Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. L-43938 April 15, 1988REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner, vs.HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents. G.R. No. L-44081 April 15, 1988BENGUET CONSOLIDATED, INC., petitioner, vs.HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents. G.R. No. L-44092 April 15, 1988ATOK-BIG WEDGE MINING COMPANY, petitioner, vs.HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents. CRUZ, J.:The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth even if the land where the discovery is made be private. 1 In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not correctly applied. These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2 The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3 In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation. She testified she was born in the land, which was possessed by her parents under claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964. 7 Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land. 8 For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon. 9 The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902 which provided that: SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and unsurveyed are hereby declared to be free and open to exploration, occupation and purchase and the land in which they are found to occupation and purchase by the citizens of the United States, or of said islands.

1

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973. 10 The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered. 11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims. Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its own petition for review and reiterates its argument that neither the private respondents nor the two mining companies have any valid claim to the land because it is not alienable and registerable. It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The Court of Appeals correctly declared that: There is no question that the 9 lots applied for are within the June Bug mineral claims of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining locator. He filed his declaration of the location of the June Bug mineral and the same was recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the required affidavit of annual assessment. After World War II, Benguet introduced improvements on mineral claim June Bug, and also conducted geological mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for taxation and had religiously paid the taxes. The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company. The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having been perfected prior to the approval of the Constitution of the Philippines of 1935, they were removed from the public domain and had become private properties of Benguet and Atok. It is not disputed that the location of the mining claim under consideration was perfected prior to November 15, 1935, when the Government of the Commonwealth was inaugurated; and according to the laws existing at that time, as construed and applied by this court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the area from the public domain. Said the court in that case: The moment the locator discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be granted to any other person. The reservations of public lands cannot be made so as to include prior mineral perfected locations; and, of course, if a valid mining location is made upon public lands afterwards included in a reservation, such inclusion or reservation does not affect the validity of the former location. By such location and perfection, the land located is segregated from the public domain even as against the Government. (Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546). "The legal effect of a valid location of a mining claim is not only to segregate the area from the public domain, but to grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon compliance with the terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area becomes segregated from the public domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the effect of a grant by the United States of the right of present and exclusive possession, with the right to the exclusive enjoyment of all the surface ground as well as of all the minerals within the lines of the claim, except as limited by the extralateral right of adjoining locators; and this is the locator's right before as well as after the issuance of the patent. While a lode locator acquires a vested property right by virtue of his location made in compliance with the mining laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)

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It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to secure a patent as long as he complies with the provisions of the mining laws; his possessory right, for all practical purposes of ownership, is as good as though secured by patent. We agree likewise with the oppositors that having complied with all the requirements of the mining laws, the claims were removed from the public domain, and not even the government of the Philippines can take away this right from them. The reason is obvious. Having become the private properties of the oppositors, they cannot be deprived thereof without due process of law. 13 Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that: SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy and other natural resources of the Philipppines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the government established under this Constitution. Natural resources with the exception of public agricultural lands, shall not be alienated, and no license, concession, or lease for the exploitation, development or utilization of any of the natural resources shall be granted for a period exceeding 25 years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which case beneficial use may be the measure and the limit of the grant.Implementing this provision, Act No. 4268, approved on November 8, 1935, declared: Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all locations of mining claim made prior to February 8, 1935 within lands set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which would be valid and subsisting location except to the existence of said reserve are hereby declared to be valid and subsisting locations as of the date of their respective locations.The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. 14 By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. 15 As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok. It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at bar, for two reasons. First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the applicants was insufficient to support their claim of ownership. They themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave abuse of discretion or without sufficient basis. 17 Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the subject property, their possession was not in the concept of owner of the mining claim but of the property as agricultural land, which it was not. The property was mineral land, and they were claiming it as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining of the land. In fact, Balbalio testified that she was aware of the diggings being undertaken "down below" 18 but she did not mind, much less protest, the same although she claimed to be the owner of the said land. The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. 19 Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application. Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the

3

farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing line between the surface and the sub-surface rights? The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. 20 As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface. What must have misled the respondent court is Commonwealth Act No. 137, providing as follows: Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their disposition, exploitation, development or utilization, shall be limited to citizens of the Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of government established under the Constitution.SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents.SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all areas for which Torrens titles are granted are excluded and excepted from all such titles.This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong. The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. 21 Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes. WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs. SO ORDERED. Teehankee, C.J., Narvasa, Gancayco and Griño-Aquino, JJ., concur. //endRepublic of the Philippines, Benguet & Atok vs. Court of Appeals & De La RosaG.R. No. L-43938, April 15, 1988Cruz, J.:Doctrine: The owner of a piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. The rights over the land are indivisible and the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural.Facts: These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964.

4

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9.In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation.Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land.For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon.The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973.The trial court denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered.The applicants appealed to the respondent court, which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims. Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership.Issue: Whether respondent court’s decision, i.e. “the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claim,” is correct.Held: No. Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes. It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok. The Court of Appeals justified this by saying there is “no conflict of interest” between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.

5

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to “agricultural, industrial, commercial, residential or (for) any purpose other than mining.” Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings.//endRepublic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. L-69002 June 30, 1988REPUBLIC OF THE PHILIPPINES, petitioner, vs.AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA CASTILLO, CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L. CASTILLO, HIPOLITA DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO HERRERA, JOSE L. CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO, REGISTER OF DEEDS OF BATANGAS and THE INTERMEDIATE APPELLATE COURT, respondents. Castro, Nardo, Quintanilla, Gonzales & Macatangay Law Office for respondents. PARAS, J.:This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate Appellate Court * reversing the February 6, 1976 Decision of the then Court of First Instance of Batangas, Branch VI, in Civil Case No. 2044. The antecedental facts of this case, as found by the then Intermediate Appellate Court, are as follows: Sometime in 1951, the late Modesto Castillo applied for the registration of two parcels of land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, described in Plan Psu-119166, with a total area of 39,755 square meters. In a decision dated August 31, 1951, the said Modesto Castillo, married to Amanda Lat, was declared the true and absolute owner of the land with the improvements thereon, for which Original Certificate of Title No. 0-665 was, issued to him by the Register of Deeds at Batangas, Batangas, on February 7, 1952. By virtue of an instrument dated March 18, 1960, the said Lots 1 and 2 covered by Original Certificate of Title No. 0-665, together with Lot No. 12374 covered by Transfer Certificate of Title No. 3254-A and Lot No. 12377 covered by Transfer Certificate of Title No. 3251-A, were consolidated and sub-divided into Lots 1 to 9 under Pcs-1046. After the death of Modesto Castillo, or on August 31, 1960, Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage in favor of Florencio L. Castillo, et al., as a result of which Original Certificate of Title No. D-665 was cancelled, and in lieu thereof, new transfer cerfificates of title were issued to Florencio Castillo, et al., to wit: Transfer Certificate of Title No. 21703 (Lot 4) (and) Transfer Certificate of Title No. 21704 to Florencio Castillo (Lot 5); Transfer Certificate of Title No. T-21708 to Carlos L. Castillo (Lot 7); Transfer Certificate of Title No. T-21712 to Mariano L. Castillo (Lot 6); Transfer Certificate of Title No. T-21713 to Jose L. Castillo (Lot 9); Transfer Certificate of Title No. T-21718 to Aida C. Herrera (Lot 2); and Transfer Certificate of Title No. T-21727 to Teresita L. Castillo (Lot 8). The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots 1 and 2, Psu-119166) to the State. It was alleged that said lands had always formed part of the Taal Lake, washed and inundated by the waters thereof, and being of public ownership, it could not be the subject of registration as private property. Appellants herein, defendants below, alleged in their answer that the Government's action was already barred by the decision of the registration court; that the action has prescribed; and that the government was estopped from questioning the ownership and possession of appellants.

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After trial, the then Court of First Instance of Batangas, Branch VI, presided over by Honorable Benjamin Relova, in a Decision dated February 6, 1976 (Record on Appeal, pp. 62-69), ruled in favor of herein petitioner Republic of the Philippines. The decretal portion of the said decision, reads: WHEREFORE, the Register of Deeds of Batangas is hereby ordered to cancel Original Certificate of Title No. 0-665 in the name of Modesto Castillo and the subsequent Transfer of Certificates of Title issued over the property in the names of the defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby declared public lands belonging to the state. Without pronouncement as to costs. The Court of Appeals, on appeal, in a Decision promulgated on April 26,1984, reversed and set aside the appealed decision, and dismissed the complaint (Record, pp. 31-41). Herein petitioner filed a Motion for Reconsideration (Record, pp. 42-51), but the same was denied in a Resolution promulgated on October 12,1984 (Record, p. 52). Hence, the instant petition. The sole issue raised in this case is whether or not the decision of the Land Registration Court involving shore lands constitutes res adjudicata. There is no question that one of the requisites of res judicata is that the court rendering the final judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24 [1986]; that shores are properties of the public domain intended for public use (Article 420, Civil Code) and, therefore, not registrable. Thus, it has long been settled that portions of the foreshore or of the territorial waters and beaches cannot be registered. Their inclusion in a certificate of title does not convert the same into properties of private ownership or confer title upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).But an important bone of contention is the nature of the lands involved in this case. Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake, washed and inundated by the waters thereof. Consequently, the same were not subject to registration, being outside the commerce of men; and that since the lots in litigation are of public domain (Art. 502), par. 4 Civil Code) the registration court (of 1951) did not have jurisdiction to adjudicate said lands as private property, hence, res judicata does not apply. (Rollo, pp. 37-38). The Government presented both oral and documentary evidence. As summarized by the Intermediate Appelate Court (now Court of Appeals), the testimonies of the witnesses for the petitioner are as follows: 1. Rosendo Arcenas, a Geodetic Engineer connected with the Bureau of Lands since 1961, testified to the effect that Lots 1 and 2, Psu-119166, which are the lots in question, adjoin the cadastral survey of Tanauan, Batangas (Cad. 168); that the original boundary of the original cadastral survey was foreshore land as indicated on the plan; that the cadastral survey of Tanauan was executed sometime in 1923; that the first survey executed of the land after 1923 was the one executed in 1948 under Plan Psu-119166 that in the relocation survey of the disputed lots in 1962 under SWO-40601, said lots were annotated on the plan as claimed by the Republic of the Philippines in the same manner that it was so annotated in Plan Psu-119166; thus showing that the Government was the only claimant of the land during the survey in 1948; that during the relocation survey made in 1962, old points cannot be Identified or located because they were under water by about forty centimeters; that during the ocular inspection of the premises on November 23, 1970, he found that 2 monuments of the lots in question were washed out by the waters of the Baloyboy Creek; that he also found duck pens along the lots in question; that there are houses in the premises as well as some camotes and bananas; and that he found also some shells ('suso') along the banks of the Taal lake (Tsn, Nov. 16, 1970, pp. 13-21; Feb. 16, 1971, pp. 4-36). 2. Braulio Almendral testified to the effect that he is a resident of Tanauan, Batangas, near the Taal lake; that like himself there are other occupants of the land among whom are Atanacio Tironas, Gavino Mendoza, Juliano Tirones, Agapito Llarena, etc.; that it was they who filled up the area to make it habitable; that they filled up the area with shells and sand; that their occupation is duck raising; and that the Castillos never stayed in or occupied the premises (Tsn, Nov. 16, 1970, pp. 32-50). 3. Arsenio Ibay, a Geodetic Engineer connected with the Bureau of Lands since 1968, also testified to the effect that in accordance with the cadastral plan of Tanauan, the only private claim of Sixto Castillo referred to Lots 1006 to 1008; that the Castillos never asserted any private claim to the lots in question during the cadastral survey;' that in the preparation of plan Psu-119166, Lots 12374 and 12377 were made as reference to conform to previously approved plans; that lot 12374 is a portion of cadastral lot 10107, SWO-86738 while Lot 22377 is a portion of Lot 10108 of the same plan (Tsn, Nov. 25, 1970, pp. 115-137). 4. Jose Isidro, a Land Investigator of the Bureau of Lands, testified to the effect that pursuant to the order of the Director of Lands, he, together with Engineer Rufino Santiago and the barrio captain of Tanauan, Batangas, conducted an investigation of the land in question; that he submitted a report of investigation, dated October

7

19, 1970 (Exh. H-1); that portions of the lot in question were covered by public land applications filed by the occupants thereof; that Engineer Santiago also submitted a report (Exh. H-8); that he had notified Dr. Mariano Castillo before conducting the investigation (Tsn, Nov. 25,1970, pp. 137-162). 5. Rufino Santiago, another Geodetic Engineer connected with the Bureau of Lands, testified to the effect that on October 19,1970, he submitted a report of investigation regarding the land in question; that he noted on the plan Exhibit H-9 the areas on which the houses of Severo Alcantara and others were built; that he found that the land was planted to coconuts which are about 15 years old; that the land is likewise improved with rice paddies; that the occupants thereof are duck raisers; that the area had been elevated because of the waste matters and duck feeds that have accumulated on the ground through the years (Tsn, Nov. 26,1970, pp. 163-196). 6. Pablo Tapia, Barrio Captain of Tanauan, Batangas, since 1957, testified to the effect that the actual occupants of Lots I and 2 are Atanacio Tirones,tc.; that during the war the water line reached up to a point marked Exhibit A-9 and at present the water has receded to a point up to Exhibit A-12; that the reasons why the waters of Taal lake have receded to the present level is because of the fillings made by the people living in Lots 1 and 2; that there are several duck pens all over the place; that the composition of the soil is a mixture of mud and duck feeds; that improvements consist of bananas, bamboos and palay; that the shoreline is not even in shape because of the Baloyboy Creek; that the people in the area never came to know about the registration case in which the lots in question were registered; that the people living in the area, even without any government aid, helped one another in the construction of irrigated rice paddies; that he helped them file their public land applications for the portions occupied by them; that the Castillos have never been in possession of the premises; that the people depend upon duck raising as their means of their livelihood; that Lots 1 and 2 were yet inexistent during the Japanese occupation; and that the people started improving the area only during liberation and began to build their houses thereon. (Tsn, Nov. 26,1970, pp. 197-234). Among the exhibits formally offered by the Government are: the Original Plan of Tanauan, Batangas, particularly the Banader Estate, the Original Plan of PSU-119166, Relocation Verification Survey Plan, maps, and reports of Geodetic Engineers, all showing the original shoreline of the disputed areas and the fact that the properties in question were under water at the time and are still under water especially during the rainy season (Hearing, March 17,1971, TSN, pp. 46-47). On the other hand, private respondents maintain that Lots 1 and 2 have always been in the possession of the Castillo family for more than 76 years and that their possession was public, peaceful, continuous, and adverse against the whole world and that said lots were not titled during the cadastral survey of Tanauan, because they were still under water as a result of the eruption of Taal Volcano on May 5, 1911 and that the inundation of the land in question by the waters of Taal Lake was merely accidental and does not affect private respondents' ownership and possession thereof pursuant to Article 778 of the Law of Waters. They finally insisted that this issue of facts had been squarely raised at the hearing of the land registration case and, therefore, res judicata (Record on Appeal, pp. 63-64). They submitted oral and documentary evidence in support of their claim. Also summarized by respondent Appellate Court, the testimonies of the witnesses of private respondents are as follows: 1. Silvano Reano, testified to the effect that he was the overseer of the property of the late Modesto Castillo located at Banadero,Tanauan, Batangas since 1944 to 1965; that he also knows Lots 1 and 2, the parcels of land in question, since he was managing said property; that the occupants of said Lots 1 and 2 were engaged in duck raising; that those occupants were paying the Castillos certain amount of money because their animals used to get inside the lots in question; that he was present during the survey of the land in 1948; and that aside from the duck pens which are built in the premises, the land is planted to rice (Tsn, April 14, 1971, pp. 62-88). 2. Dr. Mariano Castillo, testified to the effect that the late Modesto Castillo was a government official who held high positions in the Government; and that upon his death the land was subdivided among his legal heirs. (Appellee's Brief, pp. 4-9). As above-stated, the trial court decided the case in favor of the government but the decision was reversed on appeal by the Court of Appeals. A careful study of the merits of their varied contentions readily shows that the evidence for the government has far outweighed the evidence for the private respondents. Otherwise stated, it has been satisfactorily established as found by the trial court, that the properties in question were the shorelands of Taal Lake during the cadastral survey of 1923. Explaining the first survey of 1923, which showed that Lots 1 and 2 are parts of the Taal Lake, Engineer Rosendo Arcenas testified as follows:

8

ATTY. AGCAOILI: Q Now, you mentioned Engineer that a subject matter of that plan which appears to be Lots 1 and 2 are adjoining cadastral lots of the Tanauan Cadastre, now, will you please state to the Court what is the basis of that statement of yours? A The basis of that statement is the plan itself, because there is here an annotation that the boundary on the northeastern side is Tanauan Cadastre 168 which indicates that the boundary of the original cadastral survey of Tanauan Cadastre way back in the year 1923 adjoins a foreshore land which is also indicated in this plan as foreshore lands of Taal lake, sir.xxx xxx xxxQ Now, on this plan Exhibit "A-2", there are two lots indicated namely, Lots 12374 and 12377, what do these lots represent? A This is the cadastral lot executed in favor of a certain Modesto Castillo that corresponds to Lots 12374 and another Lot 12377, sir. Q At the time this survey plan Psu-119166 and marked as Exhibit "A-2" was executed in 1948, were these lots 1 and 2 already in existence as part of the cadastral survey? A No, sir, because there is already a foreshore boundary. Q Do I understand from you Mr. Witness at the time of the survey of this land these two lots form part of this portion? A Yes, sir. Q When again was the cadastral survey of Tanauan, Batangas, executed if you know? A In the year 1923, sir. (Hearing of Nov. 16, 1970, TSN pp. 15-17). Such fact was further verified in the Verification-Relocation Survey of 1948 by Engineer Arcenas who conducted said survey himself and reported the following: That as per original plan Psu-119166, it appears that Lot 1 and Lot 2, Psu-119166 surveyed and approved in the name of Modesto Castillo is a portion of Taal Lake and as such it appears to be under water during the survey of cadastral Lot No. 12374 and Lot No. 12377, which was surveyed and approved in the name of Modesto Castillo under Cad. 168. To support this theory is the annotation appearing and printed along lines 2-3-4-5 of Lot 1, Psu-119166 and along lines 4-5-6 of Lot 2, Psu-119166 which notations clearly indicates that such boundary of property was a former shorelines of Taal Lake, in other words, it was the extent of cultivation being the shorelines and the rest of the area going to the southwestern direction are already covered by water level. Another theory to bolster and support this Idea is the actual location now in the verification-relocation survey of a known geographic point were Barrio Boundary Monument (BBM N. 22) is under water level quite for sometimes as evidence by earthworks (collection of mud) that amount over its surface by eighty (80) centimeters below the ground, see notation appearing on verification-relocation plan previously submitted. (Re-Verification-Relocation Survey Exhibits, pp. 64-65). Said surveys were further confirmed by the testimonies of witnesses to the effect that from 1950 to 1969, during rainy season, the water of Taal lake even went beyond the questioned lots; and that the water, which was about one (1) foot, stayed up to more or less two (2) to three (3) months (Testimonies of Braulio Almendral and Anastacio Tirones both residents of Banadero, Tanauan, Batangas (Hearing of Nov. 16, 1970, TSN, pp. 41-42 and Hearing of Nov. 23, 1970, TSN, pp. 93, 98-99, respectively). In the Relocation Survey of 1962, there were no definite boundary or area of Lots 1 and 2 because a certain point is existing which was under water by 40 centimeters (Testimony of Engineer Arcena, Hearing of Nov. 16,1970, TSN, p. 20). Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated from foreshore land or that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition, 1954, p. 67). Such distinction draws importance from the fact that accretions on the bank of a lake, like Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v. Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public domain, and is not available for private ownership until formally declared by the government to be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]). But said distinction will not help private respondents because there is no accretion shown to exist in the case at bar. On the contrary, it was established that the occupants of the lots who were engaged in duck raising filled up the area with shells and sand to make it habitable. The defense of long possession is likewise not available in this case because, as already ruled by this Court, mere possession of land does not by itself automatically divest the land of its public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).

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PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate Court is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then Court of First Instance of Batangas is hereby AFFIRMED and REINSTATED. SO ORDERED. Yap, C.J., Padilla and Sarmiento, JJ., concur.//end RP v. Lat Vda de Castillo, et. al. Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

G.R. No. L-69002 June 30, 1988

REPUBLIC OF THE PHILIPPINES, petitioner, vs. AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA CASTILLO, CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L. CASTILLO, HIPOLITA DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO HERRERA, JOSE L. CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO, REGISTER OF DEEDS OF BATANGAS and THE INTERMEDIATE APPELLATE COURT, respondents.

EN BANC

This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate Appellate Court reversing the February 6, 1976 Decision of the then Court of First Instance of Batangas.

Facts:

In 1951, the late Modesto Castillo applied for the registration of two parcels of land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, as the true and absolute owner of the land with the improvements thereon, which was issued to him by the Register of Deeds of Batangas. He was married to Amanda Lat.

By virtue of an instrument dated in March 1960, the two parcels of land with Original Certificate of Title (OCT) were consolidated and divided into Lots 1 to 9 which was covered by Transfer Certificate of Title (TCT). After the death of Modesto Castillo on August 31, 1960, Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage in favor of Florencio L. Castillo, et al., as a result of which Original Certificate of Title was cancelled, and in lieu thereof, new transfer certificates of title (TCT) were issued to the following appellants-defendants.

The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots 1 and 2, Psu-119166) to the State.

It was alleged that said lands had always formed part of the Taal Lake and being of public ownership, it could not be the subject of registration as private property. They alleged in their answer that the Government's action was already barred by the decision of the registration court; that the action has prescribed; and that the government was estopped from questioning the ownership and possession of appellants.

The then Court of First Instance of Batangas, Branch VI, decided that the Register of Deeds of Batangas to order the cancellation of the OCT in the name of Modesto Castillo and the subsequent TCT issued over the property in the names of the defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby declared public lands belonging to the state. Without pronouncement as to costs.

Defendants appealed their case. The Court of Appeals, in a decision promulgated on April 26,1984, reversed and set aside the appealed decision, and dismissed the complaint.

Issue:

The sole issue raised in this case is whether or not the decision of the Land Registration Court involving shore

10

lands constitutes res adjudicata.

Held:

There is no question that one of the requisites of res judicata is that the court rendering the final judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24 [1986]; that shores are properties of the public domain intended for public use (Article 420, Civil Code) and, therefore, not registrable.

Thus, it has long been settled that portions of the foreshore or of the territorial waters and beaches cannot be registered. Their inclusion in a certificate of title does not convert the same into properties of private ownership or confer title upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).

But an important bone of contention is the nature of the lands involved in this case.

Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake, washed and inundated by the waters thereof. Consequently, the same were not subject to registration, being outside the commerce of men; and that since the lots in litigation are of public domain (Art. 502), par. 4 Civil Code) the registration court (of 1951) did not have jurisdiction to adjudicate said lands as private property, hence, res judicata does not apply. (Rollo, pp. 37-38).

The Government presented both oral and documentary evidence.

Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated from foreshore land or that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition, 1954, p. 67).

Such distinction draws importance from the fact that accretions on the bank of a lake, like Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v. Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public domain, and is not available for private ownership until formally declared by the government to be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).

But said distinction will not help private respondents because there is no accretion shown to exist in the case at bar. On the contrary, it was established that the occupants of the lots who were engaged in duck raising filled up the area with shells and sand to make it habitable.

The defense of long possession is likewise not available in this case because, as already ruled by this Court, mere possession of land does not by itself automatically divest the land of its public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).

PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate Court is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then Court of First Instance of Batangas is hereby AFFIRMED and REINSTATED. SO ORDERED. //end

RP v. Lat Vda de Castillo, et. al. Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

G.R. No. L-69002 June 30, 1988

REPUBLIC OF THE PHILIPPINES, petitioner, vs. AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA CASTILLO, CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L. CASTILLO, HIPOLITA DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO HERRERA, JOSE L. CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO, REGISTER OF DEEDS OF BATANGAS and THE INTERMEDIATE APPELLATE COURT, respondents.

11

EN BANC

This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate Appellate Court reversing the February 6, 1976 Decision of the then Court of First Instance of Batangas.

Facts:

In 1951, the late Modesto Castillo applied for the registration of two parcels of land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, as the true and absolute owner of the land with the improvements thereon, which was issued to him by the Register of Deeds of Batangas. He was married to Amanda Lat.

By virtue of an instrument dated in March 1960, the two parcels of land with Original Certificate of Title (OCT) were consolidated and divided into Lots 1 to 9 which was covered by Transfer Certificate of Title (TCT). After the death of Modesto Castillo on August 31, 1960, Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage in favor of Florencio L. Castillo, et al., as a result of which Original Certificate of Title was cancelled, and in lieu thereof, new transfer certificates of title (TCT) were issued to the following appellants-defendants.

The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots 1 and 2, Psu-119166) to the State.

It was alleged that said lands had always formed part of the Taal Lake and being of public ownership, it could not be the subject of registration as private property. They alleged in their answer that the Government's action was already barred by the decision of the registration court; that the action has prescribed; and that the government was estopped from questioning the ownership and possession of appellants.

The then Court of First Instance of Batangas, Branch VI, decided that the Register of Deeds of Batangas to order the cancellation of the OCT in the name of Modesto Castillo and the subsequent TCT issued over the property in the names of the defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby declared public lands belonging to the state. Without pronouncement as to costs.

Defendants appealed their case. The Court of Appeals, in a decision promulgated on April 26,1984, reversed and set aside the appealed decision, and dismissed the complaint.

Issue:

The sole issue raised in this case is whether or not the decision of the Land Registration Court involving shore lands constitutes res adjudicata.

Held:

There is no question that one of the requisites of res judicata is that the court rendering the final judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24 [1986]; that shores are properties of the public domain intended for public use (Article 420, Civil Code) and, therefore, not registrable.

Thus, it has long been settled that portions of the foreshore or of the territorial waters and beaches cannot be registered. Their inclusion in a certificate of title does not convert the same into properties of private ownership or confer title upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).

But an important bone of contention is the nature of the lands involved in this case.

Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake, washed and inundated by the waters thereof. Consequently, the same were not subject to registration, being outside the commerce of men; and that since the lots in litigation are of public domain (Art. 502), par. 4 Civil Code) the

12

registration court (of 1951) did not have jurisdiction to adjudicate said lands as private property, hence, res judicata does not apply. (Rollo, pp. 37-38).

The Government presented both oral and documentary evidence.

Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated from foreshore land or that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition, 1954, p. 67).

Such distinction draws importance from the fact that accretions on the bank of a lake, like Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v. Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public domain, and is not available for private ownership until formally declared by the government to be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).

But said distinction will not help private respondents because there is no accretion shown to exist in the case at bar. On the contrary, it was established that the occupants of the lots who were engaged in duck raising filled up the area with shells and sand to make it habitable.

The defense of long possession is likewise not available in this case because, as already ruled by this Court, mere possession of land does not by itself automatically divest the land of its public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).

PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate Court is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then Court of First Instance of Batangas is hereby AFFIRMED and REINSTATED. SO ORDERED. //end

THIRD DIVISION

[G.R. No. L-66575. May 24, 1988.]

ADRIANO MANECLANG, JULIETA, RAMONA, VICTOR, ANTONINA, LOURDES, TEODORO and MYRNA, all surnamed MANECLANG, Petitioners, v. THE INTERMEDIATE APPELLATE COURT and ALFREDO MAZA, CORLETO CASTRO, SALOME RODRIGUEZ, EDUCARDO CUISON, FERNANDO ZARCILLA, MARIANO GABRIEL, NICOMEDES CORDERO, CLETO PEDROZO, FELIX SALARY and JOSE PANLILIO, Respondents.

Loreto Novisteros, for Petitioners.

Corleto R. Castro for Respondents.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; COMPROMISE AGREEMENT NULL AND VOID; CONTRARY TO LAW AND PUBLIC POLICY. — The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership in favor of herein petitioners of the fishpond in dispute, which, as clearly found by the lower and appellate courts, was originally a creek forming a tributary of the Agno River. Considering that as held in the case of Mercado v. Municipal President of Macabebe, 59 Phil. 592 [1934], a creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription, and as a public water, it cannot be registered under the Torrens System in the name of any individual [Diego v. Court of Appeals, 102 Phil. 494; Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public domain, the Court finds the Compromise Agreement null and void and of no legal effect, the same being contrary to law and public policy.

2. ID.; EVIDENCE; FACTUAL FINDINGS OF THE MUNICIPAL CORPORATION ON APPEAL. — The finding that the

13

subject body of water is a creek belonging to the public domain is a factual determination binding upon this Court. The Municipality of Bugallon, acting thru its duly-constituted municipal council is clothed with authority to pass, as it did the two resolutions dealing with its municipal waters.

3. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; PUBLICATION OF NOTICE OF PUBLIC BIDDING, SUFFICIENT COMPLIANCE. — It cannot be said that petitioners were deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world.

R E S O L U T I O N

FERNAN, J.:

Petitioners Adriano Maneclang, Et. Al. filed before the then Court of First Instance of Pangasinan, Branch XI a complaint for quieting of title over a certain fishpond located within the four [4] parcels of land belonging to them situated in Barrio Salomague, Bugallon, Pangasinan, and the annulment of Resolutions Nos. 38 and 95 of the Municipal Council of Bugallon, Pangasinan. The trial court dismissed the complaint in a decision dated August 15, 1975 upon a finding that the body of water traversing the titled properties of petitioners is a creek constituting a tributary of the Agno River; therefore public in nature and not subject to private appropriation. The lower court likewise held that Resolution No. 38, ordering an ocular inspection of the Cayangan Creek situated between Barrios Salomague Sur and Salomague Norte, and Resolution No. 95 authorizing public bidding for the lease of all municipal ferries and fisheries, including the fishpond under consideration, were passed by respondents herein as members of the Municipal Council of Bugallon. Pangasinan in the exercise of their legislative powers.

Petitioners appealed said decision to the Intermediate Appellate Court, which affirmed the same on April 29, 1983. Hence, this petition for review on certiorari.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

Acting on the petition, the Court required the respondents to comment thereon. However, before respondents could do so, petitioners manifested that for lack of interest on the part of respondent Alfredo Maza, the awardee in the public bidding of the fishpond, the parties desire to amicably settle the case by submitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of petitioners over the land the body of water found within their titled properties, stating therein, among other things, that "to pursue the case, the same will not amount to any benefit of the parties, on the other hand it is to the advantage and benefit of the municipality if the ownership of the land and the water found therein belonging to petitioners be recognized in their favor as it is now clear that after the National Irrigation Administration [NIA] had built the dike around the land, no water gets in or out of the land. 1

The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership in favor of herein petitioners of the fishpond in dispute, which, as clearly found by the lower and appellate courts, was originally a creek forming a tributary of the Agno River. Considering that as held in the case of Mercado v. Municipal President of Macabebe, 59 Phil. 592 [1934], a creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription, and as a public water, it cannot be registered under the Torrens System in the name of any individual [Diego v. Court of Appeals, 102 Phil. 494; Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public domain, the Court finds the Compromise Agreement null and void and of no legal effect, the same being contrary to law and public policy.chanrobles.com.ph : virtual law library

The finding that the subject body of water is a creek belonging to the public domain is a factual determination binding upon this Court. The Municipality of Bugallon, acting thru its duly-constituted municipal council is clothed with authority to pass, as it did the two resolutions dealing with its municipal waters, and it cannot be said that petitioners were deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world.

14

IN VIEW OF THE FOREGOING, the Court Resolved to set aside the Compromise Agreement and declare the same null and void for being contrary to law and public policy. The Court further resolved to DISMISS the instant petition for lack of merit.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.//end

Maneclang vs IACPosted on June 21, 2013 GR 66575September 30, 1986144 SCRA 553FACTSISSUEHELDA CREEK is a recess/arm extending from a river and participating in the eb and flow of the sea. It is a property belonging to the public domain. It is not susceptible to appropriation & acquisitive prescription because such isAs a public water, it cannot be registered under the Torrens System in the name of any individual.Its nature as property of the public domain cannot be modified by the construction of irrigatoon dikes by the National Irrigation Authority, or by its conversion into a fishpond.Hence, a compromise agreement adjudicating the ownership of such property in favor of an individual is null and void. The compromise agreement has no legal effect since it is contrary to law and public policy.//end

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISION G.R. No. L-30852 February 26, 1988CITY OF ILIGAN, plaintiff-appellant, vs.DIRECTOR OF LANDS, THE DISTRICT LAND OFFICER OF LANAO DEL NORTE, and MARCELO STEEL CORPORATION, defendants-appellees. GANCAYCO, J.:On August 9, 1952 the President of the Philippines issued Proclamation No. 335 whereby pursuant to the provision of Section 88 of the Commonwealth Act (CA) 141 as amended, upon recommendation of the Secretary of agriculture and Natural Resources, he withdrew from sale or settlement and reserved for the use of the National Power Corporation (NPC) certain parcels of the public domain situated at Iligan City and more particularly described in the Bureau of Lands Plan No. IR-1 028. 1 These parcels of land comprise the Camp Overton Military Reservation which was turned over to the Republic of the Philippines in 1949. In the meanwhile, the NPC, a public corporation duly organized and existing under and by virtue of Commonwealth Act No. 120, as amended, and Executive Order No. 399 the latter known as the "Uniform Charter for Government Corporations," constructed a fertilizer plant known as Maria Cristina Fertilizer Plant within the reservation covered by Proclamation 335, series of 1952. On September 15,1960, under a "Deed of Sale with First Real Estate and Chattel Mortgage" the NPC sold, ceded, transferred and conveyed to Marcelo Tire and Rubber Corporation the Maria Cristina Fertilizer Plant with all appurtenant machineries, equipment, buildings, quarters, structures, etc.,"including the right of occupancy and use of the land" described in Proclamation 335, Series of 1952; and further covenanted to "collaborate with the Department of Agriculture and Natural Resources in facilitating the outright sale and/or right to lease for at least 25 years, renewable for another 25 year, the lands wherein the properties of the Maria Cristina Fertilizer Plant are erected, located and/or situated. 2 Proclamation No. 20, Series of 1962, and Proclamation 198, Series of 1964, were subsequently issued, the first, excluding from the operation of Proclamation No. 335, Series of 1952, certain areas occupied by the Maria Cristina Fertilizer Plant and the Employees Housing Compound, and declaring the same open to disposition

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under the provisions of Public Land Act and, the second, changing the technical description of said excluded areas. The six (6) lots covered by and described in Proclamation 198 all begin with SGS 2430 (Marcelo Steel Corporation). 3 On March 17,1964, the Marcelo Steel Corporation and/or the Maria Cristina Fertilizer Plant, through the President, Jose P. Marcelo filed in the Bureau of Lands a Miscellaneous Sales Application for tracts of lands containing an of 356,3474 square meters for industrial purposes. 4 Attached to the application which later came to be No. V-81763 was a plan (Exh. 3-C) which contains, among other information, the Identifying mark "SGS-2430" at the lower right corner. The Marcelo Tire and Rubber Corporation and Maria Cristina Fertilizer Plant are sister corporations. The purchaser of the fertilizer plant was the Marcelo Tire and Rubber Corporation but it was another sister enterprise, the Marcelo Steel Corporation which operated and managed the aforesaid plant up to September 30, 1964. In a notice of sale of public lands issued in Manila on September 30, 1 964, the Director of Lands advised the public that the Bureau of Lands of Iligan City will sell to the highest qualified bidder at 10:00 A.M. on December 29, 1965 the tract of land covered by Miscellaneous Sales application No. V-81763 of the Marcelo Steel Corporation. 5 On October 5, 1965, the President of the Philippines issued Proclamation No. 469 providing "Upon recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the provision of Section 88 of C.A. No. 141, I, Diosdado Macapagal, President of the Philippines, do hereby exclude from the reservation made in favor of the National Power Corporation existing under Proclamation No. 335, Series of 1952, and Proclamation No. 20, Series of 1962, as amended and Proclamation No. 198, Series of 1964, situated in Iligan City, certain parcels of land embraced therein." Lots 1, 1-a, 3 and 4, containing approximately an area of 29,681 square meters are described therein. The Proclamation further stated "that upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to Section 60 of C.A. No. 141, I do hereby grant, donate and transfer the aforementioned parcels of land including the foreshores thereof, in favor of Iligan City. " 6 On October 22, 1965, the Mayor of Iligan City wrote the Director of Lands to inform him that the City of Iligan is the owner in fee simple of lots 1,1-a, 3 and including the foreshores thereof by virtue of Proclamation No. 469, Series of 1965, and requesting that the said property be excluded from the proposed auction sale. 7 No action was taken on this request for exclusion. Hence, on December 23, 1965, the City of Iligan filed a complaint for injunction with preliminary injunction in the Court of First Instance of Lanao del Norte against the Director of Lands, District Land Officer of Lanao del Norte and the Marcelo Steel Corporation to enjoin and stop the sale and/or disposition of the aforedescribed parcels of land. On December 28,1965, a preliminary injunction was issued by the court as prayed for in the complaint. On August 25,1966, President Ferdinand Marcos issued Proclamation No. 94 "excluding from the operation of Proclamation No. 469 dated October 4,1965 certain portions of the land embraced therein, situated in Iligan City and declaring the same open to disposition under the provisions of public Land Act." Said portions of land, as described therein are Lots 1-a, 2-a and 3 of the parcels of land in question. 8 On April 13, 1967, after the trial on the merits, the court rendered its decision dismissing the complaint and dissolving the writ of preliminary injunction of December 28, 1965 with costs against the plaintiff Iligan City. An appeal therefrom was interposed by the City of Iligan to the Court of Appeals wherein in due course a Resolution of July 8, 1969 was issued wherein the records of the case were certified to this Court as the issue of the validity of any executive order and the errors or the questions of the law raised are within the exclusive jurisdiction of this Court. In this proceedings, the plaintiff-appellant raises the following assignment of errors: I. THAT THE TRIAL COURT ERRED IN HOLDING THAT THE PRESIDENT OF THE PHILIPPINES DOES NOT HAVE THE POWER TO GRANT A PORTION OF THE PUBLIC DOMAIN TO ANY GOVERNMENT ENTITY LIKE THE CITY OF ILIGAN AND THAT THEREFORE THERE WAS NO GRANT TO THE CITY OF ILIGAN. II. THAT THE LOWER COURT ERRED IN NOT HOLDING THAT OWNERSHIP HAD ALREADY VESTED IN THE CITY OF ILIGAN. III. THAT THE LOWER COURT ERRED IN NOT HOLDING THAT PROCLAMATION NO. 94,s. 1966 WAS ILLEGAL AND VOID FOR BEING CONTRARY TO THE PROVISIONS OF SECTION 60 OF COMMONWEALTH ACT NO. 141. IV. THAT THE LOWER COURT ERRED IN NOT HOLDING THAT UNDER THE PUBLIC LAND LAW AND REPUBLIC ACT NO. 274, THE CONTROVERTED LANDS MAY NOT BE OPENED TO DISPOSITION BECAUSE THEY ARE NEEDED FOR PUBLIC PURPOSES AND BECAUSE SUCH DISPOSITION WOULD BE DETRIMENTAL TO PUBLIC INTEREST.

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Under the first assigned error the plaintiff assails the ruling of the court a quo that "Proc. No. 469 did not confer a title to the City of Iligan because the donation made by the President is not at all sanctioned by the Public Land Act. The plaintiff should have applied for it under any of the ways provided by said law. 9 Section 60 of C.A. No. 141 provides as follows: Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation, or association authorized to purchase or lease public lands for agricultural purposes. The area of the land so leased or sold shall be such as shall, in the judgment of the Secretary of agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale or lease is requested, and shall in no case exceed one hundred forty-four hectares; Provided, however, That this limitation shall not apply to grants, donations, or transfers made to a province, municipality, or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted, donated, or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner effecting its title, except when authorized by Congress; Provided, further, That any person, corporation, association, or partnership disqualified from purchasing public land for agricultural purposes under the provisions of this Act, may lease land included under this title suitable for industrial or residential purposes referred to. (As amended by Rep. Act 4107, approved June 19, 1964). Section 60 aforesaid fags under Title 3 of the Public Land Act referring to 'Lands for residential, commercial or industrial purposes or other similar purposes.Any of the said tracts of land can be disposed either by lease or sale to any person, corporation or association authorized to purchase or lease public lands for agricultural purposes with an area not exceeding 144 hectares, when in the judgment of the Secretary of agriculture and Natural Resources it is reasonably necessary for the purposes for which the sale or lease is made. It may also be disposed of by grant, donation, or transfer made to a province, municipality, branch or subdivision of the government for purposes conducive to the public interest by said entities without any limitations to area. The question that arises is who has the authority to donate the said public land to such a province, municipality, branch or subdivision of the government? Under Section 60 aforecited, the lease or sale of any tract of land comprised under the said title may be leased or sold by the Secretary of Agriculture and Natural Resources thru the Director of Lands who acts under bis immediate control. 10 The limitation is that the area to be sold or leased shall not exceed 144 hectares. 11 However, it is also provided therein that the limitation shall not apply to grants, donations or transfers made to a province, municipality or branch or subdivision of the government for The purposes deemed by said entities conducive to the public interest 12 It logically follows therefore that when it is a grant, donation or transfer made to a province, municipality or branch or subdivision, as aforesaid the same may also be made by the Secretary of Agriculture and Natural Resources thru the Director of Lands. However, if after such grant, donation or transfer it is desired to alienate, encumber or otherwise dispose of the property effecting its title, such disposition must be upon authority of Congress. 13 The next question that arises is whether the President of the Philippines can make such grant, donation or transfer to a province, municipality or subdivision of the government for the purpose as provided and in accordance with Section 60 aforesaid of the Public Land Act instead of the Director of lands and/or the Secretary of Agriculture and Natural Resources. The answer should be in the affirmative. As herein before stated the Secretary of Agriculture and Natural Resources is the executive officer-in-charged with the duty of carrying out the provision of the Public Land Act thru the Director of Lands who acts under his immediate control. 14 Section 4 thereof, also provides: Sec. 4. Subject to said control, the Director of Lands shall have direct executive control of the survey, classification, lease, sale or any other form of concession or disposition and management of the lands of the public domain, and his decisions as to questions of fact shall be conclusive when approved by the Secretary of agriculture and Natural Resources. Since it is the Director of Lands who has direct executive control among others in the lease, sale or any form of concession or disposition of the land of the public domain subject to the immediate control of the Secretary of Agriculture and Natural Resources, and considering that under the Constitution the President of the Philippines has control over all executive departments, bureaus, and offices, etc., 15 the President of the Philippines has therefore the same authority to dispose of portions of the public domain as his subordinates, the Director of Lands, and his alter ego the Secretary of Agriculture and Natural Resources. 16 Such power of the President is recognized under Section 69 aforecited of the Public Land Act as it provides: Sec. 69. Whenever any province, municipality, or other branch or subdivision of the Government shall need any portion of the land of the public domain open to concession for educational, charitable, or others similar

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purposes, the President, upon recommendation of the Secretary of agriculture and Natural Resources, may execute contracts in favor of the same, in the form of donation, sale, lease, exchange, or any other form, under terms, and conditions to be inserted in the contract; but land to be granted shall in no case be encumbered or alienated, except when the public service requires their being leased or exchanged, with the approval of the President, for other lands belonging to private parties, or if the Congress disposes otherwise. From the foregoing provision it is clear that the President of the Philippines may execute contracts in favor of any province, municipality or other branch or subdivision of the government who shall need any portion of the land of the public domain open to concession for educational, charitable or other similar purposes, in the form of donation, sale, lease, exchange, or any other form. Having found that the President of the Philippines has the authority to donate or grant lands of the public domain for residential, commercial or industrial purposes or other similar purposes, Proclamation No. 469, donating the parcels of lands in question to the plaintiff is thus valid and binding and consequently the second assigned error is when taken. The ownership of the parcels of land in question had thereby been vested in the plaintiff City of Iligan by the issuance of said Proclamation No. 469 on October 4,1965. Indeed what the records show is that the Mayor of the City of Iligan upon said proclamation immediately had the lots surveyed and entered into negotiation with the National Investment & Development Corporation and those interested in promoting a coco-chemical plant in Iligan City with the end in view of accelerating the economic expansion of the City. 17 The observation of the court a quo that this land grant to the plaintiff City of Iligan is not valid and that plaintiff should have filed the appropriate public land application by way of lease or sale as provided by the Public Land Act has no lawful basis. As the said parcels of land had since been segregated from the land of the public domain and became of the exclusive ownership and property of the plaintiff as of October 4,1965, Proclamation No. 94 of August 25, 1966 of President Ferdinand E. Marcos excluding from the operation of said Proclamation No. 469 dated October 4,1965 and declaring the same open to dispositions Lots 1-a, 2-a and 3 is null and void and of no force and effect. Under Section 60 aforecited it is specifically provided that 'the land so granted, donated or transferred to a province, municipality or branch or subdivision of the government shag not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress ... From the foregoing, it is clear that it is only Congress not the President of the Philippines that may authorize the alienation, encumbrance or disposition of such land already donated to a province, municipality or branch or subdivision of the government. This disposes of the third assigned error. In the light of the foregoing, the fourth and last assigned error needs no further discussion. There is no more legal obstacle to the economic development of the City of Iligan now that the cloud over its title to the parcels of lands in question has been cleared. WHEREFORE, the decision of the Court of First Instance of Iligan dated April 13, 1967 is hereby REVERSED and SET ASIDE and another judgment is hereby rendered declaring that the parcels of land in question are the properties of and belong to the plaintiff Iligan City by virtue of Proclamation No. 469 of October 4, 1965. No pronouncement as to costs. SO ORDERED. Teehankee, C.J., Narvasa, Cruz and Grino-Aquino, JJ., concur.

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