TULLO LTD Assigns No. 6 & 7 Sep6&13.doc

8/11/2019 TULLO LTD Assigns No. 6 & 7 Sep6&13.doc

http://slidepdf.com/reader/full/tullo-ltd-assigns-no-6-7-sep613doc 1/20

II WHO ARE QUALIFIED TO OWN LANDSFilipino Citizens

Sections 2, 7 & , A!t" #II $%7ConstittionN'tion'l Econo() 'n* +'t!i(on)

Section 7" Save in cases of hereditary

succession, no private lands shall betransferred or conveyed except to individuals,corporations, or associations qualied toacquire or hold lands of the public domain.

Section " Notwithstanding the provisions of Section 7 of this Article, a naturalborn citi!enof the "hilippines who has lost his "hilippineciti!enship may be a transferee of privatelands, sub#ect to limitations provided by law.

Replic Act No" 7-.2 /ne $0,$%%$

AN ACT TO +RO1OTE FOREININ3EST1ENTS, +RESCRI4E THE+ROCEDURES FOR REISTERINENTER+RISES DOIN 4USINESS IN THE+HILI++INES, AND FOR OTHER +UR+OSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congressassembled:$

Section $" Title. %his Act shall be &nown as

the, 5Foreign Investments Act of 19915.

Section 2" Declaration of Policy. 't is thepolicy of the State to attract, promote andwelcome productive investments from foreignindividuals, partnerships, corporations, andgovernments, including their politicalsubdivisions, in activities which signicantlycontribute to national industriali!ation andsocioeconomic development to the extentthat foreign investment is allowed in suchactivity by the (onstitution and relevant laws.)oreign investments shall be encouraged in

enterprises that signicantly expandlivelihood and employment opportunities for)ilipinos* enhance economic value of farmproducts* promote the welfare of )ilipinoconsumers* expand the scope, quality andvolume of exports and their access to foreignmar&ets* and+or transfer relevant technologiesin agriculture, industry and support services.)oreign investments shall be welcome as a

supplement to )ilipino capital and technologyin those enterprises serving mainly thedomestic mar&et.

As a general rule, there are no restrictions onextent of foreign ownership of exportenterprises. 'n domestic mar&et enterprises,foreigners can invest as much as one hundred

percent -/0 equity except in areasincluded in the negative list. )oreign ownedrms catering mainly to the domestic mar&etshall be encouraged to underta&e measuresthat will gradually increase )ilipinoparticipation in their businesses by ta&ing in)ilipino partners, electing )ilipinos to theboard of directors, implementing transfer of technology to )ilipinos, generating moreemployment for the economy and enhancings&ills of )ilipino wor&ers.

Section 0" Denitions. As used in this Act$

a0 %he term 1"hilippine national1 shallmean a citi!en of the "hilippines or adomestic partnership or associationwholly owned by citi!ens of the"hilippines* or a corporation organi!edunder the laws of the "hilippines of which at least sixty percent 2/0 of the capital stoc& outstanding andentitled to vote is owned and held byciti!ens of the "hilippines* or a trusteeof funds for pension or other employeeretirement or separation benets,where the trustee is a "hilippinenational and at least sixty 2/0 of thefund will accrue to the benet of the"hilippine nationals$ "rovided, %hatwhere a corporation and its non)ilipino stoc&holders own stoc&s in aSecurities and 3xchange (ommissionS3(0 registered enterprise, at leastsixty percent 2/0 of the capitalstoc&s outstanding and entitled to voteof both corporations must be ownedand held by citi!ens of the "hilippinesand at least sixty percent 2/0 of the

members of the 4oard of 5irectors of both corporations must be citi!ens of the "hilippines, in order that thecorporations shall be considered a"hilippine national*

b0 %he term 1investment1 shall meanequity participation in any enterprise



organi!ed or existing under the laws of the "hilippines*

c0 %he term 1foreign investment1 shallmean as equity investment made by anon"hilippine national in the form of foreign exchange and+or other assetsactually transferred to the "hilippines

and duly registered with the (entral4an& which shall assess and appraisethe value of such assets other thanforeign exchange*

d0 %he praise 1doing business1 shallinclude soliciting orders, servicecontracts, opening o6ces, whethercalled 1liaison1 o6ces or branches*appointing representatives ordistributors domiciled in the "hilippinesor who in any calendar year stay in thecountry for a period or periods totalling

one hundred eighty -0 days ormore* participating in themanagement, supervision or control of any domestic business, rm, entity orcorporation in the "hilippines* and anyother act or acts that imply acontinuity of commercial dealings orarrangements, and contemplate tothat extent the performance of acts orwor&s, or the exercise of some of thefunctions normally incident to, and inprogressive prosecution of, commercialgain or of the purpose and ob#ect of

the business organi!ation$ "rovided,however, %hat the phrase 1doingbusiness$ shall not be deemed toinclude mere investment as ashareholder by a foreign entity indomestic corporations duly registeredto do business, and+or the exercise of rights as such investor* nor having anominee director or o6cer torepresent its interests in suchcorporation* nor appointing arepresentative or distributor domiciledin the "hilippines which transacts

business in its own name and for itsown account*

e0 %he term 1export enterprise1 shallmean an enterprise which producesgoods for sale, or renders services tothe domestic mar&et entirely or if exporting a portion of its output fails to

consistently export at least sixtypercent 2/0 thereof* and

g0 %he term 1)oreign 'nvestmentsNegative 8ist1 or 1Negative 8ist1 shallmean a list of areas of economicactivity whose foreign ownership islimited to a maximum of forty

ownership is limited to a maximum of forty percent 9/0 of the equitycapital of the enterprise engagedtherein.

Section ." Scope. %his Act shall not applyto ban&ing and other nancial institutionswhich are governed and regulated by the:eneral 4an&ing Act and other laws under thesupervision of the (entral 4an&.

Section 6" Registration of Investments of Non-Pilippine Nationals. ;ithout need of prior approval, a non"hilippine national, asthat term is dened in Section < a0, and nototherwise disqualied by law may uponregistration with the Securities and 3xchange(ommission S3(0, or with the 4ureau of

%rade =egulation and (onsumer "rotection4%=("0 of the 5epartment of %rade and'ndustry in the case of single proprietorships,do business as dened in Section < d0 of thisAct or invest in a domestic enterprise up toone hundred percent -/0 of its capital,unless participation of non"hilippinenationals in the enterprise is prohibited orlimited to a smaller percentage by existinglaw and+or limited to a smaller percentage byexisting law and+or under the provisions of this Act. %he S3( or 4%=(", as the case maybe, shall not impose any limitations on theextent of foreign ownership in an enterpriseadditional to those provided in this Act$"rovided, however, %hat any enterprisesee&ing to avail of incentives under the>mnibus 'nvestment (ode of -?7 must applyfor registration with the 4oard of 'nvestments4>'0, which shall process such application forregistration in accordance with the criteria for

evaluation prescribed in said (ode$ "rovided,nally, %hat a non"hilippine nationalintending to engage in the same line of business as an existing #oint venture in hisapplication for registration with S3(. 5uringthe transitory period as provided in Section -@hereof, S3( shall disallow registration of theapplying non"hilippine national if the existing

#oint venture enterprise, particularly the





Amendments to 8ist 4 may be madeupon recommendation of the Secretaryof National 5efense, or the Secretaryof Eealth, or the Secretary of 3ducation, (ulture and Sports,indorsed by the N35A, or uponrecommendation motu propio of N35A,approved by the "resident, and

promulgated by "residential"roclamation.

c0 8ist ( shall contain the areas of investment in which existingenterprises already serve adequatelythe needs of the economy and theconsumer and do not require furtherforeign investments, as determined byN35A applying the criteria provided inSection ? of this Act, approved by the"resident and promulgated in a"residential "roclamation.

%he %ransitory )oreign 'nvestmentNegative 8ist established in Sec. -@hereof shall be replaced at the end of the transitory period by the rst=egular Negative 8ist to theformulated and recommended by theN35A, following the process andcriteria provided in Section and ? of this Act. %he rst =egular Negative 8istshall be published not later than sixty20 days before the end of thetransitory period provided in said

section, and shall become immediatelyeBective at the end of the transitoryperiod. Subsequent )oreign 'nvestmentNegative 8ists shall become eBectivefteen -@0 days after publication intwo C0 newspapers of generalcirculation in the "hilippines$ "rovided,however, %hat each )oreign'nvestment Negative 8ist shall beprospective in operation and shall inno way aBect foreign investmentsexisting on the date of its publication.

Amendments to 8ist 4 and ( afterpromulgation and publication of therst =egular )oreign 'nvestmentNegative 8ist at the end of thetransitory period shall not be mademore often than once every two C0years.

Section %" Determination of Areas of Investment for Incl'sion in %ist ( of teForeign Investment Negative %ist. ponpetition by a "hilippine national engagetherein, an area of investment may berecommended by N35A for inclusion in 8ist (of the )oreign 'nvestment Negative 8ist upondetermining that it complies with all the

following criteria$

a0 %he industry is controlled by rmsowned at least sixty percent 2/0 by)ilipinos*

b0 'ndustry capacity is ample to meetdomestic demand*

c0 Su6cient competition exists withinthe industry*

d0 'ndustry products comply with"hilippine standards of health andsafety or, in the absence of such, withinternational standards, and arereasonably competitive in quality withsimilar products in the same pricerange imported into the country*

e0 Fuantitative restrictions are notapplied on imports of directlycompeting products*

f0 %he leading rms of the industry

substantially comply withenvironmental standards* and

g0 %he prices of industry products arereasonable.

%he petition shall be sub#ected to a publichearing at which aBected parties will have theopportunity to show whether the petitionerindustry adequately serves the economy andthe consumer, in general, and meets theabove stated criteria in particular. N35A maydelegate evaluation of the petition and

conduct of the public hearing to anygovernment agency having cogni!ance of thepetitioner industry. %he delegated agencyshall ma&e its evaluation report andrecommendations to N35A which retains theright and sole responsibility to determinewhether to recommend to the "resident topromulgate the area of investment in 8ist ( of the Negative 8ist. An industry or area of



investment included in 8ist ( of the Negative8ist by "residential "roclamation shall remainin the said 8ist ( for two C0 years, withoutpre#udice to reinclusion upon new petition,and due process.

Section $-" Strategic In&'stries. ;ithineighteen -0 months after the eBectivity of

this Act, the N35A 4oard shall formulate andpublish a list of industries strategic to thedevelopment of the economy. %he list shallspecify, as a matter of policy and not as alegal requirement, the desired equityparticipation by :overnment and+or private)ilipino investors in each strategic industry.Said list of strategic industries, as well as thecorresponding desired equity participation of government and+or private )ilipino investors,may be amended by N35A to reGect changesin economic needs and policy directions of :overnment. %he amended list of strategic

industries shall be published concurrently withpublication of the )oreign 'nvestmentNegative 8ist.

%he term 1strategic industries1 shall meanindustries that are characteri!ed by all of thefollowing$

a0 (rucial to the acceleratedindustriali!ation of the country,

b0 =equire massive capital investments

to achieve economies of scale fore6cient operations*

c0 =equire highly speciali!ed oradvanced technology whichnecessitates technology transfer andproven production techniques inoperations*

d0 (haracteri!ed by strong bac&wardand forward lin&ages with mostindustries existing in the country, and

e0 :enerate substantial foreignexchange savings through importsubstitution and collateral foreignexchange earnings through export of part of the output that will result withthe establishment, expansion ordevelopment of the industry.

Section $$" (ompliance )it!nvironmental Stan&ar&s. All industrialenterprises regardless of nationality of ownership shall comply with existing rulesand regulations to protect and conserve theenvironment and meet applicableenvironmental standards.

Section $2" (onsistent *overnment Action. No agency, instrumentality orpolitical subdivision of the :overnment shallta&e any action on conGict with or which willnullify the provisions of this Act, or anycerticate or authority granted hereunder.

Section $0" Implementing R'les an& Reg'lations. N35A, in consultation with4>', S3( and other government agenciesconcerned, shall issue the rules andregulations to implement this Act within onehundred and twenty -C0 days after its

eBectivity. A copy of such rules andregulations shall be furnished the (ongress of the =epublic of the "hilippines.

Section $." A&ministrative Sanctions. Aperson who violates any provision of this Actor of the terms and conditions of registrationor of the rules and regulations issuedpursuant thereto, or aids or abets in anymanner any violation shall be sub#ect to a nenot exceeding >ne hundred thousand pesos"-,0.

'f the oBense is committed by a #uridicalentity, it shall be sub#ect to a ne in anamount not exceeding H of -/ of total paidincapital but not more than )ive million pesos"@,,0. %he president and+or o6cialsresponsible therefor shall also be sub#ect to ane not exceeding %wo hundred thousandpesos "C,0.

'n addition to the foregoing, any person, rmor #uridical entity involved shall be sub#ect toforfeiture of all benets granted under this

Act.

S3( shall have the power to imposeadministrative sanctions as provided hereinfor any violation of this Act or itsimplementing rules and regulations.

Section $6" Transitory Provisions. "riorto eBectivity of the implementing rules and



regulations of this Act, the provisions of 4oo&'' of 3xecutive >rder CC2 and itsimplementing rules and regulations shallremain in force.

5uring the initial transitory period of thirtysix<20 months after issuance of the =ules and=egulations to implement this Act, the

%ransitory )oreign 'nvestment Negative 8istshall consist of the following$

A. 8ist A$

-. All areas of investment inwhich foreign ownership islimited by mandate of (onstitution and specic laws.

4. 8ist 4$

-. Ianufacture, repair, storageand+or distribution of rearms,ammunitions, lethal weapons,military ordinance, explosives,pyrotechnics and similarmaterials required by law to belicensed by and under thecontinuing regulation of the5epartment of National5efense* unless suchmanufacturing or repair activityis specically authori!ed with asubstantial export component,

to a non"hilippine national bythe Secretary of National5efense*

C. Ianufacture and distributionof dangerous drugs* all forms of gambling* nightclubs, bars,beerhouses, dance halls* saunaand steam bathhouses,massage clinic and other li&eactivities regulated by lawbecause of ris&s they may poseto public health and morals*

<. Small and mediumsi!edomestic mar&et enterpriseswith paidin equity capital orless than the equivalent of SD@,, unless theyinvolve advanced technology asdetermined by the 5epartmentof Science and %echnology, and

9. 3xport enterprises whichutili!e raw materials fromdepleting natural resources,and with paidin equity capitalof less than the equivalentSD@,.

(. 8ist ($

-. 'mport and wholesaleactivities not integrated withproduction or manufacture of goods*

C. Services requiring a licenseor specic authori!ation, andsub#ect to continuingregulations by nationalgovernment agencies otherthan 4>' and S3( which at thetime of eBectivity of this Act arerestricted to "hilippine nationalsby existing administrativeregulations and practice of theregulatory agencies concerned$"rovided, %hat after eBectivityof this Act, no other servicesshall be additionally sub#ectedto such restrictions onnationality of ownership by thecorresponding regulatoryagencies, and such restrictionsonce removed shall not bereimposed* and

<. 3nterprises owned in thema#ority by a foreign licensorand+or its a6liates for theassembly, processing ormanufacture of goods for thedomestic mar&et which arebeing produced by a "hilippinenational as of the date of eBectivity of this Act under atechnology, &nowhow and+orbrand name license from suchlicensor during the term of thelicense agreement$ "rovided,

%hat, the license is dulyregistered with the (entral4an& and+or the %echnology

%ransfer 4oard and isoperatively in force as of thedate of eBectivity of this Act.



N35A shall ma&e the enumeration asappropriate of the areas of the investmentcovered in this %ransitory )oreign 'nvestmentNegative 8ist and publish the Negative 8ist infull at the same time as, or prior to, thepublication of the rules and regulations toimplement this Act.

%he areas of investment contained in 8ist (above shall be reserved to "hilippine nationalsonly during the transitory period. %heinclusion of any of them in the regularNegative 8ist will require determination byN35A after due public hearings that suchinclusion is warranted under the criteria setforth in Section and ? hereof.

Section $" Repealing (la'se. Articlesfortyfour 990 to ftysix @20 of 4oo& '' of 3xecutive >rder No. CC2 are hereby repealed.

All other laws or parts of laws inconsistentwith the provisions of this Act are herebyrepealed or modied accordingly.

Section $7" Separa+ility. 'f any part orsection of this Act is declared unconstitutionalfor any reason whatsoever, such declarationshall not in any way aBect the other parts orsections of this Act.

Section $" !,ectivity. %his Act shall ta&eeBect fteen -@0 days after approval and

publication in two C0 newspaper of generalcirculation in the "hilippines.

Approved$ June -<, -??-

III COR+ORATIONS

Sec" 0, A!t" #II ConstittionN'tion'l Econo() 'n* +'t!i(on)

Section 0" 8ands of the public domain areclassied into agricultural, forest or timber,mineral lands and national par&s. Agriculturallands of the public domain may be furtherclassied by law according to the uses towhich they may be devoted. Alienable landsof the public domain shall be limited toagricultural lands. "rivate corporations or

associations may not hold such alienablelands of the public domain except by lease,for a period not exceeding twentyve years,renewable for not more than twentyveyears, and not to exceed one thousandhectares in area. (iti!ens of the "hilippinesmay lease not more than ve hundredhectares, or acquire not more than twelve

hectares thereof, by purchase, homestead, orgrant.

%a&ing into account the requirements of conservation, ecology, and development, andsub#ect to the requirements of agrarianreform, the (ongress shall determine, by law,the si!e of lands of the public domain whichmay be acquired, developed, held, or leasedand the conditions therefor.

CASES

C:';ez C'se, sp!'

THE DIRECTOR OF LANDS ;s"INTER1EDIATE A++ELLATE COURT 'n*AC1E +L<WOOD & 3ENEER CO" INC", ETC"

$. SCRA 6-% 8$%9No" L=70--2" Dece(e! 2%, $%

• %he 5irector of 8ands appealed the #udgment of the 'ntermediateAppellate (ourt 'A(0 which a6rmedthe decision of the (ourt of )irst

'nstance of 'sabela ordering theregistration in favor of hereinrespondent corporation of ve parcelsof land measuring 9-, <? sqm.,acquired from Iariano and Acer 'nel,members of the indigenous 5umagat

%ribe and as such are culturalminorities0, owners of the land sub#ectof 8= proceeding, and who hadpossessed said land from timeimmemorial, on >ctober C?, -?2C.

→ %his was accordingly onlyregistered on July -7, -?C long

after the aegis of the -?7<(onstitution.

• %he ()', during its ocular investigationof the land, seen that Acme "lywood KLeneer (o. 'nc., has introduced morethan "9@I ?. AcmeMs ownership andpossession of the land was dulyrecogni!ed by the government whenthe Iunicipal >6cials of Iaconacon,



'sabela, have negotiated for thedonation of the townsite from Acme"lywood K Leneer (o., 'nc., and thisnegotiation came to reality when the4oard of 5irectors of the Acme"lywood K Leneer (o., 'nc., haddonated a part of the land bought bythe (ompany from the 'nels for the

townsite of Iaconacon 'sabela onNovember -@, -?7?, and whichdonation was accepted by theIunicipal :overnment of Iaconacon,'sabela.

ISSUE> ;hether or not the title that the 'nelshad transferred to Acme in -?2C could beconrmed in favor of the latter in proceedingsinstituted by it in -?- when the -?7<(onstitution was already in eBect, having inmind the prohibition therein against private

corporations holding lands of the publicdomain except in lease not exceeding -,hectares.

HELD> <ES" %he question turns upon adetermination of the character of the lands atthe time of institution of the registrationproceedings in -?-. 'f they were then stillpart of the public domain, it must beanswered in the negative. 'f, on the otherhand, they were then already private lands,the constitutional prohibition against theiracquisition by private corporations or

associations obviously does not apply.

T:e $%70 Constittion c'nnot i(p'i!;este* !i?:ts" T:s @:e!e l'n* @'s'ci!e* in $%2 @:en co!po!'tions@e!e 'llo@e* to 'ci!e l'n*s note)on* $,-2. :ect'!es, t:e s'(e (') e!e?iste!e* in $%2 'lt:o?: n*e! $%70Constittion co!po!'tions c'nnot 'ci!el'n*s oB t:e plic *o('in"3ven on theproposition that the land remained technically1public1 land, despite immemorial possessionof the 'nels and their ancestors, until title in

their favor was actually conrmed inappropriate proceedings under the "ublic8and Act, there can be no serious question of Acmes right to acquire the land at the time itdid, there also being nothing in the -?<@(onstitution that might be construed toprohibit corporations from purchasing oracquiring interests in public land to which thevendor had already acquired that type of socalled 1incomplete1 or 1imperfect1 title. T:e

onl) li(it'tion t:en et'nt @'s t:'tco!po!'tions col* not 'ci!e, :ol* o!le'se plic '?!iclt!'l l'n*s in ecessoB $,-2. :ect'!es" %he purely accidentalcircumstance that conrmation proceedingswere brought under the aegis of the -?7<(onstitution which forbids corporations fromowning lands of the public domain cannot

defeat a right already vested before that lawcame into eBect, or invalidate transactionsthen perfectly valid and proper. %his (ourt hasalready held, in analogous circumstances,that the (onstitution cannot impair vestedrights.

%he fact, therefore, that the conrmation

proceedings were instituted by Acme in its

own name must be regarded as simply

another accidental circumstance, productive

of a defect hardly more than procedural and

in nowise aBecting the substance and meritsof the right of ownership sought to be

conrmed in said proceedings, there being no

doubt of Acmes entitlement to the land. As it

is unquestionable that in the light of the

undisputed facts, t:e Inels, n*e! eit:e!

t:e $%06 o! t:e $%70 Constittion, col*

:';e :'* title in t:e(sel;es con!(e*

'n* !e?iste!e*, onl) ' !i?i* sse!;ience

to t:e lette! oB t:e l'@ @ol* *en) t:e

s'(e enet to t:ei! l'@Bl sccesso!=

in=inte!est ) ;'li* con;e)'nce @:ic:

;iol'tes no constittion'l"

%he ruling in I3=A8(> vs. (AS%=>4A=%>8>I3 --9 S(=A 7??0, that public landceases to be so only upon issuance of acerticate of title, is hereby reconsidered andabandoned. (orrect rule is that in Susi vs.=a!on, 9 "hil 9C9.O%he (ourt, in the light of the foregoing, is of the view, and so holds,that the ma#ority ruling in Ieralco must bereconsidered and no longer deemed to bebinding precedent. Te correct r'le asen'nciate& in te line of cases alrea&y

referre& to is tat aliena+le p'+lic lan& el& +y a possessor personally or tro'g is pre&ecessors-in-interestopenly contin'o'sly an& e"cl'sively for te prescri+e& stat'tory perio& /0years 'n&er Te P'+lic %an& Act asamen&e& is converte& to private

property +y te mere lapse or completion of sai& perio& ipso 2're.



)ollowing that rule and on the basis of theundisputed facts, the land sub#ect of thisappeal was already private property at thetime it was acquired from the 'nels by Acme.Acme thereby acquired a registrable title,there being at the time no prohibition againstsaid corporations holding or owning privateland. %he ob#ection that, as a #uridical person,

Acme is not qualied to apply for #udicialconrmation of title under section 9b0 of the"ublic 8and Act is technical, rather thansubstantial and, again, nds its answer in thedissent in Ieralco.A co!po!'tion t:'t 'ci!e* p!i;'te l'n*in $%2 (') :';e it !e?iste!e* in $%2*espite t:e p!o:iition in t:e $%70Constittion @:ic: c'nnot e ?i;en!et!o'cti;e eect 's to i(p'i! ;este*!i?:ts" %here is also nothing to preventAcme from reconveying the lands to the'nels and the latter from themselves

applying for conrmation of title and, afterissuance of the certicate+s of title in theirnames, deeding the lands bac& to Acme. 4utthis would be merely indulging in emptycharades, whereas the same result is moree6caciously and speedily obtained, with nopre#udice to anyone, by a liberal application of the rule on amendment to conform to theevidence suggested in the dissent in Ieralco.

;hile this opinion seemingly reverses anearlier ruling of comparatively recent vintage,in a real sense, it brea&s no precedent, but

only rea6rms and reestablished, as it were,doctrines the soundness of which has passedthe test of searching examination and inquiryin many past cases. 'ndeed, it is worth notingthat the ma#ority opinion, as well as theconcurring opinions of (hief Justice )ernandoand Justice Abad Santos, in Ieralco restedchieGy on the proposition that the petitionertherein, a #uridical person, was disqualiedfrom applying for conrmation of an imperfecttitle to public land under Section 9b0 of the"ublic 8and Act. =eference to the -?7<(onstitution and its Article P'L, Section --,

was only tangential, limited to a brief paragraph in the main opinion, and may, inthat context, be considered as essentiallyobiter. Ieralco, in short, decided noconstitutional question.

Disposition oB t:e C'se> %here being noreversible error in the appealed #udgment of

the 'ntermediate Appellate (ourt, the same isA))'=I35.

I3 ORIINAL REISTRATION 8C:'pte! III9$" ORDINAR< Re?ist!'tion

+!ocee*in? 8A /*ici'lCon!('tion oB I(pe!Bect Title9

A" QUALIFIED A++LICANTS

Section $." ;ho may apply. %hefollowing persons may le in theproper (ourt of )irst 'nstance anapplication for registration of title toland, whether personally or throughtheir duly authori!ed representatives$

-0 %hose who by themselves orthrough their predecessorsininterest have been in open,continuous, exclusive and notoriouspossession and occupation of alienable and disposable lands of the public domain under a bonade claim of ownership since June-C, -?9@, or earlier.

C0 %hose who have acquiredownership of private lands byprescription under the provision of existing laws.

<0 %hose who have acquired

ownership of private lands orabandoned river beds by right of accession or accretion under theexisting laws.

90 %hose who have acquiredownership of land in any othermanner provided for by law.

;here the land is owned in common,all the coowners shall le theapplication #ointly.

;here the land has been sold underpacto de retro, the vendor a retro mayle an application for the originalregistration of the land, provided,however, that should the period forredemption expire during thependency of the registrationproceedings and ownership to theproperty consolidated in the vendee a



retro, the latter shall be substituted forthe applicant and may continue theproceedings.

A trustee on behalf of his principal mayapply for original registration of anyland held in trust by him, unlessprohibited by the instrument creating

the trust.

CASESCASE $

/EAN TAN, =>S3883= (. ANA('N%>, (A=8>8>'8> 3S"'N35A and 5A'SQ A8'A5> IANA>'S,represented in this act by their Attorneyin)act, IA. ;'8E38I'NA 3. %>4'ASvs.RE+U4LIC OF THE +HILI++INES:.=. No. -?<99<* April -2, C-C 22? S(=A9??0

NOTES IN CASE" G )or a piece of land to bequalied for registration under paragraph C0of Section -9, ".5. No. -@C?, the applicantmust conclusively prove that the land isprivate and not part of the public domain* Alllands not otherwise appearing to be clearlywithin private ownership are presumed tobelong to the State. =epublic vs. 'mperial(redit (orporation, @@@ S(=A <-9 RC0.

%ax declarations are good indicia of possession in the concept of owner for no onein his right mind would be paying taxes for a

property that is not in his actual orconstructive possession* ;hat is categoricallyrequired by law is open, continuous, exclusiveand notorious possession and occupationunder a bona de claim of ownership since

June -C, -?9@ or earlier. =epublic vs. =i!alvo, Jr., 299 S(=A @-2 RC--0

C'se N't!e> "3%'%'>N for review oncertiorari of the decision and resolution of the(ourt of Appeals

FACTS

• RJune -9, C- %he petitioners ledwith the =%( of Naic, (avite, anapplication for land registrationcovering a parcel of land situated in4arangay 4ancod, 'ndang, (avite andwith an area of 2,?C square meters.

• %he petitioners alleged that theyacquired the sub#ect property from:regonio :atdula pursuant to a 5eed

of Absolute Sale dated April C@, -??2*and they and their predecessorsininterest have been in open, continuousand exclusive possession of thesub#ect property in the concept of anowner for more than < years.

• =%( granted the application* (A gavedue course to the appeal by the

=epublic ruling that the petitionersfailed to prove that they and theirpredecessorsininterest have been inpossession of the sub#ect property forthe requisite period of < years.

→ =ecords show that theappelleesM possession over thesub#ect property can berec&oned only from C- June-?<, the date when accordingto evidence, the sub#ectproperty became alienable anddisposable. )rom said date up

to the ling of the applicationfor registration of title over thesub#ect property on -9 JuneC-, only eighteen -0 yearshad lapsed.

→ %hus, appelleesM possession of the sub#ect property fell short of the requirement of open,continuous and exclusivepossession of at least < years.

ISSUE> ;hether the petitioners have proventhemselves qualied to the benets under the

relevant laws on the conrmation of imperfector incomplete titles.

HELD NO"L'n* Re?ist!'tion +lic L'n* Act 8C"A"No" $.$9 Section $$ oB t:e +lic L'n*Act p!o;i*es t:'t one oB t:e (o*es oB *isposin? plic l'n*s sit'le Bo!'?!iclt!'l p!poses is ) con!('tionoB i(pe!Bect o! inco(plete titles"J(ommonwealth Act No. -9-, otherwise &nownas the T"ublic 8and ActU governs theclassication and disposition of lands forming

part of the public domain. Section -- thereof provides that one of the modes of disposingpublic lands suitable for agricultural purposesis by Tconrmation of imperfect or incompletetitlesU. Section 9 thereof enumerates thosewho are considered to have acquired animperfect or incomplete title over an alienableand disposable public land.



+!ope!t) Re?ist!'tion Dec!ee 8+"D" No"$62%9 +!esi*enti'l Dec!ee No" $62%8+"D" No" $62%9, ot:e!@ise Kno@n 's t:e+!ope!t) Re?ist!'tion Dec!ee,J is 'co*ic'tion oB 'll t:e l'@s !el'ti;e to t:e!e?ist!'tion oB p!ope!t)""residential5ecree No. -@C? ".5. No. -@C?0, otherwise&nown as the T"roperty =egistration 5ecreeU,

is a codication of all the laws relative to theregistration of property and Section -9 thereof species those who are qualied to registertheir incomplete title over an alienable anddisposable public land under the %orrenssystem.

Fo! ones possession 'n* occp'tion oB 'n 'lien'le 'n* *ispos'le plic l'n*to ?i;e !ise to 'n i(pe!Bect title, t:es'(e s:ol* :';e co((ence* on /ne$2, $%.6 o! e'!lie!" On t:e ot:e!, Bo! oneto cl'i( t:'t :is possession 'n*

occp'tion oB p!i;'te p!ope!t) :'s!ipene* to i(pe!Bect title, t:e s'(es:ol* :';e een Bo! t:e p!esc!ipti;epe!io* p!o;i*e* n*e! t:e Ci;il Co*e"Asthis (ourt claried in Eeirs of Ialabanan v.=epublic of the "hilippines, @7 S(=A -7CC?0, and =epublic of the "hilippines v. 3astSilverlane =ealty 5evelopment (orporation,222 S(=A 9- C-C0, Section -9-0 coversTalienable and disposable landsU whileSection -9C0 covers Tprivate propertyU. %hus,for oneMs possession and occupation of analienable and disposable public land to give

rise to an imperfect title, the same shouldhave commenced on June -C, -?9@ or earlier.>n the other, for one to claim that hispossession and occupation of private propertyhas ripened to imperfect title, the sameshould have been for the prescriptive periodprovided under the (ivil (ode. ;ithout needfor an extensive extrapolation, the privateproperty contemplated in Section -9C0 ispatrimonial property as dened in Article 9C-in relation to Articles 9C and 9CC of the (ivil(ode.

+ossession 'n* occp'tion oB 'n'lien'le 'n* *ispos'le plic l'n* Bo!t:e pe!io*s p!o;i*e* n*e! t:e Ci;ilCo*e @ill not con;e!t it to p't!i(oni'l o!p!i;'te p!ope!t)" T:e!e (st e 'nep!ess *ecl'!'tion t:'t t:e p!ope!t) isno lon?e! inten*e* Bo! plic se!;ice o!t:e *e;elop(ent oB n'tion'l @e'lt:"'twas explained in Eeirs of Ialabanan and 3astSilverlane, that possession and occupation of

an alienable and disposable public land forthe periods provided under the (ivil (ode willnot convert it to patrimonial or privateproperty. %here must be an expressdeclaration that the property is no longerintended for public service or thedevelopment of national wealth. 'n theabsence thereof, the property remains to be

alienable and disposable and may not beacquired by prescription under Section -9C0of ".5. No. -@C?.

E'st Sil;e!l'ne C'se, sp!'Hei!s oB 1'l''n'n C'se, sp!'

CASE 2(='S>8>:> (. DO1INOvs. S3L3='N> AN5 RA<1UNDO LANDICHO,

J8'AN A4388>, IA=%A 53 SA:N AN535'%EA :. SA=I'3N%>

C'se N't!e> "3%'%'>N for review oncertiorari of a decision of the (ourt of Appeals

FACTS

• 5omingo led RApril C, -??< with the=%( of %agaytay (ity an application forregistration of ve @0 parcels of landlocated at 4arangay %olentino,

%agaytay, have a total land area of <,?7@ square meters.

→ (8A'I$ 5omingo bought saidlots from :enoveva Ianlapit:enoveva0 in -?9 and has

since been in continuous, open,public, adverse anduninterrupted possessionthereof in the concept of anowner.

→ "rior to his purchase of the lots,:enoveva had been inpossession thereof in theconcept of an owner for morethan < years.

• Acting on the directive of the =%(, the5irector of 8ands led a =eport that1per records of the 8ands Ianagement

4ureau in Ianila, the land involved insaid case was not covered by any landpatent or by public land applicationpending issuance of patent.1 G thesame was supported thru a report by the Regional Technical Director Region! "#ce$

• Eerein respondents opposed* duringthe pendency of his application,



5omingo died* =%( granted hisapplication.

• =espondents appealed to (A* (A setaside =%(Ms decision ruling$

→ that while 5omingo sought #udicial conrmation of hisimperfect title under the "ublic8and Act and Section -9 -0 of

"residential 5ecree ".5.0 No.-@C?, 1%he "roperty=egistration 5ecree,1 he failedto prove that he and hispredecessorsininterest hadbeen in possession andoccupation of the lots under abona de claim of ownershipsince June -C, -?9@ or earlier.

→ that 5omingo failed to presentthe alleged deed of saleexecuted by :enoveva and1could only prove through his

%ax 5eclaration that hispossession in the concept of anowner started only in -?9.

• A I= was led by 5omingo but thewas denied by the (A. Eence, thispetition.

ISSUE> ;hether or not 5omingo is entitled tothe registration of the lots in questionpursuant toSection -9, sub pars. -0 and 90 of ".5. -@C?.

HELD> NO"

%an& Registration3 Re4'isites3 To provetat a lan& is aliena+le an applicant m'st concl'sively esta+lis tee"istence of a positive act of tegovernment s'c as a presi&ential

proclamation or an e"ec'tive or&er or a&ministrative action investigationreports of te 5'rea' of %an&sinvestigator or a legislative act or stat'te.6 Section -9 of ".5. No. -@C?provides that t o thus be entitled toregistration of a land, the applicant must

prove that a0 the land applied for forms partof the disposable and alienable agriculturallands of the public domain* and b0 he hasbeen in open, continuous, exclusive, andnotorious possession and occupation of thesame under a bona de claim of ownershipeither since time immemorial or since June-C, -?9@.

All lands not otherwise appearing to be clearlywithin private ownership are presumed tobelong to the State, and unless it has beenshown that they have been reclassied by theState as alienable or disposable to a privateperson, they remain part of the inalienablepublic domain. To p!o;e t:'t ' l'n* is'lien'le, 'n 'pplic'nt (st conclsi;el)

est'lis: t:e eistence oB ' positi;e 'ctoB t:e ?o;e!n(ent, sc: 's 'p!esi*enti'l p!ocl'('tion o! 'neecti;e o!*e!, o! '*(inist!'ti;e'ction, in;esti?'tion !epo!ts oB t:e4!e' oB L'n*s in;esti?'to! o! 'le?isl'ti;e 'ct o! st'tte"

"3%'%'>N 53N'35.

CASE 0RE+U4LIC OF THE +HILI++INES vs.

CAND< 1AMER, INC", 's !ep!esente* )its +!esi*ent, ON <EE SEE"R" No" $07 /ne 22, 2-- 8.%2SCRA 2729

FACTS

• Sometime in -??, (andy Ia&er, 'nc.decided to purchase a parcel of land in(ainta%aytay (adastre, specicallylocated below the reglementary la&eelevation of -C.@ meters, about ?meters away from the 8aguna de 4ay,and bounded on the southwest by the

Ianggahan )loodway, and on thesoutheast by a legal easement.

• After the 5eed of Absolute Sale in itsfavor was executed by Antonio, 3ladiaand )elisa all surnamed (ru!0,(andyma&er proceeded to apply forregistration for title over the sub#ectproperty with the I%( of %aytay, =i!al.

• =espective reports were submitted onthe status of the parcel of land sub#ectof (andyma&erMs application

→ (ommunity 3nvironment andNatural =esources >6cer

(3N=>0 of Antipolo (ity ledon his =eport declaring that1Rthe land falls within theAlienable and 5isposable Voneand that the property is thesub#ect of (3N=> (ase No.@C?70 entitled "erpetua San

Jose v. Almario (ru!.



→ >n the other hand, the 8=A,recommended the exclusion of 8ot No. <-<4 on the groundthat it is a legal easement andintended for public use, hence,inalienable and indisposable.

• %he 8aguna 8a&e 5evelopment

Authority 885A0 approved a resolutionproviding that untitled shoreland areasmay be leased sub#ect to conditionsenumerated therein W thus theamendment of (andyma&erMsapplication.

• >n July C-, the =epublic of the"hilippines, the 885A led itsopposition which alleged that the lotsub#ect of theapplication forregistration may not be alienated anddisposed since it is considered part of the 8aguna 8a&e 4ed, a public land

within, its #urisdiction.→ "etitioner asserts that the

3ngineerMs Survey =eport andthe 8aguna de 4ay ShorelandSurvey both show that 8ot No.<-<A is located below thereglementary la&e elevation,hence, forms part of the 8aguna8a&e bed. 't insists that theproperty belongs to the publicdomain as classied underArticle @C of the (ivil (ode.

→ =espondent failed to presentincontrovertible evidence towarrant the registration of theproperty in its name as owner.

%he testimonies of the twowitnesses only proved that thepossession of the land may becharacteri!ed as mere casualcultivation* they failed to provethat its predecessors occupiedthe land openly, continuously,exclusively, notoriously andadversely in the concept of

owner since June -C, -?9@ orearlier.

ISSUE8s9> 8$9 ;hether the property sub#ectof the amended application is alienable anddisposable property of the State*

C0 and if so, whether respondent adduced therequisite quantum of evidence to prove its

ownership over the property under Section -9of ".5. -@C?.

HELD>

(1) %he property sub#ect of this applicationwas alienable and disposable publicagricultural land until July -, -?22.Eowever, respondent failed to prove that

it possesses registerable title over theproperty.

'n this case, the evidence on record showsthat the property is alienable agriculturalland. =omeo (adano of the (ommunity3nvironment and Natural =esources >6ce,Antipolo =i!al, certied that the propertyTfalls within the Alienable and 5isposable!one, under 8and (lassication "ro#ect No.@A, per 8.(. Iap No. 2<? certiedreleased on Iarch --, -?C7.U

Ho@e;e!, n*e! R"A" No" .6- @:ic:@'s 'pp!o;e* on /l) $, $%, l'n*sloc'te* 't 'n* elo@ t:e ('i((l'Ke le;el oB ele;'tion oB t:e L'?n'*e 4') '!e plic l'n*s @:ic: Bo!(p'!t oB t:e e* oB s'i* l'Ke" Such landsdenominated as la&eshore areas are linearstrips of open space designed to separateincompatible element or uses, or tocontrol pollution+nuisance, and foridentifying and dening developmentareas or !one. Such areas of the la&e withan approximate total area of -9,

hectares form a strip of the la&ebed alongits shores alternately submerged orexposed by the annual rising and loweringof the la&e water. %hey haveenvironmental ecological signicance andactual potential economic benets.

nder Section - of the law, the nationalpolicy of the State is to promote andaccelerate the development and balancedgrowth of the 8aguna 8a&e area and thesurrounding provinces, cities and townswithin the context of the national and

regional plans and policies for social andeconomic development and to carry outthe development of the 8aguna 8a&eregion with due regard and adequateprovisions for environmental managementand control, preservation of the quality of human life and ecological systems, andthe prevention of undue ecologicaldisturbances, deterioration and pollution.



(2) Applicants for conrmation of imperfect title m'st terefore

prove te follo)ing7 a tat telan& forms part of te &isposa+lean& aliena+le agric'lt'ral lan&s of te p'+lic &omain3 an& + tat tey ave +een in opencontin'o's e"cl'sive an&

notorio's possession an& occ'pation of te same 'n&er a+ona &e claim of o)nersipeiter since time immemorial or since 8'ne 1 19:;.

nder the =egalian doctrine, all landsnot otherwise appearing to be clearlywithin private ownership are presumedto belong to the State. %hepresumption is that lands of whateverclassication belong to the State.nless public land is shown to have

been reclassied as alienable ordisposable to a private person by theState, it remains part of the inalienablepublic domain. "roperty of the publicdomain is beyond the commerce of man and not susceptible of privateappropriation and acquisitiveprescription. >ccupation thereof in theconcept of owner no matter how longcannot ripen into ownership and beregistered as a title. %he statute of limitations with regard to publicagricultural lands does not operate

against the State unless the occupantproves possession and occupation of the same after a claim of ownership forthe required number of years toconstitute a grant from the State.

No public land can be acquired byprivate persons without any grant fromthe government, whether express orimplied. 't is indispensable that therebe a showing of a title from the State.Te rationale for te perio& <sincetime immemorial or since 8'ne 1

19:;= lies in te pres'mption tat te lan& applie& for pertains tote State an& tat te occ'pantsor possessor claim an interest tereon only +y virt'e of teir imperfect title as contin'o'sopen an& notorio's possession.

"3%'%'>N :=AN%35.

CASE .RE+U4LIC OF THE +HILI++INES;s"THE HONORA4LE COURT OF A++EALS'n* CORAON NAUIT"R" No" $..-67" /'n'!) $7, 2--6 8..SCRA ..29

FACTS

• (ora!on Naguit led a petition forregistration of title which see&s #udicialconrmation of her imperfect title overa parcel of land in Nabas, A&lan.

• 't was alleged that Naguit and herpredecessorsininterest have occupiedthe land openly and in theconcept of owner without any ob#ection from anyprivate person or even thegovernmentuntil she led herapplication for registration.

• %he I(%( rendered a decisionconrming the title in the name of Naguit upon failure of =ustico Angelesto appear during trial after ling hisformal opposition to the petition.

• %he Solicitor :eneral, representing the=epublic of the "hilippines, led amotionfor reconsideration on theground that the property which is inopen, continuous andexclusivepossession must rst be alienable.

• Naguit could not have maintained abonade claim of ownership since thesub#ect land was declared as alienableand disposableonly on >ctober -@,-?. %he alienable and disposablecharacter of the land shouldhavealready been established since June-C, -?9@ or earlier.

ISSUE> ;hether or not it is necessary under

Section -9 -0 of the "roperty =egistration

5ecree that the sub#ect land be rst classied

as alienable and disposable beforethe

applicantMs possession under a bona de

claim of ownership could even start.

HELD> %an& Titles3 %an& Registration3Re4'isites for te ling of an applicationfor registration of title 'n&er Section1:1.O%here are three obvious requisites forthe ling of an application for registration of title under Section -9-0Othat the property inquestion is alienable and disposable land of



the public domain* that the applicants bythemselves or through their predecessorsininterest have been in open, continuous,exclusive and notorious possession andoccupation, and* that such possession isunder a bona de claim of ownership since

June -C, -?9@ or earlier.

Te more reasona+le interpretation of Section 1:1 is tat it merely re4'ireste property so'gt to +e registere& asalrea&y aliena+le an& &isposa+le at tetime te application for registration of title is le&.6 %he more reasonableinterpretation of Section -9-0 is that itmerely requires the property sought to beregistered as already alienable and disposableat the time the application for registration of title is led. 'f the State, at the time theapplication is made, has not yet deemed itproper to release the property for alienation

or disposition, the presumption is that thegovernment is still reserving the right toutili!e the property* hence, the need topreserve its ownership in the Stateirrespective of the length of adversepossession even if in good faith. Eowever, if the property has already been classied asalienable and disposable, as it is in this case,then there is already an intention on the partof the State to abdicate its exclusiveprerogative over the property.

Tere are no material &i,erences

+et)een Section 1:1 of te Property Registration Decree an& Section :>+ of te P'+lic %an& Act as amen&e&3 Tes'+2ect lan&s 'n&er Section :>+ of teP'+lic %an& Act an& Section 1:1 of teProperty Registration Decree are of tesame type.6 %here are no materialdiBerences between Section -9-0 of the"roperty =egistration 5ecree and Section9b0 of the "ublic 8and Act, as amended.

%rue, the "ublic 8and Act does refer toTagricultural lands of the public domain,Uwhile the "roperty =egistration 5ecree uses

the term Talienable and disposable lands of the public domain.U 't must be noted thoughthat the (onstitution declares that Talienablelands of the public domain shall be limited toagricultural lands.U (learly, the sub#ect landsunder Section 9b0 of the "ublic 8and Act andSection -9-0 of the "roperty =egistration5ecree are of the same type.

"rescription is one of the modes of acquiringownership under the (ivil (ode. %here is aconsistent #urisprudential rule that propertiesclassied as alienable public land may beconverted into private property by reason of open, continuous and exclusive possession of at least thirty <0 years. ;ith suchconversion, such property may now fall within

the contemplation of Tprivate landsU underSection -9C0, and thus susceptible toregistration by those who have acquiredownership through prescription. %hus, even if possession of the alienable public landcommenced on a date later than June -C,-?9@, and such possession being open,continuous and exclusive, then the possessormay have the right to register the land byvirtue of Section -9C0 of the "roperty=egistration 5ecree.

%he assailed Decision of the (ourt of Appeals

dated July -C, C is hereby A))'=I35. Nocosts.

4" ACCRETIONCASE $NEW REENT SOURCES, INC" vs.TEOFILO 3ICTOR TAN/UATCO, /R", 'n*3ICENTE CUE3AS,"R" No" $--" Ap!il $, 2--%

FACTS

"etitioner through counsel prays for thereversal of the >rders dated )ebruary -C,C@- and July -, C@C of the =egional %rial(ourt =%(0 of (alamba (ity, 4ranch <7, in(ivil (ase No. C22C?(. %he =%( hadgranted the demurrer to evidence led byrespondent %an#uatco, and then deniedpetitionerMs motion for reconsideration.

• "etitioner New =egent Sources, 'nc.N=S'0 led a (omplaint for=escission+5eclaration of Nullity of(ontract, =econveyance and 5amagesagainst respondent %an#uatco and the

=egister of 5eeds of (alamba beforethe =%( of (alamba, 8aguna, 4ranch<7.

→ N=S' alleged that in -??9, itauthori!ed Licente ". (uevas ''',its (hairman and "resident, toapply on its behalf, for theacquisition of two parcels ofland by virtue of its right of

http://www.lawphil.net/judjuris/juri2009/apr2009/gr_168800_2009.html#fnt1







accretion. (uevas purportedlyapplied for the lots in his nameby paying a cetain sum to the4ureau of 8ands.

→ >n January C, -??@, (uevas andhis wife executed a Loting %rustAgreement over their shares ofstoc& in the corporation.

→ "ending approval of theapplication with the 4ureau of8ands, (uevas assigned hisright to %an#uatco

→ >n Iarch -C, -??2, the 5irectorof 8ands released an >rder,which approved the transfer ofrights from (uevas to %an#uatco

→ %ransfer (erticates of %itleNos. %<2?92 and %<2?97 were then issued in thename of %an#uatco.

• %an#uatco claimed that it was (uevaswho was alleged to have defraudedthe corporation. Ee averred furtherthat the complaint did not charge himwith &nowledge of the agreementbetween (uevas and N=S'.

• 'n dismissing N=S'Ms complaint andgranting %anuatcoMs demurrer toevidence0, the =%( cited the >rder ofthe 5irector of 8ands and certaininsu6ciencies in the allegations in thecomplaint.

→ =%( further held that %an#uatco

is an innocent purchaser forvalue.

• N=S' moved for reconsideration, but itwas denied.

• Eence, N=S' led the instant petition.

ISSUE> NRSI 'nc:o!s its cl'i( o;e! t:el'n*s sPects oB t:is c'se on t:e !i?:toB 'cc!etion and thus submitted in evidence,titles to four parcels of land, which allegedlyad#oin the lots in the name of %an#uatco.

HELD> Accretion3 Re4'isites to Ac4'ire

Property +y Accretion.O4ut it must bestressed that accretion as a mode of acquiringproperty under Article 9@7 of the (ivil (oderequires the concurrence of the followingrequisites$ -0 that the deposition of soil orsediment be gradual and imperceptible* C0that it be the result of the action of the watersof the river* and <0 that the land whereaccretion ta&es place is ad#acent to the ban&sof rivers. %hus, it is not enough to be a

riparian owner in order to en#oy the benetsof accretion. >ne who claims the right ofaccretion must show by preponderantevidence that he has met all the conditionsprovided by law.

Ot:e!s+!ope!t) Recon;e)'nce An 'ction Bo!

!econ;e)'nce is one t:'t seeKs tot!'nsBe! p!ope!t), @!on?Bll) !e?iste!e*) 'not:e!, to its !i?:tBl 'n* le?'lo@ne!""etitioner led a complaint forrescission+declaration of nullity of contract,reconveyance and damages againstrespondents. An action for reconveyance isone that see&s to transfer property,wrongfully registered by another, to itsrightful and legal owner. 'n an action forreconveyance, the certicate of title isrespected as incontrovertible. ;hat is soughtinstead is the transfer of the property,

specically the title thereof, which has beenwrongfully or erroneously registered inanother personMs name, to its rightful andlegal owner, or to one with a better right.

Reisites to W'!!'nt ' Recon;e)'nce" %o warrant a reconveyance of the land, thefollowing requisites must concur$ -0 theaction must be brought in the name of aperson claiming ownership or dominical rightover the land registered in the name of thedefendant* C0 the registration of the land inthe name of the defendant was procured

through fraud or other illegal means* <0 theproperty has not yet passed to an innocentpurchaser for value* and 90 the action is ledafter the certicate of title had alreadybecome nal and incontrovertible but withinfour years from the discovery of the fraud, ornot later than - years in the case of animplied trust. "etitioner failed to show thepresence of these requisites.

(erticate of Title3 Innocent P'rcaser for ?al'e3 A person &ealing )itregistere& lan& may safely rely 'pon te

correctness of te certicate of titleiss'e& terefor an& te la) )ill in no)ay o+lige im to go +ein& tecerticate to &etermine te con&ition of te property3 #eaning of an Innocent P'rcaser for ?al'e.6"etitioner introducedin evidence %(% Nos. %<2?92 and %<2?97in the name of respondent %an#uatco. %hesetitles bear a certication that %an#uatcoMs titleswere derived from >(% No. C9@ in the name



of no less than the =epublic of the "hilippines.Eence, we cannot validly and fairly rule thatin relying upon said title, %an#uatco acted inbad faith. A person dealing with registeredland may safely rely upon the correctness of the certicate of title issued therefor and thelaw will in no way oblige him to go behind thecerticate to determine the condition of the

property. %his applies even more particularlywhen the seller happens to be the =epublic,against which, no improper motive can beascribed. %he law, no doubt, considers

%an#uatco an innocent purchaser for value. Aninnocent purchaser for value is one who buysthe property of another, without notice thatsome other person has a right or interest insuch property and pays the full price for thesame, at the time of such purchase or beforehe has notice of the claims or interest of someother person in the property."3%'%'>N 53N'35.

CASE 2A?ne ;" Di!ecto! oB L'n*s "R" No".-0%%" Fe!'!) , $%%-"A?ne ;" IAC "R" No" 72266" Fe!'!) ,$%%-"Secon* Di;ision, Re?'l'*o 8/9> .conc!!in?

FACTS %he land sub#ect matter of the case wasoriginally covered by )ree "atent C<C2<issued on -7 April -?<7 in the name of

Eerminigildo Agpoon. >n C- Iay -?<7,pursuant to the said patent, the =egister of 5eeds of "angasinan issued to saidEerminigildo Agpoon >(% C<7. "resentacionAgpoon :ascon inherited the said parcel of land upon the death of her father,Eerminigildo, and was issued %(% <CC? on 2April -?2. "resentacion declared the saidland for taxation purposes in her name under

%5 --@2 and taxes were paid thereon in hername.

>n -< April -?7-, spouses Joaquin and

"resentacion :ascon led (ivil (ase CC2 inthe then ()'"angasinan for recovery of possession anddamages against Iarcelino (. Agne, )elix>riane, Agaton %aganasrepresented by )lorentino (. %aganas0, Eilario3scorpi!o, 'sabelo Iauricio, Eeirs of =oman5amaso Jorge5amaso and Ale#andro 5amaso0, Eeirs of )rancisco =amos 3ncarnacion =. 8eano and

5ominga =. Iedrano0, Eeirs of Sabina :elacioAgapito Serapio Agapito and NicolasaAgapito0, )eli!a 5iccion Agne, 3stanislao:orospe represented by 3li!abeth :. 4adua0,8ibrado 4adua, Nicolas Lillanieva, Eeirs of (arlos "alado )ortunata "alado and 'sabelita"alado0, "rimitivo %aganas, "anlo Soingco,4ernardo "alattao, Iarcelino S. Santos and

"aulino 5. Agne Jr. minor, represented by)eli!a 5iccion Agne0. %heir complaint statesthat they are the registered owners under %(%<CC? of the parcel of land situated in 4arrio4antog, Asingan, "angasinan which is now inthe possession of Agne, et.al.* that during the

Japanese occupation, the latter, ta&ingadvantage of the abnormal conditions thenobtaining, too& possession of said land bymeans of fraud, stealth, strategy andintimidation* that :ascon repeatedlydemanded the surrender of the physicalpossession of said property but the latter

refused.

Agne, et.al. alleged that the land in questionwas formerly a part of the river bed of theAgno(hico =iver* that in the year -?C, a bigGood occurred which caused the said river tochange its course and abandon its originalbed* that by virtue of the provisions of Article<7 of the Spanish (ivil (ode which was thenthe law in force, Agne, et.al., by operation of law, became the owners by accession oraccretion of the respective aliquot parts of said river bed bordering their properties* that

since -?C, they and their predecessors ininterest occupied and exercised dominionopenly and adversely over said portion of theabandoned river bed in question abuttingtheir respective riparian lands continuously upto the present to the exclusion of all otherpersons, particularly Eerminigildo Agpoon*that they have introduced improvementsthereon by constructing irrigation canals andplanting trees and agricultural crops thereonand converted the land into a productive area.

>n 2 Iarch -?79, while the above case was

still pending, Agne, et.al. led a complaintagainst 5irector of 8ands and spouses Agpoonwith the former ()' "angasinan for annulmentof title, reconveyance of and+or action to cleartitle to a parcel of land, which action wasdoc&eted as (ivil (ase C29?. Agne, et. al.alleged in their said complaint that the land inquestion, which was formerly a portion of thebed of Agno(hico river which was abandonedas a result of the big Good in -?C, belongs to



them pursuant to the provision of Article <7of the old (ivil (ode* that it was only on -<April -?7-, when spouses led a complaintagainst them, that they found out that thesaid land was granted by the :overnment toEerminigildo Agpoon under )ree "atentC<C2<, pursuant to which >(% C<7 wasissued in the latterMs name* and that the said

patent and subsequent titles issued pursuantthereto are null and void since the said land,an abandoned river bed, is of privateownership and, therefore, cannot be thesub#ect of a public land grant.

>n C- June -?79, the trial court rendered adecision in (ivil (ase CC2, ordering Agne,et.al. to surrender physical possession of landin question, to pay in soludum the produce of the land "@, per year0 from the date of the ling of the action at the rate of 2/interest per annum until fully paid* to pay in

solidum the amount of " representingattorneyMs fees* and to pay the costs.

Agne, et.al. appealed to the appellate court.>n < January -?@ the former 'A( a6rmed intoto in A(:=(L 2<= the decision of the trial court, andwith the denial of Agne et.al.Ms motion forreconsideration, Agne, et.al. led a petitionfor review on certiorari with the Supreme(ourt := 7CC@@0.

>n C9 June -?79, the ()' "angasinan, acting

on the motion to dismiss led by the 5irectorof 8ands and spouses Agpoon, issued an orderdismissing (ivil (ase C29? for annulment of title by merely citing the statement in thecase of Antonio, et al. vs. 4arroga, et al. thatan action to annul a free patent many yearsafter it had become nal and indefeasiblestates no cause of action. Agne, et.alMs motionfor the reconsideration of the order wasdenied on -- September -?79, hence thepetition for review on certiorari := 89<??0

%he Supreme (ourt reversed and set asidethe assailed decision of 'A( in A(:= (L

2<= and the questioned order of dismissal of the trial court in its (ivil (aseC29?, and rendered #udgment ordering the:ascon to reconvey the parcel of land toAgne, et.al.

ISSUE> W:o o@ns t:e p!ope!t)

A?ne o@ns p!ope!t) Rip'!i'n o@ne!sipso B'cto o@ne!s oB ''n*one* !i;e!e* 8Ol* Ci;ilCo*e9

%he old (ivil (ode, the law then in force,provides that Tthe beds of rivers which remainabandoned because the course of the water

has naturally changed belong to the owners of the riparian lands throughout their respectivelengths. 'f the abandoned bed divided estatesbelonging to diBerent owners, the newdividing line shall run at equal distancetherefrom.U %hus, once the river bed has beenabandoned, the riparian owners become theowners of the abandoned bed to the extentprovided by this article. %he acquisition of ownership is automatic. %here need be no acton the part of the riparian owners to sub#ectthe accession to their ownership, as it issub#ect thereto ipso #ure from the moment the

mode of acquisition becomes evident, withoutthe need of any formal act of acquisition.Such abandoned river bed had fallen to theprivate ownership of the owner of the riparianland even without any formal act of his willand any unauthori!ed occupant thereof will beconsidered as a trespasser. %he right in re tothe principal is li&ewise a right in re to theaccessory, as it is a mode of acquisitionprovided by law, as the result of the right of accretion. Since the accessory follows thenature of the principal, there need not be anytendency to the thing or manifestation of the

purpose to sub#ect it to our ownership, as it issub#ect thereto ipso #ure from the moment themode of acquisition becomes evident. %heright of the owner of land to additions theretoby accretion has been said to rest in the lawof nature, and to be analogous to the right of the owner of a tree to its fruits, and the ownerof Goc&s and herds to their natural increase.

'n the present case, Agne, et.al. becameowners of aliquot portions of said abandonedriver bed as early as -?C, when the Agno=iver changed its course, without the

necessity of any action or exercise of possession on their part, it being an admittedfact that the land in dispute, prior to itsregistration, was an abandoned bed of theAgno =iver and that Agne, et. al. are theriparian owners of the lands ad#oining the saidbed.

CASE 0



RE+U4LIC >) %E3 "E'8'""'N3S 5'=3(%>=>) 8AN5S0vs.

%E3 E>N. COURT OF A++EALS, 4EN/A1INTANCINCO, AUCENA TANCINCO RE<ES,1ARINA TANCINCO I1+ERIAL 'n* 1ARIOC" TANCINCONo. 82-297. >ctober -C, -?9.

FACTS

%his is a petition for certiorari to set aside thedecision of the respondent (ourt of Appealsa6rming the decision of the ()' 4ulacan,which found that 8ots - and C of "lan "su-<-?C are accretion to the land covered by

%ransfer (erticate of %itle No. ?7? andordered their registration in the names of theprivate respondents.

• =espondents 4en#amin %ancinco,A!ucena %ancinco =eyes, Iarinashould be 1Iaria10 %ancinco 'mperialand Iario (. %ancinco are registeredowners of a parcel of land covered bysituated at 4arrio bihan,Ieycauayan, 4ulacan bordering on theIeycauayan and 4ocaue rivers.

• R-?7< "=s led an application for theregistration of three lots ad#acent totheir shpond property

• A year after, Assistant "rovincial )iscalAmando (. Licente, in representationof the 4ureau of 8ands led a writtenopposition to the application forregistration.

• R-?7@ "=s partially withdrew theirapplication for registration with respectto 8ot < of "lan "su-<-?C in line withthe recommendation of the(ommissioner appointed by the (ourt.

• 8ots - and C sub#ect of the proceedings

• ()' granted the application and

declared that lands in question areaccretions to "=sM shponds.

• R-?72 "etitioner =epublic appealed tothe respondent (A.

• (A a6rmed in toto the ()'Ms decision.

%here are facts and circumstances in therecord which render untenable the ndings of the trial court and the (ourt of Appeals thatthe lands in question are accretions to theprivate respondents shponds.

%he petitioner submits that there is noaccretion to spea& of under Article 9@7 of the

New (ivil (ode because what actuallyhappened is that the private respondentssimply transferred their di&es further downthe river bed of the Ieycauayan =iver, andthus, if there is any accretion to spea& of, it ismanmade and articial and not the result of the gradual and imperceptible sedimentationby the waters of the river.

>n the other hand, the private respondentsrely on the testimony of Irs. Lirginia AcuXa tothe eBect that$ t%&$'(h)w*'

xxx xxx xxx

... when witness rst saw theland, namely, 8ots - K C, theywere already dry almost at thelevel of the "ilapil of theproperty of 5r. %ancinco, andthat from the boundaries of thelots, for about two C0 armslength the land was still dry upto the edge of the river* thatsometime in -?@-, a new "ilapil

was established on theboundaries of 8ots - K C andsoil from the old "ilapil wastransferred to the new "ilapiland this was done sometime in-?@-* that the new lots werethen converted into shpond,and water in this shpond wastwo C0 meters deep on the sideof the "ilapil facing the shpond... .

%he private respondents submit that the

foregoing evidence establishes the fact of accretion without human interventionbecause the transfer of the di&e occurredafter the accretion was complete.

ISSUE> W:et:e! petitione! is co!!ect

HELD> <ES"



+!ope!t) L'n* Re?ist!'tion ReisitesBo! l'n* 'cc!etion to t'Ke pl'ce Bo!enet oB !ip'!i'n o@ne!" %he abovequoted article requires the concurrence of three requisites before an accretion coveredby this particular provision is said to haveta&en place. %hey are -0 that the deposit begradual and imperceptible* C0 that it be made

through the eBects of the current of thewater* and <0 that the land where accretionta&es place is ad#acent to the ban&s of rivers.

Fo! 'cc!etion o! 'll;ion to Bo!( p'!t oB !e?iste!e* l'n* oB !ip'!i'n o@ne!, t:e?!'*'l 'll;i'l *eposits (st e *e tot:e eects oB t:e !i;e!s c!!ent"Deposits ('*e ) :('n inte!;ention'!e ecl*e*" %he requirement that thedeposit should be due to the eBect of thecurrent of the river is indispensable. %hisexcludes from Art. 9@7 of the New (ivil (ode

all deposits caused by human intervention.Alluvion must be the exclusive wor& of nature.'n the instant case, there is no evidencewhatsoever to prove that the addition to thesaid property was made gradually through theeBects of the current of the Ieycauayan and4ocaue rivers. ;e agree with the observationof the Solicitor :eneral that it is preposterousto believe that almost four 90 hectares of land came into being because of the eBects of the Ieycauayan and 4ocaue rivers. %he lonewitness of the private respondents whohappens to be their overseer and whose

husband was rst cousin of their fathernoticed the four hectare accretion to thetwelve hectare shpond only in -?<?. %herespondents claim that at this point in time,accretion had already ta&en place. 'f so, theirwitness was incompetent to testify to agradual and imperceptible increase to theirland in the years before -?<?.

E;i*ence In t:e c'se 't '! t:e!e ise;i*ence t:'t 'lle?e* 'll;i'l *eposits@e!e ('n=('*e"Eowever, the witnesstestied that in that year, she observed an

increase in the area of the original shpondwhich is now the land in question. 'f she wastelling the truth, the accretion was sudden.Eowever, there is evidence that the allegedalluvial deposits were articial and manmadeand not the exclusive result of the current of the Ieycauayan and 4ocaue rivers. %healleged alluvial deposits came into being notbecause of the sole eBect of the current of therivers but as a result of the transfer of the

di&e towards the river and encroaching uponit. %he land sought to be registered is noteven dry land cast imperceptibly andgradually by the riverMs current on theshpond ad#oining it. 't is under two meters of water. %he private respondentsM own evidenceshows that the water in the shpond is twometers deep on the side of the pilapil facing

the shpond and only one meter deep on theside of the pilapil facing the river.

A !ip'!i'n o@ne! c'nnot !e?iste!'cc!etions to :is l'n* '!isin? B!o(speci'l @o!Ks o! ('n=('*e *iKesconst!cte* Bo! !ecl'('tion p!poses"

%he reason behind the law giving the riparianowner the right to any land or alluviondeposited by a river is to compensate him forthe danger of loss that he suBers because of the location of his land. 'f estates borderingon rivers are exposed to Goods and other evils

produced by the destructive force of thewaters and if by virtue of lawful provisions,said estates are sub#ect to incumbrances andvarious &inds of easements, it is proper thatthe ris& or danger which may pre#udice theowners thereof should be compensated by theright of accretion. (ortes v. (ity of Ianila, -"hil. @270. Eence, the riparian owner does notacquire the additions to his land caused byspecial wor&s expressly intended or designedto bring about accretion. ;hen the privaterespondents transferred their di&es towardsthe river bed, the di&es were meant for

reclamation purposes and not to protect theirproperty from the destructive force of thewaters of the river.

+lic L'n*s 4e*s oB !i;e!s '!e non=!e?iste!'le po!tions oB t:e plic*o('in" %he lower court cannot validlyorder the registration of 8ots - K C in thenames of the private respondents. %hese lotswere portions of the bed of the Ieycauayanriver and are therefore classied as propertyof the public domain under Article 9Cparagraph - and Article @C, paragraph - of

the (ivil (ode of the "hilippines. %hey are notopen to registration under the 8and=egistration Act. %he ad#udication of the landsin question as private property in the namesof the private respondents is null and void.

Documents

TULLO LTD Assigns No. 6 & 7 Sep6&13.doc