1 Property I | 02 October 2020 | Atty.

Lopez-Rosario

[G.R. NO. 146616 : August 31, 2006] work of the Iloilo Port. The applicant has also introduced some facilities
on the area applied for in the repair and maintenance of said
SIAIN ENTERPRISES, INC., Petitioner, v. F.F. CRUZ & CO., equipment. A portion of the land applied for has already been
INC., Respondent. filled up by the applicant as they are in need of a land area for the
repair and maintenance of their equipment and in the loading and
DECISION unloading of materials that they use in the construction of the Iloilo City
Port.
CARPIO MORALES, J.:
x x x x 5 (Emphasis and underscoring supplied)cralawlibrary
Western Visayas Industrial Corporation (WESVICO) filed on September
18, 1973 a foreshore lease application over the foreshore land adjacent to Petitioner Siain Enterprises Inc. (SIAIN), who purchased from the DBP
certain lots registered in its name, located in Loboc, Lapuz, La Paz, Iloilo the properties previously owned by WESVICO including Lot 3309, 6 filed
City, including Lot 3309. It eventually withdrew the application and filed on September 29, 1986 a foreshore lease application 7 over the foreshore
on March 1976 a petition for registration over the same foreshore land land adjacent to the properties it bought from DBP.
with the then Court of First Instance of Iloilo. The case was, however,
archived as WESVICO's representative could no longer be contacted. Upon learning that 130 linear meters of the foreshore land subject of F.F.
Cruz's foreshore lease application overlapped that covered by its
It appears that WESVICO ceased to hold operations and its properties foreshore lease application, SIAIN filed on January 9, 1987 a
including Lot 3309 were foreclosed by the Development Bank of the protest 8 alleging that it being the owner of the property adjoining the
Philippines (DBP) which later consolidated its ownership thereon. 1 overlapping area, it should be given preference in its lease.

On July 7, 1983, F.F. Cruz & Co. (F.F. Cruz) filed with the Bureau of On March 6, 1987, the Sangguniang Panglungsod of Iloilo City, by
Lands, Iloilo City, District Land Office VI-1 a foreshore lease Resolution No. 174, 9 approved the recommendation of its Committee on
application 2 over a foreshore land, a portion of which is adjacent to Lot Finance that "for the mutual interest" of F.F. Cruz and SIAIN, SIAIN
3309. The application was docketed as FLA (VI-1) 176. would get 70 linear meters and F.F. Cruz would get 60 linear meters of
the disputed area, in light of its finding that, among other things, both
SIAIN and F.F. Cruz would "contribute substantially to the economic
In the preliminary investigation report 3 on F.F. Cruz' FLA (VI-1) 176,
growth of the City of Iloilo."
Senior Special Investigator Ramon Torre who personally visited and
examined the land applied for recommended that the application be given
due course. Concurring with the Sangguniang Panglungsod, the Land Management
Bureau (LMB) through its Director, by Order 10 of July 15, 1989,
dismissed SIAIN's protest in this wise:
District Land Officer Norberto Bernas thereafter submitted to the
Director of Lands a report, 4 together with relevant documents including
the preliminary investigation report. The pertinent portion of Bernas' . . . While it cannot be denied that protestant is now the registered owner
report reads: of the property adjoining the foreshore in question, the disputed foreshore
cannot be considered to have been built or formed by means of accretion
but is a reclaimed land made by respondent F.F. Cruz and
. . . I personally visited the area applied for by the herein applicant and
Company for the purpose of utilizing the same in the loading and
found that the same is actually occupied and used by them as a sanctuary
unloading of their equipment and materials and for the repair and
of their marine equipment which they are using in their construction
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2 Property I | 02 October 2020 | Atty. Lopez-Rosario

maintenance of said equipment which respondents use in the reclamation 2. . . . committed a grave error in not considering the preferential right of
of the Iloilo City Port. This is supported by the findings of the District the riparian owner/littoral owner, . . . to apply for a lease over the
Land Officer Norberto Bernas who, in his letter dated February 18, 1984 foreshore under controversy; [and]
to this Office, reported that he personally visited the foreshore in
question and found that the same is now actually occupied and used 3. . . . erred in awarding sixty (60) linear meters of the foreshore under
by the respondent company as a sanctuary of its marine equipment controversy to [F.F. Cruz].13
which it is using in its construction work of the Iloilo City Port and that a
portion of the land applied for has already been filled up by the By Decision 14 of May 6, 1997, then DENR Acting Secretary Antonio G.M.
applicant to be utilized in the repair and maintenance of its equipment La Viña set aside the LMB Order, the pertinent portions of which
and in the loading and unloading of materials it uses in the construction decision read:
of the Iloilo City Port. It is therefore clear that the foreshore in question
is neither an accretion nor an accessory to protestants' property. While
It is blatant error to consider the contested area as reclaimed land as it
protestant SEI appears to be owner of the property adjacent to the
has no basis in fact, in law and jurisprudence.
disputed foreshore, it cannot be considered as a riparian owner within the
contemplation of the aforementioned law.11 (Emphasis and underscoring
supplied)cralawlibrary The area in question is unquestionably a natural foreshore for
which various applicants prior to the herein parties have
applied. CRUZ's F.L.A. No. (VI-1) 176 itself which was filed on
Accordingly, the LMB disposed:
July 7, 1983, long after it had allegedly filled up the area
undeniably shows CRUZ's admission that it is a foreshore and not
WHEREFORE, it is ordered that the protest of SIAIN Enterprises, Inc. something else.
be, as it hereby it is, dismissed and this case, dropped from the
records. Both Foreshore Lease Application Nos. (VI-5) 220 and (VI-1)
The assumption that the contested area is a reclaimed land runs smack
176 of SIAIN Enterprises, Inc. and F.F. Cruz and Co., Inc.
against the provision of Article 5 of the Spanish Law on Waters of August
respectively, shall be amended in such a way that SIAIN's application
3, 1866 stating that:
shall cover SEVENTY (70) linear meters of the disputed foreshore
adjoining Lot 3309 while F.F. Cruz's application shall cover SIXTY (60)
linear meters thereof. Accordingly, both applications shall be give due "Lands reclaimed from the sea in consequence of works constructed by
course in accordance with the provisions of the Public Land Law, the State, or by provinces, pueblos or private persons, with proper
otherwise known as Commonwealth Act No. 141, as permission, shall become the property of the party constructing such
amended.12 (Underscoring supplied)cralawlibrary works, unless otherwise provided by the terms of the grant of authority."

SIAIN appealed to the Secretary of the Department of Environment and We cannot find in the records anything to show that a "permission" was
Natural Resources (DENR), arguing that the LMB: ever sought by or granted to, CRUZ for the alleged reclamation of the
land in question.
1. . . . made [a] false assumption of fact when it considered the foreshore
area under . . . controversy as reclaimed land; xxx

It is by reason of the Director of Lands' erroneous classification

of the contested area as "reclaimed" that he awarded 60 linear
meters thereof to CRUZ. However, as heretofore discussed, the
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said area in question is clearly a natural foreshore and SIAIN is By Decision 17 of March 12, 1999, the Office of the President, through
correct in claiming it to be so. Hence, the law that applies in this case then Executive Secretary Ronaldo B. Zamora, reversed the decision of the
is Section 32 of Lands Administrative Order No. 7-1 which was issued by DENR Acting Secretary and reinstated that of the LMB in this wise:
the Secretary of the then Department of Agriculture and Natural
Resources . . . Records reveal that WESVICO, who may be considered as the real
riparian owner, had previously availed itself of the preferential
xxx right to apply for the foreshore area adjacent to its property.
However, it withdrew its application, and instead sought the
It is an undisputed fact that SIAIN is the registered owner of the land titling of said property via a petition for registration filed with
adjoining the foreshore area in controversy. Hence SIAIN is the the court, which eventually archived the case for petitioner's lack
riparian/littoral owner insofar as the contested foreshore area is of interest. In net effect, WESVICO's preferential right adverted
concerned and should enjoy the preferential right to lease the entire one to, albeit initially pursued, was thereafter abandoned due to its
hundred thirty (130) linear meters of said area adjoining its property, voluntary withdrawal of the corresponding application and its
which includes the sixty (60) linear meters thereof awarded to CRUZ in erroneous resort to some other mode of acquisition, i.e., the filing
the questioned Order. of a petition for registration. Consequent to such abandonment, it
may be said that WESVICO had already waived its preferential
x x x x 15 (Emphasis supplied; underscoring partly in the original and right over the controverted area at the time SIAIN purchased the
partly supplied) adjacent property. As vendee, SIAIN was subrogated not only to
the rights and actions of its predecessor-in-interest, WESVICO,
but also to the absence/lack of those.
The DENR Acting Secretary thus ordered that the application of F.F.
Cruz be amended to exclude the disputed foreshore area adjacent to Lot
3309 and that SIAN's application be given due course. Also decidedly going for CRUZ is the fact that it applied for the
disputed area, occupied the same and introduced improvements
thereon long before SIAIN filed its own lease application. Subject
F.F. Cruz appealed to the Office of the President, contending that the
to certain exceptions, it is axiomatic in public land grant that he
DENR Acting Secretary acted with grave abuse of discretion:
who is first in time is preferred or stronger in law - Priore in
tempore, potior jure.
I. IN DISREGARDING THE FINDINGS OF THE DIRECTOR OF
LANDS MANAGEMENT BUREAU THAT THE CONTROVERTED
It may be, as stated by the DENR, that the contested area abuts upon the
AREA IS A RECLAIMED LAND UNDERTAKEN BY APPELLANT F.F.
titled property of SIAIN, a circumstance which ordinarily would accord
CRUZ . . .
that firm a preferential right to lease the property in question, the rule
being that a riparian/littoral owner enjoys preference over the abutting
II. IN RULING THAT [SIAIN] HAS A PREFERENTIAL RIGHT OVER foreshore lands formed by accretion or alluvial deposits.
THE PROPERTY IN DISPUTE; [and]
xxx
III. IN ISSUING THE SUBJECT DECISION CONSIDERING THAT HE
IS NOT EMPOWERED BY LAW OR RULE TO ISSUE THE SAME.16
. . . The principle thus enunciated in Santulan properly applies where the
adjoining lot is a natural foreshore, meaning that the foreshore was
formed by what may rightfully be considered as accretion, or the settling

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down, by natural causes, of soil, earth and other deposits. But such is not Hence, the present Petition for Review filed by SIAIN.
what it obtains in this case, contrary to the bare assertion of the DENR
Acting Secretary that the "area in question is unquestionably a natural SIAIN contends that the evidence overwhelmingly proves that the
foreshore." . . . disputed area is foreshore land and not reclaimed land as found by the
Office of the President. It invites attention to F.F. Cruz's own declaration
xxx in its foreshore lease application that the disputed area is a "parcel of
foreshore land." To SIAIN, this declaration is equivalent to a judicial
Not being the product of accretion, the disputed strip of foreshore land admission which does not require proof and is conclusive as to it.
cannot be the proper subject of a riparian or littoral claim.
Further, SIAIN argues that the records reveal that the only evidence
xxx relied upon by the Office of the President is the Bernas report which
speaks of a portion allegedly filled-up by F.F. Cruz, the identity, location
The actuality of the DENR not formally granting CRUZ a permit to and size of which were never established; and that there is no evidence to
undertake reclamation works on the disputed area can be conceded. prove that the filled-up portion is one and the same as the disputed area,
But in the light of the Bernas report, . . . there can be no quibbling that but that even assuming that it is, F.F. Cruz cannot have a better right
CRUZ occupied and raised, thru filling, the area to its present level, with over it as the reclamation was made without the necessary permit, hence,
the implicit consent, if not approval, of lands authorities. That consent it cannot be allowed to benefit from its own wrongdoing.
and/or approval have been given may be deduced from the fact that the
Bureau of Lands required the payment of, and received from appellant, Furthermore, SIAIN contends that there can be no waiver of preferential
the amount of P40,032.00 as occupation fee. Any suggestion that CRUZ, right over the disputed property, no advice from the Director of Lands
after paying the occupational fee, merely planted itself on the disputed having been communicated to WESVICO, DBP or SIAIN of their
area without as much as dredging and filling the same is unacceptable. In preferential right to lease the adjacent foreshore land, and therefore, the
a very real sense, therefore, the reclamation work undertaken by CRUZ 60 days within which they are supposed to apply 21 has not begun to run.
was with the proper permission, or at least the acquiescence of the
Bureau of Lands, the agency which, following Insular Government v. The key to the present controversy lies in the classification of the
Aldecoa (19 Phil. 505), is empowered to grant such permit in behalf of the disputed area.
DENR Secretary.18 (Emphasis and underscoring supplied)cralawlibrary
The DENR Secretary found that the disputed area is a "natural
In its Petition for Review before the Court of Appeals, SIAIN raised the foreshore," hence, it concluded that SIAIN, being a littoral owner (owner
issues of 1) whether the disputed area is reclaimed land or foreshore land of land bordering the sea or lake or other tidal waters 22 ), has
and if found to be foreshore land, 2) whether SIAIN has preferential right preferential right to lease it as provided in paragraph 32 of Lands
to lease the same.19 Administrative Order No. 7-1 dated April 30, 1936 which reads:

By Decision of July 3, 2000, 20 the appellate court dismissed SIAIN's 32. Preference of Riparian Owner. - The owner of the property
petition, ruling that there is no justification to digress from the findings adjoining foreshore lands or lands covered with water bordering
and conclusions of the Office of the President and the LMB and that upon shores or banks of navigable lakes or rivers, shall be given
administrative matters within the executive jurisdiction can only be set preference to apply for such lands adjoining his property as may
aside on proof of gross abuse of discretion, fraud or error of law. not be needed for the public service, subject to the laws and regulations
governing lands of this nature, provided that he applies therefore within

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sixty (60) days from the date he receives a communication from the suffers by reason of the destructive force of the waters. So, in the case of
Director of Lands advising him of his preferential right.23 (Emphasis littoral lands, he who loses by the encroachments of the sea should gain
supplied)cralawlibrary by its recession.25 (Emphasis and underscoring supplied)cralawlibrary

The DENR Secretary found the LMB's classification of the disputed area Furthermore, as reflected above, the Office of the President, finding that
as "reclaimed" erroneous for lack of basis in fact, law and jurisprudence. F.F. Cruz's occupation and introduction of improvements on the contested
area long before SIAIN filed its lease application, held that "it is
On the other hand, while the Office of the President recognized the axiomatic in public land grant that he who is first in time is preferred or
preferential right of littoral owner WESVICO, it held that it had waived stronger in law."
its preferential right and SIAIN, as successor-in-interest, was subrogated
to WESVICO's right or lack of it. The petition is impressed with merit.

The Office of the President went on to hold that since the disputed area is That the foreshore area had been reclaimed does not remove it from its
already reclaimed land, it cannot be subject to littoral claim, SIAIN, not classification of foreshore area subject to the preferential right to lease of
being the littoral owner within the contemplation of the law, the littoral owner.
citing Santulan v. The Executive Secretary 24 which elucidated on the
principal reason for giving a riparian or littoral owner preferential right, It bears noting that it was not the reclamation that brought the disputed
thus: foreshore area into existence. Such foreshore area existed even before
F.F. Cruz undertook its reclamation. It was "formed by accretions or
Now, then, is there any justification for giving to the littoral owner the alluvial deposits due to the action of the sea." Following Santulan, the
preferential right to lease the foreshore land abutting on his littoral owner has preferential right to lease the same.
land?cralawlibrary
Contrary to the ruling of the Office of the President, as affirmed by the
That rule in paragraph 32 is in consonance with article 4 of the Spanish appellate court, littoral owner WESVICO cannot be considered to have
Law of Waters of 1866 which provides that, while lands added to the waived or abandoned its preferential right to lease the disputed area
shores by accretions and alluvial deposits caused by the action of the sea when it subsequently filed an application for registration thereover. For
form part of the public domain, such lands, when they are no longer being a part of the public domain, ownership of the area could not be
washed by the waters of the sea are not necessary for purposes of public acquired by WESVICO. Its preferential right remained, however. Its
utility, or for the establishment of special industries, or for the coast move to have the contested land titled in its name, albeit a faux pas, in
guard service," shall be declared by the Government "to be the property of fact more than proves its interest to utilize it.
the owners of the estates adjacent thereto and as increment thereof."
As correctly argued by SIAIN, were WESVICO's petition for registration
In other words, article 4 recognizes the preferential right of the which, as stated earlier, was archived by the trial court, pursued but
littoral (riparian according to paragraph 32) to the foreshore eventually denied, WESVICO would not have been barred from filing
land formed by accretions or alluvial deposits due to the action of anew a foreshore lease application. Parenthetically, the petition for
the sea. registration of WESVICO was archived not on account of lack of interest
but because it ceased operations due to financial reasons.
The reason for the preferential right is the same as the justification for
giving accretions to the riparian owner for the diminutions which his land

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WHEREFORE, the Court of Appeals Decision dated July 3, 2000 is

REVERSED and SET ASIDE.

The May 6, 1997 Decision of then Acting Secretary Antonio G.M. La Viña
of the Department of Environment and Natural Resources is
REINSTATED.

SO ORDERED.

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