CALAPAN LUMBER COMPANY, INC., PLAINTIFF AND APPELLEE, VS. COMMUNITY SAWMILL COMPANY, ET AL., DEFENDANTS AND APPELLANTS.

All the defendants prayed in their respective answers for the
dismissal of the second amended complaint, in addition to their
counterclaims.

After trial, the Court of First Instance of Oriental Mindoro rendered judgment, the dispositive part of which reads:

Wherefore, this Court renders judgment:

1. Finding:

(a) That the road and bridge in question, known as the Biga-Communal
Goob (from Km. 12.3S to 15.88) was constructed during the period from
1950 to 1952 by the plaintiff at its exclusive expense with the
knowledge and consent of the Provincial Board of Oriental Mindoro;

(b) That before actual construction of said road and bridge the
personnel of the Office of the District Engineer surveyed the lay-out
of the road to be constructed, also at the expense of the plaintiff;

(c) That before the actual construction of the road in question the
plaintiff secured and used road-right-of-way agreements (Exhs. Y, Y-1
to Y-7 and Z-AA), executed in favor of the plaintiff by the owners of
the several portions of land traversed by said road;

(d) That from the completion of the road up to the present the
plaintiff has been contributing to the repair and maintenance of the
said road such as stones, gravel, sand and lumber at its own expense;

(c) That before the completion of the road in question, to the same
has been used by the public without any restriction with the written
consent of the plaintiff as embodied in Resolution No. 222 (Exh. A) and
119 (Exh- B) with the exception of logging and lumber concerns who
might use the road with the permission of the plaintiff;

(f) Th«t Lao Kee (alias Lu Pong), Lee Cok, Tan. Hong, Tan Kiun, Co
G«ac, Yan Ong Chi Hian, Tan Tak Tiap, Kiok Chia and the Community
Sawmill Company had used the road and bridge in question Bomctime
before April 6. 1953, until the issuance of the writ of preliminary
injunction of June 25. 1953, manifest bad faith;

2. Declaring:

(a) That Resolution No. 186, series of 1953, marked Exh. C. is valid
insofar as it repealed Resolution No. 222, series of 1953, marked Exh.
“A”, and Resolution No. 119, series of 1953, marked Exh. B;

(b) That Resolution No. 186, series of 1953, marked Exh. C insofar
as it declared that the road and bridge in question. public. is null
and void the same being in violation of Sec. 2131 of the Revised
Administrative Code;

(c) That the road and bridge in question are of private ownership belonging to the plaintiff;

(d) That the said defendant Lao Kee (alias Lu Pong). Lee Cok, Tan
Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tiik Tiao, Kiok Chia
and Community Sawmill did not have the right to use the road and bridge
in question;

3. Ordering:

(a) That the writ of preliminary injunction issued against the
Community Sawmill Company he made permanent, perpetually restraining
the said defendants Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan
Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao. Kiok Chia and
Community Sawmill Company, their agents, attorneys, or other persons or
entities from acting on their behalf;

(b) The same defendants named in the immediately preceding paragraph
to pay jointly and severally to the plaintiff the sum of P10,000.00 as
attorney’s fees and to pay the costs;

4. Absolving from the third amended complaint the defendants
Marciuno Roque, Pablo Lorenzo, Isaias Fernando, Francisco Infantado.
Bernabe Jamilla and Cenon C. Laurena;

6. Dismissing all the counterclaims filed by the defendants for lack of sufficient merits. (Civil case No. R-542)

From the judgment thus rendered, the defendants Lao Kee (alias Lu
Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak Tiao,
Kiok Chia, all acting under the name and style of Community Sawmill
Company, appealed to this Court. They claim that the trial court
committed the following errors:

1. The lower court erred in holding that the road in question is a
private road and that, therefore, plaintiff could legally deny Us use
to herein appellants.

2. The lower court erred in ordering herein appellants to pay plaintiff attorney’s fees.

3. The lower court erred in holding that plaintiff can recover
expenses of litigation under article 2208 of the Civil Code.

4. The lower court erred in not dismissing the complaint and finding for herein appellants on their counterclaim.

At the trial, the parties submitted to the Court a stipulation of facts which reads:

1. That the parties agree to the existence and authenticity of the
following resolutions which were passed by the Provincial Board of
Oriental Mindoro, as follows:

(a) Resolution No. 22,2. Series of 1950 (Annex “A” of the Third
Amended Complaint), but not its regularity and validity, which must be
proven;

(b) Resolution No. 119, Series of 1953 (Annex “B” of the Third Amended Complaint);

(c) Resolution No. 186, Sertes of 1055, revoking Resolutions Nos.
222. Series of 1950 nnd 119, Series of 1953. of the Provincial Board,
granting the Calapan Lumber Company the exclusive right under certain
conditions to use the Viga-Communal Goob road for a period of twenty
(20) years, and declaring said road as a toll road.

2. That the parties agree as to the existence and authenticity of
the following official communications, indorsements and letters re the
Biga-Communal-Goob read:

(a) Letter dated March 20, 1953 addressed to the Hon. Executive
Secretary, signed l>y Rodolfo Naguit and Joe Ong, both
representatives of the Community Sawmill Company;

(b) 1st Indorsement of Assistant Executive Secretary Lucas Madumba,
dated March 21. 11)53 (Annex “C”, Third Amended Complaint);

(c) 2nd Indorsement of Governor Infantado dated March 23, 1963;

(d) 3rd Indorsement of District Engineer C. C. Laurena dated Match 26, 1953;

(e) 4th Indorsement of Governor Infantado dated March 28, 1953;

(f) Letter of ltodolfo G. Naguit, representative of the Community
Sawmill Company, dated May 4, 1953 and add leased to the Assistant
Executive Secretary, Office of the President;

(g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff
company addressed to Executive Secretary Marciano Roque, dated May 21.
1953 (Annex “F”, Third Amended Complaint) ;

(h) 7th Indorsement of Director of Public Works, Isaias Fernando, dated April 20, 1953 (Annex “D”, Third Amended Complaint) ;

(i) 8th Indorsement of Undersecretary Vicente Orosa, dated April 25, 1953;

(j) 9th Indorsement of Executive Secretary Marciano Roque dated May 11, 1953 (Annex “E”, Third Amended Complaint);

(k) 3rd Indorsement of Acting Executive Secretary Marciano Roque,
dated July 3, 11)53 and the 4th Indorsement of Undersecretary Vicente
Orosa. dated July 16, 1953;

(l) 1st Indorsement of Acting Executive Secretary Marciano Roque, dated July 17, 1953.

Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable Court,
without prejudice to the parties adducing other evidence to prove their
case not covered by this stipulation of facts.

X X X

Resolution No. 222, adopted 4 December 1950, reads:

Whereas, there is nt present an unfinished provincial road in the
barrio of Viga, of the municipality of Calapan, known as the
Biga-Communal Goob road, the construction of which could not be
undertaken by the province due to insufficiency of funds;

Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D.
M. Gotauco, in a letter addressed to the Governor of this province this
made representation to undertake the construction of said road under
certain conditions; and the province is willing to accede to the
request of the . Lumber Co. Inc. and to give it the sole right for its
use, provided that after a period of twenty (20) years, said company
shall donate lo the province the road it had constructed; provided
further that during the said period of 20 years other concerns dealing
in logs and/or lumber may use the same road upon permission granted to
them by the said Calapan Lumber Co., Inc.. and provided finally that
said road is open to all non-logging concerns or individuals during the
said period of 20 years; Now, therefore, be it:

RESOLVED , That the Provincial Board of Oriental Mindoro grants, as
hereby is granting, the Calapan Lumber Co., Inc. to undertake the
construction of the unfinished provincial road to the barrio of Viga,
municipality of Calapan, known as the Viga-Connnunal-Goob-Road, subject
to the stipulation stated above; and

RESOLVED FURTHER , That copies of this resolution be furnished the
District Engineer and the Calapan Lumber Co., Inc., through its
President, Mr. D. M. Gotauco, for the information.

X X X

Resolution No. 119, adopted 6 April 1953, reads:

Whereas, under Resolution No. 222, series of 1950, the Provincial
Board of Oriental Mindoro under the former administration, granted the
Calapan Lumber Co., Inc. the right to undertake the construction of the
unfinished Viga-Communal-Goob provincial road the sole right for its
use, under the following conditions:

(1) That after a period of twenty (20) years, said company shall donate to the province the road it had constructed;

(2) That during the said period of 2G years other concerns dealing
in logs and/or lumber may use the same road upon permission granted to
them by the Calapan Lumber Co.. and

(3) That said road is open to all non-logging concerns or individuals during the raid period of 20 years.

Whereas, according to the records of the Provincial Board the said
resolution has not been amended or modified up to the present, and,
therefore, the same is still in force and binding as per agreement
stipulated therein;

Whereas, this Board has received reliable information to the effect
that another certain lumber company is attempting to use, or has
actually used the same road, by allowing to pass thru it its heavy
trucks and tractors without securing any permission from the Culapari
Lumber Co., Inc. to the detriment and prejudice of the interests of the
latter lumber company which shouldered the cost of its completion in
accordance with the rights granted to it by the province; and

Whereas, after a cartful consideration of the matter this Board is
of the opinion that the right of the Calapan Lumber Co., Inc., over the
said road as stipulated in the conditions set forth in the resolution
must be upheld for obvious reasons; Now, therefore, be it

RESOLVED by the Provincial Board of Oriental Mindoro to authorize,
as it hereby authorizes, the Calapan Lumber Company. Inc. to prohibit
the use of the Viga-Cominunal-Goob provincial road, from point Km.
12.38 up to Km. 15.88 of said road, by any other concern or company
dealing in logs and/or lumber, without the permission or consent of the
said Calapan Lumber Co., Inc., in accordance with one of the
stipulations or conditions agreed upon in Resolution No. 222, series of
1950, of the Provincial Board; and

RESOLVED, FURTHER, That the District Engineer and the Calapan Lumber
Co., Inc. be furnished with copies of this resolution, for their
information.

X X X

Resolution No. 186, adopted 19 June 1953, reads:

REVOKING RESOLUTIONS NOS. 222, SERIES OP 1950, AND 119. SERIES OF
1953, OF THE PROVINCIAL BOARD, GRANTING THE CALAPAN LUMBER COMPANY THE
EXCLUSIVE RIGHT UNDER CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB
PROVINCIAL ROAD FOR A PERIOD OF TWENTY (20) YEARS.

Whereas, under Resolution No. 222, series of 1950, the Provincial
Board of Oriental Mindoro, under the former provincial administration,
granted the Calapan Lumber Co., Inc., an authority to undertake the
construction of the unfinished Viga-Goob provincial road from Point Km.
12.38 to Km. 15.88. and the exclusive right for its use, under certain
conditions;

Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent
parts of which are quoted hereunder, the Honorable, the Executive
Secretary, to whom the case regarding this matter was appealed for
decision, and upon the recommendation of the Director of Public Works
and with the concurrence of the Undersecretary of Public Works and
Communications, ruled that provincial roads are considered as
properties for public use and the Provincial Board may not therefore
grant the exclusive use thereof to any private individual or entity
which would discriminate against or exclude the general public from a
reasonable use thereof, and therefore, the resolution in question
should be revoked:

In this connection, it should be stated that provincial roads are
properties for public use and the provincial board may not grant the
exclusive use thereof to any private individual or entity or enter into
a contract or agreement which would tend to discriminate against or
exclude the general public from a reasonable use thereof. Resolutions
Nos. 222, series of 1950, and 119, series of 1953. of the Provincial
Board, granting the Calapan Lumber Company an exclusive right to use
the said road for a period of twenty (20) years and to prohibit lumber
or logging concerns from using the road in question without the
company’s permission, should therefore be revoked. In consonance with
the policy of the law, and as correctly suggested by the Director of
Public Works and the Undersecretary of Public Works and Communications,
the portion of the Viga-Communal Road from Km. 12.38 to 15.88. having a
length of 3.5 kilometers, should be declared a toll road in order to
raise funds for its maintenance and with which to reimburse the Calapan
Lumber Company for the expenses the latter had incurred in the
construction of this portion of the road.

Whereas, in view of the said ruling, this Board has been requested
to take immediate action on the matter, to declare the above-said
portion of the Viga-Communal-Goob provincial road as a toll road; and

Whereas, according to an estimate made by the Office of the District
Engineer the Calapan Lumber Company has spent for the construction of
the portion of the road in question having a length of 3.5 kilometers,
the amount of P25,000.00 more or less; Now therefore, be it—

RESOLVED, That Resolution Nos. 222, series of 1950, and 119, series
of 1953, of the Provincial Board, which grants the Calapan Lumber Co.,
Inc., the exclusive right to use the Viga-Communal-Goob provincial road
a good period of 20 years, under certain conditions, be, and hereby
are, revoked;

RESOLVED, FURTHER, That portion of said Viga-Communal-Goob
provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be and
hereby is, declared PROVINCIAL TOLL ROAD, under the provisions of
Section 2131 of the Revised Administrative Code;

RESOLVED, FURTHER, That the following toll rates to be paid by any
motor vehicle for the use of the provincial road be, and hereby are,
fixed, effective today, June 19, 1953, the proceeds from which shall be
used for the maintenance of the said road and the balance thereof for
the reimbursement to the said company for the expenses it had incurred
in the construction for said portion of the road:

For every truck, one way ……………………………………………. P1.00

For every weapon carrier, one way ……………………………………60

For every jeeney ……………………………………………………………30

PROVIDED, however, that the portion of the road declared herein as
provincial toll road shall continue to be so up to and until the amount
spent by the Calapan Lumber Company for its construction shall have
been covered by reimbursement to said company; and

RESOLVED, FINALLY, That copies of this resolution be forwarded to
His Excellency, the President of the Philippines, thru the Director of
Public Works and the Honorable, the Secretary of Public Works and
Communications, Manila.

X X X

Resolution No. 169, adopted 21 April 1956, revoked Resolution No..
186 insofar an it declared Provincial Toll Road, that part of the road
involved in this case.

There seems to be no doubt that Resolutions Nos. 222 and 119,
adopted by the Provincial Board of Oriental Mindoro quoted above, were
ultra vires, because sections 2067 (f) and (g) on powers of the
provinces as political bodies corporate; 2102 (g) on powers of the
provincial boards; 2106 (f) on powers of the provincial boards to be
exercised with the approval of the Department Head; and 2113 (a) on
road and bridge fund, of the Revised Administrative Code, do not
authorize the Provincial Board of Oriental Mindoro to pass and adopt
said resolutions. The contention that the Provincial Board of Oriental
Mindoro under section 2106 (g) invoked by the appellee is authorized to
pass the resolutions Nos. 222 and 119 quoted above, is untenable,
because said paragraph of the section authorizes the Provincial Board
“to permit, upon favorable recommendation by the Secretary of Public
Works and Communications, and subject to such conditions as may
properly protect the public interests, the construction and
maintenance, for private use, of railways, conduits, and telephone
lines across public thoroughfares, streets, roads, or other public
property, and in the province: Provided, That such construction and
private use shall not prevent or obstruct the public use of such
thoroughfare, streets, roads or other public property, and that the
permit granted shall at all times be subject to revocation by the
Secretary of the Interior, if, in the judgment of that official, the
public interest requires it.” Consequently, Resolution No. 186 revoking
the two previous resolutions was in order.

The road known as the Viga-Communal-Goob connecting two finished or
completed parts of the provincial road, from kilometer 12.38 to 15.88,
as laid out by the personnel of the office of the District Engineer was
planned or intended to be laid out and constructed by the Provincial
Government of Oriental Mindoro to complete said road. The fact that the
survey, lay-out and actual construction of the unfinished part of the
road were done at the appellee’s expense, does not convert said road
after construction into a private road, for it does not appear that the
parts of the land where the road was laid out and constructed belong to
or are owned by the appellee. The evidence shows that the owners of
such parts of land ceded their parts of the land owned by them without
any consideration because of their desire to have the road completed or
to connect the ends of two completed parts of the road. It may be
conceded that the appellee built the road in question in good faith;
and such being the case, it may be argued that the appellee is entitled
to keep or have possession of the road until after it shall have been
reimbursed of the expenses it had incurred in constructing and
maintaining the road in good condition. The provisions of the Civil
Code on the right of a builder in good faith on a private land ^[1] cannot
be invoked and applied to the road in quest on, because public interest
is involved and the people living in that part of the province are
entitled to use the road. It is true that that part of the Resolution No. 186 above quoted
converting the road in question into toll road contravenes section 2131
of the Revised Administrative Code, because in the case of road the
recommendation of the Secretary of Public Works and Communications and
the authorization of the President of the Philippines had to be secured
and such recommendation and authorization had not been obtained.

Upon the foregoing considerations, this Court is of the opinion, and
so holds, that the road involved in this case cannot be declared
private property, and for that reason the Provincial Board of Oriental
Mindoro may elect between paying the appellee the total cost of the
construction of the road and together with lawful interest from the
date of actual disbursement by the appellee to the date of payment by
the Province of Oriental Mindoro within a reasonable period not to
exceed one year from the date this judgment shall become final; or upon
securing the recommendation of the Secretary of Pubic Works and
Communications and authorization of the President of the Philippines to
designate such road and toll road, to raise the necessary fund to
reimburse the appellee of the total cost of construction of the read,
together with lawful interest from tho date of actual disbursement by
the appellee to the date of payment by the Province of Oriental Mindoro,
and the latter is ordered to refund the amount paid for is by the
appellee during the enforcement of Resolution No. 186 which, as above
stated, was unauthorized. The judgment appealed from making final the
preliminary writ of injunction and ordering the appellants to pay the
appellee the sum of P10,000 as attorney’s fees, are reversed and set
aside. The rest of the judgment appealed from not inconsistent with
this opinion is affirmed, without pronouncement as to costs.

Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Regala, and Makalintal, JJ., concur.