G.R. No.

L- 24548 October 27, 1983

WENCESLAO VlNZONS TAN, THE DIRECTOR OF FORESTRY, APOLONIO THE SECRETARY

OF AGRICULTURE AND NATURAL RESOURCES JOSE Y. FELICIANO, respondents-appelllees,
vs.
THE DIRECTOR OF FORESTRY, APOLONIO RIVERA, THE SECRETARY OF AGRICULTURE
AND N ATURAL RESOURCES JOSE Y. FELICIANO, respon dents-appellees,RAVAGO
COMMERCIAL CO., JORGE LAO HAPPICK and ATANACIO MALLARI, intervenors,

Camito V Pelianco Jr. for petitioner-appellant.

Solicitor General for respondent Director.

Estelito P. Mendoza for respondent Ravago Comm'l Co.

Anacleto Badoy for respondent Atanacio Mallari.

Mariano de Joya, Jr. for respondent Jorge Lao Happick, Jr.

MAKASIAR, J:

This is an appeal from the order dated January 20, 1965 of the then Court of First Instance of
Manila, Branch VII, in Civil Case No. 56813, a petition for certiorari, prohibition and mandamus with
preliminary prohibitory injunction (p. 2. rec.), which dismissed the petition of petitioner-appellant
Wenceslao Vinzons Tan on the ground that it does not state a sufficient cause of action, and upon
the respondents-appellees' (Secretary of Agriculture and Natural resources and the Director of
Forestry) motion to dismiss (p. 28, rec.).

Sometime in April 1961, the Bureau of Forestry issued Notice No. 2087, advertising for public
bidding a certain tract of public forest land situated in Olongapo, Zambales, provided tenders were
received on or before May 22, 1961 (p. 15, CFI rec.). This public forest land, consisting of 6,420
hectares, is located within the former U.S. Naval Reservation comprising 7,252 hectares of
timberland, which was turned over by the United States Government to the Philippine Government
(P. 99, CFI rec.).

On May 5, 1961, petitioner-appellant Wenceslao Vinzons Tan submitted his application in due form
after paying the necessary fees and posting tile required bond therefor. Nine other applicants
submitted their offers before the deadline (p. 29, rec.).

Thereafter, questions arose as to the wisdom of having the area declared as a forest reserve or
allow the same to be awarded to the most qualified bidder. On June 7, 1961, then President Carlos
P. Garcia issued a directive to the Director of the Bureau of Forestry, which read as follows:

It is desired that the area formerly covered by the Naval Reservation be made a
forest reserve for watershed purposes. Prepare and submit immediately a draft of a
proclamation establishing the said area as a watershed forest reserve for Olongapo,
Zambales. It is also desired that the bids received by the Bureau of Forestry for the
issuance of the timber license in the area during the public bidding conducted last
May 22, 1961 be rejected in order that the area may be reserved as above stated. ...
 (SGD.)
CARL
OS P.
GARCI
A

(pp. 98, CFI rec.).

On August 3, 1961, Secretary Cesar M. Fortich of Agriculture and Natural Resources sustained the
findings and re comendations of the Director of Forestry who concluded that "it would be beneficial
to the public interest if the area is made available for exploitation under certain conditions," and

We quote:

Respectfully forwarded to the honorable, the Executive Secretary Malacanang.

Manila inviting particular attention to the comment and recommendation of the
Director of Forestry in the proceeding in indorsement in which this Of fice fully
concurs.

The observations of responsible forest officials are most revealing of their zeal to
promote forest conservation and watershed protection especially in Olongapo,
Zambales area. In convincing fashion, they have demonstrated that to declare the
forest area involved as a forest reserve ratify than open it for timber exploitation
under license and regulation would do more harm than of to the public interest. To
convert the area into a forest reserve without an adequate forest protection force,
would make of it a 'Free Zone and Logging Paradise,' to the ever 'Problem Loggers'
of Dinalupihan, Bataan . . . an open target of timber smugglers, kaingineros and
other forms of forest vandals and despoilers. On the other hand, to award the area,
as planned, to a reputable and responsible licensee who shall conduct logging
operations therein under the selective logging method and who shall be obliged to
employ a sufficient number of forest guards to patrol and protect the forest
consecration and watershed protection.

Worthy of mention is the fact that the Bureau of Forestry had already conducted a
public bidding to determine the most qualified bidder to whom the area advertised
should be awarded. Needless to stress, the decision of the Director of Forestry to
dispose of the area thusly was arrived at after much thought and deliberation and
after having been convinced that to do so would not adversely affect the watershed
in that sector. The result of the bidding only have to be announced. To be sure, some
of the participating bidders like Mr. Edgardo Pascual, went to much expense in the
hope of winning a virgin forest concession. To suddenly make a turn about of this
decision without strong justifiable grounds, would cause the Bureau of Forestry and
this Office no end of embarrassment.

In view of the foregoing, it is earnestly urged that the Director of Forestry be allowed
to proceed with the announcement of the results of the bidding for the subject forest
area (p. 13, CFI rec.).

The Office of the President in its 4th Indorsement dated February 2, 1962, signed by Atty. Juan
Cancio, Acting Legal Officer, "respectfully returned to the Honorable Secretary of the Department of
Agriculture and Natural Resources for appropriate action," the papers subject of Forestry Notice No.
2087 which was referred to the Bureau of Forestry for decision (p. 14, CFI rec.).
Finally, of the ten persons who submitted proposed the area was awarded to herein petitioner-
appellant Wenceslao Vinzons Tan, on April 15, 1963 by the Bureau of Forestry (p. 17, CFI rec.).
Against this award, bidders Ravago Commercial Company and Jorge Lao Happick filed motions for
reconsideration which were denied by the Director of Forestry on December 6, 1963.

On May 30, 1963, the Secretary of Agriculture and Natural Resources Benjamin M. Gozon — who
succeeded Secretary Cesar M. Fortich in office — issued General Memorandum Order No. 46,
series of 1963, pertinent portions of which state:

xxx xxx xxx

SUBJECT: ... ... ...

(D)elegation of authority to the Director of Forestry to grant ordinary timber licenses.

1. ... ... ...

2. The Director of Forestry is hereby authorized to grant (a) new ordinary timber
licenses where the area covered thereby is not more than 3,000 hectares each; and
(be the extension of ordinary timber licenses for areas not exceeding 5,000 hectares
each;

3. This Order shall take effect immediately (p. 267, CFI rec.).

Thereafter, Jose Y. Feliciano was appointed as Acting secretary of Agriculture and Natural
Resources, replacing secretary Benjamin M. Gozon. Upon assumption of office he Immediately
promulgate on December 19, 19b3 General memorandum Order No. 60, revoking the authority
delegated to the Director of Forestry, under General Memorandum order No. 46, to grant ordinary
timber licenses, which order took effect on the same day, December 19, 1963. Pertinent portions of
the said Order read as follows:

xxx xxx xxx

SUBJECT: Revocation of General Memorandum Order No 46 dated May 30, 1963 —

1. In order to acquaint the undersigned with the volume and Nature of the work of the
Department, the authority delegated to the Director of forestry under General
Memorandum Order No. 46, dated May 30, 1963, to grant (a) new ordinary timber
licenses where the area covered thereby is not more than 3,000 hectares each; and
(b) the extension of ordinary timber licenses for areas not exceeding 3,000 hectares
each is hereby revoked. Until further notice, the issuance of' new licenses , including
amendments thereto, shall be signed by the secretary of Agriculture and Natural
Resources.

2. This Order shall take effect immediately and all other previous orders, directives,
circulars, memoranda, rules and regulations inconsistent with this Order are hereby
revoked (p. 268, CFl rec.; Emphasis supplied).

On the same date that the above-quoted memorandum took effect, December 19, 1963, Ordinary
Timber License No. 20-'64 (NEW) dated April 22, 1963, in the name of Wenceslao Vinzons Tan, was
signed by then Acting Director of Forestry Estanislao R. Bernal without the approval of the Secretary
of Agriculture and Natural Resources. On January 6, 1964, the license was released by the Office of
the Director of Forestry (p. 30, CFI rec.; p. 77, rec.). It was not signed by the Secretary of Agriculture
and Natural Resources as required by Order No. 60 aforequoted.

On February 12, 1964, Ravago Commercial Company wrote a letter to the Secretary of Agriculture
and Natural Resources shall be considered by tile Natural Resources praying that, pending
resolution of the appeal filed by Ravago Commercial Company and Jorge Lao Happick from the
order of the Director of Forestry denying their motion for reconsideration, OTI No. 20-'64 in the name
of Wenceslao V. Tan be cancelled or revoked on the ground that the grant thereof was irregular,
anomalous and contrary to existing forestry laws, rules and regulations.

On March 9, 1964, acting on the said representation made by Ravago Commercial Company, the
Secretary of Agriculture and Natural Resources promulgated an order declaring Ordinary Timber
License No. 20-'64 issued in the name of Wenceslao Vinzons Tan, as having been issued by the
Director of Forestry without authority, and is therefore void ab initio. The dispositive portion of said
order reads as follows:

WHEREFORE, premises considered, this Office is of the opinion and so holds that
O.T. License No. 20-'64 in the name of Wenceslao Vinzons Tan should be, as
hereby it is, REVOKED AND DECLARED without force and effect whatsoever from
the issuance thereof.

The Director of Forestry is hereby directed to stop the logging operations of

Wenceslao Vinzons Tan, if there be any, in the area in question and shall see to it
that the appellee shall not introduce any further improvements thereon pending the
disposition of the appeals filed by Ravago Commercial Company and Jorge lao
Happick in this case" (pp. 30-31, CFI rec.).

Petitioner-appellant moved for a reconsideration of the order, but the Secretary of Agriculture and
Natural Resources denied the motion in an Order dated March 25, 1964, wherein this paragraph
appears:

In this connection, it has been observed by the Acting Director of Forestry in his 2nd
indorsement of February 12, 1964, that the area in question composes of water basin
overlooking Olongapo, including the proposed Olongapo watershed Reservation; and
that the United States as well as the Bureau of Forestry has earmarked this entire
watershed for a watershed pilot forest for experiment treatment Concerning erosion
and water conservation and flood control in relation to wise utilization of the forest,
denudation, shifting cultivation, increase or decrease of crop harvest of agricultural
areas influenced by the watershed, etc. .... (pp. 3839, CFI rec.; p. 78, rec.).

On April 11, 1964, the Secretary of Agriculture and Natural Resources, acting on the separate
appeals filed by Jorge Lao Happick and Ravago Commercial Company, from the order of the
Director of Forestry dated April 15, 1963, awarding to Wenceslao Vinzons Tan the area under Notive
No. 2087, and rejecting the proposals of the other applicants covering the same area, promulgated
an order commenting that in view of the observations of the Director of Forestry just quoted, "to grant
the area in question to any of the parties herein, would undoubtedly adversely affect public interest
which is paramount to private interests," and concluding that, "for this reason, this Office is of the
opinion and so holds, that without the necessity of discussing the appeals of the herein appellants,
the said appeals should be, as hereby they are, dismissed and this case is considered a closed
matter insofar as this Office is concerned" (p. 78, rec.).
On April 18, 1964, on the basis of the denial of his motion for reconsideration by the Secretary of
Agriculture and Natural Resources, petitioner-appellant filed the instant case before tile court a
quo (Court of First Instance, Manila), Special Civil Action No. 56813, a petition for certiorari,
prohibition and mandamus with preliminary prohibitory injunction (pp. 1-12, CFI rec.). Petitioner-
appellant claims that the respondents-appellees "unlawfully, illegally whimsically, capriciously and
arbitrarily acted without or in excess of their jurisdiction, and/or with grave abuse of discretion by
revoking a valid and existing timber license without just cause, by denying petitioner-appellant of the
equal protection of the laws, by depriving him of his constitutional right to property without due
process of law, and in effect, by impairing the obligation of contracts" (P. 6, CFI rec.). Petitioner-
appellant prayed for judgment making permanent the writ of preliminary injunction against the
respondents- appellees; declaring the orders of the Secretary of Agriculture and Natural Resources
dated March 9, March 25, and April 11, 1964, as well as all his acts and those of the Director of
Forestry implementing said orders, and all the proceedings in connection therewith, null and void,
unlawful and of no force and effect; ordering the Director of Forestry to renew OTI No. 20-'64 upon
expiration, and sentencing the respondents, jointly and severally, to pay the petitioner-appellant the
sum of Two Hundred Thousand Pesos (P200,000.000) by way of pecuniary damage, One Hundred
Thousand Pesos (P100,000.00) by way of moral and exemplary damages, and Thirty Thousand
Pesos (P30,000-00) as attorney's fees and costs. The respondents-appellees separately filed
oppositions to the issuance of the writ of preliminary injunction, Ravago Commercial Company,
Jorge Lao, Happick and Atanacio Mallari, presented petitions for intervention which were granted,
and they too opposed the writ.

The Director of Forestry in his motion to dismiss dated April 24, 1964, alleges the following grounds:
(1) that the court has no jurisdiction; (2) that the respondents may not be sued without their consent;
(3) that the petitioner has not exhausted all available administrative remedies; (4) that the petition
does not state a cause of action; and (5) that purely administrative and discretionary functions of
administrative officials may not be interfered with by the courts. The Secretary of Agriculture and
Natural Resources joined the motion to dismiss when in his answer of May 18, 1964, he avers the
following special and affirmative defenses: (1) that the court has no jurisdiction to entertain the action
for certiorari, prohibition and mandamus; (2) that the petitioner has no cause of action; (3) that venue
is improperly laid; (4) that the State is immune from suit without its consent; (5) that the court has no
power to interfere in purely administrative functions; and (6) that the cancellation of petitioner's
license was dictated by public policy (pp. 172-177, rec.). Intervenors also filed their respective
answers in intervention with special and affirmative defenses (pp. 78-79, rec.). A hearing was held
on the petition for the issuance of writ of preliminary injunction, wherein evidence was submitted by
all the parties including the intervenors, and extensive discussion was held both orally and in writing.

After the said hearing, on January 20, 1965, the court a quo, from the evidence received, resolved
not only the question on the issuance of a writ of preliminary injunction but also the motion to
dismiss, declared that the petition did not state a sufficient cause of action, and dismissed the same
accordingly. To justify such action, the trial court, in its order dismissing the petition, stated that "the
court feels that the evidence presented and the extensive discussion on the issuance of the writ of
preliminary mandatory and prohibitory injunction should also be taken into consideration in resolving
not only this question but also the motion to dismiss, because there is no reason to believe that the
parties will change their stand, arguments and evidence" (p. 478, CFI rec.). His motion for
reconsideration having been denied (p. 488, CFI rec.), petitioner-appellant Wenceslao Vinzons Tan
appealed directly to this Court.

Petitioner-appellant now comes before this Court, claiming that the trial court erred in:
 (1) holding that the petition does not state a sufficient cause of action: and

(2) dismissing the petition [p.27,rec. ].

He argues that the sole issue in the present case is, whether or not the facts in the petition constitute
a sufficient cause of action (p. 31, rec.). Petitioner-appellant, in his brief, presented a lengthy
discussion on the definition of the term cause of action wherein he contended that the three
essential elements thereon, — namely, the legal right of the plaintiff, the correlative obligation of the
defendants and the act or omission of the defendant in violation of that right — are satisfied in the
averments of this petition (pp. 31-32, rec.). He invoked the rule that when the ground for dismissal is
that the complaint states no cause of action, such fact can be determined only from the facts alleged
in the complaint and from no other, and the court cannot consider other matters aliunde He further
invoked the rule that in a motion to dismiss based on insufficiency of cause of action, the facts
alleged in the complaint are deemed hypothetically admitted for the purpose of the motion (pp. 32-
33, rec.).

A perusal of the records of the case shows that petitioner-appellant's contentions are untenable. As
already observed, this case was presented to the trial court upon a motion to dismiss for failure of
the petition to state a claim upon which relief could be granted (Rule 16 [g], Revised Rules of Court),
on the ground that the timber license relied upon by the petitioner- appellant in his petition was
issued by the Director of Forestry without authority and is therefore void ab initio. This motion
supplanted the general demurrer in an action at law and, as a rule admits, for the purpose of the
motion, ail facts which are well pleaded however while the court must accept as true all well pleaded
facts, the motion does not admit allegations of which the court will take judicial notice are not true,
nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts
which appear by record or document included in the pleadings to be unfounded (Vol. 1, Moran's
Comments on the Rules of Court, 1970 ed., p. 505, citing cases).

It must be noted that there was a hearing held in the instant case wherein answers were interposed
and evidence introduced. In the course of the hearing, petitioner-appellant had the opportunity to
introduce evidence in support of tile allegations iii his petition, which he readily availed of.
Consequently, he is estopped from invoking the rule that to determine the sufficiency of a cause of
action on a motion to dismiss, only the facts alleged in the complaint must be considered. If there
were no hearing held, as in the case of Cohen vs. U.S. CCA Minn 1942,129 F. 2d 733), "where the
case was presented to District Court upon a motion to dismiss because of alleged failure of
complaint to state a claim upon which relief could be granted, and no answer was interposed and no
evidence introduced, the only facts which the court could properly consider in passing upon the
motion were those facts appearing in the complaint, supplemented be such facts as the court
judicially knew.

In Llanto vs. Ali Dimaporo, et al. (16 SCRA 601, March 31, 1966), this Court, thru Justice Conrado V.
Sanchez, held that the trial court can properly dismiss a complaint on a motion to dismiss due to lack
of cause of action even without a hearing, by taking into consideration the discussion in said motion
and the opposition thereto. Pertinent portion of said decision is hereby quoted:

Respondents moved to dismiss. Ground therefor is lack of cause of action. The Court
below granted the motion, dismissed the petition. The motion to reconsider failed.
Offshoot is this appeal.

1. The threshold questions are these: Was the dismissal order issued
without any hearing on the motion to dismiss? Is it void?
 WE go to the record. The motion to dismiss was filed on February 1, 1961 and set for
hearing on February 10 following. On February 8, 1961 petitioner's counsel
telegraphed the court, (r)equest postponement motion dismissal till written opposition
filed.' He did not appear at the scheduled hearing. But on March 4, 1961, he followed
up his wire, with his written opposition to the motion to dismiss. Adverting to the 5-
page motion to dismiss and the 6-page opposition thereto, We find that the
arguments pro and con on the question of the board's power to abolish petitioner's
position to discussed the problem said profusely cited authorities. The May 15, 1961
8-page court order recited at length the said arguments and concluded that petitioner
made no case.

One good reason for the statutory requirement of hearing on a motion as to enable
the suitors to adduce evidence in support of their opposing claims. But here the
motion to dismiss is grounded on lack of cause of action. Existence of a cause of
action or lack of it is determined be a reference to the facts averred in the challenged
pleading. The question raised in the motion is purely one of law. This legal issue was
fully discussed in said motion and the opposition thereto. In this posture, oral
arguments on the motion are reduced to an unnecessary ceremony and should be
overlooked. And, correctly so, because the other intendment of the law in requiring
hearing on a motion, i.e., 'to avoid surprises upon the opposite party and to give to
the latter time to study and meet the arguments of the motion,' has been sufficiently
met. And then, courts do not exalt form over substance (Emphasis supplied).

Furthermore even if the complaint stated a valid cause of action, a motion to dismiss for-
insufficiency of cause of action will be granted if documentary evidence admitted by stipulation
disclosing facts sufficient to defeat the claim enabled the court to go beyond disclosure in the
complaint (LOCALS No. 1470, No. 1469, and No. 1512 of the International Longshoremen's
Association vs. Southern Pacific Co., 6 Fed. Rules Service, p. 107; U.S. Circuit Court of Appeals,
Fifth Circuit, Dec. 7, 1952; 131 F. 2d 605). Thus, although the evidence of the parties were
presented on the question of granting or denying petitioner-appellant's application for a writ of
preliminary injunction, the trial court correctly applied said evidence in the resolution of the motion to
dismiss. Moreover, in applying said evidence in the resolution of the motion to dismiss, the trial
court, in its order dismissing the petition, pointed out that, "there is no reason to believe that the
parties will change their stand, arguments and evidence" (p. 478, CFI rec.). Petitioner-appellant did
not interpose any objection thereto, nor presented new arguments in his motion for reconsideration
(pp. 482-484, CFI rec.). This omission means conformity to said observation, and a waiver of his
right to object, estopping him from raising this question for the first time on appeal. " I question not
raised in the trial court cannot be raised for the first time on appeal" (Matienzo vs. Servidad, Sept.
10, 1981, 107 SCRA 276).

Moreover, petitioner-appellant cannot invoke the rule that, when the ground for asking dismissal is
that the complaint states no cause of action, its sufficiency must be determined only from the
allegations in the complaint. "The rules of procedure are not to be applied in a very rigid, technical
sense; rules of procedure are used only to help secure substantial justice. If a technical and rigid
enforcement of the rules is made, their aim would be defeated. Where the rules are merely
secondary in importance are made to override the ends of justice; the technical rules had been
misapplied to the prejudice of the substantial right of a party, said rigid application cannot be
countenanced" (Vol. 1, Francisco, Civil Procedure, 2 ed., 1973, p. 157, citing cases).

What more can be of greater importance than the interest of the public at large, more particularly the
welfare of the inhabitants of Olongapo City and Zambales province, whose lives and properties are
directly and immediately imperilled by forest denudation.
The area covered by petitioner-appellant's timber license practically comprises the entire Olongapo
watershed (p. 265, CFI rec.). It is of public knowledge that watersheds serves as a defense against
soil erosion and guarantees the steady supply of water. As a matter of general policy, the Philippine
Constitution expressly mandated the conservation and proper utilization of natural resources, which
includes the country's watershed. Watersheds in the Philippines had been subjected to rampant
abusive treatment due to various unscientific and destructive land use practices. Once lush
watersheds were wantonly deforested due to uncontrolled timber cutting by licensed
concessionaries and illegal loggers. This is one reason why, in paragraph 27.of the rules and
regulations included in the ordinary timber license it is stated:

The terms and conditions of this license are subject to change at the discretion of the
Director of Forestry, and that this license may be made to expire at an earlier date,
when public interests so require (Exh. D, p. 22, CFI rec.).

Considering the overriding public interest involved in the instant case, We therefore take judicial
notice of the fact that, on April 30, 1964, the area covered by petitioner-appellant's timber license
has been established as the Olongapo Watershed Forest Reserve by virtue of Executive
Proclamation No. 238 by then President Diosdado Macapagal which in parts read as follows:

Pursuant to the provisions of Section 1824 of the Revised Administrative Code, as

amended, 1, Diosdado Macapagal, President of the Philippines do hereby withdraw
from entry, sale, or settlement and establish as Olongapo Watershed Forest Reserve
for watershed, soil protection, and timber production purposes, subject to private
rights, if any there be, under the administration and control of the Director of
Forestry, xx the following parcels of land of the public domain situated in the
municipality of Olongapo, province of Zambales, described in the Bureau of Forestry
map No. FR-132, to wit: ... ... (60 O.G. No. 23, 3198).

Petitioner-appellant relies on Ordinary Timber License No. 20-'64 (NEW) for his alleged right over
the timber concession in question. He argues thus: "The facts alleged in the petition show: (1) the
legal right of the petitioner to log in the area covered by his timber license; (2) the legal or
corresponding obligation on the part of the respondents to give effect, recognize and respect the
very timber license they issued to the petitioner; and (3) the act of the respondents in arbitrarily
revoking the timber license of the petitioner without giving him his day in court and in preventing him
from using and enjoying the timber license issued to him in the regular course of official business" (p.
32, rec.).

In the light of petitioner-appellant's arguments, it is readily seen that the whole controversy hinges on
the validity or invalidity of his timber license.

WE fully concur with the findings of the trial court that petitioner- appellant's timber license was
signed and released without authority by then Acting Director Estanislao R. Bernal of Forestry, and
is therefore void ab initio. WE hereby quote such findings:

In the first place, in general memorandum order No. 46 dated May 30, 1963, the
Director of Forestry was authorized to grant a new ordinary timber license only where
the area covered thereby was not more than 3,000 hectares; the tract of public forest
awarded to the petitioner contained 6,420 hectares (Exhs. 2-A and 2-B Ravago,
embodied in Annex B; Exh. B). The petitioner contends that only 1,756 hectares of
the said area contain commercial and operable forest; the authority given to the
Director of Forestry to grant a new ordinary timber license of not more than 3,000
hectares does not state that the whole area should be commercial and operable
 forest. It should be taken into consideration that the 1,756 hectares containing
commercial and operable forest must have been distributed in the whole area of
6,420 hectares. Besides the license states, 'Please see attached sketch and
technical description,' gives an area of 6,420 hectares and does not state what is the
area covered of commmercial and operable forest (Exh. Ravago Also Annex B of the
petition, which was marked as Exhibit B, states:

Under Notice No. 2087, a tract of public forest containing 6,420

hectares located in Olongapo, Zambales was declared available for
timber utilization and development. Pursuant to this Notice, there
were received bid proposals from the following persons: ...

Wherefore, confirming the findings of said Committee, the area described in Notice
No. 2087 shall be awarded, as it is hereby awarded to Wenceslao Vinzons Tan,
subject to the following conditions: ... ...

In the second place, at the time it was released to the petitioner, the Acting Director
of Forestry had no more authority to grant any license. The license was signed by the
Acting Director of Forestry on December 19, 1963, and released to the petitioner on
January 6, 1964 (Exh. RavaGo The authority delegated to the Director of Forestry to
grant a new ordinary timber license was contained in general memorandum order
No. 46 dated May 30, 1963. This was revoked by general memorandum order No.
60, which was promulgated on December 19, 1963. In view thereof, the Director of
Forestry had no longer any authority to release the license on January 6, 1964, and
said license is therefore void ab initio (pp. 479480, CFI rec.).

The release of the license on January 6, 1964, gives rise to the impression that it was ante-dated to
December 19, 1963 on which date the authority of the Director of Forestry was revoked. But, what is
of greatest importance is the date of the release or issuance, and not the date of the signing of the
license. While petitioner-appellant's timber license might have been signed on December 19, 1963 it
was released only on January 6, 1964. Before its release, no right is acquired by the licensee. As
pointed out by the trial court, the Director of Forestry had no longer any authority to release the
license on January 6, 1964. Therefore, petitioner-appellant had not acquired any legal right under
such void license. This is evident on the face of his petition as supplemented by its annexes which
includes Ordinary Timber License No. 20-'64 (NEW). Thus, in the case of World Wide Insurance &
Surety Co., Inc. vs. Macrohon, et al. (105 Phil. 250, Feb. 28, 1959), this Court held that if from the
face of the complaint, as supplemented by its annexes, plaintiff is not the owner, or entitled to the
properties it claims to have been levied upon and sold at public auction by the defendants and for
which it now seeks indemnity, the said complaint does not give plaintiff any right of action against the
defendants. In the same case, this Court further held that, in acting on a motion to dismiss, the court
cannot separate the complaint from its annexes where it clearly appears that the claim of the plaintiff
to be the A owner of the properties in question is predicated on said annexes. Accordingly,
petitioner-appellant's petition must be dismissed due to lack of cause of action.

II

Petitioner-appellant, in his petition, alleged that he has exhausted all his administrative remedies to
no avail as respondents-appellees have failed, neglected, refused and continue to refuse to allow
petitioner-appellant to continue operation in the area covered by his timber license. He further
alleged that he has neither recourse by way of appeal, nor any plain, speedy and adequate remedy
in the ordinary course of law except thru this special civil action, as the last official act of the
respondent-appellee Secretary of Agriculture and Natural Resources in declaring void the timber
license referred to above after denying petitioner-appellant's motion for reconsideration, is the last
administrative act. Petitioner-appellant relies on the case of Demaisip vs. The Court of Appeals, et
al. (106 Phil. 237, Sept. 24, 1959), wherein it was held that the failure of the plaintiff to appeal from
the adverse decision of the Secretary to the President cannot preclude the plaintiff from taking court
action in view of the theory that the Secretary of a department is merely an alter-ego of the
President. The presumption is that the action of the Secretary bears the implied sanction of the
President unless the same is disapproved by the latter (Villena vs. the Secretary of Interior, 67 Phil.
451; p. 7, CFI rec.).

To this We cannot agree. Petitioner-appellant did not appeal the order of the respondent Secretary
of Agriculture and Natural Resources to the President of the Philippines, who issued Executive
Proclamation No. 238 withdrawing the area from private exploitation, and establishing it as the
Olongapo Watershed Forest Reserve. Considering that the President has the power to review on
appeal the orders or acts of the respondents-appellees, the failure of the petitioner-appellant to take
that appeal is failure on his part to exhaust his administrative remedies. Thus, this Court, in the case
of Calo vs. Fuertes (5 SCRA 399, 400, June 29, 1962), held that:

At any rate, the appellant's contention that, as the Secretary of Agriculture and
Natural Resources is the alter ego of the President and his acts or decisions are also
those of the latter, he need not appeal from the decision or opinion of the former to
the latter, and that, such being the case, after he had appealed to the Secretary of
Agriculture and Natural Resources from the decision or opinion of the Director of
Lands he had exhausted the administrative remedies, is untenable.

The withdrawal of the appeal taken to the President of the Philippines is tantamount
to not appealing all thereto. Such withdrawal is fatal, because the appeal to the
President is the last step he should take in an administrative case.

In 1912, in the case of Lamb vs. Phipps (22 Phil. 491-92, July 22, 1912), this Court stressed the
doctrine of exhaustion of administrative remedies, thus:

When a plain, adequate and speedy remedy is afforded by and within the executive
department of the government the courts will not interfere until at least that remedy
has been exhausted. Jao Igco vs. Shuster, 10 Phil. Rep. 448; Ekiu vs. U.S., 142 U.S.
651; U.S. vs. Sing Tuck, 194 U.S. 161; U.S. vs. Ju Toy 198 U.S. 253; Chill Yow vs.
U.S., 28 Sup. Ct. Rep. 201). The administrative remedies afforded by law must first
be exhausted before resort can be had to the courts, especially when the
administrative remedies are by law exclusive and final. Some matters and some
questions are by law delegated entirely and absolutely to the discretion of particular
branches of the executive department of the government. When the law confers
exclusive and final jurisdiction upon the executive department of the government to
dispose of particular questions, their judgments or the judgments of that particular
department are no more reviewable by the courts than the final judgment or
decisions of the courts are subject to be reviewed and modified by them" (emphasis
supplied).

Moreover, this being a special civil action, petitioner-appellant must allege and prove that he has no
other speedy and adequate remedy (Diego vs. The Court of Appeals, et al., 54 Off. Gaz., No. 4,
956). In the case at bar, petitioner- appellant's speedy and adequate remedy is an appeal to the
President of the Philippines.
Accordingly, "it is settled to the point of being elementary that the only question involved n certiorari
is jurisdiction, either want of jurisdiction or excess thereof, and abuse of discretion shall warrant the
issuance of the extraordinary remedy of certiorari when the same is so grave as when the power is
exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility,
and it must be so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal
to perform a duty enjoined, or to act at all in contemplation of law" FS Divinagracia Agro-Commercial
Inc. vs. Court of Appeals, 104 SCRA 191 [April .1, 1981]). The foregoing is on the assumption that
there is any irregularity, albeit there is none in the acts or omissions of the respondents-appellees.
certiorari is not a substitute for appeal as held time and again by this Court (People vs. Villanueva,
110 SCRA 465), "it being a time honored and well known principle that before seeking judicial
redress, a party must first exhaust the administrative remedies available" (Garcia vs. Teehankee, 27
SCRA 944, April 18, 1969).

Moreover, from the decision of the Secretary of Agriculture and Natural Resources complained of,
petitioners had a plain, speedy and adequate remedy by appealing therefrom to the Chief Executive.
In other words, before filing the present action for certiorari in the court below, they should have
availed of this administrative remedy and their failure to do so must be deemed fatal to their case
[Calo vs. Fuertes, et al., G.R. No. L-16537, June 29,1962]. To place petitioners' case beyond the
pale of this rule, they must show that their case falls — which it does not — within the cases where,
in accordance with our decisions, the aggrieved party need not exhaust administrative remedies
within his reach in the ordinary course of the law [Tapales vs. The President and the Board of
Regents of the U.P., G.R. No. L-17532, March 30, 1963; Mangubat vs. Osmena, G.R. No. L- 12837,
April 30, 1959; Baguio vs. Hon. Jose Rodriguez, G. R. No. L-11078, May 27, 1959; Pascual vs.
Provincial Board, G.R. No. L-11959, Oct. 31, 1959; Marinduque Iron Mines, etc. vs. Secretary of
Public Works, G.R. No. L-15982, May 31, 1963; Alzate vs. Aldaba, G.R. No. L-14407, Feb. 29, 1960
and Demaisip vs. Court of Appeals, G.R. No. L- 13000, Sept. 25, 1959] (Ganob vs. Ramas, 27
SCRA 1178, April 28, 1969).

III

Petitioner-appellant not only failed to exhaust his administrative remedies, but also failed to note that
his action is a suit against the State which, under the doctrine of State immunity from suit, cannot
prosper unless the State gives its consent to be sued Kawananakoa vs. Polybank, 205 U.S. 349;
Siren vs. U.S., 7 Wall. 152; Sec. 16, Art. XV, 1973 Constitution).

The respondents-appellees, in revoking the petitioner-appellant's timber license, were acting within
the scope of their authority. Petitioner-appellant contends that "this case is not a suit against the
State but an application of a sound principle of law whereby administrative decisions or actuations
may be reviewed by the courts as a protection afforded the citizens against oppression" (p. 122, CFI
rec.). But, piercing the shard of his contention, We find that petitioner-appellant's action is just an
attempt to circumvent the rule establishing State exemption from suits. He cannot use that principle
of law to profit at the expense and prejudice of the State and its citizens. The promotion of public
welfare and the protection of the inhabitants near the public forest are property, rights and interest of
the State. Accordingly, "the rule establishing State exeraiption from suits may not be circumvented
by directing the action against the officers of the State instead of against the State itself. In such
cases the State's immunity may be validly invoked against the action as long as it can be shown that
the suit really affects the property, rights, or interests of the State and not merely those of the officer
nominally made party defendant" (SINCO, Phil. Political Law, 10th ed., p. 35; Salgado vs. Ramos, 64
Phil. 724; see also Angat River Irrigation System vs. Angat River Workers' Union, G.R. No. L-10943-
44, Dec. 28, 1957, 102 Phil. 789, 800-802; Mobil PhiL vs. Customs Arrastre Service, 18 SCRA 1120,
1121-1125; Bureau of Printing vs. Bureau of Printing Employees' Association, 1 SCRA 340, 341,
343).
Both the Secretary of Agriculture and Natural Resources and the Director of Forestry acted in their
capacity as officers of the State, representatives of the sovereign authority discharging governmental
powers. A private individual cannot issue a timber license.

Consequently, a favorable judgment for the petitioner-appellant would result in the government
losing a substantial part of its timber resources. This being the case, petitioner-appellant's action
cannot prosper unless the State gives its consent to be sued.

IV

Granting arguendo, that petitioner-appellant's timber license is valid, still respondents-appellees can
validly revoke his timber license. As pointed out earlier, paragraph 27 of the rules and regulations
included in the ordinary timber license states: "The terms and conditions of this license are subject to
change at the discretion of the Director of Forestry, and that this license may be made to expire at
an earlier date, when public interests so require" (Exh. D, p. 22, CFI rec.). A timber license is an
instrument by which the State regulates the utilization and disposition of forest resources to the end
that public welfare is promoted. A timber license is not a contract within the purview of the due
process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by
public interest or public welfare as in this ceise

"A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority, federal, state, or municipal, granting it and the person to whom it is
granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation"
(37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights,
neither is it property or property rights (People vs. Ong Tin 54 O.G. 7576). In the case of Pedro vs.
Provincial Board of Rizal (56 Phil. 123), it was held that:

A license authorizing the operation and exploitation of a cockpit is not property of

which the holder may not be deprived without due process of law, but a mere
privilege which may be revoked when public interests so require.

The welfare of the people is the supreme law. Thus, no franchise or right can be availed of to defeat
the proper exercise of police power (Surigao Electric Co., Inc. vs. Municipality of Surigao, 24 SCRA
898, Aug. 30, 1968). The State has inherent power enabling it to prohibit all things hurtful to comfort,
safety, and welfare of society (Edu vs. Ericta, 35 SCRA 481, Oct. 24,1970).

As provided in the aforecited provision, timber licenses are subject to the authority of the Director of
Forestry. The utilization and disposition of forest resources is directly under the control and
supervision of the Director of Forestry. However, "while Section 1831 of the Revised Administrative
Code provides that forest products shall be cut, gathered and removed from any forest only upon
license from the Director of Forestry, it is no less true that as a subordinate officer, the Director of
Forestry is subject to the control of the Department Head or the Secretary of Agriculture and Natural
Resources (See. 79[c], Rev. Adm. Code), who, therefore, may impose reasonable regulations in the
exercise of the powers of the subordinate officer" (Director of Forestry vs. Benedicto, 104 SCRA
309, May 5, 1981). The power of control of the Department Head over bureaus and offices includes
the power to modify, reverse or set aside acts of subordinate officials (Province of Pangasinan vs.
Secretary of Public Works and Communications, 30 SCRA 134, Oct. 31, 1969; Montano vs. Silvosa,
97 Phil. 143, 144, 147-148). Accordingly, respondent-appellee Secretary of Agriculture and Natural
Resources has the authority to revoke, on valid grounds, timber licenses issued by the Director of
Forestry. There being supporting evidence, the revocation of petitioner-appellant's timber license
was a wise exercise of the power of the respondent- appellee (Secretary of Agriculture and Natural
Resources) and therefore, valid.

Thus, "this Court had rigorously adhered to the principle of conserving forest resources, as corollary
to which the alleged right to them of private individuals or entities was meticulously inquired into and
more often than not rejected. We do so again" (Director of Forestry vs. Benedicto, supra). WE
reiterate Our fidelity to the basic policy of conserving the national patrimony as ordained by the
Constitution.

WHEREFORE, IN VIEW OF ALL THE FOREGOING, THE ORDER APPEALED FROM IS HEREBY
.AFFIRMED IN TOTO. COSTS AGAINST PETITIONER-APPELLANT.

SO ORDERED,