THE PHILIPPINE SUGAR ESTATES DEVELOPMENT COMPANY, LTD., INC., PLAINTIFF AND APPELLEE, VS. CIPRIANO E. UNSON, SECRETARY OF COMMERCE AND COMMUNICATIONS, AND A. D. WILLIAMS, DIRECT…

It appears from the record: That the parcel of land involved in this
complaint was a part of the friar lands purchased by the Government of
the Philippine Islands from the religious corporations and sold to the
occupants thereof, and to other entities and persons; that “El Real”
canal involved in this complaint forms a part of the irrigation system
of the friar lands; that on August 23, 1921, the plaintiff applied to
the Director of Lands for permission to install a turbine which is the
subject matter of this case, in “El Real” canal for electric power
development purposes for its sugar central located in the place called
Real, within the jurisdiction of Calamba, Laguna; that the Director of
Lands granted said permission applied for, but on November 23, 1925
revoked the permission granted on September 21, 1921, suggesting that
the plaintiff obtain another permit from the Secretary of Commerce and
Communications, through the Director of Public Works, in accordance
with the provisions of Act No. 2152, as amended by Acts Nos. 2652 and
3208; that in or about the month of May, the defendants attempted to
prevent the use of the waters in said canal and the working of said
turbine, thus compelling the plaintiff to apply to the Director of
Public Works for authorization for such use under the provisions of the
Irrigation Act; and that the plaintiff, believing itself entitled to
use the waters in “El Real” canal in Calamba, Laguna, for irrigation
purposes and to maintain the turbine at present established therein
without having to resort to the provisions of the Irrigation Act,
instituted the present action.

The court below rendered judgment holding that the plaintiff is
entitled to locate and maintain the turbine in question in the canal
called “El Real” where it has been located, without the need of
obtaining permission from the Director of Public Works, stating the
grounds of said judgment in the following terms:

“The whole question in this case is whether the
plaintiff is entitled to maintain the turbine it has placed in the
canal called ‘El Rear shown on plan Exhibit 2, without obtaining the
permission of the Director of Public Works.

“The question is
determined by the Torrens title to the land, wherein it appears that
the Court of Land Registration, in view of the facts it found and of an
agreement between the plaintiff and the Government of the Philippine
Islands, deliberately decreed the registration of all the lot described
in Exhibit 2, in the name of the plaintiff, considering it only as a
lien that the Government and its successors were entitled to share with
the plaintiff the use of the waters that ran through the canal,
according to the laws and customs in the Philippines in the year 1898,
as per agreement of the parties in the preliminary contract of December
22, 1903, and that the Government or its successors would have a right
of way over the land for the purpose solely of repair, preservation,
maintenance and improvement of said canal. If the Government has
expressly recognized the plaintiff’s right to use the waters running
through the canal, without limiting the nature of the use they may be
put to, and if, moreover, the whole canal belongs to the plaintiff as
an integral part of the lot, and if, lastly, the whole right of the
Government and its successors is an easement of waters, it seems
evident that the plaintiff may locate and maintain the turbine in
question at the place where it was placed in said canal, within said
lot, without the necessity of obtaining permission from the Director of
Public Works.

“The easement in favor of the Government and
its successors is only for the use of the waters running through this
canal, for the irrigation of the lands to the east of the land in plan
Exhibit 2, and the turbine installed does not in any way prejudice the
irrigation of the lands below. In fact there can be no dispute on this
point, for the Director of Lands, who is in charge of the irrigation
system of the Calamba Estate, has given his permanent consent in the
letter of September 21, 1921 (Exhibit B), although four years later, he
revoked the permission, believing that the matter fell under the
jurisdiction of the Director of Public Works, and for no other reason.
(Exhibit C.)

“The letter Exhibit A is not a sufficient ground
for alleging estoppel, because, the Government being a co-participant
in the use of the water, nothing could be more natural than to obtain
the consent of the branch of the Government in charge of the
administration of the irrigation system of which the canal is a part,
and because neither the letter nor any other evidence has shown that
the Government has acted with prejudice to itself by reason of said
letter.”

From this judgment, the defendants appealed, and now allege that the
trial court erred: (1) In not finding: that “El Real” canal is a part
of the irrigation system of the Calamba Estate, owned by the Government
of the Philippine Islands; (2) in not finding that the plaintiff is
estopped from denying the ownership and right of the Government to
exclusively control, regulate, and grant permission for the use of the
waters of “El Real” canal, for irrigation and power development
purposes; (3) in finding that under the agreement registered in the
plaintiff’s certificate of title described in the complaint, the said
plaintiff is entitled to the free use of the waters in “El Real” canal,
without being subject to the provisions of Act No. 2152, as amended;
and (4) in rendering judgment in favor of the plaintiff and against the
defendants, and in denying the defendants’ motion for a new trial.

As we have said, the land on which the canal in question was
constructed, forms part of the lands which the plaintiff company
reserved to itself in selling the so-called Friar Lands to the
Government of the Philippine Islands, Exhibit 2, and it should be noted
that, according to the contract of sale and conveyance executed by the
Philippine Sugar Estates Development Company, Ltd., Inc., in favor of
the Government of the Philippine Islands, Exhibit 4, “the reservation
of any of these parcels (the lands reserved) shall not include the
reservoir of the estate, and shall not be used by the Philippine Sugar
Estates Development Co., Inc., nor by any successor in the title to the
property, to the prejudice of the Government of the Philippine Islands,
or of any successor in the ownership of the lands hereby conveyed, in
so far as relates to the use of its water and the present irrigation
system, which shall continue for the benefit of both parties in
accordance with the laws and customs prevailing in the Philippines in
1898.” And in registration proceeding No. 9933, the Philippine Sugar
Estates Development Co., Ltd., applicant, the latter and the Director
of Lands, as oppositor, entered into a written agreement, attached to
that record, and quoted in the decision of the Court of Land
Registration, as follows:

“It is hereby covenanted and agreed by and between
the applicant and the Government of the Philippine Islands, through
their respective attorneys in the above-entitled case:

“1.
That the waters in a canal passing through the parcel of land
denominated ‘Real,’ described in the plan 11-7556, Exhibit C of the
applicant, and which irrigate the lands situated to the east of said
parcel, must and shall be used by and for the benefit of both the
corporation ‘Philippine Sugar Estates Development Co., Ltd.’ or its
successors, and the Government of the Philippine Islands or its
successors, in accordance with the laws and customs in the Philippine
Islands in 1898, according to the agreement in the preliminary contract
of December 22, 1903 between said corporation and the Government of the
Philippine Islands; provided, that the Government of the Philippine
Islands or its successors shall be entitled to a right of way through
this parcel, solely for the purpose of the repair, preservation,
maintenance, and improvement of said canal.”

These agreements were made an integral part of the decree of
adjudication and of the certificate of title in favor of the plaintiff.
(Exhibit 3.)

According to the evidence of record, it seems clear to us that “El
Real” canal in which the turbine in question was built, is part of the
irrigation system of the Calamba Estate, purchased by the Government of
the Philippine Islands, and we are likewise of opinion that the
Government has control of said canal so that, according to the title of
said plaintiff, the Government of the Philippine Islands or its
successors has or have a right of way through this parcel described in
Exhibit 2, only for the purpose of repair, preservation, maintenance,
and improvement of said canal. It seems unnecessary to indulge in a
long discussion in order to reach the conclusion that said canal
belongs to the Government, it being understood in the plaintiff’s own
title that the Government is bound to repair, preserve, maintain, and
improve said canal, for the simple reason that, if the canal belonged
to another person, the Government would not assume the responsibility
of making the necessary repairs and taking charge of the preservation,
maintenance, and improvement thereof.

With regard to the waters in “El Real” canal, we believe that
according to the terms of the aforementioned contract of sale, and more
concretely, according to the plaintiff’s certificate of title, said
waters “must and shall be used by and for the benefit of both the
corporation Philippine Sugar Estates Development Co., Ltd., or its
successors, and the Government of the Philippine Islands or its
successors, in accordance with the laws and customs in the Philippine
Islands in 1898.” The provisions of the Law of Waters of 1866 which was
in force then, pertinent to the case, are contained in articles 266 and
267 of said law, and are as follows:

“ART. 266. The power to grant permission to operate,
near the banks of rivers, whether navigable or floatable, or not, mills
or other industrial contrivances in buildings there erected, to which
the necessary water is to be conveyed through artificial channels, said
water afterwards reincorporating itself with the main streams, shall
lie within the province of the Governor. Before granting such
permission, the complete plans of the works shall be filed and given
due publicity, and an investigation of record shall be made, in the
course of which the owners of dams near by, both higher up and lower
down the stream, shall be cited. In no case shall this permission be
granted to the prejudice of existing industrial establishments or of
the navigation or floatation of the river.

“ART. 267. Before
water running through a canal or irrigating ditch belonging to a
community of irrigators may be used as a motive power for any
stationary mechanism permission therefor must be obtained from such
community. For this purpose the members shall be called together in a
general meeting, at which the Vote of a majority of those present shall
be binding, the majority to be computed on the basis of the property
that each one represents. If the permission should be refused, an
appeal shall lie to the Governor, who, after hearing the irrigators,
the Engineer of the Province, and the Provincial Council, may grant the
privilege, provided it does not injure the irrigation interests or
other industries, and the community of irrigators do not themselves
wish to make use of the motive power; in the latter event they shall
have the preference, but with the obligation of beginning the work
within one year.”

Admitting that the plaintiff and the Government of the Philippine
Islands or its successors form an irrigation community, and supposing
said community to be the owner of the canal in question, the plaintiff,
according to article 267, cannot make use of the waters that run
through “El Real” canal by means of a turbine, without the permission
of the Government. Considering that the Government acquired control of
“El Real” canal by virtue of a contract of sale on December 22, 1903,
the plaintiff, a fortiori, must obtain permission from the Government.
Moreover, that the provisions of the Law of Waters quoted above were
modified by Act No. 2152, that is, the Irrigation Act, passed on
February 6, 1912, is very clear. Section 14 of said Act provides that
any person thereafter desiring to appropriate or make use of public
waters should first make an application to the Secretary of Commerce
and Police through the Director of Public Works.

It is true that according to the certificate of title of the
plaintiff, the waters running through “El Real” canal were to be used
by and for the benefit of the plaintiff or its successors, as well sl»
by the Government of the Philippine Islands or its successors; but it
appears in the said certificate of title that such use is to be in
harmony with the laws and customs in the Philippine Islands in the year
1898, according to the agreement in the preliminary contract dated
December 22, 1903, by and between said corporation and the Government
of the Philippine Islands; or, more specifically, in accordance with
section 14 of the Irrigation Act, which modified said provision of the
Law of Waters.

In reaching this conclusion, we are aware of section 50 providing
that this act shall not work to the detriment of rights acquired prior
to its passage. And the plaintiff having acquired the right to use the
waters of “El Real” canal jointly with the Government of the Philippine
Islands or its successors before the passage of the Irrigation Act, we
believe the provisions thereof with respect to the rental to be paid by
the appropriates (sections 21 and 22, Act No. 2152) are not binding on
the plaintiff.

By virtue of the foregoing, the judgment appealed from should be, as
it is hereby, reversed, and the defendants absolved from the complaint,
which is hereby dismissed, without special pronouncement as to costs.
So ordered,

Avanceña, C. J., Johnson, Street, Johns, Romualdez, and Villa-Real, JJ., concur.