EN BANC

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

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT CORPORATION, respondents.
DECISION
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and
a temporary restraining order. The petition seeks to compel the Public Estates Authority
(PEA for brevity) to disclose all facts on PEAs then on-going renegotiations with Amari
Coastal Bay and Development Corporation (AMARI for brevity) to reclaim portions of
Manila Bay. The petition further seeks to enjoin PEA from signing a new agreement with
AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways,
signed a contract with the Construction and Development Corporation of the Philippines
(CDCP for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The
contract also included the construction of Phases I and II of the Manila-Cavite Coastal
Road. CDCP obligated itself to carry out all the works in consideration of fifty percent of the
total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No.
1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including foreshore and
submerged areas, and to develop, improve, acquire, x x x lease and sell any and all kinds
of lands.[1] On the same date, then President Marcos issued Presidential Decree No.
1085 transferring to PEA the lands reclaimed in the foreshore and offshore of the Manila
Bay[2] under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to
amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall be funded
and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum of Agreement
dated December 29, 1981, which stated:
(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of works
on a unit price/lump sum basis for items of work to be agreed upon, subject to price
escalation, retention and other terms and conditions provided for in Presidential Decree No.
1594. All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to
all the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which
have not yet been sold, transferred or otherwise disposed of by CDCP as of said date,
which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three
(99,473) square meters in the Financial Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty
Eight (3,382,888) square meters of reclaimed areas at varying elevations above Mean Low
Water Level located outside the Financial Center Area and the First Neighborhood Unit.[3]

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA the parcels of land so reclaimed under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters.
Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of Paraaque
issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA,
covering the three reclaimed islands known as the Freedom Islands located at the
southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom Islands
have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity) with
AMARI, a private corporation, to develop the Freedom Islands. The JVA also required the
reclamation of an additional 250 hectares of submerged areas surrounding these islands to
complete the configuration in the Master Development Plan of the Southern Reclamation
Project-MCCRRP. PEA and AMARI entered into the JVA through negotiation without
public bidding.[4] On April 28, 1995, the Board of Directors of PEA, in its Resolution No.
1245, confirmed the JVA. [5] On June 8, 1995, then President Fidel V. Ramos, through
then Executive Secretary Ruben Torres, approved the JVA.[6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege
speech in the Senate and denounced the JVA as the grandmother of all scams. As a
result, the Senate Committee on Government Corporations and Public Enterprises, and the
Committee on Accountability of Public Officers and Investigations, conducted a joint
investigation. The Senate Committees reported the results of their investigation in Senate
Committee Report No. 560 dated September 16, 1997.[7] Among the conclusions of their
report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are
lands of the public domain which the government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the certificates of title covering the Freedom
Islands are thus void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative
Order No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in
view of Senate Committee Report No. 560. The members of the Legal Task Force were
the Secretary of Justice,[8] the Chief Presidential Legal Counsel,[9] and the Government
Corporate Counsel.[10] The Legal Task Force upheld the legality of the JVA, contrary to
the conclusions reached by the Senate Committees.[11]
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there
were on-going renegotiations between PEA and AMARI under an order issued by then
President Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA
Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating
panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction
docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition
for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case
before the proper court.[12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer, filed
the instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary

Injunction and Temporary Restraining Order. Petitioner contends the government stands to
lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays
that PEA publicly disclose the terms of any renegotiation of the JVA, invoking Section 28,
Article II, and Section 7, Article III, of the 1987 Constitution on the right of the people to
information on matters of public concern. Petitioner assails the sale to AMARI of lands of
the public domain as a blatant violation of Section 3, Article XII of the 1987 Constitution
prohibiting the sale of alienable lands of the public domain to private corporations. Finally,
petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the
State that are of public dominion.
After several motions for extension of time,[13] PEA and AMARI filed their Comments on
October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998,
petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order; and
(c) to set the case for hearing on oral argument. Petitioner filed a Reiterative Motion for
Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution dated June
22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and
required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement
(Amended JVA, for brevity). On May 28, 1999, the Office of the President under the
administration of then President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now
prays that on constitutional and statutory grounds the renegotiated contract be declared
null and void.[14]
The Issues
The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT
FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Courts Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.
The petition prays that PEA publicly disclose the terms and conditions of the on-going
negotiations for a new agreement. The petition also prays that the Court enjoin PEA from
privately entering into, perfecting and/or executing any new agreement with AMARI.
PEA and AMARI claim the petition is now moot and academic because AMARI furnished
petitioner on June 21, 1999 a copy of the signed Amended JVA containing the terms and
conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioners prayer
for a public disclosure of the renegotiations. Likewise, petitioners prayer to enjoin the
signing of the Amended JVA is now moot because PEA and AMARI have already signed
the Amended JVA on March 30, 1999. Moreover, the Office of the President has approved
the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply
fast-tracking the signing and approval of the Amended JVA before the Court could act on
the issue. Presidential approval does not resolve the constitutional issue or remove it from
the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the
President cannot operate to moot the petition and divest the Court of its jurisdiction. PEA
and AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of
the Amended JVA on constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have signed one in violation of the
Constitution. Petitioners principal basis in assailing the renegotiation of the JVA is its
violation of Section 3, Article XII of the Constitution, which prohibits the government from
alienating lands of the public domain to private corporations. If the Amended JVA indeed
violates the Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer
title and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila
Bay to a single private corporation. It now becomes more compelling for the Court to
resolve the issue to insure the government itself does not violate a provision of the
Constitution intended to safeguard the national patrimony. Supervening events, whether
intended or accidental, cannot prevent the Court from rendering a decision if there is a
grave violation of the Constitution. In the instant case, if the Amended JVA runs counter to
the Constitution, the Court can still prevent the transfer of title and ownership of alienable
lands of the public domain in the name of AMARI. Even in cases where supervening
events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and
the public.[17]
Also, the instant petition is a case of first impression. All previous decisions of the Court
involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the
1973 Constitution,[18] covered agricultural lands sold to private corporations which

acquired the lands from private parties. The transferors of the private corporations claimed
or could claim the right to judicial confirmation of their imperfect titles[19] under Title II of
Commonwealth Act. 141 (CA No. 141 for brevity). In the instant case, AMARI seeks to
acquire from PEA, a public corporation, reclaimed lands and submerged areas for nonagricultural purposes by purchase under PD No. 1084 (charter of PEA) and Title III of CA
No. 141. Certain undertakings by AMARI under the Amended JVA constitute the
consideration for the purchase. Neither AMARI nor PEA can claim judicial confirmation of
their titles because the lands covered by the Amended JVA are newly reclaimed or still to
be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive
and notorious occupation of agricultural lands of the public domain for at least thirty years
since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.[20]
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition
because of the possible transfer at any time by PEA to AMARI of title and ownership to
portions of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to
AMARI the latters seventy percent proportionate share in the reclaimed areas as the
reclamation progresses. The Amended JVA even allows AMARI to mortgage at any time
the entire reclaimed area to raise financing for the reclamation project.[21]
Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly
from the Court. The principle of hierarchy of courts applies generally to cases involving
factual questions. As it is not a trier of facts, the Court cannot entertain cases involving
factual issues. The instant case, however, raises constitutional issues of transcendental
importance to the public.[22] The Court can resolve this case without determining any
factual issue related to the case. Also, the instant case is a petition for mandamus which
falls under the original jurisdiction of the Court under Section 5, Article VIII of the
Constitution. We resolve to exercise primary jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly
certain information without first asking PEA the needed information. PEA claims
petitioners direct resort to the Court violates the principle of exhaustion of administrative
remedies. It also violates the rule that mandamus may issue only if there is no other plain,
speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court granted the
petition for mandamus even if the petitioners there did not initially demand from the Office
of the President the publication of the presidential decrees. PEA points out that in Taada,
the Executive Department had an affirmative statutory duty under Article 2 of the Civil
Code[24] and Section 1 of Commonwealth Act No. 638[25] to publish the presidential
decrees. There was, therefore, no need for the petitioners in Taada to make an initial
demand from the Office of the President. In the instant case, PEA claims it has no
affirmative statutory duty to disclose publicly information about its renegotiation of the JVA.
Thus, PEA asserts that the Court must apply the principle of exhaustion of administrative
remedies to the instant case in view of the failure of petitioner here to demand initially from
PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government
corporation. Under Section 79 of the Government Auditing Code,[26]2 the disposition of
government lands to private parties requires public bidding. PEA was under a positive
legal duty to disclose to the public the terms and conditions for the sale of its lands. The
law obligated PEA to make this public disclosure even without demand from petitioner or
from anyone. PEA failed to make this public disclosure because the original JVA, like the
Amended JVA, was the result of a negotiated contract, not of a public bidding. Considering
that PEA had an affirmative statutory duty to make the public disclosure, and was even in
breach of this legal duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question.[27] The principal issue in the instant case is the capacity of AMARI
to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of
lands of the public domain to private corporations. We rule that the principle of exhaustion
of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce
his constitutional right to information without a showing that PEA refused to perform an
affirmative duty imposed on PEA by the Constitution. PEA also claims that petitioner has
not shown that he will suffer any concrete injury because of the signing or implementation
of the Amended JVA. Thus, there is no actual controversy requiring the exercise of the
power of judicial review.
The petitioner has standing to bring this taxpayers suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional issues
involved here. First is the right of citizens to information on matters of public concern.
Second is the application of a constitutional provision intended to insure the equitable
distribution of alienable lands of the public domain among Filipino citizens. The thrust of
the first issue is to compel PEA to disclose publicly information on the sale of government
lands worth billions of pesos, information which the Constitution and statutory law mandate
PEA to disclose. The thrust of the second issue is to prevent PEA from alienating
hundreds of hectares of alienable lands of the public domain in violation of the Constitution,
compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez
v. PCGG,[28] the Court upheld the right of a citizen to bring a taxpayers suit on matters of
transcendental importance to the public, thus Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of transcendental importance to the public. He asserts that ordinary
taxpayers have a right to initiate and prosecute actions questioning the validity of acts or
orders of government agencies or instrumentalities, if the issues raised are of paramount
public interest, and if they immediately affect the social, economic and moral well being of
the people.
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest,
when the proceeding involves the assertion of a public right, such as in this case. He
invokes several decisions of this Court which have set aside the procedural matter of locus
standi, when the subject of the case involved public interest.

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

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public interest.
(Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making
and in the operations of the government, as well as provide the people sufficient
information to exercise effectively other constitutional rights. These twin provisions are
essential to the exercise of freedom of expression. If the government does not disclose its
official acts, transactions and decisions to citizens, whatever citizens say, even if expressed
without any restraint, will be speculative and amount to nothing. These twin provisions are
also essential to hold public officials at all times x x x accountable to the people,[29] for
unless citizens have the proper information, they cannot hold public officials accountable
for anything.
Armed with the right information, citizens can participate in public
discussions leading to the formulation of government policies and their effective
implementation. An informed citizenry is essential to the existence and proper functioning
of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.[30]
An essential element of these freedoms is to keep open a continuing dialogue or process
of communication between the government and the people. It is in the interest of the State
that the channels for free political discussion be maintained to the end that the government
may perceive and be responsive to the peoples will. Yet, this open dialogue can be
effective only to the extent that the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.
PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations the right to
information is limited to definite propositions of the government. PEA maintains the right
does not include access to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of being
formulated or are in the exploratory stage.
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or
before the closing of the transaction. To support its contention, AMARI cites the following
discussion in the 1986 Constitutional Commission:
Mr. Suarez. And when we say transactions which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The transactions used here, I suppose is generic and therefore, it can cover
both steps leading to a contract and already a consummated contract, Mr. Presiding
Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of
the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you.[32] (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces
the peoples right to information on matters of public concern.
This State policy is
expressed in Section 28, Article II of the Constitution, thus:

AMARI argues there must first be a consummated contract before petitioner can invoke the
right. Requiring government officials to reveal their deliberations at the pre-decisional

stage will degrade the quality of decision-making in government agencies. Government

officials will hesitate to express their real sentiments during deliberations if there is
immediate public dissemination of their discussions, putting them under all kinds of
pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to
disclose publicly, and information the constitutional right to information requires PEA to
release to the public. Before the consummation of the contract, PEA must, on its own and
without demand from anyone, disclose to the public matters relating to the disposition of its
property. These include the size, location, technical description and nature of the property
being disposed of, the terms and conditions of the disposition, the parties qualified to bid,
the minimum price and similar information. PEA must prepare all these data and disclose
them to the public at the start of the disposition process, long before the consummation of
the contract, because the Government Auditing Code requires public bidding. If PEA fails
to make this disclosure, any citizen can demand from PEA this information at any time
during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being
undertaken by the bidding or review committee is not immediately accessible under the
right to information. While the evaluation or review is still on-going, there are no official
acts, transactions, or decisions on the bids or proposals. However, once the committee
makes its official recommendation, there arises a definite proposition on the part of the
government. From this moment, the publics right to information attaches, and any citizen
can access all the non-proprietary information leading to such definite proposition. In
Chavez v. PCGG,[33] the Court ruled as follows:
Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose
sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not necessarily to intra-agency or interagency recommendations or communications during the stage when common assertions
are still in the process of being formulated or are in the exploratory stage. There is need,
of course, to observe the same restrictions on disclosure of information in general, as
discussed earlier such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information. (Emphasis supplied)
Contrary to AMARIs contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information contemplates inclusion of negotiations leading to
the consummation of the transaction. Certainly, a consummated contract is not a
requirement for the exercise of the right to information. Otherwise, the people can never
exercise the right if no contract is consummated, and if one is consummated, it may be too
late for the public to expose its defects.
Requiring a consummated contract will keep the public in the dark until the contract, which
may be grossly disadvantageous to the government or even illegal, becomes a fait
accompli. This negates the State policy of full transparency on matters of public concern,
a situation which the framers of the Constitution could not have intended. Such a
requirement will prevent the citizenry from participating in the public discussion of any
proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We
can allow neither an emasculation of a constitutional right, nor a retreat by the State of its
avowed policy of full disclosure of all its transactions involving public interest.

The right covers three categories of information which are matters of public concern,
namely: (1) official records; (2) documents and papers pertaining to official acts,
transactions and decisions; and (3) government research data used in formulating policies.
The first category refers to any document that is part of the public records in the custody of
government agencies or officials. The second category refers to documents and papers
recording, evidencing, establishing, confirming, supporting, justifying or explaining official
acts, transactions or decisions of government agencies or officials. The third category
refers to research data, whether raw, collated or processed, owned by the government and
used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes
evaluation reports, recommendations, legal and expert opinions, minutes of meetings,
terms of reference and other documents attached to such reports or minutes, all relating to
the JVA. However, the right to information does not compel PEA to prepare lists, abstracts,
summaries and the like relating to the renegotiation of the JVA.[34] The right only affords
access to records, documents and papers, which means the opportunity to inspect and
copy them. One who exercises the right must copy the records, documents and papers at
his expense. The exercise of the right is also subject to reasonable regulations to protect
the integrity of the public records and to minimize disruption to government operations, like
rules specifying when and how to conduct the inspection and copying.[35]
The right to information, however, does not extend to matters recognized as privileged
information under the separation of powers.[36] The right does not also apply to information
on military and diplomatic secrets, information affecting national security, and information
on investigations of crimes by law enforcement agencies before the prosecution of the
accused, which courts have long recognized as confidential.[37] The right may also be
subject to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged
information rooted in the separation of powers. The information does not cover Presidential
conversations, correspondences, or discussions during closed-door Cabinet meetings
which, like internal deliberations of the Supreme Court and other collegiate courts, or
executive sessions of either house of Congress,[38] are recognized as confidential. This
kind of information cannot be pried open by a co-equal branch of government. A frank
exchange of exploratory ideas and assessments, free from the glare of publicity and
pressure by interested parties, is essential to protect the independence of decision-making
of those tasked to exercise Presidential, Legislative and Judicial power.[39] This is not the
situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on
on-going negotiations before a final contract. The information, however, must constitute
definite propositions by the government and should not cover recognized exceptions like
privileged information, military and diplomatic secrets and similar matters affecting national
security and public order.[40] Congress has also prescribed other limitations on the right to
information in several legislations.[41]
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public

domain. Upon the Spanish conquest of the Philippines, ownership of all lands, territories
and possessions in the Philippines passed to the Spanish Crown.[42] The King, as the
sovereign ruler and representative of the people, acquired and owned all lands and
territories in the Philippines except those he disposed of by grant or sale to private
individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the public
domain. The Regalian doctrine is the foundation of the time-honored principle of land
ownership that all lands that were not acquired from the Government, either by purchase
or by grant, belong to the public domain.[43] Article 339 of the Civil Code of 1889, which is
now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership
and disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine
Commission enacted Act No. 1654 which provided for the lease, but not the sale, of
reclaimed lands of the government to corporations and individuals. Later, on November 29,
1919, the Philippine Legislature approved Act No. 2874, the Public Land Act, which
authorized the lease, but not the sale, of reclaimed lands of the government to corporations
and individuals. On November 7, 1936, the National Assembly passed Commonwealth Act
No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of
reclaimed lands of the government to corporations and individuals. CA No. 141 continues
to this day as the general law governing the classification and disposition of lands of the
public domain.

walls, fortresses, and other works for the defense of the territory, and mines, until granted
to private individuals.
Property devoted to public use referred to property open for use by the public. In contrast,
property devoted to public service referred to property used for some specific public service
and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but also to
property not so used but employed to develop the national wealth. This class of property
constituted property of public dominion although employed for some economic or
commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public
dominion into private property, to wit:
Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State.
This provision, however, was not self-executing. The legislature, or the executive
department pursuant to law, must declare the property no longer needed for public use or
territorial defense before the government could lease or alienate the property to private
parties.[45]
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the
lease of reclaimed and foreshore lands. The salient provisions of this law were as follows:

The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters
within the maritime zone of the Spanish territory belonged to the public domain for public
use.[44] The Spanish Law of Waters of 1866 allowed the reclamation of the sea under
Article 5, which provided as follows:

Section 1. The control and disposition of the foreshore as defined in existing law, and the
title to all Government or public lands made or reclaimed by the Government by dredging or
filling or otherwise throughout the Philippine Islands, shall be retained by the Government
without prejudice to vested rights and without prejudice to rights conceded to the City of
Manila in the Luneta Extension.

Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise provided by
the terms of the grant of authority.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands
made or reclaimed by the Government by dredging or filling or otherwise to be divided into
lots or blocks, with the necessary streets and alleyways located thereon, and shall cause
plats and plans of such surveys to be prepared and filed with the Bureau of Lands.

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit and did
not reserve ownership of the reclaimed land to the State.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the
public that such parts of the lands so made or reclaimed as are not needed for public
purposes will be leased for commercial and business purposes, x x x.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

xxx

Art. 339. Property of public dominion is

(e) The leases above provided for shall be disposed of to the highest and best bidder
therefore, subject to such regulations and safeguards as the Governor-General may by
executive order prescribe. (Emphasis supplied)

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

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore
lands. Private parties could lease lands reclaimed by the government only if these lands
were no longer needed for public purpose. Act No. 1654 mandated public bidding in the

lease of government reclaimed lands. Act No. 1654 made government reclaimed lands sui
generis in that unlike other public lands which the government could sell to private parties,
these reclaimed lands were available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act
No. 1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of
the Spanish Law of Waters. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land
Act.[46] The salient provisions of Act No. 2874, on reclaimed lands, were as follows:
Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture
and Natural Resources, shall from time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable
public lands, the Governor-General, upon recommendation by the Secretary of Agriculture
and Natural Resources, shall from time to time declare what lands are open to disposition
or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which have
been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral
land, shall be classified as suitable for residential purposes or for commercial, industrial, or
other productive purposes other than agricultural purposes, and shall be open to disposition
or concession, shall be disposed of under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the GovernorGeneral, upon recommendation by the Secretary of Agriculture and Natural Resources,
shall declare that the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be disposed of by sale
or lease under the provisions of this Act. (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the public
domain into x x x alienable or disposable[47] lands. Section 7 of the Act empowered the
Governor-General to declare what lands are open to disposition or concession. Section 8

of the Act limited alienable or disposable lands only to those lands which have been
officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this title[48] shall be
classified as government reclaimed, foreshore and marshy lands, as well as other lands.
All these lands, however, must be suitable for residential, commercial, industrial or other
productive non-agricultural purposes. These provisions vested upon the Governor-General
the power to classify inalienable lands of the public domain into disposable lands of the
public domain. These provisions also empowered the Governor-General to classify further
such disposable lands of the public domain into government reclaimed, foreshore or
marshy lands of the public domain, as well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public
domain classified as government reclaimed, foreshore and marshy lands shall be disposed
of to private parties by lease only and not otherwise. The Governor-General, before
allowing the lease of these lands to private parties, must formally declare that the lands
were not necessary for the public service. Act No. 2874 reiterated the State policy to
lease and not to sell government reclaimed, foreshore and marshy lands of the public
domain, a policy first enunciated in 1907 in Act No. 1654. Government reclaimed,
foreshore and marshy lands remained sui generis, as the only alienable or disposable
lands of the public domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and
marshy public lands for non-agricultural purposes retain their inherent potential as areas for
public service. This is the reason the government prohibited the sale, and only allowed the
lease, of these lands to private parties. The State always reserved these lands for some
future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and
marshy lands into other non-agricultural lands under Section 56 (d). Lands falling under
Section 56 (d) were the only lands for non-agricultural purposes the government could sell
to private parties. Thus, under Act No. 2874, the government could not sell government
reclaimed, foreshore and marshy lands to private parties, unless the legislature passed a
law allowing their sale.[49]
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to
Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private
parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino
people. The 1935 Constitution, in adopting the Regalian doctrine, declared in Section 1,
Article XIII, that
Section 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy and other
natural resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of
the Government established under this Constitution. Natural resources, with the exception
of public agricultural land, shall not be alienated, and no license, concession, or lease for

the exploitation, development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five years, except
as to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit
of the grant. (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public
agricultural lands, which were the only natural resources the State could alienate. Thus,
foreshore lands, considered part of the States natural resources, became inalienable by
constitutional fiat, available only for lease for 25 years, renewable for another 25 years.
The government could alienate foreshore lands only after these lands were reclaimed and
classified as alienable agricultural lands of the public domain. Government reclaimed and
marshy lands of the public domain, being neither timber nor mineral lands, fell under the
classification of public agricultural lands.[50] However, government reclaimed and marshy
lands, although subject to classification as disposable public agricultural lands, could only
be leased and not sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and
marshy lands of the public domain was only a statutory prohibition and the legislature could
therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and
corporations from acquiring government reclaimed and marshy lands of the public domain
that were classified as agricultural lands under existing public land laws. Section 2, Article
XIII of the 1935 Constitution provided as follows:
Section 2. No private corporation or association may acquire, lease, or hold public
agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty hectares, or
by lease in excess of one thousand and twenty-four hectares, or by homestead in excess of
twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares,
may be leased to an individual, private corporation, or association. (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of
Act No. 2874 to open for sale to private parties government reclaimed and marshy lands of
the public domain. On the contrary, the legislature continued the long established State
policy of retaining for the government title and ownership of government reclaimed and
marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also
known as the Public Land Act, which compiled the then existing laws on lands of the public
domain. CA No. 141, as amended, remains to this day the existing general law governing
the classification and disposition of lands of the public domain other than timber and
mineral lands.[51]
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
alienable or disposable[52] lands of the public domain, which prior to such classification
are inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the
President to declare what lands are open to disposition or concession. Section 8 of CA
No. 141 states that the government can declare open for disposition or concession only
lands that are officially delimited and classified. Sections 6, 7 and 8 of CA No. 141 read as
follows:

Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another,[53]
for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable
public lands, the President, upon recommendation by the Secretary of Agriculture and
Commerce, shall from time to time declare what lands are open to disposition or
concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which have
been officially delimited and classified and, when practicable, surveyed, and which have not
been reserved for public or quasi-public uses, nor appropriated by the Government, nor in
any manner become private property, nor those on which a private right authorized and
recognized by this Act or any other valid law may be claimed, or which, having been
reserved or appropriated, have ceased to be so. x x x.
Thus, before the government could alienate or dispose of lands of the public domain, the
President must first officially classify these lands as alienable or disposable, and then
declare them open to disposition or concession. There must be no law reserving these
lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy
lands of the public domain, are as follows:
Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral
land, is intended to be used for residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open to disposition or concession, shall
be disposed of under the provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case
may be, to any person, corporation, or association authorized to purchase or lease public
lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the President,
upon recommendation by the Secretary of Agriculture, shall declare that the same are not
necessary for the public service and are open to disposition under this chapter. The lands
included in class (d) may be disposed of by sale or lease under the provisions of this Act.
(Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section
58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy

disposable lands of the public domain. All these lands are intended for residential,
commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed
only the lease of such lands to private parties. The government could sell to private parties
only lands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural
purposes not classified as government reclaimed, foreshore and marshy disposable lands
of the public domain. Foreshore lands, however, became inalienable under the 1935
Constitution which only allowed the lease of these lands to qualified private parties.

lands under Section 59 (d). Lands classified under Section 59 (d) are the only alienable or
disposable lands for non-agricultural purposes that the government could sell to private
parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain
intended for residential, commercial, industrial or other productive purposes other than
agricultural shall be disposed of under the provisions of this chapter and not otherwise.
Under Section 10 of CA No. 141, the term disposition includes lease of the land. Any
disposition of government reclaimed, foreshore and marshy disposable lands for nonagricultural purposes must comply with Chapter IX, Title III of CA No. 141,[54] unless a
subsequent law amended or repealed these provisions.

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

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court
of Appeals,[55] Justice Reynato S. Puno summarized succinctly the law on this matter, as
follows:
Foreshore lands are lands of public dominion intended for public use. So too are lands
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the leasing of reclaimed land. The Public Land Acts
of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government
were to be disposed of to private parties by lease only and not otherwise. Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
Natural Resources, had first to determine that the land reclaimed was not necessary for the
public service. This requisite must have been met before the land could be disposed of.
But even then, the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The land remained
property of the State. (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141 has
remained in effect at present.
The State policy prohibiting the sale to private parties of government reclaimed, foreshore
and marshy alienable lands of the public domain, first implemented in 1907 was thus
reaffirmed in CA No. 141 after the 1935 Constitution took effect. The prohibition on the
sale of foreshore lands, however, became a constitutional edict under the 1935
Constitution. Foreshore lands became inalienable as natural resources of the State, unless
reclaimed by the government and classified as agricultural lands of the public domain, in
which case they would fall under the classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable
lands of the public domain continued to be only leased and not sold to private parties.[56]
These lands remained sui generis, as the only alienable or disposable lands of the public
domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the
President to reclassify government reclaimed and marshy lands into other non-agricultural

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before

lands under Section 59 that the government previously transferred to government units or
entities could be sold to private parties. Section 60 of CA No. 141 declares that

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

No. 141. The 1935 Constitution prohibited the alienation of all natural resources except
public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion
found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State.
Again, the government must formally declare that the property of public dominion is no
longer needed for public use or public service, before the same could be classified as
patrimonial property of the State.[59] In the case of government reclaimed and marshy
lands of the public domain, the declaration of their being disposable, as well as the manner
of their disposition, is governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion
those properties of the State which, without being for public use, are intended for public
service or the development of the national wealth. Thus, government reclaimed and
marshy lands of the State, even if not employed for public use or public service, if
developed to enhance the national wealth, are classified as property of public dominion.

public domain.[60] If the land of public domain were neither timber nor mineral land, it
would fall under the classification of agricultural land of the public domain. Both the 1935
and 1973 Constitutions, therefore, prohibited the alienation of all natural resources except
agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Private corporations, even if wholly owned
by Philippine citizens, were no longer allowed to acquire alienable lands of the public
domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution
declared that
Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or acquired by, or leased to, any
qualified individual, corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain except by lease
not to exceed one thousand hectares in area nor may any citizen hold such lands by lease
in excess of five hundred hectares or acquire by purchase, homestead or grant, in excess
of twenty-four hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may be increased by the
Batasang Pambansa upon recommendation of the National Economic and Development
Authority. (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the
public domain only through lease. Only individuals could now acquire alienable lands of
the public domain, and private corporations became absolutely barred from acquiring any
kind of alienable land of the public domain. The constitutional ban extended to all kinds of
alienable lands of the public domain, while the statutory ban under CA No. 141 applied only
to government reclaimed, foreshore and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the
Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No.
1084 creating PEA, a wholly government owned and controlled corporation with a special
charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and
powers:

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

Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other
means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any
and all kinds of lands, buildings, estates and other forms of real property, owned, managed,
controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.

The 1973 Constitution prohibited the alienation of all natural resources with the exception of
agricultural, industrial or commercial, residential, and resettlement lands of the public
domain. In contrast, the 1935 Constitution barred the alienation of all natural resources
except public agricultural lands. However, the term public agricultural lands in the 1935
Constitution encompassed industrial, commercial, residential and resettlement lands of the

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified. (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public
domain. Foreshore areas are those covered and uncovered by the ebb and flow of the
tide.[61] Submerged areas are those permanently under water regardless of the ebb and
flow of the tide.[62] Foreshore and submerged areas indisputably belong to the public
domain[63] and are inalienable unless reclaimed, classified as alienable lands open to
disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of
the public domain did not apply to PEA since it was then, and until today, a fully owned
government corporation. The constitutional ban applied then, as it still applies now, only to
private corporations and associations. PD No. 1084 expressly empowers PEA to hold
lands of the public domain even in excess of the area permitted to private corporations by
statute. Thus, PEA can hold title to private lands, as well as title to lands of the public
domain.

classified by law according to the uses which they may be devoted. Alienable lands of the
public domain shall be limited to agricultural lands. Private corporations or associations
may not hold such alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more than
five hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor. (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations from acquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the
public domain only through lease. As in the 1935 and 1973 Constitutions, the general law
governing the lease to private corporations of reclaimed, foreshore and marshy alienable
lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public
domain, there must be legislative authority empowering PEA to sell these lands. This
legislative authority is necessary in view of Section 60 of CA No.141, which states
Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality,
or branch or subdivision of the Government shall not be alienated, encumbered or
otherwise disposed of in a manner affecting its title, except when authorized by Congress; x
x x. (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore
and submerged alienable lands of the public domain. Nevertheless, any legislative
authority granted to PEA to sell its reclaimed alienable lands of the public domain would be
subject to the constitutional ban on private corporations from acquiring alienable lands of
the public domain. Hence, such legislative authority could only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the
Regalian doctrine. The 1987 Constitution declares that all natural resources are owned by
the State, and except for alienable agricultural lands of the public domain, natural
resources cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state
that
Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural lands of the public domain may be further

The rationale behind the constitutional ban on corporations from acquiring, except through
lease, alienable lands of the public domain is not well understood. During the deliberations
of the 1986 Constitutional Commission, the commissioners probed the rationale behind this
ban, thus:
FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which
says:
`No private corporation or association may hold alienable lands of the public domain except
by lease, not to exceed one thousand hectares in area.
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced
in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what the reason for this is. In
some of the cases decided in 1982 and 1983, it was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where
a chapel stood because the Supreme Court said it would be in violation of this.
(Emphasis supplied)
In Ayog v. Cusi,[64] the Court explained the rationale behind this constitutional ban in this
way:
Indeed, one purpose of the constitutional prohibition against purchases of public
agricultural lands by private corporations is to equitably diffuse land ownership or to
encourage owner-cultivatorship and the economic family-size farm and to prevent a

recurrence of cases like the instant case. Huge landholdings by corporations or private
persons had spawned social unrest.
However, if the constitutional intent is to prevent huge landholdings, the Constitution could
have simply limited the size of alienable lands of the public domain that corporations could
acquire. The Constitution could have followed the limitations on individuals, who could
acquire not more than 24 hectares of alienable lands of the public domain under the 1973
Constitution, and not more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in
the name of a corporation would be more effective in preventing the break-up of farmlands.
If the farmland is registered in the name of a corporation, upon the death of the owner, his
heirs would inherit shares in the corporation instead of subdivided parcels of the farmland.
This would prevent the continuing break-up of farmlands into smaller and smaller plots from
one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public
domain. Without the constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up corporations to acquire
more alienable public lands. An individual could own as many corporations as his means
would allow him. An individual could even hide his ownership of a corporation by putting
his nominees as stockholders of the corporation. The corporation is a convenient vehicle to
circumvent the constitutional limitation on acquisition by individuals of alienable lands of the
public domain.

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84
hectares of the 750-hectare reclamation project have been reclaimed, and the rest of the
592.15 hectares are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for
PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also complete,
at its own expense, the reclamation of the Freedom Islands. AMARI will further shoulder all
the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed.
AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the
total net usable area which is defined in the Amended JVA as the total reclaimed area less
30 percent earmarked for common areas. Title to AMARIs share in the net usable area,
totaling 367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the
Amended JVA provides that
x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARIs Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARIs Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of
the titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled. (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of
only a limited area of alienable land of the public domain to a qualified individual. This
constitutional intent is safeguarded by the provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to circumvent the constitutional
intent is removed. The available alienable public lands are gradually decreasing in the face
of an ever-growing population. The most effective way to insure faithful adherence to this
constitutional intent is to grant or sell alienable lands of the public domain only to
individuals. This, it would seem, is the practical benefit arising from the constitutional ban.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint
venture PEAs statutory authority, rights and privileges to reclaim foreshore and submerged
areas in Manila Bay. Section 3.2.a of the Amended JVA states that

The Amended Joint Venture Agreement

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995
and its supplemental agreement dated August 9, 1995.

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists
of three properties, namely:
1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and
3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area.[65]
PEA confirms that the Amended JVA involves the development of the Freedom Islands
and further reclamation of about 250 hectares x x x, plus an option granted to AMARI to
subsequently reclaim another 350 hectares x x x.[66]

PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake
the Project in accordance with the Master Development Plan.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under
the Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila
Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which state that:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands.
Private corporations or associations may not hold such alienable lands of the public domain
except by lease, x x x.(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila
Bay are alienable or disposable lands of the public domain. In its Memorandum,[67] PEA
admits that
Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain:
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x. (Emphasis supplied)
Likewise, the Legal Task Force[68] constituted under Presidential Administrative Order No.
365 admitted in its Report and Recommendation to then President Fidel V. Ramos,
[R]eclaimed lands are classified as alienable and disposable lands of the public
domain.[69] The Legal Task Force concluded that
D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights
of ownership and disposition over reclaimed lands have been transferred to PEA, by virtue
of which PEA, as owner, may validly convey the same to any qualified person without
violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land, except
by lease (Sec. 3, Art. XVII,[70] 1987 Constitution), does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory grant.
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of
Manila Bay are part of the lands of the public domain, waters x x x and other natural
resources and consequently owned by the State. As such, foreshore and submerged
areas shall not be alienated, unless they are classified as agricultural lands of the public
domain. The mere reclamation of these areas by PEA does not convert these inalienable
natural resources of the State into alienable or disposable lands of the public domain.
There must be a law or presidential proclamation officially classifying these reclaimed lands
as alienable or disposable and open to disposition or concession. Moreover, these
reclaimed lands cannot be classified as alienable or disposable if the law has reserved
them for some public or quasi-public use.[71]
Section 8 of CA No. 141 provides that only those lands shall be declared open to
disposition or concession which have been officially delimited and classified.[72] The
President has the authority to classify inalienable lands of the public domain into alienable
or disposable lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel
vs. Garcia,[73] the Executive Department attempted to sell the Roppongi property in Tokyo,
Japan, which was acquired by the Philippine Government for use as the Chancery of the
Philippine Embassy. Although the Chancery had transferred to another location thirteen
years earlier, the Court still ruled that, under Article 422[74] of the Civil Code, a property of
public dominion retains such character until formally declared otherwise. The Court ruled
that

The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co.
v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain, not
available for private appropriation or ownership until there is a formal declaration on the
part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108
Phil. 335 [1960]. (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents
for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On
January 19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the
name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom Islands.
Subsequently, on April 9, 1999 the Register of Deeds of the Municipality of Paranaque
issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD
No. 1529 authorizing the issuance of certificates of title corresponding to land patents. To
this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering
the Freedom Islands, is equivalent to an official proclamation classifying the Freedom
Islands as alienable or disposable lands of the public domain. PD No. 1085 and President
Aquinos issuance of a land patent also constitute a declaration that the Freedom Islands
are no longer needed for public service. The Freedom Islands are thus alienable or
disposable lands of the public domain, open to disposition or concession to qualified
parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already
reclaimed the Freedom Islands although subsequently there were partial erosions on some
areas. The government had also completed the necessary surveys on these islands. Thus,
the Freedom Islands were no longer part of Manila Bay but part of the land mass. Section
3, Article XII of the 1987 Constitution classifies lands of the public domain into agricultural,
forest or timber, mineral lands, and national parks. Being neither timber, mineral, nor
national park lands, the reclaimed Freedom Islands necessarily fall under the classification
of agricultural lands of the public domain. Under the 1987 Constitution, agricultural lands of
the public domain are the only natural resources that the State may alienate to qualified
private parties. All other natural resources, such as the seas or bays, are waters x x x
owned by the State forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of
1866, argues that if the ownership of reclaimed lands may be given to the party
constructing the works, then it cannot be said that reclaimed lands are lands of the public
domain which the State may not alienate.[75] Article 5 of the Spanish Law of Waters reads
as follows:
Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of
the grant of authority. (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from
the sea only with proper permission from the State. Private parties could own the

reclaimed land only if not otherwise provided by the terms of the grant of authority. This
clearly meant that no one could reclaim from the sea without permission from the State
because the sea is property of public dominion. It also meant that the State could grant or
withhold ownership of the reclaimed land because any reclaimed land, like the sea from
which it emerged, belonged to the State. Thus, a private person reclaiming from the sea
without permission from the State could not acquire ownership of the reclaimed land which
would remain property of public dominion like the sea it replaced.[76] Article 5 of the
Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that
all lands that were not acquired from the government, either by purchase or by grant,
belong to the public domain.[77]
Article 5 of the Spanish Law of Waters must be read together with laws subsequently
enacted on the disposition of public lands. In particular, CA No. 141 requires that lands of
the public domain must first be classified as alienable or disposable before the government
can alienate them. These lands must not be reserved for public or quasi-public purposes.
[78] Moreover, the contract between CDCP and the government was executed after the
effectivity of the 1973 Constitution which barred private corporations from acquiring any
kind of alienable land of the public domain. This contract could not have converted the
Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the
power to reclaim lands. Section 1 of PD No. 3-A declared that
The provisions of any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National Government or any
person authorized by it under a proper contract. (Emphasis supplied)
x x x.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation
of areas under water could now be undertaken only by the National Government or by a
person contracted by the National Government. Private parties may reclaim from the sea
only under a contract with the National Government, and no longer by grant or permission
as provided in Section 5 of the Spanish Law of Waters of 1866.

waters x x x owned by the State, forming part of the public domain and consequently
inalienable. Only when actually reclaimed from the sea can these submerged areas be
classified as public agricultural lands, which under the Constitution are the only natural
resources that the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands as alienable or
disposable lands open to disposition. Thereafter, the government may declare these lands
no longer needed for public service. Only then can these reclaimed lands be considered
alienable or disposable lands of the public domain and within the commerce of man.
The classification of PEAs reclaimed foreshore and submerged lands into alienable or
disposable lands open to disposition is necessary because PEA is tasked under its charter
to undertake public services that require the use of lands of the public domain. Under
Section 5 of PD No. 1084, the functions of PEA include the following: [T]o own or operate
railroads, tramways and other kinds of land transportation, x x x; [T]o construct, maintain
and operate such systems of sanitary sewers as may be necessary; [T]o construct,
maintain and operate such storm drains as may be necessary. PEA is empowered to
issue rules and regulations as may be necessary for the proper use by private parties of
any or all of the highways, roads, utilities, buildings and/or any of its properties and to
impose or collect fees or tolls for their use. Thus, part of the reclaimed foreshore and
submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and on
behalf of the National Government. The same section also states that [A]ll reclamation
projects shall be approved by the President upon recommendation of the PEA, and shall be
undertaken by the PEA or through a proper contract executed by it with any person or
entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA
became the primary implementing agency of the National Government to reclaim foreshore
and submerged lands of the public domain. EO No. 525 recognized PEA as the
government entity to undertake the reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests.[79] Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal
declaration segregating reclaimed lands no longer needed for public service from those still
needed for public service.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Governments implementing arm to undertake all reclamation projects of the government,
which shall be undertaken by the PEA or through a proper contract executed by it with any
person or entity. Under such contract, a private party receives compensation for
reclamation services rendered to PEA. Payment to the contractor may be in cash, or in
kind consisting of portions of the reclaimed land, subject to the constitutional ban on private
corporations from acquiring alienable lands of the public domain. The reclaimed land can
be used as payment in kind only if the reclaimed land is first classified as alienable or
disposable land open to disposition, and then declared no longer needed for public service.

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong to or be
owned by the PEA, could not automatically operate to classify inalienable lands into
alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore and
submerged lands of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15
hectares which are still submerged and forming part of Manila Bay. There is no legislative
or Presidential act classifying these submerged areas as alienable or disposable lands of
the public domain open to disposition. These submerged areas are not covered by any
patent or certificate of title. There can be no dispute that these submerged areas form part
of the public domain, and in their present state are inalienable and outside the commerce of
man. Until reclaimed from the sea, these submerged areas are, under the Constitution,

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

(1) x x x
xxx

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No.
525, vests in the Department of Environment and Natural Resources (DENR for brevity)
the following powers and functions:

(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources and, in the process of exercising such control, impose appropriate

taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other privileges concerning the development,
exploration and utilization of the countrys marine, freshwater, and brackish water and over
all aquatic resources of the country and shall continue to oversee, supervise and police our
natural resources; cancel or cause to cancel such privileges upon failure, non-compliance
or violations of any regulation, order, and for all other causes which are in furtherance of
the conservation of natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the
public domain and serve as the sole agency responsible for classification, subclassification, surveying and titling of lands in consultation with appropriate agencies.[80]
(Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR
exercises supervision and control over alienable and disposable public lands. DENR also
exercises exclusive jurisdiction on the management and disposition of all lands of the
public domain. Thus, DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or not. This means that PEA needs
authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or
in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public
domain. Hence, DENR decides whether reclaimed lands of PEA should be classified as
alienable under Sections 6[81] and 7[82] of CA No. 141. Once DENR decides that the
reclaimed lands should be so classified, it then recommends to the President the issuance
of a proclamation classifying the lands as alienable or disposable lands of the public
domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised Administrative
Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water,
while PEA is vested with the power to undertake the physical reclamation of areas under
water, whether directly or through private contractors. DENR is also empowered to classify
lands of the public domain into alienable or disposable lands subject to the approval of the
President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed
alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas
does not make the reclaimed lands alienable or disposable lands of the public domain,
much less patrimonial lands of PEA. Likewise, the mere transfer by the National
Government of lands of the public domain to PEA does not make the lands alienable or
disposable lands of the public domain, much less patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable and
open to disposition and a declaration that these lands are not needed for public service,
lands reclaimed by PEA remain inalienable lands of the public domain. Only such an
official classification and formal declaration can convert reclaimed lands into alienable or
disposable lands of the public domain, open to disposition under the Constitution, Title I
and Title III[83] of CA No. 141 and other applicable laws.[84]

PEAs Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public
domain, the reclaimed lands shall be disposed of in accordance with CA No. 141, the
Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands
transferred to a branch or subdivision of the government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative Code of
1987, which states that
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x.
Thus, the Court concluded that a law is needed to convey any real property belonging to
the Government. The Court declared that It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority
allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,
provides that
The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development
Corporation of the Philippines dated November 20, 1973 and/or any other contract or
reclamation covering the same area is hereby transferred, conveyed and assigned to the
ownership and administration of the Public Estates Authority established pursuant to PD
No. 1084; Provided, however, That the rights and interests of the Construction and
Development Corporation of the Philippines pursuant to the aforesaid contract shall be
recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the
obligations of the Republic of the Philippines (Department of Public Highways) arising from,
or incident to, the aforesaid contract between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said
entity with an issued value of said shares of stock (which) shall be deemed fully paid and
non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.

Special land patent/patents shall be issued by the Secretary of Natural Resources in favor
of the Public Estates Authority without prejudice to the subsequent transfer to the
contractor or his assignees of such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract. On the basis of such patents,
the Land Registration Commission shall issue the corresponding certificate of title.
(Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be
responsible for its administration, development, utilization or disposition in accordance with
the provisions of Presidential Decree No. 1084. Any and all income that the PEA may
derive from the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084.
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its
reclaimed lands. PD No. 1085 merely transferred ownership and administration of lands
reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by
PEA shall belong to or be owned by PEA. EO No. 525 expressly states that PEA should
dispose of its reclaimed lands in accordance with the provisions of Presidential Decree No.
1084, the charter of PEA.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire, administer,
deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed,
controlled and/or operated by the government.[87] (Emphasis supplied) There is,
therefore, legislative authority granted to PEA to sell its lands, whether patrimonial or
alienable lands of the public domain. PEA may sell to private parties its patrimonial
properties in accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of the public
domain does not apply to the sale of PEAs patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private
individuals since, with the legislative authority, there is no longer any statutory prohibition
against such sales and the constitutional ban does not apply to individuals. PEA, however,
cannot sell any of its alienable or disposable lands of the public domain to private
corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such
sales. The legislative authority benefits only individuals. Private corporations remain
barred from acquiring any kind of alienable land of the public domain, including government
reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be
transferred by PEA to the contractor or his assignees (Emphasis supplied) would not
apply to private corporations but only to individuals because of the constitutional ban.
Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987
Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open
to disposition, and further declared no longer needed for public service, PEA would have to
conduct a public bidding in selling or leasing these lands. PEA must observe the provisions
of Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law
exempting PEA from holding a public auction.[88] Special Patent No. 3517 expressly states

that the patent is issued by authority of the Constitution and PD No. 1084, supplemented
by Commonwealth Act No. 141, as amended. This is an acknowledgment that the
provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of the public
domain unless otherwise provided by law. Executive Order No. 654,[89] which authorizes
PEA to determine the kind and manner of payment for the transfer of its assets and
properties, does not exempt PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment, whether in kind and in installment,
but does not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing
Code, the government is required to sell valuable government property through public
bidding. Section 79 of PD No. 1445 mandates that
Section 79. When government property has become unserviceable for any cause, or is
no longer needed, it shall, upon application of the officer accountable therefor, be inspected
by the head of the agency or his duly authorized representative in the presence of the
auditor concerned and, if found to be valueless or unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest bidder
under the supervision of the proper committee on award or similar body in the presence of
the auditor concerned or other authorized representative of the Commission, after
advertising by printed notice in the Official Gazette, or for not less than three consecutive
days in any newspaper of general circulation, or where the value of the property does not
warrant the expense of publication, by notices posted for a like period in at least three
public places in the locality where the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale at such price as may be fixed by the
same committee or body concerned and approved by the Commission.
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.[90] The Commission on Audit
implements Section 79 of the Government Auditing Code through Circular No. 89-296[91]
dated January 27, 1989. This circular emphasizes that government assets must be
disposed of only through public auction, and a negotiated sale can be resorted to only in
case of failure of public auction.
At the public auction sale, only Philippine citizens are qualified to bid for PEAs reclaimed
foreshore and submerged alienable lands of the public domain. Private corporations are
barred from bidding at the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991.
PEA imposed a condition that the winning bidder should reclaim another 250 hectares of
submerged areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of
the additional reclaimed areas in favor of the winning bidder.[92] No one, however,
submitted a bid. On December 23, 1994, the Government Corporate Counsel advised PEA
it could sell the Freedom Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on December 10, 1991.[93]
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and
the additional 250 hectares still to be reclaimed, it also granted an option to AMARI to
reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares.[94] The failure of public bidding on December 10, 1991,
involving only 407.84 hectares,[95] is not a valid justification for a negotiated sale of 750
hectares, almost double the area publicly auctioned. Besides, the failure of public bidding
happened on December 10, 1991, more than three years before the signing of the original

JVA on April 25, 1995. The economic situation in the country had greatly improved during
the intervening period.
Reclamation under the BOT Law and the Local Government Code

contend that with the issuance of Special Patent No. 3517 and the corresponding
certificates of titles, the 157.84 hectares comprising the Freedom Islands have become
private lands of PEA. In support of their theory, PEA and AMARI cite the following rulings
of the Court:

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

1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held

Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance
of any infrastructure projects undertaken through the build-operate-and-transfer
arrangement or any of its variations pursuant to the provisions of this Act, the project
proponent x x x may likewise be repaid in the form of a share in the revenue of the project
or other non-monetary payments, such as, but not limited to, the grant of a portion or
percentage of the reclaimed land, subject to the constitutional requirements with respect to
the ownership of the land: x x x. (Emphasis supplied)

2. Lee Hong Hok v. David,[98] where the Court declared -

Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director
of Lands has neither control nor jurisdiction.

After the registration and issuance of the certificate and duplicate certificate of title based
on a public land patent, the land covered thereby automatically comes under the operation
of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -

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

While the Director of Lands has the power to review homestead patents, he may do so
only so long as the land remains part of the public domain and continues to be under his
exclusive control; but once the patent is registered and a certificate of title is issued, the
land ceases to be part of the public domain and becomes private property over which the
Director of Lands has neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the Court held

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

Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the industrial estate
constructed.

When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to
be part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same.
5.Republic v. Court of Appeals,[101] where the Court stated

Although Section 302 of the Local Government Code does not contain a proviso similar to
that of the BOT Law, the constitutional restrictions on land ownership automatically apply
even though not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the reclaimed
land, not exceeding 12 hectares[96] of non-agricultural lands, may be conveyed to him in
ownership in view of the legislative authority allowing such conveyance. This is the only
way these provisions of the BOT Law and the Local Government Code can avoid a direct
collision with Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the act of conveying the ownership of the reclaimed lands to
public respondent PEA transformed such lands of the public domain to private lands. This
theory is echoed by AMARI which maintains that the issuance of the special patent leading
to the eventual issuance of title takes the subject land away from the land of public domain
and converts the property into patrimonial or private property. In short, PEA and AMARI

Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration under the Land Registration
Act. Such land grant is constitutive of a fee simple title or absolute title in favor of
petitioner Mindanao Medical Center. Thus, Section 122 of the Act, which governs the
registration of grants or patents involving public lands, provides that Whenever public lands
in the Philippine Islands belonging to the Government of the United States or to the
Government of the Philippines are alienated, granted or conveyed to persons or to public or
private corporations, the same shall be brought forthwith under the operation of this Act
(Land Registration Act, Act 496) and shall become registered lands.
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titles issued to private parties. These four cases uniformly hold that the
Director of Lands has no jurisdiction over private lands or that upon issuance of the
certificate of title the land automatically comes under the Torrens System. The fifth case
cited involves the registration under the Torrens System of a 12.8-hectare public land
granted by the National Government to Mindanao Medical Center, a government unit under
the Department of Health. The National Government transferred the 12.8-hectare public

land to serve as the site for the hospital buildings and other facilities of Mindanao Medical
Center, which performed a public service. The Court affirmed the registration of the 12.8hectare public land in the name of Mindanao Medical Center under Section 122 of Act No.
496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the name of
PEA, a wholly government owned corporation performing public as well as proprietary
functions. No patent or certificate of title has been issued to any private party. No one is
asking the Director of Lands to cancel PEAs patent or certificates of title. In fact, the thrust
of the instant petition is that PEAs certificates of title should remain with PEA, and the land
covered by these certificates, being alienable lands of the public domain, should not be
sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant
private or public ownership of the land. Registration is not a mode of acquiring ownership
but is merely evidence of ownership previously conferred by any of the recognized modes
of acquiring ownership. Registration does not give the registrant a better right than what
the registrant had prior to the registration.[102] The registration of lands of the public
domain under the Torrens system, by itself, cannot convert public lands into private lands.
[103]
Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title
the alienable land of the public domain automatically becomes private land cannot apply to
government units and entities like PEA. The transfer of the Freedom Islands to PEA was
made subject to the provisions of CA No. 141 as expressly stated in Special Patent No.
3517 issued by then President Aquino, to wit:
NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines
and in conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the
Public Estates Authority the aforesaid tracts of land containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof.
(Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered
by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized by
Congress, the sale of alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD
No. 1529, a statutory lien affecting title of the registered land even if not annotated on the
certificate of title.[104] Alienable lands of the public domain held by government entities
under Section 60 of CA No. 141 remain public lands because they cannot be alienated or
encumbered unless Congress passes a law authorizing their disposition.
Congress,
however, cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can benefit from such
law.

become illusory if Congress can declare lands of the public domain as private or
patrimonial lands in the hands of a government agency tasked to dispose of public lands.
This will allow private corporations to acquire directly from government agencies limitless
areas of lands which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain. Thus, EO
No. 525 declares that
EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to
be undertaken in various parts of the country which need to be evaluated for consistency
with national programs;
Whereas, there is a need to give further institutional support to the Governments declared
policy to provide for a coordinated, economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited
to the National Government or any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government which
shall ensure a coordinated and integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions
and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of
the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416,
do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government.
All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in
consultation with the PEA upon approval of the President.
x x x .

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

As the central implementing agency tasked to undertake reclamation projects nationwide,

with authority to sell reclaimed lands, PEA took the place of DENR as the government
agency charged with leasing or selling reclaimed lands of the public domain.
The
reclaimed lands being leased or sold by PEA are not private lands, in the same manner

that DENR, when it disposes of other alienable lands, does not dispose of private lands but
alienable lands of the public domain. Only when qualified private parties acquire these
lands will the lands become private lands. In the hands of the government agency tasked
and authorized to dispose of alienable of disposable lands of the public domain, these
lands are still public, not private lands.
Furthermore, PEAs charter expressly states that PEA shall hold lands of the public
domain as well as any and all kinds of lands. PEA can hold both lands of the public
domain and private lands. Thus, the mere fact that alienable lands of the public domain
like the Freedom Islands are transferred to PEA and issued land patents or certificates of
title in PEAs name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as
private lands will sanction a gross violation of the constitutional ban on private corporations
from acquiring any kind of alienable land of the public domain. PEA will simply turn around,
as PEA has now done under the Amended JVA, and transfer several hundreds of hectares
of these reclaimed and still to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article
XII of the 1987 Constitution which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering over 80 million
strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public
domain since PEA can acquire x x x any and all kinds of lands. This will open the
floodgates to corporations and even individuals acquiring hundreds of hectares of alienable
lands of the public domain under the guise that in the hands of PEA these lands are private
lands. This will result in corporations amassing huge landholdings never before seen in
this country - creating the very evil that the constitutional ban was designed to prevent.
This will completely reverse the clear direction of constitutional development in this country.
The 1935 Constitution allowed private corporations to acquire not more than 1,024
hectares of public lands.[105] The 1973 Constitution prohibited private corporations from
acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated
this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or
PD No. 1529, automatically become private lands is contrary to existing laws. Several laws
authorize lands of the public domain to be registered under the Torrens System or Act No.
496, now PD No. 1529, without losing their character as public lands. Section 122 of Act
No. 496, and Section 103 of PD No. 1529, respectively, provide as follows:
Act No. 496
Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons or the
public or private corporations, the same shall be brought forthwith under the operation of
this Act and shall become registered lands.
PD No. 1529
Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith under
the operation of this Decree. (Emphasis supplied)

Based on its legislative history, the phrase conveyed to any person in Section 103 of PD
No. 1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government, as provided in Section 60 of CA
No. 141, may be registered under the Torrens System pursuant to Section 103 of PD No.
1529. Such registration, however, is expressly subject to the condition in Section 60 of CA
No. 141 that the land shall not be alienated, encumbered or otherwise disposed of in a
manner affecting its title, except when authorized by Congress. This provision refers to
government reclaimed, foreshore and marshy lands of the public domain that have been
titled but still cannot be alienated or encumbered unless expressly authorized by Congress.
The need for legislative authority prevents the registered land of the public domain from
becoming private land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain
may be registered under the Torrens System. Section 48, Chapter 12, Book I of the Code
states
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the name of any
political subdivision or of any corporate agency or instrumentality, by the executive head of
the agency or instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public
wharf may be titled in the name of a government corporation regulating port operations in
the country. Private property purchased by the National Government for expansion of an
airport may also be titled in the name of the government agency tasked to administer the
airport. Private property donated to a municipality for use as a town plaza or public school
site may likewise be titled in the name of the municipality.[106] All these properties become
properties of the public domain, and if already registered under Act No. 496 or PD No.
1529, remain registered land. There is no requirement or provision in any existing law for
the de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power of eminent domain
become unquestionably part of the public domain. Nevertheless, Section 85 of PD No.
1529 authorizes the Register of Deeds to issue in the name of the National Government
new certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states

Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest
therein, is expropriated or taken by eminent domain, the National Government, province,
city or municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state
definitely by an adequate description, the particular property or interest expropriated, the
number of the certificate of title, and the nature of the public use. A memorandum of the
right or interest taken shall be made on each certificate of title by the Register of Deeds,
and where the fee simple is taken, a new certificate shall be issued in favor of the National
Government, province, city, municipality, or any other agency or instrumentality exercising
such right for the land so taken. The legal expenses incident to the memorandum of

registration or issuance of a new certificate of title shall be for the account of the authority
taking the land or interest therein. (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively
private or patrimonial lands. Lands of the public domain may also be registered pursuant to
existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom
Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words
of AMARI, the Amended JVA is not a sale but a joint venture with a stipulation for
reimbursement of the original cost incurred by PEA for the earlier reclamation and
construction works performed by the CDCP under its 1973 contract with the Republic.
Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended
JVA requires PEA to cause the issuance and delivery of the certificates of title conveying
AMARIs Land Share in the name of AMARI.[107]
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which
provides that private corporations shall not hold such alienable lands of the public domain
except by lease. The transfer of title and ownership to AMARI clearly means that AMARI
will hold the reclaimed lands other than by lease. The transfer of title and ownership is a
disposition of the reclaimed lands, a transaction considered a sale or alienation under CA
No. 141,[108] the Government Auditing Code,[109] and Section 3, Article XII of the 1987
Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged
areas form part of the public domain and are inalienable. Lands reclaimed from foreshore
and submerged areas also form part of the public domain and are also inalienable, unless
converted pursuant to law into alienable or disposable lands of the public domain.
Historically, lands reclaimed by the government are sui generis, not available for sale to
private parties unlike other alienable public lands. Reclaimed lands retain their inherent
potential as areas for public use or public service. Alienable lands of the public domain,
increasingly becoming scarce natural resources, are to be distributed equitably among our
ever-growing population. To insure such equitable distribution, the 1973 and 1987
Constitutions have barred private corporations from acquiring any kind of alienable land of
the public domain. Those who attempt to dispose of inalienable natural resources of the
State, or seek to circumvent the constitutional ban on alienation of lands of the public
domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered
by certificates of title in the name of PEA, are alienable lands of the public domain. PEA
may lease these lands to private corporations but may not sell or transfer ownership of
these lands to private corporations. PEA may only sell these lands to Philippine citizens,
subject to the ownership limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open to
disposition and declared no longer needed for public service. The government can make
such classification and declaration only after PEA has reclaimed these submerged areas.
Only then can these lands qualify as agricultural lands of the public domain, which are the
only natural resources the government can alienate. In their present state, the 592.15
hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares[110] of the Freedom Islands, such transfer is void for being contrary to
Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares[111] of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of
natural resources other than agricultural lands of the public domain. PEA may reclaim
these submerged areas. Thereafter, the government can classify the reclaimed lands as
alienable or disposable, and further declare them no longer needed for public service. Still,
the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in
view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or purpose
is contrary to law, or whose object is outside the commerce of men, are inexistent and
void from the beginning. The Court must perform its duty to defend and uphold the
Constitution, and therefore declares the Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on
this last issue. Besides, the Court is not a trier of facts, and this last issue involves a
determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal
Bay Development Corporation are PERMANENTLY ENJOINED from implementing the
Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio.
SO ORDERED.
EN BANC
THE SECRETARY OF THE
G.R. No. 167707
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE
Present:
DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL
PUNO, C.J.,
DIRECTOR FOR LANDS,
QUISUMBING,
LANDS MANAGEMENT BUREAU,
YNARES-SANTIAGO,
REGION VI PROVINCIAL
CARPIO,
ENVIRONMENT AND NATURAL
AUSTRIA-MARTINEZ,
RESOURCES OFFICER OF KALIBO,
CORONA,*
AKLAN, REGISTER OF DEEDS,
CARPIO MORALES,
DIRECTOR OF LAND
AZCUNA,
REGISTRATION AUTHORITY,
TINGA,
DEPARTMENT OF TOURISM
CHICO-NAZARIO,

SECRETARY, DIRECTOR OF
PHILIPPINE TOURISM
AUTHORITY,
Petitioners,

VELASCO, JR.,
NACHURA,**
REYES,
LEONARDO-DE CASTRO, and
BRION, JJ.

- versus -

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

MAYOR JOSE S. YAP, LIBERTAD

TALAPIAN, MILA Y. SUMNDAD, and
ANICETO YAP, in their behalf and
Promulgated:
in behalf of all those similarly situated,
Respondents.
October 8, 2008
x--------------------------------------------------x
DR. ORLANDO SACAY and
WILFREDO GELITO, joined by
THE LANDOWNERS OF
BORACAY SIMILARLY
SITUATED NAMED IN A LIST,
ANNEX A OF THIS PETITION,
Petitioners,

G.R. No. 173775

G.R. No. 167707

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches
and warm crystalline waters, is reputedly a premier Philippine tourist destination. The
island is also home to 12,003 inhabitants[4] who live in the bone-shaped islands three
barangays.[5]
On April 14, 1976, the Department of Environment and Natural Resources (DENR)
approved the National Reservation Survey of Boracay
Island,[6] which identified several lots as being occupied or claimed by named persons.[7]
On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 1801[8]
declaring Boracay Island, among other islands, caves and peninsulas in the Philippines, as
tourist zones and marine reserves under the administration of the Philippine Tourism
Authority (PTA). President Marcos later approved the issuance of PTA Circular 3-82[9]
dated September 3, 1982, to implement Proclamation No. 1801.

- versus THE SECRETARY OF THE

DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL TECHNICAL
DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU,
REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL
RESOURCES OFFICER, KALIBO,
AKLAN,
Respondents.
x--------------------------------------------------x
DECISION

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing
an application for judicial confirmation of imperfect title or survey of land for titling purposes,
respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a
petition for declaratory relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA
Circular No. 3-82 raised doubts on their right to secure titles over their occupied lands.
They declared that they themselves, or through their predecessors-in-interest, had been in
open, continuous, exclusive, and notorious possession and occupation in Boracay since
June 12, 1945, or earlier since time immemorial. They declared their lands for tax
purposes and paid realty taxes on them.[10]
Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular
did not place Boracay beyond the commerce of man. Since the Island was classified as a
tourist zone, it was susceptible of private ownership.
Under Section 48(b) of
Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they had the
right to have the lots registered in their names through judicial confirmation of imperfect
titles.

REYES, R.T., J.:

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

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

The OSG maintained that respondents-claimants reliance on PD No. 1801 and PTA
Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was governed
by CA No. 141 and PD No. 705. Since Boracay Island had not been classified as alienable
and disposable, whatever possession they had cannot ripen into ownership.
During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1)
respondents-claimants were presently in possession of parcels of land in Boracay Island;
(2) these parcels of land were planted with coconut trees and other natural growing trees;
(3) the coconut trees had heights of more or less twenty (20) meters and were planted
more or less fifty (50) years ago; and (4) respondents-claimants declared the land they
were occupying for tax purposes.[12]
The parties also agreed that the principal issue for resolution was purely legal: whether
Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands
in Boracay. They decided to forego with the trial and to submit the case for resolution upon
submission of their respective memoranda.[13]
The RTC took judicial notice[14] that certain parcels of land in Boracay Island, more
particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No.
19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in
Civil Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan.[15] The titles
were issued on
August 7, 1933.[16]
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a
fallo reading:
WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and
PTA Circular No. 3-82 pose no legal obstacle to the petitioners and those similarly situated
to acquire title to their lands in Boracay, in accordance with the applicable laws and in the
manner prescribed therein; and to have their lands surveyed and approved by respondent
Regional Technical Director of Lands as the approved survey does not in itself constitute a
title to the land.
SO ORDERED.[17]
The RTC upheld respondents-claimants right to have their occupied lands titled in their
name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned
that lands in Boracay were inalienable or could not be the subject of disposition.[18] The
Circular itself recognized private ownership of lands.[19] The trial court cited Sections
87[20] and 53[21] of the Public Land Act as basis for acknowledging private ownership of
lands in Boracay and that only those forested areas in public lands were declared as part of
the forest reserve.[22]
The OSG moved for reconsideration but its motion was denied.[23] The Republic then
appealed to the CA.

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us

DENYING the appeal filed in this case and AFFIRMING the decision of the lower court.[24]
The CA held that respondents-claimants could not be prejudiced by a declaration that the
lands they occupied since time immemorial were part of a forest reserve.
Again, the OSG sought reconsideration but it was similarly denied.[25] Hence, the present
petition under Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria
Macapagal-Arroyo issued Proclamation No. 1064[26] classifying Boracay Island into four
hundred (400) hectares of reserved forest land (protection purposes) and six hundred
twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable).
The Proclamation likewise provided for a fifteen-meter buffer zone on each side of the
centerline of roads and trails, reserved for right-of-way and which shall form part of the area
reserved for forest land protection purposes.
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and
other landowners[29] in Boracay filed with this Court an original petition for prohibition,
mandamus, and nullification of Proclamation No. 1064.[30] They allege that the
Proclamation infringed on their prior vested rights over portions of Boracay. They have
been in continued possession of their respective lots in Boracay since time immemorial.
They have also invested billions of pesos in developing their lands and building
internationally renowned first class resorts on their lots.[31]
Petitioners-claimants contended that there is no need for a proclamation reclassifying
Boracay into agricultural land. Being classified as neither mineral nor timber land, the
island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926,
known as the first Public Land Act.[32] Thus, their possession in the concept of owner for
the required period entitled them to judicial confirmation of imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right
over their occupied portions in the island. Boracay is an unclassified public forest land
pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed portions of the
island are inalienable and cannot be the subject of judicial confirmation of imperfect title. It
is only the executive department, not the courts, which has authority to reclassify lands of
the public domain into alienable and disposable lands. There is a need for a positive
government act in order to release the lots for disposition.
On November 21, 2006, this Court ordered the consolidation of the two petitions as they
principally involve the same issues on the land classification of Boracay Island.[33]
Issues
G.R. No. 167707

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

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 382 pose any legal obstacle for respondents, and all those similarly situated, to acquire title
to their occupied lands in Boracay Island.[34]

G.R. No. 173775

Petitioners-claimants hoist five (5) issues, namely:
I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT
OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME
IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE
PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS
OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN
ON JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS
DEFINED BY SEC. 3a, PD 705?
II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE
OWNERSHIP OVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE
THE FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF
IMPERFECT TITLE?
III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND
DISPOSABLE UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR
PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS SYSTEM?
IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE
PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR
LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE
CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR
SEC. 4(a) OF RA 6657.

Proclamation No. 1801[38] issued by then President Marcos; and (c) Proclamation No.
1064[39] issued by President Gloria Macapagal-Arroyo. We shall proceed to determine
their rights to apply for judicial confirmation of imperfect title under these laws and
executive acts.
But first, a peek at the Regalian principle and the power of the executive to reclassify lands
of the public domain.
The 1935 Constitution classified lands of the public domain into agricultural, forest or
timber.[40] Meanwhile, the 1973 Constitution provided the following divisions: agricultural,
industrial or commercial, residential, resettlement, mineral, timber or forest and grazing
lands, and such other classes as may be provided by law,[41] giving the government great
leeway for classification.[42] Then the 1987 Constitution reverted to the 1935 Constitution
classification with one addition: national parks.[43] Of these, only agricultural lands may be
alienated.[44] Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never
been expressly and administratively classified under any of these grand divisions. Boracay
was an unclassified land of the public domain.
The Regalian Doctrine dictates that all lands of the public domain belong to the State, that
the State is the source of any asserted right to ownership of land and charged with the
conservation of such patrimony.[45] The doctrine has been consistently adopted under the
1935, 1973, and 1987 Constitutions.[46]
All lands not otherwise appearing to be clearly within private ownership are presumed to
belong to the State.[47] Thus, all lands that have not been acquired from the government,
either by purchase or by grant, belong to the State as part of the inalienable public domain.
[48] Necessarily, it is up to the State to determine if lands of the public domain will be
disposed of for private ownership. The government, as the agent of the state, is possessed
of the plenary power as the persona in law to determine who shall be the favored recipients
of public lands, as well as under what terms they may be granted such privilege, not
excluding the placing of obstacles in the way of their exercise of what otherwise would be
ordinary acts of ownership.[49]

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

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

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

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

Our Ruling
Regalian Doctrine and power of the executive
to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for judicial
confirmation of imperfect title, namely: (a) Philippine Bill of 1902[36] in relation to Act No.
926, later amended and/or superseded by Act No. 2874 and CA No. 141;[37] (b)

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

promulgation of the Maura Law, or until April 17, 1895. Otherwise, the lands would revert
to the State.[58]

title. The provision was last amended by PD No. 1073,[73] which now provides for
possession and occupation of the land applied for since June 12, 1945, or earlier.[74]

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

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

The first law governing the disposition of public lands in the Philippines under American
rule was embodied in the Philippine Bill of 1902.[60] By this law, lands of the public domain
in the Philippine Islands were classified into three (3) grand divisions, to wit: agricultural,
mineral, and timber or forest lands.[61] The act provided for, among others, the disposal of
mineral lands by means of absolute grant (freehold system) and by lease (leasehold
system).[62] It also provided the definition by exclusion of agricultural public lands.[63]
Interpreting the meaning of agricultural lands under the Philippine Bill of 1902, the Court
declared in Mapa v. Insular Government:[64]
x x x In other words, that the phrase agricultural land as used in Act No. 926 means
those public lands acquired from Spain which are not timber or mineral lands. x x x[65]
(Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as
the Land Registration Act. The act established a system of registration by which recorded
title becomes absolute, indefeasible, and imprescriptible. This is known as the Torrens
system.[66]
Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which
was the first Public Land Act. The Act introduced the homestead system and made
provisions for judicial and administrative confirmation of imperfect titles and for the sale or
lease of public lands. It permitted corporations regardless of the nationality of persons
owning the controlling stock to lease or purchase lands of the public domain.[67] Under the
Act, open, continuous, exclusive, and notorious possession and occupation of agricultural
lands for the next ten (10) years preceding July 26, 1904 was sufficient for judicial
confirmation of imperfect title.[68]
On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as
the second Public Land Act. This new, more comprehensive law limited the exploitation of
agricultural lands to Filipinos and Americans and citizens of other countries which gave
Filipinos the same privileges. For judicial confirmation of title, possession and occupation
en concepto dueo since time immemorial, or since July 26, 1894, was required.[69]
After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on
December 1, 1936. To this day, CA No. 141, as amended, remains as the existing general
law governing the classification and disposition of lands of the public domain other than
timber and mineral lands,[70] and privately owned lands which reverted to the State.[71]
Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession
and occupation of lands of the public domain since time immemorial or since July 26, 1894.
However, this provision was superseded by Republic Act (RA) No. 1942,[72] which
provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the
Property Registration Decree. It was enacted to codify the various laws relative to
registration of property.[78] It governs registration of lands under the Torrens system as
well as unregistered lands, including chattel mortgages.[79]
A positive act declaring land as alienable and disposable is required. In keeping with the
presumption of State ownership, the Court has time and again emphasized that there must
be a positive act of the government, such as an official proclamation,[80] declassifying
inalienable public land into disposable land for agricultural or other purposes.[81] In fact,
Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have
been officially delimited and classified.[82]
The burden of proof in overcoming the presumption of State ownership of the lands of the
public domain is on the person applying for registration (or claiming ownership), who must
prove that the land subject of the application is alienable or disposable.[83] To overcome
this presumption, incontrovertible evidence must be established that the land subject of the
application (or claim) is alienable or disposable.[84] There must still be a positive act
declaring land of the public domain as alienable and disposable. To prove that the land
subject of an application for registration is alienable, the applicant must establish the
existence of a positive act of the government such as a presidential proclamation or an
executive order; an administrative action; investigation reports of Bureau of Lands
investigators; and a legislative act or a statute.[85] The applicant may also secure a
certification from the government that the land claimed to have been possessed for the
required number of years is alienable and disposable.[86]
In the case at bar, no such proclamation, executive order, administrative action, report,
statute, or certification was presented to the Court. The records are bereft of evidence
showing that, prior to 2006, the portions of Boracay occupied by private claimants were
subject of a government proclamation that the land is alienable and disposable. Absent
such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands
occupied by private claimants were already open to disposition before 2006. Matters of
land classification or reclassification cannot be assumed. They call for proof.[87]
Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it,
agricultural lands. Private claimants posit that Boracay was already an agricultural land
pursuant to the old cases Ankron v. Government of the Philippine Islands (1919)[88] and
De Aldecoa v. The Insular Government (1909).[89] These cases were decided under the
provisions of the Philippine Bill of 1902 and Act No. 926. There is a statement in these old
cases that in the absence of evidence to the contrary, that in each case the lands are
agricultural lands until the contrary is shown.[90]
Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not
have the effect of converting the whole of Boracay Island or portions of it into agricultural

lands. It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely
provided the manner through which land registration courts would classify lands of the
public domain. Whether the land would be classified as timber, mineral, or agricultural
depended on proof presented in each case.
Ankron and De Aldecoa were decided at a time when the President of the Philippines had
no power to classify lands of the public domain into mineral, timber, and agricultural. At
that time, the courts were free to make corresponding classifications in justiciable cases, or
were vested with implicit power to do so, depending upon the preponderance of the
evidence.[91] This was the Courts ruling in Heirs of the Late Spouses Pedro S. Palanca
and Soterranea Rafols Vda. De Palanca v. Republic,[92] in which it stated, through Justice
Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that a particular land need not be formally released by
an act of the Executive before it can be deemed open to private ownership, citing the cases
of Ramos v. Director of Lands and Ankron v. Government of the Philippine Islands.
xxxx
Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is
misplaced. These cases were decided under the Philippine Bill of 1902 and the first Public
Land Act No. 926 enacted by the Philippine Commission on October 7, 1926, under which
there was no legal provision vesting in the Chief Executive or President of the Philippines
the power to classify lands of the public domain into mineral, timber and agricultural so that
the courts then were free to make corresponding classifications in justiciable cases, or were
vested with implicit power to do so, depending upon the preponderance of the evidence.
[93]
To aid the courts in resolving land registration cases under Act No. 926, it was then
necessary to devise a presumption on land classification. Thus evolved the dictum in
Ankron that the courts have a right to presume, in the absence of evidence to the contrary,
that in each case the lands are agricultural lands until the contrary is shown.[94]

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument
that all lands of the public domain had been automatically reclassified as disposable and
alienable agricultural lands. By no stretch of imagination did the presumption convert all
lands of the public domain into agricultural lands.
If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926
would have automatically made all lands in the Philippines, except those already classified
as timber or mineral land, alienable and disposable lands. That would take these lands out
of State ownership and worse, would be utterly inconsistent with and totally repugnant to
the long-entrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land registration cases
brought under the provisions of Act No. 926, or more specifically those cases dealing with
judicial and administrative confirmation of imperfect titles. The presumption applies to an
applicant for judicial or administrative conformation of imperfect title under Act No. 926. It
certainly cannot apply to landowners, such as private claimants or their predecessors-ininterest, who failed to avail themselves of the benefits of Act No. 926. As to them, their

land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned
by the State.
In any case, the assumption in Ankron and De Aldecoa was not absolute. Land
classification was, in the end, dependent on proof. If there was proof that the land was
better suited for non-agricultural uses, the courts could adjudge it as a mineral or timber
land despite the presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in
effect that whether the particular land in question belongs to one class or another is a
question of fact. The mere fact that a tract of land has trees upon it or has mineral within it
is not of itself sufficient to declare that one is forestry land and the other, mineral land.
There must be some proof of the extent and present or future value of the forestry and of
the minerals. While, as we have just said, many definitions have been given for
agriculture, forestry, and mineral lands, and that in each case it is a question of fact,
we think it is safe to say that in order to be forestry or mineral land the proof must show that
it is more valuable for the forestry or the mineral which it contains than it is for agricultural
purposes. (Sec. 7, Act No. 1148.) It is not sufficient to show that there exists some trees
upon the land or that it bears some mineral. Land may be classified as forestry or mineral
today, and, by reason of the exhaustion of the timber or mineral, be classified as
agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the
discovery of valuable minerals, lands classified as agricultural today may be differently
classified tomorrow. Each case must be decided upon the proof in that particular case,
having regard for its present or future value for one or the other purposes. We believe,
however, considering the fact that it is a matter of public knowledge that a majority of the
lands in the Philippine Islands are agricultural lands that the courts have a right to presume,
in the absence of evidence to the contrary, that in each case the lands are agricultural
lands until the contrary is shown. Whatever the land involved in a particular land
registration case is forestry or mineral land must, therefore, be a matter of proof. Its
superior value for one purpose or the other is a question of fact to be settled by the proof in
each particular case. The fact that the land is a manglar [mangrove swamp] is not
sufficient for the courts to decide whether it is agricultural, forestry, or mineral land. It may
perchance belong to one or the other of said classes of land. The Government, in the first
instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what
portions of public land shall be considered forestry land, unless private interests have
intervened before such reservation is made. In the latter case, whether the land is
agricultural, forestry, or mineral, is a question of proof. Until private interests have
intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for
itself what portions of the public domain shall be set aside and reserved as forestry or
mineral land. (Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry,
supra)[95] (Emphasis ours)
Since 1919, courts were no longer free to determine the classification of lands from the
facts of each case, except those that have already became private lands.[96] Act No.
2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the Executive
Department, through the President, the exclusive prerogative to classify or reclassify public
lands into alienable or disposable, mineral or forest.96-a Since then, courts no longer had
the authority, whether express or implied, to determine the classification of lands of the
public domain.[97]
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933,
[98] did not present a justiciable case for determination by the land registration court of the
propertys land classification. Simply put, there was no opportunity for the courts then to

resolve if the land the Boracay occupants are now claiming were agricultural lands. When
Act No. 926 was supplanted by Act No. 2874 in 1919, without an application for judicial
confirmation having been filed by private claimants or their predecessors-in-interest, the
courts were no longer authorized to determine the propertys land classification. Hence,
private claimants cannot bank on Act No. 926.
We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of
Deeds of Manila,[100] which was decided in 1947 when CA No. 141, vesting the Executive
with the sole power to classify lands of the public domain was already in effect. Krivenko
cited the old cases Mapa v. Insular Government,[101] De Aldecoa v. The Insular
Government,[102] and Ankron v. Government of the Philippine Islands.[103]
Krivenko, however, is not controlling here because it involved a totally different issue. The
pertinent issue in Krivenko was whether residential lots were included in the general
classification of agricultural lands; and if so, whether an alien could acquire a residential lot.
This Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution[104]
from acquiring agricultural land, which included residential lots. Here, the issue is whether
unclassified lands of the public domain are automatically deemed agricultural.
Notably, the definition of agricultural public lands mentioned in Krivenko relied on the old
cases decided prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.
[105] As We have already stated, those cases cannot apply here, since they were decided
when the Executive did not have the authority to classify lands as agricultural, timber, or
mineral.
Private claimants continued possession under Act No. 926 does not create a presumption
that the land is alienable. Private claimants also contend that their continued possession of
portions of Boracay Island for the requisite period of ten (10) years under Act No. 926[106]
ipso facto converted the island into private ownership. Hence, they may apply for a title in
their name.
A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.[107]
Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz v.
Secretary of Environment and Natural Resources,107-a ruled:
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the
Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling and leasing of portions of the
public domain of the Philippine Islands, and prescribed the terms and conditions to enable
persons to perfect their titles to public lands in the Islands. It also provided for the issuance
of patents to certain native settlers upon public lands, for the establishment of town sites
and sale of lots therein, for the completion of imperfect titles, and for the cancellation or
confirmation of Spanish concessions and grants in the Islands. In short, the Public Land
Act operated on the assumption that title to public lands in the Philippine Islands remained
in the government; and that the governments title to public land sprung from the Treaty of
Paris and other subsequent treaties between Spain and the United States. The term public
land referred to all lands of the public domain whose title still remained in the government
and are thrown open to private appropriation and settlement, and excluded the patrimonial
property of the government and the friar lands.

Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and
Public Land Act No. 926, mere possession by private individuals of lands creates the legal
presumption that the lands are alienable and disposable.[108] (Emphasis Ours)
Except for lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to Proclamation No. 1064. Such unclassified lands are considered
public forest under PD No. 705. The DENR[109] and the National Mapping and Resource
Information Authority[110] certify that Boracay Island is an unclassified land of the public
domain.
PD No. 705 issued by President Marcos categorized all unclassified lands of the public
domain as public forest. Section 3(a) of PD No. 705 defines a public forest as a mass of
lands of the public domain which has not been the subject of the present system of
classification for the determination of which lands are needed for forest purpose and which
are not. Applying PD No. 705, all unclassified lands, including those in Boracay Island, are
ipso facto considered public forests. PD No. 705, however, respects titles already existing
prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under PD No. 705 may
seem to be out of touch with the present realities in the island. Boracay, no doubt, has
been partly stripped of its forest cover to pave the way for commercial developments. As a
premier tourist destination for local and foreign tourists, Boracay appears more of a
commercial island resort, rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on
the island;[111] that the island has already been stripped of its forest cover; or that the
implementation of Proclamation No. 1064 will destroy the islands tourism industry, do not
negate its character as public forest.
Forests, in the context of both the Public Land Act and the Constitution[112] classifying
lands of the public domain into agricultural, forest or timber, mineral lands, and national
parks, do not necessarily refer to large tracts of wooded land or expanses covered by
dense growths of trees and underbrushes.[113] The discussion in Heirs of Amunategui v.
Director of Forestry[114] is particularly instructive:
A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest cover.
Parcels of land classified as forest land may actually be covered with grass or planted to
crops by kaingin cultivators or other farmers. Forest lands do not have to be on
mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa
palms, and other trees growing in brackish or sea water may also be classified as forest
land. The classification is descriptive of its legal nature or status and does not have to be
descriptive of what the land actually looks like. Unless and until the land classified as
forest is released in an official proclamation to that effect so that it may form part of the
disposable agricultural lands of the public domain, the rules on confirmation of imperfect
title do not apply.[115] (Emphasis supplied)
There is a big difference between forest as defined in a dictionary and forest or
timber land as a classification of lands of the public domain as appearing in our statutes.
One is descriptive of what appears on the land while the other is a legal status, a
classification for legal purposes.[116] At any rate, the Court is tasked to determine the
legal status of Boracay Island, and not look into its physical layout. Hence, even if its forest
cover has been replaced by beach resorts, restaurants and other commercial

establishments, it has not been automatically converted from public forest to alienable
agricultural land.
Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of
imperfect title. The proclamation did not convert Boracay into an agricultural land.
However, private claimants argue that Proclamation No. 1801 issued by then President
Marcos in 1978 entitles them to judicial confirmation of imperfect title. The Proclamation
classified Boracay, among other islands, as a tourist zone. Private claimants assert that,
as a tourist spot, the island is susceptible of private ownership.
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into
an agricultural land. There is nothing in the law or the Circular which made Boracay Island
an agricultural land. The reference in Circular No. 3-82 to private lands[117] and areas
declared as alienable and disposable[118] does not by itself classify the entire island as
agricultural. Notably, Circular No. 3-82 makes reference not only to private lands and
areas but also to public forested lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut without prior authority from the PTA. All
forested areas in public lands are declared forest reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely recognizes that
the island can be classified by the Executive department pursuant to its powers under CA
No. 141. In fact, Section 5 of the Circular recognizes the then Bureau of Forest
Developments authority to declare areas in the island as alienable and disposable when it
provides:
Subsistence farming, in areas declared as alienable and disposable by the Bureau of
Forest Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify
Boracay Island as alienable and disposable land. If President Marcos intended to classify
the island as alienable and disposable or forest, or both, he would have identified the
specific limits of each, as President Arroyo did in Proclamation No. 1064. This was not
done in Proclamation No. 1801.
The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the
declaration of Boracay Island, together with other islands, caves and peninsulas in the
Philippines, as a tourist zone and marine reserve to be administered by the PTA to
ensure the concentrated efforts of the public and private sectors in the development of the
areas tourism potential with due regard for ecological balance in the marine environment.
Simply put, the proclamation is aimed at administering the islands for tourism and
ecological purposes. It does not address the areas alienability.[119]
More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64)
other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands
in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol,
Coron Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in
Cagayan de Oro, and Misamis Oriental, to name a few. If the designation of Boracay
Island as tourist zone makes it alienable and disposable by virtue of Proclamation No.
1801, all the other areas mentioned would likewise be declared wide open for private
disposition. That could not have been, and is clearly beyond, the intent of the
proclamation.

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as
alienable and opened the same to private ownership. Sections 6 and 7 of CA No. 141[120]
provide that it is only the President, upon the recommendation of the proper department
head, who has the authority to classify the lands of the public domain into alienable or
disposable, timber and mineral lands.[121]
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the
authority granted to her to classify lands of the public domain, presumably subject to
existing vested rights. Classification of public lands is the exclusive prerogative of the
Executive Department, through the Office of the President. Courts have no authority to do
so.[122] Absent such classification, the land remains unclassified until released and
rendered open to disposition.[123]
Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and
628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter
buffer zone on each side of the center line of roads and trails, which are reserved for right
of way and which shall form part of the area reserved for forest land protection purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much less
unconstitutional, about the classification of Boracay Island made by the President through
Proclamation No. 1064. It was within her authority to make such classification, subject to
existing vested rights.
Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private
claimants further assert that Proclamation No. 1064 violates the provision of the
Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public
forests into agricultural lands. They claim that since Boracay is a public forest under PD
No. 705, President Arroyo can no longer convert it into an agricultural land without running
afoul of Section 4(a) of RA No. 6657, thus:
SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific limits
of the public domain.
That Boracay Island was classified as a public forest under PD No. 705 did not bar the
Executive from later converting it into agricultural land. Boracay Island still remained an
unclassified land of the public domain despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,[124] the
Court stated that unclassified lands are public forests.
While it is true that the land classification map does not categorically state that the islands
are public forests, the fact that they were unclassified lands leads to the same result. In the

absence of the classification as mineral or timber land, the land remains unclassified land
until released and rendered open to disposition.[125] (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a reclassification of land. If the
land had never been previously classified, as in the case of Boracay, there can be no
prohibited reclassification under the agrarian law. We agree with the opinion of the
Department of Justice[126] on this point:
Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word
reclassification. Where there has been no previous classification of public forest [referring,
we repeat, to the mass of the public domain which has not been the subject of the present
system of classification for purposes of determining which are needed for forest purposes
and which are not] into permanent forest or forest reserves or some other forest uses under
the Revised Forestry Code, there can be no reclassification of forest lands to speak of
within the meaning of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of
forest lands to agricultural lands without a prior law delimiting the limits of the public
domain, does not, and cannot, apply to those lands of the public domain, denominated as
public forest under the Revised Forestry Code, which have not been previously
determined, or classified, as needed for forest purposes in accordance with the provisions
of the Revised Forestry Code.[127]
Private claimants are not entitled to apply for judicial confirmation of imperfect title under
CA No. 141. Neither do they have vested rights over the occupied lands under the said
law. There are two requisites for judicial confirmation of imperfect or incomplete title under
CA No. 141, namely: (1) open, continuous, exclusive, and notorious possession and
occupation of the subject land by himself or through his predecessors-in-interest under a
bona fide claim of ownership since time immemorial or from June 12, 1945; and (2) the
classification of the land as alienable and disposable land of the public domain.[128]
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not
convert portions of Boracay Island into an agricultural land. The island remained an
unclassified land of the public domain and, applying the Regalian doctrine, is considered
State property.
Private claimants bid for judicial confirmation of imperfect title, relying on the Philippine Bill
of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the absence of the
second element of alienable and disposable land. Their entitlement to a government grant
under our present Public Land Act presupposes that the land possessed and applied for is
already alienable and disposable. This is clear from the wording of the law itself.[129]
Where the land is not alienable and disposable, possession of the land, no matter how
long, cannot confer ownership or possessory rights.[130]
Neither may private claimants apply for judicial confirmation of imperfect title under
Proclamation No. 1064, with respect to those lands which were classified as agricultural
lands. Private claimants failed to prove the first element of open, continuous, exclusive,
and notorious possession of their lands in Boracay since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that
private claimants complied with the requisite period of possession.

The tax declarations in the name of private claimants are insufficient to prove the first
element of possession. We note that the earliest of the tax declarations in the name of
private claimants were issued in 1993. Being of recent dates, the tax declarations are not
sufficient to convince this Court that the period of possession and occupation commenced
on June 12, 1945.
Private claimants insist that they have a vested right in Boracay, having been in possession
of the island for a long time. They have invested millions of pesos in developing the island
into a tourist spot. They say their continued possession and investments give them a
vested right which cannot be unilaterally rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private claimants do not
automatically give them a vested right in Boracay. Nor do these give them a right to apply
for a title to the land they are presently occupying. This Court is constitutionally bound to
decide cases based on the evidence presented and the laws applicable. As the law and
jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of
title over their occupied portions in Boracay even with their continued possession and
considerable investment in the island.
One Last Note
The Court is aware that millions of pesos have been invested for the development of
Boracay Island, making it a by-word in the local and international tourism industry. The
Court also notes that for a number of years, thousands of people have called the island
their home. While the Court commiserates with private claimants plight, We are bound to
apply the law strictly and judiciously. This is the law and it should prevail. Ito ang batas at
ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be eligible to apply for
judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this
does not denote their automatic ouster from the residential, commercial, and other areas
they possess now classified as agricultural. Neither will this mean the loss of their
substantial investments on their occupied alienable lands. Lack of title does not
necessarily mean lack of right to possess.
For one thing, those with lawful possession may claim good faith as builders of
improvements. They can take steps to preserve or protect their possession. For another,
they may look into other modes of applying for original registration of title, such as by
homestead[131] or sales patent,[132] subject to the conditions imposed by law.
More realistically, Congress may enact a law to entitle private claimants to acquire title to
their occupied lots or to exempt them from certain requirements under the present land
laws. There is one such bill[133] now pending in the House of Representatives. Whether
that bill or a similar bill will become a law is for Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step necessary to open up
the island to private ownership. This gesture may not be sufficient to appease some
sectors which view the classification of the island partially into a forest reserve as absurd.
That the island is no longer overrun by trees, however, does not becloud the vision to
protect its remaining forest cover and to strike a healthy balance between progress and
ecology. Ecological conservation is as important as economic progress.

To be sure, forest lands are fundamental to our nations survival. Their promotion and
protection are not just fancy rhetoric for politicians and activists. These are needs that
become more urgent as destruction of our environment gets prevalent and difficult to
control. As aptly observed by Justice Conrado Sanchez in 1968 in Director of Forestry v.
Munoz:[134]
The view this Court takes of the cases at bar is but in adherence to public policy that should
be followed with respect to forest lands. Many have written much, and many more have
spoken, and quite often, about the pressing need for forest preservation, conservation,
protection, development and reforestation. Not without justification. For, forests constitute
a vital segment of any country's natural resources. It is of common knowledge by now that
absence of the necessary green cover on our lands produces a number of adverse or ill
effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which
they supply are emptied of their contents. The fish disappear. Denuded areas become dust
bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile
topsoil is washed away; geological erosion results. With erosion come the dreaded floods
that wreak havoc and destruction to property crops, livestock, houses, and highways
not to mention precious human lives. Indeed, the foregoing observations should be written
down in a lumbermans decalogue.[135]
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals
Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

PERALTA, and
MENDOZA, JJ.
Promulgated:
April 15, 2010
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

Petitioners seek a review of the March 29, 2006 Decision[1] and the June 20, 2006
Resolution of the Court of Appeals (CA), denying their motion for reconsideration.
The case involves a 13,552-square meter portion of a parcel of land covered by Original
Certificate of Title (OCT) No. P-11880[2] in the name of the Heirs of Victor Flores, namely:
Julio, Benito, Dolores, and Virginia, herein petitioners. OCT No. P-11880 was issued
pursuant to Homestead Patent No. 138892, given on November 12, 1973. This property is
located in the Municipality of Piddig, Ilocos Norte.

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.
SO ORDERED.

THIRD DIVISION
JULIO FLORES (deceased), substituted by his heirs; BENITO FLORES (deceased),
substituted by his heirs; DOLORES FLORES and VIRGINIA FLORES-DALERE,
represented by their Attorney-in-Fact, JIMENA TOMAS,
Petitioners,
- versus MARCIANO BAGAOISAN,
Respondent.
G.R. No. 173365
Present:
CORONA, J.,
Chairperson,
VELASCO, JR.,
NACHURA,

On December 20, 1976, petitioners, together with their mother Luisa Viernes, executed a
Deed of Confirmation and Quitclaim[3] in favor of Vicente T. Lazo. Through this document,
petitioners agreed to sell, cede, convey, grant, and transfer by way of QUITCLAIM the
subject property to Lazo. Thereafter, respondent, Marciano Bagaoisan, bought the subject
property from Lazo, as evidenced by a Deed of Absolute Sale dated February 20, 1977.[4]
On April 4, 1983, Viernes and petitioner Virginia Flores-Dalere executed a Palawag A
Nasapataan (Affidavit), attesting to the fact that they conveyed to Lazo the subject property
through the Deed of Confirmation and Quitclaim. Affiants also attested that Lazo and his
predecessors-in-interest had been in possession of the disputed portion since 1940 and
that the same was mistakenly included in the patent application of Victor Flores.
On June 21, 1996, respondent filed an action for ownership, quieting of title, partition and
damages against petitioners, praying that he be declared as the true owner of the subject
property and that the entire property covered by OCT No. P-11880 be partitioned among
them. In the Complaint, respondent asserted that he was a tenant of Lazo and that he had
been working on the subjec0t property since time immemorial. He said that, since he
bought the property in 1977, he possessed the land as owner and paid real property tax
thereon. He claimed that the subject property was erroneously covered by OCT No. P11880 and that petitioners have previously recognized such fact, considering that they
executed an affidavit acknowledging the erroneous inclusion of the property in their title. He
averred that, lately, petitioners had denied his ownership of the land and asserted their
ownership thereof by working and harvesting the crops thereon.[5]
In answer, petitioners stated that they did not relinquish ownership or possession of the
land to Lazo. While admitting that they executed the Deed of Confirmation and Quitclaim in
favor of Lazo, petitioners claimed that they were misled into signing the same, with Lazo

taking advantage of their lack of education. Petitioners contended that it was too late for
respondent to assert title to the disputed portion because the title covering the same had
already become indefeasible one year after it was issued.[6]

Consequently, petitioners filed this petition for review, insisting that the Deed of
Confirmation and Quitclaim is void as its contents were not fully explained to them, and it
violates Section 118 of the Public Land Act (Commonwealth Act No. 141), which prohibits
the alienation of lands acquired through a homestead patent.

On February 3, 2000, the Regional Trial Court rendered a decision, disposing as follows:
The petition is meritorious.
WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the
defendants, jointly and severally:
1.
To recognize plaintiff Marciano Bagaoisan as owner of the 13,552 sq.m. parcel of
land situated in Barrio Maab-abucay (now Estancia) Municipality of Piddig, Ilocos Norte;
2.
To cease and desist from further possession of said parcel of land and to immediately
reconvey the same to plaintiff;
3.
To pay said plaintiff such amount as would be the peso equivalent of 100 cavanes of
palay per year, for the loss of harvest he incurred in 1994, 1995, 1996, 1997, 1998 and
1999, computed as the price then obtaining in said years; and
4.

Without going into petitioners allegation that they were unaware of the contents of the
Deed of Confirmation and Quitclaim, we nonetheless hold that the deed is void for violating
the five-year prohibitory period against alienation of lands acquired through homestead
patent as provided under Section 118 of the Public Land Act, which states:
Sec. 118. Except in favor of the Government or any of its branches, units, or institutions,
lands acquired under free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of the application and for a term of
five years from and after the date of issuance of the patent and grant, nor shall they
become liable to the satisfaction of any debt contracted prior to the expiration of said
period, but the improvements or crops on the land may be mortgaged or pledged to
qualified persons, associations, or corporations.

To pay plaintiff the amount of P20,000.00 as reasonable attorneys fees.

No pronouncement as to costs.

No alienation, transfer, or conveyance of any homestead after five years and before twentyfive years after the issuance of title shall be valid without the approval of the Secretary of
Agriculture and Commerce, which approval shall not be denied except on constitutional and
legal grounds.

SO ORDERED.[7]
On appeal, the CA upheld the validity of the Deed of Confirmation and Quitclaim. In light of
petitioners admission that they signed the deed after it was read to them, the CA dismissed
their assertion that they did not know the contents of the document. It further declared that
the deed merely confirmed petitioners non-ownership of the subject property and it did not
involve an alienation or encumbrance. Accordingly, it concluded that the five-year
prohibition against alienation of a property awarded through homestead patent did not
apply.
The CA likewise rejected petitioners contention that the action was barred by prescription
or laches. Citing Vital v. Anore,[8] the CA held that where the registered owner knew that
the property described in the patent and the certificate of title belonged to another, any
statute barring an action by the real owner would not apply, and the true owner might file an
action to settle the issue of ownership.
The dispositive portion of the assailed March 29, 2006 Decision reads:
WHEREFORE, the appeal is hereby DISMISSED for lack of sufficient merit. The assailed 3
February 2000 decision by the Regional Trial Court, Laoag City, in Civil Case No. 11048-14
is hereby AFFIRMED.
SO ORDERED.[9]
The CA likewise denied petitioners motion for reconsideration in its Resolution dated June
20, 2006.[10]

We do not agree with the CA that the Deed of Confirmation and Quitclaim merely
confirmed petitioners non-ownership of the subject property. The deed uses the words
sell, cede, convey, grant, and transfer. These words admit of no other interpretation
than that the subject property was indeed being transferred to Lazo.
The use of the words confirmation and quitclaim in the title of the document was an
obvious attempt to circumvent the prohibition imposed by law. Labeling the deed as a
confirmation of non-ownership or as a quitclaim of rights would actually make no difference,
as the effect would still be the alienation or conveyance of the property. The act of
conveyance would still fall within the ambit of the prohibition. To validate such an
arrangement would be to throw the door open to all possible fraudulent subterfuges and
schemes that persons interested in land given to a homesteader may devise to circumvent
and defeat the legal provisions prohibiting their alienation within five years from the
issuance of the patent.[11]
It bears stressing that the law was enacted to give the homesteader or patentee every
chance to preserve for himself and his family the land that the State had gratuitously given
to him as a reward for his labor in cleaning and cultivating it.[12] Its basic objective, as the
Court had occasion to stress, is to promote public policy, that is to provide home and
decent living for destitutes, aimed at providing a class of independent small landholders
which is the bulwark of peace and order.[13] Hence, any act which would have the effect of
removing the property subject of the patent from the hands of a grantee will be struck down
for being violative of the law.
To repeat, the conveyance of a homestead before the expiration of the five-year prohibitory
period following the issuance of the homestead patent is null and void and cannot be

enforced, for it is not within the competence of any citizen to barter away what public policy
by law seeks to preserve.[14] There is, therefore, no doubt that the Deed of Confirmation
and Quitclaim, which was executed three years after the homestead patent was issued, is
void and cannot be enforced.

SO ORDERED.

Furthermore, respondent failed to present sufficient evidence to surmount the

conclusiveness and indefeasibility of the certificate of title.
An OCT issued on the strength of a homestead patent partakes of the nature of a certificate
issued in a judicial proceeding and becomes indefeasible and incontrovertible upon the
expiration of one year from the date of the promulgation of the Director of Lands order for
the issuance of the patent.[15] After the lapse of such period, the sole remedy of a
landowner, whose property has been wrongfully or erroneously registered in anothers
name is to file an action for reconveyance so long as the property has not passed to an
innocent purchaser for value.[16] In order that an action for reconveyance based on fraud
may prosper, it is essential for the party seeking reconveyance to prove, by clear and
convincing evidence, his title to the property and the fact of fraud.[17]

FIRST DIVISION
G.R. No. 168464

Respondent did not allege in his complaint or prove during the trial that fraud attended the
registration of the subject property in petitioners names. In fact, there was no allegation as
to how petitioners were able to secure title to the property despite the alleged ownership of
respondents predecessor.
More importantly, respondent failed to prove that he has title to the subject property. He
merely asserted that his predecessors-in-interest had been in possession of the property
since 1940. The basic presumption is that lands of whatever classification belong to the
State and evidence of a land grant must be well-nigh incontrovertible. The Public Land
Act requires that the possessor or his predecessors-in-interest must be in open,
continuous, exclusive, and notorious possession and occupation of the land for at least
thirty years. When these conditions are complied with, the possessor is deemed to have
acquired, by operation of law, a right to a government grant, without the necessity of a
certificate of title being issued. The land ceases to be a part of the public domain and
beyond the authority of the Director of Lands,[18] such that the latter would have no more
right to issue a homestead patent to another person.
Respondent merely established that he had been in possession of the property and that he
had been paying real property taxes thereon since 1977. The only evidence on record
attesting to the fact that respondent and his predecessors-in-interest had been in
possession of the property since 1940 was the affidavit executed by some of petitioners.
This, however, would not suffice.
In closing, it would be well to mention that the execution of the Deed of Confirmation and
Quitclaim within the five-year prohibitory period also makes the homestead patent
susceptible to cancellation, and the subject property being reverted to the public domain.
[19] It is the Solicitor General, on behalf of the government, who is by law mandated to
institute an action for reversion.[20] Should the Solicitor General decide to file such an
action, it is in that action that petitioners defenses, particularly their alleged lack of
knowledge of the contents of the deed, will have to be resolved.
WHEREFORE, the petition is GRANTED. The March 29, 2006 Decision of the Court of
Appeals and its June 20, 2006 Resolution are REVERSED and SET ASIDE. The complaint
for ownership, quieting of title and damages is DISMISSED, without prejudice to an action
for reversion that the Solicitor General may decide to file for the State.

January 23, 2006

ZENAIDA RAMOS-BALALIO, Petitioner,

vs.
ROLANDO RAMOS, EUSEBIO I. RAMOS EVANGELISTO GARCIA, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition assails the Decision1 of the Court of Appeals dated February 16, 2005 in CAG.R. CV No. 58644 reversing the Decision2 of the Regional Trial Court (RTC) of Roxas,
Isabela, Branch 23, dated July 17, 1996, in Civil Case No. Br. 23-357 which ruled that
herein petitioner Zenaida Ramos-Balalio had a superior right to possess Lot No. 204, Pls15, situated at Muoz, Roxas, Isabela, as well as its Resolution3 dated June 14, 2005
denying the motion for reconsideration.
As culled from the records, petitioner Zenaida and her brother Alexander (now deceased)
are the children of spouses Susana Bueno and Abundio Ramos. The spouses started
occupying Lot No. 204 in 1938. Abundio died in 1944. Susana met her second husband,
respondent Eusebio Ramos in 1946, with whom she had five children, one of whom is
respondent Rolando.
In the interim, prior to 1958, Susana discovered that Felimon Domingo applied for a sales
patent over the subject parcel of land which she opposed. The Bureau of Lands resolved
the dispute, thus:
In the light of the foregoing facts, it is clear that Felimon B. Domingo has not entered,
possessed or cultivated the land in question and therefore he has not acquired any
preference right thereto. Upon the other hand contestant Susana Bueno Vda. de Ramos
and her children have sufficiently established their right of preference over the land except
the one hectare Cemetery site, on the basis of their continuous occupation and cultivation
and their valuable improvements introduced thereon.
Wherefore, it is ordered that the Sales Application No. 21992 of Felimon B. Domingo be as
hereby it is rejected, forfeiting in favor of the Government whatever amount have been paid

on account thereof. The land in question shall be subdivided so as to exclude therefrom the
one hectare portion in the northwestern part of the land, which shall be reserved as barrio
cemetery site, while the remaining area is hereby allocated to SUSANA BUENO VDA DE
RAMOS who shall file an appropriate application therefore within sixty (60) days after the
survey thereof at her own expense, it not appearing that this Office has received the
homestead (new) application allegedly filed by her for the same land.

occupying only 17,689 sq. m., more or less. His possession now is increased to two (2)
hectares which includes the area being possessed by Eusebio Ramos;

SO ORDERED.4

4. The middle portion consisting of 24,410 sq. m., more or less, and immediately South of
the cemetery, and also South of the portion adjudicated to the heirs of Alexander is now
given to Zenaida Ramos Balalio as her valid share of lot 204, the partition being also East
to West;

It was alleged that as Susana accompanied her husband Eusebio, a soldier, wherever he
was assigned, Susanas father, George Bueno, and daughter, petitioner Zenaida continued
the cultivation and possession of the subject land. Sometime later, Susana sold the land to
petitioner who, in turn, partitioned it among herself, her brother, Alexander, and respondent
Rolando and his siblings. The partition was not registered but Deeds of Sale were executed
in favor of Rolando and Alexander.

3. The remaining portion of the share of Alexander Ramos is 4,410 sq. m., more or less.
This is adjudicated in favor of his heirs. This portion now corresponds to the area
immediately South of the area of Evangelisto Garcia, the partition being from East to West;

5. South of the share of Zenaida consisting also of 24,410 sq. m., more or less, is the valid
share of Rolando Ramos and his full blooded brother and sisters namely Robin, Corazon,
Myrna and Mila, all surnamed Ramos;

Petitioner thereafter mortgaged her share; however, it came to her knowledge that
respondents Rolando and Eusebio had usurped her share and deprived the mortgagees of
possession over the land. After settling the mortgage, petitioner filed a case for recovery of
inheritance, possession and damages with a petition for preliminary mandatory injunction.

6. Rolando Ramos and Eusebio Ramos are ordered jointly and severally to pay Zenaida
Ramos:

The trial court had the land surveyed. Subdividing the land into Lots 204-A to 204-H5 based
on the actual possessor or occupant, the survey plan revealed the following:

b. One thousand Five Hundred (P1,500.00) Pesos as appearance fees of her lawyer;

a. Ten Thousand (P10,000.00) Pesos as attorneys fees;

c. Ten Thousand (P10,000.00) Pesos as incidental expenses relative to the case;

1. Plaintiff Zenaida Ramos Balalio has no possession, occupation, and cultivation
whatsoever of lot 204, Pls-15;
2. Rolando Ramos is in possession and cultivation of lot 204-F, lot 204-G and lot 204-C,
with a total area of 43,957 sq. m., more or less;
3. Eusebio Ramos is occupying and cultivating lot 204-A with an area of 4,994 sq. m., more
or less;

d. One Hundred Thousand Eight Hundred (P100,800.00) Pesos as the reasonable owners
share of the produce of the land of Zenaida Ramos from 1975 to the present, with an
interest of 6% per annum until fully paid;
7. The Clerk of Court and the Sheriff are ordered to repair to the land in question and
partition said land in accordance with the tenor of this decision;
8. And to pay the cost.

4. Lot 204-B consisting of 17,685 sq. m., more or less, is possessed and cultivated by
Evangelisto Garcia, another intervenor. His occupation is very much less than the two (2)
hectares sold to him by Alexander Ramos. It is short by 2,311 sq. m., more or less;
5. The total area of the land in question, after deducting one (1) hectare occupied by the
cemetery is 73,150 sq. m., more or less.6
On July 17, 1996, the trial court rendered its decision holding that petitioner was deprived
of her right to cultivation and possession of her share of Lot No. 204 and thus ruled:
AS A CONSEQUENCE OF ALL THE FOREGOING, judgment is hereby rendered in favor
of plaintiff, Zenaida Ramos and against Rolando Ramos, defendant, and Eusebio Ramos,
intervenor.
1. Ordering Eusebio Ramos to vacate lot 204-A and surrender it to Evangelisto Garcia
because he is not entitled to any portion of the lot in question, it being the conjugal property
of the first marriage of Susana Bueno to Abundio Ramos;
2. Evangelisto Garcia is adjudicated the first two (2) hectares from the North and East of
the cemetery, as he validly bought the area from Alexander Ramos. He is presently

SO ORDERED.7
On appeal, the Court of Appeals found that neither Zenaida nor Alexander complied with
the homestead application requirements in order to acquire superior vested right. As a
consequence, it reversed the decision of the trial court, to wit:
As a consequence of the foregoing, the Court rules in favor of appellants as to the fourth
error and finds that the contract supposedly dividing that property among Zenaida, Rolando
Ramos and Alexander Ramos cannot be enforced because neither of the parties therein
can claim any vested right over the subject parcel land which is still part of the public
domain.
Also, prescinding from the above ruling, the intervention of Eusebio Ramos and
Evangelisto Garcia should likewise be dismissed. As to Eusebio, since Susana never filed
an application for homestead, her right never ripened to ownership which she could have
transmitted to her heirs. As to Evangelisto Garcia who supposedly purchased that share of
Alexander (an heir of Susana), since the vendor never inherited anything from Susana
there was nothing which he (Evangelisto) could have bought. In fine, neither of the
intervenors could claim any right which they can enforce in court.

WHEREFORE, the Decision of the Regional Trial Court of Roxas, Isabela, Branch 23, in
Civil Case No. Br. 23-357 is REVERSED and the "Complaint" filed by plaintiff-appellee as
well as the respective "Answer in Intervention" of Eusebio Ramos and Evangelisto Garcia
are all hereby ordered DISMISSED.
SO ORDERED.8
Hence, this petition on the following assigned errors:
7.1. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE
TRIAL COURTS DECISION AND DISMISSING THE PETITIONERS COMPLAINT.
7.2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER IS NOT IN PRIOR POSSESSION OF THE SAID LAND, AND DECLARING
THAT SHE HAS NO RIGHT WHATSOEVER TO THE DISPUTED LAND.
7.3. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE ISSUE OF
ACCION PUBLICIANA IN THE CASE AT BAR AND CONFINED ITSELF TO THE CLAIM
OF RECOVERY OF INHERITANCE.9
The petition is partly meritorious.
Under the Regalian doctrine, all lands of the public domain belong to the State and those
lands not appearing to be clearly within private ownership are presumed to belong to the
State.10 Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Alienable lands of the public domain shall be limited to
agricultural lands.11
Commonwealth Act No. 141 (1936), or the Public Land Act, as amended by Presidential
Decree No. 1073 (1977), remains to be the general law governing the classification and
disposition of alienable lands of the public domain. It enumerates the different modes of
acquisition of these lands and prescribes the terms and conditions to enable private
persons to perfect their title to them. It is, therefore, the applicable law to the case before
us.
A homestead patent, such as the subject of the instant case, is one of the modes to acquire
title to public lands suitable for agricultural purposes. Under the Public Land Act, a
homestead patent is one issued to any citizen of this country, over the age of 18 years or
the head of a family, and who is not the owner of more than 2412 hectares of land in the
country.13 To be qualified, the applicant must show that he has resided continuously for at
least one year in the municipality where the land is situated and must have cultivated at
least one-fifth of the land applied for.14
In the case at bar, petitioner Zenaida asserts her right to a parcel of agricultural land that
her parents Susana and Abundio had possessed since 1938. She claims that, for some
time, the cultivation of this land was left to her and her grandfather and that, following the
death of her father Abundio, the land was allegedly sold to her by her mother Susana.
Zenaidas argument is flawed because it assumes that her parents had perfected their title
over the land and that they could validly convey the same to third persons, whether by sale
or by inheritance. However, a careful examination of the records shows that petitioner has
not satisfactorily established that a valid application for homestead patent was filed by her

parents. The decision of the Bureau of Lands in 1958 only addressed Zenaidas familys
right of preference over the land, in view of their possession and cultivation of the land.
Nonetheless, the Bureau of Lands ordered the filing of an appropriate application for its
registration which indicates that as of that time, there was as yet no valid application
filed.15
The purported sale, therefore, between petitioner and her mother cannot be given effect,
nor can it be a source of right for Zenaida, because Susana did not have the authority to
sell what did not belong to her. The invalidation of the sale consequently nullifies the
partition of the property among Zenaida, Alexander, and Rolando and his siblings because
Zenaida could not have disposed of the land which she did not own.
For the same reason, neither Eusebio nor Rolando can claim any right whatsoever as heirs
of Susana. Their claim evidently relies on the provision of the Public Land Act which states:
Section 105. If at any time the applicant or grantee shall die before the issuance of the
patent or the final grant of the land, or during the life of the lease, or while the applicant or
grantee still has obligations pending towards the Government, in accordance with this Act,
he shall be succeeded in his rights and obligations with respect to the land applied for or
granted or leased under this Act by his heirs in law, who shall be entitled to have issued to
them the patent or final concession if they show that they have complied with the
requirements therefor, and who shall be subrogated in all his rights and obligations for the
purposes of this Act. (Emphasis added)
The reliance is misplaced because the cited provision speaks of an applicant, grantee, or
lessee. Susana was not one of these. In her lifetime, despite her possession and cultivation
of the land, she failed to apply for a homestead patent and to acquire any vested right that
Eusebio or Rolando can inherit. As such, the land remains part of the public domain.
Furthermore, Eusebio and Rolando cannot invoke their prior possession and occupation of
the land because the same cannot be considered as adverse, open, public, peaceful and to
the exclusion of all.
Hence, the subject land remains to be part of the public domain and rightfully belongs to
the State. As held by the Court of Appeals, none of the parties obtained a defensible title to
the property which can be upheld by the Court. Nonetheless, the possession of the land is
different from the issue of its ownership. Petitioner argues that her petition may be treated
as an accion publiciana and not merely an action for recovery of inheritance.
An accion publiciana is an action for the recovery of the right to possess and is a plenary
action in an ordinary civil proceeding to determine the better right of possession of realty
independently of title.16 In this case, the issue is whether Zenaida, as an applicant for
public land, may be considered as having any right to the land occupied, which may entitle
her to sue in courts for the return of the possession thereof.
We find that Zenaida has proven prior possession of the portion of land she claims as her
share, which possession antedates the filing of the homestead application. She produced
evidence showing that she has filed a verified application for the registration of the land
with the Bureau of Lands on August 10, 1971,17 which is still pending. The documents
remain uncontested and the application has not been assailed by any of the parties to the
case. She alleged that during the lifetime of her mother, she and her maternal grandfather
cultivated and occupied the land.

Moreover, Zenaida presented tax declarations both in her name and that of her
predecessor-in-interest (mother Susana Bueno) covering the property. Time and again, we
have held that although tax declarations or realty tax payments of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner for no one in his right mind would be paying taxes for a property that is
not in his actual or at least constructive possession.18 They constitute at least proof that
the holder has a claim of title over the property. The voluntary declaration of a piece of
property for taxation purposes manifests not only ones sincere and honest desire to obtain
title to the property and announces his adverse claim against the State and all other
interested parties, but also the intention to contribute needed revenues to the
Government.19

2.
That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can
acquire real properties pursuant to the provisions of the Articles of Incorporation particularly
on the provision of its secondary purposes (paragraph (9), Exhibit 'M-l');
3.
That the land subject of the Land Registration proceeding was ancestrally
acquired by Acme Plywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel
and Acer Infiel, both members of the Dumagat tribe and as such are cultural minorities;
4.
That the constitution of the Republic of the Philippines of 1935 is applicable as
the sale took place on October 29, 1962;

All told, petitioner Zenaidas uncontested and verified application for a homestead patent
coupled with her open and notorious occupation of the land convinces us of her preferential
right to possess the land claimed, which entitles her to be protected by the law in such
possession.

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;

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of

Appeals dated February 16, 2005 is MODIFIED, insofar as to grant petitioner Zenaida
Ramos-Balalio preferential possession of the portion of Lot 204, Pls-15, situated in Muoz,
Roxas, Isabela, as delineated in the Decision of the Regional Trial Court of Roxas, Isabela,
Branch 23, dated July 17, 1996.

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;

SO ORDERED.
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.

NARVASA, J.:
The Director of Lands has brought this appeal by certiorari from a judgment of the
Intermediate Appellate Court affirming a decision of the Court of First Instance of Isabela,
which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of
land measuring 481, 390 square meters, more or less, acquired by it from Mariano and
Acer Infiel, members of the Dumagat tribe.
The registration proceedings were for confirmation of title under Section 48 of
Commonwealth Act No. 141 (The Public Land Act). as amended: and the appealed
judgment sums up the findings of the trial court in said proceedings in this wise:
1.
That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a
corporation duly organized in accordance with the laws of the Republic of the Philippines
and registered with the Securities and Exchange Commission on December 23, 1959;

8.
That applicant Acme Plywood & Veneer Co. Inc., has introduced more than
Forty-Five Million (P45,000,000.00) Pesos worth of improvements, said improvements were
seen by the Court during its ocular investigation of the land sought to be registered on
September 18, 1982;
9.
That the ownership and possession of the land sought to be registered by the
applicant was duly recognized by the government when the Municipal Officials of
Maconacon, Isabela, have negotiated for the donation of the townsite from Acme Plywood
& Veneer Co., Inc., and this negotiation came to reality when the Board of Directors of the
Acme Plywood & Veneer Co., Inc., had donated a part of the land bought by the Company
from the Infiels for the townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979,
and which donation was accepted by the Municipal Government of Maconacon, Isabela
(Exh. 'N-l'), during their special session on November 22, 1979.
The Director of Lands takes no issue with any of these findings except as to the
applicability of the 1935 Constitution to the matter at hand. Concerning this, he asserts that,
the registration proceedings have been commenced only on July 17, 1981, or long after the
1973 Constitution had gone into effect, the latter is the correctly applicable law; and since
section 11 of its Article XIV prohibits private corporations or associations from holding
alienable lands of the public domain, except by lease not to exceed 1,000 hectares (a
prohibition not found in the 1935 Constitution which was in force in 1962 when Acme
purchased the lands in question from the Infiels), it was reversible error to decree
registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No.
141, as amended, reads:

SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province
where the land is located for confirmation of their claims, and the issuance of a certificate of
title therefor, under the Land Registration Act, to wit:

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:

xxx

..., 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

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

Finally, it may be observed that the constitutional prohibition makes no distinction between
(on the one hand) alienable agricultural public lands as to which no occupant has an
imperfect title and (on the other hand) alienable lands of the public domain as to which an
occupant has on imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make any distinction or
qualification. The prohibition applies to alienable public lands as to which a Torrens title
may be secured under section 48(b). The proceeding under section 48(b) 'presupposes
that the land is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA
641, 644).
The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning
with Carino in 1909 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 Carino involving the Decree/Regulations of
June 25, 1880 for adjustment of royal lands wrongfully occupied by private individuals in
the Philippine Islands. It was ruled that:
It is true that the language of articles 4 and 5 5 attributes title to those 'who may prove'
possession for the necessary time and we do not overlook the argument that this means
may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated
to convey to the mind of an Igorot chief the notion that ancient family possessions were in
danger, if he had read every word of it. The words 'may prove' (acrediten) as well or better,
in view of the other provisions, might be taken to mean when called upon to do so in any
litigation. There are indications that registration was expected from all but none sufficient to
show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by
the decree, if not by earlier law. ...
That ruling assumed a more doctrinal character because expressed in more categorical
language, in Susi:
.... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established
in paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the

necessary requirements for a grant by the Government were complied with, for he has
been in actual and physical possession, personally and through his predecessors, of an
agricultural land of the public domain openly, continuously, exclusively and publicly since
July 26, 1984, with a right to a certificate of title to said land under the provisions of Chapter
VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi
had already acquired, by operation of law not only a right to a grant, but a grant of the
Government, for it is not necessary that a certificate of title should be issued in order that
said grant may be sanctioned by the courts, an application therefore is sufficient, under the
provisions of section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the
land in question by a grant of the State, it had already ceased to be of the public domain
and had become private property, at least by presumption, of Valentin Susi, beyond the
control of the Director of Lands. Consequently, in selling the land in question of Angela
Razon, the Director of Lands disposed of a land over which he had no longer any title or
control, and the sale thus made was void and of no effect, and Angela Razon did not
thereby acquire any right. 6
Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of
Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs. Cabanatuan, 9 Miguel vs. Court of
Appeals 10 and Herico vs. Dar, supra, by invoking and affirming the Susi doctrine have
firmly rooted it in jurisprudence.
Herico, in particular, appears to be squarely affirmative: 11
.... Secondly, under the provisions of Republic Act No. 1942, which the respondent Court
held to be inapplicable to the petitioner's case, with the latter's proven occupation and
cultivation for more than 30 years since 1914, by himself and by his predecessors-ininterest, title over the land has vested on petitioner so as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by
free patent. ....
xxx

xxx

xxx

As interpreted in several cases, when the conditions as specified in the foregoing provision
are complied with, the possessor is deemed to have acquired, by operation of law, a right
to a grant, a government grant, without the necessity of a certificate of title being issued.
The land, therefore, ceases to be of the public domain and beyond the authority of the
Director of Lands to dispose of. The application for confirmation is mere formality, the lack
of which does not affect the legal sufficiency of the title as would be evidenced by the
patent and the Torrens title to be issued upon the strength of said patent. 12
Nothing can more clearly demonstrate the logical inevitability of considering possession of
public land which is of the character and duration prescribed by statute as the equivalent of
an express grant from the State than the dictum of the statute itself 13 that the
possessor(s) "... shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title .... " No proof
being admissible to overcome a conclusive presumption, confirmation proceedings would,
in truth be little more than a formality, at the most limited to ascertaining whether the
possession claimed is of the required character and length of time; and registration
thereunder would not confer title, but simply recognize a title already vested. The
proceedings would not originally convert the land from public to private land, but only
confirm such a conversion already affected by operation of law from the moment the
required period of possession became complete. As was so well put in Carino, "... (T)here
are indications that registration was expected from all, but none sufficient to show that, for

want of it, ownership actually gained would be lost. The effect of the proof, wherever made,
was not to confer title, but simply to establish it, as already conferred by the decree, if not
by earlier law."
If it is accepted-as it must be-that the land was already private land to which the Infiels had
a legally sufficient and transferable title on October 29, 1962 when Acme acquired it from
said owners, it must also be conceded that Acme had a perfect right to make such
acquisition, there being nothing in the 1935 Constitution then in force (or, for that matter, in
the 1973 Constitution which came into effect later) prohibiting corporations from acquiring
and owning private lands.
Even on the proposition that the land remained technically "public" land, despite
immemorial possession of the Infiels and their ancestors, until title in their favor was
actually confirmed in appropriate proceedings under the Public Land Act, there can be no
serious question of Acmes right to acquire the land at the time it did, there also being
nothing in the 1935 Constitution that might be construed to prohibit corporations from
purchasing or acquiring interests in public land to which the vendor had already acquired
that type of so-called "incomplete" or "imperfect" title. The only limitation then extant was
that corporations could not acquire, hold or lease public agricultural lands in excess of
1,024 hectares. The purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids corporations from owning
lands of the public domain cannot defeat a right already vested before that law came into
effect, or invalidate transactions then perfectly valid and proper. This Court has already
held, in analogous circumstances, that the Constitution cannot impair vested rights.
We hold that the said constitutional prohibition 14 has no retroactive application to the sales
application of Binan Development Co., Inc. because it had already acquired a vested right
to the land applied for at the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by the new Constitution.
Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase
public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner'
prohibition action is barred by the doctrine of vested rights in constitutional law.
xxx

xxx

xxx

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

xxx

xxx

In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the
right of the corporation to purchase the land in question had become fixed and established
and was no longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the issuance of a patent
had the effect of segregating the said land from the public domain. The corporation's right
to obtain a patent for the land is protected by law. It cannot be deprived of that right without
due process (Director of Lands vs. CA, 123 Phil. 919).<re||an1w> 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 the
same benefit to their lawful successor-in-interest by valid conveyance which violates no
constitutional mandate.
The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling
in Meralco must be reconsidered and no longer deemed to be binding precedent. The
correct rule, as enunciated in the line of cases already referred to, is that alienable public
land held by a possessor, personally or through his predecessors-in-interest, openly,
continuously and exclusively for the prescribed statutory period (30 years under The Public
Land Act, as amended) is converted to private property by the mere lapse or completion of
said period, ipso jure. Following that rule and on the basis of the undisputed facts, the land
subject of this appeal was already private property at the time it was acquired from the
Infiels by Acme. Acme thereby acquired a registrable title, there being at the time no
prohibition against said corporation's holding or owning private land. The objection that, as
a juridical person, Acme is not qualified to apply for judicial confirmation of title under
section 48(b) of the Public Land Act is technical, rather than substantial and, again, finds its
answer in the dissent in Meralco:
6.
To uphold respondent judge's denial of Meralco's application on the technicality
that the Public Land Act allows only citizens of the Philippines who are natural persons to
apply for confirmation of their title would be impractical and would just give rise to
multiplicity of court actions. Assuming that there was a technical error not having filed the
application for registration in the name of the Piguing spouses as the original owners and
vendors, still it is conceded that there is no prohibition against their sale of the land to the
applicant Meralco and neither is there any prohibition against the application being refiled
with retroactive effect in the name of the original owners and vendors (as such natural
persons) with the end result of their application being granted, because of their indisputable
acquisition of ownership by operation of law and the conclusive presumption therein
provided in their favor. It should not be necessary to go through all the rituals at the great
cost of refiling of all such applications in their names and adding to the overcrowded court
dockets when the Court can after all these years dispose of it here and now. (See
Francisco vs. City of Davao)
The ends of justice would best be served, therefore, by considering the applications for
confirmation as amended to conform to the evidence, i.e. as filed in the names of the
original persons who as natural persons are duly qualified to apply for formal confirmation
of the title that they had acquired by conclusive presumption and mandate of the Public
Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino
corporations duly qualified to hold and own private lands) and granting the applications for
confirmation of title to the private lands so acquired and sold or exchanged.

While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a
real sense, it breaks no precedent, but only reaffirms and re-established, as it were,
doctrines the soundness of which has passed the test of searching examination and inquiry
in many past cases. Indeed, it is worth noting that the majority opinion, as well as the
concurring opinions of Chief Justice Fernando and Justice Abad Santos, in Meralco rested
chiefly on the proposition that the petitioner therein, a juridical person, was disqualified from
applying for confirmation of an imperfect title to public land under Section 48(b) of the
Public Land Act. Reference to the 1973 Constitution and its Article XIV, Section 11, was
only tangential limited to a brief paragraph in the main opinion, and may, in that context, be
considered as essentially obiter. Meralco, in short, decided no constitutional question.
WHEREFORE, there being no reversible error in the appealed judgment of the
Intermediate Appellate Court, the same is hereby affirmed, without costs in this instance.
SO ORDERED.
THIRD DIVISION
G.R. No. 157306 November 25, 2005
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
ANATALIA ACTUB TIU ESTONILO and ANDREA ACTUB TIU PO (in Substitution of
NAZARIA BOMBEO), Respondents.
DECISION
PANGANIBAN, J.:
To segregate portions of the public domain as reservations for the use of the Republic of
the Philippines or any of its branches, like the Armed Forces of the Philippines, all that is
needed is a presidential proclamation to that effect. A court judgment is not necessary to
make the proclamation effective or valid.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to reverse
and set aside the February 21, 2003 Decision2 of the Court of Appeals (CA) in CA-GR CV
No. 66807. The assailed CA Decision disposed as follows:
"WHEREFORE, the foregoing premises considered, the ruling of the trial court is hereby
AFFIRMED."3
The Facts
The antecedents were summarized by the CA as follows:

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.

"This case originated from an application for registration of a parcel of land known as Lot
No. 4318 of the cadastral survey of Cagayan de Oro consisting [of] an area of 357,866
square meters, filed by [the] original [a]pplicant, Nazaria Bombeo with the defunct Court of
First Instance of Misamis Oriental on July 22, 1954. In her application, Bombeo claimed
that said parcel of land was previously owned and possessed by a certain Rosendo Bacas

since 1894 until it was sold to her by the heirs of Rosendo Bacas, represented by their
attorney-in-fact and heir himself, Calistro Bacas by virtue of an Absolute Sale of Realty
(Exhibit A) on June 14, 1954.
"After due notice and publication of said application, only the Provincial Fiscal of Misamis
Oriental, in behalf of the Chief of Staff of the Armed Forces of the Philippines [AFP] and the
Director of [the] Bureau of Land[s] filed its opposition thereto, alleging that Lot 4318 is not a
registrable land pursuant to Presidential Proclamation No. 265, which took effect on March
31, 1938, and which declared Lot 4318 reserved for the use of the Philippine Army, to wit:
PRESIDENTIAL PROCLAMATION NO. 265. RESERVING FOR THE USE OF THE
PHILIPPINE ARMY THREE PARCELS OF THE PUBLIC DOMAIN SITUATED IN THE
BARRIOS OF BULUA AND CARMEN, MUNICIPALITY OF CAGAYAN, PROVINCE OF
MISAMIS ORIENTAL, ISLAND OF MINDANAO.

The Court of Appeals ruled that Presidential Proclamation No. 265 (Proc 265) failed to
segregate effectively Lot 4318 as part of the military reservation. The CA said that the
proclamation was "not self-executory and self-adjudicating considering that there is a need
to determine private rights of claimants over lands sought to be reserved."
Moreover, the appellate court agreed with the trial court that respondents were able to
establish with sufficient evidence their right to have the land registered under their names.
It acknowledged that possession by respondents predecessors-in-interest had ripened into
an imperfect title of ownership, subject to judicial confirmation. It added that ownership of
the land would still be deemed vested in respondents, "in view of their almost half a century
of open, continuous, adverse and peaceful possession," even if possession by their
predecessors-in-interest were not taken into consideration.
Hence, this Petition.6

Upon the recommendation of the Secretary of Agriculture and Commerce and pursuant to
the provision of section eighty-three of Commonwealth Act Number One Hundred and
Forty-one, I hereby withdraw from sale of settlement and reserve for the use of the
Philippine Army, under the administration of the Chief of Staff subject to private rights, if
any thereby, the following described parcels of public domain, situated in the barrios of
Bulua and Carmen, Municipality of Cagayan, Province of Misamis Oriental, Island of
Mindanao, and particularly described in Bureau of Lands SWO-15234, to wit:

Issues
Petitioner raises the following issues for our consideration:
"I.

Lot No. 4318. x x x.

Whether or not the Court of Appeals gravely erred in holding that Presidential Proclamation
No. 265 did not effectively segregate Lot 4318 from the public domain.

Containing an area of 354,377 square meters.

"II.

"During the initial hearing set on February 12, 1955, an Order of General Default was
issued by the lower court. On July 29, 1959, Bombeo died and was substituted by her
daughter Cipriana Actub Tiu who eventually died on December 5, 1990. Thereafter, due to
intervening deaths of the parties, the case literally went to slumber until it was re-raffled to
the Regional Trial Court (Branch 17) of Misamis Oriental on October 16, 1991 and was
pursued anew by the daughters of Cipriana Actub Tiu, namely, Anatalia Actub Tiu Estonilo
and Andrea Actub Tiu Po. On the other hand, Oppositors Bureau of Lands and Chief of
Staff of the Armed Forces of the Philippines, in behalf of the Republic of the Philippines;
were represented by the Provincial Prosecutor Florencia Abbu and Major Raul Llacuna of
JAGO [Judge Advocate Generals Office]. On May 27, 1994, the trial court confirmed title
over Lot 4318 to Nazaria Bombeo substituted by her heirs Anatalia Actub Tiu Estonilo and
Andrea Actub Tiu Po and ordered registration thereof under the names of the latter.
Consequently, Oppositors Bureau of Lands and Chief of Staff of Armed Forces of the
Philippines, through the Solicitor Generals Office; filed an appeal to said decision x x x.

Whether or not the Court of Appeals gravely erred in finding that respondents were able to
establish that they have already acquired private right over Lot 4318 which already
amounted to a title.
"III.
Whether or not the Court of Appeals gravely erred in holding that the passage of
Presidential Proclamation No. 330 which excludes from the operation of Presidential
Proclamation No. 265 Lot 4318 negates the claim of the AFP that the land in dispute is
actively possessed and used by it."7
In short, the main issue is whether respondents have duly proven their title to the subject
land and may thus register it under the Public Land Act.
The Courts Ruling

"During the pendency of the appeal, however, Presidential Proclamation No. 3304 took
effect on June 20, 2000, excluding Lot 4318 from the operation of Presidential
Proclamation No. 265[.]

The Petition is meritorious.

Main Issue:

xxxxxxxxx
Validity of Respondents Title
"In view of the aforesaid decree, x x x [respondents urged the CA] to finally put to rest the
controversy in their favor considering that the opposition of the Republic has no longer any
basis."5
Ruling of the Court of Appeals

The Public Land Act8 requires applicants for confirmation of imperfect titles to prove (1)
that the land is alienable public land;9 and (2) that their open, continuous, exclusive and
notorious possession and occupation of the property has taken place either since time
immemorial or for the period prescribed by law. When the legal conditions are complied

with, the possessor of the land -- by operation of law -- acquires a right to a government
grant, without necessitating the issuance of a certificate of title.10
After a meticulous review of the Decisions of both the trial and the appellate courts, as well
as of the evidence on record, the Court finds that respondents failed to satisfy the above
legal requirements.
Nature of Lot 4318
It is not disputed that Proc 265 specifically reserved Lot 4318 for the use of the Philippine
Army. Respondents maintain, though, that the land was not effectively segregated as a
military reservation by the Proclamation. Relying on Baloy v. CA,11 they allege that a
petition for reservation or a court judgment declaring the reservation is necessary to make
Proc 265 effective. They maintain that the provision in the Proclamation subjecting the
reservation to private rights presumes that notice and hearing will be afforded to all persons
claiming ownership rights over the land. Otherwise, the reservation would amount to a
deprivation of property without due process of law. They further allege that the AFP failed
to observe these requirements, thus causing the reservation to be ineffectual.
Petitioner, however, argues that the Public Land Act does not require a judicial order to
create a military reservation. It contends that the proviso requiring the reservation to be
subject to private rights means that persons claiming rights over the reserved land are not
precluded from proving their claims. It contends further that respondents were afforded due
process when their application for registration of title to Lot 4318 was heard by the lower
courts.
We agree with petitioner. The segregation of land for a public purpose is governed by the
Public Land Act, the pertinent provisions of which are as follows:
"SECTION 83. Upon the recommendation of the Secretary of Agriculture and Natural
Resources, the President may designate by proclamation any tract or tracts of land of the
public domain as reservations for the use of the Republic of the Philippines or of any of its
branches, or of the inhabitants thereof, in accordance with regulations prescribed for this
purposes, or for quasi-public uses or purposes when the public interest requires it,
including reservations for highways, rights of way for railroads, hydraulic power sites,
irrigation systems, communal pastures or leguas comunales,
public parks, public quarries, public fishponds, workingmen's village and other
improvements for the public benefit."
"SECTION 86. A certified copy of every proclamation of the President issued under the
provisions of this title shall be forwarded to the Director of Lands for record in his office, and
a copy of this record shall be forwarded to the Register of Deeds of the province or city
where the land lies. Upon receipt of such certified copy, the Director of Lands shall order
the immediate survey of the proposed reservation if the land has not yet been surveyed,
and as soon as the plat has been completed, he shall proceed in accordance with the next
following section."
"SECTION 87. If all the lands included in the proclamation of the President are not
registered under the Land Registration Act, the Solicitor General, if requested to do so by
the Secretary of Agriculture and Natural Resources, shall proceed in accordance with the
provision of Section fifty-three of this Act."

"SECTION 53. It shall be lawful for the Director of Lands, whenever in the opinion of the
President the public interests shall require it, to cause to be filed in the proper Court of First
Instance, through the Solicitor General or the officer acting in his stead, a petition against
the holder, claimant, possessor, or occupant of any land who shall not have voluntarily
come in under the provisions of this chapter or of the Land Registration Act, stating in
substance that the title of such holder, claimant, possessor, or occupant is open to
discussion; or that the boundaries of any such land which has not been brought into court
as aforesaid are open to question; or that it is advisable that the title to such lands be
settled and adjudicated, and praying that the title to any such land or the boundaries
thereof or the right to occupancy thereof be settled and adjudicated. The judicial
proceedings under this section shall be in accordance with the laws on adjudication of title
in cadastral proceedings."
Clearly, under the above provisions, only a positive act of the President is needed to
segregate a piece of land for a public purpose. It must be noted that while Section 53
grants authority to the director of lands -- through the solicitor general -- to file a petition
against claimants of the reserved land, the filing of that petition is not mandatory. The
director of lands is required to file a petition only "whenever in the opinion of the President
public interest requires it."
Inapplicable is the ruling in Baloy v. CA12 requiring, after due notice and hearing, a judicial
declaration of reservation. The subject of the application for registration in Baloy was
originally private land, as evidenced by a possessory information title issued in the
applicants favor during the Spanish era. As will be explained shortly, Lot 4318 in the
present case is unquestionably public land. The only issue is whether respondents have
acquired title to the property.
Moreover, the governing law in Baloy was Act 627.13 Under the provisions of that law, the
private character of the land shall be respected absent any court order declaring that the
property has become public. In the case before us, Proc 265 was issued pursuant to
Commonwealth Act (CA) No. 141. Accordingly, only a positive act of the President is
required to create a government reservation.
Verily, the Proclamation successfully segregated Lot 4318 as a military reservation.
Consequently, respondents could not have validly occupied it in 1954, because it was
considered inalienable14 since its reservation in 1938.
Respondents Period of Possession
Notwithstanding the reservation in 1938 of Lot 4318 for military use, respondents maintain
their entitlement to have it registered under their names. They allege that their
predecessors-in-interest were already in adverse, open, peaceful and continuous
possession of the property for over 30 years prior to 1938. Thus, they conclude that their
imperfect title had already attached long before the issuance of the Proclamation
segregating the land as a military reservation.
We are not convinced. As a rule, the factual findings of the trial court, when affirmed by the
appellate court, are conclusive and binding on this Court. To this rule, however, there are
settled exceptions; for instance, when the judgment assailed is not supported by sufficient
evidence or is based on a misapprehension of facts.15 We find that these exceptions apply
here.

Land that has not been acquired from the government, either by purchase or by grant,
belongs to the State as part of the public domain.16 For this reason, imperfect titles to
agricultural lands are subjected to rigorous scrutiny before judicial confirmation is
granted.17 In the same manner, persons claiming the protection of "private rights" in order
to exclude their lands from military reservations must show by clear and convincing
evidence that the pieces of property in question have been acquired by a legal method of
acquiring public lands.18

land under the Torrens system, upon the ground that the facts presented did not show that
the petitioner is the owner, in fee simple, of the land which he is attempting to have
registered."

In granting respondents judicial confirmation of their imperfect title, the trial and the
appellate courts gave much weight to the tax declarations presented by the former.
However, while the tax declarations were issued under the names of respondents
predecessors-in-interest, the earliest one presented was issued only in 1954.19 The
Director, Lands Management Bureau v. CA20 held thus:

SO ORDERED.

"x x x. Tax receipts and tax declarations are not incontrovertible evidence of ownership.
They are mere indicia of [a] claim of ownership. In Director of Lands vs. Santiago:

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
PEDRO O. ENCISO, Respondent.

x x x [I]f it is true that the original owner and possessor, Generosa Santiago, had been in
possession since 1925, why were the subject lands declared for taxation purposes for the
first time only in 1968, and in the names of Garcia and Obdin? For although tax receipts
and declarations of ownership for taxation purposes are not incontrovertible evidence of
ownership, they constitute at least proof that the holder had a claim of title over the
property."21
In addition, the lower courts credited the alleged prior possession by Calixto and Rosendo
Bacas, from whom respondents predecessors had purportedly bought the property. This
alleged prior possession, though, was totally devoid of any supporting
evidence on record. Respondents evidence hardly supported the conclusion that their
predecessors-in-interest had been in possession of the land since "time immemorial."
Moreover, as correctly observed by the Office of the Solicitor General, the evidence on
record merely established the transfer of the property from Calixto Bacas to Nazaria
Bombeo. The evidence did not show the nature and the period of the alleged possession
by Calixto and Rosendo Bacas. It is important that applicants for judicial confirmation of
imperfect titles must present specific acts of ownership to substantiate their claims; they
cannot simply offer general statements that are mere conclusions of law rather than factual
evidence of possession.22
It must be stressed that respondents, as applicants, have the burden of proving that they
have an imperfect title to Lot 4318. Even the absence of opposition from the government
does not relieve them of this burden.23 Thus, it was erroneous for the trial and the
appellate courts to hold that the failure of the government to
dislodge respondents, judicially or extrajudicially, from the subject land since 1954 already
amounted to a title.

WHEREFORE, the Petition is GRANTED, and the assailed Decision of the Court of
Appeals is REVERSED and SET ASIDE. The segregation of Lot 4318 as part of a military
reservation is declared VALID. No pronouncement as to costs.

SECOND DIVISION
G.R. No. 160145 November 11, 2005

DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, as
amended, assailing the Decision1 of the Court of Appeals (CA) dated September 26, 2003,
which affirmed the Decision2 of the Regional Trial Court (RTC), Iba, Zambales, Branch 71,
promulgated on July 31, 2001 in LRC Case No. RTC-N-75-I. The CA and the trial court
adjudicated Lot No. 2278-A, Cad. 652-D, Masinloc Cadastre in favor of respondent Pedro
O. Enciso, pursuant to Section 29 of Presidential Decree (P.D.) No. 1529.
The facts, as culled from the records of the case, show that on April 24, 2000, the
respondent, alleging to be the owner in fee simple of a parcel of residential land located in
Barangay South Poblacion, Masinloc, Zambales, filed a petition for land registration before
the RTC of Iba, Zambales. The lot is described as follows:
A parcel of land (Lot 2278-A of the subdivision plan Csd-03-012562-D being a portion of
Lot 2278, Cad. 652-D L.R.C. Rec. No.), situated in the Barrio of South Poblacion,
Municipality of Masinloc, Province of Zambales. Bounded on the NW., along line 1-2 by
Sta. Lucia Street; on the NE., along line 2-3 by Capt. Albright Street; on the SE. & SW.
along line 3-4-1 by Lot 2278-B of the subd. plan. Beginning at a point marked "1" on plan
being N. 39 deg. 35E., 12.05 m. from BLLM.1,
Cad. 652-D.
thence N. 16 deg. 13E., 32.48 m. to point. 2;

In this connection, the Court reiterates the following ruling in Director of Lands v. Agustin:24
thence S. 75 deg. 05E., 44.83 m. to point. 3;
"x x x. The petitioner is not necessarily entitled to have the land registered under the
Torrens system simply because no one appears to oppose his title and to oppose the
registration of his land. He must show, even though there is no opposition, to the
satisfaction of the court, that he is the absolute owner, in fee simple. Courts are not justified
in registering property under the Torrens system, simply because there is no opposition
offered. Courts may, even in the absence of any opposition, deny the registration of the

thence S. 16 deg. 19W., 33.36 m. to point. 4;

thence N. 73 deg. 57W., 44.76 m. to point. of;

beginning; containing an area of ONE THOUSAND FOUR HUNDRED SEVENTY-FIVE

(1,475) square meters. All points referred to are indicated on the plan and are marked on
the ground by P.S. cyl. conc. mons. 15 x 40 cms. Bearings; true; date of original survey;
Sept. 1927-July 1928 and that of the subdivision survey; July 22, 1999 and was approved
on Jan. 20, 2000.3
The respondent averred, inter alia, that he acquired title to the said lot by virtue of an
extrajudicial settlement of estate and quitclaim on March 15, 1999; the said property is not
tenanted or occupied by any person other than the respondent and his family who are in
actual physical possession of the same; and the respondent and his predecessors-ininterest have been in continuous, peaceful, open, notorious, uninterrupted and adverse
possession of the land in the concept of an owner for not less than 30 years immediately
preceding the filing of the application.4
Petitioner Republic of the Philippines, through the Office of the Solicitor General (OSG),
opposed the application on the following grounds: (a) neither the respondent nor his
predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of the subject land since June 12, 1945 or prior thereto; (b) the
respondent failed to adduce any muniment of title and/or the tax declaration with the
application to prove bona fide acquisition of the land applied for or its open, continuous,
exclusive and notorious possession and occupation thereof in the concept of owner since
June 12, 1945 or prior thereto; (c) the alleged tax declaration adverted to in the application
does not appear to be genuine and the tax declarations indicate such possession to be of
recent vintage; (d) the claim of ownership in fee simple on the basis of Spanish title or grant
can no longer be availed of by the respondent considering that he failed to file an
appropriate application for registration within the period of six months from February 16,
1976 as required by P.D. No. 892; and (e) the subject land is a portion of the public domain
belonging to the Republic of the Philippines which is not subject to private appropriation.5
After ascertaining that the jurisdictional requirements for the application were done in
accordance with the law during the initial hearing6 on November 9, 2000, the trial court
issued an Order of Default7 on January 3, 2001 against all persons with the exception of
the government.
The respondent presented tax receipts to show that the property was declared for taxation
purposes in his name. He also testified that he acquired the property by inheritance from
his deceased father, Vicente Enciso, who died on May 18, 1991. He then immediately took
possession of the property and constructed a house thereon in 1991. On March 15, 1999,
he and his siblings executed an extrajudicial settlement of estate where the land was
adjudicated in his favor.
The respondent further narrated that the property was originally owned by the Municipality
of Masinloc, Zambales. On October 5, 1968, the municipality passed Resolution No. 71,8
undertaking to construct a road along the shoreline of the poblacion, but requiring
landowners adjoining the roads to share in the expenses for an inner wall adjacent to their
lots. In view of this, the same resolution provided that:
WHEREAS, where the above landowners share in the construction of the roads, the same
may be given the priority to acquire such additional available areas by purchase, if such
additional areas are not needed by the government for public use, the advances of the
landowners as a result of his [sic] construction (inner wall) be considered as price of the
land, provided that the cost and value of the inner wall exceeds the assessed value of the

land, and if the cost of the inner wall is less than the assessed value of the land, the
landowners will have to pay the corresponding balance to the government; 9
On March 8, 1969, the Municipality of Masinloc, Zambales passed supplementary
Resolution No. 102,10 which stated that in consideration of the financial assistance
extended by the abutting property owners, and because the government no longer needed
the additional areas for public use, the municipality was authorizing the Municipal Mayor to
enter into and sign deeds of purchase between the municipality and the landowners
concerned. Consequently, the Municipal Council of Masinloc, Zambales unanimously
approved Resolution No. 102-A11 dated March 15, 1969, authorizing its mayor to execute
a deed of sale in favor of Honorato Edao, covering a portion of the reclaimed lots no
longer needed for public use. Honorato was thus entitled to buy the lot for his help in
carrying out the project envisioned in Resolution No. 71, and after the submission of an
itemized statement of the cost of the construction of the inner wall along Sta. Lucia Street.
Immediately thereafter, the Municipality of Masinloc, Zambales, represented by its Mayor,
P.A. Edao, executed a Deed of Absolute Sale12 covering a piece of reclaimed land
containing more or less 2,790 square meters in favor of Honorato Edao. The deed stated
that the vendee constructed the inner wall needed to facilitate the fabrication of a portion of
Sta. Lucia Street, which was opposite his lot, and the extensions of Magsaysay and Capt.
Albright Streets at a total expense of P1,683.80. Considering that the assessed value of the
lot was P2,092.50, or P408.70
more than the vendee spent for the construction of the inner wall, the vendee paid P408.70
to the vendor.
The respondent admitted that Honorato was his uncle, being his fathers half-brother.13 He
further narrated that on December 9, 1980, the spouses Honorato and Esperanza Edao
sold the lot to Vicente B. Enciso for P2,092.50 via a Deed of Absolute Sale.14 On January
17, 1981, Vicente Enciso, Natividad Edao Asuncion and Thelma A. Edao entered into a
Deed of Partition15 involving the same parcel of land. Vicente was awarded one-half of the
total area of the property, 1,398 square meters, more or less; Natividad and Thelma got
one-fourth each, or approximately 697.5 square meters individually.
No cross-examination was conducted and no evidence was adduced by the government to
controvert the application for registration.
On May 8, 2001, Director Felino M. Cortez of the Department on Registration submitted the
Report16 of the Land Registration Authority, informing the trial court that it was not in a
position to verify whether the parcel of land subject of registration was already covered by a
land patent and previously approved isolated survey. Acting on this report, the trial court
directed the Lands Management Bureau, the Community Environment and Natural
Resources Office of Iba, Zambales, and the
Department of Environment and Natural Resources Regional Executive Director for Region
III, San Fernando, Pampanga, to submit a report on the status of the parcel of land.17
Without waiting for the final report, the trial court granted the application for registration on
July 31, 2001, the dispositive portion of the decision reads:
WHEREFORE, this Court, after confirming the Order of General Default entered into the
record of this case on January 3, 2001 hereby adjudicates Lot No. 2278-A, Cad. 652-D,
Masinloc Cadastre, containing an area of 1,475 square meters, situated at Brgy. South
Poblacion, Masinloc, Zambales, Philippines, as appearing on the approved Plan No. Csd-

03-012562-D (Exhibit "M") and also in the Technical Description of said lot (Exhibit "K") in
favor of the applicant whose address is at Brgy. South Poblacion, Masinloc, Zambales,
Philippines, in accordance with Section 29 of Presidential Decree No. 1529. This
adjudication however is subject to the various easements/reservations provided for under
pertinent laws, Presidential Decree and/or Presidential Letters of Instruction, which should
be annotated/projected in the title to be issued.

Records reveal that subject land is a residential land owned by the Municipality of Masinloc,
Zambales. The Municipality of Masinloc, through Resolutions 71, 102 and 102-A-29 sold
the subject land to Honorato Edao as evidenced by the Deed of Absolute Sale dated
March 31, 1969 executed by the Municipal Mayor.

Once this decision becomes final, let the corresponding decree and title be issued.

"Art. 423. The property of provinces, cities, and municipalities is divided into property for
public use and patrimonial property."

Article 423 of the Civil Code provides that:

SO ORDERED.18
The trial court ruled that the respondent satisfactorily proved his ownership in fee simple,
as well as the identity of the land sought to be titled. Likewise, the trial court found that the
respondent, as well as his predecessors-in-interest, had been in open, peaceful,
continuous, public, adverse, and under a bona fide claim of ownership. According to the
trial court, there was no evidence that the subject parcel of land was within any government
reservation, or that the applicant was disqualified from owning real property under the
Constitution.19

Properties of political subdivision[s] which are patrimonial in character may be alienated. By

analogy, when a municipalitys properties for public use are no longer intended for such
use, the same become patrimonial and may be the subject of a contract. Thus, the Deed of
Absolute Sale executed by and between the Municipal Mayor of Masinloc and Honorato
Edao was a valid contract. Subject land was likewise sold by Honorato Edao to
petitioner-appellees father, Vicente Enciso, by virtue of a Deed of Absolute Sale. From
then, subject land changed hand until it was acquired by petitioner-appellee when his
siblings executed an Extrajudicial Partition assigning said land to him. It was declared for
taxation purposes in his name under Tax Declaration No. 007-0700R.

The Republic of the Philippines appealed the case before the CA, contending that the trial
court erred in granting the application despite his failure to prove registrable title over Lot
No. 2278-A.

The CA disposed of the appeal on September 26, 2003 and affirmed the decision of the
trial court. The fallo of the decision reads:
WHEREFORE, premises considered, the assailed decision dated July 31, 2001 of the
RTC, Branch 71 of Iba, Zambales in LRC Case No. RTC-N-75-1 is hereby AFFIRMED.
SO ORDERED.20
The petitioner dispensed with the filing of a motion for reconsideration and forthwith filed
the instant petition.
The OSG assigned the following error to the appellate court:
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN GRANTING
RESPONDENTS PETITION FOR REGISTRATION SANS ANY SHOWING THAT THE
SUBJECT PROPERTY WAS PREVIOUSLY DECLARED ALIENABLE AND DISPOSABLE
LANDS OF THE PUBLIC DOMAIN.21
The petitioner contends that the first and primordial element in order to warrant the
registration of title is to show that the land must be an alienable and disposable land of the
public domain. On this note, the petitioner believes that the respondent failed to adduce
any evidence to show that the subject land was already previously declared part of such
alienable and disposable land of the public domain. Furthermore, the petitioner adds that
under the Regalian doctrine, all lands of the public domain belong to the State, and those
not otherwise appearing to be clearly within private ownership are presumed to belong to it.
In his comment to the petition, the respondent asserts that the CA was correct in affirming
the decision of the land registration court. The respondent cites the following justification of
the CA in supporting his claim over Lot No. 2278-A:

Subject land was reclassified as residential. It was already segregated from the public
domain and assumed the character of private ownership. It was reclaimed by the
Municipality of Masinloc and eventually adjudicated to Honorato Edao. The Municipality of
Masinloc must have been in possession of the subject land even before 1969 considering
that it was originally surveyed way back in 1927-1928. In the exercise of its proprietary
right, the Municipality of Masinloc validly conveyed the subject land to petitioner-appellees
predecessors-in-interest. Petitioner-appellees possession and occupation of the subject
land is continuous, public, adverse and uninterrupted and in the concept an owner and no
other person claimed possession and ownership of the same. Article 1137 of the Civil Code
provides:
"Art. 1137. Ownership and other real rights over immovables also prescribed (sic) through
uninterrupted adverse possession thereof for thirty years, without need of titles or of good
faith."
Parenthetically, petitioner-appellees possession tacked with that of his predecessors-ininterest already complied with the thirty (30)-year requirement of open, continuous,
exclusive and notorious possession required under the law.
Prescinding from the foregoing, petitioner-appellee sufficiently and satisfactorily proved his
real and absolute ownership in fee simple; that he has a registrable title over the subject
land and that he complied with the requirements under the law to warrant registration of title
over the subject land.22
The petition is meritorious.
While it is the rule that findings of fact of appellate courts are conclusive upon this Court,
among the recognized exceptions is where the findings of fact are not supported by the
record or are conspicuously erroneous as to constitute a serious abuse of discretion.23
This is the situation in this case.

Section 14(1) of P.D. No. 1529, otherwise known as the Property Registration Decree,
provides:

the subject land under a bona fide claim of acquisition of ownership. As the Court ruled in
Republic v. Alconaba:27

SEC. 14. Who may apply. The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through their
duly authorized representatives:

The law speaks of possession and occupation. Since these words are separated by the
conjunction and, the clear intention of the law is not to make one synonymous with the
other. Possession is broader than occupation because it includes constructive possession.
When, therefore, the law adds the word occupation, it seeks to delimit the all encompassing
effect of constructive possession. Taken together with the words open, continuous,
exclusive and notorious, the word occupation serves to highlight the fact that for an
applicant to qualify, his possession must not be a mere fiction. Actual possession of a land
consists in the manifestation of acts of dominion over it of such a nature as a party would
naturally exercise over his own property.

(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12,
1945, or earlier.
Applicants for registration of title must therefore prove the following: (a) that the land forms
part of the disposable and alienable lands of the public domain; and (b) that they have been
in open, continuous, exclusive,
and notorious possession and occupation of the same under a bona fide claim of
ownership either since time immemorial, or since June 12, 1945. It is not disputed that the
land sought to be registered was originally part of the reclamation project undertaken by the
Municipality of Masinloc, Zambales. The prevailing rule is that reclaimed disposable lands
of the public domain may only be leased and not sold to private parties. These lands
remained sui generis, as the only alienable or disposable lands of the public domain which
the government could not sell to private parties except if the legislature passes a law
authorizing such sale. Reclaimed lands retain their inherent potential as areas for public
use or public service.24 The ownership of lands reclaimed from foreshore areas is rooted in
the Regalian doctrine, which declares that all lands and waters of the public domain belong
to the State.25 On November 7, 1936, the National Assembly approved Commonwealth
Act No. 141, also known as the Public Land Act, compiling all the existing laws on lands of
the public domain. This remains to this day the existing and applicable general law
governing the classification and disposition of lands of the public domain. The State policy
prohibiting the sale of government reclaimed, foreshore and marshy alienable lands of the
public domain to private individuals continued under the 1935 Constitution.
Indeed, there is nothing to support the respondents claim that the property "was
reclassified as residential already segregated from the public domain and assumed the
character of private ownership." At the
moment, it is not clear as to when the proper authorities classified the subject as alienable
and disposable. It must be stressed that incontrovertible evidence must be presented to
establish that the land subject of the application is alienable or disposable.26
According to the CA, "the Municipality of Masinloc must have been in possession of the
subject land even before 1969 considering that it was originally surveyed way back in 19271928." This is not the kind of possession and occupation contemplated under the law.
While the subject property was still in the hands of the municipality, it was undeniably part
of the public domain. The municipality cannot then be considered a predecessor-in-interest
of the applicant from whom the period of possession and occupation required by law may
be reckoned with. Any other interpretation would be dangerously detrimental to our national
patrimony.
Even assuming that Honorato Edao, the respondents earliest predecessor-in-interest,
possessed the property as early as 1969, the respondents claim must still fail, as he was
unable to prove open, continuous, exclusive, and notorious possession and occupation of

The respondents possession and that of his "predecessors-in-interest" will not suffice for
purposes of judicial confirmation of title. What is categorically required by law is open,
continuous, exclusive, and notorious possession and occupation under a bona fide claim of
ownership since June 12, 1945 or earlier.
The evidence on record shows that a house was constructed on the subject property only
in 1991. Certain discrepancies likewise surround the application for registration: Honorato
Edao sold a parcel of land consisting of 2,790 square meters on December 9, 1980 to
Vicente Enciso alone; on January 17, 1981, Vicente Enciso, Natividad Edao Asuncion and
Thelma Edao executed a deed of partition covering the same lot. Why was there a need
to partition the property if the entire land had already been sold to Vicente? The Court also
notes that in the said deed of partition, one-half of the total area of the land, which was
1,398 square meters, was adjudicated in favor of Vicente; however, in the respondents
application for registration, the land sought to be registered consists of 1,475 square
meters.
Well-entrenched is the rule that the burden of proof in land registration cases rests on the
applicant who must show clear, positive and convincing evidence that his alleged
possession and occupation were of the nature and duration required by law. Bare
allegations, without more, do not amount to preponderant evidence that would shift the
burden to the oppositor.28
Evidently, the respondent failed to prove that (1) Lot No. 2278-A was classified as part of
the disposable and alienable land of the public domain; and (2) he and his predecessors-ininterest have been in open, continuous, exclusive, and notorious possession and
occupation thereof in the concept of owners since time immemorial, or from June 12, 1945.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated
September 26, 2003 in CA-G.R. CV No. 72859 is REVERSED and SET ASIDE.
Respondent Pedro O. Encisos application for registration and issuance of title to Lot No.
2278-A, Cad. 652-D, Masinloc Cadastre, is hereby DISMISSED for lack of merit.
SO ORDERED.