G.R. No. 30342 - Philippine Sugar Estates Development Co., Ltd., Inc. vs. Unson

The parcel of land involved is part of the friar lands purchased by the Government of the Philippine Islands from religious corporations.
These lands were sold to the occupants and various other entities.
The canal referred to as "El Real" forms part of the irrigation system connected to these friar lands.

On August 23, 1921, the plaintiff applied to the Director of Lands for permission to install a turbine in "El Real" canal. The purpose was for developing electric power for its sugar central at Real, Calamba, Laguna.
The Director of Lands granted the permission on September 21, 1921.
The turbine was installed in the canal in reliance on this initial permission.

On November 23, 1925, the Director of Lands revoked the permission, advising the plaintiff to secure another permit through the proper channels – namely, from the Secretary of Commerce and Communications via the Director of Public Works.
In the month of May (year unspecified), defendants attempted to prevent the use of the canal’s water and the operation of the turbine.
The plaintiff then applied to the Director of Public Works for authorization under the provisions of the Irrigation Act.

The trial court’s judgment was partly based on the Torrens title to the land, where the Court of Land Registration had decreed the registration of the lot in favor of the plaintiff.
The certificate of title contained provisions that the water in "El Real" canal should be used jointly by the plaintiff and the Government as per the laws and customs of the Philippine Islands circa 1898.
Certifications and contracts (including a preliminary contract dated December 22, 1903, and a subsequent contract of sale and conveyance) stipulated:

The reservation of certain parcels by the plaintiff.
That such reservation did not include the reservoir of the estate.
That the Government retained a right of way through the land solely for the repair, preservation, maintenance, and improvement of the canal.

The provisions of the Law of Waters of 1866 (specifically Articles 266 and 267) were applicable and served as a background legal basis.
The Law of Waters required that any use of water for industrial or motive power purposes be subject to permission from the respective government authority.
The Irrigation Act, Act No. 2152 (and its subsequent amendments by Acts Nos. 2652 and 3208), modified these statutory provisions.
Section 14 of the Irrigation Act mandates that any person seeking to appropriate or use public waters must secure permission through the proper government channels (i.e., Secretary of Commerce and Police via the Director of Public Works).
The plaintiff’s certificate of title indicated the cooperative use of the canal’s water by both the corporation and the Government under the earlier agreed customs and laws.

Whether the plaintiff, having received initial permission from the Director of Lands, is entitled to maintain the turbine in "El Real" canal without obtaining further permission from the Director of Public Works.

Whether the canal is part of the Government’s irrigation system of the Calamba Estate, or if it falls within the exclusive use of the plaintiff based on the Torrens title.
The extent to which the certificate of title and prior agreements determine the rights of both parties with respect to the canal and its waters.

Whether the provisions of the Law of Waters of 1866 and its modifications, particularly as embodied in Act No. 2152 (the Irrigation Act), require the plaintiff to secure permission from the Government before installing and maintaining a turbine.
If rights acquired before the passage of the Irrigation Act (as reflected in the certificate of title and prior permissions) exempt the plaintiff from the current statutory requirements.

Whether the initial letter (Exhibit A) and the prior consent given by the Director of Lands are sufficient to invoke estoppel against the Government’s subsequent actions and interpretations.
The impact of the Government’s dual role as both co-user of the water and regulator on the plaintiff’s claims of right to unchallenged use.