G.R. No. L-15829 December 4, 1967
ROMAN R. SANTOS, petitioner-appellee, vs. HON. FLORENCIO MORENO, as Secretary of Public Works and Communications and JULIAN C. CARGULLO, respondents-appellants.

FACTS

The Zobel family owned Hacienda San Esteban in Macabebe, Pampanga. From 1860 to 1924, their administrator, Ayala y Cia., cultivated nipa palms and operated a distillery. To access the nipa groves, Ayala y Cia. dug canals, which over time, through erosion, acquired the characteristics of rivers. In 1924, Ayala y Cia. shifted to fishpond culture, closing these canals with dikes. Roman Santos purchased a portion of the hacienda in 1925/1926 and also closed several canals (Sapang Malauling Maragul, Quiñorang Silab, Pepangebunan, Bulacus, Nigui and Nasi) to create fishponds. Local residents and officials complained, leading to legal and administrative proceedings. In 1930, the Secretary of Commerce and Communications initially ordered the dikes demolished, declaring the streams public, but later revoked this in 1931, declaring them private artificial canals. A contract was entered into under Act 3982, recognizing Santos’s private ownership of those six streams in exchange for him maintaining two other artificial canals for public use. For the Zobel family’s remaining portion, administrative investigations led to a 1935 agreement between the municipality and the Zobels, classifying various streams as public or private based on a 1931 engineer’s report (Panopio Report). However, the Secretary of Justice later opined this agreement was invalid. In 1940, Santos acquired the Zobel portion, including 25 now-closed streams. In 1958, following a congressional inquiry and a petition by residents, the Secretary of Public Works and Communications, pursuant to Republic Act No. 2056, ordered the opening of most of these streams, declaring them public. Santos filed for injunction in the Court of First Instance of Manila, which granted a preliminary injunction and later declared the streams in question to be of private ownership, except Sapang Cansusu. The Secretary appealed.

ISSUE

Whether the creeks/streams in Hacienda San Esteban, which were originally dug as artificial canals by the hacienda owners, are private property or part of the public domain.

RULING

The Supreme Court affirmed the lower court’s decision, except regarding Sapang Cansusu. The streams originally dug by Ayala y Cia. for its private business (nipa cultivation and later fishponds) are of private ownership. They were not natural waterways but artificial constructions for the exclusive use of the hacienda. Their subsequent erosion and characteristics did not change their private nature. The Court found that the evidence, particularly the 1931 Panopio Report, established the artificial origin of the contested streams. The agreement between the Zobels and the municipality, though later questioned, supported this finding. The use by the public of some streams for a period did not constitute a grant of easement or convert them to public property, as such use was merely tolerated by the owner. However, Sapang Cansusu was declared a public stream as the evidence showed it was a natural, navigable waterway that existed prior to the hacienda’s development. The Secretary of Public Works and Communications’ orders to open the private streams were declared without legal basis. The decision was affirmed with the modification regarding Sapang Cansusu.