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

Wenceslao Vinzons Tan versus the Director of Forestry

The Case

This is Wenceslao Vinzons Tan versus the Director of Forestry and the Secretary of Agriculture and Natural Resources. Tan won a public bidding for a timber concession over public forest land in Olongapo, Zambales, and the Director of Forestry issued him an ordinary timber license. A succeeding Secretary of Agriculture and Natural Resources then revoked that license as void from the start, on the ground that the Director had lost the authority to issue it. Tan went to court by certiorari, prohibition and mandamus, and the case reaches us on the question of whether his petition stated a sufficient cause of action. The case matters because it fixes the rule on how a court tests a motion to dismiss for failure to state a cause of action once evidence has been heard, and because it places the public interest in watershed protection above a private timber concession.

Procedural History

Tan filed a special civil action for certiorari, prohibition and mandamus with preliminary prohibitory injunction before the then Court of First Instance of Manila. The Director of Forestry moved to dismiss on several grounds, among them that the petition stated no cause of action, that administrative remedies were not exhausted, and that the State may not be sued without consent. The Secretary joined in the defenses. Three other bidders intervened and opposed the writ. After a hearing on the injunction, at which all parties presented evidence, the trial court resolved both the injunction and the motion to dismiss, held that the petition stated no sufficient cause of action, and dismissed it. Tan's motion for reconsideration was denied, and he appealed directly to the Supreme Court.

Facts

In April 1961 the Bureau of Forestry issued a notice advertising for public bidding a tract of public forest land in Olongapo, Zambales, consisting of 6,420 hectares within the former United States Naval Reservation. Tenders were to be received on or before May 22, 1961. Tan filed his application in due form, paid the fees, and posted the required bond. Nine other applicants submitted offers before the deadline.

Questions then arose whether the area should instead be declared a forest reserve. The President directed that the area be made a watershed forest reserve and that the bids be rejected. The Secretary of Agriculture and Natural Resources, however, endorsed the recommendation of the Director of Forestry that the area be opened to exploitation under license, warning that a reserve without an adequate protection force would become a free zone for timber smugglers and forest vandals. The Office of the President returned the papers to the Secretary for appropriate action. Of the ten bidders, the area was finally awarded to Tan on April 15, 1963. Motions for reconsideration by two other bidders were denied.

Earlier, the Secretary had issued a general memorandum order delegating to the Director of Forestry authority to grant new ordinary timber licenses for areas not exceeding 3,000 hectares each. A succeeding Secretary then issued a new general memorandum order revoking that delegation, effective immediately, and requiring that new licenses be signed by the Secretary. On the very day that revoking order took effect, the Acting Director of Forestry signed Tan's ordinary timber license without the approval of the Secretary, and the license was released in January 1964. Acting on a complaint by a rival bidder, the Secretary issued an order declaring the license to have been issued without authority and therefore void from the beginning, and directing that Tan's logging operations be stopped. Tan's motion for reconsideration was denied. The Secretary then resolved the rival bidders' appeals by holding that granting the area to any of the parties would adversely affect the public interest, which is paramount to private interests.

Issues

• Whether or not the trial court erred in holding that the petition stated no sufficient cause of action.
• Whether or not the trial court erred in dismissing the petition.

Applicable Provisions

Rule 16, Section 1, paragraph (g) of the Revised Rules of Court, the ground for dismissal invoked, provides:

Within the time fixed by these rules, the defending party may file a motion to dismiss the complaint on any of the following grounds: x x x (g) That the pleading asserting the claim states no cause of action.

This is the procedural ground on which the trial court dismissed Tan's petition, and the Court examines what that ground admits and what it does not.

Ruling

On the first issue, the Court held that the trial court did not err. A motion to dismiss for failure to state a cause of action admits, for the purpose of the motion, all facts that are well pleaded. But it does not admit allegations that the court knows to be untrue, legally impossible facts, facts inadmissible in evidence, or facts shown by the record or by documents in the pleadings to be unfounded. Here there was a hearing at which answers were filed and evidence was introduced, and Tan availed himself of the opportunity to present evidence. He is therefore estopped from insisting that only the allegations of his petition be considered. The Court also held that a trial court may properly dismiss a complaint for lack of cause of action by taking into account the discussion in the motion and the opposition, because the existence of a cause of action is determined by reference to the facts averred, and the question raised is purely one of law. Rules of procedure, the Court stressed, are not to be applied in a very rigid, technical sense; they are used only to help secure substantial justice.

On the second issue, the Court held that the dismissal was correct. The area covered by Tan's license practically comprised the entire Olongapo watershed. Watersheds serve as a defense against soil erosion and guarantee a steady supply of water, and the Constitution expressly mandates the conservation and proper utilization of natural resources. The Court weighed this against Tan's claim and found that what is of greater importance is the interest of the public at large, particularly the welfare of the inhabitants of Olongapo and Zambales, whose lives and properties are directly imperilled by forest denudation. The license having been issued by the Director without the authority that had been revoked, the Secretary's order revoking it was sustained.

Doctrine

First, on a motion to dismiss for failure to state a cause of action under Rule 16, Section 1, paragraph (g), the court accepts as true the well pleaded facts, but not allegations it judicially knows to be untrue, legally impossible facts, inadmissible facts, or facts shown by the record or documents in the pleadings to be unfounded. Second, where a hearing has been held and the parties have introduced evidence, the court may consider that evidence in resolving the motion, and a party who participated without objection is estopped from later invoking the rule that only the complaint's allegations may be examined. Third, rules of procedure are instruments of substantial justice and are not to be applied with rigid technicality. Fourth, the conservation and proper utilization of natural resources, including watersheds, is a matter of constitutional policy, and the public interest in watershed protection is paramount to a private timber concession.

Disposition

The Supreme Court affirmed the order of dismissal, and Tan's petition was dismissed; the revocation of his timber license stood.

Remember This

Memorize this line: the public interest in watershed protection is paramount to private interests, and a motion to dismiss for failure to state a cause of action admits well pleaded facts but not those the record shows to be unfounded. Examiners use this case in civil procedure on the scope of a motion to dismiss after a hearing, and in natural resources law on the State's duty to conserve watersheds.