Rural Bank of Anda, Inc. vs. Roman Catholic Archbishop of Lingayen-Dagupan

Where land remains part of the public domain because neither a private claimant nor a municipal corporation has acquired it by purchase, grant, or other mode of acquisition, a sangguniang bayan exceeds its authority in converting the land to commercial use and authorizing a lease over it; the resolutions and the lease are void.

Lot 736 is a parcel in the Poblacion of Binmaley, Pangasinan, forming part of Lot 3; it lies across from the Mary Help of Christians Seminary, which is on Lot 1. Lot 1 is titled in respondent’s name under TCT 6375, but TCT 6375 carries an annotation that ownership of Lot 3 is claimed by both respondent and the Municipality of Binmaley. Neither claimant holds a Torrens title over Lot 736, and the Municipality’s authority to treat that lot as available for commercial leasing is the backdrop to the dispute.

Cadastral Lot 736, with an area of about 1,300 square meters, is part of Lot 3 in the Poblacion of Binmaley, Pangasinan. Cadastral Lot 737, known as Imelda’s Park, and Cadastral Lot 739, on which a waiting shed for commuters stands, also form part of Lot 3. Lot 3 is bounded on the north by Lot 1 of Plan II-5201-A and on the south by the national road, and in front of Lot 736 is the building of Mary Help of Christians Seminary on Lot 1. Lot 1 adjoins Lot 3 on the north and is titled in respondent’s name under TCT 6375; an annotation on TCT 6375 states that ownership of Lot 3 is claimed by both respondent and the Municipality of Binmaley. In 1958, the Rector of the seminary ordered the construction of the fence separating Lot 736 from the national road to prevent the caretelas from parking because the smell of horse manure was already bothering the priests living in the seminary. The concrete fence enclosing Lot 736 has openings in the east, west, and center and has no gate, so people can pass through Lot 736 at any time of the day.

On 22 December 1997, the Sangguniang Bayan of Binmaley passed Resolution Nos. 104 and 105. Resolution No. 104 converted Lot 736 from an institutional lot to a commercial lot, while Resolution No. 105 authorized the municipal mayor to enter into a 25-year contract of lease with Rural Bank of Anda over a 252-square-meter portion of Lot 736. In December 1997, Fr. Arenos, director of the seminary, discovered that a sawali fence was being constructed enclosing a portion of Lot 736. In January 1998, Mayor Rolando Domalanta came to the seminary to discuss the situation, and he and Fr. Arenos agreed that construction of the Rural Bank of Anda building should be stopped. On 24 March 1998, respondent requested Mayor Domalanta to remove the sawali fence and restore the concrete fence. On 20 May 1998, Mayor Domalanta informed respondent that construction of the Rural Bank of Anda building would resume but that he was willing to discuss with respondent to resolve the problem concerning Lot 736.

On 1 June 1998, respondent filed a complaint for Abatement of Illegal Constructions, Injunction and Damages with Writ of Preliminary Injunction in the RTC of Lingayen, Pangasinan. On 24 August 1998, the trial court ordered the issuance of a writ of preliminary injunction. The RTC found that Lot 736 was not covered by any Torrens title either in respondent’s name or in the Municipality’s name. The records showed that no document of ownership for Lot 736 was ever presented to the Land Management Services; the Assistant Chief of its Aggregate Survey Section in Region I testified to that effect. Respondent’s witnesses themselves testified that Lot 736 was used by the people as a pathway, parking space, and playground. The Municipality’s Property Identification Map, Tax Mapping Control Roll, and Lot Data Computation in its name merely showed that it was a claimant, and the chief of the Survey Division of the DENR in San Fernando City, La Union testified that the cadastral survey of Lot 736, surveyed for the Municipality in 1989, had not been approved and was based on a Lot Data Computation likewise contracted by the Municipality in 1989. The records further showed that Lot 736 was used as a pathway going to the school, the seminary, or the church, which are on lots adjoined to Lot 736, and was also used for parking and playground.

• Validity of Sangguniang Bayan Resolutions: Whether Resolution Nos. 104 and 105 of the Sangguniang Bayan of Binmaley are valid.

• Validity of Sangguniang Bayan Resolutions: No. Resolution Nos. 104 and 105 are void because Lot 736 remains part of the public domain owned by the State, and the Municipality of Binmaley cannot appropriate public land without a prior grant from the government; the lease with Rural Bank of Anda is consequently void.

• Validity of Sangguniang Bayan Resolutions: The SC began from the admission of both respondent and the Municipality of Binmaley that neither had title over Lot 736. The Assistant Chief of the Aggregate Survey Section of the Land Management Services in Region I testified that no document of ownership for Lot 736 was ever presented to their office. Respondent’s claim of open, continuous, adverse, and uninterrupted possession was contradicted by its own witnesses, who testified that Lot 736 was used by the people as a pathway, parking space, and playground. The Municipality’s Property Identification Map, Tax Mapping Control Roll, and Lot Data Computation merely showed that it was a claimant; the chief of the Survey Division of the DENR in San Fernando City, La Union testified that the 1989 cadastral survey for the Municipality had not been approved, and the survey was based on a Lot Data Computation likewise contracted by the Municipality in 1989. The records showed that Lot 736 was used as a pathway going to the school, seminary, or church, and for parking and playground—in other words, by the public in general. Because neither respondent nor the Municipality proved a right over Lot 736, and because Lot 736 had never been acquired by anyone through purchase, grant, or any other mode of acquisition, it remained part of the public domain and owned by the State. The SC invoked Hong Hok vs. David for the rule that no public land can be acquired by private persons without a grant, express or implied, from the government, and that a title from the State or another recognized mode of acquisition must be shown. It also invoked the Regalian doctrine and Article XII, Section 2 of the Constitution, under which all lands of the public domain are owned by the State. Since municipal corporations cannot appropriate public or government lands without prior grant from the government, the Sangguniang Bayan of Binmaley exceeded its authority in passing Resolution Nos. 104 and 105. The resolutions were void, and the contract of lease between the Municipality and Rural Bank of Anda over a portion of Lot 736 was also void.

• Regalian doctrine — All lands and waters of the public domain are owned by the State. The SC applied it to Lot 736 because neither respondent nor the Municipality proved acquisition by purchase, grant, or other mode, so the lot remained public domain.
• Public land cannot be acquired by private persons without a grant from the State — Citing Hong Hok vs. David, the SC held that no public land can be acquired by private persons without any grant, express or implied, from the government; a title from the State or another recognized mode of acquisition must be shown. Since no such showing was made, Lot 736 remained public.
• Municipal corporations cannot appropriate public or government lands without prior grant — The SC held that the Municipality of Binmaley could not treat Lot 736 as its own and lease a portion to Rural Bank of Anda absent a prior grant from the government; the Sangguniang Bayan therefore exceeded its authority.
• Void resolutions and lease over public-domain land — Because the resolutions converted public-domain land to commercial use and authorized a lease without authority, Resolution Nos. 104 and 105 were void, and the lease contract was likewise void.

• "Both respondent and the Municipality of Binmaley failed to prove their right over Lot 736. Since Lot 736 has never been acquired by anyone through purchase or grant or any other mode of acquisition, Lot 736 remains part of the public domain and is owned by the state." — The SC resolves the ownership question and supplies the premise for invalidating the municipal resolutions and the lease.
• "Municipal corporations cannot appropriate to themselves public or government lands without prior grant from the government." — The SC states the rule that directly limits the Municipality of Binmaley’s authority over Lot 736.
• "Since Lot 736 is owned by the state, the Sangguniang Bayan of Binmaley exceeded its authority in passing Resolution Nos. 104 and 105. Thus, Resolution Nos. 104 and 105 are void and consequently, the contract of lease between the Municipality of Binmaley and the Rural Bank of Anda over a portion of Lot 736 is also void." — The SC applies the public-domain rule to strike down both the resolutions and the lease.

• Hong Hok vs. David, 150-C Phil. 542, 549 (1972) — Relied on for the rule that no public land can be acquired by private persons without a grant, express or implied, from the government, and that absent proof of acquisition, the property remains public domain.
• Chavez vs. Public Estates Authority, 433 Phil. 506 (2002) — Cited in support of the Regalian doctrine that the State owns all lands and waters of the public domain.
• Unson vs. Lacson and Genato Commercial Corp., 100 Phil. 695 (1957) — Cited for the rule that municipal corporations cannot appropriate public or government lands without prior grant from the government.

• Article XII, Section 2, 1987 Constitution — Declares that all lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. The SC applied it to hold that Lot 736, never acquired by anyone, remained public domain owned by the State, so the Municipality could not convert or lease it.