G.R. No. 77541 November 29, 1988 project of partition (Exh.
project of partition (Exh. "B") executed by her mind her nine children,
HEIRS OF GREGORIO TENGCO, petitioners,
vs.
HEIRS OF JOSE and VICTORIA ALIWALAS and COURT OF APPEALS, respondents.
CORTES, J.:
The instant case stemmed from an action to quiet title instituted by the late Victoria L.
Vda. de Aliwalas against the Heirs of Gregorio Tengco, the Director of Lands and the
Register of Deeds of Pampanga.
The facts as found by the Court of First Instance of San Fernando, Pampanga, Branch VI,
in Civil Case No. 4308, are as follows:
The evidence adduced by the parties in this case shows that Lot No.
3563 of the Arayat Cadastre was originally a part of the public domain
and it was so declared on October 12, 1933 (Exh. "A-2"). Thereafter,
Dr. Jose Aliwalas applied with the Bureau of Lands for the issuance of
a homestead patent covering this lot. On December 12, 1936, the
Director of Lands granted this application and issued in favor of Jose
Aliwalas Homestead Patent No. 38588 (Exh. "E"). This patent was duly
registered in the Register of Deeds of Pampanga on April 8, 1937 after
the corresponding fees thereon were paid (Exhs. "D-5" and "D-6"). On
the same day, the Register of Deeds of Pampanga issued OCT No. 159
(Exh. "D") in the name of Jose Aliwalas. From that time on, Dr.
Aliwalas did the corresponding land taxes thereon (Exh. "I", "I-1 " to
"I-25") after having declared the land for taxes (sic) purposes in his
name (Exh. "F", "G" and "H").
As owner of this property, Jose Aliwalas, thru his overseer Espiridion
Manaul, had this parcel fenced and vegetables were planted in some
portions thereof. Other portions were dedicated initially to cattle
raising until the last war broke out.
After the war, palay was planted on some. portions of this land, by the
tenants of Jose Aliwalas who gave the owner's share to him, thru his
caretaker and overseer Espiridion Manaul. Other crops were also
planted on the land as well as ipil-ipil trees for firewood purposes.
There were also planted mango trees which ultimately bore fruit
which were harvested by the caretaker of Aliwalas in this property
and who delivered them to Jose Aliwalas until he died in 1962 when
the administration and management was assumed by Jose Aliwalas,
Jr., a son of Dr. Aliwalas.
When the properties left by Dr. Jose Aliwalas were petitioned among
his surviving heirs, the lot in question was alloted in favor of the
plaintiff Victoria L. Vda. de Aliwalas as indicated in the amended
one of whom is Jose Aliwalas, Jr.
After this amended project of partition was approved (Exh. "C") and
registered with the Register of Deeds of Pampanga, OCT No. 52526-R
(Exh. "A") was issued in the name of the plaintiff on November 14,
1966 (Exh. "A-1"). Thereafter, the tax declaration pertaining to this
parcel of land was also transferred to her name (Exhs. "O", "P" and
"A"). She also paid the real estate taxes thereon (Exhs. "N", "N-1 " to
"N-14", Exhs. "R-1" to "R-53").
On the other hand, the evidence further show that on October 31,
1973, the defendant Ponciano Tengco in representation of the
defendants Heirs of Gregorio Tengco filed an application with the
Bureau of Lands, thru its District Land Office here in San Fernando,
Pampanga. Among other things, he alleged in his application that this
parcel of land had been occupied and cultivated originally and
continuously thereafter by Gregorio Tengco. After being given due
course, this application was approved by the Director of Lands who
issued Free Patent No. 557692 covering this lot on February 5, 1974
(Exh. "3" Tengco; Exh. "6" Dir. of Lands).
This free patent issued in favor of the Heirs of Gregorio Tengco was
predicated on the assumption that the lot still formed part of the
public domain and on the findings of the Public Land Inspector Romeo
Buenaventura who conducted an investigation thereon and who also
reported that the land in question was possessed and occupied by the
applicant, Heirs of Gregorio Tengco (Exh. "2"-Tengco and Exh. "5"-Dir
of Lands ) who had planted different kinds of trees on the land aside
from rice and corn.
The defendants Heirs of Gregorio Tengco also adduced evidence
tending to show that their late grandfather Gregorio Tengco had
occupied this parcel of land exclusively years before the last (sic) and
after he died in 1934, his children succeeded him in its possession and
enjoying the fruits from the different trees planted thereon, and that
the possession of Gregorio Tengco and his successors-in-interest have
not been disturbed by anyone including the Aliwalas family.
On rebuttal, the plaintiff adduced evidence showing that the prewar
records of the Bureau of Lands pertaining to public land applications
were burned during the war as indicated in the certification issued by
the Chief of the Records Management Division of the Bureau of Lands.
This is to explain why the Bureau has no more record pertaining to
the Homestead Patent issued in favor of Jose Aliwalas in i936 which
gave rise to the issuance of OCT No. 159 of the Register of Deeds of
Pampanga on April 8, 1937. The certification also attests that what is
now found in the files of the Bureau of Lands is Free Patent V-557692
 issued on February 5, 1974 in favor of the Heirs of Gregorio Tengco
pertaining to Lot No. 3563. (Rollo, pp. 1820.)
On the basis of the evidence, the trial court rendered judgment as follows:
WHEREFORE, and in view of all the foregoing, judgment is hereby
rendered:
1. Declaring the herein plaintiff Victoria Vda. de
Aliwalas as the true owner of Lot No. 3563 of
Arayat Cadastre embraced in TCT No. 52526-R of
the Register of Deeds of Pampanga in her name;
2. Ordering the Register of Deeds of Pampanga to
cancel TCT Nos. 132263-R, 132264-R and 132349-
R in the name of Cipriano Tengco, Ponciano
Tengco, et al., and Eugenia Tengco, respectively,
covering portions of this Lot No. 3563;
3. Ordering the herein defendants-Heirs of
Gregorio Tengco to vacate the land in question and
to pay the amount of P 5,000.00 a year to the
plaintiff beginning from the year 1974 until the
land is vacated by them and turned over to the
plaintiff; and
4. Ordering the defendants-Heirs of Gregorio
Tengco to pay the plaintiff the sum of P 2,000.00 as
attorney's fees, plus costs. [Rollo, p. 17-18.]
Dissatisfied with the trial court's judgment, the Heirs of Gregorio Tengco interposed an
appeal to the Court of Appeals, docketed as CA-G. R. CV No. 69706. The appellate court,
adopting the trial court's findings of fact, affirmed the latter's judgment [Rollo, pp. 17-
24.] Petitioners moved for reconsideration but their motion was denied [Rollo, pp. 25-
26.] Hence, the instant petition.
Private respondents filed a comment to the petition, to which petitioners replied. On
September 16, 1987, the Court resolved to give due course to the petition and the parties
were required to submit their respective memoranda. After the petitioner filed a reply to
private respondent's memorandum, the case was deemed submitted for decision.
In their petition the Heirs of Gregorio Tengco have ascribed several errors to the Court of
Appeals, which involved mixed questions of fact and law [Rollo, p. 4.] But, as stated in
their memorandum, the issues may be limited to the following:
(a) Whether or not the court of origin and/or,
subsequently, the respondent Honorable Court of
Appeals, had jurisdiction to take cognizance of, and
pass upon, the instant case;
(b) Whether or not the claim or contention of the
private respondents will hold true and prosper
before a proper forum; and
(c) Whether or not the private respondents,
assuming for the sake of argument, that they have
proprietary rights on and to the land in question,
have not long lost such rights by laches and/or
prescription. [Memorandum for Petitioners, p. 6.]
1. Petitioners contend that the trial court (and, consequently, the Court of Appeals) had
no jurisdiction to take cognizance of and pass upon the instant case as private
respondents have failed to exhaust administrative remedies. They point out that instead
of bringing her case to the Bureau of Lands, Victoria Vda. de Aliwalas went directly to the
court.
On the other hand, private respondents argue that since a homestead patent and an
original certificate of title had already been issued to their predecessor-in-interest, the
land had ceased to be part of the public domain and, hence, the Bureau of Lands had no
jurisdiction over the controversy. Private respondents add that since an original
certificate of title had been issued pursuant to the homestead patent, their title to the
property had become conclusive, absolute, indefeasible and imprescriptible.
In rebuttal, petitioner contend that private respondents' title had not acquired said
qualities as it was derived from a homestead patent. Petitioners advanced the view that
only titles based upon a judicial declaration can be vested with the attributes of
conclusiveness, indefeasibility and imprescriptibility.
Petitioners' theory is not supported by the jurisprudence on the matter. The rule is well-
settled that an original certificate of title issued on the strength of a homestead patent
partakes of the nature of a certificate of title issued in a judicial proceeding, as long as the
land disposed of is really part of the disposable land of the public domain, and becomes
indefeasible and incontrovertible upon the expiration of one year from the date of the
promulgation of the order of the Director of Lands for the issuance of the patent.
[Republic v. Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v. Ramelo 107 Phil. 498
(1960); Lopez v. Padilla, G.R. No. L-27559, May 18, 1972, 45 SCRA 44.] A homestead
patent, once registered under the Land Registration Act, becomes as indefeasible as a
Torrens title. [Pamintuan v. San Agustin, 43 Phil. 558 (1982); El Hogar Filipino v. Olviga,
60 Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R. No. L-
33676, June 30, 1971, 39 SCRA 676.]
The contention of non-exhaustion of administrative remedies, on the theory that the case
should have been brought before the Director of Lands, had already been rejected by the
Court in earlier decisions. Thus, 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 a part of public domain and
becomes private property over which the Director of Lands has neither control nor
jurisdiction [Sumail v. Judge of Court of First Instance, 96 Phil. 946 (1955); Republic v.
Heirs of Carle, supra.]
2. Anent the second issue, petitioners contend that petitioners' title to the property was
defective for the following reasons: (a) Dr. Jose Aliwalas was not qualified to be a
homesteader being a rich landed person; and (b) private respondents and their
predecessors-in-interest have never been in actual or physical possession of the
property, unlike petitioners and their predecessor-in-interest who have been in
continuous and open possession of the property since 1918. Thus, petitioners rely on a
report prepared by a certain Librado B. Luna, hearing officer of the Bureau of Lands,
attesting to such facts [Memorandum for Petitioners, p. 13.]
complaint. The foregoing facts show that plaintiff-appellee and her
predeccessor-in-interest occupied, possessed and exercised rights of
ownership over the subject land prior to the filing of the instant suit
[Rollo, pp. 23-24.]
The Court finds no cogent reason to disturb the appellate court's findings, in the absence
of a clear showing that the facts have been misapprehended.
WHEREFORE, finding no reversible error, the petition is DENIED and the decision of the
Court of Appeals in CA-G.R. CV No. 69706 is AFFIRMED.
SO ORDERED.

But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas' title to the
property having become incontrovertible, such may no longer be collaterally attacked. If
indeed there had been any fraud or misrepresentation in obtaining the title, an action for
reversion instituted by the Solicitor General would be the proper remedy [Sec. 101, C.A.
No. 141; Director of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v.
Padilla, supra.]

3. Finally, petitioners contend that private respondent have lost their title to the
property through laches and prescription. They assert that private respondents and their
predecessors-in-interest have never actually possessed the property while petitioners
and their predecessor-in-interest have been in actual, open, uninterrupted and adverse
possession of the property since 1918.

But as stated above, title acquired through a homestead patent registered under the
Land Registration Act is imprescriptible. Thus, prescription cannot operate against the
registered owner.

Moreover, as found by the Court of Appeals:

... The allegation of defendants-appellants (petitioners herein) that

plaintiff-appellee (Victoria L. Vda. de Aliwalas) and her predecessor-
in-interest slept on their rights for over 40 years, since 1936 when the
patent was issued to Aliwalas is untenable. It has been established
that Jose Aliwalas through his overseer Espiridion Manaul planted the
subject land to vegetables and raised cattle therein until the last war
broke out. After the war, the land was planted with palay, seasonal
crops, ipil-ipil trees and mango trees. When Jose Aliwalas died in
1962, the administration and management of the farm was assumed
by his son, Jose Aliwalas, Jr. Upon the partition of the properties left
by the late Jose Aliwalas, the subject property was allotted to and
registered in the name of plaintiff-appellee. It was in 1974 when the
defendants-Heirs of Gregorio Tengco wrested possession of the
subject land from plaintiff-appellee's caretaker and deprived her of its
produce. On October 14, 1976, the plaintiff filed her second amended
G.R. No. 135385 December 6, 2000
ISAGANI CRUZ and CESAR EUROPA, petitioners,
vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF
BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE
NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES,
BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN,
TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING,
DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-
LIZA SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA
HELINITA T. PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU
MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES D. AMOS, GILBERT P.
HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON,
ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-
VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES
MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA,
LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES,
PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL,
MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA,
ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE
SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES,
FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY,
JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM
MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M.
ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA,
FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA
MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR.,
SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI, MORANTE S.
TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by her father
CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO D.
LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY,
SR., SUSAN BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S ASSOCIATION,
INTER-PEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN
VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.
RESOLUTION
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and
mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions
of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights
Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to comment.1 In
compliance, respondents Chairperson and Commissioners of the National Commission
on Indigenous Peoples (NCIP), the government agency created under the IPRA to
implement its provisions, filed on October 13, 1998 their Comment to the Petition, in
which they defend the constitutionality of the IPRA and pray that the petition be
dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and
Natural Resources (DENR) and Secretary of the Department of Budget and Management
(DBM) filed through the Solicitor General a consolidated Comment. The Solicitor General
is of the view that the IPRA is partly unconstitutional on the ground that it grants
ownership over natural resources to indigenous peoples and prays that the petition be
granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the
authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional
Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier,
et. al), filed their Motion for Leave to Intervene. They join the NCIP in defending the
constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to
Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an
expression of the principle of parens patriae and that the State has the responsibility to
protect and guarantee the rights of those who are at a serious disadvantage like
indigenous peoples. For this reason it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the
Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed
a motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP
and Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition
for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors
filed their respective memoranda in which they reiterate the arguments adduced in their
earlier pleadings and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the
State’s ownership over lands of the public domain as well as minerals and other natural
resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII
of the Constitution:
"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and
Section 3(b) which, in turn, defines ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains
including inalienable public lands, bodies of water, mineral and other resources found
within ancestral domains are private but community property of the indigenous peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of
ancestral domains and ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples
over the ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over
the ancestral lands;
"(6) Section 57 which provides for priority rights of the indigenous peoples in the
harvesting, extraction, development or exploration of minerals and other natural
resources within the areas claimed to be their ancestral domains, and the right to enter
into agreements with nonindigenous peoples for the development and utilization of
natural resources therein for a period not exceeding 25 years, renewable for not more
than 25 years; and
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain,
develop, protect and conserve the ancestral domains and portions thereof which are
found to be necessary for critical watersheds, mangroves, wildlife sanctuaries,
wilderness, protected areas, forest cover or reforestation."2
Petitioners also content that, by providing for an all-encompassing definition of
"ancestral domains" and "ancestral lands" which might even include private lands found
within said areas, Sections 3(a) and 3(b) violate the rights of private landowners.3
In addition, petitioners question the provisions of the IPRA defining the powers and
jurisdiction of the NCIP and making customary law applicable to the settlement of
disputes involving ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution.4
These provisions are:
"(1) sections 51 to 53 and 59 which detail the process of delineation and
recognition of ancestral domains and which vest on the NCIP the sole authority
to delineate ancestral domains and ancestral lands;
"(2) Section 52[i] which provides that upon certification by the NCIP that a
particular area is an ancestral domain and upon notification to the following
officials, namely, the Secretary of Environment and Natural Resources,
Secretary of Interior and Local Governments, Secretary of Justice and
Commissioner of the National Development Corporation, the jurisdiction of said
officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and practices of
indigenous peoples shall be applied first with respect to property rights, claims
of ownership, hereditary succession and settlement of land disputes, and that
any doubt or ambiguity in the interpretation thereof shall be resolved in favor
of the indigenous peoples;
"(4) Section 65 which states that customary laws and practices shall be used to
resolve disputes involving indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and
disputes involving rights of the indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP
Administrative Order No. 1, series of 1998, which provides that "the administrative
relationship of the NCIP to the Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program coordination." They
contend that said Rule infringes upon the President’s power of control over executive
departments under Section 17, Article VII of the Constitution.6
Petitioners pray for the following:
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and
other related provisions of R.A. 8371 are unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the Chairperson and
Commissioners of the NCIP to cease and desist from implementing the assailed
provisions of R.A. 8371 and its Implementing Rules;
"(3) The issuance of a writ of prohibition directing the Secretary of the
Department of Environment and Natural Resources to cease and desist from
implementing Department of Environment and Natural Resources Circular No.
2, series of 1998;
"(4) The issuance of a writ of prohibition directing the Secretary of Budget and
Management to cease and desist from disbursing public funds for the
implementation of the assailed provisions of R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the Secretary of
Environment and Natural Resources to comply with his duty of carrying out the
State’s constitutional mandate to control and supervise the exploration,
development, utilization and conservation of Philippine natural resources."7
After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief
Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of
the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion
sustaining all challenged provisions of the law with the exception of Section 1, Part II,
Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations
Implementing the IPRA, and Section 57 of the IPRA which he contends should be
interpreted as dealing with the large-scale exploitation of natural resources and should
be read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other
hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not
raise a justiciable controversy and petitioners do not have standing to question the
constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban
filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and
related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the
constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await
the filing of specific cases by those whose rights may have been violated by the IPRA.
Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and
57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De
Leon join in the separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained,
the case was redeliberated upon. However, after redeliberation, the voting remained the
same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the
petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices
Puno, Vitug, Kapunan, Mendoza, and Panganiban.
SO ORDERED.
SEPARATE OPINION
PUNO, J.:
PRECIS
A classic essay on the utility of history was written in 1874 by Friedrich Nietzsche
entitled "On the Uses and Disadvantages of History for Life." Expounding on Nietzsche's
essay, Judge Richard Posner1 wrote:2
"Law is the most historically oriented, or if you like the most backward-looking, the most
'past-dependent,' of the professions. It venerates tradition, precedent, pedigree, ritual,
custom, ancient practices, ancient texts, archaic terminology, maturity, wisdom,
seniority, gerontocracy, and interpretation conceived of as a method of recovering
history. It is suspicious of innovation, discontinuities, 'paradigm shifts,' and the energy
and brashness of youth. These ingrained attitudes are obstacles to anyone who wants to
re-orient law in a more pragmatic direction. But, by the same
token, pragmatic jurisprudence must come to terms with history."
When Congress enacted the Indigenous Peoples Rights Act (IPRA), it
introduced radical concepts into the Philippine legal system which appear to collide
with settled constitutional and jural precepts on state ownership of land and other
natural resources. The sense and subtleties of this law cannot be appreciated without
considering its distinct sociology and the labyrinths of its history. This Opinion attempts
to interpret IPRA by discovering its soul shrouded by the mist of our history. After all, the
IPRA was enacted by Congress not only to fulfill the constitutional mandate of protecting
the indigenous cultural communities' right to their ancestral land but more
importantly, to correct a grave historical injustice to our indigenous people.
This Opinion discusses the following:
I. The Development of the Regalian Doctrine in the Philippine Legal System.
A. The Laws of the Indies
B. Valenton v. Murciano
C. The Public Land Acts and the Torrens System
D. The Philippine Constitutions
II. The Indigenous Peoples Rights Act (IPRA).
A. Indigenous Peoples
1. Indigenous Peoples: Their History
2. Their Concept of Land
III. The IPRA is a Novel Piece of Legislation.
A. Legislative History
IV. The Provisions of the IPRA Do Not Contravene the Constitution.
A. Ancestral domains and ancestral lands are the private property of indigenous
peoples and do not constitute part of the land of the public domain.
1. The right to ancestral domains and ancestral lands: how acquired
2. The concept of native title
 (a) Cariño v. Insular Government
(b) Indian Title to land
(c) Why the Cariño doctrine is unique
3. The option of securing a torrens title to the ancestral land
B. The right of ownership and possession by the ICCs/IPs to their ancestral
domains is a limited form of ownership and does not include the right to
alienate the same.
1. The indigenous concept of ownership and customary law
C. Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian Doctrine
enshrined in Section 2, Article XII of the 1987 Constitution.
1. The rights of ICCs/IPs over their ancestral domains and lands
2. The right of ICCs/IPs to develop lands and natural resources within
the ancestral domains does not deprive the State of ownership over
the natural resources, control and supervision in their development
and exploitation.
(a) Section 1, Part II, Rule III of the Implementing Rules goes
beyond the parameters of Section 7(a) of the law on
ownership of ancestral domains and is ultra vires.
(b) The small-scale utilization of natural resources in Section
7 (b) of the IPRA is allowed under Paragraph 3, Section 2,
Article XII of the 1987 Consitution.
(c) The large-scale utilization of natural resources in Section
57 of the IPRA may be harmonized with Paragraphs 1 and 4,
Section 2, Article XII of the 1987 Constitution.
V. The IPRA is a Recognition of Our Active Participation in the International Indigenous
Movement.
DISCUSSION
I. THE DEVELOPMENT OF THE REGALIAN DOCTRINE IN THE PHILIPPINE LEGAL
SYSTEM.
A. The Laws of the Indies
The capacity of the State to own or acquire property is the state's power
of dominium.3 This was the foundation for the early Spanish decrees embracing the
feudal theory of jura regalia. The "Regalian Doctrine" or jura regalia is a Western legal
concept that was first introduced by the Spaniards into the country through the
Laws of the Indies and the Royal Cedulas. The Laws of the Indies, i.e., more
specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias,
set the policy of the Spanish Crown with respect to the Philippine Islands in the following
manner:
"We, having acquired full sovereignty over the Indies, and all lands, territories, and
possessions not heretofore ceded away by our royal predecessors, or by us, or in our
name, still pertaining to the royal crown and patrimony, it is our will that all lands which
are held without proper and true deeds of grant be restored to us as they belong to us, in
order that after reserving before all what to us or to our viceroys, audiencias, and
governors may seem necessary for public squares, ways, pastures, and commons in those
places which are peopled, taking into consideration not only their present condition, but
also their future and their probable increase, and after distributing to the natives what
may be necessary for tillage and pasturage, confirming them in what they now have and
giving them more if necessary, all the rest of said lands may remain free and
unencumbered for us to dispose of as we may wish.
We therefore order and command that all viceroys and presidents of pretorial courts
designate at such time as shall to them seem most expedient, a suitable period within
which all possessors of tracts, farms, plantations, and estates shall exhibit to them and to
the court officers appointed by them for this purpose, their title deeds thereto. And those
who are in possession by virtue of proper deeds and receipts, or by virtue of just
prescriptive right shall be protected, and all the rest shall be restored to us to be
disposed of at our will."4
The Philippines passed to Spain by virtue of "discovery" and conquest. Consequently, all
lands became the exclusive patrimony and dominion of the Spanish Crown. The Spanish
Government took charge of distributing the lands by issuing royal grants and
concessions to Spaniards, both military and civilian.5 Private land titles could only be
acquired from the government either by purchase or by the various modes of land grant
from the Crown.6
The Laws of the Indies were followed by the Ley Hipotecaria, or the Mortgage Law of
1893.7 The Spanish Mortgage Law provided for the systematic registration of titles and
deeds as well as possessory claims. The law sought to register and tax lands pursuant to
the Royal Decree of 1880. The Royal Decree of 1894, or the "Maura Law," was partly an
amendment of the Mortgage Law as well as the Laws of the Indies, as already amended
by previous orders and decrees.8 This was the last Spanish land law promulgated in the
Philippines. It required the "adjustment" or registration of all agricultural lands,
otherwise the lands shall revert to the state.
Four years later, by the Treaty of Paris of December 10, 1898, Spain ceded to the
government of the United States all rights, interests and claims over the national
territory of the Philippine Islands. In 1903, the United States colonial government,
through the Philippine Commission, passed Act No. 926, the first Public Land Act.
B. Valenton v. Murciano
In 1904, under the American regime, this Court decided the case of Valenton v.
Murciano.9
Valenton resolved the question of which is the better basis for ownership of land: long-
time occupation or paper title. Plaintiffs had entered into peaceful occupation of the
subject land in 1860. Defendant's predecessor-in-interest, on the other hand, purchased
the land from the provincial treasurer of Tarlac in 1892. The lower court ruled against
the plaintiffs on the ground that they had lost all rights to the land by not objecting to the
administrative sale. Plaintiffs appealed the judgment, asserting that their 30-year
adverse possession, as an extraordinary period of prescription in the Partidas and the
Civil Code, had given them title to the land as against everyone, including the State; and
that the State, not owning the land, could not validly transmit it.
The Court, speaking through Justice Willard, decided the case on the basis of "those
special laws which from earliest time have regulated the disposition of the public lands
in the colonies."10 The question posed by the Court was: "Did these special laws
recognize any right of prescription as against the State as to these lands; and if so, to
what extent was it recognized?"
Prior to 1880, the Court said, there were no laws specifically providing for the
disposition of land in the Philippines. However, it was understood that in the absence of
any special law to govern a specific colony, the Laws of the Indies would be followed.
Indeed, in the Royal Order of July 5, 1862, it was decreed that until regulations on the
subject could be prepared, the authorities of the Philippine Islands should follow strictly
the Laws of the Indies, the Ordenanza of the Intendentes of 1786, and the Royal Cedula
of 1754.11
Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de Leyes de las
Indias, the court interpreted it as follows:
"In the preamble of this law there is, as is seen, a distinct statement that all those lands
belong to the Crown which have not been granted by Philip, or in his name, or by the
kings who preceded him. This statement excludes the idea that there might be lands
not so granted, that did not belong to the king. It excludes the idea that the king
was not still the owner of all ungranted lands, because some private person had been
in the adverse occupation of them. By the mandatory part of the law all the occupants of
the public lands are required to produce before the authorities named, and within a time
to be fixed by them, their title papers. And those who had good title or showed
prescription were to be protected in their holdings. It is apparent that it was not the
intention of the law that mere possession for a length of time should make the
possessors the owners of the land possessed by them without any action on the part of
the authorities."12
The preamble stated that all those lands which had not been granted by Philip, or in his
name, or by the kings who preceded him, belonged to the Crown.13 For those lands
granted by the king, the decree provided for a system of assignment of such lands. It also
ordered that all possessors of agricultural land should exhibit their title deed, otherwise,
the land would be restored to the Crown.14
The Royal Cedula of October 15, 1754 reinforced the Recopilacion when it ordered the
Crown's principal subdelegate to issue a general order directing the publication of the
Crown's instructions:
"x x x to the end that any and all persons who, since the year 1700, and up to the date of
the promulgation and publication of said order, shall have occupied royal lands, whether
or not x x x cultivated or tenanted, may x x x appear and exhibit to said subdelegates the
titles and patents by virtue of which said lands are occupied. x x x. Said subdelegates will
at the same time warn the parties interested that in case of their failure to present their
title deeds within the term designated, without a just and valid reason therefor, they will
be deprived of and evicted from their lands, and they will be granted to others."15
On June 25, 1880, the Crown adopted regulations for the adjustment of lands "wrongfully
occupied" by private individuals in the Philippine Islands. Valenton construed these
regulations together with contemporaneous legislative and executive interpretations of
the law, and concluded that plaintiffs' case fared no better under the 1880 decree and
other laws which followed it, than it did under the earlier ones. Thus as a general
doctrine, the Court stated:
"While the State has always recognized the right of the occupant to a deed if he proves a
possession for a sufficient length of time, yet it has always insisted that he must make
that proof before the proper administrative officers, and obtain from them his
deed, and until he did that the State remained the absolute owner."16
In conclusion, the Court ruled: "We hold that from 1860 to 1892 there was no law in
force in these Islands by which the plaintiffs could obtain the ownership of these lands
by prescription, without any action by the State."17 Valenton had no rights other than
those which accrued to mere possession. Murciano, on the other hand, was deemed to be
the owner of the land by virtue of the grant by the provincial secretary. In effect,
Valenton upheld the Spanish concept of state ownership of public land.
As a fitting observation, the Court added that "[t]he policy pursued by the Spanish
Government from earliest times, requiring settlers on the public lands to obtain
title deeds therefor from the State, has been continued by the American
Government in Act No. 926."18
C. The Public Land Acts and the Torrens System
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the
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;19 and that the government's
title to public land sprung from the Treaty of Paris and other subsequent treaties
between Spain and the United States.20 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,21 and excluded the patrimonial property of the
government and the friar lands.22
Act No. 926 was superseded in 1919 by Act 2874, the second Public Land Act. This
new law was passed under the Jones Law. It was more comprehensive in scope but
limited the exploitation of agricultural lands to Filipinos and Americans and citizens of
other countries which gave Filipinos the same privileges.23 After the passage of the 1935
Constitution, Act 2874 was amended in 1936 by Commonwealth Act No. 141.
Commonwealth Act No. 141 remains the present Public Land Law and it is essentially the
same as Act 2874. The main difference between the two relates to the transitory
provisions on the rights of American citizens and corporations during the
Commonwealth period at par with Filipino citizens and corporations.24
Grants of public land were brought under the operation of the Torrens system
under Act 496, or the Land Registration Law of 1903. Enacted by the Philippine
Commission, Act 496 placed all public and private lands in the Philippines under the
Torrens system. The law is said to be almost a verbatim copy of the Massachussetts Land
Registration Act of 1898,25 which, in turn, followed the principles and procedure of the
Torrens system of registration formulated by Sir Robert Torrens who patterned it after
the Merchant Shipping Acts in South Australia. The Torrens system requires that the
government issue an official certificate of title attesting to the fact that the person named
is the owner of the property described therein, subject to such liens and encumbrances
as thereon noted or the law warrants or reserves.26 The certificate of title is indefeasible
and imprescriptible and all claims to the parcel of land are quieted upon issuance of said
certificate. This system highly facilitates land conveyance and negotiation.27
D. The Philippine Constitutions
The Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and
dominating objectives of the 1935 Constitutional Convention was the nationalization and
conservation of the natural resources of the country.28There was an overwhelming
sentiment in the Convention in favor of the principle of state ownership of natural
resources and the adoption of the Regalian doctrine.29 State ownership of natural
resources was seen as a necessary starting point to secure recognition of the state's
power to control their disposition, exploitation, development, or utilization.30 The
delegates to the Constitutional Convention very well knew that the concept of State
ownership of land and natural resources was introduced by the Spaniards, however, they
were not certain whether it was continued and applied by the Americans. To remove all
doubts, the Convention approved the provision in the Constitution affirming the Regalian
doctrine.31
Thus, the 1935 Constitution, in Section 1 of Article XIII on "Conservation and Utilization
of Natural Resources," reads as follows:
"Sec. 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
and other natural resources of the Philippines belong to the State, and their
disposition, exploitation, development, or utilization shall be limited to citizens of
the Philippines, or to corporations or associations at least 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, except as to water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water power, in which
cases beneficial use may be the measure and the limit of the grant."
The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV on the
"National Economy and the Patrimony of the Nation," to wit:
"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."
The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII on
"National Economy and Patrimony," to wit:
"Sec. 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. The State may directly undertake such
activities or it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law. In cases of water rights
for irrigation, water supply, fisheries, or industrial uses other than the development of
water power, beneficial use may be the measure and limit of the grant.
x x x."
Simply stated, all lands of the public domain as well as all natural
resources enumerated therein, whether on public or private land, belong to the State. It
is this concept of State ownership that petitioners claim is being violated by the
IPRA.
II. THE INDIGENOUS PEOPLES RIGHTS ACT.
Republic Act No. 8371 is entitled "An Act to Recognize, Protect and Promote the Rights
of Indigenous Cultural Communities/ Indigenous Peoples, Creating a National
Commission on Indigenous Peoples, Establishing Implementing Mechanisms,
Appropriating Funds Therefor, and for Other Purposes." It is simply known as "The
Indigenous Peoples Rights Act of 1997" or the IPRA.
The IPRA recognizes the existence of the indigenous cultural communities
or indigenous peoples (ICCs/IPs) as a distinct sector in Philippine society. It grants
these people the ownership and possession of their ancestral domains and
ancestral lands, and defines the extent of these lands and domains. The ownership
given is the indigenous concept of ownership under customary law which traces its
origin to native title.
Other rights are also granted the ICCs/IPs, and these are:
- the right to develop lands and natural resources;
- the right to stay in the territories;
- the right in case of displacement;
- the right to safe and clean air and water;
- the right to claim parts of reservations;
- the right to resolve conflict;32
- the right to ancestral lands which include
a. the right to transfer land/property to/among members of the same
ICCs/IPs, subject to customary laws and traditions of the community
concerned;
b. the right to redemption for a period not exceeding 15 years from
date of transfer, if the transfer is to a non-member of the ICC/IP and is
tainted by vitiated consent of the ICC/IP, or if the transfer is for an
unconscionable consideration.33
Within their ancestral domains and ancestral lands, the ICCs/IPs are given the right to
self-governance and empowerment,34 social justice and human rights,35 the right to
preserve and protect their culture, traditions, institutions and community intellectual
rights, and the right to develop their own sciences and technologies.36
To carry out the policies of the Act, the law created the National Commission on
Indigenous Peoples (NCIP). The NCIP is an independent agency under the Office of the
President and is composed of seven (7) Commissioners belonging to ICCs/IPs from each
of the ethnographic areas- Region I and the Cordilleras; Region II; the rest of Luzon;
Island groups including Mindoro, Palawan, Romblon, Panay and the rest of the Visayas;
Northern and Western Mindanao; Southern and Eastern Mindanao; and Central
Mindanao.37 The NCIP took over the functions of the Office for Northern Cultural
Communities and the Office for Southern Cultural Communities created by former
President Corazon Aquino which were merged under a revitalized structure.38
Disputes involving ICCs/IPs are to be resolved under customary laws and
practices. When still unresolved, the matter may be brought to the NCIP, which is
granted quasi-judicial powers.39 The NCIP's decisions may be appealed to the Court of
Appeals by a petition for review.
Any person who violates any of the provisions of the Act such as, but not limited to,
unauthorized and/or unlawful intrusion upon ancestral lands and domains shall be
punished in accordance with customary laws or imprisoned from 9 months to 12 years
and/or fined from ₱100,000.00 to ₱500,000.00 and obliged to pay damages.40
A. Indigenous Peoples
The IPRA is a law dealing with a specific group of people, i.e., the Indigenous Cultural
Communities (ICCs) or the Indigenous Peoples (IPs). The term "ICCs" is used in the 1987
Constitution while that of "IPs" is the contemporary international language in the
International Labor Organization (ILO) Convention 16941 and the United Nations (UN)
Draft Declaration on the Rights of Indigenous Peoples.42
ICCs/IPs are defined by the IPRA as:
"Sec. 3 [h]. Indigenous Cultural Communities/ Indigenous Peoples- refer to a group of
people or homogeneous societies identified by self-ascription and ascription by others,
who have continuously lived as organized community on communally bounded and
defined territory, and who have, under claims of ownership since time immemorial,
occupied, possessed and utilized such territories, sharing common bonds of language,
customs, traditions and other distinctive cultural traits, or who have, through resistance
to political, social and cultural inroads of colonization, non-indigenous religions and
cultures, became historically differentiated from the majority of Filipinos. ICCs/IPs shall
likewise include peoples who are regarded as indigenous on account of their descent
from the populations which inhabited the country, at the time of conquest or
colonization, or at the time of inroads of non-indigenous religions and cultures, or the
establishment of present state boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may have been displaced from their
traditional domains or who may have resettled outside their ancestral domains."
Indigenous Cultural Communities or Indigenous Peoples refer to a group of people
or homogeneous societies who have continuously lived as an organized
community on communally bounded and defined territory. These groups of people
have actually occupied, possessed and utilized their territories under claim of ownership
since time immemorial. They share common bonds of language, customs, traditions and
other distinctive cultural traits, or, they, by their resistance to political, social and
cultural inroads of colonization, non-indigenous religions and cultures, became
historically differentiated from the Filipino majority. ICCs/IPs also include descendants
of ICCs/IPs who inhabited the country at the time of conquest or colonization, who retain
some or all of their own social, economic, cultural and political institutions but who may
have been displaced from their traditional territories or who may have resettled outside
their ancestral domains.
1. Indigenous Peoples: Their History
Presently, Philippine indigenous peoples inhabit the interiors and mountains of Luzon,
Mindanao, Mindoro, Negros, Samar, Leyte, and the Palawan and Sulu group of islands.
They are composed of 110 tribes and are as follows:
1. In the Cordillera Autonomous Region- Kankaney, Ibaloi, Bontoc, Tinggian or
Itneg, Ifugao, Kalinga, Yapayao, Aeta or Agta or Pugot, and Bago of Ilocos Norte
and Pangasinan; Ibanag of Isabela, Cagayan; Ilongot of Quirino and Nueva
Vizcaya; Gaddang of Quirino, Nueva Vizcaya, Itawis of Cagayan; Ivatan of
Batanes, Aeta of Cagayan, Quirino and Isabela.
2. In Region III- Aetas.
3. In Region IV- Dumagats of Aurora, Rizal; Remontado of Aurora, Rizal,
Quezon; Alangan or Mangyan, Batangan, Buid or Buhid, Hanunuo and Iraya of
Oriental and Occidental Mindoro; Tadyawan of Occidental Mindoro; Cuyonon,
Palawanon, Tagbanua and Tao't bato of Palawan.
4. In Region V- Aeta of Camarines Norte and Camarines Sur; Aeta-Abiyan,
Isarog, and Kabihug of Camarines Norte; Agta, and Mayon of Camarines Sur;
Itom of Albay, Cimaron of Sorsogon; and the Pullon of Masbate and Camarines
Sur.
5. In Region VI- Ati of Negros Occidental, Iloilo and Antique, Capiz; the Magahat
of Negros Occidental; the Corolano and Sulod.
6. In Region VII- Magahat of Negros Oriental and Eskaya of Bohol.
7. In Region IX- the Badjao numbering about 192,000 in Tawi-Tawi, Zamboanga
del Sur; the Kalibugan of Basilan, the Samal, Subanon and Yakat.
8. Region X- Numbering 1.6 million in Region X alone, the IPs are: the Banwaon,
Bukidnon, Matigsalog, Talaanding of Bukidnon; the Camiguin of Camiguin
Island; the Higa-unon of Agusan del Norte, Agusan del Sur, Bukidnon and
Misamis Occidental; the Tigwahanon of Agusan del Sur, Misamis Oriental and
and Misamis Occidental, the Manobo of the Agusan provinces, and the
Umayamnon of Agusan and Bukidnon.
9. In Region XI- There are about 1,774,065 IPs in Region XI. They are tribes of
the Dibabaon, Mansaka of Davao del Norte; B'laan, Kalagan, Langilad, T'boli and
Talaingod of Davao del Sur; Mamamanua of Surigao del Sur; Mandaya of the
Surigao provinces and Davao Oriental; Manobo Blit of South Cotabato; the
Mangguangon of Davao and South Cotabato; Matigsalog of Davao del Norte and
Del Sur; Tagakaolo, Tasaday and Ubo of South Cotabato; and Bagobo of Davao
del sur and South Cotabato.
10. In Region XII- Ilianen, Tiruray, Maguindanao, Maranao, Tausug,
Yakan/Samal, and Iranon.43
How these indigenous peoples came to live in the Philippines goes back to as early
as 25,000 to 30,000 B.C.
Before the time of Western contact, the Philippine archipelago was peopled largely by
the Negritos, Indonesians and Malays.44 The strains from these groups eventually gave
rise to common cultural features which became the dominant influence in ethnic
reformulation in the archipelago. Influences from the Chinese and Indian civilizations in
the third or fourth millenium B.C. augmented these ethnic strains. Chinese economic and
socio-cultural influences came by way of Chinese porcelain, silk and traders. Indian
influence found their way into the religious-cultural aspect of pre-colonial society.45
The ancient Filipinos settled beside bodies of water. Hunting and food gathering
became supplementary activities as reliance on them was reduced by fishing and the
cultivation of the soil.46 From the hinterland, coastal, and riverine communities, our
ancestors evolved an essentially homogeneous culture, a basically common way of life
where nature was a primary factor. Community life throughout the archipelago was
influenced by, and responded to, common ecology. The generally benign tropical climate
and the largely uniform flora and fauna favored similarities, not differences.47 Life was
essentially subsistence but not harsh.48
The early Filipinos had a culture that was basically Malayan in structure and form. They
had languages that traced their origin to the Austronesian parent-stock and used them
not only as media of daily communication but also as vehicles for the expression of their
literary moods.49 They fashioned concepts and beliefs about the world that they could
not see, but which they sensed to be part of their lives.50 They had their own religion and
religious beliefs. They believed in the immortality of the soul and life after death. Their
rituals were based on beliefs in a ranking deity whom they called Bathalang Maykapal,
and a host of other deities, in the environmental spirits and in soul spirits. The early
Filipinos adored the sun, the moon, the animals and birds, for they seemed to consider
the objects of Nature as something to be respected. They venerated almost any object
that was close to their daily life, indicating the importance of the relationship between
man and the object of nature.51
The unit of government was the "barangay," a term that derived its meaning from the
Malay word "balangay," meaning, a boat, which transported them to these shores.52 The
barangay was basically a family-based community and consisted of thirty to one hundred
families. Each barangay was different and ruled by a chieftain called a "dato." It was the
chieftain's duty to rule and govern his subjects and promote their welfare and interests.
A chieftain had wide powers for he exercised all the functions of government. He was the
executive, legislator and judge and was the supreme commander in time of war.53
Laws were either customary or written. Customary laws were handed down orally
from generation to generation and constituted the bulk of the laws of the
barangay. They were preserved in songs and chants and in the memory of the elder
persons in the community.54 The written laws were those that the chieftain and his
elders promulgated from time to time as the necessity arose.55 The oldest known written
body of laws was the Maragtas Code by Datu Sumakwel at about 1250 A.D. Other old
codes are the Muslim Code of Luwaran and the Principal Code of Sulu.56 Whether
customary or written, the laws dealt with various subjects, such as inheritance, divorce,
usury, loans, partnership, crime and punishment, property rights, family relations and
adoption. Whenever disputes arose, these were decided peacefully through a court
composed by the chieftain as "judge" and the barangay elders as "jury." Conflicts arising
between subjects of different barangays were resolved by arbitration in which a board
composed of elders from neutral barangays acted as arbiters.57
Baranganic society had a distinguishing feature: the absence of private property in
land. The chiefs merely administered the lands in the name of the barangay. The social
order was an extension of the family with chiefs embodying the higher unity of the
community. Each individual, therefore, participated in the community ownership of the
soil and the instruments of production as a member of the barangay.58 This ancient
communalism was practiced in accordance with the concept of mutual sharing of
resources so that no individual, regardless of status, was without
sustenance. Ownership of land was non-existent or unimportant and the right of
usufruct was what regulated the development of lands.59 Marine resources and
fishing grounds were likewise free to all. Coastal communities depended for their
economic welfare on the kind of fishing sharing concept similar to those in land
communities.60 Recognized leaders, such as the chieftains and elders, by virtue of their
positions of importance, enjoyed some economic privileges and benefits. But their rights,
related to either land and sea, were subject to their responsibility to protect the
communities from danger and to provide them with the leadership and means of
survival.61
Sometime in the 13th century, Islam was introduced to the archipelago in
Maguindanao. The Sultanate of Sulu was established and claimed jurisdiction over
territorial areas represented today by Tawi-tawi, Sulu, Palawan, Basilan and Zamboanga.
Four ethnic groups were within this jurisdiction: Sama, Tausug, Yakan and
Subanon.62The Sultanate of Maguindanao spread out from Cotabato toward Maranao
territory, now Lanao del Norte and Lanao del Sur.63
The Muslim societies evolved an Asiatic form of feudalism where land was still
held in common but was private in use. This is clearly indicated in the Muslim Code of
Luwaran. The Code contains a provision on the lease of cultivated lands. It, however, has
no provision for the acquisition, transfer, cession or sale of land.64
The societies encountered by Magellan and Legaspi therefore were primitive
economies where most production was geared to the use of the producers and to the
fulfillment of kinship obligations. They were not economies geared to exchange and
profit.65 Moreover, the family basis of barangay membership as well as of leadership and
governance worked to splinter the population of the islands into numerous small and
separate communities.66
When the Spaniards settled permanently in the Philippines in 1565, they found the
Filipinos living in barangay settlements scattered along water routes and river
banks. One of the first tasks imposed on the missionaries and the encomenderos was to
collect all scattered Filipinos together in a reduccion.67 As early as 1551, the Spanish
government assumed an unvarying solicitous attitude towards the natives.68 The
Spaniards regarded it a sacred "duty to conscience and humanity to civilize these less
fortunate people living in the obscurity of ignorance" and to accord them the "moral and
material advantages" of community life and the "protection and vigilance afforded them
by the same laws."69
The Spanish missionaries were ordered to establish pueblos where the church and
convent would be constructed. All the new Christian converts were required to construct
their houses around the church and the unbaptized were invited to do the same.70 With
the reduccion, the Spaniards attempted to "tame" the reluctant Filipinos through
Christian indoctrination using the convento/casa real/plaza complex as focal point.
The reduccion, to the Spaniards, was a "civilizing" device to make the Filipinos law-
abiding citizens of the Spanish Crown, and in the long run, to make them ultimately
adopt Hispanic culture and civilization.71
All lands lost by the old barangays in the process of pueblo organization as well as
all lands not assigned to them and the pueblos, were now declared to be crown
lands or realengas, belonging to the Spanish king. It was from the realengas that
land grants were made to non-Filipinos.72
The abrogation of the Filipinos' ancestral rights in land and the introduction of the
concept of public domain were the most immediate fundamental results of Spanish
colonial theory and law.73 The concept that the Spanish king was the owner of
everything of value in the Indies or colonies was imposed on the natives, and the
natives were stripped of their ancestral rights to land.74
Increasing their foothold in the Philippines, the Spanish colonialists, civil and religious,
classified the Filipinos according to their religious practices and beliefs, and divided
them into three types . First were the Indios, the Christianized Filipinos, who generally
came from the lowland populations. Second, were the Moros or the Muslim
communities, and third, were the infieles or the indigenous communities.75
The Indio was a product of the advent of Spanish culture. This class was favored by the
Spaniards and was allowed certain status although below the Spaniards.
The Moros and infieles were regarded as the lowest classes.76
The Moros and infieles resisted Spanish rule and Christianity. The Moros were
driven from Manila and the Visayas to Mindanao; while the infieles, to the hinterlands.
The Spaniards did not pursue them into the deep interior. The upland societies were
naturally outside the immediate concern of Spanish interest, and the cliffs and forests of
the hinterlands were difficult and inaccessible, allowing the infieles, in effect, relative
security.77 Thus, the infieles, which were peripheral to colonial administration, were not
only able to preserve their own culture but also thwarted the Christianization process,
separating themselves from the newly evolved Christian community.78 Their own
political, economic and social systems were kept constantly alive and vibrant.
The pro-Christian or pro-Indio attitude of colonialism brought about a generally mutual
feeling of suspicion, fear, and hostility between the Christians on the one hand and the
non-Christians on the other. Colonialism tended to divide and rule an otherwise
culturally and historically related populace through a colonial system that exploited both
the virtues and vices of the Filipinos.79
President McKinley, in his instructions to the Philippine Commission of April 7,
1900, addressed the existence of the infieles:
"In dealing with the uncivilized tribes of the Islands, the Commission should adopt
the same course followed by Congress in permitting the tribes of our North
American Indians to maintain their tribal organization and government, and under
which many of those tribes are now living in peace and contentment, surrounded by
civilization to which they are unable or unwilling to conform. Such tribal government
should, however, be subjected to wise and firm regulation; and, without undue or petty
interference, constant and active effort should be exercised to prevent barbarous
practices and introduce civilized customs."80
Placed in an alternative of either letting the natives alone or guiding them in the path of
civilization, the American government chose "to adopt the latter measure as one more in
accord with humanity and with the national conscience."81
The Americans classified the Filipinos into two: the Christian Filipinos and the non-
Christian Filipinos. The term "non-Christian" referred not to religious belief, but to a
geographical area, and more directly, "to natives of the Philippine Islands of a low grade
of civilization, usually living in tribal relationship apart from settled communities."82
Like the Spaniards, the Americans pursued a policy of assimilation. In 1903, they
passed Act No. 253 creating the Bureau of Non-Christian Tribes (BNCT). Under the
Department of the Interior, the BNCT's primary task was to conduct ethnographic
research among unhispanized Filipinos, including those in Muslim Mindanao, with a
"special view to determining the most practicable means for bringing about their
advancement in civilization and prosperity." The BNCT was modeled after the bureau
dealing with American Indians. The agency took a keen anthropological interest in
Philippine cultural minorities and produced a wealth of valuable materials about them.83
The 1935 Constitution did not carry any policy on the non-Christian Filipinos. The
raging issue then was the conservation of the national patrimony for the Filipinos.
In 1957, the Philippine Congress passed R.A. No. 1888, an "Act to effectuate in a more
rapid and complete manner the economic, social, moral and political advancement of the
non-Christian Filipinos or national cultural minorities and to render real, complete, and
permanent the integration of all said national cultural minorities into the body politic,
creating the Commission on National Integration charged with said functions." The
law called for a policy of integration of indigenous peoples into the Philippine
mainstream and for this purpose created the Commission on National
Integration (CNI).84 The CNI was given, more or less, the same task as the BNCT during
the American regime. The post-independence policy of integration was like the
colonial policy of assimilation understood in the context of a guardian-ward
relationship.85
The policy of assimilation and integration did not yield the desired result. Like the
Spaniards and Americans, government attempts at integration met with fierce
resistance. Since World War II, a tidal wave of Christian settlers from the lowlands of
Luzon and the Visayas swamped the highlands and wide open spaces in
Mindanao.86Knowledge by the settlers of the Public Land Acts and the Torrens
system resulted in the titling of several ancestral lands in the settlers' names. With
government initiative and participation, this titling displaced several indigenous
peoples from their lands. Worse, these peoples were also displaced by projects
undertaken by the national government in the name of national development.87
It was in the 1973 Constitution that the State adopted the following provision:
"The State shall consider the customs, traditions, beliefs, and interests of national
cultural communities in the formulation and implementation of State policies."88
For the first time in Philippine history, the "non-Christian tribes" or the "cultural
minorities" were addressed by the highest law of the Republic, and they were
referred to as "cultural communities." More importantly this time, their "uncivilized"
culture was given some recognition and their "customs, traditions, beliefs and interests"
were to be considered by the State in the formulation and implementation of State
policies. President Marcos abolished the CNI and transferred its functions to
the Presidential Adviser on National Minorities (PANAMIN). The PANAMIN was
tasked to integrate the ethnic groups that sought full integration into the larger
community, and at the same time "protect the rights of those who wish to preserve their
original lifeways beside the larger community."89 In short, while still adopting the
integration policy, the decree recognized the right of tribal Filipinos to preserve
their way of life.90
In 1974, President Marcos promulgated P.D. No. 410, otherwise known as
the Ancestral Lands Decree. The decree provided for the issuance of land occupancy
certificates to members of the national cultural communities who were given up to 1984
to register their claims.91 In 1979, the Commission on the Settlement of Land
Problems was created under E.O. No. 561 which provided a mechanism for the
expeditious resolution of land problems involving small settlers, landowners, and tribal
Filipinos.92
Despite the promulgation of these laws, from 1974 to the early 1980's, some 100,000
Kalingas and Bontoks of the Cordillera region were displaced by the Chico River dam
project of the National Power Corporation (NPC). The Manobos of Bukidnon saw their
land bulldozed by the Bukidnon Sugar Industries Company (BUSCO). In Agusan del Sur,
the National Development Company was authorized by law in 1979 to take
approximately 40,550 hectares of land that later became the NDC-Guthrie plantation in
Agusan del Sur. Most of the land was possessed by the Agusan natives.93 Timber
concessions, water projects, plantations, mining, and cattle ranching and other projects
of the national government led not only to the eviction of the indigenous peoples from
their land but also to the reduction and destruction of their natural environment.94
The Aquino government signified a total shift from the policy of integration to one
of preservation. Invoking her powers under the Freedom Constitution, President
Aquino created the Office of Muslim Affairs, Office for Northern Cultural
Communities and the Office for Southern Cultural Communities all under the Office
of the President.95
The 1987 Constitution carries at least six (6) provisions which insure the right of
tribal Filipinos to preserve their way of life.96 This Constitution goes further than
the 1973 Constitution by expressly guaranteeing the rights of tribal Filipinos to
their ancestral domains and ancestral lands. By recognizing their right to their
ancestral lands and domains, the State has effectively upheld their right to live in a
culture distinctly their own.
2. Their Concept of Land
Indigenous peoples share distinctive traits that set them apart from the Filipino
mainstream. They are non-Christians. They live in less accessible, marginal, mostly
upland areas. They have a system of self-government not dependent upon the laws of the
central administration of the Republic of the Philippines. They follow ways of life and
customs that are perceived as different from those of the rest of the population. 97 The
kind of response the indigenous peoples chose to deal with colonial threat worked well
to their advantage by making it difficult for Western concepts and religion to erode their
customs and traditions. The "infieles societies" which had become peripheral to colonial
administration, represented, from a cultural perspective, a much older base of
archipelagic culture. The political systems were still structured on the patriarchal and
kinship oriented arrangement of power and authority. The economic activities were
governed by the concepts of an ancient communalism and mutual help. The social
structure which emphasized division of labor and distinction of functions, not status, was
maintained. The cultural styles and forms of life portraying the varieties of social
courtesies and ecological adjustments were kept constantly vibrant.98
Land is the central element of the indigenous peoples' existence. There is no
traditional concept of permanent, individual, land ownership. Among the Igorots,
ownership of land more accurately applies to the tribal right to use the land or to
territorial control. The people are the secondary owners or stewards of the land and that
if a member of the tribe ceases to work, he loses his claim of ownership, and the land
reverts to the beings of the spirit world who are its true and primary owners. Under the
concept of "trusteeship," the right to possess the land does not only belong to the present
generation but the future ones as well.99
Customary law on land rests on the traditional belief that no one owns the land except
the gods and spirits, and that those who work the land are its mere
stewards.100 Customary law has a strong preference for communal
ownership, which could either be ownership by a group of individuals or families who
are related by blood or by marriage,101 or ownership by residents of the same locality
who may not be related by blood or marriage. The system of communal ownership under
customary laws draws its meaning from the subsistence and highly collectivized mode of
economic production. The Kalingas, for instance, who are engaged in team occupation
like hunting, foraging for forest products, and swidden farming found it natural that
forest areas, swidden farms, orchards, pasture and burial grounds should be
communally-owned.102 For the Kalingas, everybody has a common right to a common
economic base. Thus, as a rule, rights and obligations to the land are shared in common.
Although highly bent on communal ownership, customary law on land also
sanctions individual ownership.The residential lots and terrace rice farms are
governed by a limited system of individual ownership. It is limited because while the
individual owner has the right to use and dispose of the property, he does not possess all
the rights of an exclusive and full owner as defined under our Civil Code.103 Under
Kalinga customary law, the alienation of individually-owned land is strongly discouraged
except in marriage and succession and except to meet sudden financial needs due to
sickness, death in the family, or loss of crops.104 Moreover, and to be alienated should
first be offered to a clan-member before any village-member can purchase it, and in no
case may land be sold to a non-member of the ili.105
Land titles do not exist in the indigenous peoples' economic and social system. The
concept of individual land ownership under the civil law is alien to them.
Inherently colonial in origin, our national land laws and governmental policies
frown upon indigenous claims to ancestral lands. Communal ownership is looked
upon as inferior, if not inexistent.106
III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.
A. The Legislative History of the IPRA
It was to address the centuries-old neglect of the Philippine indigenous
peoples that the Tenth Congress of the Philippines, by their joint efforts, passed and
approved R.A. No. 8371, the Indigenous Peoples Rights Act (IPRA) of 1997. The law
was a consolidation of two Bills- Senate Bill No. 1728 and House Bill No. 9125.
Principally sponsored by Senator Juan M. Flavier,107 Senate Bill No. 1728 was a
consolidation of four proposed measures referred to the Committees on Cultural
Communities, Environment and Natural Resources, Ways and Means, as well as Finance.
It adopted almost en toto the comprehensive version of Senate Bill Nos. 1476 and 1486
which was a result of six regional consultations and one national consultation with
indigenous peoples nationwide.108 At the Second Regular Session of the Tenth
Congress, Senator Flavier, in his sponsorship speech, gave a background on the situation
of indigenous peoples in the Philippines, to wit:
"The Indigenous Cultural Communities, including the Bangsa Moro, have long suffered
from the dominance and neglect of government controlled by the majority. Massive
migration of their Christian brothers to their homeland shrunk their territory and many
of the tribal Filipinos were pushed to the hinterlands. Resisting the intrusion,
dispossessed of their ancestral land and with the massive exploitation of their natural
resources by the elite among the migrant population, they became marginalized. And the
government has been an indispensable party to this insidious conspiracy against the
Indigenous Cultural Communities (ICCs). It organized and supported the resettlement of
people to their ancestral land, which was massive during the Commonwealth and early
years of the Philippine Republic. Pursuant to the Regalian Doctrine first introduced to
our system by Spain through the Royal Decree of 13 February 1894 or the Maura Law,
the government passed laws to legitimize the wholesale landgrabbing and provide for
easy titling or grant of lands to migrant homesteaders within the traditional areas of the
ICCs."109
Senator Flavier further declared:
"The IPs are the offsprings and heirs of the peoples who have first inhabited and cared
for the land long before any central government was established. Their ancestors had
territories over which they ruled themselves and related with other tribes. These
territories- the land- include people, their dwelling, the mountains, the water, the air,
plants, forest and the animals. This is their environment in its totality. Their existence as
indigenous peoples is manifested in their own lives through political, economic, socio-
cultural and spiritual practices. The IPs culture is the living and irrefutable proof to this.
Their survival depends on securing or acquiring land rights; asserting their rights to it;
and depending on it. Otherwise, IPs shall cease to exist as distinct peoples."110
To recognize the rights of the indigenous peoples effectively, Senator Flavier proposed a
bill based on two postulates: (1) the concept of native title; and (2) the principle
of parens patriae.
According to Senator Flavier, "[w]hile our legal tradition subscribes to the Regalian
Doctrine reinstated in Section 2, Article XII of the 1987 Constitution," our "decisional
laws" and jurisprudence passed by the State have "made exception to the doctrine." This
exception was first laid down in the case of Cariño v. Insular Government where:
"x x x the court has recognized long occupancy of land by an indigenous member of the
cultural communities as one of private ownership, which, in legal concept, is termed
"native title." This ruling has not been overturned. In fact, it was affirmed in subsequent
cases."111
Following Cariño, the State passed Act No. 926, Act No. 2874, C.A. No. 141, P.D. 705, P.D.
410, P.D. 1529, R.A. 6734 (the Organic Act for the Autonomous Region of Muslim
Mindanao). These laws, explicitly or implicitly, and liberally or restrictively, recognized
"native title" or "private right" and the existence of ancestral lands and domains. Despite
the passage of these laws, however, Senator Flavier continued:
"x x x the executive department of government since the American occupation has not
implemented the policy. In fact, it was more honored in its breach than in its observance,
its wanton disregard shown during the period unto the Commonwealth and the early
years of the Philippine Republic when government organized and supported massive
resettlement of the people to the land of the ICCs."
Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and possess their
ancestral land. The bill was prepared also under the principle of parens patriae inherent
in the supreme power of the State and deeply embedded in Philippine legal tradition.
This principle mandates that persons suffering from serious disadvantage or handicap,
which places them in a position of actual inequality in their relation or transaction with
others, are entitled to the protection of the State.
Senate Bill No. 1728 was passed on Third Reading by twenty-one (21) Senators
voting in favor and none against, with no abstention.112
House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the Committee on
Cultural Communities. It was originally authored and subsequently presented and
defended on the floor by Rep. Gregorio Andolana of North Cotabato.113
Rep. Andolana's sponsorhip speech reads as follows:
"This Representation, as early as in the 8th Congress, filed a bill of similar implications
that would promote, recognize the rights of indigenous cultural communities within the
framework of national unity and development.
Apart from this, Mr. Speaker, is our obligation, the government's obligation to assure and
ascertain that these rights shall be well-preserved and the cultural traditions as well as
the indigenous laws that remained long before this Republic was established shall be
preserved and promoted. There is a need, Mr. Speaker, to look into these matters
seriously and early approval of the substitute bill shall bring into reality the aspirations,
the hope and the dreams of more than 12 million Filipinos that they be considered in the
mainstream of the Philippine society as we fashion for the year 2000." 114
Rep. Andolana stressed that H.B. No. 9125 is based on the policy of preservation as
mandated in the Constitution. He also emphasized that the rights of IPs to their land was
enunciated in Cariño v. Insular Government which recognized the fact that they had
vested rights prior to the establishment of the Spanish and American regimes.115
After exhaustive interpellation, House Bill No. 9125, and its corresponding
amendments, was approved on Second Reading with no objections.
IV. THE PROVISIONS OF THE IPRA DO NOT CONTRAVENE THE CONSTITUTION.
A. Ancestral Domains and Ancestral Lands are the Private Property of Indigenous
Peoples and Do Not Constitute Part of the Land of the Public Domain.
The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral domains
and ancestral lands.Ancestral lands are not the same as ancestral domains. These are
defined in Section 3 [a] and [b] of the Indigenous Peoples Right Act, viz:
"Sec. 3 a) Ancestral Domains. - Subject to Section 56 hereof, refer to all areas generally
belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural
resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs
by themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force majeure
or displacement by force, deceit, stealth or as a consequence of government projects or
any other voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural,
and other lands individually owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs
but from which they traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators;
b) Ancestral Lands.- Subject to Section 56 hereof, refers to land occupied, possessed and
utilized by individuals, families and clans who are members of the ICCs/IPs since time
immemorial, by themselves or through their predecessors-in-interest, under claims of
individual or traditional group ownership, continuously, to the present except when
interrupted by war, force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects and other voluntary dealings entered into by
government and private individuals/corporations, including, but not limited to,
residential lots, rice terraces or paddies, private forests, swidden farms and tree lots."
Ancestral domains are all areas belonging to ICCs/IPs held under a claim of ownership,
occupied or possessed by ICCs/IPs by themselves or through their ancestors,
communally or individually since time immemorial, continuously until the present,
except when interrupted by war, force majeure or displacement by force, deceit, stealth
or as a consequence of government projects or any other voluntary dealings with
government and/or private individuals or corporations. Ancestral domains comprise
lands, inland waters, coastal areas, and natural resources therein and includes
ancestral lands, forests, pasture, residential, agricultural, and other lands
individually owned whether alienable or not, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources. They also
include lands which may no longer be exclusively occupied by ICCs/IPs but from which
they traditionally had access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators.116
Ancestral lands are lands held by the ICCs/IPs under the same conditions as ancestral
domains except that these are limited to lands and that these lands are not merely
occupied and possessed but are also utilized by the ICCs/IPs under claims of individual
or traditional group ownership. These lands include but are not limited to residential
lots, rice terraces or paddies, private forests, swidden farms and tree lots.117
The procedures for claiming ancestral domains and lands are similar to the procedures
embodied in Department Administrative Order (DAO) No. 2, series of 1993, signed by
then Secretary of the Department of Environment and Natural Resources (DENR) Angel
Alcala.118 DAO No. 2 allowed the delineation of ancestral domains by special task forces
and ensured the issuance of Certificates of Ancestral Land Claims (CALC's) and
Certificates of Ancestral Domain Claims (CADC's) to IPs.
The identification and delineation of these ancestral domains and lands is a power
conferred by the IPRA on the National Commission on Indigenous Peoples (NCIP).119 The
guiding principle in identification and delineation is self-delineation.120 This means that
the ICCs/IPs have a decisive role in determining the boundaries of their domains and in
all the activities pertinent thereto.121
The procedure for the delineation and recognition of ancestral domains is set forth in
Sections 51 and 52 of the IPRA. The identification, delineation and certification
of ancestral lands is in Section 53 of said law.
Upon due application and compliance with the procedure provided under the law and
upon finding by the NCIP that the application is meritorious, the NCIP shall issue a
Certificate of Ancestral Domain Title (CADT) in the name of the community
concerned.122 The allocation of lands within the ancestral domain to any individual or
indigenous corporate (family or clan) claimants is left to the ICCs/IPs concerned to
decide in accordance with customs and traditions.123 With respect to ancestral lands
outside the ancestral domain, the NCIP issues a Certificate of Ancestral Land Title
(CALT).124
CADT's and CALT's issued under the IPRA shall be registered by the NCIP before the
Register of Deeds in the place where the property is situated.125
(1) Right to Ancestral Domains and Ancestral Lands: How Acquired
The rights of the ICCs/IPs to their ancestral domains and ancestral lands may be
acquired in two modes: (1) by native title over both ancestral lands and
domains; or (2) by torrens title under the Public Land Act and the Land
Registration Act with respect to ancestral lands only.
(2) The Concept of Native Title
Native title is defined as:
"Sec. 3 [l]. Native Title- refers to pre-conquest rights to lands and domains which, as far
back as memory reaches, have been held under a claim of private ownership by
ICCs/IPs, have never been public lands and are thus indisputably presumed to have
been held that way since before the Spanish Conquest."126
Native title refers to ICCs/IPs' preconquest rights to lands and domains held under a
claim of private ownership as far back as memory reaches. These lands are deemed
never to have been public lands and are indisputably presumed to have been held that
way since before the Spanish Conquest. The rights of ICCs/IPs to their
ancestral domains (which also include ancestral lands) by virtue of native title shall be
recognized and respected.127 Formal recognition, when solicited by ICCs/IPs concerned,
shall be embodied in a Certificate of Ancestral Domain Title (CADT), which shall
recognize the title of the concerned ICCs/IPs over the territories identified and
delineated.128
Like a torrens title, a CADT is evidence of private ownership of land by native
title. Native title, however, is a right of private ownership peculiarly granted to ICCs/IPs
over their ancestral lands and domains. The IPRA categorically declares ancestral lands
and domains held by native title as never to have been public land. Domains and lands
held under native title are, therefore, indisputably presumed to have never been public
lands and are private.
(a) Cariño v. Insular Government129
The concept of native title in the IPRA was taken from the 1909 case of Cariño v. Insular
Government.130 Cariñofirmly established a concept of private land title that existed
irrespective of any royal grant from the State.
In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the land registration court
146 hectares of land in Baguio Municipality, Benguet Province. He claimed that this land
had been possessed and occupied by his ancestors since time immemorial; that his
grandfather built fences around the property for the holding of cattle and that his father
cultivated some parts of the land. Cariño inherited the land in accordance with Igorot
custom. He tried to have the land adjusted under the Spanish land laws, but no document
issued from the Spanish Crown.131 In 1901, Cariño obtained a possessory title to the land
under the Spanish Mortgage Law.132 The North American colonial government, however,
ignored his possessory title and built a public road on the land prompting him to seek a
Torrens title to his property in the land registration court. While his petition was
pending, a U.S. military reservation133 was proclaimed over his land and, shortly
thereafter, a military detachment was detailed on the property with orders to keep cattle
and trespassers, including Cariño, off the land.134
In 1904, the land registration court granted Cariño's application for absolute ownership
to the land. Both the Government of the Philippine Islands and the U.S. Government
appealed to the C.F.I. of Benguet which reversed the land registration court and
dismissed Cariño's application. The Philippine Supreme Court135 affirmed the C.F.I. by
applying the Valenton ruling. Cariño took the case to the U.S. Supreme Court.136 On one
hand, the Philippine government invoked the Regalian doctrine and contended that
Cariño failed to comply with the provisions of the Royal Decree of June 25, 1880, which
required registration of land claims within a limited period of time. Cariño, on the other,
asserted that he was the absolute owner of the land jure gentium, and that the land never
formed part of the public domain.
In a unanimous decision written by Justice Oliver Wendell Holmes, the U.S. Supreme
Court held:
"It is true that Spain, in its earlier decrees, embodied the universal feudal theory that all
lands were held from the Crown, and perhaps the general attitude of conquering nations
toward people not recognized as entitled to the treatment accorded to those in the same
zone of civilization with themselves. It is true, also, that in legal theory, sovereignty is
absolute, and that, as against foreign nations, the United States may assert, as Spain
asserted, absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain had such power. When theory is left on
one side, sovereignty is a question of strength, and may vary in degree. How far a new
sovereign shall insist upon the theoretical relation of the subjects to the head in the past,
and how far it shall recognize actual facts, are matters for it to decide."137
The U.S. Supreme Court noted that it need not accept Spanish doctrines. The choice was
with the new colonizer. Ultimately, the matter had to be decided under U.S. law.
The Cariño decision largely rested on the North American constitutionalist's concept of
"due process" as well as the pronounced policy "to do justice to the natives."138 It was
based on the strong mandate extended to the Islands via the Philippine Bill of 1902 that
"No law shall be enacted in said islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal protection
of the laws." The court declared:
"The acquisition of the Philippines was not like the settlement of the white race in the
United States. Whatever consideration may have been shown to the North American
Indians, the dominant purpose of the whites in America was to occupy land. It is obvious
that, however stated, the reason for our taking over the Philippines was different. No
one, we suppose, would deny that, so far as consistent with paramount necessities, our
first object in the internal administration of the islands is to do justice to the natives, not
to exploit their country for private gain. By the Organic Act of July 1, 1902, chapter 1369,
section 12 (32 Statutes at Large, 691), all the property and rights acquired there by the
United States are to be administered 'for the benefit of the inhabitants thereof.' It is
reasonable to suppose that the attitude thus assumed by the United States with regard to
what was unquestionably its own is also its attitude in deciding what it will claim for its
own. The same statute made a bill of rights, embodying the safeguards of the
Constitution, and, like the Constitution, extends those safeguards to all. It provides that
'no law shall be enacted in said islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal protection
of the laws.' In the light of the declaration that we have quoted from section 12, it is hard
to believe that the United States was ready to declare in the next breath that "any
person" did not embrace the inhabitants of Benguet, or that it meant by "property" only
that which had become such by ceremonies of which presumably a large part of the
inhabitants never had heard, and that it proposed to treat as public land what they, by
native custom and by long association,- of the profoundest factors in human thought,-
regarded as their own."139
The Court went further:
"Every presumption is and ought to be against the government in a case like the
present. It might, perhaps, be proper and sufficient to say that when, as far back as
testimony or memory goes, the land has been held by individuals under a claim of
private ownership, it will be presumed to have been held in the same way from
before the Spanish conquest, and never to have been public land. Certainly in a case
like this, if there is doubt or ambiguity in the Spanish law, we ought to give the applicant
the benefit of the doubt."140
The court thus laid down the presumption of a certain title held (1) as far back as
testimony or memory went, and (2) under a claim of private ownership. Land held by
this title is presumed to "never have been public land."
Against this presumption, the U.S. Supreme Court analyzed the Spanish decrees upheld in
the 1904 decision ofValenton v. Murciano. The U.S. Supreme Court found no proof that
the Spanish decrees did not honor native title. On the contrary, the decrees discussed
in Valenton appeared to recognize that the natives owned some land, irrespective of any
royal grant. The Regalian doctrine declared in the preamble of the Recopilacion was all
"theory and discourse" and it was observed that titles were admitted to exist beyond the
powers of the Crown, viz:
"If the applicant's case is to be tried by the law of Spain, we do not discover such
clear proof that it was bad by that law as to satisfy us that he does not own the
land. To begin with, the older decrees and laws cited by the counsel for the plaintiff
in error seem to indicate pretty clearly that the natives were recognized as owning
some lands, irrespective of any royal grant. In other words, Spain did not assume to
convert all the native inhabitants of the Philippines into trespassers or even into tenants
at will. For instance, Book 4, title 12, Law 14 of the the Recopilacion de Leyes de las Indias,
cited for a contrary conclusion in Valenton v. Murciano, 3 Philippine 537, while it
commands viceroys and others, when it seems proper, to call for the exhibition of grants,
directs them to confirm those who hold by good grants or justa prescripcion. It is true
that it begins by the characteristic assertion of feudal overlordship and the origin
of all titles in the King or his predecessors. That was theory and discourse. The fact
was that titles were admitted to exist that owed nothing to the powers of Spain
beyond this recognition in their books." (Emphasis supplied).141
The court further stated that the Spanish "adjustment" proceedings never held sway
over unconquered territories. The wording of the Spanish laws were not framed in a
manner as to convey to the natives that failure to register what to them has always been
their own would mean loss of such land. The registration requirement was "not to confer
title, but simply to establish it;" 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."
By recognizing this kind of title, the court clearly repudiated the doctrine of Valenton. It
was frank enough, however, to admit the possibility that the applicant might have been
deprived of his land under Spanish law because of the inherent ambiguity of the decrees
and concomitantly, the various interpretations which may be given them. But precisely
because of the ambiguity and of the strong "due process mandate" of the
Constitution, the court validated this kind of title.142 This title was sufficient, even
without government administrative action, and entitled the holder to a Torrens
certificate. Justice Holmes explained:
"It will be perceived that the rights of the applicant under the Spanish law present a
problem not without difficulties for courts of a legal tradition. We have deemed it proper
on that account to notice the possible effect of the change of sovereignty and the act of
Congress establishing the fundamental principles now to be observed. Upon a
consideration of the whole case we are of the opinion that law and justice require that
the applicant should be granted what he seeks, and should not be deprived of what, by
the practice and belief of those among whom he lived, was his property, through a
refined interpretation of an almost forgotten law of Spain."143
Thus, the court ruled in favor of Cariño and ordered the registration of the 148
hectares in Baguio Municipality in his name.144
Examining Cariño closer, the U.S. Supreme Court did not categorically refer to the title it
upheld as "native title." It simply said:
"The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his
argument, characterized as a savage tribe that never was brought under the civil
or military government of the Spanish Crown. It seems probable, if not certain,
that the Spanish officials would not have granted to anyone in that province the
registration to which formerly the plaintiff was entitled by the Spanish Laws, and
which would have made his title beyond question good. Whatever may have been the
technical position of Spain it does not follow that, in the view of the United States, he had
lost all rights and was a mere trespasser when the present government seized his land.
The argument to that effect seems to amount to a denial of native titles through an
important part of the Island of Luzon, at least, for the want of ceremonies which the
Spaniards would not have permitted and had not the power to enforce."145
This is the only instance when Justice Holmes used the term "native title" in the entire
length of the Cariño decision. It is observed that the widespread use of the term "native
title" may be traced to Professor Owen James Lynch, Jr., a Visiting Professor at the
University of the Philippines College of Law from the Yale University Law School. In
1982, Prof. Lynch published an article in the Philippine Law Journal entitled Native
Title, Private Right and Tribal Land Law.146 This article was made after Professor
Lynch visited over thirty tribal communities throughout the country and studied the
origin and development of Philippine land laws.147 He discussed Cariño extensively and
used the term "native title" to refer to Cariño's title as discussed and upheld by the U.S.
Supreme Court in said case.
(b) Indian Title
In a footnote in the same article, Professor Lynch stated that the concept of "native title"
as defined by Justice Holmes in Cariño "is conceptually similar to "aboriginal title" of the
American Indians.148 This is not surprising, according to Prof. Lynch, considering that
during the American regime, government policy towards ICCs/IPs was consistently made
in reference to native Americans.149 This was clearly demonstrated in the case of Rubi v.
Provincial Board of Mindoro.150
In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing the provincial
governor to remove the Mangyans from their domains and place them in a permanent
reservation in Sitio Tigbao, Lake Naujan. Any Mangyan who refused to comply was to be
imprisoned. Rubi and some Mangyans, including one who was imprisoned for trying to
escape from the reservation, filed for habeas corpus claiming deprivation of liberty
under the Board Resolution. This Court denied the petition on the ground of police
power. It upheld government policy promoting the idea that a permanent settlement was
the only successful method for educating the Mangyans, introducing civilized customs,
improving their health and morals, and protecting the public forests in which they
roamed.151 Speaking through Justice Malcolm, the court said:
"Reference was made in the President's instructions to the Commission to the policy
adopted by the United States for the Indian Tribes. The methods followed by the
Government of the Philippine Islands in its dealings with the so-called non-Christian
people is said, on argument, to be practically identical with that followed by the United
States Government in its dealings with the Indian tribes. Valuable lessons, it is insisted,
can be derived by an investigation of the American-Indian policy.
From the beginning of the United States, and even before, the Indians have been treated
as "in a state of pupilage." The recognized relation between the Government of the
United States and the Indians may be described as that of guardian and ward. It is for the
Congress to determine when and how the guardianship shall be terminated. The Indians
are always subject to the plenary authority of the United States.152
x x x.
As to the second point, the facts in the Standing Bear case and the Rubi case are not
exactly identical. But even admitting similarity of facts, yet it is known to all that Indian
reservations do exist in the United States, that Indians have been taken from different
parts of the country and placed on these reservations, without any previous consultation
as to their own wishes, and that, when once so located, they have been made to remain
on the reservation for their own good and for the general good of the country. If any
lesson can be drawn from the Indian policy of the United States, it is that the
determination of this policy is for the legislative and executive branches of the
government and that when once so decided upon, the courts should not interfere to
upset a carefully planned governmental system. Perhaps, just as many forceful reasons
exist for the segregation of the Manguianes in Mindoro as existed for the segregation of
the different Indian tribes in the United States."153
Rubi applied the concept of Indian land grants or reservations in the Philippines. An
Indian reservation is a part of the public domain set apart by proper authority for the use
and occupation of a tribe or tribes of Indians.154 It may be set apart by an act of Congress,
by treaty, or by executive order, but it cannot be established by custom and
prescription.155
Indian title to land, however, is not limited to land grants or reservations. It also
covers the "aboriginal right of possession or occupancy." 156 The aboriginal right of
possession depends on the actual occupancy of the lands in question by the tribe or
nation as their ancestral home, in the sense that such lands constitute definable territory
occupied exclusively by the particular tribe or nation.157 It is a right which exists apart
from any treaty, statute, or other governmental action, although in numerous instances
treaties have been negotiated with Indian tribes, recognizing their aboriginal possession
and delimiting their occupancy rights or settling and adjusting their boundaries.158
American jurisprudence recognizes the Indians' or native Americans' rights to
land they have held and occupied before the "discovery" of the Americas by the
Europeans. The earliest definitive statement by the U.S. Supreme Court on the
nature of aboriginal title was made in 1823 in Johnson & Graham's Lessee v.
M'Intosh.159
In Johnson, the plaintiffs claimed the land in question under two (2) grants made by the
chiefs of two (2) Indian tribes. The U.S. Supreme Court refused to recognize this
conveyance, the plaintiffs being private persons. The only conveyance that was
recognized was that made by the Indians to the government of the European discoverer.
Speaking for the court, Chief Justice Marshall pointed out that the potentates of the old
world believed that they had made ample compensation to the inhabitants of the new
world by bestowing civilization and Christianity upon them; but in addition, said the
court, they found it necessary, in order to avoid conflicting settlements and consequent
war, to establish the principle that discovery gives title to the government by whose
subjects, or by whose authority, the discovery was made, against all other
European governments, which title might be consummated by possession.160 The
exclusion of all other Europeans gave to the nation making the discovery the sole right of
acquiring the soil from the natives and establishing settlements upon it. As regards the
natives, the court further stated that:
"Those relations which were to exist between the discoverer and the natives were to be
regulated by themselves. The rights thus acquired being exclusive, no other power could
interpose between them.
In the establishment of these relations, the rights of the original inhabitants were, in no
instance, entirely disregarded; but were necessarily, to a considerable extent,
impaired. They were admitted to be the rightful occupants of the soil, with a legal as
well as just claim to retain possession of it, and to use it according to their own
discretion; but their rights to complete sovereignty, as independent nations, were
necessarily diminished, and their power to dispose of the soil at their own will, to
whomsoever they pleased, was denied by the fundamental principle that discovery gave
exclusive title to those who made it.
While the different nations of Europe respected the right of the natives as
occupants, they asserted the ultimate dominion to be in themselves; and claimed
and exercised, as a consequence of this ultimate dominion, a power to grant the
soil, while yet in possession of the natives. These grants have been understood by
all to convey a title to the grantees, subject only to the Indian right of
occupancy."161
Thus, the discoverer of new territory was deemed to have obtained the exclusive
right to acquire Indian land and extinguish Indian titles. Only to the discoverer- whether
to England, France, Spain or Holland- did this right belong and not to any other nation or
private person. The mere acquisition of the right nonetheless did not extinguish Indian
claims to land. Rather, until the discoverer, by purchase or conquest, exercised its right,
the concerned Indians were recognized as the "rightful occupants of the soil, with a legal
as well as just claim to retain possession of it." Grants made by the discoverer to her
subjects of lands occupied by the Indians were held to convey a title to the grantees,
subject only to the Indian right of occupancy. Once the discoverer purchased the land
from the Indians or conquered them, it was only then that the discoverer gained an
absolute title unrestricted by Indian rights.
The court concluded, in essence, that a grant of Indian lands by Indians could not convey
a title paramount to the title of the United States itself to other parties, saying:
"It has never been contended that the Indian title amounted to nothing. Their right of
possession has never been questioned. The claim of government extends to the
complete ultimate title, charged with this right of possession, and to the exclusive
power of acquiring that right."162
It has been said that the history of America, from its discovery to the present day, proves
the universal recognition of this principle.163
The Johnson doctrine was a compromise. It protected Indian rights and their native
lands without having to invalidate conveyances made by the government to many U.S.
citizens.164
Johnson was reiterated in the case of Worcester v. Georgia.165 In this case, the State of
Georgia enacted a law requiring all white persons residing within the Cherokee nation to
obtain a license or permit from the Governor of Georgia; and any violation of the law was
deemed a high misdemeanor. The plaintiffs, who were white missionaries, did not obtain
said license and were thus charged with a violation of the Act.
The U.S. Supreme Court declared the Act as unconstitutional for interfering with the
treaties established between the United States and the Cherokee nation as well as the
Acts of Congress regulating intercourse with them. It characterized the relationship
between the United States government and the Indians as:
"The Indian nations were, from their situation, necessarily dependent on some foreign
potentate for the supply of their essential wants, and for their protection from lawless
and injurious intrusions into their country. That power was naturally termed their
protector. They had been arranged under the protection of Great Britain; but the
extinguishment of the British power in their neighborhood, and the establishment of that
of the United States in its place, led naturally to the declaration, on the part of the
Cherokees, that they were under the protection of the United States, and of no other
power. They assumed the relation with the United States which had before subsisted
with Great Britain.
This relation was that of a nation claiming and receiving the protection of one more
powerful, not that of individuals abandoning their national character, and submitting as
subjects to the laws of a master."166
It was the policy of the U.S. government to treat the Indians as nations with distinct
territorial boundaries and recognize their right of occupancy over all the lands within
their domains. Thus:
"From the commencement of our government Congress has passed acts to regulate trade
and intercourse with the Indians; which treat them as nations, respect their rights, and
manifest a firm purpose to afford that protection which treaties stipulate. All these acts,
and especially that of 1802, which is still in force, manifestly consider the several
Indian nations as distinct political communities, having territorial boundaries,
within which their authority is exclusive, and having a right to all the lands within
those boundaries, which is not only acknowledged, but guaranteed by the United
States.
x x x.
"The Indian nations had always been considered as distinct, independent political
communities, retaining their original natural rights, as the undisputed possessors
of the soil from time immemorial, with the single exception of that imposed by
irresistible power, which excluded them from intercourse with any other European
potentate than the first discoverer of the coast of the particular region claimed: and this
was a restriction which those European potentates imposed on themselves, as well as on
the Indians. The very term "nation," so generally applied to them, means "a people
distinct from others." x x x.167
The Cherokee nation, then, is a distinct community, occupying its own territory, with
boundaries accurately described, in which the laws of Georgia can have no force, and
which the citizens of Georgia have no right to enter but with the assent of the Cherokees
themselves or in conformity with treaties and with the acts of Congress. The whole
intercourse between the United States and this nation is, by our Constitution and laws,
vested in the government of the United States."168
The discovery of the American continent gave title to the government of the discoverer
as against all other European governments. Designated as the naked fee,169 this title was
to be consummated by possession and was subject to the Indian title of occupancy. The
discoverer acknowledged the Indians' legal and just claim to retain possession of the
land, the Indians being the original inhabitants of the land. The discoverer nonetheless
asserted the exclusive right to acquire the Indians' land- either by purchase, "defensive"
conquest, or cession- and in so doing, extinguish the Indian title. Only the discoverer
could extinguish Indian title because it alone asserted ultimate dominion in itself. Thus,
while the different nations of Europe respected the rights of the natives as occupants,
they all asserted the ultimate dominion and title to be in themselves.170
As early as the 19th century, it became accepted doctrine that although fee title to
the lands occupied by the Indians when the colonists arrived became vested in the
sovereign- first the discovering European nation and later the original 13 States
and the United States- a right of occupancy in the Indian tribes was nevertheless
recognized. The Federal Government continued the policy of respecting the Indian right
of occupancy, sometimes called Indian title, which it accorded the protection of complete
ownership.171 But this aboriginal Indian interest simply constitutes "permission" from
the whites to occupy the land, and means mere possession not specifically recognized as
ownership by Congress.172 It is clear that this right of occupancy based upon aboriginal
possession is not a property right.173 It is vulnerable to affirmative action by the federal
government who, as sovereign, possessed exclusive power to extinguish the right of
occupancy at will.174 Thus, aboriginal title is not the same as legal title. Aboriginal
title rests on actual, exclusive and continuous use and occupancy for a long time.175 It
entails that land owned by Indian title must be used within the tribe, subject to its laws
and customs, and cannot be sold to another sovereign government nor to any
citizen.176 Such title as Indians have to possess and occupy land is in the tribe, and not in
the individual Indian; the right of individual Indians to share in the tribal property
usually depends upon tribal membership, the property of the tribe generally being held
in communal ownership.177
As a rule, Indian lands are not included in the term "public lands," which is ordinarily
used to designate such lands as are subject to sale or other disposal under general
laws.178 Indian land which has been abandoned is deemed to fall into the public
domain.179 On the other hand, an Indian reservation is a part of the public domain set
apart for the use and occupation of a tribe of Indians.180 Once set apart by proper
authority, the reservation ceases to be public land, and until the Indian title is
extinguished, no one but Congress can initiate any preferential right on, or restrict the
nation's power to dispose of, them.181
The American judiciary struggled for more than 200 years with the ancestral land
claims of indigenous Americans.182 And two things are clear. First, aboriginal title is
recognized. Second, indigenous property systems are also recognized. From a legal point
of view, certain benefits can be drawn from a comparison of Philippine IPs to native
Americans.183 Despite the similarities between native title and aboriginal title, however,
there are at present some misgivings on whether jurisprudence on American Indians
may be cited authoritatively in the Philippines. The U.S. recognizes the possessory rights
of the Indians over their land; title to the land, however, is deemed to have passed to the
U.S. as successor of the discoverer. The aboriginal title of ownership is not specifically
recognized as ownership by action authorized by Congress.184 The protection of
aboriginal title merely guards against encroachment by persons other than the Federal
Government.185 Although there are criticisms against the refusal to recognize the native
Americans' ownership of these lands,186 the power of the State to extinguish these titles
has remained firmly entrenched.187
Under the IPRA, the Philippine State is not barred form asserting sovereignty over the
ancestral domains and ancestral lands.188 The IPRA, however, is still in its infancy and
any similarities between its application in the Philippines vis-à-vis American
Jurisprudence on aboriginal title will depend on the peculiar facts of each case.
(c) Why the Cariño doctrine is unique
In the Philippines, the concept of native title first upheld in Cariño and enshrined in the
IPRA grants ownership, albeit in limited form, of the land to the ICCs/IPs. Native title
presumes that the land is private and was never public. Cariño is the only case that
specifically and categorically recognizes native title. The long line of cases
citing Cariño did not touch on native title and the private character of ancestral
domains and lands. Cariñowas cited by the succeeding cases to support the concept
of acquisitive prescription under the Public Land Act which is a different matter
altogether. Under the Public Land Act, land sought to be registered must be public
agricultural land. When the conditions specified in Section 48 [b] of the Public Land Act
are complied with, the possessor of the land is deemed to have acquired, by operation of
law, a right to a grant of the land.189 The land ceases to be part of the public
domain,190 ipso jure,191 and is converted to private property by the mere lapse or
completion of the prescribed statutory period.
It was only in the case of Oh Cho v. Director of Lands192 that the court declared that the
rule that all lands that were not acquired from the government, either by purchase or
grant, belong to the public domain has an exception. This exception would be any land
that should have been in the possession of an occupant and of his predecessors-in-
interest since time immemorial. It is this kind of possession that would justify the
presumption that the land had never been part of the public domain or that it had been
private property even before the Spanish conquest.193 Oh Cho, however, was decided
under the provisions of the Public Land Act and Cariño was cited to support the
applicant's claim of acquisitive prescription under the said Act.
All these years, Cariño had been quoted out of context simply to justify long, continuous,
open and adverse possession in the concept of owner of public agricultural land. It is this
long, continuous, open and adverse possession in the concept of owner of thirty years
both for ordinary citizens194 and members of the national cultural minorities195 that
converts the land from public into private and entitles the registrant to a torrens
certificate of title.
(3) The Option of Securing a Torrens Title to the Ancestral Land Indicates that the
Land is Private.
The private character of ancestral lands and domains as laid down in the IPRA is
further strengthened by the option given to individual ICCs/IPs over their individually-
owned ancestral lands. For purposes of registration under the Public Land Act and
the Land Registration Act, the IPRA expressly converts ancestral land into public
agricultural land which may be disposed of by the State. The necessary implication
is that ancestral land is private. It, however, has to be first converted to public
agricultural land simply for registration purposes. To wit:
"Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or
the Land Registration Act 496- Individual members of cultural communities, with respect
to their individually-owned ancestral lands who, by themselves or through their
predecessors-in-interest, have been in continuous possession and occupation of the
same in the concept of owner since time immemorial or for a period of not less than
thirty (30) years immediately preceding the approval of this Act and uncontested by the
members of the same ICCs/IPs shall have the option to secure title to their ancestral
lands under the provisions of Commonwealth Act 141, as amended, or the Land
Registration Act 496.
For this purpose, said individually-owned ancestral lands, which are agricultural in
character and actually used for agricultural, residential, pasture, and tree farming
purposes, including those with a slope of eighteen percent (18%) or more, are hereby
classified as alienable and disposable agricultural lands.
The option granted under this section shall be exercised within twenty (20) years from
the approval of this Act."196
ICCs/IPs are given the option to secure a torrens certificate of title over their
individually-owned ancestral lands. This option is limited to ancestral lands only, not
domains, and such lands must be individually, not communally, owned.
Ancestral lands that are owned by individual members of ICCs/IPs who, by themselves
or through their predecessors-in-interest, have been in continuous possession and
occupation of the same in the concept of owner since time immemorial197 or for a period
of not less than 30 years, which claims are uncontested by the members of the same
ICCs/IPs, may be registered under C.A. 141, otherwise known as the Public Land Act, or
Act 496, the Land Registration Act. For purposes of registration, the individually-owned
ancestral lands are classified as alienable and disposable agricultural lands of the public
domain, provided, they are agricultural in character and are actually used for
agricultural, residential, pasture and tree farming purposes. These lands shall be
classified as public agricultural lands regardless of whether they have a slope of 18% or
more.
The classification of ancestral land as public agricultural land is in compliance with the
requirements of the Public Land Act and the Land Registration Act. C.A. 141, the Public
Land Act, deals specifically with lands of the public domain.198 Its provisions apply to
those lands "declared open to disposition or concession" x x x "which have not been
reserved for public or quasi-public purposes, 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 x x x or which having been reserved or
appropriated, have ceased to be so."199 Act 496, the Land Registration Act, allows
registration only of private lands and public agricultural lands. Since ancestral domains
and lands are private, if the ICC/IP wants to avail of the benefits of C.A. 141 and Act
496, the IPRA itself converts his ancestral land, regardless of whether the land has
a slope of eighteen per cent (18%) or over,200 from private to public agricultural
land for proper disposition.
The option to register land under the Public Land Act and the Land Registration Act has
nonetheless a limited period. This option must be exercised within twenty (20) years
from October 29, 1997, the date of approval of the IPRA.
Thus, ancestral lands and ancestral domains are not part of the lands of the public
domain. They are private and belong to the ICCs/IPs. Section 3 of Article XII on
National Economy and Patrimony of the 1987 Constitution classifies lands of the public
domain into four categories: (a) agricultural, (b) forest or timber, (c) mineral lands, and
(d) national parks. Section 5 of the same Article XII mentions ancestral lands and
ancestral domains but it does not classify them under any of the said four categories. To
classify them as public lands under any one of the four classes will render the
entire IPRA law a nullity. The spirit of the IPRA lies in the distinct concept of ancestral
domains and ancestral lands. The IPRA addresses the major problem of the ICCs/IPs
which is loss of land. Land and space are of vital concern in terms of sheer survival of the
ICCs/IPs.201
The 1987 Constitution mandates the State to "protect the rights of indigenous
cultural communities to their ancestral lands" and that "Congress provide for the
applicability of customary laws x x x in determining the ownership and extent of
ancestral domain."202 It is the recognition of the ICCs/IPs distinct rights of
ownership over their ancestral domains and lands that breathes life into this
constitutional mandate.
B. The right of ownership and possession by the ICCs/IPs of their ancestral
domains is a limited form of ownership and does not include the right to alienate
the same.
Registration under the Public Land Act and Land Registration Act recognizes the concept
of ownership under the civil law. This ownership is based on adverse possession for a
specified period, and harkens to Section 44 of the Public Land Act on administrative
legalization (free patent) of imperfect or incomplete titles and Section 48 (b) and (c) of
the same Act on the judicial confirmation of imperfect or incomplete titles. Thus:
"Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than
twenty-four hectares and who since July fourth, 1926 or prior thereto, has continuously
occupied and cultivated, either by himself or through his predecessors-in-interest, a tract
or tracts of agricultural public lands subject to disposition, or who shall have paid the
real estate tax thereon while the same has not been occupied by any person shall be
entitled, under the provisions of this chapter, to have a free patent issued to him for such
tract or tracts of such land not to exceed twenty-four hectares.
A member of the national cultural minorities who has continuously occupied and
cultivated, either by himself or through his predecessors-in-interest, a tract or
tracts of land, whether disposable or not since July 4, 1955, shall be entitled to the
right granted in the preceding paragraph of this section: Provided, That at the time
he files his free patent application he is not the owner of any real property secured
or disposable under the provision of the Public Land Law.203
x x x.
"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:
(a) [perfection of Spanish titles] 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 sub-section (b) hereof."204
Registration under the foregoing provisions presumes that the land was originally public
agricultural land but because of adverse possession since July 4, 1955 (free patent) or at
least thirty years (judicial confirmation), the land has become private. Open, adverse,
public and continuous possession is sufficient, provided, the possessor makes proper
application therefor. The possession has to be confirmed judicially or administratively
after which a torrens title is issued.
A torrens title recognizes the owner whose name appears in the certificate as entitled to
all the rights of ownership under the civil law. The Civil Code of the Philippines defines
ownership in Articles 427, 428 and 429. This concept is based on Roman Law which the
Spaniards introduced to the Philippines through the Civil Code of 1889. Ownership,
under Roman Law, may be exercised over things or rights. It primarily includes the right
of the owner to enjoy and dispose of the thing owned. And the right to enjoy and dispose
of the thing includes the right to receive from the thing what it produces,205 the right to
consume the thing by its use,206 the right to alienate, encumber, transform or even
destroy the thing owned,207 and the right to exclude from the possession of the thing
owned by any other person to whom the owner has not transmitted such thing.208
1. The Indigenous Concept of Ownership and Customary Law.
Ownership of ancestral domains by native title does not entitle the ICC/IP to a torrens
title but to a Certificate of Ancestral Domain Title (CADT). The CADT formally recognizes
the indigenous concept of ownership of the ICCs/IPs over their ancestral domain. Thus:
"Sec. 5. Indigenous concept of ownership.- Indigenous concept of ownership sustains the
view that ancestral domains and all resources found therein shall serve as the material
bases of their cultural integrity. The indigenous concept of ownership generally holds
that ancestral domains are the ICCs/IPs private but community property which belongs
to all generations and therefore cannot be sold, disposed or destroyed. It likewise covers
sustainable traditional resource rights."
The right of ownership and possession of the ICCs/IPs to their ancestral domains is
held under the indigenous concept of ownership. This concept maintains the view
that ancestral domains are the ICCs/IPs private but community property. It is
private simply because it is not part of the public domain. But its private character
ends there. The ancestral domain is owned in common by the ICCs/IPs and not by
one particular person. The IPRA itself provides that areas within the ancestral
domains, whether delineated or not, are presumed to be communally held.209 These
communal rights, however, are not exactly the same as co-ownership rights under
the Civil Code.210 Co-ownership gives any co-owner the right to demand partition of the
property held in common. The Civil Code expressly provides that "no co-owner shall be
obliged to remain in the co-ownership." Each co-owner may demand at any time the
partition of the thing in common, insofar as his share is concerned.211 To allow such a
right over ancestral domains may be destructive not only of customary law of the
community but of the very community itself.212
Communal rights over land are not the same as corporate rights over real
property, much less corporate condominium rights. A corporation can exist only for
a maximum of fifty (50) years subject to an extension of another fifty years in any single
instance.213 Every stockholder has the right to disassociate himself from the
corporation.214 Moreover, the corporation itself may be dissolved voluntarily or
involuntarily.215
Communal rights to the land are held not only by the present possessors of the
land but extends to all generations of the ICCs/IPs, past, present and future, to the
domain. This is the reason why the ancestral domain must be kept within the ICCs/IPs
themselves. The domain cannot be transferred, sold or conveyed to other persons. It
belongs to the ICCs/IPs as a community.
Ancestral lands are also held under the indigenous concept of ownership. The lands
are communal. These lands, however, may be transferred subject to the following
limitations: (a) only to the members of the same ICCs/IPs; (b) in accord with customary
laws and traditions; and (c) subject to the right of redemption of the ICCs/IPs for a
period of 15 years if the land was transferred to a non-member of the ICCs/IPs.
Following the constitutional mandate that "customary law govern property rights or
relations in determining the ownership and extent of ancestral domains,"216 the IPRA,
by legislative fiat, introduces a new concept of ownership. This is a concept that
has long existed under customary law.217
Custom, from which customary law is derived, is also recognized under the Civil
Code as a source of law.218 Some articles of the Civil Code expressly provide that
custom should be applied in cases where no codal provision is applicable.219 In other
words, in the absence of any applicable provision in the Civil Code, custom, when duly
proven, can define rights and liabilities.220
Customary law is a primary, not secondary, source of rights under the IPRA and
uniquely applies to ICCs/IPs. Its recognition does not depend on the absence of a
specific provision in the civil law. The indigenous concept of ownership under
customary law is specifically acknowledged and recognized, and coexists with the civil
law concept and the laws on land titling and land registration.221
To be sure, the indigenous concept of ownership exists even without a paper
title. The CADT is merely a "formal recognition" of native title. This is clear from Section
11 of the IPRA, to wit:
"Sec. 11. Recognition of Ancestral Domain Rights.- The rights of ICCs/IPs to their ancestral
domains by virtue of Native Title shall be recognized and respected. Formal recognition,
when solicited by ICCs/IPs concerned shall be embodied in a Certificate of Ancestral
Domain Title, which shall recognize the title of the concerned ICCs/IPs over the
territories identified and delineated."
The moral import of ancestral domain, native land or being native is "belongingness" to
the land, being people of the land- by sheer force of having sprung from the land since
time beyond recall, and the faithful nurture of the land by the sweat of one's brow. This is
fidelity of usufructuary relation to the land- the possession of stewardship through
perduring, intimate tillage, and the mutuality of blessings between man and land; from
man, care for land; from the land, sustenance for man.222
C. Sections 7 (a), 7 (b) and 57 of the IPRA Do Not Violate the Regalian Doctrine
Enshrined in Section 2, Article XII of the 1987 Constitution.
1. The Rights of ICCs/IPs Over Their Ancestral Domains and Lands
The IPRA grants the ICCs/IPs several rights over their ancestral domains and ancestral
lands. Section 7 provides for the rights over ancestral domains:
"Sec. 7. Rights to Ancestral Domains.- The rights of ownership and possession of ICCs/IPs
to their ancestral domains shall be recognized and protected. Such rights include:
a) Right of Ownership.- The right to claim ownership over lands, bodies of
water traditionally and actually occupied by ICCs/IPs, sacred places,
traditional hunting and fishing grounds, and all improvements made by
them at any time within the domains;
b) Right to Develop Lands and Natural Resources.- Subject to Section 56
hereof, the right to develop, control and use lands and territories
traditionally occupied, owned, or used; to manage and conserve natural
resources within the territories and uphold the responsibilities for future
generations; to benefit and share the profits from allocation and
utilization of the natural resources found therein; the right to negotiate
the terms and conditions for the exploration of natural resources in the
areas for the purpose of ensuring ecological, environmental protection
and the conservation measures, pursuant to national and customary
laws; the right to an informed and intelligent participation in the formulation
and implementation of any project, government or private, that will affect or
impact upon the ancestral domains and to receive just and fair compensation
for any damages which they may sustain as a result of the project; and the right
to effective measures by the government to prevent any interference with,
alienation and encroachment upon these rights;"
c) Right to Stay in the Territories.- The right to stay in the territory and not to be
removed therefrom. No ICCs/IPs will be relocated without their free and prior
informed consent, nor through any means other than eminent domain. x x x;
d) Right in Case of Displacement.- In case displacement occurs as a result of
natural catastrophes, the State shall endeavor to resettle the displaced ICCs/IPs
in suitable areas where they can have temporary life support systems: x x x;
e) Right to Regulate the Entry of Migrants.- Right to regulate the entry of
migrant settlers and organizations into their domains;
f) Right to Safe and Clean Air and Water.-For this purpose, the ICCs/IPs shall
have access to integrated systems for the management of their inland waters
and air space;
g) Right to Claim Parts of Reservations.- The right to claim parts of the ancestral
domains which have been reserved for various purposes, except those reserved
and intended for common and public welfare and service;
h) Right to Resolve Conflict.- Right to resolve land conflicts in accordance with
customary laws of the area where the land is located, and only in default
thereof shall the complaints be submitted to amicable settlement and to the
Courts of Justice whenever necessary."
Section 8 provides for the rights over ancestral lands:
"Sec. 8. Rights to Ancestral Lands.- The right of ownership and possession of the ICCs/IPs
to their ancestral lands shall be recognized and protected.
a) Right to transfer land/property.- Such right shall include the right to transfer
land or property rights to/among members of the same ICCs/IPs, subject to
customary laws and traditions of the community concerned.
 b) Right to Redemption.- In cases where it is shown that the transfer of
land/property rights by virtue of any agreement or devise, to a non-member of
the concerned ICCs/IPs is tainted by the vitiated consent of the ICCs/IPs, or is
transferred for an unconscionable consideration or price, the transferor ICC/IP
shall have the right to redeem the same within a period not exceeding fifteen
(15) years from the date of transfer."
Section 7 (a) defines the ICCs/IPs the right of ownership over their
ancestral domains which covers (a) lands, (b) bodies of water traditionally and actually
occupied by the ICCs/IPs, (c) sacred places, (d) traditional hunting and fishing grounds,
and (e) all improvements made by them at any time within the domains. The right of
ownership includes the following rights: (1) the right to develop lands and natural
resources; (b) the right to stay in the territories; (c) the right to resettlement in case of
displacement; (d) the right to regulate the entry of migrants; (e) the right to safe and
clean air and water; (f) the right to claim parts of the ancestral domains as reservations;
and (g) the right to resolve conflict in accordance with customary laws.
Section 8 governs their rights to ancestral lands. Unlike ownership over the ancestral
domains, Section 8 gives the ICCs/IPs also the right to transfer the land or property
rights to members of the same ICCs/IPs or non-members thereof. This is in keeping with
the option given to ICCs/IPs to secure a torrens title over the ancestral lands, but not to
domains.
2. The Right of ICCs/IPs to Develop Lands and Natural Resources Within the Ancestral
Domains Does Not Deprive the State of Ownership Over the Natural Resources and
Control and Supervision in their Development and Exploitation.
The Regalian doctrine on the ownership, management and utilization of natural
resources is declared in Section 2, Article XII of the 1987 Constitution, viz:
"Sec. 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. The State may directly undertake such
activities, or, it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law. In cases of water rights
for irrigation, water supply, fisheries, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the measure and limit of the
grant.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to
Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens, as well as cooperative fish farming, with priority to subsistence
fishermen and fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving
either technical or financial assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils according to the general
terms and conditions provided by law, based on real contributions to the economic
growth and general welfare of the country. In such agreements, the state shall promote
the development and use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with
this provision, within thirty days from its execution."223
All lands of the public domain and all natural resources- 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.
The Constitution provides that in the exploration, development and utilization of these
natural resources, the State exercises full control and supervision, and may undertake
the same in four (4) modes:
1. The State may directly undertake such activities; or
2. The State may enter into co-production, joint venture or production-sharing
agreements with Filipino citizens or qualified corporations;
3. Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens;
4. For the large-scale exploration, development and utilization of minerals,
petroleum and other mineral oils, the President may enter into agreements
with foreign-owned corporations involving technical or financial assistance.
As owner of the natural resources, the State is accorded primary power and
responsibility in the exploration, development and utilization of these natural
resources. The State may directly undertake the exploitation and development by itself,
or, it may allow participation by the private sector through co-production,224joint
venture,225 or production-sharing agreements.226 These agreements may be for a period
of 25 years, renewable for another 25 years. The State, through Congress, may allow the
small-scale utilization of natural resources by Filipino citizens. For the large-scale
exploration of these resources, specifically minerals, petroleum and other mineral oils,
the State, through the President, may enter into technical and financial assistance
agreements with foreign-owned corporations.
Under the Philippine Mining Act of 1995, (R.A. 7942) and the People's Small-Scale Mining
Act of 1991 (R.A. 7076) the three types of agreements, i.e., co-production, joint venture
or production-sharing, may apply to both large-scale227 and small-scale
mining.228 "Small-scale mining" refers to "mining activities which rely heavily on manual
labor using simple implements and methods and do not use explosives or heavy mining
equipment."229
Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs
ownership over the natural resources within their ancestral domains. The right of
ICCs/IPs in their ancestral domains includes ownership, but this "ownership" is
expressly defined and limited in Section 7 (a) as:
"Sec. 7. a) Right of ownership- The right to claim ownership over lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and
fishing grounds, and all improvements made by them at any time within the domains;"
The ICCs/IPs are given the right to claim ownership over "lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and
fishing grounds, and all improvements made by them at any time within the domains." It
will be noted that this enumeration does not mention bodies of water not occupied by
the ICCs/IPs, minerals, coal, wildlife, flora and fauna in the traditional hunting
grounds, fish in the traditional fishing grounds, forests or timber in the sacred places, etc.
and all other natural resources found within the ancestral domains. Indeed, the right of
ownership under Section 7 (a) does not cover
"waters, minerals, coal, petroleum and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, floraand fauna and all other natural
resources" enumerated in Section 2, Article XII of the 1987 Constitution as
belonging to the State.
The non-inclusion of ownership by the ICCs/IPs over the natural resources in Section
7(a) complies with the Regalian doctrine.
(a) Section 1, Part II, Rule III of the Implementing Rules Goes Beyond the
Parameters of Sec. 7 (a) of the IPRA And is Unconstitutional.
The Rules Implementing the IPRA230 in Section 1, Part II, Rule III reads:
"Section 1. Rights of Ownership. ICCs/IPs have rights of ownership over lands, waters,
and natural resources and all improvements made by them at any time within the
ancestral domains/ lands. These rights shall include, but not limited to, the right over the
fruits, the right to possess, the right to use, right to consume, right to exclude and right to
recover ownership, and the rights or interests over land and natural resources. The right
to recover shall be particularly applied to lands lost through fraud or any form or vitiated
consent or transferred for an unconscionable price."
Section 1 of the Implementing Rules gives the ICCs/IPs rights of ownership over "lands,
waters and natural resources." The term "natural resources" is not one of those
expressly mentioned in Section 7 (a) of the law. Our Constitution and jurisprudence
clearly declare that the right to claim ownership over land does not necessarily include
the right to claim ownership over the natural resources found on or under the
land.231 The IPRA itself makes a distinction between land and natural resources.
Section 7 (a) speaks of the right of ownership only over the land within the
ancestral domain. It is Sections 7 (b) and 57 of the law that speak of natural
resources, and these provisions, as shall be discussed later, do not give the
ICCs/IPs the right of ownership over these resources.
The constitutionality of Section 1, Part II, Rule III of the Implementing Rules was not
specifically and categorically challenged by petitioners. Petitioners actually assail the
constitutionality of the Implementing Rules in general.232Nevertheless, to avoid any
confusion in the implementation of the law, it is necessary to declare that the inclusion of
"natural resources" in Section 1, Part II, Rule III of the Implementing Rules goes beyond
the parameters of Section 7 (b) of the law and is contrary to Section 2, Article XII of
the 1987 Constitution.
(b) The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of the IPRA Is
Allowed Under Paragraph 3, Section 2 of Article XII of the Constitution.
Ownership over natural resources remain with the State and the IPRA in Section 7 (b)
merely grants the ICCs/IPs the right to manage them, viz:
"Sec. 7 (b) Right to Develop Lands and Natural Resources.- Subject to Section 56
hereof, right to develop, control and use lands and territories traditionally occupied,
owned, or used; to manage and conserve natural resourceswithin the territories and
uphold the responsibilities for future generations; to benefit and share the profits from
allocation and utilization of the natural resources found therein; the right to
negotiate the terms and conditions for the exploration of natural resources in the areas
for the purpose of ensuring ecological, environmental protection and the conservation
measures, pursuant to national and customary laws; the right to an informed and
intelligent participation in the formulation and implementation of any project,
government or private, that will affect or impact upon the ancestral domains and to
receive just and fair compensation for any damages which they may sustain as a result of
the project; and the right to effective measures by the government to prevent any
interference with, alienation and encroachment upon these rights;"
The right to develop lands and natural resources under Section 7 (b) of the IPRA
enumerates the following rights:
a) the right to develop, control and use lands and territories traditionally
occupied;
b) the right to manage and conserve natural resources within the territories
and uphold the responsibilities for future generations;
c) the right to benefit and share the profits from the allocation and utilization of
the natural resources found therein;
d) the right to negotiate the terms and conditions for the exploration of natural
resources for the purpose of ensuring ecological, environmental protection and
the conservation measures, pursuant to national and customary laws;
 e) the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact
upon the ancestral domains and to receive just and fair compensation for any
damages which they may sustain as a result of the project;
f) the right to effective measures by the government to prevent any
interference with, alienation and encroachment upon these rights.233
Ownership over the natural resources in the ancestral domains remains with the
State and the ICCs/IPs are merely granted the right to "manage and conserve"
them for future generations, "benefit and share" the profits from their allocation
and utilization, and "negotiate the terms and conditions for their exploration" for
the purpose of "ensuring ecological and environmental protection and
conservation measures." It must be noted that the right to negotiate the terms and
conditions over the natural resources covers only their exploration which must be for
the purpose of ensuring ecological and environmental protection of, and conservation
measures in the ancestral domain. It does not extend to the exploitation and
development of natural resources.
Simply stated, the ICCs/IPs' rights over the natural resources take the form of
management or stewardship. For the ICCs/IPs may use these resources and share in
the profits of their utilization or negotiate the terms for their exploration. At the same
time, however, the ICCs/IPs must ensure that the natural resources within their
ancestral domains are conserved for future generations and that the "utilization" of these
resources must not harm the ecology and environment pursuant to national and
customary laws.234
The limited rights of "management and use" in Section 7 (b) must be taken to
contemplate small-scale utilization of natural resources as distinguished from
large-scale. Small-scale utilization of natural resources is expressly allowed in the
third paragraph of Section 2, Article XII of the Constitution "in recognition of the
plight of forest dwellers, gold panners, marginal fishermen and others similarly situated
who exploit our natural resources for their daily sustenance and survival."235 Section 7
(b) also expressly mandates the ICCs/IPs to manage and conserve these resources and
ensure environmental and ecological protection within the domains, which duties, by
their very nature, necessarily reject utilization in a large-scale.
(c) The Large-Scale Utilization of Natural Resources In Section 57 of the IPRA Is
Allowed Under Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution.
Section 57 of the IPRA provides:
"Sec. 57. Natural Resources within Ancestral Domains.- The ICCs/IPs shall have priority
rights in the harvesting, extraction, development or exploitation of any natural
resources within the ancestral domains. A non-member of the ICCs/IPs concerned may
be allowed to take part in the development and utilization of the natural resources for a
period of not exceeding twenty-five (25) years renewable for not more than twenty-five
(25) years: Provided, That a formal and written agreement is entered into with the
ICCs/IPs concerned or that the community, pursuant to its own decision-making process,
has agreed to allow such operation: Provided finally, That the NCIP may exercise
visitorial powers and take appropriate action to safeguard the rights of the ICCs/IPs
under the same contract."
Section 57 speaks of the "harvesting, extraction, development or exploitation of
natural resources within ancestral domains" and "gives the ICCs/IPs 'priority rights'
therein." The terms "harvesting, extraction, development or exploitation" of any
natural resources within the ancestral domains obviously refer to large-scale
utilization. It is utilization not merely for subsistence but for commercial or other
extensive use that require technology other than manual labor.236 The law recognizes the
probability of requiring a non-member of the ICCs/IPs to participate in the development
and utilization of the natural resources and thereby allows such participation for a
period of not more than 25 years, renewable for another 25 years. This may be done on
condition that a formal written agreement be entered into by the non-member and
members of the ICCs/IPs.
Section 57 of the IPRA does not give the ICCs/IPs the right to "manage and conserve" the
natural resources. Instead, the law only grants the ICCs/IPs "priority rights" in the
development or exploitation thereof. Priority means giving preference. Having priority
rights over the natural resources does not necessarily mean ownership rights. The grant
of priority rights implies that there is a superior entity that owns these resources and
this entity has the power to grant preferential rights over the resources to whosoever
itself chooses.
Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an affirmation of the
said doctrine that all natural resources found within the ancestral domains belong to the
State. It incorporates by implication the Regalian doctrine, hence, requires that the
provision be read in the light of Section 2, Article XII of the 1987
Constitution. Interpreting Section 2, Article XII of the 1987 Constitution237 in
relation to Section 57 of IPRA, the State, as owner of these natural resources, may
directly undertake the development and exploitation of the natural resources by
itself, or in the alternative, it may recognize the priority rights of the ICCs/IPs as
owners of the land on which the natural resources are found by entering into a co-
production, joint venture, or production-sharing agreement with them. The State
may likewise enter into any of said agreements with a non-member of the
ICCs/IPs, whether natural or juridical, or enter into agreements with foreign-
owned corporations involving either technical or financial assistance for the large-
scale exploration, development and utilization of minerals, petroleum, and other
mineral oils, or allow such non-member to participate in its agreement with the
ICCs/IPs. If the State decides to enter into an agreement with a non-ICC/IP member, the
National Commission on Indigenous Peoples (NCIP) shall ensure that the rights of the
ICCs/IPs under the agreement shall be protected. The agreement shall be for a period of
25 years, renewable for another 25 years.
To reiterate, in the large-scale utilization of natural resources within the ancestral
domains, the State, as owner of these resources, has four (4) options: (1) it may, of and
by itself, directly undertake the development and exploitation of the natural resources;
or (2) it may recognize the priority rights of the ICCs/IPs by entering into an agreement
with them for such development and exploitation; or (3) it may enter into an agreement
with a non-member of the ICCs/IPs, whether natural or juridical, local or foreign; or (4) it
may allow such non-member to participate in the agreement with the ICCs/IPs.
The rights granted by the IPRA to the ICCs/IPs over the natural resources in their
ancestral domains merely gives the ICCs/IPs, as owners and occupants of the land
on which the resources are found, the right to the small-scale utilization of these
resources, and at the same time, a priority in their large-scale development and
exploitation. Section 57 does not mandate the State to automatically give priority
to the ICCs/IPs. The State has several options and it is within its discretion to
choose which option to pursue. Moreover, there is nothing in the law that gives the
ICCs/IPs the right to solely undertake the large-scale development of the natural
resources within their domains. The ICCs/IPs must undertake such endeavour
always under State supervision or control. This indicates that the State does not lose
control and ownership over the resources even in their exploitation. Sections 7 (b) and
57 of the law simply give due respect to the ICCs/IPs who, as actual occupants of the land
where the natural resources lie, have traditionally utilized these resources for their
subsistence and survival.
Neither is the State stripped of ownership and control of the natural resources by the
following provision:
"Section 59. Certification Precondition.- All departments and other governmental agencies
shall henceforth be strictly enjoined from issuing, renewing or granting any concession,
license or lease, or entering into any production-sharing agreement. without prior
certification from the NCIP that the area affected does not overlap with any ancestral
domain. Such certification shall only be issued after a field-based investigation is
conducted by the Ancestral Domains Office of the area concerned: Provided, That no
certification shall be issued by the NCIP without the free and prior informed and written
consent of the ICCs/IPs concerned: Provided, further, That no department, government
agency or government-owned or -controlled corporation may issue new concession,
license, lease, or production sharing agreement while there is a pending application for a
CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in
accordance with this Act, any project that has not satisfied the requirement of this
consultation process."
Concessions, licenses, lease or production-sharing agreements for the exploitation of
natural resources shall not be issued, renewed or granted by all departments and
government agencies without prior certification from the NCIP that the area subject of
the agreement does not overlap with any ancestral domain. The NCIP certification shall
be issued only after a field-based investigation shall have been conducted and the free
and prior informed written consent of the ICCs/IPs obtained. Non-compliance with the
consultation requirement gives the ICCs/IPs the right to stop or suspend any project
granted by any department or government agency.
As its subtitle suggests, this provision requires as a precondition for the issuance of any
concession, license or agreement over natural resources, that a certification be issued by
the NCIP that the area subject of the agreement does not lie within any ancestral domain.
The provision does not vest the NCIP with power over the other agencies of the State as
to determine whether to grant or deny any concession or license or agreement. It merely
gives the NCIP the authority to ensure that the ICCs/IPs have been informed of the
agreement and that their consent thereto has been obtained. Note that the certification
applies to agreements over natural resources that do not necessarily lie within the
ancestral domains. For those that are found within the said domains, Sections 7(b) and
57 of the IPRA apply.
V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN THE
INDIGENOUS INTERNATIONAL MOVEMENT.
The indigenous movement can be seen as the heir to a history of anti-imperialism
stretching back to prehistoric times. The movement received a massive impetus during
the 1960's from two sources. First, the decolonization of Asia and Africa brought into the
limelight the possibility of peoples controlling their own destinies. Second, the right of
self-determination was enshrined in the UN Declaration on Human Rights.238 The rise of
the civil rights movement and anti-racism brought to the attention of North American
Indians, Aborigines in Australia, and Maori in New Zealand the possibility of fighting for
fundamental rights and freedoms.
In 1974 and 1975, international indigenous organizations were founded, 239 and during
the 1980's, indigenous affairs were on the international agenda. The people of the
Philippine Cordillera were the first Asians to take part in the international indigenous
movement. It was the Cordillera People's Alliance that carried out successful campaigns
against the building of the Chico River Dam in 1981-82 and they have since become one
of the best-organized indigenous bodies in the world.240
Presently, there is a growing concern for indigenous rights in the international scene.
This came as a result of the increased publicity focused on the continuing disrespect for
indigenous human rights and the destruction of the indigenous peoples' environment,
together with the national governments' inability to deal with the situation.241Indigenous
rights came as a result of both human rights and environmental protection, and have
become a part of today's priorities for the international agenda.242
International institutions and bodies have realized the necessity of applying policies,
programs and specific rules concerning IPs in some nations. The World Bank, for
example, first adopted a policy on IPs as a result of the dismal experience of projects in
Latin America.243 The World Bank now seeks to apply its current policy on IPs to some of
its projects in Asia. This policy has provided an influential model for the projects of the
Asian Development Bank.244
The 1987 Philippine Constitution formally recognizes the existence of ICCs/IPs and
declares as a State policy the promotion of their rights within the framework of national
unity and development.245 The IPRA amalgamates the Philippine category of ICCs with
the international category of IPs,246 and is heavily influenced by both the International
Labor Organization (ILO) Convention 169 and the United Nations (UN) Draft Declaration
on the Rights of Indigenous Peoples.247
ILO Convention No. 169 is entitled the "Convention Concerning Indigenous and Tribal
Peoples in Independent Countries"248 and was adopted on June 27, 1989. It is based on
the Universal Declaration of Human Rights, the International Covenant on Economic,
Social and Cultural Rights, the International Covenant on Civil and Political Rights, and
many other international instruments on the prevention of discrimination. 249 ILO
Convention No. 169 revised the "Convention Concerning the Protection and Integration
of Indigenous and Other Tribal and Semi-Tribal Populations in Independent Countries"
(ILO No. 107) passed on June 26, 1957. Developments in international law made it
appropriate to adopt new international standards on indigenous peoples "with a view to
removing the assimilationist orientation of the earlier standards," and recognizing the
aspirations of these peoples to exercise control over their own institutions, ways of life
and economic development."250

CONCLUSION

The struggle of the Filipinos throughout colonial history had been plagued by ethnic and
religious differences. These differences were carried over and magnified by the
Philippine government through the imposition of a national legal order that is mostly
foreign in origin or derivation.251 Largely unpopulist, the present legal system has
resulted in the alienation of a large sector of society, specifically, the indigenous peoples.
The histories and cultures of the indigenes are relevant to the evolution of Philippine
culture and are vital to the understanding of contemporary problems.252 It is through the
IPRA that an attempt was made by our legislators to understand Filipino society not in
terms of myths and biases but through common experiences in the course of history. The
Philippines became a democracy a centennial ago and the decolonization process still
continues. If the evolution of the Filipino people into a democratic society is to truly
proceed democratically, i.e., if the Filipinos as a whole are to participate fully in the task
of continuing democratization,253 it is this Court's duty to acknowledge the presence of
indigenous and customary laws in the country and affirm their co-existence with the
land laws in our national legal system.

With the foregoing disquisitions, I vote to uphold the constitutionality of the Indigenous
Peoples Rights Act of 1997.
G.R. No. 74833 January 21, 1991
THOMAS C. CHEESMAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.
Estanislao L. Cesa, Jr. for petitioner.
Benjamin I. Fernandez for private respondent.
NARVASA, J.:
This appeal concerns the attempt by an American citizen (petitioner Thomas Cheesman)
to annul — for lack of consent on his part — the sale by his Filipino wife (Criselda) of a
residential lot and building to Estelita Padilla, also a Filipino.
Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970 but
have been separated since February 15,1981.1
On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed by
Armando Altares conveying a parcel of unregistered land and the house thereon (at No. 7
Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P. Cheesman, of
legal age, Filipino citizen, married to Thomas Cheesman, and residing at Lot No. 1, Blk. 8,
Filtration Road, Sta. Rita, Olongapo City . . ."2 Thomas Cheesman, although aware of the
deed, did not object to the transfer being made only to his wife.3
Thereafter—and again with the knowledge of Thomas Cheesman and also without any
protest by him—tax declarations for the property purchased were issued in the name
only of Criselda Cheesman and Criselda assumed exclusive management and
administration of said property, leasing it to tenants.4
On July 1, 1981, Criselda Cheesman sold the property to Estelita M. Padilla, without the
knowledge or consent of Thomas Cheesman.5 The deed described Criselda as being" . . .
of legal age, married to an American citizen,. . ."6
Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of
First Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, praying for
the annulment of the sale on the ground that the transaction had been executed without
his knowledge and consent.7 An answer was filed in the names of both defendants,
alleging that (1) the property sold was paraphernal, having been purchased by Criselda
with funds exclusively belonging to her ("her own separate money"); (2) Thomas
Cheesman, being an American, was disqualified to have any interest or right of
ownership in the land; and (3) Estelita Padilla was a buyer in good faith.8
During the pre-trial conference, the parties agreed upon certain facts which were
subsequently set out in a pre-trial Order dated October 22, 1981,9 as follows:
1. Both parties recognize the existence of the Deed of Sale over the residential
house located at No. 7 Granada St., Gordon Heights, Olongapo City, which was
acquired from Armando Altares on June 4, 1974 and sold by defendant Criselda
Cheesman to Estelita Padilla on July 12, 1981; and
2. That the transaction regarding the transfer of their property took place
during the existence of their marriage as the couple were married on December
4, 1970 and the questioned property was acquired sometime on June 4,1974.
The action resulted in a judgment dated June 24, 1982,10 declaring void ab initio the sale
executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the delivery
of the property to Thomas Cheesman as administrator of the conjugal partnership
property, and the payment to him of P5,000.00 as attorney's fees and expenses of
litigation.11
The judgment was however set aside as regards Estelita Padilla on a petition for relief
filed by the latter, grounded on "fraud, mistake and/or excusable negligence" which had
seriously impaired her right to present her case adequately.12 "After the petition for
relief from judgment was given due course," according to petitioner, "a new judge
presided over the case."13
Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own answer
to the complaint, and a motion for summary judgment on May 17, 1983. Although there
was initial opposition by Thomas Cheesman to the motion, the parties ultimately agreed
on the rendition by the court of a summary judgment after entering into a stipulation of
facts, at the hearing of the motion on June 21, 1983, the stipulation being of the following
tenor:14
(1) that the property in question was bought during the existence of the
marriage between the plaintiff and the defendant Criselda P. Cheesman;
(2) that the property bought during the marriage was registered in the name of
Criselda Cheesman and that the Deed of Sale and Transfer of Possessory Rights
executed by the former owner-vendor Armando Altares in favor of Criselda
Cheesman made no mention of the plaintiff;
(3) that the property, subject of the proceedings, was sold by defendant
Criselda Cheesman in favor of the other defendant Estelita M. Padilla, without
the written consent of the plaintiff.
Obviously upon the theory that no genuine issue existed any longer and there was hence
no need of a trial, the parties having in fact submitted, as also stipulated, their respective
memoranda each praying for a favorable verdict, the Trial Court15 rendered a "Summary
Judgment" dated August 3, 1982 declaring "the sale executed by . . . Criselda Cheesman in
favor of . . . Estelita Padilla to be valid," dismissing Thomas Cheesman's complaint and
ordering him "to immediately turn over the possession of the house and lot subject of . . .
(the) case to . . . Estelita Padilla . . ."16
The Trial Court found that —
1) the evidence on record satisfactorily overcame the disputable presumption
in Article 160 of the Civil Code—that all property of the marriage belongs to the
conjugal partnership "unless it be proved that it pertains exclusively to the
husband or to the wife"—and that the immovable in question was in truth
Criselda's paraphernal property;
2) that moreover, said legal presumption in Article 160 could not apply
"inasmuch as the husband-plaintiff is an American citizen and therefore
disqualified under the Constitution to acquire and own real properties; and
3) that the exercise by Criselda of exclusive acts of dominion with the
knowledge of her husband "had led . . . Estelita Padilla to believe that the
properties were the exclusive properties of Criselda Cheesman and on the faith
of such a belief she bought the properties from her and for value," and
therefore, Thomas Cheesman was, under Article 1473 of the Civil Code,
estopped to impugn the transfer to Estelita Padilla.
Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed the
Trial Court acts (1) of granting Estelita Padilla's petition for relief, and its resolution of
matters not subject of said petition; (2) of declaring valid the sale to Estelita Padilla
despite the lack of consent thereto by him, and the presumption of the conjugal character
of the property in question pursuant to Article 160 of the Civil Code; (3) of disregarding
the judgment of June 24, 1982 which, not having been set aside as against Criselda
Cheesman, continued to be binding on her; and (4) of making findings of fact not
supported by evidence. All of these contentions were found to be without merit by the
Appellate Tribunal which, on January 7, 1986, promulgated a decision (erroneously
denominated, "Report")17affirming the "Summary Judgment complained of," "having
found no reversible error" therein.
Once more, Thomas Cheesman availed of the remedy of appeal, this time to this Court.
Here, he argues that it was reversible error for the Intermediate Appellate Court —
1) to find that the presumption that the property in question is conjugal in accordance
with Article 160 had been satisfactorily overcome by Estelita Padilla;18
2) to rule that Estelita Padilla was a purchaser of said property in good faith, it
appearing:
a) that the deed by which the property was conveyed to Criselda
Cheesman described her as "married to Thomas C. Cheesman," as well
as the deed by which the property was later conveyed to Estelita
Padilla by Criselda Cheesman also described her as "married to an
American citizen," and both said descriptions had thus "placed
Estelita on knowledge of the conjugal nature of the property;" and
b) that furthermore, Estelita had admitted to stating in the deed by
which she acquired the property a price much lower than that actually
paid "in order to avoid payment of more obligation to the
government;"19
3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's
petition for relief on the ground of "fraud, mistake and/or excusable negligence;" 20
4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for relief
by failing to appeal from the order granting the same;
5) to accord to Estelita Padilla a relief other than that she had specifically prayed for in
her petition for relief, ie., "the restoration of the purchase price which Estelita allegedly
paid to Criselda;"21 and
6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to
recover the lot and house for the conjugal partnership.22
Such conclusions as that (1) fraud, mistake or excusable negligence existed in the
premises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2)
that Criselda Cheesman had used money she had brought into her marriage to Thomas
Cheesman to purchase the lot and house in question, or (3) that Estelita Padilla believed
in good faith that Criselda Cheesman was the exclusive owner of the property that she
(Estelita) intended to and did in fact buy—derived from the evidence adduced by the
parties, the facts set out in the pleadings or otherwise appearing on record—are
conclusions or findings of fact. As distinguished from a question of law—which exists
"when the doubt or difference arises as to what the law is on a certain state of facts" —
"there is a question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts;"23 or when the "query necessarily invites calibration of the
whole evidence considering mainly the credibility of witnesses, existence and relevancy
of specific surrounding circumstances, their relation; to each other and to the whole and
the probabilities of the situation."24
Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a
petition for the review oncertiorari of a decision of the Court of Appeals presented to this
Court.25 As everyone knows or ought to know, the appellate jurisdiction of this Court is
limited to reviewing errors of law, accepting as conclusive the factual findings of the
lower court upon its own assessment of the evidence.26 The creation of the Court of
Appeals was precisely intended to take away from the Supreme Court the work of
examining the evidence, and confine its task to the determination of questions which do
not call for the reading and study of transcripts containing the testimony of
witnesses.27 The rule of conclusiveness of the factual findings or conclusions of the Court
of Appeals is, to be sure, subject to certain exceptions,28 none of which however obtains
in the case at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached
the same conclusions on the three (3) factual matters above set forth, after assessment of
the evidence and determination of the probative value thereof. Both Courts found that
the facts on record adequately proved fraud, mistake or excusable negligence by which
Estelita Padilla's rights had been substantially impaired; that the funds used by Criselda
Cheesman was money she had earned and saved prior to her marriage to Thomas
Cheesman, and that Estelita Padilla did believe in good faith that Criselda Cheesman was
the sole owner of the property in question. Consequently, these determinations of fact
will not be here disturbed, this Court having been cited to no reason for doing so.
These considerations dispose of the first three (3) points that petitioner Cheesman seeks
to make in his appeal.1âwphi1They also make unnecessary an extended discussion of the
other issues raised by him. As to them, it should suffice to restate certain fundamental
propositions.
An order of a Court of First Instance (now Regional Trial Court) granting a petition for
relief under Rule 38 is interlocutory and is not appealable. Hence, the failure of the party
who opposed the petition to appeal from said order, or his participation in the
proceedings subsequently had, cannot be construed as a waiver of his objection to the
petition for relief so as to preclude his raising the same question on appeal from the
judgment on the merits of the main case. Such a party need not repeat his objections to
the petition for relief, or perform any act thereafter (e.g., take formal exception) in order
to preserve his right to question the same eventually, on appeal, it being sufficient for
this purpose that he has made of record "the action which he desires the court to take or
his objection to the action of the court and his grounds therefor."29
As already observed, the finding that his wife had used her own money to purchase the
property cannot, and will not, at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had used conjugal funds to make the
acquisition, the considerations just set out militate, on high constitutional grounds,
against his recovering and holding the property so acquired or any part thereof. And
whether in such an event, he may recover from his wife any share of the money used for
the purchase or charge her with unauthorized disposition or expenditure of conjugal
funds is not now inquired into; that would be, in the premises, a purely academic
exercise. An equally decisive consideration is that Estelita Padilla is a purchaser in good
faith, both the Trial Court and the Appellate Court having found that Cheesman's own
conduct had led her to believe the property to be exclusive property of the latter's wife,
freely disposable by her without his consent or intervention. An innocent buyer for
value, she is entitled to the protection of the law in her purchase, particularly as against
Cheesman, who would assert rights to the property denied him by both letter and spirit
of the Constitution itself.
WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.
SO ORDERED.

Again, the prayer in a petition for relief from judgment under Rule 38 is not necessarily
the same prayer in the petitioner's complaint, answer or other basic pleading. This
should be obvious. Equally obvious is that once a petition for relief is granted and the
judgment subject thereof set aside, and further proceedings are thereafter had, the Court
in its judgment on the merits may properly grant the relief sought in the petitioner's
basic pleadings, although different from that stated in his petition for relief.

Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14,
Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession,
no private land shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain."30Petitioner Thomas
Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming
that it was his intention that the lot in question be purchased by him and his wife, he
acquired no right whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and clandestinely, he
knowingly violated the Constitution; the sale as to him was null and void.31 In any event,
he had and has no capacity or personality to question the subsequent sale of the same
property by his wife on the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To sustain such a theory would
permit indirect controversion of the constitutional prohibition. If the property were to be
declared conjugal, this would accord to the alien husband a not insubstantial interest and
right over land, as he would then have a decisive vote as to its transfer or disposition.
This is a right that the Constitution does not permit him to have.
G.R. No. 149615 August 29, 2006
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA
MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the February 26, 2001 Decision 2 of the
Court of Appeals in CA-G.R. CV No. 59321 affirming with modification the August 12,
1996 Decision 3 of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-
94-21862, which terminated the regime of absolute community of property between
petitioner and respondent, as well as the Resolution 4 dated August 13, 2001 denying the
motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in
Hamburg, Germany on September 22, 1989. The couple resided in Germany at a house
owned by respondent’s parents but decided to move and reside permanently in the
Philippines in 1992. By this time, respondent had inherited the house in Germany from
his parents which he sold and used the proceeds for the purchase of a parcel of land in
Antipolo, Rizal at the cost of P528,000.00 and the construction of a house amounting to
P2,300,000.00. The Antipolo property was registered in the name of petitioner under
Transfer Certificate of Title No. 219438 5 of the Register of Deeds of Marikina, Metro
Manila.
Due to incompatibilities and respondent’s alleged womanizing, drinking, and
maltreatment, the spouses eventually separated. On September 26, 1994, respondent
filed a petition 6 for separation of properties before the Regional Trial Court of Quezon
City.
On August 12, 1996, the trial court rendered a decision which terminated the regime of
absolute community of property between the petitioner and respondent. It also decreed
the separation of properties between them and ordered the equal partition of personal
properties located within the country, excluding those acquired by gratuitous title during
the marriage. With regard to the Antipolo property, the court held that it was acquired
using paraphernal funds of the respondent. However, it ruled that respondent cannot
recover his funds because the property was purchased in violation of Section 7, Article
XII of the Constitution. Thus –
However, pursuant to Article 92 of the Family Code, properties acquired by gratuitous
title by either spouse during the marriage shall be excluded from the community
property. The real property, therefore, inherited by petitioner in Germany is excluded
from the absolute community of property of the herein spouses. Necessarily, the
proceeds of the sale of said real property as well as the personal properties purchased
thereby, belong exclusively to the petitioner. However, the part of that inheritance used
by the petitioner for acquiring the house and lot in this country cannot be recovered by
the petitioner, its acquisition being a violation of Section 7, Article XII of the Constitution
which provides that "save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations or associations qualified to
acquire or hold lands of the public domain." The law will leave the parties in the situation
where they are in without prejudice to a voluntary partition by the parties of the said
real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No. 219438 of the
Registry of Deeds of Marikina, Metro Manila, situated in Antipolo, Rizal and the
improvements thereon, the Court shall not make any pronouncement on constitutional
grounds. 7
Respondent appealed to the Court of Appeals which rendered the assailed decision
modifying the trial court’s Decision. It held that respondent merely prayed for
reimbursement for the purchase of the Antipolo property, and not acquisition or transfer
of ownership to him. It also considered petitioner’s ownership over the property in trust
for the respondent. As regards the house, the Court of Appeals ruled that there is nothing
in the Constitution which prohibits respondent from acquiring the same. The dispositive
portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court dated August 12,
1996 is hereby MODIFIED. Respondent Elena Buenaventura Muller is hereby ordered to
REIMBURSE the petitioner the amount of P528,000.00 for the acquisition of the land and
the amount of P2,300,000.00 for the construction of the house situated in Atnipolo, Rizal,
deducting therefrom the amount respondent spent for the preservation, maintenance
and development of the aforesaid real property including the depreciation cost of the
house or in the alternative to SELL the house and lot in the event respondent does not
have the means to reimburse the petitioner out of her own money and from the proceeds
thereof, reimburse the petitioner of the cost of the land and the house deducting the
expenses for its maintenance and preservation spent by the respondent. Should there be
profit, the same shall be divided in proportion to the equity each has over the property.
The case is REMANDED to the lower court for reception of evidence as to the amount
claimed by the respondents for the preservation and maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE
RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT OF THE AMOUNT USED TO
PURCHASE THE LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF THE
HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN ACT DONE WHICH
OTHERWISE COULD NOT BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO
THE CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM
ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING RESPONDENT’S CAUSE OF
ACTION WHICH IS ACTUALLY A DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER
THE LOT IN QUESTION, CLOTHED UNDER THE GUISE OF CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to own private lands
in the Philippines; that respondent was aware of the constitutional prohibition but
circumvented the same; and that respondent’s purpose for filing an action for separation
of property is to obtain exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of ownership of the Antipolo
property but merely reimbursement; that the funds paid by him for the said property
were in consideration of his marriage to petitioner; that the funds were given to
petitioner in trust; and that equity demands that respondent should be reimbursed of his
personal funds.
The issue for resolution is whether respondent is entitled to reimbursement of the funds
used for the acquisition of the Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain.
Aliens, whether individuals or corporations, are disqualified from acquiring lands of the
public domain. Hence, they are also disqualified from acquiring private lands. 9 The
primary purpose of the constitutional provision is the conservation of the national
patrimony. In the case of Krivenko v. Register of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources, with the exception
of public agricultural land, shall not be alienated," and with respect to public agricultural
lands, their alienation is limited to Filipino citizens. But this constitutional purpose
conserving agricultural resources in the hands of Filipino citizens may easily be defeated
by the Filipino citizens themselves who may alienate their agricultural lands in favor of
aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it
reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural land will be
transferred or assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the Philippines."
This constitutional provision closes the only remaining avenue through which
agricultural resources may leak into aliens’ hands. It would certainly be futile to prohibit
the alienation of public agricultural lands to aliens if, after all, they may be freely so
alienated upon their becoming private agricultural lands in the hands of Filipino citizens.
xxx
xxxx
If the term "private agricultural lands" is to be construed as not including residential lots
or lands not strictly agricultural, the result would be that "aliens may freely acquire and
possess not only residential lots and houses for themselves but entire subdivisions, and
whole towns and cities," and that "they may validly buy and hold in their names lands of
any area for building homes, factories, industrial plants, fisheries, hatcheries, schools,
health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of
other uses and purposes that are not, in appellant’s words, strictly agricultural."
(Solicitor General’s Brief, p. 6.) That this is obnoxious to the conservative spirit of the
Constitution is beyond question.
Respondent was aware of the constitutional prohibition and expressly admitted his
knowledge thereof to this Court.11 He declared that he had the Antipolo property titled in
the name of petitioner because of the said prohibition. 12His attempt at subsequently
asserting or claiming a right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied trust was created and resulted by
operation of law in view of petitioner’s marriage to respondent. Save for the exception
provided in cases of hereditary succession, respondent’s disqualification from owning
lands in the Philippines is absolute. Not even an ownership in trust is allowed. Besides,
where the purchase is made in violation of an existing statute and in evasion of its
express provision, no trust can result in favor of the party who is guilty of the fraud. 13 To
hold otherwise would allow circumvention of the constitutional prohibition.
Invoking the principle that a court is not only a court of law but also a court of equity, is
likewise misplaced. It has been held that equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public policy, cannot be done
directly. 14 He who seeks equity must do equity, and he who comes into equity must
come with clean hands. The latter is a frequently stated maxim which is also expressed in
the principle that he who has done inequity shall not have equity. It signifies that a
litigant may be denied relief by a court of equity on the ground that his conduct has been
inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in
issue. 15
Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity
where it is clear that he willingly and knowingly bought the property despite the
constitutional prohibition.
Further, the distinction made between transfer of ownership as opposed to recovery of
funds is a futile exercise on respondent’s part. To allow reimbursement would in effect
permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus,
it is likewise proscribed by law. As expressly held in Cheesman v. Intermediate Appellate
Court: 16

Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14,
Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession,
no private land shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain." Petitioner Thomas
Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming
that it was his intention that the lot in question be purchased by him and his wife, he
acquired no right whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and clandestinely, he
knowingly violated the Constitution; the sale as to him was null and void. In any event, he
had and has no capacity or personality to question the subsequent sale of the same
property by his wife on the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To sustain such a theory would
permit indirect controversion of the constitutional prohibition. If the property were to be
declared conjugal, this would accord to the alien husband a not insubstantial interest and
right over land, as he would then have a decisive vote as to its transfer or disposition.
This is a right that the Constitution does not permit him to have.

As already observed, the finding that his wife had used her own money to purchase the
property cannot, and will not, at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had used conjugal funds to make the
acquisition, the considerations just set out to militate, on high constitutional grounds,
against his recovering and holding the property so acquired, or any part thereof. And
whether in such an event, he may recover from his wife any share of the money used for
the purchase or charge her with unauthorized disposition or expenditure of conjugal
funds is not now inquired into; that would be, in the premises, a purely academic
exercise. (Emphasis added)

WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The Decision
dated February 26, 2001 of the Court of Appeals in CA-G.R. CV No. 59321 ordering
petitioner Elena Buenaventura Muller to reimburse respondent Helmut Muller the
amount of P528,000 for the acquisition of the land and the amount of P2,300,000 for the
construction of the house in Antipolo City, and the Resolution dated August 13, 2001
denying reconsideration thereof, are REVERSED and SET ASIDE. The August 12, 1996
Decision of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-
21862 terminating the regime of absolute community between the petitioner and
respondent, decreeing a separation of property between them and ordering the partition
of the personal properties located in the Philippines equally, is REINSTATED.

SO ORDERED.
G.R. No. L-17587 September 12, 1967
PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS
Y CANON FAUSTINO, deceased, plaintiff-appellant,
vs.
LUI SHE in her own behalf and as administratrix of the intestate estate of Wong
Heng, deceased, defendant-appellant.
Nicanor S. Sison for plaintiff-appellant.
Ozaeta, Gibbs & Ozaeta for defendant-appellant.
CASTRO, J.:
Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a
piece of land in Manila. This parcel, with an area of 2,582.30 square meters, is located on
Rizal Avenue and opens into Florentino Torres street at the back and Katubusan street
on one side. In it are two residential houses with entrance on Florentino Torres street
and the Hen Wah Restaurant with entrance on Rizal Avenue. The sisters lived in one of
the houses, while Wong Heng, a Chinese, lived with his family in the restaurant. Wong
had been a long-time lessee of a portion of the property, paying a monthly rental of
P2,620.
On September 22, 1957 Justina Santos became the owner of the entire property as her
sister died with no other heir. Then already well advanced in years, being at the time 90
years old, blind, crippled and an invalid, she was left with no other relative to live with.
Her only companions in the house were her 17 dogs and 8 maids. Her otherwise dreary
existence was brightened now and then by the visits of Wong's four children who had
become the joy of her life. Wong himself was the trusted man to whom she delivered
various amounts for safekeeping, including rentals from her property at the corner of
Ongpin and Salazar streets and the rentals which Wong himself paid as lessee of a part of
the Rizal Avenue property. Wong also took care of the payment; in her behalf, of taxes,
lawyers' fees, funeral expenses, masses, salaries of maids and security guard, and her
household expenses.
"In grateful acknowledgment of the personal services of the lessee to her," Justina Santos
executed on November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong,
covering the portion then already leased to him and another portion fronting Florentino
Torres street. The lease was for 50 years, although the lessee was given the right to
withdraw at any time from the agreement; the monthly rental was P3,120. The contract
covered an area of 1,124 square meters. Ten days later (November 25), the contract was
amended (Plff Exh. 4) so as to make it cover the entire property, including the portion on
which the house of Justina Santos stood, at an additional monthly rental of P360. For his
part Wong undertook to pay, out of the rental due from him, an amount not exceeding
P1,000 a month for the food of her dogs and the salaries of her maids.
On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to
buy the leased premises for P120,000, payable within ten years at a monthly installment
of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for the
food of the dogs and the salaries of the maids in her household, the charge not to exceed
P1,800 a month. The option was conditioned on his obtaining Philippine citizenship, a
petition for which was then pending in the Court of First Instance of Rizal. It appears,
however, that this application for naturalization was withdrawn when it was discovered
that he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him
and his children on the erroneous belief that adoption would confer on them Philippine
citizenship. The error was discovered and the proceedings were abandoned.
On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the
term of the lease to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50
years. Both contracts are written in Tagalog.
In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her
legatees to respect the contracts she had entered into with Wong, but in a codicil (Plff
Exh. 17) of a later date (November 4, 1959) she appears to have a change of heart.
Claiming that the various contracts were made by her because of machinations and
inducements practiced by him, she now directed her executor to secure the annulment of
the contracts.
On November 18 the present action was filed in the Court of First Instance of Manila. The
complaint alleged that the contracts were obtained by Wong "through fraud,
misrepresentation, inequitable conduct, undue influence and abuse of confidence and
trust of and (by) taking advantage of the helplessness of the plaintiff and were made to
circumvent the constitutional provision prohibiting aliens from acquiring lands in the
Philippines and also of the Philippine Naturalization Laws." The court was asked to
direct the Register of Deeds of Manila to cancel the registration of the contracts and to
order Wong to pay Justina Santos the additional rent of P3,120 a month from November
15, 1957 on the allegation that the reasonable rental of the leased premises was P6,240 a
month.
In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which
he volunteered the information that, in addition to the sum of P3,000 which he said she
had delivered to him for safekeeping, another sum of P22,000 had been deposited in a
joint account which he had with one of her maids. But he denied having taken advantage
of her trust in order to secure the execution of the contracts in question. As counterclaim
he sought the recovery of P9,210.49 which he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an
amended complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the
collection of various amounts allegedly delivered on different occasions was sought.
These amounts and the dates of their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42
(Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in his answer).
An accounting of the rentals from the Ongpin and Rizal Avenue properties was also
demanded.
In the meantime as a result of a petition for guardianship filed in the Juvenile and
Domestic Relations Court, the Security Bank & Trust Co. was appointed guardian of the
properties of Justina Santos, while Ephraim G. Gochangco was appointed guardian of her
person.
In his answer, Wong insisted that the various contracts were freely and voluntarily
entered into by the parties. He likewise disclaimed knowledge of the sum of P33,724.27,
admitted receipt of P7,344.42 and P10,000, but contended that these amounts had been
spent in accordance with the instructions of Justina Santos; he expressed readiness to
comply with any order that the court might make with respect to the sums of P22,000 in
the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as follows:
[A]ll the documents mentioned in the first cause of action, with the exception of
the first which is the lease contract of 15 November 1957, are declared null and
void; Wong Heng is condemned to pay unto plaintiff thru guardian of her
property the sum of P55,554.25 with legal interest from the date of the filing of
the amended complaint; he is also ordered to pay the sum of P3,120.00 for
every month of his occupation as lessee under the document of lease herein
sustained, from 15 November 1959, and the moneys he has consigned since
then shall be imputed to that; costs against Wong Heng.
From this judgment both parties appealed directly to this Court. After the case was
submitted for decision, both parties died, Wong Heng on October 21, 1962 and Justina
Santos on December 28, 1964. Wong was substituted by his wife, Lui She, the other
defendant in this case, while Justina Santos was substituted by the Philippine Banking
Corporation.
Justina Santos maintained — now reiterated by the Philippine Banking Corporation —
that the lease contract (Plff Exh. 3) should have been annulled along with the four other
contracts (Plff Exhs. 4-7) because it lacks mutuality; because it included a portion which,
at the time, was in custodia legis; because the contract was obtained in violation of the
fiduciary relations of the parties; because her consent was obtained through undue
influence, fraud and misrepresentation; and because the lease contract, like the rest of
the contracts, is absolutely simulated.
Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from
this agreement." It is claimed that this stipulation offends article 1308 of the Civil Code
which provides that "the contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them."
We have had occasion to delineate the scope and application of article 1308 in the early
case of Taylor v. Uy Tieng Piao.1 We said in that case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no
impediment to the insertion in a contract for personal service of a resolutory
condition permitting the cancellation of the contract by one of the parties. Such
a stipulation, as can be readily seen, does not make either the validity or the
fulfillment of the contract dependent upon the will of the party to whom is
conceded the privilege of cancellation; for where the contracting parties have
agreed that such option shall exist, the exercise of the option is as much in the
fulfillment of the contract as any other act which may have been the subject of
agreement. Indeed, the cancellation of a contract in accordance with conditions
agreed upon beforehand is fulfillment.2
And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that
the lessee, at any time before he erected any building on the land, might rescind the
lease, can hardly be regarded as a violation of article 1256 [now art. 1308] of the Civil
Code."
The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of
want of mutuality, because of a difference in factual setting. In that case, the lessees
argued that they could occupy the premises as long as they paid the rent. This is of
course untenable, for as this Court said, "If this defense were to be allowed, so long as
defendants elected to continue the lease by continuing the payment of the rentals, the
owner would never be able to discontinue it; conversely, although the owner should
desire the lease to continue the lessees could effectively thwart his purpose if they
should prefer to terminate the contract by the simple expedient of stopping payment of
the rentals." Here, in contrast, the right of the lessee to continue the lease or to terminate
it is so circumscribed by the term of the contract that it cannot be said that the
continuance of the lease depends upon his will. At any rate, even if no term had been
fixed in the agreement, this case would at most justify the fixing of a period 5 but not the
annulment of the contract.
Nor is there merit in the claim that as the portion of the property formerly owned by the
sister of Justina Santos was still in the process of settlement in the probate court at the
time it was leased, the lease is invalid as to such portion. Justina Santos became the
owner of the entire property upon the death of her sister Lorenzo on September 22,
1957 by force of article 777 of the Civil Code. Hence, when she leased the property on
November 15, she did so already as owner thereof. As this Court explained in upholding
the sale made by an heir of a property under judicial administration:
That the land could not ordinarily be levied upon while in custodia legis does
not mean that one of the heirs may not sell the right, interest or participation
which he has or might have in the lands under administration. The ordinary
execution of property in custodia legis is prohibited in order to avoid
interference with the possession by the court. But the sale made by an heir of
his share in an inheritance, subject to the result of the pending administration,
in no wise stands in the way of such administration.6
It is next contended that the lease contract was obtained by Wong in violation of his
fiduciary relationship with Justina Santos, contrary to article 1646, in relation to article
1941 of the Civil Code, which disqualifies "agents (from leasing) the property whose
administration or sale may have been entrusted to them." But Wong was never an agent
of Justina Santos. The relationship of the parties, although admittedly close and
confidential, did not amount to an agency so as to bring the case within the prohibition of
the law.
Just the same, it is argued that Wong so completely dominated her life and affairs that
the contracts express not her will but only his. Counsel for Justina Santos cites the
testimony of Atty. Tomas S. Yumol who said that he prepared the lease contract on the
basis of data given to him by Wong and that she told him that "whatever Mr. Wong wants
must be followed."7
The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding
that Wong practically dictated the terms of the contract. What this witness said was:
Q Did you explain carefully to your client, Doña Justina, the contents of this
document before she signed it?
A I explained to her each and every one of these conditions and I also told her
these conditions were quite onerous for her, I don't really know if I have
expressed my opinion, but I told her that we would rather not execute any
contract anymore, but to hold it as it was before, on a verbal month to month
contract of lease.
Q But, she did not follow your advice, and she went with the contract just the
same?
A She agreed first . . .
Q Agreed what?
A Agreed with my objectives that it is really onerous and that I was really right,
but after that, I was called again by her and she told me to follow the wishes of
Mr. Wong Heng.
xxx xxx xxx
Q So, as far as consent is concerned, you were satisfied that this document was
perfectly proper?
xxx xxx xxx
A Your Honor, if I have to express my personal opinion, I would say she is not,
because, as I said before, she told me — "Whatever Mr. Wong wants must be
followed."8
Wong might indeed have supplied the data which Atty. Yumol embodied in the lease
contract, but to say this is not to detract from the binding force of the contract. For the
contract was fully explained to Justina Santos by her own lawyer. One incident, related
by the same witness, makes clear that she voluntarily consented to the lease contract.
This witness said that the original term fixed for the lease was 99 years but that as he
doubted the validity of a lease to an alien for that length of time, he tried to persuade her
to enter instead into a lease on a month-to-month basis. She was, however, firm and
unyielding. Instead of heeding the advice of the lawyer, she ordered him, "Just follow Mr.
Wong Heng."9 Recounting the incident, Atty. Yumol declared on cross examination:
Considering her age, ninety (90) years old at the time and her condition, she is a
wealthy woman, it is just natural when she said "This is what I want and this will
be done." In particular reference to this contract of lease, when I said "This is
not proper," she said — "You just go ahead, you prepare that, I am the owner,
and if there is any illegality, I am the only one that can question the illegality."10
Atty. Yumol further testified that she signed the lease contract in the presence of her
close friend, Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by
her side.11 Any of them could have testified on the undue influence that Wong
supposedly wielded over Justina Santos, but neither of them was presented as a witness.
The truth is that even after giving his client time to think the matter over, the lawyer
could not make her change her mind. This persuaded the lower court to uphold the
validity of the lease contract against the claim that it was procured through undue
influence.
Indeed, the charge of undue influence in this case rests on a mere inference 12 drawn
from the fact that Justina Santos could not read (as she was blind) and did not
understand the English language in which the contract is written, but that inference has
been overcome by her own evidence.
Nor is there merit in the claim that her consent to the lease contract, as well as to the rest
of the contracts in question, was given out of a mistaken sense of gratitude to Wong who,
she was made to believe, had saved her and her sister from a fire that destroyed their
house during the liberation of Manila. For while a witness claimed that the sisters were
saved by other persons (the brothers Edilberto and Mariano Sta. Ana)13 it was Justina
Santos herself who, according to her own witness, Benjamin C. Alonzo, said "very
emphatically" that she and her sister would have perished in the fire had it not been for
Wong.14 Hence the recital in the deed of conditional option (Plff Exh. 7) that "[I]tong si
Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa halos ay tiyak na
kamatayan", and the equally emphatic avowal of gratitude in the lease contract (Plff Exh.
3).
As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff
Exhs. 4-7) — the consent of Justina Santos was given freely and voluntarily. As Atty.
Alonzo, testifying for her, said:
[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or
both. When we had conferences, they used to tell me what the documents
should contain. But, as I said, I would always ask the old woman about them
and invariably the old woman used to tell me: "That's okay. It's all right."15
But the lower court set aside all the contracts, with the exception of the lease contract of
November 15, 1957, on the ground that they are contrary to the expressed wish of
Justina Santos and that their considerations are fictitious. Wong stated in his deposition
that he did not pay P360 a month for the additional premises leased to him, because she
did not want him to, but the trial court did not believe him. Neither did it believe his
statement that he paid P1,000 as consideration for each of the contracts (namely, the
option to buy the leased premises, the extension of the lease to 99 years, and the fixing of
the term of the option at 50 years), but that the amount was returned to him by her for
safekeeping. Instead, the court relied on the testimony of Atty. Alonzo in reaching the
conclusion that the contracts are void for want of consideration.
Atty. Alonzo declared that he saw no money paid at the time of the execution of the
documents, but his negative testimony does not rule out the possibility that the
considerations were paid at some other time as the contracts in fact recite. What is more,
the consideration need not pass from one party to the other at the time a contract is
executed because the promise of one is the consideration for the other.16
With respect to the lower court's finding that in all probability Justina Santos could not
have intended to part with her property while she was alive nor even to lease it in its
entirety as her house was built on it, suffice it to quote the testimony of her own witness
and lawyer who prepared the contracts (Plff Exhs. 4-7) in question, Atty. Alonzo:
The ambition of the old woman, before her death, according to her revelation to
me, was to see to it that these properties be enjoyed, even to own them, by
Wong Heng because Doña Justina told me that she did not have any relatives,
near or far, and she considered Wong Heng as a son and his children her
grandchildren; especially her consolation in life was when she would hear the
children reciting prayers in Tagalog.17
She was very emphatic in the care of the seventeen (17) dogs and of the maids
who helped her much, and she told me to see to it that no one could disturb
Wong Heng from those properties. That is why we thought of the ninety-nine
(99) years lease; we thought of adoption, believing that thru adoption Wong
Heng might acquire Filipino citizenship; being the adopted child of a Filipino
citizen.18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony
just quoted, while dispelling doubt as to the intention of Justina Santos, at the same time
gives the clue to what we view as a scheme to circumvent the Constitutional prohibition
against the transfer of lands to aliens. "The illicit purpose then becomes the
illegal causa"19 rendering the contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but considered
collectively, they reveal an insidious pattern to subvert by indirection what the
Constitution directly prohibits. To be sure, a lease to an alien for a reasonable period is
valid. So is an option giving an alien the right to buy real property on condition that he is
granted Philippine citizenship. As this Court said in Krivenko v. Register of Deeds:20
[A]liens are not completely excluded by the Constitution from the use of lands
for residential purposes. Since their residence in the Philippines is temporary,
they may be granted temporary rights such as a lease contract which is not
forbidden by the Constitution. Should they desire to remain here forever and
share our fortunes and misfortunes, Filipino citizenship is not impossible to
acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by
virtue of which the Filipino owner cannot sell or otherwise dispose of his property,21 this
to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of
ownership whereby the owner divests himself in stages not only of the right to enjoy the
land ( jus possidendi, jus utendi, jus fruendi and jus abutendi) but also of the right to
dispose of it ( jus disponendi) — rights the sum total of which make up ownership. It is
just as if today the possession is transferred, tomorrow, the use, the next day, the
disposition, and so on, until ultimately all the rights of which ownership is made up are
consolidated in an alien. And yet this is just exactly what the parties in this case did
within the space of one year, with the result that Justina Santos' ownership of her
property was reduced to a hollow concept. If this can be done, then the Constitutional
ban against alien landholding in the Philippines, as announced in Krivenko v. Register of
Deeds,22 is indeed in grave peril.
It does not follow from what has been said, however, that because the parties are in pari
delicto they will be left where they are, without relief. For one thing, the original parties
who were guilty of a violation of the fundamental charter have died and have since been
substituted by their administrators to whom it would be unjust to impute their
guilt.23 For another thing, and this is not only cogent but also important, article 1416 of
the Civil Code provides, as an exception to the rule on pari delicto, that "When the
agreement is not illegal per se but is merely prohibited, and the prohibition by law is
designed for the protection of the plaintiff, he may, if public policy is thereby enhanced,
recover what he has paid or delivered." The Constitutional provision that "Save in cases
of hereditary succession, no private agricultural land shall be transferred or assigned
except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain in the Philippines"24 is an expression of public policy to conserve lands
for the Filipinos. As this Court said in Krivenko:
It is well to note at this juncture that in the present case we have no choice. We
are construing the Constitution as it is and not as we may desire it to be.
Perhaps the effect of our construction is to preclude aliens admitted freely into
the Philippines from owning sites where they may build their homes. But if this
is the solemn mandate of the Constitution, we will not attempt to compromise it
even in the name of amity or equity . . . .
For all the foregoing, we hold that under the Constitution aliens may not
acquire private or public agricultural lands, including residential lands, and,
accordingly, judgment is affirmed, without costs.25
That policy would be defeated and its continued violation sanctioned if, instead of setting
the contracts aside and ordering the restoration of the land to the estate of the deceased
Justina Santos, this Court should apply the general rule of pari delicto. To the extent that
our ruling in this case conflicts with that laid down in Rellosa v. Gaw Chee Hun 26 and
subsequent similar cases, the latter must be considered as pro tanto qualified.
The claim for increased rentals and attorney's fees, made in behalf of Justina Santos,
must be denied for lack of merit.
And what of the various amounts which Wong received in trust from her? It appears that
he kept two classes of accounts, one pertaining to amount which she entrusted to him
from time to time, and another pertaining to rentals from the Ongpin property and from
the Rizal Avenue property, which he himself was leasing.
With respect to the first account, the evidence shows that he received P33,724.27 on
November 8, 1957 (Plff Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000
on December 6, 1957 (Plff Exh. 14) ; and P18,928.50 on August 26, 1959 (Def. Exh. 246),
or a total of P70,007.19. He claims, however, that he settled his accounts and that the last
amount of P18,928.50 was in fact payment to him of what in the liquidation was found to
be due to him.
He made disbursements from this account to discharge Justina Santos' obligations for
taxes, attorneys' fees, funeral services and security guard services, but the checks (Def
Exhs. 247-278) drawn by him for this purpose amount to only P38,442.84.27 Besides, if
he had really settled his accounts with her on August 26, 1959, we cannot understand
why he still had P22,000 in the bank and P3,000 in his possession, or a total of P25,000.
In his answer, he offered to pay this amount if the court so directed him. On these two
grounds, therefore, his claim of liquidation and settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a
difference of P31,564 which, added to the amount of P25,000, leaves a balance of
P56,564.3528 in favor of Justina Santos.
As to the second account, the evidence shows that the monthly income from the Ongpin
property until its sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal
Avenue property, of which Wong was the lessee, was P3,120. Against this account the
household expenses and disbursements for the care of the 17 dogs and the salaries of the
8 maids of Justina Santos were charged. This account is contained in a notebook (Def.
Exh. 6) which shows a balance of P9,210.49 in favor of Wong. But it is claimed that the
rental from both the Ongpin and Rizal Avenue properties was more than enough to pay
for her monthly expenses and that, as a matter of fact, there should be a balance in her
favor. The lower court did not allow either party to recover against the other. Said the
court:
[T]he documents bear the earmarks of genuineness; the trouble is that they
were made only by Francisco Wong and Antonia Matias, nick-named Toning, —
which was the way she signed the loose sheets, and there is no clear proof that
Doña Justina had authorized these two to act for her in such liquidation; on the
contrary if the result of that was a deficit as alleged and sought to be there
shown, of P9,210.49, that was not what Doña Justina apparently understood for
as the Court understands her statement to the Honorable Judge of the Juvenile
Court . . . the reason why she preferred to stay in her home was because there
she did not incur in any debts . . . this being the case, . . . the Court will not
adjudicate in favor of Wong Heng on his counterclaim; on the other hand, while
it is claimed that the expenses were much less than the rentals and there in fact
should be a superavit, . . . this Court must concede that daily expenses are not
easy to compute, for this reason, the Court faced with the choice of the two
alternatives will choose the middle course which after all is permitted by the
rules of proof, Sec. 69, Rule 123 for in the ordinary course of things, a person
will live within his income so that the conclusion of the Court will be that there
is neither deficit nor superavit and will let the matter rest here.
Both parties on appeal reiterate their respective claims but we agree with the lower
court that both claims should be denied. Aside from the reasons given by the court, we
think that the claim of Justina Santos totalling P37,235, as rentals due to her after
deducting various expenses, should be rejected as the evidence is none too clear about
the amounts spent by Wong for food29 masses30 and salaries of her maids.31 His claim for
P9,210.49 must likewise be rejected as his averment of liquidation is belied by his own
admission that even as late as 1960 he still had P22,000 in the bank and P3,000 in his
possession.
ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled and set aside; the
land subject-matter of the contracts is ordered returned to the estate of Justina Santos as
represented by the Philippine Banking Corporation; Wong Heng (as substituted by the
defendant-appellant Lui She) is ordered to pay the Philippine Banking Corporation the
sum of P56,564.35, with legal interest from the date of the filing of the amended
complaint; and the amounts consigned in court by Wong Heng shall be applied to the
payment of rental from November 15, 1959 until the premises shall have been vacated
by his heirs. Costs against the defendant-appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and
Angeles, JJ., concur.
Separate Opinions
FERNANDO, J., concurring:
With the able and well-written opinion of Justice Castro, I am in full agreement. The
exposition of the facts leaves nothing to be desired and the statement of the law is
notable for its comprehensiveness and clarity. This concurring opinion has been written
solely to express what I consider to be the unfortunate and deplorable consequences of
applying the pari delicto concept, as was, to my mind, indiscriminately done, to alien
landholding declared illegal under the Krivenko doctrine in some past decisions.
It is to be remembered that in Krivenko v. The Register of Deeds of Manila,1 this Court over
strong dissents held that residential and commercial lots may be considered agricultural
within the meaning of the constitutional provision prohibiting the transfer of any private
agricultural land to individuals, corporations or associations not qualified to acquire or
hold lands of the public domain in the Philippines save in cases of hereditary succession.
That provision of the Constitution took effect on November 15, 1935 when the
Commonwealth Government was established. The interpretation as set forth in
the Krivenko decision was only handed down on November 15, 1947. Prior to that date
there were many who were of the opinion that the phrase agricultural land should be
construed strictly and not be made to cover residential and commercial lots. Acting on
that belief, several transactions were entered into transferring such lots to alien vendees
by Filipino-vendors.
After the Krivenko decision, some Filipino vendors sought recovery of the lots in question
on the ground that the sales were null and void. No definite ruling was made by this
Court until September of 1953, when on the 29th of said month, Rellosa v. Gaw Chee
Hun,2 Bautista v. Uy Isabelo,3 Talento v. Makiki,4 Caoile v. Chiao Peng5 were decided.
Of the four decisions in September, 1953, the most extensive discussion of the question is
found in Rellosa v. Gaw Chee Hun, the opinion being penned by retired Justice Bautista
Angelo with the concurrence only of one Justice, Justice Labrador, also retired. Former
Chief Justice Paras as well as the former Justices Tuason and Montemayor concurred in
the result. The necessary sixth vote for a decision was given by the then Justice Bengzon,
who had a two-paragraph concurring opinion disagreeing with the main opinion as to
the force to be accorded to the two cases,6 therein cited. There were two dissenting
opinions by former Justices Pablo and Alex Reyes. The doctrine as announced in
the Rellosa case is that while the sale by a Filipino-vendor to an alien-vendee of a
residential or a commercial lot is null and void as held in the Krivenko case, still the
Filipino-vendor has no right to recover under a civil law doctrine, the parties being in
pari delicto. The only remedy to prevent this continuing violation of the Constitution
which the decision impliedly sanctions by allowing the alien vendees to retain the lots in
question is either escheat or reversion. Thus: "By following either of these remedies, or
by approving an implementary law as above suggested, we can enforce the fundamental
policy of our Constitution regarding our natural resources without doing violence to the
principle of pari delicto."7
Were the parties really in pari delicto? Had the sale by and between Filipino-vendor and
alien-vendee occurred after the decision in the Krivenko case, then the above view would
be correct that both Filipino-vendor and alien-vendee could not be considered as
innocent parties within the contemplation of the law. Both of them should be held
equally guilty of evasion of the Constitution.
Since, however, the sales in question took place prior to the Krivenko decision, at a time
when the assumption could be honestly entertained that there was no constitutional
prohibition against the sale of commercial or residential lots by Filipino-vendor to alien-
vendee, in the absence of a definite decision by the Supreme Court, it would not be doing
violence to reason to free them from the imputation of evading the Constitution. For
evidently evasion implies at the very least knowledge of what is being evaded. The new
Civil Code expressly provides: "Mistakes upon a doubtful or difficult question of law may
be the basis of good faith."8
According to the Rellosa opinion, both parties are equally guilty of evasion of the
Constitution, based on the broader principle that "both parties are presumed to know
the law." This statement that the sales entered into prior to the Krivenko decision were at
that time already vitiated by a guilty knowledge of the parties may be too extreme a
view. It appears to ignore a postulate of a constitutional system, wherein the words of
the Constitution acquire meaning through Supreme Court adjudication.1awphîl.nèt
Reference may be made by way of analogy to a decision adjudging a statute void. Under
the orthodox theory of constitutional law, the act having been found unconstitutional
was not a law, conferred no rights, imposed no duty, afforded no protection.9 As pointed
out by former Chief Justice Hughes though in Chicot County Drainage District v. Baxter
State Bank:10 "It is quite clear, however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of subsequent ruling as to invalidity may have to be
considered in various aspects, — with respect to particular relations, individual and
corporate, and particular conduct, private and official. Questions of rights claimed to
have become vested, of status, of prior determinations deemed to have finality and acted
upon accordingly, of public policy in the light of the nature both of the statute and of its
previous application, demand examination."
After the Krivenko decision, there is no doubt that continued possession by alien-vendee
of property acquired before its promulgation is violative of the Constitution. It is as if an
act granting aliens the right to acquire residential and commercial lots were annulled by
the Supreme Court as contrary to the provision of the Constitution prohibiting aliens
from acquiring private agricultural land.
The question then as now, therefore, was and is how to divest the alien of such property
rights on terms equitable to both parties. That question should be justly resolved in
accordance with the mandates of the Constitution not by a wholesale condemnation of
both parties for entering into a contract at a time when there was no ban as yet arising
from the Krivenko decision, which could not have been anticipated. Unfortunately, under
the Rellosa case, it was assumed that the parties, being in pari delicto, would be left in the
situation in which they were, neither being in a position to seek judicial redress.
Would it not have been more in consonance with the Constitution, if instead the decision
compelled the restitution of the property by the alien-vendee to the Filipino-vendor?
Krivenko decision held in clear, explicit and unambigous language that: "We are deciding
the instant case under section 5 of Article XIII of the Constitution which is more
comprehensive and more absolute in the sense that it prohibits the transfer to aliens of
any private agricultural land including residential land whatever its origin might have
been . . . . This prohibition [Rep. Act No. 133] makes no distinction between private lands
that are strictly agricultural and private lands that are residential or commercial. The
prohibition embraces the sale of private lands of any kind in favor of aliens, which is
again a clear implementation and a legislative interpretation of the constitutional
prohibition. . . . It is well to note at this juncture that in the present case we have no then, the problem would not be still with us now. Fortunately, it is never too late — not
choice. We are construing the Constitution as it is and not as we may desire it to be. even in constitutional adjudication.
Perhaps the effect of our construction is to preclude aliens, admitted freely into the
Philippines, from owning sites where they may build their homes. But if this is the
solemn mandate of the Constitution, we will not attempt to compromise it even in the
name of amity or equity."11

Alien-vendee is therefore incapacitated or disqualified to acquire and hold real estate.

That incapacity and that disqualification should date from the adoption of the
Constitution on November 15, 1935. That incapacity and that disqualification, however,
was made known to Filipino-vendor and to alien-vendee only upon the promulgation of
the Krivenko decision on November 15, 1947. Alien-vendee, therefore, cannot be allowed
to continue owning and exercising acts of ownership over said property, when it is
clearly included within the Constitutional prohibition. Alien-vendee should thus be made
to restore the property with its fruits and rents to Filipino-vendor, its previous owner, if
it could be shown that in the utmost good faith, he transferred his title over the same to
alien-vendee, upon restitution of the purchase price of course.

The Constitution bars alien-vendees from owning the property in question. By

dismissing those suits, the lots remained in alien hands. Notwithstanding the solution of
escheat or reversion offered, they are still at the moment of writing, for the most part in
alien hands. There have been after almost twenty years no proceedings for escheat or
reversion.

Yet it is clear that an alien-vendee cannot consistently with the constitutional provision,
as interpreted in the Krivenko decision, continue owning and exercising acts of
ownership over the real estate in question. It ought to follow then, if such a continuing
violation of the fundamental law is to be put an end to, that the Filipino-vendor, who in
good faith entered into, a contract with an incapacitated person, transferring ownership
of a piece of land after the Constitution went into full force and effect, should, in the light
of the ruling in the Krivenko case, be restored to the possession and ownership thereof,
where he has filed the appropriate case or proceeding. Any other construction would
defeat the ends and purposes not only of this particular provision in question but the
rest of the Constitution itself.

The Constitution frowns upon the title remaining in the alien-vendees. Restoration of the
property upon payment of price received by Filipino vendor or its reasonable equivalent
as fixed by the court is the answer. To give the constitutional provision full force and
effect, in consonance with the dictates of equity and justice, the restoration to Filipino-
vendor upon the payment of a price fixed by the court is the better remedy. He thought
he could transfer the property to an alien and did so. After the Krivenko case had made
clear that he had no right to sell nor an alien-vendee to purchase the property in
question, the obvious solution would be for him to reacquire the same. That way the
Constitution would be given, as it ought to be given, respect and deference.

It may be said that it is too late at this stage to hope for such a solution, the Rellosa
opinion, although originally concurred in by only one justice, being too firmly imbedded.
The writer however sees a welcome sign in the adoption by the Court in this case of the
concurring opinion of the then Justice, later Chief Justice, Bengzon. Had it been followed
G.R. No. L-27952 February 15, 1982 Diez mil ochocientos seize (10,806) acciones

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA PALACIOS, de la 'Central Luzon Milling Co.', disuelta y en
Administratrix, petitioner-appellee,
vs. liquidacion a P0.15 por accion ..............................................1,620.90
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO
RAMIREZ, legatees, oppositors- appellants.
Cuenta de Ahorros en el Philippine Trust

Co.............................................................................................. 2,350.73
ABAD SANTOS, J.:
TOTAL.............................................................. P512,976.97
The main issue in this appeal is the manner of partitioning the testate estate of Jose
Eugenio Ramirez among the principal beneficiaries, namely: his widow Marcelle MENOS:
Demoron de Ramirez; his two grandnephews Roberto and Jorge Ramirez; and his
companion Wanda de Wrobleski. Deuda al Banco de las Islas Filipinas, garan-

The task is not trouble-free because the widow Marcelle is a French who lives in Paris, tizada con prenda de las acciones de La Carlota ......... P 5,000,00
while the companion Wanda is an Austrian who lives in Spain. Moreover, the testator
provided for substitutions. VALOR LIQUIDO........................................... P507,976.97

Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 1964, with only
his widow as compulsory heir. His will was admitted to probate by the Court of First
Instance of Manila, Branch X, on July 27, 1965. Maria Luisa Palacios was appointed
administratrix of the estate. In due time she submitted an inventory of the estate as
follows:
INVENTARIO
The testamentary dispositions are as follows:
A.—En nuda propiedad, a D. Roberto y D. Jorge Ramirez, ambas
menores de edad, residentes en Manila, I.F., calle 'Alright, No. 1818,
Malate, hijos de su sobrino D. Jose Ma. Ramirez, con sustitucion vulgar
a favor de sus respectivos descendientes, y, en su defecto, con
sustitucion vulgar reciprocal entre ambos.

Una sexta parte (1/6) proindiviso de un te El precedente legado en nuda propiedad de la participacion indivisa
de la finca Santa Cruz Building, lo ordena el testador a favor de los
rreno, con sus mejoras y edificaciones, situadoen legatarios nombrados, en atencion a que dicha propiedad fue creacion
del querido padre del otorgante y por ser aquellos continuadores del
la Escolta, Manila............................................................. P500,000.00 apellido Ramirez,

Una sexta parte (1/6) proindiviso de dos B.—Y en usufructo a saber: —

parcelas de terreno situadas en Antipolo, Rizal................... 658.34
Cuatrocientos noventa y uno (491) acciones
de la 'Central Azucarera de la Carlota a P17.00
por accion ................................................................................8,347.00
a. En cuanto a una tercera parte, a favor de la esposa del testador, Da.
Marcelle Ramirez, domiciliada en IE PECO, calle del General Gallieni
No. 33, Seine Francia, con sustitucion vulgar u fideicomisaria a favor
de Da. Wanda de Wrobleski, de Palma de Mallorca, Son Rapina
Avenida de los Reyes 13,
b.—Y en cuanto a las dos terceras partes restantes, a favor de la
nombrada Da. Wanda de Nrobleski con sustitucion vulgar v
fideicomisaria a saber:—
 En cuanto a la mitad de dichas dos terceras partes, a favor de D. Juan
Pablo Jankowski, de Son Rapina Palma de Mallorca; y encuanto a la
mitad restante, a favor de su sobrino, D. Horace V. Ramirez, San Luis
Building, Florida St. Ermita, Manila, I.F.
A pesar de las sustituciones fideiconiisarias precedentemente
ordinadas, las usufiructuarias nombradas conjuntamente con los nudo
propietarios, podran en cualquier memento vender a tercero los
bienes objeto delegado, sin intervencion alguna de los titulares
fideicomisaarios.
On June 23, 1966, the administratrix submitted a project of partition as follows: the
property of the deceased is to be divided into two parts. One part shall go to the widow
'en pleno dominio" in satisfaction of her legitime; the other part or "free portion" shall go
to Jorge and Roberto Ramirez "en nuda propriedad." Furthermore, one third (1/3) of the
free portion is charged with the widow's usufruct and the remaining two-thirds (2/3)
with a usufruct in favor of Wanda.
Jorge and Roberto opposed the project of partition on the grounds: (a) that the
provisions for vulgar substitution in favor of Wanda de Wrobleski with respect to the
widow's usufruct and in favor of Juan Pablo Jankowski and Horacio V. Ramirez, with
respect to Wanda's usufruct are invalid because the first heirs Marcelle and Wanda)
survived the testator; (b) that the provisions for fideicommissary substitutions are also
invalid because the first heirs are not related to the second heirs or substitutes within
the first degree, as provided in Article 863 of the Civil Code; (c) that the grant of a
usufruct over real property in the Philippines in favor of Wanda Wrobleski, who is an
alien, violates Section 5, Article III of the Philippine Constitution; and that (d) the
proposed partition of the testator's interest in the Santa Cruz (Escolta) Building between
the widow Marcelle and the appellants, violates the testator's express win to give this
property to them Nonetheless, the lower court approved the project of partition in its
order dated May 3, 1967. It is this order which Jorge and Roberto have appealed to this
Court.
1. The widow's legitime.
The appellant's do not question the legality of giving Marcelle one-half of the estate in
full ownership. They admit that the testator's dispositions impaired his widow's legitime.
Indeed, under Art. 900 of the Civil Code "If the only survivor is the widow or widower,
she or he shall be entitled to one-half of the hereditary estate." And since Marcelle alone
survived the deceased, she is entitled to one-half of his estate over which he could
impose no burden, encumbrance, condition or substitution of any kind whatsoever. (Art.
904, par. 2, Civil Code.)
It is the one-third usufruct over the free portion which the appellants question and
justifiably so. It appears that the court a quo approved the usufruct in favor of Marcelle
because the testament provides for a usufruct in her favor of one-third of the estate. The
court a quo erred for Marcelle who is entitled to one-half of the estate "en pleno
dominio" as her legitime and which is more than what she is given under the will is not
entitled to have any additional share in the estate. To give Marcelle more than her
legitime will run counter to the testator's intention for as stated above his dispositions
even impaired her legitime and tended to favor Wanda.
2. The substitutions.
It may be useful to recall that "Substitution is the appoint- judgment of another heir so
that he may enter into the inheritance in default of the heir originally instituted." (Art.
857, Civil Code. And that there are several kinds of substitutions, namely: simple or
common, brief or compendious, reciprocal, and fideicommissary (Art. 858, Civil Code.)
According to Tolentino, "Although the Code enumerates four classes, there are really
only two principal classes of substitutions: the simple and the fideicommissary. The
others are merely variations of these two." (111 Civil Code, p. 185 [1973].)
The simple or vulgar is that provided in Art. 859 of the Civil Code which reads:
ART. 859. The testator may designate one or more persons to
substitute the heir or heirs instituted in case such heir or heirs should
die before him, or should not wish, or should be incapacitated to
accept the inheritance.
A simple substitution, without a statement of the cases to which it
refers, shall comprise the three mentioned in the preceding
paragraph, unless the testator has otherwise provided.
The fideicommissary substitution is described in the Civil Code as follows:
ART. 863. A fideicommissary substitution by virtue of which the
fiduciary or first heir instituted is entrusted with the obligation to
preserve and to transmit to a second heir the whole or part of
inheritance, shall be valid and shall take effect, provided such
substitution does not go beyond one degree from the heir originally
instituted, and provided further that the fiduciary or first heir and the
second heir are living at time of the death of the testator.
It will be noted that the testator provided for a vulgar substitution in respect of the
legacies of Roberto and Jorge Ramirez, the appellants, thus: con sustitucion vulgar a
favor de sus respectivos descendientes, y, en su defecto, con substitution vulgar
reciprocal entre ambos.
The appellants do not question the legality of the substitution so provided. The
appellants question the sustitucion vulgar y fideicomisaria a favor de Da. Wanda de
Wrobleski" in connection with the one-third usufruct over the estate given to the widow
Marcelle However, this question has become moot because as We have ruled above, the
widow is not entitled to any usufruct.
The appellants also question the sustitucion vulgar y fideicomisaria in connection with
Wanda's usufruct over two thirds of the estate in favor of Juan Pablo Jankowski and
Horace v. Ramirez.
They allege that the substitution in its vulgar aspect as void because Wanda survived the
testator or stated differently because she did not predecease the testator. But dying
before the testator is not the only case for vulgar substitution for it also includes refusal
or incapacity to accept the inheritance as provided in Art. 859 of the Civil Code, supra.
Hence, the vulgar substitution is valid.
As regards the substitution in its fideicommissary aspect, the appellants are correct in
their claim that it is void for the following reasons:
(a) The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related to
Wanda, the heir originally instituted. Art. 863 of the Civil Code validates a
fideicommissary substitution "provided such substitution does not go beyond one
degree from the heir originally instituted."
What is meant by "one degree" from the first heir is explained by Tolentino as follows:
Scaevola Maura, and Traviesas construe "degree" as designation,
substitution, or transmission. The Supreme Court of Spain has
decidedly adopted this construction. From this point of view, there
can be only one tranmission or substitution, and the substitute need
not be related to the first heir. Manresa, Morell and Sanchez Roman,
however, construe the word "degree" as generation, and the present
Code has obviously followed this interpretation. by providing that the
substitution shall not go beyond one degree "from the heir originally
instituted." The Code thus clearly indicates that the second heir must
be related to and be one generation from the first heir.
From this, it follows that the fideicommissary can only be either a
child or a parent of the first heir. These are the only relatives who are
one generation or degree from the fiduciary (Op. cit., pp. 193-194.)
The 1935 Constitution which is controlling provides as follows:
SEC. 5. Save in cases of hereditary succession, no private agricultural
land shall be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines. (Art. XIII.)
The court a quo upheld the validity of the usufruct given to Wanda on the ground that the
Constitution covers not only succession by operation of law but also testamentary
succession. We are of the opinion that the Constitutional provision which enables aliens
to acquire private lands does not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless. Any alien would be able to circumvent
the prohibition by paying money to a Philippine landowner in exchange for a devise of a
piece of land.
This opinion notwithstanding, We uphold the usufruct in favor of Wanda because a
usufruct, albeit a real right, does not vest title to the land in the usufructuary and it is the
vesting of title to land in favor of aliens which is proscribed by the Constitution.
IN VIEW OF THE FOREGOING, the estate of Jose Eugenio Ramirez is hereby ordered
distributed as follows:
One-half (1/2) thereof to his widow as her legitime;
One-half (1/2) thereof which is the free portion to Roberto and Jorge Ramirez in naked
ownership and the usufruct to Wanda de Wrobleski with a simple substitution in favor of
Juan Pablo Jankowski and Horace V. Ramirez.
The distribution herein ordered supersedes that of the court a quo. No special
pronouncement as to costs.
SO ORDERED.

(b) There is no absolute duty imposed on Wanda to transmit the usufruct to the
substitutes as required by Arts. 865 and 867 of the Civil Code. In fact, the appellee admits
"that the testator contradicts the establishment of a fideicommissary substitution when
he permits the properties subject of the usufruct to be sold upon mutual agreement of
the usufructuaries and the naked owners." (Brief, p. 26.)

3. The usufruct of Wanda.

The appellants claim that the usufruct over real properties of the estate in favor of
Wanda is void because it violates the constitutional prohibition against the acquisition of
lands by aliens.
FELIX TING HO, JR., G.R. No. 130115
MERLA TING HO BRADEN,
JUANA TING HO & LYDIA
TING HO BELENZO, Present:
Petitioners, PUNO, C.J., Chairperson,
CARPIO,
CORONA,
- versus - AZCUNA, and
LEONARDO-DE CASTRO, JJ.
Promulgated:
VICENTE TENG GUI,
Respondent. July 16, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari[1] assailing the Decision[2] of the Court
of Appeals (CA) in CA-G.R. CV No. 42993 which reversed and set aside the Decision of the
Regional Trial Court (RTC) of Olongapo City, Branch 74, in Civil Case No. 558-0-88.
The instant case traces its origin to an action for partition filed by petitioners
Felix Ting Ho, Jr., Merla Ting Ho Braden, Juana Ting Ho and Lydia Ting Ho Belenzo against
their brother, respondent Vicente Teng Gui, before the RTC, Branch 74 of Olongapo
City. The controversy revolves around a parcel of land, and the improvements established
thereon, which, according to petitioners, should form part of the estate of their deceased
father, Felix Ting Ho, and should be partitioned equally among each of the siblings.
In their complaint before the RTC, petitioners alleged that their father Felix Ting
Ho died intestate on June 26, 1970, and left upon his death an estate consisting of the
following:
a) A commercial land consisting of 774 square meters, more or less, located at
Nos. 16 and 18 Afable St., East Bajac-Bajac, Olongapo City, covered by Original Certificate
of Title No. P-1064 and Tax Declaration No. 002-2451;
b) A two-storey residential house on the aforesaid lot;
c) A two-storey commercial building, the first floor rented to different persons
and the second floor, Bonanza Hotel, operated by the defendant also located on the above
described lot; and
d) A sari-sari store (formerly a bakery) also located on the above described lot.[3]
According to petitioners, the said lot and properties were titled and tax declared under
trust in the name of respondent Vicente Teng Gui for the benefit of the deceased Felix Ting
Ho who, being a Chinese citizen, was then disqualified to own public lands in
the Philippines; and that upon the death of Felix Ting Ho, the respondent took possession
of the same for his own exclusive use and benefit to their exclusion and prejudice.[4]
In his answer, the respondent countered that on October 11, 1958, Felix Ting Ho
sold the commercial and residential buildings to his sister-in-law, Victoria Cabasal, and the
bakery to his brother-in-law, Gregorio Fontela.[5] He alleged that he acquired said
properties from the respective buyers on October 28, 1961 and has since then been in
possession of subject properties in the concept of an owner; and that on January 24, 1978,
Original Certificate of Title No. P-1064 covering the subject lot was issued to him pursuant
to a miscellaneous sales patent granted to him on January 3, 1978.[6]
The undisputed facts as found by the trial court (RTC), and affirmed by the
appellate court (CA), are as follows:
[T]he plaintiffs and the defendant are all brothers and sisters,
the defendant being the oldest. They are the only legitimate children of
the deceased Spouses Felix Ting Ho and Leonila Cabasal. Felix Ting Ho
died on June 26, 1970 while the wife Leonila Cabasal died on December
7, 1978. The defendant Vicente Teng Gui is the oldest among the
children as he was born on April 5, 1943. The father of the plaintiffs and
the defendant was a Chinese citizen although their mother was
Filipino. That sometime in 1947, the father of the plaintiffs and
defendant, Felix Ting Ho, who was already then married to their
mother Leonila Cabasal, occupied a parcel of land identified to (sic) as
Lot No. 18 Brill which was thereafter identified as Lot No. 16 situated
at Afable Street, East Bajac-Bajac, Olongapo City, by virtue of the
permission granted him by the then U.S. Naval Reservation Office,
Olongapo, Zambales. The couple thereafter introduced improvements
on the land. They built a house of strong material at 16 Afable
Street which is a commercial and residential house and another
building of strong material at 18 Afable Streetwhich was a residential
house and a bakery. The couple, as well as their children, lived and
resided in the said properties until their death. The father, Felix Ting
Ho had managed the bakery while the mother managed the sari-sari
store. Long before the death of Felix Ting Ho, who died on June 26,
1970, he executed on October 11, 1958 a Deed of Absolute Sale of
a house of strong material located at 16 Afable Street, Olongapo,
Zambales, specifically described in Tax Dec. No. 5432, in favor of
Victoria Cabasal his sister-in-law (Exh. C). This Deed of Sale
cancelled the Tax Dec. of Felix Ting Ho over the said building (Exh. C-1)
and the building was registered in the name of the buyer Victoria
Cabasal, as per Tax Dec. No. 7579 (Exh. C-2). On the same date,
October 11, 1958 the said Felix Ting Ho also sold a building of
strong material located at 18 Afable Street, described in Tax Dec.
No. 5982, in favor of Gregorio Fontela, of legal age, an American
citizen, married (Exh. D). This Deed of Sale, in effect, cancelled Tax
Dec. No. 5982 and the same was registered in the name of the buyer
Gregorio Fontela, as per Tax Dec. No. 7580 (Exh. D-2). In turn Victoria
Cabasal and her husband Gregorio Fontela sold to Vicente Teng
Gui on October 28, 1961 the buildings which were bought by them
from Felix Ting Ho and their tax declarations for the building they
bought (Exhs. C-2 and D-2) were accordingly cancelled and the
said buildings were registered in the name of the defendant
Vicente Teng Gui (Exhs. C-3 and D-3). On October 25, 1966 the father
of the parties Felix Ting Ho executed an Affidavit of Transfer,
Relinquishment and Renouncement of Rights and Interest including
 Improvements on Land in favor of his eldest son the defendant Vicente
Teng Gui. On the basis of the said document the defendant who then
chose Filipino citizenship filed a miscellaneous sales application with
the Bureau of Lands. Miscellaneous Sales Patent No. 7457 of the
land which was then identified to be Lot No. 418, Ts-308 consisting
of 774 square meters was issued to the applicant Vicente Teng Gui
and accordingly on the 24th of January, 1978 Original Certificate of
Title No. P-1064 covering the lot in question was issued to the
defendant Vicente Teng Gui. Although the buildings and
improvements on the land in question were sold by Felix Ting Ho to
Victoria Cabasal and Gregorio Fontela in 1958 and who in turn sold the
buildings to the defendant in 1961 the said Felix Ting Ho and his wife
remained in possession of the properties as Felix Ting Ho continued to
manage the bakery while the wife Leonila Cabasal continued to manage
the sari-sari store. During all the time that the alleged buildings were
sold to the spouses Victoria Cabasal and Gregorio Fontela in 1958 and
the subsequent sale of the same to the defendant Vicente Teng Gui in
October of 1961 the plaintiffs and the defendant continued to live and
were under the custody of their parents until their father Felix Ting Ho
died in 1970 and their mother Leonila Cabasal died in
1978.[7] (Emphasis supplied)
In light of these factual findings, the RTC found that Felix Ting Ho, being a
Chinese citizen and the father of the petitioners and respondent, resorted to a series of
simulated transactions in order to preserve the right to the lot and the properties thereon
in the hands of the family. As stated by the trial court:
After a serious consideration of the testimonies given by both
one of the plaintiffs and the defendant as well as the documentary
exhibits presented in the case, the Court is inclined to believe that Felix
Ting Ho, the father of the plaintiffs and the defendant, and the husband
of Leonila Cabasal thought of preserving the properties in question by
transferring the said properties to his eldest son as he thought that he
cannot acquire the properties as he was a Chinese citizen. To transfer
the improvements on the land to his eldest son the defendant Vicente
Teng Gui, he first executed simulated Deeds of Sales in favor of the
sister and brother-in-law of his wife in 1958 and after three (3) years
it was made to appear that these vendees had sold the improvements
to the defendant Vicente Teng Gui who was then 18 years old. The
Court finds that these transaction (sic) were simulated and that no
consideration was ever paid by the vendees.
xxxxxxxxx
With regards (sic) to the transfer and relinquishment of Felix
Ting Hos right to the land in question in favor of the defendant, the
Court believes, that although from the face of the document it is stated
in absolute terms that without any consideration Felix Ting Ho was
transferring and renouncing his right in favor of his son, the defendant
Vicente Teng Gui, still the Court believes that the transaction was one
of implied trust executed by Felix Ting Ho for the benefit of his family[8]
Notwithstanding such findings, the RTC considered the Affidavit of Transfer,
Relinquishment and Renouncement of Rights and Interests over the land as a donation
which was accepted by the donee, the herein respondent. With respect to the properties
in the lot, the trial court held that although the sales were simulated, pursuant to Article
1471 of the New Civil Code[9] it can be assumed that the intention of Felix Ting Ho in such
transaction was to give and donate such properties to the respondent. As a result, it
awarded the entire conjugal share of Felix Ting Ho in the subject lot and properties to the
respondent and divided only the conjugal share of his wife among the siblings. The
dispositive portion of the RTC decision decreed:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiffs and against the defendant as the Court orders the partition
and the adjudication of the subject properties, Lot 418, Ts-308,
specifically described in original Certificate of Title No. P-1064 and the
residential and commercial houses standing on the lot specifically
described in Tax Decs. Nos. 9179 and 9180 in the name of Vicente Teng
Gui in the following manner, to wit: To the defendant Vicente Teng Gui
is adjudicated an undivided six-tenth (6/10) of the aforementioned
properties and to each of the plaintiffs Felix Ting Ho, Jr., Merla Ting-Ho
Braden, Juana Ting and Lydia Ting Ho-Belenzo each an undivided one-
tenth (1/10) of the properties[10]
From this decision, both parties interposed their respective appeals. The petitioners
claimed that the RTC erred in awarding respondent the entire conjugal share of their
deceased father in the lot and properties in question contrary to its own finding that an
implied trust existed between the parties. The respondent, on the other hand, asserted
that the RTCerred in not ruling that the lot and properties do not form part of the estate of
Felix Ting Ho and are owned entirely by him.
On appeal, the CA reversed and set aside the decision of the RTC. The appellate court held
that the deceased Felix Ting Ho was never the owner and never claimed ownership of the
subject lot since he is disqualified under Philippine laws from owning public lands, and
that respondent Vicente Teng Gui was the rightful owner over said lot by virtue of
Miscellaneous Sales Patent No. 7457 issued in his favor, viz:
The deceased Felix Ting Ho, plaintiffs and defendants late father, was never
the owner of the subject lot, now identified as Lot No. 418, Ts-308
covered by OCT No. P-1064 (Exh. A; Record, p. 104). As stated by
Felix Ting Ho no less in the Affidavit of Transfer, Relinquishment
and Renouncement of Rights and Interest etc. (Exh. B: Record, p.
107), executed on October 25, 1966 he, the late Felix Ting Ho, was
merely a possessor or occupant of the subject lot by virtue of a
permission granted by the then U.S. Naval Reservation Office,
Olongapo, Zambales. The late Felix Ting Ho was never the owner and
never claimed ownership of the land. (Emphasis supplied)
The affidavit, Exhibit B, was subscribed and sworn to before a Land Investigator
of the Bureau of Lands and in the said affidavit, the late Felix Ting Ho
expressly acknowledged that because he is a Chinese citizen he is not
qualified to purchase public lands under Philippine laws for which
reason he thereby transfers, relinquishes and renounces all his rights
and interests in the subject land, including all the improvements
thereon to his son, the defendant Vicente Teng Gui, who is of legal age,
single, Filipino citizen and qualified under the public land law to
acquire lands.

xxxxxxxxx
Defendant Vicente Teng Gui acquired the subject land by
sales patent or purchase from the government and not from his
father, the late Felix Ting Ho. It cannot be said that he acquired or
bought the land in trust for his father because on December 5, 1977
when the subject land was sold to him by the government and on
January 3, 1978 when Miscellaneous Sales Patent No. 7457 was issued,
the late Felix Ting Ho was already dead, having died on June 6, 1970
(TSN, January 10, 1990, p. 4).[11]
Regarding the properties erected over the said lot, the CA held that the finding that the
sales of the two-storey commercial and residential buildings and sari-sari store to Victoria
Cabasal and Gregorio Fontela and subsequently to respondent were without
consideration and simulated is supported by evidence, which clearly establishes that these
properties should form part of the estate of the late spouses Felix Ting Ho and Leonila
Cabasal.
Thus, while the appellate court dismissed the complaint for partition with
respect to the lot in question, it awarded the petitioners a four-fifths (4/5) share of the
subject properties erected on the said lot. The dispositive portion of the CA ruling reads as
follows:
WHEREFORE, premises considered, the decision appealed from is
REVERSED and SET ASIDE and NEW JUDGMENT rendered:
1. DISMISSING plaintiff-appellants complaint with respect to the
subject parcel of land, identified as Lot No. 418, Ts-308, covered by OCT
No. P-1064, in the name of plaintiff-appellants [should be defendant-
appellant];
2. DECLARING that the two-storey commercial building, the two-storey
residential building and sari-sari store (formerly a bakery), all erected
on the subject lot No. 418, Ts-308, form part of the estate of the
deceased spouses Felix Ting Ho and Leonila Cabasal, and that plaintiff-
appellants are entitled to four-fifths (4/5) thereof, the remaining one-
fifth (1/5) being the share of the defendant-appellant;
3. DIRECTING the court a quo to partition the said two-storey
commercial building, two-storey residential building and sari-sari
store (formerly a bakery) in accordance with Rule 69 of the Revised
Rules of Court and pertinent provisions of the Civil Code;
4. Let the records of this case be remanded to the court of origin for
further proceedings;
5. Let a copy of this decision be furnished the Office of the Solicitor
General; and
6. There is no pronouncement as to costs.
SO ORDERED.[12]
Both petitioners and respondent filed their respective motions for
reconsideration from this ruling, which were summarily denied by the CA in its
Resolution[13] dated August 5, 1997. Hence, this petition.
According to the petitioners, the CA erred in declaring that Lot No. 418, Ts-308
does not form part of the estate of the deceased Felix Ting Ho and is owned alone by
respondent. Respondent, on the other hand, contends that he should be declared the sole
owner not only of Lot No. 418, Ts-308 but also of the properties erected thereon and that
the CA erred in not dismissing the complaint for partition with respect to the said
properties.
The primary issue for consideration is whether both Lot No. 418, Ts-308 and the
properties erected thereon should be included in the estate of the deceased Felix Ting Ho.
We affirm the CA ruling.
With regard to Lot No. 418, Ts-308, Article XIII, Section 1 of the 1935
Constitution states:
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
(Emphasis supplied)
Our fundamental law cannot be any clearer. The right to acquire lands of the
public domain is reserved for Filipino citizens or corporations at least sixty percent of the
capital of which is owned by Filipinos. Thus, in Krivenko v. Register of Deeds,[14] the
Court enunciated that:
Perhaps the effect of our construction is to preclude aliens,
admitted freely into the Philippines from owning sites where they
may build their homes. But if this is the solemn mandate of the
Constitution, we will not attempt to compromise it even in the
name of amity or equity. We are satisfied, however, that aliens are not
completely excluded by the Constitution from the use of lands for
residential purposes. Since their residence in the Philippines is
temporary, they may be granted temporary rights such as a lease
contract which is not forbidden by the Constitution. Should they desire
to remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.[15]
In the present case, the father of petitioners and respondent was a Chinese
citizen; therefore, he was disqualified from acquiring and owning real property in
the Philippines. In fact, he was only occupying the subject lot by virtue of the permission
granted him by the then U.S. Naval Reservation Office of Olongapo, Zambales. As correctly
found by the CA, the deceased Felix Ting Ho was never the owner of the subject lot in light
of the constitutional proscription and the respondent did not at any instance act as the
dummy of his father.
On the other hand, the respondent became the owner of Lot No. 418, Ts-308
when he was granted Miscellaneous Sales Patent No. 7457 on January 3, 1978, by the
Secretary of Natural Resources By Authority of the President of the Philippines, and when
Original Certificate of Title No. P-1064 was correspondingly issued in his name. The grant
of the miscellaneous sales patent by the Secretary of Natural Resources, and the
corresponding issuance of the original certificate of title in his name, show that the
respondent possesses all the qualifications and none of the disqualifications to acquire
alienable and disposable lands of the public domain. These issuances bear the
presumption of regularity in their performance in the absence of evidence to the contrary.
Registration of grants and patents involving public lands is governed by Section 122 of Act
No. 496, which was subsequently amended by Section 103 of Presidential Decree No.
1529, viz:
Sec. 103. Certificate of title pursuant 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. It shall be the duty of the official issuing the instrument of
alienation, grant, patent or conveyance in behalf of the Government to
cause such instrument to be filed with the Register of Deeds of the
province or city where the land lies, and to be there registered like
other deeds and conveyance, whereupon a certificate of title shall be
entered as in other cases of registered land, and an owners duplicate
issued to the grantee. The deeds, grant, patent or instrument of
conveyance from the Government to the grantee shall not take effect as
a conveyance or bind the land, but shall operate only as a contract
between the Government and the grantee and as evidence of authority
to the Register of Deeds to make registration. It is the act of registration
that shall be the operative act to affect and convey the land, and in all
cases under this Decree registration shall be made in the office of the
Register of Deeds of the province or city where the land lies. The fees
for registration shall be paid by the grantee. After due registration
and issuance of the certificate of title, such land shall be deemed
to be registered land to all intents and purposes under this
Decree.[16] (Emphasis supplied)
Under the law, a certificate of title issued pursuant to any grant or patent involving public
land is as conclusive and indefeasible as any other certificate of title issued to private lands
in the ordinary or cadastral registration proceeding. The effect of the registration of a
patent and the issuance of a certificate of title to the patentee is to vest in him an
incontestable title to the land, in the same manner as if ownership had been determined
by final decree of the court, and the title so issued is absolutely conclusive and
indisputable, and is not subject to collateral attack.[17]
Nonetheless, petitioners invoke equity considerations and claim that the ruling of
the RTC that an implied trust was created between respondent and their father with
respect to the subject lot should be upheld.
This contention must fail because the prohibition against an alien from owning lands of
the public domain is absolute and not even an implied trust can be permitted to arise on
equity considerations.
In the case of Muller v. Muller,[18] wherein the respondent, a German national,
was seeking reimbursement of funds claimed by him to be given in trust to his petitioner
wife, a Philippine citizen, for the purchase of a property in Antipolo, the Court, in rejecting
the claim, ruled that:
Respondent was aware of the constitutional prohibition and
expressly admitted his knowledge thereof to this Court. He declared
that he had the Antipolo property titled in the name of the petitioner
because of the said prohibition. His attempt at subsequently asserting
or claiming a right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied
trust was created and resulted by operation of law in view of
petitioner's marriage to respondent. Save for the exception
provided in cases of hereditary succession, respondent's
disqualification from owning lands in the Philippines is absolute.
Not even an ownership in trust is allowed. Besides, where the
purchase is made in violation of an existing statute and in evasion of its
express provision, no trust can result in favor of the party who is guilty
of the fraud. To hold otherwise would allow circumvention of the
constitutional prohibition.
Invoking the principle that a court is not only a court of law
but also a court of equity, is likewise misplaced. It has been held that
equity as a rule will follow the law and will not permit that to be done
indirectly which, because of public policy, cannot be done directly...[19]
Coming now to the issue of ownership of the properties erected on the subject
lot, the Court agrees with the finding of the trial court, as affirmed by the appellate court,
that the series of transactions resorted to by the deceased were simulated in order to
preserve the properties in the hands of the family. The records show that during all the
time that the properties were allegedly sold to the spouses Victoria Cabasal and Gregorio
Fontela in 1958 and the subsequent sale of the same to respondent in 1961, the petitioners
and respondent, along with their parents, remained in possession and continued to live in
said properties.
However, the trial court concluded that:
In fairness to the defendant, although the Deeds of Sale executed by
Felix Ting Ho regarding the improvements in favor of Victoria Cabasal
and Gregorio Fontela and the subsequent transfer of the same by
Gregorio Fontela and Victoria Cabasal to the defendant are all
simulated, yet, pursuant to Article 1471 of the New Civil Code it can
be assumed that the intention of Felix Ting Ho in such transaction
was to give and donate the improvements to his eldest son the
defendant Vicente Teng Gui [20]
 Its finding was based on Article 1471 of the Civil Code, which provides that:

Art. 1471. If the price is simulated, the sale is void, but the act
may be shown to have been in reality a donation, or some other act or
contract.[21]

The Court holds that the reliance of the trial court on the provisions of Article
1471 of the Civil Code to conclude that the simulated sales were a valid donation to the
respondent is misplaced because its finding was based on a mere assumption when the
law requires positive proof.

The respondent was unable to show, and the records are bereft of any evidence,
that the simulated sales of the properties were intended by the deceased to be a donation
to him. Thus, the Court holds that the two-storey residential house, two-storey residential
building and sari-sari store form part of the estate of the late spouses Felix Ting Ho and
Leonila Cabasal, entitling the petitioners to a four-fifths (4/5) share thereof.

IN VIEW WHEREOF, the petition is DENIED. The assailed Decision dated

December 27, 1996 of the Court of Appeals in CA-G.R. CV No. 42993 is hereby AFFIRMED.

SO ORDERED.
 [G.R. No. 124293. January 31, 2005]
J.G. SUMMIT HOLDINGS, INC., petitioner, vs. COURT OF APPEALS; COMMITTEE ON
PRIVATIZATION, its Chairman and Members; ASSET PRIVATIZATION
TRUST; and PHILYARDS HOLDINGS, INC., respondents.
RESOLUTION
PUNO, J.:
For resolution before this Court are two motions filed by the petitioner, J.G. Summit
Holdings, Inc. for reconsideration of our Resolution dated September 24, 2003 and to
elevate this case to the Court En Banc. The petitioner questions the Resolution which
reversed our Decision of November 20, 2000, which in turn reversed and set aside a
Decision of the Court of Appeals promulgated on July 18, 1995.
I. Facts
The undisputed facts of the case, as set forth in our Resolution of September 24,
2003, are as follows:
On January 27, 1997, the National Investment and Development Corporation (NIDC), a
government corporation, entered into a Joint Venture Agreement (JVA) with Kawasaki
Heavy Industries, Ltd. of Kobe, Japan (KAWASAKI) for the construction, operation and
management of the Subic National Shipyard, Inc. (SNS) which subsequently became the
Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, the NIDC
and KAWASAKI will contribute P330 million for the capitalization of PHILSECO in the
proportion of 60%-40% respectively. One of its salient features is the grant to the parties
of the right of first refusal should either of them decide to sell, assign or transfer its
interest in the joint venture, viz:
1.4 Neither party shall sell, transfer or assign all or any part of its interest in SNS
[PHILSECO] to any third party without giving the other under the same terms the right of
first refusal. This provision shall not apply if the transferee is a corporation owned or
controlled by the GOVERNMENT or by a KAWASAKI affiliate.
On November 25, 1986, NIDC transferred all its rights, title and interest in PHILSECO to
the Philippine National Bank (PNB). Such interests were subsequently transferred to the
National Government pursuant to Administrative Order No. 14. On December 8, 1986,
President Corazon C. Aquino issued Proclamation No. 50 establishing the Committee on
Privatization (COP) and the Asset Privatization Trust (APT) to take title to, and
possession of, conserve, manage and dispose of non-performing assets of the National
Government. Thereafter, on February 27, 1987, a trust agreement was entered into
between the National Government and the APT wherein the latter was named the trustee
of the National Government's share in PHILSECO. In 1989, as a result of a quasi-
reorganization of PHILSECO to settle its huge obligations to PNB, the National
Government's shareholdings in PHILSECO increased to 97.41% thereby reducing
KAWASAKI's shareholdings to 2.59%.
In the interest of the national economy and the government, the COP and the APT
deemed it best to sell the National Government's share in PHILSECO to private entities.
After a series of negotiations between the APT and KAWASAKI, they agreed that the
latter's right of first refusal under the JVA be "exchanged" for the right to top by five
percent (5%) the highest bid for the said shares. They further agreed that KAWASAKI
would be entitled to name a company in which it was a stockholder, which could exercise
the right to top. On September 7, 1990, KAWASAKI informed APT that Philyards
Holdings, Inc. (PHI)[1] would exercise its right to top.
At the pre-bidding conference held on September 18, 1993, interested bidders were
given copies of the JVA between NIDC and KAWASAKI, and of the Asset Specific Bidding
Rules (ASBR) drafted for the National Government's 87.6% equity share in PHILSECO.
The provisions of the ASBR were explained to the interested bidders who were notified
that the bidding would be held on December 2, 1993. A portion of the ASBR reads:
1.0 The subject of this Asset Privatization Trust (APT) sale through public bidding is the
National Government's equity in PHILSECO consisting of 896,869,942 shares of stock
(representing 87.67% of PHILSECO's outstanding capital stock), which will be sold as a
whole block in accordance with the rules herein enumerated.
xxx xxx xxx
2.0 The highest bid, as well as the buyer, shall be subject to the final approval of both the
APT Board of Trustees and the Committee on Privatization (COP).
2.1 APT reserves the right in its sole discretion, to reject any or all bids.
3.0 This public bidding shall be on an Indicative Price Bidding basis. The Indicative price
set for the National Government's 87.67% equity in PHILSECO is PESOS: ONE BILLION
THREE HUNDRED MILLION (P1,300,000,000.00).
xxx xxx xxx
6.0 The highest qualified bid will be submitted to the APT Board of Trustees at its regular
meeting following the bidding, for the purpose of determining whether or not it should
be endorsed by the APT Board of Trustees to the COP, and the latter approves the same.
The APT shall advise Kawasaki Heavy Industries, Inc. and/or its nominee, [PHILYARDS]
Holdings, Inc., that the highest bid is acceptable to the National Government. Kawasaki
Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. shall then have a period of
thirty (30) calendar days from the date of receipt of such advice from APT within which
to exercise their "Option to Top the Highest Bid" by offering a bid equivalent to the
highest bid plus five (5%) percent thereof.
6.1 Should Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. exercise
their "Option to Top the Highest Bid," they shall so notify the APT about such exercise of
their option and deposit with APT the amount equivalent to ten percent (10%) of the
highest bid plus five percent (5%) thereof within the thirty (30)-day period mentioned in
paragraph 6.0 above. APT will then serve notice upon Kawasaki Heavy Industries, Inc.
and/or [PHILYARDS] Holdings, Inc. declaring them as the preferred bidder and they shall
have a period of ninety (90) days from the receipt of the APT's notice within which to
pay the balance of their bid price.
6.2 Should Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. fail to
exercise their "Option to Top the Highest Bid" within the thirty (30)-day period, APT will
declare the highest bidder as the winning bidder.
xxx xxx xxx
12.0 The bidder shall be solely responsible for examining with appropriate care these
rules, the official bid forms, including any addenda or amendments thereto issued during
the bidding period. The bidder shall likewise be responsible for informing itself with
respect to any and all conditions concerning the PHILSECO Shares which may, in any
manner, affect the bidder's proposal. Failure on the part of the bidder to so examine and
inform itself shall be its sole risk and no relief for error or omission will be given by APT
or COP. . . .
At the public bidding on the said date, petitioner J.G. Summit Holdings, Inc.[2] submitted a
bid of Two Billion and Thirty Million Pesos (P2,030,000,000.00) with an
acknowledgment of KAWASAKI/[PHILYARDS'] right to top, viz:
4. I/We understand that the Committee on Privatization (COP) has up to thirty (30) days
to act on APT's recommendation based on the result of this bidding. Should the COP
approve the highest bid, APT shall advise Kawasaki Heavy Industries, Inc. and/or its
nominee, [PHILYARDS] Holdings, Inc. that the highest bid is acceptable to the National
Government. Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. shall
then have a period of thirty (30) calendar days from the date of receipt of such advice
from APT within which to exercise their "Option to Top the Highest Bid" by offering a bid
equivalent to the highest bid plus five (5%) percent thereof.
As petitioner was declared the highest bidder, the COP approved the sale on December 3,
1993 "subject to the right of Kawasaki Heavy Industries, Inc./[PHILYARDS] Holdings, Inc.
to top JGSMI's bid by 5% as specified in the bidding rules."
On December 29, 1993, petitioner informed APT that it was protesting the offer of PHI to
top its bid on the grounds that: (a) the KAWASAKI/PHI consortium composed of
KAWASAKI, [PHILYARDS], Mitsui, Keppel, SM Group, ICTSI and Insular Life violated the
ASBR because the last four (4) companies were the losing bidders thereby circumventing
the law and prejudicing the weak winning bidder; (b) only KAWASAKI could exercise the
right to top; (c) giving the same option to top to PHI constituted unwarranted benefit to a
third party; (d) no right of first refusal can be exercised in a public bidding or auction
sale; and (e) the JG Summit consortium was not estopped from questioning the
proceedings.
On February 2, 1994, petitioner was notified that PHI had fully paid the balance of the
purchase price of the subject bidding. On February 7, 1994, the APT notified petitioner
that PHI had exercised its option to top the highest bid and that the COP had approved
the same on January 6, 1994. On February 24, 1994, the APT and PHI executed a Stock
Purchase Agreement. Consequently, petitioner filed with this Court a Petition for
Mandamus under G.R. No. 114057. On May 11, 1994, said petition was referred to the
Court of Appeals. On July 18, 1995, the Court of Appeals denied the same for lack of
merit. It ruled that the petition for mandamus was not the proper remedy to question the
constitutionality or legality of the right of first refusal and the right to top that was
exercised by KAWASAKI/PHI, and that the matter must be brought "by the proper party
in the proper forum at the proper time and threshed out in a full blown trial." The Court
of Appeals further ruled that the right of first refusal and the right to top are prima facie
legal and that the petitioner, "by participating in the public bidding, with full knowledge
of the right to top granted to KAWASAKI/[PHILYARDS] isestopped from questioning the
validity of the award given to [PHILYARDS] after the latter exercised the right to top and
had paid in full the purchase price of the subject shares, pursuant to the ASBR."
Petitioner filed a Motion for Reconsideration of said Decision which was denied on
March 15, 1996. Petitioner thus filed a Petition for Certiorari with this Court alleging
grave abuse of discretion on the part of the appellate court.
On November 20, 2000, this Court rendered x x x [a] Decision ruling among others that
the Court of Appeals erred when it dismissed the petition on the sole ground of the
impropriety of the special civil action of mandamus because the petition was also one of
certiorari. It further ruled that a shipyard like PHILSECO is a public utility whose
capitalization must be sixty percent (60%) Filipino-owned. Consequently, the right to top
granted to KAWASAKI under the Asset Specific Bidding Rules (ASBR) drafted for the sale
of the 87.67% equity of the National Government in PHILSECO is illegal not only because
it violates the rules on competitive bidding but more so, because it allows foreign
corporations to own more than 40% equity in the shipyard. It also held that "although
the petitioner had the opportunity to examine the ASBR before it participated in the
bidding, it cannot be estopped from questioning the unconstitutional, illegal and
inequitable provisions thereof." Thus, this Court voided the transfer of the national
government's 87.67% share in PHILSECO to Philyard[s] Holdings, Inc., and upheld the
right of JG Summit, as the highest bidder, to take title to the said shares, viz:
WHEREFORE, the instant petition for review on certiorari is GRANTED. The assailed
Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE.
Petitioner is ordered to pay to APT its bid price of Two Billion Thirty Million Pesos
(P2,030,000,000.00), less its bid deposit plus interests upon the finality of this Decision.
In turn, APT is ordered to:
(a) accept the said amount of P2,030,000,000.00 less bid deposit and
interests from petitioner;
(b) execute a Stock Purchase Agreement with petitioner;
 (c) cause the issuance in favor of petitioner of the certificates of stocks
representing 87.6% of PHILSECO's total capitalization;
(d) return to private respondent PHGI the amount of Two Billion One
Hundred Thirty-One Million Five Hundred Thousand Pesos
(P2,131,500,000.00); and
(e) cause the cancellation of the stock certificates issued to PHI.
SO ORDERED.
In separate Motions for Reconsideration, respondents submit[ted] three basic issues for
x x x resolution: (1) Whether PHILSECO is a public utility; (2) Whether under the 1977
JVA, KAWASAKI can exercise its right of first refusal only up to 40% of the total
capitalization of PHILSECO; and (3) Whether the right to top granted to KAWASAKI
violates the principles of competitive bidding.[3] (citations omitted)
In a Resolution dated September 24, 2003, this Court ruled in favor of the
respondents. On the first issue, we held that Philippine Shipyard and Engineering
Corporation (PHILSECO) is not a public utility, as by nature, a shipyard is not a public
utility[4] and that no law declares a shipyard to be a public utility.[5] On the second issue,
we found nothing in the 1977 Joint Venture Agreement (JVA) which prevents Kawasaki
Heavy Industries, Ltd. of Kobe, Japan (KAWASAKI) from acquiring more than 40% of
PHILSECOs total capitalization.[6] On the final issue, we held that the right to top granted
to KAWASAKI in exchange for its right of first refusal did not violate the principles of
competitive bidding.[7]
On October 20, 2003, the petitioner filed a Motion for Reconsideration[8] and a
Motion to Elevate This Case to the Court En Banc.[9] Public respondents Committee on
Privatization (COP) and Asset Privatization Trust (APT), and private respondent Philyards
Holdings, Inc. (PHILYARDS) filed their Comments on J.G. Summit Holdings, Inc.s (JG
Summits) Motion for Reconsideration and Motion to Elevate This Case to the Court En
Banc on January 29, 2004 and February 3, 2004, respectively.
II. Issues
Based on the foregoing, the relevant issues to resolve to end this litigation are the
following:
1. Whether there are sufficient bases to elevate the case at bar to the Court en banc.
2. Whether the motion for reconsideration raises any new matter or cogent reason
to warrant a reconsideration of this Courts Resolution of September 24, 2003.
Motion to Elevate this Case to the
Court En Banc
The petitioner prays for the elevation of the case to the Court en banc on the
following grounds:
1. The main issue of the propriety of the bidding process involved in the present case
has been confused with the policy issue of the supposed fate of the shipping industry
which has never been an issue that is determinative of this case.[10]
2. The present case may be considered under the Supreme Court Resolution dated
February 23, 1984 which included among en banc cases those involving a novel question
of law and those where a doctrine or principle laid down by the Court en banc or in
division may be modified or reversed.[11]
3. There was clear executive interference in the judicial functions of the Court when
the Honorable Jose Isidro Camacho, Secretary of Finance, forwarded to Chief Justice
Davide, a memorandum dated November 5, 2001, attaching a copy of the Foreign
Chambers Report dated October 17, 2001, which matter was placed in the agenda of the
Court and noted by it in a formal resolution dated November 28, 2001.[12]
Opposing J.G. Summits motion to elevate the case en banc, PHILYARDS points out the
petitioners inconsistency in previously opposing PHILYARDS Motion to Refer the Case to
the Court En Banc. PHILYARDS contends that J.G. Summit should now be estopped from
asking that the case be referred to the Court en banc. PHILYARDS further contends that
the Supreme Court en banc is not an appellate court to which decisions or resolutions of
its divisions may be appealed citing Supreme Court Circular No. 2-89 dated February 7,
1989.[13] PHILYARDS also alleges that there is no novel question of law involved in the
present case as the assailed Resolution was based on well-settled jurisprudence. Likewise,
PHILYARDS stresses that the Resolution was merely an outcome of the motions for
reconsideration filed by it and the COP and APT and is consistent with the inherent power
of courts to amend and control its process and orders so as to make them conformable to
law and justice. (Rule 135, sec. 5)[14] Private respondent belittles the petitioners
allegations regarding the change in ponente and the alleged executive interference as
shown by former Secretary of Finance Jose Isidro Camachos memorandum dated
November 5, 2001 arguing that these do not justify a referral of the present case to the
Court en banc.
In insisting that its Motion to Elevate This Case to the Court En Banc should be
granted, J.G. Summit further argued that: its Opposition to the Office of the Solicitor
Generals Motion to Refer is different from its own Motion to Elevate; different grounds are
invoked by the two motions; there was unwarranted executive interference; and the
change in ponente is merely noted in asserting that this case should be decided by the
Court en banc.[15]
We find no merit in petitioners contention that the propriety of the bidding process
involved in the present case has been confused with the policy issue of the fate of the
shipping industry which, petitioner maintains, has never been an issue that is
determinative of this case. The Courts Resolution of September 24, 2003 reveals a clear
and definitive ruling on the propriety of the bidding process. In discussing whether the
right to top granted to KAWASAKI in exchange for its right of first refusal violates the
principles of competitive bidding, we made an exhaustive discourse on the rules and
principles of public bidding and whether they were complied with in the case at
bar.[16] This Court categorically ruled on the petitioners argument that PHILSECO, as a
shipyard, is a public utility which should maintain a 60%-40% Filipino-foreign equity
ratio, as it was a pivotal issue. In doing so, we recognized the impact of our ruling on the
shipbuilding industry which was beyond avoidance.[17]
We reject petitioners argument that the present case may be considered under the
Supreme Court Resolution dated February 23, 1984 which included among en banc cases
those involving a novel question of law and those where a doctrine or principle laid down
by the court en banc or in division may be modified or reversed. The case was resolved
based on basic principles of the right of first refusal in commercial law and estoppel in civil
law. Contractual obligations arising from rights of first refusal are not new in this
jurisdiction and have been recognized in numerous cases.[18] Estoppel is too known a civil
law concept to require an elongated discussion. Fundamental principles on public bidding
were likewise used to resolve the issues raised by the petitioner. To be sure, petitioner
leans on the right to top in a public bidding in arguing that the case at bar involves a novel
issue. We are not swayed. The right to top was merely a condition or a reservation made
in the bidding rules which was fully disclosed to all bidding parties. In Bureau Veritas,
represented by Theodor H. Hunermann v. Office of the President, et al., [19]we dealt
with this conditionality, viz:
x x x It must be stressed, as held in the case of A.C. Esguerra & Sons v. Aytona, et al., (L-
18751, 28 April 1962, 4 SCRA 1245), that in an "invitation to bid, there is a condition
imposed upon the bidders to the effect that the bidding shall be subject to the right
of the government to reject any and all bids subject to its discretion. In the case at
bar, the government has made its choice and unless an unfairness or injustice is
shown, the losing bidders have no cause to complain nor right to dispute that
choice. This is a well-settled doctrine in this jurisdiction and elsewhere."
The discretion to accept or reject a bid and award contracts is vested in the Government
agencies entrusted with that function. The discretion given to the authorities on this
matter is of such wide latitude that the Courts will not interfere therewith, unless it is
apparent that it is used as a shield to a fraudulent award (Jalandoni v. NARRA, 108 Phil.
486 [1960]). x x x The exercise of this discretion is a policy decision that necessitates
prior inquiry, investigation, comparison, evaluation, and deliberation. This task can best
be discharged by the Government agencies concerned, not by the Courts. The role of the
Courts is to ascertain whether a branch or instrumentality of the Government has
transgressed its constitutional boundaries. But the Courts will not interfere with
executive or legislative discretion exercised within those boundaries. Otherwise, it strays
into the realm of policy decision-making.
It is only upon a clear showing of grave abuse of discretion that the Courts will set aside
the award of a contract made by a government entity. Grave abuse of discretion implies a
capricious, arbitrary and whimsical exercise of power (Filinvest Credit Corp. v.
Intermediate Appellate Court, No. 65935, 30 September 1988, 166 SCRA 155). The abuse
of discretion must be so patent and gross as to amount to an evasion of positive duty or
to a virtual refusal to perform a duty enjoined by law, as to act at all in contemplation of
law, where the power is exercised in an arbitrary and despotic manner by reason of
passion or hostility (Litton Mills, Inc. v. Galleon Trader, Inc., et al[.], L-40867, 26 July
1988, 163 SCRA 489).
The facts in this case do not indicate any such grave abuse of discretion on the part of
public respondents when they awarded the CISS contract to Respondent SGS. In the
"Invitation to Prequalify and Bid" (Annex "C," supra), the CISS Committee made an
express reservation of the right of the Government to "reject any or all bids or any
part thereof or waive any defects contained thereon and accept an offer most
advantageous to the Government." It is a well-settled rule that where such
reservation is made in an Invitation to Bid, the highest or lowest bidder, as the
case may be, is not entitled to an award as a matter of right (C & C Commercial Corp.
v. Menor, L-28360, 27 January 1983, 120 SCRA 112). Even the lowest Bid or any Bid may
be rejected or, in the exercise of sound discretion, the award may be made to another
than the lowest bidder (A.C. Esguerra & Sons v. Aytona, supra, citing 43 Am. Jur., 788).
(emphases supplied)
Like the condition in the Bureau Veritas case, the right to top was a condition imposed
by the government in the bidding rules which was made known to all parties. It was a
condition imposed on all bidders equally, based on the APTs exercise of its
discretion in deciding on how best to privatize the governments shares in PHILSECO.
It was not a whimsical or arbitrary condition plucked from the ether and inserted in the
bidding rules but a condition which the APT approved as the best way the government
could comply with its contractual obligations to KAWASAKI under the JVA and its mandate
of getting the most advantageous deal for the government. The right to top had its history
in the mutual right of first refusal in the JVA and was reached by agreement of the
government and KAWASAKI.
Further, there is no executive interference in the functions of this Court by the mere
filing of a memorandum by Secretary of Finance Jose Isidro Camacho. The memorandum
was merely noted to acknowledge its filing. It had no further legal significance. Notably
too, the assailed Resolution dated September 24, 2003 was decided unanimously by
the Special First Division in favor of the respondents.
Again, we emphasize that a decision or resolution of a Division is that of the Supreme
Court[20] and the Court en banc is not an appellate court to which decisions or resolutions
of a Division may be appealed.[21]
For all the foregoing reasons, we find no basis to elevate this case to the Court en
banc.
Motion for Reconsideration
Three principal arguments were raised in the petitioners Motion for
Reconsideration. First, that a fair resolution of the case should be based on contract law,
not on policy considerations; the contracts do not authorize the right to top to be derived
from the right of first refusal.[22] Second, that neither the right of first refusal nor the right
to top can be legally exercised by the consortium which is not the proper party granted
such right under either the JVA or the Asset Specific Bidding Rules (ASBR).[23] Third, that
the maintenance of the 60%-40% relationship between the National Investment and
Development Corporation (NIDC) and KAWASAKI arises from contract and from the
Constitution because PHILSECO is a landholding corporation and need not be a public
utility to be bound by the 60%-40% constitutional limitation.[24]
 On the other hand, private respondent PHILYARDS asserts that J.G. Summit has not 1. The award by the APT of 87.67% shares of PHILSECO to PHILYARDS with losing
been able to show compelling reasons to warrant a reconsideration of the Decision of the bidders through the exercise of a right to top, which is contrary to law and the
Court.[25] PHILYARDS denies that the Decision is based mainly on policy considerations constitution is null and void for being violative of substantive due process and
and points out that it is premised on principles governing obligations and contracts and the abuse of right provision in the Civil Code.
corporate law such as the rule requiring respect for contractual stipulations, upholding
rights of first refusal, and recognizing the assignable nature of contracts rights.[26] Also, the a. The bidders[] right to top was actually exercised by losing bidders.
ruling that shipyards are not public utilities relies on established case law and
fundamental rules of statutory construction. PHILYARDS stresses that KAWASAKIs right
of first refusal or even the right to top is not limited to the 40% equity of the latter. [27] On b. The right to top or the right of first refusal cannot co-exist with a genuine
the landholding issue raised by J.G. Summit, PHILYARDS emphasizes that this is a non- competitive bidding.
issue and even involves a question of fact. Even assuming that this Court can take
cognizance of such question of fact even without the benefit of a trial, PHILYARDS opines c. The benefits derived from the right to top were unwarranted.
that landholding by PHILSECO at the time of the bidding is irrelevant because what is
essential is that ultimately a qualified entity would eventually hold PHILSECOs real estate 2. The landholding issue has been a legitimate issue since the start of this case but
properties.[28] Further, given the assignable nature of the right of first refusal, any is shamelessly ignored by the respondents.
applicable nationality restrictions, including landholding limitations, would not affect the
right of first refusal itself, but only the manner of its exercise.[29] Also, PHILYARDS argues
that if this Court takes cognizance of J.G. Summits allegations of fact regarding PHILSECOs a. The landholding issue is not a non-issue.
landholding, it must also recognize PHILYARDS assertions that PHILSECOs landholdings
were sold to another corporation.[30] As regards the right of first refusal, private b. The landholding issue does not pose questions of fact.
respondent explains that KAWASAKIs reduced shareholdings (from 40% to 2.59%) did
not translate to a deprivation or loss of its contractually granted right of first c. That PHILSECO owned land at the time that the right of first refusal was
refusal.[31] Also, the bidding was valid because PHILYARDS exercised the right to top and agreed upon and at the time of the bidding are most relevant.
it was of no moment that losing bidders later joined PHILYARDS in raising the purchase
price.[32]
d. Whether a shipyard is a public utility is not the core issue in this case.
In cadence with the private respondent PHILYARDS, public respondents COP and
APT contend: 3. Fraud and bad faith attend the alleged conversion of an inexistent right of first
1. The conversion of the right of first refusal into a right to top by 5% does not violate refusal to the right to top.
any provision in the JVA between NIDC and KAWASAKI.
a. The history behind the birth of the right to top shows fraud and bad faith.
2. PHILSECO is not a public utility and therefore not governed by the constitutional
restriction on foreign ownership.
b. The right of first refusal was, indeed, effectively useless.
3. The petitioner is legally estopped from assailing the validity of the proceedings of
the public bidding as it voluntarily submitted itself to the terms of the ASBR which 4. Petitioner is not legally estopped to challenge the right to top in this case.
included the provision on the right to top.
4. The right to top was exercised by PHILYARDS as the nominee of KAWASAKI and a. Estoppel is unavailing as it would stamp validity to an act that is prohibited
the fact that PHILYARDS formed a consortium to raise the required amount to exercise the by law or against public policy.
right to top the highest bid by 5% does not violate the JVA or the ASBR.
b. Deception was patent; the right to top was an attractive nuisance.
5. The 60%-40% Filipino-foreign constitutional requirement for the acquisition of
lands does not apply to PHILSECO because as admitted by petitioner itself, PHILSECO no
longer owns real property. c. The 10% bid deposit was placed in escrow.

6. Petitioners motion to elevate the case to the Court en banc is baseless and would
only delay the termination of this case.[33]
In a Consolidated Comment dated March 8, 2004, J.G. Summit countered the
arguments of the public and private respondents in this wise:
J.G. Summits insistence that the right to top cannot be sourced from the right of first
refusal is not new and we have already ruled on the issue in our Resolution of September
24, 2003. We upheld the mutual right of first refusal in the JVA.[34] We also ruled that
nothing in the JVA prevents KAWASAKI from acquiring more than 40% of PHILSECOs total
capitalization.[35]Likewise, nothing in the JVA or ASBR bars the conversion of the right of
first refusal to the right to top. In sum, nothing new and of significance in the petitioners
pleading warrants a reconsideration of our ruling.
Likewise, we already disposed of the argument that neither the right of first refusal
nor the right to top can legally be exercised by the consortium which is not the proper
party granted such right under either the JVA or the ASBR. Thus, we held:
The fact that the losing bidder, Keppel Consortium (composed of Keppel, SM Group,
Insular Life Assurance, Mitsui and ICTSI), has joined PHILYARDS in the latter's effort to
raise P2.131 billion necessary in exercising the right to top is not contrary to law, public
policy or public morals. There is nothing in the ASBR that bars the losing bidders from
joining either the winning bidder (should the right to top is not exercised) or
KAWASAKI/PHI (should it exercise its right to top as it did), to raise the purchase price.
The petitioner did not allege, nor was it shown by competent evidence, that the
participation of the losing bidders in the public bidding was done with fraudulent intent.
Absent any proof of fraud, the formation by [PHILYARDS] of a consortium is legitimate in
a free enterprise system. The appellate court is thus correct in holding the petitioner
estopped from questioning the validity of the transfer of the National Government's
shares in PHILSECO to respondent.[36]
Further, we see no inherent illegality on PHILYARDS act in seeking funding from
parties who were losing bidders. This is a purely commercial decision over which the State
should not interfere absent any legal infirmity. It is emphasized that the case at bar
involves the disposition of shares in a corporation which the government sought to
privatize. As such, the persons with whom PHILYARDS desired to enter into business with
in order to raise funds to purchase the shares are basically its business. This is in contrast
to a case involving a contract for the operation of or construction of a government
infrastructure where the identity of the buyer/bidder or financier constitutes an
important consideration. In such cases, the government would have to take utmost
precaution to protect public interest by ensuring that the parties with which it is
contracting have the ability to satisfactorily construct or operate the infrastructure.
On the landholding issue, J.G. Summit submits that since PHILSECO is a landholding
company, KAWASAKI could exercise its right of first refusal only up to 40% of the shares
of PHILSECO due to the constitutional prohibition on landholding by corporations with
more than 40% foreign-owned equity. It further argues that since KAWASAKI already held
at least 40% equity in PHILSECO, the right of first refusal was inutile and as such, could
not subsequently be converted into the right to top. [37] Petitioner also asserts that, at
present, PHILSECO continues to violate the constitutional provision on landholdings as its
shares are more than 40% foreign-owned.[38] PHILYARDS admits that it may have
previously held land but had already divested such landholdings.[39] It contends, however,
that even if PHILSECO owned land, this would not affect the right of first refusal but only
the exercise thereof. If the land is retained, the right of first refusal, being a property right,
could be assigned to a qualified party. In the alternative, the land could be divested before
the exercise of the right of first refusal. In the case at bar, respondents assert that since the
right of first refusal was validly converted into a right to top, which was exercised not by
KAWASAKI, but by PHILYARDS which is a Filipino corporation (i.e., 60% of its shares are
owned by Filipinos), then there is no violation of the Constitution.[40] At first, it would seem
that questions of fact beyond cognizance by this Court were involved in the issue.
However, the records show that PHILYARDS admits it had owned land up until the
time of the bidding.[41] Hence, the only issue is whether KAWASAKI had a valid right
of first refusal over PHILSECO shares under the JVA considering that PHILSECO
owned land until the time of the bidding and KAWASAKI already held 40% of
PHILSECOs equity.
We uphold the validity of the mutual rights of first refusal under the JVA between
KAWASAKI and NIDC. First of all, the right of first refusal is a property right of PHILSECO
shareholders, KAWASAKI and NIDC, under the terms of their JVA. This right allows them
to purchase the shares of their co-shareholder before they are offered to a third party. The
agreement of co-shareholders to mutually grant this right to each other, by itself,
does not constitute a violation of the provisions of the Constitution limiting land
ownership to Filipinos and Filipino corporations. As PHILYARDS correctly puts it, if
PHILSECO still owns land, the right of first refusal can be validly assigned to a qualified
Filipino entity in order to maintain the 60%-40% ratio. This transfer, by itself, does not
amount to a violation of the Anti-Dummy Laws, absent proof of any fraudulent intent. The
transfer could be made either to a nominee or such other party which the holder of the
right of first refusal feels it can comfortably do business with. Alternatively, PHILSECO may
divest of its landholdings, in which case KAWASAKI, in exercising its right of first refusal,
can exceed 40% of PHILSECOs equity. In fact, it can even be said that if the foreign
shareholdings of a landholding corporation exceeds 40%, it is not the foreign
stockholders ownership of the shares which is adversely affected but the capacity
of the corporation to own land that is, the corporation becomes disqualified to own land.
This finds support under the basic corporate law principle that the corporation and its
stockholders are separate juridical entities. In this vein, the right of first refusal over
shares pertains to the shareholders whereas the capacity to own land pertains to the
corporation. Hence, the fact that PHILSECO owns land cannot deprive stockholders of their
right of first refusal. No law disqualifies a person from purchasing shares in a
landholding corporation even if the latter will exceed the allowed foreign equity,
what the law disqualifies is the corporation from owning land. This is the clear import
of the following provisions in the Constitution:
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. The State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose capital
is owned by such citizens. Such agreements may be for a period not exceeding twenty-
five years, renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
xxx xxx xxx
Section 7. Save in cases of hereditary succession, no private lands shall be transferred
or conveyed except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.[42] (emphases supplied)
 The petitioner further argues that an option to buy land is void in itself (Philippine such, the Court cannot resolve the questions they pose. Second, J.G. Summit misreads the
Banking Corporation v. Lui She, 21 SCRA 52 [1967]). The right of first refusal granted to provisions of the Constitution cited in its own pleadings, to wit:
KAWASAKI, a Japanese corporation, is similarly void. Hence, the right to top, sourced from
the right of first refusal, is also void.[43] Contrary to the contention of petitioner, the case 29.2 Petitioner has consistently pointed out in the past that private respondent is not a
of Lui She did not that say an option to buy land is void in itself, for we ruled as follows: 60%-40% corporation, and this violates the Constitution x x x The violation continues to
this day because under the law, it continues to own real property
x x x To be sure, a lease to an alien for a reasonable period is valid. So is an option
giving an alien the right to buy real property on condition that he is granted xxx xxx xxx
Philippine citizenship. As this Court said in Krivenko vs. Register of Deeds:
32. To review the constitutional provisions involved, Section 14, Article XIV of the 1973
[A]liens are not completely excluded by the Constitution from the use of lands for Constitution (the JVA was signed in 1977), provided:
residential purposes. Since their residence in the Philippines is temporary, they may be
granted temporary rights such as a lease contract which is not forbidden by the
Constitution. Should they desire to remain here forever and share our fortunes and Save in cases of hereditary succession, no private lands shall be transferred or
misfortunes, Filipino citizenship is not impossible to acquire. conveyed except to individuals, corporations, or associations qualified to acquire or hold
lands of the public domain.
But if an alien is given not only a lease of, but also an option to buy, a piece of land,
by virtue of which the Filipino owner cannot sell or otherwise dispose of his 32.1 This provision is the same as Section 7, Article XII of the 1987 Constitution.
property, this to last for 50 years, then it becomes clear that the arrangement is a
virtual transfer of ownership whereby the owner divests himself in stages not only 32.2 Under the Public Land Act, corporations qualified to acquire or hold lands of the
of the right to enjoy the land (jus possidendi, jus utendi, jus fruendi and jus public domain are corporations at least 60% of which is owned by Filipino citizens (Sec.
abutendi) but also of the right to dispose of it (jus disponendi) rights the sum total 22, Commonwealth Act 141, as amended). (emphases supplied)
of which make up ownership. It is just as if today the possession is transferred,
tomorrow, the use, the next day, the disposition, and so on, until ultimately all the As correctly observed by the public respondents, the prohibition in the Constitution
rights of which ownership is made up are consolidated in an alien. And yet this is just applies only to ownership of land.[48] It does not extend to immovable or real property
exactly what the parties in this case did within this pace of one year, with the result that as defined under Article 415 of the Civil Code. Otherwise, we would have a strange
Justina Santos'[s] ownership of her property was reduced to a hollow concept. If this can situation where the ownership of immovable property such as trees, plants and growing
be done, then the Constitutional ban against alien landholding in the Philippines, as fruit attached to the land[49] would be limited to Filipinos and Filipino corporations only.
announced in Krivenko vs. Register of Deeds, is indeed in grave peril.[44] (emphases
supplied; Citations omitted)
III.
In Lui She, the option to buy was invalidated because it amounted to a virtual transfer of
ownership as the owner could not sell or dispose of his properties. The contract in Lui WHEREFORE, in view of the foregoing, the petitioners Motion for Reconsideration
Sheprohibited the owner of the land from selling, donating, mortgaging, or encumbering is DENIED WITH FINALITY and the decision appealed from is AFFIRMED. The Motion to
the property during the 50-year period of the option to buy. This is not so in the case at Elevate This Case to the Court En Banc is likewise DENIED for lack of merit.
bar where the mutual right of first refusal in favor of NIDC and KAWASAKI does not SO ORDERED.
amount to a virtual transfer of land to a non-Filipino. In fact, the case at bar involves a right
of first refusal over shares of stock while the Lui She case involves an option to buy
the land itself. As discussed earlier, there is a distinction between the shareholders
ownership of shares and the corporations ownership of land arising from the separate
juridical personalities of the corporation and its shareholders.
We note that in its Motion for Reconsideration, J.G. Summit alleges that PHILSECO
continues to violate the Constitution as its foreign equity is above 40% and yet owns long-
term leasehold rights which are real rights.[45] It cites Article 415 of the Civil Code
which includes in the definition of immovable property, contracts for public works, and
servitudes and other real rights over immovable property. [46] Any existing landholding,
however, is denied by PHILYARDS citing its recent financial statements.[47] First, these are
questions of fact, the veracity of which would require introduction of evidence. The Court
needs to validate these factual allegations based on competent and reliable evidence. As
G.R. No. L-6776 May 21, 1955
THE REGISTER OF DEEDS OF RIZAL, petitioner-appellee,
vs.
UNG SIU SI TEMPLE, respondent-appellant.
Alejo F. Candido for appellant.
Office of the Solicitor General Querube C. Makalintal and Solicitor Felix V. Makasiar for
appellee.
REYES, J.B.L., J.:
The Register of Deeds for the province of Rizal refused to accept for record a deed of
donation executed in due form on January 22, 1953, by Jesus Dy, a Filipino citizen,
conveying a parcel of residential land, in Caloocan, Rizal, known as lot No. 2, block 48-D,
PSD-4212, G.L.R.O. Record No. 11267, in favor of the unregistered religious organization
"Ung Siu Si Temple", operating through three trustees all of Chinese nationality. The
donation was duly accepted by Yu Juan, of Chinese nationality, founder and deaconess of
the Temple, acting in representation and in behalf of the latter and its trustees.
The refusal of the Registrar was elevated en Consultato the IVth Branch of the Court of
First Instance of Manila. On March 14, 1953, the Court upheld the action of the Rizal
Register of Deeds, saying:
The question raised by the Register of Deeds in the above transcribed consulta
is whether a deed of donation of a parcel of land executed in favor of a religious
organization whose founder, trustees and administrator are Chinese citizens
should be registered or not.
It appearing from the record of the Consulta that UNG SIU SI TEMPLE is a
religious organization whose deaconess, founder, trustees and administrator
are all Chinese citizens, this Court is of the opinion and so hold that in view of
the provisions of the sections 1 and 5 of Article XIII of the Constitution of the
Philippines limiting the acquisition of land in the Philippines to its citizens, or
to corporations or associations at least sixty per centum of the capital stock of
which is owned by such citizens adopted after the enactment of said Act No.
271, and the decision of the Supreme Court in the case of Krivenko vs. the
Register of Deeds of Manila, the deed of donation in question should not be
admitted for admitted for registration. (Printed Rec. App. pp 17-18).
Not satisfied with the ruling of the Court of First Instance, counsel for the donee Uy Siu Si
Temple has appealed to this Court, claiming: (1) that the acquisition of the land in
question, for religious purposes, is authorized and permitted by Act No. 271 of the old
Philippine Commission, providing as follows:
SECTION 1. It shall be lawful for all religious associations, of whatever sort or
denomination, whether incorporated in the Philippine Islands or in the name of
other country, or not incorporated at all, to hold land in the Philippine Islands
upon which to build churches, parsonages, or educational or charitable
institutions.
SEC. 2. Such religious institutions, if not incorporated, shall hold the land in the
name of three Trustees for the use of such associations; . . .. (Printed Rec. App. p.
5.)
and (2) that the refusal of the Register of Deeds violates the freedom of religion clause of
our Constitution [Art. III, Sec. 1(7)].
We are of the opinion that the Court below has correctly held that in view of the absolute
terms of section 5, Title XIII, of the Constitution, the provisions of Act No. 271 of the old
Philippine Commission must be deemed repealed since the Constitution was enacted, in
so far as incompatible therewith. In providing that, —
Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations or associations
qualified to acquire or hold lands of the public domain in the Philippines,
the Constitution makes no exception in favor of religious associations. Neither is there
any such saving found in sections 1 and 2 of Article XIII, restricting the acquisition of
public agricultural lands and other natural resources to "corporations or associations at
least sixty per centum of the capital of which is owned by such citizens" (of the
Philippines).
The fact that the appellant religious organization has no capital stock does not suffice to
escape the Constitutional inhibition, since it is admitted that its members are of foreign
nationality. The purpose of the sixty per centum requirement is obviously to ensure that
corporations or associations allowed to acquire agricultural land or to exploit natural
resources shall be controlled by Filipinos; and the spirit of the Constitution demands that
in the absence of capital stock, the controlling membership should be composed of
Filipino citizens.
To permit religious associations controlled by non-Filipinos to acquire agricultural lands
would be to drive the opening wedge to revive alien religious land holdings in this
country. We can not ignore the historical fact that complaints against land holdings of
that kind were among the factors that sparked the revolution of 1896.
As to the complaint that the disqualification under article XIII is violative of the freedom
of religion guaranteed by Article III of the Constitution, we are by no means convinced
(nor has it been shown) that land tenure is indispensable to the free exercise and
enjoyment of religious profession or worship; or that one may not worship the Deity
according to the dictates of his own conscience unless upon land held in fee simple.
The resolution appealed from is affirmed, with costs against appellant.
REPUBLIC OF THE PHILIPPINES, G.R. No. 154953
Petitioner,
Present:
PUNO, C.J., Chairperson,
CARPIO,
- versus - CORONA,
AZCUNA, and
LEONARDO-DE CASTRO, JJ.
T.A.N. PROPERTIES, INC., Promulgated:
Respondent. June 26, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 21 August 2002 Decision[2] of the
Court of Appeals in CA-G.R. CV No. 66658. The Court of Appeals affirmed in totothe 16
December 1999 Decision[3] of the Regional Trial Court of Tanauan, Batangas, Branch 6
(trial court) in Land Registration Case No. T-635.
The Antecedent Facts
This case originated from an Application for Original Registration of Title filed by T.A.N.
Properties, Inc. covering Lot 10705-B of the subdivision plan Csd-04-019741 which is a
portion of the consolidated Lot 10705, Cad-424, Sto. Tomas Cadastre. The land, with an
area of 564,007 square meters, or 56.4007 hectares, is located at San Bartolome, Sto.
Tomas, Batangas.
On 31 August 1999, the trial court set the case for initial hearing at 9:30 a.m. on 11
November 1999. The Notice of Initial Hearing was published in the Official Gazette, 20
September 1999 issue, Volume 95, No. 38, pages 6793 to 6794,[4] and in the 18 October
1999 issue of Peoples Journal Taliba,[5] a newspaper of general circulation in
the Philippines. The Notice of Initial Hearing was also posted in a conspicuous place on the
bulletin board of the Municipal Building of Sto. Tomas, Batangas, as well as in a
conspicuous place on the land.[6] All adjoining owners and all government agencies and
offices concerned were notified of the initial hearing.[7]
On 11 November 1999, when the trial court called the case for initial hearing, there was
no oppositor other than the Opposition dated 7 October 1999 of the Republic of
the Philippines represented by the Director of Lands (petitioner). On 15 November 1999,
the trial court issued an Order[8] of General Default against the whole world except as
against petitioner.
During the hearing on 19 November 1999, Ceferino Carandang (Carandang) appeared as
oppositor. The trial court gave Carandang until 29 November 1999 within which to file his
written opposition.[9] Carandang failed to file his written opposition and to appear in the
succeeding hearings. In an Order[10] dated 13 December 1999, the trial court reinstated
the Order of General Default.
During the hearings conducted on 13 and 14 December 1999, respondent presented three
witnesses: Anthony Dimayuga Torres (Torres), respondents Operations Manager and its
authorized representative in the case; Primitivo Evangelista (Evangelista), a 72-year old
resident of San Bartolome, Sto. Tomas, Batangas since birth; and Regalado Marquez,
Records Officer II of the Land Registration Authority (LRA), Quezon City.
The testimonies of respondents witnesses showed that Prospero Dimayuga (Kabesang
Puroy) had peaceful, adverse, open, and continuous possession of the land in the concept
of an owner since 1942. Upon his death, Kabesang Puroy was succeeded by his son
Antonio Dimayuga (Antonio). On 27 September 1960, Antonio executed a Deed of
Donation covering the land in favor of one of his children, Fortunato Dimayuga
(Fortunato). Later, however, Antonio gave Fortunato another piece of land. Hence, on 26
April 1961, Antonio executed a Partial Revocation of Donation, and the land was
adjudicated to one of Antonios children, Prospero Dimayuga (Porting).[11] On 8 August
1997, Porting sold the land to respondent.
The Ruling of the Trial Court
In its 16 December 1999 Decision, the trial court adjudicated the land in favor of
respondent.
The trial court ruled that a juridical person or a corporation could apply for registration
of land provided such entity and its predecessors-in-interest have possessed the land for
30 years or more. The trial court ruled that the facts showed that respondents
predecessors-in-interest possessed the land in the concept of an owner prior to 12 June
1945, which possession converted the land to private property.
The dispositive portion of the trial courts Decision reads:
WHEREFORE, and upon previous confirmation of the Order of General
Default, the Court hereby adjudicates and decrees Lot 10705-B,
identical to Lot 13637, Cad-424, Sto. Tomas Cadastre, on plan Csd-04-
019741, situated in Barangay of San Bartolome, Municipality of Sto.
Tomas, Province of Batangas, with an area of 564,007 square meters, in
favor of and in the name of T.A.N. Properties, Inc., a domestic
corporation duly organized and existing under Philippine laws with
principal office at 19th Floor, PDCP Bank Building, 8737 Paseo de Roxas,
Makati City.
Once this Decision shall have become final, let the corresponding
decree of registration be issued.
SO ORDERED.[12]
Petitioner appealed from the trial courts Decision. Petitioner alleged that the trial court
erred in granting the application for registration absent clear evidence that the applicant
and its predecessors-in-interest have complied with the period of possession and
occupation as required by law. Petitioner alleged that the testimonies of Evangelista and
Torres are general in nature. Considering the area involved, petitioner argued that
additional witnesses should have been presented to corroborate Evangelistas testimony.

The Ruling of the Court of Appeals
In its 21 August 2002 Decision, the Court of Appeals affirmed in toto the trial courts
Decision.
The Court of Appeals ruled that Evangelistas knowledge of the possession and occupation
of the land stemmed not only from the fact that he worked there for three years but also
because he and Kabesang Puroy were practically neighbors. On Evangelistas failure to
mention the name of his uncle who continuously worked on the land, the Court of Appeals
ruled that Evangelista should not be faulted as he was not asked to name his uncle when
he testified. The Court of Appeals also ruled that at the outset, Evangelista disclaimed
knowledge of Fortunatos relation to Kabesang Puroy, but this did not affect Evangelistas
statement that Fortunato took over the possession and cultivation of the land after
Kabesang Puroys death. The Court of Appeals further ruled that the events regarding the
acquisition and disposition of the land became public knowledge because San Bartolome
was a small community. On the matter of additional witnesses, the Court of Appeals ruled
that petitioner failed to cite any law requiring the corroboration of the sole witness
testimony.
The Court of Appeals further ruled that Torres was a competent witness since he was only
testifying on the fact that he had caused the filing of the application for registration and
that respondent acquired the land from Porting.
Petitioner comes to this Court assailing the Court of Appeals Decision. Petitioner raises the
following grounds in its Memorandum:
The Court of Appeals erred on a question of law in allowing the grant
of title to applicant corporation despite the following:
1. Absence of showing that it or its predecessors-in-interest
had open, continuous, exclusive, and notorious possession
and occupation in the concept of an owner since 12 June
1945 or earlier; and
2. Disqualification of applicant corporation to acquire the
subject tract of land.[13]
The Issues
The issues may be summarized as follows:
1. Whether the land is alienable and disposable;
2. Whether respondent or its predecessors-in-interest had open, continuous,
exclusive, and notorious possession and occupation of the land in the
concept of an owner since June 1945 or earlier; and
3. Whether respondent is qualified to apply for registration of the land under
the Public Land Act.
The Ruling of this Court
The petition has merit.
Respondent Failed to Prove
that the Land is Alienable and Disposable
Petitioner argues that anyone who applies for registration has the burden of overcoming
the presumption that the land forms part of the public domain. Petitioner insists that
respondent failed to prove that the land is no longer part of the public domain.
The well-entrenched rule is that all lands not appearing to be clearly of private dominion
presumably belong to the State.[14] The onus to overturn, by incontrovertible evidence, the
presumption that the land subject of an application for registration is alienable and
disposable rests with the applicant.[15]
In this case, respondent submitted two certifications issued by the Department of
Environment and Natural Resources (DENR). The 3 June 1997 Certification by the
Community Environment and Natural Resources Offices
(CENRO), Batangas City,[16] certified that lot 10705, Cad-424, Sto. Tomas Cadastre situated
at Barangay San Bartolome, Sto. Tomas, Batangas with an area of 596,116 square meters
falls within the ALIENABLE AND DISPOSABLE ZONE under Project No. 30, Land
Classification Map No. 582 certified [on] 31 December 1925. The second certification[17] in
the form of a memorandum to the trial court, which was issued by the Regional Technical
Director, Forest Management Services of the DENR (FMS-DENR), stated that the subject
area falls within an alienable and disposable land, Project No. 30 of Sto. Tomas, Batangas
certified on Dec. 31, 1925 per LC No. 582.
The certifications are not sufficient. DENR Administrative Order (DAO) No.
20,[18] dated 30 May 1988, delineated the functions and authorities of the offices within
the DENR. Under DAO No. 20, series of 1988, the CENRO issues certificates of land
classification status for areas below 50 hectares. The Provincial Environment and Natural
Resources Offices (PENRO) issues certificate of land classification status for lands covering
over 50 hectares. DAO No. 38,[19] dated 19 April 1990, amended DAO No. 20, series of
1988.DAO No. 38, series of 1990 retained the authority of the CENRO to issue certificates
of land classification status for areas below 50 hectares, as well as the authority of the
PENRO to issue certificates of land classification status for lands covering over 50
hectares.[20] In this case, respondent applied for registration of Lot 10705-B. The area
covered by Lot 10705-B is over 50 hectares (564,007 square meters). The CENRO
certificate covered the entire Lot 10705 with an area of 596,116 square meters which, as
per DAO No. 38, series of 1990, is beyond the authority of the CENRO to certify as alienable
and disposable.
The Regional Technical Director, FMS-DENR, has no authority under DAO Nos. 20 and 38
to issue certificates of land classification. Under DAO No. 20, the Regional Technical
Director, FMS-DENR:
1. Issues original and renewal of ordinary minor products (OM) permits except
rattan;
2. Approves renewal of resaw/mini-sawmill permits;
3. Approves renewal of special use permits covering over five hectares for
public infrastructure projects; and
4. Issues renewal of certificates of registration for logs, poles, piles, and lumber
dealers.
Under DAO No. 38, the Regional Technical Director, FMS-DENR:
 1.Issues original and renewal of ordinary minor [products] (OM) permits except
rattan;
2. Issues renewal of certificate of registration for logs, poles, and piles and
lumber dealers;
3. Approves renewal of resaw/mini-sawmill permits;
4. Issues public gratuitous permits for 20 to 50 cubic meters within calamity
declared areas for public infrastructure projects; and
5. Approves original and renewal of special use permits covering over five
hectares for public infrastructure projects.
Hence, the certification issued by the Regional Technical Director, FMS-DENR, in the form
of a memorandum to the trial court, has no probative value.
Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and
disposable. The applicant for land registration must prove that the DENR Secretary had
approved the land classification and released the land of the public domain as alienable
and disposable, and that the land subject of the application for registration falls within the
approved area per verification through survey by the PENRO or CENRO. In addition, the
applicant for land registration must present a copy of the original classification approved
by the DENR Secretary and certified as a true copy by the legal custodian of the official
records. These facts must be established to prove that the land is alienable and
disposable. Respondent failed to do so because the certifications presented by respondent
do not, by themselves, prove that the land is alienable and disposable.
Only Torres, respondents Operations Manager, identified the certifications submitted by
respondent. The government officials who issued the certifications were not presented
before the trial court to testify on their contents. The trial court should not have accepted
the contents of the certifications as proof of the facts stated therein. Even if the
certifications are presumed duly issued and admissible in evidence, they have no
probative value in establishing that the land is alienable and disposable.
Public documents are defined under Section 19, Rule 132 of the Revised Rules on Evidence
as follows:
(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country;
(b) Documents acknowledged before a notary public except last wills
and testaments; and
(c) Public records, kept in the Philippines, of private documents
required by law to be entered therein.
Applying Section 24 of Rule 132, the record of public documents referred to in Section
19(a), when admissible for any purpose, may be evidenced by an official publication
thereof or by a copy attested by the officer having legal custody of the record, or by
his deputy x x x. The CENRO is not the official repository or legal custodian of the
issuances of the DENR Secretary declaring public lands as alienable and disposable. The
CENRO should have attached an official publication[21] of the DENR Secretarys issuance
declaring the land alienable and disposable.
Section 23, Rule 132 of the Revised Rules on Evidence provides:
Sec. 23. Public documents as evidence. Documents consisting of entries
in public records made in the performance of a duty by a public officer
are prima facie evidence of the facts stated therein. All other public
documents are evidence, even against a third person, of the fact which
gave rise to their execution and of the date of the latter.
The CENRO and Regional Technical Director, FMS-DENR, certifications do not fall within
the class of public documents contemplated in the first sentence of Section 23 of Rule
132. The certifications do not reflect entries in public records made in the performance of
a duty by a public officer, such as entries made by the Civil Registrar[22] in the books of
registries, or by a ship captain in the ships logbook.[23] The certifications are not the
certified copies or authenticated reproductions of original official records in the legal
custody of a government office. The certifications are not even records of public
documents.[24] The certifications are conclusions unsupported by adequate proof, and
thus have no probative value.[25] Certainly, the certifications cannot be considered prima
facie evidence of the facts stated therein.
The CENRO and Regional Technical Director, FMS-DENR, certifications do not prove
that Lot 10705-B falls within the alienable and disposable land as proclaimed by the DENR
Secretary. Such government certifications do not, by their mere issuance, prove the facts
stated therein.[26] Such government certifications may fall under the class of documents
contemplated in the second sentence of Section 23 of Rule 132. As such, the certifications
are prima facie evidence of their due execution and date of issuance but they do not
constitute prima facie evidence of the facts stated therein.
The Court has also ruled that a document or writing admitted as part of the testimony of a
witness does not constitute proof of the facts stated therein.[27] Here, Torres, a private
individual and respondents representative, identified the certifications but the
government officials who issued the certifications did not testify on the contents of the
certifications. As such, the certifications cannot be given probative value.[28] The contents
of the certifications are hearsay because Torres was incompetent to testify on the veracity
of the contents of the certifications.[29] Torres did not prepare the certifications, he was
not an officer of CENRO or FMS-DENR, and he did not conduct any verification survey
whether the land falls within the area classified by the DENR Secretary as alienable and
disposable.
Petitioner also points out the discrepancy as to when the land allegedly became alienable
and disposable. The DENR Secretary certified that based on Land Classification Map No.
582, the land became alienable and disposable on 31 December 1925. However, the
certificate on the blue print plan states that it became alienable and disposable on 31
December 1985.
We agree with petitioner that while the certifications submitted by respondent show that
under the Land Classification Map No. 582, the land became alienable and disposable
on 31 December 1925, the blue print plan states that it became alienable and disposable
on 31 December 1985. Respondent alleged that the blue print plan merely serves to prove
the precise location and the metes and bounds of the land described therein x x x and does
not in any way certify the nature and classification of the land involved.[30] It is true that
the notation by a surveyor-geodetic engineer on the survey plan that the land formed part
of the alienable and disposable land of the public domain is not sufficient proof of the lands
classification.[31] However, respondent should have at least presented proof that would
explain the discrepancy in the dates of classification. Marquez, LRA Records Officer II,
testified that the documents submitted to the court consisting of the tracing cloth plan, the
technical description of Lot 10705-B, the approved subdivision plan, and the Geodetic
Engineers certification were faithful reproductions of the original documents in the LRA
office. He did not explain the discrepancy in the dates. Neither was the Geodetic Engineer
presented to explain why the date of classification on the blue print plan was different
from the other certifications submitted by respondent.
There was No Open, Continuous, Exclusive, and Notorious
Possession and Occupation in the Concept of an Owner
Petitioner alleges that the trial courts reliance on the testimonies of Evangelista and
Torres was misplaced. Petitioner alleges that Evangelistas statement that the possession
of respondents predecessors-in-interest was open, public, continuous, peaceful, and
adverse to the whole world was a general conclusion of law rather than factual evidence
of possession of title. Petitioner alleges that respondent failed to establish that its
predecessors-in-interest had held the land openly, continuously, and exclusively for at
least 30 years after it was declared alienable and disposable.
We agree with petitioner.
Evangelista testified that Kabesang Puroy had been in possession of the land before
1945. Yet, Evangelista only worked on the land for three years. Evangelista testified that
his family owned a lot near Kabesang Puroys land. The Court of Appeals took note of this
and ruled that Evangelistas knowledge of Kabesang Puroys possession of the land
stemmed not only from the fact that he had worked thereat but more so that they were
practically neighbors.[32] The Court of Appeals observed:
In a small community such as that of San Bartolome, Sto. Tomas,
Batangas, it is not difficult to understand that people in the said
community knows each and everyone. And, because of such familiarity
with each other, news or events regarding the acquisition or disposition
for that matter, of a vast tract of land spreads like wildfire, thus, the
reason why such an event became of public knowledge to them.[33]
Evangelista testified that Kabesang Puroy was succeeded by Fortunato. However, he
admitted that he did not know the exact relationship between Kabesang Puroy and
Fortunato, which is rather unusual for neighbors in a small community. He did not also
know the relationship between Fortunato and Porting. In fact, Evangelistas testimony is
contrary to the factual finding of the trial court that Kabesang Puroy was succeeded by his
son Antonio, not by Fortunato who was one of Antonios children. Antonio was not even
mentioned in Evangelistas testimony.
The Court of Appeals ruled that there is no law that requires that the testimony of a single
witness needs corroboration. However, in this case, we find Evangelistas uncorroborated
testimony insufficient to prove that respondents predecessors-in-interest had been in
possession of the land in the concept of an owner for more than 30 years. We cannot
consider the testimony of Torres as sufficient corroboration. Torres testified primarily on
the fact of respondents acquisition of the land. While he claimed to be related to the
Dimayugas, his knowledge of their possession of the land was hearsay. He did not even tell
the trial court where he obtained his information.
The tax declarations presented were only for the years starting 1955. While tax
declarations are not conclusive evidence of ownership, they constitute proof of claim of
ownership.[34] Respondent did not present any credible explanation why the realty taxes
were only paid starting 1955 considering the claim that the Dimayugas were allegedly in
possession of the land before 1945. The payment of the realty taxes starting 1955 gives
rise to the presumption that the Dimayugas claimed ownership or possession of the land
only in that year.
Land Application by a Corporation
Petitioner asserts that respondent, a private corporation, cannot apply for registration of
the land of the public domain in this case.
We agree with petitioner.
Section 3, Article XII of the 1987 Constitution provides:
Sec. 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 classified by law according to the uses to
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.
The 1987 Constitution absolutely prohibits private corporations from acquiring any kind
of alienable land of the public domain. In Chavez v. Public Estates Authority,[35] the Court
traced the law on disposition of lands of the public domain. Under the 1935 Constitution,
there was no prohibition against private corporations from acquiring agricultural
land. The 1973 Constitution limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Under the 1973 Constitution, private
corporations, even if wholly owned by Filipino citizens, were no longer allowed to acquire
alienable lands of the public domain. The present 1987 Constitution continues the
prohibition against private corporations from acquiring any kind of alienable land of the
public domain.[36] The Court explained in Chavez:
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. x x x x
[I]f 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.
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.[37]
In Director of Lands v. IAC,[38] the Court allowed the land registration proceeding filed by
Acme Plywood & Veneer Co., Inc. (Acme) for five parcels of land with an area of 481,390
square meters, or 48.139 hectares, which Acme acquired from members of the Dumagat
tribe. The issue in that case was whether the title could be confirmed in favor of Acme
when the proceeding was instituted after the effectivity of the 1973 Constitution which
prohibited private corporations or associations from holding alienable lands of the public
domain except by lease not to exceed 1,000 hectares. The Court ruled that the land was
already private land when Acme acquired it from its owners in 1962, and thus Acme
acquired a registrable title. Under the 1935 Constitution, private corporations could
acquire public agricultural lands not exceeding 1,024 hectares while individuals could
acquire not more than 144 hectares.[39]
In Director of Lands, the Court further ruled that open, exclusive, and undisputed
possession of alienable land for the period prescribed by law created 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. The
Court ruled:
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 that the possessor(s)
x x x shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a
certificate of title x x x. 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 effected by operation of law from
the moment the required period of possession became complete.
x x x [A]lienable public land held by a possessor, personally or through
his predecessors-in-interest, openly, continuously and exclusively for
the prescribed statutory period of (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 corporations holding or
owning private land. x x x.[40] (Emphasis supplied)
Director of Lands is not applicable to the present case. In Director of Lands, the land x x x
was already private property at the time it was acquired x x x by Acme. In this case,
respondent acquired the land on 8 August 1997 from Porting, who, along with his
predecessors-in-interest, has not shown to have been, as of that date, in open, continuous,
and adverse possession of the land for 30 years since 12 June 1945. In short, when
respondent acquired the land from Porting, the land was not yet private property.
For Director of Lands to apply and enable a corporation to file for registration of alienable
and disposable land, the corporation must have acquired the land when its transferor had
already a vested right to a judicial confirmation of title to the land by virtue of his open,
continuous and adverse possession of the land in the concept of an owner for at least 30
years since 12 June 1945. Thus, in Natividad v. Court of Appeals,[41] the Court declared:
Under the facts of this case and pursuant to the above rulings, the
parcels of land in question had already been converted to private
 ownership through acquisitive prescription by the predecessors-in- land had already become private land by operation of law. In the present case, respondent
interest of TCMC when the latter purchased them in 1979. All that was has failed to prove that any portion of the land was already private land when respondent
needed was the confirmation of the titles of the previous owners or acquired it from Porting in 1997.
predecessors-in-interest of TCMC.
WHEREFORE, we SET ASIDE the 21 August 2002 Decision of the Court of Appeals in CA-
Being already private land when TCMC bought them in 1979, the G.R. CV No. 66658 and the 16 December 1999 Decision of the Regional Trial Court of
prohibition in the 1973 Constitution against corporations acquiring Tanauan, Batangas, Branch 6 in Land Registration Case No. T-635. We DENY the
alienable lands of the public domain except through lease (Article XIV, application for registration filed by T.A.N. Properties, Inc.
Section 11, 1973 Constitution) did not apply to them for they were no
longer alienable lands of the public domain but private property. SO ORDERED.
What is determinative for the doctrine in Director of Lands to apply is for the corporate
applicant for land registration to establish that when it acquired the land, the same was
already private land by operation of law because the statutory acquisitive prescriptive
period of 30 years had already lapsed. The length of possession of the land by the
corporation cannot be tacked on to complete the statutory 30 years acquisitive
prescriptive period. Only an individual can avail of such acquisitive prescription since
both the 1973 and 1987 Constitutions prohibit corporations from acquiring lands of the
public domain.

Admittedly, a corporation can at present still apply for original registration of land under
the doctrine in Director of Lands. Republic Act No. 9176[42] (RA 9176) further amended
the Public Land Act[43] and extended the period for the filing of applications for judicial
confirmation of imperfect and incomplete titles to alienable and disposable lands of the
public domain until 31 December 2020. Thus:

Sec. 2. Section 47, Chapter VIII of the same Act, as amended, is hereby
further amended to read as follows:

Sec. 47. The persons specified in the next following section are
hereby granted time, not to extend beyond December 31, 2020
within which to avail of the benefits of this Chapter: Provided, That
this period shall apply only where the area applied for does not
exceed twelve (12) hectares: Provided, further, That the several
periods of time designated by the President in accordance with
Section Forty-five of this Act shall apply also to the lands comprised
in the provisions of this Chapter, but this Section shall not be
construed as prohibiting any of said persons from acting under this
Chapter at any time prior to the period fixed by the President.

Sec. 3. All pending applications filed before the effectivity of this

amendatory Act shall be treated as having been filed in accordance with
the provisions of this Act.
Under RA 9176, the application for judicial confirmation is limited only to 12 hectares,
consistent with Section 3, Article XII of the 1987 Constitution that a private individual may
only acquire not more than 12 hectares of alienable and disposable land. Hence,
respondent, as successor-in-interest of an individual owner of the land, cannot apply for
registration of land in excess of 12 hectares. Since respondent applied for 56.4007
hectares, the application for the excess area of 44.4007 hectares is contrary to law, and
thus void ab initio. In applying for land registration, a private corporation cannot have any
right higher than its predecessor-in-interest from whom it derived its right. This assumes,
of course, that the corporation acquired the land, not exceeding 12 hectares, when the
G.R. No. L-8451 December 20, 1957
THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO, INC., petitioner,
vs.
THE LAND REGISTRATION COMMISSION and THE REGISTER OF DEEDS OF DAVAO
CITY, respondents.
FELIX, J.:
This is a petition for mandamus filed by the Roman Catholic Apostolic Administrator of
Davao seeking the reversal of a resolution by the Land Registration Commissioner in
L.R.C. Consulta No. 14. The facts of the case are as follows:
On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao,
executed a deed of sale of a parcel of land located in the same city covered by Transfer
Certificate No. 2263, in favor of the Roman Catholic Apostolic Administrator of Davao
Inc., s corporation sole organized and existing in accordance with Philippine Laws, with
Msgr. Clovis Thibault, a Canadian citizen, as actual incumbent. When the deed of sale was
presented to Register of Deeds of Davao for registration, the latter.
having in mind a previous resolution of the Fourth Branch of the Court of First
Instance of Manila wherein the Carmelite Nuns of Davao were made to prepare
an affidavit to the effect that 60 per cent of the members of their corporation
were Filipino citizens when they sought to register in favor of their
congregation of deed of donation of a parcel of land—
required said corporation sole to submit a similar affidavit declaring that 60 per cent of
the members thereof were Filipino citizens.
The vendee in the letter dated June 28, 1954, expressed willingness to submit an
affidavit, both not in the same tenor as that made the Progress of the Carmelite Nuns
because the two cases were not similar, for whereas the congregation of the Carmelite
Nuns had five incorporators, the corporation sole has only one; that according to their
articles of incorporation, the organization of the Carmelite Nuns became the owner of
properties donated to it, whereas the case at bar, the totality of the Catholic population of
Davao would become the owner of the property bought to be registered.
As the Register of Deeds entertained some doubts as to the registerability if the
document, the matter was referred to the Land Registration Commissioner en
consulta for resolution in accordance with section 4 of Republic Act No. 1151. Proper
hearing on the matter was conducted by the Commissioner and after the petitioner
corporation had filed its memorandum, a resolution was rendered on September 21,
1954, holding that in view of the provisions of Section 1 and 5 of Article XIII of the
Philippine Constitution, the vendee was not qualified to acquire private lands in the
Philippines in the absence of proof that at least 60 per centum of the capital, property, or
assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was actually owned
or controlled by Filipino citizens, there being no question that the present incumbent of
the corporation sole was a Canadian citizen. It was also the opinion of the Land
Registration Commissioner that section 159 of the corporation Law relied upon by the
vendee was rendered operative by the aforementioned provisions of the Constitution
with respect to real estate, unless the precise condition set therein — that at least 60 per
cent of its capital is owned by Filipino citizens — be present, and, therefore, ordered the
Registered Deeds of Davao to deny registration of the deed of sale in the absence of proof
of compliance with such condition.
After the motion to reconsider said resolution was denied, an action for mandamus was
instituted with this Court by said corporation sole, alleging that under the Corporation
Law as well as the settled jurisprudence on the matter, the deed of sale executed by
Mateo L. Rodis in favor of petitioner is actually a deed of sale in favor of the Catholic
Church which is qualified to acquire private agricultural lands for the establishment and
maintenance of places of worship, and prayed that judgment be rendered reserving and
setting aside the resolution of the Land Registration Commissioner in question. In its
resolution of November 15, 1954, this Court gave due course to this petition providing
that the procedure prescribed for appeals from the Public Service Commission of the
Securities and Exchange Commissions (Rule 43), be followed.
Section 5 of Article XIII of the Philippine Constitution reads as follows:
SEC. 5. Save in cases of hereditary succession, no private agricultural land shall
be transferred or assigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain in the
Philippines.
Section 1 of the same Article also provides the following:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, water,
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 cititzens 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
CONSTITUTION. Natural resources, with the exception of public agricultural land, shall
not be alienated, and no license, concession, or leases 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 other than the development and limit of the grant.
In virtue of the foregoing mandates of the Constitution, who are considered "qualified" to
acquire and hold agricultural lands in the Philippines? What is the effect of these
constitutional prohibition of the right of a religious corporation recognized by our
Corporation Law and registered as a corporation sole, to possess, acquire and register
real estates in its name when the Head, Manager, Administrator or actual incumbent is
an alien?
Petitioner consistently maintained that a corporation sole, irrespective of the citizenship
of its incumbent, is not prohibited or disqualified to acquire and hold real properties. The
Corporation Law and the Canon Law are explicit in their provisions that a corporation
sole or "ordinary" is not the owner of the of the properties that he may acquire but
merely the administrator thereof. The Canon Law also specified that church
temporalities are owned by the Catholic Church as a "moral person" or by the diocess as
minor "moral persons" with the ordinary or bishop as administrator.
And elaborating on the composition of the Catholic Church in the Philippines, petitioner
explained that as a religious society or organization, it is made up of 2 elements or
divisions — the clergy or religious members and the faithful or lay members. The 1948
figures of the Bureau of Census showed that there were 277,551 Catholics in Davao and
aliens residing therein numbered 3,465. Ever granting that all these foreigners are
Catholics, petitioner contends that Filipino citizens form more than 80 per cent of the
entire Catholics population of that area. As to its clergy and religious composition,
counsel for petitioner presented the Catholic Directory of the Philippines for 1954
(Annex A) which revealed that as of that year, Filipino clergy and women novices
comprise already 60.5 per cent of the group. It was, therefore, allowed that the
constitutional requirement was fully met and satisfied.
Respondents, on the other hand, averred that although it might be true that petitioner is
not the owner of the land purchased, yet he has control over the same, with full power to
administer, take possession of, alienate, transfer, encumber, sell or dispose of any or all
lands and their improvements registered in the name of the corporation sole and can
collect, receive, demand or sue for all money or values of any kind that may be kind that
may become due or owing to said corporation, and vested with authority to enter into
agreements with any persons, concerns or entities in connection with said real
properties, or in other words, actually exercising all rights of ownership over the
properties. It was their stand that the theory that properties registered in the name of
the corporation sole are held in true for the benefit of the Catholic population of a place,
as of Davao in the case at bar should be sustained because a conglomeration of persons
cannot just be pointed out as the cestui que trust or recipient of the benefits from the
property allegedly administered in their behalf. Neither can it be said that the mass of
people referred to as such beneficiary exercise ant right of ownership over the same.
This set-up, respondents argued, falls short of a trust. The respondents instead tried to
prove that in reality, the beneficiary of ecclesiastical properties are not members or
faithful of the church but someone else, by quoting a portion a portion of the ought of
fidelity subscribed by a bishop upon his elevation to the episcopacy wherein he promises
to render to the Pontificial Father or his successors an account of his pastoral office and
of all things appertaining to the state of this church.
Respondents likewise advanced the opinion that in construing the constitutional
provision calling for 60 per cent of Filipino citizenship, the criterion of the properties or
assets thereof.
In solving the problem thus submitted to our consideration, We can say the following: A
corporation sole is a special form of corporation usually associated with the clergy.
Conceived and introduced into the common law by sheer necessity, this legal creation
which was referred to as "that unhappy freak of English law" was designed to facilitate
the exercise of the functions of ownership carried on by the clerics for and on behalf of
the church which was regarded as the property owner (See I Couvier's Law Dictionary, p.
682-683).
A corporation sole consists of one person only, and his successors (who will always be
one at a time), in some particular station, who are incorporated by law in order to give
them some legal capacities and advantages, particularly that of perpetuity, which in their
natural persons they could not have had. In this sense, the king is a sole corporation; so is
a bishop, or dens, distinct from their several chapters (Reid vs. Barry, 93 Fla. 849, 112 So.
846).
The provisions of our Corporation law on religious corporations are illuminating and
sustain the stand of petitioner. Section 154 thereof provides:
SEC. 154. — For the administration of the temporalities of any religious
denomination, society or church and the management of the estates and the
properties thereof, it shall be lawful for the bishop, chief priest, or presiding
either of any such religious denomination, society or church to become a
corporation sole, unless inconsistent wit the rules, regulations or discipline of
his religious denomination, society or church or forbidden by competent
authority thereof.
See also the pertinent provisions of the succeeding sections of the same Corporation Law
copied hereunder:
SEC. 155. In order to become a corporation sole the bishop, chief priest, or
presiding elder of any religious denomination, society or church must file with
the Securities and Exchange Commissioner articles of incorporation setting
forth the following facts:
xxx xxx xxx.
(3) That as such bishop, chief priest, or presiding elder he is charged with the
administration of the temporalities and the management of the estates and
properties of his religious denomination, society, or church within its territorial
jurisdiction, describing it;
xxx xxx xxx.
(As amended by Commonwealth Act No. 287).
SEC. 157. From and after the filing with the Securities and Exchange
Commissioner of the said articles of incorporation, which verified by affidavit
or affirmation as aforesaid and accompanied by the copy of the commission,
certificate of election, or letters of appointment of the bishop, chief priest, or
presiding elder, duly certified as prescribed in the section immediately
preceding such the bishop, chief priest, or presiding elder, as the case may be,
 shall become a corporation sole and all temporalities, estates, and properties the
religious denomination, society, or church therefore administered or managed by
him as such bishop, chief priest, or presiding elder, shall be held in trust by him as
a corporation sole, for the use, purpose, behalf, and sole benefit of his religious
denomination, society, or church, including hospitals, schools, colleges, orphan,
asylums, parsonages, and cemeteries thereof. For the filing of such articles of
incorporation, the Securities and Exchange Commissioner shall collect twenty-
five pesos. (As amended by Commonwealth Act. No. 287); and.
SEC. 163. The right to administer all temporalities and all property held or
owned by a religious order or society, or by the diocese, synod, or district
organization of any religious denomination or church shall, on its
incorporation, pass to the corporation and shall be held in trust for the use,
purpose behalf, and benefit of the religious society, or order so incorporated or
of the church of which the diocese, or district organization is an organized and
constituent part.
The Cannon Law contains similar provisions regarding the duties of the corporation sole
or ordinary as administrator of the church properties, as follows:
Al Ordinario local pertenence vigilar diligentemente sobre la administracion de
todos los bienes eclesiasticos que se hallan en su territorio y no estuvieren
sustraidos de su jurisdiccion, salvs las prescriciones legitimas que le concedan
mas aamplios derechos.
Teniendo en cuenta los derechos y las legitimas costumbres y circunstancias,
procuraran los Ordinarios regular todo lo concerniente a la administracion de
los bienes eclesciasticos, dando las oportunas instucciones particularles dentro
del narco del derecho comun. (Title XXVIII, Codigo de Derecho Canonico, Lib.
III, Canon 1519).1
That leaves no room for doubt that the bishops or archbishops, as the case may be, as
corporation's sole are merely administrators of the church properties that come to their
possession, in which they hold in trust for the church. It can also be said that while it is
true that church properties could be administered by a natural persons, problems
regarding succession to said properties can not be avoided to rise upon his death.
Through this legal fiction, however, church properties acquired by the incumbent of a
corporation sole pass, by operation of law, upon his death not his personal heirs but to
his successor in office. It could be seen, therefore, that a corporation sole is created not
only to administer the temporalities of the church or religious society where he belongs
but also to hold and transmit the same to his successor in said office. If the ownership or
title to the properties do not pass to the administrators, who are the owners of church
properties?.
Bouscaren and Elis, S.J., authorities on cannon law, on their treatise comment:
In matters regarding property belonging to the Universal Church and to the
Apostolic See, the Supreme Pontiff exercises his office of supreme
administrator through the Roman Curia; in matters regarding other church
property, through the administrators of the individual moral persons in the
Church according to that norms, laid down in the Code of Cannon Law. This does
not mean, however, that the Roman Pontiff is the owner of all the church
property; but merely that he is the supreme guardian (Bouscaren and Ellis,
Cannon Law, A Text and Commentary, p. 764).
and this Court, citing Campes y Pulido, Legislacion y Jurisprudencia Canonica, ruled in
the case of Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil. 881, that:
The second question to be decided is in whom the ownership of the properties
constituting the endowment of the ecclesiastical or collative chaplaincies is
vested.
Canonists entertain different opinions as to the persons in whom the
ownership of the ecclesiastical properties is vested, with respect to which we
shall, for our purpose, confine ourselves to stating with Donoso that, while
many doctors cited by Fagnano believe that it resides in the Roman Pontiff as
Head of the Universal Church, it is more probable that ownership, strictly
speaking, does not reside in the latter, and, consequently, ecclesiastical
properties are owned by the churches, institutions and canonically established
private corporations to which said properties have been donated.
Considering that nowhere can We find any provision conferring ownership of church
properties on the Pope although he appears to be the supreme administrator or guardian
of his flock, nor on the corporation sole or heads of dioceses as they are admittedly
mere administrators of said properties, ownership of these temporalities logically fall
and develop upon the church, diocese or congregation acquiring the same. Although this
question of ownership of ecclesiastical properties has off and on been mentioned in
several decisions of the Court yet in no instance was the subject of citizenship of this
religious society been passed upon.
We are not unaware of the opinion expressed by the late Justice Perfecto in his dissent in
the case of Agustines vs. Court of First Instance of Bulacan, 80 Phil. 565, to the effect that
"the Roman Catholic Archbishop of Manila is only a branch of a universal church by the
Pope, with permanent residence in Rome, Italy". There is no question that the Roman
Catholic Church existing in the Philippines is a tributary and part of the international
religious organization, for the word "Roman" clearly expresses its unity with and
recognizes the authority of the Pope in Rome. However, lest We become hasty in drawing
conclusions, We have to analyze and take note of the nature of the government
established in the Vatican City, of which it was said:
GOVERNMENT. In the Roman Catholic Church supreme authority and
jurisdiction over clergy and laity alike as held by the pope who (since the
Middle Ages) is elected by the cardinals assembled in conclave, and holds office
until his death or legitimate abdication. . . While the pope is obviously
independent of the laws made, and the officials appointed, by himself or his
predecessors, he usually exercises his administrative authority according to the
code of canon law and through the congregations, tribunals and offices of the
 Curia Romana. In their respective territories (called generally dioceses) and
over their respective subjects, the patriarchs, metropolitans or archbishops and
bishops exercise a jurisdiction which is called ordinary (as attached by law to
an office given to a person. . . (Collier's Encyclopedia, Vol. 17, p. 93).
While it is true and We have to concede that in the profession of their faith, the Roman
Pontiff is the supreme head; that in the religious matters, in the exercise of their belief,
the Catholic congregation of the faithful throughout the world seeks the guidance and
direction of their Spiritual Father in the Vatican, yet it cannot be said that there is a
merger of personalities resultant therein. Neither can it be said that the political and civil
rights of the faithful, inherent or acquired under the laws of their country, are affected by
that relationship with the Pope. The fact that the Roman Catholic Church in almost every
country springs from that society that saw its beginning in Europe and the fact that the
clergy of this faith derive their authorities and receive orders from the Holy See do not
give or bestow the citizenship of the Pope upon these branches. Citizenship is a political
right which cannot be acquired by a sort of "radiation". We have to realize that although
there is a fraternity among all the catholic countries and the dioceses therein all over the
globe, the universality that the word "catholic" implies, merely characterize their faith, a
uniformity in the practice and the interpretation of their dogma and in the exercise of
their belief, but certainly they are separate and independent from one another in
jurisdiction, governed by different laws under which they are incorporated, and entirely
independent on the others in the management and ownership of their temporalities. To
allow theory that the Roman Catholic Churches all over the world follow the citizenship
of their Supreme Head, the Pontifical Father, would lead to the absurdity of finding the
citizens of a country who embrace the Catholic faith and become members of that
religious society, likewise citizens of the Vatican or of Italy. And this is more so if We
consider that the Pope himself may be an Italian or national of any other country of the
world. The same thing be said with regard to the nationality or citizenship of the
corporation sole created under the laws of the Philippines, which is not altered by the
change of citizenship of the incumbent bishops or head of said corporation sole.
We must therefore, declare that although a branch of the Universal Roman Catholic
Apostolic Church, every Roman Catholic Church in different countries, if it exercises its
mission and is lawfully incorporated in accordance with the laws of the country where it
is located, is considered an entity or person with all the rights and privileges granted to
such artificial being under the laws of that country, separate and distinct from the
personality of the Roman Pontiff or the Holy See, without prejudice to its religious
relations with the latter which are governed by the Canon Law or their rules and
regulations.
We certainly are conscious of the fact that whatever conclusion We may draw on this
matter will have a far reaching influence, nor can We overlook the pages of history that
arouse indignation and criticisms against church landholdings. This nurtured feeling that
snowbailed into a strong nationalistic sentiment manifested itself when the provisions
on natural to be embodied in the Philippine Constitution were framed, but all that has
been said on this regard referred more particularly to landholdings of religious
corporations known as "Friar Estates" which have already bee acquired by our
government, and not to properties held by corporations sole which, We repeat, are
properties held in trust for the benefit of the faithful residing within its territorial
jurisdiction. Though that same feeling probably precipitated and influenced to a large
extent the doctrine laid down in the celebrated Krivenco decision, We have to take this
matter in the light of legal provisions and jurisprudence actually obtaining, irrespective
of sentiments.
The question now left for our determination is whether the Universal Roman Catholic
Apostolic Church in the Philippines, or better still, the corporation sole named the
Roman Catholic Apostolic Administrator of Davao, Inc., is qualified to acquire private
agricultural lands in the Philippines pursuant to the provisions of Article XIII of the
Constitution.
We see from sections 1 and 5 of said Article quoted before, that only persons or
corporations qualified to acquire hold lands of the public domain in the Philippines may
acquire or be assigned and hold private agricultural lands. Consequently, the decisive
factor in the present controversy hinges on the proposition or whether or not the
petitioner in this case can acquire agricultural lands of the public domain.
From the data secured from the Securities and Exchange Commission, We find that the
Roman Catholic Bishop of Zamboanga was incorporated (as a corporation sole)
in September, 1912, principally to administer its temporalities and manage its properties.
Probably due to the ravages of the last war, its articles of incorporation
were reconstructed in the Securities and Exchange Commission on April 8, 1948. At first,
this corporation sole administered all the temporalities of the church existing or located
in the island of Mindanao. Later on, however, new dioceses were formed and new
corporations sole were created to correspond with the territorial jurisdiction of the new
dioceses, one of them being petitioner herein, the Roman Catholic Apostolic
Administrator of Davao, Inc., which was registered with the Securities and Exchange
Commission on September 12, 1950, and succeeded in the administrative for all the
"temporalities" of the Roman Catholic Church existing in Davao.
According to our Corporation Law, Public Act No. 1549, approved April 1, 1906, a
corporation sole.
is organized and composed of a single individual, the head of any religious
society or church, for the ADMINISTRATION of the temporalities of such society
or church. By "temporalities" is meant estate and properties not used
exclusively for religious worship. The successor in office of such religious head
or chief priest incorporated as a corporation sole shall become the corporation
sole on ascension to office, and shall be permitted to transact business as such
on filing with the Securities and Exchange Commission a copy of his
commission, certificate of election or letter of appointment duly certified by any
notary public or clerk of court of record (Guevara's The Philippine Corporation
Law, p. 223).
The Corporation Law also contains the following provisions:
SECTION 159. Any corporation sole may purchase and hold real estate and
personal; property for its church, charitable, benevolent, or educational
purposes, and may receive bequests or gifts of such purposes. Such corporation
 may mortgage or sell real property held by it upon obtaining an order for that
purpose from the Court of First Instance of the province in which the property
is situated; but before making the order proof must be made to the satisfaction
of the Court that notice of the application for leave to mortgage or sell has been
given by publication or otherwise in such manner and for such time as said
Court or the Judge thereof may have directed, and that it is to the interest of the
corporation that leave to mortgage or sell must be made by petition, duly
verified by the bishop, chief priest, or presiding elder acting as corporation sole,
and may be opposed by any member of the religious denomination, society or
church represented by the corporation sole: Provided, however, That in cases
where the rules, regulations, and discipline of the religious denomination,
society or church concerned represented by such corporation sole regulate the
methods of acquiring, holding, selling and mortgaging real estate and personal
property, such rules, regulations, and discipline shall control and the
intervention of the Courts shall not be necessary.
It can, therefore, be noticed that the power of a corporation sole to purchase real
property, like the power exercised in the case at bar, it is not restricted although the
power to sell or mortgage sometimes is, depending upon the rules, regulations, and
discipline of the church concerned represented by said corporation sole. If corporations
sole can purchase and sell real estate for its church, charitable, benevolent, or
educational purposes, can they register said real properties? As provided by law, lands
held in trust for specific purposes me be subject of registration (section 69, Act 496), and
the capacity of a corporation sole, like petitioner herein, to register lands belonging to it
is acknowledged, and title thereto may be issued in its name (Bishop of Nueva Segovia vs.
Insular Government, 26 Phil. 300-1913). Indeed it is absurd that while the corporations
sole that might be in need of acquiring lands for the erection of temples where the
faithful can pray, or schools and cemeteries which they are expressly authorized by law
to acquire in connection with the propagation of the Roman Catholic Apostolic faith or in
furtherance of their freedom of religion they could not register said properties in their
name. As professor Javier J. Nepomuceno very well says "Man in his search for the
immortal and imponderable, has, even before the dawn of recorded history, erected
temples to the Unknown God, and there is no doubt that he will continue to do so for all
time to come, as long as he continues 'imploring the aid of Divine Providence'"
(Nepomuceno's Corporation Sole, VI Ateneo Law Journal, No. 1, p. 41, September, 1956).
Under the circumstances of this case, We might safely state that even before the
establishment of the Philippine Commonwealth and of the Republic of the Philippines
every corporation sole then organized and registered had by express provision of law the
necessary power and qualification to purchase in its name private lands located in the
territory in which it exercised its functions or ministry and for which it was created,
independently of the nationality of its incumbent unique and single member and head,
the bishop of the dioceses. It can be also maintained without fear of being gainsaid that
the Roman Catholic Apostolic Church in the Philippines has no nationality and that the
framers of the Constitution, as will be hereunder explained, did not have in mind the
religious corporations sole when they provided that 60 per centum of the capital thereof
be owned by Filipino citizens.
There could be no controversy as to the fact that a duly registered corporation sole is an
artificial being having the right of succession and the power, attributes, and properties
expressly authorized by law or incident to its existence (section 1, Corporation Law). In
outlining the general powers of a corporation. Public Act. No. 1459 provides among
others:
SEC. 13. Every corporation has the power:
(5) To purchase, hold, convey, sell, lease, lot, mortgage, encumber, and
otherwise deal with such real and personal property as the purpose for which
the corporation was formed may permit, and the transaction of the lawful
business of the corporation may reasonably and necessarily require, unless
otherwise prescribed in this Act: . . .
In implementation of the same and specially made applicable to a form of corporation
recognized by the same law, Section 159 aforequoted expressly allowed the corporation
sole to purchase and hold real as well as personal properties necessary for the
promotion of the objects for which said corporation sole is created. Respondent Land
Registration Commissioner, however, maintained that since the Philippine Constitution
is a later enactment than public Act No. 1459, the provisions of Section 159 in
amplification of Section 13 thereof, as regard real properties, should be considered
repealed by the former.
There is a reason to believe that when the specific provision of the Constitution invoked
by respondent Commissioner was under consideration, the framers of the same did not
have in mind or overlooked this particular form of corporation. It is undeniable that the
naturalization and conservation of our national resources was one of the dominating
objectives of the Convention and in drafting the present Article XII of the Constitution,
the delegates were goaded by the desire (1) to insure their conservation for Filipino
posterity; (2) to serve as an instrument of national defense, helping prevent the
extension into the country of foreign control through peaceful economic penetration; and
(3) to prevent making the Philippines a source of international conflicts with the
consequent danger to its internal security and independence (See The Framing of the
Philippine Constitution by Professor Jose M. Aruego, a Delegate to the Constitutional
Convention, Vol. II. P. 592-604). In the same book Delegate Aruego, explaining the reason
behind the first consideration, wrote:
At the time of the framing of Philippine Constitution, Filipino capital had been
to be rather shy. Filipinos hesitated s a general rule to invest a considerable
sum of their capital for the development, exploitation and utilization of the
natural resources of the country. They had not as yet been so used to corporate
as the peoples of the west. This general apathy, the delegates knew, would
mean the retardation of the development of the natural resources, unless
foreign capital would be encouraged to come and help in that
development. They knew that the naturalization of the natural resources would
certainly not encourage the INVESTMENT OF FOREIGN CAPITAL into them. But
there was a general feeling in the Convention that it was better to have such a
development retarded or even postpone together until such time when the
Filipinos would be ready and willing to undertake it rather than permit the
natural resources to be placed under the ownership or control of foreigners in
order that they might be immediately be developed, with the Filipinos of the
future serving not as owners but utmost as tenants or workers under foreign
 masters. By all means, the delegates believed, the natural resources should be
conserved for Filipino posterity.
It could be distilled from the foregoing that the farmers of the Constitution intended said
provisions as barrier for foreigners or corporations financed by such foreigners to
acquire, exploit and develop our natural resources, saving these undeveloped wealth for
our people to clear and enrich when they are already prepared and capable of doing so.
But that is not the case of corporations sole in the Philippines, for, We repeat, they are
mere administrators of the "temporalities" or properties titled in their name and for the
benefit of the members of their respective religion composed of an overwhelming
majority of Filipinos. No mention nor allusion whatsoever is made in the Constitution as
to the prohibition against or the liability of the Roman Catholic Church in the Philippines
to acquire and hold agricultural lands. Although there were some discussions on
landholdings, they were mostly confined in the inclusion of the provision allowing the
Government to break big landed estates to put an end to absentee landlordism.
But let us suppose, for the sake of argument, that the above referred to inhibitory clause
of Section 1 of Article XIII of the constitution does have bearing on the petitioner's case;
even so the clause requiring that at least 60 per centum of the capital of the corporation
be owned by Filipinos is subordinated to the petitioner's aforesaid right already existing
at the time of the inauguration of the Commonwealth and the Republic of the Philippines.
In the language of Mr. Justice Jose P. Laurel (a delegate to the Constitutional Convention),
in his concurring opinion of the case of Gold Creek mining Corporation, petitioner vs.
Eulogio Rodriguez, Secretary of Agriculture and Commerce, and Quirico Abadilla,
Director of the Bureau of Mines, respondent, 66 Phil. 259:
The saving clause in the section involved of the Constitution was originally
embodied in the report submitted by the Committee on Naturalization and
Preservation of Land and Other Natural Resources to the Constitutional
Convention on September 17, 1954. It was later inserted in the first draft of the
Constitution as section 13 of Article XIII thereof, and finally incorporated as we
find it now. Slight have been the changes undergone by the proviso from the
time when it comes out of the committee until it was finally adopted. When first
submitted and as inserted to the first draft of the Constitution it reads: 'subject
to any right, grant, lease, or concession existing in respect thereto on the date of
the adoption of the Constitution'. As finally adopted, the proviso reads: 'subject
to any existing right, grant, lease, or concession at the time of the inauguration
of the Government established under this Constitution'. This recognition is not
mere graciousness but springs form the just character of the government
established. The framers of the Constitution were not obscured by the rhetoric
of democracy or swayed to hostility by an intense spirit of nationalism. They
well knew that conservation of our natural resources did not mean destruction
or annihilation of acquired property rights. Withal, they erected a government
neither episodic nor stationary but well-nigh conservative in the protection of
property rights. This notwithstanding nationalistic and socialistic traits
discoverable upon even a sudden dip into a variety of the provisions embodied
in the instrument.
The writer of this decision wishes to state at this juncture that during the deliberation of
this case he submitted to the consideration of the Court the question that may be termed
the "vested right saving clause" contained in Section 1, Article XII of the Constitution, but
some of the members of this Court either did not agree with the theory of the writer, or
were not ready to take a definite stand on the particular point I am now to discuss
deferring our ruling on such debatable question for a better occasion, inasmuch as the
determination thereof is not absolutely necessary for the solution of the problem
involved in this case. In his desire to face the issues squarely, the writer will endeavor, at
least as a disgression, to explain and develop his theory, not as a lucubration of the Court,
but of his own, for he deems it better and convenient to go over the cycle of reasons that
are linked to one another and that step by step lead Us to conclude as We do in the
dispositive part of this decision.
It will be noticed that Section 1 of Article XIII of the Constitution provides, among other
things, that "all agricultural lands of the public domain and their disposition shall be
limited to citizens of the Philippines or to corporations at least 60 per centum of the
capital of which is owned by such citizens, SUBJECT TO ANY EXISTING RIGHT AT THE
TIME OF THE INAUGURATION OF THE GOVERNMENT ESTABLISHED UNDER THIS
CONSTITUTION."
As recounted by Mr. Justice Laurel in the aforementioned case of Gold Creek Mining
Corporation vs. Rodriguez et al., 66 Phil. 259, "this recognition (in the clause already
quoted), is not mere graciousness but springs from the just character of the government
established. The farmers of the Constitution were not obscured by the rhetoric of
democracy or swayed to hostility by an intense spirit of nationalism. They well knew that
conservation of our natural resources did not mean destruction or annihilation
of ACQUIRED PROPERTY RIGHTS".
But respondents' counsel may argue that the preexisting right of acquisition of public or
private lands by a corporation which does not fulfill this 60 per cent requisite, refers to
purchases of the Constitution and not to later transactions. This argument would imply
that even assuming that petitioner had at the time of the enactment of the Constitution
the right to purchase real property or right could not be exercised after the effectivity of
our Constitution, because said power or right of corporations sole, like the herein
petitioner, conferred in virtue of the aforequoted provisions of the Corporation Law,
could no longer be exercised in view of the requisite therein prescribed that at least 60
per centum of the capital of the corporation had to be Filipino. It has been shown before
that: (1) the corporation sole, unlike the ordinary corporations which are formed by no
less than 5 incorporators, is composed of only one persons, usually the head or bishop of
the diocese, a unit which is not subject to expansion for the purpose of determining any
percentage whatsoever; (2) the corporation sole is only the administrator and not the
owner of the temporalities located in the territory comprised by said corporation sole;
(3) such temporalities are administered for and on behalf of the faithful residing in the
diocese or territory of the corporation sole; and (4) the latter, as such, has no nationality
and the citizenship of the incumbent Ordinary has nothing to do with the operation,
management or administration of the corporation sole, nor effects the citizenship of the
faithful connected with their respective dioceses or corporation sole.
In view of these peculiarities of the corporation sole, it would seem obvious that when
the specific provision of the Constitution invoked by respondent Commissioner (section
1, Art. XIII), was under consideration, the framers of the same did not have in mind or
overlooked this particular form of corporation. If this were so, as the facts and
circumstances already indicated tend to prove it to be so, then the inescapable
conclusion would be that this requirement of at least 60 per cent of Filipino capital was
never intended to apply to corporations sole, and the existence or not a vested right
becomes unquestionably immaterial.
But let us assumed that the questioned proviso is material. yet We might say that a
reading of said Section 1 will show that it does not refer to any actual acquisition of land
up to the right, qualification or power to acquire and hold private real property. The
population of the Philippines, Catholic to a high percentage, is ever increasing. In the
practice of religion of their faithful the corporation sole may be in need of more temples
where to pray, more schools where the children of the congregation could be taught in
the principles of their religion, more hospitals where their sick could be treated, more
hallow or consecrated grounds or cemeteries where Catholics could be buried, many
more than those actually existing at the time of the enactment of our Constitution. This
being the case, could it be logically maintained that because the corporation sole which,
by express provision of law, has the power to hold and acquire real estate and personal
property of its churches, charitable benevolent, or educational purposes (section 159,
Corporation Law) it has to stop its growth and restrain its necessities just because the
corporation sole is a non-stock corporation composed of only one person who in his
unity does not admit of any percentage, especially when that person is not the owner but
merely an administrator of the temporalities of the corporation sole? The writer leaves
the answer to whoever may read and consider this portion of the decision.
Anyway, as stated before, this question is not a decisive factor in disposing the case, for
even if We were to disregard such saving clause of the Constitution, which reads: subject
to any existing right, grant, etc., at the same time of the inauguration of the Government
established under this Constitution, yet We would have, under the evidence on record,
sufficient grounds to uphold petitioner's contention on this matter.
In this case of the Register of Deeds of Rizal vs. Ung Sui Si Temple, 2 G.R. No. L-6776,
promulgated May 21, 1955, wherein this question was considered from a different angle,
this Court through Mr. Justice J.B.L. Reyes, said:
The fact that the appellant religious organization has no capital stock does not
suffice to escape the Constitutional inhibition, since it is admitted that its
members are of foreign nationality. The purpose of the sixty per centum
requirement is obviously to ensure that corporation or associations allowed to
acquire agricultural land or to exploit natural resources shall be controlled by
Filipinos; and the spirit of the Constitution demands that in the absence of
capital stock, the controlling membership should be composed of Filipino citizens.
In that case respondent-appellant Ung Siu Si Temple was not a corporation sole but a
corporation aggregate, i.e., an unregistered organization operating through 3 trustees, all
of Chinese nationality, and that is why this Court laid down the doctrine just quoted.
With regard to petitioner, which likewise is a non-stock corporation, the case is different,
because it is a registered corporation sole, evidently of no nationality and registered
mainly to administer the temporalities and manage the properties belonging to the
faithful of said church residing in Davao. But even if we were to go over the record to
inquire into the composing membership to determine whether the citizenship
requirement is satisfied or not, we would find undeniable proof that the members of the
Roman Catholic Apostolic faith within the territory of Davao are predominantly Filipino
citizens. As indicated before, petitioner has presented evidence to establish that the
clergy and lay members of this religion fully covers the percentage of Filipino citizens
required by the Constitution. These facts are not controverted by respondents and our
conclusion in this point is sensibly obvious.
Dissenting Opinion—Discussed. — After having developed our theory in the case and
arrived at the findings and conclusions already expressed in this decision. We now deem
it proper to analyze and delve into the basic foundation on which the dissenting opinion
stands up. Being aware of the transcendental and far-reaching effects that Our ruling on
the matter might have, this case was thoroughly considered from all points of view, the
Court sparing no effort to solve the delicate problems involved herein.
At the deliberations had to attain this end, two ways were open to a prompt dispatch of
the case: (1) the reversal of the doctrine We laid down in the celebrated Krivenko case by
excluding urban lots and properties from the group of the term "private agricultural
lands" use in this section 5, Article XIII of the Constitution; and (2) by driving Our
reasons to a point that might indirectly cause the appointment of Filipino bishops or
Ordinary to head the corporations sole created to administer the temporalities of the
Roman Catholic Church in the Philippines. With regard to the first way, a great majority
of the members of this Court were not yet prepared nor agreeable to follow that course,
for reasons that are obvious. As to the second way, it seems to be misleading because the
nationality of the head of a diocese constituted as a corporation sole has no material
bearing on the functions of the latter, which are limited to the administration of the
temporalities of the Roman Catholic Apostolic Church in the Philippines.
Upon going over the grounds on which the dissenting opinion is based, it may be noticed
that its author lingered on the outskirts of the issues, thus throwing the main points in
controversy out of focus. Of course We fully agree, as stated by Professor Aruego, that the
framers of our Constitution had at heart to insure the conservation of the natural
resources of Our motherland of Filipino posterity; to serve them as an instrument of
national defense, helping prevent the extension into the country of foreign
control through peaceful economic penetration; and to prevent making the Philippines a
source of international conflicts with the consequent danger to its internal security and
independence. But all these precautions adopted by the Delegates to Our Constitutional
Assembly could have not been intended for or directed against cases like the one at bar.
The emphasis and wonderings on the statement that once the capacity of a corporation
sole to acquire private agricultural lands is admitted there will be no limit to the areas
that it may hold and that this will pave the way for the "revival or revitalization of
religious landholdings that proved so troublesome in our past", cannot even furnish the
"penumbra" of a threat to the future of the Filipino people. In the first place, the right of
Filipino citizens, including those of foreign extraction, and Philippine corporations, to
acquire private lands is not subject to any restriction or limit as to quantity or area, and
We certainly do not see any wrong in that. The right of Filipino citizens and corporations
to acquire public agricultural lands is already limited by law. In the second place,
corporations sole cannot be considered as aliens because they have no nationality at all.
Corporations sole are, under the law, mere administrators of the temporalities of the
Roman Catholic Church in the Philippines. In the third place, every corporation, be it
aggregate or sole, is only entitled to purchase, convey, sell, lease, let, mortgage, encumber
and otherwise deal with real properties when it is pursuant to or in consonance with the
purposes for which the corporation was formed, and when the transactions of the lawful
business of the corporation reasonably and necessarily require such dealing — section
13-(5) of the Corporation Law, Public Act No. 1459 — and considering these provisions
in conjunction with Section 159 of the same law which provides that a corporation sole
may only "purchase and hold real estate and personal properties for its church,
charitable, benevolent or educational purposes", the above mentioned fear of
revitalization of religious landholdings in the Philippines is absolutely dispelled. The fact
that the law thus expressly authorizes the corporations sole to receive bequests or gifts of
real properties (which were the main source that the friars had to acquire their big
haciendas during the Spanish regime), is a clear indication that the requisite that
bequests or gifts of real estate be for charitable, benevolent, or educational purposes,
was, in the opinion of the legislators, considered sufficient and adequate protection
against the revitalization of religious landholdings.
Finally, and as previously stated, We have reason to believe that when the Delegates to
the Constitutional Convention drafted and approved Article XIII of the Constitution they
do not have in mind the corporation sole. We come to this finding because the
Constitutional Assembly, composed as it was by a great number of eminent lawyers and
jurists, was like any other legislative body empowered to enact either the Constitution of
the country or any public statute, presumed to know the conditions existing as to
particular subject matter when it enacted a statute (Board of Commerce of Orange
Country vs. Bain, 92 S.E. 176; N. C. 377).
Immemorial customs are presumed to have been always in the mind of the
Legislature in enacting legislation. (In re Kruger's Estate, 121 A. 109; 277 P.
326).
The Legislative is presumed to have a knowledge of the state of the law on the
subjects upon which it legislates. (Clover Valley Land and Stock Co. vs. Lamb et
al., 187, p. 723,726.)
The Court in construing a statute, will assume that the legislature acted with
full knowledge of the prior legislation on the subject and its construction by the
courts. (Johns vs. Town of Sheridan, 89 N. E. 899, 44 Ind. App. 620.).
The Legislature is presumed to have been familiar with the subject with which
it was dealing . . . . (Landers vs. Commonwealth, 101 S. E. 778, 781.).
The Legislature is presumed to know principles of statutory construction.
(People vs. Lowell, 230 N. W. 202, 250 Mich. 349, followed in P. vs. Woodworth,
230 N.W. 211, 250 Mich. 436.).
It is not to be presumed that a provision was inserted in a constitution or
statute without reason, or that a result was intended inconsistent with the
judgment of men of common sense guided by reason" (Mitchell vs. Lawden, 123
N.E. 566, 288 Ill. 326.) See City of Decatur vs. German, 142 N. E. 252, 310 Ill.
591, and may other authorities that can be cited in support hereof.
Consequently, the Constitutional Assembly must have known:
1. That a corporation sole is organized by and composed of a single individual,
the head of any religious society or church operating within the zone, area or
jurisdiction covered by said corporation sole (Article 155, Public Act No. 1459);
2. That a corporation sole is a non-stock corporation;
3. That the Ordinary ( the corporation sole proper) does not own the
temporalities which he merely administers;
4. That under the law the nationality of said Ordinary or of any administrator
has absolutely no bearing on the nationality of the person desiring to acquire
real property in the Philippines by purchase or other lawful means other than
by hereditary succession, who according to the Constitution must be a Filipino
(sections 1 and 5, Article XIII).
5. That section 159 of the Corporation Law expressly authorized the corporation
sole to purchase and holdreal estate for its church, charitable, benevolent or
educational purposes, and to receive bequests or gifts for such purposes;
6. That in approving our Magna Carta the Delegates to the Constitutional
Convention, almost all of whom were Roman Catholics, could not have intended
to curtail the propagation of the Roman Catholic faith or the expansion of the
activities of their church, knowing pretty well that with the growth of our
population more places of worship, more schools where our youth could be
taught and trained; more hallow grounds where to bury our dead would be
needed in the course of time.
Long before the enactment of our Constitution the law authorized the corporations sole
even to receive bequests or gifts of real estates and this Court could not, without any
clear and specific provision of the Constitution, declare that any real property donated,
let as say this year, could no longer be registered in the name of the corporation sole to
which it was conveyed. That would be an absurdity that should not receive our sanction
on the pretext that corporations sole which have no nationality and are non-stock
corporations composed of only one person in the capacity of administrator, have to
establish first that at least sixty per centum of their capital belong to Filipino citizens.
The new Civil Code even provides:
ART. 10. — In case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.
Moreover, under the laws of the Philippines, the administrator of the properties of a
Filipino can acquire, in the name of the latter, private lands without any limitation
whatsoever, and that is so because the properties thus acquired are not for and would
not belong to the administrator but to the Filipino whom he represents. But the
dissenting Justice inquires: If the Ordinary is only the administrator, for whom does he
administer? And who can alter or overrule his acts? We will forthwith proceed to answer
these questions. The corporations sole by reason of their peculiar constitution and form
of operation have no designed owner of its temporalities, although by the terms of the
law it can be safely implied that the Ordinary holds them in trust for the benefit of the
Roman Catholic faithful to their respective locality or diocese. Borrowing the very words
of the law, We may say that the temporalities of every corporation sole are held in
trust for the use, purpose, behalf and benefit of the religious society, or order so
incorporated or of the church to which the diocese, synod, or district organization is an
organized and constituent part (section 163 of the Corporation Law).
In connection with the powers of the Ordinary over the temporalities of the corporation
sole, let us see now what is the meaning and scope of the word "control". According to
the Merriam-Webster's New International Dictionary, 2nd ed., p. 580, on of the
acceptations of the word "control" is:
4. To exercise restraining or directing influence over; to dominate; regulate;
hence, to hold from action; to curb; subject; also, Obs. — to overpower.
SYN: restrain, rule, govern, guide, direct; check, subdue.
It is true that under section 159 of the Corporation Law, the intervention of the courts is
not necessary, to mortgageor sell real property held by the corporation sole where the
rules, regulations and discipline of the religious denomination, society or church
concerned presented by such corporation sole regulates the methods of acquiring,
holding, selling and mortgaging real estate, and that the Roman Catholic faithful residing
in the jurisdiction of the corporation sole has no say either in the manner of acquiring or
of selling real property. It may be also admitted that the faithful of the diocese cannot
govern or overrule the acts of the Ordinary, but all this does not mean that the latter can
administer the temporalities of the corporation sole without check or restraint. We must
not forget that when a corporation sole is incorporated under Philippine laws, the head
and only member thereof subjects himself to the jurisdiction of the Philippine courts of
justice and these tribunals can thus entertain grievances arising out of or with respect to
the temporalities of the church which came into the possession of the corporation sole as
administrator. It may be alleged that the courts cannot intervene as to the matters of
doctrine or teachings of the Roman Catholic Church. That is correct, but the courts may
step in, at the instance of the faithful for whom the temporalities are being held in trust,
to check undue exercise by the corporation sole of its power as administrator to insure
that they are used for the purpose or purposes for which the corporation sole was
created.
American authorities have these to say:
It has been held that the courts have jurisdiction over an action brought by
persons claiming to be members of a church, who allege a wrongful and
fraudulent diversion of the church property to uses foreign to the purposes of the
church, since no ecclesiastical question is involved and equity will protect from
wrongful diversion of the property (Hendryx vs. Peoples United Church, 42
Wash. 336, 4 L.R.A. — n.s. — 1154).
The courts of the State have no general jurisdiction and control over the officers
of such corporations in respect to the performance of their official duties; but as
in respect to the property which they hold for the corporation, they stand in
position of TRUSTEES and the courts may exercise the same supervision as in
other cases of trust (Ramsey vs. Hicks, 174 Ind. 428, 91 N.E. 344, 92 N.E. 164, 30
L.R.A. — n.s. — 665; Hendryx vs. Peoples United Church, supra.).
Courts of the state do not interfere with the administration of church rules or
discipline unless civil rights become involved and which must be protected
(Morris St., Baptist Church vs. Dart, 67 S.C. 338, 45 S.E. 753, and others). (All
cited in Vol. II, Cooley's Constitutional Limitations, p. 960-964.).
If the Constitutional Assembly was aware of all the facts above enumerated and of the
provisions of law relative to existing conditions as to management and operation of
corporations sole in the Philippines, and if, on the other hand, almost all of the Delegates
thereto embraced the Roman Catholic faith, can it be imagined even for an instant that
when Article XIII of the Constitution was approved the framers thereof intended to
prevent or curtail from then on the acquisition sole, either by purchase or donation, of
real properties that they might need for the propagation of the faith and for there
religious and Christian activities such as the moral education of the youth, the care,
attention and treatment of the sick and the burial of the dead of the Roman Catholic
faithful residing in the jurisdiction of the respective corporations sole? The mere
indulgence in said thought would impress upon Us a feeling of apprehension and
absurdity. And that is precisely the leit motiv that permeates the whole fabric of the
dissenting opinion.
It seems from the foregoing that the main problem We are confronted with in this
appeal, hinges around the necessity of a proper and adequate interpretation of sections 1
and 5 of Article XIII of the Constitution. Let Us then be guided by the principles of
statutory construction laid down by the authorities on the matter:
The most important single factor in determining the intention of the people
from whom the constitution emanated is the language in which it is expressed.
The words employed are to be taken in their natural sense, except that legal or
technical terms are to be given their technical meaning. The imperfections of
language as a vehicle for conveying meanings result in ambiguities that must be
resolved by result to extraneous aids for discovering the intent of the framers.
Among the more important of these are a consideration of the history of the
times when the provision was adopted and of the purposes aimed at in its
adoption. The debates of constitutional convention, contemporaneous
construction, and practical construction by the legislative and executive
departments, especially if long continued, may be resorted to resolve, but not to
create, ambiguities. . . . Consideration of the consequences flowing from
alternative constructions of doubtful provisions constitutes an important
 interpretative device. . . . The purposes of many of the broadly phrased
constitutional limitations were the promotion of policies that do not lend
themselves to definite and specific formulation. The courts have had to define
those policies and have often drawn on natural law and natural rights theories
in doing so. The interpretation of constitutions tends to respond to changing
conceptions of political and social values. The extent to which these extraneous
aids affect the judicial construction of constitutions cannot be formulated in
precise rules, but their influence cannot be ignored in describing the essentials
of the process (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-19).
There are times that when even the literal expression of legislation may be
inconsistent with the general objectives of policy behind it, and on the basis of
equity or spirit of the statute the courts rationalize a restricted meaning of the
latter. A restricted interpretation is usually applied where the effect of literal
interpretation will make for injustice and absurdity or, in the words of one
court, the language must be so unreasonable 'as to shock general common
sense'. (Vol. 3, Sutherland on Statutory Construction, 3rd ed., 150.).
A constitution is not intended to be a limitation on the development of a
country nor an obstruction to its progress and foreign relations (Moscow Fire
Ins. Co. of Moscow, Russia vs. Bank of New York and Trust Co., 294 N. Y. S.648;
56 N.E. 2d. 745, 293 N.Y. 749).
Although the meaning or principles of a constitution remain fixed and
unchanged from the time of its adoption, a constitution must be construed as if
intended to stand for a great length of time, and it is progressive and not static.
Accordingly, it should not receive too narrow or literal an interpretation but
rather the meaning given it should be applied in such manner as to meet new or
changed conditions as they arise (U.S. vs. Lassic, 313 U.S. 299, 85 L. Ed., 1368).
Effect should be given to the purpose indicated by a fair interpretation of the
language used and that construction which effectuates, rather than that which
destroys a plain intent or purpose of a constitutional provision, is not only
favored but will be adopted (State ex rel. Randolph Country vs. Walden, 206
S.W. 2d 979).
It is quite generally held that in arriving at the intent and purpose the
construction should be broad or liberal or equitable, as the better method of
ascertaining that intent, rather than technical (Great Southern Life Ins. Co. vs.
City of Austin, 243 S.W. 778).
All these authorities uphold our conviction that the framers of the Constitution had not
in mind the corporations sole, nor intended to apply them the provisions of section 1 and
5 of said Article XIII when they passed and approved the same. And if it were so as We
think it is, herein petitioner, the Roman Catholic Apostolic Administrator of Davao, Inc.,
could not be deprived of the right to acquire by purchase or donation real properties for
charitable, benevolent and educational purposes, nor of the right to register the same in
its name with the Register of Deeds of Davao, an indispensable requisite prescribed by
the Land Registration Act for lands covered by the Torrens system.
We leave as the last theme for discussion the much debated question above referred to
as "the vested right saving clause" contained in section 1, Article XIII of the Constitution.
The dissenting Justice hurls upon the personal opinion expressed on the matter by the
writer of the decision the most pointed darts of his severe criticism. We think, however,
that this strong dissent should have been spared, because as clearly indicated before,
some members of this Court either did not agree with the theory of the writer or were
not ready to take a definite stand on that particular point, so that there being no majority
opinion thereon there was no need of any dissension therefrom. But as the criticism has
been made the writer deems it necessary to say a few words of explanation.
The writer fully agrees with the dissenting Justice that ordinarily "a capacity to acquire
(property) in futuro, is not in itself a vested or existing property right that the
Constitution protects from impairment. For a property right to be vested (or acquired)
there must be a transition from the potential or contingent to the actual, and the
proprietary interest must have attached to a thing; it must have become 'fixed and
established'" (Balboa vs. Farrales, 51 Phil. 498). But the case at bar has to be considered
as an exception to the rule because among the rights granted by section 159 of the
Corporation Law was the right to receive bequests or gifts of real properties for
charitable, benevolent and educational purposes. And this right to receive such bequests
or gifts (which implies donations in futuro), is not a mere potentiality that could be
impaired without any specific provision in the Constitution to that effect, especially when
the impairment would disturbingly affect the propagation of the religious faith of the
immense majority of the Filipino people and the curtailment of the activities of their
Church. That is why the writer gave us a basis of his contention what Professor Aruego
said in his book "The Framing of the Philippine Constitution" and the enlightening
opinion of Mr. Justice Jose P. Laurel, another Delegate to the Constitutional Convention,
in his concurring opinion in the case of Goldcreek Mining Co. vs. Eulogio Rodriguez et al.,
66 Phil. 259. Anyway the majority of the Court did not deem necessary to pass upon said
"vested right saving clause" for the final determination of this case.
JUDGMENT
Wherefore, the resolution of the respondent Land Registration Commission of
September 21, 1954, holding that in view of the provisions of sections 1 and 5 of Article
XIII of the Philippine Constitution the vendee (petitioner) is not qualified to acquire
lands in the Philippines in the absence of proof that at least 60 per centum of the capital,
properties or assets of the Roman Catholic Apostolic Administrator of Davao, Inc. is
actually owned or controlled by Filipino citizens, and denying the registration of the
deed of sale in the absence of proof of compliance with such requisite, is hereby
reversed. Consequently, the respondent Register of Deeds of the City of Davao is ordered
to register the deed of sale executed by Mateo L. Rodis in favor of the Roman Catholic
Apostolic Administrator of Davao, Inc., which is the subject of the present litigation. No
pronouncement is made as to costs. It is so ordered.
Bautista Angelo and Endencia, JJ., concur.
Paras, C.J., and Bengzon, J., concur in the result.
LABRADOR, J., concurring:
The case at bar squarely present this important legal question: Has the bishop or
ordinary of the Roman Catholic Church who is not a Filipino citizen, as corporation sole,
the right to register land, belonging to the Church over which he presides, in view of the
Krivenko decision? Mr. Justice Felix sustains the affirmative view while Mr. Justice J. B. L.
Reyes, the negative. As the undersigned understands it, the reason given for this last
view is that the constitutional provision prohibiting land ownership by foreigners also
extends to control because this lies within the scope and purpose of the prohibition.
To our way of thinking, the question at issue depends for its resolution upon another,
namely, who is the owner of the land or property of the Church sought to be registered?
Under the Canon Law the parish and the diocese have the right to acquire and own
property.
SEC. 1. La Iglesia catolica y la Sede Apostolica, libre e independientemente de la
potestad civil, tiene derecho innato de adquirir, retener y administrar bienes
temporales para el logro de sus propios fines.
SEC. 2. Tambien las iglesias particulares y demas personas morales erigidas por
la autoridad eclesiastica en persona juridica, tienen derecho, a tenor de los
sagrados canones, de adquirir, retener y administrar bienes temporales. (Canon
1495) (Codigo de Derecho Canonico por Miguelez-Alonzo-Cabreros, 4a ed., p.
562.).
The Canon Law further states that Church property belongs to the non-collegiate moral
person called the parish, or to the diocese.
In canon law the ownership of ecclesiastical goods belongs to each separate
juridical person in the Church (C. 1499). The property of St. John's Church does
not belong to the Pope, the bishop, the pastor, or even to the people of the
parish. It belongs to the non-collegiate moral person called the parish, which
has been lawfully erected. It is not like a stock company. The civil law does not
recognize this canonical principle; it insists on an act of civil incorporation or
some other legal device. (Ready Answers in Canon Law by Rev. P.J. Lydon, DD.,
3rd ed., 1948, p. 576.).
Parish. 3. A portion or subdivision of a diocese committed to the spiritual
jurisdiction or care of a priest or minister, called rector or pastor. In the
Protestant Episcopal Church, it is a territorial division usually following civil
bounds, as those of a town. In the Roman Catholic Church, it is usually
territorial, but whenever, as in some parts of the United States there are
different rites and languages, the boundaries and jurisdiction are determined
by right or language; as, a Ruthenian or Polish parish. "5. The inhabitants or
members of a parish, collectively.
Diocese. 3. Eccl. The circuit or extent of a bishop's jurisdiction; the district in
which a bishop has authority. (Webster's New International Dictionary).
We are aware of the fact that some writers believe that ownership of ecclesiastical
properties resides in the Roman Catholic Pontiff as Head of the Universal Church, but the
better opinion seems to be that they do belong to the parishes and diocese as above
indicated.
Canonists entertain different opinions as to the person in whom the ownership
of the ecclesiastical properties is vested, with respect to which we shall, for our
purpose, confine ourselves to stating with Donoso that, while many doctors
cited by Fagnano believe that it resides in the Roman Pontiff as Head of the
Universal Church, it is more probable that ownership, strictly speaking, does
not reside in the latter and, consequently, ecclesiastical properties are owned
by the churches, institutions and canonically established private corporations
to which said properties have been donated. (3 Campos y Pulido, Legislacion y
Jurisprudencia Canonica, P. 420, cited in Trinidad vs. Roman Catholic
Archbishop of Manila, 63 Phil., 881, 888-889.).
The property in question, therefore, appears to belong to the parish or the diocese of
Davao. But the Roman Catholics of Davao are not organized as a juridical person, either
under the Canon law or under the Civil Law. Neither is there any provision in either for
their organization as a juridical person. Registration of the property in the name of the
Roman Catholics of Davao is, therefore, impossible.
As under the Civil Law, however, the organization of parishes and dioceses as juridical
persons is not expressly provided for, the corporation law has set up the fiction known
as the "corporation sole."
It tolerates the corporation sole wherever and as long as the state law does not
permit the legal incorporation of the parish or diocese. The bishop officially is
the legal owner. (Ready Answers in Canon Law, supra, p. 577.) .
and authorizes it to purchase and hold real estate for the Church.
SEC. 159. Any corporation sole may purchase and hold real estate and personal
property for its church, charitable, benevolent, or educational purposes, and
may receive bequests or gifts for such purposes. Such corporation may
mortgage or sell real property held by it upon obtaining an order for that
purpose from the Court of First Instance of the province in which the property
is situated; but before making the order proof must be made to the satisfaction
of the court that notice of the application for leave to mortgage or sell has been
given by publication or otherwise in such manner and for such time as said
court or the judge thereof may have directed, and that it is to the interest of the
corporation that leave to mortgage or sell should be granted. The application
for leave to mortgage or sell must be made by petition, duly verified by the
bishop, chief priest, or presiding elder, acting as corporation sole, and may be
opposed by any member of the religious denomination, society, or church
represented by the corporation sole: Provided, however, That in cases when the
rules, regulations and discipline of the religious denomination, society or
church concerned represented by such corporation sole regulate the methods
of acquiring, holding, selling, and mortgaging real estate and personal property,
 such rules, regulations, and discipline shall control and the intervention of the
courts shall not be necessary. (The Corporation Law.)
And in accordance with the above section, temporalities of the Church or of parish or a
diocese are allowed to be registered in the name of the corporation sole for purposes of
administration and in trust for the real owners.
The mere fact that the Corporation Law authorizes the corporation sole to acquire and
hold real estate or other property does not make the latter the real owner thereof, as his
tenure of Church property is merely for the purposes of administration. As stated above,
the bishop is only the legal (technical) owner or trustee, the parish or diocese being the
beneficial owner, or cestui que trust.
Having arrived at the conclusion that the property in question belongs actually either to
the parish or to the dioceses of Davao, the next question that possess for solution is, In
case of said property, whose nationality must be considered for the purpose of
determining the applicability of the constitutional provision limiting ownership of land
to Filipinos, that of the bishop or chief priest who registers as corporation sole, or that of
the constituents of the parish or diocese who are the beneficial owners of the land? We
believe that of a latter must be considered, and not that of the priest clothed with the
corporate fiction and denominated as the corporation sole. The corporation sole is a
mere contrivance to enable a church to acquire, own and manage properties belonging to
the church. It is only a means to an end. The constitutional provision could not have been
meant to apply to the means through which and by which property may be owned or
acquired, but to the ultimate owner of the property. Hence, the citizenship of the priest
forming the corporation sole should be no impediment if the parish or diocese which
owns the property is qualified to own and possess the property.
We can take judicial notice of the fact that a great majority of the constituents of the
parish or diocese of Davao are Roman Catholics. The affidavit demanded is therefore, a
mere formality.
The dissenting opinion sustains the proposition that control, not actual ownership, is the
factor that determines whether the constitutional prohibition against alien ownership of
lands should or should not apply. We may assume the correctness of the proposition that
the Holy See exercises control cannot be real and actual but merely theoretical. In any
case, the constitutional prohibition is limited by its terms to ownership and ownership
alone. And should the corporation sole abuse its powers and authority in relation to the
administration or disposal of the property contrary to the wishes of the constituents of
the parish or the diocese, the act may always be questioned as ultra vires.
We agree, therefore, with the reversal of the order.
Montemayor and Reyes, A., JJ., concur.
REYES, J.B.L., dissenting:
I regret not being able to assent to the opinion of Mr. Justice Felix. The decision of the
Supreme Court in this case will be of far reaching results, for once the capacity of
corporations sole to acquire public and private agricultural lands is admitted, there will
be no limit to the areas they may hold until the Legislature implements section 3 of
Article XIII of the Constitution, empowering it to set a limit to the size of private
agricultural land that may be held; and even then it can only be done without prejudice to
rights acquired prior to the enactment of such law. In other words, even if a limitative law
is adopted, it will not affect the landholdings acquired before the law become effective,
no matter how vast the estate should be.
The Constitutional restrictions to the acquisition of agricultural land are well known:
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 the limit
of the grant. (Article XII, Constitution of the Phil.).
SEC. 5. Save in cases of hereditary succession, no private agricultural land shall
be transferred or assigned except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain in the Philippines. (Art.
XII, Constitution of the Phil.).
In requiring corporations or associations to have sixty per cent (60%) of their capital
owned by Filipino citizens, the constitution manifestly disregarded the corporate fiction,
i.e., the juridical personality of such corporations or associations. It went behind the
corporate entity and looked at the natural persons that composed it, and demanded that
a clear majority in interest (60%) should be Filipino. To me this was done to ensure that
the control of its properties (not merely the beneficial ownership thereof) remained in
Filipino hands. (Aruego, Framing of the Constitution, Vol. 2. pp. 604, 606.) .
The nationalization of the natural resources of the country was intended (1) to
insure their conservation for Filipino posterity; (2) to serve as an instrument of
national defense, helping prevent the extension into the country of foreign
control through peaceful economic penetration; and (3) to prevent making the
Philippines a source of international conflicts with the consequent danger to its
internal security and independence. . . .
 The convention permitted aliens to acquire an interest in the natural resources
of the country and in private agricultural lands as component elements of
corporations or associations. The maximum limit of interest that they could
hold in a corporation or association would be only forty per centum of the
capital. Accordingly the control of the corporation or association would remain in
Filipino hands.
In its report the committee on nationalization and preservation of lands and
other natural resources recommended that the maximum limit of interest that
aliens could hold in a corporation or association should be only twenty-five per
centum of the capital. The purpose of the committee was to enable Filipino-
controlled corporations or associations, if necessary, to interest aliens to join
their technical or managerial staff by giving them a part interest in the same.
The sub-committee of seven embodied this recommendation in the first draft of
the Constitution; but in the revised article on General Provisions, it raised the
amount to forty per centum. (emphasis supplied.)
It was in recognition of this basic rule that we held in Register of Deeds vs. Ung Siu Si
Temple, 51 Off. Gaz. p. 2866, that if the association had no capital, its controlling
membership must be composed of Filipinos. Because ownership divorced from control is
not true ownership.
From these premises it can be deduced that the preliminary question to be decide by the
court is the following: what and who exercises the power of control in the corporation
sole known as "The Roman Catholic Apostolic Administrator of Davao, Inc."?.
Under section 155 of the Corporation Law, the bishop, or other religious head, as
corporation sole, is "charged with the administration of the temporalities of his church."
It becomes then pertinent to inquire: if he is only an administrator, for whom does he
administer? And who can alter or overrule his acts?
If his acts as administrator can not be overridden, or altered, except by himself, then
obviously the control of the corporation and its temporalities is in the bishop himself,
and he must be a Filipino citizen. If, on the other hand, the final say as to management,
exploitation, encumbrance or disposition of the temporalities resides in another
individual or body of individuals, then the control resides there. To possess
constitutional capacity to acquire agricultural land or other natural resources, that body
making the final decision for the corporation must have at least 60 per cent Filipino
membership.
By this test, the body of members professing the Catholic faith in the diocese of Davao
does not constitute the controlling membership. For under the rules of the Roman
Catholic Church the faithful can not control the acts of the Ordinary; they cannot override
his decision, just as they do not elect or remove him. Only his hierarchical superiors can
do that; the control is from above, not from below. Hence, the fact that 90 per cent (or
even 100 per cent) of the faithful in the diocese should be composed of Filipino citizens is
totally devoid of significance from the standpoint of the constitutional restrictions in
question (see Codex, Canons 1518 and 1530, paragraph 1, No. 3).
Moreover, I do not think that the body of Catholic faithful in the Davao diocese can be
taken, for the purpose here under consideration, as the Church represented by the
Ordinary of Davao. That body does not constitute an entity or unit separate and apart
from the rest of the faithful throughout the world that compose the Roman Catholic
Church that has always claimed ecumenical (universal) character. There is nom Catholic
Church of Davao district and independent of the Catholic Church of Manila, Lipa or Rome.
All those professing Catholic faith are members of only one single church or religious
group. Thus the Iglesia Filipina Independiente is not part of the Catholic Church,
precisely because of its independence.
If, the, the Catholic Church of Davao is part and parcel of the universal Catholic Church, it
can not be considered separate and apart from it in this case. And if considered with it,
obviously the condition of 60 per cent Filipino membership is not satisfied when all the
Catholic faithful in the world are taken into account.
The unity and singleness of the various diocese of the church appears expressly
recognized in section 163 of the Corporation Law, which provides that the corporation
(sole) shall hold the temporalities, not for the diocese; but for the benefit "of
the church of which the diocese — is an organized or constituent part."
SEC. 163. The right to administer all temporalities and all property held or
owned by a religious order or society, or by the diocese synod, or district
organization of any religious denomination or church shall, on its
incorporation, pass to the corporation and shall be held in trust for the use
purpose, behalf, and benefit of the religious society or order so incorporated or
of the church of which the diocese, synod, or district organization is an
organized and constituent part.
So that, even from the standpoint of beneficial ownership, the dioceses of Davao can not
be viewed as a group legally isolated from the Catholic Church as a whole.
Nor does court control over the acts of the corporation sole constitute a guarantee of
Filipino control that would satisfy the purposes of the constitution, for the reason that
under section 159 (last proviso) of the Corporation law, the court intervention
is dispensed with where the rules and discipline of the church already regulate the
acquisition and disposition of real estate and personal property.
Provided however, that in cases where the rules, regulations and discipline of
the religious denomination, society, or church concerned represented by such
corporation sole regulate the methods of acquiring, holding, selling, and
mortgaging real estate and personal property, such rules, regulations, and
discipline shall control and the intervention of the courts shall not be necessary.
(emphasis supplied.)
It is argued that a distinction must be drawn between the lands to be devoted to purely
religious purposes and the lands held in ordinary ownership. But where in the
Constitution is such a distinction drawn? Under it, capacity to acquire agricultural land
for the erection of a church is capacity to acquire agricultural lands for any lawful
purpose, whether it be for convents or schools or seminaries or haciendas for their
support or land to be held solely for enjoyment of the revenue. Once the capacity to
acquire is granted, the way is paved for the revitalization of religious landholdings that
proved so troublesome in our past. I cannot conceive that the Constitution intended to
revive them.

It is also argued that, before the Constitution was adopted, the corporations sole had, by
express statute, the right to acquire agricultural land; and that the Constitution was not
intended to destroy such "acquired property rights." If followed, the argument destroys
the constitutional restrictions. All aliens had a capacity to acquire agricultural land
before the Constitution came into effect, because no prohibition existed previously. Must
their right to acquire and hold agricultural land be conceded in spite of the Constitution?.

That the law should have expressly conferred capacity to acquire land upon corporations
sole was not due any special predilection for them; it was exclusively due to the principle
that corporation, as artificial entities, have no inherent rights, but only those granted by
the sovereign. Unless conferred, the corporate right would not exist.

Furthermore, a capacity to acquire in futuro, is not in itself a vested existing property

right that the Constitution protects from impairment. For a property right to be vested
(or acquired) there must be a transition from the potential, or contingent, to the actual,
and the proprietary interest must have attached to a thing, it must have become "fixed or
established "(Balboa vs. Farrales, 51 Phil. 498). If mere potentialities cannot be impaired,
then the law would become unchangeable, for every variation in it will reduce some
one's legal ability to do or not to do. Already in Benguet Consolidated vs. Pineda, 3 52 Off.
Gaz. 1961, we have ruled that no one has a vested right in statutory privileges or
exemptions. And in the concurring opinion in Gold Creek Mining Corp. vs. Rodriguez, 66
Phil. 259 (cited by Justice Felix), Mr. Justice Laurel squarely declared that "contingency
or expectation is neither property right." (cas. cit., p. 269.) Finally, the point is also made
that the Ordinary, as religious corporation sole, has no citizenship, and is not an alien.
The answer is that under the Constitution of the Republic, it is not enough that the
acquirer of agricultural land be not an alien; he must be a Filipino or controlled by
Filipinos.

Wherefore, I am constrained to conclude:

(1) That the capacity of religious corporations sole to acquire agricultural land depends
upon 60 per cent Filipino membership of the group or body exercising control of the
corporation;lawphi1.net

(2) That if control of any such corporation should be vested in a single person, then such
person must be a Filipino citizen;1awphi1.net

(3) That in the absence of evidence on these points, the order appealed from, denying
registration of the conveyance, should be affirmed.

Concepcion, J., concur.