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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 95694 October 9, 1997

VICENTE VILLAFLOR, !bt"t!te# b$ %" %e"r,petitioner,vs.COURT OF APPEALS &'# NASIPIT LUM(ER CO., INC., respondents.

PANGANI(AN, J.:

In this rather factuall co!plicated case, the "ourt reiterates the bindin# force andeffect of findin#s of speciali$ed ad!inistrative a#encies as %ell as those of trial courts%hen affir!ed b the "ourt of &ppeals' re(ects petitioner)s theor of si!ulation ofcontracts' and passes upon the *ualifications of private respondent corporation toac*uire disposable public a#ricultural lands prior to the effectivit of the +-"onstitution.

The Case

/efore us is a petition for revie% on certiorarisee0in# the reversal of the Decision1ofthe "ourt of &ppeals, dated Septe!ber 1-, +2, in "&. 3.R "V No. 2241, affir!in#the dis!issal b the trial court of Petitioner Vicente Villaflor)s co!plaint a#ainst PrivateRespondent Nasipit 5u!ber "o., Inc. The disposition of both the trial and the appellatecourts are *uoted in the state!ent of facts belo%.

The Facts

The facts of this case, as narrated in detail b Respondent "ourt of &ppeals, are asfollo%s6 )

The evidence, testi!onial and docu!entar, presented durin# the trial sho%that on 7anuar +4, +82, "irilo Piencenaves, in a Deed of &bsolute Sale

9e:h. &;, sold to 2 hectares,*!ore or less, and particularl described and bounded asfollo%s6

& certain parcel of a#ricultural land planted to abaca %ithvisible concrete !onu!ents !ar0in# the boundaries andbounded on the NORTH b Public 5and no% Private Deedson the ?ast b Serafin Villaflor, on the SO@TH b Public5and' and on the Aest b land clai!ed b H. Patete,containin# an area of 42 hectares !ore or less, no% underTa: Dec. 18>+ in the 9sic; of said Vicente Villaflor, the%hole parcel of %hich this particular parcel is onl a part, isassessed at P11,>>2.22 under the above said Ta: Dec.Nu!ber.

This deed states6

That the above described land %as sold to the said

VI"?NT? VI55&B5OR, . . . on 7une 11, +-, but no for!aldocu!ent %as then e:ecuted, and since then until thepresent ti!e, the said Vicente Villaflor has been inpossession and occupation of 9the sa!e;' 9and;

That the above described propert %as before the sale, of! e:clusive propert havin# inherited fro! ! lon# deadparents and ! o%nership to it and that of ! 2; ears, possessin# and occupin# sa!epeacefull, publicl and continuousl %ithout interruption forthat len#th of ti!e.

&lso on 7anuar +4, +82, "laudio Otero, in a Deed of &bsolute Sale 9e:h. ";

sold to Villaflor a parcel of a#ricultural land, containin# an area of 18 hectares,!ore or less, and particularl described and bounded as follo%s6

& certain land planted to corn %ith visible concrete!easure!ents !ar0in# the boundaries and bounded on theNorth b Public 5and and Tun#ao "ree0' on the ?ast busan River' on the South b Serafin Villaflor and "iriloPiencenaves' and on the Aest b land of Ber!in /acobocontainin# an area of 18 hectares !ore or less, under Ta:Declaration No. 18>+ in the na!e alread of VicenteVillaflor, the %hole parcel of %hich this particular land is onl

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a part, is assessed at P11,>>2.22 under the above said Ta:Declaration No. 18>+.

This deed states6

That the above described land %as sold to the saidVI"?NT? VI55&B5OR, . . . on 7une 11, +-, but no sounddocu!ent %as then e:ecuted, ho%ever since then and untilthe present ti!e, the said Vicente Villaflor has been in openand continuous possession and occupation of said land'9and;

That the above described land %as before the sale, ! o%ne:clusive propert, bein# inherited fro! ! deceasedparents, and ! o%nership to it and that of !predecessors lasted !ore than fift 9>2; ears, possessin#and occupin# the sa!e, peacefull, openl and interruptionfor that len#th of ti!e.

5i0e%ise on 7anuar +4, +82, Her!o#enes Patete, in a Deed of &bsoluteSale 9e:h. D;, sold to Villaflor, a parcel of a#ricultural land, containin# an areaof 12 hectares, !ore or less, and particularl described and bounded asfollo%s6

& certain parcel of a#ricultural land planted to abaca andcorn %ith visible concrete !onu!ents !ar0in# theboundaries and bounded on the North b Public 5and areaCprivate Road' on the ?ast b land clai!ed b "iriloPiencenaves' on the South b Public 5and containin# anarea of 12 hectares !ore or less, no% under Ta:Declaration No. 18>+ in the na!e of Vicente Villaflor the

%hole parcel of %hich this particular parcel, is assessed atP11,>>2.22 for purposes of ta:ation under the above saidTa: Declaration No. 18>+.

This deed states6

. . . 9O;n 7une 11, +- but the for!al docu!ent %as thene:ecuted, and since then until the present ti!e, the saidVI"?NT? VI55&B5OR has been in continuous and openpossession and occupation of the sa!e' 9and;

That the above described propert %as before the sale, !o%n and e:clusive propert, bein# inherited fro! !deceased parents and ! o%nership to it and that of !predecessors lasted !ore than fift 9>2; ears, possessin#and occupin# sa!e, peacefull, openl and continuousl%ithout interruption for that len#th of ti!e.

On Bebruar +>, +82, Ber!in /ocobo, in a Deed of &bsolute Sale 9e:h. /;,sold to Villaflor, a parcel of a#ricultural land, containin# an area of + hectares,!ore or less, and particularl described and bounded as follo%s6

& certain parcel of a#ricultural land planted %ith abaca %ithvisible part !ar0in# the corners and bounded on the Northb the corners and bounded on the North b Public 5and'on the ?ast b "irilo Piencenaves' on the South bHer!o#enes Patete and Aest b Public 5and, containin# anarea of + hectares !ore or less no% under Ta: DeclarationNo. 18>+ in the na!e of Vicente Villaflor. The %hole parcelof %hich this particular parcel is onl a part is assessed asP11,>>2.22 for purposes of ta:ation under the above saidTa: Declaration Nu!ber 9Deed of &bsolute Sale e:ecutedb Ber!in /ocobo date Beb. +>, +82;. This docu!ent %asannotated in Re#istr of Deeds on Bebruar +4, +82;.

This deed states6

That the above described propert %as before the sale of! o%n e:clusive propert, bein# inherited fro! !deceased parents, and ! o%nership to it and that of !predecessors lasted !ore than fift 9>2; ears, possessin#and occupin# the sa!e peacefull, openl and

continuousl %ithout interruption for that len#th of ti!e.

On Nove!ber , +84, Villaflor, in a 5ease ree!ent 9e:h. E;,4leased toNasipit 5u!ber "o., Inc. a parcel of land, containin# an area of t%o 91;hectares, to#ether %ith all the i!prove!ents e:istin# thereon, for a period offive 9>; ears fro! 7une +, +84 at a rental of P122.22per annumFto coverthe annual rental of house and buildin# sites for thirt three 9; houses orbuildin#s.F This a#ree!ent also provides65

. Durin# the ter! of this lease, the 5essee is authori$edand e!po%ered to build and construct additional houses inaddition to the houses or buildin#s !entioned in the ne:t

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precedin# para#raph, provided ho%ever, that for everadditional house or buildin# constructed the 5essee shallpa unto the 5essor an a!ount of fift centavos 9G>2; per!onth for ever house or buildin#. The 5essee ise!po%ered and authori$ed b the 5essor to sublot 9sic; thepre!ises hereb leased or assi#n the sa!e or an portion

of the land hereb leased to an person, fir! andcorporation' 9and;

8. The 5essee is hereb authori$ed to !a0e anconstruction andor i!prove!ent on the pre!ises herebleased as he !a dee! necessar and proper thereon,provided ho%ever, that an and all such i!prove!ents shallbeco!e the propert of the 5essor upon the ter!ination ofthis lease %ithout obli#ation on the part of the latter torei!burse the 5essee for e:penses incurred in theconstruction of the sa!e.

Villaflor clai!ed havin# discovered that after the e:ecution of the leasea#ree!ent, that Nasipit 5u!ber Fin bad faith . . . surreptitiousl #rabbed andoccupied a bi# portion of plaintiff)s propert . . .F' that after a confrontation %iththe corporate)s 9sic; field !ana#er, the latter, in a letter dated Dece!ber ,+- 9e:h. R;,6stated recallin# havin# F!ade so!e sort of a#ree!ent for theoccupanc 9of the propert at &cacia, San Mateo;, but I no lon#er recall thedetails and I had for#otten %hether or not %e did occup our land. /ut if, asou sa, %e did occup it, then 9he is ; sure that the co!pan is obli#ated topa the rental.F

On 7ul -, +8, in an Free!ent to SellF 9e:h. 1;, Villaflor conveed toNasipit 5u!ber, t%o 91; parcels of land . . . described as follo%s67

PARCEL ONE

/ounded on the North b Public 5and and Tun#ao "ree0'on the ?ast b usan River and Serafin Villaflor' on theSouth b Public 5and, on the Aest b Public 5and.I!prove!ents thereon consist of abaca, fruit trees,coconuts and thirt houses of !i:ed !aterials belon#in# tothe Nasipit 5u!ber "o!pan. Divided into 5ot Nos. >8+1,>8+, >8, >82, >8+, >81, >>2, >8, >42, >>>,>>+, >>8, >>>, >>, >>, >>-, >>, and >>1./oundaries of this parcel of land are !ar0ed b concrete!onu!ents of the /ureau of 5ands. "ontainin# an area of

++1,222 hectares. &ssessed at P+-,+42.22 accordin# to Ta:Declaration No. VC+> dated &pril +8, +84.

PARCEL TWO

/ounded on the North b Pa#udasan "ree0' on the ?ast busan River' on the South b Tun#ao "ree0' on the Aestb Public 5and. "ontainin# an area of 8,222 hectares !oreor less. Divided into 5ot Nos. >8++, >8+2, >82, and >.I!prove!ents +22 coconut trees, productive, and 22cacao trees. /oundaries of said land are !ar0ed bconcrete !onu!ents of the /ureau pf 9sic; 5ands.&ssessed value P4,12.22 accordin# to Ta: No. +-,&pril +8, +84.

This ree!ent to Sell provides6

. That be#innin# toda, the Part of the Second Part shall

continue to occup the propert not an!ore in concept oflessee but as prospective o%ners, it bein# the sense of theparties hereto that the Part of the Second Part shall not inan !anner be under an obli#ation to !a0e anco!pensation to the Part of the Birst Part, for the use, andoccupation of the propert herein before described in suchconcept of prospective o%ner, and it li0e%ise bein# thesense of the parties hereto to ter!inate as the do herebter!inate, effective on the date of this present instru!ent,the "ontract of 5ease, other%ise 0no%n as Doc. No. 812,Pa#e No. 4, /oo0 No. II, Series of +84 of Notar Public3abriel R. /anaa#, of the Province of usan.

8. That the Part of the Second Part has bound as it doeshereb bind itself, its e:ecutors and ad!inistrators, to paunto the part of the Birst Part the su! of Bive ThousandPesos 9P>,222.22;, Philippine "urrenc, upon presentationb the latter to the for!er of satisfactor evidence that6

9a; The /ureau of 5ands %ill not have anob(ection to the obtain!ent b the Part ofthe Birst Part of a "ertificate of TorrensTitle in his favor, either thru ordinar landre#istration proceedin#s or thruad!inistrative !eans procedure.

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9b; That there is no other private clai!antto the properties hereinbefore described.

>. That the Part of the Birst Part has bound as he doeshereb bind to underta0e i!!ediatel after the e:ecution ofthese presents to secure and obtain, or cause to be securedand obtained, a "ertificate of Torrens Title in his favor overthe properties described on Pa#e 9One; hereof, and afterobtain!ent of such "ertificate of Torrens Title, the said Partof the Birst Part shall e:ecute a 9D;eed of &bsolute Saleunto and in favor of the Part of the Second Part, itse:ecutors, ad!inistrators and assi#ns, it bein# the sense ofthe parties that the Part of the Second Part upon deliverto it of such deed of absolute sale, shall pa unto the Partof the Birst Part in cash, the su! of T%elve Thousand9P+1,222.22; Pesos in Philippine "urrenc, provided,ho%ever, that the Part of the Birst Part, shall be rei!bursedb the Part of the Second Part %ith one half of thee:penses incurred b the Part of the Birst Part for surve

and attorne)s fees' and other incidental e:penses note:ceedin# P22.22.

On Dece!ber 1, +8, Villaflor filed Sales &pplication No.VC2-+9e:h. +; %ith the /ureau of 5ands, Manila, Fto purchase under theprovisions of "hapter V, JI or IJ of "o!!on%ealth &ct. No. +8+ 9The Public5ands &ct;, as a!ended, the tract of public lands . . . and described asfollo%s6 FNorth b Public 5and' ?ast b usan River and Serafin Villaflor'South b Public 5and and Aest b public land 95ot Nos. >-, >8, >8+1,>82, >8+, >81, >8, >>2, >>+, >8+, >8, >8, >>1, >>, >>8,>>>, >>4, >>-, >>, >> and >42 . . . containin# an area of +82hectares . . . .F Para#raph 4 of the &pplication, states6 FI understand that thisapplication conves no ri#ht to occup the land prior to its approval, and I

reco#ni$ed 9sic; that the land covered b the sa!e is of public do!ain andan and all ri#hts !a have %ith respect thereto b virtue of continuousoccupation and cultivation are hereb relin*uished to the 3overn!ent.F99e:h.+CD;

On Dece!ber -, +8, Villaflor and Nasipit 5u!ber e:ecuted an Free!entF9e:h ;.1This contract provides6

+. That the Birst Part is the possessor since +2 of t%o 91;parcels of land situated in sitio Tun#ao, /arrio of San Mateo,Municipalit of /utuan, Province of usan'

1. That the first parcel of land above!entioned anddescribed in Plan P5SC- filed in the office of the /ureau of5ands is !ade up of 5ots Nos. >8+1, >8+, >8, >82,>8+, >81, >8, >>2, >>+, >>1, >>, >>8, >>>,>>4, >>-, >>, >> and >42 and the second parcel ofland is !ade of 5ots Nos. >, >82, >8+2 and >8++'

. That on 7ul -, +8, a contract of ree!ent to Sell %ase:ecuted bet%een the contractin# parties herein, coverin#the said t%o parcels of land, cop of said ree!ent to Sellis hereto attached !ar0ed as &nne: F&F and !ade aninte#ral part of this docu!ent. The parties hereto a#ree thatthe said ree!ent to Sell be !aintained in full force andeffect %ith all its ter!s and conditions of this presenta#ree!ent and in no %a be considered as !odified.

8. That para#raph 8 of the "ontract of ree!ent to Sell,!ar0ed as anne:, F&F stipulates as follo%s6

Par. 8. That the Part of the Second Parthas bound as it does hereb bind itself, itse:ecutors and ad!inistrators, to pa untothe Part of the Birst Part of the su! ofBIV? THO@S&ND P?SOS 9P>,222.22;Philippine "urrenc, upon presentation bthe latter to the for!er of satisfactorevidence that6

a; The /ureau of 5ands %ill have anob(ection to the obtain!ent b Part of theBirst Part of a favor, either thru ordinar

land re#istration proceedin#s or thruad!inistrative !eans and procedure.

b; That there is no other private clai!antto the properties hereinabove described.

>. That the Birst Part has on Dece!ber 1, +8, sub!ittedto the /ureau of 5ands, a Sales &pplication for the t%entCt%o 911; lots co!prisin# the t%o above!entioned parcels ofland, the said Sales &pplication %as re#istered in the said/ureau under No. VC2-'

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4. That in repl to the re*uest !ade b the Birst Part to the/ureau of 5ands, in connection %ith the Sales &pplicationNo. VC2-, the latter infor!ed the for!er that action on hisre*uest %ill be e:pedited, as per letter of the "hief, Public5and Division, dated Dece!ber 1, +8, cop of %hich ishereto attached !ar0ed as anne: F/F and !ade an inte#ral

part of this a#ree!ent6

-. That for and in consideration of the pre!ises abovestated and the a!ount of TA?NTK BO@R THO@S&ND9P18,222.22; P?SOS that the Second Part shall pa to theBirst Part, b these presents, the Birst Part hereb sells,transfers and conves unto the Second Part, its successorsand assi#ns, his ri#ht, interest and participation under, an9d;b virtue of the Sales &pplication No. VC2-, %hich he has or!a have in the lots !entioned in said Sales &pplication No.VC2-'

. That the a!ount of TA?NTK BO@R THO@S&ND

9P18,222.22; P?SOS, shall be paid b the Second Part tothe Birst Part, as follo%s6

a; The a!ount of S?V?N THO@S&ND9P-,222.22; P?SOS, has alread beenpaid b the Second Part to the BirstPart upon the e:ecution of theree!ent to Sell, on 7ul -, +8'

b; The a!ount of BIV? THO@S&ND9P>,222.22; P?SOS shall be paid uponthe si#nin# of this present a#ree!ent' and

c; The balance of TA?5V? THO@S&ND9P+1,222.22; shall be paid upon thee:ecution b the Birst Part of the&bsolute Deed of Sale of the t%o parcelsof land in *uestion in favor of the SecondPart, and upon deliver to the SecondPart of the "ertificate of O%nership ofthe said t%o parcels of land.

. It is speciall understood that the !ort#a#e constituted bthe Birst Part in favor of the Second Part, as stated in the

said contract of ree!ent to Sell dated 7ul -, +8, shallcover not onl the a!ount of S?V?N THO@S&ND9P-,222.22; P?SOS as specified in said docu!ent, but shallalso cover the a!ount of BIV? THO@S&ND 9P>,222.22;P?SOS to be paid as stipulated in para#raph , subCpara#raph 9b; of this present a#ree!ent, if the Birst Part

should fail to co!pl %ith the obli#ations as provided for inpara#raphs 1, 8, and > of the ree!ent to Sell'

+2. It is further a#reed that the Birst Part obli#ates hi!selfto si#n, e:ecute and deliver to and in favor of the SecondPart, its successors and assi#ns, at anti!e upon de!andb the Second Part such other instru!ents as !a benecessar in order to #ive full effect to this presenta#ree!ent'

In the Report dated Dece!ber +, +8 b the public land inspector, District5and Office, /ureau of 5ands, in /utuan, the report contains an Indorse!entof the aforesaid District 5and Officer reco!!endin# re(ection of the Sales

&pplication of Villaflor for havin# leased the propert to another even beforehe had ac*uired trans!issible ri#hts thereto.

In a letter of Villaflor dated 7anuar 1, +>2, addressed to the /ureau of5ands, he infor!ed the /ureau Director that he %as alread occupin# thepropert %hen the /ureau)s usan River Valle Subdivision Pro(ect %asinau#urated, that the propert %as for!erl clai!ed as private properties 9sic;,and that therefore, the propert %as se#re#ated or e:cluded fro! dispositionbecause of the clai! of private o%nership. In a letter of Nasipit 5u!ber datedBebruar 11, +>2 9e:h. J;11addressed to the Director of 5ands, thecorporation infor!ed the /ureau that it reco#ni$ed Villaflor as the real o%ner,clai!ant and occupant of the land' that since 7une +84, Villaflor leased t%o91; hectares inside the land to the co!pan' that it has no other interest on the

land' and that the Sales &pplication of Villaflor should be #iven favorableconsideration.

::: ::: :::

On 7ul 18, +>2, the scheduled date of auction of the propert covered bthe Sales &pplication, Nasipit 5u!ber offered the hi#hest bid of P8+.22 perhectare, but since an applicant under "& +8+, is allo%ed to e*ual the bid ofthe hi#hest bidder, Villaflor tendered an e*ual bid' deposited the e*uivalent of+2L of the bid price and then paid the assess!ent in full.

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::: ::: :::

On &u#ust +4, +>2, Villaflor e:ecuted a docu!ent, deno!inated as a FDeedof Relin*uish!ent of Ri#htsF 9e:h. N;, 1)pertinent portion of %hich reads6

>. That in vie% of ! present business in Manila, and !chan#e in residence fro! /utuan, usan to the "it ofManila, I cannot, therefore, develope 9sic; or cultivate theland applied for as pro(ected before'

4. That the Nasipit 5u!ber "o!pan, Inc., a corporationdul or#ani$ed . . . is ver !uch interested in ac*uirin# theland covered b the aforecited application . . . '

-. That I believe the said co!pan is *ualified to ac*uirepublic land, and has the !eans to develop 9sic; the aboveC!entioned land'

::: ::: :::

AH?R?BOR?, and in consideration of the a!ount of BIV?THO@S&ND P?SOS 9P>,222.22; to be rei!bursed to !e bthe afore!entioned Nasipit 5u!ber "o!pan, Inc., after itsreceipt of the order of a%ard, the said a!ount representin#part of the purchase price of the land aforesaid, the value ofthe i!prove!ents I introduced thereon, and the e:pensesincurred in the publication of the Notice of Sale, I, theapplicant, Vicente 7. Villaflor, hereb voluntaril renounceand relin*uish %hatever ri#hts to, and interests I have in theland covered b ! aboveC!entioned application in favor ofthe Nasipit 5u!ber "o!pan, Inc.

&lso on &u#ust +4, +>2, Nasipit 5u!ber filed a Sales &pplication over the t%o91; parcels of land, coverin# an area of +82 hectares, !ore or less. Thisapplication %as also nu!bered VC2- 9e:h. K;.

On &u#ust +-, +>2 the Director of 5ands issued an FOrder of &%ardF1*infavor of Nasipit 5u!ber "o!pan, Inc., pertinent portion of %hich reads6

8. That at the auction sale of the land held on 7ul 18, +>2the hi#hest bid received %as that of Nasipit 5u!ber"o!pan, Inc. %hich offered P8+.22 per hectare or

P>,-82.22 for the %hole tract, %hich bid %as e*ualed bapplicant Vicente 7. Villaflor, %ho deposited the a!ount ofP>-8.22 under Official Receipt No. /C+-14 dated 7ul18, +>2 %hich is e*uivalent to +2L of the bid.Subse*uentl, the said . . . Villaflor paid the a!ount ofP>,+42.22 in full pa!ent of the purchase price of the

aboveC!entioned land and for so!e reasons stated in aninstru!ent of relin*uish!ent dated &u#ust +4, +>2, he9Vicente 7. Villaflor; relin*uished his ri#hts to and interest inthe said land in favor of the Nasipit 5u!ber "o!pan, Inc.%ho filed the correspondin# application therefore.

In vie% of the fore#oin#, and it appearin# that theproceedin#s had . . . %ere in accordance %ith la% and in

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::: ::: :::

. . . 9T;hat in a Decision dated &u#ust , +-- 9e:h. ;, the Director of 5andsfound that the pa!ent of the a!ount of P>,222.22 in the Deed . . . and theconsideration in the ree!ent to Sell %ere dul proven, and ordered thedis!issal of Villaflor)s protest and #ave due course to the Sales &pplication ofNasipit 5u!ber. Pertinent portion of the Decision penned b Director of 5ands,Ra!on "asanova, in the Matter of SP No. VC2- 9"CVC82-; . . . reads6

::: ::: :::

Durin# the proceedin#s, Villaflor presented another clai!entirel different fro! his previous clai! this ti!e, forrecover of rentals in arrears arisin# fro! a supposedcontract of lease b Villaflor as lessor in favor of Nasipit aslessee, and inde!nit for da!a#es supposedl causedi!prove!ents on his other propert . . . in the sta##erin#a!ount of Seventeen Million 9P+-,222,222.22; Pesos.

?arlier, he had also de!anded fro! N&SIPIT . . .9P81-,222.22; . . . also as inde!nit for da!a#es toi!prove!ents supposedl caused b N&SIPIT on his otherreal propert as %ell as for rei!burse!ent of realt ta:esalle#edl paid b hi! thereon.

::: ::: :::

It %ould see! that . . . Villaflor has sou#ht to in(ect so !ancollaterals, if not e:traneous clai!s, into this case. It is theconsidered opinion of this Office that an clai! not %ithinthe sphere or scope of its ad(udicator authorit as anad!inistrative as %ell as *uasiC(udicial bod or an issue

%hich see0s to delve into the !erits of incidents clearloutside of the ad!inistrative co!petence of this Office todecide !a not be entertained.

There is no !erit in the contention of Villaflor that o%in# toNasipit)s failure to pa the a!ount of . . . 9P>,222.22; . . .9assu!in# that Nasipit had failed; the deed ofrelin*uish!ent beca!e null and void for lac0 ofconsideration. . . . .

::: ::: :::

. . . The records clearl sho%, ho%ever, that since thee:ecution of the deed of relin*uish!ent . . . Villaflor hasal%as considered and reco#ni$ed N&SIPIT as havin# the(uridical personalit to ac*uire public lands for a#riculturalpurposes. . . . .

::: ::: :::

?ven this Office had not failed to reco#ni$e the (uridicalpersonalit of N&SIPIT to appl for the purchase of publiclands . . . %hen it a%arded to it the land so relin*uished bVillaflor 9Order of &%ard dated &u#ust +-, +>2; andaccepted its application therefor. &t an rate, the *uestion%hether an applicant is *ualified to appl for the ac*uisitionof public lands is a !atter bet%een the applicant and thisOffice to decide and %hich a third part li0e Villaflor has nopersonalit to *uestion beond !erel callin# the attentionof this Office thereto.

::: ::: :::

Villaflor offered no evidence to support his clai! of nonCpa!ent beond his o%n selfCservin# assertions ande:pressions that he had not been paid said a!ount. &sprotestant in this case, he has the affir!ative of the issue.He is obli#ed to prove his alle#ations, other%ise his action%ill fail. Bor, it is a %ell settled principle 9); that if plaintiffupon %ho! rests the burden of provin# his cause of actionfails to sho% in a satisfactor !anner the facts upon %hichhe bases his clai!, the defendant is under no obli#ation toprove his e:ceptions or special defenses 9/elen vs. /elen,+ Phil. 121' Mendo$a vs. Bul#encio, Phil. 18;.

::: ::: :::

"onse*uentl, Villaflor)s clai! that he had not been paid!ust perforce fail.

On the other hand, there are stron# and co!pellin# reasonsto presu!e that Villaflor had alread been paid the a!ountof Bive Thousand 9P>,222.22; Pesos.

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First, . . . Ahat is surprisin#, ho%ever, is not so !uch hisclai!s consistin# of #i#antic a!ounts as his havin#for#otten to adduce evidence to prove his clai! of nonCpa!ent of the Bive Thousand 9P>,222.22; Pesos durin#the investi#ation proceedin#s %hen he had all the ti!e andopportunit to do so. . . . The fact that he did not adduce or

even atte!pt to adduce evidence in support thereof sho%seither that he had no evidence to offer . . . that N&SIPIT hadalread paid hi! in fact. Ahat is %orse is that Villaflor didnot even bother to co!!and pa!ent, orall or in %ritin#, ofthe Bive Thousand 9P>,222.22; Pesos %hich %as supposedto be due hi! since &u#ust +-, +>2, the date %hen theorder of a%ard %as issued to Nasipit, and %hen his cause ofaction to recover pa!ent had accrued. The fact that heonl !ade a co!!and 9sic; for pa!ent on 7anuar +,+-8, %hen he filed his protest or t%entCfour 918; earslater is i!!ediatel nu#ator of his clai! for nonCpa!ent.

/ut Villaflor !aintains that he had no 0no%led#e or notice

that the order of a%ard had alread been issued to N&SIPITas he had #one to Indonesia and he had been absent fro!the Philippines durin# all those t%entCfour 918; ears. Thisof course ta:es credulit. . . . .

Second, it should be understood that the condition thatN&SIPIT should rei!burse Villaflor the a!ount of BiveThousand 9P>,222.22; Pesos upon its receipt of the order ofa%ard %as fulfilled as said a%ard %as issued to N&SIPIT on&u#ust +-, +>2. The said deed of relin*uish!ent %asprepared and notari$ed in Manila %ith Villaflor and N&SIPITsi#nin# the instru!ent also in Manilaon &u#ust +4, +>2 9p.--, 9sic;;. The follo%in# da or barel a da after that, or on

&u#ust +-, +>2, the order of a%ard %as issued b thisOffice to N&SIPIT also in Manila. No%, considerin# thatVillaflor is presu!ed to be !ore assiduous in follo%in# up%ith the /ureau of 5ands the e:peditious issuance of theorder of a%ard as the pa!ent of the Bive Thousand9P>,222.22; Pesos 9consideration; %ould depend on theissuance of said order to a%ard N&SIPIT, %ould it not bereasonable to believe that Villaflor %as at hand %hen thea%ard %as issued to N&SIPIT an &u#ust +-, +>2, or barela da %hich 9sic; he e:ecuted the deed of relin*uish!ent on&u#ust +4, +>2, in Manila . . . .

Third, on the other hand, N&SIPIT has in his possession asort of ForderF upon itself 9the deed of relin*uish!ent%herein he 9sic; obli#ated itself to rei!burse or pa Villaflorthe . . . consideration of the relin*uish!ent upon its receiptof the order of a%ard; for the pa!ent of the aforesaida!ount the !o!ent the order of a%ard is issued to it. It is

reasonable to presu!e that N&SIPIT has paid the BiveThousand 9P>,222.22; Pesos to Villaflor.

& person in possession of an order onhi!self for the pa!ent of !one, or thedeliver of anthin#, has paid the !oneor delivered the thin# accordin#l.9Section >90; /C++ Revised Rules of"ourt.

It should be noted that N&SIPIT did not produce directevidence as proof of its pa!ent of the Bive Thousand9P>,222.22; Pesos to Villaflor. Nasipit)s e:planation on this

point is found satisfactor.

. . . 9I;t %as virtuall i!possible forN&SIPIT, after the lapse of the intervenin#18 ears, to be able to cope up %ith all therecords necessar to sho% that theconsideration for the deed ofrelin*uish!ent had been full paid. Toe:pect N&SIPIT to 0eep intact all recordspertinent to the transaction for the %hole*uarter of a centur %ould be to re*uire%hat even the la% does not. Indeed, eventhe applicable la% itself 9Sec. -,

National Internal Revenue "ode; re*uiresthat all records of corporations bepreserved for onl a !a:i!u! of fiveears.

N&SIPIT !a %ell have added that at an rate %hile Fthereare transactions %here the proper evidence is i!possible ore:tre!el difficult to produce after the lapse of ti!e . . . thela% creates presu!ptions of re#ularit in favor of suchtransactions 912 &!. 7ur. 11; so that %hen the basic fact isestablished in an action the e:istence of the presu!ed fact

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!ust be assu!ed b force of la%. 9Rule +, @nifor! Rulesof ?vidence' Ai#!ore, Sec. 18+;.

&nent Villaflor)s clai! that the +82Chectare land relin*uishedand a%arded to N&SIPIT is his private propert, little 9need;be said. . . . . The trac0s of land referred to therein are not

identical to the lands a%arded to N&SIPIT. ?ven in theassu!ption that the lands !entioned in the deeds oftransfer are the sa!e as the +82Chectare area a%arded toN&SIPIT, their purchase b Villaflor 9or; the latter)soccupation of the sa!e did not chan#e the character of theland fro! that of public land to a private propert. Theprovision of the la% is specific that public lands can onl beac*uired in the !anner provided for therein and notother%ise 9Sec. ++, ".&. No. +8+, as a!ended;. Therecords sho% that Villaflor had applied for the purchase ofthe lands in *uestion %ith this Office 9Sales &pplication No.VC2-; on Dece!ber 1, +8. . . . . There is a condition inthe sales application si#ned b Villaflor to the effect that he

reco#ni$es that the land covered b the sa!e is of publicdo!ain and an and all ri#hts he !a have %ith respectthereto b virtue of continuous occupation and cultivationare relin*uished to the 3overn!ent 9para#raph 4, Sales&pplication No. VC2- . . .; of %hich Villaflor is ver !ucha%are. It also appears that Villaflor had paid for thepublication fees appurtenant to the sale of the land. Heparticipated in the public auction %here he %as declared thesuccessful bidder. He had full paid the purchase prive 9sic;thereof 9sic;. It %ould be a 9sic; hei#ht of absurdit forVillaflor to be buin# that %hich is o%ned b hi! if his clai!of private o%nership thereof is to be believed. The !ost thatcan be said is that his possession %as !erel that of a salesapplicant to %hen it had not been a%arded because herelin*uished his interest therein in favor of N&SIPIT %ho9sic; filed a sales application therefor.

::: ::: :::

. . . Durin# the investi#ation proceedin#s, Villaflor presentedas his ?:hibit F9sic;F 9%hich N&SIPIT adopted as its o%ne:hibit and had it !ar0ed in evidence as ?:hibit F+F; a dulnotari$ed Fa#ree!ent to SellF dated 7ul -, +8, b virtueof %hich Villaflor undertoo0 to sell to Nasipit the tracts ofland !entioned therein, for a consideration of T%entCBour

Thousand 9P18,222.22; Pesos. Said tracts of land havebeen verified to be identical to the parcels of land for!erlapplied for b Villaflor and %hich the latter had relin*uishedin favor of N&SIPIT under a deed of relin*uish!ente:ecuted b hi! on &u#ust +4, +>2. In another docu!ente:ecuted on Dece!ber -, +8 . . . Villaflor as FBIRST

P&RTKF and N&SIPIT as FS?"OND P&RTKF confir!ed theFree!ent to SellF of 7ul -, +8, %hich %as !aintainedFin full force and effect %ith all its ter!s and conditions . . .F9?:h. FC&F;' and that Ffor and in consideration of . . .TA?NTK BO@R THO@S&ND 9P18,222.22; P?SOS that theSecond Part shall pa to the Birst Part . . . the Birst Parthereb sells, transfers and conves unto the SecondPart . . . his ri#ht interest and participation under and bvirtue of the Sales &pplication No. VC2-F and, in itspara#raph , it !ade stipulations as to %hen part of the saidconsideration . . . was paidand %hen the balance was to bepaid, to %it6

a; the a!ount of S?V?N THO@S&ND . . .P?SOS has alread been paid b theSecond Part to the First Part upon thee!ecution o" the A#reement to Sell$ on%ul &', +8'

b; the a!ount of BIV? THO@S&ND . . .P?SOS shall be paid upon the si#nin# o"this present a#reement' and

c; the a!ount of TA?5V? THO@S&ND . .. P?SOS, shall be paid upon thee:ecution b the Birst Part of the

&bsolute Sale of the T%o parcels of landin *uestion in favor of the Second Part ofthe "ertificate of O%nership of the saidt%o parcels of land. 9?:h. C/;.9?!phasis ours;

It is thus clear fro! this subse*uent docu!ent !ar0ed?:hibit F &N&5"OF that of the consideration of theFree!ent to SellF dated 7ul -, +8, involvin# the +82Chectare area relin*uished b Villaflor in favor of N&SIPIT, inthe a!ount of T%entCBour Thousand 9P18,222.22; Pesos6

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9+; the a!ount of Seven Thousand 9P-,222.22; Pesos wasalread paid uponthe e:ecution of the Free!ent to SellFon 7ul -, +8, receipt of %hich incidentall %as ad!ittedb Villaflor in the docu!ent of Dece!ber -, +8'

91; the a!ount of Bive Thousand 9P>,222.22; Pesos was

paid%hen said docu!ent %as si#ned b Vicente 7. Villafloras the Birst Part and Nasipit thru its President, as theSecond Part, on Dece!ber -, +8' and

9; the balance of T%elve Thousand 9P+1,222.22; Pesos tobe paid upon the e:ecution b the Birst Part of the &bsoluteDeed of Sale of the t%o parcels of land in favor of theSecond Part, and upon deliver to the Second Part of the"ertificate of O%nership of the said t%o parcels of land.

Villaflor contends that N&SIPIT could not have paid Villaflorthe balance of T%elve Thousand 9P+1,222.22; Pesos . . .

consideration in the ree!ent to Sell %ill onl be paid toapplicantCassi#nor 9referrin# to Villaflor; upon obtainin# aTorrens Title in his favor over the +82Chectare of landapplied for and upon e:ecution b hi! of a Deed of &bsoluteSale in favor of Nasipit 5u!ber "o!pan, Inc. . . . .Inas!uch as applicantCassi#nor %as not able to obtain aTorrens Title over the land in *uestion he could not e:ecutean absolute Deed of 9sic; Nasipit 5u!ber "o., Inc. Hence,the ree!ent to Sell %as not carried out and no T%elveThousand 9P+1,222.22; Pesos %as overpaid either to theapplicantCassi#nor, !uch less to Ho%ard 7. Nell "o!pan.9See M?MOR&ND@M BOR TH? &PP5I"&NTC&SSI3NOR,dated 7anuar >, +--;. . . .

. . . Villaflor did not adduce evidence in support of his clai!that he had not been paid the . . . 9P+1,222.22; . . .consideration of the ree!ent to Sell dated 7ul -, +89?:h. F N&5"OF; beond his !ere uncorroboratedassertions. On the other hand, there is stron# evidence tosho% that said T%elve Thousand 9P+1,222.22; Pesos hadbeen paid b 9private respondent; to ?d%ard 7. Nell"o!pan b virtue of the Deed of &ssi#n!ent of "redite:ecuted b Villaflor 9?:h. F8+ N&5"OF; for the credit of thelatter.

&tt. 3abriel /anaa#, resident counsel of N&SIPIT %ho is ina position to 0no% the facts, testified for N&SIPIT. Hedescribed that it %as he %ho notari$ed the Free!ent toSellF 9?:h. FBF;' that he 0ne% about the e:ecution of thedocu!ent of Dece!ber -, +8 9?:h. FF; confir!in# thesaid Free!ent to SellF havin# been previousl consulted

thereon b 7ose Bernande$, %ho si#ned said docu!ent onbehalf of N&SIPIT . . . that subse*uentl, in 7anuar +8,Villaflor e:ecuted a Deed of &ssi#n!ent of credit in favor of?d%ard 7. Nell "o!pan 9?:h. F8+ N&5"OF; %herebVillaflor ceded to the latter his receivable for N&SIPITcorrespondin# to the re!ainin# balance in the a!ount ofT%elve Thousand . . . Pesos of the total consideration . . .stipulated in both the Free!ent to SellF 9?:h. FBF; and thedocu!ent dated Dece!ber -, +8 9?:h. FF;'. . . . He further testified that the said assi#n!ent of credit%as co!!unicated to 9private respondent; under coverletter dated 7anuar 18, +8 9?:h. F8+C&F; and not lon#thereafter, b virtue of the said assi#n!ent of credit, 9privaterespondent; paid the balance of T%elve Thousand . . . dueto Villaflor to ?d%ard 7. Nell "o!pan . . . . &tt. /anaa#)saforesaid testi!on stand unrebutted' hence, !ust be #ivenfull %ei#ht and credit. . . . Villaflor and his counsel %erepresent %hen &tt. /anaa#)s fore#oin# testi!on %asVillaflor did not de!ur, nor did he rebut the sa!e, despitehavin# been accorded full opportunit to do so.

::: ::: :::

Havin# found that both the Bive Thousand . . . considerationof the deed of Relin*uish!ent . . . and that the re!ainin#balance of

. . . 9P+1,222.22; to co!plete the T%entCBour Thousand9P18,222.22; Pesos consideration of both the ree!ent toSell dated 7ul -, +8, and the docu!ent, dated Dece!ber-, +8, e:ecuted b the for!er in favor of the latter, havebeen paid Villaflor the issue on prescription and lachesbeco!es acade!ic and needs no further discussion.

/ut !ore than all the *uestions thus far raised and resolvedis the *uestion %hether a sales patent can be issued toN&SIPIT for the +82Chectare area a%arded to it in the li#htof Section ++, &rticle JIV of the ne% "onstitution %hichprovides in its pertinent portion to %it6

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. . . No private corporation or association!a hold alienable land of the publicdo!ain e:cept b lease not to e:ceed onethousand hectares in area . . . .

The Secretar of 7ustice had previous occasion to rule on

this point in his opinion No. +82, s. +-8. Said theHonorable 7ustice Secretar6

On the second *uestion, 9referrin# to the*uestions %hen !a a public land beconsidered to have been ac*uired bpurchase before the effectivit of the ne%"onstitution posed b the Director of5ands in his *uer on the effect onpendin# applications for the issuance ofsales patent in the li#ht of Section ++, &rt.JIV of the Ne% "onstitution aforecited;,ou refer to this Office)s Opinion No. 48

series of +- in %hich I stated6

On the other hand, %ith respect to salesapplications read for issuance of salespatent, it is ! opinion that %here theapplicant had, before the "onstitution too0effect, full co!plied %ith all thisobli#ations under the Public 5and &ct inorder to entitle hi! to a Sales patent,there %ould be no le#al or e*uitable(ustification for refusin# to issue or releasethe sales patent.

Aith respect to the point as to %hen the Sales applicant hasco!plied %ith all the ter!s and conditions %hich %ouldentitle hi! to a sales patent, the herein above Secretar of7ustice %ent on6

That as to %hen the applicant hasco!plied %ith all the ter!s and conditions%hich %ould entitle hi! to a patent is a*uestioned 9sic; fact %hich our office%ould be in the best position to deter!ine.Ho%ever, relatin# this to the procedure for

the processin# of applications !entionedabove, I thin0 that as the applicant hasfulfilled the constructioncultivationre*uire!ents and has full paid thepurchase price, he should be dee!ed tohave ac*uired b purchase the particular

tract of land and 9sic; the area 9sic; in theprovision in *uestion of the ne%constitution %ould not appl.

Bro! the decision of the Director of 5ands, Villaflor filed a Motion forReconsideration %hich %as considered as an &ppeal M.N.R. "ase 88+, tothe Ministr of Natural Resources.

On 7une 4, +-, the Minister of Natural Resources rendered a Decision 9e:h.;, 15dis!issin# the appeal and affir!in# the decision of the Director of 5ands,pertinent portions of %hich reads6

&fter a careful stud of the records and the ar#u!ents of theparties, %e believe that the appeal is not %ell ta0en.

Birstl, the area in dispute is not the private propert ofappellant.

The evidence adduced b appellant to establish his clai! ofo%nership over the sub(ect area consists of deeds ofabsolute sale e:ecuted in his favor on 7anuar +4, andBebruar +>, +82, b four 98; different persons, na!el,"irilo Piencenaves, Ber!in /alobo, "laudio Otero andHer!o#enes Patete.

Ho%ever, an e:a!ination of the technical descriptions of thetracts of land sub(ect of the deeds of sale %ill disclose thatsaid parcels are not identical to, and do not tall %ith, thearea in controvers.

It is a basic assu!ption of our polic thatlands of %hatever classification belon# tothe state. @nless alienated in accordance%ith la%, it retains its ri#hts over the sa!eas do!inus, 9Santia#o vs. de los Santos,

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5C1218+, Nove!ber 11, +-8, 4+ S"R&+>1;.

Bor, it is %ellCsettled that no public landcan be ac*uired b private persons%ithout an #rant, e:press or i!plied fro!

the #overn!ent. It is indispensable thenthat there be sho%in# of title fro! thestate or an other !ode of ac*uisitionreco#ni$ed b la%. 95ee Hon# Ho0, et al.vs. David, et al., 5C2, Dece!ber 1-,+-1, 8 S"R& -.;

It is %ellCsettled that all lands re!ain part of the publicdo!ain unless severed therefro! b state #rant or unlessalienated in accordance %ith la%.

Ae, therefore, believe that the aforesaid deeds of sale donot constitute clear and convincin# evidence to establishthat the contested area is of private o%nership. Hence, thepropert !ust be held to be public do!ain.

FThere bein# no evidence %hatever thatthe propert in *uestion %as everac*uired b the applicants or theirancestors either b co!position title fro!the Spanish 3overn!ent or bpossessor infor!ation title or b another !eans for the ac*uisition of publiclands, the propert !ust be held to bepublic do!ain.F 95ee Hon# Ho0, et al., vs.David , et al., 5C2 Dece!ber 1-,+-1, 8 S"R& -C- citin# Heirs ofDatu Pendatun vs. Director of 5ands' seealso Director of 5ands vs. Rees, 5C1->8, Nove!ber 1, +->, 4 S"R&+--;.

/e that as it !a, appellant, b filin# a sales application overthe controverted land, ac0no%led#ed une*uivocabl

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Resources issued a !e!orandu!, dated Bebruar +,+-8, %hich pertinentl reads as follo%s6

In the i!ple!entation of the fore#oin#opinion, sales application of privateindividuals coverin# areas in e:cess of 18

hectares and those of corporations,associations, or partnership %hich fallunder an of the follo%in# cate#ories shallbe #iven due course and issued patents,to %it6

+. Sales application forfishponds and fora#ricultural purposes9SB&, S& and I3PS&;%herein prior to 7anuar+-, +-'

a. thelandcoveredthereb%asa%arded'

b.cultivationre*uire!ents ofla%%ereco!plied%ithassho%n b

investi#ationreportssub!i

ttedpriorto7anuar +-,+-'

c.land%assurveedand

survereturnsalreadsub!ittedto theDirector of5andsforverificationandapproval'and

d.purchasedprice%as

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fullpaid.

Bro! the records, it is evident that the aforestated re*uisiteshave been co!plied %ith b appellee lon# before 7anuar+-, +-, the effectivit of the Ne% "onstitution. To restate,

the disputed area %as a%arded to appellee on &u#ust +-,+>2, the purchase price %as full paid on 7ul 14, +>+,the cultivation re*uire!ents %ere co!plied %ith as perinvesti#ation report dated Dece!ber +, +8, and the land%as surveed under PlsC-.

On 7ul 4, +-, petitioner filed a co!plaint16in the trial court for FDeclaration of Nullitof "ontract 9Deed of Relin*uish!ent of Ri#hts;, Recover of Possession 9of t%oparcels of land sub(ect of the contract;, and Da!a#esF at about the sa!e ti!e that heappealed the decision of the Minister of Natural Resources to the Office of thePresident.

On 7anuar 1, +, petitioner died. The trial court ordered his %ido%, 5ourdes D.Villaflor, to be substituted as petitioner. &fter trial in due course, the then "ourt of BirstInstance of usan del Norte and /utuan "it, /ranch III,17dis!issed the co!plaint onthe #rounds that6 9+; petitioner ad!itted the due e:ecution and #enuineness of thecontract and %as estopped fro! provin# its nullit, 91; the verbal lease a#ree!ents%ere unenforceable under &rticle +82 91; 9e; of the "ivil "ode, and 9; his causes ofaction %ere barred b e:tinctive prescription andor laches. It ruled that there %asprescription andor laches because the alle#ed verbal lease ended in +44, but theaction %as filed onl on 7anuar 4, +-. The si:Cear period %ithin %hich to file anaction on an oral contract per &rticle ++8> 9+; of the "ivil "ode e:pired in +-1. Thedecretal portion1+of the trial court)s decision reads6

AH?R?BOR?, the fore#oin# pre!ises dul considered, (ud#!ent is herebrendered in favor of the defendant and a#ainst the plaintiff. "onse*uentl, thiscase is hereb ordered DISMISS?D. The defendant is hereb declared thela%ful actual phsical possessorCoccupant and havin# a better ri#ht ofpossession over the t%o 91; parcels of land in liti#ation described in par. +.1 ofthe co!plaint as Parcel I and Parcel II, containin# a total area of One HundredSi:t 9+42; hectares, and %as then the sub(ect of the Sales &pplication No. VC2- of the plaintiff 9?:hibits +, +C&, +C/, pp. 81+ to 81+C&, Record;, and no% ofthe Sales &pplication No. 2-, ?ntr No. VC82- of the defendant Nasipit5u!ber "o!pan 9?:hibit K, pp. >-C>, Record;. The ree!ents to SellReal Ri#hts, ?:hibits 1 to 1C", to C/, and the Deed of Relin*uish!ent ofRi#hts, ?:hibits N to NC+, over the t%o parcels of land in liti#ation are hereb

declared bindin# bet%een the plaintiff and the defendant, their successors andassi#ns.

Double the costs a#ainst the plaintiff.

The heirs of petitioner appealed to Respondent "ourt of &ppeals

19

%hich, ho%ever,rendered (ud#!ent a#ainst petitioner via the assailed Decision dated Septe!ber 1-,+2 findin# petitioner)s praers 9+; for the declaration of nullit of the deed ofrelin*uish!ent, 91; for the eviction of private respondent fro! the propert and 9; forthe declaration of petitioner)s heirs as o%ners to be %ithout basis. The decretalportion)of the assailed 8Cpa#e, sin#leCspaced Decision curtl reads6

AH?R?BOR?, the Decision appealed fro!, is hereb &BBIRM?D, %ith costsa#ainst plaintiffCappellants.

Not satisfied, petitioner)s heirs filed the instant >-Cpa#e petition for revie% datedDece!ber -, +2. In a Resolution dated 7une 1, ++, the "ourt denied this petitionFfor bein# late.F On reconsideration upon plea of counsel that petitioners %ere FpoorF

and that a full decision on the !erits should be rendered the "ourt reinstated thepetition and re*uired co!!ent fro! private respondent. ?ventuall, the petition %as#ranted due course and the parties thus filed their respective !e!oranda.

The (ssues

Petitioner, throu#h his heirs, attributes the follo%in# errors to the "ourt of &ppeals6

I. &re the findin#s of the "ourt of &ppeals conclusive and bindin# upon theSupre!e "ourt

II. &re the findin#s of the "ourt of &ppeals fortified b the si!ilar findin#s !ade

b the Director of 5ands and the Minister of Natural Resources 9as %ell as bthe Office of the President;

III. Aas there Fforu! shoppin#F.

IV. &re the findin#s of facts of the "ourt of &ppeals and the trial courtsupported b the evidence and the la%

V. &re the findin#s of the "ourt of &ppeals supported b the ver ter!s of thecontracts %hich %ere under consideration b the said court

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VI. Did the "ourt of &ppeals, in construin# the sub(ect contracts, consider theconte!poraneous and subse*uent act of the parties pursuant to article +-+of the "ivil "ode

VII. Did the "ourt of &ppeals consider the fact and the unrefuted clai! ofVillaflor that he never 0ne% of the a%ard in favor of Nasipit

VIII. Did the "ourt of &ppeals correctl appl the rules on evidence in itsfindin#s that Villaflor %as paid the P>,222.22 consideration because Villaflordid not adduce an proof that he %as not paid

IJ. Is the "ourt of &ppeals) conclusion that the contract is not si!ulated orfictitious si!pl because it is #enuine and dul e:ecuted b the parties,supported b lo#ic or the la%

J. Ma the prestations in a contract a#reein# to transfer certain ri#htsconstitute estoppel %hen this ver contract is the sub(ect of an action forannul!ent on the #round that it is fictitious

JI. Is the "ourt of &ppeals) conclusion that the lease a#ree!ent bet%eenVillaflor is verbal and therefore, unenforceable supported b the evidence andthe la%

&fter a revie% of the various sub!issions of the parties, particularl those of petitioner,this "ourt believes and holds that the issues can be condensed into three as follo%s6

9+; Did the "ourt of &ppeals err in adoptin# or relin# on the factual findin#s ofthe /ureau of 5ands, especiall those affir!ed b the Minister 9no% Secretar;of Natural Resources and the trial court

91; Did the "ourt of &ppeals err in upholdin# the validit of the contracts to selland the deed of relin*uish!ent Other%ise stated, did the "ourt of &ppealserr in findin# the deed of relin*uish!ent of ri#hts and the contracts to sellvalid, and not si!ulated or fictitious

9; Is the private respondent *ualified to ac*uire title over the disputedpropert

The Court)s Rulin#

The petition is bereft of !erit. I t basicall *uestions the sufficienc of the evidencerelied upon b the "ourt of &ppeals, alle#in# that public respondent)s factual findin#s%ere based on speculations, sur!ises and con(ectures. Petitioner insists that a revie%of those findin#s is in order because the %ere alle#edl 9+; rooted, not on specificevidence, but on conclusions and inferences of the Director of 5ands %hich %ere, inturn, based on !isapprehension of the applicable la% on si!ulated contracts' 91;

arrived at %hi!sicall totall i#norin# the substantial and ad!itted fact that petitioner%as not notified of the a%ard in favor of private respondent' and 9; #rounded on errorsand !isapprehensions, particularl those relatin# to the identit of the disputed area.

First (ssue6 Primar %urisdiction o" the *irector o" Lands andFinalit o" Factual Findin#s o" the Court o" Appeals

@nderlin# the rulin#s of the trial and appellate courts is the doctrine of pri!ar(urisdiction' i.e., courts cannot and %ill not resolve a controvers involvin# a *uestion%hich is %ithin the (urisdiction of an ad!inistrative tribunal, especiall %here the*uestion de!ands the e:ercise of sound ad!inistrative discretion re*uirin# the special0no%led#e, e:perience and services of the ad!inistrative tribunal to deter!inetechnical and intricate !atters of fact.)1

In recent ears, it has been the (urisprudential trend to appl this doctrine to casesinvolvin# !atters that de!and the special co!petence of ad!inistrative a#encies evenif the *uestion involved is also (udicial in character. It applies F%here a clai! is ori#inallco#ni$able in the courts, and co!es into pla %henever enforce!ent of the clai!re*uires the resolution of issues %hich, under a re#ulator sche!e, have been placed%ithin the special co!petence of an ad!inistrative bod' in such case, the (udicialprocess is suspended pendin# referral of such issues to the ad!inistrative bod for itsvie%.F))

In cases %here the doctrine of pri!ar (urisdiction is clearl applicable, the court cannotarro#ate unto itself the authorit to resolve a controvers, the (urisdiction over %hich isinitiall lod#ed %ith an ad!inistrative bod of special co!petence.)*In Machete+s. Court o" Appeals, the "ourt upheld the pri!ar (urisdiction of the Depart!ent ofrarian Refor! &d(udicator /oard 9D&R&/; in an a#rarian dispute over the pa!entof bac0 rentals under a leasehold contract.)4In "oncerned Officials of the MetropolitanWaterwor,s and Sewera#e Sstem +s. -as.ue/,)5the "ourt reco#ni$ed that theMASS %as in the best position to evaluate and to decide %hich bid for a %ater%or0spro(ect %as co!patible %ith its develop!ent plan.

The rationale underlin#the doctrine of pri!ar (urisdiction finds application in thiscase, since the *uestions on the identit of the land in dispute and the factual*ualification of private respondent as an a%ardee of a sales application re*uire atechnical deter!ination b the /ureau of 5ands as the ad!inistrative a#enc %ith the

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e:pertise to deter!ine such !atters. /ecause these issues preclude prior (udicialdeter!ination, it behooves the courts to stand aside even %hen the apparentl havestatutor po%er to proceed, in reco#nition of the pri!ar (urisdiction of thead!inistrative a#enc.)6

One thrust of the !ultiplication of ad!inistrative a#encies is that the

interpretation of contracts and the deter!ination of private ri#hts thereunder isno lon#er a uni*uel (udicial function, e:ercisable onl b our re#ular courts. )7

Petitioner initiated his action %ith a protest before the /ureau of 5ands and follo%ed itthrou#h in the Ministr of Natural Resources and thereafter in the Office of thePresident. "onsistent %ith the doctrine of pri!ar (urisdiction, the trial and the appellatecourts had reason to rel on the findin#s of these speciali$ed ad!inistrative bodies.

The pri!ar (urisdiction of the director of lands and the !inister of natural resourcesover the issues re#ardin# the identit of the disputed land and the *ualification of ana%ardee of a sales patent is established b Sections and 8 of "o!!on%ealth &ct No.+8+, also 0no%n as the Public 5and &ct6

Sec. . The Secretar of riculture and "o!!erce 9no% Secretar of NaturalResources; shall be the e:ecutive officer char#ed %ith carrin# out theprovisions of this &ct throu#h the Director of 5ands, %ho shall act under hisi!!ediate control.

Sec. 8. Sub(ect to said control, the Director of 5ands shall have directe:ecutive control of the surve, classification, lease, sale or an other for! ofconcession or disposition and !ana#e!ent of the lands of the public do!ain,and his decision as to *uestions of fact shall be conclusive %hen approved bthe Secretar of riculture and "o!!erce.

Thus, the Director of 5ands, in his decision, said6)+

. . . It is !erel %hether or not Villaflor has been paid the Bive Thousand9P>,222.22; Pesos stipulated consideration of the deed of relin*uish!ent!ade b hi! %ithout touchin# on the nature of the deed of relin*uish!ent.The ad!inistration and disposition of public lands is pri!aril vested in theDirector of 5ands and ulti!atel %ith the Secretar of riculture and NaturalResources 9no% Secretar of Natural Resources;, and to this end

Our Supre!e "ourt has reco#ni$ed that the Director of5ands is a *uasiC(udicial officer %ho passes on issues of!i:ed facts and la% 9Ortua vs. /in#son ?ncarnacion, >

Phil 882;. Sections and 8 of the Public 5and 5a% thus!ean that the Secretar of riculture and NaturalResources shall be the final arbiter on *uestions of fact inpublic land conflicts 9Heirs of Varela vs. &*uino, -+ Phil 4'7ulian vs. &postol, >1 Phil 881;.

The rulin# of this Office in its order dated Septe!ber +2, +->, is %orthreiteratin#, thus6

. . . it is our opinion that in the e:ercise of his po%er ofe:ecutive control, ad!inistrative disposition and alle#ationof public land, the Director of 5ands should entertain theprotest of Villaflor and conduct for!al investi#ation . . . todeter!ine the follo%in# points6 9a; %hether or not the Nasipit5u!ber "o!pan, Inc. paid or rei!bursed to Villaflor theconsideration of the ri#hts in the a!ount of P>,222.22 and%hat evidence the co!pan has to prove pa!ent, therelin*uish!ent of ri#hts bein# part of the ad!inistrativeprocess in the disposition of the land in *uestion . . . .

. . . . /esides, the authorit of the Directorof 5ands to pass upon and deter!ine*uestions considered inherent in oressential to the efficient e:ercise of hispo%ers li0e the incident at issue, i.e. ,%hether Villaflor had been paid or not, isconceded bla%.

Reliance b the trial and the appellate courts on the factual f indin#s of the Director of5ands and the Minister of Natural Resources is not !isplaced. / reason of the special0no%led#e and e:pertise of said ad!inistrative a#encies over !atters fallin# undertheir (urisdiction, the are in a better position to pass (ud#!ent thereon' thus, theirfindin#s of fact in that re#ard are #enerall accorded #reat respect, if not finalit,)9bthe courts.*The findin#s of fact of an ad!inistrative a#enc !ust be respected as lon#as the are supported b substantial evidence, even if such evidence !i#ht not beover%hel!in# or even preponderant. It is not the tas0 of an appellate court to %ei#honce !ore the evidence sub!itted before the ad!inistrative bod and to substitute itso%n (ud#!ent for that of the ad!inistrative a#enc in respect of sufficienc ofevidence.*1

Ho%ever, the rule that factual findin#s of an ad!inistrative a#enc are accordedrespect and even finalit b courts ad!its of e:ceptions. This is true also in assessin#factual findin#s of lo%er courts. *)It is incu!bent on the petitioner to sho% that the

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resolution of the factual issues b the ad!inistrative a#enc andor b the t rial courtfalls under an of the e:ceptions. Other%ise, this "ourt %ill not disturb such findin#s. **

Ae !ention and *uote e:tensivel fro! the rulin#s of the /ureau of 5ands and theMinister of Natural Resources because the points, *uestions and issues raised bpetitioner before the trial court, the appellate court and no% before this "ourt are

basicall the sa!e as those brou#ht up before the aforesaid speciali$ed ad!inistrativea#encies. &s held b the "ourt of&ppeals6*4

Ae find that the contentious points raised b appellant in this action, aresubstantiall the sa!e !atters he raised in /5 "lai! No. - 9N;. In bothactions, he clai!ed private o%nership over the land in *uestion, assailed thevalidit and effectiveness of the Deed of Relin*uish!ent of Ri#hts hee:ecuted in &u#ust +4, +>2, that he had not been paid the P>,222.22consideration, the value of the i!prove!ents he introduced on the land andother e:penses incurred b hi!.

In this instance, both the principle of pri!ar (urisdiction of ad!inistrative a#encies andthe doctrine of finalit of factual findin#s of the trial courts, particularl %hen affir!ed bthe "ourt of &ppeals as in this case, !ilitate a#ainst petitioner)s cause. Indeed,petitioner has not #iven us sufficient reason to deviate fro! the!.

Land in *ispute (s Public Land

Petitioner ar#ues that even if the technical description in the deeds of sale and those inthe sales application %ere not identical, the area in dispute re!ains his private propert.He alle#es that the deeds did not contain an technical description, as the %eree:ecuted prior to the surve conducted b the /ureau of 5ands' thus, the propertiessold %ere !erel described b reference to natural boundaries. His private o%nershipthereof %as also alle#edl attested to b private respondent)s for!er field !ana#er in

the latter)s Bebruar 11, +>2 letter, %hich contained an ad!ission that the land leasedb private respondent %as covered b the sales application.

This contention is specious. The lac0 of technical description did not prove that thefindin# of the Director of 5ands lac0ed substantial evidence. Here, the issue is not so!uch %hether the sub(ect land is identical %ith the propert purchased b petitioner.The issue, rather, is %hether the land covered b the sales application is private orpublic land. In his sales application, petitioner e:pressl ad!itted that said propert%as public land. This is for!idable evidence as it a!ounts to an ad!ission a#ainstinterest.

In the e:ercise of his pri!ar (urisdiction over the issue, Director of 5ands "asanovaruled that the land %as public6*5

. . . ?ven 9o;n the assu!ption that the lands !entioned in the deeds oftransfer are the sa!e as the +82Chectare area a%arded to Nasipit, theirpurchase b Villaflor 9or; the latter)s occupation of the sa!e did not chan#e

the character of the land fro! that of public land to a private propert. Theprovision of the la% is specific that public lands can onl be ac*uired in the!anner provided for therein and not other%ise 9Sec. ++, ".&. No. +8+, asa!ended;. The records sho% that Villaflor had applied for the purchase oflands in *uestion %ith this Office 9Sales &pplication No. VC2-; on Dece!ber1, +8. . . . There is a condition in the sales application . . . to the effect thathe reco#ni$es that the land covered b the sa!e is of public do!ain and anand all ri#hts he !a have %ith respect thereto b virtue of continuousoccupation and cultivation are relin*uished to the 3overn!ent 9para#raph 4,Sales &pplication No. VC2- of Vicente 7. Villaflor, p. 1+, carpeta; of %hichVillaflor is ver !uch a%are. It also appears that Villaflor had paid for thepublication fees appurtenant to the sale of the land. He participated in thepublic auction %here he %as declared the successful bidder. He had full paid

the purchase prive 9sic; thereor 9sic;. It %ould be a 9sic; hei#ht of absurdit forVillaflor to be buin# that %hich is o%ned b hi! if his clai! of privateo%nership thereof is to bebelieved. . . . .

This findin# %as affir!ed b the Minister of Natural Resources6*6

Birstl, the area in dispute is not the private propert of appellant 9hereinpetitioner;.

The evidence adduced b 9petitioner; to establish his clai! of o%nership overthe sub(ect area consists of deeds of absolute sale e:ecuted in his favor . . . .

Ho%ever, an e:a!ination of the technical descriptions of the tracts of landsub(ect of the deeds of sale %ill disclose that said parcels are not identical to,and do not tall %ith, the area in controvers.

It is a basic assu!ption of our polic that lands of %hateverclassification belon# to the state. @nless alienated inaccordance %ith la%, it retains its ri#hts over the sa!e asdo!inus. 9Santia#o vs. de los Santos, 5C1218+, Nove!ber11, +-8, 4+ S"R& +>1;.

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Bor it is %ellCsettled that no public land can be ac*uired bprivate persons %ithout an #rant, e:press or i!plied fro!the #overn!ent. It is indispensable then that there besho%in# of title fro! the state or an other !ode ofac*uisition reco#ni$ed b la%. 95ee Hon# Ho0, et al. vs.David, et al., 5C2, Dece!ber 1-, +-1, 8 S"R& -;.

::: ::: :::

Ae, therefore, believe that the aforesaid deeds of sale do not constitute clearand convincin# evidence to establish that the contested area is of privateo%nership. Hence, the propert !ust be held to be public do!ain.

There bein# no evidence %hatever that the propert in*uestion %as ever ac*uired b the applicants or theirancestors either b co!position title fro! the Spanish3overn!ent or b possessor infor!ation title or b another !eans for the ac*uisition of public lands, the propert!ust be held to be public do!ain.

/e that as it !a, ;.

"learl, this issue falls under the pri!ar (urisdiction of the Director of 5ands becauseits resolution re*uires Fsurve, classification, . . . disposition and !ana#e!ent of thelands of the public do!ain.F It follo%s that his rulin#s deserve #reat respect. &spetitioner failed to sho% that this factual findin# of the Director of 5ands %asunsupported b substantial evidence, it assu!es finalit. Thus, both the trial and theappellate courts correctl relied on such findin#.*7Ae can do no less.

Second (ssue6 No Simulation o" Contracts Pro+en

Petitioner insists that contrar to &rticle +-+ *+of the "ivil "ode, Respondent "ourterroneousl i#nored the conte!poraneous and subse*uent acts of the parties' hence, itfailed to ascertain their true intentions. Ho%ever, the rule on the interpretation ofcontracts that %as alluded to b petitioner is used in affir!in#, not ne#atin#, their

validit. Thus, &rticle +-,*9%hich is a con(unct of &rticle +-+, provides that, if theinstru!ent is susceptible of t%o or !ore interpretations, the interpretation %hich %ill!a0e it valid and effectual should be adopted. In this li#ht, it is not difficult tounderstand that the le#al basis ur#ed b petitioner does not support his alle#ation thatthe contracts to sell and the deed of relin*uish!ent are si!ulated and fictitious.Properl understood, such rules on interpretation even ne#ate petitioner)s thesis.

/ut let us indul#e the petitioner a%hile and deter!ine %hether the citedconte!poraneous and subse*uent acts of the parties support his alle#ation ofsi!ulation. Petitioner asserts that the relin*uish!ent of ri#hts and the a#ree!ents tosell %ere si!ulated because,"irst, the lan#ua#e and ter!s of said contracts ne#atedprivate respondent)s ac*uisition of o%nership of the land in issue' and second,conte!poraneous and subse*uent co!!unications bet%een hi! and private

respondent alle#edl sho%ed that the latter ad!itted that petitioner o%ned andoccupied the t%o parcels' i.e., that private respondent %as not applin# for said parcelsbut %as interested onl in the t%o hectares it had leased, and that private respondentsupported petitioner)s application for a patent.

Petitioner e:plains that the ree!ent to Sell dated Dece!ber -, +8 did not andcould not transfer o%nership because para#raph 9c; thereof stipulates that theFbalance of t%elve thousand pesos 9+1,222.22; shall be paid upon the e:ecution b theBirst Part

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did not affect the perfection of the contract or prove si!ulation. Neither did the!ort#a#e.

Si!ulation occurs %hen an apparent contract is a declaration of a fictitious %ill,deliberatel !ade b a#ree!ent of the parties, in order to produce, for the purpose ofdeception, the appearance of a (uridical act %hich does not e:ist or is different fro! that

%hich %as reall e:ecuted.4Such an intention is not apparent in the a#ree!ents. Theintent to sell, on the other hand, is as clear as dali#ht.

Petitioner alle#es further that the deed of relin*uish!ent of ri#ht did not #ive full effectto the t%o a#ree!ents to sell, because the preli!inar clauses of the deed alle#edlserved onl to #ive private respondent an interest in the propert as a future o%nerthereof and to enable respondent to follo% up petitioner)s sales application.

Ae disa#ree. Such an intention is not indicated in the deed. On the contrar, a real andfactual sale is evident in para#raph 4 thereof, %hich states6 FThat the Nasipit 5u!ber"o., Inc., . . . is ver !uch interested in ac*uirin# the land covered b the aforecitedapplication to be used for purposes of !echani$ed, far!in#F and the penulti!atepara#raph statin#6 F. . . VI"?NT? 7. VI55&B5OR, hereb voluntaril renounce andrelin*uish %hatever ri#hts to, and interests I have in the land covered b ! aboveC!entioned application in favor of the Nasipit 5u!ber "o., Inc.F

Ae also hold that no si!ulation is sho%n either in the letter, dated Dece!ber , +-,of the for!er field !ana#er of private respondent, 3eor#e Mear. & pertinent portion ofthe letter reads6

9a;s re#ards our propert at &cacia, San Mateo, I recall that %e !ade so!esort of a#ree!ent for the occupanc, but I no lon#er recall the details and Ihad for#otten %hether or not %e actuall did occup our land. /ut if, as ousa, %e did occup it, then I a! sure that the "o!pan is obli#ated to pa arental.

The letter did not contain an e:press ad!ission that private respondent %as stillleasin# the land fro! petitioner as of that date. &ccordin# to Mear, he could no lon#errecall the details of his a#ree!ent %ith petitioner. This cannot be read as evidence ofthe si!ulation of either the deed of relin*uish!ent or the a#ree!ents to sell. It isevidence !erel of an honest lac0 of recollection.

Petitioner also alle#es that he continued to pa realt ta:es on the land even after thee:ecution of said contracts. This is i!!aterial because pa!ent of realt ta:es doesnot necessaril prove o%nership, !uch less si!ulation of said contracts.41

Nonpament o" the Consideration*id Not Pro+e Simulation

Petitioner insists that nonpa!ent of the consideration in the contracts proves theirsi!ulation. Ae disa#ree. Nonpa!ent, at !ost, #ives hi! onl the ri#ht to sue forcollection. 3enerall, in a contract of sale, pa!ent of the price is a resolutor condition

and the re!ed of the seller is to e:act fulfill!ent or, in case of a substantial breach, torescind the contract under &rticle +++ of the "ivil "ode.4)Ho%ever, failure to pa isnot even a breach, but !erel an event %hich prevents the vendor)s obli#ation toconve title fro! ac*uirin# bindin# force. 4*

Petitioner also ar#ues that Respondent "ourt violated evidentiar rules in upholdin# therulin# of the Director of 5ands that petitioner did not present evidence to sho% privaterespondent)s failure to pa hi!. Ae disa#ree. Prior to the a!end!ent of the rules onevidence on March +8, +, Section +, Rule ++, states that each part !ust provehis or her o%n affir!ative alle#ations.44Thus, the burden of proof in an cause restedupon the part %ho, as deter!ined b the pleadin#s or the nature of the case, assertsthe affir!ative of an issue and re!ains there until the ter!ination of theaction.45&lthou#h nonpa!ent is a ne#ative fact %hich need not be proved, the part

see0in# pa!ent is still re*uired to prove the e:istence of the debt and the fact that it isalread due.46

Petitioner sho%ed the e:istence of the obli#ation %ith the presentation of the contracts,but did not present an evidence that he de!anded pa!ent fro! private respondent.The de!and letters dated 7anuar 1 and >, +-8 9?:hs. F7F and F@F;, adduced inevidence b petitioner, %ere for the pa!ent of bac0 rentals, da!a#es toi!prove!ents and rei!burse!ent of ac*uisition costs and realt ta:es, not pa!entarisin# fro! the contract to sell.

Thus, %e cannot fault Respondent "ourt for adoptin# the findin# of the Director of5ands that petitioner Foffered no evidence to support his clai! of nonpa!ent beondhis o%n selfCservin# assertions,F as he did not even de!and Fpa!ent, orall or in

%ritin#, of the five thousand 9P>,222.22; pesos %hich %as supposed to be due hi!since &u#ust +-, +>2, the date %hen the order of a%ard %as issued to Nasipit, and%hen his cause of action to recover pa!ent had accrued.F Nonpa!ent of theconsideration in the contracts to sell or the deed of relin*uish!ent %as raised for thefirst ti!e in the protest filed %ith the /ureau of 5ands on 7anuar +, +-8. /ut thisprotest letter %as not the de!and letter re*uired b la%.

Petitioner alle#es that the assi#n!ent of credit and the letter of the for!er field!ana#er of private respondent are conte!poraneous and subse*uent acts revealin#the nonpa!ent of the consideration. He !aintains that the P+1,222.22 credit assi#nedpertains to the P>,222.22 and P-,222.22 initial pa!ents in the Dece!ber -, +8

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ree!ent, because the balance of P+1,222.22 %as not et Fdue and accruin#.F This isconsistent, he ar#ues, %ith the representation that private respondent %as notinterested in filin# a sales application over the land in issue and that Nasipit %asinstead supportin# petitioner)s application thereto in Mear)s letter to the Director of5ands dated Bebruar 11, +>2 9?:h. FJF;47

This ar#u!ent is too strained to be acceptable. The assi#n!ent of credit did notestablish the nondeliver of theseinitialpa!ents of the total consideration. First, theassi#n!ent of credit happened on 7anuar +, +8, or a !onth after the si#nin# of theDece!ber -, +8 ree!ent and al!ost si: !onths after the 7ul -, +8 ree!entto Sell. Second, it does not overco!e the recitation in the ree!ent of Dece!ber -,+86 F. . . a; The a!ount of S?V?N THO@S&ND 9P-,222.22; P?SOS has alreadbeen paid b the Second Part to the Birst Part upon the e:ecution of the ree!entto Sell, on 7ul -, +8' b; The a!ount of BIV? THO@S&ND 9P>,222.22; P?SOS shallbe paid upon the si#nin# of this present a#ree!ent' . . . . F

&side fro! these facts, the Director of 5ands found evidence of #reater %ei#ht sho%in#that pa!ent %as actuall !ade64+

. . . 9T;here is stron# evidence to sho% that said . . . 9P+1,222.22; had beenpaid b N&SIPIT to ?d%ard 7. Nell "o!pan b virtue of the Deed of&ssi#n!ent of "redit e:ecuted b Villaflor 9?:h. F8+ N&5"OF; for the credit ofthe latter.

&tt. 3abriel /anaa#, resident counsel of N&SIPIT . . . declared that it %as he%ho notari$ed the Free!ent to SellF 9?:h. FBF;' . . . that subse*uentl, in7anuar +8, Villaflor e:ecuted a Deed of &ssi#n!ent of credit in favor of?d%ard 7. Nell "o!pan 9?:h. F8+ N&5"OF; %hereb Villaflor ceded to thelatter his receivable for N&SIPIT correspondin# to the re!ainin# balance inthe a!ount of . . . 9P+1,222.22; . . . of the total consideration . . . . ' He furthertestified that the said assi#n!ent . . . %as co!!unicated to N&SIPIT undercover letter dated 7anuar 18, +8 9?:h. F8+C&F; and not lon# thereafter, b

virtue of the said assi#n!ent of credit, N&SIPIT paid the balance . . . to?d%ard 7. Nell "o!pan 9p. >, ibid;. &tt. /anaa#)s aforesaid testi!onstand unrebutted' hence, !ust be #iven full %ei#ht and credit.

::: ::: :::

The Director of 5ands also found that there had been pa!ent of the consideration inthe relin*uish!ent of ri#hts649

On the other hand, there are stron# and co!pellin# reasons to presu!e thatVillaflor had alread been paid the a!ount of Bive Thousand 9P>,222.22;Pesos.

Birst, . . . Ahat is surprisin#, ho%ever, is not so !uch his clai!s consistin# of#i#antic a!ounts as his havin# for#otten to adduce evidence to prove his

clai! of nonCpa!ent of the Bive Thousand 9P>,222.22; Pesos durin# theinvesti#ation proceedin#s %hen he had all the ti!e and opportunit to doso. . . . . The fact that he did not adduce or even atte!pt to adduce evidencein support thereof sho%s either that he had no evidence to offer of thatN&SIPIT had alread paid hi! in fact. Ahat is %orse is that Villaflor did noteven bother to co!!and pa!ent, orall or in %ritin#, of the Bive Thousand9P>,222.22; Pesos %hich %as supposed to be due hi! since &u#ust +-, +>2,the date %hen the order of a%ard %as issued to Nasipit, and %hen his causeof action to recover pa!ent had accrued. The fact that he onl !ade aco!!and for pa!ent on 7anuar +, +-8, %hen he filed his protest ort%entCfour 918; ears later is i!!ediatel nu#ator of his clai! for nonCpa!ent.

/ut Villaflor !aintains that he had no 0no%led#e or notice that the order ofa%ard had alread been issued to N&SIPIT as he had #one to Indonesia andhe had been absent fro! the Philippines durin# all those t%entCfour 918;ears. This of course ta:es credulit. . . .

. . . It is !ore in 0eepin# %ith the ordinar course of thin#sthat he should have ac*uired infor!ation as to %hat %astranspirin# in his affairs in Manila . . . .

Second, it should be understood that the condition that N&SIPIT shouldrei!burse Villaflor the a!ount of Bive Thousand 9P>,222.22; Pesos upon itsreceipt of the order of a%ard %as fulfilled as said a%ard %as issued toN&SIPIT on &u#ust +-, +>2. The said deed of relin*uish!ent %as prepared

and notari$ed in Manila %ith Villaflor and N&SIPIT si#nin# the instru!ent alsoin Manila. No%, considerin# that Villaflor is presu!ed to be !ore assiduous infollo%in# up %ith the /ureau of 5ands the e:peditious issuance of the order ofa%ard as the 9consideration; %ould depend on the issuance of said order toa%ard N&SIPIT, %ould it not be reasonable to believe that Villaflor %as at hand%hen the a%ard %as issued to N&SIPIT on &u#ust +-, +>2, or barel a da%hich he e:ecuted the deed of relin*uish!ent on &u#ust +4, +>2, inManila . . . .

Third, on the other hand, N&SIPIT has in his possession a sort of ForderF uponitself 9the deed of relin*uish!ent %herein he9sic; obli#ated itself to

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rei!burse or pa Villaflor the . . . consideration of the relin*uish!ent upon itsreceipt of the order of a%ard; for the pa!ent of the aforesaid a!ount the!o!ent the order of a%ard is issued to it. It is reasonable to presu!e thatN&SIPIT has paid the 9consideration; to Villaflor.

::: ::: :::

. . . 9I;t %as virtuall i!possible for N&SIPIT, after the lapse of the intervenin#18 ears, to be able to cope up %ith all the records necessar to sho% that theconsideration for the deed of relin*uish!ent had been full paid. To e:pectN&SIPIT to 0eep intact all records pertinent to the transaction for the %hole*uarter of a centur %ould be to re*uire %hat even the la% does not. Indeed,even the applicable la% itself 9Sec. -, National Internal Revenue "ode;re*uires that all records of corporations be preserved for onl a !a:i!u! offive ears.

N&SIPIT !a %ell have added that at an rate %hile there are transactions%here the proper evidence is i!possible or e:tre!el difficult to produce afterthe lapse of ti!e . . . the la% creates presu!ptions of re#ularit in favor ofsuch transactions 912 &!. 7ur. 11; so that %hen the basic fact is establishedin an action the e:istence of the presu!ed fact !ust be assu!ed b force ofla%. 9Rule +, @nifor! Rules of ?vidence' Ai#!ore, Sec. 18+;.

The "ourt also notes that Mear)s letter of Bebruar 11, +>2 %as sent si: !onths priorto the e:ecution of the deed of relin*uish!ent of ri#ht. &t the ti!e of its %ritin#, privaterespondent had not perfected its o%nership of the land to be able to *ualif as a salesapplicant. /esides, althou#h he %as a part to the 7ul -, +8 ree!ent to Sell,Mear %as not a si#nator to the Deed of Relin*uish!ent or to the Dece!ber -, +8ree!ent to Sell. Thus, he cannot be e:pected to 0no% the e:istence of and thea!end!ents to the later contracts. These circu!stances e:plain the !ista0enrepresentations, not !isrepresentations, in said letter.

Lac, o" Notice o" the Award

Petitioner insists that private respondent suppressed evidence, pointin# to his nothavin# been notified of the Order of &%ard dated &u#ust +-, +>2. 5&t the botto! ofpa#e 1 of the order, petitioner %as not listed as one of the parties %ho %ere to befurnished a cop b Director of 5ands 7ose P. Dans. Petitioner also posits that Public5and Inspector Sulpicio &. Tae$a irre#ularl received the copies for both privaterespondent and the cit treasurer of /utuan "it. The lac0 of notice for petitioner can beeasil e:plained. Plainl, petitioner %as not entitled to said notice of a%ard fro! theDirector of 5ands, because b then, he had alread relin*uished his ri#hts to thedisputed land in favor of private respondent. In the headin# of the order, he %as

referred to as sales applicantCassi#nor. In para#raph nu!ber 8, the order stated that,on &u#ust +4, +>2, he relin*uished his ri#hts to the land sub(ect of the a%ard toprivate respondent. Bro! such date, the sales application %as considered to be a!atter bet%een the /ureau of 5ands and private respondent onl. "onsiderin# thesefacts, the failure to #ive petitioner a cop of the notice of the a%ard cannot beconsidered as suppression of evidence.51Burther!ore, this order %as in fact available

to petitioner and had been referred to b hi! since 7anuar +, +-8 %hen he filed hisprotest %ith the /ureau of 5ands.5)

Third (ssue6 Pri+ate Respondent 0uali"ied"or an Award o" Public Land

Petitioner asserts that private respondent %as le#all dis*ualified fro! ac*uirin# theparcels of land in *uestion because it %as not authori$ed b its charter to ac*uiredisposable public a#ricultural lands under Sections +1+, +11 and +1 of the Public5and &ct, prior to its a!end!ent b P.D. No. -4. Ae disa#ree. The re*uire!ents for asales application under the Public 5and &ct are6 9+; the possession of the *ualificationsre*uired b said &ct 9under Section 1; and 91; the lac0 of the dis*ualifications!entioned therein 9under Sections +1+, +11, and +1;. Ho%ever, the transfer of

o%nership via the t%o a#ree!ents dated 7ul - and Dece!ber -, +8 and therelin*uish!ent of ri#hts, bein# private contracts, %ere bindin# onl bet%een petitionerand private respondent. The Public 5and &ct finds no relevance because the disputedland %as covered b said &ct onl after the issuance of the order of a%ard in favor ofprivate respondent. Thus, the possession of an dis*ualification b private respondentunder said &ct is i!!aterial to the private contracts bet%een the parties thereto. 9Aeare not, ho%ever, su##estin# a departure fro! the rule that la%s are dee!ed %ritten incontracts.; "onsideration of said provisions of the &ct %ill further sho% theirinapplicabilit to these contracts. Section +1+ of the &ct pertains to ac*uisitions ofpublic land b a corporation fro! a #rantee, but petitioner never beca!e a #rantee ofthe disputed land. On the other hand, private respondent itself %as the direct #rantee.Sections +11 and +1 dis*ualif corporations, %hich are not authori$ed b their charter,fro! ac*uirin# public land' the records do not sho% that private respondent %as not so

authori$ed under its charter.

&lso, the deter!ination b the Director of 5ands and the Minister of Natural Resourcesof the *ualification of private respondent to beco!e an a%ardee or #rantee under the&ct is persuasive on Respondent "ourt. In Espinosa +s.Ma,alintal,5*the "ourt ruledthat, b la%, the po%ers of the Secretar of riculture and Natural Resourcesre#ardin# the disposition of public lands includin# the approval, re(ection, andreinstate!ent of applications are of e:ecutive and ad!inistrative nature. 9Suchpo%ers, ho%ever, do not include the (udicial po%er to decide controversies arisin# fro!disa#ree!ents in civil or contractual relations bet%een the liti#ants.; "onse*uentl, thedeter!ination of %hether private respondent is *ualified to beco!e an a%ardee ofpublic land under ".&. +8+ b sales application is included therein.

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&ll told, the onl dis*ualification that can be i!puted to private respondent is theprohibition in the +- "onstitution a#ainst the holdin# of alienable lands of the publicdo!ain b corporations.54Ho%ever, this "ourt earlier settled the !atter, rulin# that saidconstitutional prohibition had no retroactive effect and could not prevail over a +estedri#htto the land. InAo# +s. Cusi$ %r.,55this "ourt declared6

Ae hold that the said constitutional prohibition has no retroactive applicationto the sales application of /ian Develop!ent "o., Inc. because it had alreadac*uired a vested ri#ht to the land applied for at the ti!e the +- "onstitutiontoo0 effect.

That vested ri#ht has to be respected. It could not be abro#ated b the ne%"onstitution. Section 1, &rticle JIII of the +> "onstitution allo%s privatecorporations to purchase public a#ricultural lands not e:ceedin# one thousandand t%entCfour hectares. Petitioner)s prohibition action is barred b thedoctrine of vested ri#hts in constitutional la%.

F& ri#ht is vested %hen the ri#ht to en(o!ent has beco!e the propert ofso!e particular person or persons as a present interest.F 9+4 ".7.S. ++-;. Itis Fthe privile#e to en(o propert le#all vested, to enforce contracts, anden(o the ri#hts of propert conferred b e:istin# la%F 9+1 ".7. >>, Note 84,No. 4; or Fso!e ri#ht or interest in propert %hich has beco!e fi:ed andestablished and is no lon#er open to doubt or controversF 9Do%ns vs. /lount,+-2 Bed. +>, 12, cited in /alboa vs. Barrales, >+ Phil. 8, >21;.

The due process clause prohibits the annihilation of vested ri#hts. F& state!a not i!pair vested ri#hts b le#islative enact!ent, b the enact!ent or bthe subse*uent repeal of a !unicipal ordinance, or b a chan#e in theconstitution of the State, e:cept in a le#iti!ate e:ercise of the police po%erF9+4 ".7.S. ++--C-;.

It has been observed that, #enerall, the ter! Fvested ri#htF e:presses theconcept of present fi:ed interest, %hich in ri#ht reason and natural (usticeshould be protected a#ainst arbitrar State action, or an innatel (ust ani!perative ri#ht %hich an enli#htened free societ, sensitive to inherent andirrefra#able individual ri#hts, cannot den 9+4 ".7.S. ++-8, Note -+, No. >,citin# Pennslvania 3rehound 5ines, Inc. vs. Rosenthal, +1 &tl. 1nd >-;.

Secretar of 7ustice &bad Santos in his +- opinion ruled that %here theapplicant, before the "onstitution too0 effect, had full co!plied %ith all hisobli#ations under the Public 5and &ct in order to entitle hi! to a sales patent,there %ould see! to be no le#al or e*uitable (ustification for refusin# to issueor release the sales patent 9p. 1>8, Rollo;.

In Opinion No. +82, series of +-8, he held that as soon as the applicant hadfulfilled the construction or cultivation re*uire!ents and has full paid thepurchase price, he should be dee!ed to have ac*uired b purchase theparticular tract of land and to hi! the area li!itation in the ne% "onstitution%ould not appl.

In Opinion No. +>, series of +-4, Secretar &bad Santos held that %herethe cultivation re*uire!ents %ere fulfilled before the ne% "onstitution too0effect but the full pa!ent of the price %as co!pleted after 7anuar +-, +-,the applicant %as, nevertheless, entitled to a sales patent 9p. 1>4, Rollo;.

Such a conte!poraneous construction of the constitutional prohibition b ahi#h e:ecutive official carries #reat %ei#ht and should be accorded !uchrespect. It is a correct interpretation of section ++ of &rticle JIV.

In the instant case, it is incontestable that prior to the effectivit of the +-"onstitution the ri#ht of the corporation to purchase the land in *uestion hadbeco!e fi:ed and established and %as no lon#er open to doubt orcontrovers.

Its co!pliance %ith the re*uire!ents of the Public 5and 5a% for the issuanceof a patent had the effect of se#re#atin# the said land fro! the public do!ain.The corporation)s ri#ht to obtain a patent for that land is protected b la%. Itcannot be deprived of that ri#ht %ithout due process 9Director of 5ands vs. "&,+1 Phil. +;.

The Minister of Natural Resources ruled, and %e a#ree, that private respondent %assi!ilarl *ualified to beco!e an a%ardee of the disputed land because its ri#hts to itvested prior to the effectivit of the +- "onstitution656

5astl, appellee has ac*uired a vested ri#ht to the sub(ect area and, therefore,

is dee!ed not affected b the ne% constitutional provision that no privatecorporation !a hold alienable land of the public do!ain e:cept b lease.

It !a be recalled that the Secretar of 7ustice in his Opinion No. 48, series of+-, had declared, to %it6

On the other hand, %ith respect to sales application readfor issuance of sales patent, it is ! opinion that %here theapplicant had, before, the constitution too0 effect, fullco!plied %ith all his obli#ations under the Public 5and act inorder to entitle hi! to sales patent, there %ould see! to be

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not le#al or e*uitable (ustification for refusin# to issue orrelease the sales patent.

I!ple!entin# the afor