G.R. No. L-30852 - City of Iligan vs. Director of Lands

On August 9, 1952, President of the Philippines issued Proclamation No. 335, pursuant to Section 88 of Commonwealth Act No. 141 (as amended), withdrawing from sale certain parcels of public land in Iligan City and reserving them for the National Power Corporation (NPC). These parcels formed part of the Camp Overton Military Reservation, which had already been turned over to the Republic in 1949.
The NPC, established under Commonwealth Act No. 120 (as amended) and Executive Order No. 399 (the "Uniform Charter for Government Corporations"), constructed the Maria Cristina Fertilizer Plant within this reservation.
On September 15, 1960, via a Deed of Sale with First Real Estate and Chattel Mortgage, the NPC sold the Maria Cristina Fertilizer Plant—with its machinery, equipment, buildings, and importantly, the right of occupancy and use of the land described in Proclamation No. 335—to Marcelo Tire and Rubber Corporation, a sister corporation of Marcelo Steel Corporation which later operated the plant.

Proclamation No. 20 excluded from Proclamation No. 335 areas occupied by the fertilizer plant and employees’ housing, opening them to disposition under the Public Land Act.
Proclamation No. 198 modified the technical description of the excluded areas, describing six lots beginning with SGS 2430, associated with Marcelo Steel Corporation.

On March 17, 1964, Marcelo Steel Corporation (through the Maria Cristina Fertilizer Plant) filed a Miscellaneous Sales Application (No. V-81763) before the Bureau of Lands for 356,347 square meters of land intended for industrial purposes. The application included an identifying mark, “SGS-2430,” on its plan.
On September 30, 1964, a notice of sale was issued by the Director of Lands, indicating that the lot covered by the said sales application would be auctioned.

On October 5, 1965, President Diosdado Macapagal issued Proclamation No. 469, which:

Excluded certain parcels (including Lots 1, 1-a, 3, and 4 covering approximately 29,681 square meters) from the reservation created by earlier proclamations.
Declared that, upon recommendation of the Secretary of Agriculture and Natural Resources, these parcels (including their foreshores) be granted, donated, and transferred to Iligan City.

The Mayor of Iligan City, on October 22, 1965, formally informed the Director of Lands of the City’s ownership by virtue of Proclamation No. 469 and requested the exclusion of these lands from the scheduled auction sale.
Despite the City’s request, no action was taken by the Director of Lands, prompting Iligan City to file a complaint for an injunction on December 23, 1965, to stop the sale or disposition of the land. A preliminary injunction was granted on December 28, 1965.

On August 25, 1966, President Ferdinand Marcos issued Proclamation No. 94, which:

Excluded portions of the land (specifically Lots 1-a, 2-a, and 3) from the operation of Proclamation No. 469, making these lots open to disposition under the provisions of the Public Land Act.

The Court of First Instance of Lanao del Norte, on April 13, 1967, rendered a decision dismissing the complaint and lifting the preliminary injunction, ruling against the City.
Iligan City, as plaintiff-appellant, sought to reverse the decision by raising several points of error, which were later certified to the Supreme Court via a resolution of the Court of Appeals dated July 8, 1969.

Whether the trial court erred in holding that the President did not have the power to grant public lands to a government entity like Iligan City, implying that the donation was invalid.
Whether ownership of the land had already vested in Iligan City through Proclamation No. 469.
The legality of Proclamation No. 94, particularly whether it unlawfully attempted to alter the disposition of land already granted to the City.
Whether the contested lands should be open to disposition under the Public Land Act and Republic Act No. 274, or if they were needed for public purposes to promote economic development in Iligan City.

Did the trial court err in holding that the President of the Philippines lacked the authority to grant or donate a portion of the public domain to a government entity such as Iligan City, thus invalidating the grant?
Was ownership of the parcels of land validly vested in Iligan City through Proclamation No. 469, or should the City have secured title via a public land application under lease or sale mode as prescribed by law?
Was Proclamation No. 94, which excluded parts of the land from the grant given by Proclamation No. 469, illegal and void for contravening Section 60 of Commonwealth Act No. 141?
Under the Public Land Act and Republic Act No. 274, could the contested lands be legitimately opened to disposition considering they were needed for public purposes and crucial to Iligan City's economic development?