Meaning of Beneficial Ownership [G.R. No. 127882. December 1, 2004.] LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC. vs. Victor Ramos, DENR Secretary

Beneficial Ownership

            Beneficial ownership, as the plain meaning of the words implies, refers to the right to the gains, rewards and advantages generated by the property.

            The concept is not new, but in fact is well entrenched in the law of trusts. Thus, while the trustee holds the legal title to or ownership of the property entrusted to him, he is nevertheless not the beneficial owner. Rather, he holds and administers the property for the benefit of another, called the beneficiary or the cestui que trust. Hence, the profits realized from the administration and management of the property by the trustee, who is the "naked owner," less any lawful fees due to the latter, accrue to the cestui que trust, who is the "beneficial" or "equitable" owner.

            The foregoing concepts are directly applicable to the statement in Section 2, Article XII of the Constitution that "[a]ll lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State."  

The words "owned" and "State" should both be understood on two levels. "Owned" or "ownership" refers to both the legal title to and the beneficial ownership of the natural resources. Similarly, "State" should be understood as denoting both the body politic making up the Republic of the Philippines, i.e., the Filipino people, as well as the Government which represents them and acts on their behalf.