Você está na página 1de 77

REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST

DEVELOPMENT), petitioner, vs. HON. COURT OF APPEALS (THIRD


DIVISION) and JOSE Y. DE LA ROSA, respondents.
[G.R. No. L-44081. April 15, 1988.]
BENGUET CONSOLIDATED, INC., petitioner, vs. HON. COURT OF
APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and
EDUARDO, all surnamed DE LA ROSA, represented by their father
JOSE Y. DE LA ROSA, respondents.
[G.R. No. L-44092. April 15, 1988.]
ATOK-BIG WEDGE MINING COMPANY, petitioner, vs. HON. COURT
OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and
EDUARDO, all surnamed DE LA ROSA, represented by their father,
JOSE Y. DE LA ROSA, respondents.
SYLLABUS
1.
CONSTITUTIONAL LAW; CONSERVATION AND
UTILIZATION OF NATURAL RESOURCES; PERFECTED MINING
CLAIMS, A VESTED RIGHT; NOT AFFECTED BY EFFECTIVITY OF
1935 CONSTITUTION PROHIBITING ALIENATION OF MINERAL
LANDS. It is true that the subject property was considered forest land
and included in the Central Cordillera Forest Reserve, but this did not
impair the rights already vested in Benguet and Atok at that time. Such
rights were not affected either by the stricture in the Commonwealth
Constitution against the alienation of all lands of the public domain
except those agricultural in nature for this was made subject to existing
rights.
2.
ID.; ID.; ID.; ENFORCEABLE AGAINST THE GOVERNMENT.
The perfection of the mining claim converted the property to mineral
land and under the laws then in force removed it from the public domain.
By such act, the locators acquired exclusive rights over the land, against
even the government, without need of any further act such as the
purchase of the land or the obtention of a patent over it.
3.
CIVIL LAW; OBLIGATIONS AND CONTRACTS;
OWNERSHIP; OWNER OF LAND HAS RIGHTS OVER ITS SURFACE,
EVERYTHING UNDERNEATH IT AND AIRSPACE ABOVE IT. The
owner of a piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable
height. The Court feels that the rights over the land are indivisible and
that the land itself cannot be half agricultural and half mineral. The
classification must be categorical; the land must be either completely
mineral or completely agricultural.
4.
CONSTITUTIONAL LAW; REGALIAN DOCTRINE;
CONSTRUED. The Regalian doctrine reserves to the State all
minerals that may be found in public and even private land devoted to
"agricultural, industrial, commercial, residential or (for) any purpose
other than mining." Once minerals are discovered in the land, whatever
the use to which it is being devoted at the time, such use may be
discontinued by the State to enable it to extract the minerals therein in
the exercise of its sovereign prerogative. The land is thus converted to
mineral land and may not be used by any private party, including the
registered owner thereof, for any other purpose that will impede the
mining operations to be undertaken therein. For the loss sustained by
such owner, he is of course entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings.
DECISION
CRUZ, J p:

The Regalian doctrine reserves to the State all natural wealth that may
be found in the bowels of the earth even if the land where the discovery
is made be private. 1 In the cases at bar, which have been consolidated
because they pose a common issue, this doctrine was not correctly
applied.
These cases arose from the application for registration of a parcel of
land filed on February 11, 1965, by Jose de la Rosa on his own behalf
and on behalf of his three children, Victoria, Benjamin and Eduardo. The
land, situated in Tuding, Itogon, Benguet Province, was divided into 9
lots and covered by plan Psu-225009. According to the application, Lots
1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by
Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2
The application was separately opposed by Benguet Consolidated, Inc.
as to Lots 1-5, Atok Big Wedge Corporation, as to portions of Lots 1-5
and all of Lots 6-9, and by the Republic of the Philippines, through the
Bureau of Forestry Development, as to Lots 1-9. 3
In support of the application, both Balbalio and Alberto testified that they
had acquired the subject land by virtue of prescription. Balbalio claimed
to have received Lots 1-5 from her father shortly after the Liberation.
She testified she was born in the land, which was possessed by her
parents under claim of ownership. 4 Alberto said he received Lots 6-9 in
1961 from his mother, Bella Alberto, who declared that the land was
planted by Jaime and his predecessors-in-interest to bananas, avocado,
nangka and camote, and was enclosed with a barbed-wire fence. She
was corroborated by Felix Marcos, 67 years old at the time, who
recalled the earlier possession of the land by Alberto's father. 5 Balbalio
presented her tax declaration in 1956 and the realty tax receipts from
that year to 1964, 6 Alberto his tax declaration in 1961 and the realty tax
receipts from that year to 1964. 7
Benguet opposed on the ground that the June Bug mineral claim
covering Lots 1-5 was sold to it on September 22, 1934, by the
successors-in-interest of James Kelly, who located the claim in
September 1909 and recorded it on October 14, 1909. From the date of
its purchase, Benguet had been in actual, continuous and exclusive
possession of the land in concept of owner, as evidenced by its
construction of adits, its affidavits of annual assessment, its geological
mappings, geological samplings and trench side cuts, and its payment
of taxes on the land. 8
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9
were covered by the Emma and Fredia mineral claims located by
Harrison and Reynolds on December 25, 1930, and recorded on
January 2, 1931, in the office of the mining recorder of Baguio. These
claims were purchased from these locators on November 2, 1931, by
Atok, which has since then been in open, continuous and exclusive
possession of the said lots as evidenced by its annual assessment work
on the claims, such as the boring of tunnels, and its payment of annual
taxes thereon. 9
The location of the mineral claims was made in accordance with Section
21 of the Philippine Bill of 1902 which provided that:
"SEC. 21.All valuable mineral deposits in public lands in the Philippine
Islands both surveyed and unsurveyed are hereby declared to be free
and open to exploration, occupation and purchase and the land in which
they are found to occupation and purchase by the citizens of the United
States, or of said islands."
The Bureau of Forestry Development also interposed its objection,
arguing that the land sought to be registered was covered by the Central
Cordillera Forest Reserve under Proclamation No. 217 dated February
16, 1829. Moreover, by reason of its nature, it was not subject to
alienation under the Constitutions of 1935 and 1973. 10
The trial court ** denied the application, holding that the applicants had
failed to prove their claim of possession and ownership of the land
Natural Resources || Full Text Cases Prelim Exam || 1

sought to be registered. 11 The applicants appealed to the respondent


court, *** which reversed the trial court and recognized the claims of the
applicant, but subject to the rights of Benguet and Atok respecting their
mining claims. 12 In other words, the Court of Appeals affirmed the
surface rights of the de la Rosas over the land while at the same time
reserving the sub-surface rights of Benguet and Atok by virtue of their
mining claims. cdll
Both Benguet and Atok have appealed to this Court, invoking their
superior right of ownership. The Republic has filed its own petition for
review and reiterates its argument that neither the private respondents
nor the two mining companies have any valid claim to the land because
it is not alienable and registerable.
It is true that the subject property was considered forest land and
included in the Central Cordillera Forest Reserve, but this did not impair
the rights already vested in Benguet and Atok at that time. The Court of
Appeals correctly declared that:
"There is no question that the 9 lots applied for are within the June Bug
mineral claims of Benguet and the 'Fredia and Emma' mineral claims of
Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16
mining claims of James E. Kelly, an American and mining locator. He
filed his declaration of the location of the June Bug mineral and the
same was recorded in the Mining Recorder's Office on October 14,
1909. All of the Kelly claims had subsequently been acquired by
Benguet Consolidated, Inc. Benguet's evidence is that it had made
improvements on the June Bug mineral claim consisting of mine tunnels
prior to 1935. It had submitted the required affidavit of annual
assessment. After World War II, Benguet introduced improvements on
mineral claim June Bug, and also conducted geological mappings,
geological sampling and trench side cuts. In 1948, Benguet redeclared
the 'June Bug' for taxation and had religiously paid the taxes.
"The Emma and Fredia claims were two of the several claims of
Harrison registered in 1931, and which Atok representatives acquired.
Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and
Fredia mineral claims of Atok Big Wedge Mining Company. prcd
"The June Bug mineral claim of Benguet and the Fredia and Emma
mineral claims of Atok having been perfected prior to the approval of the
Constitution of the Philippines of 1935, they were removed from the
public domain and had become private properties of Benguet and Atok.
'It is not disputed that the location of the mining claim under
consideration was perfected prior to November 15, 1935, when the
Government of the Commonwealth was inaugurated; and according to
the laws existing at that time, as construed and applied by this court in
McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid location of a
mining claim segregated the area from the public domain. Said the court
in that case: 'The moment the locator discovered a valuable mineral
deposit on the lands located, and perfected his location in accordance
with law, the power of the United States Government to deprive him of
the exclusive right to the possession and enjoyment of the located claim
was gone, the lands had become mineral lands and they were
exempted from lands that could be granted to any other person. The
reservations of public lands cannot be made so as to include prior
mineral perfected locations; and, of course, if a valid mining location is
made upon public lands afterwards included in a reservation, such
inclusion or reservation does not affect the validity of the former
location. By such location and perfection, the land located is segregated
from the public domain even as against the Government. (Union Oil Co.
v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc.
546).
'The legal effect of a valid location of a mining claim is not only to
segregate the area from the public domain, but to grant to the locator
the beneficial ownership of the claim and the right to a patent therefor

upon compliance with the terms and conditions prescribed by law.


Where there is a valid location of a mining claim, the area becomes
segregated from the public domain and the property of the locator.' (St.
Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43
Law ed., 320, 322.) 'When a location of a mining claim is perfected it
has the effect of a grant by the United States of the right of present and
exclusive possession, with the right to the exclusive enjoyment of all the
surface ground as well as of all the minerals within the lines of the claim,
except as limited by the extralateral right of adjoining locators; and this
is the locator's right before as well as after the issuance of the patent.
While a lode locator acquires a vested property right by virtue of his
location made in compliance with the mining laws, the fee remains in the
government until patent issues.' (18 R.C.L. 1152)' (Gold Creek Mining
Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and
Commerce, and Quirico Abadilla, Director of the Bureau of Mines, 66
Phil. 259, 265-266). cdll
"It is of no importance whether Benguet and Atok had secured a patent
for as held in the Gold Creek Mining Corp. Case, for all physical
purposes of ownership, the owner is not required to secure a patent as
long as he complies with the provisions of the mining laws; his
possessory right, for all practical purposes of ownership, is as good as
though secured by patent.
"We agree likewise with the oppositors that having complied with all the
requirements of the mining laws, the claims were removed from the
public domain, and not even the government of the Philippines can take
away this right from them. The reason is obvious. Having become the
private properties of the oppositors, they cannot be deprived thereof
without due process of law." 13
Such rights were not affected either by the stricture in the
Commonwealth Constitution against the alienation of all lands of the
public domain except those agricultural in nature for this was made
subject to existing rights. Thus, in its Article XIII, Section 1, it was
categorically provided that:
"SEC. 1. All agricultural, timber and mineral lands of the public domain,
waters, minerals, coal, petroleum and other mineral oils, all forces of
potential energy and other natural resources of the Philippines belong to
the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines or to corporations or
associations at least 60% of the capital of which is owned by such
citizens, subject to any existing right, grant, lease or concession at the
time of the inauguration of the government established under this
Constitution. Natural resources with the exception of public agricultural
lands, shall not be alienated, and no license, concession, or lease for
the exploitation, development or utilization of any of the natural
resources shall be granted for a period exceeding 25 years, except as to
water rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, in which case beneficial use may
be the measure and the limit of the grant."
Implementing this provision, Act No. 4268, approved on November 8,
1935, declared:
"Any provision of existing laws, executive order, proclamation to the
contrary notwithstanding, all locations of mining claim made prior to
February 8, 1935 within lands set apart as forest reserve under Sec.
1826 of the Revised Administrative Code which would be valid and
subsisting location except to the existence of said reserve are hereby
declared to be valid and subsisting locations as of the date of their
respective locations."
The perfection of the mining claim converted the property to mineral
land and under the laws then in force removed it from the public domain.
14 By such act, the locators acquired exclusive rights over the land,
against even the government, without need of any further act such as
Natural Resources || Full Text Cases Prelim Exam || 2

the purchase of the land or the obtention of a patent over it. 15 As the
land had become the private property of the locators, they had the right
to transfer the same, as they did, to Benguet and Atok.
It is true, as the Court of Appeals observed, that such private property
was subject to the "vicissitudes of ownership," or even to forfeiture by
non-user or abandonment or, as the private respondents aver, by
acquisitive prescription. However, the method invoked by the de la
Rosas is not available in the case at bar, for two reasons.
First, the trial court found that the evidence of open, continuous,
adverse and exclusive possession submitted by the applicants was
insufficient to support their claim of ownership. They themselves had
acquired the land only in 1964 and applied for its registration in 1965,
relying on the earlier alleged possession of their predecessors-ininterest. 16 The trial judge, who had the opportunity to consider the
evidence first-hand and observe the demeanor of the witnesses and test
their credibility was not convinced. We defer to his judgment in the
absence of a showing that it was reached with grave abuse of discretion
or without sufficient basis. 17
Second, even if it be assumed that the predecessors-in-interest of the
de la Rosas had really been in possession of the subject property, their
possession was not in the concept of owner of the mining claim but of
the property as agricultural land, which it was not. The property was
mineral land, and they were claiming it as agricultural land. They were
not disputing the rights of the mining locators nor were they seeking to
oust them as such and to replace them in the mining of the land. In fact,
Balbalio testified that she was aware of the diggings being undertaken
"down below" 18 but she did not mind, much less protest, the same
although she claimed to be the owner of the said land.
The Court of Appeals justified this by saying there is "no conflict of
interest" between the owners of the surface rights and the owners of the
sub-surface rights. This is rather strange doctrine, for it is a well-known
principle that the owner of a piece of land has rights not only to its
surface but also to everything underneath and the airspace above it up
to a reasonable height. 19 Under the aforesaid ruling, the land is
classified as mineral underneath and agricultural on the surface, subject
to separate claims of title. This is also difficult to understand, especially
in its practical application. cdll
Under the theory of the respondent court, the surface owner will be
planting on the land while the mining locator will be boring tunnels
underneath. The farmer cannot dig a well because he may interfere with
the mining operations below and the miner cannot blast a tunnel lest he
destroy the crops above. How deep can the farmer, and how high can
the miner, go without encroaching on each other's rights? Where is the
dividing line between the surface and the sub-surface rights?
The Court feels that the rights over the land are indivisible and that the
land itself cannot be half agricultural and half mineral. The classification
must be categorical; the land must be either completely mineral or
completely agricultural. In the instant case, as already observed, the
land which was originally classified as forest land ceased to be so and
became mineral and completely mineral once the mining claims
were perfected. 20 As long as mining operations were being undertaken
thereon, or underneath, it did not cease to be so and become
agricultural, even if only partly so, because it was enclosed with a fence
and was cultivated by those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act No.
137, providing as follows:
"Sec. 3. All mineral lands of the public domain and minerals belong to
the State, and their disposition, exploitation, development or utilization,
shall be limited to citizens of the Philippines, or to corporations, or
associations, at least 60% of the capital of which is owned by such
citizens, subject to any existing right, grant, lease or concession at the

time of the inauguration of government established under the


Constitution."
"SEC. 4. The ownership of, and the right to the use of land for
agricultural, industrial, commercial, residential, or for any purpose other
than mining does not include the ownership of, nor the right to extract or
utilize, the minerals which may be found on or under the surface."
"SEC. 5. The ownership of, and the right to extract and utilize, the
minerals included within all areas for which public agricultural land
patents are granted are excluded and excepted from all such patents."
"SEC. 6. The ownership of, and the right to extract and utilize, the
minerals included within all areas for which Torrens titles are granted are
excluded and excepted from all such titles."
This is an application of the Regalian doctrine which, as its name
implies, is intended for the benefit of the State, not of private persons.
The rule simply reserves to the State all minerals that may be found in
public and even private land devoted to "agricultural, industrial,
commercial, residential or (for) any purpose other than mining." Thus, if
a person is the owner of agricultural land in which minerals are
discovered, his ownership of such land does not give him the right to
extract or utilize the said minerals without the permission of the State to
which such minerals belong.
The flaw in the reasoning of the respondent court is in supposing that
the rights over the land could be used for both mining and non-mining
purposes simultaneously. The correct interpretation is that once
minerals are discovered in the land, whatever the use to which it is
being devoted at the time, such use may be discontinued by the State to
enable it to extract the minerals therein in the exercise of its sovereign
prerogative. The land is thus converted to mineral land and may not be
used by any private party, including the registered owner thereof, for any
other purpose that will impede the mining operations to be undertaken
therein. For the loss sustained by such owner, he is of course entitled to
just compensation under the Mining Laws or in appropriate expropriation
proceedings. 21
Our holding is that Benguet and Atok have exclusive rights to the
property in question by virtue of their respective mining claims which
they validly acquired before the Constitution of 1935 prohibited the
alienation of all lands of the public domain except agricultural lands,
subject to vested rights existing at the time of its adoption. The land was
not and could not have been transferred to the private respondents by
virtue of acquisitive prescription, nor could its use be shared
simultaneously by them and the mining companies for agricultural and
mineral purposes.
WHEREFORE, the decision of the respondent court dated April 30,
1976, is SET ASIDE and that of the trial court dated March 11, 1969, is
REINSTATED, without any pronouncement as to costs. LibLex
SO ORDERED.
G.R. No. L-49623 June 29, 1982
MANILA ELECTRIC COMPANY vs. FLORELIANA CASTROBARTOLOME, ET AL.

EN BANC
[G.R. No. L-49623. June 29, 1982.]

Natural Resources || Full Text Cases Prelim Exam || 3

MANILA ELECTRIC COMPANY, petitioner-appellant, vs. JUDGE


FLORELIANA CASTRO-BARTOLOME of the Court of First Instance of
Rizal, Makati Branch XV, and REPUBLIC OF THE PHILIPPINES,
respondents-appellees.

the rule would be any land that should have been in the possession of
an occupant and of his predecessors-in-interest since time immemorial,
for such possession would justify the presumption that the land had
never been part of the public domain or that it had been a private
property even before the Spanish conquest." (Cario vs. Insular
Government, 212 U. S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132).

Quiason, de Guzman, Makalintal, Veneracion & Barot for

3.
ID.; ID.; ID.; ID.; CONCLUSIVE PRESUMPTION ON LONG
POSSESSION UNDER A BONA FIDE CLAIM OF OWNERSHIP;
ISSUANCE OF CERTIFICATE OF TITLE, AN ESSENTIAL
PREREQUISITE. Petitioner relies on the ruling in Susi vs. Razon and
Director of Lands, 48 Phil. 424, which is based on the Cario case
where this Court applied Section 45 (b) of Act No. 2874 which
corresponds to what is now Section 48 (b) of the Public Land Law and
held that the long possession of the land under a bona fide claim of
ownership since July 26, 1894 gave rise to the conclusive presumption
that the occupant had complied with all the conditions essential to a
Government grant and was thus entitled so a certificate of title. But the
land involved in the Susi case was possessed before 1880 or since a
period of time "beyond the reach of memory." That is not she situation in
the case at bar. The Meralco does not pretend that the Piguing spouses
and their predecessors had been in possession of the land since time
immemorial. On the other hand, in Uy Un vs. Perez, 71 Phil. 508, 51011, it was held that until the certificate of title is issued, a piece of land,
over which an imperfect title is sought to be confirmed, remains public
land. For that reason, lands over which an imperfect title sought to be
confirmed are governed by the Public Land Law. Such lands would not
be covered by the Public Land Law if they were already private lands.
The occupants' right to the said lands is characterized in the Uy Un
case, not as ownership in fee simple, but as a derecho dominical
incoativo.

petitioner-appellant.
Tajalla, Gagarin & Cruz for private respondent.
The Solicitor General for respondent-appellee.

SYNOPSIS
Petitioner Manila Electric Company, a domestic corporation organized
under Philippine Laws, more than sixty percent of whose capital stock is
owned by Filipino citizens, applied in the Court of First Instance of Rizal
for the confirmation of its title to two residential lots Nos. 1164 and 1165
subdivided in the Cadastral Survey of the Bureau of Lands. Petitioner
acquired subject land which was declared for realty tax purposes since
1945 with taxes paid up to 1977, from its predecessors-in-interest
whose possession although dating back from 1941, did not apply for the
registration of said land. The application was opposed by the Republic
of the Philippines on the ground of petitioner's disqualification to make
such application and by the Province of Rizal and by the Municipality of
Tanay claiming that Lot 1165 would be needed for the improvement of
the streets of Tanay. The lower court dismissed the application.
On review by certiorari, the Supreme Court ruled that the land in
question is still public land. The Meralco, being a juridical person, is
disqualified to apply for its registration under Section 48 (b) of she
Public Land Law. Its predecessors-in-interest, not having applied for its
registration, did not have any vested right or title which was
transmissible to the petitioner-applicant.
Judgment affirmed.

SYLLABUS
1.
CIVIL LAW; PUBLIC LAND LAW; JUDICIAL CONFIRMATION
OF IMPERFECT OR INCOMPLETE TITLE; JURIDICAL PERSONS
ARE DISQUALIFIED TO APPLY. A public land would cease to be
such only upon the issuance of the certificate of title so any Filipino
citizen claiming it under Section 48 (b) of the Public Land Law. Because
it is still public land and the Meralco, as a juridical person, is disqualified
to apply for its registration under aforesaid law, Meralco's application
cannot be given due course or has to be dismissed.
2.
ID.; ID.; ID.; PERVASIVE PRINCIPLE ON LAND
OWNERSHIP UNDER BOTH PUBLIC LAND LAW AND LAND
REGISTRATION LAW; GENERAL RULE; EXCEPTION. This
conclusion is supported by the rule announced in Oh Cho vs. Director of
Lands, 75 Phil. 890, 892, which rule is a compendious or quintessential
precis of a pervasive principle of public land law and land registration
law, that "all lands that were not acquired from the Government, either
by purchase or by grant, belong to the public domain. An exception to

4.
ID.; ID.; ID.; CONDITION PRECEDENT FOR GRANT OF
BENEFITS THEREUNDER; RIGHTS TRANSFERRABLE BY
PREDECESSORS-IN-INTEREST; CASE AT BAR. "The benefits
provided in the Public Land Act (meaning the confirmation of an
imperfect title under section 48[b]) for applicant's immediate
predecessors-in-interest are or constitute a grant or concession by the
State; and before they could acquire any right under such benefits, the
applicant's immediate predecessors-in-interest should comply with the
condition precedent for the grant of such benefits. The condition
precedent is to apply for the registration of the land of which they had
been in possession at least since July 26, 1894. This the applicant's
immediate predecessors-in-interest (meaning the Piguing spouses in
the instant case) failed to do. "They did not have any vested right in the
lot amounting to title which was transmissible to the applicant. The only
right, if it may thus be called, is their possession of the lot which, tacked
to that of their predecessors-in-interest, may be availed of by a qualified
person to apply for its registration but not by a person as the applicant
who is disqualified." (Oh Cho vs. Director of Lands, 75 Phil. 890, 893.)
5.
STATUTORY CONSTRUCTION; ART. XIV SECTION II OF
THE CONSTITUTION; PROHIBITION AGAINST PRIVATE
CORPORATIONS FROM HOLDING ALIENABLE PUBLIC LAND;
INTERPRETED TO INCLUDE ALIENABLE PUBLIC LANDS TO WHICH
A TORRENS TITLE MAY BE SECURED UNDER SECTION 48 (b) OF
THE PUBLIC LAND LAW. Where Section 11 of Article XIV of the
Constitution makes no distinction between (on one hand) alienable
agricultural public lands as to which no occupant has an imperfect title
and (on the other hand) alienable lands of the public domain as to which
an occupant has an imperfect title subject to judicial confirmation, the
Supreme Court will not make any distinction or qualification. The
Natural Resources || Full Text Cases Prelim Exam || 4

prohibition applies to alienable public lands as to which a Torrens title


may be secured under Section 48 (b). The proceeding under Section 48
(b) "presupposes that the land is public" (Mindanao vs. Director of
Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

FERNANDO, C.J., concurring and dissenting:


1.
CONSTITUTIONAL LAW; ALIENABLE LANDS OF THE
PUBLIC DOMAIN; SECTION 48 OF THE PUBLIC LAND (B) CANNOT
BE AVAILED OF BY JURIDICAL ENTITIES. Chief Justice Fernando
concurs in the ruling of the Court that Meralco "as a juridical person" is
disqualified to apply for the registration of the lands acquired by it under
Section 48 (b) of the Public Land Act.
2.
ID.; ID.; ID.; LEGAL QUESTION RAISED CAN BE DECIDED
DESPITE THE JURISDICTIONAL DEFECT. Chief Justice Fernando
dissents insofar as the opinion of the Court would characterize such
jurisdictional defect, under the particular circumstances of the case, as
an insurmountable obstacle to the relief sought. He would apply by
analogy, although the facts could be distinguished, the approach
followed by the Court in Francisco v. City of Davao, 120 Phil. 1417
(1964) where the legal question raised, instead of being deferred and
possibly taken up in another case, was resolved. By legal fiction and in
the exercise of the Court's equitable jurisdiction, the writer feels that the
realistic solution would be to decide the matter as if the application
under Section 48 (b) were filed by the Piguing spouses, who suffer from
no such disability.

ABAD SANTOS, J., concurring:


1.
CIVIL LAW; LAND REGISTRATION; PUBLIC LAND ACT;
CORPORATION CANNOT ASK FOR CONFIRMATION OF ITS TITLE
OVER PRIVATE LAND UNDER SECTION 48 OF THE STATUTE.
Concurring in the result, Justice Abad Santos is of the opinion that the
lots which are sought to be registered have ceased to be lands of the
public domain at the time they were acquired by petitioner corporation.
They are already private lands because of acquisitive prescription by the
predecessors of the petitioner and all that is needed is the confirmation
of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain
is inapplicable. However, the petitioner is relying on Sec. 48 of the
Public Land Act for the confirmation of its title and Mr. Justice Aquino is
correct in holding that said provision cannot be availed by juridical
entities.

DE CASTRO, J., concurring opinion:


1.
CIVIL LAW; LAND REGISTRATION; PUBLIC LAND ACT; THE
LAND INVOLVED IN THE PRESENT CASE HAS NOT YET BECOME
PRIVATE LAND THERE BEING NO AWARD YET OF TITLE BY THE
COURTS. I cannot subscribe to the view that the land as above
described has become private land even before title thereto, which is, as
of this stage, said to be still "an incomplete or imperfect title," has been
fully vested on the occupant, through the prescribed procedure known
as judicial confirmation of incomplete or imperfect title. This is the only
legal method by which full and absolute title to the land may be granted,

to convert the land into a truly private land. To secure such judicial title,
only the courts can be resorted to.
2.
ID.; ID.; ID.; ID.; ONLY WHEN THE COURT ADJUDICATES
THE LAND TO THE APPLICANT FOR CONFIRMATION OF TITLE
WOULD THE LAND BECOME PRIVATELY OWNED. It is because of
the divestiture of authority of the Bureau of Lands to dispose of the land
subject to judicial confirmation of incomplete and imperfect title that
some statements are found in many cases, such as those cited by
Justice Teehankee, to the effect that such land has ceased to be public
land. What these statements, however, really mean is that the land
referred to no longer forms part of the mass of public domain still
disposable by the Director of Lands, under the authority granted him by
the public land statutes. It, however, would not follow that the land
covered by Section 48 of the Public Land Act has itself become private
land. The fact that its disposition is provided for in the aforecited Act
which deals with "public land" gives rise to the very strong implication, if
not a positive conclusion, that the land referred to is still public land.
Only when the court adjudicates the land to the applicant for
confirmation of title would the land become privately owned land, for in
the same proceeding, the court may declare it public land, depending on
the evidence.
3.
CONSTITUTIONAL LAW; SECTIONS 11 AND 14, ARTICLE
XIV, 1973 CONSTITUTION; MERALCO AND IGLESIA NI CRISTO, AS
JURIDICAL PERSONS, CANNOT ACQUIRE SUBJECT PARCELS OF
LAND WHETHER THEY ARE STILL PUBLIC OR ALREADY PRIVATE
LAND. The discussion of the question of whether the land involved is
still public or already private land is, however, entirely pointless, or an
idle exercise, if We consider the provision of Section 14, Article XIV of
the Constitution which appears to have been lost sight of, which
provides that "save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals, corporations, or
association qualified to acquire or hold land of the public domain." As
previously stated, by express provision of the Constitution (Section II,
Article XIV), no corporation or association may hold alienable lands of
the public domain except by lease, not to exceed 1,000 hectares in
area. Hence, even if the land involved in the present case is considered
private land, the cited section prohibits its acquisition by the Meralco or
Iglesia Ni Cristo which admittedly are "corporations or association"
within the meaning of the aforecited provision of the New Constitution.
This observation should end all arguments on the issue of whether the
land in question is public or private land.

TEEHANKEE, J., dissenting :


1.
CIVIL LAW; LAND REGISTRATION; PUBLIC LAND ACT;
PROHIBITION AGAINST PRIVATE CORPORATIONS HOLDING
LANDS OF PUBLIC DOMAIN, NOT APPLICABLE WHERE LANDS
INVOLVED WERE ALREADY PRIVATE LANDS BY OPERATION OF
LAW, WHEN ACQUIRED BY PRIVATE CORPORATIONS; CASE AT
BAR. This dissent is based on the failure of the majority to adhere to
established doctrine in the 1909 case of Cario and the 1925 case of
Susi down to the 1980 case of Herico, pursuant to the Public Land Act,
as amended, that where a possessor has held the open, exclusive and
unchallenged possession of alienable public land for the statutory period
provided by law (30 years now under amendatory Rep. Act No. 1942
approved on June 22, 1957), the law itself mandates that the possessor
"shall be considered to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title" and "by
Natural Resources || Full Text Cases Prelim Exam || 5

legal fiction (the land) has already caused to be of the public domain
and has become private property." Accordingly, the prohibition of the
1973 Constitution and of the Public Land Act against private corporation
holding lands of the public domain has no applicability in the present
cases. What Meralco and Iglesia ni Cristo have acquired from their
predecessors-in-interest had already ceased to be of the public domain
and had become private property at the time of the sale to them and
therefore their application for confirmation of title by virtue of their
predecessor-in-interest vested right and title may be duly granted I hold
that both application for registration should be granted and that
accordingly the judgment in the Meralco case should be reversed and a
new judgment entered granting Meralco's application, while the
judgment in the Iglesia case should stand affirmed.
2.
ID.; ID.; ID.; ID.; MAJORITY OPINION THAT MERALCO AND
IGLESIA NI CRISTO AS JURIDICAL PERSONS ARE NOT QUALIFIED
TO APPLY FOR CONFIRMATION OF TITLE. To uphold respondent
judge's denial of Meralco's application on the technicality that the Public
Land Act allows only citizens of the Philippines who are natural persons
to apply for confirmation of their title would be impractical and would just
give rise to multiplicity of court action. Assuming that there was a
technical error in not having filed the application for registration in the
name of the Piguing spouses as the original owners and vendors, still it
is conceded that there is no prohibition against the sale of the land to
the applicant Meralco and neither is there any prohibition against the
application being refiled with retroactive effect in the name of the original
owners and vendors (as such natural persons) with the result of their
application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein
provided in their favor. It should not be necessary to go through all the
rituals at the great cost of refiling of all such application in their names
and adding to the overcrowded court dockets when the Court can after
all these years dispose of it here and now (See Francisco vs. City of
Davao, 12 SCRA 628, 634). The ends of justice would best be served,
therefore, by considering the application for confirmation as amended to
conform to the evidence, i.e., as filed in the names of the original
persons who as natural persons are duly qualified to apply for formal
confirmation of the title that they had acquired by conclusive
presumption and mandate of the Public Land Act and who thereafter
duly sold to the herein corporations (both admittedly Filipino
corporations duly qualified to hold and own private lands) and granting
the applications for confirmation of title to the private lands so acquired
and sold or exchanged. All that has been said applies of course with
equal force to the Iglesia ni Cristo case, save that as already stated, the
Iglesia application was granted because the Republic presented no
evidence in support of its opposition and respondent judge held in effect
that the property had ceased to be land of the public domain and had
become private property, the title to which could be duly issued in the
name of the Iglesia ni Cristo as the transferee of its predecessors-ininterest.
3.
CONSTITUTIONAL LAW; SECTIONS 9 AND 14, ARTICLE
XIV, 1973 CONSTITUTION; MERALCO AS A FILIPINO
CORPORATION IS QUALIFIED TO OWN PRIVATE LAND. It only
remains to point out, in order to avoid misapprehension or confusion,
that Mr. Justice de Castro's seemingly querulous statement that "the
discussion of the question of whether the land involved is still public or
already private land, is however, entirely pointless or an idle exercise, if
We consider the provision of Section 14, Article XIV of the Constitution
which appears to have been lost sight of, which provides that "save in
cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or association qualified to

acquire or hold lands of the public domain" hence, even if the land
involved in the present case is considered private land, the cited section
prohibits its acquisition by the Meralco or Iglesia which admittedly are
"corporations or associations" within the meaning of the aforecited
provision of the New Constitution. This observation should end all
arguments on the issue of whether the land in question is public or
private land" (idem) might mislead one to the wrong conclusion that
corporations with 60% Filipino ownership may not own private lands
when the express provisions of Art. XIV, section 9 and Section 14 as
quoted by himself as well as the counterpart provisions of the 1935
Constitution have always expressly permitted Filipino-owned
corporations to own private lands, and the only change effected in the
1973 Constitution is Section 11 which now prohibits even such Filipino
corporations to own or hold land of the public domain except by lease
not to exceed 1,000 hectares in area.

DECISION

AQUINO, J p:
This case involves the prohibition in section 11, Article XIV of the
Constitution that "no private corporation or association may hold
alienable lands of the public domain except by lease not to exceed one
thousand hectares in area". * That prohibition is not found in the 1935
Constitution.
The Manila Electric Company, a domestic corporation organized under
Philippine laws, more than sixty percent of whose capital stock is owned
by Filipino citizens, in its application filed on December 1, 1976 in the
Makati branch of the Court of First Instance of Rizal, prayed for the
confirmation of its title to two lots with a total area of one hundred sixtyfive square meters, located at Tanay, Rizal with an assessed value of
P3,270 (LRC Case No. N-9485, LRC Record No. N-50801).
The Republic of the Philippines opposed the application on the grounds
that the applicant, as a private corporation, is disqualified to hold
alienable public lands and that the applicant and its predecessors-ininterest have not been in the open, continuous, exclusive and notorious
possession and occupation of the land for at least thirty years
immediately preceding the filing of the application (pp. 65-66, Rollo).
After the trial had commenced, the Province of Rizal and the
Municipality of Tanay filed a joint opposition to the application on the
ground that one of the lots, Lot No. 1165 of the Tanay cadastre, would
be needed for the widening and improvement of Jose Abad Santos and
E. Quirino Streets in the town of Tanay.
The land was possessed by Olimpia Ramos before the Pacific war
which broke out in 1941. On July 3, 1947, Ramos sold the land to the
spouses Rafael Piguing and Minerva Inocencio (Exh. K). The Piguing
spouses constructed a house thereon. Because the Meralco had
installed the "anchor guy" of its steel post on the land, the Piguing
spouses sold the lot to the Meralco on August 13, 1976.
The said land was included in the 1968 cadastral survey made in Tanay
by the Bureau of Lands, Plan AP-04-000902 (Exh. F and H) and was
divided into two lots, Lots Nos. 1164 and 1165, so as to segregate Lot
No. 1165 which would be used to widen the two streets serving as the
land's eastern and southern boundaries.
Natural Resources || Full Text Cases Prelim Exam || 6

The land was declared for realty tax purposes since 1945 and taxes had
been paid thereon up to 1977. It is residential in character as
distinguished from a strictly agricultural land. It is not included in any
military reservation. Since 1927, it has formed part of the alienable
portion of the public domain.

of title except when prevented by war or force majeure. These shall be


conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the
provisions of this chapter. (As amended by Republic Act No. 1942,
approved on June 22, 1957.)

After trial, the lower court rendered a decision dismissing the application
because in its opinion the Meralco is not qualified to apply for the
registration of the said land since under section 48(b) of the Public Land
Law only Filipino citizens or natural persons can apply for judicial
confirmation of their imperfect titles to public land. The Meralco is a
juridical person. The trial court assumed that the land which it seeks to
register is public land.

xxx

From that decision, the Meralco appealed to this Court under Republic
Act No. 5440.
It contends that the said land, after having been possessed in the
concept of owner by Olimpia Ramos and the Piguing spouses for more
than thirty years, had become private land in the hands of the latter,
and, therefore, the constitutional prohibition, banning a private
corporation from acquiring alienable public land, is not applicable to the
said land.
The Meralco further contends that it has invoke section 48(b) of the
Public Land Law, not for itself, but for the Piguing spouses who, as
Filipino citizens, could secure a judicial confirmation of their imperfect
title to the land.
In reply to these contentions, the Solicitor General counters that the said
land is not private land because the Meralco and its predecessors-ininterest have no composition title from the Spanish government nor
possessory information title or any other means for the acquisition of
public lands such as grants or patents (Republic vs. Court of Appeals
and De Jesus, L-40912, September 30, 1976, 73 SCRA 146, 157;
Director of Lands vs. Reyes, L-27594, November 28, 1975, and
Alinsunurin vs. Director of Lands, L-28144, November 28, 1975; 68
SCRA 177; 195; Lee Hong Hok vs. David, L-30389, December 27,
1972, 48 SCRA 372, 378-9; Director of Lands vs. Court of Appeals and
Raymundo, L-29575, April 30, 1971, 38 SCRA 634, 639; Padilla vs.
Reyes and Director of Lands, 60 Phil. 967, 969; Heirs of Datu Pendatun
vs. Director of Lands, 59 Phil. 600, 603).
The Public Land Law provides:
"CHAPTER VIII. Judicial confirmatin of imperfect or incomplete titles.
xxx

xxx

xxx

"SEC. 48.The following described citizens of the Philippines, occupying


lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed,
may apply to the Court of First Instance of the province where the land
is located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:
xxx

xxx

xxx

"(b)
Those who by themselves or through their predecessors in
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain,
under a bona fide claim of acquisition of ownership, for at least thirty
years immediately preceding the filing of the application for confirmation

xxx

xxx

"SEC. 49.No person claiming title to lands of the public domain not in
possession of the qualifications specified in the last preceding section
may apply for the benefits of this chapter."
We hold that, as between the State and the Meralco, the said land is still
public land. It would cease to be public land only upon the issuance of
the certificate of title to any Filipino citizen claiming it under section
48(b). Because it is still public land and the Meralco, as a juridical
person, is disqualified to apply for its registration under section 48(b),
Meralco's application cannot be given due course or has to be
dismissed.
This conclusion is supported by the rule announced in Oh Cho vs.
Director of Lands, 75 Phil. 890, 892, which rule is a compendious or
quintessential precis of a pervasive principle of public land law and land
registration law, that "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public
domain. An exception to the rule would be any land that should have
been in the possession of an occupant and of his predecessors-ininterest since time immemorial, for such possession would justify the
presumption that the land had never been part of the public domain or
that it had been a private property even before the Spanish conquest."
(Cario vs. Insular Government, 212 U. S. 449, 53 L. ed. 594, 41 Phil.
935 and 7 Phil. 132).
The Meralco relies on the ruling in Susi vs. Razon and Director of
Lands, 48 Phil. 424, that "an open, continuous, adverse and public
possession of a land of the public domain from time immemorial by a
private individual personally and through his predecessors confers an
effective title on said possessor, whereby the land ceases to be public"
and becomes private property.
That ruling is based on the Cario case which is about the possession
of land by an Igorot and his ancestors since time immemorial or even
before the Spanish conquest. The land involved in the Susi case was
possessed before 1880 or since a period of time "beyond the reach of
memory". That is not the situation in this case. The Meralco does not
pretend that the Piguing spouses and their predecessor had been in
possession of the land since time immemorial.
In the Susi case, this Court applied section 45(b) of Act No. 2874 which
corresponds to what is now section 48(b). It was held that the long
possession of the land under a bona fide claim of ownership since July
26, 1894 gave rise to the conclusive presumption that the occupant had
complied with all the conditions essential to a Government grant and
was thus entitled to a certificate of title.
On the other hand, in Uy Un vs. Perez, 71 Phil. 508, 510-11, it was held
that while occupants of public land, who have applied for the
confirmation of their title, "teian asimismo a su favor la presuncion juris
et de jure de que habian cumplido con todas las condiciones necesarias
para la concesion del titulo; pero hasta que el titulo se expida no tenian
el concepto juridico de ser los verdaderos dueos del terreno in ste
Natural Resources || Full Text Cases Prelim Exam || 7

dejo" de pertenecer a los terrenos publicos del Estado susceptibles de


enajenacion."
That means that until the certificate of title is issued, a piece of land,
over which an imperfect title is sought to be confirmed, remains public
land. For that reason in the Uy Un case, it was held that if that land was
attached by a judgment creditor of the applicant, while his application for
confirmation of his imperfect title was pending in the Bureau of Lands,
the levy and execution sale of the land were void.
For that same reason, lands over which an imperfect title is sought to be
confirmed are governed by the Public Land Law. Such lands would not
be covered by the Public Land Law if they were already private lands.
The occupants' right to the said lands is characterized in the Uy Un
case, not as ownership in fee simple, but as derecho dominical
incoativo.
The Meralco in its concluding argument contends that if the Piguing
spouses could ask for the confirmation of their imperfect title to the said
lands, then why should the Meralco, as their transferee, be denied the
same right to register the said land in its name, there being no legal
prohibition for the Piguing spouses from selling the land to the Meralco?
This Court in disposing of that same contention in the Oh Cho case
said: cdrep
"The benefits provided in the Public Land Act (meaning the confirmation
of an imperfect title under section 48[b]) for applicant's immediate
predecessors-in-interest are or constitute a grant or concession by the
State; and before they could acquire any right under such benefits, the
applicant's immediate predecessors-in-interest should comply with the
condition precedent for the grant of such benefits.
"The condition precedent is to apply for the registration of the land of
which they had been in possession at least since July 26, 1894. This the
applicant's immediate predecessors-in-interest (meaning the Piguing
spouses in the instant case) failed to do.
"They did not have any vested right in the lot amounting to title which
was transmissible to the applicant. The only right, if it may thus be
called, is their possession of the lot which, tacked to that of their
predecessors-in-interest, may be availed of by a qualified person to
apply for its registration but not by a person as the applicant who is
disqualified." (75 Phil. 890, 893.)
Finally, it may be observed that the constitutional prohibition makes no
distinction between (on one hand) alienable agricultural public lands as
to which no occupant has an imperfect title and (on the other hand)
alienable lands of the public domain as to which an occupant has an
imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make
any distinction or qualification. The prohibition applies to alienable public
lands as to which a Torrens title may be secured under section 48(b).
The proceeding under section 48(b) "presupposes that the land is
public" (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20
SCRA 641, 644).
The lower court's judgment dismissing Meralco's application is affirmed.
Costs against the petitioner-appellant.
SO ORDERED.

DIRECTOR OF LANDS vs. INTERMEDIATE APPELLATE COURT, ET


AL.

EN BANC
[G.R. No. 73002. December 29, 1986.]

THE DIRECTOR OF LANDS, petitioner, vs. INTERMEDIATE


APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC.,
ETC., respondents.

D. Nacion Law Office for private respondent.

DECISION

NARVASA, J p:
The Director of Lands has brought this appeal by certiorari from a
judgment of the Intermediate Appellate Court affirming a decision of the
Court of First Instance of Isabela, which ordered registration in favor of
Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481,
390 square meters, more or less, acquired by it from Mariano and Acer
Infiel, members of the Dumagat tribe.
The registration proceedings were for confirmation of title under Section
48 of Commonwealth Act No. 141 (The Public Land Act). as amended;
and the appealed judgment sums up the findings of the trial court in said
proceedings in this wise:
"1.
That Acme Plywood & Veneer Co. Inc., represented by Mr.
Rodolfo Nazario is a corporation duly organized in accordance with the
laws of the Republic of the Philippines and registered with the Securities
and Exchange Commission on December 23, 1959;
2.
That Acme Plywood & Veneer Co. Inc., represented by Mr.
Rodolfo Nazario can acquire real properties pursuant to the provisions
of the Articles of Incorporation particularly on the provision of its
secondary purposes (paragraph (9), Exhibit 'M-1');
3.
That the land subject of the Land Registration proceeding was
ancestrally acquired by Acme Plywood & Veneer Co., Inc., on October
29, 1962, from Mariano Infiel and Acer Infiel, both members of the
Dumagat tribe and as such are cultural minorities;
4.
That the constitution of the Republic of the Philippines of 1935
is applicable as the sale took place on October 29, 1962;
5.
That the possession of the Infiels over the land relinquished or
sold to Acme Plywood & Veneer Co., Inc., dates back before the
Philippines was discovered by Magellan as the ancestors of the Infiels
have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer
Infiel;

G.R. No. 73002 December 29, 1986


Natural Resources || Full Text Cases Prelim Exam || 8

6.
That the possession of the applicant Acme Plywood & Veneer
Co., Inc., is continuous, adverse and public from 1962 to the present
and tacking the possession of the Infiels who were granted from whom
the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial;
7.
That the land sought to be registered is a private land
pursuant to the provisions of Republic Act No. 3872 granting absolute
ownership to members of the non-Christian Tribes on land occupied by
them or their ancestral lands, whether with the alienable or disposable
public land or within the public domain;
8.
That applicant Acme Plywood & Veneer Co. Inc., has
introduced more than Forty-Five Million (P45,000,000.00) Pesos worth
of improvements, said improvements were seen by the Court during its
ocular investigation of the land sought to be registered on September
18, 1982;
9.
That the ownership and possession of the land sought to be
registered by the applicant was duly recognized by the government
when the Municipal Officials of Maconacon, Isabela, have negotiated for
the donation of the townsite from Acme Plywood & Veneer Co., Inc., and
the negotiation came to reality when the Board of Directors of the Acme
Plywood & Veneer Co., Inc., had donated a part of the land bought by
the Company from the Infiels for the townsite of Maconacon, Isabela
(Exh. 'N') on November 15, 1979, and which donation was accepted by
the Municipal Government of Maconacon, Isabela (Exh. 'N-1'), during
their special session on November 22, 1979."
The Director of Lands takes no issue with any of these findings except
as to the applicability of the 1935 Constitution to the matter at hand.
Concerning this, he asserts that, the registration proceedings have been
commenced only on July 17, 1981, or long after the 1973 Constitution
had gone into effect, the latter is the correctly applicable law; and since
section 11 of its Article XIV prohibits private corporations or associations
from holding alienable lands of the public domain, except by lease not to
exceed 1,000 hectares (a prohibition not found in the 1935 Constitution
which was in force in 1962 when Acme purchased the lands in question
from the Infiels), it was reversible error to decree registration in favor of
Acme.
Section 48, paragraphs (b) and (c), of Commonwealth Act No. 141, as
amended, reads:
"SEC. 48.The following described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed,
may apply to the Court of First Instance of the province where the land
is located for confirmation of their claims, and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:
xxx

xxx

xxx

(b)
Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive and notorious
possession and occupation of agricultural lands of the public domain,
under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation
of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the
provisions of the chapter.

(c)
Members of the National Cultural minorities who by
themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of lands
of the public domain suitable to agriculture, whether disposable or not,
under a bona fide claim of ownership for at least 30 years shall be
entitled to the rights granted in subsection (b) hereof."
The Petition for Review does not dispute indeed, in view of the
quoted findings of the trial court which were cited and affirmed by the
Intermediate Appellate Court, it can no longer controvert before this
Court the fact that Mariano and Acer Infiel, from whom Acme
purchased the lands in question on October 29, 1962, are members of
the national cultural minorities who had, by themselves and through
their progenitors, possessed and occupied those lands since time
immemorial, or for more than the required 30-year period and were, by
reason thereof, entitled to exercise the right granted in Section 48 of the
Public Land Act to have their title judicially confirmed. Nor is there any
pretension that Acme, as the successor-in-interest of the Infiels, is
disqualified to acquire and register ownership of said lands under any
provisions of the 1973 Constitution other than Section 11 of its Article
XIV already referred to.
Given the foregoing, the question before this Court is whether or not the
title that the Infiels had transferred to Acme in 1962 could be confirmed
in favor of the latter in proceedings instituted by it in 1981 when the
1973 Constitution was already in effect, having in mind the prohibition
therein against private corporations holding lands of the public domain
except in lease not exceeding 1,000 hectares.
The question turns upon a determination of the character of the lands at
the time of institution of the registration proceedings in 1981. If they
were then still part of the public domain, it must be answered in the
negative. If, on the other hand, they were then already private lands, the
constitutional prohibition against their acquisition by private corporations
or associations obviously does not apply.
In this regard, attention has been invited to Manila Electric Company vs.
Castro-Bartolome, et al, 1 where a similar set of facts prevailed. In that
case, Manila Electric Company, a domestic corporation more than 60%
of the capital stock of which is Filipino-owned, had purchased in 1947
two lots in Tanay, Rizal from the Piguing spouses. The lots had been
possessed by the vendors and, before them, by their predecessor-ininterest, Olimpia Ramos, since prior to the outbreak of the Pacific War in
1941. On December 1, 1976, Meralco applied to the Court of First
Instance of Rizal, Makati Branch, for confirmation of title to said lots.
The court, assuming that the lots were public land, dismissed the
application on the ground that Meralco, a juridical person, was not
qualified to apply for registration under Section 48(b) of the Public Land
Act which allows only Filipino citizens or natural persons to apply for
judicial confirmation of imperfect titles to public land. Meralco appealed,
and a majority of this Court upheld the dismissal. It was held that:
". . ., the said land is still public land. It would cease to be public land
only upon the issuance of the certificate of title to any Filipino citizen
claiming it under section 48(b). Because it is still public land and the
Meralco, as a juridical person, is disqualified to apply for its registration
under section 48(b), Meralco's application cannot be given due course
or has to be dismissed.
xxx

xxx

xxx

Natural Resources || Full Text Cases Prelim Exam || 9

"Finally, it may be observed that the constitutional prohibition makes no


distinction between (on the one hand) alienable agricultural public lands
as to which no occupant has an imperfect title and (on the other hand)
alienable lands of the public domain as to which an occupant has an
imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make
any distinction or qualification. The prohibition applies to alienable public
lands as to which a Torrens title may be secured under section 48(b).
The proceeding under section 48(b) `presupposes that the land is public'
(Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641,
644)."
The present Chief Justice entered a vigorous dissent, tracing the line of
cases beginning with Cario in 1909 2 thru Susi in 1925 3 down to
Herico in 1980, 4 which developed, affirmed and reaffirmed the doctrine
that open, exclusive and undisputed possession of alienable public land
for the period prescribed by law creates the legal fiction whereby the
land, upon completion of the requisite period ipso jure and without the
need of judicial or other sanction, ceases to be public land and becomes
private property. That said dissent expressed what is the better and,
indeed, the correct, view becomes evident from a consideration of
some of the principal rulings cited therein.
The main theme was given birth, so to speak, in Cario, involving the
Decree/Regulations of June 25, 1880 for adjustment of royal lands
wrongfully occupied by private individuals in the Philippine Islands. It
was ruled that:
"It is true that the language of articles 4 and 5 5 attributes title to those
`who may prove' possession for the necessary time and we do not
overlook the argument that this means may prove in registration
proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it
was not calculated to convey to the mind of an Igorot chief the notion
that ancient family possessions were in danger, if he had read every
word of it. The words 'may prove' (acrediten), as well or better, in view of
the other provisions, might be taken to mean when called upon to do so
in any litigation. There are indications that registration was expected
from all, but none sufficient to show that, for want of it, ownership
actually gained would be lost. The effect of the proof, wherever made,
was not to confer title, but simply to establish it, as already conferred by
the decree, if not by earlier law. . . ."
That ruling assumed a more doctrinal character because expressed in
more categorical language, in Susi:
". . . In favor of Valentin Susi, there is, moreover, the presumption juris et
de jure established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant
by the Government were complied with, for he has been in actual and
physical possession, personally and through his predecessors, of an
agricultural land of the public domain openly, continuously, exclusively
and publicly since July 26, 1984, with a right to a certificate of title to
said land under the provisions of Chapter VIII of said Act. So that when
Angela Razon applied for the grant in her favor, Valentin Susi had
already acquired by operation of law not only a right to a grant, but a
grant of the Government, for it is not necessary that a certificate of title
should be issued in order that said grant may be sanctioned by the
courts, an application therefor is sufficient, under the provisions of
section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had
acquired the land in question by a grant of the State, it had already

ceased to be of the public domain and had become private property, at


least by presumption, of Valentin Susi, beyond the control of the Director
of Lands. Consequently, in selling the land in question of Angela Razon,
the Director of Lands disposed of a land over which he had no longer
any title or control, and the sale thus made was void and of no effect,
and Angela Razon did not thereby acquire any right. 6
Succeeding cases, of which only some need be mentioned, like Lacaste
vs. Director of Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs.
Cabanatuan, 9 Miguel vs. Court of Appeals 10 and Herico vs. Dar,
supra, by invoking and affirming the Susi doctrine have firmly rooted it in
jurisprudence.
Herico, in particular, appears to be squarely affirmative: 11
". . . Secondly, under the provisions of Republic Act No. 1942, which the
respondent Court held to be inapplicable to the petitioner's case, with
the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the
land has vested on petitioner so as to segregate the land from the mass
of public land. Thereafter, it is no longer disposable under the Public
Land Act as by free patent. . . .
xxx

xxx

xxx

As interpreted in several cases, when the conditions as specified in the


foregoing provision are complied with, the possessor is deemed to have
acquired, by operation of law, a right to a grant, a government grant,
without the necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain and beyond the authority of
the Director of Lands to dispose of. The application for confirmation is
mere formality, the lack of which does not affect the legal sufficiency of
the title as would be evidenced by the patent and the Torrens title to be
issued upon the strength of said patent." 12
Nothing can more clearly demonstrate the logical inevitability of
considering possession of public land which is of the character and
duration prescribed by statute as the equivalent of an express grant
from the State than the dictum of the statute itself 13 that the
possessor(s) ". . . shall be conclusively presumed to have performed all
the conditions essential to a Government grant and shall be entitled to a
certificate of title . . ." No proof being admissible to overcome a
conclusive presumption, confirmation proceedings would, in truth be
little more than a formality, at the most limited to ascertaining whether
the possession claimed is of the required character and length of time;
and registration thereunder would not confer title, but simply recognize a
title already vested. The proceedings would not originally convert the
land from public to private land, but only confirm such a conversion
already affected by operation of law from the moment the required
period of possession became complete. As was so well put in Cario,
". . . (T)here are indications that registration was expected from all, but
none sufficient to show that, for want of it, ownership actually gained
would be lost. The effect of the proof, wherever made, was not to confer
title, but simply to establish it, as already conferred by the decree, if not
by earlier law."
If it is accepted as it must be that the land was already private land
to which the Infiels had a legally sufficient and transferable title on
October 29, 1962 when Acme acquired it from said owners, it must also
be conceded that Acme had a perfect right to make such acquisition,
there being nothing in the 1935 Constitution then in force (or, for that
Natural Resources || Full Text Cases Prelim Exam || 10

matter, in the 1973 Constitution which came into effect later) prohibiting
corporations from acquiring and owning private lands.

the same benefit to their lawful successor-in-interest by valid


conveyance which violates no constitutional mandate.

Even on the proposition that the land remained technically "public" land,
despite immemorial possession of the Infiels and their ancestors, until
title in their favor was actually confirmed in appropriate proceedings
under the Public Land Act, there can be no serious question of Acme's
right to acquire the land at the time it did, there also being nothing in the
1935 Constitution that might be construed to prohibit corporations from
purchasing or acquiring interests in public land to which the vendor had
already acquired that type of so-called "incomplete" or "imperfect" title.
The only limitation then extant was that corporations could not acquire,
hold or lease public agricultural lands in excess of 1,024 hectares. The
purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids
corporations from owning lands of the public domain cannot defeat a
right already vested before that law came into effect, or invalidate
transactions then perfectly valid and proper, This Court has already
held, in analogous circumstances, that the Constitution cannot impair
vested rights.

The Court, in the light of the foregoing, is of the view, and so holds, that
the majority ruling in Meralco must be reconsidered and no longer
deemed to be binding precedent. The correct rule, as enunciated in the
line of cases already referred to, is that alienable public land held by a
possessor, personally or through his predecessors-in-interest, openly,
continuously and exclusively for the prescribed statutory period (30
years under The Public Land Act, as amended) is converted to private
property by the mere lapse or completion of said period, ipso jure.
Following that rule and on the basis of the undisputed facts, the land
subject of this appeal was already private property at the time it was
acquired from the Infiels by Acme. Acme thereby acquired a registrable
title, there being at the time no prohibition against said corporation's
holding or owning private land. The objection that, as a juridical person,
Acme is not qualified to apply for judicial confirmation of title under
section 48(b) of the Public Land Act is technical, rather than substantial
and, again, finds its answer in the dissent in Meralco:

"We hold that the said constitutional prohibition 14 has no retroactive


application to the sales application of Bian Development Co., Inc.
because it had already acquired a vested right to the land applied for at
the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by the
new Constitution. Section 2, Article XIII of the 1935 Constitution allows
private corporations to purchase public agricultural lands not exceeding
one thousand and twenty-four hectares. Petitioner' prohibition action is
barred by the doctrine of vested rights in constitutional law.
xxx

xxx

xxx

The due process clause prohibits the annihilation of vested rights. `A


state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by
a change in the constitution of the State, except in a legitimate exercise
of the police power' (16 C.J.S. 1177-78).
xxx

xxx

xxx

In the instant case, it is incontestable that prior to the effectivity of the


1973 Constitution the right of the corporation to purchase the land in
question had become fixed and established and was no longer open to
doubt or controversy.
Its compliance with the requirements of the Public Land Law for the
issuance of a patent had the effect of segregating the said land from the
public domain. The corporation's right to obtain a patent for the land is
protected by law. It cannot be deprived of that right without due process
(Director of Lands vs. CA, 123 Phil. 919)." 15
The fact, therefore, that the confirmation proceedings were instituted by
Acme in its own name must be regarded as simply another accidental
circumstance, productive of a defect hardly more than procedural and in
nowise affecting the substance and merits of the right of ownership
sought to be confirmed in said proceedings, there being no doubt of
Acme's entitlement to the land. As it is unquestionable that in the light of
the undisputed facts, the Infiels, under either the 1935 or the 1973
Constitution, could have had title in themselves confirmed and
registered, only a rigid subservience to the letter of the law would deny

"6.
To uphold respondent judge's denial of Meralco's application
on the technicality that the Public Land Act allows only citizens of the
Philippines who are natural persons to apply for confirmation of their title
would be impractical and would just give rise to multiplicity of court
actions. Assuming that there was a technical error in not having filed the
application for registration in the name of the Piguing spouses as the
original owners and vendors, still it is conceded that there is no
prohibition against their sale of the land to the applicant Meralco and
neither is there any prohibition against the application being refiled with
retroactive effect in the name of the original owners and vendors (as
such natural persons) with the end result of their application being
granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in
their favor. It should not he necessary to go through all the rituals at the
great cost of refiling of all such applications in their names and adding to
the overcrowded court dockets when the Court can after all these years
dispose of it here and now. (See Francisco vs. City of Davao)
The ends of justice would best be served, therefore, by considering the
applications for confirmation as amended to conform to the evidence,
i.e. as filed in the names of the original persons who as natural persons
are duly qualified to apply for formal confirmation of the title that they
had acquired by conclusive presumption and mandate of the Public
Land Act and who thereafter duly sold to the herein corporations (both
admittedly Filipino corporations duly qualified to hold and own private
lands) and granting the applications for confirmation of title to the private
lands so acquired and sold or exchanged."
There is also nothing to prevent Acme from reconveying the lands to the
Infiels and the latter from themselves applying for confirmation of title
and, after issuance of the certificate/s of title in their names, deeding the
lands back to Acme. But this would be merely indulging in empty
charades, whereas the same result is more efficaciously and speedily
obtained, with no prejudice to anyone, by a liberal application of the rule
on amendment to conform to the evidence suggested in the dissent in
Meralco.
While this opinion seemingly reverses an earlier ruling of comparatively
recent vintage, in a real sense, it breaks no precedent, but only reaffirms
and re-established, as it were, doctrines the soundness of which has
passed the test of searching examination and inquiry in many past
cases. Indeed, it is worth noting that the majority opinion, as well as the
Natural Resources || Full Text Cases Prelim Exam || 11

concurring opinions of Chief Justice Fernando and Justice Abad Santos,


in Meralco rested chiefly on the proposition that the petitioner therein, a
juridical person, was disqualified from applying for confirmation of an
imperfect title to public land under Section 48(b) of the Public Land Act.
Reference to the 1973 Constitution and its Article XIV, Section 11, was
only tangential, limited to a brief paragraph in the main opinion, and
may, in that context, be considered as essentially obiter. Meralco, in
short, decided no constitutional question.
WHEREFORE, there being no reversible error in the appealed judgment
of the Intermediate Appellate Court, the same is hereby affirmed,
without costs in this instance.
SO ORDERED.
REPUBLIC, vs. QUASHA,

FIRST DIVISION
[G.R. No. L-30299. August 17, 1972.]

REPUBLIC OF THE PHILIPPINES and/or THE SOLICITOR GENERAL,


petitioners, vs. WILLIAM H. QUASHA, respondent.

Solicitor General Estelito P. Mendoza for petitioner.


Quasha, Asperilla, Blanco, Zafra & Tayag for respondent.

SYLLABUS
1.
CONSTITUTIONAL LAW; PARITY AMENDMENT; EXPRESS
EXCEPTION ONLY TO SEC. 1, ART. XIII AND SEC. 8, ART. XIV OF
THE CONSTITUTION. Examination of the "Parity Amendment", as
ratified, reveals that it only establishes an express exception to two (2)
provisions of our Constitution, to wit: (a) Section 1, Article VIII, re
disposition, exploitation, development and utilization of agricultural,
timber and mineral lands of the public domain and other natural
resources of the Philippines; and (b) Section 8, Article XIV, regarding
operation of public utilities. As generally drafted by the farmers of the
Constitution, the privileges to acquire and exploit agricultural lands of
the public domain, and other natural resources of the Philippines, and to
operate public utilities, were reserved to Filipinos and entities owned or
controlled by them: but the "Parity Amendment'' expressly extended the
privilege to citizens of the United States of America and/or to business
entities owned or controlled by them.
2.
ID.; ID.; ID.; EXTENT OF PARITY AS UNDERSTOOD BY
BOTH THE PHILIPPINE AND AMERICAN SIDES. Whether from the
views expressed in the Philippine Legislature during the discussion of
the Proposed Amendment to our Constitution or from the draft of the
Philippine Trade Act submitted to the House of Representatives by
Congressman Bell which was modified when finally approved by the
United States Congress, the intention was to secure parity for United
States citizens only on two matters: (I) exploitation, development and

utilization of public lands, and other natural resources of the Philippines;


and (2) the operation of public utilities. That and nothing else.
3.
ID.; ID.; ID.; SECTION 5 OF ARTICLE XIII NOT COVERED
BY PARITY. Sec. 5 of Article XIII restricting the transfer or
assignment of private agricultural lands to those qualified to acquire or
hold lands of the public domain (which under the original section 1 of
Article XIII meant Filipinos exclusively), save in cases of hereditary
succession, was not referred to by the Parity Amendment and was
therefore left untouched and allowed to continue in operation as
originally intended by the Constitution's framers.
4.
ID.; ID.; ID.; EXCEPTIONS TO CONSTITUTIONAL POLICY
SHOULD BE STRICTLY INTERPRETED. A reading of Sections 1
and 4 of Article XIII, as originally drafted by its framers, leaves no doubt
that the policy of the Constitution was to reserve to Filipinos the
disposition, exploitation, development or utilization of agricultural lands,
public (section 1) or private (section 5), as well as all other natural
resources of the Philippines. The "Parity Amendment" created
exceptions to that Constitutional policy and in consequence to the
sovereignty of the Philippines. By all canons of construction, such
exceptions must be given strict interpretation.
5.
ID.; ID.; ID.; RIGHT OF AMERICANS TO ACQUIRE
AGRICULTURAL LANDS TRACED. The equal rights of citizens and
corporations of the United States to acquire agricultural lands of the
Philippines which existed during the American sovereignty over the
Islands vanished with the advent of the Philippine Republic, explaining
the need of introducing the Parity Amendment of 1946. The right of the
United States citizens and corporations to acquire and exploit private or
public lands and other natural resources of the Philippines was intended
to expire when the Commonwealth ended on 4 July 1946. Thereafter,
public and private agricultural lands and natural resources of the
Philippines were or became exclusively reserved by our Constitution for
Filipino citizens. This situation lasted until the Parity Amendment, ratified
in November, 1946, once more reopened to United States citizens and
business enterprises owned or controlled by them the lands of the public
domain, the natural resources of the Philippines, and the operation of
the public utilities, exclusively, but not the acquisition or exploitation of
private agricultural lands, about which not a word is found in the Parity
Amendment.
6.
ID.; ID.; ID.; ART. VI OF THE LAUREL-LANGLEY
AGREEMENT CONSTRUED; M ERE TRADE AGREEMENT CANNOT
CONFER RIGHTS REMOVED BY THE CONSTITUTION BY EXPRESS
PRESCRIPTION. The words used in Article VI of the Trade
Agreement of 1955 known popularly as the Laurel-Langley Agreement
establishing a sort of reciprocity rights between citizens of the
Philippines and those of the United States, to the effect that " . . . This
provision does not affect the right of citizens of the United States to
acquire or own private agricultural lands in the Philippines, or citizens of
the Philippines to acquire or own land in the United States which is
subject to the jurisdiction of the United States . . . " must be understood
as referring to rights of United States citizens to acquire or own private
agricultural lands before the independence of the Philippines since the
obvious purpose of the article was to establish rights of United States
and Filipino citizens on a basis of reciprocity. For as already shown, no
such right to acquire or own private agricultural lands in the Philippines
has existed since the independent Republic was established in 1946.
The quoted expressions of the Laurel-Langley Agreement could not
expand the rights of United States citizens as to public agricultural
lands, when the Parity Amendment and the Constitution authorize such
Natural Resources || Full Text Cases Prelim Exam || 12

United States citizens and business entities only to acquire and exploit
agricultural lands of the public domain. If the reopening of only public
lands to Americans required a Constitutional Amendment, how could a
mere Trade Agreement, like Laurel-Langley, by itself enable United
States citizens to acquire and exploit private agricultural lands, a right
that ceased to exist since the independence of the Philippines by
express prescription of our Constitution?
7.
ID.; ID.; ID.; RIGHTS CONFERRED UPON UNITED STATE
CITIZENS BY PARITY AMENDMENT CANNOT EXTEND BEYOND
JULY, 1974. The exceptional rights conferred upon United States
citizens and business entities owned or controlled by them, under the
Parity Amendment, are subject to one and the same resolutory term or
period: they are to last "during the effectivity of the Executive Agreement
entered into on 4 July 1946", "but in no case to extend beyond the third
of July, 1974". None of the privileges conferred by the "Parity
Amendment" are excepted from this resolutory period.
8.
ID.; ID.; ID.; ID.; NO DISPOSITION OF AGRICULTURAL
LANDS OF THE PUBLIC DOMAIN BEYOND JULY 4, 1974; THINGS
AUTHORIZED UNDER THE AMENDMENT. The Parity Amendment
prescribes that the disposition of agricultural lands of the public domain
are in no ease to extend beyond the third of July 1974. If the Philippine
Government can not dispose of its alienable public agricultural lands
beyond that date under the Parity Amendment, then, logically, the
Constitution, as modified by the Amendment, only authorizes either of
two things: (a) alienation or transfer of rights less than ownership or (b)
a resoluble ownership that will be extinguishable not later than the
specified period. For the Philippine government to dispose of the public
agricultural land for an indefinite time would necessarily be in violation of
the Constitution.
9.
ID.; ID.; ID.; ID.; ID.; LIMITED OWNERSHIP RECOGNIZED
UNDER THE CIVIL LAW. There is nothing in the Civil Law of this
country that is repugnant to the existence of ownership for a limited
duration; thus the title of a "reservista" (ascendant inheriting from a
descendant) in reserva troncal, under Article 891 of the Civil Code of the
Philippines, is one such owner, holding title and dominion, although
under condition subsequent; he can do anything that a genuine owner
can do, until his death supervenes with "reservataries" surviving, i. e.,
relatives within the third degree (Edroso vs. Sablan, 25 Phil. 295;
Lunsod vs. Ortega, 46 Phil. 661, 665). In truth, Article 428 of the Civil
Code stating that "the owner has the right to enjoy and dispose of a
thing, without other limitations than those established by law has been
invoked by respondent himself". One such limitation is the period fixed
in the "Parity Amendment", which forms part of the Constitution, the
highest law of the land.
10.
ID.; ID.; ID.; AMERICAN BUSINESS ENTERPRISES ARE
MORE FAVORED THAN PHILIPPINE ORGANIZATIONS; STRICT
INTERPRETATION NECESSARY. That Filipinos, who should own
60% of the capital stock of a corporation, should be placed under the
so-called parity in a more disadvantageous position than United States
citizens, who are required only to control directly or indirectly a
corporation, in the disposition, exploitation, development and utilization
of the public lands, forests, mines, oils and other natural resources of
their own country is certainly rank injustice and inequity that warrants a
most strict interpretation of the "Parity Amendment", in order that the
dishonorable inferiority in which Filipinos find themselves at present in
the land of their ancestors should not be prolonged more than is
absolutely necessary.

DECISION

REYES, J. B. L., J p:
This case involves a judicial determination of the scope and duration of
the rights acquired by American citizens and corporations controlled by
them, under the Ordinance appended to the Constitution as of 18
September 1946, or the so-called Parity Amendment.
The respondent, William H. Quasha, an American citizen, had acquired
by purchase on 26 November 1954 a parcel of land with the permanent
improvements thereon, situated at 22 Molave Place, in Forbes Park,
Municipality of Makati, Province of Rizal, with an area of 2,616 sq. m.
more or less, described in and covered by T. C. T. 36862. On 19 March
1968, he filed a petition in the Court of First Instance of Rizal, docketed
as its Civil Case No. 10732, wherein he (Quasha) averred the
acquisition of the real estate aforesaid; that the Republic of the
Philippines, through its officials, claimed that upon expiration of the
Parity Amendment on 3 July 1974, rights acquired by citizens of the
United States of America shall cease and be of no further force and
effect; that such claims necessarily affect the rights and interest of the
plaintiff, and that continued uncertainty as to the status of plaintiff's
property after 3 July 1974 reduces the value thereof, and precludes
further improvements being introduced thereon, for which reason
plaintiff Quasha sought a declaration of his rights under the Parity
Amendment, said plaintiff contending that the ownership of properties
during the effectivity of the Parity Amendment continues notwithstanding
the termination and effectivity of the Amendment.
The then Solicitor General Antonio P. Barredo (and later on his
successors in office, Felix V. Makasiar and Felix Q. Antonio) contended
that the land acquired by plaintiff constituted private agricultural land
and that the acquisition violated section 5, Article XIII, of the Constitution
of the Philippines, which prohibits the transfer of private agricultural land
to non-Filipinos, except by hereditary succession; and assuming,
without conceding, that Quasha's acquisition was valid, any and all
rights by him so acquired "will expire ipso facto and ipso jure at the end
of the day on 3 July 1974, if he continued to hold the property until then,
and will be subject to escheat or reversion proceedings" by the
Republic.
After hearing, the Court of First Instance of Rizal (Judge Pedro A.
Revilla presiding) rendered a decision, dated 6 March 1969, in favor of
plaintiff, with the following dispositive portion:
"WHEREFORE, judgment is hereby rendered declaring that acquisition
by the plaintiff on 26 November 1954 of, the private agricultural land
described in and covered by Transfer Certificate of Title No. 36862 in his
name was valid, and that plaintiff has a right to continue in ownership of
the said property even beyond July 3, 1974."
Defendants appealed directly to this Court on questions of law, pleading
that the court below erred:
(1)
In ruling that under the Parity Amendment American citizens
and American owned and/or controlled business enterprises "are also
qualified to acquire private agricultural lands" in the Philippines; and

Natural Resources || Full Text Cases Prelim Exam || 13

(2)
In ruling that when the Parity Amendment ceases to be
effective on 3 July 1974, "what must be considered to end should be the
right to acquire land, and not the right to continue in ownership of land
already acquired prior to that time.
As a historical background, requisite to a proper understanding of the
issues being litigated, it should be recalled that the Constitution as
originally adopted, contained the following provisions:
"Article XIII CONSERVATION AND UTILIZATION OF NATURAL
RESOURCES
"Section 1.
All agricultural, timber, and mineral lands of the
public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines,
or to corporations or associations at least sixty per centum of the capital
of which is owned by such citizens subject to any existing right, grant,
lease, or concession at the time of the inauguration of the Government
established under this Constitution. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-five
years, except as to water right for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which
cases beneficial use may be the measure and the limit of the grant.
"Section 2.
No private corporation or association may acquire,
lease, or hold public agricultural lands in excess of one thousand and
twenty-four hectares, nor may any individual acquire such lands by
purchase in excess of one hundred and forty-four hectares, or by lease
in excess of one thousand and twenty-four hectares, or by homestead in
excess of twenty-four hectares. Lands adapted to grazing, not
exceeding two thousand hectares, may be leased to an individual,
private corporation, or association."
xxx

xxx

xxx

"Section 5.
Save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines."
"Article XIV GENERAL PROVISIONS
"Section 8.
No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted except
to citizens of the Philippines or to corporations or other entities
organized under the laws of the Philippines, sixty per centum of the
capital of which is owned by citizens of the Philippines, nor shall such
franchise, certificate, or authorization be exclusive in character or for a
longer period than fifty years. No franchise or right shall be granted to
any individual, firm, or corporation, except under the condition that it
shall be subject to amendment, alteration, or repeal by the Congress
when the public interest so requires."
The nationalistic spirit that pervaded these and other provisions of the
Constitution are self-evident and require no further emphasis.
From the Japanese occupation and the reconquest of the Archipelago,
the Philippine nation emerged with its industries destroyed and its
economy dislocated. It was described in this Court's opinion in

Commissioner of Internal Revenue vs. Guerrero, et al., L-20942, 22


September 1967, 21 SCRA 181, 187, penned by Justice Enrique M.
Fernando, in the following terms:
"It was fortunate that the Japanese Occupation ended when it did.
Liberation was hailed by all, but the problems faced by the legitimate
government were awesome in their immensity. The Philippine treasury
was bankrupt and her economy prostrate. There were no dollar-earning
export crops to speak of; commercial operations were paralyzed; and
her industries were unable to produce with mills, factories and plants
either destroyed or their machineries obsolete or dismantled. It was a
desolate and tragic sight that greeted the victorious American and
Filipino troops. Manila, particularly that portion south of the Pasig, lay in
ruins, its public edifices and business buildings lying in a heap of rubble
and numberless houses razed to the ground. It was in fact, next to
Warsaw, the most devastated city in the expert opinion of the then
General Eisenhower, There was thus a clear need of help from the
United States. American aid was forthcoming but on terms proposed by
her government and later on accepted by the Philippines."
The foregoing description is confirmed by the 1945 Report of the
Committee on Territories and Insular Affairs to the United States
Congress:
" 'When the Philippines do become independent next July, they will start
on the road to independence with a country whose commerce, trade
and political institutions have been very, very seriously damaged. Years
of rebuilding are necessary before the former physical conditions of the
islands can be restored. Factories, homes, government and commercial
buildings, roads, bridges, docks, harbors and the like are in need of
complete reconstruction or widespread repairs. It will be quite some
while before the Philippines can produce sufficient food with which to
sustain themselves.
" 'The internal revenues of the country have been greatly diminished by
war. Much of the assessable property basis has been destroyed.
Foreign trade has vanished. Internal commerce is but a faction of what it
used to be. Machinery, farming implements, ships, bus and truck lines,
inter-island transportation and communications have been wrecked.' "
Shortly thereafter, in 1946, the United States 79th Congress enacted
Public Law 3721, known as the Philippine Trade Act, authorizing the
President of the United States to enter into an Executive Agreement with
the President of the Philippines, which should contain a provision that
" 'The disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils,; all forces and sources
of potential energy, and other natural resources of the Philippines, and
the operation of public utilities shall, if open to any person, be open to
citizens of the United States and to all forms of business enterprise
owned or controlled, directly or indirectly, by United States citizens.' "
and that:
'The President of the United States is not authorized . . . to enter into
such executive agreement unless in the agreement the Government of
the Philippines . . . will promptly take such steps as are necessary to
secure the amendment of the Constitution of the Philippines so as to
permit the taking effect as laws of the Philippines of such part of the
provisions of section 1331 . . . as is in conflict with such Constitution
before such amendment.' "
Natural Resources || Full Text Cases Prelim Exam || 14

The Philippine Congress, by Commonwealth Act No. 733, authorized


the President of the Philippines to enter into the Executive Agreement.
Said Act provided, inter alia, the following:
"ARTICLE VII
"1.
The disposition, exploitation, development, and utilization of
all agricultural, timber, and mineral lands of the public domain, waters,
mineral, coal, petroleum, and other mineral oils, all forces and sources
of potential energy, and other natural resources of the Philippines, and
the operation of public utilities, shall, if open to any person, be open to
citizens of the United States and to all forms of business enterprise
owned or controlled, directly or indirectly, by United States citizens,
except that (for the period prior to the amendment of the Constitution of
the Philippines referred to in Paragraph 2 of this Article) the Philippines
shall not be required to comply with such part of the foregoing
provisions of this sentence as are in conflict with such Constitution.
"2.
The Government of the Philippines will promptly take such
steps as are necessary to secure the amendment of the Constitution of
the Philippines so as to permit the taking effect as laws of the
Philippines of such part of the provisions of Paragraph 1 of this Article
as is in conflict with such Constitution before such amendment."
Thus authorized, the Executive Agreement was signed on 4 July 1946,
and shortly thereafter the President of the Philippines recommended to
the Philippine Congress the approval of a resolution proposing
amendments to the Philippine Constitution pursuant to the Executive
Agreement. Approved by the Congress in joint session, the proposed
amendment was submitted to a plebiscite and was ratified in November
of 1946. Generally known as the Parity Amendment, it was in the form of
an Ordinance appended to the Philippine Constitution, reading as
follows:
" 'Notwithstanding the provision of section one, Article Thirteen, and
section eight, Article Fourteen, of the foregoing Constitution, during the
effectivity of the Executive Agreement entered into by the President of
the Philippines with the President of the United States on the fourth of
July, nineteen hundred and forty-six, pursuant to the provisions of
Commonwealth Act Numbered Seven hundred and thirty-three, but in no
case to extend beyond the third of July, nineteen hundred and seventyfour, the disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public domain, waters,
minerals, coals, petroleum, and other mineral oils, all forces and
sources of potential energy, and other natural resources of the
Philippines, and the operation of public utilities, shall, if open to any
person, be open to citizens of the United States and to all forms of
business enterprise owned or controlled, directly or indirectly, by citizens
of the United States in the same manner as to, and under the same
conditions imposed upon, citizens of the Philippines or corporations or
associations owned or controlled by citizens of the Philippines."
A revision of the 1946 Executive Agreement was authorized by the
Philippines by Republic Act 1355, enacted in June, 1955. The revision
was duly negotiated by representatives of the Philippines and the United
States, and a new agreement was concluded on 6 September 1955 to
take effect on 1 January 1956, becoming known as the Laurel-Langley
Agreement.
This latter agreement, however, has no direct application to the case at
bar, since the purchase by herein respondent Quasha of the property in

question was made in 1954, more than one year prior to the effectivity of
the Laurel-Langley Agreement.
I
Bearing in mind the legal provisions previously quoted and their
background, We turn to the first main issue posed in this appeal:
whether under or by virtue of the so-called Parity Amendment to the
Philippine Constitution respondent Quasha could validly acquire
ownership of the private residential land in Forbes Park, Makati, Rizal,
which is concededly classified private agricultural land.
Examination of the "Parity Amendment", as ratified, reveals that it only
establishes an express exception to two (2) provisions of our
Constitution, to wit: (a) Section 1, Article XIII, re disposition, exploitation,
development and utilization of agricultural, timber and mineral lands of
the public domain and other natural resources of the Philippines; and (b)
Section 8, Article XIV, regarding operation of public utilities As originally
drafted by the framers of the Constitution, the privilege to acquire and
exploit agricultural lands of the public domain, and other natural
resources of the Philippines, and to operate public utilities, were
reserved to Filipinos and entities owned or controlled by them: but the
"Parity Amendment" expressly extended the privilege to citizens of the
United States of America and/or to business enterprises owned or
controlled by them.
No other provision of our Constitution was referred to by the "Parity
Amendment"; nor Section 2 of Article XIII limiting the maximum area of
public agricultural lands that could be held by individuals or corporations
or associations; nor Section 5 restricting the transfer or assignment of
private agricultural lands to those qualified to acquire or hold lands of
the public domain (which under the original Section 1 of Article XIII
meant Filipinos exclusively), save in cases of hereditary succession.
These sections 2 and 5 were therefore left untouched and allowed to
continue in operation as originally intended by the Constitution's
framers.
Respondent Quasha argues that since the amendment permitted United
States citizens or entities controlled by them to acquire agricultural lands
of the public domain, then such citizens or entities became entitled to
acquire private agricultural land in the Philippines, even without
hereditary succession, since said section 5 of Article XIII only negates
the transfer or assignment of private agricultural land to individuals or
entities not qualified to acquire or hold lands of the public domain.
Clearly, this argument of respondent Quasha rests not upon the text of
the Constitutional Amendment but upon a mere inference therefrom. If it
was ever intended to create also an exception to section 5 of Article XIII,
why was mention therein made only of Section 1 of Article XIII and
Section 8 of Article XIV and of no other? When the text of the
Amendment was submitted for popular ratification, did the voters
understand that three sections of the Constitution were to be modified,
when only two sections were therein mentioned?
A reading of Sections 1 and 4 of Article XIII, as originally drafted by its
framers, leaves no doubt that the policy of the Constitution was to
reserve to Filipinos the disposition, exploitation development or
utilization of agricultural lands, public (section 1) or private (section 5),
as well as all other natural resources of the Philippines. The "Parity
Amendment" created exceptions to that Constitutional policy and in
consequence to the sovereignty of the Philippines. By all canons of
construction, such exceptions must be given strict interpretation; and
this Court has already so ruled in Commissioner of Internal Revenue vs.
Natural Resources || Full Text Cases Prelim Exam || 15

Guerrero, et al., L-20942, 22 September 1967, 21 SCRA 181, per


Justice Enrique M. Fernando:
" 'While good faith, no less than adherence to the categorical wording of
the Ordinance, requires that all the rights and privileges thus granted to
Americans and business enterprises owned and controlled by them be
respected, anything further would not be warranted. Nothing less would
suffice but anything more is not justified.' "
The basis for the strict interpretation was given by former President of
the University of the Philippines, Hon. Vicente G. Sinco (Congressional
Record, House of Representatives, Volume 1, No. 26, page 561):
" 'It should be emphatically stated that the provisions of our Constitution
which limit to Filipinos the rights to develop the natural resources and to
operate the public utilities of the Philippines is one of the bulwarks of our
national integrity. The Filipino people decided to include it in our
Constitution in order that it may have the stability and permanency that
its importance requires. It is written in our Constitution so that it may
neither be the subject of barter nor be impaired in the give and take of
politics. With our natural resources, our sources of power and energy,
our public lands, and our public utilities, the material basis of the
nation's existence, in the hands of aliens over whom the Philippine
Government does not have complete control, the Filipinos may soon
find themselves deprived of their patrimony and living as it were, in a
house that no longer belongs to them.' "
The true extent of the Parity Amendment, as understood by its
proponents in the Philippine Congress, was clearly expressed by one of
its advocates, Senator Lorenzo Sumulong:
'It is a misconception to believe that under this amendment Americans
will be able to acquire all kinds of natural resources of this country, and
even after the expiration of 28 years their acquired rights cannot be
divested from them. If we read carefully the language of this amendment
which is taken verbatim from the provisions of the Bell Act, and, which in
turn, is taken also verbatim from certain sections of the Constitution, you
will find out that the equality of rights granted under this amendment
refers only to two subjects. Firstly, it refers to exploitation of natural
resources, and secondly, it refers to the operation of public utilities. Now,
when it comes to exploitation of natural resources, it must be pointed
out here that, under our Constitution and under this amendment, only
public agricultural land may be acquired, may be bought, so that on the
supposition that we give way to this amendment and on the further
supposition that it is approved by our people, let not the mistaken belief
be entertained that all kinds of natural resources may be acquired by
Americans because under our Constitution forest lands cannot be
bought, mineral lands cannot be bought, because by explicit provision of
the Constitution they belong to the State, they belong to our
Government, they belong to our people. That is why we call them rightly
the patrimony of our race. Even if the Americans should so desire, they
can have no further privilege than to ask for a lease of concession of
forest lands and mineral lands because it is so commanded in the
Constitution. And under the Constitution, such a concession is given
only for a limited period. It can be extended only for 25 years, renewable
for another 25. So that with respect to mineral or forest lands, all they
can do is to lease it for 25 years, and after the expiration of the original
25 years they will have to extend it, and I believe it can be extended
provided that it does exceed 28 years because this agreement is to be
effected only as an ordinance and for the express period of 28 years. So
that it is my humble belief that there is nothing to worry about insofar as
our forest and mineral lands are concerned.

Now, coming to the operation of public utilities, as every member of the


Congress knows, it is also for a limited period, under our Constitution,
for a period not exceeding 50 years. And since this amendment is
intended to endure only for 28 years, it is my humble opinion that when
Americans try to operate public utilities they cannot take advantage of
the maximum provided in the Constitution but only the 28 years which is
expressly provided to be the life of this amendment.
There remains for us to consider the case of our public agricultural
lands. To be sure, they may be bought, and if we pass this amendment,
Americans may buy our public agricultural lands, but the very same
Constitution applying even to Filipinos, provides that the sale of public
agricultural lands to a corporation can never exceed one thousand and
twenty-four hectares. That is to say, if an American corporation, and
American enterprise, should decide to invest its money in public
agricultural lands, it will be limited to the amount of 1,024 hectares, no
more than 1,024 hectares' (Italics supplied)."
No views contrary to these were ever expressed in the Philippine
Legislature during the discussion of the Proposed Amendment to our
Constitution, nor was any reference made to acquisition of private
agricultural lands by non-Filipinos except by hereditary succession. On
the American side, it is significant to observe that the draft of the
Philippine Trade Act submitted to the House of Representatives by
Congressman Bell, provided in the first portion of Section 19 the
following:
" 'SEC. 19.
Notwithstanding any existing provision of the
constitution and statutes of the Philippine Government, citizens and
corporations of the United States shall enjoy in the Philippine Islands
during the period of the validity of this Act, or any extension thereof by
statute or treaty, the same rights as to property, residence, and
occupation as citizens of the Philippine Islands.' . . ."
But as finally approved by the United States Congress, the equality as
to "property residence and occupation" provided in the bill was
eliminated and Section 341 of the Trade Act limited such parity to the
disposition, exploitation, development, and utilization of lands of the
public domain, and other natural resources of the Philippines (V. ante,
page 5 of this opinion).
Thus, whether from the Philippine or the American side, the intention
was to secure parity for United States citizens only in two matters: (1)
exploitation, development and utilization of public lands, and other
natural resources of the Philippines; and (2) the operation of public
utilities. That and nothing else.
Respondent Quasha avers that as of 1935 when the Constitution was
adopted, citizens of the United States were already qualified to acquire
public agricultural lands, so that the literal text of section 5 must be
understood as permitting transfer or assignment of private agricultural
lands to Americans even without hereditary succession. Such capacity
of United States citizens could exist only during the American
sovereignty over the Islands. For the Constitution of the Philippines was
designed to operate even beyond the extinction of the United States
sovereignty, when the Philippines would become fully independent. That
is apparent from the provision of the original Ordinance appended to the
Constitution as originally approved and ratified. Section 17 of said
Ordinance provided that:

Natural Resources || Full Text Cases Prelim Exam || 16

"(17)
Citizens and corporations of the United States shall enjoy in
the Commonwealth of the Philippines all the civil rights of the citizens
and corporations, respectively, thereof." (Emphasis supplied).
The import of paragraph (17) of the Ordinance was confirmed and
reenforced by Section 127 of Commonwealth Act 141 (the Public Land
Act of 1936) that prescribes:
"Sec. 127.
During the existence and continuance of the
Commonwealth, and before the Republic of the Philippines is
established, citizens and corporations of the United States shall enjoy
the same rights granted to citizens and corporations of the Philippines
under this Act."
thus clearly evidencing once more that equal rights of citizens and
corporations of the United States to acquire agricultural lands of the
Philippines vanished with the advent of the Philippine Republic. Which
explains the need of introducing the "Parity Amendment" of 1946.
It is then indubitable that the right of United States citizens and
corporations to acquire and exploit private or public lands and other
natural resources of the Philippines was intended to expire when the
Commonwealth ended on 4 July 1946. Thereafter, public and private
agricultural lands and natural resources of the Philippines were or
became exclusively reserved by our Constitution for Filipino citizens.
This situation lasted until the "Parity Amendment", ratified in November,
1946, once more reopened to United States citizens and business
enterprises owned or controlled by them the lands of the public domain,
the natural resources of the Philippines, and the operation of the public
utilities, exclusively, but not the acquisition or exploitation of private
agricultural lands, about which not a word is found in the Parity
Amendment.
Respondent Quasha's pretenses can find no support in Article VI of the
Trade Agreement of 1955, known popularly as the Laurel-Langley
Agreement, establishing a sort of reciprocity rights between citizens of
the Philippines and those of the United States, couched in the following
terms:
ARTICLE VI
" '2.
The rights provided for in Paragraph 1 may be exercised, in
the case of citizens of the Philippines with respect to natural resources
in the United States which are subject to Federal control or regulations,
only through the medium of a corporation organized under the laws of
the United States or one of the States hereof and likewise, in the case of
citizens of the United States with respect to natural resources in the
public domain in the Philippines only through the medium of a
corporation organized under the laws of the Philippines and at least
60% of the capital stock of which is owned or controlled by citizens of
the United States. This provision, however, does not affect the right of
citizens of the United States to acquire or own private agricultural lands
in the Philippines or citizens of the Philippines to acquire or own land in
the United States which is subject to the jurisdiction of the United States
and not within the jurisdiction of any state and which is not within the
public domain. The Philippines reserves the right to dispose of the
public lands in small quantities on especially favorable terms exclusively
to actual settlers or other users who are its own citizens. The United
States reserves the right to dispose of its public lands in small quantities
on especially favorable terms exclusively to actual settlers or other
users who are its own citizens or aliens who have declared their
intention to become citizens. Each party reserves the right to limit the

extent to which aliens may engage in fishing, or engage in enterprises


which furnish communications services and air or water transport. The
United States also reserves the right to limit the extent to which aliens
may own land in its outlying territories and possessions, but the
Philippines will extend to American nationals who are residents of any of
those outlying territories and possessions only the same rights, with
respect to ownership of lands, which are granted therein to citizens of
the Philippines. The rights provided for in this paragraph shall not,
however, be exercised by either party so as to derogate from the rights
previously acquired by citizens or corporations or associations owned or
controlled by citizens of the other party.' "
The words used in Article VI to the effect that
xxx

xxx

xxx

This provision does not affect the right of citizens of the United States to
acquire or own private agricultural lands in the Philippines, or citizens of
the Philippines to acquire or own land in the United States which is
subject to the jurisdiction of the United States . . .' ",
must be understood as referring to rights of United States citizens to
acquire or own private agricultural lands before the independence of the
Philippines since the obvious purpose of the article was to establish
rights of United States and Filipino citizens on a basis of reciprocity. For
as already shown, no such right to acquire or own private agricultural
lands in the Philippines has existed since the independent Republic was
established in 1946. The quoted expressions of the Laurel-Langley
Agreement could not expand the rights of United States citizens as to
public agricultural lands of the Philippines to private lands, when the
Parity Amendment and the Constitution authorize such United States
citizens and business entities only to acquire and exploit agricultural
lands of the public domain. If the reopening of only public lands to
Americans required a Constitutional Amendment, how could a mere
Trade Agreement, like the Laurel-Langley, by itself enable United States
citizens to acquire and exploit private agricultural lands, a right that
ceased to exist since the independence of the Philippines by express
prescription of our Constitution?
We turn to the second issue involved in this appeal: On the assumption
that respondent Quasha's purchase of the private agricultural land
involved is valid and constitutional, will or will not his rights expire on 3
July 1974?
For the solution of this problem, We again turn to the "Parity
Amendment". Under it,
"Notwithstanding the provision of section one, Article Thirteen, and
section eight, Article Fourteen, of the foregoing Constitution, during the
effectivity of the Executive Agreement entered into by the President of
the Philippines with the President of the United States on the fourth of
July, nineteen hundred and forty-six, pursuant to the provisions of
Commonwealth Act Numbered Seven hundred and thirty-three, but in no
case to extend beyond the third of July, nineteen hundred and seventyfour, the disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public domain, waters,
minerals, coals, petroleum, and other mineral oils, all forces and
sources of potential energy, and other natural resources of the
Philippines, and the operation of public utilities, shall, if open to any
person, be open to citizens of the United States and to all forms of
business enterprise owned or controlled, directly or indirectly, by citizens
of the United States in the same manner as to, and under the same
Natural Resources || Full Text Cases Prelim Exam || 17

conditions imposed upon, citizens of the Philippines or corporations or


associations owned or controlled by citizens of the Philippines."
(Emphasis supplied)
It is easy to see that all exceptional rights conferred upon United States
citizens and business entities owned or controlled by them, under the
Amendment, are subject to one and the same resolutory term or period:
they are to last "during the effectivity of the Executive Agreement
entered into on 4 July 1946", "but in no case to extend beyond the, third
of July, 1974". None of the privileges conferred by the "Parity
Amendment" are excepted from this resolutory period.
This limitation of time is in conformity with Article X, Section 2, of the
Philippine Trade Act of 1946, as embodied in Commonwealth Act No.
733. It says:
"ARTICLE X
"2.
This Agreement shall have no effect after 3 July 1974. It may
be terminated by either the United States or the Philippines at any time,
upon not less than five years' written notice. If the President of the
United States or the President of the Philippines determines and
proclaims that the other country has adopted or applied measures or
practices which would operate to nullify or impair any right or obligation
provided for in this Agreement, then the Agreement may be terminated
upon not less than six months' written notice.' "
Respondent Quasha argues that the limitative period set in the "Parity
Amendment" should be understood not to be applicable to the
disposition, or correlative acquisition, of alienable agricultural lands of
the public domain, since such lands can be acquired in full ownership, in
which event, under Article 428 of the Civil Code of Philippines
"ART. 428.
The owner has the right to enjoy and dispose of a
thing, without other limitations than those established by law.
"The owner has also a right of action against the holder and possessor
of the thing in order to recover it."
and that "since any period or condition which produces the effect of loss
or deprivation of valuable rights is in derogation of due process of law,
there must be "a law which expressly and indubitably limits and
extinguishes the ownership of non-citizens over private agricultural
lands situated in the Philippines validly acquired under the law existing
at the time of acquisition."
Strangely enough, this argument ignores the provisions of the "Parity
Amendment" prescribing that the disposition and exploitation, etc. of
agricultural lands of the public domain are in no case to extend beyond
the third of July 1974. This limitation already existed when Quasha in
1964 purchased the Forbes Park property, and the acquisition was
subject to it. If the Philippine government can not dispose of its alienable
public agricultural lands beyond that date under the "Parity
Amendment", then, logically, the Constitution, as modified by the
Amendment, only authorizes either of two things: (a) alienation or
transfer of rights less than ownership or (b) a resoluble ownership that
will be extinguished not later than the specified period. For the
Philippine government to dispose of the public agricultural land for an
indefinite time would necessarily be in violation of the Constitution.
There is nothing in the Civil Law of this country that is repugnant to the
existence of ownership for a limited duration; thus the title of a
"reservista" (ascendant inheriting from a descendant) in reserva troncal,
under Article 891 of the Civil Code of the Philippines, is one such owner,

holding title and dominion, although under condition subsequent; he can


do anything that a genuine owner can do, until his death supervenes
with "reservataries" surviving, i.e., relatives within the third degree
(Edroso vs. Sablan, 25 Phil. 295; Lunsod vs. Ortega, 46 Phil. 661, 695).
In truth, respondent himself invokes Article 428 of the Civil Code to the
effect that "the owner has the right to enjoy and dispose of a thing,
without other limitations than those established by law". One such
limitation is the period fixed in the "Parity Amendment", which forms part
of the Constitution, the highest law of the land. How then can he
complain of deprivation of due process?
That the legislature has not yet determined what is to be done with the
property when the respondent's rights thereto terminate on 3 July 1974
is irrelevant to the issues in this case. The law making power has until
that date full power to adopt the apposite measures, and it is expected
to do so.
One last point: under the "Parity Amendment" the disposition,
exploitation, development and utilization of lands of the public domain,
and other natural resources of the Philippines, and the operation of
public utilities are open
"to citizens of the United States and to all forms of business enterprises
owned or controlled, directly or indirectly, by citizens of the United
States".
while under the Philippine Constitution (section 1, Article XIII, and
section 8, Article XIV) utilization of such lands, natural resources and
public utilities are open to citizens of the Philippines or to
"corporations or associations at least sixty per centum of the capital of
which is owned by such citizens . . ."
It is thus apparent that American business enterprises are more favored
than Philippine organization during the period of parity in that, first, they
need not be owned by American citizens up to 60% of their capital; all
that is required is that they be controlled by United States citizens, a
control that is attained by ownership of only 51% a of the capital stock;
and second, that the control by United States citizens may be direct or
indirect (voting trusts, pyramiding, etc.) which indirect control is not
allowed in the case of Philippine nationals.
That Filipinos should be placed under the so-called Parity in a more
disadvantageous position than United States citizens in the disposition,
exploitation, development and utilization of the public lands, forests,
mines, oils and other natural resources of their own country is certainly
rank injustice and inequity that warrants a most strict interpretation of
the "Parity Amendment", in order that the dishonorable inferiority in
which Filipinos find themselves at present in the land of their ancestors
should not be prolonged more than is absolutely necessary.
FOR THE FOREGOING REASONS, the appealed decision of the Court
of First Instance of Rizal is hereby reversed and set aside; and
judgment is rendered declaring that, under the "Parity Amendment" to
our Constitution, citizens of the United States and corporations and
business enterprises owned or controlled by them can not acquire and
own, save in cases of hereditary succession, private agricultural lands in
the Philippines and that all other rights acquired by them under said
amendment will expire on 3 July 1974.
G.R. No. L-46729 November 19, 1982
LAUSAN AYOG, ET AL. vs. VICENTE N. CUSI, JR., ET AL.
Natural Resources || Full Text Cases Prelim Exam || 18

204 Phil. 126

EN BANC
[G.R. No. L-46729. November 19, 1982.]

LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG,


SEGUNDA AYOG, VICENTE ABAQUETA, BERNANDINO ADORMEO,
VIDAL ALBANO, FELICIANO ARIAS, ANTONIO BALDOS, MAXIMO
BALDOS ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO
CHUA, SR., HERACLEO CHUA, GUILLERMO DAGOY, ABDON
DEIMOS, NICASIO DE LEON, JULIANA VDA. DE DIANNA,
DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN
DIVINAGRACIA, LEODEGARDIO DIVINAGRACIA, NELLO
DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS EMPERADO,
PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS
GARLET, TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA
NAQUILA, TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY, SR.,
DIEGO ONGRIA, ERNESTO PEARES, VICENTE PATULOT, IGNACIA
RIBAO, JUANO RICO, JESUS ROSALITA, ARMANDO TANTE and
ANSELMO VALMORES, petitioners, vs. JUDGE VICENTE N. CUSI,
JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF
OF DAVAO, and BIAN DEVELOPMENT CO., INC., respondents.
MINISTER OF NATURAL RESOURCES and DIRECTOR OF LANDS,
intervenors.

Marcelino C. Maximo, Enrique S. Empleo and Carlito H. Vailoces for


petitioners
Levi Damaso for respondent Bian Dev't. Co.

SYNOPSIS
During the effectivity of the 1935 Constitution which expressly allowed
private juridical entities to acquire alienable lands of the public domain
not exceeding 1,024 hectares, respondent private corporation
purchased from the Bureau of Lands a parcel of public agricultural land
with an area of 250 hectares and obtained favorable judgment from a
civil court to evict the occupants thereof. However, it was only when the
1973 Constitution took effect that the sales patent and the Torrens title
of the subject land were issued and the judgment of the lower court
became final and executory after its affirmance on appeal. This action
for prohibition was brought when respondent corporation moved for
execution of the judgment evicting the defendants. Herein petitioners,
some of whom were not defendants in the ejectment case, contend that
the adoption of the new Constitution was a supervening fact which
rendered it legally impossible to execute the lower court's judgment.
They invoked the constitutional prohibition under Section 11, Article XIV
that "no private corporation or association may hold alienable lands of
the public domain except by lease not to exceed one thousand hectares
in area."
On review, the Supreme Court was unanimous in dismissing the petition
holding that the prohibition under Section 11, Article XIV of the 1973
Constitution has no retroactive application to the sales application of

respondent corporation because the latter had already acquired a


vested right to the land applied for at the time the new Constitution took
effect; further holding that petitioners who were not defendants in the
ejectment case should be excluded from the effect of the lower court's
judgment. Seven of the thirteen justices, however, made the clarification
that only those petitioners who do not derive their right of possession
from any of the defendants in the ejectment suit should be excluded
from the effect of the lower court's judgment.
Petition dismissed.
SYLLABUS
1.
CONSTITUTIONAL LAW; SECTION 11, ARTICLE XIV OF
THE 1973 CONSTITUTION; PROVISION BARRING PRIVATE
CORPORATIONS FROM HOLDING ALIENABLE LANDS OF PUBLIC
DOMAIN EXCEPT BY LEASE CANNOT BE GIVEN RETROACTIVE
EFFECT SO AS TO ADVERSELY AFFECT RIGHTS ALREADY
VESTED PRIOR TO ITS EFFECTIVITY. We hold that Section 11,
Article XIV of the 1973 Constitution which provides that "no private
corporation or association may hold alienable lands of the public domain
except by lease not to exceed one thousand hectares in area" has no
retroactive application to the sales application of Bian Development
Co., Inc. because it had already acquired a vested right to the land
applied for at the time the 1973 Constitution took effect. That vested
right has to be respected. It could not be abrogated by the new
Constitution. Section 2, Article XIII of the 1935 Constitution allows
private corporations to purchase public agricultural lands not exceeding
one thousand and twenty-four hectares. Petitioners' prohibition action is
barred by the doctrine of vested rights in constitutional law.
2.
WORDS AND PHRASES; "VESTED RIGHT" DEFINED. "A
right is vested when the right to enjoyment has become the property of
some particular person or persons as a present interest" (16 C.J.S.
1173). It is "the privilege to enjoy property legally vested, to enforce
contracts, and enjoy the rights of property conferred by the existing law"
(l2 C.J.S. 955, Note 46, No. 6) or "some right or interest in property
which has become fixed and established and is no longer open to doubt
or controversy" (Downs vs. Blount, 170 Fed. 15,20, cited in Balboa vs.
Farrales, 51 Phil. 498, 502).
3.
CONSTITUTIONAL LAW; SECTION 11, ARTICLE XIV OF
THE 1973 CONSTITUTION; CONTEMPORANEOUS CONSTRUCTION
OF THE CONSTITUTIONAL PROHIBITION BY A HIGH EXECUTIVE
OFFICIAL CARRIES GREAT WEIGHT AND ACCORDED MUCH
RESPECT BY THE COURTS. Secretary of Justice Vicente Abad
Santos in his 1973 opinion ruled that where the applicant, before the
Constitution took effect, had fully complied with all his obligations under
the Public Land Act in order to entitle him to a sales patent, there would
seem to be no legal equitable justification for refusing to issue or release
the sales patent. In opinion No. 140, series of 1974, he held that as
soon as the applicant had fulfilled the construction or cultivation
requirements and has fully paid the purchase price, he should be
deemed to have acquired by purchase the particular tract of land and to
him the area limitation in the new Constitution would not apply. In
opinion No. 185, series of 1976, Secretary Abad Santos held that where
the cultivation requirements were fulfilled before the new Constitution
took effect but the full payment of the price was completed after January
17, 1973, the applicant was, nevertheless, entitled to a sales patent.
Such a contemporaneous construction of the constitutional prohibition
by a high executive official carries great weight and should be accorded
much respect. It is a correct interpretation of Section II of Article XIV.
Natural Resources || Full Text Cases Prelim Exam || 19

4.
ID.; DOCTRINE OF VESTED RIGHTS; APPLIED IN CASE AT
BAR. In the instant case, it is incontestable that prior to the effectivity
of the 1973 Constitution the right of the corporation to purchase the land
in question had become fixed and established and was no longer open
to doubt or controversy. Its compliance with the requirements of the
Public Land Law for the issuance of a patent had the effect of
segregating the said land from the public domain. The corporation's right
to obtain a patent for that land is protected by law. It cannot be deprived
of that right without due process (Director of Lands vs. CA, 123 Phil.
919).

contempt was committed. The temporary restraining order was not


directed to Bian Development Co Inc., its officers, agents or privies.
Emberador was not named specifically in the trial court's judgment as
one of the occupants to be ejected. For the redress of whatever wrong
or delict was committed against Emberador by reason of the destruction
of his improvements, his remedy is not in a contempt proceeding but in
some appropriate civil and criminal actions against the destroyer of the
improvements.

5.
ID.; SOCIAL JUSTICE; ADMINISTRATIVE AUTHORITIES
SHOULD FIND WAYS AND MEANS TO ACCOMMODATE SOME OF
THE PETITIONERS IF THEY ARE LANDLESS AND ARE TILLERS OF
THE SOIL. In the interest of social justice, to avoid agrarian unrest
and to dispel the notion that the law grinds the faces of the poor, the
administrative authorities should find ways and means of
accommodating some of the petitioners if they are landless and are
really tillers of the son who in the words of President Magsaysay
deserve a little more food in their stomachs, a little more shelter over
their heads and a tittle more clothing on their backs. The State should
endeavor to help the poor who find it difficult to make both ends meet
and who suffer privations in the universal struggle for existence.

REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; COURT'S


JUDGMENT SHOULD BE CLARIFIED TO EXCLUDE FROM THE
EFFECT OF THE EJECTMENT DECISION ONLY PETITIONERS WHO
DO NOT DERIVE THEIR RIGHT OF POSSESSION FROM ANY OF
THE DEFENDANTS IN THE LOWER COURT. The judgment in any
ease is binding and enforcible not only against the parties thereto but
also against "their successors in interest by title subsequent to the
commencement of the action" (See. 49[b], Rule 39, Rules of Court). We
have previously held that the judgment in an ejectment ease may be
enforced not only against the defendants therein but also against the
members of their family, their relatives or privies who derive their right of
possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA
343). A further clarification of the dispositive portion is apparently
needed to exclude from the effect of the judgment in the ejectment case
only the petitioners who do not derive their right of possession from any
of the defendants in the ejectment suit.

6.
ID.; SECTION 11, ARTICLE XIV OF THE 1973
CONSTITUTION; PURPOSE OF THE PROHIBITION AGAINST
PURCHASES OF PUBLIC AGRICULTURAL LANDS BY PRIVATE
CORPORATIONS. One purpose of the constitutional prohibition
against purchases of public agricultural lands by private corporations is
to equitably diffuse land ownership or to encourage "ownercultivatorship and the economic family-size farm" and to prevent a
recurrence of cases like the instant case. Huge landholdings by
corporations or private persons had spawned social unrest.
7.
REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT;
CANNOT BE ENFORCED AGAINST PERSONS WHO WERE NOT
PARTIES TO THE SUIT. We hold that the judgment cannot be
enforced against the said petitioners who were not defendants in that
litigation or who were not summoned and heard in that case. Generally,
"it is an axiom of the law that no man shall be affected by proceedings to
which he is a stranger'' (Ed. A. Keller & Co. vs. Ellerman & Bucknall
Steamship Co 38 Phil. 514, 520).
8.
ID.; ID.; ID.; REASON. To enforce the judgment against
those who were not parties to the case and who occupy portions of the
disputed land distinct and separate front the portions occupied by the
defendants in the ejectment suit, would be violative of due process of
law, the law which, according to Daniel Webster in his argument in the
Dartmouth College case, is the law of the land, a law which hears before
it condemns, which proceeds upon inquiry and renders judgment only
after trial. "The meaning is, that every citizen shall hold his life, liberty,
property, and immunities, under the protection of the general rules which
govern society." (Cited in Lopez vs. Director of Lands. 47 Phil. 23, 32.
See Gatchalian vs. Arlegui, L-35615 and Tang Tee vs. Arlegui, L-41360,
Feb. 17, 1977, 75 SCRA 234 and Berses vs. Villanueva, 25 Phil. 473).
9.
ID.; ID.; SPECIAL CIVIL ACTIONS; CONTEMPT; NO
CONTEMPT OF COURT IS COMMITTED BY A PARTY WHO PLOWED
THE LAND AND DESTROYED THE STANDING CROPS OF ONE OF
PETITIONERS WHO IS NOT A PARTY-DEFENDANT IN THE
EJECTMENT CASE BELOW; PETITIONER'S REMEDY IS NOT
CONTEMPT BUT A CIVIL OR CRIMINAL ACTION. We hold that no

VASQUEZ, J., concurring:

DECISION

AQUINO, J p:
This case is about the application of section 11, Article XIV of the 1973
Constitution (disqualifying a private corporation from purchasing public
lands) to a 1953 sales award made by the Bureau of Lands, for which a
sales patent and Torrens title were issued in 1975, and to the 1964
decision of the trial court, ejecting some of the petitioners from the land
purchased, which decision was affirmed in 1975 by the Court of
Appeals. That legal question arises under the following facts:
On January 21, 1953, the Director of Lands, after a bidding, awarded to
Bian Development Co., Inc. on the basis of its 1951 Sales Application
No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan, Guianga
(Baguio District), Davao City with an area of about two hundred fifty
hectares. Some occupants of the lot protested against the sale. The
Director of Lands in his decision of August 30, 1957 dismissed the
protests and ordered the occupants to vacate the lot and remove their
improvements. No appeal was made from that decision.
The Director found that the protestants (defendants in the 1961
ejectment suit, some of whom are now petitioners herein) entered the
land only after it was awarded to the corporation and, therefore, they
could not be regarded as bona fide occupants thereof. The Director
characterized them as squatters. He found that some claimants were
fictitious persons (p. 30, Rollo of L-43505, Okay vs. CA). He issued a
writ of execution but the protestants defied the writ and refused to
vacate the land (p. 28, Rollo of L-43505, Okay vs. CA). **
Natural Resources || Full Text Cases Prelim Exam || 20

Because the alleged occupants refused to vacate the land, the


corporation filed against them on February 27, 1961 in the Court of First
Instance of Davao, Civil Case No. 3711, an ejectment suit (accion
publiciana). The forty defendants were identified as follows:
1.

Vicente Abaqueta 21.

Eniego Garlic

2.

Candido Abella

22.

Nicolas Garlic

3.

Julio Ayog

23.

Rufo Garlic

4.

Arcadio Ayong

24.

Alfonso Ibales

5.

Generoso Bangonan

25.

6.

Lomayong Cabao 26.

Filomeno Labantaban

7.

Jose Catibring

27.

Arcadio Lumantas

8.

Teodolfo Chua

28.

Santos Militante

9.

Guillermo Dagoy

29.

Toribio Naquila

10.

Anastacia Vda. de Didal

30.

Elpidio Okay

11.

Alfredo Divinagracia

31.

Guillermo Omac

12.

Silverio Divinagracia

32.

Emilio Padayday

13.

Galina Edsa

33.

Marcosa Vda. de Rejoy

14.

Jesus Emperado

34.

Lorenzo Rutsa

15.

Porfirio Enoc

35.

Ramon Samsa

16.

Benito Ente

36.

Rebecca Samsa

17.

German Flores

37.

Alfeao Sante

18.

Ciriaco Fuentes

38.

Meliton Sante

19.

Pulong Gabao

39.

Amil Sidaani

20.

Constancio Garlic 40.

Julian Locacia

Cosme Villegas.

That ejectment suit delayed the issuance of the patent. The trial court
found that the protests of twenty of the above-named defendants were
among those that were dismissed by the Director of Lands in his 1957
decision already mentioned.
On July 18, 1961 the purchase price of ten thousand pesos was fully
paid by Bian Development Co., Inc. On November 10, 1961, an official
of the Bureau of Lands submitted a final investigation report wherein it
was stated that the corporation had complied with the cultivation and
other requirements under the Public Land Law and had paid the
purchase price of the land (p. 248, Rollo).
It was only more than thirteen years later or on August 14, 1975 when
Sales Patent No. 5681 was issued to the corporation for that lot with a
reduced area of 175.3 hectares. The patent was registered. Original
Certificate of Title No. P-5176 was issued to the patentee.
The Director of Lands in his memorandum dated June 29, 1974 for the
Secretary of Natural Resources, recommending approval of the sales
patent, pointed out that the purchaser-corporation had complied with the

said requirements long before the effectivity of the Constitution, that the
land in question was free from claims and conflicts and that the
issuance of the patent was in conformity with the guidelines prescribed
in Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad
Santos and was an exception to the prohibition in section 11, Article XIV
of the Constitution (p. 258, Rollo).
Secretary of Natural Resources Jose J. Eeido, Jr., in approving the
patent on August 14, 1975, noted that the applicant had acquired a
vested right to its issuance (p. 259, Rollo). llcd
Before that patent was issued, there was a trial in the ejectment suit.
Fifteen defendants (out of forty), namely, Julio Ayog, Guillermo Bagoy,
Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose Emperado,
Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton
Sante, Ramon Samsa, Rebecca Samsa, Arcadio Sarumines and Felix
Tahantahan, testified that they entered the disputed land long before
1951 and that they planted it to coconuts, coffee, jackfruit and other fruit
trees (p. 28, Record on Appeal).
The trial court did not give credence to their testimonies. It believed the
report of an official of the Bureau of Lands that in 1953 the land was free
from private claims and conflicts and it gave much weight to the decision
of the Director of Lands dismissing the protests of the defendants
against the sales award (p. 30, Record on Appeal).
Furthermore, the trial court during its ocular inspection of the land on
November 8, 1964 found that the plantings on the land could not be
more than ten years old, meaning that they were not existing in 1953
when the sales award was made. Hence, the trial court ordered the
defendants to vacate the land and to restore the possession thereof to
the company. The Court of Appeals affirmed that judgment on
December 5, 1975 in its decision in Bian Development Co., Inc. vs.
Sante, CA-G.R. No. 37142-R. The review of the decision was denied by
this Court on May 17, 1976 in Elpidio Okay vs. Court of Appeals, L43505.
After the record was remanded to the trial court, the corporation filed a
motion for execution. The defendants, some of whom are now
petitioners herein, opposed the motion. They contended that the
adoption of the Constitution, which took effect on January 17, 1973, was
a supervening fact which rendered it legally impossible to execute the
lower court's judgment. They invoked the constitutional prohibition,
already mentioned, that "no private corporation or association may hold
alienable lands of the public domain except by lease not to exceed one
thousand hectares in area."
The lower court suspended action on the motion for execution because
of the manifestation of the defendants that they would file a petition for
prohibition in this Court. On August 24, 1977, the instant prohibition
action was filed. Some of the petitioners were not defendants in the
ejectment case.
We hold that the said constitutional prohibition has no retroactive
application to the sales application of Bian Development Co., Inc.
because it had already acquired a vested right to the land applied for at
the time the 1973 Constitution took effect. LLphil
That vested right has to be respected. It could not be abrogated by the
new Constitution. Section 2, Article XIII of the 1935 Constitution allows
private corporations to purchase public agricultural lands not exceeding
Natural Resources || Full Text Cases Prelim Exam || 21

one thousand and twenty-four hectares. Petitioners' prohibition action is


barred by the doctrine of vested rights in constitutional law.

possessed portions of land even before the war. They should have filed
homestead or free patent applications.

"A right is vested when the right to enjoyment has become the property
of some particular person or persons as a present interest" (16 C.J.S.
1173). It is "the privilege to enjoy property legally vested, to enforce
contracts, and enjoy the rights of property conferred by the existing law"
(12 C.J. 955, Note 46, No. 6) or "some right or interest in property which
has become fixed and established and is no longer open to doubt or
controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs.
Farrales, 51 Phil. 498, 502).

Our jurisdiction is limited to the resolution of the legal issue as to


whether the 1973 Constitution is an obstacle to the implementation of
the trial court's 1964 final and executory judgment ejecting the
petitioners. On that issue, we have no choice but to sustain its
enforceability.

The due process clause prohibits the annihilation of vested rights. "A
state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by
a change in the constitution of the State, except in a legitimate exercise
of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses
the concept of present fixed interest, which in right reason and natural
justice should be protected against arbitrary State action, or an innately
just and imperative right which an enlightened free society, sensitive to
inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174,
Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).

Nevertheless, in the interest of social justice, to avoid agrarian unrest


and to dispel the notion that the law grinds the faces of the poor, the
administrative authorities should find ways and means of
accommodating some of the petitioners if they are landless and are
really tillers of the soil who in the words of President Magsaysay
deserve a little more food in their stomachs, a little more shelter over
their heads and a little more clothing on their backs. The State should
endeavor to help the poor who find it difficult to make both ends meet
and who suffer privations in the universal struggle for existence.
A tiller of the soil is entitled to enjoy basic human rights, particularly
freedom from want. The common man should be assisted an
possessing and cultivating a piece of land for his sustenance, to give
him social security and to enable him to achieve a dignified existence
and become an independent, self-reliant and responsible citizen in our
democratic society.

Secretary of Justice Abad Santos in his 1973 opinion ruled that where
the applicant, before the Constitution took effect, had fully complied with
all his obligations under the Public Land Act in order to entitle him to a
sales patent, there would seem to be no legal or equitable justification
for refusing to issue or release the sales patent (p. 254, Rollo).

To guarantee him that right is to discourage him from becoming a


subversive or from rebelling against a social order where, as the
architect of the French Revolution observed, the rich are choking with
the superfluities of life but the famished multitude lack the barest
necessities.

In Opinion No. 140, series of 1974, he held that as soon as the applicant
had fulfilled the construction or cultivation requirements and has fully
paid the purchase price, he should be deemed to have acquired by
purchase the particular tract of land and to him the area limitation in the
new Constitution would not apply.

Indeed, one purpose of the constitutional prohibition against purchases


of public agricultural lands by private corporations is to equitably diffuse
land ownership or to encourage "owner-cultivatorship and the economic
family-size farm" and to prevent a recurrence of cases like the instant
case. Huge landholdings by corporations or private persons had
spawned social unrest.

In Opinion No. 185, series of 1976, Secretary Abad Santos held that
where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was completed
after January 17, 1973, the applicant was, nevertheless, entitled to a
sales patent (p. 256, Rollo).
Such a contemporaneous construction of the constitutional prohibition
by a high executive official carries great weight and should be accorded
much respect. It is a correct interpretation of section 11 of Article XIV.
In the instant case, it is incontestable that prior to the effectivity of the
1973 Constitution the right of the corporation to purchase the land in
question had become fixed and established and was no longer open to
doubt or controversy.
Its compliance with the requirements of the Public Land Law for the
issuance of a patent had the effect of segregating the said land from the
public domain. The corporation's right to obtain a patent for that land is
protected by law. It cannot be deprived of that right without due process
(Director of Lands vs. CA, 123 Phil. 919). LLphil
As we cannot review the factual findings of the trial court and the Court
of Appeals, we cannot entertain petitioners' contention that many of
them by themselves and through their predecessors-in-interest have

Petitioners' counsel claims that Bian Development Co., Inc. seeks to


execute the judgment in Civil Case No. 3711, the ejectment suit from
which this prohibition case arose, against some of the petitioners who
were not defendants in that suit (p. 126, Rollo).
Those petitioners are not successors-in-interest of the defendants in the
ejectment suit. Nor do they derive their right of possession from the said
defendants. Those petitioners occupy portions of the disputed land
distinct and separate from the portions occupied by the said defendants.
prcd
We hold that judgment cannot be enforced against the said petitioners
who were not defendants in that litigation or who were not summoned
and heard in that case. Generally, "it is an axiom of the law that no man
shall be affected by proceedings to which he is a stranger" (Ed. A. Keller
& Co. vs. Ellerman & Bucknall Steamship Co., 38 Phil. 514, 520).
To enforce the judgment against those who were not parties to the case
and who occupy portions of the disputed land distinct and separate from
the portions occupied by the defendants in the ejectment suit, would be
violative of due process of law, the law which, according to Daniel
Webster in his argument in the Dartmouth College case, is the law of
the land, a law which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial. "The meaning is, that every
Natural Resources || Full Text Cases Prelim Exam || 22

citizen shall hold his life, liberty, property, and immunities, under the
protection of the general rules which govern society." (Cited in Lopez vs.
Director of Lands, 47 Phil. 23, 32. See Gatchalian vs. Arlegui, L-35615
and Tang Tee vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234
and Berses vs. Villanueva, 25 Phil. 473.)
Contempt incident. During the pendency of this case, or at about four
o'clock in the morning of December 12, 1978, Ciriaco Tebayan,
Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of
the Crown Fruits and Cannery Corporation, plowed or bulldozed with
their tractors a portion of the disputed land which was occupied by
Melquiades Emberador, one of the petitioners herein. The disputed land
was leased by Bian Development Co., Inc. to the canning corporation.
The four tractor drivers destroyed the improvements thereon worth
about five thousand pesos consisting of coffee, coconut and banana
plants. Emberador was in the hospital at the time the alleged destruction
of the improvements occurred. However, it should be noted that
Emberador was not expressly named as a defendant in the ejectment
suit. Apparently, he is not included in the trial court's decision although
he was joined as a co-petitioner in this prohibition case.
The petitioners in their motion of January 11, 1979 asked that the four
tractor drivers and Honesto Garcia, the manager of Bian Development
Co., Inc., be declared in contempt of court for having disregarded the
restraining order issued by this Court on August 29, 1977, enjoining
specifically Judge Vicente N. Cusi and the provincial sheriff from
enforcing the decision in the ejectment suit, Civil Case No. 3711 (pp. 4647, 138-141, Rollo).
Garcia and the four drivers answered the motion. The incident was
assigned for hearing to Judge Antonio M. Martinez of the Court of First
Instance of Davao. Judge Martinez found that the plowing was made at
the instance of Garcia who told the barrio captain, petitioner Lausan
Ayog, a Bagobo, that he (Garcia) could not wait anymore for the
termination of this case.
The record shows that on April 30, 1979 or four months after the said
incident, Emberador, in consideration of P3,500, as the value of the
improvements on his land, executed a quitclaim in favor of the Crown
Fruits and Cannery Corporation (Exh. 1, 2 and 3).
We hold that no contempt was committed. The temporary restraining
order was not directed to Bian Development Co., Inc. its officers,
agents or privies. Emberador was not named specifically in the trial
court's judgment as one of the occupants to be ejected.
For the redress of whatever wrong or delict was committed against
Emberador by reason of the destruction of his improvements, his
remedy is not in a contempt proceeding but in some appropriate civil
and criminal actions against the destroyer of the improvements. LLphil
In resume, we find that there is no merit in the instant prohibition action.
The constitutional prohibition relied upon by the petitioners as a ground
to stop the execution of the judgment in the ejectment suit has no
retroactive application to that case and does not divest the trial court of
jurisdiction to enforce that judgment.
WHEREFORE, the petition is dismissed for lack of merit but with the
clarification that the said judgment cannot be enforced against those
petitioners herein who were not defendants in the ejectment case, Civil
Case No. 3711, and over whom the lower court did not acquire
jurisdiction. The contempt proceeding is also dismissed. No costs.

SO ORDERED.
G.R. No. L-55289 June 29, 1982
REPUBLIC OF THE PHIL. vs. CANDIDO P. VILLANUEVA, ET AL.

EN BANC
[G.R. No. L-55289. June 29, 1982.]

REPUBLIC OF THE PHILIPPINES, represented by the Director of


Lands, petitioner-appellant, vs. JUDGE CANDIDO P. VILLANUEVA, of
the Court of First Instance of Bulacan, Malolos Branch VII, and IGLESIA
NI CRISTO, as a corporation sole, represented by ERAO G.
MANALO, as Executive Minister, respondents-appellees.

SYNOPSIS
In 1933, private respondent, a corporation sole duly existing under
Philippine laws, acquired two lots with a total area of 313 square meters
from Andres Perez, who had possessed the property since 1933 and
had declared the same for tax purposes. On September 13, 1977,
private respondent filed an application for registration of the two lots
pursuant to Section 48(b) of the Public Land Law alleging that it and its
predecessor-in-interest had possessed the land for more than 30 years.
The Republic of the Philippines opposed the application on the ground
that the Iglesia Ni Cristo, as a corporation sole, is disqualified under the
Constitution to hold alienable lands of the public domain and that the
land applied for is a public land. After hearing, the trial court ordered the
registration of the two lots in the name of private respondent. Hence,
this appeal by the Republic.
The Supreme Court held that the Constitution prohibits a corporation
sole or a juridical person like the Iglesia Ni Cristo from acquiring or
holding lands of the public domain; that said church is not entitled to
avail of the benefits of Section 48(b) of the Public Land Law which
applies only to Filipino citizens or natural persons; and that the subject
lots are not private lands because possession by the applicant and his
predecessors-in-interest has not been since time immemorial and
because land registration proceeding under Section 48(b) of the Public
Land Law presupposes that the land is public.

SYLLABUS
1.
LAND REGISTRATION AND MORTGAGES; PUBLIC LAND
LAW; LAND OF PUBLIC DOMAIN; JURIDICAL PERSONS NOT
ENTITLED TO ACQUIRE SAME UNDER CONSTITUTION AND
SECTION 48(b) OF PUBLIC LAND ACT. The Iglesia Ni Cristo, as a
corporation sole or a juridical person, is disqualified to acquire or hold
alienable lands of the public domain, like the two lots in question,
because of the constitutional prohibition and because the said church is
not entitled to avail of the benefits of Section 48(b) of the Public Land
Law which applies only to Filipino citizens or natural persons. A
corporation sole (an "unhappy freak of English Law") has no nationality
Natural Resources || Full Text Cases Prelim Exam || 23

(Roman Catholic Apostolic Arm of Davao, Inc. vs. Land Registration


Commission, 102 Phil. 596).
2.
ID.; ID.; ID.; ID.; CASE AT BAR DIFFERENTIATED FROM
SUSI CASE. The contentions in the comments of the Iglesia Ni Cristo
that the two lots are private lands, following the rule laid down in Susi
vs. Razon and Director of Lands, 48 Phil. 424, is not correct. What was
considered private land in the Susi case was a parcel of land possessed
by a Filipino citizen since time immemorial, as in Cario vs. Insular
Government, 212 U.S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132.
The lots sought to be registered in this case do not fall within that
category. They are still public lands. A land registration proceeding
under section 48(b) "presupposes that the land is public" (Mindanao vs.
Director of Lands, L-19535, July 10, 1967, 20 SCRA 641, 644).
3.
ID.; ID.; ID.; ID.; WHAT IT COMPRISES OF. All lands that
were not acquired from the govenment, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land
that should have been in the possession of an occupant and of his
predecessors-in-interest since time immemorial, for such possession
would justify the presumption that the land had never been part of the
public domain or that it had been a private property even before the
Spanish conquest (Oh Cho vs. Director of Lands, 75 Phil. 890).
4.
ID.; ID.; CONFIRMATION OF TITLE THEREUNDER IS A
"DERECHO DOMINICAL INCOATIVO". The right of an occupant of
public agricultural land to obtain a confirmation of his title under section
48(b) of the Public Land Law is a "derecho dominical incoativo" and that
before the issuance of the certificate of title the occupant is not in the
juridical sense the true owner of the land since it still pertains to the
State. (Uy Un vs. Perez, 71 Phil. 508).

FERNANDO, C.J., dissenting:


1.
CONSTITUTIONAL LAW; DISPOSITION OF ALIENABLE
LANDS OF THE PUBLIC DOMAIN; REGISTRATION IN FAVOR OF
APPELLEE ENTITLED TO AFFIRMANCE ON THE GROUND OF
RELIGIOUS FREEDOM. The provision in the Constitution that "No
private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area;
Art. XIV, Sec. II of the Constitution is not the decisive consideration for
the denial of the registration in favor of appellee. It is the view that the
Bill of Rights provision on religious freedom which bans the enactment
of any law prohibiting its free exercise, the "enjoyment of religious
profession and worship without discrimination or preference. (being)
forever . . . allowed." Here the Iglesia Ni Cristo, as a corporation sole,
seeks the registration. The area involved in the two parcels of land in
question is 313 square meters. As admitted in the opinion of the Court, a
chapel is therein located. It is that basic consideration that leads to the
conclusion that the balancing process, which finds application in
constitutional law adjudication, equally requires that when two
provisions in the Constitution maybe relevant to a certain factual
situation, it calls for the affirmance of the decision of respondent Judge
allowing the registration.
2.
ID.; ID.; REGISTRATION IN FAVOR OF APPELLEE
ENTITLED TO AFFIRMANCE ON THE GROUND OF EQUAL
PROTECTION. Another obstacle to a partial concurrence is the fact
that the right of the Roman Catholic Apostolic Administrator of Davao to
register land purchased from a Filipino citizen was recognized in The

Roman Catholic Apostolic Administrator of Davao vs. Land Registration


(102 Phil. 596 119571). The decision of respondent Judge is therefore
equally entitled to affirmance on equal protection grounds.

DECISION

AQUINO, J p:
Like L-49623, Manila Electric Company vs. Judge Castro-Bartolome,
this case involves the prohibition in section 11, Article XIV of the
Constitution that "no private corporation or association may hold
alienable lands of the public domain except by lease not to exceed one
thousand hectares in area."
Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with
an area of 313 square meters and an assessed value of P1,350 were
acquired by the Iglesia Ni Cristo on January 9, 1953 from Andres Perez
in exchange for a lot with an area of 247 square meters owned by the
said church (Exh. D).
The said lots were already possessed by Perez in 1933. They are not
included in any military reservation. They are inside an area which was
certified as alienable or disposable by the Bureau of Forestry in 1927.
The lots are planted to santol and mango trees and banana plants. A
chapel exists on the said land. The land had been declared for realty tax
purposes. Realty taxes had been paid therefor (Exh. N).
On September 13, 1977, the Iglesia Ni Cristo, a corporation sole, duly
existing under Philippine laws, filed with the Court of First Instance of
Bulacan an application for the registration of the two lots. It alleged that
it and its predecessors-in-interest had possessed the land for more than
thirty years. It invoked section 48(b) of the Public Land Law, which
provides:
"Chapter VIII. Judicial confirmation of imperfect or incomplete titles.
xxx

xxx

xxx

"SEC. 48.The following-described citizens of the Philippines, occupying


lands of the public domain or claiming to own any such lands or an
interest therein, but whose titles have not been perfected or completed,
may apply to the Court of First Instance of the province where the land
is located for confirmation of their claims and the issuance of a
certificate of title therefore, under the Land Registration Act, to wit:
xxx

xxx

xxx

"(b)
Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain,
under a bona fide claim of acquisition of ownership, for at least thirty
years immediately preceding the filing of the application for confirmation
of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the
provisions of this chapter." (As amended by Republic Act No. 1942,
approved on June 22, 1957.)

Natural Resources || Full Text Cases Prelim Exam || 24

The Republic of the Philippines, through the Director of Lands, opposed


the application on the grounds that applicant, as a private corporation, is
disqualified to hold alienable lands of the public domain, that the land
applied for is public land not susceptible of private appropriation and
that the applicant and its predecessors-in-interest have not been in the
open, continuous, exclusive and notorious possession of the land since
June 12, 1945.

G.R. No. L-44237 February 28, 1989

After hearing, the trial court ordered the registration of the two lots, as
described in Plan Ap-04-001344 (Exh. E), in the name of the Iglesia Ni
Cristo, a corporation sole, represented by Executive Minister Erao G.
Manalo, with office at the corner of Central and Don Mariano Marcos
Avenues, Quezon City.

[G.R. No. L-44237. February 28, 1989.]

From that decision, the Republic of the Philippines appealed to this


Court under Republic Act No. 5440. The appeal should be sustained.
As correctly contended by the Solicitor General, the Iglesia Ni Cristo, as
a corporation sole or a juridical person, is disqualified to acquire or hold
alienable lands of the public domain, like the two lots in question,
because of the constitutional prohibition already mentioned and
because the said church is not entitled to avail itself of the benefits of
section 48(b) which applies only to Filipino citizens or natural persons. A
corporation sole (an "unhappy freak of English law") has no nationality
(Roman Catholic Apostolic Adm. of Davao, Inc. vs. Land Registration
Commission, 102 Phil. 596. See Register of Deeds vs. Ung Siu Si
Temple, 97 Phil. 58 and sec. 49 of the Public Land Law).
The contention in the comments of the Iglesia Ni Cristo (its lawyer did
not file any brief) that the two lots are private lands, following the rule
laid down in Susi vs. Razon and Director of Lands, 48 Phil. 424, is not
correct. What was considered private land in the Susi case was a parcel
of land possessed by a Filipino citizen since time immemorial, as in
Cario vs. Insular Government, 212 U.S. 449, 53 L. ed. 594, 41 Phil.
935 and 7 Phil. 132. The lots sought to be registered in this case do not
fall within that category. They are still public lands. A land registration
proceeding under section 48(b) "presupposes that the land is public"
(Mindanao vs. Director of Lands, L-19535, July 10, 1967, 20 SCRA 641,
644). LLpr
As held in Oh Cho vs. Director of Lands, 75 Phil. 890, "all lands that
were not acquired from the Government, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land
that should have been in the possession of an occupant and of his
predecessors-in-interest since time immemorial, for such possession
would justify the presumption that the land had never been part of the
public domain or that it had been a private property even before the
Spanish conquest."
In Uy Un vs. Perez, 71 Phil. 508, it was noted that the right of an
occupant of public agricultural land to obtain a confirmation of his title
under section 48(b) of the Public Land Law is a "derecho dominical
incoativo" and that before the issuance of the certificate of title the
occupant is not in the juridical sense the true owner of the land since it
still pertains to the State.
The lower court's judgment is reversed and set aside. The application
for registration of the Iglesia Ni Cristo is dismissed with costs against
said applicant.
SO ORDERED.

VICTORIA ONG DE OCSIO vs. COURT OF APPEALS, ET AL.

FIRST DIVISION

VICTORIA ONG DE OCSIO, petitioner, vs. COURT OF APPEALS and


the RELIGIOUS OF THE VIRGIN MARY, represented by M.O. Leoncia
Pacquing, R.V.M., respondents.

Elpedio N. Cabasan for petitioner.


Padilla Law Office for private respondent.

SYLLABUS
1.
REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE
COURT OF APPEALS CONCLUSIVE ON THE SUPREME COURT.
Both the cadastral Court and the Court of Appeals came to the
conclusion, after analyzing and weighing the testimonial and
documentary evidence adduced by the parties, that Virginia Ong de
Ocsio's version of the facts was not true that it was another property,
not Lot No. 1272, that she had conveyed to the religious corporation
but that it was indeed Lot No. 1272 that was subject of the sale and had
indeed been transferred to the latter. Now, findings of fact of this sort,
contained in a decision of the Court of Appeals are by long and
uniformly observed rule conclusive on the parties and on the Supreme
Court, as well; subject only to a few specified exceptions, none of which
obtains here, said findings may not be reviewed on appeal.
2.
CIVIL LAW; LAND TITLE AND DEEDS; CONTINUOUS AND
EXCLUSIVE POSSESSION OF ALIENABLE PUBLIC LAND FOR
THIRTY (30) YEARS; CONVERTS THE LAND TO PRIVATE
PROPERTY. As regards the issue of law raised by her, petitioner
fares no better. Citing Manila Electric Co. v. Castro-Bartolome, 114
SCRA 799 (1982) and Republic v. Villanueva, 114 SCRA 875 (1982), in
relation to Section 11, Article XIV of the 1973 Constitution, she asserts
that as the private respondent is a religious corporation, it is disqualified
to obtain judicial confirmation of an imperfect title under Section 48 (b)
of the Public Land Act which grants that right only to natural persons.
The cited rulings no longer control. In Director of Lands v. I.A.C., 146
SCRA 509 (1986), is that open, continuous and exclusive possession of
alienable public land for at least thirty (30) years in accordance with the
Public Land Act ipso jure converts the land to private property, and a
juridical person who thereafter acquires the same may have title thereto
confirmed in its name.
3.
CONSTITUTIONAL LAW; PROHIBITION AGAINST
ACQUISITION OF LANDS BY PRIVATE CORPORATIONS; NOT
APPLICABLE TO PUBLIC LANDS CONVERTED TO PRIVATE
OWNERSHIP UNDER PUBLIC LAND ACT. In Director of Lands v.
Manila Electric Co., 153 SCRA 686 (September 11, 1987), and Republic
v. C.A, 156 SCRA 344 (October 30, 1987) where the same question of
Natural Resources || Full Text Cases Prelim Exam || 25

law was raised. In the latter it was expressly held that the prohibitions in
the 1973 and 1987 Constitutions against acquisition or registration of
lands by or in behalf of private corporations do not apply to public lands
already converted to private owner ship by natural persons under the
provisions of the Public Land Act. In the present case, Virginia Ong de
Ocsio and her predecessors-in-interest having possessed Lot No. 1272
for the period and under the conditions prescribed by law for acquisition
of ownership of disposable public land prior to the sale of the property to
the Religious of the Virgin Mary, confirmation of title thereto in the
latter's name is, under the precedents referred to, entirely in order.

DECISION

NARVASA, J p:
From the adverse judgment of the Court of Appeals, 1 affirming in toto
that of the Trial Court, 2 the petitioner has come to this Court on an
appeal by certiorari to plead for reversal of (1) the factual determination
that she had sold the lot in controversy to private respondent, and (2)
the legal conclusion that neither the 1973 nor the 1987 Constitution
disqualifies the corporation known as the Religious of the Virgin Mary,
from acquiring the land in question and registering it in its name. In light
of the time-honored rule that findings of fact of the Court of Appeals are
generally final, and the doctrine lately laid down by this Court on the
precise legal issue now raised by petitioner, her appeal must fail.
The controversy at bar arose in connection with cadastral proceedings
initiated by the Director of Lands, in behalf of the Republic, for the
settlement and adjudication of title to a large fact of land measuring
261.5791 hectares, divided into 1,419 lots, situated in the City of Iligan.
3
Victoria Ong de Ocsio (herein petitioner) seasonably presented an
answer to the petition. She alleged that she was the owner, by
purchase, of two (2) parcels of land with specific boundaries
comprehended in the cadastral proceeding: Lot No. 1272, measuring
256 square meters and Lot 1273 a road lot, measuring 21 square
meters; and that as owner, she had been in possession of both lots for
fifteen (15) years, and her predecessors-in-interest, for sixty (60) years.
4 Title to the same parcels of land was however claimed by the
Religious of the Virgin Mary. 5 In its answer, it averred that it had bought
the lots from Victoria Ong de Ocsio and had been in possession as
owner thereof for over four years, and its possession and that of its
predecessors was immemorial.
Evidence was received on these conflicting assertions after which the
Cadastral Court rendered judgment, declaring that the evidence
satisfactorily established that Victoria Ong de Ocsio had in truth sold Lot
No. 1272 to the Religious of the Virgin Mary in virtue of a deed of sale
dated April 12, 1956 (Exhibit 1), and Lot No. 1273 was a road right of
way granted to the City of Iligan. The judgment contained the following
dispositive portion, viz. 6
WHEREFORE, the court renders judgment adjudicating Cadastral Lot
1272, Iligan Cadastre, to the Religious of the Virgin Mary, a duly
registered domestic religious corporation, the members of which are all
Filipino citizens, with main office in the City of Manila, but the building
existing thereon is hereby declared to be the property of claimant
Victoria Ong de Ocsio who is hereby ordered to remove said building

out of the premises within 90 days from date hereof. The claim of
Victoria Ong de Ocsio with respect to said cadastral lot is dismissed. No
pronouncement is made as to costs.
Let the corresponding decree issue 30 days after this decision shall
have become final.
As aforestated, the Court of Appeals affirmed the cadastral court's
decision in toto. So, too, will this Court.
Both the cadastral Court and the Court of Appeals came to the
conclusion, after analyzing and weighing the testimonial and
documentary evidence adduced by the parties, that Virginia Ong de
Ocsio's version of the facts was not true that it was another property,
not Lot No. 1272, that she had conveyed to the religious corporation
but that it was indeed Lot No. 1272 that was subject of the sale and had
indeed been transferred to the latter. Now, findings of fact of this sort,
contained in a decision of the Court of Appeals are by long and
uniformly observed rule conclusive on the parties and on the Supreme
Court, as well; 7 subject only to a few specified exceptions, 8 none of
which obtains here, said findings may not be reviewed on appeal. prLL
As regards the issue of law raised by her, petitioner fares no better.
Citing Manila Electric Co. v. Castro-Bartolome, 114 SCRA 799 (1982)
and Republic v. Villanueva, 114 SCRA 875 (1982), in relation to Section
11, Article XIV of the 1973 Constitution, she asserts that as the private
respondent is a religious corporation, it is disqualified to obtain judicial
confirmation of an imperfect title under Section 48(b) of the Public Land
Act which grants that right only to natural persons. The cited rulings no
longer control. Current doctrine, first announced by the Court en banc in
Director of Lands v. I.A.C., 146 SCRA 509 (1986), is that open,
continuous and exclusive possession of alienable public land for at least
thirty (30) years in accordance with the Public Land Act ipso jure
converts the land to private property, and a juridical person who
thereafter acquires the same may have title thereto confirmed in its
name. Virtually the same state of facts obtained in said case that now
obtain here. A private corporation had purchased the land originally of
the public domain from parties who had, by themselves and through
their predecessors-in-interest, possessed and occupied it since time
immemorial. It had thereafter instituted proceedings for confirmation of
title under Section 48(b) of the Public Land Act. In upholding its right to
do so, the court held that the fact that the proceedings had been
instituted by said purchaser in its own name and not in the name of the
transferors was ". . . simply . . . (an) accidental circumstance, productive
of a defect hardly more than procedural and in nowise affecting the
substance and merits of the right of ownership sought to be confirmed."
The ruling was reaffirmed in two later cases, Director of Lands v. Manila
Electric Co., 153 SCRA 686 (September 11, 1987), and Republic v. C.A,
156 SCRA 344 (October 30, 1987) where the same question of law was
raised. In the latter it was expressly held that the prohibitions in the 1973
and 1987 Constitutions against acquisition or registration of lands by or
in behalf of private corporations do not apply to public lands already
converted to private owner ship by natural persons under the provisions
of the Public Land Act. In the present case, Virginia Ong de Ocsio and
her predecessors-in-interest having possessed Lot No. 1272 for the
period and under the conditions prescribed by law for acquisition of
ownership of disposable public land prior to the sale of the property to
the Religious of the Virgin Mary, confirmation of title thereto in the
latter's name is, under the precedents referred to, entirely in order.

Natural Resources || Full Text Cases Prelim Exam || 26

WHEREFORE, the judgment of the Court of Appeals subject of the


petition for review on certiorari is AFFIRMED in toto. Costs against the
petitioner.

SAN MIGUEL CORPORATION vs. COURT OF APPEALS, ET AL.

testified that he handled the negotiations for the purchase of the


property; that SMC was authorized to own and acquire property as
shown by its articles of incorporation and by-laws; that since its
acquisition in 1975, the property had been used as a hatchery farm of
SMC; that SMC's possession in the concept of an owner had been
continuous, adverse and against the whole world, and that the land was
declared for taxation purposes still in the name of Silverio Perez.

THIRD DIVISION

DECISION

G.R. No. 57667 May 28, 1990

[G.R. No. 57667. May 28, 1990.]


FERNAN, C.J p:
SAN MIGUEL CORPORATION, petitioner, vs. COURT OF APPEALS
and DIRECTOR OF LANDS, respondents.

In this petition for review on certiorari, San Miguel Corporation seeks the
reversal of the decision of the Court of Appeals 1 denying its application
for registration of a parcel of land in view of its failure to show
entitlement thereto.

Ciriaco Lopez, Jr. & Associates for petitioner.

On December 23, 1975, petitioner San Miguel Corporation (SMC for


brevity) purchased from Silverio Perez Lot 684, a 14,531-square-meter
parcel of land located in Sta. Anastacia, Sto. Tomas, Batangas, in
consideration of the sum of P133,084.80. 2 On February 21, 1977,
claiming ownership in fee simple of the land, SMC filed before the then
Court of First Instance, now Regional Trial Court of Batangas an
application for its registration under the Land Registration Act. LibLex

SYLLABUS
1.
LAND TITLES AND DEEDS; PUBLIC LANDS; REQUISITES
IN THE ACQUISITION THEREOF. Open, exclusive and undisputed
possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of judicial or other
sanction, ceases to be public land and becomes private property. Such
open, continuous, exclusive and notorious occupation of the disputed
properties for more than 30 years must, however, be conclusively
established.
2.
ID.; ID.; ID.; NOT COMPLIED WITH IN CASE AT BAR. In
this case, petitioner's claim that its predecessor-in-interest had open,
exclusive and undisputed possession of Lot 684 for more than thirty
years is anchored on certain documentary and testimonial evidence. Its
documentary evidence consist of tax declaration No. 923 wherein it
appears that in 1974, Silverio Perez declared as his own for taxation
purposes, a certain riceland with an area of 1.5657 hectares located in
Sta. Anastacia, Sto. Tomas, Batangas, and a certification of the Office of
the Treasurer of Sto. Tomas to the effect that in 1977, Silverio Perez
paid realty taxes for the land subject of tax declaration no. 923. Tax
declarations and receipts are not conclusive evidence of ownership or
right of possession over a piece of land. They are merely indicia of a
claim of ownership. Tax declarations only become strong evidence of
ownership of land acquired by prescription, a mode of acquisition of
ownership relied upon by petitioner in this case, when accompanied by
proof of actual possession. Such proof of actual possession was sought
to be provided by the testimony of vendor Silverio Perez that he had
been in possession of the property since 1933 until he sold it to SMC in
1975; that the property was given to him by his parents when he got
married; that no document evidenced that transfer; that it had been in
the possession of his parents since 1925; that he had declared the
property in his name for taxation purposes, that he had paid taxes
therefor, and that he was in peaceful, continuous and exclusive
possession of the property until its sale to SMC. Petitioner did not
present other witnesses to corroborate Perez' testimony. Its other
witness, Antonio M. de las Alas, Jr., a lawyer of the petitioner, simply

The Solicitor General, appearing for the Republic of the Philippines,


opposed the application for registration contending that SMC's claim of
ownership in fee simple on the basis of a Spanish title or grant could no
longer be availed of by the applicant as the six-month period from
February 16, 1976 prescribed by Presidential Decree No. 892 had
elapsed; that the parcel of land in question is part of the public domain,
and that SMC, being a private corporation, is disqualified under Section
11, Article XIV of the Constitution from holding alienable lands of the
public domain. The Solicitor General thereafter authorized the Provincial
Fiscal of Batangas to appear in said case, subject to his supervision and
control.
At the initial and only hearing held on October 12, 1977, the Court, upon
motion of SMC and there being no opposition to the application except
that of the Republic of the Philippines, issued an order of general
default. SMC was allowed to mark documentary evidence to establish
jurisdictional facts and to present additional evidence before the Clerk of
Court who was appointed Commissioner for that purpose.
On December 12, 1977, the lower court, presided by Judge Eduardo C.
Abaya, rendered a decision granting the application for registration and
adjudicating the property in favor of SMC.
The Solicitor General appealed to the Court of Appeals. In its decision of
March 23, 1981, said court reversed the decision of the lower court and
declared the parcel of land involved as public land. Hence, the instant
petition with SMC submitting the following alleged "grave errors" of the
Court of Appeals for this Court's resolution: (1) the Court of Appeals'
failure to hold that "prescription is a mode of acquiring title or ownership
of land and that the title thus acquired is registrable"; (2) the Court of
Appeals' disregard of SMC's evidence "not on the basis of controverting
evidence but on the basis of unfounded suppositions and conjectures,"
and (3) the Court of Appeals' reversal of the factual findings of the trial
Natural Resources || Full Text Cases Prelim Exam || 27

court which had the opportunity of observing the demeanor and sincerity
of the witnesses. 3
We need not dwell lengthily on the third "error" assigned by petitioner.
Suffice it to state that while trial courts may have the opportunity to
observe the demeanor of witnesses, their factual findings may
nonetheless be reversed by the Court of Appeals, the appellate court
vested by law to resolve both legal and factual issues, if, by the
evidence on record, it appears that the trial court involved erred. What is
of primary concern to us in this case is the issue of whether or not the
evidence presented by the petitioner is sufficient to warrant a ruling that
SMC and/or its predecessor-in-interest has a registrable right over Lot
684.
Open, exclusive and undisputed possession of alienable public land for
the period prescribed by law creates the legal fiction whereby the land,
upon completion of the requisite period ipso jure and without the need of
judicial or other sanction, ceases to be public land and becomes private
property. 4 Such open, continuous, exclusive and notorious occupation
of the disputed properties for more than 30 years must, however, be
conclusively established. 5 This quantum of proof is necessary to avoid
the erroneous validation of actually fictitious claims of possession over
the property in dispute. Cdpr
In this case, petitioner's claim that its predecessor-in-interest had open,
exclusive and undisputed possession of Lot 684 for more than thirty
years is anchored on certain documentary and testimonial evidence. Its
documentary evidence consist of tax declaration No. 923 wherein it
appears that in 1974, Silverio Perez declared as his own for taxation
purposes, a certain riceland with an area of 1.5657 hectares located in
Sta. Anastacia, Sto. Tomas, Batangas, 6 and a certification of the Office
of the Treasurer of Sto. Tomas to the effect that in 1977, Silverio Perez
paid realty taxes for the land subject of tax declaration no. 923. 7
Tax declarations and receipts are not conclusive evidence of ownership
or right of possession over a piece of land. 8 They are merely indicia of
a claim of ownership. 9 Tax declarations only become strong evidence
of ownership of land acquired by prescription, a mode of acquisition of
ownership relied upon by petitioner in this case, when accompanied by
proof of actual possession. 10
Such proof of actual possession was sought to be provided by the
testimony of vendor Silverio Perez that he had been in possession of
the property since 1933 until he sold it to SMC in 1975; that the property
was given to him by his parents when he got married; that no document
evidenced that transfer; that it had been in the possession of his parents
since 1925; that he had declared the property in his name for taxation
purposes, that he had paid taxes therefor, and that he was in peaceful,
continuous and exclusive possession of the property until its sale to
SMC. 11
Petitioner did not present other witnesses to corroborate Perez'
testimony. Its other witness, Antonio M. de las Alas, Jr., a lawyer of the
petitioner, simply testified that he handled the negotiations for the
purchase of the property; that SMC was authorized to own and acquire
property as shown by its articles of incorporation and by-laws; that since
its acquisition in 1975, the property had been used as a hatchery farm of
SMC; that SMC's possession in the concept of an owner had been
continuous, adverse and against the whole world, and that the land was
declared for taxation purposes still in the name of Silverio Perez. 12

We hold that there is paucity of evidence of actual, notorious and


exclusive possession of the property on the part of vendor Silverio
Perez so as to attach to it the character of an express grant from the
government. 13 Indeed, as correctly held by the Court of Appeals,
Silverio Perez's testimony, being uncorroborated, is simply self-serving
and hence, undeserving of any weight. llcd
WHEREFORE, the decision of the Court of Appeals is hereby
AFFIRMED. Costs against the petitioner.
SO ORDERED.
G.R. No. L-2869 March 25, 1907
MATEO CARIO vs. INSULAR GOVERNMENT
008 Phil 150

FIRST DIVISION
[G.R. No. L-2869. March 25, 1907.]

MATEO CARIO, petitioner-appellant, vs. THE INSULAR


GOVERNMENT, respondent-appellee.

Coudert Brothers, for appellant.


Solicitor-General Araneta, for appellee.

SYLLABUS
1.
REALTY; PUBLIC LANDS; TITLE. Under the express
provisions of the law, a piece of land being of common origin
presumptively belonged to the State during its former sovereignty, and
in order to perfect the legitimate acquisition of such land by private
persons it was necessary that the same passed from the possession of
the State by title of egression, title under agreement or composicion or
title by way of possessory proceedings equivalent during a certain
period to that of adjustment (composicion).
2.
ID.; ID.; POSSESSORY INFORMATION; TITLE. The title
under possessory proceedings, the only title presented herein, is not a
proprietary title authorized in substitution for that of agreement or
adjustment by royal decree of February 13, 1894, this being that last law
or decree of the former sovereignty applicable to the present subjectmatter of common lands: First, for the reason that the land referred to is
not covered nor does it come within any of the conditions required in
article 19; second, because the possessory proceedings authorized in
said royal decree for the purpose of acquiring proprietary title,
equivalent to that of agreement or adjustment, can only be brought or
instituted within a period of one year, in accordance with article 21, and
the possessory information or proceedings presented in this case was
instituted on March 7, 1901, and registered on the 11th day of the same
month and year.
Natural Resources || Full Text Cases Prelim Exam || 28

3.
ID.; ID.; REVERSION. After the expiration of the period of
one year allowed by such royal decree, the right of the cultivators and
persons in possession to obtain a free title thereto becomes canceled
and lapses, and the land and the full possession thereof reverts to the
State or to the community, as the case may be.
4.
ID.; ID.; POSSESSION; TITLE. The possessors not
included or mentioned in the said provisions of the royal decree can only
acquire, by time, the ownership and title to public alienable lands in
accordance with common law.
5.
ID.; ID.; ID.; POSSESSORY INFORMATION. In
accordance with common law, the possession as attested to and shown
in a possessory information could not go further to show right of
ownership or title until after the expiration of twenty years from the time
of verification or registry of the same in the Registry of Properties, as
prescribed in article 393 of the Mortgage Law and upon other conditions
required by this law.
6.
ID.; ID.; PRESCRIPTION. Section 6 of Act No. 627 of the
Philippine Commission admits prescription, in accordance with the
terms and conditions prescribed in Act No. 190, covering the title for the
obtaining of the right of ownership of lands not exceeding an extension
of 16 hectares, but not when the land in question consists of an
extension of 40 hectares, as is the case with the petition presented
herein, or of an extension of 28 hectares as referred to in the
possessory information proceeding upon which such petition has been
based.

DECISION

ARELLANO, C.J p:
Mateo Cario, the appellant herein, on the 23d of February, 1904, filed
his petition in the Court of Land Registration praying that there be
granted to him title to a parcel of land consisting of 40 hectares, 1 are,
and 13 centares, and situated in the town of Baguio, Province of
Benguet, together with a house erected thereon and constructed of
wood and roofed with rimo, and bounded as follows: On the north, in
lines running 1,048 metes and 20 decimeters with the lands of Sepa
Cario, H. Phelps Whitmarsh, and Calsi; on the east, in lines running
991 meters and 50 decimeters with the land of Kuidno, Esteban
Gonzales, and of the Civil Government; on the south, in lines of 115
meters and 60 decimeters, with the lands of Talaca; and on the west, in
lines running 982 meters and 20 decimeters, with the lands of Sisco
Cario and Mayengmeng.
By order of the court the hearing of this petition, No. 561, and that of
Antonio Rebollo and Vicente Valpiedad filed under No. 834, were heard
together for the reason that the latter petition claimed a small portion of
land included in the parcel set out in the former petition.
The Insular Government opposed the granting of these petitions,
alleging that the whole parcel of land is public property of the
Government and that the same was never acquired in any manner or
through any title of egresion from the State.
After trial, and the hearing of documentary and oral proof, the court of
Land Registration rendered its judgment in these terms:

"Therefore the court finds that Cario and his predecessors have not
possessed exclusively and adversely any part of the said property prior
to the date on which Cario constructed the house now there that is
to say, for the years 1897 and 1898, and Cario held possession for
some years afterwards of but a part of the property to which he claims
title. Both petitions are dismissed and the property in question is
adjudged to be public land. (Bill of exceptions, p. 15.)
The conclusions arrived at the set forth in definite terms in the decision
of the court below are the following:
"From the testimony given by Cario as well as from that of several of
the witnesses for the Government it is deduced, that in or about the year
1884 Cario erected and utilized as a domicile a house on the property
situated to the north of that property now in question, property which,
according to the plan attached to expediente No. 561, appears to be
property belonging to Donaldson Sim; that during the year 1893 Cario
sold said house to one Cristobal Ramos, who in turn sold the same to
Donaldson Sim, moving to and living on the adjoining property, which
appears on the plan aforesaid to be the property of H. Phelps
Whitmarsh, a place where the father and the grandfather of his wife, that
is to say, Ortega and Minse, had lived . . .
"In or about the years 1898 Cario abandoned the property of
Whitmarsh and located on the property described in the plan attached to
expediente No. 561, having constructed a house thereon in which he
now lives, and which house is situated in the center of the property, as is
indicated on the plan; and since which time he has undoubtedly
occupied some portion of the property now claimed by him." (Bill of
exceptions, pp. 11 and 12.)
1.
Therefore it is evident that this court can not decree the
registration of all of the superficial extension of the land described in the
petition and as appears on the plan filed herein, such extension
containing 40 hectares, 1 are, and 13 centares, inasmuch as the
documentary evidence accompanying the petition is conclusive proof
against the petitioners; this documentary proof consists of a possessory
information under date of March 7, 1901, and registered on the 11th day
of the same month and year; and, according to such possessory
information, the land therein described contains an extension of only 28
hectares limited by "the country road to the barrio of Pias," a road
appearing on the plan now presented and cutting the land, as might be
said, in half, or running through its center from north to south, a
considerable extension of land remaining on the other side of the said
road, the west side, and which could not have been included in the
possessory information mentioned.
2.
As has been shown during the trial of this case, this land, of
which mention is made in said possessory information, and upon which
is situated the house now actually occupied by the petitioner, all of
which is set forth as argument as to the possession in the judgment, is
"used for pasture and sowing," and belongs to the class called public
lands.
3.
Under the express provisions of law, a parcel of land, being of
common origin, presumptively belonged to the State during its
sovereignty, and, in order to perfect the legitimate acquisition of such
land by private persons, it was necessary that the possession of the
same pass from the State. And there is no evidence or proof of title of
egresion of this land from the domain of the Spanish Government, nor is
there any possessory information equivalent to title by composicion or
under agreement.
Natural Resources || Full Text Cases Prelim Exam || 29

4.
The possessory information filed herein is not the title to
property authorized in substitution for that of adjustment by the royal
decree of February 13, 1894, this being the last law or legal disposition
of the former sovereignty applicable to the present subject-matter of
common lands: First, for the reason that the land referred to herein is
not covered nor does it come within any one of the three conditions
required by article 19 of the said royal decree, to wit, that the land has
been in an uninterrupted state of cultivation during a period of six years
last past; or that the same has been possessed without interruption
during a period of twelve years and has been in a state of cultivation up
to the date of the information and during the three years immediately
preceding such information; or that such land had been possessed
openly without interruption during a period of thirty or more years,
notwithstanding the land had not been cultivated; nor is it necessary to
refer to the testimony given by the two witnesses to the possessory
information for the following reason: Second, because the possessory
information authorized by said royal decree or last legal disposition of
the Spanish Government, as title or for the purpose of acquiring actual
proprietary right, equivalent to that of adjustment with the Spanish
Government and required and necessary at all times until the
publication of said royal decree was limited in time to one year, in
accordance with article 21, which is as follows: " A period of one year,
not to be extended, is allowed to verify the possessory informations
which are referred to in articles 19 and 20. After the expiration of this
period of the right of the cultivators and persons in possession to obtain
gratuitous title thereto lapses and the land together with full possession
reverts to the state, or, as the case may be, to the community, and the
said possessors and cultivators or their assigns would simply have
rights under universal or general title of average in the event that the
land is sold within a period of five years immediately following the
cancellation. The possessors not included under this chapter can only
acquire by time the ownership and title to unappropriated or royal lands
in accordance with common law."
5.
In accordance with the preceding provisions, the right that
remained to Cario, if it be certain that he was the true possessor of the
land in question, was the right of average in case the Government or
State could have sold the same within the period of five years
immediately following for example, if the denouncement of purchase
had been carried out by Felipe Zafra or any other person, as appears
from the record of the trial of the case. Aside from this right, in such
event, his possession as attested in the possessory information herein
could not, in accordance with common law, go to show any right of
ownership until after the expiration of twenty years from the expiration of
twenty years from the verification and registry of the same in conformity
with the provisions of article 393 of the Mortgage Law and other
conditions prescribe by this law.
6.
The right of possession in accordance with common law
that is to say, civil law remains at all times subordinate to the Spanish
administrative law, inasmuch as it could only be of force when pertaining
to royal transferable or alienable lands, which condition and the
determination thereof is reversed to the government, which classified
and designated the royal alienable lands for the purpose of
distinguishing them from those lands strictly public, and from forestry
lands which could at no time pass to private ownership nor be acquired
through time even after the said royal decree of February 13, 1894.
7.
The advent of the new sovereignty necessarily brought a new
method of dealing with lands and particularly as to the classification and
manner of transfer and acquisition of royal or common lands then
appropriated, which were thenceforth merely called public lands, the

alienation of which was reserved to the Government, in accordance with


section 12 and 13 of the act of Congress of July 1, 1902, 1 and in
conformity with other laws enacted under this act of Congress by the
Philippine Commission prescribing rules for the execution thereof, one
of which is Act No. 648, 2 herein mentioned by the petitioner, in
connection with Act No. 627, 3 which appears to be the law upon which
the petition herein is founded.
8.
Section 6 of Act No. 627 admits prescription, in accordance
with the provisions contained in Act No. 190, as a basis for obtaining the
right of ownership. "The petitioners claims title under the period of
prescription of ten years established by that act, as well as by reason of
his occupancy and use thereof from time immemorial." (Allegation 1.)
But said act admits such prescription for the purpose of obtaining title
and ownership to lands "not exceeding more that sixteen hectares in
extent." (Sec. 6 of said act.) The land claimed by Cario is 40 hectares
in extent, if we take into consideration his petition, or an extension of 28
hectares, according to the possessory information, the only thing that
can be considered. Therefore, it follows that the judgment denying the
petition herein and now appealed from was strictly in accordance with
the law invoked herein.
9.
And of the 28 hectares of land as set out in the possessory
information, one part of same, according to the testimony of Cario,
belongs to Vicente Valpiedad, the extent of which is not determined.
From all of which it follows that the precise extent has not been
determined in the trial of this case on which judgment might be based in
the event that the judgment and title be declared in favor of the
petitioner, Mateo Cario. And we should not lose sight of the fact that,
considering the intention of Congress in granting ownership and title to
16 hectares, that Mateo Cario and his children have already exceeded
such amount in various acquirements of lands, all of which is shown in
different cases decided by the said Court of Land Registration,
donations or gifts of land that could only have been made efficacious as
to the conveyance thereof with the assistance of these new laws.
By reason of the findings set forth it is clearly seen that the court below
did not err:
"1.
In finding that Mateo Cario and those from whom he claims
his right had not possessed and claimed as owners the lands in
question since time immemorial;
"2.
In finding that the land in question did not belong to the
petitioner, but that, on the contrary, it was the property of the
Government." (Allegation 21.)
Wherefore, the judgment appealed from is affirmed with the costs of this
instance against the appellant. After the expiration of twenty days from
the notification of this decision let judgment be entered in accordance
herewith, and ten days thereafter let the case be remanded to the court
from whence it came for proper action. So ordered.
EN BANC

[G.R. No. 135385. December 6, 2000]

ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY


Natural Resources || Full Text Cases Prelim Exam || 30

OF ENVIRONMENT AND NATURAL RESOURCES,


SECRETARY OF BUDGET AND MANAGEMENT and
CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI
ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO
WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M.
COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE
SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU
MANTUMUKAW
TEOFISTO
SABASALES,
DATU
EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON
BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D.
SALACAO, TIMUAY EDWIN B. ENDING, DATU
SAHAMPONG MALANAW VI, DATU BEN PENDAO
CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY DAYAMELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T.
PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU
MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES
D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR,
MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE
G. PE, BENITO CARINO, JOSEPH JUDE CARANTES,
LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO,
SATUR S. BUGNAY, CARLING DOMULOT, ANDRES
MENDIOGRIN,
LEOPOLDO
ABUGAN,
VIRGILIO
CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES,
ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO
VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO
B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN,
OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA,
ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A.
LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S.
LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS
S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB,
SALVADOR TIONGSON, VENANCIO APANG, MADION
MALID,
SUKIM
MALID,
NENENG
MALID,
MANGKATADONG AUGUSTO DIANO, JOSEPHINE M.
ALBESO, MORENO MALID, MARIO MANGCAL, FELAY
DIAMILING, SALOME P. SARZA, FELIPE P. BAGON,
SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA
MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P.
GERADA, RENATO T. BAGON, JR., SARING MASALONG,
SOLEDAD M. GERARDA, ELIZABETH L. MENDI,
MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS
MARICEL MALID, represented by her father CORNELIO
MALID, MARCELINO M. LADRA, represented by her father
MONICO D. LADRA, JENNYLYN MALID, represented by
her father TONY MALID, ARIEL M. EVANGELISTA,
represented by her mother LINAY BALBUENA, EDWARD
M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO
BLAAN TRIBAL FARMERS ASSOCIATION, INTERPEOPLES EXCHANGE, INC. and GREEN FORUMWESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION
FOR THE CONSERVATION OF NATURAL RESOURCES,
INC., intervenor.

RESOLUTION
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for
prohibition and mandamus as citizens and taxpayers, assailing the
constitutionality of certain provisions of Republic Act No. 8371 (R.A.
8371), otherwise known as the Indigenous Peoples Rights Act of 1997
(IPRA), and its Implementing Rules and Regulations (Implementing
Rules).
In its resolution of September 29, 1998, the Court required
respondents to comment.[1] In compliance, respondents Chairperson
and Commissioners of the National Commission on Indigenous Peoples
(NCIP), the government agency created under the IPRA to implement its
provisions, filed on October 13, 1998 their Comment to the Petition, in
which they defend the constitutionality of the IPRA and pray that the
petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of
Environment and Natural Resources (DENR) and Secretary of the
Department of Budget and Management (DBM) filed through the
Solicitor General a consolidated Comment. The Solicitor General is of
the view that the IPRA is partly unconstitutional on the ground that it
grants ownership over natural resources to indigenous peoples and
prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen.
Juan Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen, a
member of the 1986 Constitutional Commission, and the leaders and
members of 112 groups of indigenous peoples (Flavier, et. al), filed their
Motion for Leave to Intervene. They join the NCIP in defending the
constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR)
likewise filed a Motion to Intervene and/or to Appear as Amicus Curiae.
The CHR asserts that IPRA is an expression of the principle of parens
patriae and that the State has the responsibility to protect and guarantee
the rights of those who are at a serious disadvantage like indigenous
peoples. For this reason it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan
Indigenous People and the Haribon Foundation for the Conservation of
Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene with
attached Comment-in-Intervention. They agree with the NCIP and
Flavier, et al. that IPRA is consistent with the Constitution and pray that
the petition for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and
organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the
parties and intervenors filed their respective memoranda in which they
reiterate the arguments adduced in their earlier pleadings and during the
hearing.
Petitioners assail the constitutionality of the following provisions of
the IPRA and its Implementing Rules on the ground that they amount to
an unlawful deprivation of the States ownership over lands of the public
domain as well as minerals and other natural resources therein, in
violation of the regalian doctrine embodied in Section 2, Article XII of the
Constitution:
(1) Section 3(a) which defines the extent and coverage of
ancestral domains, and Section 3(b) which, in turn,
Natural Resources || Full Text Cases Prelim Exam || 31

defines ancestral lands;

and that any doubt or ambiguity in the interpretation


thereof shall be resolved in favor of the indigenous
peoples;

(2) Section 5, in relation to section 3(a), which provides that


ancestral domains including inalienable public lands,
bodies of water, mineral and other resources found
within ancestral domains are private but community
property of the indigenous peoples;

(4) Section 65 which states that customary laws and


practices shall be used to resolve disputes involving
indigenous peoples; and

(3) Section 6 in relation to section 3(a) and 3(b) which


defines the composition of ancestral domains and
ancestral lands;

(5) Section 66 which vests on the NCIP the jurisdiction over


all claims and disputes involving rights of the indigenous
peoples.[5]

(4) Section 7 which recognizes and enumerates the rights


of the indigenous peoples over the ancestral domains;

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

(5) Section 8 which recognizes and enumerates the rights of


the indigenous peoples over the ancestral lands;
(6) Section 57 which provides for priority rights of the
indigenous peoples in the harvesting, extraction,
development or exploration of minerals and other
natural resources within the areas claimed to be their
ancestral domains, and the right to enter into
agreements with nonindigenous peoples for the
development and utilization of natural resources therein
for a period not exceeding 25 years, renewable for not
more than 25 years; and
(7) Section 58 which gives the indigenous peoples the
responsibility to maintain, develop, protect and conserve
the ancestral domains and portions thereof which are
found to be necessary for critical watersheds,
mangroves, wildlife sanctuaries, wilderness, protected
areas, forest cover or reforestation.[2]
Petitioners also content that, by providing for an all-encompassing
definition of ancestral domains and ancestral lands which might even
include private lands found within said areas, Sections 3(a) and 3(b)
violate the rights of private landowners.[3]
In addition, petitioners question the provisions of the IPRA
defining the powers and jurisdiction of the NCIP and making customary
law applicable to the settlement of disputes involving ancestral domains
and ancestral lands on the ground that these provisions violate the due
process clause of the Constitution.[4]
These provisions are:
(1) sections 51 to 53 and 59 which detail the process of
delineation and recognition of ancestral domains and
which vest on the NCIP the sole authority to delineate
ancestral domains and ancestral lands;
(2) Section 52[i] which provides that upon certification by
the NCIP that a particular area is an ancestral domain
and upon notification to the following officials, namely,
the Secretary of Environment and Natural Resources,
Secretary of Interior and Local Governments, Secretary
of Justice and Commissioner of the National
Development Corporation, the jurisdiction of said
officials over said area terminates;
(3) Section 63 which provides the customary law, traditions
and practices of indigenous peoples shall be applied
first with respect to property rights, claims of ownership,
hereditary succession and settlement of land disputes,

Petitioners pray for the following:


(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59,
63, 65 and 66 and other related provisions of R.A. 8371
are unconstitutional and invalid;
(2) The issuance of a writ of prohibition directing the
Chairperson and Commissioners of the NCIP to cease
and desist from implementing the assailed provisions of
R.A. 8371 and its Implementing Rules;
(3) The issuance of a writ of prohibition directing the
Secretary of the Department of Environment and Natural
Resources to cease and desist from implementing
Department of Environment and Natural Resources
Circular No. 2, series of 1998;
(4) The issuance of a writ of prohibition directing the
Secretary of Budget and Management to cease and
desist from disbursing public funds for the
implementation of the assailed provisions of R.A. 8371;
and
(5) The issuance of a writ of mandamus commanding the
Secretary of Environment and Natural Resources to
comply with his duty of carrying out the States
constitutional mandate to control and supervise the
exploration, development, utilization and conservation of
Philippine natural resources.[7]
After due deliberation on the petition, the members of the Court
voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an
opinion, which the Chief Justice and Justices Bellosillo, Quisumbing,
and Santiago join, sustaining the validity of the challenged provisions of
R.A. 8371. Justice Puno also filed a separate opinion sustaining all
challenged provisions of the law with the exception of Section 1, Part II,
Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules
and Regulations Implementing the IPRA, and Section 57 of the IPRA
which he contends should be interpreted as dealing with the large-scale
exploitation of natural resources and should be read in conjunction with
Section 2, Article XII of the 1987 Constitution. On the other hand,
Justice Mendoza voted to dismiss the petition solely on the ground that
it does not raise a justiciable controversy and petitioners do not have
standing to question the constitutionality of R.A. 8371.
Natural Resources || Full Text Cases Prelim Exam || 32

Seven (7) other members of the Court voted to grant the petition.
Justice Panganiban filed a separate opinion expressing the view that
Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371
are unconstitutional. He reserves judgment on the constitutionality of
Sections 58, 59, 65, and 66 of the law, which he believes must await the
filing of specific cases by those whose rights may have been violated by
the IPRA. Justice Vitug also filed a separate opinion expressing the
view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the
separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary
majority was not obtained, the case was redeliberated upon. However,
after redeliberation, the voting remained the same. Accordingly,
pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the
petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate
opinions of Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban.
SO ORDERED.
G.R. No. L-630 November 15, 1947
ALEXANDER A. KRIVENKO vs. REGISTER OF DEEDS
079 Phil 461

SECOND DIVISION
[G.R. No. L-630. November 15, 1947.]

ALEXANDER A. KRIVENKO, petitioner-appellant, vs. THE REGISTER


OF DEEDS, CITY OF MANILA, respondent-appellee.

Gibbs, Gibbs, Chuidian & Quasha for petitioner-appellant.


First Assistant Solicitor General Reyes and Solicitor Carreon for
respondent-appellee.
Marcelino Lontok appeared as amicus curi.

SYLLABUS
1.
CONSTITUTIONAL LAW; JUDICIAL POLICY;
CONSTITUTIONAL QUESTION SHOULD BE AVOIDED IF POSSIBLE.
The rule that a court should not pass upon a constitutional question if
its decision may be made to rest upon other grounds, does not mean
that to avoid a constitutional question, the court may decline to decide
the case upon the merits. In the instant case, the only issue is a
constitutional question which is unavoidable if the case is to be decided
upon the merits. And the court cannot avoid rendering its decision
simply because it has to avoid the constitutional question. It cannot, for
instance, grant appellant's motion withdrawing his appeal only because
the constitutional issue should be avoided. Whether that motion should
be, or should not be, granted, is a question involving different
considerations.

2.
ID.; APPEAL; WITHDRAWAL OF APPEAL DISCRETIONARY
UPON THE COURT AFTER BRIEFS ARE PRESENTED. Withdrawal
of appeal after briefs are presented, may or may not be granted in the
discretion of the court, according to the rules. In the instant case,
withdrawal was denied because under the circumstances, particularly
the circular of the Department of Justice issued while this case was
pending before this Court and ordering all registers of deeds to accept
for registration all transfers of residential lots to aliens, together with the
circumstance that probably a similar question may never come up again
before this Court, the effect of the withdrawal would be offensive to the
opinion reached by a majority of the members of the Court after long
and exhaustive deliberations on the constitutional question. To allow the
withdrawal under such circumstances is equivalent to tolerating an
offense to the constitution, offense which may be permanent.
3.
CLASSIFICATION OF LANDS OF THE PUBLIC DOMAIN
UNDER THE CONSTITUTION. When section 1, Article XIII, of the
Constitution, with reference to lands of the public domain, makes
mention of only agricultural, timber and mineral lands, it undoubtedly
means that all lands of the public domain are classified into said three
groups, namely, agricultural, timber and mineral. And this classification
finds corroboration in the circumstance that at the time of the adoption
of the Constitution, that was the basic classification existing in the public
laws and judicial decision in the Philippines, and the term "public
agricultural lands" under said classification has always been construed
as referring to those lands that were neither timber nor mineral, and as
including residential lands. It may safely be presumed, therefore, that
what the members of the Constitutional Convention had in mind when
they drafted the Constitution was this well-known classification and its
technical meaning then prevailing.
There seems to be no question among members of this Court that the
phrase "public agricultural lands" appearing in section 1 of Article XIII of
the Constitution includes residential lands. And this is in conformity with
a legislative interpretation given after the adoption of the Constitution.
Well known is the rule that "where the Legislature has revised a statute
after a Constitution has been adopted, such a revision is to be regarded
as a legislative construction that the statute so revised conforms to the
Constitution." Soon after the Constitution was adopted, the National
Assembly revised the Public Land Law and passed Commonwealth Act
No. 141, and sections 58, 59 and 60 thereof permit the sale of
residential lots to Filipino citizens or to associations or corporations
controlled by such citizens, which is equivalent to a solemn declaration
that residential lots are considered as agricultural lands, for, under the
Constitution, only agricultural lands may be alienated.
Furthermore, prior to the Constitution, under section 24 of Public Land
Act No. 2874, aliens could acquire public agricultural lands used for
industrial or residential purposes, but after the Constitution and under
section 23 of Commonwealth Act No. 141, the right of aliens to acquire
such kind of lands is completely stricken out, undoubtedly in pursuance
of the constitutional limitation. And, again, prior to the Constitution,
under section 57 of Public Land Act No. 2874, land of the public domain
suitable for residence or industrial purposes could be sold or leased to
aliens, but after the Constitution and under section 60 of Commonwealth
Act No. 141, such land may only be leased, but not sold, to aliens, and
the lease granted shall only be valid while the land is used for the
purposes referred to. The exclusion of sale in the new Act is
undoubtedly in pursuance of the constitutional limitation, and this again
is another legislative construction that the term "public agricultural land"
includes land for residence purposes.
Natural Resources || Full Text Cases Prelim Exam || 33

The legislative interpretation is also in harmony with the interpretation


given by the Executive Department of the Government. Way back in
1939, Secretary of Justice Jose Abad Santos rendered an opinion
holding that under the Constitution, the phrase "public agricultural lands"
includes residential lands.
4.
PRIVATE AGRICULTURAL LANDS UNDER THE
CONSTITUTION. Under section 2 of Article XIII of the Constitution,
"natural resources, with the exception of public agricultural land, shall
not be alienated," and with respect to public agricultural lands, their
alienation is limited to Filipino citizens. But this constitutional purpose of
conserving agricultural resources in the hands of Filipino citizens may
easily be defeated by the Filipino citizens themselves who may transfer
their agricultural lands in favor of aliens. It is partly to prevent this result
that section 5 is included in Article XIII, which reads: "Save in cases of
hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain the Philippines." This
constitutional provision closes the only remaining avenue through which
agricultural resources may leak into aliens' hands. It would certainly be
futile to prohibit the alienation of public agricultural lands to aliens if,
after all, they may be freely so alienated upon their becoming private
agricultural lands in the hands of Filipino citizens. Undoubtedly, as
above indicated, section 5 is intended to insure the policy of
nationalization contained in section 1. both sections must, therefore, be
read together for they have the same purpose and the same subject
matter. It must be noticed that the persons against whom the prohibition
is directed in section 5 are the very same persons who under section 1
are disqualified to acquire or hold lands of the public domain in the
Philippines. And the subject matter of both sections is the same, namely,
the non-transferability of agricultural land to aliens. Since "agricultural
land" under section 1 includes residential lots, the same technical
meaning should be attached to "agricultural land" under section 5. It is a
rule of statutory construction that a word or phrase repeated in a statute
will bear the same meaning throughout the statute, unless a different
intention appears. The only difference between "agricultural land" under
section 1 and "agricultural land" under section 5, is that the former is
public and the latter, private. But such difference refers to ownership
and not to the class of land. The lands are the same in both sections,
and, for the conservation of the national patrimony, what is important is
the nature or class of the property regardless of whether it is owned by
the State or by its citizens.
If, as conceded by all the members of this Court, residential lands of the
public domain should be considered as agricultural lands to be
protected as part of the national patrimony, there can be no reason why
residential lands of private ownership should not deserve the same
consideration and protection. There is absolutely no difference in nature,
character, value or importance to the nation between a residential land
of the public domain and a residential land of private ownership, and,
therefore, both should equally be considered as agricultural lands to be
protected as part of the national patrimony. Specially is this so where, as
indicated above, the prohibition as to the alienation of public residential
lots may become superfluous if the same prohibition is not equally
applied to private residential lots. Indeed, the prohibition as to private
residential lands will eventually become more important, for time will
come when, in view of the constant disposition of public lands in favor
private individuals, almost all, if not all, the residential lands of the public
domain shall have become private residential lands.
The constitutional intent is made more patent and is strongly
implemented by an Act of the National Assembly passed soon after the

Constitution was approved. We are referring again to Commonwealth


Act No. 141. Prior to the Constitution, there were in the Public Land Act
No. 2874 provisions contained in section 120 and 121 thereof which
granted to aliens the right to acquire private agricultural lands only by
way of reciprocity. Then came the Constitution, and Commonwealth Act
No. 141 was passed containing sections 122 and 123 which strike out
completely the right of reciprocity granted to aliens. This, undoubtedly, is
to conform to the absolute policy contained in section 5 of Article XIII of
the Constitution, which, in prohibiting the alienation of private
agricultural lands to aliens, grants them no right of reciprocity.
5.
EFFECT UPON THE SPIRIT OF THE CONSTITUTION OF
NOT CONSIDERING RESIDENTIAL LANDS AS AGRICULTURAL
LANDS. If the term "private agricultural lands" is to be construed as
not including residential lots or lands not strictly agricultural, the result
would be that aliens may freely acquire and possess not only residential
lots and houses for themselves but entire subdivisions, and whole towns
and cities, and that they may validly buy and hold in their names lands
of any area for building homes, factories, industrial plants, fisheries,
hatcheries, schools, health and vacation resorts, markets, golf courses,
playgrounds, airfields, and a host of other uses and purposes that are
not, in appellant's words, strictly agricultural. That this is obnoxious to
the conservative spirit of the Constitution is beyond question.

DECISION

MORAN, C.J p:
Alexander A. Krivenko, alien, bought a residential lot from the
Magdalena Estate, Inc., in December of 1941, the registration of which
was interrupted by the war. In May, 1945, he sought to accomplish said
registration but was denied by the register of deeds of Manila on the
ground that, being an alien, he cannot acquire land in this jurisdiction.
Krivenko then brought the case to the fourth branch of the Court of First
Instance of Manila by means of a consulta, and that court rendered
judgment sustaining the refusal of the register of deeds, from which
Krivenko appealed to this Court.
There is no dispute as to these facts. The real point in issue is whether
or not an alien under our Constitution may acquire residential land.
It is said that the decision of the case on the merits is unnecessary,
there being a motion to withdraw the appeal which should have been
granted outright, and reference is made to the ruling laid down by this
Court in another case to the effect that a court should not pass upon a
constitutional question if its judgment may be made to rest upon other
grounds. There is, we believe, a confusion of ideas in this reasoning. It
cannot be denied that the constitutional question is unavoidable if we
choose to decide this case upon the merits. Our judgment cannot to be
made to rest upon other grounds if we have to render any judgment at
all. And we cannot avoid our judgment simply because we have to avoid
a constitutional question. We cannot, for instance, grant the motion
withdrawing the appeal only because we wish to evade the
constitutional issue. Whether the motion should be, or should not be,
granted, is a question involving different considerations not to be stated.
According to Rule 52, section 4, of the Rules of Court, it is discretionary
upon this Court to grant a withdrawal of appeal after the briefs have
been presented. At the time the motion for withdrawal was filed in this
Natural Resources || Full Text Cases Prelim Exam || 34

case, not only had the briefs been presented, but the case had already
been voted and the majority decision was being prepared. The motion
for withdrawal stated no reason whatsoever, and the Solicitor General
was agreeable to it. While the motion was pending in this Court, came
the new circular of the Department of Justice, instructing all register of
deeds to accept for registration all transfers of residential lots to aliens.
The herein respondent-appellee was naturally one of the registers of
deeds to obey the new circular, as against his own stand in this case
which had been maintained by the trial court and firmly defended in this
Court by the Solicitor General. If we grant the withdrawal, the result
would be that petitioner-appellant Alexander A. Krivenko wins his case,
not by a decision of this Court, but by the decision or circular of the
Department of Justice, issued while this case was pending before this
Court. Whether or not this is the reason why appellant seeks the
withdrawal of his appeal and why the Solicitor General readily agrees to
that withdrawal, is now immaterial. What is material and indeed very
important, is whether or not we should allow interference with the
regular and complete exercise by this Court of its constitutional
functions, and whether or not after having held long deliberations and
after having reached a clear and positive conviction as to what the
constitutional mandate is, we may still allow our conviction to be
silenced, and the constitutional mandate to be ignored or misconceived,
with all the harmful consequences that might be brought upon the
national patrimony. For it is but natural that the new circular be taken full
advantage of by many, with the circumstance that perhaps the
constitutional question may never come up again before this court,
because both vendors and the vendees will have no interest but to
uphold the validity of their transactions, and very unlikely will the register
of deeds venture to disobey the orders of their superior. Thus, the
possibility for this court to voice its conviction in a future case may be
remote, with the result that our indifference of today might signify a
permanent offense to the Constitution.
All these circumstances were thoroughly considered and weighed by
this Court for a number of days and the legal result of the last vote was
a denial of the motion withdrawing the appeal. We are thus confronted,
at this state of the proceedings, with our duty to decide the case upon
the merits, and by so doing, the constitutional question becomes
unavoidable. We shall then proceed to decide that question.
Article XIII, section 1, of the Constitution is as follows:
"Article XIII. Conservation and utilization of natural resources.
"SECTION 1.
All agricultural, timber, and mineral lands of the
public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, and other natural resources of the
Philippine belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines,
or to corporations or associations at least sixty per centum of the capital
of which is owned by such citizens, subject to any existing right, grant,
lease, or concession at the time of the inauguration of the Government
established under this Constitution. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water 'power' in which
cases beneficial use may be the measure and the limit of the grant."

The scope of this constitutional provision, according to its heading and


its language, embraces all lands of any kind of the public domain, its
purpose being to establish a permanent and fundamental policy for the
conservation and utilization of all natural resources of the Nation. When,
therefore, this provision, with reference to lands of the public domain are
classified into said three groups, namely, agricultural, timber and
mineral. And this classification finds corroboration in the circumstance
that at the time of the adoption of the Constitution, that was the basic
classification existing in the public laws and judicial decisions in the
Philippines, and the term "public agricultural lands" under said
classification had then acquired a technical meaning that was wellknown to the members of the Constitutional Convention who were
mostly members of the legal profession.
As early as 1908, in the case of Mapa vs. Insular Government (10 Phil.,
175, 182), this Court said that the phrase "agricultural public lands" as
defined in the Act of Congress of July 1, 1902, which phrase is also to
be found in several sections of the Public Land Act (No. 926), means
"those public lands acquired from Spain which are neither mineral nor
timber lands." This definition has been followed in a long line of
decisions of this Court. (See Montano vs. Insular Government, 12 Phil.,
572; Santiago vs. Insular Government, 12 Phil., 593; Ibaez de Aldecoa
vs. Insular Government, 13 Phil., 159; Ramos vs. Director of Lands, 39
Phil., 175; Jocson vs. Government of the Philippines, 40 Phil., 10.) And
with respect to residential lands, it has been held that since they are
neither mineral nor timber lands, of necessity they must be classified as
agricultural. In Ibaez de Aldecoa vs. Insular Government (13 Phil., 159,
163), this Court said:
"Hence, any parcel of land or building lot is susceptible of cultivation,
and may be converted into a field, and planted with all kinds of
vegetation; for this reason, where land is not mining or forestall in its
nature, it must necessarily be included within the classification of
agricultural land, not because it is actually used for the purposes of
agriculture, but because it was originally agricultural and may again
become so under other circumstances; besides, the Act of Congress
contains only three classifications, and makes no special provision with
respect to building lots or urban lands that have ceased to be
agricultural land."
In other words, the Court ruled that in determining whether a parcel of
land is agricultural, the test is not only whether it is actually agricultural,
but also its susceptibility to cultivation for agricultural purposes. But
whatever the test might be, the fact remains that at the time the
Constitution was adopted, lands of the public domain were classified in
our laws and jurisprudence into agricultural, mineral, and timber, and
that the term "public agricultural lands" was construed as referring to
those lands that were not timber or mineral, and as including residential
lands. It may safely be presumed, therefore, that what the members of
the Constitutional Convention had in mind when they drafted the
Constitution was this well-known classification and its technical meaning
then prevailing.
"Certain expressions which appear in Constitutions, . . . are obviously
technical; and where such words have been in use prior to the adoption
of a Constitution, it is presumed that its framers and the people who
ratified it have used such expressions in accordance with their technical
meaning." (11 Am. Jur., sec. 66, p. 683.) Also Calder vs. Bull, 3 Dall. [U.
S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264; 152 P.,
1039.)

Natural Resources || Full Text Cases Prelim Exam || 35

"It is a fundamental rule that, in construing constitutions, terms


employed therein shall be given the meaning which had been put upon
them, and which they possessed, at the time of the framing and
adoption of the instrument. If a word has acquired a fixed, technical
meaning in legal and constitutional history, it will be presumed to have
been employed in that sense in a written Constitution." (McKinney vs.
Barker, 180 Ky., 526; 203 S. W., 303; L. R. A., 1918E, 581.)
"Where words have been long used in a technical sense and have been
judicially construed to have a certain meaning, and have been adopted
by the legislature as having a certain meaning prior to a particular
statute in which they are used, the rule of construction requires that the
words used in such statute should be construed according to the sense
in which they have been so previously used, although the sense may
vary from the strict literal meaning of the words." (II Sutherland,
Statutory Construction, p. 758.)
Therefore, the phrase "public agricultural lands" appearing in section 1
of Article XIII of the Constitution must be construed as including
residential lands, and this is in conformity with a legislative interpretation
given after the adoption of the Constitution. Well known is the rule that
"where the Legislature has revised a statute after a Constitution has
been adopted, such a revision is to be regarded as a legislative
construction that the statute so revised conforms to the Constitution."
(59 C. J., 1102.) Soon after the Constitution was adopted, the National
Assembly revised the Public Land Law and passed Commonwealth Act
No. 141, and sections 58, 59 and 60 thereof permit the sale of
residential lots to Filipino citizens or to associations or corporations
controlled by such citizens, which is equivalent to a solemn declaration
that residential lots are considered as agricultural lands, for, under the
Constitution, only agricultural lands may be alienated.
It is true that in section 9 of said Commonwealth Act No. 141, "alienable
or disposable public lands" which are the same "public agricultural
lands" under the Constitution, are classified into agricultural, residential,
commercial, industrial and for other purposes. This simply means that
the term "public agricultural lands" has both a broad and a particular
meaning. Under its broad or general meaning, as used in the
Constitution, it embraces all lands that are neither timber nor mineral.
This broad meaning is particularized in section 9 of Commonwealth Act
No. 141 which classifies "public agricultural lands" for purposes of
alienation or disposition, into lands that are strictly agricultural or
actually devoted to cultivation for agricultural purposes; lands that are
residential; commercial; industrial; or lands for other purposes. The fact
that these lands are made alienable or disposable under
Commonwealth Act No. 141, in favor of Filipino citizens, is a conclusive
indication of their character as public agricultural lands under said
statute and under the Constitution.
It must be observed, in this connection, that prior to the Constitution,
under section 24 of Public Land Act No. 2874, aliens could acquire
public agricultural lands used for industrial or residential purposes, but
after the Constitution and under section 23 of Commonwealth Act No.
141, the right of aliens to acquire such kind of lands is completely
stricken out, undoubtedly in pursuance of the constitutional limitation.
And, again, prior to the Constitution, under section 57 of Public Land Act
No. 2874, land of the public domain suitable for residence or industrial
purposes could be sold or leased to aliens, but after the Constitution
and under section 60 of Commonwealth Act No. 141, such land may
only be leased, but not sold, to aliens, and the lease granted shall only
be valid while the land is used for the purposes referred to. The
exclusion of sale in the new Act is undoubtedly in pursuance of the

constitutional limitation, and this again is another legislative construction


that the term "public agricultural land" includes land for residence
purposes.
Such legislative interpretation is also in harmony with the interpretation
given by the Executive Department of the Government. Way back in
1939, Secretary of Justice Jose Abad Santos, in answer to a query as to
"whether or not the phrase 'public agricultural lands' in section 1 of
Article XII (now XIII) of the Constitution may be interpreted to include
residential, commercial, and industrial lands for purposes of their
disposition," rendered the following short, sharp and crystal-clear
opinion:
"Section 1, Article XII (now XIII) of the Constitution classifies lands of the
public domain in the Philippines into agricultural, timber and mineral.
This is the basic classification adopted since the enactment of the Act of
Congress of July 1, 1902, known as the Philippine Bill. At the time of the
adoption of the Constitution of the Philippines, the term 'agricultural
public lands' and, therefore, acquired a technical meaning in our public
laws. The Supreme Court of the Philippines in the leading case of Mapa
vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural
public lands' means those public lands acquired from Spain which are
neither timber nor mineral lands. This definition has been followed by
our Supreme Court in many subsequent cases. . . ."
"Residential, commercial, or industrial lots forming part of the public
domain must have to be included in one or more of these classes.
Clearly, they are neither timber nor mineral, of necessity, therefore, they
must be classified as agricultural.
"Viewed from another angle, it has been held that in determining
whether lands are agricultural or not, the character of the land is the test
(Odell vs. Durant, 62 N. W., 524; Lorch vs. Missoula Brick & Tile Co.,
123 p. 25). In other words, it is the susceptibility of the land to cultivation
for agricultural purposes by ordinary farming methods which determines
whether it is agricultural or not (State vs. Stewart, 190 p. 129).
"Furthermore, as said by the Director of Lands, no reason is seen why a
piece of land, which may be sold to a person if he is to devote it to
agricultural, cannot be sold to him if he intends to use it as a site for his
home."
This opinion is important not alone because it comes from a Secretary
of Justice who later became the Chief Justice of this Court, but also
because it was rendered by a member of the cabinet of the late
President Quezon who actively participated in the drafting of the
constitutional provision under consideration. (2 Aruego, Framing of the
Philippine Constitution, p. 598.) And the opinion of the Quezon
administration was reiterated by the Secretary of Justice under the
Osmea administration, and it was firmly maintained in this Court by the
Solicitor General of both administrations.
It is thus clear that the three great departments of the Government
judicial, legislative and executive have always maintained that lands
of the public domain are classified into agricultural, mineral and timber,
and that agricultural lands include residential lots.
Under section 1 of Article XIII of the Constitution, "natural resources,
with the exception of public agricultural land, shall not be alienated," and
with respect to public agricultural lands, their alienation is limited to
Filipino citizens. But this constitutional purpose conserving agricultural
resources in the hands of Filipino citizens may easily be defeated by the
Natural Resources || Full Text Cases Prelim Exam || 36

Filipino citizens themselves who may alienate their agricultural lands in


favor of aliens. It is partly to prevent this result that section 5 is included
in Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural
land will be transferred or assigned except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain in
the Philippines."
This constitutional provision closes the only remaining avenue through
which agricultural resources may leak into aliens' hands. It would
certainly be futile to prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated upon their becoming
private agricultural lands in the hands of Filipino citizens. Undoubtedly,
as above indicated, section 5 is intended to insure the policy of
nationalization contained in section 1. Both sections must, therefore, be
read together for they have the same purpose and the same subject
matter. It must be noticed that the persons against whom the prohibition
is directed in section 5 are the very same persons who under section 1
are disqualified "to acquire or hold lands of the public domain in the
Philippines." And the subject matter of both sections is the same,
namely, the non transferability of "agricultural land" to aliens. Since
"agricultural land" under section 1 includes residential lots, the same
technical meaning should be attached to "agricultural land" under
section 5. It is a rule of statutory construction that "a word or phrase
repeated in a statute will bear the same meaning throughout the statute,
unless a different intention appears." (II Sutherland, Statutory
Construction, p. 758.) The only difference between "agricultural land"
under section 1, and "agricultural land" under section 5, is that the
former is public and the latter private. But such difference refers to
ownership and not to the class of land. The lands are the same in both
sections, and, for the conservation of the national patrimony, what is
important is the nature or class of the property regardless of whether it
is owned by the State or by its citizens.
Reference is made to an opinion rendered on September 19, 1941, by
the Hon. Teofilo Sison, then Secretary of Justice, to the effect that
residential lands of the public domain may be considered as agricultural
lands, whereas residential lands of private ownership cannot be so
considered. No reason whatsoever is given in the opinion for such a
distinction, and no valid reason can be adduced for such a
discriminatory view, particularly having in mind that the purpose of the
constitutional provision is the conservation of the national patrimony,
and private residential lands are as much an integral part of the national
patrimony as the residential lands of the public domain. Specially is this
so where, as indicated above, the prohibition as to the alienable of pubic
residential lots would become superfluous if the same prohibition is not
equally applied to private residential lots. Indeed, the prohibition as to
private residential lands will eventually become more important, for time
will come when, in view of the constant disposition of public lands in
favor of private individuals, almost all, if not all, the residential lands of
the public domain shall have become private residential lands.
It is maintained that in the first draft of section 5, the words "no land of
private ownership" were used and later changed into "no agricultural
land of private ownership," and lastly into "no private agricultural land"
and from these changes it is argued that the word "agricultural"
introduced in the second and final drafts was intended to limit the
meaning of the word "land" to land actually used for agricultural
purposes. The implication is not accurate. The wording o the first draft
was amended for no other purpose than to clarify concepts and avoid
uncertainties. The words "no land" of the first draft, unqualified by the

word "agricultural," may be mistaken to include timber and mineral


lands, and since under section 1, this kind of lands can never be private,
the prohibition to transfer the same would be superfluous. Upon the
other hand, section 5 had to be drafted in harmony with section 1 to
which it is supplementary, as above indicated. Inasmuch as under
section 1, timber and mineral lands can never be private, and the only
lands that may become private are agricultural lands, the words "no land
of private ownership" of the first draft can have no other meaning than
"private agricultural land." And thus the change in the final draft is
merely one of words in order to make its subject matter more specific
with a view to avoiding the possible confusion of ideas that could have
arisen from the first draft.
If the term "private agricultural lands" is to be construed as not including
residential lots or lands not strictly agricultural, the result would be that
"aliens may freely acquire and possess not only residential lots and
houses for themselves but entire subdivisions, and whole towns and
cities," and that "they may validly buy and hold in their names lands of
any area for building homes, factories, industrial plants, fisheries,
hatcheries, schools, health and vacation resorts, markets, golf courses,
playgrounds, airfields, and a host of other uses and purposes that are
not, in appellant's words, strictly agricultural." (Solicitor General's Brief,
p. 6.) That this is obnoxious to the conservative spirit of the Constitution
is beyond question.
One of the fundamental principles underlying the provision of Article XIII
of the Constitution and which was embodied in the report of the
Committee on Nationalization and Preservation of Lands and other
Natural Resources of the Constitutional Convention, is "that lands,
minerals, forests, and other natural resources constitute the exclusive
heritage of the Filipino nation. They should, therefore, be preserved for
those under the sovereign authority of that nation and for their posterity."
(2 Aruego, Framing of the Filipino Constitution, p. 595.) Delegate
Ledesma, Chairman of the Committee on Agricultural Development of
the Constitutional Convention, in a speech delivered in connection with
the national policy on agricultural lands, said: "The exclusion of aliens
from the privilege of acquiring public agricultural lands and of owning
real estate is a necessary part of the Public Land Laws of the
Philippines for the Filipinos." (Italics ours.) And, of the same tenor was
the speech of Delegate Montilla who said: "With the complete
nationalization of our lands and natural resources it is to be understood
that our God-given birthright should be one hundred per cent in Filipino
hands . . . Lands and natural resources are immovables and as such
can be compared to the vital organs of a person's body, the lack of
possession of which may cause instant death or the shortening of life. . .
. If we do not completely nationalize these two of our most important
belongings, I am afraid that the time will come when we shall be sorry
for the time we were born. Our independence will be just a mockery, for
what kind of independence are we going to have if a part of our country
is not in our hands but in those of foreigners?" (Italics ours.) Professor
Aruego says that since the opening days of the Constitutional
Convention one of its fixed and dominating objectives was the
conservation and nationalization of the natural resources of the country.
(2 Aruego, Framing of the Philippine Constitution, p. 592.) This is ratified
by the members of the Constitutional Convention who are now members
of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr.
Justice Hontiveros. And, indeed, if under Article XIV, section 8, of the
Constitution, an alien may not even operate a small jitney for hire, it is
certainly not hard to understand that neither is he allowed to own a
piece of land.

Natural Resources || Full Text Cases Prelim Exam || 37

This constitutional intent is made more patent and is strongly


implemented by an act of the National Assembly passed soon after the
Constitution was approved. We are referring again to Commonwealth
Act No. 141. Prior to the Constitution, there were in the Public Land Act
No. 2874 sections 120 and 121 which granted aliens the right to acquire
private lands only by way of reciprocity. Said section reads as follows:
"SEC. 120.
No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,
corporations, associations, or partnerships who may acquire lands of
the public domain under this Act; to corporations organized in the
Philippine Islands authorized therefor by their charters, and, upon
express authorization by the Philippine Legislature, to citizens of
countries the laws of which grant to citizens of the Philippine Islands the
same right to acquire, hold, lease, encumber, dispose of, or alienate
land, or permanent improvements thereon, or any interest therein, as to
their own citizens, only in the manner and to the extent specified in such
laws, and while the same are in force, but not thereafter.
"SEC. 121.
No land originally acquired in any manner under the
provisions of the former Public Land Act or of any other Act, ordinance,
royal order, royal decree, or any other provision of law formerly in force
in the Philippine Islands with regard to public lands, terrenos baldios y
realengos, or lands of any other denomination that were actually or
presumptively of the public domain, or by royal grant or in any other
form, nor any permanent improvement on such land, shall be
encumbered, alienated, or conveyed, except to persons, corporations,
or associations who may acquire land of the public domain under this
Act; to corporate bodies organized in the Philippine Islands whose
charters may authorize them to do so, and, upon express authorization
by the Philippine Legislature, to citizens of the countries the laws of
which grant to citizens of the Philippine Islands the same right to
acquire, hold, lease, encumber, dispose of, or alienate land or
permanent improvements thereon or any interest therein, as to their own
citizens, and only in the manner and to the extent specified in such laws,
and while the same are in force, but not thereafter: Provided, however,
That this prohibition shall not be applicable to the conveyance or
acquisition by reason of hereditary succession duly acknowledged and
legalized by competent courts, nor to lands and improvements acquired
or held for industrial or residence purposes, while used for such
purposes: Provided, further, That in the event of the ownership of the
lands and improvements mentioned in this section and in the last
preceding section being transferred by judicial decree to persons,
corporations or associations not legally capacitated to acquire the same
under the provisions of this Act, such persons, corporations, or
associations shall be obliged to alienate said lands or improvements to
others so capacitated within the precise period of five years, under the
penalty of such property reverting to the Government in the contrary
case." (Public Land Act, No, 2874.)
It is to be observed that the phase "no land" used in these section refers
to all private lands, whether strictly agricultural, residential or otherwise,
there being practically no private land which had not been acquired by
any of the means provided in said two sections. Therefore, the
prohibition contained in these two provisions was, in effect, that no
private land could be transferred to aliens except "upon express
authorization by the Philippine Legislature, to citizens of the Philippine
Islands the same right to acquire, hold, lease, encumber, dispose of, or
alienate land." In other words, aliens were granted the right to acquire
private land merely by way of reciprocity. Then came the Constitution

and Commonwealth Act No. 141 was passed, section 122 and 123 of
which read as follows:
"SEC. 122.
No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,
corporations, associations, or partnerships who may acquire lands of
the public domain under this Act or to corporations organized in the
Philippines authorized therefor by their charters.
"SEC. 123.
No land originally acquired in any manner under the
provisions of any previous Act, ordinance, royal order, royal decree, or
any other provision of law formerly in force in the Philippines with regard
to public lands, terrenos baldios y realengos, or lands of any other
denomination that were actually or presumptively of the public domain,
or by royal grant or in any other form, nor any permanent improvement
on such land, shall be encumbered, alienated, or conveyed, except to
persons, corporations or associations who may acquire land of the
public domain under this Act or to corporate bodies organized in the
Philippines whose charters authorize them to do so: Provided, however,
That this prohibition shall not be applicable to the conveyance or
acquisition by reason of hereditary succession duly acknowledged and
legalized by competent courts: Provided, further, That in the event of the
ownership of the lands and improvements mentioned in this section and
in the last preceding section being transferred by judicial decree to
persons, corporations or associations not legally capacitated to acquire
the same under the provisions of this Act, such persons, corporations, or
associations shall be obliged to alienate said lands or improvements to
others so capacitated within the precise period of five years; otherwise,
such property shall revert to the Government."
These two sections are almost literally the same as sections 120 and
121 of Act No. 2874, the only difference being that in the new
provisions, the right to reciprocity granted to aliens is completely
stricken out. This, undoubtedly, is to conform to the absolute policy
contained in section 5 of Article XIII of the Constitution which, in
prohibiting the alienation of private agricultural lands to aliens, grants
them no right of reciprocity. This legislative construction carries
exceptional weight, for prominent members of the National Assembly
who approved the new Act had been members of the Constitutional
Convention.
It is said that the lot in question does not come within the purview of
sections 122 and 123 of Commonwealth Act No. 141, there being no
proof that the same had been acquired by one of the means provided in
said provisions. We are not, however, deciding the instant case under
the provisions of the Public Land Act, which have to refer to lands that
had been formerly of the public domain, otherwise their constitutionality
may be doubtful. We are deciding the instant case under section 5 of
Article XIII of the Constitution which is more comprehensive and more
absolute in the sense that it prohibits the transfer to aliens of any private
agricultural land including residential land whatever its origin might have
been.
And, finally, on June 14, 1947, the Congress approved Republic Act No.
133 which allows mortgage of "private real property" of any kind in favor
of aliens but with a qualification consisting of expressly prohibiting aliens
to bid or take part in any sale of such real property as a consequence of
the mortgage. This prohibition makes no distinction between private
lands that are strictly agricultural and private lands that are residential or
commercial. The prohibition embraces the sale of private lands of any
kind in favor of aliens, which is again a clear implementation and a
Natural Resources || Full Text Cases Prelim Exam || 38

legislative interpretation of the constitutional prohibition. Had the


Congress been of opinion that private residential lands may be sold to
aliens under the Constitution, no legislative measure would have been
found necessary to authorize mortgage which would have been deemed
also permissible under the Constitution. But clearly it was the opinion of
the Congress that such sale is forbidden by the Constitution and it was
such opinion that prompted the legislative measure intended to clarify
that mortgage is not within the constitutional prohibition.
It is well to note at this juncture that in the present case we have no
choice. We are construing the Constitution as it is and not as we may
desire it to be. Perhaps the effect of our construction is to preclude
aliens, admitted freely into the Philippines from owning sites where they
may build their homes. But if this is the solemn mandate of the
Constitution, we will not attempt to compromise it even in the name of
amity or equity. We are satisfied, however, that aliens are not completely
excluded by the Constitution from the use of lands for residential
purposes. Since their residence in the Philippines is temporary, they
may be granted temporary rights such as a lease contract which is not
forbidden by the Constitution. Should they desire to remain here forever
and share our fortunes and misfortunes, Filipino citizenship is not
impossible to acquire.
For all the foregoing, we hold that under the Constitution aliens may not
acquire private or public agricultural lands, including residential lands,
and, accordingly, judgment is affirmed, without costs.
G.R. No. 108998 August 24, 1994
REPUBLIC OF THE PHIL. vs. COURT OF APPEALS, ET AL.

EN BANC
[G.R. No. 108998. August 24, 1994.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE COURT OF


APPEALS AND SPOUSES MARIO B. LAPIA AND FLOR DE VEGA,
respondents.

SYLLABUS
1.
CIVIL LAW; LAND TITLES AND DEEDS; PUBLIC LAND ACT;
CONFIRMATION OF IMPERFECT TITLE; REQUIREMENTS;
POSSESSION IS TACKED TO THAT OF APPLICANTS
PREDECESSOR-IN-INTEREST; CASE AT BAR. It must be noted
that with respect to possession and occupation of the alienable and
disposable lands of the public domain, the law employs the terms "by
themselves," "the applicant himself or through his predecessor-ininterest." Thus, it matters not whether the vendee/applicant has been in
possession of the subject property for only a day so long as the period
and/or legal requirements for confirmation of title has been complied
with by his predecessor-in-interest, the said period is tacked to his
possession. In the case at bar, respondents' predecessors-in-interest
have been in open, continuous, exclusive and notorious possession of
the disputed land not only since June 12, 1945, but even as early as
1937. Petitioner does not deny this except that respondent spouses, in
its perception, were in possession of the land sought to be registered

only in 1978 and therefore short of the required length of time. As


aforesaid, the disputed parcels of land were acquired by private
respondents through their predecessors-in-interest, who, in turn, have
been in open and continued possession thereof since 1937. Private
respondents stepped into the shoes of their predecessors-in-interest
and by virtue thereof, acquired all the legal rights necessary to confirm
what could otherwise be deemed as an imperfect title. As could be
gleaned from the evidence adduced, private respondents were able to
establish the nature of possession of their predecessors-in-interest.
Evidence was offered to prove that their predecessors-in-interest had
paid taxes on the subject land and introduced improvements thereon
(Exhibits "F" to "F9"). A certified true copy of the affidavit executed by
Cristeta Dazo and her sister Simplicia was also formally offered to prove
that the subject parcels of land were inherited by vendor Cristeta Dazo
from her father Pedro Dazo with the conformity of her only sister
Simplicia (Exhibit "G"). Likewise, a report from the Bureau of Lands was
presented in evidence together with a letter from the Bureau of Forest
Development, to prove that the questioned lots were part of the
alienable and disposable zone of the government and that no forestry
interest was affected (CA G.R. No. 28953, Records, p. 33).
2.
ID.; ID.; ID.; DOCTRINE THAT BEFORE ISSUANCE OF
CERTIFICATE OF TITLE, THE OCCUPANT IS NOT IN THE JURIDICAL
SENSE THE TRUE OWNER OF THE LAND, ALREADY ABANDONED.
At this juncture, petitioner's reliance in Republic v. Villanueva (114
SCRA 875 [1982]) deserves scant consideration. There, it was held that
before the issuance of the certificate of title, the occupant is not in the
juridical sense the true owner of the land since it still pertains to the
State. Suffice it to state that the ruling in Republic v. Villanueva (supra),
has already been abandoned in the 1986 case of Director of Lands v.
Intermediate Appellate Court (146 SCRA 509; and reiterated in Director
of Lands v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court,
through then Associate Justice, now Chief Justice Narvasa, declared
that: "(The weight of authority is) that open, exclusive and undisputed
possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of judicial or other
sanction, ceases to be public land and becomes private property. . . .
"Nothing can more clearly demonstrate the logical inevitability of
considering possession of public land which is of the character and
duration prescribed by the statute as the equivalent of an express grant
from the State than the dictum of the statute itself (Section 48 [b]) that
the possessor(s) '. . . shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled
to a certificate of title . . . .' No proof being admissible to overcome a
conclusive presumption, confirmation proceedings would, in truth be
little more than a formality, at the most limited to ascertaining whether
the possession claims is of the required character and length of time;
and registration thereunder would not confer title, but simply recognize a
title already vested. The proceedings would not originally convert the
land from public to private land, but only confirm such a conversion
already affected by operation of law from the moment the required
period of possession became complete. As was so well put in Cario, '. .
. (There are indications that registration was expected from all, but none
sufficient to show that, for want of it, ownership actually gained would be
lost. The effect of the proof, wherever made, was not to confer title, but
simply to establish it, as already conferred by the decree, if not by
earlier law.'" (Emphasis supplied)
3.
ID.; ID.; ID.; OPEN, CONTINUOUS AND EXCLUSIVE
POSSESSION FOR AT LEAST 30 YEARS OF ALIENABLE PUBLIC
LAND IPSO JURE CONVERTS THE SAME TO PRIVATE PROPERTY.
Natural Resources || Full Text Cases Prelim Exam || 39

Subsequent cases have hewed to the above pronouncement such


that open, continuous and exclusive possession for at least 30 years of
alienable public land ipso jure converts the same to private property
(Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183
SCRA 602 [1990]). This means that occupation and cultivation for more
than 30 years by an applicant and his predecessors-in-interest, vest title
on such applicant so as to segregate the land from the mass of public
land (National Power Corporation v. CA, 218 SCRA 41 [1993]).
4.
ID.; ID.; ID.; ID.; REQUISITES. The Public Land Act
requires that the applicant must prove that (a) the land is alienable
public land and (b) his possession, in the concept above stated, must be
either since time immemorial or for the period prescribed in the Public
Land Act (Director of Lands v Buyco, 216 SCRA 78 [1992]). When the
conditions set by law are complied with, the possessor of the land, by
operation of law, acquires a right to a grant, a government grant, without
the necessity of a certificate of title being issued (National Power
Corporation v. CA, supra). As such, the land ceases to be a part of the
public domain and goes beyond the authority of the Director of Lands to
dispose of.
5.
ID.; ID.; TORRENS SYSTEM OF LAND REGISTRATION;
NOT A MEANS FOR ACQUISITION OF TITLE TO PRIVATE LAND.
In other words, the Torrens system was not established as a means for
the acquisition of title to private land (Municipality of Victorias v. CA, 149
SCRA 32 [1987]). It merely confirms, but does not confer ownership.
6.
ID.; ID.; PUBLIC LAND ACT; BUYCO RULING (216 SCRA 78
[1992]) NOT APPLICABLE TO CASE AT BAR. In the main, petitioner
seeks to defeat respondents' application for registration of title on the
ground of foreign nationality. Accordingly, the ruling in Director of Lands
v. Buyco (supra) supports petitioner's thesis. We disagree. In Buyco, the
applicants therein were likewise foreign nationals but were natural-born
Filipino citizens at the time of their supposed acquisition of the property.
But this is where the similarity ends. The applicants in Buyco sought to
register a large tract of land under the provisions of the Land
Registration Act, and in the alternative, under the provisions of the
Public Land Act. The land registration court decided in favor of the
applicants and was affirmed by the appellate court on appeal. The
Director of Lands brought the matter before us on review and we
reversed. Clearly, the applicants in Buyco were denied registration of
title not merely because they were American citizens at the time of their
application therefor. Respondents therein failed to prove possession of
their predecessor-in-interest since time immemorial or possession in
such a manner that the property has been segregated from public
domain; such that at the time of their application, as American citizens,
they have acquired no vested rights over the parcel of land. In the case
at bar, private respondents were undoubtedly natural-born Filipino
citizens at the time of the acquisition of the properties and by virtue
thereof, acquired vested rights thereon, tacking in the process, the
possession in the concept of owner and the prescribed period of time
held by their predecessors-in-interest under the Public Land Act. In
addition, private respondents have constructed a house of strong
materials on the contested property, now occupied by respondent
Lapia's mother.
7.
CONSTITUTIONAL LAW; CONSTITUTION; NATIONAL
ECONOMY AND PATRIMONY; NATURAL-BORN FILIPINO CITIZEN
WHO HAS LOST HIS CITIZENSHIP MAY BE A TRANSFEREE OF
PRIVATE LANDS. But what should not be missed in the disposition of
this case is the fact that the Constitution itself allows private
respondents to register the contested parcels of land in their favor.

Sections 7 and 8 of Article XII of the Constitution contain the following


pertinent provisions, to wit: "Sec. 7. Save in cases of hereditary
succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold
lands of the public domain." "Sec. 8. Notwithstanding the provisions of
Section 7 of this Article, a natural-born citizen of the Philippines who has
lost his Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law." (Emphasis supplied) Section 8,
Article XII of the 1987 Constitution above quoted is similar to Section 15,
Article XIV of the then 1973 Constitution which reads: "Sec. 15.
Notwithstanding the provisions of Section 14 of this Article, a naturalborn citizen of the Philippines who has lost his citizenship may be a
transferee of private land, for use by him as his residence, as the
Batasang Pambansa may provide." Pursuant thereto, Batas Pambansa
Blg. 185 was passed into law, the relevant provision of which provides:
"Sec. 2. Any natural-born citizen of the Philippines who has lost his
Philippine citizenship and who has the legal capacity to enter into a
contract under Philippine laws may be a transferee of a private land up
to a maximum area of one thousand square meters, in the case of urban
land, or one hectare in the case of rural land, to be used by him as his
residence. In the case of married couples, one of them may avail of the
privilege herein granted; Provided, That if both shall avail of the same,
the total area acquired shall not exceed the maximum herein fixed. "In
the case the transferee already owns urban or rural lands for residential
purposes, he shall still be entitled to be a transferee of an additional
urban or rural lands for residential purposes which, when added to those
already owned by him, shall not exceed the maximum areas herein
authorized." From the adoption of the 1987 Constitution up to the
present, no other law has been passed by the legislature on the same
subject. Thus, what governs the disposition of private lands in favor of a
natural-born Filipino citizen who has lost his Philippine citizenship
remains to be BP 185.
8.
ID.; ID.; ID.; CASE AT BAR. Even if private respondents
were already Canadian citizens at the time they applied for registration
of the properties in question, said properties as discussed above were
already private lands; consequently, there could be no legal impediment
for the registration thereof by respondents in view of what the
Constitution ordains. The parcels of land sought to be registered no
longer form part of the public domain. They are already private in
character since private respondents' predecessors-in-interest have been
in open, continuous and exclusive possession and occupation thereof
under claim of ownership prior to June 12, 1945 or since 1937. The law
provides that a natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of a private land up to a
maximum area of 1,000 sq.m., if urban, or one (1) hectare in case or
rural land, to be used by him as his residence (BP 185). It is undisputed
that private respondents, as vendees of a private land, were naturalborn citizens of the Philippines. For the purpose of transfer and/or
acquisition of a parcel of residential land, it is not significant whether
private respondents are no longer Filipino citizens at the time they
purchased or registered the parcels of land in question. What is
important is that private respondents were formerly natural-born citizens
of the Philippines, and as transferees of a private land, they could apply
for registration in accordance with the mandate of Section 8, Article XII
of the Constitution. Considering that private respondents were able to
prove the requisite period and character of possession of their
predecessors-in-interest over the subject lots, their application for
registration of title must perforce be approved.
9.
ID.; ID.; ID.; REQUIREMENT IN SECTION 6 OF BATAS
PAMBANSA BLG. 185 PRIMARILY DIRECTED TO THE REGISTER OF
Natural Resources || Full Text Cases Prelim Exam || 40

DEEDS THAN TO APPLICANT. The dissenting opinion, however,


states that the requirements in BP 185, must also be complied with by
private respondents. Specifically, it refers to Section 6, which requires
the submission of the relevant sworn statement by the applicant. The
Court is of the view that the requirements in Sec. 6 of BP 185 do not
apply in the instant case since said requirements are primarily directed
to the register of deeds before whom compliance therewith is to be
submitted. Nowhere in the provision is it stated, much less implied, that
the requirements must likewise be submitted before the land registration
court prior to the approval of an application for registration of title. An
application for registration of title before a land registration court should
not be confused with the issuance of a certificate of title by the register
of deeds. It is only when the judgment of the land registration court
approving the application for registration has become final that a decree
of registration is issued. And that is the time when the requirements of
Sec. 6, BP 185, before the register of deeds should be complied with by
the applicants. This decree of registration is the one that is submitted to
the office of the register of deeds for issuance of the certificate of title in
favor of the applicant. Prior to the issuance of the decree of registration,
the register of deeds has no participation in the approval of the
application for registration of title as the decree of registration is yet to
be issued.
FELICIANO, J., concurring:
1.
CONSTITUTIONAL LAW; CONSTITUTION; NATIONAL
ECONOMY AND PATRIMONY; NATURAL-BORN CITIZEN WHO HAS
LOST HIS CITIZENSHIP MAY BE TRANSFEREE OF PRIVATE LAND;
TRANSFER MUST BE MADE AFTER LOSS OF CITIZENSHIP; CASE
AT BAR. This separate statement is concerned only with the last two
(2) paragraphs, just before the dispositive portion, of the majority
opinion. In my view, it should be stressed that B.P. Blg. 185 which took
effect on 16 March 1982, does not purport to cover the set of facts
before the Court in this case: i.e., the respondent spouses became
transferees (on 17 June 1978) of the land here involved while they were
natural-born Philippine citizens who happened sometime later to have
been naturalized as citizens of another country. B.P. Blg. 185, as far as I
can determine, addresses itself only to a situation of persons who were
already foreign nationals at the time they became transferees of private
land in the Philippines, but who were previously natural-born Philippine
citizens. It is difficult, therefore, to see how B.P. Blg. 185 can become
applicable to the present situation even at the subsequent time when
the respondent spouses would come before the Register of Deeds. B.P.
Blg. 185, especially Section 6 thereof, imposes certain requirements,
including a specific limitation on the quantity of land (not more than
1,000 square meters) which may be acquired thereunder, an amount
limitation which must not be exceeded both by the land of which such
foreign national becomes transferee and by such land taken together
with other land previously acquired by such foreign national. (2nd
paragraph, Section 2, B.P. Blg. 185) B.P. Blg. 185 would, of course,
apply to subsequent purchases of land by the respondent spouses, that
is, purchases made after they were naturalized as Canadian nationals.
CRUZ, J., dissenting:
1.
CONSTITUTIONAL LAW; CONSTITUTION; NATURAL-BORN
FILIPINO CITIZEN WHO HAS LOST HIS CITIZENSHIP MAY BE
TRANSFEREE OF PRIVATE LAND; LIMITATIONS PROVIDED FOR IN
BATAS PAMBANSA BLG. 185; ABSENCE OF EVIDENCE IN CASE AT
BAR OF COMPLIANCE THEREWITH. With all due respect, I have to
dissent. There is no question that the property is private land and thus
subject to registration by qualified persons. It was really needless to

elaborate on Buyco, which is clearly inapplicable here. We can agree


that the ruling case is Director of Lands v. Intermediate Appellate Court,
which is not challenged in this petition. But I think the ponencia misses
the point. The finding that the respondent spouses were natural-born
Filipinos at the time they acquired the land does not settle the question
posed. The important point is that the respondent spouses are no longer
citizens of the Philippines but naturalized Canadians. It does not follow
that because they were citizens of the Philippines when they acquired
the land, they can register it in their names now even if they are no
longer Filipinos. Section 7 of Article XII of the Constitution is irrelevant
because it is not disputed that the respondent spouses were qualified to
acquire the land in question when it was transferred to them. Section 8
of the same article is not applicable either because it speaks of a
transfer of private land to a former natural-born citizen of the Philippines
after he became a foreigner. Even if it be assumed that the provision is
applicable, it does not appear that the private respondents have
observed "the limitations provided by law." The ponencia finds that all
the requisites for the registration of the land in the private respondents'
name have been complied with. I do not believe so for there is no
showing that B.P. 185 has also been enforced. The view has been
expressed that we should confine ourselves to the requirements for
registration under the Public Land Act. I respectfully submit that the
requirements in B.P. 185 have been read into the Act and should also be
applied. Strict compliance is necessary because of the special privilege
granted to former Filipinos who have become foreigners by their own
choice. If we can be so strict with our citizens, I see no reason why we
should be less so with those who have renounced our country.

DECISION

BIDIN, J p:
Can a foreign national apply for registration of title over a parcel of land
which he acquired by purchase while still a citizen of the Philippines,
from a vendor who has complied with the requirements for registration
under the Public Land Act (CA 141)?
The Republic would have us rule on the negative and asks this Court to
nullify the decision of the appellate court which affirmed the judgment of
the court a quo in granting application of respondent spouses for
registration over the lots in question. llcd
On June 17, 1978, respondent spouses bought Lots 347 and 348, Cad.
s38-D, as their residence with a total area of 91.77 sq. m. situated in
San Pablo City, from one Cristela Dazo Belen (Rollo, p. 41). At the time
of the purchase, respondent spouses were then natural-born Filipino
citizens.
On February 5, 1987, the spouses filed an application for registration of
title of the two (2) parcels of land before the Regional Trial Court of San
Pablo City, Branch XXXI. This time, however, they were no longer
Filipino citizens and have opted to embrace Canadian citizenship
through naturalization.
An opposition was filed by the Republic and after the parties have
presented their respective evidence, the court a quo rendered a
decision confirming private respondents' title to the lots in question, the
dispositive portion of which reads as follows:
Natural Resources || Full Text Cases Prelim Exam || 41

"WHEREFORE, in view of the foregoing, this court hereby approves the


said application and confirms the title and possession of herein
applicants over Lots 347 and 348, Ap-04-003755 in the names of
spouses Mario B. Lapia and Flor de Vega, all of legal age, Filipino
citizens by birth but now Canadian citizens by naturalization and
residing at 14 A. Mabini Street, San Pablo City and/or 201-1170-124
Street, Edmonton, Alberta T5M-OK9, Canada.
"Once this Decision becomes final, let the corresponding decree of
registration be issued. In the certificate of title to be issued, there shall
be annotated an easement of 6.25 meters road right-of-way."
"SO ORDERED." (Rollo, p. 25)
On appeal, respondent court affirmed the decision of the trial court
based on the following ratiocination:
In the present case, it is undisputed that both applicants were still
Filipino citizens when they bought the land in controversy from its former
owner. For this reason, the prohibition against the acquisition of private
lands by aliens could not apply. In justice and equity, they are the rightful
owners of the subject realty considering also that they had paid for it
quite a large sum of money. Their purpose in initiating the instant action
is merely to confirm their title over the land, for, as has been passed
upon, they had been the owners of the same since 1978. It ought to be
pointed out that registration is not a mode of acquiring ownership. The
Torrens System was not established as a means for the acquisition of
title to private land. It is intended merely to confirm and register the title
which one may already have (Municipality of Victorias vs. Court of
Appeals, G.R. No. L-31189, March 31, 1987). With particular reference
to the main issue at bar, the High Court has ruled that title and
ownership over lands within the meaning and for the purposes of the
constitutional prohibition dates back to the time of their purchase, not
later. The fact that the applicants-appellees are not Filipino citizens now
cannot be taken against them for they were not disqualified from
acquiring the land in question (Bollozos vs. Yu Tieng Su, G.R. No. L29442, November 11, 1987)." (Rollo, pp. 27-28)
Expectedly, respondent court's disposition did not merit petitioner's
approval, hence this present recourse, which was belatedly filed.
Ordinarily, this petition would have been denied outright for having been
filed out of time had it not been for the constitutional issue presented
therein. prcd
At the outset, petitioner submits that private respondents have not
acquired proprietary rights over the subject properties before they
acquired Canadian citizenship through naturalization to justify the
registration thereof in their favor. It maintains that even privately owned
unregistered lands are presumed to be public lands under the principle
that land of whatever classification belong to the State under the
Regalian doctrine. Thus, before the issuance of the certificate of title,
the occupant is not in the juridical sense the true owner of the land since
it still pertains to the State. Petitioner further argued that it is only when
the court adjudicates the land to the applicant for confirmation of title
would the land become privately owned land, for in the same
proceeding, the court may declare it public land, depending on the
evidence.
As found by the trial court:
"The evidence thus presented established that applicants, by
themselves and their predecessors-in-interest, had been in open, public,

peaceful, continuous, exclusive and notorious possession and


occupation of the two adjacent parcels of land applied for registration of
title under a bona-fide claim of ownership long before June 12, 1945.
Such being the case, it is conclusively presumed that all the conditions
essential to the confirmation of their title over the two adjacent parcels of
land are sought to be registered have been complied with thereby
entitling them to the issuance of the corresponding certificate of title
pursuant to the provisions of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree." (Rollo, p. 26)
Respondent court echoed the court a quo's observation, thus:
"The land sought to be registered has been declared to be within the
alienable and disposable zone established by the Bureau of Forest
Development (Exhibit `P'). The investigation conducted by the Bureau of
Lands, Natural Resources District (IV-2) reveals that the disputed realty
had been occupied by the applicants `whose house of strong materials
stands thereon'; that it had been declared for taxation purposes in the
name of applicants-spouses since 1979; that they acquired the same by
means of a public instrument entitled 'Kasulatan ng Bilihang Tuluyan'
duly executed by the vendor, Cristeta Dazo Belen, on June 17, 1978
(Exhibits 'I' and 'J'); and that applicants and their predecessors in
interest had been in possession of land for more than 30 years prior to
the filing of the application for registration. But what is of great
significance in the instant case is the circumstance that at the time the
applicants purchased the subject lot in 1978, both of them were Filipino
citizens such that when they filed their application for registration in
1987, ownership over the land in dispute had already passed to them."
(Rollo, p.27)
The Republic disagrees with the appellate court's concept of possession
and argues:
"17.
The Court of Appeals found that the land was declared for
taxation purposes in the name of respondent spouses only since 1979.
However, tax declarations or realty tax payments of property are not
conclusive evidence of ownership. (citing cases)
"18.
Then again, the appellate court found that applicants
(respondents) and their predecessors-in-interest had been in
possession of the land for more than 30 years prior to the filing of the
application for registration.' This is not, however, the same as saying
that respondents have been in possession 'since June 12, 1945.' (PD
No. 1073, amending Sec. 48 [b], CA No. 141; see also Sec. 14, PD No.
1529). So there is a void in respondents' possession. They fall short of
the required possession since June 12, 1945 or prior thereto. And, even
if they needed only to prove thirty (30) years possession prior to the
filing of their application (on February 5, 1987), they would still be short
of the required possession if the starting point is 1979 when, according
to the Court of Appeals, the land was declared for taxation purposes in
their name." (Rollo, pp. 14-15)
The argument is myopic, to say the least. Following the logic of
petitioner, any transferee is thus foreclosed to apply for registration of
title over a parcel of land notwithstanding the fact that the transferor, or
his predecessor-in-interest has been in open, notorious and exclusive
possession thereof for thirty (30) years or more. This is not, however,
what the law provides. cdll
As petitioner itself argues, Section 48 of the Public Land Act (CA 141)
reads:
Natural Resources || Full Text Cases Prelim Exam || 42

"Sec. 48. The following-described citizens of the Philippines, occupying


lands of the public domain or claiming interest therein, but whose titles
have not been perfected or completed, may apply to the Court of First
Instance (now Regional Trial Court) of the province where the land is
located for confirmation of their claims and the issuance of a certificate
of title thereof under the Land Registration Act, to wit:
xxx

xxx

xxx

(b)
Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain,
under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation
of title except when prevented by wars or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the
provisions of this charter." (Emphasis supplied)
As amended by PD 1073:
"Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter
VIII, of the Public Land Act are hereby amended in the sense that these
provisions shall apply only to alienable and disposable lands of the
public domain which have been in open, continuous, exclusive and
notorious possession and occupation by the applicant himself or thru his
predecessor-in-interest, under a bona fide claim of acquisition or
ownership, since June 12, 1945."
It must be noted that with respect to possession and occupation of the
alienable and disposable lands of the public domain, the law employs
the terms "by themselves", the applicant himself or through his
predecessor-in-interest". Thus, it matters not whether the
vendee/applicant has been in possession of the subject property for only
a day so long as the period and/or legal requirements for confirmation of
title has been complied with by his predecessor-in-interest, the said
period is tacked to his possession. In the case at bar, respondents'
predecessors-in-interest have been in open, continuous, exclusive and
notorious possession of the disputed land not only since June 12, 1945,
but even as early as 1937. Petitioner does not deny this except that
respondent spouses, in its perception, were in possession of the land
sought to be registered only in 1987 and therefore short of the required
length of time. As aforesaid, the disputed parcels of land were acquired
by private respondents through their predecessors-in-interest, who, in
turn, have been in open and continued possession thereof since 1937.
Private respondents stepped into the shoes of their predecessors-ininterest and by virtue thereof, acquired all the legal rights necessary to
confirm what could otherwise be deemed as an imperfect title. cdphil
At this juncture, petitioner's reliance in Republic v. Villanueva (114
SCRA 875 [1982]) deserves scant consideration. There, it was held that
before the issuance of the certificate of title, the occupant is not in the
juridical sense the true owner of the land since it still pertains to the
State.
Suffice it to state that the ruling in Republic v. Villanueva (supra), has
already been abandoned in 1986 case of Director of Lands v.
Intermediate Appellate Court (146 SCRA 509; and reiterated in Director
of Lands v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court,
through then Associate Justice, now Chief Justice Narvasa, declared
that:

"(The weight of authority is) that open, exclusive and undisputed


possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of judicial or other
sanction, ceases to be public land and becomes private property. . . .
"Herico in particular, appears to be squarely affirmative:
". . . . Secondly, under the provisions of Republic Act No. 1942, which
the respondent Court held to be inapplicable to the petitioner's case,
with the latter's proven occupation and cultivation for more than 30
years since 1914, by himself and by his predecessors-in-interest, title
over the land has vested on petitioner so as to segregate the land from
the mass of public land. Thereafter, it is no longer disposable under the
Public Land Act as by free patent. . . .
xxx

xxx

xxx

'As interpreted in several cases, when the conditions as specified in the


foregoing provision are complied with, the possessor is deemed to have
acquired, by operation of law, a right to grant, a government grant,
without the necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain and beyond the authority of
the Director of Lands to dispose of. The application for confirmation is
mere formality, the lack of which does not affect the legal sufficiency of
the title as would be evidenced by the patent and the Torrens title to be
issued upon the strength of said patent.'
"Nothing can be more clearly demonstrate the logical inevitability of
considering possession of public land which is of the character and
duration prescribed by the statute as the equivalent of an express grant
from the State than the dictum of the statute itself (Section 48[b]) that
the possessor(s) '. . . shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled
to a certificate of title . . . .' No proof being admissible to overcome a
conclusive presumption, confirmation proceedings would, in truth be
little more than formality, at the most limited to ascertaining whether the
possession claims is of the required character and length of time; and
registration thereunder would not confer title, but simply recognize a title
already vested. The proceedings would not originally convert the land
from public to private land, but only confirm such a conversion already
affected by operation of law from the moment the required period of
possession became complete. As was so well put in Cario,
'. . . (There are indications that registration was expected from all, but
none sufficient to show that, for want of it, ownership actually gained
would be lost. The effect of the proof, wherever made, was not to confer
title, but simply to establish it, as already conferred by the decree, if not
by earlier law." (Emphasis supplied)
Subsequent cases have hewed to the above pronouncement such that
open, continuous and exclusive possession for at least 30 years of
alienable public land ipso jure converts the same to private property
(Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183
SCRA 602 [1990]). This means that occupation and cultivation for more
than 30 years by an applicant and his predecessors-in- interest, vest
title on such applicant so as to segregate the land from the mass of
public land (National Power Corporation v. CA, 218 SCRA 41 [1993]).
Cdpr
The Public Land Act requires that the applicant must prove that (a) the
land is alienable public land and (b) his possession, in the concept
Natural Resources || Full Text Cases Prelim Exam || 43

above stated, must be either since time immemorial or for the period
prescribed in the Public Land Act (Director of Lands v. Buyco, 216
SCRA 78 [1992]). When the conditions set by law are complied with, the
possessor of the land, by operation of law, acquires a right to grant, a
government grant, without the necessity of a certificate of title being
issued (National Power Corporation v. CA, supra). As such, the land
ceases to be a part of the public domain and goes beyond the authority
of the Director of Lands to dispose of.
In other words, the Torrens system was not established as a means for
the acquisition of title to private land (Municipality of Victorias v. CA, 149
SCRA 32 [1987]). It merely confirms, but does not confer ownership. As
could be gleaned from the evidence adduced, private respondents were
able to establish the nature of possession of their predecessors-ininterest. Evidence was offered to prove that their predecessors-ininterest had paid taxes on the subject land and introduced
improvements thereon (Exhibits "F" to "F9"). A certified true copy of the
affidavit executed by Cristeta Dazo and her sister Simplicia was also
formally offered to prove that the subject parcels of land were inherited
by vendor Cristeta Dazo from her father Pedro Dazo with the conformity
of her only sister Simplicia (Exhibit "G"). Likewise, a report from the
Bureau of Lands was presented in evidence together with a letter from
the Bureau of Forest Development, to prove that the questioned lots
were part of the alienable and disposable zone of the government and
that no forestry interest was affected (CA GR No. 28953, Records, p.
33).
In the main, petitioner seeks to defeat respondents' application for
registration of title on the ground of foreign nationality. Accordingly, the
ruling in the Director of Lands v. Buyco (supra) supports petitioner's
thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign nationals but were
natural-born Filipino citizens at the time of their supposed acquisition of
the property. But this is where the similarity ends. the applicants in
Buyco sought to register a large tract of land under the provisions of the
Land Registration Act, and in the alternative, under the provisions of the
Public Land Act. The land registration court decided in favor of the
applicants and was affirmed by the appellate court on appeal. The
Director of Lands brought the matter before us on review and we
reversed. LibLex
This Court, speaking through Justice Davide, Jr., stated:
"As we could be gleaned from the evidence adduced, the private
respondents do not rely on fee simple ownership based on a Spanish
grant or possessory information title under Section 19 of the Land
Registration Act; the private respondents did not present any proof that
they or their predecessors-in-interest derived title from an old Spanish
grant such as (a) the 'titulo real' or royal grant (b) the 'concession
especial' or special grant; (c) the 'composicion con el estado' title or
adjustment title; (d) the 'titulo de compra' or title by purchase; and (e)
the 'informacion posesoria' or possessory information title, which would
become a 'titulo gratuito' or a gratuitous title (Director of Forestry v.
Muoz, 23 SCRA 1183 [1968]). The primary basis of their claim is
possession, by themselves and the predecessors-in-interest, since time
immemorial.
"If indeed private respondents and their predecessors have been in
possession since time immemorial, the rulings of both courts could be

upheld for, as this Court stated in Oh Cho v. Director of Lands (75 Phil.
890 [1946]):
'. . . All lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. An exception to the
rule would be any land that should have been in the possession of an
occupant and of his predecessors in interest since time immemorial, for
such possession would justify the presumption that the land had never
been part of the public domain or that if had been a private property
even before the Spanish conquest (Cario v. Insular Government, 41
Phil. 935 [1909]; 212 U.S. 449; 53 Law. Ed., 594) The applicant does
not come under the exception, for the earliest possession of the lot by
his first predecessor in interest began in 1880.'
'. . . alienable public land held by a possessor, personally or through his
predecessors-in-interest, openly, continuously and exclusively for the
prescribed statutory period (30 years under the Public Land Act, as
amended) is converted to private property by the mere lapse or
completion of said period ipso jure.' (Director of Lands v. Intermediate
Appellate Court, supra)
"It is obvious from the foregoing rule that the applicant must prove that
(a) the land is alienable public land and (b) his possession, in the
concept above stated, must be either since time immemorial, as ruled in
both Cario and Susi, or for the period prescribed in the Public Land
Act. As to the latter, this Court, in Gutierrez Hermanos v. Court of
Appeals (178 SCRA 37 [1989]), adopted the rule enunciated by the
Court of Appeals, per then Associate Justice Hugo R. Gutierrez, Jr., . . . ,
that an applicant for registration under Section 48 of the Public Land Act
must secure a certification from the Government that the lands which he
claims to have possessed as owner for more than thirty (30) years are
alienable and disposable. It is the burden of the applicant to prove its
positive averments.
"In the instant case, private respondents offered no evidence at all to
prove that the property subject of the application is an alienable and
disposable land. On the contrary, the entire property . . . was pasture
land (and therefore inalienable under the then 1973 Constitution).
". . . (P)rivate respondents' evidence miserably failed to establish their
imperfect title to the property in question. Their allegation of possession
since time immemorial, . . ., is patently baseless. . . . When referring to
possession, specifically 'immemorial possession,' it means possession
of which no man living has seen the beginning, and the existence of
which he has learned form his elders (Susi v. Razon, supra). Such
possession was never present in the case of private respondents. . . .
". . ., there does not even exist a reasonable basis for the finding that
the private respondents and their predecessors-in-interest possessed
the land for more than eighty (80) years. . . .
xxx

xxx

xxx

"To this Court's mind, private respondents failed to prove that (their
predecessor-in-interest) had possessed the property allegedly covered
by Tax Declaration No. 15853 and made the subject of both his last will
and testament and the project of partition of his estate among his heirs in such manner as to remove the same from the public domain under
the Cario and Susi doctrines. Thus, (when the predecessor-in-interest)
died on 31 May 1937, he transmitted no right whatsoever, with respect
to the said property, to his heirs. This being the case, his possession
cannot be tacked to that of the private respondents for the latter's
Natural Resources || Full Text Cases Prelim Exam || 44

benefit pursuant to Section 48(b) of the Public Land Act, the alternative
ground relied upon in their application. . . .
xxx

xxx

xxx

"Considering that the private respondents became American citizens


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

or rural lands for residential purposes which, when added to those


already owned by him, shall not exceed the maximum areas herein
authorized."
From the adoption of the 1987 Constitution up to the present, no other
law has been passed by the legislature on the same subject. Thus, what
governs the disposition of private lands in favor of a natural-born Filipino
citizen who has lost his Philippine citizenship remains to be BP 185.
LLpr
Even if private respondents were already Canadian citizens at the time
they applied for registration of the properties in question, said properties
as discussed above were already private lands; consequently, there
could be no legal impediment for the registration thereof by respondents
in view of what the Constitution ordains. The parcels of land sought to
be registered no longer form part of the public domain. They are already
private in character since private respondents' predecessors-in-interest
have been in open, continuous and exclusive possession and
occupation thereof under claim of ownership prior to June 12, 1945 or
since 1937. The law provides that a natural-born citizen of the
Philippines who has lost his Philippine citizenship may be a transferee
of a private land up to a maximum area of 1,000 sq. m., if urban, or one
(1) hectare in case of rural land, to be used by him as his residence (BP
185).
It is undisputed that private respondents, as vendees of a private land,
were natural born citizens of the Philippines. For the purpose of transfer
and/or acquisition of a parcel of residential land, it is not significant
whether private respondents are no longer Filipino citizens at the time
they purchased or registered the parcels of land in question. What is
important is that private respondents were formerly natural-born citizens
of the Philippines, and as transferees of a private land, they could apply
for registration in accordance with the mandate of Section 8, Article XII
of the Constitution. Considering that private respondents were able to
prove the requisite period and character of possession of their
predecessors-in-interest over the subject lots, their application for
registration of title must perforce be approved.
The dissenting opinion, however, states that the requirements in BP
185, must also be complied with by private respondents. Specifically, it
refers to Section 6, which provides:
"Sec. 6. In addition to the requirements provided for in other laws for
the registration of titles to lands, no private land shall be transferred
under this Act, unless the transferee shall submit to the register of deeds
of the province or city where the property is located a sworn statement
showing the date and place of birth; the names and addresses of his
parents, of his spouse and children, if any; the area, the location and the
mode of acquisition of his landholdings in the Philippines, if any; his
intention to reside permanently in the Philippines; the date he lost his
Philippine citizenship and the country of which he is presently a citizen;
and such other information as may be required under Section 8 of this
Act."
The Court is of the view that the requirements in Sec. 6 of BP 185 do
not apply in the instant case since said requirements are primarily
directed to the register of deeds before whom compliance therewith is to
be submitted. Nowhere in the provision is it stated much less implied,
that the requirements must likewise be submitted before the land
registration court prior to the approval of an application for registration of
title. An application for registration of title before a land registration court
should not be confused with the issuance of a certificate of title by the
Natural Resources || Full Text Cases Prelim Exam || 45

register of deeds. It is only when the judgment of the land registration


court approving the application for registration has become final that a
decree of registration is issued. And that is the time when the
requirements of Sec. 6, BP 185, before the register of deeds should be
complied with by the applicants. The decree of registration is the one
that is submitted to the office of the register of deeds for issuance of the
certificate of title in favor of the applicant. Prior to the issuance of the
decree of registration, the register of deeds has no participation in the
approval of the application for registration of title as the decree of
registration is yet to be issued. LibLex
WHEREFORE, the petition is DISMISSED and the decision appealed
from is hereby AFFIRMED.

The Supreme Court upheld the vulgar substitution of Wanda's usufruct


despite her having survived the testator as said substitution under Art
859 of the Civil Code includes not only death but also refusal or
incapacity to accept the inheritance but disallowed the fideicommissary
aspect of the same as the substitutes are not related to the heir as
required by Art. 863 of the said Code. The Court further ruled that: (a)
the widow who is entitled to one-half of the estate "en pleno dominio" as
her legitime is not entitled to the one third usufruct over the free portion,
hence the question on its substitution has become moot and (b) that a
usufruct in favor of an alien, albeit a real right does not vest title to the
land in the usufructuary and therefore not contrary to the Constitution.
Order modified.

SO ORDERED.

SYLLABUS

G.R. No. L-27952 February 15, 1982

1.
CIVIL LAW; TESTIMENTARY SUCCESSION; WILLS; WHEN
LEGITIME IS MORE THAN TESTATOR'S DISPOSITION; EFFECT.
The widow who is entitled to one-half of the estate "en pleno dominio"
as her legitime which is more than what she is given under the will is not
entitled to the one third usufruct over the free portions which is an
additional share in the estate that will run counter to the testator's
intention.

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, ET AL. vs.


MARCELLE D. VDA. DE RAMIREZ, ET AL.

SECOND DIVISION
[G.R. No. L-27952. February 15, 1982.]

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA


PALACIOS, Administratrix, petitioner-appellee, vs. MARCELLE D. VDA.
DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO RAMIREZ,
Legatees, oppositors-appellants.

Ignacio R. Ortigas for appellee.


Messrs. Luna, Parugganan, Sison & Ongsiako for oppositor-appellants.
Messrs. Gamboa & Hofilea for movant.
Messrs. Quasha, Asperilla, Zafra, Tayag & Archeta for oppositor M. Vda.
de Ramirez.

SYNOPSIS
Jose Eugenio Ramirez, a Filipino national, died in Spain with only his
widow as compulsory heir. His will was admitted to probate by the Court
of First Instance of Manila, Branch X. The administratrix of the estate
submitted a project of partition giving one part of the estate to the widow
"en pleno dominio'' in satisfaction of her legitime while the other part of
the "free portion" to his two grandnephews Roberto and Jorge Ramirez,
as the oppositors-appellants. Furthermore, one third of the free portion
is charged with the widow's usufruct and the remaining two thirds (2/3)
with a usufruct in favor of Wanda Wrobleski. Jorge and Roberto Ramirez
opposed the project of partition as well as the substitutions provided by
the testator as to the usufructs of the widow and of Wanda.
Nonetheless, the lower court approved the project of partition in its order
dated May 3, 1967. Jorge and Roberto appealed.

2.
ID.: ID.; ID.; SUBSTITUTION; DEFINITION. "Substitution is
the appointment of another heir so that he may enter into the inheritance
in default of the heir originally instituted" (Art. 857, Civil Code).
3.
ID.; ID.; ID.; ID.; KINDS. There are several kinds of
substitutions, namely: simple or common, brief or compendious,
reciprocal, and fideicommissary (Art. 858, Civil Code). According to
Tolentino, Although the Code enumerates four classes, there are really
two principal classes of substitutions: the simple and the
fideicommissary. The others are merely variations of these two.'' (III Civil
Code, p.185 [1973]). The simple or vulgar is that provided in Art. 859 of
the Civil Code while the fideicommissary substitution is described in Art.
863 of the same Code.
4.
ID.; ID.; ID.; ID.; VULGAR SUBSTITUTION; COVERAGE.
Vulgar substitution is valid although the heir survived the testator or
stated differently did not predecease the testator because dying before
the testator is not the only case for vulgar substitution. It also includes
refusal or incapacity to accept the inheritance as provided in Art. 859 of
the Civil Code.
5.
ID.; ID.; ID.; ID.; FIDEICOMMISSARY SUBSTITUTION;
DEGREE OF RELATIONSHIP REQUIRED; NOT PRESENT IN CASE
AT BAR. Art. 863 of the Civil Code validates a fideicommissary
substitution "provided such substitution does not go beyond one degree
from the heir originally instituted.'' Hence in the case at bar, appellants
are correct in their claim that the substitution is void because the
substitutes are not related to the heir originally instituted.
6.
ID.; ID.; ID.; I D.; MEANING OF "ONE DEGREE"
EXPLAINED. "Scaevola, Maura, and Traviesas construe 'degree' as
designation, substitution, or transmission. The Supreme Court of Spain
has decidedly adopted this construction. From this point of view, there
can be only one transmission or substitution, and the substitute need
not be related to the first heir. Manresa, Morell, and Sanchez Roman
however, construe the word 'degree' as generation, and the present
Code providing that the substitution shall not go beyond one degree
'from the heir originally instituted.' The Code thus clearly indicates that
Natural Resources || Full Text Cases Prelim Exam || 46

the second heir must be related to and be one generation from the first
heir. From this, it follows that the fideicommissary can only be either a
child or a parent of the first heir. These are the only relatives who are
one generation or degree from the fiduciary." (Tolentino, I I I Civil Code
pp. 193-194 [1973]).

Azucarera de la Carlota' a P17.00 por accion

7.
ID.; ID.; ID.; ID.; FIDEICOMMISSARY SUBSTITUTION;
OBLIGATION OF FIDUCIARY TO DELIVER THE INHERITANCE TO
THE SECOND HEIR. Fideicommissary substitution is void where
there is no absolute duty imposed on the first heir to transmit the
usufruct to the substitutes as required by Arts. 865 and 857 of the Civil
Code but in fact, the appellee admits "that the testator contradicts the
establishment of a fideicommissary substitution when he permits the
properties subject of the usufruct to be sold upon mutual agreement of
the usufructuaries and the naked owners."

a P0.15 por accion 1,620.90

8.
CONSTITUTIONAL LAW; DECLARATION OF PRINCIPLES;
PROHIBITION AGAINST ACQUISITION OF LANDS BY ALIENS; DOES
NOT COVER USUFRUCT. Notwithstanding the opinion that the
Constitutional provision which enables aliens to acquire private lands
does not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless, the usufruct in favor of
an alien is upheld, because the same, albeit a real right, does not vest
title to land in the usufructuary and it is the vesting of title to land in favor
of aliens which is proscribed by the Constitution.

DECISION

ABAD SANTOS, J p:
The main issue in this appeal is the manner of partitioning the testate
estate of Jose Eugenio Ramirez among the principal beneficiaries,
namely: his widow Marcelle Demoron de Ramirez; his two
grandnephews Roberto and Jorge Ramirez; and his companion Wanda
de Wrobleski.
The task is not trouble-free because the widow Marcelle is a French
who lives in Paris, while the companion Wanda is an Austrian who lives
in Spain. Moreover, the testator provided for substitutions. llcd
Jose Eugenio Ramirez, a Filipino national, died in Spain on December
11, 1964, with only his widow as compulsory heir. His will was admitted
to probate by the Court of First Instance of Manila, Branch X, on July 27,
1965. Maria Luisa Palacios was appointed administratrix of the estate.
In due time she submitted an inventory of the estate as follows:
"INVENTARIO
Una sexta parte (1/6) pro-indivisa de un terreno,
con su mejoras y edificaciones, situado en la
Escolta, Manila

P500,000.00

Una sexta parte (1/6) pro-indivisa de dos parcelas


de terreno situadas en Antipolo, Rizal 658.34
Cuatrocientos noventa y un (491) acciones de la 'Central

8,347.00

Diez mil ochocientos seiz (10,806) acciones de la


'Central Luzon Milling Co.,' disuelta y en liquidacion,

Cuenta de Ahorros en el Philippine Trust Co.

2,350.73

TOTAL

P512,976.97

MENOS:
Deuda al Banco de las Islas Pilipinas, garantizada
con prenda de las acciones de La Carlota

P5,000.00

VALOR LIQUIDO P507,976.97"


The testamentary dispositions are as follows:
"A. En nuda propiedad, a D. Roberto y D. Jorge Ramirez, ambos
menores de edad, residentes en Manila, I. F., calle Wright, No. 1818,
Malate, hijos de su sobrino D. Jose Ma. Ramirez, con sustitucion vulgar
a favor de sus respectivos descendientes, y, en su defecto, con
sustitucion vulgar reciproca entre ambos.
"El precedente legado en nuda propiedad de la participacion indivisa de
la finca Santa-Cruz Building, lo ordena el testador a favor de los
legatarios nombrados, en atencion a que dicha propiedad fue creacion
del querido padre del otorgante y por ser aquellos continuadores del
apellido Ramirez.
"B. Y en usufructo a saber:
a. En cuanto a una tercera parte, a favor de la esposa del testador,
Da. Marcelle Ramirez, domiciliada en IE PECO, calle del General
Gallieni, No. 33, Seine, Francia, con sustitucion vulgar u fideicomisaria
a favor de Da. Wanda de Wrobleski, de Palma de Mallorca, Son Rapia,
Avenida de los Reyes 13,
b. Y en cuanto a las dos terceras partes restantes, a favor de la
nombrado Da. Wanda de Wrobleski, con sustitucion vulgar y
fideicomisaria, a saber:
"En cuanto a la mitad de dichas dos terceras partes, a favor de D. Juan
Pablo Jankowski, de Son Rapia, Palma de Mallorca; y en cuanto a la
mitad restante, a favor de su sobrino, D. Horace V. Ramirez, San Luis
Building, Florida St. Ermita, Manila, I.F.
"A pesar de las sustituciones fideicomisarias precedentemente
ordinadas, las usufructuarias nombradas conjuntamente con los nudo
propietarios, podran en cualquier momento vender a tercero los bienes
objeto delegado, sin intervencion alguna de los titulares
fideicomisarios."
On June 23, 1966, the administratrix submitted a project of partition as
follows: the property of the deceased is to be divided into two parts. One
part shall go to the widow "en pleno dominio" in satisfaction of her
Natural Resources || Full Text Cases Prelim Exam || 47

legitime; the other part or "free portion" shall go to Jorge and Roberto
Ramirez "en nuda propriedad." Furthermore, one third (1/3) of the free
portion is charged with the widow's usufruct and the remaining two-third
(2/3) with a usufruct in favor of Wanda.
Jorge and Roberto opposed the project of partition on the grounds: (a)
that the provisions for vulgar substitution in favor of Wanda de Wrobleski
with respect to the widow's usufruct and in favor of Juan Pablo
Jankowski and Horacio V. Ramirez, with respect to Wanda's usufruct
are invalid because of the first heirs (Marcelle and Wanda) survived the
testator; (b) that the provisions for fideicommissary substitutions are
also invalid because the first heirs are not related to the second heirs or
substitutes within the first degree, as provided in Article 863 of the Civil
Code; (c) that the grant of a usufruct over real property in the Philippines
in favor of Wanda de Wrobleski, who is an alien, violates Section 5,
Article XIII of the Philippine Constitution; and that (d) the proposed
partition of the testator's interest in the Santa Cruz (Escolta) Building
between the widow Marcelle, and the appellants, violates the testator's
express will to give this property to them. Nonetheless, the lower court
approved the project of partition in its order dated May 3, 1967. It is this
order which Jorge and Roberto have appealed to this Court.
1.

The widow's legitime.

The appellant's do not question the legality of giving Marcelle one-half of


the estate in full ownership. They admit that the testator's dispositions
impaired his widow's legitime. Indeed, under Art. 900 of the Civil Code
"If the only survivor is the widow or widower, she or he shall be entitled
to one-half of the hereditary estate." And since Marcelle alone survived
the deceased, she is entitled to one-half of his estate over which he
could impose no burden, encumbrance, condition or substitution of any
kind whatsoever. (Art. 904, par. 2, Civil Code). cdrep
It is the one-third usufruct over the free portion which the appellants
question and justifiably so. It appears that the court a quo approved the
usufruct in favor of Marcelle because the testament provides for a
usufruct in her favor of one-third of the estate. The court a quo erred for
Marcelle who is entitled to one-half of the estate "en pleno dominio" as
her legitime and which is more than what she is given under the will is
not entitled to have any additional share in the estate. To give Marcelle
more than her legitime will run counter to the testator's intention for as
stated above his dispositions even impaired her legitime and tended to
favor Wanda.
2.

The substitutions.

It may be useful to recall that "Substitution is the appointment of another


heir so that he may enter into the inheritance in default of the heir
originally instituted." (Art. 857, Civil Code.) And that there are several
kinds of substitutions, namely: simple or common, brief or compendious,
reciprocal, and fideicommissary. (Art. 858, Civil Code.) According to
Tolentino, "Although the Code enumerates four classes, there are really
only two principal classes of substitutions: the simple and the
fideicommissary. The others are merely variations of these two." (III Civil
Code, p. 185 [1973]).
The simple or vulgar is that provided in Art. 859 of the Civil Code which
reads:
"ART. 859.
The testator may designate one or more persons to
substitute the heir or heirs instituted in case such heir or heirs should die

before him, or should not wish, or should be incapacitated to accept the


inheritance.
"A simple substitution, without a statement of the cases to which it
refers, shall comprise the three mentioned in the preceding paragraph,
unless the testator has otherwise provided."
The fideicommissary substitution is described in the Civil Code as
follows:
"ART. 863.
A fideicommissary substitution by virtue of which the
fiduciary or first heir instituted is entrusted with the obligation to preserve
and to transmit to a second heir the whole or part of inheritance, shall be
valid and shall take effect, provided such substitution does not go
beyond one degree from the heir originally instituted, and provided
further that the fiduciary or first heir and the second heir are living at
time of the death of the testator."
It will be noted that the testator provided for a vulgar substitution in
respect of the legacies of Roberto and Jorge Ramirez, the appellants,
thus: "con sustitucion vulgar a favor de sus respectivos descendientes,
y, en su defecto, con substitucion vulgar reciproca entre ambos." The
appellants do not question the legality of the substitution so provided.
The appellants question the "sustitucion vulgar y fideicomisaria a favor
de Da. Wanda de Wrobleski" in connection with the one-third usufruct
over the estate given to the widow Marcelle. However, this question has
become moot because as We have ruled above, the widow is not
entitled to any usufruct.
The appellants also question the "sustitucion vulgar y fideicomisaria" in
connection with Wanda's usufruct over two-thirds of the estate in favor
of Juan Pablo Jankowski and Horace V. Ramirez.
They allege that the substitution in its vulgar aspect is void because
Wanda survived the testator or stated differently because she did not
predecease the testator. But dying before the testator is not the only
case for vulgar substitution for it also includes refusal or incapacity to
accept the inheritance as provided in Art. 859 of the Civil Code, supra.
Hence, the vulgar substitution is valid.
As regards the substitution in its fideicommissary aspect, the appellants
are correct in their claim that it is void for the following reasons:
(a)
The substitutes (Juan Pablo Jankowski and Horace V.
Ramirez) are not related to Wanda, the heir originally instituted. Art. 863
of the Civil Code validates a fideicommissary substitution "provided such
substitution does not go beyond one degree from the heir originally
instituted."
What is meant by "one degree" from the first heir is explained by
Tolentino as follows:
"Scaevola, Maura, and Traviesas construe 'degree' as designation,
substitution, or transmission. The Supreme Court of Spain has
decidedly adopted this construction. From this point of view, there can
be only one transmission or substitution, and the substitute need not be
related to the first heir. Manresa, Morell, and Sanchez Roman, however,
construe the word 'degree' as generation, and the present Code has
obviously followed this interpretation, by providing that the substitution
shall not go beyond one degree 'from the heir originally instituted.' The
Code thus clearly indicates that the second heir must be related to and
be one generation from the first heir.
Natural Resources || Full Text Cases Prelim Exam || 48

"From this, it follows that the fideicommissary can only be either a child
or a parent of the first heir. These are the only relatives who are one
generation or degree from the fiduciary." (Op. cit., pp. 193-194.).
(b)
There is no absolute duty imposed on Wanda to transmit the
usufruct to the substitutes as required by Arts. 865 and 867 of the Civil
Code. In fact, the appellee admits "that the testator contradicts the
establishment of a fideicommissary substitution when he permits the
properties subject of the usufruct to be sold upon mutual agreement of
the usufructuaries and the naked owners." (Brief, p. 26).
3.

DIONISIO RELLOSA, petitioner, vs. GAW CHEE HUN, respondent.

Macapagal & Eusebio and Conrado Manalansan for petitioner.


Alafriz & Alafriz for respondent.
Quisumbing, Sycip & Quisumbing as amici curi.

The usufruct of Wanda.

The appellants claim that the usufruct over real properties of the estate
in favor of Wanda is void because it violates the constitutional
prohibition against the acquisition of lands by aliens.
The 1935 Constitution which is controlling provides as follows:
"SEC. 5. Save in cases of hereditary succession, no private agricultural
land shall be transferred or assigned except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain in
the Philippines." (Art. XIII.).
The court a quo upheld the validity of the usufruct given to Wanda on
the ground that the Constitution covers not only succession by operation
of law but also testamentary succession. We are of the opinion that the
Constitutional provision which enables aliens to acquire private lands
does not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless. Any alien would be able
to circumvent the prohibition by paying money to a Philippine landowner
in exchange for a devise of a piece of land.
This opinion notwithstanding, We uphold the usufruct in favor of Wanda
because a usufruct, albeit a real right, does not vest title to the land in
the usufructuary and it is the vesting of title to land in favor of aliens
which is proscribed by the Constitution. LexLib
IN VIEW OF THE FOREGOING, the estate of Jose Eugenio Ramirez is
hereby ordered distributed as follows:
One-half (1/2) thereof to his widow as her legitime;
One-half (1/2) thereof which is the free portion to Roberto and Jorge
Ramirez in naked ownership and the usufruct to Wanda de Wrobleski
with a simple substitution in favor of Juan Pablo Jankowski and Horace
V. Ramirez.
The distribution herein ordered supersedes that of the court a quo. No
special pronouncement as to costs.
SO ORDERED.

SYLLABUS
1.
CONSTITUTIONAL LAW; SALE OF LAND DURING
JAPANESE MILITARY OCCUPATION, NULL AND VOID; VENDOR
CANNOT RECOVER PROPERTY, CONTRACT HAVING BEEN
ENTITLED IN "PARI DELICTO". he phrase "private agricultural land"
employed in the Constitution of September 4, 1943 of the then Republic
of the Philippines includes residential lands (Krivenko vs. Register of
Deeds, 42 Off. Gaz., 471). But the vendor in a sale of residential land
executed in February 1944 cannot have the sale declared null and void
nor rescind the contract and recover the property, because both vendor
and vendee are in pari delicto (Cabauatan vs. Uy Hoo, L-2207, January
23, 1951; Bough and Bough vs. Cantiveros and Hanopol, 40 Phil., 210,
216).
2.
D.; ID.; ID.; EXCEPTIONS TO "PARI DELICTO" DOCTRINE,
EXPLAINED. The doctrine of pari delicto is subject to one important
limitation, namely, "whenever public policy is considered as advanced
by allowing either party to sue for relief against the transaction" (3
Pomeroy's Equity Jurisprudence, 5th ed., p. 733). But not all contracts
which are illegal for being opposed to public policy come under this
limitation. The cases in which this limitation may apply, only "include the
class of contracts which are intrinsically contrary to public policy,
contracts in which the illegality itself consists in their opposition to public
policy, and any other species of illegal contracts in which, from their
particular circumstances, incidental and collateral motives of public
policy require relief." Examples of this class of contracts are usurious
contracts, marriage-brokerage contracts and gambling contracts. (Idem,
pp. 735-737.) A sale of residential land executed during the Japanese
military occupation wherein both parties were in pari delicto does not
come under this exception because it is not intrinsically contrary to
public policy, nor one where the illegality itself consists in its opposition
to public policy. It is illegal not because it is against public policy but
because it is against the Constitution.

DECISION

G.R. No. L-1411 September 29, 1953


DIONISIO RELLOSA vs. GAW CHEE HUN

BAUTISTA ANGELO, J p:

093 Phil 827

This is a petition for review of a decision of the Court of Appeals holding


that the sale in question is valid and, even if it were invalid, plaintiff
cannot maintain the action under the principle of pari delicto.

EN BANC

On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun a parcel


of land, together with the house erected thereon, situated in the City of

[G.R. No. L-1411. September 29, 1953.]

Natural Resources || Full Text Cases Prelim Exam || 49

Manila, Philippines, for the sum of P25,000. The vendor remained in


possession of the property under a contract of lease entered into on the
same date between the same parties. Alleging that the sale was
executed subject to the condition that the vendee, being a Chinese
citizen, would obtain the approval of the Japanese Military
Administration in accordance with (seirei) No. 6 issued on April 2, 1943,
by the Japanese authorities, and said approval has not been obtained,
and that, even if said requirement were met, the sale would at all events
be void under article XIII, section 5, of our Constitution, the vendor
instituted the present action in the Court of First Instance of Manila
seeking the annulment of the sale as well as the lease covering the land
and the house above mentioned, and praying that, once the sale and
the lease are declared null and void, the vendee be ordered to return to
vendor the duplicate of the title covering the property, and be restrained
from in any way dispossessing the latter of said property.
Defendant answered the complaint setting up as special defense that
the sale referred to in the complaint was absolute and unconditional and
was in every respect valid and binding between the parties, it being not
contrary to law, morals and public order, and that plaintiff is guilty of
estoppel in that, by having executed a deed of lease over the property,
he thereby recognized the title of defendant to that property.
Issues having been joined, and the requisite evidence presented by
both parties, the court declared both the sale and the lease valid and
binding and dismissed the complaint. The court likewise ordered plaintiff
to turn over the property to defendant and to pay a rental of P50 a
month from August 1, 1945 until the property has been actually
delivered. As this decision was affirmed in toto by the Court of Appeals,
plaintiff sued out the present petition for review.
One of the issues raised by petitioner refers to the validity of Seirei No.
6 issued on April 2, 1943 by the Japanese authorities which prohibits an
alien from acquiring any private land not agricultural in nature during the
occupation unless the necessary approval is obtained from the Director
General of the Japanese Military Administration. Petitioner contends that
the sale in question cannot have any validity under the above military
directive in view of the failure of respondent to obtain the requisite
approval and it was error for the Court of Appeals to declare said
directive without any binding effect because the occupation government
could not have issued it under article 43 of the Hague Regulations which
command that laws that are municipal in character of an occupied
territory should be respected and cannot be ignored unless prevented
by military necessity.
We do not believe it necessary to consider now the question relative to
the validity of Seirei No. 6 of the Japanese Military Administration for the
simple reason that in our opinion the law that should govern the
particular transaction is not the above directive but the Constitution
adopted by the then Republic of the Philippines on September 4, 1943,
it appearing that the aforesaid transaction was executed on February 2,
1944. Said Constitution, in its article VIII, section 5, provides that "no
private agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to acquire or hold
lands of the public domain in the Philippines", which provisions are
similar to those contained in our present Constitution. As to whether the
phrase "private agricultural land" employed in said Constitution includes
residential lands, as the one involved herein, there can be no doubt
because said phrase has already been interpreted in the affirmative
sense by this court in the recent case of Krivenko vs. Register of Deeds,
79 Phil. 461, wherein this court held that "under the Constitution aliens
may not acquire private or public agricultural lands, including residential

lands." This matter has been once more submitted to the court for
deliberation, but the ruling was reaffirmed. This ruling fully disposes of
the question touching on the validity of the sale of the property herein
involved.
The sale in question having been entered into in violation of the
Constitution, the next question to be determined is, can petitioner have
the sale declared null and void and recover the property considering the
effect of the law governing rescission of contracts? Our answer must of
necessity be in the negative following the doctrine laid down in the case
of Trinidad Gonzaga de Cabauatan, et al. vs. Uy Hoo, et al., 88 Phil.
103, wherein we made the following pronouncement: "We can,
therefore, say that even if the plaintiffs can still invoke the Constitution,
or the doctrine in the Krivenko Case, to set aside the sale in question,
they are now prevented from doing so if their purpose is to recover the
lands that they have voluntarily parted with, because of their guilty
knowledge that what they were doing was in violation of the
Constitution. They cannot escape this conclusion because they are
presumed to know the law. As this court well said: 'A party to an illegal
contract cannot come into a court of law and ask to have his illegal
objects carried out. The law will not aid either party to an illegal
agreement; it leaves the parties where it finds them.' The rule is
expressed in the maxims: 'Ex dolo malo non oritur actio,' and 'In pari
delicto potior est conditio defendentis.' (Bough and Bough vs.
Cantiveros and Hanopol, 40 Phil., 210, 216.)"
The doctrine above adverted to is the one known as In Pari Delicto. This
is well known not only in this jurisdiction but also in the United States
where common law prevails. In the latter jurisdiction, the doctrine is
stated thus: "The proposition is universal that no action arises, in equity
or at law, from an illegal contract; no suit can be maintained for its
specific performance, or to recover the property agreed to be sold or
delivered, or the money agreed to be paid, or damages for its violation.
The rule has sometimes been laid down as though it were equally
universal, that where the parties are in pari delicto, no affirmative relief
of any kind will be given to one against the other." (Pomeroy's Equity
Jurisprudence, Vol. 3, 5th ed., p. 728.)
It is true that this doctrine is subject to one important limitation, namely,
"whenever public policy is considered as advanced by allowing either
party to sue for relief against the transaction" (idem, p. 733). But not all
contracts which are illegal because opposed to public policy come under
this limitation. The cases in which this limitation may apply only "include
the class of contracts which are intrinsically contrary to public policy,
contracts in which the illegality itself consists in their opposition to public
policy, and any other species of illegal contracts in which, from their
particular circumstances, incidental and collateral motives of public
policy require relief." Examples of this class of contracts are usurious
contracts, marriage-brokerage contracts and gambling contracts. (Idem.
pp. 735-737.)
In our opinion, the contract in question does not come under this
exception because it is not intrinsically contrary to public policy, nor one
where the illegality itself consists in its opposition to public policy. It is
illegal not because it is against public policy but because it is against the
Constitution. Nor may it be contended that to apply the doctrine of pari
delicto would be tantamount to contravening the fundamental policy
embodied in the constitutional prohibition in that it would allow an alien
to remain in the illegal possession of the land, because in this case the
remedy is lodged elsewhere. To adopt the contrary view would be
merely to benefit petitioner and not to enhance public interest.
Natural Resources || Full Text Cases Prelim Exam || 50

The danger foreseen by counsel in the application of the doctrine above


adverted to is more apparent than real. If we go deeper in the analysis
of our situation we would not fail to see that the best policy would be for
Congress to approve a law laying down the policy and the procedure to
be followed in connection with transactions affected by our doctrine in
the Krivenko case. We hope that this should be done without much
delay. And even if this legislation be not forthcoming in the near future,
we do not believe that public interest would suffer thereby if only our
executive department would follow a more militant policy in the
conservation of our natural resources as or dained by our Constitution.
And we say so because there are at present two ways by which this
situation may be remedied, to wit, (1) action for reversion, and (2)
escheat to the state. An action for reversion is slightly different from
escheat proceeding, but in its effects they are the same. They only differ
in procedure. Escheat proceedings may be instituted as a consequence
of a violation of article XIII, section 5 of our Constitution, which prohibits
transfers of private agricultural lands to aliens, whereas an action for
reversion is expressly authorized by the Public Land Act (sections 122,
123, and 124 of Commonwealth Act No. 141).
In the United States, as almost everywhere else, the doctrine which
imputes to the sovereign or to the government the ownership of all lands
and makes such sovereign or government the original source of private
titles, is well recognized (42 Am. Jur., 785). This doctrine, which was
expressly affirmed in Lawrence vs. Garduo, G. R. No. 16542, and
which underlies all titles in the Philippines, (See Ventura, Land
Registration and Mortgages, 2nd ed., pp. 2-3) has been enshrined in our
Constitution (article XIII). The doctrine regarding the course of all titles
being the same here as in the United States, it would seem that if
escheat lies against aliens holding lands in those states of the Union
where common law prevails or where similar constitutional or statutory
prohibitions exist, no cogent reason is perceived why similar
proceedings may not be instituted in this jurisdiction.
"Escheat is an incident or attribute of sovereignty, and rests on the
principle of the ultimate ownership by the state of all property within its
jurisdiction.' (30 C.J.S., 1164.)
". . . America escheats belong universally to the state or some
corporation thereof as the ultimate proprietor of land within its
Jurisdiction." (19 Am. Jur., 382.)
"An escheat is nothing more or less than the reversion of property to the
state, which takes place when the title fails." (Delany vs. State, 42 N. D.,
630, 174 N.W., 290, quoted in footnote 6, 19 Am. Jur., 381.)
"As applied to the right of the state to lands purchased by an alien, it
would more properly be termed a 'forfeiture' at common law." (19 Am.
Jur., 381.)
"In modern law escheat denotes a falling of the estate into the general
property of the state because the tenant is an alien or because he has
died intestate without lawful heirs to take his estate by succession, or
because of some other disability to take or hold property imposed by
law." (19 Am. Jur.,
With regard to an action for reversion, the following sections of
Commonwealth Act No. 141 are pertinent:
"SEC. 122.
No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,

corporations, associations, or partnerships who may acquire lands of


the public domain under this Act or to corporations organized in the
Philippines authorized therefor by their charters."
"SEC. 123.
No land originally acquired in any manner under the
provisions of any previous Act, ordinance, royal decree, royal order, or
any other provision of law formerly in force in the Philippines with regard
to public lands, terrenos baldios y realenqos, or lands of any other
denomination that were actually or presumptively of the public domain
or by royal grant or in any other form, nor any permanent improvement
on such land, shall be encumbered, alienated, or conveyed, except to
persons, corporations or associations who may acquire land of the
public domain under this Act or to corporate bodies organized in the
Philippines whose charters authorize them to do so: Provided, however,
That this prohibition shall not be applicable to the conveyance or
acquisition by reason of hereditary succession duly acknowledged and
legalized by competent courts; Provided, further, That in the event of the
ownership of the lands and improvements mentioned in this section and
in the last preceding section being transferred by judicial decree to
persons, corporations or associations not legally capacitated to acquire
the same under the provisions of this Act, such persons, corporation, or
associations shall be obliged to alienate said lands or improvements to
others so capacitated within the precise period of five years; otherwise,
such property shall revert to the Government."
"SEC. 124.
Any acquisition, conveyance, alienation, transfer, or
other contract made or executed in violation of any of the provisions of
sections one hundred and eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two, and one
hundred and twenty-three of this Act shall be unlawful and null and void
from its execution and shall produce the effect of annulling and
cancelling the grant, title, patent, or permit originally issued, recognized
or confirmed, actually or presumptively, and cause the reversion of the
property and its improvements to the State."
Note that the last quoted provision declared any prohibited conveyance
not only unlawful but null and void ab initio. More important yet, it
expressly provides that such conveyances will produce "the effect of
annulling and cancelling the grant, title, patent, or permit, originally
issued, recognized of confirmed, actually or presumptively", and of
causing "the reversion of the property and its improvements to the
State." The reversion would seem to be but a consequence of the
annulment and cancellation of the original grant or title, and this is so for
in the event of such annulment or cancellation no one else could
legitimately claim the property except its original owner or grantor the
state.
We repeat. There are two ways now open to our government whereby it
could implement the doctrine of this Court in the Krivenko case thereby
putting in force and carrying to its logical conclusion the mandate of our
Constitution. By following either of these remedies, or by approving an
implementary law as above suggested, we can enforce the fundamental
policy of our Constitution regarding our natural resources without doing
violence to the principle of pari delicto. With these remedies open to us,
we see no justifiable reason for pursuing the extreme unusual remedy
now vehemently urged by the amici curiae.
In view of the foregoing, we hold that the sale in question is null and
void, but plaintiff is barred from taking the present action under the
principle of pari delicto.

Natural Resources || Full Text Cases Prelim Exam || 51

The decision appealed from is hereby affirmed without pronouncement


as to costs.

prohibited in order to avoid interference with the possession by the


court. But the sale made by an heir of his share in an inheritance,
subject to the result of the pending administration, in no wise stands in
the way of such administration." (Jakosalem vs. Esfols, 73 Phil. 628).

EN BANC

3.
CONTRACTS; CONSIDERATION; EFFECT OF. The fact
that no money was paid at the time of the execution of the document
does not rule out the possibility that the considerations were paid some
other time as the contracts in fact recite. What is more, the
consideration need not pass from one party to the other at the time a
contract is executed because the promise of one is the consideration of
the other.

[G.R. No. L-17587. September 12, 1967.]

PHILIPPINE BANKING CORPORATION, representing the estate of


JUSTINA SANTOS Y CANON FAUSTINO, deceased, plaintiff-appellant,
vs. LUI SHE, in her own behalf and as administratrix of the intestate of
Wong Heng, deceased, defendant-appellant.

Nicanor S. Sison for plaintiff-appellant.


Ozaeta, Gibbs & Ozaeta for defendants-appellants.

SYLLABUS
1.
LEASE CONTRACT; RESOLUTORY CONDITION; OPTION,
VALIDITY OF. Plaintiff-appellant assails the validity of the lease
agreement for want of mutuality. Paragraph 5 of the lease contract
states that the lessee may at any time withdraw from the agreement. It
is claimed that this stipulation offends article 1308 of the Civil Code.
Held: Art. 1256 (now 1308) of the Civil Code in our opinion creates no
impediment to the insertion in a contract of a resolutory condition
permitting the cancellation of the contract by one of the parties. Such a
stipulation, as can be readily seen, does not make either the validity or
the fulfillment of the contract upon the will of the party to whom is
conceded the privilege of cancellation; for where the contracting parties
have agreed that such option shall exist, the exercise of the option is as
much in the fulfillment of the contract as any other act which may have
been the subject of agreement. Indeed, the cancellation of a contract in
accordance with conditions agreed upon beforehand is fulfillment (Taylor
vs. Tang Pao, 43 Phil. 873).
In the case of Singson Encarnacion vs. Baldomar, 77 Phil. 470, the
lessees argued that they could occupy the premises as long as they
paid the rent. This is of course untenable, for as this Court said, "If this
defense were to be allowed, solong as defendants elected to continue
the lease by continuing the payment of the rentals, the owner would
never be able to discontinue it; conversely, although the owner should
desire the lease to continue, the lessee could effectively thwart his
purpose if he should prefer to terminate the contract by the simple
expedient of stopping payment of the rentals." Here in contrast, the right
of the lessee to continue the lease or to terminate it is so circumscribed
by the term of the contract that it cannot be said that the continuance of
the lease depends upon his will. At any rate, even if no term had been
fixed in the agreement, this case would at most justify the fixing of a
period but not the annulment of the contract.
2.
PURCHASE AND SALE; CUSTODIA LEGIS; SALE, VALIDITY
OF. That the land could not ordinarily be levied upon while in custodia
legis does not mean that one of the heirs may not sell the right, interest
or participation which he had or might have in the land under
administration. The ordinary execution of property in custodia legis is

4.
ID.; ALIENS; CONSTITUTIONAL PROHIBITION,
CIRCUMVENTION OF. Where a scheme to circumvent the
Constitutional prohibition against the transfer of lands to aliens is readily
revealed as the purpose for the contracts then the illicit purpose
becomes the illegal cause rendering the contracts void. Thus, if an alien
is given not only a lease of, but also an option to buy, a piece of land by
virtue of which the Filipino owner cannot sell or otherwise dispose of his
property, this to last for 50 years, then it becomes clear that the
arrangement is a virtual transfer of ownership whereby the owner
divests himself in stages not only of the right to enjoy the land (jus
possidendi jus utendi, just fruendi and jus abutendi) but also of the right
to dispose of it (jus disponendi) rights the sum total of which make up
ownership. If this can be done, then the Constitutional ban against alien
landholding in the Philippines, as announced in Krivenko vs. Register of
Deeds, is indeed in grave peril.
5.
ID.; ID.; ID.; ID.; REMEDY OF PARTIES. It does not follow
that because the parties are in pari delicto they will be left where they
are without relief. Article 1416 of the Civil Code provides as an
exception to the rule in pari delicto that "when the agreement is not
illegal per se but is merely prohibited, and the prohibition by law is
designed for the protection of the plaintiff, he may, if public policy is
thereby enhanced, recover what he has paid or delivered."
6.
CONSTITUTIONAL LAW; TRANSFER OR ASSIGNMENT OF
PRIVATE AGRICULTURAL LAND; REASON FOR PROVISION. The
constitutional provision that 'save in cases of hereditary succession, no
private agricultural land shall be transferred or assigned except
individuals, corporations, or associations qualified to acquire or hold
lands of the public domain in the Philippines (Art. XIII, Sec. 5) is an
expression of public policy to conserve lands for the Filipinos.
FERNANDO, J., concurring:
1.
CONSTITUTIONAL LAW; LANDS OF THE PUBLIC DOMAIN;
PROHIBITION AGAINST ALIEN LANDHOLDING; RECOVERY OF
PROPERTY IN SALES ENTERED INTO PRIOR TO THE KRIVENKO
DECISION NOT AVAILABLE IN VIEW OF THE PARE DELICTO
DOCTRINE. The doctrine as announced in the case of Rellosa v.
Gaw Chee Hun, 93 Phil. 827 is that while the sale by a Filipino-vendor
to an alien-vendee of a residential or a commercial lot is null and void as
held in the Krivenko case, still the Filipino-vendor has no right to recover
under a civil law doctrine, the parties being in pari delicto. The only
remedy to prevent this continuing violation of the Constitution which the
decision impliedly sanctions by allowing the alien vendees to retain the
lots in question is either escheat or reversion. Thus: "By following either
of these remedies, or by approving an implementary law as above
suggested, we can enforce the fundamental policy of our Constitution
Natural Resources || Full Text Cases Prelim Exam || 52

regarding our natural resources without doing violence to the principle of


pari delicto.
2.
ID.; ID: ID.; ID.; APPLICATION OF THE PARI DELICTO RULE
IN PREVIOUS CASES TOO EXTREME. Since the sales in question
took place prior to the Krivenko decision, at a time when the assumption
could be honestly entertained that there was no constitutional prohibition
against the sale of commercial or residential lots by Filipino-vendor to
alien-vendee, in the absence of a definite decision by the Supreme
Court, it would not be doing violence to reason to free them from the
imputation of evading the Constitution. For evidently evasion implies at
the very least knowledge of what is being evaded. The new Civil Code
expressly provides: "Mistakes upon a doubtful or difficult question of law
may be the basis of good faith." (Art. 526, par. 3). According to the
Rellosa opinion, both parties are equally guilty of evasion of the
Constitution, based on the broader principle that "both parties are
presumed to know the law." This statement that the sales entered into
prior to the Krivenko decision were at that time already vitiated by a
guilty knowledge of the parties may be too extreme a view. It appears to
ignore a postulate of a constitutional system, wherein the words of the
Constitution acquire meaning through Supreme Court adjudication.
3.
ID.; ID.; ID.; ID.; ID.; RESTORATION BY ALIEN-VENDEE OF
PROPERTY TO FILIPINO-VENDOR MAY BE ALLOWED UPON
RESTITUTION OF PURCHASE PRICE. Alien-vendee is
incapacitated or disqualified to acquire and hold real estate. That
incapacity and that disqualification should date from the adoption of the
Constitution on November 15, 1935. That in capacity and that
disqualification, however, was made known to Filipino-vendor and to
alien-vendee only upon the promulgation of the Krivenko decision on
November 15, 1947 Alien-vendee therefore, cannot be allowed to
continue owning and exercising acts of ownership over said property,
when it is clearly included within the constitutional prohibition. Alienvendee should thus be made to restore the property with its fruits and
rents to Filipino-vendor, its previous owner, if it could be shown that in
the utmost good faith, he transferred his title over the same to alienvendee, upon restitution of the purchase price of course.
4.
ID.; ID.; ID.; ID.; ID.; ID.; REACQUISITION OF PROPERTY
SOLD THE BETTER REMEDY IN CONSONANCE WITH THE
DICTATES OF JUSTICE AND EQUITY. The Constitution frowns upon
the title remaining in the alien-vendees. Restoration of the property upon
payment of price received by Filipino vendor or its reasonable
equivalent as fixed by the court is the answer. To give the constitutional
provision full force and effect, in consonance with the dictates of equity
and justice, the restoration to Filipino-vendor upon the payment of a
price fixed by the court is the better remedy. He thought he could
transfer the property to an alien and did so. After the Krivenko case had
made clear that he had no right to sell nor an alien-vendee to purchase
the property in question, the obvious solution would be for him to
reacquire the same. That way the Constitution would be given, as it
ought to be given, respect and deference.

DECISION

CASTRO, J p:

Justina Santos y Canon Faustino and her sister Lorenza were the
owners in common of a piece of land in Manila. This parcel, with an area
of 2,582.30 square meters, is located on Rizal Avenue and opens into
Florentino Torres street at the back and Katubusan street on one side.
In it are two residential houses with entrance on Florentino Torres street
and the Hen Wah Restaurant with entrance on Rizal Avenue. The
sisters lived in one of the houses, while Wong Heng, a Chinese, lived
with his family in the restaurant. Wong had been a long-time lessee of a
portion of the property, having a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the owner of the entire
property as her sister died with no other heir. Then already well
advanced in years, being at the time 90 years old, blind, crippled and an
invalid, she was left with no other relative to live with. Her only
companions in the house were her 17 dogs and 8 maids. Her otherwise
already existence was brightened now and then by the visits of Wong's
four children who had become the joy of her life. Wong's himself was the
trusted man to whom she delivered various amounts for safekeeping,
including rentals from her property at the corner of Ongpin and Salazar
streets and the rentals which Wong himself paid as lessee of a part of
the Rizal Avenue property. Wong also look care of the payment, in her
behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of
maids and security guard, and her household expenses.
"In grateful acknowledgment of the personal services of the Lessee to
her," Justina Santos executed on November 15, 1957, a contract of
lease (Plff Exh. 3) in favor of Wong, covering the portion then already
leased to him and another portion fronting Florentino Torres street. The
lease was for 50 years, although the lessee was given the right to
withdraw at any time from the agreement; the monthly rental was
P3,120. The contract covered an area of 1,124 square meters. Ten days
later (November 25), the contract was amended (Plff Exh. 4) so as to
make it cover the entire property, including the portion on which the
house of Justina Santos stood, at an additional monthly rental of P360.
For his part Wong undertook to pay, out of the rental due from him, an
amount not exceeding P1,000 a month for the food of her dogs and the
salaries of her maids.
On December 21 she executed contract (Plff Exh. 7) giving Wong the
option to buy the leased premises for P120,000, payable within ten
years at a monthly installment of P1,000. The option, written in Tagalog,
imposed on him the obligation to pay for the food of the dogs and the
salaries of the maids in her household, the charge not to exceed P1,800
a month. The option was conditioned on his obtaining Philippine
citizenship, a petition for which was then pending in the Court of First
Instance of Rizal. It appears, however, that this application for
naturalization was withdrawn when it was discovered that he was not a
resident of Rizal. On October 28, 1958 she filed a petition to adopt him
and his children on the erroneous belief that adoption would confer on
them Philippine citizenship. The error was discovered and the
proceedings were abandoned.
On November 18, 1958 she executed two other contracts, one (Plff Exh.
5) extending the term of the lease to 99 years, and another (Plff Exh. 6)
fixing the term of the option at 50 years. Both contracts are written in
Tagalog.
In two wills executed on August 24 and 29, 1959 (Def. Exhs. 285 &
279), she bade her legatees to respect the contracts she had entered
into with Wong, but in a codicil (Plff Exh. 17) of a later date (November
4, 1959) she appears to have a change of heart. Claiming that the
various contracts were made by her because of machinations and
Natural Resources || Full Text Cases Prelim Exam || 53

inducements practised by him, she now directed her executor to secure


the annulment of the contracts.
On November 18 the present action was filed in the Court of First
Instance of Manila. The complaint alleged that the contracts were
obtained by Wong "through fraud, misrepresentation, inequitable
conduct, undue influence and abuse of confidence and trust of and (by)
taking advantage of the helplessness of the plaintiff and were made to
circumvent the constitutional prohibition prohibiting aliens from acquiring
lands in the Philippines and also of the Philippine Naturalization Laws."
The court was asked to direct the Register of Deeds of Manila to cancel
the registration of the contracts and to order Wong to pay Justina
Santos the additional rent of P3,120 a month from November 15, 1957
on the allegation that the reasonable rental of the leased premises was
P6,240 a month.
In his answer, Wong admitted that he enjoyed her trust and confidence
as proof of which he volunteered the information that, in addition to the
sum of P3,000 which he said she had delivered to him for safekeeping,
another sum of P22,000 had been deposited in a joint account which he
had with one of her maids. But he denied having taken advantage of her
trust in order to secure the execution of the contracts in question. As
counterclaim he sought the recovery of P9,210.49 which he said she
owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for
the filing of an amended complaint. Thus on June 9, 1960, aside from
the nullity of the contracts, the collection of various amounts allegedly
delivered on different occasions was sought. These amounts and the
dates of their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec.
1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in
his answer). An accounting of the rentals from the Ongpin and Rizal
Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the
Juvenile and Domestic Relations Court, the Security Bank & Trust Co.
was appointed guardian of the properties of Justina Santos, while
Ephraim G. Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and
voluntarily entered into by the parties. He likewise disclaimed knowledge
of the sum of P33,724.27, admitted receipt of P7,344.42 and P10,000,
but contended that these amounts had been spent in accordance with
the instructions of Justina Santos; he expressed readiness to comply
with any order that the court might make with respect to the sum of
P22,000 in the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as
follows:
"[A]ll the documents mentioned in the first cause of action, with the
exception of the first which is the lease contract of 15 November 1957,
are declared null and void; Wong Heng is condemned to pay unto
plaintiff thru guardian of her property the sum of P55,554.25 with legal
interest from the date of the filing of the amended complaint; he is also
ordered to pay the sum of P3,120.00 for every month of his occupation
as lessee under the document of lease herein sustained, from 15
November 1959, and the moneys he had consigned since then shall be
imputed to that; costs against Wong Heng."
From this judgment both parties appealed directly to this Court. After the
case was submitted for decision, both parties died, Wong Heng on

October 21, 1962 and Justina Santos on December 28, 1964. Wong
was substituted by his wife, Lui She, the other defendant in this case,
While Justina Santos was substituted by the Philippine Banking
Corporation.
Justina Santos maintained now reiterated by the Philippine Banking
Corporation that the lease contract (Plff Exh. 3) should have been
annulled along with the four other contracts (Plff Exhs. 4-7) because it
lacks mutuality; because it included a portion which, at the time, was in
custodia legis, because the contract was obtained in violation of the
fiduciary relations of the parties; because her consent was obtained
through undue influence, fraud and misrepresentation; and because the
leas contract, like the rest of the contracts, is absolutely simulated.
Paragraph 5 of the lease contract states that "The lessee may at any
time withdraw from this agreement." It is claimed that this stipulation
offends article 1308 of the Civil Code which provides that "the contract
must bind both contracting parties; its validity or compliance cannot be
left to the will of one of them."
We have had occasion to delineate the scope and application of article
1308 in the early case of Taylor vs. Uy Tiong Piao. 1 We said in the
case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no
impediment to the insertion in a contract for personal service of a
resolutory condition permitting the cancellation of the contract by one of
the parties. Such a stipulation, as can be readily seen, does not make
either the validity or the fulfillment of the contract dependent upon the
will of the party to whom is conceded the privilege of cancellation; for
where the contracting parties have agreed that such option shall exist,
the exercise of the option is as much in the fulfillment of the contract as
any other act which may have been the subject of agreement, Indeed,
the cancellation of a contract in accordance with conditions agreed upon
beforehand is fulfillment. 2
And so it was held in Melencio vs. Dy Tiao Lay 3 that a "provision in a
lease contract that the lessee at any time before he erected any building
on the land, might rescind the lease, can hardly be regarded as a
violation of article 1256 [now art. 1308] of the Civil Code."
The case of Singson Encarnacion vs. Baldomar 4 cannot be cited in
support of the claim of want of mutuality, because of a difference in
factual setting. In that case, the lessees argued that they could occupy
the premises as long as they paid the rent. This is of course untenable,
for as this Court said "If this defense were to be allowed, so long as
defendants elected to continue the lease by continuing the payment of
the rentals, the owner would never be able to discontinue it; conversely,
although the owner should desire the lease to continue the lessees
could effectively thwart his purpose if they should prefer to terminate the
contract by the simple expedient of stopping payment of the rentals."
Here, in contrast, the right of the lessee to continue the lease or to
terminate it is so circumscribed by the term of the contract that it cannot
be said that the continuance of the lease depends upon his will. At any
rate, even if no term had been fixed in the agreement, this case would at
most justify the fixing of a period 5 but not the annulment of the contract.
Nor is there merit in the claim that as the portion of the property formerly
owned by the sister of Justina Santos was still in the process of
settlement in the probate court at the time it was leased, the lease is
invalid as to such portion. Justina Santos became the owner of the
entire property upon the death of her sister Lorenza on September 22,
Natural Resources || Full Text Cases Prelim Exam || 54

1957 by force of article 777 of the Civil Code. Hence, when she leased
the property on November 15, she did so already as owner thereof. As
this Court explained in upholding the sale made by an heir of a property
under judicial administration:
"That the land could not ordinarily be levied upon while in custodia legis
does not mean that one of the heirs may not sell the right, interest or
participation which he has or might have in the lands under
administration. The ordinary execution of property in custodia legis is
prohibited in order to avoid interference with the possession by the
court. But the sale made by an heir of his share in an inheritance,
subject to the result of the pending administration, in no wise stands in
the way of such administration." 6
It is next contended that the lease contract was obtained by Wong in
violation of his fiduciary relationship with Justina Santos, contrary to
article 1646, in relation to article 1941 of the Civil Code, which
disqualifies "agents (from leasing) the property whose administration or
sale may have been entrusted to them." But Wong was never an agent
of Justina Santos. The relationship of the parties, although admittedly
close and confidential, did not amount to an agency so as to bring the
case within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life
and affairs that the contracts express not her will but only his. Counsel
for Justina Santos cites the testimony of Atty. Tomas S. Yumol who said
that he prepared the lease contract on the basis of the data given to him
by Wong and that she told him that "what ever Mr. Wong wants must be
followed." 7
The testimony of Atty. Yumol cannot be read out of context in order to
warrant a finding that Wong practically dictated the terms of the
contract. What his witness said was:
"Q
Did you explain carefully to your client, Doa Justina the
contents of this document before she signed it?
"A
I explained to her each and every one of these conditions and
I also told her these conditions were quite onerous for her, I don't really
know if I have expressed my opinion, but I told her that we would rather
not execute any contract anymore, but to hold it as it was before, on a
verbal month to month contract of lease.
"Q
But, she did not follow your advice, and she went with the
contract just the same?
"A

She agreed first . . .

"Q

Agreed what?

"A
Agreed with my objections that it is really onerous and I was
really right, but after that, I was called again by her and she told me to
follow the wishes of Mr. Wong Heng.
xxx

xxx

xxx

"Q
So, as far as consent is concerned, you were satisfied that
this document was perfectly proper?
xxx

xxx

xxx

"A.
Your Honor, if I have to express my personal opinion, I would
say she is not, because, as I said before, she told me "Whatever Mr.
Wong wants must be followed.'" 8
Wong might indeed have supplied the data which Yumol embodied in
the lease contract, but to say this is not to detract from the binding force
of the contract. For the contract was fully explained to Justina Santos by
her own lawyer. One incident, related by the same witness, makes clear
that she voluntarily consented to the lease contract. This witness said
that the original term fixed for the lease was 99 years but that as he
doubted the validity of a lease to an for that length of time, he tried to
persuade her to enter instead into a lease on a month-to-month basis.
She was, however, firm and unyielding. Instead of heeding the advice of
the lawyer, she ordered him, "Just follow Mr. Wong Heng." 9 Recounting
the incident Atty. Yumol declared on cross examination:
"Considering her age, ninety (90) years old at the time and her
condition, she is a wealthy woman, it is just natural when she said 'This
is what I want and this will be done.' In Particular reference to this
contract of lease, when I said 'This is not proper,' she said "You just
go ahead, you prepare that, I am the owner, and if there is any illegality,
I am the only one that can question the illegality." 10
Atty. Yumol testified that she signed the lease contract in the presence
of her close friend. Hermenegilda Lao, and her maid, Natividad Luna,
who was constantly by her side. 11 Any of them could have testified on
the undue influence that Wong supposedly wielded over Justina Santos,
but neither of them was presented as a witness. The truth is that even
after giving his client time to think the matter over, the lawyer could not
make her change her mind. This persuaded the lower court to uphold
the validity of the lease contract against the claim that it was procured
through undue influence.
Indeed, the charge of undue influence in this case rests on a mere
inference 12 drawn from the fact that Justina Santos could not read (as
she was blind) and did not understand the English language in which
the contract is written, but that inference has been overcome by her own
evidence.
Nor is there merit in the claim that her consent to the lease contract, as
well as to the rest of the contracts in question, was given out of a
mistaken sense of gratitude to Wong who, she was made to believe,
had saved her and her sister from a fire that destroyed their house
during the liberation of Manila. For while a witness claimed that the
sisters were saved by other persons (the brothers Edilberto and Mariano
Sta. Ana) 13 it was Justina Santos herself who according to her own
witness, Benjamin C. Alonzo, said "very emphatically" that she and her
sister would have perished in the fire had it been for Wong. 14 Hence
the recital in the deed of conditional option (Plff Exh. 7) that "[I]tong si
Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa
halos ay tiyak na kamatayan," and the equally emphatic avowal of
gratitude in the lease contract (Plff Exh. 3).
As it was with the lease contract (Plff Exh. 3), so it was with the rest of
the contracts (Plff Exhs. 4-7) the consent of Justina Santos was given
freely and voluntarily. As Atty. Alonzo, testifying for her, said:
"[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres
and/or both. When we had conferences they used to tell me what the
documents should contain. But, as I said, I would always ask the old
woman about them and invariably the old woman used to tell me: 'That's
okay. It's all right." 15
Natural Resources || Full Text Cases Prelim Exam || 55

But the lower court set aside all the contracts, with the exception of the
lease contract of November 15, 1957, on the ground that they are
contrary to the expressed wish of Justina Santos and that their
considerations are fictitious. Wong stated in his deposition that he did
not pay P360 a month for the additional premises leased to him
because she did not want him to, but the trial court did not believe him.
Neither did it believe his statement that he paid P1,000 as consideration
for each of the contracts (namely, the option to buy the leased premises,
the extension of the lease to 99 years, and the fixing of the term of the
option at 50 years), but that the amount was returned to him by her for
safekeeping. Instead, the court relied on the testimony of Atty. Alonzo in
reaching the conclusion that the contracts are void for want of
consideration.
Atty. Alonzo declared that he saw no money paid at the execution of the
documents, but his negative testimony does not rule out the possibility
that the consideration were paid at some other time as the contracts in
fact recite. What is more, the consideration need not pass from one
party to the other at the time a contract is executed because the
promise of one is the consideration for the other. 16
With respect to the lower court's finding that in all probability Justina
Santos could not have intended to part with her property while she was
alive nor even to lease it in its entirety as her house was built on it,
suffice it to quote the testimony of her own witness and lawyer who
prepared the contracts (Plff Exhs. 4-7) in question, Atty. Alonzo:
"The ambition of the old woman before her death, according to her
revelation to me, was to see to it that these properties be enjoyed, even
to own them, by Wong Heng because Doa Justina told me that she did
not have any relatives, near or far, and she considered Wong Heng as a
son and his children her grandchildren; especially her consolation in life
was when she would hear the children reciting prayers in Tagalog." 17
"She was very emphatic in the care of the seventeen (17) dogs and of
the maids who helped her much, and she told me to see to it that no one
could disturb Wong Heng from those properties. That is why we though
of the ninety-nine (99) years lease; we thought of the adoption, believing
that thru adoption Wong Heng might acquire Filipino citizenship; being
the adopted child of Filipino citizen." 18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid.
For the testimony just quoted while dispelling doubt as to the intention of
Justina Santos, at the same time gives the clue to what we view as a
scheme to circumvent the Constitutional prohibition against the transfer
of land of aliens. "The illicit purpose then becomes the illegal cause 19
rendering the contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but
considered collectively, they reveal an insidious pattern to subvert by
indirection what the Constitution directly prohibits. To be sure, a lease to
an alien for a reasonable period is valid. So is an option giving an alien
the right to buy real property on condition that he is granted Philippine
citizenship. As this said in Krivenko vs. Register of Deeds: 20
"[A]liens are not completely excluded by the Constitution form the use of
lands for residential purposes. Since their residence in the Philippines is
temporary, they may be granted temporary rights such as a lease
contract which is not forbidden by the Constitution. Should they desire to
remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire."

But if an alien is given not only a lease of, but also an option to buy, a
piece of land, by virtue of which the Filipino owner cannot sell or
otherwise dispose of his property, 21 this to last for 50 years, then it
becomes clear that the arrangement is a virtual transfer of ownership
whereby the owner divests himself in stages not only of the right to
enjoy the land (jus possidendi, jus utendi, jus fruendi and jus abutendi)
but also of the right to dispose of it (jus disponendi) rights the sum
total of which make up ownership. It is just as if today the possession is
transferred, tomorrow, the use, the next day, the disposition, and so on,
until ultimately all the rights of which ownership is made up are
consolidated in an alien. And yet this is just exactly what the parties in
this case did within this pace of one year, with the result that Justina
Santos' ownership of her property was reduced to a hollow concept. If
this can be done, then the Constitutional ban against alien landholding
in the Philippines, as announced in Krivenko vs. Register of Deeds, 22
is indeed in grave peril.
It does not follow from what has been said, however, that because the
parties are in pari delicto they will be left where they are, without relief.
For one thing, the original parties who were guilty of a violation of the
fundamental charter have died and have since been substituted by their
administrators to whom it would be unjust to impute their guilt. 23 For
another thing, and is not only cogent but also important, article 1416 of
the Civil Code provides, as an exception to the rule on pari delicto, that
'When the agreement, is not illegal per se but is merely prohibited and
the prohibition by law is designed for the protection of the plaintiff, he
may, if public policy is thereby enhanced, recover what he has paid or
delivered." The Constitutional provision that "Save in cases of hereditary
succession, no private agricultural land shall be transferred or assigned
except to individuals, corporations, or associations qualified to acquire
or hold lands of the public domain in the Philippines 24 is an expression
of public policy to conserve lands for the Filipinos. As this Court said in
Krivenko:
"It is well to note at this juncture that in the present case we have no
choice. We are construing the Constitution as it is and not as we may
desire it to be. Perhaps the effect of our construction is to preclude
aliens admitted freely into the Philippines from owning sites where they
may build their homes. But if this is the solemn mandate of the
Constitution we will not attempt to compromise it even in the name of
amity or equity. . . .
"For all the foregoing, we hold that under the Constitution aliens may not
acquire private or public agricultural lands, including residential lands
and, accordingly, judgment is affirmed, without costs." 25
That policy would be defeated and its continued violation sanctioned if,
instead of setting the contracts aside and ordering the restoration of the
land to the estate of the deceased Justina Santos, this Court should
apply the general rule of pari delicto. To the extent that our ruling in this
case conflicts with that laid down in Rellosa vs. Gaw Chee Hun 26 and
subsequent similar cases, the latter must be considered as pro tanto
qualified.
The claim for increased rentals and attorney's fees made in behalf of
Justina Santos, must be denied for lack of merit.
And what of the various amounts which Wong received in trust from
her? It appears that he kept two classes of accounts, one pertaining to
amounts which she entrusted to him from to time, and another
pertaining to rentals from the Ongpin property and from the Rizal
Avenue property, which he himself was leasing.
Natural Resources || Full Text Cases Prelim Exam || 56

With respect to the first account, the evidence shows that he received
P33,724.27 on November 8, 1957 (Plff. Exh. 16); P7,354.42 on
December 1, 1957 (Plff. Exh. 13); 10,000 on December 6, 1957 (Plff.
Exh. 14); and P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total
of P70,007.19. He claims, however, that he settled his accounts and that
last amount of P18,928.50 was in fact payment to him of what in the
liquidation was found to be due to him.
He made disbursements from this account to discharge Justina Santos'
obligations for taxes, attorneys' fees, funeral services and security guard
services, but the checks (Def. Exhs. 247-278) drawn by him for this
purpose amount to only P38,442.84 27 Besides, if he had really settled
his accounts with her on August 26, 1959, we cannot understand why
he still had P22,000 in the bank and P3,000 in his possession, or a total
of P25,000. In his answer, he offered to pay this amount if the court so
directed him. On these two grounds, therefore, his claim of liquidation
and settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts),
there is a difference of P31,564 which, added to the amount of P25,000,
leaves a balance of P56,564.35 28 in favor of Justina Santos.
As to the second account, the evidence shows that the monthly income
from the Ongpin property until its sale in July, 1959 was P1,000 and that
from the Rizal Avenue property, of which Wong was the lessee, was
P3,120. Against this account the household expenses and
disbursements for the care of the 17 dogs and the salaries of the 8
maids of Justina Santos were charged. This account is contained in a
notebook (Def. Exh. 6) which shows a balance of P9,310.49 in favor of
Wong. But it is claimed that the rental from both the Ongpin and Rizal
Avenue properties was more than enough to pay for her monthly
expenses and that, as a matter of fact, there should be a balance in her
favor. The lower court did not allow either party to recover against the
other. Said court:
"[T]he documents bear the earmarks of genuineness; the trouble is that
they were made only be Francisco Wong and Antonia Matias, nickname Toning, which was the way she signed the loose sheets, and
there is no clear proof that Doa Justina had authorized these two to act
for her in such liquidation; on the contrary if the result of that was a
deficit as alleged and sought to be there shown, of P9,210.49, that was
not what Doa Justina apparently understood for as the court
understands her statement to the Honorable Judge of the Juvenile Court
. . . the reason why she preferred to stay in her home was because
there she did not incur in any debts . . . this being the case, .. the Court
will not adjudicate in favor of Wong Heng on his counterclaim; on the
other hand, while it is claimed that the expenses were much less than
the rentals and there in fact should be a superavit, . . . this Court must
concede that daily expenses are not easy to compute, for this reason,
the Court faced with the choice of the two alternatives will choose the
middle course which after all is permitted by the rules of proof, Sec. 69,
Rule 123 for in the ordinary course of things, a person will live within his
income so that the conclusion of the Court will be that there is neither
deficit nor superavit and will let the matter rest here."
Both parties on appeal reiterate their respective claims but we agree
with the lower court that both claims should be denied. Aside from the
reasons given by the court, We think that the claim of Justina Santos
totalling P37,235 as rentals due to her after deducting various
expenses, should be rejected s the evidence is none too clear about the
amounts spent by Wong for food, 29 masses 30 salaries of of her maid.
31 His claim for P9,210.49 must likewise be rejected as his averment of

liquidation is belied by his own admission that even as late as 1960 he


still had P22,000 in the bank and P3,000 in his possession.
ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled
and set aside; the land subject-matter of the contracts is ordered
returned to the estate of Justina Santos as represented by the Philippine
Banking Corporation; Wong Heng (as substituted by the defendantappellant Lui She) is ordered to pay the Philippine Banking Corporation
the sum of P56,567.35, with legal interest from the date of the filing of
the amended complaint; and the amounts consigned in court by Wong
Heng shall be applied to the payment of rental from November 15, 1959
until the premises shall have been vacated by his heirs. Costs against
the defendant-appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P.,
Zaldivar, Sanchez and Angeles, JJ., concur.

Separate Opinions

FERNANDO, J., concurring:


With the able and well-written opinion of Justice Castro, I am in full
agreement. The exposition of the facts leaves nothing to be desired and
the statement of the law notable for its comprehensiveness and clarity.
This concurring opinion has been written solely to express what I
consider to be the unfortunate and deplorable consequences of applying
the pari delicto concept, as was, to my mind, indiscriminately done, to
alien landholding declared illegal under the Krivenko doctrine in some
past decisions.
It is to remembered that in Krivenko v. The Register of Deeds of Manila,
1 this Court over strong dissents held that residential and commercial
lots may be considered agricultural within the meaning of the
constitutional provision prohibiting the transfer of any private agricultural
land to individuals, corporations or associations not qualified to acquire
or hold lands of the public domain in the Philippines save in cases of
hereditary succession.
That provision of the Constitution took effect on November 15, 1935
when the Commonwealth Government was established. The
interpretation as set forth in the Krivenko decision was only handed
down on November 15, 1947. Prior to that date there were many who
were of the opinion that the phrase agricultural land should be construed
strictly and not be made to cover residential and commercial lots. Acting
on that belief, several transactions were entered into transferring such
lots to alien vendees by Filipino vendors.
After the Krivenko decision, some Filipino vendors sought recovery of
the lots in question on the ground that the sales were null and void. No
definite ruling was made by this Court until September of 1953, when on
the 29th of said month, Rellosa v. Gaw Chee Hun, 2 Bautista v. Uy
Isabelo, 3 Talento v. Makiki, 4 Caoile v. Chiao Peng 5 were decided.
Of the four decisions in September 1953, the most extensive discussion
of the question is found in Rellosa v. Gaw Chee Hun, the opinion being
penned by retired Justice Bautista Angelo with the concurrence only of
one Justice, Justice Labrador, also retired. Former Chief Justice Paras
as well as the former Justices Tuason and Montemayor concurred in the
result. The necessary sixth vote for a decision was given by the then
Natural Resources || Full Text Cases Prelim Exam || 57

Justice Bengzon, who had a two- paragraph concurring opinion


disagreeing with the main opinion as to the force to be accorded to the
two cases, 6 therein cited. There were two dissenting opinions by former
Justices Pablo and Alex Reyes.
The doctrine as announced in the Rellosa case is that while the sale by
a Filipino-vendor to an alien-vendee of a residential or a commercial lot
is null and void as held in the Krivenko case, still the Filipino-vendor has
no right to recover under a civil law doctrine, the parties being in pari
delicto. The only remedy to prevent this continuing violation of the
Constitution which the decision impliedly sanctions by allowing the alien
vendees to retain the lots in question is either escheat or reversion.
Thus "By following either of these remedies, or by approving an
implementary law as above suggested, we can enforce the fundamental
policy of our Constitution regarding our natural resources without doing
violence to the principle of pari delicto." 7
Were the parties really in pari delicto? Had the sale by and between
Filipino-vendor and alien-vendee occurred after the decision in the
Krivenko case, then the above view would be correct that both Filipinovendor and alien-vendee could not be considered as innocent parties
within the contemplation of the law. Both of them should be held equally
guilty of evasion of the Constitution.
Since, however, the sales in question took place prior to the Krivenko
decision, at a time when the assumption could be honestly entertained
that there was no constitutional prohibition against the sale of
commercial or residential lots by Filipino-vendor to alien- vendee, in the
absence of a definite decision by the Supreme Court, it would not be
doing violence to reason to free them from the imputation of evading the
Constitution. For evidently evasion implies at the very least knowledge
of what is being evaded. The new Civil Code expressly provides:
"Mistakes upon a doubtful or difficult question of law may be the basis of
good faith." 8
According to the Rellosa opinion, both parties are equally guilty of
evasion of the Constitution, based on the broader principle that "both
parties are presumed to know the law." This statement that the sales
entered into prior to the Krivenko decision were at that time already
vitiated by a guilty knowledge of the parties may be too extreme a view.
It appears to ignore a postulate of a constitutional system, wherein the
words of the Constitution acquire meaning through Supreme Court
adjudication.
Reference may be made by way of analogy to a decision adjudging a
statute void. Under the orthodox theory of constitutional law, the act
having been found unconstitutional was not a law, conferred no rights,
imposed no duty, afforded no protection. 9 As pointed out by former
Chief Justice Hughes though in Chicot County Drainage District v.
Baxter State Bank: 10 "It is quite clear, however, that such broad
statements as to the effect of a determination of unconstitutionality must
be taken with qualifications. The actual existence of a statute, prior to
such a determination, is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of subsequent ruling as to invalidity
may have to be considered in various aspects, with respect to
particular relations, individual and corporate, and particular conduct,
private and official. Questions of rights claimed to have become vested,
of status, of prior determinations deemed to have finality and acted upon
accordingly, or public policy in the light of the nature both of the statute
and of its previous application, demand examination."

After the Krivenko decision, there is no doubt that continued possession


by alien-vendee of property acquired before its promulgation is violative
of the Constitution. It is as if an act granting aliens the right to acquire
residential and commercial lots were annulled by the Supreme Court as
contrary to the provision of the Constitution prohibiting aliens from
acquiring private agricultural land.
The question then as now, therefore, was and is how to divest the alien
of such property rights on terms equitable to both parties. That question
should be justly resolved in accordance with the mandates of the
Constitution not by a wholesale condemnation of both parties for
entering into a contract at a time when there was no ban as yet arising
from the Krivenko decision, which could not have been anticipated.
Unfortunately, under the Rellosa case, it was assumed that parties,
being in pari delicto, would be left in the situation in which they were,
neither being in a position to seek judicial redress.
Would it not have been more in consonance with the Constitution, if
instead the decision compelled the restitution of the property by the
alien-vendee to the Filipino-vendor? The Krivenko decision held in clear,
explicit and unambigous language that: "We are deciding the instant
case under section 5 of Article XIII of the Constitution which is more
comprehensive and more absolute in the sense that it prohibits the
transfer to aliens of any private agricultural land including residential
land whatever its origin might have been. . . This prohibition [Rep. Act
No. 133] makes no distinction between private lands that are strictly
agricultural and private lands that are residential or commercial. The
prohibition embraces the sale of private lands of any kind in favor of
aliens, which is again a clear implementation and a legislative
interpretation of the constitutional prohibition. . . It is well to note at this
juncture that in the present case we have no choice. We are construing
the Constitution as it is and not as we may desire it to be. Perhaps the
effect of our construction is to preclude aliens, admitted freely into the
Philippines, from owning sites where they may build their homes. But if
this is the solemn mandate of the Constitution, we will not attempt to
compromise it even in the name of amity or equity." 11
Alien-vendee is therefore incapacitated or disqualified to acquire and
hold real estate. That incapacity and that disqualification should date
from the adoption of the Constitution on November 15, 1935. That
incapacity and that disqualification, however, was made known to
Filipino-vendor and to alien-vendee only upon the promulgation of the
Krivenko decision on November 15, 1947. Alien- vendee therefore,
cannot be allowed to continue owning and exercising acts of ownership
over said property, when it is clearly included within the Constitutional
prohibition. Alien-vendee should thus be made to restore the property
with its fruits and rents to Filipino- vendor its previous owner, if it could
be shown that in the utmost good faith, he transferred his title over the
same to alien-vendee, upon restitution of the purchase price of course.
The Constitution bars alien-vendees from owning the property in
question. By dismissing those suits, the lots remained in alien hands.
Notwithstanding the solution of escheat or reversion offered, they are
still at the moment of writing, for the most part in alien hands. There
have been after almost twenty years no proceedings for escheat or
reversion.
Yet it is clear that an alien-vendee cannot consistently with the
constitutional provision, as interpreted in the Krivenko decision, continue
owning the exercising acts of ownership over the real estate in question.
It ought to follow then, if such a continuing violation of the fundamental
law is to be put an end to, that the Filipino- vendor, who in good faith
Natural Resources || Full Text Cases Prelim Exam || 58

entered into a contract with an incapacitated person, transferring


ownership of a piece of land after the Constitution went into full force
and effect, should, in the light of the ruling in the Krivenko case, be
restored to the possession and ownership thereof, where he has filed
the appropriate case or proceeding. Any other construction would defeat
the ends and purposes not only of this particular provision in question
but the rest of the Constitution itself.
The Constitution frowns upon the title remaining in the alien- vendees.
Restoration of the property upon payment of price received by Filipino
vendor or its reasonable equivalent as fixed by the court is the answer.
To give the constitutional provision full force and effect, in consonance
with the dictates of equity and justice the restoration to Filipino-vendor
upon the payment of a price fixed by the court is the better remedy. He
thought he could transfer the property to an alien and did so. After the
Krivenko case had made clear that he had no right to sell nor an alienvendee to purchase the property in question, the obvious solution would
be for him to reacquire the same. That way the Constitution would be
given, as it ought to be given, respect and deference.
It may be said that it is too late at this stage to hope for such a solution,
the Rellosa opinion, although originally concurred in by only one justice,
being too firmly inbedded. The writer however sees a welcome sign in
the adoption by the Court in this case of the concurring opinion of the
then Justice, later Chief Justice, Bengzon. Had it been followed then,
the problem would not he still with us now. 'Fortunately, it is never too
late not even in constitutional adjudication.
G.R. No. L-30523 April 22, 1977
LEE BUN TING, ET AL. vs. JOSE A. ALIGAEN, ET AL.

SECOND DIVISION
[G.R. No. L-30523. April 22, 1977.]

LEE BUN TING and ANG CHIA, petitioners, vs. HON. JOSE A.
ALIGAEN, Judge of the Court of First Instance of Capiz, 11th Judicial
District, Branch II; ATTY. ANTONIO D. AMOSIN, as court-appointed
Receiver; RAFAEL A. DINGLASAN, FRANCISCO A. DINGLASAN,
CARMEN A. DINGLASAN, RAMON A. DINGLASAN, LOURDES A.
DINGLASAN, MERCEDES A. DINGLASAN, CONCEPCION A.
DINGLASAN, MARIANO A. DINGLASAN, JOSE A. DINGLASAN,
LORETO A. DINGLASAN, RIZAL A. DINGLASAN, JIMMY DINGLASAN,
and JESSE DINGLASAN, respondents.

Norberto J. Quisumbing and Humberto V. Quisumbing for petitioners.


Rafael A. Dinglasan for respondents.

DECISION

Petition for certiorari to annul the Orders of respondent court dated


October 10, 1968 and November 9, 1968 and other related Orders in
Civil Case No. V-3064, entitled "Rafael A. Dinglasan, et al. vs. Lee Bun
Ting, et al.", with prayer for the issuance of a writ of preliminary
injunction. The antecedent facts are as follows:
On June 27, 1956, this Court rendered judgment in G. R. No. L-5996,
entitled "Rafel Dinglasan, et al. vs. Lee Bun Ting, et al." 1 In that case,
We found that:
"In the month of March, 1936, petitioners-appellants sold to Lee Liong, a
Chinese citizen, predecessor in interest of respondents-appellees, a
parcel of land situated on the corner of Roxas Avenue and Pavia Street,
Capiz (now Roxas City), Capiz, designated as lot 398 and covered by
Original Certificate of Title No. 3389. The cost was P6,000.00 and soon
after the sale Lee Liong constructed thereon a concrete building which
he used as a place for his lumber business and in part as residence for
himself and family. Petitioners had contended that the sale was a
conditional sale, or one with the right of repurchase during the last years
of a ten-year period, but booth the trial court and the Court of Appeals
found that the sale was an absolute one. Another contention of the
petitioners-appellants is that the sale is null and void as it was made in
violation of the provision contained in the Constitution (Article XIII,
section 5), but the Court of Appeals found that the purchaser was not
aware of the constitutional prohibition while petitioners-appellants were
because the negotiations for the sale were conducted with the
knowledge and direct intervention of Judge Rafael Dinglasan, one of the
plaintiffs, who was at that time an assistant attorney in the Department
of Justice. . . ."(p. 429).
In reply to the contention of appellants therein that as the sale to Lee
Liong is prohibited by the Constitution, title to the land did not pass to
said alien because the sale did not produce any juridical effect in his
favor, and that the constitutional prohibition should be deemed selfexecuting in character in order to give effect to the constitutional
mandate, this Court said:
". . . In answer we state that granting the sale to be null and void and
can not give title to the vendee, it does not necessarily follow therefrom
that the title remained in the vendor, who had also violated the
constitutional prohibition, or that he (vendor) has the right to recover the
title of which he has divested himself by his act in ignoring the
prohibition. In such contingency another principle of law sets in to bar to
equally guilty vendor from recovering the title which he had voluntarily
conveyed for a consideration, that of pari delicto. We have applied this
principle as a bar to the present action in a series of cases, thus:
xxx

xxx

xxx

'We can, therefore, say that even if the plaintiffs can still invoke the
Constitution, or the doctrine in the Krivenko case, to set aside the sale in
question, they are now prevented from doing so if their purpose is to
recover the lands that they have voluntarily parted with, because of their
guilty knowledge that what they were doing was in violation of the
Constitution. They cannot escape the law. As this Court well said: A
party to an illegal contract cannot come into a court of law and ask to
have his illegal objects carried out. The law will not aid either party to an
illegal agreement; it leaves the parties where it finds them. The rule is
expressed in the maxims: 'Ex dolo malo non oritur actio', and 'In pari
delicto potior est conditio defendentis.'. . . . '

ANTONIO, J p:
Natural Resources || Full Text Cases Prelim Exam || 59

"It is not necessary for us to re-examine the doctrine laid down by us in


the above cases. We must add in justification of the adoption of the
doctrine that the scope of our power and authority is to interpret the law
merely, leaving to the proper co-ordinate body the function of laying
down the policy that should be followed in relation to conveyances in
violation of the constitutional prohibition and in implementing said policy.
The situation of these prohibited conveyances is not different from that
of homestead sold within five years from and after the issuance of the
patent, (Section 118, C.A. 141, otherwise known as the Public Land
Law), for which situation the legislature has adopted the policy, not of
returning the homestead sold to the original homesteader, but of
forfeiting the homestead and returning it to the public domain again
subject to disposition in accordance with law. (Section 124, Id.).
"The doctrine of in pari delicto bars petitioners-appellants from
recovering the title to the property in question and renders unnecessary
the consideration of the other arguments presented in appellants' brief.
"There is one other cause why petitioners' remedy cannot be
entertained, that is the prescription of the action. As the sale occurred in
March, 1936, more than ten years had already elapsed from the time
the cause of action accrued when the action was filed (1948)." (pp. 431432).
Noting the absence of policy governing lands sold to aliens in violation
of the constitutional prohibition, We further said:
"We take this occasion to call the attention of the legislature to the
absence of a law or policy on sales in violation of the Constitution; this
Court would have filled the void were we not aware of the fact that the
matter falls beyond the scope of our authority and properly belongs to a
co-ordinate power." (P. 432).
Accordingly, the petition in the foregoing case was denied.
Twelve (12) years later, on the basis of the decision of this Court in
Philippine Banking Corporation vs. Lui She, 2 private respondents
Rafael A. Dinglasan, et al. filed a complaint on July 1, 1968 for the
recovery of the same parcel of land subject matter of the first-mentioned
case. Said complaint was docketed as Civil Case No. V-3064 before
respondent court. Private respondents (plaintiffs before the court a quo)
reiterated their contention that the sale made to Lee Liong, predecessorin-interest of petitioners (defendants a quo), was null and void for being
violative of the Constitution, and prayed that plaintiffs be declared as the
rightful and legal owners of the property in question; that defendants be
ordered to vacate the premises, to surrender possession thereof to
plaintiffs and to receive the amount of P6,000.00 from the plaintiffs as
restitution of the purchase price; and that defendants be ordered to pay
damages to the plaintiffs in the amount of P2,000.000 a month from the
time of the filing of the complaint until the property is returned to them,
as well as the costs of suit.
A motion to dismiss, dated September 23, 1968, was filed by
defendants-petitioners on the ground of res judicata, alleging that the
decision in the case of "Rafael Dinglasan, et al. vs. Lee Bun Ting, et al.",
supra, promulgated on June 27, 1956, has definitely settled the issues
between the parties. An opposition thereto was filed by plaintiffs, with
the averment that the decision in the prior case "cannot be pleaded in
bar of the instant action because of new or additional facts or grounds of
recovery and because of change of law or jurisprudence." 3 In support
of the change in Jurisprudence asserted, the decision of this Court in
Philippine Banking Corporation vs. Lui She, supra, was advanced, upon

the contention that said decision warrants a reopening of the case and
the return of the parcel of land involved to the plaintiffs. A reply to the
opposition was filed by defendants by registered mail on October 16,
1968, alleging that the decision in Philippine Banking Corporation vs. Lui
She, which was promulgated in 1967, "cannot affect the outcome of the
instant case. Said 1967 decision cannot be applied to the instant case
where there had been already a final and conclusive determination
some twelve years earlier. While a doctrine laid down in previous cases
may be overruled, the previous cases themselves cannot thereby be
reopened. The doctrine may be changed for future cases but it cannot
reach back into the past and overturn finally settled cases." 4
However, on October 10, 1968, before the filing of the above reply,
respondent court had issued an Order denying the motion to dismiss.
The court said:
"A copy of the decision rendered in the case of Rafael Dinglasan, et al.
vs. Lee Bun Ting, et al., G. R. No. L-5996 is attached to the motion to
dismiss.
"In that case, the Supreme Court ruled that both parties violated the
constitutional prohibition (Article XIII, sec. 9) for the purchaser was an
alien and prohibited to acquire residential lot while the vendors, Filipino
citizens, can not also recover the property for having violated the
constitutional prohibition, under the principle of pari delicto. The vendee
cannot own the property, neither can the vendor recover what he sold.
"To fill the void, the Supreme Court pointed out that the coordinate body
Congress of the Philippines can pass remedial legislation.
"But Congress failed to act. Neither was there any proceeding after
almost twenty years for escheat or reversion instituted by the Office of
the Solicitor General after the Krivenko decision which prohibits the
transfer to aliens of any private agricultural land including residential
lands whatever its origin might have been.
"But the Supreme Court took a decisive step and in bold relief dispelled
darkening clouds in the case of Philippine Banking Corporations vs. Lui
She, promulgated September 12, 1967, . . . .
"The concurring opinion of Justice Fernando is very enlightening and
elucidating. . . . .
"The Court wishes to refer to the concurring opinion of Justice Fernando
as an additional authority supporting the herein order.
"PREMISES CONSIDERED, the Court finds the motion to dismiss
unmeritorious and holds that the same he as it is hereby DENIED." 5
A motion for reconsideration of the foregoing Order was filed by
defendants, alleging that their reply to plaintiffs' opposition to the motion
to dismiss was not even considered by the court a quo because the
Order was issued before said reply could reach the court. Further, it was
asserted that the Philippine Banking Corporation vs. Lui She case had
the effect of annulling and setting aside only the contracts subject matter
thereof "and no other contracts, certainly not contracts outside the
issues in said judgment as that in the instant case", and of ordering the
return only of the lands involved in said case, and not the land subject of
the present action. Moreover, it was averred that "Nowhere in the
majority opinion nor in the concurring opinion in said decision of
Philippine Banking Corporation vs. Lui She does there appear any
statement which would have the effect of reopening and changing
previously adjudicated rights of parties and finally settled cases" and
Natural Resources || Full Text Cases Prelim Exam || 60

that the principle enunciated in such case "should apply after, not on or
before, September 12, 1967". The motion for reconsideration was found
to have not been well taken and, consequently, was denied by
respondent court on November 9, 1968. Defendants were given ten (10)
days from receipt of the Order within which to file their answer to the
complaint, which defendants complied with.
Defendants' answer, dated December 5, 1968, contained the following
allegations, among others:
"(a)
The sale of the parcel of land involved was made in 1935
before the promulgation of the Constitution.
"(b)
Said conveyance was an absolute sale, not subject to any
right or repurchase . . .
"(c)
Upon the purchase of the said parcel of land by the deceased
Lee Liong, he and defendant Ang Chia constructed thereon a camarin
for lumber business and later a two-storey five door accessoria with an
assessed valuation of P35,000.00, which said improvements were
destroyed during the Japanese entry into the municipality of Capiz in
April 1942; thereafter, the same improvements were rebuilt.
"(d)
In July 1947, the said Lee Liong being already deceased,
defendants as his legal heirs entered into an extrajudicial settlement of
said property, there being no creditors or other heirs, and by virtue of
said extrajudicial settlement, approximately two-thirds of said property
was adjudicated to defendant Ang Chia and Lee Bing Hoo as co-owners
and the remaining one-third to defendant Lee Bun Ting.
"(e)
The deceased Lee Liong and defendants have been declaring
and paying real estate taxes on the said property since 1935 and up to
the present year.
xxx

xxx

xxx

In addition to the foregoing, defendants reiterated their defense of res


judicata, on the basis of the decision of the Supreme Court of June 27,
1956. It was, therefore, prayed that the complaint be dismissed, with
counterclaim for attorney's fees and expenses of litigation or, in case of
adverse judgment, that plaintiffs be ordered to pay the reasonable
equivalent of the value of the property at the time of the restoration, plus
reimbursement of improvements thereon.
A reply and answer to the counterclaim, dated December 14, 1968, was
filed by plaintiffs. On March 31, 1969, respondent court issued an Order
denying a motion filed by petitioners for simplification of the issues and
for the striking out from the records of the declaration of Rafael
Dinglasan under the Survivorship Disqualification Rule. A motion for
reconsideration of the foregoing Order was denied on May 7, 1969.
During the pendency of the trial, plaintiffs filed a petition for the
appointment of a receiver "to receive, collect and hold in trust all income
of the property in the form of monthly rentals of P2,000.00", on the
premise that defendants have no other visible property which will
answer for the payment of said rentals. This petition was opposed by
defendants, alleging that plaintiffs will not suffer any irreparable injury or
grave damage if the petition for receivership is not granted, particularly
as defendants are solvent, and further considering that defendants have
a building on the parcel of land, the value of which must likewise be
considered before plaintiffs can be awarded possession of the land. The
matter of receivership was heard by respondent court and on May 17,
1969, it issued an Order appointing respondent Atty. Antonio D. Amosin,

Deputy Clerk of Court, as receiver, with instructions to take immediate


possession of the property in litigation and to preserve, administer and
dispose of the same in accordance with law and order of the court, upon
the posting of a bond in the amount of P500.00. On May 17, 1969, the
appointed receiver took his oath. Hence, the instant petition.
Petitioners herein pray that judgment be rendered annulling and setting
aside respondent court's complained of Orders dated October 10, 1968.
November 9, 1968, March 31, 1969, May 7, 1969 and May 17, 1969,
and ordering the dismissal of Civil Case no. V-3064 of respondent court
on the ground of res judicata. Petitioners further prayed for the issuance
of a writ of preliminary injunction to restrain respondent court from
proceeding with the scheduled hearings of the case, and respondent
receiver from executing the order to take immediate possession of the
property in litigation.
On June 16, 1969, this Court issued the writ of preliminary injunction
prayed for, restraining respondent court from continuing with the
scheduled trial of the case and respondent receiver from executing the
order to take immediate possession of the property in litigation and/or
otherwise discharging or performing his function as receiver. LexLib
The issue posed before Us is whether the questions which were
decided in Rafael Dinglasan, et al. vs. Lee Bun Ting, et al., supra, could
still be relitigated in Civil Case No. V-3064, in view of the subsequent
decision of this Court in Philippine Banking Corporation vs. Lui She,
supra.
We resolve the issue in the negative. The decision of this Court in G. R.
No. L-5996, "Rafael Dinglasan, et al. vs. Lee Bun Ting, et al."
constitutes a bar to Civil Case No. V-3064 before the respondent court.
Said Civil case, therefore, should have been dismissed because it is a
mere relitigation of the same issues previously adjudged with finality,
way back in 1956, between the same parties or their privies and
concerning the same subject matter. We have consistently held that the
doctrine of res judicata applies where, between a pending action and
one which has been finally and definitely settled, there is identity of
parties, subject matter and cause of action.
The concept of res judicata as a "bar by prior judgment" was explained
in Comilang vs. Court of Appeals, et al., promulgated on July 15, 1975,
6 thus:
"'The fundamental principle upon which the doctrine of res judicata rests
is that parties ought not to he permitted to litigate the same issue more
than once; that, when a right or fact has been juridically tried and
determined by a court of competent jurisdiction, or an opportunity for
such trial has been given, the judgment of the court, so long as is
remains unreversed, should he conclusive upon the parties and those in
privity with them in law or estate. . . . .
xxx

xxx

xxx

"This principle of res judicata is embodied in Rule 39, Sec. 49(b) and (c)
of the Rules of Court, as follows:
'(b)
In other cases the judgment or order is, with respect to the
matter directly adjudged or as to any other matter that could have been
raised in relation thereto, conclusive between the parties and their
successors in interest by title subsequent to the commencement of the
action or special proceeding, litigating for the same title and in the same
capacity.
Natural Resources || Full Text Cases Prelim Exam || 61

'(c)
In any other litigation between the same parties or their
successors-in-interest, that only is deemed to have been adjudged in a
former judgment which appears upon its face to have been so adjudged,
or was actually and necessarily included therein or necessary thereto.'
"Sec. 49(b) enunciates that concept of res judicata known as 'bar by
prior judgment' while Sec. 49(c) refers to 'Conclusiveness of judgment.'
There is 'bar by prior judgment' when, between the first case where the
judgment was rendered and the second case which is sought to be
barred, there is identity of parties, subject matter and cause of action.
The judgment in the first case constitutes an absolute bar to the
subsequent action. It is final as to the claim or demand in controversy,
including the parties and those in privity with them, not only as to every
matter which was offered and received to sustain or defeat the claim or
demand, but as to any other admissible matter which might have been
offered for that purpose and of all matters that could have been
adjudged in that case. But where between the first and second cases,
there is identity of parties but no identity or cause of action, the first
judgment is conclusive in the second case, only as to those matters
actually and directly controverted and determined and not as to matters
merely involved therein." (pp. 76-78).
A comparison between the earlier case of "Rafael Dinglasan, et al. vs.
Lee Bun Ting, et al." (G. R. No. L-5996) and the case pending before
respondent court 7 reveals that the requisites for the application of the
doctrine of res judicata are present. It is undisputed that the first case
was tried and decided by a court of competent jurisdiction, whose
decision was affirmed on appeal by this Tribunal. The parties to the two
cases are substantially the same, namely, as plaintiffs, Rafael A.
Dinglasan, Carmen A. Dinglasan, Francisco A. Dinglasan, Jr., Ramon A.
Dinglasan, Lourdes A. Dinglasan, Mercedes A. Dinglasan, Concepcion
A. Dinglasan, Mariano A. Dinglasan, Jose A. Dinglasan, Loreto A.
Dinglasan, Manuel A. Dinglasan, Rizal A. Dinglasan and Jimmy
Dinglasan (the differences being the inclusions of the minor Vicente
Dinglasan in L-5996 and Jesse Dinglasan in the case before respondent
court), against defendants Lee Bun Ting and Ang Chia, in her capacity
as widow of the deceased Lee Liong (and Administratrix of his estate in
L-5996). The subject matter of the two actions are the same, namely,
that "parcel of land, Cadastral Lot No. 398, located at Trece de Agosto
Street, now Roxas Avenue, corner of Pavia St., in the municipality of
Capiz, now Roxas City, covered by Original Certificate of Title No. 3389
of the Office of Register of Deeds of Capiz in the name of . . . Francisco
Dinglasan and originally declared under Tax (Declaration) No. 19284
also in his name in the municipality of Capiz, but now declared as
Cadastral Lots Nos. 398-A and 398-B respectively under Tax
Declarations Nos. 7487 and 7490 in the City of Roxas in the names of
Ang Chia Vda. de Lee and Lee Bun Ting respectively . . ." The causes of
action and the reliefs prayed for are
identical the annulment of the sale and the recovery of the subject
parcel of land.
Notwithstanding the mode of action taken by private respondents, We
find that in the ultimate analysis, Civil Case No. V-3064 is but an attempt
to reopen the issues which were resolved in the previous case. Contrary
to the contentions of private respondents, there has been no change in
the facts or in the conditions of the parties. Neither do We find Our ruling
in the Philippine Banking Corporation case applicable to the case at bar,
considering the rule that posterior changes in the doctrine of this Court
cannot retroactively be applied to nullify a prior final ruling in the same
proceeding where the prior adjudication was had, whether the case
should he civil or criminal in nature. The determination of the questions

of fact and of law by this Court on June 27, 1956 in case No. L-5996 has
become the law of the case, and may not now be disputed or relitigated
by a reopening of the same questions in a subsequent litigation between
the same parties and their privies over the same subject matter. Thus, in
People vs. Olarte, 8 We explained this doctrine, as follows: prcd
"Suffice it to say that our ruling in Case L-13027, rendered on the first
appeal, constitutes the law of the case, and, even if erroneous, it may
no longer be disturbed or modified since it has become final long ago. A
subsequent reinterpretation of the law may be applied to new cases but
certainly not to an old one finally and conclusively determined (People v.
Pinuila, G. R. No. L-11374, May 30, 1958; 55 O.G. 4228).
"Law of the case' has been defined as the opinion delivered on a former
appeal. More specifically, it means that whatever is once irrevocably
established as the controlling legal rule of decision between the same
parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the
court. (21 C.J.S. 330). (cited in Pinuila case, supra).
'As a general rule a decision on a prior appeal of the same case is held
to be the law of the case whether that decision is right or wrong, the
remedy of the Party being to seek a rehearing. (5 C.J.S. 1277).' (also
cited in Pinuila case).
It is also aptly held in another case that:
'It need not be stated that the Supreme Court, being the court of last
resort, is the final arbiter of all legal questions properly brought before it
and that its decision in any given case constitutes the law of that
particular case. Once its judgment becomes final it is binding on all
inferior courts, and hence beyond their power and authority to alter or
modify.' (Kabigting vs. Acting Director of Prisons, G. R. No. L-15548,
October 30, 1962).
"More categorical still is the pronouncement of this Court in Pomeroy vs.
Director of Prisons, L-14284-85, February 24, 1960:
'It will be seen that the prisoner's stand assumes that doctrines and
rulings of the Supreme Court operate retrospectively, and that they can
claim the benefit of decisions in People vs. Hernandez; People vs.
Geronimo, and People vs. Dugonon (L-6025-26, July 18, 1956; L-8936,
Oct. 31, 1956; and L-8926, June 29, 1957, respectively), promulgated
four or more years after the prisoner applicants had been convicted by
final judgment and started serving sentence. However, the rule adopted
by this Court (and by the Federal Supreme Court) is that judicial
doctrines have only prospective operation and do not apply to cases
previously decided (People vs. Pinuila, L-11374, promulgated May 30,
1958)'
"In the foregoing decision, furthermore, this Court quoted and reiterated
the rule in the following excerpts from People vs. Pinuila, G.R. No. L11374, jam cit.:
"The decision of this Court on that appeal by the government from the
order of dismissal, holding that said appeal did not place the appellants,
including Absalong Bignay, in double jeopardy, signed and concurred in
by six justices as against three dissenters headed by the Chief Justice,
promulgated way back in the year 1952, has long become the law of the
case. It may be erroneous, judge by the law on double jeopardy as
recently interpreted by this same Tribunal. Even so, it may not be
disturbed and modified. Our recent interpretation of the law may he
Natural Resources || Full Text Cases Prelim Exam || 62

applied to new cases, but certainly not to an old one finally and
conclusively determined. As already stated, the majority opinion in that
appeal is now the law of the case."
"The same principle, the immutability of the law of the case
notwithstanding subsequent changes of judicial opinion, has been
followed in civil cases:
Fernando vs. Crisostomo, 90 Phil. 585; Padilla vs. Paterno, 93 Phil. 884;
Samahang Magsasaka, Inc. vs. Chua Guan, L-7252, February, 1955.
"It is thus clear that posterior changes in the doctrine of this Court can
not retroactively he applied to nullify a prior final ruling in the same
proceeding where the prior adjudication was had, whether the case
should be civil or criminal in nature." 9
Reasons of public policy, judicial orderliness, economy and judicial time
and the interests of litigants, as well as the peace and order of society,
all require that stability be accorded the solemn and final judgments of
the courts or tribunals of competent jurisdiction. There can be no
question that such reasons apply with greater force on final judgments
of the highest Court of the land.
WHEREFORE, certiorari is granted, the Orders complained of are
hereby annulled and set aside, and respondent Judge is directed to
issue an Order dismissing Civil Case No. V-3064. With costs against
private respondents.
G.R. No. L-33048 April 16, 1982
EPIFANIA SARSOSA VDA. DE BARSOBIA, ET AL. vs. VICTORIANO T.
CUENCO
199 Phil. 26

FIRST DIVISION
[G.R. No. L-33048. April 16, 1982.]

EPIFANIA SARSOSA VDA. DE BARSOBIA and PACITA W. VALLAR,


petitioners, vs. VICTORIANO T. CUENCO, respondent.

Leodegario P. Vallar for petitioners.


Filiberto Leonardo for respondent.

SYNOPSIS
A parcel of coconut land was sold in 1936 by its Filipino owner,
petitioner Barsobia, to Ong King Po, a Chinese, and by the latter to
respondent Cuenco, a naturalized Filipino, who took immediate
possession of the land and harvested the fruits therefrom. Petitioner
Barsobia later unilaterally repudiated the sale in favor of Ong and resold
the land in 1962 to petitioner Vallar, a Filipino. On December 27, 1966,
respondent instituted an action for recovery of possession and
ownership against the petitioners. Petitioners, in their answer, averred

that the sale made in favor of Ong was in existent and that the deed of
sale in his favor was merely an evidence of indebtedness. The Trial
Court dismissed the complaint and declared petitioner Vallar the lawful
owner of the land. On appeal, the Court of Appeals reversed the
decision and declared respondent Cuenco as the absolute owner.
Hence, the present petition.
On review, the Supreme Court held that although the sale of the land to
a Chinese was void ab initio and the vendee had no rights of ownership
to transmit, the vendor is barred from asserting her claim on the land
because she is guilty of laches and the disputed land is already in the
hands of a qualified person. Hence, respondent should be declared the
rightful owner of the property in question.
Judgment of the Court of Appeals affirmed.
SYLLABUS
1.
CONSTITUTIONAL LAW; NATIONAL PATRIMONY; SALE OF
LAND TO ALIENS VOID. The sale of the land in question in 1936 by
Epifania to Ong King Po, a Chinese, was in existent and void from the
beginning (Art. 1409 (7), Civil Code) because it was a contract executed
against the mandatory provision of the 1933 Constitution, which is an
expression of public policy to conserve lands for the Filipinos.
2.
ID.; ID.; ID.; SUBSEQUENT SALE TO A QUALIFIED VENDEE
VALID; PRECLUDES RECOVERY BY ORIGINAL VENDOR. The
litigated property has been sold by the Chinese vendee and is now in
the hands of a naturalized Filipino, the respondent. It is no longer owned
by a disqualified vendee, Respondent, as a naturalized citizen, was
constitutionally qualified to own the subject property. There would be no
more public policy to be served in allowing petitioner Epifania to recover
the land as it is already in the hands of a qualified person.
3.
ID.; ID.; ID.; VENDOR HELD GUILTY OF LACHESIN CASE
AT BAR. While strictly speaking, Ong King Po, respondent's vendor
had no rights of ownership to transmit, it is likewise inescapable that
petitioner Epifania had slept on her rights for 26 years from 1936 to
1962. By her long inaction or inexcusable negledt, she should be held
barred from asserting her claim to the litigated property (Sotto vs. Teves,
86 SCRA 157).
4.
CIVIL LAW; DAMAGES; ACTUAL DAMAGES
RECOVERABLE IN CASE AT BAR. The award of actual damages in
respondent's favor of P10,000.00 is justified. Respondent was deprived
of the possession of his land and the enjoyment of its fruits from March,
1962. The Court of Appeals fixed respondent's share of the sale of
copra at P10,000.00 for eight years at four (4) harvests a year. The
accuracy of this finding has not been disputed.
5.
LEGAL ETHICS; ATTORNEY'S FEES; WHEN ALLOWED.
The award of attorney's fees and litigation expenses in the sum of
P2,000.00 in respondent's favor is in order considering that both
petitioners compelled respondent to litigate for the protection of his
interests. Moreover, the amount is reasonable.

DECISION

MELENCIO-HERRERA, J p:
Natural Resources || Full Text Cases Prelim Exam || 63

Sought to be reviewed herein is the judgment, dated August 18, 1970, of


the Court of Appeals, 1 rendered in CA-G.R. No. 41318-R, entitled
"Victoriano T. Cuenco, Plaintiff-appellant, versus Epifania Sarsosa Vda.
de Barsobia and Pacita W. Vallar, Defendants-appellees," declaring
Victoriano T. Cuenco (now the respondent) as the absolute owner of the
coconut land in question.
The lot in controversy is a one-half portion (on the northern side) of two
adjoining parcels of coconut land located at Barrio Mancapagao, Sagay,
Camiguin, Misamis Oriental (now Camiguin province), with an area of
29,150 square meters, more or less. 2
The entire land was owned previously by a certain Leocadia Balisado,
who had sold it to the spouses Patricio Barsobia (now deceased) and
Epifania Sarsosa, one of the petitioners herein. They are Filipino
citizens.
On September 5, 1936, Epifania Sarsosa, then a widow, sold the land in
controversy to a Chinese, Ong King Po, for the sum of P1,050.00
(Exhibit "B"). Ong King Po took actual possession and enjoyed the fruits
thereof.
On August 5, 1961, Ong King Po sold the litigated property to Victoriano
T. Cuenco (respondent herein), a naturalized Filipino, for the sum of
P5,000.00 (Exhibit "A"). Respondent immediately took actual
possession and harvested the fruits therefrom.
On March 6, 1962, Epifania "usurped" the controverted property, and on
July 26, 1962, Epifania (through her only daughter and child, Emeteria
Barsobia), sold a one-half (1/2) portion of the land in question to Pacita
W. Vallar, the other petitioner herein (Exhibit "2"). Epifania claimed that it
was not her intention to sell the land to Ong King Po and that she signed
the document of sale merely to evidence her indebtedness to the latter
in the amount of P1,050.00. Epifania has been in possession ever since
except for the portion sold to the other petitioner Pacita.
On September 19, 1962, respondent filed a Forcible Entry case against
Epifania before the Municipal Court of Sagay, Camiguin. The case was
dismissed for lack of jurisdiction since, as the laws then stood, the
question of possession could not be properly determined without first
settling that of ownership.
On December 27, 1966, respondent instituted before the Court of First
Instance of Misamis Oriental a Complaint for recovery of possession
and ownership of the litigated land, against Epifania and Pacita Vallar
(hereinafter referred to simply as petitioners).
In their Answer below, petitioners insisted that they were the owners and
possessors of the litigated land; that its sale to Ong King Po, a Chinese,
was inexistent and/or void ab initio; and that the deed of sale between
them was only an evidence of Epifania's indebtedness to Ong King Po.

On appeal, the Court of Appeals reversed the aforementioned Decision


and decreed instead that respondent was the owner of the litigated
property, thus:
xxx

xxx

xxx

In view of all the foregoing considerations, the judgment appealed from


is hereby reversed. In lieu thereof, we render judgment:
(a)
Declaring the plaintiff-appellant Victoriano T. Cuenco the
absolute owner of the land in question, with the right of possession
thereof;
(b)
Ordering the defendants-appellees to restore the possession
of said land to the plaintiff;
(c)

Dismissing the defendants' counterclaim;

(d)
Condemning the defendants to pay to the plaintiff the sum of
P10,000.00 representing the latter's share from the sale of copra which
he failed to receive since March, 1962 when he was deprived of his
possession over the land, and which defendants illegally appropriated it
to their own use and benefit, plus legal interest from the filing of the
complaint until fully paid; plus P2,000.00 representing expenses and
attorney's fees;
(e)

Sentencing the defendants to pay the costs.

SO ORDERED." 4
Following the denial of their Motion for Reconsideration, petitioners filed
the instant Petition for Review on Certiorari with this Court on January
21, 1971. Petitioners claim that the Court of Appeals erred:
"I.
. . . when it reversed the judgment of the trial court declaring
petitioner Pacita W. Vallar as the lawful possessor and owner of the
portion of land she purchased from Emeteria Barsobia, not a party to
this case, there being no evidence against her.

"II.
. . . when it included petitioner Pacita W. Vallar to pay
P10,000.00, with legal interest from the filing of the complaint,
representing respondent's share in the harvest and to pay the costs,
there being no evidence against her.
"III.
. . . when it condemned petitioners to pay P2,000.00
representing expenses and attorney's fees, there being no factual, legal
and equitable justification.

The trial Court rendered judgment:

"IV.
. . . in not applying the rule on pari delicto to the facts of the
case or the doctrine enunciated . . . in the case of Philippine Banking
Corporation vs. Lui She, L-17587, September 12, 1967, to . . . Petitioner
Epifania Sarsosa Vda. de Barsobia.

"1.
Dismissing the complaint with costs against plaintiff
(respondent herein);

"V.
. . . in denying, for lack of sufficient merits, petitioners' motion
for rehearing or reconsideration of its decision." 5

"2.
Declaring the two Deeds of Sale, Exhibits A and B,
respectively, inexistent and void from the beginning; and

As the facts stand, a parcel of coconut land was sold by its Filipino
owner, petitioner Epifania, to a Chinese, Ong King Po, and by the latter
to a naturalized Filipino, respondent herein. In the meantime, the Filipino
owner had unilaterally repudiated the sale she had made to the Chinese

"3.
Declaring defendant Pacita W. Vallar as the lawful owner and
possessor of the portion of land she bought from Emeteria Barsobia (pp.
57, 67, Record.)" 3

Natural Resources || Full Text Cases Prelim Exam || 64

and had resold the property to another Filipino. The basic issue is: Who
is the rightful owner of the property?
There should be no question that the sale of the land in question in 1936
by Epifania to Ong King Po was inexistent and void from the beginning
(Art. 1409 [7], Civil Code) 6 because it was a contract executed against
the mandatory provision of the 1935 Constitution, which is an
expression of public policy to conserve lands for the Filipinos. Said
provision reads:

respondent's share of the sale of copra at P10,000.00 for eight years at


four (4) harvests a year. The accuracy of this finding has not been
disputed.
However, we find merit in the assigned error that petitioner, Pacita
Vallar, should not be held also liable for actual damages to respondent.
In the absence of contrary proof, she, too, must be considered as a
vendee in good faith of petitioner Epifania.

"Save in cases of hereditary succession, no private agricultural land


shall be transferred or assigned except to individuals, corporations, or
associations, qualified to acquire or hold lands of the public domain." 7

The award of attorney's fees and litigation expenses in the sum of


P2,000.00 in respondent's favor is in order considering that both
petitioners compelled respondent to litigate for the protection of his
interests. Moreover, the amount is reasonable. 10

Had this been a suit between Epifania and Ong King Po, she could have
been declared entitled to the litigated land on the basis, as claimed, of
the ruling in Philippine Banking Corporation vs. Lui She, 8 reading:

WHEREFORE, except for that portion holding petitioner, Pacita W.


Vallar, also liable for damages of P10,000.00, the appealed judgment is
hereby affirmed.

". . . For another thing, and this is not only cogent but also important.
Article 1416 of the Civil Code provides as an exception to the rule on
pari delicto that when the agreement is not illegal per se but is merely
prohibited, and the prohibition by the law is designed for the protection
of the plaintiff, he may, if public policy is thereby enhanced, recover what
he has sold or delivered . . . "

Costs against petitioners.

But the factual set-up has changed. The litigated property is now in the
hands of a naturalized Filipino. It is no longer owned by a disqualified
vendee. Respondent, as a naturalized citizen, was constitutionally
qualified to own the subject property. There would be no more public
policy to be served in allowing petitioner Epifania to recover the land as
it is already in the hands of a qualified person. Applying by analogy the
ruling of this Court in Vasquez vs. Giap and Li Seng Giap & Sons: 9
". . . if the ban on aliens from acquiring not only agricultural but also
urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that aim
or purpose would not be thwarted but achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization."
While, strictly speaking, Ong King Po, private respondent's vendor, had
no rights of ownership to transmit, it is likewise inescapable that
petitioner Epifania had slept on her rights for 26 years from 1936 to
1962. By her long inaction or inexcusable neglect, she should be held
barred from asserting her claim to the litigated property (Sotto vs. Teves,
86 SCRA 157 [1978]).
"Laches has been defined as 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 a
presumption that the party entitled to assert it either has abandoned it or
declined to assert it. (Tijam, et al. vs. Sibonghanoy, et al., No. L-21450,
April 15, 1968, 23 SCRA 29, 35)." (cited in Sotto vs. Teves, 86 SCRA
[1978]).
Respondent, therefore, must be declared to be the rightful owner of the
property. LexLib
The award of actual damages in respondent's favor of P10,000.00, as
well as of attorney's fees and expenses of litigation of P2,000.00, is
justified. Respondent was deprived of the possession of his land and the
enjoyment of its fruits from March, 1962. The Court of Appeals fixed

SO ORDERED.
G.R. No. 74170 July 18, 1989
REPUBLIC OF THE PHIL. vs. INTERMEDIATE APPELLATE COURT,
ET AL.

FIRST DIVISION
[G.R. No. 74170. July 18, 1989.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. INTERMEDIATE


APPELLATE COURT, GUILLERMO GONZALVES, ** respondents.

Amando Fabio, Jr. for private respondent.

DECISION

NARVASA, J p:
The chief question presented in the appeal at bar concerns the validity
of a conveyance of residential land to an alien prior to his acquisition of
Filipino citizenship by naturalization.
The Trial Court's description of the factual background is largely
undisputed. The case principally concerns Chua Kim @ Uy Teng Be,
who became a naturalized Filipino citizen, taking his oath as such, on
January 7, 1977. 1 He was the adopted son of Gregorio Reyes Uy Un.
The case involved three (3) parcels of land, which were among those
included in Land Registration Cases Numbered 405 and 14817 of the
Court of First Instance of Quezon Province: Lots Numbered 1 and 2,
plan Psu-57676, 2 and Lot No. 549 of plan AP-7521 identical to Plan
Natural Resources || Full Text Cases Prelim Exam || 65

Psu-54565. 3 These were respectively adjudicated in said land


registration cases to two persons, as follows:
1)
Lots 1 and 2, Psu-57676, to the Spouses Benigno Maosca
and Julia Daguison (in Opposition No. 51); 4 and
2)
Lot 549, AP-7521 (Psu-54565), to Gaspar Marquez, married
to Marcela Masaganda (in Opposition No. 155). 5 However, no decree
of confirmation and registration was entered at the time.
Lots 1 and 2, Psu-57676, were sold by the owners, the Maosca
Spouses, to Gregorio Reyes Uy Un on Dec. 30, 1934. 6 Lot 549, Psu54565, was also sold by the Marquez Spouses to Gregorio Reyes Uy
Un on December 27, 1934. 7
Subsequently, Gregorio Reyes Uy Un died, and his adopted son, Chua
Kim @ Uy Teng, took possession of the property.
The three (3) parcels of land above mentioned, together with several
others, later became subject of a compromise agreement in a litigation
in the Court of First Instance of Quezon Province, docketed as Civil
Case No. C-385. 8 The compromise agreement was executed not only
by the parties in the case (plaintiffs Domingo Reyes and Lourdes
Abustan, and the defendants, So Pick, et al.) respectively described
as "First Parties" and "Second Parties" but also Chua Kim @ Ting Be
Uy, designated therein as "Third Party," although he had not been
impleaded as a party to the case. In the agreement, in consideration of
Chua Kim's renunciation (a) of "any right or claim of whatever nature in .
. . (certain specifically identified) parcels of land" and (b) of any other
claim against the First Parties and Second Parties, both the latter, in
turn, waived "any claim of ownership or other right in or to the parcels of
land, or the improvements thereon, in Buenavista, Quezon covered by
OCT Nos. 3697, 3696, 3439 and 4382 of the Registry of Deeds of
Quezon," in the name of Gregorio Reyes Uy Un, Chua Kim's adoptive
father, and that they (the First and Second Parties) "will not oppose the
transfer, by means not contrary to law, of the ownership thereof to the
Third Party," said Chua Kim. The compromise agreement was
afterwards submitted to the Court 9 which rendered judgment on July
29, 1970 (amended by Order dated July 31, 1970), approving the same.
10
Chua Kim then filed a petition for issuance of decree of confirmation and
registration in Land Registration Case No. 405 (LRC Rec. No. 14817) of
the Court of First Instance of Quezon Province. 11
After due proceedings, and on the basis of the foregoing facts found to
have been duly proven by the evidence, the Court of First Instance of
Quezon 12 promulgated on January 14, 1982 the following Order, to wit:
WHEREFORE, premises considered, this Court finds that herein
petitioner Chua Kim alias Uy Teng Be has duly established his
registerable title over the properties in question in this land registration
case in so far as Oppositions Nos. 51 and 155 are concerned, and
hereby GRANTS his petition. The decision rendered on January 14,
1933 in so far as Opposition Nos. 51 and 155 are concerned, is hereby
amended adjudicating the said properties, better known now as Lots 1
and 2 of plan Psu-57676 in Opposition No. 51 and as Lot 549 of plan
Ap-7521, which is identical to plan Psu-54565 in Opposition No. 155, to
herein petitioner Chua Kim alias Uy Teng Be. Upon this order becoming
final, let the corresponding decrees of confirmation and registration be
entered and thereafter upon payment of the fees required by law, let the
corresponding certificate of titles be issued in the name of petitioner,

Chua Kim alias Uy Teng Be, married to Amelia Tan, of legal age, a
naturalized Filipino citizen, and a resident of the Municipality of
Buenavista, Province of Quezon, as his own exclusive properties, free
from all liens and encumbrances.
SO ORDERED.
The Republic of the Philippines, through the Solicitor General,
challenged the correctness of the Order and appealed it to the Court of
Appeals. That Court, however, affirmed the Order "in all respects," in a
decision promulgated on March 25, 1986. 13
Still not satisfied, the Republic has come to this Court on appeal by
certiorari, in a final attempt to prevent the adjudication of the property in
question to Chua Kim. The Solicitor General argues that
1)
the deeds and instruments presented by Chua Kim to prove
the conveyance to him of the lands in question by the successor-ininterest of the original adjudicatees are inadequate for the purpose; and
2)
Chua Kim has not proven his qualification to own private
agricultural land at the time of the alleged acquisition of the property in
question.
The Republic's theory is that the conveyances to Chua Kim were made
while he was still an alien, i.e., prior to his taking oath as a naturalized
Philippine citizen on January 7, 1977, at a time when he was
disqualified to acquire ownership of land in the Philippines (ART XIII,
SEC. 5, 1935 Constitution; ART. XIV, Sec. 14, 1973 Constitution);
hence, his asserted titles are null and void. 14 It is also its contention
that reliance on the decision and amendatory order in Civil Case No. C385 of the CFI, Rizal 15 is unavailing, since neither document declares
that the property in question was adjudicated to Chua Kim as his
inheritance from his adoptive father, Gregorio Reyes Uy Un. 16
The conclusions of fact of the Intermediate Appellate Court, sustaining
those of the Land Registration Court, reached after analysis and
assessment of the evidence presented at a formal hearing by the
parties, are by firmly entrenched rule binding on and may not be
reviewed by this Court. 17 Those facts thus found to exist, and the legal
principles subsumed in them, impel rejection of the Republic's appeal.
It is a fact that the lands in dispute were properly and formally
adjudicated by a competent Court to the Spouses Gaspar and to the
Spouses Marquez in fee simple, and that the latter had afterwards
conveyed said lands to Gregorio Reyes Uy Un, Chua Kim's adopting
parent, by deeds executed in due form on December 27, 1934 and
December 30, 1934, respectively. Plainly, the conveyances were made
before the 1935 Constitution went into effect, i.e., at a time when there
was no prohibition against acquisition of private agricultural lands by
aliens. 18 Gregorio Reyes Uy Un therefore acquired good title to the
lands thus purchased by him, and his ownership was not at all affected
either (1) by the principle subsequently enunciated in the 1935
Constitution that aliens were incapacitated to acquire lands in the
country, since that constitutional principle has no retrospective
application, 19 or (2) by his and his successor's omission to procure the
registration of the property prior to the coming into effect of the
Constitution. 20
It is a fact, furthermore, that since the death of Gregorio Reyes Uy Un in
San Narciso, Quezon, in 1946, Chua Kim @ Uy Teng Be had been in
continuous possession of the lands in concept of owner, as the putative
heir of his adoptive father, said Gregorio Reyes; 21 this, without protest
Natural Resources || Full Text Cases Prelim Exam || 66

whatever from any person. It was indeed Chua Kim's being in


possession of the property in concept of owner, and his status as
adopted son of Gregorio Reyes, that were the factors that caused his
involvement in Civil Case No. C-385 of the CFI at Calauag, Quezon, at
the instance of the original parties thereto, 22 and his participation in the
Compromise Agreement later executed by all parties. As already
mentioned, that compromise agreement, approved by judgment
rendered on July 29, 1970, 23 implicitly recognized Chua Kim's title to
the lands in question.
Be this as it may, the acquisition by Chua Kim of Philippine citizenship
should foreclose any further debate regarding the title to the property in
controversy, in line with this Court's rulings relative to persons similarly
situated. 24 In Sarsosa Vda. de Barsobia v. Cuenco, 113 SCRA 547, for
instance, the ruling was as follows:
. . . The litigated property is now in the hands of a naturalized Filipino. It
is no longer owned by a disqualified vendee. Respondent, as a
naturalized citizen, was constitutionally qualified to own the subject
property. There would be no more public policy to be served in allowing
petitioner Epifania to recover the land as it is already in the hands of a
qualified person. Applying by analogy the ruling of this Court in Vasquez
vs. Giap and Li Seng Giap & Sons (96 Phil. 447 [1955]),
. . . if the ban on aliens from acquiring not only agricultural but also
urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's land for future generations of Filipinos, that aim or
purpose would not be thwarted but achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization.
WHEREFORE, the petition is DISMISSED, and the judgment of the
Intermediate Appellate Court subject thereof AFFIRMED in toto.
SO ORDERED.
G.R. No. L-3676 January 31, 1955
SOCORRO VASQUEZ vs. LI SENG GIAP and LI SENG GIAP & SONS
096 Phil 447

EN BANC
[G.R. No. L-3676. January 31, 1955.]

1.
CONSTITUTIONAL LAW; SALE OF REAL ESTATE TO
ALIENS DIVESTS VENDOR OF TITLE THERETO; EFFECT OF
NATURALIZATION OF ALIEN IF STATE FAILS TO FILE ESCHEAT
PROCEEDINGS. In a sale of real estate to an alien disqualified to
hold title thereto, the vendors divests himself of the title to such real
estate and is not permitted to sue for the annulment of his contract.
(Article 1302 of the Civil Code.) In the United States the same rule
prevails. Furthermore, the vendee may hold it against the whole world
except as against the State. If, however, the State does not commence
escheat proceedings and in the meantime the alien becomes
naturalized citizen, the State is deemed to have waived its right to
escheat the real property and the title of the alien thereto becomes
lawful and valid as of the date of its conveyance or transfer to him.
2.
ID.; ID.; ID. The rule in the United States as to the effect of
naturalization may be adopted in this jurisdiction, because if the ban on
aliens from acquiring lands, as construed in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that aim
would not be thwarted by making lawful the acquisition of real estate by
aliens who become naturalized citizens before the State commences
forfeiture proceedings.

DECISION

PADILLA, J p:
This is an action to rescind the sale of a parcel of land together with the
improvements erected thereon, described in the complaint, which was
sold by the plaintiff to the defendant Li Seng Giap on 22 January 1940,
on the ground that the vendee was an alien and under the Constitution
incapable to own and hold title to lands. The case was decided upon the
following stipulation of facts:
Plaintiff and defendants in the above-entitled case, by their respective
attorneys, hereby stipulate and agree that the facts involved in this
litigation are as follows:
That plaintiff and defendant Li Seng Giap are, and were at all times
mentioned herein, of legal age and residents of the City of Manila,
Philippines; that defendant Li Seng Giap & Sons, Inc., is a corporation
duly organized and existing under and by virtue of the laws of the
Philippines, with principal office in the City of Manila, Philippines.
II

SOCORRO VASQUEZ, plaintiff-appellant, vs. LI SENG GIAP and LI


SENG GIAP & SONS, defendant-appellees.

Jose S. Sarte for appellant.


Lee, Orendain & Guzman for appellees.

SYLLABUS

That on January 22, 1940, plaintiff sold and transferred to defendant Li


Seng Giap, then Chinese citizen, for the sum of P14,500, a parcel of
land together with a house of strong materials existing thereon, more
particularly bounded and described as follows:
"A PARCEL OF LAND (Lot No. 22-A of the subdivision plan Psd- 15360,
being a portion of Lot No. 22, Block No. 2809 of the Cadastral Survey of
Manila, G. L. R. O. Cadastral Record No. 192), situated in the District of
Tondo, City of Manila. Bounded on the NE. by lot No. 23, Block No.
2809, on the SE. by Lot No. 22-B, Block No. 2809; on the SW. by Lot
No. 21, Block No. 2809; and on the NW. by Calle Magdalena; . . .
containing an area of four hundred twenty-three square meters and
forty-five square decimeters (423.45) more or less." (Assessed value
P15,579.00)
Natural Resources || Full Text Cases Prelim Exam || 67

III
That on August 21, 1940, defendant Li Seng Giap sold and transferred
unto defendant Li Seng Giap & Sons, Inc., whose shareholding then
were owned by Chinese citizens, for the same sum of P14,500, the
above-mentioned parcel, together with the improvements thereon, and
duly registered under Transfer Certificate of Title No. 59684 of the Office
of the Register of Deeds for the city of Manila on August 23, 1940.
IV

That Thomas J. Lee was duly naturalized as a Filipino citizen on May


10, 1941, under Certificate of Naturalization No. 516, the records of
which were duly reconstituted under an order of this Honorable Court in
Case No. R-604 dated May 24, 1946.
IX
That William Lee was duly naturalized as a Filipino citizen on November
1, 1948, under Certificate of Naturalization No. 2 of the Court of First
Instance of Daet, Camarines Norte.

That defendant Li Seng Giap was duly naturalized as a Filipino citizen


on May 10, 1941, under Certificate of Naturalization No. 515, the
records of which were duly reconstituted under an order of this
Honorable Court in Case No. R-603 dated May 24, 1946.

XI

That,defendant Li Seng Giap & Sons, Inc., is now a Filipino corporation,


96.67 per cent of its stocks being owned by Filipinos, and duly
authorised by its articles of incorporation to own, acquire or dispose of
real properties.

That Julia M. Lee and Charles Lee are both Filipinos by operation of law
as they were both minors when their father, Li Seng Giap, became a
Filipino citizen on May 10, 1941.

VI

Names Citizenship
amount

No. of shares

Li Seng Giap

Filipino

3,400

56.67

Per cent Total

1,200

20.00

120,000.00

William Lee

Filipino

200

3.33

20,000.00

Henry Lee

Filipino

200

3.33

20,000.00

Thomas J. Lee

Filipino

200

3.33

20,000.00

Sofia Lee Teehankee

Filipino

200

3.33

Julian M. Lee

Filipino

200

3.33

20,000.00

Charles Lee

Filipino

200

3.33

20,000.00

Anthony P. Lee

Chinese 200

3.33

20,000.00

Filipino

(Sgd.) JOSE S. SARTE


Counsel for the Plaintiff
Room 213 Central Hotel, Manila

P340,000.00

Tang Ho de Li Seng

LEE, ORENDAIN & GUZMAN


Counsel for the Defendants

6,000

100.00% P600,000.00.

60 Novaliches St., Manila

20,000.00

VII
That Henry Lee was duly naturalized as a Filipino citizen on October
21,1936, under Certificate of Naturalization No. 352, the records of
which were duly reconstituted under an order of this Honorable Court in
Case No. R-407 dated May 24, 1946.
VIII

Manila, Philippines, September 7, 1949.


Respectfully Submitted:

That the following are the names and respective citizenship and
shareholdings of the present stockholders of Li Seng Giap & Sons, Inc.:

Giap

That Sofia Lee Teehankee is a Filipino citizen being married to Dr.


Rafael Teehankee, a Filipino citizen.

By: (Sgd.) LEONARDO M. GUZMAN.


The Court rendered judgment dismissing the complaint with cost against
the plaintiff. She has appealed.
In Caoile vs. Yu Chiao, 49 Off, Gaz., 4321; Talento vs. Makiki, 49 Off.
Gaz., 4331; Bautista vs. Uy 49 Off. Gaz., 4336; Rellosa vs. Gaw Chee,
49 Off. Gaz., 4345 and Mercado vs. Go Bio, 49 Off. Gaz., 5360, the
majority of this Court has ruled that in sales of real estate to aliens
incapable of holding title thereto by virtue of the provisions of the
Constitution 1 both the vendor and the vendee are deemed to have
committed the constitutional violation and being thus in pari delicto the
courts will not afford protection to either party. 2 From this ruling three
Justices dissented. 3
The action is not of rescission because it is not postulated upon any of
the grounds provided for in Article 1291 of the old Civil Code and
because the action of rescission involves lesion or damage and seeks to
repair it. It is an action for annulment under Chapter VI, Title II, Book II,
on nullity of contracts, based on a defect in the contract which
invalidates it independently of such lesion or damages. 4 It is very likely
that the majority of this Court proceeded upon that theory when it
applied the in pari delicto rule referred to above.
In the United States the rule is that in a sale of real estate to an alien
disqualified to hold title thereto the vendor divests himself of the title to
Natural Resources || Full Text Cases Prelim Exam || 68

such real estate and has no recourse against the vendee despite the
latter's disability on account of alienage to hold title to such real estate
and the vendee may hold it against the whole world except as against
the State. It is only the State that is entitled by proceedings in the nature
of office found to have a forfeiture or escheat declared against the
vendee who is incapable of holding title to the real estate sold and
conveyed to him. 5
However, if the State does not commence such proceedings and in the
meantime the alien becomes naturalized citizen, the State is deemed to
have waived its right to escheat the real property and the title of the
alien thereto becomes lawful and valid as of the date of its conveyance
or transfer to him. 6 The rule in the United States that in a sale of real
estate to an alien disqualified to hold title thereto, the vendor divests
himself of the title to such real estate and is not permitted to sue for the
annulment of his contract, is also the rule under the Civil Code. . . .
Article 1302 of the old Civil Code provides: . . . Persons sui juris cannot,
however, avail themselves of the incapacity of those with whom they
contracted; . . ."
Manresa's comment on this clause of article 1302 of the Civil Code is as
follows:
Irresponsabilidad del defecto alegada. Es la segunda de las
condiciones necesarias para el ejercicio de la accion. Algunos la
expresan diciendo que solo puede intentar aquella el perjudicado, pero
esta expresion puede conducir a ideas equivocadas, ya que la nulidad
es independiente de la lesion, como declara el art. 1.300, y es licito al
favorecido economicamente por el contrato pedir la nulidad basandose
en causas a el no imputables, y en cambio no autoriza la ley el caso
inverso.
Sencilla la regla contenida en el parrafo segundo de este articulo,
puede complicarse cuando coexisten dos defectos del contrato, como
puede suceder, derivandose a veces de un mismo hecho, verbigracia,
el contrato celebrado con un incapaz por quien ignora que lo es: eneste
ejemplo es indudable que la persona capaz no podra pedir la nulidad
fundado en la incapacidad de la otra, pero si alegar el error o el dolo
que pedeciera si las circunstancias del sujeto eran de decisiva
influencia en el contrato. (Supra, pp. 708-709.)
Appellant argues that if at the time of the conveyance of the real
property the appellee was incapable of holding title to such real estate,
the contract of sale was null or void and may be annulled, and his
subsequent naturalization as a Filipino citizen cannot retroact to the
date of the conveyance to make it lawful and valid. However, if the ban
on aliens from acquiring not only agricultural but also urban lands, as
construed by this Court in the Krivenko case, is to preserve the nation's
lands for future generations of Filipinos, that aim or purpose would not
be thwarted but achieved by making lawful the acquisition of real estate
by aliens who became Filipino citizens by naturalization. The title to the
parcel of land of the vendee, a naturalized Filipino citizen, being valid
that of the domestic corporation to which the parcel of land has been
transferred, must also be valid, 96.67 per cent of its capital stock being
owned by Filipinos.

FIRST DIVISION
[G.R. No. L-31956. April 30, 1984.]

FILOMENA GERONA DE CASTRO, petitioner, vs. JOAQUIN TENG


QUEEN TAN, TAN TENG BIO, DOLORES TAN, ROSARIO TAN HUA
ING, and TO O. HIAP, respondents.

Pascual G. Mier for petitioner.


Eddie Tamondong for respondent Joaquin Teng Queen Tan.
Carlos Buenviaje for respondent Tan Teng Bio.
Arnulfo L. Perete for respondent Ong Shi (To O. Hiap).

DECISION

PLANA, J p:
Review on certiorari of the order of the former Court of First Instance of
Sorsogon dismissing petitioner's action for annulment of contract with
damages. Cdpr
In 1938, petitioner Filomena Gerona de Castro sold a 1,258 sq. m.
residential lot in Bulan, Sorsogon to Tan Tai, a Chinese. In 1956, Tan Tai
died leaving herein respondents his widow, To O. Hiap, and children
Joaquin Teng Queen Tan, Tan Teng Bio, Dolores Tan and Rosario Tan
Hua Ing.
Before the death of Tan Tai or on August 11, 1956, one of his sons,
Joaquin, became a naturalized Filipino. Six years after Tan Tai's death,
or on November 18, 1962, his heirs executed an extra-judicial
settlement of estate with sale, whereby the disputed lot in its entirety
was allotted to Joaquin. LexLib
On July 15, 1968, petitioner commenced suit against the heirs of Tan Tai
for annulment of the sale for alleged violation of the 1935 Constitution
prohibiting the sale of land to aliens.
Except for respondent Tan Teng Bio who filed an answer to the
complaint, respondents moved to disputed the complaint on the grounds
of (a) lack of cause of action, the plaintiff being in pari delicto with the
vendee, and the land being already owned by a Philippine citizen; (b)
laches; and (c) acquisitive prescription.

The judgment appealed from is affirmed, without costs.

Over the opposition of petitioner, the court a quo dismissed the


complaint, sustaining the first two grounds invoked by the movants. It is
this order of dismissal that is now the subject of this review.

G.R. No. L-31956 April 30, 1984

The assailed order must be sustained.

FILOMENA GERONA DE CASTRO vs. JOAQUIN TENG QUEEN TAN,


ET AL.

Independently of the doctrine of pari delicto, the petitioner cannot have


the sale annulled and recover the lot she herself has sold. While the
Natural Resources || Full Text Cases Prelim Exam || 69

vendee was an alien at the time of the sale, the land has since become
the property of respondent Joaquin Teng, a naturalized Philippine
citizen, who is constitutionally qualified to own land.
". . . The litigated property is now in the hands of a naturalized Filipino. It
is no longer owned by a disqualified vendee. Respondent, as a
naturalized citizen, was constitutionally qualified to own the subject
property. There would be no more public policy to be served in allowing
petitioner Epifania to recover the land as it is already in the hands of a
qualified person Applying by analogy the ruling of this Court in Vasquez
vs. Giap and Li Seng Giap & Sons:
'. . . if the ban on aliens from acquiring not only agricultural but also
Urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that aim
or purpose would not be thwarted but achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization.'"(Sarsosa Vda. de Barsobia vs. Cuenco, 113 SCRA 547,
at 553.).
Laches also militates against petitioner's cause. She sold the disputed
lot in 1938. She instituted the action to annul the sale only on July 15,
1968. What the Court said in the cited Sarsosa case applies with equal
force to the petitioner.
". . . it is likewise inescapable that petitioner Epifania had slept on her
rights for 26 years from 1936 to 1962. By her long inaction of
inexcusable neglect, she should be held barred from asserting her claim
to the litigated property (Sotto vs. Teves, 86 SCRA 157 [1978]).
'Laches has been defined as 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 a
presumption that the party entitled to assert it either has abandoned it or
declined to assert it. (Tijam, et al. vs. Sibonghanoy, et al., No. L-21450,
April 15, 1968, 23 SCRA 29, 35).' (cited in Sotto vs. Teves, 86 SCRA
154 [1978]).
"Respondent, therefore, must be declared to be the rightful owner of the
property." (p. 553.)
WHEREFORE, the appealed order is affirmed. Costs against petitioner.
SO ORDERED.
G.R. No. 46955 February 27, 1989
CONSORCIA AGUSTINO, ET AL. vs. COURT OF APPEALS, ET AL.

THIRD DIVISION
[G.R. No. 46955. February 27, 1989.]

CONSORCIA, TEODORO and ERNESTO, all surnamed AGUSTINO,


and SPOUSES BENITO VILLAVICENCIO & CORAZON SOTTO,
petitioners, vs. THE HONORABLE COURT OF APPEALS (Third
Division) and SEVERINO MOLDOGO and CATALINA MERCENE,
respondents.

Rio Sesinando E. Venturanza and J.V. Balili for petitioners.


Reynaldo Magalang Mambil and Ramon Y. Pardo for private
respondents.

SYLLABUS
1.
CIVIL LAW; LAND TITLES AND DEEDS; COMMONWEALTH
ACT NO. 141; SALE OF HOMESTEAD PATENTS WITHIN THE 5YEAR PROHIBITORY PERIOD CANNOT BE RATIFIED NOR
ACQUIRE VALIDITY THROUGH PASSAGE OF TIME. It is an
established rule that equity cannot be set up against clear provisions of
law based on public policy. Thus, in a number of cases, we have
consistently ruled that a sale of a homestead within the 5-year
prohibitive period is void ab initio and the same cannot be ratified nor
can it acquire validity through the passage of time. In the case of
Arsenal v. Intermediate Appellate Court (143 SCRA 49, 53 [1986]) we
said: "The above provisions of law are clear and explicit. A contract
which purports to alienate, transfer, convey or encumber any homestead
within the prohibitory period of five years from the date of the issuance
of the patent is void from its execution. In a number of cases, this Court
has held that such provision is mandatory (De Los Santos v. Roman
Catholic Church of Midsayap, 94 Phil. 405).
2.
ID.; ID.; ID.; ID.; DOCTRINE OF PARI DELICTO; NOT
APPLICABLE. The doctrine of pari delicto which could have
effectively barred Loren's heirs from recovering the property, be set up
against them by the mere fact that Loren, himself, was guilty of violating
the 5-year prohibition. In the case of Santos v. Roman Catholic Church
of Midsayap, et al., (94 Phil. 405, 411) we ruled: ". . . Ordinarily the
principle of pari delicto would apply to her because her predecessor-ininterest has carried out the sale with the presumed knowledge of its
illegality (8 Manresa 4th Ed., pp. 717-718), but because the subject of
the transaction is a piece of public land, public policy requires that she,
as heir, be not prevented from re-acquiring it because it was given by
law to her family for her home and cultivation. This is the policy on which
our homestead law is predicated (Pascua v. Talens, 80 Phil. 792). This
right cannot be waived. 'It is not within the competence of any citizen to
barter away what public policy by law seeks to preserve' (Gonzalo Puyat
and Sons, Inc. v. Pantaleon de las Ama, et al., 74 Phil. 3) . . ."

DECISION

GUTIERREZ, JR., J p:
This petition involves a three hectare parcel of land forming part of a
sixteen hectare homestead which was originally covered by Original
Certificate of Title (OCT) No. 597 issued in accordance with the
provisions of Commonwealth Act No. 141 on Homesteads in favor of
one, Ambrocio Loren, way back in 1925. It was only in 1958 or about 32
years after Loren's death that his heirs, herein petitioners (who are all
surnamed Agustino) executed an affidavit of adjudication over the said
parcel of land and obtained Transfer Certificate of Title (TCT) No. 7894
in their favor. However, in 1937, the private respondents had acquired
Natural Resources || Full Text Cases Prelim Exam || 70

the same parcel of land from a certain Gavino Luarca, who in turn
acquired the same from Loren in 1926.
The appellate court awarded the parcel of land to the private
respondents. It also ordered the cancellation of the titles of the
petitioners and their co-petitioners, the vendees of the said land. Hence,
this petition.
The records show that in 1926 Ambrocio Loren executed a deed of sale
over the parcel of land for a consideration of P150.00 in favor of Gavino
Luarca. Admittedly, Loren's original certificate of title which covered the
land was barely one year old at the time so there is no question that the
sale was within the 5-year prohibition against alienation of homesteads
under Com. Act 141. Luarca immediately took possession of the land
consisting of three (3) hectares and remained there until 1937, when he
sold the same land to the private respondents for P180.00. Since then,
the private respondents have been in possession of the land. The deed
of sale, between Loren and Luarca and between Luarca and the private
respondents were both unregistered.
Meanwhile, in 1958, the heirs of Juana Loren who was the only child of
Ambrocio Loren, executed an affidavit of adjudication, thereby
succeeding to the land covered by OCT No. 597 which included the
three hectare parcel in dispute. OCT No. 597 was cancelled and TCT
No. 7894 was issued in the petitioner's favor. According to the private
respondents, prior to execution of the affidavit and the issuance of TCT
No. 7894, the petitioners approached them and asked them to pay
P500.00 a hectare for the land they were occupying in consideration of
a new document to be signed by the petitioners but the respondents
failed to pay so they were left out of the project of partition.
As alleged by the private respondents and as it appears from the
records, the other areas covered by OCT No. 597 were also previously
sold to different persons. Apparently, these people were able to pay the
petitioners the corresponding amounts that the latter demanded
because when TCT No. 7894 was issued, four (4) partial sales were
annotated on the Memorandum of Encumbrances of the title; then,
another one in 1962 and another in 1967. In 1962, however, the private
respondents, were able to annotate their adverse claim on the
petitioners' title. The respondents remained in possession of the land up
to the events leading to the filing of the case. cdll
In 1967, the petitioners sold a portion of the land covered by TCT No.
7894 to their co-petitioners, Villavicencio and Sotto. This portion is the
land occupied by the private respondents. The sale covered four (4)
hectares; 1 hectare was designated as Parcel B which the private
respondents bought from a certain Ines Pastrana, who in turn, bought
the same from the deceased Juana Loren after the 5-year prohibition
period in the Homestead Law and 3 hectares designated as Parcel A,
which is the subject of this present petition, TCT No. 31676 was issued
in favor of Villavicencio and Sotto. The new owners succeeded in
ousting the private respondents from the land. Hence, the private
respondents instituted an action for recovery of possession with
damages.
The trial court adjudicated Parcel B to the private respondents. Parcel A
was awarded to the petitioners on the ground that the sale between
Ambrocio Loren to Gavino Luarca and that between Luarca and the
private respondents were null and void as the first sale was executed
within the 5-year prohibitive period under the Homestead law.
The private respondents appealed the decision as regards Parcel A.

On April 28, 1977, the Court of Appeals rendered the questioned


decision, adjudicating Parcel A to the private respondents on the ground
that the petitioners, heirs of Ambrocio Loren, by their inaction from 1926
to 1958, have lost their right to claim the land because of the equitable
principle of laches.
In this petition, therefore, the petitioners raise the issue of whether or
not the Court of Appeals committed grave abuse of discretion in holding
that the defense of laches can be set up against the petitioner-heirs who
are presumed by law to have continued possession of the land from the
time their grandfather, Ambrocio Loren, acquired the same in 1926 until
the time when they, themselves, acquired title thereto by virtue of
succession. May it also be set up against the other petitioners who
acquired the said land as innocent purchasers for value, especially
since the original sale by Ambrocio Loren to Gavino Luarca from whom
the private respondents acquired the land was void ab initio being
contrary to public policy?
If the sale by Ambrocio Loren to Gavino Luarca had been outside the 5year prohibitory period pursuant to Commonwealth Act No. 141 and the
sale had been void on some other grounds, there would be no question
about the application of the equitable principle of laches. However, it is
an established rule that equity cannot be set up against clear provisions
of law based on public policy. Thus, in a number of cases, we have
consistently ruled that a sale of a homestead within the 5-year
prohibitive period is void ab initio and the same cannot be ratified nor
can it acquire validity through the passage of time. In the case of
Arsenal v. Intermediate Appellate Court (143 SCRA 49, 53 [1986]) we
said: LLjur
"The above provisions of law are clear and explicit. A contract which
purports to alienate, transfer, convey or encumber any homestead within
the prohibitory period of five years from the date of the issuance of the
patent is void from its execution. In a number of cases, this Court has
held that such provision is mandatory (De Los Santos v. Roman
Catholic Church of Midsayap, 94 Phil. 405).
"Under the provision of the Civil Code, a void contract is inexistent from
the beginning. It cannot be ratified neither can the right to set up the
defense of its illegality be waived. (Art. 1409, Civil Code).
xxx

xxx

xxx

"Concededly, the contract of sale executed between the respondents


Palaos and Suralta in 1957 is void. It was entered into three (3) years
and eight (8) months after the grant of the homestead patent to the
respondent Palaos in 1954.
xxx

xxx

xxx

"At first blush, the equities of the case seem to lean in favor of the
respondent Suralta who, since 1957, has been in possession of the land
which was almost acquired in an underhanded manner by the
petitioners. We cannot, however, gloss over the fact that the respondent
Suralta was himself guilty of transgressing the law by entering, in 1957,
into a transaction clearly prohibited by law. It is a long standing principle
that equity follows the law. Court exercising equity jurisdiction are bound
by rules of law and have no arbitrary discretion to disregard them.
Equitable reasons will not control against any well-settled rule of law or
public policy (McCurdy v. County of Shiawassee, 118 N.W. 625). Thus,
equity cannot give validity to a void contract. If, on the basis of equity,
we uphold the respondent Suralta's claim over the land which is
Natural Resources || Full Text Cases Prelim Exam || 71

anchored on the contracts previously executed we would in effect be


giving life to a void contract."
Neither can the doctrine of pari delicto which could have effectively
barred Loren's heirs from recovering the property, be set up against
them by the mere fact that Loren, himself, was guilty of violating the 5year prohibition. In the case of Santos v. Roman Catholic Church of
Midsayap, et al., (94 Phil. 405, 411) we ruled:
". . . Ordinarily the principle of pari delicto would apply to her because
her predecessor-in-interest has carried out the sale with the presumed
knowledge of its illegality (8 Manresa 4th Ed., pp. 717-718), but because
the subject of the transaction is a piece of public land, public policy
requires that she, as heir, be not prevented from re-acquiring it because
it was given by law to her family for her home and cultivation. This is the
policy on which our homestead law is predicated (Pascua v. Talens, 80
Phil. 792). This right cannot be waived. 'It is not within the competence
of any citizen to barter away what public policy by law seeks to preserve'
(Gonzalo Puyat and Sons, Inc. v. Pantaleon de las Ama, et al., 74 Phil.
3) . . ."
It is, however, noteworthy to mention that the petitioners' interest in the
land in question hardly exemplifies the beneficent purpose for which the
provisions on homesteads were enacted and the spirit behind the
homestead law. We should also stress that the petitioner-vendees are
not, as they claim to be, innocent purchasers for value because at the
time they bought the land, the private respondents had already caused
the annotation of the adverse claim on the title of the land. Be that as it
may, it is not within the power of this Court to pass judgment on who is
more deserving of the land in question. We only decide who, under the
law, is entitled to the disputed property. It is up to the government to
decide whether or not the petitioners should retain ownership of the
land. Our decision, therefore, in this present petition is without prejudice
to the Government's institution of reversion proceedings as provided by
law. Cdpr
WHEREFORE, the petition is hereby GRANTED. The appealed
decision and resolution of the Court of Appeals are ANNULLED and
SET ASIDE. The decision of the then Court of First Instance of Oriental
Mindoro is REINSTATED with the modification that the petitioner who
are heirs are ordered to reimburse the private respondents the amount
of P150.00, which represents the purchase price received by the late
Ambrocio Loren in consideration for the sale of the land.
Let a copy of this decision be furnished the Solicitor General and the
Director of Lands for appropriate action.
SO ORDERED.
G.R. No. L-5622 December 29, 1952
CUSTODIO MARI vs. SEC. OF AGRI. AND NAT. RESOURCES
092 Phil 410

FIRST DIVISION
[G.R. No. L-5622. December 29, 1952.]

CUSTODIO MARI, represented by his attorney-in-fact, MARCELIANO


MARI, petitioner, vs. SECRETARY OF AGRI-CULTURE AND NATURAL
RESOURCES, MARCIANA DURAN, MAXIMIANO ASUNCION, and
FRANCISCO ASUNCION, respondents.

H.B. Arandia for petitioner.


Donato S. Conti and Casimiro A. Bautista for respondent Secretary of
Agriculture and natural Resources.
Justo I. Ibay for respondents Duran, M. Asuncion and F. Asuncion.

SYLLABUS
1.
HOMESTEADS; POWERS THEREON OF DIRECTOR OF
LANDS AND SECRETARY OF DEPARTMENT; RULES AND
REGULATIONS ISSUED BY DEPARTMENT; RELIEF FROM
DECISIONS AND ORDERS OF DIRECTOR OF LANDS OR
DEPARTMENT SECRETARY. The administration and distribution of
public lands is committed by law to the Director of Lands primarily, and
ultimately to the Secretary of the Department of Agriculture and Natural
Resources. There is neither constitutional nor legal objection to the
validity of the regulation promulgated by the Head of the Department to
the effect that the latter "may relieve a party or his legal representative
from a decision, order, or other proceeding taken against him through
his mistake, inadvertence, surprise, default or excusable neglect;
Provided that application therefor be made within a reasonable time but
in no case exceeding one year after such decision, order or proceeding
was taken." This is a counterpart of Rule 38 of the Rules of Court.
2.
ID.; ID.; ID.; When relief is granted under the above-quoted
regulation issued by the said Department, no appeal to the Supreme
Court lies, nor is certiorari permissible, inasmuch as the aggrieved party
may still appeal should he finally lose in the new hearing which the order
granting the relief directs or allows.

DECISION

BENGZON, J p:
This is a petition to prohibit the Secretary of Agriculture and Natural
Resources and his subordinates from proceeding further in the case
pending before that Department wherein Marciana Duran and other are
contesting the homestead application of Custodio Mari, the herein
petitioner.
Facts. On March 12, 1946 Custodio Mari applied for homestead patent
over a parcel of land of about six hectares in Mangatarem, Pangasinan.
On June 12, 1946 such application was preliminary approved by the
Director of Lands. But opposition having been submitted by Marciana
Duran, Maximiano Asuncion and Francisco Asuncion (herein
respondents) the Director of Lands assigned Public Lands Inspector De
Guzman to make the necessary investigation. This officer conducted an
ocular inspection and reported that portions of the land applied for were
Natural Resources || Full Text Cases Prelim Exam || 72

occupied and cultivated by Bonifacio Mari, Custodio Mari, Francisco


Asuncion, Maximiano Asuncion and others.

accordance with paragraphs 6 and 7 of Lands Administrative Order No.


6 by the District Land Officer himself of Pangasinan.

After several postponements, the examination of the witnesses was had


on August 8, 1946, in the absence of the oppositors. The applicant
Custodio Mari, presented his evidence. Thereafter, based on the proofs
adduced, the Director of Lands overruled the oppositions and adjudged
the land to Custodio Mari. A motion to reconsider was denied. On March
30, 1950, a document purporting to be an appeal to the Department of
Agri-culture and Natural Resources was filed with said Department.
Afterwards Custodio Mari questioned the appeal, alleging that the
signature and thumbmark affixed to such "appeal" were spurious and
forged. At the request of the Department, the National Bureau of
Investigation scrutinized the document, and confirmed the allegations of
forgery. Consequently on October 11, 1950 the Department dismissed
the appeal and the protest, and approved the order awarding the land to
Custodio Mari.

"WHEREFORE, this case should be, as hereby it is, remanded to the


Bureau of Lands; the decision of the Director of Lands dated November
14, 1949, set aside; and said official directed to have this case
investigated in accordance with the aforesaid Lands Administrative
order No. 6 and to decide the case anew on the basis of the result of the
formal investigation as herein directed.'"

Several months later, in their communication dated may 15, 1951, the
protestants requested that said last order be set aside and that they be
given "an opportunity to prove their claim to the land in question on the
grounds (1) that the said order of this Office dismissing their appeal was
based on the technicality that the signature of the claimants were forged
by Attorney Bugayong who, instead of signing the said appeal in his own
name as attorney of the said claimants, unlawfully forged their signature
and thumbmarks thereon for one reason or another which the said
attorney only knows, and that as a result of such unlawful act a criminal
complaint has been filed against Attorney Bugayong which is now
pending investigation in the Fiscal's Office of Pangasinan; (2) that the
claimants believe that there was connivance between their attorney and
the son of the respondent; (3) that the failure of the claimantsprotestants to appear at the investigation of the case which resulted in
their being non-suited and the investigation of the case being conducted
ex-parte without their appearance was due to the misrepresentation of
their aforesaid attorney, who told them that this case would be heard in
Mangatarem, Pangasinan and that it was not necessary for them to go
to Dagupan, Pangasinan, the place of the investigation; (4) that they
have been in possession of the land for more than 30 years as shown
by their improvements thereon; and (5) that the lease contract supposed
to have been signed by them (claimants) was secured by fraud and
deceit, as they were made to sign it while under the influence of liquor."
Finding favorably to the protestants, the respondent Head of
Department, on June 20, 1951, set aside his aforesaid order of October
11, 1950 and reinstated the appeal.
Subsequently, on March 29, 1952, he decided the appeal as follows:
"Considering (1) that the appealed decision of the Director of Lands in
the above-entitled case dated November 14, 1949 dismissing the claim
of the protestants-appellants to the land covered by Homestead
Application No. V-83 (E-86) of Custodio Mari was based upon an exparte investigation; (2) that the claim of the appellants to the said land is
based upon their alleged ownership and possession thereof for more
than 30 years; (3) that the said claimants-appellants have already been
relieved from the effects of the order of this Office of October 11, 1950
dropping their appeal in the order of this Office of June 20, 1951; and (4)
that the motion of the counsel for the applicant-appellee for the
reconsideration of the said order of June 20, 1951 had already been
denied on September 19, 1951, this office believes that in order to avoid
any possible miscarriage of justice this case should be investigated in

Discussion. The petitioner contends that the respondent official was


"without jurisdiction or exceeded his jurisdiction, or committed abuse of
discretion" in promulgating his orders of June 20, 1951 and march 29,
1952. Various reasons are explained in his several pleadings before this
court. Considering them as in relation with the answers and memoranda
of the respondents, we do not think that the petition should be granted.
The administration and distribution of public lands is committed by law
to the Director of Lands primarily, and ultimately to the Secretary of the
Department of Agriculture and Natural Resources. In the exercise of
such power they have to determine the conflicting claims of applicants
and occupants of disposable lands of the public domain. To regulate the
procedure of adjudication the head of department saw fit to promulgate
rules and regulations, one of which prescribes the following:
"Relief from effect of decisions and orders of the Secretary or of the
Director of Lands. Upon such terms as may be considered just, the
Secretary of Agriculture and Commerce, the Undersecretary or the
Director of Lands may relive a party or his legal representative from a
decision, order, or other proceeding taken against him through his
mistake, inadvertence, surprise, default or excusable neglect; Provided,
that application therefor be made within a reasonable time but in no
case exceeding one (1) year after such decision, order or proceeding
was taken."
There is neither constitutional nor legal objection to the validity of the
above regulation. Neither may its equitable feature be assailed for it is a
counterpart of Rule 38 of the Rules of Court affording relief against
fraud, accident, mistake or excusable negligence.
Now, as we read the record, we see that the official acts of the
respondent Secretary come within the purview of the above-quoted rule.
And we are not convinced that he has acted clearly with abuse of that
discretion which he necessarily has in affording relief. For one thing his
findings of facts are final. (Julian vs. Apostol, 52 Phil., 422).
Anyway and this is the main ground of our decision the petitioner
knows, or ought to know, that when relief is granted under Rule 38 by an
inferior court, no appeal lies to this court, (Samia vs. Medina, 56 Phil.,
613) nor is certiorari permissible (Mendoza vs. Montesa, * L-4159, Dec.
28, 1951) inasmuch as the aggrieved party may still appeal should he
finally lose in the new hearing which the order granting relief directs or
allows. In other words, such aggrieved party has another remedy. With
reference to the instant case, the "other" remedy of petitioner is to
appear at the re-investigation, protect his interests therein, and
thereafter, if the Director of Lands decides against him, to appeal to the
Department of course, provided the circumstances disclosed at such
reinvestigation justify his claim to preference over the land.
Judgment. Wherefore this petition will be dismissed, with costs against
petitioner.
Natural Resources || Full Text Cases Prelim Exam || 73

G.R. No. L-4302 September 17, 1952

092 Phil 5

in a forcible entry case involving the same property, a motion to dismiss


on the ground of bar by former judgment cannot be sustained, for not
only are the parties in the previous criminal action and in the action of
forcible entry not identical, but the causes of action involved are also
different.

FIRST DIVISION

DECISION

ANDRES PITARGUE vs. LEANDRO SORILLA

[G.R. No. L-4302. September 17, 1952.]


LABRADOR, J p:
ANDRES PITARGUE, plaintiff-appellee, vs. LEANDRO SORILLA,
defendant-appellant.

Vicente Fontanosa for appellant.


Martin A. Galit for appellee.

SYLLABUS
1.
PUBLIC LANDS; JURISDICTION OF COURTS THEREON;
FORCIBLE ENTRY AND DETAINER. Courts have jurisdiction to
entertain an action of forcible entry instituted by a bona fide applicant of
public land, who is in occupation and peaceful possession thereof and
who has introduced improvements, against one who deprives him of the
possession thereof before award and pending investigation of the
application.
2.
ID.; ID.; ID. The vesting of the Lands Department with
authority to administer, dispose, and alienate public lands must not be
understood as depriving the other branches of the Government of the
exercise of their respective functions or powers thereon, such as the
authority to stop disorders and quell breaches of peace by the police,
and the authority on the part of the courts to take jurisdiction over
possessory actions arising therefrom not involving, directly or indirectly,
alienation and disposition.
3.
ID.; ID.; ID. Even pending the investigation of, and
resolution on, an application by a bona fide occupant by the priority of
his application and the record of his entry, he acquires a right to the
possession of the public land he applied for against any other public
land applicant, which right may be protected by the possessory action of
forcible entry or by any other suitable remedy that our rules provide.
4.
PLEADING AND PRACTICE; FORCIBLE ENTRY; CASE
DISMISSED BY JUSTICE OF THE PEACE FOR SUPPOSED LACK OF
JURISDICTION AND TRIED BY THE COURT OF FIRST INSTANCE;
WHERE REMAND IS NOT NECESSARY. Where a forcible entry
case, tried but dismissed by the justice of the peace for alleged lack of
jurisdiction, is brought to the Court of First Instance on appeal and for a
new trial, not only on the question of jurisdiction but on the merits also,
there is no need of remanding the case to the justice of the peace court
for trial on the merits.
5.
JUDGMENTS; BAR BY FORMER JUDGMENT IN A
CRIMINAL CASE. Where a criminal action for usurpation of real
property was filed and was dismissed, and the accused therein is sued

On July 30, 1941, plaintiff-appellee filed a miscellaneous sales


application for a parcel of land known as cadastral lot No. 2777 situated
at Elang, Kidapawan, Cotabato, and paid a deposit of P5 therefor
(Exhibit F). The Bureau of Lands acknowledged receipt of his
application on November 22, 1941 (Exhibit E), and informed that it had
been referred to the district land office of Cotabato, Cotabato. Upon
receipt of his acknowledgment he started the construction of a small
house on the lot, but the same was not finished because of the outbreak
of the war. In 1946 he had another house constructed on the lot, which
he used both as a clinic (he is a dentist) and as a residence. He
introduced other improvements on the land and these, together with the
house, he declared for tax purposes (Exhibit B), paying taxes thereon in
1947 and 1948 (Exhibits C and D). He placed one Cacayorin in charge
of the house, but Cacayorin left it on December 13, 1948. Thereupon
defendant-appellant herein demolished the house and built thereon one
of his own. On December 17, 1948, plaintiff went to defendant and
asked the latter why he had constructed a building on the land, and the
latter gave the excuse that there was no sign of interest on the part of
the one who had applied for it.
On March 9, 1949, plaintiff-appellee instituted this action of forcible entry
in the justice of the peace court, praying that defendant be ordered to
vacate the lot usurped and remove the construction he had made
thereon, with monthly damages at P10. Thereupon defendant filed a
motion to dismiss the action on two grounds, namely, (1) that the court
has no jurisdiction over the subject matter, as the same falls under the
exclusive jurisdiction of the Bureau of Lands, and (2) that the action is
barred by a prior judgment, because a previous criminal action for
usurpation of real property filed by plaintiff against him had been
dismissed. The justice of the peace court denied the motion on the
ground that the issue involved is as to who was in the actual possession
of the lot in question on December 14, 1948, which issue can be
resolved only after the presentation of evidence (Record on Appeal, pp.
26-27). Thereupon defendant filed an answer denying plaintiff's
possession since 1946, and alleging as special defenses (1) that the lot
is an unawarded public land, which is already under investigation by the
Bureau of Lands, and (2) that defendant was already acquitted of a
criminal charge filed by plaintiff against him for usurpation of real
property. By way of counterclaim he demanded P2,800 from plaintiff
(Record on Appeal, pp. 27-33). On June 4, 1949, the justice of the
peace court declared itself without jurisdiction to try the case for the
reason that the subject matter of the action is the subject of an
administrative investigation (Ibid., p. 39). Against this judgment plaintiff
appealed to the Court of First Instance. At first this court refused to take
cognizance of the case, but upon the authority of the case of Mago vs.
Bihag, 44 Off. Gaz., (12) 4934, decided by the Court of Appeals, it
proceeded to try the case on the merits. After trial it found the facts
already set forth above, and sentenced the defendant to vacate the land
Natural Resources || Full Text Cases Prelim Exam || 74

and indemnify the plaintiff in the sum of P100, with costs. Against this
judgment this appeal has been presented, the defendant-appellant
making the following assignments of error in his brief:
1.
The lower Court erred in trying the case when the land
involved is a public land and jurisdiction of which belong to the Land
Department of the Philippines.
2.
The lower Court erred in trying the case when prior to the
commencement of this action an administrative case was (is) pending
between the parties over the same land in the Bureau of Lands and, as
such, the latter has acquired first jurisdiction over the subject- matter of
the action.
3.
The lower Court erred in trying the case when the cause of
this action is barred by a prior judgment.
4.
The lower Court erred in trying the case and rendering a
decision on the merits when its duty after it had determined that the
Justice of the Peace Court has jurisdiction is to reverse the order of
dismissal of the inferior court and remand to it for further proceedings.
Under the facts and circumstances of the case the question now before
us is as follows: Do courts have jurisdiction to entertain an action of
forcible entry instituted by a bona fide applicant of public land, who is in
occupation and peaceful possession thereof and who has introduced
improvements, against one who deprives him of the possession thereof
before award and pending investigation of the application? Defendantappellant contends that as the administrative disposition and control of
public lands is vested exclusively in the Lands Department, cognizance
of the forcible entry action or of any possessory action constitutes a
"prejudicial interference" with the said administrative functions, because
there is an administrative case pending in the Bureau of Lands between
the same parties over the same land. The record contains a certificate
of a land inspector to the effect that the investigation of the conflict
between plaintiff- appellee herein and the defendant-appellant has been
suspended because of the trial of the criminal case for usurpation filed
by plaintiff against defendant-appellant. (See Record on Appeal, pp. 2526.) We note from the certificate, however, that while plaintiff's
application is registered as MSA 9917, defendant-appellant does not
appear to have made any formal application at all.
It must be made clear at the outset that this case does not involve a
situation where the Bureau of Lands has already made an award of, or
authorized an entry into, the public land. It is purely a possessory action
by a bona fide applicant who has occupied the land he has applied for
before the outbreak of the war under the ostensible authority of his
application, which was given due course for investigation, but as to
which no approval has been given because investigation has not yet
been finished.
An ideal situation in the disposition of public lands would be one wherein
those alienable and disposable are yet unoccupied and are delivered to
the applicants upon the approval of their application, free from other
occupants or claimants. But the situation in the country has invariably
been the opposite; lands are occupied without being applied for, or
before the applications are approved. In fact, the approval of
applications often takes place many years after the occupations began
or the application was filed, so that many other applicants or claimants
have entered the land in the meantime, provoking conflicts and
overlapping of applications. For some reason or other the Lands
Department has been unable to cope with the ever increasing

avalanche of applications, or of conflicts and contests between rival


applicants and claimants.
The question that is before this Court is: Are courts without jurisdiction to
take cognizance of possessory actions involving these public lands
before final award is made by the Lands Department, and before title is
given any of the conflicting claimants? It is one of utmost importance, as
there are public lands everywhere and there are thousands of settlers,
especially in newly opened regions. It also involves a matter of policy, as
it requires the determination of the respective authorities and functions
of two coordinate branches of the Government in connection with public
land conflicts.
Our problem is made simple by the fact that under the Civil Code, either
in the old, which was in force in this country before the American
occupation, or in the new, we have a possessory action, the aim and
purpose of which is the recovery of the physical possession of real
property, irrespective of the question as to who has the title thereto.
Under the Spanish Civil Code we had the accion interdictal, a summary
proceeding which could be brought within one year from dispossession
(Roman Catholic Bishop of Cebu vs. Mangaron, 6 Phil. 286, 291); and
as early as October 1, 1901, upon the enactment of the Code of Civil
Procedure (Act No. 190 of the Philippine Commission) we implanted the
common law action of forcible entry (section 80 of Act No. 190), the
object of which has been stated by this Court to be "to prevent breaches
of the peace and criminal disorder which would ensue from the
withdrawal of the remedy, and the reasonable hope such withdrawal
would create that some advantage must accrue to those persons who,
believing themselves entitled to the possession of property, resort to
force to gain possession rather than to some appropriate action in the
courts to assert their claims." (Supia and Batioco vs. Quintero and
Ayala, 59 Phil. 312, 314.) So before the enactment of the first Public
Land Act (Act No. 926) the action of forcible entry was already available
in the courts of the country. So the question to be resolved is, Did the
Legislature intend, when it vested the power and authority to alienate
and dispose of the public lands in the Lands Department, to exclude the
courts from entertaining the possessory action of forcible entry between
rival claimants or occupants of any land before award thereof to any of
the parties? Did Congress intend that the lands applied for, or all public
lands for that matter, be removed from the jurisdiction of the Judicial
Branch of the Government, so that any troubles arising therefrom, or
any breaches of the peace or disorders caused by rival claimants, could
be inquired into only by the Lands Department to the exclusion of the
courts? The answer to this question seems to us evident. The Lands
Department does not have the means to police public lands; neither
does it have the means to prevent disorders arising therefrom, or
contain breaches of the peace among settlers; or to pass promptly upon
conflicts of possession. Then its power is clearly limited to disposition
and alienation, and while it may decide conflicts of possession in order
to make proper award, the settlement of conflicts of possession which is
recognized in the courts herein has another ultimate purpose, i.e., the
protection of actual possessors and occupants with a view to the
prevention of breaches of the peace. The power to dispose and alienate
could not have been intended to include the power to prevent or settle
disorders or breaches of the peace among rival settlers or claimants
prior to the final award. As to this, therefore, the corresponding branches
of the Government must continue to exercise power and jurisdiction
within the limits of their respective functions. The vesting of the Lands
Department with authority to administer, dispose, and alienate public
lands, therefore, must not be understood as depriving the other
branches of the Government of the exercise of their respective functions
or powers thereon, such as the authority to stop disorders and quell
Natural Resources || Full Text Cases Prelim Exam || 75

breaches of the peace by the police, and the authority on the part of the
courts to take jurisdiction over possessory actions arising therefrom not
involving, directly or indirectly, alienation and disposition.
Our attention has been called to a principle enunciated in American
courts to the effect that courts have no jurisdiction to determine the
rights of claimants to public lands, and that until the disposition of the
land has passed from the control of the Federal Government, the courts
will not interfere with the administration of matters concerning the same.
(50 C. J. 1093-1094.) We have no quarrel with this principle. The
determination of the respective rights of rival claimants to public lands is
different from the determination of who has the actual physical
possession or occupation with a view to protecting the same and
preventing disorder and breaches of the peace. A judgment of the court
ordering restitution of the possession of a parcel of land to the actual
occupant, who has been deprived thereof by another through the use of
force or in any other illegal manner, can never be "prejudicial
interference" with the disposition or alienation of public lands. On the
other hand, if courts were deprived of jurisdiction of cases involving
conflicts of possession, that threat of judicial action against breaches of
the peace committed on public lands would be eliminated, and a state of
lawlessness would probably be produced between applicants,
occupants or squatters, where force or might, not right or justice, would
rule.
It must be borne in mind that the action that would be used to solve
conflicts of possession between rivals or conflicting applicants or
claimants would be no other than that of forcible entry. This action, both
in England and the United States and in our jurisdiction, is a summary
and expeditious remedy whereby one in peaceful and quiet possession
may recover the possession of which he has been deprived by a
stronger hand, by violence or terror; its ultimate object being to prevent
breach of the peace and criminal disorder. (Supia and Batioco vs.
Quintero and Ayala, 59 Phil., 312, 314.) The basis of the remedy is mere
possession as a fact, of physical possession, not a legal possession.
(Mediran vs. Villanueva, 37 Phil., 752.) The title or right to possession is
never in issue in an action of forcible entry; as a matter of fact, evidence
thereof is expressly banned, except to prove the nature of the
possession. (Section 4, Rule 72, Rules of Court.) With this nature of the
action in mind, by no stretch of the imagination can the conclusion be
arrived at that the use of the remedy in the courts of justice would
constitute an interference with the alienation, disposition and control of
public lands. To limit ourselves to the case at bar can it be pretended at
all that its result would in any way interfere with the manner of the
alienation or disposition of the land contested? On the contrary, it would
facilitate adjudication, for the question of priority of possession having
been decided in a final manner by the courts, said question need no
longer waste the time of the land officers making the adjudication or
award.
The original Public Land Law (Act 926) was drafted and passed by a
Commission composed mostly of Americans and as the United States
has had its vast public lands and has had the same problems as we
now have, involving their settlement and occupation, it is reasonable to
assume that it was their intention to introduce into the country these
laws in relation to our problems of land settlement and disposition. The
problem now brought before us was presented in an analogous case in
the year 1894 before the Supreme Court of Oklahoma in the case of
Sproat vs. Durland, 2 Okl. 24, 35 Pac. 682, and said court made
practically the same solution as we have, thus:

. . . This question is one of vital importance in Oklahoma. All our lands


are entered, and title procured therefor, under the homestead laws of
the United States. The question arising out of adverse possession, as
between homestead claimants, daily confront our courts. To say that no
relief can be granted, or that our courts are powerless to do justice
between litigants in this class of cases, pending the settlement of title in
the land department, would be the announcement of a doctrine
abhorrent to a sense of common justice. It would encourage the strong
to override the weak, would place a premium upon greed and the use of
force, and, in many instances, lead to bloodshed and crime. Such a
state of affairs is to be avoided, and the courts should not hesitate to
invoke the powers inherent in them, and lend their aid, in every way
possible, to prevent injustice, by preventing encroachments upon the
possessory rights of settlers, or by equitably adjusting their differences.
In the case under consideration, no adequate remedy at law is provided
for relief. Ejectment will not lie. Adams vs. Couch, 1 Okl. 17, 26 Pac.
1009. And, at the time this proceeding was instituted, the forcible entry
and detainer act was insufficient in its provisions to afford a remedy. The
appellee was entitled to speedy relief, and ought not to be compelled to
await the final and tedious result of the litigation in the interior
department, before obtaining that which he clearly shows himself
entitled to have.
The action of forcible entry was then deemed insufficient in that state to
prevent acts of trespass interfering with an applicant's possession, so
that the court ordered the issuance of an injunction. The main issue
involved, however, was whether pending final investigation and award
the occupant should be protected in his possession, and the Supreme
Court of Oklahoma said it should, issuing an injunction to protect said
possession.
The same conclusion was arrived at by the Supreme Court of
Washington in the case of Colwell vs. Smith, 1 Wash. T. 92, 94, when it
held:
We will not decide between two conflicting claimants, both of whom are
actually in possession of certain portions of the claim in dispute, who is
in the right, so far as to dispossess one or the other from the entire
claim, which would render it impossible for him to prove that residence
the law requires, and thus contest his claim before the register and
receiver; we can and must protect either party from trespass by the
other, upon such portion of the claim as may be in the actual exclusive
possession of such party.
Resuming the considerations we have set forth above, we hold that the
grant of power and duty to the Lands Department to alienate and
dispose of public lands does not divest the courts of their duty or power
to take cognizance of actions instituted by settlers or occupants or
applicants against others to protect their respective possessions and
occupations, more especially the actions of trespass, forcible entry and
unlawful detainer, and that the exercise of such jurisdiction is no
interference with the alienation, disposition, and control of public lands.
The question we have proposed to consider must be answered in the
affirmative.
Our resolution above set forth answers defendant-appellant's
contention. We have, however, to go further and explore another
fundamental question, i.e., whether a public land applicant, such as the
plaintiff-appellee herein, may be considered as having any right to the
land occupied, which may entitle him to sue in the courts of justice for a
remedy for the return of the possession thereof, such as an action of
forcible entry or unlawful detainer, or any other suitable remedy provided
Natural Resources || Full Text Cases Prelim Exam || 76

by law. In the United States a claim "is initiated by an entry of the land,
which is effectual by making an application at the proper land office,
filing the affidavit and paying the amounts required by . . . the Revised
Statutes. (Sturr vs. Beck, 133 U. S. 541, 10 S. Ct. 350, 33 L. Ed. 761.)
"Entry" as applied to appropriation of land, "means that act by which an
individual acquires an inceptive right to a portion of the unappropriated
soil of the country, by filing his claim." (Ibid., citing Chotard vs. Pope, 25
U. S. 12 Wheat, 586, 588.) It has been held that entry based upon
priority in the initiatory steps, even if not accompanied by occupation,
may be recognized as against another applicant.
In Hastings & Dakota R. v. Whitney, ubi supra, an affidavit for the
purpose of entering land as a homestead was filed on behalf of one
Turner, in a local land office in Minnesota, on May 8, 1865, Turner
claiming to act under section 1 of the Act of March 21, 1864 (13 Stat.
35), now section 2293 of the Revised Statutes of the United States. As a
matter of fact, Turner was never on the land, and no member of his
family was then residing, or ever did reside, on it, and no improvements
whatever had ever been made thereon by anyone. Upon being paid
their fees, the register and receiver of the land office allowed the entry,
and the same stood upon the records of the local land office and upon
the records of the General Land Office, uncanceled, until September 30,
1872. Between May, 1865, and September, 1872, Congress made a
grant to the State of Minnesota for the purpose of aiding in the
construction of a railroad from Hastings, through certain countries, to a
point on the western boundary of the State, which grant was accepted
by the Legislature of the State of Minnesota and transferred to the
Hastings and Dakota Railroad Company, which shortly thereafter
definitely located its line of road by filing its map in the office of the
commissioner of the General Land Office. All these proceedings
occurred prior to the 30th of September, 1872. This Court declared that
the almost uniform practice of the Department has been to regard land
upon which an entry of record, valid upon its face, has been made, as
appropriated and withdrawn from subsequent homestead entry, preemption, settlement, sale or grant, until the original entry be cancelled or
be declared forfeited, in which case the land reverts to the government
as part of the public domain, and becomes again subject to entry under
the Land Laws; and it was held that whatever defects there might be in
an entry, so long as it remained a subsisting entry of record, whose
legality has been passed upon by the land authorities and their action
remained unreversed, it was such an appropriation of the tract as
segregated it from the public domain, and therefore precluded it from
subsequent grant; and that this entry on behalf of Turner "attached to
the land" in question, within the meaning of the Act of Congress making
the grant (14 Stat. 87), and could not be included within it. And as to
mere settlement with the intention of obtaining title under the Preemption Law, while it has been held that no vested right in the land as
against the United States is acquired until all the prerequisites for the

acquisition of title have been complied with, yet rights in parties as


against each other were fully recognized as existing, based upon priority
in the initiatory steps, when followed up to a patent. "The patent which is
afterwards issued relates back to the date of the initiatory act, and cuts
off all intervening claimants." Shepley vs. Cowan, 91 U. S. 330, 337 (23:
424, 426).
There are compelling reasons of policy supporting the recognition of a
right in a bona fide applicant who has occupied the land applied for.
Recognition of the right encourages actual settlement; it discourages
speculation and land-grabbing. It is in accord with well established
practices in the United States. It prevents conflicts and the overlapping
of claims. It is an act of simple justice to the enterprise and diligence of
the pioneer, without which land settlement can not be encouraged or
emigration from thickly populated areas hastened.
Our answer to the second problem is also in the affirmative, and we hold
that even pending the investigation of, and resolution on, an application
by a bona fide occupant, such as plaintiff-appellee herein, by the priority
of his application and record of his entry, he acquires a right to the
possession of the public land he applied for against any other public
land applicant, which right may be protected by the possessory action of
forcible entry or by any other suitable remedy that our rules provide.
Having disposed of the most important questions raised on this appeal,
we will next consider the procedural question, i.e., that the Court of First
Instance, after deciding the question of jurisdiction of the justice of the
peace favorably, should have remanded the case to that court for trial.
The record discloses that upon the docketing of the case in the Court of
First Instance on appeal, defendant- appellant filed a motion to dismiss,
which the Court of First Instance granted. However, upon motion for
reconsideration filed by plaintiff, the trial court vacated this order of
dismissal, and thereupon the defendant presented his answer. There
was no need of remanding the case to the justice of the peace court for
trial, because this court had already heard and tried the case evidently
on the merits. The case was, therefore, brought before the Court of First
Instance on appeal and for a new trial, not only on the question of
jurisdiction but on the merits also.
The claim of bar by a prior judgment, because the action for usurpation
of real property instituted by plaintiff-appellee against defendantappellant was dismissed, can not be sustained, for not only are the
parties in the previous criminal action and in this action of forcible entry
not identical, but the causes of action involved are also different.
The judgment appealed from is hereby affirmed, with costs against the
appellant.

Natural Resources || Full Text Cases Prelim Exam || 77