REPUBLIC OF THE PHILIPPINES, represented by the MINDANAO MEDICAL

CENTER, petioner, vs. HON. COURT OF APPEALS and ALEJANDRO Y DE JESUS,

respondents.
G.R. No. L-40912 September 30, 1976
FACTS:
On January 22, 1921, Eugenio de Jesus, father of the respondent Alejandro de
Jesus, applied with the Bureau of Lands for Sales Patent of a 33-hectare land situated in barrio
Libranon, Davao. On January 23, 1934, the Bureau of Lands through the Davao Land
District Officer, accepted the sealed bids for the purchase of the subjected land. Irineo Jose
bidded P20 per hectare while Dr. Jose Ebro bidded for P100.50 per hectare. The director
annulled the said auction for the reason that sales applicant Eugenio de Jesus failed to
participate in the bid. Another bidding was held on October 3, 1934 and Eugenio de Jesus was the
lone bidder. He equalled the bid submitted by Dr. Jose Ebro at P100.50 and made a deposit of
P221 as 10% deposit of the price of the land at P110.50 per hectare. That on November 23,
1934, the Director of Lands issued an award order to Eugenio de Jesus with regards to the said lot
stating the coverage of the land which is located in Davao with an area of 22 hectares at P100.50
per hectare or P2210 for the whole tract. On August 28, 1936, the Director of Lands
amended the sales application of Eugenio de Jesus stating that a portion of the said land
is needed by the Philippine Army for military camp site purposes thereby excluding
12.8081 hectares which is the land in question. On September 7, 1936, President
Manuel Quezon issued Proclamation No. 85thereby declaring the said lot to be withdrawn
from sale and settlement and reserving the same for military purposes under the administration of
the Chief of Staff, Philippine Army. On November 29, 1939, Eugenio de Jesus paid P660.45
covering the 8thand 10thinstallment for the 20.6400 hectares, the remaining area after the sales
application was amended which did not include the military camp. Thereafter, on May 15,
1948, the Director of Lands ordered the issuance of patent to Eugenio de Jesus for the
tract of land having an area of 20.6400 hectares. On the same date, the secretary of Agriculture
and Natural Resources likewise granted a sales patent to Eugenio de Jesus containing an area
of 20.6400 hectares. On August 11, 1956, President Ramon Magsaysay revoked the Proclamation
No. 85 and declared the disputed lot open to disposition under the provisions of Public Land Act
for resettlement of the squatters in Davao City. Then on October 9, President Ramon
Magsaysay revoked this Proclamation and reserved the same lot for medical center site
under the administration of the Director of Hospital. Whereupon, on December 6, 1969,
petitioner Mindanao Medical Center applied for Torrens registration of the said lot with the Court
of First Instance of Davao, claimed “fee simple” title to the
said land on the strength of the proclamation reserving the area for medical center
purposes. Respondent Alejandro de Jesus, the son and successor-in-interest of Eugenio de Jesus
opposed the registration on the ground that his father acquired a vested right over the
said lot by virtue of award order. Likewise a certain Arsenio Suazo filed his opposition
claiming that the 2 hectare portion on the north-eastern part of the said lot belongs to
him. After due hearing, the court rendered judgement in favor of the Mindanao Medical
Center. The two oppositors filed an appeal to the Court of Appeals. On July 2, 1974, the
Appellate Court denied the claim of Arsenio Suazo at the same time affirmed the appeal
of Alejandro de Jesus, hereby decreeing the said lot in the name of the Alejandro and
ordered Mindanao Medical Center to relinquish the lot to said appellant. On July 5, 1974,
petitioner Mindanao Medical Center moved for reconsideration but the Appellate Court denied
the motion on June 17, 1975. Forthwith, the petitioner elevated the matter to the Supreme Court
for appeal.
Issue:
Whether or not Mindanao Medical Center has a registerable title over the whole contested
area of 12.8081 hectares by virtue of the Proclamation No. 350reserving the said land for medical
site purposes.
Conclusion: Yes, Mindanao Medical Center had a registerable title over the lot with area of
12.8081 hectares by virtue of Proclamation No. 350reserving such land for medical site purposes.
The Supreme Court held, that:
1. Proclamation No. 350 is free from infirmity and it proceeds from the recognized
competence of the President to reserve alienable lands of the public for specific public
 use or service. The law authorizes the President to designate tract or tracts of land of the
public domain as reservations for the commonwealth of the Philippines. A special
proprietary right was vested in Eugenio de Jesus when the sales award was issued to him
in 1934 which was for 22 hectares (later found to be 20.6400 hectares upon actual
survey). The privilege of occupying public lands confers no contractual or vested
rights and the authority of the President to withdraw such lands for sale or
acquisition by public, or to reserve them for public use may defeat the imperfect right
of a settler. Such proclamation of the President to reserve lands terminates any rights
previously acquired by persons who settled thereon in order to obtain preferential
right of purchase. Patents previously granted, reserved from sale are void.

2. The gratuitous assumption that the military "camp site" was executed between
Eugenio de Jesus and Secretary Serafin Marabut would be void since he held no
dominical rights over the site when it was allegedly donated by him in 1936. In
that year, Proclamation No. 85 of President Quezon already withdrew the area from
sale or settlement and reserved it for military purposes. However, the respondent
Appellate Court rationalized that the subject of the donation was not the land but "the
possessory and special proprietary rights" of Eugenio de Jesus over it. It is true that the
gratuitous disposal in donation may consist of a thing or right. But the term "right" must
be understood in a "propriety" sense, over which the processor has the jus
disponendi. In true donations there results a consequent impoverishment of the donor
or diminution of his assets. Eugenio de Jesus cannot be said to be possessed of that
"proprietary" right over the whole 33 hectares in 1936 including the disputed 12.8081
hectares for at that time this 12.8081-hectare lot had already been severed from the
mass of disposable public lands by Proclamation No. 85 and excluded in the
Sales Award. Impoverishment of Eugenio's assets as a consequence of such
donation is therefore farfetched. In fact if we were to assume in gratia argumenti
that the 12.8081-hectare lot was included in the Sales Award, still the same may not be
the subject of donation. What is conferred on the applicant is merely the right to take
possession of the land. In other words right granted to the sales awardee is only
possessory right not proprietary right for the fundamental reason that prior to the
issuance of the sales patent and registration thereof, title to the land is retained by
the State.