CALAPAN LUMBER COMPANY, INC.

, plaintiff-appellee VS COMMUNITY SAWMILL COMPANY,

ET AL., defendants-appellants.
Facts:
This is an action for injunction, prohibition against defendant public officers, compensatory,
exemplary and nominal damages, attorney's fees and costs.
After trial, the Court of First Instance of Oriental Mindoro rendered judgment Ordering:
(a) That the writ of preliminary injunction issued against the Community Sawmill Company
be made permanent, perpetually restraining the said defendants Lao Kee (alias Lu Pong),
Lee Cok, Tan Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao, Kiok Chia and
Community Sawmill Company, their agents, attorneys, or other persons or entities from
acting on their behalf;
(b) The same defendants named in the immediately preceding paragraph to pay jointly and
severally to the plaintiff the sum of P10,000.00 as attorney's fees and to pay the costs;
4. Absolving from the third amended complaint the defendants Marciano Roque, Pablo
Lorenzo, Isaias Fernando, Francisco Infantado, Bernabe Jamilla and Cenon C. Laurena;
5. Dismissing all the counterclaims filed by the defendants for lack of sufficient merits.
(Civil Case No. R-542)
From the judgment thus rendered, the defendants Lao Kee (alias Lu Pong), Lee Cok Tan
Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak Tiao, Kiok Chia, all acting under the name and
style of Community Sawmill Company, appealed to this Court. They claim that the trial
court committed the following errors:
1. The lower court erred in holding that the road in question is a private road and that,
therefore, plaintiff could legally deny its use to herein appellants.
2. The lower court erred in ordering herein appellants to pay plaintiff attorney's fees.
3. The lower court erred in holding that plaintiff can recover expenses of litigation under
article 2208 of the Civil Code.
4. The lower court erred in not dismissing the complaint and finding for herein appellants
on their counterclaim.
At the trial, the parties submitted to the Court a stipulation of facts which reads:
1. That the parties agree to the existence and authenticity resolutions amd endorcements
which were passed by the Provincial Board of Oriental Mindoro. The parties respectfully
pray that the foregoing stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence to prove their case not
covered by this stipulation of facts.
Resolution No. 222, adopted 4 December 1950 states that: unfinished provincial road in the
barrio of Viga, of the municipality of Calapan, known as the Viga-Communal-Goob Road, the
construction of which could not be undertaken by the province due to insufficiency of funds
and that the Calapan Lumber Co., Inc., through its President, Mr. D. M. Gotauco, in a letter
addressed to the Governor of this province has made representations to undertake the
construction of said road under certain conditions
Thus the province is willing to accede to the request of the Calapan Lumber Co., Inc. and to
give it the sole right for its use, provided that after a period of twenty (20) years, said
company shall donate to the province the road it had constructed, provided further that
during the said period of 20 years other concerns dealing in logs and/or lumber may use
the same road upon permission granted to them by the said Calapan Lumber Co., Inc.; and
provided finally that said road is open to all non-logging concerns or individuals during the
said period of 20 years.

Resolution No. 119, adopted 6 April 1953:

Enumerates the conditions:
(1) That after a period of twenty (20) years, said company shall donate to the province the
road it had constructed;
(2) That during the said period of 20 years other concerns dealing in logs and/or lumber
may use the same road upon permission granted to them by the Calapan Lumber Co.; and
(3) That said road is open to all non-logging concerns or individuals during the said period
of 20 years.
Whereas, according to the records of the Provincial Board the said resolution has not been
amended or modified up to the present, and, therefore, the same is still in force and
binding as per agreement stipulated therein;
Whereas, this Board has received reliable information to the effect that another certain
lumber company is attempting to use, or has actually used the same road, by allowing to
pass thru it its heavy trucks and tractors without securing any permission from the Calapan
Lumber Co., Inc., to the detriment and prejudice of the interests of the latter lumber
company which shouldered the cost of its completion in accordance with the rights granted
to it by the province; and
Whereas, after a careful consideration of the matter this Board is of the opinion that the
right of the Calapan Lumber Co., Inc. over the said road as stipulated in the condition set
forth in the resolution must be upheld for obvious reasons; Now, therefore, be it RESOLVED
by the Provincial Board of Oriental Mindoro to authorize, as it hereby authorizes, the
Calapan Lumber Company, Inc., to prohibit the use of the Viga-Communal-Goob provincial
road, from point Km. 12.38 up to Km. 15.88 of said road, by any other concern or company
dealing in logs and/or lumber, without the permission or consent of the said Calapan
Lumber Co., Inc. in accordance with one of the stipulations or conditions agreed upon in
Resolution No. 222, series of 1950, of the Provincial Board
Resolution No. 186, adopted 19 June 1953, reads:
REVOKING RESOLUTIONS NOS. 222, SERIES OF 1950, AND 119, SERIES OF 1953, OF THE
PROVINCIAL BOARD, GRANTING THE CALAPAN LUMBER COMPANY THE EXCLUSIVE RIGHT
UNDER CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB PROVINCIAL ROAD FOR
A PERIOD OF TWENTY (20) YEARS.
In a 9th Indorsement dated May 11, 1953, the pertinent parts of which are quoted
hereunder, the Honorable, the Executive Secretary to whom the case regarding this matter
was appealed for decision, and upon the recommendation of the Director of Public Works
and with the concurrence of the Undersecretary of Public Works and Communications, ruled
that provincial roads are considered as properties for public use and the
Provincial Board may not therefore grant the exclusive use thereof to any private
individual or entity which would discriminate against or exclude the general
public from a reasonable use thereof, and therefore, the resolution in question
should be revoked.
In this connection, it should be stated that Provincial roads are properties for public use and
the provincial board may not grant the exclusive use thereof to any private individual or
entitle or enter into a contract or agreement which would tend to discriminate against or
exclude the general public from a reasonable use thereof.
Resolutions Nos. 222, series of 1950, and 119, series of 1953, of the Provincial Board,
granting the Calapan Lumber Company an exclusive right to use the said road for a period
of twenty (20) year and to prohibit lumber or logging concerns from using the road in

question without the company's permission, should therefore be revoked.

In consonance with the policy of the law, and as correctly the suggested by the Director of
Public Works and the Undersecretary of Public Works and Communications the portion of
the Viga-Communal Road from Km. 12.38 to 15.89, having a length of 3.5 kilometers,
should be declared a toll road in order to raise funds for its maintenance and with which to
reimburse the Calapan Lumber Company for the expenses the latter had incurred in the
construction of this portion of the road.
Whereas, in view of the said ruling, this Board has been requested to take immediate
action on the matter to declare the above-said portion of the Viga-Communal-Goob
provincial road as a toll road; and, Whereas, according to an estimate made by the office of
the District Engineer the Calapan Lumber Company has spent for the construction of the
portion of the road in question having a length of 3.5 kilometers, the amount of P25,000.00
more or less; Now, therefore, be it RESOLVED, That Resolutions Nos. 222, series of 1950,
and 119, series of 1953, of the Provincial Board, which grant the Calapan Lumber Co., Inc.,
the exclusive right to use the Viga-Communal-Goob provincial road for a period of 20 years,
under certain conditions, be, and hereby are, revoked;
RESOLVED, FURTHER, That the portion of said Viga-Communal-Goob provincial road, from
Point Km. 12.38 up to Km. 15.88 thereof, be and hereby is, declared PROVINCIAL TOLL
ROAD, under the provisions of section 2131 of the Revised Administrative Code; RESOLVED,
FURTHERMORE, That the following toll rates to be paid by any motor vehicle for the use of
the provincial road be, and hereby are, fixed, effective today, June 19, 1953, the proceeds
from which shall be used for the maintenance of the said road and the balance thereof for
the reimbursement to the said company for the expenses it had incurred in the
construction for said portion of the road: For every truck, one way P1.00 For every weapon
carrier, one way .60 For every jeepney .30
PROVIDED, however, that the portion of the road declared herein as provincial toll road
shall continue to be so up to and until the amount spent by the Calapan Lumber Company
for its construction shall have been covered by reimbursement to said company; and
Resolution No. 169, adopted 21 April 1956, revoked Resolution No. 186 in so far as it
declared Provincial Toll Road that part of the road invoked in this case.
There seems to be no doubt that Resolutions Nos. 222 and 119, adopted by the Provincial
Board of Oriental Mindoro quoted above, mere ultra vires, because sections 2067 (f) and
(g) on powers of the provinces as political bodies corporate; 2102 (g) on powers of the
provincial boards; 2106 (f) on powers of the provincial boards to be exercised with the
approval of the Department Head; and 2113 (a) on road and bridge fund, of the Revised
Administrative Code, do not authorize the Provincial Board of Oriental Mindoro to pass and
adopt said resolutions. The contention that the Provincial Board of Oriental Mindoro under
section 2106 (g) invoked by the appellee is authorized to pass those resolutions Nos. 222
and 199 quoted above, is untenable because said paragraph of the section authorizes the
Provincial Board "to permit, upon favorable recommendation by the Secretary of Public
Works and Communications, and subject to such conditions as may properly protect the
public interests, the construction and maintenance, for private use of railways, conduits,
and telephone lines across public thoroughfares, streets, roads, or other public property
and in the province: Provided, That such construction and private use shall not prevent or
obstruct the public use of such thoroughfares, streets, roads or other public property and
that the permit granted shall at all times be subject to revocation by the Secretary of the
Interior, if, in the judgment of that official, the public interest requires it." Consequently,

Resolution No. 186 revoking the two previous resolutions was in order.
The fact that the survey, lay-out and actual construction of the unfinished part of the road
were done at the appellee's expense, does not convert said road after construction into a
private road, for it does not appear that the parts of the land where the road was laid out
and constructed belong to or are owned by the appellee. The evidence shows that the
owners of such parts of land ceded their parts of the land owned by them without any
consideration because of their desire to have the road completed or to connect the ends of
two completed parts of the road. It may be conceded that the appellee built the road in
question in good faith; and such being the case, it may be argued that the appellee is
entitled to keep or have possession of the road until after it shall have been reimbursed of
the expenses it had incurred in constructing and maintaining the road in good condition.
Upon the foregoing considerations, this Court is of the opinion, and so holds, that the
road involved in this case cannot be declared private property, and for that reason
the Provincial Board of Oriental Mindoro may elect between paying the appellee the total
cost of the construction of the road together with lawful interest from the date of actual
disbursement by the appellee to the date of payment by the Province of Oriental Mindoro
within a reasonable period not to exceed one year from the date this judgment shall
become final; or upon securing the recommendation of the Secretary of Public Works and
Communications and authorization of the President of the Philippines to designate such
road an toll road, to raise the necessary fund to reimburse the appellee of the total cost of
construction of the road, together with lawful interest from the date of actual disbursement
by the appellee to the date of payment by the Province of Oriental Mindoro, and the latter
is ordered to refund the amount paid for tolls by, the appellee during the enforcement of
Resolution No. 186 which, as above stated, was unauthorized.