II WHO ARE QUALIFIED TO OWN LANDS

Filipino Citizens
Sections 2, 7 & , A!t" #II $%7
Constit&tion
N'tion'l Econo() 'n* +'t!i(on)
Section 7" Save in cases of hereditary
succession, no private lands shall be
transferred or conveyed except to individuals,
corporations, or associations qualifed to
acquire or hold lands of the public domain.
Section " Notwithstanding the provisions of
Section 7 of this Article, a naturalborn citi!en
of the "hilippines who has lost his "hilippine
citi!enship may be a transferee of private
lands, sub#ect to limitations provided by law.
Rep&,lic Act No" 7-.2 /&ne $0,
$%%$
AN ACT TO +RO1OTE FOREI2N
IN3EST1ENTS, +RESCRI4E THE
+ROCEDURES FOR RE2ISTERIN2
ENTER+RISES DOIN2 4USINESS IN THE
+HILI++INES, AND FOR OTHER +UR+OSES
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:$
Section $" Title. %his Act shall be &nown as
the, 5Foreign Investments Act of 19915.
Section 2" Declaration of Policy. 't is the
policy of the State to attract, promote and
welcome productive investments from foreign
individuals, partnerships, corporations, and
governments, including their political
subdivisions, in activities which signifcantly
contribute to national industriali!ation and
socioeconomic development to the extent
that foreign investment is allowed in such
activity by the (onstitution and relevant laws.
)oreign investments shall be encouraged in
enterprises that signifcantly expand
livelihood and employment opportunities for
)ilipinos* enhance economic value of farm
products* promote the welfare of )ilipino
consumers* expand the scope, quality and
volume of exports and their access to foreign
mar&ets* and+or transfer relevant technologies
in agriculture, industry and support services.
)oreign investments shall be welcome as a
supplement to )ilipino capital and technology
in those enterprises serving mainly the
domestic mar&et.
As a general rule, there are no restrictions on
extent of foreign ownership of export
enterprises. 'n domestic mar&et enterprises,
foreigners can invest as much as one hundred
percent ,-../0 equity except in areas
included in the negative list. )oreign owned
frms catering mainly to the domestic mar&et
shall be encouraged to underta&e measures
that will gradually increase )ilipino
participation in their businesses by ta&ing in
)ilipino partners, electing )ilipinos to the
board of directors, implementing transfer of
technology to )ilipinos, generating more
employment for the economy and enhancing
s&ills of )ilipino wor&ers.
Section 0" Defnitions. As used in this Act$
a0 %he term 1"hilippine national1 shall
mean a citi!en of the "hilippines or a
domestic partnership or association
wholly owned by citi!ens of the
"hilippines* or a corporation organi!ed
under the laws of the "hilippines of
which at least sixty percent ,2./0 of
the capital stoc& outstanding and
entitled to vote is owned and held by
citi!ens of the "hilippines* or a trustee
of funds for pension or other employee
retirement or separation benefts,
where the trustee is a "hilippine
national and at least sixty ,2./0 of the
fund will accrue to the beneft of the
"hilippine nationals$ "rovided, %hat
where a corporation and its non
)ilipino stoc&holders own stoc&s in a
Securities and 3xchange (ommission
,S3(0 registered enterprise, at least
sixty percent ,2./0 of the capital
stoc&s outstanding and entitled to vote
of both corporations must be owned
and held by citi!ens of the "hilippines
and at least sixty percent ,2./0 of the
members of the 4oard of 5irectors of
both corporations must be citi!ens of
the "hilippines, in order that the
corporations shall be considered a
"hilippine national*
b0 %he term 1investment1 shall mean
equity participation in any enterprise
organi!ed or existing under the laws of
the "hilippines*
c0 %he term 1foreign investment1 shall
mean as equity investment made by a
non"hilippine national in the form of
foreign exchange and+or other assets
actually transferred to the "hilippines
and duly registered with the (entral
4an& which shall assess and appraise
the value of such assets other than
foreign exchange*
d0 %he praise 1doing business1 shall
include soliciting orders, service
contracts, opening o6ces, whether
called 1liaison1 o6ces or branches*
appointing representatives or
distributors domiciled in the "hilippines
or who in any calendar year stay in the
country for a period or periods totalling
one hundred eighty ,-7.0 days or
more* participating in the
management, supervision or control of
any domestic business, frm, entity or
corporation in the "hilippines* and any
other act or acts that imply a
continuity of commercial dealings or
arrangements, and contemplate to
that extent the performance of acts or
wor&s, or the exercise of some of the
functions normally incident to, and in
progressive prosecution of, commercial
gain or of the purpose and ob#ect of
the business organi!ation$ "rovided,
however, %hat the phrase 1doing
business$ shall not be deemed to
include mere investment as a
shareholder by a foreign entity in
domestic corporations duly registered
to do business, and+or the exercise of
rights as such investor* nor having a
nominee director or o6cer to
represent its interests in such
corporation* nor appointing a
representative or distributor domiciled
in the "hilippines which transacts
business in its own name and for its
own account*
e0 %he term 1export enterprise1 shall
mean an enterprise which produces
goods for sale, or renders services to
the domestic mar&et entirely or if
exporting a portion of its output fails to
consistently export at least sixty
percent ,2./0 thereof* and
g0 %he term 1)oreign 'nvestments
Negative 8ist1 or 1Negative 8ist1 shall
mean a list of areas of economic
activity whose foreign ownership is
limited to a maximum of forty
ownership is limited to a maximum of
forty percent ,9./0 of the equity
capital of the enterprise engaged
therein.
Section ." Scope. %his Act shall not apply
to ban&ing and other fnancial institutions
which are governed and regulated by the
:eneral 4an&ing Act and other laws under the
supervision of the (entral 4an&.
Section 6" Registration of Investments of
Non-Pilippine Nationals. ;ithout need of
prior approval, a non"hilippine national, as
that term is defned in Section < a0, and not
otherwise disqualifed by law may upon
registration with the Securities and 3xchange
(ommission ,S3(0, or with the 4ureau of
%rade =egulation and (onsumer "rotection
,4%=("0 of the 5epartment of %rade and
'ndustry in the case of single proprietorships,
do business as defned in Section < ,d0 of this
Act or invest in a domestic enterprise up to
one hundred percent ,-../0 of its capital,
unless participation of non"hilippine
nationals in the enterprise is prohibited or
limited to a smaller percentage by existing
law and+or limited to a smaller percentage by
existing law and+or under the provisions of
this Act. %he S3( or 4%=(", as the case may
be, shall not impose any limitations on the
extent of foreign ownership in an enterprise
additional to those provided in this Act$
"rovided, however, %hat any enterprise
see&ing to avail of incentives under the
>mnibus 'nvestment (ode of -?77 must apply
for registration with the 4oard of 'nvestments
,4>'0, which shall process such application for
registration in accordance with the criteria for
evaluation prescribed in said (ode$ "rovided,
fnally, %hat a non"hilippine national
intending to engage in the same line of
business as an existing #oint venture in his
application for registration with S3(. 5uring
the transitory period as provided in Section -@
hereof, S3( shall disallow registration of the
applying non"hilippine national if the existing
#oint venture enterprise, particularly the
)ilipino partners therein, can reasonably prove
they are capable to ma&e the investment
needed for they are competing applicant.
Apon eBectivity of this Act, S3( shall eBect
registration of any enterprise applying under
this Act within ffteen ,-@0 days upon
submission of completed requirements.
Section 7" Foreign Investments in !"port
!nterprises. )oreign investment in export
enterprises whose products and services do
not fall within 8ists A and 4 of the )oreign
'nvestment Negative 8ist provided under
Section 7 hereof is allowed up to one hundred
percent ,-../0 ownership.
3xport enterprises which are non"hilippine
nationals shall register with 4>' and submit
the reports that may be required to ensure
continuing compliance of the export
enterprise with its export requirement. 4>'
shall advise S3( or 4%=(", as the case may
be, of any export enterprise that fails to meet
the export ratio requirement. %he S3( or
4%=(" shall thereupon order the non
complying export enterprise to reduce its
sales to the domestic mar&et to not more than
forty percent ,9./0 of its total production*
failure to comply with such S3( or 4%=("
order, without #ustifable reason, shall sub#ect
the enterprise to cancellation of S3( or 4%=("
registration, and+or the penalties provided in
Section -9 hereof.
Section 7" Foreign Investments in
Domestic #ar$et !nterprises. Non
"hilippine nationals may own up to one
hundred percent ,-../0 of domestic mar&et
enterprises unless foreign ownership therein
is prohibited or limited by existing law or the
)oreign 'nvestment Negative 8ist under
Section 7 hereof.
A domestic mar&et enterprise may change its
status to export enterprise if over a three ,<0
year period it consistently exports in each
year thereof sixty per cent ,2./0 or more of
its output.
Section " %ist of Investment Areas
Reserve& to Pilippine
Nationals 8Foreign Investment Negative
%ist9" %he )oreign 'nvestment Negative 8ist
shall have three ,<0 component lists$ A, 4, and
($
a0 8ist A shall enumerate the areas of
activities reserved to "hilippine
nationals by mandate of the
(onstitution and specifc laws.
b0 8ist 4 shall contain the areas of
activities and enterprises pursuant to
law$
-0 ;hich are defenserelated
activities, requiring prior
clearance and authori!ation
from 5epartment of National
5efense ,5N50 to engage in
such activity, such as the
manufacture, repair, storage
and+or distribution of frearms,
ammunition, lethal weapons,
military ordnance, explosives,
pyrotechnics and similar
materials* unless such
manufacturing or repair activity
is specifcally authori!ed, with a
substantial export component,
to a non"hilippine national by
the Secretary of National
5efense* or
C0 ;hich have implications on
public health and morals, such
as the manufacture and
distribution of dangerous drugs*
all forms of gambling*
nightclubs, bars, beerhouses,
dance halls* sauna and
steambath houses and
massage clinics.
Small and mediumsi!ed
domestic mar&et enterprises
with paidin equity capital less
than the equivalent of fve
hundred thousand AS dollars
,ASD@..,...0 are reserved to
"hilippine nationals, unless they
involve advanced technology as
determined by the 5epartment
of Science and %echnology.
3xport enterprises which utili!e
raw materials from depleting
natural resources, with paidin
equity capital of less than the
equivalent of fve hundred
thousand AS dollars
,ASD@..,...0 are li&ewise
reserved to "hilippine nationals.
Amendments to 8ist 4 may be made
upon recommendation of the Secretary
of National 5efense, or the Secretary
of Eealth, or the Secretary of
3ducation, (ulture and Sports,
indorsed by the N35A, or upon
recommendation motu propio of N35A,
approved by the "resident, and
promulgated by "residential
"roclamation.
c0 8ist ( shall contain the areas of
investment in which existing
enterprises already serve adequately
the needs of the economy and the
consumer and do not require further
foreign investments, as determined by
N35A applying the criteria provided in
Section ? of this Act, approved by the
"resident and promulgated in a
"residential "roclamation.
%he %ransitory )oreign 'nvestment
Negative 8ist established in Sec. -@
hereof shall be replaced at the end of
the transitory period by the frst
=egular Negative 8ist to the
formulated and recommended by the
N35A, following the process and
criteria provided in Section 7 and ? of
this Act. %he frst =egular Negative 8ist
shall be published not later than sixty
,2.0 days before the end of the
transitory period provided in said
section, and shall become immediately
eBective at the end of the transitory
period. Subsequent )oreign 'nvestment
Negative 8ists shall become eBective
ffteen ,-@0 days after publication in
two ,C0 newspapers of general
circulation in the "hilippines$ "rovided,
however, %hat each )oreign
'nvestment Negative 8ist shall be
prospective in operation and shall in
no way aBect foreign investments
existing on the date of its publication.
Amendments to 8ist 4 and ( after
promulgation and publication of the
frst =egular )oreign 'nvestment
Negative 8ist at the end of the
transitory period shall not be made
more often than once every two ,C0
years.
Section %" Determination of Areas of
Investment for Incl'sion in %ist ( of te
Foreign Investment Negative %ist. Apon
petition by a "hilippine national engage
therein, an area of investment may be
recommended by N35A for inclusion in 8ist (
of the )oreign 'nvestment Negative 8ist upon
determining that it complies with all the
following criteria$
a0 %he industry is controlled by frms
owned at least sixty percent ,2./0 by
)ilipinos*
b0 'ndustry capacity is ample to meet
domestic demand*
c0 Su6cient competition exists within
the industry*
d0 'ndustry products comply with
"hilippine standards of health and
safety or, in the absence of such, with
international standards, and are
reasonably competitive in quality with
similar products in the same price
range imported into the country*
e0 Fuantitative restrictions are not
applied on imports of directly
competing products*
f0 %he leading frms of the industry
substantially comply with
environmental standards* and
g0 %he prices of industry products are
reasonable.
%he petition shall be sub#ected to a public
hearing at which aBected parties will have the
opportunity to show whether the petitioner
industry adequately serves the economy and
the consumer, in general, and meets the
above stated criteria in particular. N35A may
delegate evaluation of the petition and
conduct of the public hearing to any
government agency having cogni!ance of the
petitioner industry. %he delegated agency
shall ma&e its evaluation report and
recommendations to N35A which retains the
right and sole responsibility to determine
whether to recommend to the "resident to
promulgate the area of investment in 8ist ( of
the Negative 8ist. An industry or area of
investment included in 8ist ( of the Negative
8ist by "residential "roclamation shall remain
in the said 8ist ( for two ,C0 years, without
pre#udice to reinclusion upon new petition,
and due process.
Section $-" Strategic In&'stries. ;ithin
eighteen ,-70 months after the eBectivity of
this Act, the N35A 4oard shall formulate and
publish a list of industries strategic to the
development of the economy. %he list shall
specify, as a matter of policy and not as a
legal requirement, the desired equity
participation by :overnment and+or private
)ilipino investors in each strategic industry.
Said list of strategic industries, as well as the
corresponding desired equity participation of
government and+or private )ilipino investors,
may be amended by N35A to reGect changes
in economic needs and policy directions of
:overnment. %he amended list of strategic
industries shall be published concurrently with
publication of the )oreign 'nvestment
Negative 8ist.
%he term 1strategic industries1 shall mean
industries that are characteri!ed by all of the
following$
a0 (rucial to the accelerated
industriali!ation of the country,
b0 =equire massive capital investments
to achieve economies of scale for
e6cient operations*
c0 =equire highly speciali!ed or
advanced technology which
necessitates technology transfer and
proven production techniques in
operations*
d0 (haracteri!ed by strong bac&ward
and forward lin&ages with most
industries existing in the country, and
e0 :enerate substantial foreign
exchange savings through import
substitution and collateral foreign
exchange earnings through export of
part of the output that will result with
the establishment, expansion or
development of the industry.
Section $$" (ompliance )it
!nvironmental Stan&ar&s. All industrial
enterprises regardless of nationality of
ownership shall comply with existing rules
and regulations to protect and conserve the
environment and meet applicable
environmental standards.
Section $2" (onsistent *overnment
Action. No agency, instrumentality or
political subdivision of the :overnment shall
ta&e any action on conGict with or which will
nullify the provisions of this Act, or any
certifcate or authority granted hereunder.
Section $0" Implementing R'les an&
Reg'lations. N35A, in consultation with
4>', S3( and other government agencies
concerned, shall issue the rules and
regulations to implement this Act within one
hundred and twenty ,-C.0 days after its
eBectivity. A copy of such rules and
regulations shall be furnished the (ongress of
the =epublic of the "hilippines.
Section $." A&ministrative Sanctions. A
person who violates any provision of this Act
or of the terms and conditions of registration
or of the rules and regulations issued
pursuant thereto, or aids or abets in any
manner any violation shall be sub#ect to a fne
not exceeding >ne hundred thousand pesos
,"-..,...0.
'f the oBense is committed by a #uridical
entity, it shall be sub#ect to a fne in an
amount not exceeding H of -/ of total paidin
capital but not more than )ive million pesos
,"@,...,...0. %he president and+or o6cials
responsible therefor shall also be sub#ect to a
fne not exceeding %wo hundred thousand
pesos ,"C..,...0.
'n addition to the foregoing, any person, frm
or #uridical entity involved shall be sub#ect to
forfeiture of all benefts granted under this
Act.
S3( shall have the power to impose
administrative sanctions as provided herein
for any violation of this Act or its
implementing rules and regulations.
Section $6" Transitory Provisions. "rior
to eBectivity of the implementing rules and
regulations of this Act, the provisions of 4oo&
'' of 3xecutive >rder CC2 and its
implementing rules and regulations shall
remain in force.
5uring the initial transitory period of thirtysix
,<20 months after issuance of the =ules and
=egulations to implement this Act, the
%ransitory )oreign 'nvestment Negative 8ist
shall consist of the following$
A. 8ist A$
-. All areas of investment in
which foreign ownership is
limited by mandate of
(onstitution and specifc laws.
4. 8ist 4$
-. Ianufacture, repair, storage
and+or distribution of frearms,
ammunitions, lethal weapons,
military ordinance, explosives,
pyrotechnics and similar
materials required by law to be
licensed by and under the
continuing regulation of the
5epartment of National
5efense* unless such
manufacturing or repair activity
is specifcally authori!ed with a
substantial export component,
to a non"hilippine national by
the Secretary of National
5efense*
C. Ianufacture and distribution
of dangerous drugs* all forms of
gambling* nightclubs, bars,
beerhouses, dance halls* sauna
and steam bathhouses,
massage clinic and other li&e
activities regulated by law
because of ris&s they may pose
to public health and morals*
<. Small and mediumsi!e
domestic mar&et enterprises
with paidin equity capital or
less than the equivalent of
ASD@..,..., unless they
involve advanced technology as
determined by the 5epartment
of Science and %echnology, and
9. 3xport enterprises which
utili!e raw materials from
depleting natural resources,
and with paidin equity capital
of less than the equivalent
ASD@..,....
(. 8ist ($
-. 'mport and wholesale
activities not integrated with
production or manufacture of
goods*
C. Services requiring a license
or specifc authori!ation, and
sub#ect to continuing
regulations by national
government agencies other
than 4>' and S3( which at the
time of eBectivity of this Act are
restricted to "hilippine nationals
by existing administrative
regulations and practice of the
regulatory agencies concerned$
"rovided, %hat after eBectivity
of this Act, no other services
shall be additionally sub#ected
to such restrictions on
nationality of ownership by the
corresponding regulatory
agencies, and such restrictions
once removed shall not be
reimposed* and
<. 3nterprises owned in the
ma#ority by a foreign licensor
and+or its a6liates for the
assembly, processing or
manufacture of goods for the
domestic mar&et which are
being produced by a "hilippine
national as of the date of
eBectivity of this Act under a
technology, &nowhow and+or
brand name license from such
licensor during the term of the
license agreement$ "rovided,
%hat, the license is duly
registered with the (entral
4an& and+or the %echnology
%ransfer 4oard and is
operatively in force as of the
date of eBectivity of this Act.
N35A shall ma&e the enumeration as
appropriate of the areas of the investment
covered in this %ransitory )oreign 'nvestment
Negative 8ist and publish the Negative 8ist in
full at the same time as, or prior to, the
publication of the rules and regulations to
implement this Act.
%he areas of investment contained in 8ist (
above shall be reserved to "hilippine nationals
only during the transitory period. %he
inclusion of any of them in the regular
Negative 8ist will require determination by
N35A after due public hearings that such
inclusion is warranted under the criteria set
forth in Section 7 and ? hereof.
Section $7" Repealing (la'se. Articles
fortyfour ,990 to fftysix ,@20 of 4oo& '' of
3xecutive >rder No. CC2 are hereby repealed.
All other laws or parts of laws inconsistent
with the provisions of this Act are hereby
repealed or modifed accordingly.
Section $7" Separa+ility. 'f any part or
section of this Act is declared unconstitutional
for any reason whatsoever, such declaration
shall not in any way aBect the other parts or
sections of this Act.
Section $" !,ectivity. %his Act shall ta&e
eBect ffteen ,-@0 days after approval and
publication in two ,C0 newspaper of general
circulation in the "hilippines.
Approved$ June -<, -??-
III COR+ORATIONS
Sec" 0, A!t" #II Constit&tion
N'tion'l Econo() 'n* +'t!i(on)
Section 0" 8ands of the public domain are
classifed into agricultural, forest or timber,
mineral lands and national par&s. Agricultural
lands of the public domain may be further
classifed by law according to the uses to
which they may be devoted. Alienable lands
of the public domain shall be limited to
agricultural lands. "rivate corporations or
associations may not hold such alienable
lands of the public domain except by lease,
for a period not exceeding twentyfve years,
renewable for not more than twentyfve
years, and not to exceed one thousand
hectares in area. (iti!ens of the "hilippines
may lease not more than fve hundred
hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or
grant.
%a&ing into account the requirements of
conservation, ecology, and development, and
sub#ect to the requirements of agrarian
reform, the (ongress shall determine, by law,
the si!e of lands of the public domain which
may be acquired, developed, held, or leased
and the conditions therefor.
CASES
C:';ez C'se, s&p!'
THE DIRECTOR OF LANDS ;s"
INTER1EDIATE A++ELLATE COURT 'n*
AC1E +L<WOOD & 3ENEER CO" INC", ETC"
$.7 SCRA 6-% 8$%79
No" L=70--2" Dece(,e! 2%, $%7
%he 5irector of 8ands appealed the
#udgment of the 'ntermediate
Appellate (ourt ,'A(0 which a6rmed
the decision of the (ourt of )irst
'nstance of 'sabela ordering the
registration in favor of herein
respondent corporation of fve parcels
of land measuring 97-, <?. sqm.,
acquired from Iariano and Acer 'nfel,
members of the indigenous 5umagat
%ribe ,and as such are cultural
minorities0, owners of the land sub#ect
of 8= proceeding, and who had
possessed said land from time
immemorial, on >ctober C?, -?2C.
%his was accordingly only
registered on July -7, -?7C long
after the aegis of the -?7<
(onstitution.
%he ()', during its ocular investigation
of the land, seen that Acme "lywood K
Leneer (o. 'nc., has introduced more
than "9@I ?. AcmeMs ownership and
possession of the land was duly
recogni!ed by the government when
the Iunicipal >6cials of Iaconacon,
'sabela, have negotiated for the
donation of the townsite from Acme
"lywood K Leneer (o., 'nc., and this
negotiation came to reality when the
4oard of 5irectors of the Acme
"lywood K Leneer (o., 'nc., had
donated a part of the land bought by
the (ompany from the 'nfels for the
townsite of Iaconacon 'sabela on
November -@, -?7?, and which
donation was accepted by the
Iunicipal :overnment of Iaconacon,
'sabela.
ISSUE> ;hether or not the title that the 'nfels
had transferred to Acme in -?2C could be
confrmed in favor of the latter in proceedings
instituted by it in -?7- when the -?7<
(onstitution was already in eBect, having in
mind the prohibition therein against private
corporations holding lands of the public
domain except in lease not exceeding -,...
hectares.
HELD> <ES" %he question turns upon a
determination of the character of the lands at
the time of institution of the registration
proceedings in -?7-. 'f they were then still
part of the public domain, it must be
answered in the negative. 'f, on the other
hand, they were then already private lands,
the constitutional prohibition against their
acquisition by private corporations or
associations obviously does not apply.
T:e $%70 Constit&tion c'nnot i(p'i!
;este* !i?:ts" T:&s @:e!e l'n* @'s
'cA&i!e* in $%72 @:en co!po!'tions
@e!e 'llo@e* to 'cA&i!e l'n*s not
,e)on* $,-2. :ect'!es, t:e s'(e (') ,e
!e?iste!e* in $%2 'lt:o&?: &n*e! $%70
Constit&tion co!po!'tions c'nnot 'cA&i!e
l'n*s oB t:e p&,lic *o('in"C3ven on the
proposition that the land remained technically
1public1 land, despite immemorial possession
of the 'nfels and their ancestors, until title in
their favor was actually confrmed in
appropriate proceedings under the "ublic
8and Act, there can be no serious question of
AcmeNs right to acquire the land at the time it
did, there also being nothing in the -?<@
(onstitution that might be construed to
prohibit corporations from purchasing or
acquiring interests in public land to which the
vendor had already acquired that type of so
called 1incomplete1 or 1imperfect1 title. T:e
onl) li(it'tion t:en eDt'nt @'s t:'t
co!po!'tions co&l* not 'cA&i!e, :ol* o!
le'se p&,lic '?!ic&lt&!'l l'n*s in eDcess
oB $,-2. :ect'!es" %he purely accidental
circumstance that confrmation proceedings
were brought under the aegis of the -?7<
(onstitution which forbids corporations from
owning lands of the public domain cannot
defeat a right already vested before that law
came into eBect, or invalidate transactions
then perfectly valid and proper. %his (ourt has
already held, in analogous circumstances,
that the (onstitution cannot impair vested
rights.
%he fact, therefore, that the confrmation
proceedings were instituted by Acme in its
own name must be regarded as simply
another accidental circumstance, productive
of a defect hardly more than procedural and
in nowise aBecting the substance and merits
of the right of ownership sought to be
confrmed in said proceedings, there being no
doubt of AcmeNs entitlement to the land. As it
is unquestionable that in the light of the
undisputed facts, t:e InEels, &n*e! eit:e!
t:e $%06 o! t:e $%70 Constit&tion, co&l*
:';e :'* title in t:e(sel;es conE!(e*
'n* !e?iste!e*, onl) ' !i?i* s&,se!;ience
to t:e lette! oB t:e l'@ @o&l* *en) t:e
s'(e ,eneEt to t:ei! l'@B&l s&ccesso!=
in=inte!est ,) ;'li* con;e)'nce @:ic:
;iol'tes no constit&tion'l"
%he ruling in I3=A8(> vs. (AS%=>
4A=%>8>I3 ,--9 S(=A 7??0, that public land
ceases to be so only upon issuance of a
certifcate of title, is hereby reconsidered and
abandoned. (orrect rule is that in Susi vs.
=a!on, 97 "hil 9C9.O%he (ourt, in the light of
the foregoing, is of the view, and so holds,
that the ma#ority ruling in Ieralco must be
reconsidered and no longer deemed to be
binding precedent. Te correct r'le- as
en'nciate& in te line of cases alrea&y
referre& to- is tat aliena+le p'+lic lan&
el& +y a possessor- personally or
tro'g is pre&ecessors-in-interest-
openly- contin'o'sly an& e"cl'sively for
te prescri+e& stat'tory perio& ./0
years 'n&er Te P'+lic %an& Act- as
amen&e&1 is converte& to private
property +y te mere lapse or
completion of sai& perio&- ipso 2're.
)ollowing that rule and on the basis of the
undisputed facts, the land sub#ect of this
appeal was already private property at the
time it was acquired from the 'nfels by Acme.
Acme thereby acquired a registrable title,
there being at the time no prohibition against
said corporationNs holding or owning private
land. %he ob#ection that, as a #uridical person,
Acme is not qualifed to apply for #udicial
confrmation of title under section 97,b0 of the
"ublic 8and Act is technical, rather than
substantial and, again, fnds its answer in the
dissent in Ieralco.
A co!po!'tion t:'t 'cA&i!e* p!i;'te l'n*
in $%72 (') :';e it !e?iste!e* in $%2
*espite t:e p!o:i,ition in t:e $%70
Constit&tion @:ic: c'nnot ,e ?i;en
!et!o'cti;e eFect 's to i(p'i! ;este*
!i?:ts"C%here is also nothing to prevent
Acme from reconveying the lands to the
'nfels and the latter from themselves
applying for confrmation of title and, after
issuance of the certifcate+s of title in their
names, deeding the lands bac& to Acme. 4ut
this would be merely indulging in empty
charades, whereas the same result is more
e6caciously and speedily obtained, with no
pre#udice to anyone, by a liberal application of
the rule on amendment to conform to the
evidence suggested in the dissent in Ieralco.
;hile this opinion seemingly reverses an
earlier ruling of comparatively recent vintage,
in a real sense, it brea&s no precedent, but
only rea6rms and reestablished, as it were,
doctrines the soundness of which has passed
the test of searching examination and inquiry
in many past cases. 'ndeed, it is worth noting
that the ma#ority opinion, as well as the
concurring opinions of (hief Justice )ernando
and Justice Abad Santos, in Ieralco rested
chieGy on the proposition that the petitioner
therein, a #uridical person, was disqualifed
from applying for confrmation of an imperfect
title to public land under Section 97,b0 of the
"ublic 8and Act. =eference to the -?7<
(onstitution and its Article P'L, Section --,
was only tangential, limited to a brief
paragraph in the main opinion, and may, in
that context, be considered as essentially
obiter. Ieralco, in short, decided no
constitutional question.
Disposition oB t:e C'se> %here being no
reversible error in the appealed #udgment of
the 'ntermediate Appellate (ourt, the same is
A))'=I35.
I3 ORI2INAL RE2ISTRATION 8C:'pte! III9
$" ORDINAR< Re?ist!'tion
+!ocee*in? 8A /&*ici'l
ConE!('tion oB I(pe!Bect Title9
A" QUALIFIED A++LICANTS
Section $." ;ho may apply. %he
following persons may fle in the
proper (ourt of )irst 'nstance an
application for registration of title to
land, whether personally or through
their duly authori!ed representatives$
,-0 %hose who by themselves or
through their predecessorsin
interest have been in open,
continuous, exclusive and notorious
possession and occupation of
alienable and disposable lands of
the public domain under a bona
fde claim of ownership since June
-C, -?9@, or earlier.
,C0 %hose who have acquired
ownership of private lands by
prescription under the provision of
existing laws.
,<0 %hose who have acquired
ownership of private lands or
abandoned river beds by right of
accession or accretion under the
existing laws.
,90 %hose who have acquired
ownership of land in any other
manner provided for by law.
;here the land is owned in common,
all the coowners shall fle the
application #ointly.
;here the land has been sold under
pacto de retro, the vendor a retro may
fle an application for the original
registration of the land, provided,
however, that should the period for
redemption expire during the
pendency of the registration
proceedings and ownership to the
property consolidated in the vendee a
retro, the latter shall be substituted for
the applicant and may continue the
proceedings.
A trustee on behalf of his principal may
apply for original registration of any
land held in trust by him, unless
prohibited by the instrument creating
the trust.
CASES
CASE $
/EAN TAN, =>S3883= (. ANA('N%>, (A=8>
8>'8> 3S"'N35A and 5A'SQ A8'A5> IANA>'S,
represented in this act by their Attorneyin
)act, IA. ;'8E38I'NA 3. %>4'AS
vs.
RE+U4LIC OF THE +HILI++INES
:.=. No. -?<99<* April -2, C.-C ,22? S(=A
9??0
NOTES IN CASE" G )or a piece of land to be
qualifed for registration under paragraph ,C0
of Section -9, ".5. No. -@C?, the applicant
must conclusively prove that the land is
private and not part of the public domain* All
lands not otherwise appearing to be clearly
within private ownership are presumed to
belong to the State. ,=epublic vs. 'mperial
(redit (orporation, @@@ S(=A <-9 RC..7S0.
%ax declarations are good indicia of
possession in the concept of owner for no one
in his right mind would be paying taxes for a
property that is not in his actual or
constructive possession* ;hat is categorically
required by law is open, continuous, exclusive
and notorious possession and occupation
under a bona fde claim of ownership since
June -C, -?9@ or earlier. ,=epublic vs. =i!alvo,
Jr., 299 S(=A @-2 RC.--S0
C'se N't&!e> "3%'%'>N for review on
certiorari of the decision and resolution of the
(ourt of Appeals
FACTS
RJune -9, C..-S %he petitioners fled
with the =%( of Naic, (avite, an
application for land registration
covering a parcel of land situated in
4arangay 4ancod, 'ndang, (avite and
with an area of 2,?C. square meters.
%he petitioners alleged that they
acquired the sub#ect property from
:regonio :atdula pursuant to a 5eed
of Absolute Sale dated April C@, -??2*
and they and their predecessorsin
interest have been in open, continuous
and exclusive possession of the
sub#ect property in the concept of an
owner for more than <. years.
=%( granted the application* (A gave
due course to the appeal by the
=epublic ruling that the petitioners
failed to prove that they and their
predecessorsininterest have been in
possession of the sub#ect property for
the requisite period of <. years.
=ecords show that the
appelleesM possession over the
sub#ect property can be
rec&oned only from C- June
-?7<, the date when according
to evidence, the sub#ect
property became alienable and
disposable. )rom said date up
to the fling of the application
for registration of title over the
sub#ect property on -9 June
C..-, only eighteen ,-70 years
had lapsed.
%hus, appelleesM possession of
the sub#ect property fell short of
the requirement of open,
continuous and exclusive
possession of at least <. years.
ISSUE> ;hether the petitioners have proven
themselves qualifed to the benefts under the
relevant laws on the confrmation of imperfect
or incomplete titles.
HELD NO"
L'n* Re?ist!'tionH +&,lic L'n* Act 8C"A"
No" $.$9H Section $$ oB t:e +&,lic L'n*
Act p!o;i*es t:'t one oB t:e (o*es oB
*isposin? p&,lic l'n*s s&it',le Bo!
'?!ic&lt&!'l p&!poses is ,) IconE!('tion
oB i(pe!Bect o! inco(plete titles"JC
(ommonwealth Act No. -9-, otherwise &nown
as the T"ublic 8and ActU governs the
classifcation and disposition of lands forming
part of the public domain. Section -- thereof
provides that one of the modes of disposing
public lands suitable for agricultural purposes
is by Tconfrmation of imperfect or incomplete
titlesU. Section 97 thereof enumerates those
who are considered to have acquired an
imperfect or incomplete title over an alienable
and disposable public land.
+!ope!t) Re?ist!'tion Dec!ee 8+"D" No"
$62%9H +!esi*enti'l Dec!ee No" $62%
8+"D" No" $62%9, ot:e!@ise Kno@n 's t:e
I+!ope!t) Re?ist!'tion Dec!ee,J is '
co*iEc'tion oB 'll t:e l'@s !el'ti;e to t:e
!e?ist!'tion oB p!ope!t)"C"residential
5ecree No. -@C? ,".5. No. -@C?0, otherwise
&nown as the T"roperty =egistration 5ecreeU,
is a codifcation of all the laws relative to the
registration of property and Section -9 thereof
specifes those who are qualifed to register
their incomplete title over an alienable and
disposable public land under the %orrens
system.
Fo! oneLs possession 'n* occ&p'tion oB
'n 'lien',le 'n* *ispos',le p&,lic l'n*
to ?i;e !ise to 'n i(pe!Bect title, t:e
s'(e s:o&l* :';e co((ence* on /&ne
$2, $%.6 o! e'!lie!" On t:e ot:e!, Bo! one
to cl'i( t:'t :is possession 'n*
occ&p'tion oB p!i;'te p!ope!t) :'s
!ipene* to i(pe!Bect title, t:e s'(e
s:o&l* :';e ,een Bo! t:e p!esc!ipti;e
pe!io* p!o;i*e* &n*e! t:e Ci;il Co*e"CAs
this (ourt clarifed in Eeirs of Ialabanan v.
=epublic of the "hilippines, @77 S(=A -7C
,C..?0, and =epublic of the "hilippines v. 3ast
Silverlane =ealty 5evelopment (orporation,
222 S(=A 9.- ,C.-C0, Section -9,-0 covers
Talienable and disposable landsU while
Section -9,C0 covers Tprivate propertyU. %hus,
for oneMs possession and occupation of an
alienable and disposable public land to give
rise to an imperfect title, the same should
have commenced on June -C, -?9@ or earlier.
>n the other, for one to claim that his
possession and occupation of private property
has ripened to imperfect title, the same
should have been for the prescriptive period
provided under the (ivil (ode. ;ithout need
for an extensive extrapolation, the private
property contemplated in Section -9,C0 is
patrimonial property as defned in Article 9C-
in relation to Articles 9C. and 9CC of the (ivil
(ode.
+ossession 'n* occ&p'tion oB 'n
'lien',le 'n* *ispos',le p&,lic l'n* Bo!
t:e pe!io*s p!o;i*e* &n*e! t:e Ci;il
Co*e @ill not con;e!t it to p't!i(oni'l o!
p!i;'te p!ope!t)" T:e!e (&st ,e 'n
eDp!ess *ecl'!'tion t:'t t:e p!ope!t) is
no lon?e! inten*e* Bo! p&,lic se!;ice o!
t:e *e;elop(ent oB n'tion'l @e'lt:"C't
was explained in Eeirs of Ialabanan and 3ast
Silverlane, that possession and occupation of
an alienable and disposable public land for
the periods provided under the (ivil (ode will
not convert it to patrimonial or private
property. %here must be an express
declaration that the property is no longer
intended for public service or the
development of national wealth. 'n the
absence thereof, the property remains to be
alienable and disposable and may not be
acquired by prescription under Section -9,C0
of ".5. No. -@C?.
E'st Sil;e!l'ne C'se, s&p!'
Hei!s oB 1'l','n'n C'se, s&p!'
CASE 2
(='S>8>:> (. DO1IN2O
vs. S3L3='N> AN5 RA<1UNDO LANDICHO,
JA8'AN A4388>, IA=%A 53 SA:AN AN5
35'%EA :. SA=I'3N%>
C'se N't&!e> "3%'%'>N for review on
certiorari of a decision of the (ourt of Appeals
FACTS
5omingo fled RApril C., -??<S with the
=%( of %agaytay (ity an application for
registration of fve ,@0 parcels of land
located at 4arangay %olentino,
%agaytay, have a total land area of
<7,?7@ square meters.
(8A'I$ 5omingo bought said
lots from :enoveva Ianlapit
,:enoveva0 in -?97 and has
since been in continuous, open,
public, adverse and
uninterrupted possession
thereof in the concept of an
owner.
"rior to his purchase of the lots,
:enoveva had been in
possession thereof in the
concept of an owner for more
than <. years.
Acting on the directive of the =%(, the
5irector of 8ands fled a =eport that
1per records of the 8ands Ianagement
4ureau in Ianila, the land involved in
said case was not covered by any land
patent or by public land application
pending issuance of patent.1 G the
same was supported thru a report by
the Regional Technical Director Region
! "#ce$
Eerein respondents opposed* during
the pendency of his application,
5omingo died* =%( granted his
application.
=espondents appealed to (A* (A set
aside =%(Ms decision ruling$
that while 5omingo sought
#udicial confrmation of his
imperfect title under the "ublic
8and Act and Section -9 ,-0 of
"residential 5ecree ,".5.0 No.
-@C?, 1%he "roperty
=egistration 5ecree,1 he failed
to prove that he and his
predecessorsininterest had
been in possession and
occupation of the lots under a
bona fde claim of ownership
since June -C, -?9@ or earlier.
that 5omingo failed to present
the alleged deed of sale
executed by :enoveva and
1could only prove through his
%ax 5eclaration that his
possession in the concept of an
owner started only in -?97.
A I= was fled by 5omingo but the
was denied by the (A. Eence, this
petition.
ISSUE> ;hether or not 5omingo is entitled to
the registration of the lots in question
pursuant toSection -9, sub pars. ,-0 and ,90 of
".5. -@C?.
HELD> NO"
%an& Registration3 Re4'isites3 To prove
tat a lan& is aliena+le- an applicant
m'st concl'sively esta+lis te
e"istence of a positive act of te
government- s'c as a presi&ential
proclamation or an e"ec'tive or&er- or
a&ministrative action- investigation
reports of te 5'rea' of %an&s
investigator or a legislative act or
stat'te.6 Section -9 of ".5. No. -@C?
provides that to thus be entitled to
registration of a land, the applicant must
prove that ,a0 the land applied for forms part
of the disposable and alienable agricultural
lands of the public domain* and ,b0 he has
been in open, continuous, exclusive, and
notorious possession and occupation of the
same under a bona fde claim of ownership
either since time immemorial or since June
-C, -?9@.
All lands not otherwise appearing to be clearly
within private ownership are presumed to
belong to the State, and unless it has been
shown that they have been reclassifed by the
State as alienable or disposable to a private
person, they remain part of the inalienable
public domain. To p!o;e t:'t ' l'n* is
'lien',le, 'n 'pplic'nt (&st concl&si;el)
est',lis: t:e eDistence oB ' positi;e 'ct
oB t:e ?o;e!n(ent, s&c: 's '
p!esi*enti'l p!ocl'('tion o! 'n
eDec&ti;e o!*e!, o! '*(inist!'ti;e
'ction, in;esti?'tion !epo!ts oB t:e
4&!e'& oB L'n*s in;esti?'to! o! '
le?isl'ti;e 'ct o! st't&te"
"3%'%'>N 53N'35.
CASE 0
RE+U4LIC OF THE +HILI++INES
vs.
CAND< 1AMER, INC", 's !ep!esente* ,)
its +!esi*ent, ON2 <EE SEE
2"R" No" $70777H /&ne 22, 2--7 8.%2
SCRA 2729
FACTS
Sometime in -??7, (andy Ia&er, 'nc.
decided to purchase a parcel of land in
(ainta%aytay (adastre, specifcally
located below the reglementary la&e
elevation of -C.@. meters, about ?..
meters away from the 8aguna de 4ay,
and bounded on the southwest by the
Ianggahan )loodway, and on the
southeast by a legal easement.
After the 5eed of Absolute Sale in its
favor was executed by Antonio, 3ladia
and )elisa ,all surnamed (ru!0,
(andyma&er proceeded to apply for
registration for title over the sub#ect
property with the I%( of %aytay, =i!al.
=espective reports were submitted on
the status of the parcel of land sub#ect
of (andyma&erMs application
(ommunity 3nvironment and
Natural =esources >6cer
,(3N=>0 of Antipolo (ity fled
on his =eport declaring that
1RtShe land falls within the
Alienable and 5isposable Vone
and that the property is the
sub#ect of (3N=> (ase No.
@C.,?70 entitled "erpetua San
Jose v. Almario (ru!.
>n the other hand, the 8=A,
recommended the exclusion of
8ot No. <-<74 on the ground
that it is a legal easement and
intended for public use, hence,
inalienable and indisposable.
%he 8aguna 8a&e 5evelopment
Authority ,885A0 approved a resolution
providing that untitled shoreland areas
may be leased sub#ect to conditions
enumerated therein W thus the
amendment of (andyma&erMs
application.
>n July C..-, the =epublic of the
"hilippines, the 885A fled its
opposition which alleged that the lot
sub#ect of theapplication for
registration may not be alienated and
disposed since it is considered part of
the 8aguna 8a&e 4ed, a public land
within, its #urisdiction.
"etitioner asserts that the
3ngineerMs Survey =eport and
the 8aguna de 4ay Shoreland
Survey both show that 8ot No.
<-<7A is located below the
reglementary la&e elevation,
hence, forms part of the 8aguna
8a&e bed. 't insists that the
property belongs to the public
domain as classifed under
Article @.C of the (ivil (ode.
=espondent failed to present
incontrovertible evidence to
warrant the registration of the
property in its name as owner.
%he testimonies of the two
witnesses only proved that the
possession of the land may be
characteri!ed as mere casual
cultivation* they failed to prove
that its predecessors occupied
the land openly, continuously,
exclusively, notoriously and
adversely in the concept of
owner since June -C, -?9@ or
earlier.
ISSUE8Ns9> 8$9 ;hether the property sub#ect
of the amended application is alienable and
disposable property of the State*
,C0 and if so, whether respondent adduced the
requisite quantum of evidence to prove its
ownership over the property under Section -9
of ".5. -@C?.
HELD>
(1) %he property sub#ect of this application
was alienable and disposable public
agricultural land until July -7, -?22.
Eowever, respondent failed to prove that
it possesses registerable title over the
property.
'n this case, the evidence on record shows
that the property is alienable agricultural
land. =omeo (adano of the (ommunity
3nvironment and Natural =esources >6ce,
Antipolo =i!al, certifed that the property
Tfalls within the Alienable and 5isposable
!one, under 8and (lassifcation "ro#ect No.
@A, per 8.(. Iap No. 2<? certifed
released on Iarch --, -?C7.U
Ho@e;e!, &n*e! R"A" No" .6- @:ic:
@'s 'pp!o;e* on /&l) $, $%77, l'n*s
loc'te* 't 'n* ,elo@ t:e ('Di(&(
l'Ke le;el oB ele;'tion oB t:e L'?&n'
*e 4') '!e p&,lic l'n*s @:ic: Bo!(
p'!t oB t:e ,e* oB s'i* l'Ke" Such lands
denominated as la&eshore areas are linear
strips of open space designed to separate
incompatible element or uses, or to
control pollution+nuisance, and for
identifying and defning development
areas or !one. Such areas of the la&e with
an approximate total area of -9,...
hectares form a strip of the la&ebed along
its shores alternately submerged or
exposed by the annual rising and lowering
of the la&e water. %hey have
environmental ecological signifcance and
actual potential economic benefts.
Ander Section - of the law, the national
policy of the State is to promote and
accelerate the development and balanced
growth of the 8aguna 8a&e area and the
surrounding provinces, cities and towns
within the context of the national and
regional plans and policies for social and
economic development and to carry out
the development of the 8aguna 8a&e
region with due regard and adequate
provisions for environmental management
and control, preservation of the quality of
human life and ecological systems, and
the prevention of undue ecological
disturbances, deterioration and pollution.
(2) Applicants for confrmation of
imperfect title m'st- terefore-
prove te follo)ing7 .a1 tat te
lan& forms part of te &isposa+le
an& aliena+le agric'lt'ral lan&s of
te p'+lic &omain3 an& .+1 tat
tey ave +een in open-
contin'o's- e"cl'sive- an&
notorio's possession an&
occ'pation of te same 'n&er a
+ona f&e claim of o)nersip
eiter since time immemorial or
since 8'ne 19- 19:;.
Ander the =egalian doctrine, all lands
not otherwise appearing to be clearly
within private ownership are presumed
to belong to the State. %he
presumption is that lands of whatever
classifcation belong to the State.
Anless public land is shown to have
been reclassifed as alienable or
disposable to a private person by the
State, it remains part of the inalienable
public domain. "roperty of the public
domain is beyond the commerce of
man and not susceptible of private
appropriation and acquisitive
prescription. >ccupation thereof in the
concept of owner no matter how long
cannot ripen into ownership and be
registered as a title. %he statute of
limitations with regard to public
agricultural lands does not operate
against the State unless the occupant
proves possession and occupation of
the same after a claim of ownership for
the required number of years to
constitute a grant from the State.
No public land can be acquired by
private persons without any grant from
the government, whether express or
implied. 't is indispensable that there
be a showing of a title from the State.
Te rationale for te perio& <since
time immemorial or since 8'ne 19-
19:;= lies in te pres'mption tat
te lan& applie& for pertains to
te State- an& tat te occ'pants
or possessor claim an interest
tereon only +y virt'e of teir
imperfect title as contin'o's-
open an& notorio's possession.
"3%'%'>N :=AN%35.
CASE .
RE+U4LIC OF THE +HILI++INES
;s"
THE HONORA4LE COURT OF A++EALS
'n* CORAOON NA2UIT
2"R" No" $..-67" /'n&'!) $7, 2--6 8..
SCRA ..29
FACTS
(ora!on Naguit fled a petition for
registration of title which see&s #udicial
confrmation of her imperfect title over
a parcel of land in Nabas, A&lan.
't was alleged that Naguit and her
predecessorsininterest have occupied
the land openly and in theconcept of
owner without any ob#ection from any
private person or even the
governmentuntil she fled her
application for registration.
%he I(%( rendered a decision
confrming the title in the name of
Naguit upon failure of =ustico Angeles
to appear during trial after fling his
formal opposition to the petition.
%he Solicitor :eneral, representing the
=epublic of the "hilippines, fled a
motionfor reconsideration on the
ground that the property which is in
open, continuous andexclusive
possession must frst be alienable.
Naguit could not have maintained a
bonafde claim of ownership since the
sub#ect land was declared as alienable
and disposableonly on >ctober -@,
-?7.. %he alienable and disposable
character of the land shouldhave
already been established since June
-C, -?9@ or earlier.
ISSUE> ;hether or not it is necessary under
Section -9 ,-0 of the "roperty =egistration
5ecree that the sub#ect land be frst classifed
as alienable and disposable beforethe
applicantMs possession under a bona fde
claim of ownership could even start.
HELD> %an& Titles3 %an& Registration3
Re4'isites for te fling of an application
for registration of title 'n&er Section
1:.11.O%here are three obvious requisites for
the fling of an application for registration of
title under Section -9,-0Othat the property in
question is alienable and disposable land of
the public domain* that the applicants by
themselves or through their predecessorsin
interest have been in open, continuous,
exclusive and notorious possession and
occupation, and* that such possession is
under a bona fde claim of ownership since
June -C, -?9@ or earlier.
Te more reasona+le interpretation of
Section 1:.11 is tat it merely re4'ires
te property so'gt to +e registere& as
alrea&y aliena+le an& &isposa+le at te
time te application for registration of
title is fle&.6%he more reasonable
interpretation of Section -9,-0 is that it
merely requires the property sought to be
registered as already alienable and disposable
at the time the application for registration of
title is fled. 'f the State, at the time the
application is made, has not yet deemed it
proper to release the property for alienation
or disposition, the presumption is that the
government is still reserving the right to
utili!e the property* hence, the need to
preserve its ownership in the State
irrespective of the length of adverse
possession even if in good faith. Eowever, if
the property has already been classifed as
alienable and disposable, as it is in this case,
then there is already an intention on the part
of the State to abdicate its exclusive
prerogative over the property.
Tere are no material &i,erences
+et)een Section 1:.11 of te Property
Registration Decree an& Section :>.+1 of
te P'+lic %an& Act as amen&e&3 Te
s'+2ect lan&s 'n&er Section :>.+1 of te
P'+lic %an& Act an& Section 1:.11 of te
Property Registration Decree are of te
same type.6%here are no material
diBerences between Section -9,-0 of the
"roperty =egistration 5ecree and Section
97,b0 of the "ublic 8and Act, as amended.
%rue, the "ublic 8and Act does refer to
Tagricultural lands of the public domain,U
while the "roperty =egistration 5ecree uses
the term Talienable and disposable lands of
the public domain.U 't must be noted though
that the (onstitution declares that Talienable
lands of the public domain shall be limited to
agricultural lands.U (learly, the sub#ect lands
under Section 97,b0 of the "ublic 8and Act and
Section -9,-0 of the "roperty =egistration
5ecree are of the same type.
"rescription is one of the modes of acquiring
ownership under the (ivil (ode. %here is a
consistent #urisprudential rule that properties
classifed as alienable public land may be
converted into private property by reason of
open, continuous and exclusive possession of
at least thirty ,<.0 years. ;ith such
conversion, such property may now fall within
the contemplation of Tprivate landsU under
Section -9,C0, and thus susceptible to
registration by those who have acquired
ownership through prescription. %hus, even if
possession of the alienable public land
commenced on a date later than June -C,
-?9@, and such possession being open,
continuous and exclusive, then the possessor
may have the right to register the land by
virtue of Section -9,C0 of the "roperty
=egistration 5ecree.
%he assailed Decision of the (ourt of Appeals
dated July -C, C... is hereby A))'=I35. No
costs.
4" ACCRETION
CASE $
NEW RE2ENT SOURCES, INC"
vs.
TEOFILO 3ICTOR TAN/UATCO, /R", 'n*
3ICENTE CUE3AS,
2"R" No" $7--" Ap!il $7, 2--%
FACTS
"etitioner through counsel prays for the
reversal of the >rders dated )ebruary -C,
C..@
-
and July -, C..@
C
of the =egional %rial
(ourt ,=%(0 of (alamba (ity, 4ranch <7, in
(ivil (ase No. C22C?7(. %he =%( had
granted the demurrer to evidence fled by
respondent %an#uatco, and then denied
petitionerMs motion for reconsideration.
"etitioner New =egent Sources, 'nc.
,N=S'0 fled a (omplaint for
=escission+5eclaration of Nullity of
(ontract, =econveyance and 5amages
against respondent %an#uatco and the
=egister of 5eeds of (alamba before
the =%( of (alamba, 8aguna, 4ranch
<7.
N=S' alleged that in -??9, it
authori!ed Licente ". (uevas ''',
its (hairman and "resident, to
apply on its behalf, for the
acquisition of two parcels of
land by virtue of its right of
accretion. (uevas purportedly
applied for the lots in his name
by paying a cetain sum to the
4ureau of 8ands.
>n January C, -??@, (uevas and
his wife executed a Loting %rust
Agreement over their shares of
stoc& in the corporation.
"ending approval of the
application with the 4ureau of
8ands, (uevas assigned his
right to %an#uatco
>n Iarch -C, -??2, the 5irector
of 8ands released an >rder,
which approved the transfer of
rights from (uevas to %an#uatco
%ransfer (ertifcates of %itle
Nos. %<2?9.2 and %
<2?9.7 were then issued in the
name of %an#uatco.
%an#uatco claimed that it was (uevas
who was alleged to have defrauded
the corporation. Ee averred further
that the complaint did not charge him
with &nowledge of the agreement
between (uevas and N=S'.
'n dismissing N=S'Ms complaint ,and
granting %anuatcoMs demurrer to
evidence0, the =%( cited the >rder of
the 5irector of 8ands and certain
insu6ciencies in the allegations in the
complaint.
=%( further held that %an#uatco
is an innocent purchaser for
value.
N=S' moved for reconsideration, but it
was denied.
Eence, N=S' fled the instant petition.
ISSUE> NRSI 'nc:o!s its cl'i( o;e! t:e
l'n*s s&,Pects oB t:is c'se on t:e !i?:t
oB 'cc!etion and thus submitted in evidence,
titles to four parcels of land, which allegedly
ad#oin the lots in the name of %an#uatco.
HELD> Accretion3 Re4'isites to Ac4'ire
Property +y Accretion.O4ut it must be
stressed that accretion as a mode of acquiring
property under Article 9@7 of the (ivil (ode
requires the concurrence of the following
requisites$ ,-0 that the deposition of soil or
sediment be gradual and imperceptible* ,C0
that it be the result of the action of the waters
of the river* and ,<0 that the land where
accretion ta&es place is ad#acent to the ban&s
of rivers. %hus, it is not enough to be a
riparian owner in order to en#oy the benefts
of accretion. >ne who claims the right of
accretion must show by preponderant
evidence that he has met all the conditions
provided by law.
Ot:e!s
+!ope!t)H Recon;e)'nceH An 'ction Bo!
!econ;e)'nce is one t:'t seeKs to
t!'nsBe! p!ope!t), @!on?B&ll) !e?iste!e*
,) 'not:e!, to its !i?:tB&l 'n* le?'l
o@ne!"C"etitioner fled a complaint for
rescission+declaration of nullity of contract,
reconveyance and damages against
respondents. An action for reconveyance is
one that see&s to transfer property,
wrongfully registered by another, to its
rightful and legal owner. 'n an action for
reconveyance, the certifcate of title is
respected as incontrovertible. ;hat is sought
instead is the transfer of the property,
specifcally the title thereof, which has been
wrongfully or erroneously registered in
another personMs name, to its rightful and
legal owner, or to one with a better right.
ReA&isites to W'!!'nt ' Recon;e)'nce"C
%o warrant a reconveyance of the land, the
following requisites must concur$ ,-0 the
action must be brought in the name of a
person claiming ownership or dominical right
over the land registered in the name of the
defendant* ,C0 the registration of the land in
the name of the defendant was procured
through fraud or other illegal means* ,<0 the
property has not yet passed to an innocent
purchaser for value* and ,90 the action is fled
after the certifcate of title had already
become fnal and incontrovertible but within
four years from the discovery of the fraud, or
not later than -. years in the case of an
implied trust. "etitioner failed to show the
presence of these requisites.
(ertifcate of Title3 Innocent P'rcaser
for ?al'e3 A person &ealing )it
registere& lan& may safely rely 'pon te
correctness of te certifcate of title
iss'e& terefor an& te la) )ill in no
)ay o+lige im to go +ein& te
certifcate to &etermine te con&ition of
te property3 #eaning of an Innocent
P'rcaser for ?al'e.6"etitioner introduced
in evidence %(% Nos. %<2?9.2 and %<2?9.7
in the name of respondent %an#uatco. %hese
titles bear a certifcation that %an#uatcoMs titles
were derived from >(% No. C9@ in the name
of no less than the =epublic of the "hilippines.
Eence, we cannot validly and fairly rule that
in relying upon said title, %an#uatco acted in
bad faith. A person dealing with registered
land may safely rely upon the correctness of
the certifcate of title issued therefor and the
law will in no way oblige him to go behind the
certifcate to determine the condition of the
property. %his applies even more particularly
when the seller happens to be the =epublic,
against which, no improper motive can be
ascribed. %he law, no doubt, considers
%an#uatco an innocent purchaser for value. An
innocent purchaser for value is one who buys
the property of another, without notice that
some other person has a right or interest in
such property and pays the full price for the
same, at the time of such purchase or before
he has notice of the claims or interest of some
other person in the property.
"3%'%'>N 53N'35.
CASE 2
A?ne ;" Di!ecto! oB L'n*s Q2"R" No"
.-0%%" Fe,!&'!) 7, $%%-"R
A?ne ;" IAC Q2"R" No" 72266" Fe,!&'!) 7,
$%%-"R
Secon* Di;ision, Re?'l'*o 8/9> .
conc&!!in?
FACTS
%he land sub#ect matter of the case was
originally covered by )ree "atent C<C2<
issued on -7 April -?<7 in the name of
Eerminigildo Agpoon. >n C- Iay -?<7,
pursuant to the said patent, the =egister of
5eeds of "angasinan issued to said
Eerminigildo Agpoon >(% C<7.. "resentacion
Agpoon :ascon inherited the said parcel of
land upon the death of her father,
Eerminigildo, and was issued %(% <CC.? on 2
April -?2.. "resentacion declared the said
land for taxation purposes in her name under
%5 --@.2 and taxes were paid thereon in her
name.
>n -< April -?7-, spouses Joaquin and
"resentacion :ascon fled (ivil (ase ACC72 in
the then ()'
"angasinan for recovery of possession and
damages against Iarcelino (. Agne, )elix
>riane, Agaton %aganas
,represented by )lorentino (. %aganas0, Eilario
3scorpi!o, 'sabelo Iauricio, Eeirs of =oman
5amaso ,Jorge
5amaso and Ale#andro 5amaso0, Eeirs of
)rancisco =amos ,3ncarnacion =. 8eano and
5ominga =. Iedrano0, Eeirs of Sabina :elacio
Agapito ,Serapio Agapito and Nicolasa
Agapito0, )eli!a 5iccion Agne, 3stanislao
:orospe ,represented by 3li!abeth :. 4adua0,
8ibrado 4adua, Nicolas Lillanieva, Eeirs of
(arlos "alado ,)ortunata "alado and 'sabelita
"alado0, "rimitivo %aganas, "anflo Soingco,
4ernardo "alattao, Iarcelino S. Santos and
"aulino 5. Agne Jr. ,minor, represented by
)eli!a 5iccion Agne0. %heir complaint states
that they are the registered owners under %(%
<CC.? of the parcel of land situated in 4arrio
4antog, Asingan, "angasinan which is now in
the possession of Agne, et.al.* that during the
Japanese occupation, the latter, ta&ing
advantage of the abnormal conditions then
obtaining, too& possession of said land by
means of fraud, stealth, strategy and
intimidation* that :ascon repeatedly
demanded the surrender of the physical
possession of said property but the latter
refused.
Agne, et.al. alleged that the land in question
was formerly a part of the river bed of the
Agno(hico =iver* that in the year -?C., a big
Good occurred which caused the said river to
change its course and abandon its original
bed* that by virtue of the provisions of Article
<7. of the Spanish (ivil (ode which was then
the law in force, Agne, et.al., by operation of
law, became the owners by accession or
accretion of the respective aliquot parts of
said river bed bordering their properties* that
since -?C., they and their predecessors in
interest occupied and exercised dominion
openly and adversely over said portion of the
abandoned river bed in question abutting
their respective riparian lands continuously up
to the present to the exclusion of all other
persons, particularly Eerminigildo Agpoon*
that they have introduced improvements
thereon by constructing irrigation canals and
planting trees and agricultural crops thereon
and converted the land into a productive area.
>n 2 Iarch -?79, while the above case was
still pending, Agne, et.al. fled a complaint
against 5irector of 8ands and spouses Agpoon
with the former ()' "angasinan for annulment
of title, reconveyance of and+or action to clear
title to a parcel of land, which action was
doc&eted as (ivil (ase AC29?. Agne, et. al.
alleged in their said complaint that the land in
question, which was formerly a portion of the
bed of Agno(hico river which was abandoned
as a result of the big Good in -?C., belongs to
them pursuant to the provision of Article <7.
of the old (ivil (ode* that it was only on -<
April -?7-, when spouses fled a complaint
against them, that they found out that the
said land was granted by the :overnment to
Eerminigildo Agpoon under )ree "atent
C<C2<, pursuant to which >(% C<7. was
issued in the latterMs name* and that the said
patent and subsequent titles issued pursuant
thereto are null and void since the said land,
an abandoned river bed, is of private
ownership and, therefore, cannot be the
sub#ect of a public land grant.
>n C- June -?79, the trial court rendered a
decision in (ivil (ase ACC72, ordering Agne,
et.al. to surrender physical possession of land
in question, to pay in soludum the produce of
the land ,"@,... per year0 from the date of
the fling of the action at the rate of 2/
interest per annum until fully paid* to pay in
solidum the amount of "7.. representing
attorneyMs fees* and to pay the costs.
Agne, et.al. appealed to the appellate court.
>n <. January -?7@ the former 'A( a6rmed in
toto in A(:=
(L 2.<77= the decision of the trial court, and
with the denial of Agne et.al.Ms motion for
reconsideration, Agne, et.al. fled a petition
for review on certiorari with the Supreme
(ourt ,:= 7CC@@0.
>n C9 June -?79, the ()' "angasinan, acting
on the motion to dismiss fled by the 5irector
of 8ands and spouses Agpoon, issued an order
dismissing (ivil (ase AC29? for annulment of
title by merely citing the statement in the
case of Antonio, et al. vs. 4arroga, et al. that
an action to annul a free patent many years
after it had become fnal and indefeasible
states no cause of action. Agne, et.alMs motion
for the reconsideration of the order was
denied on -- September -?79, hence the
petition for review on certiorari ,:= 89.<??0
%he Supreme (ourt reversed and set aside
the assailed decision of 'A( in A(:= (L
2.<77= and the questioned order of
dismissal of the trial court in its (ivil (ase
C29?, and rendered #udgment ordering the
:ascon to reconvey the parcel of land to
Agne, et.al.
ISSUE> W:o o@ns t:e p!ope!t)S
A?ne o@ns p!ope!t)H Rip'!i'n o@ne!s
ipso B'cto o@ne!s oB ','n*one* !i;e!
,e* 8Ol* Ci;il
Co*e9
%he old (ivil (ode, the law then in force,
provides that Tthe beds of rivers which remain
abandoned because the course of the water
has naturally changed belong to the owners of
the riparian lands throughout their respective
lengths. 'f the abandoned bed divided estates
belonging to diBerent owners, the new
dividing line shall run at equal distance
therefrom.U %hus, once the river bed has been
abandoned, the riparian owners become the
owners of the abandoned bed to the extent
provided by this article. %he acquisition of
ownership is automatic. %here need be no act
on the part of the riparian owners to sub#ect
the accession to their ownership, as it is
sub#ect thereto ipso #ure from the moment the
mode of acquisition becomes evident, without
the need of any formal act of acquisition.
Such abandoned river bed had fallen to the
private ownership of the owner of the riparian
land even without any formal act of his will
and any unauthori!ed occupant thereof will be
considered as a trespasser. %he right in re to
the principal is li&ewise a right in re to the
accessory, as it is a mode of acquisition
provided by law, as the result of the right of
accretion. Since the accessory follows the
nature of the principal, there need not be any
tendency to the thing or manifestation of the
purpose to sub#ect it to our ownership, as it is
sub#ect thereto ipso #ure from the moment the
mode of acquisition becomes evident. %he
right of the owner of land to additions thereto
by accretion has been said to rest in the law
of nature, and to be analogous to the right of
the owner of a tree to its fruits, and the owner
of Goc&s and herds to their natural increase.
'n the present case, Agne, et.al. became
owners of aliquot portions of said abandoned
river bed as early as -?C., when the Agno
=iver changed its course, without the
necessity of any action or exercise of
possession on their part, it being an admitted
fact that the land in dispute, prior to its
registration, was an abandoned bed of the
Agno =iver and that Agne, et. al. are the
riparian owners of the lands ad#oining the said
bed.
CASE 0
RE+U4LIC >) %E3 "E'8'""'N3S ,5'=3(%>=
>) 8AN5S0
vs.
%E3 E>N. COURT OF A++EALS, 4EN/A1IN
TANCINCO, AOUCENA TANCINCO RE<ES,
1ARINA TANCINCO I1+ERIAL 'n* 1ARIO
C" TANCINCO
No. 82-297. >ctober -C, -?79.
FACTS
%his is a petition for certiorari to set aside the
decision of the respondent (ourt of Appeals
a6rming the decision of the ()' 4ulacan,
which found that 8ots - and C of "lan "su
-<-7?C are accretion to the land covered by
%ransfer (ertifcate of %itle No. 7?7.? and
ordered their registration in the names of the
private respondents.
=espondents 4en#amin %ancinco,
A!ucena %ancinco =eyes, Iarina
,should be 1Iaria10 %ancinco 'mperial
and Iario (. %ancinco are registered
owners of a parcel of land covered by
situated at 4arrio Abihan,
Ieycauayan, 4ulacan bordering on the
Ieycauayan and 4ocaue rivers.
R-?7<S "=s fled an application for the
registration of three lots ad#acent to
their fshpond property
A year after, Assistant "rovincial )iscal
Amando (. Licente, in representation
of the 4ureau of 8ands fled a written
opposition to the application for
registration.
R-?7@S "=s partially withdrew their
application for registration with respect
to 8ot < of "lan "su-<-7?C in line with
the recommendation of the
(ommissioner appointed by the (ourt.
8ots - and C sub#ect of the proceedings
()' granted the application and
declared that lands in question are
accretions to "=sM fshponds.
R-?72S "etitioner =epublic appealed to
the respondent (A.
(A a6rmed in toto the ()'Ms decision.
%here are facts and circumstances in the
record which render untenable the fndings of
the trial court and the (ourt of Appeals that
the lands in question are accretions to the
private respondentsN fshponds.
%he petitioner submits that there is no
accretion to spea& of under Article 9@7 of the
New (ivil (ode because what actually
happened is that the private respondents
simply transferred their di&es further down
the river bed of the Ieycauayan =iver, and
thus, if there is any accretion to spea& of, it is
manmade and artifcial and not the result of
the gradual and imperceptible sedimentation
by the waters of the river.
>n the other hand, the private respondents
rely on the testimony of Irs. Lirginia AcuXa to
the eBect that$ t%&$'(h)w*'
xxx xxx xxx
... when witness frst saw the
land, namely, 8ots - K C, they
were already dry almost at the
level of the "ilapil of the
property of 5r. %ancinco, and
that from the boundaries of the
lots, for about two ,C0 arms
length the land was still dry up
to the edge of the river* that
sometime in -?@-, a new "ilapil
was established on the
boundaries of 8ots - K C and
soil from the old "ilapil was
transferred to the new "ilapil
and this was done sometime in
-?@-* that the new lots were
then converted into fshpond,
and water in this fshpond was
two ,C0 meters deep on the side
of the "ilapil facing the fshpond
... .
%he private respondents submit that the
foregoing evidence establishes the fact of
accretion without human intervention
because the transfer of the di&e occurred
after the accretion was complete.
ISSUE> W:et:e! petitione! is co!!ectS
HELD> <ES"
+!ope!t)H L'n* Re?ist!'tionH ReA&isites
Bo! l'n* 'cc!etion to t'Ke pl'ce Bo!
,eneEt oB !ip'!i'n o@ne!"C%he above
quoted article requires the concurrence of
three requisites before an accretion covered
by this particular provision is said to have
ta&en place. %hey are ,-0 that the deposit be
gradual and imperceptible* ,C0 that it be made
through the eBects of the current of the
water* and ,<0 that the land where accretion
ta&es place is ad#acent to the ban&s of rivers.
Fo! 'cc!etion o! 'll&;ion to Bo!( p'!t oB
!e?iste!e* l'n* oB !ip'!i'n o@ne!, t:e
?!'*&'l 'll&;i'l *eposits (&st ,e *&e to
t:e eFects oB t:e !i;e!Ls c&!!ent"
Deposits ('*e ,) :&('n inte!;ention
'!e eDcl&*e*"C%he requirement that the
deposit should be due to the eBect of the
current of the river is indispensable. %his
excludes from Art. 9@7 of the New (ivil (ode
all deposits caused by human intervention.
Alluvion must be the exclusive wor& of nature.
'n the instant case, there is no evidence
whatsoever to prove that the addition to the
said property was made gradually through the
eBects of the current of the Ieycauayan and
4ocaue rivers. ;e agree with the observation
of the Solicitor :eneral that it is preposterous
to believe that almost four ,90 hectares of
land came into being because of the eBects of
the Ieycauayan and 4ocaue rivers. %he lone
witness of the private respondents who
happens to be their overseer and whose
husband was frst cousin of their father
noticed the four hectare accretion to the
twelve hectare fshpond only in -?<?. %he
respondents claim that at this point in time,
accretion had already ta&en place. 'f so, their
witness was incompetent to testify to a
gradual and imperceptible increase to their
land in the years before -?<?.
E;i*enceH In t:e c'se 't ,'! t:e!e is
e;i*ence t:'t 'lle?e* 'll&;i'l *eposits
@e!e ('n=('*e"CEowever, the witness
testifed that in that year, she observed an
increase in the area of the original fshpond
which is now the land in question. 'f she was
telling the truth, the accretion was sudden.
Eowever, there is evidence that the alleged
alluvial deposits were artifcial and manmade
and not the exclusive result of the current of
the Ieycauayan and 4ocaue rivers. %he
alleged alluvial deposits came into being not
because of the sole eBect of the current of the
rivers but as a result of the transfer of the
di&e towards the river and encroaching upon
it. %he land sought to be registered is not
even dry land cast imperceptibly and
gradually by the riverMs current on the
fshpond ad#oining it. 't is under two meters of
water. %he private respondentsM own evidence
shows that the water in the fshpond is two
meters deep on the side of the pilapil facing
the fshpond and only one meter deep on the
side of the pilapil facing the river.
A !ip'!i'n o@ne! c'nnot !e?iste!
'cc!etions to :is l'n* '!isin? B!o(
speci'l @o!Ks o! ('n=('*e *iKes
const!&cte* Bo! !ecl'('tion p&!poses"C
%he reason behind the law giving the riparian
owner the right to any land or alluvion
deposited by a river is to compensate him for
the danger of loss that he suBers because of
the location of his land. 'f estates bordering
on rivers are exposed to Goods and other evils
produced by the destructive force of the
waters and if by virtue of lawful provisions,
said estates are sub#ect to incumbrances and
various &inds of easements, it is proper that
the ris& or danger which may pre#udice the
owners thereof should be compensated by the
right of accretion. ,(ortes v. (ity of Ianila, -.
"hil. @270. Eence, the riparian owner does not
acquire the additions to his land caused by
special wor&s expressly intended or designed
to bring about accretion. ;hen the private
respondents transferred their di&es towards
the river bed, the di&es were meant for
reclamation purposes and not to protect their
property from the destructive force of the
waters of the river.
+&,lic L'n*sH 4e*s oB !i;e!s '!e non=
!e?iste!',le po!tions oB t:e p&,lic
*o('in"C%he lower court cannot validly
order the registration of 8ots - K C in the
names of the private respondents. %hese lots
were portions of the bed of the Ieycauayan
river and are therefore classifed as property
of the public domain under Article 9C.
paragraph - and Article @.C, paragraph - of
the (ivil (ode of the "hilippines. %hey are not
open to registration under the 8and
=egistration Act. %he ad#udication of the lands
in question as private property in the names
of the private respondents is null and void.