epublic of the PhilippinesSUPREME COURT

Manila EN BANC

G.R. No. L-630 November 15, 1947 ALEXANDER A. KRIVENKO, petitioner-appellant, vs.THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee. Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.Marcelino Lontok appeared as amicus curies. MORAN, C.J.: Alenxander A. Kriventor alien, bought a residential lot from the Magdalena Estate, Inc., in December of 1941, the registration of which was interrupted by the war. In May, 1945, he sought to accomplish said registration but was denied by the register of deeds of Manila on the ground that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then brought the case to the fourth branch of the Court of First Instance of Manila by means of a consulta, and that court rendered judgment sustaining the refusal of the register of deeds, from which Krivenko appealed to this Court. There is no dispute as to these facts. The real point in issue is whether or not an alien under our Constitution may acquire residential land. It is said that the decision of the case on the merits is unnecessary, there being a motion to withdraw the appeal which should have been granted outright, and reference is made to the ruling laid down by this Court in another case to the effect that a court should not pass upon a constitutional question if its judgment may be made to rest upon other grounds. There is, we believe, a confusion of ideas in this reasoning. It cannot be denied that the constitutional question is unavoidable if we choose to decide this case upon the merits. Our judgment cannot to be made to rest upon other grounds if we have to render any judgment at all. And we cannot avoid our judgment simply because we have to avoid a constitutional question. We cannot, for instance, grant the motion withdrawing the appeal only because we wish to evade the constitutional; issue. Whether the motion should be, or should not be, granted, is a question involving different considerations now to be stated. According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a withdrawal of appeal after the briefs have been presented. At the time the motion for withdrawal was filed in this case, not only had the briefs been prensented, but the case had already been voted and the majority decision was being prepared. The motion for withdrawal stated no reason whatsoever, and the Solicitor General was agreeable to it. While the motion was pending in this Court, came the new circular of the Department of Justice, instructing all register of deeds to accept for registration all transfers of residential lots to aliens. The herein respondent-appellee was naturally one of the registers of deeds to obey the new circular, as against his own stand in this case which had been maintained by the trial court and firmly defended in this Court by the Solicitor General. If we grant the withdrawal, the the result would be that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the Department of Justice, issued while this case was pending before this Court. Whether or not this is the reason why appellant seeks the withdrawal of his appeal and why the Solicitor General readily agrees to that withdrawal, is now immaterial. What is material and indeed very important, is whether or not we should allow interference with the regular and complete exercise by this Court of its constitutional functions, and whether or not after having held long deliberations and after having reached a clear and positive conviction as to what the constitutional mandate is, we may still allow our conviction to be silenced, and the constitutional mandate to be ignored or misconceived, with all the harmful consequences that might be brought upon the national patromony. For it is but natural that the new circular be taken full advantage of by many, with the circumstance that perhaps the constitutional question may never come up again before this court, because both vendors and vendees will have no interest but to uphold the validity of their transactions, and very unlikely will the register of deeds venture to disobey the orders of their

superior. Thus, the possibility for this court to voice its conviction in a future case may be remote, with the result that our indifference of today might signify a permanent offense to the Constitution. All thse circumstances were thoroughly considered and weighted by this Court for a number of days and the legal result of the last vote was a denial of the motion withdrawing the appeal. We are thus confronted, at this stage of the proceedings, with our duty, the constitutional question becomes unavoidable. We shall then proceed to decide that question. Article XIII, section 1, of the Constitutional is as follows:

Article XIII. — Conservation and utilization of natural resources. SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inaguration of the Government established uunder this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no licence, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water "power" in which cases beneficial use may be the measure and the limit of the grant.

The scope of this constitutional provision, according to its heading and its language, embraces all lands of any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the conservation and utilization of all natural resources of the Nation. When, therefore, this provision, with reference to lands of the public domain, makes mention of only agricultural, timber and mineral lands, it means that all lands of the public domain are classified into said three groups, namely, agricultural, timber and mineral. And this classification finds corroboration in the circumstance that at the time of the adoption of the Constitution, that was the basic classification existing in the public laws and judicial decisions in the Philippines, and the term "public agricultural lands" under said classification had then acquired a technical meaning that was well-known to the members of the Constitutional Convention who were mostly members of the legal profession. As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said that the phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which phrase is also to be found in several sections of the Public Land Act (No. 926), means "those public lands acquired from Spain which are neither mineral for timber lands." This definition has been followed in long line of decisions of this Court. (SeeMontano vs. Insular Government, 12 Phil., 593; Ibañez de Aldecoa vs. Insular Government, 13 Phil., 159; Ramosvs. Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs. Government of the Philippines, 40 Phil., 10.) And with respect to residential lands, it has been held that since they are neither mineral nor timber lands, of necessity they must be classified as agricultural. In Ibañez de Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:

Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a field, and planted with all kinds of vegetation; for this reason, where land is not mining or forestal in its nature, it must necessarily be included within the classification of agricultural land, not because it is actually used for the purposes of agriculture, but because it was originally agricultural and may again become so under other circumstances; besides, the Act of Congress contains only three classification, and makes no special provision with respect to building lots or urban lands that have ceased to be agricultural land.

In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test is not only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural purposes. But whatever the test might be, the fact remains that at the time the Constitution was adopted, lands of the public domain were classified in our laws and jurisprudence into agricultural, mineral, and timber, and that the term "public agricultural lands" was construed as referring to those lands that were not timber or mineral, and as including residential lands. It may safely be presumed, therefore, that what the members of

the Constitutional Convention had in mind when they drafted the Constitution was this well-known classification and its technical meaning then prevailing.

Certain expressions which appear in Constitutions, . . . are obviously technical; and where such words have been in use prior to the adoption of a Constitution, it is presumed that its framers and the people who ratified it have used such expressions in accordance with their technical meaning. (11 Am. Jur., sec. 66, p. 683.) Also Calder vs. Bull, 3 Dall. [U.S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264; 152 P., 1039.) It is a fundamental rule that, in construing constitutions, terms employed therein shall be given the meaning which had been put upon them, and which they possessed, at the time of the framing and adoption of the instrument. If a word has acquired a fixed, technical meaning in legal and constitutional history, it will be presumed to have been employed in that sense in a written Constitution. (McKinney vs. Barker, 180 Ky., 526; 203 S.W., 303; L.R.A., 1918 E, 581.) Where words have been long used in a technical sense and have been judicially construed to have a certain meaning, and have been adopted by the legislature as having a certain meaning prior to a particular statute in which they are used, the rule of construction requires that the words used in such statute should be construed according to the sense in which they have been so previously used, although the sense may vary from strict literal meaning of the words. (II Sutherland, Statutory Construction, p. 758.)

Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the Constitution must be construed as including residential lands, and this is in conformity with a legislative interpretation given after the adoption of the Constitution. Well known is the rule that "where the Legislature has revised a statute after a Constitution has been adopted, such a revision is to be regarded as a legislative construction that the statute so revised conforms to the Constitution." (59 C.J., 1102.) Soon after the Constitution was adopted, the National Assembly revised the Public Land Law and passed Commonwealth Act No. 141, and sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino citizens or to associations or corporations controlled by such citizens, which is equivalent to a solemn declaration that residential lots are considered as agricultural lands, for, under the Constitution, only agricultural lands may be alienated. It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands" which are the same "public agriculture lands" under the Constitution, are classified into agricultural, residential, commercial, industrial and for other puposes. This simply means that the term "public agricultural lands" has both a broad and a particular meaning. Under its broad or general meaning, as used in the Constitution, it embraces all lands that are neither timber nor mineral. This broad meaning is particularized in section 9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for purposes of alienation or disposition, into lands that are stricly agricultural or actually devoted to cultivation for agricultural puposes; lands that are residential; commercial; industrial; or lands for other purposes. The fact that these lands are made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino citizens, is a conclusive indication of their character as public agricultural lands under said statute and under the Constitution. It must be observed, in this connection that prior to the Constitution, under section 24 of Public Land Act No. 2874, aliens could acquire public agricultural lands used for industrial or residential puposes, but after the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such kind of lands is completely stricken out, undoubtedly in pursuance of the constitutional limitation. And, again, prior to the Constitution, under section 57 of Public Land Act No. 2874, land of the public domain suitable for residence or industrial purposes could be sold or leased to aliens, but after the Constitution and under section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to aliens, and the lease granted shall only be valid while the land is used for the purposes referred to. The exclusion of sale in the new Act is undoubtedly in pursuance of the constitutional limitation, and this again is another legislative construction that the term "public agricultural land" includes land for residence purposes. Such legislative interpretation is also in harmony with the interpretation given by the Executive Department of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in answer to a query as to "whether or not the phrase 'public agricultural lands' in section 1 of Article XII (now XIII) of the Constitution

may be interpreted to include residential, commercial, and industrial lands for purposes of their disposition," rendered the following short, sharp and crystal-clear opinion:

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the Philippines into agricultural, timber and mineral. This is the basic classification adopted since the enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the time of the adoption of the Constitution of the Philippines, the term 'agricultural public lands' and, therefore, acquired a technical meaning in our public laws. The Supreme Court of the Philippines in the leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural public lands' means those public lands acquired from Spain which are neither timber nor mineral lands. This definition has been followed by our Supreme Court in many subsequent case. . . . Residential commercial, or industrial lots forming part of the public domain must have to be included in one or more of these classes. Clearly, they are neither timber nor mineral, of necessity, therefore, they must be classified as agricultural. Viewed from another angle, it has been held that in determining whether lands are agricultural or not, the character of the land is the test (Odell vs. Durant, 62 N.W., 524; Lorch vs. Missoula Brick and Tile Co., 123 p.25). In other words, it is the susceptibility of the land to cultivation for agricultural purposes by ordinary farming methods which determines whether it is agricultural or not (State vs. Stewart, 190 p. 129). Furthermore, as said by the Director of Lands, no reason is seen why a piece of land, which may be sold to a person if he is to devote it to agricultural, cannot be sold to him if he intends to use it as a site for his home.

This opinion is important not alone because it comes from a Secratary of Justice who later became the Chief Justice of this Court, but also because it was rendered by a member of the cabinet of the late President Quezon who actively participated in the drafting of the constitutional provision under consideration. (2 Aruego, Framing of the Philippine Constitution, p. 598.) And the opinion of the Quezon administration was reiterated by the Secretary of Justice under the Osmeña administration, and it was firmly maintained in this Court by the Solicitor General of both administrations. It is thus clear that the three great departments of the Government — judicial, legislative and executive — have always maintained that lands of the public domain are classified into agricultural, mineral and timber, and that agricultural lands include residential lots. Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall not be aliented," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. Undoubtedly, as above indicated, section 5 is intended to insure the policy of nationalization contained in section 1. Both sections must, therefore, be read together for they have the same purpose and the same subject matter. It must be noticed that the persons against whom the prohibition is directed in section 5 are the very same persons who under section 1 are disqualified "to acquire or hold lands of the public domain in the Philippines." And the subject matter of both sections is the same, namely, the non-transferability of "agricultural land" to aliens. Since "agricultural land" under section 1 includes residential lots, the same technical meaning should be attached to "agricultural land under section 5. It is a rule of statutory construction that "a word or phrase repeated in a statute will bear the same meaning throughout the statute, unless a different intention appears." (II Sutherland, Statutory Construction, p. 758.) The only difference between "agricultural land" under section 5, is that the former is

public and the latter private. But such difference refers to ownership and not to the class of land. The lands are the same in both sections, and, for the conservation of the national patrimony, what is important is the nature or class of the property regardless of whether it is owned by the State or by its citizens. Reference is made to an opinion rendered on September 19, 1941, by the Hon. Teofilo Sison, then Secretary of Justice, to the effect that residential lands of the public domain may be considered as agricultural lands, whereas residential lands of private ownership cannot be so considered. No reason whatsoever is given in the opinion for such a distinction, and no valid reason can be adduced for such a discriminatory view, particularly having in mind that the purpose of the constitutional provision is the conservation of the national patrimony, and private residential lands are as much an integral part of the national patrimony as the residential lands of the public domain. Specially is this so where, as indicated above, the prohibition as to the alienable of public residential lots would become superflous if the same prohibition is not equally applied to private residential lots. Indeed, the prohibition as to private residential lands will eventually become more important, for time will come when, in view of the constant disposition of public lands in favor of private individuals, almost all, if not all, the residential lands of the public domain shall have become private residential lands. It is maintained that in the first draft of section 5, the words "no land of private ownership" were used and later changed into "no agricultural land of private ownership," and lastly into "no private agricultural land" and from these changes it is argued that the word "agricultural" introduced in the second and final drafts was intended to limit the meaning of the word "land" to land actually used for agricultural purposes. The implication is not accurate. The wording of the first draft was amended for no other purpose than to clarify concepts and avoid uncertainties. The words "no land" of the first draft, unqualified by the word "agricultural," may be mistaken to include timber and mineral lands, and since under section 1, this kind of lands can never be private, the prohibition to transfer the same would be superfluous. Upon the other hand, section 5 had to be drafted in harmony with section 1 to which it is supplementary, as above indicated. Inasmuch as under section 1, timber and mineral lands can never be private, and the only lands that may become private are agricultural lands, the words "no land of private ownership" of the first draft can have no other meaning than "private agricultural land." And thus the change in the final draft is merely one of words in order to make its subject matter more specific with a view to avoiding the possible confusion of ideas that could have arisen from the first draft. If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant's words, strictly agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question. One of the fundamental principles underlying the provision of Article XIII of the Constitution and which was embodied in the report of the Committee on Nationalization and Preservation of Lands and other Natural Resources of the Constitutional Convention, is "that lands, minerals, forests, and other natural resources constitute the exclusive heritage of the Filipino nation. They should, therefore, be preserved for those under the sovereign authority of that nation and for their posterity." (2 Aruego, Framing of the Filipino Constitution, p. 595.) Delegate Ledesma, Chairman of the Committee on Agricultural Development of the Constitutional Convention, in a speech delivered in connection with the national policy on agricultural lands, said: "The exclusion of aliens from the privilege of acquiring public agricultural lands and of owning real estate is a necessary part of the Public Land Laws of the Philippines to keep pace with the idea of preserving the Philippines for the Filipinos." (Emphasis ours.) And, of the same tenor was the speech of Delegate Montilla who said: "With the complete nationalization of our lands and natural resources it is to be understood that our God-given birthright should be one hundred per cent in Filipino hands . . .. Lands and natural resources are immovables and as such can be compared to the vital organs of a person's body, the lack of possession of which may cause instant death or the shortening of life. If we do not completely antionalize these two of our most important belongings, I am afraid that the time will come when we shall be sorry for the time we were born. Our independence will be just a mockery, for what kind of independence are we going to have if a part of our country is not in our hands but in those of foreigners?" (Emphasis ours.)

Professor Aruego says that since the opening days of the Constitutional Convention one of its fixed and dominating objectives was the conservation and nationalization of the natural resources of the country. (2 Aruego, Framing of the Philippine Constitution, p 592.) This is ratified by the members of the Constitutional Convention who are now members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice Hontiveros. And, indeed, if under Article XIV, section 8, of the Constitution, an alien may not even operate a small jitney for hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land. This constitutional intent is made more patent and is strongly implemented by an act of the National Assembly passed soon after the Constitution was approved. We are referring again to Commonwealth Act No. 141. Prior to the Constitution, there were in the Public Land Act No. 2874 sections 120 and 121 which granted aliens the right to acquire private only by way of reciprocity. Said section reads as follows:

SEC. 120. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act; to corporations organized in the Philippine Islands authorized therefor by their charters, and, upon express authorization by the Philippine Legislature, to citizens of countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land, or permanent improvements thereon, or any interest therein, as to their own citizens, only in the manner and to the extent specified in such laws, and while the same are in force but not thereafter. SEC. 121. No land originally acquired in any manner under the provisions of the former Public Land Act or of any other Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippine Islands with regard to public lands, terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations, or associations who may acquire land of the public domain under this Act; to corporate bodies organized in the Philippine Islands whose charters may authorize them to do so, and, upon express authorization by the Philippine Legislature, to citizens of the countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land or pemanent improvements thereon or any interest therein, as to their own citizens, and only in the manner and to the extent specified in such laws, and while the same are in force, but not thereafter:Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts, nor to lands and improvements acquired or held for industrial or residence purposes, while used for such purposes:Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons,corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years, under the penalty of such property reverting to the Government in the contrary case." (Public Land Act, No. 2874.)

It is to be observed that the pharase "no land" used in these section refers to all private lands, whether strictly agricultural, residential or otherwise, there being practically no private land which had not been acquired by any of the means provided in said two sections. Therefore, the prohibition contained in these two provisions was, in effect, that no private land could be transferred to aliens except "upon express authorization by the Philippine Legislature, to citizens of Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land." In other words, aliens were granted the right to acquire private land merely by way of reciprocity. Then came the Constitution and Commonwealth Act No. 141 was passed, sections 122 and 123 of which read as follows:

SEC. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to

persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized thereof by their charters. SEC. 123. No land originally acquired in any manner under the provisions of any previous Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to public lands terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations or associations who may acquire land of the public domain under this Act or to corporate bodies organized in the Philippines whose charters authorize them to do so: Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts: Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons, corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years; otherwise, such property shall revert to the Government.

These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the only difference being that in the new provisions, the right to reciprocity granted to aliens is completely stricken out. This, undoubtedly, is to conform to the absolute policy contained in section 5 of Article XIII of the Constitution which, in prohibiting the alienation of private agricultural lands to aliens, grants them no right of reciprocity. This legislative construction carries exceptional weight, for prominent members of the National Assembly who approved the new Act had been members of the Constitutional Convention. It is said that the lot question does not come within the purview of sections 122 and 123 of Commonwealth Act No. 141, there being no proof that the same had been acquired by one of the means provided in said provisions. We are not, however, diciding the instant case under the provisions of the Public Land Act, which have to refer to land that had been formerly of the public domain, otherwise their constitutionality may be doubtful. We are deciding the instant case under section 5 of Article XIII of the Constitution which is more comprehensive and more absolute in the sense that it prohibits the transfer to alien of any private agricultural land including residential land whatever its origin might have been. And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage of "private real property" of any kind in favor of aliens but with a qualification consisting of expressly prohibiting aliens to bid or take part in any sale of such real property as a consequence of the mortgage. This prohibition makes no distinction between private lands that are strictly agricultural and private lands that are residental or commercial. The prohibition embraces the sale of private lands of any kind in favor of aliens, which is again a clear implementation and a legislative interpretation of the constitutional prohibition. Had the Congress been of opinion that private residential lands may be sold to aliens under the Constitution, no legislative measure would have been found necessary to authorize mortgage which would have been deemed also permissible under the Constitution. But clearly it was the opinion of the Congress that such sale is forbidden by the Constitution and it was such opinion that prompted the legislative measure intended to clarify that mortgage is not within the constitutional prohibition. It is well to note at this juncture that in the present case we have no choice. We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude aliens, admitted freely into the Philippines from owning sites where they may build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity. We are satisfied, however, that aliens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire. For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.

Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila FIRST DIVISION

G.R. No. 74833 January 21, 1991 THOMAS C. CHEESMAN, petitioner, vs.INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents. Estanislao L. Cesa, Jr. for petitioner.Benjamin I. Fernandez for private respondent.

NARVASA, J.: This appeal concerns the attempt by an American citizen (petitioner Thomas Cheesman) to annul — for lack of consent on his part — the sale by his Filipino wife (Criselda) of a residential lot and building to Estelita Padilla, also a Filipino. Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970 but have been separated since February 15,1981. 1 On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed by Armando Altares conveying a parcel of unregistered land and the house thereon (at No. 7 Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P. Cheesman, of legal age, Filipino citizen, married to Thomas Cheesman, and residing at Lot No. 1, Blk. 8, Filtration Road, Sta. Rita, Olongapo City . . ." 2 Thomas Cheesman, although aware of the deed, did not object to the transfer being made only to his wife.3 Thereafter—and again with the knowledge of Thomas Cheesman and also without any protest by him—tax declarations for the property purchased were issued in the name only of Criselda Cheesman and Criselda assumed exclusive management and administration of said property, leasing it to tenants. 4 On July 1, 1981, Criselda Cheesman sold the property to Estelita M. Padilla, without the knowledge or consent of Thomas Cheesman. 5 The deed described Criselda as being" . . . of legal age, married to an American citizen,. . ."6 Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of First Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, praying for the annulment of the sale on the ground that the transaction had been executed without his knowledge and consent. 7 An answer was filed in the names of both defendants, alleging that (1) the property sold was paraphernal, having been purchased by Criselda with funds exclusively belonging to her ("her own separate money"); (2) Thomas Cheesman, being an American, was disqualified to have any interest or right of ownership in the land; and (3) Estelita Padilla was a buyer in good faith.8 During the pre-trial conference, the parties agreed upon certain facts which were subsequently set out in a pre-trial Order dated October 22, 1981, 9 as follows:

1. Both parties recognize the existence of the Deed of Sale over the residential house located at No. 7 Granada St., Gordon Heights, Olongapo City, which was acquired from Armando Altares on June 4, 1974 and sold by defendant Criselda Cheesman to Estelita Padilla on July 12, 1981; and 2. That the transaction regarding the transfer of their property took place during the existence of their marriage as the couple were married on December 4, 1970 and the questioned property was acquired sometime on June 4,1974.

The action resulted in a judgment dated June 24, 1982, 10 declaring void ab initio the sale executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the delivery of the property to Thomas Cheesman as administrator of the conjugal partnership property, and the payment to him of P5,000.00 as attorney's fees and expenses of litigation.11 The judgment was however set aside as regards Estelita Padilla on a petition for relief filed by the latter, grounded on "fraud, mistake and/or excusable negligence" which had seriously impaired her right to

present her case adequately. 12 "After the petition for relief from judgment was given due course," according to petitioner, "a new judge presided over the case." 13 Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own answer to the complaint, and a motion for summary judgment on May 17, 1983. Although there was initial opposition by Thomas Cheesman to the motion, the parties ultimately agreed on the rendition by the court of a summary judgment after entering into a stipulation of facts, at the hearing of the motion on June 21, 1983, the stipulation being of the following tenor: 14

(1) that the property in question was bought during the existence of the marriage between the plaintiff and the defendant Criselda P. Cheesman; (2) that the property bought during the marriage was registered in the name of Criselda Cheesman and that the Deed of Sale and Transfer of Possessory Rights executed by the former owner-vendor Armando Altares in favor of Criselda Cheesman made no mention of the plaintiff; (3) that the property, subject of the proceedings, was sold by defendant Criselda Cheesman in favor of the other defendant Estelita M. Padilla, without the written consent of the plaintiff.

Obviously upon the theory that no genuine issue existed any longer and there was hence no need of a trial, the parties having in fact submitted, as also stipulated, their respective memoranda each praying for a favorable verdict, the Trial Court 15 rendered a "Summary Judgment" dated August 3, 1982 declaring "the sale executed by . . . Criselda Cheesman in favor of . . . Estelita Padilla to be valid," dismissing Thomas Cheesman's complaint and ordering him "to immediately turn over the possession of the house and lot subject of . . . (the) case to . . . Estelita Padilla . . ." 16 The Trial Court found that —

1) the evidence on record satisfactorily overcame the disputable presumption in Article 160 of the Civil Code—that all property of the marriage belongs to the conjugal partnership "unless it be proved that it pertains exclusively to the husband or to the wife"—and that the immovable in question was in truth Criselda's paraphernal property; 2) that moreover, said legal presumption in Article 160 could not apply "inasmuch as the husband-plaintiff is an American citizen and therefore disqualified under the Constitution to acquire and own real properties; and 3) that the exercise by Criselda of exclusive acts of dominion with the knowledge of her husband "had led . . . Estelita Padilla to believe that the properties were the exclusive properties of Criselda Cheesman and on the faith of such a belief she bought the properties from her and for value," and therefore, Thomas Cheesman was, under Article 1473 of the Civil Code, estopped to impugn the transfer to Estelita Padilla.

Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed the Trial Court acts (1) of granting Estelita Padilla's petition for relief, and its resolution of matters not subject of said petition; (2) of declaring valid the sale to Estelita Padilla despite the lack of consent thereto by him, and the presumption of the conjugal character of the property in question pursuant to Article 160 of the Civil Code; (3) of disregarding the judgment of June 24, 1982 which, not having been set aside as against Criselda Cheesman, continued to be binding on her; and (4) of making findings of fact not supported by evidence. All of these contentions were found to be without merit by the Appellate Tribunal which, on January 7, 1986, promulgated a decision (erroneously denominated, "Report")17 affirming the "Summary Judgment complained of," "having found no reversible error" therein. Once more, Thomas Cheesman availed of the remedy of appeal, this time to this Court. Here, he argues that it was reversible error for the Intermediate Appellate Court — 1) to find that the presumption that the property in question is conjugal in accordance with Article 160 had been satisfactorily overcome by Estelita Padilla; 18 2) to rule that Estelita Padilla was a purchaser of said property in good faith, it appearing:

a) that the deed by which the property was conveyed to Criselda Cheesman described her as "married to Thomas C. Cheesman," as well as the deed by which the property was later conveyed to Estelita Padilla by Criselda Cheesman also described her as

"married to an American citizen," and both said descriptions had thus "placed Estelita on knowledge of the conjugal nature of the property;" and b) that furthermore, Estelita had admitted to stating in the deed by which she acquired the property a price much lower than that actually paid "in order to avoid payment of more obligation to the government;"19

3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's petition for relief on the ground of "fraud, mistake and/or excusable negligence;" 20 4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for relief by failing to appeal from the order granting the same; 5) to accord to Estelita Padilla a relief other than that she had specifically prayed for in her petition for relief, ie., "the restoration of the purchase price which Estelita allegedly paid to Criselda;" 21 and 6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to recover the lot and house for the conjugal partnership.22 Such conclusions as that (1) fraud, mistake or excusable negligence existed in the premises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2) that Criselda Cheesman had used money she had brought into her marriage to Thomas Cheesman to purchase the lot and house in question, or (3) that Estelita Padilla believed in good faith that Criselda Cheesman was the exclusive owner of the property that she (Estelita) intended to and did in fact buy—derived from the evidence adduced by the parties, the facts set out in the pleadings or otherwise appearing on record—are conclusions or findings of fact. As distinguished from a question of law—which exists "when the doubt or difference arises as to what the law is on a certain state of facts" — "there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts;"23 or when the "query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation; to each other and to the whole and the probabilities of the situation." 24 Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a petition for the review oncertiorari of a decision of the Court of Appeals presented to this Court. 25 As everyone knows or ought to know, the appellate jurisdiction of this Court is limited to reviewing errors of law, accepting as conclusive the factual findings of the lower court upon its own assessment of the evidence. 26 The creation of the Court of Appeals was precisely intended to take away from the Supreme Court the work of examining the evidence, and confine its task to the determination of questions which do not call for the reading and study of transcripts containing the testimony of witnesses.27 The rule of conclusiveness of the factual findings or conclusions of the Court of Appeals is, to be sure, subject to certain exceptions, 28 none of which however obtains in the case at bar. It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached the same conclusions on the three (3) factual matters above set forth, after assessment of the evidence and determination of the probative value thereof. Both Courts found that the facts on record adequately proved fraud, mistake or excusable negligence by which Estelita Padilla's rights had been substantially impaired; that the funds used by Criselda Cheesman was money she had earned and saved prior to her marriage to Thomas Cheesman, and that Estelita Padilla did believe in good faith that Criselda Cheesman was the sole owner of the property in question. Consequently, these determinations of fact will not be here disturbed, this Court having been cited to no reason for doing so. These considerations dispose of the first three (3) points that petitioner Cheesman seeks to make in his appeal.1âwphi1They also make unnecessary an extended discussion of the other issues raised by him. As to them, it should suffice to restate certain fundamental propositions. An order of a Court of First Instance (now Regional Trial Court) granting a petition for relief under Rule 38 is interlocutory and is not appealable. Hence, the failure of the party who opposed the petition to appeal from said order, or his participation in the proceedings subsequently had, cannot be construed as a waiver of his objection to the petition for relief so as to preclude his raising the same question on appeal from the judgment on the merits of the main case. Such a party need not repeat his objections to the petition for relief, or perform any act thereafter (e.g., take formal exception) in order to preserve his right to question the same eventually, on appeal, it being sufficient for this purpose that he has made of record "the action which he desires the court to take or his objection to the action of the court and his grounds therefor." 29

Again, the prayer in a petition for relief from judgment under Rule 38 is not necessarily the same prayer in the petitioner's complaint, answer or other basic pleading. This should be obvious. Equally obvious is that once a petition for relief is granted and the judgment subject thereof set aside, and further proceedings are thereafter had, the Court in its judgment on the merits may properly grant the relief sought in the petitioner's basic pleadings, although different from that stated in his petition for relief. Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain." 30 Petitioner Thomas Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming that it was his intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him was null and void. 31 In any event, he had and has no capacity or personality to question the subsequent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative of a husband in respect of conjugal property. To sustain such a theory would permit indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord to the alien husband a not insubstantial interest and right over land, as he would then have a decisive vote as to its transfer or disposition. This is a right that the Constitution does not permit him to have. As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, at this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used conjugal funds to make the acquisition, the considerations just set out militate, on high constitutional grounds, against his recovering and holding the property so acquired or any part thereof. And whether in such an event, he may recover from his wife any share of the money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal funds is not now inquired into; that would be, in the premises, a purely academic exercise. An equally decisive consideration is that Estelita Padilla is a purchaser in good faith, both the Trial Court and the Appellate Court having found that Cheesman's own conduct had led her to believe the property to be exclusive property of the latter's wife, freely disposable by her without his consent or intervention. An innocent buyer for value, she is entitled to the protection of the law in her purchase, particularly as against Cheesman, who would assert rights to the property denied him by both letter and spirit of the Constitution itself. WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner. SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila EN BANC

G.R. No. 167707 October 8, 2008 THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL EXECUTIVE DIRECTOR, DENR-REGION VI, REGIONAL TECHNICAL DIRECTOR FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES OFFICER OF KALIBO, AKLAN, REGISTER OF DEEDS, DIRECTOR OF LAND REGISTRATION AUTHORITY, DEPARTMENT OF TOURISM SECRETARY, DIRECTOR OF PHILIPPINE TOURISM AUTHORITY, petitioners, vs.MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD, and ANICETO YAP, in their behalf and in behalf of all those similarly situated, respondents. x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. G.R. No. 173775 October 8, 2008 DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE LANDOWNERS OF BORACAY SIMILARLY SITUATED NAMED IN A LIST, ANNEX "A" OF THIS PETITION, petitioners, vs.THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL TECHNICAL DIRECTOR FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI, PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES OFFICER, KALIBO, AKLAN, respondents.

DECISION REYES, R.T., J.: AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles over their occupied lands. There are two consolidated petitions. The first is G.R. No. 167707, a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) affirming that2 of the Regional Trial Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for titling purposes. The second is G.R. No. 173775, a petition for prohibition, mandamus, and nullification of Proclamation No. 10645">[3] issued by President Gloria Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land.

The Antecedents G.R. No. 167707

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm crystalline waters, is reputedly a premier Philippine tourist destination. The island is also home to 12,003 inhabitants4 who live in the bone-shaped island’s three barangays.5 On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the National Reservation Survey of Boracay Island,6 which identified several lots as being occupied or claimed by named persons.7 On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 18018 declaring Boracay Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and marine reservesunder the administration of the Philippine Tourism Authority (PTA). President Marcos later approved the issuance of PTA Circular 3-829 dated September 3, 1982, to implement Proclamation No. 1801. Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants

Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief with the RTC in Kalibo, Aklan. In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82 raised doubts on their right to secure titles over their occupied lands. They declared that they themselves, or through their predecessors-in-interest, had been in open, continuous, exclusive, and notorious possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands for tax purposes and paid realty taxes on them.10 Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it was susceptible of private ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they had the right to have the lots registered in their names through judicial confirmation of imperfect titles. The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory relief. The OSG countered that Boracay Island was an unclassified land of the public domain. It formed part of the mass of lands classified as "public forest," which was not available for disposition pursuant to Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry Code,11 as amended. The OSG maintained that respondents-claimants’ reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705. Since Boracay Island had not been classified as alienable and disposable, whatever possession they had cannot ripen into ownership. During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1) respondents-claimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were planted with coconut trees and other natural growing trees; (3) the coconut trees had heights of more or less twenty (20) meters and were planted more or less fifty (50) years ago; and (4) respondents-claimants declared the land they were occupying for tax purposes.12 The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands in Boracay. They decided to forego with the trial and to submit the case for resolution upon submission of their respective memoranda.13 The RTC took judicial notice14 that certain parcels of land in Boracay Island, more particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in Civil Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan.15 The titles were issued on August 7, 1933.16

RTC and CA Dispositions On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading: WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA Circular No. 3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire title to their lands in Boracay, in accordance with the applicable laws and in the manner prescribed therein; and to have their lands surveyed and approved by respondent Regional Technical Director of Lands as the approved survey does not in itself constitute a title to the land. SO ORDERED.17 The RTC upheld respondents-claimants’ right to have their occupied lands titled in their name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable or could not be the subject of disposition.18 The Circular itself recognized private ownership of lands.19 The trial court cited Sections 8720 and 5321 of the Public Land Act as basis for acknowledging private ownership of lands in Boracay and that only those forested areas in public lands were declared as part of the forest reserve.22 The OSG moved for reconsideration but its motion was denied.23 The Republic then appealed to the CA. On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal filed in this case and AFFIRMING the decision of the lower court.24 The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they occupied since time immemorial were part of a forest reserve. Again, the OSG sought reconsideration but it was similarly denied.25 Hence, the present petition under Rule 45.

G.R. No. 173775 On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued Proclamation No. 106426 classifying Boracay Island into four hundred (400) hectares of reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area reserved for forest land protection purposes. On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,27 Wilfredo Gelito,28 and other landowners29 in Boracay filed with this Court an original petition for prohibition, mandamus, and nullification of Proclamation No. 1064.30 They allege that the Proclamation infringed on their "prior vested rights" over portions of Boracay. They have been in continued possession of their respective lots in Boracay since time immemorial. They have also invested billions of pesos in developing their lands and building internationally renowned first class resorts on their lots.31 Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land. Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act.32 Thus, their possession in the concept of owner for the required period entitled them to judicial confirmation of imperfect title. Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed portions of the island are inalienable and cannot be the subject of judicial confirmation of imperfect title. It is only the executive department, not the courts, which has authority to reclassify lands of the public domain into alienable and disposable lands. There is a need for a positive government act in order to release the lots for disposition. On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve the same issues on the land classification of Boracay Island.33

Issues G.R. No. 167707

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal obstacle for respondents, and all those similarly situated, to acquire title to their occupied lands in Boracay Island.34

G.R. No. 173775 Petitioners-claimants hoist five (5) issues, namely:

I. AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD 705?

II. HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIPOVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE?

III. IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND DISPOSABLE UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLEUNDER THE TORRENS SYSTEM?

IV. IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657.

V. CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY AND TO APPROVE THE SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN BORACAY?35 (Underscoring supplied) In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in Boracay. The twin petitions pertain to their right, if any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do not involve their right to secure title under other pertinent laws.

Our Ruling Regalian Doctrine and power of the executive

to reclassify lands of the public domain Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of imperfect title, namely: (a) Philippine Bill of 190236 in relation to Act No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141;37 (b) Proclamation No. 180138 issued by then President Marcos; and (c) Proclamation No. 106439 issued by President Gloria Macapagal-Arroyo. We shall proceed to determine their rights to apply for judicial confirmation of imperfect title under these laws and executive acts. But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public domain. The 1935 Constitution classified lands of the public domain into agricultural, forest or timber.40 Meanwhile, the 1973 Constitution provided the following divisions: agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest and grazing lands, and such other classes as may be provided by law,41 giving the government great leeway for classification.42 Then the 1987 Constitution reverted to the 1935 Constitution classification with one addition: national parks.43 Of these, only agricultural lands may be alienated.44 Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and administratively classified under any of these grand divisions. Boracay was an unclassified land of the public domain. The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the source of any asserted right to ownership of land and charged with the conservation of such patrimony.45 The doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions.46 All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State.47Thus, all lands that have not been acquired from the government, either by purchase or by grant, belong to the State as part of the inalienable public domain.48 Necessarily, it is up to the State to determine if lands of the public domain will be disposed of for private ownership. The government, as the agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the favored recipients of public lands, as well as under what terms they may be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of ownership.49 Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown.50 The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies and the Royal Cedulas,which laid the foundation that "all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain."51

The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims.52 The Royal Decree of 1894 or the Maura Law53 partly amended the Spanish Mortgage Law and the Laws of the Indies. It established possessory information as the method of legalizing possession of vacant Crown land, under certain conditions which were set forth in said decree.54 Under Section 393 of the Maura Law, an informacion posesoria or possessory information title,55 when duly inscribed in the Registry of Property, is converted into a title of ownership only after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and adverse,56 from the date of its inscription.57 However, possessory information title had to be perfected one year after the promulgation of the Maura Law, or until April 17, 1895. Otherwise, the lands would revert to the State.58 In sum, private ownership of land under the Spanish regime could only be founded on royal concessions which took various forms, namely: (1) titulo real or royal grant; (2) concesion especial or special grant; (3) composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and (5) informacion posesoria or possessory information title.59> The first law governing the disposition of public lands in the Philippines under American rule was embodied in the Philippine Bill of 1902.60 By this law, lands of the public domain in the Philippine Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest lands.61 The act provided for, among others, the disposal of mineral lands by means of absolute grant (freehold system) and by lease (leasehold system).62 It also provided the definition by exclusion of "agricultural public lands."63 Interpreting the meaning of "agricultural lands" under the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:64 x x x In other words, that the phrase "agricultural land" as used in Act No. 926 means those public lands acquired from Spain which are not timber or mineral lands. x x x65 (Emphasis Ours) On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land Registration Act. The act established a system of registration by which recorded title becomes absolute, indefeasible, and imprescriptible. This is known as the Torrens system.66 Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first Public Land Act. The Act introduced the homestead system and made provisions for judicial and administrative confirmation of imperfect titles and for the sale or lease of public lands. It permitted corporations regardless of the nationality of persons owning the controlling stock to lease or purchase lands of the public domain.67 Under the Act, open, continuous, exclusive, and notorious possession and occupation of agricultural lands for the next ten (10) years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title.68 On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the second Public Land Act. This new, more comprehensive law limited the exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos the same privileges. For judicial confirmation of title, possession and occupation en concepto dueño since time immemorial, or since July 26, 1894, was required.69 After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936. To this day, CA No. 141, as amended, remains as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands,70 and privately owned lands which reverted to the State.71 Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and occupation of lands of the public domain since time immemorial or since July 26, 1894. However, this provision was superseded by Republic Act (RA) No. 1942,72 which provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect title. The provision was last amended by PD No. 1073,73 which now provides for possession and occupation of the land applied for since June 12, 1945, or earlier.74 The issuance of PD No. 89275 on February 16, 1976 discontinued the use of Spanish titles as evidence in land registration proceedings.76 Under the decree, all holders of Spanish titles or grants should apply for registration of their lands under Act No. 496 within six (6) months from the effectivity of the decree on February 16, 1976. Thereafter, the recording of all unregistered lands77 shall be governed by Section 194 of the Revised Administrative Code, as amended by Act No. 3344.

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property Registration Decree. It was enacted to codify the various laws relative to registration of property.78 It governs registration of lands under the Torrens system as well as unregistered lands, including chattel mortgages.79 A positive act declaring land as alienable and disposable is required. In keeping with the presumption of State ownership, the Court has time and again emphasized that there must be a positive act of the government, such as an official proclamation,80 declassifying inalienable public land into disposable land for agricultural or other purposes.81 In fact, Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have been "officially delimited and classified."82 The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable.83 To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.84 There must still be a positive act declaring land of the public domain as alienable and disposable. To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute.85 The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable.86 In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was presented to the Court. The records are bereft of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants were subject of a government proclamation that the land is alienable and disposable. Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by private claimants were already open to disposition before 2006. Matters of land classification or reclassification cannot be assumed. They call for proof.87 Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural lands.Private claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v. Government of the Philippine Islands (1919)88 and De Aldecoa v. The Insular Government (1909).89 These cases were decided under the provisions of the Philippine Bill of 1902 and Act No. 926. There is a statement in these old cases that "in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown."90 Private claimants’ reliance on Ankron and De Aldecoa is misplaced. These cases did not have the effect of converting the whole of Boracay Island or portions of it into agricultural lands. It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration courts would classify lands of the public domain. Whether the land would be classified as timber, mineral, or agricultural depended on proof presented in each case. Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to classify lands of the public domain into mineral, timber, and agricultural. At that time, the courts were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence.91 This was the Court’s ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,92 in which it stated, through Justice Adolfo Azcuna, viz.: x x x Petitioners furthermore insist that a particular land need not be formally released by an act of the Executive before it can be deemed open to private ownership, citing the cases of Ramos v. Director of Lands and Ankron v. Government of the Philippine Islands.

x x x x Petitioner’s reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced. These cases were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief Executive or President of the Philippines the power to classify lands of the public domain into mineral, timber and agricultural so that the courts then were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence.93

To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a presumption on land classification. Thus evolved the dictum in Ankron that "the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown."94 But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of the public domain had been automatically reclassified as disposable and alienable agricultural lands. By no stretch of imagination did the presumption convert all lands of the public domain into agricultural lands. If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable lands. That would take these lands out of State ownership and worse, would be utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine. The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative confirmation of imperfect titles. The presumption applies to an applicant for judicial or administrative conformation of imperfect title under Act No. 926. It certainly cannot apply to landowners, such as private claimants or their predecessors-in-interest, who failed to avail themselves of the benefits of Act No. 926. As to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by the State. In any case, the assumption in Ankron and De Aldecoa was not absolute. Land classification was, in the end, dependent on proof. If there was proof that the land was better suited for non-agricultural uses, the courts could adjudge it as a mineral or timber land despite the presumption. In Ankron, this Court stated: In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether the particular land in question belongs to one class or another is a question of fact. The mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry land and the other, mineral land. There must be some proof of the extent and present or future value of the forestry and of the minerals. While, as we have just said, many definitions have been given for "agriculture," "forestry," and "mineral" lands, and that in each case it is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof must show that it is more valuable for the forestry or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be classified as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the discovery of valuable minerals, lands classified as agricultural today may be differently classified tomorrow. Each case must be decided upon the proof in that particular case, having regard for its present or future value for one or the other purposes. We believe, however, considering the fact that it is a matter of public knowledge that a majority of the lands in the Philippine Islands are agricultural lands that the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown. Whatever the land involved in a particular land registration case is forestry or mineral land must, therefore, be a matter of proof. Its superior value for one purpose or the other is a question of fact to be settled by the proof in each particular case. The fact that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural, forestry, or mineral land. It may perchance belong to one or the other of said classes of land. The Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what portions of public land shall be considered forestry land, unless private interests have intervened before such reservation is made. In the latter case, whether the land is agricultural, forestry, or mineral, is a question of proof. Until private interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the "public domain" shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)95 (Emphasis ours) Since 1919, courts were no longer free to determine the classification of lands from the facts of each case, except those that have already became private lands.96 Act No. 2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the Executive Department, through the President,

the exclusive prerogative to classify or reclassify public lands into alienable or disposable, mineral or forest.96-a Since then, courts no longer had the authority, whether express or implied, to determine the classification of lands of the public domain.97 Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933,98 did not present a justiciable case for determination by the land registration court of the property’s land classification. Simply put, there was no opportunity for the courts then to resolve if the land the Boracay occupants are now claiming were agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having been filed by private claimants or their predecessors-in-interest, the courts were no longer authorized to determine the property’s land classification. Hence, private claimants cannot bank on Act No. 926. We note that the RTC decision99 in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,100 which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify lands of the public domain was already in effect. Krivenko cited the old cases Mapa v. Insular Government,101 De Aldecoa v. The Insular Government,102 and Ankron v. Government of the Philippine Islands.103 Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue inKrivenko was whether residential lots were included in the general classification of agricultural lands; and if so, whether an alien could acquire a residential lot. This Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution104 from acquiring agricultural land, which included residential lots. Here, the issue is whether unclassified lands of the public domain are automatically deemed agricultural. Notably, the definition of "agricultural public lands" mentioned in Krivenko relied on the old cases decided prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.105 As We have already stated, those cases cannot apply here, since they were decided when the Executive did not have the authority to classify lands as agricultural, timber, or mineral. Private claimants’ continued possession under Act No. 926 does not create a presumption that the land is alienable. Private claimants also contend that their continued possession of portions of Boracay Island for the requisite period of ten (10) years under Act No. 926106 ipso facto converted the island into private ownership. Hence, they may apply for a title in their name. A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.107 Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural Resources,107-a ruled: "Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the "issuance of patents to certain native settlers upon public lands," for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the Islands." In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the government’s title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States. The term "public land" referred to all lands of the public domain whose title still remained in the government and are thrown open to private appropriation and settlement, and excluded the patrimonial property of the government and the friar lands." Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable.108 (Emphasis Ours) Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest under PD No. 705. The DENR109 and the National Mapping and Resource Information Authority110 certify that Boracay Island is an unclassified land of the public domain. PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as public forest. Section 3(a) of PD No. 705 defines a public forest as "a mass of lands of the public domain which has not been the subject of the present system of classification for the determination of which lands

are needed for forest purpose and which are not." Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso factoconsidered public forests. PD No. 705, however, respects titles already existing prior to its effectivity. The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of touch with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest cover to pave the way for commercial developments. As a premier tourist destination for local and foreign tourists, Boracay appears more of a commercial island resort, rather than a forest land. Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island;111 that the island has already been stripped of its forest cover; or that the implementation of Proclamation No. 1064 will destroy the island’s tourism industry, do not negate its character as public forest. Forests, in the context of both the Public Land Act and the Constitution112 classifying lands of the public domain into "agricultural, forest or timber, mineral lands, and national parks," do not necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees and underbrushes.113 The discussion in Heirs of Amunategui v. Director of Forestry114 is particularly instructive: A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classified as "forest" is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.115 (Emphasis supplied) There is a big difference between "forest" as defined in a dictionary and "forest or timber land" as a classification of lands of the public domain as appearing in our statutes. One is descriptive of what appears on the land while the other is a legal status, a classification for legal purposes.116 At any rate, the Court is tasked to determine thelegal status of Boracay Island, and not look into its physical layout. Hence, even if its forest cover has been replaced by beach resorts, restaurants and other commercial establishments, it has not been automatically converted from public forest to alienable agricultural land. Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect title. The proclamation did not convert Boracay into an agricultural land. However, private claimants argue that Proclamation No. 1801 issued by then President Marcos in 1978 entitles them to judicial confirmation of imperfect title. The Proclamation classified Boracay, among other islands, as a tourist zone. Private claimants assert that, as a tourist spot, the island is susceptible of private ownership. Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural land. There is nothing in the law or the Circular which made Boracay Island an agricultural land. The reference in Circular No. 3-82 to "private lands"117 and "areas declared as alienable and disposable"118 does not by itself classify the entire island as agricultural. Notably, Circular No. 3-82 makes reference not only to private lands and areas but also to public forested lands. Rule VIII, Section 3 provides: No trees in forested private lands may be cut without prior authority from the PTA. All forested areas in public lands are declared forest reserves. (Emphasis supplied) Clearly, the reference in the Circular to both private and public lands merely recognizes that the island can be classified by the Executive department pursuant to its powers under CA No. 141. In fact, Section 5 of the Circular recognizes the then Bureau of Forest Development’s authority to declare areas in the island as alienable and disposable when it provides: Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development. Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify Boracay Island as alienable and disposable land. If President Marcos intended to classify the island as alienable and disposable or forest, or both, he would have identified the specific limits of each, as President Arroyo did in Proclamation No. 1064. This was not done in Proclamation No. 1801.

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine reserve to be administered by the PTA – to ensure the concentrated efforts of the public and private sectors in the development of the areas’ tourism potential with due regard for ecological balance in the marine environment. Simply put, the proclamation is aimed at administering the islands for tourism and ecological purposes. It does not address the areas’ alienability.119 More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the designation of Boracay Island as tourist zone makes it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition. That could not have been, and is clearly beyond, the intent of the proclamation. It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened the same to private ownership. Sections 6 and 7 of CA No. 141120 provide that it is only the President, upon the recommendation of the proper department head, who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands.121 In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority granted to her to classify lands of the public domain, presumably subject to existing vested rights. Classification of public lands is the exclusive prerogative of the Executive Department, through the Office of the President. Courts have no authority to do so.122 Absent such classification, the land remains unclassified until released and rendered open to disposition.123 Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center line of roads and trails, which are reserved for right of way and which shall form part of the area reserved for forest land protection purposes. Contrary to private claimants’ argument, there was nothing invalid or irregular, much less unconstitutional, about the classification of Boracay Island made by the President through Proclamation No. 1064. It was within her authority to make such classification, subject to existing vested rights. Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands. They claim that since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an agricultural land without running afoul of Section 4(a) of RA No. 6657, thus: SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program: (a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain. That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from later converting it into agricultural land. Boracay Island still remained an unclassified land of the public domain despite PD No. 705. In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,124 the Court stated that unclassified lands are public forests. While it is true that the land classification map does not categorically state that the islands are public forests, the fact that they were unclassified lands leads to the same result. In the absence of the classification as mineral or timber land, the land remains unclassified land until released and rendered open to disposition.125 (Emphasis supplied)

Moreover, the prohibition under the CARL applies only to a "reclassification" of land. If the land had never been previously classified, as in the case of Boracay, there can be no prohibited reclassification under the agrarian law. We agree with the opinion of the Department of Justice126 on this point: Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word "reclassification." Where there has been no previous classification of public forest [referring, we repeat, to the mass of the public domain which has not been the subject of the present system of classification for purposes of determining which are needed for forest purposes and which are not] into permanent forest or forest reserves or some other forest uses under the Revised Forestry Code, there can be no "reclassification of forest lands" to speak of within the meaning of Section 4(a). Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest lands to agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply to those lands of the public domain, denominated as "public forest" under the Revised Forestry Code, which have not been previously determined, or classified, as needed for forest purposes in accordance with the provisions of the Revised Forestry Code.127 Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141. Neither do they have vested rights over the occupied lands under the said law. There are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through his predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the public domain.128 As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions of Boracay Island into an agricultural land. The island remained an unclassified land of the public domain and, applying the Regalian doctrine, is considered State property. Private claimants’ bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the absence of the second element of alienable and disposable land. Their entitlement to a government grant under our present Public Land Act presupposes that the land possessed and applied for is already alienable and disposable. This is clear from the wording of the law itself.129Where the land is not alienable and disposable, possession of the land, no matter how long, cannot confer ownership or possessory rights.130 Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No. 1064, with respect to those lands which were classified as agricultural lands. Private claimants failed to prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945. We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants complied with the requisite period of possession. The tax declarations in the name of private claimants are insufficient to prove the first element of possession. We note that the earliest of the tax declarations in the name of private claimants were issued in 1993. Being of recent dates, the tax declarations are not sufficient to convince this Court that the period of possession and occupation commenced on June 12, 1945. Private claimants insist that they have a vested right in Boracay, having been in possession of the island for a long time. They have invested millions of pesos in developing the island into a tourist spot. They say their continued possession and investments give them a vested right which cannot be unilaterally rescinded by Proclamation No. 1064. The continued possession and considerable investment of private claimants do not automatically give them a vested right in Boracay. Nor do these give them a right to apply for a title to the land they are presently occupying. This Court is constitutionally bound to decide cases based on the evidence presented and the laws applicable. As the law and jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in Boracay even with their continued possession and considerable investment in the island.

One Last Note The Court is aware that millions of pesos have been invested for the development of Boracay Island, making it a by-word in the local and international tourism industry. The Court also notes that for a number of years, thousands of people have called the island their home. While the Court commiserates with private claimants’ plight, We are bound to apply the law strictly and judiciously. This is the law and it should prevail. Ito ang batas at ito ang dapat umiral. All is not lost, however, for private claimants. While they may not be eligible to apply for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their automatic ouster from the residential, commercial, and other areas they possess now classified as agricultural. Neither will this mean the loss of their substantial investments on their occupied alienable lands. Lack of title does not necessarily mean lack of right to possess. For one thing, those with lawful possession may claim good faith as builders of improvements. They can take steps to preserve or protect their possession. For another, they may look into other modes of applying for original registration of title, such as by homestead131 or sales patent,132 subject to the conditions imposed by law. More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied lots or to exempt them from certain requirements under the present land laws. There is one such bill133 now pending in the House of Representatives. Whether that bill or a similar bill will become a law is for Congress to decide. In issuing Proclamation No. 1064, the government has taken the step necessary to open up the island to private ownership. This gesture may not be sufficient to appease some sectors which view the classification of the island partially into a forest reserve as absurd. That the island is no longer overrun by trees, however, does not becloud the vision to protect its remaining forest cover and to strike a healthy balance between progress and ecology. Ecological conservation is as important as economic progress. To be sure, forest lands are fundamental to our nation’s survival. Their promotion and protection are not just fancy rhetoric for politicians and activists. These are needs that become more urgent as destruction of our environment gets prevalent and difficult to control. As aptly observed by Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:134 The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect to forest lands. Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation. Not without justification. For, forests constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property – crops, livestock, houses, and highways – not to mention precious human lives. Indeed, the foregoing observations should be written down in a lumberman’s decalogue.135 WHEREFORE, judgment is rendered as follows: 1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE. 2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit. SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila THIRD DIVISION

G.R. No. L-52518 August 13, 1991 INTERNATIONAL HARDWOOD AND VENEER COMPANY OF THE PHILIPPINES, petitioner-appellee, vs.UNIVERSITY OF THE PHILIPPINES and JOSE C. CAMPOS, JR., respondents-appellants. Tañada, Vivo & Tan for petitioner-appellee. DAVIDE, JR., J.:p From an adverse decision of the then Court of First Instance (now RTC) Laguna dated 3 June 1968 in a special civil action for declaratory relief with injunction, Civil Case No. SC-650 entitled International Hardwood and Veneer Company of the Philippines vs. University of the Philippines and Jose Campos, the dispositive portion of which reads:

WHEREFORE, the Court hereby renders judgment in favor of petitioner and against the respondents: (a) Declaring that Rep. Act No. 3990 does not empower the University of the Philippines, in lieu of the Bureau of Internal Revenue and Bureau of Forestry, to scale, measure and seal the timber cut by the petitioner within the tract of land referred to in said Act, and collect the corresponding forest charges prescribed by the National Internal Revenue Code therefor; and (b) Dismissing the respondents' counterclaim.

respondents appealed to the Court of Appeals. The appeal was docketed as C.A.-G.R. No. 49409-R. After the parties filed their respective Briefs in 1971, the Court of Appeals (Sixth Division) promulgated on 28 December 1979 a resolution elevating the case to this Court as the "entire case hinges on the interpretation and construction of Republic Act 3990 as it applies to a set of facts which are not disputed by the parties and therefore, is a legal question. 1 Civil Case No. SC-650 was filed by petitioner Hardwood before the trial court on 28 June 1966. 2 Petitioner seeks therein a declaration that respondent University of the Philippines (hereafter referred to as UP) does not have the right to supervise and regulate the cutting and removal of timber and other forest products, to scale, measure and seal the timber cut and/or to collect forest charges, reforestation fees and royalties from petitioner and/or impose any other duty or burden upon the latter in that portion of its concession, covered by License Agreement No. 27-A issued on 1 February 1963, ceded in full ownership to the UP by Republic Act No. 3990; asks that respondents be enjoined from committing the acts complained of and prays that respondents be required to pay petitioner the sum of P100,000.00 as damages and costs of the suit. Its motion to dismiss on the ground of improper venue having been unfavorably acted upon, and pursuant to the order of the trial court of 26 August 1967, respondents filed their Answer on 13 September 1987, 3 wherein they interpose the affirmative defenses of, among others, improper venue and that the petition states no cause of action; they further set up a counterclaim for the payment of it by petitioner of forest charges on the forest products cut and felled within the area ceded to UP under R.A. No. 3990 from 18 June 1964, with surcharges and interests as provided in the National Internal Revenue Code. Petitioner filed a Reply and Answer to Counterclaim. 4 On 18 October 1967, the parties submitted a Joint Stipulation of Facts and Joint Submission of the Case for Judgment, 5 which reads as follows:

COME NOW the parties in the above entitled case by the undersigned counsel, and respectfully submit the following JOINT STIPULATION OF FACTS AND JOINT

SUBMISSION OF THE CASE FOR JUDGMENT, without prejudice to the presentation of evidence by either party: xxx xxx xxx 2. Plaintiff is, among others, engaged in the manufacture, processing and exportation of plywood and was, for said purpose, granted by the Government an exclusive license for a period of 25 years expiring on February 1, 1985, to cut, collect and remove timber from that portion of timber land located in the Municipalities of Infanta, Mauban and Sampaloc Province of Quezon and in the Municipalities of Siniloan, Pangil, Paete, Cavite and Calauan, Province of Laguna under License Agreement No. 27-A (Amendment) issued and promulgated by the Government through the Secretary of Agriculture and Natural Resources on January 11, 1960. ... ; 3. That aforementioned Timber License No. 27-A (Amendment) is a renewal of the Timber License Agreement No. 27-A previously granted by the Government to the plaintiff on June 4, 1953 to February 1, 1963. ... ; 4. Plaintiff, since June 4, 1953, continuously up to the present, has been in peaceful possession of said timber concession and had been felling cutting and removing timber therefrom pursuant to the aforementioned Timber License Agreement No. 27-A (Amendment) of January 11, 1960; 5. Plaintiff, on the strength of the License Agreement executed by the Government on June 4,1953 (License Agreement No. 27-A) and of the License Agreement No. 27-A (Amendment) of January 11, 1960, has constructed roads and other improvements and installations of the aforementioned area subject to the grant and purchased equipment in implementation of the conditions contained in the aforementioned License Agreement and has in connection therewith spent more than P7,000,000.00 as follows: ... ; 6. Sometime on September 25, 1961, during the effectivity of License Agreement No. 27-A (Amendment) of January 11, 1960, the President of the Philippines issued Executive Proclamation No. 791 which reads as follows: xxx xxx xxx

RESERVING FOR THE COLLEGE OF AGRICULTURE, UNIVERSITY OF THE PHILIPPINES, AS EXPERIMENT STATION FOR THE PROPOSED DAIRY RESEARCH AND TRAINING INSTITUTE AND FOR AGRICULTURAL RESEARCH AND PRODUCTION STUDIES OF THIS COLLEGE A CERTAIN PARCEL OF LAND OF THE PUBLIC DOMAIN, SITUATED PARTLY IN THE MUNICIPALITIES OF PAETE AND PAKIL ,PROVINCE OF LAGUNA, AND PARTLY IN THE MUNICIPALITY OF INFANTA, PROVINCE OF QUEZON, ISLAND OF LUZON.

Upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the authority vested in me by law, I, Carlos P. Garcia, President of the Philippines, do hereby withdraw from sale or settlement and reserve for the College of Agriculture, University of the Philippines, as experiment station for the proposed Dairy Research and production studies of this College, a certain parcel of land of the Public domain situated partly in the municipalities of Paete and Pakil province of Laguna, and partly in the municipality of Infants, Province of Quezon, Island of Luzon, subject to private rights, if any there be, and to the condition that the disposition of timber and other forest products found therein shall be subject to the forestry laws and regulations, which parcel of land is more particularly described as follows, to wit: xxx xxx xxx IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed.

Done in the City of Manila this 25th day of September, in the year of Our Lord, nineteen hundred and sixty-one, and of the Independence of the Philippines, the sixteenth.

(SGD.) CARLOS P. GARCIA President of the Philippines xxx xxx xxx 7. That on or about June 18, 1964, during the effectivity of the aforementioned License Agreement No. 27-A (Amendment) of July 11, 1960, Republic Act No. 3990 was enacted by the Congress of the Philippines and approved by the President of the Philippines, which Republic Act provides as follows:

AN ACT TO ESTABLISH A CENTRAL EXPERIMENT STATION FOR THE UNIVERSITY OF THE PHILIPPINES.

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SECTION 1. There is hereby established a central experiment station for the use of the University of the Philippines in connection with its research and extension functions, particularly by the College of Agriculture, College of Veterinary Medicine and College of Arts and Sciences. SEC. 2. For this purpose, the parcel of the public domain consisting of three thousand hectares, more or less, located in the Municipality of Paete, Province of Laguna, the precise boundaries of which are stated in Executive Proclamation 791, Series of 1961, is hereby ceded and transferred in full ownership to the University of the Philippines, subject to any existing concessions, if any. SEC. 3. All operations and activities carried on in the central experiment station shall be exempt from taxation, local or general, any provision of law to the contrary notwithstanding, and any incidental receipts or income therefrom shall pertain to the general fund of the University of the Philippines. SEC. 4. This Act shall take effect upon its approval. Approved, June 18, 1964.

8. That on the strength of the provisions of Republic Act No. 3990, and prior to the institution of the present suit, defendants have demanded, verbally as well as in writing to plaintiff-.

(a) That the forest charges due and payable by plaintiff under the License Agreement 27-A (Amendment) referred to in paragraph 2 hereof be paid to the University of the Philippines, instead of the Bureau of Internal Revenue; and (b) That the selling of any timber felled or cut by plaintiff within the boundaries of the Central Experiment Station as defined in Republic Act No. 3990 be performed by personnel of the University of the Philippines.

9. That the position of the plaintiff oil the demand of the defendants was fully discussed in the letter dated April 29, 1966 of plaintiffs lawyer addressed to the President of the University of the Philippines, copy of which is hereto attached as Annex "A" hereof. 10. That in line with its position as stated in paragraph thereof, plaintiff has refused to allow entry to personnel of the University of the Philippines to the Central Experiment Station area assigned thereto for the purpose of supervising the felling cutting and removal of timber therein and scaling any such timber cut and felled prior to removal 11. That in view of the stand taken by plaintiff and in Relation to the implemetation of Republic Act No. 3990 the defendant Business Executive sent the letter quoted below to the Commissioner of Internal Revenue:

xxx xxx xxx February 8, 1966

Commissioner of Internal Revenue Manila

Re: Forest Charges of U.P. Paete Land Grant Dear Sir: Under Republic Act 3990 approved in June, 1964 a parcel of forest land approximately 3,500 hectares in area was ceded in full ownership by the government to the University of the Philippines. This area is known as Paete Land Grant, the title to which is presently issued in the name of the University of the Philippines. The law transferring the ownership to the University of the Philippines gives the university full rights of dominion and ownership, subject to the existing concession of International Hardwood and Veneer Company of the Philippines. Under the terms of this law all forest charges due from the concessionaire should now be paid to the University of the Philippines. The purpose of giving this land grant to the University is to enable us to generate income out of the land grant and establish a research and experimental station for the Colleges of Agriculture, Forestry, Arts and Sciences and Veterinary Medicine. I would like, therefore, to inform you and to secure your approval of the following matters:

1. All forest charges paid by Interwood to the District Forester of Laguna from June, 1964 up to the present should be remitted in favor of the University of the Philippines pines; 2. All forest charges presently due from Interwood shall hereafter be paid to the University of the Philippines and lastly 3. Hereafter the University of the Philippines shall receive all forest charges and royalties due from any logging concession at the land grant.

May we request that proper instructions be issued by the district Forester of Laguna about this matter. Thank you. Very truly yours,

Sgd.) JOSE C. CAMPOS JR. e 12. That in reply to the above letter of defendant Business Executive dated February 8, 1966, the Commissioner of Internal Revenue issued the following letter-ruling dated March 11, 1966: xxx xxx xxx , 1966 U.P. Paete Land Grant University of the Philippines Diliman, Quezon City

Attn: Jose C. Campos, Jr. Business Executive

Gentlemen: This has reference to your letter dated February 8, 1966 stating as follows: xxx xxx xxx In reply thereto, I have the honor to inform you as follows: In accordance with Section 266 of the Tax Code as amplified by Section 15(a) of Revenue Regulations No. 85, the Forest Products Regulations, forest products, cut,

gathered and removed from registered private woodlands are not subject to forest charges, but they must be invoiced when removed to another municipality or for commercial purposes in the manner prescribed by the regulations. As the Paete Land Grant was ceded by law to the U.P. in full private ownership and as the grant is manifestly to be considered registered, no forest charges are actually due and payable on the timber cut and removed therefrom. The forest charges purportedly to be paid by any concessionaire under any licensing agreement entered or to be entered into by the U.P. are, therefore, to be considered not as the charges contemplated by the National Internal Revenue Code but as part of the royalties payable by the concessionaires for the exploitation of the timber resources of the land grant. Accordingly, you queries are answered viz:

1. The University may directly collect the supposed forest charges payable by concessionaires of the land grant. 2. The forest charges paid by International Hardwood and Veneer Company of the Philippines may be refunded provided that a formal claim for the refund thereof is made within two years from the date of payment. The proper claimant shall be International Hardwood and not the University.

13. That subsequently, defendant Business Executive sent the letter quoted below to the District Forester of the province of Laguna una dated April 18, 1 966:

a pril 18, 1966 The District Forester Bureau of Forestry Sta. Cruz, Laguna Dear Sir: Enclosed is a copy of a letter to the Commissioner of Internal Revenue concerning the right of the University of the Philippines to collect forest charges from the existing logging concessionaire at the Laguna Land Grant (formerly Paete Land Grant). This tract of forest land containing some 3,500 hectares was ceded to the University of the Philippines in full ownership by Republic Act No. 3990, approved in June, 1964. In view thereof, the University of the Philippines requested that its authority over said land be recognized and that the existing concessionaire, International Hardwood and Veneer Company of the Philippines, in turn pay its forest charges directly to the University instead of to the national government. Please take note of page "2" of the enclosed letter of the Commissioner of Internal Revenue on the official ruling of the Bureau of Internal Revenue to the following points raised by the University:

1. That the University of the Philippines may now directly collect forest charges from INTERWOOD, the existing logging concessionaire. 2. That forest charges paid by INTERWOOD to the Bureau of Forestry from June, 1964 up to April, 1966 shall be refunded to the University of the Philippines. In this manner, INTERWOOD is requested to file a claim for the refund in the amount heretofore paid by it to be remitted to the University of the Philippines.

On the basis of this letter to the Commissioner of Internal Revenue, it is understood that forest charges on timber cut from the Laguna Land Grant as scaled by scalers of the University of the Philippines shall now be paid directly to the University of the Philippines. In another ruling by the Commissioner of Internal Revenue, the University,

particularly the Laguna Land Grant, is exempted from all kinds of Internal Revenue taxes.

yours, (Sgd.) Jose C. Campos, Jr. Business Executive

14. That the above quoted letter of defendant Business Executive dated April 18, 1966 was duly endorsed by the District Forester of the province of Laguna to the Director of Forestry. 15. That on or about June 7, 19667 the Assistant Director of Forestry addressed to plaintiff the letter dated June 7, 1966, which states as follows: Sirs:

This is in connection with your request for this Office to comment on your reply to the letter of Mr. Jose C. Campos, Jr. of the University of the Philippines. In your reply to the letter of Mr. Campos, it is stated that the University of the Philippines is claiming the right:

(a) To scale, measure and seal the timber cut inside the area covered by the U.P. Land Grant at Paete, Laguna; (b) To collect the corresponding forest charges; (c) To collect royalties aside from the forest charges; and (d) To exercise in effect all the authority vested by law upon the Bureau of Forestry in the cutting, removal and disposition of the timber from said area, and the authority of the Bureau of Internal Revenue respecting the measurement and scaling of the logs and the collection of the corresponding forest charges and other fees in connection therewith.

This office is in full accord with your arguments against the claim of the University of the Philippines to have acquired the above rights. We believe that the right vested the INTERWOOD by virtue of number License Agreement No. 27-A (Amendment) to utilize the timber inside subject area is still binding and should therefore, be respected. It is on the basis of this acknowledgment that we sent your client our letter of November 4,1965 requesting him to comment on the application of the State University for a Special Timber License over the said area.

16. That acting on the endorsement referred to in paragraph l4, the Director of Bureau of Forestry issued the letter ruling quoted below, dated June 30,1966: xxx xxx xxx District Forester Sta. Cruz, Laguna

(Thru the Regional Director of Forestry, Manila) Sir: This concerns your inquiry contained in the 3rd paragraph of your letter dated April 26, 1966, designated as above, as to whether or not you shall turn over the scaling work for logs cut from the area of the International Hardwood & Veneer Company of the Philippines in the Pacto Land Grant to Scalers of the University of the Philippines.

In view of the ruling of the Commissioner of Internal Revenue that the Paete Land Grant, which embraces the area of the International Hardwood & Veneer Company of the Philippines, is considered a registered private woodland of the University of the Philippines and therefore no forest charges are actually due and payable on the timber cut and removed therefrom, and in view further of the ruling of said Commissioner that the forest charges purportedly to be paid by any concessionaire under any licensing agreement entered or to be entered into by the U.P. are to be considered not as the charged contemplated by the National Internal Revenue Code but as part of the royalties payable by the concessionaires for the exploitation of the timber resources of the land grant, you may turn over the scaling work therein to the scalers of the U.P. However, you should guard against the use of such licensing agreements entered or to be entered into by the U.P. as a means of smuggling forest products from the neighboring public forests.

xxx xxx xxx On the basis of the above JOINT STIPULATION OF FACTS, the pleadings filed in the case, and whatever additional evidence may be presented by the parties, the parties hereto, through counsel, jointly move and pray of this Honorable Court that judgment be rendered granting full and appropriate relief, on the following issues:

1. Whether plaintiff, as of the date of present case was filed, should pay forest charges due and payable under its timber License Agreement No. 27-A (Amendment) as set forth in paragraph 2 hereof', to the Bureau of Internal Revenue, or to the University of the Philippines; and 2. In the event that it be found by this Honorable Court that said forest charges are to be paid to the University of the Philippines, whether or not the University of the Philippines is entitled to supervise, through its duly appointed personnel, the logging, telling and removal of timber within the Central Experiment Station area as described in Republic Act No. 3990, and to scale the timber thus felled and cut.

Manila for Laguna, September 29,1967. Upon the foregoing Stipulation of Facts, the trial court rendered its judgment on 3 June 1968 in favor of the petitioner, the dispositive portion of which is quoted at the beginning of this decision. In deciding the case against UP, it held:

... the court finds that the respondents' demand on the petitioner has no legal basis. In the first place, the cession in full ownership of the tract of land referred to in the Act was expressly made 'subject to any existing concessions.' Inasmuch as at the time of the enactment of the Act, the petitioner's timber concession over the tract of land was existing and would continue to exist until February 1, 1985, the University of the Philippines will acquire full ownership' and exclusive jurisdiction to control and administer the property only after February 1, 1985. The cession of the property to the University of the Philippines is akin to the donation of a parcel of land, subject to usufruct. The donee acquires full ownership thereof only upon the termination of the usufruct. At the time of the donation, all what the donee acquires is the 'naked' ownership of the property donated. In the second place, the respondents' demand cannot be valid unless the provisions of Sees. 262 to 276 of the National Internal Revenue Code regarding the measuring of timber cut from the forest and the collection of the prescribed forest charges by the Bureau of Internal Revenue and Bureau of Forestry are first amended. In their arguments, the respondents tried to stretch the scope of the provisions of Republic Act No. 3990 in order to include therein such amendment of the provisions of the National Internal Revenue Code and Revised

Administrative Code, but they failed to convince the Court, not only because of the first reason above stated, but also because it clearly appears that such amendment is not intended in Republic Act No. 3990, which does not contain even a remote allusion thereto in its title or a general amendatory provision at the end. In the third place, under Republic Act No. 3990, the University of the Philippines cannot legally use the tract of land ceded to it for purposes other than those therein expressly provided, namely, 'for the use of the University of the Philippines in connection with its research and extension functions, particularly by the College of Agriculture, College of Veterinary Medicine and College of Arts and Sciences.' Hence, upon the expiration of the petitioner's timber concession, the University of the Philippines cannot even legally renew it or grant timber concession over the whole tract of land or over portions thereof to other private individuals and exercise the functions of the Bureau of Internal Revenue and Bureau of Forestry by scaling and measuring the timber cut within the area and collecting from them the forest charges prescribed by the National Internal Revenue Code.

Respondents claim in their Brief that the trial court erred: I ... WHEN IT DID NOT DISMISS THE PETITION FOR DECLARATORY RELIEF WITH INJUNCTION INSPITE OF ITS INHERENT JURISDICTIONAL DEFECTS THAT SHOULD WARRANT A DISMISSAL. II ... WHEN IT DECLARED THAT REPUBLIC ACT NO. 3990 DOES NOT EMPOWER THE RESPONDENT UNIVERSITY OF THE PHILIPPINES, IN LIEU OF THE BUREAU OF INTERNAL REVENUE AND BUREAU OF FORESTRY, TO SCALE, MEASURE AND SEAL THE TIMBER CUT BY THE PETITIONER WITHIN THE TRACT OF LAND REFERRED TO IN SAID ACT, AND COLLECT THE CORRESPONDING FOREST CHARGES PRESCRIBED BY THE NATIONAL INTERNAL REVENUE CODE.

1. The first assigned error is without merit. In the Joint Stipulation of Facts, the parties jointly move and pray that the trial court render judgment granting full and appropriate remedy on the following issues:

l. Whether plaintiff, as of the date of present case was filed, should pay forest charges due and payable under its Timber License Agreement No. 27-A (Amendment) as set forth in paragraph 2 hereof, to the Bureau of Internal Revenue, or to the University of the Philippines; and 2. In the event that it be found by this Honorable Court that said forest charges are to be paid to the University of the Philippines, whether or not the University of the Philippines is entitled to supervise, through its duly appointed personnel, the logging, felling and removal of timber within the Central Experiment Station area as described in Republic Act No. 3990, and to scale the timber thus felled

These issues bring the matter within the scope of an action for declaratory relief under Section 1, Rule 64 of the Rules of Court and render meaningless the appeal to the rule laid down in Sarmiento, et al. vs. Caparas, et al. 6that declaratory relief cannot be joined by injunction, because herein petitioner, for all legal intents and purposes, abandoned it by its failure to raise it in the Stipulation of Facts. Thus, what attains is an amendment to both pleadings (the complaint and the answer), which is authorized by Section 5, Rule 10 of the Rules of Court. Said section pertinently provides:

SEC. 5. Amendment to conform to or authorize presentation of evidence.— When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respect, as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to so amend does not affect the result of the trial by these issues. ...

The stipulation of facts and the agreement as to the issues unquestionably satisfy the requisites for declaratory relief. (a) there must be a justiciable controversy; (b) the controversy must be between persons whose interests are adverse; (c) the party seeking declaratory relief must have a legal interest in the controversy; and (d) the issue invoked must be ape for judicial determination. 7 There is a justiciable controversy where there is an actual controversy, or the ripening seeds of one existsbetween the parties, all of whom are sui juris and before the court, and that the declaration sought will help in ending the controversy. A doubt becomes a justiciable controversy when it is translated into a claim of right which is actually contested. 8 2. On the second assigned error, respondents assert that: (a) Under R.A. No. 3990, the Republic of the Philippines may effect collection of forest charges through the University of the Philippines because the License Agreement does not expressly provide that the forest charges shall be paid to the Bureau of Internal Revenue; in the absence of a specific contractual provision limiting it to a particular agency in collecting forest charges owing to it, the Republic may effect such collection through another agency. (b) Having been vested with administrative jurisdiction over and being the owner of the tract of land in question, the UP acquired full control and benefit of the timber and other resources within the area. Timber areas within the ceded property but outside the concession of petitioner can be fully exploited by UP. However, in respect to timber areas within the ceded property but covered by the concession of petitioner, only forest charges (or more appropriately, royalties) may be enjoyed by UP until the expiration of petitioner's license. To deny it such charges would render its "full ownership" empty and futile. (c) The UP is clearly entitled to the income derived from the tract of land ceded to it, for Section 3 of R.A. No. 3990 expressly provides:

All operations and activities carried on in the central experiment station shall be exempt from taxation, local or general, any provision of law to the contrary notwithstanding, and any incidental receipts or income therefrom shall pertain to the general fund of the University of the Philippines. (emphasis supplied for emphasis).

(d) As provided by R.A. No. 3990, the UP is duty bound to operate and maintain a central experiment station; since this law does not provide for appropriations for such purpose, it is clearly the legislative intention that the establishment and maintenance thereof must be financed by the earnings or income from the area, which can only come from the timber and the royalties or charges payable therefrom. This is in accordance with the general principle that a grant of authority or jurisdiction extends to all incidents that may arise in connection with the matter over which jurisdiction is exercised. (e) Supervision of the License Agreement in favor of petitioner by UP was intended by R.A. No. 3990. (f) Finally, the two government agencies affected by R.A. No. 3990 have issued specific rulings recognizing the authority of UP to collect royalties or charges and to supervise petitioner's logging operations. Petitioner refutes the foregoing arguments of respondents by asserting that: (a) The UP has not been granted by R.A. No. 3990 the authority to collect forest charges or the authority to supervise the operation by the petitioner of the timber concession affected by said Act. The rule is well-settled that legislative grants must be construed strictly in favor of the public and most strongly against the grantee, and nothing will be included in the grant except that which is granted expressly or by clear implication. Under Section 262 of the Tax Code, as amended, the duties incident to the measuring of forest products and the collection of the charges thereon shall be discharged by the Bureau of Internal Revenue under the regulations of the Department of Finance. The reforestation fee shall be collected by the Bureau of Forestry. 9The supervision and regulation of the use of forest products and of the cutting and removal of forest products are vested upon the Bureau of Forestry. 10 R.A. No. 3990 does not expressly, or even impliedly, grant the UP any authority to collect from the holders of timber concessions on the area ceded to it forest charges due and payable to the Government under the Tax Code, or to enforce its provisions relating to charges on forest products or to supervise the operations of the concessions by the holders thereof; (b) The cession in full ownership of the land in question was expressly made "subject to any concession, if any", and that petitioner's concession would continue until 1 February 1985; the UP then would acquire full ownership and exclusive jurisdiction to control and administer the property only after 1 February 1985. The position of UP is akin to that of a donee of a parcel of land subject to usufruct. (c) The rulings of the Commissioner of Internal Revenue and the Acting Director

of the Bureau of Forestry are patently incorrect; moreover, said agencies do not have the power to interpret the law, which is primarily a function of the judiciary. (d) Finally, it has acquired a vested right to operate the timber concession under the supervision and control of the Bureau of Forestry. There is merit in the second assigned error. Under Proclamation No. 791, dated 25 September 1961, a parcel of land of the public domain described therein, with an area of 3,500 hectares, which is the very parcel of land subject of R.A. No. 3990, was withdrawn from sale or settlement and was reserved for the College of Agriculture of the UP as experiment station for the proposed Dairy Research and Training Institute and for research and production studies of said college, subject however to private rights, if any, and to the condition that the disposition of timber and other forest products found thereon shall be subject to forestry laws and regulations. The above reservation is within the area covered by petitioner's timber license. Pursuant, however, to R.A. No. 3990 which establishes a central experiment station for the use of the UP in connection with its research and extension functions, particularly by the College of Agriculture, College of Veterinary Medicine and College of Arts and Sciences, the above "reserved" area was "ceded and transferred in full ownership to the University of the Philippines subject to any existing concessions, if any." When it ceded and transferred the property to UP, the Republic of the Philippines completely removed it from the public domain and, more specifically, in respect to the areas covered by the timber license of petitioner, removed and segregated it from a public forest; it divested itself of its rights and title thereto and relinquished and conveyed the same to the UP; and made the latter the absolute owner thereof, subject only to the existing concession. That the law intended a transfer of the absolute ownership is unequivocally evidenced by its use of the word "full" to describe it. Full means entire, complete, or possessing all particulars, or not wanting in any essential quality. 11The proviso regarding existing concessions refers to the timber license of petitioner. All that it means, however, is that the right of petitioner as a timber licensee must not be affected, impaired or diminished; it must be respected. But, insofar as the Republic of the Philippines is concerned, all its rights as grantor of the license were effectively assigned, ceded and conveyed to UP as a consequence of the above transfer of full ownership. This is further home out by Section 3 of R.A. No. 3990 which provides, inter alia, that "any incidental receipts or income therefrom shall pertain to the general fund of the University of the Philippines. Having been effectively segregated and removed from the public domain or from a public forest and, in effect, converted into a registered private woodland, the authority and jurisdiction of the Bureau of Forestry over it were likewise terminated. This is obvious from the fact that the condition in Proclamation No. 971 to the effect that the disposition of timber shall be subject to forestry laws and regulations is not reproduced iii R.A. No. 3990. The latter does not likewise provide that it is subject to the conditions set forth in the proclamation. An owner has the right to enjoy and dispose of a thing without other limitations than those established by law. 12 The right to enjoy includes the jus utendi or the right to receive from the thing what it produces, and the jus abutendi or the right to consume the thing by its use. 13 As provided for in Article 441 of the Civil Code, to the owner belongs the natural fruits, the industrial fruits and the civil fruits. There are, however, exceptions to this rules, as where the property is subject to a usufruct, in which case the usufructuary gets the fruits. 14 In the instant case, that exception is made for the petitioner as licensee or grantee of the concession, which has been given the license to cut, collect, and remove timber from the area ceded and transferred to UP until I February 1985. However, it has the correlative duty and obligation to pay the forest charges, or royalties, to the new owner, the UP, at the same rate as provided for in the Agreement. The charges should not be paid anymore to the Republic of the Philippines through the Bureau of Internal Revenue because of the very nature of the transfer as aforestated. Consequently, even the Bureau of Internal Revenue automatically lost its authority and jurisdiction to measure the timber cut from the subject area and to collect forestry charges and other fees due thereon. The foregoing disposes of the contention of petitioner that R.A. No. 3990 does not grant the UP the authority to collect forest charges and to supervise the operations of its concession insofar as the property of the UP within it is concerned. Its argument that it has acquired vested rights to operate its concession under the supervision and control of the Bureau of Forestry is preposterous. The grantor, Republic of the Philippines, was by no means bound under the License to perpetuate the Bureau as its agent. Neither is there force to its contention that legislative grants must be construed strictly in favor of the public and most

strongly against the grantee. The grant under R.A. No. 3990 is transfer of absolute, full and entire ownership which leaves no room for a strict interpretation against the grantee, the UP. The reservation therein made is in favor of the private party pursuant to the license, which is nevertheless protected. It is the concession in favor of the petitioner which should, on the contrary, be bound by the rule. It follows then that respondent UP is entitled to supervise, through its duly appointed personnel, the logging, felling and removal of timber within the area covered by R.A. No. 3990. IN THE LIGHT OF ALL THE FOREGOING, judgment is hereby rendered REVERSING the decision of the trial court in Civil Case No. C-650, rendered on 3 June 1968; DECLARING that forest charges due from and payable by petitioner for timber cut pursuant to its License Agreement No. 27-A (Amendment) within the area ceded and transferred to the University of the Philippine pursuant to R.A. No. 3990 shall be paid to the University of the Philippines; DECLARING that the University of the Philippines is entitled to supervise, through its duly appointed personnel, the logging, felling and removal of timber within the aforesaid area covered by R.A. No. 3990. Costs against petitioner. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.