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Esguerra, J.
No. L-29788. – August 30, 1972
● Feb 24, 1919: The 4th Branch of the CFI of Manila declared the City of Manila the owner in fee simple1 of a parcel
of land known as Lot No. 1, Block 557
● Aug. 21, 1920: The Register of Deeds of Manila issued in favor of the City of Manila, Original Certificate Title No.
4329 covering said parcel of land
● In 1924, the City of Manila sold portions of the aforementioned parcel of land in favor of Villanueva
 OCT No. 4329 was cancelled and transfer certificates of title were issued in favor of Villanueva for the
portions she purchased
● Aug. 22, 1924: When the last sale to Villanueva was effected, TCT No. 21974 in the name of City of Manila was
cancelled, and in lieu thereof TCT No. 22547 was issued in the latter’s favor
 The TCT covered the residue thereof known as Lot 1-B-2-B of Block 557
● Sept. 21, 1960: The Municipal Board of Manila adopted a resolution requesting the President to consider the
feasibility of the City property under TCT No. 25545 and 22547, as a patrimonial property of the City of Manila
for the purpose of reselling these lots to the actual occupants thereof
 The city property was bounded by Florida, San Andres and Nebraska Streets
 The resolution was transmitted to the President and Congress
● House Bill No.191 was filed in the House of Representatives by Cong. Cabangbang seeking to declare the
property in question as patrimonial property of the City of Manila. In the explanatory note, it said that:
 The City of Manila does not seem to have use of the subject property as public communal property
 The present occupants of the subject property have occupied it for a long time and have expressed their
willingness to buy it
● A revised version of the Bill was introduced in the House as HB No. 1453, with the explanatory note stating that:
 The Bill seeks to convert one parcel of land in the district of Malate, which is reserved as COMMUNAL
PROPERTY into a DISPOSABLE or ALIENABLE property of the State
o To provide its subdivision and sale to bona fide occupants or tenants
● June 20, 1964: Eventually the Bill was passed by the House and the Senate, and was approved by the President
● The Bill became RA 4118, which states that:
 Lot 1-B-2-B of Block 557, which is reserved as communal property, is hereby converted into disposal or
alienable land of the State, to be placed under the disposal of the Land Tenure Administration (LTA)
● Feb. 18, 1965: Deputy Governor Yap of the LTA furnished Mayor Villegas with a copy of the proposed subdivision
plan of said lot
 Mayor Villegas expressed that his office would interpose no objection to the implementation of RA 4118
o Provided that its provisions be strictly complied with
 Yap requested the City Treasurer for the surrender and delivery of the owner’s duplicate of TCT No.
22547 in order to obtain title thereto in the name of the LTA. The request was duly granted.
o The Register of Deeds, cancelled TCT No. 22547 and TCT No. 80876 was issued in favor of LTA
● Dec. 20, 1966: Mayor Villegas and the City of Manila brought an action for injunction and/or prohibition with
preliminary injunction against Salas (Executive Sec.), Estrella (Gov. of LTA), and Gella (Register of Deeds of
 To restrain, prohibit, and enjoin Salas, Estrella, and Gella from further implementing RA 4118
 Prayed that RA 4118 be declared unconstitutional
● Sept. 23, 1968: Judge Jarencio of CFI of Manila, Br. 23 ruled in favor of Villegas and the City of Manila
 Declared RA 4118 as unconstitutional and invalid
o Deprived the City of Manila of its property without due process and payment of just compensation
 Aside from the properties for public use enumerated in Art. 424 of the NCC, all other
property possessed by the city is patrimonial

A permanent and absolute tenure of an estate in land with freedom to dispose of it at will
 Congress does not have the power to declare the patrimonial properties owned by a city as
disposable or not
o The property in question is not communal property because the Original Certificate Title No. 4329
issued in favor the City of Manila in 1920 states that the City is the owner “fee simple” of said land
 Restrained and enjoined Salas and Estrella from implementing the provisions of said law
 Ordered Gella to cancel TCT No. 80876 and reinstate TCT No. 22547 in the name of the City of Manila
● A petition for review was filed by Salas et al. with the SC. Their arguments can be summarized as follows:
a. The land involved is originally “communal” land or legua comunal allocated to the City of Manila by the
Central government simply for the common use of its inhabitants
 The City of Manila, as successor of Ayuntamiento de Manila, merely enjoys the usufruct over said
 Its exercise of ownership by selling parts thereof to Villanueva in 1924 DID NOT necessarily convert
land into a patrimonial property of the City of Manila nor divest the State of its paramount title.
b. A municipal corporation is a governmental agent of the State, therefore, the extent of its power is
governed by State through Congress
 The mere transfer of the subject land, by an act of the legislature, from one class of public land to
another without compensation DOES NOT invade the City’s vested rights
c. RA 4118 has treated the land involved as one reserved for communal use
 This classification is conclusive upon the courts
 If the City of Manila feels that this is wrong and its interests have been prejudiced, the matter
should be brought to the attention of Congress for correction
1. W/N the property involved is private or patrimonial property of the City of Manila
HELD: NO, the City of Manila has not shown any shred of evidence that it acquired the land in question with its
private or corporate funds. Therefore, the treatment by Congress of the subject land as communal land through the
enactment of RA 4118 is a binding classification, which should not be interfered with by courts.
● GENERAL RULE: Regardless of the source or classification of land in the possession of a municipality, such land is
held in trust for the State for the benefit of the inhabitants, whether it be for governmental or proprietary
 Legua comunal came into existence when a town or pueblo was established in the country under the
laws of Spain2
 Spanish law provided that the usufruct of a portion of the public domain adjoining municipal territory
might be granted by the Government for communal purposes ONLY UPON PROPER PETITION
 Until said petition is granted, no rights therein passed to the municipalities, the ultimate title remained in
the sovereign
● EXCEPTION: Lands acquired by municipality through its own funds in its private or corporate capacity are not
held in trust for the State
● The City of Manila, although declared by the Cadastral Court as owner in fee simple, has not shown by any shred
of evidence in what manner it acquired said land as its private or patrimonial property
 The City could validly acquire property in its corporate or private capacity because of its dual character as
a public and private municipal corporation
 Therefore, when it comes to acquisition of land, it must have done so under any of the modes
established by law for the acquisition of ownership and other real rights
o In the absence of a title deed to any land claimed by the City as its own, showing that it was
acquired with its PRIVATE or corporate funds, the presumption is that such land came from the
State upon the creation of the municipality (which are held in trust for the State)
● Municipalities hold lands subject to the paramount power of the legislature to dispose of the same since it owes
its creation to it, as an agent for the performance of a part of its public work
 The legislature can transfer the administration and disposition of lands held by the municipality to an
agency of the National Government to be disposed of according to its discretion

Law VII, Title III, Book VI, Recopilacion de las Ley es de Indios
o Except when it comes to property of the municipality which it acquired with its own funds 
legislative control over municipal corporations is not absolute
● In the case at bar, Congress, in enacting RA 4118, transferred the administration and disposition of the subject
lands to the LTA in obedience to the constitutional mandate of promoting social justice by implementing the
Government program of “Land for the Landless”
 In doing so, it has dealt with the land as one reserved for COMMUNAL USE
 This act of classifying State property calls for the exercise of wide discretionary legislative power, and it
should not be interfered with by courts
2. W/N RA 4118 is unconstitutional for converting the land in question from patrimonial property of the City of
Manila into disposable alienable land of the State, thus depriving the City of its property without due process
HELD: NO, the subject land was not its patrimonial property to begin with. Congress enacted RA 4118 to confirm the
subject property’s character as communal land of the State.
● Congress cannot deprive a municipality of its private or patrimonial property without due process of law and
without payment of just compensation
 According to the Court, there is no quarrel over the rule that if it is undisputed that the property sought
to be taken is in reality a private or patrimonial property of the municipality or city
 However, the property, as has been previously shown, was not acquired by the City of Manila with its
own funds in its private or proprietary capacity
o That it has in its name a registered title is not questioned, but this title should be deemed to be
held in trust for the State
o The land was part of the territory of the City of Manila granted by the sovereign upon its creation
● The fact that the National Government, through the Director of Lands represented by the Solicitor General, did
not contest the claim of the City of Manila that the land is its property in the cadastral proceedings in 1919 DOES
NOT detract from its character as State property
 The State is not bound by the mistakes of its officers
● The City of Manila has expressly recognized the paramount title of the State over said land in its Municipal Board
resolution dated Sept. 20, 1960
 It requested the President to declare the city property in question as patrimonial property of the City of
Manila for the purpose of reselling the lots to the occupants
o If it were its patrimonial property, why should the City of Manila request the President to make
representation to the legislature to declare it as such?
 The alleged patrimonial character of the land under the ownership of the City of Manila is totally belied
by the City’s own official act, which is fatal to its claim since the Congress did not do as bidden
● The resolution was a blatant recognition of the fact that said land belongs to the State and was simply granted in
usufruct to the City of Manila for municipal purposes
 Since the City did not actually use said land for any recognized public purpose, no presumption of State
grant of ownership in favor of the City of Manila may be acquiesced in to justify the claim that it is its
own private or patrimonial property
● In conclusion, RA 4118 was never intended to expropriate the property involved but merely to confirm its
character as communal land of the State and to make it available for disposition by the National Government
 This was done at the request of the City of Manila itself through its Municipal Board
 The subdivision of the land and conveyance of the resulting subdivision lots to the occupants does not
operate as an exercise of the power of eminent domain, but simply as a manifestation of its right and
power to deal with state property
o Moreover, the sequence of events that followed in implementation of RA 4118 (e.g. voluntary
surrender of duplicate title, furnishing of copy of subdivision plan), indicates a pattern of regularity
and observance of due process in the reversion of the property to the National Government
WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with the free and untrammeled
implementation of Republic Act No, 4118 without any obstacle from the respondents. Without costs.