Case Summary (G.R. No. L-40884)
Creation of the UP Experiment Station
Executive Proclamation No. 791 (1961) reserved the same tract for UP’s College of Agriculture, subject to private rights and forestry laws. R.A. 3990 (1964) then ceded full ownership of the land to UP “subject to any existing concessions,” exempted operations from taxation, and directed that all incidental income accrue to UP’s general fund.
Trial Court Proceedings and Stipulation of Issues
Petitioner sought a declaration that UP lacked authority to scale timber or collect forest charges within its concession. UP counterclaimed for forest charges from June 1964. The parties filed a Joint Stipulation of Facts, limiting issues to:
- Whether forest charges under the license must be paid to the BIR or to UP.
- If payable to UP, whether UP is entitled to supervise logging, felling, removal, and scaling within the R.A. 3990 area.
The trial court ruled in favor of petitioner, holding UP’s ownership was encumbered by petitioner’s concession until 1985 and that R.A. 3990 did not amend forestry collection laws.
Jurisdiction and Nature of Relief
The Supreme Court held that, by stipulating the facts and issues, both parties invoked a justiciable controversy suitable for declaratory relief under Rule 64. The abandonment of the injunction claim did not deprive the court of jurisdiction.
Interpretation of R.A. 3990 and Forestry Law
• Transfer of Ownership – R.A. 3990 withdrew the land from the public domain and conveyed “full ownership” to UP, divesting the Republic (and its agencies) of title and regulatory jurisdiction over that area, except as preserved by the existing license.
• Existing Concession – The proviso “subject to any existing concessions” protected petitioner’s right to exploit timber until 1985 but did not restrict UP’s absolute ownership or revenue rights.
• Incidental Receipts – Section 3 of R.A. 3990 expressly assigns all incidental income (including royalties or forest charges) to UP’s general fund.
• Termination of Bureau Authority – Once the land became a registered private woodland of UP, the BIR’s and B
Case Syllabus (G.R. No. L-40884)
Facts
- International Hardwood and Veneer Company of the Philippines (“Interwood”) was granted Timber License Agreement No. 27-A on June 4, 1953, renewed by Amendment on January 11, 1960, extending its exclusive 25-year right (expiring February 1, 1985) to cut, collect, and remove timber from specified tracts in Quezon and Laguna provinces.
- Interwood continuously possessed the concession since 1953, constructed roads and installations, and spent over ₱7 million on development and equipment.
- Executive Proclamation No. 791 (September 25, 1961) reserved approximately 3,500 hectares of public domain land for the University of the Philippines (UP) College of Agriculture as an experiment station, “subject to private rights, if any, and to the condition that the disposition of timber and other forest products shall be subject to forestry laws and regulations.”
- Republic Act No. 3990 (June 18, 1964) established a Central Experiment Station for UP, ceded in full ownership about 3,000 hectares described in Proclamation No. 791 to UP, “subject to any existing concessions, if any,” and declared all operations thereon exempt from taxation, with incidental receipts accruing to UP’s general fund.
- After RA 3990, UP and its Business Executive, Jose C. Campos, Jr., demanded that Interwood pay forest charges and royalties to UP instead of the Bureau of Internal Revenue (BIR), and allow UP personnel to scale, measure, seal, and supervise timber operations within the ceded area.
- Interwood refused, contending UP lacked statutory authority under RA 3990 and that its license rights remained supervised solely by the Bureau of Forestry and BIR.
Procedural History
- June 28, 1966: Interwood filed Civil Case No. SC-650 in the CFI of Laguna for declaratory relief, injunction against UP and Campos, and damages of ₱100,000.
- Respondents moved to dismiss for improper venue; motion denied.
- September 13, 1967: UP and Campos filed their Answer, pleading improper venue, no cause of action, and counterclaim for forest charges from June 18, 1964, with surcharges and interest.
- October 18, 1967: Parties executed a Joint Stipulation of Facts and Joint Submission of the Case for Judgment before the trial court.
- June 3, 1968: Trial court rendered judgment in favor of Interwood, declaring RA 3990 does not empower UP to scale, measure, seal, or collect forest charges, and dismissed respondents’ counterclaim.
- Respondents appealed to the Court of Appeals (C.A.-G.R. No. 49409-R); case elevated to the Supreme Court on December 28, 1979, as it hinged on legal interpretation of RA 3990.
Joint Stipulation of Facts
- Interwood licensed to cut timber under License No. 27-A (Amendment), effective January 11, 1960 to February 1, 1985, covering municipalities in Quezon and Laguna.
- Amendment renewed License No. 27-A originally granted June 4, 1953 to February 1, 1963.
- Interwood’s continuous peaceful possession and timber operations since 1953, with extensive infrastructure investment.
- Proclamation No. 791 (September 25, 1961) reserved land for UP’s College of Agriculture experiment station, subject to forestry laws and private rights.
- RA 3990 (June 18, 1964) ceded the Proclamation-described 3,000-hectare parcel in full ownership to UP, “subject to any existing concessions,” exempting operations from tax