CITY OF CEBU, PLAINTIFF AND APPELLANT, VS. EMILIO PADILLA, ET AL., DEFENDANTS AND APPELLEES.

It has been the long-standing policy of the Government to put lands of the
public domain to effective use for the good of the public. In pursuance of this
policy, laws, rules and regulations have been adopted, laying down the steps by
which such purpose may be effectively carried out.

On February 28, 1939 Juan
Padilla filed with the Bureau of Lands Homestead Application No. V-6992 over a
parcel of land, now Lot No. 3986 of the Cebu Cadastre,
situated in Mambaling, City of Cebu, with an area of 53,773 square meters. Since February 4, 1936, he has occupied 2.76
hectares of the northern part of said lot as grantee of Nipa-Bacauan Plantation Permits No. 63 issued by the Bureau
of Forestry. The Bureau of Lands approved the application for homestead on
March 17, 1949. Padilla made
the required improvements on the land and presented the final proof of
occupation and. cultivation pursuant to Sec. 14 of Commonwealth Act 141. On
December 16, 1952, the
Director of Lands ordered the issuance of a homestead patent in his favor.

South of Juan Padilla’s Nipa-Bacauan Plantation,
but within Lot No. 3986, Tranquilino Quijano operated a salt-work of 2.09 hectares under Saltwork Lease Agreement No. 115 with the Bureau of
Forestry. Quijano’s lease dated to as far back as
June 21, 1932. On June 2, 1941 he assigned the lease to
the City of Cebu which intended to erect a market
and a slaughterhouse on the land. On June 23, 1941 the Bureau of Forestry issued Gratuitous
Permit No. 1 to the City of Cebu and the latter periodically
renewed it, the last renewal being on June 30, 1953, for the period ending June 30, 1955.

In November 1941 the City of Cebu contracted with Engineer Luis
Regner for the construction of a slaughterhouse at the
site covered by Gratuitous Permit No. 1. In preparation for the construction,
lumber and other construction materials were hauled to the site. However, World
War II broke out before construction could commence.

After liberation or specifically on October 25, 1951 the municipal board of
Cebu
City passed Resolution No. 681
abandoning the slaughterhouse project on the ground that it “would be
impractical and expensive” and “would endanger the health of the persons living
in the community”. In 1954, however, said municipal board passed Resolutions
Nos. 806 and 1119 requesting the President of the Philippines “to proclaim Lot
No. 3986, Swo 22654, situated in the Barrio of Mambaling, City of Cebu,
containing an area of 53,772 square meters as a permanent reservation site of
the City of Cebu for an abattoir, city pound,
stockyard and veterinary center”.

Juan Padilla died on December 10, 19-16. His heirs, Emilio and Alberto
Padilla, inherited his homestead. They filed on August 5, 1954 a petition with the Bureau of Forestry to
cancel Gratuitous Permit No. 1 on the ground that the same covered land within
their homestead. On May 12,
1955 the Director of Forestry denied the petition, stating that the
aforesaid homestead fell within forest zone, and ordered the Padillas to vacate the premises and remove their
improvements therefrom. The Padillas appealed to the Secretary of Agriculture and
Natural Resources, but the Director of Forestry was sustained.

Whereupon, on October 11,
1955, the Padillas filed in the Court of
First Instance of Cebu a
petition for certiorari (Case No. R-4233) seeking review of the Director of
Forestry’s decision of May 12,
1955 and the order of the Secretary of Agriculture and Natural
Resources affirming it, dated August 1,
1955. However, this case was dismissed because on October 21, 1955 the Secretary set
aside his order dated August 1,
1955. On September 9,
1957 the City of Cebu filed with the Secretary a
motion for reconsideration of the latter’s new order.

The Padillas also filed a petition for mandamus
(Civil Case No. R-4041) on May 31, 1955, in the Court of First Instance of Cebu against the Director of Lands, compelling him to issue
the homestead patent over Lot No. 3986 in their favor as ordered on December 16,
1952. The City of Cebu tried, but failed, to intervene.
The petition for mandamus was granted. The Director of Lands appealed but later
withdrew his appeal. Nonetheless, the patent has not been issued.

On March 3, 1956 the City
of Cebu
filed with the Secretary of Agriculture and Natural Resources a motion for the
reconsideration of the order of December 16, 1952 directing the issuance of a homestead
patent in favor of Juan Padilla. Furthermore, the City of
Cebu filed
a complaint in the Court of First Instance of Cebu to
declare null and void the decision in Civil Case No. R-4011 (Mandamus) ; the
order of the Director of Lands for the issuance of homestead patent in favor of
Padilla; the patent itself, if issued; and the orders and decisions of the
Secretary of Agriculture and Natural Resources and the Director of Lands in
favor of the Padillas. It also asked for possession of
Lot No. 3986, reimbursement of expenses, damages and costs. The Padillas were included as parties
defendants. Subsequently, the City of Cebu amended its complaint by further
alleging that its motions for reconsideration had not yet been acted upon by the
Secretary of Agriculture and Natural Resources. The Padillas moved to dismiss the complaint for lack of cause of
action, stating that it was prematurely filed. The court granted the motion and
dismissed the complaint.

The City of Cebu appealed and the case was
elevated to the Court of Appeals. On September 18, 1961, however, the City of
Cebu moved
in said court for the confirmation of an agreement it had entered into with the
Padiltas. The terms of the agreement are embodied in
Resolution No. 823 of the municipal board, reading as follows:

“Resolved, That the Municipal Board, Cebu City,
confirming the letter of the Chairman, Cebu City
Planning Board, dated April 14, 1961, addressed to Mr. Alberto Padilla, would
interpose no objection to the granting of title to a portion or portions of that
tract of land known, us Lot No. 3986 located at Spolarium-Kinalumsan River, Cebu
City, provided that the other portion or areas thereof marked and set aside as
site (1) for the proposed City Abattoir, (2) for the proposed extension of
Salvador Street, and (3) for the proposed channelization of Kinalumsan River
be first excluded from the said title that may be so granted, in view of the
fact that said lot is included in the Neighborhood Development Plan, Scheme-C,
as per Resolution No. 20, dated November 4, 1960, of the Cebu City Planning Board; and provided further that a
separate title or title should first be issued to the City of Cebu covering each of the areas desired and set aside as
site for the proposed City Abattoir, extension of Salvador Street, and channelization of Kinalumsan River
above mentioned;

“Resolved Further, That a copy of this Resolution be furnished the Director
of Lands, Manila, with the pertinent plan duly approved by the proper
authorities in Manila showing the site for the proposed City Abattoir, extension
of Salvador Street, and the channelization of Kinalumsan River aforesaid; and another copy thereof be
furnished Mr. Alberto Padilla, Taboc-canal, Pardo, Cebu
City.”

and in a public document signed by the Padilla
brothers, quoted hereunder;

“KNOW ALL MEN BY THESE PRESENTS:

“We, Emilio Padilla and Alberto Padilla, both Filipinos, of age, married and
residents of Mambaling, Cebu
City, do hereby known to the Municipal Board of Cebu
City that we agree and consent to the proposals and terms embodied in Resolution
No. 823 of the Municipal Board and request that this manifestation of our
approval in conformity to the said terms and conditions of the proposal in
Resolution No. 823 be noted, subject to the rules, laws, regulations and just
determinations by the Director of Lands in cases of this nature, Cebu City, July 26, 1961″

On this motion for confirmation of agreement, the Solicitor General, acting
in behalf of the Director of Lands and the Secretary of Agriculture and Natural
Resources, manifested that he would interpose no objection to the agreement
provided that the City of Cebu be issued no title to
the excluded sites, on the ground that they are public land and the City of
Cebu had not filed an application to acquire title
thereto.

Cebu
City thereupon stated that should the
objection of the Solicitor General be considered as tenable, it could have no
alternative but to insist that the case be decided on the merits. The Padillas, on the other hand, prayed for judgment in
accordance with the motion for confirmation leaving out the portion objected to
by the Solicitor General. The Court of Appeals desisted from acting on the
aforesaid motion; instead, it forwarded the case to this Court as involving a
question of law.

The City of Cebu interposes no objection to the
granting of patent over Lot No. 3986, provided the three sites already mentioned
be excluded from the patent and a separate title thereto be first issued in its
favor. Such proposal was accepted by the Padillas
“subject to the rules, laws, regulations and just determinations of the Director
of Lands”. Subsequently, both parties asked for judgment based on their
agreement.

Under pertinent laws, rules and regulations, the City of
Cebu
cannot be given a title over the three sites aforementioned as it has not
previously taken proper steps to acquire title thereto.

Obviously, the agreement of the City of Cebu and the Padillas should be construed in the light of existing laws,
rules and regulations. We specifically refer to Section 83 of the Public Land
Law which the City of Cebu can avail of by resolution of
its municipal board requesting the Secretary of Agriculture and Natural
Resources to recommend a proclamation by the President of the
Philippines
withdrawing from sale or settlement and reserving for its use, the three sites
aforementioned. Such prerequisites under the law should be followed before the
City of Cebu may be granted exclusive use of the sites
in question; that is precisely what the Padillas, in
conforming to the terms of the agreement, must have had in mind when they
specifically stated, “subject to the rules, laws, regulations and just
determinations by the Director of Lands in cases of this nature.”

We observe that in 1954, the City of Cebu, per Resolutions Nos. 806 and
1119 of the municipal board, requested the President of the
Philippines to
reserve the lot in question for its exclusive use. The records do not show,
however, any action taken thereon by the President. It is not hard to see why
Lot No. 3986 was not reserved for the City of Cebu as requested by said
resolutions: Lot 3986 was being claimed by the Padillas. The confirmation of the agreement between the City
of Cebu
and the Padillas will pave the way for the reservation
by the Chief Executive of the three sites within Lot 3986
to be segregated from the Padillas‘ homestead.

WHEREFORE, the order of dismissal is set aside and the “Motion for
C onfirmation of Agreement” is hereby granted. Judgment is rendered approving the
agreement of the parties, in consonance with which the Director of Lands and the
Secretary of Agriculture and Natural Resources are ordered to exclude the sites
for the proposed city abattoir, extension of Salvador Street and channelization of the Kinalumsan
River from the homestead patent that may be issued to Emilio and Alberto Padilla
for Lot No. 3986. The acquisition and/or exclusive use by the City of
Cebu of
the portions so excluded is subject to the compliance
of the provisions of law. No costs.

SO ORDERED.

Bengzon, C.J., Bautista Angelo, Reyes,
J.B.L., Paredes, Dizon,
Regala, Makalintal
and Zaldivar, .J.J.,
concur.