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Laurel v. Garcia [G.R. No. 92013 & 92047. July 25, 1990.] Ojeda v. Macaraig [G.R.

No. 92047. July 25, 1990.] En Banc, Gutierrez, Jr. (J): 5 concur
Facts: The subject Roppongi property is one of the four properties in Japan
acquired by the Philippine government under the Reparations Agreement entered
into with Japan on 9 May 1956, the other lots being the Nampeidai Property (site of
Philippine Embassy Chancery), the Kobe Commercial Property (Commercial lot
used as warehouse and parking lot of consulate staff), and the Kobe Residential
Property (a vacant residential lot). The properties and the capital goods and services
procured from the Japanese government for national development projects are part
of the indemnification to the Filipino people for their losses in life and property and
their suffering during World War II. The Reparations Agreement provides that
reparations valued at $550 million would be payable in 20 years in accordance with
annual schedules of procurements to be fixed by the Philippine and Japanese
governments (Article 2, Reparations Agreement). RA 1789, the Reparations Law,
prescribes the national policy on procurement and utilization of reparations and
development loans; those which belong to the government and which may be availed
of by private entities. The Roppongi property was acquired from the Japanese
government under the Second Year Schedule and listed under the heading
“Government Sector”, through Reparations Contract 300 dated 27 June 1958. The
Roponggi property consists of the land and building “for the Chancery of the
Philippine Embassy.” As intended, it became the site of the
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Philippine Embassy until the latter was transferred to Nampeidai on 22 July 1976
when the Roppongi building needed major repairs. Due to the failure of our
government to provide necessary funds, the Roppongi property has remained
undeveloped since that time.
During the incumbency of President Aquino, a proposal was made by former
Philippine Ambassador to Japan, Carlos J. Valdez, to lease the subject property to
Kajima Corporation, a Japanese firm, in exchange of the construction of 2 buildings
in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine
Chancery in Nampeidai. The Government did not act favorably to said proposal,
but instead, on 11 August 1986, President Aquino created a committee to study the
disposition or utilization of Philippine government properties in Tokyo and Kobe
though AO-3, and AO 3-A to 3-D. On 25 July 1987, the President issued EO 296
entitling non-Filipino citizens or entities to avail of reparations’ capital goods and
services in the event of sale, lease or disposition. The four properties in Japan
including the Roppongi were specifically mentioned in the first “Whereas” clause.
Amidst opposition by various sectors, the Executive branch of the government has
been pushing, with great vigor, its decision to sell the reparations properties starting
with the Roppongi lot.
Two petitions for prohibition were filed seeking to enjoin respondents, their
representatives and agents from proceeding with the bidding for the sale of the
3,179 sq. m. of land at 306 Ropponggi, 5-Chome Minato-ku, Tokyo, Japan
scheduled on 21 February 1990; the temporary restaining order of which was
granted by the court on 20 February 1990. In G.R. No. 92047, a writ of mandamus
was prayed for to compel the respondents to fully disclose to the public the basis of
their decision to push through with the sale of the Roppongi property inspite of
strong public opposition and to explain the proceedings which effectively prevent
the participation of Filipino citizens and entities in the bidding process.
After multiple motions for extension to file comment by the respondents, the
Supreme Court resolved to decide the 2 cases; thereby granting the petitions and
enjoining the respondents from proceeding with the sale of the Roppongi property
in Tokyo, Japan. The Court also made permanent the 20 February 1990 temporary
restaining order.
1. Roponggi lot is a property of public dominion The nature of the Roppongi lot as
property for public service is expressly spelled out. It is dictated by the terms of the
Reparations Agreement and the corresponding contract of procurement which bind
both the Philippine government and the Japanese government, that these were
assigned to the government sector and that the Roppongi property itself was
specifically designated under the Reparations Agreement to house the Philippine
Embassy. There can be no doubt that it is of public dominion unless it is
convincingly shown that the property has become patrimonial; which respondents
have failed to show.
2. Property of public dominion outside the commerce of man As property of public
dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.
Its ownership is a special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in the social group.
The purpose is not to serve the State as a juridical person, but the citizens; it is
intended for the common and public welfare and cannot be the object of
3. Pertinent provisions of the Civil Code Article 419 provides that “property is
either of public dominion or of private ownership.” Article 420 provides that
property of public dominion includes “(1) those intended for public use, such as
roads, canals, rivers, torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character; (2) those which belong to the
State, without being for public use, and are intended for some public service or for
the development of the national wealth.” Article 421 provides that “all other
property of the State, which is not of the character stated in the preceding article, is
patrimonial property.” In the present case, the Roppongi property is correctly
classified under paragraph 2 of Article 420 of the Civil Code as property belonging
to the State and intended for some public service.
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4. Conversion to patrimonial property happen if property is withdrawn from public
use; Abandonment must be certain and positive act based on correct legal premises
The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such
conversion happens only if the property is withdrawn from public use (Cebu
Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property 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 (Ignacio v. Director of Lands, 108 Phil. 335 [1960]) An
abandonment of the intention to use the Roppongi property for public service and to
make it patrimonial property under Article 422 of the Civil Code must be definite.
Abandonment cannot be inferred from the non-use alone specially 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 property (See Heirs of Felino
Santiago v. Lazarao, 166 SCRA 368 [1988]). Abandonment must be a certain and
positive act based on correct legal premises. In the present case, the recent
Administrative Orders authorizing a study of the status and conditions of
government properties in Japan were merely directives for investigation but did not
in any way signify a clear intention to dispose of the properties. Further EO 296
does not declare that the properties lost their public character, but merely intends to
make the properties available to foreigners and not to Filipinos alone in case of a
sale, lease or other disposition.
5. RA 6657 does not authorize the disposition of Roppongi property as it is outside
the commerce of man; EO 296 amended nationality provision for the sale of
procurements for the private sector, not the procurements for the government (the
latter which includes Roppongi property) EO 296 is based on the wrong premise or
assumption that the Roppongi and the three other properties were earlier converted
into alienable real properties. RA 1789 differentiates the procurements for the
government sector and the private sector (Sections 2 and 12, RA 1789). Only the
private sector properties can be sold to end-users who must be Filipinos or entities
owned by Filipinos. It is this nationality provision which was amended by EO 296.
Further, Section 63 (c) of RA 6657 (the CARP Law) which provides as one of the
sources of funds for its implementation, the proceeds of the disposition of the
properties of the Government in foreign countries, did not withdraw the Roppongi
property from being classified as one of public dominion when it mentions
Philippine properties abroad. Section 63 (c) refers to properties which are alienable
and not to those reserved for public use or service. RA 6657, therefore, does not
authorize the Executive Department to sell the Roppongi property. It merely
enumerates possible sources of future funding to augment (as and when needed) the
Agrarian Reform Fund created under EO 299. Obviously any property outside of
the commerce of man cannot be tapped as a source of funds.
6. Conflict of law rule does not apply when conflict of law situation does not exist A
conflict of law rule cannot apply when no conflict of law situation exists. A conflict
of law situation arises only when: (1) There is a dispute over the title or ownership
of an immovable, such that the capacity to take and transfer immovables, the
formalities of conveyance, the essential validity and effect of the transfer, or the
interpretation and effect of a conveyance, are to be determined; and (2) A foreign
law on land ownership and its conveyance is asserted to conflict with a domestic law
on the same matters. Hence, the need to determine which law should apply. In the
present case, none of the above elements exists.
7. Issue on the authority of officials to dispose property belonging to state, and not
validity of ownership or title, in question; governed by Philippine law The issues are
not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by Philippine Law. The rule
of lex situs does not apply.
8. Opinion of Secretary of Justice irrelevant; Issue of whether the property can be
sold precedes
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the issue of who can acquire The assertion that the opinion of the Secretary of
Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion
does not tackle the alienability of the real properties procured through reparations
nor the existence in what body of the authority to sell them. In discussing who are
capable of acquiring the lots, the Secretary merely explains that it is the foreign law
which should determine who can acquire the properties so that the constitutional
limitation on acquisition of lands of the public domain to Filipino citizens and
entities wholly owned by Filipinos is inapplicable. There is no need to discuss who
can acquire the Roppongi lot when there is no showing that it can be sold.
9. Approval of the President of the recommendation of the committee to sell the
Roppongi property premature, and without force and effect of law The subsequent
approval on 4 October 1988 by President Aquino of the recommendation by the
investigating committee to sell the Roppongi property was premature or, at the very
least, conditioned on a valid change in the public character of the Roppongi
property. Moreover, the approval does not have the force and effect of law since the
President already lost her legislative powers. The Congress had already convened
for more than a year.
10. There is no law authorizing the conveyance of the Roppongi property;
Conveyance must be authorized by law enacted by Congress and requires executive
and legislative concurrence Section 79 (f) of the Revised Administrative Code of
1917 (Conveyances and contracts to which the Government is a party) provides that
“in cases in which the Government of the Republic of the Philippines is a party to
any deed or other instrument conveying the title to real estate or to any other
property the value of which is in excess of P100,000, the respective Department
Secretary shall prepare the necessary papers which, together with the proper
recommendations, shall be submitted to the Congress of the Philippines for
approval by the same. Such deed, instrument, or contract shall be executed and
signed by the President of the Philippines on behalf of the Government of the
Philippines unless the Government of the Philippines unless the authority therefor
be expressly vested by law in another officer.” The requirement has been retained in
Section 48, Book I of the Administrative Code of 1987 (EO 292; Official authorized
to convey real property), which provides that “Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: (1) for property belonging to
and titled in the name of the Republic of the Philippines, by the President, unless the
authority therefor is expressly vested by law in another officer; (2) for property
belonging to the Republic of the Philippines but titled in the name of any political
subdivision or of any corporate agency or instrumentality, by the executive head of
the agency or instrumentality.” Thus, it is not for the President to convey valuable
real property of the government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the Congress. It requires
executive and legislative concurrence.
11. 1989 case on the Roppongi property: Ojeda v. Bidding Committee; Issue
different The resolution of the Supreme Court in Ojeda v. Bidding Committee, et
al., did not pass upon the constitutionality of EO 296 nor did it uphold the authority
of the President to sell the Roppongi property. The Court stated that the
constitutionality of the executive order was not the real issue and that resolving the
constitutional question was “neither necessary nor finally determinative of the
case.” The Court noted that “[W]hat petitioner ultimately questions is the use of the
proceeds of the disposition of the Roppongi property.” In emphasizing that “the
decision of the Executive to dispose of the Roppongi property to finance the CARP
cannot be questioned” in view of Section 63 (c) of RA 6657, the Court did not
acknowledge the fact that the property became alienable nor did it indicate that the
President was authorized to dispose of the Roppongi property. The resolution
should be read to mean that in case the Roppongi property is re-classified to be
patrimonial and alienable by authority of law, the proceeds of a sale may be used for
national economic development projects including the CARP.
12. Constitutional questions raised in the Supreme Court
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The Court does not ordinarily pass upon constitutional questions unless these
questions are properly raised in appropriate cases and their resolution is necessary
for the determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will
not pass upon a constitutional question although properly presented by the record if
the case can be disposed of on some other ground such as the application of a statute
or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909],
Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]).
13. Value of the Roppongi property; besides economic and financial benefits The
Roppongi property is valuable not so much because of the inflated prices fetched by
real property in Tokyo but more so because of its symbolic value to all Filipinos —
veterans and civilians alike. The Roppongi property is not just like any piece of
property. It was given to the Filipino people in reparation for the lives and blood of
Filipinos who died and suffered during the Japanese military occupation, for the
suffering of widows and orphans who lost their loved ones and kindred, for the
homes and other properties lost by countless Filipinos during the war. The Tokyo
properties are a monument to the bravery and sacrifice of the Filipino people in the
face of an invader. Roppongi is a reminder that cannot — should not — be