Metro Manila;
b) 2,500 square meters unto Aladdin F.
Trinidad, 54 years old, married to Perfecta
Trinidad, Filipino citizen, and residing at
Valle Verde, Pasig, Metro Manila; and
c) 10,251 square meters unto Virginia Malolos,
50 years old, married to Eliseo Malolos,
Filipino [c]itizen[,] and residing [on] Macopa
St., Quezon City.
as pro-indiviso owners in fee simple of the parcels of
land indicated in Psu-1445109 (Exh. G), particularly
described in the corresponding technical description
(Exh[s]. G-1 and G-2) upon payment of the required
fees therefor.
(Record, pp. 56-57)
A Motion to Amend Order of General Default and Set
Aside Decision dated May 4, 1985 (Record, pp. 64-[6]7) was
filed by Laguna Lake Development Authority on the ground
that LLDA had already established by preliminary
investigations that the lots are below elevation of 12.50 meters,
hence are of public dominion. On June 26, 1985[,] the lower
court directed the Office of the Solicitor General to file
comment on the motion.
On August 29, 1985, applicant Aladdin F. Trinidad, in
his Motion to Segregate the land applied for by him from Plan
PSU-[240345] stated that the LLDAs position was untenable
based on Supreme Court decisions in Republic of the
Philippines vs. Court of Appeals and Santos del Rio, 131
SCRA 532 and Bautista vs. Court of Appeals and Santos del
Rio, 131 SCRA 532 which held that parts around Laguna de
Bay which become covered with water four to five months a
year, not due to tidal action, but due to rains cannot be
considered a part of the bed or basin of Laguna de Bay nor as a
foreshore land. LLDA filed an Opposition stating that in the
aforementioned cases the Supreme Court failed to apply Sec.
41 (paragraph 11) of R.A. 4850 as amended by P.D. 813 in
resolving the issue of whether or not subject lots are public
land.

Paragraph 11 of R.A. 4850 as amended states:

(11) Laguna Lake or Lake. Whenever Laguna
Lake or lake is used in this Act, the same shall refer to
Laguna de Bay which is that area covered by the lake
waterwhen it is at the average annual maximum lake
level of elevation 12.50 meters, as referred to a datum
10.00 meters below mean lower low water
(m.L.L.W.). Lands located at and below such elevation
are public lands which form part of the bed of said lake.
(Underlining supplied.)
In his Rejoinder, [Aladdin] Trinidad contended that the
enactment of R.A. No. 4850 in 1966 did not retroact to make
the subject lots public.
On September 17, 1985, the OSG filed its Comment
supporting the LLDAs position that lakes and their beds such
as the lots sought to be registered are, under Article 502, par. 4
of the [N]ew Civil Code, considered public domain. Invoking
Article XV, Section II of the 1972 Constitution, the OSG
further argued that applicant Pelbel, being a corporation, is
disqualified from acquiring lands of the public domain and that
applicants are not entitled to registration for lack of the
requisite number of years of possession beforeJune 12, 1945.
Acting upon LLDAs Motion, the lower court in an
Order dated October 3, 1985 reopened the case to enable the
government to present its evidence. On November 25, 1985[,]
Geodetic Engineer Joel G. Merida was presented as
government witness. Merida testified that upon LLDAs
verification and actual inspection of the subject lots conducted
in November, the highest observed vertical elevation of the
subject lots was determined to be at elevation 12.19 meters.
On October 17, 1988, the OSG filed a Motion to
Dismiss applicants-appellees application on the ground that
there was no valid amendment and republication of the
application relative to the substitution by Beltran as applicant
in lieu of Pelbel [C]orporation which the court denied in an
Order dated January 12, 1987, stating:
After going over the above-mentioned arguments
set forth by Oppositor Republic of the Philippines, the

Court finds that the ground [set forth] by the Oppositor

is devoid of merit.
The record disclose[d] that acting on a Motion for
Substitution of Party-Applicant, dated April 29,
1985 filed by Applicant Pelbel Manufacturing
Corporation, the Court in its Order dated May 3,
1985 granted the substitution of applicant, Pelbel
Manufacturing Corporation with Applicant Pelagia
Beltran.
Being a private person, Applicant is not covered
by
the
constitutional
prohibition
invoked
by Oppositor Republic of the Philippines which applies
only to private corporation.
On the claim of Oppositor Republic of the
Philippines, that the substitution was an attempt to
circumvent the constitutional prohibition against private
corporations, the Court can just add that the applicant
Pelbel Manufacturing Corporation in conveying the
property applied for by it has in its favor the disputable
presumption that private transactions have been fair and
regular pursuant to the provisions of Rule 131, Section
5, sub par. (p) of the Rules of Court. Said presumption
is deemed satisfactory if uncontradicted but may be
contradicted and overcome by other evidence. The
record disclose[d] that no evidence was ever presented
to contradict said disputable presumption in favor of the
applicant private corporation.
The
alleged
failure
to
notify Oppositor Republic of the Philippines of the
substitution of applicant Pelbel Manufacturing
Corporation by Applicant Pelagia Beltran is just a
procedural defect and not a jurisdictional defect which
would affect the validity of the Amended Application.
On the second ground for the dismissal of the
Amended Application for failure to republish the same,
the Court agrees with Applicant Trinidad that
considering that the amendment on the application does
not affect any increase or alteration of the area of the
property applied for but pertains only to an amendment
of the joinder or discontinuance of the parties, no
republication of the Amended Application is necessary.

(Record, p. 192)
On September 12, 1988[,] the lower court rendered the
questioned decision which substantially affirmed its May 4,
1985 decision.
In this appeal, the Office of the Solicitor General assigns
the following as errors:
1. THE LOWER
COURT ERRED
IN
HOLDING THAT THE LOTS 1 & 2 OF PSU 240345
(EXH. G) SOUGHT TO BE REGISTERED BY
APPELLEES ARE NOT PART OF LAGUNA LAKE,
HENCE, REGISTRABLE.
2. THE LOWER COURT ERRED IN NOT
FINDING THAT APPELLEES FAILED TO ADDUCE
ADEQUATE AND SUBSTANTIAL PROOF THAT
THEY
AND
THEIR
PREDECESSORS[-]ININTEREST HAVE BEEN IN OPEN[,] CONTINUOUS,
EXCLUSIVE AND NOTORIOUS POSSESSION OF
THE LOTS SOUGHT TO BE REGISTERED SINCE
JUNE 12, 1945 OR PRIOR THERETO.
3. THE LOWER COURT ERRED IN NOT
DISMISSING THE INSTANT APPLICATION FOR
REGISTRATION OF TITLE.
During the pendency of this appeal, the Spouses
Abraham and Aquilina Bonzon filed an Intervention over Lot
No. 2 of PSU-242343 included in the land being applied for in
the name of Virginia Malolos (Rollo, pp. 324-334). The
instant case was declared submitted for decision with
intervenors brief as well as that of Pelbel Manufacturing
Corporation.[4]

On November 14, 1997, the Court of Appeals reversed and set

aside the decision of the trial court. It dismissed the applications for land
registration of petitioners Pelagia Beltran, Aladdin F. Trinidad and
Virginia Malolos.

On December 22, 1999, the appellate court denied the motion for
reconsideration of petitioner Pelbel Manufacturing Corporation, as
substituted by Pelagia Beltran.

Hence, this appeal.

Petitioners Pelbel Manufacturing Corporation, substituted by

Pelagia Beltran, and Virginia Malolos base their appeal on the following
grounds:
I.
THE LOTS IN QUESTION ARE
ALIENABLE AND DISPOSABLE[5]
A. The conclusion of the Court of Appeals that the lots in
question are not alienable and disposable because of the absence
of a certification from the Government that the lots are alienable
and disposable is not supported by the evidence, and is clearly
contrary to the undisputed evidence on record.[6]
B. The conclusion of the Court of Appeals that the lots in
question are part of the Laguna Lake is not supported by
substantial evidence and negated by applicable law and
jurisprudence.[7]
C. Elementary logic dictates that if the lots with houses
and the roads between the subject lots are alienable and
disposable, then the subject lots are alienable and disposable.[8]
D. The findings and conclusions of the trial [c]ourt are in
accord with the facts, the law and the evidence.[9]
II.
THE COURT OF APPEALS ERRED AS A MATTER OF
LAW IN REVERSING THE HOLDING OF THE TRIAL
COURT THAT THE PETITIONERS AND THEIR
PREDECESSORS-IN-INTEREST HAD BEEN IN
OPEN, PUBLIC AND ADVERSE POSSESSION OF
THE PROPERTY IN THE CONCEPT OF OWNERS
FOR MORE THAN 30 YEAR IS BASED ON MERE
CONJECTURES[,]
SPECULATIONS
AND
[10]
GENERALIZATION.

A. The findings of facts of the trial [c]ourt on the

credibility of witnesses are binding on the Court of Appeals.[11]
B. There are no substantial reasons of the Court of
Appeals for reversing the conclusion and finding of the trial
[c]ourt.[12]
C. The ruling of the trial [c]ourt ought to be re-instated
and upheld, as a matter of law and established jurisprudence.[13]

On the other hand, petitioners Aladdin F. Trinidad and Aquilina C.

Bonzon cite the grounds for their appeal in the following manner:
FIRST GROUND
Is the Questioned Decision And Resolution Of The
Hon. Court Of Appeals Supported By Evidence
And Which Is Contradicted By The Evidence Of
The Petitioners In The Record (Tolentino vs. De
Jesus, et al., L-32797, 27 March 1974).
SECOND GROUND
Has The Hon. Court Of Appeals Disregarded The
Applicable Laws And Decisions Of The Hon.
Supreme Court in the below cases:
1. Director of Lands vs. Hon. Court of Appeals, et
al.[,] G.R. No. L-43105, August 31, 1984.
2. Aurora Bautista, et al. vs. Hon. Court of
Appeals, et al., G.R. No. 43190, August 31,
1984.
in deciding this case which cases interpreted the
laws applicable to this case on the basis of the facts
established by the evidence in the records.[14]

In sum, the two consolidated petitions raise the following issues:

(1)

Whether the subject parcels of land are public land; and

(2)

If they are not public land, whether applicants-petitioners

have registrable title to the land.

We uphold the ruling of the Court of Appeals.

Petitioners, in this case, applied for registration of title to two
parcels of land covered by Plan Psu-240345. Both parcels of land are
located in San Juan, Taytay, Rizal, near the shore of Laguna de Bay. The
controlling law in the instant case is Commonwealth Act No. 141, as
amended, otherwise known as the Public Land Act. It governs what were
used to be known as public agricultural lands, or what are otherwise
known as alienable and disposable lands of the public domain. Under the
Public Land Act, there is a presumption that the land applied for belongs
to the state, and that the occupants and possessors can only claim an
interest in the land by virtue of their imperfect title or continuous, open,
and notorious possession thereof[15] for a period prescribed by law. This
principle is rooted in the Regalian doctrine, under which the State is the
source of any asserted right to ownership of land. The basic doctrine is
that all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.[16] Any applicant for
judicial confirmation of an imperfect title has the burden of proving, by
incontrovertible evidence,[17] that the (a) land applied for is alienable and
disposable public land; and, (b) the applicant, by himself or through his
predecessors-in-interest had occupied and possessed the land, in the
concept of owner, openly, continuously, exclusively, and adversely since
June 12, 1945, or earlier.[18]
We hold that petitioners failed to show that the parcels of land
subject of their application are alienable and disposable. The
government, through the Laguna Lake Development Authority,
established that the areas sought to be registered are below the statutory
minimum elevation of 12.50 meters, hence formed part of the bed
of Laguna Lake under Republic Act (R.A.) No. 4850, as amended. In a
Report dated November 19, 1985, Laguna Lake Development Authority
Geodetic Engineer Joel G. Merida stated that one-half of the area of Lot 1
and the entire area of Lot 2, Psu-240345, are covered by mud and lake
water at an elevation of 11.77 meters, and the highest observed elevation
is 12.19 meters.[19] This means that the subject lots form part of the lake
bed or basin of Laguna Lake. Sec. 41(11) of R.A. No. 4850 sets the
minimum water elevation at 12.50 meters. Lands located at and below
such elevation are public lands which form part of the bed of said

lake. Art. 502 of the Civil Code enumerates the bodies of water that are
properties of public dominion, as follows:
The following are of public dominion:
(1)

Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and

brooks running in their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands
of public dominion;
(4) Lakes and lagoons formed by Nature on public
lands, and their beds;
xxx
(Emphases supplied.)

Petitioners invoke the case of Bautista v. Court of

Appeals,[20] claiming that the inundation was merely due to the rains, and
that the water elevation should be determined from the highest ordinary
depth during dry season. They cite Art. 74 of the Law of Waters of 1866
which defines the extent of a lake bed as the ground covered by their
waters when at their highest ordinary depth, and the case
of Government of the Philippine Islands v. Colegio de San
Jose[21] which defines the phrase highest ordinary depth as the highest
depth of the waters (the Laguna Lake, in this case) during the dry season,
such depth being the regular, common, natural depth which occurs
always or most of the time during the year. It is contended that the
measurement of Laguna Lake Development Authority Geodetic Engineer
Merida of 12.19 meters as the highest observed elevation of the subject
lots was made in November,[22] which is still rainy season. We disagree
for while November is not part of the summer season, it is not part of the
rainy season either. It still is part of the dry season during which the
waters are at their highest ordinary depth.
Further, we agree with the ruling of the appellate court that the fact
that a few of the other estates in the vicinity had succeeded in being
registered, and that there are already existing houses and roads between

Laguna Lake and the subject lots, does not prove that the subject lots are
not part of the Laguna Lake bed. Mr. Ananias Mariano registered 6,993
square meters of land in his name under Original Certificate of Title
(OCT) No. 8906 which land appears to be even located farther from the
lake than the subject lots, while Juvencio Ortaez registered 84,238
square meters of land in his name under OCT No. 55351 which land is
situated near the margins of the Laguna Lake. The land titles of these
two individuals only prove that they are the owners in fee simple of the
respective real properties described therein, free from all liens and
encumbrances except such as may be expressly noted thereon or
otherwise reserved by law.[23] They do not prove petitioners title to the
subject lots. Further, in Ledesma v. Municipality of Iloilo,[24] this Court
held that simple possession of a certificate of title, under the Torrens
System, does not make the possessor the true owner of all the property
described therein. If a person obtains a title, under the Torrens System,
which includes by mistake or oversight land which cannot be registered
under the Torrens System, he does not, by virtue of said certificate alone,
become the owner of the lands illegally included. It is basic principle
that prescription does not run against the government. In Reyes v. Court
of Appeals,[25] we held:
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. . .
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.

We further uphold the Court of Appeals in ruling that petitionersapplicants presented no substantial evidence that they and their
predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupation of the entire area in question, in the
concept of owner since June 12, 1945, or prior thereto.

Petitioners presented Pedro Bernardo, their common predecessorin-interest, as witness. Bernardo testified, as follows:
Q

Before this land was sold to Potenciana Espiritu, how long

have you owned this land before you sold this to Potenciana
Espiritu?

I have been the owner of this property for 25 years.

Before the same was sold to Potenciana Espiritu what did

you do with the land when you were still the owner of the
land?

The land is devoted to planting of palay.

Do you have a tenant who till[s] the land for you?

The tenant died.

Did he die before you sold the property or after?

After I sold the property to Potenciana Espiritu, the tenants

died, however, he was able to work as tenant for Potenciana
for a period of about 4 or 5 years.

When you were in possession of this property for about a

period of 25 years do you know of any other person who
have claimed right or interest?

None that I know.

Can you tell us if you were in possession of the property

continuously, publicly, adversely to the whole world?

Yes, sir, peaceful because there is no adverse claimant. It is

continuous and public and adverse to the whole world.[26]

The above-quoted testimony of Pedro Bernardo is clearly

insufficient. No other proof was presented to establish Bernardos
possession
and

occupation of the more than three (3) hectares of land sought to be

registered. Possession is open when it is visible and apparent to a
common observer.[27] Continuous possession consists of uninterrupted
acts of nonpermissive possession of property by the current occupants
and their predecessors.[28] To be notorious, possession must be so
conspicuous that it is generally known and talked of by the public [29] or at
least by the people in the vicinity of the premises.[30] Mere possession of
land[31] and the making of vague assertions to the public that a possessor
is claiming the land[32] are not sufficient to satisfy the requirement of
open and notorious possession. Bernardo failed to show that his alleged
possession and occupation were of the nature and duration required by
law. Bare and general allegations, without more, do not amount to
preponderant evidence that would shift the burden to the oppositor, in this
case, the Republic.[33] Further, it militates against the claim of actual
possession under a claim of ownership since June 1945, that the subject
properties were declared for taxation purposes only in 1980, or five (5)
years before the filing of the application.[34]
IN VIEW WHEREOF, the Petitions of Pelbel Manufacturing
Corporation, substituted by Pelagia Beltran, and Virginia Malolos, and
Aladdin F. Trinidad and Aquilina C. Bonzon are DENIED. The Court of
Appeals November 14, 1997 Decision in CA-G.R. CV No. 23592
and December 22, 1999 Resolution areAFFIRMED.
Costs against petitioners.
SO ORDERED.

PACIFIC STEAM LAUNDRY,

INC.,
Petitioner,

G.R. No. 165299

Present:
CARPIO, J., Chairperson,
LEONARDO-DE CASTRO,*
BRION,
DEL CASTILLO, and
ABAD, JJ.

- versus -

Promulgated:
LAGUNA LAKE DEVELOPMENT
AUTHORITY,
December 18, 2009
Respondent.
x------------------------------------------------- x
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the Decision[2] dated 30 June 2004
and the Resolution dated 8 September 2004 of the Court of Appeals in
CA-G.R. SP No. 75238.

The Facts
Petitioner Pacific Steam Laundry, Inc. (petitioner) is a company
engaged in the business of LAUNDRY SERVICES . On 6 June 2001,
the Environmental Management Bureau of the Department of
Environment and Natural Resources (DENR) endorsed to respondent
Laguna Lake Development Authority (LLDA) the inspection report on
the complaint of black smoke emission from petitioners plant located at
114 Roosevelt Avenue, Quezon City.[3] On 22 June 2001, LLDA
conducted an investigation and found that untreated wastewater generated
from petitioners laundry washing activities was discharged directly to
the San Francisco Del Monte River. Furthermore, the Investigation

Report[4] stated that petitioners plant was operating without LLDA

clearance, AC/PO-ESI, and Discharge Permit from LLDA. On 5
September 2001, the Environmental QUALITY MANAGEMENT
Division of LLDA conducted wastewater sampling of petitioners
effluent.[5] The result of the laboratory analysis showed non-compliance
with effluent standards particularly Total Suspended Solids (TSS),
Biochemical Oxygen Demand (BOD), Oil/Grease Concentration and
Color Units.[6] Consequently, LLDA issued to petitioner a Notice of
Violation[7] dated 30 October 2001 which states:
THE GENERAL MANAGER
PACIFIC STEAM LAUNDRY, INC.
114 Roosevelt Avenue, Brgy. Paraiso
Quezon City
Subject: Notice of Violation
PH-01-10-303
Gentlemen:
This refers to the findings of the inspection and result of laboratory
analysis of the wastewater collected from your firm last 5 September 2001.
Evaluation of the results of laboratory analysis showed that your plants
effluent failed to conform with the 1990 Revised Effluent Standard for
Inland Water Class C specifically in terms of TSS, BOD, Oil/Grease and
Color. (Please see attached laboratory analysis)
In view thereof, you are hereby directed to submit corrective
measures to abate/control the water pollution caused by your firm, within
fifteen (15) days from receipt of this letter.
Furthermore, pursuant to Section 9 of Presidential Decree No. 984,
PACIFIC STEAM LAUNDRY, INC. is hereby ordered to pay a penalty of
One Thousand Pesos (P1,000.00) per day of discharging pollutive
wastewater to be computed from 5 September 2001, the date of inspection
until full cessation of discharging pollutive wastewater and a fine of Five
Thousand Pesos (P5,000.00) per year for operating without the necessary
clearance/permits from the Authority.
Very truly yours,
(signed)
CALIXTO R. CATAQUIZ
General Manager

Petitioner submitted its application for LLDA Clearance and

Discharge Permit and informed LLDA that it would undertake the
necessary measures to abate the water pollution.[8] On 1 March 2002, a
compliance monitoring was conducted and the result of the laboratory
analysis[9] still showed non-compliance with effluent standards in terms of
TSS, BOD, Chemical Oxygen Demand (COD), and Oil/Grease
Concentration. It was reported that petitioners WASTEWATER
TREATMENT facility was under construction. Subsequently, another
wastewater sampling was conducted on 25 April 2002 but the
results[10]still failed to conform with the effluent standards in terms of
Oil/Grease Concentration.
Meanwhile, on 15 April 2002, a Pollution Control and Abatement
case was filed against petitioner before the LLDA. During the public
hearing on 30 April 2002, LLDA informed petitioner of its continuous
non-compliance with the effluent standards. Petitioner requested for
another wastewater sampling which was conducted on 5 June 2002. The
laboratory results[11] of the wastewater sampling finally showed
compliance with the effluent standard in all parameters. On 9 August
2002, another public hearing was held to discuss the dismissal of the
water pollution case and the payment of the accumulated daily penalty.
According to LLDA, the penalty should be reckoned from 5 September
2001, the date of initial sampling, to 17 May 2002, the date LLDA
received the request for re-sampling. Petitioner manifested that its
wastewater discharge was not on a daily basis. In its position
paper[12] dated 25 August 2002, petitioner prayed that the Notice of
Violation dated 30 October 2001 be set aside and the penalty and fine
imposed be reckoned from the date of actual hearing on 15 April 2002.
On 16 September 2002, LLDA issued an Order to Pay,[13] the
pertinent portion of which reads:
Respondent prayed that the Notice of Violation issued
on 30 October 2001 and its corresponding daily penalty be set
aside and that the imposable penalty be reckoned from the date
of actual hearing and not on 5 September 2001. It is
respondents position that the Notice of Violation and the
imposition of the penalty had no legal and factual basis
because it had already installed the necessary WASTEWATER
TREATMENT to abate the water pollution.

This Public Hearing Committee finds respondents arguments

devoid of merit. Presidential Decree No. 984 prohibits the discharge of
pollutive wastewater and any person found in violation thereof shall pay a
fine not exceeding five thousand pesos (PhP5,000.00) [sic] for every day
during which such violation continues. The mere discharge of wastewater
not conforming with the effluent standard is the violation referred to in PD
No. 984. Sample of respondents effluent was collected on 5 September
2001 and the results of laboratory analysis confirmed the quality thereof.
Thus, a notice of violation was issued against the respondent after it was
established that its discharge was pollutive. The fact that the subsequent resampling reported compliance with the effluent standard does not negate the
5 September 2001 initial sampling. Respondent passed the standard because
it already implemented remedial measures to abate the water pollution. It is
therefore but just and proper that the penalty should be imposed from the
date of initial sampling, 5 September 2001, to 17 May 2002, the date the
request for re-sampling was received by the Authority. The 5 June 2002
sampling confirmed that respondents effluent already complied with the
standard showing that its water pollution has ceased. Respondent did not
submit any proof of its actual operation hence, the penalty shall be
computed for five (5) working days per week, excluding Saturdays and
Sundays as well as legal holidays from 5 September 2001 to 17 May 2002,
for a total of one hundred seventy-two (172) days.
WHEREFORE, premises considered, respondent Pacific steam
Laundry, Inc. is hereby ordered to pay the accumulated daily penalty
amounting to ONE HUNDRED SEVENTY-TWO THOUSAND
(PhP172,000.00) PESOS within fifteen(15) days from receipt hereof as a
condition sine qua non for the dismissal of the above-captioned case.
SO ORDERED.[14]

Petitioner filed a motion for reconsideration, which the LLDA

denied in its Order[15] dated 27 November 2002.
Petitioner then filed with the Court of Appeals a petition for review
under Rule 43 of the Rules of Court. The Court of Appeals denied the
petition, as well as the motion for reconsideration filed by petitioner.
Hence, this petition.

The Court of Appeals Ruling

The Court of Appeals held that LLDA has the power to impose
fines, thus:
Concededly, the power to impose administrative fines
in pollution abatement cases was expressly granted under
Section 9 of P.D. 984 to the now defunct National Pollution
Control Commission (NPCC), thus:
Section 9. Penalties. - (a) Any person
found violating or failing to comply with any
order, decision or regulation of the Commission
for the control or abatement of pollution shall pay
a fine not exceeding five thousand pesos per day
for every day during which such violation or
default continues; and theCommission is hereby
authorized and empowered to impose the
fine after due notice and hearing.
Nonetheless, it may be well to recall that the LLDA
was created under R.A. 4850 with the end view of promoting
and accelerating the development and balanced growth of the
Laguna Lake area and the surrounding provinces, and carrying
out the development of the Laguna Lake Region with due
regard and adequate provisions for environmental management
and control, preservation of the quality of human life and
ecological systems, and the preservation of undue ecological
disturbances, deterioration and pollution. To correct
deficiencies and clarify ambiguities that impede the
accomplishment of the Authorities goal, Former President
Ferdinand E. Marcos promulgated P.D. 813. Finally, to enable
the LLDA to effectively perform its role, Former President
Marcos further issued E.O. 927, which granted the LLDA
additional powers and functions, viz:
Section 4. Additional Powers and
Functions. - The authority shall have the
following powers and functions:
xxx
(d) Make, alter or modify orders
requiring the discontinuance of

pollution
specifying
the
conditions and time within which
such continuance must be
accomplished.
xxx
(i) Exercise such powers and perform such
other functions as may be necessary to
carry out its duties and responsibilities
under this Executive order.

Indeed, the express grant of power to impose

administrative fines as couched in the language of P.D. 984
was not reproduced in E.O. 927, however, it can be logically
implied from LLDAs authority to exercise the power to
make, alter or modify orders requiring the discontinuance
of pollution. In addition, the clear intendment of E.O. 927
to clothe LLDA not only with the express powers granted to
it, but also those implied, incidental and necessary for the
exercise of its express powers can be easily discerned from
the grant of the general power to exercise (such) powers
and perform such other functions as may be necessary to
carry out its duties and responsibilities.
This finds support in the wealth of authorities in
American Jurisprudence, citing adherence of other courts to
the principle that the authority given to an agency should be
liberally construed in order to permit the agency to carry out
its statutory responsibilities. This is especially true where
the agency is concerned with protecting the public health
and welfare, the delegation of authority to the agency is
liberally construed.
The LLDA, as an agency implementing pollution laws,
rules and regulations, should be given some measures of
flexibility in its operations in order not to hamper it unduly
in the fulfillment of its objectives. How could it effectively
perform its role if in every act of violation, it must resort to
other venue for the appropriate remedy, because it
is IMPOTENT
by itself to punish or deal with
[16]
it? (Emphasis in the original)

The Issues
Petitioner raises two issues:
1.

Does the respondent LLDA have the implied power to

impose
fines as set forth in PD 984?

2.

Does the grant of implied power to LLDA to impose

penalties
violate the rule on non-delegation of
legislative powers?[17]

The Ruling of the Court

We find the petition without merit.
Power of LLDA to Impose Fines
Petitioner asserts that LLDA has no power to impose fines since
such power to impose penal sanctions, which was once lodged with the
National Pollution Control Commission (NPCC), is now assumed by the
Pollution Adjudication Board pursuant to Executive Order No. 192 (EO
192).[18]
We disagree with petitioner.
Presidential Decree No. 984 (PD 984)[19] created and established
the NPCC under the Office of the President. EO 192, which reorganized
the DENR, created the Pollution Adjudication Board under the Office of
the DENR Secretary which assumed the powers and functions of the
NPCC with respect to adjudication of pollution cases.
Section 19 of EO 192 provides:
SEC. 19. Pollution Adjudication Board. There is
hereby created a Pollution Adjudication Board under the
Office of the Secretary. The Board shall be composed of
the Secretary as Chairman, two (2) Undersecretaries as may
be designated by the Secretary, the Director of
Environmental Management, and three (3) others to be
designated by the Secretary as members. The Board shall
assume
the
powers
and
functions
of
the

Commission/Commissioners of the National Pollution

Control Commission with respect to the adjudication of
pollution cases under Republic Act 3931 and Presidential
Decree 984, particularly with respect to Section 6 letters
e, f, g, j, k, and p of P.D. 984. The Environmental
Management Bureau shall serve as the Secretariat of the
Board. These powers and functions may be delegated to the
regional officers of the Department in accordance with rules
and regulations to be promulgated by the Board. (Emphasis
supplied)

Section 6, paragraphs (e), (f), (g), (j), (k), and (p) of PD 984
referred to above states:
SEC. 6. Powers and Functions. The Commission
shall have the following powers and functions:
xxx
(e) Issue orders or decisions to compel compliance with the
provisions of this Decree and its implementing rules and regulations only
after proper notice and hearing.
(f) Make, alter or modify orders requiring the discontinuance of
pollution specifying the conditions and the time within which such
discontinuance must be accomplished.
(g) Issue, renew, or deny permits, under such
conditions as it may determine to be reasonable, for the
prevention and abatement of pollution, for the discharge of
sewage, INDUSTRIAL WASTE , or for the installation or
operation of sewage works and industrial disposal system or
parts thereof: Provided, however, the Commission, by rules
and regulations, may require subdivisions, condominium,
hospitals, public buildings and other similar human settlements
to put up appropriate central sewerage system and SEWAGE
TREATMENT
works, except that no permits shall be
required of any new sewage works or changes to or extensions
of existing works that discharge only domestic or sanitary
wastes from a single residential building provided with septic
tanks or their equivalent. The Commission may impose
reasonable fees and charges for the issuance or renewal of all
permits herein required.
xxx
(j) Serve as arbitrator for the determination of reparations, or
restitution of the damages and losses resulting from pollution.

(k) Deputize in writing or request assistance of appropriate

government agencies or instrumentalities for the purpose of enforcing this
Decree and its implementing rules and regulations and the orders and
decisions of the Commission.
xxx
(p) Exercise such powers and perform such other functions as may
be necessary to carry out its duties and responsibilities under this Decree.

On the other hand, LLDA is a special agency created under

Republic Act No. 4850 (RA 4850)[20] to manage and develop the Laguna
Lake region, comprising of the provinces of Rizal and Laguna and the
cities of San Pablo, Manila, Pasay, Quezon and Caloocan. RA 4850, as
amended by Presidential Decree No. 813 (PD 813),[21] mandates LLDA to
carry out the development of the Laguna Lake region, with due regard
and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and
pollution.[22]
Under Executive Order No. 927 (EO 927),[23] LLDA is granted
additional powers and functions to effectively perform its role and to
enlarge its prerogatives of monitoring, licensing and enforcement, thus:
SECTION 4. Additional Powers and Functions. The
Authority [LLDA] shall have the following powers and
functions:
a) Issue standards, rules and regulations to govern the
approval of plans and specifications for sewage works and
industrial WASTE DISPOSAL systems and the issuance of
permits in accordance with the provisions of this Executive
Order; inspect the construction and maintenance of sewage
works and INDUSTRIAL WASTE
disposal systems for
compliance to plans.
b) Adopt, prescribe, and promulgate rules and regulations governing
the Procedures of the Authority with respect to hearings, plans,
specifications, designs, and other data for sewage works and INDUSTRIAL
WASTE disposal system, the filing of reports, the issuance of permits, and
other rules and regulations for the proper implementation and enforcement
of this Executive Order.
c) Issue orders or decisions to compel compliance
with the provisions of this Executive Order and its

implementing rules and regulations only after proper

notice and hearing.
d) Make, alter or modify orders requiring the discontinuance
of pollution specifying the conditions and the time within which such
discontinuance must be accomplished.
e) Issue, renew or deny permits, under such conditions as it may
determine to be reasonable, for the prevention and abatement of
pollution, for the discharge of sewage, industrial waste, or for the
installation or operation of sewage works and industrial disposal system
or parts thereof: Provided, however, that the Authority, by rules and
regulations, may require subdivisions, condominiums, hospitals, public
buildings and other similar human settlements to put up appropriate
central sewerage system and SEWAGE TREATMENT works, except
that no permits shall be required of any new sewage works or changes to
or extensions of existing works that discharge only domestic or sanitary
wastes from a single residential building provided with septic tanks or
their equivalent. The Authority may impose reasonable fees and charges
for the issuance or renewal of all permits herein required.
f) After due notice and hearing, the Authority may
also revoke, suspend or modify any permit issued under this
Order whenever the same is necessary to prevent or abate
pollution.
g) Deputize in writing or request assistance of appropriate
government agencies or instrumentalities for the purpose of enforcing this
executive Order and its implementing rules and regulations and the orders
and decision of the Authority.
(h) Authorize its representative to enter at all reasonable times any
property of the public dominion and private property devoted to industrial,
manufacturing processing or commercial use without doing damage, for the
purpose of inspecting and investigating conditions relating to pollution or
possible or imminent pollution.
(i) Exercise such powers and perform such other
functions as may be necessary to carry out its duties and
responsibilities under this Executive Order. (Emphasis
supplied)

A comparison of the powers and functions of the Pollution

Adjudication Board and the LLDA reveals substantial similarity. Both
the Pollution Adjudication Board and the LLDA are empowered, among
others, to: (1) make, alter or modify orders requiring the discontinuance
of pollution; (2) issue, renew, or deny permits for the prevention and
abatement of pollution, for the discharge of sewage, industrial waste, or

for the installation or operation of sewage works and industrial disposal

system; and (3) exercise such powers and perform such other functions
necessary to carry out their duties and responsibilities. The difference is
that while Section 19 of EO 192 vested the Pollution Adjudication Board
with the specific power to adjudicate pollution cases in
general,[24] the scope of authority of LLDA to adjudicate pollution cases
is limited to the Laguna Lake region as defined by RA 4850, as amended.
Thus, in Laguna Lake Development Authority v. Court of
Appeals,[25] the Court held that the adjudication of pollution cases
generally pertains to the Pollution Adjudication Board, except where a
special law, such as the LLDA Charter, provides for another forum.
Indeed, even PD 984 authorizes the LLDA to undertake pollution control
activities within LLDAs development area. Section 10 of PD 984
provides:
SEC. 10. Jurisdiction. The Commission [NPCC]
shall have no jurisdiction over waterworks or sewage system
operated by the Metropolitan Waterworks Sewerage System,
but the rules and regulations issued by the Commission for the
protection and prevention of pollution under the authority
herein granted shall supersede and prevail over any rules or
regulations as may heretofore have been issued by other
government agencies or instrumentalities on the same subject.
In case of development projects involving specific
human settlement sites or integrated regional or
subregional projects, such as the Tondo Foreshore
Development Authority and the Laguna Lake Development
Authority, the Commission shall consult with the
authorities charged with the planning and execution of
such projects to ensure that their pollution control
standards comply with those of the Commission. Once
minimum pollution standards are established and agreed
upon, the development authorities concerned may, by
mutual agreement and prior consultation with the
Commission, undertake the pollution control activities
themselves. (Boldfacing and underscoring supplied)

In this case, the DENRs Environmental Management Bureau

endorsed to LLDA the pollution complaint against petitioner. Under
Section 16 of EO 192, the Environmental Management Bureau assumed

the powers and functions of the NPCC except with respect to

adjudication of pollution cases, thus:
SEC. 16. Environmental Management Bureau. There
is hereby created an Environmental Management Bureau.
The
National
Environmental
Protection
Council
(NEPC), the National Pollution Control Commission
(NPCC) and the Environmental Center of the Philippines
(ECP), are herebyabolished and their powers and
functions are hereby integrated into the Environmental
Management Bureau in accordance with Section 24(c)
hereof, subject to Section 19 hereof. x x x (Emphasis
supplied)
The Environmental Management Bureau also serves as the
Secretariat of the Pollution Adjudication Board, and its Director is one of
the members of the Pollution Adjudication Board. Clearly, by endorsing
to LLDA the pollution complaint against petitioner, the Environmental
Management Bureau deferred to LLDAs jurisdiction over the pollution
complaint against petitioner.
Although the Pollution Adjudication Board assumed the powers
and functions of the NPCC with respect to adjudication of pollution
cases, this does not preclude LLDA from assuming jurisdiction of
pollution cases within its area of responsibility and to impose fines as
penalty.
Thus, in the recent case of The Alexandra Condominium
Corporation v. Laguna Lake Development Authority,[26] the Court
affirmed the ruling of the Court of Appeals which sustained LLDAs
Order, requiring petitioner therein to pay a fine of P1,062,000
representing penalty for pollutive wastewater discharge. Although
petitioner in that case did not challenge LLDAs authority to impose fine,
the Court acknowledged the power of LLDA to impose fines, holding
that under Section 4-A of RA 4850, as amended, LLDA is entitled to
compensation for damages resulting from failure to meet established
water and effluent standards. Section 4-A of RA 4850, as amended,
reads:
SEC. 4-A. Compensation for damages to the water and
aquatic resources of Laguna de Bay and its tributaries

resulting from failure to meet established water and effluent

quality standards or from such other wrongful act or
omission of a person, private or public, juridical or
otherwise, punishable under the law shall be awarded to the
Authority to be earmarked for water quality control and
management.
Under Section 4(h) of EO 927, LLDA may exercise such powers
and perform such other functions as may be necessary to carry out its
duties and responsibilities. In Laguna Lake Development Authority v.
Court of Appeals,[27] the Court upheld the power of LLDA to issue an exparte cease and desist order even if such power is not expressly conferred
by law, holding that an administrative agency has also such powers as are
necessarily implied in the exercise of its express powers. The Court ruled
that LLDA, in the exercise of its express powers under its charter, as a
regulatory and quasi-judicial body with respect to pollution cases in the
Laguna Lake region, has the implied authority to issue a cease and desist
order. In the same manner, we hold that the LLDA has the power to
impose fines in the exercise of its function as a regulatory and quasijudicial body with respect to pollution cases in the Laguna Lake region.
No Undue Delegation of Legislative Power
Petitioner contends that if LLDA is deemed to have implied power
to impose penalties, then LLDA will have unfettered discretion to
determine for itself the penalties it may impose, which will amount to
undue delegation of legislative power.
We do not agree. Contrary to petitioners contention, LLDAs
power to impose fines is not unrestricted. In this case, LLDA investigated
the pollution complaint against petitioner and conducted wastewater
sampling of petitioners effluent. It was only after the investigation
result showing petitioners failure to meet the established water and
effluent quality standards that LLDA imposed a fine against petitioner.
LLDA then imposed upon petitioner a penalty of P1,000 per day of
discharging pollutive wastewater. The P1,000 penalty per day is in
accordance with the amount of penalty prescribed under PD 984:
SEC. 8. Prohibitions. No person shall throw, run,
drain, or otherwise dispose into any of the water, air
and/or land resources of the Philippines, or cause,
permit, suffer to be thrown, run, drain, allow to seep or

otherwise dispose thereto any organic or inorganic

matter or any substance in gaseous or liquid form that
shall cause pollution thereof.
xxx
SEC 9. Penalties. x x x
(b) Any person who shall violate any of the previous provisions
of Section Eight of this Decree or its implementing rules and
regulations, or any Order or Decision of the Commission, shall be liable
to a penalty of not to exceed one thousand pesos each day during
which the violation continues, or by imprisonment of from two years to
six years, or by both fine and imprisonment, and in addition such person
may be required or enjoined from continuing such violation as hereinafter
provided.
x x x (Emphasis supplied)
Clearly, there are adequate statutory limitations on LLDAs
power to impose fines which obviates unbridled discretion in the
exercise of such power.
WHEREFORE, we DENY the petition. We AFFIRM the
Decision dated 30 June 2004 and the Resolution dated 8 September 2004
of the Court of Appeals in CA-G.R. SP No. 75238.
SO ORDERED.