41073810 law on natural resources

7/27/2019 41073810 Law on Natural Resources

1/225

The Law On NaturalResources

By: Prof. Benjamin A. Cabrido Jr.By: Prof. Benjamin A. Cabrido Jr.

USJUSJ--R College of LawR College of Law

The Law On NaturalThe Law On NaturalResourcesResources


2/225

MEANING OF NATURAL RESOURCES

Refer to the material objects of economic valueand utility to man produced by nature.

They constitute the patrimony of the nation


3/225

LAWS COVERING THESUBJECT

Public Land Act (C.A. No. 141)

The Phil. Mining Act of 1995 (R.A. 7942)

The Petroleum Act of 1949 (R.A. 387)

The Coal Land Act andP

.D. 972 Revised Forestry Code (P.D. 389 & 705)

The Water Code of the Phil (P.D. 1067)

Fisheries Code of 1998 (R.A. 8550)

IPRA (R.A. 8371)


4/225

MANILA PRINCE HOTEL v. GSIS & MANILAHOTEL, ET. AL [GR No. 122156, Feb. 3 1997]

When the Constitutionspeaks of nationalpatrimony, it refers not

only to the naturalresources of thePhilippines, as theConstitution could havevery well used the termnatural resources, but alsoto the cultural heritage ofthe Filipinos


5/225

DOCTRINE OF CONSTITUTIONAL SUPREMACY

If a law or contract violates any norm of theconstitution that law or contract whetherpromulgated by the legislative or by the executive

branch or entered into by private persons forprivate purposes is null and void and without anyforce and effect.

Since the Constitution is the fundamental,

paramount and supreme law of the nation, it isdeemed written in every statute and contract.


6/225

Justice (now CJ) Puno dissenting:

2nd par. of section 10, Article XII of the Constitutionis pro-Pilipino but not anti-alien;

It is pro-Filipino for it gives preference to Filipinos


7/225

CJ Puno dissent (cont.)

It is not, however, anti-alien per se for it does not absolutelybar aliens in the grant of rights, privileges and concessionscovering the national economy and patrimony.

In the absence of qualified Filipinos, the State is not prohibited

from granting these rights, privileges and concessions toforeigners if the act will promote the weal of the nation.


8/225

CONCEPT OF JURA REGALIA

It is the universal feudal theory that all lands were held fromthe Crown. (Carino v. Insular Govt, 41 Phil. 935)

It is the foundation of the 1st sentence of Sec. 2, Art. XII, 1987Constitution.

As adopted in the Republican system, the medieval concept ofjura regalia has been stripped of its regalian overtones. (LeeHong Kok v. David, 48 SCRA 372)


9/225

CONSTITUTIONAL PROVISIONS ON JURAREGALIA

1st Sentence, Sec. 2, Art. XII, 1987 Constitution: ALL LANDS OFTHE PUBLIC DOMAIN, WATERS, MINERALS, COAL, PETROLEUMAND OTHER MINERAL OIL, ALL FORCES OF POTENTIAL ENERGY,FISHERIES, FORESTS OR TIMBER, WILDLIFE, FLORA AND FAUNA,

AND OTHER NATURAL RESOURCES ARE OWNED BY THE STATE.


10/225


11/225

4th Sentence (Ibid): THE STATE MAY DIRECTLY UNDERTAKE SUCH

ACTIVITIES, OR IT MAY ENTER INTO CO-PRODUCTION, JOINTVENTURE, OR PRODUCTION-SHARING AGREEMENTS WITHFILIPINO CITIZENS, OR CORPORATIONS OR ASSOCIATIONS ATLEAST 60% OF WHOSE CAPITAL IS OWNE BY SUCH CITIZENS.


12/225

5th Sentence (Ibid): SUCH AGREEMENTS MAY BE FOR PERIOD

NOT EXCEEDING TWENTY-FIVE YEARS, RENEWABLE FOR NOTMORE THAN TWENTY-FIVE YEARS, AND UNDER SUCH TERMS ANDCONDITIONS AS MAY BE PROVIDED BY LAW


13/225

6th Sentence (Ibid): IN CASE OF WATER RIGHTS FOR IRRIGATION,

WATER SUPPLY, FISHERIES, OR INDUSTRIAL USES OTHER THANTHE DEVELOPMENT OF WATER POWER, BENEFICIAL USE MAY BETHE MEASURE AND LIMIT OF THE GRANT


14/225

2nd Par. (Ibid): THE STATE SHALL PROTECT THE NATIONS

MARINE WEALTH IN ITS ARCHIPELAGIC WATERS, TERRITORIALSEA, AND EXCLUSIVE ECONOMIC ZONE, AND RESERVE ITS USEAND ENJOYMENT EXCLUSIVE TO FILIPINO CITIZENS.


15/225

3rd Par. (Ibid): THE CONGRESS MAY, BY LAW, ALLOW SMALL-

SCALE UTILIZATION OF NATURAL RESOURCES BY FILIPINOCITIZENS, AS WELL AS COOPERATIVE FISH FARMING, WITHPRIORITY TO SUBSISTENCE FISHERMEN AND FISHWORKERS INRIVERS, LAKES, BAYS, AND LAGOONS


16/225

4th P

ar. (Ibid): THEPRESIDENT MAY ENTER INTO AGREEMENTSWITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER

TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALEEXPLORATION, DEVELOPMENT, AND UTILIZATION OF MINERALS,

PETROLEUM, AND OTHER MINERAL OILS . . .


17/225

ACCORDING TO THE GENERAL TERMS AND CONDITIONS

PROVIDED BY LAW, BASED ON REAL CONTRIBUTIONS TO THEECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY.IN SUCH AGREEMENTS, THE STATE SHALL PROMOTE THEDEVELOPMENT, AND USE OF LOCAL SCIENTIFIC AND TECHNICALRESOURCES


18/225

Last par. (Ibid): THE PRESIDENT SHALL NOTIFY THE CONGRESSOF EVERY CONTRACT ENTERED INTO IN ACCORDANCE WITH THISPROVISION, WITHIN THRITY DAYS FROM ITS EXECUTION.


19/225

JURE IMPERII vis--vis JURE GESTIONIS

See U.S. v. Ruiz, 136 SCRA 487

In public law, Imperium is the governmentauthority possessed by the State which is expressed

in the concept of sovereignty; Dominium is thecapacity of the State to own or acquire property.


20/225

PRESUMPTION OF STATE OWNERSHIPOVER PUBLIC LANDS

Oh Cho v. Dir. Of Lands, 75 Phil 890: All lands thatwere not acquired from the government either bypurchase or grant, belong to the public domain.

Exception: possession since time immemorial.


21/225

NATURE OF POSSESSION BY THE NATIVES (Cruz v.Secretary, GR 135385, Dec. 6, 2000)

Ancestral domain and ancestral lands are not partof lands of the public domain.

The right of natives does not include naturalresources.

What is given is priority rights, not exclusive right.

State not precluded from entering into agreementswith private entities.


22/225

Ancestral Domain

All embracing concept which refers to lands, inlandwaters, coastal areas, and natural resourcestherein.

Includes: Ancestral lands,

Forests land,

Pasture land,

Residential lands Agricultural lands, and


23/225

Other lands individually owned whether alienable or not; Hunting grounds;

Burial Grounds;

Worship Areas;

Bodies of water; and

Other natural resources

Also includes land which may no longer be exclusivelyoccupied by indigenous cultural communities but to whichthey had traditionally had access for their subsistence andtraditional activities


24/225

Ancestral Lands

Narrower in concept; Refers to those land held under the same

conditions of ancestral domain BUT LIMITED TO LANDS THAT ARE NOT MERELY

OCCUPIED AND POSSESSED BUT ARE ALSO UTILIZEDBY CULTURAL COMMUNITIES UNDER THE CLAIM OFINDIVIDUAL OR TRADITIONAL GROUP OWNERSHIP.

Includes [but not limited to]: Residential lots, Riceterraces or paddies, private forests, farms and tree

lots.


25/225

CONVERSION TO ALP: EXECUTIVEPREROGATIVE

In Republic v. Reg. of Deeds of Q.C., 244 SCRA 537:The classification of public lands is, thus, anexclusive prerogative of the Executive Department

through the Office of the President. Courts have no authority to convert lands of public

domain into alienable and disposable lands.


26/225

TITLE OVER LAND PARTOF FOREST IS VOID

In Sunbeam v. CA, 181 SCRA 443: Before any landmay be converted into alienable or disposable landfor agricultural or other purposes, there must bepositive act from the govt.

The mere fact that a title was issued by the Dir. OfLands does not confer owner-ship where it is partof the public forest.

See also Ituralde v. Falcasantos, G.R. No. 128017,

Jan. 20, 1999.


27/225

CONSTITUTIONAL LIMITS ON JURAREGALIA NO. 1

General Rule: All natural resources shall not bealienated.

Exception: Only agricultural lands of the public

domain may be alienated.


28/225

GOVERNMENT LANDS NOT ALL PUBLIC LANDS

Montano v. Insular Govt, 12 Phil. 572

Government lands and public lands are notsynonymous terms.

GL is more extensive and embraces not only PL butalso other lands of the govt already reserved ordevoted to public use.

Friar lands not included as public lands.


29/225

Nature of Friar Lands

(Strong v. Repide, 213 U.S. 419 [1909])

Friar Lands are those lands of certain haciendaswhich were acquired by the U.S. government fromreligious orders/corporations or organizationsacquired on July 5, 1903 at a price of $6,043,219.47 in gold.

Philippine Sugar Estates Development Company,Ltd. owned the title over these lands.

Dominican lands form more than of Friar Lands.


30/225

HOW FRIAR LANDSMAY BEDISPOSED OF

In Alonso v. Cebu Country Club, G.R. 130876, Jan.31, 2002

Under Act No. 1120, which governs the

administration and disposition of friar lands, thepurchase by an actual and bona fide settler oroccupant of any portion of friar land shall be"agreed upon between the purchaser and the

Director of Lands, subject to the approval of theSecretary of Agriculture and Natural Resources .


31/225

ALONSO v. CEBU COUNTRY CLUB, G.R.130876, Jan. 31, 2002

Approval by the Secretary of Agriculture and Commerce of thesale of friar lands is indispensable for its validity, hence, theabsence of such approval made the sale null and void ab-initio

Necessarily, there can be no valid titles issued on the basis of

such sale or assignment.


32/225

HOW LANDS OF THE PUBLIC DOMAINCLASSIFIED?

Agricultural

Forest or Timber

Mineral

National Parks


33/225

CAN THERE BEMIXED CLASSIFICATION?

No. In Republic v. CA, 160SCRA 228 (1988)

The rights over the land are indivisible

No such thing as half agricultural, half mineral

Once mining claim is perfected, forest land ceased to be so; itnow becomes completely mineral land


34/225

SURFACE OWNER NO RIGHT OVER THEMINERALS UNDERNEATH

No. In the exercise of the States sovereignprerogative, use of the surface land may bediscontinued once minerals are discovered

underneath. For his loss, the owner is entitled to compensation

under the Mining Law or in appropriateexpropriation proceedings.


35/225

HOWAREMANGROVESWAMPS (MANGLARES)CLASSIFIED?

Forest Lands

In Director of Forestry v.Villareal, G.R. 32266, Feb.27, 1989: The

classification by theAdministrative Code of thePhil. manglares as forestlands has not beenchanged


36/225

RULES ON THEDISPOSITION OF ALP

Private corp./assn. cannot acquire ALP

Private corp. may lease maximum 1,000 hectares.

Qualified individuals can acquire 12 has; lease up

to 500 hectares Term: 25 years; renewable for another 25 years.


37/225

PURPOSE OF BANNING CORP FROMACQUIRINGALP

In Lausan Ayog, et al. v. Cusi, G.R. 46729, Nov. 19,1982:

To equitably diffuse land ownership or to

encourage "owner-cultivatorship and theeconomic family- size farm"

Huge landholdings by corporations or privatepersons had sown social unrest.


38/225

Exception: Corporations Validly Owning Public

Lands

Maximum: 1,024 hectares (Republic v. Quasha,G.R. No. L-30299 Aug. 17, 1972)

Note: Americans may own ALP (same limit) under

Parity Agreement (Tydings-McDuffie) appended inthe 1935 Constitution & revised by the Laurel-Langley Agreement.


39/225

Republic v. Quasha,G.R. No. L-30299 Aug. 17, 1972

Under the Parity Amendment, US citizens &corporations may acquire lands of the publicdomain.

But they cannot acquire PRIVATE agricultural lands. Their right is until July 3, 1974.


40/225

LAUSAN AYOG, ET AL. v. CUSI,G.R. 46729, Nov. 19, 1982

Vested right has to be respected.

lt could not be abrogated by the new Constitution.

Section 2, Article XIII of the 1935 Constitution

allows private corporations to purchase publicagricultural lands not exceeding 1024 hectares.


41/225


42/225


Exploration, Developmentand Utilization of NaturalResources must be under

Full Control andSupervision of the Stateunder the constitutionallyallowed modes


43/225

ALLOWEDMODES IN EDUOF NATURAL RESOURCES

Direct Undertaking

Co-Production Agreement

Joint-Venture Agreement

Production-Sharing Agreement

Financial or Technical Assistance Agreement


44/225

MEANING OF FULL CONTROL(La Bugal-Blaan Tribal Assn. vs. Ramos, G.R. 127882,

Dec. 1, 2004) Full control is not anathematic to day-to-day management by

the contractor, provided that the State retains the power todirect overall strategy; and to set aside, reverse or modifyplans and actions of the contractor. The idea of full control issimilar to that which is exercised by the board of directors of a

private corporation: the performance of managerial,operational, financial, marketing and other functions may bedelegated to subordinate officers or given to contractualentities, but the board retains full residual control of thebusiness.


45/225

full control and supervision cannot be takenliterally to mean that the State controls andsupervises everything down to the minutest detailsand makes all required actions, as this wouldrender impossible the legitimate exercise by the

contractor of a reasonable degree of managementprerogative and authority, indispensable to theproper functioning of the mining enterprise.


46/225

Control, as utilized in Section 2 of Article XII, mustbe taken to mean a degree of control sufficient toenable the State to direct, restrain, regulate andgovern the affairs of the extractive enterprises.


47/225

Control by the State may be on a macro level,through the establishment of policies, guidelines,regulations, industry standards and similarmeasures that would enable government toregulate the conduct of affairs in various

enterprises, and restrain activities deemed notdesirable or beneficial, with the end in view ofensuring that these enterprises contribute to theeconomic development and general welfare of thecountry, conserve the environment, and uplift the

well-being of the local affected communities.


48/225

Such a degree of control would be compatible with

permitting the foreign contractor sufficient andreasonable management authority over theenterprise it has invested in, to ensure efficientand profitable operation.

In fine, the FTAA provisions do not reduce orabdicate State control.


49/225

MEANING OF CO-PRODUCTIONAGREEMENT

An agreement between the Government and thecontractor wherein the Government shallprovide inputs to the mining operations other

than the mineral resource. (Sec. 26[b], R.A. 7942,The Philippine Mining Act of 1995)


50/225

MEANING OF JOINT VENTUREAGREEMENT

An agreement where a joint-venture company isorganized by the Government and the contractorwith both parties having equity shares. Aside

from earnings in equity, the Government shall beentitled to a share in the gross output. (Sec. 26[c], R.A. 7942, The Philippine Mining Act of 1995)


51/225

MEANING OF PRODUCTION SHARINGAGREEMENT

An agreement where the Government grants to thecontractor the exclusive right to conduct miningoperations within a contract area and shares in the

gross output. The contractor shall provide thefinancing, technology, management and personnelnecessary for the implementation of thisagreement. (Sec. 26 [c], R.A. 7942, The PhilippineMining Act of 1995)


52/225

MEANING OF FTAA

Sec. 3[r], R.A. 7942:

Financial or technical assistance agreement meansa contract involving financial or technical

assistance for large-scale exploration,development, and utilization of mineral resources.


53/225

FTAA CONSTRUED IN LA BUGAL (G.R. No. 127882DEC. 1, 04)

The agreements involving either technical or financialassistance referred to in paragraph 4 are in fact servicecontracts, but such new service contracts are between foreigncorporations acting as contractors on the one hand, and on theother hand government as principal or owner (of the works),

whereby the foreign contractor provides the capital,technology and technical know-how, and managerial expertisein the creation and operation of the large-scalemining/extractive enterprise, and government through itsagencies (DENR, MGB) actively exercises full control andsupervision over the entire enterprise.


54/225

Such service contracts may be entered into only

with respect to minerals, petroleum and othermineral oils. The grant of such service contracts issubject to several safeguards, among them: (1)that the service contract be crafted in accordancewith a general law setting standard or uniformterms, conditions and requirements; (2) thePresident be the signatory for the government; and(3) the President report the executed agreement toCongress within thirty days.


55/225

ARE FTAAs SOLELY FOR FOREIGNCORPORATIONS?

No. There is no basis to believe that the framers of theConstitution, a majority of whom were obviously concernedwith furthering the development and utilization of thecountrys natural resources, could have wanted to restrict

Filipino participation in that area. This point is clear,especially in the light of the overarching constitutionalprinciple of giving preference and priority to Filipinos andFilipino corporations in the development of our natural

resources.


56/225

WHO ARE QUALIFIED TO UNDERTAKEEDU?

Filipino citizens

Private Corp./Assn. at leash 60% of whose capital isowned by Filipino citizens


57/225


58/225

WATER RIGHTS NOT COVERED BY THE25-YR LIMIT

Last sentence, 1st par.,Sec. 2, Art. XII

IN CASES OF WATERRIGHTS FOR IRRIGATION,

WATER SUPPLY, FISHERIES,OR INDUSTRIAL USESOTHER THANDEVELOPMENT OF WATERPOWER

MEASURE AND LIMIT OF

THE GRANT: BENEFICIALUSE


59/225


The use and enjoymentof the MARINE WEALTHof the archipelagic

waters, territorial seaand EEZ reserved forFILIPINO CITIZENSONLY.


60/225


61/225

MEANING OF TERRITORIAL SEA

The belt of the sealocated between the coastand internal waters of the

coastal state on the onehand, and the high seas onthe other extending up to12 NM from the low watermark, or in case of

archipelagic states, fromthe baselines.


62/225

MEANING OF CONTIGUOUS ZONE

The area of the sea extending up to 12 NM from theterritorial sea. Technically, it is not part of theterritory of the state; the coastal or archipelagic

state may exercise jurisdiction over the area toprevent infringement of its customs, fiscal andimmigration or sanitary laws.


63/225

MEANING OF EXCLUSIVEECONOMICZONE (EEZ)

Area of the sea extending up to 200 NM from thelow-water mark or the baselines, as the case maybe. Technically, not part of the territory.

Coastal/Archipelagic state may exercise SOVEREIGNRIGHTS over the economic resources of the sea,the seabed and subsoil.

Other states have freedom of navigation &

overflight, to lay submarine cables and pipelines, &other lawful uses.


64/225

THE EEZ OF THE PHILIPPINES


65/225


Utilization of natural resources in rivers, lakes,bays and lagoons.

Allowed only on a small scale to Filipino citizens or

cooperative. Priority given to subsistence fishermen and

fisherfolk.


66/225

MARGINAL FISHERMAN VIS--VISSUBSISTENCEFISHERMAN

Marginal fisherman is an individual engaged infishing whose margin of return or reward in hisharvest of fish as measured by existing price levelsis barely sufficient to yield a profit or cover the

cost of gathering the fish. Subsistence fisherman is one whose catch yields

but the irreducible minimum for his livelihood.


67/225

TANO V. SOCRATES,G.R. NO. 110249, AUG. 21, 1997

The so-called "preferential right" of subsistence ormarginal fishermen to the use of marine resourcesis not at all absolute.

Under the general welfare clause of the LGC, localgovernment units have the power, inter alia, toenact ordinances to enhance the right of thepeople to a balanced ecology.


68/225

SOME IMPORTANT LEGAL DEFINITIONS OF ASTATES FLUVIAL DOMINION

Bay a well-marked indentation whose penetrationis in such proportion to the width of its mouth as tocontain land-locked waters and constitute morethan a mere curvature of the coast. An indentationshall not, however, be regarded as a bay unless itsarea is as large as, or larger than, that of the semi-circle whose diameter is a line drawn across themouth of that indentation. (Sec. 2, Art. 10,UNCLOS)


69/225

Lagoon A small lake, the hollow bed of which is

bounded by elevations of land. (The Govt of thePhil. Islands vs. Colegio de San Jose, et al., G.R. L-30829, Aug. 28, 1929)

Lake - a body of water formed in depressions of the

earth. Ordinarily fresh water, coming from rivers,brooks, or springs, and connected with the sea bythem. (Ibid)


70/225

River - is a natural waterway that transits waterthrough a landscape from higher to lowerelevations. It is an integral component of the watercycle. A river may have its source in a spring, lake,from damp, boggy landscapes where the soil iswaterlogged, from glacial melt, or from surfacerunoff of precipitation.


71/225

THE PUBLIC LAND ACT (C.A. 141)

Approved: Nov. 7, 1936

Coverage: Lands of the public domain

Excludes: Timber and mineral lands; Friar Lands

Executive Officer charged to carry out the Act: DENR Secretary

Director of Lands has direct executive control of the survey,classification, lease, sale or any other land of the publicdomain

Decisions of BL Director on questions of fact appealable toSecretary


72/225

Doctrine of Indefeasibility of Torrens title

Sec. 32, PD 1529: The decree of registration andthe certificate of title issued shall becomeincontrovertible after the lapse of one year fromthe date of entry

However, the State is not precluded from bringingan action for reversion of Public Land even afterthe lapse of 1 year if procured through fraud andmisrepresentation. (Republic vs. CA, G.R. No.

104296, Mar. 29, 1996)


73/225

Actions for Reversion Do Not Prescribe[Manese v. Sps. Velasco, G.R. 164024, Jan. 29, 2009]

In all actions for the reversion to the Governmentof lands of the public domain or improvementsthereon, the Republic of the Philippines is the realparty in interest.

The action shall be instituted by the SolicitorGeneral or the officer acting in his stead, in behalfof the Republic of the Philippines.

Such action does not prescribe. Prescription and

laches will not bar actions filed by the State torecover its property acquired through fraud byprivate individuals.


74/225

PRE-REQUISITE FOR DISPOSITION OF ALP

Before any public land may be alienated or disposed of, it isindispensable that there be a formal declaration by thePresident upon the recommendation of the DENR Secretary tothe effect that such lands are open to disposition orconcession, and whenever practicable the lands should have

been previously surveyed. (Sec. 7, CA 141) Excluded from disposition or concession: Those reserved for

public or quasi-public uses; those that have become privateproperty or subject to private right. (Sec. 9, Ibid)


75/225

MEANING OF ALIENATION ORDISPOSTION

Alienation, disposition, or concession - meansany of the methods authorized by the C.A. 141 forthe acquisition, lease, use or benefit of the landsof the public domain other than timber or minerallands. (Sec. 10, Ibid)


76/225

MODES OF DISPOSITION OF ALP

Homestead

By Sale

By Lease; and

By confirmation of imperfect or incomplete titlesthrough:

a) Judicial legalization

b) Administrative legalization or free patent

MATERIAL ALLEGATIONS IN APPLICATIONS FOR


77/225

MATERIAL ALLEGATIONS IN APPLICATIONS FORGRANT OF PUBLIC LAND

Personal circumstances of the applicant and thathe/it has all the legal qualifications and none ofthe disqualifications.

Purpose: use of the land according to the objectspecified in the application and for other purpose,

and that the land is suitable for the purposecontemplated.


78/225

For the exclusive use of the applicant.

Description and location of the land.

Occupancy, cultivation, improvements on theland, if any.

Allegation that the land is not timber or mineralland and does not contain guano or deposits ofsalt or coal.


79/225

Easement of 40 meters in width from bank of anyriver or stream for planting of trees of knowneconomic value; applicant prohibited to make anyclearing on or utilize the easement area for

ordinary farming


80/225

REMEDIES FROM ADVERSE DECISION OF


81/225

REMEDIES FROM ADVERSE DECISION OFBL DIRECTOR

Motion for reconsideration based on any groundsfor new trial under Rule ___; or

Appeal to the DENR Secretary

If affirmed by DENR Secretary, file a motion forreconsideration;

If MR is denied, file special civil action on certiorariunder Rule 65.

Notes: (a) Decision of the BL cannot be collaterally

attacked; (b)

MODE NO 1 HOMESTEAD


82/225

MODE NO. 1: HOMESTEAD

Concept: It is the home, the house and theadjoining land where the head of the family dwells,the home farm; the fixed residence of the head ofa family, with the land and buildings surroundingthe main house.

It is a legal fiction of law, an artificial estate inland, devised to protect the possession andenjoyment of the owner against the claims of hiscreditors, by withdrawing the property fromexecution and forced sale, so long as the land isoccupied as a home

Statutory Privileges Accorded to Homestead Land


83/225

Statutory Privileges Accorded to Homestead Land

1. Exempt from execution (see Sec.13[a],Rule 39, Rules of Court and );

2. Cannot be held liable for satisfaction ofan obligation within (5) years fromissuance of patent (Saltiga v. CA, G.R. No.109307, Nov. 25, 1999);


84/225

3. If validly mortgaged, right of redemption

granted within (5) years from the date of sale,not from date of registration at the RoD. The 5-year period to be reckoned from the expirationof the one-year period under Act. 3135;

4. If validly mortgaged to a Rural bank, the 5-yearperiod to commence to run after the expirationof the two-year period of redemption allowedunder R.A. 720 or the Rural Banks Act

THE PREVAILING RULE: HOMESTEAD LANDS NOT


85/225

THE PREVAILING RULE: HOMESTEAD LANDS NOTEXEMPT FROM COVERAGE OF AGRARIAN REFORM

LAW In Paris v. Alfeche, [G.R. No. 139083, Aug. 30,

2001):

Homesteads are not exempt from the operation

of the Land Reform Law. The right to retain (7) hectares of land is subject to

the condition that the landowner is actuallycultivating that area or will cultivate it upon the

effectivity of the said law.

Rural Bank of Davao City vs Court of Appeals


86/225

Rural Bank of Davao City vs. Court of Appeals,

217 SCRA 554, Jan. 27, 1993

If the land is mortgaged to a rural bank under R.A. No. 720, asamended, the mortgagor may redeem the property within two(2) years from the date of foreclosure or from the registrationof the sheriff's certificate of sale at such foreclosure if theproperty is not covered or is covered, respectively, by a

Torrens title. If the mortgagor fails to exercise such right, he or his heirs may

still repurchase the property within five (5) years from theexpiration of the two (2) year redemption period pursuant toSec. 119 of the Public Land Act (C.A. No. 141.


87/225

If the land is mortgaged to parties other thanrural banks, the mortgagor may redeem theproperty within one (1) year from the registrationof the certificate of sale pursuant to Act No.3135;

If he fails to do so, he or his heirs may repurchasethe property within five (5) years from theexpiration of the redemption period alsopursuant to Sec. 119 of the Public Land Act.

QUALIFIED TO OBTAIN HOMESTEAD


88/225

QUALIFIED TO OBTAIN HOMESTEAD

Filipino

18 yrs old or head of the family

Must not own more than (12) has. of landnor has had the benefit of any gratuitousallotment of more than (12) has. of land


89/225

If applicant is a married woman: She must be living separately from her husband

and not dependent on him for support; or

Her husband is insane or physically incapacitatedto work;

When her husband is in prison, serving a term ofsuch duration as would prevent him fromcomplying with the requirements of the lawregarding residence of land.

Mandatory Conditions/Requirements in


90/225

Mandatory Conditions/Requirements inHomestead Application

Within 6 months afterapproval, homesteadermust start to improve andcultivate the land;

Within a period of not lessthan 1 year or more than 5years from date of approvalof application homesteader must havecultivated at least 1/5 of

the land;

Continuous residency in thesame municipality wherehomestead is located or inan adjacent municipalityfor at least 1 year; and

Non- abandonment(voluntary) for more than 6months at any one timeduring period of requiredresidency and occupation.

When vested right in homestead fixed


91/225

When vested right in homestead fixed

In Balboa vs. Farrales,G.R. No. L-27059, Feb. 14, 1928:

After Buenaventura Balboa had submitted his final proof andafter the same had been approved by the Government, andwhile Act No. 926 was still in force, he became the owner ofthe land and "entitled to a patent."

At least on that date his right to the land, as owner, ripenedinto a vested right. It was no longer expectant as depending onthe continuance of existing circumstances, or contingent asdepending on some events or the performance of someconditions.

WHEN HOMESTEAD IS DEEMED CONJUGAL PROPERTY


92/225

WHEN HOMESTEAD ISDEEMED CONJUGAL PROPERTY(De Ocampo v. Delizo, G.R. No. L-32820, Jan. 20,1976) The fact that a parcel of land was acquired as

homestead during the period of the first marriagedoes not necessarily mean that it should beconsidered as property of the first marriage. Thedecisive factor in determining whether a parcel ofland acquired by way of homestead is conjugalproperty of the first or second marriage, is notnecessarily the issuance of the homestead patentbut the time of the fulfillment of the requirementsof the public land law for the acquisition of such

right.

CONDITIONS BEFORE APPLICANT MAY VALIDLY


93/225

CONDITIONS BEFOREAPPLICANT MAY VALIDLYTRANSFER HIS RIGHTS BEFORE ISSUANCE OF

PA

TE

NT He has already complied with all the requirements; His non-continuance is of no fault of his own;

Made to a bona fide purchaser legally qualified to

apply for homestead; Not for speculative purpose; and

Approved by the Director, Bureau of Lands

RESTRICTIONS ON SUBSEQUENT ALIENATION


94/225

RESTRICTIONS ON SUBSEQUENT ALIENATIONANDENCUMBRANCE (Sec. 118, C.A. 141 as

amended by C.A

. 456) Homestead cannot encumbered or alienated during the periodfrom date of approval up to the date of issuance of patent;

Encumbrance or alienation within 5 years from date of issuanceof patent or grant is prohibited;

Homestead cannot be liable to the satisfaction of any debt

contracted prior to the expiration of said period;Exception: Improvements or crops on the homestead land Alienation, transfer, or conveyance after 5 years and before 25

years requires approval of the DENR Secretary (deemed asdirectory and formality)

Nature of Proceedings in Homestead


95/225

Nature of Proceedings in Homestead

Not in rem, hence a homestead patentissued is not binding upon the whole world;

However, when a homestead patent is

registered under the Torrens System, itstitle becomes indefeasible.

RULES ON THE EXERCISE OF THE RIGHT OF


96/225

RULES ON THEEXERCISE OF THE RIGHT OFREDEMPTION/REPURCHASE OF HOMESTEAD

LA

ND

5 years if mortgaged or sold to a private person or the subjectof sale under pacto de retro;

6 years If mortgaged covered under Act 3135; 7 years If mortgaged to a Rural Bank; None If sold to immediate member of a family.

None If land is no longer devoted to agriculture, patentee isalready 71 years old not anymore residing in the property andhis motivation for the repurchase was purely for profit.(Santana v. Marinas, G.R. No. L-35537, Dec. 27, 1979)

Note: Period must be reckoned from the date of conveyance orsale.

MODE NO 2 : SALE OF PUBLIC


97/225

MODE NO. 2 : SALE OF PUBLICAGRICULTURAL LANDS

Qualified to purchase:

Filipino citizens, legal age or head of thefamily;

Maximum area: 12 hectaresNote: Corporations cannot acquire by

purchase Public Agricultural Lands byexpress prohibition under Sec. 3, Art. XII,

1987 Constitution

PREFERENCE GIVEN TO ACTUAL


98/225

PREFERENCE GIVEN TO ACTUALOCCUPANTS (Sec. 25, CA 141)

Conditions:

ALP must not be located: (a) within 10 kms fromthe boundaries of the city proper in chartered

cities; or (b) within 5 kms from the municipal hallor town plaza of any municipality.

There must actual occupation on the lands.

Total landholdings must not exceed 5 hectares

EXCESS LANDHOLDING WHEN ALLOWED


99/225

EXCESS LANDHOLDING WHEN ALLOWED

In case of foreclosure sale;

However, the excess must be disposed ofwithin 5 years;

Failure to dispose of within the period surtax of 50% will be charged over theordinary real property tax.

WHAT IS DEEMED EXCESS LANDHOLDING?


100/225

WHAT IS DEEMED EXCESS LANDHOLDING?

For qualified individuals: the area in excess of 12hectares.

For corporations: Any land acquired by virtue of

foreclosure is deemed in excess of landholdinghence must be disposed of within 5 years.

PROCEDURE IN THE SALE OF ALP


101/225

PROCEDURE IN THE SALE OF ALP

Filing of application in prescribed form.

Appraisal conducted by the BL Director and approved by theDENR Secretary.

Publication of the notice of sale: Once a week for 3 consecutiveweeks in the O.G., and in 2 newspapers, one published in

Manila and the other in the municipality or province where theland is situated.

Posting in the Bulletin Board of the LMB, Q.C. and in 3conspicuous places in the provincial capitol and the municipalhall where the land is situated


102/225

Submission of Bids in sealed envelope, addressed

to the BL Director together with the 10% amountof the bid in cash, certified check, treasurywarrant, or postal money order.

Opening of bids and awarding to the highest

bidder.

PREFERENCE GRANTED TO APPLICANT


103/225

PREFERENCE GRANTED TO APPLICANTIN AWARDING OF ALP

In case of two or more highest equal bids and onebelongs to applicant, latter wins;

If the highest bid is not that of applicant, OralBidding is called and the highest oral bidder isawarded;

In all instances, applicant is given the option toequal the highest bidder.


104/225

Payment of price may be in full or in 10 equal

annual installments reckoned from the date ofthe award.

Overdue installment subject to 4% interest P.A.

Purchasers right over the ALP is still inchoate

until such time the patent has already beenissued.

CONDITIONS IN SALE ARE OBLIGATORY


105/225

CONDITIONS IN SALE AREOBLIGATORY(Jimenez v. Macaraig, G.R. 94542, Mar. 1,

1993)Facts: Jimenez was awarded by way of sale ALP for town site in1955. It was subject to condition that he will commenceconstruction of improvements within 6 months and complete allwithin 18 months from date of award. In 1972, Guirnaldaoccupied the land, cleared it and introduced levelling and

riprapping. She also built a shack which was used by her andher family. In 1984, the daughter of Jimenez asked her tovacate the land. Guirnalda filed a protest with the BL as soughtfor cancellation of the award. In 1986, BL cancelled the award.On MR, it was reversed but set aside by the DENR Secretary.


106/225

Ruling:

Jimenez was not able to prove that theimprovements were commenced, hence therescission of the award was proper;

But, the rescission did not amount to recognition

of other occupants claim on the subject land.Whatever claim that Guirnalda has over the landmust still be presented before the proper forumand must under proper procedure as set by law.

TWO INSTANCES WHEN


107/225

TWO INSTANCESWHENORAL BIDDING ALLOWED

When two or more of such sealed bids turn out tobe equal and the highest, and that of the applicantis not one of them. In such case, the Director ofLands will call for an oral bidding, without need for

applicant to participate in it since he has theoption to put up a bid to equal that of the highestbidder; and

Where the ALP to be sold has been declared to bevacant and no applicant is recognized to havepreferential rights over it.

PRE-REQUISITES BEFORE


108/225

PRE REQUISITES BEFORESALES PATENT IS ISSUED

He must have occupied the land applied for; He must have cultivated at least 1/5 of the land

within 5 years after the date of award; Where the application is for pasture, he must have

grazed on the land with his own cattle numberingat the rate of one head for every 2 hectares; Failure to comply or any voluntary abandonment

for ore than one year at any given time, the landmay be reverted and all prior payments forfeited.

CONVEYANCE OF LAND PRIOR TO


109/225

CONVEYANCE OF LAND PRIOR TOISSUANCE OF SALES PATENT VALID

Sec. 29 allows applicant to convey or encumber hisrights after cultivation has started;

CONDITIONS:

It does not affect the interest of the government;

The transferor is not delinquent in paying theinstallment due; and

There must be prior approval of the DENRSecretary

EFFECT OF SALE WITHOUT DENR APPROVAL


110/225

(Javier v. C.A., et al., 231 SCRA 498, Mar. 28,

1994) The sale pending issuance of patent withoutapproval of the BL violates Sec. 29, C.A. 141.

The effect is annulment of the sales application as

if none had been filed.

JOINT VENTURE ALLOWED IN SALE OF PUBLIC


111/225

LAND [Barreo v. Rivera, 61 O.G. 14, April 5,

1965 CA] Where one person contributes his capital, consisting of his duly

approved sales application and recognized right ofpossessionover a parcel ofpublic land which he has begun cultivating andover which he has already spent time and effort, and another

contributes his labor and money to finalize the cultivation ofthe same land, with the understanding that both shall dividethe land in the proportion agreed upon by them, a jointventure orpartnership is formed under Art. 1767 of the CivilCode, and each partner is bound as a trustee to be ever loyalto his partner under Art. 1807 of the same Code.

BUT JOINT VENTURE NOT SANCTIONED IN


112/225

HOMESTEAD [Addun v. De Yro, 62 O.G. 37, Sept.

12, 1966 CA] In the case of homestead, however, the treatment

of a similar situation apparently is different.

A homestead applicant is required by law to

occupy and cultivate the land for his own and his

familys benefit, and not for the benefit of

someone else.


113/225

If the homesteader occupies and cultivates theland on behalf of anotherperson and obtainstitle on the understanding that a portion wouldbe transferred to the latter, it is INVALID, hencebars issuance of the patent;

Even ifpatent is already issued and title becomes

indefeasible, the same agreement is still null andvoid since Sec. 118 prohibits the encumbrance oralienation of a homestead except in favor of the

government or any of its branches from the dateof the approval of the application and for a term

of 5 years from the date of issuance ofpatent.

RESTRICTIONS IN


114/225

SALE OF PUBLIC LAND

1) Survey plan must be made before issuance ofsales patent;

2) Mineral deposits not included in conveyance;3) Land subject to legal servitudes;

4) Subject to ROW not exceeding 60 m in width forpublic highways, railroad, irrigation canals,aqueduct, etc.;

5) After grant of title, subsequent transfer within 10years from grant or cultivation is not valid

without consent from the state.

WHEN LAND BECOMES OF PRIVATE OWNERSHIP [VisayanR lt I M 96 Phil 515]


115/225

Realty Inc. v. Meer, 96 Phil 515]

It is only upon issuance of the sales patent that theGovernment is divested with its title.

Approval of the application merely authorizesapplicant to take possession of the land in order for

him to comply with the requirements set by law. Meanwhile, the Government still remains the

owner; the application can still be cancelled andthe land awarded to another if it is shown therequirements are not complied with.

WHEN LAND UNDER SALES PATENT IS DEEMED


116/225

EXCLUSIVE PROPERTY [Fiel, et al. v. Wagas, et

al., 48 O.G. 195] Where the balance of the purchase price ofthe land applied for sales patent was paidby applicant after the dissolution of themarriage due to death of his spouse, theland is considered exclusive property of theapplicant;

This is true even if the sales patent

application was filed and approved duringthe subsistence of the marriage.

ANNULMENT OF PATENT AND TITLE IS


117/225

JUDICIAL IN NATURE

True that the Director of Lands caninvestigate violations even while the patentand the corresponding title have alreadybeen issued;

But he cannot render a decision annullingthe sales patent and title for the allegedviolations since annulment of a title under

Sec. 101 of CA 141 is a judicial process.

MODE NO. 3: LEASE OF ALP


118/225

Qualified to lease ALP: Filipino citizen of legal age (up to 500 hectares);

and

Private corporation or association registeredunder the laws of the Philippines whose capitalstock of at least 60% is owned by Filipinos (up to

1,000 hectares).

LIMITATIONS IN THE LEASE OF ALP


119/225

Any officer, employee, stockholder, etc. of acorporation/association already holding ALP maynot apply for lease of such land. In case it may beallowed, it must be reasonably necessary to carry

on his business, in case of an individual or thebusiness for which the corporation is created underits Articles of Incorporation.

PROCEDURE IN THE LEASE OF ALP


120/225

(Substantially the same as in sale) Filing of application in prescribed form.

Appraisal conducted by the BL Director and approved by theDENR Secretary.

Publication of the notice of sale: Once a week for 3 consecutiveweeks in the O.G., and in 2 newspapers, one published in

Manila and the other in the municipality or province where theland is situated.



121/225

Submission of Bids in sealed envelope, addressed to the BLDirector together with the 10% amount of the bid in cash,

certified check, treasury warrant, or postal money order. Opening of bids and awarding to the highest bidder.In addition: No bid will be considered if the proposed rent is less than 3%

of the appraised value of the land or the bidder did notdeposit rental equivalent to at least the first 3 months of the

lease. If the land applied for is for grazing, annual rental must not

be less than 2%.

OTHER CONDITIONS IN LEASE OF ALP


122/225

Rental: to be paid in advance starting from the date ofapproval of the lease; subject to automatic increase if the rentfalls below 3% in case of re-appraisal.

Period: 25 years, renewable for another 25 years. Extension isnot a matter of right. Lessee must justify the extension by

showing he has introduced important improvements on theleased land.

Cultivation: Applicant must have broken and cultivated at least1/3 of the land within 5 years from approval.

RESTRICTION TO SUB-LEASE


123/225

Lessee cannot assign, encumber, or sublet his rightover the leased land without approval from theDENR Secretary.

Reason: To avoid speculation purposes or situationwhere the land is used by other persons not legallyqualified to lease ALP.

CAN THE LESSEESUBLEASE THEIMPROVEMENTS ON THE LAND WITHOUT


124/225

IMPROVEMENTS ON THE LANDWITHOUTCONSENT FROM GOVT? No. In Bachrach Motor Co. Inc. v. Universal Trading

Co. Inc., et al., 62 O.G. 30, July 25, 1966, it wasruled:

In lease contract of ALP, a provision is found thatupon the breach thereof by the lessee, the govtas lessor may elect to declare the lease forfeitedand enter and take possession of the premises andALL IMPROVEMENTS actually existing thereon.

Hence, this can only mean that the improvementsare also subject to forfeiture.

ADDITIONAL RESTRICTIONS


125/225

Lessee cannot remove or dispose of any valuabletimber, stone, oil, coal, salts or other minerals,including medicinal mineral waters.

The leased land is subject to the same conditionsand restriction imposed on sale of ALP regardingtaxes, servitudes, easements, mines and waterrights

PREFERENCE OF LESSEE TO BUY LEASED


126/225

LAND

If the ALP leased is to be sold by theGovernment during the subsistence of thelease, LESSEE will have the option to

purchase the property, subject to conditionsand restrictions governing sale of ALP.

LESSEE HAS LEGAL STANDING TO


127/225

OPPOSE REGISTRATION OF ALP OBJECT

IN LEASE If lessee has already introduced substantialimprovements on the leased land, he is considereda party in interest entitled to file opposition inapplication for registration of the same land.

The trial court may be compelled by mandamus toallow the lessee and his counsel to appear andoppose the application (Director v. Del Rosario, 58O.G. 3, Jan. 15, 1962)

REGISTRATION OF LEASE CONTRACT NOT


128/225

NECESSARY

True that any alienation, grant, conveyance on public lands isnot effective unless registered in the office of the RD (Sec.122, Act 496)

However, a contract of lease of ALP does not constitute title ordeed of conveyance within the meaning of the above provision.

What the law contemplates are those transfers of ownership,not documents transferring mere possession (Dagdag v.Nepomuceno, 10 Phil. 216).

MODE NO. 4: CONFIRMATION OF


129/225

IMPERFECT OR INCOMPLETE TITLE

I. BY JUDICIAL LEGALIZATION

- When application is filed with the proper RTC

in the province or city where the land lies; orI. BY FREE PATENT When the application is

filed with the Bureau of Lands.

JUDICIAL LEGALIZATION


130/225

When to file: Until Dec. 31, 2020 (period extended by R.A.9176)

Where to file: RTC in the province or city where the land lies. Notice of the application with the survey plan must be

furnished the OSG, the Bureau of Lands. P

ublication of the notice of initial hearing once a week for 3consecutive weeks in the O.G., and in 2 newspapers, onepublished in Manila and the other in the municipality orprovince where the land is situated.


PERSONS ENTITLED TO JUDICIAL LEGALIZATION/CONFIRMATION OF IMPERFECT/INCOMPLETE


131/225

CONFIRMATION OF IMPERFECT/INCOMPLETETITLE

(a) Those who prior to the transfer of sovereigntyfrom Spain to the US have applied for thepurchase, composition or other form of grant oflands of the public domain under the laws androyal decrees then in force and have instituted and

prosecuted the proceedings in connectiontherewith, but have, with or without default upontheir part, or for any other cause, not receivedtitle therefor, if such applicants or grantees andtheir heirs have occupied and cultivated said land

continuously since the filing of their application;


132/225

(b) Those who by themselves or through theirpredecessors-in-interest have been in open,

continuous, exclusive, and notorious possessionand occupation of agricultural lands of the publicdomain, under a bona fide claim of acquisition ofownership, SINCE JUNE 12, 1945, immediatelypreceding the filing of the application of

confirmation of title, except when prevented bywar orforce majeure. These shall beconclusively presumed to have performed all theconditions essential to a Government grant andshall be entitled to a certificate of title under the

provision ofP

.D. 1073; and


133/225

(c) Members of the national cultural minoritieswho by themselves or through their predecessors-in-interest have been in open, continuous,exclusive and notorious possession and occupationof lands of the public domain suitable toagriculture, whether disposable or not, under abona fide claim of ownership since June 12, 1945.

REGISTRATION UNDER LAND REGISTRATIONACT V REGISTRATION UNDER THE PUBLIC


134/225

ACT V. REGISTRATION UNDER THE PUBLICLANDACT Under the Land Registration Act:

- presumption that title already exists and thecourt is there only to confirm;

- dismissal may be with or without prejudice torefiling; and

- applicant does not risk losing his property.

Under the Public Land Act:


135/225

Under the Public Land Act:

- land applied for presumed to belong to the

State and applicant is claiming it by virtue of hisopen, continuous, exclusive and notoriouspossession amounting to imperfect title;

- court hearing the application has jurisdiction

and power to adjudicate the land in favor of theconflicting claimants, and if none is entitled, landis declared in favor of the Government; and

- applicant runs the risk of losing the land appliedfor, without opportunity of refiling the

application.

PRESCRIPTION LIES AGAINST ALP (Jabutay v.Di Of L d CA G R 16969 N 7 1958)


136/225

Dir. Of Lands, CA G.R 16969, Nov. 7 1958)

In the case where the applicant was able to establish that heand his predecessors-in-interest had been in actual, peaceful,public, open and continuous possession of certain public landunder claim of ownership for more than 65 years, he is deemedto have been conferred effective title and the subject land hadceased to a part of the public domain and had become aprivate property.

Note: Generally, 30 years possession without title and in bad faithis enough in acquisitive prescription. However, in ALP,possession must be traced since June 12, 1945.

ACQUISITION BY ADMIN LEGALIZATION ORFREE PATENT


137/225

FREE PATENT

Persons entitled:- Natural-born Filipino;

- Not owner of more than 24 hectares (now 12 hectares;

- Since July 4, 1945 or prior thereto, has continuously occupiedand cultivated, either by himself or through his predecessors-

in-interest, such public lands as may be subject of disposition;- In lieu of continuous cultivation, applicant may show that hehas paid real estate taxes on the property for the same periodand the land has not been occupied by other persons.

LIMITATIONS IN AREA


138/225

Royal decrees: 1,000 hectares;

R.A. 6236 & P.D. 1073: 144 hectares;

1973 Constitution: 24 hectares; and

1987 Constitution: 12 hectares.

PROCEDURE IN OBTAINING FREE


139/225

PATENT Filing of Application with BL, accompanied with a map and

technical description of the land, and affidavits subscribed bytwo disinterested persons residing the same municipality orbarangay where the land lies;

Posting of notices in conspicuous places in the provincial

capital, the municipality and barangay where the land issituated for 2 consecutive weeks. Notice shall require thosehaving interests to file their objection or adverse claim; and

Action by the BL.

WHEN FREE PATENT BECOMES FINAL ANDCONCLUSIVE


140/225

CONCLUSIVE

General rule: 1 year after issuance of thefree patent, title over the land becomesindefeasible and incontrovertible.

Exception: Where the land granted is notpart of the public domain, but a privateland, the patent and Torrens Title issued area nullity.

IMPORTANT RESTRICTIONON FREE PATENT


141/225

ON FREE PATENT

Land cannot be encumbered or alienated within 5 years fromdate of issuance, except in favor of the government or itsinstrumentalities.

Improvements or crops not covered.

After 5 years, the land may be alienated without need of

approval from the DENR. But it buyer is a juridical person, there must be consent from

the grantee and approval from DENR

Any alienation is subject to right of repurchase by thepatentee, his heirs within 5 years from date of sale.

ALIENABLE PUBLIC LANDS OTHER THANTIMBER MINERAL OR AGRICULTURAL


142/225

TIMBER, MINERAL OR AGRICULTURAL

Reclaimed lands; Foreshore; Marshy land or land covered with water bordering

upon the shores or banks of navigable lakes orrivers; and

Other lands not included in above classification.Note: The foregoing may be disposed of for

residential, commercial, industrial or otherproductive purposes.

MEANING OF TERMS


143/225

Residential land: To be construed in its prospective andobjective purposes taking into account the influx of populationand the impact of commercial, industrial and social intercoursethereon. A truly residential lot could not be converted into anagricultural land simply by reserving a plot for cultivation;conversely, an agricultural land cannot be considered

residential simply because a portion of it has been crisscrossedwith roads and building here and there. Reclaimed land: refers to submerged land which by deliberate

act of dredging and filling has emerged to the surface. Itbelongs to the State. It may be declared property of adjoiningowners only where it is no longer needed for public use orpublic service.


144/225

Foreshore: refers to that part of the land adjacent to the seawhich is alternately covered and uncovered by the ordinaryflow of the tides. It belongs to the State.

Note: R.A. 1899, Reclamation Act of 1957 declares as propertyof the LGU all reclaimed land undertaken by them.

Marshy land: that which borders on shores and banks ofnavigable rivers and lakes; it is generally swampy or soft wetland.

Note: All foregoing may be subject, as a rule, only of leaseunless declared so by the President upon recommendation ofthe DENR or by legislation, i.e. R.A. 293, as amended by R.A.1899 (June 22, 1957) allowing sale of marshy land withsubsisting lease of at least 5 years to the lessee.

CASES ON RECLAIMED LANDS


145/225

Republic v. C.A. & Republic Real Estate Corp, G.R. No. 105276,November 25, 1998.

Chavez v. PEA & Amari, G.R. No. 133250, July 9, 2002, en bancdecision;

REPUBLIC V. CA & REPUBLIC REAL ESTATECORP G R No 105276 November 25 1998


146/225

CORP., G.R. No. 105276, November 25, 1998

The duty of the court is to interpret the enablingAct, RA 1899. In so doing, we cannot broaden itsmeaning, much less widen the coverage thereof.

If the intention of Congress were to includesubmerged areas, it should have providedexpressly. That Congress did not so provide couldonly signify the exclusion of submerged areas

from the term "foreshore lands".

CHAVEZ vs. PEA and AMARI [G.R. No.133250 July 9 2002 en banc decision]


147/225

133250, July 9, 2002, en banc decision]

Facts: November 20, 1973: Commissioner of Public

Highways, signed a contract with the Constructionand Development Corporation of the Philippines("CDCP" for brevity) to reclaim certain foreshore

and offshore areas of Manila Bay. The contract alsoincluded the construction of Phases I and II of theManila-Cavite Coastal Road. CDCP obligated itselfto carry out all the works in consideration of fiftypercent of the total reclaimed land.


148/225

February 4, 1977: Marcos issued Presidential

Decree No. 1084 creating PEA with primarymandate "to reclaim land, including foreshore andsubmerged areas," and "to develop, improve,acquire, x x x lease and sell any and all kinds oflands."

On the same date, Presidential Decree No. 1085was signed transferring to PEA the "landsreclaimed in the foreshore and offshore of theManila Bay" under the Manila-Cavite Coastal Road

and ReclamationP

roject (MCCRRP

).


149/225

December 29, 1981: Pres. Marcos issued a

memorandum directing PEA to amend its contractwith CDCP directing that all future works inMCCRRP shall be funded and owned by PEA.

January 19, 1988: Pres.Aquino issued SpecialPatent No. 3517, granting and transferring to PEA

the parcels of land already reclaimed under theManila-Cavite Coastal Road and ReclamationProject (MCCRRP) containing a total area of onemillion nine hundred fifteen thousand eighthundred ninety four (1,915,894) square meters.

April 9 1988: Paraaque RD issued TCT Nos


150/225

April 9, 1988: Paraaque RD issued TCT Nos.7309, 7311, and 7312, in the name of PEA,covering the three reclaimed islands known as the"Freedom Islands" located at the southern portionof the Manila-Cavite Coastal Road, ParaaqueCity.

The Freedom Islands have a total land 157.841hectares.

A l 2 99 A d A h A A


151/225

April 25, 1995: PEA entered into a JVA with AMARI

to develop the Freedom Islands. The JVA alsorequired the reclamation of an additional 250hectares of submerged areas surrounding theseislands to complete the configuration in the

Master DevelopmentP

lan of the SouthernReclamation Project-MCCRRP. The JVA wasentered without public bidding.


152/225

April 28, 1995: PEA Board confirmed the JVA.

June 8, 1995, Pres. Ramos approved the JVA.

November 29, 1996: then Senate Pres. Macedadelivered a privilege speech calling the JVA as the"grandmother of all scams. A senate

investigation followed.

April 27 1998: petitioner Chavez as taxpayer


153/225

April 27, 1998: petitioner Chavez, as taxpayer,filed a petition for mandamus contending that thegovernment stands to lose billions of pesos in thesale by PEA of the reclaimed lands to AMARI.

Petitioner assails the sale to AMARI of lands of thepublic domain as a blatant violation of Section 3,

Article XII of the 1987 Constitution prohibiting thesale of alienable lands of the public domain toprivate corporations.

March 30 1999: PEA and AMARI signed the


154/225

March 30, 1999: PEA and AMARI signed the

Amended Joint Venture Agreement. May 28, 1999: President Estrada approved the

Amended JVA.

The Amended JVA covers a reclamation area of750 hectares. Only 157.84 hectares of the 750-hectare reclamation project have beenreclaimed, and the rest of the 592.15 hectaresare still submerged areas forming part of ManilaBay.

Under the Amended JVA, AMARI will reimburse


155/225

,PEA the sum of P1,894,129,200.00 for PEA's

"actual cost" in partially reclaiming the FreedomIslands.

AMARI will also complete, at its own expense, thereclamation of the Freedom Islands. AMARI will

further shoulder all the reclamation costs of allthe other areas, totaling 592.15 hectares, still tobe reclaimed.


156/225

AMARI and PEA will share, in the proportion of 70

percent and 30 percent, respectively, the totalnet usable area which is defined in the AmendedJVA as the total reclaimed area less 30 percentearmarked for common areas.

Under the Amended JVA AMARI will acquire andown a maximum of 367.5 hectares of reclaimedland which will be titled in its name.


157/225

PRINCIPAL ISSUE

WHETHER THE STIPULATIONS IN THE AMENDEDJOINT VENTURE AGREEMENT FOR THE TRANSFERTO AMARI OF CERTAIN LANDS, RECLAIMED AND

STILL TO BE RECLAIMED, VIOLATE THE 1987CONSTITUTION.


158/225

Th St t li hibiti th l t i t


159/225

The State policy prohibiting the sale to private

parties of government reclaimed, foreshore andmarshy alienable lands of the public domain, firstimplemented in 1907 was thus reaffirmed in CANo. 141 after the 1935 Constitution took effect .

Foreshore lands became inalienable as natural

resources of the State, unless reclaimed by thegovernment and classified as agricultural lands ofthe public domain, in which case they would fallunder the classification of government reclaimed

lands.

After the effectivity of the 1935 Constitution,


160/225

y ,government reclaimed and marshy disposable

lands of the public domain continued to be onlyleased and not sold to private parties.

These lands remained sui generis, as the onlyalienable or disposable lands of the public domain

the government could not sell to private parties. Since then and until now, the only way the

government can sell to private partiesgovernment reclaimed and marshy disposablelands of the public domain is for the legislature to

pass a law authorizing such sale.

CA No. 141 does not authorize the President to


161/225

reclassify government reclaimed and marshy lands

into other non-agricultural lands under Section 59(d).

Lands classified under Section 59 (d) are the onlyalienable or disposable lands for non-agricultural

purposes that the government could sell toprivate parties.

Most importantly, Section 60 of CA No. 141expressly requires congressional authority beforelands under Section 59 that the government

previously transferred to government units orentities could be sold to private parties


162/225

One reason for the congressional authority is that

Section 60 of CA No. 141 exempted governmentunits and entities from the maximum area ofpublic lands that could be acquired from theState.

These government units and entities should notjust turn around and sell these lands to privateparties in violation of constitutional or statutorylimitations.

Th 1987 C tit ti ti th St t li i th 1973


163/225

The 1987 Constitution continues the State policy in the 1973Constitution banning private corporations from acquiring anykind of alienable land of the public domain. Like the 1973Constitution, the 1987 Constitution allows privatecorporations to hold alienable lands of the public domain onlythrough lease.

One purpose of the constitutional prohibition againstpurchases of public agricultural lands by private corporations

is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm'. Hugelandholdings by corporations or private persons had spawnedsocial unrest."

The Amended JVA covers not only the Freedom


164/225

yIslands, but also an additional 592.15 hectares

which are still submerged and forming part ofManila Bay. There is no legislative or Presidential act

classifying these submerged areas as alienable ordisposable lands of the public domain open to

disposition. There can be no dispute that these submerged

areas form part of the public domain, and in theirpresent state are inalienable and outside thecommerce of man.

The mere fact that alienable lands of the public


165/225

The mere fact that alienable lands of the publicdomain like the Freedom Islands are transferred

to PEA and issued land patents or certificates oftitle in PEA's name does not automatically makesuch lands private.

To allow vast areas of reclaimed lands of thepublic domain to be transferred to PEA as private

lands will sanction a gross violation of theconstitutional ban on private corporations fromacquiring any kind of alienable land of the publicdomain.

SUMMARY OF THE RULING:


166/225

The 157.84 hectares of reclaimed landscomprising the Freedom Islands, now covered bycertificates of title in the name of PEA, arealienable lands of the public domain. PEA may

lease these lands to private corporations but maynot sell or transfer ownership of these lands toprivate corporations. PEA may only sell theselands to Philippine citizens, subject to theownership limitations in the 1987 Constitution

and existing laws.

The 592.15 hectares of submerged areas of Manila Bay remain


167/225

The 592.15 hectares of submerged areas of Manila ay remaininalienable natural resources of the public domain until

classified as alienable or disposable lands open to dispositionand declared no longer needed for public service. Thegovernment can make such classification and declaration onlyafter PEA has reclaimed these submerged areas. Only thencan these lands qualify as agricultural lands of the publicdomain, which are the only natural resources the government

can alienate. In their present state, the 592.15 hectares ofsubmerged areas are inalienable and outside the commerceof man.

Since the Amended JVA seeks to transfer to


168/225

Since the Amended JVA seeks to transfer to

AMARI, a private corporation, ownership of 77.34hectares of the Freedom Islands, such transfer isvoid for being contrary to Section 3, Article XII ofthe 1987 Constitution which prohibits privatecorporations from acquiring any kind of alienable

land of the public domain.

Since the Amended JVA also seeks to transfer to AMARI


169/225

ownership of 290.156 hectares of still submerged areas of

ManilaBay, such transfer is void for being contrary to Section2, Article XII of the 1987 Constitution which prohibits the

alienation of natural resources other than agricultural landsof the public domain. PEA may reclaim these submergedareas. Thereafter, the government can classify the reclaimedlands as alienable or disposable, and further declare them nolonger needed for public service. Still, the transfer of such

reclaimed alienable lands of the public domain to AMARI willbe void in view of Section 3, Article XII of the 1987Constitution which prohibits private corporations fromacquiring any kind of alienable land of the public domain.

CHAVEZ vs. PEA and AMARI [G.R. No. 133250,November 11, 2003 Resolution of MR]


170/225

Submerged lands, like the waters (sea or bay) above them, arepart of the States inalienable natural resources. Submergedlands are property of public dominion, absolutely inalienableand outside the commerce of man. This is also true withrespect to foreshore lands. Any sale of submerged or foreshore

lands is void being contrary to the Constitution. Commonwealth Act No. 141, "foreshore and lands under water

were not to be alienated and sold to private parties,"

PEA is the central implementing agency tasked


171/225

PEA is the central implementing agencytasked

to undertake reclamation projects nationwide PEA took the place of the Department of

Environment and Natural Resources ("DENR" forbrevity) as the government agency charged withleasing or selling all reclaimedlands of the

public domain. In the hands of PEA, which took over the leasing

and selling functions of DENR, reclaimedforeshore (or submerged lands) lands are publiclands in the same manner that these same lands

would have been public lands in the hands ofDENR


172/225

This scheme will effectively nullify the constitutional ban inS ti 3 A ti l XII f th 1987 C tit ti hi h


173/225

Section 3, Article XII of the 1987 Constitution which was

intended to diffuse equitably the ownership of alienablelands of the public domain among Filipinos, now numberingover 80 million strong.

As we held in our 9 July 2002 Decision, the Amended JVA"violates glaringly Sections 2 and 3, Article XII of the 1987Constitution.

In our 6 May 2003 Resolution, we DENIED with FINALITYrespondents Motions for Reconsideration. Litigations mustend some time. It is now time to write finis to this"Grandmother of All Scams."


174/225

Executive Order 525, February 14, 1979 (Designating PEA as


175/225

Executive Order 525, February 14, 1979 (Designating EA asthe Agency primarily responsible for all reclamation projects)

Executive Order 543, June 24, 2006 (Delegating to PRA thepower to approve reclamation projects)

Executive Order No. 380, Oct. 26, 2004 (Transforming PEAinto PRA)

Executive Order No. 586

Executive Order No. 654 Presidential Decree No. 1085

THESPANISH LAW OF WATERS OF 1866


176/225

Article 5. Lands reclaimed from the sea inconsequence of works constructed by the State, orby the provinces, pueblos or private persons, withproper permission, shall become the property of

the party constructing such works, unless otherwiseprovided by the terms of the grant of authority.

CIVIL CODE OF 1889 (Arts. 339 & 341)


177/225

Art. 339. Property of public dominion is:1. That devoted to public use, such as roads, canals,

rivers, torrents, ports and bridges constructed bythe State, riverbanks, shores, roadsteads, and that

of a similar character;

2 That belonging exclusively to the State which


178/225

2. That belonging exclusively to the State which,

without being of general public use, is employedin some public service, or in the development ofthe national wealth, such as walls, fortresses, andother works for the defense of the territory, andmines, until granted to private individuals.

Art. 341.P

roperty of public dominion, when nolonger devoted to public use or to the defense ofthe territory, shall become a part of the privateproperty of the State.

ACT NO. 1654, PHILIPPINE COMMISSION(MAY 8, 1907)


179/225

Section 1. The control and disposition of theforeshore as defined in existing law, and the titleto all Government or public lands made orreclaimed by the Government by dredging or filling

or otherwise throughout the Philippine Islands,shall be retained by the Government withoutprejudice to vested rights and without prejudice torights conceded to the City of Manila in the Luneta

Extension.

Section 2.


180/225

(a) The Secretary of the Interior shall cause all Government

or public lands made or reclaimed by the Government bydredging or filling or otherwise to be divided into lots orblocks, with the necessary streets and alleyways locatedthereon, and shall cause plats and plans of such surveys to beprepared and filed with the Bureau of Lands.(b) Upon completion of such plats and plans the Governor-

General shall give notice to the public that such parts of thelands so made or reclaimed as are not needed for publicpurposes will be leased for commercial and businesspurposes, x x x.(e) The leases above provided for shall be disposed of to thehighest and best bidder therefore, subject to such regulationsand safeguards as the Governor-General may by executiveorder prescribe.

Synopsis: Act 1654


181/225

Act No. 1654 mandated that the government shouldretain title to all lands reclaimed by thegovernment. The Act also vested in the governmentcontrol and disposition of foreshore lands. Privateparties could lease lands reclaimed by thegovernment only if these lands were no longerneeded for public purpose.


182/225

Act No. 1654 mandated public bidding in thelease of government reclaimed lands. Act No.1654 made government reclaimed lands suigeneris in that unlike other public lands which the

government could sell to private parties, thesereclaimed lands were available only for lease toprivate parties.


183/225

ACT 2874 [Nov. 29, 1919]


184/225

Sec. 6. The Governor-General, upon the recommendation ofthe Secretary of Agriculture and Natural Resources, shall fromtime to time classify the lands of the public domain into ?(a) Alienable or disposable,(b) Timber, and(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition ofalienable or disposable public lands, the Governor-General,upon recommendation by the Secretary of Agriculture andNatural Resources, shall from time to time declare what landsare open to disposition or concession under this Act."

Sec. 8. Only those lands shall be declared open to dispositionor concession which have been officially delimited or


185/225

yclassified x x x.

Sec. 55. Any tract of land of the public domain which, beingneither timber nor mineral land, shall be classified as suitablefor residential purposes or for commercial, industrial, orother productive purposes other than agricultural purposes,and shall be open to disposition or concession, shall bedisposed of under the provisions of this chapter, and not

otherwise.

Sec. 56. The lands disposable under this title shall


186/225

p

be classified as follows:(a) Lands reclaimed by the Government bydredging, filling, or other means;(b) Foreshore;(c) Marshy lands or lands covered with water

bordering upon the shores or banks of navigablelakes or rivers;(d) Lands not included in any of the foregoingclasses.


187/225

Sec. 58. The lands comprised in classes (a), (b),and (c) of section fifty-six shall be disposed of toprivate parties by lease only and not otherwise,

as soon as the Governor-General, uponrecommendation by the Secretary of Agricultureand Natural Resources, shall declare that thesame are not necessary for the public service andare open to disposition under this chapter. Thelands included in class (d) may be disposed of bysale or lease under the provisions of this Act.

C.A. 141 [PUBLIC LANDACT] Nov. 7, 1936


188/225

Sec. 58. Any tract of land of the public domainwhich, being neither timber nor mineral land, isintended to be used for residential purposes orfor commercial, industrial, or other productivepurposes other than agricultural, and is open todisposition or concession, shall be disposed ofunder the provisions of this chapter and nototherwise.


189/225

Sec. 59. The lands disposable under this title shallbe classified as follows:

(a) Lands reclaimed by the Government bydredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with waterbordering upon the shores or banks of navigablelakes or rivers;

(d) Lands not included in any of the foregoingclasses.


190/225

Sec. 60. Any tract of land comprised under thistitle may be leased or sold, as the case may be,to any person, corporation, or associationauthorized to purchase or lease public lands foragricultural purposes.


191/225

Sec. 61. The lands comprised in classes (a), (b),and (c) of section fifty-nine shall be disposed ofto private parties by lease only and not

otherwise, as soon as thePresident, uponrecommendation by the Secretary of Agriculture,

shall declare that the same are not necessary forthe public service and are open to dispositionunder this chapter. The lands included in class (d)may be disposed of by sale or lease under theprovisions of this Act.


192/225

Section 61 of CA No. 141 readopted, after theeffectivity of the 1935 Constitution, Section 58 ofAct No. 2874 prohibiting the sale of governmentreclaimed, foreshore and marshy disposable landsof the public domain.

All these lands are intended for residential,commercial, industrial or other non-agriculturalpurposes. As before, Section 61 allowed only thelease of such lands to private parties.


193/225

The government could sell to private parties onlylands falling under Section 59 (d) of CA No. 141,or those lands for non-agricultural purposes notclassified as government reclaimed, foreshore andmarshy disposable lands of the public domain.

Foreshore lands, however, became inalienableunder the 1935 Constitution which only allowedthe lease of these lands to qualified privateparties.

The Civil Code of 1950


194/225

Art. 420. The following things are property of publicdominion:(1) Those intended for public use, such as roads,canals, rivers, torrents, ports and brid

41073810 law on natural resources

Documents