Republic of the Philippines, represented by Mindanao Medical Center vs CA and

Alejandro Y de Jesus
G.R. No. L-40912, September 30, 1976

Facts:
On January 22, 1921, Eugenio de Jesus, father of the respondent Alejandro de
Jesus, applied with the Bureau of Lands for Sales Patent of a 33-hectare land situated
in barrio Libranon, Davao. On January 23, 1934, the Bureau of Lands through the
Davao Land District Officer, accepted the sealed bids for the purchase of the subjected
land. Irineo Jose bidded P20 per hectare while Dr. Jose Ebro bidded for P100.50 per
hectare. The director annulled the said auction for the reason that sales applicant
Eugenio de Jesus failed to participate in the bid. Another bidding was held on October
3, 1934 and Eugenio de Jesus was the lone bidder. He equaled the bid submitted by Dr.
Jose Ebro at P100.50 and made a deposit of P221 as 10% deposit of the price of the
land at P110.50 per hectare. That on November 23, 1934, the Director of Lands issued
an award order to Eugenio de Jesus with regards to the said lot stating the coverage of
the land which is located in Davao with an area of 22 hectares at P100.50 per hectare
or P2210 for the whole tract.
On August 28, 1936, the Director of Lands amended the sales application of
Eugenio de Jesus stating that a portion of the said land is needed by the Philippine
Army for military camp site purposes thereby excluding 12.8081 hectares which is the
land in question. On September 7, 1936, President Manuel Quezon issued
Proclamation No. 85 thereby declaring the said lot to be withdrawn from sale and
settlement and reserving the same for military purposes under the administration of the
Chief of Staff, Philippine Army. On November 29, 1939, Eugenio de Jesus paid P660.45
covering the 8th and 10th installment for the 20.6400 hectares, the remaining area after
the sales application was amended which did not include the military camp. Thereafter,
on May 15, 1948, the Director of Lands ordered the issuance of patent to Eugenio de
Jesus for the tract of land having an area of 20.6400 hectares. On the same date, the
secretary of Agriculture and Natural Resources likewise granted a sales patent to
Eugenio de Jesus containing an area of 20.6400 hectares.
On August 11, 1956, President Ramon Magsaysay revoked the Proclamation No.
85 and declared the disputed lot open to disposition under the provisions of Public Land
Act for resettlement of the squatters in Davao City. Then on October 9, President
Ramon Magsaysay revoked this Proclamation and reserved the same lot for medical
center site under the administration of the Director of Hospital. Whereupon, on
December 6, 1969, petitioner Mindanao Medical Center applied for Torrens registration
of the said lot with the Court of First Instance of Davao, claimed fee simple title to the
said land on the strength of the proclamation reserving the area for medical center
purposes.
Respondent Alejandro de Jesus, the son and successor-in-interest of Eugenio de
Jesus opposed the registration on the ground that his father acquired a vested right
over the said lot by virtue of award order. Likewise a certain Arsenio Suazo filed his
opposition claiming that the 2 hectare portion on the northeastern part of the said lot
belongs to him. After due hearing, the court rendered judgement in favor of the
Mindanao Medical Center. The two oppositors filed an appeal to the Court of Appeals.
On July 2, 1974, the Appellate Court denied the claim of Arsenio Suazo at the same
time affirmed the appeal of Alejandro de Jesus, hereby decreeing the said lot in the
name of the Alejandro and ordered Mindanao Medical Center to relinquish the lot to
said appellant. On July 5, 1974, petitioner Mindanao Medical Center moved for
reconsideration but the Appellate Court denied the motion on June 17, 1975. Forthwith,
the petitioner elevated the matter to the Supreme Court for appeal.

Issue:
Whether or not Mindanao Medical Center has a registerable title over the whole
contested area of 12.8081 hectares by virtue of the Proclamation No. 350 reserving the
said land for medical site purposes.

Conclusion:
Yes, Mindanao Medical Center had a registerable title over the lot with area of
12.8081 hectares by virtue of Proclamation No. 350 reserving such land for medical site
purposes.

The Supreme Court held, that:

1. Proclamation No. 350 is free from infirmity and it proceeds from the recognized
competence of the President to reserve alienable lands of the public for specific
public use or service. The law authorizes the President to designate tract or
tracts of land of the public domain as reservations for the commonwealth of the
Philippines. A special proprietary right was vested in Eugenio de Jesus when the
sales award was issued to him in 1934 which was for 22 hectares (later found to
be 20.6400 hectares upon actual survey). The privilege of occupying public lands
confers no contractual or vested rights and the authority of the President to
withdraw such lands for sale or acquisition by public, or to reserve them for public
use may defeat the imperfect right of a settler. Such proclamation of the
President to reserve lands terminates any rights previously acquired by persons
 who settled thereon in order to obtain preferential right of purchase. Patents
previously granted, reserved from sale are void.

2. The gratuitous assumption that the military "camp site" was executed between
Eugenio de Jesus and Secretary Serafin Marabut would be void since he held no
dominical rights over the site when it was allegedly donated by him in 1936. In
that year, Proclamation No. 85 of President Quezon already withdrew the area
from sale or settlement and reserved it for military purposes. However, the
respondent Appellate Court rationalized that the subject of the donation was not
the land but "the possessory and special proprietary rights" of Eugenio de Jesus
over it. It is true that the gratuitous disposal in donation may consist of a thing or
right. But the term "right" must be understood in a "propriety" sense, over which
the processor has the jus disponendi. In true donations there results a
consequent impoverishment of the donor or diminution of his assets. Eugenio de
Jesus cannot be said to be possessed of that "proprietary" right over the whole
33 hectares in 1936 including the disputed 12.8081 hectares for at that time this
12.8081-hectare lot had already been severed from the mass of disposable
public lands by Proclamation No. 85 and excluded in the Sales Award.
Impoverishment of Eugenio's assets as a consequence of such donation is
therefore farfetched. In fact if we were to assume in gratia argumenti that the
12.8081-hectare lot was included in the Sales Award, still the same may not be
the subject of donation. What is conferred on the applicant is merely the right to
take possession of the land. In other words right granted to the sales awardee is
only possessory right not proprietary right for the fundamental reason that prior to
the issuance of the sales patent and registration thereof, title to the land is
retained by the State.