G.R. No. L-20393 January 30, 1965
CITY OF CEBU, plaintiff-appellant, vs. EMILIO PADILLA, ET AL., defendants-appellees.

FACTS

On February 28, 1939, Juan Padilla filed Homestead Application No. V-6992 with the Bureau of Lands over Lot No. 3986 in Mambaling, Cebu City. He had occupied a portion since 1936 under a Nipa-Bacauan Plantation Permit. The Bureau of Lands approved the homestead application on March 17, 1949. After Padilla complied with requirements, the Director of Lands ordered the issuance of a homestead patent on December 16, 1952. South of this area, within the same lot, Tranquilino Quijano operated a salt-work under a lease from the Bureau of Forestry since 1932. Quijano assigned this lease to the City of Cebu on June 2, 1941, and the Bureau of Forestry issued Gratuitous Permit No. 1 to the City on June 23, 1941, for constructing a market and slaughterhouse. The City began preparations but World War II halted construction. After the war, the Cebu municipal board passed Resolution No. 681 on October 25, 1951, abandoning the slaughterhouse project. However, in 1954, the board passed Resolutions Nos. 806 and 1119 requesting the President to proclaim Lot No. 3986 as a permanent reservation for city facilities. Juan Padilla died in 1946, and his heirs, Emilio and Alberto Padilla, inherited the homestead. They petitioned to cancel the City’s gratuitous permit, but the Director of Forestry denied it, stating the land was within a forest zone. The Padillas’ appeal to the Secretary of Agriculture and Natural Resources was initially sustained but later set aside. The Padillas also filed a successful mandamus case (Civil Case No. R-4041) to compel the Director of Lands to issue the homestead patent. The City of Cebu filed a complaint to nullify the patent and related orders, but the court dismissed it for lack of cause of action. On appeal to the Court of Appeals, the City and the Padillas entered into an agreement embodied in City Resolution No. 823 and a public document signed by the Padilla brothers. The City would not object to the Padillas obtaining title to Lot No. 3986 provided specific sites for a city abattoir, street extension, and river channelization were excluded and separately titled to the City. The Padillas agreed, subject to the rules and determinations of the Director of Lands. The Solicitor General, representing the land officials, interposed no objection to the agreement but stated the City could not be issued titles to the excluded sites as it had not filed an application to acquire them. The Court of Appeals forwarded the case to the Supreme Court.

ISSUE

Whether the agreement between the City of Cebu and the Padilla heirs, for the exclusion of specific sites from the homestead patent and their reservation for city use, can be approved and implemented in accordance with law.

RULING

Yes. The Supreme Court set aside the order of dismissal and granted the Motion for Confirmation of Agreement. The agreement was approved, and the Director of Lands and the Secretary of Agriculture and Natural Resources were ordered to exclude the sites for the proposed city abattoir, extension of Salvador Street, and channelization of the Kinalumsan River from the homestead patent to be issued to the Padillas for Lot No. 3986. The Court held that the City’s acquisition or exclusive use of the excluded portions is subject to compliance with the provisions of law, specifically Section 83 of the Public Land Law ( Commonwealth Act No. 141 ). The City must, by resolution of its municipal board, request the Secretary of Agriculture and Natural Resources to recommend a presidential proclamation withdrawing the sites from sale or settlement and reserving them for city use. The Padillas’ agreement was expressly made subject to such rules and determinations. The Court noted that the City had previously requested a presidential reservation for the entire lot in 1954, which was not acted upon likely due to the Padillas’ claim. The confirmed agreement paves the way for the reservation of the specific sites. No costs were awarded.