MANILA INTERNATIONAL AIRPORT AUTHORITY vs. COURT OF APPEALS G.R. No. 155650 July 20 2006 F!

"#s$ MIAA received Final Notices of Real Estate Tax Delinquency from the City of Para aque for the taxa!le years "##$ to $%%"& MIAA's real estate tax delinquency (as estimated at P)$* million& The City of Para aque+ throu,h its City Treasurer+ issued notices of levy and (arrants of levy on the Air-ort .ands and /uildin,s& The Mayor of the City of Para aque threatened to sell at -u!lic auction the Air-ort .ands and /uildin,s should MIAA fail to -ay the real estate tax delinquency& MIAA filed (ith the Court of A--eals an ori,inal -etition for -rohi!ition and in0unction+ (ith -rayer for -reliminary in0unction or tem-orary restrainin, order& The -etition sou,ht to restrain the City of Para aque from im-osin, real estate tax on+ levyin, a,ainst+ and auctionin, for -u!lic sale the Air-ort .ands and /uildin,s& Paranaque's Contention1 2ection "#3 of the .ocal 4overnment Code ex-ressly (ithdre( the tax exem-tion -rivile,es of 5,overnment6o(ned and6controlled cor-orations7 u-on the effectivity of the .ocal 4overnment Code& Res-ondents also ar,ue that a !asic rule of statutory construction is that the ex-ress mention of one -erson+ thin,+ or act excludes all others& An international air-ort is not amon, the exce-tions mentioned in 2ection "#3 of the .ocal 4overnment Code& Thus+ res-ondents assert that MIAA cannot claim that the Air-ort .ands and /uildin,s are exem-t from real estate tax& MIAA's contention1 Air-ort .ands and /uildin,s are o(ned !y the Re-u!lic& The ,overnment cannot tax itself& The reason for tax exem-tion of -u!lic -ro-erty is that its taxation (ould not inure to any -u!lic advanta,e+ since in such a case the tax de!tor is also the tax creditor& Issu%$ 89N Air-ort .ands and /uildin,s of MIAA are exem-t from real estate tax under existin, la(s: ;es& Er,o+ the real estate tax assessments issued !y the City of Para aque+ and all -roceedin,s ta<en -ursuant to such assessments+ are void& =eld1

"& MIAA is Not a 4overnment69(ned or Controlled Cor-oration MIAA is not a ,overnment6o(ned or controlled cor-oration !ut an instrumentality of the National 4overnment and thus exem-t from local taxation& MIAA is not a stoc< cor-oration !ecause it has no ca-ital stoc< divided into shares& MIAA has no stoc<holders or votin, shares& MIAA is also not a non6stoc< cor-oration !ecause it has no mem!ers& A non6stoc< cor-oration must have mem!ers& MIAA is a ,overnment instrumentality vested (ith cor-orate -o(ers to -erform efficiently its ,overnmental functions& MIAA is li<e any other ,overnment instrumentality+ the only difference is that MIAA is vested (ith cor-orate -o(ers& 8hen the la( vests in a ,overnment instrumentality cor-orate -o(ers+ the instrumentality does not !ecome a cor-oration& >nless the ,overnment instrumentality is or,ani?ed as a stoc< or non6stoc< cor-oration+ it remains a ,overnment instrumentality exercisin, not only ,overnmental !ut also cor-orate -o(ers& Thus+ MIAA exercises the ,overnmental -o(ers of eminent domain+ -olice authority and the levyin, of fees and char,es& At the same time+ MIAA exercises 5all the -o(ers of a cor-oration under the Cor-oration .a(+ insofar as these -o(ers are not inconsistent (ith the -rovisions of this Executive 9rder&7 $& Air-ort .ands and /uildin,s of MIAA are 9(ned !y the Re-u!lic a& Air-ort .ands and /uildin,s are of Pu!lic Dominion The Air-ort .ands and /uildin,s of MIAA are -ro-erty of -u!lic dominion and therefore o(ned !y the 2tate or the Re-u!lic of the Phili--ines& No one can dis-ute that -ro-erties of -u!lic dominion mentioned in Article *$% of the Civil Code+ li<e 5roads+ canals+ rivers+ torrents+ -orts and !rid,es constructed !y the 2tate+7 are o(ned !y the 2tate& The term 5-orts7 includes sea-orts and air-orts& The MIAA Air-ort .ands and /uildin,s constitute a 5-ort7 constructed !y the 2tate& >nder Article *$% of the Civil Code+ the MIAA Air-ort .ands and /uildin,s are -ro-erties of -u!lic dominion and thus o(ned !y the 2tate or the Re-u!lic of the Phili--ines& The Air-ort .ands and /uildin,s are devoted to -u!lic use !ecause they are used !y the -u!lic for international and domestic travel and trans-ortation& The fact that the MIAA

collects terminal fees and other char,es from the -u!lic does not remove the character of the Air-ort .ands and /uildin,s as -ro-erties for -u!lic use& The char,in, of fees to the -u!lic does not determine the character of the -ro-erty (hether it is of -u!lic dominion or not& Article *$% of the Civil Code defines -ro-erty of -u!lic dominion as one 5intended for -u!lic use&7 The terminal fees MIAA char,es to -assen,ers+ as (ell as the landin, fees MIAA char,es to airlines+ constitute the !ul< of the income that maintains the o-erations of MIAA& The collection of such fees does not chan,e the character of MIAA as an air-ort for -u!lic use& 2uch fees are often termed user's tax& This means taxin, those amon, the -u!lic (ho actually use a -u!lic facility instead of taxin, all the -u!lic includin, those (ho never use the -articular -u!lic facility& !& Air-ort .ands and /uildin,s are 9utside the Commerce of Man The Court has also ruled that -ro-erty of -u!lic dominion+ !ein, outside the commerce of man+ cannot !e the su!0ect of an auction sale& Pro-erties of -u!lic dominion+ !ein, for -u!lic use+ are not su!0ect to levy+ encum!rance or dis-osition throu,h -u!lic or -rivate sale& Any encum!rance+ levy on execution or auction sale of any -ro-erty of -u!lic dominion is void for !ein, contrary to -u!lic -olicy& Essential -u!lic services (ill sto- if -ro-erties of -u!lic dominion are su!0ect to encum!rances+ foreclosures and auction sale& This (ill ha--en if the City of Para aque can foreclose and com-el the auction sale of the )%%6hectare run(ay of the MIAA for non6-ayment of real estate tax& c& MIAA is a Mere Trustee of the Re-u!lic MIAA is merely holdin, title to the Air-ort .ands and /uildin,s in trust for the Re-u!lic& 2ection *@+ Cha-ter "$+ /oo< I of the Administrative Code allo(s instrumentalities li<e MIAA to hold title to real -ro-erties o(ned !y the Re-u!lic& n MIAA's case+ its status as a mere trustee of the Air-ort .ands and /uildin,s is clearer !ecause even its executive head cannot si,n the deed of conveyance on !ehalf of the Re-u!lic& 9nly the President of the Re-u!lic can si,n such deed of conveyance& d& Transfer to Reor,ani?ation MIAA (as Meant to Im-lement a

The transfer of the Air-ort .ands and /uildin,s from the /ureau of Air Trans-ortation to MIAA (as not meant to transfer !eneficial o(nershi- of these assets from the Re-u!lic to MIAA& The -ur-ose (as merely toreor,ani?e a

division in the /ureau of Air Trans-ortation into a se-arate and autonomous !ody& The Re-u!lic remains the !eneficial o(ner of the Air-ort .ands and /uildin,s& MIAA itself is o(ned solely !y the Re-u!lic& No -arty claims any o(nershi- ri,hts over MIAA's assets adverse to the Re-u!lic& e& Real Pro-erty 9(ned !y the Re-u!lic is Not Taxa!le 2ec $3* of the .4C -rovides that real -ro-erty o(ned !y the Re-u!lic of the Phili--ines or any of its -olitical su!divisions exce-t (hen the !eneficial use thereof has !een ,ranted+ for consideration or other(ise+ to a taxa!le -erson follo(in, are exem-ted from -ayment of the real -ro-erty tax& =o(ever+ -ortions of the Air-ort .ands and /uildin,s that MIAA leases to -rivate entities are not exem-t from real estate tax& For exam-le+ the land area occu-ied !y han,ars that MIAA leases to -rivate cor-orations is su!0ect to real estate tax& htt-1AAthestraydecision&(ord-ress&comA$%"%A%BA%$Amanila6 international6air-ort6authority6vs6court6of6a--ealsA MIAA vs Court of A--eals MIAA v. Cou&# o' A((%!ls G.R. No. 155650 July 20 2006 F!"#s$ The Manila International Air-ort Authority CMIAAD o-erates the Ninoy Aquino International Air-ort CNAIAD Com-lex in Para aque City under Executive 9rder No& #%3 CMIAA CharterD+ as amended& As such o-erator+ it administers the land+ im-rovements and equi-ment (ithin the NAIA Com-lex& In March "##B+ the 9ffice of the 4overnment Cor-orate Counsel C94CCD issued 9-inion No& %)" to the effect that the .ocal 4overnment Code of "##" C.4CD (ithdre( the exem-tion from real estate tax ,ranted to MIAA under 2ection $" of its Charter& Thus+ MIAA -aid some of the real estate tax already due& In Eune $%%"+ it received Final Notices of Real Estate Tax Delinquency from the City of Para aque for the taxa!le years "##$ to $%%"& The City Treasurer su!sequently issued notices of levy and (arrants of levy on the air-ort lands and !uildin,s& At the instance of MIAA+ the 94CC issued 9-inion No& "*B clarifyin, 9-inion No& %)"+ -ointin, out that 2ec& $%) of the

.4C requires -ersons exem-t from real estate tax to sho( -roof of exem-tion& Accordin, to the 94CC+ 2ec& $" of the MIAA Charter is the -roof that MIAA is exem-t from real estate tax& MIAA+ thus+ filed a -etition (ith the Court of A--eals see<in, to restrain the City of Para aque from im-osin, real estate tax on+ levyin, a,ainst+ and auctionin, for -u!lic sale the air-ort lands and !uildin,s+ !ut this (as dismissed for havin, !een filed out of time& =ence+ MIAA filed this -etition for revie(+ -ointin, out that it is exem-t from real estate tax under 2ec& $" of its charter and 2ec& $3* of the .4C& It invo<es the -rinci-le that the ,overnment cannot tax itself as a 0ustification for exem-tion+ since the air-ort lands and !uildin,s+ !ein, devoted to -u!lic use and -u!lic service+ are o(ned !y the Re-u!lic of the Phili--ines& 9n the other hand+ the City of Para aque invo<es 2ec& "#3 of the .4C+ (hich ex-ressly (ithdre( the tax exem-tion -rivile,es of ,overnment6o(ned and controlled cor-orations C49CCD u-on the effectivity of the .4C& It asserts that an international air-ort is not amon, the exce-tions mentioned in the said la(& Mean(hile+ the City of Para aque -osted and -u!lished notices announcin, the -u!lic auction sale of the air-ort lands and !uildin,s& In the afternoon !efore the scheduled -u!lic auction+ MIAA a--lied (ith the Court for the issuance of a TR9 to restrain the auction sale& The Court issued a TR9 on the day of the auction sale+ ho(ever+ the same (as received only !y the City of Para aque three hours after the sale& Issu%$ 8hether or not the air-ort lands and !uildin,s of MIAA are exem-t from real estate tax: H%l)$ The Petition is 4RANTED& The air-ort lands and !uildin,s of MIAA are exem-t from real estate tax im-osed !y local ,overnments& 2ec& $*3CaD of the .4C exem-ts from real estate tax any real -ro-erty o(ned !y the Re-u!lic of the Phili--ines& This exem-tion should !e read in relation (ith 2ec& "33CoD of the .4C+ (hich -rovides that the exercise of the taxin, -o(ers of local ,overnments shall not extend to the levy of taxes+ fees or char,es of any <ind on the National 4overnment+ its a,encies and instrumentalities& These -rovisions reco,ni?e the !asic -rinci-le that local

,overnments cannot tax the national ,overnment+ (hich historically merely dele,ated to local ,overnments the -o(er to tax& The rule is that a tax is never -resumed and there must !e clear lan,ua,e in the la( im-osin, the tax& This rule a--lies (ith ,reater force (hen local ,overnments see< to tax national ,overnment instrumentalities& Moreover+ a tax exem-tion is construed li!erally in favor of national ,overnment instrumentalities& MIAA is not a 49CC+ !ut an instrumentality of the ,overnment& The Re-u!lic remains the !eneficial o(ner of the -ro-erties& MIAA itself is o(ned solely !y the Re-u!lic& At any time+ the President can transfer !ac< to the Re-u!lic title to the air-ort lands and !uildin,s (ithout the Re-u!lic -ayin, MIAA any consideration& As lon, as the air-ort lands and !uildin,s are reserved for -u!lic use+ their o(nershiremains (ith the 2tate& >nless the President issues a -roclamation (ithdra(in, these -ro-erties from -u!lic use+ they remain -ro-erties of -u!lic dominion& As such+ they are inaliena!le+ hence+ they are not su!0ect to levy on execution or foreclosure sale+ and they are exem-t from real estate tax& =o(ever+ -ortions of the air-ort lands and !uildin,s that MIAA leases to -rivate entities are not exem-t from real estate tax& In such a case+ MIAA has ,ranted the !eneficial use of such -ortions for a consideration to a taxa!le -erson& htt-1AAc!cla(matters&!lo,s-ot&comA$%"%A%"Amiaa6vs6court6 of6a--eals&html Manila International Airport Authority vs CAGR No. 155650, July 20, 2006, 4 5 !CRA 5 1 "a#ts$Manila International Airport Authority %MIAA& is the operator o' the Ninoy International Airportlo#ate( at )arana*ue City. +he ,''i#ers o' )arana*ue City sent noti#es to MIAA (ue to real estate ta-(elin*uen#y. MIAA then settle( so.e o' the a.ount. /hen MIAA 'aile( to settle the entire a.ount, theo''i#ers o' )arana*ue #ity threatene( to levy an( su01e#t to au#tion the lan( an( 0uil(in2s o' MIAA,3hi#h they (i(. MIAA sou2ht 'or a +e.porary Restrainin2 ,r(er 'ro. the CA 0ut 'aile( to (o so 3ithinthe 60 (ays re2le.entary perio(, so the petition 3as (is.isse(. MIAA then sou2ht 'or the +R, 3ith the!upre.e Court a (ay 0e'ore the pu0li# au#tion, MIAA 3as 2rante( 3ith the +R,

0ut un'ortunately the+R, 3as re#eive( 0y the )arana*ue City o''i#ers 4 hours a'ter the pu0li# au#tion.MIAA #lai.s that althou2h the #harter provi(es that the title o' the lan( an( 0uil(in2 are 3ithMIAA still the o3nership is 3ith the Repu0li# o' the )hilippines. MIAA also #onten(s that it is aninstru.entality o' the 2overn.ent an( as su#h e-e.pte( 'ro. real estate ta-. +hat the lan( an( 0uil(in2so' MIAA are o' pu0li# (o.inion there'ore #annot 0e su01e#te( to levy an( au#tion sale. ,n the other han(, the o''i#ers o' )arana*ue City #lai. that MIAA is a 2overn.ent o3ne( an( #ontrolle( #orporationthere'ore not e-e.pte( to real estate ta-. Issues$/hether or not MIAA is an instru.entality o' the 2overn.ent an( not a 2overn.ent o3ne( an(#ontrolle( #orporation an( as su#h e-e.pte( 'ro. ta-./hether or not the lan( an( 0uil(in2s o' MIAA are part o' the pu0li# (o.inion an( thus #annot 0e the su01e#t o' levy an( au#tion sale. Rulin2$5n(er the 6o#al 2overn.ent #o(e, 2overn.ent o3ne( an( #ontrolle( #orporations are note-e.pte( 'ro. real estate ta-. MIAA is not a 2overn.ent o3ne( an( #ontrolle( #orporation, 'or to 0e#o.e one MIAA shoul( either 0e a sto#7 or non sto#7 #orporation. MIAA is not a sto#7 #orporation 'or its #apital is not (ivi(e( into shares. It is not a non sto#7 #orporation sin#e it has no .e.0ers. MIAA is aninstru.entality o' the 2overn.ent veste( 3ith #orporate po3ers an( 2overn.ent 'un#tions.5n(er the #ivil #o(e, property .ay either 0e un(er pu0li# (o.inion or private o3nership. +hoseun(er pu0li# (o.inion are o3ne( 0y the !tate an( are utili8e( 'or pu0li# use, pu0li# servi#e an( 'or the(evelop.ent o' national 3ealth. +he ports in#lu(e( in the pu0li# (o.inion pertain either to seaports or airports. /hen properties un(er pu0li# (o.inion #ease to 0e 'or pu0li# use an( servi#e, they 'or. part o' the patri.onial property o' the !tate.+he #ourt hel( that the lan( an( 0uil(in2s o' MIAA are part o' the pu0li# (o.inion. !in#e theairport is (evote( 'or pu0li# use, 'or the (o.esti# an( international travel an( transportation. 9ven i' MIAA #har2e 'ees, this is 'or support o' its operation an( 'or re2ulation an( (oes not #han2e the #hara#ter o' the lan( an( 0uil(in2s o' MIAA as part o' the pu0li# (o.inion. As part o' the pu0li# (o.inion the lan(an( 0uil(in2s o' MIAA are outsi(e the #o..er#e o' .an. +o su01e#t the. to levy an( pu0li# au#tion is#ontrary to pu0li# poli#y. 5nless the )resi(ent issues a pro#la.ation 3ith(ra3in2 the airport lan( an( 0uil(in2s 'ro. pu0li# use, these properties re.ain to 0e o' pu0li# (o.inion an( are inaliena0le. As lon2as the lan( an( 0uil(in2s are 'or pu0li# use the o3nership is 3ith the Repu0li# o' the )hilippines.

Serg's v. PCI Leasing !er2:s )ro(u#ts, In#. vs. )CI 6easin2 G.R. No. 14;;05. Au2ust 22, 2000 "AC+!$

3rits o' replevin are issue( 'or the re#overy o' personal property only. Arti#le 415 %5& o' the Civil Co(e provi(es that .a#hinery, re#epta#les, instru.ents or i.ple.ents inten(e( 0y the o3ner o' the tene.ent 'or an in(ustry or 3or7s 3hi#h .ay 0e #arrie( on in a 0uil(in2 or on a pie#e o' lan(, an( 3hi#h ten( (ire#tly to .eet the nee(s o' the sai( in(ustry or 3or7s In the present #ase, the .a#hines that 3ere the su01e#ts o' the /rit o' !ei8ure 3ere pla#e( 0y petitioners in the 'a#tory 0uilt on their o3n lan(.+hey 3ere essential an( prin#ipal ele.ents o' their #ho#olate?.a7in2 in(ustry.@en#e, althou2h ea#h o' the. 3as .ova0le or personal property on its o3n, all o' the. have 0e#o.e Ai..o0ili8e( 0y (estination 0e#ause they are essential an( prin#ipal ele.ents in the in(ustry.B @o3ever, #ontra#tin2 parties .ay vali(ly stipulate that a real property 0e #onsi(ere( as personal. A'ter a2reein2 to su#h stipulation, they are #onse*uently estoppe( 'ro. #lai.in2 other3ise.5n(er the prin#iple o' estoppel, a party to a #ontra#t is or(inarily pre#lu(e( 'ro. (enyin2 the truth o' any .aterial 'a#t 'oun( therein. !e#tion 12.1 o' the A2ree.ent 0et3een the parties provi(es A+he )R,)9R+C is, an( shall at all ti.es 0e an( re.ain, personal property not3ithstan(in2 that the )R,)9R+C or any part thereo' .ay no3 0e, or herea'ter 0e#o.e, in any .anner a''i-e( or atta#he( to or e.0e((e( in, or per.anently restin2 upon, real property or any 0uil(in2 thereon, or atta#he( in any .anner to 3hat is per.anent.B +he .a#hines are personal property an( they are proper su01e#ts o' the /rit o' Replevin G.R. No. 92013. July 25, 1990 G.R. No. 92047, July 25, 1990 OJEDA, petitioner, vs. E E!"#$%E &E!RE#AR' (A!ARA$G, JR., et )l *A!#&+ These are two petitions for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 30 !opponggi, "#$home %inato#ku, Tok&o, 'apan scheduled on (ebruar& )1, 1990*

)CI 6easin2 an( "inan#e 'ile( a #o.plaint 'or su. o' .oney, 3ith an appli#ation 'or a 3rit o' replevin. Ju(2e issue( a 3rit o' replevin (ire#tin2 its sheri'' to sei8e an( (eliver the .a#hineries an( e*uip.ent to )CI 6easin2 a'ter 5 (ays an( upon the pay.ent o' the ne#essary e-penses. +he sheri'' pro#ee(e( to petitioner<s 'a#tory, sei8e( one .a#hinery, 3ith 3or( that he 3oul( return 'or other .a#hineries. )etitioner %!er2:s )ro(u#ts& 'ile( a .otion 'or spe#ial prote#tive or(er to (e'er en'or#e.ent o' the 3rit o' replevin. )CI 6easin2 oppose( the .otion on the 2roun( that the properties 3ere still personal an( there'ore #an still 0e su01e#te( to sei8ure an( 3rit o' replevin. )etitioner asserte( that properties sou2ht to 0e sei8e( 3ere i..ova0le as (e'ine( in Arti#le 415 o' the Civil Co(e. !heri'' 3as still a0le to ta7e possession o' t3o .ore .a#hineries

In its (e#ision on the ori2inal a#tion 'or #ertiorari 'ile( 0y the )etitioner, the appellate #ourt, Citin2 the A2ree.ent o' the parties, hel( that the su01e#t .a#hines 3ere personal property, an( that they ha( only 0een lease(, not o3ne(, 0y petitioners= an( rule( that the >3or(s o' the #ontra#t are #lear an( leave no (ou0t upon the true intention o' the #ontra#tin2 parties.> I!!59$ /hether or not the .a#hineries 0e#a.e real property 0y virtue o' i..o0ili8ation. Rulin2$ )etitioners #onten( that the su01e#t .a#hines use( in their 'a#tory 3ere not proper su01e#ts o' the /rit issue( 0y the R+C, 0e#ause they 3ere in 'a#t real property. /rit o' Replevin$ Rule 60 o' the Rules o' Court provi(es that

The subject propert& in this case is one of the four +,- properties in 'apan acquired b& the .hilippine government under the !eparations /greement entered into with 'apan on %a& 9, 19" , and is part of the indemnification to the (ilipino people for their losses in life and propert& and their suffering during 0orld 0ar 11* /s intended, the subject propert& became the site of the .hilippine 2mbass& until the latter was transferred to 3ampeidai on 'ul& )), 197 * 4ue to the failure of our government to provide necessar& funds, the !oppongi propert& has remained undeveloped since that time* / proposal was presented to .resident $ora5on $* /quino b& former .hilippine /mbassador to 'apan, $arlos '* 6alde5, to make the propert& the subject of a lease agreement with a 'apanese firm where, at the end of the lease period, all the three leased buildings shall be occupied and used b& the .hilippine government* 7n /ugust 11, 198 , .resident /quino created a committee to stud& the disposition9utili5ation of .hilippine government properties in Tok&o and :obe* 7n 'ul& )", 1987, the .resident issued 2;ecutive 7rder 3o* )9 entitling non#(ilipino citi5ens or entities to avail of reparations< capital goods and services in the event of sale, lease or disposition* The four properties in 'apan including the !oppongi were specificall& mentioned in the first =0hereas> clause* /midst opposition b& various sectors, the 2;ecutive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the !oppongi lot* The propert& has twice been set for bidding at a minimum floor price at ?))" million* $&&"E&+ The petitioner in @*!* 3o* 9)013 raises the following issuesA +1- $an the !oppongi propert& and others of its kind be alienated b& the .hilippine @overnmentBC and +)- 4oes the $hief 2;ecutive, her officers and agents, have the authorit& and jurisdiction, to sell the !oppongi propert&B 1n @*!* 37* 9)0,7, apart from questioning the authorit& of the government to alienate the !oppongi propert& assails the constitutionalit& of 2;ecutive 7rder 3o* )9 , the petitioner also questions the bidding procedures of the $ommittee on the Dtili5ation or 4isposition of .hilippine @overnment .roperties in 'apan for being discriminator& against (ilipino citi5ens and (ilipino#owned entities b& den&ing them the right to be informed about the bidding requirements* ,E-D+ The petition is granted* /s propert& of public dominion, the

!oppongi lot is outside the commerce of man* 1t cannot be alienated* 1ts ownership is a special collective ownership for general use and enjo&ment, an application to the satisfaction of collective needs, and resides in the social group* The purpose is not to serve the Etate as a juridical person, but the citi5ensC it is intended for the common and public welfare and cannot be the object of appropriation* +Taken from 3 %anresa, # 9C cited in Tolentino, $ommentaries on the $ivil $ode of the .hilippines, 19 3 2dition, 6ol* 11, p* ) -* The !oppongi propert& is correctl& classified under paragraph ) of /rticle ,)0 of the $ivil $ode as propert& belonging to the Etate and intended for some public service* The fact that the !oppongi site has not been used for a long time for actual 2mbass& service does not automaticall& convert it to patrimonial propert&* /n& such conversion happens onl& if the propert& is withdrawn from public use +$ebu 7;&gen and /cet&lene $o* v* Fercilles, E$!/ ,81 G197"H-* / propert& continues to be part of the public domain, not available for private appropriation or ownership =until there is a formal declaration on the part of the government to withdraw it from being such +1gnacio v* 4irector of Iands, 108 .hil* 33" G19 0H-* /n abandonment of the intention to use the !oppongi propert& for public service and to make it patrimonial propert& under /rticle ,)) of the $ivil $ode must be definite* /bandonment cannot be inferred from the non#use alone speciall& if the non#use was attributable not to the government<s own deliberate and indubitable will but to a lack of financial support to repair and improve the propert& +Eee Jeirs of (elino Eantiago v* Ia5arao, 1 E$!/ 3 8 G1988H-* /bandonment must be a certain and positive act based on correct legal premises* / mere transfer of the .hilippine 2mbass& to 3ampeidai in 197 is not relinquishment of the !oppongi propert&<s original purpose* 2;ecutive 7rder 3o* )9 , though its title declares an =authorit& to sell>, does not have a provision in this te;t e;pressl& authori5ing the sale of the four properties procured from 'apan for the government sector* 1t merel& intends to make the properties available to foreigners and not to (ilipinos alone in case of a sale, lease or other disposition* !ep /ct 3o* "7, does not authori5e the 2;ecutive 4epartment to sell the !oppongi propert&* 1t merel& enumerates possible sources of future funding to augment +as and when needed- the /grarian !eform (und created under 2;ecutive 7rder 3o* )99* %oreover, .resident /quino<s approval of the recommendation b& the investigating committee to sell the !oppongi propert& was premature or, at the ver& least, conditioned on a valid change in the public character of the !oppongi propert&* 1t does not have the force and effect of law since the .resident alread& lost her

legislative powers* The $ongress had alread& convened for more than a &ear* /ssuming that the !oppongi propert& is no longer of public dominion, there is another obstacle to its sale b& the respondents* There is no law authori5ing its conve&ance, and thus, the $ourt sees no compelling reason to tackle the constitutional issue raised b& petitioner 7jeda* "AC+!$ +he su01e#t Roppon2i property is one o' the properties a#*uire( 0y the )hilippines 'ro. Japan pursuant to a Reparations A2ree.ent. +he property is 3here the )hilippine 9.0assy 3as on#e lo#ate(, 0e'ore it trans'erre( to the Na.pei(ai property. It 3as (e#i(e( that the properties 3oul( 0e availa0le to sale or (isposition. ,ne o' the 'irst properties opene( up 'or pu0li# au#tion 3as the Roppon2i property, (espite nu.erous oppositions 'ro. (i''erent se#tors.

@96D$ +he Roppon2i property 3as a#*uire( to2ether 3ith the other properties throu2h reparation a2ree.ents. +hey 3ere assi2ne( to the 2overn.ent se#tor an( that the Roppon2i property 3as spe#i'i#ally (esi2nate( un(er the a2ree.ent to house the )hilippine e.0assy. It is o' pu0li# (o.inion unless it is #onvin#in2ly sho3n that the property has 0e#o.e patri.onial. +he respon(ents have 'aile( to (o so. As property o' pu0li# (o.inion, the Roppon2i lot is outsi(e the #o..er#e o' .an. It #annot 0e alienate(. Its o3nership is a spe#ial #olle#tive o3nership 'or 2eneral use an( pay.ent, in appli#ation to the satis'a#tion o' #olle#tive nee(s, an( resi(es in the so#ial 2roup. +he purpose is not to serve the !tate as the 1uri(i#al person 0ut the #iti8ens= it is inten(e( 'or the #o..on an( pu0li# 3el'are an( #annot 0e the o01e#t o' appropriation. +he 'a#t that the Roppon2i site has not 0een use( 'or a lon2 ti.e 'or a#tual 9.0assy servi#e (oesn:t auto.ati#ally #onvert it to patri.onial property. Any su#h #onversion happens only i' the property is 3ith(ra3n 'ro. pu0li# use. A property #ontinues to 0e part o' the pu0li# (o.ain, not availa0le 'or

private appropriation or o3nership until there is a 'or.al (e#laration on the part o' the 2overn.ent to 3ith(ra3 it 'ro. 0ein2 su#h. 6+D GAR!$A %& !A 11 (eb I K ,8971 L'anuar& )), 1980 L '* /quino *).ts+ This case is about the issuance of two or more transfer certificates of title to different persons for the same lot, or subdivisions thereof, due to the fact that the original title was allegedl& not cancelled when the first transfer certificates of title were issued to replace the original title* / deed of sale for lots 2 and @ of Jacienda %a&silo and covered b& 7$T 3o* 983 was e;ecuted in favor of 1smael Iapus, a bona fide occupant thereof* The deed of sale was presented for registration and contained entries showing that it was annotated on the back of the 7$T* $ontrar& to E7. however, the deed of sale was not annotated on the 7$T and that consequentl&, that title was apparentl& not cancelled* /s a result of the registration of the deed of sale, T$T 3o* ,910 +=Iapus Title>- was issued to Iapus* Dpon his death, the two lots were inherited b& his daughter $arolina Iapu5#@o5on, who had the land subdivided into "" lots and sold some to her now co# respondents* Iapus and successors#in#interest have been in possession of the lands even before 1910 of more than 70 &ears* 1n 19 ), the !iveras, alleged heirs of the late %aria de la $oncepcion 6idal filed a motion in land registration cases, alleging that the& were deprived of their participation in the Jacienda %a&silo* Eince per the 7$T the land seemed unencumbered, the court adjudicated the land in their favor* The 7$T was then cancelled and T$T 3o* 11))3" +=!ivera Title>was issued to the !iveras* Iots " and 7 +2 and @- were then assigned to Fartolome !ivera to Eergio $ru5 and .acifico @arcia, and subsequent T$Ts were issued in their behalf* @arcia had Iot 7 +@- subdivided into lots / and F, retained lot / and assigned F to /ntonio %uno5* %uno5 mortgaged lot F to /ssociated Fanking $orp* 7n the other hand, $ru5 sold Iot " +2- to Eantiago @o* @o mortgaged Iot " to .hilippine 3ational Fank* Foth %uno5 and @o did not pa& their mortgage debts, hence the two banks

foreclosed the properties* .3F bought the mortgaged Iot " at the auction, but notice of lis pendens was alread& annotated on the title* !iveras and their successors#in#interest have never set foot on the disputed lots* @o5on finall& learned about the !iveras and others acquiring the land, had her adverse claims registered on the titles of lots " and 7 and filed an action to quiet title and damages* The trial court ruled in favor of @o5on and co#plaintiffs and voided the T$Ts issued to the !iveras, others* $/ affirmed the decision* @arcia and .3F appealed*

would be destro&ed* The bank should have made an on#the#spot investigation of the lot mortgaged*

$ssue+ 093 the 19)0 Iapus title prevails over the 19 3 !ivera title and subsequent titles derived from itB

,el/+ 'es, -)pus title prev)ils. Iapus was an innocent purchaser for value who validl& transmitted to his successors#in#interest his indefeasible title or ownership over the disputed lots* That title could not be nullified or defeated b& the issuance ,3 &ears later to other persons of another title over the same lots due to the failure of the register of deeds to cancel the title preceding the title issued to Iapus* This must be so considering that Iapus and his successors#in#interest remained in possession of the disputed lots and the rival claimants never possessed the same* #0e 1ener)l rule is t0)t in t0e .)se o2 t3o .erti2i.)tes o2 title, purportin1 to in.lu/e t0e s)4e l)n/, t0e e)rlier in /)te prev)ils. $t is settle/ t0)t in t0is 5uris/i.tion t0e 4)6i4 prior est in tempore, potior est in jure 70e 30o is 2irst in ti4e is pre2erre/ in ri10t8 is 2ollo3e/ in l)n/ res1istr)tion 4)tters. The contention of .3F that it was a bu&er in good faith has no merit because the deed of sale in favor of Iapus and the titles issued to him and his successors#in#interest are all a matter of public record in the registr& of deeds* 0hen a conve&ance has been properl& recorded, such record is a constructive notice of its contents and all interests, legal and equitable, included therein* Dnder the rule of notice, it is presumed that the purchaser has e;amined ever& instrument of record affecting the title* This presumption cannot be overcome b& proof of innocence and good faith otherwise the ver& purpose of the law requiring a record