Case Digest: SIAIN ENTERPRISES, INC. v. F.F. CRUZ & CO., INC.

SIAIN ENTERPRISES, INC. v. F.F. CRUZ & CO., INC.

500 SCRA 406 (2006)

That the foreshore area had been reclaimed does not remove it from its classification of foreshore area subject to the preferential right to lease of the littoral owner.

Western Visayas Industrial Corporation (WESVICO) filed a foreshore lease application over the foreshore land adjacent to certain lots registered in its name. It eventually withdrew the application and filed a petition for registration over the same foreshore land with the then Court of First Instance of Iloilo. The case was, however, archived as WESVICO‘s representative could no longer be contacted, and later on, WESVICO has ceased operations.

F.F. Cruz & Co. (F.F. Cruz) filed with the Bureau of Lands, Iloilo City a foreshore lease application over a foreshore land, a portion of which is adjacent to the lot previously occupied by WESVICO. Sian Enterprises Inc. (SIAIN) purchased the properties previously owned by WESVICO from the Development Bank of the Philippines. It subsequently filed a foreshore lease application over the foreshore land adjacent to the properties it bought from DBP.

Upon learning that 130 linear meters of the foreshore land subject of F.F. Cruz’s foreshore lease application overlapped that covered by its foreshore lease application, SIAIN filed a protest 8 alleging that it being the owner of the property adjoining the overlapping area, it should be given preference in its lease.

F.F. Cruz, argued that SIAIN must not be given preferential right since the area in dispute is classified as ―reclaimed‖ and that the ownership was not by means of accretion. This argument has been sustained by the Land Management Bureau.

Upon appeal to the DENR Secretary, SIAIN was upheld, declaring that there was no basis to declare the area as ―reclaimed‖. F.F. Cruz however appealed to the Office of the President which overturned the decision of the DENR Secretary and found that the area is reclaimed. On appeal, the Court of Appeals affirmed the decision. Hence, the present petition. SIAIN contends that the evidence overwhelmingly proves that the disputed area is foreshore land and not reclaimed land which thus entitles it preferential rights over the

ISSUES:

Whether the disputed land is a ―foreshore‖ or ―reclaimed‖ area

HELD:

That the foreshore area had been reclaimed does not remove it from its classification of foreshore area subject to the preferential right to lease of the littoral owner.

It bears noting that it was not the reclamation that brought the disputed foreshore area into existence. Such foreshore area existed even before F.F. Cruz undertook its reclamation. It was ―formed by accretions or alluvial deposits due to the action of the sea.‖ Following Santulan, the littoral owner has preferential right to lease the same.

Contrary to the ruling of the Office of the President, as affirmed by the appellate court, littoral owner WESVICO cannot be considered to have waived or abandoned its preferential right to lease the disputed area when it subsequently filed an application for registration thereover. For being a part of the public domain, ownership of the area could not be acquired by WESVICO. Its preferential right remained, however. Its move to have the contested land titled in its name, albeit a faux pas, in fact more than proves its interest to utilize it.

As correctly argued by SIAIN, were WESVICO‘s petition for registration which, as stated earlier, was archived by the trial court, pursued but eventually denied, WESVICO would not have been barred from filing anew a foreshore lease application. Parenthetically, the petition for registration of WESVICO was archived not on account of lack of interest but because it ceased operations due to financial reasons.