G.R. No.

L-52518 August 13, 1991

Intt Hardwood and Veneer Co. of the Phil. Vs. UP
FACTS: International Hardwood is engaged in the manufacture, processing, and exportation of plywood. It was granted by the Government an exclusive license for 25 years
expiring on Feb 1985 to cut, collect and remove timber from a timber land in the provinces of Quezon and Laguna. During the effectivity of the License Agreement, the President
issued Executive Proclamation No. 791. Under this proclamation, certain parcels of land of the public domain in Quezon and Laguna were withdrawn from sale or settlement and
were reserved for the UP College of Agriculture as experiment station for the college. Subsequently, RA 3990 was enacted establishing a central experiment station for UP for the
colleges of agriculture, veterinary medicine, arts and sciences. Under RA 3990 the land described in Proc. 791 was fully cede to UP, subject to any existing concessions, if any.
On the strength of RA 3990, UP demanded from Hardwood:
1. Payment of forest charges due and demandable under the License Agreement to UP, instead of the BIR
2. That the sale of any timber felled or cut by Hardwood within the land described in RA 3990 be performed by UP personnel
However, despite repeated demands, Hardwood refused to accede to UPs demands.
International Hardwood filed before the CFI a petition for declaratory relief seeking a declaration that UP does NOT have the right to:
1. Supervise and regulate the cutting and removal of timber and other forest products,
2. Scale, measure and seal the timber cut and/or
3. Collect forest charges, reforestation fees and royalties from Hardwood and/or
4. Impose any other duty or burden upon the latter in that portion of its concession covered by a License Agreement, ceded in full ownership to UP by RA 3990
UP filed its Answer:
1. Interposed affirmative defenses of improper venue and that the petition states no cause of action
2. Set up counterclaim for payment of forest charges on the forest products cut and felled within the area ceded to UP under RA 3990
CFI rendered judgment in favor of Hardwood:
1. RA 3990 does not empower UP to scale, measure, and seal the timber cut by International Hardwood within the tract of land and collect the corresponding charges
prescribed by NIRC
2. Dismissed UPs counterclaim
On appeal, the Court of Appeals had elevated the case to the SC as the case involves purely legal questions.
ISSUE: WON UP as owner had the right to scale, measure, and seal the timber cut by Hardwood and collect forestry charges thereon.
HELD: YES, by virtue of the full cession of ownership to UP.
The State may relinquished and convey its rights over a particular property. In turn, the grantee will become the owner of the
land, subject only to existing concession. All rights of the State, as grantor, will be assigned, ceded and conveyed to grantee.
However, if there is an express proviso, the right of existing concessions must not be affected, impaired, or diminished; it must
be respected.

In the case at bar, UP, as owner, has the right to enjoy and dispose of the thing without other limitations than those established
by law. The exception is made for Hardwood, as licensee or grantee of the concession, which has been given the license to cut,
collect, and remove timber from the area ceded and transferred to UP. However, Hardwood has the correlative duty and
obligation to pay the forest charges or royalties to the new owner, UP. Thus, the charges should not be paid to the Government
but to UP. It follows then that respondent UP is entitled to supervise, through its duly appointed personnel, the logging, felling
and removal of timber within the area covered by R.A. No. 3990