GR 95694; (October, 1997) (Digest)
G.R. No. 95694 October 9, 1997
VICENTE VILLAFLOR, substituted by his heirs, petitioner, vs. COURT OF APPEALS and NASIPIT LUMBER CO., INC., respondents.
FACTS
Petitioner Vicente Villaflor acquired several parcels of agricultural land through deeds of absolute sale executed in 1940, which documented earlier sales agreed upon in 1937. In 1946, Villaflor entered into a Lease Agreement with respondent Nasipit Lumber Co., Inc. (NALCO), covering two hectares for a five-year term. Subsequently, in 1953, Villaflor executed a Deed of Sale with Right to Repurchase over a larger 112-hectare parcel in favor of NALCO. Villaflor later filed a complaint seeking to annul this 1953 deed, claiming it was merely an equitable mortgage and that the true agreement was a lease. He argued that the deed was a simulated contract because NALCO, as a private corporation, was constitutionally disqualified from acquiring alienable lands of the public domain.
ISSUE
The primary issues were: (1) whether the 1953 Deed of Sale with Right to Repurchase was a simulated contract and should be declared an equitable mortgage; and (2) whether NALCO was disqualified from acquiring the land due to constitutional restrictions on private corporations holding alienable public lands.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. On the first issue, the Court found no evidence of simulation. The terms of the 1953 deed were clear and constituted a sale with pacto de retro, not a loan with security. Villaflor failed to prove by clear and convincing evidence that the parties intended a loan transaction. The contemporaneous and subsequent acts of the parties, including Villaflor’s receipt of the purchase price and his failure to repurchase the property within the stipulated period, confirmed the deed’s validity as a sale.
On the second issue, the Court ruled that the constitutional prohibition against private corporations acquiring alienable lands of the public domain took effect only under the 1973 Constitution. The land was acquired by NALCO in 1953, long before this prohibition. At that time, under the 1935 Constitution and pertinent statutes, a private corporation could acquire disposable public agricultural land through a grant from the government. The Court upheld the findings of the Bureau of Lands, which had classified the land as alienable and disposable and had granted a sales patent to NALCO’s successors-in-interest. The specialized knowledge of administrative agencies like the Bureau of Lands commands great respect, and their factual findings, when affirmed by the trial and appellate courts, are generally conclusive.