HON. ROBERTO V. REYES, DEPUTY EXECUTIVE SECRETARY, HON. RONALDO ZAMORA, ASSISTANT EXECUTIVE SECRETARY HON. JOSE LEIDO, JR., SECRETARY OF NATURAL RESOURCES, AND HON. RAMON N. CAS…

This is a Petition for Review on Certiorari of the
Decision of the former Court of Appeals in its CA-G.R. No. 06922-SP, affirming
the judgment of the then Court of First Instance of Agusan del Sur in Civil
Case No. 135, instituted by private respondents Julito Geolina (GEOLINA, for
short) and Columba Pol (COLUMBA, for short) against Anita Abad Karaos (ABAD
DAUGHTER, for short), Benigno
Karaos (KARAOS, for short) and petitioners herein (the LANDS OFFICIALS, for
short, inclusive of their subordinate).

The original pleading filed with the Trial Court on October 14,
1975, was a Petition for Certiorari alleging legal error and abuse of
discretion on the part of the LANDS OFFICIALS in their final resolution of a
conflict between GEOLINA and COLUMBA on one part, and ABAD DAUGHTER and KARAOS
on the other part. Their controversy
was in regards to the adjudication for private or public sale of a public land
lot of 211 sq. m. in San Francisco, Agusan del Sur (the ABAD-POL LOT, for
short), which was the subject of conflict between COUMBIA and ABAD DAUGHTER,
and another public land lot of
216 sq. m. located in the same municipality, (the KARAOS-GEOLINA LOT, for
short) which was the subject of conflict between GEOLINA and KARAOS. The ABAD DAUGHTER has assumed the role of
sole successor-in-interest of her deceased father, Manuel Abad, Sr.

In the Trial Court, no testimonial
evidence was adduced. The parties, in
the main, merely submitted documentary evidence, on which they were placing
reliance and which were admitted by the Court. Ordinarily, documentary evidence cannot be invoked against a party who
did not sign the same, or is otherwise estopped to deny its contents.^[1]
Of course, there are documents, not proven wrong, which by themselves alone can
establish facts. A certificate of
death, not proven wrong, can establish the fact and date of a person’s death.

In the case at bar, the exhibits cannot be indisputable bases for the establishment of controversial facts. For in­stance, Exhibit “I”, an Order of the LANDS OFFICIALS, stated:

“In the
re-investigation, it was found that both protestants Julito Geolina and Columba
Pol are in actual possession and Occupation of the
lots in question. The said possession
and Occupation was ascertained to have started in 1959 ……

x x x x x x x

Respondent’s claim to the building and/or structure occupied by
protestants Geolina and Columba Pol appears
to be untenable. It not in consonance
with human nature that such a situation could be tolerated by anyone. If it is true that protestants were merely
allowed to stay in the building allegedly constructed by the respondents on the
land in question, respondents could have easily recovered possession of the
same by the simple expedient of filing an ejectment case in court. But this, they (respondents) never did, thus
making it quite obvious that the structure existing in the premises of the lots in question is
really owned by the protestants ……“

In Exhibit “A“, the LANDS OFFICIALS found that
the ABAD-POL LOT

” …… has
been actually occupied by Columba Pol since 1960 up to the present; that she has constructed on the land a house valued at P8,000.00 and that
respondent Manuel Abad, Sr. whose whereabouts is unknown has not occupied or
introduced any improvement thereon;“

On the other hand, in the Order Exhibit “J“, the
LANDS OFFICIALS said:

“x x x It
appears, as it has been sufficiently
proved by respond­ents, that as early as 1960 a house was constructed by them
on the land in question. This fact is
amply established by exhibits ‘D, D-1, D-2 and E’ of respondent Abad and
exhibits ‘B, C, C-1 and C-2’ of respondent Karaos. Being related by affinity, (Abad is the father-in-law of Benigno
Karaos) their house was constructed in such a way that it occupies both the
lots applied for by Manuel Abad, Sr., (Lot 3678) and that of Benigno Karaos
(Lot 3679). In 1960, respondent Karaos
was assigned to Manila and respondent Manuel Abad, Sr., left for Cebu for
medical treatment. They entrusted the
land in question to Romana Pol,
sister of protestant Columba Pol for her to oversee and at the same time,
authorized Manuel Abad, Jr., to act as their administrator. Unfor­tunately, however, the said Romana Pol
allowed her sister Columba Pol and Julito Geolina to enter and stay in the
premises of the land in question.“

What may be deduced from the foregoing are the following
assumptions:

(a)   As
is admitted that Manuel Abad, Sr. never return­ed from his trip to Cebu for
medical treatment, he probably died in Cebu in 1960.

(b)   KARAOS (married to ABAD DAUGHTER) left San
Francisco for Manila in 1960, and he was served with summons in this case in
Metro Manila on November 12, 1975. The
indication is that, from 1960 to 1975,
he had been residing in Metro Manila.

(c)   There is an indication that, besides the ABAD
DAUGHTER, Manuel Abad, Sr. had another offspring named Manuel Abad, Jr.

(d)   The claim that Manuel Abad, Jr. was left
administrator of the two lots here in question, while Romana Pol was entrusted “to oversee“ the property, can be related to
the fact that COLUMBA was already in possession of the ABAD-POL LOT which, being “commercial“, presupposed that she had a
store or other commercial venture therein. It can also be related to the finding of the LANDS OFFICIALS in Exhibit “I“ that:

“x x x When respondents left Agusan, they
allegedly entrusted the care of the land in question to Manuel Abad, Jr. If this is true, how would it have been
possible for protestants to have been able to gain access to and stay in the
premises of the land in question without Manuel Abad, Jr. doing anything about
it. It is claimed that Manuel Abad, Jr.
informed respond­ent Karaos of
the construction being made by Romana Pol, a relative of Columba Pol on the
land in question, yet, they appear not to have done anything about it. Apparently, respondents do not wish to make
known the fact that they have allowed some other persons to benefit from and
use the land in question which is violative of paragraph 4 of their
applications“

Besides the documentary evidence, the parties stipulated on facts
as follows:

“2.    The truth of the allegations in paragraphs C, D, E, F, G, H, I, J, K, L, M, N, O and P of Part
III of the petition.

“3.    The petitioners have been in the actual occupancy and posses­sion
of Lots Nos. 3678 and 3679, San Francisco, Agusan del Sur, since 1960 continuously up to the present, and that petitioners are
actually residing in said lots; and

“4.    Lots Nos. 3678 and 3679 are commercial lots, located in the
poblacion of San Francisco, Agusan del Sur. “

The cited paragraphs in Part III of the original petition were merely
a recital of the administrative proceedings before the LANDS OFFICIALS. The mention of the year 1960 is material to
the claim of COLUMBA and GEOLINA that they had better rights than ABAD DAUGHTER
and KARAOS to pur­chase the lots. The
reference to the residence in the two lots of COLUMBA and GEOLINA,
together with the statement that said lots are “commercial“,
are relevant to the construction of RA 730.^[2]

In effect, there are two questions to be resolved in this
case. The first issue is the determination
of which of the tandem COLUMBA/GEOLINA and the tandem ABAD DAUGHTER/KARAOS is
entitled to purchase the two lots here involved. The second issue is to determine whether a lot used for both
residential and commercial purposes is within the ambit of RA 730.

The facts of the first issue may be briefly related as follows:

1. (a)  In January 1959, Manuel Abad, Sr. filed a
miscellaneous sales application for the ABAD-POL LOT. Two months later, his son-in-law KARAOS also filed a
miscellaneous sales application for the KARAOS-GEOLINA LOT.

(b)  The two lots are fronting the San Francisco
public market and can be considered “commercial“ properties.

2.   According to Exhibit “I“,
Manuel Abad, Sr. and KARAOS “each
have a patented agricultural land and a residential land“ within San Francisco, while COLUMBA and GEOLINA “are still landless“.

3. (a)  In 1959/1960 Manuel Abad, Sr. left for Cebu
for medical treatment, while KARAOS also left for Metro Manila where he has
remained a resident.

(b)  In 1960, COLUMBA was in possession of the ABAD­-POL
LOT and had constructed a house thereon, while GEOLINA was in possession of the
KARAOS-GEOLINA LOT and had built a house thereon.

4.   The houses of COLUMBA and GEOLINA are their
residences. It can also be presumed
that they were conducting stores or other “commercial“
ventures in the houses.

5. (a)  In June 1969, COLUMBA and GEOLINA filed
separate protests against the sales application of Manuel Abad, Sr. and KARAOS.

(b)  In
September 1969, COLUMBA and GEOLINA filed their own separate miscellaneous
sales application for the two lots.

6. (a)  On
February 19, 1970, the LANDS OFFICIALS issued two Orders which rejected
the 1959 applications of Manuel Abad, Sr. and KARAOS, and gave due course to
the applications of COLUMBA and GEOLINA.

(b)  Later on, the LANDS OFFICIALS sold the
ABAD-POL LOT to COLUMBA on private sale pursuant to
the provisions of RA 730.

7.   In 1972, ABAD DAUGHTER and KARAOS filed two
separate protests against the sales application of COLUMBA and GEOLINA. In Exhibit “I“, the
LANDS OFFICIALS rejected the protests of ABAD DAUGHTER and KARAOS and upheld
the proceedings in regards to the applications of COLUMBA and GEOLINA.

8.   Subsequently, the LANDS OFFICIALS reversed
themselves and rejected the sales applications of COLUMBA and GEOLINA, and gave
due course to the sales applications of Abad, Sr. and KARAOS, and ordered the public
sales of the lots pursuant to the provisions
of RA 730.

9.   COLUMBA and GEOLINA then initiated the
instant case before the then Court of First Instance of Agusan del Sur.

The Trial Court held that COLUMBA and GEOLINA had better rights
than ABAD DAUGHTER and KARAOS to purchase the two lots, and that under RA 730,
those lots, used as residences, can be sold at private sale. The LANDS OFFICIALS were ordered to issue a
sales patent to COLUMBA, and to proceed with the private sale of
the KARAOS-GEOLINA LOT, on the sales application of GEOLINA. On appeal to the Appellate Court, the
judgment of the Trial Court was affirmed.

From the decision of the Appellate Court, the ABAD DAUGHTER and
KARAOS have not come to this instance. Only the LANDS OFFICIALS have filed the Petition for Review on Certiorari
of the Appellate Court’s decision. In
their Petition and in their Brief, the LANDS OFFICIALS have concentrated on the
second issue; that is, they have sustained the proposition that, under RA 730,
only residential lands can be sold through private sale. Although they have
prayed for reversal of the Decision of the Appellate Tribunal, they have not
attempted to show that the Appellate Tribunal had erred in extending
preferential rights to purchase to COLUMBA and GEOLINA.

We agree with the conclusions of both Trial and Appellate Courts
that COLUMBA and GEOLINA should be preferred as purchasers of the two lots in
question. Section 65, as amended, of CA
141 provides that a sales applicant “shall
make improve­ments of a permanent character appropriate for the purpose for
which the land is purchased, shall commence work thereon within six months from
the receipt of the Order of award, and shall complete the construction of said
improvements within eighteen months from the date of such award. “ Because Manuel Abad, Sr. and
KARAOS, after filing their sales applications in 1959, left San Francisco, it
cannot be said that they had made and completed improvements of a permanent
character “within eighteen
months from the date of such award“,
because, in 1960, the lots were already occupied by COLUMBA and GEOLINA who had already
built, or had begun building, their own houses thereon. On the other hand, COLUMBA and GEOLINA,
whose sales application had been filed in 1969 and approved in 1970, could be
deemed to have complied with the statutory requirements before ABAD DAUGHTER
and KARAOS filed their protests in 1972.

It should be easy to conclude that inaction on the part of Manuel
Abad, Sr. and KARAOS, from 1960 to 1972, to pursue their sales applications can
be viewed as actual abandonment of their rights under those 1959
applications. Section 65 tacitly
requires that sales applicants should remain in posses­sion, actual or
constructive, from the time applications are submitted to the date of actual
purchase. That requirement cannot be
said as having been complied with in respect of Manuel Abad, Sr. and
KARAOS. Incidentally, it might be
pointed out that, in Exhibit “I“, the LANDS OFFICIALS had
correctly considered in favor of COLUMBA and GEOLINA the fact that both ABAD
DAUGHTER and KARAOS “each
have a patented agricultural land and a residential land within Pls-67 while
protestants (COLUMBA/GEOLINA) are still landless“.

It might further be stated now that if the LANDS OFFICIALS had
delineated the controversy between COLUMBA/GEOLINA and ABAD DAUGHTER/KARAOS in
their petition for review on certiorari, the chances could have been
that due course would have been granted only in respect of the second issue.

We also agree with the Appellate Court in regards to the second
issue. Section 58 of the Public Land
Act provides:

“SEC. 58. Any tract of land of the public domain
which, being neither timber nor mineral land, is intended to be used for
residential purposes or for commercial, industrial, or other productive
purposes other than agricultural, and is open to disposition or concession,
shall be disposed of under the provisions of this chapter and not otherwise.“

It will be noted that classification under the section is not
based on the nature of the land, which would be impractical, but is
based “purposes“ of use. The problem which can arise is in respect,
as in this case, of land the purpose of which is both residential and
commercial.

We refer to other relevant statutes for a derivation of meaning. PD 20 uses the term “dwelling
unit“. It had been generally conceded that the term is not limited to a unit exclusively
used as a residence, but also covers houses used as residences and also for
small stores and small “commercial“ purposes.

In BP No. 25, it has been
expressly provided that a residential unit includes “those used for home industries, retail stores or other business
purposes if the owner thereof and his family actually live therein and use it principally
for dwelling purposes“. Since COLUMBA and GEOLINA have no residences in San Francisco, the lots
they have applied for should be considered as being used principally for
dwelling purposes although they
may have a store or other commercial venture therein which would amount to “commercial“ purposes.

In RA 730, the title uses
the term for “residential purposes“. Section 1 of the statute uses
the clause “established his residence on a parcel of
public land“. Those terms apply to the situation of COLUMBA and GEOLINA. Even if their intention is to acquire the
lots both for residence and commercial venture, the principal purpose
should be residential. Residence is a
requirement of a person with priority to the requirement for a place of
business. Hence, we consider that the
lots here involved are for “residential purposes“ and are actually “established“ residences within
the meaning of RA 730 and can be sold on private sales. Of course, lots purely for “commercial purposes“ will clearly be outside the scope of the
statute.

The LANDS OFFICIALS,
prior to their change of mind, had previously held in the specific case of
COLUMBA that public lots used both for residential and commercial purposes are
covered by RA 730 (Exhibits “G“ and “H“). The Trial Court, confirmed by the Appellate Court, had made reference to
previous instances where the LANDS OFFICIALS had
disposed of lots, similar to those applied for by COLUMBA and GEOLINA, under RA
730. Said the Trial Court.

“The
petitioners have demonstrated with their Exhibits P, P-1, P-1-A, P-1-B, and P-2 that the Bureau of Lands has
disposed of two commer­cial lots (Lots Nos. 3682 and 3687 ‘within the vicinity
of the Public Market of San Francisco, Agusan del Sur, just across the street
from, the Public Market on the Western side, along the same line where Lots
Nos. 3678 and 3679 (in question) are located’), one to a Tito Contreras, and
the other to a Rodolfo Cornejo, without benefit of public bidding and in
accordance with Republic Act 730. What
the actual number of com­mercial lots in the San Francisco public market area
have been similar­ly disposed of and already titled is not shown. But the Court can safely assume that there
are more for if two can do it, why not the other applicant-occupants, as peti­tioners are now
situated? Petitioners have likewise
shown with their Exhi­bits Q, Q-1, Q-1-A, Q-2 and Q-2-A that the said Bureau of
Lands has similarly disposed of one commercial lot (Lot 803-A, Cad-11070-D,
equivalent to Lot No. 820, Cad-84) situated in Poblacion, Butuan City to one
Ernesto Reyes, in accordance with Republic Act 730 and without public bidding.

“The foregoing
are mere samples of instances where the Bureau of Lands has sold to qualified
applicant occupants lots classified as commercial in its survey without public
bidding and pursuant to the provisions of Republic Act 730. It would not, therefore, be farfetched to
presume that a good number of occupants of public lands suitable for commerce
and classified as commercial, has succeeded in securing title to said lots
under and pursuant to Republic Act 730 since June 18, 1952, when said law was
enacted. What then will happen if the
Court were to give nod to and
uphold the respondents’ suggestion that said titles be done away with and
nullified for having allegedly been issued and secured in violation of
law. x x

“Art. 10 of the
Civil Code reads –

“ART. 10. In case of doubt in the interpretation or
appli­cation of laws, it is presumed that the law making body in­tended right
and justice to prevail.“

It is the sense of the Court that by making
Republic Act 730 applicable to commercial and industrial lots used at the same
time as home lots as well as to lots classified as resi­dential would be more
in keeping with right and justice.“

Together with the Appellate Court, we subscribe to the foregoing dissertation. If the LANDS OFFICIALS were a doctrinal Court,
the equitable and practical principles of “stare decisis“
and “rule of property“ might be invocable in this
case.

All told, we are ruling that when public land lots of not more
than 1,000 sq. ms. are used, or to be used as a resi­dence and for “commercial“ or “industrial“
purposes, expected to be small ventures, they can be sold on private sales
under the provisions of Republic Act No. 730.

WHEREFORE, the
petition filed herein is hereby ordered dismissed.

SO ORDERED.

Teehankee, (Chairman), Plana, Relova, and Gutierrez, Jr., JJ., concur.

^[1]
Shaw v. American Ins. Union, 33 SW 2d. 1055.

^[2]
AN ACT TO PERMIT THE SALE WITHOUT PUBLIC AUCTION OF PUBLIC
LANDS OF THE REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL PURPOSES
TO QUALIFIED APPLICANTS UNDER CERTAIN
CONDITIONS.

Section 1. Notwithstanding the provisions of sections
sixty-one and sixty-seven of Commonwealth Act Numbered One hundred forty-one,
as amended by Republic Act Numbered Two hundred ninety-three, any Filipino
citizen of legal age who is not the owner of
a home lot in the municipality or city in which he resides and who has in
good faith established his residence on
a parcel of the
public land of the Republic of the Philippines which is not needed for the public service, shall be
given preference to purchase at a private sale of
which reasonable notice shall be given to
him not more than one thousand square meters at a price to be fixed by the Director of Lands with the approval of the Secretary of
Agriculture and Natural
Resources. It shall be
an essential condition of this sale that
the occupant has constructed his
house on the land and actually resided
therein. Ten per cent of the purchase price shall be paid upon the approval of the sale and the balance
may be paid in full, or in ten equal annual installments. (Un­derscoring supplied).

x x x     x x x     x
x x

Sec. 3. The provisions of the Public Land Act with respect to the sale of
lands for residential purposes which are not inconsistent herewith shall be
applicable.”