WENCESLAO VINZONS TAN, PETITIONER-APPELLANT, VS. THE DIRECTOR OF FORESTRY, APOLONIO RIVERA, THE SEC­RETARY OF AGRICULTURE AND NATURAL RESOURCES JOSE Y. FELICIANO, RESPONDENTS-AP…

This is an appeal from the order dated January 20, 1965 of the
then Court of First In­stance of Manila, Branch VII, in Civil Case No. 56813, a
petition for certiorari, prohibition and mandamus with
preliminary prohibitory injunc­tion (p. 2, rec.), which dismissed the petition
of petitioner-appellant Wenceslao Vinzons
Tan on the ground that it does not state a sufficient cause of action, and upon
the respondents-appellees‘ (Secretary of Agriculture
and Natural Resources and the Director of Forestry) motion to dismiss (p. 28,
rec.).

Sometime in April 1961, the Bureau of Forestry issued Notice No.
2087, advertising for public bidding a certain tract of public forest land
situated in Olongapo, Zambales,
provided tenders were received on or before May 22, 1961 (p. 15, CFI rec.).
This public forest land, consisting of 6,420 hectares, is located within the
former U.S. Naval Reservation comprising 7,252 hectares of timberland, which
was turned over by the United States Government to the Philippine Government
(p. 99, CFI rec.).

On May 5,
1961,
petitioner-appellant Wenceslao Vinzons
Tan submitted his application in due form after paying the necessary fees and
posting the required bond therefor. Nine other
applicants submitted their offers before the deadline (p. 29, rec.).

Thereafter, questions
arose as to the wisdom of having the area declared as a forest reserve or allow
the same to be awarded to the most qualified bidder. On June 7,
1961, then President
Carlos P. Garcia issued a directive to the Director of the Bureau of
Forestry, which read as follows:

“It is desired that the area formerly covered by the Naval Re­servation
be made a forest reserve for watershed purposes. Prepare and submit immediately
a draft of a proclamation establishing the said area as a watershed forest
reserve for Olongapo, Zambales.
It is also desired that the bids received by the Bureau of Forestry for the
issuance of the timber license in the area during the public bidding conducted
last May 22, 1961 be rejected in
order that the area may be reserved as above stated.           xx         xx

(SGD.)
CARLOS P. GARCIA”

(p. 98, CFI rec.).

On August 3,
1961, Secretary
Cesar M. Fortich of Agriculture and Natural Resources
sustained the findings and recommendations of the Director of Forestry who
concluded that “it would be beneficial to the public interest if the area
is made available for exploitation under certain conditions,” and We quote:

“Respectfully forwarded to the Honorable, the Executive
Secretary, Malacañang, Manila,
inviting particular attention to the comment and recommendation of the Director
of Forestry in the preceding indorsement in which
this Office fully concurs.

“The observations of respon­sible forest officials are most
revealing of their zeal to promote forest conservation and watershed protection
especially in Olongapo, Zambales
area. In convincing fashion, they have demonstrated that to declare the forest
area involved as a forest reserve rather than open it for timber exploitation
under license and regulation would do more harm than good to the public
interest. To convert the area into a forest reserve without an adequate forest
protection force, would make of it a ‘Free Zone and Logging Paradise,’ to the
ever ‘Problem Loggers’ of Dinalupi­han, Bataan . . . an open target of timber smugglers, kaingineros and other forms of forest vandals and despoilers. On the other hand, to award
the area, as planned, to a reputable
and responsible licensee who shall conduct logging operations therein under the
selective logging method and who shall be obliged to employ a sufficient number
of forest guards to patrol and protect the forest conservation and watershed
protection.

“Worthy of mention is the
fact that the Bureau of Fores­try had already conducted a public bidding to
determine the most qualified bidder to whom the area advertised should
be awarded. Needless to stress, the decision of the Director of Forestry to
dispose of the area thusly, was arrived at after much thought and deliberation
and after having been convinced that to do so would not adverse­ly affect the
watershed in that sector. The result of the bid­ding only
have to be announced. To be sure, some of the parti­cipating bidders
like Mr. Edgardo Pascual, went to much
expense in the hope of winning a virgin forest concession. To suddenly make a
turn about of this decision without strong justifiable grounds, would cause the
Bureau of Forestry and this Office no end of embarrassment.

“In view of the foregoing, it is earnestly
urged that the Director of Forestry be allowed to proceed with the announce­ment
of the results of the bidding for the subject forest area” (p. 13, CFI
rec.).

The Office of the President in
its 4th Indorsement dated February 2, 1962,
signed by Atty. Juan Cancio, Acting Legal Officer,
“respectfully returned to the Honorable Secretary of the Department of
Agriculture and Natural Resources for appropriate action,” the papers
subject of Forestry Notice No. 2087 which was referred to the Bureau of
Forestry for decision (p. 14,
CFI rec.).

Finally, of the ten persons who submitted pro­posals, the area
was awarded to herein petitioner-appellant Wenceslao Vinzons Tan, on April
15, 1963 by the Bureau of Forestry (p. 17, CFI rec.). Against this
award, bidders Ravago Commercial Company and Jorge
Lao Happick filed motions for reconsideration which
were denied by the Director of Forestry on December 6, 1963.

On May 30, 1963,
the Secretary of Agriculture and Natural Resources Benjamin M. Gozon — who succeeded Secretary Cesar M. Fortich in office — ­issued General Memorandum Order No.
46, series of 1963, pertinent portions of which state:

Xx            xx        
xx

“SUBJECT: xx                 x            xx

(D)elegation of authority to the
Director of Forestry to grant ordinary timber licenses.

“1. xx        xx         xx

“2. The Director of
Forestry is hereby authorized to grant (a)
new ordinary timber licenses where the area covered thereby is not more
than 3,000 hectares each; and (b) the extension of ordinary timber licenses for
areas not exceeding 5,000 hec­tares each;

“3.
This Order shall take effect immediately” (p. 267, CFI rec.).

Thereafter, Jose Y. Feliciano was appointed as Acting Secretary
of Agriculture and Natural Resources, replacing Secretary Benjamin M. Gozon. Upon assumption of office, he immediately
promulgated on December 19, 1963 General Memorandum Order No. 60, revoking the
authority delegated to the
Director of Forestry, under General Memorandum Order No. 46, to grant ordinary
timber licenses, which order took effect on the same day, December 19, 1963.
Pertinent portions of the said Order read as follows:

xx             xx           xxx

“SUBJECT: Revocation of General
Memorandum Order No. 46 dated May 30,
1963 —

“1. In order to
acquaint the under­signed with the
volume and nature of the work of the Department, the author­ity delegated to
the Director of Forestry under General Memorandum Order No. 46, dated
May 30, 1963, to grant (a) new ordinary timber licenses where the area covered
thereby is not more than 3,000 hectares each; and (b) the exten­sion of
ordinary timber licenses for areas not
exceeding 5,000 hectares each is hereby revoked. Until further notice, the
issuance of new licenses and renewals of licenses, including amendments
thereto, shall be signed by the Secretary of Agriculture and Natural Resources.

“2. This Order shall take effect
immediately and all other previous orders, directives, circulars, memoranda,
rules and regulations inconsistent with this Order are hereby revoked” (p.
268, CFI rec.; underscoring
supplied).

On the same date that the
above-quoted memo­randum took
effect, December 19, 1963, Ordinary Timber License No. 20-’64 (NEW) dated April
22, 1963, in the name of Wenceslao Vinzons Tan, was signed by then Acting Director of Forestry
Estanis­lao R. Bernal without the approval of the
Secretary of Agriculture and Natural Resources. On January 6, 1964, the license was released by the Office of
the Director of Forestry (p. 30, CFI rec.; p. 77, rec.). It was not signed by
the Secretary of Agriculture and Natural Resources as required by Order No. 60 aforequoted.

On February 12, 1964, Ravago Commercial Company wrote a letter to the Secretary
of Agriculture and Natural Resources praying that, pending resolution of the
appeal file by Ravago Commercial Company and Jorge
Lao Happick from the order of the Director of
Forestry denying their motion for reconsideration, O.T.L. No. 20-’64 in the
name of Wenceslao V. Tan be cancelled or revoked on
the ground that the grant thereof was irregular, anomalous and contrary to
exist­ing forestry laws, rules and regulations.

On March 9, 1964, acting
on the said representa­tion made by Ravago Commercial
Company, the Secretary of Agriculture and Natural Resources promulgated an
order declaring Ordinary Timber License No. 20-’64 issued in the name of Wenceslao Vinzons Tan, as having
been issued by the Director of Forestry without author­ity, and is therefore
void ab initio.
The dispositive portion of said order reads as
follows:

“WHEREFORE, premises considered, this Office is of the opinion
and so holds that O.T. License No. 20-’64 in the name of Wenceslao
Vinzons Tan should be, as hereby it is, REVOKED AND
DECLARED without force and effect whatsoever from the
issuance thereof.

“The Director of Forestry is hereby directed to stop the logging
operations of Wenceslao Vinzons
Tan, if there be any, in the area in question and shall see to it that the appellee shall not introduce any further improvements
thereon pending the disposition of the appeals filed by Ravago
Commercial Company and Jorge Lao Happick in this
case” (pp. 30-31, CFI rec.).

Petitioner-appellant moved for a reconsidera­tion of the order,
but the Secretary of Agriculture and Natural Resources denied the motion in an
Order dated March 25, 1964,
wherein this paragraph appears:

“In this connection, it has been observed by the Acting Direc­tor
of Forestry in his 2nd indorse­ment of February 12,
1964, that the area in question composes of water basin overlooking Olongapo, includ­ing the proposed Olongapo
Watershed Reservation; and that the United States as well as the Bureau of
Forestry has earmarked this entire watershed for a watershed pilot forest for
experiment treatment concerning erosion and water con­servation and flood
control in relation to wise utilization of the forest, denudation, shifting
cultivation, increase or decrease of crop harvest of agricultural areas
influenced by the watershed, etc.           .
. . . ” (pp. 38-39, CFi rec.;
p. 78, rec.).

On April 11, 1964, the Secretary of Agriculture and Natural
Resources, acting on the separate appeals filed by Jorge Lao Happick and Ravago Commercial Com­pany,
from the order of the Director of Forestry dated April 15, 1963, awarding to Wenceslao Vinzons Tan the area
under Notive No. 2087, and rejecting the proposals of
the other applicants covering the same area, promulgated an order commenting
that in view of the observations of the Director of Forestry just quoted,
“to grant the area in ques­tion to any of the parties herein, would
undoubtedly adversely affect public interest which is paramount to private
interests,” and concluding that, “for this reason, this Office is of
the opinion and so holds, that without the necessity of discussing the appeals
of the herein appellants, the said appeals should be, as hereby they are, dismissed
and this case is considered a closed matter insofar as this Office is
concerned” (p. 78, rec.).

On April 18, 1964, on the basis of the denial of his motion for
reconsideration by the Secretary of Agriculture and Natural Resources,
petitioner-appellant filed the instant case before the court a quo
(Court of First Instance, Manila), Special Civil Action No. 56813, a petition
for certiorari, prohibition and mandamus with preliminary
prohibitory injunction (pp. 1-12, CFI rec.). Petitioner-appellant claims that
the respondents-appellees “unlawfully,
illegally, whimsically, capriciously and arbitrarily acted without or in excess
of their jurisdiction, and/or with grave abuse of discretion by revoking a
valid and existing timber license without just cause, by denying petitioner-appellant
of the equal protection of the laws, by depriving him of his con­stitutional
right to property without due process of law, and in effect, by impairing the
obligation of contracts” (p. 6, CFI rec.). Petitioner-appellant prayed for
judgment making permanent the writ of preliminary injunction against the
respondents-appellees; declaring the orders of the
Secretary of Agriculture and Natural Resources dated March 9, March 25, and
April 11, 1964, as well as all his acts and those of the Director of Forestry
implement­ing said orders, and all the proceedings in connection therewith,
null and void, unlawful and of no force and effect; ordering the Director of
Forestry to renew O.T.L. No. 20-’64 upon expiration; and sentencing the
respondents, jointly and severally, to pay the peti­tioner-appellant the sum of
Two Hundred Thousand Pesos (P200,000.000) by way of pecuniary damage, One
Hundred Thousand Pesos (P100,000.00) by way of moral and exem­plary damages,
and Thirty Thousand Pesos (P30,000.00) as
attorney’s fees and costs. The respondents-appellees
separately filed oppositions to the issuance of the writ of preliminary
injunction, Ravago Commercial Company, Jorge Lao Happick and Atanacio Mallari, presented petitions for inter­vention which were
granted, and they too opposed the writ.

The Director of Forestry
in his motion to dismiss dated April 24, 1964, alleges the
following grounds: (1) that the court has no jurisdiction; (2) that the
respondents may not be sued without their consent; (3) that the petitioner
has not exhausted all available administrative remedies; (4) that the petition
does not state a cause of action; and (5) that purely administrative and
discretionary functions of administrative officials may not be interfered with by the courts. The Secretary of Agriculture and Natural Resources
joined the motion to dismiss when in his answer of May 18, 1964, he avers the following special and affirmative defenses: (1) that the court has
no jurisdiction to entertain the action for certiorari, prohibition and mandamus;
(2) that the peti­tioner has no cause of action; (3) that venue is improperly
laid; (4) that the State is
immune from suit without its consent; (5) that the court has no power to
interfere in purely administrative functions; and (6) that the cancellation of
petitioner’s license was dictated by public policy (pp. 172-177, rec.). Intervenors also filed their respective answers in
intervention with special and affirmative defenses (pp. 78-79, rec.). A hearing
was held on the peti­tion for the issuance of writ of preliminary injunc­tion,
wherein evidence was submitted by all the parties including the intervenors, and extensive discussion was held both orally
and in writing.

After the said hearing,
on January 20, 1965, the court a quo, from the evidence received, resolved not only
the question on the issuance of a writ of preliminary injunction but also the
motion to dismiss, declared that the petition did not state a sufficient cause
of action, and dismissed the same accordingly. To justify such action, the
trial court, in its order dismissing the petition, stated that “the court
feels that the evidence presented and the extensive discus­sion on the issuance
of the writ of preliminary man­datory and prohibitory injunction should also be
taken into consideration in resolving not only this question but also the
motion to dismiss, because there is no reason to believe that the parties will change their stand,
arguments and evidence” (p. 478, CFI rec.). His motion for reconsideration
having been denied (p. 488, CFI rec.), petitioner-appellant Wenceslao
Vinzons Tan appealed directly to this Court.

I

Petitioner-appellant now
comes before this Court, claiming that the trial court erred in:

(1) holding that the petition does not state a
sufficient cause of action; and

(2) dismissing the petition [p. 27, rec.].

He argues that the sole
issue in the present case is, whether
or not the facts in the petition constitute a sufficient cause of action (p. 31,
rec.). Petitioner-appellant, in his brief, presented a lengthy discussion on
the definition of the term cause of action wherein he contended that the three
essential elements thereof — namely, the legal right of the
plaintiff, the correlative obligation of the defendants and the act or omission
of the defendant in violation of that right — are satisfied in the averments
of this petition (pp. 31-32, rec.). He invoked the rule that when the ground
for dismissal is that the complaint states no cause of action, such fact can be
determined only from the facts
alleged in the complaint and from no other, and the court cannot consider other
matters aliunde. He further invoked the rule that in a motion to dismiss based on
insufficiency of cause of action, the facts alleged in the complaint are deemed
hypothetically admitted for the purpose of the motion (pp.
32-33, rec.).

A perusal of the records
of the case shows that petitioner-appellant’s contentions are untenable. As
already observed, this case was presented to the trial court upon a motion to dismiss for failure of the petition to state a claim upon
which relief could be granted (Rule 16 [g], Revised Rules of Court), on the ground that the timber license relied
upon by the petitioner-appellant in his petition was issued by the Director of
Forestry without authority and is therefore void ab
initio. This motion supplanted the general
demurrer in an action at law and, as a rule admits, for the purpose of the
motion, all facts which are well pleaded. However, while the court must accept
as true all well pleaded facts, the motion does not admit allegations of which
the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor
to facts inadmissible in evidence, nor to facts which appear by record or
document included in the pleadings to be unfounded (Vol. 1, Moran’s Comments on
the Rules of Court, 1970 ed., p. 505, citing cases).

It must be noted that
there was a hearing held in the instant case wherein answers were interposed
and evidence introduced. In the course of the hear­ing, petitioner-appellant
had the opportunity to introduce evidence in support of the allegations in his
petition, which he readily availed of. Consequently, he is estopped from invoking the rule that to determine the
sufficiency of a cause of action on a motion to dismiss, only the facts alleged
in the complaint must be considered. If there were no hearing held, as in the case of Cohen vs. U.S. (C.C.A. Minn., 1942,
129 F. 2d 733),”where the case was presented to District Court upon a
motion to dismiss because of alleged failure of complaint to state a
claim upon which relief could be granted, and no answer was interposed and no
evidence intro­duced, the only facts which the court could properly consider in
passing upon the motion were those facts appearing
in the complaint, supplemented by such facts as the court judicially
knew.”

In Llanto
vs. Ali Dimaporo, et al. (16 SCRA 601, March 31,
1966), this Court, thru Justice Conrado V. Sanchez,
held that the trial court can properly dis­miss a complaint on a motion to
dismiss due to lack of cause of action even without a hearing, by taking into
consideration the discussion in said motion and the opposition thereto.
Pertinent portion of said decision is hereby quoted:

“Respondents moved to dismiss. Ground therefor
is lack of cause of action. The Court below granted the motion, dismissed the
petition. The motion to
reconsider failed. Offshoot is this appeal.

“1. The threshold questions are these: Was the dismissal order
issued ‘without any hear­ing on the motion to dismiss’? Is it void?

“WE go to the record. The motion to dismiss was filed on
February 1, 1961 and set for hearing on February 10 follow­ing. On February 8,
1961 peti­tioner’s counsel telegraphed the court, ‘(r)equest postpone­ment motion dismissal till written
opposition filed.’ He did not appear at the scheduled hearing. But on March 4,
1961, he followed up his wire, with his written opposition to the motion to
dismiss. Adverting to the 5-page motion to dismiss and the 6-page opposition thereto, we find that
the arguments pro and con on the question of the board’s, power to abolish
petitioner’s position minutely discussed the problem and pro­fusely cited
authorities. The May 15, 1961 8-page court order recited at length the said
arguments and concluded that petitioner made no case.

“One good reason for the statutory
requirement of hear­ing on a motion as to enable the suitors to adduce evidence
in support of their opposing claims. But here the motion to dismiss is
grounded on lack of cause of action. Existence of a cause of action or lack of
it is determined by a reference to the facts averred in the challenged
pleading. The question raised in the motion is purely one of law. This legal
issue was fully discussed in said motion and the opposi­tion thereto. In this
posture, oral arguments on the motion are reduced to an unnecessary ceremony
and should be over­looked. And, correctly so, because the other intendment of
the law in requiring hear­ing on a motion, i.e., ‘to avoid surprises upon the
opposite party and to give to the latter time to study and meet the arguments
of the motion,’ has been sufficiently
met. And then, courts do not exalt form over substance”
(underscoring supplied).

Furthermore, “even if the complaint stated a valid cause of
action, a motion to dismiss for insufficiency of cause of action will be
granted if documentary evidence admitted by stipulation disclosing facts
sufficient to defeat the claim enabled the court to go beyond disclosure in the
complaint” (LOCALS No. 1470, No. 1469, and No. 1512 of the International
Longshoremen’s Association vs. Sourther Pacific Co.,
6 Fed. Rules Service, p. 107; U.S. Circuit Court of Appeals,
Fifth Circuit, Dec. 7, 1952; 131 F. 2d 605). Thus, although the evidence
of the parties were presented on the question of granting or denying
petitioner-appellant’s application for a writ of preliminary injunction, the
trial court correctly applied said evidence in the resolution of the motion to
dismiss. Moreover, in applying said evidence in the resolution of the motion to
dismiss, the trial court, in its order dismissing the petition, pointed out
that, “there is no reason to believe that the parties will change their
stand, arguments and evidence” (p. 478, CFI rec.). Petitioner-appellant
did not interpose any objection thereto, nor presented new arguments in his
motion for reconsideration (pp. 482­-484, CFI rec.). This omission means
conformity to said observation, and a waiver of his right to object, estopping him from raising this question for the first time
on appeal. “Issues not raised in the trial court cannot be raised for the
first time on appeal” (Matienzo vs. Servidad, Sept. 10, 1981, 107 SCRA 276).

Moreover, petitioner-appellant cannot invoke the rule that, when
the ground for asking dismissal is that the complaint states no cause of
action, its sufficiency must be determined only from the allegations in the
complaint. “The rules of procedure are not to be applied in a very rigid,
technical sense; rules of procedure are
used only to help secure substantial justice. If a technical and rigid
enforcement of the rules is made, their aim would be defeated. Where the rules
are merely secondary in importance are made to override the ends of justice;
the technical rules had been misapplied to the pre­judice of the substantial
right of a party, said rigid application cannot be countenanced” (Vol. 1,
Francisco, Civil Procedure, 2 ed., 1973, p. 157, citing cases).

What more can be of
greater importance than the interest of the public at large, more particu­larly
the welfare of the inhabitants of Olongapo City
and Zambales province, whose lives and properties are
directly and immediately imperilled by forest denu­dation.

The area covered by
petitioner-appellant’s, timber license practically comprises the entire Olongapo watershed (p. 265, CFI rec.). It is of
public knowledge that watersheds serves as a defense against soil erosion and
guarantees the steady supply of water. As a matter of general policy,
the Philippine Constitution expressly mandated the conservation and proper
utilization of natural resources, which includes the country’s watershed.
Watersheds in the Philippines had been
subjected to rampant abusive treatment due to various unscientific and
destructive land use practices. Once lush watersheds were
wantonly deforested due to uncontrolled timber cutting by licensed
concessionaires and illegal loggers. This is one reason why, in
paragraph 27 of the rules and regulations included in the ordinary timber
license it is stated:

“The terms and conditions of this license are subject to
change at the discretion of the Director of Forestry, and that this license may
be made to expire at an earlier date, when public interests so require” (Exh. D, p. 22, CFI rec.).

Considering the overriding public
interest involved in the instant case, We therefore take judicial notice of the
fact that, on April 30, 1964, the area covered by petitioner-appellant’s timber
license has been established as the Olongapo
Watershed Forest Reserve by virtue of Executive Proclamation No. 238 by then
President Diosdado Macapagal,
which in parts read follows:

“Pursuant to the provisions of Section 1824 of the Revised
Administrative Code, as amended, I, Diosdado Macapagal, President of the Philippines do hereby with­draw
from entry, sale, or settle­ment and establish as Olongapo
Watershed Forest Reserve for watershed, soil protection, and timber production
purposes, subject to private rights, if any there be, under the adminis­tration
and control of the Director of Forestry, xx xx the following parcels of land of the public
domain situated in the municipality of Olongapo,
province of Zambales, described in the Bureau of
Forestry map No. FR-132, to wit: xx xx”
(60 O.G. No. 23, 3198).

Petitioner-appellant
relies on Ordinary Timber License No. 20-’64 (NEW) for his alleged right over
the timber concession in question. He argues thus: “The facts alleged in
the petition show: (1) the, legal right of the petitioner to log in the area
covered by his timber license; (2) the legal or corresponding obligation on the
part of the respondents to give effect, recognize and respect the very timber
license they issued to the petitioner; and (3) the act of the respondents in
arbitrarily revoking the timber license of the petitioner without giving him
his day in court and in preventing him from using and enjoying the timber
license issued to him in the regular course of official business” (p. 32,
rec.).

In the light of
petitioner-appellant’s arguments, it is readily seen that the whole controversy
hinges on the validity or invalidity of his timber license.

WE fully concur with the
findings of the trial court that petitioner-appellant’s timber license was
signed and released without authority by then Acting Director Estanislao R. Bernal of Forestry, and is therefore void ab initio. WE hereby quote such findings:

“In the first place, in general memorandum order No. 46 dated
May 30, 1963, the Director of Forestry was authorized to grant a new ordinary timber license only where the area covered thereby was not more than 3,000 hectares; the tract of public forest awarded to
the petitioner contained 6,420 hectares (Exhs. 2-A and 2-B Ravago, embodied in Annex B; Exh.
B). The petitioner contends that only 1,756 hectares of the said area contain commercial and operable
forest; the authority given to the Director of Forestry to grant a new ordinary
timber license of not more than 3,000 hectares does not state that the
whole area should be commercial and
operable forest. It should be taken into consideration that the 1,756 hectares
containing commercial and operable forest must have been distributed in the
whole area of 6,420 hectares. Besides the license states, ‘Please see attached sketch and technical description,’ gives an area of
6,420 hectares and does not state what is the area covered of commercial and
operable forest (Exh. 1-Ravago). Also Annex B of the petition, which
was marked as Exhibit B, states:

“‘Under Notice No. 2087, a tract of public forest containing
6,420 hectares located in Olongapo, Zambales was declared available for timber utili­zation and
development. Pursuant to this Notice, there were received bid proposals from
the following persons: x x x.

“‘Wherefore, confirm­ing the findings of said Committee, the area described in Notice No. 2087
shall be awarded, as it is hereby awarded to Wences­lao
Vinzons Tan, subject
to the following conditions: xx         xx.’

“In the second place, at the time it was released to the peti­tioner,
the Acting Director of Forestry had no more authority to grant any license. The
license was Signed by the Acting Director of Forestry on December 19, 1963, and
released to the petitioner on January
6, 1964 (Exh. 1-Ravago). The authority delegated to
the Director of Forestry to grant a new ordinary timber license was contained
in general memorandum order No. 46 dated May 30, 1963. This was revoked
by general memo­randum order No. 60, which was promulgated on December 19, 1963. In view thereof, the
Director of Forestry had no longer any authority to release the license on
January 6, 1964, and said license is therefore void ab
initio” (pp. 479-480, CFI rec.).

The release of the
license on January 6, 1964, gives rise to the impression that it was
ante-dated to December 19, 1963 on which date the authority of the Director of
Forestry was revoked. But, what is of greatest importance is the date of the
release or issuance, and not the date of the signing of the license. While
petitioner-appellant’s timber license might have been signed on December 19,
1963 it was released only on January 6, 1964. Before its release, no right is
acquired by the licensee. As pointed out by the trial court, the Director of
Forestry had no longer any authority to release the license on January
6, 1964. Therefore, petitioner-appellant had not acquired any legal right under such
void license. This is evident on the face of his petition as supplemented by
its annexes which includes Ordinary Timber License No. 20-’64 (NEW). Thus, in the case of World Wide Insurance & Surety Co., Inc. vs. Macro­hon, et al. (105 Phil. 250, Feb. 28, 1959), this
Court held that if from the face of the complaint, as supple­mented by its
annexes, plaintiff is not the owner, or entitled to the properties it claims to
have been levied upon and sold at public auction by the defend­ants and for
which it now seeks indemnity, the said complaint does not give plaintiff any
right of action against the defendants. In the same case, this Court further
held that, in acting on a motion to dismiss, the court cannot separate the
complaint from its annexes where it clearly appears that the claim of the
plaintiff to be the owner of the properties in question is predicated on said
annexes. Accordingly, petitioner-appellant’s petition must be dismissed due to
lack of cause of action.

II

Petitioner-appellant, in his
petition, alleged that he has exhausted all his administrative remedies
to no avail as respondents-appellees have failed, neglected, refused and continue to
refuse to allow petitioner-appellant to continue operation in the area covered by his timber license. He further alleged that he
has neither recourse by way of appeal, nor any plain, speedy and
adequate remedy in the ordinary course of law except thru this special civil action, as the last official act
of the re­spondent-appellee Secretary of Agriculture
and Natural Resources in declaring void the timber license referred to above
after denying petitioner-appellant’s motion for reconsideration, is the last administrative act.
Petitioner-appellant relies on the case of Demaisip
vs. The Court of Appeals, et al. (106 Phil. 237, Sept. 24, 1959), wherein it
was held that the failure of the plaintiff to appeal from the adverse decision
of the Secretary to the President cannot preclude the plaintiff from taking
court action in view of the theory that the Secretary of a depart­ment is merely an alter-ego of the
President. The presumption is that the action of the Secretary bears the
implied sanction of the President unless the same is disapproved by the latter
(Villena vs. the
Secretary of Interior, 67 Phil. 451; p. 7, CFI rec.).

To this We cannot agree. Petitioner-appellant did not appeal the
order of the respondent Secretary of Agriculture and Natural Resources to the
President of the Philippines,
who issued Executive Proclamation No.
238 withdrawing the area from private exploitation, and establishing it as the Olongapo Watershed Forest Reserve. Considering that the President
has the power to review on appeal the orders or acts of the respondents appellees, the failure of the petitioner-appellant to take
that appeal is failure on his part to exhaust his administrative remedies.
Thus, this Court, in the case of Calo vs. Fuertes (5 SCRA 399, 400, June 29, 1962), held that:

“At any rate, the appellant’s contention that, as the Secretary
of Agriculture and Natural Resources is the alter ego of the President and his
acts or decisions are also those of the latter, he need not appeal from the
decisions of opinion of the former to the latter, and that, such being the
case, after he had appealed to the Secretary of Agriculture and Natural
Resources from the decision or opinion of the Director of Lands he had ex­hausted
all the administrative remedies, is untenable.

“The withdrawal of the appeal taken to the President of the
Philippines is tantamount to not appealing all thereto. Such withdrawal is
fatal, because the appeal to the President is the last step he should take in
an administrative case.”

In 1912, in the case of
Lamb vs. Phipps (22 Phil. 491-92, July 22, 1912), this Court stressed the
doctrine of exhaustion of administrative remedies, thus:

“When a plain, adequate and speedy remedy is afforded by and
within the executive depart­ment of the government, the courts will not
interfere until at least
that remedy has been exhausted. (Jao Igco vs. Shus­ter, l0 Phil. Rep. 448; Ekiu
vs. U.S., 142 U.S. 651; U.S. vs. Sing Tuck, 194 U.S. 161; U.S. vs. Ju Toy, 198 U.S. 253; Chiu Yow vs. U.S., 28 Sup. Ct. Rep.
201). The administrative remedies afforded by law must first be exhausted
before resort can be had to the courts, especially when the administra­tive
remedies are by law exclusive and final. Some matters and some questions
are by law delegated entirely and absolutely to the discretion of particular
branches of the executive depart­ment of the government. When the law confers
exclusive and final jurisdiction upon the exe­cutive department of the govern­ment
to dispose of particular questions, their judgments or the judgments of that
particular department are no more reviewable by the
courts than the final judgment or decisions of the courts are subject to be
reviewed and modified by them” (underlining supplied).

Moreover, this being a
special civil action, petitioner-appellant must allege and prove that he has no other speedy and adequate remedy
(Diego vs. The Court of Appeals, et
al., 54 Off. Gaz., No. 4, 956). In the case at bar, petitioner-appellant’s speedy and adequate remedy is an appeal to the President
of the Philippines.

Accordingly, “it is
settled to the point of being elementary that the only question involved in certiorari is
jurisdiction, either want of juris­diction or excess thereof, and abuse of
discretion shall warrant the issuance of the extraordinary remedy of certiorari
when the same is so grave as when the power is exercised in an arbitrary or des­potic
manner by reason of passion, prejudice or personal hostility, and it must be so
patent and gross as to amount to an evasion of positive duty, or to a virtual
refusal to perform a duty enjoined, or to act at all in contemplation of
law” (F.S. Divina­gracia Agro-Commercial Inc.
vs. Court of Appeals, 104 SCRA 191 [April 21, 1981]). The foregoing is on the assumption that there
is any irregularity, albeit there is none in the acts or omissions of the
respondents-appellees. Certiorari is not a substitute for appeal as held time and again by this Court
(People vs. Villanueva, 110 SCRA 465), “it being a time honored and well known principle that before
seeking judicial redress, a party must first exhaust the administrative remedies
available” (Garcia vs. Teehankee, 27 SCRA 944,
April 18, 1969).

“Moreover, from the
decision of the Secretary of Agriculture and Natural Resources complained of,
peti­tioners had a plain, speedy and adequate remedy by appealing therefrom to the Chief
Executive. In other words, before filing the present action for certiorari
in the court below, they should have availed of this administrative remedy and
their failure to do so must be deemed fatal
to their case [Calo vs. Fuertes,
et al., G.R. No. L-16537, June 29, 1962]. To place petitioners’ case beyond the
pale of this rule, they must show that their case falls — which it does not —
within the cases where, in accordance with our decisions, the aggrieved party
need not exhaust administrative remedies within his reach in the ordinary
course of the law [Tapales vs. The President and the Board of Regents of the
U.P., G.R. No. L-17532, March 30, 1963; Mangubat vs. Osmeña, G.R. No. L-1837, April 30, 1959; Baguio vs. Hon. Jose Rodriguez, G.R. No. L-11078, May 27,
1959; Pascual vs. Provincial Board, G.R. No. L-11959,
Oct. 31, 1959; Marinduque Iron Mines, etc. vs.
Secretary of Public Works, G.R. No. L-15982, May 31, 1963; Alzate
vs. Aldaba, G.R. No. L-14407, Feb. 29, 1960 and Demaisip vs. Court of Appeals, G.R. No. L-13000, Sept. 25,
1959]” (Ganob vs. Ramas,
27 SCRA 1178, April 28, 1969).

III

Petitioner-appellant not only failed to exhaust his administrative remedies, but also failed to
note that his action is a suit against the State which, under the doctrine of
State immunity from suit, cannot prosper unless the State gives its consent to
be sued (Kawananakoa vs. Polybank,
205 U.S. 349; Siren vs. U.S., 7 Wall. 152; Sec. 16, Art. XV, 1973
Constitution).

The respondents-appellees, in revoking
the peti­tioner-appellant’s timber license, were acting within the scope of
their authority. Petitioner-appellant contends that “this case is not a suit against the State but an
application of a sound principle of law whereby administrative decisions or
actuations may be reviewed by the courts as a protection afforded the citizens against oppression” (p.
122,CFI rec.). But, piercing the shard of his contention, We find that
petitioner-appellant’s action is just an attempt to circumvent the rule
establishing State exemption from suits. He cannot use that principle of
law to profit at the expense and
prejudice of the State and its citizens. The promotion of public welfare
and the protection of the inhabitants near the public forest are property, rights and interest of the State.
Accordingly, “the rule establishing State exemption from suits may not be
circumvented by directing the action against the officers of the State instead
of against the State itself. In such cases the State’s immunity may be validly
invoked against the action as long as it can be shown that the suit really
affects the property, rights, or interests of the State and not merely those of
the officer nominally made party defendant” (SINCO, Phil. Political Law,
10th ed., p. 35; Salgado vs. Ramos, 64 Phil. 724; see also Angat
River Irrigation System vs. Angat River Workers’
Union, G.R. No. L-10943-44, Dec. 28, 1957, 102 Phil. 789, 800-802; Mobil Phil.
vs. Customs Arrastre Service, 18 SCRA 1120,
1121,1125; Bureau of Printing vs. Bureau of Printing Employees’ Association, 1
SCRA 340, 341, 343).

Both the Secretary of
Agriculture and Natural Resources and the Director of Forestry acted in their
capacity as officers of the State, representatives of the sovereign authority
discharging governmental powers. A private individual cannot issue a timber
license.

Consequently, a favorable
judgment for the petitioner-appellant would result in the government losing a
substantial part of its timber resources. This being the case,
petitioner-appellant’s action cannot prosper unless the State gives its consent
to be sued.

IV

Granting arguendo, that petitioner-appellant’s timber license
is valid, still respondents-appellees can validly
revoke his timber license. As pointed out earlier, paragraph 27 of the rules
and regulations included in the ordinary timber license states: “The
terms and conditions of this license are subject to change at the discretion of
the Director of Forestry, and that this license may be made to expire at an
earlier date, when public interests so require” (Exh.
D, p. 22, CFI rec.). A timber license is an instrument by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract
within the purview of the due process clause; it is only a license or
privilege, which can be validly withdrawn whenever dictated by public interest or public welfare
as in this case.

“A license is merely
a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority, federal, state, or municipal, granting it and
the person to whom it is granted; neither is it property or a property
right, nor does it create a vested right; nor is it taxation” (37 C.J.
168). Thus, this Court held that the granting of license does not create irre­vocable
rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576). In the case of Pedro vs. Provincial
Board of Rizal (56 Phil. 123) It was held that:

“A license authorizing the operation and exploitation of a
cockpit is not property of which the holder may not be deprived without due
process of law, but a mere privilege which may be revoked when public interests
so require.”

The welfare of the people
is the supreme law. Thus, no franchise or right can be availed of to defeat the
proper exercise of police power (Surigao Electric
Co., Inc. vs. Municipality of Surigao, 24 SCRA
898, Aug. 30, 1968). The State has inherent power enabling it to prohibit all
things hurtful to comfort, safety, and welfare of society (Edu
vs. Ericta, 35 SCRA 481, Oct. 24, 1970).

V

As provided in the aforecited provision, timber licenses are subject to the
authority of the Director of Forestry. The utilization and disposition of
forest resources is directly under the control and supervision of the Director
of Forestry. However, “while Section 1831 of the Revised Administrative
Code provides that forest products shall be cut, gathered and removed
from any forest only upon license from the Director of Forestry, it is no less
true that as a subordinate officer, the Director of Forestry is subject to the
control of the Department Head or the Secretary of Agriculture and Natural
Resources (Sec. 79[c],
Rev. Adm. Code), who, therefore, may impose reasonable regulations in the
exercise of the powers of the subordinate officer” (Director of Forestry
vs. Benedicto, 104 SCRA 309, May 5, 1981). The power
of control of the Department Head over bureaus and offices includes the power
to modify, reverse or set aside acts of subordinate officials (Province of Pangasinan vs. Secretary of Public Works and
Communications, 30 SCRA 134, Oct. 31, 1969; Montano vs. Silvosa,
97 Phil. 143, 144, 147-148). Accordingly, respondent-appellee
Secretary of Agriculture and
Natural Resources has the authority to revoke, on valid grounds, timber
licenses issued by the Direc­tor of Forestry. There being supporting evidence,
the revocation of petitioner-appellant’s timber license was a wise exercise of
the power of the respondent-­appellee (Secretary of
Agriculture and Natural Resources) and therefore, valid.

Thus, “this Court had rigorously adhered to the principle of
conserving forest resources, as corollary to which the alleged right to them of
private indivi­duals or entities was meticulously inquired into and more often
than not rejected. We do so again” (Direc­tor of Forestry vs. Benedicto, supra). WE reiterate Our fidelity to the basic
policy of conserving the national patrimony as ordained by the Constitution.

WHEREFORE, IN VIEW OF ALL THE FOREGOING, THE ORDER
APPEALED FROM IS HEREBY AFFIRMED IN TOTO. COSTS AGAINST
PETITIONER-APPELLANT.

SO ORDERED.

Concepcion, Jr., Guerrero, Abad Santos, and Escolin, JJ., concur.

Aquino, J., in the result.

De Castro, J., on leave.